Fast Facts on the SJSEL KPMG Report 2019

On October 14, the Telegram posted an article entitled “Initial consultant’s report on Mile One Centre in St. John’s was changed before being released publicly.”

As explained by Board Chair Councillor Jamie Korab and CEO Sheena McCrate in an interview with the Telegram on October 13, reviewing a report with a consultant hired to do work for the City is normal practice to ensure that any factual inaccuracies are corrected. The purpose of review is not to influence the consultant’s recommendations but rather to ensure that the information the consultant is using to prepare their report is accurate and also to ensure that the final report reflects the scope of work they were contracted to do.

The impression left by the Telegram article is that the City influenced the outcome of the report and changed recommendations to suit its purpose.

Nothing could be further from the truth.

In fact, the recommendations included in the draft received in March are identical – word for word – with the recommendations in the final report, released to the public in November. The first report received in January was an interim report with no recommendations.

The Telegram did not ask for the draft versions of the report. Had they asked for these, they would have been provided; in fact, all three versions are available here:

As you can see, the changes to the reports from the original to the final are minimal in nature. For example, the draft report includes a table with numbers of hotel rooms within walking distance of the Convention Centre and Mile One. Upon review, the Board recommended a slight revision to the number, which is captured in the final version.

The most significant change is to the title. The original version was called an “operational review.”

While the consultants did take into consideration in their report some operational matters, the primary purpose of this work was to conduct a jurisdictional review – looking at and comparing our operations in St. John’s with similar operations in other jurisdictions. An operational review would have commented on the effectiveness and efficiency of operations at St. John’s Sports and Entertainment Limited. This review contained no such analysis. The CEO and Board discussed this matter in meetings, as referenced in the article, and requested that the title be changed to better reflect the actual work undertaken.

No matter what the report was titled, the facts of the report remain consistent through all the drafts. Neither the City nor the Board applied any pressure on the consultant to alter their findings; there would be no value to anyone in a report that did not accurately reflect what the consultants saw as the issues to be addressed or the opportunities to be considered in terms of alternate operating models.

In November, the City and the Board released the report publicly, after the final draft was issued in October, and conducted numerous media interviews on the findings. A chart highlighting the recommendations regarding operational models from the consultants was also prepared and shared broadly.

Our goal in commissioning the report – the “scope of work” – did not change from the first report to the last, as clearly outlined in the three drafts you can read here. Although the Telegram article states that the scope of work changed it did not in fact change; what changed was the City’s position from the start of the review process – when we were negotiating an MOU with the owners of the Growlers and Edge –  to developing a lease agreement, which incidentally the teams have not agreed to sign.

The KPMG report brought to light many areas for consideration and improvement, particularly in terms of Board and City relations. Since the report was released, many of its recommendations have been acted upon, including the development of a clear mandate SJSEL. A tactical plan for the organization has been completed.

Recently, the City has announced a plan to look carefully at the option of selling Mile One by engaging again with KPMG, who completed a comprehensive and beneficial review for us in 2019. The purpose of the upcoming report is to outline the substantial factors that the Board and Council must consider if they decide to move forward with the sale of the Mile One facility.

The Board has established an independent sub-committee to consider whether to sell Mile One. As previously announced, the sub-committee will be comprised of Board members who are not affiliated with, or employed by, the City of St. John’s.

As with any report, the Board will likely receive and review drafts of that report in advance of it being made public and, as with the previous report in 2019, it may make minor edits to ensure the facts included are accurate.  This is an important component of finalizing the report and is a standard practice of boards and organizations.  The Board will not alter the consultant’s recommendations or key findings, nor has it done so in the past. There is no value in hiring a consultant for the purposes of providing advice and then altering the advice to better suit a purpose – why bother to pay for the work to be done in the first place?

Neither the City of St. John’s nor the Board of SJSEL operates in this fashion and we encourage those who have made these claims to examine the reports and discover the facts for themselves.