August 31, 2011
Town to look at help
for ski hill
by Vance Gutzman
Faced with rising insurance costs, the Mount Martin Ski Club (MMSC) has
reached out to the town of Deep River for help.
But the town would be going down a slippery slope if it were to provide
the club with coverage under its insurance umbrella.
That was the message handed down at town council's last meeting.
The town's chief administrative officer, Michelle Larose, stated in a
report to council that MMSC representatives Ron Rogge and Steve D'Eon
had requested a meeting with Mayor David Thompson regarding the costs
of the club's property and liability insurance.
That meeting, with Larose also in attendance, was held on May 24, at
which time it was learned that the club experienced $7,181 net loss for
the 2009-10 ski season.
It's not low revenues that were the problem (the club generated $63,571
in income that year), but rather that insurance costs were high -
totalling $14,681.
Town staff were asked to investigate the possibility of having the MMSC
insured under the town's own insurance policy, in the hopes that some
savings could be realized for the club.
As a preliminary step, Larose asked the town's insurance company (MIS
Insurance) as to whether that would be possible or not, with "not"
being the answer.
"Our insurance company will not insure a facility owned and operated by
an outside group, this this is not an option," Larose stated in her
report to council.
She went on to state, though, that were the MMSC facility to be owned
and operated by the town itself, then MIS would provide coverage under
the town's existing facility.
But even then, she added, the insurance company has recommended in the
past, and again in a recent email to Larose that, in light of the
additional risk, and potential to affect the town's liability coverage
due to claims, it would be in the municipality's best interests to try
to avoid such an endeavour.
Indeed, Bill Riley of MIS Insurance Services said exactly that when the
question was first put to him when he met with council back in
September.
"I always caution municipalities that they should not be the insurer of
choice," Riley said at the time.
"Unless you absolutely have to do it, we recommend you stay away from
it. You're not experienced in running ski hills."
The township of Madawaska Valley tried to lease and operate a ski hill
in that municipality, Larose stated in her report, and has decided to
discontinue the lease following net losses of about $75,000 over the
course of its three-year lease, coupled with the added liability from
operating the facility.
Should Deep River choose to enter into a lease agreement for the Mount
Martin Ski Hill, the town's insurance premiums could rise by between
$4,000 to $8,000, depending on whether or not any of the physical
assets would need to be insured as well.
"I'm recommending we not operate the ski hill," Larose told council,
adding that the ski club didn't ask the town to run the ski hill in the
first place - it just wanted to be insured under auspices of the
municipality.
But, with the town's insurance company having effectively nixed that
idea, Larose said the only other other way the town could help out the
ski club would be in the form of a grant for its operations.
During its 2011 budget deliberations, Larose pointed out that $5,000
was added to the recreation department's budget, under charitable and
non-profit grants, in order to facilitate a grant to the club, should
council wish to do so, in lieu of insuring the club under the town's
policy.
In each of the past two years (2009-10 and 2010-11) the MMSC has
requested $3,000, and has received $1,600 and $1,850 respectively from
the town.
"I caution council that there will be other groups coming to the table
if we do this for the Mount Martin Ski Club," Larose told council,
referring to the $5,000 that was set aside in this year's budget.
Deputy Mayor Mary MacCafferty was of the same opinion.
"You give it to one club, every club will be asking for the same amount
of money," MacCafferty said.
"It's the taxpayers' money. It's very hard. I'd love to give them
$5,000 but where do we stop?"
Councillor Ron Derochers, however, held a different view.
"I'm in favour of giving them a grant in lieu of getting involved,"
Desrochers said, adding later that any grant money should be
accessed by community groups on a first-come, first-serve basis.
“The first to ask is the first to get. We need to put money aside and
see who asks for it."
For his part, Mayor Thompson said the town already does subsidize some
recreational facilities, such as the arena and the pool.
"Council has historically chosen some and others have been
self-supporting," Thompson said.
"They (MMSC) provide a tremendous venue. $5,000 would make a heck of a
big difference."
Councillor Terry Myers, meanwhile, suggested the ski club may
be more deserving of town money in light of its current
plight.
"There is a case to be made that this club is facing extraordinary
circumstances," Myers said, noting that the MMSC's insurance premiums
have tripled.
"That put them in a slightly different category."
Councillor Daniel Banks summed up the situation succinctly.
"The main lesson I take from this is that insurance isn't workable,"
Banks said, noting that the town has yet to be even asked for a grant
from the MMSC.
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