5. - 12. ICESR Laserfiche: '2. ICE AGENDA 04-05-2005MEMORANDUM
TO: Ice Arena Commission Members
FROM: Rich Czech, Arena Manager
DATE: March 29, 2005
SUBJECT: Agenda Memo -March 29, 2005
5. Review 2004 operating finances current information on 2005 financial status
Attached for your review are the financial summaries for the Arena for the years 2001,
2002, and 2003, along with the budget for 2004 and 2005. Included is some historical
data and an outline of capital improvements that have been made over the year.
The large increase in ice sales from 2003 to 2004 is primarily due to the Barn being in
operation for the full season. As you are aware, in 2003 the Barn started about six weeks
late due to the leaks in the pipes in the Barn's floor. Another reason ice sales increased
was that there were about 100 more hours sold between the months of January and May.
Another area that dramatically increased from 2003 to 2004 is the admissions. In 2004
there were 20 more High School games played at the Arena than in 2003.
This is a reflection of the Rogers High School Hockey teams not having a program the
2002 - 2003 season, so they did not have any games in the months of January through
February in 2003, thus there were not as many games played in 2003.
Revenues such as vending, skate sharpening, and the concession stand rental did not
dramatically change each year. If they were to change, there would have to be a dramatic
change in the price we were to charge for the product; and in the case of the concession
stand a change in the lease payment would have to be re-negotiated with Elk River Youth
Hockey. The concession stand and the lease will be discussed later on in the agenda.
Operating expenditures for 2004 were actually lower than in 2003. This was largely due
to the fact that in 2003 we had a lot of expenses repairing the Barn floor before we could
install ice.
As you are aware of, in 2004 we replaced the Barn's floor and boards; this needed to be
done if we were to have ice for the 2004 - 2005 season. Along with the new floor and
boards for the Barn, a new condenser was installed for the ice plant along with a
backpressure regulator for the Olympic rink. The total capital outlay for these projects
was $447,630.00. Removing the capital items from the equation, the Arena was
$39,260.00 in the red this year, which is less than what was predicted.
6.Ice Sales
The attached chart shows atwo-year history of how many hours were rented each year
and who is renting them. As noted in the finance information, the substantial increase in
ice hours sold during the 2003 - 2004 season and the 2004 - 2005 season is largely due
to the Barn having ice on schedule. Also noted in the finance information was the fact
that we sold an additional 100 hours of ice for the months of January through May this
season from the same time period in 2003. Most of these increased hours came from non
prime time hours, which typically indicates an increase in the demand for ice time.
Elk River Youth Hockey is requesting more ice hours during the week. To accommodate
their request we would have to take ice from one of the High School teams, most likely
from the Becker /Big Lake High School Boys Hockey team. Last season Becker /Big
Lake booked 77 hours including games; out of these 77 hours, 4 of these hours were on
Saturdays, which would leave 73 hours of weekday ice during the season.
I have been in contact with the Becker /Big Lake Athletic Director regarding this issue.
He is working on booking ice with the Monticello rink, which will be opening this
summer. I'm not sure what kind of luck he will have obtaining ice from them, from what
I understand, most of Monticello's prime time hours have been spoken for. Since the
Arena benefits financially from their games, it would be nice to keep their games, if they
could find their practice hours at Monticello.
7. Ice Rates
The ice rates for the Arena have not been adjusted since the 2003 - 2004 season. At that
time, the prime time rates increased from $135.00 an•hour to $145.00 an hour. The non -
prime time rates stayed the same ($115.00) as well as the summer rates ($120.00).
Attached for your review is the 2004 ice rate survey from the Minnesota Ice Arena
Managers Association. After reviewing city rinks that are comparable to Elk River, we
are on the lower side of the average hourly rate.
