By Thia James

Administration warns against private concessions

Sep 29, 2014 | 6:57 AM

Prince Albert’s community services department will advise council to be cautious if it considers privately run concessions as an option in its follow up report about city-run concessions and vending agreements.

Community services director Jody Boulet said second report will include information reminding council about the last time the City attempted to privatize concession services – at the Art Hauser Centre. Boulet said that attempt resulted in an arbitration process with a local union, which the City lost.

The Art Hauser Centre’s board awarded the contract to the Optimist Club and informed the union in September 2005. The union filed a grievance later that month. 

The City, Boulet said, had to make retroactive payments to the union in order to resolve the matter, since there was time lost by the union when the arena’s concessions were privatized.

“So, privatizing the City concessions does involve a consultation process with the union and based on past experience with that process, it has been determined that we wouldn’t be successful in that venture,” Boulet said on Thursday.

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“So, we would need to proceed with caution in that direction if we are to look at that further.”

The first report, dated Aug. 25, found that combined concessions and vending profit at the Art Hauser Centre, Alfred Jenkins Field House, Kinsmen Arena, Kinsmen Water Park, Dave G. Steuart Arena, Prime Minsters’ Park, and the 7th Hole Concession, stood at $52,595 on year-to-date basis. This represents 49 per cent of what the operations have been projected to make for the full year.

While the report does not explicitly state this, Boulet emphasizes that the numbers in the report reflect the performance of the venues until the end of July.

“Currently we are projecting to meet our overall budget target for 2014,” he said, and added they can improve on that amount and this will be the target going into the new year.

The report, doesn’t include the first few months of the 2014-2015 hockey season, particularly the concession sales generated at Prince Albert Raider games.

There’s also the liquor revenues generated at Raider games and at the 7th Hole concession that are not included in the report because the City does not sell liquor. The liquor revenues in both cases go to the Raiders and to the Prince Albert Golf and Curling Club directly.

Only two of the facilities’ concessions mentioned in the report had results that have been falling short of expectations, the Kinsmen Water Park and the 7th Hole concession. With the closure of the slides at the water park, came decreased admissions, and in turn, lower concession sales. Weather hurt sales in May and June at the 7th Hole concession.

Boulet noted that the alcohol is the largest revenue generator at the 7th Hole Concession. At this location, the City is providing a service and in some cases, it costs the City money, he said.

“The question becomes … if we continue under the same agreement, then we have to be OK with a service at that location. If we’re not OK with a service and we want to see that location as a profit centre, then I think we need to re-visit that agreement with the [Prince Albert] Golf and Curling Club in order to determine if changes need to be made. Or do we need to operate that location, or is it better operated by somebody else?”

In the follow up report, Boulet said the department will also be reviewing the menu options, which would give a better picture of what kinds of inventory controls need to be in place. He added that they will be reviewing the vending and ATM agreements that are coming due in 2015.

In response to the original report, Coun. Martin Ring asked administration to consider different options, and suggested looking at the City of Warman’s experience with privatized concessions at its Legends Centre facility.

The Legends Centre opened in 2012 — the year Warman attained city status – and it includes a hockey arena, indoor soccer fields and space for other programs. In the 2011 census, Statistics Canada reported that Warman, then a town had a population of 7,084, compared to the Prince Albert’s population of 35,129. 

The City had always planned to have two private spaces at the Legends Centre, starting out with one that was envisioned to be a concession/restaurant, Warman’s recreation and community services manager, Paul McGonigal said via telephone on Friday.

“And it has taken off from there. With the business that the Legends Centre has generated, we actually now have three different vendors in our facility.”

At the Legends Centre, two large operators and one smaller one run the concessions, Subway Restaurant, Crave Yogurt Bar, and Twinses Café and Catering, respectively. McGonigal said in an email that the City “estimates revenues from the food vendors at the Legends Centre of approximately $41,400.00 in 2014.”

For the City of Warman, having privately run concessions is more convenient, McGonigal explained via telephone. The City signs a lease that contains the expectations of what the lessee is supposed to be providing as a service, and then the City steps away from that, he said.

“For us to do it privately, to have private lessees in our facility, it’s been a good relationship so far. We’ve had good people in, we’ve had good businesses in, so we’re very happy with what’s happened so far.”

tjames@panow.com

On Twitter: @thiajames