Need to know: A deficit is the same as a loss.  You are spending more money than you are bringing in.  

There are costs associated with keeping the Meridian Community Centre operating.   Many people are familiar with the debts incurred originating from the MCC founding a decade or more in the past.  In fact our current Mayor first rode to office in 2018 on the MCC horse.  

The current debt load on the municipality is approximately $19.8 million.  This is 90% of the town’s long-term debt.  Interest rates on these MCC loans vary from 2% to 3.3%.   The debt was originally much, much, higher back in 2018. The Mayor did get a lot of the debt paid down with land sale proceeds and raising taxes.  That was the proper financial management of the problem – at the time. 

It is now 2026.    Let’s move on.

The community of Pelham needs to be aware of the MCC finances and have perspective of how the MCC stands up in relation to the overall town finances. 

The 2026 planned net consolidated deficit of the MCC is at $1.5 million.    This is a significant drain on Town resources and property taxes and without corrective action it will continue to repeat year after year.

 The 2025 budget deficit was $1.4 million. 2024 $1.0 million and 2023 $818 thousand.

In four years the consolidated MCC deficit has almost doubled and is trending in the wrong direction.

There are probably numerous causes to this increasing deficit.   Is Council aware?  Does Council care?

What is clearly evident from the financial information published by the Town are;

1)    Revenue from the MCC had only increased modestly from $1.6 million in 2023 to a planned $1.8 million in 2026.  At the same time visitors have increased dramatically as told to me by a very senior town employee.  I don’t have the official numbers but visitors may have doubled.

2)    Costs have grown dramatically.  $3 million in 2023 to a planned $3.9 million in 2026.  Well if you have more visitors costs are likely to increase but I believe the real driver are:

  a.    Salaries increase $765,100 from 2023 to 2026.  New hires?

  b.    Repairs increase $19,900.  More users and aging?

  c.    Janitorial supplies $10,600. More users?

  d.    Utilities $76,000.  Don’t know the split between electricity and gas but I would have expected hydro to decrease due to the new solar panels.

The MCC Consolidated deficits are just over 6% of the municipality’s operating budget.

Key Points:

• The MCC debts and interest costs are relatively fixed and are not driving the increase in MCC operating deficits. They are part of the total cost but do not appear to be causing the escalating deficits.
• Operating cost increases are driving the escalating deficits.  
• Revenue increases are not keeping pace in covering for the cost increases.
• The MCC benefits those that use its services.   Residents and people from outside the municipality.
• The deficit is paid for in your Pelham property taxes.  Everyone pays equally based on assessment.   Benefits are enjoyed by MCC users.
• The Mayor and Council need to reconsider if these deficits and trending are acceptable.   They also need to consider if it’s appropriate for all Pelham property tax payers to subsidize the MCC to this extent.  

Possible Action Items

Benchmarking: Research comparable recreation centres to understand best practices and bring them to Pelham.

Measure what you need to manage: Scrub the MCC budget to ensure we are only including cost and revenues that are directly associated with the core MCC mandate.  Other costs need to be evaluated on their own merits and not included in the MCC budget.  Reevaluate the MCC cost position.

Drive a value improvement plan internally at the MCC, find savings, revenue growth.

Outsource management of the core MCC mandate.  Governments do not do well in managing cost infrastructures as they aspire to deliver services and benefits, win votes, and not cost efficiency.

It seems apparent that the Town leadership has focused its attention on aspects of the Meridian Centre other than its core finances.   There needs to be a better balance.    Continuing to escalate losses regardless of the rationale will eventually result in a poor serving recreational and community centre.  

I would recommend that actions be taken in the next council term to get the MCC finances trending towards being sustainable and healthy.   

 My experience managing multimillion dollar manufacturing and service operations will be valuable in improving the deficit finances in and around the MCC.