Report
to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels
et du développement économique
and / et
and Council / et au Conseil
14 June 2005 / le 14 juin 2005
Submitted by/Soumis par : Ned Lathrop, Deputy City Manager/Directeur
municipal adjoint,
Planning and Growth Management/Urbanisme et Gestion de la croissance
Contact
Person/Personne ressource : Réjean Chartrand, Director, Economic Development
and Strategic Projects
Economic Development and Strategic
Projects/Développement économique et Projets stratégiques
(613) 580-2424 x21696,
Rejean.Chartrand@ottawa.ca
Contact Person/Personne ressource : Rob
Mackay, Manager, Strategic Projects
Economic Development and Strategic
Projects/Développement économique et Projets stratégiques
(613) 580-2424 x22632, Rob.Mackay@ottawa.ca
REPORT RECOMMENDATIONS
That the Corporate Services and Economic
Development Committee recommend Council:
1.
Authorize
staff to request proposals for the provision of a new ice surface with
expansion capacity, soccer field and a paramedic post on the Kinburn Client
Service Centre site from the firms identified on the short list in this report;
and
2. Approve
the Request for Proposal (RFP) Framework presented in this report.
RECOMMANDATIONS DU RAPPORT
Que le Comité des services organisationnels et
du développement économique (CSODE) recommande au conseil :
1. d’autoriser le personnel à faire une demande de propositions pour l’approvisionnement d’une nouvelle surface de glace à capacité d’expansion, un terrain de soccer et un poste du Service paramédic au Centre du service à la clientèle de Kinburn à partir des compagnies cernées sur la liste restreinte de ce rapport;
2. d’approuver le cadre de la demande de propositions présenté dans le présent rapport.
BACKGROUND
On 15 December 2004, Council directed staff to
proceed with the development of the P3 framework for the construction and
operation of an arena facility at the Kinburn Client Service Centre site. Stage 1, an Expression of Interest was held
in January 2005. On 9 March 2005,
Council directed staff to proceed to Stage 2, the initiation of a Request for
Qualifications (RFQ).
The RFQ was posted on MERX 14 April 2005 and
closed on 12 May 2005.
This report provides the results of the evaluation of responses to the RFQ and the RFP framework for a successful partnership.
DISCUSSION
As noted in the previous report to Council,
dated 28 February 2005, a re-zoning process was initiated to add an arena as a
permitted use on the Kinburn Client Service Centre site. As part of this process, a community
information and comment session was held on 5 April 2005 at the Kinburn Client
Service Centre in addition to the required notice of application. No objections were raised at the meeting.
The recommendation to change the zoning from
RU-Rural to I-5 Institutional was approved by Council 8 June 2005.
As the RFQ was being developed, the need to
find a new location for the development of a paramedic post in Ward 5 was
identified and after review, it was decided to include this facility in the
requirements for this project.
The
selection of a competent private sector partner to assist in the delivery of a
public service is one of the key elements in the P3 process. To ensure that the selection is conducted in
a rigorous and prudent manner there are several stages to the process, with
staff reporting back to Council the results at each stage and seeking approval
to proceed to the next stage.
The process used on this project was an
Expression of Interest (Stage 1) followed by Stage 2 – Request for
Qualifications. The purpose of this
stage was for interested parties to qualify their team and demonstrate to the
City that their team has the knowledge, ability, and financial capacity to
deliver an acceptable solution which meets the City’s expressed needs.
The third stage will be the Request for
Proposal (RFP) where the teams that have qualified through the RFQ are invited
to submit a detailed business case of their proposal and to indicate with more
detail, how their proposal best meets the City’s goals.
Following a detailed evaluation of the
proposals, a partner will be recommended for approval to Council and once
approved, Negotiations (Stage 4) will commence to develop a partnership
agreement that satisfies the interest of both the City and the private sector
partner. The framework of that
negotiated agreement will be brought before Council for approval. Following the
execution of the partnership agreement, the delivery of the project will be
initiated in accordance with the terms and conditions of the negotiated
agreement.
