Now that municipalities are moving to reopen parts of their economies, many of us are looking to infrastructure spending as an efficient way to drive this local recovery. There has been a lot of research around maximizing the impact of infrastructure-based stimulus, but now is not the time to rekindle this debate. Time is of the essence, and for now at least, municipalities and their funding and delivery partners need to focus on practical solutions. Here are some things municipal leaders should consider to help keep Recovery on the right track:
Though there is no shortage of need, time and resources are limited and a purposeful strategy will be critical to drive economic impact and unlock value for the community. Moving forward with a few key projects may seem like an obvious solution, but the problem isn't so simple, and picking wrong could delay or severely limit local spending impacts and result in lost opportunities. Municipal leaders should be thinking about three things to help get their strategy right.
- Alignment: Despite there being no shortage of need, it's important to remember the community's goals and the requirements needed to achieve these goals over the long term. These should take priority. Aligning infrastructure spending with local priority areas like mobility, housing, and the environment will help ensure that the outcomes of this spending projects drive value. It's also important not to lose sight that COVID-19 will have sustained implications on how we work and how service is delivered. It's worth thinking about what this will look like, and how this may impact our current needs and priorities.
- Impact: An aging asset base paired with billions in deferred maintenance is harming the economy and placing critical public services at risk. Data and analysis can help when identifying key asset-related needs and opportunities, provided there is agreement on goals. Targeting spending at risks and priorities will help unlock economic, environmental, and social value for Canadians.
- Supply chain: Infrastructure projects create economic impact by engaging the supply chain, which in turn leads to further stimulation of broader industry. Engineers and designers, manufacturers and suppliers, builders and inspectors all have roles to play in developing these works. Understanding the resource requirements surrounding different types of projects will help maximize use of each group's capacity, while avoiding bottlenecks and delays.
While targeting stimulus is important, positive economic impact is not made until money changes hands. For infrastructure works, the 'value chain' consists of five 'links': Planning, Design, Procurement, Supply, and Construction. Economic spin-off is created as cash moves through each link. Here are three practical considerations for municipal leaders as they look at ways to streamline delivery to allow capital to flow more quickly.
- Procurement: Procurement and contracting takes time to put in place—particularly for large or complex projects. Procurement periods and contracting delays can be mitigated by leveraging existing or standard contracts and purchasing vehicles. This can make basic capital repair and renewal very attractive when driving money into the market, and will allow for this work to advance as details for larger or more complex initiatives are resolved.
- Diversity: Basic infrastructure maintenance and renewal require limited pre-work, while major projects will take time to develop. A diversification of work streams can maximize use of the supply chain by ensuring each link sees both short- and long-term activity. Just like in traffic, it only takes one overloaded link to back up the entire system.
- Readiness: Planning, design, procurement and even layout on infrastructure and facilities can be delivered while respecting physical distancing requirements. Getting up-front work done now will ensure that construction and related spending will be ready to begin once restrictions are lifted.
At some point in the future, federal, provincial, and municipal governments will all need to account for the effectiveness of their spending. Introducing assurance at each stage of the value chain will be key to verifying progress, diligence and value creation. Here are some thoughts for municipal leaders as they move through Recovery.
- Measurement: Understanding how asset and operational spending drives economic and community outcomes will be key to demonstrating program effectiveness and value for money. The time to be thinking about this is during recovery planning and design, not once the investments are already made.
- Visibility: Transparency and defensibility will come from tracking and verifying the flow of spending and its associated value creation as it moves through the supply chain. Recording information at each stage will ensure visibility when evaluating program delivery and assurance, demonstrating progress and value through effective reporting and verification measures.
My final post in this series explores the brave new world that municipalities must be ready for, post-COVID-19, including the significant impacts the pandemic could have on life as we know it, and what municipal leaders will need to consider to position their organizations for resiliency and long-term success.