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Council OKs deal to limit Grossinger Motors Arena losses to $350K annually
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Council OKs deal to limit Grossinger Motors Arena losses to $350K annually

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BLOOMINGTON — The city will cap its subsidies for losses at Grossinger Motors Arena at $350,000 a year for the remainder of its management contract with VenuWorks.

The City Council voted 8-1 Monday to amend its management agreement with the Ames, Iowa-based company for the city-owned venue, which ended fiscal 2018 on April 30, 2018, $665,099 in the red. The contract runs through 2021.

"We're saying ($350,000) should be the max, but everybody is going to work toward decreasing those losses even more," said Ward 3 Alderman Mboka Mwilambwe before voting for the change.

Ward 7 Alderman Scott Black said he voted "no" because he wants to see a more focused approach for reducing the arena's deficits more.

"I am ready to see better from the arena possibly," said Black.

The new cap is $150,000 lower than the $500,000 average annual operating loss that Lynn Cannon, VenuWorks' executive director for the arena, said in September was projected for the facility going forward.

If the operating deficit exceeds $350,000 VenuWorks will cover that amount by cutting up to 50 percent of its base management fee and other variables, according to the new terms.

The city currently pays VenuWorks an annual management fee of $114,000, plus 5 percent commission on food, beverage and other sales at the arena, including naming rights.

The amended agreement allows for exceptions, such as unusual costs associated with utility, building or maintenance costs, that would not be counted toward the deficit totals.

The arena also will be allowed to impose a "market rate" parking fee for events where more than 500 people are expected. The city would receive $1.50 per parked car, which is an increase from its current share of 50 cents per car.

VenuWorks' operating costs do not include the arena's construction bonds, capital improvement projects or depreciation, for which the city is responsible.

The facility has operated for most of its 13 years at a loss under VenuWorks and its former management firm, Central Illinois Arena Management.

Pension costs 

In other action, the council voted unanimously to ratify a three-year labor contract for about 100 city employees who are members of the American Federation of State, County and Municipal Employees Local 699.

Terms include several pay increases through 2021 as well as provisions that will limit pension spikes by eliminating the way sick leave buyback is paid for AFSCME members after May 1, 2020.

Eligible employees can opt to take their sick leave payouts over the final three months of employment, which raises the pay rate on which pensions are calculated. In some cases that increase requires the city to accelerate payments it makes to the Illinois Municipal Retirement Fund to cover the pension costs.

Employees who want to retire under that current structure would have to give notice by Oct. 31, 2019, and retire no later than April 30, 2020, according to contract terms.

An estimated 15 Local 699 members could choose to retire by April 30, 2020, said City Manager Tim Gleason.

The city previously eliminated the sick leave buyback benefit for employees hired after May 1, 2012.

Under a 1995 policy, however, about 198 of the city's 650 full-time employees were grandfathered into a policy that has the city buy back their unused sick leave. 

Since 2012, increased pension benefits have forced the city to make about $2.2 million in accelerated payments to the IMRF.

Gleason said he will be negotiating the benefit out of the city's other collective bargaining agreements and then implementing similar policies for full-time city employees who are not represented by unions.

Eliminating the sick leave buyback program for all employees could eliminate an estimated impact of $12 million in accelerated payments for the city, he added.

City clerk changes

The council also voted unanimously to reorganize the city clerk's department and promote, on Gleason's recommendation, Leslie Yocum to city clerk. 

Gleason said Yocum's annual salary of $100,000 is being increased from the $92,300 annual salary paid to former City Clerk Cherry Lawson because Yocum will have more duties, including supervising the contract administrator, a position she held until becoming interim city clerk in December. 

A full-time position in the city clerk's department is being reduced to part time, so the changes will result in an overall savings annually of $35,000 in salary alone, Gleason said.

Contact Maria Nagle at (309) 820-3244. Follow her on Twitter: @Pg_Nagle

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