Some people refer to a Cost Benefit Analysis (CBA) as a business case. Although these terms are interchangeable, Cost Benefit Analysis is a much preferable term.
A CBA is defined as a systematic approach to estimating the strengths and weaknesses of alternatives. It serves to determine if a particular item is a sound investment. It compares alternatives by reviewing the total expected cost of each option against the total expected benefits.
We feel that it is imperative that Town staff collect all the information, identify the alternatives, and provide the costs and benefits of each alternative for whatever project or spending item is being considered. It is up to Council to evaluate those alternatives based upon a thorough CBA from the Town staff and use it to make an informed decision. It is not the role of Town staff to identify only one alternative and ask Council to approve it. In some cases, if there is only one alternative under consideration, there still needs to be a full CBA completed showing all the costs and benefits of the item under consideration and provided to Council to make the final decision.
The current request to proceed with tendering the Joint Public Works/Parks Operation Facility is one of the larger expenditures that has not had been fully evaluated against other possible lower cost alternatives. Town staff have brought forward one alternative and are asking Council to approve it. A thorough cost benefit analysis outlining other alternatives is needed before Council makes a decision that will cost taxpayers more than it needs to.
The proposal to purchase the Park Theatre was another example where there was never a CBA completed. There was also no marketing or business plan prepared and yet a small special interest group was asking Council to spend $600,000 of taxpayer money.
It should be mandatory that a CBA be completed for every capital and major expenditure.
In short, it’s a way of providing Council with the alternatives, the costs and benefits of those alternatives, and the ability for Council to make informed decisions.