HomeMy WebLinkAbout1999-11-09 Park Board PacketCity of Edina
EDINA PARK BOARD
TUESDAY, NOVEMBER 9, 1999
7:30 P.M.
CITY COUNCIL CHAMBERS
AGENDA
* 1. Approval of Tuesday, October 12, 1999, Park Board Minutes.
0 *2. Edina Hockey Association Advertising Proposal.
3. Braemar & Fred Richards Golf Courses Presentation - John Valliere.
4. Community Education Services Report - Linda Presthus..
5. Community Center Study Update - Chuck Mooty.
6. Other.
* 7. Adj ournment.
* These are agenda items that require or request Park Board action.
City Hal (612) 927-8861
4801 WEST 50TH STREET FAX (612) 826-0390
EDINA, MINNESOTA 55424-1394 TDD (612) 826-0379
Memo
To: Edina Park Board.
U
From: John Keprios, Direct
Edina Park and Recreali n Department
Date: November 1, 1999
Re: NOVEMBER 9, 1999, PARK BOARD MEETING STAFF REPORT.
Enclosed you should find the following items:
1. Tuesday, November 9, 1999, Park Board Agenda.
2. Tuesday, October 12, 1999, Park Board Minutes.
3. Edina Hockey Association Advertising Proposal.
STAFF REPORT
The following is the monthly staff report concerning each item on the agenda with the exception of
Approval of the Minutes and Other. "Other" is listed on the agenda in case last minute items come up
between now and the Park Board meeting, plus, cover any other concerns of Park Board members
• and/or attendees.
EDINA HOCKEY ASSOCIATION ADVERTISING PROPOSAL
The Edina Hockey Association (EHA) is proposing a joint fund-raising effort with the City of Edina
that involves commercial advertising displays at Braemar Arena. The advertising would be displayed
on the hockey rink dasher boards.
The EHA is proposing to:
• Secure written advertising contracts with vendors.
• Agree to prior approval by Park Board and City Council for all proposed advertising.
• Generate all of the advertisement stick -on sheets.
• Replace the advertisements when in need of replacement.
• Provide the City a copy of all financial records of the project.
• Give the City of Edina 25% of all profits.
The EHA has included a detailed proposal (copy enclosed) which includes the anticipated revenues and
expenses.
I understand that the proposal begs the question, "why doesn't the city take and do this on our own and
keep 100% of the profits?" This request should be viewed as:
An opportunity to support the EHA, which continues to face escalating costs.
An opportunity to raise revenues for Braemar Arena at no risk with no added expenses or
maintenance to the Arena's operations.
In a sense, the concessions stand operations is a good analogy to this proposal. The Braemar Arena
concessions stand is run by the Edina Hockey Parents (formerly the Edina Hockey Moms). Braemar
Arena receives a percentage of the profits, the EHA receives financial support, and the Edina Hockey
Parents continually provide capital funding to upgrade the Braemar Arena facility. Again, the use of
volunteers results in more dollars available for the program and facility.
If the City were to secure the advertising and take all profits, we would likely hire a firm to secure
advertisers which would ultimately result in less net profits. That would no doubt result in more
dollars to the City but less overall profits that could otherwise benefit the EHA.
I believe that the questions that the Park Board should address are:
1. Is dasher board advertising at Braemar Arena aesthetically acceptable?
2. Should the City pursue dasher board advertising at Braemar Arena on its own for just the City's
benefit?
3. Is this proposal setting a precedence for future advertising throughout the park system? In other
words, how will we respond to a field sport association's request to do something similar on the
City of Edina's athletic fields?
4. If the EHA's proposal is acceptable, should a similar opportunity be extended to the Braemar City
of Lakes Figure Skating Club?
The EHA's proposal leaves the door open to the Braemar City of Lakes Figure Skating Club to pursue
similar fund-raising through advertising on the East Arena dasher -boards.
From staff's perspective, we view the EHA's proposal as a reasonable request. There are other
communities with similar arrangements that benefit both the youth athletic programs and the
municipality.
Being that this proposal came to me on short notice, I have not had the opportunity to discuss this with
the Braemar City of Lakes Figure Skating Club. I hope to have more information before the Park
Board meeting.
As most of you already know, I am personally not a fan of commercial advertising placed throughout
Edina's beautiful park system. However, I believe that a precedence was set when the Park Board and
City Council approved the Edina Baseball Association's scoreboard advertising proposal. I believe
that the precedence is that certain forms of commercial advertising in Edina's public parks are an
acceptable means of fund -raising and each request must be approved on a case by case basis.
With that in mind, I recommend that the Park Board approve EHA's proposal contingent upon the
Braemar City of Lakes Figure Skating Club being informed and receiving an opportunity to respond to
the proposal. Please know that I hope to have that accomplished before the Park Board meeting.
Park Board action is requested on this agenda item.
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BRAEMAR & FRED RICHARDS GOLF COURSES PRESENTATION
As requested by the Park Board, John Valliere, Manager of Braemar Golf Course, will give a brief
presentation to inform Park Board members about Braemar and Fred Richard's Golf Courses:
• History.
• Mission.
• Philosophy.
• Operations.
Being that the finances were covered in depth at the October meeting, this brief presentation will try to
focus more on the background and philosophy of the golf course operations.
COMMUNITY CENTER STUDY UPDATE - CHUCK MOOTY
I ask that Mr. Chuck Mooty again give the Park Board an update on the progress of the Community
Center Study project. Thanks Chuck!
