Loading...
2010-07-14_Agenda Packet--Dossier de l'ordre du jourCity of Saint John Common Council Meeting Monday, July 14, 2010 Location: Common Council Chamber Committee of the Whole 1. Call to Order 5:00 p.m. 8th Floor Boardroom City Hall 1.1 Financial Matter 10.2(4)0) Special Meeting of Common Council 1. Call to Order - Prayer 6:30 p.m. Council Chamber 13.1 Peel Plaza Ville de Saint John Seance du conseil communal Le lundi 14 juillet, 2010 Comite plenier 1. Ouverture de la seance 17 h Salle de conference, 8e Rage, hotel de ville 1.1 Question financiere - alinea 10.2(4)c) Seance ordinaire 1. Ouverture de la seance, suivie de la priere 18 h 30 - Salle du conseil 13.1 Peel Plaza The aty of.wntjohn July 9, 2010 Notice of Special Meeting Feel Plaza Members of Common Council, A Special meeting of the Committee of the Whole closed session will take place at 5:00 p.m. in the 8th floor boardroom of City Hall on Wednesday, J''uly 14th, 2010 to discuss Peel Plaza 10.2(4)(c). Subsequently, a special Council meeting open to the public will take place in the Council Chamber beginning at 6:30 p.m. to discuss Peel Plaza. Sincerely, L Ivan Court Mayor ( D--, - I I SAINT JOHN P.O. Box 1971 Saint John, NB Canada £2L 4L1 ~ www.saineiohn.ca ~ CA 1971 Saint John, N,-B. Canada E2L 40 City Managers Office P.O. Box/C.P. 1971 Bureau du directeur general Saint John, NB/N.-B. Canada E2L 4L1 ti.E ~v kv, vv, sa i rl i~jo hr t. ca COMMITTEE OF THE WHOLE --10.2(4)(c) c_ The July 12, 2010 His Worship Mayor Ivan Court and Members of Common Council Your Worship and Councillors, Peel Plaza - Police HQ Tender Background - The Components The City of Saint John has identified the need for a new Police Headquarters to meet the operational requirements of the Police Force. As well, the Province of New Brunswick has identified the need for a new integrated Justice building that would modernize and centralize their court operations in the Saint John region. A common location in the uptown adjacent to the Carnegie Building has been identified as the preferred location for these facilities. The need for four additional components has also been identified. First, the need for a single Holding Facility to avoid unnecessary duplication. Second, a common Public Plaza to bring the Arts Centre and Justice facility together as `a development' and create a truly public place. Third, the need for a public Parking Garage to accommodate the clients seeking service at these facilities, those who currently park on the lands to be used for the development, and the employees of the Police Facility and the Justice Facility. Fourth, needed infrastructure upgrades (sidewalks, water, sewer, intersection lights etc.) to support an integrated development. Following an assessment of the P3 process, Common Council approved a move to a traditional tender approach for each of the major components of the development. The first tender issued was for the Police Headquarter to be followed by the infrastructure improvements, parking structure and finally the plaza component. The purpose of this report is to make a recommendation regarding award of the tender for the Police Headquarter building. The related analysis is considered in the context of the Peel Plaza development as a whole. The Desired Outcomes - What are we trying to achieve? The Peel Plaza development arose from a desire to take full advantage of a substantial public investment in this area of the Uptown by the Province and the City to; • trigger additional renewal in the uptown, • secure a new Police HQ that meets the operational requirements of the police force • use high quality development to set the bar for further renewal in the area, • avoid unnecessary duplication of costly public facilities (holding cells, parking, public spaces), • encourage new private sector investment in the surrounding area, • create needed public facilities that are a lasting source of pride in the community, • build on the substantial public infrastructure in the area (Arts Centre, Pedway etc) to demonstrate confidence in the future of the City, and • ensure that taxpayers get the maximum return on their public investment. Foremost is the need for the construction of the new Police HQ to address the longstanding operational shortcomings that arise in the current multi-story office location. To meet service expectations the police department requires a modern facility designed to support and enhance service delivery. The police force presently occupies space in four buildings throughout the City of Saint John. There have been six (6) independent building studies that have each indicated that the present city hall facilities are inadequate. In total, approximately 85 issues have been listed in the past reports such as; poor design issues, substandard detention cells, unsafe identification laboratory, no shooting range for required use of force training, serious and unsafe circulation issues for all users of the facilities, incompatibility with adjacent users, unsafe handling and storage of exhibits, spaces which should be extremely public are not very public, spaces which should be extremely secure are not secure and serious morale issues for employees. These concerns/issues also serve to create an unproductive work environment. While the noted community outcomes and operational needs are the main drivers in this undertaking there is also a need to ensure that vehicular traffic patterns, pedestrian access, public amenities, off-street parking, public transit, as well as the scale, style and character of the new buildings are well planned, well integrated, fully serve their intended purpose and meet community expectations. Finally, it is equally important that we act responsibly with the public purse and that the execution of this project not create an unacceptable financial burden (debt, operating 2 costs) over the long-term. The goal is to get the best value for the taxpayer both in the short-term and the long-term. Action to Date - Land, Consultants, Concepts, Public Input, Province NB The members of the Council appointed Steering Committee have been meeting regularly with their provincial counterparts. The Committee also meets regularly with City staff and the various consultants to coordinate efforts and provide direction on outstanding matters. Provincial and municipal staff representatives have also been meeting on a recurring basis to address a range of issues including, project scheduling, identifying project components, developing project costs, determining cost sharing arrangements coordinating architectural and project