ElH. A enda Item # Pa e # ROSS L. FAIR GENERAL MANAGER OF COMMUNITY SERVICES RECOMMENDATION

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1 ElH A enda Item # Pa e # TO: FROM: CHAIR AND MEMBERS BOARD OF CONTROL MEETING ON DECEMBER 9,2009 ROSS L. FAIR GENERAL MANAGER OF COMMUNITY SERVICES RE: T APPROVAL FOR SINGLE SOURCE NEGOTIATION PURCHASE OF AMUSEMENT RIDES FOR STORYBOOK GARDENS RECOMMENDATION That on the recommendation of the General Manager of Community Services: 1. That approval hereby BE GIVEN to enter into negotiations for the purchase of four (4) amusement devices from Don Darling Carnival and Concessions, Highway 21 Thamesville, Ontario NOP 2K0. 2. That approval hereby BE GIVEN conditional upon the Corporation negotiating satisfactory prices, terms and conditions with Don Darling Carnival and Concessions to the satisfaction of the City Treasurer That the funding for this purchase BE APPROVED as set out in the Source of Finance Report attached hereto as Appendix "A. That Civic Administration BE AUTHORIZED to undertake all the administrative acts that are necessary in connection with this project. That approval hereby BE GIVEN conditional upon the Corporation entering into a formal contract or issuing a purchase order relating to the subject matter of this approval. BACKGROUND Purchasing Process Approval for this purchase is requested in accordance with the Procurement of Goods and Services Policy, Section 14.4(f) Discussion The purchase of four (4) amusement rides is proposed for installation and operation at Storybook Gardens for the 2010 springhmmer season. The addition of four (4) new amusement rides presents a significant opportunity for Storybook Gardens to improve financial performance through increased ride ticket sales and increased attendance and admission revenue resulting from the new attractions the rides present. Background Information At present Storybook Gardens operates four (4) Technical Standards and Safety Authority (TSSA) certified amusement devices: the miniature train, carousel, ferris wheel, and tower slide. The train and carousel are located outside of the park and are open for use by both Storybook Gardens patrons and by visitors to Springbank Park. The ferris wheel and tower slide are located inside the park and may be accessed only by Storybook Gardens patrons. The train, carousel and ferris wheel require tickets, while the tower slide is included with admission. The City of London has operated amusement devices since the 1980's; the train was made part of the Storybook Gardens operation in the 198O's, the carousel in 2004, and the ferris wheel was installed in June The " Business Plan" recognizes the importance of rides as part of the Storybook experiences and contribution to financial viability of the park. With ride prices less then '/2 of the traditional fair prices, Storybook is well positioned to offer value to Londoners in this area as part of the services of Storybook.

2 ,'"j Itel # Pa] # 6b Impact on Revenue Through a combination of a longer ride operating season, targeted, affordable ticket prices, and the addition of the ferris wheel in June 2008, ride revenue has more than doubled since 2006, from $82,338 to almost $170,000. In 2009, more than 117,000 tickets were sold for the rides, and ride ticket sales generated 14% of Storybook Gardens' total gross revenue. Conservatively estimated, an increase of $80,000 in ride revenue with an incremental labour and maintenance cost of $40,000 of the new rides will contribute $40,000 to the bottom line in This estimate accounts for ticket and ride pass sales only, and does not include any impact the rides could have on increasing park admissions and other revenue areas such as food sales. Storybook Gardens Ride Users and Revenue, 2003 to 2009 Rewnue dxcketssold - Loo! LA!oo!, L, '!oo! L00,'!00! $86,958 $110,368 $85,940 $82,338 $116,236 $119,479 $167, Visitor Input Recent visitor feedback to surveys and questionnaires has provided some helpful input on how Storybook Gardens visitors view the rides. Each of the rides showed up in the top ten (IO) responses to the question "What do you enjoy the most at Storybook Gardens?" in the 2008 Children's Survey Children's Survey: What Do You Enjoy the Most at Storybook Gardens? I "V E I Like It Q It's Okay 20 0

3 In the same survey, "More rides" was the #1 response to the question "What would you add to Storybook Gardens?" What would you add to Storybook Gardens? (unaided) = : : e New Rides The rides being considered for addition to Storybook are a Kiddy Swing Ride, a Revolving Elephant Ride, a Giant Slide, and an Inflatable Obstacle Course. The rides are currently owned by Don Darling Concessions and Rides, and operated as part of a carnival operation that travels to different sites across Southwestern Ontario. Mr. Darling has been contracted by the City in the past to provide ride operations at different special events. Mr. Darling is selling all of his rides. The four (4) rides being considered are a good fit for the available space, age group, and overall theme and setting at Storybook Gardens. The rides are all currently TSSA certified amusement devices. Each of the rides was built in the 198O's, making them significantly newer than our existing rides (train at 1912, carousel 1963, and ferris wheel 1970.) Licensing and Dossiers All four (4) rides have current dossiers filed with TSSA and are classified as "active" rides in the province of Ontario. There are no current work orders or outstanding action items on any of the rides. Ticket Options and Pricing The addition of the new rides would not affect the price of admission to the park. Visitors to Storybook Gardens would continue to have the option to pay for admission to the park without choosing to purchase ride tickets. Visitors choosing to ride the rides would have the option of purchasing individual tickets, bulk tickets at a reduced rate, or a new ride day-pass, giving the visitor unlimited rides throughout the day. In addition, a "ride option" would be available for season's passholders, offering inclusion of the rides for an addhional fee when an annual or summer pass is purchased. Ride Safety and Risk Management The four (4) new rides being considered are simpler and less maintenance-intensive rides than the train, carousel, or ferris wheel. The mechanical rides are straightfoward horizontally revolving rides with a single axis point. The slide has no moving mechanical parts. The inflatable challenge course presents some different maintenance and inspection issues that concern the fabric, air compressor, and anchor straps and anchor points. Regular inspections by qualified personnel, regular preventative maintenance, ongoing renewal, and well-trained and supervised operators are all crucial to safe operations of the amusement rides.