COMMUNITY EDUCATION SERVICES REPORT - LINDA PRESTHUS
I ask that Linda Presthus give the Park Board a brief report on the last Community Education Services
Board meeting. Thanks Linda!
• OTHER
This is an opportunity for Park Board members and residents to address other concerns.
• EDINA PARK BOARD
7:30 P.M.
CITY COUNCIL CHAMBERS
OCTOBER 12, 1999
MEMBERS PRESENT: Chuck Mooty, Andy Herring, Linda Presthus, George Klus, Karla
Sitek, John Murrin, Dave Fredlund, Andy Finsness, Bill Jenkins,
Tom White
MEMBERS ABSENT: Floyd Grabiel
STAFF PRESENT: John Keprios, Ed MacHolda, Janet Canton, Tom Shirley, Larry
Thayer, John Valliere, Ann Kattreh, Phil Johnson
OTHERS PRESENT: Gene Persha
I. APPROVAL OF THE SEPTEMBER 14, 1999 PARK BOARD MINUTES
George Klus MOVED TO APPROVE THE SEPTEMBER 14, 1999 PARK BOARD
MINUTES. Dave Fredlund SECONDED THE MOTION. MINUTES APPROVED.
II. FINANCIAL OVERVIEW - JOHN WALLIN, FINANCE DIRECTOR
Mr. Keprios introduced John Wallin, Finance Director, who was asked to explain to the
Park Board the financial overview of the City of Edina. Mr. Wallin indicated that he
would like to start with a history of the enterprise operations including why we account
for the enterprises the way we do. He explained that the enterprise facilities were
originally set up as a business where each one has its own fund. The following are the
enterprise facilities; Edina Art Center, Edinborough Park/Centennial Lakes, Edina
Aquatic Center, Braemar Arena, and the golf courses. Mr. Wallin pointed out that the
golf courses are accounted for in the audit as one fund, which includes the golf dome.
However, the golf dome is separate from the golf course as funding projects. Mr. Wallin
explained that, since the enterprise facilities are set up as a business, we account for the
assets as depreciable assets and we use the accrual basis of accounting. He noted that
some of the facilities make money, some are able to pay their own way and some need
help in order to operate. At this time the only park enterprise facility that makes money
is the golf dome. The reason is because the golf dome was purchased in 1988 with
revenue bonds which afforded us revenue to pay the capital indebtedness for the arenas
revenue bonds. The cash flows at that time with the work being done at the arena showed
that the arena was not going to be able to pay for its debt. Therefore, the dome was
looked at as a moneymaker to pay that debt and has been working very well since it was
purchased. Mr. Wallin stated that most of the other facilities are breaking even. He
explained that when they look at balancing a budget they look at a five year plan based on
paying for its operation. He indicated that paying for its operations include doing
upgrades and construction projects that are on a long-term basis. Mr. Wallin pointed out
that no one has ever looked at the golf course as pooling a bunch of cash within or using
the facility to fund other operations like we do with the golf dome and the liquor stores.
He stated the golf dome and liquor stores are in a business to make money and it's the
profit from the golf dome and liquor stores that go into various other facilities as well as
the general fund. Mr. Wallin commented that the city councils of the past have never
focused on any of these enterprise facilities to make money with the exception of the golf
dome. They have always looked at the fees and charges as a way to pay for the
operations.
Mr. Wallin pointed out that as you look at other cities most art centers are not set up as an
enterprise fund. He noted that the Edina Art Center is an enterprise fund and that the city
councils of the past have chosen to subsidize it for its annual operation as well as its
capital. He indicated that the same thing is true for the arena, however that is subsidized
more with its capital than with its operation.
Mr. Wallin stated that some of the capital purchases have run deficits in which a few still
exist on the books right now. He explained that the golf course still has deficits based on
a few reasons. First, in 1992 the new nine hole course was built (holes 19-27). Secondly,
before the Fred Richards Golf Course was purchased we knew that we could not operate
at a positive cash flow or come anywhere close to breaking even for a number of years.
The city council was aware of this but decided that it was more important to own and
renovate that course and that is one of the reasons why you still see a cash deficit at the
Fred Richards Golf Course. Mr. Jenkins asked that aside from the debt service, does the
Fred Richards Course still have an operating deficit. Mr. Wallin replied no, it's paying
its operation but it is not quite covering its debt. Mr. Herring asked which debt that is.
Mr. Wallin responded that it's the debt service from the 2.5 million dollar bond issue it
took to buy the land and renovate the course. The project ran over approximately
$400,000. Mr. Jenkins asked where did the funds come from for the $400,000. Mr.
Wallin indicated that they did a cash pool investment where there are a number of funds
other than the enterprise funds. If there is a deficit in one fund there has to be a surplus in
another in order to have a zero balance. Mr. Wallin pointed out that with the five-year
plan that the investment advisory committee has been working on, hopefully all of the
cash deficits should be at a break even point within the next couple of years.
Mr. Wallin explained that the enterprise facilities are expected to fund their own capital
plans. In the case of Edinborough and Centennial Lakes Park, their capital plan is
essentially a trust fund which is a result of the tax increment district. The interest from
the trust fund, however, is used to pay for park operational expenses.
Mr. Wallin indicated that they are also working towards a new capital plan for the general
park fund as well as the facilities. Mr. Jenkins asked how many years has it been since
• there was a capital plan for the general park fund. Mr. Wallin replied that basically the
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• capital plan ceased during the beginning of the park bond referendum, which was 1996.
