April 3/06 Report
Actual Start Time: 9:38 am, In Camera: 11:16 am.

Present : Councillors Braden, Bruckler, Collins (Vice Chair), Mitchell, Pearson, Samson (Chair)

Absent : Whitehead

Also:

• Councillor Kelly (Item 6 only)
• Councillor McHattie (Item 6 only)
• J. Rinaldo, Gen. Mgr., Finances & Corporate Services
• G. Peace, City Manager
• C. Graham, Gen. Mgr. Human Resources
• T. Redmond, Dir. Building & Licensing
• R. Male, Dir. Of Financial Services
• C. Swenor, Planning & Economic Development
• C. Biggs, Legislative Assistant, City Clerk

Media : Hamilton Spectator (McIntyre),

CATCH : (Roberts)

1. CHANGES TO THE AGENDA

(i) Item 5.1(a) Minutes from the Dec. 13, 2005 meeting of the Committee Against Racism, Page 2, Item 6.1 - The motion made by Rhodes/Alvi should read "Committee Against Racism," not "Discrimination";

(ii) Added Report - Private and Confidential Item 12.1 - United Brotherhood of Carpenters and Joiners of America Local 18 Certification (HUR06005/FCS06039)

3. APPROVAL OF MINUTES

3.1 March 8, 2006 meeting of the Corporate Administration Committee

4. DELEGATIONS REQUESTS - Carried

4.1 Request to appear before the Committee from Michael Schurman of 2000 & Fore - Recreational Management Consulting respecting Request for Proposal - Civic Golf Course and Winter Sports Park

5. CONSENT ITEMS

( ? /Collins Carried)

5.1(a) Minutes from the December 13, 2005 meeting of the Committee Against Racism (see "Changes to Agenda above)

5.1(b) Notes from the January 24, 2006 meeting of the Committee Against Racism

(Note: Due to bulk, copies of this material have been distributed electronically to members of Council. Minutes can be accessed via the City of Hamilton website.)

5.2 Monthly Status Report of Tenders and Requests for Proposals for February 15, 2006 to March 124, 206 (FCS06016(a)) (City Wide)

Councillor Collins refers to item C10-30-05 Proposal for Workforce Management Software Required for the City of Hamilton 's Long Term Care Facilities - "cancelled - exceeded budget limit" and asks if this will be re-tendered and if not, what happens to the money that was allotted for this item. Joe Rinaldo replies that he will send an email to all the committee when he finds out what options are available.

5.3 Tax Applications Processed under Section 358 of the Municipal Act, 2001 (FCS06028) (City Wide)

5.4 Apportionment of Taxes for Various Properties in Hamilton (Ward 4) and Flamborough (Ward 15) (FCS06001(a)); (Corporate Administration Committee Outstanding

6. PUBLIC HEARINGS/DELEGATIONS
Michael Schurman of 2000 & Fore - Recreational Management Consulting respecting Request for Proposal - Civic Golf Course and Winter Sports Park
(Item 4.1)

Michael Schurman when informed of the 5-minute time limit for public presentations states he was not aware of that. Samson says he will give a "bit of a lapse." Partner David Cowan(?) accompanies Schurman.

Presentation notes:

Schurman's business, "2000 & Fore", recently submitted a proposal in response to the city's request to lease and manage the city's golf courses. It was rejected on the basis of staff classifying it as incomplete. Schurman: "We disagree with their ruling." He notes there are 5 points to consider: "(1) Did Michael Schurman and David follow the prescribed process, (2) the interpretation of the process, (3) the impact of the decision, (4) the equity and fairness to the other proponents and (5) a solution." (The committee was given a package outlining the business partners' years of experience and background and documentations re the RFP( He states that they are "currently operating 2 comparable civic owned facilities.")

The RFP process began in June 2005, and through a pre-qualifying method, 2000 & Fore won the bid to proceed. "Only 3 parties were granted the opportunity to compete ." Theirs was the only bid received by the City. The submission "took us 1800 hours, 2 of us, 3 months, 10 hours a day, . 400 pages of material, 35,000 words . value of $75,000 to put this package together."

