Staff Report: Atkins Roundabout – Construction Contract Awards

RECOMMENDATION:

THAT Council approve the award of the Six Mile Road at Atkins Road Roundabout Construction contract to Don Mann Excavating at a total bid of $2,960,987.25 excluding applicable taxes;

AND THAT Council approve the award of the Six Mile Rd at Atkins Road Roundabout Contract Administration contract to McElhanney at a total cost of $149,249.00 excluding applicable taxes;

AND THAT the project budget within C-018 be increased by $1,528,000 in the 2024 – 2028 Financial Plan for the Six Mile Road at Atkins Road Roundabout project, utilizing Casino Reserve and ICBC grant funding.

PURPOSE OF REPORT:

The purpose of this report is to solicit Council’s approval of two contracts and a 2024 funding commitment required to construct a roundabout at the intersection of Six Mile Road at Atkins Road.

EXECUTIVE SUMMARY:

The Town received three bids for the Six Mile Road Roundabout Project (C-018), ranging between $3.04M to $3.22M (excluding tax).

The total cost to complete this project will incur a budget shortfall of approximately $1.47M. While the Town attempted to address industry inflation as part of the 2023 budget process (an increase of $1.03M between the 2022 and 2023 capital budget amounts), it is clear from the bid process that this was insufficient to cover the continued inflation in today’s construction industry.

The low bid from Don Mann Excavating Ltd. is compliant with a recommendation from the Town’s contract administrator to award to them. Should Council wish to proceed with the award, then the following adjustments to the budget would be required:

• An addition of $1,528,000 to the project budget C-018, to be incorporated into the 2024-2028 Financial Plan, with $60,000 to come from ICBC grant;
• Award of the Construction tender to Don Mann Excavating Ltd. in the amount of $2,960,987.25 plus GST;
• Award of the Contract Administration and Inspection work to McElhanney in the amount of $149,249.00 plus GST.

Council does have the option of cancelling the tender to secure additional funding in the future (i.e. grants), or to change scope. There are challenges to this given the inflationary environment and the fact that the Ministry of Transportation and Infrastructure own this roadway.

BACKGROUND:

Construction of a single-lane roundabout at the intersection of Six Mile Road at Atkins Road is identified in the approved 2023 – 2027 Financial Plan as project number C-018. The proposal to install a single-lane roundabout at Six Mile Road and Atkins Road is described the Town’s 2020 Six Mile Road Corridor Study; the details of this study may be found on the Town of View Royal’s website. An overall project budget of $2,385,000 was approved by Council in the 2023 – 2027 Financial Plan; funded up to $467,775 from the Development Cost Charges (DCC) Reserve Fund and the remainder from the Community Works Fund (CWF).

Constructing the roundabout entails awarding two contracts; one for construction services and one for contract administration (CA) services.

Construction Services

An opportunity to bid was publicly issued on the BC Bid Portal in accordance with the Town’s Purchasing Policy number 1600-021. The bid opportunity was issued on August 1st, 2023 and closed August 25th, 2023; bid results are included on the next page.

Contract Administration (CA) Services

A proposal from McElhanney was obtained for the provision of CA services. The Town utilized McElhanney’s consulting services for the design and tendering of this project. McElhanney is the consultant that provided the detail design of the roundabout and therefore have intimate knowledge of this project and staff believe they are the best equipped to deliver the required CA services.

PROJECT INFORMATION:

The recommended contract awards will provide a single lane roundabout and associated infrastructure, which generally include earthworks, roadworks, drainage, streetlighting, landscaping.

The construction tender bid results were as follows (inclusive of provisional work, exclusive of applicable taxes):

• Don Mann Excavating Ltd. $ 3,042,307.00
• Ramida Enterprises Ltd. $ 3,103,850.00
• Allterra Construction Ltd. $ 3,224,108.00

Although the bids result all exceeded the Town’s construction estimate, the fact that each bid was within 6% of each other is an indication that the prices reflect standard industry pricing.

As the proposed roundabout is partially located on lands within the jurisdiction of the Ministry of Transportation and Infrastructure (MoTI), formal approval from MoTI will be obtained through their Highway Use Permit.

If the project is awarded, construction would be expected to begin October 2023 and anticipated to be completed by end of May 2024.

A letter of Tender Review and Recommendation for Award from McElhanney is attached to this report.

Staff recommend direct award to McElhanney in accordance with section 10.4 the Town’s Purchasing Policy number 1600-021.

