HomeMy WebLinkAbout1986-04-14 Council Packet - Work SessionKenai City Council
Work Session
April 14, 1986
Community Center
. CITY OF KENAI
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NOTICE OF WORK SESSIONS
The following work sessions are scheduled for Aprils
1. Tuesday, April 89 19869 600 PM in the Council
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chambers. To be discussed:
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Ile Day care/senior center locations
b. Commission A Committee standard ordinance
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co Leasing Leasing to private non-profit organisations
d. Landeosping on Airport Way project
2. Monday, April 14, 19869 7s00 PM in the Council
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chambers. To he discusseds
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a. Community Center
In addition, this is to remind Council of the Waste Disposal
Nearing to be held at the Borough, also on Monday,
April 14, 1966..
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Janet Whelan, CMC
City Clerk
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DATED: April 49 1986
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!l M 1+01 Nillissr J. Brighton, City Manages
n Nt Charles A. grown, Finance Director (egQ
DMI April 9, 1986
SUBJEClt Community Center (For April 14, 1986 Meeting)
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SaYly Bailie and I discussed the Community Center today. A lot of ideas and
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proposals have been presented over the last two years, and she and I believe
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that perhaps it vould be worthwhile to present some of these on one document.
This is not meant to be a total proposal; it's a means of putting the Coamunity
Center operations in perspective.
Construction and Bondi
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pparent y, Cermea 0 ntoli has said that for $2.5 million, we can build the
Center, furnish it, and provide a gravel parking lot. I believe the idea is to
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oak the voters to approve a bond sale of $2.5 million. If the state gives the
City $1.5 million, we will build a $4 million facility including a paved parking
lot and landscaping. If the state does not give us a grant, we will build the
$2.5 million facility. Bond debt service of $2.5 million at 7.52 over 20 years
is about $245 0000 per year.
ftratW Costs
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Personnel costs for a full-time managers a full-time secretary, and 1000 hours
of part-time help are about $910000 per year. That, along with rough estimates of
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other operating costs are listed below:
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Personnel $ 91,000
Utilities 25,000
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Telephone 2,000
Janitorial 20,000
Transportation 5,000
Promotion 5,000
-. Supplies and Misc. 200000-
Insurance 10�000
Annual Operating Costs
Depreciation has not been included, but may be accounted for depending on fund
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structure.
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Revenues
erta n assumptions must be made in order to make revenue estimates. For the
most past, the assumptions were provided by others. I am unable to vouch for
their reliability, but we have to start someubere.'
ASSUMPTIONS: Annually, we would have 10 large conventions (350 people) and 15
small conventions (150 people). All conventionu will last for 3 days.
Large conventions will use 3 meeting rooms each day. Small conventions will
use 2 meeting rooms each day. All conventions will use the ballroom. For
sales tax purposes, we've assumed that each person will spend 3 full days in
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Kenai, and spend $150 per day in Kenai. ($also tax would actually be
recorded in the General Fund.)
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Rental Estimates area
10 Large Conventions:
Ballroom (5 R $400) + (5 X $600) 8 51000
3 Rooms (10 X 0125 X 3 X 3) 110250
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15 Small Conventions:
Ballroom (15 X $400) 6,000
2 Roams (15 x $125--x 3 x 2) 110250
SO disc. Rentals (50 x $125) _ 6.250
Total Rentals gO
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Sales Tax Estimates are:
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• 10 Large Conventions (10 x $150 x 350 x 3 x 32) $ 47,250
15 Small Conventions (15 x $150 x 150 x 3 x 32) 30,375
Total Sales Tax
Catering Percentage
Bed Tax: Some people have proposed a bed tax of,
say, 52, Thac would be about $3 per room.
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After currently planned construction, Kenai
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shoule have about 240 rooms available.
240 x $3 x 180 days (50x occupancy) 8 129.6 0'
Other Considerations
In t e eming 1 87) budget, we are appropriating $210,000 for the 1974 G.O.
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Debt. That is the last time this will be needed. A person could argue that the
debt payments on the new bands will more or less replace the debt payments on
the old bonds and that the contribution from tax money is therefore reduced. I
certainly wouldn't dispute that. but I might go on to say that the $210,000 not
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needed in 87.86 could be used for any general government purpose (debt service
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being, one of them).
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Iiied on the above discussion, we can -summarize as follows:
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Revenues:
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Rentals $ 390750
Sales tax 77,625
Catering percentage 89000
Bed tax 129 600
Total Revenue Zgp,9��r
Operating Costs (178,000)
Excess of Revenues over Operating Costs 09
Debt Service (245
Excess of all Costs over Revenues
If we initiate a bed tax, and the sales tax figures are even close, the revenues
are probably there to support the operation (not the debt service).
If we accept the arguments put forth in "other considerations" above, and use
the $2101,000 of money not needed for the 1974 Debt for the Community Center
debt, I think a person could seasonably say that this project has a good chance
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of not forcing a property tow increase.
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I don't think you can say that it Will support itself.
The bed tax is certainly
not all attributable to the convention trade and, therefore, Will not be a
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revenue of the Center. But, the revenues, from Whatever sources, might be
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available to avoid a property tax increase.
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