Dexter: City was in loop on box office agreement
Premier Darrell Dexter doesn’t have much sympathy for city officials pleading ignorance in the Metro Centre box office controversy, but the province is willing to discuss ticket revenue sharing.
Dexter called the transfer of the box office at the city-owned Metro Centre to Trade Centre Ltd, the provincial Crown corporation that manages the facility, a commercial transaction.
Halifax Mayor Peter Kelly and three regional councillors sit on the Trade Centre board, including when the transfer was completed in 2006.
“As a result of any kind of commercial transaction, the various parties bear their own responsibility for the agreements they enter into, one way or another,” Dexter said after a cabinet meeting Thursday.
But a report on the transfer this week from Halifax auditor general Larry Munroe said there wasn’t any formal written agreement on the transfer. He also couldn’t pin down just how much information Trade Centre officials gave their city counterparts.
When asked about the lack of an agreement, Dexter pointed to the city’s representation on Trade Centre’s board.
“That’s their problem, though. They allowed that position to develop,” he said.
“So if they allowed, through their board, for that operation to move over to TCL, then that was the responsibility of the board.”
Munroe said the transfer happened as Trade Centre was expanding the ticket business regionally, selling tickets to events other than those at the Metro Centre arena. Ticket Atlantic became operational in 2006.
The handling of ticket revenue also changed then.
The Metro Centre got a commission of 40 cents per ticket sold to a Metro Centre event, excluding season tickets, complimentary tickets and group ticket sales. Prior to that, the Metro Centre handled all box office costs and received all revenues, and paid a management fee to Trade Centre.
After the change, Trade Centre’s take was $1.7 million from 2006-07 to 2011-12, while the city received $597,000.
The city wants to revisit the arrangement, and the province is OK with that, said Economic Development Minister Percy Paris, who is responsible for Trade Centre.
Dexter said he doesn’t think it would be common for ownership of an asset, in this case the box office, to move without a formal agreement.
“This is not the first time, of course, we’ve had to clean up messes that we have found from the past,” he said.
Paris said he had questions about Trade Centre’s operations after he became the minister in 2009, and he asked the province’s internal auditors to do a review.
That review, dated June 2010, identified weakness in the operating agreement between the city and Trade Centre that goes back to 1981. It said the agreement was outdated and, “in particular, the agreement does not address the distribution of commissions received from Ticket Atlantic.”
Munroe said Wednesday that there was hardly anything in the agreement, which was just a few sentences long. Trade Centre CEO Scott Ferguson called it “light.”
The province’s audit said the agreement should be updated, with details on Ticket Atlantic, ticket revenue and reporting to the city.
The province says Trade Centre started working on that recommendation just after the audit was released. There’s a new draft agreement with the city, but it’s not yet final.
Halifax chief administrative officer Richard Butts said he agrees with Munroe's recommendations, including reviews of Metro Centre operations and ticketing. He said the city will bring in outside experts, if needed, and compare arrangements in other jurisdictions in the country.
The province’s audit made 11 other recommendations that are now complete, Paris said. They included an agreement with the Finance Department on payroll processing, a risk management program and a review of criteria for selecting board members.
Paris said he will discuss the transfer with Ferguson but didn’t expect that a formal review would be necessary.
Both Paris and Dexter said they have had no problems with Ferguson since they came to power in 2009.
“I see no reason for me to discipline the CEO in any way, shape or form,” Paris said.
Munroe’s report said former Trade Centre CEO Fred MacGillivray told Munroe’s office that he gave responsibility for the possible box office transfer to Ferguson, then the vice-president of operations, and it was Ferguson who was responsible for managing Metro Centre operations.
The report also said MacGillivray was slow to respond to the municipality’s request for information on the transfer.
MacGillivray could not be reached for comment. Ferguson has said Trade Centre has always tried to act in the city’s best interest in managing the Metro Centre.
He said the board was updated regularly on the change in the ticketing business.