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HomeMy WebLinkAboutCity Council - 04/09/1991FINANCE DIRECTOR JOHN FRANE AGENDA CITY COUNCIL STUDY SESSION 6:00 PM, CITY HALL COUNCIL CHAMBERS 7600 Executive Drive Mayor Douglas Tenpas, Richard Anderson, Jean Harris, H. Martin Jessen, and Patricia Pidcock City Manager Carl J. Jullie, Assistant to the City Manager Craig Dawson, Finance Director John D. Frane, Director of Planning Chris Enger, Director of Parks, Recreation & Natural Resources Robert Lambert, Director of Public Works Gene Dietz, Captain Jim Clark, and Recording Secretary Jan Nelson TUESDAY, APRIL 9, 1991 COUNCILMEMBERS: CITY COUNCIL STAFF: A I. CALL TO ORDER II. APPROVAL OF AGENDA III. DISCUSSION ITEMS A. General Fund Capital Improvement Needs IV. OTHER BUSINESS V. ADJOURNMENT MEMORANDUM TO: FROM: THROUGH: DATE: SUBJECT: Mayor and City Council Craig W. Dawson, Assistant to the City Manager ets Carl J. Jullie, City Manager April 5, 1991 Capital Improvements - General Fund A number of major capital improvements using the General Fund are foreseen over the next several years. The following memoranda go into greater detail about the program, timelines, costs, and financing of each facility. Schedules for improvements and funding obligations have also been prepared. Proposed facilities include: Net Cost used for Facility Cost Debt/Budget Calculations City Hall $4.5 - $5.5 Million $4.0 Million Police Station Expansion $800,000 $800,000 Fire Station No. 1 (replace) $1.2 Million $250,000 Fire Station No. 4 $1.0 Million $1.0 Million Public Works/Parks Maintenance (Replace) $4.5 - $5.5 Million $1.0 Million Ice Sheet No. 2 $1.0 - $1.25 Million $1.25 Million Outdoor Pool/Water Park $1.5 - $2.5 Million $2.0 Million Indoor Pool $1.0 - $2.5 Million $2.0 Million Trails $500,000 $500,000 Park Acquisition/Development $7.25 Million $7.25 Million $23.25 Million - $20.05 Million* $28.0 Million *Of this amount, $19,300,000 would be financed with debt obligations, and $750,000 would be made through operating budget appropriations. What Do These Costs Mean: These are significant numbers. To make them more understandable, here are some comparisons: $1 Million in debt for 20 years at 6.5% interest = $100,000/yr. repayment obligation $ 3.45/yr. for a $125,000 homestead The most this total package of improvements would cost the average homesteader, after they are all phased in, would be $69 per year. CWD:CJJ:jdp TIMETABLE FOR IMPROVEMENTS 1992 - Budget $100,000 for trails - Begin City Hall construction; $4MM long-term debt - Execute $1.2MM lease-revenue bonds for 2nd sheet of ice - Hold referendum to issue $5.5MM bonds for park acquisition/development 1993 - Budget $100,000 for trails - Expansion of police station - Execute $2MM lease-revenue bonds for outdoor pool/water park - Occupy 2nd sheet of ice - Execute $1MM lease-revenue bonds for improvements to Public Works/ Parks Maintenance building 1994 - Budget $100,000 for trails - Occupy City Hall - Occupy replacement Public Works/Parks Maintenance building - Occupy replacement Fire Station No. 1; budget for improvements - Occupy Outdoor Pool/Water Park - Hold referendum to issue $1.8MM bonds for park acquisition/development 1995 - Budget $100,000 for trails - Execute $2MM lease-revenue bonds for indoor pool 1996 - Referendum for $1MM Fire Station No. 4 (occupancy in 1997) CAPITAL IMPROVEMENT CASH NEEDS - GENERAL FUND 1991 $ 175,000 661,800 175,000 265,000 45,000 $ 1,321,800 1992 $ 175,000 265,000 100,000 $ 540,000 1993 $ 175,000 400,000 100,000 125,000 550,000 200,000 $ 1,550,000 1994 $ 50,000 400,000 100,000 125,000 550,000 200,000 250,000 200,000 100,000 $ 1,975,000 1995 Boyce property City Hall acquisition Public Works storage site City Offices lease Trails Boyce property City Offices lease Trails Boyce property City Offices lease Trails 2nd Sheet of Ice Park bonds Police expansion Boyce property City Hall Trails 2nd Sheet of Ice Park bonds Police expansion Fire Station No. 1 improvements Outdoor Pool/Water Park Maintenance Building $ 400,000 City Hall 100,000 Trails 125,000 2nd Sheet of Ice 730,000 Park bonds 200,000 Police expansion 200,000 Outdoor Pool/Water Park 100,000 Maintenance Building $ 1,855,000 -2- 1996 $ 400,000 City Hall 125,000 2nd Sheet of Ice 730,000 Park bonds 200,000 Outdoor Pool/Water Park 100,000 Maintenance Building 200,000 Indoor pool 200,000 Police expansion $ 1,955,000 1997 $ 400,000 125,000 730,000 200,000 100,000 200,000 200,000 100,000 City Hall 2nd Sheet of Ice Park bonds Outdoor Pool/Water Park Maintenance building Indoor pool Police expansion Fire Station No. 4 $ 2,055,000 1998 $ 400,000 125,000 730,000 200,000 100,000 200,000 100,000 City Hall 2nd Sheet of Ice Park bonds Outdoor Pool/Water Park Maintenance building Indoor pool Fire Station No. 4 $ 1,855,000. MEMORANDUM TO: Carl J. Jullie, City Manager FROM: i> Craig W. Dawson, Assistant to the City Managerd DATE: April 4, 1991 SUBJECT: Major Capital Improvements - General Government and Public Safety This memorandum will cover the building needs for a city hall, police station expansion, and fire stations. CITY HALL The anticipated program for this building includes 40,000 square feet for administrative offices, meeting rooms and public areas, and on-site storage space. Parking for 200 cars and 30 or so City vehicles would need to be provided on a site which architects have recommended to have eight acres (the City Code would require five to six acres for this scale of an office use). Time Frame: The City Council has given this project a very high priority. A rule-of-thumb in the development/construction industry for this type and size of building states that two years elapse from the decision to build until the building is occupied. The City's current lease at 7600 Executive Drive expires February 28, 1993; costs for rent, common area expenses, and property taxes run about $265,000 per year. Building Costs: It is estimated that the cost for the land, building, interior finishes, equipment, landscaping, and parking will be in the area of $5.0 million. Costs for the structure and interior finishes alone should be in the $70-$100/sq. ft. range based on figures from recent city hall constructions. If a 30,000 square-foot building were initially contructed, costs would decrease about $750,000. Financing: A variety of financing options are available. Given the magnitude of cost involved, financing over a period longer than five years is likely. Two avenues for this long-term financing are available. 