Report to/Rapport au :

 

Council / Conseil

 

12 June 2006 / le  12 juin 2006

 

Submitted by/Soumis par : Kent Kirkpatrick, City Manager/Directeur des services municipaux

 

Contact Person/Personne ressource : Réjean Chartrand, Director, Economic Development and Strategic Projects/Directeur, Développement économique et Projets stratégiques

Economic Development and Strategic Projects/Développement économique et Projets stratégiques

(613) 580-2424 x21696, Rejean.Chartrand@ottawa.ca

 

City Wide

Ref N°: ACS2006-PGM-ECO-0014

 

 

SUBJECT:

NORTH-SOUTH CORRIDOR LIGHT RAIL TRANSIT PROJECT CONTRACT AWARD FOR DESIGN, CONSTRUCTION AND 15-YEAR MAINTENANCE

 

 

OBJET :

ATTRIBUTION DU CONTRAT DU TRONÇON NORD-SUD DE TRANSPORT EN COMMUN PAR TRAIN LÉGER POUR LA CONCEPTION, L'AMÉNAGEMENT ET L'ENTRETIEN PENDANT 15 ANS

 

 

REPORT RECOMMENDATIONS

 

That City Council approve:

1.      The contract for the design, construction, and 15 year maintenance of City Council’s priority North-South Light Rail Transit (LRT) Project, which sets a fixed price for the delivery of the Project on a fixed date and provides for an effective 15-year full warranty on the civil, electrical and mechanical components of the system, including the vehicles:

a.       be awarded to an entity, otherwise known as a Special Purpose Corporation (SPC), to be incorporated by the Siemens-PCL/Dufferin Team, for $654.2 million for the design and construction of the Project as described in the report; and

b.      that the City Manager or the Director, Economic Development and Strategic Projects be authorized to negotiate, approve, and execute all necessary agreements with the University of Ottawa for the extension of the Project on to the University of Ottawa campus, generally in accordance with the Memorandum of Understanding executed between the City and the University of Ottawa (Document 2); and

c.       that the City Manager or the Director, Economic Development and Strategic Projects be authorized to finalize, approve, and execute all agreements related to the transfer of air rights and the construction of an LRT station with Carleton University, generally in accordance with the Memorandum of Understanding executed between the City and Carleton University (Document 3);

d.      that the contract be awarded to an entity, otherwise known as a Special Purpose Corporation (SPC), to be incorporated by the Siemens-PCL/Dufferin Team, for $220,500,312, which represents the Net Present Value, for the 15-year maintenance of the system and Maintenance Centre and equipment capital lease as described in the report;

e.       that the City Manager or the City Treasurer be authorized to negotiate, approve and execute all necessary agreements to enter into a lease-lease back for the Maintenance Facility/Equipment over a fifteen year period commencing from expected completion in December 2009;

f.        that, in order to co-ordinate with other already scheduled City projects so as to minimize public inconvenience and construction times, reduce costs and take advantage of the ability to integrate the project under one contract, the Siemens-PCL/Dufferin Team, through the SPC, also undertake the road, sewer, water, bridge infrastructure improvements described in this report including an additional $35.4 million for the design and construction of the Strandherd-Armstrong Bridge and related roadworks and an additional $13 million for the design and construction of the complementary water and sewer works;

g.       that the City Manager or Director, Economic Development and Strategic Projects be authorized to finalize all negotiations with the Siemens-PCL/Dufferin Team and the SPC according to the provisions outlined in this report, and to approve all necessary documents and agreements related to this contract award, and that the Mayor and City Clerk be authorized to execute these agreements;

h.       that the services of an Independent Engineer be retained to provide independent validation of the Project components as well as on-going LRT project auditing, in accordance with agreements made with the Government of Canada and Province of Ontario, and that the Director, Economic Development and Strategic Projects or the Manager, Light Rail Implementation Division be authorized to negotiate, approve and execute all necessary agreements with the Independent Engineer;

i.         that the Director, Transit Services or the Director, Economic Development and Strategic Projects be authorized to negotiate, approve, and execute all necessary agreements related to the delegation of authority under Bill C-11 to construct and operate the LRT system;

j.        that the Security Deposits of $2,550,000 be returned and that the Honorarium of $1.0 million be paid to each of the two unsuccessful Proponents.  Payment of the Honorarium gives the City the right to any design ideas and innovations to further enhance the preliminary designs prepared by the Siemens-PCL/Dufferin Team;

  1. The design and construction of the extension of the North-South LRT Project from Woodroffe Avenue to Barrhaven Town Centre be included as part of the North-South LRT Project for an additional amount of $24 million, in order to take advantage of the significant cost savings associated with advancing the project at this time and the funding available from the Provincial Transportation Grant, so that
    1. $12.4 million of the $32.9 million Provincial Transportation Grant be allocated to the Barrhaven Town Centre Extension to the priority North – South LRT Project, and the residual funding authority required be approved as identified in this report;
    2. The disposition of the remainder of the Provincial Transportation Grant received from the 2006 Ontario Provincial Budget be allocated to priority Transportation Master Plan initiatives for the west, east and rural parts of the City as follows:

                                                               i.      $15.5 million for the completion of the West Transitway from Bayshore Station to Pinecrest Road, and the residual funding authority required be approved as identified in this report and that staff be directed to proceed with the construction of the West Transitway from Bayshore Station to Pinecrest Road;

                                                             ii.      $3 million for the remediation of traffic congestion at the Highway 417/174 split, and the residual funding authority required be approved as identified in this report, and staff be directed to proceed with the design and construction for the improvements for the Highway 417/174 split;

                                                            iii.      $2 million for rural road network improvements, and that staff be directed to proceed with the next priority rural road network improvements.

 

  1. To allow the City to move forward with initiatives that will add to the City’s capacity to leverage the outcomes of the North-South LRT Project and those which are needed to effect a smooth transition from the current operation of the O-Train to the North-South LRT project, specifically
    1. staff be directed to establish a tool to track the increases in property value within 600 meters of a LRT station at the time of any amendments to the zoning by-law that provide for increased development potential due to the LRT project, and that staff report back to Council every two years on that “value uplift”;
    2. staff be directed to continue to investigate opportunities to market, joint venture or enter into public-private partnerships for city-owned properties along the North-South LRT corridor, to continue to undertake public planning processes and review development applications in a manner that promotes transit-oriented development at LRT stations, paying particular attention to the Barrhaven and Riverside South Town Centres , and to ensure that LRT stations are constructed so that they facilitate the integration of future development;
    3. the operations of the current O-Train be discontinued by May 2007, and that the Transit Services Branch consult with the public on the replacement transit service to be provided until the commissioning of the Project in 2009.

  2. In order to meet the North-South LRT Project’s funding requirements:
    1. The City Manager or the Director, Economic Development and Strategic Projects or the City Treasurer be authorized to finalize and approve a Contribution Agreement with the Government of Canada and Province of Ontario on Project funding, in accordance with the Memorandum of Understanding executed between the Government of Canada, Province of Ontario, and the City in April 2005, and that the Mayor be authorized to execute this agreement (Document 4);
    2. The City Manager or City Treasurer be authorized to finalize negotiations, approve, and execute all necessary agreements with the Province of Ontario for its share of funding for the Project, at no cost to the City;
    3. Staff be directed to immediately initiate the disposal process of the three existing O-Train vehicles following the discontinuance of service;
    4. Additional capital authority of $10 million required for project management of the total Project be approved in 2006, as outlined in this report; and further that the estimated $6 million required to run the Project Office be included as part of the budget in each year of the construction period (2007-2010).
       
  3. That the contract award and, where applicable, all agreements are subject to final negotiations with the Siemens-PCL/Dufferin team, approval of the Environmental Assessment (EA) amendment for the extension to Ottawa University, execution of legal agreements with University of Ottawa, and the execution of a Contribution Agreement on funding between the Government of Canada, Province of Ontario, and the City.

  4. That the Director, Economic Development and Strategic Projects provide quarterly information reports to the Corporate Services and Economic Development Committee on the progress of the North-South LRT project, and the Manager, Light Rail Implementation be designated as the primary liaison with members of City Council for the Project.

 

RECOMMANDATIONS DU RAPPORT

 

Ce Conseil municipal approuve que :

1.      le contrat de conception, d’aménagement et d’entretien pendant 15 ans du projet prioritaire du tronçon nord-sud de transport en commun par train léger (TLR) du Conseil municipal, qui établit un prix fixe pour la livraison du projet à une date déterminée et fournit une garantie complète de 15 ans effectifs sur les composantes civiles, électriques et mécaniques du système, y compris les véhicules :

a.       soit attribué à une entité, connue autrement sous le nom de société à objectif spécifique, soit attribué au groupe Siemens-PCL/Dufferin, pour un montant de 654,2 millions $ pour la conception et l’aménagement du projet tel qu’indiqué dans le rapport;

b.      que le chef des Services municipaux ou le directeur du Développement économique et des projets stratégiques soit autorisé à négocier, approuver et signer tous les accords nécessaires avec l’Université d’Ottawa pour la prolongation du projet sur campus de l’Université d’Ottawa, dans l’ensemble conformément au Protocole d’entente conclu entre la Ville et l’Université d'Ottawa (document 2);

c.       que le directeur des Services municipaux ou le directeur du Développement économique et des projets stratégiques soit autorisé à mener à bien, approuver et signer tous les accords liés au transfert des droits relatifs à la propriété du dessus et à la construction d’une station de TLR avec l’Université Carleton, dans l’ensemble conformément au Protocole d’entente conclu entre la Ville et l’Université Carleton (document 3);

d.      que le contrat soit attribué à une entité, connue autrement sous le nom de société à objectif spécifique, représentée par le groupe Siemens-PCL/Dufferin, pour un montant de 220,500,312 $, ce qui représente la valeur actualisée nette pour l’entretien pendant 15 ans du système et la location-acquisition tel qu’indiqué dans le rapport;

e.       que le directeur des Services municipaux ou le trésorier de la Ville soit autorisé à négocier, approuver et signer tous les accords nécessaires pour s’engager dans un accord de crédit-bail concernant les installations et équipements d'entretien sur une période de quinze ans à partir de la date d’achèvement prévue en décembre 2009;

f.        que, dans le but d’assurer la coordination avec d’autres projets municipaux déjà programmés de façon à minimiser les inconvénients pour le public et la durée des travaux, réduire les coûts et tirer profit de la capacité à intégrer le projet dans un seul contrat, le groupe Siemens-PCL/Dufferin, par l’intermédiaire de la société à objectif spécifique, entreprenne également les améliorations d’infrastructure des routes, des égouts, des eaux et des ponts indiquées dans ce rapport, y compris 35,4 millions $ pour la conception et l’aménagement du pont Strandherd-Armstrong et les travaux routiers associés et 13 millions $ pour la conception et l’aménagement des installations complémentaires d’eau et d’égout;

g.       que le directeur des Services municipaux ou le directeur du Développement économique et des projets stratégiques soit autorisé à mener à bien toutes les négociations avec le groupe Siemens-PCL/Dufferin et la société à objectif spécifique conformément aux dispositions énoncées dans ce rapport, et à approuver tous les documents et accords nécessaires liés à l’attribution de ce contrat, et à ce que le maire et le greffier de la Ville soient autorisés à signer ces accords;

h.       que les services d’un ingénieur indépendant soient retenus pour fournir une validation indépendante des composantes du projet ainsi qu'une évaluation continue du projet de TLR, conformément aux accords passés avec le Gouvernement du Canada et la Province de l’Ontario, et que le directeur du Développement économique et des projets stratégiques ou le gestionnaire de la Division de mise en œuvre du train léger soit autorisé à négocier, approuver et signer tous les accords nécessaires avec l’ingénieur indépendant;

i.         que le directeur des Services de transport en commun ou le directeur du Développement économique et des projets stratégiques soit autorisé à négocier, approuver et signer tous les accords nécessaires liés à la délégation de pouvoirs en vertu du projet de loi C-11 pour construire et exploiter le système de TLR;

j.        que les dépôts de garantie de 2 550 000 $ soient renvoyés et que les honoraires de 1,0 million $ soient versés à chacun des deux promoteurs qui ont échoué. Le paiement des honoraires donne à la Ville le droit à toutes les idées et innovations en matière d'aménagement pour améliorer les conceptions préliminaires proposées par le groupe Siemens-PCL/Dufferin;

 

2.   la conception et l’aménagement du prolongement du projet du tronçon nord-sud de TLR de l’avenue Woodroffe au centre-ville de Barrhaven soient inclus dans le projet de tronçon nord-sud de TLR pour un montant additionnel de 24 millions $ afin de tirer profit des économies de coût importantes liées à l’avancement du projet à l'heure actuelle et des fonds disponibles provenant des subventions provinciales de transport de manière à ce que

a.   12,4 millions $ des 32,9 millions $ provenant de la subvention provinciale de transport soient alloués au prolongement du centre-ville de Barrhaven dans le cadre du projet prioritaire du tronçon nord-sud de TLR; et que l'autorisation de financement requise soit approuvée telle qu'elle est indiquée dans ce rapport;

b.   la mise à disposition du restant de la subvention provinciale de transport reçue du budget provincial de l’Ontario 2006 soit attribuée aux initiatives prioritaires du Plan directeur des transports pour le sud, l’ouest et l’est de la Ville comme suit :

i.    15,5 millions $ pour l’achèvement du Transitway ouest de la station Bayshore au chemin Pinecrest; et que l'autorisation de financement requise soit approuvée telle qu'elle est indiquée dans ce rapport et que l'on demande au personnel de poursuivre la construction du Transitway ouest de la station Bayshore au chemin Pinecrest;

ii.    3 millions $ pour remédier à la congestion routière au niveau de l’embranchement des autoroutes 417 et 174; et que l'autorisation de financement requise soit approuvée telle qu'elle est indiquée dans ce rapport et que l'on demande au personnel de poursuivre les travaux d’amélioration de l’embranchement des autoroutes 417 et 174;

iii.   2 millions $ pour les améliorations du réseau routier rural, et que l'on demande au personnel de poursuivre les améliorations du réseau routier rural.

 

3.   permettre à la Ville d’avancer grâce à des initiatives qui lui permettront de rallier davantage les résultats du projet du tronçon nord-sud de TLR à ceux qui sont nécessaires pour effectuer une transition en douceur de l’exploitation actuelle de l’O-Train au projet de tronçon nord-sud de TLR, en particulier

a.       on demande au personnel de créer un outil pour suivre les augmentations de valeur foncière dans un périmètre de 600 mètres de la station de TLR au moment de toute modification apportée au règlement de zonage qui permet un potentiel de développement accru en raison du projet de TLR, et que le personnel fasse un rapport au Conseil tous les deux ans sur cette « amélioration de la valeur »;

b.      on demande au personnel de continuer à chercher des possibilités de commercialiser, de mener des entreprises communes ou d’établir des partenariats public-privé pour les propriétés appartenant à la ville le long du couloir nord-sud de TLR, de continuer à entreprendre des processus de planification publique et examiner des applications de développement de manière à promouvoir l’aménagement axé sur le transport en commun aux stations de TLR, en portant une attention particulière aux centre-villes de Barrhaven et de Riverside Sud, et d’assurer que les stations de TLR soient aménagées de façon à faciliter l’intégration d’un développement futur;

c.       le fonctionnement de l’actuel O-Train soit interrompu avant mai 2007, et que la branche des services de transport en commun procède à des consultations publiques pour qu’un service de transport en commun de remplacement soit fourni jusqu’à la mise en service du projet en 2009.

4.   afin de répondre aux exigences de financement du projet du tronçon nord-sud de TLR :

a.       le directeur des Services municipaux, le directeur du Développement économique et des projets stratégiques ou le trésorier de la Ville soit autorisé à mener à bien et approuver un accord de contribution avec le gouvernement du Canada et la province de l'Ontario sur le financement du projet, conformément au protocole d’entente conclu entre le gouvernement du Canada, la province de l’Ontario et la Ville en avril 2005, et que le maire soit autorisé à signer cet accord (document 4);

b.      le directeur des Services municipaux ou le trésorier de la Ville soit autorisé à mener à bien des négociations, approuver et signer tous les accords nécessaires avec la Province de l’Ontario pour sa part de financement du projet, sans frais pour la Ville;

c.       on demande au personnel de débuter immédiatement le processus de mise au rebut des trois véhicules de l’O-Train existants suite à l’interruption du service;

d.      une autorisation d’immobilisations supplémentaires de 10 millions $ nécessaires à la conception, l’aménagement et la gestion du projet en entier soit approuvée en 2006, tel qu’indiqué dans le présent rapport; et que les 6 millions $ estimés nécessaires pour faire fonctionner le Bureau de projet soit compris dans le budget chaque année de la période des travaux (2007 à 2010).

5.   que l’attribution du contrat et, le cas échéant, tous les accords, soient sujets à des négociations finales avec le groupe Siemens-PCL/Dufferin, l’approbation de la modification de l’évaluation environnementale (EE) pour l’extension jusqu’à l’Université d’Ottawa, la signature des accords juridiques avec l’Université d’Ottawa et la signature d’un accord de contribution sur le financement entre le gouvernement du Canada, la province de l’Ontario et la Ville.

 

6.   que le directeur du Développement économique et des projets stratégiques fournisse des rapports d’information trimestriels au Comité des services organisationnels et du développement économique sur l’évolution du projet du tronçon nord-sud de TLR, et que le gestionnaire de la mise en œuvre du train léger soit désigné comme contact principal pour les membres du Conseil municipal concernant ce projet.

 

BACKGROUND AND EXECUTIVE SUMMARY

 

The quality of a city’s transportation network has a major impact on citizens’ quality of life and on the local economy, and having a well-run, well-designed public transit system that meets the needs of residents is critical to building a more sustainable city. High quality public transit reduces or defers the need to build more roads and offers significant side benefits, such as less air and water pollution, less traffic congestion, more compact and efficient development and the creation of high quality community living. With rising fuel and insurance costs, it is expected that more and more residents will want to be able to choose comfortable and reliable public transit to move around their city.

