Servus Place public meeting disappoints

Disapointing turnout

Disappointing is the best way to describe the public meeting last night held by the public advisory task force.

Disappointing mostly because of the lack of St. Albert taxpayers who bothered to turn out. What has caused the lack of motivation to be involved in mechanisms that affect your tax dollars and public decisions recently? Our just completed provincial election is a case in point.

Back to the meeting last night.

It is clear that the task force members are attempting to do as good as a job as they can.

2007 Budget used "plugged" figures

A few things were revealed last night that were surprising. The common thought previous to this meeting was "The solution is simple... get more members".

The "bread and butter" of membership is the fitness centre, and surprisingly, it already is at or near capacity. What this means, is that membership growth on the one identified money maker the facility has is highly unlikely. Should one question planning?

More revealing, and a subject this blogger has touched on in the past, is the variances between the original 2004 budget done by consultants, and that passed by the last council and prepared by the administration.

There is a massive $3.7 or 66% variance in pass holder sales between the more realistic 2004 budget and the one the administration developed in 2007. The expense side was reasonably close, but essentially figures were plugged just to make the whole situation look good. A larger population base than could be reasonably be considered was used, the penetration rate of sales was increased, as well as other what can at best be described as fictional figures were used.

Who is going to be held responsible for this? Were we sold a bill of goods by an incompetent, or worse, willfully deceitful administration?

Accouting adjustments proposed

It was clear that there was no way that Servus Place would break even at any time soon. What options were presented?

It was suggested that perhaps "costing" of services needed to be adjusted. What that meant in reality was unclear, but shifting costs to other city departments, possibly tapping reserves once again, and looking for taxpayers moneys in the form of senior government grants were all being proposals that were raised. Where these proposals came from were unclear, but the stamp of administration input is all over them.

Then we were presented with the warm and fuzzy proposal that citizens need to be aware of the "social benefits" that were estimated to be over $1 million dollars that should be applied to the deficit. What kind of oooga-boooga proposal is that? It was obvious that those who were responsible for the 2007 budget proposal were in full mode damage control and using whatever smoke and mirrors methods they could to "mitigate the damage" and the real deficit.

It is an insult to taxpayers in St. Albert to suggest that accounting adjustments will make the problem go away or lessen. It was suggested that because there was an unclear definition of what an "Enterprise model of operation" was, that such adjustments were justifiable. Two words come to mind, one which involves a horse, and the other the product of it's digestion.

What options are there for the centre?

We can keep it, close it, or privatize it.

Keeping it means that even with adjustments, taxpayers are on the hook one way or the other, no matter what accounting allocations are made. The question becomes is how transparent will those allocations be, and will anyone be able to determine the real deficits in years to come?

To close the centre is just not a realistic option, as even if it were to be mothballed, there would certainly be continuing costs to keep it from deteriorating.

To privatize it may have some appeal, but there is and will be a contingent of our community which will vigorously oppose that. There is another segment of our community which are prepared to pay even larger taxes, and that is a reality also.

The long and short of it is that no matter what option is pursued, there is no clean solution. Those that are most responsible for this mess need to answer for it, and city council needs to ensure that the same, at best misguided, decision making process is not repeated.

City Manager suggests we should not look back?

Amazingly, Bill Holtby, City Manager for St. Albert, suggests in a recent TV interview that we need to look forward, and not backwards, on the whole Servus Place mess.

It has often been said that those who do not learn from history are doomed to make the same mistakes again.

Don Sinclair's Blog has a poll on this issue, available here.

It's confirmed - St. Albert most expensive in capital region

To no one's surprise who lives in St. Albert, we have been confirmed as being the most expensive jurisdiction in the Edmonton Capital Region.

Quoting from an Edmonton Journal article of today:

"The city's total costs were also right in the middle of nine municipalities surveyed in the capital region, with Fort Saskatchewan ($4,187) on the bottom and St. Albert ($5,580) at the top."

The "total costs" is referring to a combination of property taxes and all utility charges.

With all the recent cost overruns, including Servus Place, the city will be hard pressed to address this.

A concentrated effort on 80/20 residential/commercial, a business friendly atmosphere at City Hall and a new look at reducing, not increasing expenses is required.

First Casualty in Servus Place fiasco

Paul Moulton, the former Servus Place manager has resigned.

Although reports do not state any reason for his resignation, it does not take much imagination to guess why. It also does not take much imagination to suspect that his contract was either not renewed, or that there was a settlement arrived at with the promise of a good reference in any future jobs he may pursue. Mr. Moulton, after all, was a longer term city employee.

Whether this was the right move we won't know at this point, but it seems that with a number of reviews about to take place, it may have been more constructive to have Mr. Moulton participate in them.

It is perhaps natural to point at the person who most directly was involved on a day to day basis in the management of Servus Place. Perhaps this was the right move. Hopefully his leaving does not impede constructive investigation into the operation.

Some answered questions

City council last night agreed to a terms of reference for a citizen's task force to be part of the Servus Place review. The only change was to in section (G), and that was to add the private sector operators as those to be consulted with. Only councilor Carol Watamaniuk voted against the terms of reference, as she expressed concern that it may be contrary to city policies to have citizens advise council directly, and not through a committee.

Bill Holtby advised council that these terms were drawn in only a short period of time late last week. We must give administration credit for doing a what I consider a good job on these, as I believe they are as comprehensive as one could hope for and expect.

What was clear to me from watching the council discussions on this issue is that the vast majority of council, and certainly Mayor Crouse, are genuinely concerned and upset about the situation, and want real answers to come out of the four reviews that will be happening simultaneously. Mayor Crouse specifically made comments with regards to Councilor Watamaniuk's concerns and her wanting administration to come up with a report on possible variances with city policies, Provincial regulations and "human resource issues". His comments were clear; citizens are concerned, answers are needed sooner rather than later, and he made strong comments about not delaying any action by adding layers of bureaucracy. His comments were echoed by some other councilors.

As much as I have been a critic of what has transpired in the past month, it is clear that council got the message. I also believe that the administration has got the message that citizens want and demand clear answers, no obfuscation and transparency from here on in.

It is a good start to the whole Servus Place mess and reviewing what happened, and more so, what to do to fix it.

How will City deal with Servus budget variance?

Taken from the 2007-2008 approved budget:

The City is committed to achieving the budgeted projections and the overall philosophy that, by year three of operations, Servus Place will be operationally self-sufficient.

Forecasted revenue for Servus Place in 2007 is $6,768,500 and $7,545,400 for 2008. The facility is expected to have operating expenditures of $6,891,400 in 2007 and $7,323,100 in 2008.

We now know that this was a pipedream projection that will never be met under current circumstances. The city has a policy that specifically does not allow for any future tax levies to support any Servus deficit.

How does the City plan to deal with this? It is obvious that either they must change their policy, or Servus must miraculously produce at best a break-even situation.

The really important clauses in the policy state:

1. The Servus Place tax levy shall be the only direct tax levy support for Servus Place.

2. Use of the Servus Place tax levy shall be restricted to funding debt principal payments and interest expense on debt incurred for the initial construction of Servus Place; and Servus Place operating deficits for the 2005 to 2007 fiscal years. Servus Place tax levies charged after 2007 cannot be used to fund a Servus Place deficit, if any.

These are the City's own documents. They do have a problem, and my concern is that we as taxpayers are going to be the solution.

Is Servus trying to spend its way out of a deficit?

Unbelievably, Servus Place is advertising for MORE staff, even though comments by City officials suggested all hiring would be frozen until the reviews are done.

Thanks Don, for the heads up. (This link is to Don Sinclair's blog and he found this bit of information.)