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08/15/2000 - City Council Special AGENDA SPECIAL CITY COUNCIL MEETING TUESDAY AUGUST 15, 2000 5:00 P.M. EAGAN MUNICIPAL CENTER CITY COUNCIL CHAMBERS 1. ROLL CALL & AGENDA ADOPTION II. VISITORS TO BE HEARD III. PROPOSED CIVIC ARENA BUDGET 2000/2001 IV. DISCUSSION RE: PROPOSED GENERAL FUND BUDGET 2001 V. DISCUSSION RE: INTERVIEWING ARCHITECTS VI. OTHER BUSINESS VII. ADJOURNMENT MEMO city of eagan TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS FROM: CITY ADMINISTRATOR HEDGES DATE: AUGUST 11, 2000 SUBJECT: SPECIAL CITY COUNCIL MEETING/AUGUST 15, 2000 PROPOSED CIVIC ARENA BUDGET 2000/2001 The City Administrator and Director of Parks and Recreation presented the 2000/2001 Civic Arena Budget at the Special City Council meeting held on Tuesday, August 1. Following the staff presentation, there were questions raised by the City Council with agreement that additional data would be provided to the City Council and the 2000/2001 Civic Arena Budget was continued until the August 15 Special City Council meeting. Director of Parks and Recreation Vraa has re red the data requested by the Council and for a copy of a memo with attachments, refer to pages through ACTION TO BE CONSIDERED: To provide direction to the City Administrator and Director of Parks and Recreation regarding the 2000/2001 Civic Arena Budget as it relates to the prime time hourly charges and other operating cost considerations. Special Note: this budget is being presented prior to other General Fund and Public Enterprise Fund operations due to the fact the Civic Arena is scheduled to open in September/October. DISCUSSION RE: PROPOSED GENERAL FUND BUDGET 2001 Each year the City Administrator provides a brief overview of the General Fund Operating Budget the City Council will consider in late August and the preliminary budget that will be considered for adoption in September for the purpose of certifying an amount for Truth and Taxation to Dakota County. There are no handouts for the General Fund Operating Budget discussion; however, the City Administrator will provide an overview of the work to-date on the budget, as a means of information and update for the Council. ACTION TO BE CONSIDERED: There is no formal action required. DISCUSSION RE: INTERVIEWING ARCHITECTS Director of Parks and Recreation Vraa has requested a few minutes to discuss the schedule and procedure for interviewing architects for the Community Center Project with the City Council. ACTION TO BE CONSIDERED: There is no formal action required. OTHER BUSINESS There are no additional items to be considered on the Special City Council agenda at this time. /s/ Thomas L. Hedges City Administrator C Memo to: Tom Hedges, City Administrator From: Ken Vraa, Director of Park and Recreation & Mark Vaughn, Civic Arena Manager Date: August 11, 2000 Re Additional Information, Civic Arena Budget The City Council asked staff to provide additional information following the council workshop on August 1, 2000 Request # 1. Equation between Eagan and Eastview hockey association, are they being handed fairly? There have been several meetings between the two organizations, some of which have involved staff. It's our understanding that they have worked out an arrangement that is fair to both. We would concur with this. Request #2. What are the ice times rates for the surrounding communities? While it's important to understand what the market is doing, each rink has a somewhat different approach to establishing fees. The following are either current rates or rates being proposed at this time. Apple Valley $145/hour Rosemount $140/hour Burnsville $140/hour Lakeville $135/hour Bloomington $135/hour Woodbury $140/hour Minnehaha $165/hour Inver Grove $Currently reviewing their budget. Currently at $140.00 Again, it is important to recognize what influences these rates, including costs of operation. For example, Burnsville, which also has a twin rink, and is charging $140 per hour, is not • Page 1 13 r 1 operated as an enterprise function. Capital items for the arena are purchased from a capital equipment fund operated out of the city's general fund. Burnsville intends to move to an enterprise function after their revenue bond is paid off in 2005. School District #196, which jointly owns the Apple Valley Arena, shares in the costs of operation for that facility. (Apple Valley has a second sheet of ice at the Hayes Community Center) Recently, the school district purchased a new ice resurfacer for the arena for which they are a partner in. Operating losses not covered by hourly fees are split between the city and the district at the end of each year. Request # 3. What is the potential payback of ice edger purchase if we don't have to open the facility to exhaust fumes for air ventilation? Staff has checked with Nelson-Rudie Engineering about the cost to do an analysis of heat loss during the process of opening the ventilation system following edging. Mr. Mike Worley from Nelson-Rudie indicates it would cost $750.00/day for their services and would take one day per arena for an analysis, computations and a report to calculate heat load/loss associated with this issue. The edger is proposed at a cost of $2,600. Request #.4 A question was raised as to part time salaries. The 2000 budget is for $87,000 for part time staff, which includs skate school instructors, concessions, skate guards, supervisors and custodial. As Of June 30, 2000, the arena has paid out $57,553.29 in salaries, with the busy season coming. The numbers for the 2001 budget are projected on the number of hours predicted to be sold. And the skating school hours. A large percentage of the part time salaries is allocated to skating school instructors and is variable dependant upon number of class offerings and students. In comparison to Burnsville, they have a proposed budget of $75,500 for the current year; however, they have full time salaries of $224,600, (compared to Eagan at $127,00 for the same year) owing to a larger number of full time maintenance staff. Request # 5 A question regarding the softening of ice time demand. Staff raised the issue to help the council to understand the market that the civic arena operates in and the importance of diversifying the source of revenues for the arena other then just ice time rentals from hockey. There is no disagreement that all hockey associations would love to have more week day hours between 5:00 and 9:00 during the season. However, the sale of hours on weekends and during the "shoulder seasons" is also important to the financial success of an arena. This is the area that there has been a weakening demand and a challenge to the arena staff to sell. The Eagan Civic Arena is not alone in this issue. Inver Grove Heights pushed back the opening of its second ice sheet one week this year, which is one week later then the year before. If the Council would care to take the time for staff to review this issue in more detail, we would be willing to take the time to do so. Copies of ice booking from the previous two • Page 2 4 seasons are available for review. This will help to show the hours where ice times have changed and the softening areas through out the year. The target areas that must be carefully monitored are the time periods from September through early to mid October and then again in March and April. The summer months are also critical because of operational costs. Most arenas survive on hockey schools and camps. This summer, a camp cancelled due to lack of registrations, resulting in a loss of $3,000 in ice rental. Staff is aware of other arenas also have cancelled summer ice rentals/camps. Note: Staff is concerned with the presumed perception that the desire is to raise rates, which is not the case. We believe it's important to keep rates down to as reasonable levels as possible to keep the sport of skating affordable and to encourage greater numbers of participants, not less! Staff's efforts to control costs, efficiently sell as many hours as possible and generate non-ice revenues are important in this regard. Significant time and energy is expended by management in pursuit of this. It's a difficult balancing act for staff to manage, as the council realizes. • Page 3 f f