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HomeMy WebLinkAbout1995-11-14 Park Board MinutesEDINA PARK BOARD 7:30 p.m. November 14, 1995 MEMBERS PRESENT: Michael Burley, Dave Crowther, John Dovolis, Jim Fee, Beth Hall, Andrew Herring, Bill Jenkins, Andrew Montgomery, Jean Rydell MEMBERS ABSENT: Becky Bennett, Frank Bennett STAFF PRESENT: John Keprios, Ed MacHolda, Janet Canton, John Valliere I. APPROVAL OF THE OCTOBER 10 1995 MINUTES John Dovolis MOVED TO APPROVE THE MINUTES. Mr. Montgomery indicated that he was not at the last Park Board meeting and had a question regarding the pool. He asked if the $200,000 that is being taken out of the Developer's Fund for the pool could be some kind of a loan from the Developer's Fund. Mr. Keprios replied that Mr. Rosland has stated the plan is to reimburse the Developer's Fund if the bond issue does pass. It was included in the proposed motion for action that was approved at the last City Council Meeting. Mr. Keprios explained it was not part of the original motion by the Park Board, however, it was something he was directed to do. Mr. Jenkins indicated that he doesn't think the Developer's Fund is tapped into all that often. Mr. Montgomery noted that he doesn't know what the Developer's Fund is for and how it came about. Mr. Keprios explained that a portion of it is used every year to fund the capital plan. Mr. Montgomery asked where do the dollars comes from for the fund. Mr. Keprios stated that it's not a growing fund like it used to be. The money comes from when there is development or re -development in the city. Mr. Burley asked if it is a fee that the developer's pay for the right to do what they are going to do. Mr. Rosland explained that the Developer's Fund was started about 20 to 25 years ago. The city used to take 6% of the estimated value of new developments and now they are at 8%. The Developer's Fund basically has been used to fund regional or city wide facilities. He noted that, if the bond issue passes, the Developer's Fund will be reimbursed, however, that depends on what the Park Board recommends and what the City Council ultimately decides. Mr. Rosland stated that it would be wise to do this if the bond issues passes because it is a kitty for an emergency if something should happen. Mr. Burley asked what happens to the Developer's Fund when there is no more land. Mr. Rosland replied that it depletes as it's used up, however, it does gain interest each year and you may only want to spend the interest. He also pointed out that money is received for re- developments. Mr. Keprios asked if the interest that is earned in the Developer's Fund stays in the Developer's Fund. Mr. Rosland replied that the interest stays there because that is what is being used for the capital plan. Mr. Montgomery asked if the Developer's Fund is aimed only at Park and Recreation and Mr. Rosland indicated that is correct, however, it's the City Council who spends it. Jim Fee SECONDED THE MOTION. MINUTES APPROVED. II. 1996 CAPITAL PLAN - KEN ROSLAND CITY MANAGER Mr. Keprios indicated that Mr. Rosland will be explaining where we are at in the coming year with the Capital Plan. He noted that he spoke to Mr. Rosland after the last Park Board meeting and Mr. Rosland was gracious enough to say he would speak tonight on the 1996 Capital Plan. Mr. Rosland pointed out that in the early 1970's the tax laws changed. The City of Edina used to get approximately 1.7 million from the state up until about 17 to 18 years ago when they stopped giving the City of Edina local government aid. This money used to fund almost 25% of the Edina budget. Next, the city was confronted with levy limits until about two years ago and we couldn't raise taxes even if we wanted to. He explained that also through attrition people had to be let go from the Park Department. However, one has now been funded back. Mr. Rosland explained that they then lobbied to get out of levy limits two years ago. He noted that the City Council has been working on getting the budget back up and getting more manpower back. Mr. Rosland went on to explain that the city is also being confronted with several other problems. He indicated that one is a new fire station and the other is the infrastructure here at City Hall. Mr. Rosland pointed out that bA law they can do several things where they don't have to float a bond issue. They can now sell what they call an HRA revenue bond and the City Council has chosen to do that for the new fire station and possibly work at city hall. Mr. Rosland explained that there are some thoughts that will have to be worked on if the bond issue fails. He pointed out that they don't want a contingency plan that in essence gets published and people then say well that doesn't sound so bad, we won't worry about the bond issue. He stated that if the bond referendum fails the City Council has some tough decisions to make. Mr. Rosland also pointed out that if the bond issue fails, the public has spoken and they are happy if the parks don't get improved. He noted that the City Council then would give Park and Recreation $50,000 out of the operating budget to go to the capital budget and the rest would be raised through the Utility Fund which has been $100,000 a