HIGHGATE ARENA FIELD HOUSE - Vermont Business … · Highgate and/or the Highgate Arena project. This is a business plan. ... 5.1 SWOT Analysis 20 5.1.1 Strengths 20 5.1.2 Weaknesses

HIGHGATE ARENA &

FIELD HOUSE

Business Plan December 5, 2008

Prepared by Daniel J. French Arena Consultant

Norwich, VT 603-381-5428

Confidentiality Agreement and Document Overview

The undersigned reader acknowledges that the information provided in this business plan is confidential; therefore, the reader agrees not to disclose it without the expressed written permission from the Town of Highgate, VT.

It is acknowledged by the reader that information in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by the reader, may cause serious harm or damage to the Town of Highgate and/or the Highgate Arena project.

This is a business plan. It does not imply an offering of securities or any promise for a potential future rate of success for a new Highgate Arena. The general information, numbers, and financial information has been collected from sources in and around the Town of Highgate as well as professionals in the recreation and rink industry. Should the reader judge the plan and numbers that follow to serve as the base for a successful and profitable facility, extensive work will need to be done to demonstrate success on the ground.

This is not a marketing plan. Should the project move forward, should any public funding be needed through fundraising or a bond vote, substantial work will be needed to promote the project and build support. Additional work, which should include a marketing plan, is recommended as next steps to build a new client base for the field house and to maximize the new ice rink.

Upon request, this document is to be immediately returned to David Jescavage, Town of Highgate Administrator.

____________________________ Signature

____________________________ Name (typed or printed)

___________________ Date

Table of Contents

Page 1

1.0 Project and Executive Summary 1 Chart: Three Year Cash Flow Overview 3 1.1 Objectives 3 1.2 Keys to Success 4 1.3 Mission 4 1.4 Conclusions Overview 4

2.0 Organization Summary 5 2.1 Legal Entity 7 2.2 Start-up Summary 8 Table: Start-up 8 2.3 Facility Design and Construction Plans 9

3.0 Products and Services 11 3.1 Facility Uses and Programming 11 3.2 On-Site Product Sales 12 3.3 Sponsorships and Advertising 13 3.4 Memberships and Passes 13

4.0 Market Analysis Summary 13 4.1 Market Segmentation 15 Table: Ice Sales by User 16 Table: Market Analysis 16 Chart: Market Analysis (Pie) 17 Chart: Market Analysis (Bar) 17 4.2 Target Market Segment Strategy 18 4.3 Service Providers Analysis 18 4.3.1 Alternatives and Usage Patterns 19

5.0 Strategy and Implementation Summary 20 5.1 SWOT Analysis 20 5.1.1 Strengths 20 5.1.2 Weaknesses 21 5.1.3 Opportunities 22 5.1.4 Threats 23 5.2 Competitive Edge 24 5.3 Marketing Strategy 24 5.4 Fundraising Strategy 24 5.4.1 Funding Forecast 25 5.4.1.1 Important Assumptions (Operating Expenses) 27 5.4.1.2 Important Assumptions (Operating Revenues) 27 Table: Funding Forecast 29 Chart: Funding Monthly 31 Chart: Funding by Year 31 Table: Highgate- Current rink 32 5.5 Task List and Timing 33 Table: Task list 33

Table of Contents

Page 2

6.0 Web Plan Summary 34 6.1 Website Marketing Strategy 34 6.2 Development Requirements 34

7.0 Management Summary 35 7.1 Personnel Plan 36 Table: Personnel 36

8.0 Financial Plan 37 8.1 Projections 37 8.2 Start-up Funding 37 Table: Highgate Project Construction Budget 38 Table: Start-up Funding 39 8.3 Important Start-Up Assumptions 39 8.4 Projected Surplus or Deficit 40 Table: Surplus and Deficit 41 Chart: Surplus Monthly 42 Chart: Surplus Yearly 42 Chart: Gross Surplus Monthly 43 Chart: Gross Surplus Yearly 43 8.5 Projected Cash Flow 44 Table: Cash Flow 44 Chart: Cash 45 8.6 Projected Balance Sheet 46 Table: Balance Sheet 46 8.7 Standard Ratios 47 Table: Ratios 47 Appendix 48 Table: Project construction budget Table: Funding Forecast Table: Personnel Table: Surplus and Deficit Table: Cash Flow Table: Balance Sheet Table: Highgate- Current rink budget Table: Ice Sales by User

Highgate Arena and Field House

Page 1

1.0 Project and Executive Summary

Project History The Highgate Arena was constructed in 1978 by the Town of Highgate on land that was donated by the McCuin family located on the Gore Road in Highgate Center. The Arena became the home ice for the Missisquoi Valley Union High School (MVU) hockey team and the Missisquoi Amateur Hockey Association (MAHA). The Arena has operated as an ice rink from early October into March until recently several problems with the compressor system have forced the ice rink schedule to be shortened. Recently, efforts began to raise money to replace the system and to conduct several other repairs and upgrades to the facility. As these discussions commenced, it became clear that the price tag would be significant, and the end result would be an arena that appeared nearly no different from what exists today. The major change would be a dependable and modern refrigeration system that currently threatens to break down in the near future.

There has been very limited use of the facility during the time the ice is out. But recent discussions revolved around buying a removable artificial turf surface so the Arena could be used for indoor sports starting in March. The recently created Recreation Advisory Board has begun to study the needs throughout the Town, and discovered that there are a number of recreational and athletic needs that are not currently being met, and that a field house could be a major asset to the Town.

Project Goal To provide area youths and adults a new recreational facility that promotes hockey, ice skating and other ice-based sports along with a diverse mix of athletic, cultural, and recreational activities, that appeals to citizens of all walks of life and ages in the Town of Highgate and the surrounding Franklin County in a modern, well-designed building that will generate significant revenues and foster economic development in the downtown area.

Introduction The project goal is to construct a new ice rink adjacent to the current Highgate Arena and to reconfigure the existing rink into a multi-purpose field house multiple sports and activities throughout the year. The current Arena has multiple issues that will require a substantial amount of money to repair and update the facility so to allow the ice rink to return to its former operating schedule. Currently the rink operates from mid-October through February. It had opened by the first of October and operated into March in the past, but mechanical issues no longer allow that.

The current Arena site was chosen for a new ice rink because not only does it have the space, but the site offers enough parking, it is adjacent to the elementary school, it offers some outdoor space around the building for other activities, and also will allow the Town to re-use the existing Arena to meet a significant demand for multiple athletic and recreation needs for all ages in a central location.

Construction would likely be funded through a bond and the operating costs would be funded by user fees and other revenue generated by the Arena. The proposed facility also has the potential to enhance adjacent field and trail activities by offering year-round access to rest rooms, concessions, and meeting spaces.

The current plan is for construction to begin in May, 2009 and for the facility to open the summer of 2010.


Page 2

The Organization The Town of Highgate, who currently operates the Highgate Arena, will be the responsible party for the construction and management of the new facility. The reporting structure and the general staffing chart will remain essentially the same.

Plans and Benefits • The youth in the greater Highgate and Missisquoi Valley Union High School area will

have increased access to reasonable practice times. • The safety and mechanical issues at the existing Arena will be addressed. • Public Skating and other popular activities that currently have little time at the existing

Arena will be promoted and allowed to grow to be a regular piece of programming families can count on.

• The multi-purpose facility will be able to host non-skating athletics and activities at different times of the year, such as indoor soccer, baseball, lacrosse, field hockey, fitness classes, trade shows and events.

• It will be an excellent site for a diverse assortment for many summer programs. • It will bring increased activity to the downtown area and will provide and economic boost

to the Town of Highgate.

The Market Highgate has been a 'hockey hotbed' for many years, and indications are that the sport will continue to thrive in the Highgate and Franklin County regions. MAHA is a very strong youth hockey program that is showing signs of growth, and MVU will continue to be a strong tenant with its two varsity teams. There are a number of underserved programs and user groups that could help to fill the ice time during the primary winter season and expand on existing operating revenues.

The demand for a field house is the new market that, with proper programming, marketing, and management, could bring in significant new revenue. There are plans currently to run summer ice in the new Arena, but the market for that is still not fully known, and for the purpose of this document, scheduling summer ice is not included.

A substantial opportunity for growth for the ice rink, areas that will generate new business and revenues, include the adult hockey market, public skating, and recently also Open Stick times, provided it is at regular times during peak hours. The has been no figure skating at the Arena for a number of years, but based on history and recent interviews, indications are that figure skating could become a solid part of the Arena programming in the future.

Financial Considerations The primary pillars for sustainability, stability, and growth is through professional management, a strong and balanced customer base, a commitment to building and maintaining a beautiful and functional facility, creative programming, and intelligent fiscal management.

The graph below illustrates the projected positive cash flow for the first three years of the new facility. Tables and graphs later in this report will detail the monthly costs and revenues.


Page 3

Chart: Three Year Cash Flow Overview

1.1 Objectives

The Town of Highgate is planning for the construction of a new skating rink and recreational field house facility in the Town of Highgate that will address a number of identified and compelling community needs, and will serve the Town and the surrounding Franklin County region.

Business goals for the new Highgate Arena:

1. To reconfigure the existing Arena as a field house and build a new and modern rink that will be linked to the new field house with a new and expanded lobby, offices, mechanical spaces and other appropriate fit-ups. The project will likely be funded primarily through a combination of public funding and/or a bond.

2. Secure existing and new multi-year contracts for advertising and ice rentals. 3. Strengthen existing programs and design new Arena-operated programs for the ice rink and

the new field house which will then serve as a base for long-term financial stability. 4. Generate positive cash flow resulting in a net profit annually through a combination of ice

and field house sales, assorted programming, memberships, retail sales, and advertising/sponsorship sales.

5. To receive at least $15,000 in the first year from newly developed customers. 6. To develop and maintain a strong customer base. 7. To develop an outreach program that includes new markets and opens the doors for new

programming goals. 8. Maximize the use of the field house to generate significant revenues and draw new

customers to the facility.


Page 4

1.2 Keys to Success

The major areas the Arena will need to focus on in order to be successful are:

1. Build community support to raise up to five million dollars for capital costs. 2. Demonstrate to the community that an expanded facility will operate as a first class

professional facility that will be well run, clean, and at least as proactive as other recreational facilities in the region.

3. Cultivate existing customers to help them expand their usage and strengthen their programs.

4. Develop new programs and customers that will keep the building's schedule full and active. 5. The Arena will be a well-attended and appreciated. 6. The sport and recreation activities/programs and facility rentals will generate significant

revenue, which will be enough to pay the operational expenditures of the new facility with some revenues set aside in a capital reserve fund for future facility maintenance, and ideally generate revenue substantial enough to pay the debt service.

1.3 Mission

To provide area youths and adults a year round state-of-the-art indoor recreational facility that promotes ice sports and other athletic activities and programs that will appeal to citizens of all walks of life and ages for the Town of Highgate and the surrounding Franklin County area.

1.4 Conclusions Overview

The interest in skating, and hockey in particular, has a strong tradition in the Highgate region. Conclusions based on this report show that a new and modern ice rink, with some adjustments to programming and maximizing some existing funding lines, combined with the revenue and traffic that an attached field house would offer, should be able to generate enough revenue to cover operating costs and also set aside some revenue in a capital reserve fund for long-term maintenance.

To be successful, there will need to be some adjustments in the existing programming and operations. This includes expanding the advertising and marketing of all programs; programming public skating in peak hours and keeping it in the same place in the schedule; adding new programs to fill what are currently unused hours and programming to meet the needs of underserved groups; and getting all ice users to be flexible so the Arena can expand its programming. This may entail some groups taking different ice times that are not prime time, such as before school for youth and high school teams or later at night for the adult groups. With the addition of a new field house and expanded facility, there will need to be significant outreach to the surrounding communities to bring in new customers. The proposal to add a new Program Manager to the staff will be essential for this to happen.

While the facility can stand alone as a business (meaning it can cover its operating costs with revenues), it is not clear it can do so if covering any substantial debt service is required. There are several issues that will make it difficult for the new Arena to generate substantially more revenue than the existing facility.

1. The size of the Town of Highgate and the surrounding communities in Franklin County is substantially less than similar facilities in other parts of New England that either operate as a stand-alone business and/or support debt service. The Burlington area is just 45


Page 5

minutes to the south, however all the programs that could occur in the new Highgate Arena already are happening in Burlington and it is very unlikely that patrons of the existing facilities would drive an additional 45 minutes north to use the Highgate facility.

2. The location of the Arena is not proximate to significant lodging, dining, or entertainment options. There is one hotel in St. Albans, but in order to support a large tournament or event, most attendees will need to find lodging 45 minutes south in the Burlington area, as they currently do for youth hockey State tournaments in February. It is a similar issue for dining options and even worse for entertainment, which is very important for teams that will often have half-day chunks of time to fill.

