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Rink's 'surplus' due to subsidy

October 20, 2005|by DANIEL J. SERNOVITZ

HAGERSTOWN

daniels@herald-mail.com

The Washington County Sports Foundation appears to be operating in the black for the first time since it was founded in 1996, but the nonprofit organization that operates the Hagerstown Ice & Sports Complex remains dependent on the city to help pay its bills.

City Finance Director Alfred Martin said for the fiscal year ended June 30, 2005, the city paid the foundation $78,892 toward the cost of the skating rink's utilities, including electricity, water, sewer and gas. Martin said he expects that figure to be about the same or slightly less this year.

Without the subsidy, the foundation could not have posted a $4,729 surplus for the 2004 fiscal year and would not be in position to project a $19,772 surplus to end this year, Martin said.

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"Without that support, yeah," Martin said. "The positive trend is that we're looking at a hopeful lessening of that support."

The foundation would be looking at a nearly $60,000 deficit without the subsidy, though Martin said he believes the foundation is showing strong signs of improvement.

He said it is a positive sign that the foundation recovered from a $22,669 net deficit in the 2003 fiscal year to a $4,729 surplus in 2004.

Britton Miller, chairman of the foundation's executive board, presented the foundation's annual report to the mayor and city council during Tuesday's work session. Miller said the organization has struggled with its finances for much of its nine-year history, but he believes the foundation is beginning to chip away at its annual deficits.

The foundation, formed in June 1996 according to the Maryland Department of Assessments and Taxation, has operated the skating arena since the city built it in 1997. The city owns the facility and leased it to the foundation until last fall.

Citing a desire to have more control over the foundation's finances, the city council drafted a new agreement in October 2004 under which the foundation would no longer lease the facility but rather would oversee its operations, staffing and upkeep under an operating management contract.

Martin said as part of the agreement, the city pays the facility's utility bills and no longer charges rent to the foundation. In return, the foundation yielded some financial control to the city and agreed to serve on an oversight committee with city staff and members of the banking community.

Martin said neither the city nor the foundation can predict how long it will be before the city no longer needs to subsidize the foundation's operations. The foundation is required under the new agreement to regularly update its projections and its long-range business plan.

Neither Miller nor Kristy Pottol, treasurer of the board, returned calls for comment.

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