Dear Supervisor Walters and members of the Hamburg Town Board:
On Thursday January 3rd, 2008 I was invited to attend a meeting regarding Jeff Walker’s proposal to expand and privatize our ice facility. In attendance were Supervisor Walters, Councilman Best, myself, Jeff Walker, Steve Holmes (President of the Hamburg Municipal Hockey Association ) and Dave McDermott ( V.P.of the H.M.H.A.). During the meeting the Supervisor requested I prepare a report regarding my thoughts, concerns, etc. on this plan to share with the entire Town Board at the January 14th work session. The following reflects my philosophy, opinions and recommendations on this matter. I greatly appreciate the opportunity to offer input into this matter.
A Brief HistoryThe history of the Town of Hamburg indicates our elected officials have had faith in hiring qualified career professionals in leadership positions to manage the operations of the Recreation Department. Furthermore, those political leaders envisioned an improved quality of life for our citizens as they developed numerous facilities designed for healthy leisure time pursuits. The Recreation Department was created in 1956 and was originally overseen by a part time director. During the late 50’s and throughout the 60’s the Town began conceptualizing future recreation projects and accumulating parkland in order to execute the plans. In 1970 the first full time recreation director was hired . To the credit of that Town Board they brought in a qualified and experienced recreation and parks manager who would be charged with guiding the Town through the process of development and expansion. The Town Golf Course and Ice Arena projects were completed by 1975 and provided new leisure time options for our citizens. From there the department has seen tremendous growth in our program offerings and have seen facilities added and /or improved . With that, the tradition of placing professionally trained administrative staff in key positions has continued to this day. Our current team includes individuals with degrees, certifications and experience in delivering quality public service to the residents and neighbors who utilize our facilities and take part in our programs. The practice of providing credentialed management should offer assurance to our residents that their parks and facilities are watched over with a sense of stewardship and professional dedication.
Please Examine our RecordThe Town of Hamburg Recreation Department is highly motivated in terms of making government more efficient. We are dedicated to providing quality service, while at the same time looking for ways to lower costs for our taxpayers and participants. We have researched and implemented numerous initiatives that have successfully cuts costs or increased revenues. Forming mutually beneficial partnerships , improved marketing, increased advertising sales and an emphasis on customer service are ways in which we’ve improved the bottom line. A notable example of this in the arena operations is the partnership we formed with Skate Great , Inc. for our Learn to Skate program. This relationship has led to a better quality program, much higher revenues, more children involved and increased customer satisfaction.
Please examine the following numbers in terms of demonstrating evidence of our successful fiscal management:
2007 Numbers – All OperationsTotal Revenues…………….$1,139,061.69
Total Spending…………….$1,066,967.92
Surplus Created……………$ 72,093.77
Related Notes
*Record revenues. $92,000 over previous high mark ( 2003). Up over $112,000 compared to 2006.
*First time ever we’ve had a surplus.
*Spending down over $71,000 compared to last year.
*Spending down for the 3rd consecutive year. Over $170,0000 less compared to 2004.
2007 Numbers – Nike Base Operations
Total Revenues………..$419,158.53
Total Spending………..$124,362.97 ( Does not include Buildings & Grounds support)
Related notes
*Record revenues. Over $44,000 over last years record high.
*Revenues up for 3rd consecutive year. In addition to the efforts we’ve made toward increasing revenues we are always looking at ways to do more. Currently, we have been developing a comprehensive naming rights and sponsorship program to further support our efforts. John Livsey, Vice President for Corporate Sales for the Buffalo Sabres, and a member of our Recreation Advisory Board , is spearheading this effort. Bond PaymentThe Town of Hamburg currently owes approximately $900,000 on a bond that was taken out to repair the rink in 1997. The bond is scheduled to be paid off in 2017. This expense has to be included as part of the discussion.
Current “Nike Base” Operation Costs ( Including Buildings & Grounds)The “Nike Base” operations as budgeted include year round charges for programs and maintenance. In this discussion I think it’s important to point out that revenues do not cover all costs, however, users contribute a great deal to offsetting those expenses. The way I look at it is users pay for programs, taxpayers pay for facilities. My question is, do taxpayers mind contributing toward a community facility that benefits youth and families? The answer I’m sure is different for each individual but I’ll bet the more efficient we are the more likely they will be satisfied. Please consider the following in this context:
2007 Buildings & Grounds appropriations ( Spring/Summer)………$356,5212007 Buildings & Grounds appropriations ( Ice Season)……………….289,155
2007 Recreation Department actual spending………………………………124,363
2007 estimated spending………………………………………………………….$770,039
2007 payment toward arena bond…………………………………………………87,438
2007 Total costs associated with Nike operations……………………….$857,477
2007 Spending………………………………………………………………………..$857,477
2007 Revenues…………………………………………………………………………419,159
Difference………………………………………………………………………………$438,318
There are two points I can make using these numbers. First of all, divided out amongst our 55,000 citizens, each individual contributes about $8.00 for this year round operation. That’s $32.00 for a family of 4. Secondly, user fees account for about .50 of every dollar spent. Keep in mind the vast amount of use the complex gets throughout the year( baseball, softball, flag football, BMX racing, soccer, lacrosse, model airplanes, day camp ,Town tots, floor hockey, roller hockey, ice skating and ice hockey).
