Over $900K In MultiPlex Pledges Wrote Off As Uncollectable
By Robert Thomas
How much did the City collect from the $10,300,000 in pledges to what was once called the Multiplex? How much was pledged but never collected? And could the City take legal action to collect outstanding pledges?
These were three questions answered during the Enquiries section of this past Monday evening's Council meeting.
According to the report the Moose Jaw Multi-Plex Builders Inc (MJMPBI) said they could raise $10,100,000 through pledges by individuals, groups and association as well as businesses.
Of the pledged funds only $8,769,644.10 was received leaving $1,330,355.90 outstanding.
In a 2015 the City audited the project and found only the pledge from the Moose Jaw Warriors was collectible. The result was $1,079,405.90 in outstanding pledges.
The Warriors are set to pay $200,000 in 2021 and $200,000 again in 2022 to honour their commitment.
An additional $149,050 was collected through the MJMPBI dropping the outstanding pledges to $930,355.90. These outstanding funds were written off as uncollectable bad debt in 2015.
The group with the highest outstanding pledge is the Moose Jaw Soccer Association (MJSA).
Initially MJSA pledged $750,000 to the project but due to reduced membership was only able to contribute $164,050. This left $589,050 outstanding from the original pledge.
In talks with the City the soccer association said they would be able to contribute $25 per player. To date none of this reduced pledge has been received by the City.
DISCUSSION
In his response to the report Councillor Scott McMann said it was unfortunate the amounts pledged were not collected and decisions were made based upon those pledges (see Contingency Funds Controversy selection below).
“Certainly the Council of the day made decisions based upon those pledged amounts and it us unfortunate that they are not going to be fulfilled,” Councillor McMann said.
Councillor McMann asked if changes could be made to any future fundraising agreement's structure “so we have some recourse to try and collect or perhaps not give the total amountoffset if it is over a total number of years.”
City manager Jim Puffalt said the fundraising agreement entered into between the City and MJMPBI was commonly done on these types of projects in other communities.
“I think again the lesson learned the last time it was a separate committee doing some of the work and not the City. Sometimes in the way we set these things up leads to that type of thing to happen,” Puffalt said.
Finance director Brian Acker said because of the third party nature of the fundraising agreement there is no recourse through Canada Revenue Agency rules. The Multi-Plex fundraising project was designated a municipal project allowing the City to issue tax deductible receipts.
As an added note the Moose Jaw Cultural Centre had a similar pledge and municipal project approach.
CONTINGENCY FUNDS CONTROVERSY
According to published media reports from 2013 Moose Jaw Multi-Plex Builders Inc co-chair Bill Deyo told Council there were some members threatening to withhold pledges for the project if a left over $1.5 million contingency fund was moved to repair roads and not to upgrade Mosaic Place and the Yara Centre.
The contingency funds were seen as monies held for cost over runs which never materialized for one side while the Builders Group felt their donations were being re-routed to fix roads. There was also a mention of a potential lawsuit.
In the end the Builders won the Council voted and $1.5 million was spent on improvements including $770,000 for an escalator.
For their fundraising efforts Shelley Jones and Deyo were named co-recipients of the 2012 Moose Jaw Citizen of the Year.
Naming rights sold for Mosaic Place, the Yard Centre and Moose Jaw Ford Curling Centre were part of the fundraising efforts and negotiated by the Builder's group.