1. General Obligation Bonds - Issuance of these bonds would need to be approved by referendum. These bonds traditionally carry the lowest rate of interest of any obligation issued by a city. 2. Lease-Revenue Bonds - Formerly called certificates of participation, these bonds allow investors to share in the earnings a financial institution receives from a lease for a building. Generally, these bonds carry the same or a very slightly higher rate of interest as G.O. bonds. Payments on lease-revenue bonds are now outside of Minnesota's municipal levy limits. Lease-revenue bonds do not require voter approval for their issuance. The City also has some cash resources available. The Council designated (or pre-funded) $660,000 in the 1991 Budget for site acquisition. We now estimate that an additional $340,000 of cash revenues could be allocated to the City Hall purchase, leaving an unencumbered balance of $1.5 million in the General Fund to handle our cash flow needs and emergencies. Carl J. Jullie, City Manager April 4, 1991 Page Two Preliminary analysis suggests that if the long-term financing obligaton were under $3 million, the annual appropriation to retire the debt would be about the same as the City's lease expenses in 1991. If this obligation were $4 million, the estimated annual cost to continue leasing 22,000 square feet would exceed annual bond payments after seven years. POLICE STATION EXPANSION The Police Station was designed to accommodate an addition to the south side of the building. The expansion program envisions doubling the administrative staff and investigator space (approximately 4000 - 5000 square feet), finishing the basement, and installing a firing range in the basement. Timetable: The office space in the Police Station is already quite crowded. Police staff places a high priority on this project, and notes its increasing importance with each passing year. Building Costs: A rough preliminary estimate of $800,000 has been made for these improvements. More detailed cost estimates will be needed. Financing: Two financing approaches appear to be appropriate. 1. General Obligation Bonds - These bonds would require a referendum. It could take place in conjunction with or separate from other referenda. 2. Internal Loan - If the Council chose to repay this debt in five years or less, surplus balances in utility or improvement funds could be used. General Fund appropriations would need to be made in successive years to pay back the principal with a rate of interest deemed appropriate by the Council. Annual appropriations would be in the $200,000 range. SOUTHWEST FIRE STATION Current planning for fire response includes a station in southwestern Eden Prairie, roughly in the vicinity of Pioneer Trail and Dell Road. A building identical to the new three-bay Fire Station No. 2 at Sunnybrook and Homeward Hills Roads would be constructed. Timetable: It appears that this station will be needed sometime after 1994. Building Costs: Expenses for this building should be similar (in constant dollars) to those for Fire Station No. 2, which totalled approximately $850,000. Land costs would be additional. Financing: Referendum-approved general obligation bonds or lease-revenue bonds would be appropriate financing mechanisms for this improvement. RELOCATE FIRE STATION NO. 1 The main fire station, located at Highway 5 and Mitchell Road, is scheduled to be razed with the construction of an interchange for Highway 212. This station serves as the main meeting and training facility capable of accommodating the entire department. Carl J. Jullie, City Manager April 4, 1991 Page Three Timetable: Assuming that MnDOT maintains its design and construction schedule for the interchange improvement, the replacement station will need to be occupied sometime in 1994. Land for this station needs to be identified. A construction contract would need to be awarded by early 1993. Building Costs: The main station is somewhat larger and better equipped than the satellite fire stations. Estimated costs for the building, parking, and landscaping are $1.2 million. The land cost is not included. Financing: The State of Minnesota would assume the costs to replace the station. Anything which could be considered an addition to the existing station will probably be the City's financial obligation. Depending on the amount of these improvements, they could be funded by an internal loan or by pre-funding in the General Fund. CWD:jdp -MEMORANDUM- TO: Mayor and City Council THROUGH: Carl Jullie, City Manager FROM: Eugene A. Dietz, Director of Public Works DATE: April 5, 1991 SUBJECT: Public Works/Parks Maintenance Facility REOUESTED ACTION Staff is requesting that City Council authorize the search process to begin for acquisition of a site to construct a new Public Works/Park Maintenance Facility. As will be pointed out in the balance of this memorandum, the time line for replacing the maintenance facility to fit TH 212 construction is becoming critical. EXISTING FACILITIES The current maintenance facility on Mitchell Road was constructed in 1982 and consists of approximately 32,000 square