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Home My WebLink AboutItem 06.lProposed Action Staff recommends adoption of the following motion: Move to Acknowledge Receipt of the Lakeville Arenas 2013 Budget. Approval of the motion will result in approval of Lakeville Arenas 2013 budget by the Lakeville Arena Board at their next meeting. Overview The Joint Powers Agreement for the Lakeville Arenas (section 6A) states: "The Board shall prepare an annual budget on a calendar year basis. The budget shall set forth projected expenditures and revenues to make Arena Complex lease payment, fund capital maintenance reserve and to maintain, operate and manage the Arena Complex. The budget shall be submitted to the members on or before June 1S annually for review and comment. The Board shall consider any comments received and adopt a final budget on or before July 1S annually." The Lakeville Arena Advisory Committee reviewed the budget at its May meeting and recommended forwarding the proposed preliminary budget to the City Council for their review and comment. The Lakeville Arena Board will consider approval of the budget at its June 20 meeting — subject to any comments received from the City and School District. Primary Issues to Consider • City financial assistance requirements. There is no financial assistance required by the City for arena operations. Supporting Information • Lakeville Arenas Proposed 2013 Budget. Dennis Feller, inance Director Financial Impact: $ none budgeted: No Source: N.A. Related Documents (CIP, ERP, etc.): Notes: Table of Contents Page Letter of Transmittal 3 2011 Summary 3 General Fund 7 Revenues 7 Program Budget Descriptions and Expenditures 9 Debt Service Funds 14 Fund Balance 15 Capital Reserve Fund 16 Supplemental information 17 Statement of Revenues and Expenditures 17 2 May 1, 2012 Lakeville Arenas Board members The Joint Powers Agreement requires the Board to approve an annual budget on a calendar year basis. The budget must set forth projected expenditures and revenues necessary to finance lease payments, fund the capital maintenance reserve and to maintain, operate, and manage the Arena Complex. The budget must be submitted to the City and School District prior to June 1'`. The Board must approve the budget prior to July 1. As such the proposed 2013 budget is hereby presented to the Board for their consideration and approval. The budget is comprised of the following funds in order for the Lakeville Arenas to effectively manage its financial resources. • General (Operating) Fund. The General Fund accounts for the overall operations of the Lakeville Arenas. • Capital Reserve Fund. The Capital Reserve Fund was established to provide the financing of future equipment replacements and major facility programs. The salient issues relative to the proposed budget for each of the respective funds are discussed in the sections attached hereto. 2011 Summary The 2011 fiscal year marked the fourth full year of joint operation of both the Ames and Hasse Arenas. The joint operation has enabled the Lakeville Arenas organization to offer new and expanded opportunities to better serve our customers — the community. Some of the highlights and initiatives are as follows. • Public Skating. The arena has continued to offer year round public skating during both weekday and weekend hours. Public skating attendance for paid sessions decreased slightly this past year from 3,767 skaters in 2010 to 3,462 skaters in 2011. Our no charge daytime public skating which is offered during the school year has continued to be popular. • Learn to Skate Program. The learn to skate program has continued to provide skating opportunities for children and adults of all ages. Enrollment has remained 3 steady between 550 — 650 skaters per year over the past three years. The learn to skate program has also led to the creation of the Heritage Figure Skating Club which is made up of a combination of learn to skate students and local figure skaters. Both of these programs have created great experiences for our young students that will last a life time. • High School attendance. Attendance at high school 2010 due to the successful season of the teams. 