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04-17-2012 ICE MIN MEETING OF THE ELK RIVER ICE ARENA COMMISSION TH HELD AT CITY HALL APRIL 17 , 2012 6:00pm Members Present: Chair Martin, Vice Chair Johnson, Commissioners Foss, Malzahn, Gumphrey(arrived at 6:30pm), and Cunningham Members Absent: Commissioner Nziolek Staff Present: Arena Manager Rich Czech, Arena Assistant Laura Estby, Parks and Recreation Director Mike Hecker, Finance Director Tim Simon 1. Call Meeting to Order Pursuant to due call and notice thereof, the meeting of the Elk River Ice Arena Commission was called to order at 6:05 p.m. by Chair Martin. 2. Consider 4/17/12 Ice Arena Commission Agenda MOTIONED BY VICE CHAIR JOHNSON AND SECONDED BY COMMISSIONER FOSS TO APPROVE THE APRIL 17TH, 2012 ICE ARENA COMMISSION AGENDA. MOTION CARRIED 5-0. 3. Approve 3/13/12 Ice Arena Commission Minutes MOTIONED BY COMMISSIONER MALZAHN AND SECONDED BY TH VICE CHAIR JOHNSON TO APPROVE THE MARCH 13 , 2012 COMMISSION MINUTES. MOTION PASSES 5-0. 4. Open Mike None 5. 2011 Financial Update/2012 Budget Finance Director Tim Simon notes that the arena’s debt service was paid off 12/1/2011. 2011 was the highest total of revenue (ice hours sold) ever. Recreation programs are down, however the expenses for those programs have also decreased. We have increased revenue from High School hockey game tickets as well as dry floor events. Advertising, building rental, skate sharpening and staff expenses has stayed the same. Revenue from vending machines has decreased, but concessions inventory has increased. In addition, 1 operating expenses have decreased thanks to the energy upgrades from last year. Overall, the arena had a net income of $90,369. Arena Manager Rich Czech notes that part of the reason there has been a decrease in recreation program revenue, is that the upper level learn to skate classes, in addition to most the contract ice has been turned over to the Elk River Figure Skating Club. Simon adds that concessions revenue was up $24,694 from last year, and the bleacher fund ended the year at $13,755. For 2012, Simon notes, the projected revenue is $665,400. The arena will have additional expenses, also, including the hiring of another full time person. However, even with that expense, the arena is projected to have $89,950 which can be used for projects. Commissioner Malzahn inquires about the additional number of ice hours sold in 2011, noting that the revenue should have gone up considering the rates increased last year. Arena Manager Czech states that an additional 100-110 hours were sold this year, and notes that the arena is running fewer camps themselves, as more independent groups are coming in and buying up the hours, which increases the ice revenue and decreases the amount spent in staffing our own. Chair Dale Martin inquires about the payback for the improvements that were made. Finance Director Tim Simon notes that the arena paid $60,000 less in utilities in 2011. 6. Value Engineering Studies for Arena Arena Manager Czech presents information on revenue between each ice sheet separately in an effort to show what would happen to our overall revenue if we only had the Olympic sheet. He notes that the Barn is only up 9 months per year, and admissions for High School hockey games are only in the Olympic. In addition, dasher board/advertising is typically only in the Olympic, but dry floor events are only in the barn. Overall the barn has about 1/3 as much in expenditures. 2 Chair Dale Martin notes, that overall the numbers are interchangeable between the Olympic and the Barn. Arena Manager Czech hands out the completed study from Skyline Building Envelope Consultants, which was unavailable at the time of the mailing. He notes several photos of vertical cracks in the walls of the Olympic which explains why there are leaks that we not explained by roof examinations. He also states that the expansion joints are also deteriorating. In addition Skyline discovered several issues on the roof inbetween the Barn and the Olympic, and areas which are not up to current code, such as caulking failure and issues with worn out rubber. The intake and exhaust stacks are not up to current code, and there are some stacks on the roof that are no longer in use. In the Barn, Czech notes, the top plate is failing. The fasteners need to be recaulked(was done in 1989). The seams between the roof panels need to be refoamed and reattached. In addition, if we added an elastic roof membrane at a cost of $45,000 it would give us an extra 10 years. To reduce the humidity in the building we have the descant wheel and the empathy wheel. The empathy wheel dries out a majority of the air which saves us money because it reduces the amount of gas that we use to run the descant wheel. The descant wheel is the last place the air goes through before being released into the barn. Our empathy wheel needs to be repaired. We also need to replace the radiant heat in the barn. It has been in the budget for the past couple of years, but is always removed. There are also possible corrosion issues. Currently the HVAC system for the barn is a home furnace. Overall the Olympic needs $186,000 in repairs if we were to rebuild the dehumidification system, or $300,000 to replace it. Czech notes that he is not sure if the payback is worth it to have an automated system. Currently our system is manual. To fix all of the issues that Skyline found, and to purchase a new dehumidification system, would cost $803,480. To fix the issues and rebuild the current system would be $684,230. Czech then moves on to the study completed by Stevens Engineering, and their option packages. He suggests steering away from anything requiring HFC (options 3&4) as they use R22 as a refrigerant which Czech notes it is being phased out and will be unavailable in 10 years. Czech states that there are two types of refrigeration- direct, which is very efficient but requires 3 R22(what we have now) and indirect, which used ammonia as the primary coolant, and a secondary chemical