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City Council Minutes July 1, 2024 --------- Page 6 of 8 Councilmember Westgaard noted that the ice rates generate roughly 50% of the total revenue for the facility. We are talking about $800,000 in ice rental revenue and hoping to generate $1.8 million worth of total revenue. He said we could talk about ice rates, and who's going to generate what and asked if we are we barking up the wrong tree? He stated the facility isn't going to float by charging more for ice rates. He feels there are some bigger holes to address and recalled an initial projection presented in 2020 by staff with revenues from turf and meeting room rentals near $700,000, and we are barely clearing $150,000. He'd like to get rid of negotiated contracts and go back to a prime, non-prime, and school rate for every user group, noting this rate structure worked well in the past. He asked for the comparable (comps) rates for Anoka, Rogers, Monticello, and Princeton because local users would go to these facilities if they didn't like the rate we set. Councilmember Westgaard questioned the maximum capacity for ice rental revenue and whether it is achievable. Mr. Stremcha stated there is room to grow because we expended the length of service with the second sheet of ice. The ice rink will remain for a longer period to attract summer tournaments and expand the summer camp opportunities. Councilmember Westgaard stated the facility can't be made to float on ice user groups alone and other areas of the facility need to be reviewed for revenue sources, such as the turf and meeting rooms. He asked if the staffing levels are needed when the other spaces are currently not at capacity, noting the city previously ran a two-sheet ice facility with only two employees. He stated the revenue is needed to support the staff level, and we haven't proven support with the previous three-year revenue projections. He does not want to see the same projections because it hasn't been proven things will be different. Mr. Stremcha stated we are implementing an organizational restructure as approved by council this summer. This reorganization reduces staffing and reallocates resources for a focus on hospitality expertise through event planning and expanded concessions operations for additional revenue opportunities. Councilmember Westgaard stated the ice rate for prime time should be no less than $250, noting youth hockey has had the benefit of a low rate for a long time due to things like the poor condition of the previous facility. Mayor Dietz stated he is okay with the rates in Scenario A of the presentation. There was discussion on who is in the pool of comps, how big, how small, what the pool consists of, and which categories it applies to. Mr. Stremcha suggested the three rates; prime, non-prime, and school hours, but the school hours rate should factor in comparable arenas hosting USPHL teams to maintain a competitive advantage, as the comparison list for prime, non-prime, and school ice rates did not have bulk daytime user groups to complement those less desirable ice times which are more challenging to fill. This would result in a blended school rate averaging the School rate and USPHL rate. Councilmember Westgaard suggested establishing a list of comps (historically a list of 12) different from what is in the presentation, considering locality but also facility amenities. Mr. Stremcha then questioned if the rate is truly based on an average or, like the union negotiation of wages, where you want to be in that top quartile. Councilmember Westgaard stated the facility is premier and not average, which would affect the rate. He suggested reviewing the 12 comps yearly to determine where to set our rates, noting it does not have to be a mathematical average of the 12. Mayor Dietz stated the local comps will bring averages down unless we specifically provide statistical information to support it. Mr. Stremcha sought to clarify the inclusion of the local comps if the statistical information is not of value. Councilmember Westgaard stated the rates would be used to establish our rate, not for setting