The City of Penticton will be going ahead with a renewed deal with Spectra Venue Management after council voted unanimously in favour of the deal Tuesday evening.
Staff recommended council vote to renew the city’s contract with Spectra to run the South Okanagan Events Centre campus without going through the usual request for proposal process for its third five-year contract.
When council struck its second deal with Spectra in 2013, the city did run an RFP process, but ultimately found no one could offer a better deal than Spectra, which had already begun to build its profile in the city.
Five years later, staff suggested there would likely be no better offer once again, and with 10 years operating the SOEC campus, staff said Spectra was even more entrenched in the community.
Jonathan Huggett, a third-party contractor out of Victoria who reviewed the performance of the SOEC, spoke to some of its successes.
“For a city of this size to be getting $25 million spent in this facility is quite amazing in terms of what is being done there,” he said. “The economic activity shows you we’re getting direct economic impact from this facility of over $20 million, indirect at 10 million, or at 10.6, induced at three-and-a-half (million) — $35 million of economic impact and 378 employment positions.
“So you’ve got to say that this is pretty good. Often I get hired because something has gone wrong, and so I’m sitting in front of a council, and this is kind of an unusual position for me to be saying ‘actually, things are going really well.’”
The proposal to renew the contract with no RFP process saw no resistance from council, with Coun. Campbell Watt eschewing the old adage that “if it ain’t broke, don’t fix it.”
“I think this is ‘if it’s running fantastically well, why change it?’ I think Mr. (Dean) Clarke and his team … do an amazing job. I think they prove themselves as fantastic operators,” Watt said.
Staff did suggest a few changes to a renewed contract.
Currently, the city pays $272,000 annually for Spectra’s services, but staff suggested adding inflation to that price, starting at $272,000 to be increased annually by a maximum of three per cent.
The current contract also offers a bonus or penalty based on how well or poorly Spectra performs, which staff are now suggesting be capped at $100,000 for the bonus and killing the penalty altogether.
About $150,000 currently in the relatively untouched marketing fund the city paid to Spectra will released to the city by July 31 this year in the new deal. Moving forward, the city-funded marketing purse will be replaced with cash contributions for any SOEC-related expense.
Spectra first took on operations of the SOEC in 2008 and won its current contract in a request for proposals process in 2013.
Over the course of the current contract Spectra has brought consistently increasing numbers of events to the SOEC, from 192 in 2014 to 245 in 2017. The net operating income has remained relatively stable operating at a $1 million loss each year. That ranged from $1.115 million lost in 2016 to a $1.041 million loss last year.
In food and beverage, the gross income complex-wide has steadily increased, from just over $2 million in 2014 to nearly $2.9 million last year.
Staff also suggested the city could run a new RFP process for the contract or forego a third-party operator in favour of running the complex directly.
However, staff said running a new RFP would likely not produce a better deal for the city, and said the city does not have expertise or resources to operate the facility.