The Corporation of the Town of Milton
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1 The Corporation of the Town of Milton Report To: From: Committee of the Whole M. Paul Cripps, P. Eng., Commissioner, Engineering Services Date: February 26, 2018 Report No: Subject: Recommendation: ENG Memorandum of Understanding Between Halton Region and Town of Milton Related to the Regional Roads Maintenance Agreement THAT the Mayor and Clerk be authorized to execute the Memorandum of Understanding (MOU between the Town of Milton and Halton Region regarding the establishment of a one year pilot program related to the Regional Roads Maintenance Agreement; AND THAT the Commissioner, Engineering Services be authorized to make minor technical amendments to the agreement in consultation with the Town s Solicitor. REPORT Background The purpose of this report is to authorize the execution of a Memorandum of Understanding (MOU agreement between the Town of Milton and Halton Region with regard to maintenance activities performed on regional roads within the Town. It has been typical practice for many years for local municipalities within Halton Region to provide maintenance on regional roads to minimize duplication and overlap in the efficient delivery of our respective municipal responsibilities. The Town of Milton carries out annual maintenance activities on regional roads on a cost recovery basis under the terms and conditions of the Regional Roads Maintenance Agreement. The type of maintenance provided by the Town includes: Road and roadside maintenance (i.e. pavement repairs, grass cutting, tree maintenance, weed control, landscaping, ditch repairs, bridge/culvert repairs, storm sewer repairs, guide rail/fence repairs Winter maintenance and winter road patrol Traffic signal and sign maintenance An agreement for these maintenance services has been in place between the Town and Halton Region since 1997, as have similar agreements with all the area municipalities in
2 The Corporation of the Town of Milton Report #: ENG Page 2 of 4 Halton. The current agreement covering these services was established in 2012 and expires on June 1, 2020, with an option for a further extension to June 1, Town staff are continually working with the Region and other Halton area municipalities to review the existing agreements to ensure the terms reflect best practices for road maintenance and to identify minor adjustments or additions of new services. Discussion In 2016, BMA Management Consulting was engaged by the Region to review the administration of the agreements and identify opportunities to streamline processes and create efficiencies. Halton Area CAOs have approved recommendations from the review as outlined in Halton Region Report PW (see Appendix I. The recommended changes include: For non-winter maintenance: A fixed price (including administrative overhead contract for summer activities based on a roadway lane/km cost Broad definition of the routine maintenance to be included in fixed price Invoicing based on work orders only for one-time or emergency situations including: o Signal maintenance o Storm sewer and SWM pond maintenance o Culverts o Accident damage o Tree maintenance and forestry o Etc. Local municipalities assume responsibility for non-winter road patrol of regional roads For winter maintenance: Establishing a consistent approach for allocating winter maintenance costs between local and regional roads that is based on a lane/km and incorporates a weighting to reflect the effort required for the class of road (i.e. primary vs. secondary vs. local/residential roads Where winter maintenance costs for regional roads are tracked separately, actual costs will be billed plus a 15 per cent administration fee. Salt will continue to be billed with a 10 per cent administration fee The recommended changes are primarily intended to streamline and simplify the billing process for the agreement and to create efficiencies for both the Region and the local municipalities. The transfer of non-winter road patrol responsibilities to the local municipalities is expected to also result in operational and service improvements. The changes are expected to be budget neutral overall.