2009 -10 2010 -11 Boys 332 avg /gm 347 avg /gm Girls 186 avg /gm 179 avg /gm Total 10,908143 gms 9,833139 gm games remained steady from 2011 -12 315 avg /gm 200 avg /gm 11,228144 gms ■ Adult Hockey League: The Lakeville Arenas adult hockey league was formed in 2008 -09 with the additional late night hours available with the opening of Hasse Arena. The league hosted 7 teams this past season and offered organized team play for over 100 participants with plans to continue the expansion in coming years. ■ Dry Floor Activities. The artificial turf has continued to provide opportunities for a wide range of indoor activities during the non -ice season. In 2011 over 250 hours of turf activities involving lacrosse, soccer, baseball and softball were rented at Ames Arena. In addition, over 1.00 hours of dry floor events including K9 agility competitions, children's consignment sales and the filming of a short movie. We also hosted the 4th Annual Family Fun Fest which attracted over 1,200 community members. 2012 Operations The following is a succinct overview of the salient changes in operations and budget. ■ Ice rentals are projected to increase when compared to the original budget due to the rental of Hasse Arena during the summer months by Total Hockey MN. Cooperation between LHA and the Arenas has allowed the available ice hours to be fully utilized during the early tryout season resulting in maximum facility usage. • Dry floor events including multiple consignment sales, a K9 agility competition, dry floor hockey league and an indoor football clinic will generate additional revenue as well as showcase the facilities for future dry ,floor events. • A number of maintenance projects will be undertaken at the Ames Arena to maintain the facility at optimum condition and improve conditions to meet customer expectations. A complete description is provided in the General Fund narrative. 4 Overall, the Arena operations are very strong both financially and operationally. Customer satisfaction and community involvement continue to be high. The changes in the budget and operations will further enhance Arena performance capabilities. Proposed 2013 Budget Highlights Maintaining current programs and expanding facility use opportunities requires an investment in facility maintenance and equipment. As such, the salient budget proposals are as follows. ■ The projected 2013 ice rental hours during the winter season are expected to remain steady with past seasons. Ice rental rates are proposed to remain the same as 2012 at $215 per hour. Learn to Skate, high school game attendance and concession sales are expected to remain steady in 2013. Building repair and maintenance items addressed in 2012 will help to reduce operational and repair costs in 2013. ■ Investment in major maintenance of the Ames Arena will ensure long term operational reliability and success at the building. Ames Arena is continually in need of major maintenance in order to improve energy and operational efficiencies and to improve the customer experience of the facility. The many energy efficient improvements over the past years including an energy recovery dehumidification system installed in 2009, low -e ceiling installation in 2010 in Rink 2 and building management controls installed in 2011 are major reasons for the reduction in overall energy consumption. Future One of Lakeville Arenas goals is to continue to focus on marketing efforts which will result in an expansion of the facility use and revenue base with the expectation that ice use rates in future years will continue to be competitive with those of surrounding communities. The staff has developed a long range plan for future equipment acquisitions and replacements. An adequate and sufficient financial structure for the Capital Improvement Fund will enable the Arenas to adequately finance improvements without burdening the users with higher or volatile future rate adjustments. 