Why does a Core Review in Prince George cost so much more compared to other cities?
Thursday, March 22, 2012 @ 3:45 AM
By Peter Ewart
According to the Select Committee on Business, whose recommendations the Mayor of Prince George has combined into the City’s Core Review process, the City must become more “business friendly.” KPMG, as a business, must be especially basking in the warmth of this recommendation these days, now that it looks as if it will be granted a plum contract to conduct the Prince George’s Core Review of municipal services.
The word is that the contract is to be worth at least $250,000 plus a 5% administration fee and numerous other additional costs that are to be negotiated. So, let’s say the final figure ends up being between $275,000 or $300,000. How does that stack up to the cost of Core Reviews in other cities?
Well, the Prince George contract looks very business friendly, or to put it another way, KPMG friendly, indeed. For example, KPMG did the Core Services Review last year for Toronto, a city of 2,503,281 people, for a grand total of $350,000. Toronto, with a population of 2,503,281, has 33 times the population of Prince George (76,000 people). Yet the Prince George Core Review is probably around $262,000. In percentage terms this means that, although Prince George has only 3% of the population of Toronto, its Core Review will cost approximately 80 or 85% of the Toronto Core Review.
And Prince George’s Core Review doesn’t do well at all when compared to other cities in British Columbia. The Research Branch of the Canadian Union of Public Employees has released a report listing the cost of recent Core Reviews in the province. Penticton, with a population of 31,909 (a little less than half of Prince George), had a Core Review that only cost $37,904. That’s just over $1 per citizen. If we applied the same ratio to Prince George, the cost for the Core Review here would have been somewhere around $90,000.
Then there is the District of Mission (34,505 people) which has a Core Review costing $100,000. White Rock (19,339 people) has a Core Review of $60,000. And so on with comparable figures. The CUPE report notes that the most expensive municipal Core Review it could find was Regina’s whose cost came to $298,000. Yes, that figure is near the Prince George one, but Regina has a population of about 193,000 people which is 2 ½ times that of Prince George. According to the CUPE report, Prince George is a “complete outlier” in terms of the high cost of its Core Review.
How did this happen? Why were there not more bids for such a plum contract and why is the final cost so high? A local KPMG representative sits on the Select Committee for Business whose recommendations have been, at the Mayor’s direction, combined into the Core Review process. Was there a perception that the KPMG bid was a done deal? We don’t know.
Furthermore, why did the City publicly announce before the bidding even started that $350,000 was being set aside to fund the Core Review? Is that the best way to get the lowest bids possible? Yes, in the current budgeting process, funds have to be set aside for future costs and that ends up on the public record. But surely there must be some way of keeping the bidders in the dark, to see what they come up with in their bids, so that you can get the best value for the taxpayer? A better and more competitive bidding process is needed.
And there is another issue as well. How was this $350,000 figure of funds being “set aside” arrived at in the first place? Surely, whoever was working on this file knew that the City of Toronto, with a population of 2,503,281, had paid $350,000 last year to KPMG for its Core Review? Didn’t anyone notice the glaring disparity of one city being 33 times the size of another, yet both having a similar cost for a Core Review?
Now the question does arise, was the scope of the Core Reviews in these other cities substantially smaller than that of Prince George and thus less costly? So far, there is no indication that this is the case, and for its part, the City of Toronto’s Core Review looks quite substantial and broad. But if the scope of Prince George’s Core Review is so much bigger than these other cities, it begs the question as to why it would be and what would be the justification? As of yet, no answers are forthcoming, except that, for the size of our population, the bill to the City is going to be a whopping one, far exceeding the cost of other cities.
In the Request for Proposal put out by the City, there is a section requiring that, in the course of the Core Review, the successful contractor examine the City’s various “fees and charges” and other transactions. Supposedly this will be done to examine how sound these fees and charges are. Now, given this required task and given the strange, bewildering and costly nature that Prince George’s Core Review process has turned out to be, perhaps it would be only fitting that the first thing that the City should get KPMG to do, is to examine the flawed process by which it ended up getting this lucrative contract and the large fees it will receive.
It all would make for an interesting final report.
Peter Ewart is a columnist and writer based in Prince George, British Columbia. He can be reached at: peter.ewart@shaw.ca
Comments
Note from the author: There is a typo in paragraph 3 of this article. The sentence “Yet the Prince George Core Review is probably around $262,000” should read “Yet the Prince George Core Review is probably around $275,000 or $300,000”.
Peter Ewart
Seems like we need a review of the core review cost. Maybe the additional cost is to cover damage to the KPMG auto’s from the pot hole laced streets. Oh so prince george.
How about a review of the waste of money since Green has been in office… she is a bit less than useless.
