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.

Summer/Early Fall Update

Here's some of what I've been up to for the past couple months:

 

Personal Vaycay

Cally and I spent the first part of the summer fulfilling a dream of ours to go to Europe.  We toured around seven countries for five weeks and were able to really experience a number of different cultures.  It was also an excellent learning opportunity as I got to see how cities operate over there.  We kept up a travel blog if that piques your interest.

Tourism Strategy

Council has been working on City-specific tourism strategy to compliment our position within the Grande Prairie Regional Tourism Association.  Several discussion points included how we can capitalize on the opening of the dinosaur museum, what we can do with signage and boulevards to beautify the city, and whether there is a need for a big attraction (possibly world's largest something??).

Downtown Enhancement

Council has had a couple of visioning sessions where we've discussed what we'd like downtown to be.  We will be engaging the public for feedback in the coming months.  We are currently waiting on a report that will identify all the sewer/waterline/storm water infrastructure upgrades that will be needed should we decide to encourage higher density development.

Montrose Site

In conjunction with the downtown enhancement project, we have began making plans for the empty Montrose site to the south of Montrose Cultural Centre. While nothing has been written in stone, there seems to be much support for a performing arts/multimedia centre and a town square/green space. 

Seven Generations Tour

Several Council members took part in a tour of a number of Seven Generations wellsites.  It was valuable to see firsthand the level of oil and gas activity in the area.  It's good for Council to have an ear to the ground with regards to economic activity as we can be better informed as to the anticipated pressure that will be put on the City's infrastructure and services.

Deputy Mayor/Community Events

I served my first term as Deputy Mayor and had the chance to run my first Council meeting (fyi--everyone survived).  I was able to attend several events put on community groups including:  Youth Emergency Shelter, Ronald McDonald House, Big Brother/Big Sisters, Free the Children, PACE, CSD Homeless Initiatives, Suicide Prevention Resource Centre, and the Mission Heights Neighbourhood Association. 

Wapiti Corridor Planning Society

We are currently working with residents of Grovedale who have had some concerns with the plan.  The Society will be working with Sustainable Resource Development to incorporate our recommendations into their Land Use Framework.  Consultations on the Framework begin in the new year.  You can find out more about the plan here.

Joint municipal meetings

We have held a couple meetings with our municipal neighbours to discuss a number of topics ranging from regional transportation priorities to water lines to advocacy efforts.  It's always great to connect with other Councillors in the region to hear their perspectives.

Municipal Symposium on Regional Governance

At the beginning of September we hosted a symposium where we brought together advocates and critics regional municipal governments.  The information that was provided was highly valuable.  You can watch clips of the symposium here.

Special Olympics

I was appointed to the 2015 Alberta Special Olympics board earlier this year where I've taken on the responsibility of making sure each of the 850 athletes and coaches are fed during their 3 days here.  I've been able to meet a lot of new people and am having a lot of fun with it!

AUMA

Council attended the yearly meeting of the Alberta Urban Municipalities Association.  It was a great time to meet with colleagues across the province and to meet with provincial cabinet ministers.  There has been a strong push for significant changes to municipal systems as the Municipal Government Act is reviewed.

Budget

City Council and staff have been gearing up for budget in one month's time.  Starting Nov. 13th, we begin deliberations for the upcoming 4-year budget cycle.  We are going to be using some new engagement tools to get public input on the budget...so stay tuned!

Swimming Pools and All That Jazz

The results are in. The results of the Aquatics survey that is.  Council will now decide on Monday which items they are going to send to budget deliberations in the Fall.

I want to thank everyone who participated in the survey and who have engaged with me in one of the many conversations I've had on the subject.

By taking into account the survey results, the consultant's report on aquatics, discussions I've had with our Facilities department, and the engagement I've had with residents, I have several thoughts going into Monday's vote.

Here they are:

1. Bear Creek Pool

It is very obvious that many GP residents want an outdoor aquatics option.  65% of survey respondents indicated they wanted to see it re-opened.  I would like to see the re-opening of the pool. 

