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Memo - Update on Overpass Skate Park Finances and options for the 2004 Season• MEMORANDUM • • To: Honorable Mayor and Members of the City Council FROM: Jay Strachota, Facilities Director CC: Steve Mielke, City Manager DATE: March 17, 2004 SUBJECT: Update on Overpass Skate Park finances and options for the 2004 season Background The Overpass Skate Park, which opened in 2000, was a donation by the Hopkins Jaycees. At the time there were a handful of skate parks in the metro area. By the summer of 2003 there were 49 skate parks in the metro area and more planned for construction in 2004. The 2003 net cost of operations to the City to operate the Overpass in 2003 was approximately $13,000. The skate park served approximately 1000 visitors in 2003. The City Council did not approve a 2004 budget for the Overpass Skate Park. Instead the Council directed staff to explore options that would retain a skate park but eliminate or substantially minimize the annual costs associated with operating the Overpass Skate Park. Possible Solutions Explored By Staff Insure the park with a private insurance company that would not require supervision of the park thereby eliminating part time personnel costs. The thought behind this option was that although the insurance may cost more than what the League of Minnesota Cities Insurance Trust charges, the overall cost might be much less than the cost of staffing. By saving the staffing costs the City could afford to pay more insurance costs and still be better off than in the past. The City's insurance broker explored the private market and found that it would in fact be more expensive to operate the park under this scenario. Request that the League of Minnesota Insurance Trust further ease the restrictions on tier II parks. The LMIT requires supervision of all tier II. Tier II parks are defined as those parks that have equipment with more than a four -foot vertical drop. The Overpass is a tier II park. Ellen Longfellow of the LMIT was interested in our challenges as a tier II park facility but thought it highly unlikely that the LMIT would ease the restrictions any further for 2004 having raised the tier I classification to 4' of vertical height and easing some equipment requirements in 2003. The LMIT will want a few years of claims history on the 2003 changes before they consider further restriction changes. Sell the Overpass tier II equipment and use the proceeds to purchase tier I equipment. True Ride is the original manufacturer of the Overpass equipment. In talking with True Ride representatives they thought the equipment would have enough resale value to purchase a comparable amount of tier I equipment with the proceeds on the sale of the existing equipment. Some of the points the True Ride people brought up were - there is not a lot of used equipment on the market, the Overpass equipment is already an older generation of equipment, True Ride has no experience selling used equipment but would be willing to help get the word out and • work with the purchaser to assure that the equipment is disassembled and reassembled properly. • The only ongoing cost to the City for tier I equipment would be maintenance similar to maintenance of playground equipment handled by the Parks Department. If the City bought new tier I equipment it could be placed at one site or numerous park sites. If the equipment was placed at the current Overpass site then the larger question is does the Council want an unsupervised skate park in the location of the Overpass Skate Park? Altering the existing Overpass equipment to make it tier I equipment thus removing the staffing requirements. True Ride says the equipment design layout is based on the height of the equipment and the vertical drop. If we take two feet off the top of a piece of equipment thereby removing the greatest part of the vertical drop the function of the equipment will be changed. You would have equipment that looks like skate park equipment but does not function well and users will recognize this. That's what the manufacturer said Cutting two feet off the top of tier II equipment to make it tier I equipment is exactly what the City of Burnsville did with their tier II equipment and their usage is up (it's free admission unsupervised now) and no complaints according to the Burnsville Facilities Manager. There would be the one time cost of time and materials in altering the equipment. The ongoing maintenance, once the equipment is tier I, is handled by the Parks Department. And under this scenario again the question of does the Council want an unsupervised skate park at the current skate park site needs to be answered. Fund the Overpass Skate Park with contributed revenue. The most aggressive of the options this approach will have the Overpass remain as a tier II supervised park and donations, grants, and advertising revenues will be used to offset operations cost, admission would be free. Attendance numbers at the park have fallen each year. If the park could be operated with free admissions in 2003 the City could then judge the demand for the tier II park without the admittance fee as a barrier. If attendance did not grow substantially then that would indicate the demand does not exist and a conversion to tier I would make sense. If attendance flourished under the free scenario then contributions and advertising revenue would be more attractive to sell considering the number of participants served. Staff has been working on this option with the Hopkins Jaycees as a vested partner. Currently the organization is reviewing a request for funding. The Hopkins Jaycees organization is aware of the status or the Skate Park's finances. Staff will also be applying for a School and Community in Partnership (SCIP) grant is due March 22 and awarded by April 18. We have also been working with Lisa Brodsky the grant writer /fundraiser for the Depot Coffee House. True Ride has made a verbal commitment for a small donation if this concept gets off the ground. The challenge has been getting the first sizable contribution to leverage other contributions. The • SCIP grant application under Grant Criteria looks for " ongoing projects having multiple • • • partners ". The groups and funders we have talked to are most interested in multiple partners and free admission. If there is not a sizable contribution to leverage funding with by mid -April then it is doubtful that this approach is feasible. Staff Recommendation Staff recommends waiting a few more weeks for the possibility of a sizable donation to leverage more funds to keep the Overpass Skate Park intact. The Hopkins Jaycees are currently looking at the funding request and should formulate some opinions on the future of the park through discussions on funding. Knowing these opinions will be helpful as we move forward. If funding does not become available then staff would look to the Council for direction on whether the current site is acceptable for a tier I unsupervised park, and a decision to sell or alter the existing equipment would be made based on the direction of the Council.