year. Mr. Rosland stated that the Mayor is absolutely committed to the bond issue. Mr. Rosland indicated that there will be a lot of meetings and a lot of work going into this. However, if it doesn't pass the City Council will probably look at a plan starting in June to see what can be done this year and if they will be willing to raise taxes next year for a capital plan of some scope. He noted, however, that if the third arena is shot 2 down another one would probably not be built because the public has spoken. Mr. Rosland stated that right now the City Council is totally focused on making the referendum fly. He noted he has been around for a couple of bond issues and this is the first time the City Council has been willing to work as hard as they are willing to work. He also pointed out that a referendum team and a citizens committee has been put together. Mr. Rosland again noted that if the bond issue fails there are back up plans and everyone will be part of them because there is not going to be a lot of money. III. 1996 FEES AND CHARGES Mr. Keprios indicated that staff is not proposing a lot of major changes. The one new addition is there is now a fee for adult athletic teams, which have not been approved before. Mr. Dovolis asked Mr. Keprios if they have looked at what the rental rates are at other arenas in the area so that we are a little more or are right in with everyone else. Mr. Keprios pointed out that we are right in the middle and Mr. Dovolis indicated he doesn't understand why we are in the middle. Mr. Jenkins stated that Mr. Thayer has explained to him that if the fee goes any higher we will start to lose people. Mr. Crowther pointed out that he thought part of phe deal has always been to try and be reasonable for the associations. Mr. Dovolis indicated that he thinks it seems to him that the rental rates at Braemar are more in the lower to middle range. Mr. Montgomery asked if there is an additional fee for non-residents. Also, it seems to him that there is one fee for prime time hours and another fee for after 10:00 p.m. Mr. Montgomery pointed out that when you look at the 1994 figures, we haven't brought our 1996 figures up to the 1994 figures when you talk about season tickets. Mr. Montgomery commented that we are going to be putting a lot of money into the swimming pool, however, we are keeping our pool fees essentially the same. These are the two items in which he found an exception with. Mr. Keprios explained that the arena season ticket price dropped a year ago because we ran out of ice and had to eliminate a lot of the open skating. Therefore, people received a lot less for their money and if you multiply it out the fee did go up for the amount of hours they received and that's why the season ticket went down. Mr. Burley asked if the ice arena pays for itself and Mr. Keprios replied that in a good year it about breaks even. Mr. Burley asked why it's not run as a profit center and Mr. Dovolis commented that is what he is saying and asked who makes those decisions. Mr. Keprios indicated that the City Council makes those decisions, however, they do look at the Park Board's recommendations. Mr. Burley asked shouldn't Mr. Thayer's charter be to make it a profitable venture. Mr. Keprios indicated that everyone's charter who manages a revenue facility, which is to meet their own operating expenses, debt payment and hopefully have some money in the bank to keep up with their capital needs. He noted that the arena has never had money to keep up with additional capital items. Mr. Dovolis asked if there is ever a slush fund put aside to cover those items. Mr. 3 Keprios pointed out that he thinks Mr. Crowther was right in saying that we hurt our associations when we raise the price. Mr. Montgomery asked isn't there a non-resident fee and Mr. Keprios replied there used to be a non-resident fee. However, it has been eliminated because we need the non-residents to help us break even and we don't want to price ourselves out of business where we don't get those customers. Mr. Keprios pointed out that with the ice shortage the way it is right now maybe we could afford to raise the price. He then explained that there are 82 communities who have applied for the Mighty Ducks grant, 47 of which were to build new arenas. If all 47 build rinks, the state-wide indoor ice shortage will be significantly reduced. We may see some of the high price arenas come down. Therefore, we want to be a very marketable item for the ice hours that aren't purchased. Mr. Dovolis asked if you can raise the price during the prime time hours, if people want to play prime time hours then they should pay a premium. Mr. Crowther indicated that before we jump on these numbers it would make more sense for the Park Board to have more facts. Mr. Jenkins suggested having Mr. Thayer attend the next Park Board meeting. Mr. Montgomery stated that we have made a lot of improvements at the Aquatic Center and yet the fees have remained the same, why haven't the fees gone up. Mr. MacHolda explained that the fees today have been able to cover operating expenses, debt service and even depreciation. He pointed out that this year they will probably be $75,000 in the black after paying those items and indicated