The City Of Prince George will not release the costs to tax payers regarding their run at Brian Skakun last year. Their reason was that they didn’t want it known what the City is willing to pay in legal costs to go after an individual in case they need to do this again in the future.
Now, a few months later they announce that they are willing to pay up to $350 000 for a review, then they put it out for bid.
As a tax payer in this City, I sure feel like I am getting hosed more and more. I hope Sherry Green and her new Executive Assistant start to improve on this concern-so far it ain’t working for me!!
Core Review, Executive Assistant to Mayor!
How about we keep it simple, starting with the roads! Fill pot holes and clear the snow.
I think as Peter alluded to, publicly announcing the budget for the core review before getting any bids probably had the biggest impact on the cost.
why does a chair cost almost as much as a couch? It is irrelevant what the population is…….cities of over 15,000 people have the same components that need to be reviewed.
Who the hell is Peter Ewart anyway? Is he a hired CUPE gun? does he work for opinion 250? is he paid for his editorials? who pays him? is he a real journalist?
Does a chair cost the same as the couch in the same material, same fashion, same store? I doubt it. So much for your analogy. Who is Peter Ewart? Did you just climb out from under a rock? I notice you have a lot of positive things to say about this core review process, so I can assume, as you did about Peter, that you have something to do with it or have a personal stake in it somehow. If you can’t see the flaws already present in this whole review thing then you truly are one of the ones with blinders on.
KPMG is a Netherlands company that I would avoid like the pleague. It is a company that does infastrcture for cities like Prince George and charges what I believe is inflated costs. It is involved in Private Public Partnership ownership of the infastructure. We can do our own core review thank you very much.
Me thinks that ‘pass the veggies’ does not like it when somebody is critical of one of their little peas! Does a carrot cost as much as a spud? Why? Is the veggie a troll for the mayor? Does he work for 250? Is he paid? Who pays him? Is he a real vegetable? Hmmmmm!
Surefire
“We can do our own core review thank you very much.”
Who is this we? Council? Mayor’s business group? City staff? Peter ? Union?
The only way to get a fair result is to have an independent third party to look at policies, practices and yes staff levels. Someone from the inside is blind to waste as it tends to fade into the background as they do their jobs.
The big bad Netherlands company does not have the power to make any changes but merely report on what they see. Council and administration can follow the recommendations or do zilch and carry on as usual, but will have to answer to the citizens either way.
Re: passtheveggies “Who the hell is Peter Ewart anyway? Is he a hired CUPE gun? does he work for opinion 250? is he paid for his editorials? who pays him? is he a real journalist?”
“First they ignore you, then they laugh at you, then they fight you, then you win.”
-attributed to Mohandas Gandhi
Thank you Brother/Sister passtheveggies for moving us forward…
The Hawk
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By the way thank you Peter for the enlightening post. More people should read between the lines and become inquisitive about what happens inour city and I am included here. If we all just complain that doesn’t cut it we must write letters to the powers that be and let them know why we aren’t pleased and what we want changed.
Ewart is a union shill. Like all Unions they don’t like any attempt at accountability. BCTF hates the Fraser institute school rankings, cupe hates core reviews. The cost per capita is a red herring. Cupe knows that their members will be impacted by this review, so it should be discredited by all means available.
With all the bitching of high taxes and poor services in this city, you would think this review would have unanimous support.
The review does have support. Just like people support fixing potholes. However if you waste more taxpayer money then is actually required, people have a right to voice their displeasure. This process appears severely flawed and discouraging already. This report will offer a few sound bites for the mayor and sit on a shelf only to be referenced as a colossal waste of time and money due to inevitable failure of the city to implement recommendations.
Captain, how bout you wait for the report and its impact before you dump on it. If it turns out as you suspect, dump away. The vitrol directed at green seems well over the top at this stage.
Wow! Who would expect the cost of this review to be so much higher than cities of a comparible size! Thank you Peter for reporting this disparity, these things seem to be the norm these days.
“Surely, whoever was working on this file knew that the City of Toronto, with a population of 2,503,281, had paid $350,000 last year to KPMG for its Core Review”
The author again has not done sufficient research to back up his words.
http://www.thestar.com/news/torontocouncil/article/1028588–critics-see-kpmg-report-as-smoke-and-mirrors
From the above newspaper article :âIt is a very worthwhile exercise. The city should have done it years ago. But when I heard the total budget was $3 million â well, I knew from that moment this would be a snow job,â said one affected program director.”
The review was done in a number of parts. The overview only was $350,000 … then there were several add ons. We can see that already being the issue with the proposal we have received here.
“oh, if we want wheels on our car that will cost extra ….. and you say you wanted a motor too? …. another $200,000”
From the above link again:
“Industry experts say KPMG, which received $350,000 and two months to complete its part of the research â one of three parts in the review â was not given the resources to do more. For the most part, the firm relied on reports prepared by city staff, some interviews with key managers and KPMGâs internal âexpert panelâ for intel on other municipalities, provinces and federal jurisdictions.
