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<br />rei ---'\) <br />( )j <br />~l}{ <br /> <br />MEMORANDUM <br /> <br /> <br />TO: <br /> <br />Mayor & City Council <br /> <br />River <br /> <br />DATE: <br /> <br />Pat Klaers, City A~ator <br />September 2, 1999 <br /> <br />FROM: <br /> <br />SUBJECT: 2000 Ice Arena Budget <br /> <br />Attached for your review are the ice arena budget worksheets which include the <br />1998 results, the 1999 budget, the current status, and the 2000 proposal. The 1998 <br />budget needs to be adjusted slightly in order to get a true picture of expenditures <br />and revenues due to the capital expenditure for the dehumidification, and due to <br />the City Council action to transfer in funds in order to payoff the outstanding debt <br />in the ice arena fund. When looking at the adjusted 1998 results, it is apparent <br />that the 1999 budget is not accurate. Accordingly, the 2000 proposal closely mirrors <br />the 1998 final figures. <br /> <br />. <br /> <br />The ice arena budget is projected to have a shortfall between available revenues <br />and planned expenditures in the amount of $64,500. We hope the shortage will be <br />less due to revenues exceeding the projection and expenditures coming in lower <br />than expected. This 2000 estimate is better than the actual 1998 shortage (without <br />capital outlays or transfers) of $78,182. We are going in the right direction, but it is <br />going slowly. Operating revenues exceed operating expenditures, but not by enough <br />to cover the annual bond payments. A revenue problem is that there is only so <br />much ice time to be rented out and, in order to substantially change the ice rental <br />revenue figures, we need to develop summer hockey leagues. <br /> <br />An issue with the ice arena budget relates to the expectations that were set forth <br />with the Marquette Study. The Marquette Study indicated that in 1997, ice rental <br />revenues would be $364,715. The most realistic projection that we have is that ice <br />rental revenues in the year 2000 will only be at $324,650. This is a substantial <br />difference between reality and expectations. The other false expectations had to do <br />with personal services. The Marquette Study indicated that in 1997 personal <br />services would be in the $84,400 range. Adding a 3 percent inflation factor to this <br />amount means that personal services would be about $96,600 in the year 2000. The <br />2000 budget proposal shows personal services at $135,300. Again, this is a <br />substantial difference between expectations and reality. The difference between <br />these two expectations is essentially the shortage we are experiencing in our budget <br />for 2000. <br /> <br />. <br /> <br />Our youth athletic programs receive assistance from the city for the development of <br />facilities and for operating expenses. Annually there are funds in the budget to <br />help with the maintenance of youth baseball, girls youth softball, and youth soccer <br />fields, the softball complex, and ski trails. However, there has been a concern about <br />the city assisting with indoor skating activities. At this time the city must address <br />a $64,500 budget shortage for 2000. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 <br />