Regina council votes to remove REAL's board of directors - Action News
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Saskatchewan

Regina council votes to remove REAL's board of directors

The municipal corporation has faced mounting scrutiny this year after a failed rebrand of the city's tourism organization drew international backlash and questions about the conflict of interest posed by CEO Tim Reid'sprivate consulting firm.

Changes coming for municipal corporation amid financial uncertainty and complaints about oversight

Members of City of Regina administration watch as city council holds a meeting at city hall on Aug. 17, 2022.
The board of Regina Exhibition Association Limited or REAL has been fired after a vote by Regina city council Wednesday. (Kirk Fraser/CBC)

Regina city council has voted to fire the board of Regina Exhibition Association Limited (REAL) amid uncertainty over the organization's future.

The municipal corporation has faced mounting scrutiny this year after a failed rebrand of the city's tourism organization drew international backlash and questions about the conflict of interest posed by CEO Tim Reid'sprivate consulting firm.

Theorganization's troubled financial outlook appears to be what ultimatelypushed some councillors to act on Wednesday.

"While REAL and its governance and operational leaders are meant to be held at arms length, at the end of the day it is the 11 of us who are responsible and accountable to members of the public," said Ward 3 Coun. Andrew Stevens.

Council voted 6-5 to approve an amendment put forward by Stevens that will see the existing votingmembers of the boardreplaced by new members appointed by city administration.

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Shortly after the motion was passed by council, all voting members of the REAL board of directors submitted their resignations, according to the City of Regina.

The replacement board members once appointed will function on an interim basis whileadministration works on a report outlining potential changes to how the organization operates.

That could includedissolving REAL and having the City of Regina assume full management of all its assets.

WATCH|Regina council votes to remove REAL's board of directors:

Regina council votes to remove REAL's board of directors

11 months ago
Duration 1:42
Regina city council has voted to fire the board of Regina Exhibition Association Limited (REAL) amid uncertainty over the organization's future.

'I can't any longer'

Last week, council received an independent financial review ofREAL by accounting firm MNP.

ThereportfoundREAL's current business model is not financially sustainable without significant subsidies from the City of Regina.

"MNP does not believe that REAL will be able to operate on a full break-even on operation in the future," the report said.

REAL has consistently lost money according to its financial statements:$5.6 million in 2020, $3.9 million in 2021 and $5.1million in 2022.

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The losses are only expected to get worse, with anannual grant of $2.6 million from the Saskatchewan government for not operating slot machines set to expire in 2027.

The MNPreport says that after 2028, REAL would need to host an equivalent of four to seven2022 Grey Cupsannually just to break even.

As a result of the dire financial situation, REAL is asking for a boost in funding from the city. Over the last three years, the city had been providing REALwith $1.1 million a year, but the organization's preliminary budget request asked for more than $5.8 million.

Along with the existing financial concerns, REAL'suse of theCanada emergency wage subsidyduring the COVID-19 pandemic is currently being audited by the federal government.

The audit itself is not an indication that any wrongdoing occurred, butit means that REAL could be forced to repay part or all ofthe $7.5 million it received from the program, depending on its findings.

Stevens said his amendment was the result of his inability to approve any major funding request from REAL without significant changes tohow it was run or how council would be able to oversee its operations.

Ward 4 Coun. Lori Brescianiwas among those who agreed.

"It's unfortunate that we have to make this call, but to dole out millions and millions and millions without truly understanding where this money is going,I can't any longer," she said.

Ward 7 Coun. Terina said she felt frustrated that she had been repeatedly told that council could not dive deeper into the municipal corporation's expenses.

Recommendation for caution outvoted

Ward 2 Coun. Bob Hawkins, Ward 5 Coun. John Findura, Ward 10 Coun. Landon Mohl and Mayor Sandra Masters were joined by Ward 9 Coun. Jason Mancinelli in voting against the motion.

Mancinelliattempted to urge his fellow councillors to be cautious.

"Please, please, please, we crashed tourism already by rushing," he said. "We impacted one of our assets, REAL, with rash decisions. Slow down."

His argument was unsuccessful.

A request for comment from REAL was not immediately returned on Wednesday.