DFFH Dissolved - More Concerts Sited
Ever since its conception the Multiplex and later the Downtown Facility and Field House (DFFH) has drawn it fair share of heated controversy with referendums, a court challenge, debates and schisms within the community and Monday’s Council meeting into its future was no exception.
The governance and direction of the DFFH (commonly known as Mosaic Place and the Yara Centre) was debated over two hours with the end result the DFFH is now dissolved and the facilities known in their infancy as the Multiplex headed in different directions.
The discussion began with City Manager Jim Puffalt delivering a lengthy report into the history of the DFFH and its multitude of problems from infancy to the present day.
During the report, which Puffalt delivered from the podium and not his usual seat at the table with senior members of Adminstration, the City Manager called for a radical shift from how the DFFH is ran. He questioned whether an independent third party board should be running the DFFH at all and to prevent a reoccurrence of shutting down a Board for a third time that Mosaic Place’s operations and management be contracted out to a independent management firm which specializes in facilities management.
In his report Puffalt wrote “The separate board does not reduce the risk to the City, rather increases the risk if they operate without a robust team of experts to assist them, and policies and procedures to guide them. The risk is even more pronounced if it creates a silo organization that does not communicate with its owner, the City of Moose Jaw, and does not use the expertise available at City Hall in difficult and complicated situations.”
Puffalt called for a united voice from Council on the issue for the good of the facilities. He requested Council to work together and “not complain and spread rumours about each other.”
The report also dismissed a common rallying cry the Yes side during the referendum debate of “If you build it they will come.”
“Waiting for events to come to the door is not effective as we are not receiving calls. We were successful with the Scotties because the community aggressively bid to host the event and I was able to negotiate the contract,” Puffalt wrote.
The discussion within the report calls for hosting 10 major events annually. It also calls for a goal of maximum potential to breakeven with 90 percent of seat sales accompanied with associated revenue from merchandise sales and food and beverage commissions.
The recommendations will not only take the DFFH in a new governance direction but will also see the DFFH dissolved and the Yara Centre coming under direct Parks and Recreation Department control.
Speaking in front of Council Greg McIntyre, the past president of the Moosejaw and District Chamber of Commerce, said “this report has been quite consistent with what our report has been” going on to add the Chamber supported hiring a third party management company to operate Mosaic Place as they had the necessary expertise to reach the full potential of the facility and not just be an arena.
“A third party comes in with horsepower,” he said, adding “in the overall core responsibility is they have this depth. This is their business.”
Councillor Brian Swanson asked a series of questions of McIntyre. Swanson asked if the Chamber was in favour of more concerts in town were they willing to come up with some of the money? He also asked if the Chamber was willing to survey its members on the tax increase necessary to bring in concerts on this scale?
McIntyre replied “we probably disagree with the framing of your question.” He added the Chamber had had discussions with third parties while preparing their report and hiring a management company was the best option in the long term.
“We anticipate as we are running the facility as we do now it will be more expensive in the long run,” he said, adding the Chamber’s opinion was based upon what has happened in other jurisdictions.
Councilor Swanson said the previous three member Interim Board of himself and Councillors Crystal Froese and Scott McMann had gone through having a third party management firm take over the operations and management of the DFFH.
“(I disagree with) the idea a third party is going to make a miracle in Moose Jaw,” Swanson said going on to point out management firms are located in other centres and their job is to maximize profits and then send the profits back to their home office and outside of the city.
“They are not coming to Moose Jaw to make $50,000…It ‘s very expensive and money will not remain in Moose Jaw,” said stating an outside management firm is actually serving two masters and the City is their financial backstop.
“The idea they are the only ones who can find entertainment is false.”
Asked by Mayor Frasier Tolmie if the Chamber had spoken to the Moose Jaw Warriors, McIntyre stated they had spoken to the Western Hockey League and there was a little bit of anxiety but management firms could be worked with successfully.
“At the end of the day if we don't do anything we have an arena and we put pressure on the Warriors to make it successful…to say there is a great heartburn from the WHL and the Warriors that does not seem accurate.”
Councillor Crystal Froese asked about Mosaic Place being an economic driver to which McIntyre responded that in the down economy there was spinoffs from holding concerts and other events. For the restaurant industry “every concert we put in there we will have a lift.”
Councillor Dawn Luhning agreed with the change in direction.
“I do believe that this is the appropriate move for these facilities at this time,” Councillor Luhning said, adding “its time to get a handle on the good things these facilities are able to do for the community.”
“The City does need a positive story out of this…it’s time to make these facilities work for the City of Moose Jaw,” she said.
Councillor Swanson disagreed that the previous board was behind the reduction of concerts at the facility but it was due to economic factors beyond the City’s control.
“The real reasons why is there are fewer concerts in Western Canada and Moose Jaw is the low Canadian dollar…combined with the subdued Western Canadian economy they go where the money is.”
“Don't let anybody tell you the Board that’s been dissolved wasn't looking for concerts.”
Councillor Swanson used the analogy of concert promotion as murky shark filled waters with the taxpayers being the small fish and a back stop.
He continued to speak about the accomplishments of the former Board which included a significant amount of work done to top heavy staffing levels, a reduction in the operating subsidy in two consecutive years from $935,000 to $695,000 and 11 of 15 recommendations in the Myers, Norris and Penney (MNP) Report worked on or completed.
