Council to fund LDE with contingencies, not increased taxes

After lengthy discussions and evaluating multiple options, City Council has decided to use both contingency funding and surplus dollars from the current budget to support the operations of Lethbridge & District Exhibition (LDE). This means there will be no additional tax increase in 2025. With the approval of LDE’s $4.1 million annual operating budget, City Council will balance the 25-26 budget using existing contingencies and one-time funding. This maintains the already approved 5.1 per cent tax increase for the next two years.

In addition, Council passed a motion to refinance the debt related to the construction of the Agri-food Hub & Trade Centre to save $15 million in interest during the next 10 years.

“We know an additional tax increase was not something our community was in support of,” says Lethbridge Mayor, Blaine Hyggen. “In the end, there is no win-win option. Our contingency and surplus funding is there for emergencies and that is what we were faced with today. I’m confident that over the next two years, we can continue to find efficiencies to reduce the money needing to operate the Agri-food Hub. We were also able to approve a new approach to managing the debt related to this project that will save the community millions of dollars.”

The City's finance department has developed a strategy to reduce the $17-million loan LDE is currently paying to the City for their portion of the Agri-food Hub project. By having the City assume this debt, refinancing options will now be put in place. Unused grant funding has been identified to pay down the loan by more than $7 million. This, along with refinancing from a 30-year to a 10-year term and moving from external to internal borrowing will save City taxpayers $15 million in interest costs.

Today’s decision secures operational funding for LDE which helps their team move forward with critical sales initiatives to book new events, secure sponsors and grow other revenue streams. This will help continue reducing the deficit at the Agri-food Hub & Trade Centre which has already been cut by $2.4 million in the last year.

As Council heard from City administration, deferring tax increases will create a tax pressure on the next budget cycle impacting the funding available during deliberations in 2027. Depleting available contingencies from the current budget means Council will have no available funds for one-time expenses that may arise before 2028.

City Council also approved several additional recommendations coming from for the Economic & Finance Standing Policy Committee (SPC):  

• Administrative policy and procedure review: Council directed administration to amend City policies and procedures, as needed, to better protect the corporation and Lethbridge taxpayers from undue financial risk.
• Future Capital Costs: Two significant capital costs still required by LDE are the demolition of the old pavilions and the reconstruction of the parking lot. Council approved a recommendation to refer consideration of both the demolition and the parking lot reconstruction to the 2027-2030 Capital Improvement Program (CIP).
• Future operating models: In alignment with the options provided in the Deloitte report, Council approved that work proceed on exploring a new operating model for LDE. This includes the development of a recommended business plan, implementation plan and budget for a municipally-controlled corporation to consolidate event attraction across Lethbridge.

“Council sees the value and benefit the Agri-food Hub & Trade Centre brings to our community and we don’t want to lose that,” says Mayor Hyggen. “We are also encouraged by the huge strides made by LDE to become more efficient and increase revenues in the last year. We look forward to exploring new operating models and discovering the full potential of this facility in the future.”

Today’s decisions came following a financial presentation from City administration at the Economic & Finance SPC meeting on November 27 and a presentation of the findings from the third-party review of LDE by Deloitte Canada on November 26.

In an effort to be transparent and provide information to the public, an online resource is available at https://getinvolvedlethbridge.ca/lethbridge-district-exhibition. This site serves as the hub for any City news and Council decisions regarding LDE.