On Monday March 18, 2013, St. Albert city council approved an expansion plan for Servus Credit Union Place, previously named the Multipurpose Leisure Centre (MPLC), but wisely reserved funding for it. Because we are several months away from a municipal election, a member of city council would not want to be offside on this issue.
The expansion plan aside, let’s focus on Servus Place. Our civic visionaries of the day, prior to 2005, believed that St. Albert should have its own multipurpose leisure centre similar to those in neighbouring municipalities. With the successful passage of the October 2004 referendum, St. Albert city council began the process to enter the very competitive fitness and health business. As of Jan. 1, 2005, city council imposed a special municipal tax to pay for part of the capital cost and the retirement of the long-term debt.
Servus Place opened for business on Sept. 6, 2006. The final cost for the Servus Place premises came to $49.8 million, which included land, building, paved parking lot and lighting, architect fees, furnishings and equipment. Plan A anticipated that Servus Place operations would be cash positive (surplus) by 2008. After 18 to 24 months of operations, it was discovered that Servus Place was cash deficit. Instead of closing down the business permanently, Plan B was implemented with annual deficits to be covered by city general revenues.
Based upon the most recent data, as at Dec. 31, 2011, the Servus Place operation has cost St. Albert taxpayers $36,848,022, which is made up of annual deficits of $6,879,022, asset purchases of $7,036,809 and repayment of long-term debt of $22,933,191. One city official believes that Servus Place is worth it because of the social benefits it provides. For me the social benefits represent an unwarranted subsidy to a minority of St. Albertans and non-residents who use the facility and are not needy by any means. By the way my share of this unwarranted subsidy, as at Dec. 31, 2012 stands at $1,551.42.
The answer to the question should city council approve funding for Servus Place is an emphatic no because Servus Place has a revenue and/or a patronage problem. The investment of an additional $25 to $29 million will result in a greater financial burden for St. Albert taxpayers than it has at present.
William Tuchak, St. Albert
