Victoria’s council still needs to learn lessons for its next big project.
THIS HAS BEEN A MIRACULOUS YEAR for the City of Victoria. Lowest unemployment in Canada. Cranes on every block Downtown. Record levels of tourism. So perhaps we shouldn’t be surprised that our civic government has engaged in a bit of magical thinking.
This is what occurred to me when I read a headline in the June 23 Times Colonist: “Victoria might not need to borrow for Crystal Pool.”
The day before, City parks director Tom Soulliere delivered an update to Victoria councillors on the municipality’s next big infrastructure project, the $69-million replacement of Crystal Pool. Soulliere reported that the City will ask for a big chunk of the cost from the federal government’s $180-billion Investing in Canada infrastructure plan, which distributes its next round of grants in April. Consequently, he said, the City might not need to borrow money for the project, which would require voters’ approval in a referendum: “While external borrowing remains a potential part of the overall funding strategy, it may be possible to eliminate or significantly reduce the amount of external borrowing required, should applications for grant programs prove successful.”
A lesson that needs learning: Sometimes buying a new car is a good idea. A new Ford Pinto, not so much.
The councillors surely sighed with relief. The week before, they’d heard the new Johnson Street Bridge was still rusting in pieces in China, and won’t open until next March at the earliest. Relieved they wouldn’t have to face a referendum this autumn, or perhaps at all, councillors started debating the name of the new pool instead (now it’s “Crystal Pool and Wellness Centre”) and enthused about how it could transform the city.
Getting a new pool almost entirely paid for by other governments certainly would be miraculous. If the feds and province kick in two-thirds of the cost, it would comprise the biggest-ever gift to the City, greater than the $37.5-million in total federal contributions to the bridge. (The City would have to contribute to the pool as well, but since it’s already allocated $10 million from reserves, it would only need to come up with another $10 million or so, a sum voters would likely approve.)
But is such a huge grant likely? The City hopes to draw the money from the “social infrastructure” component of the federal plan, which covers a vast range of needs, including “investments in Indigenous communities, early learning and childcare, affordable housing, home care, and cultural and recreational infrastructure.” Since 2002, the largest federal grant for a pool was $12.9 millionfor a new aquatic centre in Yellowknife. Surrey, Richmond, and UBC apparently had to build their new 50-metre pools with no federal money at all.
Instead, it seems the pool is tracing the early trajectory of the bridge project — even though on June 15, Project Director Jonathan Huggett gave councillors a list of “lessons learned” from the bridge.
Lest we forget, when council approved replacing the bridge in April 2009, the discussed cost was $40 million; when the budget jumped to $63 million a month later, nobody on council opposed it because they assumed most of the cost would be covered by federal-provincial stimulus money. The City then raced to make the project look “shovel-ready” to impress Ottawa (including holding the infamous “Pick One!” design contest). When John Baird showed up with $21 million a few months later, council abandoned any thought of fixing the old bridge (then-estimated cost: $25 million), and focused on getting voters’ approval to borrow the rest, instead of asking questions about the unique machine it was building.
Now similar things are happening with the pool — which Stantec said could be refurbished for $6.2 million (see Option 2 in their January 2015 report) — suggesting that early lessons from the bridge haven’t been learned. Staff prefer new assets to fixing old ones. Federal approval doesn’t mean your plan is flawless. And even a fraction of external funding tends to give projects a momentum that is impossible to stop.
“IF I COULD REDUCE MY EXPERIENCE with projects to a one-liner, a successful project is about identifying risks and managing those risks,” Huggett told councillors in his “lessons learned” report. The City’s engineers had produced extensive “risk registries” listing potential problems with the bridge, but key risks had been missed—in particular, that the “innovative and largely untested” open-wheel mechanism required extensive redesign, and that fabricating the lift span in China involved translators, negotiations across distant time zones, and confusion about welding standards.
Such problems won’t crop up for a standard 50-metre pool built locally, Huggett noted, but it faces its own risks (unknown geotechnical conditions, groundwater), which can be countered by having adequate contingency funds, certainly larger than the four percent in the bridge construction contract. The pool currently has $23.6 million of its budget (34 percent) for cost escalation and contingencies, although that will be eaten up quickly, if local construction prices keep increasing at the current rate of six to eight percent per year—another risk.
Countless articles have been written about how to generate “lessons learned,” a standard task in project management. But the literature says it’s not as simple as writing a report on the failures of a project, and then buying a bigger insurance policy for the next one — which is like compensating for a bad golf swing by aiming further to the left. Instead, leaders need to establish a culture where problems are identified, analyzed, and resolved.
Amy Edmondson, a professor at the Harvard Business School, cites these practices:
Frame the work accurately. The cost of the bridge has steadily escalated mainly because numerous costs (design, permitting, insurance) were lowballed or missing from early estimates, and the construction contract had tiny cash allowances for big items (fendering, likely to cost another $5 million or more) — the result of trying to make the bridge appear “on budget” and within its advertised “affordability ceiling.” Huggett said the City needs to ensure it has prepared “a full scope of work” for the pool, but it’s too early to tell if that’s been done.
Embrace messengers. “Those who come forward with bad news, questions, concerns, or mistakes should be rewarded rather than shot,” Edmondson says. As Geoff Young noted at the “lessons learned” meeting, everyone at City Hall had to “get behind” the decision to replace the bridge, forcing even the fire chief to endorse the project. Has the City learned otherwise? At the February 23 council meeting, Ben Isitt questioned why UBC was able to build a pool for $40 million all-in, and demanded staff bring down the project costs, which only spurred a rebuke from Mayor Helps: “We need to show confidence in this project as a council. We need to make comments in public, in meetings that show confidence in the estimates that our staff have produced, because no funder is going to give us money if we’re not confident in the project.”
Acknowledge your limits. The City’s staff and consultants had little experience with the specialized engineering of movable bridges, and were unaware of (or unwilling to disclose) the risks of an unusual design. This time, council needs to ask: How many pools have you built? Did they come in on time and budget?
Invite participation. This certainly didn’t happen with the bridge project: Early warnings from the finance department and costly issues with other facilities (fire hall) had to be directed to City management, which “preferred” to sit on bad news for months.
Set boundaries and hold people accountable. All of the staff associated with the early years of the bridge are now gone, although none of them were publicly disciplined for their conduct relating to the project. MMM — the consultants who proposed the troublesome “open-wheel” design, asserted it could be built for $63 million, and recommended the City sign the low-contingency construction contract — are still on the City’s payroll.
The City will apparently generate a complete “lessons learned” when the bridge project is finished. In the meantime, it’s not hard to think of a few more lessons that need to be on the list:
Scrutinize all claims of “emergency.” Esquimalt and Oak Bay have pools of similar age that they successfully refurbished. If we’re told that Crystal Pool’s systems will fail at any moment, why can’t they be repaired?
Question your presumptions. Mayor Helps said of the pool on February 16, “I think it is very fiscally imprudent and irresponsible to keep putting money into a facility we know we’re going to tear down.” How does she “know” that, when Stantec said it could be fixed?
And create a Plan B. The City might only get a couple of million from the feds. Will it reconsider repair, or push replacement regardless? After all, if council’s magical thinking doesn’t pan out, it will have to go to a borrowing referendum — and then voters will judge whether our elected officials have actually learned their lessons, or not.
Award-winning journalist and author Ross Crockford is a former editor of Monday Magazine and a director of johnsonstreetbridge.org.