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Board Meeting July 25th, PAYSA Ice Rink Purchase Proposal

By OHA Communications, 07/18/16, 1:30PM CDT

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Monday, July 25th at 6:30pm the OHA board will meet at First National Bank in Pierre for the July board meeting.  On the agenda is the PAYSA Ice Rink Purchase Proposal.  Below is the PAYSA Purchase Committees’ proposal that will be presented to the board.  Please take time to review this article.  Should this be approved, OHA board will also modify the 2016/2017 budget to reflect the purchase.  As always all OHA members are invited and encouraged to attend the meeting.  Comments about the proposed purchase plan can also be submitted by email to OaheCAPS@gmail.com or mailed to PO Box 87, Pierre, SD 57501.  Comments must be received by 12:00 noon on Monday, July 25 so they can be included in the meeting.

 

Oahe Hockey Association: PAYSA Rink Acquisition Proposal

July 12, 2016

PAYSA Purchase Proposal

The Oahe Hockey Association (OHA) will purchase the PAYSA ice rink from the PAYSA Foundation, Inc., including the land (1.55 acres), building, and all equipment and fixtures (Zamboni, boards, lawn mower, exterior building, etc.) for $620,000.  Recent appraisals place its current value at more than $800,000.  OHA’s annual debt service on the loan (financed through First National Bank for 25 years at 4.25%) would be about $40,400 per year.  While OHA will own the facility outright, Chad and Sandra Griese will retain an interest of $70,000 in the facility as a guarantee on the loan, which OHA would buy out sometime before October 1, 2021.  The PAYSA Foundation will be dissolved.

How do we pay for it?

The Oahe Hockey Association must pay about $40,400 per year in debt service.  Four components will be necessary to pay for the facility, two of which are achieved within the current budget structure.

1. OHA is currently paying PAYSA $15,000 per year in rent, which can offset the debt service.

2. We propose to adjust the raffle ticket sales structure.  Currently, each family must sell 10 raffle tickets per season.  OHA can generate $7,000 per year by changing the requirement to 12 tickets per skater per season; additional skaters within a family will be required to sell an additional five tickets per skater, with a maximum of 22 tickets per family.  [A family with two skaters would be required to sell 17 tickets (12+5=17); a family with three or more skaters would sell 22 (12+5+5=22).]

3. We propose an adjustment to registration fees, which are among the lowest in the South Dakota Amateur Hockey Association and have not been changed in two years.  The proposed rate structure is listed below and would generate approximately $5,000 per year.

Varsity/JV                    $275
Girls                             $235
Bantam                       $235
PeeWee                       $210
Squirt                           $175
Mite Travel                 $90
Mite In-House             $25
Mini-Mite Travel         $60
Mini-Mite In-House     $25
Learn to Skate             $25
 
4.  The remaining $13,400 in revenue would come from a variety of expense reductions and budget adjustments within the current Oahe Hockey Association budget.
Item                 2015-2016                   Projected 2016-2017              Funds Generated or Saved
1. Rent             $15,000                       $0                                            $15,000
2. Raffle          $37,000                       $44,000                                   $7,000
3. Dues            $28,000                       $33,000                                   $5,000
4. Sponsors      $25,000                       $27,500                                   $2,500
Tournaments   $0                                $2,200                                     $2,200
Gate                $15,000                       $20,000                                   $5,000
Passes              $5,700                         $6,700                                     $1,000
Advertising      $1,200                         $300                                        $900
Printing           $1,000                         $0                                            $1,000
Shadow Box    $4,000                         $0                                            $4,000
Total additional revenue generated (or saved) in 2016-2017 =        $43,600
 

In addition, discussions are ongoing regarding a number of different one-time payment options to reduce the amount necessary for annual debt service – building naming rights, additional sponsorships, grants, and other possibilities.  Should any/all of these one-time revenue sources be realized, the overall OHA budget may be adjusted accordingly.

It is anticipated that PAYSA will generate enough revenue (from figure skating, summer recreation, camps, etc.) to pay its operating expenses (utilities).  This had been the case prior to the OHA lease.  However, OHA has a contingency fund of about $10,000 if operating expenses exceed expectations.  Should that happen, we can re-evaluate options next year.  It also demonstrates the need for a solid team of individuals for PAYSA scheduling and management.

Who runs it?

The Oahe Hockey Association will need a team of individuals to assist in operating PAYSA.  We anticipate no additional increase in volunteer hours, though some duties may be shifted from Expo to PAYSA.  The current process of each team/level caring for and maintaining the PAYSA ice and facility during/after each use (Zamming the ice, cleaning up the benches, locker rooms, and warmup room, etc.) will continue as it has in the past.

The potential management team would include:
Management Committee: Craig Davis, Chad Griese, Jim Wedin, Keith Briggs
Director of Non-League Activities: Jim Wedin
Scheduler: Craig Davis
Website: Manage in concert with OHA website - Lisa Lee
Facilities: Jon Herman, Chad Griese, Volunteers
Opening Team: TBD