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2008/05/12 . - " NINT.~I:M~E~TING, Monday, May 1 2Q48 . ~:oo p.m. . . _ . pity H~:II, Corr~mltt~ee~~~~F~oom #2A & ,B . 1 } Approval of the Apri128, 2oD8 Crommunity Services Minutes. 2) REPORTS: ~ STAFF ~DNTA~T: . a} Prese~~ta~on:~ People: Mover Project Update " Dare 5ch~ram :Urban, & Erwiranmen~al Management Inc. . . ~ CAC)-2408-~?2 People Moyer Project Update ~ ~ ~ John :MacDonald " NEUV, ~BUS1`I~~ESS: ~ . 4~~ ADJ4`U R~fM ENT: ~ , ~ ; . , a} Resolution to go into Closed ll/leeting. May 12, 2008 CAO-2008-02 ~~~{~~.n., Gity Hatl 4310 Queen Street P.©. Box 1023 n~~ f . Chief Administrative Officer ~ ~ ~ Niagara Falls, ON L2E 6X5 ~ ~ ' web site: www.niagarafaiis.ca {905} 356-7521 Ext. 5100 Fax: {905) 374-3557 jmacdonald a~7r niag~trafalls.ca Councillor Carolynn loanonni, Chair and Members of the Community Services Committee City of Niagara Falls, Ontario Members: Re: CAO-2008-02 People Mover Project Update RECQMMENDATIC?N: That Council authorizes staff to continue working with the People Mover Project to ,i.Ln1,v~e~ stigc,ajte~t(h~e feasibility of a phased approach t1o providin RFP2.~^ ~,~pp ` R < <LL~ ^~`~TT' lll~lP.~-~~ ~ ~ 0..' t'c~n ~ 1 C0."T~ b fL,$ vim' ~ ~ - T ! (~bGtG~1 a~Y w~- Q'- .p BACKGRaUND ~ No C~a~de~tstor ova e..~~ts-h~ ~a~~~iedL ,~ro P°~~'s• 5~ Gity Council will recall that the Niagara Falls Transportation Master Plan Study, September 1998, recommended a People Mover System to manage traffic congestion in the Primary Tourist Area. In order to implement that recommendation, with financial support from Falls Management Company (FMC} based on their commitment as part of their successful bid ~ far the permanent casino approved by 4LG, a number of significant milestones have been completed, including: • The establishment of an organizational Structure. This Structure would include representatives from the City, NPC, ~LG and FMC; • The establishment of a Stakeholders Liaison Committee. This Committee would include representatives from the four (4} tourism BIA's; Niagara Falls Tourism; Chamber of Commerce; Downtown Board of Management; Niagara Transit; and the Public; • Official Plan Approval; • Environmental .Assessment Approval; May 12, 2008 2 CAO-2008-02 • A Reciprocal Agreement between the City and OLG for a commitment of $15 million for the Project. Of this, $7.5 million was allocated toward the acquisition of the railway lands. Funding for the ongoing People Mover Project has been supported by the remaining balance. • Acquisition of the CN/CP railway lands - 2/3 of the cost of which ($22.5 million) was paid for by FMC and OLG contributions; • Successful Federal Funding application underthe Canada Strategic Infrastructure Fund Program, resulting in an allocation to the Project of up to $25 million, subject to conditions; • Various key studies including a Ridership and Revenue Study supporting the Project's viability. Possible Phasing of the Project Since March 2006, the Consultant Team, in consultation with the City, NPC, FMC and OLG, has worked to furtherdefine the alignment, technology and financialfeasibilityofthe system with a view to complete the RFP2 and Concession Agreement for release to the three qualified bidders by the end of 2007. Although a fully looped system is the preferred approach by all partners in the Project, it is generally concluded by the Consultant Team that a fully looped system is a longer term goal for the Project. The issues that require resolution relative to the implementation of a fully Pooped system are problematic for the reasons specified in the attached letter from the Consultant Team. Therefore, the Consultant Team recommends it may be desirable and in the best interests of the partners to pursue a phased approach to the implementation of the People Mover System along the top of the escarpment in the short term with a view to a fully looped system being a longer term goal. Council will recall, when considering a public private partnership arrangement, that both the RFP1 and the approved application for Federal funding included the options of a fully looped at-grade or largely at grade system and a phased implementation of the system. Advantages of a Phased implementation Approach There are several advantages to proceeding with implementation of the first phase of the Project: I. There is a much higher likelihood that the private sector will respond to a more focused and specific Phase One Project; II. Technical issues for this route are not considered significant; III. Provincial EA approval has been received for alignment at the top of the Escarpment. Amendments to the approval should not be a significant issue; May 12, 2008 3 CAO-2008-02 IV. Governance has been simplified, as the "owner" will only be the City of Niagara Falls; V. There are no rights-of-way issues; VI. Once the first phase becomes established, accepted and successful, future expansion of the system is possible and situation changes/issues can be addressed; VII. The recent y completed Ridership update by URS indicates that there may be sufficient ridership to support this alignment although further revenue and cost analysis is required by the Consultant Team to further confirm the potential Project viability; VIII. The Federal contribution to the Project of up to $25 million will not be affected by the decision; and IX. A phased approach will provide the City