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Home My WebLink About02-12-18 City Commission Packet Materials - AII7. Sports Park Foundation Loan Request for Sports Park FieldsCommission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Assistant City Manager Kristin Donald, Finance Director Mitch Overton, Parks & Recreation Director SUBJECT: Consider Bozeman Sports Parks Foundation request for a loan to install artificial turf fields at Bozeman Sports Park, to be repaid with field user fees. MEETING DATE: February 12, 2018 AGENDA ITEM TYPE: Action RECOMMENDATION: Direct the City Manager to continue to work with the Sports Park Foundation to develop agreements to require the Sports Park Foundation to pay an amount equal to the City’s debt payments on a loan of up to $1,700,000 to construct sports fields and related infrastructure, including purchase of two turf fields, and allow for the Foundation to collect user fees for the Sports Park and operate the Sports Park through a user group or management agreement for Commission approval at future dates. SUGGESTED MOTION: I move to direct the City Manager to continue to work with the Sports Park Foundation to develop agreements to: (i) require the Sports Park Foundation to pay an amount equal to the City’s debt payments on a loan of up to $1,700,000 to construct sports fields and related infrastructure, including purchase of two turf fields; and (ii) authorize the Foundation to collect user fees and operate the Sports Park through a user group or management agreement for Commission approval at future dates. BACKGROUND: In 2014, the City purchased 80 acres on the corner of Baxter Lane and Flanders Mill Road for the construction of the Bozeman Sports Park, a public recreational and athletic complex. The purchase of the property was encouraged by citizens involved in various soccer and lacrosse programs, and other user-groups for rectangular field sports. The application to use TOP Funds to purchase and develop the property involved their commitment to fundraise and help build a long-term partnership with the City that could benefit taxpayers, park users, and the Bozeman economy. To that end, they formed a non-profit organization, The Sports Parks Foundation, Inc., whose mission is to support the development and use of both city-owned Bronken Fields Park and the Bozeman Sports Park, through fees charged to users and charitable donations. On February 23, 2015, the City and the Bozeman Sports Parks Foundation, Inc. entered into an agreement for the development of the Bozeman Sports Park. The agreement calls for the 363 Foundation to contribute the equivalent of $976,100 for the physical development of athletic fields and park amenities. To date, over $8.4 Million of city Trails Opens Space and Parks funding has been dedicated to development of the site. Currently, the Sports Parks Foundation has raised commitments totaling over $1.2 Million. The Foundation has received over $335,000 in cash and has outstanding pledges of $742,000. Recently, the City awarded the bid to complete construction of Phase 1A of the Bozeman Sports Park, which will build the first 4 grass fields at the northern end of the site. With a $176,000 contribution from the Foundation, the fields will be sodded (instead of seeded) for more immediate use by soccer, lacrosse, and other users. This will allow use a full year in advance of seeded fields. It is expected that the fields will be able to be used this fall. When combined with the 4 grass fields at Bronken Park, we will have a total of 8 grass fields available for use. Recently, the Sports Parks Foundation has approached us about