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Councillors agree to one year trial run for concession operations

Posted July 8, 2014

New Tecumseth council agreed last night to let its parks and recreation department take on the task of operating concessions in Beeton and Tottenham arenas, for at least a year to determine whether its an economically viable opportunity which would also have the affect of increasing the level of service to users.

The department has been running make-shift concessions since the Town terminated the contract of the previous operator last April, and with the hockey season looming, a decision was required as to whether concessions should continue as in-house operations or offered out to private operators via Request for Proposals.

Gord McInnes, a candidate for Ward 2, asked councillors to forego the concessions, and instead put them back out to tender.

"I'm asking council to seriously consider not extending the hospitality aspect of the Town's involvement in these affairs," said Mr. McInnes during his deputation on the subject. "We've got plenty of evidence that we're not the best people on the job. You should make a decent profit off any food products, and if in fact we can't make them off alcohol and other food in other locations, how are we going to make it off hamburgers, hot dogs, and cold chips and pop? I think this is a mistake."

Ward 3 councillor Paul Whiteside, who did vote in favour of the one year trial, nonetheless expressed echoed the concerns related to the revenue projections and profit margins highlighted in the report in light of continued missed targets generated by the Hornet's Nest at the NTRC.

The report to council prepared by Wendy Rowland, Senior Supervisor Recreation and Community Services, shows Tottenham would operate 36 hours per week for 24 weeks, at an estimated cost of $26,500 and generate $35,000 in sales; and 22 hours per week in Beeton, at a cost of $17,000, one revenues of $28,000.

"When we did operate it ourselves, we were not making money, we were not breaking even. And when I look at the Hornet's Nest information, we were projecting a 19 per cent return on each dollar we sold," said Mr, Whiteside. "I look at the financial considerations included here with this report, it shows we're anticipating a 24 per cent profit margin out of Tottenham, and a 39 per cent profit margin out of Beeton Memorial Arena, and I don't really think that's realistic, based upon our experience in particular in the New Tec rec centre in the Hornet's Nest."

Ms. Rowland said the numbers came from a comparable facility, "real numbers, actuals."

"It's not a business unit that we should be comparing as there's liquor versus hot dogs and snacks, there is a substantial amount of overhead and a higher inventory required to run The Nest," she said. "The snack bars are totally different operations, and they're serving types of products such as soft drinks, and popcorns, the profit margins are much higher."

Ward 1 councillor Bob Marrs said he supported the idea, and "I think it's very viable."

"Let it get going, if it's going well, then the new council won't have to change it," said Mr. Marrs. "Until we do it, I'm not going to say it can't be done because of that. I do 100 per cent agree the Hornet's Nest is completely different."

Ms. Rowland explained that start-up costs would include cleaning up the concession areas, and for at least the trial year, equipment can be leased.

"It is to our advantage to be more involved, instead of sticking our big toe in the water, let's get in and do it, and do it well," she said. "There's a bit of a community service associated with these spaces as well. We've learned over the last few months without that service our community is not happy, so we're in a position of walking a fine line between operating businesses in an aggressive manner and offering a service to our community, I think that both our concession areas, our vending, and the Hornet's Nest fall under those categories."

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