He noted it is scheduled to begin funding again in the year 2000. Unfortunately, some
more crunching of numbers needs to be done because there are more projects than funds.
Mr. Wallin pointed out that years ago there used to be a component of the general fund
which was used to finance the capital plan and that amount was approximately $180,000.
However, by the early 90's it dropped to approximately $117,000 and then down to
$60,000. He stated that about the time towards the end of that last recession it was zeroed
out because the city council saw more pressing needs with the idea that they would
eventually get back into funding a capital plan.
Mr. Murrin asked why so much of the bond referendum money had to be spent within a
certain period of time and why was the Aquatic Center spending considered to be a loan.
Mr. Keprios explained that all of the money had to be spent within a 24 -month period in
order to be able to spend the interest earned on the principle. Otherwise, the earned
interest would have been forfeited to the IRS. He noted that they spent beyond that
amount and, therefore, borrowed money from the Developer's Fund. The money was
used to purchase and install the water play feature in the zero depth pool with the
understanding that when the aquatic center could afford to it would pay back the loan to
the Developer's Fund. This money would then be used to build and finish the comfort
station at Wooddale Park.
Mr. Mooty noted that Mr. Wallin has indicated that the plan is going forward and shows
that the cash deficits are now more in line. He asked what is causing these projections to
be more in line. Mr. Wallin replied it is a combination of things. He explained that when
he first came on board 15 years ago the arena had about a $750,000 cash deficit which
has continued and for years has been unable to pay down that deficit. However, in 1998
they were able to make the first installment and the investment advisory committee is
looking at making three more installments. Therefore, the arena will ultimately be
breaking even as far as a cash basis is concerned. Mr. Wallin explained that it's a
combination of looking at operations, reducing costs and looking at subsidies. Mr.
Wallin pointed out that the way the committee wants the Art Center to go is it's going to
require a subsidy to move forward. Mr. Murrin asked how much to which Mr. Wallin
responded in the past it has been anywhere between $30,000 and $60,000 a year.
Mr. Herring asked how did the arena do last year. Mr. Wallin noted that it had a deficit
before depreciation of $158,000. Mr. Wallin further explained that depreciation is not a
funded account.
Mr. Klus noted that the pool had an operating profits of only $69,000 so there appears to
be no way that the aquatic center will be able to pay back the rest of the loan to the
Developers Fund this year. Mr. Klus asked if the Aquatic Center would be able to pay
the loan back in two years. Mr. Wallin stated that the aquatic center has been operating at
a profit the past several years and has been able to pay off its cash deficit including debt
service before depreciation. Again, depreciation is not a funded account.
Mr. Herring asked about Edinborough Park and Centennial Lakes. Mr. Wallin explained
that Edinborough Park and Centennial Lakes has a trust that was set up originally by the
developers. It's another Developer's Fund that is held separately and is used only for the
southeast Edina district. He indicated that this park fund had a loss of approximately
$200,000 in cash, which was funded through a transfer from this specific Developer's
Fund, which we refer to as the Edinborough/Centennial Lakes trust fund.
Mr. Murrin indicated that he thinks Edinborough Park and Centennial Lakes are both
wonderful environments and can't understand why they are not profitable. Mr. White
asked if this Developer's Fund can only be used to fund losses for Edinborough Park and
Centennial Lakes. Mr. Wallin noted no, that it is held within the general fund and is
designated by the city council.
Mr. Herring indicated that it was noted that the golf course had an operating deficit of
$239,000 and asked if that was after depreciation. Mr. Wallin stated that's on a cash
basis. Mr. Wallin stated that the golf course last year made $406,000 before debt service
and depreciation. With $510,000 in depreciation and $300,000 in debt service payment,
that equates to a loss of about $400,000.
Mr. Herring asked if the golf course cash flow is positive $600,000 and the pool's cash
flow is positive $200,000, then shouldn't those enterprises be able to cover the operating
deficit. Mr. Wallin stated yes. Mr. Herring asked why then can't we have a capital fund.
SMr. Wallin replied that the city council made that decision a few years ago.
Mr. Wallin noted that the capital plan for next year would include over $300,000 worth of
general fund park improvements and $200,000 worth of the facility improvements at the
art center and the arena, that have a difficult time financing their own capital
improvements. Mr. Wallin also explained that doesn't include everything city-wide that
is on the same plan. Therefore, that is part of the balancing act that they are trying to get
into at this point.
Mr. Klus indicated that from what he understands it seems that most of our capital
improvements have always been through bond issues. We wait until everything wears
out then do a bond issue to replace everything. Hopefully this will not happen anymore
and we will have some capital money so that we can actually maintain things as we need
to. Mr. Wallin commented that Mr. Keprios did a study back in the early 1990's showing
that a minimum of $200,000 was needed in order to keep up. However, the most the
capital plan ever had available was $120,000 to $130,000 to fund general park projects.
Mr. Herring asked Mr. Wallin to talk about the Developer's Fund. Mr. Wallin explained
that basically as a developer comes into the city they buy into the park system. Eight
percent of the value goes into the Developer's Fund. However, sometimes the developer
can give us part of the land in lieu of cash. Mr. Wallin indicated that over the years the
Developer's Fund has increased and decreased as projects have come along. Mr.
Keprios pointed out to the Park Board that they are not the only ones who compete for
funding from the Developer's Fund. The Art Center Board, which is not subordinate to
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the Park Board, can also ask the city council for money from the Developer's Fund. Mr.
