Accumulated festival deficit could be written off

Deputy treasurer Al Lang (L), Heritage Festival manager Darlene Cormier and Community Services managing director Gerry Knox listen to comments from North Bay city council at Monday night's committee meeting of council. Photo by Phil Novak, BayToday.ca.

The North Bay Heritage Festival's accumulated deficit could be absorbed by the city if council approves a recommendation passed by the Community Services Committee.

Deputy treasurer Al Lang delivered a report at Monday night’s committee meeting of council in which he recommended the two-year shortfall of $235,222 be funded from the Completed Capital Works Reserve Fund, which has $880,000 in it.

All spent
Lang said the city’s auditor doesn’t consider this year’s deficit of $135,222 a “significant amount” compared to overall municipal assets.

“However it would be appropriate to consider the older festival receivable of $100,000 as uncollectible,” Lang stated in his report.

Lang said in his report that as of Dec. 31, 1998, the city had a Heritage Festival Reserve Fund of about $95,000, which was used to fund subsequent deficits until it was all spent.

But by the end of 2002, the festival had accumulated a deficit of about $165,000. Festivals in 2003 and 2004 accumulated deficits of $322,537.

Pretty good investment
Councils during those years wrote off the deficits.

If last night’s recommendation is passed at the regular council meeting next week, it will mean council has written off more than $700,000 in festival debt over the last three years.

But deputy mayor Peter Chirico tried to put the matter in perspective by comparing the costs of those deficits since 1999 with the approximately 22,000 taxed households in North Bay.

“We’re talking about five to six dollars per taxed household, per year over that six-year period, so I think it’s a pretty good investment,” Chirico said.

“Without that festival this city loses a lot and I think we would lose a lot more than we would gain by saying that’s it.”

Publicly humiliated
Coun. Maureen Boldt raised concerns that no matter what was done, festival deficits just kept rolling in.

“To quote other councilors, we’ve increased our scrutiny, our programming was significantly reduced, we put in checks and balances, we had a SWOT team, we had some knights in shining armour show up here and we publicly humiliated the previous chair,” Boldt said.

“But it didn’t work. We still lost more money this year than last year, so I’m concerned about it because I do love the festival and I know it’s very important to our community.”

Better served
Coun. Mike Anthony said the community and festival organizers and volunteers would be better served if council looked at the festival in a different way.

“I think we night be better served as a council to decide to support it as an investment and not expect it to necessarily break even. It hasn’t happened, I don’t think it’s going to happen next year, but I’m going to support the festival,” Anthony said.

“And that’s where the criticism comes from, from people thinking, ‘oh no it lost money again.’ It didn’t lose, we invested in it a scant few dollars and we got a great jewel for our community.”

Strongly suggesting
Gerry Knox, the managing director of Community Services, didn’t agree with that assessment, though.

“To say council is going to support it by identifying a deficit number that concerns me, because I don’t know what that would be, how we would calculate that as an investment,” Knox said.

“I would be strongly suggesting we strive for the festival to make money and at the bare minimum break-even.”

Knox said the 2005 deficit resulted from a drop in sponsorship levels and lower priced wristbands.

In the works
The committee also received a copy of the 2006 festival budget, which comes in at $990,000, $89,000 less than last year.

As well the committee heard from festival co-chairman Scott Clark, who said discussions are in the works right now to bring the Country Singing Open back into the big summer event.