HomeMy WebLinkAboutIM 10-058, Res 10-042 Appropriate PIA Funds 7-27-10 Page 1 of 2 IM 10-058
CITY OF PALMER INFORMATION MEMORANDUM NO. 10-058
SUBJECT: Resolution No 10-042: Approving a Supplemental Appropriation of $885,385 from
the General Fund (Fund 01) Undesignated Fund Balance to the Capital Project Fund (08) and
Approving a Scope of Work and Budget for Expansion of the Palmer Ice Arena
AGENDA OF: July 13, 2010
Council action:
Approved for presentation by B.B. Allen, City Manager ______________________
Route
To: Department/Individual: Initials/Date: Remarks:
X Originator – City Manager 6/28/10
City Clerk
City Attorney
Director of Administration
Director of Community
Development
Director of Community Services
Director of Public Safety
Director of Public Works
Attachment(s): Resolution no. 10-042
Operating Performa Costs
Fund Balance and Cash Information Sheet
Certification of Funds:
No fiscal impact.
Funds are budgeted from this account number:
X Funds are not budgeted. Budget modification is
required. Affected account number: $885,385
Unrestricted/undesignated fund balance
(after budget modification):
General Fund undesignated fund
balance after this appropriation is
estimated to be $1,652,000,
which is below the two month
fund balance reserve of
$1,763,000.
Director of Administration Signature: ____________________________________________
Page 2 of 2 IM 10-058
Summary statement: Resolution no. 10-042 appropriates $885,385 from the general fund
undesignated fund balance to the capital projects fund to provide for additional seating and the
expansion of the Palmer Ice Arena over a two year period.
Background: When the Palmer Ice Arena was constructed it was envisioned as a multi-use
arena. The facility is heavily utilized throughout the fall and winter months for hockey activities
however ice time is still available during the non-peak hours on the weekdays during school.
The indoor track around the ice rink is used during the lunch hour. However, the building sits
empty for the summer months.
The City is now preparing for the next step in the use of this building by developing a plan that
will increase the seating capacity of the arena by over 1,000 seats. This will convert the
structure into a multi-purpose facility which can be used year-round. Palmer is limited in its
ability to offer events involving large audiences such as graduations, trade shows and important
meetings attracting a large audience. After the facility expansion is complete, the building can
be used year-round for a wide variety of various community events.
Recently the City of Palmer was approached by the Avalanche Hockey Club LLC, a member of
the North American Hockey League, to determine the City’s interest in becoming the
“hometown” of their club. This exciting possibility does not come without cost. To accommodate
the North American League rules, the team venue must seat a minimum of 1,500 people. The
development plan also reflects the addition to the building of two locker rooms and two
additional restrooms to meet City building code.
The construction is planned as a phased project. Phase One consists of increased seating, a
lighting upgrade, speaker system, raised seating area for executive boxes, and a new exterior
door prior to the beginning of the 2010-11 season. Phase Two includes a 20’ addition to the
west, new locker rooms, a new office space, new rest rooms, and an upgraded kitchen facility
prior to the start of the 2011-12 season. In addition to this work, additional parking must be
provided to meet anticipated demand which is estimated to cost approximately $300,000, for a
total cost of approximately 1.2 million dollars.
There are several options available to the City to help underwrite the cost of the expansion
including Title Sponsorship of the building, grants from Rasmuson and the Mat-Su Health
Foundation, and capital contributions from the Avalanche Hockey and Palmer Hockey
Association. The following amounts will be sought:
Building Title Sponsorship – 5 year Agreement $ 300,000
Rasmuson Grant – Construction grant $ 200,000
Mat-Su Health Foundation Grant – Construction Grant $ 200,000
Total to be Sought: $ 700,000
A contract with the Alaska Avalanche Hockey Club LLC is also in the July 13, 2010, City Council
Packet. The contract includes a $50,000 capital contribution, paid over four years.
Administration recommendation: Adopt resolution no. 10-042.
_______________________________________________________________________________________
City of Palmer, Alaska Resolution No. 10-042
Page 1 of 2
Introduced by: City Manager Allen
Date: July 13, 2010
Action: Postponed to July 27, 2010
Date: July 27, 2010
Vote: Unanimous
Yes: No:
Erbey
Vanover
Brown
Best
Hanson
Combs
CITY OF PALMER, ALASKA
RESOLUTION NO. 10-042
A RESOLUTION OF THE PALMER CITY COUNCIL APPROVING A SUPPLEMENTAL
APPROPRIATION OF $885,385 FROM THE GENERAL FUND (FUND 01) UNDESIGNATED
FUND BALANCE TO THE CAPITAL PROJECT FUND (08) AND APPROVING A SCOPE OF
WORK AND BUDGET FOR EXPANSION OF THE PALMER ICE ARENA
WHEREAS, the Palmer Ice Arena was planned to be a multi-purpose structure
from inception; and
WHEREAS, the Alaska Avalanche Hockey Club LLC desires to make Palmer its
home ice; and
WHEREAS, the City of Palmer will realize additional revenue from a lease
agreement with the Avalanche and increased sales tax revenues from food, beverage
and ticket sales; and
WHEREAS, the increase of 27 home Avalanche games will produce increased
economic activity throughout the City of Palmer; and
WHEREAS, the additional seating, lighting and upgraded sound system will allow
not only the Alaska Avalanche to use the Palmer Ice Arena, but will benefit the
community overall and allow for increased multi-purpose use of the facility.
