Core Service and Organizational Review

Questions & Answers

Questions & Answers to the RFP as of August 26, 2009

1. According to pg. 3 of the RFP, the Southern Okanagan Valley Events Centre is located in Penticton with capital costs approaching $80 M. We understand that the operator of the Events Centre is responsible to report to the City of Penticton? Where on the organizational chart (see RFP Appendix 1) does the SOEC report? What form of reporting is required? Will the operator be open to fully sharing all operating information as part of the Core Services review, or are there contractual / competitive issues with disclosure of certain types of information?

Response:
The Contractor (Global Spectrum) reports to the Director of Corporate Services. However, as the Events Centre is managed under separate contract with a private operator, this facility along with the Memorial Arena and the Convention Centre are not part of this review. These facilities are also overseen by a Council appointed Advisory Committee

2. Are there projects/programs/service providers that report to (or a substantially funded by) the City of Penticton that are not captured by the City’s organization chart in the RFP? (Related to question 1) Does the City have significant operational and/or financial commitments to other entities – such as regional government or others?

Response:
Other contract services include:
• Garbage collection and disposal
• Cemetery operations
• Transit services
• Library
• Tourism
• Economic Development services
• Visitor Information Centre

The Regional District of Okanagan Similkameen – the City pays approximately 42% of the operating costs of the RDOS

3. According to the RFP, worsening economic conditions is stated as a challenge being faced by the City of Penticton, and there is a need to achieve cost savings and service improvements. In your opinion, what is the cause of the City’s budget problems? Adjustments to the 2008 and 2009 budgets have already been implemented: is there a listing of those changes?

Response:
The financial challenges in the City stem from a variety of reasons including:
1. Reduced rate of return on investments
2. Escalating costs for police and fire protection
3. Grants from senior levels of government are based on cost-sharing.. City share financed through borrowings. Operating costs from existing budget
4. Aging building infrastructure – more costs to maintain
5. Reduced development activity and slower growth in the assessment base
6. Increased costs with new facility construction (SOEC)
7. Please Click Here to download a copy of the Committee of the Whole minutes when budget reductions were addressed.

4. The RFP states that a Steering Committee drawn from a cross section of the organization will be established. To clarify, who will constitute this Steering Committee? Will the Steering Committee have representation from each City department? SOEC? Will it involve Council members and/or members of the public?

Response:
The Steering Committee will consist of:

• Mayor (chair)
• Interim Chief Administrative Officer
• Exempt Staff – 1 rep
• C.U.P.E – 1 rep

This committee can and will be expanded if deemed necessary

5. The RFP notes that staff will be made available (part-time) to participate in the review. Our methodology utilizes a full time municipal team to conduct analysis, with methodology and support of our consulting team, as this brings in significant organizational knowledge, and builds additional knowledge and capacity for the implementation of recommendations at a later date after their approval

Response:
Initial contact with Divisions will be through the respective Directors, who will assign resources as and when required.

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6. Is 2008 a good reference year to look at costs? ( ie It includes extra Centennial and UBCM costs and snow removel expenses may be abnormal). Would 2007 or an average of 2007 and 2008 be better?

Response:
Prior years financial information will be available, and it would be advisable to consider earlier data which may be more representative.

7. I have counted 16 objectives/deliverables that are expected from this review. Is Council willing to prioritize and/or narrow it needs from this project? Several of the deliverables are major projects on their own ( eg examining staffing levels ).

Response:
Yes, as indicated in the RFP the requirements are as envisioned by the City at the time of preparing the RFP, but may change or be refined in the course of the evaluation and award process.

8. Is the public prepared for service and program changes?

Response:
The review is to provide Council with an insight into where changes in service levels can be considered. Implementation of recommendations and changes will be subject to Council deliberation and consideration of public acceptance to proposed changes.

9. How strong support is there from the CAO and senior management for this review?

Response:
The objective of the review is to distinguish core from discretionary services, and where changes can be made. Staff is supportive of this objective.

10. When will the 2010 budget be ready and when will it go to Council? Are there any special budget instructions for 2010 that relate to reducing costs and cutting back on services? ( ie To what degree is the process of tightening up already underway? )

Response:
Work on preparing the 2010 budget will not begin until September starting with a Financial Workshop with Council to scope out major challenges for 2010 and determining Council’s level of acceptability for tax increases. On this basis, instructions will follow to staff.

11. What level of cost reduction is the City seeking from this review? ( ie 1%, 2%, 5%, 10%)

Response:
No predeterminations.

12. What is behind the references to improving internal financial controls? This is an unusual component in this type of review. Have you experienced cases of unauthorized spending? How is internal control a problem?

Response:
The City has a good accounting function but there is room for improvement in the financial reporting side both for staff and Council.

13. What are the benefits to residents and local businesses from the City being in the hydro distribution business? When were the economics of this business last reviewed?

Response:
The electrical utility provides a surplus of approximately $3milllion per year to the City. These surplus funds have, in the past, been used to fund part of the capital budget.

14. To what degree is the City looking for an ongoing process and methodology to continue this program on its own? I see this review as the start of a process that needs to be built into the organization rather than a one shot initiative.

Response:
It is expected that the review will result in work that will benefit ongoing and future work.

15. Does the estimated project budget of $60,00 to $80,00 include GST and expenses?

Response:
The foregoing budget amounts are intended to be all-inclusive with the exception of GST which the city claims back and is therefore cost-neutral.

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16. In addition to other data gathering such as document review, best practices research and benchmarking, the review is intended to incorporate only the perspectives of internal stakeholders such as City staff and elected officials, rather than including in the methodology meetings with external stakeholders such as the Chamber of Commerce or School Board and, more generally, the community. This will impact the methodology and the time assigned to this aspect of the information gathering.

Response:
The consultants are not expected to meet with external stakeholders.

17. The City of Penticton has a convention centre owned and operated by the City which is not mentioned in the RFP. However, the operations of this facility will be included in the Review.

Response:
Tthe South Okanagan Events Centre, Memorial Arena and the Convention Centre are privately managed under a management contract with Global Spectrum (not City employees). Therefore, the Convention Centre along with these other facilities that are under contract management with Global Spectrum are not part of the review.

In addition, this is also to confirm that the Penticton Airport is a Federal Airport with no involvement by the City.

18. The final report of the review is intended to be an assessment report rather than an Implementation Plan and, further, the consultants are not expected to implement.

Response:
Assumption is correct.

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