A third-party review of Lethbridge and District Exhibition has left city council upset and frustrated with the findings.
Earlier this year, the City of Lethbridge sought to review the conduct of LDE following an overhaul in management that saw the city take over governance of the organization. This came after numerous financial concerns stemming from the construction and operation of the new Agri-Food Hub and Trade Centre.
“This is extremely — and I’ll say extremely — concerning, given this was primarily a taxpayer-funded project,” said Blaine Hyggen, mayor of Lethbridge.
The report, compiled by Deloitte Canada, took five months to complete and revealed issues across five key areas. These areas included strategy and planning, project execution, governance, use of funds and council communications.
“We are alarmed and incredibly concerned with Deloitte’s findings in what appears to be significant level of mismanagement,” said Hyggen.
In fact, the report indicates serious misspending on behalf of senior executives from the former LDE governance.
“100 per cent of the CEO expenses and 50 per cent of the board expenses, (that were) tested, were not in compliance with LDE policy,” said Lloyd Brierley, city manager, who also took over as co-chair of LDE when the city assumed governance.
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“Our residents expect the city to be responsible stewards of public dollars.”
The concerns for the city include over $18,000 spent on luxury hotels and $12,000 on gifts.
“I do want to make one thing clear. The situation we’ve been placed in as a city is inexcusable and frustrating,” said Hyggen.
The content of the report is serious enough that Lethbridge police confirm they are investigating it.
“The summary report has been turned over to the economic crimes unit of the Lethbridge Police Service for further investigation. City administration may also initiate deeper examinations of the findings,” said Brierley.
The results show money spent failed to even follow the organization’s own policies.
“We need to ensure this never happens again. While more work is needed, the findings from this report provide valuable insight into the changes that are required going forward.”
The report indicates construction costs per square foot of the Agri-Food Hub and Trade Centre is reasonable, though $660,000 was viewed as avoidable. This includes $330,000 on custom-made, reclaimed wood furnishings, over $296,000 on close-off space due to design issues and more than $30,000 to address ventilation issues with the server rooms.
However, that’s chump change compared to other monetary issues outlined in the report.
“LDE did not communicate a $27-million increase in the total expected project cost until financial difficulties required emergency funding, despite the significant impact this would have on the city and its taxpayers,” said Brierley.
The lack of communication is one point Brierley says contributed most to city council’s confusion and lack of understanding regarding the financial shortcomings of LDE.
“In my opinion, the city council of the day asked many questions of LDE. However, this Deloitte report tells us the presentations made by past LDE management were missing critical context and was subject to limitations.”
This is echoed by Hyggen. “The report states council was lacking information from LDE throughout the planning and construction process, preventing fully informed decision making and sound oversight of the project. Further, the report identified instances where the information that was provided was contradictory or inconsistent,” said Hyggen.
Despite the challenging past, Lethbridge and District Exhibition has seen new management, including acting CEO Kim Gallucci, take over. This new management has seen a reduction of $2.4 million in the operating deficit in 2024 alone.
“I commend the current LDE team for their efforts to reduce to deficits and implement many organizational, financial and operational improvements,” said Brierley.
While Lethbridge police confirm its Economic Crimes Unit is investigating the matter, no additional information has been released.