11.3. SR 03-05-2018 Eclty1� ,.,�� Request for Action
River
To Item Number
Mayor and City Council 11.3
Agenda Section Meeting Date Prepared by
Work Session March 5, 2018 Cal Portner, City Administrator
Item Description Reviewed by
Arena/Civic Center Referendum Justin Femrite P.E., City Engineer
Reviewed by
Councilmember Wagner
Action Requested
Discuss the timing, scope, and options for an ice arena/civic center referendum.
Background/Discussion
On February 8, 2018, the City Council held a Special Meeting and voted to pause design and
development of the ice arena project to consider other options to include a citywide referendum for a
multipurpose civic center to include an ice arena.
Councilmember Wagner will start a discussion regarding the 2016 Referendum and options for moving a
multipurpose civic center forward,including asking Council to consider creating a Council-led Task Force
comprised of commission chairs, community stakeholders (including youth associations), at-large
residents, and staff.
Representatives from RJM Construction and 292 Design Group will be at the meeting to assist with any
questions the Council may have.
Financial Impact
The cost of 2016 Community Center Task Force Study facilitated by JLG Architects was $50,000.
The cost for the feasibility study to examine extending city services into the gravel mining area is expected
to range $50,000-$100,000 and typically takes 4-6 months to complete. These costs are typically part of
the levied Trunk Area Assessments which would be levied to all properties in the service area. The
feasibility study is a required document to comply with Chapter 429 of State Statute.
The Ice Arena Fund has a fund balance of$700,000 available for capital improvements/repairs. Due to a
potential leak in the Olympic Rink refrigerant piping and a growing restriction in The Barn Rink piping,
repairs will need to be considered to maintain operations.
Attachments
■ N/A
The Elk River Vision
A PehoMing community 2a itb revolutionary and spirited resourcefulness, exceptional POWERED By
service, and community engagement that encourages and inspires prosperity INAMIRE1
�GnC O�nT
Some lessons learned from 2016 failed Referendum:"
• Not enough public input sessions I
• Informational marketing materials went out too late
• Not enough detail explained in project "why" and "what happens if Referendum fails"
• Could have done better job of understanding economic impact and value a new facility
would bring to city
• Could have done a better job embracing all youth sport associations and ensuring
project scope was fully understood
• Did we deliver the message about looking to the future needs of the community?
What we know now:
• public trust and project understanding are low
• The community doesn't feel as if their voices have been heard
• We have an opportunity to do better for all in the community
• We cannot over -communicate!
Where do we go from here: LISTEN. CONNECT. EMPOWER.
• Organize Council -led, community-based task force to re-evaluate community needs and
determine if the current "Plan B" facility moves Elk River in the right direction. Task
Force is led by public relations professional.
o Task Force could include:
• all city commission chairs
• members from each youth sports organization
■ Chamber of Commerce representatives
■ Community leaders
• General "at -large" community members
■ Business community representatives
■ High School and youth athletes
• Senior Center representatives
• staff
Next steps:
• Understand and determine recreation field use fees.
o Fairness across the board
• Recreation programming priority list and budget
o Understand long-term goals of recreation needs and wants
o Long-term solution to capital improvements
• What is GOAL for new facility? Still to combine failing infrastructure? (Arena, Lions Park
Center, Senior Activity Center) Boost economic development near new facility? YMCA
build -out?
Arena Issue Notes
Comments are not meant to offend or demean any of the work done by previous task forces and' 1
committees.
I have been getting emails saying what a poor leader I am on this issue. I can only surmise that those
writing those emails think I should vote to spend $25 million on an ice arena with no citizen input.
This issue has been on my mind, day and night, since our vote on February 8. I have called numerous
cities and exchanged email with others about their ice arenas. People are asking for me to do something
and I have been conducting research and giving the issue plenty of thought.
I have heard from several senior citizens and businesses about the impact a $25 million dollar levy
would have on their taxes. Their voices have to be taken into account.
