January 27/04 Report
1:30 pm

Started at 1:40 pm :

Jackson
Bruckler
McCarthy
Mitchell
Morelli
Whitehead
McHattie (non-member)

Three added information items to the agenda 7.1.1, 7.1.2, and 7.1.3.

8.1 Mohawk Sports Park 4-pad Arena (done first on request of Morelli because he had to leave early).

Very brief report from Bill Fenwick recommends acceptance and giving staff authority to finalize three agreements. Legal counsel not there.

Mitchell: concerned about proceeding without committee seeing agreements first. Can we amend recommendation to require agreements to come back to committee or just to its chair and vicechair?

Whitehead: What have we done with community in terms of consultation? Fenwick: meetings with ice-users and committee formed by previous council. No open public meeting with local people.
Whitehead: have we done any traffic studies? Fenwick: "the engineering department has looked at that and there was no need for a traffic study at that location". Whitehead asks if anyone from department is here. Gerry Davis responds: "There's no zoning change required for the lands, so a traffic impact study is not necessary. And the traffic department has reviewed the plans and they're fine with the layout, the access to and from the proposed facility. The existing infrastructure is suitable for the purposes to be used." Whitehead asks about street lighting in the area? Davis: "Yes there will be sufficient lighting. That's part of the overall development agreement. The developer has to install the lighting. Lighting of the facility for safety and security is part of that agreement."

Morelli: No question about the need and I strongly support this project. How many dressing rooms per pad. Fenwick "There are definitely 6 per ice pad, total of 24." Two teams on the ice, two coming in and two leaving.
Morelli: Due diligence. Was involved with the last double rink and many experiences with agreements with the private sector, "there is absolutely no way that I'll support this going forward without seeing the agreements and having some time to go over the agreement, both myself and with some consultation that I'm going to employ either thorugh legal counsel or those involved in operating arenas in general." "And in the future, I want to make it very clear that I don't expect to receive any of these agreements, it won't be sufficient for me to receive it on Friday and then have to vote on it by the following Wednesday." Spoke with Fenwick last week by phone on this. Morelli also opposed to having chair and vice-chair approve the agreements without it coming to committee and council.
Morelli also raises previous agreements assumed revenues that weren't realistic and that City does this with its own budgets. "Imperative" that the agreement "has a real solid escape clause". Move that it be deferred for at least a month. Good lead time to review the agreements.

Bruckler: joke about being opposed because he is sitting in Braden's seat. Wants to see agreements too, but what are implications of delay. What about a two-week delay? Fenwick: Delay should rightfully be asked because we don't have the agreements here. Will bring back no later than February 10th. Currently in hands of their lawyers. Mid-November would have two pads ready and the other two before the end of the year, providing everything falls into place.

Bruckler: "This might be a Braden question" No cost to the taxpayers? Mention of deficit. How to deal with that. Increase rates would be an option if things don't work out. Are user groups prepared to pay higher rates and have they being consulted? Fenwick: haven't been consultated on increases but know that there could be annual increases. "Alternatives have been considered so I think Yes, that protection is there, Yes, council would be made aware of it, either/or and it wouldn't be a situation where you'd find out about it two or three years after or when they're really in dire straits."

Jackson: Strong supporter of building more ice. I'm only ward where there's a direct effect on my community. Need an opportunity to consult with them before it's finalized. Either Feb 16 or Feb 19. Can't take done deal, must be proposal. Can't accept without documents provided first. Infrastructure improvement question to Gerry Davis? HAP is going to provide lighting and improvements. Davis: They'll just do improvements on the property itself, right within the boundaries of the site. Development agreement doesn't include street lighting on Mountain Brow Blvd. Jackson: old rural bumpy type of two lane road, pitch black at night, need to do due diligence to ensure that improvements are done that are needed. Ask for Gerry to get that information.

McHattie: draining development charges ($5 million leaving only $750K in reserve) for this, what are the implications, effects on other projects? Fenwick: can't answer that, doesn't know. McHattie: does this project generate development charges to pay for other infrastructure. Eventual answer from Rinaldo that it doesn't.

