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CR 2003-014 Proposed Increase to Pavilion Hourly Turf Rental Rate . . . CITY OF - January 31, 2003 HOPKINS Coundl Report 03-014 PROPOSED INCREASE TO PAVILION HOURLY TURF RENTAL RATE Proposed Action. Staff recommends adoption of the following motion "Adopt Resolution No. 03-006 increasinq the Hourlv Turf Rental Rate effective March 3. 2003". Overview. The turf rental rate has not been increased since 1997 while demand for turf rental has increased dramatically. After reviewing turf rental rates and the demand for turf rental hours of comparable facilities, staff recommends an increase to the Turf Rental Rate to help budget revenues meet or exceed expenses. Primary Issue to Consider. . Should the hourly turf rental rate increase? Supportinq Information. . Detailed background . Rate comparison with similar facilities . Analysis of issue . Resolution No. 03-006 .QC)YiW/l Don Olson, Pavilion Manager Financial Impact: $3,000 Increase Budgeted: Y/N Yes Source: Pavilion Enterprise Fund Related Documents (CIP, ERP, etc.): 2003 Pavilion Budget Notes: . . . Detailed BackQround. The turf rental rate has remained low to help stimulate usage; but now due to an increase in demand and a stabilized customer base the rate can be increased to better meet expenses. This rate increase will help meet or exceed expenses in the Pavilion budget; expenses which increase each year as the facility gets older and operational costs increase. Non-prime ice and dry floor hourly rental rates have no proposed rate increase to keep rates low in order to attract users and stay competitive with other facilities offering the same types of rentals. A prime ice rate increase has yet to be determined. The proposed rate increase is as follows: Current Rate $140.00 $105.00 $ 65.00 $ 55.00 Proposed Rate to be determined no increase $75.00 no increase Prime Hours Non-Prime Hours Turf Rental Dry Floor Rental All rental rates are determined by recommendation from the Pavilion Manager and the Park Board and must meet the approval of City Council as stated in section 2.10 of Legislative Policy #5-E Pavilion (Ice Arena) operation. Hopkins Park Board reached a consensus to increase the hourly turf rate by $10.00 on January 27,2003. Staff also recommended a $10.00 increase to the Prime Ice rental rate at the January 2ih Park Board meeting and this recommendation was not approved. Staff will revisit the Prime Ice Rate increase with the Park Board before the start of the next ice rental season (September 2, 2003). HOURLY TURF RATE COMPARISON OF SIMILlAR FACILITIES Eagan Civic Center Hayes Park Arena (Apple Valley) Fogarty Arena (Blaine) Centennial Sports Arena (Circle Pines) Average Current $65.00 $75.00 $75.00 $70.00 $71.25 2003 $70.00 ($5 increase in 2004) $75.00 $75.00 $70.00 ($5 increase in 2004) $72.50 The City will be able to increase the turf rate and still be comparable to other arenas. User groups are aware of the proposed change and have not voiced any concerns about the increase. Analvsis of Issue. . Should the turf rental rate increase? The Hopkins Park Board has reviewed the proposed increase and reached a consensus to increase the turf rate at the January 27th Park Board meeting. The purpose of the rate increase is to help revenues meet or exceed expenses in the Pavilion budget. The proposed turf rate at $75.00/hr. is comparable to similar facilities. Staff feels that the market will bear the rate increase. . City of Hopkins Hennepin County, Minnesota Resolution No. 03-006 Hourly Turf Rental Rate WHEREAS, the City of Hopkins has established Legislative Policy #5-E, Pavilion (lee Arena) Operation, Section 5.04; Rate for hourly turf rentals, and WHEREAS, the hourly rate for turf will be determined by recommendation from Pavilion staff and Park Board and approved by the City Council, and, WHEREAS, an adjustment of the turf rental rate must be made to offset operational expenses, and, WHEREAS, surrounding facilities have indicated a comparable rate increase, NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Hopkins hereby repeals the existing hourly turf rental rate effective March 3, 2003, and, BE IT FURTHER RESOLVED, that the hourly turf rental rate in the Hopkins Pavilion are set as follows: Turf Rental Hourly Rate: $75.00 . BE IT FURTHER RESOLVED, that the effective date of the new rate be in force in connection with all billing rendered hereunder from and after March 3, 2003. Adopted by the City Council of the City of Hopkins this 18th day of February, 2003. By Gene Maxwell, Mayor Attest: Terry Obermaier, City Clerk .