Two major expenses that should be considered when looking at raising ice rates are:
Utilities and Personnel. These are the two major expenses that every Arena faces,
excluding capital improvement items. Since 2002, utilities have gone up over 30%, while
personnel has gone up more than 15%. Another area that needs to be considered is that
we don't want to price people out of skating in our facility. As you are aware of, hockey
is already an expensive sport and figure skating isn't any better. It comes down to how
much will the Arena be subsidized from general funds. In past years, the Arena has had
funds transferred in from about $20,000.00 to $130,000.
My recommendation is that we raise the regular season prime time ice rate to $150.00 an
hour and the non-prime time rate to $125.00. I also recommend that the off-season rates
be adjusted to $125.00 an hour for prime time hours and $95.00 an hour for non prime
time. I'm also proposing some changes to the dates and times of when summer ice and
non-prime time hours begin. During the regular season on Sundays, I'm purposing that
the prime time rate begins at 10:00 am instead of 11:00 am. Instead of having a date
when the regular season begins and the spring starts, I'm purposing that we start the
spring rates after the second weekend of March. This will provide us with a more
uniform schedule each year when the regular season begins and the spring schedule
starts. These changes should produce additional revenue of over $20,000.00. Attached
for your review are the current ice rates and the proposed changes for the 2005 - 2006
season.
8. Construction of the Barn Floor
The construction of the Barn's floor went very well. During the construction we had one
change order, the radiuses at each end were redone due to the concrete in that area being
old and brittle. There was a concern that this area would not hold up in the future. There
are a couple of items remaining on the punch list that will be completed once the ice is
removed this spring, we are holding back a small amount of the contractors final payment
to make sure that this work is completed.
9. Capital Improvement Plan (C.I.P.)
Last fall I reviewed the C.I.P. for the Arena with the Arena commission. An item that was
not on the list was an office in the southwest corner of the Olympic rink. The office is
scheduled to be in the 2006 budget and will centralize the Arena Manager's office, which
is now located in the upper level of Barn in the Southwest corner. The office is
functional, however it is in need of being updated. Since it is in the far corner of the
Barn, the general public has a hard time locating it. City staff will be utilized to design
the area and bids for the project will be taken late this fall or early winter. Abetter use
for this money maybe in door turf for the Barn floor. Many rinks use turf for Indoor
Soccer as well as for indoor Lacrosse, which is getting very popular. The Turf is about
$70,000.00; however, I believe that within a few years it would pay for it self and would
eventually help eliminate the deficit that the Arena faces each year. As much as an office
is needed, I would like to see that we first look at items that will generate revenue for the
Arena so that the Arena will cash flow, or items that will keep the Arena functioning
efficiently.
10. Concession Stand
Attached for your review is the memo the City Administrator Pat Klaers received from
the Elk River Youth Hockey President Dave Hansen. The area of interest in the memo is
the parts regarding the concession stand; paragraph five and the third proposal on page
two. After discussing this issue with the city Parks and Recreation Director Bill Maertz,
the attached memo was mailed to Dave Hansen in response to his memo. Even though
the Arena would like to continue the current agreement with Elk River Youth Hockey, it
is prepared to operate the concession stand or to find an outside vender.
The original members of the Arena Tasked Force, board members of Elk River Youth
Hockey, and City Staff drew up the agreement's regarding the concession stand lease,
Elk River Youth Hockey's office, as well as the storage area Elk River Youth Hockey
uses in the Arena. The agreements were never signed, however both parties have
followed the principals of the agreements. As old board members of Elk River Youth
Hockey have moved on and new board members take their place, it gets harder each year
to explain the details of the agreements that were made almost a decade ago. I believe it
is time that these agreements are signed or new agreements are re-negotiated so that there
is some understanding for everyone involved. Attached for review are the three
agreements that were originally established.
11. Staff Updates
A. Shooting Area
The shooting Area in the Barn was completed last fall; the area was very popular
throughout the season. We did not charge for this area and do not plan on charging a fee
next year.
