"If we're going to play like big boys, we have to spend like big boys," Truro Mayor Bill Mills said following a budget presentation Tuesday evening by Rath Eastlink Community Centre (RECC) by financial manager and interim general manager Brad Lawrence to both the town and Colchester County councils.
"I think we're on the right track," Mills said, after hearing that while the current year's projected deficit for the RECC has been set at $955,510, more efforts are being made to generate greater streams of revenue, such as the recent sellout Harlem Globetrotters event, which generated a $21,000 profit.
"We've got to start talking positive about what we've got in our region," Mills said, regarding the community benefits and economic spinoffs the facility generates, but which too often fail to be recognized.
Not everyone in attendance, however, was as generous about the financial picture that has been developing at the centre, which this year posted a deficit of $972,918.
"Mr. Lawrence, we know that we have an investment here. These councils made the decision to put this facility up," said Colchester County Coun. Christine Blair.
"We recognize the potential that we have and I'm sure that every councillor sitting here applauds the idea of getting in more events as you plan. If they can be run efficiently and bring in money for the centre, then that's good. That's excellent.
"However, we're looking at a million dollar deficit this year. And I see it as a deficit. You see it as an investment. I see it as something that we're picking up, because as you stated perhaps in other words earlier, the decisions that were made were far less than stellar. If we can get this thing turned around that is what we must do," she said, in echoing the sentiment of a number of councillors.
And given that the facility's operating costs are ultimately paid by every taxpayer in Colchester County and Truro, Blair added, "we have to justify to our taxpayers why there are deficits of this nature at our facility."
Last year, the RECC's projected deficit was $721,845. The actual figure reported by Lawrence, however, was $972,918.
That follows on a first-year operating shortfall of $737,000.
If this year's projection holds true, the facility will have tabulated more than $2.6 million in deficits after three years of operation.
Lawrence told the councils that part of the reason for last year's increased deficit was because of the ice-plant issues that arose last fall but also because of budget calculation errors and other mistakes.
The budgeted sales (revenue) for last year, for example was $2,315,000 while the actual revenues came in at $1,732,000, a difference of $583,000.
"I don't want to see variances that are not attainable like they were last year," he said. And those variances were unattainable because of us having to take a $721,000 deficit."
Part of the problem in the variances was the computer software in place at the facility was new to the people who were using it, he said, which resulted in some things not being done properly.
"They thought it was right but it wasn't right," he said.
As well, Lawrence said the original budget set for the RECC "was way off the mark."
"And we struggled with that for two years now knowing that the budget was wrong and whoever did the business plan for this place did it incorrectly."
To counter that, the whole financial system has been examined in recent months to ensure that the figures they now are working with are correct.
"The focus on this is for the next general manager to have an absolutely perfect balance sheet, clean receivables and clean payables," he said.
But Lawrence also stressed that similar venues have similar operating deficits and only so many cost-cutting efforts can be made before the revenue stream also starts to spiral negatively.
Twitter: @tdnharry
