August 24, 1998

To:Works and Utilities Committee

From:Barry H. Gutteridge, Commissioner of Works and Emergency Services

Subject:Cleaning and Cement Mortar Lining of Existing Water Mains, North York District, Contract #97-709

Purpose:

The purpose of this report is to authorize the City to enter into a takeover/construction completion agreement with the surety company for Contract #97-709 for the Cleaning and Cement Mortar Lining of existing cast and ductile iron water mains throughout various locations within the City of Toronto, North York District, to allow the successful completion of the project.

Funding Sources, Financial Implications and Impact Statement:

Funding for this work was included in the approved 1998 Capital Budget.

Recommendations:

It is recommended that:

(1)The City of Toronto enter into the takeover/construction completion agreement with the Employers Insurance of Wausau, a Mutual Company to allow the completion of Contract #97-709; and

(2)the appropriate City officials be authorized to take the necessary action to give effect thereto.

Council Reference/Background/History:

This contract was called in 1997, and the tender closed on September 3, 1997 with Spiniello Construction Company having submitted the lowest bid of $2,032,134.37. Spiniello Construction was owned by Spiniello Construction Company of New Jersey, USA. The contract was signed and executed on September 24, 1997.

Work on this project was discontinued in November 1997 due to the onset of winter. Construction activity resumed in June 1998, and work has continued to date.

Comments and/or Discussion and/or Justification:

On June 12, 1998 the City of Toronto was informed that Spiniello Construction Company sought protection under Chapter 11 of the United States Bankruptcy Court.

On June 29, 1998 an Order from the United States Bankruptcy Court indicated that a settlement had been reached. Spiniello Construction Company=s surety, the Employers Insurance of Wausau, acting through The Guaranty Company of North America, has assumed control of the situation. In addition, a new company called Spiniello Companies was formed, and an arrangement with Wausau and Spiniello was established to perform the remaining work on all outstanding contracts.

In order to ensure the successful completion of all outstanding works, all activities must now be coordinated through Wausau, which requires the City to enter into a takeover/construction completion agreement.

The takeover/construction completion agreement has been reviewed by Legal Department Staff and have found it to be appropriate and in order. Please find attached the form of agreement.

Conclusions:

It is concluded that the City enter into the takeover/construction completion agreement with the Employers Insurance of Wausau, for Contract #97-709 for the cleaning and cement mortar lining of existing cast iron water mains at various locations within the City of Toronto, North York District.

Contact Name:

Mr. Mario Crognale, P. Eng.

Director of Water and Sewer Operations

Phone: (416)395-6219; Fax: (416)395-6200

E-Mail: mcrognal@city.north-york.on.ca

Mr. Jack Graziosi, P. Eng.

Works Engineer

Phone: (416)395-6218; Fax: (416) 395-6200

E-Mail: ggrazios@city.north-york.on.ca

Michael A. Price, P. Eng.Barry H. Gutteridge

General ManagerCommissioner

Water and Waster Water ServicesWorks and Emergency Services

MC/GG/ab