Increase in Engineering Services Fees for the Design and Construction of Master Plan Drainage Area 8 (Arcola Avenue Detention Facility)

PUBLIC WORKS AND INFRASTRUCTURE COMMITTEE – FEBRUARY 9, 2017

The Committee adopted a resolution to concur in the recommendation contained in the report.  Recommendation #2 does not require City Council approval.

Councillors:  Sharron Bryce (Chairperson), Lori Bresciani, John Findura, Jason Mancinelli and Barbara Young were present during consideration of this report by the Public Works and Infrastructure Committee.

The Public Works and Infrastructure Committee, at its meeting held on February 9, 2017, considered the following report from the Administration:

RECOMMENDATION

1.      That City Council delegate authority to the Executive Director of Transportation & Utilities to extend the commission to AECOM Canada Ltd. (AECOM) to exceed $500,000.00 to complete the design, tender preparation and construction supervision of the Arcola Avenue Detention Facility Project.

2.      That this report be forwarded to the February 27, 2017 meeting of City Council for approval.

CONCLUSION

The City of Regina (City) is constructing the Arcola Avenue Detention Facility to address flooding concerns in the triangular neighborhood bounded by Arcola Avenue to the north, Winnipeg Street to the west and Victoria Avenue to the south.

The scope of work for this project was strategically divided into two phases:

·         Phase I

a) Review and update of proposed improvements; and

b) Detailed design.

·         Phase II

a) Tendering services;

b) Construction services; and

c) Post-construction services.

The scope of work was phased because the City did not want to commit to Phase II until the construction scope, schedule and costs were successfully completed at the end of Phase I to the satisfaction of the City.

Based on the predesign and original scoping costs were estimated at approximately $5 million. Following Phase I, the detailed design phase, it was determined that the project scope was larger than expected due to site constraints, addition of a stormwater lift station and additional large diameter storm sewers required. This increased the estimated total project cost to approximately $8.5 million. To support this expanded project, the costs associated with the engineering consulting also needed to increase from the original estimate of $450,000 to $871,535.60. This additional fee is approximately 10% of the total estimated construction cost of $8.5 million. AECOM’s overall fees remain reasonable and in line with construction projects of similar size and complexity.

The Regina Administration Bylaw, No. 2003-69, Schedule D, Section 8, permits the City Manager to approve professional and consulting service fees in excess of $500,000.00 but does not provide authority for the City Manager to delegate that authority to another member of the Administration. For efficiency, the Administration requests that City Council delegates authority to the Executive Director of Transportation and Utilities to extend the commission to AECOM to complete the design, tender preparation and construction supervision of the Arcola Avenue Detention Facility Project.

BACKGROUND

Master Plan Drainage Area 8 (Area 8) is located in East-Central Regina and consists of the neighborhoods of Al Ritchie, Heritage and Boothill. AECOM completed a drainage pre-design study in 2014 for Area 8 and identified several problem areas (concentrated areas with higher incidences of flooding). In particular, the City is concerned about flooding that occurs in the triangular neighborhood bounded by Arcola Avenue to the north, Winnipeg Street to the west and Victoria Avenue to the south. As well, the section of Arcola Avenue from Winnipeg Street to Victoria Avenue is a main access to downtown, but is highly susceptible to flooding conditions thereby impeding its use during even relatively low intensity rainfalls.

To reduce the risk of flooding in this area, the pre-design study proposed constructing a stormwater detention facility in the northeast corner of the intersection at Arcola Avenue and Victoria Avenue (Arcola Avenue Detention Facility) and installing a considerable amount of large diameter storm sewers in the industrial and residential areas located north and south of Arcola Avenue, respectively. This improvement was identified as having the highest benefit-cost ratio in comparison to other proposed improvements in Area 8.

The City agreed with AECOM’s recommendation of constructing the Arcola Avenue Detention Facility, but felt that further analysis was necessary to confirm the areas requiring new storm sewers. Accordingly, the Arcola Avenue Detention Facility Project was advanced to detailed design and construction, but the scope of work in the Request for Proposal (RFP) was strategically divided into two phases, namely:

·         Phase I:

a) Review and update of proposed improvements; and

b) Detailed design.

·         Phase II:

a) Tendering services;

b) Construction services; and

c) Post-construction services.

The inclusion of Phase I (a) addressed the City’s preference for further analysis on improvement options, including their impact on reducing flood risks, prior to entering detailed design. The commission of Phase II would be subject to a consultant performance review and funding approval. This means that the City is not obligated to appoint Phase II work to the Phase I consultant and can terminate the contract with the consultant if the City is not satisfied with their performance, or if the City is unable to proceed due to funding reasons.

