Report to: General Committee                                                        Report Date: May 12, 2008

 

 

SUBJECT:                          Contract extension 014-R-02 Cafeteria Services for Markham Civic Centre

PREPARED BY:               Alex Moore, Extn 4711

 

RECOMMENDATION:

THAT the report entitled “Contract extension 014-R-02 Cafeteria Services for Markham Civic Centre” be received;

 

AND THAT the tendering process be waived in accordance with Purchasing By-Law 2004-341, Part II, Section 7 (1) which states…(c) when the extension of an existing contract would prove more cost-effective or beneficial;

 

AND THAT Contract 014-R-02 for Cafeteria Services for Markham Civic Centre be extended to Unique Caterers & Party Services (Unique Caterers), for a term of three (3) years with an option to renew for an additional two (2) years based on mutual agreement and with revised financial terms and conditions as provided under financial consideration section of this report;

 

AND THAT Contract 014-R-02 for Cafeteria Services for Markham Civic Centre be amended to include 8100 Warden Ave Cafeteria Services requirements;

 

AND THAT the Cafeteria Services contract include a clause that focuses on provision of services that conform to the Town’s healthy workplace environment and initiatives related to waste diversion resulting in a “Zero Waste” environment;

 

AND THAT the Mayor and Town Clerk be authorized to execute an agreement with Unique Caterers in a form satisfactory to the Town’s Solicitor and Commissioner, Corporate Services;

 

AND THAT the Manager of Purchasing be authorized to enter in a Memorandum of Understanding with the Local Food Plus (LFP) for the duration of this contract to monitor and implement the purchase of produce from local farmers as per contract;

AND THAT the Treasurer be given the authority to set aside annually up to ten per cent of the revenue from the contract to assist Unique Caterers on pricing strategies and procurement alternatives to enable the achieving of the mandates of the Corporate Zero Waste policy, healthy food alternatives and Local Food Procuring initiatives.

AND THAT the current working group continue to work with Unique Caterers and periodically report to the environmental issues committee on the progress of the Zero Waste initiatives;

 

AND THAT funds collected will be credited to the Corporate Revenue Account;

 

And that Staff be authorized and directed to do all things necessary to give effect to this resolution.

 

EXECUTIVE SUMMARY:

The Town has negotiated the contract with Unique Caterers for extension of the contract with revised financial terms and conditions with estimated annual revenue of $54k. The non financial terms negotiated relate to provision of healthy choice options in the menu, purchase of produce from local farmers certified by Local Food Plus (LFP), conformance to the Town’s standards relating to waste generation and disposal as included in the Draft Waste Policy for Food and Catering Services.

 

PURPOSE:

The purpose of this report is to obtain approval for the contract extension of RFP 014-R-02 Cafeteria Services for Markham Civic Centre for a term of three (3) years with an option to renew for an additional two (2) years based on mutual agreement. 

 

BACKGROUND:

Council at its May 14, 2002 meeting resolved to award the contract to Unique Caterers for a term of 4 years commencing on August 1, 2002 with an option to renew for an additional 3 years. The Town has exercised the option to renew the contract for two years up to 2008 and has entered into discussions with Unique Caterers & Party Services to extend the contract with revised terms, conditions that include environmental considerations.

 

The revised contract includes a provision that allows the Town to approve the prices to be charged for food, beverages and other products and services provided by Unique which will remain consistent throughout the contract. Any increase to these prices shall have to be approved by the Manager of Purchasing before it becomes effective.

 

Unique Caterers have been the Cafeteria service provider to PowerStream at 8100 Warden Ave for the past three (3) years. This contract has been dissolved due to PowerStream moving to a new location and it is the intention of staff to include this site in the contractual agreement between the Town and Unique Caterers.

 

OPTIONS/ DISCUSSION:

Unique Caterers and Party Services have been providing cafeteria services from 2002 onwards. Under this contract, Unique Caterers have exclusive rights to the kitchen area and non-exclusive right to operate the food services in or from the premises at the Town.

 

This contractual agreement does not prohibit outside groups including charities and service clubs from providing food during any ceremonies and/or other special functions held by them from time to time at the Civic Centre and any Town owned facilities.

 

The contract extension negotiations with Unique Caterers involved discussions surrounding healthy food choices, purchase of a percentage of produces from local farmers and conformance to the Town’s standards relating to waste generation and disposal as per the draft Waste Policy – Food & Catering Services.

