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PR 08/01/2011 - 29918CITY OF FRIDLEY PARKS & RECREATION COMMISSION MEETING — AUGUST 1, 2011 CALL TO ORDER: Chairperson Solberg called the August 1, 2011 Parks & Recreation Commission Meeting to order at 7:15 p.m. at Springbrook Nature Center ROLL CALL: Members Present: Tim Solberg, Michele Barrett, Marcy Sibell, Dave Kondrick, Mike Heintz Others Present: Jack Kirk, Director of Parks and Recreation Siah St. Clair, Director of Springbrook Nature Center Malcolm Mitchell, Chair of the SNC Foundation Mark Daly, Program Supervisor APPROVAL OF Mav 23, 2011 PARKS & RECREATION COMMISSION MINUTES MOTION by Mr. Kondrick, seconded by Ms. Barrett, to approve the minutes of the May 23, 2011 meeting. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON SOLBERG DECLARED THE MOTION CARRIED. APPROVAL OF PARKS & RECREATION COMMISSION AGENDA FOR AUGUST 1, 2011 MOTION by Mr. Heintz, seconded by Ms. Sibell, to approve the agenda for the August 1, 2011 meeting. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON SIBELL DECLARED THE MOTION CARRIED. 1. STAFF REPORT a. Program Update Mr. Kirk stated that a Program Update has been included with the agenda packet providing information on programs and activities over the past couple of summer months. The summer program has been going well. b. Park Maintenance Report Mr. Kirk stated that Mr. Lindquist was not able to be at the meeting, but has provided a written report of park maintenance activity over the summer. The rainy weather has been a challenge for the park workers to keep up with the required mowing of the parks and other properties. Mr. Kirk stated that even with fewer part-time employees, the parks crew has been doing a good job with our park facilities. Parks and Recreation Commission Meetinq - Auqust 1, 2011 Paqe 2 c. Springbrook Nature Center Report Mr. Kirk stated that since Siah St. Clair is at the meeting this evening, he would ask him to present this report. Mr. St. Clair stated that a gazebo was completely burned to the ground earlier this year due to arson and he is getting bids to have it rebuilt. Work should begin on the replacement structure during the beginning of this month. Mr. Heintz asked if the replacement gazebo would be constructed of wood or a more fire resistant material. Mr. St. Clair stated that after consulting with some building material experts, they have determined that it would be best to go with a special fire retardant lumber. Mr. St. Clair stated that there have been a number of problems with the floating boardwalk that he showed pictures of to the Commission members before the meeting. Temporary repairs have been made, but a long range plan for replacing or improving the boardwalk needs to be developed. Mr. St. Clair stated that on Sunday, July 17, the nature center had a special event commemorating the 25t" anniversary of the Springbrook tornado. The attendance was much lower that expected for this event due to the extremely hot and humid weather. Mr. St. Clair further stated that staff has prepared and submitted a grant request for Lessard Sams Legacy funds from the State of Minnesota. The grant would fund prairie and forest habitat improvements in the park. The City has asked for approximately $190,000 and if successful, the grant work would occur in 2013 through 2015. The grant would require a cash match from the City in the amount of $5,500 and an additional $5,000 from the Springbrook Nature Center Foundation. 2. NEW BUSINESS a. Updated Springbrook Nature Center Business Plan Mr. Kirk stated that when the Springbrook Nature Center SPRING project was first proposed, one of the concerns expressed by a couple of the City Council members at the time was the ability of the nature center revenues to keep pace with rising expenditures. They wanted to know how the larger building and expanded facilities would be maintained and operated in the future years. There was even some talk about requiring the SNC Foundation to escrow a large sum of money to cover operating costs for a certain number of years. To ease the concerns related to revenues and expenditures, a business plan was presented to the City Council at a work session showing projected income and expenditures associated with the project. Mr. Kirk further stated that this business plan was presented six years ago and since the SPRING project has not gotten off the ground yet, the business plan needed some updating. An updated plan has been worked on by Siah and representatives of the Foundation and will be presented to the Commission tonight. The Springbrook Nature Center joint planning committee has reviewed the updated plan and is confident it Parks and Recreation Commission Meetinq - Auqust 1, 2011 Paqe 3 shows the resources will be available to handle the nature center operating costs associated with the project. Mr. St. Clair stated that there is a lot of material that he is handing out to the Commission members as part of the business plan. He would like to first go through what the assumptions were that led to the development of the current updated plan. What we are doing here is planning for what is expected to happen to our costs to run the nature center if the SPRING project is completed as planned. In addition to the costs, revenues need to be identified to cover these costs. Mr. St. Clair stated that in order to project these costs and revenues, we need to make certain assumptions. The following assumptions are being made for this business plan. 1. The base year for the updated business plan is the 2012 nature center budget as presented to the City Council. 2. The plan expects that phase 1 of the SPRING project will be completed by April 1, 2013. Phase 1 includes the new berm along 85t", the celebration plaza and the outdoor pavilion. 3. The plan expects that phase 2 of the project will be completed by April 1, 2014. Phase 2 includes the outdoor amphitheater and the outdoor classrooms. 4. The plan expects that phase 3 of the project will be completed by April 1, 2016. Phase 3 includes the expanded interpretive center building and the parking improvements. 5. The plan does include some additional staff, most of whom will be part-time. One new full-time interpretive program staff person and a permanent part-time custodian would need to be employed in 2016 after completion of the expanded building. 