feet of usable space for the Parks, Street, and Equipment Maintenance Divisions. This figure includes the usable space from the old maintenance building being utilized by the Parks Department. The portion of the overall campus utilized by these maintenance operations is approximately 4.7 acres, of which 0.8 acres is attributable to outside storage. In addition, the City rents approximately 500 square feet of storage space in Chanhassen for winter storage of summer equipment. The current building was designed to be expanded, but decisions on TH 212 and the commitment to expand the existing water plant at this site preclude that from happening. Because of these decisions, the Maintenance Operations have been "getting by" until we can relocate the facility. The particular areas of need are additional cold storage space, parking for at least 20-30 more vehicles (especially in the summer when we hire part time employees) and at least tripling the size of our outside storage space. TIME CONSTRAINTS MnDOT proposes to be under construction with TH 212 by Spring, 1994. Our target should be to have a new facility constructed by year-end 1993. Assuming that land could be acquired by year-end 1991, that would leave approximately two years to develop the contract drawings and specifications, accept bids and construct the facility -- an acceptable amount of time, but not ample. Public Works/Parks Maintenance Facility April 5, 1991 Page 2 of 3 FACILITY NEEDS After considerable discussion, Staff concludes that a minimum of 15 acres (preferably 20 acres), will be necessary for ultimate needs for the maintenance operations. An immediate construction plan for 40,000 square feet should be anticipated, with the ability to expand in the future. The primary reasons for the additional acreage are listed as: I. This appears to be our last opportunity to secure a site for ultimate needs in Eden Prairie. As will be discussed below, the available sites are very limited, especially in a centralized location; 2. Any newly constructed facility will require significant screening. Since this screening will require berms and greater setbacks, a sizeable portion of the land will not be functional space; 3. We have a tremendous need for additional outside storage that will become more pressing in the future. For example, we currently stock pile seal coat aggregate on dead end streets in undeveloped areas. Development will preclude this from happening in the future. 4. Parking at the existing facility is at a crucial stage. This summer, maintenance crews will pave all the existing "nooks and crannies" to provide for parking space for permanent and temporary employees. However, a much expanded area will be necessary to provide parking for the ultimate needs for our maintenance facility in conformance with code requirements; and 5. Additional facilities are both desirable and potentially can be viewed as a requirement. For example, we currently store our sand and salt in an open pile from late fall to early spring -- usually with some carryover through the summer. While it would be desirable to have an enclosed facility to house this material, water quality issues may in fact make it a requirement some time in the future. POTENTIAL LOCATIONS Staff has reviewed approximately 11 locations in the community and find that only two or three of them are viable for a maintenance operation site. Based on the acreage necessary and the fact that compatibility with surrounding land uses can be difficult to resolve, the options are extremely limited. Currently, the identifiable sites would lie in the south central portion of the City. Since no property owners have been approached on this subject, specific locations should remain anonymous at this time. Public Works/Parks Maintenance Facility April 5, 1991 Page 2 of 3 FINANCING PLAN Based on 15 acres and a 40,000 square-foot building for initial construction, the expected cost is estimated between $4.5 and $5.5 million. The range in cost is due wholly to the expected land cost variables. Making some assumptions on replacement cost and the value of the land at the present site, we might expect that a settlement from MnDOT for acquisition of the maintenance facilities would yield approximately $4 million. Together with the $325,000 that has been set aside in the general fund operating budget for the past few years, the low end of the budget range may be wholly financed without the use of additional general funds. However, at the high end of the range, an additional $1 million dollars from the general fund would be necessary. PROPOSED ACTION PLAN Request that Council authorize Staff to begin discussions with land owners so that the following schedule could be implemented: I. Use the $325,000 as a down payment to secure a site by December I, 1991; 2. Select an architect by September 1, 1991 to begin the needs assessment for the facility and to allow an overlap during the land acquisition process to receive input on actual site needs; 3. Set a target date for plans and specifications to be complete by June, 1992. 