Posts from the ‘Economics’ Category

Development Finances

It has been a very long time since I have wrote on this blog, as I have been very busy trying to work on Laneway Homes, been writing a book and generally working very hard.

In the spirit of Charles Mahron of StrongTowns.org I have been doing some case studies in Kamloops in regards to the financial affairs of our city, the liabilities that we do not see reflected in the cities capital plans and the return on investment the public sector sees in different areas of the city.

I do not want to say too much, only to provide the figures as I have found them, and let the figures speak for themselves. Currently I have asked an accountant to audit these figures for accuracy, and the figures gathered are based on a number of sources outside of my control.

Notes on References:

I have received all tax information from the BC Assessment Website between January of 2013 and June of 2013. The tax rates and budget figures are based on the 2013 Kamloops City Budget as obtained from the cities website. The figures shown here for taxes collected assume that there are no home-owner subsidies made. Cost of Infrastructure improvements was gathered by a BC Ministry of Transportation Document titled “Construction and Rehabilitation Cost Guide” 2013.  Size of properties is gathered from the cities online property information system and survey. For the first two case studies I choose to use Cul-De-Sacs. In this way it can be argued that the only tax-payers who receive a benefit from this infrastructure would be people living on that street, people accessing people who live on that street, and people who are lost (who arguably are not receiving benefit from that street in their usage). I believe that in all ways I have tried to show the best case scenario from the city administrators point of view.

Case Study One; Canongate Crescent, Aberdeen area

Cannongatge Crescent Street ViewCannongatge Crescent

Seen above in Google Street View, and on Google Maps, Canongate Crescent is a typical Aberdeen subdivision, with above average home prices. The average property value is $420,882.35. The cities mill rate tax is 4.37%. This, with no subsidies, bring in revenue of $62,534 per year. The cities financial plan for 2013 shows Infrastructure budget at 6.89% of the total budget. If applied to this street, that allows $9076 of this streets taxes allocated for infrastructure costs. Let us for the moment assume that the residents of this street do not contribute ANY of their infrastructure taxes to any other street in the universe. Based on projections provided  by the MOT and compared against city projects in 2012 of a similar size (Grandview Terrace), it is estimated that resurfacing this street would cost $702,000. This would be the minimum treatment allowed by city and provincial codes. This treatment is expected to have a life-cycle of 15 years until needing re-surfacing again. The governments minimum code for road re-surfacing (50mm deep) costs on average $117,000 per lane per km.

If the resurfacing was done this year, the cost would be $702,000. With revenue coming in for the street from the properties adjacent at $9076 per year it would take 77 years to pay for the project. If we take the governments number of 15 years until replacement, that makes the shortfall on the project $565,860. Looked at another way, the shortfall is $37,724 per year; or $1109.53 per household per year.

Looking at it yet another way, with the same current budget proportions, and with the idea that we would want every house to at least be able to maintain the road service in the front of their own house, each persons taxes would need to increase from an average of $1839 per house per year, by $1109.53 to a per year per house tax payment of $2948.53! That is a 55% increase in taxes immediately, just to pay for the road in front of the house.

In recap, the important figures:

  • Taxable Value: $14,310,000.00
  • Taxes Paid: $62,534.00
  • Budgeted for Infrastructure: $9,076.00
  • Projected Road Resurfacing Cost: $702,000
  • Projected Life of Road: 15 years
  • Shortfall in 15 years: $565,860
  • Tax Increase to Pay for road in 15 years: $1,109
  • Tax Rate Increase: 55% plus 3% increase tied to inflation each year

Case Study Two; Kyle Drive, Westsyde area

Kyle Drive Kyle Drive STVW

 

Kyle Drive in Westsyde, bisects Westsyde Road and on the west side creates a little Cul-De-Sac. I have chosen this Cul-De-Sac for the same reasons as the last.

Kyle Drive contains 11 properties, with a total taxable value of $3,223,000. The average home price is just below the Kamloops average, with the average Kyle Drive property worth $293,000. The income from property tax on these properties is $14,084.51 and the infrastructure budget from this number is $957 per year. To change things up, in this example I used Hot-In-Place Recycling as the payment method, which has a useful life of 9-11 years. The government expectation for HIP is $54,000 per km per lane (Lanes being 12′ wide).

Using the same type of figures as the last example, it takes  years for these tax payers to pay for the re-surfacing of the road in front of their homes. The loss calculated based on a 10 year life-cycle is $6,630 or $663 per year. The tax increase that would need to happen immediately to break even on the re-surfacing of their road is $60 per year per house.

Important Figures:

  • Current Taxs pay for Hot-In-Place Road Resurface in:  16 years
  • Tax increase per house would need to be: $60 per house per year

It is important to note that within this infrastructure budget the city still needs to pay for water and sewer lines, the far more expensive arterial roads, and all the other paraphernalia involved like water treatment plants, pumping stations, road signals, engineering, on and on….