management efforts, procuring property and clarifying zoning and other bylaw requirements. The City has also negotiated the acquisition of a number of properties as part of the land assembly required for this development. As well, a number of professional consultants have been engaged as the development concept has taken shape including; Component I Consultant I Enzaized By I Police HQ I DFS Architects I Police Commission I Plaza and Public Spaces I Glenn Group I Citv of Saint John 'T'raffic Analysis I ADI I City of Saint John Public Consultations Cities and Environment I City of Saint John Parking Structure Ralph Bond/Reid Jones Parking Commission Christofferson Justice Building Murdock Boyd / ADI Province of New Brunswick Infrastructure Stantec City of Saint John Public Input - Process, Themes, Ideas Given the identified outcomes and the level of public investment in new infrastructure, it is evident that this project has the potential to fundamentally change the character of this area of the uptown. As a result, Council directed that a public engagement process be undertaken to solicit ideas and comment on the proposed development. 3 The public engagement process was meant to provide an opportunity for a broad range of interested citizens, interest groups and stakeholders to learn about the development, provide comment, submit ideas, raise concerns and voice their opinion(s). It was not meant to reflect only the ideas and concerns of specific individuals or groups but rather to yield a synthesis of the dominant themes and ideas presented during the sessions. As with any broad based consensus building exercise, some trade-offs and compromises were necessary. The summary of common ideas and input was then used as a tool to further adjust and refine the initial development concept. The City conducted four public meetings, solicited on-line comments and held a series of individual stakeholder meetings as part of the public engagement process. The level of participation was positive and the results were encouraging and informative. Some of the dominant themes included a desire for; ■ Open spaces, including green space that meets the needs of many people ■ Use of quality designs and construction materials ■ Residential development that brings people downtown ■ Parking facilities that integrate, not dominate any potential development ■ Relocating the Parking structure to the escarpment ■ Transportation options including pedestrian routes, and bicycle friendly roads ■ The integration of heritage buildings ■ A celebration of Arts and Culture ■ Vibrant streetscapes that encourage pedestrian traffic ■ A sustainable development that takes into consideration the environment and green design and building ■ Retaining land for future expansion of the Arts Center ■ Retaining a narrow traffic corridor on Union Street Staff from the Cities and Enviromnent Group at Dalhousie University previously reported on the results of their workshop portion of the public consultation. Their observations led to a series of recommendations in the form of `Big Ideas" and `Design Guidelines'. These guidelines were referenced during the final design and development process. Stakeholder Meetings In addition to the public consultations, City representatives held a series of individual stakeholder sessions. These included meetings with representatives from Vito's Restaurant, the Stone Church, Clark. Drummie, John Howard Society, Elizabeth Frye Society, Housing Alternatives, the Human Development Council and Correction Services Canada, Enterprise Saint John, Uptown Saint John and the Saint John Board of Trade. The key inputs from these sessions included, Strong support for transit services and need to manage traffic • Strong support for the police complex development-fits like a hand in a glove 4 • We have a very inefficient way of providing parking-one level surface parking in the uptown area • There should be a residential component to the development • Do not dwarf the Stone Church with future development - maintain site lines • Do not ignore social support needs of citizens living in the area Place structured parking on the Sewell St hill • The project needs to be reflective of the past-our history • Design the Police facility with a museum component inside to celebrate the history of our police service • Given the clustering of justice services in the immediate area it is the right thing to do • There are approximately 12 related criminal justice services in the immediate area-police/justice is the right fit • Common sense approach with respect to the police/justice complex, long overdue • Pedways are great, we need more, please connect the new development with the existing pedway system • This project is important for those who have already invested in the area-finally get a return on their investment • Business owner's willing to share in costs • Property owners willing to pay costs associated with pedways if it benefits their business • Do not remove the CFBC building • The block has been vacant (empty parking) for over 25 years, finally something that makes sense-just make it happen New Development Approach In practical terms, application of the identified Big Ideas and Design Guidelines and the overall community input necessitated a substantial reconfiguration of the development plan from that originally presented in order to better meet community expectations. The most significant changes that were implemented included; • Relocation of the Police HQ to an area south of the Arts Center to allow for possible future expansion of the Arts Center or some other possible development • Transfer of the parking structure to the Sewell St escarpment to minimize the foot print of the development in the area and ensure full utilization of the facility. • Inclusion of public spaces in the common areas around the individual structures • Potential for a future pedway connection from the parking structure to the Harbour Station link across the escarpment • Preservation of the CFBC building and Synagogue • Retention of the street fronts on Wellington Row • Rehabilitation of the Arts Center • Limiting the width of the Union Street traffic corridor Council approved the new development scheme and an action plan to move forward was adopted in March of 2005. Building designs, property acquisition, traffic studies and infrastructure designs have moved forward since then with Council approval. In addition, in response to subsequent stakeholder concerns, the required access tunnel to the common Holding Cells will be separated from the front of'the Arts Centre