the need to have at least 10 fields available so that current demand from existing teams could be met – and large soccer and lacrosse tournaments could be held in Bozeman. Without a 10-field complex, Bozeman would not be a competitive host city for large tournaments. There is a need for artificial turf fields so that our playing season can be extended in the spring and fall months and the fields can be used more intensely each day that they are needed. Once the 4 grass fields are installed in Phase 1A, the city has no other financing plans or funding available to complete the build-out of any other phases of the Sports Park. Neither Phase 1B nor other future phases of the Sports Park project are not included on any Capital Improvement Plans. 364 The Loan: The Foundation is asking us to consider borrowing money to install two turf fields in the area shown as Phase 1B, with a repayment model similar to one that Gallatin County granted the BAHA (Bozeman Area Hockey Association) for construction of the Ice Rink at the Fairgrounds. They have requested a loan of $2 Million, paid back over 20 years. Here is the outline of the model: • City borrows money, under its general borrowing authority, to construct turf fields. • Foundation agrees to make all debt payments when they become due, from field user fees. • However, in the event that the Foundation cannot make the debt payment, the City’s General Fund will need to make the payment. The City has a limited amount of borrowing authority that we can use for general-government purposes without having to obtain voter approval. (Montana Code Annotated 7-7-4104) In the past, we have used this authority to borrow money for street lighting LED improvements, and the street-maintenance district portion of the South 8th Street Reconstruction SID. We have also planned to use this authority in the current budget year for the Story Mill Recreation Center improvements and the Rose Park (25th Avenue) street project. The Adopted Capital Improvements Plan includes additional projects that are to be funded with this authority in future years. Accounting for both the outstanding and planned projects, the table below shows the availability we have under state law, which could be used for the Foundation’s request. There are two adjustments that can be made, given what is now known about Rose Park and the construction of Cottonwood Road. • GF254 – 25th Street from Oak to Tschache is currently budgeted in FY18. This project near Rose Park would be carried-over to FY19. • GF260 – Sports Park Cottonwood Water/Wastewater improvements would be moved to FY22, which matches where the Cottonwood Road project was planned in the Street Impact Fee CIP. We have a maximum amount of $1.7 million that could be borrowed this spring. In order to obtain a 20-year term, we will need to advertise and see which lenders are willing to extend the loan and at what interest rate. At an estimated interest rate of 3%, annual loan payments would be $113,000. Attached as an exhibit to this memo is a multi-year analysis of our Borrowing Authority under MCA 7-7-4104, with the loan amount included. Borrowing Authority Under MCA 7-7-4104 10% Limit - Total General Fund Budget FY18 FY19 FY17 29,413,605 $ 2,941,360.50 3,161,161.20 FY16 28,018,209 $ 2,801,820.90 2,941,360.50 South 8th:Outstanding Prin ( Feb 2018 substracted ) FY22 $ 586,454.00 522,542.00 Upgrade Street Light Intercap (Feb 2018 subtracted) $ 173,611.00 160,548.00 GF266: Story Mill Park Imps FY18 $ 188,500.00 182,169.84 GF206: Bronken Pathway FY 18 88,246.00 85,282.54 GF254: 25th Street From Oak to Tschache FY18 - moved to FY19 287,000.00 GF260: Sports