3. Summer ice can be a profitable program for ice rinks, but only if they fill the schedule every day for a minimum of four weeks, and usually longer. Summer ice does not look like a feasible option for Highgate at this time. There currently are summer ice options in nearby Burlington, which are reportedly having an increasingly difficult time filling their camps and other programs. Given the location of Highgate and the smaller population, it will be difficult for Highgate Arena to pull in enough new people, or steal some from the Burlington-based summer programs, to fill a six-eight week summer schedule. Additionally, without substantial nearby lodging options that are affordable, it will be very difficult to attract distant customers or to hold tournaments that can compete with the existing tournament options in larger areas.

The bottom line is that a new rink and field house will be well used and appreciated by the Town of Highgate and surrounding communities, and that while it is not believed at this point that it can generate enough revenue to cover any significant financing options, it will be a tremendous asset to people of all ages in the Town of Highgate and Franklin County, and should grants or government funding be available, building the new facility will be a project that will be appreciated for generations.

2.0 Organization Summary

The Arena project originally began a few years ago as a renovation plan to replace the refrigeration system and make specific improvements to the building. As the investigative work progressed on that effort, the scope of the job increased to the point where the cost would be over two million dollars, and the result would be barely perceptible to the customers as the facility would look no different from its current appearance. The Town made a few efforts over the past five years to solicit plans to renovate the 30 year old facility, but no work has been started. The recent effort to bring in consultants has given the Town the initial round of detailed information and analysis about the degree of work needed to allow the existing facility operate in a safe, efficient, and fiscally smart fashion for the next decade, while also trying to expand its programming to meet the growing recreational needs for all ages throughout the community.


Page 6

The Town will: • Raise the capital needed to construct the new rink. • Raise the capital needed to renovate the existing Arena into a field house. • Manage the construction of the new facility and renovations. • Manage all day-to-day operations of the facility.

Overall Conceptual Approach: The transformation of the existing Arena and the construction of the new facility and a new and expanded area of shared spaces will be completed using high quality materials and designs. Focus will be on a facility that is user-friendly, welcoming, durable, attractive, and very functional. It should be the type of facility that will look just as new in ten years as it does on opening day. Every consideration will be given to all proven and reasonable available energy saving devices, equipment, and construction methods available today. While some of these options may raise the required dollar amount for construction, taking these steps will save thousands of dollars annually on operating costs and on repairs in future years and decades. In an industry that lives on tight margins, even with the best management team, reducing operating costs without sacrificing the product for the customer's experience is very difficult to change once the building is constructed. It is widely reported throughout the ice rink industry that the extra work needed to raise the required capital prior to the opening of the rink results in a significant payback even in the first few years of operation. Further, taking these steps can also result in assisting to keep user fees low, and greatly improve the ability of the staff to operate the building in a professional and safe manner. Thought will be given not only to how this can serve as a valuable asset to the Town of Highgate, but also as an asset to Franklin County. Consideration will be given to how the lobby, restrooms, team rooms, and other spaces can be used by groups and individuals using the outdoor spaces around the Arena, including the potential outdoor skating rink in the winter. One example of how the new facility will be more customer-friendly is that the lobby and other public areas will be a designated free wireless access point, so all customers can easily access the internet at no cost with their own laptop computers (kids waiting for practice, parents waiting while kids practice, etc...). There may also be designated study areas for kids. Another area where technology will significantly improve the customer's experience, as well as greatly improve employee efficiency, productivity, and accountability is the use of a state of the art enterprise software management system. Frontline Solutions is the leader in the industry, and was designed for ice rinks. In Vermont, Union Arena in Woodstock was one of the first to employ the program in the region and has given the product extremely high marks. A major benefit is it allows staff to enter information once, and then the data is populated across multiple applications and instantly updates wherever needed, including the Web. Examples include locker room assignments (which are shown on monitors in the lobby for the public), league scheduling and public skating times, and allowing customers to register online for rink operated programs. Additionally, it tracks all sales in the Pro Shop and Concessions (even if this space is leased), schedules and invoices all ice sales, and is the way that the membership and debit card program is operated.


Page 7

2.1 Legal Entity

Highgate Arena has been owned and operated by the municipality since its opening. This will continue for the foreseeable future. A Recreation Advisory Board will also assist Town officials, hired staff and the Selectboard in operating and programming the facility. Town Officials as of November, 2008 Stephen Bushey, Selectboard Brian Rowell, Selectboard Henry Rainville, Selectboard Karen Fortin, Recreation Advisory Board Jeff Towle, Recreation Advisory Board Silvia Gagne, Recreation Advisory Board Town Staff David Jescavage, Town Administrator/Zoning Tom Racine, Town Clerk/Treasurer Walt Medor, Recreation Director Potential future committees to manage the design and construction for the project Organizational Committee

• Develop/refine ownership and management plan • Develop/refine and execute foundation of the business plan • Develop operational budget

Facility Committee

• Design new facility and renovations to existing Arena • Manage permit process as needed • Oversee construction

Fundraising Committee

• Create and execute fundraising program as needed • Develop potential list of major donors • Make fundraising presentations • Plan and manage fundraising events

Public Relations Committee

• Manage communication and marketing plan to general public and support other committees

• Design and develop all marketing materials, presentations and meetings • Develop web site


Page 8

2.2 Start-up Summary

Prior to the opening of the new facility, the Town will be incurring a number of promotional costs, as well hiring and paying for a variety of consultants, engineers, architects, and permitting associated with the design, development, and approvals needed. Once the project is funded and contracts are signed with the various required contractors and vendors, the Town will be responsible for those capital expenses.

It is not yet determined exactly where the revenue will be generated for these costs. Initial costs are being covered by the Town. Should the project proceed, it is expected that revenue will come from a combination of a bond, donations, contributions, and grants.

Given the early stage of the project, the items below are not finalized and will need to be reviewed as the job proceeds.

Table: Start-up

Start-up Requirements Start-up Expenses Legal $10,000 Stationery/Printing/etc $10,000 Insurance $0 Rent $0 Computer $5,000 Travel $0 Fundraising/Promotion/Grant work $30,000 Permitting $40,000 Consultants $20,000 Total Start-up Expenses $115,000

Start-up Assets Cash Required $25,000 Start-up Inventory $0 Other Current Assets $0 Long-term Assets $0 Total Assets $25,000

Total Requirements $140,000


Page 9

2.3 Facility Design and Construction Plans Overall General Building Design Plans Construction start could be as early as May, 2009 with completion as soon as summer of 2010 1- New Ice Rink Plans

• Designed for year-round ice • Fully insulated with subfloor heating • New high efficient lighting • Concrete pad • Demountable boards and seamless glass • Windows on North side (if design allows) • Large Team benches (with room for coaches behind benches) • Zamboni Room with high ceiling and oversized melt pit • New refrigeration room and system • Desiccant dehumidification system • At least 10’ circulation area around entire rink

o All circulation area and rooms have wall-to-wall skate flooring • Locker rooms

o At least 7 total Team Rooms o 2 would be dedicated to the MVU High School boys and girls teams from mid-

November through February. o Building could be designed so they would only be built if fundraising targets are

reached o 4 rooms would be for general use and should be at least 550 sq’ o 1 room would be for a new Figure Skating Club o Built-in lockers or at least bench/shelf system o All 7 Team Rooms will have their own bathroom and showers

Important with the mixed gender issue, as well as security and safety • Coaches Rooms and storage

o One for MAHA and one for MVU • Official's Room

o Include bathroom and shower • Bleachers

o Seating for at least 500 (will be rear loading- first row along glass) o Standing along rail behind back row o Walking concourse behind standing room- see Thompson Arena and Union Arena o Rear loading avoids a constant stream of people walking in front of spectators

and allows for plenty of standing room o Include handicapped viewing area with companion seats

• Press Box- over the scorekeeper's box is preferable • Incorporate well-designed natural light features into the design

o Saves on operating costs by allowing lights to remain low or off when not occupied or during times of limited use and maintenance

o Enhances customer's enjoyment • Design space to allow for easy installation of artificial turf


Page 10

2- Renovate existing Highgate Arena • Using existing dimensions, focus on opening interior spaces for use as a 12 month multi-

purpose field house o Dismantle bleachers to allow for additional floor space

• Install a Sport Court flooring system • Address insulation issues as needed • New high efficiency lighting • New safety netting as needed (especially for baseball use) • Reassign uses for existing Zamboni and mechanical rooms • Cosmetic face-lift • Update data/wiring capacity • Allow space for potential fitness/gym area • Allow space for a future full-service kitchen

3- Link new rink with existing building (future field house)

• Goal is to combine as many features and spaces as possible • New shared mechanical room that serve entire facility • Utilize all the newest efficient energy saving devices • Storage • Shared dehumidification, heating, and AC with central control room for mechanicals and

settings throughout entire facility • Large Lobby • Skate flooring wall-to-wall • Glass out to both spaces (especially new rink) • Connected to offices, have front desk for Customer Service and space for displaying info for

Rink programs, etc… • Monitor to display schedule and locker room assignments (linked to Frontline) • Spacious and clean public bathrooms • Ticket booth

Placement will be carefully considered so it can serve either the ice rink and/or the field house

• Pro Shop o Include space for Skate Sharpener room and equipment repair room o Include space for Skate Rentals (need at least 250)

• Large Concessions and eating area (all with skate flooring) o Should have easy access to the exterior recreational spaces

• Game Room (with skate flooring) • Staff room • Offices to serve entire facility

o Should have visibility out to Lobby, ice, parking, etc… o Separate office for Facility and Program Managers

• Office supply room and equipment room • Conference/meeting room(s)

o Could be used by outside groups, birthday parties, study area, etc… • Electrical Room • Communications room • Incorporate natural lighting features into design

o For energy savings and improved personal comfort • Expanded parking and improved traffic flow in and around parking area • Wireless internet access free to the public in the lobby and other public areas • Include access to outdoor skating rink (natural ice)


Page 11

3.0 Products and Services

The Arena staff will be responsible to draw on a number of sources to generate revenue. Following is a diverse list of what the Arena will be selling and offering as potential programming and usage.

An overall selling point is the overall design and detail of the new ice rink, ease of access, parking, and outside spaces available for all user groups and events.

3.1 Facility Uses and Programming

Ice Rink This plan is looking at a schedule that has ice from early October into March. Following is a list of likely and some potential uses.

1. Rentals to existing and new groups for practices, games, camps, tournaments, and leagues 2. Public skating and open stick hockey 3. Arena operated programs, such as leagues, camps, lessons, and figure skating 4. Birthday parties (which can also occur during scheduled public skating) 5. Curling 6. Broom Ball 7. Skating programs for targeted groups, including teenagers, seniors, and mom and kid

skates. 8. Tournaments

Field House Following is a list of athletic and recreational activities that could be offered in the Field House, and/or in the Ice Rink when the ice is out. These can be designed to meet any and all age groups.

1. Soccer 2. Basketball 3. Volleyball 4. Lacrosse 5. Field Hockey 6. Fitness classes, aerobics, yoga 7. Inline Hockey and Street Hockey 8. Roller skating 9. Summer camps 10. Open floor time for kids after school or during vacation times 11. Walking track


Page 12

Events Both the Field House and the Ice Rink can be used to host a large and varied number of non-sporting events that can serve the interests of all ages from the Town of Highgate and Franklin County. The fact that alcohol is permitted at the facility greatly increases the options for events. Following is a brief list, which can be expanded nearly without limit. These can be operated by the Arena, or they can also be conducted by an outside entity that would rent the facility on a daily or weekly basis.

1. Trade shows 2. Graduation 3. Weddings and/or receptions 4. Large parties 5. Corporate events 6. Community meetings/gatherings/programs 7. Educational events and classes (including hunter safety) 8. Shows

a. Car and motorcycle b. Boat c. Tool d. Home e. Antique f. Lawn and Garden

9. Concerts 10. Fundraisers 11. Farmer's markets 12. Flea markets

3.2 On-Site Product Sales

For the purposes of this business plan, the Arena will operate the Pro Shop and lease the Concessions, but only under a strict agreement. Following is a synopsis of the two.

Pro Shop • MAHA and MVU hockey apparel • Daily skating and hockey gear and athletic supplies • Arena gear and apparel • Skate sharpening • Skate rentals • Skating Club apparel

Concessions While this may leased to an outside vendor, it has the ability to be a very attractive element for the Arena, and could be the primary reason some people visit the facility.

