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HomeMy WebLinkAbout3.A. Citizen Task Force Recommendaton for Community Center Future ./t, , CITY OF SHAKOPEE MEMORANDUM To: Mayor and City Council Parks and Recreation Advisory Board Mark McNeill, City Administrator From: Mark Themig, on behalf of the Community Center Citizen Task Force Meeting Date: September 27,2004 Subject: Citizen Task Force Recommendation for Community Center Future INTRODUCTION The Community Center Citizen Task Force will be presenting their recommendation on the future of the Community Center at a special joint workshop with City Council and the Parks and Recreation Advisory Board. BACKGROUND In 2003, the Parks and Recreation Advisory Board recommended to City Council that the City undertake a Parks and Recreation needs assessment of residents to get their opinion on Parks and Recreation services. In addition to their current satisfaction, the Advisory Board wanted feedback on future needs, as well as priorities of service should reductions become necessary. One of the outcomes of the survey was that 61 % of respondents have used the Community Center, and expansion of the Community Center ranks third in support for improvements to the parks and recreation system. Indoor swimming, expanded cardio/strength training, and indoor playground are the three most desired amenities. In order to assemble a plan for the future of the Community Center, City Council created the citizen task force this spring to evaluate options for the community center. These options included closing the facility, privatizing, expanding through a partnership, expanding through public financing, or doing nothing. Task force participants included: Deanna Benner Dan Kubitz Ron Carlson Matt Lehman John Clay Brian Madden Jamie Colby Don McNeil Steve Czech Eric Nutter Jim Dorenkamp Steve O'Neill Dan Gasow Shirley Reinke Dave Greening Arvid Sornberger Randy Gregor Mike Thelen Kitty Hauer Jon McBroom ;.. " The task force met on the following schedule: Date Discussion April 26 Kick Off Meeting with the Parks and Recreation Advisory Board . Discussed background information and role of the task force . Set meeting schedule and topics . Selected co-chairs: Dave Greening. and Randy Gregor May 10 Closing the Community Center . Reviewed CommunityCenterllce Arena operating budget. . Reviewed literature on similar actions in other cities throughout the United States, although we could not identify facilities with the types of services as ours that have closed. . Discussed potential positive and negative impacts of closing the facility. May 25 Privatization . Reviewed 2002 budget comparisons for park and recreation agencies in other cities. . Reviewed 2004 budget comparison for parks and recreation services within the city, and how much general tax dollars are spent on the Community Center operation through subsidy. . Reviewed examples of public services that have been privatized. The most common recreational type facility to be privatized is golf courses. . Discussed potential positive and negative impacts of privatization. June 21 Partnerships (Part 1) . Reviewed state auditor's study on enterprise fund operations. . Reviewed budget and use information for other community centers in the metropolitan area. . Reviewed general terms of agreements for cities that had facility partnerships: Champlin (Lifetime Fitness), Maple Grove (Northwest Athletic Clubs), Plymouth (Lifetime Fitness), and Savage (Lifetime Fitness). . Reviewed detailed agreement information for.the cities of Maple Grove and Plymouth. . Reviewed analysis of what services are currently provided at/from the Community Center, and what impact privatization might have on those services. . Reviewed literature on privatizing. July 19 Partnerships (Part 2) . Heard presentations from Terry Just, Director of Parks and Recreation for the city of Maple Grove, and Eric Blank, Director of Parks and Recreation for the city of Plymouth on their partnerships. Discussion included how their partnerships were formed,detailed agreement terms, and satisfaction with the partnership. . Reviewed terms of agreements for partnerships in Savage (Lifetime Fitness) and Andover (YMCA). Learned that Lifetime Fitness would not likely consider a partnership, nor a facility in Shakopee due to their existing facility in Savage and proposed facility in Chanhassen. ", w August 2 Partnerships (Part 3) and Public Financing Options . Heard a presentation from Jim Dickinson, Finance Director/Acting City Administrator for the city of Andover, on their partnership with the YMCA. . Heard information from Yvonne Anderson, YMCA of Greater Minneapolis, on the YMCA's efforts to evaluate locating a facility in the southwest metropolitan area. . Heard information from Welcome Neighbor on what type of residents are moving to Shakopee, and what their recreational needs mightbe. . Heard information from Don McGillvert, Springsted Financial, of ways to publicly finance expansions. August 16 Do Nothing Option and Formulate a Recommendation (Part 1) . Watched video and virtual tour of several full-service community centers throughout the metropolitan area, as well as public/private facilities. . Discussed impact of doing