B. Arena Projects
This year we have added a water softener that provides soft water throughout the
building. It has already made a big difference in the condition of the ice. The ice sets up
faster and has a clarity that it never had before. The scale that once built up on the
Arenas equipment is no longer there, resulting in a newer looking Zamboni. This
summer the cooling towers chemical treatment plan will be looked at to see if we can cut
back on the chemicals we are using to treat the towers. We will also be experimenting on
using lower temperature water when resurfacing the ice. By using cooler water to
resurface the ice, we will not only save on our gas bill but should save on electricity as
well.
Besides the usual cleaning, we will be painting the areas of the rink that are in need of
being painted, install rubber matting to the areas that need to be replaced, install outlets
over the rink for dry floor events, and put up a couple of sections of center groove in the
Barn.
C. Dryfloor
The following the dryfloor schedule for this summer:
The Jose Cole Circus; April 13tH
The Spring Craft Fair; May 7th and 8th
Summer Youth Dance: May 20th
Fall Dance: September 9th
Fall Craft Show: September 17th and 18th
~4~n- ~ 5
Elk River Ice Arena
Account Revenue and Expenditure Summary
2005 DRAFT 2004 2004 2003 2002 2001
Budget YTD Actual Budget Actual Actual Actual
REVENUES
Ice Rental 368,500 376,127 355,000 314,601 336,876 323,813
Recreation Programs 130,000 106,089 139,000 118,029 137,785 134,311
Admissions 35,000 47,270 40,000 28,921 39,561 34,000
Sign Rental 18,500 17,572 18,500 17,367 19,766 17,855
Dry Floor Events 21,000 12,339 15,000 15,124 17,886 13,071
Concession Rent 21,500 21,500 21,500 21,500 21,500 21,500
Vending 32,000 29,370 34,500 30,471 31,034 34,164
Skate Sharpening 4,500 3,939 7,500 4,311 5,074 6,529
Other Mdse Sales/Phone Comm. 2,400 3,709 3,800 1,893 3,679 3,283
TOTAL 633,400 617,914 634,800 552,217 613,162 588,526
EXPENDITURES
Personal Service 205,400 200,721 200,200 184,639 189,099 172,580
Other Operating Expenditures 216,000 218,030 202,300 237,259 171,659 175,724
Vending Mdse for Resale 17,500 14,852 17,500 13,984 15,253 16,206
Other Mdse for Resale 2,400 1,101 2,800 395 2,356 1,060
Recreation Programs 60,250 40,667 56,800 44,823 54,724 54,213
TOTAL 501,550 475,371 479,600 481,100 433,091 419,783
OPERATING INCOME (LOSS)
Capital Outlay
Building Debt
NET INCOME (LOSS)
131,850 142,542 155,200 71,118 180,071 168,743
8,000 447,630 0 -
198,700 200,215 200,250 201,485
10,879 88,996
202,470 197,885
Other Income
Interest Income
Sale of Fixed Assets
Contributions/Rebates
Admission Surcharge
Transfers In
Capital Outlay
Eliminate Deficit (General Fund)
Building Project
Change in Fund Balance
(74,850) (505,303) (45,050) (130,367) (33,279) (118,138)
383 519
11,000 24,960 10,000 5,000
9,098 7,365 11,503 2,540
8,000 0 6,678 6,342 29,000
66,850 39,260 25,000 108,730 21,554 28,619
464,537
- 18,592 (20,050) 17,365 16,503 (52,460)
Capital Outlay:
1997 -Heaters
1998 -Dehumidification
1999 - $34,305.00 Bleachers; $82,659.98 Ice Resurfacer
2000 -Matting for floors
2001 -Floor Scrubber & Bleachers ($30,000 to be paid by ERYHA; $27,460 from admission surcharge)
Received $5,000 contribution for sign to be purchased in 2002.
