Boulevard, Road and Drain Maintenance Contracts Extensions

Boulevard, Road and Drain Maintenance Contracts Extensions

RECOMMENDATION:

THAT the Town execute the Road and Drain Maintenance Contract with Victoria Contracting and Municipal Maintenance Corporation (VCMMC) for the term of June 1, 2025 to May 31, 2030, as described in this staff report;

AND THAT the Town execute the Boulevard Maintenance Contract with Victoria Contracting and Municipal Maintenance Corporation for the term of June 1, 2025 to May 31, 2030, with the deletion of winter annuals plantings and maintenance from the Contract, as described in this staff report.

AND THAT Town staff review and discuss opportunities with VCMMC on deleting additional boulevard servicing throughout the year and bring forward to Council for consideration.

ALTERNATIVE OPTIONS:

Option #2: THAT Council direct staff to undergo the public bid process for the procurement of the maintenance services in accordance with the Purchasing Policy 1600-021. However, this option is not recommended due to the lack of qualified maintenance outfits existing within lower Vancouver Island and high risk of higher costs as a result.

PURPOSE:

To receive Council approval to amend and extend the Road and Drain Maintenance Contract and the Boulevard Maintenance Contract with VCMMC for the term of June 1, 2025, to May 31, 2030.

BACKGROUND:

VCMMC has been the Town’s road and boulevard maintenance Contractor for the past 15 years. Within these 15 years, the Town has entered into three consecutive five-year maintenance agreements with VCMMC. These multi-year contracts ensured that the Town receives consistent and reliable services for boulevard, road and drainage maintenance.

The Contracts cover the following:

Table 1: Maintenance Contract Activities

Staff have regularly monitored VCMMC’s work through service inspections and contractor reviews: VCMMC has performed the maintenance services extremely well and in many instances have gone above and beyond the requirements of the Contract, or responded to minor adjustments without increasing the value of the Contract. Overall, staff have been very pleased with their work: the ongoing business relationship that the Town has had with VCMMC has reduced administrative hardships on staff as the Town continues to grow in population, asset accumulation and complexity.

The current (June 1, 2020 to May 31, 2025) Road and Drain, and Boulevard maintenance contracts with VMCC will expire on May 31, 2025.

DISCUSSION:

Contract Extension (Pre April 8, 2025 Committee of the Whole Meeting)

Staff have worked with VCMMC since mid 2024 to secure competitive pricing. Pricing at the time was based under the assumption of maintaining existing service levels. The proposed new pricing, received only recently, for routine boulevard, road, and drain maintenance services are as follows:

Table 2: New Pricing

Operational financial planning was done in late 2024 to establish budget estimates on an assumed Contract. This was directly applied to the draft 2025-2029 Financial Plan. The established estimates are well aligned with the proposed Contract renewal, resulting in a small variance of anticipated the price increase, within $5,000, detailed in the table below:

Table 3: Impact to 2025 Service Plan Budget

*Includes Boulevard Contract Items

$4,970 to $2.2M budget = 0.2% Increase in Transportation Budget

Comparisons to the current contract rates (year 2024), are as follows:

Table 3: Comparison to 2024 rates

* $35,000 of the $89,640 is due to the transfer of raingarden costs from the Road and Drain Contract to the Boulevard Contract. This was done to realize improved operational efficiencies (timing, scheduling and mobilization of work).

Subsequent years (years 2 to 5) would see annual inflationary increases to the Contract of 2%, which is typical of the previous contracts and it provides cost stability over the five-year term, preventing unpredictable financial impacts.

The proposed pricing reflects the added cost of maintaining new assets acquired in 2024, a cumulative shortfall adjustment to bring the contracts in line with current market rates, and added costs to maintain customer service levels due to unforeseen circumstances. Each of these cost drivers are explained below.

New Assets

New road and drain assets obtained through land development and capital projects are integrated into the scope of the contract and result in a net price increase. Some notable landscaped boulevards added in 2024 include the Six Mile Rd at Atkins Rd roundabout, the treed boulevard on Watkiss Way east of Burnside Rd W, and the boulevards on West Park Lane.