Consider that every transaction in our whole city falls under similar circumstances. Part of the book I am assembling at the moment includes dozens of these examples. We are concerned about our 2% tax hikes each year, but with these figures we can absolutely know that we have a ticking time bomb of 50% and 100% tax hikes in our future.

There is nothing that can be done to solve this problem, but there are things that we can do to react to the choices we have made more sensibly than others. This blog is a good place to start and my book will involve many value capture techniques for the private and public sectors.

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The First Eyesore – Part 2, Human Scale

This is the second half of the article published as “The First Eyesore – Part 1, The Environment”. Both articles are critical of the built landscape in and around Kamloops. The intention of the articles are not to be harsh or negative, but to introduce citizens to a language that will give citizens the ability to participate in a dialogue about how we have built, how we are building, and provide a foundation on which we as the citizens can be active participants in how we continue to build. Many articles in the rest of the blog will touch on issues such as why we built the way we did, why we are building the way we are and what circumstances may influence how we need to be building and how we will build in the future. The first part of this two-part article dealt with everything surrounding the pictured building at 3rd and Battle. This article will deal with what this building is telling us about itself. It is always important to remember Peter Calthorpe, “Cities are more than a collection of buildings in space, cities gain their life and vibrancy from how those buildings and streets relate to one another and relate to the citizens.”

In the first part of the article we touched briefly on the concept of the “Human Scale”. It is now time to expand further on this. We previously touched on how a pedestrian interacts with his/her environment and how a vehicle does. We understand why a street is more vibrant when there are no cars on it, but it takes more than a stick to make a walking journey a worthwhile one. There needs to be carrots as well.

Density is the first key in creating vibrant public space. It is key for all kinds of diversity and metropolitan uses in a city. For example, SmartGrowth BC has calculated unit densities for cities in BC regarding all kinds of land use patterns. For example a city needs to have at least 5 units of housing per hectare for public schooling to be viable–on the periphery of Edmonton right now the school board has refused to build new schools as the density of students has become so low, and the neighborhoods so mono-demographic that they cannot make the schools viable. The essential rule is this, a neighborhood needs to have enough density to support a school over time – there needs to be enough children, enough seniors, young professionals, etc. so that there is always enough children to walk to the school to remain at a capacity full enough to operate. Many other services are no different. If Kamloops had an average density of 25 units per hectare (currently at 13, much lower in places like Dallas and Rayleigh) public transit would not be a burden to the tax payer, but it would actually pay for itself. Not much beyond that threshold and many households participate in what is referred to as “car-dumping”. The convenience of frequent and cheap 24hr transit is now more convenient than car ownership. Many have also argued that a larger percentage of the population taking transit and reducing the burden on our road system in fact pays for itself much sooner than 25 units per hectare. The other note on public transit is that it needs to be frequent to create a broader willingness to take transit. Buses will not become more frequent unless there is enough people to ride them. This is also a function of density.

Density is not so simple though. For successful density there needs to be a wide mix of uses as well: from nightclubs, to apartments, to offices, to retail, to pubs, to doctors offices, to grocery stores, light industry, schools, churches, etc. A pedestrian’s journey is not convenient unless the things required are in fact close at hand. A good example of this is found in Dallas, Texas. In Dallas there are many 100 story office building’s downtown. There are never any pedestrians on the street at any hour of the day. In the picture provided by Google Street view in the heart of downtown Dallas (877 Main Street, Approx.) there are two persons on this street. One homeless and the other a city employee fixing a traffic light. This mono-use, no matter how dense, creates a flight response in people, as once the task needed to accomplish in that neighborhood is complete, they drive out. Dallas, a city with a metro population of 6.3 million, also has a barely functioning transit system that is left primarily to the vagrants and ner-do-wells. In fact it could be argued that diversity is important beyond sheer convenience in dense places. The diversity of the building types, businesses, people, streetscapes and public interaction contributes to the above mentioned term-“Human Scale”. A place filled with diversity provides inherent entertainment and stimulation in a pedestrian journey. These points of interest, whether it be a shop window display, a bizarre character or inspiring architecture, are only really experience when walking, they are just passed by at 60km/h in a car. These points of interest make it worthwhile and rewarding to be a pedestrian. They make the lifestyle of the city one of engagement and excitement.

Great examples of mixed-use, medium density places exist and they are largely extremely lively and exciting places. Italy is a country with thousands of such villages and cities, and the saying of the Italians goes, “10 Italians in the street take up the same space with their activities as 100 Americans.” This jibe simply translated insinuates that after work the Italian streets are filled with musicians, couples, singles, children, vendors, performers, pub-goers and thousands of other spontaneous activities. It is the social interaction of all these lifestyles in the public realm that create such a vibrant place to live.

An easy argument against density using my language is that large buildings and many people in a small area is not “scaled” to the human. To this I can pose many quotes. For example, “I am a person and I stand upright, vertical. When I walk through the forest the trees around me stand vertical.” It is important again to entertain diversity in the landscape. Skyscrapers can be both inspiring and terrifying. So can “land-scrapers”. The important element is diversity, is there interesting details, created for the human at 2m tall to excite me? Is there “holes-in-the-wall” for me to discover on my urban exploration?

