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07/16/2002 - City Council SpecialAGENDA SPECIAL CITY COUNCIL MEETING TUESDAY, JULY 16, 2002 5:30 PM CITY HALL COMMUNITY ROOM I. ROLL CALL & AGENDA ADOPTION II. VISITORS TO BE HEARD III. DISCUSSION RE: PROPOSED 2003 CIVIC ARENA BUDGET IV. OTHER BUSINESS V. ADJOURNMENT a.~-~- TO: FROM: DATE: SUBJECT: MEMO City of Eagan HONORABLE MAYOR AND CITY COUNCIL MEMBERS CITY ADMINISTRATOR HEDGES JULY 12, 2002 JULY 16 SPECIAL CITY COUNCIL MEETING Per the direction of the Council, a Special City Council meeting has been scheduled for July 16 at 5:30 PM in the Community Room to further discuss the proposed 2003 Civic Arena budget. Staff has compiled the data that you requested. Enclosed on pages ~, through ~ is a memo from Director of Administrative Services VanOverbeke to City Administrator Hedges with various attachments. As is our usual practice, the Special City Council meeting will be taped for cable broadcast. Sandwiches will be available at SPM if you would like to eat prior to the meeting. Please feel free to contact me if you have any questions prior to the July 16 Special City Council meeting. City Administrator ~y` MEMO city of eagan TO: City Administrator Hedges FROM: Director of Administrative Services VanOverbeke DATE: July 12, 2002 SUBJECT: Civic Arena Budget Information I am writing this memo at your request to provide additional information for the City Council regarding the proposed 2003 Civic Arena Budget. Revised Revenue Projection Presentation Enclosed on page ~ is a copy of revised Civic Arena Revenue information that consistently matches the various revenue line items between 2002 and 2003. The 2002 total is also corrected to include the budgeted amount of interest earnings. Ice Rental Revenue Projections Enclosed on page ~ is a worksheet outlining how the 2003 ice Renta! for both the Exempt and Non-exempt line items. Eas~an Athletic Association Capital Contribution To assist in financing the construction of the East arena in 199711998, the Eagan Athle#ic Association (EAA) agreed to contribute $500,000 over a ten (10) year period. The first two payments of $50,000 and $59,500 went directly to the construction fund and were used to pay for construction costs. In order to have the balance of the cash available to pay for construction the City borrowed internally from the Community Investment Fund (CIF) the balance of the present value of 10 years worth of $50,000 payments. The following tables summarize the finanaal transactions to account for the contributions: Advanced From the CIF Present Value $405,000 Advance Payments: (50,000) 5( 9.500) Borrowed From CIF $295,500 EAA Con#ributions Pledged Amount $500,000 Payments To Const: (50,000) (59,500) Payments To Debt: (25,000] 3 ~ $50,000 15f 0.000) Balance Due 7-12-02 $215,500 CIF Status Total Advanced $295,500 Total Received and Due $390,500 Interest Eamed $95.000 The repayment of the loan to the C!F is not reflected in the accounts of the Civic Arena as the construction financing is complete. This process is exactly the same as is currently being used to constnact the Community Center except those funds have been borrowed extematly. The annual debt service levy of approximately $1,400,000 is being used to repay the money borrowed to pay for the construction. The annual levy of $1,400,000 is a financing issue and will have no impact on annual operations nor will the debt service transactions