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��'"��F ►- l�`T�y1710 To: Oval Taslc Force ATTACHMENT 4 Review of the Oval's Financial Performance From: Chris Miller, Finance Director Date: February28,2005 Re: Review of the Oval's Financial P�rFpt-i�ance Overview Earlier this year, the City Council created a taslc force to review the Oval's long-term viability. To facilitate this process, a review of the Oval's financial operations has been made. The information presented below is divided into three sections. The first section loolcs at the comprehensive feasibility study conducted in 1992 which projected financial outcomes. The second is a review of the Oval's operations for fiscal years 1994 and 1995. These two years are of particular significance as they represent the limited number of years for which independent financial data was traciced separate from other parlcs and recreation functions, a��! for which the Oval was fully operational. Finally, the third section deals with the Skating Center (Oval and Arena combined) operations for the period 2040-2003. While data for 2004 is readily available, it does not include a full season of Oval operations therefore the numbers are not comparative. At the conclusion of the memo, four factors are identified that heavily determine the Slcating Center's long-term financial viability. Section 1- Oval Feasibility Study In 1992, the City Council hired the firm of Independent Consulting Engineers, Inc., to prepare a site selection and revenuelmanagement study for the Oval. Based upon the study, the recommended site was the current location adjacent to the existing ice arena. The recommendation was based on the financial merits as well as facility cnordinationlmanagement reasons. The revenuelmanagemer�t portion of the study made several recommendations with regard to the Oval's operations, including staffing levels and potential revenue sources. The Study did cite the lacic of comparable facilities to draw experiences from, which lilcely necessitated a fair amount of estimation as to the Oval's participant levels and operating costs. To compensate, the Study noted that the financial pro-forma was generally conservative in nature. However, history would demonstrate that despite a conservative pro-forma, actual financial performance was significantly worse than projected.