Council reviews community center user rate increase

Monticello Community Center users will be getting $80,000 in new exercise equipment next year and well as a 10 percent rate hike that nets the city $124,000.
City council members reviewed both items Nov. 26. The rate increase was discussed during a special budget workshop earlier in the evening and is scheduled for council action Dec. 10.
Kitty Baltos, community center director, presented the equipment purchase to city leaders during the council’s regularly scheduled meeting last Monday.
The council voted 4-1 to accept a bid from Life Fitness for the new equipment, which will be installed in the recently renovated space on the MCC’s second level. Councilmember Glen Posusta voted against the equipment purchase last week. “I don’t have a problem with getting new equipment,” he said during discussion. “I just have a problem getting it all at once. I feel we should keep in mind the huge cost overruns we’ve had on this project.” Posusta was referring to change orders totaling more than $300,000. Re-roofing the Natatorium ($95,728) and sandblasting joist and deckwork ($161,207) were the top unexpected expenses encountered during the building renovation project.
The city’s 2013 preliminary levy includes $80,000 for the fitness equipment, Baltos said. “The reason we are requesting this ahead of 2013 is that there is a 10-week lead time on all fitness equipment,” Baltos told the council.
MCC staff wanted to get the equipment ordered in 2012, take delivery next year then recognize the expense as part of the 2013 budget.
Baltos said the city would be looking at a late January to early February delivery date for the new equipment.
“Why does it take so long? There are plenty of places to buy,” Posusta said. “You should be able just to buy and put it in.”
Baltos said the exercise equipment needed to be commercial quality because it would get 11 or 12 hours of use each day.
Mayor Clint Herbst asked if an early delivery was possible.”In all of the years I’ve bought fitness equipment, I’ve not been successful with early delivery,” she said. “If it came in early, that would be great. You would be looking at beginning of January [for delivery]. We do have people waiting in line not only for the cardio equipment, but the weight lifting equipment,” she added.
Posusta said he would rather spend a smaller amount and get less equipment to start and then six months from now or eight months later purchase additional equipment to peak user interest.
“Fifty to 60 percent of our memberships are signed in January, February and March,” Baltos said. “You could buy equipment in August, but you would not see the financial bang until January 2014.
Posusta later asked Baltos about the possibility of the MCC leasing exercise equipment instead of purchasing it.
“Typically, the interest rate if you do that is about 9 or 10 percent, and you can pay for the equipment over three or four years,” she said. “That is an option you can certainly do.”
Posusta asked if the city would be better off leasing the equipment and turning it over every three or four years. “You don’t get a lot for used equipment,” she said. “We usually get a nominal amount. We’ve been keeping the equipment longer than three years.”
Councilmember Brian Stumpf made a motion to authorize purchase of fitness equipment and mirrors at a cost not to exceed $80,000. Purchases from Life Fitness Equipment and RAS Glass were approved.
MCC members will receive a notification sometime next week explaining the 2013 rate increases, Baltos said.
The council is expected to approve the rate change Dec. 10. The MCC Advisory Board began discussing the proposed rate increase in September and at its November meeting.
A Nov. 20 vote was unanimously favored forwarding a rate increase to the council for year-end approval.
The advisory board discussed covering a specific percentage of operating expenses by increasing operating revenue.
Raising rates 10 percent on members, daily fee users and other non-membership facility use fees will produce $53,000 in revenue. Raising concession prices, increasing non-group exercise programming prices and asking for additional sponsors for community event planning would add $5,000, increasing birthday party and other room rental rates by 15 percent would add $4,131 and increasing swim lesson rates for members and non-members while adding a flat-fee increase of $5 per registrant would bring in $8,000 in additional revenue.
Reducing requested purchases in the preliminary 2013 budget would save a total of $33,000, Baltos reported in a memo.
“We are making a rate increase,” Herbst said. “I don’t think it’s a very extreme one.
“We’ve doubled the size of the workout area, and we are going to increase our equipment.  We are increasing rates to cover some of our costs. [The end result will be] a better facility,” he added.