Ron Barillaro: Weighing the need for performing arts centre

The following appeared in the June 04, 2008, edition of the Western News:

The see-saw discussion, rhetoric, dialogue, hyped-press — call it what you will, it seems to ebb and flow at various times and from various individuals or factions. I guess that the real question is: Do we really urgently need a new performing arts centre? The jury is still out on this question and may be for some time.

The quandary over the saving or demolishing of the Pen High facility has brought controversy, discussion, finger-pointing and the press to the fore on several occasions. One should look at other communities our size and see what sorts of facilities they have and how old they are and what types of entertainment have been hosted.

Case in point is Brockville, Ont. (pop. 36,900). Here is a city approximately our size. It has a performing arts centre, although it does not have a convention centre the size of ours. Their arts centre was built in 1895, with many updates and upgrades over the years. There is also a very respectable art gallery in the centre. Because of geographic location, it can and does attract some world-class acts and talent. All one has to do is look where the centre is located. It is within a 200-kilometre radius of major Canadian and U.S. centres in New York state. There are New York state cities as close as 40 kilometres. Our own cities of Hull and Ottawa are within 90 minutes driving time. The city of Cornwall, Ont. is a stone’s throw away.

The population support and patronage support is almost a given. Some of the events that have been presented there are: Harry Connick Jr., Tragically Hip, Glenn Miller Orchestra, Peter Appleyard, Blue Rodeo, Great Big Sea, Roger Whittaker and Randy Bachman, to name but a few. There is a large area jazz festival that is a yearly event here. This centre is the home stage for St. Lawrence College with such productions as CATS, Beauty and the Beast, A Chorus Line and 42nd Street. The classics are represented as well with piano recitals and symphony concerts. Oops, getting carried away. Back to the subject at hand. When and if this proposed performing arts centre is built, who will we attract as patrons within a 200-km radius? Will people from Wenatchee come? Will people from the Kamloops area come? What about people from Trail or Cranbrook? The answer is ... who knows?

The next question that one needs to ask is: other than localized talent (e.g. the symphony and classical presentations, some of which I have enjoyed) who will we attract? We won’t be a Brockville, Ont. for obvious reasons. We won’t attract any acts that Kelowna couldn’t attract for obvious reasons. There isn’t a pressing need for a college interest in pursuing world-class stage productions. It begs the question: Why do we need a new performing arts centre?

Bottom line would be that taxpayers and taxpayers’ children and their children would be paying for something that would attract a few stalwarts to smaller productions. The next question might be the fact that the plans are not finalized, funding is not totally in place and commitments for funding from major government players is talked about but not in place. Who says it will be in place any time soon? If and when this project gets off of the ground, what will building costs be at that time? How much cost overrun will there be?

When all is said and done, how can the city fathers and others justify this project without realizing that costs go up and that we are a small city population-wise. It’s nice to think that the big government arm and the short casino arm will offset the taxpayers’ costs. That’s great in theory but most of us know better what the realities are or will be.

To entertain such a project is pure folly. The larger arms of government have just “ponied up” monies for a building project that is 300 miles over budget, due to construction cost increases and any other lame duck excuses that can be trumped up at the civic level. What makes city fathers think that these levels of government are going to cough up more monies for a project that is still a dream? If $30 million is the cost today, what will it be by the time that this venue comes to fruition in say two, three or even five years?

This also begs the question, Should succeeding councils have to deal with the issues set in motion by this council? Are we, as taxpayers, that gullible that we can accept this fact? And, to hear Mayor Kimberley saying that the taxpayers will not be bearing much of this load, is sheer and utter nonsense. Governments aren’t going to foot the total bill, nor can casino revenues or other grants. How much can we as taxpayers be asked to pay, so as to cover the cost?

Fellow taxpayers, now is the time to make known you sentiment if you don’t want our children and their children to be paying for something that we cannot really afford.

