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City Council Minutes <br />May 4, 2020 <br />Page 10 <br />Mayor Dietz questioned if we would break even if we planned for 25% revenue. He <br />added 20% seems conservative. Councilmember Wagner agreed 20% seems <br />conservative and questioned if staff researched other facilities. Mr. Benoit explained <br />he did research and most he spoke to were comfortable in the 20-30% range for the <br />first year. Councilmember Wagner added she would have appreciated receiving this <br />information prior to the meeting for review. <br />Mayor Dietz questioned if the ice rates are set to $220/hour how much additional <br />revenue would be generated. Councilmember Westgaard indicated the arena averages <br />about 1,700 annual billable hours so about $25,000. <br />Councilmember Westgaard believes a sinking fund to cover capital improvements <br />should be included from the start, possibly through increased fees or through <br />reduced staffing costs. He explained the Arena Commission discussed long-term <br />future projections for capital improvements for the old arena that could probably be <br />used as a guide for future long-term capital improvement projections. He added <br />breaking even without having a Capital Improvement Fund would be a disservice to <br />future Councils. <br />Councilmember Ovall agreed adding it is important to find out the capital <br />expenditure depreciation life cycle for various assets to plan accordingly. He <br />indicated the only other thing he sees missing is the naming rights/advertising <br />revenue. <br />Mayor Dietz explained if the naming rights company comes even close to the <br />numbers, they are projecting the Council will be pleasantly surprised at the revenue <br />generated. He added that revenue could potentially be used for a sinking fund. <br />Councilmember Wagner concurred. <br />Mr. Portner explained staff estimated revenues conservatively and paired with the <br />expense estimates necessary to make the building functional. He indicated the <br />advantage to a new building is most everything is under warranty, so he's not <br />concerned with capital improvement expenses the first year and is more concerned <br />with operations and establishing baselines for rates, fees, and staffing. He further <br />explained additional staffing hours are included to cover the additional hours the <br />Multipurpose Facility is open compared to the old facilities. He noted staff has been <br />informed none of the staffing is set in stone. <br />Councilmember Westgaard indicated he would like to start out slow and small with <br />staffing in the new facility and add later once we know what rental and marketing <br />revenue will be. He explained it's easier to add staff later than have a fixed number of <br />staff and try to figure out how to make it work if the revenues fall short of <br />projections. He added this is a lot of information to digest and he would like to see <br />additional details before giving the green light to advertise. He added establishing the <br />advisory commission for the facility is his priority and he would like the commission <br />to put this information together and make a recommendation to the Council. <br />P 0 1 E R E A 1 1 <br />NATURE <br />