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HomeMy WebLinkAboutADMIN-5-97A CORPORATION OF THE MUNICIPALITY OF CLARINGTON e REPORT Meeting: General Purpose and Administration Committee Date: Monday, February 17 1997 Report #: ~~.. §i4e #: Subject: RFP96-2, COURTICE COMML7NITY COMPLEX SECTION 1 - MANAGEMENT SERVICES Recommendations: File# ~~•~-0 Res. # ~~A ~-Q7 By-Law # It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report ADMIN. 5 - 97 be received; 2. THAT the recommendations contained in the Report of the Committee established to review management services for the Courtice Community Centre be approved as follows: THAT Recommendations 1, 2 and 3 be approved; and THAT Recommendations 4, 5, 6 and 7 be referred back to the Chief Administrative Officer for further discussions with the Treasurer and appropriate staff, and report back to Council at an early date. Respectfully submitted, ~~~~~~`~ W. H. Stockwell, Chief Administrative Officer WHS:nof att. eeP. °®`°~.€eE THE CORPORATION OF THE MUNICII'ALITY OF CLARINGTON REPORT = CHIEF ADMINISTRATIVE OFFICER File# _ Dater MONDAY, FEBRUARY 17, 1997 Res.#_ By-Law # Report #: File #: Subject: RFP96-2, COURTICE COMMUNITY COMPLEX SECTION 1 - MANAGEMENT SERVICES Recommendat(ons: It is respectfully recommended that the Chief Administrative Officer recommends to Council the following: 1. THAT this Report be received; 2. THAT the proposal submitted by Serco Facilities Management Inc., Ottawa, Ontario, not be accepted; 3. THAT the municipal management submission be accepted and that staff operate the Courtice Community Complex adhering to the operating assumptions and budget included in the Department's proposed plan (as amended); 4. THAT the Municipality's Administration and Finance Departments establish operating and financial thresholds for the Courtice Community Complex, inclusive of mechanisms through which performance data will be collected and measured; 5. THAT the Municipality explore alternate management options for the Courtice Community Complex if the Complex does not perform in accordance with its operating and financial thresholds; 6. THAT performance be evaluated annually and that the decision to explore alternate management options be considered after 2'h years of operation; and 7. THAT the Municipality create a Corporate policy related to developing partnerships with private, not-for-profit, and other public agencies inclusive of supporting procedures and evaluation mechanisms. BACRGROIIND AND COMMENT: Request for Proposal RFP96-2, Courtice Community Complex, Section 1, Management Services, was publicly advertised with two private sector bids being submitted as follows: o.o. ° ® a ~.~„ PAGE 2 Recreation Services International (RSI), Ottawa, Ontario Year 1 -(pro-rated) $ 231,693.00 Ysar 2 $ 351,050.00 Year 3 $ 339,771.00 Year 4 $ 327,411.p0 Year 5 $ 313,907.00 TOTAL $1,563,832.00 NOTE: Revenue sharing program identified. Due to a Corporate Restructuring Program, this propDSal was withdrawn by R.S.I. on February 4, 1997. Serco Facilities Management Inc., Ottawa, Ontario Year 1 (does not appear to be pro-rated) $ 375,541..00 Year 2 $ 332,804.00 Year 3 $ 330,099.00 Year 4 $ 329,136.0.0 Year 5 $ 324,868.00 TOTAL $1,692,448.00 NOTE: Revenue sharing program identified The projected operating budget for the Community Services Department is summarized as follows: Year 1 $ 240,300.00 Year 2 $ 236,650.00 Year 3 $ 247,535.00. Year 4 $ 254,055.00 Year 5 $ 258,135.00 TOTAL $1,236,675.00 NOTE: Totals were adjusted to include $27,300.00' Management Fee. Schedule "A" attached provides further details. -- PAGE 3 ~ On October 15, 1996, Council approved that a consultant be retained to review and comment on the proposals submitted. The role of the consultant was to assist in the review of the financial implications -for each of the bids submitted, and to :provide objective comment .and comparisons to the overall operation of the Community Services Department. Subsequently, the JF Group, who have had substantial experience doing similar reviews, were retained. The JF Group provided assistance to the review committee, related to: • the development of evaluation criteria inclusive of a defensible and objective rating scale via which submissions could be evaluated; • the preparation of an assessment. - model incorporating weighted scoring mechanisms reflecting the Municipality's prioritise for_the Complex; and • involvement in, and strategic advice about the process of selecting the most appropriate operator The review committee consisted of: Larry Hannah, Councillor Joe Caruana, Director of .Community Services Fred Horvath, Property Manager Cynthia Mearns, Library Director Lou Ann Birkett, Purchasing Manager * as the staff submission would be considered as a possible management. alternative, the Director of Community Services participated in a non voting capacity only t PAGE.4 The attached report from the JF Group, marked Schedule."A" out inea the process, the evaluation of each of the submissions, and the subsequent recommendations of the committee. The. Treasurer has had an opportunity to review and discuss the financial component of the evaluation with the JF GXOUp and the Purchasing Manager. Reap ctf lly submitted, i Larry Hannah, Councillor F v MR, RRFA Pr/o~p//e~Jrty Manager f-Gv~--~ir~.v, , Lou Ann Birkett, C.P.P., A.M.C.T. Purchasing Manager .,_ Cynthia Mearns, Library Director MM*LB*ld THE MUNICIPALITY OF CLARINGTON COURTICE COMMUNITY COMPLEX MANAGEMENT SERVICES CONTRACT EVALUATION February 1997 FINAL REPORT Submitted by: THE JF GROUP 116 Mineola Road West Mississauga, Ontario LSG 2C2 TABLE OF CONTENTS I INTRODUCTION II SITUATIONAL ANALYSIS 2 Facility Description Facility Mandate The Request For Propose Selection Committee Pre Evaluation Activities Evaluation Process III EVALUATION OF SUBMISSIONS 3 4 4 5 S SERCO Facilities Management Inc. 6 Community Services Department Submission $ IV COMPARATIVE ANALYSIS Specific and Comparable