goes out to the floor itself. In addition, he notes, there are both industrial and commercial refrigeration systems. Industrial systems are larger, but they last longer and work faster. Commercial systems are common in grocery stores. Czech suggests we could do the work in phases- starting with the Olympic, and we could save the R22 that we have on hand for the Olympic to use in the Barn until we could get to it. The total cost would be $2.5 million. In addition, it would cost $691,000 to replace the roof- (according to 292 groups figures, however they suggest that this has likely increased 5% from when the figures were compiled) With regards to Hallberg’s studies, Arena Manager Rich Czech believes that some of the figures were a little high, and that we might be able to do better. He also suggests that Tom Betti from the 292 group still has some hours that he has been paid for, that he might be able to take the engineering studies and include them in the overall figures from the renovation. Arena Commissioner Jerry Gumphrey inquires about what would happen to the barn if we did nothing. Arena Manager Czech states that the barn would continue to deteriorate at a fast rate and that within 5-8 years the building would no longer be safe to use, with the roof issues and the corrosion to the cross beams that is getting worse, specifically over the ice. He notes that we will need to spend almost $1 Million just to get by at this point. Vice Chair Johnson inquires if the work done to the barn in the past was done incorrectly which is why we are having issues? Arena Manager Czech states, he is not sure if it was done incorrectly, or if codes have changed and that builders “know better” now. Chair Dale Martin inquires if the 292 groups completed renovation figures would address the issues of cracks in the walls. Arena Manager Czech notes that it does not, those fixes would add another $300,000 to the figure. Commissioner Gumphrey notes that we have to put a plan together to present to the City Council. He suggests contacting the 292 group to have them put together a few scenarios with costs. What happens if we do nothing, do the minimum to fix the issues, do a renovation project which would include new 4 HVAC, Barn Roof and Ice Plant, or if we do the full blown $8.3 million expansion as proposed last year. He states that at this point, we are going to need to spend $1million plus just to keep the barn afloat for 5-10 more years. Chair Dale Martin notes that we cannot do nothing, we need to address the HVAC, Barn Roof and fix the cracks. Commissioner Gumphrey states the minimum would be to spend $36,000 to fix the issues with the screws in the roof and $117,000 to refurbish our current HVAC system. He also notes that we have to defend why we should NOT do the minimum, as it will be a mediocre fix that will only keep the barn going for 10 years before it will have to be closed down or renovated. Commissioner Malzahn inquires if there are any safety concerns with the Barn in it’s present condition. Arena Manager Czech states, that the building is sturdy now, but the ongoing issues will continue to cause problems in the future. He also notes that he will call Tom Betti from the 292 group to have him crunch the numbers with the new figures. Parks and Recreation Director Michael Hecker suggests talking to other rinks with different amenities (i.e. meeting rooms) to see what kind of revenue they generate. Commissioner Malzahn also suggests putting together a timeline over the next 20 years to show approximately how much the costs of the needed repairs will increase. Vice Chair Johnson inquires about Hockey Day in MN to see if Elk River has been selected. Activities Director Mike Cunningham notes that officially, they do not have to announce the winner until the 2012 hockey day, but he is optimistic that they will hear something in early May. Commissioner Gumphrey suggests shooting for Early May to present the options to the City Council. He also notes that he would go with Arena Manager Czech to meet with Tom Betti. 5 7. Ice Rates Arena Manager Czech hands out an updated sheet showing ice rate comparables with other arenas who are not subsidized by youth hockey. He suggests if we stay the same, or raise $5/hour he does not feel that we are out of line. MOTION BY COMMISSIONER MALZAHN AND SECONDED BY COMMISSIONER FOSS TO KEEP ICE RATES AT $180/HOUR FOR ANOTHER YEAR. MOTION PASSES 6-0. 8. Outside Banners Chair Dale Martin inquires about raffling off the old banners or seeing if anyone would like to purchase them as a way to generate revenue for new ones? He also discusses the possibility of including advertising on them, and if so what kind. He expresses concern about possible issues with the NFL if advertising is included considering they have their own sponsors as do some of the players. Commissioner Malzahn states he feels it is a mistake to include advertisers on the banner. Commissioner Gumphrey states it should be presented to council to pay for, and if the Elk River Youth Hockey Association would like to help, that is ok, if not, their names get taken off of the banner. Arena Manager Czech notes he will contact Youth Hockey to see if they would like to take the old banners for a raffle. Youth Hockey Representative Commissioners Foss and Malzahn note that they will present this information to the Youth Hockey board at their next meeting and will bring back the results at the next Arena Commission Meeting. Commissioner Cunningham also will talk to the Boys Hockey Booster Club about the banners and contributing to their replacement as well. 9. Staff Updates New full time Lead Arena Worker (formally called the night supervisor position) is Tony Seibert 6 10. Adjournment MOTION BY COMMISSIONER FOSS AND SECONDED BY VICE CHAIR JOHNSON TO ADJOURN THE ARENA COMMISSION MEETING. MOTION PASSES 6-0 AT 8:35PM Minutes Prepared by Laura Estby ___________________________________________ Tina Allard, City Clerk ___________________________________________ Dale Martin, Chair 7