in order to better preserve the integrity of the fa~adc of the Carnegie building. Provincial Participation Cost Sharing, Coordination The City of Saint John has conducted extensive negotiations with the Province of New Brunswick on the opportunities for cost sharing (plaza), elimination of duplication (secure link and holding facilities) and the provision of public parking. Common Council has now approved a joint funding agreement with the Province; • Defining the project elements (Plaza, Parking, Secure Link, Holding Cells) to be jointly funded including operational responsibilities • Setting out the terms of agreement on the capital cost sharing of each component • Setting out the terms of agreement on responsibility for design and construction of shared elements • Setting out an agreed upon completion schedule • Have the Province contribute approximately $9,500,000 in funding to the development. Cost sharing the various components with the Province brings opportunities for substantial cost savings for the taxpayers however it also brings with it a requirement to ensure that the shared facilities are ready for occupancy at the same time. This has implications for the scheduling of the work and the timing of the capital expenditures. The capital cost sharing agreement with the Province has effectively reduced the overall cost of the full development by almost twenty percent. The operating cost agreements yet to be finalized for the holding cells and parking structure will further reduce the annual operating impact. Saint John Energy has also agreed to support the development by contributing $760,000 towards the cost of relocating the overhead lines underground. P3 RFP Approach Council also authorized a call for proposals using a P3 development approach. It was hoped that soliciting a call for development proposals from the private sector would yield a cost effective model and additional Mixed-use Residential and/or Commercial developments as integral parts of the public sector investment. Unfortunately the P3 process did not yield the anticipated benefits. The full term cost of the project on a present value basis exceeded our traditional cost estimates by 6 approximately $21,000,000 due in large part to the additional financing costs that would be incurred by the private sector partner. This is not a reflection of the merit of the P3 process but simply the outcome of this particular development proposal. Staff recommended that for the development to move forward, the City should proceed to direct tender calls for the individual components. This would be a traditional bidding process that could be conducted in a timely manner. Council approved the call for tenders in April of 2010. Unlike the P3 approach, this method does not encourage any immediate additional private sector investment in the area, which is one of the key outcomes. The City has however consolidated ownership of a number of the adjoining properties and the potential remains to actively promote suitable development as originally intended. Financial llmpHeations A key concern from the outset of the development process remains the capacity of the City to absorb this level of capital expenditure and the consequent impact on the tax rate. The Commissioner of Finance initially completed a financial impact analysis in 2008 on the basis that $24.5 million dollars would be invested by the City over the 2007-2010 timeframe. The analysis concluded that the carrying cost of the related long term debt would equate to approximately a 3 cent increase in the tax rate. The report indicated that the actual effect would depend largely on the level of tax base growth during this period and the level of transfer payments from the Province of New Brunswick. The scope, financing structure and related capital costs of the project have changed considerably since the first analysis was prepared. The construction costs and related financial impacts have now been revised and updated to reflect the actual nature of the development and to include all related ancillary costs (infrastructure, fit-ups, moving, technology etc.). The results of the financial analysis are included in the attached schedules and summarized below. Project Summary The Peel Plaza development comprises four main components - Police HQ, Public Plaza, Parking Structure, Civil Infrastructure. Each component is to be tendered independently and each has a unique construction schedule. The $9.811 capital contribution from the Province would be made in increments to the City upon substantial completion of the various components. The capital contribution from Saint John Energy ($760,000) will be made as incurred. The capital costs of the structures and plaza would be financed over 5 years in line with their long-term life span and all other costs would be financed over a 15 year term. Given the integration with the Justice Complex, proceeding with the Police HQ component will require that the Plaza and the related underground infrastructure also be completed in due course. 7 Capital Costs The net cost of the full development is estimated at $39.12M to be expended over a three year period. Several adjustments have been made to the scope of the project in order to minimize costs resulting in a reduction of approximately $1 LOM from the original projections. Included in these is a reduction in the number of parking stalls from 560 to 4601, a move from LEED Gold to LEE13 Silver, deferral of the Police shoot house, an increased emphasis on green space in the Plaza area around the Arts Centre and careful attention to the means of infrastructure renewal. This report deals rimaril with the tender for the Police HQ The cost of the Police H including tender rice HST etc is $22.0M. The net cost after the capital contribution from the province is $19.2M. Critical Factors The combined effect of two key factors - the cost of debt and additional operating costs - will largely determine the financial impact of the development on the Tax Rate and our future Borrowing Capacity. Debt Impact The borrowing process for Municipalities is relevant in this instance. In general, capital costs incurred in one year (2011) would be financed using short term borrowings. The bank debt would then be converted to long term debt through a bond issue in the following year (2012) and the first payment would not be made on that bond issue until the subsequent year i.e. 2013. This time lag has been reflected in our borrowing projections and financial analysis. It is not until payments begin that the full impact of the debt retirement costs