Management Experience Marketing, Communications and Operating Plan Effectiveness of Facility Manager and Operational Staff Financial Proposal Timin¢ Financial Capacity and Stability V SUMMARY 2 l0 11 11 11 12 12 4 Conclusion MUNICIPALITY OFCLARINGTON COURTICECOMMUNITYCOMPLEX Management Services Contract I INTRODUCTION The Courtice Community Complex located in Courtice Ontario, is currently being developed by the Municipality of Clarington to meet the community recreational needs of local residents. The facility will include an indoor pool, fitness area, community hall, and an adjacent Branch Library. In response to direction from Council and consistent with the Municipality's efforts to pursue innovative strategies for the development and delivery of cost effective and user based services, staff distributed a Request For Proposals which was intended to solicit from interested public, not-for-profit, and private sector parties, proposals for the provision of management services for the day to day operations of the Courtice Community Complex. Further, the RFP requested commercial or retail interest for approximately 5,500 square feet of leasable space, located within the Complex. Two private sector recreation management firms responded to the Request For Proposals by the (revised) submission deadline of September 20, 1996. Subsequently, staff prepared a proposed budget for the Complex, to facilitate a financial analysis of a municipally managed approach, compared to the private proposals. In December of 1996, the Municipality approached The JF Group to assist in the process of selecting the most appropriate manager and operator for the Courtice Community Complex. Specifically, the Municipality requested services related to: • the development of evaluation criteria inclusive of a defensible and objective rating scale via which submissions could be evaluated; • the preparation of an assessment model incorporating weighted scoring mechanisms reflecting the Municipality's priorities for the Complex; and • involvement in, and strategic advice about the process of selecting the most appropriate operator. This report summarizes the actions and results of the selection process. The reader should refer to the appendix of this report and the Request For Proposals for background and support material to information presented here. QTheJFGroup D ~1~ MUNICIPALITY OF CLARINGTON COURTICE COMMUNITY COMPLEX ` Management Services Contract II SITUATIONAL ANALYSIS The first step of the assignment was to develop an understanding of the issues that would likely influence the process of selecting the most appropriate manager for the Courtice Community Complex. We engaged in several introductory meetings with selected staff, became familiar with various documents regarding the Municipality's plans for the Complex and reviewed the Request For Proposals. Neither of the private proponents were interested in Section Two... Leasing fhe Commercial Space. Therefore, staff began an independent search for an acceptable tenant allowing the Selection Committee to focus on the key relevant factors associated with choosing the most appropriate manager for the leisure components of the Complex. The following sections describe certain aspects of this preliminary process. Facility Description The leisure pool and fitness area represent the two major leisure facility components included in the Courtice Community Complex. These facilities will be supported by male, female, and family locker rooms that are centrally located between the activity areas. A community hall offers flexible, multi-purpose space adequate to accommodate a variety of leisure and general uses. A snack bar concession and vending area are situated between the foyer and the community rooms. Offices and general administration space are also provided. Facility Mandate As mentioned earlier, the facility is intended to meet the leisure and recreational requirements of Clarington's residents. Furthermore, it is expected that the profile of the Complex will remain consistent with the general operating philosophy of the Department. In support of this view, the Request For Proposals was quite specific about the intended project goals and objectives. These were: • to provide community access and use, focusing on the provision of recreational and community based programs and services, for the residents of Clarington, including sport groups and associations; QThe JFGroup ~ ~2~ MUNICIPALITY OFCLARINGTON COURTICECOMMUNITYCOMPLEX Management Services Contract • to include the community in the development, operation, and evaluation of the facility's activities on an ongoing basis; to establish the Complex as a focal point for promoting and supporting the enrichment of the community as a whole; • to operate the facility in the most effective manner recognizing all relevant legislation and By-laws; and • to co-ordinate programs and services with other providers within the community providing a variety of opportunities which demonstrate co-operation with the intent of avoiding duplication. These goals and objectives represented the foundation upon which several measures were developed to evaluate each proponent's ability to fulfill the Municipality's expectations for the Complex. The Request For Proposals The first four sections of the Request For Proposals provided an overview of Clarington's rationale for examining alternate management approaches for the Complex and explained relevant details that would be important considerations for potential management proponents. General proposal requirements and conditions were described and evaluation criteria were provided. Specific proposal format and requirements were defined and a preliminary schedule was outlined. By far, the majority of the Request For Proposals was dedicated to the description of detailed operating specifications and quality expectations, that were suggested as major considerations for proponent submissions. Issues