At their July 8, 2020 meeting, Red Deer city council will review and discuss Westerner Park’s request for an operating grant of between $1 and $3.5 million. This request comes following financial challenges at Westerner Park, which resulted in The City of Red Deer assuming temporary financial oversight of Westerner Park in an effort to ensure the short, medium and long-term success of the organization.
Based on current cash flow projections, Westerner Park is requesting an operating grant to continue their operations beyond mid-August 2020. City administration is recommending a $2 million operating grant, which is expected to provide sufficient cash flow for Westerner Park until into 2021. These funds would only be accessed by Westerner Park, if required, based on continued oversight of cash flow. If approved by Council, this grant would not have an impact on the tax rate, as it is a one-time grant.
“As a pivotal community partner, this grant is the best option to ensure some sustainability at Westerner Park while they determine the full effects of COVID-19 on their operations,” said City Manager Allan Seabrooke. “If approved by city council, this grant will enable Westerner Park to continue operations that bolster community life and economic development in our city and region. It also allows the city and Westerner Park to continue the work of understanding the financial situation and solidifying the financial stability of the organization.”
Earlier this year, on recommendation from administration, city council approved a one-time emergency operating grant of $1 million for Westerner Park. This was dealt with in camera, at that time, due to legal considerations. This grant was necessary to help maintain some stability at Westerner Park until the city could investigate and assess the financial situation, This grant was provided for short term operations of Westerner Park in their 2019/2020 budget cycle. The city applied terms and conditions for the use of this grant, including financial oversight for when Westerner Park utilized any of the funds.
Westerner Park has continued to decrease operational costs since January 2020. The majority of the cost reductions have been as a result of staff layoffs, temporary layoffs, and additional reductions in hours. In addition to renegotiating key contracts, Westerner Park has also eliminated all nonessential expenses.
If the city doesn’t provide financial assistance to Westerner Park and no other form of financial assistance is found, Westerner Park will need to evaluate options, which may include moving to receivership and discontinuing operations of Westerner Park. Alternatively, the city would need to take over Westerner Park operations.
“There is still more information needed in regards to the financial situation at Westerner Park,” said City Manager Allan Seabrooke.
“As part of this, the city has engaged a third party consultant to complete a forensic audit and financial sustainability project related to Westerner Park’s financial situation. The goal of this work is to enable a sustainable future for Westerner Park where they can serve the community in a financially sustainable way. The results of this audit are expected to be received later this summer.”
A number of factors ultimately led to the financial instability at Westerner Park, including the decision to expand the facility, major event contract negotiations and the current economic reality, to name a few.
As a hub for central Albertans to gather and celebrate community events, Westerner Park is a non-profit organization and agriculture society that serves the community in a number of ways. From concerts and trades shows, weddings and banquets, hockey games and agricultural events, Westerner Park drives over $150 million of regional economic activity. At this time, the organization is further impacted by the restrictions of events, including sporting events, festivals and mass gatherings related to COVID-19.
Between December 2019 and July 2020, the following major activities occurred:
- In December 2019, Westerner Park informed The City of its fiscal challenges and reached out to The City for assistance.
- In January 2020, Westerner Park laid off 14 full-time equivalent and 24 part-time and casual Westerner Park staff. A number of other staff saw a reduction in hours and benefits.
- In January 2020, The City assumed temporary financial oversight of Westerner Park.
- In response to COVID 19 and the financial impact to operations, in March 2020 Westerner Park temporarily laid off approximately 90 per cent of the remaining Westerner Park staff. Currently, 16 employees, many with reduced hours, are working at Westerner Park.
- In February 2020, The City approved one-time emergency operating grant of $1 million to support the continued short-term operations of Westerner Park. This was dealt with in camera, at that time, due to legal considerations. The City applied terms and conditions for the use of this grant, including financial oversight for when Westerner Park utilized any of the funds.
- In April 2020, following the guidelines set out by Alberta’s Chief Medical Officer of Health, Westerner Park cancelled Westerner Days for 2020.
- In June 2020, Westerner Park, along with the Canadian Professional Rodeo Association, announced the cancellation of the 2020 Canadian Finals Rodeo in Red Deer.