03-04-2024 Council Work Session Packet

Home Search

STAFF ORIGINATOR: WORK SESSION DATE: TOPIC: CITY COUNCIL WORK SESSION STAFF REPORT ITEM NO. 5 Hannah Lynch, Finance Director March 4, 2024 Rookery Financial Update ______________________________________________________________________________ BACKGROUND The Rookery Activity Center began operations in Spring 2022 and completed its first full fiscal year in 2023. The 2024 budget includes a $500,000 tax levy which brings tax levy support for recreation funding back to pre-pandemic levels. Prior to the COVID-19 Pandemic and the opening of the Rookery, the tax levy supported the YMCA facility and recreation programming at roughly $490,000 annually. While the increased tax levy supports a 2024 budget with a projected operating income of $11,266, if budgeted revenues are not realized or expenditures surpass expectations there may be a need to assess facility offerings, membership rates, and/or an increased tax levy. The City of Lino Lakes received $2,417,214 of American Rescue Plan Act (ARPA) and Resolution No. 21-150 approved the spending plan for the provision of government services to re-open the Rookery Activity Center and pay-go spending for capital improvements and purchases. Those funds have been spent in full as of 12/31/2023 and the detailed use of funds is attached. A portion of the funds ($700,463) was used to help relieve operating deficits in 2022 and 2023, while the remainder of the funds were used for renovations and costs of start-up. Currently at 12/31/2023 while adjusting for accruals, the cash balance is a deficit of $439,335. This deficit is calculated after a transfer in of $152,223 from the YMCA Tax Abatement Bond Debt Service Fund due to the debt maturing in 2023. In order for the Rookery to continue on a profitable trajectory, the Council should consider relieving the cash deficit. If the recreation tax levy was continued at pre-pandemic levels beginning in 2022, the Rookery would have $675,000 ($500,000 in 2022 and $175,000 in 2023) in additional cash at 12/31/2023. The estimated 2023 General Fund surplus is $850,000, allowing for a transfer to the Rookery Activity Center Fund at year-end. 15