CINCINNATI CITY COUNCIL S FINANCE COMMITTEE MARCH 28, 2016

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1 CINCINNATI CITY COUNCIL S FINANCE COMMITTEE MARCH 28, 2016

2

3 SMALE RIVERFRONT PARK GROUNDBREAKING SEPTEMBER, 2008

4 SMALE RIVERFRONT PARK WAS CONSTRUCTED WITH A BLEND OF FUNDING SOURCES AND PROCESSES PUBLIC BIDDING $25 million of City capital funds ($13 million Federal process & $12 million City bidding and procurement process) + Master Service Agreements (MSAs) $15 million TOTAL CITY CAPITAL FUNDS= $40 MILLION

5 MASTER SERVICE AGREEMENTS MSAs are publicly advertised and competitively bid by the City's Purchasing Division for use by all City Departments every one to three years. MSAs are NOT no-bid contracts. They establish a list of qualified contractors from which city departments can seek cost proposals for individual bodies of work. Work included in MSAs typically cover such trades as concrete construction, electrical work, roadway work, and general maintenance/trades.

6 MASTER SERVICE AGREEMENT REQUIREMENTS These contracts include typical city requirements including paying prevailing wages and bonding. Wage rates are determined, monitored and enforced by Contract Compliance (now the Department of Economic Inclusion). The Purchasing Division reviews each cost proposal submitted, and issues a purchase order for each body of work under MSAs.

7 MASTER SERVICE AGREEMENT DOCUMENTATION Each cost proposal for work requested by Parks under a MSA is assembled by the MSA contractor, reviewed by Parks and submitted to Finance for approval. No work under the MSA can proceed until Finance has issued a purchase order. Documentation includes a itemized cost break down, detailed proposal and scope of work. As work is completed, the contractor submits invoices for payments accompanied by the appropriate affidavits.

8 USE OF MASTER SERVICE AGREEMENTS (MSA) The use of MSAs for various construction activities has been common practice for years and an accepted way to carry out capital improvements. Those processes and procedures remained in place during the life of the construction of SRP (May 2008-June 2015). New procurement practices have been put into place which will limit the use of MSAs in the future. However, these procurement policies were changed by City Administration after park construction was completed.

9 BONDING (MSA) Bonding is part of the MSA process --- monitored by the Purchasing Division. Bonding was in place when the contract was executed. On occasion, some of the projects may have been under-bonded. When informed by Purchasing, contractors increase their bond. There is no further risk since all but four (now fully bonded) of the dozens of MSA bonds in place for SRP construction have now expired. Bonds are only good for one year after a project is completed. All construction was insured by each contractor. A bond's purpose is to guarantee that the contractor will finish the project.

10 MASTER SERVICE AGREEMENT ( ) A short exchange to and from Parks staff in March, 2012 referenced a statement voiced in a telephone conversation between a Parks staff member and a Purchasing Division staff member who said that the General Maintenance MSA was only for repairs and not for new construction. Although we acknowledge that the Park s staff did not follow up or initiate a revised process, we have no recollection that the Purchasing Division pursued its concern that we were not abiding by a more formal contract process for new construction activity. Further, purchase orders continued to be approved for this work.

11 THE CINCINNATI PARK BOARD & THE CINCINNATI PARKS FOUNDATION In 1995, the Cincinnati Parks Foundation was established as a 501(c)(3) non-profit with a mission to build broad-based private/ public partnerships supporting the conservation and enhancement of our City's parks and greenspaces. Park projects which are in need of financial support are identified. In response, the Parks Foundation and its Board of Trustees meet to devise a business strategy for the projects they elect to support; and they execute that strategy.

12 USE OF PRIVATE DOLLARS BY THE PARK BOARD Over the years, previous Mayors (Qualls, Luken, and Mallory), have asked the Park Board, its Director and staff to assist them with their visions to make Cincinnati internationally known, enhance business opportunities, increase real estate values, and then execute the building of a 45-acre park on the river a project that has been on the books for almost 50 years. The Park Board, Director and staff accepted their challenges by executing their visions. Smale Riverfront Park, which instantly became the city s iconic front door, is only one example of the Park Board s competence to execute with excellence. Many of these initiatives required the expenditure of private dollars for travel, sponsorships, program meetings, and donor cultivation.

13 USE OF PRIVATE DOLLARS BY THE PARK BOARD Private Endowment Funds are used to grow and expand Cincinnati s nationally recognized parks system and its many program offerings. This includes travel by Park officials to determine the feasibility of new Parks initiatives and events, advocate for Federal support of our parks system, and cultivate donor engagement and international relationships with Sister Cities. The Park Board s Sister City collaborations have resulted in over $1.8 million for Cincinnati Parks. NO PUBLIC TAXPAYER DOLLARS WERE EVER USED FOR THESE PURPOSES. Our Park Director s membership at the Metropolitan Club was a venue for the director to meet and confer with public and private partners, elected officials and prospective donors to our Parks projects. The expense of those PRIVATE dollars plus the PRIVATE dollars used for travel and cultivation over the Park Director s 16+ years resulted in his raising over $80 million for a number of Parks projects including Smale Riverfront Park.

14 PRIVATE FUNDING AT SMALE RIVERFRONT PARK The Carousel/Anderson Pavilion and other phases of SRP were constructed with private funds. The construction management agreement for the Carousel building ($20 million) was publicly bid through an RFQ/RFP process which identified the lowest, best bid. The work was then contracted by the Parks Foundation with the successful bidder. The remaining projects that received private funds were contracted by the Foundation and included typical city requirements such as prevailing wages.

15 THANK YOU!