There are still questions about the exact level of loss incurred by the Challenge Penticton triathlon in its inaugural year, but Mayor Garry Litke admitted Friday the city has stepped in with financial aid.
On Wednesday, the Western News revealed the Penticton Triathlon Race Society is dealing with a serious financial shortfall, which Litke confirmed, explaining that the City of Penticton had co-signed on a line of credit for up to $200,000 to cover the losses.
Litke said the largest portion of the debt was due to a mandate from the Challenge Family parent organization, which insisted that any athletes who withdrew from the race have their $675 registration fee refunded.
“That will never happen again. That was one time only and it was $135,000, a huge hit,” said Litke. “The athletes themselves were astounded by that. That came from the Challenge Family as a condition so this board had to swallow that. Not happily, that’s for sure.”
That put the race society in a financial hole, along with other costs incurred setting up the race. According to Litke, there were a number of “one-time purchases” for items like barricades and fencing.
“There are bills coming in and there is not enough registrations coming in to pay the bills,” said Litke. “That’s not unusual, and because there are cash flow problems and the society needs to have some money to operate … they came to the city and the city has offered a line of credit of up to $200,000.”
The race society’s fiscal year end was Oct. 31 and Litke said the financials are still undergoing the audit mandated under the B.C. Societies Act.
“The city is responsible for backstopping any financial shortfalls that are experienced by the board,” said Litke. “This is not new, we did this with the SS Sicamous a few years ago, when they got into some financial difficulty. We had to backstop them with a line of credit for $50,000. We did that and that just got paid off last week.
“It doesn’t mean they will use it all, but it does mean it gets paid back to the bank.”
But the city knew going in, Litke said, that switching brands and abandoning Ironman in favour of the Challenge Family triathlon was going to be a period of transition.
“We knew that Ironman would not be happy and would probably try to exert some competitive corporate muscle and they did, by staging their race on the same weekend in Whistler,” he said. “But there were some surprises. One of them was they didn’t leave any paperwork behind, no files.
“We had no records from previous races, from 30 years of history in Penticton.”
Still, Litke said, the volunteers at the Challenge Penticton Society managed to pull everything together to set up the race in nine months.
“The numbers, of course, were down. We knew they were going to be down but everybody that participated thought it was a great race,” he said. But the post race review showed there were areas that needed to be improved.
“So the next month was spent in making those improvements and that included some personnel changes,” said Litke, referring to the race society’s decision to remove Barb Haynes as general manager and not renewing the contract of race director Lisa Carelton.
Next year’s Challenge Penticton is scheduled for Aug. 24, while the Ironman Canada race in Whistler goes July 27, instead of matching the Challenge weekend, as they did in 2013.