are reflected in the operating budget. The incremental fiscal charges for the Police_HQ and Plaza are projected Lo be in at $2.OM annually and decline as the loan balance declines. The incremental cost of the development at full build out is projected to begin at $3.OM annually and decline as the loan balance declines. Capital Borrowin The financial projections and sensitivity analysis include a provision for $15.OM in annual general capital expenditures. However, the number of projects carried over from 2009/10, the significant level of capital borrowing in 2011/12 for the Police HQ/Plaza and the actual level of tax base growth could limit the ability to incur additional capital expenditures in those years. A decision will have to be made during the 2011 capital borrowing process on whether to first complete some or all outstanding projects from previous years (2008-10) or to replace some idle projects with new projects for 2011 based on the available capacity. Operating Impact New buildings mean new costs for operations, maintenance, utilities etc. In the case of the Parking Structure these are entirely new costs. However there are incremental revenues derived from parking fees. In the case of the Police HQ there are new costs associated with the new building however there are also savings from reduced rental costs at City Hall and revenues to be derived from the Province for cost sharing of the Holding Cells. The net annual incremental operating cast im act of the Police H is projected at approximately $0.7M. The net annual incremental operating cost impact of the development at full build out is projected to be approximately $1.OM. The net impact of both these factors has been included in the financial analysis and is shown in Schedule 1. Assam ti ons Forward Look-Lin The financial analysis involves a multi-year projection using a variety of factors. Schedule 2 sets out the common assumptions used to determine the impact. Key among them are the growth in the assessment base, borrowing rates (5.5%), the operating cost projections for other City services (Police, Fire, Transit capped at 1.0% for two years), no additional pension funding contributions, and a $15.4M recurring capital borrowing program for other needed investments. In addition, specific assumptions were made regarding the operation of the Police and Parking structures. Finally, it is assumed that the cost estimates represent the upset price for each component and that these costs in effect represent an all in cost. These estimates were based on professional advice, independent bids and contractual obligations and are considered fair and reasonable. As with any development of this nature the actual costs will not be known until incurred. Structural Options Given the operational and debt considerations, the City also identified a number of structural options to help mitigate the financial impact. The first approach was to have the City build, own and operate all the components. The second involved assigning responsibility for ownership and operation of the garage to the Parking Commission. The third option considered adjusting and deferring the construction of the various components to spread out the annual borrowing requirements. A fourth option while not permitted under the current legislative environment considered the use of Tax Increment Financing as opposed to traditional financing. A fifth option involved smoothing of the annual borrowing amounts. Each of these approaches was assessed and a determination was made that the most cost effective approach both in the immediate term and long-term was the second option whereby the Parking Commission would retain ownership of the garage. This approach would see the Parking Commission receive all parking revenues associated with the garage as well as an annual provincial contribution for their share of property taxes. In addition, the Parking Commission would pay the incremental debt service costs, starting at $0.9M annually, and the annual operating expenses of approximately $03M. In exchange, the City would provide the Parking Commission an annual grant of approximately $03M. Net savings to the City of Saint John from this approach accumulates to approximately $1.4M by the year 2020.. 9 Sensitive Anal ses As noted previously this is a multi-year analysis predicated on a range of assumptions. Given the number of factors at play it is impossible to predict with certainty the exact tax rate in any given year. A sensitivity analysis was therefore undertaken that took into consideration future growth in the tax base and anticipated annual increases in expenditures combined with the incremental debt and operating projections for the development to assess both the potential impact on the City's tax rate and debt ratio. The range of results are shown in Schedule 3. The same sensitivity analysis was completed on the assumption that Peel Plaza did not proceed and that all other factors remained the same and that the borrowings were not redirected to other projects. The results are shown in Schedule 4. This approach allows Council to make an informed judgment about the impact on the tax rate under a variety of scenarios. For example, a worst case scenario with very low growth (3%) and very high expenditure increases (4.5%) could yield a tax rate of $2.101 in 2016. Interestingly, the same scenario without Peel Plaza would yield a tax rate of $2.047 in 2016. A best case scenario (low expenditure growth and high assessment growth) would yield a tax rate of .$1.555 with Peel Plaza and a rate of $1.510 without Peel Plaza. The reality is that the actual results will fall somewhere in the middle of the range. Overall Financial Impact The financial analysis indicates that the net incremental cost of the development including debt and operations is projected at 3.9 annually at full build out. The sensitivity analysis shows the tax rate under a favourable scenario (tax base growth of 5% and expenditure growth of 3.0%) for the years 2011-16. A less favourable (lower growth assumption) outcome is also presented below to demonstrate the sensitivity to tax base growth.. 2011 2012 2013 2016 Peel (5%/3%) 1.'774 1.7'95 1.798 1.733 Peel (4%/3%) 1.791 1.830 1.850 1.836 The effect of compounded growth is evident under both options in that it shows a declining tax rate in later years and also the variation in tax rates under different growth assumptions. The variation from the current tax rate ranges from 0.6 cent to 6.5 cents. These are projections only at this point and should not be regarded as planned rates. The sensitivity analysis also shows that the debt ratio of the City is not adversely affected by the additional borrowings and remains well within an acceptable range. 