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MINUTES OF THE

SPORTS ADVISORY COMMITTEE

Tuesday, October 20, 1998 - 9:30 a.m. - Room 405 State Capitol


Members Present:
    Sen. Alarik Myrin, Senate Chair
    Rep. Jordan Tanner, House Chair
    Sen. Scott Howell
    Sen. L. Alma Mansell
    Rep. Brian Allen
    Rep. Neal B. Hendrickson
    Mr. Hugh Daniels
    Mr. Howard Peterson
    Mr. Randy Will
    Mr. Max Hogan
    Ms. Sydney Fonnesbeck


Members Excused:
    Comm'r Brent Overson    
    Comm'r James Soter
    Ms. Lou Mueller
    Mayor Lewis Billings
    Ms. JoAnn Seghini
    Mr. Roger F. Cutler

Staff Present:
    Mr. Brian Allred,
        Research Analyst
    Ms. Janetha Hancock,
        Associate General Counsel
    Ms. Beverlee LeCheminant
        Legislative Secretary

Note:    A list of others present and handouts distributed are on file in the Office of Legislative Research and General Counsel.


1.    Committee Business - Sen. Myrin called the meeting to order at 9:45 a.m.

    Approval of Minutes of July 14, 1998 -

     MOTION: Rep. Allen moved to approve the minutes of the July 14, 1998 meeting. The motion passed unanimously with Sen. Howell and Ms. Sydney Fonnesbeck absent for the vote.

2.    Salt Lake Olympic Organizing Committee (SLOC) Budget -

    a.    Budget Presentation - Mr. Mark Tanner, Senior Vice President and Chief Financial Officer, SLOC, gave an overview of the SLOC budget. He indicated that the objectives of the budget are to: 1) minimize the cost while maximizing potential for success; 2) establish a baseline for action and control; and 3) allow for continued planning and definition of scope. He stated that SLOC's total budget is $1,000,000,453 and 38% of that amount is for operations. He said that revenues for the games are from broadcast rights, cash and value in kind, ticketing, licensing, and liquidation of assets at the end of the games. Mr. Tanner stated that the critical tasks ahead are to: 1) achieve revenue targets; 2) develop the information systems consortium; 3) secure federal funding; 4) recruit key personnel; 5) develop an operating plan; and 6) implement community programs. He told the committee that the International Olympic Committee will be giving final approval of the budget on December 10th.
    Committee discussion followed.
    
3.    Report of State Olympic Officer on SLOC Financial Plan -

    a.    Governor's Review and Approval of Financial Plan/Status of Projected Revenues and Expenditures - Mr. John Fowler, State Olympic Officer, told the committee that SLOC has undertaken a tremendous effort in preparing the budget and indicated that the process began over a year ago and has entailed much work. He said that one of the highly publicized issues relative to the budget preparation was the engagement of an outside consultant, Bechtel Corporation, to assist in the budget process. He stated that he would like to go on record in saying that Bechtel has done outstanding work and if SLOC would have had to hire permanent staff to assist in the budget process, it would have cost more to keep that staff on board through 2002 than what has been paid to Bechtel. In addition, Mr. Fowler indicated that he has never seen a project budget pulled together with such detail so far in advance.

    Mr. Fowler said that once the budget is completed, there is a process of review which includes a review by the International Olympic Committee. The third level in the budget process is a review by a finance committee of the board. The board has met on two occasions and the budget was presented to them in a meeting in late September and a public session to approve the budget was then held on October 8th. Along with those reviews, the mayor's office is now in the process of reviewing it. He indicated that there is a tremendous advantage from these detailed reviews as the detail lends itself to a continued credible review process both by management, the board, and anyone else that is interested in the process.

    Mr. Fowler said that the governor has requested an additional contingency work from SLOC to be done on the revenue side of up to $100 million to ensure that if the expenses rise to the level of the contingency and the revenues fall short of the anticipated revenues, the state will be protected from some kind of shortfall. He indicated that SLOC is working through the process of preparing that for its review. Mr. Fowler stated that two critical revenue sources in the budget are: 1) the private sector fund raising; and 2) federal government funding, and that SLOC will have a better feel for revenues and expense items by the end of 1999.

    Committee discussion followed.

