STAFF REPORT
November 17, 1999
To: Policy and Finance Committee
From: Barry H. Gutteridge, Commissioner of Works and Emergency Services
Wanda Liczyk, Chief Financial Officer and Treasurer
Subject: Additional Expenditures for Work on Design-Build
Contract RFP No. 9155-99-01548 for Biosolids Truck Loading
and Odour Control Facilities
Purpose:
The purpose of this report is to advise of the requirement for additional expenditures in the amount of approximately $1.54
million, inclusive of GST, associated with the construction of biosolids truck loading and odour control facilities at the
Ashbridges Bay Treatment Plant.
Financial Implications and Impact Statement:
Funding for this additional expenditure is currently not available in the approved 1999-2003 Capital Works program and
was not forecasted in the preparation of our recently submitted proposed 2000-2004 Capital Works Program. Additional
funding in the amount of approximately $1.48 million, after Municipal Goods and Services Tax Rebate, will be required
over and above the amount currently included in our proposed 2000-2004 Capital Works Program submission as identified
under Capital Account WP160-22000111, Ashbridges Bay Treatment Plant.
The Chief Financial Officer and Treasurer has reviewed this report and concurs with the financial impact statement.
Recommendation:
It is recommended that this report be received for information.
Background:
On September 24, 1997, the former Metropolitan Toronto Council adopted Clause No. 8 of Report No. 12 of the
Environment and Public Space Committee, titled "Main Treatment Plant Environmental Assessment Implementation
Plan", which endorsed the conclusions of the Main Treatment Plant Environmental Assessment (MTP EA), including the
phased implementation of Biosolids Beneficial Use Program following the completion of four demonstration programs.
In January, 1998, the Works and Utilities Committee requested the Commissioner of Works and Emergency Services to
report on the feasibility of accelerating the shutdown of incineration at the Plant. The Plant is now known as the
Ashbridges Bay Treatment Plant (ABTP) as a result of the MTP EA Mediation Agreement approved by Council at its
meeting of June 9, 10, and 11, 1999.
By adoption of Clause No. 2 of Report No. 6 of the Works and Utilities Committee, at its meeting of July 8, 9, and 10,
1998, City Council authorized the Commissioner of Works and Emergency Services to establish the Biosolids
Multi-Stakeholder Committee (BMSC) and Independent Review Committee (IRC), retain consultants, and request
proposals to allow for the shutdown of sewage sludge incinerators at the Ashbridges Bay Treatment Plant within a
three-year period. This initiative is now known as the Toronto Biosolids Beneficial Use Program.
At its meeting of July 28, 1998, City Council adopted Clause No. 5 of Report No. 7 of the Works and Utilities Committee,
which contained an accelerated timeline developed for planning purposes by the Committee for initial implementation of
the Biosolids Beneficial Use Program. Subsequently, with input from the BMSC an aggressive timeline was set with the
target date of December 31, 2000 for the end of sludge incineration at the Ashbridges Bay Treatment Plant.
By adoption of clauses embodied in Report No. 5 of the Strategic Policies and Priorities Committee at its meeting of
March 2, 3, and 4, 1999, City Council authorized staff to negotiate Agreements for the beneficial use of the City's biosolids
with Terratec Environmental Ltd. (Terratec) and USF Canada Inc. (USF).
The adoption of the above-noted report also authorized the use of a Request for Qualification (RFQ) followed by a Request
for Proposal (RFP) as a methodology for the selection of firms to undertake design/build contracts for the necessary
biosolids truck loading and odour control facilities and a plant wide heating system, as well as, authorized the shortlisting
of respondents to the Request for Qualifications to receive the RFP.
At its meeting of July 27-29, 1999, City Council, by adoption of Clause No. 18 of Report No. 2 of the Works Committee
approved the award of Contract RFP No. 9155-99-01548 to Icon Systems Limited (ICON) for the design, construction and
commissioning of a biosolids truck loading and odour control facility at a lump sum price of $44,332,992.27, including full
GST and based on the terms and conditions set out in that RFP, and otherwise on such terms and conditions satisfactory to
the Commissioner of Works and Emergency Services and in a form satisfactory to the City Solicitor.
At the same meeting, City Council also approved Contract RFP No. 9155-99-01547 for the design, construction and
commissioning of a plant wide heating system to Thorburn Penny Limited and amendment of the existing Agreement with
Terratec Environmental Ltd., to include increased quantities of ABTP biosolids for land application.