Mooty asked what is the balance right now in the Developer's Fund in which Mr. Wallin
replied that right now it is at $257,000.
Mr. Mooty asked if anyone else has borrowed money from the Developer's Fund other
than the aquatic center. Mr. Wallin indicated that the aquatic center still owes the
Developer's Fund $83,000 and after that there are no other outstanding loans.
Mr. Keprios commented that he just sent an invoice to Paragon Cable for $213,000 for
payment for the building at Garden Park. Mr. Wallin explained that at this point he will
not know until the end of the year exactly how the fund will balance. He indicated that
one of the things he has to do is close out the park referendum fund. He has to be able to
zero that out which includes all of the interest and all of the funds received from Paragon
Cable or anything else. He has to be able to match revenues with expenditures. Mr. Klus
asked if it's possible that the Developer's Fund could go down from what we projected to
it being zeroed out, in which it was noted yes.
Mr. Jenkins asked how much is in the Developer's Fund at Centennial Lakes and
Edinborough Park. Mr. Wallin replied it is just short of 5 million. Mr. Mooty indicated
that at a previous meeting it was discussed that there is some concern as far as the
longevity of that fund being able to support Edinborough/Centennial Lakes Park on an
ongoing basis. At some point that may be a diminishing amount and thus a concern. Mr.
Wallin responded that has been a concern of his for quite some time.
III. EDINBOROUGH PARK PRIVATE RENTALS - GENE PERSHA
Gene Persha, Edina resident, explained that his daughter and several other kids went to
Edinborough Park to take some pictures in the grotto area for homecoming. He indicated
that they were turned away because there was a wedding going on and therefore were
asked to leave. He explained there was some miscommunication because one of the
parents had made arrangements informing the staff at Edinborough that approximately 30
high schools students and parents would be there to take these pictures.
Mr. Persha indicated that he is a little prejudiced towards Edinborough because he pays
taxes for the place but he feels he doesn't get his money out of it. He noted that maybe
it's a facility that is underused by Edina residents, however, he feels he has a preeminent
right to use the facility for a short period of time to take pictures. Mr. Persha stated that
Mr. Keprios explained this situation very adequately to him that it was rented out. He
noted that he understands that money needs to be generated to pay for the facility.
However, he suggested that maybe the high school, students and parents could have
preeminent rights, if you will, to use the grotto area to take pictures for prom and
homecoming for a short period of time. He noted that he is sure that his parent colleagues
would support him on this. Mr. Persha stated that he also would like to see Edinborough
Park used a little bit more for community functions.
Mr. Keprios indicated that as Mr. Wallin's report states Edinborough Park is
approximately $200,000 in the hole every year and it's going to get worse before it gets
any better with the continued dwindling of the Developer's Fund (trust fund). Mr.
Herring asked if staff could look into whether or not reasonable accommodations could
be made to have the park stay open a little later on these few special evenings for people
to take photographs in the grotto area. Mr. Keprios replied they would be happy to look
into that, however, the question is do we forego any fees that could otherwise have been
collected. Mr. Herring noted that it would have to be a reasonable accommodation where
the grotto area could be left open an extra hour even though the park has a private rental.
Mr. Shirley pointed out that usually they do accommodate special events such as prom
and homecoming. However, this time there was a conflict because the wedding guests
were arriving at the same time. Mr. Finsness asked if there are numerous requests on
homecoming night for pictures to be taken there. Mr. Shirley replied that it's not so
much requests but more that people are just showing up.
Mr. Klus suggested that whoever is working on the committees for prom or homecoming
he would hope they would call the manager of the park to see if they could be
accommodated for a certain period of time for picture taking. Mr. Persha commented that
he thinks that would be very fair.
Mr. Persha further commented that Edina has an outstanding park system.
IV. FEES AND CHARGES
Mr. Wallin explained that the philosophy on the fees and charges is that some are used to
make money and some are used to break even. He pointed out that the philosophy for the
fees within the general fund has a totally different philosophy and that is based on the
state statutes. The state statutes say we cannot make money on a service, we can only
charge a fee that will pay for the operation and what it costs us to provide the service.
Mr. Wallin indicated that two places where they want to make a profit are the liquor
stores and the golf dome in order for us to be able to take money out of one fund and put
it into another where the money is needed.
Mr. Keprios noted that he would like to mention a few things that were not mentioned in
his staff report. He indicated that coach pitch is going to be removed from the fees and
charges list because the Edina Baseball Association is going to take over that program
and they are very excited about it. Therefore, he would like for that to be part of the
motion for the fees and charges.
Mr. Keprios indicated that he has heard back from a spokesperson for the bandy players
and was told that they will be back this year, however, they feel we are gauging them
with the fee we are charging.
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Mr. Keprios pointed out there are some new items listed under general park areas;
resident use per hour and resident use per day. He commented that he has had several
requests over the last few years where people have wanted to rent the general park and he
never had a designated category for this request. Therefore, he is proposing that it be the
same fee that is charged for an athletic field rental because that is basically the same size
area the residents are requesting. Mr. Keprios pointed out that he has also had a lot of
requests to privatize their use of the hard surface pathways for either a fun run, fundraiser
or a family function. He noted that there usually are some costs involved with setting up
traffic cones and other special requests. Therefore, he is proposing a fee be established
for these requests.
Mr. Keprios indicated that the Athletic Association User Participation Fee is going from
$6.00 to $7.00, which will generate approximately an additional $9,800.00, which
includes both field use and outdoor hockey rink use.