5 The future is indeed very bright for the long term outlook for the Arenas and the community. The facilities are well structured to accommodate user needs. Conclusion The success of these programs has established a foundation for expanded use of the arenas by the community's residents in the years to come. Our objective for the coming year is to expand on the success by creating even greater opportunities and enjoyable experiences for the customers. The proposed budget is consistent with the purpose of the Joint Powers Agreement to "...operate and manage the Arena Complex in the best interests of the community." The organization will continue its efforts to undertake entrepreneurial endeavors to maximize the return on the public investment. Respectfully submitted, Shayne Ratcliff Arenas Manager 6 General (OperatinLY) Fund The General Fund accounts for the overall operations of the Lakeville Arenas. Operating Revenues In order to adequately finance operations, sufficient revenues must be provided through a concerted effort of maximizing facility use rentals and facility use fee adjustments. The 2013 revenues from operations are estimated to be $1,021,190 of which $854,680 (84% of budget) is from ice rental in order to adequately finance Arena operations. 2012 2013 ESTIMATE PROPOSED Operating Revenues Ice Rental Dry floor Learn to Skate Admissions - Public Skating Event Admissions(Net of ISD Reimb) Skate Sharpening Skate Rental Concessions and pro shop - net Concessions - Lease payments Vending Machines Other - Advertising Contract Vending Royalty Other - Miscellaneous Total Revenues $ 914,330 $ 854,680 39,638 29,040 42,506 42,720 12,500 12,500 34,000 34,000 4,100 4,100 4,000 4,000 10,200 10,200 2,500 2,500 6,550 6,550 20,000 20,000 2,000 - 900 900 1,093,224 1,021,190 Ice rental revenues will decrease from 2012 after the one three rental of Hasse Arena during surmner months to Total Hockey MN. Dry floor revenue generated by turf sales is based on typical spring weather patterns. Ice rental hours are expected to be 1.00% rented from November thru February to either the school district, youth hockey groups, public skating or learn to skate programs. The primary ice customers are fisted below. 4% 2 */.2% ® Lakeville Hockey Association - 59% ®ISD194 -26% 26° • Other Hockey Associations - 3 % • Adult Hockey - 4 % 59% ®Public Skating -4% ® Learn to S kate - 2 % 7 ® Other -2 %a In order to adequately finance operations; the winter ice rental rates for the 2012 -13 season will increase from $205/hr to $215/hr. Non - winter season ice rental is proposed to remain unchanged at $160 per hour in 2012. The following is a comparison of prime time winter and summer rates with other communities for the 2012 -2013 season. The ice rate increase in 2012 — 2013 will be the first ice rate increase since the 2008 season. The following is a comparison of prime winter rates over the past six years. Winter Prime Rate Winter Prone Rate 2011 -12 Adj 2012 -13 Burnsville $ 215 $ - $ 215 PriorLake 205 10 215 St Thomas Acad. 210 5 215 Lakeville 205 10 215 Farmington 205 - 205 Apple Valley 195 10 205 Cottage Grove 200 - 200 Shakopee 190 5 195 Richfield 185 5 190 Minnetonka 185 5 190 Eagan 185 5 190 Bloomington 180 5 185 The ice rate increase in 2012 — 2013 will be the first ice rate increase since the 2008 season. The following is a comparison of prime winter rates over the past six years. Summer Prime Rate Winter Prone Rate 2011 Ad_i• 2012 Richfield $ 185 $ $ 185 Minnetonka 180 '07 -'12 180 Eagan 175 10 185 Bloomington 175 5 180 Burnsville 175 - 175 Lakeville 160 - 160 PriorLake 160 - 160 St Thomas Acad. 160 - 160 Shakopee 145 - 145 Cottage Grove 145 - 145 Apple Valley N/A N/A N/A Farmington N/A N/A N/A The ice rate increase in 2012 — 2013 will be the first ice rate increase since the 2008 season. The following is a comparison of prime winter rates over the past six years. 