2013-04-08 STMA Ice Arena Board PacketCity of
A,lbertville�. Michael
SnmU Town EirkiW ft rity UNh STMA
STMA ARENA BOARD AGENDA
MONDAY, APRIL 8, 2013
ALBERTVILLE CITY HALL
6:00 PM
1. CALL TO ORDER — ROLL CALL
2. ADOPT AGENDA
3. APPROVAL OF THE MINUTES OF MARCH 11, 2013 (pgs 1-3)
4. FINANCE REPORTS
a) Approve the March list of claims as presented in the amount of $26,677.37 and
March report (pgs 4-8)
5. MANAGER'S REPORT
a) Monthly report (pgs 9-10)
6. OLD BUSINESS
a) Advertising (pgs 11-12)
b) Ballard King Feasibility Report (pgs 13-26)
7. NEW BUSINESS
8. YOUTH HOCKEY ASSOCIATION UPDATE
9. ADJOURN
MAPublic Data\Arena\2013\agendas\04-08-2013\04082013 S'I'MA Agenda.doc
ST. MICHAEL-ALBERTVILLE ARENA BOARD MINUTES
March 11, 2013
6:00 p.m.
Present: Chairman Jeff Lindquist and Members Larry Sorensen, Dan Wagner, Gayle Weber and
Chris Schumm were present. Member Kevin Kasel was absent. Also present: City
Administrator/PWD Adam Nafstad, City Finance Director Tina Lannes and Youth Hockey Association
representatives, Tammy Tupper, Kurt Sjelin, Scott Beming, Adam Smiglewski and Mike Marhula.
The meeting was called to order at 6:04 p.m. by Chairman Lindquist.
Set Agenda
Members Schumm/Weber moved to set the agenda as amended. All voted aye.
Approval of Minutes
Members Wagner/Schumm moved to approve the minutes of the February 11, 2013 Board Meeting.
All voted aye.
Finance Reports
Member Weber asked for clarification about the budgeted amount for open skate/hockey, asking when
is the largest usage of these hours for comparison of the amount budgeted for the year to the actual
amount through February. Fitch stated that there are a number of Learn to Skate sessions, but the
largest usage for open skate/hokey is at the end of the peak season for youth hockey which is Mid -
March through September 1st.
Chairman Lindquist referred to the claims register with a bill in the amount of $665.00 to Line One
Partners asking for an update on the process of the communications permanent solution. Nafstad
informed the board that continues to review a number of options. One option is a wireless solution
through Nextera and the other option is working with the STMA School District on a fiber connection.
This is a large project and staff will keep the Board updated on the status of a permanent solution.
Members Sorensen/Schumm moved to approve the February 2013 list of claims in the amount of
$12,521.25 and the February Financial Report as presented. All voted aye.
Arena Manager's Report
Roof: Fitch and Nafstad provided a brief update regarding the roof and noted that staff does not know
the exact cause of the dripping (or leaking) and that they have received a number of conflicting
recommendations and opinions. It was recommended that an independent party visit the building
regarding the leaking issue. Member Schumm stated that this issue has urgency and suggested that
staff move forward to a resolution. Nafstad reported that staff will meet with the independent party, as
well as, continue to coordinate with building official and develop a scope of work or options for review
by the Board. Chairman Lindquist agreed with asking for a specialized opinion, to be proactive on the
problem and have staff return to the Board with recommendations. Member Weber brought up the
issue to expedite the exploration should the board approve expenditure up to a specific dollar amount
or wait. The Board agreed to wait until costs are determined, if they go above budgeted amount for the
arena manager to approve which is $1,500. 00.
Fitch continued his report to the Board touching on surrounding area ice arena rates per hour. The
Board will approve rates for the current year no later than the May 2013 meeting. The Board was
informed that there was a complaint from the L&D Trucking owner about patrons of the STMA Arena
were parking on their property. Staff has addressed these parking issues by putting up no parking signs
and also a barricade, therefore, these issues seems to be resolved.
STMA Arena Board Meeting - April 8, 2013 1
Fitch reviewed the Assistant Arena Manager job description pointing out he is on call 24/7 and that he
feels he can't take time off from the job for a vacation, also pointing out if for some reason he can't be
around, there is no back up to his position as Manager. Lannes went over the details regarding the
projected cost of hiring a full-time Assistant Arena Manager coming to an estimated cost of $51,843
and that even with a $10 per hour increase there is not sufficient funds in operations to cover the
expenditure. Chairman Lindquist stated that the Board needs to be receptive to the fact that an
employee feels he can't take time off, and to the fact that the arena doesn't currently have an employee
trained to fill the manager position if Grant is absence . Lindquist asked staff to research options such
as a job share with one of the three entities or other arenas. The Board had some discussion and agreed
options need to be further discussed. Member Schumm asked about each entity contributing $7,000 to
operations to cover the new position. The board directed staff to research the issue and bring it back to
the board at the April meeting.
Old Business
Ballard King Update: Nafstad updated the board on the progress of the feasibility study stating that the
final report should be sent out to the Board and youth hockey this week.
2013 Budget: Lannes presented the 2013 preliminary budgets to the board as they were presented at
the February meeting to answer any questions due to her absence. Lannes clarified some of the
expenses budgeted. The budget will be on the April 8, 2013 agenda and should be passed before or at
the same time the board sets the hourly ice rental rates, along with a possible decision on the Assistant
Manager position.
Youth Hockey Association Update
YHA President Sjelin requested time at the April meeting to present their proposal, after receiving the
feasibility report, as a dry run before the April 291h joint meeting. Sjelin also introduced the board
Adam Smiglewski who will be Kurt's assistant to help the president with meeting, getting information,
and handling activities as assigned by Sjelin.
