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HomeMy WebLinkAboutCity Council Committees - Public Facilities Distict Board - 05/28/2009 (3) KENT Public Facilities District May 28, 2009 Board Members Present: Mike Miller, Greg Haffner, Lew Sellers, Cass Prindle, Randall Smith Others Present: Tim Higgins, Beth Sylves, Ron Harmon, Pat Fitzpatrick, Ben Wolters, Patrick McClusky, Colin Campbell, Robert Nachlinger, John Hodgson, Mel Tate, Jim Berrios, Steve Hunter, Julie Pulliam I. Call to Order a. The meeting was called to order by Chair Mike Miller at 3:30 p.m. b. Approval of Minutes. Sellers moved to approve the minutes of the meeting of March 26, 2009. Haffner seconded and the motion carried. • II. Finance Report a. ShoWare Center Income Statement. Patrick McClusky, Director of Finance, reviewed the income statement for the first four months of the year, which shows a loss of $169,923. He noted that there were a lot of start up costs, as well as some unexpected revenue. He added that a light month in April contributed to the loss. Higgins noted that staffing was at a higher level in the beginning and can be reduced. McClusky predicted a decline in operating expenses, and explained that the total revenue was below what was anticipated but the per cap is higher. He said that budget figures for the second half of the year will not be available until after the Thunderbirds' schedule is out. Colin Campbell said approximately half of the games will be before the holidays and half after. He also said he is working on a process for handling no-shows, and that there will be fewer games per week this year. Later in the meeting, McClusky confirmed for Jim Berrios that he compares the budget to another budget put together by himself and Tim Higgins. Higgins explained for Harmon that April figures came in low because dates had to be held in case there were hockey playoff games, so other events could not be booked. He said he's certain they'll be in the black by the end of the year. Upon a question from Wolters, • McClusky stated that general operating costs should level off by April. • Public Facilities District May 28, 2009 Page Two b. Review of State Sales Tax Revenues. Bob Nachlinger noted that the Public Facilities District has collected $194,000 in sales tax revenues in the first four months of the year, which is 33% below what was anticipated. He noted that the city's revenue is also down. He explained that after the Revenue Service has determined that you've had a loss of greater than one-and-one-half percent during the first twelve months, you can adjust your sales tax rate to compensate for that, and said that the Department of Revenue won't determine the loss until September and that it won't be seen until the end of the year. He added that the change would not affect the public, since the city would get more money and the state would get less. He noted that the change in the tax rate would be permanent. Sales tax revenues from March 2008 through April 2009 were reviewed and explained. C. Financial Update. Nachlinger noted that there is $106,000 in admissions tax, which is the 5% tax on ticket sales, and that the loss on the city's books is $204,170 year to date. He noted that • capital improvements funds come from taxes and outlined the funds which would be available if sales and admissions don't cover the debt service. He emphasized that the ShoWare Center has never had an impact on the City's operating budget. He went over charts showing the annual LTGO debt service by bond issue, the revenues available for capitals, the combined debt service LTGO and Events Center, and no Events Center revenue. He said that even in the worst case scenario, enough money has been allocated to debt services to cover it. Later in the meeting, Nachlinger noted for Berrios that there is approximately $1.5 million in unbudgeted capital funds. Miller suggested temporarily meeting on a monthly basis to monitor the numbers. Nachlinger said he will be able to give better numbers after the Thunderbirds' schedule is set, and Colin Campbell said the schedule will be set by the end of July. Higgins said they have two vacant positions which they will keep vacant as long as possible, and that they are working on cutting direct expenses. III. Operator Update. a. Event Bookings and Attendance. Higgins noted that 96 events and 18 Thunderbirds games have been booked this year. He noted that there were just under 4,000 people at the Lippizoner event over the Public Facilities District May 28, 2009 • Page Three weekend, and that the Styx REO concert was a great success. He said the trend in the industry is slow, but they are actively pursuing promoters. Ben Wolters gave an update on the pursuit of arena football. b. Marketing Update. Wolters noted for Smith that Tarragon feels Kent Station restaurants see a 4-5% bump in sales due to the ShoWare Center. Higgins noted that a concert brings in approximately 80% more money than graduations, and that the ShoWare Center is becoming popular with the Christian market. IV. Seattle Thunderbirds Update. a. Thunderbird Attendance, Sales and Marketing Update. Colin Campbell reported on their plan to increase the usage of tickets, to handle unused season tickets, and to provide benefits to club seat holders. He said 350 of the 500 club seats were sold last year and that they expect 90% to renew. He announced a partnership with the school district which could generate $30,000 for them. • b. Advertising Sales Update. Campbell said the signage on the score clock has been sold and that a three-year deal with Allied Waste has been made for the bottom of the score clock. He said there are five more packages in various stages, and that advertising is going well. C. Suite Sales Update. Campbell said suite sales have been impacted by the economy and noted that four big companies have been lost. He said there are still 10 to 12 parties interested in the suites, but that it's a difficult commitment for them to make. He said they are doing one-time sales, which is working well. He noted for Harmon that the average paid attendance at a hockey game was 4,300, but that when people don't show up, there is an impact at the concession stands. He added that playing fewer games per week will have a positive impact. Higgins explained that promoters think ShoWare and Everett are the same market, and that he is attempting to show them that events could indeed play at both locations. Campbell said it would be rare to have an empty building when there could have been an event, since he and Tim work together daily on upcoming events. He noted for Sellers that the Memorial Cup can be bid on in three years, and that a committee to work on that could be formed any time; he also said that there were probably more no-shows at ShoWare than at Key • Arena, simply because of the number of games. Campbell outlined summer events, including camps. Public Facilities District May 28, 2009 Page Four V. Other Business a. Summary. Miller summarized that this is a difficult economy which has affected the ShoWare Center, and that everyone has challenges but all are working as hard as they can and keeping on top of things. He said no one wants to tie up the City's capital, but that there are funds available if needed. b. Meeting Date. It was agreed that a special meeting will be held at 3:30 p.m. on June 25, 2009, at the ShoWare Center. VI. Adjournment a. At 4:52, Sellers moved to adjourn. Smith seconded and the motion carried. Brenda Jacober, CM City Clerk