Downtown London budget breakdown 'raises more questions': merchants

The London Downtown Business Association released Thursday a detailed breakdown of its finances after its members voted down the association's proposed 2019 budget and demanded clarity over spending.

The move comes two days after the $1.9 million budget was defeated at a tense annual general meeting. Board officials had intended to provide a detailed budget prior to the meeting but failed to do and instead presented a condensed overview.

"I hope we provide some clarity to the members," said board chair Gerald Gallacher.

However, some business and property owners said the document released Thursday was "disappointing" and lacked detail. Among them is Sandy Weir, the owner of Smooth Wax Bar on Richmond Street. 

"The budget that was shared continues to remain very high-level and doesn't allow the members to properly assess how the money is being spent or invested. And in its current form I would say it raises more questions than answers," said Weir, who is also a former board member.

Concerns with budget

The membership pays its levy fees every year through taxes. This year, the budget suggested a zero per cent increase with money being reallocated to support initiatives in 2019.

Lisa Ferguson, owner of Hangar9 on Richmond Street, said the document "leaves more questions than answers."

She said she wants to understand why the association is spending $11,000 on office furniture and $16,500 on purchase and leasing equipment.

"It's still lacking transparency," she said.

"We all work very, very hard for our money. There's so much that we see that needs to be done. We are not sure as shareholders and merchants that we are being taken care of, that our money is being spent on what it needs to be spent on," she added.

Weir said some expenses seemed excessive, such as $18,000 for training and conferences and $20,000 for its annual general meeting. "There seems to be excessive spending for perceived value," she said.

She said there's money allotted to communications and marketing campaigns but there's no breakdown of the actual initiatives.

And it's not the first time Weir has demanded clarity over spending. She sat on the board in 2018 before she resigned due to a "lack of transparency on financials," she said

When she was a board member, she made a request to see the breakdown of some finances but it was rejected by board representatives. She said she wasn't provided an explanation.

She said her curiosity was sparked after Downtown London spent about $600,000 on Live Work Learn Play, a Toronto consulting firm hired in 2017 to help get more storefronts in the core.

On Thursday, the association announced a new feedback email that would collect concerns and questions about the detailed budget. The board is set to answer those questions sometime in February through an email blast to members.

There will be a board meeting open to members held later in February.

Budget goes to city hall

Despite membership voting down the 2019 budget on Tuesday, the document will still go before city councillors for discussion and approval.

Right now, there are bylaws in place under the Municipal Act that require the association to provide the proposed budget  to city politicians no later than Friday.

Gallacher said members had the chance to discuss the budget however councillors get the final say.

"Those are the current operating bylaws by which we are operating under… which is why we are undertaking the review of all the bylaws and operating procedures and policies," he said.

The board announced at the annual general meeting a new ad hoc committee that would review its nomination and voting practices, as well as some of the bylaws affecting members. It was struck after a legal push from about 140 businesses.

Weir and Ferugson both said they hope city councillors reject the proposed budget.