Ulin Rink

On January 11th, the Department of Conservation and Recreation issued a Request for Proposals on five rinks in the greater Boston area, including Ulin Rink in Milton. The RFPs invite bids by interested parties to lease these rinks on a five year basis and allowed municipalities a “prequalification period” during which a municipality could submit an application on a prequalified basis to take over the management of the rinks. The deadline for such an application was February 17th.

On February 18th, the issue was raised at the Selectmen’s meeting by members of Milton Youth Hockey during Citizens Speak. In the ensuing discussion, Chair John Shields characterized as a lie a commitment by Senator Brian Joyce that the town would have more time to respond.

On March 5th, the Boston Herald ran a story that presumably passes for journalism in that publication. In it, the reporter acted as nothing more than a public relations organ for a group of Milton residents who maintain against all reason that private operation of Ulin Rink would have negative consequences for Milton citizens. John Shields was quoted as asking, “what’s it in for Senator Joyce” in describing Joyce’s support for the town utilizing a professional management company to manage Ulin Rink.

The prequalification period has been extended to May 3, almost 4 months since the state issued the RFP’s. One hopes that Mr. Shields, Chair of the Board of Selectman, is doing more than issuing the intemperate remarks he’s known for. Not only is the clock ticking, but it should hardly be news to the Town that the state has been trying to get out of the ice rink management business for some years now. Over 70% of the state owned rinks are managed by non-state entities, and when the five urban rinks are under lease, only 9 of the 43 state rinks will still be managed by the state.

Senator Joyce had planned to discuss this issue further with the Board of Selectmen at their meeting Thursday night. Sometime Wednesday, the Senator was informed that Ulin rink was not on the agenda.

I asked the Senator to send me what he was going to present, and after reading it, I asked him if I could publish the material on my blog. He agreed. This is an important issue for the town. It is important for the Selectmen to examine all their options and not just assume the town or a non-profit with no experience should attempt to run this multi-million dollar asset.

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March 17, 2010




Dear Town Officials and Interested Citizens,

A fair amount of concern and some misinformation have circulated recently regarding the future of the state owned and operated Max Ulin Rink. I write to inform you of the current situation. This week the Massachusetts Senate again passed legislation that would lease this estimated $5,000,000 facility to the Town of Milton for twenty-five years at a rate of $1 per year. Should that legislation not pass the House of Representatives, the Patrick Administration will instead move forward with its plan that does not require legislative approval to offer the facility to the Town for five years, and if refused, to private entities.

It is my sincere hope that the House will pass my bill, a variation of which has passed the Senate for eight consecutive years, for three reasons:

1. State taxpayer savings of at least $12,500,000 over twenty-five years.
2. New revenue to the Town of Milton of an estimated $2,500,000 over twenty-five years.
3. Professionally run year round facility, with abundant low cost ice time available to Milton’s High School and Youth Hockey programs.

State Taxpayer Savings of $12,500,000

The current annual operating loss of Ulin Rink is some $334,000 and growing. Also, money is not being set aside for necessary and inevitable capital repairs and improvements. Thus the estimated twenty-five year cost of $12,500,000 to the state’s taxpayers if current operations remain unchanged is likely a conservative one.

Moreover, DCR Commissioner Rick Sullivan has indicated to me that inaction is not an option in light of a projected 30% cut in DCR’s operating budget. He believes that the department must permit or lease the facility in order to ensure its continued long-term operation.[1]


Estimated New Town Revenue of $2,500,000

Senate Bill 2327 would not only professionalize operations at the Ulin Rink, save state taxpayers millions, and result in a better facility remaining open year-round; it would also create a new source of revenue for the Town.

I do not propose that the Town hire additional employees with resultant salary, health care, pension and other costs, nor do I propose additional responsibilities for existing personnel. Rather, I propose that the Town contract with a professional rink management company to operate the facility at no risk to the Town, while simultaneously receiving new recurring revenue.

The state would, of course, insist upon an open and competitive bid process for the selection of such a management company. To aid in my calculations on this matter, I contacted FMC Ice Sports, which currently operates twenty-five public skating rinks in Massachusetts, to determine what they would offer to the Town for the right to operate Ulin Rink.

FMC would offer Milton a similar arrangement to that which it has with Boston, Chelmsford and Everett, and would pay 5% of all gross revenues to the Town, with a guaranteed minimum of $50,000 per year. Based on its past experience, FMC estimates that the Town’s revenue could eventually exceed $100,000 per year. Over a period of twenty-five years, that could result in over $2,500,000 in new revenue for Milton.

