Lethbridge mayor and council alarmed by 'mismanagement' of new event centre project

A third-party review that found "significant mismanagement" behind a new event centre in Lethbridge is being turned over to the local police service's economic crimes unit for further investigation.

The report examined the Lethbridge and District Exhibition (LDE), the organization behind the Agri-food Hub and Trade Centre, a new 268,000-square-footevent centre southeast of the city's core.

Completed by Deloitte Canada and presented to council's economic and finance standing policy committeeon Tuesday, the report found significant issues in the project. That included the organization not proactively communicating that more than $27 million was needed for additional costsuntil emergency funding was required.

Mayor Blaine Hyggen said the report's findings are very concerning for a taxpayer-funded project.

"We are alarmed and incredibly concerned with Deloitte's findings in what appears to be a significant level of mismanagement," Hyggen said on Tuesday.

The review was part of the agreement between the city and organization earlier this year, when the city stepped in with emergency fundingto keep the new event centreafloat.

Deloitte's findings also showed no formal procurement process to bring aboard an architect and project manager, a lack of third-party quotes to supportdemolition and parking lot refurbishment costs, and chief executive officer and board expenses not complying with LDE policy.

In December,the city stepped in after the centre's construction went $7 million over its $70.6 million budget. Council approved emergency funding and a new interim governance board for the organization, and voted for administration to conduct a third-party review.

"This is not OK," said Lethbridge city manager Lloyd Brierley."This is unacceptable, and we expected better. We need to see better going forward."

Hyggen saidthe city is looking to establish safeguards to ensure accountability from all organizations that receive city funds, particularly in strategic planning and financial reporting.Since the change in LDE's governance this year, the organization's operating deficit has dropped by more than $2.4 million.

Lethbridge police said it won't release any more information about its probe into the Lethbridge and District Exhibition, to protect the integrity of the investigation.

The economic and finance standing policy committee was planning to further discuss Deloitte's report on Wednesday.