The forensic audit identified key areas that contributed to the financial difficulties at Westerner Park. Broadly, these findings are related to the financial and business decisions surrounding the expansion of the exhibition hall; inaccurate revenue projections for CFR; deficiencies in financial controls and processes; lack of qualified finance staff; and a failure to market the new exhibition hall appropriately.

In addition to these key areas, several other key factors were identified as impacting the financial success of the organization: changes to Board governance; multiple projects occurring concurrently; lack of clarity regarding Board communication; and use of Westerner Park’s Major Maintenance Fund.

The audit found no evidence of misappropriation for fraud.

The report identified that there was a lack of clarity around communication and information sharing among Board members and The City. Two Red Deer City Council members have sat on the Westerner Board in the past; however, are bound by confidentiality of in-camera Board meetings.

Another factor identified was Westerner Park’s lack of adherence to financial controls and processes which resulted in failure to provide timely financial reports to the Board. 

The City and Westerner Park will need to make more decisions related to Westerner Park’s financial and operational matters as well as the legal relationship between the two organizations. The results of this forensic audit help The City to better understand what led to the financial issues faced by Westerner Park. Further, the financial sustainability project will provide additional information and recommendations to help guide this decision making.

Since 1891, Westerner Park has been a place for Central Albertans to gather and celebrate community events. Westerner Park is a community minded non-profit organization and agriculture society that plays host to an estimated 1.5 million visitors annually. From weddings to banquets to hockey games and agriculture shows, Westerner Park is a community hub in Red Deer and central Alberta run by a Board of Directors.

Westerner Park is led by a Board of Directors who continues to provide overall direction to Westerner Park with support and oversight from The City of Red Deer as it relates to financial decisions and approval of Westerner Park’s annual budget.

A number of factors ultimately led to the financial instability at Westerner Park, including the decision to expand the facility, major event contract negotiations and the current economic reality, to name a few. The additional impacts of COVID-19 are placing greater financial pressures on Westerner Park with no ability to host events or generate revenue throughout the COVID-19 pandemic.

Based on Westerner Park’s current cash flow projection, operations can continue as they currently are until mid-August 2020 until there is no more money to operate. The expectation is that major events will begin again in November 2020, and, to maintain operations after mid-August, financial assistance is required. 

Earlier this year, on recommendation from administration, City Council approved a one-time operating grant of $1 million for Westerner Park. This was dealt with in camera, at that time, due to legal considerations. This grant was necessary to help maintain some stability at Westerner Park until The City could investigate and assess the financial situation, This grant was provided for short term operations of Westerner Park in their 2019/2020 budget cycle. The City applied terms and conditions for the use of this grant, including financial oversight for when Westerner Park utilized any of the funds.

In July 2020, City Council approved an additional $2 million operating grant. Westerner Park requested this grant, indicating they would not be able to operate beyond August without additional funding.

Westerner Park’s current minimum operating expenses average three hundred thousand per month. 

This is certainly one of the options, however, The City would also have to assume all of Westerner Parks debts and liabilities.

The City’s goal is to continue to support strong economic activity in the city and region. Westerner Park has an annual impact of $150 million on the economy and is an important part of the region’s economic recovery. While The City is also experiencing financial impacts from the economic climate and COVID-19, it is important to look long term for economic resilience.

The $3 million in grant funding approved by City Council does not have an impact on the tax rate as it is one-time funding. At this time, we do not know whether any future financial support, if required, will have tax impacts or not. The City and Westerner Park are still working to fully understand the financial situation. 

Last December, Westerner Park came to fully understand the complexity of the financial issues of the organization. However Westerner Park has been implementing cost adjusting measures since November 2019 and reached out to The City of Red Deer for assistance in December 2019. 

The City of Red Deer has assumed temporary financial oversight for Westerner Park to help navigate the current challenges. In addition, The City owns the land at Westerner Park, which it rents to Westerner Park under a 50 year lease.

Our shared goal is financial and operating stability with Westerner Park continuing to serve as our community hub for events that are pivotal to our community life and economic development in our city.

The City will continue to maintain oversight until it is certain of financial stability.

Through its financial oversight, City Administration has been working with Westerner Park administration in providing financial direction and operational support to stabilize operations and allow time for the consideration of longer term options.

Between December 2019 and July 2020, the following occurred:

• In December 2019, Westerner Park informed The City of its fiscal challenges and reached out to The City for assistance.
• In January 2020, City Council provided direction (in camera) to City Administration to manage and stabilize Westerner Park. This resulted in The City assuming temporary financial oversight of Westerner Park.
• In January 2020, The City held a joint media conference with Westerner Park to communicate the financial situation at Westerner Park and that The City was assuming financial oversight of Westerner Park.
• In February 2020, City Council approved one-time emergency operating grant of $1 million to support the continued short-term operation of Westerner Park. This was dealt with in camera, at that time, due to legal considerations. The City applied terms and conditions for the use of this grant, including financial oversight for when Westerner Park utilized any of the funds.
• In February 2020, The City temporarily removed Council representation from the Westerner Board; however, maintains representation through an Administrative liaison.
• In June 2020, a third party contracted by The City, commenced a forensic audit and financial sustainability project regarding Westerner Park’s financial situation.
• Since January, City Council has received numerous legal briefings on the situation at Westerner Park. The content of these remain confidential under FOIP.
• The City has held numerous meetings with stakeholders regarding the financial situation at Westerner Park. Examples include the Alberta Government Minister of Agriculture, the Alberta Government Minister of Culture and Tourism, Red Deer Rebels, Hockey Canada, Central Alberta Mayors, Westerner Park’s Past Presidents, Red Deer County and Red Deer and District Chamber of Commerce.

Westerner Park has applied for and has been approved for financial support through Federal Wage Subsidy and the Canada Work-Sharing programs.

Westerner Park had originally adjusted staffing in January related to their financial position and has had to further adjust staffing as a result of COVID-19. Currently, 16 employees, many with reduced hours, are working at Westerner Park.