8 Winter Prone Rate Increase 2007 -08 2008 -09 2009 -10 2010 -11 201 -1 '07 -'12 2012 -13 Burnsville $ 180 $ 190 $ 205 $ 210 $ 215 $ 35 215 PriorLake 165 185 200 200 210 50 215 St Thomas Acad. 195 210 21.0 210 210 20 215 Lakeville 200 205 205 205 205 15 215 Farmington 155 185 185 200 200 50 205 Apple Valley 170 175 1.90 190 195 35 205 Cottage Grove 165 200 200 200 200 35 200 Shakopee 150 160 170 185 190 45 195 Richfield 165 170 180 180 185 25 190 Minnetonka 155 165 175 180 185 35 190 Eagan 155 165 170 180 185 35 190 Bloomington 155 165 170 1.75 180 30 185 8 Dry floor program opportunities have been greatly enhanced with the installation of artificial turf at the Olympic size rink at Ames Arena. Lakeville Arenas will continue to aggressively pursue renting of the facilities for dry floor activities. Target customers continue to be youth sports activities such as soccer, lacrosse and baseball. The Arenas have numerous dry floor events scheduled for 2012. The Arenas will continue to market itself as a showcase for trade shows and other exhibition programs. Revenues from dry floor activities are estimated to be $29,040. The Learn to Skate program has enrolled over 2,800 participants since its return in 2007. With our highly qualified Director and competent staff, we expect the program to be a continued success. For the 2012 -13 season, the hours of operation will be expanded to include: i) Four (4) 8 week sessions over the course of a year • Fall and Winter sessions will be held at Hasse Arena • Spring and Summer sessions will be held at Ames Arena ii) Fall /Winter sessions will include 4.5 hours on Saturday mornings and 2 hours on Tuesday mornings iii) Spring session will include 2.5 hours on Tuesday mornings & evenings and 4.5 hours on Saturday mornings iv) Summer session will consist of 2.5 hours on Tuesday evenings The public skating program was very successful during 2011 as result of expanded and more desirable hours. For the 2012 -13 winter season, the hours of operation will continue to be offered in the same manner as last season; Saturdays from 5:45pm — 7:15pm and Sundays from 1:30pm — 3:OOpm for $4.00 /person and $3.00 /skate rental. The budget anticipates approximately $16,500 of revenues from public skate admissions and skate rental. Pro Shop Sales / Skate Sharpening are provided at both Ames and Hasse Arena. Concessions operations at Hasse Arena are managed by the Arena staff. The Lakeville Ames Arena concession stand is leased to the Lakeville Hockey Association (LHA) for 5 months at $500 /month. Vending Machines revenues are approximately $6,550. The current vending machine contract has a royalty of $2,000 per year and is set to expire in October, 2012. The arena will begin seeking bids for a new vending contract this summer but at this point cannot guarantee the new contract will have a vending royalty included so it has been removed from the upcoming budget. M Expenditures The 2013 expenditure budget is $1,016,375 which is a $72,472 (6.7 %) decrease over the previous year. The following is a summary of the proposed budget expenditures: The majority of the costs attributable to operations are fixed costs such as insurance, debt service, Capital Reserve and certain personnel costs. As such, the arena must seek to maximize efficiencies by operating the facilities as one complex with a common objective — providing quality services for the community and maximizing the return on the public investment. Personnel costs account for approximately 34% of the operating costs. The proposed budget provides for three full time staff members to operate the facilities. Arenas Manager Facility Superintendent Assistant Manager The arena also has a contingent of part-time staff including resurfacer drivers, office workers, Leon to Skate Director, Learn to Skate Instructors, concession and custodians. part-time personnel are scheduled based on facility rental commitments. Hence, part-time personnel costs are directly proportional to revenues. 