3 The Corporation of the Town of Milton Report #: ENG Page 3 of 4 Halton Area CAOs have also approved a recommendation that the Region and local municipalities enter into a Memorandum of Understanding (see Appendix II for a one year trial period to test the effectiveness of the administrative changes. Following the one year trial period, it is recommended that any changes unanimously approved by the Halton Area CAOs would be incorporated into the Regional Road Maintenance Agreements. The one year trial will not implement all of the recommendations as contained in PW as there is some uncertainty related to the cost recovery mechanism associated with the winter control portion of the proposed program. Therefore, the pilot program, as stipulated in the MOU will establish a cost recovery model for routine non-winter control activities based on lane kilometers, a cost plus model for those items identified in section 6 of the MOU and full cost recovery for winter control services (existing practice. If the one year trial is considered a success, it is expected that the Regional Roads Maintenance Agreement will be amended permanently and the other recommendations contained in PW may be implemented. Financial Impact Implementation of the pilot as recommended in ENG should result in administrative savings at both the Regional and local levels without impacting levels of service or service delivery. The changes and related fee schedule have been designed with the goal of achieving budget neutrality for the Region and local municipalities as a whole. The financial results for Milton specifically will be monitored during the pilot and form a part of the resulting evaluation. The transfer of non-winter road patrol responsibilities from the Region to the Town for Regional roads will result in additional demands on Town staff. The extra resources required (staff, vehicle, etc. can be cost recovered through the MOU. With respect to risk and liability, the Town will be responsible for ensuring that the maintenance standards that are established for Regional roads are met. The Town will therefore be reliant on key inputs from the Region (such as a complete inventory of assets such as signage along Regional roads and will be responsible for ensuring sufficient resources are made available to monitor and maintain accordingly. As nonwinter routine maintenance is based on a fixed price cost recovery, variances will occur. Respectfully submitted, M. Paul Cripps, P. Eng. Commissioner, Engineering Services
4 The Corporation of the Town of Milton Report #: ENG Page 4 of 4 For questions, please contact: Paul Cripps x2501 Attachments Appendix I Halton Region Report PW Appendix II Draft Memorandum of Understanding CAO Approval William Mann, MCIP, RPP, OALA, CSLA, MCIF, RPF Chief Administrative Officer
5 Attachment #1 to PW Report To: From: Regional Chair and Members of Regional Council Mayor and Members of Council of the the City of Burlington Town of Halton Hills Town of Milton Town of Oakville Halton Area CAOs Date: June 7, 2017 Re: Regional Road Maintenance Agreement Update RECOMMENDATION 1. THAT the Region of Halton and the City of Burlington, the Town of Halton Hills, the Town of Milton and the Town of Oakville enter into a Memorandum of Understanding (MOU to amend the Regional Roads Maintenance Agreements as recommended in this report for a one year trial period. 2. THAT the Regional Roads Maintenance Agreements be revised at the end of the trial period to reflect changes agreed to unanimously by the Halton Area CAOs of the Region of Halton, the City of Burlington, the Town of Halton Hills, the Town of Milton and the Town of Oakville. REPORT Purpose The purpose of this report is to recommend that the Region of Halton, the City of Burlington, the Town of Halton Hills, the Town of Milton and the Town of Oakville, enter into a Memorandum of Understanding to amend the Regional Roads Maintenance Agreements to achieve efficiencies and streamline the administration of the contract. Background Since 1996 the Local Municipalities have provided maintenance services for Regional Roads in accordance with the Regional Road Maintenance Agreements. This arrangement is very beneficial providing economies of scale, seamless service delivery to residents, and reduced capital requirements (salt domes, equipment, facilities etc.. 1
