Indoor Soccer Centre East

Motion on the Floor:

At the City Council meeting on April 7, 1998, Councillors Noce - Bolstad made the following motion:

  1. “That the February 24, 1998 Community Services/Corporate Services Departments report be received for information .
  2. That up to $200,000 in planning and design funds be approved with a view of completing the entire Project by December 1998. (Source of Funds: Council Contingency).”

Recommendation:
  1. That part one of the April 7, 1998 City Council referred motion be passed.
  2. That part two of the April 7, 1998 City Council referred motion be defeated.
  3. That the April 15, 1998 Community Services Department’s “Indoor Soccer Needs Analysis” (Attachment 1) be received for information.
  4. That, subject to the approval of satisfactory agreements with the Edmonton Soccer Association respecting, among other things, financing, operation, fund-raising, etc., the City of Edmonton build and own the new indoor soccer facility and lease it to the Edmonton Soccer Association.
  5. That the Overlanders site at Victoria Trail and Hermitage Road be designated as the site for the “Indoor Soccer Centre East”, subject to public consultation.
  6. That the following financial strategy for financing the new indoor soccer facility be approved:
    a) the City issue a 20 year debenture to AMFC in the amount of $4.7 million, and that the Edmonton Soccer Association annual rental payments be equal to the annual debt servicing costs on the debenture.
    b) the Edmonton Soccer Association provide $1.230 million in funding.
    c) the current agreement with ESA be amended to reduce the interest rate on the present loan from 9% to 5.875%, and extend the term of the loan to 20 years, from the remaining 12 years, as of January 1, 1999 or the facility’s opening date, and also be amended to allow for the sale of the Strathcona facility.
    d) the Debt Management Fiscal Policy criteria be excepted to allow for the issue of a 20 year debenture for the soccer facility.
  7. That the Budget Profile for the Indoor Soccer Facility (Attachment 6) be approved.

Report Summary

  • This report answers the Community Services Committee’s and City Council’s questions concerning the growth and demand for indoor soccer facilities in Edmonton. The Administration has reviewed the funding options with the Edmonton Soccer Association (ESA) and recommends a funding strategy. The report also recommends the selection of the Overlanders site pending a public consultation process.

Previous Council/Committee Action

See Attachment 4.

Report

  • The current number of indoor soccer facilities (six) does not meet the Alberta Soccer Association’s Standards of Play (one game per week and one practice per team per two weeks) for the 649 existing teams (Attachment 1).
  • Community Services Department projections point towards continued growth in the demand for indoor soccer facilities over the next four years.
  • The recommended financing strategy requires refinancing the current loan to ESA at a reduced interest rate. This strategy does not require a contribution from the City’s capital budget.
  • Potential sites for a new indoor soccer centre have been evaluated using criteria developed jointly by the City Administration and ESA (Attachment 5). The choice has been narrowed to two sites, in order of priority:
  1. “Overlanders” in the Northeast of Edmonton; a small portion of the site is designated Municipal Reserve;
  2. “Roper” in the Southeast of Edmonton; the site is designated Municipal Reserve.

Budget / Financial Implications

See Attachment 2.

Legal Implications

  • A new lease agreement, covering both facilities, will need to be developed.

Justification of Recommendation

  1. The February 24, 1998 report can be received for information (Part one of the April 7, 1998 referred motion.)
  2. Part two of the April 7, 1998 referred motion is no longer appropriate, given the discussions and analysis which have taken place. The funding for planning and design is included in the financing strategy in Attachment 2 “Administration Review of Edmonton Soccer Association’s Funding Options”. In addition, the entire project cannot be completed by December, 1998.
  3. Attachment 1, the April 14, 1998 “Indoor Soccer Needs Analysis”, provides the context for the recommended actions. It responds to the first of City Council’s April 7, 1998 passed motions, “the Administration to conduct a Needs Analysis”, and to the second of City Council’s April 7, 1998 passed motions, “ the key questions to be included in the analysis include . . .“.
  4. This model has worked well for the current provision of indoor soccer in Edmonton. It is consistent with the City’s current understanding of the provision of core service. The recommended financial strategy assumes City ownership.
  5. The Overlanders site meets the criteria agreed to by the Administration and the ESA. A public consultation process is required to ensure that the site meets the community’s needs and fits with the development of the area.
  6. See Attachment 2, “Administration Review of Edmonton Soccer Association’s (ESA) Funding Options”. Administration has reviewed the funding options provided by the ESA, has developed a funding strategy which does not require any capital contributions on the part of the City. As well, the ESA is prepared to operate both facilities at no cost to the tax levy.
  7. Together with the approvals recommended earlier, the Budget Profile should be approved to enable financing and development to proceed.

