St. Albert's Servus Place recreation centre will run a nearly $1.5 million operating deficit this year, the city is projecting.
The expected deficit represents an 83 per cent cost recovery rate, which a report to council said is actually nine per cent better than the $2.24 million deficit the city budgeted for at the beginning of the year. The report was written by Susannah Wood, a supervisor of analytics and business operations.
The nearly $750,000 in more-than-expected revenue being projected for the recreation centre stems largely from higher-than-anticipated membership numbers and day-admission revenue, Wood wrote, adding increased swimming program revenue and facility rentals also had a positive impact.
However, Wood's report said the city has run out of options to further reduce Servus Place's operating costs “without impacting or reducing the facility's operations.”
“Municipal support for recreation opportunities is a fundamental element in realizing the social benefits of recreation, as it helps create an environment where individuals can come together, build relationships, and enhance their overall well-being while contributing to a stronger and more cohesive community.”
Although Servus Place's projected deficit is quite a bit lower than what the city budgeted for, Coun. Sheena Hughes says she plans to put forward a motion to hire a consultant to see if there are efficiencies to be had.
“If that's the case — that administration says they can't find any further efficiencies on their own — I'm more than happy to have a consultant come in and help them find them,” Hughes said.
“There has not been any type of operations review in any capacity of Servus Place since 2008, so we're looking at 15 years,” she said. “Since its opening, there's not been a review of its operations to see if we can find efficiencies.”
“That's well past overdue.”
Last year, Servus Place's operating deficit was about $2.1 million, and in 2021 the deficit was $2.9 million; however, the COVID-19 pandemic was a contributing factor both years.
Coun. Ken MacKay said he doesn't expect Servus Place, or any other city-provided recreation facility, not to be subsidized.
“It'll never be 100 per cent cost-neutral,” MacKay said. “It just can't be.”
“[With] Servus Place there's going to be a expectation that there is a public cost.”
MacKay also said he was skeptical of Servus Place's ability to grow in terms of memberships in the years to come, as many of the individual facilities are “maxed out,” such as the fitness area.
“I don't think we can grow much more because the weight room is kind of maxed out, the locker room has always been a problem, so the actual use of that facility is probably as maxed out as you can possibly, or reasonably, expect it to be,” he said.
“I think as long as we are not subsidizing it substantially more all the time, there's got to be a realization that there has to be ... some public expenditure.”
Wood's report to council also shows the proposed 2024 budget, which council will finalize next month, projects Servus Place to run a nearly $2 million operating deficit, with overall expenses totalling $8.9 million and revenue projected to be $6.93 million.