FMC or another company would also set aside 5% of revenue each year toward capital repairs and improvements, which would ensure a properly maintained facility.

Finally, FMC indicated that it would provide the Town with a bond that would protect the Town from any financial exposure, name the Town and Commonwealth as additional insureds on all liability, property, workers compensation and other insurance, and absorb any unexpected losses while maintaining payments to the Town.[2]

Guarantee Existing Ice Time and Price for Milton High School and Youth Hockey, as well as continued use of Locker Rooms and Storage Facility

FMC has indicated a willingness to ensure that both Milton High School and Milton Youth Hockey keep all of their existing ice time, that the rink rental rates charged to those teams be frozen for five years, and that any increases thereafter require DCR approval. No such written guarantees of ice availability for Milton High School and Youth Hockey currently exist. Also, ice rental rates would most likely rise if the state continues to operate the rink. An informal survey of rink rental rates conducted by my office indicates that the rates that would be paid by Milton Youth Hockey and Milton Public Schools under my plan would likely be the lowest in the region.

And since public officials recently raised questions concerning the conversion of a cinderblock storage room to a locker room by Curry College at the college’s expense, the DCR is now reviewing its policies that allow at least eight other non-profit organizations near-exclusive use of skating rink facilities. The DCR indicated that any changes to current policy would likely be uniform.

The Town could protect the current exclusive usage of locker room facilities by the Milton High School girls’ and boys’ hockey teams at Ulin, the exclusive storage facility usage by Milton Youth Hockey, and, if desired, the locker room usage by Curry College, as part of its contract with a management company.

Better Maintained and Operated Facility Open Year Round

By professionalizing the management of the Max Ulin Rink, the Town and its skaters would enjoy a better maintained and operated facility with double the amount of available ice time for our children.

My own experience as a parent of five hockey players has convinced me that private operators run better rink facilities than the state. A noted public policy institute reached the same conclusion: The Pioneer Institute for Public Policy Research issued a White Paper in 2006 called Long-Term Leasing of State Skating Rinks: A Competitive Contracting Success Story, wherein it concluded that state owned rinks operated by private operators result in (i) increased ice availability; (ii) the least expensive ice rentals in the state; (iii) greater rink attendance; and (iv) more capital investment in rink improvements.[3]


Conclusion

I believe that Senate Bill 2327 would save state taxpayers at least $12.5 million over a period of twenty-five years, create $2.5 million of new revenue for the Town over that same period, and ensure that Milton’s youth enjoy an abundance of inexpensive ice time in a well maintained, professionally run facility. Alternatively, if Senate Bill 2327 does not become law, I believe that the governor will exercise his prerogative to permit Ulin Rink for five years in order to save very limited state resources for higher priority items. While the latter approach would save state tax dollars and likely afford Milton’s skaters more inexpensive ice time, I believe that my legislation promises greater financial benefits to the Town.

Thank you for taking the time to read this letter and for the opportunity to represent you in the Massachusetts Senate. If you have any questions concerning this or any other matter, please do not hesitate to contact me by email at bjoyce@senate.state.ma.us or by telephone at my office (617) 722-1643, or at my home (617) 696-0200.

Sincerely,

Brian A. Joyce
State Senator

[1] Commissioner Sullivan’s letter dated March 15, 2010 is Attachment 1 to this letter.

[2] FMC’s letter dated March 8 is attached to this letter as Attachment 2.
[3] The Pioneer Institute’s White Paper can be found at www.pioneerinstitute.org/pdf/06_04_skatingrink.pdf. Other reports of note include the Department of Conservation and Recreation’s Interim Report with Accompanying Recommendations for Legislative Actions by the Department of Conservation and Recreation, Relative to the Feasibility and Merits of Executing Long Term Lease Arrangements for Recreational Facilities that are Under the Control of the Department found at: http://www.mass.gov/dcr/documents/rinks_report.pdf, and from the Office of the Inspector General, a November 2002 report entitled Long-Term Leasing of DEM Skating Rinks, which can be accessed at: www.mass.gov/ig/publ/demrinks.pdf. The IG’s report notes that its review was as a result of my request to ensure that state rink leases maximize state revenues, maintain full access to skating for the public at reasonable hours and rates, and maintain sufficient oversight to ensure the taxpayers’ interests were protected.

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March 8, 2010

Senator Brian A. Joyce Room 413-A State House Boston, MA 02133

Dear Brian,

Thank you for your inquiry on the potential third party operator proposals the Town of Milton could expect should it exercise its option to lease and operate the Max Ulin Skating Rink owned and currently operated by the Commonwealth of Massachusetts.