such as occupational health and safety, insurance, municipal remedy and dispute mechanisms, programs and services, staff qualifications and deployment, plant and equipment maintenance, ownership issues, management responsibilities, external maintenance, building maintenance, program fees, quality control, monitoring of pertormance, financial records, management information, sponsorship and advertising sales, marketing and advertising, operating hours, facility damage, potential modification of the facility, and catering were covered in detail. QThe JF Group D ~3~ MUNICIPALITY OF CLARINGTON COURTICE COMMUNITY COMPLEX Management Services Contract Selectiou Committee The Committee charged, with the responsibility of assessing all proposals and selecting the submission that best suits municipal objectives, consisted of four senior staff and one Councilor. The JF Group's role was to protect objectivity in the selection process and where necessary, to provide advice about evening the playing Held to ensure that each submission was dealt with in a fair and unbiased fashion. The Committee makeup was as follows: Larry Hannah, Councilor Joe Caruana, Director of Community Services Fred Horvath, Property Manager Cynthia Mearns, Library Director Lou Ann Birkett, Purchasing Manager During the first meeting, Committee members discussed procedural issues and the propriety of involving the Director of Community Services as an active member of the Committee, given that staff's submission would be considered as a possible management alternative. It was unanimously agreed that the Director would not participate in the selection process; however, would continue to attend meetings to provide relevant information, about the Courtice Community Complex, and its position in the Department's leisure facility portfolio. It was further decided that any decisions related to fairness or proper procedures of the selection process would be deferred to The JF Group. Pre Evaluation Activities The Request For Proposals outlined that each submission would be evaluated based upon several criteria. These were grouped and summarized in the following areas: specific and comparable management experience; • marketing, communications, and operating plan; • effectiveness of facility manager and operational staff; QThe JFGroup D ~q~ MUNICIPALITY OF CLARINGTON CO URTICE COMMUNITY COMPLEX Management Services Contract financial proposal; proposal quality and presentation; • ability to meet timetable; and financial capacity and stability. To standardize the preliminary evaluation process, The JF Group created and furnished to the Selection Committee, detailed descriptions of each criteria together with scoring thresholds. Each criteria was assigned a weight reflecting its relative importance of meeting Clarington's financial and operating objectives for the Complex. A scoring matrix was created to accept this information and to facilitate the objective evaluation of each submission. Committee members reviewed this material and were instructed on its use. Evaluation Process The selection of the most appropriate manager for the Complex involved a three stage process during which Committee Members engaged in various types of review mechanisms. These included: preliminary submission evaluations; proponent interviews; • manager selection meeting. Each of these activities was supported by research, conducted by The JF Group and in certain cases, direct contact with the proponents. In all instances, candidates were given equal opportunity to adequately represent their position and demonstrate their capacities of fulfilling the management expectations for the Complex. QThe JFGroup D ~5~ MUNICIPALITY OFCLARINGTON COURTICECOMMUNITYCOMPLEX Management Services Contract III EVALUATIONOFSUBMISSIONS Proposals were received from SERCO Facilities Management Incorporated, Recreation Services International Limited, and an in-house staff submission prepared by the Community Services Department. In accordance with the evaluation process, each proposal was reviewed at a preliminary meeting on Monday, January 27, 1997, during which Committee Members discussed each proponent's ability to demonstrate its compliance with the selection criteria. Due to the limited number of submissions, it was decided to offer an interview to each proponent on Wednesday, February 5, 1997. Furthermore, it was agreed that candidates would be furnished with questions arising from the preliminary review meeting, so that presentations could help the Committee accurately quantify each proposal. On February 4, 1997, the Selection Committee was informed by Recreation Services International Limited that the firm was withdrawing its proposal to supply management services for the Courtice Community Complex. RSI cited problems in its corporate restructuring program which were believed to be significant obstacles to the company being considered a valid candidate. As a result of this withdrawal, the Committee concentrated its selection efforts on comparing the SERCO bid with the financial and operating implications associated with the staff submission. The following paragraphs provide an overview of information from the written submissions and presentations of both groups. SERCO Facilities Management Inc. SERCO is a Canadian company based in Ottawa, Ontario. The firm has extensive world-wide experience in the management and maintenance of a variety of municipal recreation facilities, as well as facilities operated on behalf of other government organizations. To establish a Canadian presence, SERCO acquired a major Canadian aviation company in 1994. In 1996, the company entered the municipal recreation services market with its acquisition of Focus Leisure, a small recreation management company based in Ottawa, Ontario. As well as outdoor pool management contracts resultant from the purchase of Focus, SERCO currently operates one major Canadian recreation facility... Cape Breton Regional