Staff from the Supply Management Division led
the RFQ process. An external Fairness
Commissioner was hired to oversee each step of the process ensuring that the
documents, processes and tools used were fair, open and transparent.
Four submissions were received in response to
the RFQ. These were evaluated based on
criteria that were included in the RFQ document and therefore available to each
respondent. Staff from the Supply
Management Division established the criteria with the assistance of a number of
internal staff from various departments.
An evaluation team consisting of two
representatives from Community and Protective Services, two from Planning and
Growth Management, and one from the private sector was set up to carry out the
evaluation of the submissions under the leadership of Supply Management
Division and in the presence of the Fairness Commissioner.
The criteria set up for the evaluation of the
submissions consisted of a number of mandated and rated criteria. In order to be considered for receipt of the
RFP invitation, Respondents had to first meet all the Mandatory Criteria then
obtain a minimum passing grade of 75% on the Criteria Subject to Point
Rating. Submissions were rated by
consensus and the rating was based solely on the material provided in the
submission.
Once all the submissions were evaluated, the
Fairness Commissioner conducted a consistency review with the evaluation team
to ensure that each submission had been evaluated consistently in relation to
others. Staff from Financial Services reviewed the financial portion of the
submissions and provided their assessment in the presence of the Fairness
Commissioner and staff from Supply Management and Planning &Growth
Management.
Based on this rigorous process, the following
teams have been qualified to be short listed for Stage 3 – RFP:
1)
Capital
Sports Management (with Ottawa Senators Hockey Club & Morley Hoppner Group)
2)
GENIVAR
(with Les Développements Koebra, Barry J. Hobin & Associates, Architects
& SERCO)
It is important to note that inviting these
respondents to participate in the RFP stage does not guarantee a response. It is possible that for any number of
reasons, some may decide not to pursue this opportunity. Conversely, there is
no guarantee that the City will enter into a partnership with any of the
respondents who submits a proposal.
While the City is committed to the process and has full expectations to
enter into a successful partnership, it will only proceed if there is a strong
sense of a win-win situation for both the City and the private sector partner.
Framework for Development of Stage 3
– RFP
This public-private partnership is based on the
premise that the private sector partner will build a single pad arena with
capacity to expand to a twin pad, a paramedic post and a soccer field on the
Kinburn Client Service Centre site. In
addition, the expectation is that the partner will leverage the excess space in
the existing client service center as well as the newly built facilities to
maximize revenue.
Based on the above, the framework for the RFP
will be developed in accordance with the following:
1)
The
subject site is to be developed as a community hub and offer a range of
recreational and community services to the citizens of West Carleton throughout
the year. The P3 partner is to optimize
the use of the Kinburn Client Service Centre through the marketing and leasing
of available space.
2)
The
City will retain ownership of the land and all existing and proposed buildings
on the site.
3)
The
preferred partner will have the capability and capacity to undertake this
long-term relationship with the City and not unduly place the City in an
adverse situation because of failure to deliver. The successful proponent must demonstrate a public service
attitude and philosophy that includes concern for public accountability and
accessibility.
4)
Given
the limited ability to generate revenue on this rural site, the City will
secure and service the long-term financing for the project with an expected
contribution from the P3 partner to partially offset these costs.
5)
The
City has undertaken analysis of the water, septic and storm water services for
the site and will maintain ownership of these services. The P3 partner will design, build, operate,
service and maintain these systems, adhering to all legislative requirements.
6)
The
City will purchase defined blocks of ice time at a negotiated rate and use it
in accordance with the City’s Arena Allocation Policy. The Parks & Recreation Branch of the
Community and Protective Services Department will undertake such allocations. User groups with permitted City hours within
the new facility will be charged the same amount as in any other City of Ottawa
arena facility.
7)
The P3
partner will be free to sell the balance of ice time to user groups at market
rates.
