Getting the Lifeplex bottom line

By Heather Killen

Spectator

NovaNewsNow.com

The County of Annapolis held the first of two special Committee of the Whole meetings concerning the financial viability of the Lifeplex Wellness Centre in Cornwallis, and while the numbers aren’t looking good, the current chair of Basin Wellness Society, that runs the centre, believes there is cause to be optimistic.

About 200 people came out to the November 3 meeting at the Annapolis Royal fire hall to hear the finance director’s report about the financial status of the Lifeplex Wellness Centre. No public questions, or comments were invited at this session.

The meeting was an information-only session for council and members of the public to understand the financial situation and outlook for the centre. A follow-up session will be held in Lawrencetown at the fire hall on November 19 to hear public comments concerning Lifeplex, and then council will make its decision at a final session to be announced.

Gerald Hackenschmidt, finance director for the county, started his report with an overview of the history of the building, noting that Lifeplex is not just home to a swimming pool and track. The $7 million building is actually a retail centre for nine businesses, as well as the health and recreational centre.

The Municipality of the County of Annapolis used a debenture to purchase the building three years ago at a price of about $2.8 million. After some equipment costs and upgrades, the county spent about $3 million overall.

The Basin Wellness Society, the non-profit group that operates the Lifeplex fitness centre, is leasing the space from the municipality with an agreement to pay back the debenture with interest within 10 years.

It was originally forecasted that, with the revenue generated by the retail space and the money brought in by the Basin Wellness Society, it would amount to a break-even operation with marginal losses.

At that time the yearly revenue from the commercial leases and the Basin Wellness Society was estimated at about $200,000, while the operating costs were set at about $300,000. The society has also received a number of substantial grants from the municipality that are not required to be repaid.

For the past three years while the society has kept its operational expenses fairly consistent, it has fallen short of its budgeted revenue by at least $100,000 each year. To date, the society is in arrears to the municipality for $225,432 in its utility bills; and is in default of its contracted repayment of the mortgage debenture, about $350,000 per year.

Hackenschmidt noted that in recent months, the society has begun making $5,000 payments towards its outstanding utility bills and has taken steps to lower its expenditures.

He added there is vacant retail space that if leased, would generate an additional $50,000 to $60,000 per year. The society has also submitted to an energy audit and once implemented, the utility bills will likely be further reduced.

Hackenschmidt also noted that revenue in recent months has been up by 1.8 per cent, while expenses have been lowered by nearly 12 per cent over the same time last year. Overall, he told the group that he wasn’t as concerned about the recreational facility’s operational budget, as he was about its revenue shortfalls.

Brian McConnell, chair of the Basin Wellness Society, prepared an operations report that was circulated to Warden Peter Newton and members of Annapolis County council in September. The report offered a review of the facility and its past staffing and financial challenges.

McConnell said that the financial information presented during the meeting is dated and doesn’t reflect the recent 3.5 per cent increase in revenue shown over the past few months. “Our year end is March 31, so the most recent financial data they have is from eight months ago, last March,” he said. “September 2009 was one of our best months ever, revenue was more than double.”

In his operations report, McConnell noted that finances and management problems have remained the two main problems the facility has faced throughout its history. In particular high heating costs have continually forced the facility continually in the red. “It’s not unusual for facilities like Lifeplex to be unable to generate sufficient revenues to cover their expenses,” he wrote. “Centennial Pool in Halifax... received an annual subsidy in 2008 of $140,000, and further financial assistance of $85,000 from HRM. Most recreation facilities in the Halifax area are owned by the municipality and operated by groups under management agreements similar to the situation of the Basin Wellness Society.”

According to McConnell, Centennial Pool has nearly closed three times and without ongoing financial support from HRM, it would not be able to remain open.

Lifeplex receives annual funding from three sources: the Annapolis West Health Foundation contributes $40,000; Digby and Area Health Services provides $25,000; and the Annapolis Basin Conference Centre gives $20,000.

The board of directors has recently developed a marketing plan that aims to generate new funding through corporate and private donations. Various other campaigns have been started to help offset costs and generate new revenue for the group. “So far we have raised nearly $21,000 in the past five months which does not include pledges for future donations,” he said. “Our three main fundraisers are: the Swing for Wellness Golf Tournament held June 19 at Annapolis Royal Golf Club; the Harvest Time Dinner and Auction held October 24 at Annapolis Royal Legion; and a Planned Giving Campaign launched in September, with a goal of $50,000 for June 1, 2010.”

This year was the largest golf tournament to date with 26 teams entered, up three from previous years, according to McConnell. It raised approximately $15,000, while the new Planned Giving Campaign has generated over $11,000 in donations and pledges to date.

In addition to these efforts, the Cornwallis Lifeplex Stingrays Swim Club recently held a Halloween Party for children at Lifeplex on October 31, of which the profits were partly donated to Lifeplex.

And the society is holding a Christmas Fair at Lifeplex Wellness Centre on December 13 from 12 to 4 p.m. This family event is planned with games for children, family swimming, a baked goods table, and a visit from Santa. All monies raised go to Lifeplex Wellness Centre.

The society is also trying to partner with other organizations to establish health research programs at the Lifeplex. While other initiatives are in the works to host a provincial tournament and expand programming even further at the facility. “The facility has not yet been operating three years and due to seven management changes in less than three years, it has taken longer than forecast to develop its revenue potential,” he wrote in his report.

McConnell added the management problems that plagued the facility are slowly being ironed out. A new management structure is in place that not only saves the facility money, but it ‘has been done with no apparent negative impact on staffing attitudes.’

To request a copy of the finance director’s report, or to register to comment at the upcoming November 17 public session in Lawrencetown, contact municipal clerk, Jacquie Farrow-Lawrence, at 532-3131; or clerk@annapoliscounty.ns.ca.