 

The City of Ottawa (specifically the former Regional Municipality of Ottawa-Carleton) began planning for the future needs of rapid transit in the 1970s. The subsequent Rapid Transit Development Program, completed in 1981, led to the construction of the initial 31km of the Transitway network (the section from Baseline Road in the southwest to Blair Road in the east and Hunt Club Road in the southeast).  The initial program was completed in 1996, and since then has been expanded through new stations, park and ride lots, and freeway and arterial bus-only lanes. The City of Ottawa introduced its first rail transit service as a pilot project in the fall of 2001.  Some of these accomplishments were part of the original vision of the 1970’s; others were a response to the changes that took place as the City grew.  Ridership has increased by 11% over the last 5 years, with a total of 89.5 million trips in 2005.  Per capita, Ottawa has the largest public transit ridership levels of any city its size in North America.

 

As the end of the lifecycle of the previous transit plan came near, plans for the next two decades were developed by the City as part of the development of the Official Plan and the overall Ottawa 20/20 vision for the future. In February 2003, City Council approved its vision for how the City’s transit system should grow in the City’s Rapid Transit Expansion Study (RTES).  RTES included an in-depth comparison of Bus Rapid Transit (BRT) and Light Rail Transit (LRT) technologies, the development and recommendation of the rapid transit network component of Ottawa’s overall transportation system (which would be a combined BRT and LRT network), and the identification of the best technology for each corridor.

 

As part of RTES, City Council identified the North-South LRT as its number one priority project because of three primary considerations:

1.      Scope – The project scope and scale were considered to be both achievable and manageable given the projected resource requirements and the anticipated benefits from its completion.

2.      Anticipated Social and Economic Returns – Modelling identified that the North-South line offers a good combination of existing ridership demand (Barrhaven, universities, and the downtown core) with the opportunity to design new communities (Riverside South, Barrhaven Town Centre) specifically to take advantage of Light Rail as a transit first option for those communities – maximizing the potential for new ridership and helping to achieve the Council’s desired modal split goals (a share of 30% for transit riders during peak hours).

3.      City-wide Benefits – The development of Light Rail Transit and improvements to the City’s modal split will provide a wide array of benefits for all residents not just for transit riders.  For example, it will lead to significant reductions in traffic on major arterial roads that are already at capacity, and reduce pollution

 

The North-South corridor was again confirmed by Council as its highest priority project in July 2003 as part of the City’s Transportation Master Plan, and in September 2003 as part of its approval of the Ottawa Rapid Transit Expansion Plan Implementation Strategy (ORTEP).  These reports also identified that funding the needed system would be a challenge for the municipality on its own, and that funding was needed from the other levels of government. When City Council approved RTES, they also asked the City to communicate with the federal and provincial governments to secure funding for the priority North-South project.  Work with the other levels of governments to secure funding for Ottawa’s transit needs took place while Council made progress on the needed improvements so that the City would be well positioned to take advantage of any funding that the federal and provincial governments might make available.

 

In January 2004, the Transportation Committee approved the methodology, public consultation process and deliverables for the Environmental Assessment (EA) Study for the North-South LRT project.  In May 2004, the federal and provincial governments committed $400 million for the design and implementation of the North-South Light Rail Project from downtown to South Nepean.  City Council approved the North-South LRT Corridor EA Study in June 2005, which included a description of the full build-out project from the Rideau Centre to the Barrhaven Town Centre, a description of the Phase 1 construction project, and approval for staff to initiate the property acquisition process.  Community Design Plans for Riverside South, Leitrim, and the Barrhaven Town Centre were developed and approved with the North-South LRT as the backbone of each Plan.

 

With the significant contributions from the other levels of government announced, City Council determined that it wanted to move quickly to take advantage of the renewed federal and provincial interest in investing in transit and in Council’s priority project. In order to take advantage of external expertise in Light Rail, to guarantee best value for the investment and to be able to implement Council’s vision before 2010, City Council approved the use of a public-private partnership approach for the construction, design and maintenance of Council’s priority North-South LRT project in March 2005 and determined the operation of the system would be carried out by City staff.  At that time, Council chose a two-stage procurement process consisting of a Request for Qualifications (RFQ) for civil constructors and vehicle manufacturers followed by a Design-Build-Maintain Request for Proposals (RFP) from consortia consisting of the pre-qualified civil constructors and vehicle manufacturers.

 

City Council determined where it would be consulted within the significant project milestones and directed that the City’s Selection Panel include the Mayor, the Chairs of the Transportation Committee and the Planning and Environment Committee, the City Manager, the Deputy City Manager of Planning and Growth Management and the Director of Economic Development and Strategic Projects.  The Selection Panel was tasked with qualifying proponents for the RFP, selecting a Preferred Proponent and approving the contract that would be recommended to City Council for approval.  The process began in March 2005, and was scheduled for completion in June 2006 (A complete list of the project milestones can be found in Document 5). 

 

This report is the culmination of this negotiation process and is the final milestone in the procurement process for the Council-approved North-South LRT system.  At its most basic level, it is the award of contract for the design, construction and maintenance of the City Council-approved priority transit project. 

 

There were three proposals by qualified consortia that met all the City’s requirements and that met all the required technical specifications as determined by the Technical Evaluation Committee and the Selection Panel.  They were:

1.      The Ottawa LRT Group (SNC Lavalin; Bombardier)

2.      The Ottawa Transit Group (P. Kiewit; Kinkisharyo; Herzog)

3.      The Siemens-PCL/Dufferin Team (Siemens; PCL)

 

On the basis of a review of the project teams’ financial submissions by the Financial Review Committee, the Siemens-PCL/Dufferin Team was the unanimous choice of the Selection Panel, and a process of negotiations to add value to the project began.

 

The highlights of the recommended City of Ottawa and Siemens-PCL/Dufferin Team North-South LRT Project includes:

·        a fleet of 21 world class, fully accessible Siemens S70 Light Rail Vehicles (LRV) operating at 10-minute intervals between Woodroffe and Leitrim and at 5-minute intervals between Leitrim and University of Ottawa;

·        twenty-one different station locations along the route; 3 new, convenient Park-and-Ride/Kiss-and-Ride - at Woodroffe Station (providing direct LRT access for South Nepean residents as well as the ability to serve commuters from Manotick, Kars, North Gower, Kemptville and surrounding areas, at River Road Station (providing direct access for residents of the western portion of the Riverside South community as well as the ability to serve commuters travelling from the above noted areas south on River Road and Prince of Wales Drive) and Leitrim Station providing direct access for the Leitrim and Riverside South communities as well as the ability to serve commuters travelling from the large rural commuter areas in Osgoode);

·        over 27 km of electrified LRT track, complete with a 1500vDC traction power system, communications and train control systems and signals;

·        Albert and Slater Streets between Elgin Street and Bronson Avenue will be finished to a high quality of urban design with streetscaping, paving and sidewalk finishes, lighting and street furniture and station platforms and shelters;

·        a new pedestrian/cycling path bridge will be constructed to link the Carleton University campus to the pathways in Vincent Massey Park;

·        Barrhaven and Riverside South communities will be connected via the Strandherd-Armstrong LRT/road Bridge to form a continuous new East-West arterial road corridor for the City;

·        each fully accessible LRT station will have pathway connections, bicycle parking and feature a unique landscaping theme (a particular shrub such as lilacs for example) that will assist in providing station identity.

 

Negotiations have been completed with the Siemens-PCL/Dufferin Team on the design, construction, and maintenance of the Council-approved North-South LRT system.  The contract that has been negotiated has been approved by the Selection Panel and is now before Council for consideration and approval. It provides significant advantages for the City including:

 

  1. A guarantee of project completion both on time and on budget and an effective fifteen year guarantee on all system components;
  2. The concurrent development of other City infrastructure projects such as the Strandherd-Armstrong Bridge in order to minimize public inconvenience and construction times, reduce costs and take advantage of the ability to integrate the project under one contract; and
  3. Excellent value for money on the products and services that are being procured.

 

As part of the negotiation process, an opportunity was identified to move a proposed future expansion of the line to Barrhaven Town Centre forward from 2009, with a significant cost savings – requiring an additional investment of $24 million as opposed to a cost of $33 million if the work were undertaken independently at a later time.  These savings are due to significant savings on the mobilization of construction resources that would already be engaged as part of the broader construction associated with the completion of the North-South LRT project.

 

The proposal being presented to Council for approval represents a significant value for the City.  In negotiating the contract, the City ensured that:

 

  1. The project delivers all the Council-approved elements within the proposed timelines;
  2. It transfers all significant design, construction and maintenance risks from the City to the contractor offering cost certainty for the construction and 15-year maintenance of the system; and
  3. The contractor provides a guarantee on the components of the system for fifteen (15) years, in excess of the industry standard of two years.

 

The City achieved these outcomes while ensuring that the project cost was maintained within 2.0% of the Council-approved budget.  This is especially significant given that, unlike other major infrastructure projects in which cost overruns are not unusual, the unique P3 structure of the proposed contract ensures that major future financial risk is transferred to the contractor.

 

The financing for this project represents a significant opportunity to leverage property tax dollars.  Over 95% of total budget is leveraged from other orders of government, development charges, and other sources, with the remainder coming from tax-supported transit reserves.  Further, approximately 80% of the investment in the project will go directly back into the community, creating local jobs and enhancing local businesses.  In addition, an independent consultant’s report indicates that the potential property value-uplift as a result of this project will be on the order of $800 million (with a commensurate increase in property tax revenues that benefit all citizens of Ottawa). A portion of this uplift value will accrue directly to the City as the owner of some of the significant parcels of land that will experience increases in value. The Selection Panel has directed that no dollar amount be attributed to these uplift benefits either from direct revenue or from expected increase in property tax revenue. The City will enjoy significant revenues from land value uplift, but these revenues have not been used as offsets in the project budget because they cannot be immediately realized.

 

Staff had previously recommended to Council that any decisions regarding the $32.9 million Provincial Transportation Grant received from the 2006 Provincial Budget wait until the full cost of undertaking the LRT project was known at the end of the procurement process. The leveraging of taxpayers dollars has been successful to such an extent that most of this Provincial grant funding can be allotted to priority transportation projects in the west, east, south, and rural areas, specifically expanding the West Transitway, addressing the traffic congestion issues in Ottawa’s east end by improving the Highway 417/174 split, by including the Barrhaven extension to the North-South LRT project and by increasing the budget for rural road network improvements.

 

With the culmination of the procurement process, City Council has essentially three options before it:

  1. Approve the recommendations in the report (meaning construction would begin in September 2006, and be completed in December 2009);
  2. Delay approval of the contract (estimated cost of delaying approval of the project for six months is $65-$80 million, with a completion date of summer 2011);
  3. Do not approve the contract (meaning the corridor does not get built, which will result in significant pressures on arterials that are already at capacity -- i.e. Limebank, River Rd., Hawthorne, Airport Pkwy., Albion, Bank, and Conroy -- and the need to redo the Riverside South and South Nepean Town Centre Community Design Plans).

 

In conclusion, the Selection Panel believes Council can have full confidence that the procurement process it set out is delivering the best possible value for this project.

 

The Selection Panel has unanimously endorsed the recommendations contained in this report. All contract negotiations are completed and legal contractual agreements are ready for execution. The Siemens-PCL/Dufferin Team has indicated in writing that they are ready to execute these agreements immediately following contract award.

 

DISCUSSION

 

Federal and Provincial Support for the City’s priority North-South LRT Project

When Council began developing its plans to address the longer-term transit needs of the City of Ottawa in 2002 and 2003, the federal and provincial governments had abandoned their traditional roles in investing in public transportation – investments that had made it possible for the Transitway to be built. What was once sustained strategic funding had dwindled to ad hoc, project-based grant funding that made it difficult for municipalities to plan for the significant transportation infrastructure investments that they needed to be able to compete in the global economy and maintain and improve the quality of life for their residents.  The lack of sustained funding from the other levels of government was identified as the most significant challenge the City was facing in terms of implementing the recommendations City Council approved in the Rapid Transit Expansion Study (RTES) and in the Ottawa Rapid Transit Expansion Plan Implementation Strategy (ORTEP).

 

Since that time, both the federal and provincial governments have recognized that there is considerable value in providing municipalities “with a source of stable, predictable and long-term funding for environmentally sustainable municipal infrastructure”[1] To that end, the federal government is providing a portion of their gas tax revenues to municipalities for transit until at least 2010, and the provincial government is providing a portion of their gas tax revenue for the same purposes with no end date.  This funding stream allows the City to be able to move forward with the implementation of Council’s priority transit projects as identified in RTES, ORTEP and the Transportation Master Plan (TMP) without putting unsustainable pressure on the tax-supported reserves. Rather, City Council has adopted a funding strategy that dedicates these funds to a financing package that will allow the City to proceed with growth-related transit investments by debt financing some eligible projects and using the future stream of gas tax payments to pay the debt charges and retire the debt for those projects. 

 

In addition to that new funding stream for transit priorities, both the federal and provincial governments identified significant public value in the North-South Light Rail Transit (LRT) project.  Specifically, the federal and provincial governments are contributing $400 million to build City Council’s priority North-South Light Rail Transit project because it will improve air quality, connect major employment nodes and provide a showcase for using an urban rapid transit project to shape future sustainable development. Specific benefits identified are: 

 

 

In addition to these goals, both the federal and provincial governments are keenly interested in this project’s public private partnership (P3) and shared funding model. The City of Ottawa is a pioneer in the municipal use of P3s to fund its projects and the successful execution of five previous P3s, although smaller in scale, is another factor in the federal and provincial government’s support for the North-South Light Rail project.

 

The results of the procurement process to build the North-South Light Rail Project

With the federal and provincial government’s renewed support for transit infrastructure and their specific investment in the North-South LRT project in place, the City was able to move forward on the implementation of the priority project.  In March 2005, City Council approved the use of a public-private partnership approach for the construction, design and maintenance of Council’s priority North-South LRT in order to take advantage of external expertise in Light Rail (this is the City’s first rail project), to guarantee best value for the investment (average savings of 10-15% over the base cost/public sector comparator) and to be able to implement Council’s vision before 2010 (clear and tight timelines are important both for the attractiveness of the project in the marketplace and for the City to achieve the full benefits of the project as soon as possible).

 

City Council’s two-stage procurement process consisting of a Request for Qualifications (RFQ) for civil constructors and vehicle manufacturers followed by a Design-Build-Maintain Request for Proposals (RFP) from consortia consisting of the pre-qualified civil constructors and vehicle manufacturers was overseen by a Selection Panel appointed by Council that consisted of the Mayor, the Chairs of the Transportation Committee and the Planning and Environment Committee, the City Manager, the Deputy City Manager of Planning and Growth Management and the Director of Economic Development and Strategic Projects. Council tasked the Selection Panel with the authority and responsibility for qualifying proponents for the RFP, selecting a Preferred Proponent and recommending the contract award to City Council for approval. 

 

As was stated earlier, there were three proposals by qualified consortia that met all the City’s requirements and that had the minimum required technical specifications as determined by the Technical Evaluation Committee and the Selection Panel.  They were The Ottawa LRT Group (SNC Lavalin; Bombardier); The Ottawa Transit Group (P. Kiewit; Kinkisharyo; Herzog); and The Siemens-PCL/Dufferin Team (Siemens; PCL).

 

In April 2006, the Siemens-PCL/Dufferin Team was chosen unanimously by the Selection Panel as the Preferred Proponent with whom to negotiate, based on the technical merit of their proposal and on a rigorous review of both the “Value Added” and financial components of their proposal.

 

The Siemens-PCL/Dufferin Team has a strong presence in Canada. Siemens Canada Limited is a Canadian company (Chartered in Canada in 1912) with almost 6,000 employees in Ontario alone and over 7,200 in Canada.  Siemens has over 2000 active unionized employees in Canada.  The company is recognized as a world leader in light rail technology and constructed the light rail systems currently operating in Calgary and Edmonton. The PCL family of companies was founded in 1906 in Canada and is Canada's largest general contracting organization.  According to the Ottawa Business Journal 2006 Book of Lists, PCL is also the largest building contractor in Ottawa.   PCL Ottawa's construction portfolio includes Scotiabank Place, Ottawa Macdonald-Cartier International Airport Passenger Terminal (the Ottawa Airport) and most recently, the new Canadian War Museum.  Founded in 1912 in Canada, Dufferin is also a major Canadian construction company and Canada's largest road-builder.

 

Their bid delivers the Council-approved Light Rail Transit system in many ways. The elements of both the bid and the results of the subsequent negotiations form the basis of the contract that the Selection Panel unanimously approved and is recommending to City Council. The major elements of both the system and the contract are outlined in the remainder of the report.

 

 

The City of Ottawa - Siemens-PCL/Dufferin North-South Light Rail Transit System

In 2011, within two years of opening, a projected ridership of over 43,500 people per weekday will use this North-South Light Rail Transit line. The recommended Project shown in Document 1 consists of electrically powered Light Rail Transit service running from the University of Ottawa to Woodroffe Station.

 

The highlights of the proposed Project include:

 

1.      World Class Passenger Vehicles - Passengers will be served by a fleet of 21 Siemens S70 Light Rail Vehicles (LRV) operating at 10-minute intervals between Woodroffe and Leitrim and at 5-minute intervals between Leitrim and University of Ottawa. 

 

The Siemens S70 LRV is a modern, low floor vehicle designed for convenient boarding and high-speed travel.  It is currently in use in San Diego, Houston, and Paris.  The S70 is accessible from all LRT platforms and will provide onboard accommodation for wheelchairs. Approximately 70% of the length of the passenger compartment is low floor for passenger convenience. The interior of the S70 is air conditioned, and features a passenger information system and CCTV surveillance. Each vehicle has the capacity to carry over 200 passengers, with four (4) wheelchair accessible spaces and space for bikes.


 

2.      Ease of Access - Passengers can access the LRT at twenty-one different station locations including:

1.      Woodroffe (Park & Ride)

2.      River (Park & Ride)

3.      Spratt

4.      Leitrim (Park & Ride)

5.      Lester (Airport Shuttle Bus)

6.      Greenboro (at SE Transitway) (Park & Ride)

7.      Walkley

 

8.      Confederation

9.      Carleton University

10.  Carling

11.  Gladstone

12.  Bayview (W Transitway)

13.  LeBreton (W Transitway)

14.  Bay/Lyon at Albert

15.  Bay/Lyon at Slater

16.  Bank at Albert

17.  Bank at Slater

18.  O’Connor/Metcalfe at Albert

19.  O’Connor/Metcalfe at Slater

20.  Mackenzie King

21.  University of Ottawa

 

 

3.      Convenient Park-and-Ride/Kiss-and-Ride Facilities – In response to strong public demand, three new Park & Ride lots will be in operation with 1,400 new spaces on opening day and capacity for a future expansion to over 7,000 spaces, including a future lot at Bowesville. The three new Park and Ride locations are as follows:

                                 i.      Woodroffe Station - 825 spaces (275 initially, with future expansion potential of 550 more as demand warrants). This Park and Ride will provide direct LRT access for South Nepean residents as well as the ability to serve commuters from Manotick (7 minutes by car), Kars (12 minutes), North Gower (20 minutes), Kemptville and surrounding areas. The location of this site is afforded easy access from 2 major arterial roads - Woodroffe Avenue and Strandherd Drive.