4.    Break - 12:00 - 12:15

5.    The State of Utah and the Support and Promotion of Winter Sports after the Olympic Winter Games of 2002 -

    a. Background - Mr. Brian Allred, Research Analyst, distributed and reviewed an outline of the State of Utah and the Support and Promotion of Winter Sports after the Olympic Winter Games of 2002, a report summary, Sen. Myrin's and Rep. Tanner's response to the report and recommendations of the Utah Sports Authority, and the audited financial statements of the Sports

Authority.

    b.    Comment regarding USA Report and Recommendations - Mr. Don Leonard, Chair, USA Review and Futures Committee (Committee), indicated that the Committee has held meetings with Mr. John Fowler, SLOC representatives, and athlete representatives in reviewing past Olympic Winter Games to see how the venues and facilities were used after the games were over. Mr. Leonard stated that the Committee put together a report of its findings and recommendations and he reviewed those findings and recommendations with the committee members. A copy of the report is on file in the Office of Legislative Research and General Counsel.

    Mr. Randy Dryer, Chair, Utah Sports Authority (USA) responded to question #I of the co- chairs' response to the USA's report by saying that what USA hoped to accomplish with this report was to get legislators, citizens, and government officials to start looking long term beyond 2002 on the subject of sports and where the state wants to be ten years after the Olympic games. He said that USA would like the state to look at having a sports commission which would serve as an umbrella organization to help facilitate, coordinate, promote, and attract sports and recreation events, programs, and activities to the state to help develop sports facilities. He indicated that the state has made a significant investment into the Olympic facilities and will have been repaid that investment at the conclusion of the Winter Games, but USA is raising the question of whether the people of the state should consider making an additional investment to ensure that the Olympic facilities are going to be used by the youth of the state for recreational opportunities, as well as opportunities for sports development beyond the year 2002. He stated that SLOC is providing tourism benefits, long-term economic benefits, and immediate tax benefits for the state, but that those are transitory. The long- term benefit will be the opportunities that the facilities will provide for the youth of the state to enjoy, both recreationally and at a competitive athlete level.

    Mr. Leonard said USA is recommending that the state is well situated to benefit from amateur sports activities and events and to enhance the quality of life and economic benefits to the state, DCED should establish an advisory committee to help coordinate and benefit the department's strategy from the facilities it has. He indicated that USA is not advocating change in the policy of privatization of ownership of the Winter Sports Park or any of the facilities.

    Mr. Dryer responded to policy question #II by saying that the Utah Athletic Foundation (UAF) was intended to be the organization that will primarily own the facilities and insulate the state from continuing obligations and that USA is not recommending that the UAF should be under state control or that there should be state representatives on the UAF as it is a private entity and should remain a private entity. Mr. Dryer said that since the USA's report was issued UAF has tentatively agreed to participate in a partnership with the United States Olympic Committee to do some sports athlete programming and development, and the Sports Authority has committed $40,000 a year for the next three years to help fund a UAF staff person. Mr. Dryer indicated that the UAF is not asking for state authority, state review, or state oversight; but is saying that there is some state money that

could help get the UAF started. He stated that USA is not asking for a long-term commitment from the state, but is asking for the state to consider capitalizing on its initial investment.

    Mr. Leonard responded to policy question #II by saying that he agrees that UAF should seek additional private monies, but reality says that is probably not going to happen. UAF needs to be funded and activated now and it is the state's responsibility to suggest some avenues to address the funding issue.

    Mr. Dryer responded to policy question #III by saying that there should be some surplus money from the Olympic games and that 65 percent of that surplus will be given to the UAF. He indicated that this means there will be opportunities for the UAF to supplement the $40,000,000 legacy fund, but the issue now is what is to be done between now and the Olympics.

    Mr. Dryer responded to policy question #IV by saying that it is not a mandate that local governments should consider reinvesting some of the funds that are going to be repaid to them through the sales tax repayment. He indicated that it was not USA's intent to tell local governments something they would have considered on their own, but the intent was to consider protecting local government investments and utilizing those funds. Mr. Dryer stated that this was a way for venue cities and counties to take advantage of the facilities that will be within their boundaries and may be a way for the cities and counties that do not have a venue within their boundaries to take those funds and use them for sports-oriented activities.

    Mr. Dryer said that USA concurs that local governments do and should have complete discretion in how they use their repayment. As far as local government reimbursements being needed to cover Olympic-related costs of providing service, the payment is going to come after the cities and towns have already incurred their expenses.

    Committee discussion followed.

6.    Adjourn - Sen. Myrin indicated that the next meeting will be held on Wednesday, December 2, 1998, at 1:00 p.m.

     MOTION: Sen. Mansell moved to adjourn the meeting at 2:10 p.m. The motion passed unanimously with Rep. Allen and Ms. Sydney Fonnesbeck absent for the vote.

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