park Cottonwood Water/Wastewater - moved to FY22 Borrowing Authority Remaining $ 1,765,009.90 $ 1,703,818.12 365 The Artificial Turf Fields: The proposal to install artificial turf (“turf”) fields instead of additional grass fields is important to the financing plan and use of the park. These fields will be able to support much more-intense use and will be able to be played on at times of the year that grass fields cannot be used due to weather and maintenance issues. This expanded use enhances our community’s access to fields – and expands the Foundation’s revenue stream to repay the loan. These two artificial turf fields also have the advantage of saving an estimated 1-2 million gallons of water each year and more than 5,000 lbs. of pesticides. The turf fields have a 10-year life before the turf needs to be replaced. Replacement costs are estimated to be approximately 50% of the initial construction and installation costs, and a separate “turf replacement” account is planned by the Foundation. A decision about moving forward with the loan is needed now in order for the turf fields to be installed this summer, with drainage and grading done at the same time as our grass fields are constructed. If this proposal is approved, we could open the park this fall with four (4) grass fields and two (2) turf fields, for a total of six (6) fields at the Sports Park. We anticipate that we would advertise a formal bid for the fields, and the Foundation has already done some initial work to understand options and costs. There are two unique opportunities that have been identified: • The Foundation has been awarded a grant from the U.S Soccer Foundation to fund 15% of the turf fields. The grant is restricted to the use of AstroTurf, Inc. as the supplier. • Because both MSU and Bozeman School District 7 are installing turf fields on their properties this summer, the Foundation believes we could see significant savings on field costs (approximately $150,000 or more) in a bid from that supplier, Turf Field, Inc. Based on this, we believe it is likely that we’ll receive strong bids form one, or both, of these suppliers. The Repayments: The City would enter into a repayment agreement with the Sports Parks Foundation that would call for the group to provide all of the debt service payments, so that the City’s General Fund budget would never be impacted. The Foundation has prepared thorough pro-forma income statements (attached) to show how the loan payments could be made each year through increased user-fees to the sports groups that currently exist in Bozeman. Their pro-formas also show that annual amounts will be available for field maintenance contributions to the City and hiring a fields manager to handle the logistics and support of the properties (at both Bronken and Sports Park.) User fees will be charged based on the number of billable field-hours used by the various soccer, lacrosse, rugby and other groups for both youth and adult leagues. Hourly rates will be similar to the rates charged by MSU for field space in the past (MSU is taking fields off-line for future use.) The revenue model provides for increased billable hours and close-to year round use with turf fields, which can be brushed off providing a desirable feature in our snowy climate. Building fields now through this loan/user fee repayment model better matches the ability of users to contribute to field construction. Most field users are children of young families who have limited abilities to provide large up-front capital contributions for field construction. However, they can pay an hourly user fee that is then pooled to provide a steady source