                               ii.      River Road Station - 1000 spaces (333 initially, with future expansion potential of 667 more as demand warrants).  This Park and Ride will provide direct access for residents of the western portion of the Riverside South community as well as the ability to serve commuters traveling from the above noted areas south on River Road and Prince of Wales Drive. The location has easy access from Armstrong Road.

                              iii.      Leitrim Station - 1200 spaces (800 initially, with future expansion potential of 400 more as demand warrants). Located in the southeast quadrant of Leitrim Road and the LRT, this Park and Ride will provide direct access for the Leitrim and Riverside South communities as well as the ability to serve commuters traveling from the large rural commuter shed in the southeast area of Ottawa and beyond, such as Greely (12 minutes by car), Manotick Station (12 minutes), Osgoode (20 minutes) and North Dundas County (30 minutes). 

 

The Park and Ride locations will provide for passenger drop off (Kiss & Ride) opportunities as well as a direct interface and connection with existing bus services.

 

  1. State-of-the-Art Power System - The LRVs will operate over 27 km of electrified LRT track, complete with a 1500vDC traction power system, communications and train control systems and signals.  The tracks will be on-street in mixed traffic lanes between the University of Ottawa and Elgin Street to allow general (non-transit) traffic to cross the Mackenzie King Bridge and the LRT will be in a reserved transit lane between Bronson Avenue and Elgin Street, both important considerations for the downtown business community.

 

  1. Landscaping and Urban Design - Albert and Slater Streets will be completely re-constructed between Elgin Street and Bronson Avenue. The streets will be finished to a high quality of urban design in accordance with the Streetscape Design Guideline requirements for streetscape, paving and sidewalk finishes, lighting and street furniture and station platforms and shelters. There will be three LRT stations and four BRT stations on each street.  The construction of light rail is also an opportunity to upgrade and replace aging infrastructure.  Along Albert and Slater Streets, utilities will be relocated where necessary, aging watermains will be replaced and combined sewers will be separated.

 

  1. New Bridges and Infrastructure - The North-South LRT will cross the Rideau River on new bridges at two locations. Midway along the north-south portion of the line between Vincent Massey Park and the campus of Carleton University, the existing single-track rail bridge will be dismantled and replaced by a new two-track bridge on reconstructed piers. A new pedestrian/cycling path bridge will be constructed adjacent to this crossing to link the Carleton University campus to the pathways in Vincent Massey Park.  Seven additional bridges will be required at various points along the line, including Sawmill Creek, Hunt Club Road and Mosquito Creek.

 

  1. Connecting Communities - In the south, the LRT will cross the Rideau River a second time to connect the Barrhaven and Riverside South communities via the Strandherd-Armstrong LRT/road Bridge. This bridge will provide for a major new link in Ottawa’s transportation network with the future connection of Strandherd Road to Armstrong Road to form a continuous new East-West arterial road corridor for the City.

 

  1. Multi-use Pathways - At most suburban locations, the station will consist of a centre platform or two side platforms. In both cases, pedestrians will be able to cross the track at grade.  Each station will feature a unique landscaping theme (a particular shrub such as lilacs for example) that will assist in providing station identity. Bicycle parking will be provided at all stations outside of the downtown.  Also, bicycles will be permitted on the trains, and staircases will be designed to allow users to wheel bicycles alongside the steps.  Pathway connections will be provided to all stations. 

 

As adjacent properties develop to take advantage of the opportunities presented by LRT, the City will seek to complete a multi-use pathway adjacent to the LRT corridor.  The design of the system allows for the provision of the pathway as capital budgets permit.  The Siemens-PCL/Dufferin Team will construct a pedestrian bridge across the Rideau River connecting Carleton University to the Vincent Massey Pathway system.  This is a significant component that will help achieve a continuous multi-use pathway system.

 

A more detailed listing of the elements of the system can be found in Document 1.

 

One of the major benefits of a public-private partnership arrangement is the ability to negotiate directly with the Preferred Proponent before signing the final agreement. The City has actively engaged the Proponent in extensive discussions of value engineering improvements, and there were significant cost savings as a result.

 

To undertake the review task, the City established five City Negotiating Teams comprised of City staff, Project consultants, and staff of the Siemens – PCL/Dufferin Team. There was a Legal, Financial, Commercial Team; a Maintenance and Operations Team; an Electrical and Mechanical (E & M) Team (Vehicles, Signals, and Communications); a Civil/Structures Team (Downtown, Utilities, Stations, Landscape, Construction Management, Property, and Traffic approvals); and a Communications Team.

 

As a result of the review, some major value engineering elements were identified and are being proposed as part of the refinement of the Project. Specifically, they are:

 

 

 

·        Bronson to LeBreton Station. The road and transit network west of Bronson Avenue which was developed and approved as part of the EA process was relatively complex and consumed a considerable amount of space. Following a detailed value engineering review, it was determined that a simpler design that was more efficient, consumed less land and cost less was feasible. Some of the key features of the modified network are:

 

 

 

In total, the value engineering elements reduced the costs of the project by approximately $34 million with no effect on the scope or overall performance of the system.

 

Recommended enhancements to Council’s original Project scope

The recommended contract provides for two major additions to the original Council-approved scope for the North-South LRT project:

  1. The Extension of the LRT project to the University of Ottawa as part of the Base LRT Project (approved by Council for addition to the original scope in the 2006 Budget)
  2. The Extension of the LRT to Barrhaven Town Centre

 

1.   Extension of the Light Rail Transit Project to University of Ottawa as part of the Base LRT Project

The EA for the North-South LRT project originally contemplated the Rideau Centre at Mackenzie King Bridge as the terminal point for the LRT system.  Under this approach, the design requirements for crossover tracks at that location effectively restricted access to the Mackenzie King Bridge for transit use only. In response to the desire expressed by the business community to maintain general traffic lanes over the bridge, Council directed staff to move the location of the terminal station easterly onto University of Ottawa property, subject to successful discussions with the University.

 

A major benefit of this extension is to keep the bridge open to vehicular traffic and provide a direct LRT station on the University of Ottawa campus. This on-campus station also provides a stronger connection between major employment centres along the LRT corridor, notably Carleton University. Connecting the City’s two leading educational institutions (University of Ottawa and Carleton University) is important to both institutions and to the City as a whole, as it strengthens learning opportunities and options for students at both universities and offers more housing options for the students along the whole of the Light Rail line.

 

The property identified on the University of Ottawa campus for the extension of the LRT line is located east of Waller St., south of Stewart St., and west of Cumberland St.  Extensive discussions have been held with the University of Ottawa on how best to address the extension of the LRT Project at that location and these discussions have resulted in a Memorandum of Understanding between the University and the City. Effectively, the understanding is based on the need for the University to plan for its long-term growth and optimize the use of this very key University property while at the same time accommodating the LRT station.

 

As part of the LRT extension, the University intends to build a three-storey underground parking facility of approximately 390 spaces that would extend from Waller to Cumberland St. and extend halfway underneath Stewart St.  This parking will replace existing surface parking and provide parking for the University development at this location. The City would be provided a ground lease or license of occupation to extend the LRT system over the parking structure. The value of this lease or license would be related to the projected construction and operational cost of the parking structure and would result in an estimated cost of $520,000 annually for a period of twenty-five years, after which the value would be nominal. As part of this understanding, the City would retain the right to 150 parking spaces to support the future redevelopment of Arts Court.

 

The City would also recommend the closure of Stewart St. at Waller and would permit the University to develop over the closed portion to link with its existing property at 1 Stewart St. The University would have the ability to construct over the LRT system, either at the time of construction of the LRT or in the future. Any development would be in keeping with the Heritage District designation and existing structures would be protected accordingly.

 

The above Proposal is subject, of course, to public consultation and an addendum to the Environmental Assessment Report and all related approvals for construction.

 

2.   The Extension of North-South LRT to the Barrhaven Town Centre

In July 2005, Council approved the North-South LRT EA report covering the entire Project extending from Barrhaven Town Centre to Mackenzie King Station at the Rideau Centre, and recommended that the initial Project be implemented from Woodroffe Station to Mackenzie King Station. However, it is now recommended to add the short link between Woodroffe and Barrhaven Town Centre for the following reasons, to:

 

1.      Enhance ridership,

2.      Provide a catalyst for development,

3.      Improve transit network connectivity in the Barrhaven community, and

4.      Take advantage of cost savings through the current contract.

 

The approved EA route for the extension to Barrhaven is along the centre median of Chapman Mills Boulevard, from Woodroffe Avenue west to Barrhaven Town Centre, just east of Greenbank Road. Ultimately, there will be five stations located at Newland, Beatrice, Claridge, Longfields and Barrhaven Town Centre.

 

The City is now concluding two related studies for the Barrhaven Town Centre Community Design Plan and an EA Study for the extension of the Southwest Transitway from Strandherd Drive to and through the Barrhaven Town Centre. Together, these two studies and other supporting studies set out the planned development of Barrhaven Town Centre as a major urban node, to be served by two rapid transit lines. The LRT line and the Southwest Transitway will intersect at the heart of Barrhaven Town Centre.

 

The complementary Southwest Transitway Extension and the LRT are both needed to serve the growing community of Barrhaven. Portions of the Transitway Extension have been constructed (shoulder lanes on Woodroffe from Baseline to the Sportsplex; exclusive transitway lanes from the Sportsplex to Fallowfield; Fallowfield Park & Ride, and the soon to be constructed Strandherd Drive Park & Ride). Extending the Transitway from Fallowfield to the Town Centre will be required over time, with an estimated cost of $70 million. The early delivery of LRT service to the Barrhaven Town Centre as recommended, at a cost of $24 million, is very good value for money for this piece of the City's overall transit network. .

 

The BIA in the Barrhaven Town Centre has made strong representations to the City to include the extension in the current Project to support development of the town centre. The ridership forecast indicates that the extension would attract more transit riders as compared to the base Project terminating at Woodroffe, adding 2,800 customer-trips per day in 2011 and 6,400 in 2021.

 

Detailed operating simulations undertaken as part of the value engineering exercise have demonstrated that a single-track extension would provide reliable service at the 10-minute headways required to satisfy projected ridership for at least twenty years. This affords the opportunity for cost savings. In addition, building the extension now would allow the City to take advantage of pricing and construction efficiencies through inclusion in the current contract.

 

The extension will require one additional Light Rail Vehicle (LRV) in the North-South fleet to provide the additional service.  The costing for this extension was not part of the RFP and therefore was not included in the Proposals received. As part of the value engineering exercise, staff negotiated a price of $24 million for the construction of the extension, including stations at Beatrice and Barrhaven Town Centre and the provision of one additional LRV. 

 

If this work is completed as part of the North-South LRT project the City will realize a savings of about $9 million of the cost that would be incurred if the extension were completed as a separate project at a later time. The savings accrue from the fact that there is no need to undergo another procurement process, there is increased buying power when part of a larger project versus a small project, and construction and delivery is most cost effective when part of a single large project. If this contract were tendered separately and at a later time, it would also be subject to market fluctuations and escalation.

 

Should Council approve the recommended Barrhaven extension, the Project Definition would be amended to add:

  1. 2.2 km of track, 1.4 km of which is single track
  2. 2.2 km extension of the traction power, train control and signalling, and communications systems
  3. Stations at Barrhaven Town Centre and Beatrice
  4. One additional LRV to extend the 10-minute service from Woodroffe Station to Barrhaven Town Centre Station.

 

The City of Ottawa - Siemens-PCL/Dufferin North-South Light Rail Transit Contract Proposal

 

Negotiations have been completed with the Siemens-PCL/Dufferin Team on the design, construction, and maintenance of the Council-approved North-South LRT system.  The contract that has been negotiated has been unanimously approved by the Selection Panel and is now before Council for consideration and approval. It provides significant advantages for the City including:

 

 

The City achieved these outcomes while ensuring that the project cost was maintained within 2% of the Council-approved budget.  This is especially significant given that, unlike other major infrastructure projects in which cost overruns are not unusual, the unique P3 structure of the proposed contract ensures that major future financial risk is transferred to the contractor.

 

Contract Benefits – Risk Allocation

 

One of the primary benefits of the public-private partnership process that was used to develop the contract is that it allowed for the allocation of risk to the party best able to control, and therefore, price the risk appropriately.  This is a 'turnkey' contract where the contractor has to build and provide everything required to make the LRT system work (this includes absolutely everything from sewers, to tracks, bridges, signals, controls, passenger stations, electrical substations, trees, trains, etc) - in its simplest term, at the end of the construction, the contractor gives us the keys to operate the system while they will maintain the system for the City at a fixed price (subject to base CPI inflation adjustments and indexing as the City adds service hours ) for the 15-year term.

 

The major risks assigned to the Siemens-PCL/Dufferin Team are:

 

  1. Completing the Project within the agreed budget

§         The contractor is contractually bound to provide the contracted goods and services for a fixed price delivered on a fixed date - no matter what the price of construction materials (steel, copper, aluminum, gypsum, concrete), fuel and/or labour

§         Over the coming three years the contractor has to build the entire system for the fixed price quoted (there are only a few exceptions to this, for example, the potential for contaminated soils that were not identified in advance of the project, archaeological finds, force majeure)

  1. Integrating the Project components

§         During construction, the contractor has to coordinate all the work amongst their contractors, the vehicle supplier, track work, etc., i.e. they are responsible to 'integrate' all components of the project at their risk - this is a very significant risk transfer for the City as the interface between the track design and vehicle is very sensitive

  1. Completing the Project on schedule
  2. Meeting the Project specifications
  3. Geotechnical and environmental conditions within the corridor (as far as can be determined from the available data)
  4. Approvals and permits associated with the construction activities
  5. Maintaining the system for 15 years

§         The contractor must correct at their own cost any defects that appear over the 15-year maintenance period due to poor design or poor construction.  These are known as latent defects, or defects that show up over time.  This is a very important risk transfer as normally the best that a municipality can get from the industry in terms of protection of this kind is a two-year warranty; this effectively gives the City of Ottawa a 15-year warranty on the design and construction of the system.

  1. Vehicle and system performance
  2. Financial (other than base CPI inflation during the maintenance period)
  3. Consent for temporary use of land for construction

 

Under this arrangement the City’s major risks are:

 

  1. Regulatory approvals (EA and Federal railway)
  2. Land acquisition
  3. Any unknown geotechnical and environmental conditions
  4. Historical resources
  5. Delays created by City actions
  6. Contaminated soils
  7. City labour disputes
  8. Latent defects in existing City infrastructure
  9. Inflation on the maintenance costs

 

Several risks are of such a nature that they are shared, such as utility relocations, schedule risks in certain instances, and Force Majeure.

 

Contract Benefits – Security Bonding

 

The City also has significant protection during both the design-build phase and the maintenance phase of the Project in the form of performance bonds.  On-time completion is encouraged by means of $40,000 per day in liquidated damages.  In addition, penalties apply if vehicles are not available for service and/or they are not properly maintained.

 

The various elements of the Project are secured as follows:

Construction Period Surety

  1. $300 million Performance Bonds
  2. $300 million Labour and Material Payment Bonds
  3. Corporate Covenants of both PCL and Siemens.
    1. Construction of Fixed Facilities
    2. Vehicle Manufacture and Delivery

 

Maintenance Period Surety

1.      $16 million Letter of Credit (based on the actual maintenance costs)

2.      Corporate Covenant of Siemens

a.       Vehicle Maintenance

    1. Fixed Facility Maintenance

 

The provision of the security provides a further level of financial security and further lowers the associated level of financial risk for the City.

 

Contract Benefits - Independent Validation

Both the Federal and Provincial agencies contributing funding to the Project, require that an Independent Engineer (IE) be retained to review the Project to ensure that the LRT Project objectives as set out in the joint Canada-Ontario-Ottawa Contribution Agreement are met. The IE will report directly to the City and the Siemens-PCL/Dufferin Team, or any party identified by them to whom the IE owes a duty of care, including any other level of government.

 

The IE, jointly appointed by the City and the Siemens-PCL/Dufferin Team, will be selected to deliver key Project components as set out below:

 

1.      Due Diligence: Immediately upon appointment, the IE will;

a.       Review the plans and the overall Project Agreement objectives,

b.      Indicate the reasonableness of the LRT Project schedule, appropriateness of engineering and construction standards identified, achievability and reasonableness of milestone payments planned,

c.       Confirm that the Project can be delivered within the time and cost parameters of the Contract, and

d.      State recommended changes to the plans and seek approval by the City and the Siemens-PCL/Dufferin Team.

 

2.        On-going LRT Project Auditing:  During the design and construction stage, the IE will be required to implement and revise an auditing system that will include three major areas:

a.        Compliance auditing to ensure that technical requirements are achieved,

b.       Quality auditing to verify that the Preferred Proponent is implementing its quality assurance and control plan, and

c.        Payment certification to verify that milestones have been completed and payment to the Siemens-PCL/Dufferin Team is in accordance with the Project Agreement.

 

3.        Issue of Milestone Completion Certificates:  The IE must satisfy itself that all necessary inspections, investigations and calculations of the relevant part or parts of the LRT Project have been carried out.  This information will be relied upon by the City to make the corresponding milestone completion payments.  The milestone certificate and monthly reports must cover requirements of all the funding partners (Federal, Provincial and Municipal).

 

The IE assignment shall include monthly reports, record keeping, dispute resolution, regular meeting attendance and ad-hoc reviews. The cost associated with the services of the IE has been estimated at $7 million for the duration of the Project, which will be funded from the Project Management Office budget.

 

 

Fairness Commissioner

 

A Fairness Commissioner was retained at the very start of the procurement process and has been involved throughout this process.  Reports have been provided by the Fairness Commissioner for each major component of the procurement and posted on the City’s website.

 

Appended to this report is Document 6, confirming that the procurement process carried out to date has been fair, open and transparent.