In March 2006, a proposal was submitted to the city. It did not include one of the four required items for $250,000 for the performance security "and they disqualified us . What they had failed to recognize was that we had included a performance security in the form of a $325,000 GPS (Global Positioning System) system - $75,000 more than requested. We were contacted by Mr. (Rick) Male and we were shocked . because we believed we followed the submission instructions as they were outlined." During the time of RFP preparation, meetings were held, letters were sent and phone calls made between the business and the City, addressing and clarifying issues. One subject of a letter from 2000 & Fore addressed areas of concern which were "performance security" and "operating security." "Included in the letter was the statement that we recognize the need for security deposit and totally accept one to be in place. we want to; we think it's the right business thing to do." The 4 acceptable performance securities asked for on the RFP are a certified cheque, a bank draft, a money order, or an irrevocable letter of credit. During a phone conversation between Schurman and Male , " Mr. Male told me that any creative method that we wish to have the city consider regarding either of these securities must be included in our submission. Those are his exact words. If you have another way of doing it, put it in your submission. We did that."

The disagreement is in the wording of the RFP where the city believes it states clearly that a performance security in the amount of $250,000 must be included in the form of one of the 4 choices.

The proponent understands this, but also explains that the word "however" follows this and gives the proponent another choice in providing a performance security - " However, depending on what the successful proponent proposes in their submission, and the risk specific to that proposal, this amount may be subject to negotiation between the 2 parties and adjusted accordingly. " The proponent states "this is in direct support of information given to me on the telephone by Mr. Male . He said if you have an alternative option include it."

"As of today, 2000 & 4 has not received any written notification our RFP has been received. rejected or disqualified and yet here we are today, based on a phone conversation of March 22 nd ."

"We followed the process based on information received from Mr. Male . We have fulfilled every possible requirement of the RFP to a very high standard, including a request for security. . Our company has invested $75,000 to prepare this document, which raises the question: How does the city know whether or not we have addressed the issue of providing a performance security when they haven't considered our proposal - they didn't even open it, so how do they know? No cheque came out so they closed it."

"If the city feels we can't enter a contract without a cash supporting performance bond, let it be dealt with at the negotiation level. There's plenty of opportunity in the negotiation team to work within the RFP. Thank you very much for your time this morning."

(Presentation: 19 min.)

Motion to Receive:
(Collins/Pearson Carried)

Discussion:

Councillor Collins remarks that he doesn't have the package referred to in the presentation, and doesn't think the rest of the committee has, so asks staff for their side of the story.

(At this time, Glen Peace is speaking with Samson privately.)

Samson has been advised to go "in camera" for that discussion which involves staff. Collins responds that the RFP is a "public document . so if I ask questions about the RFP is there a problem with that?" Samson agrees to this.

Collins asks staff ( Male ) if what the proponent did is "permitted within the RFP that was tendered." Male : "I should clarify something to start with. The performance security for $250,000, what we were requiring with the proposal that was submitted was not the performance security itself, we were not asking for a certified cheque, bank draft, money order, or irrevocable letter of credit at that time, . we said that that would be required within 5 business days of notification by the city of its award of the agreement. Collins : "Ok". Male : ". each proponent shall submit with his proposal an original commitment letter issued by a bank or other insurer satisfactory to the city, stating that it will provide the required performance security if the proponent is awarded the contract."

Collins : "And was that submitted?" Male : "No it was not submitted." Collins : "That's all then."

Male : "I should also clarify that the purpose of the performance security is solely for the purpose if the selected vendor defaults under contract, it allows the city access to funds to compensate us for costs for redoing a proposal, possibly engaging a contractor at a higher cost to continue with the service. That sort of thing. Which is why we ask for a liquid type of security for that purpose. The answer to (?? Addendum #4) says that if you have something else that you would like to propose, you can, we will consider it but the option for the city to consider that was our option. If in fact we didn't find it to be satisfactory - in fact with this kind of security, GPS system, is not likely something that we could quickly get our hands on. In fact the likelihood is that the city would not likely have ownership rights to that system, probably owned by 2000 & Fore, possibly leased. but it's not something that we could easily get funds from to compensate us for costs."

Collins : "So the absence of a letter from a lending institution or bank is what really disqualified the applicant from the process." Male : "That's correct. It's my understanding that a bank does not charge for that kind of letter.". Schurman: "We do have to post the funds to get that letter."

Councillor Bruckler asks if it was indicated that the alternative was not an acceptable document.

