The Invest Medicine Hat offices on Fourth Street in downtown Medicine Hat are shown on July 21. -- News Photo
cgallant@medicinehatnews.com@CollinGallant
City council will still have to approve the idea of a privately-operated land sales and economic development department next month before the city finalizes any contract with the single applicant, senior municipal officials told the News on Wednesday.
Questions have swirled around a process that calls for proposals to operate Invest Medicine Hat services in the private sector, and which ended Monday with only one bid coming from a company formed by employers in the department.
City manager Bob Nicolay described the process that’s come under intense scrutiny in the media and public as exploratory, and done with the approval with council, but stressed no official final decision has been made.
“It will be evaluated to determine if there really are advantages to pursuing an outsourcing or re-contracting,” he told the News on Wednesday.
“There’s been no decisions made whether we will contract this out, or under what circumstances. Because there was a single bid, it will require council approval.”
Citizens, business groups and municipal governance experts have expressed concern about a “request for proposals” process that the News first reported on last week toward finding a private-sector operator to handle the duties of the city division.
Sources have told the News the end goal from the city perspective is to potentially export land sales to the private sector, where a more commissions-based approach to compensation may drive council’s stated goal of improving land sales as a driver to broaden the tax base.
Nicolay didn’t touch on the objectives, but said contracts would certainly include compensation schedules and potential clauses to end the contract.
He said council approved the RFP process in mid-May and it appears on public-sector tendering websites on June 15.
Several high profile candidates have come out against the RFP, which only became general public knowledge when the News first reported on it less than two weeks before it closed on July 19.
The seemingly unadvertised process was never discussed in an open council meeting, documents to potential bidders have “conflict of interest” clauses that differ from standard city offerings, and a company formed by three city employees, Orka Management, was the only one to put in a final proposal.
Nicolay said all prudent steps have been taken, and likened the ability for Orka to compete as being similar to hiring an internal candidate for a promotion.
“You don’t know if the cost-benefit is positive until you see the results of the tender,” said Nicolay. “Our intention is now that since council will have to make a decision decide if something should get contracted out, and if so, what and to whom. We’ll provide them enough information to make an informed decision.”
A “request for proposals” process is unlike a traditional bids-and-tender process as it doesn’t ask for set prices on set projects, but rather asks companies to suggest how it would meet contract’s objectives.
In the Invest RFP, documents describe functions currently done by the Invest office, but also suggest a range of “value add” operations that could be considered, including traditional city operations, like managing the city’s contract with Tourism Medicine Hat, parking services, intergovernmental relations and others.
The process will continue on a general timetable published within the RFP documents, said Nicolay.
The bid will now be evaluated by a third-party advisor, MNP, and city staff this month, then a shortlist of applicants, in this case Orka Management, will present to administrators on August 9.
A decision item will be prepared by city staff for council’s approval, likely at the Aug. 16 city council meeting. If approved, 10 days are set aside for negotiations and a final contract could be ready to be signed by Sept. 2.