Background Information Attached

  1. Community Services Department April 15, 1998 Indoor Soccer Needs Analysis
  2. Administration Review of Edmonton Soccer Association Funding Options
  3. Overlanders and Roper Site Plans
  4. Previous Council/Committee Action
  5. Site Selection Criteria
  6. Asset Management and Public Works Budget Profile (Indoor Soccer Facility)

Others Approving this Report

  • Al Maurer, Asset Management and Public Works Department
  • Ron Liteplo, Corporate Services Department

(Page 1 of 3)

Attachment 1

Community Services Department, Indoor Soccer Needs Analysis

INDOOR SOCCER

NEEDS ANALYSIS

a. Estimated Demand Over Next 5 - 20 Years: Is Construction Warranted?

The growth of Indoor Soccer from 1984 to date is shown graphically in Figure I. Present numbers are: 649 teams representing 10, 384 players. This figure does not represent coaches, referees, other officials (such as managers), parents, or spectators.

Figure 1

Figures released by the Edmonton Soccer Centre show there has been a total of 850,000 people use the facility since it opened in October, 1995. This includes all the above mentioned categories of soccer related visits, as well as Ball Hockey, Lacrosse, Inline Hockey, Lawn Bowling, Dog Shows and other users.

A 1992 projection by the City of Edmonton and ESA foresaw 634 teams needing10 fields by 2004. Present registration is 649 teams using six fields. The growth of indoor soccer has outstripped all projections and no decline in the increase of interest in indoor soccer is predicted at this time. These figures include both children and adults. While children’s teams are increasing at a rapid rate, adults are also coming to the game. For the first time there is a “Women’s Classics” league for those over 30 years of age.

The need for more indoor facilities is based on history (growth from 1984 to 1997), the present (inability of ESA to meet standards of play, unattractive game times, particularly for the younger age groups, distance of travel) and the future (predictions which see numbers expanding). See Table 1.

If standards of play (One Game per Week, One Practice every Two Weeks) were to be accommodated, the following numbers of fields would

have to be in existence given the projected number of teams: (1998 Projection by Community Services)

FIELDS NEEDED

REGISTRATION YEAR TEAMS(Games & Practices)

1998/1999 / 653 / 10.9
1999/2000 / 744 / 12.5
2000/2001 / 829 / 13.8
2001/2002 / 911 / 15.2

TABLE 1

Given the predicted demand, new facilities in the Edmonton area will be needed to accommodate the growth. Demographic figures for population growth in the City of Edmonton are projected only up to and including 2002, therefore a predicted value for soccer needs beyond 2002 is unable to be obtained at this time.

b. Facilities Needed: Where & When Should They Be Located?

The location and number of individual facilities is not known at this time, but it is likely that each of the four quadrants of the City will need to be serviced by at least two indoor fields before demand levels off.

The following locations and timings of construction are purely arbitrary for the sake of discussion only. No determination has yet been made for location or year in which any facility would be constructed. Given the projected growth of indoor soccer over the next few years, an estimate of funding required for facility construction is presented below. A fairly conservative inflationary increase in cost per facility is estimated at 15%. Projected prices are estimates only and assume a four field facility in each case.

FOUR FIELD FACILITY CONSTRUCTION

Indoor Soccer (Projections)

PROJECTED COSTS

YEAR / NORTHEAST / SOUTHWEST / SOUTHEAST / NORTHWEST
1995 / DONE ($4.8 m)
1999 / ($6.0 m)
2003-2005 / ($6.9 m)
2006-2008 / ($7.935 m)

c. Indoor Soccer Facility Plans of Adjacent Municipalities: Is There/Should There Be A Regional Strategy?

Strathcona County: Plans are underway to build a “Multi-Plex” recreation facility that would contain two indoor soccer fields, as well as a twin arena and a pool. The apparent timeline is to have the facility open for the 1999 - 2000 season.

City of St. Albert: A need for an indoor soccer centre has been expressed by some members of the soccer community and the cause has been supported by both newspapers. No formal moves have yet been made.

There is no formal “Regional” strategy for construction of facilities. The concept has been put forward to various members of the administrations and to some Councillors, but has not yet gained support. The concept of booking fields on a regional basis has the support of the soccer community, thus far.

A “truly regional” strategy would see financial and land contributions from all municipalities in the region going to particular locations at particular times. Each municipality would have to be willing to contribute to each other and take turns in constructing their facility.

A regional strategy would benefit Edmontonians and others because resources could be pooled and expenses shared.

d. Financial Viability of Privately Run Operations?

The Department is not aware of any privately operated facilities of this type in Canada. There are, however, facilities operated successfully by not-for-profit organizations in Edmonton, Calgary, Lethbridge and Medicine Hat.

e. What Should Be The City’s Role re: Construction & Operation? Should Soccer be a “Core” service?

According to a survey of Edmonton residents conducted in May, 1997, at the most general level, parks related services were considered more core than recreation facilities or programs. Recreation facilities were seen as more core than programs. However, universal access to basic opportunities was considered as core. The City needs to focus its resources on basic/introductory opportunities that are accessible to all citizens. Children and youth were frequently mentioned as groups requiring special attention.