• Grill menu, sandwiches, hot items, fried foods, etc... • Beverages (juice/soda/coffee/hot chocolate/etc) • Snacks and candy • Popcorn, pretzels, etc • Breakfast items


Page 13

3.3 Sponsorships and Advertising

To help cover expenses and keep user fees as low as possible, the Arena will be offering a range of sponsorship and advertising/promotional opportunities to local and regional businesses. Revenue will go directly to the Operating budget. This has become common practice at many rinks and recreational facilities in the region and the country as one method to deal with increasing expenses. Currently the Arena does sell a modest amount of advertising in the Arena, which will serve as a strong base on which to build the program. Some of these opportunities include:

1. Dasher boards 2. Banners 3. In-ice logos 4. Zamboni 5. Signage in other parts of the facility 6. Sponsorship of spaces 7. Scoreboard 8. Event sponsorship 9. Program/League sponsorship 10. Naming rights for the ice Rink, Field House, and even the entire facility

3.4 Memberships and Passes

As the Arena will be offering a significant amount of Public Skating and Open Stick hockey times, annual Season Passes for families and individuals can be made available. Annual Memberships can be sold that will give the cardholder discounts at the Concessions, Pro Shop, for rink-operated events and drop-in programs, and for rink-operated camps and clinics. This has proven to be appreciated by the customer as it not only makes it easier to use the facility, but also can save a family money. For the Arena, it can assist with cash flow and help to generate additional revenue. If the Arena uses Frontline, members and pass holders will receive a card with a magnetic strip that will allow for quick and easy transactions.

4.0 Market Analysis Summary

The popularity of ice sports has grown rapidly over the past decade, and the Highgate region is no exception as it has been a hockey hotbed for decades. There are approximately 4,000 residents in Highgate Town, 13,500 in the surrounding communities, and nearly 50,000 in the Franklin County area. Enrollment in organized hockey and figure skating programs has largely been limited only by available and friendly ice times. Recreational skating (including public skating) has suffered due to a lack of regular times in busy rink schedules, which has become a growing issue in recent years with the warmer winter temperatures and less dependable pond ice. Several communities in Northern New England have formed public/private partnerships to develop a community facility that can benefit not only existing users, but also the underserved population that will be critical to sustaining a new arena. Interest in hockey has exploded in recent years, particularly in the recreational/novice adult market and the girls segment. The addition of girls varsity hockey along with a growing enrollment in girls youth hockey has added pressure to rink schedules. There is a strong market for adult hockey, and with a modern rink facility, it could encourage additional use by this segment in the later hours.


Page 14

Beyond the need for ice, there is a strong demand for other recreational and athletic activities and programs in the area across all age ranges. In the winter, many people drive at least 30-45 minutes down to the Burlington/Essex area for indoor soccer and other sports. Soccer has enjoyed a strong history in the Highgate region, and current coaches and residents believe that with increased access to the sport, the enrollment would be strong for both youth and adult programs and leagues. Wintertime also sees a crunch on the available gymnasium space in the local schools. With the proper floor in the proposed field house, it would allow for better practice times for the students. It would also open up time for adult basketball and volleyball at a time of year that people are most interested in playing indoors. The final major piece to the programming is the potential to host larger events, concerts, trade shows, corporate outings, and similar events. North of Burlington, there is only limited access to a large space that the field house would offer all year, and that the ice rink would also offer for at least four months. Highgate Arena has two major tenants that will continue to call the Arena home. MAHA and MVU will continue to rent significant ice time and draw a large number of visitors to the Arena and the Town. MVU fields two varsity programs. The MAHA program has 150 skaters. The Midget age (15-17 years old) program appears to be growing as does the critical beginner program, which currently has 42 skaters. It also appears at this time that Milton High School will continue to use the rink as its home base, as efforts to build a new rink in Milton appear to have ended. Other youth hockey programs from as far away as Essex are using Highgate to meet their growing need for ice. The ice sales during the winter season have been healthy and all indications are that the Arena will continue to be able to sell enough hours to maintain a full schedule throughout the October to March period. Interest appears to be evident for more adult hockey, but at least one stumbling block is there has not been a matching willingness to play into the later evening hours. With some modifications to the marketing and design of the leagues, it is possible to increase use for this segment. The family and recreational skater have largely been ignored due primarily to a lack of available time and/or scheduling priorities. It should be the goal of the Town to design a programming schedule that places Public Skating, and possibly also Open Stick hockey, in prime time and at regular times throughout the year. Not only would this draw in a great many skaters and provide a healthy and safe recreational athletic activity, but as has been proven at many other rinks, properly scheduled Public Skating is significantly more profitable than simply renting ice by the hour. This may affect the current users and their existing schedules, but it would allow the Arena to strengthen their operations. If the new facility operates in the summer months as an ice rink, a new market will need to be created. Local skaters have expressed interest, and it is reported that a number of youth hockey players and their families drive down to the Burlington area for hockey and skating camps as well as leagues. The location of the Arena with parking and fields directly adjacent to the rinks make it a great place for summer hockey and skating camps. However, reports from the Burlington rinks and others in New England are that their summer usage is down recently due to a number of factors, including the increased cost of operating and the associated fees, an increased number of competing recreational activities, a decrease in the commitment from younger athletes, and an economy that is now sagging.


Page 15

4.1 Market Segmentation

Unlike a new facility, the Arena is going to build on an existing market base to serve its needs with a significantly improved and expanded recreational facility, new options for ice and field house times, and capture the large interest in ice-related and other recreational activities from the people who live and work in the region.

Detailed breakdown of potential major users by age

1. Youth Groups: a. Missisquoi Amateur Hockey Association b. St. Albans Hockey Association c. Essex Youth Hockey d. Home Schoolers e. Invitational and State tournaments f. Assorted youth hockey players and skaters from neighboring organized associations

who will be targeted for rink-operated programs and camps 2. Figure Skaters

a. No club currently exists at the Arena now, but there has been one in the past. 3. High Schools

a. Missisquoi Valley Union High School i. Ice time for boys and girls varsity hockey teams ii. Users of the Field House iii. Individual athletes may also enroll in rink-operated programs

b. Milton High School i. Ice time for boys varsity team ii. Individual athletes may also enroll in rink-operated programs

b. Invitational tournaments 4. Adult Hockey

a. Growing segment b. Several existing teams c. Coed and novice teams and programs d. Invitational tournaments

5. Public Skaters a. Include all participants above b. Add many other users:

i. Families ii. Seniors iii. Kids whose primary winter sport is not skating or hockey

6. Field House users a. MVU High School b. Area recreation departments c. Rink-operated programs/camps/clinics/tournaments:

i. Soccer, lacrosse, street hockey, inline hockey, roller skating, indoor field hockey, dodge ball, volleyball, etc...

Please note that no contracts have been signed for any of the above groups, and that the addition of new customers, especially for the Field House, will take some effort and time.


Page 16

Table: Market Analysis

Market Analysis 2010 2011 2012 2013 2014 Potential Customers Growth CAGR Youth Hockey aged players 5% 400 420 441 463 486 4.99% High School Hockey players 2% 120 122 124 126 129 1.82% Figure Skaters 10% 50 55 61 67 74 10.30% Public Skaters and Open Stick 10% 3,500 3,850 4,235 4,659 5,125 10.00% Adult Hockey 10% 130 143 157 173 190 9.95% Field House users 10% 1,250 1,375 1,513 1,664 1,830 10.00% Events/Shows/party rentals/etc...

5% 2,500 2,625 2,756 2,894 3,039 5.00%

Total 8.14% 7,950 8,590 9,287 10,046 10,873 8.14%

Ice Sales by User

Ice Sales at Arena by user (hours sold)

YEAR 1 Organization Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Year

1 Year 2 Year

3 MAHA 0 60 60 60 60 110 20 0 0 0 0 0 370 375 380 MVU 0 0 50 70 70 40 0 0 0 0 0 0 230 220 220 Other Yth Grps 0 30 35 35 35 15 0 0 0 0 0 0 150 150 150 Other HS 0 0 15 35 35 10 0 0 0 0 0 0 95 95 95 Fig Skate Club 0 24 24 24 24 24 20 0 0 0 0 0 140 170 185 Adult leagues 0 24 24 24 24 24 16 0 0 0 0 0 136 136 136 External Hockey Companies

0 12 0 0 0 0 0 0 0 0 0 0 12 15 15

Misc 0 16 16 16 16 16 12 0 0 0 0 0 92 100 115 TOTAL 0 166 224 264 264 239 68 0 0 0 0 0 1225 1261 1296


Page 17


Page 18

4.2 Target Market Segment Strategy

The core market for the ice rink at Highgate Arena once fully operational is already in place through the current base of hockey teams and organizations. Once the demand from these groups is met, management will need to aggressively go out and pursue the next layer of ice and also field house users.

The challenge and effort will be to schedule the ice in the off-peak times (more so than the field house due to associated operating costs), including the time before school, mid-day during the week, and after 10pm. The school hours are often the hardest to fill for a rink, but the senior market may have some potential, based on interviews. The elementary school currently runs a six week skating program as part of their physical education program, but that does not bring the Arena any money directly at this point. However, with the aid of a grant, it is possible that the school could increase their use of the ice rink on a fee basis. The Arena has a record of running youth hockey tournaments, which in a new facility could be expanded, including season kick-off tournaments and March invitationals, or even a USA Hockey regional event. These events (especially at the youth level) bring in significant revenue not only to the Arena, but also to the community through meals and lodging. It has been documented by a rink operator in Burlington that events at his rink generate 21,000 hotel stays over the course of the year. While Highgate certainly would not approach that, it is close enough to the Burlington area to take advantage of the additional hotel space there in order to bring in multiple teams from New England and Canada for tournaments. The question is if the distance to Burlington is far enough to keep teams from coming. The Field House component does have some competition in Burlington (about 45 minutes down I-89) and in Derby, VT at the IROC (about 2 hours east), which is a great model for the field house element in Highgate. Given the distances, it appears that they would not impact the target customers for the daily use of the facility, and they might even help by giving teams that use Highgate some out-of-town competition for games and tournaments for youth and adult in sports ranging from inline hockey, to basketball to volleyball, and more.

4.3 Service Providers Analysis

The rink industry is one that is generally not extremely profitable, which is why outside of large metro areas, there are very few for-profit rinks. The model of a municipal arena is one that has proven workable, as the existing Highgate Arena has shown by operating in the black in recent years. A modern rink with a functional and flexible field house is well positioned as a regional recreational facility to succeed as there is little in the way from other rinks that are actively looking to market themselves and sell ice and programs that would appear to compete with Highgate.

The largest cost associated with operating a rink is energy, closely followed by payroll and insurance. Experienced and professional management can make a considerable difference in reducing costs for all three, which can be the difference between a net profit and loss. On the revenue side, along with the previously mentioned plan of the rink running its own programs as a more profitable way to do business than simply selling ice, the other critical element to a rink being successful in the increasingly competitive recreation market is to deliver a product that goes beyond ice, and includes excellent customer service and presents a physical facility that is always clean and welcoming.


Page 19

4.3.1 Alternatives and Usage Patterns

When choosing where to skate, the primary factor is location. If the nearest place does not offer what a skater is looking for, or there is not availability, they move on to the next closest facility. Right now, the current Arena is making money by helping to meet the regional overflow demand during the winter ice season from user group in St. Albans and the Essex-Burlington area, which is important as without that revenue, it would be significantly more challenging to be profitable.

The field house component currently does not exist in the Highgate area, and with no substantial competition within 45 minutes, it would be poised to capture a significant market share rapidly with the proper programming mix, targeted marketing, and quality customer service.


Page 20

5.0 Strategy and Implementation Summary

With a focus on ice skating and indoor recreational and cultural activities for the community, the Highgate Arena project has a solid direction and focus, and is positioned to become an even stronger and more vital centerpiece for Highgate and Franklin County.

5.1 SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the project, and describes the opportunities and threats facing a new Highgate Arena and Field House.

5.1.1 Strengths

The Arena proposal is supported on many levels from the people involved, the location, to the needs and plans for the facility. Should the money be raised for the construction, these pillars will be the base for a very strong foundation of a community recreation facility.

Knowledgeable, experienced, and friendly personnel The Town officials and staff, elected officials, and Town committees are comprised of a variety of well respected people with diverse backgrounds in skating, hockey, business, marketing, rink management, building construction, and local history. In addition, the existing leadership staff at Highgate Arena will be leading the transition to making the Arena a fully functional multi-purpose recreational facility.

State-of-the art equipment While the new construction will feature modern equipment, part of the effort of this project will be to update the existing Arena, and tie together the two buildings so they can operate with maximum efficiency. While some features, like the refrigeration equipment, may not be visible to the customer, others, like the Frontline Systems POS and scheduling monitor (showing an up-to-the-second display of all room assignments on monitors in the lobby) and efficiently designed spaces and rooms will maximize every visitor's experience.