Inflationary Impacts

The previous contract was based on 2020 service rates. Much has changed in the ensuing five years, including labour, material, and equipment costs above the annual 2% base increase that the Town has taken advantage of in the previous Contract. This has resulted in a cumulative shortfall in rate adjustments, which is reflected in the contractor’s proposed pricing. The key drivers are labour costs, cost of trucking, and cost of road salts / brine.

Maintaining Service Levels

Increased costs are also attributable to adjustments (1) to gradually provide level of service to pre-COVID levels and (2) in response to growing infrastructure demands. For example:

• Street sweeping – this service was significantly reduced from the previous Contract in an effort to reduce operational costs. The new Contract increases the service but still at a lower level than pre-COVID levels: it is done to reduce the additional costs that the Town has seen in catch basin maintenance. In other words, catchbasin maintenance has increased in the last five years due to the near absence of street sweeping. It also posed risks of silty drainage entering Portage Inlet or Esquimalt Harbour.
• Contractor safety - traffic volumes near beautified boulevards, medians and rain gardens, has steadily grown. This requires additional traffic control that was not as often required in the previous Contract.
• Aging Infrastructure - irrigation pipes on mature boulevards are breaking more frequently as they age and become encased in roots.

Table 4: Street Sweeping Program

Recommended Contract (Post April 8, 2025 Committee of the Whole Meeting)

At the April 8, 2025 Committee of the Whole Meeting, staff heard the following:

1. 2025 Budget and Five-Year Financial Plan Survey:

   • A desire for residents to have their taxes reduced;
   • A desire for the Town to find ways to reduce spending;
   • A desire for the Town to reduce levels of service on Town boulevards;
   • A desire to cut road maintenance programming on maintenance heavy activities (included in the survey was the noise barrier wall, snow removal, and beautified boulevards in certain regions of View Royal).

2. Committee Discussion:

   • Upon members of the Committee of the whole reviewing the survey and throughout the 2025-2029 Financial Planning process, the Committee has directed staff to report to Council on strategies to reduce the tax burden to residents resulting from the Road and Drain, and Boulevard Contract renewals.

Quick Wins

Upon hearing from the Committee and through subsequent discussions with VCMMC. Staff have identified the following ‘quick wins’:

1. Wins where budget reduction is known:

   • Removal winter annual plantings and maintenance from the Contract (savings of $13,500);
   • Remove Christmas decorations and banners from the Town Budget (not in the Road Maintenance Contract but deletion of this would still reduce the overall Transportation budget (savings of $20,000).

2. Wins where budget reduction is not currently known but can be provided in the near future:

   • Remove select routine residential boulevard maintenance locations from the contract, focusing on removing reasonable areas with no risk to traffic safety on the quarterly and semi-annual maintenance list. While cost savings are currently unknown, this has the potential to result in substantial cost savings by bearing the onus of maintenance to the property owner fronting these boulevards. The following areas were noted to be potential quick wins, and more can be discovered throughout the year:
     • Atkins neighbourhood;
     • Camden/Conard/Chancellor neighbourhoods;
     • Harbor District - View Royal Avenue by Beaumont / Stewart and Plowright roads;
     • St. Giles/Kingham/Chancellor neighbourhoods;
     • Parkcrest/Viewcrest neighbourhoods;
     • Midwood/Werra neighbourhoods;

3. Council may also consider reducing the road sweeping works to the reduced levels exhibited in the previous 2020-2025 road maintenance contract. However, the savings may be offset by additional drainage maintenance work and the Town is at risk of more silts entering regional waterways.

Risks

Generally, any changes to service levels requires careful consideration of potential impacts to public safety, environmental performance and community expectations.

Economies of scale must also be considered. Significant cuts or reduction of contract duration can result in maintenance contractors establishing higher rates to conduct the work, thus reducing any savings.

Finally, careful consideration must be given to the actual savings provided to reducing service. Generally, reducing service does not provide significant savings (i.e. changing boulevard maintenance from every two weeks to every 4 weeks does not constitute 50% in savings. In this particular case, mowing less means more manual weed-whacking, manual labour, usage of heavier duty equipment and additional need to remove invasives and address disease). In other words, the most effective way to reduce costs is to delete service.

