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
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.
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.
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.
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.
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.
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.
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.
Staff will initiate the RFP process and report back to Council with the results before proceeding to the Stage 4 – Negotiations.