Editorial Viewpoint

Final FINA Report Fuzzy On Cost Benefit Analysis

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Final FINA Report Fuzzy On Cost Benefit Analysis

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Recorded in 1944 by Johnny Mercer with the Pied Pipers: “Accentuate the positive, Eliminate the negative, Latch onto the affirmative, Don’t mess with Mister In Between,” are appropriate lyrics to start this column.

The final FINA report on the economic benefits of the December, 2016 FINA Short Course World Swimming Championships was originally targeted to get to Windsor City Council in April of last year.

Spring gave way to summer, at which point a new target date was set for September. Finally, the report limped before Council in early November 2017. But interestingly, the findings were given to a docile mainstream media over a week before Council brave hearts had an opportunity to find any fault with it.

This is a time-worn political gambit of getting ahead of the story, accentuating as much positive spin as possible by over-responding to critics with way too much information.

And for the most part it worked. The media aped Mayor Drew Dilkens, heralding the event a financial success. By the time the conversation reached Council, FINA was old news although some would say it was fake news.

The main purpose of the report was to present a 34-page economic impact assessment from the Canadian Sports Tourism Alliance (CSTA), delivered to Council on November 6, 2017 by Tony Fisher, the company’s Executive Director of Research and Analytics.

An 11 page preamble to the assessment, produced by a supposedly neutral city administration, was peppered with superlative editorial viewpoints that made it obvious why it took almost a year to polish the apple. It allowed the Mayor and his Council chattels to crow that this reaffirmed the decision to go forward with the FINA event at considerable cost and risk to city taxpayers.

Using fuzzy figures, Dilkens declared the event showed a city surplus of $116,000 for the six day event, December 6 to 11, 2016, on an expenditure of $11.3 million.

Others didn’t quite see it that way, given the fact that the vast majority of $11.3 million revenues originated from taxpayers $2.5 million from the province, $3.5 million from the feds and $3 million from the city.

It’s interesting to read that unused government funding is labelled as a surplus,’” muses Dr. Marike Taks, a Professor at the School of Human Kinetics at the University of Ottawa who has studied economic impact measurements of events such as FINA.

Part of that included a budgeted contingency of $192,000 that was not spent, which is more than the surplus lauded about.

Taks, a former Professor of Sports Management at the University of Windsor, led surveys during the long-forgotten International Children’s Games hosted by Windsor Essex in August, 2013.

I emailed her the FINA report and asked her to critique the conclusions. Here is part of her response.

As usual, the economic impact figures are based on a Standard Economic Impact Analysis, which is always positive, because it does not take into account the costs of hosting, as does a Cost Benefit Analysis (CBA) approach. A CBA considers government spending as a cost, (i.e. opportunity cost).”

The CBA approach also considers long-term operating and capital costs, which the Sports Alliance model does not. The $6.4 million east end community swimming pool that was built as a practice pool for the FINA swimmers, suffers a budgeted operating deficit of $627,000 a year.

Host cities for such events never want to admit they are just recycling taxpayer dollars for the benefit of the few. FINA produced a harvest for the local hotel industry and a few select caterers, suppliers and retailers.

No mention was made of previous revelations that Event Director Peter Knowles hauled in a salary of $285,000, $2,600 for rent and $42,000 for travel. VIP and deluxe suites at Caesars Windsor fetched up to $1,500 a night as the host municipality paid for all the food, lodging and beverages of the 864 swimmers and 591 FINA officials. Flights to and from 153 countries, and local transportation, were covered also.

The number claiming $32 million of economic spinoff activity in Windsor and $42 million Ontario-wide is subject to interpretation depending on the mathematical methodology used, which according to the Steam Pro model used by Fisher considered direct, indirect and induced impacts

Proponents of the results of the study were meant to be dazzled by the chestnut that 462,610,035 people (global audience) viewed the non-Olympic event. That suspect number came from another source and Fisher distanced himself from it when asked at Council how they could be so precise in breaking it down to that last 35 people.

Like other numbers in the report, it was subject to a boiler plate formula.

The event has certainly generated great branding and marketing opportunities for the high-performance swimming community world-wide,” writes Dr. Taks. “Whether it reached the non-swimming community remains questionable.”

The paid attendance at the WFCU Centre’s main bowl, fitted with a temporary pool, was reported at 15,000 for the week, which seems anemic for an event that professes to have such a huge economic impact and 6% of the world’s population watching.

The house was papered up to 23,222 with free tickets dished out to 4,000 school children, some 800 volunteers and various other privileged people. Original projections envisioned an overall attendance of 35,000.

Fisher has conducted hundreds of these studies for an employer that prides itself in building business cases to gain support for governments wishing to host such events. He conceded to Council that he is very biased.

When asked challenging questions by Councillors Irek Kusmierczyk, Rino Bortolin and Chris Holt about Return On Investment (ROI) audits, he conceded he doesn’t do those.

Kusmierczyk heaped praise on the hundreds of prideful citizens and city staff who executed the actual event, but then quoted independent experts in sports tourism who claim the economic benefits of such events are exaggerated, grossly so according to one.

Fisher’s group was paid $5,000 for its summation. When Councillor Fred Francis made a motion to accept the report, Kusmierczyk requested a friendly amendment to include an independent Cost Benefit Analysis, at a cost he estimated at $25,000, in the budget of any future grand event that Dilkens and his sports tourism officer have in store.

Francis didn’t accept the deeper accountability dive amendment, and there it died.

Note: Councillors Bill Marra and Alan Halberstadt, then a Councillor, opposed the original motion to host the FINA event.

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