Tri-region councils approve TLC use of operations reserve funds for 2020 deficit

Tri-region councils approve TLC use of operations reserve funds for 2020 deficit


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Tri-region councils in Spruce Grove, Stony Plain and Parkland County, approved a TLC board recommendation to use operations reserve funds to cover the 2020 operating deficit, at council meetings on Feb. 22 and 23.

“I appreciate our time on the agenda this evening, to share the details of our operational deficit in 2020, which saw significant increase from the initial projections that I shared with you back in September when I was present to bring forward the 2021 operational budget,” said Lenny Richer, general manager for the TransAlta Tri Leisure Centre (TLC).

There were several impacts on the TLC’s operational revenues in 2020, most notably, the ongoing pandemic. As a result of Covid-19, the TLC was closed to the public from March 15 to July 6, 2020 and again from Dec. 19, 2020 to Feb. 8, 2021.

“The initial closure ceased the ability to generate the aforementioned self generated revenues, which included memberships, drop in fees and those types of admissions, corporate sponsorships, facility rentals and even our tenant rent,” said Richer. “Upon re-opening and for the balance of the year, provincial restrictions continue to impact membership retention and recruitment, program registrations as well as facility rentals (including special events).”


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As an example, Richer noted the pause on team sports in November resulted in an unexpected decrease of about $130,000 in revenue. Further impacts were also felt by the TLC’s tenants, several who have remained closed even after they were permitted to re-open due to limited traffic flow and impacts of provincial restrictions on their operations.

“Following the initial closure, and once it was clear that this closure might be for an extended period of time, administration took steps to reduce expenses as much as possible,” explained Richer. “While maintaining the ability to be responsive and open as quickly as possible, which was a direction of the TLC board of directors.”

Those measures taken to help reduce expenses included both temporary and permanent part-time, full-time and contract staff layoffs, reducing the material and supplies budget, freezing the training and travel budgets and a reduction in contracted services, that included security and custodial services and operating hours were also reduced throughout the summer months.

“The staff retained planned for various scenarios of re-opening, development of provincially required plans and updated documents to our health and safety protocols and guided a variety of capital projects which were completed while the facility was closed to avoid further disruptions in services later on,” he said.

Regional planning following the closure of the TLC involved exploring a variety of scenarios noted Richer. The initial budget forecast showed the potential deficit at that time to be about $400,000 (May 2020). Updated projections based on budget adjustments in September 2020 was about $60,000 to $100,000.


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“Between September and the end of the year, we saw significant and unanticipated changes in this amount. This was primarily due to a few factors, one of which being our membership return rate,” said Richer.

While they qualified for and received funding for rent from the federal government and they did work with tenants to reach an agreement, it resulted in less rent received than projected, to the end of the year. Overall, there was less revenue generated than anticipated.

“At the end of the year and after our audit was complete, the final deficit for the year was just over $503,000 ($503, 037),” said Richer.

At the end of 2020, the TLC had reserve funds in the amounts of $601,507 for their operations reserve and $907,642 ($250,000 committed to MCCAC lighting upgrade project) for their capital reserve.

Richer noted the operations reserve is to be used to fund future deficits of the corporation while the capital reserve is intended to offset future capital item costs. The operations reserve is a very fluid amount as it includes deprecation and capital purchases in any given year. This fluctuates significantly from year to year and has ranged over the past five years from as low as $92,578 in 2017, to as high as $601,507 in 2019.

As outlined in the TLC report that was presented to the tri-region councils, the board considered three options and listed the pros and cons of each one, with the board recommending option number one, which included using the operations reserve to fund the deficit.

“Twenty-twenty was a challenging year for everyone and 2021 continues to be challenging and we are using the learnings from last year to form future decisions,” Richer concluded.


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