6 In 2015 the Regional Road Maintenance Agreements were extended for an additional five-year period commencing June 2, 2015 to June 1, 2020 with an option to extend an additional five years to June 1, Amendments to the Agreements addressed technical issues such as forestry, landscaping, maintenance in construction zones, street lighting, etc. As part of the review of the Agreements, opportunities were identified to improve the administration of the Agreements and create efficiencies. It was agreed that these opportunities would be further assessed. Discussion Agreement Administration Review In 2015, BMA Management Consultants were retained to undertake an independent review of the administration of the Regional Road Maintenance Agreements. This review included a comprehensive analysis of the administration activities between the Local Municipalities and Halton Region. The scope of the study included: Document review; Analysis of the cost of service; Review of payment process including the level of documentation required to pay the invoices; and Identification of opportunities to streamline the process to reduce administrative effort and to achieve a more consistent level of service. Key principles considered included: Cost effectiveness producing the optimum results for money spent; Equity equitable cost recovery for all parties; Transaction costs minimizing costs of administration; Accountability clear accountabilities. Findings from Study and Discussions Non-Winter Maintenance Non-winter or summer items are items not associated with winter weather conditions. Although identified as non-winter/summer items the maintenance of these items do continue through the winter season The most significant opportunities identified related to the work order /invoicing process used for non-winter maintenance. There are over 1,500 work orders issued annually by Halton Region to the Local Municipalities for non-winter maintenance activities for Regional Roads. These work orders are generated from information obtained by the Region s road patrols, Local Municipalities and concerns raised by the public. These 2
7 work orders, once complete, are costed (including overhead and invoiced to the Region for payment. The Region reconciles the invoices to the work orders and processes payment. Key recommendations of the review included: A fixed price (including administrative overhead contract for summer activities based on a lane/km cost; Broad definition of the routine maintenance to be included in fixed price; Invoicing based on work orders only for one-time or emergency situations; Local municipalities assume responsibility for non-winter road patrol of Regional Roads. The expectation is that these recommendations will result in reduced administration costs by both the Region and the Local Municipalities, create efficiencies and improve customer service and response times. Staff from the Region and the Local Municipalities have reviewed the non-winter activities and determined that the following most routine activities as described in the Contractor s Maintenance Services document, can be recovered based on a lane/km price: asphalt cold/hot patch sweeping and flushing shoulder maintenance erosion control weed control graffiti removal debris pick up manhole maintenance and ditch repair minor bridge maintenance culvert entrance maintenance culvert maintenance storm sewer maintenance/cleaning catchbasin maintenance/cleaning curb/gutter maintenance sign maintenance right of way hazards, safety devices/guiderails (temporary street light maintenance emergency maintenance mowing, landscaping, horticulture and brush control street light locates traffic signal locates storm sewer locates weather monitoring Note: The list above varies from municipality to municipality and the specifics related to each municipality will be addressed in the Memorandum of Understanding. If any work is deemed to be in excess of what is described in the Contractor s Maintenance Services document for the lump sum items, a work order will be issued by Halton Region and paid as actual costs, plus a 15 per cent administration fee. Activities that are not included in the lump sum price will be invoiced to Halton Region as actual costs, plus a 15 per cent administration fee. The following items will be invoiced to Halton Region on a cost plus basis; 3
8 interconnect and signal maintenance storm sewer/storm water management ponds and oil/grit/separator repairs minor capital improvements roadside safety/guiderails (permanent noise attenuation fence maintenance culvert replacement retaining wall maintenance street light major repairs/replacement accident damages (nonrecoverable railway crossing maintenance traffic control tree maintenance/forestry emergency maintenance The transfer of non-winter road patrol responsibilities for Regional Roads to the Local Municipalities will result in efficiencies and improve response times. Transfer of the road patrol responsibilities is appropriate given the per lane/km invoicing. The Local Municipalities already provide road patrol services for winter. Winter Maintenance The review identified opportunities to simplify and improve consistency in the approach to invoicing for winter maintenance activities and recommended: Establishing a consistent approach for allocating winter maintenance costs between local and Regional Roads that is based on a lane/km and incorporates a weighting to reflect the effort required for the class of road (i.e. primary vs. secondary vs. local/residential roads. Where winter maintenance cost for Regional Roads are tracked separately, actual costs will be billed plus a 15 per cent administration fee. Salt will continued to be billed with a 10 per cent administration fee. The following items are considered winter maintenance as per the Agreement and Contractor s Maintenance Services document: snow plow snow removal drainage maintenance salting and sanding salt and sand stockpiling anti-icing snow fence erect and remove winter damage repair winter road patrol standby Road patrol for winter maintenance is provided by the Local Municipalities and it is recommended this continue. Memorandum of Understanding It is anticipated that the proposed changes to the Regional Road Agreements will create efficiencies and service improvements. The expectation is that these changes will be 4
