An update of the proposed Hinton Disc Golf Course Operating Agreement allows the Hinton Disc Golf Association (HDGA) to maintain ownership of the disc golf course and manage their budget reflecting insurance costs.
A decision on the agreement will be made at a future regular council meeting. The proposed agreement contains a funding component from the Town of Hinton for both annual operational expenditures and capital reserve contribution.
Jan Vassbotn, president of HDGA, asked for any decision on the agreement to be postponed during the standing meeting on March 16.
He explained that the association is still figuring out why $5M of liability coverage is needed for the course. HDGA is waiting on clear number in regards to insurance costs, but Vassbotn noted that the best estimate is around $2,000 per year.
Through the 2021 budget process, Council secured funding for the operation of the Hinton Disc Golf course in 2021 in the amount of $8,000.
Vassbotn said that when the $8,000 was budgeted, they did not realize how much would be spent on insurance. He added that they would be forced to ask for another $2,000 on top of what’s budgeted to help cover the costs.
The annual amounts allocated towards operating expenses and reserve funding were originally set and mutually agreed upon as $3,000 and $5,000. The new proposed agreement modifies the ratio of funding allocated for operations to $4,000 and for capital reserve funding to $4,000.
CAO Emily Olsen explained that the adjusted split would allow more flexibility for HDGA when managing their funds.
According to the Town’s report, allocating more of the operational funds towards insurance costs will negatively impact the delivery of operational plans and service levels for both parties.
Olsen explained that the Town’s insurance provider recommended $5M in liability coverage, which is standard in agreements like this one. The Town’s insurance provider is Alberta Urban Municipalities Association (AUMA), which means each municipality receives the same advice. Mayor Marcel Michaels asked if it was possible to add an additional annual $1,000 to the operational budget in future years of the five year agreement.
This change was not made, but council will come back and look at the agreement again during budget deliberations for 2022.
Coun. Dewly Nelson noted that the 2021 budget was approved and that it would be easier to get creative within that approved budget and adjust the agreement.
The split change to $4,000 in both operations and capital allows some leeway that the association can use to cover higher insurance premiums, said Coun. Albert Ostashek.
Without knowing exactly what their insurance costs will be, councilors were not comfortable changing funding in future years yet.
“They might be able to get a reasonable price for their liability coverage,” said Ostashek.
Administration will continue working with the group and address any changes before the agreement comes back to council for a decision.
Olsen noted that the potential risk of delaying the approval of the agreement could be a delay in work on the course this summer.
If the agreement is approved, the HDGA will be the operator of the disc golf course while the Town remains the holder of the lease established with the Government of Alberta.
HDGA owns the assets and the responsibilities associated with this, such as property insurance and the obligation to inspect and maintain.
The Town assumes general liability for the public visiting and using the area where HDGA operates the course. If terminated, the Town has the opportunity to continue the operation based on financial and service level consideration as determined by Council.
Additional benefits to the agreement include access to expertise and professional connections of the HDGA, maximization and value of volunteer hours, access to Town resources or contractors, celebrates the ambassador function of volunteers to promote, grow and support the sport, maximization of the relationships of the HDGA with the business community, access to funding and grants that the municipality does not qualify for, and the promotion of tourism and economic development.
Masha Scheele, Local Journalism Initiative Reporter, The Hinton Voice