that it would be hard for him to justify an increase in the fees and charges. Mr. Fee asked if this is the first time the pool has made a profit in a number of years. Mr. MacHolda stated that the last two years the facility did very well. Before that, the facility had a difficult time generating its own capital and typically would about break even. However, it's going to be more difficult now that they not only pay for operating expenses but also a debt service of approximately $40,000 for the 1991 renovations that were made. Mr. Burley indicated that it seems like there are no contingency plans for the eventual depreciation of equipment. Mr. Fee noted that the City Council will not let them, if the Park Department makes money, they spend it. Mr. Crowther pointed out that if we raise the money it doesn't go into the slush fund, the City Council gets it. Mr. Burley asked if the Park Board should recommend something different and Mr. Jenkins indicated that they have tried doing that a number of times. Mr. Montgomery stated that we have three revenue producers; golf course, arena and golf dome, which have to finance everything else and it seems to him that we are looking for money all the time to take care of the parks. Therefore, why aren't these revenue producing facilities able to generate the cash to help us replace some of the costs for the ice. Mr. Fee stated because they want to be competitive, they cannot price themselves out of the market. He noted that there are a lot of alternatives to swimming, golf and skating. Mr. Burley asked Mr. Fee if what he is saying is that we cannot go to the City Council and try to generate a slush fund for a golf facility. 4 Mr. Jenkins stated that the City Council will not let us do that. Mr. Keprios explained that as long as he has been with the city the philosophy has been that the golfer should pay for golf and the hockey player should pay for their ice. They should price themselves to where they hope they can make their own ends meet and be self-sufficient. Mr. Keprios indicated that the fees listed are simply staff's recommendations. Mr. Burley noted that he doesn't think anyone is questioning the fees and as Mr. Crowther has stated the Park Board doesn't have enough facts to base a decision. He noted that what he is hearing from Mr. Montgomery is that the facilities are not paying for themselves because every so many years money has to be sunk back into them, they are not breaking even. Mr. Jenkins asked Mr. MacHolda how many years in the last ten did the pool not make money. Mr. MacHolda pointed out that 1987 was significantly in the red because the pipes scaled shut which cost approximately $17,000. Otherwise, the pool did break even and in the last two to three years it has been slightly in the black. He indicated that if you throw out depreciation the pool is $120,000 in the black this year. Mr. MacHolda indicated that he doesn't get to put that $120,000 back into the facility and capital repairs. Mr. Fee then asked why increase the cost if it just goes back into the general pot and we can't take advantage of it. Mr. Jenkins pointed out that government does not work like private businesses. Mr. Fee asked if anyone from the City Council has ever explained to the Park Board their rationale on how they operate. Mr. Crowther pointed out they may have to change it if the bond issue doesn't pass. Mr. Fee noted that if the tax payers are not willing to step up to plate then they have to allow us to try and do it internally. Mr. Jenkins stated that it was asked at last nights meeting what are we doing to ensure that the same situation does not happen again. He noted that the Mayor answered the question by indicating that it's a very sensitive issue and suggested that people go to truth -in -taxation to see what happens. Mr. Dovolis indicated that it looks like we have the best deal in town when you look at Braemar's Golf Course fees compared to other golf courses. Mr. Valliere replied that in the municipal sphere we are in the high average area. The Minneapolis and St. Paul courses, which comprise ten courses, are all below us by approximately $3.00. However, if you compare us to the privately owned public courses, no, we are not on the same level as they are but they have a tax issue. Also, our philosophy is a little bit different in that we want to serve as many people or residents in our community and do not want to price anyone out. Mr. Valliere stated that the price of golf at Braemar is attractive and that's good. He also noted that the philosophy of why a municipality owns a golf course is not necessarily to be profit motivated. It is to provide recreation for as many people as we can at a reasonable and fair cost. He noted we do not want to be under market and yet we do not want to be profit motivated to the point where we deny someone the opportunity to access the facility. Mr. Valliere pointed out that 65% to 70% of the facility is utilized by residents of Edina. He indicated that there is no non-resident fee at the golf course. He explained that golfers look at golf courses as a very mobile situation where they play at Braemar one day and a different facility the next. 5 Also, he noted that Mayor Richards doesn't really