Council defers OBM on fee-for-service reviews to SPC
By Lethbridge Herald on June 13, 2024.
Herald photo by Al Beeber
City Hall is shown in this Wednesday photo. A July meeting of the Economic and Finance Standing Policy Committee of city council will address an official business motion by councillor John Middleton-Hope calling for administration reviews of Economic Development Lethbridge and Tourism Lethbridge.Al Beeber
LETHBRIDGE HERALD
Lethbridge city council on Tuesday voted 8-1 to refer to the Economic and Finance Standing Policy Committee on July 11 an official business motion presented by councillor John Middleton-Hope calling on administration to undertake a review of fee-for-service arrangements with Economic Development Lethbridge and Tourism Lethbridge.
Middleton-Hope’s motion called on administration to determine the following:
1. Whether each external entity is achieving its defined objectives in an effective and efficient manner at a cost-benefit to the City of Lethbridge,
2. Whether each fee-for-service agreement has clearly defined performance metrics that provide a clear, concise picture of alignment with City of Lethbridge priorities and with outcomes that correlate to the funds provided.
3. Whether, in each case, the City of Lethbridge would be best served by continuing with the existing fee-for-service model or considering other models for the delivery of such services.
4. The efficacy of existing connection points between these two entities and internal City departments as well as any potential synergies or changes that merit consideration.
His motion stated that economic development and tourism are “integral municipal activities to attract investment and foster a vibrant city” and that presently these activities are conducted by external parties that are contracted under-fee-for service agreements.
It notes that the City allocates “significant monies” each year to both operations and that “it is fiscally prudent periodically to review and assess the cost-benefits of such fee-for-service arrangements to determine the results and value being received for the public money being invested.”
The motion prompted a discussion between Middleton-Hope and deputy mayor Jeff Carlson who told the mover he didn’t think it was fair to impose something on those organizations without input, prompting Middleton-Hope to ask him several times what exactly was being imposed.
Carlson said out of fairness to both organizations and the community, the issue would be best dealt with at a committee level, noting he’d “rather work with people than impose something on folks.”
“What are we imposing on these organizations, what is it that we are imposing on them? What we’re asking them to do is to work with us, provide us insights into how they do business to ensure what they’re doing is the best possible return for the City given the funding we provide to them,” Middleton-Hope said, noting maybe the funding provided to them isn’t the right fit as was suggested during debate by councillor Ryan Parker.
“We’re asking them to work with us to examine them,” he said.
The reason for the referral to the Economic and Finance SPC, said Carlson, is to get some information from, and ask questions of, EDL and Tourism Lethbridge, again saying he’d rather not impose anything.
City manager Lloyd Brierley, saying he was going to walk a delicate line, told council “the way I understood it is could this be done through discussions at committee instead of doing an internal review? And the example I would suggest – it’s going to sting – is Lethbridge and District Exhibition over a period of 18 months and having discussions at committee and council and never quite getting to where we needed to which resulted in some change. I’m not suggesting there is any issues here or anything else,” he said, adding there could be great things going on at the organizations.
“All I’m simply saying (is) it’s a completely different level from an internal review versus a review at committee.”
Carlson responded his intent is to invite EDL and Tourism Lethbridge to discuss with the committee about the review process should it go forward, not to do a review at committee level.
He said he doesn’t “like to be sort of heavy-handed in things. I think we can accomplish everything we need to do a review but it’s just always fair and polite to say ‘how would this also work with your organization, your timelines, your capacity’ rather than say ‘we’re doing this hell or high water, it’s happening.’”
Middleton-Hope, in response to a question from councillor Ryan Parker said “these are the two largest of the fee-for-service or the organizations we have MOUs with. Why not start with them?
“It is an opportunity for us as a corporation to review all of our relationships with an abundance of service providers.
“In many cases this has not been completed in eight or more years and it has been something that has been on the horizon. It has been discussed at the administrative level for some time.. . this is simply an opportunity for us to ensure that what we are providing by way of fee for service organizations or MOUs with a variety of organizations that we are getting our full value for and that’s what the citizens of this city demand of us.”
