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ATTACHMENT 15 Taslc Force Meeting Minutes that there are no comparable facilities in the country and therefore a lot of the finances were based on estimations. The OVAL was projected to generate $75,000 to $95,000 annually, what is noteworthy from the actual financial data from 1994 and 1995 is that the total ice rental revenue was short 38% and 34% respectively, and that the operating costs were ap�roximately 80% and 85% higher than anticipated. The increased operating costs were primarily due to personnel and utilities. The increase in personnel costs was thought to be from increased staffing during start up of operations and the increase in utilities could have been due to low initial estimates on how much it would cost to operate the facility among other factors such as weather. Chris did not have information for how weather does affect revenues at the OVAL but suggested it could probably be an issue he could gather data for, with help from weather service records. Overall, in the first three years of operation the OVAL had approximately $340,000 in operating losses. Also, noteworthy from the feasibility study was the lacic of funding to cover depreciation, Chris believed that at the time the study was done that it was presumed that another funding source would cover depreciation, possibly an increased hospitality tax in the city. Chris ran through the financial data for the 2002 and 2003 operating seasons when the entire Slcating Center (arena, OVAL and banquet facility) was traciced together and noted that there was still an annual operating loss of approximately $75,000. In his su�mnary Chris pointed out the financial viability of the Slcating Center is dependent on 4 factors: participant levels and participant fees, which generate about 60% of the Skating Center revenues and personnel operating costs and utility operating costs. The city and Slcating Center will need to stabilize these four factors and also need to increase revenues by $250,000 annually, ofthis $150,000 would go towards operating costs and $100,000 needs to earmarlced for future repairs. Questions were aslced about the 4 factors Chris listed: How is ice rental fee set? Lonnie responded that rental fees at area arenas and at banquet facilities are set by marlcet survey and that the fees at the Slcating Center are set to remain "competitive", our rental fees for the arena may be somewhat lower, there isn't a good comparison for OVAL rental fees and that the banquet facilities are probably on a par with other area facilities Leslie responded that through her experience with RVA the banquet rental rates may be on the low side and suggested we could loolc at increasing the fees there. It was also noted that Parlcs and Rec. affiliated groups use the banquet facilities at no charge and possibly could be charged in the future. How are weather factors considered? Is the possibility of increased energy costs factored into the additional $150,000 that will be needed? Chris replied that they have not talcen into consideration increased energy costs; the $150,000 is based on today's costs. Do renters receive "credit" for OVAL closures. Lonnie responded that every effort is made to lceep the OVAL open, if weather conditions are extreme they worlc with user groups to try to lceep using the OVAL without putting anyone at rislc, but if sessions do need to be cancelled they do credit the user group. Chris provided an explanation as to why depreciation was never factored in the initial feasibility study for the OVAL. He reminded us that while in the private sector most businesses always figure in depreciation — this was in response to Leslie's observation that a projected surplus of $75-9S,OOf} seemed somewhat out of line — the government has ATTACHMENT 15 Taslc Force Meeting Minutes