4 Storybook Gardens currently arranges annual contracts for the set-up, inspection, servicing and maintenance of its rides by certified amusement device mechanics, who are qualified and experienced in the operational requirements of each type of amusement device. With the addition of four (4) new rides, the Storybook Gardens expense budget will be adjusted to account for additional servicing and inspections by the certified mechanics, as well as additional training and supervision for Storybook Gardens ride operators, Don Darling Carnival and Concessions has agreed to assist with the initial set-up of the rides as well as with training of staff in the safe operation and daily inspections of each ride. Prior to opening each season, the amusement rides are inspected by certified ride mechanics and by Inspectors from the TSSA. Daily inspection checklists are completed on each ride by the ride operators prior to opening. Regularly scheduled inspections and maintenance are carried out by the certified ride mechanics throughout the operating season. Ride Safety data collected from the American non-profit public safety organization Safer Parks suggests that the four (4) new rides being proposed for Storybook Gardens reflect low rates of reported incidents or injuries. These statistics have been reviewed with Risk Management to estimate our insurance costs which may increase by approximately $1,000 per year. Purchase and Installation The rides are currently available for purchase. Staff recommend purchasing the rides now in order to secure them. The rides would be stored over the winter and set up in time for the opening of the spring-summer season in May The rides would all be located inside Storybook Gardens, in the "Enchanted Forest" chapter, utilizing empty space between the ferris wheel and the animal care building. Site preparation for the rides is fairly minimal, consisting mainly of some leveling and grading and installation of electrical connections. With the ongoing reduction in the number of zoo animals at Storybook Gardens, one older animal pen has also been demolished, creating additional space for the new rides. The birds that were housed in this pen have been relocated to more spacious enclosures that are set further apart from the amusement ride area. The mechanical rides are electrically powered and are quite quiet while operating, and will not present a disruption to either Storybook Gardens visitors or to users of Springbank Park. Financial Impact Funding for this purchase is available in Capital Account RC2642. The purchase price of the rides is $75,000 with an installation and site preparation cost budgeted estimated at $15,000 for a total capital cost of $90,000 for this project is provided for as per the attached Source of Finance Appendix A. Annual revenue is conservatively estimated at $80,000. The annual operating cost is estimated at $40,000 with a net contribution to the program of $40,000 annually. The payback on this investment is 2.25 years. Acknowledgements This report was prepared by J. Riddell, Manager Storybook Gardens, Joe VanKoeverdan, Manager or Recreation Business Development and Attraction with the assistance with Terri Sue Wyatt, Procurement Officer, Purchasing and Supply. I SUBMITTED BY; %A$;$ MIKE TURNER MANAGER, FINANCIAL SERVICES AND ACTING DEPUTY CITY TREASURER f j Q! RECOMMENDED BY: ~ ROSS L. FAIR GENERAL MANAGER OF COMMUNITY SERVICES c. Martin Hayward, Director Financial Planing & Policy, & Acting Deputy City Treasurer Joy Jackso% Manager, Risk Management

5 APPENDIX 'A'?Yo9197 Chair and Members Board of Control November 20,2009 (Award Contract) RE: Approval for Sole Source Negotiation Purchase of Amusement Rldes for Storybook Gardens Capital Project RC Storybook Gardens Upgrade Don Darling Carnival and Concessions - $90,000 FINANCE AND CORPORATE SERVICES DEPARTMENT REPORT ON THE SOURCES OF FINANCING: Finance and Corporate Services confirms that the cost of this purchase can be accommodated within the financing available for it in the Capital Works Budget and that, subject to the adoption of the recommendations of the General Manager of Community Services, the detailed source of financing for this project is: ESTIMATED EXPENDITURES Approved Committed This Balance for Budget to Date Submission Future Work Construction $60,000 $36,307 $23,693 Purchase of Equipment (Includes Installation) 90,000 90,000 0 NET ESTIMATED EXPENDITURES SOURCE OF FINANCING: Drawdown from Storybook Reserve Fund $1 50,000 $36,307 $90,000 $23,693 TOTAL FINANCING $960, sg0.000 $23,693 NOTES: 1) Annual revenue is conservatively estimated at $80,000. The annual operating costs are estimated at $40,000 with a net contribution to the program of $40,000 annually. The payback on this investment is 2.25 years. JG h-?. Martin Haward Director of Financial Planning 8 Policy

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