The sport of soccer, both indoor and outdoor, is affordable and accessible to a wide range of participants because of low cost to the user. Indoor soccer is somewhat restricted to the participant because of fewer facilities than there are for the outdoor game. Currently, there are 7,888 children (up to age 19) playing indoor soccer on six fields. In contrast, there are 9,200 children (age 4-19) playing hockey with access to 26 sheets of ice within the City. Outdoor soccer attracts over 16,000 children. (The indoor soccer figure includes 1,600 children from the surrounding municipalities, the outdoor figure is for Edmonton alone.) Both aspects of soccer provide entry level and skill development to children throughout the City. Like many other sport and recreation opportunities made available by the City, soccer is considered a “core” service.

f. What Budget Implications Are There for The City of Edmonton Over the Next 5 - 20 Years?

Based on continuing with the current model of ESA operated facilities, there would be nooperating budget implications to the City in the future. If future facilities are funded on the same model as proposed for the new soccer facility, there would be no capital budgetimplications to the City in the future.

Attachment 1 - Page 1 of 4

Attachment 2

Administration Review of Edmonton Soccer Association Funding Options

Recommendation:

1. That the following financial strategy for financing the new indoor soccer facility be approved:

a)the City issue a 20 year debenture to AMFC in the amount of $4.7 million, and that ESA annual rental payments be equal to the annual debt servicing costs on the debenture.

b)the Edmonton Soccer Association provide $1.230 million in funding.

c) the current agreement with ESA be amended to reduce the interest rate on the present loan from 9% to 5.875%, and extend the term of the loan to 20 years, from the remaining 12 years, as of January 1, 1999 or the facility’s opening date, and also be amended to allow for the sale of the Strathcona facility.

d) the Debt Management Fiscal Policy criteria be excepted to allow for the issue of a 20 year debenture for the soccer facility.

Report

As directed by the Community Services Committee, the Administration has met with the Edmonton Soccer Association (ESA) to review financing options for the proposed new soccer facility. The review took into account ESA’s performance since the opening of the west soccer facility, and their financial projections for operating two soccer facilities attached as Exhibit 2. ESA has demonstrated that they can effectively manage the present facilities and have displayed an excellent record on meeting City requirements for rent payments, financial reporting, and are forecasting a capital reserve in excess of $250,000 by August 31, 1998. ESA has agreed with the Administration’s recommended financing option, as identified in Exhibit 1. This option does not require any funding from the city for the project, and will allow ESA to comfortably manage the rental payments without placing any undue risk on ESA.

Budget / Financial Implications

The recommended financing strategy for the proposed new facility will have no financial implications to the City. However, by refinancing the current loan to ESA it will take the City an additional eight years to replace the total funds lent to ESA, and over the remaining period of the existing loan, the City will receive approximately $480,000 less in interest revenue by reducing the interest rate.

Justification of Recommendation

a) The recommended financing option would require the City to borrow $4.7 million for the project, which in turn ESA would repay to the City over 20 years as rent on the facility. The borrowing would be classified as self-supporting as the rental payments would cover the debt servicing costs on the loan. Council should be aware that there is a risk, that if at some point in the future ESA is not able to make the rental payments equal to the debt servicing costs, the City would need to make up any shortage from the tax levy. In addition, the interest rate of 5.875% is the current AMFC rate. If the interest rate should go up between now and the actual debt issue, this increase will place an additional burden on ESA.

b) ESA has committed to provide $1.230 million towards the cost of the new soccer facility. ESA will raise the funds by selling their Strathcona facility, through fundraising, and from provincial grants. After reviewing ESA’s contribution, the Administration is confident that the funding ESA has committed to provide is reasonable and attainable.

c) In order for ESA to meet the 20 year financing requirements on the proposed new soccer facility, the current agreement with ESA will need to be amended to reduce the interest rate from 9% to the current AMFC interest rate of 5.875 % (as of April 15, 1998) and the term of the loan extended to 20 years, from the remaining 12 years (as of January 1, 1999 or the facility’s opening date). This is required in order that ESA can afford to make the rental payments on both soccer facilities, and to eliminate any funding requirement from the City. Council should be aware that amending the current agreement with ESA will mean that it will take the City an additional eight years to replace the funds lent to ESA, and over the remaining period of the existing loan, the City will receive approximately $480,000 less in interest revenue by reducing the interest rate. ESA must sell the Strathcona Facility in order to provide funds for the new facility.

d)The debt management fiscal policy states that self-supporting debentures for other than local improvements, shall not exceed 10 years. The Administration feels Council should make an exception for the soccer facility as the life of the building is estimated at 25+ years, and based on current projections ESA would not be able to make rent payments to cover the debt servicing costs on a shorter term, of say 15 years.