of 366 repayment – allowing users to contribute from the onset towards the successful completion of the Sports Park. Our Continued Partnership with the Foundation: According to their calculations, annual net revenues of the Foundation after debt payments have been made will be between $100,000 to $200,000. These amounts could support long-term turf replacement (described above), accelerated debt-service payments back to the City, and/or development and construction of future phases of the Sports Park and improvements to Bronken Park. The Foundation would likely be a component unit of the City for financial statement purposes – triggering our need to have audited financial information each year from the Foundation, and the inclusion of that information in our Comprehensive Annual Financial Report (CAFR). Increased city representation on the Sports Park Foundation Board of Directors is recommended, so that there is more regular information and involvement in the operational issues, financial progress, expansion projects, and debt payments related to the Park. UNRESOLVED ISSUES: None. ALTERNATIVES: Do not enter into the loan and agreements. FISCAL EFFECTS: Described Above. Attachments: #1 - 2/23/2015 City-Sports Park Agreement #2 – Sports Park Master Plan Map #3 – Sports Parks Pro Forma Financial Plans #4 – Borrowing Authority under MCA 7-7-4104 Report compiled on: February 1, 2018 367 368 369 370 371 372 373 374 375 376 378 379 380 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 398 399 21 BOZEMAN SPORTS PARK MASTER SITE PLAN BOZEMAN, MONTANA OVERALL PLAN C01 THE STANDARD FIELD SIZE FOR THE COMPLEX IS 240 FEET X 400 FEET = 96,000 SQ FT PER FIELD, NOT INCLUDING SIDELINES AND SPECTATOR AREAS 400 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 2023-2024 Years 7-20 (2024- 2037) Not factoring in growth in revenue or expenditures Gross Revenue $ 241,525 $ 343,800 $ 371,160 $ 435,360 $ 482,915 $ 548,450 $ 630,250 Operating Expenditures $ 110,000 $ 168,000 $ 173,000 $ 230,000 $ 239,000 $ 239,000 $ 239,000 Net Revenue Available for Debt Service $ 131,525 $ 175,800 $ 198,160 $ 278,160 $ 243,915 $ 309,450 $ 391,250 Estimated Annual Debt Service $ 40,000 $ 90,000 $ 100,000 $ 110,000 $ 120,000 $ 150,000 $ 150,000 Debt Service Coverage 3.29 1.95 1.98 2.53 2.03 2.06 2.61 Net Revenue After Debt Service Available for Reserves $ 91,525 $ 85,800 $ 98,160 $ 168,160 $ 123,915 $ 159,450 $ 241,250 Assumptions: Loan Amount $1,700,000 Interest Rate 3.00% Rate/Hour $ 35.00 $ 40.00 $ 40.00 $ 45.00 $ 45.00 $ 50.00 $50.00 Grass Fields (Bronken 4 Plus Sports Park) 8 8 8 12 12 12 14 Turf Fields 3 4 4 4 4 4 4 Total Fields 11 12 12 16 16 16 18 PRO-FORMA SUMMARY 401 Bank Loan Approximate Approximate Width/Yards Length/Yards Total SF Cost/SF USSF Grant Total Cost/Field 85 125 100000 $ 7.50 $ - $ 750,000.00 Assumptions Total Cost Loans/Capital Fields $ 2,250,000.00 City $ 1,700,000.00 Lights $ - BSPF $ 225,000.00 Rates/Term # Fields 3 TBID Rate 3.75% Other $ 300,000.00 Term 8 Additional Bank Loan $ 25,000.00 Bank Loan Payment ($3,674.96) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 $ 91,525.00 $ 85,800.00 $ 98,160.00 $ 168,160.00 $ 123,915.00 $ 159,450.00 $ 241,250.00 $ 241,250.00 Less PMT ($3,674.96) ($3,674.96) ($3,674.96) ($3,674.96) ($3,674.96) ($3,674.96) ($3,674.96) ($3,674.96) Total $ 87,850.04 $ 82,125.04 $ 94,485.04 $ 164,485.04 $ 120,240.04 $ 155,775.04 $ 237,575.04 $ 237,575.04 Escrow after 10 Years $ 1,655,260.40 402 Fiscal Year 2018-2019 Rate $35.00 Hours/Slot 1.5 Fields 3 Turf 8 Grass Use Type Fall Weeks Spring Weeks Summer Weeks Fields Slots/ Day Usage Days/Wk TTL HRS Field Usage Fee Soccer Comp Weekday 