YHA has had a discussion to get next year's ice schedule set early to assist ice scheduling and families
to know when they are to be on the ice in advance, rather than a weeks' notice. This is something they
are going to work on.
Chairman Lindquist asked YHA how the $10 per hour rate increase will affect the skaters. Mike
Marhula reported that he estimates the range is $20-50 per child. Member Sorensen clarified that
YHA skaters would account for $9,000 out of the $20,000 annual increase if the rates go up as
requested in the budget at $10 per hour.
YHA was happy to report that they have a number of teams returning and addition of 4-6 new teams
added which is increased activity. In 2012 there were 31 teams and Adam Smiglewski stated with the
new teams they are looking at 2013 with a total of 34-36 teams needing ice time.
STMA Arena Board Meeting - April 8, 2013 2
YHA, in closing, discussed the potential of the second sheet of ice, alternate renters and they are just
waiting for the feasibility report results so they can move forward with their proposal in April.
Adiourn
Members Wagner/Sorenson moved to adjourn at 7:26 p.m. All voted aye.
Attest:
Tina Lannes, City Finance Director
STMA Arena Board Meeting - April 8, 2013 3
City of
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STMA Budget to Actual March 2013 (Cash Basis)
2013 Proposed
Budget rate
2013
increase no
March 2013
Actual YTD
%
asst. mgr
Actual
3/31/13
Annual
Income
Ice Rental
$262,000.00
$68,026.25
$132,455.00
50.56%
Concessions
$32,000.00
$1,136.00
$16,478.25
51.49%
Other Revenues (Advertising/LMC/ins
claims)
$12,000.00
$0.00
$7,924.00
66.03%
Vending
$1,300.00
$158.19
$563.08
43.31%
Open Skate/Hockey, etc
$10,000.00
$209.90
$789.95
7.90%
Interest
$1,200.00
$0.00
$0.00
0.00%
Misc Revenue
$1,200.00
$526.10
$1,260.05
Total Income
$319,700.00
$70,056.44
$159,470.33
49.88%
Expenses
Salaries, wages, taxes & Benefits
$112,547.61
$8,320.02
$34,574.32
30.72%
Supplies (Office, misc)
$1,100.00
$69.47
$918.49
83.50%
Supplies (Concession)
$13,750.00
$741.02
$4,452.35
32.38%
Fuel, Misc
$2,000.00
$242.58
$485.16
24.26%
Professional Services
$8,800.00
$2,977.58
$5,887.47
66.90%
Sales Tax
$3,200.00
$654.74
$1,502.88
46.97%
Telephone
$1,100.00
$75.79
$227.89
20.72%
Electric
$75,000.00
$29.87
$5,857.61
7.81 %
Gas
$8,000.00
$1,232.23
$2,559.51
31.99%
Water
$15,000.00
$3,529.31
$8,086.68
53.91%
Refuse
$2,200.00
$0.00
$358.16
16.28%
Insurance
$15,000.00
$0.00
$23.00
0.15%
Administration
$11,350.00
$945.84
$2,837.52
25.00%
Misc.
$3,000.00
$0.00
$15.07
0.50%
Depreciation
$43,000.00
$0.00
$0.00
0.00%
Repair Maintenance — Machinery
$10,000.00
$0.00
$1,414.84
14.15%
Repair Maintenance — Building
$25,000.00
$403.65
$9,990.08
39.96%
Total Operating Expenses
$350,047.61
$19,222.10
$79,191.03
22.62%
Net Income/Loss ($30,347.61) $50,834.34 $80,279.30
STMA Arena Board Meeting - April 8, 2013 4
STMA CASH BALANCES AND RECEIVABLES
March 31, 2013
Cash Balance Operations
Cash Balance 1/1/13 $131,405
Add Revenues $159,470
Less Expenses $ 79,191
Add in Depreciation $ -
Less payables booked 2012 Pd 2013 $ 10,672
Cash Balance 3/31/13 $201,012
Restricted Cash (depreciation) $78,457
Cash for operations $122,555
Total Cash Balance 3/31/13 $201,012
Accounts Receivable
March 31, 2013 - $0 (yet to be billed)
Cash Balance Dedicated Capital Improvement Fund
Arena Owner Dedicated Cap. Imp. Fund
Beginning Balance 1/1/13 $20,000
2013 contribution rec. by St. Michael $0
2013 contribution rec. by Albertville $0
2013 contribution rec. by STMA Schools $0
Balance 3/31/13 $20,000
STMA Arena Board Meeting - April 8, 2013 5
STMA Vendor Check Detail Register
March 2013
Check Amt Invoice Comment
10100 Premier Bank
Paid Chk# 001788E 2/28/2013 WATSON COMPANY
E 810-00000-252 Food/Consessions For Resale $559.83 823360 STMAArena Candy bars, Chips, Slush Pupp, Dart, Straws,
Pretzels
Paid Chk# 001795E 2/28/2013 RANDYS ENVIRONMENTAL SERVICES
E 810-00000-384 Refuse/Garbage Disposal $237.54 March 2013 STMA Arena Garbage Service
Paid Chk# 001819E 3/18/2013 WATSON COMPANY
E 810-00000-252 Food/Consessions For Resale $159.35 823838 STMAArena Candy Bars, Chips, Pretzel, Cookies,
Paid Chk# 001830E 3/18/2013 WRIGHT-HENNEPIN COOP ELECTRIC
E 810-00000-381 Electric Utilities $29.87 05014270100-04 STMAArena Fire Panel Monitoring
Paid Chk# 001831E 3/18/2013 FERRELLGAS
