Talks get heated over arena’s ongoing cost [UPDATED]Published 11:24am Wednesday, January 18, 2012 Updated 11:55am Wednesday, January 18, 2012
The mood was tense at Monday night’s city council meeting as council members discussed the use agreements for the community ice arena. A particular sticking point was whether every entity using the ice is paying its fair share.
The conversation started when Finance Director Bill Sonmor presented the city with use contracts with the Fergus Falls School District, the Fergus Falls Hockey Association and the Fergus Falls Skating Club for the 2011-2012 skating season.
The council eventually decided to approve the contracts pending final modifications discussed with the organizations, but not before a heated debate over what the city’s role is in paying for the arena’s operating cost.
Alderman Scott Rachels said the city’s financial stake in the operating budget will be seen as akin to “subsidizing” the arena and said the hockey association should be paying more of the operating costs.
“The school stepped up, but the hockey association, they aren’t stepping up,” said Rachels.
Using previous budget numbers, Sonmor came up with a rough estimate of $305,568 for the arena’s 2011-2012 season operating budget. That will be tweaked in the coming years as real costs come in.
“Two or three years from now we will have a better idea of what this building will really cost,” said City Attorney Rolf Nycklemoe.
Of that estimated budget, the contracts stipulate that the school district pays 33 percent of the cost (roughly $101,000), the hockey association pays 38 percent ($116,000), and the skating club pays 11.5 percent ($35,000). The city picks up the remaining 17.5 percent ($53,500).
Under that arrangement, said Sonmor, the groups were charged based on usage time and on who gets time in “prime hours.” The city then covers open skate and open hockey costs, and it would also fund the men’s leagues (with fees from the players).
“I don’t think taxpayers were looking forward to paying the operating part of it,” said Rachels, pointing out that the operating expenses of the arena were covered by the other entities using the facility when the city leased the Fairgrounds Ice Arena.
The city did pay a lease of more than $20,000 for the former arena, Alderman Eric Shelstad quickly pointed out, stating that the city has always had an ongoing stake in an arena.
“Why should we get it free?” Alderman Jim Fish chimed in. “We need to be billed for that time also.”
However, Rachels encouraged them to put themselves in taxpayers’ shoes.
“That’s what the average Joe is going to think: we’re subsidizing it,” he said.
He singled out the hockey association as one group that could contribute more to the operating budget, saying that the school district is paying $17,000 more for the new arena while the hockey arena apparently didn’t adjust its budget, even though the city had told the group that the new arena might cost more. He also pointed out that the hockey association will be using more of the arena’s ice time (about 43 percent overall) than the 38 percent of the budget it’s paying for.
Some aldermen were unhappy with that line of reasoning, particularly JoEllen Thacker.
“That really irritates me, because if we didn’t follow this procedure here we’d be asking the hockey association to pay for the open ice time, and to say that they haven’t stepped up to the plate when they’ve raised almost $4 million — I just think that had to be said,” she said.
Rachels responded that the community raised that $4 million, not just the hockey association.
One reason the school is paying more for the arena is because the school is also using more ice time than it has in the past (for physical education), while the hockey association is using the same amount. Sonmor added that it’s hard to know for sure how much the hockey association was paying in the past because the association also paid the city for the men’s leagues and the skating club after those groups paid the association (that arrangement is not allowed anymore under the requirements of the bonds used to fund the arena).
“We were trying to come up for a fair mix for everyone,” he said.
City staff pointed out to the council that the contracts are approved each year, and the council can change them in the years to come. Still, Rachels voted against the contract with the hockey association.
The Fergus Falls Hockey Association issued a prepared statement: “We respect the city council and greatly appreciate its decision to enter into a user agreement with our organization. We feel the user agreement is appropriate and fair in all aspects including cost to all users. We are thrilled to be a part of the new Community Arena and thank all those involved with the process. With regard to any comments made by Councilman Rachels that may have been construed as negative to our organization or its efforts, we have no comment.”Tags: ice arena