Comments:
The scope of work included in the biosolids loading and odour control facilities contract included the following main
elements:
1. The construction of a new biosolids loading and sludge storage facilities to allow for unrestricted removal of biosolids
from the Plant by the land application contractor(s).
2. Provision of new odour control facilities to treat odorous air from the existing dewatering building, the existing loading
facility, the new biosolids storage facility, and the new loading facility to replace the odour control currently provided by
the incineration process.
3. Demolition of three existing sludge incinerators to provide space for construction of the three sludge storage silos.
As part of the Request for Proposals process for the work, an asbestos survey was undertaken by an independent
consultant, selected in accordance with approved corporate policy, to identify the extent of asbestos substances within the
three incinerators and components slated for demolition.
An Asbestos Survey is a part of a Designated Substance Survey, which is required under the Ontario Occupational Health
and Safety Act (OH&S Act) to identify substances to contractors and subtrades prior to the tendering of construction work.
The asbestos survey performed by Shaheen & Peaker Limited identified asbestos-containing materials in a number of
locations, most commonly in insulating cement as well as insulation of pipes, pipe fittings and in pipe and duct gaskets.
This information was documented and made available to bidders through issuance of an addendum to the original RFP
document.
However, upon commencement of the actual demolition of the incinerators, additional and unanticipated quantities of
asbestos-containing materials were encountered by the design/build contractor, ICON. The contractor has had the situation
investigated by their own independent experts and has advised that a substantial amount of hazardous Amosite Asbestos
insulation has been unexpectedly discovered between the refractory and steel shell of the three incinerators to be
demolished for the construction of the sludge storage silos. This has been confirmed by the City's independent testing.
In order for the work to proceed, the asbestos-containing material must be removed using Type 3 procedures as required
under the provisions of the Ontario Occupational Health and Safety Act. Type 3 operations are the most restrictive and
require the following extensive measures to be undertaken: full body protective clothing from head to feet, including the
use of a respirator; enclosure of work area using polyethylene sheeting from ceiling to floor and barricading area from rest
of workplace; decontamination of area including change rooms and showers; and encapsulating ("glueing") the material
prior to its disposal.
The additional work including the disposal of the contaminated brick and asbestos material at a licensed landfill site could
extend the overall project duration by up to twenty weeks. In order to minimize the delay, the contractor will be working on
a double shift basis reducing the delay to approximately five weeks. The additional cost to do the work has been estimated
at $1.54 million, inclusive of GST. This asbestos abatement cost has been reviewed by City staff and our engineering
consultants for the project, R.V. Anderson Associates Limited, and found to be fair and reasonable.
In order to expedite matters and to limit our liability for any delay claims, we have instructed the contractor to proceed with
the necessary extra work. However, to accommodate this additional expenditure, additional financing in the amount of
$1.54 million, inclusive of GST, will be required. As this extra work was not anticipated in the preparation of our proposed
2000-2004 Capital Works Program, it will be necessary to increase both the Gross Estimated Cost and the associated
funding requirement for this project by an amount of $1.54 million, inclusive of GST. Accordingly, the gross estimated
cost for the Biosolids Truck Loading and Odour Control Facilities (SAP No. 22000111) should be increased from
$45,238,000.00 to $46,778,000.00, inclusive of GST. Appropriate amendments to our proposed 2000 Capital Budget
submission will be tabled by the Department during the Capital Budget review process.
As the project is presently in its initial phase, there are sufficient funds available as per the approved 1999-2003 Capital
Budget to finance the work and until the additional funds are required.
Conclusions:
In order to expedite progress on this project, to comply as closely as possible to Council's targeted completion date as well
as to limit our liability for any possible delay claims, staff have authorized the Contractor to undertake the extra work at an
additional cost of $1.54 million, inclusive of GST.
Contact:
William G. Crowther, P.Eng.
Director, Works Facilities & Structures
Technical Services Division
Tel. No. 392-8256
Fax. No. 392-4594
Tom G. Denes, P.Eng. Barry H. Gutteridge Wanda Liczyk
Executive Director Commissioner Chief Financial Officer
Technical Services Works and Emergency Services and Treasurer
WGC/mtro
Biosolids
