Thursday, December 13, 2012

Your Vote Counts

Does it? Ever since we moved from an older Edmonton neighbourhood to much more conservative suburbia, from the garage in the back to the garage in the front, I haven't felt like my vote really mattered at all. I tend to vote on the left side, or what is now usually called "progressive". In the past few years I have voted for Liberal, NDP, Green and Alberta Party candidates, none of which had a snowball's chance of winning. It gets a little demoralizing lining up at the voting station knowing more or less who will win, especially if it's not who you are voting for. My voting strategy is usually some combination of supporting the candidate most likely to beat the incumbent (ie: polling second to the conservative) and supporting a party's overall vote count in order to provide them some kind of encouragement for the next election.

Canada's first-past-the-post system means that the more parties and candidates there are, the less percentage of the votes is likely to be required to win. Almost half of the last federal election seats were won with a less than half the votes, including a couple where the winner got less than one-third. With 40% of the vote Harper won 54% of the seats and a majority government; the Liberals won 11% of the house of commons with 19% of the total vote. The current system ensures the winners win disproportionately more seats than the popular vote indicates.

Sometimes a majority government, even one with a mandate from a minority of voters, is not such a bad thing. We look on in amusement at gridlocked and often ineffective systems in other countries resulting from multiple parties and some kind of coalition minority government. But the Canadian experience has been mostly positive: minority governments here are by and large effective and balanced, and tend to govern more reasonably under the constant threat of being toppled. A more proportional system should allow for the number of elected officials to resemble the popular vote, which would virtually guarantee minorities based on current polls. A succession of minority governments is not really desirable, as it can lead to voter fatigue if the co-operation isn't there and coalitions can't hold. Plus, I'm not sure how a proportional voting system (like Fair Vote) would even work - would you still vote for a local candidate, or just a national party?

But there seems to be something inherently unfair - even undemocratic - when a small minority can elect a majority. The recent by-elections in November inspired some discussion about how we vote, progressives vs. conservatives, and party mergers. The Calgary Centre race in particular was a great sounding board for all sorts of ideas. The Conservative candidate Joan Crockatt won with 37% of the vote, the first time in five elections where there was not a clear majority winner there. Andrew Coyne proposed a one-election non-competition pact for progressive candidates. Liberal MLA Kent Hehr wrote that the other 63% of people voting for the Liberals, NDP and Greens actually agree on 95% of policy issues, and wouldn't it make sense to join forces. It would, and Hehr deserves some credit for actually saying so in public. But in politics agreeing on 95% means arguing vehemently over the other 5%, which makes any merger option subject to petty bickering and thus a longshot. [Edit: that's hilarious - literally as I was writing this, I was sent a press release from the Liberalberta Party president saying they will not be merging with the NDP and throwing Hehr under the bus. I guess that proves the point. Let's add "infighting" right after petty bickering in the previous sentence.] Of course, the real problem with merging political parties is it reduces the diversity of voices and ideas available with a multitude of platforms; the U.S. two-party state is the logical end point of the merger discussion.

In the Calgary Centre by-election a group called 1 Calgary Centre appeared with what sounded like a realistic goal: unite the progressive vote. As the results show, if progressives had settled on a single candidate, he would have won. Unfortunately, this 1 Calgary Centre never really got much momentum (even though there was a lot of talk of strategic voting prior to the election), and worse, they never made a clear recommendation for voters; instead, by trying to be polite and politically correct, visitors to their website had no clue which of the three progressive candidates might be a consensus choice. Many people see strategic voting as a cop out, or that it is somehow distasteful since you are voting against a person or party instead of for someone. I disagree, but there never seems to be more than a small minority of voters willing to switch their vote to a different party just to defeat another party. And it's always nice to be able to vote your conscience.

Preferential voting could be the alternative. Also known as instant runoff voting, this is where instead of a single mark on the ballot, you indicate your first, second and third (or more) choices depending on the system and how many candidates are running. The Alberta PCs use a preferential ballot to choose their leader, and this system was the reason Ed Stelmach became premier - he was everybody's second choice. Let's walk through the mechanics of how a simple preferential ballot could work, using the Calgary Centre returns as an example:

Party Candidate Votes Percent
Conservative Joan Crockatt 10201 37.2%
Liberal Harvey Locke 9034 33.0%
Green Party Chris Turner 7090 25.9%
NDP Dan Meades 1063 3.9%
27388 100.0%

Just to keep things simple I will ignore the other two candidates whose combined 262 votes were less than one percent of the total. In the current system, Joan Crockatt had more votes than any other candidate, so she wins - end of story. But let's say every voter was allowed to mark a first, second and third choice. A first choice would be required for a valid ballot, but a second and third would be optional. If there were only two candidates you would be willing to support, just mark a 1 and a 2. Or just choose one and only one candidate if that's how you feel.

