Red Deer City Council provides $2 million in grant funding to Westerner Park for continued operations

Today Red Deer City Council approved a $2 million operating grant for Westerner Park to continue operations beyond mid-August when cash flow projections show that operations may need to cease at that time without financial support. The funding will only be accessed by Westerner Park, if required, based on continued oversight of cash flow and is expected to allow operations to continue into this 2021. The grant does not have an impact on the tax rate.

Westerner Park had requested an operating grant of between $1 and 3.5 million. The request came 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.

If the city didn’t provide financial assistance to Westerner Park and no other form of financial assistance was identified, Westerner Park would have needed to evaluate options, which may have included moving to receivership in mid-August and discontinuation of operations by the Westerner Exhibition Association. Alternatively, as one option, the city may consider taking over Westerner Park operations.

“This was a difficult decision for council, particularly at a time when many organizations and community members are struggling financially,” said Mayor Tara Veer. “In providing access for Westerner Park for up to $2 million in grant funding, council considered the critical role Westerner Park plays in our region’s economic recovery, especially post COVID-19, and the $150 million of economic benefit their activities typically generates. However, council requires the forensic audit and financial sustainability project before fully deciding on the future of Westerner Park.”

The City of Red Deer has contracted a third party to undertake a forensic audit and financial sustainability project regarding Westerner Park’s financial situation. The forensic audit is to determine if any misappropriation took place in relation to the construction and financing of Exhibition Hall and the decision to host the Canadian Finals Rodeo, as well as during the 2018-2019 fiscal year. The purpose of the financial sustainability project is to provide an assessment of the current and future Westerner Park financial capabilities and provide recommendations for the future state of Westerner Park.

“The results of the forensic audit and financial sustainability project are expected later this summer,” said City Manager Allan Seabrooke. “As part of the city’s financial oversight, administration is working with the auditor and Westerner Park to understand how past decisions caused their current financial situation. This information will be provided to Council to help them make decisions in creating a sustainable financial future for Westerner Park.”

Following an in camera review of the 2019/2020 audited financial statements, city council also passed a motion that strongly recommended that Westerner Park hold their annual general meeting (AGM) earlier than the currently scheduled September 9, 2020 date so shareholders are made aware of the details enclosed in the statements as soon as possible.

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.
  • In July 2020, city council approved a $2 million operating grant to Westerner Park for continued operations into the fall of 2020. The funding will only be accessed by Westerner Park, if required, based on continued oversight of cash flow and is expected to allow operations to continue into 2021.