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getbak · 08-25-2015, 05:17 PM

Something that occurred to me yesterday: Public recreation facilities aren't money makers. If the Flames are willing to take on the full burden of running the fieldhouse, and keep user fees in-line with other city recreational facilities, it might be a good deal for the city.

I checked online for information about the city's budget, and it appears that overall, user fees and other revenue generated at the facilities only cover about half the operating costs of Calgary's recreation facilities (which includes everything from community pools and arenas, to the Leisure Centres, golf courses, and athletic parks like Shouldice). The other half of the costs is covered by the city from tax revenue.

The Talisman Centre isn't a city-run facility, but it receives an annual grant from the city. In recent years, that's been about $1.2 million per year, with the budget increasing by about $50,000 per year.

The fieldhouse will be similar in size and scope to the Talisman Centre, so I would expect if the city built and operated the fieldhouse on its own, the annual support costs would be similar.

At the rate the Talisman Centre's funding has increased, it will be about $1.5 million in 6 year's time.

So, if the city were to make an agreement with the Flames where the Flames will bear the burden of this annual subsidy, it would result in a saving to the city of approximately $1.5 million in the first year. Assuming a 3% annual inflation in that cost, after 10 years, the annual subsidy would be just under $2 million per year, and the total subsidy over the first 10 years of operation would be a little over $17 million. After 20 years, the annual cost would be $2.6 million and the lifetime total would be over $40 million. After 30 years, the annual cost would be over $3.5 million and the lifetime total would be over $71 million.

These are just very rough numbers, so I don't know if they'd hold up to an actual review by someone who actually knows things, but it is something to think about. Of course, it doesn't erase the $200 million original investment required of the city, but that is money the city has agreed to spend (although, they haven't committed to a time frame for it).

08-25-2015, 05:17 PM	#2681
getbak Franchise Player Join Date: Feb 2006 Location: Calgary, AB Exp:	Something that occurred to me yesterday: Public recreation facilities aren't money makers. If the Flames are willing to take on the full burden of running the fieldhouse, and keep user fees in-line with other city recreational facilities, it might be a good deal for the city. I checked online for information about the city's budget, and it appears that overall, user fees and other revenue generated at the facilities only cover about half the operating costs of Calgary's recreation facilities (which includes everything from community pools and arenas, to the Leisure Centres, golf courses, and athletic parks like Shouldice). The other half of the costs is covered by the city from tax revenue. The Talisman Centre isn't a city-run facility, but it receives an annual grant from the city. In recent years, that's been about $1.2 million per year, with the budget increasing by about $50,000 per year. The fieldhouse will be similar in size and scope to the Talisman Centre, so I would expect if the city built and operated the fieldhouse on its own, the annual support costs would be similar. At the rate the Talisman Centre's funding has increased, it will be about $1.5 million in 6 year's time. So, if the city were to make an agreement with the Flames where the Flames will bear the burden of this annual subsidy, it would result in a saving to the city of approximately $1.5 million in the first year. Assuming a 3% annual inflation in that cost, after 10 years, the annual subsidy would be just under $2 million per year, and the total subsidy over the first 10 years of operation would be a little over $17 million. After 20 years, the annual cost would be $2.6 million and the lifetime total would be over $40 million. After 30 years, the annual cost would be over $3.5 million and the lifetime total would be over $71 million. These are just very rough numbers, so I don't know if they'd hold up to an actual review by someone who actually knows things, but it is something to think about. Of course, it doesn't erase the $200 million original investment required of the city, but that is money the city has agreed to spend (although, they haven't committed to a time frame for it). __________________ Turn up the good, turn down the suck!