Rink Skates On Thin Budget Ice

The clap of hockey sticks and bodies colliding resounded through the Louis Astorino Ice Rink in Hamden Thursday as the facility played host to the Yale Lunchtime Hockey teams.

Meanwhile, a different clamor has arisen: about the rink’s finances.

The town-owned, privately-run ice rink has been a running a deficit for at least the past four years. 

Exactly how big the deficit is was not publicly known until the 2020 town audit was presented to the Hamden Town Council at a meeting in February. The audit, which was for the 2020 fiscal year, revealed an ice rink deficit of $790,813.

“I hear you loud and clear Mr. Finance Director, and [it] is, ​‘Houston there is a problem,’” Hamden Councilwoman Berita Rowe-Lewis said during the February audit meeting to town Finance Director Scott Jackson. 

The audit sparked questions of whether it is worthwhile to continue subsidizing the rink with taxpayer dollars.

More than that, it has thrust into the spotlight Hamden’s longstanding poor financial practices for the ice rink.

From 2010, when the ice rink was privatized, until this recent audit, the ice rink was not accounted for in the yearly audit as an independent account.

Furthermore, from the 2017 – 2018 fiscal year until the 2021 budget, the ice rink was not included in the town’s annual budget. 

The rink was privatized in 2010 due to concerns about the high cost to the town of running the rink. Under a 2016 management agreement signed by Mayor Curt Leng, Hamden pays a private company, 595 Mix Management LLC, owned by Daniel Bush and John B. Donohue $250,000 annually to run the rink.

“If we just found out that the ice rink management fees are not being accounted for in the budget. This is $250,000. What else are we missing? What else is being hidden?” said Lauren Garrett, who is mounting a second challenge incumbent Leng in the 2021 mayoral election.

“My biggest problem is really that it was deceptive to not put it into the budget. So when you’re hiding this year after year in the general fund, you’re not showing people what the true costs are for having basically privatized the ice rink.”

The ice rink has been running deficits in excess of $250,000 for years, finance director Jackson said in a Thursday interview with the Independent. The $790,813 deficit is not from the past year alone, but is accumulated from the past several years, he said. 

Because the ice rink did not have an independent account in town audits until this past fiscal year, it is difficult, if not impossible, to tell, exactly how many years of cumulative deficits are contained in the $790,813 figure. Jackson estimated it is about four years’ worth of deficits, based on the numbers. The deficit from the past fiscal year alone was $212,633, which was heaped onto the $578,180 deficit that the rink started the year with.

The exposure of the deficit has invited disagreement over whether or not the ice rink should be managed as a retail business, expected to turn over a profit or break even; or as a public good, subsidized by the town and therefore not expected to turn a profit and allowed to even run at a loss. 

“Do we want it to be a revenue generator, or do we want it to be a service that the town offers just like the library or the fourth of July fireworks?” Myron Hul, the town’s former financial director, said in an interview.

At least one member of the Hamden Legislative Council voiced worries that the ice rink is not bringing in any revenue. ​“I am deeply concerned about the management of the ice rink,” said Rowe-Lewis during the February meeting. She added that the ice rink is ​“costing us triple-fold what it should be costing us. So those are things that are my concern. So if we are not making money on this end…we have to do something.”

Other members of the council disagreed. ​“The ice rink doesn’t turn a profit, and nor should it,” Kristin Dolan, chair of the Hamden town audit committee, told the Independent. ​“It’s a town asset there for the benefit of the community much like a baseball field or a library.”

Deficit from Undercollecting, Not Overspending

The town effectively subsidizes public use of the rink by charging the town’s Youth Hockey Association Program ice time rates that are well below market rate and by allowing the Hamden High School Boys and Girls Hockey Program to use ice time at no charge.

The Youth Hockey Program pays $325 an hour for ice rental, which is a big discount compared to the rates for ice time. The next closest ice rink is in Northford, where the fees are $450 an hour this year, according to town public works director Craig Cesare.

He added that Northford is increasing the fees to $470 an hour next year.

While many ice rinks raise the price on ice time each year, Cesare said the Hamden hockey programs have enjoyed the same rate for the past several years. 

Cesare said that each season, the Youth Hockey Program uses between 400 to 500 hours of ice time while the High School Boys and Girls Program uses about 300 hours of ice time.

“By sharing this information with you, I’m by no means suggesting that we charge the program $470 an hour,” said Cesare. ​“I just say everyone involved needs to understand the difference in money that is not being captured by our management company is because we’re offering it to our programs in partnership to keep Hamden youth hockey affordable. I’m happy to say Hamden youth hockey is one of the most affordable programs around and part of that is because of what it costs to operate the rink.”

Jackson said that if the town wanted to operate the rink as a business enterprise, the management would charge market rates and ​“there would be no deficit.”

“So let’s put it this way: If you sell iPads and you buy the iPads for $350 and you typically sell it for $399, that’s how you make money,” he said. ​“If you sell it for $300 at a discount because you want to help out students in schools, then you lose money. That’s also a deficit. It’s not that you’re overspending. It’s that you’re under collecting. It’s the same principle as the rink.”

“Now that the community can see on paper what it cost to subsidize [the rink], I think it’s reasonable to have a community conversation about it,” Jackson added.

Mayor Curt Leng told the Independent that his plan is to bring the deficit to zero by the start of the 2025 fiscal year. He said that now that the management fee is budgeted into the town’s operating budget, any revenue that the rink collects will go directly to closing the deficit. 

Is Ice Rink Worth it?