nothing. . In order to begin the process of formulating a recommendation, the task force developed a matrix of positives and negatives for each Community Center option that was considered (Attachment A). . Set an open house for August 30th to invite the public to come and share their opinions on the future of the Community Center. August 30 Public Open House and Formulate a Recommendation (Part 2) . Held an open house to invite the public to share their opinions. No public attended. . Watched a video tour of the Minnesota Valley YMCA. . Continued discussion on formulating a recommendation. Narrowed the options to either expansion through a partnership or publicly- financed expansion. . Requested that the city set up a meeting with the YMCA to discuss partnership opportunities in more detail. Sept 13 Formulate a Recommendation (Part 2) . Heard information on the meeting with the YMCA regarding partnerships. Learned that the YMCA would either need to conduct a long-term capital campaign or utilize the city's financing tools to participate in an expansion. The YMCA has no immediate funding available, and wouldn't assume debt. . Finalized recommendation. RECOMMENDATION After considering the five options of closing the facility, privatizing, expansion through partnership, expansion through public financing, and doing nothing, the task force came to consensus with the following recommendation: 1. The City of Shakopee shouldpursue an expansion of the Community Center with public financing (referendum), but continue to explore P9tentia.lpartn€Jr~hipti or alliances for operating specific components , ~ of the facility where another organization might bring experience and expertise that.would benefit the city. 2. The expansion should consider those items identified by residents in the 2003 parks and recreation survey, as well as facilities that have been shown to generate revenue in other cities: . Indoor pool . Multi-Use/2nd Sheet Facility . Enhanced Fitness . Recreational Field House . Indoor Playground . Birthday Party Rooms . Banquet Rooms . Senior Center . Caters Kitchen . Concessions/Snack Bar . Child Care . Police Substation . Meeting Rooms . Offices 3. The facility should be a quality facility that is designed to minimize staffing and operating costs. 4. Needed repairs should be made to the existing building as part of the expansion process. 5. Residents should decide whether or not they support expansion of the Community Center by holding a special referendum election in winter or spring 2005. The preliminary referendum amount would likely be $10 million - $15 million. 6. The City should retain professional services to conduct further analysis of an expansion. This analysis should include: 1. Additional market analysis and feasibility study. 2. Identification of costs for constructing specific desired amenities, as well as income vs. expenses for each amenity. 3. Formation of a citizen group that would participate in this process, specifically including individuals that were part of the recent school district referendum. NOTE: I made inquiry into the approximate costs for these professional services. There appear to be two options: 1. Develop the program (amenities) for the building based on analysis of existing and future market, incomelexpenses for each program area, and per square foot cost estimates, but do not do building concept design. (This is the approach that was used in the School District's recent referendum.) Estimated cost: $15,000-$30,000 2. Develop Develop the program (amenities) for the building based on analysis of existing and future market and income/expenses for each program area, as well as schematic concept design for the building. This would provide the city with a site plan and preliminary concept plan for the facility. Estimated cost: $75,000-$150,000 , '" REQUESTED ACTION The Parks and Recreation Advisory Board and City Council is asked to review and discuss the proposed recommendation with the citizen task force. There will be a short presentation on the recommendation. . , Community Center Task Force Options Summary Closing the Facility Privatizing the Facility Expansion through Expansion Through Public No changes Public/Private Partnership Finance Negatives Negatives ' ~j\ Negatives Negatives Negatives No center hub Fees may Legal costs Selling the Lack of progress for the city's increase concept to the recreation and public other services Possible May loose sports Revenue driven Economic Slow decline of reduction in association and from expansions climate down interest administrative school district support for partnerships associations Negative impact Possible loss of Fees may Lack of expertise Citizens will pay on local future equity on increase in certain areas more in subsidy economy building per year Lack of pride Loss of control Umited City financing Future costs for partnership options limited expansion would options increase Waste of an Similar efforts City's financial More difficult to investment not common commitment attract members unknown Additional Park Time line longer Higher operating & Rec. office for expansion costs over time space needed without additional revenue Loss of building Loss of city Building