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City rejects IceArizona’s first budget proposal

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Posted: Wednesday, July 30, 2014 10:14 am

The City of Glendale refused the proposed Arizona Coyotes fiscal 2014-15 budget for the management of Jobing.com Arena, turned in May 30 based on numerous questions the city had about the proposed budget.

The deadline to submit the budget was May 31, which the team met, but in a letter dated June 12 to Anthony LeBlanc, president and CEO of IceArizona, the city addressed the main concerns as to why the budget was being rejected.

The city addressed numerous items to the Coyotes owners in a letter from Glendale Financial Services Executive Director Tom Duensing. Those questions were:

● The management fee of $15 million payable from the city to Ice Arizona is not identified anywhere in the budget.

● The capital improvement contribution of $500,000 payable from the city to IceArizona Manager is not identified anywhere as revenue in the budget.

● A budget item is not separately identified for items such as total parking revenue and subsequent amounts remitted to the city from hockey and non-hockey events and ticket surcharge revenue and subsequent amounts remitted to the city from hockey and non-hockey events.

● Naming rights revenue and subsequent amounts remitted to the city from hockey and non-hockey events.

● Annual rent, safety, and security amounts remitted to the city for hockey and non-hockey events.

The submitted budget showed revenues of $7,025,525 with expenses totaling $12,794,721 for a net operating loss of $5,769,196 for the fiscal year ending June 30, 2015.

The largest expense for non-event related expenses is $5,540,922 spent on event labor and event expenses while they list $965,293 for executive management expenses.

In his letter to IceArizona rejecting the budget, Duensing points out how the city will assist the team in producing their budget.

“To assist you in understanding the city’s concerns and how they may be alleviated, the city will be forwarding you a draft budget template that we believe captures the necessary elements of a budget that meets the standards set forth in the agreement.”

When contacted July 22 via e-mail, Assistant Finance Director Vicki Rios said the city had, “met with (IceArizona) last week to discuss it and they are working on revising it, but we have not received it yet.”

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1 comment:

  • GlendaleThorn posted at 10:38 am on Wed, Jul 30, 2014.

    GlendaleThorn Posts: 238

    So, IceArizona is having issues with accounting for where the $15 million 'arena management fee' is actually be used for?

    No surprise there.