want to build walls in the non -residency structure. It is a policing nightmare to try and find out if people are Edina residents or not. The patron card takes care of that. Mr. Valliere indicated that he feels the 1995 golfing season was successful from both a golf and financial aspect. He pointed out that a total of 127,000 rounds were played, 55,000 on the Executive Courses and 72,000 on the regulation course. He stated that total receipts were in excess of $3,000,000 with bond and interest retirement of $630,000. Also, the course made improvements amounting to $230,000, which is not as big of a capital investment as it appears to be. Mr. Valliere pointed out that year end should show a small profit after bond and interest payment. Mr. Valliere stated that the driving range had revenues of $305,000 with exceptionally high activity, including a very large teaching program. Also, the dome is experiencing excellent fall activity after the infusion of some needed advertising dollars. The market has become highly competitive given the number of new domes in the metropolitan area. Mr. Valliere pointed out that the Pro Shop operation was assumed by the City in the calendar year of 1995 and has seen an improvement in presentation and profits as well as dollar volume. In past years the Pro Shop was around $150,000 in gross revenues and in 1995 the Pro Shop has already exceeded $335,000. Mr. Valliere indicated that another encouraging report is the golf car activity with the new nine coming on line. The golf car revenues have gone from $165,000 to over $208,000, however, expenses have also increased. Mr. Valliere stated that the spring weather was not good and most 18 hole golf courses saw a decline of approximately 2,000 to 4,000 round. This did affect Braemar's total revenues. Also, the course has recovered very well from the construction of the new holes. Mr. Valliere noted that he has still not answered Mr. Dovolis' concerns as to where Braemar is at in the market place and what the motivations are. He indicated that in defense of what he has put down, if you look at an increase in costs he is trying to make it close to 6 1/2% or 7% of his total expenses. Therefore, that number should come in between $17,000 and $20,000 and what he is advocating in increases should generate revenues of approximately $57,000 to $60,000. He pointed out that $40,000 of it will come from the regulation course increase in green fees. Mr. Valliere explained that if you look at Normandale Golf Course as an entity under itself it meets its operating cost but it cannot meet its debt service. It drags approximately $75,000 annually and that must come from Braemar's main course. Mr. Dovolis indicated he understands where Mr. Valliere is coming from and agrees we should be competitive, however paying $21.00 or $17.00 to play a round of golf at Braemar is ridiculous. Mr. Valliere answered 0 that most of the 2600 people in the community buy the patron card and pay $55.00 up front, therefore, they are actually paying more than $17.00. Mr. Dovolis stated that what he feels is being said is that with a bond issue we are fixing a 20 year old problem that has been building each year. He indicated that what he would like to see is have the bond issue pass, have everything fixed and from this point forward make everything pay for itself because it's unfair for the taxpayer to pay for all of the facilities when they may not even use them. Mr. Keprios explained that the golf course has a larger capital plan than the rest of the 39 parks combined and they do it through generating on their own revenues. Mr. Dovolis pointed out that Mr. Valliere does a great job of taking care of everything with $230,000, it's unbelievable. Mr. Burley asked if the Park Board can do something and Mr. Keprios indicated they can make a recommendation to the City Council. Mr. Crowther asked if the Mayor or someone from the City Council would come to a Park Board meeting to discuss the history and mechanics of our city government so we aren't wasting our time because it may not be the way our government is run. Mr. Dovolis indicated that maybe it's time for a fundamental change. Mr. Keprios replied that the City Council has made it very clear that they are not a staff driven council, however, they take very seriously what the Park Board has to say. Mr. Keprios explained another approach. He noted that what a lot of other communities have done is instead of just doing it all in one lump sum, they vote to up their capital plan and not borrow the money through bonds but just up the capital plan so they don't have to pay interest on the money, plus the cost of selling the bonds, etc. They just raise the taxes and get money to make the capital improvements for the next several years. Mr. Keprios stated that the Edina City Council has been unwilling to have a capital plan that keeps pace with the infrastructure needs and that is the way it has always been. Ms. Hall asked if it would be such a bad situation if the Aquatic Center raised their prices since they have not been raised since 1994 and the money went to the city to spend. Mr. Keprios indicated that is the Park Board's prerogative and would not be a bad thing. He also noted that we