Therefore it is important that the buildings in a city enrich the public realm. There are a number of key terms to describe what and how a building can achieve this. A great document published by the London School of Design, called ‘By Design’ identifies some key features:

Character: A place with its own identity

Continuity and Enclosure: A place where private space and public space is clearly defined

Quality of the Public Realm: A place with attractive and successful outdoor areas

Ease of Movement: A place that’s easy to get to and move through

Legibility: A place that has a clear image and is easy to interact with

Adaptability: A place that can change easily

Diversity: A place with variety and choice.

(This document can be found and further explained at http://www.designcouncil.org.uk/Documents/Documents/Publications/CABE/by-design.pdf)

The building in question now, at the SE corner of Battle and 3rd Avenue, how does it measure against these variables?

If this building were a performer, how would you describe its Character? Does this building have an identity of its own? Not particularly, this building could be found anywhere in any city in North America and the typology would be familiar. This is a multi-story building which inherently has more density than a single story, and this part is good. Where it really fails is in what surrounds it. In a city with good diversity of buildings, a few distasteful ones could contribute to the overall excitement of the area (as the NYC Sperone Westwater Gallery shows). That sort of diversity contributes to the character of a neighbourhood. This building does little in that respect, it does not contribute to the identity of the area, nor will the architecture ever be known as a landmark in Kamloops.

Regarding Continuity and Enclosure. It can be said that people with many missing teeth are less attractive than those with good teeth all in their mouths. The same is true of streets. A street with uninterrupted buildings enclosing the street or a square creates a comfortable and safe feeling “outdoor room”. Many do not realize why Victoria Street rents drop off travelling east after 5th avenue. That is where the enclosure completely ends. In fact in the 300 Block of Victoria Street there is a missing tooth beside the Kamloops Inn, and unsurprisingly it quickly attracts many people who do not wish to have all their activities known (people you would not feel comfortable having your young daughter playing with). It is not the quality of the people that I wish to draw attention to, but the context of the surroundings and how that can skew a persons conduct(More on this in future posts). As this building stands alone in space with nothing more than surface parking surrounding it, it fails to create a “place” which needs to be accomplished by enclosure. There needs to be borders for a space to be a place.

This whole post and the previous one has dealt with many issues surrounding the impoverishment of the Public Realm at the Battle and 3rd location. I will mention again in this respect however, there is no reason why a person would ever choose to be in the vicinity of this building unless they were parking their car, in transit or using the services inside that building. The same cannot be said of good public realm, like 200-400 block Victoria Street, like Riverside Park, like the village square at SunPeaks, Leister Square in London or Times Square in New York. These places have character, they are enclosed and have a diversity of uses. It is the character of such places as Times Square that we know them world-wide, without having actually been there, whereas Bryant Park only a couple blocks away is completely unknown to someone who hasn’t visited.

Ease of Movement: Interestingly, 3rd and Battle space suffers little to no problems regarding ease of movement, except for perhaps that one has few reasons to ever move through this space on foot. In addition, how does one enter the building itself? It is not immediately apparent… in fact there appears to be a moat of sorts separating the sidewalk from the building itself, as if a pedestrian being able to touch the building we would deface it. If defacement was a problem perhaps the “defacer” was trying to add some character and interest where there was previously none (similar to concrete retaining walls being graffiti-ed). It is the belief of the author that if a building requires a sign to direct the person to the entrance, the architect has completely failed at its job.

Legibility. Perhaps at this point you, the reader, are starting to see how all these elements of design and architecture are in fact related to each-other. Regarding Ease of Movement, the largest impediment to movement is the fact that you cannot immediately figure out where you need to go. Legibility in the macro-sense however appeals to how a building functions to make a city understandable. If I am a stranger asking for directions, are there landmarks you can use to help direct me? Or as a citizen, does the built environment reflect how I like to live, does it represent things in my past, and does it remind me of my dreams? Will the continuity and familiar landmarks help support me over time as I look for security in the neighbourhoods I once called home, or continue to? It is probably few of us who have not taken tea with an elder and heard the disdain the way the changes in the city have made it “unrecognizable”. It is hard to find security in a neighbourhood of constant demolition and construction, and it is demoralizing on a finer scale as it seems to tell us that we are not capable of building anything that is worth preserving.

This brings us to another connected idea, Adaptability. Are the buildings we are building capable of re-use. Like the Tate Modern in London, or the Battersea Power Plant, can our power plants be made into art galleries and high-end condos? Can our churches become gymnasiums and pools? Can our pools become hospitals or bike manufacturers? Can our houses become effective offices or clinics? Or are they not worth remodeling because the use they were designed for was too specialized that they cannot be used in any another way? Or perhaps because our culture of demoralization through constant demolition disincentives us from actually building something of a high-enough quality to last in the first place. At one time if you wanted to flaunt your ridiculous wealth, you would build a bridge or a large civic building with your name on it that would last for decades, neigh centuries. Today you abandon that for cerebral temporary experience, like a Ferrari.

