real to ask regina city council for another $4m funding boost
real says it is approaching the limit on its current line of credit, and another funding boost is needed to provide "sufficient cash flow" to stay afloat.
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the regina exhibition association limited administration building at the real district on tuesday, sept. 17, 2024 in regina.
kayle neis
/
regina leader-post
regina exhibition association limited (real) is seeking another significant funding injection to stay afloat, according to a report coming to city council.
real is asking for an additional $4 million in operational funding by the end of october from the city of regina, in order to pay down a critical line of credit the organization is using to balance its books.
the request will be made to executive committee on wednesday, and go to a final vote at the sept. 25 city council meeting.
real’s $6.8-million line of credit will reach its maximum balance in october. the additional funding would be used to pay down a portion of that balance, providing real a “sufficient cash flow” to operate within its credit limit until march 2025.
administration’s report says the money would allow the organization to “focus on onboarding a new board of directors and begin the process of hiring a permanent ceo without concern for cash flow,” as was directed by city council in june.
that direction reaffirmed city council’s opinion that real is a valuable municipal asset worth keeping, though it did strip the organization of most tourism-related responsibilities, including event booking at mosaic stadium.
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at that time, council also directed real to conduct a deeper financial review, which is where this funding boost request stems from. real made a similar request last summer to restructure $3.4 million in debt, prior to an extensive investigation into the tourism entity’s ledgers.
administration recommends pulling the money from the city’s general reserves, because the operating budget is currently overextended. the audit and finance committee recently discussed regina’s mid-year financial report, which outlined a $2.4-million deficit projection for the end of 2024.
as of this summer, the general fund reserve is forecasted to be at approximately $16.6 million, still below the minimum recommended balance of $23 million.
“this option is recommended … because it better balances the city’s financial position with the needs of real,” reads the report.
the report explicitly recommends against providing the full $6.8 million due to the city’s financial constraints, but also against denying real any additional funding as the city is the guarantor for the loan regardless.
“if real were to default on its loan payments, the city would be required to repay all of these loans of which the current total amount outstanding is $16.7 million,” it reads.
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any shutdown of operations at real would negatively impact a number of users and tenants on the exhibition campus, including minor and recreational sports leagues, the canadian western agribition, regina pats and the saskatchewan roughriders.
real also notes it will likely seek an “increased operating grant” in 2025, to “remain within its (line of credit) limit.” real’s financial state will have “significant implications” to the city’s budget, administration warns in its report.
budget discussions in 2024 resulted in a $5.8-million operating budget for real, less than the organization’s original request for $6.4 million. at the time, city council said it would increase the overall mill rate or defer capital projects in order to fulfil the ask.
city council has also since agreed to cover an $8-million debt real owes after a canada revenue agency audit was done into its use of the canada emergency wage subsidy during the covid-19 pandemic. it will also come from the general fund reserve.
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