Investment performance a problem for GMDC

  • May. 28, 2003 7:00 a.m.

By Alex Rinfret It’s easy to think we live on an island isolated from world events, that we don’t have to worry too hard about global problems like the war in Iraq or terrorist attacks. But just how closely linked we are to the rest of the world was vividly illustrated Sunday (May 25) at the Greater Massett Development Corporation’s annual general meeting.
GMDC runs the Massett recreation centre and owns all the former military facilities there. Its main source of revenue is a multi-million dollar fund (currently worth $6.6-million), handed over by the federal government when GMDC took over responsibility for the facilities.
Most of the money is invested in the stock market, which performed particularly poorly last year thanks to world events, according to manager Jo-Ann Brown. GMDC didn’t actually lose money on the stock market, but it did make much less than in previous years: $208,000 this year compared to $377,000 last year.
“The main influence on this year’s bottom line has been the lower return on investments,” Ms Brown said. “The market is directly influenced by the world events over the past 18 months, resulting in one of the most unstable markets in history.”
The investment income is particularly important because GMDC doesn’t make enough money from its operations to cover its expenses. Its biggest department, the rec centre, cost $506,000 to run last year and only brought in $162,000 in memberships, fees and rentals.
These numbers obscure the fact that the rec centre was actually wildly successful last year in attracting users. It sold more local memberships and offered more programs, almost doubling the amount of revenue it brought in for programs and lessons ($36,000 last year compared to $18,000 the year before). Rec centre users made almost 43,000 visits last year, an increase of 5,300 visits from the previous year, a result which recreation manager Willis Parnell called “awesome”.
GMDC has decided to increase rec centre fees three percent on July 1, and will discuss a further increase of two percent for 2004, Ms Brown said. Fees have not been increased since GMDC started running the facility, she said.
Expenses were down in GMDC’s other departments, which include administration (where spending decreased 11 percent from the previous year) and commercial property (where spending was down 17 percent, and rental revenue was up 28 percent).
Although expenses were reduced, the bottom line was that the corporation lost $405,000 in 2002, compared to $386,000 the previous year. The increased loss was entirely due to the much lower investment income.
Most of GMDC’s buildings have now been leased or rented, Ms Brown said. She added that the Northern Health Authority is interested in leasing the former Skills Centre building, next door to the hospital. This is the current home of Community Futures, but Ms Brown said the board has started talking to Community Futures about a relocation option in case the health authority wants the building.’
On behalf of the board, director Janet Brown commended the staff for their excellent work over the past year, especially Jo-Ann Brown and Willis Parnell.
GMDC directors for the coming year are the same as last year: Janet Brown, Trevor Jarvis, Shaun Mushynsky and Ed Woode for the Village of Masset; and Ron Brown Jr., John Disney, May Russ and Leo Gagnon for the Old Massett Village Council.