It is my professional opinion that a long term lease of the facility and subsequent bid for a management firm would benefit the Town and the citizens served by the Ulin skating rink.

My company currently operates twenty five public skating rinks throughout Massachusetts in partnership with the Commonwealth, municipalities and a college. In some instances we operate state-owned ice skating rinks as a third-party partner with municipalities such as the City of Boston (Roche Arena in West Roxbury), the Town of Chelmsford (Tully Forum), and the City of Everett (Allied Veteran’s Skating Rink).

These arrangements have proved effective in achieving the public recreation purpose of the facility while relieving the municipality of all financial risk as well as the burdens of management and facility programming in the specialized field of ice sports. I’m confident that a similar collaboration would prove to be the most effective approach to guaranteeing the rink serves the recreation needs of the community in the future.

The current RFP issued by the Department of Conservation and Recreation is a laudable attempt by the department to gain operating efficiencies within the constraints of existing legislative authority. However, a longer term lease could be more beneficial to the rink users and the town's taxpayers as it would allow an operator to implement proactive facility and programmatic initiatives necessary to expand services and reverse the current budgetary shortfalls.

The legislation you have filed that is currently under consideration in the legislature would authorize the Commonwealth to lease the facility to the Town for up to twenty five years on a prequalification basis – I am certain this would be the best outcome for all parties, most particularly the citizens served by the rink. This is similar to the agreements FMC and many municipalities have entered into directly with the Commonwealth. It provides the best opportunity to ensure the long-term success and stability of the skating rink.

In the following sections I will briefly outline what I believe would be possible in a long term agreement. I understand that an arrangement such as this would require the Town to initiate an open and competitive public bidding process. My intent is solely to demonstrate the potential benefits that could be achieved by the Town partnering in such a way with FMC or another professional ice rink management firm.

FMC Ice Sports (Facility Management Corporation) is a Massachusetts corporation established in 1992 for the purpose of operating publicly owned ice skating rinks. In the eighteen years since its inception the company has expanded to currently operate twenty five ice rink facilities across the Commonwealth of Massachusetts.

The company’s headquarters is located in Pembroke, MA with a senior management staff of over 20. This includes accounting, marketing, sales, maintenance and operations, information technology, concessions and programming divisions. This organizational structure provides for specialized talent and responsibilities in the critical areas of ice rink management, operation and programming.

Our team of senior management works closely with our onsite rink management and staff with extensive training and policy guidelines. As a mature and successful organization we offer a depth of expertise and knowledge of facility operation and ice sport programming that is unparalleled.

The firm has an unblemished record of success in our partnerships with public entities. In particular we have worked closely with the Department of Conservation and Recreation and have a strong organizational commitment to achieving the greatest potential of the DCR rink system. This is not simply a business for us; we take very seriously the public responsibility that comes with operating DCR rinks.

Financial Terms

We believe that the Ulin Skating Rink can be operated in a self-supporting manner with the appropriate application of efficient operating practices and proactive programming and marketing of the facility. As such, we would be willing to assume all financial risk of operations in an agreement with the Town. In addition our revenue and expense projections provide sufficient confidence to make the following statements:

1. We would pay the Town 5% of all gross revenues generated at the facility, with a guaranteed minimum of $50,000 per year. In the early years of a potential agreement this minimum amount would equate to more than 10% of revenues, however we are certain that we can significantly grow revenues by expanding the programs and services available to the citizens and extending the operating season. It is entirely possible that the Town could eventually realize $100,000 or more per year in new revenue. In our public/private partnership at the DCR's Roche Arena in West Roxbury we have consistently increased fee payments by expanding to year round operation, generating approximately $80,000 in 2008 and 2009 that was split between the city of Boston and the Roche Rink Fund, and we expect that payment to increase.

2 We would dedicate an additional 5% of total gross revenues to a set-aside capital sinking fund maintained by the Town or the Commonwealth (as the parties agree) for the sole and exclusive purpose of funding capital repairs and improvements to the facility over the life of an agreement. We believe this amount would be sufficient to ensure available capital for major repairs, replacements and improvements given the existing condition of the facility.

3 Guarantee the Milton High School boys and girls hockey teams and Milton Youth Hockey their current ice rental rate for the first five years of an agreement. Increases subsequent to that time would be subject to DCR authorization to ensure the fees remain affordable.

4 Guarantee the Milton High School boys and girls hockey teams and Milton Youth Hockey their existing ice allocation so long as the ice is used exclusively by the respective programs for the purpose of operating their public and not-for-profit athletic programs. There are currently no such guarantees as to retaining the same ice time and not having increased pricing from the DCR.