The last place finisher, Dan Meades, drops off the list and all votes for the NDP are redistributed. This is my guess of how NDP voters might have selected a second choice, after voting first and foremost for their own candidate:

Second Choice
Conservative 1st choice NDP 53 5%
Liberal 1st choice NDP 213 20%
Green Party 1st choice NDP 425 40%
No Second Choice 1st choice NDP 372 35%

1063 100%

We take Mr. Meades' 1063 votes and add 691 to the respective second choice parties. The other 372 didn't mark any other preference, so these votes are discarded. After adding the second choice to the primary numbers, we get this:

Party Candidate Votes Percent
Conservative Joan Crockatt 10254 38.0%
Liberal Harvey Locke 9247 34.2%
Green Party Chris Turner 7515 27.8%
27016 100.0%

As there is still no candidate with over 50% of the votes, we repeat the process of eliminating last place; this time Chris Turner drops off. Again, my guess as to how Green voters might feel about a second choice, although in reality Green Party supporters are fairly unpredictable. Also, 425 of these are originally from the NDP, so those ballots would now look at their third choice:

Second Choice
Votes Percent
Conservative 1st choice Green 1127 15%
Liberal 1st choice Green 3006 40%
NDP 1st choice Green 2631 35%
No Second Choice 1st choice Green 751 10%

7515 100%

The Conservative and Liberal votes are fine, but since there is no longer an NDP candidate on the ballot at this stage, those 2631 ballots need to go to the third choice:

Third Choice
Votes Percent
Conservative 1 Green, 2 NDP 657 25%
Liberal 1 Green, 2 NDP 1579 60%
No Third Choice 1 Green, 2 NDP 395 15%

2631 100%

So the PCs pick up 1784 votes from Green voters' second and third choices, while the Liberalbertans add another 4585. 1146 votes are thrown out here. The final tally:

Party Candidate Votes Percent
Conservative Joan Crockatt 12038 46.5%
Liberal Harvey Locke 13832 53.5%
Total Counted
25870 100.0%
All Votes

We have a winner. A preferential system here would have changed the outcome, given these 2nd and 3rd choice assumptions. Note that the overall progressive vote count was 17187 or 62.8% of the total, but a full runoff with reasonable assumptions leaves the final progressive candidate with 53.5% of counted votes. This preferential result is probably more accurate of the overall voter intentions of Calgary Centre than the first-past-the-post result. What I like is that most of the votes for the third and fourth place parties do not have to be wasted. If you are a card-carrying party member, you might only be willing to vote for your candidate and never pick a second or third choice. But most of us would have little problem prioritizing two or three candidates.

Doing a quick spreadsheet calculation based on the last federal election: if you could combine all the Liberal, NDP and Green votes together, this merged fictional entity would have 54% of the overall vote, and won 53 more ridings than the individual parties did. But doing the same thing for the 2012 Alberta election would have barely moved the needle, with only 4 seats switching from conservative to progressive. Without crunching the numbers, a preferential ballot would likely have not allowed Chretien three successive majorities as a result of the Conservative-Reform split. However, voters can vote differently depending on how their vote gets counted. A real preferential system has a lot of nuance, and would be a good challenge for the Nate Silvers of the world.

I believe a preferential model would be more democratic, not because it may or may not change the outcome of any one race, but because it allows but does not require a greater level of engagement and participation. Only slightly more complicated than marking a single X on a piece of paper, it is simple and straightforward enough to work. It's also not too difficult to tabulate the results. I wonder if it would even increase turnout, especially in traditional strongholds which likely are home to greater numbers of discouraged voters who have simply stopped bothering. Calgary Centre was accurately forecast to be a close election, and still over 70% of eligible voters stayed home.

In Calgary Centre it's fair to say that most people who did come out to vote were not conservatives. The question is do people see one right-of-centre party and three somewhat similar left parties, or are there in fact four very different choices with little overlap? We probably won't know for sure until we try it, and electoral reform is hard because the status quo system is how the current government won in the first place. But things can and do change occasionally, and this is one issue that deserves some serious consideration. It's not about changing outcomes necessarily, but rather making every vote count.