Mr. Keprios noted that he felt the new comfort stations would get a lot more use than
they have had if they lowered the fee. He indicated that he had almost as many people
turn away as he had rentals. He stated he would like the four facilities to be charged the
same fee and believes that we will still be able to cover expenses.
Mr. Klus asked Mr. Shirley, Manager of Edinborough Park and Centennial Lakes, if there
is not a family pass being offered because it looks like there is only an individual pass
• where names can be added up to a maximum number. Mr. Shirley replied that is correct,
there used to be so many different categories and it was so confusing that this system
should work a lot better. Ms. Presthus asked if Edinborough charges a different rental fee
for residents and non-residents. Mr. Shirley replied there is no price difference because
what was happening is people were finding Edina residents to rent the facility for them.
Larry Thayer, Manager of Braemar Ice Arena, indicated that most of his fees went up
$5.00 which will generate approximately $30,000 and added that the fees are still
competitive with the surrounding communities. Mr. Keprios commented that Mr.
Thayer's profit and loss statement shows that the arena is $46,000 ahead of where they
were last year at this time. Mr. Thayer stated that the arenas are open from 6:00 a.m. to
11:00 p.m. 7 days a week with the exception of a couple of weeks in the summer when
they are shut down for maintenance.
John Valliere, Golf Course Manager, passed around a handout comparing Edina's golf
course fees with surrounding communities that have the same municipally or county run
courses. He pointed out that Braemar was built in 1963 so we have retired a lot of our
debt, however, new golf courses today still have a lot of their debt and that is why they do
charge a little bit more than Braemar. Mr. Valliere stated that Braemar Golf Course is a
very good product for a very good price.
Mr. Valliere indicated that the second page of the handout shows the fees and charges for
the last three years and they tend to be in the 4.5 to 5 percent range annually. He noted
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that fees are cost driven and that they could certainly generate more money but their
philosophy is to charge a fair price.
Mr. Mooty indicated that it seems to him that the numbers at the Fred Richards Golf
Course have dropped and asked if that is a correct statement. Mr. Valliere replied that
most golf courses around the metropolitan area are down 7% to 8% from last year
because we had such a wonderful spring, summer and fall in 1998. However, he does
feel that we do need to go out and promote the Fred Richards Golf Course a lot more.
Mr. Valliere noted that they have a lot of customer loyalty. In the late 1970's there were
800 patron cards sold and when it grew to 1,800 they realized they didn't have enough
golf course. He indicated that the patron card holders are residents of the community and
were saying they have a patron card but cannot get on the golf course. That was when the
new nine hole course was built. Mr. Valliere stated that a lot of people don't realize that
the Fred Richards Course even exists, therefore, it does need to be marketed more. It was
asked does the Fred Richards Course compete with Braemar and it was noted that they
are in competition with each other. Also, one of the contributing problems with the Fred
Richards Course is that there are a lot of goose droppings on the course and it has really
become a bad situation. Right now and in the spring the course is covered almost 100%.
Mr. White asked Mr. Valliere how many patron cards he sold to which he replied 2,700
and that is an increase over last year. Mr. White asked Mr. Valliere if the patron card
price was raised $5.00 does he think it would have any effect on the sales of the patron
cards. Mr. Valliere noted that it depends on the number of rounds each golfer plays a
year. If you just charge the patron -card holder maybe a little more for a round of golf, as
opposed to raising the patron card, you could potentially take in more revenue based on
the number of rounds of golf played. Mr. Valliere suggested that raising the patron -card
fee would have a negative effect on the senior population, which is a large portion of our
business. Mr. Mooty noted that it might be a bigger issue for those who play fewer
rounds of golf. Mr. White noted that he feels that for those who play 10 or 11 rounds a
year, it would not make a big difference if we raised the patron -card $5.00 bucks.
Phil Johnson, Manager of the Peggy Kelly Media Art Studios, indicated that he is here on
behalf of Diana Hedges, Director of the Edina Art Center. Mr. Johnson pointed out that
this is the first time the Art Center has raised their fees since 1995 and that the fee
increases are nominal. Also, these are the first fee increases for the Media Arts Studio
since it began in 1996. Mr. Keprios commented that he has also shown these fees and
charges to the Edina Art Center Board. The Art Center Board noted that they are not a
subordinate group to the Park Board but indicated that they do support staff's
recommended fees and charges.
Mr. MacHolda indicated that he is proposing to raise the aquatic center fees quite a bit.
He stated that his daily admission fee hasn't had an increase since 1997. He noted that
the season tickets haven't gone up for two seasons with the reason being that we have
been able to meet our expenses plus provide ourselves with a little capital. Mr.
MacHolda explained that for years we typically sell around 1,400 season tickets and this
season over 3,000 season tickets were sold. Mr. MacHolda pointed out that the non-
resident base has really increased.
Mr. MacHolda informed the Park Board the aquatic center's fees have not been
comparable with other aquatic center facilities of similar design. He indicated that Eagan
just built a new aquatic center and they charged $162.00 for a season pass for a family of
four, in Edina the same season pass was $80.00. He stated that St. Louis Park has been
open for a couple of seasons now and they charged $128.00 for a resident family of four
and $176.00 for a non-resident family of four. Mr. MacHolda noted that the primary
motive for the proposed 2000 fees is to put us in the same line as comparable aquatic
facilities. He also explained that expenses are going up and commented that there is a
lifeguard shortage and those wages will be going up in order to fill the positions.