“It’s the most expensive option and most facilities in Western Canada have rejected that option.”
Councillor Scott McMann said despite the recent problems which led to the previous board’s dismissal he was not in favour of the proposal.
“Third party management is going to cost the City more tax dollars,” Councillor McMann stated, adding “make no mistake you pay dearly for that expertise.”
“The state of the economy plays a big role in concerts and right now the economy is in a bad place,” Councillor McMann said.
Councillor Crystal Froese said she favoured the third party management option/
“I don't agree with them (Councillors McMann and Swanson) and never have,” Councillor Froese stated.
She went on to speak about the Penticton experience where third party management had created $20 million of economic activity in that City and like Moose Jaw with Regina 45 minutes away Penticton was doing well with the larger Kelowna 45 minutes away as well. Penticton was so pleased with the third party management board’s performance that Penticton is about to grant a second ten year contract to the firm.
“It is my belief this organization has been in crisis for many years…no general manager fulltime since 2016…we put a lot on the shoulders on volunteer boards in this City…it’s just not sustainable. The time commitment on that Board is unsustainable,” she said adding “ it was an operations board and not a governance board.”
“I really believe this motion will get us to where we should have been from the start…the whole idea they are just there to dig deep into our pockets is not true,” Councillor Froese stated.
Councillor Heather Eby said although she had supported the proposal two weeks earlier in an in-camera Executive Committee meeting she was changing her decision from the.
“It doesn't sit right with me.”
Councillor Eby spoke about her previous seven years on another ill fated DFFH Board stating “the biggest mistake we had was not having had Councillor Swanson on that Board.”
She spoke about the community fundraising $10 million to have the facilities and it was to hold events and not just have an arena.
“We need to figure out how we can be attracting concerts and other events.”
Regarding questions about who would be responsible for major facility repairs Councillor Eby was told the City would be.
Mayor Frasier Tolmie called for a spirit of optimism and the end of negativity. He interjected Keynesian economic theory into the debate.
“We have to go from being reactive to being prepared…when things are good we put some money away so these facilities have money when things are not so good…to prepare us for the good times and to prepare us for the bad times.”
Councillor Swanson re-entered the debate pointing out how $65,000 USD of the $100,000 contingency fund to backstop potential concert losses due to fluctuations in the Canadian dollar versus the US dollar “was a belief in the future” and being prepared.
Questioned by Councillor Chris Warren about the necessity of approving the report’s five recommendations Puffalt warned about a future catastrophe by not following his recommendations.
“If City Council have to take control a third time what type of catastrophe would have had to have happened?” Puffalt asked, warning “if we recreate that again that’s the issue you risk happening.”
In his report Puffalt made five recommendations:
wind down the Moose Jaw Downtown and Soccer/Fieldhouse Facilities Inc over the next year. Transfer control of the facilities to the City of Moose Jaw.
transfer the Yara Centre and staff to the Parks and Recreation Department
Mosaic Place remain as a standalone facility. Issue a Request For Proposal for management and operational services for a five year term. Negotiate the transfer of staff to the management company.
in the interim pursue concerts, events and tournaments
provide written quarterly reports to Council
Puffalt spoke about the need for the City to become involved in trying to find concerts and events as the transition period to issuing an RFP and selecting a third party management firm, if approved, would be five months away. He spoke about the necessity of letting the concert community know the City was in the market.
In order to pursue concerts, events and tournaments the report made three additional recommendations:
authorize the City Manager purchasing authority of up to $150,000 for either coproduction or promotion without seeking Council approval. Any concert, event or tournament cost more than that would require Council approval at an in-camera Executive Committee meeting.
create a $100,000 USD reserve fund to cover potential losses. The reserve fund would be maintained at the $100,000 USD balance from profits and minimize any impacts during any year.
Understand not every concert will be successful but performance will be based upon overall annual performance
In the end the first motion to effectively start the process of moving the Yara Centre and staff to Parks and Recreation Department control was passed with a 4-3 vote with Councillors Eby, McMann and Swanson opposed. Councillors McMann and Swanson would vote against the remaining four motions which all passed.
The DFFH Operating Board has been dissolved on two separate occasions both mired in controversy.
The Board was dissolved in August 2016 when the Myers, Norris and Penney (MNP) Report found numerous problems in its operation. Some of the problems mentioned in that report was the former CEO Scott Clark controlled information to the Board, that Clark failed to appreciate his role and accountability with City Council and there was a failure in Human Resources, Policy Development and to revise budget development and operate within the approved budgets.
The MNP Report also found operating deficits or losses of $3.5 million in the three year period of 2013, 2014 and 2015.
The MNP Report was ordered by Council after former Councillor and Board Member Candice Kirkpatrick said she could not support the upcoming DFFH budget. The report had a public and a confidential portion with the confidential sections never publicly released.
A new Operating Board was dissolved once again in August 2018 to allow an investigation into to serious personnel issue.
After an independent investigation and in-camera meeting Councillors Crystal Froese, Scott McMann and Brian Swanson were sanctioned to varying degrees according to their culpability discovered during that investigation. The City has never officially released what the investigation was about.