be accounted for in the Community Center Fund. Civic Arena Revenue Bond A major component of the cons#ruction financing for the East Arena was the sale of a 20 year Ice Arena Gross Revenue Bond in the amount of $1,565,000. The first payment was made in 1999 and the last payment is due in 2019. Debt service is paid from operations and approximates $126,000 annually. The first year (1999) was higher because of longer interest period. The complete debt service schedule is enclosed on pages ~~ and _~_. Civic Arena Ouerations On A Cash Basis Enclosed on page ~, is a one page worksheet that attempts to place the results form the operations of the Civic Arena on a cash basis. Information is carved forwarcl from the beginning through the projected results assuming the 2003 budget information. I would like to call your attention to the following spec information noted on the worksheet: The top section of the worksheet (Numbers 1 through 7) shows cumulative cash from operations for all years of operation including the 2003 budget projections. 1. The top section of the worksheet shows the cash received from and disbursed on operations added together to show a net cash profit. a 2. The cash outlays for debt service, capital expenditures, and capital replacement reserves are subtracted. 3. The difference between cash taken in and total cash disbursed is shown as excess revenues. 4. The cant' forward results from the previous year are noted. 5. The cant' forvvard amount is added #o the current year results to provide a cumulative excess of revenues. The results form operations show dramatic, positive increases through 1998. Beginning in 1999 when debt service obligations were added (6), excess revenues became a negative number as disbursements have exceeded receipts in every year. Continuing the trend, the cumulative balance is projected to be negative at the end of 2003 (7). The middle section of the worksheet divides the total cash balance (line 10) between the cash reserved for renewal and replacement (line 8) and the cash available for operations (line 9) as developed in the top section of the worksheet. The bottom section (line 11) shows the primary hourly ice rental rate for each year. ~cial Citv Council Meetinst of July 9. 2002 Enclosed for your reference is the complete information as presented far the Special City Council Meeting held on July 9, 2002. Directorb~Administrative Services 3 O •I oN ooooao ~ogSSggo 000000 ~ o ~ ~ ~ O~ N t~ to GO '~t 1(7 ~ O ti O ~ ti n Q ~oDMOt~ ~ ~ ~ ~ ~ ~' N~ O O O p O O O O p 0 0 0 0 0 0 0 0 0 0 O O O N j 0 0 0 0 0 0 0 0 0 OOOOONMOO~0000 ' $ .- m 1~t~~tpN~000 O M O M N O p M( . -t O M ~ 1~ ~ ~ 7 N O) Q~ ~ c~'~ e+) c0 a0 1~ O i M ~ ~ ~ ~ ~ ~ ~ N ~ ~ to M O N j ~ ~ Q ~ tDMNef OOH ~O ~ ~MOC O •- O M O ~ ~ ~ ~ C~MNMN0000~0 ~ O O M M 01 O 1` 1~ O O 1~ ~ N ~ N~ N~CONGO~LCl~O ' O ' ~ `7 Q IA~NM~~CDOtC~ et O O M 01 I~ M to ~p r r N CO N ~ ~O C ~ ~ OOQ1~Nt~1~~Dp O <D O O M <p to M f~ O O ' 1~ ~ O OD y ~ j ~I~chNO ~ NetooO~c' M Q M~~OtG~ M ~N ~ ~ M ~v fND 7 C d W ~ ~ W O C ~ 41 ~ ^ , Q' N . r d a X c~ N $ o c 3 E W ~ C 'y ~~ C C~ C y t ~ a E ~ m co v) ~ ~ v ~ ~ ~ ~ ~ i ~ ~ a ?