And finally the thrust of the whole argument. Diversity.

Is this building the worst it comes? No. Is it the best we can do? Certainly No.

Micro Economics

I am developing  a distinct unhappiness with newspapers at the moment. Mostly this is reflected on the cavalier way in which journalists address “The Economy”.

When a local reporter remarks that a particular government program costs too much money, that government services are unsustainable and should be cut; and in so many breaths dismays the lack of jobs available to citizens in this uncertain economy–I am confused. Lets go on a journey and follow some logical steps through micro-economics.

I will make the assumption that we all understand the basics of a Supply Curve and a Demand Curve. Good. Let’s continue.

The media states (para-phrased by me): “Health Care services keep diminishing while taxes keep rising, this is clearly the fault of a Top-Heavy Elite which is living on the Gravy Train of tax dollars”

I will not debate that perhaps the “management” over “leadership” iniatives of corporate structure within most corporations, inlcuding Interior Health do exist, and there are great ineffiecincies here. The technical term here is known as Diseconomies of Scale, and in many ways Interior Health may be far along that Long-Run-Average-Cost Curve, perhaps even the Short-Run curve too. However if we analyse the local economy we can deduce this fact:

1. When a person in our community earns a wage, large or small, they will likely spend a significant portion of the income in our community, providing a demand for labour-hours here. (This is scale-able however, depending on how foreign this persons investment portfolio is, and how often they prefer to shop at foreign (regionally as well) shops and services.)

Therefore, when analyzing a local government service, is it not prudent to deduct labour cost from our equation of its cost structure? Afterall, if we keep cutting all these government services (jobs), how is it that our economy is supposed to pick up with new employment. If wages are the driving job-cost then perhaps we should look to other areas for cost savings.

The only reason we can afford multiple televisions in our homes is because a trans-national corporation has exploited wage advantages in third-world conutries. If we built those televisions here, at our wages (with our healthcare), the average person would need a mortgage for their T.V. (although the national credit card debt indicates that we may already). Therefore, the primary cost driver must be transport. Energy. Fossil fuels. Curiously fuel seems to have abondoned “3%” inflation. Curiously the products that arrive in our communities through fuel aided transport have also risen at a rate far above “inflation”–in our current Western practice of “trading” by shipping inanimate objects incredible distances back and forth across the globe, it is not surprising. The Globe and Mail on Thursday reported that the dramtically escalting food prices of the last couple years seem to have stabalized this year. Somehow the connection was not made that the last 12 months have had relatively stable gas prices as well, largely due to reduced demand as Americans have been running out of money.

The ecomomist Tim Jackson remarks in his TED Talk, “Canadians make cookies for the Danish, and we ship them there, and they make us cookies, and ship them here; would it not be easier to just trade recipies?”. Without even factoring the carbon footprint of all this shipping; the global climate change that is wreaking havoc on ‘industrial agriculture’ and shipping–without even factoring the quality of life realities of driving a transport truck or working in a camp in the Arctic drilling for oil; the sheer cost, ‘investment’, that our western citizens are throwing at the combustion of fossil fuels is incredible.

At some point along the road, it has been perceived as inevitable that we must keep the wheels turning, and the engines running, even if it is at the expense of our jobs, and our government services and the public good.

Lets return to the introduction for the conclusion, local health care, the Interior Health Authority. What costs more than the managers salaries without discounting them as the salaries and money comes back to our community, in some capacity at least?

You guessed it! Fuel! Fuel; For the ambulances, the medivacs, the helicopters, the drug shipping, the heating, the cooling, the garbage disposal, the water pumping, the lighting, the sanitation equipment, the computers, the renovations of an inefficient structure, the cars to get everyone to work (1 in each of course), the parkades to store all these cars, to manufacture the vehicles, to manufacture the piping, and the HVAC, the syringes, the X-Rays, the coolers, the freezers, the tile floors, the stainless steel… This list is hardly exhaustive but lengthy enough to be telling I hope. Perhaps the key to keeping jobs in the community, to maintaining government services and investing in the public good lies less in cutting programs, and instead in re-evaluating the fashion in which we construct our cities, and how we conduct our lives–without pointless fossil fuel combustion.

That or we will cut all the programs, and cut all those jobs, and still need to raise taxes to pay for the fuel, and none of the tax payers will be left to pay for it anyways– the market will make the decision for us.

A rather long essay on Indentity

The Geography of Kamloops: Tourism and auto-short-selling.