Michael Brydon: Another white elephant

The following letter appeared in the Jun 4th edition of the Herald:

Proponents of the 700-seat South Okanagan Performing Arts Centre (SOPAC) believe that they have no chance of getting funding for a new facility as long as the 700-seat former Pen-Hi auditorium is standing. What these folks fail to recognize, however, is that they have little chance of getting funding, even if the Pen-Hi auditorium is ground to dust and paved over. Unfortunately, our local politicians have no way of knowing this because, as Mayor Kimberley’s has recently admitted, “this council has not deliberated on the financing of [a new] performing arts centre”. Our leaders are, in effect, flying blind.

Such disregard for the fine economic details is dangerous. Indeed, the last time this council told us to trust it on a major capital project (the events centre), it cost the taxpayers of Penticton an extra $17M. With an eye to avoiding a similar fiasco, I have included a cost comparison of various alternatives for a large performing arts facility. The proposed Penticton arts, recreation, and culture (PARC) complex incorporates the existing, taxpayer-owned buildings made surplus by the construction of a new Pen-Hi (the Shatford building, the north gym, and the auditorium). Admittedly, the former Pen-Hi auditorium will never have a revolving stage (and all the economic benefits and spillovers such a feature entails); however, the former Pen-Hi buildings could provide Penticton with a large performing arts venue, a smaller studio theatre, and a magnificent gymnasium for a fraction of the cost and risk of a new performing arts centre. Given that the city is broke and has many other priorities, including sewage treatment, swimming pool modernization, and increased policing, my guess is that most taxpayers would prefer a cheaper, adequate performing arts centre to another magnificent and costly white elephant.
But our politicians have no intention of finding out what taxpayers think. They already know that at least 2,600 people in the community have expressed dismay with their decision to demolish the Pen-Hi buildings. Given that the margin of victory in the last mayoral election was only 500 votes, the more arithmetically-astute politicians may reckon that they are in a race against the electoral clock. Their only hope of getting their pet project built is to eliminate the only affordable alternative before voters make their voices heard in the fall. Why else would city council and SD67 be so loathe to give voters a real choice in a referendum?

Michael Brydon: A message to Mayor Kimberley

The following message was sent to Mayor Kimberley, members of Penticton city council, members of the board of SD67, and the secretary of the Penticton and District Performing Arts Facility Society on 13 March 08. So far, I have received no substantive responses. We will have to wait and see.

Dear Mayor Kimberley:

Thank you for taking the time to respond and for including the larger group in this discussion. Information on this issue seems not to be flowing very well so I think this was a good decision.

Although I do not pay property taxes in the City of Penticton (and, like Mr. Siddon et al., have nothing to lose if your administration commits tax dollars to the SOPAC), many of us in this community are troubled by an arrangement in which the City of Penticton has abdicated all responsibility for planning and analysis for the SOPAC to Mr. Amos’ group and (according to Dr. Karr’s letter in this morning’s Herald and Western) Mr. Amos’ group has abdicated all responsibility for planning and analysis to Proscenium Architects and Interiors—a firm with no local knowledge and a clear conflict of interest in that it is in the business of selling performing arts facilities. This sequence of abdications has created a situation in which the city is backing a plan about which it knows very little. To cite just one example, you appeared surprised in Tuesday’s meeting to learn that the Proscenium plan (the plan on which Mr. Amos’ group is drawing so heavily) includes a downtown parkade (please see page 16 of the 20 Feb 08 SOPAC presentation).

As a professional researcher with some experience with complex, uncertain decision problems, I have decided to do some of my own due diligence. It is clear to me from even a cursory analysis that the SOPAC has no possibility of going forward without significant investment by the City of Penticton or a regional government. Please allow me to share what I have discovered and perhaps you will understand the source of my skepticism.

