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HomeMy WebLinkAbout13.C.1. Community Center Improvement Information 13. C · I. CITY OF SHAKOPEE Memorandum TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: Community Center Improvement Information DATE: May 4,2010 Comment: Introduction: The Council is asked to discuss possible appointment of a study committee to look at the various components of the proposed Community Center improvements that have been recently proposed. Background: At the April 20th City Council meeting, a presentation was made by "Shakopee Recreation: Bringing People Together" (SR:BPT) group, which is chaired by Brad Tabke. The presentation supports improvements to the Community Center consisting of a multipurpose facility/second sheet of ice, a senior center, and a second floor for the fitness area. The estimated total cost for the project is $9.5 million. Funding is proposed to come from a combination of private fund-raising, the sale of naming rights, revenues from the rental of the new ice, and general obligation-backed bonds. The latter would need to be approved by voters in a referendum, for which the group has targeted the general election of November 2nd. The SR:BPT group asked the City Council to take the steps necessary for a decision to be made in August as to whether to call for the November referendum. The Council directed that information be brought back to the May 4th meeting regarding the necessary consultants. Consultants: There are different consultants to be considered for this project: Financia/- The advocates make compelling arguments for why a second sheet of ice is needed from a demand standpoint. However, from a financial standpoint, there are several questions which need to be answered regarding the financial viability of a second sheet of ice (including initial construction, and long-term operating costs), the marketability of ice revenue bonds, and the impact on the City's debt rating. Two potential vendors have been identified, and from whom proposals have been received. Architectural/Programming-In order to accurately gauge the amount of construction funding needed, an architectural firm will need to be hired to review earlier ice arena options that were provided by a consultant that had been hired by the Shakopee Hockey Association's "Second Sheet Committee", and to do a concept design and budget estimates for the proposed senior center and fitness facility improvements. In addition, at the April 20th meeting, there was also expressed a desire for a comprehensive review of the Community Center's long-term programming needs. Again, two architectural firms have submitted proposals. Given the current construction market, many more architects would likely respond to a request for services proposal, if it was determined that an advertisement would be made. Support Polling-At the April 20th meeting there was also a recommendation to hire Decision Resources, Inc., to do a telephone survey of some 400 scientifically-selected local respondents, to determine the community's level of support for this ballot question, should it go to referendum. The cost to ask 400 respondents 40 questions is proposed to be $9000. Public-Private Partnerships-Councilor Punt has indicated a desire to thoroughly examine the business model under which the Community Center has operated. Exploration of privatization of the Community Center operation was done in 2002 and 2004, but it was not deemed desirable at that time. Given this economy, she asks whether there is something new that would allow a different type of operation that would reduce the subsidy from the General Fund, and give the City more features and amenities for less direct investment? She has suggested engaging a consultant who has a private-sector focus, to facilitate thinking about non-traditional ways to provide recreational services. She states that the objective ofthis engagement would be to help the City and its stakeholders reach a final direction more quickly by vetting all the options, and help the City more with its community resources. As of the time of the writing of this memo, we did not have an estimate for the cost of this service. That is expected by the May 4th meeting. Budget Impact: The minimum cost for the three consultants discussed at the last City Council meeting is $35,500. The addition of the public-private partnership facilitator will increase the total study costs. There was a desire at the last Council meeting to accommodate the study costs without a budget amendment. Technically, if the decision is made to proceed with the studies, an amendment will be necessary regardless--the professional services line item in the Parks and Recreation budget did not, of course, anticipate the need for this level of extra servIces. If the Council's intent is to take the necessary funding out of the current year's budget, the Parks, Recreation, and Natural Resources Director has identified $17,000 from that Department's budget that could be used. The balance could come from a revision in the Police Department personnel line item, given the number of position vacancies that have been unfilled in 2010. Other Considerations: Senior Center Alternatives--Councilor Punt has also asked that other options for constructing a dedicated Senior Center, other than as part ofthe Community Center, be considered. She feels that there may be other locations, either publically-owned or in currently vacant private facilities, which might be available at lesser costs. It should be noted that it is likely that a facility separate from the Community Center will require increased long term operational and staffing costs. Financing--Funding alternatives for portions of the question might also be considered. Councilor Punt suggested that grants be aggressively investigated for the senior center. In addition, the SR:BPT group recommended a capital campaign, and the possible sale of facility sponsorships, be used to reduce the amount of bonds to be issued. In order to minimize the risk to the City of having to raise taxes to cover the amount that any fundraising effort would fall short, it is recommended that the advocacy group be allowed to start fundraising efforts as soon as possible. Therefore, alternatives to the adopted, but not yet implemented "Facility Sponsorship Program", should be reviewed. Recommendation: We recognize that the SR:BPT group has spent considerable time and effort studying several components of what is being requested of the City. However, there remain a number of questions that need to be addressed, including options for consultants, financing, and service provision alternatives. F or that reason, I am recommending that a Study Committee be appointed by the City Council to expeditiously examine the questions that have been raised in this memo. It would then report back to the City Council. Possible membership might include: City Council (2 members) SR:BPT representative Hockey Association representative Senior group representative Finance Director Park, Recreation, and Natural Resources Director City Administrator At large member If the Council is interested in pursuing this, it is possible that the time needed to fully explore these issues may take time longer than the August timeframe required for the City Council to call a November referendum vote on any issuance of bonds-the Council would have to approve this being put on the November general election no later than August 18th. Ifthe decision is made after that time, it would mean a special election date. If the Council wishes instead to proceed immediately, recommendations on the various consultants will be provided at the May 4th Council meeting. Recommendation: I recommend that a study committee be appointed to review the issues relating to improvements to the Community Center, including interviews and recommendation of consultants. Relationship to Visioning: This supports Goal A, "Keep Shako pee a safe and healthy community, where residents can pursue active and quality lifestyles"; and Goal D, "Maintain, improve, and create strong partnerships with other public and private sector entities" Action Required: If the Council concurs, it should appoint a Study Committee for improvements to the Shakopee Community Center. If it does, it should designate two of its own members, an at-large representative, and further direct staff to request other potential member candidates from the representative groups. /l)A&~~ Mark McNeill City Administrator