 

Kamloops adopted the branding of “Tournament Capitol of Canada” in 2001 in a conscious diversification of its job opportunities. Previously Kamloops had been perceived as a largely blue collar town with the majority of its workforce employed by local Pulp & Paper and logging industries. In addition there is a strong government presence in Kamloops. In combination with University College of the Caribou being awarded University Status, Education and Tourism have come to be the largest employers in Kamloops. (Kamloops Engineering Department, 2005). $50 million dollars have been invested in the last decade to provide all the facilities for this move into sport tourism, including the Tournament Capital Center, Rayleigh Slo-Pitch Park and airport expansion. (Kamloops.com, 2006) All this has served to attract sport participants and spectators from all over the province, and often beyond. Nearby Sun Peaks has exploded into a real contender in North American Ski Resorts, the second largest in the province (Sun Peaks Resort Corporation, 2010/2011). However in the recession the miss-steps have been exposed and the flaws are preventing Kamloops from moving on. Despite being a fantastic location for retiring baby boomers from Alberta and the Lower Mainland to consider, the population is staying relatively stagnant. (Kamloops This Week, 2011) Vernon, Kelowna and Penticton on the other hand are experiencing growth. This is curious considering Kamloops’ superior transportation corridors, more reasonable housing prices and far better public transit and civic planning (Murray, 2010). Kamloops however has fallen in love with the same demons which are crippling many other parts of the world, a dependency on foreign everything. Our downtown buildings are built with Chinese steel, furnished with Korean appliances, in modern-international building styles, ignoring the surrounding topography, with a huge dependency on oil to maintain the infrastructure[1]. It is the argument of the author that Kamloops is endangering its future viability in this current course of action, but more importantly is missing immediate opportunities for growth, stability and large economic profits from Tourism.

Kamloops is surrounded by large granitic batholiths (Wheeler, 2001), uprisings of extremely hard rock which is likely the most valuable currently on the market. The nature of the high price demanded for granitic is precipitated party from is small supply, but also for the characteristics that it posses. It is much harder than concrete, much stronger, and can be cut thinner than practically any other rock on the planet, hence its attractive qualities for counter tops (Foster, 2001). Strangely all granite counter tops in Kamloops originate far afield[2]. In addition, granite presents amazing opportunities as a building material.  Many buildings in Europe have been constructed of granite, using no mortar or other support structure, and still stand 4 or 5 stories above the ground as useful buildings centuries and even a millennia later (Hibbert, 1969) (Kunstler, The Geography of Nowhere, 1993). In contrast, many of our civic concrete buildings are nearing the end of their functional lives, as the rebar used to reinforce the concrete has been discovered as acidic, and it eats the concrete from inside, destabilizing the structure (Crary, 2009). This could provide an excellent opportunity for skilled job creation in Kamloops.[3]

Many Kamloopsians and rural British Columbians have been living in limbo for more than 15 years as the lumber industry is stressed by a reduction in demand for new homes, as well as cheaper alternatives being presented to the export market by offshore companies. Even we fail to support the local lumber industry as our furnishings and civic buildings are constructed with foreign materials. We acknowledge the lower costs to the balance sheet; however we seem to overlook the job destruction in our own communities that such decisions create (Ruppel, 2009). While large urban areas can provide well paying service industry and white collar jobs, small cities the scale of Kamloops will never attract large employers in this sector (Levine, 2006). This is a tic-tak-toe moment, in the loose words of philosopher Hardin, who equates the child’s competition with economic game theory; if I do it first, no matter the externality to society I will be better off (Parkin & Bade, 2010) (Hardin, 1969). If we do not support our own lumber industry, why should we expect foreigners too?

We suffer the same when it comes to international students, who are essentially tourists to our communities, as are the large number of rural British Columbia students that TRU attracts. However on campus, most of the revenue is passed on to large out-of-town companies. Consider; if there was no Tim Horton’s in Old Main[4], would revenues for coffee at that location drop? By adopting the Tim Horton’s franchise we are redirecting hundreds of thousands of franchise fees to Toronto instead of re-investing them here in our own community (Tim Hortons, 2011). Somewhat more ridiculous and less though off is the Campus Activity Center outsourcing of catering and outlets to Aramark. Aramark is a large national company which runs caters Fort MacMurray to Vancouver. Why this unnecessary outsourcing to such a large company when so many of the universities graduates in business, culinary arts, marketing and entrepenurship leave the city for lack of stimulating jobs (Goodwin, 2010). Why could the CAC not employ local chefs to create location specific recipes, why are TRU’s MBA students not capable of managing a large scale catering and outlet operation in Kamloops, why are percentages of the profits generated by this enterprise distributed to shareholders abroad? In the end, the brilliant, educated, creative types that Kamloops desperately needs to create a strong diverse community leave for greener pastures in Calgary, Vancouver or Toronto, or whichever country they came from.