NOW, THEREFORE, BE IT RESOLVED by the Palmer City Council that a
supplemental appropriation of $885,385 from the general fund (fund 01) undesignated
fund balance to the capital project fund (fund 08) is approved.
BE IT FURTHER RESOLVED BY THE Palmer City Council that the scope of work
and budget for the Expansion of the Palmer Ice Arena is approved.
Phase One - 2010
Super Structure to Support Bleachers $ 12,000
Additional Bleachers $ 100,000
Lighting Upgrade $ 150,000
_______________________________________________________________________________________
City of Palmer, Alaska Resolution No. 10-042
Page 2 of 2
Phase Two – 2011
Passed and approved by the City Council of the City of Palmer, Alaska this
twenty-seventh day of July, 2010.
John C. Combs, Mayor
_____
Janette M. Bower, MMC, City Clerk
New Speaker System $ 25,000
Raised Seating Platform $ 10,000
Exterior Door $ 3,500
Contingency $ 30,000
Total: $ 310,000
General Conditions $ 14,540
Concrete & Masonry $ 16,560
Metals $ 55,252
Thermal and Moisture Protection $ 37,348
Doors and Windows $ 11,632
Interior Finishes/Specialties $ 42,952
Plumbing HVAC $ 61,068
Electrical Systems $ 51,448
Demolition $ 5,000
Entry Canopy $ 20,000
Bleacher Sub Structure $ 26,550
Construction Contingency $ 34,235
Bleachers to Maximize Seating Capacity $ 159,300
A/E Design Fees – estimated $ 19,500
Total $ 555,385
Income and Expense Performa
Prepared by Bill Allen 6-16-10
Ticket Sales
Average Ticket Price - $10
700 Average Attendance $ 7,000.00
27 Home Games
$ 189,000.00
3% Sales Tax
$ 5,670.00
Food Sales
Beer/Wine Sales $ 32,400.00
Concession Stands $ 13,500.00
Merchandise Sales $ 20,000.00
$ 65,900.00
3% Sales Tax
$ 1,977.00
Advertising & Sponsors
Revenue $ 317,000.00
3% Sales Tax
$ 9,510.00
Gaming
Revenues $ 14,670.00
3% Sales Tax
$ 440.10
Miscellaneous
Revenue $ 43,200.00 ?????
3% Sales Tax
$ 1,296.00
REVENUE TO CITY PER SEASON
Projected Sales Tax Revenue
$ 18,893.10
Negotiated Ice Rental
$ 30,500.00
TOTAL PROJECTED REVENUE
$ 49,393.10
ADDITIONAL OPERATING EXPENSES TO CITY PER SEASON
Based on 10% of Current Arena Actual Costs
Labor - Janitorial & Zamboni $ 23,404.00
Utilities
$ 13,269.00
Insurance Estimate
$ 1,000.00
PROJECTED OPERATING EXPENSES
$ 36,673.00
PROJECTED ANNUAL OPERATING REVENUE TO CITY $ 12,720.10
Fund Balance vs. Cash
Fund Balance in governmental funds, such as the general fund, is the difference
between the assets and liabilities. In other words, Assets – Liabilities = Fund
Balance. The fund balance varies depending on the increases and decreases of
revenues and expenditures each year. When revenues exceed expenditures the
fund balance increases. Conversely, when expenditures exceed revenues it
decreases the fund balance.
An adequate level of unreserved fund balance is necessary to cover future risks.
The City of Palmer’s fund balance policy has been to retain between two and four
months of operating expenditures or currently $1.7 million - $3.5 million.
Retaining an adequate level of fund balance to handle emergencies, such as the
Alaska Street water main burst (approximately $1.5 million) is essential to support
and serve the citizens. The City of Palmer was fortunate to have grants in place to
fund the Alaska Street emergency. Having an excessive amount of fund balance
can give the impression to citizens that the City is collecting too much or not
providing essential services. Part of balancing the appropriate amount of
unreserved fund balance is setting aside amounts for replacement of equipment
and maintenance of buildings. It’s important to have a fund balance policy and to
follow that policy. Credit agencies monitor an entity’s fund balance and its policy
to ensure compliance. The City of Palmer’s charter restricts the issuance of debt
unless approved by the voters. The City of Palmer does not have a line of credit
with a bank so it relies on the fund balance to provide local match for grants and
cover emergencies.
Cash is the amount of money in the bank or investments. As of the end of May,
the City had approximately $6 million in cash and investments. The City needs to
have enough liquid cash to pay its current bills. Cash is part of the asset section in
the Balance Sheet equation, (Asset – Liabilities = Fund Balance). Also part of the
asset section is accounts receivable. For example, with grants that are on a
reimbursement basis expenditures are paid up front by the City. When the grant is
billed the receivable and revenue are increased. Grant receivables are generally
reimbursed within one month from billing. If a receivable is not collected then the
fund balance is reduced.
The undesignated fund balance is what is available in a governmental fund to
spend and is not the same as cash; although cash is a component of the fund
balance among other assets and liabilities.
DEPARTMENT OF
ADMINISTRATION
Kelli Veech
Director
Matt Hill
Deputy Director
HR / IT
Finance
Phone: (907) 745-3271
Direct: (907) 761-1303
Fax: (907) 745-0930
Email: kveech@palmerak.org
231 W. Evergreen Ave.,
Palmer, Alaska 99645-6952
www.cityofpalmer.org