Tuesday, November 20, 2012

Weighted Stanley Cup Standings

Lord Stanley of Preston
Well, as the NHL lockout drags on, we fans are starting to get a little squirrelly and need to find something hockey-related to fill our day. We're now streaming games from Russia and Sweden at 9am just to follow a prospect. I'd never even heard of the Subway Super Series before, but found myself watching a few periods last week. [Note to the NHL and NHLPA: our passion for hockey does not mean you can take our money for granted. We're pissed off at both of you, so don't be surprised if we don't buy as many tickets or jerseys if and when you ever decide to start playing again.]

Albert Grey, 4th Earl Grey
One comment I heard during the ongoing CFL playoffs was about how a Grey Cup was less impressive than a Stanley Cup since there are only eight teams in the league. That is true enough today, but for a long time there were only six teams in the NHL, so for much of the '40s, '50s and '60s a Grey Cup was statistically harder to win. We tend to look at the number of cups won, but not the relative context of how many teams were in the league at the time.

Here's a breakdown of Stanley Cups weighted by the number of teams the champion had to be better than to win it. For example, the Leafs' last cup in 1967 is weighted at 5 as this is the number of teams they had to beat to become champions. Last year the Kings had to be better than 29 other teams to win their cup. Obviously it is harder to win in 2012 than it was in 1967. Whether a Stanley Cup worth now is worth five or six times what it did 45 years ago is open to debate, but that's how these numbers are calculated. The data begins with the 1927 season, as this was the first year where the Stanley Cup could only be won by a team from the NHL.

Team Stanley Cups Weighted Cups
Montreal Canadiens 22 228
Detroit Red Wings 11 147
Edmonton Oilers 5 100
New Jersey Devils 3 81
New York Islanders 4 80
Boston Bruins 6 74
Pittsburgh Penguins 3 70
Toronto Maple Leafs 11 58
Colorado Avalanche 2 54
Chicago Black Hawks 4 49
New York Rangers 4 48
Philadelphia Flyers 2 32
Anaheim Ducks 1 29
Carolina Hurricanes 1 29
Los Angeles Kings 1 29
Tampa Bay Lightning 1 29
Dallas Stars 1 26
Calgary Flames 1 20
Ottawa Senators 1 9
Montreal Maroons 1 8

Using the weighted totals, modern dynasties from Edmonton, New Jersey and Long Island rank better because of more competition in the league. The Maple Leafs on the other hand have more cups, but all were won against thin competition (almost entirely from the six-team NHL era). In this context Toronto's 15 Grey Cups are more impressive than 11 Stanleys. Detroit won seven cups prior to expansion, but four since, so overall the Red Wings do very well. And to no one's surprise, the Canadiens are in a class by themselves, winning over one quarter of the 85 Stanley Cups since 1927. The Habs have won often and consistently in original and modern times.

Of course, once the Oilers string together another five or six cups, there will be a new leader in the weighted standings.

Wednesday, October 17, 2012

Stop Digging

Despite a growing population in Edmonton, dozens of public schools were closed during the past decade, usually over the vehement objections of students, parents and community members. In October 2010 this became an election issue, and for the first time average voters were interested in trustee candidates. Several incumbent trustees who consistently voted to close schools did not run again, and several new candidates who campaigned at least in part against indiscriminate school closure were elected. The one candidate whose sole platform was no school closure, Sarah Hoffman, received more votes than any city councillor in 2010 and more votes than any school trustee, ever. The following month her motion was approved by the board of trustees:
That the Board impose a renewable two year moratorium on school closures, and that during this time the board seek to further understand the issues and impacts surrounding school closures. During the moratorium, the board will also identify a number of ways to support schools instead of close them.
Last week the Edmonton Journal published an editorial more or less advocating for more school closures and urban sprawl. You can view the original, uninterrupted version here, but it's copied verbatim below in blue text, with just a few of my comments interspersed:

Public board trustees must remove their blinders on school closures

I can't even get past the title. The school closure moratorium was approved in order to "further understand the issues and impacts surrounding school closures." This is the exact opposite of putting on blinders.

Two years ago, trustees of Edmonton’s public-school system seemed to forget that schools exist for children, and not the other way around.

