Worst-case scenario presented to rec board

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By Jim Mosher
Sunday October 31, 2004

Interlake Spectator — WINNIPEG BEACH -- Faced with a looming financial crunch, the volunteer board of the Winnipeg Beach Municipal Recreation Centre received no assurances from town council representatives last week that the town will pull it back from the brink.
Mayor Don Pepe and Coun. Sonya Dodd were on-hand to hear a financial overview presented to the rec board Monday evening by representatives from North-East Interlake Community (NEICOM) Developments. But neither was prepared to commit the town to providing more money to the board.
The board’s financial position is bleak. Its line of credit at the Gimli Credit Union sits at more than $90,000. As the busy winter season gets under way, it will have to dig deeper into that town-unwritten line of credit to operate the Hamilton Ave. recreation facility.
NEICOM’s Chris Sanderson and Tammy Hudyma set out the financial picture of the cash-strapped rec centre.
“This is a worst-case scenario,” Hudyma warned in her opening remarks.
Sanderson said the rec centre will need a cash infusion from the town of $16,000, at minimum, to get it through the first months of the 2004-05 operating season.
As well, Sanderson and Hudyma presented a financial plan that would involve the infusion of an additional $50,000 in each of the first three years of a five-year plan. The plan also suggested that $31,000 would be needed in Year 4, while Year 5 could well be the year the board could retire its about $100,000 debt.
By the end of the fifth year, the rec centre would be able to finance its own operations without using its line of credit.
But Mayor Pepe said the plan should look beyond the town for additional sources of revenue.
“You base a lot on ‘the town’,” said Pepe. “What is the association [rec board] doing to raise that money? The town is already putting quite a bit out. On top of what we’re giving you, we still have to put out another $16,000? What about some other avenue so that we can increase the revenues?”

Pepe concluded later that: “The bottom line is that the town has got to come out and make this work.”
The mayor noted that, if the town did come up with an additional $16,000, the rec centre would still need another $34,000, according to the plan’s called-for $50,000 in new annual revenues in each of the first three years of the five-year plan.
Sanderson and Hudyma defended their approach.
“The relationship with the town is something that needs to be determined between the rec centre and the town,” Sanderson said.
Hudyma noted that other revenue sources are part of another planning exercise.
“We’re writing a business plan,” she said of the NEICOM financial overview and recommendations presented to the board. “We are not writing an alternative use plan.”
Sanderson also noted that it’s late in the day for revenue planning for the current season. “That generally has to be done the season before,” he said. “We’re into the heat of it [the season] right now.”
“I have it being five years we’re debt free. That’s fairly ambitious,” he said. “The good news is that if you don’t have a line of credit, you’re pretty much sitting at feasible. It’s just the outstanding loan that’s the problem. By Year 5, this facility is financially viable on its own.”
Rec board chairman Larry Moore agreed.
“Based on our observations, there needs to be an additional $40,000 [a year] in revenue,” Moore said. “Even with that, we could pay off the debt. Looking at the numbers, I think it’s reasonable.”
But Mayor Pepe suggested fast-tracking paying out the line of credit could well shortchange rec operations.
“I personally feel that, as much as the loan should be paid as soon as possible, that should be a longer term goal,” the mayor said. “Why should you pay the loan in three years? That doesn’t leave any cash flow for the operation.
The NEICOM plan did not detail how the rec board would come up with the additional $50,000 a year, nor does the NEICOM plan include major repairs or capital expenditures. It concluded, only, that the four-year cash infusion was about what would be needed to retire the centre’s debt in the relatively short term of five years.
Tony Pimentel reiterated his belief that the rec centre must become a year-round facility, geared to adults and children. Pimentel, a Manitoba Hydro energy consultant, is one of two new members, with Manitoba Hydro human resource specialist Amanda Mosher, of the six-member rec board, which also includes veterans Arnold Eyford, Beach postmaster; school teacher Larry Moore; Lynne Pawluk, the town’s administrative assistant; and Michelle Thompson
“There’s a very limited of amount of programs geared to physical activity for kids and adults in the Interlake area,” said Pimentel.
He said trends indicate that fewer young people are getting involved in team sports. He said, while a business plan is needed, a more fulsome ‘strategy’ is needed.
“We have to come up with a strategy to bring in extra revenues,” he said.
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