Male : "There was no option to look at that alternative, unless they submitted a compliant(?) bid. The proposal was not accepted because he did not provide us with that letter from a bank or institution . so therefore there was no opportunity to even look at that alternative proposal . but knowing what it is, it would not have been deemed satisfactory ."

Samson points out that there are 2 sub-committee members present Councilors Kelly and McHattie .

Kelly asks Schurman why the business chose to do something different, rather than taking "the path of less resistance by going to the bank and get the letter and say here it is as per requested."

Schurman answers that the use of the funds, $325,000 was more practicable than "having a cheque sitting in somebody's desk and cost interest." And they felt they were "allowed to proceed, by that by virtue of the word ' however '. His other objection was the amount - "absolutely onerous. $750,000 in securities for basically a job that would produce $200,000 a year." So they looked for some form of option . to use their resources to the best benefit."

Kelly asks when in their dialogue with staff did they "indicate at that time that you were looking for an alternative method." Schurman: "Yes". In answer to Kelly 's question about staff's reaction to this, Schurman replies that staff's response was "submit it and we'll deal with it." Kelly : "Thank you."

Schurman: "Thank you for the extension of time."

More discussion took place among the committee and with Peace about the process and how to proceed with this appeal including going in camera. Decision was made to refer to sub-committee for golf course/ski hill, then hold a special CAC meeting on April 12 th with the sole purpose to deal with this issue, and then later to be heard at Council meeting later on that evening (12 th ).

Collins : "I just want to confirm one thing before we send it back (to sub-committee). ask staff to be very clear and concise - Had the applicants met the requirements of the tender?" Samson : You want the answer to that question? Collins : "Were they disqualified because they didn't meet the requirements of the tender?" Samson : The answer to that is yes." Collins : "Thank you."

Councilor Mitchell asks if the shortfall of $7.5 million capital improvements to be done over 10 years has any relationship to the bonding required - 10% of $750,000. Male replies that there are 3 kinds of bonding required including the $250,000 performance security, $500,000 for operating security (explains why this was "taken off the table" by using a trust account), and the last for construction work.

Councillor Braden refers to an earlier comment of there being no cost for a letter of credit. He argues there is a cost and explains this from his experience of being in a small business. Male confirms that a letter of credit costs "anywhere from 1 - 4%, but we were not asking for a letter of credit at that time."

Length of time for entire item: 41 minutes.

7. STAFF PRESENTATIONS

7.1 Contract to Award the Provision of an Electronic Document Records Management System (FCS06030/PED06102) (City Wide)  

Presentation by Christine Swenor, Planning and Economic Development Dept.

The amalgamation of former municipalities limited the ability of paper and microfilm-based records, often stored at various facilities, to be accessed efficiently by staff. The staff proposes implementing an Electronic Document Records Management System with the main objective being to improve customer service and reduce staff time and effort spent on providing this service.

Implementation scheduled to begin in second quarter of 2006 and conclude in the first quarter of 2007. Following a review and analysis of the initial phase, a plan to expand the system to Planning and Economic Development and other departments will follow.

Cost will be $1,152,500 from existing capital funds, over 3 years.

Presentation: 8 minutes

Discussion:

Collins , referring to the capital account for funding, asks exactly what fund this is.

Rinaldo : "These funds were established as part of the transition . special funding we got from the province . approved by the transition board for us to do the electronic data management system."

Collins : ".this is the first time we would have seen this - before committee and council? It hasn't gone through a budget process? It hasn't been ." Swenor : "My understanding this has been in a capital account." Rinaldo: ".It was in the reports that we did a few years ago, all the projects that we had approved for the transition. They all would have been included in that." Collins : There would have been a line item that we would have seen at that time?" Rinaldo : "Yes." Collins : "That would have been the first time that we would have received information related to this subject matter - is that correct?" Rinaldo : "We also - in March of 2004 we did a report as well."