E 810-00000-212 Motor Fuels $242.58 5001264547 STMAArena Fuel
Paid Chk# 001883E 3/30/2013 CITY OF ALBERTVILLE
E 810-00000-412 Building Rentals/Admin Fee $945.84 3/12 admin fee
Paid Chk# 001884E 3/20/2013 MN DEPARTMENT OF REVENUE
E 810-00000-315 Sales Tax $382.00 sales tax
Paid Chk# 001885E 3/15/2013 CITY OF ALBERTVILLE
E 810-00000-382 Water Utilities $3,529.31 wtr bill
Paid Chk# 031833 3/4/2013 ARAMARK UNIFORM SERVICES
E 810-00000-405 Repair/Maint - Buildings $10.69 629-7682924 STMAArena Mats, Mops, Laundry Bag
E 810-00000-405 Repair/Maint - Buildings $10.69 629-7687727 STMAArena Mats, Mops, Laundry Bag
Paid Chk# 031834 3/4/2013 BANYON DATA SYSTEMS
E 810-00000-300 Professional Srvs (GENERAL) $689.35 148892
Paid Chk# 031843 3/4/2013 CROW RIVER LIGHTING SERVICES
E 810-00000-405 Repair/Maint - Buildings $3,038.19 1599
Paid Chk# 031848 3/4/2013 ELITE LOCK & KEY
E 810-00000-405 Repair/Maint - Buildings $755.87 80165
STMAArena WIN POS Addt'I Entity & Win Inventory Mgmt
Support
STMAArena (3) LED Floodlights, (6) LED Wall Packs and
Installation, Lamp & Ballast Recycling
STMA Arena Repair Exterior Steel Doors
Paid Chk# 031854 3/4/2013 LEAGUE OF MN CITIES INS TRUST
E 810-00000-361 General Liability Ins $23.00 24544 STMA Arena Workers Comp Final Audit 12/01/12
Paid Chk# 031859 3/4/2013 PICK ELECTRIC
E 810-00000-405 Repair/Maint - Buildings $200.00 Feb 2013 STMAArena Install new LED emergency light and photo
Paid Chk# 031860 3/4/2013 PRECISION AUTO REPAIR
E 810-00000-404 Repair/Maint - Machinery/Equip
Paid Chk# 031862 3/4/2013 SCR, INC - ST. CLOUD
E 810-00000-405 Repair/Maint - Buildings
$110.11 19865 STMAArena Zamboni Repair
$583.33 261746 STMAArena March Maintenance
STMA Arena Board Meeting - April 8, 2013 6
Check Amt Invoice
Comment
Paid Chk# 031863
3/4/2013 STEP SAVER INC
E 810-00000-405
Repair/Maint - Buildings
$161.09 66534
STMA Arena Bulk Salt & Resin Cleaner.
Paid Chk# 031864
3/4/2013 STRATEGIC EQUIPMENT AND SUPPLY
E 810-00000-580
Capital - Other Equipment
($300.00) 126187
STMA Arena Credit for Freezer Damage
E 810-00000-580
Capital - Other Equipment
$2,350.54 1976515
STMA Arena Freezer & Setup.
Paid Chk# 031867
3/4/2013 VIKING SEWER & DRAIN CLEANING
E 810-00000-405
Repair/Maint - Buildings
$144.00 35790
STMA Arena Augured Toilet to Clear Clog
E 810-00000-405
Repair/Maint - Buildings
$407.50 35794
STMA Arena Repair 4 Toilets
Paid Chk# 031869
3/4/2013 XCEL ENERGY
E 810-00000-381
Electric Utilities
$5,768.00 357262351
STMA Arena January 2013
Paid Chk# 031870 3/4/2013 ZEP SALES & SERVICE
E 810-00000-200 Office Supplies (GENERAL) $558.72 9000025531 STMA Arena Trash Bags, Toilet Tissue, Ice Melt, Cleaners,
Urinal Screens, Odor Eliminators, Hand Soa
E 810-00000-200 Office Supplies (GENERAL) $290.30 9000114149 STMA Arena Hand Soap, Paper Towels, Toilet Tissue,
Paid Chk# 031876
3/18/2013
ALS COFFEE
E 810-00000-252
Food/Consessions
For Resale
$698.56 136457
STMA Arena Coffee, Creamer, Hot Cups, Lids & Clutches
E 810-00000-252
Food/Consessions
For Resale
($358.56) 1400
STMA Arena Credit for buying our coffee & supplies on
Paid Chk# 031878
3/18/2013
ARAMARK UNIFORM
SERVICES
E 810-00000-405
Repair/Maint
- Buildings
$10.69 629-7692506
STMA Arena Mats, Mops, Laundry Bag
E 810-00000-405
Repair/Maint
- Buildings
$10.69 629-7697331
STMA Arena Mats, Mops, Laundry Bag
Paid Chk# 031879 3/18/2013 BALLARD KING & ASSOCIATES LTD
E 810-00000-300 Professional Srvs (GENERAL) $2,500.00 4243 Arena Operations Update
Paid Chk# 031880 3/18/2013 BCBS OF MINNESOTA
E 810-00000-130 Employer Paid Ins (GENERAL) $776.75 CI261-10-0- Emp Health Ins
Paid Chk# 031881 3/18/2013 BERTELSON
E 810-00000-200 Office Supplies (GENERAL)
Paid Chk# 031883 3/18/2013 CARD SERVICES(ARENA)
E 810-00000-252 Food/Consessions For Resale
Paid Chk# 031884 3/18/2013 CENTERPOINT ENERGY
E 810-00000-383 Gas Utilities
$69.47 OE-312522-1 STMA Arena Ink Cartridge
$27.35 M30603305 STMA Arena Concessions
$1,232.23 53901310- STMA Arena 5898 Lachman Ave NE
Paid Chk# 031887 3/18/2013 CHARTER COMMUNICATIONS
E 810-00000-321 Telephone $75.79 0131702-March STMA Arena Telephone
Paid Chk# 031888 3/18/2013 CITY OF OTSEGO
E 810-00000-405 Repair/Maint - Buildings $64.29 031113 STMA Arena No Arena Parking Signs
Paid Chk# 031890
3/18/2013 COCA COLA ENTERPRISES BOTTLING
E 810-00000-254
Soft Drinks/Mix For Resale $214.32 118197517
Paid Chk# 031893