Municipality Centre, Centre 200. While the proposal and presentation offered QThe JF Group D ~g~ MUNICIPALITY OF CLARINGTON COURTICE COMMUNITY COMPLEX Management Services Contract limited evidence of experience in projects of similar size and scope to the Courtice Complex, the company expressed interest in growing its Canadian recreation services management business and the intention to dedicate corporate resources to secure future contracts. SERCO's proposed agreement would have the company manage the Complex on a fixed fee basis. The firm proposed a partnership agreement and indicated a willingness to engage in discussions with municipal representatives to establish operating objectives and specifications that would be consistent with the community's hopes and expectations for the Complex. The proposal includes an impressive marketing and customer service program, inclusive of a substantial number of initiatives that are viewed as critical to the long term success of the Complex. SERCO proposed a management structure and operating style that would have the Courtice Community Complex operate relatively independently from the corporate entity; however, proposed a high degree of interaction between site staff and municipal representatives. There would be a full time Manager, Aquatics Co-ordinator, Fitness Co-ordinator, and the equivalent of 4.5 full time maintenance and administrative personnel. Aquatic and fitness activities would be supervised by part time lifeguards and instructors. The proposal included job descriptions, recruitment policies, communication mechanisms, and reporting systems customarily employed by SERCO staff teams. The bid did not include information about, or qualifications of the actual staff that would manage the Complex. While the submission discussed the intention to hire locally and fill positions with top quality personnel, no specifics were available. The proposal described the company's intention to outsource food and beverage, landscaping, and snow removal responsibilities. The bid provided a detailed financial projection for the five year term of the proposed contract. Assumptions for the financial projections were based on information that arose from SERCO's discussions with operating staff and details from the Request For Proposals. Salary and labour costs were determined using SERCO's management model, customary compensation packages, and staff deployment strategy. SERCO proposes a management fee of 7% of the total annual expenditures of the Complex. Based upon the company's expense projections, this would QTheJFGroup D ~~ MUNICIPALITY OF CLARINGTON COURTICE COMMUNITY COMPLEX Management Services Contract amount to a fee of $60,000.00 per year. The company also proposes an incentive bonus of 50°k of net revenues above the projected budget. The company proposed to cap the municipality's financial exposure through a performance guarantee. Any net costs above budget would be the responsibility of SERCO. Net operating costs which also represent subsidy requirements by the Municipality, were projected in the range from $375,541.00 in the first year to $324,868.00 in year five. Although the submission indicates SERCO intends to assemble an appropriate staff contingent after the contract award, the company does not contemplate difficulty in fulfilling the timetable established for the facility's opening. Community Services Department Submission The Community Services Department based the operating budget for the Courtice Community Complex on traditional performance patterns of the existing pool and fitness centre as well as certain market research. The submission examined population projections and future demographics of the primary market for the Complex to determine likely program participation levels, staff requirements, and associated costs. The proposed staffing strategy suggests a split of duties of the current Fitness Centre Manager between existing responsibilities and the management function of the new Complex. This would result in a 50°k allocation of the Manager's salary to the new facility. Furthermore, the staff submission includes increasing the current responsibilities of the part time Fitness Co-ordinator to a full time position, half of which would be dedicated to the new Complex. The balance of the staffing plan is consistent with customary municipal recreation service standards. The financial projections included in the Department's submission reflect facility rental, program, membership, concession, and miscellaneous revenues. As mentioned earlier, these were based on a combination of historical performances of existing municipal facilities and anticipated program participation from the Centre's primary market. Costs have been based upon usual operating levels and have been adjusted in accordance with strategies expressed in the submission. To facilitate an accurate comparison to the private sector bid, the staff budget was amended to include an expense line reflecting corporate overhead, that was QThe JF Group D ~8~ MUNICIPALITY OF CLARINGTON COURTICE COMMUNITY COMPLEX Management Services Contract determined as a percentage of the expected total operating expense for the facility. Committee agreed to an amount of $27,300.00 which, for the purposes of evaluation, was considered staffs management fee. The Department's financial projections (adjusted to reflect the management fee) predict that the Courtice Community Complex will require a municipal subsidy of $240,300.00 in its first operating year which rises to $258,135.00 in the fifth year. Although the Department's plan involves the assembly of a staff contingent necessary to run the new Complex, it is anticipated that the start up will be consistent with the prescribed timetable. QThe JF Group D ~g~ MUNICIPALITY OF CLARINGTON COURTICE COMMUNITY COMPLEX Management Services Contract IV COMPARATIVE ANALYSIS The Selection Committee evaluated the submissions based upon their demonstrated