Hanging funding decision from Smiths Falls council threatens pool

Community Pool
Posted on: August 23, 2016

By Howaida Sorour-Roberts

Smiths Falls council is reluctant to enter into a new Memorandum of Understanding (MoU) with The Smiths Falls and District Aquatic Recreation Centre (ARC) after receiving a report from staff.

According to Malcolm Morris, Smiths Falls CAO, council can enter into a new MoU with ARC, but the financial obligation the town had with the Hub became “null and void” when the Hub was declared insolvent.

However some members of council expressed concerns over the new organization’s ability to run the pool. “I wouldn’t support any business that didn’t have a five year financial plan,” said John Maloney, Smiths Falls councillor at the June 25 meeting. “I need to see how much it costs to run the pool, so you’re not coming back in a year with another $40,000 debt.”

On July 18, ARC board members had appeared before council and presented each member of council with a new business plan, including a financial statement detailing ARC’s revenue sources and the projected expenses the pool will face in 2016. According to that financial statement, the total revenues including municipal donations and fundraising come to $270,000 and total expenses come to $262,000 leaving a projected surplus of $8,000.

Since then approximately $30,000 in expenses have been struck from the ARC books, following Councillor Joe Gallipeau’s announcement on July 25 that the Gallipeau Centre and Gallipeau family would not be charging the community pool any rent, to the delight of the crowd of supporters who attended the meeting.

Several councillors questioned why the ARC board members had not consulted the town before declaring the Hub insolvent and creating the new entity, ARC.

“We did consult with Art Manhire [Smiths Falls director of community services] and Mayor Shawn Pankow, on May 3 to inform them that our lawyer had advised us to meet with our debtors and negotiate debt forgiveness, but if that failed our lawyer advised us that we would have to declare insolvency,” said Kathy Gilligan, chair of ARC.

According to Gilligan, Manhire and Pankow, requested that the board keep them informed of any further developments. “I had treated the May 3 meeting as a confidential discussion with Kathy and Carol. They did not request we share that with council,” said Pankow.

The decision to dissolve the Hub was not an easy one, but it was extremely necessary according to Gilligan and Carol Coté, vice-chair of ARC.

“The reason we decided to go this route was because we were concerned that we would be misleading and possibly defrauding our members if we kept letting them believe that the Hub could continue to operate with that huge debt hanging over it,” said Coté.

That was in January and they’ve been working diligently ever since through the whole process of proposals, negotiations and legal counsel, town meetings and actions.

“I don’t understand why you never asked for our input or involvement until now,” said Maloney at the July 25 COW meeting.

As it turns out, two days after ARC was created the board requested a meeting with area municipalities, including Smiths Falls. “We requested your involvement, but you did not attend the meeting we had with Merrickville-Wolford, Montague and Rideau Lakes,” said Coté.

Even council members that are in support of providing funding to the pool are still concerned over possible exposure to the Hub debts.

“We need to protect the town interests and the interest of our taxpayers and I have concerns over the town’s exposure legally,” said Chris Cummings, Smiths Falls councillor.

This week, town staff will be seeking further legal clarification according to Morris. “What council had requested is additional legal advice pertaining to the legal and financial relationship between the Hub and Arc,” said Morris.

That’s the only piece of the puzzle that’s missing according to Morris. “ARC did provide council with some historical information and some forward projections which exceed what we are looking for from community donations applicants,” said Morris.

While there are some councillors clearly reluctant to support ARC, there are also several in favour.

“Considering council had agreed to provide up to $44,000 in support, matching other municipal contributions, to The Hub, I was pretty confident it would extend the same arrangement to any new organization operating the pool. Especially if it could be considered more financially-sustainable than the old organization,” said Pankow, echoing Loraine Allen and Joe Gallipeau’s positions.

It is hoped that council will make a final decision at the next Special Committee of the Whole on Tuesday, Aug. 2. “If the town does not support ARC and if there are any further delays we will be forced to shut the business down,” said Gilligan.