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Update: Jan 28 and The Storm

Council met tonight. You can see the highlights here. Soon you will be able to watch the video of it here.

Because it has received a lot of public attention, I wanted to personally update you on one agenda item: the Grande Prairie Storm. As always, any mistakes or opinions posted here belong to me, not to Council or City staff.

Going into the meeting I knew that the Storm are important to Grande Prairie: they put over $1.5 million per season into our economy, they add to our community spirit, they do lots of volunteering, and they are net revenue generators for Revolution Place.

At the same time, I’ve been a strong supporter of tax decreases. I’ve discussed the need to spend and target our money better (see here). That left me struggling to decide on an appropriate level of support for the Storm.

Here is a detailed post I wrote going into the meeting about my take on the Storm. Now for the update:


LOAN

Council approved a $200,000 to the Storm. It will be paid back over a 5 year term at a 4.25% interest rate. It will allow the team to significantly improve their cash flow by paying off accounts payable and high interest credit card debt.

I went into the meeting not intending to support a loan at this time. However, I always go in with an open mind. After considerable debate I ended up voting “yes” to this loan. Here are some pieces of information that made me comfortable with it:

  • In addition to the money the City nets from having the Storm at Revolution place it will profit in interest from this loan

  • This money will come from the Financial Stabilization Reserve. That means that it will not effect any approved programs nor have an impact on the projected 2019 tax decrease of 4.1%

  • The Storm is a non-profit society. Nobody is able to take profits out of the team. The Canadian Revenue Agency takes this very seriously.

  • The Storm does have stakeholders (including the board members) who have put in approximately $350,000 of capital to keep the team going. Because it is a non-profit they cannot take money out of the team as profit. And because it is NOT a charity, they don’t get to write this money off as a tax deduction.

  • City management will need to authorize the disbursement of this loan amount. They are instructed to make sure that local vendors and credit cards are paid off before anyone else.

  • Built into the loan agreement will be a provision that the City’s loan needs to get paid back before any of the stakeholders who have given low or no interest loans are paid back.

  • The City will be providing strong oversight including reviewing monthly financials, undertaking end of season reviews, and appointing a voting board member

  • I voted yes because I am confident that the team will pay back the loan. However, if I am wrong and the team defaults, the City will get ownership of the franchise. Its value has been estimated to be $500,000 or more. Based on some research I have done, I’m confident that the franchise is worth more than the value of this loan (click here for once example of why I believe this).

I voted in favour of this loan because I am confident that it will help the team become sustainable, will get paid back, and will be a net profit for the City.


RENT REDUCTION

Council approved $0 rent for the 2018/19 season and a $20,000 rent for the 2019/20 season. The previously approved rent was $43,800.

I want the Storm to survive not just for the benefit they bring to our community but also for the profit they generate for Revolution Place. I knew that this survival became very likely with some direct help from the City. At the same time, I like that reduced rent is a gift-in-kind instead of a cheque. This is an especially appropriate gift-in-kind because it doesn’t require taking municipal resources away from other uses: most of the Storm’s ice time is for practices, which are weekdays during the day when ice is not in demand.

I went into the meeting thinking that some sort of rent relief was appropriate. However, I wasn’t comfortable with free rent.

I made a motion to amend that would set the rent at $10,000 for 2018/19 and $20,000 for 2019/20. This motion to amend failed. That left Council voting on whether to give the Storm free rent or full rent. I voted “yes” to the motion- while I would’ve liked to see us charge something, I wasn’t comfortable refusing the gift-in-kind of rent reduction completely.


OTHER RECOMMENDATIONS

In addition, I voted “yes” to the following successful motions:

  • Approve the Storm to operate a game day lounge

  • The 2018/18 business plan to be reviewed by the Revolution Place General Manager. Any of his concerns to be discusses and addressed by the team.

  • Monthly financial statements to be filed with the City

  • A member of City Council appointed the to Storm board as a voting member

  • An annual end of season review of Storm operations by City Council

It is worth noting that originally Council was asked to consider a $50,000 grant for renovations to the game day lounge. This request was not approved by Council.


That’s some of what happened tonight. We also had great discussions about Aquatera, land use planning, and recycling.

I lost some votes tonight but always understood the reasoning of those who disagreed with me. When I shared some of my thoughts I got some very strong (but polite) push back from others. And a couple of times that led to my colleagues changing my mind. Tonight reminded me that I greatly appreciate working with our Council.

As always, I welcome any thoughts, questions, or push back you might have. You can comment below. Or, you can contact me at dbressey@cityofgp.com or 780-402-4166. I'm happy to talk online or over the phone. I'm also always willing to setup a time to meet for coffee.

You might also be interested in joining the conversation on Facebook at the GP Round Table.

Finally, I want to let you know about my next COFFEE WITH DYLAN event. It will be on Tuesday, February 12th at 7:00pm in the Ernie Radbourne Pavilion. This is an informal time open to anyone to ask questions and share thoughts they have about our community. We’ll spend about 45 minutes talking about affordable, social, and supportive housing. After that I’ll stick around to talk about anything the group wants to discuss. I hope you can come.

Thanks for taking the time to read this!

-Dylan