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Home My WebLink AboutWK April 9, 2002 - ~ Cv:LJ lJýUJí:u) 5-7-6)... CITY OF ANDOVER 1685 CROSSTOWN BOULEVARD NW . ANDOVER, MINNESOTA 55304 . (763) 755-5100 FAX (763) 755-8923. WWW.CI.A.'IDOVER.MN.US JOINT CITY COUNCIL MEETING SPORTS COMPLEX TASKFORCE COMMUNITY CENTER FINANCING WORKSHOP April 9, 2002 - 6:30 p.m. AGENDA 1. Call to Order 2. Approve Agenda 3. Facility Financing Options - Ehler-Š & Associates 4. Financial Analysis and Modeling_Scenarios - Finance Director Dickinson _. 5. Community Center Financing Perspectives - Jon Gurban, Executive Director, MN Recreation & Park Association/Mark Ruff, Ehlers & Associates 6. Partnership Discussions with the YMCA; Staff Update 7. Facility Components:'-' Council Discussion 8. Capital Campaign - Staff Update 9. Next Steps 10. Adjourn ~ cv.v L~ Sr¡.·o.)... CITY of ANDOVER JOINT CITY COUNCIL/SPORTS COMPLEX TASK FORCE MEETING TUESDAY, APRIL 9,2002 - MINUTES A joint meeting of the Andover City Council and Sports Complex Task Force was called to order by Mayor Mike Gamache at 6:35 pm, Tuesday, April 9, 2002 at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Councilmembers Present: Don Jacobson, Mike Knight, Julie Trude Councilmembers Absent: Ken Orttel Task Force Members Present: Valerie Holthus, Frank Kellogg, Dave Blackstad, Mark Hedin, Tony Howard, Dean Daninger Also Present: City Administrator, John Erar Finance Director, Jim Dickinson Others Motion by Jacobson seconded by Knight to approve the agended as written. Motion carried unanimously. FACILITY FINANCING OPTIONS Mark Ruff, Ehlers and Associates explained that there are two financing options available, a voted General Obligation Bond or a Lease Revenue Bond. Lease Revenue Bonds are very common for recreational facilities, city halls and fire trucks. A Lease Revenue Bond has a debt service reserve which can be drawn upon to make payments. Interest is earned on the reserve. The costs are a little higher than a General Obligation Bond. Any amount over a million dollars applies to the city's debt limit. With a General Obligation Bond, cornmercial and residential properties pay the same tax. On a Lease Revenue Bond cornmercial properties pay about double what residential properties pay in taxes. Councilmember Jacobson questioned the payback for each over the 20 year life of the bond. Jim Dickinson, Finance Director, noted that for Lease Revenue Bonds it would be about 7.6 million dollars and with General Obligation Bonds it would be about 6.3 million dollars. Tony Howard mentioned that they had talked to a county commissioner about bonding through the county. Mr. Ruff stated that there would be no difference in the costs by going through the county. John Erar asked ifthe debt service reserve is held until the end of the bond period, would the difference be smaller between the two types of bonds. Mr. Ruffnoted it would not be. . Joint City Council/Sports Complex Task Force Meeting April 9, 2002 - Minutes Page 2 FINANCIAL ANALYSIS AND MODELING SCENARIOS Mr. Dickinson reviewed eight scenarios with different options using General Obligation Bonds and Lease Revenue Bonds. He noted that Park dedication fees for Andover Station ($500,000.00) are included in each scenario. The scenarios with donations assume donations of two million dollars. All scenarios assume a city owned and managed facility. Lease Revenue Without Donations - this is a full facility, including swimming pool, ice arena and field house. A brief discussion was held on the YMCA or another entity taking over the aquatic portion of the facility. Lease Revenue With Donations - a $125,000 residential property would pay $27.00 per year in increased taxes with this scenario and a $500,000 commercial property would pay $198.00 per year. Lease Revenue Without Swimmini! Pool Without Donations - $350,000 - $400,000 in expenses are removed because of the removal of the swimming pool. There would be a deficit until 2009 with this scenario. Lease Revenue Without Swimmini! Pool With Donations - the cash flow would be positive in the first year of operation. General Oblii!ation Bonds Without Donations - this is a full facility. There would be a deficit until 2015. Mr. Ruff explained that when the calculations were run they assumed a 20 year bond which is why there is higher debt service between the two options. General Oblii!ation Bonds With Donations - The deficit for this scenario ends in the year 2011. General Oblii!ation Bonds Without Swimmini! Pool Without Donations - deficit until 2007. General Oblii!ation Bonds Without Swimmini! Pool With Donations - there is no tax impact with this scenario. Joint City Council/Sports Complex Tax force Meeting April 9, 2002 - Minutes Page 3 COMMUNITY CENTER FINANCING PERSPECTIVES John Gurban, Executive Director, Minnesota Recreation and Park Association noted that their primary goal is education. The number one thing people participating in surveys want is trails and open spaces. The second is community centers. Mr. Gurban noted that leisure pools are more profitable than competitive pools. Education is needed so people understand what leisure pools are. Mr. Gurban felt that lease revenues bonds are good as well as naming rights. He noted that sales taxes are becoming increasingly popular. He did feel that you must be careful if you have a public/private relationship. You must make sure that your goals are being addressed. Regarding lease management, Mr. Gurban noted that the YMCA does this quite often; however, you must belong to the YMCA in order to use the facility. Your fee schedule should be kept intact. If there are needy families who cannot afford to use the facility, there are service agencies that can identify these families and arrange for lower fees. He encouraged some sort of donation program. PARTNERSHIP DISCUSSIONS WITH THE YMCA; STAFF UPDATE Mr. Erar stated that they have been meeting with the YMCA and they are interested in partnering with the city. As soon as information is available it will be sent to Council and the Task force. frank Kellogg asked Mr. Erar to find out the usage potential for the School District. FACILITY COMPONENTS Mayor Gamache felt that the city should continue with the three components of the facility, the field house, swimming pool and ice arena. Councilmember Knight liked the idea of naming rights for different rooms in the facility. Councilmember Jacobson wanted to make sure that we are not overlooking any components for the facility. CAPITAL CAMPAIGN-STAFF UPDATE It was noted the Capital Campaign Committee will be meeting Tuesday evening. Mr. Erar noted that a special EDA meeting has been scheduled for Thursday, April 11 th at 6:00 pm. NEXT STEPS Mayor Gamache noted that a public meeting on the facility will be held in May. . Joint City Council/Sports Complex Tax Force Meeting April 9, 2002 - Minutes Page 4 REPLA CEMENT COST ANALYSIS FOR EXISTING PARK FACILITIES Dave Blackstad expressed concern regarding the loss of the soccer field behind City Hall and the replacement costs for existing facilities, such as the soccer field, tennis courts and hockey rink. Mr. Erar reviewed the improvements that are listed in the Capital Improvement Plan regarding park improvements. He asked if we should be in contact with the School District regarding their potential commitment regarding their use ofthe ice arena component of the sports complex. Motion by Jacobson, seconded by Knight to adjourn. Motion carried unanimously. Meeting adjourned at 9:55 P.M. - Respectfully submitted, iLL {V¿ Vicki Volk City Clerk . -.-