Brierley called such reviews due diligence.
He told Parker in response to a question if KPMG did a similar analysis on EDL that “I would say having been through KPMG and other consultant reviews elsewhere on things like this, an internal review is substantially different than a KPMG review and is what I would more commonly associate with best practice and due diligence in the organization.”
When asked by Parker if administration is supportive of such a review as his colleague has requested, Brierley responded “if it’s the will of council, I think due diligence is always a good thing for exactly that reason. While some might perceive this as looking as something nefarious or ‘gotcha ya’ it’s simply due diligence and as I continue to say, and seeing is there things we can be doing differently, better or are we aligned? Are we connected? At the same time there could be things that are being done exceptionally that can be highlighted through a process like this.”
The City manager also told Parker if it was the will of council to proceed, the City would lead with its own internal resources with criteria being established and worked through.
City treasurer and chief financial officer Darrell Mathews told council the review process would cost $162,000 and take 18 months to complete.
The money is already allocated for such work, he told council.
In response to a question from councillor Jenn Schmidt-Rempel, Mathews said Tourism Lethbridge has a fee-for-service agreement while EDL works on an MOU.
“Through our budgeting and our dollar values, we determine those on the financial side as a fee-for-service,” Mathews said.
The reason for that, he said, is “those components would become a municipal service if they weren’t done by those community groups.”
In response to a question by Schmidt-Rempel on what services either organization isn’t fulfilling, Mathews said “it’s not necessarily that they’re not fully not providing the service, it’s actually going back and taking a look at things like the mandate, the performance metrics, what the value is for the money.. . there’s a number of things that we’re going to be looking at,” he said, for all groups.
“For the funding that’s coming from the municipality, it’s taking a look at what could be done and how we could look at it from the performance metrics side,” he added.
Mathews also said such reviews would look at the mandates of the organizations and see what kind of value for money the City is getting.
In response to a question from councillor Mark Campbell, Middleton-Hope said the corporation hasn’t taken the time “to do a deep dive on these organizations and others that we provide a substantial money to to perform a necessary service. What I’m saying is ‘why haven’t we done that, why aren’t we doing that?
“We are not saying that EDL or Tourism Lethbridge is not doing a good job. That’s quite the contrary. The reality is when we conduct an assessment like this, an assessment that is not spearheaded by either one of the organizations, but rather by the City, we get a different perspective. And that’s healthy,” Middleton-Hope added.
He added he “is convinced that this is what the citizens of our city are asking us to do.
“This is good business, this is good due diligence. That’s what we’re doing.”
Middleton-Hope said he wasn’t targeting either EDL or Tourism Lethbridge.
“This is a natural process.”
40-39
I was under the impression that Council evaluated fee-for-service operations at budget deliberations and a report each year.
It costs a lot of time/money to do a ‘deep dive’ on an organization – has Middleton-Hope secured this funding? Or is this just posturing?
Sniff, sniff, something is up here. It is always healthy for the bankers of taxpayer funds to review what is being accomplished, for who, and what benefit there is to the city itself. Always healthy to follow I the money and see where it has landed.
There are some strong concerns with this OBM which may have had something to do with Councillor Middleton-Hopes decision to withdraw draw it during today’s Economic Standing Policy. For example, there was a strong suggestion of wrong-doing in the motion in the guise of language calling for an “investigation.” This despite the fact there were no credible allegations warranting such in-depth probing. Also, the small matter of $135K cost of this fishing expedition despite a clean bill of health by KPMG not so long ago. In the course of his withdrawal, the good gentleman darkly mentioned “machinations” taking place behind the scenes. Maybe there’s fire behind the smoke. Or maybe the risk of a cost-benefit analysis of this cost-benefit analysis wasn’t worth taking after all. I suspect this is just the opening shot in something much more interesting. Time will tell.