with an opportunity to explore new options that may exist with the new Convention Centre. The Consultant Team has advised that a phased approach, along the top of the escarpment, can be implemented within a reasonable schedule and budget. Most impo~ Cant, a phased approach poses considerably less risk to the owners and is more likely to be favourably responded to by the private sector. Technical Advisory Committee Supports an Assessment of a Phased Approach The Consultant Team met on July 9, 2007 with the Steering Committee (City, NPC, OLG and FMC) to provide an update on the Project, discuss the technical, operational and legal li barriers to the development of a fully looped People Mover System at this time and outline ~ the benefits of a phased implementation approach. It was agreed by all parties that a phased approach would allow the City to finalize RFP2 in a timely fashion and allow the Project to proceed in a manner that benefits all stakeholders. The Consultant Team was requested to provide a proposed budget and work schedule to complete the technical, legal and financial assessments required to assess the feasibility of a .phased approach. This Proposal was provided to OLG and FMC in August 2007, along with a request to OLG to consider the costs to undertake an assessment of the phased approach. On November 27, 2007, OLG requested that a meeting be arranged with the Steering Committee in order to provide specific direction to the Consultant Team regarding a work plan for fhe phased approach. Several meetings took .place in January 2008, resulting in a Steering Committee meeting on March 28, 2008. A motion was passed, at that time, supporting. a "phased implementation approach". May 12, 2008 4 CAO-2008-02 Direction was given to request support/approval for the approach from City Council and the Niagara Parks Commission at their meetings in May 2008. r~. Respectfully submitted: f E' Jofhfi MacDonald, Chief Administrative Officer JM:kk f f Attachment Patricia Decker . UFt~fiiV t~FViG:.,.PV~it tB l...~. ~_.F...: L, Ls<t._2~4r ~ r z~ i "''i , ° i i i f r January 23 2007 May 30, 2007 (revised & updated) ~~~r,"~~'€~`" Mr. John MacDonald Mr. Karl Gagesch Chief Administrative Off cer Vice President, Development City of Niagara Falls Ontario Lottery and Gaming r~:~~n-s Box 1023 4120 Yonge Street, Suite 420 o~~~L~~~~Yh~! 4310 Queen Street Toronto ON M2P 2B 8 Niagara Falls, ON L2E 2K9 Mr. John Kernahan Mr. Drew Chamberlain General Manager ~~~Z~„~~,~,,~~~_ Falls Management Company Niagara Parks Commission Box 300 Box 150 Niagara Falls, ON L2E 6T3 ~~~,~w~~~=~~-3i Niagara Falls, ON L2E 6T2 Reference: People Mover Project -Phased Implementation and Scope of RFP2 ~s~x ~ws;`~ -~~~~__~~~~-n~ At a January 1 lt~', 2007 Technical Advisory Committee (TAC) Meeting the phased implementation of the people mover system was discussed. Following, the Project ',t~~~~~~- ~~r~~~xr~~c~~ Team summarized, in a letter dated January 23, 2007, the considerations in support of a phased implementation approach having regard to: • Background ~t Clair Technical Issues Suite ' Governance ia~~ra l"aii~, Gil Private Sector Input C.~jn~lra • Advantages of a Phased Implementation Approach '~~35~; Li 4 Comments on the January 23rd letter were received from the NPC dated February 13, 2007 which requested several clarifications and suggested revisions. OLG provided a ` letter to the Project Team dated February 12, 2007 and to Mr. John MacDonald dated ' February 9, 2007 offering its position on the January 23rd letter and from a subsequent briefing meeting held on February 1, 2007. The comments from NPC and OLG were considered by the Project Team and the January 23rd letter has been revised and updated to respond to those comments which are included as Attachment "A" for reference. ~ Weir Foulds, under separate cover in a letter dated January 18, 2007, identified and explained certain legal issues relating to RFP2. Comments dated January 25, 2007 were offered by NPC on the Weir Foulds letter. Weir Foulds provided a response dated May 31, 2007. For easy referral, the Weir Foulds letter of January 18, 2007, the NPC comments dated January 25, 2007, and Weir Foulds' May 31, 2007 response to the NPC comments are provided as Attachment "B". Peo,~le 1t~over Project ~..~N~~_~...t~~.°~:.~i...~~:a,__~3~,l-fit ~ ...33°~r ~ Page 1 of 7 It is the Project Team's view that a fully looped system using a single technology is the preferred alignment and would best serve the needs of the tourism industry. However, there are many issues that must be addressed if the request for proposal invites responses to implement a fully looped system. Resolution of these issues will indefinitely delay the release of a final RFP. Therefore it may be desirable and in the best interests of the Owners to pursue a phased approach to implementation. A phased system would begin at approximately Bender Hill and terminate at the north side of Murray Hill with a pedestrian link through the Fallsview Casino to the NPC incline railway. An RFP describing this alignment and requesting proposals would be issued by the City of Niagara Falls as the proponent. Back round The Project Team and TAC have considered the strategy of a phased approach to implementation for some time. Our most recent work program and budget (May 17, 2006) was focused on "scoping" the project with the emphasis on defining the project and