Utah Legislature 81202SAO

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MINUTES OF THE
SPORTS ADVISORY COMMITTEE
Wednesday, December 2, 1998 - 1:00 p.m. - Room 405 State Capitol

Members Present:
    Rep. Jordan Tanner, House Chair
    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
    Comm'r James Soter
    Mayor Lewis Billings
    Ms. JoAnn Seghini
    Mr. Roger F. Cutler

Members Excused:
    Sen. Alarik Myrin, Senate Chair
    Sen. Scott Howell
    Comm'r Brent Overson
    Ms. Lou Mueller

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 - Rep. Tanner called the meeting to order at 1:10 p.m.

    Rep. Tanner excused Sen. Myrin and recognized him for his many years of service in the Sports Advisory Committee and the Legislature.

    Mr. Brian Allred, Research Analyst, told the committee of a correction in the October 20, 1998, minutes. He indicated that on page 1, line 5, under the budget presentation, that SLOC's total budget should be $1.453 million.

     MOTION: Sen. Mansell moved to approve the minutes of the October 20, 1998 meeting as corrected. The motion passed unanimously.

2.    Governor's and Salt Lake City Mayor's Approval of Salt Lake Olympic Organizing Committee Budget - Mr. Roger Black, Chief Administrative Officer, Salt Lake City, reported to the committee that the mayor has approved SLOC's budget. He indicated that the mayor pursued five specific issues of significance to Salt Lake City in her review of the budget: 1) reasonable assurance that the budget represented a plan of attack that could be accomplished within the revenues to be made available to the games; 2) the provisions for covering the costs of extraordinary services that Salt Lake City and other municipalities might be called upon to provide; 3) whether or not the proposed budget had adequately addressed the expectations the citizens in the community have relative to the creation of a legacy that would be available to enrich their community life after the games are over; 4) that the games be conducted in a way that enhances Salt Lake City's reputation; and 5) the actual conduct of the spending of the money, the purchasing controls, the oversight, and the ethics issues have been sufficiently addressed so that all residents of the state and Salt Lake City

feel good about how the money was spent.

    Mr. John Fowler, State Olympic Officer, said that the governor has approved the $1.453 million budget without comment regarding any particular line items that may be in there that could give rise to questions or concerns. He stated that one thing that came up when the budget was reviewed was that while there was adequate allowance made for expense contingencies, there was a concern that if expenses rose to the level where SLOC was required to use all of those contingencies and, at the same time, through economic concerns that might exist, revenues fell short, what might happen in that instance. The governor requested that SLOC provide him with a revenue contingency plan covering the possibilities of a revenue shortfall as well as an expense overrun, so the budget includes a $136 million expense contingency of which $81 million is for general expense contingency and $55 million is for games reserve.

    Mr. Fowler said there are three legs on the stool that support the revenue contingency plan. One leg is that SLOC will not commit to expend more than 60% of its planned budget before October 1, 1999. The second leg is that SLOC will not allow its total contingencies and operational reserve to fall below $100 million by October of 1999. The third leg is that SLOC has commissioned auditors to do a semiannual review of the organizing committee's management of the budget. He stated that SLOC 's commitment as management is to establish a process that would preclude them from spending excess funds without going into the contingency review process.

    Mr. Fowler distributed and reviewed a handout titled "Legacy Items in SLOC Budget." He indicated that the legacy items will benefit youth and citizens of the state after the Olympics are over.

    Rep. Tanner requested that Mr. Fowler send a copy of his handout regarding the legacy items to every member of the Legislature prior to the 1999 General Session.

3.    Estimated Local Government Olympic Revenues - Ms. Natalie Gochnour, Governor's Office of Planning and Budget, gave an overview of the estimated local government revenues. She provided committee members with printed copies of her overview and answered questions.

4.    Utah Athletic Foundation Report - Mr. Kelly Flint, Senior Vice President, Salt Lake Olympic Organizing Committee, stated that the UAF was created pursuant to the purchase agreement between SLOC and the state for the Winter Sports Park. He indicated that the UAF will take possession of the Sports Park following the Olympics and will also receive the $40 million legacy fund with which it will operate it. Mr. Flint said that the UAF is a nonprofit Utah corporation governed by a Board of Trustees and that the chair is Lane Beattie. He indicated that the UAF Board of Trustees last met in September of this year and, at that meeting, it adopted a number of policies required by its articles and incorporation and by SJR 17, including the policy of opening its meetings to the public; adopting a procurement policy that is substantially similar to the state procurement code; and adopting a conflict of interest or ethics policy . The board of trustees created a committee

to search for and make a recommendation to the board on the hiring of a staff person that could work to operate the foundation through the interim period before it takes possession of the sports park The UAF also considered and approved a proposal from the United States Olympic Committee for the UAF to become a sponsoring organization for the community Olympic Development Program which will give the UAF access to funding to run some development programs. The UAF is in the formative stages and needs to move forward in examining opportunities to use the Sports Park after the games.