2002 -Matting and sign
2004 -Barn Floor and Dasher Boards
Contributions:
2001 - $5,000 sign; $2,540 admission surcharge for bleachers
2002 -Bleachers $10,000 ERYHA; $11,503 admission surcharge
2003 -Bleachers $10,000 ERYHA; $7,365 admission surcharge
2004 -Bleachers $10,000 ERYHA; $9,098 admission surcharge
3/23/2005
North Metro Senior
Break Away Hockey
Elk River Arena Skills
Skating Academy
Skating Academy Show
Adam Hauser Goalie
Barry Hohlen
Elk River Youth Hockey
Joe Dziedzic Hockey
Tim Marchand
Elk River Figure Skating
4th,5th, and 6th grades -dry floor
Becker/Big Lake High
Elk River Boys Practice
Elk River Girls Practice
Rogers Boys Practice
Rogers Girls Practice
Becker Big Lake/Rum
Elk River High School
Girls High School
Rogers Boys Games
Rogers Girls Games
Individuals
Elk River Boys -Paid per time
Elk River Girls -Paid per time
Open Hockey
Open Skating
Rogers Boys Captains
Rogers Girls Captains
Becker Big Lake Youth
District 10 Playoffs
Elk River Girls Booster
Elk River Youth
Rogers Youth Hockey
St. Michael Youth
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Elk River Arena's 2004 - 2005 ice rates
Prime Time Hours:
These are hours that are most frequently requested by the customers.
Non Prime time:
These are hours of ice that are usually Late night or early hours where a substantial discount is offered
All hours are charged according to the time the hour is schedule to begin.
Seasonal rates:
September 1, 2004 -March 20, 2005
Both Rinks
Days of Times Rate per hour
the week
Sunday 12:OOam - 10:59am $115.00
11:OOam - 9:20pm $145
9:21pm - 11:59pm $115
Monday- 12:OOam - 5:59am $115.00
Thursday 6:OOam - 9:20pm $145
9:21 pm - 11:59pm $115
Friday - 12:OOam - 5:59am $115.00
Saturday 6:OOam - 10:OOpm $145
10:01pm - 11:59pm $115
When School is in session the ice rate per hour from 6:OOam - 2:30pm Monday -Friday
will be half of the non prime time rate.
Summer Rates for the year 2004: March 21, 2004 -August 31, 2005
1 - 50 hours rented $120
51 - 75 hours rented $115 Weekend Rates: Friday 3:00 pm to
76 - 100 hours rented $105.00 Sunday 2:59 pm $70.00 an hour.
101 - 125 hours rented $95.00
126 - 200 hours rented $85.00
** Summer rates may change as of August 5, 2004
Proposed Elk River Arena's 2005 - 2006 ice rates
Prime Time Haurs:
These are hours that are most frequently requested by the customers.
Non Prime time:
These are hours of ice that are usually late night or early hours where a substantial discount is
offered.
All hours are charged according to the time the hour is schedule to begin.
Seasonal rates:
September 1, 2005 -the third weekend in March
Both Rinks
Days of Times Rate per hour
the week
Sunday 12:OOarn - 9:59am $125.00
10:OOam - 9:20pm $150
9:21pm - 11:59pm $125
Monday - 12:OOam - 5:59am $125.00
Thursday 6:OOam - 9:20pm $150
9:21pm - 11:59pm $125
Friday - 12:OOam - 5:59am $125.00
Saturday 6:OOam - 10:OOpm $150
10:01pm - 11:59pm $125
When School is in session the ice rate per hour from 6:OOam - 2:30pm Monday -Friday
will be half of the non prune time rate.
Spring Rates for the year 2006: Mid March through May Summer Rates: June -August
Sunday 12:OOam - 9:59am $95.00
10:OOam - 9:20pm $125
9:21 pm - 11:59pm $95
Sunday 12:OOam - 2:59 pm $95.00
3:OOpm - 9:20pm $125
9:21 pm - 11:59pm $95
Monday - 12:OOam - 5:59am $95.00
Thursday 6:OOam - 9:20pm $125
9:21 pm - 11:59pm $95
Friday - 12:OOam - 5:59am $95.00
Saturday 6:ODam - 10:ODpm $125
10:01 pm - 11:59pm $95
Monday - 12:OOam - 5:59am $95.00
Thursday 6:OOam - 9:20pm $125
9:21 pm - 11:59pm $95
Friday 12:OOam - 5:59am $95.00
6:OOam - 2:59pm $125
3:OOpm - 11:59pm $95
Saturday 12:OOam - 11:59pm $95
N.c~,.~ 10
. ~~~~~
~.