4. Set a target for completion of a negotiated settlement with MnDOT on the present site by July, 1992; 5. Set a target of September 1, 1992 as a date to award a contract for construction of the project for completion by December, 1993. EAD:ssa Dsk:GD.MAINTENC.FAC MEMORANDUM TO: Carl Jullie, City Manager FROM: Bob Lambert, Director of Parks, Recreation and Natural Resources DATE: March 15, 1991 SUBJECT: Park and Recreation Capital Improvement Projects for Discussion at the March 26, 1991 Meeting ACQUISITION SUMMARY: Although the City does not have a great deal of land left to acquire for the municipal park system (approximately 100 acres) that property will be relatively expensive compared to most of the property acquired to date. City staff estimate that the acquisition costs remaining for the following parks will total $1.850.000: Riley Lake Park, Rice Marsh Lake Park, Crestwood Park, Cedar Forest Park, Prairie Bluff Park, and Smetana Lake Park. The City has also committed to acquiring approximately 160 acres in the Minnesota River valley as part of the Minnesota Wildlife Refuge and Recreation Area. There is no cost estimate for this floodplain property as some of this will be donated, while additional land may be purchased. DEVELOPMENT SUMMARY: The City still has a significant amount of the park system remaining to develop. The three major park improvement projects are: Miller Park, The Purgatory Creek Recreation Area, and Riley Lake Park totalling $5,800,000. The Purgatory Creek Recreation Area will be developed using tax increment financing funds, as well as matching grant money from the Watershed District. The City must also plan for the development of the following parks: Rice Marsh Lake Park, Crestwood Park, Cedar Forest Park, Pioneer Park, Smetana Lake Park, Prairie Bluff Park, and Edenbrook Conservation Area. The estimated cost for developing these seven parks is $820,000. There is also a total of $575,000 proposed for improvements to other existing parks. These park development projects total $7,195,000. With the exception of the $1,800,000 of tax increment financing, the remaining $5.395.000 must come from either park bond referendums, cash park fees. or the general fund, OTHER IMPROVEMENTS: Other major park system improvements that must be considered over the next five to ten-year period are as follows: Community Center expansion, which includes recreation staff offices, second sheet of ice and perhaps a gymnasium - estimated cost $1,950,000. Outdoor Pool (water park) - estimated cost 1.5 to 2.5 million, Indoor Pool - estimated cost 1 to 2.5 million Park & Recreation Capital Improvement Projects March 14, 1991 Page 2 Recreation Trails - estimated cost $100,000 Transportation Trails - estimated cost $350,000 The following information provides some additional information on capital improvement decisions that will be facing the City within the next five year period. RECENT MAJOR EXPENDITURES: In the last two years the City made three major parkland acquisitions - in 1989 the Purgatory Creek Recreation Area entry for $597,440; in 1990 the Boyce property in Staring Lake Park for $475,000, and the Jacques property in Riley Lake Park for $495,900. These three acquisitions have deleted the cash park fee fund. In order to accomplish the Boyce property acquisition the City borrowed from the utility fund and will be reimbursing that fund in the following amounts: . $200,000 in 1991 . $200,000 in 1992 . $150,000 in 1993 . $100,000 in 1994 The City paid $443,000 for 20.8 acres of the Jacques property in June of 1990 and will pay an additional $52,900 for the remaining 2.4 acres of Jacques property in 1991 once that parcel has cleared quiet title proceedings. All three of these parcels of property were key parcels to the overall park and open space system; however, due to the high cost of each of these parcels and the recession that has reduced the contributions to cash park fees since 1989 to less than $300,000 per year, any significant acquisition and development over the next few years will have to come from either the general fund or a park bond referendum. PARK ACQUISITIONS: Neighborhood Parks and Prairie Bluff Park: In 1987 and again in 1989 the City Council directed City staff and two different citizen committees to review community needs and make recommendations for park bond referendums. Although, both park bond referendums failed by less 1%, citizens that took the time to become involved in the process and to understand ongoing and future park needs agreed that parkland acquisition should be the first priority for any bond referendum. Both bond referendums recommended funding for acquisition of the remaining three neighborhood parks proposed for southwest Eden Prairie. The most recent bond referendum identified the need to acquire and preserve a significant amount of park and open space property along the Minnesota River bluffs for preservation purposes, as well as to provide residents with the opportunity to enjoy the views Park & Recreation Capital Improvement Projects March 14, 1991 Page 3 of the Minnesota River Valley. There is a need to acquire 3 neighborhood parks in Southwest Eden Prairie in order to meet our standard of a park within a 1/2 mile radius of all residential homes. Riley Lake Park, Smetana Lake Park, Minnesota River Valley: Beyond the previously stated considerations there is also approximately 15 acres of land remaining to acquire for Riley Lake Park and approximately 5-7 acres to acquire on the north shore of Smetana Lake. The only other land acquisition proposed is the commitment the City of Eden Prairie made to the Minnesota Wildlife Refuge and Recreation Area, which was to acquire approximately 160 acres of Minnesota River Valley floodplain sometime in the future. Creek Valley Dedication: The City of Eden Prairie has also committed to preserving through donation or dedication the floodplain and creek valley areas of Nine-Mile Creek, Purgatory Creek and Riley Creek, as land adjacent to those parcels is proposed for development. Purgatory Creek Recreation Area: The City of Eden Prairie has been in discussion with property owners that own Purgatory Creek floodplain in the Major Center Area since 1983, regarding dedication of that floodplain to allow the City to develop the Purgatory Creek Recreation Area. Although this property is proposed for park, it has always been intended that property owners would dedicate this floodplain property, (as other developers have dedicated floodplain property throughout the community when their