I have attached five documents:

1. A copy of a recent income statement from the North Okanagan Regional District that clearly shows payments made by the NORD on behalf of the Vernon and District Performing Arts Centre. This information has already been widely circulated within the community and the press. I include it only for completeness. The significance of the Vernon case, even though costs have escalated dramatically since its construction, is that Vernon received no federal or provincial funding and raised only $30K within the community. Given the similarities between Penticton and Vernon, I think it would be unwise to discount the Vernon precedent.
2. A preliminary sample of recent news stories and press releases from the Lexis/Nexis database. I searched on the terms “performing arts”, “facility”, and “funding” in Canadian news sources and included any story that seemed relevant. It is clear from the experiences of other communities across Canada who have built or are building performing arts facilities that significant municipal/regional investment is the norm. It is also clear that funding from senior levels of government (provincial and federal), when it does materialize, is relatively modest.
3. A copy of the Framework Agreement between the federal Building Canada program and the Government of BC. The relevant passage states “For projects involving a local or regional government, the Parties expect that level of government to provide funding for a minimum of one-third (1/3) of the Eligible Costs of an Approved Project.”
4. My slides from our recent press conference. I include these so you know what has been said to the press recently.
5. A formal decision analysis of the Pen-Hi, SOPAC, and referendum problem. I hope to recoup my investment in time in this project by publishing a paper (the coin of the realm in academia) on the structure of this decision problem. This analysis is missing some of the most recent evidence. Even so, it will be blindingly obvious to any decision theorist that the rational course of action in this case is to sequence a borrowing referendum ($30K or no $30K) prior to making irreversible decisions worth tens of millions of dollars.

So with regards to the referendum question, here is a less-formal chain of reasoning. Please tell me if and where you disagree:

1. It is a matter of public policy (at least under the federal program used in other communities to fund performing arts facilities) that municipal/regional governments must commit to 1/3 of the total cost of the facility. As Mr. Siddon and other experienced politicians have already pointed out, there is no free lunch.
2. It is an empirically verifiable fact that actual municipal/regional commitments have been significantly higher than one-third. Local governments are picking up between 57%-100% of the total cost of these facilities. Moreover it appears that the municipalities/regions are responsible for all cost overruns.
3. Although the SOPAC committee has so far declined to provide the public with the estimated cost of the SOPAC, the cost of a slightly smaller facility in Burlington, ON, is currently estimated at $33M-$36M (no parkade). Thus, in the most optimistic scenario, the City of Penticton is obliged to fund $11M of the cost of the SOPAC if the facility hopes to qualify for federal funding.
4. The borrowing costs alone for an $11M investment over 20 years are just over $1M annually. I am guessing that this corresponds to a tax increase of roughly 5% (please correct this if it is wrong—I do not have access to the information required to calculate this).
5. Bottom line: If the SOPAC goes forward at any point, the City of Penticton will have to get voter assent for at least $11M of borrowing and a dramatic tax increase. There is no question of if a referendum is required (at whatever cost); there is only a question of when.

To reiterate a point made by Mr. Siddon on Tuesday, it is very important at this point that you either acknowledge the inevitability of the city’s participation in the SOPAC or publically refuse any further involvement. Either the city is “in” (in which case it might want to conduct some of its own due diligence) or it is “out” (in which case the SOPAC is clearly dead). This is something we will be focusing on leading up to the referendum so you may wish to prepare a clear answer.

Of course, you are free to use the arguments below to justify your unwillingness to get voter assent before you make decisions [Mayor Kimberley claimed a referendum would be too expensive in the 2008 budget year in previous correspondence]. You are free to put all your faith in a “feasibility analysis” produced by salesmen. But it seems a bit inconsistent to commit the City of Penticton to 20 years of million-dollar debt payments without first paying $30K to ask voters if this is something they want. Moreover, it would be politically reckless to willfully destroy an affordable and viable alternative to a $33M-$36M luxury (which, let’s face it, will only benefit a well-connected cultural elite) before giving voters any say in the matter. Based on what we are hearing at our table in Cherry Lane mall, Penticton voters are smart enough to see where this is going.

You have made the case in the past that council and the school board has had to choose between an old, inadequate building and a new state of the art facility. However, let’s not ignore the evidence. The real choice for a cash-strapped little town that has already had a tremendous feast at the public trough is between the Pen-Hi buildings (even if it costs $6M to upgrade them) and nothing. On this point, Dr. Karr is correct—we are a special interest group: Our special interest is to keep the current leadership of Penticton from blindly running our little town into the ground.