 

Contract Benefits –Summary of how the City is protected

 

One prominent feature of the risk allocation system that was chosen is that that the majority of the financial risk associated with completing the project and maintaining it once complete is assigned to the contractor once the contract is undertaken.  Given the history of major LRT and BRT projects in North America, it was deemed highly desirable to move all possible risk of construction overruns on to the successful contractor. Council authorized the procurement process culminating in this report in order to achieve this protection against cost over runs or “budget creep.” This provides a sharply defined and predictable forecast of the City’s future financial position in relation to the project.

 

The City is protected, for a 15-year period, against latent defects and epidemic defects through provisions included in the contract. Under the maintenance agreement, the contractor is also responsible for any cost overruns associated with the maintenance and/or failure of the system or its components.  This also provides a high level of future cost certainty for the City.

 

The security bonding is adequate to protect the City, and the Independent Engineer will ensure that the LRT Project objectives as set out in the joint Canada-Ontario-Ottawa Contribution Agreement are met.

 

The City of Ottawa - Siemens-PCL/Dufferin North-South Light Rail Transit Project Contract – Other Opportunities

The opportunity to co-ordinate with other scheduled City projects

As part of the construction of the LRT, the City is taking the opportunity to coordinate implementation of several important infrastructure rehabilitation projects. These projects are not a part of the scope of the LRT Project. Rather, they are designed to address infrastructure needs that have already been identified by the City and that will need to take place in the near future whether the North-South LRT is built or not.  Including these works within the Siemens-PCL/Dufferin North-South LRT Project contract allows the work to be co-ordinated so as to minimize public inconvenience and construction times, reduce overall costs of the individual components and take advantage of the ability to integrate the project under one contract. The Siemens-PCL/Dufferin Team will deliver these complementary projects in an effort to integrate mobilization and construction within the North-South LRT corridor.  By doing the necessary work now, the City will also reduce the need to impact the LRT service in the coming years in order to undertake these rehabilitation projects. These complementary projects include:

1.      Watermain replacement along Albert and Slater

2.      Sewer relining along Albert and Slater

3.      Sewer separation near Bronson

 

The cost provided by the Siemens-PCL/Dufferin Team to complete this work is $13 million.

 

There are also other infrastructure projects that may be completed during North-South LRT construction with the same co-ordination and cost savings benefits.  These include:

1.      Bridge rehabilitation for several existing structures along the LRT corridor

2.      Upgrades to regulators on the combined sewer system in LeBreton Flats

3.      Watermain and sewer improvements along Albert Street (west of Bronson)

 

In addition, the City is building the high-pressure water transmission main from the Lemieux Water Treatment Plant to Bronson Avenue.  This Project is being delivered by the City but will require close co-ordination with the Siemens-PCL/Dufferin Team in order to minimize scheduling conflicts.


 

The opportunity to build the Strandherd-Armstrong Bridge

In the south, the LRT will connect Barrhaven and Riverside South communities via the Strandherd-Armstrong LRT/road Bridge. This is a major new link in Ottawa’s transportation network that will provide for the future connection of Strandherd Road to Armstrong Road. Rather than building only what is needed for the LRT, the proposal recommends that the full bridge be built now in order to take advantage of the co-ordination and cost-savings benefits outlined above. This will provide for a future continuous new East-West arterial road corridor for the City.

 

The bridge would carry four lanes of road traffic plus left turn lanes, bike lanes, a wide pedestrian walkway on the north side as well as space to accommodate two LRT tracks on the south side. Although only a single track is proposed to be built at this time, it is more prudent and cost-effective to provide for the future addition of a second track. The cost of the single track, traction power and related LRT systems are included in the LRT Project budget.

 

The Strandherd-Armstrong Bridge will be designed as a signature structure that reflects the natural, recreational and heritage aspects of a crossing of the Rideau Waterway, which is designated as a Canadian Heritage River and a National Historic Site, and has been nominated by Canada as a World Heritage Site. The bridge design will require Parks Canada and NCC approval. The design constraints include, but are not limited to, a clear span with no piers being permitted within the river and abutments that do not interrupt the existing shoreline.

 

The bridge is part of a major City initiative to reconstruct and widen Strandherd Drive from Fallowfield Road (near Hwy 416) to the Rideau River and Armstrong Road from the Rideau River to Limebank Road (with a future extension on Bank Street). The expansion of Strandherd Drive is essential for the efficient distribution of traffic to the various north south routes (Prince of Wales, Woodroffe, Greenbank) and to adequately serve the planned growth south of Strandherd Drive in Chapman Mills, South Nepean Town Centre, and Barrhaven South. The expansion of Armstrong Road is essential for the efficient distribution of traffic to the nearby north-south routes (River Road, Limebank) and to adequately serve the planned growth in Riverside South.

 

To ensure schedule and construction coordination with the LRT Project and to benefit from the construction and cost efficiencies of a large project, the bridge and related intersection widening at each end on Prince of Wales Drive and River Road have been included in the North-South LRT Project scope and construction contract. This work will be undertaken under the normal budget authority for these projects, separate from the LRT Project.

 

The cost for the roadway component of the bridge and the related intersection improvements is $35.4 million.

 

The opportunity to help Carleton University integrate campus development with the LRT station

Carleton University currently has plans to build a new multi-storey building for use as classrooms and laboratories. Following discussions with the City, the University agreed to locate the new building over the City’s LRT corridor and provide a fully integrated station within the building. The University, its students and employees will benefit from this proposal through a more efficient use of campus land, by providing direct access from the station to the campus underground pedestrian network, and by providing a better way to access campus by transit.

 

In addition, the building itself will bridge the campus across the LRT corridor and provide a strong marketing tool for the University.

 

From the City’s perspective this form of development is also highly desirable as it supports its vision of denser development at stations with the full integration of the station within the development and promotes increased transit ridership. Accordingly, a Memorandum of Understanding has been executed between the City and Carleton University to define the basis upon which this development could take place.

 

The City has committed to provide the necessary air rights to allow for the construction of the multi-storey building over the light rail corridor and station, for the provision of air rights over the corridor at the north end of the campus for the provision of future parking, and for the payment of $1.0 million.  In return, the University will integrate, at its cost, the light rail transit station within its building. It will also provide necessary easements for construction staging areas, the location of a transformer sub-station on campus and will make its internal road system available for the construction of the LRT Project.

 

The opportunity for Land Value Uplift

Experience in other cities and research has shown that the public investment in the LRT Project will increase property values along the LRT corridors, increase tax revenues and create jobs. The Urban Land Institute conservatively estimates a 10% to 20% premium in value due to the proximity of a location to light rail.  The timing and amount of development depends on:

1.      The maturity of the rapid transit system,

2.      The health of the local economy,

3.      The presence of under-utilized sites, and

4.      The use of public projects as a development catalyst.

 

In order to see how that might work in Ottawa for the North-South LRT Project, the City retained Corporate Research Group to undertake an independent, detailed review of the economic development potential along the LRT corridor, and to explore different options to ‘capture’ part of this benefit to assist with the Project funding.

 

The Corporate Research Group concluded that the construction of this LRT Project will, over time, attract at least $800 million worth of development that would otherwise not have accrued to this corridor (with a commensurate increase in property tax revenues that benefit all citizens of Ottawa). A portion of this uplift value will accrue directly to the City as the owner of some of the significant parcels of land that will experience increases in value. The Selection Panel has directed that no dollar amount be attributed to these uplift benefits either from direct revenue or from expected increase in property tax revenue. The City will enjoy significant revenues from land value uplift, but these revenues have not been used as offsets in the project budget because they cannot be immediately realized.

 

The City also undertook an assessment of the City sites located along the North-South LRT corridor to determine their potential for development. Five City sites along the corridor with significant potential are:

1.      Arts Court and the vacant parcel adjacent to it,

2.      The Bayview Yard and the Tom Brown Arena near Bayview Station,

3.      Property on both sides of Gladstone Station, including the Loretta Yard and Traffic Control Management Office,

4.      The Greenboro Park and Ride, and

5.      A large parcel adjacent to the Airport Parkway south of Hunt Club Road.

 

Unique opportunities exist in association with city-owned properties along the North-South LRT.  These could manifest themselves in three different ways:

 

§         The City could issue an RFP to market properties in compliance with a specific plan for the property that implements Council’s objectives.  This approach may be appropriate for the Bayview lands, for example. 

§         The City could enter into agreements with adjacent property owners to jointly construct some station amenity through a joint venture.  This may be especially appropriate where adjacent land is in private ownership but there would be mutual benefit in developing over the corridor.  This approach is being used at Carleton University. 

§         The City could establish a private-public partnership in order to assist in financing a public sector project.  This approach may be effective for Arts Court. 

 

The overall value of the five City-owned parcels, assuming redevelopment to compact, mixed-use developments, is at least $40 million, of which $20 million is value uplift.  This is detailed in the Property Value Uplift Report presented as Document 7.

 

Given the potential economic value of property value uplift, it is recommended staff establish a tool to track the increases in property value within 600 meters of a LRT station at the time of any amendments to the zoning by-law providing for increased development potential, and that staff report back to Council every two years on “value uplift”.

 

Moving forward with City Transportation priorities

The North-South LRT project has been identified by City Council as its priority transit project, but it is undertaken within the context of the City’s overall Transportation Master Plan. The following listing provides Council with highlights of the major parts of the TMP that have been built or that are currently being planned:

 

1.      City-wide

a.       East-West LRT (Orleans-Kanata)

 

2.      West

a.       Terry Fox Station and Park and Ride

b.      Eagleson Road Park and Ride Lot Expansion

c.       Terry Fox widening and extensions

d.      Castlefrank Road Interchange and Highway 417 Pedestrian Bridge

e.       West Transitway Extension from Bayshore to Pinecrest

 

3.      Southwest

a.       Southwest Transitway – shoulder bus lanes on Woodroffe (Baseline to Sportsplex) and exclusive transitway (Sportsplex to Fallowfield Park and Ride)

b.      Fallowfield Park and Ride

c.       Strandherd Park and Ride

d.      Woodroffe widening (Sportsplex to Fallowfield)

e.       Woodroffe widening (Stoneway to Prince of Wales)

f.        Strandherd Road Extension (Woodroffe to Prince of Wales)

g.       Strandherd Road Widening (Fallowfield to Woodroffe)

 

4.      East

a.       Trim Road Park and Ride Expansion

b.      Innes Road widening

c.       Highway 417/174 Improvements at the Split

 

5.      Southeast

a.       North-South LRT

b.      Riverside Drive (Hunt Club to Limebank)

c.       Limebank (Riverside to Earl Armstrong)

d.      Strandherd-Armstrong Bridge

e.       Armstrong Road

 

6.      Central

a.       Carling LRT

b.      Rideau/Montreal LRT

 

Staff had previously recommended to Council that any decisions regarding the $32.9 million Provincial Transportation Grant received from the 2006 Provincial Budget wait until the full cost of undertaking the LRT project was known at the end of the procurement process. The leveraging of taxpayers dollars has been successful to such an extent that most of this Provincial grant funding can be allotted to priority transportation projects in the west, east, south, and rural areas.  City staff have recommended that a portion of this money be allocated to the Barrhaven Town Centre Extension while the remainder be allocated to three other critical transportation infrastructure projects as follows:

 

  1. West Transitway from Bayshore Station to Pinecrest Road - Given the funds available from the Province, the timing is good to advance this project. The result will be improved transit services to West Ottawa residents, to the rapidly growing Stittsville and Kanata communities, and to high-density Foster Farm at Dumaurier.
  2. Remediation of traffic congestion at the Highway 417/174 split in the east end - In providing the transportation grant the Province indicated that part of the additional funding should be used to address public concerns over increasing delays to eastbound afternoon traffic traveling to the Orleans area using Highway 417 and Road 174.  The modifications will improve traffic flow, reduce congestion and improve traffic safety.
  3. Increasing the 2006 Rural Road Improvements budget to advance critical road resurfacing projects in the rural area.

 

Staff is recommending the full allocation of the Provincial Transportation Grant in this report so that these critical projects can begin without delay.  Information on any additional funding authority required for these projects can be found in the Financial Implications section of this report.

 

 

The City of Ottawa - Siemens-PCL/Dufferin North-South Light Rail Transit Project Contract –Related Issues

The construction phase of the project will involve a number of issues the contractor and the Light Rail Project Office will need to manage, specifically in the areas of utility relocation, rail deregulation, managing the impact of construction across the corridor and interruptions in the existing O-Train service.  

 

Utilities

Utility relocations are a significant scheduling and cost issue for the LRT Project. In addition to the non-regulated City services such as water, storm sewer and sanitary sewer, there are numerous regulated utilities affected by the Project at various locations. These include:

  1. Bell Canada,
  2. Enbridge Gas,
  3. Bell (GT) [formerly Group Telecom],
  4. Hydro One [formerly Ontario Hydro],
  5. Hydro Ottawa,
  6. Level (3) Communications,
  7. Rogers Cable,
  8. Rogers Telecom [formerly Sprint Canada],
  9. Telecom Ottawa,
  10. Telus Communications,
  11. Allstream Communications,
  12. Videotron Telecom, and
  13. Trans-Northern Pipelines.

 

The most significant relocation impacts are along Albert and Slater Streets involving Bell Canada and Hydro Ottawa, since both companies have major hub facilities located on Albert Street west of O’Connor and Slater Street east of Metcalfe respectively.  The relocation work may also impact north-south streets connecting to Albert and Slater Streets.

 

The Siemens-PCL/Dufferin Team will be responsible for the costs of non-regulated utility work (i.e. City water and sewers) within the downtown area. The City is responsible for all other utility costs along the route of the entire Project, based on the City’s agreements with the specific utility. The Siemens-PCL/Dufferin Team will be responsible for coordinating the work by all utilities, as well as for the coordination of utility relocation construction activities within the overall project schedule.

 

Discussions are underway with all of the regulated utilities to determine technical options to minimize relocations and the cost sharing between the City and the utility companies for the relocation of the utilities. Central to the discussion is the status of current Municipal Access Agreements with some of the utilities and the applicability of the Public Service Works on Highways Act (PSWHA). Funds in the amount of $40 million have been set aside within the LRT budget to cover the City’s share of the utility relocation costs under the PSWHA.

 

Rail Deregulation

The City’s current O-Train operates as Capital Railway, which is a federally regulated railway. The O-Train is a railway because it falls under the definition of a railway under the Canada Transportation Act.  This means that the O-Train operates under rules and regulations similar to those that govern the operation of a regional passenger or freight railway system.  It is federally regulated, rather than provincially regulated, because the O-Train drivers are Transit Services bus drivers, who are a federally regulated workforce from the perspective of labour relations.

 

The North-South LRT will be substantially different from the current O-Train.  The O-Train operates within a protected corridor and crosses two other federally regulated railways at grade. The North-South LRT will operate in a manner similar to a streetcar in mixed traffic flow on streets through the downtown and across portions of the future South Urban Community.  LRT operation in these instances will be in accordance with the rules of the Highway Traffic Act similar to bus operation.  LRT operation in the protected corridor will be fully grade separated either under of over all existing railways currently crossed at grade.

 

Given that the North-South LRT is a transit system not a railway, the City has applied for exemption from Federal rail legislation. Bill C-11, which is expected to be considered by Parliament within the year, includes a provision by which the Federal Minister of Transport may delegate to the City, by agreement, the authority to regulate the construction and operation of its LRT system.

 

An application has also been made for exemption from corresponding provincial rail legislation by means of an amendment proposed to the City of Ottawa Act to re-enforce the City’s authority to build, operate and regulate the new LRT system. The Province has confirmed that it will follow Bill C-11’s enactment with the appropriate amendment to the City of Ottawa Act. Following the approval of Bill C-11, Transport Canada will enter into an agreement with the City to delegate authority to regulate the LRT system.

 

Managing the impact of construction along the North-South Corridor

Following the approval of the contract award, the Siemens-PCL/Dufferin Team will immediately begin finalizing and implementing a long-term communications and public consultation strategy in consultation with the City. This comprehensive strategy will continue throughout the life of the contract and includes public consultations, traffic management strategies, media relations and a marketing campaign aimed at educating residents about the LRT Project. Throughout the Project, residents will be kept informed through regular media channels, the Project website, the City’s 311 call-centre, regular traffic and construction updates, direct consultations and paid advertising.

 

The communications and public consultation strategy will take a proactive approach to ensure the widest possible outreach for public input. Residents, businesses and elected officials will be consulted and kept informed on a variety of matters such as traffic management and urban and station design. This strategy is aimed at developing the North-South LRT as one of the most innovative, environmentally responsible and aesthetically pleasing transportation systems in the world. Along with consultations on such matters as traffic management, the Project also calls for a public art program with involvement from City Councillors and the arts community.

 

Following the construction period, the strategy will also prepare residents with information on how to access the system and events to mark the launch.

 


The communications and consultation plan will include recommendations for:

1.      Education

2.      Advertising

3.      Media relations

4.      Targeted community outreach and consultations

5.      Feedback and response mechanisms and standards

6.      Roles and responsibilities

7.      Timing

8.      Budgets

9.      Program evaluation

 

This comprehensive and substantial effort will succeed in educating residents about the North-South LRT Project while keeping all stakeholders informed.

 

The budget for communications is forecasted at $250,000 in 2006, $500,000 in 2007, $500,000 in 2008 and $750,000 in 2009. This will be funded as part of the Project Management budget during the life of the Project.

 

Interruptions to existing Light Rail Service -- O-Train Closure

In order for the construction of the North-South LRT project to proceed on time, it will be necessary to discontinue the existing O-Train service by the beginning of May 2007.  There are several critical construction activities that must begin in the Spring of 2007 in order to complete the new double tracking through the existing O-Train corridor. These key elements include but are not limited to the following:

 

 

 

In a number of locations throughout the O-Train right-of-way, existing bridges and tunnel structures must be modified to facilitate the double tracking or crossing activity. The work required to modify these existing structures will not permit continued O-Train operation.  It should be recognized that although the construction schedule is three years, the majority of the construction must take place in the first two years. Since much of this work is weather sensitive, it will take place during the summer months of 2007 and 2008. If it is not completed during this time, the work required for rail and power activities cannot be completed prior to the scheduled testing and commissioning dates. Due to the critical nature of this work, the construction schedule already anticipates the completion of minor amounts of preparatory work that can be safely performed before the termination of service at the end of April 2007. 