To me, it is not a question of "if" it should be re-opened but rather "how" it should. I still think that a wading pool with a splash park would be of greater value to the community and would be cheaper and more accessible to a greater number of residents.  The pool is over 50 years old and I think it's time to look at how an outdoor pool can best serve a population that has grown by 700% over that time.

Example of wading pool in Lethbridge, AB

2. Eastlink Centre Upgrades

This one was a bit tricky to read.  I think the survey should have separated the sound baffles and the movable floor into separate questions.  While 70% of respondents did not want the upgrades, in the 53 pages of comments, there seemed to be lots of support for the sound baffling.  As the noise level is the number one concern I hear from Eastlink visitors, I will likely be supporting the sound baffle expense.

I think we could have done a much better job of explaining what the purpose of a movable floor would be.  In any case, there hasn't been much support for this option and I don't see it as a high priority at this time.  Depending on the outcome of the Leisure Centre pool, it may be something we want to look at in the future.

3. The Leisure Centre pool

There was no clear consensus on what should be done with the Leisure Centre pool.  Nearly a third of respondents wanted it opened strictly as an 8 hour a day programmed facility (swimming lessons, fitness classes, user groups).  A third did not want it re-opened.  And just over a third wanted it opened for a full 16 hours to include programming and public swim times.

It's clear that there is an appetite for a smaller aquatics centre.  It is also clear that residents are concerned with our high taxation levels and want to ensure our service levels are appropriate for the population we support.

I agree that a smaller aquatics centre would be a benefit to our community.  For me, it is a question of timing and the most responsible use of taxpayers dollars.

With that said, I think that refurbishing the Leisure Centre pool would be an irresponsible use of taxpayers dollars.  Our Facilities department has indicated that the $10 million rehab cost will likely balloon to between $12-15 million once all the dust settles.  Old pools are highly expensive to restore and maintain and it is estimated that the capital and maintenance costs will be in the $30-35 million range over the next 10 years. 

This is just for a basic rehab to get the facility running again...no significant upgrades.

To put this in context, Beaverlodge just built a brand new facility for $11.6 million which includes a swimming pool, leisure pool with therapeutic uses, a fitness centre, a multi-use space and an indoor walking track.

I also believe that there is still a great deal of swimming capacity left at the Eastlink Centre (see last post for more on the details).  In fact, if the Leisure Centre pool were to reopen, we would have the greatest level of pool capacity per capita in Canada.

As this is the case, I think that the Leisure Centre should be re-purposed for other uses.  I mentioned in my last post that there are variety of ways in which the space could be used (field house, track & field training, squash/racquetball courts, indoor skate park, specialized fitness facilities for seniors and people with disabilities, and so on.)  Any of these options would cost a small fraction of the cost of re-opening the pool.

I believe this option would give a greater number of residents more choice in the recreational options they can pursue.  It would also be more affordable for people as users fees would only be a fraction of those at the Eastlink.

The consultant's report on aquatics mentioned that GP would be able to viably support a smaller pool in 10 years time.  I think that the growth projections used in the study were very conservative though and we could likely support a smaller pool sooner than that.  I feel that it would be a wise course of action to plan for a new facility in several years time.  This would provide better long-term value for taxpayers and would better align the City's service levels with the population we support.

On Monday night I will likely be voting to re-purpose the Leisure Centre for other recreational uses.

4. Spray Parks

 55% of respondents were happy with current spray parks.  45% wanted either 1, 2 or 3 more.  I think we're well served for the immediate future.  I would like to see one or two added to our 10-year capital plan though to meet the demands of our growing population.


Again, thank you to everyone for your input.  It was awesome to see so many people engaged on these issues! 

Solution 8: Specialized Municipality (Part 2)

I've found the opposition to this solution has three general areas:

• Values
• Taxes
• The "Black Hole" Effect

Values

The premise of all of my arguments in these blog posts has been that we are one big community who all use each other's services.