the alignment. Discussions on the "base bid" and "phasing options" were introduced to address concerns that a fully looped integrated system and the technical issues and other related conditions would result in a project that was not biddable. These issues were discussed in considerable detail with TAC at the meeting of September 25, 2006. A phased approach beginning with the "top of the escarpment" route was included in both the RFQ (March 2003) and the RFP (December 2004) recognizing the significance of resolving the technical issues within a reasonable schedule and at a cost that would result in a financially feasible and sustainable system. The first phase top of the escarpment is also the basis of the application and subsequent decision by the Federal government to provide up to $25 million for the project. Technical Issues The implementation of the people mover system continues to have several unresolved and significant technical constraints that, in our opinion, affect the viability of the project as a private sector initiative. Constraints considered significant include technical issues that will involve high capital costs, inefficient system operations and a lengthy approvals and consultation process to resolve. Considering the specific segments of the fully looped alignment, the most significant, yet to be resolved, technical issues are as follows. The comments are based upon a fully looped system with a technology yet to be determined, except for that section between Rapids View Parking Lot and Maid of the Mist where the NPC requirement for a vintage rail technology has been identified as the preferred technology by NPC. The first phase of the NPC system would include the vintage rail technology from Table Rock to the Maid of the Mist on a single track and two-way traffic. Extension of the first phase would be dependent on the timing of the development by NPC of Canadian Niagara Power and Toronto Power. • From Bender Hill south to the north side of Murray Street within the dedicated r-o-w - there are no significant irresolvable technical issues for this approximately 1.75 km route. People Mover Project Page 2 of 7 Technical considerations include the location of people mover stations along the route, crossing at the Clifton Hill intersection and potential vehicle turning at each terminus (dependent on selected technology). This alignment was identified and evaluated as part of the provincial environmental assessment (approved May 2000) and there are not likely to be significant provincial EA issues with this alignment. Canadian Environmental Assessment Act (CEAA} approval will be required because of the Federal funding allocated to the project. • From the north side of Murray Hill to and through the Fallsview Casino and south to the NPC incline railway -significant technical issues include the crossing of Murray Street at an appropriate elevation to match the P2 Parking level at the Casino and the major renovations and logistics within the Casino to accommodate people mover vehicles and construct a station that is integrated within the Casino building and results in minimal operational disruption during construction and system operation. The estimated costs to resolve these issues are considerable and, in the Project Team's view, may not represent a cost responsibility that the private sector will accept. In addition, construction within the Casino could result in some operational impacts within the building again, an impact that the private sector, OLG and FMC will want to avoid. • From NPC's incline railway south to Marineland Parkway along the dedicated r-o-w - the most southerly part of the r-o-w is still being used by the railway to serve industrial customers. Transport Canada regulations would require the development of a physical barrier separating people mover vehicles froth heavy rail vehicles or the operation of a people mover in a separate r-o-w. • From Marineland Parkway south to the NPC's Rapidsview parking lot - a preferred alignment and r-o-w has not been established for this section following a decision by the Steering Committee to not travel through Marineland. The preferred and most acceptable alignment will require widening of Portage Road and the acquisition of additional property now owned by Marineland. An environmental assessment process and approval is required to fnalize the location of the preferred alignment. An EA for the widening of Marineland Parkway has been initiated by Niagara Region. However, the Region's EA Terms of Reference do not include consideration of a people mover r-o-w. • Through Rapidsview parking lot east to the NPC Parkway -there are no significant technical issues through the NPC owned property. NPC will assist in defining the exact alignment and have agreed to provide property for a vehicle maintenance facility but only if a rail based system is selected. If a non-rail based system was selected, then another location for a maintenance facility must be identified. • From Rapidsview parking lot north to Table Rock operating in the curb lanes of northbound and southbound traffic -The People Mover would operate in mixed traffic for this section for an interim period if the vintage rail system is initially developed only for the Table Rock to Maid of the Mist section. The ultimate objective is to provide continuous service throughout QVP once the Canadian Niagara Power