 

In the period of time between the closure of the O-Train and the opening of the new LRT, transit service will be provided by bus. A preliminary service plan has been developed to support the market the O-Train has built. The proposal is for a frequent bus service paralleling the O-Train line from South Keys to Bayview and terminating at Tunney’s Pasture. An on-board origin-destination survey was done in March 2006 to enable the proposed plan to be evaluated and fine-tuned.

 

Document 8 illustrates a possible routing and schedule for the replacement bus service. This initial plan will be revised as required based on public consultation, the results of the O-Train origin-destination survey, the construction requirements of the LRT Project, and the requirements of road construction projects in the area.

 

Sale of the Three Existing O-Train Vehicles

The current O-Train service uses three Bombardier Talent Diesel Multiple Units (DMUs). These trains were purchased in 2001 for $17 million and have a residual value of approximately $7 million.

 

With the advancement of the design and construction of the North-South LRT line, the existing rolling stock will shortly become available for other purposes.  As such, the consultant on the East-West LRT EA study was requested to investigate opportunities to use these Talent trains on the East-West LRT line as an initial operating scenario.

 

The existing Talent train fleet cannot provide enough service to cover a substantial portion of the East-West existing rail corridor at a frequency of service that passengers would find attractive.  Several operating scenarios were examined and the option that provided the most projected ridership is the 16 km section between March Road and the Colonnade Business Park.  Even so, the ridership forecast is still very low at about 1,750 trips per day by year 2021.  The limited number of trains available constrains the service that can be provided.  Ridership estimates are low due to the infrequent service, the widely spaced stations, and existing land uses along much of the rail corridor are not sufficiently dense or oriented towards the corridor to provide good early ridership.

 

It would be extremely inefficient and costly for the City to maintain two fleets of rail vehicles with such different characteristics as the DMUs and the electric light rail vehicles. It would be necessary to have two maintenance facilities and the two fleets could not be intermixed for operational flexibility because they require higher platforms and are wider than the electric light rail vehicles.

 

When the O-Train service ceases operation in May 2007, it is recommended that the trains be sold in order for the City to realize the asset value and to avoid incurring ongoing costs to store and maintain the vehicles in good condition. This would also allow the maintenance operation at Walkley Yard to be closed and for the City to terminate the lease on this property.

 

Maintenance Centre

 

The Maintenance Centre has been approved by Council to be located near Bowesville Rd. on property that the City will lease from the Airport Authority. The terms of the lease are described in a Memorandum of Understanding (MOU) executed between the City and the Airport Authority (Document 9). The Maintenance Centre will be the central maintenance facility for the North-South LRT system as well as future east-west corridors. The size and design of the facility will reflect this requirement for future growth, and in addition accommodate stabling capacity for the Light Rail Vehicles for the current project.

 

In discussing the requirements for the maintenance facility with the three proponents during the RFP process it became evident that the City had to give additional thoughts to all maintenance related elements of the project and notably those that required some initial capital investments. This included, of course, the maintenance facility itself but also all of the tools and specialized equipment to maintain the vehicles (i.e. bridge cranes, wheel lathe, painting booth and tools, bogie turntable, fork lift, telescopic lifter, etc.) and all of the equipment to maintain the LRT right of way (i.e. maintenance vehicles, snow removal equipment, special transport trailer, two-way conductor wire maintenance platform trailer, two-way rerailing rescue vehicle, etc.).

 

The proponents indicated that their maintenance costs would be high for these elements due to the much higher rate of returns that they would need to use to purchase these tools and equipment through their internal financing channels. As a result it was agreed to structure all of these maintenance elements under a lease-lease back provision where the City would guarantee a loan to a third party to be identified by the proponents and where the City would effectively lease the facility and equipment from the proponent for the 15 year term. At the end of the term, the facility will transfer to the City for a nominal amount.

 

The proposal received from the Siemens-PCL/Dufferin Team for the provision of the maintenance centre and all related specialized tools and maintenance vehicles, following the value engineering process, is $86.97 million. Accordingly the value of the annual lease for the 15 year period is $8.55 million, representing a Net Present Value of $70,564,960 for contract award purposes.

 

Conclusion and Next Steps

In conclusion, the Selection Panel believes Council can have full confidence that the procurement process it set out is delivering the best possible value for this project.

 

The Selection Panel has unanimously endorsed the recommendations contained in this report. All contract negotiations are completed and legal contractual agreements are ready for execution. The Siemens-PCL/Dufferin Team has indicated in writing that they are ready to execute these agreements immediately following contract award.

 

With the culmination of the procurement process, City Council has essentially three options before it:

  1. Approve the recommendations in the report;
  2. Delay approval of the contract;
  3. Do not approve the contract.

 

An outline of the impact of each of these options is provided for Council’s information:

 

Option 1 – City Council approves the Contract Award as recommended by Selection Panel

If Council makes the decision to proceed with this project based on the recommendations outlined above, staff will proceed immediately to execute the contracts and move forward with the construction of the project. The environmental, social and economic benefits that were the reason Council approved the North-South LRT as their priority project will be made possible, such as:

 

 

 

Option 2 – City Council chooses to delay the Contract Award

The extension of the conclusion of the financial project from mid-August 2006 to mid-January 2007 would have the following impacts:

 

The total cost of a six-month delay in approving the contract award is estimated to be between $65 million and $80 million.

 

Option 3 – City Council does not approve the Contract Award for this Project

Some of the key anticipated outcomes from a failure to develop the North-South LRT project are (beginning in 2011):

    1. River Road
    2. Limebank
    3. Hawthorne
    4. Airport Parkway
    5. Albion
    6. Bank
    7. Conroy
    8. potentially those on the Barrhaven side

 

If the City was to maintain the existing level of service, then the following roads will need to be widened in place of constructing the N-S LRT (although the construction of additional roads in place of transit is not in line with the 20/20 vision and the Official Plan)

§         Limebank – Riverside

§         Bank Street

§         Albion – Lester – Airport Parkway

§         (other combination of roads instead of the above would be possible)

 

ENVIRONMENTAL IMPLICATIONS

 

As described in this report.

 

RURAL IMPLICATIONS

 

As described in this report.

 

CONSULTATION

 

Throughout the development of the North-South LRT Project, the City has focused considerable efforts on consultations with the public. A list of those consultations is included in Document 10 attached to this report. These consultations were included and required by the EA, and they informed the development of the Project. As well, the Light Rail Office has focused on providing timely answers to correspondence and other communications received from residents and other interested parties. Our staff has and continues to meet regularly with stakeholders to ensure their concerns and questions about the Project are answered. 

 

In addition, consultations were held with specific stakeholder groups as follows:

 

Downtown Business Groups

Two concerns for downtown businesses that were identified were the short-term disruptions that result from the construction of the LRT line and the longer disruption that could result from the completed project.  Following consultations with this group, the contractor and the City have addressed these concerns by:

 

  1. Providing for value-added activities as part of the construction process including landscaping of stations on Albert and Slater and the development and implementation of a public art program.
  2. Minimizing disruption of traffic flow by outlining strict restrictions on the nature and length of road closures as follows:

 

The Siemens-PCL/Dufferin Team traffic management plan will address all elements, including:

 

  1. Intended hours of work;
  2. Maintenance of local traffic access;
  3. Maintenance of reserved transit lanes (6 am to 6 pm, Monday to Friday);
  4. Impacts on bus routes and bus stop areas;
  5. On-street parking and loading areas (including taxi zones, hotel loading areas and parking meters;
  6. Access for emergency vehicles;
  7. Planned lane interruptions, lane use and road closures;
  8. Impacts on traffic signals and signing and any necessary modifications.

 

In addition, the business community along Albert and Slater had concerns over the number of buses that were operating in this congested transit corridor. The City recognized that the current service design, with numerous express bus routes operating through downtown, while being a highly efficient way to deliver transit service, is unsustainable in the long-term.  The growing numbers of passengers at the downtown stops require a service approach that reduces waiting times at these stops and therefore minimizes the number of people waiting at any one time. Although a separate project, the new ‘hub and spoke’ service design, approved by City Council in November 2005 will reduce the bus congestion along Albert and Slater Streets. In addition, the extension to the University of Ottawa will allow for the continued use of general traffic lanes on the Mackenzie King bridge as identified earlier in the report.

 

The Development Community

At some specific stations outside of the downtown, development will be fully integrated with the station and preliminary discussions are being held to identify opportunities to add value.  For instance, the City is meeting with DCR Phoenix on the potential for development over and alongside the LRT Station at Bayview. 

 

As with the proposed station at Carleton University, the City will be looking to fully integrate the station with development. Similar discussions are underway with a landowner adjacent to the Walkley LRT Station.  The concept is for a mixed-use development with the LRT station fully integrated within the development.

 

Consultations on the Contract Award

Beginning on June 14 and continuing until Council’s final vote on this report, the public will have the opportunity to comment on the preliminary designs and the proposed contract with the Siemens/PCL-Dufferin Team through a series of six Open Houses to be held across the City. The Open Houses will highlight the route, design features, engineering features and general information about the benefits of light rail transit. The Open Houses have been advertised in local newspapers and radio and on the Ottawa.ca/lrt website. The display boards and other information available at the Open Houses will also be available online at Ottawa.ca/lrt.

 

FINANCIAL IMPLICATIONS

 

Contract Structure Benefits

When considering the financial implications of this report, Council will recall the unique nature of the design/build/maintain P3, which is different from the traditional procurement processes used for most infrastructure projects. The City has been able take advantage of some key contracting benefits offered by the design/build/maintain approach to maximize the level of financial certainty while minimizing associated project and financial risks.

 

Fixed Price Construction Contract

This recommended contract would deliver a turnkey light rail system at a fixed price and within a fixed and guaranteed time period. It represents a significant transfer of financial and systems integration risk away from the City and onto the contractor. Specifically, the contractor bears all risk associated with:

 

15-Year Maintenance Guarantee

In addition, this recommended P3 contract provides a fixed price for the provision of maintenance services and components over a 15-year period. This is essentially a full warranty on all civil, electrical and mechanical components of the system, including the vehicles – a significant improvement on the 2-year warranties that are industry standards for this type of procurement. This means that:

·        Should any element fail during the next 15 years the contractor will replace or repair that element within the agreed upon contract at no extra cost to the city.

·        The City will not experience increases in this cost due to labor cost escalation or hyperinflation in the cost of materials over and above a base CPI formula.

·        The contractor is responsible for all daily maintenance of the right-of-way and light rail vehicles associated with the operation of the system and for ensuring that a guaranteed number of vehicles are available for service every day for the duration of the 15-year contract period. 

·        The contractor covers the lifecycle maintenance of the entire system and the replacement of fixed assets such as computers, controls, and signals with a life expectancy of less than 15 years, including a final vehicle refurbishment prior to transfer at the end of the 15 year contract period. The amount for lifecycle maintenance embedded in the contract is estimated at between $25 million and $30 million, and represents funding that otherwise would need to be budgeted directly by the City over the next 15 years to cover these costs.

 

Capital and Operating Cost Components and Related Funding Recommendations

 

The project budget reflects the fact that, as a design/build/maintain P3 project, there are both capital and ongoing operating costs that must be included.  The long term cost certainty associated with this project enhances the City’s ability to predict and plan future transit operating costs and capital expenditures over the 15-year horizon.  This report section identifies and summarizes all of the capital and operating costs that the City will incur with the construction and operation of the North South LRT line.

 

Capital Components

There are five capital components related to this contract award. They are:

 

  1. Base LRT Project
  2. Project Management Office
  3. Barrhaven Town Centre Extension
  4. Other Provincial Transportation Infrastructure Grant Projects
    1. West Transitway
    2. Highway 417/174 Split modifications
    3. Rural Road Improvements
  5. Complementary Projects

Integrated Road, Sewer and Water Program

    1. Strandherd-Armstrong Bridge
    2. Strandherd Drive and approaches
    3. Armstrong Road and approaches

 

Each component is presented separately to provide maximum clarity.

 

1. Base LRT Project

 

The City approved a base budget for the North-South LRT project in the 2006 budget of $729.7 million.  This included:

 

The project is structured to exclude some costs from the contractor responsibility and therefore the contract with Siemens-PCL/Dufferin. Specifically, $90 million of the budget authority relates to property acquisition costs, utility relocation costs and risk management. Removing this amount from the base LRT project budget leaves $639.7 million for the scope of work to be undertaken by Siemens-PCL/Dufferin in constructing the base LRT project.

 

Following intensive contract and value engineering negotiations a final contract amount of $654.2 million has been achieved with Siemens-PCL/Dufferin for the construction of the base LRT project. This results in a Base LRT Project budget authority requirement that is $14.5 million or under 2% higher than the authority approved by Council in the 2006 Capital Budget.

 

The increase in construction prices since the original estimates were prepared greatly exceeds this difference. Document 11 details the inflationary pressures currently existing within the construction industry.

 

The following Table 1 identifies the funding authority by source approved by Council in the 2006 Capital budget for $729.7 million as well as the staff recommendation for funding authority by source for the additional requirement of $14.5 million.

Table 1 - Existing and Additional Required Authority By Source for the Base LRT Project

 

Existing Base LRT Project Authority

($ millions)

Federal/Provincial Grants

400.0

Development Charges/ Development Charge Debt

117.4

Provincial Gas Tax

21.8

Debt Supported by Provincial Gas Tax

195.5

Total

729.7

Additional Required Authority

 

Transit Reserve

4.9

Sale of Talent Trains

7.0

Development Charges

2.6

Total Additional Required Authority

14.5

 

As the main transit project serving Ottawa’s Official Plan’s southern growth area, the North-South LRT project is entitled to development charges from future growth, and so can be funded from the Transitway and Transit Services Development Charge accounts.  In addition the Talent Trains that service the existing O-Train will be replaced as part of this project, and their sale can also be used to help fund the additional required authority.  As indicated in Table 1, the remaining difference can be funded from the Transit Reserve. 

 

The funding strategy for the base LRT project was first approved by City Council as part of the City’s Long-Range Financial Plan 2 (LRFP2). Because federal and provincial gas tax revenues must be used for transit initiatives, Council directed that these funds be dedicated to a financing package that would allow the City to proceed with rapid transit investment and other eligible growth-related projects by debt financing some eligible projects, and using the future stream of gas tax payments to pay the debt charges and retire the debt for those projects. The principal and interest payments for the gas tax supported debt are well within the amount of Provincial gas tax revenue the City will receive every year, and the City will continue to remain well below our debt capacity limit as set by the Ministry of Finance.

 

2. Project Management Office

In order to ensure the success of this project, Council determined it was important to provide sufficient internal and external project management resources.  As identified in this report, the City costs associated with managing the LRT project have been funded from a capital project separate from the overall LRT Project.  As part of the 2006 Budget, $5 million was allocated to the Project Management Office project. 

 

Because of the very significant due diligence, legal and professional services required to manage the commencement of this partnership in 2006, an additional $10 million will be needed for the Project Management Office to ensure the success of the partnership on an ongoing basis.  This includes $7 million for the independent engineer services, required by the federal and provincial governments, over the life of the project as detailed in the report.  Table 2 below identifies the existing authority funding and the proposed source of funds for the additional authority required.

 

Table 2 - Existing and Additional Required Authority By Source for the Project Management Office

 

 

Existing  Authority

Additional Required Authority in 2006

Total funding Authority

($ millions)

Gas Tax

1.7

 

1.7

Tax Supported Debt

3.3

 

3.3

Transit Reserve

 

10.0

10.0

TOTAL

5.0

10.0

15.0

 

For the duration of the construction and immediate post-construction period (from 2007-2010), it is estimated that the Project Management Office account will need to have funding in the range of $6 million per year.  It is recommended that the estimated $6 million required to run the Project Office be included as part of the normal budget process in each year of the construction period (2007-2010).

3. Barrhaven Town Centre Extension

 

As discussed in the report, the Base North-South LRT is proposed to be enhanced to provide significant extra value by extending the system to the Barrhaven Town Centre.  This extension was originally forecast to receive budget approval in 2009 as indicated in the 10 Year Capital Forecast. 

 

The Barrhaven extension was included as part of the negotiations with Siemens-PCL/Dufferin in order to take advantage of the economies of scale that can be achieved by including the Barrhaven extension in the base project rather building it independently in 2009. The negotiated cost for this extension option is $24 million, including the provision of one additional light rail vehicle (representing an estimated savings of $9 million).

 

The extension to Barrhaven is also eligible for transit-related development charge funding.  The remaining portion of the cost of the extension can be funded from a portion of the Transportation Infrastructure Grant that the City has received from the Province and from Transit Reserves.  The cost of adding the Barrhaven extension to the scope of the Base LRT project and its proposed funding is summarized in Table 3 below.

 

Table 3 - Required Authority for the Extension to the Barrhaven Town Centre

 

 

 Required Authority ($ millions)

Development Charges

3.5

 

Provincial Transportation Infrastructure Grant

12.4

 

Transit Reserve

8.1

 

TOTAL

24.0

 

 

In total, the cost of the North-South LRT line, including the extension to Barrhaven Town Centre (components 1, 2 and 3 above) is proposed to be built with over 95% of the funding coming from federal and provincial government one-time contributions, provincial gas tax revenues that must go towards transit growth, development charges and sources other than tax supported reserve funds.

 

4. Additional Transportation Infrastructure Grant Projects

 

The City received an unconditional grant of $32.9 million from the Province of Ontario in March 2006 for transportation infrastructure.  The report recommends the following disposition for these Provincial transportation funds in order that additional transportation and transit priority projects may be commenced: 

 

§         Barrhaven Town Centre Extension  - $12.4 million (as indicated in the section above)

§         West Transitway from Bayshore Station to Pinecrest Road- $15.5 million

§         Remediation of traffic congestion at the Highway 417/174 split in the east end - $3 million

§         Rural road network improvements - $2 million

 

Table 4 below identifies the total cost of these projects, existing funding authority approved by Council, the recommended allocation of the provincial transportation infrastructure grant and the recommended source of any additional funding authority required.