Management of the Hamden town rink was privatized in 2010 after Scott Jackson, who was then the mayor, decided the town could no longer afford to operate ot. It cost the town $281,609.59 in 2008 and $318,377.38 in 2009, according to rink finance reports obtained by the Independent. 

Jackson told the Independent Thursday that the primary reason for privatization was the high cost of paying town employees to run the rink, especially given the odd hours of hockey practice that often begins at 5 a.m. The town paid $222,339.20 and $230,628.92 in salaries in 2008 and 2009 respectively.

“We were spending more money on employee-related costs than any private firm would,” Jackson said. 

Under Scott Jackson’s administration, the town and ice rink’s relationship was something like a landlord-tenant relationship: The town leased the ice rink to Daniel Bush and John B. Donohue’s management company for $8,000 a month or $96,000 a year. In exchange, the town paid for all major repairs and most maintenance fees. The private management company was allowed to keep most of the rink revenue. 

After Mayor Leng took office in 2016, the contract was overhauled. Now the town pays Bush and Donohue’s company to run the rink, not the other way around. The relationship is more like a partnership rather than a lessor-lessee relationship. 

The town and management team have a complicated revenue sharing arrangement: The town takes all the fees paid by the high school hockey programs and the Hamden Youth Hockey Association program. The rink management company gets all snack bar revenue and 50 percent of all gross revenue, which includes all of the rink’s income excluding the hockey program fees, skate rentals, and gate revenue from high school hockey games played at the rink. The management team is also entitled to use the rink without charge for up to four hours a week to run their own hockey program and keep all revenue from it. 

Hamden has collected between $103,000 and $166,000 in revenues from the ice rink management team annually since the new rink contract was established in 2016, according to documents provided by Leng. 

“I think that we have a terrible contract in place,” Garrett told the Independent. ​“We should never be subsidizing a private business with taxpayer dollars. That’s not appropriate at all.” She contrasted the ice rink contract to the town’s contract with the Laurel View Golf Course, in which the golf course management pays the town $25,000 a year to run it, much like the Jackson-era ice rink contract. 

“This is a town asset that we are allowing a private business to make money off of and the goal was for us to get some of this revenue or for it to not be so costly,” said Garrett. ​“Or the town to manage it. And clearly that’s not happening. But it’s much worse is that it really it’s being hidden so that we can’t do anything about it.”

When asked for comment, John Donohue said that ​“we believe that the town has fared much better financially under our management than it had when it operated the rink through its own municipal employees.”

Garrett pointed out in a February Facebook post that rink manager Daniel Bush had made a total of $1,100 in campaign donations to Mayor Leng’s 2019 mayoral reelection campaign, which Garrett ran in. The individual campaign donation limit is $1,000. He also ticked ​“no” in response to a mandatory question on the campaign contribution form that reads ​“If contribution is in excess of $400 to a candidate for a chief executive officer of a municipality, does contributor or business he/she is associated with have a contract with said municipality valued at more than $5,000?”

“I believe that Dan Bush gave a contribution to the mayor because he wants Curt Leng to continue being mayor because he needs to be able to rely on the contract for the ice rink,” she told the Independent.. 

“The problem is that we have many businesses and individuals who have contracts and do business with the town and their contracts must be so lucrative that they have an extra thousand dollars lying around to donate to the mayor’s re-election campaign for the purpose really of continuing to do business with the town,” said Garrett.

When asked for comment, Leng said, ​“That seems a little bit like an odd statement given [Dan Bush] began to manage the ice rink five years before I was mayor.”

Daniel Bush did not respond to requests for comment.

“Like A Grocery Store Item Without A Tag”

If you were to look through the past four years of budgets and past 10 years of audits and tried to search for the ice rink, you would find no mention of it. You could find out how much Hamden was spending on animal control ($141,133 in 2019) or the deficit associated with the Farmington Canal Trail ($101,416 in 2019) but nothing on the ice rink.

As such, it is nearly impossible for a member of the public viewing the budget or audits to know how much revenue the ice rink brought in and how much it cost the town each year. Lauren Garrett asked whether this is symptomatic of a wider issue of accounting in the Leng Administration.

“For the ice rink management fees and the revenues to not have an account associated with it … it is very deceptive and it is very intentional,” said Garrett. She said that not budgeting or accounting for the ice rink was like going to the grocery store and finding an item that had no produce label.

It was not until Feb 3, 2020, when Myron Hul, then finance director of the town, raised the issue to the Legislative Council, that the ice rink gained its own ​“grocery store price tag,” to carry on the analogy. In other words, only then did the town Legislative Council create a special revenue fund to account for all the expenditures and revenues for the ice rink.

The recent audit also showed that conditions for financial reporting laid out in the ice rink contract were not being followed by the ice rink management company or the town. According to the 2016 contract, the ice rink management team was supposed to list the town as a secondary account holder of the rink’s bank account, send quarterly bank statements directly to the town and provide the Town’s Finance director with an accounting of the previous month’s revenues. None of these had been or were being done. 

“These accounting procedures have not been implemented which made it difficult to evaluate the rink’s finances,” stated the auditor’s letter to the legislative council regarding the 2020 audit. 

Jackson, who entered the finance director office in February this year, said he did not know the reason the accounting practices laid out in the contract were not being followed and that ​“it simply may have been overlooked but there is a heightened scrutiny on the rink now.”

He said he met with Mix Management partners about three weeks ago to make arrangements for the company to submit the bank statements to Hamden and abide by the financial reporting terms in the contract from this point forward.