Municipalities must manage risk: prof

Andrew Robinson
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Strategy is key to keeping towns viable, audience told

Memorial University business professor Tom Cooper has spent several years examining the need for municipalities to engage in strategic risk management. He  suggests it’s worthwhile for towns to consider risk, regardless of the situation they’re in.

Memorial University business professor Tom Cooper had plenty to say Wednesday about the need for municipalities to manage strategic risks. His presentation was a part of Engage Memorial Fest, held at the St. John’s Arts and Culture Centre. — Photo by Andrew Robinson/The Telegram

“You don’t want to see your community disappearing. You don’t want to see people leaving your community or deciding, ‘I don’t want to live here because it’s becoming a retirement community,’” he said during a presentation that was part of Engage Memorial Fest, held Wednesday at the

St. John’s Arts and Culture Centre.

“Regardless of whether you’re at 500, 485 or 555 (residents), you’re still going to have limited resources in the future, and what are we going to do about it?”

Both the Harris Centre and Municipalities Newfoundland and Labrador have funded research work undertaken by Cooper. He’s read plenty of municipal plans, looked at how municipalities in other countries have managed risk and assessed the infrastructure risk facing communities in this province.

On the latter matter, Cooper said municipalities are not in a good place.

“We don’t have the tax base to fund a lot of our infrastructure,” he said, adding that a struggling economy makes it harder for municipalities to manage water and sewer services and town infrastructure.

Economic, environmental and operational risks tend to be the most common ones. In the case of infrastructure, Cooper said some towns may have buildings that were once vital to the community but are now underutilized.

“Do we need all the buildings that are in our communities? Do we need to keep on retaining those buildings in our communities? Is that going to be a risk to communities for their revenue bases, to actually try and keep these buildings — which were for the most part built when the communities may have been two or three times the amount (of people)?”

Infrastructure options

Towns may consider selling such properties or using them in new ways that could generate outside interest in the community and tourism opportunities.

As far as examples go, Cooper says Asbestos, Que., has managed its infrastructure in a manner suitable to its changing needs. It tore down a town hall that was bigger than it needed and made strategic investments in roads and parks — decisions designed to attract people to the community.

“How communities, how municipalities and how ourselves decide strategically to manage (risk) is an important policy question, and it’s an important question for both now and for the future of Newfoundland and Labrador.”

Cooper favours regional co-operation when it comes to strategic risk management in smaller communities. He said it would be hard for some communities to justify engaging in that activity on their own.

On the planning side, Cooper said towns should not treat municipal plans as documents to cut-and-paste from other jurisdictions simply in order to quality for Infrastructure Canada’s Gas Tax Fund. Instead, they should be treated seriously. He also recommends having an external party work on the plan.

Risk does not have to be looked at negatively, in Cooper’s view. He suggests some forms of risk can present opportunities for municipalities so long as they are well managed.

“Ultimately, what you’re trying to find any time you’re managing risk is optimal risk-taking. You don’t want to be in paralysis by analysis, and at the same time, you don’t want to be taking too many risks.”

The provincial government’s role in helping municipalities manage risk is obvious in light of the millions of dollars it provides them to assist with infrastructure needs.

That relationship is somewhat in flux, as it is attempting to create a new fiscal arrangement with larger municipalities.

“I would say if (the province) can start to look at the risks and not just the nature of, ‘Oh, is this a good thing or a bad thing,’ (but) look at what’s the risk for the long-term viability of the province and the communities in which they are deciding to invest or not to invest.”

Twitter: @TeleAndrew

Organizations: Harris Centre, Infrastructure Canada, Gas Tax Fund

Geographic location: Newfoundland and Labrador

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Recent comments

  • Joe
    February 15, 2014 - 08:47

    First when the presenter does know how to speak English ie." two or three times the amount (of people)", "amount" must have something to do with their weight. I would say fewer. If the presenter is angling for municipalities using his consulting company or one run by MUN, then I would say the free assistance to the province last year by a MUN prof wasn't a great success.