10 Supplemental Funding Staff are currently pursuing funding through the Federation of Canadian Municipalities for a substantial low interest loan and a capital contribution towards the Police HQ. The specific amounts are still subject to approval and therefore have not been included in the financial analysis. Should this funding be confirmed it will reduce both the annual borrowing costs and the capital cost of the project. Pension Deficit As Council is aware the funding shortfall for the City of Saint John Pension Plan has grown substantially. Left unresolved this could result in a $9-10.OM additional annual payment to the plan which would translate into an approximate 15-17 cent tax hike. The alternative would be to reduce services by approximately the same amount. The pension liability is a long-term structural problem that requires a long-term solution and does not warrant drastic short term action. In fact the plan currently has over $325M in assets and can meet its pension obligations for many years. A long-term solution is required to bring the cost of the plan in line with available resources. Likewise, the outstanding pension deficit is more appropriately addressed over the long-term in line with the actual liabilities. Qualitative Considerations Relationship with the Province of NB - the City actively encouraged an integrated Police/Justice development and formally concluded a comprehensive capital cost sharing agreement on that basis. The agreement allows for either party to decide not to proceed however Council must consider what impact such action would have on the working relationship with their Provincial counterparts. Economic Benefits of the Development - a $40-50M capital investment in the City will yield additional economic benefits to the community. Enterprise SJ advises that while there is no generally accepted formula to determine the economic spin-offs, these could be as much as 4:1 based on the Construction Sector Council approach. Costs incurred to Date - the City has incurred approximately $8.OM to date on this project. The anticipated benefits cannot be realized without proceeding. Time Lines - Coordination with Province NB Both the justice and police facilities must have access to the detention facilities as part of their daily operations. It is therefore a requirement that both the Police and Justice facilities be ready for occupancy on or about the same date. The Province has awarded a tender for the Justice facility and occupancy is targeted for mid 2012. 11 In order to coordinate the key occupancy date the following schedule is proposed for each of the components: Police HQ Tender May 2010 - Occupancy May 2012 Parking Structure Tender Nov 2010 - Occupancy April 2012 Plaza Tender Aug 2011 W Completion Sept 2012 Infrastructure Tender May 2010 -Completion Oct 2012 Risk Considerations The City has a limited pool of capital available at any given time to allocate to various initiatives. In this case, Council has identified a need for a new Police HQ and the potential to respond to this need in the context of a larger development. Borrowing $22.0M for a Police HQ/Plaza and up to $393M for the full development over a three to four year period will have an impact on our operating costs and our borrowing capacity in future years. The financial models have incorporated independent cost estimates and actual tender prices for the various components. As accurate as these can be the actual cost will only be known with certainty at the close of each tender. The financial assessment will be revised with the actual tender prices at each phase in order to better assess the financial impact before a final recommendation is made to Council. Changes in scope may be necessary if tendered prices are not in line with budgeted amounts. The financial models are also based on a series of economic assumptions such as future interest rates, inflation rates, pension funding, expenditure growth, provincial interference in the assessment process, unconditional transfers and tax base growth. The cost of borrowing is but one factor that will influence future tax rates, these other factors could have an equal or greater influence. Council can influence some of these elements, some will be established by the Provincial government and others will be determined by the marketplace. Inevitably, the actual results will turn out to be higher or lower than anticipated. As the sensitivity anal sis indicates the factor with the eatest impact on our abilit to absorb the cost of the develo ment is the future rate of owth in the assessment base. Annual owth at 5%a or above provides considerable flexibility, while a lower rate of annual growth would likel necessitate a tax rate increase. As noted in the assumptions a basic requirement to proceed is that the spending caps for fire, police and transit be in fact implemented. It is also necessary that a solution for the pension funding issue be adopted. A careful approach was employed in the projections in order to minimize the potential for large variations however there is an unavoidable element of uncertainty that should be recognized. The sensitivity analysis included in the attached schedules is also provided to inform Council of the potential variations. 12 Finally, not proceeding with the development poses the real risk of losing the $9.8M Provincial contribution and the consequent reduction in cost to the ratepayers. Likewise, the federal funding program currently available may not be available in future years. Ancillary Lands The City has assembled a number of adjacent properties as part of the development process in order to facilitate timely private sector investment. Stakeholder input has highlighted the importance of bringing people to the area with a mix of housing, cultural attractions and commercial space. The need for development that is sensitive to the built heritage in the area has also been stressed. The economic uncertainty in the past year or so has been an obstacle to any real progress in this regard. The lack of certainty about the eventual outcome of the Peel Plaza development is likely also a concern to potential investors. There are opportunities for housing development, arts infrastructure and community facilities in the area. Should Council decide to proceed with the tender award then a more aggressive effort to encourage quality private sector investment should ensue. Input from Other