Smart and flexible building design As part of the renovations to the existing Arena, the Field House floor will have a Sport Court surface which is not only excellent for all athletic and recreational activities, it is also a good surface for events such as trade shows. However, if an event needs to be on the concrete surface, the Sport Court can be removed in a matter of hours. Along with a concrete pad in the new rink, this will give the facility complete flexibility in designing operating schedules outside of the winter skating season to best match the market demand.

Great presentation The new Arena will be built with the high quality and durable materials and designed to be a modern, attractive, and clean facility. Along with a professional and well trained staff, every customer will have a positive experience while at the facility.

Clear vision of the market need The demand and interest in ice activities in the Highgate area is well documented, and with a modern facility it will allow skating and hockey programs to extend their winter skating seasons in a building that is designed to handle the warmer temperatures of October and March, and even into the summer if the demand is there. The field house element is very important as it will address a documented need for additional recreational activities for all ages in the region.


Page 21

By re-using the current Arena, the cost is much less than a new field house, and it will also operate at significantly less expense than the ice rink and has the potential to generate a solid revenue stream.

Location In a customer-driven business, this is essential in determining success and long-term viability. It is next to the elementary school, a recreational trail, downtown Highgate, and it is easily accessible from two state highways and close to Interstate 89. Strong relationship with the Town The Highgate Arena is a core part of the Town, and residents have a strong interest in maintaining and managing the facility to serve the greatest number of people in the community.

5.1.2 Weaknesses

The business plan for the Arena proposal is strong, as it is building on an existing business that enjoys a great deal of support from the community and is populated by a strong customer base. But like any business, the plan will need to be on alert for items that could affect construction, programming and net profits.

1. Funding the capital cost a. The plan to fund the project is not yet complete, but every scenario has many

challenges and everyone agrees that funding the construction costs will be a massive undertaking. It appears that the Arena can cover its operating costs, but it will be a big challenge if it also needs to cover some form of debt service. To make the business plan and the proposed operating budget work effectively, interests will be best served if the entire capital cost can be secured prior to the building opening for business. While the budget can be designed to support some level of debt service, it has been shown in other facilities that when an unexpected level of debt service is incurred, that operating in the black can prove impossible, or it forces the management team to make decisions that counter the wishes of those who conceived the original plan.

2. Operating expenses a. One of the two major expenses in the rink industry is energy. Matched with the

demand for electricity at a rink, the management team will need to be aware of its operations and work hard to train every member of the staff so the entire team is working together to minimize costs. The new Arena will be a step ahead of the current rink, as part of the project includes modern and efficient refrigeration and mechanicals, which all have been proven in the field to significantly reduce operating costs, reduce staff time to operate (lower payroll), and lower Operating and Maintenance (O&M) bills.

b. Other areas that are not totally under the control of the Arena, but can be managed by a professional staff, are payroll and insurance. These costs generally tend to escalate every year, and rinks and other recreational facilities that are not attentive have seen these items be devastating to their bottom line. But with proper training and hard work, these items can be predictable and sustainable.

3. Cost of participation a. Some of this will be based on what the Arena needs to charge, but costs are rising

across the board in other areas of ice sports. Costs relating to travel, registration, equipment, and other assorted items are making it more expensive for families. The


Page 22

Arena is not powerless here though, and there are several avenues that can be pursued:

1. Creatively market and sell sponsorship and advertising packages that help offset costs of youth programs

2. Form partnerships with the youth programs for some of the operational elements of the Arena

3. Establish a House League program for hockey at all age groups, which may draw additional players from surrounding communities

4. Consider assuming control for all hockey operations and run the youth hockey program out of the Arena

4. Demand a. Along with the issue above, the marketplace for recreational options for kids and

families is becoming more competitive, adults are working longer hours, and many people are looking to spend less time with organized activities. These factors, if ignored, will lead to a decline in activity at the new facility.

b. To counter this, management needs to focus on two primary areas in order to keep the facility financially healthy:

1. Be creative in the programming it offers a. I.e.: Public Skating in prime times, broomball, fun themed

skating parties, kickball, interesting tournaments, programming across all demographics

2. MUST make it a priority to keep the entire facility very clean and attractive so each time a customer walks in, they have the feeling that the place is new and being well cared for, which is critical if tax dollars are used.

5. Location and surrounding amenities a. While the Arena is not far from the interstate, it suffers from a lack of supporting

businesses. Rinks and other recreational facilities that hold tournaments rely on hotels, restaurants, and entertainments options (movies, bowling, etc...) to take care of the visiting families. There is limited lodging in St. Albans just down the interstate, but significant options are all 45 minutes south in Burlington. This has the potential to significantly limit the attractiveness of Highgate Arena as a tournament location.

b. The surrounding business community is limited, and so are the corresponding dollars that are available for advertising and sponsorship opportunities in the Arena. Corporate support has become an important element and common for facilities of this size, and the lack of it in the Highgate area will increase the difficulty for the Arena to generate revenues.

c. The Highgate region is rural and does not offer the population base that a facility of this magnitude generally requires to generate substantial profits.

5.1.3 Opportunities

With ice sports (youth and adult hockey, figure skating, recreational skating) remaining strong or growing in all age groups and the call for other recreational opportunities growing in the area, the timing now is excellent to capitalize on it and build a new rink and field house that can safely and efficiently operate throughout the year.

There are several reasons why now is the time to proceed with the plans for Highgate Arena

1. Growth of existing skating and hockey groups at all ages is steady and appears to be dependable for the near future.


Page 23

2. The ability to program a rink and field house together will greatly increase the attractiveness of Highgate Arena for the customer, and also be significantly less expensive to operate than building and operating a rink and field house at separate locations.

3. Dependability of outdoor ice has deteriorated in recent years, and the market for recreational skating is growing.

4. The element of a Field House as part of the plan will significantly assist with the field shortage in the early months of spring sports in both communities as well as the identified strain on the gymnasium space in the winter months.

5. It could attract a greater share of the regional recreational market. 6. The modernized facility will give all youth and hockey and skating programs the opportunity

to increase their offerings and opportunities for both the top tier skater and the recreational skater.

7. The existing Highgate Arena has a number of identified immediate needs, including a refrigeration system that is in need of replacement.

5.1.4 Threats

Along with some of the items in the Weaknesses section already discussed, there are additional issues to monitor:

1. Opposition to the project and permitting a. So far, there has been good to very strong support from all who have been

contacted, including Town officials and a number of residents. While no permits have yet been received or public hearings held, early signs indicate that the project is feasible, but with so many hurdles remaining, there remains several areas of project and design approval that need to be met that have the potential to delay or seriously impact the project.

2. Staff turnover a. All successful teams and businesses generally have one thing in common: a stable

staff that enjoys being a part of the team and who all share the same vision and goals. Like many service industries, rinks can suffer from heavy turnover, and management will need to work hard to attract and retain a solid core of key personnel.

3. New recreational offerings a. There is an increasing array of activities for families and individuals to do. Between

programs and potential new facilities, a number of choices could make the marketplace tighter for consumer's time and dollars. The Arena's management team will need to be proactive and creative to offset and avoid such conflicts.

4. Energy a. This is one of the two largest expenses annually. While rates with Swanton Electric

appear stable for the near future, there is always concern that the operating rates could increase significantly once the new facility is open.

5. The Economy a. As the Country and the region have been hit with a stumbling economy in 2008,

there is reason to believe that if the economy were to take another major setback that many people may significantly reduce their spending for recreation and entertainment. Should tax dollars be used to fund the construction and/or part of the operating costs (which is 14% of the current Arena's budget), those dollars may be one of the first to be cut in future years.

6. Neighboring ice rinks and recreational facilities a. In reviewing nearby rinks, due to locations and programming at other rinks, there is

no major current threat to the continued successful operations of Highgate Arena


Page 24

throughout the winter months. However, operating in the summer months would be a major challenge, as the rinks that run in the summer in the city of Burlington are finding it increasingly difficult to fill their schedules, and there does not appear to be enough of a demand in close proximity to the Arena.

b. The field house element should face minimal competition in the winter, but may have trouble collecting fees from schools for winter sports practices (as well as early season spring sports practice) as this would be a new item in their already tight budgets. For other times of the year, there appears to be demand and interest, if the programming is properly targeted.

7. New operational pressures a. In this new scenario of having to drive revenues at the facility to cover increased

expenses, and possibly some level of debt service, the higher operational costs could increase the pressure for the facility to produce more revenues and possibly create a new set of problems.

2. Field House registrations a. Many believe that interest in the field house, particularly in the winter, will be high.

However the danger is that Highgate being a smaller community, that many of the potential customers will already be committed to another winter sport and program will have a difficult time filling enrollment.

5.2 Competitive Edge

A rink cannot survive without customers, and many do not want to drive far to skate or pursue other recreational or competitive athletics. With a strong core of major customers for the winter ice season, a region that is steady in population, and is highlighted by people who enjoy winter sports and activities, the Arena plan is well positioned to continue to capture the market and build a successful ice rink facility through the winter months. Should the Town be able to negotiate deals and create programming for the field house that meets the identified interest and needs from the community, it should be a busy and successful facility.

5.3 Marketing Strategy

There are two areas the Arena project will need to focus on: the Capital Campaign, and then programming, selling, and managing the new facility.

1. Capital Campaign and/or Selling the bond vote a. Once created, the Fundraising and Public Relations Committees will release a

program to spread the word on the plans for the Arena project. It will be broad based and target a wide variety of demographics, starting with the core of major users that currently call Highgate Arena their home. The message will need to stress more than a new rink that addresses all the problems with the current arena, but go much further to gain town wide acceptance that a project of this magnitude is justified and will serve the needs of the town.

2. The new facility a. While a significant amount of time and contracts will be negotiated and sold to the

major users at the Arena, the difference between the new facility being a success or struggling financially will be utilizing the off-peak times, full enrollments in all programs, and attracting new customers and sponsorships. The Arena will need to reach out to existing and new customers through a variety of resources, including the local publications, schools, mailers, television, and the new web site. Special events and appearances at public events will also be important.


Page 25

5.4 Fundraising Strategy

The Arena project will require approximately five million dollars to fund the construction. Ideally the effort will raise enough funds through some combination of a bond, grants, contributions, and with the goal of having no debt service. Once the project is completed, the new facility is projected to be self-sustaining through operating revenues (assuming no debt service).

As Highgate is looking to build on an existing facility, there is a large potential donor base already in place that currently uses the Arena. This group will serve as a starting point for any fundraising efforts. Should efforts be successful to attract and secure users for the field house, it will enlarge the donor base further and potentially increase donations.

While fundraising is listed here as a potential element of funding the project, research shows that most people do not think it will be able to generate significant money. While there is always the potential for a surprise donor, the likelihood appears slim for that.

As of the publication of this document, there has been no final decision by the Town as to the best method to secure funding. Following is a short list of activities that would likely follow for a combination of fundraising and trying to secure a bond or federal funds.

Establish Fundraising Team- This may also entail hiring a fundraising professional who can lead the team through a feasibility study.

Start-up Donor Drive- Should it be determined that fundraising will be used to attract a significant amount of the funds needed, The Start-up Donor Drive effort depends on the commitment of key volunteers to raise funds through corporate and individual contributors throughout the area. Committee members, in cooperation with the Public Relations and Facility Committees, will initiate the quiet phase early and reach out to potential large donors in an effort to secure the first 50% of the project's cost. Sponsors and Donors will be recognized in numerous ways for the valuable role they play in the organization.

Broad Community Funding Outreach- Through a variety of methods, including special events, mailings, community meetings, small dinners, and other activities, the Fundraising and Public Relations Committees will continue to reach out across the community. This will be essential to selling the project.

Grants and Foundations- With assistance from a grant writing professional, and perhaps also from local volunteers, Highgate will make efforts to apply for grants to assist with the construction of the facility. There may also be additional opportunities for grants to help fund programs and assist with operational expenses.

Expenses Accrued During Fundraising- The Town will need to decide where the funds will come from to cover costs associated with the funding and PR efforts.

5.4.1 Funding Forecast

Revenues for the Arena are based on the hard data and actual reports from Highgate Arena over the past two years combined with an initial needs analysis of the major users for the next several years. Projections for the field house usage are based on historical data of the


Page 26

recreation programs and involvement in the area, usage patterns by some of the potential larger users, and information from those involved in the recreation community.

• Budget numbers (actuals) for the EXISTING Highgate Arena follow the Funding Forecast. o These numbers reflect an operating season from October through February only. o The rink was built in 1978 to accommodate a traditional winter ice season. The lack

of a dehumidification system coupled with a failing refrigeration system has forced the Arena to shorten its skating season in recent years.