In my mind we may have been approaching this issue in the wrong way. We know that we have issues
with the ice arena, the senior activity center and Lions Park Center. Instead of combining these I think
we need to prioritize them. The arena needs to be dealt with first because of sensitive nature of the ice
rink system. The arena is an important amenity in Elk River and I think we all agree that something
needs to be done to improve the current situation. We are exploring activity center options with the Y.
Before that decision is made we should have a firm number on what it would take to make repairs to
the current activity center without adding more space to the building. I am sure we will have further
discussions about Lions Park Center.
In the failed 2016 referendum we added pieces to the arena improvement to try to recruit more broad
support. We came very close to succeeding. The project just put on hold was for $25 million. I think
there are a lot of people in Elk River who only see the dollar amount when voting on a referendum. I
understand that. As we add more pieces to make a referendum attractive, the price keeps going up. This
probably works to our disadvantage. People get blown away by a number.
My research of arenas in other communities and how they are paid for show that we should be able to
construct/remodel two sheet facility in Elk River for much less than the dollars currently being tossed
around. An example of this is in Sioux Falls. They built a three sheet facility for a construction cost of
$9.3 million. I called to see how that was possible. Some things that kept the cost down: sand floors
instead of concrete, metal building instead of tip up concrete panels, one floor facility. The building is
owned by a 501 c3 corporation in Sioux Falls and the city put very little money into the project. They
did many other things to keep the cost down. The leader of their 501 c3 group told me they have a very
functional facility, one without all the bells and whistles that drive up the cost. He was shocked when I
told him we were looking at one new rink and one remodeled for $20-$25 million.
The groups on both ends of the arena issue—those that want nothing done and those that want a
complete overhaul of the building, probably will not like my plan. In most compromises neither side
gets what it wants. I consider this a compromise.
Ice Arena Plan
Presented here is one possible solution to Ice Arena situation
$12,000,000.00 City issues bonds for the project.
This is the amount stated on 2016 referendum material that the city would spend if the referendum
failed. There were two other larger numbers listed but this was the lowest number.
I have been an advocate of a voter referendum for the $25 million dollar project that we talked about
but if we bond for $12 million I don't think we would need the referendum. I think the council would
be keeping its word by following up with the $12 million after the referendum failed.
We would still need to put the local sales tax question on the November ballot. Proceeds from that sales
tax could be used to cover any arena construction cost overages, park improvements and dredging of
Lake Orono costs.
With the reduction in debt, we may only need a 1/4% sales tax rather than 1/2% but that can be
determined before the November vote and after we get the sales tax analysis report from the U of M
extension office. If the local sales tax vote does not pass the impact on property tax owners would be
about /z of the numbers we have previously talked about.
$1,500,000.00 From city's Great River Energy fund and General Fund reserves
Some of the Great River Energy funds have been committed to Wayfinding but future annual
contributions to that fund should cover most of the Wayfinding costs. Our general fund reserves have
always been pretty high. A one time deduction from that fund will be quickly replaced in the next few
years if we continue to follow the recent pattern of not using all budgeted dollars.
$1,500,000.00 Contribution from Youth Hockey and Figure Skating toward cost of building
I am proposing that these two groups pay the city $75,000 annually for 20 years. The amount for each
group could be based on number of participants or ice hours rented. This cost would be in addition to
the amounts these groups pay for ice rental.
My research of recent ice arena projects has shown the following:
St. Louis Park -Youth hockey paying $2.2 million over 10 years on recent $11 million arena project
Maple Grove -Youth hockey paying $1.2 million over 13 years for West Rink project
Lakeville -Youth hockey has been paying $95,000 per year since 2005 to pay off debt on 3 sheet arena
Edina -Youth hockey paying $800,000 toward recent ice improvements
Luverne-Youth hockey and local business paid $700,000 of $1 million project
It is not uncommon for youth hockey to pay capital cost and hourly ice rental.
Other youth groups in Elk River are paying capital costs, although obviously in lesser amounts. To be
fair their playing facilities don't cost anywhere near what ice arenas do.
