06-07-2021 Council Work Session Packet

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Page 48 of 73  No sponsorship or advertising revenue is included in the revenue projections, although the opportunity will exist for some revenue in these areas.  No grant funds are shown in support of user financial aid, but the opportunity will exist for some support of the financial aid programs. Year Zero Year Zero in the Budget is the period following the City taking control of the facility up to the re- opening of the Recreation and Community Center. These expenses include the following  Pre-opening expenses o Staff costs pre-opening o Marketing o Cleaning and Building prep o Re-branding of Recreation Center, including new signage o Equipment purchases o Pool start-up o Other start-up expenses  Building Expenses o Utilities o Maintenance and grounds keeping o Security o Miscellaneous expenses Currently all City Year Zero Building expenses are covered by the State of Minnesota leasing of the building as a COVID vaccination site through June 30. Long Term Capital Replacement and Maintenance Fund It is very important that the City budget for projected long term facility capital replacement and maintenance. The annual maintenance staffing and budget should support best practice annual maintenance and upkeep, reducing the potential for premature long term replacement and maintenance. ISG has included an annual budget line item for allocation to a Long Term Capital Replacement and Maintenance Reserve Fund. This annual allocation to this Fund begins in Year 3 at $60,000 and ramps up to $80,000 in Year 4 and then increases by 3% annually. Total Reserve Fund accrual over the first twenty years of operation is as follows:  Year Five: $ 292,400  Year Ten: $ 742,997  Year Fifteen: $1,265,362  Year Twenty: $1,870,927