would rental charge for identity decline over time the city Does not serve Branded by future growth corporate name Loss of equity Closing the Facility Privatizing the Facility Expansion Through Public No changes Finance Negatives Negatives Negatives Negatives . , . Referendum Amounts Amount $5,000,000 $10,000,000 $15,000,000 . .. Community Center Task Force Notes: May 10th 2004 The Task force reviewed the supplied budget information on the community center and ice arena. It was stated that the community center and ice arena were operated as an enterprise fund. There was questions on what the building fund cost of $147,000 goes towards. It was explained by Mark Themig that the building fund was established in 1999 for the future building repairs and costs with building new city buildings. Examples were the police station and library. It was noted that the Park and Rec. budget was subsidized $454,360 to operate the community center and ice arena, which was around 3.8% of the total $11,760,270 general fund costs. The discussion ofthe building closing and the cost savings of the building fund is not necessarily a benefit to the city. It would hinder the city in future buildings buy eliminating the $147,000 to the building.fund annually. According to the camber of commerce the average visitor that comes to a tournament or special event to community center or ice arena spends $107 per head. This total estimated loss to businesses would be between $300,000 to $600,000. Reviewed the history of how the building was built and it was noted that the voters turned it down in election and the city council decided that it was in the best interest to build the community center. So the city used TIF money in the amount of 5.4 million to build it. There was a bitter taste in the community because of the opposition. It was asked if the community center has increased in usage since the expansion of the weight room. Travis K. Noted that it has increased in both memberships and daily usage. An option of closing only one side of the community center or ice arena was brought up. The Ice arena information was reviewed and noted that the prime time ice usage in the months of September to march were fully used and ice usage was low in the months of may to July. The question of how does the current rink rate to usage of ice time to others in the area and the current rink does well. And the demand is in the area for more prime time usage. The task force asked if the meetings could be taped and showed on public access. The task force also wanted more in-depth information in the future. Additional information asked for by the task force. 1.) What are other community centers and ice arenas subsidized? 2.) What is the cost per household to subsidize the twoJacilities? . . Task, Force Notes: May 25th, 2004 Mark Themig noted that task force meetings would. be taped and played back on cable access. The task force asked for this option in the intenUo inform the public on was is being discussed. Reviewed task notes form may 10th meeting. Topics included: history on the community center, Shakopee's operation budget, and the loss of revenue to city businesses if facility is closed. Travis Karlen went over the 2004 Parks and Recreation budget comparisons information. There was lack of information from cities .of Egan, Rosemount, and Chaska. It was noted that facilities with banquet rooms and indoor playrooms showed a close gap between operation costs and revenues. Mark Themig went over the Comparison Cost for Other Community Services in Shakopee. It was noted that of 12 milIion dollars it takes to operate the city 40% is by fees and the remaining is collected by taxes. It was noted the average household subsidy for the Community Center $6.54 and $1.63 for the Ice Arena. There were no examples of privatizing a facility like Shakopee without some form of . expansions. It was noted that private companies are often turn off buy by purchasing public buildings due to the political delay in a sale. The possibility of losing the community center would result in a lost hub for the city and loss in ownership. It was asked what interest St. Francis would have with a public private partnership like what Chaska's has. Mark Themig expressed that there has been interest from St. Francis for a possible rehab center. There was a question in what the School District did right in getting the past referendum past. Also expressed the need for the School District involvement in a possible expansion in the Community Center. There were many impacts discussed in what would happen to services to the community if the Community Center were privatized. Additional information asked by the Task Force. 1.) More info in what other city budgets. 