Rink Deficit Shrinks

Town officials see this popularity, and the potential for concessions, merchandise and advertising sales, and more tournaments as signs the arena could shrink operating losses at the facility — the gap between revenues and expenses — to levels better than those for the former Jackson Arena. The new rink replaced the aging Jackson and opened Dec. 1, 2013.

“We’re not in the business to make money, but at the same time we’re not in the business of losing money,” Town Manager Charles Safford said Wednesday.

For this year, the Stowe Arena is estimated to run a $124,844 operating loss, with revenues of $301,030 against expenses of $425,874. The deficit would be covered by property tax revenue.

But the most recent numbers hint that the gap is closer even than that. As of April 18, the arena had racked up roughly $265,000 in expenses, but had already brought in $203,000, a gap of only $62,000. Those numbers are preliminary, and could fluctuate sharply in the final three months of the fiscal year.

This year’s budgeted operating loss — with arena revenues projected to pay for roughly 71 percent of the operating expenses — is smaller than the actual operating loss the Jackson Arena ran in 2010, when rink revenues paid 55 percent of operations. The $128,000 operating loss that year was covered by taxes.

The 2010 operating expense breakdown of Jackson Arena is the most recent, and only, analysis available, because the old arena budget was always folded into the town parks budget. The 2010 numbers appear in a report by an outside consulting firm hired to study the rink in the run-up to shaping a $6.5 million arena bond proposal. After failing in 2011, the bond was eventually approved at the 2012 Town Meeting.

With two months’ of revenues left in the town’s financial year, Safford said this week that the arena’s operating loss could be smaller than projected. He expects the arena will at the very least to meet its revenue targets. As for expenses, as of April 18 spending on the arena was 10-15 percent under the estimates, with $264,518 spent so far this fiscal year.

Among the chief criticisms of the arena when it was first proposed in 2010 were the anticipated operating losses. Critics argued losses were under-estimated, and some contended that it was inappropriate for taxpayers to have to cover operating losses to keep the facility running.

Some proposed that if the rink was unable to cover its expenses it should not be approved. Alternatively, they said, the rink should be run by an independent contractor who would be invested in aggressive marketing of the rink and assure, if not its profitability, that it would not be a financial burden on taxpayers.

Voters approved the arena despite those objections. Whether it will ever break even remains to be seen. But the place is bustling.

According to the Stowe Parks and Recreation Department, the arena had 5,498 non-scheduled visits during the winter ice season, which started Dec. 1, 2013 and ended March 22. And that’s just from public skating, which only constitutes about 15 percent of the overall usage. A visit refers to the public skating times, based on an individual paying for the ice when it’s open. If a person went 40 times, that would count as 40 visits.

Predictably, the evening hours saw more people, but even during the daytime hours, people were skating all throughout the winter, according to Parks and Recreation Director Matt Frazee.

“We are so blessed,” Frazee told the Stowe Select Board Monday night, speaking of the hockey culture that exists in town.

The arena was open for a total of 1,960 hours during the winter, and during that time, the ice was in use 1,239 of those hours, or 63 percent of the time. Of that, roughly 200 came from public skaters. Turf time is proving even more popular, thanks to Mother Nature driving more people inside: roughly 90 percent of turf availability has been snatched up between March 30 and April 22. That number will decrease as weather improves.

Safford said the town will leave revenue on the table with the arena, but that’s because it is not a for-profit arena, rather a town entity meant for the townspeople. For instance, the high school hockey teams used roughly $27,000 worth of ice time, but didn’t have to pay for it.

“A lot of people would like to see it net out,” Safford said. “But we look at what is the net value for the community.”