• Expected growth rates and driving forces o Growth rates for ice sales will not climb dramatically during the winter over the first

three years, as it is expected that times will be generally fully booked in the first year, based on the current use, predictions for new programming, and demand in the marketplace. Efforts will need to be focused on growth during the early fall, summer (if chosen to reopen for ice), and all off-peak hours. Areas that can sustain growth higher than currently planned are all the drop-in programs, camps and clinics, and advertising and sponsorships.

• How to guarantee revenues o The majority of ice sales will be to the existing major users that have called Highgate

Arena their home. First step would be to sign long-term contracts with these customers that requires them to purchase all their ice (or some set amount for non-town teams) at the Arena, and only allow them to buy ice elsewhere if the Arena is unable to offer them additional ice times.

o The field house is a new business by itself. The Arena could program, sell, and manage new leagues (such as youth and adult soccer), clinics, and camps, which should generate more revenue for the Arena than renting the facility to an outside vendor. However, that takes significant investments of time, resources, and experienced staffing. The Town may choose to allow an outside entity to run these programs, which would lower the return for the Arena. Should no one step forward, then the Town would always have the option to take it on at a later date. But for the purposes of this document, it will be assumed that these programs will not be operated by the town, and a flat rental fee will be used. Given the research so far, there is reason to believe people will step forward to take advantage of the opportunities that a new field house presents.

• Areas of concern for long-term sustainability and growth o The cost associated with indoor ice sports has increased over the past decade.

Outside of the cost of a particular sport, the costs associated with operating an indoor rink have been climbing, primarily due to increasing energy costs, although Highgate has had stable electric costs recently. As these prices rise, the rink has little choice but to pass these along to the customer. At some point, the major customers may be faced with decisions as to how much time they can afford, and for the first time decline opportunities to buy ice. To counteract this concern, the Arena will be designed with the most modern and energy efficient refrigeration equipment and mechanicals on the market today, and a professional and trained staff will use all the best practices in the industry to keep operating costs low. Additionally, by constructing a facility of the highest quality and designing the building to be flexible in its programming, the Arena can adapt to a changing marketplace, especially during the warmer months when demand for ice may fluctuate.

o One significant element that will assist in allowing the management team to make better community-minded decisions, is if the funding effort is successful in raising 100% of the capital costs to construct the facility. By removing any debt service from the expense side of the ledger and having the building paid for, it gives management much greater latitude and flexibility in its decision making.


Page 27

5.4.1.1 Important Assumptions (Operating Expenses)

1. Energy and Utilities: This area represents one of the largest group of expenses in the rink industry. To make sure this section was carefully calculated, data was collected from a number of similar rink budgets (including Highgate Arena) and then increased 10% annually in years two and three.

a. Current rates with Swanton Electric are not projected to increase in the next 2-3 years.

b. The following numbers were used in the calculations i. Current rate of 0.06567 KwH ii. Monthly usage of 44Kwh is used when the ice rink is operating. iii. Base charge (added on every month to usage) of $972, which is calculated by

using the Utility multiplier of $10.13 times the peak usage. The current peak of 96 is used here as it will likely not go down with the existing facility.

iv. Customer charge of $136 is included every month. c. The rates above represent a safe number that is near the current usage average.

While a modern and new refrigeration system will have less demand and be more efficient, the utility costs need to include demand for the Field House Facility and a longer ice season than is operated currently. Once the engineering is completed for the facility, this figure can be adjusted as needed.

2. Payroll: Annual wages and salaries are increased 2-3% annually in years two and three. 3. There are a number of items that are at zero level funding. These items, including legal,

printing, postage, liability/property insurance and others have traditionally not been in the Highgate Arena budget, but are absorbed in another part of the Town budget. They remain in this document not only as a reminder of what goes into operating a facility of this size, but also in the event that the Town changes how it allocates expenses.

4. Currently the Town operates several Programs that serve to raise funds for the Arena. Those costs are included here.

5. This plan does not project the ice rink being open in the summer.

5.4.1.2 Important Assumptions (Operating Revenues)

1. All projected revenues are judged to be conservative and attainable. Some may require significant effort, skill, and perseverance, but all should be able to be reached.

2. For forecast purposes, this plan does not project any rate increases over the first three years. It does show a $10/hour rate increase from 2008 levels, and uses $160/hour for local teams (MAHA and MVU) and $170 for all other groups.

3. Projected ice sales are based on current and historical data for the Arena and its major users. Some underserved customer sets were identified which will show an increase in the projected revenue from the current data.

4. The Arena model shows an increase in public skate revenues. Currently Highgate only offers public skating on Sunday afternoons, but a lack of publicity impacts attendance. The new Arena model places these in prime time slots during the week and weekends all year, and will give priority to public skating at times over hockey practice. There is an apparent demand for more public skating in the region, and many rinks report significant new revenues when making a commitment to a strong public skating program.

5. Revenues assume a jump in revenue from advertising and sponsorships, which will take some effort to realize.

6. Revenue from events, trade shows, and related rentals is a projection based on conversations with a number of people in the Franklin County area. With some work, these numbers should be attainable and can likely be passed.


Page 28

7. The projected forecast includes less than maximum revenue from major Arena operated leagues and programs. While operating all the leagues, clinics, Skating Club, and other similar programs is more profitable than simply renting the ice or field house, given the historical programming record in Highgate, and the difficulty in rapidly ramping up staff to operate such a substantial increase in rink operated programming, a large amount of this time is projected to be handled by external entities. This includes a new Figure Skating Club (24 hours/month), adult hockey leagues (24 hours/month), indoor soccer leagues (averaging 80 hours/month during the winter months), and other similar ventures.

8. Approximately $15,000 net profit is still included under Fundraising Program expenses from outside events, such as the golf tournament and the Red Sox game, in the projections.

9. Other new line items, such as Arena Operated events could generate new revenue, but no major items are included here. Hosting the Bruins Alumni team can net upwards of $8,000. A major tag sale could net over $2,000, and more with proper execution. If the Arena wanted to take on some risk for an event, it could put on a concert with a well-known performer with the plan of netting $10,000 or higher. But like any high target, the greater the reward, the risk climbs with it.

10. A potential significant revenue stream could be from use by MVU high school. The school has an identified need in the winter for additional gym space for its twelve basketball teams and for the spring sports teams from mid-March until the fields are ready in April. However, at this point it appears unlikely that the school would fund the rental of the field house facility. Using an $80 rental rate, cost to MVU would be approximately $12,000+/- for the spring teams and roughly $12,000 if the school used only 10 hours per week over the winter sports season. Given the potential revenue, but the difficulty in securing an agreement at this time, there is a separate line included for MVU rentals, but it shows zero dollars. In order to count on any funding from an MVU rental, there will need to be significant discussions between the appropriate boards and possibly a local and/or large user rate could be established.

11. Is the past budgets for the Arena, there was a $28,000 allocation from the Town. There is no money from the Town included in this plan.

12. This plan does not project the ice rink being open in the summer.


Page 29

Funding Forecast FY 2011 FY 2012 FY 2013 Units Ice Sales to Town-Based User groups(Hrs) 600 610 620 Ice Sales to Non-Town groups(hrs) 625 625 625 Ice- Youth Lgs-rink oper.(hrs) 0 0 0 Ice- Adult Lgs-rink oper.(hrs) 0 0 0 Ice- Yth Clinics-rink oper.(hrs) 0 0 0 Ice- Adult Clinics-rink oper.(hrs) 0 0 0 Public Skate (Average tix) 4,450 4,600 4,700 Open Stick (Tickets) 1,400 1,500 1,550 Adver/Sponsor (Boards) 16 17 18 Adver/Sponsor (Banners) 24 25 26 Adver/Sponsor (In-Ice logos) 1 2 2 Event/Trny Sponsorship 8 9 10 Arena Operated Special events 12 15 20 Event Rentals (Daily) 8 9 10 Field House Rental (hours) 530 800 825 MVU HS Field House Rental- 0 0 0 Field House Drop-Ins 720 750 775 Field House- Lgs-rink oper.(hrs) 240 250 255 Field House Clinics-rink oper.(hrs) 0 0 0 Concessions (lease payments) 12 12 12 Pro Shop (equip/appar) 79 85 90 Skate Sharpening (pairs) 2,100 2,200 2,250 Skate Rentals (pairs) 530 575 600 Season Passes (family) 45 50 55 Memberships 130 140 150 Vending machines (# of units) 48 48 48 Video games (# of units) 48 48 48 Fundraising Prog. Revenue 34 35 36 Contributions 0 0 0 Total Units 11,660 12,405 12,725


Page 30

Unit Prices FY 2011 FY 2012 FY 2013 Ice Sales to Town-Based User groups(Hrs) $160.00 $160 $160 Ice Sales to Non-Town groups(hrs) $170.00 $170 $170 Ice- Youth Lgs-rink oper.(hrs) $0.00 $185 $185 Ice- Adult Lgs-rink oper.(hrs) $0.00 $185 $185 Ice- Yth Clinics-rink oper.(hrs) $0.00 $185 $185 Ice- Adult Clinics-rink oper.(hrs) $0.00 $185 $185 Public Skate (Average tix) $3.50 $4 $4 Open Stick (Tickets) $5.00 $5 $5 Adver/Sponsor (Boards) $1,000.00 $1,000 $1,000 Adver/Sponsor (Banners) $500.00 $500 $500 Adver/Sponsor (In-Ice logos) $2,000.00 $2,000 $2,000 Event/Trny Sponsorship $750.00 $750 $750 Arena Operated Special events $1,000.00 $1,000 $1,000 Event Rentals (Daily) $2,250.00 $2,250 $2,250 Field House Rental (hours) $80.00 $80 $80 MVU HS Field House Rental- $0.00 $0 $0 Field House Drop-Ins $4.00 $4 $4 Field House- Lgs-rink oper.(hrs) $90.00 $90 $90 Field House Clinics-rink oper.(hrs) $0.00 $90 $90 Concessions (lease payments) $1,500.00 $1,500 $1,500 Pro Shop (equip/appar) $100.00 $100 $100 Skate Sharpening (pairs) $5.00 $5 $5 Skate Rentals (pairs) $4.00 $4 $4 Season Passes (family) $275.00 $275 $275 Memberships $55.00 $55 $55 Vending machines (# of units) $80.00 $85 $85 Video games (# of units) $65.00 $70 $74 Fundraising Prog. Revenue $1,000.00 $1,000 $1,000 Contributions $0.00 $0 $0

Funding Ice Sales to Town-Based User groups(Hrs) $96,000 $97,600 $99,200 Ice Sales to Non-Town groups(hrs) $106,250 $106,250 $106,250 Ice- Youth Lgs-rink oper.(hrs) $0 $0 $0 Ice- Adult Lgs-rink oper.(hrs) $0 $0 $0 Ice- Yth Clinics-rink oper.(hrs) $0 $0 $0 Ice- Adult Clinics-rink oper.(hrs) $0 $0 $0 Public Skate (Average tix) $15,575 $16,100 $16,450 Open Stick (Tickets) $7,000 $7,500 $7,750 Adver/Sponsor (Boards) $16,000 $17,000 $18,000 Adver/Sponsor (Banners) $12,000 $12,500 $13,000 Adver/Sponsor (In-Ice logos) $2,000 $4,000 $4,000 Event/Trny Sponsorship $6,000 $6,750 $7,500 Arena Operated Special events $12,000 $15,000 $20,000 Event Rentals (Daily) $18,000 $20,250 $22,500 Field House Rental (hours) $42,400 $64,000 $66,000 MVU HS Field House Rental- $0 $0 $0 Field House Drop-Ins $2,880 $3,000 $3,100 Field House- Lgs-rink oper.(hrs) $21,600 $22,500 $22,950 Field House Clinics-rink oper.(hrs) $0 $0 $0 Concessions (lease payments) $18,000 $18,000 $18,000 Pro Shop (equip/appar) $7,900 $8,500 $9,000 Skate Sharpening (pairs) $10,500 $11,000 $11,250 Skate Rentals (pairs) $2,120 $2,300 $2,400 Season Passes (family) $12,375 $13,750 $15,125 Memberships $7,150 $7,700 $8,250 Vending machines (# of units) $3,840 $4,080 $4,080 Video games (# of units) $3,120 $3,360 $3,552 Fundraising Prog. Revenue $34,000 $35,000 $36,000 Contributions $0 $0 $0

Total Funding $456,710 $496,140 $514,357


Page 31


Page 32

Existing Highgate Arena budget

Highgate Arena Operational Budget- Current Open mid-October to February Actual Budget- Proposed FY 2007 FY 2008 Revenues Public Skate and Open Stick $8,665 $10,000 Ice Sales- Town-based groups ($149/hr) $85,400 $85,000 Ice Sales- All others ($159/hr) $25,887 $38,000 Men's League $6,705 $7,000 Advertising $11,050 $15,000 Concessions (rental) $2,925 $2,875 Summer rentals $5,000 $5,000 Fundraising Programs $27,275 $31,000 Budgeted from General Fund $28,000 $0 Total Revenues $200,907 $193,875

Expenses Payroll $79,426 $82,206 Employee taxes & benefits $24,402 $34,820 Prof Dev $1,000 $1,000 Office Supplies $290 $0 Advertising $2,543 $2,500 Fundraising Program expenses $12,903 $19,500 Utilities $47,361 $55,000 Buildings and Grounds $9,570 $10,000 Arena R & M $19,872 $18,000 Arena Rental Expense $0 $500 Total Expenses $197,367 $223,526

Operational Profit $3,540 ($29,651)


Page 33

5.5 Task List and Timing

The accompanying table lists important program milestones for the period between now and the opening of the facility, that later will have dates, responsible parties, and budgets. The milestone schedule indicates an emphasis on planning for implementation.

