Councillors Howard, Blatz, Lindstrand see need for information
City councillors Max Lindstrand, John Howard and Brandon Blatz agree with the need for a performing arts centre in Camrose.
They feel, however, there is still more information that needs to be obtained.
Councillor Lindstrand expressed concern May 14 over whether it is appropriate and legal for the City to use a provincial grant and borrow money for a facility that the City will not own.
"At the very best we could claim joint control. I am not comfortable voting in favour of these motions until we have some assurance that the agreements that we are about to enter into will pass the acid test when it comes to the provincial government. I think it is not appropriate for us to use these grants unless it is in a manner that is acceptable to the province."
Lindstrand said council would be able to better justify to the public a decision to borrow money for the project if it had joint ownership of the facility.
"I have never gotten a response as to why there couldn't be some kind of joint ownership."
Camrose community services general manager Paul Nielsen said the top administrator of the provincial grant program has seen all the documents, and is happy that all the grant criteria are being met.
City manager Damian Herle explained personal liability of councillors is not an issue as long as council spends the funds it receives for the intended or original purpose.
"If council were to make a decision to spend the borrowed funds for CPAC for any other project, if you voted to spend it on something else, that is where personal liability becomes an issue. As long as the funds are spent for what the project is for, the Municipal Government Act provides protection to councillors in regard to personal liability."
Councillor Blatz said it is not responsible of the City to proceed on a project containing agreements filled with blank cheques and question marks to be dealt with at some future point.
"I realize and acknowledge that this, and frankly, most any capital project requires a leap of faith, but this is more of a leap than I'm prepared to make based on these agreements."
Blatz said the project's agreements largely disregard every single principle council agreed to when it voted last June 27 to move forward with the Camrose Performing Arts Centre.
"This was circumvented by repealing the motion after being presented with a new set of principles and direction from City administration, even in the absence of explicit council direction to do so prior to their presentation for approval."
Blatz said one of his primary areas of concern are the actual ongoing yearly operational costs, which council has not spent much time discussing.
"If one looks at the projected budget from Schick (Schick, Shiner and Associates Report of 2010) for the first year, total administrative and maintenance costs would be in the neighbourhood of $600,000. This would be offset by the $100,000 maintenance contribution of the University. This leaves $500,000 per year in operating costs, which ultimately have to be funded from somewhere. Undoubtedly, the building will be utilized and revenue will be generated, so $500,000 would be a worst-case scenario in my mind. The question, however, becomes how realistic the Schick reports' expenditures and revenue projections really are, also taking into account the fact that they are 2010 figures. Furthermore, we have not yet followed some of Schick's primary suggestions, including the collaboration with the Bailey Theatre on the possibility of shared services and staff."
Blatz underscored the fact that the not-for-profit society and the board of governors that will be responsible for the day to day operations of the facility have yet to be established.
"In my opinion we are in a position of putting the cart before the horse and it would be less than prudent to potential users of the facility and the community at large simply to push this project through without at least reviewing some of these issues."
Blatz said if the not-for-profit is fronting the costs to bring in high-quality programming and experiences one or more failures on major events, it will require a further cash injection from the City, or will have to shut down for the year, which would result in a facility with very limited value to the community.
"The programming aspect and the ongoing operational costs, over and above maintenance and the cost of the capital facility itself, have not been examined with due diligence in my opinion."
Blatz said signing blank cheques that will fiscally bind future councils and the residents of Camrose for the next 25 years, without the requisite knowledge and proper due diligence on all aspects, has community-wide ramifications too serious to discount.
Councillor Howard said City council has yet to see a draft of the articles of incorporation for the not-for-profit that would be responsible for the operations of the centre, or a draft of the theatre operating agreement (it would give direction to the not-for-profit), which outlines the specific manner and details for how the theatre is to be operated, and more particularly, how it is to fund the operating costs of the Camrose Performing Arts Centre. He added that what was deemed essential by council on June 27 last year, when it endorsed the construction of the Camrose Performing Arts Centre on the property of the University of Alberta Augustana Campus (subject to contributions from Camrose County, the U of A and Province of Alberta, the launch of a fundraising campaign, the establishment of a governing board and finalization of an operating agreement, the City's involvement in the tendering process, and accessibility to the facility by the Camrose arts community), were no longer deemed essential when council passed a re-stated Memorandum of Understanding in January of this year.
"Thus we opened a blank cheque book."
Howard reminded council of the 2010 Schick report comments that the CPAC would most likely experience an operating loss in the range of $350,000 in the early years, and that in order to achieve a level of operating success in financial terms, community users like dance academies, music festivals and music groups would need to be charged a $500 set-up fee and a $700 rental fee per event night.
"This is in keeping with the agreement we are asked to commit to tonight which clearly instructs that user pricing with respect to CPAC shall reflect the intent that CPAC be reasonably accessible to all various groups, and, as such, operated on a cost recovery basis. Many have suggested that since this is a community theatre, it would be free to community groups. Even at the rates suggested in 2010 dollars, the CPAC is projected to experience an operating loss while the agreement calls for operating at cost recovery – a blank cheque we are asked to sign. I fear the cost of rental for even a one night event at $1,200 may limit community access, or if it is made available to the community at a reduced rate, will of necessity only increase the size of the blank cheque."
Howard said tax dollars in the amount of $12,750 are being committed to the project with no guarantees of the success of the fundraising campaign, and that the ability to collect any overspending of the $18 million total project cost is directly related to the level of success of the fundraising.
Howard said there is no bottom line for CPAC so the question of what the City can afford to do is not answered. He said council cannot afford to commit future taxpayers and future tax funded projects to uncertainty.
"I am not convinced we can afford to sign blank cheques. If these concerns could be addressed more fully, and bottom lines more clearly established, I would love to be persuaded."