3/18/2013 DJS TOTAL HOME CARE CTR-ARENA
E 810-00000-405
Repair/Maint - Buildings $17.98 67782
Outdoor
STMA Arena Dt. Coke, Dasani Water, Powerade
STMA Arena Command Replacement Strips, Scotch
STMA Arena Board Meeting - April 8, 2013 7
Check Amt Invoice Comment
Paid Chk# 031899 3/18/2013 MAXIMUM SOLUTIONS, INC
E 810-00000-405 Repair/Maint - Buildings $300.00 13970 STMA Arena MaxEnterprise Software Annual Service
Agreement
Paid Chk# 031900 3/18/2013 METLIFE-GROUP BENEFITS
E 810-00000-130 Employer Paid Ins (GENERAL) $22.61 4841635 Emp Life, Dental, Stdis
E 810-00000-130 Employer Paid Ins (GENERAL) $127.50 March 2013 Emp Life, Dental, Stdis
810 STMA ARENA
$26,677.37
STMA Arena Board Meeting - April 8, 2013 8
A,lbertville
Smar roum Urq. W9 aw uf.. SSTMIA
MANAGER' GENERAL UPDATE
Date: April 3, 2013
To: STMA Arena Board
From: Grant Fitch, STMA Arena Manager
ARENA RENTAL HOURS — MARCH
Name
Youth Hockey
Adult Hockey
High School Boys/Girls
Public Skating
Private rentals
Learn To Skate
Total hours
Prime -time
57.75 hours
4 hours
0 hours
44.5 hours/$0
1 hours/$145 hr
0 hours/$145 hr
107.25 hours
A
of
�. Michael
L
Off-peak
Arena Roof:
On Wednesday, March 27, staff met with Tom Betti of the 292 Design Group and Mike Woehrle
of Nelson-Rudie & Associates, as well as, Building Officials Paul Heins and Jim Hildebrandt.
The group opened the ceiling in two areas and found the insulation on the north side of the
building to be wet throughout (approx 10 to 12 inches) with frost on the underside of exterior
metal roof. On the south side of the building the insulation was wet on the top 2 to 4 inches, but
not all the way through, which is most likely due to the south sun. 292 and Nelson-Rudie are
preparing a letter to memorize the findings, as well as, to offer options for mitigation. Based on
the findings, it is almost certain the leaking issues are due condensation and humidity control.
Advertising:
Chris with Franklin Outdoor Advertising sold the Olympia spot to AAA Movers. The Ad was
installed on Friday, March 22nd
STMA Arena Board Meeting - April 8, 2013 9
Ice Time booked for June, July and August 2013:
LTS — 21 hours
High School — 106 hours
D-5 officials — 7.5 hours
Girls Summer Ice — 7.0 hours
THDP — 69 hours
YH/Private — 9 hours
Total 219.5 hours
Ice Removal:
The ice will be removed on April 9th and open again on June 8th 2013. This information has been
posted on the arena's website. Please check back for Open Hockey / Open Skate Schedules
staring in June.
Open Skate Hours: March 1st through April 8th 22.5
Open Hockey Hours: March 1st through April 8th 31.0
Total 53.5 Hours
2013 Spring (Ice Out) Building Maintenance:
1. General building painting
2. Paint practice nets / replace netting and pads
3. Clean rink glass both sides
4. Clean inside of rink Boards
5. Bleacher detailed cleaning
6. Repair Zamboni door left side
7. Miscellaneous and routine building maintenance
8. Olympia maintenance/repair
9. Compressor maintenance/repair
General Operations: In general, all operations appear to be going fine.
FCDays Men's 4 on 4 Tournament: Games have been scheduled for Saturday June 81h and
Sunday June 9, 2013.
STMA Arena Board Meeting -April 8, 2013 10
A1bertville
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MEMORANDUM
Date: Monday, April 8, 2013
To: STMA Arena Board
From: Tina Lannes, City of Albertville Finance Director
Re: Advertising
A
of
�. Michael
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The STMA Arena is currently under contract with Franklin Outdoor to handle the advertising at
the arena. The current contract was a three year term which ends on August 2, 2013. The
contract is set up to automatically renew unless it is terminated in writing at least 30 days before
expiration.
Knowing there have been discussions involving Youth Hockey managing arena advertizing, two
options concerning the contract are as follows:
Option 1: Continue/renew the Franklin Outdoor Advertising contract
Option 2: Notify Franklin Outdoor of contract termination.
If the Board does not intend to utilize or is unsure of the services it desires from Franklin
Outdoor, it is advised that Franklin Outdoor be provided written notice of termination as soon as
possible. Franklin Outdoor would have to receive the notice no later than July 1, 2013 otherwise
the contract automatically renews for another three years.
