WENATCHEE — For the first time since it was built, the Town Toyota Center next year will not rely on the city of Wenatchee for any of its operations.
“As of Jan. 1, it will be running as a stand-alone, independent public entity,” said Pete Fraley, the arena’s attorney.
“Regardless of its (the arena’s) financial situation, the city will no longer have an obligation to its operations after this year,” said Wenatchee Mayor Frank Kuntz. “That’s the way it should be. Now that it’s debt situation is taken care of, it should be on its own.”
The governing board of the Greater Wenatchee Regional Events Center Public Facilities District, which owns the arena, voted Monday to hire its own accounting and information technology firms next year. Those are the last two services the city is still providing toward the operation of the arena.
The city of Wenatchee has been providing accounting services since June 2009 and information technology staff since October 2009. The city was paid for those services until last December, but provided it free for much of this year to help keep the arena financially afloat. When the arena’s debt was successfully refinanced in September and new sales tax revenues started coming in to cover the debt repayment, the PFD began paying the city again.
The PFD, which has an annual budget of about $3.2 million, will hire Cordell Neher to do its accounting and Key Methods as its information technology service.
The city has been entwined in the arena’s operations since the beginning, guaranteeing its $41.8 million debt and agreeing to pitch in money for operations when money was tight. City officials initially thought that would never be necessary, believing the arena would make enough money to cover its debt and operations. But it became evident quickly after the arena opened in 2008 that it would not make enough money to do that.
“Every time they had a shortfall, the city wrote a check,” Kuntz said.
The city of Wenatchee has paid as much as $1.7 million a year for the arena, primarily toward debt payments, over the last four years. Starting this year, the city also paid the arena’s kitchen equipment lease and provided free accounting and information technology services until September, when the arena’s debt was refinanced. The PFD took back over all those payments in October.
The one function the city has been doing since before the arena was first built, which is overseeing the receipt and distribution of the .033-percent sales tax kickback from the state, will also end next month. That tax rebate amounts to about $600,000 a year. The PFD will be responsible for that starting Jan. 1.
The tax kickback initially helped pay for arena operations, then was used to help pay mounting legal bills associated with the debt. For part of this year, it was paid as interest to some bondholders on the outstanding debt. Since the debt was refinanced, the money is now flowing back into the arena’s operational coffers.
The city also should not have to make any contributions toward the arena’s debt payments next year for the first time. The City Council has budgeted $200,000 in case sales tax receipts are not large enough to cover debt payments next year, but that is not expected to be necessary.
“When the new (PFD) board started, our goal was to get the city out of the middle and let this thing (the arena) run on its own,” Kuntz said. “The city doesn’t need to be involved in the day-to-day operations anymore.”
Michelle McNiel: 664-7152