have to remember that we don't want to price ourselves out of the market. Mr. Fee indicated that he feels unless the Park Board receives an explanation from each of the various revenue facilities the Park Board needs to take staff's recommendation to go ahead because they have done the research to come up with these fees. Mr. Montgomery indicated that he doesn't see how we can leave the Aquatic Center fee static since 1994 in today's economy. He noted that he just doesn't think we are doing our job. Mr. MacHolda indicated to Mr. Montgomery that he thought he was the one who made the comment about the daily admission being too high earlier this year and now he is stating that the $5.00 is not enough. Mr. MacHolda explained that the season ticket used to be sold for $65.00 for a resident family 7 IV. regardless of how large the family was. What is happening now is the fee is $45.00 for the first two names on the resident season ticket and $10.00 for each additional name that is added to the ticket. This is where the revenues really went up and people now pay for what they use. Mr. MacHolda again stated that if the daily admission fee of $5.00 is not enough he will bump it up, however, the season ticket did change in 1994 and now each person that is added to ticket is charged. Mr. MacHolda also pointed out that in 1994 the swimming lessons cost $40.00 for 45 minute lessons and this year it cost $40.00 for 30 minute lessons. Mr. Crowther stated that the main revenue generation is the season ticket and the daily admission and that hasn't changed in two years and now it will be three years. Mr. MacHolda explained that he has fallen back on is the city philosophy. If the facility was $120,000 in the black this year, and again we are a public entity. He feels he has two missions. First, to provide a service and second, to balance a budget. He doesn't think it's his mission to create a cash cow. Mr. Keprios asked the Park Board if they want to see the expenses and revenues for each sport or do they trust that these fees are okay. He noted that some of them were raised slightly in some categories from pervious years and that they all break even at the worst case scenario and none of them lose money. Mr. Herring asked if bandy covers the cost of the two people who maintain the ice and Mr. Keprios indicated no because the revenues and expenses do not include full-time staff, administrative or maintenance expense. He indicated that they do pay a rental fee and that is going up. Mr. Keprios pointed out that the deadline for bandy registration has passed and not one A team registered on time. Mr. MacHolda stated that only one resident player has signed UP . John Dovolis MOVED TO ACCEPT THE STAFF'S RECOMMENDATION FOR THE 1996 FEES AND CHARGES WITH THE PROVISION THAT THE MAYOR OR SOMEONE FROM THE CITY COUNCIL DISCUSS CITY FINANCING PHILOSOPHY WITH THE PARK BOARD IN THE FUTURE. Mike Burley SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY It was noted that in the future for the fees and charges meeting that more information be available and that both Mr. Thayer and Mr. Valliere be present. PARK IMPROVEMENT PLAN UPDATE - SLIDE PRESENTATION Mr. Jenkins indicated that Mr. Keprios has done a nice job of putting together a slide presentation for the bond issue. He noted that the Referendum Team watched the slide presentation last night. Mr. Keprios stated that he would like to set the record straight from the article that appeared on the front page of the Sun Newspaper. He indicated that Jeff Pieters interviewed him and the last question he asked that if both of these issues pass this has got to make you pretty happy. Mr. Keprios noted that he replied what is most important is to make the community happy and to serve the community. If that is accomplished, then I have done my job by serving them well. It's not to please the staff and that's got to be very clear. However, instead of writing that, Jeff Pieters indicated that Mr. Keprios doesn't necessarily support this thing and that's not true, he didn't even ask him if he supported it. Mr. Keprios stated that he supports this 1008 and thinks it's great for the community. Mr. Keprios noted that nine meetings have been set up. He indicated it would be nice to have at least one Park Board member at the larger meetings to hear what the people are saying because the Park Board needs to be the voice of the community. He pointed out that this is not a staff driven proposal. It is important that the Park Board be the voice of the community on these two bond referenda. The Park Board indicated to Mr. Keprios that he did a good job with the slide presentation. V. OTHER A. Policy Change for Reservations - Mr. Valliere indicated that he would like to get some action on a policy change for reservations. He noted that he would like to increase the four day reservation to a five day reservation for patrons. The second change is he would like the non -patrons to be able to make one day in advance reservations. Dave Crowther MOVED TO ACCEPT THE RESERVATION CHANGE. Jim Fee SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. VI. ADJOURNMENT Dave Crowther MOVED TO ADJOURN THE MEETING AT 9:30 P.M. John Dovolis SECONDED THE MOTION. MEETING ADJOURNED. 9