10 2012 2013 Increasel(decrease) Estimate Proposed Total % Personnel 333,089 342,574 9,485 2.8 % Utilities 225,370 203,523 (21,847) -9.7% Contractual 237,391 186,232 (51,159) - 21.6% Capital reserve fund 113,000 116,000 3,000 2.7% Debt service 88,626 88,626 - 0.0% Commodities 39,320 37,870 (1,450) -3.7% Other - 28,000 28,000 Capital Outlay 52,050 13,550 (38,500 - 74.0% Total $ 1,088,846 $ 1,016,375 $ (72,471) -6.7% The majority of the costs attributable to operations are fixed costs such as insurance, debt service, Capital Reserve and certain personnel costs. As such, the arena must seek to maximize efficiencies by operating the facilities as one complex with a common objective — providing quality services for the community and maximizing the return on the public investment. Personnel costs account for approximately 34% of the operating costs. The proposed budget provides for three full time staff members to operate the facilities. Arenas Manager Facility Superintendent Assistant Manager The arena also has a contingent of part-time staff including resurfacer drivers, office workers, Leon to Skate Director, Learn to Skate Instructors, concession and custodians. part-time personnel are scheduled based on facility rental commitments. Hence, part-time personnel costs are directly proportional to revenues. 10 Salaries and benefits Salaries - Full Time Salaries - Part Time PERA FICA Hospitalization Life and Disability Long Term Disability Dental Insurance Workers Compensation Total 2012 2013 Increase/(decrease) Estimate Proposed Total % $ 152,557 $ 165,076 $ 12,519 8.2% 110,585 106,194 (4,391) -4.0% 19,078 19,667 589 3.1% 20,130 20,752 622 3.1% 24,228 24,228 - 0.0% 76 76 - 0.0% 346 346 - 0.0% 1,518 1,518 - 0.0% 4,571 4,717 1.46 3.2 $ 333,089 $ 342,574 $ 9,484 2.8% Commodities represent approximately 3.7% of the total budget. 2013 2012 Commodities Estimate Office Supplies $ 545 Operating Supplies 7,375 Motor Fuels 2,400 Cleaning Supplies 9,000 Clothing 2,000 Equipment Parts 5,000 Building Repair Supplies 12,000 Small Tools/Equipment 1,000 Total $ 39,320 2013 Increase /(decrease) Proposed Total $ 545 $ - 0.0% 7,075 (300) -4.1% 1,250 (1,150) - 47.9% 9,000 - 0.0 % 2,000 - 0.0% 5,000 - 0.0% 12,000 - 0.0% 1,000 - 0.0 $ 37,870 $ (1,450 -3.7% It Other Charges and Services are proposed to decrease by $51,159 (22 %) from $237,391 in 2012 to $186,232 in 2013. Other charges and services represent approximately 18.0% of the budget expenses. The budget provides for annual audit services. Use of personal auto is attributed to the staff traveling between the Ames and Hasse Arenas. Advertising is comprised of flyers, signage and yellow pages advertising. Insurance premiums for liability, property and casualty insurance provides coverage for both facilities. "Other Contractual" ($19,100) includes water treatment services, alarm system monitoring, water softening, fire extinguisher and sprinkler system testing. "Fiscal Management Fees" is a $32,000 charge from the City of Lakeville to provide support services such as payroll, human resources, annual financial reports, periodical financial reports, accounts payable, Information Technology support and other administrative support functions for the arenas. 12 2012 2013 lnerease/(decrease) Other Charges and Services Estimate Proposed Total % Fiscal Management Fees $ 32,000 $ 32,000 $ 0.0% Attorney Fees 50 50 0.0% Bank Charges 2,820 2,820 - 0.0% Audit 4,650 4,750 100 2.2% Use of Personal Auto 750 750 - 0.0% Advertising 4,000 4,000 - 0.0 % Insurance 29,600 30,458 858 2.9% Water and Sewer Service 12,000 12,000 - 0.0% Waste Disposal 6,500 6,500 - 0.0% Telephone 4,200 4,200 - 0.0% Postage 340 340 - 0.0% Other Contractual 19,100 19,100 - 0.0 % Equipment Repair and Maintenance 15,050 10,800 (4,250) - 28.2% Building Repair and Maintenance 85,886 36,579 (49,307) - 57.4% Contract Landscaping 1,500 1,500 - 0.0% Schools and Conferences 1,500 1,500 - 0.0% Business Meetings/Misc. Expenses 200 200 - 0.0% Dues /Subscriptions/Licenses 4,245 4,245 - 0.0% Snow Removal 13,000 14,440 1,440 11.1 Total $ 237,391 $ 1.86,232 $ (51,1.59) - 21.6 The budget provides for annual audit services. Use of personal auto is attributed to the staff traveling between the Ames and Hasse Arenas. Advertising is comprised of flyers, signage and yellow pages advertising. Insurance premiums for liability, property and casualty insurance provides coverage for both facilities. "Other Contractual" ($19,100) includes water treatment services, alarm system monitoring, water softening, fire extinguisher and sprinkler system testing. "Fiscal Management Fees" is a $32,000 charge from the City of Lakeville to provide support services such as payroll, human resources, annual financial reports, periodical financial reports, accounts payable, Information Technology support and other administrative support functions for the arenas. 