St. Albert's biggest recreation centre is expected to have an operating deficit of more than $2 million this year, which is nearly half a million less than what was estimated for this year's budget, due to an increase in equipment and facility rentals, day admissions and program registration.
St. Albert city council was left with a few unanswered questions regarding Servus Credit Union Place's operating costs after receiving a year-to-date financial report for the recreation centre on Nov. 15.
The report comes from a motion passed by council in September that requires city administration to report annually on Servus Place's financial performance going forward.
During a standing committee of the whole meeting on Nov. 15, council heard from administration that Servus Place is expected to have an operating deficit of $2.1 million for 2022, which is $500,000 less than what was estimated in the 2022 budget.
In 2021, the rec centre's operating deficit was $2.9-million.
From Jan. 1 to Sept. 30, 2022, Servus Place generated $4.28 million in sales and user fees, while the total operating expense was $5.77 million, the report states.
In the committee meeting, council heard from administration that the lower-than-estimated operating deficit is because of a “strong” increase in equipment and facility rentals, day admissions, and program registration.
Council also heard that membership numbers have yet to rebound from the ongoing COVID-19 pandemic. Currently Servus Place has about 4,400 members, compared to about 6,000 before the pandemic, administration told council.
In an interview, Coun. Sheena Hughes said the year-to-date report wasn't exactly what she was looking for when she put forward the motion in September requiring annual financial reporting for the facility.
"I realized that when I put this forward, it was under relatively short notice in the land of government ... but I was hoping for more of (a) breakdown of the money coming in and out by department," Hughes said, explaining that she wanted to see which, if any, parts of the facility were creating revenue.
"I'm going to continue to push to get this in the future to just increase the transparency and accountability."
During the committee meeting, administration told council that future reports will include more details, rather than just revenue and expenses for the facility as a whole.
"I really want to see more of an in-depth understanding of why we're continuing to require the subsidy," Hughes said.
"It's great that they are forecasting a $2.1 million subsidy for this year; however, we still don't understand why it needs to be $2.1 (million)."
In an interview, Coun. Natalie Joly said she wasn't surprised to see Servus Place running a deficit this year as much of the first half of 2022 was heavily impacted by COVID-19.
"We knew that COVID made a big impact on all recreation facilities across the country and we're still seeing that today," Joly said.
Joly also said that although more detailed financial reports for the rec centre will be good to have, she doesn't imagine council will direct any operational changes as a result, as administration has already implemented cost-saving measures as needed.
"They do a great job of making changes as needed in terms of operational decisions," she said.
For Coun. Shelley Biermanski, one aspect of Servus Place she'd like to see improved moving forward is cost recovery.
"Our goal is fiscal responsibility in every department right now, that's the direction we have to go in these times," she said. "Efficiency has to be found and that's our goal no matter which department or facility we're looking at."
Solar array savings
In response to a question posed by Coun. Mike Killick, administration told council that between Jan. 1 and Sept. 30, 2022, the array of solar panels on the roof of Servus Place was able to generate about $100,000 in energy cost savings.
As previously reported by The Gazette, the solar array, which became fully operational in November 2021, is capable of covering 16 per cent of Servus Place's electricity use each year.
In an interview, Killick said he was hoping the amount of savings would be higher, "but any savings is good savings."
During the committee meeting, Killick also asked administration if the rec centre's operating costs were being affected by inflation. In response, administration didn't have any examples but said costs were increasing because of inflation.
"Those things can really drive up the operational costs because often we look at them on a capital project, but on the day-to-day operations of service, they can have a very big impact as well," Killick said.
"I wanted to make sure that we were using the most current numbers accounting for inflation, to say what our projections are going to be for the 2023 budget."
Killick also said he supported Hughes' comments about wanting a more detailed financial report on Servus Place going forward.
"I think a bit more detail below the high level financial numbers would be helpful to know," Killick said.
"A little bit more detail would really help council as a whole understand what areas of service are actually making money and supporting the highest number of community users versus some of the lower usage areas that may be costing us money."