Submitted by Suanne Z. Thamm
Reporter – News Analyst
July 23, 2020
The Fernandina Beach City Marina has been the cause of heartburn for the City, local residents, and boaters alike over the last four years, following the disruption to operations and finances in the wake of Hurricane Matthew. Westrec has been operating the City Marina since January 15, 2010, when it was selected by the Fernandina Beach City Commission (FBCC) following an extensive search. However, relations between the City and Westrec have come under strain in the past year as more issues over marina maintenance have arisen.
Earlier this year, the City of Fernandina Beach issued Request for Proposal #2020-02 for Managing and/or Leasing Marina Facilities in an attempt to determine the interest of other firms in operating the Fernandina Harbor Marina.
Five proposals were received on April 30, 2020: Coastal Marina Management, Founders 3 Management, Mobius Marina Management, Oasis Marinas, and Safe Harbor Marinas.
Westrec was provided the opportunity to review the submissions and offer a proposal.
Stantec Consulting Services, Inc. was contracted to provide a Financial Review of the marina management proposals by evaluating and ranking the proposals to assist in the determination of which proposal best suited the financial interests of the City. All of the proposals were projections of revenues and expenses: none of the management teams offered guarantees of the revenues or projections. The Stantec review was intended to provide a comparison of the projected information as presented by each management team. The Stantec report ranked the Oasis Marinas proposal in the best interests of the City.
All proposals, the Westrec response, and the Stantec report were presented to the Marina Advisory Board (MAB) for consideration at the MAB June 22 meeting. Prior to the meeting, and based upon the Stantec review, preliminary discussions were conducted with Oasis Marinas officials, and an invitation to introduce themselves at the June 22 Marina Advisory Board meeting was extended. Westrec officials declined to participate at the June 22 MAB meeting. The MAB, in general, reiterated support for a previous endorsement to allow Westrec to operate for an entire year with a fully functioning facility, following Matthew-related repairs.
The City conducted additional discussions with references and others familiar with Oasis Marinas operations. The City Manager reported that one local resident, with previous time in Annapolis and familiar with Oasis Marinas operations, offered support for Oasis Marinas, specifically stating, “I am currently a slipholder at FHM and resident of Fernandina Beach, but am from Annapolis. I’ve stayed at several Oasis Marinas over the years and am aware of the quality service you all provide. Would like to see Oasis manage FHM and plan to encourage our city commissioners to that effect. If there’s anything I can do for you on the ground here, please let me know.”
City Manager Dale Martin recommended to the FBCC at their July 21, 2020 meeting that they award Oasis Marinas RFP 2020-02 for managing and/or leasing the City Marina and allow Martin to move forward with negotiating a contract. Westrec would then receive the required 90-day notice of the City’s intent to terminate their contract.
A previous effort to oust Westrec in 2012 failed on a 3-2 vote.
When the question of moving forward with Oasis was put before the FBCC on July 21, 2020, Commissioners voted 4-1 to approve the action. Commissioner Chip Ross, reported to the other Commissioners and the public that he had spent significant time investigating Oasis and the other RFP respondents. He said that he was convinced that Oasis had accurately represented their experience and that they were capable of performing the kind of work the City required of a marina operator. He checked references and talked with other entities that had experience working with Oasis.
Oasis Marinas management team attended the meeting and expressed willingness to engage with commissioners on any questions they might have.
Commissioner Mike Lednovich asked which of the 30 properties Oasis manages had not been able to meet revenue expectations. CEO and Founder Dan Cowens replied that difficulties occurred 3 times because promised improvements from property owners did not materialize. He added that in Year One the other properties under their management have seen revenues increase a minimum 30 percent.
But then it was Vice Mayor Len Kreger’s turn to speak. Kreger had no criticism of Oasis, but significant criticism over the process that was used to recommend them. He cited language from the RFP that laid out a process that included an Evaluation Committee to evaluate technical capabilities, experience and financial components. He said that no such committee had been formed and that it appeared that Oasis was being recommended solely on the basis on the Stantec financial analysis.
”Again, It seems to me, we do an RFP on behalf of the City, and it goes off the rails,” Kreger said. “There should have been an Evaluation Committee, all of the respondents could have been invited, and we could have questioned them also. I read Oasis’ proposal, and it looks like they have done great work. But I would have liked to see the City follow through with what the RFP said we were going to do. I won’t support this proposal tonight.”
Commissioner Chip Ross shared his research into Oasis with Commissioners and the audience. He also reminded Commissioners how the marina management issue had gotten to the current state. “We gave [the City Manager] the flexibility to negotiate a new contract,” Ross said. Ross reported that he had contacted 6 marinas that Oasis operates to see how Oasis handles marketing to attract transient boaters. He found that Oasis was “far superior” to current marketing efforts led by Westrec. He also looked into level of service that Oasis provides. Ross cited positive reports from marina owners and boaters.
Ross said that his biggest concern was maintaining infrastructure. He said that Oasis clients have said that that they do an excellent job of both maintaining and improving infrastructure. Ross said that was the most important criteria from his perspective. “We’ve just invested $14.5M in our marina and we’ve got to maintain it,” he said, adding that it has not always been that way in the city marina in the past.