Some people do not see it that way.  The farmer out in the Goodfare area may not feel very connected to the folks in the City.  Her values may very well be different.  She might not care about her taxes funding a new park in the City, but she cares very much about drainage problems in her ditches.  The tow truck driver in the City may not value having a seniors home in Hythe.  Often this debate is formed around urban vs. rural values.

A couple things to say to this:

First, I don't believe municipalities should be formed around values.  If we did, we would have to have millions of them.  We don't create a "downtown" municipality for the urbanites or a "parks & playgrounds" municipality for young families.  Municipalities should be formed around communities of people that interact with each other on a regular basis, regardless of the diversity of values.  Even the farmer from Goodfare commutes to the City regularly for supplies and the tow truck driver has to serve customers in Hythe.

Within communities there are many values.  In a regional municipality you would want to ensure that everyone's values are reflected at the Council table.  This is why it would be crucial to have representation from all over, so that issues like ditch drainage are not passed over.  In the Regional Municipality of Wood Buffalo (which includes Fort McMurray and 9 smaller communities), Fort McMurray elects 6 councillors and the remaining areas are divided into wards which elect 4 councillors between them.  The mayor is elected at large by everyone.  I could see the RM of GP having a similar setup.

Second, a large portion of the people in the County right now are essentially living an urban lifestyle.  Living on a one-acre lot in Carriage Lane doesn't quite qualify as "country living" in my books.  Even the subdivision with 3-acre lots I grew up on 20 minutes from the city could hardly be called "rural".  Thus, I think that the belief that the County has a unique rural identity and can better serve rural interests is greatly mistaken.

Third, you don't have to give up your lifestyle as part of a specialized municipality.  Some people love living in small towns.  Some people love living on acreages.  Some love living in downtown condos.  A specialized municipality recognizes that there are these different values and helps ensure everyone can live together no matter what their lifestyle is.

Taxes

Reason 2: I don't want my taxes to go up. 

Neither do I.

There are many scenarios which could play out with tax rates.  One scenario would be to equalize all rates completely; it would look something like this:

There would be almost no change in farmland taxes.  County businesses would only see a minimal increase in their rates.  County residences would see their taxes raised by a couple points.  With that said, in an amalgamation deal you would likely have a phase in period so that all affected taxpayers would gradually move to new regional rates over a period of say, 10 years.

As for the towns and village, there would only be minimal changes as their current rates are in between the City's and County's right now and are already close to what a regional rate would likely be.  All City taxpayers, residential and business, would see a decrease in their taxes as new regional mil rates would be a point or two lower than current City rates. 

But Rory, why should I have to pay more taxes if the costs of delivery services to my acreage are less?

Good point.  There are some developments in the region that use much cheaper storm water management systems (ie. ditches) and have lower transportation costs (ex. snow removal costs are lower).  To address this, you could have a Rural Low Density tax rate for properties "x" distance from the city that would be lower to address these differences.

Also, it's important to note that if a portion of the MD's oil and gas revenues were included in the mix, there would be downward pressure on everybody's taxes.  With only 1/4 of the MD's linear and M&E revenue, we could all enjoy the rates being paid by County residents now.  No one's taxes would have to increase.

So there are many different scenarios which could play out in a regional municipality.  I believe the best scenario would have to align the level of service a resident gets with the amount of taxes they pay.  It's all a question of fairness.

The "Black Hole" Effect

Reason 3: If we're a regional municipality, the bigger urban centres would have the greatest level of representation, would dominate the agenda, and get most the resources at the expense of outlying areas.

This is a legitimate concern in any merger.  That the big partner ignores the little partners.

My response:

There are a number of ways you would ensure this doesn't happen.

Again, you would have representation from all areas, so all areas would have a voice at the Council table.

You could also set up a system of discretionary funds whereby each population centre would be ensured a certain amount of funding each year.