The City issued an RFP to engage a professional consulting firm to deliver this project. After completing a thorough evaluation, AECOM was the highest ranked proponent, and therefore, the City awarded a contract for the Arcola Avenue Detention Facility Project to AECOM on July 16, 2015 with an upset fee in the amount of $173,800 (excluding taxes) for Phase I work only. This contract provided that the City and AECOM would negotiate and establish the fee for Phase II work at the end of Phase I, after confirmation of construction scope, schedules, cost estimates, and upon receiving positive performance review and funding approval.

DISCUSSION

In light of the field data and computer simulation results that AECOM conducted during the detailed design phase of the project, it became apparent that a number of site constraints existed that required major design revisions from the original design outlined in the pre-design study.

The two major design revisions identified were:

1.      The detention facility had to be designed deeper than AECOM proposed in the pre-design study, due to site constraints such as existing underground utilities and future realignment of 12th Avenue. The detention facility’s new depth made it impossible for the detention facility to drain by gravity, requiring the design and construction of a stormwater lift station.

2.      Additional large diameter storm sewers were required on McDonald Street and 11th Avenue to intercept and convey flows to the detention facility. With the addition of these large diameter storm sewers, the storage capacity of the detention facility can be fully utilized to improve the level of service of nearby problem areas.

These necessary design revisions significantly increased the anticipated construction scope, duration, and costs. Accordingly, the Administration decided to divide the construction work over multiple years instead of constructing the entire project in 2016, due to the risks associated with completing this amount of construction work in one season. With the construction work divided over multiple years, the lightened construction scope and schedule will be achievable for most contractors and should result in favourable bids. The increased timeline and scope of work, however, results in additional engineering service costs.

The City was satisfied with AECOM’s successful completion of Phase I and commissioned AECOM to complete Phase II of the Contract. The work required in the first year of construction was estimated at $3.7 million. The engineering services during 2016 construction were still within the originally estimated fees and the only unforeseen incident that caused additional work was due to the uncovering of site contamination on a small area of the work site.

The engineering services upset fee for AECOM (including Phase I and the 2016 portion of the Phase II work) is currently at $471,535.60 (excluding taxes) and the breakdown is as follows:

The City and AECOM are in the process of finalizing the detailed design of the 2017 construction work. The intent of this phase of construction is to reduce the risk of flooding to the residential area south of Arcola Avenue, which was identified as a problem area in the pre-design study. The construction scope includes the following major work items:

·         installation of large diameter storm sewers on residential streets;

·         replacement of water mains and service connections; and

·         road and sidewalk rehabilitation.

The Administration requests City Council’s approval to delegate the authority from the City Manager to the Executive Director of Transportation & Utilities to approve the revised AECOM fee. The City expects AECOM’s fees for completing additional detailed design, administering tendering and construction supervision in 2017/18 to be approximately $400,000, based on the estimated construction cost of $5 million. The addition of this project fee will increase the total upset fee of the Engineering Services Agreement with AECOM in excess of $500,000, namely approximately $871,535.60. This new total upset fee is approximately 10% of the total estimated construction cost of $8.5 million (2016 actual: $3.5 million and 2017/18 estimated: $5 million). Despite exceeding the $500,000 threshold, AECOM’s overall fees remain reasonable and in line with construction projects of similar size and complexity.

RECOMMENDATION IMPLICATIONS

Financial Implications

The initial engineering services upset fee with AECOM was $173,800 (excluding taxes). This amount was increased to $471,535.60, to include year one of the Phase II work outlined in the agreement. The City expects AECOM’s engineering services upset fee to increase by approximately $400,000 to a new total upset fee of $871,535.60 to include year 2 of the Phase II work. This new total upset fee is approximately 10% of the total estimated construction cost of $8.5 million (2016 actual: $3.5 million and 2017/18 estimated: $5 million). Despite exceeding the $500,000 threshold, AECOM’s overall fees remain reasonable and in line with construction projects of similar size and complexity.

Funding in the amount of $500,000 was approved in 2015 Utility Budget to allow the commission of engineering services for detailed design, tender preparation, and construction supervision. Funding in the amount of $4,000,000 was approved in 2016 Utility Budget to allow the construction to occur in 2016. Funding in the amount of $4,000,000 was pre-approved in December 2016 (2017 Utility Budget) to allow the design and construction of 2017 construction work. There is sufficient money in the project’s budget to cover AECOM’s fees.

Environmental Implications

None with respect to this report.

Policy and/or Strategic Implications

This project is consistent with the Official Community Plan as it will “Support runoff infiltration and retention by: continuing to reduce the incidence of water runoff being directed to the sanitary system”. Additionally, improvements to our financial viability will be made through collaboration with the underground infrastructure and the road program, and will ultimately reduce cost from a whole life cycle perspective.

Other Implications

None with respect to this report.

Accessibility Implications

None with respect to this report.

COMMUNICATIONS

None with respect to this report.

DELEGATED AUTHORITY

The recommendation contained in this report requires City Council approval.

Respectfully submitted,

PUBLIC WORKS AND INFRASTRUCTURE COMMITTEE

Elaine Gohlke, Secretary