STMA Arena Board Meeting - April 8, 2013 11
20092 Edison Circle East Clearwater, MN 55320
320.558.3000 - 800.221.4144 • fax 320.558.3004
"Outdoor Advertising SELLS for you all day, every day."
OUTDOOR ADVERTISING
THIS AGREEMENT is made on the _2_ day of August, 2010, by and between Keith A. Franklin
DB/A Franklin Outdoor Advertising and STMA Arena Inc.
NOW, THEREFORE, the parties agree as follows:
1. Franklin Outdoor Advertising agrees to:
a. Sell advertising space for the STMA Arena Inc.
b. Administrate yearly contracts (new and renewals).
c. Handle collections.
d. Print/produce all advertisements including, but not limited to banners,
dasherboard, on -ice ads and ice resurfacer at quoted rates.
e. Arena will be paid monthly based on revenues paid to Franklin Outdoor
for the prior month.
f. One Hundred Twenty Five Dollars ($125.00) will also be provided for
lexan material (when new material is needed).
2. STMA Arena Inc. agrees to:
a. Install all advertisements in a timely manner.
b. Repair and maintain lexan on dasherboard ads.
c. Repair and maintain cable system for banner ads.
This agreement is for a term of Three (3) years and will automatically renew unless a
notice of termination is given within Thirty days (30) prior to the expiration of this
agreement.
Franklin Outdoor Advertising will pay STMA Arena Inc. Sixty (60) percent of all advertising
income billed and collected for each season. Franklin Outdoor Advertising will also receive their
dasherboard advertising without charge for each season during the term of this agreement.
Franklin Outdoor Advertising will pay STMA Arena Inc. Eighty (80) percent of all advertising
income received from signed and paid contracts submitted to Franklin Outdoor Advertising from
STMA Arena Inc.
If STMA arranges a trade of services with a contractor/vendor in exchange for advertising,
Franklin Outdoor would not receive a commission. STMA would be responsible for the
agreement with the contractor/vendor and Franklin Outdoor would only be involved in producing
the sign for the advertisement.
IN WITNESS WHEREOF, the parties do hereby set their hands and seals on the date set
forth above.
Ke' A. Franklin (Franklin Outdoor Advertising)
r7L � ke��
Larry Kruse Arena Inc.)
This document was prepared by:
Franklin Outdoor Advertising
20092 Edison Circle E.
Clearwater, MN 55320 STMA Arena Board Meeting - April 8, 2013 12
BAT,T,ARD*KING
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
[�I Executive Summary
Background:
W
Ballard*King and Associates was contracted by the City of Albertville to provide an
assessment of the feasibility to add a second sheet of ice to the STMA Arena. Ballard*King
and Associates (BKA) is a recreation facility planning and operations consulting firm based
out of Denver Colorado. It should be noted that BKA has nothing vested in the outcome of a
decision to expand the STMA Arena other than providing useful tools to help with the decision
making process.
Market Analysis:
�-i Although the primary focus of this project is to assess the feasibility of adding a second sheet
of ice to the STMA Arena the study reviewed the market conditions of the general service
h+�l/ area. The STMA Arena primary service area population saw rapid growth during the early to
mid-2000's until the recession slowed growth. The St Michael's/Albertville area growth seems
to be driven by people moving from the inner rings of the Twin Cities metro area. The
demographic profile of the community indicates that the age group distribution is somewhat
mixed. There is a significantly higher concentration of under 5, 5-17, and 25-44 age groups
than the national level. At the same time the percent of the 18-24 and over 45 age groups is
�I lower than the national level. This information coupled with the higher percentage of young
children validates there are a larger number of families with young children in the service area
than found on a national level. The median age of the service area is significantly younger than
the national level and the median household income is significantly higher than the than the
national level. Age and income are two determining factors that influence people's
participation in recreation activities, especially ice hockey. The demographic profile of the
service area also suggests a generally ability to pay for a relatively expensive sport like ice
hockey.
There are other ice skating facilities in the general area that will be impacted by adding a
second sheet of ice to the STMA Arena. The youth hockey association currently buys an
additional 490 hours of ice time on a seasonal basis beyond their use of STMA Arena. It will
be a challenge for the other rink operators in the area to overcome and make up the 490 hours
the STMA arena will be removing form the market place. This all adds up to a general
condition that reflects a buyer's market. The primary reason for the buyer's market is that there
STMA Arena Board Meeting - April 8, 2613 `13 1 of 14
BALLARD*KtNG
l� & ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
are a significant number of ice rinks in the area. Our research discovered 35 sheets of ice
within a 45-minute drive.
Service Area Map
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Black dots indicate single rinks
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page 2 of 14
STMA Arena Board Meeting -April 8, 2613 `14
BAT,T,ARD*KING
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
When an over saturation or supply exceeds the demand you have a buyer's market. Simply
stated, the customers can effectively have rinks compete against one another based on ice time
�j schedule and price. This is occurring in the Albertville area. Generally it is more difficult to
sell non -prime time during a buyer's market. The presence of other service providers in service
area will not impact the usage of the STMA Arena during the prime hockey season since the
population served by the STMA Arena is concentrated in St. Michael and Albertville area.
However, the demand for ice time does not appear large enough on a year around basis to
support the operation of two sheets.
The manager of the Rogers Ice Arena indicated that the impact of another sheet of ice in the
general area would reduce/shrink the amount of non -prime ice time sold and suggests that
another rink will shrink the secondary market area for all the area providers.
