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Home My WebLink AboutCSD-09-032 - 2009 Regional Mainenance AgreementI I~~c~~R. Community Servrees REPORT TO: Community Services Committee DATE OF MEETING: May 11, 2009 SUBMITTED BY: Jim Witmer, Director of Operations PREPARED BY: Jim Witmer WARD(S) INVOLVED: All DATE OF REPORT: April 14, 2009 REPORT NO.: CSD-09-032 SUBJECT: REGIONAL MAINTENANCE AGREEMENT 2009 RECOMMENDATION: That the Mayor and Clerk be authorized to sign an agreement with the Regional Municipality of Waterloo, satisfactory to the City Solicitor, for the City of Kitchener to provide summer and winter maintenance services on selected Regional Roads within the City of Kitchener for 2009. BACKGROUND: Since the formation of the Region of Waterloo in 1973 the City of Kitchener has provided winter and summer maintenance of Regional Roads within the City of Kitchener boundaries. The rationale to continue providing this service has been long standing, as prior to 1973 all roads within the city boundary were maintained by the City of Kitchener and resources levels were structured to provide this service level. Additionally there are economies of scale that allows for efficient deployment of resources to maintain all roads within the city regardless of their ownership. By example, snow ploughs required to plough City streets typically need to travel along Regional roads to get to the city streets, so maintaining Regional roads makes good sense. Since 1973 the Region has paid the City of Kitchener annually for the time, equipment, material and overhead costs associated with providing this service. REPORT: The winter and summer routine maintenance of Regional Roads within the City of Kitchener has been traditionally adopted by both municipalities utilizing a purchase order supported by standard terms and conditions. Prior to the agreement, annual expenses by the City would be invoiced to the Region for payment. The amount of payments would fluctuate yearly mainly dependent on the severity of the winter. The non-winter activities remain consistent, changing only with the growth of the infrastructure. 1- 1 In 2005, the Region of Waterloo requested that a formal agreement be put in place with all municipalities within the Region of Waterloo to annualize the costs associated with road maintenance allowing each municipality the opportunity to budget for the maintenance. Base rates were calculated utilizing a 5 year average of expenses across the Region and a common winter and summer lane kilometer rate was established. The established rates also allow for annual increases attributed to inflation factoring blended increases in labour, material and equipment costs as well as system growth. Winter activities normally account for 65-70% of maintenance costs incurred annually and a reserve fund was established for years when winter costs exceeded the lump sum budget. The reserve fund is financed from excess revenues when actual winter costs are less than the lump sum amount. The agreement also includes a provision for when exceptional winter conditions occur. Should the total costs for winter maintenance fall within 10% of the baseline average then there is no adjustment made to the lump sum amount. Should the total winter costs exceed 110% of the baseline average and that amount is consistent amongst each of the area municipalities and the Region, then the Region will pay the amount which exceeds the 110% of the baseline average. The agreement was in place for three (3) years with a provision to extend the agreement for an additional two (2) years, based on mutual agreement and satisfactory performance. The current agreement includes all activities which provide routine maintenance for: • Winter snow and ice control • Summer maintenance including maintenance of surface, shoulders and drainage • Vegetation management • Emergency response (accidents, washouts, spills, etc) • Traffic safety devices damage repair (guide posts, steel beam) • Additional preventative maintenance agreed to by both municipalities. The agreement does not include: • Sign installation and traffic control signal maintenance • Center and edge line painting and special markings and crosswalks • Bridge maintenance (except sweepings) • Crack sealing, street lighting, rail crossings, sidewalks • Water main repair or maintenance The current agreement with the Region expired December 31St, 2008. Recent discussions with the Region of Waterloo have determined that they are prepared to extend the previous agreement with the City of Kitchener for one additional year based on the terms and conditions in that agreement along with the following changes: 1-2 a) The contract payment amount for 2009 will be on a "time and material" basis instead of a lump sum amount per lane kilometer. b) The Region will provide payments on a monthly basis based on the invoices submitted monthly by the City of Kitchener. c) The City of Kitchener will provide the Region on a monthly basis with the details on their monthly expenditures as per the attached "template". In addition, when requested, the City will provide additional details if necessary to support the information noted in the "template". d) The City and Region agree that in the event the City "summer activity" costs are expected to exceed the overall Regional budget provided to them then the lower service levels for various summer activities, as agreed to in advance, will be implemented with the goal of remaining within the overall budget. FINANCIAL IMPLICATIONS: None at this time. CONCLUSION: The three cities and the Region are beginning negotiations for a new contract for 2010 and beyond which reflects changes in operating standards as well as to address current deficiencies relating to costs required to be absorbed by the City while undertaking the work identified in the contract. The "time and material" costing for 2009 will allow the identification of areas where funding is adequate to support the activities or insufficient based on growth, standards etc., and/or new more reliable data. If delivery of the service is to continued then an annual subsidy by the City should not continue. ACKNOWLEDGED BY: Pauline Houston, General Manager, Community Services Department 1-3 ~..;, ~ ''. 1-4 Extension Agreement for Local Municipality Maintenance Agreement Memorandum of Extension Agreement between The Regional Municipality of Waterloo (hereinafter called the "Region") and The Corporation of the City of Kitchener (hereinafter called the "Local Municipality"). WHEREAS the Region and the Local Municipality entered into a Local Municipality Maintenance Agreement for a term of January 1, 2006 to December 31, 2008 with the option to extend the term for up to two additional years; AND WHEREAS the Local Municipality Maintenance Agreement allowed the Region and the Local Municipality to resolve certain disputes through Clause 4.3, Dispute Resolution; AND WHEREAS the Region and the Local Municipality wish to extend the term of the Local Municipality Maintenance Agreement to December 31, 2009; AND WHEREAS the Region and the Local Municipality wish to resolve certain disputes that arose during the initial term of the Local Municipality Maintenance Agreement; NOW THEREFORE WITNESSETH that in consideration of the covenants herein, the Region and the Local Municipality mutually agree as follows: That the term of the Local Municipality Maintenance Agreement shall be extended to December 31, 2009. 2. The contract payment amount for 2009 will be on a "time and material" basis instead of a lump sum amount per lane kilometer. 3. The Region will provide. payments on a monthly basis based on the invoices submitted monthly by the City of Kitchener. 4. The City of Kitchener will provide the Region, on a monthly basis, with the details on their monthly expenditures as per the attached "template". In addition, when requested,. the City will provide additional details if necessary to support the information noted in the "template". . 5. The City and Region agree that in the event the City "summer activity" costs are expected to exceed the overall Regional budget provided to them then lower service levels for _= vari_ni_is_si_immer_ar_.tisritie~ac-a~r_eed_tn_i_nadvan.C_e~wil_l _he_i_mnlemPnted wi_th_th.e$oa1-0f - remaining within the overall budget. 6. That all other terms and conditions of the Local Municipality Maintenance Agreement shall remain in effect for the extended term. 1-5 Signed this day of , 2009. THE REGIONAL MUNICIPALITY OF WATERLOO Thomas Schmidt, Commissioner, Transportation and Environmental Services I have authority to bind the Corporation. Signed this day of , 2009. THE CORPORATION OF THE CITY OF KITCHENER Name: Title: Name: Title: UWe have authority to bind the Corporation. 1-6