Red Deer and District SPCA will be allowed more time to pay off its $1-million loan to the City of Red Deer after more than $800,000 in pledges didn’t come through for its building project.
In the fall of 2007, city council approved a loan of up to $1 million to help finance the SPCA’s new animal shelter.
The $4.2-million centre, more than four times larger than the old site with double the capacity for pets, opened in March 2010 off of 77th Street in Riverside industrial area.
The city received its first loan payment of nearly $36,000 last August but the next due payment, this past February, didn’t arrive.
On Monday, council supported giving deferrals for February 2011, August 2011 and February 2012.
“This gives breathing space to the SPCA,” said Mayor Morris Flewwelling.
City council was told it’s been a tough couple of years with two years of consecutive losses, but that operators were working on new ways to turn the situation around.
The organization relies heavily on donations and fundraising for its budget — about 50 to 55 per cent.
SPCA executive director Julie McInnis said the shelter suffered a “very difficult year” in 2010 when more than $800,000 in pledges were made but not received.
“That’s based on the economy falling off and people not having the funds to honour their pledges,” said McInnis.
McInnis said they were stunned that so many promised donations didn’t come through.
“At the time we made the loan arrangement with the city, it was a contingency plan and we were really optimistic that we wouldn’t have to use it,” she said.
McInnis said the building costs were also significantly higher than budgeted.
In August 2008, the construction cost was estimated at $3.7 million. Councillor Chris Stephan said he wondered about the city’s loaning process and whether it should be reviewed.
“We need to look at these things from a business perspective,” said Stephan.
City manager Craig Curtis said the city has provided about 20 loans in the last five to 10 years to non-profit organizations and during that time, only two needed assistance — the SPCA and the River Bend Golf and Recreation Area. Council ruled on Monday that the golf society could have its loan payments deferred for 2008-2011.
McInnis said the loan payment deferrals will make a huge difference because they represent about $73,000 that won’t have to come out of donations to the SPCA. Plus, the SPCA will be able to focus on revenue-generating measures.
The loans are still generating interest, which will be tacked onto the end of the loan. The city won’t bear any cost from delaying the loans, McInnis said.
The SPCA has every intention of paying the loan, she added.
“We’ve been working really hard over the last year since we moved into the new building to come up with new strategies and a more comprehensive business plan,” said McInnis. “We’ve always had a good business plan but times have changed so much.”
A new in-house veterinarian clinic has saved the SPCA about $20,000 this year and is expected to save a total of $60,000 by the end of the year.
A retail store, plus a re-store of gently used items, were also added and are giving 100 per cent profit to the organization.
The SPCA is dealing with increasing needs, with more than 90,000 people in Red Deer and a surrounding population of about 400,000, McInnis said.
The SPCA has more than 42 programs in place, including one where the shelter takes in pets from women victimized by spousal abuse, as well as those with drug and mental issues.
The city pays an annual fee for service of $77,0000 and pays a commission on dog licences of $20,000 to $25,000 a year. Red Deer County also provides some financial assistance.
ltester@www.reddeeradvocate.com