9 overall budget neutral however the changes significant and the implications need to be confirmed. It is therefore recommended that Halton Region and the Local Municipalities enter into a Memorandum of Understanding to reflect the proposed amendments to the Agreements for administration of non-winter and winter maintenance for a one year trial period. This will provide an opportunity to review and evaluate the proposed changes before amending the Agreements. Halton Region and the Local Municipalities will review the effectiveness of the one year trial period and then make changes to the final Regional Road Agreements by incorporating any lessons learned through the trial as unanimously agreed to by the CAOs of Halton Region FINANCIAL/PROGRAM IMPLICATIONS The proposed changes to the administration of the contract are expected to be overall budget neutral. MacCaskill ief Administrative Officer Halton Region ames Ridge Chief Administrative Officer City of Burlington WjyA, rent Marshal Chief Adminislrative Officer Town of HaItai Hills Bill Mann Chief Administrative Officer Town of Milton Ray Green Chief Administrative Officer Town of Oakville 5
10 Appendix II BETWEEN: MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding ("MOU" is dated the day of, 2018 THE REGIONAL MUNICIPALITY OF HALTON (hereinafter referred to as the "Region" - and - THE CORPORATION OF THE TOWN OF MILTON (hereinafter referred to as the "City/Town" WHEREAS the Region has enacted By-law 76-10, and By-law , as amended, which establish the roads or public highways located within the boundaries of the Region that are included in the Regional Road System; AND WHEREAS certain roads located in the City/Town are included within the Regional Road System; AND WHEREAS pursuant to the Municipal Act, 2001, S.O. 2001, c. 25, as amended or replaced from time to time, the parties hereto entered into an agreement respecting the maintenance of the Regional Road System dated May 29, 2015 (the "Agreement"; AND WHEREAS the parties hereto wish to realize mutual benefits in relation to maintenance of the Regional Road System, including: the attainment of economies of scale and efficiencies in operations by providing the City/Town with greater accountability and flexibility; a decrease in administrative workload amongst the parties by moving to a simpler lump sum billing model for many road maintenance activities; the achievement of a more consistent level of service with minimal impact to the overall budget; and the continuation of the consistent delivery of operational activities across all municipalities; AND WHEREAS the parties hereto wish to establish a pilot program in respect of the performance of certain Maintenance Services on Regional Roads whereby the following changes to the Agreement are made, as more broadly set out in this MOU ("Pilot Program": (i (ii transferring the responsibility for Routine Road Patrols (as defined in the Agreement to the Town from the Region and changing the definition of "Maintenance Services" accordingly to include Routine Road Patrol; and changing Article VI of the Agreement in order to implement a lump sum cost for most routine non-winter Maintenance Services. NOW THEREFORE THE PARTIES HERETO AGREE as follows:
11 [Draft] DEFINED TERMS Unless otherwise defined herein, all capitalized terms shall have the same definition and meaning as those ascribed to them in the Agreement and schedules thereto. "Costs Plus" means the direct material cost, direct labour cost, and overhead costs of certain maintenance activities prescribed herein, plus 15% in respect of administrative costs. "Local Municipality" or "Local Municipalities" means The Corporation of the Town of Oakville, the Corporation of the City of Burlington, the Corporation of the Town of Milton, and the Corporation of the Town of Halton Hills, collectively, singularly or any combination thereof as context allows. "Winter Control Services" means the winter control services under chapter 2 of the Contractor's Maintenance Services, including Winter Road Patrol. TERM The term of this MOU commences on the 1 st day of April, 2018, and ends on the 31 st day of March, 2019, inclusive (the "Trial Period". Notwithstanding the generality of the foregoing, the Commissioner may extend the Trial Period for duration of up to an additional calendar year upon agreement with the Town. No later than 30 days before the expiry of the Trial Period, the Local Municipalities and the Region shall indicate whether the Pilot Program established by this MOU should be