8)
The P3
partner will be required to use his design / build expertise to lower the cost
of development and ensure the buildings can be operated with energy efficiency
and minimizing long-term environmental impacts. All legislative requirements
related to construction and operations are to be met.
9)
The P3
partner will ensure that the design of all new buildings and structures are
complementary to the existing Kinburn Client Service Centre.
10)
The P3
partner will maintain, operate all facilities and secure compatible tenants and
revenue sources for the arena complex, soccer field, and the client service
centre. The City will continue to
require a portion of the client service centre for City programs and
services. All operations are expected
to be self-sustaining with a reasonable surplus directed towards debt repayment
and life cycle renewal.
The purpose of the RFP is to obtain specific
information about the Respondents’ proposed concept and validate the
feasibility of the concept from a financial, operational and “ best fit”
perspective, leading to the selection of a “preferred proponent” for approval
by Council.
The following elements will form the RFP
criteria:
1)
Business
Plan
a)
Capital
Costs
b)
Five
year business pro forma
c)
Marketing
Concept
2)
Design,
Development and Construction Plans
a)
Site
plan showing building layout
b)
Design
plan compatible with existing structure
c)
Design
and Construction scheduling
d)
Plan
for addressing sewer, water and storm water systems
3)
Operations
and Management Plans
a)
Service
and Program Plan
b)
Operating
Structure and Management Approach
c)
Building Systems Maintenance and Life-cycle
Management Approach
d)
Quality
Assurances in Customer Service and Community Relations
4)
Value
Added Elements
The evaluation of the proposals will include
the use of a public sector comparator (PSC).
The PSC is a detailed analysis of the City’s cost to provide and deliver
the capital program as well as the ongoing operating, maintenance and life
cycle renewal costs. In developing the
PSC the City will include all costs, including debt servicing, life cycle and
administration costs.
The Strategic Project division in conjunction
with Supply Management division has initiated the RFP process and subject to
Council’s approval of this report, the RFP will be finalized and released to
the short listed respondents. This is
anticipated to take place in late July 2005.
The results of the RFP will be reported on
prior to the next step of negotiations. It is expected that this report will
come forward in November 2005.
ENVIRONMENTAL IMPLICATIONS
The required changes to the septic, water and storm water systems will be conducted in accordance with all prevailing codes, regulations, directives, orders and legislation issued or enacted by those agencies having authority.
RURAL IMPLICATIONS
The development of the Kinburn Client Service
Centre site as an all-season community hub will benefit the residents of West
Carleton who will be able to access new recreational and commercial
services. The construction of the
paramedic post will improve the response times in West Carleton. There will be a specific enhancement of a ~
5 minute reduction in response time to the Constance Bay area without
compromising response times in the Galetta and Fitzroy Harbour areas.
CONSULTATION
A public meeting will be held in the community of West Carleton with the preferred private sector partner prior to the completion of the final negotiations stage.
FINANCIAL IMPLICATIONS
The capital amounts for this project and
ongoing operations of the Kinburn Client Service Centre were identified in the
2005 capital & operating budgets, the Long Range Financial Plan and the
2006-2014 Capital Forecast. The construction of a paramedic post in West
Carleton ward has an approved capital budget in 2005 of $100,000 and request
for $550,000 in the long-range financial plan.
The construction of the arena, as previously noted in the report to
Council dated 28 February 2005, has an expected capital shortfall in the range
of $2.4M to $4.3M.
The anticipated revenues from the arena and
rental of other facilities are not expected to be sufficient to cover all
capital, operating and maintenance costs.
The City will issue financing to cover the capital costs net of any
development charges with the debt servicing costs being made with contributions
from the private sector partner and from operating budgets of Parks and
Recreation. The City will also be negotiating a rate to be paid to the private
sector partner for the blocks of ice time to meet our user group allocations.
The total impact on the future operating budgets and required debt authority is subject to information provided by the Proponents at the RFP stage and the final negotiations.
DISPOSITION
Staff will initiate the RFP process and report back to Council with the results before proceeding to the Stage 4 – Negotiations.