12 Capital Outlay items are included in budget to replace assets; which are no longer functioning or are beyond their useful life. Items include: I e/ ( d ) Additional Rental Skates Upgraded Skate Sharpener String Trimmer /Sweeper Floor Scrubber -Ames Arena Pick Up Truck Desktop Computer Video Surveillance System Ice Resurfacer Batteries Parking Lot Fencing Ice Plant Mngnmt Sys Total $ 52,050 $ 13,550 $ (7,250) - 13.9% Equipment Repair and Maintenance costs for 2012 are projected to be $15,050 in order to address maintenance requirements at Ames Arena. Some of the significant projects include repairs to ice resurfacers ($7,500), dehumidification repairs ($2,500), dasher board repairs ($1,000) and replacement dasher board glass ($1,500). The equipment repair costs are estimated to decrease to $10,800 for 2013. Building Repair and Maintenance provides appropriations for maintenance agreements relating to HVAC, refrigeration and ice painting as well as major maintenance projects. The costs for 2012 are estimated to be $85,886 in order to address major maintenance requirements at Ames Arena. Some of the significant projects include relining of the Ames snow melt pit ($20,000), replacement of the expansion joint on rink #1 ($10,000), rink floor repairs on rink #1 ($10,000), replacement of the Ames ice plant VFD ($4,300), repainting rink #1 bleachers acid rink #2 rink walls ($4,000) as well as miscellaneous HVAC, plumbing and electrical repairs. The proposed 2012 budget for building repair and maintenance will decrease by $46,726 (57 %) as a result of completing a significant number of major maintenance projects in 2012. The budget provides for fertilizer and herbicide applications at the two arenas. Lawn mowing is performed by arena staff. Schools and Conferences provides for attendance by arena staff at the Minnesota Ice Arena Managers Workshop & Conference. Dues and subscriptions ($4,245) include the Minnesota Department of Health food license for the concession stand and music service licenses to accommodate public skating. Snow removal contracts ($14,440) are required for the Ames and the Hasse Arena. Utilities. Utilities are presumed to increase 5 % for natural gas and 8% for electrical for the upcoming year. Actual utility expenses will decrease due to Hasse Arena not operating during the summer of 2013. Utilities represent 20% of the total budget and are the predominant reason for increases in ice arena operating costs. 13 nereas ecrease 2012 2013 Total % $ 2,250 $ - $ (2,250) - 1.00.0% $ 3,000 $ 750 $ 7,000 $ 15,000 $ 1,050 $ 1,050 $ 8,00() $ 12,500 $ 10,000 5,000 - (5,000) - 100.0% $ 52,050 $ 13,550 $ (7,250) - 13.9% Equipment Repair and Maintenance costs for 2012 are projected to be $15,050 in order to address maintenance requirements at Ames Arena. Some of the significant projects include repairs to ice resurfacers ($7,500), dehumidification repairs ($2,500), dasher board repairs ($1,000) and replacement dasher board glass ($1,500). The equipment repair costs are estimated to decrease to $10,800 for 2013. Building Repair and Maintenance provides appropriations for maintenance agreements relating to HVAC, refrigeration and ice painting as well as major maintenance projects. The costs for 2012 are estimated to be $85,886 in order to address major maintenance requirements at Ames Arena. Some of the significant projects include relining of the Ames snow melt pit ($20,000), replacement of the expansion joint on rink #1 ($10,000), rink floor repairs on rink #1 ($10,000), replacement of the Ames