MINTO – Town council will turn operation of money-losing arena concession booths in Harriston and Palmerston over to a private operator for the coming winter season, despite the objections of one councillor.
The town currently operates concession booths in the lobby of both the Harriston and Palmerston arenas. The Clifford Recreation Association operates the town-owned concession booth at the Clifford Arena as part of its fundraising program.
In 2016 operation of booths in Harriston and Palmerston was offered at no charge to community service clubs, sports groups and businesses, explained recreation services manager Matt Lubbers in a report presented at the Aug. 7 council meeting.
“There was no interest at that time and they continued to be town-operated at a deficit,” the report states.
Lubbers explained that Shawn Weppler, a local caterer and operator of BBQ Bite in Clifford, has expressed interest in operating the booths and town-owned vending machines this upcoming ice season.
The proposed agreement is for one season, September to March, and contains an opt-out clause for both parties in November of 2019 as well as a carryover clause for future ice seasons.
Under the agreement, the operator would pay no rent and the town would cover capital equipment and appliance replacement as well as heat and hydro costs.
Lubbers predicted utility costs would be minor and said the existing equipment is in good condition and unlikely to need replacement.
The report notes similar agreements are in place with businesses in some neighboring municipalities, while others with new facilities do not provide concession services, strictly vending machines.
Lubbers said the Steve Kerr Memorial Complex in Listowel, which opened in 2017, does not contain town-operated concessions as the municipality of North Perth “identified it as something they didn’t want to support through tax dollars.”
Councillor Mark MacKenzie questioned the town’s pricing practices and said he would like to see the municipality take a closer look at why the booths were losing money.
“The last two years we’ve lost thousands of dollars. I’m just talking on product. It’s impossible to buy $13,000 worth of product and only get $14,800 out of it in revenue. That’s unheard of,” said MacKenzie. “What’s happening here? It doesn’t makes sense to me and to just wash your hands and give it up, let somebody else come in … Nine or 10 per cent profit on a product is ridiculous; you should be making 100 or 200,” MacKenzie continued.
“You want to aim for about 100 per cent markup on certain items,” Lubbers agreed, noting “a lot of our expenses are in staff wages.”
While pointing out “we’ve looked at it as providing a service in the past,” Lubbers said the town is not receiving enough income to cover the product costs and staff wages.
In regard to the figures cited by MacKenzie, Lubbers said he would like to go back over the general ledger to ensure everything expensed to the concession booths was actually booth supplies.
He noted the town often purchases large amounts of soft drinks, but most of that is fused with town-operated liquor licensed events.
Councillor Dave Turton pointed out the issue has been discussed at the committee level over the past few years.
“The one in Clifford, I’m not sure how much they’re making, but it definitely is all volunteer (labour),” said Turton.
“I agree with what you’re saying, Matt. Wages are a big thing, I know that we’ve talked about this and I know that we’re offering a service to our people in the community and here we’ve got a guy coming forward to say that he wants to give it a shot … He’s a business guy. Maybe he’s got some strategies that we haven’t thought of,” said Turton.
Mayor George Bridge agreed with the idea of letting a private operator try and make the concessions work.
“Otherwise we close them down and we put the machines in. I mean that’s the other option, you know. We’ve done this for four years and made no money,” Bridge stated.
Councillor Ron Elliott said the booth business has never paid off for municipalities, either before or after amalgamation. However, he said, over the years he’s seen some private operators be able to turn a profit.
“It seems when it’s a community running it, we can’t make any money on it,” Elliott stated.
MacKenzie proposed a motion to defer a decision on the proposal pending further review of concession operations. However, the motion was not seconded.
A resolution to proceed with the agreement with Weppler was approved with Bridge, Turton, Elliott and councillors Geoff Gunson, Judy Dirksen and Jean Anderson in favour and Mackenzie opposed.
