Town on lookout for arena suitors
Published on July 9th, 2003
STONEHAM, MA - Amid accusations of "mismanagement" and "losing money", the Town of Stoneham has begun a bidding process to lease out the day-to-day operations of the Stoneham Hockey Arena on Montvale Ave.
The Town, which had been mulling over the fate of the arena for the last eight or nine months, has posted a request for proposals for the arena in area periodicals, and, according to the agreement, will see $195,000 in rental income revenue during the first three years of the agreement.
"The arena has been operating in the red for the last few years, and we think outsourcing the day-to-day operations to a private party could be a very effective solution," said Town Administrator Dave Berry.
According to figures provided by Town Accountant Ron Florino, the Stoneham Arena has been running at a loss in six of the last seven fiscal years including deficits of $138,000 in FY2001 and $69,000 in FY2002.
When the numbers are pulled into closer focus, however, several things seem to be evident past the mind-boggling deficits. The revenues from the Arena Pro-Shop/Vending Machine for FY2001 ($23,231) and FY2002 ($18,831) have been pulled into a revolving fund, and are not counted against the overall arena profit/loss margin.
Much of the "financial losses" attributed to the three decade-old building are a result of debt service for the purchase of a new zamboni in FY2001 ($60,275) and a new roof ($47,985 in FY2001 and $46,130 in FY2002) installed in 1996 and bonded out until FY2007.
"The rink is not making money because there's a big bond out on the roof, and it's an old building," said Stoneham Arena Manager June Scarpa. "The powers-that-be don't understand that things break down...we need new things. The building was never really upgraded."
According to Scarpa, in the last several years the Arena has undergone locker room upgrades, the creation of a girl's locker room, new compressors and bathroom upgrades.
When the debt service for the roof and capital improvements, as well as the revenue from the pro-shop/vending machines, are added to the equation, the Stoneham Arena was $7,315.09 in the black in FY2001 and lost $4,164.63 in FY2002, according to the Town Accountant's fiscal report.
"The concession and the pro-shop shop money was going to a separate fund because we wanted to track it," said Florino, who added that the funds will now be shifted into the town's general fund as part of an Article approved by Town Meeting. "It should be counted as part of the arena revenues."
"We're paying off the arena roof and it'll be paid off in FY2007," said Florino. "With the amount of repair-work needed at the arena, it's safe to say that you're going to be paying some sort of capital payout (after FY2007)...so I don't think you can just take that away."
According to Florino, the arena made a profit in FY1998 of $12,557.03 and lost only $4,802.19 in FY1999, but both budgets also included between $22,000 and $26,000 in revenue from the concessions and pro-shop. The debt service for the roof also dropped from $65,000 in FY1997 to $50,000 in FY1998 and FY1999.
The Town of Stoneham shifted all revenues from the pro-shop into the revolving fund in FY2001.
"We took over the arena ourselves in FY2001 and took over all operations ourselves," said Florino. "Before that, we were getting rental money for the pro-shop, concession stand, and for the parking."
In addition to the cost of keeping up with the approximately 30 year-old building, operating costs have soared $40,000 in the last five years and personal has also risen $30,000 in the last five years.
"The electricity, the heat and all of the other costs associated with the rink have gone up," said Florino. "The last three years have just been...downhill."
Much of the criticism for the lost revenue has been leveled at the feet of June Scarpa, the 18 year Stoneham Arena Manager. According to Selectman Cosmo Ciccarello, the arena has been victim to neglect, ineffective employees and mismanagement.
"I think it's poor management," said Ciccarello. "That's what it is...the employees leave a lot to be desired, and they shouldn't be losing money."
"You'll have a private firm willing to give $100,000 or more to lease the arena...and they're going to be making money," added Ciccarello. "How come we can't make the money? It's beyond me."
According to Ciccarello, the best course of action would be to combine the management of Unicorn Golf Course and the Stoneham Arena.
"We should combine it with the golf course and arena under one Director, and work from there," said Ciccarello. "Everybody I talk to thinks it's a mess, it's dirty, it's filthy...nobody does a thing about it."
Scarpa, in turn, accuses the town of "harassment" and riding her out of town during her last two years of management at the arena.
Scarpa acknowledges that some of her employees let their work slack during her health absences over the last two years, and, as manager, she is paying the price.
"The guys didn't do their work and it doesn't reflect on them...it reflects on me," said Scarpa of her absence several years ago. "Once I got back, I spoke to them and they shaped up."
According to the RFP submitted by the Town, individuals employed at the rink as of June 30, 2003 will receive "preference" when a new management group takes hold.
"As far as mis-management goes, I don't think that's the case," said the 63 year-old Scarpa. "Unfortunately, there are a couple of Selectmen who don't like the way I do things and spread rumors about me. I've really been harassed by the town for the last two or three years...and I'm really looking into what I can do about it."
"A lot of people are telling tales that just aren't true," added Scarpa, who also noted that she won an achievement award at a recent rink manager's convention. "I would have liked to have run leagues that would have made money, but they're never going to take the ice time away from youth hockey. When this rink was built, it was not built to make money."
According to Scarpa, preference doesn't give her a very strong sense of security.
"I don't like it because after all it (new management) means my job," said Scarpa. "I was in on the ground floor when the rink was being built. My husband and I knocked on doors for people to go to Town Meeting to build the rink for the people of Stoneham...it's a little disappointing."
"I assume that whoever takes it over will have their own people," added Scarpa, who made $54,000 managing the arena in FY2002. "I know there is something in the RFP that calls for preference, but it all depends on what they offer, you know?"
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