“âThere is no way a city as complex as Toronto, with a budget in the billions of dollars, with so many departments, could be reviewed with $3 million. This was not an economic decision, it was a political one,â said Theodoros Peridis, an expert in strategic management at York Universityâs Schulich School of Business and co-director of York Consulting Group.
“Peridis, however, estimates that a review of serious scope would take at least a year and cost $15 million.”
People just do not understand what a quality services review entails and how much that would actually cost.
Its pains me Peter to have to explain something like this to you but here we go.
Why does one bathroom renovation cost more than another even though bathroom a is smaller than bathroom b?
Answer: Not all renovations are the same. Bathroom A is replacing this and that while bathroom B a quick paint job.
So to summarize ‘core review’ is pretty wide open (like renovation).
Good going “born in BC”.
The core service of a bathroom is a basin, wc, and bathtub/shower. It does not matter whether the apartment has a bed/sitting room or 3 bedrooms. THAT is the core service.
So, it does not matter whether the budget sheet for parks deals with 10 parks or 100, or one or a thousand. The line items would not change that much other than the figures have a few more zeros after them.
So, with such applications, there is typically a cost that relates to function and a supplementary cost that relates to size. Within reason, whether one is reviewing the parks departmental structure for a city of 100,000 to 500,000 to 1,000,000 the unit cost goes up as one compares a city of 1 million to one of 70,000.
Too bad some people get political about these things and use ignorance or feigned ignorance to their advantage to advance an arguments.
We need a Gord Hoekstra who can do an apolitical invetigative and well researched piece on a subject that really needs such awareness raising in the community at this time. I bet you a good piece like that would go a long way to even provide assitance to some of the Councillors.
Accountants aren’t cheap, LOL.
Re: Cost of Toronto Core Service Review conducted by KPMG
The cost of the Toronto Core Service Review conducted by KPMG last year was $350,000. This was the figure told to me by Deborah Brown, Manager of Communications, Planning and Research for the City of Toronto. It was also the figure widely quoted in the press at that time.
Is this part of a larger review of services in Toronto now? Yes, it is. According to Brown, such reviews are an ongoing practice in the City of Toronto, using both internal and external resources. But, as she clearly said to me, the specific Core Service Review conducted last year in Toronto by KPMG cost $350,000.
The scope of a Core Review can certainly vary from city to city, and this will undoubtedly affect the cost. But what, we, as citizens of Prince George, need to know is why our Core Review, which will probably also be conducted by KPMG, will be far more expensive than other cities in British Columbia that have conducted Core Reviews and is in the same high range (nearing $300,000 or more) as two cities that are much larger than ours, i.e. Toronto (33 times as big) and Regina (2 ½ times as big).
There may be good reasons for Prince Georgeâs Core Service Review to cost upwards of $300,000. But there may also not be. One thing for sure â when such a cost is proposed, we should not just sit back and accept it. As a columnist for Opinion250 and in the spirit of the publication, I prefer to raise questions, do some investigation and see where it all leads.
Peter Ewart
“But what, we, as citizens of Prince George, need to know is why our Core Review, ….. will be far more expensive than other cities in British Columbia”
Yes, and that is what I attempted to point out, thank you.
We do not need to politicize this any further, we need someoone who is capable of presenting factual information of what:
1. a core services review should entail
2. a core services could entail
3. fundamental conditions are present which would make a review less expensive (such as a community which already has a good inernal review process in place with data that is verifiable)
Accountability and value audits are not new and are not unique to cities or even public organizations.
There would be value added in this community from what I have seen over the last month if someone would do such an informative, objective report.
Perhaps the place to start at this stage is to follow up the call to the Manager of Communications at the City of Toronto with a call to Theodoros Peredis at York University who is quoted as saying âThere is no way a city as complex as Toronto, with a budget in the billions of dollars, with so many departments, could be reviewed with $3 million. This was not an economic decision, it was a political one,â
Remember, from the article I linked, Peridis, estimates that a review of serious scope would take at least a year and cost $15 million.
So is he out to lunch?
The famous Agapetos once said: “Beware of City Communications Managers.” ;-)
Gus, good points. If you are right and a core review would typically not be able to be conducted for that kind of fee, that would mean that KPMG may not have plucked a plum, they may have taken on a dog. Maybe they were the only bidder because once that 350K figure was out there, it scared everyone away except for KPMG, who could leverage all of the work done on previous reviews.
Gus, Peter, please continue – I’m keen to see how this shakes out. I’m also very interested in the outcome of the core review when it is completed.
Zack … here you go with some further background to support what I have been posting.