The Concept of PrivatizingThe arena expansion project as proposed by Mr. Walker would constitute privatization. This idea, if moved forward, would be a major change in how the Town traditionally has done business. My first issue with this is that putting a public facility into the hands of a private manager changes the dynamics of how it is operated. Under public management our focus would remain as providing access for our residents and quality public service. As stewards of the facility we are obligated to see that all of our residents have opportunities to use the facility and programming is implemented with their needs in mind. Under private management the focus would change to profit. This focus could have a negative impact on those wishing to learn to skate, participate in programs for the disabled, play house league hockey and /or enjoy public skates. The pressure of making ends meet could eliminate programs and opportunities for the general public in favor of elite hockey programs or those with greater wealth.
The second issue I have with privatization deals with the question of how we control and maintain costs that are reasonable for our residents. The facility was built for public use, not for the benefit of an individual businessman. A complex of this magnitude will likely have high overhead. Ice arenas have not been developed in this region due to the relatively low market in terms of comparable rental fees. Razor thin profit margins at best are projected when using local figures. How will Mr. Walker be able to guarantee he can keep ice costs within the range of affordability ? Once again, a businessman motivated by profit will likely serve the highest bidder.
Parkland AlienationIn New York State, parkland and public recreation facilities are considered sacred. Regulations are in place that protect the public’s interest in parkland from encroachment, inappropriate development, and profiteers. Actions that would put public parkland and/or facilities in the hands of private management would be considered alienation of such areas. Parkland can be alienated but would require an act of approval by the State Legislature . My research indicates a proposal of this nature would be a clear cut case of parkland alienation. Even if approved, there will be restrictions on a private operator doing business on public lands in terms of how much they can charge. This may effect the operators ability to implement his/her business plan.
Priority ProjectsThe Town of Hamburg Recreation Department is not opposed to building a second rink. It would not be, however, our first priority. The reason I say this is that the Town has already invested heavily in an ice facility and we should spend any future money on a more diversified plan. According to the National Recreation and Parks Association standards, one indoor ice arena is sufficient for a Town our size. That being said, we are aware of the tremendous demand but it is being created by those coming from smaller surrounding towns. In addition, the increased number of ” travel teams” shrinks the amount of children served per hour of ice time.
My suggestion regarding the way to meet the demand is to gather interested surrounding Towns in a regional partnership approach. In exchange for their citizens full access we would divide construction costs and require long term maintenance contracts. We would continue to manage the facility, but have the addition built at the outside users expense. Our maintenance cost could be cut dramatically with shared funding from those new partners.
Private DevelopmentsI have been in contact with two area businessmen who are interested in privately developing a multi-sport complex in Hamburg which would include twin ice rinks. They are currently negotiating with the landowner for the property they desire. I expect an announcement on this proposal within a month. This plan, if executed, would eliminate a need for a second sheet at the Nike site.
Important Questions1. What financial wherewithal, credentials, career experience or skill sets does Mr. Walker posses that would assure the public confidence in his ability to manage this operation?
2. Has this plan been scrutinized in terms of a sound business venture? If Walker were going to a bank with the amount his investor has promised and requested an $8-9 million loan would it be approved? If the answer is no, then why would the Town. For the sake of the taxpayers, holding this plan to bank standards should be imperative.
3. What assurances will the Town receive in terms of public access, pricing, and programs? As stated previously, this facility was built for our residents, not for the benefit of an individual businessman. Can he succeed and serve the public at the same time?
4. Will the Town require the operator to pay rent or just agree that he cover all expenses? Will the bond payment be included?
5. The history of the Town of Amherst’s Pepsi Center should be examined in terms of why it reverted from private back to public management.
6. Would the personal guarantee the Town has been promised be protected in the case of bankruptcy/foreclosure?
7. Will other entrepreneurs have an equal opportunity to submit bids with their own plan?
8. What happens to our summer programs such at day camp, roller & floor hockey leagues, etc. Will we have to pay Walker rent? How will that effect cost to the families who count on us for a supervised summer recreation program?
SummaryI would like to assure the Supervisor and each Town Board member that the Town of Hamburg Recreation Department will continue to strive for excellence in all that we do. Please consider us as team players, ready, willing and able to work with all concerned in providing quality public service in an efficient, cost effective manner.
The question of transferring management of our park and recreation facilities to a private operator is important to the future of Hamburg. There are many factors to consider in making a decision that will have long lasting effects on our citizens. I appreciate the opportunity to offer my views and look forward to additional dialogue on this issue.
Sincerely,
Martin C. Denecke, CPRP
Director of Recreation
The town supervisor is simply following the model of his Republican buddies. This little coup will legitimize Walters with his Republican mentors in Washington D.C. You take stuff out of public hands and put it into well connected private hands and somewhere along the line you end up with donations, high paying unchallenging jobs for your neerdowell neices and nephews and opportunities to further your career either as a lobbyist or a party guy. Look how much Blackwater security has earned in no bid contracts doing private security work in Iraq and Kuwait and New Orleans during Katrina. Look how well Cheney’s companies are all doing catering to soldiers through oprivatization even if they did have to change a few names and untangle a few subsidiaries to keep the lawsuits straight. And when Walters finishes with the rink he can move on to privatizing the police and fire departments and if you live in Deerfield or Brierwood you’ll be in great shape. If you live in Carnegie, Bethford or Woodlawn however you might want to keep a shotgun and a garden hose nearby. I’m glad I moved out of Hamburg when I did. Laugh and call me paranoid but wait and see if he stops with the hockey rink. Privatization is like manifest destiny for greedy pols and hacks, they don’t just take the Lousiana Purchase they want to smell the ocean too !