HomeMy WebLinkAbout2018-08-08 City Council Work Session PacketAgenda
City Cou n cil Work Session
City of Edina, Minnesota
Edina City Hall Community Room
Wednesday, August 8, 2018
5:30 PM
I.Call To Order
II.Roll Call
III.Cost Recovery Expectations: Parks and Recreation Enterprise
Operations
IV.2019-2023 CIP & 2019 Budget
V.Adjournment
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Date: August 8, 2018 Agenda Item #: I I I.
To:Mayor and C ity C ouncil Item Type:
R eports / R ec ommendation
F rom:Ann Kattreh, P arks Director, Don Uram, F inanc e
Director and Andrea R ich, F inancial Analyst Item Activity:
Subject:C os t R ecovery Expec tations: P arks and R ecreation
Enterpris e O perations
Dis cus s ion
C ITY O F E D IN A
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED:
S ee staff report.
I N TR O D U C TI O N:
S ee staff report.
AT TAC HME N T S:
Description
Cos t Recovery Staff Report
August 8, 2018
City Council
Andrea Rich, Financial Analyst
Ann Kattreh, Park and Rec. Director
Don Uram, Finance Director
Cost Recovery Calculation
Information / Background:
In conjunction with the managers of the Parks enterprise funds (Centennial Lakes, Braemar, etc.), staff has
developed a pair of cost recovery calculations in part to measure the financial performance of the
enterprise. These calculations are a refinement of the performance measure included in the budget
document defined as “Operating revenue as a % of Operating expenses.” The new cost recovery
calculations are:
(1) Total Cost - represents the total, on-going cost of each facility. The calculation includes operating
income/(loss) including City billed utility costs*.
(2) Variable Cost - represents the facility’s management of budget, revenue and costs, or the “variable
cost” measurement. The calculation includes operating income/(loss) excluding depreciation, central
services and water/sewer/storm.
Along with existing performance measures, cost recovery Targets and historical actuals will be incorporated
into the budget book (beginning with the 2020-2021 Budget). Progress will be monitored through the
Finance quarterly report. The expectation is that actual performance will fall within an acceptable range of
the target.
*Beginning in 2017, City billed utility costs are not allocated to City facilities.
STAFF REPORT Page 2
Recommended Cost Recovery Targets:
Following are cost recovery calculations for 2017 actuals and 2018 budget followed by the recommended
targets. To put things into perspective, the 2017 amount of profit or loss is included. For example, a 68%
Total Cost CR for the Art Center equaled a loss of $230,000.
* Total Cost targets will change once amounts are available for newly metered water/storm/sewer.
** Based on open regulation course.
2017
2017 Opr
Inc/(Loss)
$000's*2018
Target
2018/19
Art Center Fund
Total Cost CR*68%(230) 72% 70%
Variable Cost CR 75% 78% 75%
Aquatic Fund
Total Cost CR*96%(41) 99% 100%
Variable Cost CR 151% 148% 145%
Golf Course Fund
Total Cost CR*47%(1,039) 50% 100%**
Variable Cost CR 65% 82% 120%**
Golf Dome Fund
Total Cost CR*75%(116) 77% 75%
Variable Cost CR 182% 183% 180%
Ice Arena Fund
Total Cost CR*89%(328) 81% 80%
Variable Cost CR 119% 110% 110%
Sports Dome Fund
Total Cost CR*59%(335) 46% 50%
Variable Cost CR 162% 118% 115%
Edinborough Park Fund
Total Cost CR*105%60 83% 80%
Variable Cost CR 127% 99% 100%
Centennial Lakes Park Fund
Total Cost CR*76%(241) 72% 70%
Variable Cost CR 85% 81% 80%
Date: August 8, 2018 Agenda Item #: I V.
To:Mayor and C ity C ouncil Item Type:
Advisory C ommunic ation
F rom:S cott Neal, C ity Manager and Don Uram, F inanc e
Director Item Activity:
Subject:2019-2023 C I P & 2019 Budget Disc ussion
C ITY O F E D IN A
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
A C TI O N R EQ U ES TED:
S taff will present information regarding the 2019-2023 C I P and 2019 budget for the Council to consider and to
provide input. B ased on input received, staff will prepare the preliminary levy information scheduled for approval
on September 18. Staff will also refine the C I P for the Council to consider at the N ovember 7 work session. N o
action is required at this meeting.
I N TR O D U C TI O N:
T he next action required is for the Council to set the preliminary (maximum) property tax levies in S eptember.
T he final levies are set in December and can be equal to or lower than the preliminary levies. T he final levies
cannot be higher than the preliminary levies.