Eastlink Centre Operational Deficit

Like many of you, I was shocked and angered to find out about the large operational deficit at the Eastlink Centre.  I thought it'd be helpful to share the full picture of where we're at, share some personal thoughts, and inform you on what is being done about it.

The Eastlink Centre had a budget this year of $12 million.  On the expense side, the Eastlink Centre is on budget.  The issue arises on the revenue side.  This year there was $7 million budgeted in revenue from user fees and $5 million in revenue from taxpayer subsidy. 

Due to an accounting error, Eastlink Centre revenues were overstated by over $2 million. This meant we were only on track to have $10 million in revenues, leaving us with the large deficit.  Some immediate actions were taken to address the issue. A number of temporary and casual staff had their contracts ended.  Even by scaling down the operations, a $1.75 million deficit will be left. Other departments have been instructed to rein in discretionary funding to minimize the impact.  We also have a financial stabilization fund that can come into play should we need it.

This situation brought two major questions that needed to be asked:

1. What is being done so that this error doesn't happen again?

and second, perhaps more importantly,

2.  Why are revenues down so significantly?

To answer these questions, there are a number of things happening:

An internal review of accounting practices is taking place to ensure conformity with standard City practices.  Council has asked for financial training systems to be reviewed to provide an assurance that our staff have all the relevant knowledge pertaining to our financial systems and to eliminate errors like this from happening in the future.

In regards to the revenue situation, there is going to be an external operational review completed on facility.  There have been ongoing service reviews of City departments and the Eastlink Centre was on the list.  The review has been pushed up and we hope it will be completed before the end of the year.

The review will do a thorough breakdown of all Eastlink Centre's services.  It will determine appropriate staffing levels, look at operating models, provide input on revenue generating capabilities and suggest areas where expenses could be reduced.

The revenue situation concerns me greatly.  If we don't bring in more revenue with user fees or find areas to reduce expenses, increased taxpayer subsidies may be required, which I'm not hearing much of an appetite for in the community.

On a related note, I am even more convinced that re-opening the Leisure Centre pool is going to be a much costlier proposition than expected.  If we're struggling with revenues for our flagship rec centre, I fail to see how we're going to generate enough revenue to keep TLC sustainable.