 

 

 

Zero Waste Initiative

A draft “Waste Policy for Food & Catering Services” has been prepared by Staff pending approval by Council. Staff has been in discussions with Unique Caterers relating to conformance of the catering operations to the Town’s Zero waste initiative. Unique have expressed their acceptance to the Zero Waste initiative and have implemented some of the requirements such as usage of

  • Bio-degradable cutlery (forks, spoons, knives) & wooden stick stirrers
  • 100% recyclable paper products (cups, plates, and bowls)
  • Unbleached paper napkins
  • Minimum use of saran wrap for all Town functions
  • Replace water bottles at Town’s meetings with water jugs and glasses

The above initiatives have been included in Unique’s negotiated contractual terms. Unique has agreed to conform with initiatives referred to in the Draft Zero Waste Policy that has not implemented yet, such as:

 

  • Replace current coffee packages with an environmentally recyclable product
  • Removal of plastic straws and replace with compostable straws
  • Source Paper products that are currently 100% recyclable (cups, plates, bowls) from virgin forests

Unique have expressed their willingness to conform to any additional requirements that may be needed from time to time.

 

Healthy Choices Option

Staff have suggested that the choice of food should include “Healthy Choices” and recommended that Unique implement the following:

Transition completely to Fair Trade Coffee

Include organic products on the menu

Include organic juices as an option

Include Harmony Milk as an option

100 % No MSG (minimum use of MSG included in the contractual terms)

100 % Trans Fat free (included in the contractual terms)

 

Unique have expressed their willingness to conform to any additional requirements that may be needed from time to time.

 

Purchase of Produce from Ontario farmers

Staff has also negotiated with Unique Caterers to include a clause in the contract that would mandate Unique Caterers to purchase of a minimum of 10% on the first year with future increments of 5% each year of its material and produce from Ontario farmers. Staff have been in discussion with Local Food Plus a not for profit organization established in Toronto that links Ontario farmers to purchasers to monitor and implement the program.

Local Food Plus (LFP) brings farmers and consumers to the table to share in the benefits of environmentally and socially responsible food production.  They are committed to building and fostering local sustainable food systems by certifying farmers and processors and linking them with local purchasers. 

Certification through LFP is a win-win-win scenario.  Farmers benefit from the potential of a predictable income stream and the ability to be better stewards of their land.  Institutions benefit from the opportunity to play a leading role in the long-term economic and environmental health of our communities by reducing energy consumptions and green house gases by committing to the purchase of LFP certified products.  And consumers benefit from knowing that they're supporting their local economies, improving the sustainability of the land around them, and eating food that meets the highest social and environmental standards.

 

FINANCIAL CONSIDERATIONS AND TEMPLATE: (external link)

The Town will work with Unique on pricing strategies and procurement alternatives to encourage the zero waste initiatives, healthy choice options, and the purchase of produce from Ontario farmers. The Town has negotiated an increase of $42,000 in annual revenue from Unique. It is anticipated that up to ten percent of the revenues will be utilized to assist Unique in its transition to zero waste, healthy choice options, and the purchase of produce from Ontario farmers. 

 

Compared to the current contract of financial return to the Town, it is estimated that the annual revenue to the Town would increase by $42,000.

 

The negotiated terms are as follows; (to be paid to the Town quarterly)

 

                                                                                    Current             Proposed

                                                                                    Contract                       Terms

Percentage of Revenue on Gross Sales              1%                               5%

Percentage of Revenue on Non Town Catering *          1%                               5%

Percentage of revenue on Sales > 400k/year                 0%                               2.5%

Maintenance Fees per month                                        $200                            $350 **

Rental Fees per event at Civic Centre                            $200                            $250

Annual assessed property tax

 

*Non-Town related catering is defined as any catering that is initiated by either Town staff, members of Council or the general public for personal functions or non-Town business related  functions where food is being prepared using the Cafeteria kitchen regardless of where the functions are being held.

** To be increased annually as per CPI of each year to a maximum of 5%.

 

Contract Analysis – Comparison                                      

                                                                                    Current             Proposed

                                                                                    Contract                       Contract

                                                                                       $                                  $

Revenues                                                                      12,000                         54,000 *

Proportionate Cost of Services - Avg. **                      31,000                         31,000

 

Net (Expenditure)/ Revenue                                          (19,000)                       23,000

* Estimated based on 2007 actual revenue

** incl.utilities, maintenance, lighting, janitorial, security, other

 

The area currently occupied by the cafeteria including the kitchen, office and dining space is approximately 4,700 sq. ft., similar to the size of the day care center.  The

operating costs, based on a per square foot allocation, is approximately $31,000 for hydro, gas, water, HVAC, janitorial, security, lighting and waste collection. 

 

ENVIRONMENTAL CONSIDERATIONS:

The contract for extension includes clauses relating to providing healthy choices menu, Local Food Plus, as well as conformance to the Town’s policy on ‘Zero Waste”.

 

ACCESSIBILITY CONSIDERATIONS:

Not Applicable

 

ENGAGE 21ST CONSIDERATIONS:

Not Applicable

 

BUSINESS UNITS CONSULTED AND AFFECTED:

Not Applicable

 

 

RECOMMENDED

                            BY:    ________________________          ________________________

                                      Barb Cribbett                                     Andy Taylor, Commissioner

                                      Treasurer                                            Corporate Services

 

 

ATTACHMENTS:

Local Food Plus presentation