12 12 5 3 5 1800 $ 94,500.00 Weekend 12 12 4 4 1 384 $ 20,160.00 Rec Weekday 0 10 3 1 2 60 $ 3,150.00 Weekend 12 12 4 5 1 480 $ 25,200.00 Adult Weekday 0 4 2.5 4 0 $ - Total Soccer $ 143,010.00 Lacrosse Comp Weekday 0 12 3 2 5 360 $ 18,900.00 Weekend 12 1 2 1 36 $ 1,890.00 Weekend 10 3 3 1 90 $ 4,725.00 Total Lacrosse $ 25,515.00 Rugby Weekday 10 10 1 2 5 200 $ 10,500.00 Total Rugby $ 10,500.00 Number Cost Tournamants 2 $ 20,000.00 $ 40,000.00 Camps 1 $ 5,000.00 $ 5,000.00 Concessions $ 10,000.00 Parking $ 5,000.00 Banners $ 2,500.00 $ 62,500.00 Total Fee Income $ 241,525.00 403 Expenses 2018-2019 Bond Data Annual Payment $ 40,000.00 Maintenance Fields G 8 Fields T 3 Cost/Field G $ 7,000.00 Cost/Field T $ 3,000.00 Manager $ - Misc $ 45,000.00 Total Maintenance $ 110,000.00 Total Expenses $ 150,000.00 404 Fiscal Year 2019-2020 Rate $40.00 Hours/Slot 1.5 Fields 4 Turf 8 Grass Use Type Fall Weeks Spring Weeks Summer Weeks Fields Slots/ Day Usage Days/Wk TTL HRS Field Usage Fee Soccer Comp Weekday 12 12 5 3 5 1800 $ 108,000.00 Weekend 12 12 4 4 1 384 $ 23,040.00 Rec Weekday 0 10 3 1 2 60 $ 3,600.00 Weekend 12 12 6 4 1 576 $ 34,560.00 Adult Weekday 12 4 2.5 4 480 $ 28,800.00 Total Soccer $ 198,000.00 Lacrosse Comp Weekday 0 12 3 2 5 360 $ 21,600.00 Weekend 12 2 2 1 48 $ 2,880.00 Weekend 0 12 3 2 1 72 $ 4,320.00 Total Lacrosse $ 28,800.00 Rugby Weekday 10 10 1 2 5 200 $ 12,000.00 Total Rugby $ 12,000.00 Number Cost Tournamants 3 $ 20,000.00 $ 60,000.00 Camps 2 $ 5,000.00 $ 10,000.00 Concessions $ 20,000.00 $ 20,000.00 Parking 2 $ 5,000.00 $ 10,000.00 Other $ 5,000.00 $ 5,000.00 $ 105,000.00 Total Fee Income $ 343,800.00 405 Expenses Year 2 Bond Data Annual Payment $ 90,000.00 Maintenance Fields G 8 Fields T 4 Cost/Field G $ 7,000.00 Cost/Field T $ 3,000.00 Manager $ 55,000.00 Misc $ 45,000.00 Total Maintenance $ 168,000.00 Total Expenses $ 258,000.00 406 Fiscal Year 2020-2021 Rate $40.00 Hours/Slot 1.5 Fields 4 Turf 8 Grass Use Type Fall Weeks Spring Weeks Summer Weeks Fields Slots/ Day Usage Days/Wk TTL HRS Field Usage Fee Soccer Comp Weekday 12 12 6 3 5 2160 $ 129,600.00 Weekend 12 12 4 4 1 384 $ 23,040.00 Rec Weekday 0 10 3 1 2 60 $ 3,600.00 Weekend 12 12 7 4 1 672 $ 40,320.00 Adult Weekday 12 4 2.5 4 480 $ 28,800.00 Total Soccer $ 225,360.00 Lacrosse Comp Weekday 0 12 3 2 5 360 $ 21,600.00 Weekend 12 0 2 2 1 48 $ 2,880.00 Weekend 0 12 3 2 1 72 $ 4,320.00 Total Lacrosse $ 28,800.00 Rugby Weekday 10 10 1 2 5 200 $ 12,000.00 4436 Total Rugby $ 12,000.00 Number Cost Tournaments 3 $ 20,000.00 $ 60,000.00 Parking 2 $ 5,000.00 $ 10,000.00 Concessions $ 20,000.00 Camps 2 $ 5,000.00 $ 10,000.00 Other $ 5,000.00 $ 5,000.00 $ 105,000.00 Total Fee Income $ 371,160.00 407 Expenses Year 3 Bond Data Annual Payment $ 100,000.00 Maintenance Fields G 8 Fields T 4 Cost/Field G $ 7,000.00 Cost/Field T $ 3,000.00 Manager $ 55,000.00 Misc $ 50,000.00 Total Maintenance $ 173,000.00 Total Expenses $ 273,000.00 408 Fiscal Year 2021-2022 Rate $45.00 Hours/Slot 1.5 Fields 4 Turf 12 Grass Use Type Spring Weeks Summer Weeks Fall Weeks Fields Slots/ Day Usage Days/Wk TTL HRS Field Usage Fee Soccer Comp Weekday 12 12 6 3 5 2160 $ 145,800.00 Weekend 12 12 5 4 1 480 $ 32,400.00 Rec Weekday 10 0 3 1 2 60 $ 4,050.00 Weekend 12 12 7 4 1 672 $ 45,360.00 Adult Weekday 10 5 2.5 4 500 $ 33,750.00 Total Soccer $ 261,360.00 Lacrosse Comp Weekday 12 0 4 2 5 480 $ 32,400.00 Weekend 12 2 2.5 1 60 $ 4,050.00 Weekend 10 0 3 2 1 60 $ 4,050.00 Total Lacrosse $ 40,500.00 Rugby Weekday 10 10 1 2 5 200 $ 13,500.00 Total Rugby $ 13,500.00 Number Cost Tournamants 3 $ 25,000.00 $ 75,000.00 Camps 2 $ 5,000.00 $ 10,000.00 Concessions $ 20,000.00 $ 20,000.00 