Stassen: Costs being cut, but boosting activity and revenue is a major focus.
Before it became clear years ago that the Civic and Sports arenas downtown were not in the city's long-term hockey and skating facility plans – and, therefore, investments in maintenance and upgrades were significantly scaled back – the city's general fund subsidy to balance the budget at the two facilities approached $400,000 a year.
Everyone knew that the bigger, three-sheet Crookston Sports Center, even with its superior energy efficiency and technology compared to the previous facilities, would also require a big city subsidy every year to balance the books.
But in 2014, that subsidy is projected to approach $750,000, which is bigger than was ever envisioned. Without implementing any cost-saving measures at all, however, that figure will drop by around $158,000 a year in 2016, when the city makes its final debt service payment on the $2 million in new market tax credits that helped make the construction of the facility possible. Still, that will leave an annual subsidy approaching $600,000, which, Ward 1 City Council Member Tom Jorgens said Thursday evening at a Ways & Means Committee meeting with members of the Crookston Blue Line Club at city hall, "Is not sustainable over the long-term."
City Administrator Shannon Stassen said after the meeting that some cost-saving measures are already being implemented that he believes will result in this year's operations deficit being less than the $750,000 currently projected.
The city is looking to save more money, too, and that's mostly what spurred Thursday's meeting. The primary goal of the meeting was to address the city's concessions contract with the BLC, since the BLC owns the concessions equipment at the CSC and operates the concession stand during the hockey season from Oct. 1 to March 31. But after almost two hours of discussion, everyone around the table seemed to agree that altering the BLC's concessions agreement with the city won't amount to a major elixir when it comes to the CSC's budget woes.
"I think a lot of people seem to think that there's big money in concessions but there's not," Ward 3 Council Member Gary Willhite said. "I mean, $12,000 (last year's concession revenue) is not a lot of money for all the work your families put in."
"We only make money because our family volunteers work their butts off," responded Rich Sanders, who attended the meeting with fellow BLC member Steve Erickson.
It appears, Stassen said, that the city will ask the BLC to pay for their utility costs, mostly electrical, to run the concessions stand, which amounts to around $8,700 a year. Another goal is to potentially increase concessions-related flexibility for those who want to put on events, whether they're on the ice or not on the ice, within the hockey and skating season, or during the off-season. (The final sheet of ice, in the Blue Arena, will be melted after the BLC's final summer tournament during the third weekend of June.)
Specifically, council members asked Erickson and Sanders and the BLC as a whole to sit down with the Crookston Figure Skating Club to see if there are ways the skating club could partner with the BLC on concessions and in the process boost revenue for the figure skating program. Currently, no skating competitions are held in Crookston, mostly because the local club lacks the revenue to make it happen. With 187 current kids in the figure skating program, the thinking also is that having figure skating families involved in concession stand operations – specifically, volunteering to work at the stand during the hockey and skating season – will decrease the current volunteering burden on hockey families, which some think reduces the number of families who let their kids play hockey.
While the perception among many might be that the Figure Skating Club has long wanted to be involved in concessions at the CSC, Sanders, in saying that the BLC would certainly be willing to talk to the skating club, stressed that no one from the skating program has ever approached the BLC with a proposal. "Is there an agreement that could be worked out to the benefit of both of us?" Sanders said. "Maybe there is, but you have to come to the table and ask. We've never been asked. I'm sure there's a way for the figure skaters to make some money, but no one has ever approached us to have that discussion."
While everyone is looking to reduce the CSC's expense budget, Sanders stressed that the BLC puts the money it makes directly back into the hockey program in order to purchase ice time and keep participation fees for families reasonable and less expensive than in neighboring cities. "Every dollar you take from us, that's a dollar we can't invest in the youth hockey program," he said.
Most seem to understand that, and that's why Stassen is stressing that enhancing the CSC's revenue ledger is as much of a part of the strategy going forward than reducing costs. A CSC marketing task force that met last year and came up with an extensive list of potential events, activities and programs at the CSC – the very successful curling program among them – needs to have its work revisited immediately, Stassen said, to "make that facility as busy as possible for 365 days a year."
Enhanced advertising opportunities will also be explored. In addition to giving the city 30 percent of its net concessions profits, the BLC is contractually obligated to give the city half of the CSC's advertising revenue. Last year, the former amounted to around $3,000 and the latter amounted to around $17,000 being given to the city by the BLC. In addition, the BLC paid around $50,000 for ice rental from April to June and in September.
As for what's next, Stassen said the city will present their contractual proposals to the BLC for the club to discuss. Once some headway is made in that area, the city administrator said the focus will expand and everyone who uses the CSC will be invited to the table to discuss ways to maximize the CSC's potential and boost revenue in the process, while always looking at ways to pinch every penny.
"Figure skating, the high school, UMC, curling...everyone that uses that facility or cares about that facility, we need to talk about ways to keep generating more traffic and in the process generate revenue that everyone can benefit from," Stassen said. "From the city standpoint, yes, we're looking to reduce that subsidy. But I'd prefer to do it through revenue and not focusing predominantly on cuts."