Mr. White asked what does the aquatic facility at Eagan have. Mr. MacHolda replied that
they built a very nice 7.1 million dollar aquatic center that has a lazy river and two water
slides. He noted that St. Louis Park has 2 water slides. Mr. MacHolda indicated that
what Edina has over everyone else is the large play structure in the zero depth pool. He
feels we are the best ticket around for children aged 14 months to 8 years.
Mr. Jenkins stated that he knows Mr. MacHolda was concerned when St. Louis Park built
their pool and asked how has that impacted Edina's numbers. Mr. MacHolda replied that
the season tickets have continued to increase despite St. Louis Park's aquatic center. He
stated, however, that Edina will start to have additional competition in the near future
because Bloomington and Richfield are both supposed to be getting new aquatic centers.
Mr. White indicated that Mr. Herring asked him to bring up the fact that he is concerned
with having pathway closures at Bredesen Park and Rosland Park. Mr. White noted that
he personally thinks if you close Bredesen Park for an hour or two and tell people they
can't use it, we will be hearing from a lot of unhappy residents. Mr. Jenkins asked how
can we close down a park for a day or even an hour. Mr. Keprios replied that in the past
he has mandated that groups who are renting the area need to post signs at least two
weeks in advance of the event indicating that the park will be closed to the public for a
specific day and time. Mr. Keprios indicated that to date he has only had one request for
Bredesen, which he did not allow. He noted that he has had several for Rosland Park and
they have worked quite well. Mr. White stated that he feels with Bredesen Park it would
have to be non-exclusive use. Mr. Keprios replied they could try that and see how it
works. Mr. Mooty asked what is the benefit of this because it would not be a big money
maker. Mr. Keprios replied it would be to accommodate resident requests. Mr. White
indicated he thinks there could still be a fun run there, it just doesn't need to be exclusive.
Mr. Mooty indicated that he doesn't necessarily see the fee as being reflective of the
potential inconvenience. Mr. Jenkins commented that he thinks it's deeper than the fee
itself. Mr. Mooty noted that he doesn't disagree with that because he believes that the fee
is not commensurate with the inconvenience to the public. Mr. Murrin indicated that he
thinks this would be a good outlet for the community to be able to do something like this.
0
Mr. White again noted that he doesn't think this is something that should be exclusive.
Mr. Murrin suggested that signs could be posted indicating please be patient and space
may be limited while such and such an event is going on. Ms. Presthus asked will we
still be charging them and it was noted yes. Ms. Sitek indicated that she doesn't feel they
should be charged. Mr. Klus commented that he would like to see the community open
up their parks to certain types of races, however he does not want it to be exclusive. He
noted that there should be a fee for these runs because their participants are usually
charged a fee. Mr. Klus also added that these events only take a few hours, it's not a
whole day event.
Mr. Mooty suggested having a maximum amount of time, such as two to three hours, for
these types of events. Mr. Jenkins suggested having a fee and just calling it a use fee.
Mr. Keprios commented that he would be happy to handle this administratively and let
the residents know that it will not be exclusive and there will not be a charge. However,
they will have to reimburse the city for any expenses incurred such as providing barriers
and additional staff for clean-up. Mr. Keprios noted that he will take the fee off
completely for Bredesen Park. However, he noted that Rosland Park is becoming more
and more popular. Mr. Mooty noted that he sees Rosland Park a little bit different than
Bredesen Park. Ms. Presthus asked if there is already an established fee for that to which
Mr. Keprios replied there hasn't been one in the past but he is recommending one.
Mr. Finsness indicated that it seems to him that the fees at the aquatic center on a
percentage basis are quite a bit higher than most of the other facilities and asked why is
that. Mr. MacHolda replied they want to put Edina in the same market as comparable
facilities. Mr. MacHolda noted that if you look at enterprise facilities as a business, we
should be charging what the market will bear. However, swimming lessons are
considered to be a break-even program and therefore would be more in line with what
Mr. Finsness is saying. Mr. White indicated that it seems like everyone else is charging
$130.00 and we are only charging $80.00 for a resident family of four. Mr. Klus
commented that he doesn't think the Edina Aquatic Center is worth $130.00 because we
are only getting the younger kids and not the older ones. Mr. Finsness indicated that the
golf course was only raised $1.00. Mr. White noted that he would like to see the patron
card go a little higher. Mr. MacHolda stated that Edina charges 50% less than what
Eagan charges and noted that the golf course does not charge 50% less than area golf
courses. Mr. MacHolda pointed out that he is not going as high as Eagan but he would
like to charge what the current market is willing to bear and that is the reason for the big
increase.
Mr. Klus indicated that he pays $170.00 for a non-resident 12 month pass to Eden
Prairie's community center which includes their pool. Mr. MacHolda stated that he is
trying to compare himself with other outdoor facilities. He also noted that Edina's season
is from Memorial Day weekend through Labor Day and no other outdoor facility is open
that long.
Mr. Keprios asked Mr. Wallin how he views the fees for the aquatic center that have been
recommended by staff. Mr. Wallin responded that he thinks it has to come in lieu of what
10
• his committee will be doing with the five-year plan. As we look forward to the next five
years, the operation of the pool will need to cover the costs of projected expenditures that
the pool will need to remain attractive and competitive. He indicated that Mr. MacHolda
has informed him that we will be needing a new water slide in the next two years and that
is not going to be a cheap undertaking. If we want the facility to keep up, we need to start
building up now so we do not drop into the hole in order to buy a new slide or make other
needed renovations. Mr. Klus indicated those are capital expenditures and not operating
expenses. Mr. Mooty indicated we get to a point where we have a capital intensive
element and we know we need to cover costs as we go down the line. However, his
question is what's the assurance that we get to keep it from the standpoint of being able to
utilize that capital so that we do keep it a competitive and high demand piece of property.