ice plant VFD ($4,300), repainting rink #1 bleachers acid rink #2 rink walls ($4,000) as well as miscellaneous HVAC, plumbing and electrical repairs. The proposed 2012 budget for building repair and maintenance will decrease by $46,726 (57 %) as a result of completing a significant number of major maintenance projects in 2012. The budget provides for fertilizer and herbicide applications at the two arenas. Lawn mowing is performed by arena staff. Schools and Conferences provides for attendance by arena staff at the Minnesota Ice Arena Managers Workshop & Conference. Dues and subscriptions ($4,245) include the Minnesota Department of Health food license for the concession stand and music service licenses to accommodate public skating. Snow removal contracts ($14,440) are required for the Ames and the Hasse Arena. Utilities. Utilities are presumed to increase 5 % for natural gas and 8% for electrical for the upcoming year. Actual utility expenses will decrease due to Hasse Arena not operating during the summer of 2013. Utilities represent 20% of the total budget and are the predominant reason for increases in ice arena operating costs. 13 Debt Service. The Ames Arena was financed with the issuance of debt which is repaid with LHA pull -tab revenues ($95,000) and arena operations ($88,626). Final payment on the Ames Arena debt is in August 2019. The LHA pull -tab revenues are pledged to the City for payment of the debt and therefore not accounted for within the Lakeville Arena budget. 2012 2013 Increase /(decrease) Estimate Proposed Total % Debt Service Payments $ 88,626 $ 88,626 $ - 0_0% The debt service for Hasse Arena is financed by the City of Lakeville and Independent School District 194. The annual payments ($523,952) are not an obligation of Lakeville Arenas and therefore not included in the budget. 14 2012 2013 Inerease/(decrease) Utilities Estimate Proposed Total % Electric Service $ 178,061 $ 162,348 $ (15,713) -8.8% Gas Service 47,309 41,175 (6,134 -13.0% Total $ 225,370 $ 203,523 $ (21,847 - 21.8% Debt Service. The Ames Arena was financed with the issuance of debt which is repaid with LHA pull -tab revenues ($95,000) and arena operations ($88,626). Final payment on the Ames Arena debt is in August 2019. The LHA pull -tab revenues are pledged to the City for payment of the debt and therefore not accounted for within the Lakeville Arena budget. 2012 2013 Increase /(decrease) Estimate Proposed Total % Debt Service Payments $ 88,626 $ 88,626 $ - 0_0% The debt service for Hasse Arena is financed by the City of Lakeville and Independent School District 194. The annual payments ($523,952) are not an obligation of Lakeville Arenas and therefore not included in the budget. 14 Fund balance Arena revenues are highly cyclical with revenues exceeding expenditures in the months of November through April. However, in the months of May through October, expenditures tend to exceed revenues. Cash balances are at their lowest in October and early November. As such, it is important that the fund balances at the beginning of the year are adequate to provide sufficient working capital to sustain operations through the first 10 months of the year. The proposed budget results in an ending balance of $273,646 and $278,461 for 2012 and 2013 respectively. Operating expense Personnel 2012 2013 Increase /(decrease) 2.8% Estimate Proposed Total (21,847) Operating Revenues Contractual 237,391 186,232 (51,159) Ice Rental $ 914,330 $ 854,680 $ (59,650) -6.5% Other revenues 178,894 166,510 (12,384 -6.9% Total Revenues $ 1,093,224 $ 1,021,190 $ (72,034) -6.6% Operating expense Personnel $ 333,089 $ 342,574 $ 9,485.00 2.8% Utilities 225,370 203,523 (21,847) -9.7% Contractual 237,391 186,232 (51,159) - 21.6% Debt service 88,626 88,626 0.0% Commodities 39,320 37,870 (1,450) -3.7% Capital reserve fund 113,000 116,000 3,000 2.7% Other - 28,000 28,000 #DIV /0! Capital Outlay 52,050 13,550 (38,500) - 74.0 Total $ 1,088,846 $ 1,016,375 $ (72,471 -6.7% Net increase/(decrease) 4,378 4,815 437 Fund balance, beginning 269,269 273,647 4,378 Fund balance, ending $ 273,647 $ 278,462 $ 4,815 The fund balances are adequate and sufficient but not excessive. 