Ross said he was “very comfortable” with Martin’s recommendation and credited the City Manager with great hiring decisions during his time with the City. Ross moved to approve the action and was seconded by Lednovich.
Kreger continued to express concerns over the failure to follow the RFP.
Genece Minshew, a candidate for the fall FBCC races, spoke from the audience. She had previously emailed a lengthy letter of concern to Commissioners regarding this action. She concurred with Kreger’s criticism of the process. With respect to Oasis, she said, “These folks put on a great presentation [at an earlier meeting] and I’m sure that they do a great job operating marinas. But that’s not the point I’m trying to make. The City has not done the proper due diligence they need to do before you award a multi million dollar contract. It is very disappointing to me that you would award this RFP tonight without doing that due diligence.”
Minshew also expressed her disappointment that despite sending each commissioner a detailed letter with suggestions on how to correct the problem, she had only been contacted by Ross and Kreger to follow up. She said that she believed that any citizen who takes the time to forward input should at least be accorded a thank you. [At the end of the meeting, Commissioner Lednovich apologized to Minshew for not acknowledging her letter.]
Minshew asked that the vote be postponed until the appropriate procedures could be followed. There was no reaction from Commissioners, and Mayor John Miller called the vote. The item passed on a 4-1 vote, with only Kreger voting in opposition.
The morning after the meeting, City Manager Dale Martin sent an email to the Commissioners which he later forwarded to the media in which he accepted responsibility for not following the selection process described in the Request for Proposals for the Marina Management/Lease effort. He also apologized for that misstep. Martin wrote,
“In an effort to correct that error, I am going to appoint an Evaluation Team as indicated in the original Request for Qualifications. The members of the Evaluation Team will be in line with the suggestion offered by Ms. Genece Minshew in her previous correspondence to you: the City Attorney, the Comptroller, and the Airport Manager. Documents related to the review of the proposals were included in last night’s agenda packet, to which the Evaluation Team has access.
“The Evaluation Team will solicit input from the entire Marina Advisory Board at the Marina Advisory Board meeting on Monday evening. Using the information gathered at that meeting, the Evaluation Team will review the proposals submitted, the Westrec response, and the Stantec review. At an appropriate time, the Evaluation Team will convene to formalize the ranking of the proposals and submit a recommendation to the City Commission for additional consideration.
“Despite City Commission approval of Resolution 2020-02 last night, I will forego any action related to that Resolution until given appropriate direction by the City Commission.”
This article is inaccurate in its conclusion. The City is back to square one because the RFP evaluation process was not handled properly. I have spoken to two FB City Commissioners, both of whom will push to add a member to the Evaluation Committee who has expertise in the marina business.
The members appointed to evaluation board have no experience running a marina. The MAB had no input into either the RFP development or the selection of the preferred vendor. Just accept the decision of the FBCC. I’m still trying to figure out what the emergency is to get rid of Westrec. Common sense would dictate that Westrec be allowed to run it for at least 6 months to obtain some realist numbers with someone familiar with the marina and the construction history. Bringing a new vendor in with no corporate knowledge of our marina appears to be very short sighted.
This was the correct decision, albeit a late one, to go back to the start of the RFP process and do it right. Oasis might in fact be the best qualified going forward, but having an objective evaluation committee is key to such an important decision. I would hope there would be others appointed to the committee other than two individuals who report directly to the City Manager who has clearly made his preference known and, for reasons unexplained, chose to fast-track and circumvent a process that was outlined and has served the city well in the past.. Not intended to question the integrity of the airport manager and comptroller, but it puts them in a very difficult spot. Have Kevin McCarthy from the MAB and two citizens-at-large (might I suggest Jim Corbett and Chris Bryan) added to the group. I also question whether the inclusion of the City Attorney is a good idea since when a final recommendation is made, there is the possibility of one of the losing bidders filing a formal protest. I would think that Tammi would have to recuse herself from those protest proceedings because of her involvement. City staff should represent the minority of the evaluation committee. After all they only make a recommendation and the final decision rests with the City Commission.
I would hope the evaluation committee would require those bidders who provided financial projections showing increased revenues and lower operating costs to provide specific details as to how those numbers were going to be obtained. The Stantec evaluation clearly stated they accepted the bidder’s financial projections at face value and none provide details as to the assumptions they used to achieve those results. With little or no skin in the game, it is easy to project a rosy financial picture. For example, Oasis projects they will achieve a 40% profit on fuel sales while all the other bidders are in the 27 – 29% range. What power do they have or do they feel the price of gasoline is not competitive among marinas and they can get that profit. Also, how are they going to achieve a 20% reduction in operating costs while still providing superior customer service? In addition to the financials, the committee needs to look at the existing portfolio and see how the FB marina fits in with that portfolio.
A key question for all the commissioners is what power are you willing to give the selected company with regards to pricing of slips and fuel. It is often said that an enterprise fund should be operated like a private business that has almost unbridled authority to set its own prices. Yet historically, the Commission has retained the authority to approve prices since the enterprise operations are still part of the city’s infrastructure and don’t operate truly independent.
Kudos to Ms. Minshew and VM Kreger for putting the brakes on this runaway train so the outlined process can be followed using best practices.