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2005_0620_Packet
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2005_0620_Packet
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Roseville City Council
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ATTACHMENT 15 <br />Taslc Force Meeting Minutes <br />that there are no comparable facilities in the country and therefore a lot of the finances <br />were based on estimations. The OVAL was projected to generate $75,000 to $95,000 <br />annually, what is noteworthy from the actual financial data from 1994 and 1995 is that <br />the total ice rental revenue was short 38% and 34% respectively, and that the operating <br />costs were ap�roximately 80% and 85% higher than anticipated. The increased <br />operating costs were primarily due to personnel and utilities. The increase in personnel <br />costs was thought to be from increased staffing during start up of operations and the <br />increase in utilities could have been due to low initial estimates on how much it would <br />cost to operate the facility among other factors such as weather. Chris did not have <br />information for how weather does affect revenues at the OVAL but suggested it could <br />probably be an issue he could gather data for, with help from weather service records. <br />Overall, in the first three years of operation the OVAL had approximately $340,000 in <br />operating losses. Also, noteworthy from the feasibility study was the lacic of funding to <br />cover depreciation, Chris believed that at the time the study was done that it was <br />presumed that another funding source would cover depreciation, possibly an increased <br />hospitality tax in the city. <br />Chris ran through the financial data for the 2002 and 2003 operating seasons when the <br />entire Slcating Center (arena, OVAL and banquet facility) was traciced together and noted <br />that there was still an annual operating loss of approximately $75,000. <br />In his su�mnary Chris pointed out the financial viability of the Slcating Center is <br />dependent on 4 factors: participant levels and participant fees, which generate about 60% <br />of the Skating Center revenues and personnel operating costs and utility operating costs. <br />The city and Slcating Center will need to stabilize these four factors and also need to <br />increase revenues by $250,000 annually, ofthis $150,000 would go towards operating <br />costs and $100,000 needs to earmarlced for future repairs. <br />Questions were aslced about the 4 factors Chris listed: <br />How is ice rental fee set? Lonnie responded that rental fees at area arenas and at banquet <br />facilities are set by marlcet survey and that the fees at the Slcating Center are set to remain <br />"competitive", our rental fees for the arena may be somewhat lower, there isn't a good <br />comparison for OVAL rental fees and that the banquet facilities are probably on a par <br />with other area facilities Leslie responded that through her experience with RVA the <br />banquet rental rates may be on the low side and suggested we could loolc at increasing the <br />fees there. It was also noted that Parlcs and Rec. affiliated groups use the banquet <br />facilities at no charge and possibly could be charged in the future. <br />How are weather factors considered? Is the possibility of increased energy costs factored <br />into the additional $150,000 that will be needed? Chris replied that they have not talcen <br />into consideration increased energy costs; the $150,000 is based on today's costs. <br />Do renters receive "credit" for OVAL closures. Lonnie responded that every effort is <br />made to lceep the OVAL open, if weather conditions are extreme they worlc with user <br />groups to try to lceep using the OVAL without putting anyone at rislc, but if sessions do <br />need to be cancelled they do credit the user group. <br />Chris provided an explanation as to why depreciation was never factored in the initial <br />feasibility study for the OVAL. He reminded us that while in the private sector most <br />businesses always figure in depreciation — this was in response to Leslie's observation <br />that a projected surplus of $75-9S,OOf} seemed somewhat out of line — the government has <br />ATTACHMENT 15 <br />Taslc Force Meeting Minutes <br />
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