15 Capital Reserve Fund The purpose of the Capital Reserve Fund is to provide a financial framework for replacement of the arena infrastructure as it ages including but not limited to roofs, dehumidification, and refrigeration systems. The 2012 Capital Reserve Fund includes $97,090 to pay off the lease agreement for the Rink #1 dehumidification on August 1, 2012. Lease cost is 5.2% - current yield on investments is less then rh of one percent. Retiring the lease will save around $27,000. In addition, the 2013 Capital Reserve Fund includes $141,155 for the replacement of the rink #1 ice resurfacer and $29,264 for the replacement of the two roof top units in the rink #1 lobby. The following is a summary of the Capital Reserve Fund Budget. Revenues Transfers from Operating Fund Interest on investments Total revenues Expenditures Dehumidification Lease Ice Resurfacer Rink #1 RTU - Ames 1 RTU - Ames IA Total expenditures Net increase /(decrease) Balance January 1 Balance December 31 2012 2013 $ 113,000 $ 116,000 272 288 $ 113,272 $ 116,288 $ 97,090 $ 141,155 $ 14,632 14,632 $ 97,090 $ 170,41.9 16,182 (54,131) 271,944 288,126 $ 288,126 $ 233,995 16 Lakeville Arenas Statement of Revenue and Expense 2011 2012 2013 Actual ESTIMATE PROPOSED Operating Revenues Ice Rental $ 859,959 $ 914,330 $ 854,680 Dry floor 34,011 39,638 29,040 Learn to Skate 50,464 42,506 42,720 Admissions- Public Skating 13,848 12,500 12,500 Event Admissions(Net of ISD R( 37,494 34,000 34,000 Skate Sharpening 5,927 4,100 4,100 Skate Rental 6,746 4,000 4,000 Concessions and pro shop - net 3,942 10,200 10,200 Concessions - Lease payments 2,500 2,500 2,500 Vending Machines 5,099 6,550 6,550 Other - Advertising Contract 19,200 20,000 20,000 Vending Royalty 2,000 2,000 - Other- Miscellaneous 3,379 900 900 Total Revenues 1,044,570 1,093,224 1,021,190 Expenditures Salaries and benefits Salaries - Full Time 156,327 152,557 165,076 Salaries - Part Time 111,486 110,585 106,194 PERA 16,248 19,078 19,667 FICA 20,172 20,130 20,752 Hospitalization 21,435 24,228 24,228 Life and Disability 67 76 76 Long Term Disability 365 346 346 Dental Insurance 1,397 1,518 1,518 Workers Compensation 4,407 4,571 4,717 Unemployment Compensation Total 331,903 333,089 342,574 17 Lakeville Arenas Statement of Revenue and Expense 2011 2012 2013 Actual ESTIMATE PROPOSED Commodities Office Supplies 570 545 545 Operating Supplies 8,151 7,375 7,075 Motor Fuels 2,327 2,400 1,250 Cleaning Supplies 9,493 9,000 9,000 Clothing 2,004 2,000 2,000 Equipment Parts 4,415 5,000 5,000 Building Repair Supplies 13,814 12,000 12,000 Small Tools/Equipment 718 1.,000 1,000 Total 41,492 39320 37,870 Other Chames and Services Fiscal. Agent fees 32,000 32,000 32,000 Attorney Fees - 50 50 Bank charges 2,695 2,820 2,820 Audit 4,275 4,650 4,750 Use of Personal Auto 269 750 750 Advertising 3,549 4,000 4,000 Insurance 28,839 29,600 30,458 Water and Sewer Service 11,578 12,000 12,000 Waste Disposal 6,919 6,500 6,500 Telephone 3,629 4,200 4,200 Postage - 340 340 Other Contractual 16,846 19,100 19,100 Equipment Repair and Maintenar 15,657 15,050 10,800 Building Repair and Maintenance 94,325 85,886 36,579 Contract Landscaping 1,759 1,500 1,500 Schools and Conferences 555 1,500 1.500 Business Meetings/Misc. Expens( 63 200 200 Dues /Subscriptions/Licenses 3,532 4,245 4,245 Snow Removal 12,235 13,000 14,440 Capital Outlay 13,830 52,050 13,550 Total 252,554 289,441 1.99,782 is Lakeville Arenas Statement of Revenue and Expense Utilities Electric Service Gas Service Total Contingency Loan payments Debt Service Payments Capital Reserve Fund Total expenditures Net Income (Loss) Fund Balance Beginning of Year Fund Balance End of Year 2011 2012 2013 Actual ESTIMATE PROPOSED 158,672 178,061 162,348 37,510 47,309 41,175 196,181 225,370 203,523 - - 28,000 4,649 - 88,626 88,626 88,626 1 1 n nnn 1 1 Q nnn n r nnn $ 1,025,405 $ 1,088,846 $ 1,016,375 $ 1.9,1.65 $ 4,377 $ 4,815 1)an ins Itio Itio ')7z rAC $ 269,269 $ 273,646 $ 278,461 19