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Williston Fitness Center Resident Rates for HopkinsMEMORANDUM To: Mayor and City Council Members Mike Mornson, City Manager From: Dave Johnson, Recreation Services Director Kelly O'Dea, Williston Center Manager Date: December 11, 2012 Subject: Williston Fitness Center Resident Rates for Hopkins Background The cities of Hopkins and Minnetonka have a long tradition of providing quality recreational programs and services to community residents. The primary venue is through the Hopkins - Minnetonka Joint Recreation Program, however in recent years new partnerships have been developed involving the scheduling and fee structure of athletic fields, Depot supervision, kitchen space and financial support, and marketing assistance for the Pavilion. While programming has been provided jointly between the two cities since the 1960's, management of facilities, other than Shady Oak Beach, has been the responsibilities of each city independently. For the city of Hopkins this includes the Depot, Pavilion, Center for the Arts, Skate Park and Activity Center; and for the city of Minnetonka, the Ice Arena, Community Center, Gray's Bay Marina, Lindbergh Center, and the Williston Fitness Center. These facilities are operated independently of the Joint Recreation Program as each city is responsible for the operational and capital costs that frequently are not covered by generated revenues. Over the past several years, Hopkins residents have inquired as to why resident rates do not apply at the Williston Fitness Center. This is complicated by the fact that for registration purposes such as swimming lessons or a fitness class that is held at the center, they receive resident priority. However for general memberships they are considered a non- resident and do not receive a reduced rate. Requests for resident rates have become increasingly more frequent since the city of Minnetonka completed a $4.5 million renovation of the facility in 2011, including the addition of a children's splash pad and indoor play area. Over the past year, the number of overall Williston Fitness Center memberships has increased 50% from 4,769 to 7,155. Because use of the facility from December to March is approaching capacity, the city of Minnetonka is not promoting additional use through partnerships with businesses and other communities. However, there are several advantages to expanding the partnership between Hopkins and Minnetonka to provide this benefit to Hopkins residents. Summary Resident/Non-Resident fees only apply when an individual or family purchases a membership to the facility. Residents and non-residents pay the same rate for a daily pass to use the facility ($8 for adults and $5 for youth ages 1-14). Williston Center Resident Rates for Hopkins December 11, 2012 Page 2 Currently there are 207Hopkins residents who have active memberships for the Williston Fitness Center. Reducing their rate to match a Minnetonka resident rate would result in a revenue loss of $9,708 annually for the facility. In order for Hopkins residents to receive resident rates, this loss of revenue would need to be addressed through a financial or reciprocal arrangement. Staff has developed the following three options for preliminary discussion: Option 1: Financial compensation Under this option, the city of Hopkins would compensate the city of Minnetonka annually for the existing revenue loss amount of $9,708 for Hopkins residents to receive resident rates. Annually, this amount could be reduced if memberships declined, but not increased if memberships increased. A credit could also be considered for the addition of new memberships. Option 2: Adjustment to Shady Oak Beach agreement Included in the language of the Shady Oak Beach management agreement is a requirement for the city of Minnetonka to pay 67% of all annual maintenance costs. Over the past two years, this stipulation has resulted in reimbursements averaging $19,200 to the city of Hopkins. The major expenses are attributed to staff time and benefit charges for work completed at the beach. Option 2 would be to reduce this reimbursement by a set amount or percentage over a predetermined period of years as compensation. Option 3: Reciprocal agreement for an existing service Several area cities currently maintain reciprocal agreements that allow for resident use of facilities by another city. For example, Hopkins residents receive resident rates at the St. Louis Park Water Park in exchange for St. Louis Park residents receiving the same at the Hopkins Skate Park. While there are currently no known needs that exist, staff can continue to explore this option to compensate for all or part of the overall cost. Conclusion Improvements made to the Williston Fitness Center were done primarily to meet ADA requirements and make the facility usable to all ages. The new children's amenities combined with the family locker rooms and child care room, help make the facility inviting to younger families. Staff believes that this is the Hopkins demographic that would most benefit from a reciprocal agreement between Hopkins and Minnetonka. Other features that are unique to the Williston Fitness Center include the batting cages, indoor tennis courts/lessons, and gymnasium.