2.) What services would be lost in the privatization or public/private partnership of the facility. . . Task Force Notes: June 21st, 2004 Reviewed the May 25th meeting notes and previous topics. Mark Themig reviewed the State of Minnesota Auditors report on City Enterprise Funds. It was noted that the city has two types of funds "Necessary" and "Wellness". Examples of Necessary funds are Sewer and Electrical Enterprise funds. These types of funds operate at slight profit or breakeven status. Wellness funds are typically Park and Recreation funs and should operate at a breakeven or slightly subsidized rate. Travis Karlen reviewed attendance and budget updates from other facilities. It was noted that Shakopee's gym rental is (ower than other towns. Jon Mcbroom the superintendent for the school district was in attendance and he gave an update on the progress of the new high school. Mark Themig gave an overview of examples of public/private facilities. The four towns in the discussed were Maple Grove, Plymouth, Champlin, Savage. Plymouth, Champlin, and Savage partnered with Lifetime Fitness. Maple Grove partnered with Northwest Athletic Club. When building a new site Lifetime Fitness is looking for a 125,000 population area to draw from. The Task Force reviewed the Community Center Service Analysis of Services. Mark Themig is in contact with the directors of Plymouth and Maple Grove on their availability to attend the next meeting and discuss what they feel was beneficial to the community due to a private/public partnership. Additional information asked by the Task Force. 1.) Th~ possibility of video taping other facilities. 2.) The amount of the general fund that is subsidized for other facilities compared to Shakopee. 3.) Contact the directors of Plymouth and Maple Grove on their availabilityto attend the next meeting. 4.) More info from other towns on their budgets. . . Task Force Notes: July 19th Notes Mark Themig opened up by introducing Terry Just from Maple Grove and Eric Blank From Plymouth to discuss Public/Private. Partnership. It was asked if Lifetime Fitness was still interested in a partnership. Mark T.stated that he had talked to a Lifetime employee and that they are not interested in a facility in the Shakopee area; Mark T. noted that the EDA was not an option in funding an n expansion of the community center. Travis Karlen stated that videotaping was done on the fallowing facilities. Invergrove, Eagan, Maplewood, Shoreview, and Maple Grove. Eric Blank from Plymouth talked about how the city came about there expansions. Partnership is with Lifetime Fitness. The concept for a community center was denied two times by the residents. When it passed it was a joint effort between the city, school district, and hockey assoc. Plymouth used public funding along with the Lifetime Fitness money. Lifetime Fitness Pays taxes on the building to the city. Noted that ice arena with two sheets was built and is operated at a profit. Plymouth invested 10 million into project. Terry Just from Maple Grove talked about how the city cam about there expansion. Partnership is with Northwest Athletic Club. The land was acquired by park dedication money and a trade in land to the current owner. Concept for a community center was also denied two times by the residents. Maple Grove used 10 million it had in reserves to fund the expansion. Northwest at first lost there funding and then built later when they got the funding, The indoor play area and indoor pool are anchors for the facility. Tom Lehman stated that the public was not educated on the previous two attempts for public funding in the community center. Mark Themig said that the YMCA was looking into possibly expanding in the Prior Lake area. August 16th meeting will have video on other facilities and will be asked to formulate a recommendation to the Park and Recreation Board. The August 2nd and 16th meetings will be held at the police station meeting room. Additional city budget will be presented when more data comes in. I . Task Force Notes:Aug 2nd Mark Themig started the meeting by introducing the Jim Dickinson from the City of Andover and their YMCA joint building. Jim Dickinson went over the creation of a YMCA and City Community Center from that here is a list of key issues. The YMCA was is taking on more debt than they have ever had in the past. Andover approached the YMCA. The concept started out at 9.9 to 12 million and ended up at 18.4 million. There was an intense s'election of who to do their capitol campaign. The YMCA was responsible for 9 million in the project with a 30yr pay off period. The community center will start with a subsidy payment of $500,000 and increase to $860,000 a year. Taxes would end up going up $50.00 per household. Springsted Financial went over the funding options for the community center if it were to expand. The city could issue General Obligation Bonds. that would have to be done buy a referendum. Lease Revenue bonds could be issued and no referendum would be need. LRS bonds would be more expensive to the city. in the long term. Gross Revenue Bonds would be issued to fund an ice arena. There are two types of facilities that do have to use Gross Revenue Bonds and they ere golf courses and ice arenas. A city sales tax to build a facility would have to be approved by legislature. Yvonne Anderson from the YMCA discussed the interest in a location already testing two sites in Prior Lake. The YMCA has not traditaly move quickly to expanding in new areas. Welcome Neighbor representative discussed their involvement in the community as a new resident information supplier. There focus is on homeowners and they see 1/3 of new homes being singles and 2/3 in married couples. 