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Speaking the Truth

Gary is an author, trial lawyer, Mequon-area resident and town of Cedarburg supervisor. He is a columnist for the News Graphic and writes for several Wisconsin area magazines and is a national columnist with The American Thinker and PJ Media.  He lives with his wife, Lisa, and has three sons ages 18 to 28. Gary won Ozaukee County in his bid for the Wisconsin Assembly's 60th District in 2011, but came up just 58 votes short.

Should Ozaukee County Be In The Hockey Business?

 

I love living in Ozaukee County, and the Ozaukee County Board is one of the reasons we enjoy the quality of life we do here. Most of our county supervisors have business experience and understand that money does not grow on taxpayer trees. They are fiscal conservatives who donate a significant amount of their time for meager "salaries" and do not vote themselves lavish pension deals or other financial perks like some of our more quixotic neighboring counties have done. We may differ on whether there are too many of them or whether they should have inflicted a toilet tax on us, but they are all essentially volunteers, and they do a good job.

If your taxes went up this year, don't blame the county - the county's budget is getting smaller (dropping 1.5% from 2007 to 2008). Blame the giant sucking sounds coming from MATC and Madison. The State of Wisconsin continues to require local government to implement expensive programs and practices without providing the necessary funding to pay for these programs.

On January 16, the Ozaukee Ice Association and the Ozaukee Youth Hockey Association were asked to appear in front of the Ozaukee County board to discuss return of the Ozaukee Ice Center to the ice association and the fate of $388,000 in debt remaining from the $500,000 which the county loaned the ice association in 1995 to help build the $4 million facility. The Board will vote on the issue next month, but initial indications from Board Supervisors are that many residents do not want the debt forgiven outright. That's understandable. Upon closer inspection, however, the fiscally responsible thing to do here may not be as clear cut as it first appears. 

The non-profit ice association built the ice center in 2005 with nearly $2 million and 7 acres of land privately donated by community parents, association board members, and local businesses. The county generously provided $300,000 in in-kind services (site preparation, etc.), and also loaned the Association $500,000 to bridge the gap and get the facility built. In order to take advantage of the county's bid process, the completed facility was given to the county, and the payback of the loan was arranged through a rather strange contract by which the association leases the facility from the county, and simultaneously places significant responsibilities and risks on the  county. The association pays $15,000 annually to the county, but an impending balloon payment of over $360,000 is due in 2012. An ice rink is literally "pure energy" and is very expensive to operate. Even after raising fees and ice rental rates substantially, the association barely breaks even each year, and there is no way it will be able to pay the note in four years.

The 33,000 square foot Ozaukee Ice Center serves 15,000 Ozaukee County residents annually, including serving as home ice to Concordia University's men's and women's Division III hockey teams and to varsity, junior varsity, and soon, girl's hockey teams, from five Ozaukee County high schools, as well as 300 youth association athletes from ages 4 to 16, and their families. The rink is so over-used and over-crowded that students are required to practice as early 5:00 a.m. and as late as midnight. Youth athletes are being turned away, and the rink has had to limit public skate hours, which are much in demand by the community. Youth hockey association fees charged to local families have been raised to the point where many families simply cannot afford for their children to play hockey.  Even the high school players have to pay a significant surcharge to play hockey, and games and practices are routinely rerouted to MSOE's Kern Center in downtown Milwaukee or to the Kettle Moraine Ice Center in Washington County. The association has had to say "no" to the Wisconsin Wild Girls Hockey Association - the largest all-female non-profit hockey program in the Midwest - and the North American Hockey League.

Fiscally prudent County Supervisor David Barrow said he was horrified by the county's liabilities listed in the lease contract which binds the county. "I have been told that there is considerable deferred maintenance that the county could end up being responsible for," he warned his fellow Supervisors. He is right. The ice association business plan for 2008 lists over $600,000 in capital improvements made in 2007 or planned for 2008. "The unfortunate result of this fiasco is that I hope the county will never again make a loan to a non-profit organization - particularly with unspecified and unknown contingent liabilities", Barrow concluded. "It's the stupidest contract I've ever heard of," said County Board Chairman Rob Brooks, a prudent businessman himself. The lease is bad for the county, bad for the Association, bad for the seniors, women, aspiring figure skaters, and public skaters who use the facility, and bad for the community as a whole.

The Association has been trying to build the desperately needed second sheet of ice since 2000. Its newest tenant - Concordia's Division III men's and women's hockey teams - recently signed a lease for valuable ice time, but with a solitary sheet of ice, this just displaces more residents, and further reduces public skate time. A second sheet would allow four to six hours of public skate time every weekend, and allow the Youth Hockey Association, the high schools, and Concordia to host tournaments which would raise as much as $25,000 in a single weekend for these organizations. It would also inject up to $35,000 in lodging, food, and entertainment revenue into the local economy - in a single weekend.

In 2005, ice association board members gave $150,000 of their own money to hire a professional fundraiser Bill Durkin (St. Mary's Ozaukee Hospital) to help raise funds for the badly-needed second rink. His assessment was that the fund-raiser was extremely viable and compelling, but his efforts to raise funds were met with a single devastating obstacle - foundations and generous potential donors don't want to give money to a facility owned by the government, and they shy away from giving money to an operation with a large impending balloon note.  It's a Catch-22 for the association and the county; the association can't build a second rink with the debt hanging over their heads, and they can't eliminate the debt without a second rink. Likewise, the county is in somewhat of a pickle, because the strange terms of the lease agreement obligate the county to provide funds for capital improvements, structural repairs, repairs to walls, floors, roof, flashing, heating, ventilation and air-conditioning, and other similar repairs. It also obligates the county to perform outdoor landscaping and maintenance on the site. In many respects, Ozaukee County is in the hockey business. It wants to get out.

The original Resolution passed on March 1, 1995, acknowledges the ice center is a "tremendous community asset and benefit available to all citizens and ice enthusiasts". It reads in part:

It is imperative that the  non-profit Ozaukee Ice Association maintain its fiscal integrity or Ozaukee County Park Commission would be forced to either run the Ice Center as a county operation or sell the building, depriving its citizen's (sic) access to a significant community wide asset;

 

On January 16, the county asked the association to appear before it to discuss ways the county could get out from under the obligations of this bizarre lease and out of the hockey business altogether. Maybe, as suggested by Supervisor Jennifer Rothstein, instead of forgiving the loan, the association could pay down the loan by, in effect, increasing public skate time and selling ice time to the county. But that doesn't get rid of the significant contingent liabilities and maintenance responsibilities. Another supervisor even suggested Concordia's possible ownership of the rink playing a role in the solution. No matter what route the board takes, the association and the 15,000 residents and athletes who use the ice center are grateful not only for the assistance the county has given in the past, but also for continuing to make the tough choices which help keep our county taxes low. I'm sure this decision will be no easier than the others.

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