Parking $ 10,000.00 $ 10,000.00 Other $ 5,000.00 $ 5,000.00 $ 120,000.00 Total Fee Income $ 435,360.00 409 Expenses Year 4 Bond Data Annual Payment $ 110,000.00 Maintenance Fields G 12 Fields T 4 Cost/Field G $ 9,000.00 Cost/Field T $ 3,000.00 Manager $ 60,000.00 Misc $ 50,000.00 Total Maintenance $ 230,000.00 Total Expenses $ 340,000.00 410 Fiscal Year 2022-2023 Rate $45.00 Hours/Slot 1.5 Fields 4 Turf 12 Grass Use Type Spring Weeks Summer Weeks Fall Weeks Fields Slots/ Day Usage Days/Wk TTL HRS Field Usage Fee Soccer Comp Weekday 12 12 6 3 5 2160 $ 145,800.00 Weekend 12 12 6 4 1 576 $ 38,880.00 Rec Weekday 0 5 0 2 1 5 50 $ 3,375.00 Weekend 12 12 7 4 1 672 $ 45,360.00 Adult Weekday 10 6 2.5 4 600 $ 40,500.00 Total Soccer $ 273,915.00 Lacrosse Comp Weekday 12 0 4 2 5 480 $ 32,400.00 Weekend 12 2 2.5 1 60 $ 4,050.00 Weekend 10 0 3 2 1 60 $ 4,050.00 Total Lacrosse $ 40,500.00 Rugby Weekday 10 10 1 2 5 200 $ 13,500.00 Total Rugby $ 13,500.00 Number Cost Tournamants 4 $ 25,000.00 $ 100,000.00 Camps 2 $ 5,000.00 $ 10,000.00 Concessions $ 20,000.00 Parking 4 $ 5,000.00 $ 20,000.00 Other $ 5,000.00 $ 155,000.00 Total Fee Income $ 482,915.00 411 Expenses Year 5 Bond Data Annual Payment $ 120,000.00 Maintenance Fields G 12 Fields T 4 Cost/Field G $ 9,000.00 Cost/Field T $ 4,000.00 Manager $ 65,000.00 Misc $ 50,000.00 Total Maintenance $ 239,000.00 Total Expenses $ 359,000.00 412 Fiscal Year 2023-2024 Rate $50.00 Hours/Slot 1.5 Fields 4 Turf 12 Grass Use Type Spring Weeks Summer Weeks Fall Weeks Fields Slots/ Day Usage Days/Wk TTL HRS Field Usage Fee Soccer Comp Weekday 12 12 6 3 5 2160 $ 162,000.00 Weekend 12 12 5 4 1 480 $ 36,000.00 Rec Weekday 0 5 0 3 2 5 0 $ 11,250.00 Weekend 12 12 8 4 1 768 $ 57,600.00 Adult Weekday 10 6 2.5 4 600 $ 45,000.00 Total Soccer $ 311,850.00 Lacrosse Comp Weekday 12 0 4 3 5 720 $ 54,000.00 Weekend 12 2 3 1 72 $ 5,400.00 Weekend 12 0 4 2 1 96 $ 7,200.00 Total Lacrosse $ 66,600.00 Rugby Weekday 10 10 1 2 5 200 $ 15,000.00 Total Rugby $ 15,000.00 Number Cost Tournamants 4 $ 25,000.00 $ 100,000.00 Camps 2 $ 5,000.00 $ 10,000.00 Concessions $ 20,000.00 Parking 4 $ 5,000.00 $ 20,000.00 Other $ 5,000.00 $ 155,000.00 Total Fee Income $ 548,450.00 413 Expenses Year 6 Bond Data Annual Payment $ 150,000.00 Maintenance Fields G 12 Fields T 4 Cost/Field G $ 9,000.00 Cost/Field T $ 4,000.00 Manager $ 65,000.00 Misc $ 50,000.00 Total Maintenance $ 239,000.00 Total Expenses $ 389,000.00 414 Borrowing Authority Under MCA 7‐7‐4104 10% Limit ‐ Total General Fund Budget FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY17 29,413,605 $ 2,941,360.50 3,161,161.20 3,161,161.20 3,161,161.20 3,161,161.20 3,161,161.20 3,161,161.20 FY16 28,018,209 $ 2,801,820.90 2,941,360.50 3,161,161.20 3,161,161.20 3,161,161.20 3,161,161.20 3,161,161.20 South 8th: Outstanding Prin FY22 $ 586,454.00 522,542.00 393,755.00 263,700.00 132,332.00 Upgrade Street Light Intercap $ 173,611.00 160,548.00 147,294.00 133,838.00 120,183.00 113,286.00 106,325.00 GF266: Story Mill Park Imps FY18 $ 188,500.00 182,169.84 175,586.47 168,739.77 161,619.20 154,213.81 146,512.20 GF206: Bronken Pathway FY 18 88,246.00 85,282.54 81,791.40 78,775.07 75,450.87 71,993.72 68,398.27 GF254: 25th Street From Oak to Tschache FY18 ‐ moved to FY19 287,000.00 277,632.04 267,338.56 256,914.14 246,072.74 234,797.69 GF260: Sports park Cottonwood Water/Wastewater ‐ moved to FY22 364,000.00 351,776.24 339,063.54 Sports Park Foundation Loan $ 1,700,000.00 1,615,000.00 1,515,000.00 1,405,000.00 1,285,000.00 1,115,000.00 945,000.00 Borrowing Authority Remaining $ 65,009.90 $ 88,818.12 $ 570,102.29 $ 843,769.80 $ 765,661.99 $ 1,108,818.69 $ 1,321,064.50 415