While it is still too early to complete the task list, or even to finalize the order of some items, it is important to show it at this stage so all interested parties can begin to plan and understand the scope of the project. Many of the items will be handled by the various professionals that are contracted for the project, who will then report to the Town at scheduled intervals.

Task List and Milestones Milestone Start Date End Date Budget Manager Department Begin preliminary facility review 7/1/2008 12/31/2008 $10,000 Jescavage Town Decide on funding plan 10/1/2008 12/31/2008 $0 Jescavage Town Finalize plans for facility tba tba tba tba tba Resolve Zoning/permit issues tba tba tba tba tba Fundraising/PR Team finalized tba tba tba tba tba Fundraising Feasibility Study-if req tba tba tba tba tba Design logo and website tba tba tba tba tba Build website tba tba tba tba tba Capital Campaign/PR for bond tba tba tba tba tba Design and start Marketing campaign tba tba tba tba tba Finalize Project team tba tba tba tba tba Pre-Design analysis tba tba tba tba tba Pre-Design analysis Review & Approval tba tba tba tba tba Conceptual Design and Approval tba tba tba tba tba Schematic Design and Approval tba tba tba tba tba Renderings & Initial Design Dev. Doc. tba tba tba tba tba Permit Process tba tba tba tba tba Town and State approvals as needed tba tba tba tba tba Final Design and Develop. & Const. Doc. tba tba tba tba tba Building package approval tba tba tba tba tba Bidding, Bld review, Contractor selection tba tba tba tba tba Site work tba tba tba tba tba Construction tba tba tba tba Secure advertisers/sponsors tba tba tba tba tba Create schedule and ID new customers tba tba tba tba tba Punch list/CO/Furniture install tba tba tba tba tba Occupy new Arena tba tba tba tba tba Occupy Field House tba tba tba tba tba Punch List tba tba tba tba tba Totals $TBA


Page 34

6.0 Web Plan Summary

The web will play an important role in all phases of the development of the project.

Capital Campaign and/or Marketing in advance of a Bond vote During this time, it will serve as a primary resource for potential donors and/or voters on the building's design, programming plans, benefits to the community, design, structure, information on how to donate, and a place to leave commentary through a message board.

Operational Phase The web site will take on increasing importance once the new Arena and Field House are open for business. As proven at a number of other rinks and recreation centers, the web will serve a base of information for all existing and potential customers. Complete information will be available on every facet of the facility, including:

1. Location and directions 2. Ice for sale 3. Public skating and open stick times 4. Upcoming events, programs, and tournaments a. Customers may register online for Arena operated programs 5. Management and organizational structure 6. Information on how to support the Arena a. People may make contributions online 7. Information on the sponsors of the Arena and links to their sites (as negotiated) 8. Contact information on all the primary staff 9. Photographs showing each part of the Arena and its programming

The website should be operational prior to the launch of the marketing campaign.

6.1 Website Marketing Strategy

The website address will be prominently featured in every publication and release from Arena. The site will be well known to residents of the region very quickly. While fundraising and marketing efforts are brought up to speed, the web site will be shown in advertisements, banners, and other areas that receive visibility before a a variety of audiences.

6.2 Development Requirements

Highgate will need to secure a vendor as soon as possible to design the website. Plans should be made to use that vendor, or a very reliable individual, to manage the site and ensure it is always updated as needed.


Page 35

7.0 Management Summary

The new Arena will remain a municipal operation. The two proposed Co-Managers of the facility will report to the Town, and will in turn be responsible for all staff. Following is a list of potential staffing once the new Arena is open.

1. Facility and Operations Manager a. Will be an experienced rink operator and will oversee all aspects of the facility and

staff. b. Responsible for Arena operations, maintaining the ice, equipment, and training the

Operations Staff. Will have a strong rink background and be well-versed in the most modern and current best practices and operations.

c. Responsible for managing and supervising all maintenance, operations, and the physical structure of the facility and its surrounding grounds.

d. The Facility Manager will also work with the Program Manager in preparing an annual maintenance budget.

e. The Facility Manager will be responsible for creating a work plan for keeping the facility and its grounds in a well-maintained and operational order.

f. In order to minimize staffing needs, the Ops Manager will need to have a regular position in the ice maintenance/Zamboni schedule.

g. Also help cover the Pro Shop during off-peak hours. 2. Program Manager

a. Will be the link to the customers and will focus on securing existing ice contracts and then expanding ice sales, Field House rentals, and event rentals.

b. Responsible for developing programs, leagues, and other programming to draw in the maximum amount of customers from all age groups.

c. Responsible for implementing the facility’s business plan and for making proposed changes to the plan to the Recreation Advisory Board and Selectboard.

d. It would be helpful if this person was cross-trained on the Operations side of the business to give the Arena increased flexibility for staffing.

e. Also help cover the Pro Shop during off-peak hours. 3. Bookkeeper/Clerical

a. Responsible for managing all accounts and/or being the link to the Town Clerk b. Will oversee the processing of registrations. c. Ensure insurance policies and similar items are processed in a timely manner, and

processing payroll. Some of these items may take place in the Town offices by existing staff.

4. Operations Staff a. Will consist of a number of part-time Operators when the ice is in. b. Also help cover the Pro Shop during off-peak hours.

5. Customer Service a. If the Concessions is leased to an outside entity, then this staff group will be

comprised of a number of part-timers to staff the Pro Shop, work as Skate Guards, and other similar duties. They may also be used to staff some events and programming in the Field House.


Page 36

7.1 Personnel Plan

The following personnel plan shows the minimum staff required to operate the Arena on an annual basis. As programs and other Arena offerings increase, so too will staffing needs.

1. The two Co-Managers will be treated as equal positions for the purpose of this document. 2. Clerical support is included as one part-time assistant (approximately 20 hours per week) 3. Operations Staff will include one full-time employee and two part-time/seasonal staff. 4. Customer service staff would include a number of part time positions, many of which might

be high school students. Calculations include 35-50 hours weekly. Jobs could include general Arena maintenance, staffing the Pro Shop during busy periods, Skate Guards, support staff for large events, counselors for camps, and related positions.

Personnel Plan FY 2011 FY 2012 FY 2013 Facility Manager -FTE $42,000 $43,260 $44,558 Program Manager -FTE $42,000 $43,260 $44,558 Bookkeeper/Clerical Support -PT $14,400 $15,000 $15,500 Operations Staff $45,250 $48,500 $51,500 Customer Service Staff -hourly $20,200 $23,500 $25,500

Total People 9 9 10

Total Payroll $163,850 $173,520 $181,616


Page 37

8.0 Financial Plan

Following is the overall financial summary for the Highgate Arena plan. As previously stated, the business plan is not for a start-up company, as it is transferring a large existing customer base from an existing 30 year-old ice rink and moving into a new facility and adding a field house to the recreational programming for the Town of Highgate. The field house is where the new business growth must focus, but attention must be given to growing the ice rink sales during the primary six winter months.

8.1 Projections

As discussed elsewhere in this report, the projections for this new facility are based on existing recreational and rink facilities that are of similar size and design. Projections are conservative and do not assume best case scenarios. It is believed that with some effort, that the new Highgate Arena and Field House could exceed the projections in this plan. However, as noted in the Assumptions section, there are several items that have been assigned a zero dollar figure, which if re-assigned by the Town to become an Arena responsibility could greatly increase the challenge to operate in the black. The same may also be true on the revenue side, as no money is included for use of the field house by MVU, and only limited, likely, and identified revenue generating uses are included in the budgeted programming. The bottom line is there is greater potential available, but it will take some work to cultivate it and then make it a reality.

8.2 Start-up Funding

The plan for start-up funding is not yet finalized, but it is expected to be a mix of Town money, grants, and/or donations. Final plans for funding the construction are still to be determined.

The numbers in the following tables show a total project cost (including the building cost) of five million dollars. At this early stage of the project, the following numbers are placeholders based on early discussions of the project with various consultants. Once the Pre-Design Analysis is completed, there will be a much firmer cost estimate.

A significant variable is the changing prices in materials. Once timing for the project is refined, this number can be properly projected.


Page 38

CONSTRUCTION BUDGET Sub Totals Totals SITE WORK $0 Civil work including utilities, parking, sidewalks TBD Structural/Drainage (under building) TBD Landscaping TBD BUILDING ENVELOPE $0 Concrete, masonry, steel, finishes, built-ins TBD HVAC, plumbing, fire suppression and controls TBD Electric power, general lighting, tel/data, PA system, fire alarm TBD RINK SPECIALTIES $0 Rink lighting TBD Refrigeration, ice slabs, sub-floor heating TBD Bleacher seating TBD Dasher boards and accessories TBD Team benches, skate flooring, goal lights, goal nets and safety netting TBD Scoreboard(s) TBD Rink tools TBD Misc TBD FIXTURES, FURNITURE, MOVEABLE EQUIPMENT $0 Zamboni (propane) TBD Skate sharpener TBD Office furniture and building signs TBD Kitchen and Pro Shop equipment TBD Computers, new PC's, other hardware, POS units TBD Frontline software program TBD SOFT COSTS and CONTINGENCY TBD $0

PROJECT TOTAL $5,000,000


Page 39

Start-up Funding Start-up Expenses to Fund $115,000 Start-up Assets to Fund $25,000 Total Funding Required $140,000

Assets Non-cash Assets from Start-up $0 Cash Requirements from Start-up $25,000 Additional Cash Raised $0 Cash Balance on Starting Date $25,000 Total Assets $25,000

Liabilities and Capital Liabilities Current Borrowing $0 Long-term Liabilities $0 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $0

Capital Planned Investment Additional Investment Requirement $140,000 Total Planned Investment $140,000

Loss at Start-up (Start-up Expenses) ($115,000) Total Capital $25,000

Total Capital and Liabilities $25,000

Total Funding $140,000

8.3 Important Start-Up Assumptions

1. Construction funding is still not yet determined. 2. Initial plan proposed is for the project to be fully funded prior to opening through some

combination of contributions, donations, grants, and a bond. 3. The budgets represented in this plan are designed to be conservative and predictable and

are based on current 2008 numbers. In any cases where increases are know or planned, those figures are used. Once plans for the facility are finalized for opening dates and contracts are approved, financials can be adjusted accordingly.

4. All data collected show that the interest in hockey and skating will at least hold steady, and likely grow. This should provide a stable base for the Arena's schedule and bottom line.

5. There are no plans at this point for any new rinks or recreational facilities within at least one hour form Highgate.


Page 40

8.4 Projected Surplus or Deficit

Monthly Net Revenues and Surplus

In the following bar graph showing net revenues in each of the first 12 months of operation, there is a drop for net revenues in March through August, although for the year the Arena does finish in the black. There are a few reasons for this:

1. The time of greatest revenues is when the ice rink is operating at or near capacity. That happens from October to March.

2. There are a number of ongoing core costs, such as salaries, that are steady through the year.

3. A number of expenses are delayed or occur when the facility is operating below capacity (when the ice rink is not in operation).

4. May through Mid-June will be a time when there is limited activity in the facility with the onset of spring weather, and this is also a time when a lot of annual maintenance occurs.

5. There are several traditional facility expenses that are not allocated by the Town to the Arena, which helps the bottom line.

6. Approximately 15-20% of the net profit is generated by the external fundraising programs that Highgate has conducted to support the Arena in the past.