compliance with the criteria and corresponding thresholds. Committee members discussed comfort levels associated with each groups' ability to actually deliver financial performance programs and services consistent with those reflected in the submission. Further, given the varying nature of the submissions, it was necessary to thoroughly analyze the advantages and disadvantages of each approach. Where necessary, The JF Group provided advice and direction to ensure that the process remained objective and consistent with the pre-determined methodology. Not surprisingly, there was some difficulty in dealing with several issues of priority, and Committee expressed uncertainty about the corporate cost/benefit expectations for outsourcing recreatin service delivery. This provided clear evidence that future assessments of this nature should be conducted within the context of a municipal policy that is sensitive to the probable effects on the Corporation and its constituents. Committee members supported the notion that a recommendation in this regard would be appropriate. The following is a summary of the key issues that the Selection Committee considered during the evaluation of each submission. For convenience, this information is categorized by corresponding criteria headings. Specific and Comparable Management Experience Although SERCO's team included a well qualified facility operations expert, the individual is retained as a consultant and has no formal ties to the company. Centre 200 is managed by the firm, but its facility components and operating specifications are quite dissimilar to the Courtice Community Complex. Based upon these factors, Committee members were somewhat uncomfortable with the depth of SERCO's comparable management experience. The Department's proposition involves the deployment of the existing Fitness Centre Manager to the new Complex. While the proposed Manger is a known quantity and is quite qualified in the direct delivery of aquatic and recreation services, her management experience has been limited to approximately one year. QThe JFGroup D ~10~ MUNICIPALITY OFCLARINGTON COURTICECOMMUNITYCOMPLEX Management Services Contract Marketing, Communications and Operating Plan Clearly the SERCO bid presented a creative, thorough, and well documented marketing plan, inclusive of an extensive facility launch initiative. Company representatives emphasize the importance of marketing in achieving revenue targets and ultimately the long term financial success of the Complex. Numerous customer service interventions, promotional initiatives, and staff deployment strategies supported the marketing orientation. Further, a launch budget of $65,000.00, plus anticipated annual marketing expenses of approximately $18,000.00 were included in the financial projections. The Department's submission included a plan that was developed in conjunction with the Marketing and Tourism Office. Many initiatives parallel traditional municipal marketing strategies, while there are several unique ingredients that staff suggests would be required to create community excitement that would stimulate activity. Comparatively, staffs marketing budget is modest ($8,000.00) and Committee members were not sure that the contemplated initiatives would be possible, given the shared Manager strategy. Effectiveness of Facility Manager and Operational Staff SERCO presented a staff deployment strategy that involves 7.5 full time staff and the equivalent of 9.2 support (casual) personnel. In comparison, the Department's submission involves the equivalent of 4.8 full time staff supported by 11 (casual) staff. While Committee members felt that the private sector bid included a staffing compliment capable of operating the facility in a quality, customer service fashion, they were less comfortable with the municipal proposition. The prevailing concern was associated with the half time Manager position. Further, given the need to aggressively promote and program the Complex, the reliance on casual and/or part time labour raised several concerns related to revenue projections. Financial Proposal SERCO's bid reflects an average annual operating cost of $338,409.00 over the five year term of the contract. Assuming that the projections are accurate, the Municipality would underwrite this cost. However, the subsidies would be capped at the projected levels and, in the event that SERCO was unable to meet net cost projections, the company would be responsible for the additional financial short fall. QThe JF Group D ~I1~ MUNICIPALITY OF CLARINGTON COURTICE COMMUNITY COMPLEX Management Services Contract The Department's budget, inclusive of the overhead allocation, projected an average annual net municipal cost of $247,300.00. Furthermore, unlike the private sector proposal, the Municipality would have no guarantees to protect against increased subsidy requirements caused by lack of performance. The remaining difference between the two management options was that under staff control, the Municipality would realize 100% of improvements to budgeted amounts, whereas the private sector bid involves a 50% shared strategy. Timing Both propositions involve the necessity to assemble appropriate staffing complements and the development of specific management and operating details. Although Committee members felt that the Municipality could likely move more quickly in this regard, it was believed that both propositions would allow the Complex to open on time. Financial Capacity and Stability SERCO demonstrated the financial capacity to support its submission. This criteria was not applicable to the Department's submission. The following table provides a comparison summary of the above details. QThe JF Group ~ ~12~ W r J Q m Q LL F- O Q w ` ' C O o `(S' >'~ A' ~~ w O N p O O N ~:f:=:<:, .:;:-::~~ 3 r ~, y y :.. M r ~ w~ lC O N m :i::;yi:Y.i.~:: oo O. }~ .. N 'C C~ ~ O y j N N 0 C L >~gr<'` .:v=as ~ O O. ~ O f t ~ ~ N O N O 0 N O O O O G1 c::,>, 7 £ C ~ ~ >O '">~~5 Y~': : ~ ~ L ~ C ~ ~ o fp 7 QO ~ L Q. C O C t0 . 