Sources The Commissioner of Finance, Manager of the Saint John Parking Commission, Chief of Police, CAO of the Saint John Police Force, and Project Engineer have provided input in the preparation of this report and concur with the recommendations. Staff also sought the input of the Steering Committee members and the Saint John Parking Commission during the process. The recommendation of the Steering Committee regarding the Police HQ tender is attached. Tender Results The Purchasing Agent advises that the tender for the construction of a new headquarters building for the Saint John Police Force was undertaken as an advertised public tender in accordance with the City of Saint John's Procurement Policy. Bids were advertised and distributed by your Purchasing Agent who also facilitated and over saw the coordination and dissemination of all information and clarifications, in the form of Addenda, in response to formal requests from potential bidders. Tenders were opened publicly, by Council's appointed Tender Opening Committee, on the date and time and at the location specified, all in accordance with the processes and procedures outlined in the tender documents. While six tenders were received and evaluated, the tender Opening Committee found one to be non compliant which caused it to be rejected at the opening and returned to the submitting bidder immediately following the meeting. 13 The five compliant bids were read publicly, at the opening, and then referred to the Peel Plaza Steering Committee for further evaluation and recommendation to Council. The lowest bid was in the amount of $20,675,000 plus HST from Pomerleau Inc. Conclusion: A development of this nature represents a significant financial commitment on the part of the City. The decision to proceed or not proceed is essentially a political one. Common Council identified this project as a priority based on the beneficial operational impact, the opportunity for uptown renewal and the potential to eventually trigger additional private sector investment in the surrounding areas. The development avoids costly duplication of facilities, allows for future expansion of the Arts Centre, creates critical mass to encourage future development in the immediate vicinity, permits additional development above the parking structure, addresses the longstanding operational needs of the Police force and benefits from a $9.8M financial commitment from the Province. As noted in the sensitivity analysis the factor with the greatest impact on our ability to absorb the cost of the development is the fixture rate of growth in the assessment base. Annual growth at 5% or above provides considerable flexibility while a lower rate of annual growth would likely necessitate a tax rate increase.. Absorbing the cost of the project also means careful expenditure growth, limiting general capital borrowing in 201/12, capping future general capital expenditures at no more than $15.OM annually and using revenues from growth beyond that anticipated to fund recurring capital expenditures. Based on the key assumptions, the favourable tender price, the availability of capital funds from other sources and the long term benefit of the project staff are recommending that Council proceed to award the Police HQ tender. Recommendation; That Common Council award the tender for the Saint John Police Headquarters, Tender #2010-081201T, to Pomerleau Inc. in the amount of their submitted tender of $20,675,000 plus HST and that the Mayor and. Common Clerk be authorized to sign all related contract documents. 14 rr ] 4, 'J i~ The city 'iaim john PEEL PL A► PROJECT PERFECTION IS OUR GOAL EXCELLENCE WILL BE TOLERATED July 12, 2010 Chairman, Mayor Ivan Court Peel Plaza Steering Committee Re: Peel Plaza Project - Tender Closing Mr. Chairman and Members of the Steering Committee: At the July 18, 2005 meeting of Common Council, it was resolved that a Justice/Police Complex Advisory Committee be established. Terms of Reference for this Committee were also approved by Common Council. Please find attached a City Manager's report, Terms of Reference and the approved minutes of the Common Council meeting. Of particular note is "...tare committee be struck to provide political direction..." and "...the Committee be charged with the responsibility of making recommendations to Common Council related to the entire area bordered by Union, Coburg, Carleton and the Mercantile Centre." Since the establishment of that initial Committee a number of meetings have been held by the Committee with project staff, City staff, and the public at large. A variety of issues pertaining to the development of Peel Plaza were addressed, and several changes were made to accommodate the concerns and interests of all affected parties; by example, the elevation of the proposed vehicular tunnel was lowered in order to preserve the integrity of the front steps of the Carnegie Building. A public information session was also held on June 3, 2009 to solicit additional feedback from all concerned with respect to the overall proposed development. In excess of 100 persons attended this public session and provided verbal and written feedback for staff and the Committee to consider. Questions, opinions, concerns were expressed regarding such issues as choice of location, resultant traffic patterns, impact on properties in the area both during and post construction, and overall affordability of the project. All opinions and suggestions were carefully considered; many of which (or derivations thereof) were incorporated/accommodated in the development plans. SAINT JOHN P.O. Box 1971 Saint John, NB Canada E2L 41 1 wwwsaintgohn.ca ( C.P. 1971 Saint Jahn, N.