adjacent property is developed). PARK DEVELOPMENT: Miller Park: The CIP calls for a 3.5 million dollar referendum in 1992 for development of Miller Park. Initial expenditure on this CIP calls for $300,000 to be spent in 1993, basically on plans and specifications for the entire site including grading, roads, utilities and structures. Construction to begin in late 1993 and completed in 1996. This plan also calls for a 2.5 million referendum in 1998 for construction of an outdoor swimming pool in Miller Park. City staff will be recommending the City consider the feasibility of reexamining the final design for Miller Park in order to accommodate a water park that would be developed sometime in the future. Although, this may require elimination of one or two soccer fields, staff believes an outdoor pool or water park should be accommodated in the system, and when considering location, adjacent land use, and the amount of land required, the options for locating this type of facility are limited. Park & Recreation Capital Improvement Projects March 14, 1991 Page 4 Purgatory Creek Recreation Area and Riley Lake Park: City staff is proposing the development of the Purgatory Creek Recreation Area beginning in 1993 and completion in 1996. The only other significant park development project is Riley Lake Park. Staff estimate approximately $500,000 in development costs over the next ten years for Riley Lake Park. PUBLIC GOLF COURSE: Many developed communities in the area are looking for property to develop as a public golf course. The only course in Eden Prairie that allows the public to golf is the par three at Cedar Hills. City staff continue to recommend the City plan to provide a public golf course. The most logical site is the property to the south and west of Flying Cloud Airport. The City of Eden Prairie should continue to encourage the Metropolitan Airports Commission to acquire a significant buffer around the south and west portion of the airport to ensure a limitation on future land use conflicts with the airport. The City of Eden Prairie should also consider acquiring land in that same vicinity for a community park overlooking the Minnesota River valley. The City should be discussing with M.A.C. the possibility of developing a public golf course on the future airport property south and west of the existing airport. COMMUNITY FACILITIES: Community Center Improvements: The Community Centers in the cities of Chaska and Shoreview are examples of "state of the art" community centers in 1990, but will be common place by the end of this decade. Facilities that must be planned for expansion to the Community Center are as follows: 1. A second sheet of ice to accommodate Eden Prairie's growing population. 2. Permanent office space for the Community Center and recreation staff. 3. A gymnasium/community room to provide for a variety of community events, and youth recreation programs; and open gym space for volleyball, basketball, badminton, etc. If the City Council wished to consider dedicating revenue from ice rental to paying off bonds for a second sheet of ice rather than off setting operating costs, there may be sufficient revenue to construct a second sheet of ice through a lease purchase contract. City staff would project approximately $95,000-$100,000 in revenue for a six month ice rental operation. The preliminary estimated construction costs for the second sheet of ice range from 1.4 to 2 million dollars to construct an addition to match the existing facility. Park & Recreation Capital Improvement Projects March 14, 1991 Page 5 Second Indoor Swimming Pool: As Eden Prairie continues to grow, demands for the existing pool space, especially by swimming teams and lesson programs, compete with times designated for open swimming. The City should consider construction of a second indoor pool, either at the Community Center or at another site. Staff would recommend a second pool be designed strictly for recreational use, so the existing pool can be scheduled more heavily to accommodate competitive swimming needs, as well as lesson program needs. A recreational pool would include attractions such as a water slide, zero depth area, rope swing, water sprays, etc. (Staff would recommend a citizens committee be appointed to study both indoor and outdoor swimming pool needs, prior to making any decision on future pool construction.) TRAIL CONSTRUCTION: Transportation Trails: Transportation trails are 8' asphalt trails along existing or future roadways that serve the purpose of providing safe pedestrian/bicycle corridors from residential neighborhoods to parks, schools and shopping areas. These trails will be funded through the Public Works capital improvement program for those trails remaining to be constructed along existing City streets. Those trails include the following: I. County Road 1 from Homeward Hills Road to Frani° Road. 2. County Road 4 from Highway 5 to Valley View Road (on the east side). 3. County Road 4 from Valley View Road to Minnetonka. 4. Prairie Center Drive from Highway 169 to West 78th Street (southeast quadrant). 5. County Road 1 from Dell Road to Riley Lake Park. (There are also many short segments of sidewalk that need to be completed throughout the City.) Recreation Trails: Recreation trails are those trails that are developed within City parks that may also provide critical transportation links between neighborhoods and parks, but also provide scenic hikeways/bikeways throughout the city. Those trails include the following: 1. Purgatory Creek crossing from Antlers Ridge to Branching Horn. 2. Purgatory Creek from Anderson Lakes Parkway to Staring Lake Parkway. 3. Purgatory Creek from Mitchell Road to Highway 5. 