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2. AMENDMENT TO FRONT-ENDING AGREEMENT FOR GLOUCESTER EAST URBAN
COMMUNITY STORM WATER MANAGEMENT POND 1 AND OVER-SIZED TRUNK SEWERS MODIFICATION DE
L’ENTENTE DE FINANCEMENT PRÉALABLE RELATIVEMENT AU BASSIN 1 DE GESTION DES
EAUX PLUVIALES DE LA COMMUNAUTÉ URBAINE DE GLOUCESTER EST ET AUX GRANDS
COLLECTEURS SURDIMENSIONNÉS |
Committee recommendation
That
Council approve an amendment to Council's approval to enter into a Front-Ending
Agreement with the Richcraft Group of Companies for cost reimbursement for the
design and construction of the East Urban Community storm water management Pond
1 and over-sized trunk sewers, located south of Innes Road and east of Page
Road, to reflect land costs as specified in the new Development Charge By-law,
By-law 2009-225, resulting in an additional authority of $1,637,000.00 for land
acquisition.
Recommandation DU Comité
Que le Conseil approuve une modification à
l’approbation du Conseil relativement à la conclusion d’une entente de
financement préalable avec Richcraft Group of Companies pour le remboursement
des coûts de conception et de travaux d’aménagement du bassin 1 de gestion des
eaux pluviales de la communauté urbaine de l’est et des grands collecteurs
surdimensionnés, situés au sud du chemin Innes et à l’est du chemin Page, en
vue de refléter les coûts des terrains comme le précise le nouveau Règlement
sur les redevances d’aménagement no 2009-225, ce qui résulte en une
autorisation additionnelle de 1 637 000 $ pour l’acquisition de terrains.
Documentation
1.
Deputy
City Manager's report, Infrastructure Services and Community Sustainability,
dated 30 October 2009 (ACS2009-ICS-PGM-0168).
Report to/Rapport au :
Planning
and Environment Committee
Comité de l'urbanisme et de l'environnement
and Council / et au Conseil
30 October 2009 / le 30 octobre 2009
Submitted by/Soumis par : Nancy Schepers, Deputy
City Manager/Directrice municipale adjointe,
Infrastructure Services and
Community Sustainability/Services d’infrastructure et Viabilité des
collectivités
Contact Person/Personne-ressource : Michael Wildman, Manager/Gestionnaire,
Development Review-Suburban Services/Examen des projets d'aménagement-Services
suburbains, Planning and Growth Management/Urbanisme et Gestion de la croissance
(613) 580-2424,
27811 Mike.Wildman@ottawa.ca
REPORT RECOMMENDATION
That Planning and Environment Committee recommend Council approve an amendment to Council's approval to enter into a Front-Ending Agreement with the Richcraft Group of Companies for cost reimbursement for the design and construction of the East Urban Community storm water management Pond 1 and over-sized trunk sewers, located south of Innes Road and east of Page Road, to reflect land costs as specified in the new Development Charge By-law, By-law 2009-225, resulting in an additional authority of $1,637,000.00 for land acquisition.
RECOMMANDATION DU RAPPORT
Que le Comité de l’urbanisme et de
l’environnement recommande au Conseil d’approuver une modification à
l’approbation du Conseil relativement à la conclusion d’une entente de
financement préalable avec Richcraft Group of Companies pour le remboursement
des coûts de conception et de travaux d’aménagement du bassin 1 de gestion des
eaux pluviales de la communauté urbaine de l’est et des grands collecteurs
surdimensionnés, situés au sud du chemin Innes et à l’est du chemin Page, en
vue de refléter les coûts des terrains comme le précise le nouveau Règlement
sur les redevances d’aménagement no 2009-225, ce qui résulte en une
autorisation additionnelle de 1 637 000 $ pour l’acquisition de terrains.
BACKGROUND
The Gloucester East Urban Community (EUC) is bounded
by Innes Road to the north, the urban boundary to the west, Mer Bleue Road to
the east and the railway corridor to the south. In 1992, the City of Gloucester completed a Master Drainage Plan
(MDP) in accordance with the Municipal Class Environmental Assessment (EA)
process. The MDP report identified a
requirement for a stormwater management pond in the approximate centre of the
EUC, immediately east of Page Road and within the Mud Creek Ravine. This pond is referred to as Pond 1. The City completed a Schedule B Class EA for
Pond 1 and the Ministry of Environment
has since issued a Certificate of Approval for the pond.
