It is often said that in order to be more accountable to citizens, government must behave more like business. Government must establish strategic plans and measurable targets; provide a Return On Investment for every tax dollar spent; and demonstrate the height of efficiency and effectiveness in the delivery of services and infrastructure.
The current issue before Morinville, and by extension the entire Sturgeon Region is whether to replace the Ray McDonald Sports Arena or to build a larger multi-use recreational facility. Unfortunately for the decision-makers, a quick decision has been thrust upon them as the arena (with an effective age of 80+ years) will outlive its useful life by 2015 and in all likelihood will be declared unsafe due to rotting roof supports.
If government decisions must be based on sound business practices, then taxpayers – or the venture capitalists in this case – must also crunch the numbers. So, let’s look at the two major factors that politicians will need to consider in making their decision – market demand and ability to pay.
The theory of supply and demand suggests that those who want a product or service will seek them out and pay whatever they believe that product or service is worth. As it relates to local fitness and recreational needs, this translates into successful businesses like The Body Shop and Curves or the government-owned hockey arena. As fitness and recreation requirements are tailored to the individual, a critical mass of individuals all wanting the same product or service is needed before one could justify a large financial investment. Understandably, government has a role in providing services and infrastructure that have no reasonable expectation of ever producing a profit (transit, cultural facilities, etc.), but at this point, our elected officials can’t quantify what the real market demand is for a pool or a field house. Only 325 (out of a regional population of 35,000) people responded to a 2013 survey on future regional recreation needs and about 110 people (out of a Morinville/Cardiff population of about 10,000) showed up to the Rotary brainstorming session in September. Is 1% market share enough to warrant a multi-million dollar investment?
Government’s ability to pay for a regional rec centre is the other issue at play. Administrative staff will be quick to steer officials toward debenture funding for such a large capital project, since interest rates are favourable and neither municipality has reached its debt ceiling. Mayors will be sent “cap in hand” to the federal and provincial governments for grant funding and to major corporate sponsors for donations. But what burden do we leave to taxpayers once the facility is operational? Look at the operating deficit posted by the Morinville Cultural Centre – over $350,000 in 2011 alone. Servus Place in St. Albert costs $8.7 million to operate and generates an average deficit in the range of $700,000 every year since it opened in 2008. The Westlock Aquatic Centre has been touted as a success story by local Rotarians eager to work on another major project, but the annual recreation budget for the tiny community of 4,800 now eclipses $2 million (or $416.66 per person per year). The financial legacy such a project leaves behind guarantees that taxes will rise above the rate of inflation for decades to come and will do more harm to the region’s economic development efforts than good.
Is all of this hype and false sense of urgency really necessary? The Sturgeon region does, in fact, have a multi-use recreation facility and indoor pool. Located on the non-secure portion of the Edmonton Garrison, the Military Fitness Centre is and has always been open to the general public. It takes about 15 minutes to drive there from Morinville, which is less time than it takes the majority of Edmontonians to travel to their nearest recreation centre. We all want convenience and the newest and shiniest toys, but just remember what you’re giving up to get those things. In this case, we will lose financial sustainability and miss an amazing opportunity to truly partner with our military neighbours.