 

Table 4 - Existing and Additional Required Authority By Source for Other Priority Transportation and Transit Projects

 

 

Project Requirement

Approved Budget

Additional Authority Required

Funding Source for Additional Authority

Provincial Grant

Development Charges

Transit Reserve

($ millions)

($ millions)

West Transitway

29.1

1.1

28

15.5

4.2

8.3

417/174 Split

Network Modifications

5.2

0.20

5.0

3.0

2.0

 

Rural Road Reconstruction/ Rehabilitation

2.0

0

2.0

2.0

 

 

TOTAL

36.3

1.3

35.0

20.5

6.2

8.3

 

 

5. Complementary Projects

 

The City has approved $39.8 million in the 2005 and 2006 capital budgets for a number of water, sewer, road and bridge projects that should, on the basis of cost efficiencies of scale and mobilization, be constructed at the same time as the North-South LRT project as follows,

 

  1. Integrated Road, Sewer and Water Program ($13.1 million)
    1. Albert/Slater Street
    2. Booth Street /Transitway
    3. Albert Street (Empress-Booth)

 

  1. Roads and Structures Growth Projects ($26.7 million)
    1. Strandherd-Armstrong Bridge
    2. Strandherd Drive and Approaches
    3. Armstrong Road and Approaches

 

These projects are already scheduled for construction within a 3-5 year time horizon, and will need to be undertaken whether or not there is a Light Rail project. However, they can all be built less expensively if undertaken in concert with the LRT construction. As well, coordinating the Project work with other already scheduled City projects minimizes public inconvenience and construction times.  By including these projects within the scope of the work to be undertaken by Siemens-PCL/Dufferin, the City is following its normal practice of coordinating capital works in order to save time and money.

 

An additional $14.1 million increase in funding authority will be required because we are recommending the Strandherd-Armstrong Bridge and approaches be brought forward to 2006.  While additional authority had already been planned for these projects in 2007, this authority will need to be advanced in order to take advantage of the opportunity to include this work in the Siemens-PCL/Dufferin contract.  This additional authority is eligible for development charge funding.  Table 5 below, identifies existing authority funding and the proposed additional authority funding.

Table 5 - - Existing and Additional Required Authority By Source for Complementary Projects

 

Existing Complimentary Project Authority

($ millions)

Water Reserve

5.0

Sewer Reserve

8.1

Development Charges

25.1

Tax Supported Debt

1.6

Total

39.8

Additional Required Authority

 

Development Charges

13.4

City-Wide Reserve

0.7

Total Additional Required Authority

14.1

 

 

OPERATING COMPONENTS

 

1. Capital and Property Leases

 

Within this report the requirement for capital and property leases has also been identified.  The Maintenance Centre, including all tools, equipment and vehicles, has been structured as a lease-leaseback. The lease period starts in late 2009 and the cost of the lease payment is fixed for the full 15 years, based on when the City decides to lock in the interest rate during the construction period.  The costs included in this summary are based on pricing as of May 2, 2006.

 

The lease-leaseback was selected as the preferred funding model for the Maintenance Centre as it aligns with the design/build/maintain model being used for the remainder of the project.  As Siemens-PCL/Dufferin will be responsible for all aspects of maintenance for the 15-year period, through the leasing they also become responsible for the maintenance centre and the equipment, vehicles and tools used in the Centre.  Any life-cycle costs, technology upgrades, or remediation of any design or construction flaws at the Maintenance Centre becomes the responsibility of Siemens-PCL/Dufferin to fund.  The City avoids having to budget for these types of expenditures over the 15-year period.

 

As the Maintenance Centre will ultimately also service LRT cars for the east-west phase, using the lease method to fund the project eliminates the need to advance a portion of the capital funding from the East-West LRT. 

 

The financial terms of the lease-leaseback have been assessed and represent value against internal financing methods.

 

The report also identifies that the City will have to lease property from the Airport Authority for the Bowesville site for the Maintenance Centre.  The cost of the property rental will only begin in 2011 as the City has an existing MOU with the Airport Authority for the site.  In addition the Terminal Station at the University of Ottawa site requires a lease of property, which will commence in 2009.

 

Table 6 below includes the incremental funding requirement for these lease payments along with all other projected operating budget impacts related to the commissioning and operation of the LRT project.

 

2. North South LRT Operating Costs

 

When the existing O-Train is discontinued, there will be savings of approximately $5 million per year in operating costs.  In the period from May 2007 to December 2009, these savings will be offset by the cost of approximately $3 million per year for the replacement bus service.

 

Once the new light rail system opens in December 2009, it will be possible to restructure bus services in the area served by the light rail system and save approximately $9.5 million in annual bus operating costs.

 

There are ramp-up costs associated with the new light rail system as staff are hired and trained, and the operating plan is developed in detail.  These amount to $0.8 million in 2008 and $2.4 million in 2009.

 

The first full year of light rail operation will be in 2010.  The total net annual operating costs are estimated to be $11.2 million including $1 million for the Barrhaven extension.  These costs cover:

 

The incremental and one-time operating budget requirements related to the commissioning and operation of the LRT system are summarized in Table 6 below.


Table 6 – Incremental and One-Time Operating Budget Requirements Related to the Commissioning and Operation of the North-South LRT Project

 

Operating Budget Impacts

2007

2008

2009

2010

O-Train discontinuation net savings

(1.1)

(1.9)

(1.9)

(5.1)

LRT-related reduction in buses

0.0

0.0

0.0

(9.5)

One-time start up costs in Transit

 

0.8

2.4

0.0

Siemens-PCL/Dufferin Maintenance Contract

 

 

1.1

13.0

OC Transpo – drivers, supervisors, other staff

 

 

0.5

6.1

OC Transpo  - materials, purchased services

 

 

0.5

6.1

Operating Costs for Barrhaven Extension

 

 

0.1

1.0

New Revenues (fares and other)

 

 

(0.4)

(5.0)

Contribution to Reserve

1.1

1.1

 

 

Maintenance Centre and Equipment Lease

 

 

2.2

8.6

University of Ottawa Property Lease

 

 

0.2

0.6

Airport Authority Property Lease

 

 

0

0.1

Total Impact on Operating Budget

0

0

4.7

15.9

Less previous years increases

 

 

 

(4.7)

Incremental Operating Budget Requirement

0

0

4.7

11.2

One- time start-up costs as per Siemens-PCL/Dufferin Contract

 

 

13.5

 

Transfer from Reserve

 

 

(2.2)

 

Net one-time operating pressure

 

 

11.3

 

 

The one-time start-up costs for Siemens-PCL/Dufferin in 2009 is primarily for hiring and training of the staff that will provide the maintenance as well as the training of all City staff who will be operating the service (supervisors, service controllers and light rail operators).  In total, Siemens-PCL/Dufferin will hire 56 staff for this contract.  The savings in 2007 and 2008 will be contributed to the Transit Reserve to reduce the one-time requirement in 2009 to $11.3 million.  As per City practice, the remaining one-time operating costs of $11.3 million required in 2009 will be identified in the 2009 budget and funded as a one-time item from the Transit Reserve.  All other net operating costs will be funded from the tax base, as is typical of all capital projects at the City.

 


SUPPORTING DOCUMENTATION

 

Document 1      Project Definition

 

Document 2      Memorandum of Understanding between the City of Ottawa and the University of Ottawa

 

Document 3      Memorandum of Understanding between the City of Ottawa and Carleton University

 

Document 4       Memorandum of Understanding between the Government of Canada, the Province of Ontario and the City of Ottawa

 

Document 5      Chronology of Approvals for the N-S LRT Project

 

Document 6      Fairness Commissioner’s Letter regarding the North-South LRT Project

 

Document 7      Background Report on North-South Light Rail Corridor Property Value Uplift

 

Document 8      Replacement Bus Service for O-Train

 

Document 9      Memorandum of Understanding between the City of Ottawa and the Airport Authority

 

Document 10    Public Consultation Process

 

Document 11    Inflationary Pressures currently existing within the Construction Industry

 

DISPOSITION

 

The City Manager, Deputy City Manager of DPWS, Economic Development and Strategic Projects, Transit Services, City Treasurer and Legal Services will negotiate, finalize, approve and execute all documents, and implement all works, in accordance with report recommendations.

 

 


Project Definition                                                                                        DOCUMENT 1

 

 

In 2011, within two years of opening, a projected ridership of over 40,700 people per weekday will use the North-South Light Rail Transit line, consisting of electrically powered Light Rail Transit service running from the University of Ottawa to Woodroffe Station.

 

The key features of the Project include;

 

·        Passengers will be served by a fleet of 21 Siemens S70 Light Rail Vehicles (LRV) operating at 10-minute intervals between Woodroffe and Leitrim and at 5-minute intervals between Leitrim and University of Ottawa;

·        The S70 LRVs feature low floor design with 4 wide doors on each side to provide easy and accessible boarding at station platforms. Each vehicle has capacity for over 200 passengers, 4 accessible spaces, and space for bikes. Driver cabs at both ends allow the vehicles to be operated in both directions. They can be coupled to form multiple units for added capacity as demand increases;

·        Passengers will access the LRT at twenty-one different station locations at:

§         Woodroffe (Park & Ride)

§         River (Park & Ride)

§         Spratt

§         Leitrim (Park & Ride)

§         Lester (shuttle bus to Airport )

§         Greenboro (SE Transitway) (Park & Ride)

§         Walkley

§         Confederation

§         Carleton University

§         Carling

§         Gladstone

§         Bayview (W Transitway)

§         LeBreton (W Transitway)

§         Bay/Lyon at Albert

§         Bay/Lyon at Slater

§         Bank at Albert

§         Bank at Slater

§         O’Connor/Metcalfe at Albert

§         O’Connor/Metcalfe at Slater

§         Mackenzie King

§         University of Ottawa

 

·        Three new Park & Ride lots will be in operation at Leitrim, River Road and Woodroffe stations with 1,400 new spaces on opening day, and capability for future expansion to over 7,000 spaces, including a future lot at Bowesville;

·        The LRVs will operate over 27 km of electrified LRT track, complete with a 1500vDC traction power system, communications and train control systems and signals.

·        The tracks will be on-street in mixed traffic lanes from Elgin Street to Waller Street crossing the Mackenzie King bridge to allow general (non-transit) traffic to cross the bridge;

·        Along Albert Street westbound and Slater Street eastbound. between Elgin Street and  Bronson Avenue, the tracks will be placed in the existing reserved transit lanes that will continue to be used by a reduced number of buses crossing through Downtown;

·        The LRVs and buses will operate under traffic signal control through the Downtown area;

·        Albert and Slater Streets will be completely re-constructed between Elgin Street and Bronson Avenue. The streets will be finished to a high quality of urban design in accordance with the Streetscape Design Guideline requirements for streetscape, paving and sidewalk finishes, lighting and street furniture and station platforms and shelters. There will be three LRT stations and four BRT stations on each street;

·        From Bronson west, the tracks will follow a new combined LRT and Transitway alignment down the escarpment, through LeBreton Flats and continuing toward Bayview Station;

·        The LeBreton Station will be integrated with the new bridge carrying Booth Street over the station. The station design will be subject to NCC approval to ensure that it is consistent with and supportive of the redevelopment of LeBreton Flats. The station will be served by the LRT, the Transitway and by buses on Booth Street connecting to the Outaouais;

·        Two tracks will be constructed along the existing rail corridor from Bayview Station to south of Leitrim Station, and continuing to the Bowesville Maintenance Centre. This will allow for the planned 5-minute service between Leitrim Station and downtown;

·        The existing single track tunnel under the Rideau Canal just west of Dow’s Lake will be twinned;

·        The rock cut north of the tunnel will be widened to accommodate two tracks;

·        The North-South LRT will cross the Rideau River at two locations. Midway along the north-south portion of the line between Vincent Massey Park and the campus of Carleton University, the existing single track rail bridge will be dismantled and replaced by a new two-track LRT bridge on reconstructed piers. A new pedestrian/cycling path bridge will be constructed adjacent to this crossing to link the Carleton University campus to the pathways in Vincent Massey Park;

·        In the south, the second LRT crossing will connect Barrhaven and Riverside South communities via the Strandherd-Armstrong Bridge that will be used by the LRT and road traffic. This is a major new link in Ottawa’s transportation network that will connect Strandherd Road to Armstrong Road to form a continuous new East-West arterial road corridor for the City;

·        New bridges will carry the tracks under the VIA passenger rail corridor and South-East Transitway south of Heron Road and over the existing Ottawa Central Railway south of Walkley Road;

·        Seven additional bridges will be required at various points along the line, including Mosquito Creek, Hunt Club Road, Walkley Road, Sawmill Creek, and Heron Road;

·        The Bowesville Maintenance Centre, located south of Leitrim Road  and east of Bowesville Road, includes a fully equipped maintenance building to provide all scheduled preventive maintenance and corrective maintenance and repairs for a future city-wide fleet of up to 105 LRVs. Facilities for stabling, daily cleaning and minor maintenance for the initial 21 LRVs, expandable to accommodate up to 50 North-South LRVs, as well as an operations facility will also be part of the Maintenance Centre;

·        West of the Bowesville Maintenance Centre, a single track with double track sections at strategic locations will allow northbound and southbound trains to pass each other and maintain the 10-minute scheduled service south of Leitrim station;

·        The 1500 v DC electrical traction power supply infrastructure will consist of overhead wires supported by poles, fed by 8 electrical sub-stations located at strategic points along the line;

·        Several existing underground utilities will be relocated, and some existing water mains and sewers will be rehabilitated or replaced where warranted; and

·        A LRT Control Centre will be integrated with the central Ottawa Transit control centre.


MEMORANDUM OF UNDERTANDING BETWEEN                                      DOCUMENT 2

the city of ottawa and the University of ottawa

 

 


 

 


 

 


 

 



MEMORANDUM OF UNDERSTANDING BETWEEN                                    DOCUMENT 3

THE CITY OF OTTAWA AND CARLETON UNIVERSITY

 

 


 

 



Memorandum of Understanding between The                           DOCUMENT 4

Government of Canada, THE Province of Ontario

and the city of ottawa

 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 

 


 

 

 


 

 

 


 

 


 


CHRONOLOGY OF APPROVALS FOR THE N-S LRT PROJECT                  DOCUMENT 5

 

 

Report

Committee/Council Approval

 

(RTES) Rapid Transit Expansion Study: Recommendations: Approved

(ACS2003-DEV-POL-0010)

-         30% transit modal split target

-         comparisons of BRT and LRT technologies

-         development and recommendation of the rapid transit network component of the overall transportation (complementary BRT and LRT network)

-         technology identified for each corridor

-         North-South LRT identified as a first priority project

 

 

TRC:      19 Feb 2003

Council: 26 Feb 2003

 

(TMP) Transportation Master Plan:  Recommendations: Approved

(ACS2003-DEV-POL-0033)

-         goals, policies, identification of projects (roads and transit) and phasing

-         included the work of RTES and ORTEP

-         N-S LRT identified as a Phase 1 project

 

 

TRC:      16 July 2003

Council: 3 Sept 2003 (deferred)

               10 Sept 2003

 

 

(ORTEP) Ottawa Rapid Transit Expansion Program – Implementation Strategy:  Received

(ACS2003-DEV-POL-0036)

-         follow-up work to RTES, to develop the implementation strategy for the recommended transit network

-         costing, scheduling, and prioritizing of the corridors identified in RTES

-         confirmed the North-South LRT (Rideau Centre to Limebank) as a priority project

 

 

TRC:      16 July 2003

Council: 24 Sept 2003

 

N-S LRT Corridor EA Study:  Statement of Work:  Approved

(ACS2004-DEV-POL-0006)

-         general outline of the intended work to be undertaken prior to issuance of the proposal call to consultants

-         general description of the project (limits, LRT technology)

 

 

TRC:       21 Jan 2004

Council:  N/A

 

N-S LRT Corridor EA Study:  Terms of Reference:  Approved

(ACS2004-DEV-POL-0033)

-         approval of the Study’s Terms of Reference (prior to submission to the Ministry of the Environment)

-         general description of the project, and approach to complete the study including consultation program

-         MOE approval of the ToR: 15 Sept 2004

 

 

TRC:      16 June 2004

Council: 23 June 2004

 


 

 

Implementation of N-S LRT Project: Approved

(ACS2005-DEV-BUS-0007)

-         approval to proceed with project per framework established in the report

-         initiation of  PPP procurement process

-         staff to report back on the results of the RFQ in summer 2005 and reccs for a RFP

 

 

CSEDC: 1 March 2005

Council: 9 March 2005

 

 

 

N-S LRT Project Results of Requests for Qualifications: Approved

(ACS2005-PGM-ECO-0016)

-         that RFQ respondents by accepted as qualified to participate in the RFP

-         approval of RFP framework

-         subject to Council approval of EA, staff to proceed to issue RFP

 

 

CSEDC:  5 July 2005

Council:  13 July 2005


 

N-S LRT Corridor EA Study:  Recommendations:  Approved (with Motions ß primarily to expand the scope of the project)

(ACS2005-PGM-POL-0048)

-         approval of the EA Recommendations prior to submission to the MOE for approval

-         description of the full build-out project

-         description of the Phase 1 construction project (a subset of the full build-out project)

-         approval to initiate the property acquisition process

 

TRC:       6 July 2005

Council: 13 July 2005

 

N-S LRT Procurement Management Process: Received

-         City staff directed to bring forward to CSEDC and Council all LRT project communications plans and related budgets for approval.

 

 

Council:  22 Feb2006


 

 

N-S LRT Property Acquisition – Rideau Centre to Woodroffe Ave. : Approved

(ACS2006-CRS-RPM-0017)

(ACS2006-CRS-RPM-0020)

-         lands owned by:

o       Wilfred and Iva Carson

o       Gary and Sharon Jasper

 

 

CSEDC:  21 Feb 2006

Council:  22 Feb 2006

 

N-S LRT Approval to Expropriate Lands – Rideau Centre to Woodroffe Ave.: Approved

(ACS2006-CRS-RPM-0005)

-         lands owned by Zora Kustec, Tomic Jurinic and Olga Volk

 

 

CSEDC:  21 Feb 2006

Council:  22 Feb 2006

 

NS-LRT Procurement Management Process: Received

NS-LRT Procurement Management Process: Approved

-         upon award of contract all info on the selected proposal be released to the public

-         prior to staff’s recommendation report to Cttee and Council on the selection of a preferred partner, Councillors to be provided with a full briefing.