Kamloops has also limited the market it which it can attract tourists to sport events. (Canadian Sport Tourism Alliance, 2011) Unfortunately sport events only happen once in a while, and while the economic impact is proven time and again, there is a large opportunity cost to not utilizing these facilities to their full value. While Wal-Mart builds their parking lots for Christmas Eve[5], Kamloops seems to have invested its $50 million dollars in one-off events. Should a city like Prince George or Kelowna just adjust their marketing plans slightly, the “tourist” base will disappear. Sun peaks, as well as the nearby Okanagan cities all generate much larger tourist bases from America, Asia and Europe. So does Vancouver, Banff, Jasper and even Clearwater. Kamloops sees little if any economic input from all these important nearby tourism meccas. In fact, these places are also short selling themselves to a large market– the self directed vacationer, not interested in 5 hour drives. The success of the Rocky Mountaineer is testament to the tendency to avoid driving by European tourists, however this tour leaves little room for self-direction. TOTA[6] would do well to campaign for a rail link to the Lower Mainland, which would instantly create a competitive advantage to this tourist demographic over every other tourist region in Western North America, from Yosemite to Sonoma to Banff national park (Calthorpe & Fulton, 2001). The federal government is investing billions in twining the highway from Alberta to Kamloops, which can only aid in regional traffic passing Kamloops quicker. This highway is estimated to cost in the neighborhood of $22 million per mile. (Burchell, Downs, McCann, & Mukherji, 2005) From scratch high speed trains can be installed instead at a competitive $25-75 million per mile depending upon external features. (Freemark, 2010) An outlier, Austin Texas is has installed light rail at only $1 million per mile. I believe that Lower Mainland/Okanagan rail transit could be achieved at the lower end of this spectrum as defunct rail right of ways still exist through much of the Okanagan including into the centers of Kamloops and Kelowna, abating the need for acquiring land. In fact many of the previous rail tracks still lie in the ground. The rail rights of ways also are still active between Vancouver and Kamloops, also abating the need for much land acquirement for a high speed corridor. Canadian company Bombardier has manufactured intercity trains for the Swiss capable of 180km/h on old rail tracks, requiring near no upgrading. (Bombardier, 2011). While roads are infrastructure provided by public funds, all profits are made by car companies and oil companies who provide the private person with the means to use this form of transportation (Monel, 2010). Conversely trains provide more employment than manufacturing. (Freemark, A Vibrant US Train Industry Would Employ More People Than Car Makers Do Now, 2010) Beyond all this, car travel generates three times the external costs of trains for the public sector than roads do. (Community of European Railway and Infrastructure Companies; International Union of Railway, 2011) No public road has ever paid for itself; even most tolled roads do not. (Bradford, 2009)

This breakdown of Train vs. Road investment has so far centered on the local residents and economic viability, but with oil hovering at $90, even in a recession, who knows what’s around the corner. (Kunstler, Forecast 2011, 2011) Added to the concerns is the amount of oil left, as even Husky in Alberta has failed to meet targets for three years. (Ebner, 2010) Included in this speculation is whether we will even be able to access the remaining oil in plentiful fields such as Alberta, Saudi Arabia and the recently discovered Leviathan oil field off Israel. (Deffeyes, 2004) (Brooks, 2010) In an unstable middle east, Americas greatest ally Egypt is toppling, changing the balance of power away from our largest trading partner, which is still dragging our economy down when there are few problems financially domestically. (Economist, 2010) With all this adversity facing us, it seems nonsensical to build roads over rails.

This document is intended to primarily address the concerns of the tourist however. While the economic viability of our region is a pre condition to tourism, we are currently serving only a very narrow portion of our demographic. Instead of focusing on different age groups, regions, incomes, nationalities—let’s focus on the personalities of our tourists. I have already acknowledged that many tourists, particularly from Europe would prefer to stay away from the restrictions and hassles of automobiles, as well as tours. Honestly the Greyhound is not a suitable form of transit for these clients. Now I will address the types of tourists that fall between psycocentric and allocentric. In perhaps the first exhaustive study of how tourists interact with their environment, ‘City Spaces, Urban Places’ identifies Explorers, Browsers and Samplers. Currently we only limitedly cater to Samplers, in that our travelers are directed from place to place to see the “sights” and interact with nothing in between. We do also appeal to the most adventurous of the Explorer category; however, an automobile is required for such cavalier adventures (Urban Land Institute, 2006). Essentially we are missing 66% of the demographic, simply because our civic centers are not designed in a legible way to keep browsers and explorers interested, but further, do not provide the infrastructure for them to do so (Hayllar, Griffin, & Edwards, 2008). This not only deters large numbers of tourists from visiting but does not encourage return trips. Just ask any international student why they have no plans to ever return to Kamloops after university, let alone seek employment here.

Ultimately, direct relationships between the identity of a place and its identifiable character have determined it’s attraction as a tourist destination. (Spirou, 2008) (Stewart, 2009) Clearly Kamloops and the rest of the TOTA district is missing the ball on this one. By building from local materials, serving local food, energizing the local economy, attracting diverse international students to citizenship and providing the infrastructure to explore the region—we will enrich the tourist experience, bolster and strengthen the local economy while diminishing our environmental impact. If regions like ours do not start taking the lead, there may not be munch tourist dollar left in a few decades. Now is the time to act, there is so much opportunity. Let’s empower ourselves and then share our success with the world, as our branding encourages us to do. Kamloops must be more than facilities to stay viable.