Mr. Wallin noted that has been the philosophy of Mr. MacHolda's as well as himself
when they talk about the aquatic center. He noted when major renovations were done in
1992 and the water slide was put up, the facility was very much in the red and had a long
standing cash deficit. He explained that while the pool was working its way out of the
cash deficit part of the profits after that point went to pay off that cash deficit and the
other part went back into the facility. Mr. Wallin noted that he believes it is very
important that we keep ahead of the improvements so we don't find ourselves with an old
facility where everything needs to be replaced before it becomes hazardous or an eyesore.
Mr. Wallin pointed out that the only thing the investment advisory committee is focused
on is the five-year plan. However, if part of the plan is to do something further down the
line, then that should be looked at as well.
Mr. Keprios commented that in defense of what Mr. Finsness was saying earlier, we try
to carry the same philosophy through the whole fees and charges structure. However, it
can't be the same for every program and facility. Again, some have a tremendous
subsidy, some make a lot of money and others tend to break even. He pointed out that if
we were to charge the actual cost of the playground program, the user would pay
approximately $75.00 per kid. Also, if were to charge the art center users what it actually
costs to run the facility, then we would likely have to shut the doors. Therefore, we have
to find what is the best way to maximize the service and still make it accessible to the
general public.
Mr. White commented that it seems like the pool is making a lot of money and yet we are
still raising the fees a lot and there are other facilities that are not making very much
money and we are not raising those fees very much. Mr. Klus commented that on the
same side we are letting the golf course fund some of the capital improvements and we
are not using those profits to fund general park improvements, which he suspects is a
controversial issue.
Mr. Wallin indicated there is another way to look at this, the golf course has put millions
of dollars into the facility and has added a third nine hole as well as a lot of expanding
over the years. He noted they used a bond issue to do a lot of this. One philosophy is to
use a pay as you go approach, which means that the current user pays for the cost of the
current capital but not pay for the cost to replace it for future users. Mr. Wallin noted that
his recommendation would be that the profits should basically go back into the facility.
11
However, he wouldn't want to see the aquatic center turn into a profit center and
accumulate cash. We would just put money away to eventually go back into the pool at a
future date.
Mr. Mooty indicated that it is his understanding there is no assurance the money
generated from the pool will go back into the pool. Mr. Wallin replied that is correct, it is
up to the city council what is done with it. Mr. Mooty asked Mr. MacHolda based upon
the incremental fee structure, what does he think it's going to contribute? Mr. MacHolda
replied he doesn't know. He indicated that he is surprised that the numbers have gone up
with the competition that is out there. Mr. Mooty indicated that part of the rationale for
him to look at this increase at the pool is because we know we have some things on the
horizon which need to be done. Therefore he would like for the Park Board to suggest to
the city council that this is the rationale behind the proposed increase and to reserve some
of those incremental dollars for these future improvements. Mr. Finsness noted that it
would be a lot easier to tell the pool patrons that.
Mr. Klus suggested passing the fee structure and at the next Park Board meeting discuss
how we would like to see the enterprise facility money spent and pass that on to the city
council. Maybe they will look at it differently and have a different philosophy than what
has been in the past. Mr. White indicated that it is his understanding that the city council
has never taken money from the pool to pay for something else. Mr. Klus commented
that they could if they needed to balance everything out to zero. Mr. Wallin noted that
most of the money has been taken out of the liquor fund and utility fund in order to
balance everything out to zero. Mr. Klus noted that he just would like to make sure that
the city council hears our thoughts on this issue. Mr. Keprios pointed out that he thinks
this issue will come before the Park Board once Mr. Wallin and his committee are
prepared to make a recommendation to fund a future capital plan. He added that this will
most definitely be a controversial topic.
John Murrin MOVED TO RECOMMEND THAT THE EDINA CITY COUNCIL
APPROVE THE FEES AND CHARGES AS PROPOSED BY STAFF WITH THE
EXCEPTION OF A $5.00 INCREASE ON THE GOLF COURSE PATRON -CARD
AND NO EXCLUSIVE USE ALLOWED OF THE BREDESEN PARK PATHWAY.
George Klus SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY.
Mr. Valliere indicated that he would like to point out that there was a $5.00 increase on
the patron card just two years ago and in the past he has been raising that fee once every
five years.
V. OTHER
A. Donations Policy - Mr. Keprios handed out his first attempt on writing a
donations policy which will be controversial, however, it is still in its infancy stage. He
explained that he put a lot of thought into this as well as he met with the Edina Historical
Society to get their thoughts. Mr. Keprios indicated also has a meeting coming up with
the Executive Director of the Edina Foundation and Gordon Hughes to explore other
12
•
options. He noted that he will have more information on this topic at the next Park Board
meeting.
B. Community Center Update and Community Education Services Report - Mr.
White asked Mr. Mooty and Ms. Presthus if they would be okay with presenting their
reports at the next Park Board meeting to which they agreed.
VI. ADJOURNMENT
George Klus MOVED TO ADJOURN THE MEETING AT 9:40 P.M. Linda Presthus
SECONDED THE MOTION. MEETING ADJOURNED.
