First we would like to thank the Simcoe and District Minor Hockey Association for their recent letter related to the plans associated with Norfolk’s recreation facilities, specifically our arenas. We know that this is a significant issue in the community and to your organization specifically. We hope that you take this letter as an initial response to your organization as well as an invitation for your organization to continue the dialogue with our staff on this important issue in the community. We hope that you will share this response with your organization and its members.
The following provides a summary of the key issues as well as address a number of your concerns that were raised.
The Financial Situation
The state of Norfolk’s financial situation has seen significant discussion in the media so I do not want to discuss this extensively, however staff and Council undertook an approach that saw both a very significant increases in property taxes (more than 8%) while also looking to trim approximately 2% in expenditures over two years in order to address these challenges. The goal of staff and Council is to focus on the long term sustainability of the County and its services, so that there is greater certainty as to the provision of these important services for years to come rather than just for the next year or two. The financial and infrastructure challenges of the Community will not be fixed with one budget and this will be a multi-year challenge for the County.
The Importance of Arenas and Recreational Services
Staff and Council recognize the importance of recreational services and arenas for the community. In 2019 the total expenditures for arena operations was approximately $3.031 million and total revenue provided by the users was $1.055 million, as such $1.976 million of the cost of arenas were supported by the tax levy (the property tax payer). For the 2020 budget year Council has budgeted expenditures just under $2.85 million, with tax levy support of approximately $1.77 million. As such there is still a significant commitment by staff and Council to fund arenas, however the intent is to reduce the amount of total taxpayer funding for the arenas in 2021 and future years. Additionally, there needs to be a longer term solution for the funding of the significant capital costs associated with arenas including equipment replacement as well as major facility repairs.
Staff and Council are fully aware that the operation of arenas will not break even or make money. The challenge is ensuring the right balance of tax levy support and revenue from user fees for the arenas.
The Simcoe Recreation Centre Decision
The removal of ice from the Simcoe Recreation Centre was a multi-faceted decision. The County also faces a significant challenge with the Seniors’ Centre in Simcoe. The facility is in desperate need of critical repairs and cannot be relied upon to provide services to seniors, in fact parts of the building are currently closed for health and safety reasons. This is not a situation that the County could delay in dealing with. The transfer of senior services to the Recreation Centre is being done to address this critical issue while the County awaits on the decision of the funding for the All Norfolk HUB. It should be noted that even if the County is successful in this application it would be years before the seniors could be moved into the HUB and this was too long to wait.
The County understands that this will place more pressure on ice demands in Waterford, Port Dover and in Simcoe’s Talbot Gardens and as such this was a difficult decision. However we believe that with user group cooperation appropriate accommodations can be made for the user groups.
Future Closures or Operational Changes
There are no decisions for the closure of an arena in the near future or for any other changes at this time. Future decisions related to arena operations are to be debated by Council in the fall. Staff will be running a process to solicit options from the community to look at reducing the total amount of tax levy support required for arena operations as well as looking for a solution for the long term financial support for arenas.
Potential Impacts to Operating Models
Your letter indicates the potential move to a Private Arena Management option. Though no option will be excluded at this time it is doubtful that a private for-profit enterprise would entertain the operation of one of the County’s arenas due to their physical state and operational performance.
Staff are currently working on the RFP process. The RFP process will be approved by Council as will the final recommendations from this process (if any). The focus of the RFP is to provide options to look for new ways to engage partners in ensuring the long term sustainability of the arena. There will be an option for a party to partner with the County to operate an arena under a license arrangement with the County. This arrangement will contain a number of restrictions and control elements to ensure the operations benefit the Community as a whole. If a party is selected to operate an arena, the County will continue to support this group with a limited and fixed amount of tax levy support. This provision of support provides the partnership structure and allows the County to have operational influence.
A second option under the RFP is to look for community groups to partner with the County to provide additional financial resources or additional revenue sources for the arenas. This is similar to practices in the County in the past where community service groups such as the Lions or Kinsmen pulled together community resources in order to fundraise for recreational facilities and operations. The County will be looking for creative solutions from user groups and community members to partner with the County to address the long term sustainability of arenas. Additionally, if there are solutions that fall outside of these two broad categories staff and Council will consider other suggestions under the provisions of an unsolicited proposal.
Impacts to your Organization’s Planning and Budget Process
If there are any future changes to the operation of the arenas any previous commitments related to user groups, such as rates or hours of ice time for the arena season (2020/2021) would be accommodated within the new arrangements. As such your organization should undertake its planning and budget process as in prior years.
We recognize that the operational impacts related to the closure of the Simcoe Recreation Centre will impact your plans and we encourage you to work with staff to minimize these impacts.
Impact of Hockey Canada Changes
Changes by Hockey Canada has impacted arenas in a number of ways. The movement to half ice for younger players as well as implications associated with reasonable accommodations for transgender youth place greater demands on change rooms at each of our arenas. The County’s long term capital plan has recommendations for additional capital expenditures to create more change room space to accommodate this increased demand, however this just adds to the existing financial pressures on the arenas.
The intent of Hockey Canada’s changes is to provide improved skills development for youth players and the County believes that by working together with Hockey Canada and your organization we can meet the intent of improved skill development without unduly burdening the taxpayers of the County.
Tournament & General Usage
The County supports the use of the facilities via tournaments due to their economic benefits and increased utilization of County assets. The County feels that existing tournaments can be accommodated with co-operation of the user groups and by looking to utilize all of the County’s assets. There is the opportunity for greater use of the combined facilities. Total utilization of the County’s six arenas has remained relatively steady over the last three years:
2017 – 9,840 hours of total combined ice usage
2018 – 9,811 hours of total combined ice usage
2019 – 9,551 hours of total combined ice usage
User groups need to be aware that the amount of ice that is booked by major user groups and then returned within the 72 hours notice deadline totaled 994 hours of unused ice during the 2019/2020 season thus far. These are hours become unmarketable to other user groups as there is not enough time for County staff to solicit other users.
Additionally, as the County looks to re-focus its Economic Development and Tourism strategy, increasing the support for sports and recreation tournaments that generate over-night hotel demand will be of significant interest to the County and we will hopefully be able to work with your Association on this.
We understand that these changes are difficult for your organization but I would like to stress that the County is trying to act appropriately balancing a number of competing demands while developing a longer term strategy to correct the financial difficulties of the County and ensure long term sustainability. We look forward to working with you and your organization to provide quality services in a sustainable manner in the County.
Bill Cridland, General Manager