4. Edenbrook Conservation Area. 5. Staring Lake Park from trail around the lake east to Creek Knoll Road. 6. Hidden Ponds Park along the old railroad bed. carlj/11 MEMORANDUM TO: Mayor and City Council Parks, Recreation and Natural Resources Commission THROUGH: Carl Jullie, City Manager FROM: Bob Lambert, Director of Parks, Recreation and Natural ResourcesIAL- DATE: March 18, 1991 SUBJECT: Information Regarding a Second Sheet of Ice at Eden Prairie Community Center The City of Eden Prairie continues to get requests for the City to consider construction of a second sheet of ice at the Eden Prairie Community Center. Prior to discussing this issue, staff felt it was important to gather some facts regarding the history of use of the ice arena at the Community Center to date, and review some cost estimates for operating a second sheet of ice. Attached to this memo are a series of graphs that depict the amount of ice time sold to various groups from 1982 through 1990. Also, attached is a copy of a recent survey of 31 ice arenas in Minnesota and Wisconsin that compare ice time rates, months of operation, total ice hours sold, annual operating expenditures versus revenues, etc. City staff believe it is important to review this information prior to making decisions on a second sheet of ice. The Hockey Association has provided the City with total ice time purchased in other arenas since 1989: Blake 101 hours Shakopee 64 hours Total 165 hours 1989/90: Blake 101 hours Shakopee 36 hours Met Center 30 hours Total 167 hours 1990/91 Blake 103 hours Met Center 30 hours Cooper 12 hours Delano 6 hours Shakopee 50 hours Minnetonka 58 hours Chaska 130 hours Hopkins 23 hours Total 412 hours Information Regarding Second Sheet of Ice March 18, 1991 Page 2 The Hockey Association has had a number of individuals remove their children from the hockey program because they did not want their children playing hockey late at night on school nights, or on Sunday mornings when their choice had to be church or hockey. The Hockey Association is strongly urging the City Council to consider a second sheet of ice in order to accommodate growth in the program, and to attempt to reduce or eliminate their use of late night weekday rental or Sunday morning rental. City staff have not obtained professional cost estimates on any new construction; therefore, our cost estimates are simply based on square footage costs, not any particular set of plans, etc. CONSTRUCTION COSTS: These costs could vary from approximately 1.4 million to 2 million based on the amount of spectator seating and whether or not we would have to construct team rooms, etc. If the City were able to acquire the North Star space for under $200,000 and convert it to team rooms, it is possible that we might construct a facility to match the existing brick exterior for as low as 1.4 million, perhaps less; however, I would estimate that it could also be close to 2 million dollars depending on site improvements and the level of finishing on the interior spaces. OPERATING COSTS: I've attached a memo from David Black that estimates operating costs for a second ice rink at $94,500 per year, if we only operate ice six months per year. These costs could rise to over $150,000 if we operate ice on a year-round basis. REVENUE: Estimated revenue would be approximately $93,000 per year for six months ice rental and perhaps an additional $7,000-$10,000 for dry floor event rental, depending on additional investment for batting cage, flooring for indoor soccer, etc. Revenue might reach as much as $140,000 per year if we operate 10 1/2 to 11 months per year providing we had a good summer hockey camp. LEASE PURCIIASE: If the City decided to absorb all operating costs and use a lease purchase option, $100,000 per year for 20 years at 7% could retire approximately 1.1 million dollars; $140,000 could retire approximately 1.5 million dollars. These figures reflect a gradual increase in annual payments over the 20 year period that would coincide with increased rental rates. The City presently offers the Hockey Association of Eden Prairie a $5 per hour rental fee discount from prime time rates. If we charged all local users the full prime time rate, we would generate an additional 5%. Information Regarding Second Sheet of Ice March 18, 1991 Page 3 The amount of total ice time per year has fallen off over the last few years d u e t o t h e i n a b i l i t y to lure a quality hockey camp to the City during summer months. It might ma k e s e n s e t o a t l e a s t investigate the idea of considering construction of an Olympic size ice rink a s a s e c o n d r i n k . This size rink would be unique to the metropolitan area and might attract a qu a l i t y h o c k e y camp. The initial investment would be approximately $100,000 more than a conv e n t i o n a l r i n k , b u t might be the key to being able to pay off a higher debt. Figure skaters and hockey players, and to some extent swimmers, are t h e o n l y a t h l e t i c participants in this community that are required to pay for either operating cost s o r c o n s t r u c t i o n costs for their recreational facilities. Granted, those facilities are very expe n s i v e a n d s e r v e a limited number of people; however, the same could be said for tennis court s , s o f t b a l l f i e l d s , soccer fields, footballs fields, etc. For this reason, staff believe there is som e j u s t i f i c a t i o n t o using the revenue from rental of these facilities to pay off construction costs a n d r e q u e s t i n g t h e City to assume the maintenance costs on these facilities as the City assumes m a i n t e n a n c e c o s t s on all other athletic facilities. If the City Council accepts that premise, then it w o u l d b e s t a f f ' s recommendation to consider the "worst case scenario" for determining how muc h r e v e n u e w o u l d be produced from a second sheet of ice in order to determine how