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Program: <br />A primary concern in the development of a new community center is replacing and upgrading <br />the existing recreation facilities in the City of Elk River. These include the Ice Arena, Activity <br />Center and Lion’s Park facility. These facilities have become aged and require significant <br />improvements while the City loses some operation efficiency by operating three separate <br />recreation facilities. The program recommendations for the City of Elk River were driven by the <br />information gathered during the market analysis, including the demographic profile of the <br />community, statistical data from the National Sporting Goods Association, stakeholder input, <br />competitive analysis of other recreation and banquet facilities in the area and community input <br />meetings. During the program phase of the study, different options were explored before <br />developing a phasing plan. The first phase of the project reflects the most pressing needs in the <br />community. Based on the market analysis, program assessment and budgetary considerations the <br />following program summary was generated. Refer to the program section of the primary <br />document for the full program breakdown. <br /> <br />Operations: <br />An operation analysis was conducted to examine facility costs and revenues for a new recreation <br />facility that was developed during the programming phase of the study. The operating pro-forma <br />developed represents a conservative approach to estimating expenses and revenues and was <br />completed based on the best information available and a basic understanding of the project. Fees <br />and charges utilized for this study were generated from the existing rate structure and assessment <br />of market value in the Elk River area. <br />The results of the operations analysis indicate that the proposed facility will not recover 100% of <br />its operating costs through revenue but represents an upgrade over the current operating model <br />through improved efficiency of combining three operations into one and increased revenue <br />opportunities. The operating efficiency increase by adding a third sheet of ice in phase two and a <br />sports dome in phase three resulting is a cost recovery rate of 86% and 91% respectively. The <br />operating pro-forma does not include debt service since the funding for this project is yet to be <br />determined. Most community centers in urban areas around the country recover 75% to 95% of <br />their operating expenses through fees and charges. <br /> <br /> <br /> <br /> <br /> <br /> <br />APPENDIX A