0- C r > fN0 C a M l6 p y _ y::'a!<ESS ~£ j l0 d C ~ O O f0 a O ~ C ~ a:,``~?>s`2' '~~'^i~ - ~ N C N O j l 6 o O O I /1 ~ ~ ~ ~ - Q O Ol f0 N O Y Q ,. _. C N~ O- N Old y O_ = ~' N - - 7 f~ y r Q. ~ N O ~ fA O a .. 9 iy l6 r ~ £ 7 7 ~ X ` w O N V .-• J 2 fn 0 LL LL N fA N Q O~ J C Q (n +% O 'O N N N N O N C N W C ~ ~ Of ot{ CC d > a. L " .C Q O f0 • N 'V >. ~l E C O ~ a+ ~ N ~ U1 ' N ~ > O ~ O ,~ .k O ~ ° ~ O - ° ° ' ° m ~ ~ a~ y ~ °~ M o o E ...... ...::. O ~ C.N.. ~ ~ O OM -p ; ~'s~'~ O a as °a N O O «o L ~ 10 > N O C o ~ L ~ ~2• mE U m C l w N .. N 'O ~ ~ > C N V O O C E pO> > U 6 3 0 't O N ~~ N N E ` l0 w ~ y O C~ y O Q N ~ C N lp O d C m 7 O ~ .-. N W f0 C N . T O O) C. ~ O) w l0 E .. . S N O O p N M m V O '-' ~~ C N L N Ol N ~~ O\ ~ N ~ U N n N 0. N ~ p 0 7 l6 O V~ >~ C d U V f o ,. Z N ~ m F- ~ 07 ~ S ~ N3 (O Q O lL 'O Q r (/~ • • • • • • • • • • • • • C ~ ~ f0 f0 a ~ a c m :;::::;;; ~ a~ o ~ ': d ai a o ~ ~ ~ ,~ a ~ ~ ~ N C l0 T l6 N .. C O) _ N l0 .~ C C_ ~ ~ ~ ~ ~ iLL I- fn MUNICIPALITY OFCLARINGTON COURTICECOMMUNITYCOMPLEX Management Services Contract V SUMMARY After a thorough discussion about all issues, the Selection Committee concluded that there were approximately the same number of merits and drawbacks associated with each of the two management options. While the SERCO bid provided assurances that the facility would be aggressively marketed and that customer service initiatives would be delivered by senior, on-site personnel, the company's lack of comparable management experience and remote corporate support raised concerns about operating consistency and the validity of certain cost assumptions. Conversely, the Selection Committee was troubled by the modest staffing contingent included in the Department's submission and the possibility that the personnel strategy could undermine the ability of the Complex to realize its full potential. However, the staffing plan identified a Manager with a demonstrated ability to effectively manage other municipal aquatic and fitness facilities. Finally, the support offered by the Department would be sensitive to local issues. The realization that both management options, on balance, were comparable, focused the Committee's attention on the financial implications of the propositions. While the financial proposal included in the private sector bid was capped, the net operating cost was projected at approximately $90,000.00 more than the staff budget. Although SERCO indicated a willingness to negotiate the cost associated with certain underlying assumptions within the proposal, Committee members felt that to do so would reduce the overall value of the bid, especially in view of the magnitude of the financial differential. Furthermore, to arbitrarily adjust selected budget line items in one submission, without providing the same opportunity for the other, was deemed inappropriate. Conclusion The Selection Committee concluded that the Department management option is the most desirable because it represents an acceptable degree of recreation service at the lowest cost to the Municipality. However, the Committee was not prepared to submit this recommendation in the absence of consideration for the financial risk to the Municipality in the event that the Complex performed below expectations. Therefore, the Committee's recommendations are: QThe JFGroup ~ ~14~ A4UNICIYAI.IT7'OI'CLARINCTUN COt/R'lYCECOMAffINITt'CO?~fPLEX Mrrnngaman! Sarniraa I".onlrru:l • that the Department's submission be accepted and that staff operate the Courtice Community Complex adhering to the operating asaumptiona and budget included in the Department's proposed plan as amended; • that the Municipality's Administration and Finance Departments establish operating and financial thresholds for the Courtice Community Complex, inclusive of mechanisms through which performance data will be collected and measured; • that the Municipality explore alternate management options for the Courtice Community Complex if the Complex does not perform in accordance with its operating and financial thresholds; and that performance be evaluated annually and that the decision to explore altemate management options be considered after 2.5 years of operation. Committee members agreed that the evaluation process demonstrated that partnerships, affiances, and outsourcing traditional municipal services posed significant challenges to decision makers who are already facing rapid changes in corporate environments. Furthermore, it was recognized that mutually beneficial partnerships must be founded oh a common vision and joint understanding of agreeable goals. The process of assessing options is a major undertaking that would benefit from the development of a corporate framework through which Clarington could dea! with all future strategic partnership opportunities. Based upon apre-established approach, a standard partnership assessment model, specifically addressing corporate and departmental issues could be developed. This view led to the following recommendation: that the Municipality create a Corporate policy related to developing partnerships, alliances, and outsourcing relationships with private, not-for-profit, and other public agencies inclusive of supporting procedures and evaluation mechanisms. ~tTlie J!'GrouN Y ~15~ MUNICIPALITY OF CLARINGTON COURTICE COMMUNITY COMPLEX Management Services Contract The process through which the Committee reached its conclusion and recommendations was fair and objective. Each submission was based upon a similar understanding of municipal expectations for the Courtice Community Complex and the issues associated with each management option were evaluated in an unbiased, thoughtful manner. Therefore, we concur with the Committee's conclusions and support its recommendations. QTheJFGroup D ~16~ MUNICIPALITY OF CLARI~1'GTON COURTICE COMMUNITY C0IIPLEX SELECTION CRITERIA AND THRESHOLDS