(rdnewsNOW file photo)

By Alessia Proietti

Second and third reading

River Bend Society’s $1.5 million loan forgiven by City of Red Deer

May 1, 2023 | 11:13 PM

Red Deer city council has forgiven a $1.5 million loan made to the River Bend Golf and Recreation Society (RBGRS) that been left unpaid for almost 20 years.

At their regular meeting on Monday, council approved second and third reading to repeal the River Bend Loan Bylaw.

READ: Red Deer city council considers forgiving “unusual” $1.5 million loan to River Bend Society

The River Bend Recreation Site is city-owned and operated by the RBGRS, a third party not-for-profit. In 2007, council approved a loan bylaw to the RBGRS to upgrade the city-owned clubhouse. The original loan amount was $1.7 million, and with one payment made, the balance has remained at $1,544,519 for the past 16 years.

“From a financial perspective, this loan arrangement was out of step with our typical practice, as we don’t ask our operators to pay for capital upgrades to city-owned infrastructure,” said Ray MacIntosh, the City’s Chief Financial Officer. “This loan was essentially given by the City, for the City, and does not appear on our books as an outstanding loan.”

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Councillor Vesna Higham gave the examples of Heritage Ranch and the YMCA, also city-owned assets, where the operators did not pay for previous capital improvements.

Councillor Victor Doerksen disagreed with the argument that the loan is not actually a loan.

“The point is, somebody paid for the development and when we forgive a loan, basically, we’re saying to the rest of city taxpayers, ‘you’re paying for that capital improvement’,” he said.

He compared their green fees to other golf courses, noting similarities and the high influx of customers at River Bend.

“It’s a competitor; they have to operate with the same tax base. The majority of citizens cannot afford a $2,300 unrestricted membership at River Bend so the benefit is not the same as Heritage Ranch. It is not the same as the rest of River Bend. It does not permit the same kind of traffic,” he said, adding that River Bend could have created additional charges to increase revenue. “It should have been able to pay its way.”

Councillor Bruce Buruma echoed a similar sentiment.

“Golf is an industry and there are many in the golf industry that are privately operated and they’re able to do it,” he said, adding that River Bend has the opportunity, unlike the examples of Heritage Ranch, to make money. “We are competing against other golf courses who are able to make this work.”

Councillor Higham responded that the Operating Agreement is holding River Bend back from raising their prices, as they must remain affordable, and the course, which was built in the 80s, is larger than some competitors, requiring more funding to maintain.

Rob MacPherson, General Manager at River Bend, said the Board of Directors is happy with the decision.

“It’s going to help us going into the future and be financially sustainable and be able to reinvest profits back into the facility,” he said.

He says the next step is to start golf course redevelopments in 2024 as outlined in the River Bend Master Plan.

The City and the RBGRS are currently in negotiations to renew the operating agreement that has been in place since 2017. The River Bend Master Plan was adopted last year and administration says it will continue to serve as a guiding document for The City and the Society.