Dear Winnipeg

A Fun Blog About Infrastructure and Municipal Finance

Deadwood Library

Welcome to the Deadwood Library!

Dear Winnipeg,

We should talk about last week. Because it was indeed a week of biblical proportions.

On the first day, we won the Grey Cup. And we saw that it was good.

On the second day, Chris Matthew put on long pants after getting out of bed for the first time in nearly two decades. And we again saw that it was good.

On the third day, a shirtless Chris Streveler shotgunned a bunch of beers all the way down Portage. And it was so very good.

Then we found out City Hall was budgeting to close down a ton of pools, arenas, libraries and cut funding to community centres in older neighbourhoods, then turn around and build a $71 million facility in Waverley West.

At that point, I’m not sure if it was the beer or the rage, but it looks like we all blacked out and the rest of the week was sort of a blur.

[I mean, not so blurry that it leads to an ill-advised fire truck ride, but still, pretty blurry.]

But, honestly, back to the rage. Is it all justified?

It’s an old saying that if we can’t afford the stuff we have, we probably shouldn’t be building more stuff.

[And if it isn’t an old saying, it sure feels like it should be.]

On top of that, we know in our gut that closing facilities in the inner city only to build anew in the outer city just feels wrong.

And it feels SO wrong that many of us say we are willing to give ourselves a tax increase over it.

But before we go too far down that road of feelings, we should probably do some math first. [Come on, don’t act so surprised. You had to know I was going there.]

After all, Waverley West Councillor Janice Lukes says that we shouldn’t raise our taxes until “so much deadwood is weeded out”. She goes on to say that the city operates too many outdated and aging facilities that haven’t been rationalized for years.

Rationalized.

That’s a business euphemism for “making more efficient”, but usually just means closing stuff. See also: consolidation.

Let’s set aside the fact that the reason the facilities are outdated and aging is that any chance we’ve ever gotten to update them, we instead spent the money on shiny new facilities in the ‘burbs.

Because maybe that’s by design?

It’s pretty easy to do the math on consolidation. For example, it’s obvious that closing 10 facilities that each cost, say, $150,000/year to operate and replacing them with one mega-facility that costs $1.4 million/year to operate is absolutely a cost savings.

That’s rationalization in action.

So it looks like Councillor Lukes is right.

Love,

Elmwoo-… WAIT! Not. So. Fast.

[Plot twist!]

Yes, it looks like a cost savings for the City when we look at it from within the silo of the City’s Community Services department. And that is how the City’s budgeting and spending is planned and organized.

But let’s zoom out to the whole organization level for a bit. Let’s take a look at the consequences of proposed pool closures. On paper, within the Community Services department budget, it looks like a savings. Decommission the pools, save tons of cash.

But what actually happens when you close the Norwood Pool, that many people used to walk or bike to? And then you close the Happyland Pool, which many other people used to walk or bike to?

What you get is a bunch of extra people driving to the St.Vital or Transcona Pools.

And eventually, traffic gets ridiculous. And maybe someone throws out the idea of widening Marion Street.

(Image source: City of Winnipeg)

And, naturally it seems like a pretty good idea. After all, there is SO much traffic down there now. The few hundred million bucks will be worth it. Plus, what other choice do we have? People have places to get to.

And yet, no one connects the dots of how we got here. That we put our places so far apart that people now have to drive to get there.

Rationalization in one City silo to save a few hundred thousand dollars contributes to a requirement to spend a few hundred million in another.

Penny wise. Pound foolish.

But wait, this narrative seems a little too convenient, you say. I won’t be convinced unless you dig a little deeper… I want to see some REAL numbers!

[OK, you asked for it! Hang on to your hats, Andrew Yang fans!]

We’ve talked about this before, but yet another new City report confirms it once again: fully 88% of our all our infrastructure is just roads and pipes, a proportion that just keeps going up over time.

That means nearly $31 billion of our $35 billion of infrastructure is just the most basic stuff needed to connect all of our places. The rest of it, just over $4 billion, is EVERYTHING ELSE! Community centres, arenas, pools, fire halls, police stations, civic buildings, libraries, etc.

And as we’ve seen over and over and over again, there isn’t enough money for all that infrastructure.

So naturally, we rationalize the assets in the $4 billion group, while we keep expanding those in the $31 billion group. But does that seem rational to you?

I know, that all sounds great in theory, but we can’t do without the roads. We NEED them. ALL of them.

But do we?

Fun fact: we have 3 times more roads per person than New York City.

That’s right. If we organized our city differently, we too could get by with fewer roads. Up to two thirds fewer. The key is putting the stuff we want within walking distance.

But wait, you say, that means we’d need MORE rec centres and arenas and stuff, not less! We can’t afford that!

Except…

If we had a third of the roads we have today, the same proportion as New York City, we’d only have $15 billion of infrastructure instead of $35 billion. A $20 billion savings.

And $20 billion can build a LOT of rec facilities. In fact, with that kind of dough, we could build an extra 281 of the $71 million mega-plex we’ve got planned for WW.

Or we could just bask in the savings of having less infrastructure. That would save us 4% per year of replacement (the amount developers use in their cost-benefit analyses), or around $800 million per year.

To put that in perspective, our current infrastructure deficit is pegged at about $690 million per year over the next 10 years.

That means we’d have completely erased our infrastructure deficit, AND we’d still have $110 million in extra cash left over every year.

[Oh, that’s pretty big, I guess…]

Alas, unless the Doctor shows up in the TARDIS, there is no way for us fix our financial woes overnight. [Who, you ask? Exactly.]

But, we CAN do it slowly over time. And that means looking at the big picture, and doing ALL the math, every time.

When we do, we find that libraries and rec facilities aren’t what’s bankrupting us. It’s the roads and pipes.

So we should definitely stop with the closures, since they just end up forcing us to build more roads. And especially since libraries and rec facilities actually increase our property values (and therefore city revenue). Roads do not.

But deep down, we already knew that. Just take a look at these two house ads. Tell me, where would you want to live?

Yeah, me too.

Love (for real this time),

Elmwood Guy