The Tribune Democrat, Johnstown, PA

October 4, 2012

County aiding arena

Cambria asked to pay bills for utilities, management fees

Sandra K Reabuck
sreabuck@tribdem.com

EBENSBURG — At a time when Cambria County is facing a cash-flow crunch, it is forwarding tens of thousands of dollars to the War Memorial Arena to pay bills, county Controller Ed Cernic Jr. said Thursday.

Cernic said that he is concerned that requests for more money will push the total past the $140,000 that was allocated by the county for the arena for 2012.

Last week, a check for $30,000 was cut to pay utility bills, Cernic said. That was the first payment this year, he said.

Then, this week, the War Memorial Authority asked for an additional $60,000 for what initially was described as utility

bills.

When Cernic inquired about the request, he was told the $30,000 was used for payroll, with the additional money needed for bills.

Cambria, as is usual at this time of year, has a cash crunch. Revenues are slow to come into the county coffers, and payment is being delayed on some bills, Cernic said.

Dean Gindlesperger, authority chairman, said the authority is not in financial straits and that the money was needed to pay SMG, the manager of the War Memorial Arena in Johnstown and the North Central Recreation Center in Ebensburg.

“Summer months are slow (in revenues) without hockey, and this is for SMG for managing the facility,” he said.

President Commissioner Douglas Lengenfelder, noting that none of the county’s allocation had been paid prior to a week ago, said, “Nobody should be surprised that we aren’t asked for the $50,000 additional (on the $140,000) allocation).”

As for reports that the arena may be facing hefty financial obligations, Lengenfelder said, “Nobody knows. That’s why we’re doing an audit. We want to know exactly where they are. I want to see what a CPA says. It’s too early to say.”

At the authority’s previous meeting, the commissioners, who were in attendance, indicated the county would be willing to pay for an audit to give all parties involved an idea of where the arena and recreation center stand financially.

That audit, Lengenfelder said, will provide a “baseline” for when a new general manager – to be named by SMG – takes over.

In early September, Mike Silva resigned as manager, and Tom Grenell was named acting GM

Both Lengenfelder and George Arcurio III, authority treasurer, said that the audit also will be useful as the authority  considers whether to extend the management contract with SMG.

“We need to know what it will take to fund the place and keep it going,” Arcurio said.

SMG Worldwide was retained in July 2009 under a five-year contract, which called for an annual $325,000 management fee over the first three years, plus 15 percent of any profit from operations. In the fourth and fifth year, it is to be paid $10,000 a month, plus the consumer price index percentage and an incentive fee.

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