#2 Janesville Ice Rink Report
CITY MANAGER DEPARTMENT MEMORANDUM
July 12, 2010
Updated August 16, 2010
TO: City Council
FROM: Eric J. Levitt, City Manager
SUBJECT: Discussion/possible action on report from Rink Management
Services Corporation on the ice rink evaluation.
Summary / Background
In 2008, the City performed some preliminary evaluations of issues and possible
deficiencies at the ice rink. During the spring of 2009, the City experienced
several small failures and one large failure of the ice cooling system. In addition,
there have been some continual structural concerns with the facility including the
roof. Temporary repairs have been completed over the last year while a review
of the current ice rink status has been on-going.
A group of Janesville residents, now affiliated with the Janesville Youth Hockey
Association, began developing a proposal to form a partnership with the City of
Janesville to build a new rink rather than renovate the current rink. The proposed
rink is located adjacent to the Youth Sports Complex and built on 11 acres of City
owned land. The proposed partnership evolved over the summer into the
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attached proposal. The proposal on October 26 had the following elements:
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The building and one sheet of ice would cost approximately $4 million (not
including land).
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The expansion to a second sheet of ice would cost approximately an
additional $1 million.
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The City is requested to commit an initial $2 million and an additional
$500,000 when funds are raised for a second sheet of ice.
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The proposal projected the City to close its current $85,000 actual subsidy
to a $0 operational subsidy when 2 sheets of ice are operational.
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The proposal discusses the expansion of users at the current rink over the
last year
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The City Manager indicated to the group that due to concerns with
competitive bidding, it would be his recommendation that if the City had
ownership and responsibility for the operations of the facility that he
believes that it would be best to competitively bid the project management
and construction.
The City Council in October approved $2 million in public funds for a one-sheet
ice rink and up to $2.5 million in public funds for a two-sheet ice rink if private
funds were raised to complete the facility. It was also approved to place the rink
on the South side after discussion on location. The City currently has $2 million
available for the rehabilitation of the current rink, the construction of a new rink or
other eligible uses.
The City contracted with an outside firm, Rink Management Services
Corporation, this Spring for approximately $10,000 to do an overview evaluation
of the current rink and the plans to construct a new rink. Typically to perform an
intensive study of the current rink and evaluate the feasibility of a new facility
would cost between $30,000 and $60,000. However, the City Manager believed
that an abbreviated study for under $10,000 would provide enough valid
information to provide an informed decision.
Possible Motion
I move to approve moving forward with contributing up to $2 million for a
one-sheet rink that is expandable to two-sheets in the future if sufficient
funds are raised by the private group by ________________.
City Manager Recommendation
As the City Council is aware this project has been an evolving concept or project
since the Spring of 2009. Due to that there have been a variety of issues that
have arisen during this dialogue.
Issues of focus included:
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Location of a new rink (currently the Council has designated a south side
site as the preferred site.)
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Whether to renovate the current rink or build a new facility.
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Whether to financially support constructing one sheet or two sheets.
Rink Management Services Corporation prepared a report that provided an
overview of the following issues:
1. An overview of the current rink and the ability for it to continue to operate.
2. Evaluation of the current design of the proposed rink from an operational
standpoint and capital.
3. An overview of a Revenue/Expenditure evaluation for both current rink
and a 2 sheet ice rink.
After reviewing the attached report and having discussions with the firm, the City
Manager has the following recommendations.
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It appears that the current expenses would be close to $1 million for the
basic renovation of the rink. This does not include any major
enhancements.
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If the City could limit its contribution to $2 million and the contribution of
City owned land for a new rink, I believe that would be the best course of
action if it also meant that the new Central Fire Station would be included
at the current rink location.
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If land needed to be purchased for the Central Fire Station, I recommend
that renovation of the current rink be evaluated as the best option.
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I believe based on the report that the City should limit the contribution to a
single sheet rink at this time with expansion capability. If other parties
prefer a two sheet rink, the additional costs should be paid for from non-
city funds. The reason for this recommendation is that I am not convinced
that the property tax subsidy will be eliminated and am concerned that
two-sheets may even place more burden on the subsidy if certain
assumptions don’t play out.
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If the private group wants the City to revisit the site location of the south
side, I would recommend that this occur at a future meeting.
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The City should maintain ownership of the current or a new rink in the
near term.
Update to Recommendation as of August 16th
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The Ice Rink Advisory Committee met on August 11 to discuss the report from
outside consultant. The Advisory Committee is looking to evaluate the amount of
ice time purchased currently and the capacity in some of the user groups to
increase their use to determine whether there is capacity to build two-sheets.
As the City Manager has continued to evaluate the issue, I maintain my
recommendation to construct a one-sheet ice rink that is expandable. I believe
that a two-sheet ice rink should not be constructed until the City would be able to
project an operating budget that would not have a subsidy. In evaluating the
report, I believe that the expenditures would increase and that revenues could
not increase to the level that would create a break-even budget.
In evaluating past operations I have found that while the City’s expenses have
increased 230,000 in 2002 to $275,000 in 2008; revenues decreased from
$237,000 to $188,000 despite a doubling of open skate revenues. In 2009 we
are able to increase revenues to approximately $220,000 and shrink the subsidy.
But these overall trends concern me when evaluating a two-sheet rink option.
Based on current expenditure levels, I would anticipate expenses climbing to at
least $325,000 depending on how the second sheet was operated which would
minimum of $105,000
require revenue to increase a to break even in operating
expenses.
Finally, I recommend that a financial commitment needs to occur from the private
group by the end of this year, in order to move forward with renovating the
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current rink if we do not construct a new rink. If we went forward with renovating
the rink, I am estimating approximately $1.2 million in costs for basic design and
improvements.
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