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REPORT TO GENERAL COMMITTEE |
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TO: |
Mayor and Members of Council |
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FROM: |
Jim Baird, Commissioner of Development Services |
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Alan Brown, Director of Engineering |
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PREPARED BY: |
Alan Brown, Director of Engineering |
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DATE OF MEETING: |
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SUBJECT: |
Engineering Department Capital Project Process |
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RECOMMENDATION:
That the
And that the process
improvements as listed in the report be endorsed;
And that engineering staff
update Council on at least a quarterly basis on the status of major capital
projects as listed in the report;
And that the merit of a quarterly
update to Council on Park projects and Community Services Commission capital
projects be considered by the Building/Parks Construction
Committee.
PURPOSE:
To recommend improvements in
reporting of major
EXECUTIVE
SUMMARY:
Council, as a result of issues
arising from the Enterprise Drive/GO and Rodick
Road/Hwy 407 grade separations projects, requested staff to review engineering
capital project processes and recommend improvements to such and communications
with Council.
In addition, during the 2006
Budget Review Process questions arose to the assessment and disposition of
contingencies for capital projects in general.
Staff have prepared a number of
recommendations that will address Council’s concerns including:
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Not tendering projects
unless all property, approvals and agreements are in place
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At least quarterly
update to Council on major projects
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Council’s assistance in
obtaining agencies approvals in a timely fashion
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Reporting of contingency
expenditures.
BACKGROUND:
At the
Council requested staff report
back on how delay claims can be avoided in the future, more regular updates to
Council, financial practices/processes and an update to the Development Charges
by-laws to reflect increased capital costs.
While this report responds to
most of the issues raised by Council, a separate report on the update of the
Development Charges By-law will be presented to General Committee in February 2006. In addition upon completion of Enterprise
Blvd/GO Transit and Rodick Road/Hwy 407 grade
separation projects, a final report outlining the final project costs will be
submitted to Committee.
Council Updates
In the past, reports were
brought forward to Council only at key decision making points (i.e. award of
tender, property acquisition, Environmental Assessments, project cost overrun
over $100,000, etc.).
Council has requested, in
future, more frequent updates on critical projects and issues which may delay
the project or increase its budget. Staff recommend at least quarterly updates on critical
projects on the following issues:
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EA status
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Project management process
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Property acquisition status
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Agency approval status
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Construction schedule
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Budget Status
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Utilization of Contingencies
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Key Issues
The Capital projects (both
carryover and 2006) to be managed by the
Roads
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Rodick Road/Hwy 407 grade separation
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Hwy 404 grade separation at
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Woodbine By-pass around
Environmental
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Pomona Mills Creek Environmental Study
Servicing
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Hagermans Corner rail/rail separation –
servicing relocation
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Hwy 7 Sanitary Sewer and
Transportation
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Bike Path System
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Travel Demand Management
Staff will monitor the overall
project status list, and will bring updates to Council on other projects as
required or as Council requests.
With the above updates Council
will be better apprised of the ongoing step by step progress of those capital
projects identified by Council as being of key strategic or financial priority.
Parks/Building
Currently both Parks and
Building projects are vetted through the Parks/Building Sub-committee. Senior staff will be reviewing with the
Committee if further updates on these projects on a quarterly basis are
required.
Tendering Process
Stemming from the significant
delay claims on the Enterprise Drive/GO and Rodick
Road/Hwy 407 grade separation projects (primarily as a result of delay in
acquiring external agencies agreements, permits, property and in the case of
the Enterprise project, capital works to be undertaken by GO Transit), Council
on September 13, 2005 instructed engineering staff to delay the tendering of
future construction contracts for all engineering capital works until all
necessary approvals/agreements from external agencies are received to the
satisfaction of the Director of
The Engineering Department has
accordingly adjusted its 10 year Capital Program to reflect the approval
process time frames currently encountered.
The Engineering Department 10 Year Capital Program Update for roads,
sidewalk and illumination will be submitted along with the Finance Department
Cash Flow analysis on
Contingencies/Expenditure
Control
At the December 5 and 6th
2005 General Committee and Budget Committee, concerns were raised regarding the
process for expenditures of contingencies for capital projects in general.
At the award of tender for all
major capital projects (roads, sewers, watermain,
building, parks, etc.) a contingency is included as part of the tender award.
The contingency value varies from 2% to 7% depending on the value of the
contract, complexity of the project and degree of unforeseen additional work
which may be encountered during construction.
The expenditure of
contingencies must be approved in accordance with the Expenditure Control
Policy, which authorises the user Department Director or other senior staff to
award expenditures only up to the preset limit.
If the contingencies are expected to be exceeded, then Council approval
is required to increase the limit. Staff
as part of the quarterly update will include a summary of contingency
expenditures.
As per the Expenditure Control
Policy the level of authority for Capital expenditures that exceed the awarded
project budget is as follows:
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Director - $ 10,000 and less than 10% of
contract value
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Commissioner - $ 25,000 and less than 10% of
contract value
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Treasurer - $ 50,000 and less than 10% of
contract value
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CAO - $100,000 and less than 10% of
contract value
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Council - greater than $100,000.
Project Management
To address the magnitude (over
80) and complexity of projects from a coordination, agency approval, property
acquisition and management perspective, the following improvements in the
engineering project management process have been implemented:
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Addition of one senior contract position in 2005 to assist in management
of projects
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Bi-weekly meetings between Director, Manager and Engineers to review
status, issues and next steps for each project
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Addition of one senior property acquisition staff in the Legal
Department in 2005 to acquire the necessary property/easements for the capital
projects
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Weekly meetings with Legal Department to review property acquisition
status
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Utilization of MS Project Management software.
BUSINESS UNITS
This report was reviewed at
the February 11 and 18th 2006 CAO/Commissioners meetings and
revisions have been incorporated.
ATTACHMENTS:
Attachment ‘A’ – Capital
Project List – 2006 and Carryover
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Alan Brown, C.E.T. Director of Engineering |
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Jim Baird, M.C.I.P., R.P.P. Commissioner of Development
Services |
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Q:\Development\Engineering\REPORTS\2006\Jan\Capital
Project Process 012406.doc