Even though Ralston transferred the Ralston Arena to private management under Spectra Management, the Ralston city budget is still dependent on the performance of the arena for this upcoming fiscal year and years to come.
How the arena performs financially will directly affect how Ralston will move forward with the rest of its budget.
According to a memo sent from City Administrator Dave Forest to Mayor Don Groesser and the City Council, “the entire city budget pivots on the performance on the Ralston Arena, not only in fiscal year 2020 but beyond.”
The council voted in February to hire Spectra to operate the arena for the next five years.
The city is paying Spectra $8,000 per month until Oct. 1, 2020, when the fee will increase based on inflation. The city will also pay a maximum of $20,000 qualitative fee based on performance.
There are additional financial incentives Spectra can earn if it exceeds $2.2 million in annual revenue. The city also could pay an incentive to Spectra based on performance areas including innovative marketing, customer service surveys and quality of the food and beverages.
The City Council held budget workshop meetings on Aug. 20 and Aug. 27 for the 2019-20 fiscal year. The council plans on meeting on Sept. 12 at 5:30 p.m. at City Hall to vote on the budget.
The arena is projected to have a net operating loss of $898,000 in fiscal year 2019-20 under Spectra, which is less than the $1,259,108 from the previous fiscal year.
Brian Krajewski, Ralston Arena general manager, said Spectra will take a look at what the arena is doing and where it can cut expenses.
He said moving forward Spectra will ensure shows are being properly billed and make sure it charges the appropriate rates for shows in the arena using arena space.
From there he said Spectra wants to evaluate current shows going on at the arena.
Krajewski said Spectra will be in a better position this time next year to gauge what events bring in money for the arena.
Keno lottery funds will play a role in offsetting the arena loss.
The city has budgeted $788,000 of keno funds to the arena. At the end of the year the city projects to have the same keno lottery fund cash balance of $465,000 it had at the beginning of the year.
The total valuation for Ralston in 2019 is $386,076,165, an increase from 2018’s valuation of $350,995,155. The total tax levy will stay the same at 71 cents. Under the levy, the owner of a $150,000 home in Ralston will pay $1,065 for the city’s share of property taxes.
The city will outsource mowing this year in order to have the public works employees be more efficient.
Earlier this year the council voted to outsource mowing city rights-of-way to a third party contractor for approximately $32,000. The fiscal year 2019-20 budget calls for outsourcing mowing again, this time for $42,000.
According to the memo, “outsourcing mowing will allow for three more public works employees to work on streets and sewers.”
A nine-month analysis of the Department of Public Works conducted in fiscal year 2017-18 suggested, “the vast majority of DPW work hours had been dedicated to park mowing.”
The $42,000 cost associated with outsourcing mowing will be offset mostly by eliminating two seasonal employee positions that cost the city $33,000 in addition to other miscellaneous savings.
Tim Bohling, the city’s finance director, said these are the only two positions being cut this year.
Building permit inspections are another area where the city is looking to outsource.
In this case the city is looking to outsource building permit inspections to Douglas County. This will allow the public works director more time to focus on public infrastructure.
The cost associated with outsourcing to Douglas County is approximately $30,000 of permit revenue Ralston currently receives. Douglas County would collect these fees instead.