'l'2 of the new residents have children in school. The most asked information is the location of trails and parks. Mark Themig went over the next meetings. Aug 16th Meeting will be video on the facilities with public/private partnerships. Aug 30th Formulate Recommendation to the Park and Recreation Board. Sept 13th Discussion at ajoint meeting between Park and Rec.board and the city council. I , Communitl Center Task Force Notes: August 16t , 2004 Travis Karlen and Don McNeal started the meeting explaining that they had taped other facilities in order for the task force to see what other communities offer. The task force viewed the fallowing facilities Maplewood, Shoreview, Maple Grove, Inver Grove, and Egan. Lifetime fitness would not permitvideotaping due to policies. Don McNeal noted that the amenities that stood out were pools, banquet rooms, and play areas. Questions were asked if the banquet rooms were catered. Travis noted thatsome facilities had contracts with catering services. Mark Themig and Matt Lehman noted that the task force was to come to a recommendation on the future of the facility, not to determine what we needed to add. Kitty Haur noted that we need to keep the community feel and that may not be possible in a joint partnership. There was a discussion on the options for the community center, and an analysis of the positives and negatives of each option. Mark Themig suggested that the task force to hold an open house for public discussion on August 30th. The task force felt it would be benificial in other public opinion. The task force asked for a list of amenities for each facility on rates for those facilities. They also asked to see tape for the YMCA and what they had to offer. , I , Community Center Task Force Notes From September 13t\ 2004 Mark Themig opened the meeting with the continuation of the future options for the community center with the focus on public finance and public/private partnership. The other options were eliminated during the August 30th meeting. Mark Themig gave a review ofthe meeting with the YMCA. Mark noted that the YMCA is very interested in a joint partnership with Shakopee, The YMCA would want to run programs such as aquatics, fitness, and children programs. There timeline for a partnership would be two or more years to do a capital campaign. The YMCA would also like to use the city's funding options for the building. The YMCA would not enter into an aggressive agreement such as their partnership with Andover. The YMCA would like to take on the profitable functions of an expansion. The YMCA also noted that they bring an expertise to the programs that they currently have. Mark went over the referendum amounts per household with the lowest 5 million dollar referendum to 15 million. Cost per household would very from $28/year to $85/year based on a $213,000 average house hold price. Travis Karlen reviewed the information from the other cities and how each city does there finance differently. Travis also noted that the City of Maple wood spent money on marketing the facility, which has a large payoff. The task force noted that the YMCA option is not an option that they would explore to due to the loss of control, city finance obligations, increased fees, and longer timeline. Matt Lehman noted that if the city were to expand the percentage of subsidy would need to stay close to what is now in reflection to the operation of the community center. The task force came to the agreement that the city should finance an expansion of the community center by referendum. Task force would like to see specific profitable amenities and the needs detailed in the park and recreation survey. The task force would also like to see the use of a special election. During the next process if approved by city council the task force would like to meet with the school district to find out what worked for them in there last referendum. Mark Themig noted that he would put together a summary and power point presentation for the joint meeting with the Park and Recreation board and City Council on September 27th. Shakopee Parks and Recreation Advisory Board Meeting 6:30 p.m. - Monday, September 27 Community Center Rotary Room (Please Note Start Time Change and.Meeting Location) Preliminary Agenda 6:30 p.m. - Joint Meeting with City Council and the. Community Center Citizen Task Force 1) Presentation and Discussion on Task Force Recommendation 8:00 p.m. - Regular Meeting 1) Roll Call - Jim Dorenkamp Presiding -,' Gary Hartmann Brian Madden_ Dave Pass Rob Root Arvid Sornberger_ Elise Souders - Matt Lehman, Council Liaison_ 2) Approval of Agenda 3) Recognition fnterested Citizens for Items Not On Agenda. (No action will be taken.) 8:05 p.m. 4) Parks and Trails a) Park Naming Policy b) Donor Naming Policy c) Off-Leash Dog Area Request 9:00 p.m. 5) Informational Items a) Project Updates (verbal) 6) Other Regular meetings of the Shakopee Parks and Recreation Advisory Board are normally held the fourth Monday of the month at 7:00 p.m., either at the Community Center or City Hall. All meetings are open to the public. Please contact Mark Themig at 952-233-3837 if you have an item you would like placed on the agenda. All agenda times are estimates.