 

 

Council:  22 Feb 2006 (deferred)

Council:  8 March 2006

 

N-S LRT Corridor Project:  Selection of Site for Maintenance & Storage Facility:  Approved

(ACS2006-PGM-ECO-0012)

-         selection of the Bowesville site, following community consultation

 

 

Joint CSEDC and TRC: 16 May 2006

Council: 24 May 2006


 

Key dates of the RFP Process

 

 

 

Action

Date

 

 

RFP Issued

03 Aug 2005

Final RFP Specifications Issued

23 Sept 2005

Scope Confirmation Submission

03 Nov 2005

Submission of Special Purpose Corporation (SPC) Structure Details

08 Dec 2005

Technical Submission

16 Feb 2006

Financial Offer Submission

03 Mar 2006

Submission of Surety (agreement to provide bonding and insurance)

07 Mar 2006

 

 

 

 

Schedule for Proposal Evaluation and Negotiation

 

 

Action

Date

 

 

Review of Technical Submissions, Check for Completeness and Mandatory Submission Materials

16 Feb 2006

Start of Technical Review Process

20 Feb 2006

Confirmation by the Selection Panel of Technical Compliance

20 Mar 2006

Selection by the Selection Panel of the Preferred Proponent

07 Apr 2006

Start of Negotiations with the Siemens-PCL/Dufferin Team

11 Apr 2006

Tabling of Report to Council

14 Jun 2006

 

 

 

 

 


FAIRNESS COMMISSIONER’S LETTER                                                          DOCUMENT 6

REGARDING THE NORTH-SOUTH LRT PROJECT

 

 

 

 


 

 



BaCkground report on North-South Light Rail                       DOCUMENT 7

Corridor Property Value Uplift

 

 

BACKGROUND

 

This report examines the property “value uplift” around light rail stations and investigates means for the City to share in the benefit.  The N-S Light Rail Project represents a significant public investment to allow the City to remain competitive both nationally and internationally.  It also contributes to the City’s ability to achieve its smart growth objectives:  30% modal split in favour of public transit, and intensification of land uses within the existing urban boundary.

 

The construction of the North-South Light Rail will attract at least $800 million worth of development that would otherwise not have accrued to this corridor. Many property owners and investors will benefit simply by owning property close to light rail stations.  While few tools exist to allow the City to capture some of this increased value, the City itself is one of the key landowners and will benefit as an owner.  It is estimated that city-owned properties in the Light Rail Corridor, if redeveloped, would be worth at least $40 million.  The same properties, in the absence of Light Rail, could be redeveloped to a value of about $20 million.  This means that they will experience a “value uplift” of at least $20 million.  Any value associated with the marketing of these properties should be assigned to a Reserve Fund to benefit future rapid transit investments.

 

All properties near to Light Rail Stations will be worth more by virtue of their increased accessibility.  It would be helpful if the City of Ottawa were able to capture for light rail, some of the increased property taxes in the light rail corridor, through the application of Tax Increment Financing (TIF).  Such a tool is not currently available and, until property tax reform is completed in Ontario, such a scheme is not entirely workable.  But, the City should initiate a mechanism to track changes in property value associated with light rail, so as to be in a position to implement a tool such as a TIF at a later date. 

 

DISCUSSION

 

1.   Property Value Uplift – General Description

 

Extensive literature exists on the relationship between public investment in rapid transit and the increase in value of adjacent properties.  The increase in value is attributable to the increase in accessibility.  The premium is above and beyond those increases that might have occurred over time in the absence of rapid transit.  The Urban Land Institute (ULI) suggests that, conservatively, a value premium of 10 to 20 percent can be expected.  A review of the literature identifies a wide variability in the change in property values but suggests that the ULI is very conservative.  Some typical examples from the literature are found in Table 1.

 

Uplift in property value reveals itself in three ways:  1) an increase in the amount of development (e.g. higher densities); 2) an increase in the character of development (e.g. offices rather than townhouses) and 3) an increase in the unit value of property in the same class (e.g. higher rents). 


A number of factors may contribute to the timing and amount of ‘value uplift’ for properties adjacent to LRT stations as follows:

 

§         Property benefits develop over time as the Light Rail Transit (LRT) service matures. 

§         Property development activity and value uplift rely on strong local economic and real estate market conditions, which are cyclical by nature.

§         LRT service may provide the potential for additional new development on properties adjacent to station locations beyond that than could otherwise be accommodated by the existing and currently planned road network.  Traffic congestion has been identified as one of the key factors influencing development potential at LRT stations.

§         The LRT and associated improvements may knit the community together, thereby enhancing the attraction of the whole area.  For example, the corridor between Bayview and Carling Avenue has a great potential to bridge the divide between communities to its east and west.

§         The area may have a large supply of underutilized parcels of land for redevelopment.

§         Local intervention may be required to ensure the integration of land uses with the station, to support a mix of uses that encourage transit use and to introduce public projects to serve as development catalysts

 

Table 1 –Impact of Light Rail on Land Values*

 

City

Premium for Commercial Properties Near Stations

Premium for Residential Properties Near Stations

Dallas (DART)

53% (offices)

39% (residential properties)

San Jose

15% (commercial rents)

45% (apartment rents)

Portland

n.a.

10.6% (value of homes)

San Diego

72%+ (in downtown and major business districts)

0%(in other locations)

17% (single family in desirable areas)

3% to 6.5% (condos outside of downtown)

London (Jubilee Line Extension)

£0.75 to £1.9 billion of the increase in property at Canary Wharf would not have occurred without the JLE.

 

Toronto (subway)

30% (adjacent to station)

10% (within 500 metres of station)

Tax assessment (all) near City Centre stations rose by 45% and by 107% around suburban stations compared with a 25% rise for properties in the rest of the City

*These figures are derived from various studies, which are not always consistent with each other.  The values in the commercial column do not necessarily come from the same source as the values in the residential column.

 

 


2.   Value Capture

 

a.   Value capture techniques

 

A range of interventions may be used by governments to “capture” a portion of the value uplift, and thereby offset some of the costs of construction. 

 

In theory, capture techniques can potentially be applied to:

 

§         All properties in a “benefiting zone” through the property tax regime;

§         All new development in a “benefiting zone” through development charges;

§         Specific developments through density incentives or station connection fees; and

§         City-owned properties through sales or joint ventures.

 

b.   Practices in the United States

 

Some of the more commonly utilized techniques for value capture in the United States are Tax Increment Financing and Business Improvement Districts.  Tax Increment Financing (TIF) diverts tax revenues from a general fund to a special fund to finance an infrastructure project.  The diverted revenues are those revenues over and above a previously benchmarked amount.  A TIF does not extract additional revenues, but it allows the local authority to use the tax revenue to secure financing for a specific capital investment such as a rapid transit project. 

 

The Business Improvement District (BID) allows a levy to be raised on property within a specific geographic area such as within 600 metres of a rapid transit station.  The additional tax or fee helps pay for the infrastructure and assumes that those residing within the area are obtaining a special benefit from the new infrastructure investment.

 

c.       Practices in Ontario

 

§         Property Taxes:  The TIF described above diverts property tax revenues to a special fund.  There is no similar technique available in Ontario as all property taxes go into general revenues.

 

The BID described above imposes an additional tax on a benefiting property. This is also not available in Ontario.  Section 326 of the Municipal Act allows a municipality to identify a “special service” and impose a levy or surcharge on those who receive a benefit resulting from the special service.  However, this section is intended to apply where there is a direct correlation between the additional cost to the City and the benefit to the area.  It would be difficult to argue the case for property owners near to a light rail system.

 

In Ontario, an increase in the assessment base for properties in the LRT corridor (through increased assessment or a “surcharge”) would be offset by a reduction in assessment elsewhere in the City.  In effect, the net yield would be zero.

 

 


 

§         Development Charges:  Municipal surcharges or levies are primarily regulated by the Development Charges Act.  This Act permits transportation services, such as light rail, to be paid from the development charges applied to landowners, and provides that certain charges can be applied only in certain areas that benefit.  The DC Act requires a City to undergo extensive study of its needs, benefiting areas and growth patterns.  If a municipality intends to provide an increased level of service, it cannot charge for it through development charges.  Rather, calculations must be based on past experience.  Therefore, since Light Rail is new, there is no mechanism to recover the costs through development charges until the system has been in operation for a period of time.

 

§         Section 37 of the Planning Act:  This Section allows municipalities to share in the increased value that may result from increased density and/or height of a development project.  It allows the municipality to enter into an agreement with a proponent, in association with an amendment to a zoning by-law that increases development densities.  Section 5.2.1.6 of the City of Ottawa Official Plan contains policies to allow for the exchange of height and density for community benefits.  This would allow the City, for example, to negotiate an enhanced station connection or a wider station platform.  Such a policy applies only where the proposal is fully supportable in terms of ‘good planning’.

 

At the Scarborough town centre, the TTC was able to negotiate a new entrance to the station from two condominium towers for more than $1 million.  This constituted a pedestrian bridge and a TTC entrance.  Upon completion, the pedestrian bridge is transferred to the ownership of the City and 20% of the construction cost is contributed to the City for future maintenance.

 

Another example is the Maritime Life Building at Queen and Yonge Streets in Toronto.  A total value of $700,000 was negotiated for a variety of purposes and some of that went to the TTC.  It began as a Section 37 agreement but in the final analysis was an agreement negotiated in connection with a minor variance at the Committee of Adjustment (because the negotiation had already happened).  Also, Section 37 was used at Yonge and Eglington to secure the widening of the subway platform

 

§         Connection Fees:  The City of Toronto has adopted a policy for the approval and construction of an entrance connection (to the station), how it is to be designed and implemented, and the responsibility for capital and operating costs.  It sets out a fee structure for the payment of entrance connection fees so that it need not be negotiated on an ad hoc basis.  As an overriding principle, all capital and operating costs for entrance connections must be assumed by the developer for the life of the connection.


 

The policy is based on the fact that the development benefits from connection to the station.  The City of Toronto has required connection fees for a number of years, ranging from $200,000 to $600,000.  Ottawa could investigate a similar policy.

 

§         Air Rights:  The City can market the air rights over the station or other parts of the light rail corridor.  Typically the value of the air rights is similar to the value of property, discounted for the extra cost of building over the corridor.   In the North-South corridor various discussions are ongoing regarding development over the station/corridor.  In particular, the City of Ottawa and Carleton University are investigating the means to allow the next building at the University to be built over the station.

 

d.   Value Capture in Ottawa

 

The literature is clear that properties near to a light rail station will experience an increase in value relative to similar properties away from light rail.  However, there is no means to ensure that the associated increase in property taxes is made available to the implementation of light rail.  Tax Increment Financing is such a tool but is currently not permitted in Ontario.  Furthermore, until property tax reform is implemented, such a tool is not feasible.

 

Just less than 6% of all development in Ottawa is along the North-South light rail corridor within walking distance of a proposed light rail station.  This proportion will increase because of redevelopment of existing areas, along with the future development of Riverside South (where 30,000 out of 55,000 people and 10,000 out of 25,000 jobs will be within walking distance of a station).

 

If the increment of property taxes associated with value uplift were diverted to light rail, this could amount to between $8and $16 million per year once all of the properties were redeveloped, say after 15 years.

 

Table 2 – Potential Value of a TIF for the North-South Light Rail Corridor

 

Share of development in corridor

Premium in property values associated with light rail

Total Annual Property taxes in the City

Potential Annual Value of TIF after 15 years

6%

15%

$920 million

$8.3 million

6%

20%

$920 million

$11 million

7%

25%

$920 million

$16.1 million

 


 

In order to demonstrate the increase in value of property near to light rail stations, and in order to position the City to take advantage of any tools to divert or capture this value uplift, the City should establish a tool to monitor the changes in value.  Typically the main area of influence is 600 metres from a light rail station.  Monitoring would occur when a property owner successfully achieves an amendment to the zoning by-law to provide for increased density, or an increase in quality or a change to a higher order use. Such a program could be reported to Council every two years with comparative information to illustrate average value increases in the City in general.

 

3.   Transit-oriented development

 

Much of the literature on value capture comes from the United States where many jurisdictions are more concerned with promoting development around LRT stations through incentives, rather than in “capturing” value.  The main attention is given to accelerating transit-oriented development and thereby boosting transit ridership. 

 

Transit-oriented development is compact, mixed-use, pedestrian-oriented development that is often integrated with the transit station.  Its primary objective is to increase transit ridership.  But, it has additional benefits:  1) promotes economic development; 2) raises revenues; 3) enhances liveability; 4) enhances housing choices; 5) provides private development opportunities; and 6) allows for the municipality to share in the construction costs.

 

In order to achieve a 30% modal split in favour of transit, the modal split of residents and employees at rapid transit stations should be much higher than the current city average.  It is of paramount importance to facilitate the convenient use of transit.

 

Planning policies, Community Design Plans, zoning by-laws, design guidelines and other municipal tools should work together to facilitate transit-oriented development that is compatible with existing communities. A number of initiatives in Ottawa will facilitate transit-oriented development.

 

§         Official Plan and Comprehensive Zoning By-law:  Many of the rapid transit stations are within a Mixed-Use Centre Designation in the Official Plan with the associated requirements for compact, mixed-use development, limited surface parking and a quality pedestrian environment.  The draft comprehensive zoning by-law implements the Official Plan at the property level.  For example, it imposes minimums and maximums on the amount of parking required/permitted for development within 600 metres of a rapid transit station.

 

§         Brownfields Redevelopment Strategy:  The City of Ottawa is creating a Brownfields Redevelopment Strategy targeted to the redevelopment of under-utilized sites on Mainstreets, in Mixed-Use Centres and at rapid transit stations.  This will enhance the marketability and development potential of sites along the light rail corridor by providing financial incentives to cover some or all of the costs of site remediation.  The larger financial incentives defer for a period of time, the incremental increase in property taxes attributable to the redevelopment.  Once approved, these financial incentives will be available to the purchaser of a city-owned property, such as Bayview Yard.

 

§         LRT Corridor from Bayview to Carling, Community Design Plan:  The City of Ottawa is currently undertaking this Community Design Plan (CDP).  It is a requirement of the Official Plan as the area is within a Mixed-Use Centre designation.  The CDP will establish a vision for the corridor and identify the underutilized lands that have the potential for intensification.  The plan will ensure that new developments are compatible with the surrounding neighbourhoods and mainstreets.  Part of the implementation strategy will be to establish design guidelines and zoning for this area.  This means that future developers will not be required to go through a zoning by-law amendment if their proposal is consistent with the CDP.  In addition, the strategy will ensure that local infrastructure is adequate for implementation of the plan.  Together these will significantly improve the real estate market positioning of properties adjacent to LRT stations and greatly facilitate redevelopment in the corridor.

 

§         Escarpment Area, Community Design Plan:  The City of Ottawa is undertaking a CDP for the Escarpment Area: 1) between LeBreton Station and Bronson Ave; 2) Bronson Avenue to Bay Street and 3) along the escarpment north to Wellington Street.  This area was identified in the Downtown Ottawa Urban Design Strategy as a “Targeted Precinct” and is directly adjacent to the Light Rail.  The plan will provide new direction for higher density infill and strategies for key development sites such as the Ottawa Technical High School site and parcels already under redevelopment.   It will also recommend on general streetscaping and public realm improvements for existing development to improve the image of the area.

 

§         Riverside South Community Design Plan: Council approved this CDP in 2005 for a community of 52,000 people and 25,500 jobs.  It is a rare opportunity to plan a community with the knowledge that Light Rail will be implemented in advance of most development.  In this way, the plan was able to provide that 30,000 people and 10,000 jobs will be within walking distance of a Light Rail Station.  Design Guidelines for the “Mainstreet” area are currently being developed.

 

The City will continue to create opportunities to promote transit-oriented development through comprehensive, public planning processes.  This requires attention to detail in the design of specific developments and the configuration of the pedestrian environment.  It also means that each individual site needs to be assessed in the context of the opportunities in the whole area.  Undertaking a comprehensive plan allows for balancing the needs for greenspace, pathways and other community infrastructure with the potential for new development.  This is very true with regard to the Bayview to Carling corridor and also of significance in the Town Centres.  Here there is an enormous opportunity to plan compact, mixed-use, pedestrian-oriented development from the outset.

 


4.   Station Design

 

When the stations are constructed for the North-South LRT project, they should be designed to accommodate future integrated development.  This would favour the construction of a centre platform, which provides for efficient vertical circulation as well allowing for footings and columns above.  Of course, where possible, development and station construction should occur simultaneously.

 

5.   Strategic City-owned Sites on the LRT Corridor

 

The City owns some strategic sites along the corridor, as does the Federal Government and agencies, along with some private developers.  The National Capital Commission owns LeBreton Flats, Public Works and Government Services Canada has a large property between Gladstone and Somerset (Plouffe Park), the Ottawa-Carleton School Board has Ottawa Technical High School, private owners have City Centre, 180 Wellington Street, a parcel south of Walkley Station and others. 

 

Development planning cycles for large (and especially for mixed-use) projects are typically long.  This means that while there may be many enticing development opportunities, the market cannot absorb them all at one time.  However, for some of the potential development sites, the location characteristics in the real estate marketplace will be significantly enhanced by the presence of the LRT service and such sites will, over time, capture a greater share of the market than would be the case without the LRT service.

 

Opportunities in the inner city and downtown locations may develop faster because the character is already urban.  The Bayview to Carling Corridor is of specific note.  Developed properly, this corridor may be a showcase for transit-oriented development, with a focus on pedestrian-friendly, compact development.  There are enormous opportunities for a range of uses from residential to office and from medium to high density.

 

Documents 1 to 5 identify the large parcels or aggregates of parcels along the North-South LRT, owned by the City of Ottawa in 6 different locations. The City can benefit through the sale of its properties for redevelopment, through joint ventures with private firms or through public-private partnerships. 

 

The overall development potential of these six sites, in the absence of the Light Rail Project, would likely result in an overall average ratio of building floor area to site area of no more than 0.5.  This represents a total gross building floor area of approximately 200,000 square metres.  With the LRT service in place, the overall development potential for the same six sites would likely double to 400,000 square metres of gross building floor area.  At $100 per square metre of additional building floor area, this translates into a value uplift of $20 million.

 

Over the last 25 years, the average annual absorption of new buildings of all types was approximately 1,000,000 square metres.  On that basis, 400,000 square metres of new development would require an annual market capture of 40,000 square metres (4%) for a 10-year build-out and 80,000 square metres (8%) for a 5-year build-out.  An LRT corridor market capture in the range of 4% to 8% of the annual average absorption appears to be achievable based on current assessment growth.

 

a.   Arts Court Cultural Centre: 

 

Attachment 1 identifies the Arts Court block between Nicholas Street, Daly Avenue and Waller Street.  Except for the Youth Hostel, the block is owned by the City, including the vacant portion that was formerly occupied by the City of Ottawa Police Station. The city-owned parcel is 0.7 ha and the youth hostel occupies an addition 0.25 ha.