In Strathcona County (which includes Sherwood Park, 8 hamlets, and lots of farmland), they make sure their committee structure reflects the diversity of the municipality.  For example, it has an Agriculture Service Board to ensure the County's rural policies do not escape Council's attention.  Strathcona also has a Governance Advisory Committee which ensures bylaws and policies are working for both urban and rural residents. 

Strathcona has been an excellent model of what a regional municipality could look like.  And it hasn't been Sherwood Park-centric.  For example, the tiny hamlet of Ardrossan (population: 434) just had a $21 million dollar recreational facility built there to serve residents in the central part of the municipality. 

My personal viewpoint is that this wouldn't be much of an issue.  Most people in GP are connected to other people in the area through business, family, history, etc.  In my experience, people want the whole region to thrive.  They want the best camping facilities, the best biking trails, the best roads, the best cultural facilities.  We truly function as one community and I believe elected officials would support this vision.

There would certainly be many challenges in the creation and operation of a regional municipality.  However, there are many creative minds in our region who would come up with innovative solutions to each challenge. 

Okay Rory...I think I know where you stand...but let's hear it...what's the best solution?

Specialized Municipality.

If we want the region to grow sustainably and equitably, I believe it is the ultimate solution.  Financially it makes sense, planning-wise it makes sense, and in terms of fairness, there is no other solution that works as well.

My hope is that the other municipalities in the region would see the value in combining our strengths to grow the region as one municipal unit.  We truly function as one community.  We shouldn't have to take from one area to give to another and constantly be fighting over who gets what.  It just makes sense for our municipal systems to be aligned with reality. 

Our region is already aligned as one in many ways.  Our Chamber of Commerce serves the region, we have one Homebuilders Association, the GP Regional College, the GP Regional Hospital, and the Community Foundation of Northwestern Alberta which recently changed to reflect its service to the region. 

While a specialized municipality would be ideal in my view, in the absence of a willingness from neighbouring municipalities or the Province to explore the idea, I think a revenue sharing deal and regional planning reform would be the next ideal solutions.

And now your turn...

Which solution or solutions do you feel will best address the region's problems? What municipal system is going to best allow the region to thrive?

Solution 8: Specialized Municipality (Part 1)

Still with me?  Good.  The best is yet to come...

The Regional Municipality of Grande Prairie.  Nice ring to it eh?

The final solution I'll be looking at is becoming a specialized municipality.  Becoming a specialized municipality would mean that all 6 municipalities (and perhaps part of the MD as well) would shed their corporate identities and create a single unit.  The new Council would be formed with representatives from the whole area.

Let's look at how this could be a solution to each of problems I've listed:

Problem 1: Inequalities in who pays for services.

Wouldn't exist anymore.  All linear and M&E revenues would now flow to the new municipality to benefit all.  Everyone would be paying tax rates that reflected the services they have access to.  We wouldn't have to compete for provincial grants against one another.  Everyone would be contributing equally to the costs of the area.  Plain and simple.

Problem 2: Poor Regional Planning Decisions

Would be much better.  Without the drive to get as much development as you can so that the other guy doesn't get it, you can make much more rational planning decisions.  It would be in everyone's interest to have a coherent regional plan which identifies the best places to develop various land uses.

Problem 3: Inefficient Service Delivery

Would be greatly improved.  One Fire Department.  One Development Department.  One GIS department.  And so on.  Multiple sets of regulations condensed into one.  One set of bylaws to follow.  And service efficiencies would in the long-run lead to cost savings for everyone. 

Problem 4: An unequal playing field for development.

The playing field has been erased.  Done.

Other benefits:

Everyone would have a say in how the region grows

Everyone would have a vote in matters that concern them.  Right now I have no vote on campground funding or development in Clairmont, even though they directly affect my life.  Someone living in Whispering Ridge may own a business in downtown GP but is not able to vote in people who would support their views on downtown development.  A specialized municipality would correct that.

Economic Development

Local governments should be actively working together on attracting businesses to the region.  However, right now there is competition between municipalities to get development to reduce the tax burden on residents.  Because of this, it's not in each municipality's interest to work together on economic development, as we each want to grab the biggest piece of the pie.  Being one municipality would change that. 