6. The plan acknowledges that any new projected revenues and expenditures related to the SPRING project are not authorized until officially approved by the City Council. 7. The plan includes the development of an on-line store for the nature center to be developed in 2012. 8. The plan assumes that there will be a 2% annual increase in revenues and expenditures. 9. New revenues and expenditures are added to the plan as the activities and facilities are phased in. 10. Two types of projections have been made with the business plan. We have a conservative projection that only increases programming and resulting revenue by a small amount and then we have a more moderate projection that increases these by a little more, but not tremendously so. Mr. St. Clair stated that the Commission members may notice that because of the green technology being planned for the new facilities, the resulting efficiencies will yield favorable utility costs. The heating and cooling costs for the expanded interpretive center are projected to be nearly the same as they are now for a much smaller building. Parks and Recreation Commission Meetinq - Auqust 1, 2011 Paqe 4 Mr. St. Clair referred the Commission members to page two of the materials to look at the revenue sources for the Springbrook Nature Center budget. He showed current levels of revenue, followed by expected new revenue under the conservative plan and a third level expected under the moderate plan. The plan shows revenue from summer day camps, school groups, Saturday programs, instructional programs, a store/concession operation, voluntary contribution boxes, weddings and SNC Foundation support. Mr. St. Clair stated that the current building size limits the number of groups and the number of students in the groups that can participate in programs. The expanded interpretive center will allow for more and larger groups which will translate into additional revenue. Mr. St. Clair stated that they are projecting the net profit from a store and concession operation would be about $10,000 per year. This is based on information from similar sized nature center operations. That is about the maximum they feel can be brought in. Mr. St. Clair stated that the SNC Foundation has made a commitment that at the end of 2019, they would start contributing $20,000 per year toward the operation of the nature center. They are currently fundraising for the SPRING project and using all the money they bring in for capital purposes to actually do the construction. When the construction is complete, they would like to start contributing an annual amount for operations. Mr. St. Clair stated that the revenue generated by Springbrook activities and programs in 2010 was just over $96,000. The moderate plan shows a total of $337,000 in revenue in year 2019 or a 350% increase. The new facilities and additional programming changes the revenue stream tremendously. Mr. St. Clair stated that twenty years ago he told the Foundation that when the nature center reached 100,000 visits per year, they would be at capacity. After that number of visits, he felt the park would start to degrade. Estimated number of visits per year now is at 200,000. With the new outdoor classrooms and the other additional facilities planned as part of the SPRING project, he now estimates the total nature center capacity would be 350,000 visits per year. Mr. St. Clair showed the Commission an 8-year business plan using both conservative and moderate projections. He stated that the important thing to note on both of the projection plans was the very bottom line showing the net revenue or deficit for each year. This bottom row shows if at the end of the year you are putting money away into the reserve fund or if you spent more than you brought in. He further stated that in the conservative plan it shows a deficit in 2016 through 2018, the first three years of operating the new building. However, the net revenue realized from 2012 through 2015 more than covers the amount of the deficit for those three years. After the third year of the new building, the conservative plan starts showing a positive net revenue once again. This is not unusual with a business plan to show a loss during the first part of opening a new facility. There are start up costs and it takes some time to get to full operating capacity and build up the revenue stream. Mr. St. Clair stated that the moderate plan shows only one year with a very small deficit, that being 2016, the year the building opens. All other years show a positive net revenue and net revenues are significant over the eight years of the plan. Parks and Recreation Commission Meetinq - Auqust 1, 2011 Paqe 5 Mr. St. Clair stated that both plans show all costs are covered by the revenue stream over the eight years of the plans. Ms. Sibell asked why we are anticipating a loss for years five, six and seven in the conservative plan. Mr. St. Clair stated that the new building would open in year five and would require an additional full-time program staff person and half-time custodian. We are being conservative here and are anticipating that it may take a couple of years get all programs and rentals going strong. By being very conservative, we are saying that it may take a while to reach the higher revenue stream. The moderate plan shows a higher expected revenue stream associated with the new building activities. The moderate plan shows only the one year where expenditures are higher that revenues and that is the year the building opens. Mr. Heintz asked if we could reduce our costs in those first years of the new building by using part-time staff and cutting back in programming costs. Mr. Mitchell stated that it was likely that we could do that to some extent to keep the expenditures down during the first couple of years. Mr. St. Clair stated that he feels even the moderate plan is very conservative when he talks with staff at the Silverwood park and other nature centers. They wanted a business plan that was realistic, but not one that someone could say the rentals and program revenue were way out of line. Mr. Heintz asked where the net revenue shown each year