13
EDINA HOCKEY ASSOCIATION
4801 WEST 50TH STREET
EDINA, MINNESOTA 55424
OFFICERS
President
Bruce Carlson
Vice President
Todd Nieland
Secretary 0
Art Cobb
Treasurer EDINA
Bob Gleason MINNESOTA
Past President
Steve Ries 1999-2000
ICE COORDINATOR
Bob Rauch Season
November 3, 1999
John Keprios and Edina Park Board Members
Dear John and Park Board Members,
BOARD
Linc Davis
John Dulin
Bruce Ferrara
Nancy Fischmann
Ernie Harper
Scott Johnson
Dick Kirklin
Kip Knelman
Pat Manion
Jude Dugan Olson
TOURNAMENT COORDINATOR
Deb Dalton
The Edina Hockey Association (EHA) would like to request permission to place "Dasher
Board" advertising on the West and South rinks at Braemar Arena.
With the continued pressure on the costs associated with providing an affordable hockey
experience, we are challenged to find additional revenue sources. Currently, the EHA
buys approximately 1,700 hours of ice per year from Braemar at a cost of $210,000. We
have experienced yearly increases of $5.00 per hour for the last several years, and are
paying $18,000 per year for "user fees".
Having 800 hockey players in our program gives us a natural network to solicit the
sponsorship of this fundraising concept. We are also organized to facilitate the
administration of such an effort.
After research of similar initiatives and experience acquired from hosting the National
Bantam Tournament last April, we are proposing the following:
The EHA will be responsible for:
• Solicitation of appropriate advertisers
• Coordination of art work and manufacturing of graphics
• Collection of funds and paying related expenses
• Monitor deterioration and the timing for replacement graphics
C
Braemar Arena would provide:
• The dasher board space
• Installation and removal of the adhesive graphics
Dasher advertising would primarily be sold to local businesses and have one year terms.
There would be a phase in time, however, assuming one calendar year at full capacity, the
financial assumptions are as follows:
• West arena, 15 advertisers @ $1,800 per year (2 graphics per rink)
• South arena, 15 advertisers @ $1,200 per year (1 graphic per rink)
• Both arenas @ 3 graphics total $2,500 per year
• Manufacturing costs: 90 graphics @ $150 per graphic totals $13,500
(Assuming 1 replacement per location)
Consequently, assuming a mix of one and two rink advertisers the gross revenue would
be approximately $40,000 with net revenues of $26,500. The revenue sharing market
appears to be 25% of the net revenue going to Braemar Arena, or $6,625 in this example.
I have included some photographs of representative graphics on the dashers at Braemar
Arena from last year's National Bantam Tournament.
We would appreciate your support in this progressive initiative. The additional resources
will assist in keeping our program costs affordable to the youth hockey players in our
community and help us to maintain the standards associated with administrating,
arguably, one of the finest hockey programs in the country.
Sincerely,eT. A. Q44,x
Bruce A. Carlson
President, Edina Hockey Association
Cc: EHA Board Members
Larry Thayer, Braemar Arena
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Olom LIAM
Mr. Andy Herring, Chair
Edina Park and Recreation Board
City of Edina
4801 West 50`t' Street
Edina, MN 55424
Dear Andy:
November 7, 1999
I am the incoming president of the Braemar Men's Club, a group of 375 Edina residents
who are committed to playing golf regularly at the Braemar Golf Course.
I have heard that the Park and Recreation Board is discussing the feasibility of
transferring the golf course's operating surplus to support the capital plans of the Park
and Recreation Board. There are three reasons why I conclude that this strategy is not in
the best interests of the community.
First, you are discouraging Edina residents from utilizing a community asset that
`theoretically' was developed for Edina residents. Edina seniors, myself included, seek
out other golf courses of comparable quality that offer golf at a more reasonable price.
For example, I have played at three other courses this past summer for $21, $23 and $25
that includes both the costs of an electric cart and 18 holes. Yet, I hear that there is board
discussion about raising the cost of golf at Braemar because "it is such a great deal" and
then use the excess surplus to fund capital improvements in other sectors of the
community.
Secondly, I view this "cost shifting" strategy as similar to the approach government uses
to fund health care. Medicare and Medicaid do not reimburse the health care system
adequately for care delivered. Consequently, the health care system shifts these costs to
the private sector so that you and your employer annually experience a higher annual
increase in your policy premium than you deserve....a hidden form of taxation. The
politicians are unwilling to deal with the real cost of the benefits they offer seniors and
the poor, place artificial caps and shift the cost to the private sector.
Your consideration of taking some of the operating surplus from the golf course's
operations is cost shifting. It will result in either fewer improvements to the golf course
and/or price increases. This cost shifting is from seniors with fixed incomes to younger
families with children who are experiencing annual raises at their place of employment.
The assumption underlying this claim of cost shifting from seniors to younger residents is
that a disproportionate number of seniors with fixed incomes use the golf course and that
mostly younger families with children use the park system.
Finally, the citizens of Edina generously approved your bond referendum just a few years
ago. You, not we, decided on the amount of money that you needed to upgrade the park
system. We continue to assume you requested and received adequate funds to satisfy the
capital needs of the park system for a significant period of time.
I believe that the patron card and the cost of golf at Braemar should be a great deal for
Edina citizens and it is your responsibility and privilege to assure that occurs.
Sincerely
J. Paul O'Connor
4604 Gilford Drive
Edina, MN 55435
Cc: Bill Jenkins and John Keprios