5 Guarantee the Milton High School boys and girls hockey teams will maintain their exclusive use of two locker rooms during their season, and the Milton Youth Hockey maintains a storage facility, so long as this practice is approved by DCR (as it is currently).

6 FMC’s compensation would be derived from the operating surplus, if any. Operating deficits would be absorbed by FMC with no risk to the Town. A bond would insure financial performance by FMC. This results-based model incentivizes efficient and customer focused management as well as proactive programming that will increase recreational opportunities for the citizens.

7 Liability, building / property, machinery, workers compensation and auto insurance would be provided by FMC with the Town and Commonwealth as additional insured where appropriate to protect both entities from risk.

8 Provide a detailed monthly report of revenues and attendance to the Town and DCR as well as an independently audited annual financial report. We would utilize online scheduling software that allows the Town or any citizen / user to view ice schedules, public sessions, programs, special events, etc. ensuring financial transparency and accountability.

Management Approach

As the largest operator of publicly owned ice rink facilities in the nation, we have a keen understanding of the need to achieve the public mission in an efficient and creative manner. We don’t view our operation of these important public assets as “privatization”, rather our role is to achieve the maximum public benefit by increasing utilization and extending the operating season, this in turn provides the revenues needed to sustain the operation of the facility without subsidy. In an agreement with the Town we would propose to:

1 Employ all management and support staff for the quality operation of the facility. FMC has created companywide training and development programs as well as operating procedures and guidelines that are centered on the principles of providing a safe, clean and well-maintained facility with affordable user fees to encourage participation.

2 Extend the operating season with the goal of year-round ice operation. While the demand for ice skating and hockey are certainly seasonal, there is a significant percentage of the skating community that would utilize the facility during the spring and summer for recreation and competitive skating as well as hockey leagues and development programs.

3 Expand the existing public skating schedule as per the requirements of DCR.

4 Develop new programming to increase the hours of operation without displacing the existing youth hockey, high school and college users. Our programming focus would be on developmental, niche uses such as ISI recreational skating, adult introductory classes and off-season programs that will supplement but not compete with the existing non-profit youth groups.

5 We would seek to operate the snack bar, vending and skate rental concessions “in-house”, generating needed revenue for rink operation and maintenance.

Maintenance and Operation

FMC would be responsible for all repairs and maintenance to the facility, equipment and grounds. Single repairs exceeding $10,000 or aggregate repair costs over $20,000 in a year would be deducted from the capital reserve sinking fund.

As an operator of a large number of ice rink facilities within a geographic region, we are able to achieve many significant efficiencies in the maintenance and operation of ice arenas. These include:

1 Employ a central maintenance staff that includes a certified refrigeration technician, ASE ice resurfacer mechanic, carpenters and painters.

2 Bulk purchase operation supplies and industry specific materials to achieve best pricing and terms.

3 Aggregate the purchase electricity and natural gas in the competitive market to control these large operating expenses.

4 Negotiate preferred pricing from refrigeration, mechanical, electrical and other service contractors.

5. Maintain spare ice resurfacing equipment in regional “hub” facilities for transport in emergency as well as to allow machines to be pulled from service for extensive maintenance and overhaul.

6. Work with utilities to access energy efficiency grant funds to help defray the cost of needed efficiency upgrades at the facility, such as:

a. A low emissivity ceiling over the ice

b. Sealing and insulating openings in the building envelope that are allowing large amounts of moisture laden untreated air to enter the building

c. Modify the refrigeration plant to optimize brine flow in the split circuit and upgrade controls with CPU automation

5 Employ an in-depth preventive maintenance routine on all equipment, including daily, weekly, quarterly and annual maintenance will ensure assets are cared for in the highest quality manner.

6 Purchase an electric powered ice edger to eliminate noxious emissions from the existing gasoline fueled ice edging machine.

7 Provide quality figure skating and hockey rental skates to encourage attendance at public skating sessions.

In closing, I sincerely appreciate you taking time to review this outline and would be happy to supply more information or discuss the contents in greater detail. I understand there are many considerations that will factor into the Town’s decision on how best to proceed on the Ulin Rink. I hope I have provided some information that will be useful in those considerations.

As I’m sure you are aware, the Ulin Rink plays a very special and important role in the community. I thank you for your efforts it continues to serve that purpose and would urge the Town of Milton to give every consideration to operating it directly or partnering with a professional management firm to ensure it continues to have that positive impact on the lives of so many people.

Rob McBride President FMC Ice Sports