and Toronto Power projects are developed. The interim operations in mixed traffic is the only significant technical issue People Mover Project Page 3 of 7 along this alignment, assuming that the bridges are structurally adequate. The project team has not assessed any structural data for these bridges. A further note is that an amendment to the approved provincial EA will be necessary because the alignment evaluated as part of the EA process has been changed. The EA amendment process will be necessary to amend the alignment throughout QVP. • From Table Rock north to the Maid of the Mist through QVP on the dedicated northbound railway using a vintage rail technology as described in NPC's QVP Master Plan -the significant issue for this link is the potential that the NPC's requirement for a vintage rail system between Table Rock and Maid of the Mist may result in two technologies being recommended or necessary to complete the Ioop -one for this section (the vintage rail) and another potentially for the rest of the system. This also means that a way of consolidating two-way traffic south of Table Rock to a single lane must be determined and that transfers between the two systems as well as the increased pedestrian traffic must be managed. Operations and ridership will be negatively impacted, possibly to the extent that the project is not feasible. This has effectively been confirmed by the most recent ridership work completed by the Project Team. A summary of the ridership update is included as Attachment "C". It is noted that within Queen Victoria Park (QVP) that NPC originally proposed that both northbound lanes be dedicated for people mover use. The proposed r-o-w was reduced to only the curb lane between Rapidsview and Maid of the Mist based on concerns expressed by many tourism stakeholders. • From Maid of the Mist south on Falls Avenue and west on Bender Hill all through mixed traffic to connect to the dedicated rail r-o-w -this section of the route presents several significant technical problems mainly because the system would operate within mixed traffic, which is also not consistent with the original concept for the system. Several existing traffic problems have been identified in this section of the alignment that will impact a people mover operating at-grade and within mixed traffic. These include lane restrictions and traffic congestion due to bus and service vehicle parking in the curb lanes, unrestricted turning movements and vehicle back-ups from entrances and driveways servicing commercial business and the Rainbow Bridge. There are solutions to some of these existing problems, including the widening of Falls Avenue into QVP and traff c signalization at the intersection of Falls Avenue and River Road. Both measures are not compatible with the QVP Master Plan and are not supported by NPC. These issues have been investigated in detail by the Project Team and because of the difficulty in finding acceptable solutions it led to the development in 2004 of the proposed "horseshoe" alternative which was not found to be acceptable to the tourism industry. The recommended operational changes on Falls Avenue have not been implemented and there are questions whether these improvements will be sufficient to overcome the technical and operational issues of operating a people mover system at-grade and in mixed traffic with other existing unresolved traffic issues along Clifton Hill and Falls Avenue to Bender Hill. The Project Team accepts that in time and at additional and considerable capita] costs most of the technical issues can be addressed in some manner. However, it is not recommended that an RFP be developed that includes significant technical issues that have not been resolved by the Owners. People Mover Project Page 4 of 7 4 Governance Project governance has been described as being internal (i.e. between the "owners") and external (i.e. the business relationship with the private partner). The internal governance issues have not been resolved and will take considerable time and an extended process involving the process to address. The process will require the input and ultimately the approval of the Province for the NPC to participate. It is the Project Team's recommendation that RFP2 not be released to the private sector until all internal governance issues are resolved. An important step in addressing the business relationship with the private sector (i.e. external governance) is to clearly establish the expectations of the Owners. The Project Team has worked closely with the Owners to identify conditions of participation. Throughout the process, NPC has maintained that the project cannot financially impact its operations and in November 2006 completed its "Transportation Contribution Guarantee" for inclusion in RFP2. The "guarantee" establishes levels of financial risk that cannot be directly affected and managed by the private sector. It materially affects the likelihood that RFP2 is biddable based on our discussions with the private bidders. A copy of NPC's "Transportation Contribution Guarantee" is provided in Attachment "D" to this letter. Operational Issues There are several operational issues that will affect the likelihood that the private sector will respond to the RFP that includes a fully looped system issued by the City and NPC. The more significant operational issues are: • Responsibility for and potential