The youth hockey program is in a slight growth mode although the total number of players is
�j about the same as last year. The youth hockey association reports that the ice hockey program
has grown to around 400 participants from a level of about 150 participants in 2001. The
W growth in youth hockey corresponds to the growth in population of the St. Michael and
Albertville area over the same time period. The cost to play youth hockey is about $1,500 per
season for a Bantam age player. This fee does not include equipment, tournaments or travel
costs. The fact that the youth hockey association has managed to grow slightly during the
recession speaks to the strength and overall household income levels. When the economy came
to grinding halt the participation in youth hockey remained strong.
The population of the service area has grown over 110% since 2000. A closer look at the
demographic profile suggests that a good portion of the growth is people moving further away
from the Twin Cities, in particular white middle to upper middleclass families. This
demographic population is positioned financially to participate in ice hockey. The cost to play
youth hockey ranges from $1,400 to $1,600 (excluding U8 age group). This fee does not
include equipment, extra tournaments or travel costs.
STMA Arena Board Meeting - April 8, 2613 `15 3 of 14
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& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
Operations:
Assembling the operation plan presented a challenge in balancing the need to be conservative
to protect the governmental agencies involved while at the same time recognizing the
enthusiasm from the youth hockey and acknowledging the potential for significantly
increasing the volume of ice rentals from a second sheet of ice. As a result, the operation pro -
forma reflects a compromise position, especially with revenue projections. Specifically, ice
arena rental have been calculated based on a schedule that reflects current usage and the
volume of ice time being rented by the Youth Hockey Association from other ice rinks in the
area.
There is some inherent cost savings associated with operating two sheets of ice, especially
from a staffing perspective. In addition to staff efficiencies the operating pro -forma assumes
that the expanded ice sheet will be a seasonal operation. There is nothing occurring in the
�j general area that leads us to believe there is enough demand to justify keeping two sheets open
on a year around basis. Some budgetary line items doubled, like insurance and propane, while
W other line items increase on an incremental basis, like water treatment (cooling tower), gas,
water/sewer, telephone, building maintenance.
One recommendation is for the STMA Arena to enter into a long term agreement with the
youth hockey association to commit to a specific number of hours during the peak season. This
will provide a strong level of assurance that the ice time and cash flow will be guaranteed.
The operating pro -forma for the additional sheet of ice reflects and incorporates the efficient
method in which the STMA is managed and operated. It is clear from benchmarking with other
community skating facilities that the STMA is operated much more efficient that most other
ice skating facilities in the area. However, the STMA cannot functionally operate a second
sheet of ice without additional staff to accommodate the increase volume of business and
adequately cover the hours of operation for a two -sheet facility.
Summer Operation:
The STMA Arena will be closing for an extended period this spring to provide some relief and
mitigation of the permafrost build up that has occurred over the years. Closer examination into
normal summer operation indicates that the primary user of summer ice is the high school
hockey coach that operates a hockey camp for a two -month period. Typically coach Johnson
rents about 12 hours per week. There are other miscellaneous rentals that occur but the demand
STMA Arena Board Meeting - April 8, 2613 `16 4 of 14
BAT,T,ARD*KING
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
for ice time drops off significantly during the summer months. To illustrate, STMA has about
336 hours of useable ice available per month in the summer (reasonable hours). Based on 2012
�j statistics, STMA recorded a range from 80-99 hours per month of rentals during that period of
time which equates to a 24% to 29% occupancy rate. In contrast, the occupancy rate for ice
time during the hockey season is 85%-96%. One group, Transitional Development Hockey
(TDH), operates an elite level program that uses about 70-80 hours of ice time in the
spring/summer period. This group did not rent ice from the STMA Ice Arena in 2012 because
TDH shops area rinks to find the lowest ice time rate and found a lower ice rental rate at
another rink.
Strictly from a business model perspective keeping the ice rink open in the summer (April -
August) should be examined. Without question this period of time is the most expensive time
of the year to operate the ice arena. It is not uncommon to have monthly electric cost exceed
$8,000 in the summer months. The time of the year that is most expensive to operate also
�j happens to be the time of year with the least demand for ice time. Ice rental rates from prime
time drop from $185 per hour during the hockey season to $145 per hour during the summer
W months. The lower demand for ice time in the summer has created a market condition that
requires ice arena operators in the area to reduce summer ice rental rates in an effort to
generate sales. Operating the STMA Arena in the summer, with operating costs at their highest
and the rental rates discounts the deepest, is a formula for losing money.
However, it should be noted that the availability of summer ice for hockey camps and player
development is critical for the STMA program and High School team to stay competitive with
other area schools. It seems many of the successful high school programs in the area have
summer development programs in place. Unfortunately for the STMA operation providing this
opportunity requires subsidizing the program to keep the ice available in the summer.
Closer analysis that examines a comparison of the 2012 fiscal year without ice from April
through the end of August concludes that the STMA Arena would have increase their cost
recovery rate to 112% and generated an operating surplus of $30,632 if summer ice was not
offered.
STMA Arena Board Meeting - April 8, 2613 `l$ 5 of 14
BAT,T,ARD*KING
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
Youth Hockey:
It should be noted that the STMA Youth Hockey Association is forced to go to some of these
area rinks to supplement their need for ice time. It was reported by the hockey association that
40% of the ice time rented by the club annually comes from other rinks in the general area,
primarily Monticello, Princeton, Blaine, Buffalo and St. Cloud. The youth hockey association
submitted the following commitment for ice time if a second sheet of ice were added to the
STMA Arena. It should be noted that the youth hockey ice time request for the second sheet of
ice is about 1,106 hours, or about 42.5 hours per week based on a 26 week season. However,
closer examination of the ice time request from the youth hockey association appears to exceed
the ice time available. The mock-up schedule (page 13 below) indicates that there are only 36
hours of acceptable ice available with a second sheet of ice for youth hockey hours. If the
youth hockey association truly needs an additional 42.5 hours per week they will still have to
�j go outside the immediate area to acquire the 6.5 hours per week that goes beyond the 36 hours
per week that are available to reserve with the second sheet of ice.
