Municipal world

A municipal sand storage shed blew apart in a November storm in 2020— the victim of the powerful winds that occasionally whip up off of Lake Ontario and lash Prince Edward County. Situated on the sweeping bend of Belleville Road as it veers away from Ameliasburgh and toward Mountain View, the wood-frame structure had protected the aggregate from the elements until that day. Suddenly it was a pile of rubble. And sand.

The municipality called its insurer and was disappointed to learn that its coverage was inadequate to replace the structure. So far, this could be anyone’s experience. It is what happens next that makes this noteworthy for this column— and relevant to County finances. And unlike anything that happens in the real world.

Were it you and me, we might ask around and find out who builds sand sheds. Get a few quotes. Pick one and then either rebuild it or make the determination to store our sand al fresco. We would weigh whether the cost-benefit trade-off continues to make sense. The harsh financial reality may no longer justify housing this material indoors. Or you may find another method of managing your road dirt. You would consider the alternatives.

In municipal world, things don’t work this way. Instead, you pick up the phone and call an engineering firm. In municipal world, the engineering consultant is given the job to figure out what you need, what it should be made of, how it should be constructed and how long it should take. They will prepare bid documents. Manage the tendering process. Short-list the best proposals. After a contractor is selected, the engineering firm—or perhaps a different engineering firm—will manage the project. For the replacement of a shed has now become a project. The consultants will oversee the timetable, communicate with stakeholders, organize public meetings, produce the slide deck and liaise with other government or regulatory entities.

This is how the cost to replace a storage shed becomes $1.2 million. For the cost of a nice home, even in Prince Edward County, municipal world buys a shed. Worse, when it comes time to get Council approval at budget time, no one can explain how it came to be that a simple shed—insured for a few hundred thousand dollars—now costs $1.2 million to replace. Only the contracted engineering firm knows the numbers driving this project.

Now, to be crystal clear, this isn’t a knock against municipal staff. Most County employees are hardworking, diligent folks doing their best for this community. The problem is the signals they receive. The problem is systemic to municipal world.

For the County manager, replacing the sand dome on Belleville Road is all risk and no reward. No one will ever slow down to admire the new shed and ask themselves who was the creative mind behind this architectural marvel. Instead, when the first shingle blows away, there will be hell to pay. Worse, the risk of cost overruns on a building project—even a shed—is ever-present. It might be neglect, lack of oversight, or just bad luck. It matters not at all.

In municipal world, the staffer seeking career longevity learns to offload risk—in this case, to the engineering consultant. There is nothing to be gained from taking the bull by the horns, using the resources available at hand to rebuild the shed. No one is going to pat you on the back or tell you what a magnificent shed you built. Or thank you for saving hundreds of thousands of dollars along the way.

There is no financial incentive to replace a sand storage shed cost-efficiently. No downpressure from the customer—i.e. County residents—to provide value for money. It is absent from municipal world calculation. It is a problem.

Instead, the decision tree looks like this: First, insulate yourself from the downside—cost, liability, unsightliness, etc.—by contracting the entire project to a consultant. Second, never buy a Kia or Chevrolet. Instead, specify the Mercedes or Audi. Always. No one is going to thank you for buying the middle-of-the-road cost-conscious filters for the Picton water plant this spring. But the world will fall on your head should they ever fail. Fortunately, you bought the top-of-the-line Porsche filters, so you’re good.

Third, stay as far away from the project as possible.

To be clear, risk mitigation is important in any organization. But in municipal world, it is all-consuming. It is the culture. It is a way of looking at the word that is continually refined, reinforced and hardened.

So how do we fix this? Outside municipal world, most organizations employ an array of performance incentives—a mix of carrots and sticks. In municipal world, it is all sticks. They hear it from their managers, at the grocery store and online. And while sticks have a role, the carrot is a far better predictor of positive performance—particularly when those carrots are aligned with the interest of the customer/stakeholder/resident.

So give managers skin—performance incentives for service excellence and cost-efficiency.

What you will discover—aside from the improved alignment of interests and better value for money— will be a motivated workforce that is invested in the project, plants and operations they oversee and manage.

It is time to see things differently in municipal world.

rick@wellingtontimes.ca