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
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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.
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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.
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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.
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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
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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
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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.
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