Gimli councillor Andy Damm said he would be “remiss” in his duties if he failed to tell municipal taxpayers about management issues and financial losses at the Gimli Community Development Corporation, which had just under $1 million in 2019 but has now trickled down to around $130,000.
And the only way he said he could let the public know of the losses and compel council to deal with it – this after raising the issue “several times internally” since 2023 – was to bring a resolution to the council table.
He did so during council’s regular meeting on April 17, and councillor Richard Petrowski enabled that to happen by seconding Damm’s motion.
Damm said he wants council to make a decision on the CDC, some of whose members are also RM councillors, in order to avoid a trajectory that could see the CDC’s bank balance drained to zero and a possible bail-out by the RM.
“This resolution was put on the floor for exactly this reason: that this comes into the public light and that council is able to speak in public about the Gimli CDC. For those who don’t know, the CDC is an arm’s length corporation apart from the RM, but all of the assets that are within the CDC are actually RM assets. I believe [it] was incorporated in 1996,” said Damm. “Over the past few years, I’ve seen some of the financials because I’ve looked at it at various points when I was invited to some of the meetings, and I saw a trajectory that was heading towards zero in the funding.”
Damm said the CDC has lost large sums of money over the past few years.
“The last few years there has been between $200,000 to $250,000 lost. What I’ve seen in the last notations is the bank account is somewhere at $130,000 or below. If we do the calculations on that, that means the CDC is probably done without additional revenues before September,” he said.
Damm’s resolution asks for a “transition” of the CDC to RM management starting on Jan. 1, 2025, as well as the following:
That the current CDC board continues to manage the corporation for the remainder of 2024; Limit expenditures “within the residual funds remaining”; Address deficiencies with the CDC-run dormitory (also known as the CN Training Centre and which currently houses Ukrainian and other refugees) to “limit risks”; Conduct a review of the CDC’s assets; “Work toward” vacating the refugees staying at the dormitory with a target date of Dec. 31, 2024; Determine the status of the CDC as a corporation.
The CDC’s mandate is to bring economic opportunities to the business park (also known as the Gimli Industrial Park), provide economic development services to the RM, increase employment and grow the business sector in the RM, among other functions.
In 2018 the CDC had a balance of $777,184. The following year that increased by $190,963 for a balance of $968,147, according to financials for the period 2018 to 2022 that the RM’s chief administrative officer Kelly Cosgrove provided to the Express upon request. After that revenues began to fall.
During the years of the COVID pandemic when the province had imposed various restrictions on public gatherings, the CDC’s revenues show a decline. One of the corporation’s major revenue sources was the air cadets, which used to rent the dormitory for its flying program. The cadets cancelled the program during COVID. The corporation saw a loss in 2020 of $176,212, ending with a balance of $791,935. In 2021 that balance dropped to $583,207. In 2022, the balance fell to $329,000.
An unaudited Statement of Financial Position the Express obtained shows the CDC’s “net financial assets (net debt)” were $416,696 on Dec. 31, 2022. On March 31, 2023, the balance showed $335,778, a decline of $80,918 over a three-month period.
Gimli Mayor Kevin Chudd is currently the chair of the CDC board, having assumed the position in January 2023 after councillor Richard Petrowski stepped down as chair then left the board altogether in June of that year. Councillor Kurt Reichert currently sits on the CDC board although his name is not posted on the CDC’s website.
Questions about the CDC’s financial losses started swirling last year, and in August 2023 the Express attempted to get the RM to respond to questions such as how much money the municipality gave to the CDC, the current balance in its accounts, whether financial reporting was provided by the CDC to council, whether the RM had required the CDC to invest its revenues in a trust account and whether the RM had questioned the CDC regarding financial losses.
It’s unclear whether the corporation’s board held an AGM and whether minutes were kept for the entirety of 2023, as required under bylaw.
A huge point of contention during council’s discussion was the clause in the resolution stating council work towards vacating the refugees living in the dormitory by the end of this year and get the building’s deficiencies fixed.
“In no uncertain terms – and I am with council on this – do I wish to see residents that are in that building [on the street],” said Damm. “What I want to see is a safe environment for them to be in. And what that requires is funding. The funding that is in the CDC that goes forward may not achieve that. And it has been on that trajectory for quite a while.”
He cited issues with a lack of financial transparency and disclosure vis-a-vis the CDC’s accounting practices, suggesting uncertainty of where exactly money has been spent.
“One of the issues that comes up each and every time is that there isn’t records of accounting that go all the way along. The fiduciary responsibilities that the board is supposed to maintain, some have been dumped by the wayside,” said Damm. “There’s also issues, too, that we have to look at as far as the operation of the dorm [so that it’s] not by the volunteers.”
The dormitory began to house Ukrainian refugees fleeing to Canada after Russia’s invasion of Ukraine in 2022. There was no rent charged to the refugees for approximately a year.
It now has 79 people living there. Two hundred and twelve people are working in the community and there are 16 children attending local schools [figures provided by the CDC].