 

Arts Court is a multi-tenant, multi-disciplinary arts facility housing 25 arts organizations, 3 public galleries including a designated municipal art gallery and a small black box theatre. The current facility has reached its capacity in terms of available space, resources and capacity to meet the needs of a growing community. A Steering Committee comprised of staff and representatives of the Ottawa Arts Court Foundation, the Ottawa Art Gallery and the University of Ottawa have taken a leadership role in the potential capital redevelopment of Arts Court (2 Daly Avenue) and its adjacent lands known as the ‘Cultural Precinct’ (the area of land bordered by Daly Avenue, Waller Street, Nicholas Street and the MacKenzie King Bridge).    

 

The City of Ottawa’s Arts & Heritage Plan, adopted by City Council April 2003, identifies Arts Court as one of 5 cultural facility initiatives that have existing momentum and have been identified for development. In 2005, a Pre-Feasibility Needs Assessment and Best Practices Analysis Report was completed. The next planning phase, a detailed building program and business plan for the funding, management, design and construction of the Arts Court Cultural Centre is scheduled for completion in September 2006. Funds for this phase of the planning phase was approved as part of the 2006 Budget process. This future capital project has also been identified in the Long Range Financial Plan.

 

The Arts Court property is currently linked directly to the Mackenzie King Bridge by way of a public staircase.  This connection could be enhanced through future development of the site.  Opportunities exist to pursue compatible private sector development (P3) to assist in funding the Arts Court Cultural Centre project. 

 

b.   Bayview Yard:

 

Attachment 2 identifies the Bayview Yard.  The redevelopment potential of the Bayview Yard has been enhanced by four actions. 

 

§         In January, 2005, City Council approved a planning concept for the redevelopment of the City-owned Bayview Yard, subject to further due diligence which is currently being satisfied (“proof of concept”).  This concept was developed in consultation with the community and proposes 1600 dwelling units in mid-rise buildings as well as an institutional/commercial use. 

§         With the completion of a methane-monitoring program in June 2006, the City will have a comprehensive Phase 2 Environmental Site Assessment to fully explain the contamination on this site. 

§         With the approval of the Brownfields Strategy in the summer of 2006, the City will be in a position to offer financial incentives to any developers of this site to wholly or partially offset the cost of remediation.

§         On completion of the Community Design Plan (CDP) for the corridor in the winter of 2006, the City will have a vision for the corridor, will be aware of any infrastructure deficiencies and will have a strategy to ensure that infrastructure is sufficient for proposed densities.  With respect to the Bayview LRT station serving as a transit hub, the City will be able to identify the potential for linkages between developments on properties in the vicinity of the Bayview LRT station (Bayview Yards, Tom Brown Arena, 180 Wellington, City Centre, Lebreton Flats).  On completion of the CDP, the City will assess and revise the Bayview Concept Plan as part of completing the proof of concept work.

 

By the end of the year, the City could proceed with marketing this property in accordance with the approved or modified concept plan.

 

c.   Tom Brown Arena:

 

Attachment 2 also identifies the Tom Brown Arena.  An arena, integrated community meeting rooms and the associated parking, occupies this site.  About half the property is open space.   This is a single ice pad but if it were replaced, the City would build a double ice pad.  If the City were to consider relocating the arena, it would require about 10 acres of land to provide for a double surface and the associated parking.  Also, this parcel would have to be found in the centre of the City and preferably on city-owned land.  This arena is heavily used during the daytime (which is different from suburban locations).  As with other arenas, few of its patrons arrive by public transit.  If it needs to be relocated, one should plan for a 3-year process to bring another arena on stream.  Since the demand for community space is growing, that function would have to be retained in any redevelopment of the Tom Brown Arena parcel.  Also, redevelopment along the LRT may mean that all existing community facilities are undersized (e.g. Plant Bath, Hintonburg Community Centre).  The CDP for the corridor will identify future development potential for this property in relation to the Bayview LRT station and adjacent developments. This site could be redeveloped over time.  The City is currently completing a Phase 2 Environmental Site Assessment for the property as part of its due diligence in planning for its future.

 

d.   Gladstone:

 

The City of Ottawa Public Works and Services Department, Traffic & Parking Operations, makes use of a property on Loretta Avenue for offices (including the traffic control management system), sign and signal shops, fuelling, parking and materials storage as shown in Attachment 3.  It is an “L”-shaped parcel of land on the east side of Loretta Avenue, on the west side of the N-S LRT Corridor, south of Gladstone Ave and north of Highway 417.  The City also owns property on the east side of the corridor and is currently negotiating to purchase two parcels from the National Capital Commission, so the potential exists to redevelop these parcels in a manner that it is fully integrated with the Gladstone station. 

 

In the meantime, City staff are initiating a study to look at the feasibility of relocating the Loretta Facility to allow for complete redevelopment of the site.  The CDP for the corridor will identify future development potential for this property in relationship to the Gladstone LRT station and adjacent developments.

 

Again there may be potential to phase development from east to west and achieve full station integration at the outset.

 


e.   Greenboro Park and Ride:

 

Attachment 4 identifies the Greenboro Park and Ride.  This site was established as a park and ride for the Transitway.  Staff of Planning and Growth Management are currently reviewing park and ride policies and practices to determine the future needs.  This strategy will look at the distribution and size of facilities, at which time the future of the Greenboro Park and Ride can be better assessed.

 

From a real estate perspective, the highest and best use for the Greenboro Park and Ride property, based on the presence of an LRT station, would be a mixed-use development.

 

f.    South Keys:

 

The whole corridor along the N-S LRT from Confederation Station to Hunt Club Road is in a Major Open Space designation or an Urban Natural Features designation in the Official Plan.  The Urban Natural Features recognizes the presence of Sawmill Creek and the sensitivity of its environment to development.  The Major Open Space designation reflects the significance of this area as a linkage joining, in particular, the Greenbelt to open space and natural areas as far north as Vincent Massey Park.  There may be potential in the future to develop over the station at South Keys shopping centre (this station is not being constructed in phase 1 of the project) without jeopardizing the continuous open space corridor but it has not been included in this summary.  No development is likely to take place in the absence of light rail. 

 

g.   Airport Parkway:

 

Attachment 5 identifies the city-owned parcel adjacent to the Airport Parkway just south of Hunt Club.  This is one of the sites being evaluated as a potential maintenance facility for the North-South LRT.    This site is currently zoned as Institutional Government (Ig) in the former City of Gloucester zoning by-law, as it is part of the McDonald Cartier International Airport.  However, it falls outside of the area impacted by airport noise and could be developed for a variety of uses ranging from high density residential to office or hotel. 

 

CONCLUSIONS

 

It would be useful to be able to divert some of the revenues from increased property values to current or future Rapid Transit projects.  As a first step, the City should monitor the property value uplift in the Light Rail Corridor, relative to changes in property values in the City on average.  This will position the City to take advantage of tools such as Tax Increment Financing should they become available.  In addition, it will clearly demonstrate the quantum of increased value associated with the Light Rail investment.

 

Unique opportunities exist in association with city-owned properties along the North-South LRT.  These could manifest themselves in three different ways.  The City could issue an RFP to market properties in compliance with a specific plan for the property that implements Council’s objectives.  This approach may be appropriate for the Bayview lands for example.  The City could enter into agreements with adjacent property owners to jointly construct some station amenity through a joint venture.  This may be appropriate especially where adjacent land is in private ownership but there would be mutual benefit in developing over the corridor.  This approach is being used at Carleton University.  Finally, the City could establish a private-public partnership in order to assist in financing a public sector project.  This approach may be effective for Arts Court.  The overall value of the six City-owned parcels, assuming redevelopment to compact mixed-use developments, is at least $40 million.  Any value associated with the marketing of these properties should be assigned to a Reserve Fund to benefit future rapid transit investments.

 

The City should also consider future potential to integrate development with the Light Rail station.  The design of the station at the outset can facilitate future development and trigger joint-venture opportunities.

 

One of the most important means to boost transit ridership is to ensure that new development is oriented to transit.  The City will continue to undertake initiatives in strategic locations to promote transit-oriented development.  This is particularly important in the Bayview to Carling Corridor and in the new and developing Town Centres of Riverside South and Barrhaven communities.

 

CONSULTATION

 

There has been no consultation on this report.

 

FINANCIAL IMPLICATIONS

 

The total value associated with city-owned properties along the North-South Light Rail corridor is approximately $40 million.  Redevelopment will have costs associated with it but any value beyond these costs could be placed in a reserve account for the benefit of rapid transit projects.

 

SUPPORTING DOCUMENTATION

 

Attachment 1    Arts Court

Attachment 2    Bayview Yards and Tom Brown Arena

Attachment 3    Loretta Facility and Gladstone Station

Attachment 4    Greenboro Park and Ride

Attachment 5    Airport Parkway

 

DISPOSITION

 

Staff will set up a system to monitor value uplift along the North-South LRT Corridor.

 

 

 


ATTACHMENT 1

 

 

 


ATTACHMENT 2

 

 


ATTACHMENT 3

 

 


ATTACHMENT 4

 

 

 


ATTACHMENT 5

 

 


Replacement Bus Service for o-train                                              DOCUMENT 8

 

 

O-Train

Proposed Replacement Bus Service

To operate as required during the construction of the North-South light rail line

 

South Keys Station – Tunney’s Pasture Station

Stopping at:

·          South Keys Station

·          Greenboro Station

·          Walkley Station

·          Confederation Station (bus stops on Heron and Bronson-Heron ramp)

·          Carleton Station (bus stops on Campus and University)

·          Carling Station (bus stops on Carling at Preston)

·          Bayview Station

·          Tunney’s Pasture Station

 

Service Hours and Frequency

·          First trips 06:30 in both directions

·          Service every 5 to 15 min, as required (O-Train is every 15 minutes)

·          Some trips only to or from Carleton, as required

·          Last trips at approximately midnight in both directions

 

Travel Times

·          Greenboro – Bayview, 21-22 min (O-Train is 12 min)

·          Greenboro – Tunney’s Pasture, 24-25 min (O-Train+bus is 18-19 min)

·          Greenboro – Carleton, 9-12 min (O-Train is 6 min)

·          Carleton – Bayview, 10-12 min (O-Train is 6 min)

·          Example trip from Bayview or Greenboro to Carleton at peak times –
3 min waiting time + 11 min travel time = 14 min (for O-Train, 7 min
waiting time + 6 min travel time = 13 min)

 

Detailed Routing

·          Northbound – South Keys Station, Transitway, Data Centre, Heron, Bronson, enter and loop Carleton University, Bronson, Carling, Preston, Albert, Transitway to Tunney’s Pasture Station

·          Southbound – Tunney’s Pasture Station, Transitway, Albert, Preston, Carling, Bronson, enter and loop Carleton University, Bronson, exit to Heron, Heron, Data Centre, Transitway to South Keys Station

 

Resource Requirements

·          Requires 10 additional buses in service (13 additional buses in the fleet)

·          Costs approximately 42,000 additional hours per year

 

 

 


 

 


 

 



MEMORANDUM OF UNDERSTANDING BETWEEN                                    DOCUMENT 9

THE CITY OF OTTAWA AND THE AIRPORT AUTHORITY

 

 


 

 


 

 


 

 


 

 

 


 

 


 

 


 

 



Public Consultation Process                                                               DOCUMENT 710

 

 

An extensive public consultation process was conducted throughout the North-South LRT Project. The following outlines some of the main points of public contact to date;

 

Public, Agency and Business Consultation Groups (CG's) (EA)

 

Were established at the study outset, with potential members sought through liaison with Councillor offices whose wards were adjacent to the project study area. The initial CG membership was confirmed by the Transportation Committee through its approval of the Study Statement of Work on January 21, 2004.

 

Study Consultation Group Meetings (EA)

 

Were held in advance of each round of Public Open Houses at key points during the EA study relating to: Terms of Reference; Existing Conditions/Alternatives/Bus vs. Rail; Preliminary Plan (incl. Initial Downtown Concept), and the final Recommended Plan (incl. Revised Downtown Plan).

 

Public Open Houses (EA)

 

Public Open Houses were held at key stages of the EA study as posted on the City of Ottawa LRT website with dates, times and locations listed on the right side of the page. These were published in the newspapers at the time as well.

 

May 2004 OH 1 Terms of Reference

http://ottawa.ca/residents/lrt/ns_line/stages/stage_1/oh_1_en.shtml

October 2004 OH 2 Existing Conditions/Alternatives/Bus vs. Rail

http://ottawa.ca/residents/lrt/ns_line/stages/stage_2/index_en.shtml

March 2005 OH 3 Preliminary Plan (incl. Initial Downtown Concept)

http://ottawa.ca/residents/lrt/ns_line/stages/stage_3/index_en.shtml

June 2005 OH 4 Recommended Plan (incl. Revised Downtown Plan)

http://ottawa.ca/residents/lrt/ns_line/stages/stage_4/index_en.shtml

 

Consultation Specific To Albert/Slater Plans (EA)

 

Special consultation, specific to the plan for LRT in the downtown core, was undertaken initially with the presentation of the Preliminary Concept to Business and Landowners on Monday March 7, 2005, as well as to Councillors and the media through a special briefing. Subsequently, the EA team met individually with over 20 business and landowners as well as representatives from the Building Owners and Management Association (BOMA) to obtain feedback on the preliminary plan.

 

 


Albert & Slater Street 'Walk-Along'

 

During the week of April 11, 2005 a team of 4 people completed a walk along of Albert and Slater Streets to meet all businesses inside that corridor; provide information packages about Light Rail; show a detailed map of their business and how it may be affected by Light Rail Transit; and gather any comments or concerns. Input from this process has been received.

 

Presentation of Revised Scheme for Albert/ Slater Streets (Preferred Plan) (EA)

 

The recommended final plan was presented to Business and Landowners on Tuesday May 17, 2005 at the Crowne Plaza Hotel.

 

The Report to Transportation Committee and Council

 

Posted on the City of Ottawa LRT website

http://ottawa.ca/residents/lrt/ns_line/stages/stage_5/index_en.shtml, which was discussed at Council on July 15, 2005.

 

EA for the North-South Corridor LRT Project

 

Submitted to the Minister of the Environment (MOE) September 9th, 2005. In accordance with the Act, the public was notified of this submission through ads in the local newspapers on September 9th and 16th, 2005, advising that the report was available for public review at Ottawa City Hall, at all City Client Service Centres and at all libraries in the study area including the Blossom Park Branch. A copy of this notification was also sent to all members of the Study Public Consultation Group for their information and to distribute amongst their representative communities. The EA report is comprised of 5 volumes, in accordance with City practice it was made available for viewing at a link posted on the City of Ottawa LRT website.       http://ottawa.ca/residents/lrt/ns_line/stages/stage_6/index_en.shtml 

 

Public Working Group (PWG)

 

As required by MOE, the City formed a PWG to obtain direct participation from residents, communities and interest groups who had indicated an interest in, or may be affected by the selection of the location for the LRT storage and maintenance facility.  The PWG undertook a technical assessment of each of the three eligible sites beginning in February 2006 through April 2006. 

 

Open House- Proposed Maintenance and Storage Yard Facility

 

To allow residents to review information and comment on the recommended location for a new LRT maintenance and storage yard facility, April 11, 2006.

http://ottawa.ca/residents/lrt/ns_line/maintenance_storage_en.shtml

 

 

 


Several Reports to Council

 

Since September 2005 reports have been posted on the City of Ottawa LRT website.

http://ottawa.ca/residents/lrt/ns_line/council_en.shtml

 

The City of Ottawa LRT Website

 

Lists major announcements relating to the North -South LRT

http://ottawa.ca/residents/lrt/newsroom/index_en.shtml

 

 


INFLATIONARY PRESSURES CURRENTLY EXISTING                             DOCUMENT 11

WITHIN THE CONSTRUCTION INDUSTRY

 

 

The construction industry is subject to price increases that vary significantly from those experienced by the general consumer.  Statistics Canada reported that the Consumer Price Index for the Ottawa-Gatineau metropolitan area increased by 9.1% from 2001 to 2005.  In that same time period the non-residential construction price index (relates to cost increases in the construction of industrial, manufacturing and institutional structures) increased by 18% with the largest increases occurring in the last two years. The following graph shows the % change in these two indexes from 2001 to 2005.

 

 

 

Even though the non-residential construction index increased by almost twice the increase in the CPI, the actual impact on construction costs can be much more significant (depending on the type of project) as contractors have had to deal with very significant variations and increases in construction materials cost. The types of materials that particularly affect the LRT project are listed below (all increases are in Canadian dollars).

 

1)                  Copper – Copper prices have gone up approximately 94% over the last two years.  This will have a major effect on the cost of the catenary cable & electrification systems.

2)                  Aluminum – Aluminum prices increased 40% in last two years.  This will have a major effect on the cost of shelters and electrical components / fixtures.

3)                  Steel – Rebar – Pricing fluctuations of over 20% have been experienced since major spike in late 2004.  Rebar is a significant component in retaining walls, bridges, etc.

4)                  Steel – Scrap – The cost of this material is up 84% from the pre 2004 five-year average.  This is a major component to structural steel elements used for building structural steel, particularly in the stations and Maintenance Centre and in rail.

5)                  Concrete – Cement powder and concrete pricing has increased 10-13% from October 2004 to October 2005.  This material is a major component of bridges, structures, stations, streetscape and the Maintenance Centre.

6)                  Petroleum Prices – Petroleum prices have increased 20-30% over the last year.  This has had a major impact on heavy civil works, as fuel represents a high percentage of trucking & equipment operation cost.

 

With this recent history of instability and rapid increases in construction material prices over the last 2-3 years, it is obvious that there have been very significant and unanticipated increases in construction costs since the North-South LRT Project was first estimated three years ago.  Also, estimates produced in 2003 for the LRT Project could not have anticipated the inflation in construction costs that has actually occurred.  The difference between CPI and the non-residential construction index between 2003 and 2005 if applied to the $725 million budget for the LRT would result in an additional $61 million in additional funding being required for the project.

 

By entering into a fixed price contract with Siemens the City passes the risk of cost increases for materials going above what the contractor has forecast onto the contractor, and protect the City against any future increases. 

 

 



[1] Excerpt from the Agreement for the Transfer of Federal Gas Tax Revenues Under the New Deal for Cities and Communities signed by the Federal Government, the Ontario Government, the Association of Municipalities of Ontario and the City of Toronto on June 17, 2005.