HRM Auditor's report: Box-office hijacking
IF ONLY you could call it a bad deal. But there was no deal at all. It was more like a silent coup d’état in which a provincial entity seized control of a city asset — apparently unbeknownst to HRM council or staff.
If you were shocked by last year’s “cash-for-concerts” scandal — where HRM’s mayor and chief administrator lost $359,000 of taxpayers’ money in unauthorized loans to a concert promoter — the sequel is even worse. HRM auditor general Larry Munroe has delved further into the swamp of murky dealings between HRM and Trade Centre Limited, the provincial Crown corporation which has the contract to manage the city-owned Metro Centre.
In a report delivered Wednesday, he revealed that TCL unilaterally took over the Metro Centre’s box office six years ago, during the implementation process for new ticketing software. TCL altered the business arrangements to its advantage, without so much as a paper trail, the auditor found. Then it stonewalled the city and eventually came up with the dubious excuse that the changes were necessary because the box office was underperforming.
The upshot was that Metro Centre had ceased to take in all box-office revenues and cover all costs, while paying TCL a management fee. Instead, it began getting a commission of 40 cents per ticket sold — excluding skyboxes and season tickets — which TCL insisted would be revenue-neutral. But graphs presented by Mr. Munroe on Wednesday suggest the city has since missed out on big bucks in profit-sharing.
How could this have happened? Let us count the ways. Mr. Munroe said TCL’s contract to manage the Metro Centre is too vague and needs to be revisited, while the roles and responsibilities of its overseers need to be clarified. He also cites “the lack of organizational knowledge within HRM of what an efficiently and effectively run Halifax Metro Centre business model should look like.”
Furthermore, he said Metro Centre operations themselves are ripe for an audit, plus an external review focusing on whether the arena is achieving the best possible return for HRM. As for other HRM facilities run by third parties, those arrangements deserve a second look to make sure they’re up to snuff.
This advice is particularly pertinent, given that we’re on the verge of building the mother of all publicly funded and operated structures. The governance body for the new convention centre has yet to be fleshed out. Mr. Munroe’s review is all the ammunition you need to make the case that a board of highly experienced business professionals who cannot be bamboozled is what’s required.
And yet
Submitted by Alan on July 19, 2012 - 7:09am.
we are committed to a multi-million dollar gamble based on projections prepared by these same fools (to use a charitable epithet). Try to point out that their projections are practically impossible, though, and you're dismissed as a naysayer. At least Mr. Munroe appears to be doing his job, although the timing of this release is pretty shabby. Not likely his fault. We'd be smart to double the number of auditors and cut the council in half. What a farce.
So who shall we trust to fill the new board with? Bankers?
"So who shall we trust to
Submitted by Common Sense on July 19, 2012 - 9:46am.
"So who shall we trust to fill the new board with? Bankers?"~Alan
A background check on former TCL board members will show one former Yarmouth Branch, Bank of Montreal employee.
Bankers need not apply - lol.
no civil servants
Submitted by honker on July 19, 2012 - 7:46am.
Please make sure that the current TLC management are not involved in any way in the new convention centre. However is heading the new centre needs to have competent management and that doesn't include provincial government civil servants as is now the case with TLC. Government "management" systems are without question the worst, most inefficient and costliest organizational function invented by mankind.
What Took So Long???
Submitted by Common Sense on July 19, 2012 - 7:54am.
Look at a few of the previous appointed board members of the TCL, and you can well understand how and why things were allowed to go so far off track.
AG Lapointe raised red flags 3 Feb. 2011 - he was on a roll, but wasn't given full access to TCL books.
This is just the tip of Percy's Economic and Rural Development iceberg - corruption and cronyism are alive and well in our N.S. bureaucracy - same old, same old.
Besides Peter Kelly
Submitted by CoyoteII on July 19, 2012 - 8:00am.
who were the other HRM councilors who were on TLC's Board of Directors and how much of a stipend did they receive for ignoring their responsibilities and asking No Questions? Please name the complete board.
TCL's current management has lost all public confidence and can't be involved with our new white elephant convention centre! Additionally, it would appear that some HRM staff should be fired over this.
Nowhere
Submitted by Selina on July 19, 2012 - 8:36am.
in the articles I have read about this debacle have the names of the councilors who sat on the board been mentioned. Is this a secret too?
Perhaps with the forthcoming elections, voters should know exactly how their representative performed (or shirked) their duties.