Damm said council is “well aware” that the dormitory has a number of deficiencies. Those were spelt out in a report by the local planning district last month.
The Eastern Interlake Planning District’s Occupancy Inspection Report of the CN Training Centre dated March 7, 2024, which was obtained by the Express, shows a number of safety issues including non-compliance to the fire code.
For instance, the dorm rooms where the refugees are currently living do not have an egress window, evacuation plans need to be posted in each dorm room, handrails in the stairwells “do not meet code requirements,” the ventilation system needs inspection and servicing by “qualified personnel,” fire dampers need be located and inspected, loose floor tiles in the basement could pose a tripping hazard, loose ceiling tiles in the basement could “easily fall out on occupants,” the basement kitchens should have proper exhaust ventilation at or near each stove, fire extinguishers should be placed by all cooking stations, exit doors in the basement are locked and exit doors on the east side of the hall are blocked with stored items.
Damm said an internal report given to the RM estimated it would cost $1 million to fix the dorm’s deficiencies. Over time, that could end up costing about $2 million.
“I just don’t want this to end up in a bankrupt corporation that we have to deal with … that the next thing the CDC board walks into Gimli council and says, ‘We need money to operate,’” said Damm. “…. I know the CDC board has transitioned, but the majority of the board has been in place since just after January 2023. In that [time] I haven’t seen a plan to date. I know there hasn’t been, realistically, any meetings since a period last year, with the exception of a hasty meeting that was put together last week to deal with this because this resolution was sitting out there and going forward.”
Throughout the hour-long debate on the CDC, mayor Kevin Chudd spoke about various issues (e.g., the cost of the airport, the need for oversight on the smell of the sewage treatment plant, the motorsport park) not wholly germane to the spirit of Damm’s resolution.
Chudd also said the dormitory is “safe,” has an “occupancy permit” and that Damm’s saying $1 million is needed to repair the dorm is “non-factual.” He chastised Damm a number of times for bringing the CDC’s affairs to public scrutiny while at the same time lamenting a lack of livestreaming of council meetings and making repeated references to transparency and full disclosure. More than once the mayor urged council members to defeat Damm’s resolution.
“The [industrial] park has to be cleaned up so it’s attractive and safe. Same with the airport, same with the motorsport park. There are potential revenue sources. I have to thank Coun. Petrowski on this farmland revenue …,” said Chudd. “I find it very troubling and, unfortunately, it’s out in the open. But if we had livestreaming, we don’t have the luxury of livestreaming yet. Once we have livestreaming not only at council meetings but I’d like to see at committee meetings then people can be very much more engaged in this process than what we have here. We all have to work together for the betterment of our community so that people that are trying, and the other component of this is our sewage treatment plant. We need plans.”
Chudd added it would be “nice to see” Damm’s resolution withdrawn and that “we have a plan I believe will work all the way around.”
The mayor didn’t speak to the details of that plan.
Chudd went on to provide a brief history of Canadian Forces Base in Gimli since the 1950s and lamented the loss of residential housing units (now condos) in the Gimli Industrial Park after CFB left. He called for other levels of government to provide funding assistance so that the dormitory can continue to house the refugees, who have been “subsidized” by the RM. Over 200 refugees have been “placed” in [jobs and housing] the community, said Chudd, who is part of a family-owned business that sells vehicles and who has hired a number of Ukrainian refugees to work at the dealership.
“That’s the last thing I want to see is anybody – I want this loud and clear publicly – no one will be kicked out of that place, period,” said Chudd.
Councillor Thora Palson said that in her mind, the dormitory is not necessarily “a home maybe more transitional temporary” housing, but that she’s not prepared to make any decision without speaking first with the CDC board and council. She stated she would abstain from voting on Damm’s resolution.
The mayor told her: “We should deal with this [i.e., vote].
Exactly how council will deal with the CDC’s financials and its future as a corporation was left unanswered during the debate.
Council voted unanimously against the resolution. Damm said he ended up voting against his own resolution because it “did what it was supposed to do: brought this out in the open.”
After Damm’s resolution was defeated, Coun. Richard Petrowski asked: “We’re walking back on these [dormitory] deficiencies?”
Because Damm’s resolution was defeated it has no binding power, including the clause suggesting council work towards having refugees vacate the dormitory. But Chudd insisted council pass a new resolution “so with the public and the press here, people that are living there know they are safe and secure.” He instructed Cosgrove to create a new resolution on the spot and suggested how it should be worded.
The mayor and councillors Richard Petrowski, Thora Palson and Kurt Reichert voted in favour of the new resolution, which states: “Council approves and supports the residents in the Gimli Training Centre who reside in the facility.”
Damm abstained from voting on that resolution. He said he didn’t feel it was “wholesome to what the intent was” and it also failed to mention the deficiency report.
Public question period is no longer part of council’s agenda so the Express asked Damm after the meeting ended whether the dorm deficiencies noted in the EIPD’s report will be addressed.
“We are aware of the report. We have to make sure it’s acted upon,” said Damm.