~ v~ c a ~~ c > c > ~ rn` co c= ;a~a~odtvc cy c c ~pd~~fnQ $~ o N U J E d N~~ Y Y ~ t0 Z' 3 Q G+=+ ~ "~' O C7~~v~c~~~OF-WCnO ~ ~ 4 Exempt Eagan Youth Hockey for 2002-03 Eastview Hockey for 2002-03 District Toum 2003 High School for 2001-02 Tryouts/Ginics for Eagan Tryouts/clinics for Eastview Captains for Eagan-boys Captains for Eagan-Girls Captains for Eastview-boys Satellite Training Program-Eagan Total 2002 Known Gross Hourly 2003 Dollars Rates Notes Hours 182,641.25 ($145.00) (1) 1261.25 36,965.00 ($145/150) (2) 250 4,785.00 ($145) (1) 33 82,776.00 ($145) (3) 15,540.00 ($110.00) (4) 13,465.00 ($110.00) (4) 4,070.00 ($110.00) (4) 2750 ($110.00) (4) 1,815.00 ($110.00) (4) 4,197.00 ($110.00) (4) 349,004.25 (Budgeted for 2003 at $345,000) Notes: (1) Assumes a $5 increase to the 2002 hourly rate. (2) Shows the $5 increase and the $5 surcharge to the Eastview Hockey Association for the East Arena. (3) 2002 High School rate, pending Council authorization to add $5.00 higfi school surcharge. (4) The before 10-01-XX rate. Non-exempt The 2003 budget projection of $80,000 is based on the 2002 actual of $84,828 and assumes a potential loss of one tournament and the proposed hourly rate increase of $5 per hour. Hourly Rates 1995 1996 1997 1998 1999 2000 2001 200: 120/hour 125/hour 125/hour 130fiour 135/hour 135/hour 135/hour 140/hour 5 CITY OF,EAGAN, MINNESOTA Prepared March 27, 1998 ICE ARENA GROSS REVENUE BOND, 19986 By SPRINGSTED Incorporated POST SALE DEBT SERVICE Bond Date: 4/ 1/1998 Sale Date: 3/26/1998 Issue Size: $1,565,000 Annual Date Principal Rate Interest Total Payment 4/ 1/1999 45,000 4.000 82,365.00 127,365.00 127,365.00 10/ 1/1999 ,~,- =~- 40,282.50 40,282-.50 4/ 1/2000 45,000 4.400 40,282.50 85,282.50 125,565.00 10/ 1/2000 _ ~ 39,292.50 39,292.50 4/ 1/2001 50,000 4.500 39,292.50 89,292.50 128,585.00 10/ 1 /2001 ~ .,;~;,-< - 38,167.50 38,167.50 4/ 1/2002 50,000 4.600 38,167.50 88,167.50 126,335.00 10/ 1/2002 ,z7~_ .ro 37,017.50 37,017.50 4/ 1/2003 55,000 4.750 37,017.50 92,017.50 129,035.00 10/ 1/2003 _ ~ 35,711.25 35,711.25 4/ 1/2004 55,000 5.000 35,711.25 90,711.25 126,422.50 10/ 1/2004 ~ 34,336.25 34,336.25 4/ 1/2005 60,000 5.100 34,336.25 94,336.25 128,672.50 10/ 1/2005 ,_ - 32,806.25 32,806.25 4/ 1/2006a 60,000 5.250 32,806.25 92,806.25 125,612.50 i0/ 1/2006 31,231.25 31,231.25 4/ 1/2007a 65,000 5.250 31,231.25 96,231.25 127,462.50 10/ 1/2007 - 29,525.00 29,525.00 1/ 1/2008a 70,000 5.250 29,525.00 99,525.00 129,050.00 .0! 1/2008 - 27,687.50 27,687.50 4/ 1/2009a 70,000 5.250 27,687.50 97,687.50 125,375.00 10/ 1/2009 25,850.00 25,850.00 4/ 1/2010b 75,000 5.500 25,850.00 100,850.00 126,700.00 10/ 1/2010 ~~ 23,787.50 23,787.50 4/ 1/2011b 80,000 5.500 23,787.50 103,787.50 127,575.00 10/ 1/2011 - 21,587.50 21,587.50 4/ 1/2012b 85,000 5.500 21,587.50 106,587.50 128,175.00 10/ 1/2012 19,250.00 19,250.00 4/ 1/2013b 85,000 5.500 19,250.00 104,250.00 123,500.00 10/ 1/2013 ~,::~=~ 16,912.50 16,912.50 4/ 1/2014b 90,000 5.500 16,912.50 106,912.50 123,825.00 10/ 1/2014 - 14,437.50 14,437.50 4/ 1/2015b 95,000 5.500 14,437.50 109,437.50 123,875.00 10/ 1/2015 -~~ 1 ' 11,825.00 11,825.00 4/ 1/2016b 100,000 5.500 11,825.00 111,825.00 123,650.00 10/ 1/2016 .__ _ 9,075.00 9,075.00 4/ 1/2017b 105,000 5.500 9,075.00 114,075.00 123,150.00 10/ 1/2017 _ _ 6,167.50 6,187.50 4/ 1/2018b 110,000 5.500 6,187.50 116,187.50 122,375.00 10/ 1/2018 ,_ .,. 3,162.50 3,162.50 j --+. .= - CITY OF EAGAN, MINNESOTA ICE ARENA GROSS REVENUE BOND, 19988 P05T SALE DEBT SERVICE Date Principal Rate i~S,~t o 4/ 1/2019b 115,000 5.500 TOTALS 51,565,000 Discount (plus) Net Interest Cost Prepared March 27, 1998 By SPRINGSTED Incorporated Bond Date: 4/ 1/1998 Sale Date: 3/26/1998 Issue Size: 51,565,000 Interest 3,162.50 Total 118,162.50 Annual Payment 121,325.00 51,078,530.00 52,643,630.00 52,643,630.00 523,475.00 51,102,105.00 0 0 o rn o o rn ao C 00 °op ao ~ ~ mON 000_ ENO r ~ ~ O1A ' ~~ ' N of O n O ~ ~ O t0 tC ~ ~ NOD O "a t0 p 'C M t~ to N N M v N ~ 00 O ~ 00 N~^ 0 ~ v N N N .