The Barrie Colts are disputing the results of an internal audit that found the city is not receiving its rightful share of advertising and concession revenue for the hockey team’s use of Sadlon Arena.
The audit, conducted at the request of Barrie’s general manager of community and corporate services, found that thousands of dollars in Barrie Colts revenue has been under-reported and/or unpaid to the city in exchange for the Ontario Hockey League club’s use of the south-end arena.
The city’s finance and responsible governance committee received as information the 2023 year-to-date internal audit status report at its Sept. 27 meeting. General committee is scheduled to consider the report at its Oct. 18 meeting.
But the HorsePower Sports and Entertainment Group, which owns the Barrie Colts, has taken issue with some of the report’s findings, as well as a Fair Comment column written by former city councillor Barry Ward that was published Oct. 4 on BarrieToday.
Howie Campbell, majority owner of the Colts, declined to comment Wednesday on the city's audit when reached by BarrieToday.
But he has made recent comments on social media about the matter.
“These disputed amounts are small in nature,” Campbell said of the advertising and concession money from Sadlon Arena, a city-owned facility on Bayview Drive.
Campbell also said he sent the city a letter July 17 requesting “abatement” for all the things he says have been promised to the Colts during the last 10 years of the lease, things that were not done by the city.
“I can assure you the amounts owing back to the Colts are far greater than the disputed amounts,” he said in his statement, which was posted on social media and the team's website.
The statement does not include any specifics on the amount of money the Colts claim to be owed.
Michael Prowse, the city’s chief administrative officer, noted internal audit staff reports are submitted directly to council.
“Based on the findings of the review, there are five recommendations from the internal auditor with respect to the city’s contractual rights, advertising revenue and concession revenue,” he said. “The city’s goal and that of its internal audit team is to work with our tenant (the Barrie Colts) to achieve compliance with those five recommendations.”
They involve the city’s contract rights to examine records, identify and collect city advertising revenue, collect outstanding advertising revenue, check the accuracy of advertising revenue and whether it’s complete, and check concession revenue earned but not reported.
"It is my understanding that the Barrie Colts and staff are working to bring the last contract into compliance," said Mayor Alex Nuttall. "The Barrie Colts are an important part of our city and staff are working with them as they would with any other internal city department."
The status report, from city internal audit director Sarah MacGregor, says the review assesses third-party compliance with the user and licence agreements, determining whether advertising and concession revenues reported to the city are adequately supported by the city’s contractual right to examine records.
It concludes that advertising revenue reported to the city by the Colts is not accurate and/or complete.
The report also says the city’s portion of eligible advertising revenue for three seasons (2019-20, 2021-22 and 2022-23) has not been paid to the city.
The audit found that a net total of $19,296 in eligible advertising revenue, not including harmonized sales tax (HST) — for which the city is entitled to a portion — was determined to be under-reported for the 2017-18, 2018-19 and 2019-20 seasons.
The review also claims that concession revenue earned by the Colts from September 2021 to June 2022 at Sadlon Arena was not reported or paid to the city. According to the review, the city's portion of that revenue was calculated to be $50,717, not including HST.
The audit report concludes the city should work with the Colts to identify and collect the city’s portion of non-cash consideration received, such as services and gift cards, and collect the city’s portion for the three seasons owed (2019-20, 2021-22 and 2022-23) for eligible advertising revenue.
And the city should continue to perform periodic physical observations of the signs inside Sadlon Arena, by comparing the signs seen there to the advertisers reported on the corporate sales summary. If significant discrepancies are noted, the city should exercise its contractual right to examine records to support the advertising revenue reported.
The city could also consider whether alternative advertising revenue-sharing arrangements with Sadlon Arena, such as a flat fee rather than a portion of advertising revenue, might be beneficial.
