City exploring splitting LDE into two organizations to operate Agri-food Hub and Trade Centre

Some big changes could be coming as to how the Agri-Food Hub and Trade Centre is operated going forward.

The City of Lethbridge is looking at an option to split the Lethbridge and District Exhibition (LDE) into two separate entities to operate the Agri-food Hub and Trade Centre going forward.

City administration says one organization would see the LDE go back to its roots as the Lethbridge and District Agricultural Society, while the other organization – EventCo. – would be a municipally controlled corporation (MCC).

“The EventCo. staff can focus on the event centre and the trade centre components and attracting further components there and the ag society can focus on developing the education and programming and all the things that are their mandate,” said Darrell Mathews, chief financial officer for the City of Lethbridge.

Both organizations would work hand-in-hand for event planning and operation -- including Whoop-Up Days, Ag Expo and the Farmers’ Market.

The facility could move to be operated by a temporary holding company (EventCo). This will allow the organization to operate the trade centre in the most sustainable and cost-efficient way possible, without needing to meet the criteria of an ag society.

Meantime, the society will focus on the promotion of regional agriculture.

With the change, the ag society would be eligible to receive $550,000 annually from provincial grants and fundraising.

The change in name is required to meet Alberta Gaming and Liquor and Cannabis (AGLC) regulations.

The city will be the sole shareholder of EventCo. and will be responsible for governance.

Annual operating cost

In December, city council voted to continue with the operations of the Agri-food Hub and Trade Centre for at least the next two years.

At the time, council voted to cover the $4.1 million annual operating cost using council contingencies and one-time funding.

Council deferred a 1.4 per cent property tax increase to 2027.

“If you look at the whole umbrella of this and the MCC structure, is reducing the city contribution of funding and as I’ve mentioned a number of times in the past, it’s going to take a number of years to get there,” said Mathews.

As part of the recommended changes, the ag society will establish new shareholders and elect a community board by the end of the summer.

Current staff employed by the LDE could be hired by EventCo.

“We’re at step 300 of 3000 right now so there’s a number of things to work through in terms of the current employee structure,” said Lloyd Brierley, city manager.

Other changes could happen in the coming months, including a new name and branding for the MCC.

Financial fallout

The recommendations follow a third-party review done by Deloitte Canada to find what went wrong in the financial fallout of the LDE.

The review revealed significant issues across five key areas: strategy and planning, project execution, governance, use of funds and council communication by LDE throughout this project process.

The report, which was shared at a standing policy committee meeting in November, suggests unclaimed management expenses, unsupported strategic plan targets and inconsistent project budgets to be leading factors behind the LDE’s financial troubles.

In 2023, it was discovered that despite the project being completed, the LDE was experiencing significant financial challenges and was on the verge of having to shut down operations.

The LDE approached the city and province for additional funding for construction but was declined.

As a result, the LDE board was dissolved last December, and the city and Lethbridge County took over operation.

This review was a part of the Memorandum of Understanding (MOU) signed between the City of Lethbridge and LDE earlier this year, which also included the city agreeing to fund the 2024 operations and assume governance of LDE.

“This is really about turning those challenges into opportunities, while recognizing the importance of agriculture to the community and surrounding region,” said Brierley.

The Deloitte report has been turned over to the economic crimes unit of the Lethbridge Police Service (LPS) to investigate this matter.

The recommendations will go to a city council meeting for further consideration and approval.

If approved, there is no additional cost to the changes.