~. d'! x.00 O ~A pOpO ~ M OO NQer ~ ~ ~ N m~N ~ ~1A~ ~ ~ ~ MON OIL ' 00 p p N 0 ~ 0 N M 00 O ~ M OD 1n CD ~ I~ N~^Oi~ r v`"'M ~ ~ N N NN N V N~ tip ~~O O ~ A ~M M^0 ~ ~ 'p tlee~p}t CO ~ 1~ ept O 1A tp0 /~ 'Q ' N t0 1!f ~ a) N 1 ~A ~ ~ N to ~ O 'et N M N~ N V w ... to ~ m BOO <D 1f>t0O ~ ~ 01 O0 ~O M L N r- r t~ M O O~ f~ 1~ 1~ ~ 1~ t~ y ~ N O) ~ ~ ~ ~ O 1A O~ ~ ' ~ ~ ' O) g p (O ~ ~ M N O f~ ~ O ~A cD ~ !~ 3 p t0 N~ N O M O O O> ~ In O) ~ F, N f0 1p r v v v r ~ r N ~ i O ~ t0 VO'^D Q> O ~ In ~t 1~ N O~ '~ M C h N e} ~ p ~t r- 1~ In N f~ I~ to <O et r- ~ N S t~ 0 O 00 1~ ' to O ' ~ ~M ~ ~~M M ~ ~ ~M ODD r ~ t0 ~ ~ v `-' N r r ~ ~ M b9 00 M t[1 1~ O 00 t~ O 0 ~ O ~ O N ~~pp0 O Op O ~ ~ O~O> tnr 1~ ~ Iri O ~L9 ' ~- S c'7 ~~~pp 00 ~ N O 00 aef0 ' t0 Opf ~ti cOG ~~ N O ~ ~ ~ Bch ~ r ~ M ~ r r N N M lH O ~ ~ O ~ OMD ~ ~ OOD 000 ~ O ~ ~ tMA O~ ' O h r N ~ ~ ' ' ~ ~ ' ~O CA ~ N 00 of CO M M c0 O O c0 CO Q1 N O S N OD N O c0 c0 O 0 O "' coo ~ IN ' N ~ ~ N N ~ ' ' ~ ~ ' QO1 MM O rV, ~ 00 M M MM tD L Of 00 ~ 0 ~ N M N M M N 1A y r M M `'' _~ O 4'l C_ ~ `7 f~ M 00 ~- ~ 0 00 ~ C7 N ONi ~ ~ ' CO0 N ' N ~ ' ' tO0_ N ' ~ ~ ~ v t0 OvD Ov m 0 Ov v r r r V! m _ y C y ~. :p ~• y ~ 7 W d II11~ y ~ ly0 07 ~ 03 y ~ ~t=Qq w W ~ V m ~ j m C ,~ V N Q a w '" a `~ y c~ E E t° m c V ,c~E m E m cEL~ e~ay ~ .~ ~ acc~ ~ ~ x mvaamc ~ _~ Q iri co ~ ~ m a ca c~ m ~ m `- y y L ~~ ~'m ~ ~° > h m o a a~ V '~m~ ~ 3 C ~ y .ir .L~ y ~ 7 D1 y V U y` ~ ~ ~ ~ ~ ~ ~ Z t t mm y~ y G~ Z oOC~C~ W U U ~ U C JMW ~ (~ L t y ; AA W ~ ~ y 1 ~ C UU ~ ~ -~ M T ~ U H~ i O r '~ r O M r fA 1A M r O M r O M r to N •- O N r fA N r a z t m V m E •c a r AGENDA SPECIAL CITY COUNCIL MEETING TUESDAY, JULY 9, 2002 5:30 P.M. CITY HALL COMMUNITY ROOM I. ROLL CALL & AGENDA ADOPTION II. VISITORS TO BE HEARD III. PRESENTATION BY DAKOTA COUNTY PARKS RE: METHODS TO IMPROVE WATER QUALITY THROUGH LOW IMPACT DEVELOPMENT IV. CLARIFICATION OF R-4 V. CEDAR GROVE DEVELOPMENT VI. 2003 CIVIC ARENA BUDGET VII. WASTE REDUCTION COMMISSION REPORT & PROPOSED ORDINANCE VIII. DIRECTION RE: ORDINANCE REGULATING THE SALE OF PHOSPHORUS FERTILIZER IX. OTHER BUSINESS X. ADJOURNMENT 9 Ryan Proposal - In May 2002, Ryan Companies presented its development proposal to the City Council for the Cedar Grove North District and discussed its need for financial assistance. The City Council directed staff and Ryan to negotiate an agreement. Since that time, staff and project management consultant Ehlers have worked with Ryan to evaluate options that might increase total project value and reduce the amount of assistance being requested. More than likely, value can be increased with an increase in the amount of office space. This increase in office space however, has consequences for the traffic management plan for the area that could negatively affect other azeas. This analysis will be presented for Council consideration. Senior Housing Proposals -Three developers previously expressed interest in developing senior housing on the south corner of the Cedar Grove Pazkway/Silver Bell Road intersection (across from McDonald's). Ehlers and staff aze confident that each of the developers has the financial capacity and experience necessary to deliver a