unanimously incorporated by further amendment to the Agreement. In the event that the Local Municipalities and the Region unanimously agree to amend the Agreement under section 2.2 of this MOU, the Pilot Program shall automatically continue until the earlier of (i such time as the Agreement with each Local Municipality is revised and executed by way of an amending agreement to incorporate the Pilot Program with agreed terms, or (ii the Agreement expires or is terminated. In the event that the Local Municipalities and the Region do not unanimously agree to further implement the Pilot Program, this MOU will expire at the conclusion of the Trial Period and the Agreement will otherwise continue without amendment. This MOU may be terminated in accordance with section 5.2 of the Agreement. WINTER CONTROL SERVICES Winter Control Services are not included in the Pilot Program and will continue to be invoiced as per the current Agreement and practices. Notwithstanding section 3.1 of this MOU, the Local Municipalities and the Region shall work to establish a consistent approach for allocating costs for Winter Control Services between local and Regional Roads that is based on a lane/kilometre cost and incorporates a weighting to reflect the effort required for the class of road. A cost -2-
12 [Draft] formula for Winter Control Services may be incorporated into the Pilot Program during the Trial Period if agreed to in writing by the parties. ROUTINE PATROL Section 4.1 of the Agreement is to be read as replaced with the following provision: The City/Town shall perform Routine Road Patrol on Regional Roads throughout the entire year. Routine Road Patrol shall form part of the Contractor s Maintenance Services. Section 4.2 of the Agreement is to be read as replaced with the following provision: If the Region becomes aware of an item requiring maintenance as identified in the Contractor s Maintenance Services, the Region shall transmit a Work Order to the Director electronically by . Upon receipt of the Work Order the Director shall acknowledge the receipt of same, by return . The City/Town shall complete the ordered work within the time-frame specified in the Contractor s Maintenance Services and, upon completion of the work, the Director will confirm by the completion of the Work Order. The Town shall perform Routine Road Patrol of the Regional Roads within its maintenance jurisdiction, (as identified in Appendix 2 of the CMS, in accordance with the standards mandated by the provisions of the Minimum Maintenance Standards for Municipal Highways, and shall identify any deficiencies that may exist within the road allowances of the Regional Roads within its jurisdiction. The Town shall track the actual costs for performing Routine Road Patrol of Regional Roads. Payment for Routine Road Patrol of Regional Roads will be invoiced by the City/Town to the Region on a Costs Plus basis, until such time that actual costs can be determined on agreement of both parties and incorporated into the Cost Per Lane Kilometre charge. The Town shall on its own initiative perform repairs of deficiencies identified during the Routine Patrol of Regional Roads in accordance with the terms of the CMS (to be read in accordance with this MOU, without the need of the Region providing a Work Order, except where a Work Order is provided pursuant to section 4.2 of this MOU. During the Trial Period, the parties shall meet quarterly at the Halton Area Maintenance Supervisors meeting to discuss and review Routine Road Patrol costs and procedures. INCLUSIVE ROUTINE MAINTENANCE ACTIVITIES The maintenance activities listed in this section are to be read as Routine Maintenance activities within the CMS ("Inclusive Routine Maintenance": weather monitoring, -3-
13 [Draft] asphalt cold/hot patch, shoulder maintenance, erosion control, weed control, graffiti removal, debris pick up, manhole maintenance and ditch repair, minor bridge maintenance, entrance culvert maintenance, culvert maintenance, storm sewer maintenance/cleaning, catch basin maintenance/cleaning, curb/gutter maintenance, sign maintenance, right of way hazards and safety devices/guiderails (temporary, street light maintenance street light locates mowing, landscaping, horticulture, and brush control. 5.2 In the event that the maintenance activities listed in section 5.1 of this MOU includes a maintenance activity for which the Town is listed as an exempted contractor within the CMS, the Town agrees to waive the exempted contractor status therein and to perform this work on a Costs Plus basis until such time that that actual costs can be determined on agreement of both parties and incorporated into the Cost Per Lane Kilometre charge. 5.3 For clarity, reference to "Inclusive Routine Maintenance" in this MOU includes maintenance activities identified in section 5.1 of this MOU and excludes (i Winter Control Services, (ii Costs Plus activities identified in section 6.1 of this MOU, and (iii Supplementary Maintenance. COSTS PLUS ACTIVITIES The following maintenance activities as listed within the CMS will be invoiced to the Region on a Costs Plus basis: interconnect and signal maintenance, storm sewer repairs/swm ponds & OGS maintenance, minor capital improvements, roadside safety/guiderails (permanent, noise attenuation fence maintenance, culvert replacement, -4-