On the bright side, should changes be made where councilors will actually have to perform their oversight duties, cats and chickens will breathe easier.
Also, will the consecration of Saint Fred be delayed?
How much clout does HRM's auditor general wield?
Submitted by hav2b on July 19, 2012 - 9:17am.
It seems Larry Munroe is unwilling, or unable, to administer his authority as well as Jacques Lapointe manages his.
I mean, if he can go for the kill...
council members
Submitted by bojohn on July 19, 2012 - 9:42am.
on the board are listed on the TLC's website. doubt many will be suprised
City politics are confusing
Submitted by Here on July 19, 2012 - 10:05am.
When something goes wrong the politicians declare that the CAO runs the city. No one makes decisions but things happen and millions of tax dollars are spent. When things go right (don't press me for an example, possibly urban gardens producing tomatoes at about $125.97 each) the politicians are front and center. Right now the city is looking at TCL and the 40 cents per ticket unwritten deal with the city.
The Auditor tells us there is no paper trail to the ticketing decision. I guess no one remembers either. Fortunately we have records of chicken and cat bylaw discussions for our money.
In any case TCL is a provincial entity with the Mayor, Sloane, and Blumenthal on the board. It has run the Metro Center since 1982. The only issue is that it does not own the Metro Center, the city does.
So you end up with a management team that has no other interest in the infrastructure other than enhancement of the facilities.
I would say from that and the auditor's report that the city was remiss, either staff and politicians (three of whom sit on TCL's board), or both.
Bodes well for the future of HRM.
Only one thing to do here...
Submitted by henry gondorf on July 19, 2012 - 9:58am.
There is only one thing to do here...bring in a forensic accounting team and find the culprits....I mean this thing just smells to the high heaven....the air has to be cleaned...
Board of Directors
Submitted by FredinNS on July 19, 2012 - 10:14am.
To answer the questions posed:
"his worship" PK (should maybe change it to "our embarrassment"?, Jerry Blumenthal (likely not there in 2006), Dawn Sloane and Bill Karsten.
http://www.tradecentrelimited.com/en/home/abouttcl/boardofdirectors/defa...
This whole thing just reeks of old-boys club. Nice to see it is alive and well, why else would it take so long to send an email to the TCL CEO? And then to do nothing else....
Reality Bites...
Submitted by Common Sense on July 19, 2012 - 12:31pm.
http://www.thecoast.ca/RealityBites/archives/2011/03/19/did-tcl-act-prop...
Drop down to the comments section of the above link for a few bios of board members.
I find it amazing many were well aware of the shenanigans, including AG Lapointe - go figure.
Thank you for the link
Submitted by Alan on July 19, 2012 - 5:30pm.
On paper, it looks like there is plenty of business experience among the directors. The editorial's parting shot about experienced business people being the fix for the BoD for the new convention centre doesn't hold too much water.
The new Board (and perhaps all Board positions across the province) should be filled by lottery, the same way jury duty is assigned. Jury duty is often a weightier responsibility, after all. It pains me to say (in all seriousness) that we would have better results than we are getting now, but everything points to that. Ordinary citizens would respect the weight of their responsibility.
Council and staff clueless: is this actually news?
Submitted by shawnino on July 19, 2012 - 10:05am.
This crowd could stand outside in Huricane Juan and not realize they were getting wet, as long as there's a cat bylaw or a chicken regulation to discuss.
And yet we havn't heard "I am not a crook"
Submitted by marthasguy on July 19, 2012 - 11:49am.
Surely it cannot come as a surprise to any conscious person that HRM and the Trade Centre will inevitably make a balls-up of anything they do "in concert." One set of clowns is not going to be well supported by a second set of clowns. The big-shots who have run the Trade Centre, and most of the Council members of the past decade are living proof that all one has to be is an HRM Booster to be a crook and get away with it.
Help Wanted: Business Professionals
Submitted by daveburris on July 19, 2012 - 1:06pm.
And as the editor notes "The governance body for the new convention centre has yet to be fleshed out" And just look at the body who is deciding that we need it, these people are not exactly covering themselves with glory.
Maybe the editor's advice about the running of a new CC, "a board of highly experienced business professionals who cannot be bamboozled is what’s required" I submit that those should be people deciding if we actually need the CC. With a glut of new CC space and decining attendance, how is there any reasonable case for another one?