Collins : "Questions I have in regards to the report - and I understand that we get an enhanced level of service and greater efficiencies - what do we save as a result of the implementation? Are there costs savings.?" Swenor : ".costs savings in physical storage . but most benefits are indirect benefits." Collins : "Is there a cheaper option to phase one .? Swenor : ". you may get a reduction in costs (by implementing just phase one), "but it wouldn't be like 1/3 of the cost.because you are required to purchase so much of the product." Collins : "Ok" Rinaldo : ".when we developed this process it was recommended we go with the 3 areas which have the highest potential payback per se. Collins : "You mentioned that in 3 years the operating costs are covered. I recall when we dealt with People Soft originally, there were all kinds of - I don't want to call them promises made - but there were very positive recommendations in the report, similar to what I'm seeing here today in regards to the benefits of People Soft and now as I understand it, we continue to pay increasing costs for the maintenance and the licenses and everything else that comes with People Soft. So after 3 years, I understand the first 3 are free, what would be the expected operational costs associated with maintaining this system on a go forward basis?" Swenor : "There would definitely be an operational cost, about $200,000 is the estimated cost annually. . after phase 1 there will be some decisions on whether the product is expanded and information brought forward in terms of savings that might offset that operating cost." Rinaldo : "But $200,000 - you would stay with the same 3 areas, that would be $200,000. The decision about whether council wants to expand it further will be subject to council approval." Collins : "And what if council doesn't want to start it at all? What options do we have in that regard now - if we wanted to say, you know, this is the first time we've seen it, we've tendered it out, someone's met the criteria for the tender. Do we have that clause that we usually put in all our tenders, that the city reserves the right to pull the award we give? Can someone give me an example of that, and the report is very well written and I'm not critiquing the report, but I need sort of a front line example of how the citizens of the community or customers we deal with, whether it's the business community, developers, someone coming in to deal with clerks, or building department, how do they benefit from this? Are they now, instead of standing at the counter for ½ an hour, are they there for 15 minutes? Are we reducing wait time - is that in essence what we're doing here?" Swenor defers to Tom Redmond.

Redmond : "There are a number of benefits. Having records digitised offers full service anywhere in the corporation where there is a network connection. Presently files have to be transferred to other locations or someone sent to other locations to get the files." Collins asks for an example. Redmond uses the example of zoning verifications records which are kept in Stoney Creek but all the zoning co-realtors work at City Hall, so this person would have to travel to Stoney Creek to get the information and provide the reply. The service at various centres is reduced because of lack of access to information at those centres. He adds "we will be moving around quite a bit during the next couple years while renovations take place, and this will make it easier for us. . it's a powerful . liberating thing for us to be able to say 'yah' if we have a network that can provide full service at that location." Collins then asks what is presently happening re zoning verifications and presents an example of walking into Stoney Creek service centre for a zoning document. Redmond states that there would be a day or two delay - Collins : "24 - 48 hours?" Redmond explains that there is a lot of time spent getting to those locations - Collins: "We charge for that - we charge zoning verification fees to recover our costs so there's no cost." Redmond : "Yes. .there is lost time." Collins : "We're being compensated for that. I don't want to be argumentative . I'm trying to figure out what the benefits are for us. So if we're enhancing service, are you telling me then, in having this in place we would be better prepared to respond to inquiries from the general public who are looking for information from the city. I'm trying to gauge what that increased service is. In the sense of zoning verification, instead of 2 days now, I can provide it in 5 minutes because it's on my computer - that's what I'm trying to figure out." Rinaldo: "That is the goal of this system, allowing us to retrieve the information quickly. . avoids storage costs right in the offices, as you know, office space is very expensive." Collins: I don't see that as a - I mean - that was supposed to come with faxes, scanners, computers and everything else. We have more filing cabinets now than ever before so that isn't going to change my mind. Rinaldo explains the cost ($70,000/year) of microfiche now will be eliminated and will help offset the $250,000 on an ongoing basis. So there are some operational savings. It allows us to respond very quickly.digitising records is the only way to go in this day and age." Collins : "Hmm. - I appreciate the information - I'm not confident I'm getting value for our money here. And so - with all the other needs - and you know we just went through the budget process and I looked at some of the things that didn't get funded, infrastructure related or whatever department you want to choose, and I look at this. This isn't an area of the organization, to be quite honest, that I'm looking to increase service levels. I think most people would be willing to wait 2 days or 24 hours for whatever information they're looking for, if I was to tell them it's going to cost us over the next 10 years in operating capital, $3 million, let's use that figure. And I'm sure this system will probably last longer than 10 years. And I betcha this isn't the first phase, that once we're gone, also staff and people in the audience are gone, there'll be someone replacing us and them, and they'll be proposing that we go ahead with additional fees. I'm not sold, again, that this is something that I'm supportive of in regards to benefiting the organization, where we could benefit in other areas by investing these dollars. So I don't think I can support it."