Other efficiencies

A spin-off of amalgamation would be that you wouldn't necessarily need to have the Public and Peace Wapiti school boards.  If they were to combine, there could be efficiencies found there too.  For example, does it make sense to bus students living in Wedgewood across town to PWA when they could go to a public high school on the south end?

Essentially, a specialized municipality would align local governance with how people are actually living their lives.

Wow Rory...that sounds perfect!  Why isn't everyone screaming for amalgamation??

Because, it's not perfect.

Oh.

Head on over to my next post to see what the challenges are and how I feel they could be overcome.

 

Next post ----> Specialized Municipality (Part 2)

Solution 7: Dissolution

Sounds foreboding doesn't it?

Dissolution is the process by which a municipality, well, ceases to exist (not the technical definition...but it works).

There is always the option for the City, Towns and Village to choose to "dissolve".  This means that we would cease to exist as corporate identities and would become hamlets in the County.

I believe there are many positive things that could become of being one municipality, as we will see in the next post.  However, I don't believe dissolution would be the best way to do it.

By dissolving, we would be completely at the County's mercy.  The County could choose to give us a voice at the Council table, or not.  It could decide that all future development would be in Clairmont and shut Sexsmith's growth potential down, or not.  It could...you get the picture.  Essentially, there would be no negotiation...we just would no longer be there.

Of course, this option is really quite fanciful...for the City at least.  The provincial government would never approve of a municipality that's Grande Prairie's size to just dissolve.  But you could always start the process for leverage.  The City of Cold Lake asked the Province to dissolve a few years ago.  While they said no, the issue was the impetus for the Province to give the $16 million yearly tax revenue from the Air Force base from Lac La Biche County to the City.

I don't believe that this is a desirable course of action though.  To me, dissolution is the "we just give up" approach.  Besides, there is a much better way to get to the one municipality solution...

Next post -----> Solution 8: Specialized Municipality

Solution 6: Regional Planning/Growth Boards

The Province used to have a number of regional planning commissions set up across the province until they were dismantled in 1995.  Most municipal planning was directed or advised through these boards, who were appointed by the provincial government.  So if a developer wanted to subdivide some land for residential in the County, it went through the Commission.  Many of the municipal planning documents were advised by the Commission, who planned with the region in mind.

The Province could set up planning commissions like this again.  I've heard mixed reviews on how well these commissions worked.  It appears they were quite effective in establishing good planning practices across the province.  There was much greater thought that went into regional planning.  More thorough consideration was given to where the best places to locate residential/commercial/industrial areas should be in the region.  On the flipside, much local autonomy was lost.  Many planning decisions were heavily influenced by the Province and there were times where local priorities weren't reflected.  This can be the problem with one size fits all approaches.

Another option would be for the municipalities of the region to create a Regional Growth Board.  The Province has created a framework for how these boards can work.  You may be familiar with the Capital Region Board that is composed of the 24 municipalities that make up the capital region.  The Board has the mandate to create statutory planning documents such as their Growth Plan.  The Growth Plan identifies how the region will develop.  What types of housing will go where, where the industrial areas are best suited, and regional transportation networks are just some of the problems they tackle.

As you can imagine, getting 24 municipalities to all agree on a plan is a challenge to say the least.  Every municipality has its own priorities and wants to benefit from regional growth as much as the next guy.  So while this option allows for greater local involvement in regional planning, it can be very difficult to find consensus.  Growth plans can become quite broad, lacking in defined measures to direct growth.

The City and County currently have an Intermunicipal Development Plan in place that does give the City some influence in development decisions around the City's boundaries.  However, the Clairmont area is not included in this plan.  Thus another option would be to reopen the IDP and have the plan include an area "x" kms around City boundaries in order to include Clairmont.

In the absence of reform elsewhere, I think that any of these options would improve land planning in the region.

Next post ----> Solution 7: Dissolution