September 30, 2022 September 30, 2022

Costs, not revenue, the real issue at the Enmax Centre

Posted on 8 June 2022 by Prairie Post

Editor:

City council generated some controversy with the decision to implement paid parking at the Enmax. It seems the arena has been the city’s white elephant for some time, so perhaps it was inevitable council would look to enhance its revenues. Still, I wonder why no one seems interested in examining the cost side of the Enmax ledger?

Particularly when, as it turns out, revenue may not be such a problem after all. The city’s operational review compared (pre-COVID, of course) 10 small and medium-sized markets with hockey team tenants and found the Enmax earned more revenue than all of them, and substantially more revenue per seat. Yet the Enmax also loses more money (and substantially more per seat) than those same comparators. Does this not suggest a cost problem?

The authors of the operational review might have been so blunt, except they found they couldn’t be. Rather, they were limited to reporting that the “true operating costs are obscured by interdepartmental transfers, debt servicing, and asset transactions.” When a team of accountants hired to assess operations are unable to come to grips with the true costs of operations because your accounting is so opaque, shouldn’t this inspire further inquiry?

Is there some way to assess the extent of the Enmax’s anomalous costs? Perhaps. When council made the unprecedented decision to fund 100 per cent of the local $1 million bid for the 2022 Brier, it included in that sum the estimated cost to deliver the Enmax for the duration of the event – $340,000. The council’s advisors insisted at the time that no comparison data was obtainable, and the council accepted that without question.

Happily for the residents of Kingston, Ont., that city’s council was less willing to support their 2020 bid without information. Their advisors compiled a report of eight other Brier bids. I was also able to obtain bid information from the City of Kelowna respecting their 2021 bid by taking the apparently unusual step of asking for it. Nearly every one of the municipalities concerned offered a city-owned arena in support of the local bid.

I won’t go into all the details here (is that another letter?) except to report that the most expensive facility in the comparison group belonged to the city of Saint Catharines, Ont. 

That city supported their local bid to the extent of $428,000, with the cost of the facility estimated at $198,400. Thus, the Enmax is more than 71 per cent costlier than the next-most expensive facility to bid to host the Brier in the last few years.

I appreciate the limitations of this sort of analysis. But at least it is something more informative than making no findings due to obscurity. Surely the residents of Lethbridge deserve a better accounting of the “true operating costs” of this city-owned facility. Absent that, how can anyone be satisfied that the parking revenue is needed to offset user-generated costs of the arena, as opposed to City Hall-generated costs larded upon the arena simply because it is a revenue-generating asset?

Perhaps the council’s Audit Committee could take this on. This is not a group overburdened by work. Since the election that committee has cancelled half of its scheduled meetings and managed to meet together (according to its minutes) for six hours and eighteen minutes.

The best argument I can make for an audit of this (and other?) made-in-Lethbridge accounting solution is simply the following — governments of all stripes like to employ the phrase “evidence-based decision making”; how does one make a reasoned decision if one fails to obtain the evidence?

Brett Babki

Lethbridge

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