-B. Canada E2L 4L1 Report to Steering Committee Page - 2 - July 12, 2010 The most recent meeting of the Steering Committee was held on March 11, 2010, (minutes attached). Subsequent to this meeting the P3 process was abandoned in favour of investigating a traditional procurement process for the various components of the proposed development. The response to this realigned approach and with the direction given from the City Manager, City staff undertook a process intended to critique the requirements of Peel Plaza, being mindful of the concerns and opinions raised by all affected parties and with due consideration given to the needs of the Police Force and the Parking Commission. This exercise resulted in some changes to the scale of the development such that needs could be met while maintaining the efficacy of the constituent components. The objective of this exercise was to ensure that the City would receive value for money for this project. As stated above, the individual components comprising Peel Plaza development, although complementary to each, would be considered on an individual basis. On May 12, 2010 the City issued a call for tenders for a new Police facility and those components directly associated with the new building. Tenders closed on July 7, 2010 with six companies submitting bids. After a standard review by the City's Purchasing Department, it was determined that five of the six submissions were compliant. These are listed below Dora Construction Limited $ 21,525,000 Avondale Construction Limited $ 22,590,000 Marco Maritime $ 21,693,000 Bird Construction Company $ 23,250,000 Pomerleau Inc. $ 20,575,000 City staff subsequently reviewed the submissions and have concluded that the low tenderer, Pomerleau Inc. has the expertise and capability of performing the work as specified and, therefore, the Project Manager recommends that should the project be approved by Common Council that the contract be awarded to Pomerleau Inc. In preparation of making any recommendation to City Council regarding this project the City Manager has ordered that the Finance Department of the City of Saint John undertake a thorough analysis of the financial impact that such a project may have upon the City's financial health. This analysis has been completed and will be provided along with a report and a recommendation from the City Manager to the Common Council. While the Steering Committee is under no obligation to express an opinion with respect to the cost of the new police facility or an opinion as to whether or not the City's financial position is such that this project can be accommodated; the Steering Committee is advised that the submitted price of Pomerleau Inc. is approximately $3.0 million below the City's earlier estimate.: Report to Steering Committee Page - 3 - July 12, 2010 Staff from the City's Finance Department are available at the Steering Committee meeting and will make every effort to answer questions relating to financial implications of constructing a new police facility beginning in the Fall of 2010. Attached is a high level summary of the known and estimated costs of the various components of the project. The Steering Committee is asked to consider the content of this report, the attachments, minutes of previous meetings and responses to any questions that may arise. Subsequent, should the Committee conclude that they are in a position to do so, the Committee may make a recommendation to Council with respect to political direction". Respectfully submitted, 41111W-- - Wm. Edwards, P.Eng. Project Manager W mE/"jaf encl. :p. The City of Saint John July 13, 2010 Deputy Mayor Chase and Members of Common Council Deputy Mayor and Councillors: Re: Peel Plaza Police Headquarters In July of 2005 a Police/Justice Advisory Committee was established by Common Council. The mandate for this Committee essentially was to provide political direction to Common Council regarding the proposed development of a Police/Justice and ancillary projects. Since the establishment of the Committee much has been accomplished. Location of facilities has been established, properties acquired, input solicited from a wide range of stakeholders, designs and specifications completed or underway. With respect to the first component for the development, the Police Headquarters, tenders for the construction of the building were closed on July 7, 2010. The City received competitive bidding from six companies and it has been determined that the law bid of Pomerleau Inc. met all the terms and conditions and was in full compliance with all requirements of the tender call. (Based on the recommendation of the Project Manager and a review of all procedures leading up to the close of the tender call, the Committee adopted the following recommendation. RESOLVED that as recommended by the Project Manager, the Steering Committee recommend that Common Council accept the lowest tender for the construction of the Police Headquarters, submitted by Pomerleau Inc. in the total amount of $20,6175,000 plus tax. Respectfully submitted, Mayor Ivan Court, Chair Steering Committee Peel Plaza Project /jaf encl. , N., SAINT JOHN P.O. Box 1971 Saint John, NB Canada E2L 4L1 I wwwsaintjohn.ca ~ CY 1971 Saint John, N.-B. Canada E2L 4L1. uj 0 Q 0 In x LU O LU LbJ O c) cG C O Z a L1J F'. Q V a N 06 a. ~I w L) J 0 ^^Lb W I 0 f rr U U.d D pp LJJ LU = Iuj U QQ ~ O O O OM aQ I OM h0 N n O .-1 H O O o O OI W O7 N ~ W ~ N N N O O H ~ N N N O O 0 0 MI ~ m ,y O N N N 0 0 r N c\l y N o p c\[ O N 0 0 bl N p O) o N r 0 0 HI co N O O N O o c0 M C ~ m N r o o MI O NO p N o N r o c N c7 O m N ~ hl N of . 0 N v m U p a- v m > `v N E a 0 0 v T. C ~ C m ~ ~ N ~ u F v v o 'o S o. a` C1 d O CL` oI m cF' W Ot omII O N ti m 11 O O M N M O O O O W .-I O M O I~ cl' n N v O o to .-1 M M O rl N c-I W n ~f1 Ln nl0 M O H N H e-1 N O O M'D O K 0O O7 o V v (0 O N r O N O O LO N o) n 0 o co m n n ~ r co co t0 r ry O O d N O n 0 0 Iq N o "t O N LO M n n 0 W CO r N 0 00 0 co On V d' O d' N to to N Lo co Q O <F O M r ry o O m n o D O O CO O n a ct O o7 O N v1 m o co m r N m m m v r IN O O n O N N Or 0 LO W OIL O t O M M co OM n 0 o N - n orn o In w d n co 0tOfl ppN o cO0 M (O co r N O O m 07 0 O N0 o n m ~ O co O O< W n M o m N <o M r N O O O O Lo Ln rn o m^ m o (O O m O O N' N n n N rv r ry O 0 d' N O m O o [-Y O T c0 M N O O W (o M 7 N M V N u7 O vl O to r co co v N a a ~ N O 6 < m ~ o v v a O % G W ~ o Y k c a w m e W "2 a c u I u° N O v .L° 0 c c i v o m o Q O a u V N O n N co M r N O CO O ~ m n n co M N co co ~ r n ~ o co co ttoo O O co co N ~ r 7 m o ~ N ~ ccW co o N N r o co o) c0 d' O (O m m W O cs (D 0 ~ M M N m v N a O o y S U U ~ U w h u v o L obi N ~ a O ~ U c F y b y U SCHEDULE 2A - KEY ASSUMPTIONS OPERATIONAL ASSUMPTIONS Current rules regarding tax assessment is applied, no legislated change to the Provincial Property Tax Accountability Mechanism • Pension funding: No incremental cost (pension solution is in place) Unconditional grant remains unchanged ® Police, Fire and Transit: 1% expenditure growth from 2011 to 2012 DMa, Public Art Reserve, Imperial Theatre grant, St. Joseph hospital grant, Loch Lomond community centre, IJNBSJ grant: No change in funding level 0 Borrowing term for Peet Plaza construction cost: 25 years b Borrowing term for other general capital: 15 years Scenario Analysis regarding Capital Spend: 15 million per year from 2011 other than Peel Plaza Cash flow projections for Capital Spend based on estimates provided by management O Police Station Alternatives out of