much t h e C i t y c o u l d a f f o r d to build. City staff believe that worst case scenario is $93,000 per year at $ 8 5 p e r h o u r r e n t a l rates (the 1991 rate minus the 5% discount). That revenue is $101,000 if r e n t a l i s f i g u r e d a t $92.50 per hour, which would be the 1992 prime time rental rate (eliminate discount to local organizations). If the Council is interested in pursuing this item, the next step would be to h i r e a n a r c h i t e c t u r a l firm to develop a schematic plan for an ice arena addition and develop prelim i n a r y c o s t e s t i m a t e s to determine if the project is feasible. BL:mdd 2ndice/11 MEMORANDUM TO: FROM: DATE: SUBJECT: Bob Lambert, Director of Parks, Recreation & Natural Resources Dave Black and Jeff Elwell, Community Center Staff February 7, 1991 Second Ice Surface Additional Operating Costs 1. Current ice arena utility costs October 1 - March 31 are: Gas $13,000 Electric 30,000 $43,000 This figure is our best estimate considering the additional utilities needed for pool, racquetball, meeting rooms, etc. Estimated additional costs for second ice arena October 1 - March 31 would be as follows: Gas $12,000 Electric 25,000 $37,000 This is based on current estimates plus information obtained from Richfield and Apple Valley arenas. 2. Dry floor utility costs for April 1 - September 30 based on 10-15 hrs/day for activities as follows: $1950.00 This is based on 1-1000 watt bulb operated for 10 hours will equal a cost of $.60 to operate. Arena would be lit with 18-1000 watt bulbs. $.60 pr 10 hr period x 18 Cost per Day $10.80 30 days Cost per month $324.00 6 months Cost for 6 months $1944.00 Second Ice Surface Additional Operating Costs February 7, 1991 Page 2 3. Additional operating costs would be defined as fol l o w s : 6 months ice in Full time maintenance wages $ 22,000 Part time maintenance wages 9,000 Part time office wages 2,000 Repair & maintenance Ice Arena 7,500 Cleaning & maintenance supplies 1,500 Fuel & propane 2,000 Additional contract services 1,500 Gas 12,000 Electric 25,000 Air Conditioning for Dry Floor - $ 32.500 Full Year including 6 month Dry Floor $ 22,000 13.090 4,000 7,500 2,000 2,000 2,000 14,000 28,000 $ 94,500 This information is based on anticipated use and eur n s v i l l e stating that their costs went up approximately by 1/3. 4. The estimated total added operating costs at the Community Center with a second ice surface in an enclosed b r i c k building (with ice 6 months and some dry floor activ i t i e s 6 months). $94,500 + any air conditioning costs for dr y f l o o r activities. More information will be provided regard i n g a i r conditioning. This is based cc #3 above. 5. In 6 months time from October 1 - March 31 approxim a t e l y 1092 hours of ice can be sold. 42 hours per week x 26 weeks = 1092 hours The revenue produced from this amount is $92,820.00 (1092 x $85) Saturday -Sunday, 8 am - 9:30 pm (11 hrs/day Monday-Friday, 5:30-10:15 pm (1 hr segments with 15 minute resurface after) cc: Laurie Helling, Manager of Recreation Services Connie Peters, Lead Secretary Community Center = 22 hr/wk = 20 hr/wk 42 hr/wk 2400 H 2200 2000 1800 H 1600 1400-I 1200 1000 1982 1983 1984 1985 1986 1987 1988 1989 1990 Years A TOTAL HOURS OF ICE TIME SOLD Eden Prairie Community Center Hours Source: City of Eden Prairie 240 220 200 180 160 - 140 - 120 - 100 -I 80 -1 60 40 - 20 - 0 E.P. HIGH SCHOOL ICE RENTAL Eden Prairie Community Center Hours 200 190 180 170 160 150 140 130 120 110 100 1982 1983 1984 1985 1986 1987 1988 1989 1990 Years Source: City of Eden Prairie E.P. FIGURE SKATING CLUB ICE RENTAL Eden Prairie Community Center Hours 1982 1983 1984 1985 1986 1987 1988 1989 1990 Years Source: City of Eden Prairie E.P. MEN'S REC. LEAGUE ICE RENTAL Eden Prairie Community Center Hours 340 320 300 280 260 240 220 200 180 160 140 120 100 1982 1983 1984 1985 1986 1987 1988 1989 1990 Years Source: City of Eden Prairie YOUTH SUMMER LEAGUE Eden Prairie Community Center Hours 400 -{ 380 1 360 - 340 - 320 300 280 260 240 220 1 200 1 180 1 160 - 140 1 120 100 80 60 40 20 1 , 0 1982 1983 1984 1985 1986 1987 1988 1989 1990 Years Source: City of Edea Pralria MiNNESOTA NORTH STARS ICE RENTAL Eden Prairie Community Center Hours 350 300 - 250 - 200 - 150 - 100 - 50 -I 1982 1983 1984 1985 1986 1987 1988 1989 1990 Years Source: City of Eden Prairie E.P. HOCKEY ASSOCIATION ICE RENTAL Eden Prairie Community Center Hours 1000 17 950 900 - 850 - 800 750 - 700 650 - 600 - 550 - 500 - 1982 1983 1984 1985 1986 1987 1988 1989 1990 Years Source City of Eden Prairie YOUTH SUMMER CAMPS Eden Prairie Community Center Hours 400 380 360 340 320 300 280 260 H 240 220 200 180 160 140 H 120 100 80 60 40 20 0 Source: City of Eden Prairie ICE RENTAL HOURS AT THE EDEN PRAIRIE COMMUNITY CENTER HOCKEY ASSOCIATION OF EDEN PRAIRIE Year Number of Hours 1982 524 1983 859 1984 750 1985 590 1986 710 1987 702 1988 734 1989 776 1990 766 Total 6411 EDEN PRAIRIE HIGH SCHOOL Year Number of Hours 1982 128 1983 123 1984 184 1985 194 1986 178 1987 162 1988 183 1989 161 1990 164 Total 1477 EDEN PRAIRIE FIGURE SKATING CLUB Year Number of Hours 1982 0 1983 99 1984 196 1985 231 1986 216 1987 197 1988 146 1989 186 1990 203 Total 1474 ICE RENTAL HOURS EDEN PRAIRIE COMMUNITY CENTER Page 2 MEN'S REC. LEAGUE Year Number of Hours 1982 102 1983 176 1984 249 1985 245 1986 306 1987 320 1988 324 1989 299 1990 338 Total 2359 YOUTH SUMMER LEAGUE Year Number of Hours 1982 0 1983 0 1984 331 1985 360 1986 334 1987 310 1988 280 1989 280 1990 267 Total 2162 YOUTH SUMMER CAMPS Year Number of Hours 1982 139 1983 178 1984 340 1985 305 1986 211 1987 255 1988 204 1989 217 1990 0 Total 1849 ICE RENTAL HOURS EDEN PRAIRIE COMMUNITY CENTER Page 3 NORTH STARS Year- Number of Hours 1982 0 1983 51 1984 44 1985 135 1986 256 1987 293 1988 96 1989 