quality product. There was some question at the May workshop as to the density of at least one proposal. As a comparison to what may be developed in the Cedar Grove area, the Commons on Marice senior community is often cited by the City as an excellent example of design and land use. That property has a unit density of 35 units per acre, or 156 units on 4.4 acres. Each of the three interested developers has been directed to prepaze a pro forma that does not exceed that density. The updated development programs will be presented to the City Council for consideration and direction. Property Acquisitions -The City has purchased a number of properties in the Cedaz Grove Redevelopment Area (CGRA) to facilitate infrastructure improvements and hasten the development process. In addition to the properties acquired for Project 800, the City has purchased a vacant lot on the corner of Cedar Grove Pazkway and Gold Trail, and the property formerly occupied by Valley Bike & Ski west of Cedarvale Mall on the north side of Cedaz Grove Pazkway. Staff has been approached by a number of business property owners concerned about the future of the area and the continued viability of their businesses. In these circumstances, business-owners aze encouraged to develop as many options as early as possible. Jim Cooper Goodyeaz and Eagan Pet Clinic are examples of two businesses that have been proactive in finding relocation sites for their businesses. Additionally, Pro-Wire is in the final stages of building a new site and has been trying to sell its CGRA property. There are a number of options to the City related to property acquisitions. Staff and consultants will discuss these options in greater detail and evaluate the pros and cons to the City. DIRECTION TO BE CONSIDERED: Give staff direction regarding continued negotiations with Ryan Companies; possible developer selection for senior housing; and property acquisition in the Cedaz Grove Redevelopment Area. 2003 CIVIC ARENA BUDGET Traditionally, the Civic Arena Budget is given special consideration in advance of other Public Enterprise and General Fund Operating Budgets due to the fact that operations run more concurrent ~ io with a fiscal year starting in September than the traditional calendaz yeaz. To finalize both expenses and revenues for the 2002-2003 Civic Arena Operating Budget, Council policy relative to the proposed fees for the Civic Arena will need to be approved at the July 16 City Council meeting in order to provide the proper communication to various individuals and organizations that aze planning to schedule use of the Civic lAre~nas. ~~ Enclosed on pages Through ~ is a copy of a memo to the City Council from the City Administrator and a proposed 2003 Civic Arena Budget/memo from the Civic Arena Manager and Parks and Recreation Director Vraa. DIRECTION TO BE CONSIDERED: To provide direction regazding, specifically, the hourly fees for the 2002-2003 skating season. WASTE REDUCTION COMMISSION REPORT & PROPOSED ORDINANCE Over the past few months, the Waste Reduction and Recycling Commission (WRAC) has diligently worked on revising City Code Section 6.37 regarding the licensing of waste haulers. Attached on pages through~s a summary of the revisions and the proposed revised ordinance amen ment for Section 6.37. The Chair of WRAC, Rick Patraw and Vice Chair, Clint Hooppaw, will be present on Tuesday to highlight the code revisions, as well as share with