If someone approached you and said they could get you a bunch of money if only you paid them a little, would you do it?
Well, that’s the situation in which city council finds itself.
A private firm named the Commonwealth Group wrote a letter to council offering to assemble an application for a federal P3 grant program that could bring about $4.2 million toward the third stage of Ray Gibbon Drive. The catch: it would cost the city $45,000 to hire the firm, with no guarantee of success.
“I look at it as being $4.2 million sitting on a shelf and I couldn’t walk away from it,” Coun. Roger Lemieux told council Monday at a meeting of the standing committee on finance.
Lemieux has been exploring the merits of a P3 as a way to finance the $17-million construction cost of Ray Gibbon Drive stage three. Some of his information gathering activities have put him in contact with Commonwealth partners.
A federal program called P3 Canada is offering 25 per cent of project costs and the deadline to apply is June 30. City staff don’t have the time or the specialized expertise to apply for the grant, Lemieux said.
“Is there a risk? Of course there’s a risk but it’s worth the risk to save $4.2 million,” he said.
Some councillors wondered whether “sole-sourcing” — the hiring a single firm without seeking competitive bids — is a wise idea.
City council is legally allowed to sole-source if it wishes, said chief financial officer Dean Screpnek. The question councillors should ask is whether Commonwealth can provide value for its fee, given that the grant program will have very specific criteria, he said.
“All things being equal, we would likely recommend that it be done by proper procurement, which would be by tendering,” he said.
The city couldn’t organize a tendering process in time for the application deadline, said city manager Bill Holtby, but it should at least call other competent firms and ask for price quotes.
“That way we would have some competition within the selection,” he said.
While tendering is generally the best way to go, there are times when sole-sourcing makes sense, said Coun. Malcolm Parker. Sole sourcing is best left for situations where the city is working with a firm it knows is reputable and has used before, he said.
And sometimes timing is a factor.
“It would be a shame if we missed out on an opportunity,” he said.
“To me that’s an opportunity that we have to take a real close look at,” echoed Coun. Wes Brodhead.
Coun. Len Bracko served a notice of motion to pursue the grant application. This manoeuvre puts the issue on council’s agenda for their next meeting on Monday.
Waving the caution flag are Coun. Cathy Heron and Mayor Nolan Crouse.
“We need to be very, very careful,” Crouse warned.
He pointed out the Ray Gibbon project is currently unfunded and the arrival of federal money would pressure council to fund it.
“We have to understand what we’re doing here,” he said. “We don’t have a funded project. We have a 10-minute [offer] letter.”
Ray Gibbon Drive will someday be a provincial highway but the city is getting paid back in irregular instalments for costs associated with making it a highway. Heron doesn’t think it’s the right project to be St. Albert’s first P3.
“It might delay getting paid back,” she said.
“I don’t like the way it happened on Monday that we got that letter from that one group soliciting us. I would much rather do our due diligence and tender it out.”