October 12, 2004
Mr. Pat Klaers, City Administrator
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
Re: Activity Center/Bond Referendum
Dear Mr. Klaers,
It is my understanding that the Arena Commission held a special meeting on September 28m to view
a presentation by Mr. John Barth, Elk River High School Athletic Director, regarding the proposed
activity center and ice arena which are the subject of a bond referendum in November. Following
the presentation, the Arena Commission took a position recommending support of the proposed
activity center, to the City of Elk River. Thereafter, as president of Elk River Youth Hockey, our
commission members with the request that we support the bond referendum in order to ensure its
passage contacted me.
This is a very interesting proposal. From what I understand, as part of the request by the School
District, they have proposed taking over all costs associated with capital improvements to the e~sting
ice arena, along with assuming the arena's outstanding debt. As a consequence, the ice arena will be
self-sustaining, if not an actual moneymaker for the City.
The bond referendum will be a very close vote, with its success dependant on the citizens of Elk
River, Ramsey and Zimmerman. These same areas of the community participate in the Elk River
Youth Hockey programs. The Elk River Hockey Association would like to be a part of this process,
assisting with the passage of the bond referendum allowing the project to move forward. In doing so,
Elk River Youth Hockey would like the City to take into consideration the financial realities that
youth hockey has faced and will continue to face in the future.
Elk River Youth Hockey relies heavily on charitable contributions from fund-raising and pull-tab
sales (McCoy's Pub, formally Old Town Tavern). Our community, like many others, is saturated
with fond-raising activities and only so much can be raised. Pull-tab sales have decreased
dramatically over the past five years. During this period we have had to face an annual reduction in
pull-tab contributions in the amount of $10,000. This translates into a $50,000 reduction in annnal
contributions compared to five years ago. This financial hardship falls directly on the families of Elk
River Youth Hockey.
Elk River Youth Harkey has attempted for years to make the arena concession stand profitable,
therefore taking some financial burden off our membership. A study of the costs and revenues for
the concession stand over the past three years shows a net gain to Elk River Youth Hockey of zero.
All of our profits are spent on rent and operating costs.
1000 SCHOOL STREET N.W. • P.O. BOX 193 • ELK RIVER, MN 55330
It would seem prudent at this time, to work with the City to achieve awin/win situation for the City
and Youth Hockey. Upon the passage of the school bond referendum the City will experience an
apparent windfall with the arena finances, allowing for the new activity center. Elk River Youth
Hockey would like to share in this windfall to a minor extent and would ask that the city consider the
following proposal:
1. Ice rental rates charged to Elk River Youth Hockey would remain frozen or constant for the
next eight years.
2. Elk River Youth Hockey, the #1 purchaser of ice hours, would be given the first right to
refusal for all additional ice hours that become available upon the opening of the Rogers
Arena.
3. The concession stand rental charges Elk River Youth Hockey pay to the City be reduced to
be in line with average rental charges of similar nature in surrounding arenas. That rental
fee to be $5,000 annually.
The Elk River Youth Hockey Board is very much willing to support the bond referendum with the
City's acceptance of our proposal We would then communicate our support to the entire
membership, encouraging them to support the bond at the polls.
I invite you to contact me to discuss this matter further. Time is of the essence, and I truly believe
this is a great opportunity for Elk River Youth Hockey and all the residents of our community. I
look forward to working with you to ensure that this project gets completed.
Sincerely,
Q~ ~-~ c~
David Hansen
President
Elk River Youth Hockey
~ 763-241-9970
(VV) 612-673-3782
da~~d.hansen(a?ci.minneanolis.mn.us
cc: Dale Martin, Chair /At Large Representative
Dan Tveite, Council Representative
1000 SCHOOL STREET N.W. • P.O. BOX 193 • ELK RIVER, MN 55330