In my recent exploration of the matter, the concept of what a Core Services Review (CSR) entails is all over the map. The words themselves do not define the scope. Therefore, for anyone wishing to compare a so-called Core Services Review of one city to that of another city, one first has to make sure that one is comparing like things. Lesson plan 39 from the Sesame Street show dealt with this on many occasions. ;-)
The scope of the work, the complexity of a cityâs organizational structure, and the extent to which the cityâs ongoing documentation meets similar standards will impact on the extent of the work and resulting cost of such a review. We have to remember that, unlike financial audits, there are no accepted standard formats of record keeping for this type of quantitative, qualitative and comparative (to similar municipalities) audits. While there is some consistency, to bid on a project like this carries a much higher risk factor for the proponent to offer services for a fixed fee than to bid on a financial audit.
The closest one can get to compare the scope of one cityâs CSR to that of another city is to look at the bid documents. One can find out in several ways â compare the bid documents (usually Requests for Proposals which makes it even more difficult since these are frequently fishing expeditions rather than specific definitions of the scope)
To determine how one core services review varies from another one, it is necessary to look at the actual bidding documents which should define the scope.
For the purpose of this post, I have not been able to find either the Toronto document or the PG documents. Thus, I am presenting information from other sources.
The Toronto Core Services review took place mid 2011. According to the Daily Commercial News, it âanalyzed all city services, activities and service levels, identifying services that are not core or that are provided at higher than standard service levelsâ¦â¦.The KPMG review did make a brief mention of alternative service delivery review, such as considering a range of options to outsource, in-source, or change a procurement approach for the service.â
http://www.rccao.com/news/files/Aug02-2011TheDailyCommercialNews.pdf
The article in the Toronto Star from a year ago identifies the 3 specific prongs â high level core review; efficiency studies; look at user fees by staff. As the Star decided to put it: âThe attack on perceived waste, initiated by Mayor Rob Ford and executed by finance staff and $3 MILLION worth of PRIVATE SECTOR gravy-sniffing bloodhoundsâ. There is that ubiquitous $3million again.
http://www.thestar.com/news/article/956831–team-ford-set-to-give-go-ahead-to-gravy-sniffing-consultants
As can be seen from other sources, such as the newspaper articles, the efficiency studies which prepare detailed audits of departments which were found on a âhigh levelâ audit to likely benefit from such in-depth review were done through separate contracts.
http://www.abbotsfordtimes.com/news/Abbotsford+weighs+cost+benefit+core+services+review/6303254/story.html
From the above linked article regarding the contemplated core services review in Abbotsford: “The City of Toronto recently spent $350,000 on a CORE Services review and up to $300,000 on each additional EFFICIENCY study”. I expect that is where the $3 million expense for the Toronto exercise comes from. And that is where the notion that even that is not likely sufficient to capture all possible improvements to operations which could be made also comes from.
Over to the Prince George CSR info.
The best document I can find on the Cityâs web site is the following:
http://princegeorge.ca/cityhall/committees/coreservicesreview/Documents/Rpt_Core_Services_Review%5B1%5D.pdf
That is the document which went to City Council. It described the Scope of Work Concept for a Core Services Review by identifying 10 components.
It then went on to separately describe the Scope of Work Concept for Service Efficiency Evaluation by identifying 4 separate components.
Not only that, but it also went on to describe the third prong (starting to sound familiar when compared to the Toronto approach, I hope) â Revenue Evaluation.
It concludes with these words: âCouncil may expect a significant range in project expense, which is relative to project scope and schedule. A preliminary allocation of $350,000 within the 2012 operating budget is recommended. That budget may need adjustment once Council has determined an acceptable project scope and the results of competitive bidding are known.
In other words, City Administration is heading down a path which is untravelled.
Portions, such as the third prong which appears to have been done by internal forces in Toronto, could be done by PG Administration. Also note the use of the word âconsultant(s)â. Thus, the work contemplated could be done by more than one consultant. I also believe that this project may very well end up into the 2013 fiscal year. If the more detailed efficiency studies are not able to be done by September, there may be questionable detailed information to take into the 2013 budget process.
In the meantime, the $350,000 budget in PG is in place with a 3 pronged work scope the way I read the documentation.
The Toronto $350,000 happens to be the same, but was spent on prong one only. The $3million in Toronto was spent on prongs 1 and 2 and likely 3.
How internal costs are allocated to these projects in both the case of PG and Toronto, I do not know.
Finally, in order for anyone to write an in depth comparative report on this kind of process and the variation across Canada, it takes some considerable time and interviews with people who understand these systems better than a communications manager typically would.
I will reiterate once more, to reach any kind of finger-pointing conclusion based on the preliminary information presented in the opinion article by Peter Ewart was, in my opinion, premature.
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