City Looks Up To See Low: BENN



Municipal standard. What is it?

At a physical level, it sets out the quality what the city requires contractors to meet when effecting repairs. For example, visualize the quality of the restoration of the asphalt on a road after a contractor has excavated to connect to the water main or sanitary sewer. Or, the quality achieved by the pothole fillers. The city accepts such pitiful work and pays premium pricing for it. Depressing, isn’t it?

Then there is municipal standard at a cultural level. On how staff do their jobs. On how management manages staff. On how staff and management communicate with council. On how the city communicates with the public. On how members of council interact with each other.  Let’s examine the city’s cultural municipal standard.

The city auditor general released her findings on Lansdowne 2.0 last week. It happened to coincide with the revelations on Tewin, so it didn’t get much airtime. The auditor general used similar terminology to that used by Ernst & Young, the independent consulting firm retained by the city to evaluate staff’s financial projections. Both of them called staff’s financial projections “optimistic.”

For those not schooled in the terminology used by Chartered Professional Accountants, optimistic means fanciful. As in, so unlikely to be achieved as to be a waste of electrons. The AG pointed out that a reasonable expected capital cost for Lansdowne 2.0 is about $500 million, or about 17 per cent above staff’s fanciful quantification. The AG went on to state that staff’s projections for future revenues from the retail space are also optimistic. Optimistic as in unachievable. The AG pointed out that the projected operating expenses were far too low.  A triple whammy, if you will. Expected cost of construction too low. Revenue projections too high. Projected operating expenses too low. The upshot of which is that it blows the business case for proceeding with Lansdowne 2.0 out of the water.

How could staff have been so optimistic? Aside from a culture of preparing their analyses on an “as instructed” basis. Two independent analyses condemn the projections, yet staff continue to object to the findings.

LRT, the story that keeps on giving … much like an incurable infection. This week’s episode involves invoking a confidential process to settle the multiple claims on multiple segments of the LRT fiasco. Open, transparent, accountable? Not at Ottawa City Hall. One is left to wonder how these eventual settlements will appear in the city budget. A separate line item in the capital budget? Or buried in a much larger figure? A figure that will go unchallenged by council. Note that I include every member of council as contributing to the malaise I refer to as municipal standard. Why? Because they actively participate in the subterfuge by accepting what they know, or ought to know, is misinformation.

On to the fiasco of the week, Tewin. The city entered into a memorandum of understanding that is actually a contract. Permission for which is buried in one of at least a dozen annexes to the Official Plan. An annex that states that it exists solely for context and information purposes. An MOU that has a clause in it stating that although this document takes the form of an MOU, it is as legally binding as if it were a contract. Except by taking the form of an MOU while being as binding as a contract, staff and management can claim they had permission. A Get Out of Jail Free card.

There are a number of recurring themes.

Neither staff nor management can be trusted to provide objective analyses. There is every appearance of skewing the process to allow staff to play with the fun toys. They get to use their models and computer programs to plan a pretty new stadium and event centre. To plan a whole new subdivision. The alternative use of their time involves plowing through the monotony of a stack of variance applications regarding setbacks and heights for single infill buildings. Who can blame them? Aside from everyone. Except councillors. Councillors who dare not challenge staff and management for fear of being accused of micro, or not so micro, aggressions. Councillors who prefer to go along to get along.  Councillors who are, in whole or in part, complicit in the process of giving instructions on what decisions they would prefer staff reports to support.

Neither staff nor management can be trusted to provide council with all of the information councillors require to make informed decisions. Not just my opinion. The findings of the LRT inquiry stand on their own. Willful acts of malfeasance regarding the withholding of information required by council to make informed decisions. For council to meet the statutory requirements of oversight. Have there been any substantive changes in the culture that led the LRT inquiry to draw this conclusion? Any?

Council can be counted on to follow city policies and procedures when it is convenient. They can also be counted on to ignore city policies and procedures when it is convenient. Evidence be damned. Ideologically driven decisions full steam (but not the kind produced by hydrocarbons) ahead. Why am I confident in saying that? The $1-billion electric bus fleet decision. Before the due diligence process was finished. The due diligence process that was limited to evaluating only one manufacturer. The due diligence process that failed to identify, publicly at least, that Hydro Ottawa could not supply the power requirements to recharge the fleet.

Another recurring theme is the lack of business acumen within city hall. The Tewin MOU provides dedicated city staff at ‘loaded cost’. Loaded as in salary, payroll taxes, group insurance, pension contribution plus a 15-per-cent overhead contribution. Did anyone consider what it would cost Tewin if they had to retain the equivalent services from a for-profit organization, such as FoTenn? Or was management so desperate for the combination of incremental funding and empire building? To be clear, the lack of business acumen is not limited to Tewin. Orgaworld ate the city’s lunch of the take or pay clause, based not on daily capacity, but on annual capacity. The LRT’s iron-clad fixed-price contract (trademark held by ex-mayor Jim Watson)? It was so iron-clad, so fixed-price, that the city is now negotiating multiple claims for multiple parts of the LRT.

What to make of it? That staff, management and council have such low standards is profoundly disappointing. Not just the physical manifestation of ‘municipal standard’. Much like the old Groucho Marx comment about not wanting to be a member of a club whose standards were so low as to accept him. As for the cultural manifestation of municipal standard?

So I won’t ask city management and councillors to live up to my standards, so long as they don’t ask me to live down to theirs.

Ron Benn, a finance executive, has been a member of the Centrepointe Community Association for the better part of three decades.


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4 Responses

  1. John Langstone says:

    Excellent article today. This depressingly is so on the mark.

  2. Jake Morrison says:

    What to do?
    I remember trying to get our crowd to push for a line item in the first Sutcliffe budget for ‘culture change’, essentially ‘staff retraining’ after so many years of ‘training to please Watson’. It’s a bit late now. Staff have learned to deal with their new masters. Next election, maybe.
    But what to do?

  3. Peter Karwacki says:

    The Benn Rule

    “Councillors who dare not challenge staff and management for fear of being accused of micro, or not so micro, aggressions. Councillors who prefer to go along to get along. Councillors who are, in whole or in part, complicit in the process of giving instructions on what decisions they would prefer staff reports to support.”

  4. The Voter says:

    Remember how the Lansdowne 2.0 vote had to be rushed through and couldn’t wait for the AG’s report to come out? There were some half-hearted attempts by a few councillors to delay it but they were easily brushed aside. Now, seeing the result of the AG’s investigation, we know why the rush was necessary – they had to ensure that no more damning evidence was on the table to distract Council from pushing forward.

    There must be no boat-rocking!

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