7. There are no funds included in this plan that are generated by the Arena to fund any debt service.

8. The plan does not project operating the ice rink in the summer months.


Page 41

Surplus and Deficit FY 2011 FY 2012 FY 2013 Funding $456,710 $496,140 $514,357

Gross Surplus $456,710 $496,140 $514,357

Expenses Payroll $163,850 $173,520 $181,616 Marketing/Promotion $2,400 $2,500 $2,500 Depreciation $0 $0 $0 Accounting $0 $0 $0 Advertising- Internal $6,000 $2,000 $3,000 Advertising- External $5,100 $6,000 $6,000 Arena Operated Events $5,000 $6,500 $7,000 Ice Rink R & M $10,500 $12,500 $14,000 Building R & M $9,100 $10,500 $12,000 Bank and Credit Card Fees $2,550 $2,750 $3,000 Concessions Supplies $0 $0 $0 Pro Shop supplies $4,200 $4,650 $5,000 Computers- Hardware/software $400 $1,000 $1,000 Computers- Repair $900 $1,500 $2,000 Dues/Subscrip/Resources $1,200 $1,350 $1,500 Event/Party Rentals $1,500 $2,000 $2,500 Employee Benefits (25% payroll) $40,963 $43,380 $45,404 Fundraising Prog. expense $18,000 $19,000 $20,000 Insurance- Liability/Prop $0 $0 $0 Janitorial Supplies/Services $3,900 $4,100 $4,300 Legal $0 $0 $0 Office Supplies $600 $700 $800 Postage $0 $0 $0 Printing $0 $0 $0 Professional Development $1,800 $2,400 $3,000 Leagues - Ice - Adult and Youth $0 $0 $0 Leagues- Field House $35,200 $37,500 $40,000 Camps/Clinics $0 $0 $0 Tournaments (rink-operated) $0 $0 $0 Travel $600 $1,000 $1,250 Utilities- Electric $34,750 $38,225 $42,048 Utilities- Propane $25,000 $27,500 $30,250 Utilities- Water $0 $0 $0 Utilities- Phone/Internet $2,400 $2,640 $2,904 Utilities- Sewer $0 $0 $0 Web Design/Maint $600 $750 $900 Facility Maintenance Sinking Fund $0 $7,500 $7,500 Misc $6,000 $7,500 $9,000

Total Operating Expenses $382,513 $418,965 $448,472

Surplus Before Interest and Taxes $74,198 $77,175 $65,886 EBITDA $74,198 $77,175 $65,886 Interest Expense $0 $0 $0 Taxes Incurred $0 $0 $0

Net Surplus $74,198 $77,175 $65,886 Net Surplus/Funding 16.25% 15.56% 12.81%


Page 42

Chart: Surplus Monthly

Chart: Surplus Yearly


Page 43

Chart: Gross Surplus Monthly

Chart: Gross Surplus Yearly


Page 44

8.5 Projected Cash Flow

Cash flow management is important to monitor, and in this business it needs to be projected and reviewed by season. The ice rink segment should generate the greatest income, but it also incurs the greatest expenses. Once the most profitable (and known) elements of the facility closes for the season, it will be important that it was able to generate enough revenue to offset any monthly (or seasonal) operating deficits in the following months.

Pro Forma Cash Flow FY 2011 FY 2012 FY 2013 Cash Received Cash from Operations Cash Funding $114,178 $124,035 $128,589 Cash from Receivables $340,136 $371,898 $385,672 Subtotal Cash from Operations $454,314 $495,933 $514,261

Additional Cash Received Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $454,314 $495,933 $514,261

Expenditures FY 2011 FY 2012 FY 2013

Expenditures from Operations Cash Spending $163,850 $173,520 $181,616 Bill Payments $210,089 $240,570 $265,682 Subtotal Spent on Operations $373,939 $414,090 $447,298

Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $0 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $4,800 $5,000 $5,000 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $378,739 $419,090 $452,298

Net Cash Flow $75,575 $76,843 $61,963 Cash Balance $100,575 $177,418 $239,381


Page 45

Chart: Cash


Page 46

8.6 Projected Balance Sheet

The Arena will be challenged to produce and then execute a healthy balance sheet over the years. The numbers for the first years of operation are realistic and conservative. They are based on significant research, local and regional trends, a strong understanding of the rink industry, and conversations with groups and industries that could impact the volume of customers who will be using the Arena. Highgate will be investigating a number of alternative programs that could change where the money comes from. As they involve changing the way many of the major users use the Arena, finalizing these plans will take time, but they will also net greater revenue to the Arena, while also providing better overall programming for all the customers.

Pro Forma Balance Sheet FY 2011 FY 2012 FY 2013 Assets Current Assets Cash $100,575 $177,418 $239,381 Accounts Receivable $2,396 $2,603 $2,699 Inventory $0 $0 $0 Other Current Assets $4,800 $9,800 $14,800 Total Current Assets $107,771 $189,822 $256,880

Long-term Assets Long-term Assets $0 $0 $0 Accumulated Depreciation $0 $0 $0 Total Long-term Assets $0 $0 $0 Total Assets $107,771 $189,822 $256,880

Liabilities and Capital FY 2011 FY 2012 FY 2013

Current Liabilities Accounts Payable $8,574 $13,449 $14,622 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $8,574 $13,449 $14,622

Long-term Liabilities $0 $0 $0 Total Liabilities $8,574 $13,449 $14,622

Paid-in Capital $140,000 $140,000 $140,000 Accumulated Surplus/Deficit ($115,000) ($40,803) $36,373 Surplus/Deficit $74,198 $77,175 $65,886 Total Capital $99,198 $176,373 $242,258 Total Liabilities and Capital $107,771 $189,822 $256,880

Net Worth $99,198 $176,373 $242,258


Page 47

8.7 Standard Ratios The following table contains important business ratios for the ice skating rink industry, as determined by the Standard Industry Classification (SIC) Index.

Ratio Analysis FY 2011 FY 2012 FY 2013 Industry Profile Funding Growth 0.00% 8.63% 3.67% 4.76%

Percent of Total Assets Accounts Receivable 2.22% 1.37% 1.05% 3.86% Inventory 0.00% 0.00% 0.00% 2.49% Other Current Assets 4.45% 5.16% 5.76% 32.18% Total Current Assets 100.00% 100.00% 100.00% 38.53% Long-term Assets 0.00% 0.00% 0.00% 61.47% Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 7.96% 7.09% 5.69% 22.92% Long-term Liabilities 0.00% 0.00% 0.00% 28.26% Total Liabilities 7.96% 7.09% 5.69% 51.18% Net Worth 92.04% 92.91% 94.31% 48.82%

Percent of Funding Funding 100.00% 100.00% 100.00% 100.00% Gross Surplus 100.00% 100.00% 100.00% 100.00% Selling, General & Administrative Expenses 83.75% 84.44% 87.19% 69.85% Advertising Expenses 0.00% 0.00% 0.00% 3.03% Surplus Before Interest and Taxes 16.25% 15.56% 12.81% 4.34%

Main Ratios Current 12.57 14.11 17.57 1.09 Quick 12.57 14.11 17.57 0.74 Total Debt to Total Assets 7.96% 7.09% 5.69% 62.34% Pre-tax Return on Net Worth 74.80% 43.76% 27.20% 5.29% Pre-tax Return on Assets 68.85% 40.66% 25.65% 14.06%

Additional Ratios FY 2011 FY 2012 FY 2013 Net Surplus Margin 16.25% 15.56% 12.81% n.a Return on Equity 74.80% 43.76% 27.20% n.a

Activity Ratios Accounts Receivable Turnover 142.94 142.94 142.94 n.a Collection Days 19 2 3 n.a Inventory Turnover 0.00 0.00 0.00 n.a Accounts Payable Turnover 25.50 18.25 18.25 n.a Payment Days 18 16 19 n.a Total Asset Turnover 4.24 2.61 2.00 n.a

Debt Ratios Debt to Net Worth 0.09 0.08 0.06 n.a Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios Net Working Capital $99,198 $176,373 $242,258 n.a Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios Assets to Funding 0.24 0.38 0.50 n.a Current Debt/Total Assets 8% 7% 6% n.a Acid Test 12.29 13.92 17.38 n.a Funding/Net Worth 4.60 2.81 2.12 n.a Dividend Payout 0.00 0.00 0.00 n.a

Appendix

Table: Highgate Project Construction Budget

CONSTRUCTION BUDGET Sub Totals Totals SITE WORK $0 Civil work including utilities, parking, sidewalks TBD Structural/Drainage (under building) TBD Landscaping TBD BUILDING ENVELOPE $0 Concrete, masonry, steel, finishes, built-ins TBD HVAC, plumbing, fire suppression and controls TBD Electric power, general lighting, tel/data, PA system, fire alarm TBD RINK SPECIALTIES $0 Rink lighting TBD Refrigeration, ice slabs, sub-floor heating TBD Bleacher seating TBD Dasher boards and accessories TBD Team benches, skate flooring, goal lights, goal nets and safety netting TBD Scoreboard(s) TBD Rink tools TBD Misc TBD FIXTURES, FURNITURE, MOVEABLE EQUIPMENT $0 Zamboni (propane) TBD Skate sharpener TBD Office furniture and building signs TBD Kitchen and Pro Shop equipment TBD Computers, new PC's, other hardware, POS units TBD Frontline software program TBD SOFT COSTS and CONTINGENCY TBD $0

PROJECT TOTAL $5,000,000

Appendix

Table: Funding Forecast

Funding Forecast Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Units Ice Sales to Town-Based User groups(Hrs) 0 60 110 130 130 150 20 0 0 0 0 0 Ice Sales to Non-Town groups(hrs) 0 106 114 134 134 89 48 0 0 0 0 0 Ice- Youth Lgs-rink oper.(hrs) 0 0 0 0 0 0 0 0 0 0 0 0 Ice- Adult Lgs-rink oper.(hrs) 0 0 0 0 0 0 0 0 0 0 0 0 Ice- Yth Clinics-rink oper.(hrs) 0 0 0 0 0 0 0 0 0 0 0 0 Ice- Adult Clinics-rink oper.(hrs) 0 0 0 0 0 0 0 0 0 0 0 0 Public Skate (Average tix) 0 800 800 800 800 800 450 0 0 0 0 0 Open Stick (Tickets) 0 250 250 250 250 250 150 0 0 0 0 0 Adver/Sponsor (Boards) 8 8 0 0 0 0 0 0 0 0 0 0 Adver/Sponsor (Banners) 12 12 0 0 0 0 0 0 0 0 0 0 Adver/Sponsor (In-Ice logos) 1 0 0 0 0 0 0 0 0 0 0 0 Event/Trny Sponsorship 1 1 1 1 0 0 1 1 0 0 2 0 Arena Operated Special events 0 0 0 0 0 0 12 0 0 0 0 0 Event Rentals (Daily) 0 1 1 2 0 0 0 1 1 0 2 0 Field House Rental (hours) 0 0 80 80 80 80 80 80 40 0 0 10 MVU HS Field House Rental- 0 0 0 0 0 0 0 0 0 0 0 0 Field House Drop-Ins 60 60 60 60 60 60 60 60 60 60 60 60 Field House- Lgs-rink oper.(hrs) 0 0 40 40 40 40 40 40 0 0 0 0 Field House Clinics-rink oper.(hrs) 0 0 0 0 0 0 0 0 0 0 0 0 Concessions (lease payments) 1 1 1 1 1 1 1 1 1 1 1 1 Pro Shop (equip/appar) 4 8 10 10 10 10 8 6 1 4 5 3 Skate Sharpening (pairs) 75 300 300 300 300 350 250 75 0 50 50 50 Skate Rentals (pairs) 0 80 100 100 100 100 50 0 0 0 0 0 Season Passes (family) 25 20 0 0 0 0 0 0 0 0 0 0 Memberships 30 30 30 15 0 0 0 0 0 0 0 25 Vending machines (# of units) 4 4 4 4 4 4 4 4 4 4 4 4 Video games (# of units) 4 4 4 4 4 4 4 4 4 4 4 4 Fundraising Prog. Revenue 8 0 5 0 0 5 0 0 10 0 6 0 Contributions 0 0 0 0 0 0 0 0 0 0 0 0 Total Units 233 1,745 1,910 1,931 1,913 1,943 1,178 272 121 123 134 157