W Representation from the youth hockey association reported that the association rents about 492
Q, hours outside of the STMA (see page 14 below). The historical use of outside ice purchased by
youth hockey association compared to the request for ice time for the second sheet of ice is
significantly different. A correspondence from the current President of the STMAYHA
indicates they will commit to 1,106 hours of ice time per season for the second sheet of ice.
This request is 614 hours greater than what the youth hockey association is currently renting
from other ice rinks. It should be noted that the additional 614 hours of ice time request
represents about another $113,590 (based on $185/hr) in ice time costs above and beyond what
the youth hockey association currently rents per year. Without a major fundraising campaign
the increase usage of ice will increase youth hockey fees about $284 per player.
High School Hockey:
Ballard*King and Associates met with the Activities Director from the school district.
Currently the boy's varsity and junior varsity share ice time. An additional sheet of ice will
provide the opportunity for the high school to split the varsity and junior varsity ice time. The
girl's team is a co-op program and the cost for the program is shared with Monticello High
School. The Activity Director reported that the high school would like to increase their ice
time from the current level of 270 hours per season to 450 hours. Currently the cost for ice
time is paid through funding the School District receives from the State of Minnesota. The
STMA Arena Board Meeting - April 8, 2613 `18 6 of 14
BAT,T,ARD*KING
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
amount of funding the School District receives from the State is not likely going to increase
and the probability of increasing the allocation or distribution of the funding that the School
District does receive does not look promising based on other school district needs for the State
funding it receives. This is an important factor because increasing the high school ice time
usage by 180 hours per season will result in an increase of about $26,000 per year. This will
require significant higher activity fees per player ($435), increased share of State funding the
School District receives, or significantly more fundraising by the booster club, or some
combination of the options that covers the increased cost. A more realistic scenario is that the
high school will reduce the number of hours rented because the hours requested extend beyond
the school's budgetary allocation.
STMA Arena Board Meeting - April 8, 2613 `19 I of 14
BAT,T,ARD*KING
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
Operating Pro -Forma
The operations analysis represents a conservative approach to estimating expenses and
revenues and was completed based on the best information available and a basic understanding
of the project. Fees and charges, ice time usage and operating costs utilized for this study were
based on the 2012 operation of the STMA Arena. There is no guarantee that the expense and
revenue projections outlined in the operations analysis will be met as there are many variables
that affect such estimates that either cannot be accurately measured or are subject to change
during the actual budgetary process.
Revenues
The following revenue projections were formulated from information on the specifics of the
project and the demographics of the service area as well as comparing them to a potential ice
rink schedule for a second sheet of ice and the competition for ice time during the summer
months in the area. Actual figures will vary based on the size and make-up of the components
selected during final design, market stratification, philosophy of operation, fees and charges
policy, and priority of use. All revenues were calculated conservatively as a result.
Category
2012 Actual
Second Sheet
Income
Ice Rental
$273,779
$472,489
Concessions
$ 33,631
$ 57,500
Other Rev (Advertising)
$ 8,657
$ 20,657
Vending
$ 1,365
$ 2,750
Open Skating
$ 9,002
$ 27,500
Interest
$ 1,227
$ 1,227
Misc
$ 1,373
$ 1,650
Total
$329,034
$583,773
STMA Arena Board Meeting - April 8, 2613 ` S 8 of 14
BAT,T,ARD*KING
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
Expenditures
Expenditures have been formulated on the costs that were designated by Ballard*King and
Associates to be included in the operating budget for the facility. The pro -forma below does
not reflect a partnership agreement. All expenses were calculated to the high side and the
actual cost may be less based on the final design, operational philosophy, and programming
considerations adopted by staff.
Category 2012 Actual Second Sheet
Expenses
Salaries, wages, taxes & benefits
Supplies Office
Supplies Concessions
Fuel
Professional Services
Sales Tax
Telephone
Electric
Gas
Water
Refuse
Insurance
Administration
Misc
Depreciation
Repair Maintenance - Machines
Repair Maintenance - Building
Debt Service
Total
$108,827
$ 1,057
$ 13,245
$ 1,931
$ 5,742
$ 3,162
$ 1,048
$ 73,796
$ 4,683
$ 13,797
$ 2,066
$ 10,302
$ 11,124
$ 2,202
$ 42,952
$ 7,351
$ 18,913
$ 0
$322,198
$162,685
$ 1,525
$ 22,500
$ 3,200
$ 7,742
$ 4,200
$ 1,200
$129,150'
$ 9,350
$ 27,600
$ 3,250
$ 36,8002
$ 11,500
$ 4,000
$ 122,9523
$ 10,000
$ 23,500
$260,000'
$841,154
' Represents 75% of the existing cost because of more energy efficient equipment.
2 Insurance increased based on the value of the asset being insured by $4M.
s Increase based on straight line depreciation of $4M asset over a 50-year period
4 Based on $4M debt retired over 30 years with a 5% interest rate
STMA Arena Board Meeting - April 8, 2613 ` i 9 of 14
BALLARD*KtNG
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
Expenditure — Revenue Comparison
Category
2012 Actual
Second Sheet
Expenditures
$322,198
$841,154
Revenue
$329,034
$583,773
Difference
$ 6,302
($257,381)
Recovery percentage
102%
69%
This operational pro -forma was completed based on the best information available and a basic
understanding of the project. However, there is no guarantee that the expense and revenue
projections outlined above will be met as there are many variables that affect such estimates
that either cannot be accurately measured or are not consistent in their influence on the
budgetary process.
