Providing for stewardship of public assets is a core municipal purpose listed in the Terrace's Community Charter.
Council’s decision to invite proposals for the assessment of the City’s buildings for the purpose of developing a 10-year capital plan to address the repair and replacement of building components not only accords with its stewardship responsibilities; it deserves to be acknowledged as a significant decision.
The proposed capital plan’s objective is to neutralize the effects of depreciation. Depreciation is a hidden cost, it is not as evident as a power bill, but it is a cost nonetheless. A building’s market valuation tends to obscure its accumulated depreciation. An owner may offset the effects of building depreciation and safeguard the assets’ value with regular maintenance and periodic upgrading work. Establishing a cash reserve to equalize the annual capital budget is a complementary measure.
Council’s decision to commission a 10-year plan to enable it to address the cost of building depreciation in future budgets, and thereby protect the value of the municipality’s assets, answers the question of where to start. What is the accumulated depreciation of the City’s buildings?
Stewardship of public assets is a demanding responsibility; all-inclusive information is pivotal. A troubling aspect of Council’s proposal call is the provision that, depending on the successful bidder’s fees, Council may decide to exclude some buildings from the plan. Council lists 12 buildings for which inspections are to be mandatory and nine buildings for which inspections are optional. Whatever the cost may be to produce a plan covering all 21 buildings, and even if that cost should have ramifications on this year’s property taxes, an all-inclusive plan listing every one of the City’s 21 buildings is indispensable.
The nine "optional" buildings may be minor structures compared to the 12 "mandatory" buildings, but their exclusion from the assessment project undermines the value of the desired 10-year capital plan. A comprehensive plan may indicate that a repair identified at the Waste Water Treatment Plant (optional) has greater urgency than one identified at the Frank St. Well House (mandatory).
Without that knowledge a problem in an optional building may go unnoticed until it becomes a major headache, leaving a future Council with having to make difficult and expensive mid-budget decisions, maybe having to cancel planned maintenance projects to free up funds for an unplanned major repair.
The idea is to enable future Councils to make informed long-term budget decisions. It is one thing to delay the replacement of a roof or a furnace for a year or two to maintain budget stability over the longer term. It is another thing altogether to shield this year’s budget at the cost of remaining ignorant of looming costly repairs. Doing so would undermine Council’s stewardship responsibilities. The plan’s very purpose is to promote proficient budgeting and minimize, even if not eliminate, unexpected emergency repairs.
Surprises are inevitable. Climate change provides ever more evidence of that fact. A 10-year capital plan needs to be comprehensive to reduce the likelihood of surprises. Not only should Council proceed with a complete building assessment plan, without optional exemptions, it should consider comparable assessment plans for all major municipal infrastructure assets: water system, sanitary sewer system, drainage system, roads, and sidewalks.
The experience of the building condition assessment proposal call will serve as a valuable guide for future infrastructure condition assessment proposal calls