They also seemed to forget that they are responsible for education, not urban planning; that children should not be shortchanged by the legitimate housing choices of their parents; and that postponing a tough decision rarely makes it more popular or less painful when the day of reckoning comes. 

The board of trustees' role is to oversee the school district's superintendent and administration, to ensure its mission and values are upheld, and to provide some vision for the future. The law regarding how all this is managed is in the School Act. The law obviously includes education but also regulations on the bricks and mortar of school buildings. This is probably why it's not called the Education Act. Education is the largest and most important part of what a school board does, but not its only responsibility.

Why should trustees' activities be so narrowly defined, anyway? The Journal seems to want school boards strictly limited to making sure students do well on their provincial achievement tests. What about the no junk food policy adopted in 2007? In promoting healthy choices in school vending machines and cafeterias, did trustees overstep their authority? How about in 2011 when they voted in a policy to provide a welcoming environment for gay and lesbian students and employees, and protect them from discrimination? (As a matter of record the only trustee to oppose this motion was Catherine Ripley, who also voted against the school closure moratorium.)  This board of trustees has chosen to set the bar a little higher for themselves. In fact, the mission of the public school board reaches well beyond education by looking at the whole child and includes families and communities as partners. If the school board thinks it is relevant to look at growth patterns or demographics in how they close schools, they should be applauded for considering the bigger picture. Schools do not exist in a civic vacuum.

The use of the phrase "tough decision" also appeared in a Journal editorial in April 2010 (no longer online) following the last barrage of school closings. The inference is that these painful choices are necessary, and anyone who disagrees with the decision to close a school must be afraid to do the right thing. It's tough because there is strong and passionate opposition, due to the fact that the reasoning, methodology and public consultation surrounding school closures is profoundly flawed. If the process actually functioned properly, then citizens would partner with school officials to create solutions that did not always have the word "closure" in them. Then we would not have nearly as many of these alleged tough calls to make. Imagine going to a doctor whose response to every type of malady is to make the tough decision to amputate your right arm. A premature, uninformed, wrong and/or unnecessarily painful decision is not the same thing as a courageous one.

"Legitimate housing choices" in this context refers to families moving to the suburbs; I don't think we're talking about the legitimate choice to live in an inner-city neighbourhood here. The editorial assumes an inevitability to current growth patterns. But in fact many older neighbourhoods are currently in various stages of revitalization, as more and more people are choosing to live in these mature areas. When any city grows to a size where commuting time becomes an important factor in where you choose to live, central communities become desirable alternatives to suburbs and exurbs. Most grown-up cities enable families to live right in the core by zoning appropriately, providing a little green space and, of course, a school. Suburban living will likely always be an option for Edmonton, but the alternatives need to be available as well. Urban sprawl is neither inevitable nor unstoppable: it is a function of the attitudes and politics of the day.

At the end of November, a bit more than 10 months before they must face re-election, Edmonton Public Schools’ elected representatives will face these hard truths when their ill-advised moratorium on school closures comes to an end.

When there is a good possibility that the current process is causing real harm, it makes a lot of sense to stop doing it in order to prevent further damage. It reminds me of the Will Rogers quote: "If you find yourself in a hole, stop digging." It is theoretically possible that by not rushing ahead to close more schools during this temporary pause for analysis and discussion, we are somehow making things worse. After two years there is no evidence that is remotely true. This moratorium was not ill-advised, it was overdue.

Their frustration with a trend toward urban sprawl was and remains understandable. They are caught between a provincial government that controls the purse strings but doesn’t want the blame for classroom shortages, a city hall that doesn’t want potential property taxes to end up in the new suburbs allowed by outlying municipalities, and parents whose dream of a single-family home in a neighbourhood full of other child-rearing families can only be achieved on the city’s periphery. 

The first part of this paragraph is actually an excellent summary of the dysfunction between the three levels of government. The point about the tax base crossing city limits is very valid and deserves more attention. When the Detroit school system was closing literally hundreds of schools a few years ago, their strategy was to "defend the borders," meaning they were trying to contain the exodus from of the city by supporting schools near Detroit's city limits. The inner city schools were the casualties, as they always seem to be.

The last part about families is complete garbage. The Journal may think families can and will only ever live in the suburbs. This Halloween they should walk around some of the non-peripheral communities they have already written off and see first-hand just how many children live there. More than they think, and more than there used to be. Many families believe walking to school and biking to the park are better options than the chauffeured-minivan lifestyle.