Pond 1 and the associated trunk storm sewers are Development Charge items. In September 2007, Council authorized the City to enter into a front-ending agreement with the Richcraft Group of Companies (Richcraft) for the design and construction of Pond 1 and over-sized trunk storm sewers. The approved expenditure for the pond design and construction including land costs was $6,173,000.00 and was based on the Development Charge By-law in force at the time. In July 2009, Council enacted Development Charge By-law No. 2009-225. The current By-law has updated values for the acquisition of pond lands on a per hectare basis. As such, the approved expenditure should be revised to reflect the updated land values.
DISCUSSION
Richcraft has submitted a Plan of Subdivision for approval
within the catchment area of Pond 1. As
part of the conditions of draft plan approval, the developer is required to
front-end the cost of construction of Pond 1 and over-sized trunk storm sewers
in accordance with the approved EUC Infrastructure Servicing Study Update. Construction has been delayed due to land
acquisition issues which are nearing resolution. As Front-Ender, Richcraft will be paid back based on the principles
set out in Document 1 and pursuant to the Council approved front-ending policy
in Document 2.
The 2007 Council approved expenditure for land acquisition, update
to the design, and construction of Pond 1 is $6,173,000.00. $1,113,000.00 of the total is to cover the
cost of developer lands and land that the City must purchase or expropriate for
the construction of Pond 1.
$5,060,000.00 is for the cost of design and construction of the
pond. An additional $11,045,000.00
authority was approved for over-sizing of the trunk storm sewers as development
proceeds throughout the EUC.
The land values identified in the new Development Charge By-law,
By-law 2009-225, have been adjusted to reflect current land costs. Based on the unit rate in By-law 2009-225 of
$500,000.00 per hectare, the value of the land required for the construction of
Pond #1 has increased to $2,750,000.00 and, as such, the front-ending agreement
for the construction of the pond should reflect this change.
The City has negotiated the purchase and expropriation of privately
owned lands required for the pond construction as well. Through the plan of subdivision process,
owners of the development land will be conditioned to convey the lands required
for Pond 1 to the City. The owners of
the development land will be compensated for the values of the land based on the
lesser of a land appraisal approved by City or the unit rate identified in the
Development Charge By-law. The owners
will be paid back for the land value in accordance with the reimbursement
schedule within the Area-Specific Stormwater Development Charge By-law.
Both Minto Communities Inc. (Minto) and Richcraft own the majority
of land required for the construction of Pond 1, however only Richcraft will be
entering into a front-ending agreement with the City. As such, Richcraft will be paid back for the entire value of land
required for the construction of Pond 1.
Richcraft and Minto will enter into a separate private agreement for
distribution of the land value paid back through Development Charges. Prior to finalizing the Front-Ending
Agreement for Pond 1 or making any payments for the land acquisition, the City
will require that the private agreement be submitted for review to ensure that
it correctly reflects the intent.
In accordance with their respective subdivision agreements, Richcraft will convey 2.45 hectares of developable land to the City for the construction of Pond 1 and Minto will convey 4.54 hectares of developable land to the City for the construction of Pond 1. The land must be conveyed to the City prior to commencement of construction of the pond.
RURAL IMPLICATIONS
N/A
CONSULTATION
Richcraft is a benefiting owner of the tributary area of Pond 1 who has agreed to act as the sole Front-Ender for the construction of Pond 1. Minto have been consulted and will be entering into a private agreement with Richcraft for their land contribution. The public meeting will occur at the Planning and Environment Committee meeting on November 10th, 2009. A notice of the proposed Front-Ending Agreement was advertised in Le Droit and Citizen newspapers on October 30, 2009.
LEGAL/RISK MANAGEMENT IMPLICATIONS
There are no legal/risk management impediments to
implementing any of the recommendations of this report.
FINANCIAL IMPLICATIONS
The total estimated cost for the design, construction, and land acquisition for Pond 1 is $7,810,000.00. Subject to Council approval, the Front-Ender would be paid back pursuant to the principles set out in Document 1 and the Council Approved Front-Ending Policy as noted in Document 2.
The portion of the cost attributable for land is $2,750,000.00. This is the upset limit to be paid for land, based on the lesser of a land appraisal approved by the City or the Development Charge By-law unit rate.
The portion of the cost attributable to design update and construction of the pond is $5,060,000.00. Repayment shall be based on the actual value to an upset limit of $5,060,000.00.
The annual operating impact to the City is estimated to be in the range of $5,000.00 to $10,000.00 per year, beginning in 2010.