Introduction The Request for Proposals by the Municipality of Clarington solicited private sector interest for the provision of Management Services for the day to day operations of the Courtice Community Complex. The Municipality is now interested in reviewing the submissions and comparing the proposals to a municipal operation. The selection of an appropriate management strategy for the Complex will involve an assessment of each proponent's capacity fo meet the evaluation criteria included in the Request for Proposal. To assist in the selection process, we will employ weighted criteria and score each proposal using thresholds included in the following sections. Each proposal vrill be scored between 0 and 3 based upon how well it meets the criteria with 0 being unacceptable and 3 being ideal. Each score will then be multiplied by a weighting factor of each criteria which reflects the importance of the criteria in terms of Clarington's operating and financial objectives for the Complex. The Request for Proposal describes five Project Goals and Objectives that provide an acceptable framework within which each proposal can be judged. These are: • to provide community access and use, focusing on the provision of recreational and community based programs and services for the residents of Clarington, including sport groups and associations; • to involve the community in the development, operation, and evaluation of the facility's activities on an ongoing basis; • to establish the Complex as a focal point for promoting and supporting the enrichment of the community as awhole; - • to operate the facility in the most effective manner, recognizing all relative legislation and by-laws; and to co-ordinate programs and services with other providers within the community, providing a variety of opportunities which demonstrate co-operation with the intent of avoiding duplication. The Request for Proposal further describes the Municipality's desired specifications for the facility's programs and services, staff qualifications, and other operating implications. This information will be a useful reference when evaluating the submissions. EYALUATIONCRITERIA Financial Capacity and Stability (weight = 3) The ability of proponents to demonstrate that they have sufficient financial support and historical corporate stability will be important factors during the selection process. Proposals should include an indication of the proponent's corporate, staff and management structure, years in business, relationships and alliances with other firms, funding sources (such as investors.) and other details that instill a level of comfort that the proponent is committed and able to enter into a long term contract. In the event of a consortium bid, the proposal should clearly indicate the lead firm, providing a confirmation that the financial obligations included in the bid are protected by the lead firm's covenant. (3} !deal A bid that is completely secured by the financial capacity and long term stability of the proponent and there is no financial risk to the municipality associated with facility operations. (2) Satisfactory A bid that provides assurances related to the firm's financial capacity but is less clear about its long term stability and there is no financial risk to the municipality associated with facility operations. (1) Marginal A bid that indicates some previous financial problem and/or corporate instability that appears to have been resolved and there may be some financial risk to the municipality associated with facility operations. (0) Unacceptable A bid that provides evidence that the firm may be unable to meet its financial obligations or has a history of instability and the municipality will be at risk for the financial performance of the facility. Specific/Comparable Management Experience (weight = 3) Operating amulti-use building including an aquatic facility is a challenging prospect. Furthermore, the ability to perform the varied functions necessary to support a project of this size will require a fair degree of sophistication and related experience. Proposals should include examples of where the bidder has successfully implemented management and operating strategies elsewhere. While it would be preferable that these projects included facilities of a similar size and nature, it may be possible that submissions could draw upon related successful experiences in settings other than leisure environments. (3) !deal A bid that provides evidence of a long and successful track record of operating multi-use facilities, including swimming pools, to standards that reflect the specifications included in the Terms of Reference. (2) Satisfactory A bid providing evidence of a successful history of managing and operating large scale projects (not necessarily involving the facilities included at the Courtice Community Complex) and includes key staff with acceptable pool experience as part of the proposal. (1) Marginal A bid that provides evidence of limited corporate experience in operating facilities similar to those in the Courtice Community Complex, or other large projects, but has included staff with acceptable pool experience as part of the proposal. (0) Unacceptable A bid that provides no evidence of previous experience or qualified staff. Marketing, Communications and Operating Plan (weight = 2) The success of the Courtice Community Complex will be largely affected by the Manager's ability to implement an integrated operating plan maximizing the performance of all areas of the operation. The Request for Proposal asks for specific information about staffing plans, marketing plans, and operational efficiencies. Proponents should provide a clear indication of their operating strategies in this regard. (3) !deal A bid that provides clear evidence that the proponent will implement a strategy that exceeds maintenance specifications, and a program and marketing plan that significantly reaches out to the