Local officials have decided to research the possibility of contracting out servicing the Sundre Arena in an attempt to mitigate the facility's rising operational costs that have resulted in large part from a drop in user fee revenues.
"I really believe we should look seriously into it," said Coun. Nolan Blatchford, who raised the issue for discussion during council's regular Feb. 13 meeting.
"Maybe it'll save us from having to hire more people," he said, adding the move to contract out the arena servicing would also free up the time of some town employees whose efforts could then be refocused elsewhere.
Other municipalities such as Cremona, Caroline, Bowden and Torrington have contracted out the servicing of their arenas to organizations like agricultural societies, he said.
"Those are the four (municipalities) I know off-hand. So when I hear it won't work, it does work in other communities. So I think we should really look into it. There's a potential cost savings there. I know it's a big grey elephant that building ó it costs a lot to operate it ó so any savings would be good."
Mayor Terry Leslie acknowledged the effort of Vic Pirie, director of finance and administration, who prepared and made available to council a spreadsheet comparing costs between what Sundre and Mountain View County contribute to the local arena.
"Typically, in the last three years, the numbers have been really quite similar, but there's a dramatic increase in 2017-18 for the cost associated with arena operations borne by the town, where the county's contribution remains relatively the same," the mayor said, asking the director of finance why that was the case.
Looking back over the past several years, Pirie said what had happened was the total budgeted revenues at the arena went down to roughly $239,000 in 2017 from about $377,000 in 2013.
"And the reason for that is when we take a look at our revenues, what's causing the drop is basically the user fees," the administrator said.
When the municipality was forecasting user fees for the arena from about 2013-15, roughly $115,000 was budgeted, he said.
"We never actually ever achieved that level of revenues. In 2016, we were projecting $90,000 and when I looked (at the numbers) prior to the meeting, it was $94,000. So it's dropped from, at one time, $116,000 down to $94,000."
For the next two-year budget cycle of 2017-18, the user fee revenues were projected at $87,000 and $90,000 respectively, he said.
"What's happened is our revenues have dropped, primarily in the user fee component of the budget."
Meanwhile, expenses associated with the arena's operations have stayed relatively constant over the past number of years, he said.
"Our expenditures have stayed fairly constant, but our revenues have dropped. And as a result of that, the taxpayers have been picking up the shortfall in the revenues."
Recent budgets have included 50-50 cost sharing with Mountain View County, but because the projected revenues did not materialize, Sundre taxpayers ended up supporting the arena more, he said.
"So when we developed the 2017-18 budget, we adjusted the user fees to reflect what our actual revenues have been over the last couple of years. So you're seeing a substantial increase in the net cost to operate that arena (primarily) because of a reduction in revenues."
The mayor inquired whether there had been a consistent reduction in projected revenues over the past few years since the 2013-14 budget.
"In just looking at the arena, yes," said Pirie.
"Our primary source of revenues is in the user fees that come in from the various groups that use the facility. And those have consistently been reduced over the last four years roughly," he said.
Coun. Chris Vardas inquired in what way the user fees had dropped.
"Is it the scheduling that we're doing on the arena for the ice time? Why are the revenues dropping?" he said.
User fees are based on ice time, so as the use of the ice is reduced, there is a reduction in revenue reflected, said Pirie.
"Even though the (user fee) rates have increased, the usage has decreased, resulting in a net reductionÖwhat we're seeing is less ice usage that we can actually bill out."
There are additionally difficulties with late cancellations of ice bookings that don't generally allow sufficient time to reschedule another user to make up for the lost revenue, he said.
Vardas said there is still roughly the same number of user groups that want to use the ice.
"That's what I'm trying to wrap my brain around ó is it the hours that we're using that are available that aren't good for the user groups?"
The councillor said if the municipality is going to be losing money on user fees, "maybe we should really entertain the (possibility) of having a contractor deal with the ice."
Coun. Myron Thompson agreed the possibility of contracting out the servicing of the arena's ice should be investigated.
"We need to have this kind of discussion. We need to get all the facts out. We need to know what it involves to contract versus not contracting," the councillor said.
But that decision requires more information, he said.
"We don't know any of the details."
The councillor said the issue was not about to be resolved then and there at the meeting, and suggested scheduling a workshop to consider options and information compiled by administration.
"Give us a full picture, lay it on the table and let's see how that fits in our town. We can do that, and I'd love to participate in something like that. But I don't like participating in a discussion when we don't even know what the hell we're talking about!"
The mayor said council's discussion at hand was the first step in that process. Moving forward, administration requires more specific direction in terms of what kind of information to investigate.
"If we were to have a contract, what should it include?"
Some factors that should be considered in such an arrangement include who would own the ice-resurfacing equipment and be responsible for its maintenance as well as who would be responsible for providing liability insurance, he said.
"That would take some time for administration to go and ask those questions," said Leslie.