7.1 & 7.2 Budget presentations

CATCH reporter has copies, but didn't stay for these presentations. Left at 3 pm

CATCH reporter's comments on the Mountain Four-Pad Arena:

There is a big demand for this facility from ice users, hockey groups, etc. but it was turned down because of the constraints in the capital budget and the fact that this didn't stack up as most important thing to do. This led to negotiations, etc. that have generated this deal which allegedly will "have no impact on the taxpayer". This doesn't seem to me to be quite correct. I have the following concerns:

• we're losing a piece of King's Forest Park for this building and 350-car parking lot. This is a longtime problem in Hamilton where parks are considered "empty land" waiting for development of some facility - arenas, seniors centres, firestations, etc.
  
  
• the location is on a narrow windy road, and that will likely result in demands for upgrades that will cost the taxpayers plenty
  
  
• there's no mention in any of the documents about the availability of water/sewer services for this facility or who will pay if they are not there already. It is located on the opposite side of the Escarpment Rail Trail which is a cut at this location so only possible servicing would be hung under the bridge over the rail trail
  
  
• this is not a sustainable location. It has very limited transit service -- none on Mtn Brow and one line on Upper Kenilworth that's more than 500 metres away. Many other cities have rules that new sports facilities are not built on greenfield sites but instead are located on brownfields. A location in the lower city makes more sense from a sustainability perspective.
  
  
• Players and families waiting for games have no where nearby to go to spend their money in Hamilton. The restaurant in the arena has a captive clientele. It would make more sense to locate the arena close to existing commercial areas.
  
  
• hockey ice rates are subsidized by the taxpayers at the moment and so there are impacts to the taxpayers of having more ice space and therefore more users and more subsidies. It appears that part of the revenues of the private operators will come from the taxpayers and then be used to 'pay for' the operating and debenture costs of the facility
  
  
• This appears to be essentially an untendered project. The deal is being struck with Ellis-Don construction and a design company that approached the City in conjunction with Hamilton Arena Partners. The latter is being formed for the sole purpose of managing this facility. It's not clear they bring any management expertise to this facility.
  
  
• The city will share in the management and will have to pay staff for oversight purposes so these will be new operating costs in the budget. I haven't seen any info on how much this will be.
  
  
• the project will eat up nearly all the dedicated reserves for such facilities ($5 million out of $5.75 million) and this will preclude construction of a similar facility with these monies. This may not be a mistake since the monies are a dedicated reserve for this type of facility and we aren't about to build another one somewhere.
  
  
• this project requires borrowing by the City of $12 million. The explanation is that the debenture costs will be covered by user fees, but there's no guarantee this will occur.
  
  
• Even if the debenture costs are paid by revenues, there does not appear to be anything in the agreement that also sets aside realistic life cycle replacement costs for the facility, even though we are supposed to be doing this as a matter of policy
  
  
• The $12 million in borrowing constrains the City's ability to borrow by that amount. Finance staff have recognized that we've hit the debt ceiling and that further indebtedness may sink our credit rating. There are 235 projects deemed necessary this year that will not be funded because of a lack of capital dollars, at least part of which is a lack of debt dollars.
  
  
• a long string of improvements to existing arenas have sat in the queue for capital dollars since at least 1999 and still aren't being moved forward. It seriously appears that there may be a plan to let these rinks fall apart and eventually just shut them down.
  
  
• This facility will have higher user fees than the existing rinks, but this appears to set up a two-tier ice rental system. Those who use the new 4-pad will pay more and likely will represent a richer set of users and thus create a second-class set of users who can't afford this facility.
  
  
• There is virtually no seating provided, only a bit of standing room viewing at the ice surfaces. Instead, viewing is to take place from the restaurant on the second floor which will overlook all four ice surfaces. This design may be cheaper or perhaps it will mean that to view the games you have to buy food from the restaurant operators.
  
  
• The restaurant on the upper level will overlook the escarpment and may be quite a lucrative business for the private operators of the restaurant.
  
  
• Two teams on ice, two coming in, two going out TIMES four pads TIMES 17 players per team equals 400 players and may mean the 350-car lot will be full without any non-family spectators. For tournaments, which is what this facility is intended for, there will be players waiting to play their next game later in the day. Expansion of the parking lot may be on the early horizon.