REGINA - The former board chair of Regina Exhibition Association Limited has delivered a blistering statement in response to the recent move by city council to remove the REAL board of directors.
Ex-board chair Wayne Morsky delivered a three page letter circulated to media and reported to the public Thursday, in his first public response since that decision.
It was penned in response to city council’s contentious 6-5 vote to remove all of the REAL voting members on Nov. 22, following which Morsky and all other REAL voting directors tendered their resignations to the City. That had followed a bombshell report from MNP at that same meeting outlining the extensive financial woes facing the REAL organization.
The comments in the statement from Morsky did not leave City Hall unscathed. Morsky took a swipe at City Manager Niki Anderson for attending just one meeting of the REAL board, and he also took a swipe at an unnamed council member or members for asking for free tickets from the board for events.
Here are some highlights of the letter from Morsky as he responded to the claims of “lack of transparency” from council:
On the Experience Regina fiasco, Morsky states: “From the beginning we have accepted full responsibility for the Experience Regina incident – both publicly and to Council. We recognize that it was a mistake and not aligned with the expectations of the public or our owner. It should be noted that the former REAL board and management, presented to Council five times following the incident. It was members of City Council who requested that Mr. Cuff complete the review, and Council was also provided the opportunity to review the terms of reference and scope of the report.”
On the financial situation of REAL: “REAL is unique in that we have historically relied on major events and concerts to offset the costs associated with operating city facilities. Whereas similar facilities in other jurisdictions are fully funded by their respective municipalities. As a board of directors, we have long been informing Council of the challenges facing REAL’s operating situation. The financial success of REAL is directly linked to major events and concerts. As a board, this was one of the largest risks we dealt with. It was also the primary reason we, as a board, supported commercial development on the property as a path to diversify, offset risk and increase revenue stream.
“Since COVID, it has been difficult to attract major events to Regina. This has compounded REAL’s recovery challenges and ability to return to a profitable situation. However, this should not be a surprise to Council, as noted by Councillor Mancinelli. Since 2018, REAL has shared (either through formal attendance or communication) our financial situation and concerns with council more than 40 times, with the first formal letter signalling potential operating risk being submitted in March 2020, and a request to change debt limits following shortly after in April 2020. All requests and decisions to take on debt or change debt limits were approved by Council. “
On deferred maintenance: “In October 2019, REAL first presented to Council a deferred maintenance report prepared by Stantec. The report identified an expected $44.5 million required investment into maintenance in the next 20 years, with the Brandt Centre requiring $3.3 million in the next five years…
REAL has historically received a $400,000 operating grant a year from the City of Regina, but no funding into capital upgrades or investment into the municipal facilities (the City of Regina owns the buildings). In comparison, the Conexus Arts Centre receives upwards of $1 million a year in public funding, while Moose Jaw’s Event Centre (formerly Mosaic Place) received a seven per cent increase to their subsidy in 2023 for a total of $985,000.
On the debt situation: “2018 marked a significant year for REAL, with the opening of Mosaic Stadium and the International Trade Centre. ... It is also without question that the financial model for the stadium when proposed was aggressive and overly positive. The stadium has never operated to the level originally set out by then City Council and administration, meaning it has never generated the anticipated revenue necessary to operate it in a sustainable way.
“… Since 2017, REAL has taken on significant debt to service the capital needs of city-owned facilities, and to later operate. Since the onset of the pandemic, REAL has struggled to pay the debt associated with facilities and was forced to begin servicing debt with debt. City Council was fully aware (if not understanding) of this circumstance, as they approved the debt restructuring and increases to debt limits. “
On communication with Council and Administration: “As a board of directors, we took our relationship with our owner, The City of Regina, seriously and were deliberate in our communication with them – whether that be through inviting them to events, hosting meetings or through formal communication and presentations. Attendance and engagement by Councillors varied, but the invites were always extended.
“…. It is worth noting that during her time as an ex-officio member of the board, the City Manager attended one (1) meeting since joining the board in December of 2022. If her workload did not permit her to attend board meetings where financial challenges were discussed in great amount of detail, we are concerned about her ability to take overall responsibility for the organization.”
“… Over the past several years, REAL has been requested repeatedly to take on additional debt and responsibilities for the sake of the city. Each request has required a decision point and judgement by the board of directors, which often influenced the next decision point and judgment. In hindsight, we should have said no to several of the requests, but all were made with the belief that we were acting at the request of the City, to the benefit of the City. As an example, REAL was asked to take on the Catalyst report because the capacity and capability did not exist within City Administration, and there was no appetite to hire a consultant.
“We have appeared before council every time requested, allowing ourselves at times to be berated and treated in what can only be described as disrespectfully at the hands of certain councillors. All throughout, we maintained professionalism and a commitment to do better, even with council members interfering in lease negotiations with tenants and a continual ask for free tickets to events for themselves, friends, and family, and in one case a request for employment.”