Braden : "A little bit along the same lines. What I would like to see in a report like this is some idea about a cost benefit. . When reading a report, I need numbers. The explanation that staff is giving is this is the most obvious thing, we should have done it 5 years ago. That's the message that I'm getting. I remember sitting here, 5 ½ years ago, and I heard a number of senior staff say we got to take all the reports from the small municipal centres and we gotta put them all downtown and they got to be in one place so we can get at them and it's going to be more efficient. I'm not one to argue with efficiency. The flip side of that was it was a good argument to close the functions of the municipal centres which is still a hot potato for us. And now I'm hearing that 5 ½ years ago we did something that was very modern . and now it's a new generation only 5 ½ years later that's saying the system we've got is cumbersome, it's inefficient, we're wasting our time, we gotta do this. Somewhere I'm missing something . so I politely ask what have we been doing for 5 ½ years? And the second thing is we really need to know what kind of benefit this is going to be. . developers gotta pay their way. I'm not interested in making their job a whole lot easier. There's a whole lot more things more important in this city than an impatient developer sitting there saying he wants the answer in 3 minutes. So my next question is, if this is going to be this efficient, we're running the building inspection department on an enterprise model, we're going to be reducing the cost, right? Because we're going to be more efficient with out time, and they're not going to be standing around 1/3 of the day looking for documents. But we're not going to reduce the cost of getting that stuff - I don't think. I didn't hear anybody say we're going to reduce costs of the permits. So our thinking seems to be focussing on making things easier for the development industry, and I think there's a whole lot more, a lot smarter things that we can be doing. And I deal with the building inspection department a lot, and frankly I actually like them, . good service and they're polite. but I think it's reasonable for me to ask you, give me something on numbers that's going to tell me about efficiency. (Braden speaks off mic) ". are we going to be 2% more efficient or."

Rinaldo : "In terms of absolute numbers and efficiency, having these tools clearly allows us to do more. Can we absolutely quantify it . it's really difficult to determine until you actually go through the process. In my mind there's no question that the demand for services in the building area . will require us to add more resources in that area as the city grows. .It's not only for the development industry. There's a number of other people that come in for licensing and those other areas. The microfiche technology we're using is outdated . as much as I would like to give you a number, I wish I could, 'cause I know that over the years that's exactly the questions that council ask for. . there's no question that there will be an efficiency level there that will allow us to provide a more responsive service."

Braden : "That simply isn't good enough. . we need to have your best guess. That's why we pay you the big bucks. We want to know from you what you think the impact is gonna be. I'm not looking for - it's gonna save 1000 and change. I'm looking for you to say I really think this is going to be between ¼ and ½ % increase [DECREASE?] in staff time in that particular department, cause that's something, but this is, in my book, airy-fairy. We need decision makers. If we're going to get more efficient, you guys are the front line on numbers, you need to give us something. That's not a lot for me to ask. I don't think these reports in this form should come to us again, and I hope I've made that clear. I'm trying to be respectful and critical in a positive way, but this is simply not enough."

Rinaldo : "We'll certainly attempt to develop a percentage factor for you so that you'll have an understanding ."

Councillor Mitchell approves of the report, thinks "it's absolutely great, let's get on with this . digitalisation should have been done back when this city was first formed" and recalls the efficiency in Glanbrook before amalgamation. Since then records are kept at various places "and efficiencies are pathetic . information was in 6 different municipalities . (money) should have been spent before, we got it from the province at the time of amalgamation. My disappointment is that it hasn't been done. . strongly support this."

Bruckler comments on the growth of the city and thinks this is a "Step in the right direction." Refers to increase in freedom of information requests. "I'm sure there's not full recovery costs for freedom of information requests . I think we could save ourselves a lot of money . in this aspect alone. For those reasons I would strongly support it." "Was this part of the (amalgamation) bundle?"

Rinaldo : "Yes, . it was part - I'm trying to remember, it was around $50-60 million that was identified as transitional costs, in which the province gave us about, I'm trying to remember the absolute number, 30-33 (million) towards it." In response to Bruckler' s question, Rinaldo states that they report to the province on an annual basis through this committee. "There is an expectation that in general terms there is the expectation that we would carry them (projects ) out."