116 1990 165 Total 1156 TOTAL HOURS OF ICE RENTAL TO MAJOR GROUPS !NAL Number of Hours 1982 1127 1983 1630 1984 2205 1985 2117 1986 2219 1987 2256 1988 1972 1989 2035 1990 1920 EDEN PRAIRIE SURVEY SUMMARY OF FINDINGS Thirty-two facilities responded to the Eden Prairie survey on ice facilities. Aldrich Arena which included the statistics for nine facilities could not be used for the majority of the statistics, as information on individual arenas was not discernable. Other surveys didn't provide complete information on all questions; therefore, all questions will not total 31 responses. This is not intended to be a scientific survey, but simply an information gathering device to provide general information regarding dates of operation, ice rental rates, and information on summer ice time or dry floor event revenues. Ice arena facilities vary to a great extent regarding the type of construction, spectator seating available and perhaps most importantly location. PRIME TIME RATES: Prime time ice rental range from $100 per hour for weekend games at Northfield to $55 at New Ulm. The average prime time rate was $80.43, although, the average rate in the meto area was $86.08 per hour. PRIME TIME DEFINITION: Of those that responded, the cutoff time for prime time rate varied greatly in the arenas. Prime time rates were charged up until 10 p.m. in six arenas; to 10:15 p.m. in one arena; to 10:30 p.m. in three arenas; to 11 p.m. in five arenas; to midnight in eight arenas and to 2 a.m. in one arena. Prime time starting times also ranged significantly as did the dates of the year. Ten of the 32 arenas appear to have a single rate for ice time. MONTHS OF OPERATION: Of the 26 arenas that have a single sheet of ice: . 6 operate ice 10-11 months of the year . 2 operate 8-9 months of the year • 6 operate 7 months of the year • 12 operate 5-6 months of the year Of the six with two full sheets of ice, three are basically operating both rinks on a year-round basis (Burnsville, Braemer and Olmstad County), while Minnetonka operates one sheet for approximately 11 months of the year and the second sheet of ice 8 1/2 months of the year. Saint Could State opened one rink for summer ice in June and the second sheet in July and closes both rinks in April. TOTAL ICE HOURS SOLD: Total ice sold on a single ice sheet during a year ranges from 4060 hours to about 826 hours, with the average number of hours sold on a single ice rink at 1672 hours per year, from the 16 that reported full seasons of operation. Only one of the arenas with two ice rinks reported total hours sold. SUMMER ICE TIME: Summer ice time was reported by 16 arenas. Braemer and Olmstad County did not report the number of summer ice hours sold, but did indicate that ice was operated on both rinks throughout the summer. Of the arenas reporting hours sold, ice rental ranged from 50 hours to 752 hours during the three months of the summer, with an average of 353 hours sold during the months of June, July and August. ANNUAL OPERATING EXPENDITURES: Discounting Eden Prairie, Brooklyn Park, New Ulm, Chaska and Olmstad County arenas, where expenditures include costs for swimming pools, racquetball courts, gyms, etc., the ice arenas with single rinks reported 1990 annual operating costs ranging from $108,000 to $395,000, with the average annual operating cost at $192,600. This varies a great deal depending on whether or not the facility provided ice 5 months or 12 months, and if the expenditures were part of a larger municipal or county maintenance department. These costs did not seem consistent with the number of months of operation. REVENUES VERSUS EXPENDITURES: Eleven of the 31 arenas that responded indicated revenues and expenditures for the year; however, when multiplying the total hours sold by the prime time fee per hour, plus the total revenue for dry floor events, it appears difficult to determine how several could possibly break even or exceed expenditures. ice/11 February 21, 1991 _ § EE 2 2 3 22 8! ' 2 gl:;;; ER 8 1 I 8! i " ; s w .1 A" ° 4 R 2 a . e 5, t ::•• 7 [ no Octinarch 7/22.8/17 3 si 2 .4 - -- 2 - saA 2 2 ti.fi rli BR 2,1 i i . 2 gl I Z. 1- 0Orlsi 009'071 2 E 2 RR 2 I, t Eo .'r.-"... 32 2 ° -- 8 8 . i : -r, 3211F, 3 t Iglg 1 2 2 s i§ 2 8 Itg ._ . tra ' .s,r3 Rri 2 3 i ^ : 3 23 ..-.7 i"-• 2 ii= 1 r° i§ :::.:'::".,::.:::, 1990 1 I rota1 re•enoe dry floor events MO 11 E ; _ n !! i IDid yob tOtel ice fife from 1989 to 19907 101e1 hrs of snorer iCell,. Ii sold including both rints Best dry floor use of ice *rens !••-1 2 2 11.- 2 ;I -21 a8J I g 88 ; ti P. I I EF, .64 51. E E§ : 2 * §.§ 2 2 . - : riz -2. .t. f.i. -- 2 E E 2 E S . 2 1E2 E 2 .: - -Ei I:SO g t ri Iii. 2 2 : v --1 • 8 2 2 2 .- 1 .. i a - rti :18 2 r 2 4- -i - -4 • total ice tire sold 1990 SUoaEll ICE MOMS • ACKIey Gasps • !locker leaves • Skating Lessons , • Adult Leagues • total flours Sold 6 tsl. I/ • -, 11 __ 11 if! .".' Do you include capitol i aoreoents in e di tufts' Did sou total ice Om from . 1989 to 19901 • total hes of sonme ice tioe cold ineludir, both rine, Elect den floor use Of ite , ;i2t2 arts/crafts concert gred dames roc. show — 2. , -2 r i 2 i lif E.-- OH 2--- tee . i I § Rk Wagtail Lly Rec Center Rochester 11 p.m. 22 1 ^ i both rings ! used beatify during sumer 1 . kik —22 2 5t E-t 111Mi - 2 - i -72 2 Ell sand floorlimits dry floor potential bg '-- 1:4 i : - 1 1 — E 2 i E.: dtV : 11 S 2 E Ell " ! i:771 ;t- s E- -- li 2 ',-;„ ..a. i 2 • , 1 ni. iii 1 2C 2 " i : 1 • E artsre sssss dog shows car shows Oar.. sales awit shows gun shows N/A N/A 2 E E3 4 2 : i E - g .ii k011 !Wit § rit - ii 1 pates Of operas on 1990 totM ice tine to. 1990 SUWWC4 ICC HOURS • hockey Cams • hockey leagues • SlatIng lessons • Adult toasuca • total Pours told IDry floor events & revenue generated 1 ft l i 11 ii EE k / 31 4 f ! t. toi 12 il !