What Staff are Already Doing to Assess Level of Service

The Town’s ongoing non-core project, “Establishing Levels of Service” (Project No. N-111), will provide a structured framework for evaluating and setting service levels across key municipal functions, including boulevard, road, and drain maintenance. This initiative is set to be completed in fall 2025. It is intended to support evidence-based decision-making by aligning service delivery with community priorities, available resources, and long-term asset management goals.

Staff will be presenting its findings to Council later this year. This “stage gate” will be a critical and effective time for Council to explore changes to service levels because the tools developed through this project will inform those discussions and guide a consistent, transparent approach to service adjustments, complete with engagement.

STAFF RECOMMENDATION

Given the fair pricing, market alignment, and strong service history, staff recommend extending the contracts for an additional five-year term, adjusted with the following recommendations:

Recommendation #1 Removing winter annual plantings and maintenance from the Boulevard Contract

Recommendation #2 Exercising the Town’s right within both Boulevard and Road and Drain Contracts to remove and amend areas to be maintained / not maintained for the purposes of receiving credit on the Contract (i.e. the Town could pay less throughout the year by deleting service).

Staff also recommend the following to further lower operational budgets (not within Contract):

Recommendation #3 Remove Christmas decorations and banners from the operational budget.

This would result in known savings for 2025 in the amount of $33,500 and the potential for significantly more throughout the year. Cost savings associated with the Recommendation #2 would be rolled over into surplus, and the decrease in budget will be fully realized in 2026 and beyond.

Alternative Options

Council may choose to initiate a competitive bidding process. This option is not currently recommended by staff due to the limited amount of local contractors in our region qualified to provide municipal maintenance services. This would lead to the Town receiving very few bids, risking the receipt of unreasonably high bids (including from the current maintenance Contractor). Furthermore, competitive bid processes for road and boulevard maintenance by other regional municipalities over the last five years were negotiated from a point of weakness and unfavourably.

Conducting a competitive bidding process would require significant staff time without a guarantee of better results. For these reasons, staff do not recommend this option.

ANALYSIS:

Impacts and implications can be summarized as follows:

• Community Impact: Extending the contract ensures that residents continue to receive high-quality boulevard, road and drain maintenance services with minimal disruption or administrative hardships. Reliable boulevard, road and drain maintenance contribute to public safety, mobility, and environmental health.

• Financial Implication: The contract extension alone aligns with the 2025 budget, and the recommended reductions in service will lower the budget by at least $33,500 (with potentially much more savings throughout the year). The annual price increase cap of only 2% provides cost stability over the five-year term, preventing unpredictable financial impacts. Competitive rates have been negotiated, reducing the risk of cost escalation associated with retendering or ad hoc service delivery.

• Inter-governmental Relations Impact: A stable contract supports coordination with regional partners and other governmental agencies, particularly for emergency response, snow clearing, and drainage management.

ALIGNMENT:

The recommended option aligns with the Town’s following core guiding documents as follows:

• Strategic Plan: Extending the maintenance contracts aligns with the Town of View Royal's 2023-2026 Strategic Plan by ensuring consistent, high-quality infrastructure maintenance, which supports the Plan's strategic priority of Service Excellence.

• Official Community Plan: Extending the maintenance contracts aligns with the Official Community Plan's objectives by ensuring the upkeep of essential infrastructure, which supports sustainable growth and enhances the quality of life for residents.

• Other Policy Documents: The recommended contract extensions align with Purchasing Policy #1600-021 by demonstrating best value through fair pricing, proven performance, and a practical, fiscally responsible approach to service delivery.

PUBLIC PARTICIPATION GOAL:

The desired level of public participation for the recommended option is:

[x] Inform [ ] Consult [ ] Involve [ ] Collaborate [ ] Empower
[ ] N/A

TIME CRITICAL:

If the contract extension is not approved then staff must begin the tender process immediately.

CONCURRENCE:

REVIEWED/SUBMITTED BY: