Coming Up: Special Meeting on March 5
There has been lots of conversation about the old Fire Hall downtown. So far, discussion has been at the committee level, which does not allow any decisions to get made. On Monday, Council is having a special meeting to decide what steps to take next. Following is what we are discussing and some background information.
As always, all opinions or mistakes belong to me and me alone: the do not represent the rest of Council or our City staff.
THE [SORT OF SHORT] VERSION
This building is currently owned by the City. Its office space houses our Community Social Development department and its bays house parks department, RCMP, and Technical Search and Rescue equipment.
The Community Social Development office space requires significant renovations. Our previous Council discussed what to do last spring. Rather than fixing the building up, administration recommended that the current uses be relocated to other facilities and the building be sold. A Request For Proposal (RFP) process was initiated.
This process invited companies and other organisations to make an offers on the building. Each offer included a purchase price and proposed uses for the building. These bids were then scored using a pre-determined and objective scoring system
The bidder who received the highest score was Equity Rentals. It proposed a purchase price of $855,000. It also promised renovations which included adding a floor of office space and adding a restaurant with patio into the bays. Their bid proposed raising the building value to over $5.5 million.
Council does not have freedom to award the sale to any bidders which did not receive the highest score. It has two choices:
Offer to sell to Equity Rentals. A sales contract would include conditions which insured that Equity Rentals undertook the investment proposed in its bid package.
Cancel the RFP process and retain the building. If Council does this, it cannot immediately re-issue an RFP- we would not be able to sell the building until significant time has passed.
Following are more details on the background of this process and what is being considered
MORE DETAILS
About the Request For Proposal (RFP) process
When the City sells a building, it often cares about more than purchase price. For example, it may care about how much property taxes it will receive or what uses will be put into the building. To attain these priorities, the City issues an RFP.
When issuing an RFP, the City sets a scoring system (ex: out of a maximum 100 points, up to 50 will be awarded based on price, up to 20 based on this, up to 20 based on that, and up to 10 based on the other thing). The scoring system lists the considerations taken into account and the objective measures that will be used to evaluate these considerations.
Creating the RFP and its scoring can be subjective. Council is free to set its own priorities for the project (the exception: current City policies say that at least 40% of points need to be awarded based on price). This can be a political process open to public input. However, once an RFP is sent out, any politics or subjectivity are meant to be set aside.
After the scoring system is created and approved, bidding opens. Companies and other organisations are given the opportunity to provide detailed proposals on how they will take on the project. All bidders are given the scoring system so that they can tailor their proposals to it.
After all proposals are received, they are scored by a team of City staff. Council is not involved in this scoring, and the public does not get to see the detailed proposals (because they contain information about the bidders which could damage their competitive ability if made public). Once scores are determined, they are presented to Council.
At this point, Council has two real options:
Accept the highest scoring proponent’s bid
Decide that none of the bids return a high enough value and cancel the RFP. If Council does this, it needs to wait until significant time has passed to re-issue it.
RFPs follow standardized and legislated processes used by governments across the world. Very similar processes are often used by non-profits and large companies. These processes exist for the following reasons:
To make sure bids get selected to deliver the best value.
To provides bidders with predictability. Making a bid takes lots of resources and can be expensive- it entails risk. To take on this risk, bidders need to know exactly how a winner will be scored and that they don’t have to worry about political favoritism. This leads to more bids being made which in turn leads to better value for the City.
To make sure that public resources are disposed of in a transparent, neutral, and objective manner
How scoring for this RFP was set
The scoring metric for this RFP was examined and approved at the committee level during the last Council term. It was largely based on the purchase price offered and by how much proposed renovations will raise the building’s value by.
Bids Received
Three bids were received. One was disqualified because it proposed a lease rather than a purchase. The other two bidders were:
Equity Rentals: Proposed a purchase price of $855,000 and renovations that would bring the building value up to $5,525,000. These renovations included adding a third floor to the office space and putting in a restaurant with a patio.
Grain Bin & Design Works: Proposed a purchase price of $900,000 and renovations that would bring the building value up to $1,785,000.
Due to the final value it proposed, the Equity Rental bid scored significantly higher. Council now has the options of offering to sell to Equity Rentals or cancelling the RFP and retaining the building.
So, should we sell?
I’ve been torn on this issue.
On one hand, having more office space near our core supports downtown revitalization. A patio near Muskoseepi Park will be an asset to our community. I am also a firm believer in the need to expand our tax base, and this sale would accomplish that.
On the other hand, I don’t have complete comfort with the purchase price offered or with plans to move City departments.
I’m going into the meeting with an open mind and some questions I intend to ask. However, currently I am leaning in favour of voting “yes” to this sale.
I certainly welcome any questions, comments, and feedback.
That being said: I have received additional information during in-camera portions of meetings. It is information that concerns non-public disclosures made by private companies. Disclosing it can do competitive harm to those companies. It can also get myself and the City into legal trouble- according to the Municipal Government Act, I need to keep it confidential. So, my apologies in advance if I can’t answer a question you have.
Thanks for reading!
-Dylan