It is recommended that the existing Capital Account 900814 be used to fund this capital project, acquire lands for the pond, and reimburse the Front-Ender on a quarterly basis. On September 12, 2007, Council approved the Front-Ending report for the Gloucester East Urban Community Storm Water Management Pond 1 and Over-Sized Trunk Storm Sewers and approved authority for $17,218,000.00. As a result of the increase in cost of land, there is a requirement to authorize an increase to account 900814 from the existing authority of $17,218,000.00 to $18,855,000.00.
The Front-Ending of Pond #1 works, as well as any future Development-Charge related storm works within Area Specific Development Charge Area E-3 (Document 3) will be repaid on a pro-rata basis as Development Charge revenue is collected.
Account 900814
Approved Budget to Date $17,218,000
ADDITIONAL FUNDING REQUEST $1,637,000
The Front-Ender will be required to post securities for the total cost of the project.
The City will be the constructor and will invoice the Front-Ender. The Front-Ender shall remit payment within 30 days for work completed. The City will release the securities quarterly based on payments received by the Front-Ender.
SUPPORTING DOCUMENTATION
Document 1 Front-Ending
Agreement Principles
Document 2 Council
Approved Front-Ending Policy
Document 3 Area Specific Development Charge Area E-3
DISPOSITION
The report will be forwarded to City Council for a decision on November 25, 2009. In regards to the Front-Ending Agreement the final form of the agreement will be prepared by the City Clerk and Solicitor Department in consultation with the Planning and Growth Management Department.
FRONT-ENDING AGREEMENT PRINCIPLES DOCUMENT 1
1. The Front-Ender
shall be required to post a letter of credit or cash deposit equal to the
estimated value of the design update and the construction of Pond 1 for a total
amount of $5,060,000.00.
2. The contract
for the construction of Pond 1 shall be administered by the City. The City
shall approve the tendering for the construction of the pond.
3. The City shall
invoice the Front-Ender and the Front-Ender shall remit payment within 30 days
for works completed.
4. The cost of the
design update and the construction of the Pond 1 is set at an upset limit of
$5,060,000.00. Should the cost exceed
the upset limit, the additional cost shall be borne by the Front-Ender, and the
City shall not be obligated to compensate the Front-Ender for additional costs.
5. The repayment
of the construction costs for Pond 1 shall be pursuant to the Council approved
Front-Ending Policy as referenced in Document 2.
6. The
Front-Enders will be entitled to receive indexing pursuant to conditions noted
in Document 2.
7. Should other
Development Charge storm related works be constructed during the life of this
Front-Ending Agreement as identified in By-law 2004-310 (within the stormwater
collection area identified in Document 3), the Front-Ender acknowledges that
they will share equally with other stormwater drainage projects in the
distribution of Development Charge revenue collected.
JUNE 25, 2009 COUNCIL APPROVED FRONT-ENDING
POLICY DOCUMENT 2
Front-ending agreements are requested by developers who wish to have specific growth-related capital works in place in advance of the City’s capital project plans for emplacement of these same works: developers agree to finance the works at the “front-end” and recover their costs from the City at a later date. The following conditions must be met in order for the City to enter into a front-ending agreement:
1. All front-ending agreements with the City will be for growth-related capital works that have been included in a development charge study.
2. The contract for Front-Ended works shall be awarded by the Front-Ender in accordance with the City’s Purchasing Policy of a competitive procurement process and subject to the review and satisfaction of the General Manager, Planning and Growth Management Department. Where the front-ender does not award the work in accordance with the City’s purchasing policy, they must demonstrate that competitive pricing has been obtained, through independent analysis of their engineer, to the satisfaction of the General Manager, Planning and Growth Management Department. The contract for the work must be made available to the City to provide to the public.
3. Storm water ponds and related sewer works that are 100% development charge funded in the recommended by-laws will be paid back to the developer based on revenues as they are collected from the designated area. This means that at no time are the repayments to exceed the revenues received. Each front-ending agreement will define the geographic area involved and a separate and specific deferred revenue account may be set up to keep track of the revenues collected and payments made. Crediting will also be allowed for the front-ending agreements related to storm water ponds. Indexing shall apply to the outstanding balance in accordance with the rate of indexation pursuant to the Development Charge By‑laws.
