City to audit Trade Centre Limited’s management of Metro Centre

It’d be hard to find an auditor in town who isn’t looking at Trade Centre Limited. Last month, city auditor general Larry Munroe dropped a report on the city council’s audit committee, basically calling out the provincial crown corporation TCL for outright lifting the city-owned Metro Box Office ticketing agency, thereby depriving the city nearly a million dollars in ticket sale revenue.

Soon after, we published on The Coast website a previously unreleased audit of TCL that the provincial department of economic development had conducted in 2010. That audit raised many of the same issues that Munroe would highlight two years later.

Then, provincial auditor Jacques LaPointe announced he too is conducting an audit of TCL. LaPointe is tight-lipped about what exactly he’ll be looking at, but said he’ll publish his results later this year.

Now, Halifax council has directed its finance staff to hire yet more financial consultants to audit how TCL has been managing the Metro Centre. This comes at the behest of their auditor, Munroe, who said his July audit was merely a surface investigation and called for a much more extensive review of the city-TCL relationship.
Council Tuesday voted unanimously for the extended audit, which will cost at least $50,000, and take many months. Chief bureaucrat Richard Butts agreed the audit was entirely appropriate, but the “five or six issues” the audit will look at are so convoluted Butts wasn’t able to list them off the top of his head.

Were Butts able to unravel the many threads, he might have listed these issues:

City representation on TCL Board For decades, three city councillors and the mayor have sat on the TCL board. The politicians haven’t given that position the attention it deserves, and when the ticket scandal shit hit the fan at council, two of them felt they had a conflict of interest and recused themselves from the conversation, illustrating that not only are councillors on the TCL board incompetent, they have divided loyalties. Munroe suggested the city explore booting the councillors and instead appointing finance staff to the positions.

Bogus salary charges For managing the Metro Centre for the city, TCL has long been charging part of its executives’ salaries to the city, for the time the executives supposedly devoted to Metro Centre affairs. Problem is, that time allotment appears to be pulled straight out of someone’s ass—there’s no documentation for it whatsoever.

Detailing the loss from tickets Munroe had looked at only how Trade Centre revenues increased after the takeover of Metro Box Office, and did not try to give an event-by-event breakdown of ticket sales to arrive at an exact loss to the city, which is likely greater than he reported.

Looking at the 40-cent payback Likewise, after TCL took over Metro Box Office it pulled another undocumented number from its collective ass: for each ticket sold to a Metro Centre event, the city would be paid 40 cents. Well, except for group sales, where the city got nothing. Maybe the 40 cents was wildly inappropriate. Maybe there should be an inflator, or a different arrangement entirely.

Take Metro Centre back Is there any good reason why TCL should be managing the Metro Centre at all? The city could write another secret contract with Nustadia, the firm that operates the four-pad arena and The Oval, to run the Metro Centre, or the city could manage the thing itself.

The Coast has filed multiple public records requests related to these issues, and will continue to follow the story.

This article appears in Aug 9-15, 2012.