14 [Draft] retaining wall maintenance, accident damages (non-recoverable, railway crossing maintenance, traffic control, and tree maintenance/forestry. 6.2 In the event that the maintenance activities listed in section 6.1 of this MOU includes a maintenance activity for which the Town/City is listed as an exempted contractor within the CMS, the Town/City agrees to waive the exempted contractor status therein and to perform this work. EMERGENCY MAINTENANCE Section 3.8 of the Agreement is to be read as replaced with the following provision: BUDGET & PAYMENT When the Town becomes aware through a complaint from the public, Routine Road Patrol, day-to-day operations, observation or any other means of a condition that unduly affects public safety, the Town/City shall perform Emergency Maintenance. Emergency Maintenance may be temporary in nature. Upon completing Emergency Maintenance, the Town/City shall contact the Region to notify the Region that Emergency Maintenance has been performed. The Town/City shall be reimbursed for the costs incurred to perform the Emergency Maintenance on a Costs Plus basis provided that such Emergency Maintenance is not also Inclusive Routine Maintenance where, in such an event, no payment is made for those particular items of Emergency Maintenance. Article VI of the Agreement is to be read so as to accord with the budget and payment provisions set out in this MOU. The Region s 2017 budget for the activities included as Inclusive Routine Maintenance, divided by the number of lane kilometres as stated in the most recent Halton Road Needs Study results in the initial operating cost factor for each Local Municipality to perform the Inclusive Routine Maintenance and shall be referred to as the "Cost Per Lane Kilometre" for such activities. The Cost Per Lane Kilometre is used to determine an annual lump sum total that will be billed at the end of each calendar month in a prorated amount for the month within which Maintenance Services have been provided, identified in the amount on the chart below: -5-
15 [Draft] Maintained Lane Kilometres ("KM" Cost Per Lane Kilometre ($/lane KM Annual Lump Sum Total Monthly Prorated Invoice Invoice Amount Town of Milton 374 $ 1,193* $ 446,182 $ 37,182 *Note that 2017 CPI of 1.5% has been added into this amount For clarity, the Cost Per Lane Kilometer and the associated annual lump sum total cover all costs for Inclusive Routine Maintenance activities performed by the Town, inclusive of administrative fees and taxes, and does not include costs for Costs Plus activities. The Cost Per Lane Kilometre payable to the Town will increase each year from January 1 at the rate of inflation as determined by reference to the consumer price index (Ontario, all-items for the preceding year. Additionally, the Region and the Town agree to negotiate in good faith to incorporate into the Cost Per Lane Kilometre any change to the Maintenance Services for Regional Roads as a result of Regional capital works (i.e. lane expansion, legislative changes, or other Regional initiatives. The Town will be responsible for budget control. Any and all surplus of funds paid for Inclusive Routine Maintenance activities under this MOU will be retained by the Town. The Region and the Town/City agree to utilize the Region s annual Road Needs Study in order to establish the quantity of maintained lane kilometres to be used in the calculation of the Cost Per Lane Kilometre. PAYMENT FOR CMS WORK ASSIGNED BY THE REGION Regardless of the Town s obligations to perform Routine Road Patrol of Regional Roads and to perform repairs as required, the Region reserves the right to issue Work Orders and reminders in respect thereof to the City/Town as is deemed necessary as contemplated in section 4.2 of this MOU. Payment for this work will be determined based on the nature of the work as follows: (a (b should the Work Order pertain to Inclusive Routine Maintenance activities, then there is no additional payment for this work; and all other Work Orders will be paid on a Costs Plus basis. -6-
16 [Draft] INTERPRETATION The recitals above form an integral part of this MOU. Where the terms of this MOU are in conflict with the Agreement, the terms of this MOU shall govern. [Remainder of page intentionally blank. Signature page follows] -7-
17 [Draft] IN WITNESS WHEREOF the parties have caused this MOU to be executed by their respective officers who are duly authorized, as of the date first above written. SIGNED, SEALED & DELIVERED This day of 2018, at the Town of Oakville, Province of Ontario This day of 2018, at the of, Province of Ontario THE REGIONAL MUNICIPALITY OF HALTON Per Jim Harnum Commissioner of Public Works THE CORPORATION OF THE TOWN OF MILTON Per Per Mayor Gordon A. Krantz Troy McHarg, Town Clerk -8-
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