One of the bigger items on the Agenda this week was the update on the Canada Games Pool replacement project. There were two items, and because of the size and scope of the project, there is significant public interest in the plans, so it is worth unpacking the decisions a bit.
The first big news is that the City was not successful in securing an Investing in Canada Infrastructure Program grant for the Project. This is pretty disappointing, as the City has spent 5 years developing a program around this grant process, and specifically designed aspects of the project to assure we had the best chance of receiving some funds. We did the hard public-consultation and program-design work to get a fundable program that met what we considered all of the possible criteria for the Community, Culture and Recreation category. Our application was submitted in January 2019, and we received notice more than a year later that we were not successful.
Exacerbating this disappointment is that projects for this Grant must be “shovel ready”. This means we needed to be ready to go, with a well-developed project, public buy-in, secured financing (ironically, you need to prove you don’t need the grant to get the grant), and all of the hoops jumped through to get ready to dig a hole… but you cannot yet be digging the hole. If you start digging, you are no longer eligible. I think our staff were pretty creative in getting shovel ready in time for grant application, but were still able to get some detail design and site preparation work done during the unexpectedly long waiting period. However, we clearly lost time in the wait, which is unfortunate.
The nature of the grant program is such that there is no clear explanation from the selection organization of why the project was not selected, except to say that there were significantly more applications than available grants for all of BC, and ours didn’t make the cut. There is another phase of ICIP launching in the fall of 2020, and we may be able to re-package parts of the project to apply for grants then. Also, as both the Province and Feds are signaling significant stimulus funding will be rolling out in the Fall as part of COVID recovery, we have some innovative aspects of the pool project that we think may be successful at getting some support. However, we need to recognize that these will be relatively small contributions, and the City of New Westminster is going to have to pay for most of this project on its own.
Last year, Council had some discussions about the financial plans around the pool, and decided that the larger “Enhanced” pool plan that some in the community were asking for was outside of our financial comfort zone unless we got a significant ICIP contribution. With this confirmation that those funds are not coming, we are taking the “Enhanced” pool off of the table. We are now concentrating on the two-tank (8-lane 50m pool model with a second recreation pool) plan that came out of our extensive community consultations and serves community needs, and is still significantly larger than the existing Canada Games Pool, but not the 10-Lane pool that some in the regional competitive swimming community would have liked to see built.
New Westminster is a City of 71,000 people in the centre of a Metro region with 2.5 Million people. There is a need for a refreshed swimming and recreation facility to serve our growing community, and we also have a myriad of other spending priorities and infrastructure that needs updating. I believe that building a facility for the regional competitive swimming community needed regional support. If we want to build a facility to host Provincials and inter-provincial competition, the senior government grants we applied for were the process available to us to fund that type of facility. Without those funds, we need to concentrate on addressing the pressing community need in a way that fits the financial capacity of our community.
With the detailed design decisions made, and the financing worked out, the next step in the process is to hire a construction company by issuing an “Invitation to Tender” to the construction market. We are ready to do that now, but it opens up a bunch of financial implications for the City, so Council decided to pause a few months before we take this big step.
This is not an easy decision, just as the decision to not build the larger pool is a difficult one. But both were made for similar reasons – concern about the impact on the City’s finances. I know political hay-makers love to cast this Council as spendthrifts because we like to do things that make our City stronger and more livable, but my experience in 5+ years on Council is that we are always cautious when projecting out future City finances, and are pretty risk adverse if we don’t fully understand cost implications.
This is the biggest single capital project the City has ever undertaken. We have been putting some money aside for a few years, but will still need to debt finance the bulk of this project. At the scale of this project, any risks can have a big impact on the City’s budget for years to come. Unfortunately, there is significant uncertainty in the City’s medium-term financial status due to the COVID crisis, and in the construction market due to supply chain concerns and disruption in global markets. For that reason, we are not taking the next step in sending this out for tender until at least the end of the summer, when we have a better handle on the financial status of the City, of the Province, and of the world economy, and the construction market will hopefully have a better handle on costs.
This is acting with an abundance of caution, as I think we have to when talking about an infrastructure investment this size and a financial crisis of this unprecedented nature. The news coming out of the Province and the Bank of Canada is generally positive about recovery, but still really uncertain. If better financial certainty puts us in a position to pull the trigger at the end of the summer, this delay will add only a couple of months to the final delivery date in 2023. However, if the local and/or global financial situation goes very badly in the next few months, we will be much more prepared to manage that as a City without a $100+ Million project weighing us down. Let’s hope it is the former, and we are able to go to tender in the fall, but at this time a pause is the prudent, if disappointing, thing to do.