Report to: General Committee Date of Meeting: May 15, 2006

SUBJECT: Markham Skating Club

PREPARED BY: Lori Wells x 7536 / Glen Taylor x 3180

RECOMMENDATION:

That the report titled Markham Skating Club, dated May 1, 2006, be received;

And that the ice rate for the 2004 / 2005 and 2005 / 2006 ice season not be phased in;

And further that the Town continue to offer the Learn-to-Skate program to the community.

EXECUTIVE SUMMARY:

On Monday March 6, 2006, the Markham Skating Club made a deputation to Council regarding their inability to meet its financial obligations due to the September 2005 ice rate increase of twenty dollars ($20.00) per hour and their concern that the town was competing with the club’s Learn-to-Skate program. The matter was referred to staff for a report.

Ice Rate Increase and Impact on Operating Budget

In December 2004 an extensive User Fee Report was approved by Council to increase program fees, fitness membership fees, ice rental rates, indoor soccer field rental fees and aquatic rental rates. The ice and soccer rental rates were increased by $20.00 per hour, effective September 2005.

The $20.00 an hour rate increase for all ice users created approximately $333,000 of additional ice revenue which was part of the Town’s approved base budget.
The Markham Skating Club represents 4.2% of the ice allocated or approximately $14,000 of the total ice user rate increase for 2005 / 2006 season.
All user groups were notified of the rental increase in January 2005.
The $20.00 per hour rate increase aligned the Town in the market place. We are mid-point in the market.
All user groups have paid their ice contracts for the 2005 / 2006 ice season.

As part of the annual user fee review, staff submitted a report to Council in December 2005 and the recommendation was approved that the Recreation User Fees would be set according to the Consumer Price Index on an annual basis. In February 2006, all user groups were notified of this change in policy by letter.

The rate increase for 2006 will be 2.7% and will affect their 2006/2007 ice season.
The 2.7% rate increase for all ice users created approximately $42,000 of additional ice revenue, which is part of the Town approved 2006 base budget.
By assuming the same ice allocation for Markham Skating Club’s 2006/2007 ice season the 2.7% rate increase will have an impact of approximately $1,800.

Town-Run Learn-to-Skate Program

The Learn-to-Skate Program has been offered by Recreation and Culture Services for over 25 years. The goal of the program is to offer an introductory skating experience to the community. The programs are offered on a session basis and typically average between 8 – 10 weeks in length. The growth of the program has been dependent on additional rinks being built. The program is extremely popular with a high level of customer satisfaction. In 2003, with the opening of Angus Glen rinks the Learn-to-Skate program was expanded from 17 to 35 hours per week across Town..

In summary we had a total of 3,954 participants in the 2005 Learn-to-Skate Program and had 376 on the wait list. The Town distributes flyers to the participants promoting the three figure skating clubs. Waitlisted participants are also referred to the figure skating club’s programs.

Alternatives to Town Run Skating Programs

When addressing an alternate to the Town as the service provider for the Learn-to-Skate program, the Town would need to review the organizations that could possibly be interested such as figure skating, minor hockey, private providers; therefore an RFP would be required to be fair and equitable. This method would eliminate the Town from providing the service directly to the community. The successful proponent would need to be able to:

Handle the capacity
Handle the registration process
Provide seasonal sessions
Provide access to those who cannot afford the program
Hire supervisors and train
Promote and market the program
Pay for any promotion of the service in the Recreation and Culture brochure
Pay for ice costs directly

Any changes to the service delivery provider would take at least a year to implement as programs are compiled six to eight months in advance of the season.

FINANCIAL CONSIDERATIONS:

Not applicable

Overview of the Three Skating Clubs

There are three skating clubs that operate within the Town. They are Thornhill, Unionville and Markham Skating Clubs. For the past three years the clubs have experienced fluctuations in registrations. The following outlines the past three year registration numbers and the hours of ice allocated to each club.

Club		2003-2004 Season
	Residents	Hrs. Allocated / Week	Hrs. Used / Week
Markham Skating Club	332	58.5	42
Thornhill Figure Skating Club	220	24	27
Unionville Skating Club	669	51	41
		2004-2005 Season
	Residents	Hrs. Allocated / Week	Hrs. Used / Week
Markham Skating Club	283	47.5	39
Thornhill Figure Skating Club	220	24	24
Unionville Skating Club	519	58	43.5
		2005-2006 Season
	Residents	Hrs. Allocated / Week	Hrs. Used / Week
Markham Skating Club	309	47.5	37
Thornhill Figure Skating Club	129	15.5	16
Unionville Skating Club	352	41.5	33

In summary, the Markham Skating Club registrations decreased from 2003 / 2004 to 2004 / 2005 by 15% or 49 members and increased in 2005/06 by 8% or 26 members and the club has used an average of 76% of the ice allocated.

Rate Increase Impact – Markham Skating Club

In the 2003 / 2004 ice season the Markham Skating Club fall/winter ice contract was approximately $97,000 including GST. The September to March 31 winter contract totaled 763 hours of allocated ice. The $20.00 per hour rate increase for the 2005 / 2006 ice season (September 12, 2005 to March 31, 2006) based on 763 hours of ice was approximately $15,000.

