MEMO / NOTE DE SERVICE

To / Destinataire From / Expditeur Subject / Objet Mayor and Members of Council Kent Kirkpatrick City Manager Media Report Regarding Deloitte & Touche LLP File/N de fichier: Date: June 27, 2011

Recent media reports claim that, some City Councillors learned for the first time just late last week about a report that staff commissioned to review the deal. It was completed by Deloitte in 2009 and is critical of the plan. It was never shown to council. This is not correct. First of all, Deloitte was never commissioned to review the deal as reported they were hired in 2008 to contribute to the development of the evaluation criteria and subsequently evaluated the original Lansdowne Live and Senators Sports and Entertainment (SS&E) proposals for the design, construction, operation, maintenance and programming of multi-purpose sports and entertainment facilities in Ottawa. They were never hired to review the Lansdowne deal approved by Council. Secondly, the story implies that Council was not informed about Deloitte & Touche LLP earlier involvement in the process this is simply not correct. The report dated April 6, 2009 to Council (Ref N: ACS2009-CMR-OCM-0003) explicitly states that the opportunity assessment was conducted by a cross-functional team represented by City staff and third-party subject matter experts. Each team member signed a declaration confirming they had no conflict of interest and that they would adhere to the confidentiality requirement of the assessment. Additionally, Deloitte & Touche LLP and P3 Advisors Inc. were engaged to assess the business plans and financial pro-formas contained in the submissions. A Fairness Commissioner was also engaged and will be reporting separately on the evaluation process. He has confirmed that the process was carried out in an open, fair and transparent manner and free of favouritism and bias. In the same report Committee and Council were also told that: representatives from Deloitte and P3 Advisors Inc. were on the team evaluating the submissions. When these reports were before Committee and Council, Members of Council were free to request additional information on the work of Deloitte & Touche LLP and P3 Advisors Inc. or to request supporting materials. Committee and Council did ask a number of questions and there was general discussion around how the evaluation criteria were established and who was involved in the evaluation process.

Background: City Council approved a Stadium Opportunity Assessment Framework (March 2, 2009, Ref (ACS2009ICS-CSS-0018). At this time Council requested additional information and clarity on these proposals in order to gain a more fulsome understanding of the opportunities, risks, financial implications and how each project compares to other municipal priorities. On April 6, 2009, at a joint meeting of the Corporate Services and Economic Development and the Planning and Environment Committee, a report was tabled on the Assessment of Stadium Proposals OSEG (Lansdowne Live) and Senators Sports and Entertainment (SS&E) Kanata (Ref N: ACS2009CMR-OCM-0003). In this report, staff referred to a report from Deloitte & Touche LLP and P3 Advisors Inc. who were engaged to assess the business plans and financial pro-formas contained in the earlier submissions and to educate and guide the members of the evaluation committee during the assessment(s) of the proposals of this type. A Fairness Commissioner was also engaged and reporting separately on the evaluation process. He confirmed that the process was carried out in an open, fair and transparent manner and free of favouritism and bias. Again, Deloitte & Touche LLP and P3 Advisors Inc. provided information as background to educate and guide the members of the evaluation committee during the assessment(s). The results of the evaluation(s) are based on the contents of Deloitte's analysis in terms of the business plan, and it is the "results of the assessment" that are dealt with in the staff report and presentation. Key Messages: Staff were fully transparent regarding the role of Deloitte & Touche LLP and P3 Advisors Inc in helping to formulate the criteria for the evaluation of two earlier proposals and informed Council of their participation on the evaluations committee. Deloite & Touche and P3 Advisors were never involved in evaluating the current Lansdowne Partnership Plan financial model. This is simply a case of the former councillor confusing two separate issues. Again, Deloitte and Touche and P3 Advisors were involved in helping to establish the criteria through which the original two proposals (Lansdowne Live and SS&E) were evaluated. The Lansdwne Live and SS&E proposals were evaluated in accordance with criteria approved by City Council. The process was monitored under the supervision of a Fairness Commissioner. This process had nothing to do with the current financial model for Lansdowne.

Deloitte & Touche and P3 Advisors did not have any involvement in evaluating the negotiated financial model for Lansdowne. Please contact my office directly should you have any questions on this matter. Kent Kirkpatrick c.c. Executive Committee