"The relationship [of TCL] with HRM is governed by a 1981 operating agreement that does not reflect changes in the organizational structure and operations that have occurred over the past 30 years," reads the executive summary of the audit. "The focus of the original agreement was the construction of the Metro Centre. The original agreement needs to be updated to incorporate changes that have occurred over the past 30 years. Specifically, it should address the establishment of Ticket Centre Atlantic for ticket sales, distribution of commissions on ticket sales and the maintenance expenses needed to support the aging structure."
The actual agreement was signed on May 14, 1982, not in 1981 as reported by the auditor. You can see it here; note the hand-written addition of a clause on page 5 saying that profits from the Metro Centre should accrue to the city.
The 2010 audit said that resolving the ticket issue was a "high priority," and made the following recommendation (#3 in the audit):
TCL and HRM need to update the 1981 operating agreement to reflect current practices and operations. The agreement should also define the organizational fit for Ticket Centre Atlantic, the disposition of ticket sales and the distribution of commissions received from ticket sales. The operating agreement must include the level and nature of reporting that needs to be provided to HRM with respect to the Metro Centre operations.The provincial 2010 audit recommendation was given to TCL executives, and the auditor reported their response:
TCL acknowledges the observation and will begin exploratory discussions in the next months with HRM on their position with respect to updating the operating agreement between the parties.But, as we now know, no changes were made to the ticketing operations, and two years would go by before the city's auditor general, Larry Munroe, Wednesday made essentially the exact same recommendation as his provincial counterpart (page 13):
3.3.1 On the basis the present ticketing arrangement continues, the OAG recommends HRM negotiate a contract with Trade Centre Limited governing commission payments for tickets to Halifax Metro Centre events. This negotiated commission structure should follow from a full and robust assessment of all possible structures (i.e. including possibilities such as minimum charges or profit sharing, with the best value to HRM being the goal) and reflect the substantive business received from the Halifax Metro Centre. It should not simply be an exercise in documenting the current arrangement.So what happened? How is it that in 2010 the provincial auditor stressed that the ticket confusion was a "high priority," and that management agreed with that assessment and would begin resolving it "in the next months," but no changes have been made two years later?
3.3.2 Given the circumstances which gave rise to the existing arrangement, the OAG recommends any revised commission calculation be applied, to the extent possible, retroactively to April 1, 2006.
I put that question to TCL spokesperson Suzanne Fougere. Her response:
We did some work internally in Trade Centre, in relation to our position on the matter, and the discussion did start with HRM, but at the time there was also the on-going discussion related to the convention centre, which would've coincided with some of the same time frame. And HRM expressed an interest in looking at the matter in the future in conjunction with the governance of the new convention centre as well. Now obviously that changed with the subsequent report from Larry Munroe related to the concerts [that is, the June, 2011 report on the concert scandal].I asked Fougere for documentation of that claim—an email conversation, whatever, demonstrating that in fact that the city asked for a delay in resolution of the matter. She replied that the person responsible for the documentation isn't in the office today, but she'll get it to me as soon as possible. Still, "that's our position on the matter," she says.
I have a call out to the city on this as well, but I expect it'll have to wait for comment until Fougere gives me some meat to back up her claim.
As I said this morning, there's a lot of passing the buck going on here. If the city did in fact ask for a delay, it raises first of all the question: Who is "the city," exactly? And, secondly, under what authority was this "high priority" matter delayed? Still, I don't think it absolves Trade Centre's Fred MacGillivray, who retired on April 1, 2009, of primary responsibility for lifting the Metro Centre box office, but does indeed add a degree of nuance.
See the entire 2010 TCL audit here.