4. For all other capital projects, a lump sum payment, both the development charge portion and the City portion, will be made to the developer in the year the project is identified in the City’s ten year capital plan at the time the front-ending agreement is approved. Should growth occur earlier than forecasted, then repayment would be accelerated to reflect the revised timing the City would have budgeted for the project. If growth occurs more slowly than forecasted, then the City will have an additional one to three years (one to three years from the year the project was identified in the 10-year plan) to make repayments. Only in this latter case will the City’s portion of the payment be indexed beginning with the year the project was identified in the 10-year plan.
5. The development charge portion that will be reimbursed will be indexed yearly in accordance with the rate of indexation pursuant to the Development Charge By-laws up to the year the capital project has been budgeted. (City Council approved February 7, 2005.)
6. Given that the City will be assuming operating costs earlier than anticipated through the front-ending agreement process, the City is not to pay any carrying costs to the developer.
7. All development charges payable by developers must be paid up front in accordance with the City’s by-law. With the exception of the storm water ponds and related sewer works, there will not be any crediting allowed as a result of entering into a front-ending agreement. On December 8, 2004, City Council approved, “That staff be directed to work with the industry to develop the details of a credit policy to be incorporated into the front-ending policy”.
8. In the case where a developer(s) has front-ended a project that at the discretion of the City benefits other developers, those developers who were not part of the front-ending agreement shall pay all of their development charges owed either at the time of registration of a plan of subdivision or upon the issuance of the first conditional building permit, whichever comes first. (City Council approved July 14, 2004 Motion 16/5)
9. In the case where multiple Front-Ending Agreements are in force in the same area-specific development charge By-law, and the City has approved the Front-Ended works for development charge reimbursements, the Front-Enders will share in the distribution of development charge revenues on a pro-rata basis with other storm water drainage projects. The pro-rated works shall be based on the balance of the outstanding amount owing on the date the repayment is due. Existing Front-Enders will be advised of new Front-Ending Agreements for storm water works within the same benefiting area and area-specific development charge By-law.
10. The capital project upset limits for engineering, project management, and contingency shall be the established rates set in accordance with the City’s Development Charge By-laws and accompanying background studies, as amended.
11. Land remuneration shall be subject to an appraisal by a professional land appraiser and the appraisal shall be conducted in accordance with the terms of reference as established in the City’s Development Charge By-laws and accompanying background studies, as amended. The upset limit for land remuneration shall be the lesser of the appraised value and the upset limit in accordance with the City’s Development Charge By-laws and accompanying background studies.
12. Indexing shall apply to the total project costs if the Front-Ended works have been delayed over a period of time, the Front-Ender provides justification for the delay, and with the written concurrence of the City.
13. Where a Front-Ender is eligible for development charge reimbursement, documentation is required to support the reimbursement in accordance with the City’s Purchasing Policy. The Front-Ending Agreement shall identify at which stage the documentation shall be required. The following documentation shall be forwarded to the City before payment is issued:
· An invoice summarizing the Front-Ended works, and separate cost items, if applicable, for land, construction costs, engineering fees, project management fees, contingency fees, and applicable taxes.
· Payment Certificates, including the final certificate, signed by the developer’s civil engineer.
· All invoices supporting re-payment for the Front-Ended works.
· Statutory Declaration.
· Certificate of Substantial Performance.
· Workplace Safety & Insurance Board Clearance Certificate (WSIB).
· Certificate of Publication.
14. A report to Council is required to authorize staff to enter into a front-ending agreement. The recommendation will include the financial commitment of the City, specify the funding source(s), the project timeline and where necessary, request that a specific deferred revenue account be established. The financial comment in the report will specify the timelines for the repayment, an operating budget impact and an estimate of the year in which the operating budget impact will begin. It should also indicate the year in which the project was originally identified in the City’s ten-year capital plan. A capital project will be established upon Council approval to enter into a front-ending agreement. The status of these projects will be provided to Council on a yearly basis.
15. No capital project identified outside of the Council approved 10-year long-range capital plan, shown in the Development Charge Background Study is eligible to be Front-ended unless another item(s) of comparable value, funding allocation, and timing is delayed. A capital project identified with a post-period deduction applied to the gross cost will only have the development charge portion reimbursed if front-ended over the term of the by-law. Indexing would not be applicable to the repayment of the post-period component of the project cost. If growth occurs more slowly than forecasted, then the City Treasurer will have the authority to add an additional three years, without interest, to the repayment of the post-period component of the front-ended project from development charges.
AREA SPECIFIC DEVELOPMENT CHARGE AREA E-3 DOCUMENT 3
