The decision on how to get Sundre arena operations out of debt, if at all, is being left up to the next council that will be elected Oct. 21.
During the regular meeting on Sept. 16, council members tabled discussion on five cost-saving options for the arena proposed by administration until a governance meeting on Nov. 12.
Coun. Paul Isaac was opposed to the tabling motion, stating he wanted the issue dealt with.
“I opposed that motion because that motion also stated that at this point in time we're running about $100,000 deficit and if we're conscious about the money in our town as a council, I thought we should at least discuss that. Tabling it just puts it off,” said Isaac.
Administration estimates the arena will be in a $93,933 deficit for 2013.
During the Aug. 12 governance meeting, council requested administration investigate cost-saving measures and present them to council.
Five options were presented to council on Sept. 16.
One of the options is that the Town of Sundre continues to own, manage and operate the arena, but reduces operating hours and staff.
The deficit for 2014 would be lower than 2013 by operating the arena 77 hours a week as opposed to the current approximately 112 hours a week.
As well, there would be three arena operators, rather than five.
Another option is for the Town of Sundre to own and manage the facility but contract out the operations of the facility.
If the town maintained expenses and paid a contract, with 2013 arena revenues projected at $276,370 and projected expenses at $290,390, the deficit would be $14,020. And money would have to be found to pay the contractor.
Or, if the contractor acquired expenses within the contract, projected arena expenses would be $174,876, leaving $101,494 leftover, minus the contract.
Another option is for the Town of Sundre to own the arena and manage the contract of management and operations of the facility. This would bring projected arena expenses to $168,790, leaving $107,580 leftover, minus the contract.
Or, a third party could own and operate the arena and the town would provide an operating grant, similar to the arrangement between the town and the Aquaplex society.
Finally, a third party could lease and operate the facility, similar to the arrangement between the town and Alberta Health Services or the funeral home.
Included in all stated revenues is the allocation of $150,000 from recreation funding created in partnership from Mountain View County and the town.
According to a report to council from Jacci Hager, the town's manager of community services, and Doug Wright, chief administrative officer, if council chooses to contract out the arena operations, then service levels in the public works department would be impacted.
“Currently, community services staff are utilized for snow removal, street sweeping, flagging during a dig or large project, and this allows the public works department to minimize their staffing levels and overtime requirements,” reads the report. “Is council prepared to adjust service levels or hire additional staff in public works?”
As well, it states that contract negotiations require both staff time and legal assistance. It says legal assistance could cost anywhere from $10,000 to $50,000 depending on contract negotiations and complexity.
The town currently receives $500 from the Sundre Minor Hockey Association for its use of the concession.
“A contractor may express their interest in the operation of the concession as an additional revenue source within their contract. Is the Town of Sundre willing to terminate or renegotiate the concession agreement with Sundre Minor Hockey as part of the operations of the facility?”
Within the recreation funding agreement between the town and the county, there are no set parameters regarding the disbursement of the funding, according to the report. However, it says that it may spark a discussion, if there is a change in operational service delivery from municipal to private.
Also, depending on which option council chooses, town assets such as the Olympia, edger and floor machines, would have to be sold to the contractor or their use or maintenance would have to be negotiated into the contract.
In each opportunity, the town must maintain and pay for its insurance policy for the arena.
During the council meeting, Wright suggested council take time to really think about what would be the best option, which is why council referred it to the next council.
“I think this is something that we have to look at carefully and really think about it,” said Coun. Pat Toone.
Coun. Tony Jordan agreed and said there is a lot of information in the report to take in and consider.
Earlier this year, council approved increasing arena user fees by $5 per hour, which will be effective in January 2014. This will help to alleviate the deficit, but not to the extent that is needed.
Administration officials are in discussions with all of the arena's user groups, including the schools, to provide the best ice time to each group. This includes drop-in times, public skating and sticks and pucks.
Current cost-saving measures in place include the replacement of the Olympia planned for 2016, which will save on vehicle and equipment repair and maintenance.
Also, there are potential arena upgrades and renovations planned for 2015, which will save on building repair and maintenance and utility costs.
“Increasing revenue through rentals of the facility, both the ice surface and the clubroom at full rental price, will assist in closing the gap between revenues and expenses,” said Hager, in a report to the governance meeting on Aug. 12.
“Increased revenues may be found through additional advertising spaces at the arena, increased ice usage during the winter season, increased dry surface usage during the summer season and increased usage of the clubroom.”
"I opposed that motion because that motion also stated that at this point in time we're running about $100,000 deficit and if we're conscious about the money in our town as a council, I thought we should at least discuss that. Tabling it just puts it off."Paul IsaacSundre councillor