Certainly the frustration of parents who choose to live in mature neighbourhoods near schools with low enrolments is something any fair-minded taxpayer should sympathize with. Through no fault of their own, they live with insecurity for their children and for their beloved deep-rooted communities — communities that have more character and sense of identity on a single street corner than new subdivisions have in all their terraces, trails and wynds combined.

Furthermore, schools with small enrolments are often located in poorer neighbourhoods where parents don’t have the resources to do the drive to school so common in suburbs. And such schools often play vital after-hours roles as well for both adults and youth.

Absolutely: closing McCauley, Eastwood, Parkdale and Spruce Avenue (elementary program only) schools in 2010 affected central neighbourhoods that have significantly lower average household incomes. These are the communities that are most in need. The children in these areas now have a much harder and steeper path to the same education and other school supports that suburban children have been granted.

At least the role of the school is rightly recognized here as more than just a place for education, and benefits more than just children. Especially so in neighbourhoods with higher immigrant family populations. The school is the heart of the community.

But none of this changes the fact that small schools often lack the enriching optional programs that schools with larger enrolments can afford. Further, none of this justifies putting budgetary priority on modernizing old facilities in areas with multiple schools when the only thing requiring maintenance on a lot of suburban school real estate is grass.

Now we've gone completely off the rails. The argument that larger schools produce better outcomes is false and there is a mountain of research on the academic benefits of small schools. In additional to many other social, environmental and health benefits, small schools generally provide students as good an education as large schools if not better. The number of options has little to do with a successful outcome. Anecdotally, most families at Ritchie junior high (closed in 2008) were happy with the education provided there even though the school had much fewer optional programs.

The idea that maintaining schools is somehow more expensive than building new ones is baffling. It is outright dishonest to suggest that the cost difference is on the scale of a major building renovation compared to mowing a lawn; it's not cheaper when you include the cost of building the new school. But the money for new schools is budgeted completely separately from maintenance funding, and this arbitrary political configuration can prejudice how we think. Ultimately the money all comes from the same place: taxpayers. We allow provincial politicians be the sole authority to locate and build new schools, and it makes no sense. Political dynasties like the Alberta PCs are likely to favour their voting base - wealthy suburbanites - while ignoring the more left-leaning voters who live in the more urban areas. If you think this is cynical, have a look at the timing of when new schools are announced; it strongly correlates with the period leading up to an election.

As I understand it, maintenance funding happens in two ways. The first is the day-to-day maintenance such as replacing light bulbs or a new coat of paint, plus smaller repairs; this money is under the control of the school board. But if the maintenance becomes big enough, like a new heating system, it's now considered "Plant Operation and Maintenance" which is doled out by the province once again, but from a different pot of money that has nothing to do with the new school funds. School boards must submit a prioritized list of PO&M projects each year, then the Alberta government decides which, if any, it will pay for. Some modernizations linger on this list forever. School boards must come to their provincial masters begging for money every year. The whole business is a governmental shell game where those at the top of the pecking order serve their own interests first. This must be more wasteful and costly than a system that manages school openings and closings, major repairs and modernizations, and day to day operations as a coordinated, holistic system.

The biggest myth is that we cannot afford low-enrolment schools. Once again, we have impressive academic research that says small schools in fact do not cost more than big ones. If you dare to look long-term - at high school completion rates, future incomes and tax revenues of students from small and large schools - as some studies have, then on average small schools cost less overall. This is important: on a per-graduate basis, small schools are more cost-effective than large schools.

One of the perennial problems with the school-closure debate — a tense argument to be found in one form or another in growing cities across Canada — is that people tend to see a linkage between school closures and the need to build new schools closer to where most of today’s young families live.

In the 1990s, finance ministers in Alberta aggravated this picture of competing needs when they insisted that school boards improve the occupancy rate of their classroom inventory before receiving cash for new construction.

It is true that there is no direct link between schools closing and opening. They are budgeted for independently, and decided upon by different elected officials at different levels. However, there is some causality, in that opening new schools adds to the total capacity of a school district. In Alberta, the utilization rate (number of students divided by the total capacity of the school, roughly) is a key statistic used for allocating funds. School boards are always trying to increase their utilization rate. Adding new schools makes the overall utilization rate drop. None of this even touches on the distortions of how school capacity is calculated.