I know we have had capital costs paid by youth football, youth lacrosse, youth baseball and youth
softball.
Basically we are charging youth hockey and figure skating 10% of the cost of the improvements. Many
Elk River citizens would call that fair.
The $1.5 million would be taken from our sewer trunk fund (current balance ii more than $3 million)
and reimbursed as yearly payments are made by youth hockey and figure skating.
$15,000,000.00 Total project cost
Ways to Lower cost of Option 1
I am definitely not an arena expert but these are a few items for discussion. Some of
these were items mentioned to me in my research of ice rinks. We would rely on our
engineers to come up with a $15 million plan.
• Replace the ice plant and compressor in Olympic part of building but leave it an
Olympic size rink and the main rink in the building.
• Tear down the barn and build a new sheet parallel to the Olympic sheet with
seating for far less than the 1500 in the Olympic arena
• Construct the new rink so that it does not infringe on the varsity softball field,
taking away the need for the city to build new fields at Lions Park
• Use metal siding for the exterior of the new part of the building rather than tip up
concrete panels
• Use a sand floor rather than a concrete floor
• Eliminate additional meeting rooms from the plan
• Eliminate second floor on new sheet if this saves money
• Focus on ice sheet and locker rooms
' UDI M6
---f -- --
maillm
I
I
I
I �
I
I
I
I
I
I
M
J
C)
I
I
I
I
I
I
I O �
I
I
I r1
Fit
U
O
i
O
U
C31
CC
C
cz
C
vS
CD
E
CU
cl
U
N
O
co
0
v
co
Ecn
a)
:? E
cn o
c
i
(n
U
O E
Q CC
CD
tm C
E
coco
O -C
�+O
C
O'Fz
O y
CO
cn>
�a
O
cu
CC CCC
C N
E
O
N i
O
E -a
via Cr
a�
cz
o c
EC C
+L CC
ve
Q
cn cn
O.EC
a
O
EE
O
EYE
O
c O
O 'C O N
fC
O cm
Cnj
N
C
C
N O W
N CO
C CU
O E
v � +
co C
U
g.0 o �N
c-)
:L -'F- E
fC CU
N
+
+•
C
C"c�
O
_aYCn�
E
U<
co co cn v
y
O�
O-0 O
NCiN N cC
O
cc
1E—E0ccnn
N
C CO C)C
'C S
—
Q 9. O
OCC O "
'ct
en
z .o
O N'-oO
cn
N N
woo
N
o-
��ZZUZdrr��0
U3
O
CD
O.
C3
i
y
C
cz
-77 i roz��z
U
�
U
=
C
cz
c
vS
CD
CU
U
N
co
v
Ecn
r
i
(n
CD
E
coco
'C
(�
w
w
O
cu
E
O
O
C
O
Incncz
O
CL
Q
(ID,E
O
CL
cncz
✓�
N
N
O
w
CD
fC CU
N
+
+•
C
O
O
E
.0
o
CC
CC
cn CC
CUC
Q_
O
O
en
CL
O
U3
CD
C3
i
y
C
cz
in tC
OCD EL
U
CC
03
cn
O
> CC
—1
Q—
CC
N
C
i
EE
E.0
O
W
C
CC
.9
CCS
a U
N O
cn
CO
CCj cC C*
[n
c
O
CJ °+�' �- E
O
cn
.a
O iC
U O
�— y
®
�
O a O O
flJ C)
S
S
C C
CJ
E O� B
.Lm wFa)oroo
,C
E®Ccn
C)
O
.0
'— CC
CO
0
O E
C-) �'
Vj
i E42
CC ._
CU
U
� .—
CS=
y
0.—N O
O
C (D
O
✓� i.0
o
w
�Eg
co
co .fl
a
E C
� a=
i
ti� CZ
U 0 F—
O � CCS
U
00
to
0
N
U
E
N CU
C) CC N
CJ
C- 0 C
O-0_
O C
O 0
�ZOS[:�U
0
cow
caWJQ»
CUC [C ® C1 �a