Big decline in investments led to GMDC closure, meeting hears

  • Aug. 12, 2008 5:00 p.m.

By Alex Rinfret–The Greater Massett Development Corp. experienced a dramatic decline in investment income in 2007, a decline which led to a much larger than normal loss for the year and eventually to last month’s decision to close down the rec centre, according to financial statements presented at the organization’s annual general meeting Sunday (Aug. 10). The GMDC’s two trust funds, which were worth $4.7-million at the end of 2007, generated only $42,000 worth of investment income over the year. During the previous year, the corporation made $453,000 in investment income – more than 10 times as much. Although GMDC trimmed spending in most areas, it still ended up with a $623,000 deficit for the year, compared to a loss of $231,000 in 2006. That, directors told the public, coupled with a sharp rise in the cost of heating fuel which has continued in 2008, led to the decision to close the rec centre. “We’re bleeding all over the place,” director John Disney said. “That swimming pool is ancient technology. It will soon cost $1,000 a day to heat.” The recreation centre, which contains a swimming pool, sauna, gym, weight room and small bowling alley, cost $367,000 more to run last year than it raised from fees, rentals, and investment income. Unlike most public recreation centres, it receives no support from any level of government, except for a grant in aid from the village of Masset to cover the municipal portion of its property taxes. Directors told the 81 people who packed the community hall to hear why their rec centre is closing that only by shutting down right now will they have any hope of building a new centre in the future. Besides closing the centre, they have decided to put all the corporation’s vacant land up for sale, as well as the curling club building, unused for the past several years. They will add the money they receive from property sales to their investment funds, and apply for grants, in hopes of raising the approximately $10-million estimated to construct a new centre. Masset mayor Barry Pages said Masset and Old Massett have cooperated in the past on successful projects like a water treatment plant and a new hospital and are well known for their generosity in fundraising for events like the Timmy Telethon. If the two communities work hard, it’s possible the money could be raised in a couple of years, he said. However, some of the 75 or so residents who attended the meeting were skeptical, calling the plan a “pipe dream”. They spoke of the shock and pain they are feeling after the sudden closure announcement, and many said they are particularly concerned about how the loss will affect youth and seniors. “While it is no secret that the rec centre has been in decline and losing money, especially in recent years, it was still a shock to hear the news of the closure with less than two months notice,” said Denise Collison, president of the Masset Eagles Swim Club. “We feel that complete closure of the rec without fully exploring the options is not acceptable and is an unfortunate situation for all the children of the islands.” The swim club has already been fundraising for the upcoming season but now the children will have no pool to train in, she said. She offered the club’s support and assistance in raising funds for a new centre, but also urged the board to find a way to keep the existing centre open in the meantime. She suggested a new society be formed to operate the centre, that it request tax contributions to help with expenses, and that it hire a manager. “If the rec centre closes, Masset and the entire islands will suffer,” she told the board. “People are beginning to seriously consider moving away because the options for recreation and socializing will be far less when the rec closes.” Arnie Bellis said the board should have taken action long ago to avoid the situation it is in today. Everyone knew when the GMDC took over the former military facilities in 1997 that they were not in good shape and that the rec centre would lose money, he said. “We’ve had 10 address these issues, it’s nothing new,” he said. “I’ve heard people say in the last week they’ll blockade if they close the centre. We’ve got to come up with some creative ideas.” Another experienced leader, Frank Collison, said he has never seen a plan from the GMDC outlining how they were going to operate the facilities they inherited from the military, and he has never seen the organization consult with the public. (The GMDC is made up of four directors appointed by the Old Massett Village Council and four appointed by the Village of Masset. All its assets are jointly owned by the two villages.) “We have had no consultation from the representatives on this board,” he said. “We need to correct that. That is not acceptable. I think we need some new people and some new blood.” Ron Brown Jr, who sat on the GMDC board for about four years and now runs the Two Champs Café in the rec centre, said he understands the board is in a desperate spot. But the board should have called a public meeting, fully explained the situation, and allowed residents to make the decision about what should happen next, he said. Mr. Brown said he was shocked to receive a notice terminating the café’s rental arrangement with the GMDC. But he is even more concerned about what will happen to the children and teens that use the centre. “This town will pay for it when these kids are up here with nothing to do,” he said. But directors responded that they are fully aware of how much the rec centre means to the community and that they did not make the closure decision easily. There was simply no other option, they told the public, if they were to have any hope of building a new facility. “A rec centre is a fantastic thing to have. In a small community, it’s a gem,” Mr. Disney said. “But you must understand: we took over a facility that was falling down around our ears and we’ve been patching it up and holding it together.” “We’re not doing this because we don’t understand all the social issues,” he continued. “We’ve sweated over this. What we should have done is flattened the whole thing right off the bat.” Mr. Disney said it’s a misperception to say the GMDC has not had a plan for replacing the rec centre. In fact, the board has been working on that project for the past couple of years, has hired an architect and recently completed a feasibility study thanks to a Gwaii Trust grant. The problem, he said, is that no one expected the investment income to decline so suddenly and so much, and the heating bills to rise so quickly. That created a completely unforeseen situation. Whether the rec centre and barracks blocks should be torn down now is a subject of debate. One of the GMDC’s investment funds still contains its original $3-million – the money has never been spent because it is earmarked to pay for any demolition that might be required. Meanwhile, the fund generates investment income that has helped pay rec centre expenses. Some attending the meeting were adamantly opposed to spending the fund; others said the buildings are an eyesore, are dangerous and will start growing mold as soon as the heat and lights are cut off. Director Trevor Jarvis said the board has not decided what to do with the rec centre after it closes for good at the end of September (the pool closes earlier, on Aug. 22.) “We’re looking at all possible options,” he said. Most of the three-hour meeting was taken up by questions and statements from the public, but directors did conduct some routine business, adopting their financial statements and the minutes from their 2007 annual general meeting. Directors voted to table the appointment of an auditor after one member of the public said the work could be done locally for less money. Also, while some directors’ terms are expiring this year, no new directors were put in place because neither village council has informed the GMDC of its appointments. The organization currently has no chair since May Russ resigned several weeks ago; vice-chair Trevor Jarvis said the board has been told that Old Massett will be appointing Jason Majore to replace her. The other appointments are not expected to change much, he said. At the moment, the directors are Mr. Jarvis, Mr. Pages, Shaun Mushysnky and Marlene Liddle for Masset; and Mr. Disney, John T. Jones and Edward Davis for Old Massett.