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�- DRAFTfor Roseville Ci� Council-- -�1�t Reading, June 13,2005 V. The Roseville Skating Center (RSC) components and challenge in assessing and attributing revenues and costs • The Roseville Skating Center (RSC) is one facility comprised of three different segments; 1. RSC Oval 2. RSC Arena 3. RSC Banquet/Meeti�g Facility • Some eonf-�sio�. exists because the entire Roseville Skating Center is commonly referred to as "The Oval". • The entire RSC serves an estimated 250,000 recreational occasions annually. • Challenge: separating labor/managemeni costs and supplies for the three revenuelcost centers: o All three revenue/co�t centers use the same management, maintenance and operational staff, as well as sharing costs for groundskeeping, parking lot, and common utilities (outdoor security lighting and signage, restrooms, heat for locker rooms, etc.). o Example: The staff working in the front information area prepares money for deposit from all segments, answers questions about all segments, collects admissions for public sessions as well as several other miscellaneous tasks o Example: The Raider Room is considered part of RSC Banque�INleeting Facility, but the utilities are charged to the RSC Arena VI. Task Force Definition of Long Term Financial Viability: • To achieve long-term financial viability: o$100,000 per year in additional income (or reduction in costs) o$150,000 per year in capital for repairlreplacement • Note: o Group focused on long term to outline financial viability beyond immediate repair needs. o Group defined figures above from caz�s��tatioxas and discussion with city finance staff— See Attachments 4 and 5 VII. BackgroundlRS� Oval History — Financial Perspective • As originally conceived, the RSC Oval complex plan was financially viable Deviations from the plan, along with inaccurate financial assumptions, resulted in a business plan which has not performed as forecasted: o The original bonding provided by the State of Minnesota was less than expected o Lodging and restaurant tax proceeds were expected to contribute to potential shortfalls; however, mid-90's changes in tax laws made that avenue of support unavailable o Components such as "Pro-Shop" and "Restaurant" never materialized o There were assumptions made in the initial projections for both income and cost of operations that in retrospect were inaccurate. Over the ensuing years the income has risen to a level closer to the estimates, but the costs were higher than projected � In summary, the Task Force is evaluating a facility already in existence with a high asset value, but has an operating deficit and na plan for eventual replacement or repairs Oval Task Force Final Report Page 8 of 29