Hay River (Nov 15/04) - The Royal Canadian Legion in Hay River is an impressive-looking building -- from the outside.

Looks are deceiving, however, says Branch 250 secretary Peter Osted. While it's not in imminent danger of closing, the Legion faces financial problems, including the fact its lottery licence has been suspended by the Town of Hay River.

Peter Osted, secretary of the Hay River Legion, says it is on the financial edge; not in imminent danger of closing but facing some serious money problems. - Paul Bickford/NNSL photo

"We're going to run on the edge until we can get some of these problems sorted out."

The building is so impressive because of earnings from Nevada tickets and bingo.

"It looks like we're a rich outfit, but any money we make from Nevadas and bingo has to be spent on major projects on the building or given back to the community," Osted explains. "We can't spend any of it on operation and management or salaries or anything like that."

Under town rules, 45 per cent of the lottery earnings must be donated to charity, 45 per cent must go to a building fund and 10 per cent can be used to administer Nevada sales and bingo.

The Legion takes in well over $100,000 a year from Nevada tickets and bingo, Osted says, noting that, in 2002, it donated $54,655 to 45 groups.

Operation and management funds -- for things like fuel, power and salaries -- have to come from the kitchen, catering and the bar, he says. "That's where it becomes precarious."

In 2002, the Legion's income -- not including Nevada tickets and bingo -- was just over $400,000. Its expenses were a little more than that.

The biggest expense was salaries paid to nine staff, three full-time and six part-time.

Better arrangements

Legions elsewhere in the NWT appear to fare a little better.

The Legion in Fort Smith is doing OK, says manager Dennis Rolfe.

The Town of Fort Smith allows Branch 239 to use 10 per cent of its lottery earnings for general operations.

Of the remainder, 10 per cent goes into a building fund, 60 per cent is donated back into the community, and 20 per cent is held in a lottery account.

"Our town, they do help us out a lot," Rolfe says.

In 2003, $62,000 was donated to community groups by the Fort Smith Legion.

It does not hold bingos, but sells Nevada tickets and has weekly meat draws.

In Yellowknife, Legion manager Lorne Power says the city allows Branch 164 to retain 45 per cent of net gaming revenues for operation, maintenance and capital works. Of the rest, 45 per cent must be paid out to community groups and 10 per cent must go to sports.

Salaries are not paid by lottery income.

"We're finding in very difficult to work within 45 per cent," Power says, noting a request was made to the city over a year ago to increase the percentage retained by the Legion.

Power notes Legion branches in Alberta are allowed to retain 80 per cent of their lottery earnings.

In the fiscal year ended Aug. 1, 2003, the Yellowknife Legion donated $250,000 to charity and sports, but that number decreased to $160,000 the following year. Power blames the drop on the city's smoking bylaw which meant fewer patrons at the Legion.

Accounting problems

The Town of Hay River suspended the lottery licence for Branch 250 because accounting wasn't up to the town's standards, Osted says, explaining the Legion has had problems keeping a manager.

It is uncertain when the licence will be returned, he says.

Mayor Diana Ehman says an arrangement has been reached between the Legion and town administration to clear up the matter, although the details have still to be worked out.

"The Legion came to us to discuss it," she says. "They're an honourable organization and we respect them."

As for the Legion's wish that lottery proceeds be available for operation and maintenance. "Basically, what they're asking us is not in our power to grant," Ehman says.

Sad state

Georgine Stark, an associate member of the Hay River Legion for five years, says the organization is very important. "It's sad that it's in such a state right now," says the daughter of a Second World War veteran.

Howard Kipling, a former member of the air force, has been a Legion member for 35 years.

"They do a lot for the community," Kipling says. "They make money and they contribute money. I think they should be able to keep it up."

Kipling doesn't believe the Legion's positive impact on the community is fully understood or appreciated.