January 12th Council meeting – Not a good start to PG Core Review
Monday, March 26, 2012 @ 3:43 AM
By Peter Ewart
If Mayor Green has problems with the articles that Opinion250 has published recently that are critical of her proposed Core Review and the $350,000 that has been set aside for the consultant’s fee, she should revisit the City Council meeting back on January 12th. At that meeting – she would do well to remember – a number of city councillors raised serious concerns about how much the Core Review cost, how this cost compared to Core Reviews conducted in other cities, and how well the bidding procedure was being handled.
For example, Councillor Lyn Hall commented that the $350,000 cost was probably more than he “would like to go,” and that he was hoping for something between $200,000 to $250,000. Councillor Albert Koehler thought the $350,000 cost was “fairly high,” as did Councillor Frank Everitt who called for it to be scaled back to $250,000. For his part, Councillor Frizzell indicated that he was surprised at how expensive the Review was and put forward an amendment proposing that it be reduced to $120,000. During the discussion, Mayor Green acknowledged that she had similar thoughts about the cost and that she had “blinked a little” when she saw the $350,000 number.
Given these serious concerns, it was reasonable to expect that the Mayor, as Chair of the Select Committee on a Core Services Review, would have asked the City Manager, Derek Bates, to at least take a second look at the proposed figure. But that did not happen. Instead, two motions – put forward by Councillors Frizzell and Everitt (supported by Lyn Hall) to substantially lower the cost to either $120,000 or $250,000 – were defeated, and the $350,000 figure was approved. Mayor Green, despite her “blinking” at the cost, ended up supporting the $350,000 amount, commenting that she anticipated a lot of savings coming from the Core Review itself that would, according to her, make up for the expenditure.
In the course of the discussion, Councillor Koehler asked the City Manager as to whether he had done any investigation into the cost of Core Reviews in other cities. Mr. Bates replied that some preliminary research of his had suggested that the range of cost for Core Reviews in other cities, depending on the scope, had been “between $100,000 and $1 million,” the latter figure being the Toronto one. Now, the only problem with Mr. Bates’ answer is that it does not appear to be accurate. As I noted in a previous article (click here) published last week in Opinion250, a number of BC cities have conducted Core Reviews recently for substantially less than $100,000, including Penticton ($37,904), Osoyoos ($40,000), Summerland ($40,000), and White Rock ($60,000). In that respect, the funds set aside for the City of Prince George’s Core Review is far higher ($350,000).
In addition, the cost of the Toronto Core Service Review does not appear to be $1 million either. The figure that was given to me in an interview last week with the City of Toronto’s Manager of Communications, Planning and Research was $350,000. To be fair to Mr. Bates, he may be confusing the cost of Toronto’s Core Service Review with the costs of larger ongoing service reviews that it is a part of. But the fact of the matter is that the Toronto Core Service Review cost $350,000 (for a city 33 times larger than Prince George) and was conducted by KPMG last year.
Also, to be fair to Mr. Bates, he did make comparisons between two other City projects (Economic service review – $40,000 and Gaming Centre evaluation – $35,000) which, in his view, “could be informative” in determining the cost of the proposed larger Core Review project.
However, it is clear from all of this that both Mayor Green, as head of the Select Committee overseeing the PG Core Review, and Mr. Bates, as City Manager, do not appear to be well-informed about the costs of Core Reviews in other jurisdictions. This poses serious problems in evaluating the bid from KPMG, who, as it turned out, has ended up being the one and only bidder, with a bid – perhaps predictably – of around $350,000 ($284,895 + 5% admin fee + 12 % HST).
Which brings us to another interesting exchange during Council’s January 12th meeting. In my article published last week, I questioned the wisdom of City Council publicly announcing – before the bidding on the contract had actually begun – that $350,000 was being set aside for the Core Review. In fact, I was not the first to raise this issue. At the January 12th meeting, Councillor Frank Everitt complained that, because the $350,000 figure had been announced publicly, “Mr. Consultant will already know [what figure] he has to come in at.” As a means to scale this contingency figure back somewhat, he proposed that the figure should be lowered to $250,000.
Instead of addressing Councillor Everitt’s serious concern, however, both the Mayor and City Manager proceeded to stick handle the discussion into a zone of incomprehensibility, with the Mayor claiming that, without a bidder being aware of the $350,000 figure of money being set aside by Council, this “would be an incentive to come in without a competitive price.” Mr. Bates agreed with her, then proceeded to lead the topic off and away into a discussion of the “scoring criteria” for the RFP.
All in all, it was an inauspicious and disappointing beginning for a Core Review presumably about cutting unnecessary costs and for a bidding procedure that is supposed to be about getting good value for the taxpayer.
(Note: for those readers who are interested, a video transcript of the entire Jan. 12th Council meeting can be viewed via the City’s website).
Peter Ewart is a columnist and writer based in Prince George, British Columbia. He can be reached at: peter.ewart@shaw.ca
Comments
When it was announced that the City Manager would be figuring out what it would take to do a core review, I knew right away that the figure would be high. He doesn’t want a core review so, of course, the dollar amount would be set high to discourage it. Sheesh, doesn’t take a brain surgeon to have figured that one out.
As for announcing what you are willing to spend and then asking for people to submit bids, stupid, stupid, stupid. Ms. Green, might I suggest a lesson in bartering, car sales, garage sale-ing, etc.
“As for announcing what you are willing to spend and then asking for people to submit bids, stupid, stupid, stupid.”
Not exactly that stupid. Happens in construction bidding all the time. Do you recall the RCMP station? It took years of foiguring out what they would do. Estimates by quantity surveyors are public information with public bodies. The who sequence was in front of Council and the media. The figures are even published in the Major Project list for the province, the Commercial News picks all tht information up. Any contractor who knows their business knows the order of magnitude of such projects.
The bids are based on relatively detailed estimates, not on what the published estimate is. I have never seen a study which indicates that such published budget estimates influence the bidding process. Bids come in higher and lower, and sometimes all bids will come in lower and sometimes all will come in higher.
Once the money is spent there is little wiggle room for future Mayor and Councils to deviate from the “expert advise” contained in the report. This $350,000 shortcut to “good governance” becomes shackles in the future.
Where is the business plan?
Could it be this tactic is a “rationalization” for union busting? Just asking…
If the elected Municipal representatives wanted to demonstrate restraint in public purse spending, perhaps they could stand down from participating fully in another union… the Union of British Columbia Municipalities (UBCM). What are the costs to the taxpayers for that line item? Just asking… will a cost/benefit analysis of those activities be included in this core review?
While we are on the topic of austerity, would it not be more fiscally responsible to review studies performed for other municipalities of similar population, to discover themes… Did anyone try google?
gus, shouldn’t the City publish what is required in the audit (after consultation with an auditing firm or another city that’s been audited) and then see what the suppliers quote for those services? Shouldn’t companies that do this kind of work have some previous understanding of how much and what it’s for?
I also think that Council should have asked the City Manager to come up with 3 different plans to submit re: the core review. Low, moderate and full cost.
Thank you Peter, for this analysis, keep up the good work and keep sharing. Thank you to O250 for providing the medium…online and unrestricted media is society’s only saving grace.
Comments for this article are closed.