Unsustainable

The County must have a conversation about right-sizing municipal business: consultant

Consultants tend to try to put a positive spin on bad news. But the folks at Municipal VU had to work extra hard to paint an optimistic take on the County’s big picture. The consultants were contracted in the wake of accelerated overhead growth at Shire Hall over the past decade — driven in part by anticipation of a wave of population growth. The much-touted growth wave failed to materialize.

“The County’s trajectory is unsustainable,” reported Andrea Clemencio bluntly. Clemencio is a principal at Municipal VU. “Your ambitions are not aligned with operations; demands to do more are increasing, but there is no corresponding action to do less elsewhere, and strategy gives way to expediency.”

The method and manner by which Shire Hall does business is shaped by what was done before—rather than by design or strategic intent. Even this might be okay were it not for the fact that the County is falling behind each year.

The County starts each year with a funding gap of more than $24 million. That means it should spend at least this much, in addition to what it spends now, just to keep up with the rate of decay in its assets (roads, buildings, facilities, equipment, and so on). The municipality has few reserves to draw upon—and those it has are largely depleted.

“This means the County isn’t investing enough to renew its tax-supported assets,” explained Clemencio to a committee of council last week, as she presented her team’s report. “There isn’t flexibility to absorb unforeseen events.”

Nor is there room for the municipality to extract more from taxpayers.

“Property taxpayers are already paying a heavy load of the costs, compared to other municipalities,” said Clemencio.

It was a tough diagnosis. And the remedies will likely be painful and long-term. The consultants describe the required transformational changes optimistically as “opportunities”.

They include defining which services the municipality must provide—and which are superfluous to its core activities. That is a big enough job. Then it has to determine the level at which each service should be provided. This may be well-nigh impossible in a political environment in which 14 council members cling tightly to the services they’ve become accustomed to, while simultaneously calling for more money on their ward’s roads.

Clemencio illustrated the scale of the challenge. She pointed to the County’s current target of 83 as its Pavement Condition Index (PCI) for 1,000 kilometres of road. The current PCI is 65.

“You need to have a conversation about what it takes to keep the lights on right now,” said Clemencio. “Then you can set, perhaps, a 20-year horizon to catch up. But before that happens, you will need to make sacrifices and set realistic goals.”

She then toughened her message to the council members.

“I’d say you need a lot more conversation about the reality of the 83 [PCI] and the cost to get there. You have a goal of getting all your facilities in good condition. The reality of that is likely not achievable,” said Clemencio.

But that was just the beginning. MVU found the municipality must impose stricter controls on the projects, responsibilities and businesses the County chooses to take on. Council, for example, ought not create new bylaws without planning for the cost of enforcement.

The consultants found the County needed better asset management and better financial planning. Clearer governance rules will also allow staff to do their jobs with less meddling from 14 council members/managers.

The risk with the term “opportunities” is that it sounds optional, as though Council might take it or leave it. But the consultants were clear. The County must get smaller. It must figure out what it wants to be and what it has the capacity and competence to do. And do only those things. It isn’t optional—it is imperative.

The good news is that both Council and its chief administrative officer, Adam Goheen, in particular embraced the report.

“I am excited,” said CAO Goheen. “It is validation of a message we have been making for months. There is no time to waste. It is a fantastic document, and it won’t sit on a shelf.”