would go back to. Would it go the City's general fund or be kept for future Springbrook operations? Mr. St. Clair stated that the City has a special reserve fund for Springbrook Nature Center where any net resources have been kept since 2005, the year the levy was instituted. This is not part of the general fund. There is currently around $90,000 in this reserve. This was set up to cover future expenses at the nature center, such as a new roof, new furnace, etc. Mr. Heintz stated that by bringing in more than it takes to operate the nature center may lead someone to ask why the special levy for the nature center can't be reduced, which would reduce the cost for Fridley residents on their taxes. Mr. St. Clair stated that we know there are going to be future maintenance and equipment replacement costs associated with the operation of the nature center. Some of those will be very large costs, such as the repair and replacement for the floating boardwalk that we talked about in the pre-meeting tonight. Having this reserve fund will help insure that we can take care of needed maintenance and replacement in the future. Mr. St. Clair stated that as far as reducing the levy to Fridley citizens, he would not say that is impossible. If we start generating tremendous revenue from the programs and facility rentals, reducing the levy is something that could be looked at. Mr. St. Clair stated that page twelve shows the new expenses that will be associated with each budget line item over the life of the moderate plan. Page thirteen shows the new revenues expected over those same years of the moderate plan. Mr. Mitchell stated that pages fourteen and fifteen of this packet shows the new expenses and revenues in the budget, along with the 2% annual increase in all numbers. Parks and Recreation Commission Meetinq - Auqust 1, 2011 Paqe 6 Mr. Kondrick stated that there has been a lot work involved putting together the business plan numbers. He appreciates having all of this information. Mr. St. Clair stated that he wanted to give an update on the Foundation's SPRING project business campaign committee fundraising to date for phase one. The fundraising results to date total $122,500 or 24.5 % of the goal to complete the phase one facilities. He further stated that the Foundation members and staff are convinced that they will need a significant portion of the SPRING project funding to come from State bonding money in order for the project to become a reality. Mr. Mitchell stated that they are trying to be as diligent as they can about the projections and how the facilities will be used. They want to give a realistic picture to the Commission and then to the City Council on how the expenditures and revenues will be with the SPRING project. Mr. Mitchell stated that he wanted to give a special thanks to Mayor Scott Lund for his assistance with the fundraising for this effort. He has been instrumental in helping the Foundation open doors to potential donors and they really appreciate his support. Mr. Kirk stated that we started a Springbrook Nature Center Joint Committee back when the levy was passed. The Committee is made up of representatives of the Foundation, the Parks and Recreation Commission and City staff. We meet periodically to discuss the nature center and projects that are on the horizon. It is intended to make sure the Foundation, Commission, staff and the City are all on the same page. It has been a good working group and Dave Kondrick has been representing the Commission on the committee. The SNC Joint Committee has looked at the plan and is confident of the financial picture it creates for this project. Mr. Kirk further stated that the next step will be to have this updated business plan presented to the City Council, likely at an upcoming Council work session. The City Council is always interested in the recommendations and comments of the Parks and Recreation Commission on projects. If the Commission is supportive of the updated business plan, it would be helpful to have a motion of support. This could be done at tonight's meeting or at a future meeting if the Commission wanted to study this plan further. Mr. Solberg stated that he would like to see references to other facilities like Silverwood Park or other nature centers that were the basis for budget figures included in the plan. It would help to justify how the revenues or the costs used in the plan were arrived at. He further stated that he is very impressed with how much detail is included in this business plan. It gives him a level of confidence that the nature center can function well on an on-going basis. MOTION by Mr. Kondrick, seconded by Ms. Barrett, to support the updated business plan for the Springbrook Nature Center as presented by Siah St. Clair, Nature Center Director. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON SOLBERG DECLARED THE MOTION CARRIED. Parks and Recreation Commission Meetinq - Auqust 1, 2011 Paqe 7 b. Adult Winter Athletic League Fees 2010 —`11 Mr. Kirk stated that he has included in the agenda packet a staff recommendation for the Winter Athletic League fees. The fees have not gone up much over the past several years, due to both the economy and the need to keep our fees competitive with neighboring communities. Mr. Kirk stated that the recommended fees for the 2010 — 2011 winter adult athletic fees are as follows: Wednesday Mens D Basketball........... $499 Thursday Fun Basketball ..................... $499 Co-Rec Volleyball ................................ $150 Co-Rec Broomball ............................... $260 Mens Broomball ... ... ... ... ... ... ... ... ... ... $260 Boot Hockey ........................................ $299 MOTION by Mr. Heintz, seconded by Ms. Sibell, to approve the staff recommended 2010-2011 Adult Winter Athletic League Fees with an option to reduce the fees if necessary to remain competitive with neighboring communities. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON SOLBERG DECLARED THE MOTION CARRIED. 4. ADJOURNMENT MOTION by Mr. Kondrick, seconded by Ms. Barrett, to adjourn the August 1, 2011 meeting at 8:35 p. m. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON SOLBERG DECLARED THE MOTION CARRIED AND THE AUGUST 1, 2011 MEETING ADJOURNED.