As Edmonton sprawls, there are many new neighbourhoods that did not exist a few years ago. These neighbourhoods are indeed full of young families. If there is no school in a new development when families move in, are residents justified in demanding a school be built? On the other hand, when families choose a mature, walkable neighbourhood because a school already exists nearby, is it fair to them to close the school and force these children to be transported outside their communities? Do suburban homeowners rights trump those of urban residents?

The perception that schools are a zero-sum game persists, and nobody seems to be going out of their way to define it otherwise. It is the politics of distraction: aligning urban vs. suburban, poor vs. rich, left vs. right. If we are busy sniping at each other about which part of town deserves a school, then we're not paying much attention to the big picture of the entire dubious process and its false assumptions, the research that suggests we're heading in the wrong direction, or the impacts the city as a whole.

Instead, the focus ought to be on making sure all children get the quality of education that is possible only in schools where high enrolment brings lots of per-student funding that can be spent on improved programming in core and optional subjects.

Again: the premise that quality education is only possible in large schools is false. The assumption that bigger is better is simply not true when it comes to schools. Any school, large or small, can deliver a good education to all of its students with enough commitment and leadership. We need to get past the myth that large schools always produce better educational outcomes. They don't.

Fortunately, Edmonton Public Schools trustees now seem to recognize this in their new list of factors to be considered when determining a school’s fate, such as the issue of limited programming and availability of space in nearby schools.

These new factors have always been part of the equation. I could go on for pages about the problems with the existing school closure process as practiced by EPSB (and I just may do that if the Journal comes out with another editorial like this one). To simplify: the school board administration identifies which schools have low utilization rates as potential closure candidates, and includes factors such as the physical condition of the building, enrolment within neighbourhood and catchment areas, available space in nearby schools, demographic projections, transportation alternatives, and whatever else they feel will build a case against the school.

The problem is that most of these criteria are faulty from the start, or else have little logical connection with a sound rationale to close a school. It seems it is only the utilization rate that matters anyway. If you look back through the admin reports recommending closure through the years, it is very much a boilerplate document with little differentiation of each school's unique qualities and circumstances. Hopefully during this moratorium Edmonton Public will take a fresh look at why they would consider closing a school, and come up with a more rigorous process with meaningful criteria.

The board also seems to have realized it would be better to focus energies on lobbying city and provincial authorities for more school-friendly policies, rather than on applying unilateral pressure with tactics such as moratoria. 

Clearly, the city understands the problem and the importance of schools for more than education in the life of a community. For example, in its report Elevate, the mayor’s task force on community sustainability realized the value of attracting young families to older neighbourhoods. 

I agree completely: schools are more than curriculum-delivery buildings, and they have a crucial role to play in reinvesting in our existing mature communities. So why is the rest of this editorial critical of EPSB trustees for "urban planning", and for temporarily calling a halt to what may very well be irreversible damage? A timeout here is needed and entirely rational, and should not be characterized as a pressure tactic.

Certainly having the decision-making of school siting and operations arbitrarily divided between three separate governments is a complicated mess we have inherited. Credit goes to EPSB trustees such as Dave Colburn for initiating dialogue between these three levels, and to Mayor Mandel for acknowledging the role of schools in Edmonton's development (and redevelopment). Alberta MLAs show up for some of these discussions, but have yet to show any meaningful collaboration. 

If the moratorium did no more than offer false hope to parents that changing demographics and the trend to closures could be halted, perhaps it did contribute a little to changing attitudes at city hall.

Wow - what a fatalistic thing to say. Maybe we should just get it over with and bulldoze all residential neighbourhoods and schools between the Whitemud and Yellowhead highways since suburban sprawl is inevitable. Demographics patterns are changing a little, but not in the backwards-looking way the Journal meant; some families are choosing to live in mature, revitalized, walkable, sustainable communities. And what is commonplace in other cities is shockingly novel for Edmonton: living without a car. Going carless works in older, more compact neighbourhoods, but good luck in one of our new communities. Even if a suburb has a school, chances are because of low density it will be too far to walk to and students will arrive by car or bus anyway. Not only do we have urban sprawl, we have poorly-planned, expensive sprawl.

Attitudes are slowly changing at city hall and at the public school board. The editorial board at the Journal, by repackaging yesterday's values and assumptions as the tunnel-vision of our future, is shovelling more of the same thing that got us here, deeper and deeper. Fortunately, increasing numbers of Edmontonians have already taken their own blinders off and are starting to look around at more effective and more sustainable alternatives.

