The City of Martensville’s newest recreation facility will be operated under a third-party contract when it opens its doors this fall.
Martensville City Council voted at a meeting on Tuesday, February 20 to authorize its city manager to sign a five-year operating contract with Nustadia Recreation to manage and operate the $44.5 million Martensville Community Recreation Centre (MCRC) The building is currently under construction.
The city administration and Nustadia have been negotiating the terms of the operating contract for the MCRC since the end of November, 2023. Nustadia has also been assisting city officials plan for the facility’s opening under the terms of a ‘pre-operating agreement’ signed between the city and the company last November.
Nustadia Recreation manages and operates 25 facilities in communities across Canada, including Merlis Belsher Place in Saskatoon and Evraz Place in Regina.
While the details of the operating contract are confidential, several highlights of the agreement were unveiled publicly at the February 20 council meeting.
These include:
* Five-year contract with a five-year renewal clause;
* $100,000 annual management fee paid by the City of Martensville to Nustadia. (This clause includes annual fee increases reflecting the Consumer Price Index to a maximum of 5%);
* The contract can be terminated by either party with six months notice;
* Nustadia assumes all operations of the facility, including hiring staff, ensuring competitive purchasing bids; and administering lease agreements for vendor and advertising space in the facility;
* Nustadia will earn commissions on advertising contracts negotiated by Nustadia;
* The contract contains clauses on insurance and indemnification to ensure Martensville’s risk and liability is covered and understood;
* Operating budgets for the facility will be set jointly by a committee made up of Nustadia staff and City of Martensville staff;
* Operational issues will be addressed by a joint committee of Nustadia staff and City of Martensville staff;
* There will be a joint bank account that Martensville adds money to and Nustadia pays operating expenses from;
* Nustadia will keep accounting records on behalf of Martensville;
* For the first two years, any deficits and surpluses are the responsibility of, or belong to, the City of Martensville;
* Starting in the third year, deficits or surpluses beyond what was budgeted for is a shared responsibility between Martensville and Nustadia, with a maximum for Nustadia of a percentage of the management fee;
* The operations of the new MCRC facility will require a separate audit. The financial information in the MCRC audit will be consolidated into the overall financial information for the City of Martensville annually;
* Nustadia agrees to honour all pre-existing sponsorship agreements negotiated by the City of Martensville.
In addition, any donation amounts collected, or yet to be collected, by the Martensville Community Recreation Project volunteer fundraising group will remain with the City of Martensville, with the final decision on how those funds are allocated in the hands of city council.
Martensville City Manager Tanya Garost told council at the February 20 meeting that the six-month termination clause in the operating contract is in place for the protection of both parties.
“If, for whatever reason, the city opted to terminate the contract, we would need an adequate period of time to ensure a seamless transition of operations,” said Garost. “Six months would allow us the time we need.”
Garost noted there are “no qualifications” associated with the termination clause.
Martensville Deputy Mayor Jamie Martens, who chaired the February 20 council meeting in the absence of Mayor Kent Muench, said while she has some reservations, she believed the proposed contract would benefit Martensville taxpayers.
The MCRC will be the first city-owned recreation facility to operate under a third-party contract. Other facilities, including the Martensville Athletic Pavilion and Martensville Sports Centre, are staffed by City of Martensville employees who are members of the Canadian Union of Public Employees (CUPE) Local 2582. Delegations of CUPE Local 2582 members had previously expressed concerns about the proposed partnership with Nustadia during two city council meetings last fall, one on November 7, 2023 and the other on November 21, 2023.
At those meetings, councillors listened to and responded to the workers’ concerns. They noted that the city will continue to operate its other facilities with civic employees. Councillors said the size and scale of the MCRC, and the need to ensure the best deal for Martensville ratepayers, prompted the decision to explore third-party options for operating the new facility.