the Council a summary of the commission's work over the past yeaz. Per the direction of the City Council, the Code amendment will be the last action to be taken by WRAC prior to the commission being disbanded. City Council and staff will have the opportunity on Tuesday to thank the WRAC commissioners for their commitment and service to the City of Eagan. DIRECTION TO BE CONSIDERED: To consider revising City Code, Section 6.37 regarding the licensing of waste haulers. PHOSPHORUS FERTILIZER "SALE" ORDINANCE As you may recall, this past April, state legislation (SF-1555) was passed regarding the use and sale of phosphorus lawn fertilizer. The League of Minnesota Cities has recently called to our attention that while the legislation gives the state authority to regulate both the use and sale of phosphorus lawn fertilizer, the state has opted not to exercise their authority over the sale of the fertilizer when the bill goes into effect on January 1, 2004. Therefore, with the passage of SF-1555 into law, local governments have until August 1, 2002 to enact ordinances regulating the sale of phosphorus lawn fertilizer if they want this authority to continue after January 1, 2004. If Eagan chooses not to exercise authority over the sale of phosphorus lawn fertilizer, then come January 1, 2004 there will be no regulations on the sale of phosphorus lawn fertilizer in Eagan since state law preempts local law at that point, and the state law only covers the use of phosphorus lawn fertilizer, not its sale. Attached on pages ~ through is a summary of the legislation, as well as a proposed ordinance from the City of Shorewood to regulate the sale of phosphorus lawn fertilizer. ~ 11 • ~ i J+~- TO: FROM: DATE: MEMO City of Eagan HONORABLE MAYOR AND CITY COUNCIL MEMBERS CITY ADMINISTRATOR HEDGES JULY 5, 2002 SUBJECT: CIVIC ARENA BUDGET In preparation for the Council's consideration of the Civic Arena budget, Civic Arena Manager Mark Vaughan and Parks and Recreation Director Vraa presented the Civic Arena budget to City Administrator Hedges, and reviewed anticipated revenues and expenditures. On the expense side, increases are anticipated in salary and wages, contractual services, and merchandise for resale. Additionally, there is a $20,000 proposed increase in capital outlay. Also, please note there is a $3,000 spike in debt service, which is the scheduled debt service payment for 2003. For a more detailed description of the proposed expenditure increases, please see the attached memo. The anticipated 2003 Civic Arena revenues do not adequately balance the proposed expenditures. If the ice rental fee were increased by $5/hour, a revenue shortfall would still exist. In light of the shortfall, two options that the Council may wish to consider are: 1) Decrease the capital outlays 2) Decrease a portion of the capital outlays and consider an additional $10/hour in rental fees. If a $10/hour increase were approved, Eagan's Civic Arena ice rental charge would be $150, which is in line with ice rental charges in our neighboring communities, such as Burnsville ($155/hour) and Apple Valley ($145/hour). Newer Civic Arenas, such as Minnetonka and Victoria are currently charging $175/hour in ice rental fees. Civic Arena Manager Vaughan has presented excellent discussion items in his attached memo, which the City Council may wish to review in preparation for Tuesday's budget discussion. In presenting the budget for 2003, it