revenue sharing for parking operations, including the need to address the "Transportation Contribution Guarantee". • Patron transfers between systems (vintage rail and the remainder of the system). • Patron force-offs within the system. The most recent ridership work conducted by the Project Team conf rms that the vintage rail component of the system will have a significant impact on ridership on the system as a result of operational constraints -the single track operation, patron transfers and force-offs at stations. Private Sector Input The Project Team and the three private bidders have discussed the project and their "conditions of participation" several times. Our Project Team has also been involved in other projects where we have participated in assessing the market relevance of a project and developing responses to RFP's. In considering a response to a people mover RFP the private sector has advised that: People Mover Project Page S of 7 • The project must be defined in full detail. The RFP cannot include unresolved matters for the bidders to address. This will raise the risk to levels unacceptable to bidders. (i.e. the technical issues that have yet to be resolved such as the cost of accessing the Fallsview Casino will not be acceptable to the bidders). • There must be a reasonable level of risk sharing, bidders will not accept risks it cannot manage (i.e. ridership and revenue guarantees, Transportation Contribution Guarantee). • The decision making process (including the right of veto), roles and responsibilities and the operational management organization must be clearly defined. This includes defining the "public entity" (i.e. internal governance) and the level of control that will be maintained including protection from competition and clear guidelines on system expansion and related business opportunities. • Further, ridership and revenue assessment must be completed to a high level of reliability (investment grade) once the system technology and route have been defined and agreed to by the Owners. It is the Project Team's view that the private sector will view the issues with a fully looped integrated system too difficult, costly and expose them to unacceptable risks to make a responsive bid to RFP2. The Project Team also advises that the unresolved issues would expose the Owners to potential risks, if it is decided to continue forward with a looped system under the current conditions. It is the Project Team's conclusion that the private sector expectations could be addressed if a phased implementation approach was undertaken. Advantages of a Phased Implementation A rpp oath There are several advantages to proceeding with implementation of the first phase of the project (i.e. Bender Hill to Murray Street) issued by the City of Niagara Falls: • There is a much higher likelihood that the private sector will respond to a more focused and specific Phase One project. • Technical issues for this route are not considered significant. • Provincial EA approval has been received for this alignment and is not expected to be an issue. This approval should also expedite the Federal CEAA approvals process. • Governance is much simplified as the "owner" will only be the City of Niagara Falls. • There are no right-of--way issues. • Future expansion of the system is possible as situations change, issues are addressed and the first phase becomes established, accepted and successful. • The recently completed ridership update by URS indicates that there may be sufficient ridership to support this alignment although further revenue and cost analysis is required by the Project Team to further confirm the potential project viability. People Mover Project Page 6 of 7 • • The Federal contribution to the project of up to $25 million will not be affected by the decision. In Conclusion... The Project Team has advised TAC that the phased implementation approach represents a project that can be implemented within a reasonable schedule and budget. Most importantly, the project as described at the January 11th, 2007 TAC meeting represents considerably less risk to the Owners and is more likely to be responded to by the private sector. It is important to move forward with the project and suggest that TAC takes a position before proceeding further and seeking the direction from City Council, the Niagara Parks Commission and the Boards of OLG and FMC. The Project Team is available to discuss these matters further or provide any further information that may be required. Yours very truly, David Schram Copies: E. Lustig D. Allingham B. MacLellaniD. Ferguson C. Watson Attachments: • Attachment "A" • Attachment "B" • Attachment "C" • Attachment "D" People Mover Project Page 7 of 7 ~~r s~,s3,! . ~ tY g , The Ci of Nia ara FaIIs Ontario Resolution No. Moved by Seconded by WHEREAS all meetings of Council are to be open to the public; and WHEREAS the only time a meeting or part of a meeting maybe closed to the public if the subject matter falls under one of the exceptions under s. 239(2) of the Municipal Act, 2001. THEREFORE BE IT RESOLVED THAT on May 12, 2008 Niagara Falls Council will go into a closed meeting to consider a matter that falls under the subject matter of 239(2)(d) of the Municipal Act, 2001, labour relations, to deal with personnel issues. AND The Seal of the Corporation be hereto affixed. DEAN IORFIDA R. T. (TED) SALCI CITY CLERK MAYOR