[1] Not the focus of the proposal, but the dependency is clear, between water being pumped uphill to Aberdeen, to the necessity for single occupant car travel in many areas of the city.

[2] No source, simply there is no Granite mining operations in Kamloops.

[3] Similarly the Red Bridge connecting downtown with the Indian Reserve is also in need of replacement. London’s granite Southwark Bridge has stood without renovation for 450 years. (Hibbert, 1969)

[4] Plus a rumored second location in the new Library.

[5] Leaving so much empty parking the rest of the year they actually encourage free camping the rest of the year.

[6] Thompson Okanagan Tourism Association

A Note on Economics

This post is extracted from a Business Proposal currently be worked on by my company. Some of the goals that free enterprise may accomplish:

Politicians love to focus on Economics, and in the loose sense it is the most important issue to Canadians. Job security, prosperity, pensions: these are the things that keep many average residents awake at night. Concurrently, Homelessness is one of the primary issues concerning Canadians at this time. In “A Fair Country” John Ralston Saul comments on the inclusiveness of Canadians, the egalitarianism visible in single tier healthcare/education while pondering how we can be letting so many go hungry. I the author am a closet capitalist, but all the same, I do not believe homelessness and poverty to be such daunting social issues. As Malcolm Gladwell explains in “Outliers” the solutions simply lie in fair opportunity creation.

While a new childhood is impossible to bring to struggling families and persons now, opportunity is not so hard. This is not a case of subsidization, but of investment, and not the financial kind. Through the social enterprise parameters set up in the sheer design of the Forige & Associates developments. No other developer will market an apartment block on job creation but on sales alone. The Forgie approach is more holistic, looking to imbue this new neighbourhood with economic drivers. The nature of the jobs will be entrepreneurial, lending pride and confidence to previously marginalized employees. Most importantly for the community is the money multiplier for the areas residents.  As community and loyalty is bred between the areas new entrepreneurs, the local market will flourish independently, dramatically increasing the property values of the Forgie & Associates units.

This is a key component of the long term nature of Forgie Developments. While many developers will pre-sell all apartments to make a quick return, Forgie & Associates will hold on to more than 50% of the units, generating revenue from Kamloops’ most modern rental accommodation, but selling off the properties for a much higher return only a couple years down the road. A Medium-Term investment in Forgie and Associates will return much more on investment than the same quantity reinvested in shorter term paper.

Every Economist from Adam Smith knows Perfect Competition to be the most efficient market place. Many oligopolists managing huge portfolios seem to have lost sight of this defining western ideology. A dozen small/medium firms can adapt much quicker to market changes than can one larger firm–this is a true contingency plan. Smaller firms provide empowerment and pride to workers, breeding community and citizenship. Smaller firms employee more people. Lower unemployment feeds economic growth. In nurturing small business investments as a complimentary enterprise to the Forgie Developments, financial success is further reinforced. It is understood that certain commercial tenancies will be sought from franchisees for important marketing however the character development of the neighbourhood will come from the people and the businesses they build to represent themselves.

In addition, Charles Landry who both studies and consults the growth of the worlds most successful cities, from London, Silicon Valley, Barcelona down to Savannah Georgia, proclaims in his publication “The Creative City; Toolkit for Urban Innovators”, ‘[for growth to succeed] the essential requirement is a diverse population with knowledge and social skills to support whatever turns out to be the next growth sector’. ‘The portability of skills and the mobility of people forces cities to compete through the quality of their amenities, services, public realm and entertainment. It is a primary goal of Forgie and Associates and many of the partners in this enterprise that the bounty be shared with Kamloops residents as a whole. The iconic pieces of the public realm that this development brings to Kamloops will generate a great community to further investment in this plot of paradise.

While Forgie & Associates has a clear commitment to social enterprise, it is also under the realization that enterprise can be sought for profit. For this reason shares are available only to Kamloops and area residents. Bonds will be floated in partnership with MFA (AAA rating) as an acknowledgement to the long term social nature of the project, also generating revenue for BC municipalities for further reinvestment.

Preaching to the Choir

Dale Bass took a shot at the Kamloops group fighting homelessness in KTW Friday. ‘A good cause for which the group meets monthly, yet nothing seems to happen.’

At the Kamloops public forum in February, 100 people turned up in support of transit, yet the fare increase was passed. BCTransit came to town this week, making inquiries about future transit development; 100’s turned up at Aberdeen Mall and Fortune Shopping Center to add their input, and yet, buses are constantly passing empty.

I attended Ray Anderson’s lecture at TRU and it was well attended, the Clocktower building teeming with environmentalists virtually pleading, “Why aren’t more people acting!

Most of us have seen An Inconvenient Truth. All of us know that every scientist has found  Climate Change to be irrefutable. At the very least we are all aqquainted with the issues. Us, the environmentalists–the activists–who show up to creosote rallies, watch every documentary, make suggestions at buying local, etc; we seem to have an inexhaustible supply of energy for being preached to.

