After seven months in operation, the Canada Games Centre is hemorrhaging money and sending the city’s budget into a tailspin.
Revenues from the $42-million complex are falling short — $549,000 under budget.
And expenses are skyrocketing, they’re now $224,000 higher than anticipated.
That leaves the centre $773,000 in debt.
“The whole building is a work in progress and I think we have to understand that this thing is going to take time,” said mayor Ernie Bourassa.
“I think it’s really premature to judge the quality of the forecasting and budgeting numbers until we’ve had a chance to go through this for two or three years.”
“I don’t think we can make any declaration on the state of the centre until the end of 2008.”
Bourassa attributes the $549,000 revenue shortfall to the late opening date, lost money on the test events — where the city rents the facility for free and regular users can’t get in — and lower-than-expected pass sales.
In January the centre projected sales of 1,710 adult monthly passes. But, they actually sold 1,884 monthly passes in January, 1,462 in February, 1,526 in March and 1,076 in April.
Throughout those three months, attendance hovered between 8,600 and 10,000 a month.
And Bourassa attributes the $224,000 expense overrun to higher-than-expected employee wages because of overtime and shift differential.
So now those lost dollars must be made up through cutbacks to other departments.
It’s the first time the city has had to completely revise its budget after the first quarter.
This week council reps rolled out a slash-and-burn budget revision proposal to make up the shortfall.
Under it, many city departments would see their budgets cut, city workers paycheques slashed, and tenants currently leasing space in the Canada Games Centre would see rent hikes.
Casual and temporary wages and benefits would be chopped by $54,000; Information Systems would see wages and benefits cut by $40,000; Engineering would see wages and benefits cut by $35,000 and the director of Operations would take a $31,000 pay cut.
Some councillors challenged the cuts.
“I don’t want to see other departments get penalized because the Canada Games Centre couldn’t budget properly,” said councillor Doug Graham.
He suggested lowering the sum the city puts aside for capital projects.
Normally the city would funnel 60 per cent of its $5.13-million comprehensive grant from the territory into its capital reserves.
Graham suggested reducing the contribution to 50 per cent this year, freeing up $520,000 to cover the shortfall.
As well, the city would not transfer the usual $110,000 to the contingency reserve, which is money the municipality puts aside for emergency cases like this.
That makes $630,000.
Add this year’s $127,000 property tax hike, already in the cards, and the money would almost cover the $773,000 shortfall.
The city’s capital reserve sits at $4.8 million.
By diverting the $520,000 in reserve, the city would also lose $20,000 in interest.
It would not affect the city’s capital projects in the short-term, said city administrative director Robert Fendrick.
“It’s a balancing act to maintain sufficient funds in the reserve.”
So, will the city face this kind of shortfall every year?
“A start-up year is always an unusual year,” said Fendrick.