FINANCIAL IMPLICATIONS:

The approved 2023 budget for project C-018 is insufficient to cover the constructions cost of the roundabout. Council will recall as part of the 2023 budget process that staff proposed an increase to the roundabout budget from $1.55M to $2.39M to accommodate the inflationary pressures of the day. It is clear from the tender bids and McElhanney’s findings that inflationary pressures are more significant to this day.

Even with the additional ICBC Road Improvement fund (secured by staff as new funding to the project in 2023), the total budget shortfall is estimated at $1,468,000:

Should Council wish to award the construction of this work, additional funding of $1,468,000 (assuming that $60,000 in ICBC grant funding is awarded) in the 2024 – 2028 Financial Plan (FP) will be required to deliver this project through to completion. Staff have confirmed that the Casino Revenue Reserve Fund is sufficient at this time to fund the required addition; staff will also thoroughly investigate viable funding sources and provide recommendations to Council in February 2024, as part of the 2024-2028 Financial Planning process.

COST-TO-BENEFIT IMPLICATIONS

Staff and its engineering consultant discussed the cost-to-benefit implications of constructing the project now versus cancelling and delaying in the future. The following is a summary of findings:

1. Construction costs have continued to increase year over year, and quite significantly over the last two to three years. It is unknown when inflationary increases will level off; as a result, delaying to the future could further exacerbate anticipated construction costs;
2. Traffic calming and improving all road user’s safety are important to this region as described in the Town’s Six Mile Road Corridor Study and the Active Transportation Network Plan. A roundabout provides significant traffic calming to Six Mile Road, especially in series with the recently installed four-way stop at the Six Mile Road / Chilco intersection;
3. The roundabout forms an integral part of the Six Mile Road improvements that are scheduled to be completed within the next two years. Other anticipated improvements include conceptual reviews of the road cross section to determine pedestrian and cycling connections, a crosswalk at or near Damon Drive, and additional street lighting. Staff recommend that these works be initiated only once the roundabout is completed, especially the Damon Drive crosswalk works: traffic calming is likely required in the vicinity before the crosswalk can be installed.

Staff considered the cost-to-benefit implications of a traffic signal at this location instead of a roundabout. Both traffic signal and roundabout options were included in the 2020 Six Mile Road Corridor Study, whereby a roundabout was ultimately favoured due to:

• Less impacts to travel times on Six Mile Road;
• Lower vehicle approach speeds on Six Mile Road, thus increasing overall safety for all users;
• Prioritizing pedestrians and provides improved connection with the adjacent Galloping Goose trail.
• Lower operational costs.

Council approved the roundabout option over the signalized intersection during previous budget deliberations. Significant design and coordination work with MoTI would be required to confirm the design requirements and costs of a signalized intersection. The cost savings of the signalized intersection will not be as indicated in the 2020 report due to its date and the inflationary pressures that have been apparent since this report was finalized. As signalized intersection would also sacrifice on travel times and safety that the report confirmed were important metrics to the community.

ALTERNATIVES:

Council may choose not to award the project and defer it to a later year with the intent to pursue additional grant funding. By doing this the Town risks incurring unknown inflationary costs and losing ICBC’s funding commitment.

Council may choose not to award the project and direct staff to investigate opportunities to reduce the scope of the project however, it is unknown whether substantial reductions exist as the Six Mile Road is within the jurisdictional and design authority of MoTI. Staff believe that there will likely be no option to substantially make reductions to the design as the roundabout geometry and traffic requirements is already at MoTI minimums. As with deferring the project, the Town risks incurring unknown inflationary costs and losing ICBC’s funding commitment by not proceeding with the project this year.

Council may choose not to award the project and direct staff to further investigate opportunities change the scope of this project, such as installing a traffic signal at this location. There are significant implications to this option, as additional detail design and coordination work would be required, the Town risks incurring unknown inflationary costs and losing ICBC’s funding commitment by not proceeding with the project this year. This option would likely result in deferring the project for a couple of years as the Town would need to budget for a redesign of the intersection in 2024.

Council may choose to indefinitely postpone this project, which would result in $138k spent to date in sunk costs.

CONCLUSION:

With all tender bids being over the project budget, staff are seeking direction from Council whether to (1) Award the tender to the lowest compliant bid by increasing the project budget, or (2) to choose not to award the project and seek other options such as deferral with increased grant funding, deferral with a changed scope, or deferral indefinitely. Given staff’s assessment of the project cost-to-benefit ratio, it is recommended to award the project to Don Mann Excavating Ltd. and McElhanney and to increase the budget in the 2024-2028 Financial Plan by $1,528,000.

Attachments: McElhanney Tender Review and Recommendation for Award Project Summary C-018 Six Mile Road Improvements