community through communications with facility users and that establishes a substantial target market for the facility. (2) Satisfactory A bid that provides evidence that the proponent will meet building maintenance standards and implement programs and marketing plans that communicate with facility users and that establishes an acceptable target market. (1) Marginal A bid that is vague about the building maintenance strategy and leaves some question about the proponent's capacity to meet minimum specifications, aprogram plan that involves limited marketing, little creativity and no initiatives beyond standard communications with daily facility users. (0) Unacceptable A bid that falls short of the minimum maintenance specifications and provides little or no evidence that the proponent intends to develop and implement marketing strategies. Effectiveness of Facility Manager and Operational Staff (weight = 2) The Request for Proposal is quite clear about the Municipality's intention to provide a comfortable leisure environment in which Clarington's residents can experience top quality recreational services. The proponents should illustrate intentions to develop and maintain such an environment. This should include a plan to ensure the implementation of a bona fide customer services strategy, implemented by the management and operational staff. For instance, this might involve a plan to manage points of contact between staff, users and user groups, or a strategy to implement complaint resolution mechanisms. (3) Ideal A clearly presented customer plan that is based upon the bidder's previous experience in implementing similar strategies, plus input from users which will result in initiatives that will produce a top quality leisure environment that is consistent with the goals and objectives for this project. (2) Safisfactory A plan that is based upon the bidder's previous experience, including an adequate number of initiatives intended to provide a pleasant leisure environment that is consistent with the goals and objectives of this project. (1) Marginal A plan that provides a modest number of initiatives intended to produce an acceptable service environment that remains consistent with the goals and objectives of this project. (0) Unacceptable A plan that provides no evidence that the bidder will focus on a quality service environment and/or is inconsistent with the goals and objectives of this project. Financial Proposal (weight = 3) The projected financial performance of each proposal will be a key consideration in selecting the successful candidate. The Request for Proposal provided a detailed revenue and cost projection summary sheet including notes that requested supporting documentation. It is likely proponents will establish a variety of different assumptions upon which they will base financial projections. It is therefore important to review the proposal's text as well as the financial information included on the summary form. The following suggested thresholds have been established to provide consistency to the ranking. Net income is the cost to the Municipality after all operating expenses and management fees are considered. This will involve adding the Management Fee for services to the line marked DIFFERENCE. (3) Ideal An average, annual net cost to the municipality of less than $200,000, over the term of the contract. (2) Satisfactory An average, annual net cost to the municipality of between $200,000 and $274,999, over the term of the contract. (1) Marginal An average, annual net cost to the municipality of between $275,000 and $344,999, over the term of the contract. (0) Unacceptable An average, annual net cost to the municipality of $350,000 or more, over the term of the contract. Proposal Quality and Presentation (weight = 1) Based upon the information included in the Request for Proposal and supplementary-information provided in response to proponent's questions, each candidate should have a clear understanding of the Municipality's expectations and the role of the Courtice Community Complex in meeting the recreational requirements of the Municipality's residents. Furthermore, the evaluation criteria outlined in the RFP indicated that the style, presentation, quality, and completeness of the proposal would be used to judge each submission. While it is likely that proposals will follow different formats, they should be well sfructured and demonstrate an organized approach to delivering management services. (3) !deal A bid that is clear, concise, well organized, and written in a style that demonstrates an understanding and familiarity with leisure facility management. (2) Satisfactory A proposal that is clear, organized, and written in a style that demonstrates a reasonable understanding of recreation facility management. (1) Marginal A proposal that demonstrates limited organization and that is vague in certain areas; however demonstrates an understanding of recreation facility management. (0) Unaccepfable A bid that is poorly organized, vague and demonstrates no understanding of recreation facility management. Timing (weight = 1) It is the Municipality's desire that the successful candidate begin to provide management services approximately three months in advance of the opening of the Courtice Community Complex (opening expected in June or July of 1997). Bids that demonstrate proponent's sensitivity to scheduling issues should be ranked highest. (3) Idea! A bid that demonstrates the capacity to meet the proposed schedule inclusive of a building opening plan and transition strategy. (2) Satisfacfory A bid including a slightly extended schedule, thereby reducing the length of time between the contract start up and the facility opening, however provides a building opening plan. (1) Marginal A bid that includes a slightly extended schedule yet involves no building opening plan. (0) Unacceptable A bid that includes a significantly extended schedule and no building opening plan.