Taxpayers will be responsible for a subsidy of almost $900,000 to Mosaic Place next year, even though the return of live sports and entertainment acts is not guaranteed.
The initial budget that Spectra Venue Management Services put together for 2021 projected revenues of $1.76 million and expenses of $2.5 million, leaving a deficit of $753,722. By including venue management fees of $154,585, the required subsidy would have been $908,306.
In comparison, this year’s subsidy was roughly $1.3 million.
However, the required subsidy will not be as much as first thought. The provincial government provided an economic recovery rebate of $39,000 and a rink rebate of $5,000, which decreases the overall subsidy to $864,306.
During a recent 2021 budget deliberation meeting, city council voted 5-2 to approve the Mosaic Place budget. Councillors Jamey Logan and Dawn Luhning were opposed.
A different year
“2021 does look different,” said general manager Ryan MacIvor.
Spectra is working with its hockey partners about a return to play, but that changes constantly, he continued. The management organization is also working with the Saskatchewan Health Association to understand its decisions better. That is why Spectra expects activities — such as meetings, events and curling — to potentially return in the third and fourth quarters of next year.
There will be a decrease in attendance and activities in 2021, said MacIvor. This year, scheduled events were 133 and expected attendance was 134,750 persons. In actuality, there were 88 events and paid attendance of 89,652 individuals. Spectra expects to host 109 events next year and see a paid attendance of 115,950 persons.
The management company expects to see several challenges in 2021, including increased cleaning and safety costs, increased carbon tax, and additional building maintenance costs. The lack of steel rigging prevents the building from attracting events consistently; food and beverage stations use decade-old cash registers and need to be replaced with point-of-sale machines; and revenue from advertising sales and premium seating is expected to decline.
There could be cost savings by replacing all traditional fluorescent light bulbs with LEDs. A new revenue-generating ticketing software could also be licensed across the province.
Other expenses
An “indirect expenses” section in the budget says curling costs are expected to increase to $373,576 from $303,481, said Coun. Crystal Froese. She also wondered what the “overhead burden” was since that line item increased to $678,556 from $597,643.
With curling, this cost is about accounting for utilities and better understanding that segment of the business, MacIvor said. The overhead burden line item focuses on areas such as taxes, utilities, audits, insurance, phone lines and photocopiers.
While Spectra provided a realistic prediction of what operations could look like when the situation improves, Froese didn’t see any contingencies or “what-ifs” should events such as the WHL and curling not happen.
“I’m trying to be optimistic,” she added. “I don’t want to have a chicken-little mentality. But it would have been good to see some expression in the budget to reflect the times we’re in.”
Pandemic a factor
What bothered Luhning was the projected total indirect expenses of $2.51 million, a $253,069 increase from this year. She was concerned that the budget didn’t factor in the pandemic, since the Western Hockey League — the Warriors are the biggest tenant and biggest economic sports attraction in Moose Jaw — is on pause. There are also restrictions on attendance in a building.
“What is a 30-person event going to do for Mosaic Place?” she asked, adding, “It’s not business as usual in the live event industry or the WHL.”
There are increased costs, MacIvor acknowledged. For example, this year, property taxes were roughly $26,000, compared to previous years of $19,000. Furthermore, costs have gone up for audits, utilities and building repairs. Next year both ice compressors are also due for an overhaul.
Difficult budget
The budget was impossible to work through due to the pandemic, said city manager Jim Puffalt. MacIvor attempted to maintain revenues by cutting expenses elsewhere and making changes. Spectra can still provide a service, but fewer people can use those services.
“2020 and 2021 are somewhat of strange years, so it’s hard to say what it looks like,” he added. “We’ll know what it looks like in 2022. We expect full revenues are back and we expect to gain herd immunity by the fall.”
While it’s difficult to think about what 2021 could look like, Coun. Heather Eby was willing to give Mosaic Place the chance to have a good year. If nothing happened next year, there would probably be savings.
“… if the pandemic goes away and we can have hockey and other events there, Mosaic Place will be an excitement generator again and a place for people to go to be entertained and do things they love to do,” she added.
“We hired Spectra to do a job for us. I’d really like to see what they can do,” said Logan. “Given the budget, I’d like to think they can turn this ship around. However, it is a different time and I’m not sure the budget presented shows the times we’re in.”