scope of analysis ECONOMIC ASSUMPTIONS O Assumes City can........ achieve an annual interest rate of 5.5% over the term. of the Project Y Annual Inflation - 2% No material deviation in Parking demand from Consultant projection SCHEDULE 2g - KEY ASSUMPTIONS POLICE SPECIFIC ASSUMPTIONS • Annual Operating Costs based on market bid combined with Management Projections • Annual Lifecycle Costs based on management projections d Assumes $190,500 Operating, Contribution from Province as follows: a. DOJ - $112,500 per year based on 1500 customers C $75.00 per b. Province - $78,000 based on 13,000 square feet @ $6.00 Police Annual Savings: (Assumes Inflation Increases - to be confirmed) a. City Hall lease - $725,000 b. Property Tax Savings - $65,000 c. Detention Security Savings - $251,000 d. Other - $90,000 (Custodial, Building Maintenance, Heating Fuel, Utilities, Garbage, Insurance) PARKING SPECIFIC ASSUMPTIONS ® Parking Garage Revenue Assumptions Projected based on Consultant Et Parking Commissioner a. Parking Garage Occupancy hate - 90% b. Parking Garage Oversell Factor - 1.1 c. Monthly Parking Spaces - 205 d. Hourly Parking Spaces - 255 e. Parking Rate Increase 5 Year Intervals - 7% f. Monthly Parking Rate - $130 plus HST g. Hourly Parking Rate - $1.77 plus HST h. Average Daily Hours Per Customer - 2 i. Hourly Customer Turnover per Day - 3 Assumes Provincial Cost Sharing on Property Taxes based on 1801460 of all Property Taxes 9 Parking Garage Operating expenses based on $500 per stall per Consultant Assumes Parking Garage will obtain full 100'% ITC for HST ® Parking Garage Lifecycle Projections based on management projections • Assumes Annual Surplus of $300,000 from other Parking Commission business is achievable based on historical results Q N D7 C 4 .co E E CD C6 (Z 0 c Ca L N c 0 CL 0 A 7) N x CCr E a C O W 0) N E C E N C) E 0 c 06 T Lo 7 r T N N C N C Ctl E .E N as CL 0 y ` CL Ln 2 CTS q7 a) to - o rn a) " E CU r L4 L E :2 ~j • . 0 `0 0 L17 ~a Q C ; r a) 0 {,r} a cu a) C? U 5) C X X a) 0 ti5 C 0 0 om C"7 Xx ~z Q m LL Lo O R 0 C J L V 0. ( Q7 Q7 N CV aU Co 0) 0) 0 ai 0 C CT cu p, _ U 0 E 2 o e e U c L Q7 CV C ~ L 5... 0 C7 L a 0 } Cl) _ ~ y (D E~ Imco z u W ~m Cad D 0) 'o r- 's• CD CD © N 4r' CO co CD '..r T T T r T ° co (,o cc) 00 CD a tn' M - M LO r- Imo- I- cq CO CO ~ r r T' T T r 4i' f C cn m 0 T T N CV) 0 N LC9 r-- 0) r T T r r r ,Y,,,.. E 0 L c N M '-4- CD r- M LL CD co 0 N ~t CD co r co r O7 ...r O~ T C7) T Q9 ,',T o p o o ~ Ca ® C9 0 0 0 d L Cy to = LO C7 10 CV C'4 Cri vi 4 ' 'i C 'CS q> Qom „ CL X Q 0 w c~ N ~ CL1 rA ~ C11 N C1 tcy r- rte- r- r- r- r T T T T r D Q cr, co d 0 ,0 T pp CD CD r- co co m r fl w+ e C~ LL? c^- r- 0 co m " co co CA C79 0 CD ti r- tw r- co co C7 l"' r r r T T T 0 rte. Cl) 00 4r Ca CD U. C3? C3 a r N N r`- r CO r CO r 00 T CO T 00 T O 4 O~ O 4 O ' GJ Lri ® LL'! C? LL7 L "Cr . . 0 er 0 . CL x p Q LU U 3 > y U) m c ua CD rte. ca 4Y co u') rn co co N CD LgLgCDCD1- rl- CD C7? 0 00 C", N cf co m f- N CD CO r~ r- cO 00 00 0 *W co 0) co 4t N' N m m 00 m co 00 00 07 0) r r r T T T r E Q o r- Co 0 CD CO T LL. c0 co 0 m T T N N 0 0 o a a a 4'.7 C'S C7 C7 C7 0 N Inl ~ Cw1 ''d' 4r' 9= Ct> g 0Wa a ~ 4 1 m ° r N ~ ~ c o r . x , m r• ~ ti ti ~ r~ P o C*} 4t L11 C0 1~ (5S co 1- r~ CO 'R M r` 0 00 T 470 N cq 4t T r r r r T T r+ c ° f- 00 C? N '4Y C'~9 c} O CO 4t LO CO co CX? co 00 00 co C7 c N It LO r . 0) Cw LL CY1 d Lo CD r*. 00 O 06 T 00 r^ c0' T 00 r CO r M r a e o o 0 0 CD CD C~ CD CD 0 0 C, Ln Z5 to = w L cli CV rs of 4r' -4 L CL 0w ai 3 m ca. m m 4 0 z N l sv tV Cr) LO c a s Im 4N co M CG CR a t- 4- a^ r r w rs. c ~u m 4 ta~ cm r-. r-- ,r-'r'r Io r r N N T t r r G N [V N E 0 O E5 N (41777 aY ~ 9a fC! A ~ -0 m . r If) m LU ~ _ C r 'C7 C " 0 U} C7 (D w CL C ul ' =:u1t0 o o q Ito r R e- m m ffi ~ un o ~ cs ki c~ , s ~ ti- ua cW oa ~ ro oy r- c cri ua ua us to an P r "n uL9a us , c 0 4 m 0 r N• U.) to tl co Qf) crR c eu can N % c i - r t r- 04 U - 10 40 C~ Ow C3,1 rn c; Y~~ 10 OR 40 119 12 '152 ua r r r- n n. r t^ r r r r flit ~ [V i+7 L{? Lp OR co co m r r r r 'r' r .2I Ln 00 o co qj O o N h Lh 00 0) O rl O u O 4 ~n m G N ~ rs q rrr O1 n o +n m ~ N O m 0 N LD q m ®I O C Ln N . C k ; OCY S'„M h h fir [/T CYI A!} O N O O ~ t!1 q Q O N O N~ °0 N <F7 ~yj V} lG ci d' q m h O N O 0 0 O ~ w llc N V7 Kn 41} m ao rn 00 N ,n nl ' . h 'Y II m a 00 O i N N W N 14 N h m h in ,.hw," OI rA T N t/} y: vT +!F Q1 m w°+ Et tP N O N " q0 e~i d .I U) y to M ~ ~ 01 n ~ vN t/} OD N v C m ui h q00 o N 1e I~ ~ u*;: O O~ q a U) U} N h pip rn 0 Ln c m q N ~ p„ O w. Q Lr Ln is er N O m w 4 0' O O 'N N o--j uY'9 6k,Y ILn_ by l/} Ln tlf K j- h W Ul Lf5 CJ co w w h 11 00 > W Ln ui O iT1 G O Q 4 p w m m c a ti a a v 4 .t, said Jahn police Fame SAINT JOHN POLIO' H ADQU MITERS FACILITY 4..1 Survey of Existing Police Headquarters / Operations The following issues highlight the operational problems encountered by the Saint John Police Force at the present location. The existing police headquarters is inadequate for many reasons; Overcrowded Conditions The current police operation is confined within an area of approx. 40,000 total sq.ft. Given that the national average is 330 square feet per staff for a police headquarters facility, the gross floor area of the police building should be in the order of 66,000 total gross sq.ft., or a 65% increase over the current area. The overcrowding of staff has resulted in virtually every space being used for a multiplicity of functions in addition to the lack of storage space for evidence, supplies and equipment. A total gross floor area of 65,000sgft has been determined to satisfy the space requirements for the total police staff.* Police Circulation and Operation e r Cell Security l a ► Area r r Reception to Departmental Areas ' CONFLICT AT: -Common Entrance -Elevators -Hallway/Stairway "Victims Public Suspects Police This police operation occupies approximately five levels of the current office tower, being on the fifth, sixth, seventh floor as well as the lobby and basement levels. In effect, there are the Provincial Court and City Department floors that divide the police operations. This fractured arrangement of police spaces on many remote levels is very inefficient. There is a lot of wasted time by the police staff going up and down public elevators and stairways. During the normal workday there is no control over police, civilian, and suspect movement amongst the separated floors. ~pervsing personnel are not aware of where these people are. * projected over a 20 year period, refer to section 5 for details I3 F S. Inc./ Juscheanes & Fish, Architects Nelson Wong Architect Inc.