References and Further Reading

Remember that "mountain of research"? Here is the tip of the iceberg: a collection of academic papers, websites and news articles on the main themes discussed above.

School Closure

Small Schools

Schools and City Planning

Thursday, September 13, 2012

Deep Breath

The great Edmonton Arena saga took another twist yesterday: with little warning, city councillors met in camera to discuss a request from the Katz group. The specifics were not made public, but the essence of it seems to be Katz wants the city to kick in more money. City council basically said no - we'll stick with the deal we agreed to.

Katz is drifting into the realm of hated owners like George Steinbrenner and Art Modell. Because details are sketchy and communications from the Katz Group are poor, Daryl Katz went from a reclusive but supportive owner to a greedy bastard in one day. The mayor came out of the private meeting talking about frustration instead of optimism. The only thing missing was the angry mob with torches and pitchforks storming stately Katz manor.

There are so many tangents and missing pieces to this whole complex story. I understand some of this is because business negotiations often are better done in private so some sensitive details may be withheld. We don't have nearly all the answers yet. Here are some of the main questions in my mind:

Is $450 million enough to build the arena?

No, according to a release put out by Katz after yesterday's meeting. But that is for an "iconic arena that is well-integrated with surrounding neighbourhoods." On the other hand, this amount should be enough to build a decent facility, based on a couple of comparable examples. Pittsburgh's Consol Energy Center was completed a couple of years ago at a cost of $321 million, which is about $350 million in 2012 dollars. I looked up housing price information in Pittsburgh as a rough benchmark of how expensive construction costs are there compared to Edmonton. On average, real estate is about 25% cheaper in Pittsburgh than in Edmonton, so $350 million to build a building there would equate to $450 million here. I know, this is anything but scientific, but I needed some way to get a feel for the relative costs. Seattle just announced their own arena project, with a price tag of $490 million, so it would seem we're in the ballpark if you'll excuse the baseball metaphor.

Edmontonians will remember a few years ago when oil prices spiked and the Alberta oil patch was booming. Great for the economy, but all of a sudden many skilled tradespeople were up in Fort McMurray making crazy money, and those who stayed put could, and did, jack up rates for any kind of construction work. If the deal is not finalized and costs locked in soon, there is a legitimate risk of construction costs going much higher if we head into another oil boom.

I'm all for the iconic arena concept (although I hate the word - reminds me of the "world-class" meme that Toronto went through a while back, when it had a bad inferiority complex and was jealous of New York City.) But the idea is to build something truly great and unique, as opposed to mediocre or half-assed. This is exactly what Edmonton needs. Currently, our city is associated primarily with West Edmonton Mall, simply because it's big. There are plenty of mediocre, medium-sized malls here that nobody outside Edmonton cares about, and for good reason. We certainly don't need an expensive vanity project to make us feel better about ourselves, but once in a while we can show a little character and vision, shoot for the stars and create something fantastic. The current design is pretty amazing, but there is a real risk if costs escalate that things start getting watered down or eliminated completely. Basically, if we're going to spend a fortune on this thing, it should be done right, instead of some embarrassing compromise that makes the whole city look amateurish.

Why should Katz care about any of this? From a business perspective, he wants a new arena with more seats and boxes; his ticket revenue depends on the number of seats, not whether the walls are made of stamped zinc or grey concrete. Designing more space for concessions might boost beer sales between periods (I'm guessing - I wonder if that happened when they expanded the concession areas at Commonwealth a few years ago). Since the Oilers sell out every night and should continue to do so until Taylor Hall retires, it wouldn't matter much whether the building is iconic and well-integrated or not. Katz has also purchased some land next to the proposed arena site, so he actually does have some skin in the "neighbourhood redevelopment" game. And while he is currently Satan to many Edmontonians, it is possible Katz is looking beyond the bottom line for his hockey team, and actually cares that the city executes this project properly.

One more angle here, from Colby Cosh at Macleans. His article from last March raises the idea that, simply, Daryl Katz may not have the deep pockets we assume he does. He points to an increasingly regulated drug market in Canada, which suggests drug store profits may be declining. And since Rexall is not a public company, we don't know for sure what it's worth; we're relying on an estimate from Canadian Business magazine as to how much money Mr. Katz actually has.

