The operating agreement between the city and the society that runs the Parksville Community and Conference Centre should be re-written right away, Mayor Marc Lefebvre said last week.
The mayor was responding to the contents of a report prepared by KPMG that cost taxpayers $36,000 and was released last week. The report looked at the management and operations of the centre, which gobbles up more than $250,000 a year in taxpayers money.
"We are going to have to re-write the operating agreement, which we will do," said Lefebvre, "and it has to be done in the next month-and-a-half or so. It should have been re-written many, many years ago."
The KPMG report, which can be viewed in its entirety at www.parksville.ca, was wide-ranging, looking at finances, management, operations and governance. It also compared the PCCC to other similar-sized facilities in the province, a comparison that showed the PCCC percentage of revenue from taxpayers (66.6 per cent) was not far out of line with centres in places like Qualicum Beach and Cowichan (both at 64 per cent).
The report’s key findings and conclusions suggested the society has “efficiently managed its staff resources.” It also stated that “rental rates have not kept pace with labour costs, resulting in an erosion of labour efficiency since 2009” and “this erosion was more profound after the PCCC’s staff were unionized in 2011.”
Hourly rates for PCCC staff jumped on average 64 per cent after unionization in 2011. For example, a janitor making $11/hour before unionization jumped to $18/hour in 2011 and a clerk making $13/hour went to $22.97/hour.
Lefebvre said the focus for the facility, including a policy that gives priority to booking requests, with reduced rates, from the city and non-profit community groups, should continue.
“It’s going to be a community centre, that’s the focus,” said the mayor. “But that doesn’t mean you can’t go aggressively after other business.”
The KPMG report also addressed the facility’s governance and planning.
“It is our conclusion that the PCCS board has not effectively addressed its responsibility to set a clear strategic direction for the society,” read the report. “With respect to the society’s vision, we found little evidence to indicate that the society has defined action plans to achieve the vision or developed performance metrics that would indicate whether the vision has been realized.”
In a news release issued by the city last week, Irene Holland, chair of the PCCS board said: “I see this as a positive process. We have an opportunity to work together and also have the resources and expertise to create a fresh start for the PCCC.”
Lefebvre said he agrees with the findings and recommendations of the report.
“I pretty much support them all,” he said. “They have to be translated into reasonable operational requirements.”
Lefebvre could not say why city council — which does not directly manage the facility — would have discussed the report behind closed doors, both internally and with the society board, months before it was released to the public.
Some of the report’s key financial findings and conclusions included:
• During the 12-year period ended Dec. 31, 2015, the PCCS received $2.15 million in grants from the city (55.4 per cent of gross revenue) and $1.73 million in revenue from operations (44.6 per cent of gross revenue);
• In the last six years of operation (2010-2015), the city’s contribution has steadily grown, both in absolute amount and as a percentage of the PCCC’s gross revenues. In 2010, the city’s contribution stood at 52 per cent of gross revenues and this increased to 66.5 per cent by 2015. A portion of this increase is attributed to the city allowing the PCCS to accumulate a $60,000 operating reserve for working capital purposes and an $18,004 capital reserve for future equipment replacement;
• A breakdown of facility rentals for the years 2007-2015 showed that 72 per cent of usage and 65.5 per cent of revenues were generated from usage by the city and non-profit organizations, while 28 per cent of usage and 34.5 per cent of revenues were generated from private individuals and commercial users of the facility.
• The PCCS has given priority to ensuring rental rates are affordable for non-profit users over optimizing revenues. Rental rates have not been regularly adjusted to reflect increasing operating costs;
• The PCCS board has not maintained a fund development capacity and donation revenue is negligible;
• PCCC operating costs have nearly doubled over the 12-year period, with the primary source of the growth being administration expenses, of which over 90 per cent relate to employee wages and benefits;
• Facility rental revenues do not cover the cost of PCCC staff. The city’s operating subsidy covers all non-labour costs for the PCCC (including capital costs) and a portion of the labour costs.