A climate denier and an environmentalist watch a debate between an oil company CEO and a Climate Scientist. It sounds like a bad joke, but both witnesses leave further convicted of their previous beliefs. The deniers continue to deny, the environmentalists are further enraged–while the fence sitters didn’t turn up in the first place. Who is either educating? Still these environmental “educators” tour and speak. The message falls on deaf ears. The deaf audience is not the fence sitters or the deniers, it is YOU, the “educated”– the informed, the activists. Rosa Parks ignited the social rights movement. John Muir championed National Park creation. We know public policy follows the electorates actions, not the other way around! That is the nature of democracy!

WE NEED TO ACT! We do NOT need to campaign parliament, we need to purchase from farmers’ markets. If you cannot find what you need there.. grow it! Grow lots of it! Sell it! Make money doing it!

If you want to drive less then live closer! Walk! Bike! Do NOT stop there! Get some people together, rent some real estate all over town, install a bike parkade with showers. Make environmentalism economically attractive and convenient. Charge for it! Make money doing it!

Do you live in a rental apartment? Is your gas bill expensive? Import a few bits of cheap plumbing, so that your waste water pre heats the water coming into your house. Use less energy for hot water, save on your bills. Do NOT stop there! Get hundreds of them, better yet, make them yourself, sell them! Charge for them! Make money doing it!

While tons of cardboard gets recycled, tons doesn’t. Even the cardboard that is recycled goes through many energy intensive processes utilizing many synthetic chemicals. Instead, gather up all the cardboard you can, shred it, sell it to pet stores for animal bedding. What about horse breeders, cattle farmers, the SPCA? Sell it to them! Make money doing it! When it is soiled, collect it, compost it, sell the soil! Sell the worms! Make money doing it!

None of these ideas meet with your fancy? Give me a call, I have a binder of projects that I have started, which are ethical, environmental, can provide hundreds of local jobs: FOR PROFIT! Stop preaching to the choir! Don’t preach! Do not be preached to! Do something! Make money doing it!

The United States

In this blog I usually like to stick to issues that directly affect Kamloops. Sometimes they are large and out of our control, like continued investment in oil-based infrastructure. Other times they are federal or provincial budget decisions. This time I cannot help but rave about the United States.

Fox News, has compared the riots to the freedom fights in Egypt and Libya. While Jon Stewart comments that this comparison is ridiculous, as it is, there might be a valuable thought hidden in the never-ceasing Bi-Partisan rhetoric of  our southern neighbours. Union members are not achieving freedom from decades of dictatorship, but their plight is by far more futile.

The United States is expected to achieve public debt of 90% of GDP in the month of march. This amount of debt is also nearing the federally mandated ‘debt ceiling’. The ceiling is $4.3 trillion dollars. U.S. federal debt is currently at $4 trillion. This figure does not include household debt! China owns 25% of U.S. federal debt. A large amount of China’s exports are consumed in the United States. It is said, similar to Wall Street’s collapse two years ago, that the US is too big to fail. The US debt mountain is held entirely by foreign powers. The time when the US is no longer capable of servicing the interest payments on it debt is near.

The Obama administration has threatened to cut all non-essential public services by the end of the week. This includes: Social Security, Planned Parenthood, Medicare for the poor, Pension cuts, and many other programs.

As published by MSN Canada last week, the middle class in the United States and Canada has all but disappeared. Disparity has been growing for half a century–acutely in the United States. These programs will literally affect 90% of the day-to-day lives, or lives of a family member in the US. All the while the student unions are protesting wage cuts. The figures are clear, all Americans, Rich and Poor, but particularly the poor, are living light years beyond their means. TD Waterhouse has reported that average North American cyclical credit card debt is in excess of $10,000. It makes me wonder cynically if the middle class was only an idealistic dream plugging away from the French Revolution.

Here in Kamloops and vicinity, we have an average house price of $400,000. In Sunpeaks there are dozens of vacation homes assessed in excess of $4 million. While thousands of Kamloopsians struggle with mortgage payments, the same franchise fees and dividends get siphoned off to distant corporate entities, which vacation to our piece of paradise. It is appalling that we as Canadians, the egalitarians that we are, put up with this graphic disparity. It is worse that we fail to see how we encourage it.

If the United States is in fact allowed to go bankrupt, as some of the european PIIGS countries are flirting with, our Canadian export market will disappear overnight. In Kamloops we had better be ready to grow our own food, be able to build with our local building materials and govern ourselves without corporate guidance in running businesses. For places like Edmonton, Yellowknife, Grande Prairie and other northern cities, their future may not be so optimistic. Clearly the United States is in its death throes as a world “super-power”, however as Canadians, many of us still considered ‘branch-plants’ to the american economy,  are in dire need of localization and diversification if we are truly committed to sustaining our middle class–as any large fluctuation in the United States market will cripple Canada’s market. We need to cut our losses and re-invest in our community.