THUNDER BAY — City council’s quality of life standing committee would rather have the municipality operate the indoor turf facility, rather than have a private company take it over.
“There is one thing that is an absolute no-go for me: I will not support a third-party for-profit carrier,” Coun. Andrew Foulds said at Tuesday’s meeting. “I mean, the citizens of Thunder Bay are investing 36 million dollars of their money, and I, in particular, I’m not interested in an out-of-town for-profit organization taking money.”
“So that’s a non-starter for me.”
City staff presented their report to the standing committee, asking for members’ feedback on whether the indoor turf facility should be operated by the city or have a third party take on that responsibility.
Kelly Robertson, the city’s commissioner of community services, listed off several pros and cons for both a city-run facility and a third-party-operated model.
For instance, she said the city has experience managing and operating several indoor and outdoor recreation facilities, and has many existing policies, procedures and supports in place to guide a city-operated project.
The downside of a city-run operation is that the actual demand versus the anticipated demand does not give city staff enough information on how the facility will be used “during the weekdays, daytime in the peak season,” and the limited demand in the off-peak season during the summer.
“We need to do more program development there to optimize the available facility,” Robertson said.
She said the operating budget will be informed by bookings and fees, which she considers low-risk due to the high demand for the facility in the peak season.
Another drawback Robertson highlighted is that the city doesn’t have the means to market the facility.
On the other hand, she said there is active interest from other parties.
“The vast majority, the very vast majority of them were from for-profit entities, and I just want to make that understood so when we say there are viable third-party service providers, the vast majority of them would be characterized as for-profit organizations,” city manager John Collin said.
According to the city report, Thunder Bay received four submissions from its request for expressions of interest. Three submissions were from private sector operators, and one submission was from a non-profit operator. Two of those submissions were from entities outside of Thunder Bay, while the other two submissions were local.
Two proponents currently manage and operate indoor turf facilities.
Some benefits to having an operator run the facility, Robertson said, were potential increases in operational efficiencies, improved revenue production, reduced operational cost, sharing of operational risks and an expanded inventory or program services that would otherwise not occur.
“The con is, I think, we would need to question in some cases the local knowledge of some of these proponents and their commitment to our local goals and our local community,” she said.
“The other thing is that when we enter into third-party operations, there has to be a willingness to give up or release some direct control over the operation. So, in a way that might be considered a con for the city, of course, the third-party operator would consider that a plus, that they typically want to see increased flexibility.”
Coun. Shelby Ch’ng said to hand the facility over to a private for-profit company “to reap the rewards” would not go over well with the taxpayer “footing the bill.”
“I like the idea of having control over the facility as well as a healthy reserve for future capital investments,” she said. “One of the things that I’ve realized around the council table for the last 10 years is that there are some buildings and facilities that we haven’t adequately put funding aside for, and without pointing any particular building or department out, we all know who they are.”
“I just don’t want to see a future council in that same position. I want them to have a healthy reserve fund to say, ‘if we need a new roof, we can do it,’ and not have to go back to the tax base again.”
Although Collin said he likes the idea of public-private partnerships, he did note those partnerships only work when both parties have “skin in the game from the beginning.”
“To have a private organization come in after the capital has been expended leads to basically a for-profit organization trying to make a buck,” he said. “As much as I am a fan of public-private partnerships, so long as they’re from the ground floor, I am not a fan of third-party service providers in this particular space.”
Staff’s initial report was for information only, and there was no recommendation. Administration’s intention was to take committee comments and return with a recommendation at a later date.