5.    Cottonwood Heights Recreation Center -

    Mr. Richard Guthrie, Executive Director, Cottonwood Heights Recreation Center, discussed a letter he sent to Rep. Jordan Tanner regarding SLOC's approach to providing a legacy in the post Olympic years and the treatment of long-time supporters, such as the Cottonwood Heights Ice Arena. He distributed copies of the letter to committee members.

    Rep. Brian Allen said that early on the citizens of Cottonwood Heights became players and supporters of the Olympic movement even when it was not popular to be one. He stated that his concern for the residents of the Cottonwood area is that there are going to be more ice sheets in the county now than the current recreation dollar can support, which means the revenue the Cottonwood Heights now receives from ticket sales and groups using their arena is going to be diluted to the point that the residents will have to come up with more money to continue to fund their facility. He indicated that he is also concerned because there is a contract in place that is not being honored.

    Ms. Cathy Priestner, Managing Director of Sports, SLOC, said that SLOC has not yet made a final decision on which competition or practice venues it will use and until SLOC can confirm what its competition venues are, it is not in a position to decide which practice venue will be used for what sport. The issue with Cottonwood Heights is one that still needs to be evaluated how and if it can be used.

    Mr. Flint said there has been no discussion of reneging the contract on the use agreement. The contract was made in 1994 and it contemplates a variety of potential uses for that facility in the body of the contract. SLOC is in the process of looking at a lot of alternatives.

    Rep. Tanner asked at the time of the signing of the contract with Cottonwood Heights in 1994, what SLOC's thinking was about the possible use of it. Mr. Flint said there were a number of things that were being looked at for it and the most likely use at that time was expected to be curling, the Curling Federation expressed significant discomfort with the facility because of the limited seating there and the small ice arena. He said that SLOC agreed to look for alternatives for curling and with the women's hockey being moved to Seven Peaks, it freed up the Ogden facility which does have international ice and larger seating capacity for curling.

    Rep. Tanner asked at what point Cottonwood Heights would be told if it is going to be used.

    Ms. Priestner said that SLOC will have a final decision on both the competition ice venues and practice ice venues by May of 1999 and that would be following the site visit of the federation in February.

    Sen. Mansell requested that the Governor's Office do an analysis on how many ticket sales and what the revenue projection is for ice sheets in Salt Lake County and can the state, in fact, support these ice sheets without additional tax revenues coming from special improvement districts, counties, or cities.

    Rep. Tanner asked Mr. Flint if SLOC would be open to a market survey of the ice sheet issue. Mr. Flint said SLOC would be willing to look at this issue, but it is bound to honor the commitments it has entered into.

    Rep. Tanner said this issue needs to be revisited in May following the site visit of the federation.

6.    Proposed Legislative Study Items and Changes to Sports Advisory Committee - Rep. Tanner informed the committee that he and Sen. Myrin appeared before the Legislative Management Committee in November and proposed some legislative study issues relating to the state in the 2002 Olympics. Management passed a motion that these issues would become part of the legislative studies for the 1999 interim. Rep. Tanner said that he and Sen. Myrin also raised the question of legislation that would reorganize this committee. The Legislative Management Committee said it would like to review the legislation when it is drafted. He indicated that the legislation will be sent to each of the committee members to review when it is drafted.

7.    Coordination of Entities Responsible for Olympic Athlete Facilities - Mr. Howard Peterson distributed and reviewed an outline of a proposal to the Utah Sports Advisory Committee to establish a forum for the Coordination of the Entities Responsible for the Legacy. He asked for the committee's support on the proposal. He said that the state has a wide variety of organizations who support the Olympics and those organizations have never all met together at one time and he is concerned that if those organizations do not meet together quickly, the state will lose some of the opportunities that otherwise are available to it He said he thinks the state has a good opportunity within this committee to convene a forum to bring those organizations together for the first time.

8.    Other Committee Business -

    MOTION: Sen. Mansell moved to adjourn the meeting. The motion passed unanimously.

    Rep. Tanner adjourned the meeting at 3:45 p.m.

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