The 2.7% increase based on the 2005 / 2006 fall/winter ice contract of 763 hours would result in an increase of approximately $3,000 for the 2006 / 2007 fall winter ice contract.

In summary, the rate increase of $20.00 had an impact of approximately $15,000 on the Markham Skating Club for the 2005 / 2006 regular ice season. The rate increase based on CPI increase of 2.7% effective September 1, 2006 bringing the hourly rate to $151 per hour will result in an approximate $3,000 increase (based on the 2005 / 2006 ice allocation.)

Ice Shows

The three clubs host an ice show on a bi-annual basis. Thornhill Ice Show consists of a dress rehearsal, one performance on Saturday night and one Sunday matinee. The club pays for its ice time and the cost to paint the ice. There is no special requirement for the show.

The Unionville Skating Club and Markham Skating Club is a week long rental which involves special requirements, i.e. painting ice and removing the glass. Essentially the club(s) take over the building for a week.

Concessions given to the skating clubs during the show includes:

Provide chairs (400 plus)
Ice painting
Glass removal / reinstallation
Programs and private rentals are cancelled for the week to accommodate the club

In addition, the Town assisted the Markham Skating Club in their 2006 Ice Show by arranging to store their two trailers at Central Works yard.

Markham Skating Club 2006 Ice Show Costs consisted of:

Item	Amount
Ice / Room Rental Costs	$13,896.15
Ice Painting (N/C)	900.00
Glass Removal / Set-up (N/C)	2,500.00
Loss Revenue of Ice Time (N/C) Take down	2,352.00
TOTAL	$19,648.15

The Markham Skating Club was charged for the ice and room rental fee of $13,896.15. The balance of $5,752 was absorbed by the Town.

Town of Markham’s Learn-to-Skate Program

The Town’s Learn-to-Skate program has a total of 35 hours of ice time for winter and fall sessions, spring session hours are decreased due to the ice season at specific rinks. The range of programs offered is:

· Introduction to Hockey (children, adult and women)

· Learn-to-Skate (preschool, children, pre-teen, adult, family)

· Power skating.

The following are the statistics for the 2005 Learn-to-Skate Program (does not include hockey or power skating). A total of 26 preschool and 21 children classes are offered. Class capacity for Preschool is 30 participants and for Children there are 60 participants. Preschool and Children programs offered simultaneous on the ice changes the capacity to 20 participants for Preschool and 40 participants for Children:

Session 2005	Preschool # of Registrants	Waitlist	Children # of Registrants	Waitlist
Winter	841	169	931	64
Spring	0		406	81
Fall	671	30	805	32
Total	1812	199	2,142	177

In summary the 2005 Learn-to-Skate Program budget was:

2005 Budget - Learn-to-Skate Program

Expenditures

Salaries $109,602

Benefits $ 11,508

Equipment $ 2,500

Ice Costs $ 83,496

Total $207,106

Revenues

Children $129,699

Preschool $109,623

Total $233,323

Net $ 26,216

Note: The ice cost calculated at the minor group prime rate of $147.00 / hour.

The net revenue of approximately $26,000 does not include the overhead costs such as registration, marketing and promotion and insurance that user groups have to pay. Refer to Appendix A for a detailed cost breakdown per class of the Town’s program.

Impact of Phasing in $20 per hour Increase of 2005 / 2006

The consequences of phasing in the already approved rates would have a direct impact on the current operating budgets. The budget impact would be in a range of up to $375,000 over the phased period. To date everyone has honoured their financial commitments.

Maintain Existing Rate Increases

By maintaining the approved ice rate as presented will not have a negative impact on the Town’s 2006 approved operating budget. Staff recommends maintaining the current fee structure.

Alternatives to Town-Run Learn-to-Skate Program

When addressing an alternative to the Town as the service provider for the Learn-to-Skate program, the town would need to review the organizations who could possibly be interested – figure skating, minor hockey, private provider; therefore a request for proposal would be required to be fair and equitable. The organizations would need to be able to handle the capacity, registration process, provide seasonal sessions, and provide access to those who cannot afford the service, supervise and hire staff, pay for promotion of the service in the brochure and ice costs.

The Town’s Learn-to-Skate Program is delivered town-wide. Therefore, the three skating clubs would need to consider how they would manage a town-wide delivery format. The clubs would seriously have to consider merging into one organization to ensure consistency in program delivery.

Overall, there are three options to consider.

a) Status Quo

The Town continues to deliver the service to the community.

b) RFP the Service Delivery

This method would eliminate the Town from providing the service directly to the community. The successful proponent would need to be able to:

· Handle the capacity

· Registration process

· Provide seasonal sessions

· Provide access to those who cannot afford the program

· Hire, supervise and train the staff

· Pay for the ice cost

Should the Town decide to get out of the Learn-to-Skate business then the RFP process to determine the successful service provider would be the fairest way to go.

c) Skating Clubs Provide Learn-to-Skate Program

Under this scenario the three existing clubs would need to merge into one organization. The same criteria as outlined under the RFP would need to be applied to the skating organizations. This scenario is probably the most challenging. Currently there are three separate organizations that are operating on a volunteer basis.

Any changes to the service delivery provider would take a year to implement as programs are compiled six to eight months in advance of the season