By Troy Gillard

Cash crunch reaches critical point

Council to consider operating grant to keep Westerner Park afloat

Jul 6, 2020 | 11:28 AM

Westerner Park needs a cash injection to stay alive and is hoping The City of Red Deer will provide it.

On Wednesday, city council will consider Westerner Park’s request for an operating grant of between $1 and 3.5 million. City administration is recommending the approval of $2 million that would provide them with enough cash to get through the rest of this year and into 2021.

The City says that based on current projections, Westerner Park would need the grant funding in order to make it past mid-August.

The City says in a release that 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.”

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The City of Red Deer assumed temporary financial oversight of Westerner Park in January after the organization approached them for support in late 2019.

Westerner Park is a non-profit organization and agriculture society that generates over $150 million of regional economic activity each year. Factors that have led to its current financial instability include the decision to expand the facility, major event contract negotiations and the current economic reality. Westerner Park is further impacted by the restrictions of events, including sporting events, festivals and mass gatherings related to COVID-19.

Earlier this year, 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. The City says the grant was necessary to “help maintain some stability at Westerner Park until The City could investigate and assess the financial situation.” Terms and conditions of the grant included The City of Red Deer having financial oversight over how funds from the grant were used.

Westerner Park has cut operational costs since January, mostly through staff layoffs, temporary layoffs, and additional reductions in hours. The organization is also “renegotiating key contracts” and has “eliminated all nonessential expenses,” according to city officials.

If The City of Red Deer doesn’t provide financial assistance to Westerner Park and no other form of financial assistance is found, officials say 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.

The request for a $1 million operating grant assumes phase three of the Province of Alberta’s relaunch strategy will begin in at least November. The $3.5 million operating grant request assumes the effects of COVID-19 will last for another year.

“There is still more information needed in regards to the financial situation at Westerner Park. 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,” said Seabrooke. “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.”

(With file from The City of Red Deer)