Councillor Pearson : "I concur with the last 2 speakers, I will support this." She asks if they have information/comments from the 2 municipalities, Waterloo and York, which are using this system, and is it the exact same system. Staff replies that they have met with these 2 municipalities and can provide information around their benefits, they are "not quantifiable". Pearson thinks this would "help address Councillor Braden's concerns earlier" and feels that "should have been part of this report." Pearson raises the point that another efficiency of this system is that the reports and information requested and responded to would be current and up to date.

Collins : "The report doesn't give any financial savings. I would hate to learn after the fact that there are savings to be had and it's not included. I'm assuming that staff, having worked on this for almost 5 years, would have had that in the report. Is that correct? We shouldn't anticipate some number coming forward between now and council? Samson: "I don't believe so." Rinaldo does not understand the question. Collins : ".you can't quantify any savings with this; we're just talking about greater efficiencies. Then Councillor Braden suggested that we try to put something to it, and I think I heard earlier that if we wanted to use industry standard we might save 1-2 hours for staff who daily look through filing cabinets for information, I'm sure we could come up with a magic formula that would say, for all the people that are in these areas, by adding up that staff time, I could probably come up with a reduction in FTEs. Is that something that maybe we could put to the report, to try to find some savings through staff? For 2 hours per employee for all the people that are doing the filing, and that's the industry norm, then I think we could find some FTE savings with this."

Rinaldo : ".That's what we were trying to say here, we can, based on industry standards, we can give you an indication of what, what the indication is or an equivalent. Is that what you're asking? I think we can do that for you.." Collins : "Ok. And my other point is, that I heard the argument that having the service centres and retaining the 6 city halls that we have a very inefficient system where one hand doesn't know what the other hand is doing. We've lived with that system for the last 5 years. Are we finding problems in having those locations in regards to dissemination of information.?" Rinaldo : "I think it's more an inability to be able to provide the service in those locations for these building and licensing area because it's not readily available . that's also the problem here because some of the building licenses are stored in Stoney Creek . They have to retrieve them, so it's . just retrieving that information is a very onerous task . time consuming . it's a combination of all of them." Collins : " I think it was the line that we made thousands of mistakes over the years that sorta caught my attention. I would appreciate that attention, so if you could put FTE time to the filing issue that we're dealing with here, and all the staff time that we're going to save as a result that would be great to have it before council if possible."

Mitchell repeats that "it's a great news story" and offers to help with the process to "find the dollars." He mentions various areas of savings such as travelling time, mileage, efficiency to be on site, revenue coming into the city, and "we need this desperately."

Samson wants to add subsection (c) "that the mayor and the city clerk be authorized to execute an agreement with Eidenai Innovations Inc. in a form satisfactory to legal counsel ."

Samson : "Now we'll vote on the recommendation as amended."

(Bruckler/Pearson Carried)
(Opposed: Collins)

Time spent on this entire item: 44 min.

8.1 2006 Property/Liability Policies Renewal (FCS06027) (City Wide)
(Collins/Pearson Carried)

Bruckler comments on the $25 million liability coverage, and Mitchell talks about increased liability insurance rates with citizens suing the city comparing it to citizens suing themselves. Rinaldo remarks about the difficulty of getting insurance.

9. MOTIONS

9.1 Appointment of Citizens to the Advisory Committee on Immigrants and Refugees
(Braden/Pearson Carried)

11. GENERAL INFORMATION/OTHER BUSINESS

Braden comments on fees for agricultural business activities. In his constituency work and on the agricultural committee, fees are increasing, e.g. for barns, are not competitive with those in many other agricultural areas. He gives example for Brantford , fees for a greenhouse might be $2500, where in Hamilton it would be $25,000 for precisely the same thing. He raises this situation now so that it can be debated at a later date.

Mitchell informs that there are many fees that don't relate to the agricultural sector and agrees with Councilor Braden .

Samson: Now Mr. Rinaldo wanted to give us an update on the tax appeal - and he's gone. (laughter).

12. PRIVATE AND CONFIDENTIAL

Move to go in camera
(Braden/Pearson Carried)

(Added agenda item: 12.1 United Brotherhood of Carpenters and Joiners of America Local 18 Certification (HURO6005/FCS06039)

Time: 11:16 a.m.