Will the Oilers leave Edmonton if the deal falls through?

As I write this David Staples has put out a few tweets suggesting that yes, this is a real possibility, and cites mainly NFL teams as examples. I disagree. Early in his commissionership Gary Bettman did indeed relocate hockey teams as part of a push into the southern US. However, since about 1997 after four years on the job, he seems to have reversed his thinking and has worked to keep teams in their existing markets. He supported the Canadian Assistance Plan, designed to help Canadian teams with revenues in Canadian dollars but paying salaries in US dollars (worth about 50% more at the time). The Oilers certainly benefited from the plan, and it may have helped prevent the team leaving town in 1998. Bettman wants stability in the NHL, and relocating franchises is a last-ditch option. I'm not sure that an owner can even move a team unilaterally without league approval.

Putting on the Katz businessman hat once again, threatening to move the team is standard negotiating strategy. I am amazed how many people, including Edmonton city councillors, respond to this threat. Even if Bettman gives his blessing to move the Oilers, Edmonton is currently one of the most lucrative hockey markets in the world. Our ticket (and beer) prices are near the top of the NHL, and merchandise sales have to be solid as well. I remember seeing someone with a Nugent-Hopkins Oilers jersey about a week after he was drafted. At that point nobody was even sure if he would play in the NHL that year, but someone spent $150 for the jersey regardless. This town loves the Oilers, and puts its money where its mouth is.

So no wonder people freak out when the prospect of the Oilers leaving town comes up. I think it's all bluff, but even if I'm wrong and the NHL leaves town, it won't be for long. This is too rich a market to be untapped, especially when the majority of teams seem to be struggling financially.

Should the Oilers become a community-owned team?

I'm not sure why this comes up as part of the arena debate. Maybe Katz is perceived as the obstacle, and if there was a new ownership group more committed to hockey than profit, the arena would get built. I like the idea of a publicly-owned franchise, and it certainly works in Green Bay. I'm sure many hockey fans would chip in for a few shares each. But there's a flaw here: how would a community-owned team pony up $100 million, much less be in a position to make future financial guarantees as Katz has?

A consortium like Cal Nichols' EIG might work, where a dozen or so fairly wealthy investors would own the team. They would have the resources invest cash and commit to the future, but why would they negotiate any differently than Katz has? They would presumably be experienced businesspeople who would no more want to negotiate a bad deal for themselves than a single owner would. In other words, why would a small group of people do things any differently than a single person? Their interests are the same.

I doubt Katz would sell the team in any event, unless forced to.

Why can't we just get it done?

I hear this every afternoon on the Team 1260: just build it already. I really sympathize with this thinking, that we should not worry about getting the best possible deal, just a deal good enough to make it happen. The Seattle deal announced yesterday - quite the coincidence - involves public money but the terms are so much better for the public than what we have on the table here. Until yesterday, city council struck me as complete pushovers in this negotiation. But they showed some backbone for the first time and said no to Katz' new demands and reaffirmed the previous agreement is as far as they will go.

As soon as one party starts to say things like "we need this at any cost", you have no leverage. A fair agreement is almost impossible to negotiate if one side knows how badly the other party wants it. The more desperate you are, the worse a deal you get. You would not go into a job interview saying "I want this job so bad I'll take any salary," even if it were true. Same principle here. It would be a huge strategic mistake for either side to eliminate the possibility that they could walk away from the deal at any time.

What happens if the deal dies?

The Oilers have a rental agreement with Northlands for another two years. I guess they would keep playing there beyond 2014 absent a better facility and assuming the team is still in town. As a hockey venue, it is small by today's standards, and the ice quality is a problem. You would think ice would not be an issue in a cold, dry city like Edmonton, and it never used to be, but it is now. You notice it during games: passes jumping sticks, skates getting caught in ruts. This must be a solvable problem. Invest in new ice-making equipment, especially if you know you'll be there more than a couple of years. But there's really no reason NHL hockey can't continue at the old coliseum for a while. And let's not forget that this is where great things happened not too long ago. Physically the building is dated, cramped and ugly, but it has history and tradition and that should count for something. If the new arena is not built, it will be a giant missed opportunity for downtown, but we'll have saved a boatload of taxpayer cash and still have a half-decent place to watch the best hockey in the world.

Take a deep breath, Edmonton. Everything will be fine, one way or another.