Highlights from the Deloitte report

By Lethbridge Herald on November 27, 2024.

Deloitte Canada’s third party review of the Lethbridge & District Exhibition spans 31 pages and is now available as a Powerpoint presentation on the City of Lethbridge website.

The review was presented on Tuesday to city council acting in its capacity of Economic and Finance Standing Policy Committee.

The in-depth report takes a thorough look at the Exhibition and matters involving the planning and construction of the $70 million Agri-Food Hub and Trade Centre, planning for which started in 2013.

The report points out that the non-profit LDE has served Lethbridge and area for more than 127 years and is now in a dire financial position.

The LDE operates and maintains one of the largest usable event-hosting spaces outside of Calgary and Edmonton with the Hub designed to host events of all sizes and which is designed to be “a premiere destination in southern Alberta.” It is one of the largest agricultural societies in Alberta along with the Calgary Stampede and Westerner Exhibition Association.

Other facilities maintained by the LDE were built between 1912 and 1999 and are not in good condition, the Deloitte report notes with the LDE spending $500,000 annually to manage and maintain them, relying on staff supported by many third-party service providers.

Following are some takeaways from the report presented to the SPC which will again meet today at 9:30 a.m. to continue discussions on the LDE:

• Strategic planning activities undertaken were not robust enough to support the major investment in LDE.

• Capital project delivery and execution did not align with common practice for a project of this size.

• Effective governance structures were not in place to provide oversight throughout this development.

• LDE incurred expenses that were not allowable under policies or good value.

• Deloitte identified instances where the presentation of project plans and budgets to city council was not clear and consistent.

Deloitte’s current state assessment states in part that:

• Overall, there is a need to strengthen LDE practices to match the ambition that the new Agri-Food Hub represents.

It notes the LDE generates a lower external revenue per square foot when compared to peer organizations ($$11/sq. ft. compared to $44/sq. ft. for peer organizations).

• LDE relies increasingly on government grants and contributions compared to external revenue sources (cumulative annual growth of 39 per cent compared to -6 per cent).

Operating expenditures have grown approximately 10 per cent per annum over the last five years.

• Procurement and vendor management policies are not sufficiently detailed to help employees achieve value-for-money,

• Heavily reliant on third-party service providers due to the diverse expertise and skills needed to maintain such complex facilities.

• Lack of documentation such as facility maintenance records and logs for both new and existing structures.

• No capital reserve fund in place to plan for future capital requirements for either the Agri-Food Hub or the existing pavilions, which have significant deferred maintenance that the previous LDE administration acknowledged to council in June 2023.

• Prior to the change in governance and leadership, the sales and marketing function had not scaled up to be able to support the 110 per cent increase in available square footage.

• Prior to the change in governance and leadership, there was not a sufficiently detailed sales plan or other supporting infrastructure to support a proactive business development strategy.

• There is no formally defined strategy to provide clarity around the nature and size of events that LDE looks to attract and host.