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STMA Arena Board Meeting -April 8, 01 � 2
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Recreation Facility Planning and Operation Consultants
Staffing levels:
Positions Facilitv B
Full -Time
Assistant Manager $ 3500
Benefits (30% of salaries) $ 16,843
Total Full -Time Personnel $ 51,843
Note: Pay rates were determined based on the pay scale for the City of Albertville. The
positions listed are necessary to ensure adequate staffing and provide for full-time staff support
to the operation. The wage scales for both the full-time and part-time staff positions reflect
estimated wages for 2013.
Positions Hours/Wk Facility Budget
Part -Time
Concessions (26 wks) 8 hrs/wk $ 1,872
($9.00/hr)
Salaries
Benefits (7.65% of part-time wages)
Total Part -Time Salaries
$ 1,182
$ 143
$ 2,015
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STMA Arena Board Meeting -April 8, 01 � 2
BAT,T,ARD*KING
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
Revenue Worksheet
The calculations for ice time revenue (new) was derived by the following
Youth Hockey 832 hrs@$185/hr5 $168,350
High School Hockey 80 hrs@$1656 $ 13,200
Private Rentals 104 hrs@$165/hr $ 17,160
Total New Ice Rental Revenue $198,710
Conclusion:
BKA included debt service estimation into the operation calculation. At the time of developing
the operation plan there was still some discussion occurring on the program, size and materials
for the expansion and a specific project budget has not been developed. There are several
factors that play into calculating debt service, including the length of time, amount of debt,
bond rating and bonding capacity.
It is the opinion of Ballard*King and Associates that the market size and demand for ice time
is not large enough in St. Michael/Albertville to operate as a true enterprise fund that covers
the cost of operation plus debt service given the current market conditions, ice rental rates and
capacity of the user groups to pay higher rental fees.
The summary of probable operating costs and revenues below indicate that the STMA Arena
will generate a net loss of $257,381. City Council must decide if the need for expanding the
ice program justifies the need for increasing general fund support for the operations.
s Represents 90% of total ice time available for the 26 week prime season
6 Represents a transfer of non-STMA hours and allows for moderate growth of activity hours. Hours that go beyond
the school's budgetary allocation will require fundraising efforts to support ice time beyond 80 hours per season.
�e J2 of 14
STMA Arena Board Meeting - April 8, 01
BALLARD*KtNG
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
Potential Ice Schedule (26 wks)
STMAYHA Mock Schedule for a Second Sheet of Ice?
Start Time
Monday
Tuesday
Wed.
Thursday
Friday
7:00 AM
8:15 AM
9:30 AM
10:45 AM
12:OOPM
1:15pm
2:30pm
3:45pm
NWC -Vars
NWC -Vars
NWC -Vars
NWC -Vars
NWC -Vars
5:30pm
NWC —JV
NWC - JV
NWC - JV
NWC - JV
NWC - JV
6:45pm
PWA/PWB
MITE
SQB2/SQC
10UA/10UB
12UA/12UB
8:OOpm
PWB2/PWC
SQA/SQB
PWA/PWB
PWB2/PWC
14UA/14UB
9:15pm
BA/13131
12UA/12UB
BA/13131
14UA/14UB
PWB2/PWC
Start Time
Saturday
Sunday
8:00 AM
MITE
MITE
9:15 AM
MITE
MITE
10:30 AM
LTS
LTS
11:45PM
Youth Game
Youth Game
1:OOpm
Youth Game
Youth Game
2:15pm
Youth Game
Youth Game
3:30pm
Youth Game
Youth Game
4:45 PM
Youth Game
Youth Game
6:00 PM
Game/Scrim
Game/Scrim
7:15 PM
OH SQ/10U
OH PW/12U
8:45 PM
Open
Open
Schedule was developed by representatives from the STMAYHA.
P5, e13of14
STMA Arena Board Meeting - April 8, 01 2
BAT,T,ARD*KING
& ASSOCIATES LTD
Recreation Facility Planning and Operation Consultants
Ice Request for Second Sheet of Ice
Sheet 2 - Projected ice usage by STMAYH ( draft)$
Description Estimated hours
Current usage on others ice
Initiation level - outside ice moved to 192
rr ,,
I•�I
sheet 2
U8 & U10 girls - outside ice moved to 84
sheet 2
Boys youth hockey - practice ice time 67
rented at other arenas
Boys youth hockey - scrimmages at other 62
arenas
�j
Girls youth hockey - practice ice time 87
rented at other arenas
492
L��•/•I
W
Total current usage on others ice shifted to sheet 2
Additional usage
Tourneys
Might - 1 30
Squirt - 1 30
Peewee - 1 30
Bantam - 1 30
Girls U8 - 1 30
Girls U10 - 1 30
Girls U12 - 1 30
Girls U14 - 1 30
Assume YH only holds 4 of the potential 8 per year
120
Initiation and U8 ( 15 teams ) each taking on average 1/4 hour
98
per week. ( 15 x 26 weeks x 1/4)
18 teams other than initiation and U8 each taking one more hour
396
per week for 22 of 26 weeks = 396 ( 18 X22 weeks)
Total potential demand by YH
1106
s Preliminary draft was developed by representatives of STMAYHA.
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STMA Arena Board Meeting - April 8, 01 2