was staff's goal to continue the tradition of taking an entrepreneurial vantage to the City's operations in order to stabilize the fees to our residents, and continually create revenue-producing programs and operations in order not to become dependent solely on increased ice rental fees. If you have any questions about the proposed Civic Arena budget prior to Tuesday, please feel free to contact me. City Administrator -- ~ is o To: Tom Hedges, City Administrator From: Mark Vaughan, Civic Arena Manager CC: Ken Vraa, Director of Parks and Recreation Date: July 2, 2002 Re: 2003 budget Attached is the proposed 2003 budget for the Eagan Civic Arena, which includes some options to help balance the budget. Also inGuded are a debt payment and the Capital Repair and Replacement spreadsheets. You will recall that the Civic Arena moved its budgeting year to September 1 through August 31 but the budget started on January 1.The operation spreadsheet reflects actual numbers for 1997 through 2001, the 2002 budget numbers and the proposed 2003 numbers. (Please note that the 2001 numbers are not the auditor's official numbers.) The 2003 proposed budget reflects an increase in expenses. Most notable are the accounts for contractual services, merchandise for resale and capital outlay. Preliminarily, the 2002 final reports show $32,000 allocated to the Capital and Repair account. After the reduction of $5,000 to purchase the equipment washing machine, the 2002 budget for the Civic Arena is approximately $4,000 short of the Repair and Replacement goal. Estimated Revenues: The 2003 numbers are based on past history and the most current trends of arenas. The 2003 projections use an increase of $5.00 per hour to the prime hours, which will produce approximately $10,000 annually. Other notable revenues include Spring Home and Leisure Show, turf rentals, equipment washing machine and dry floor programming. These account numbers were included in the 2002 Arena program revenues. For 2003, the numbers have been ident~ed, as a line item to break down the acxount the arena program revenue account is a reflection of the Skate School registrations. You will note that the revenue portion of the budget shows an incxease of $56,400 from the 2002 budget. ~ Page 1 r3 Expenses: There are three line items that have major adjustments compared to previous years. They are merchandise for resale, other contractual services and other improvements. Merchandise forresale: Staff was over budget in the past two years in this account because of higher revenue generation. Staff is adding an extra $6,000 to this line item. Ofher contractual services: This account is used when staff has to bring in a contractor or vendor for speaal events. In these instances, revenue covers the cost. Examples would be the marketing assistant for the Home and Leisure show or high school announcers and timekeepers. Staff is adding $ 5,500 to this account. Other improvements~Capital: The following is a breakdown of this account for improvements to the Civic Arena operations and service. Building door security: $ 9,000 Security system from Cascade Bay: 3,000 Added Heating capacities to East Arena 6,000 Rental locker rooms 2,000 Total improvements/Capital $20,000 Budget Summary Proposed expenditures: $599,400 Debt Service 129,035 Reserved for renewal and replacement 36,000 Total $764,435 Less Operational Revenues 737,000 Difference 3 (27,435) Balancing the budget: There are a few options to help balance the budget. The first would be to raise the ice time rate to close the gap. A survey concluded demand for prime time ice rates is $145.56 for nine surrounding communities. Remembering that the cun'ent budget numbers include a $5.00/hour increase already, the gap could be closed by adding another $15.00 increase in prime ice time. This would put the rate for the 2002-03 ice season at $160.00/hour. A few community arenas are at a higher rate of $175.00/hour for prime ice time. • Page 2 1 `~ Removing all capital improvement ideas will reduce expenses by $20,000. Capital items could be completed by borrowing from the Capital Repair and Replacement fund or from excess revenue from previous years Discussion items to help with the budget: a) Ice Usa4e. Local hockey associations, high schools or city programs are the primary renters of prime ice time. In the non-prime season the Civic Arena has built up a clientele that produces a decent amount of revenue given this very competitive market for ice time. Staff will be working to add programs for future "off season" ice use, but will mainly concentrate on retaining its current customers. b) Skate School: The Eagan Skating School has maximized their opportunity to grow with the currently allocated ice time. There is room for growth in the "off season" as the program begins to produce more upper level skaters. Skating School Director Barb Yackel was hired last season and helped the program control expenses and maximize revenues. c) Equipment Washing Machine: Staff is very disappointed in what the machine offered for service and revenue. Revenue dollars were adjusted for the 2003 budget. Staff is working on changing the marketing to target certain users. d) Potential of Civic Arena: Moving away from Ice/turf rentals and dry floors programs, the Civic Arena Manager has made contacts with certain promoters and created some non-traditional uses for the Civic Arena. e) Debt service and CRR: These schedules are included in the packet. You will notice that this was a year where an increase in the debt payment was required. Staff appreciates the value of the capital repair and replacement account in planning for future issues of an aging building. f) Civic Arena Fund: As an enterprise facility, the dollars collected beyond revenue/expenses are kept in a fund for the Civic Arena for future use. Should those dollars be used to upgrade the facility or used to offset unbalanced budgets? g) Mezzanine of fhe West Arena: The Civic Arena manager has had discussions with a few individuals/groups to complete the upstairs of the West arena. Staff recognizes the value of the mezzanine area. Should this expansion be considered? • Page 3 cII C N Q U .~ (U ch S N ~ N Q II 11 N 11 N II m II II II r f9 II S "' II N Q '~ 11 O II O I N ~ Q ii II II I I O _ II ~ ~ II ~ 11 ~ Q ii ii J p CA ~ II U ~ Q ii II II ~ ~ II O II Z ~ ~ ~ U ii Q II Q O m W O ~ O m N ° n I U o N N I 1 ~ ~ c~ o! ni N I of y ~ I I O i S S S S S S S S W O O f7 0J c0 N N f~ r O CA Cl) 1~ 0 ~ ~O O ~ ~ N r r ~ ~ O O O N ' L~ O ~ i C N ~ ~ ~ ~ O t 0 O r ~ (p 00 O C O 01 to ~ O to ti~ ~ N N 0 ~ O O 10 N 00 1~ t~ f') f7 O N ~ O ~ '" O r r N (Op ONO O ONO ~ O ti ~ aD f` c~ to r r 00D O N rn ~ c0'! to O (p 00 ('7 t~ f7 1~ C7 O (D t~J N t~ 1A f~ ('> OJ ~ ~ ~ ~ ~ ~ ~ ~ m M 00 ' (~ r In In t'f (O'') ll~ ~ t00 0N0 N t7 f~ O ' N ("7 f? 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