Appendix

Unit Prices Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Ice Sales to Town-Based User groups(Hrs) $160 $160 $160 $160 $160 $160 $160 $160 $160 $160 $160 $160 Ice Sales to Non-Town groups(hrs) $170 $170 $170 $170 $170 $170 $170 $170 $170 $170 $170 $170 Ice- Youth Lgs-rink oper.(hrs) $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 Ice- Adult Lgs-rink oper.(hrs) $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 Ice- Yth Clinics-rink oper.(hrs) $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 Ice- Adult Clinics-rink oper.(hrs) $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 Public Skate (Average tix) $4 $4 $4 $4 $4 $4 $4 $4 $4 $4 $4 $4 Open Stick (Tickets) $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 Adver/Sponsor (Boards) $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Adver/Sponsor (Banners) $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 Adver/Sponsor (In-Ice logos) $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Event/Trny Sponsorship $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 Arena Operated Special events $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Event Rentals (Daily) $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 Field House Rental (hours) $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 MVU HS Field House Rental- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Field House Drop-Ins $4 $4 $4 $4 $4 $4 $4 $4 $4 $4 $4 $4 Field House- Lgs-rink oper.(hrs) $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 Field House Clinics-rink oper.(hrs) $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 Concessions (lease payments) $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 Pro Shop (equip/appar) $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Skate Sharpening (pairs) $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 Skate Rentals (pairs) $4 $4 $4 $4 $4 $4 $4 $4 $4 $4 $4 $4 Season Passes (family) $275 $275 $275 $275 $275 $275 $275 $275 $275 $275 $275 $275 Memberships $55 $55 $55 $55 $55 $55 $55 $55 $55 $55 $55 $55 Vending machines (# of units) $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 Video games (# of units) $65 $65 $65 $65 $65 $65 $65 $65 $65 $65 $65 $65 Fundraising Prog. Revenue $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Contributions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Appendix

Funding Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Ice Sales to Town-Based User groups(Hrs) $0 $9,600 $17,600 $20,800 $20,800 $24,000 $3,200 $0 $0 $0 $0 $0 Ice Sales to Non-Town groups(hrs) $0 $18,020 $19,380 $22,780 $22,780 $15,130 $8,160 $0 $0 $0 $0 $0 Ice- Youth Lgs-rink oper.(hrs) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Ice- Adult Lgs-rink oper.(hrs) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Ice- Yth Clinics-rink oper.(hrs) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Ice- Adult Clinics-rink oper.(hrs) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Public Skate (Average tix) $0 $2,800 $2,800 $2,800 $2,800 $2,800 $1,575 $0 $0 $0 $0 $0 Open Stick (Tickets) $0 $1,250 $1,250 $1,250 $1,250 $1,250 $750 $0 $0 $0 $0 $0 Adver/Sponsor (Boards) $8,000 $8,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Adver/Sponsor (Banners) $6,000 $6,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Adver/Sponsor (In-Ice logos) $2,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Event/Trny Sponsorship $750 $750 $750 $750 $0 $0 $750 $750 $0 $0 $1,500 $0 Arena Operated Special events $0 $0 $0 $0 $0 $0 $12,000 $0 $0 $0 $0 $0 Event Rentals (Daily) $0 $2,250 $2,250 $4,500 $0 $0 $0 $2,250 $2,250 $0 $4,500 $0 Field House Rental (hours) $0 $0 $6,400 $6,400 $6,400 $6,400 $6,400 $6,400 $3,200 $0 $0 $800 MVU HS Field House Rental- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Field House Drop-Ins $240 $240 $240 $240 $240 $240 $240 $240 $240 $240 $240 $240 Field House- Lgs-rink oper.(hrs) $0 $0 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $0 $0 $0 $0 Field House Clinics-rink oper.(hrs) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Concessions (lease payments) $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 Pro Shop (equip/appar) $400 $800 $1,000 $1,000 $1,000 $1,000 $800 $600 $100 $400 $500 $300 Skate Sharpening (pairs) $375 $1,500 $1,500 $1,500 $1,500 $1,750 $1,250 $375 $0 $250 $250 $250 Skate Rentals (pairs) $0 $320 $400 $400 $400 $400 $200 $0 $0 $0 $0 $0 Season Passes (family) $6,875 $5,500 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Memberships $1,650 $1,650 $1,650 $825 $0 $0 $0 $0 $0 $0 $0 $1,375 Vending machines (# of units) $320 $320 $320 $320 $320 $320 $320 $320 $320 $320 $320 $320 Video games (# of units) $260 $260 $260 $260 $260 $260 $260 $260 $260 $260 $260 $260 Fundraising Prog. Revenue $8,000 $0 $5,000 $0 $0 $5,000 $0 $0 $10,000 $0 $6,000 $0 Contributions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Funding $36,370 $60,760 $65,900 $68,925 $62,850 $63,650 $41,005 $16,295 $17,870 $2,970 $15,070 $5,045

Appendix

Table: Personnel

Personnel Plan Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Facility Manager -FTE $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 Program Manager -FTE $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 Bookkeeper/Clerical Support -PT $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 Operations Staff $4,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $2,250 $2,250 $2,250 $2,250 $2,250 Customer Service Staff -hourly $1,500 $1,500 $2,000 $2,000 $2,000 $2,000 $2,000 $1,500 $1,000 $1,500 $1,700 $1,500

Total People 9 15 15 15 15 15 15 9 9 9 9 9

Total Payroll $13,700 $14,700 $15,200 $15,200 $15,200 $15,200 $15,200 $11,950 $11,450 $11,950 $12,150 $11,950

Appendix

Table: Surplus and Deficit

Surplus and Deficit Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Funding $36,370 $60,760 $65,900 $68,925 $62,850 $63,650 $41,005 $16,295 $17,870 $2,970 $15,070 $5,045 Gross Surplus $36,370 $60,760 $65,900 $68,925 $62,850 $63,650 $41,005 $16,295 $17,870 $2,970 $15,070 $5,045 Expenses Payroll $13,700 $14,700 $15,200 $15,200 $15,200 $15,200 $15,200 $11,950 $11,450 $11,950 $12,150 $11,950 Marketing/Promotion $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Accounting $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Advertising- Internal $3,000 $2,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,000 Advertising- External $500 $500 $500 $400 $400 $400 $400 $400 $400 $400 $400 $400 Arena Operated Events $0 $0 $0 $0 $0 $0 $5,000 $0 $0 $0 $0 $0 Ice Rink R & M $1,000 $3,500 $500 $750 $750 $750 $1,250 $500 $0 $750 $500 $250 Building R & M $1,500 $2,000 $400 $400 $400 $400 $500 $750 $500 $250 $1,000 $1,000 Bank and Credit Card Fees $200 $200 $200 $200 $200 $200 $200 $200 $200 $250 $250 $250 Concessions Supplies $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Pro Shop supplies $1,500 $500 $500 $200 $200 $200 $200 $100 $0 $200 $400 $200 Computers- Hardware/software $0 $0 $0 $0 $200 $0 $0 $200 $0 $0 $0 $0 Computers- Repair $0 $0 $300 $0 $0 $300 $0 $0 $300 $0 $0 $0 Dues/Subscrip/Resources $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Event/Party Rentals $0 $0 $0 $0 $0 $0 $500 $1,000 $0 $0 $0 $0 Employee Benefits (25% payroll) $3,425 $3,675 $3,800 $3,800 $3,800 $3,800 $3,800 $2,988 $2,863 $2,988 $3,038 $2,988 Fundraising Prog. expense $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 Insurance- Liability/Prop $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Janitorial Supplies/Services $400 $500 $400 $400 $400 $400 $400 $400 $100 $100 $200 $200 Legal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Office Supplies $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 Postage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Printing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Professional Development $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 Leagues - Ice - Adult and Youth $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Leagues- Field House $0 $0 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $2,500 $2,500 $2,500 $2,500 Camps/Clinics $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Tournaments (rink-operated) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Travel $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 Utilities- Electric $3,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $1,750 $1,500 $1,500 $1,500 $1,500 Utilities- Propane $0 $1,000 $4,000 $4,000 $4,000 $4,000 $4,000 $2,000 $500 $500 $500 $500 Utilities- Water $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Appendix

Utilities- Phone/Internet $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 Utilities- Sewer $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Web Design/Maint $0 $0 $200 $0 $0 $0 $200 $0 $0 $0 $200 $0 Facility Maint. Sinking Fund $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Misc $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Total Operating Expenses $30,975 $35,325 $36,950 $36,300 $36,500 $36,600 $42,600 $29,188 $23,063 $24,138 $25,388 $25,488

Surplus Before Interest and Taxes

$5,395 $25,435 $28,950 $32,625 $26,350 $27,050 ($1,595) ($12,893) ($5,193) ($21,168) ($10,318) ($20,443)

EBITDA $5,395 $25,435 $28,950 $32,625 $26,350 $27,050 ($1,595) ($12,893) ($5,193) ($21,168) ($10,318) ($20,443) Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Surplus $5,395 $25,435 $28,950 $32,625 $26,350 $27,050 ($1,595) ($12,893) ($5,193) ($21,168) ($10,318) ($20,443) Net Surplus/Funding 14.83% 41.86% 43.93% 47.33% 41.93% 42.50% -3.89% -79.12% -29.06% -712.71% -68.46% -405.20%

Appendix

Table: Cash Flow

Pro Forma Cash Flow Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Cash from Operations Cash Funding $9,093 $15,190 $16,475 $17,231 $15,713 $15,913 $10,251 $4,074 $4,468 $743 $3,768 $1,261 Cash from Receivables $10,002 $33,985 $46,984 $50,257 $50,023 $47,358 $41,510 $23,959 $12,654 $9,305 $5,555 $8,546 Subtotal Cash from Operations $19,094 $49,175 $63,459 $67,488 $65,736 $63,270 $51,761 $28,032 $17,122 $10,048 $9,323 $9,807

Additional Cash Received Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Received $19,094 $49,175 $63,459 $67,488 $65,736 $63,270 $51,761 $28,032 $17,122 $10,048 $9,323 $9,807

Expenditures Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

Expenditures from Operations Cash Spending $13,700 $14,700 $15,200 $15,200 $15,200 $15,200 $15,200 $11,950 $11,450 $11,950 $12,150 $11,950 Bill Payments $6,334 $18,503 $21,038 $21,512 $21,173 $21,337 $23,600 $23,674 $15,175 $11,823 $12,573 $13,348 Subtotal Spent on Operations $20,034 $33,203 $36,238 $36,712 $36,373 $36,537 $38,800 $35,624 $26,625 $23,773 $24,723 $25,298

Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Principal Repayment of Current Borrowing

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Purchase Other Current Assets $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Spent $20,434 $33,603 $36,638 $37,112 $36,773 $36,937 $39,200 $36,024 $27,025 $24,173 $25,123 $25,698

Net Cash Flow ($1,340) $15,571 $26,821 $30,376 $28,962 $26,333 $12,561 ($7,992) ($9,903) ($14,126) ($15,800) ($15,891) Cash Balance $23,660 $39,232 $66,053 $96,429 $125,391 $151,725 $164,286 $156,294 $146,391 $132,266 $116,466 $100,575

Appendix

Table: Balance Sheet

Pro Forma Balance Sheet Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Assets Starting Balances Current Assets Cash $25,000 $23,660 $39,232 $66,053 $96,429 $125,391 $151,725 $164,286 $156,294 $146,391 $132,266 $116,466 $100,575 Accounts Receivable $0 $17,276 $28,861 $31,303 $32,739 $29,854 $30,234 $19,477 $7,740 $8,488 $1,411 $7,158 $2,396 Inventory $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Current Assets $0 $400 $800 $1,200 $1,600 $2,000 $2,400 $2,800 $3,200 $3,600 $4,000 $4,400 $4,800 Total Current Assets $25,000 $41,336 $68,893 $98,555 $130,768 $157,245 $184,358 $186,563 $167,235 $158,480 $137,676 $128,024 $107,771

Long-term Assets Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Assets $25,000 $41,336 $68,893 $98,555 $130,768 $157,245 $184,358 $186,563 $167,235 $158,480 $137,676 $128,024 $107,771

Liabilities and Capital Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

Current Liabilities Accounts Payable $0 $10,941 $13,063 $13,775 $13,363 $13,490 $13,553 $17,353 $10,917 $7,355 $7,719 $8,384 $8,574 Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Current Liabilities $0 $10,941 $13,063 $13,775 $13,363 $13,490 $13,553 $17,353 $10,917 $7,355 $7,719 $8,384 $8,574

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Liabilities $0 $10,941 $13,063 $13,775 $13,363 $13,490 $13,553 $17,353 $10,917 $7,355 $7,719 $8,384 $8,574

Paid-in Capital $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 Accumulated Surplus/Deficit ($115,000) ($115,000) ($115,000) ($115,000) ($115,000) ($115,000) ($115,000) ($115,000) ($115,000) ($115,000) ($115,000) ($115,000) ($115,000) Surplus/Deficit $0 $5,395 $30,830 $59,780 $92,405 $118,755 $145,805 $144,210 $131,318 $126,125 $104,958 $94,640 $74,198 Total Capital $25,000 $30,395 $55,830 $84,780 $117,405 $143,755 $170,805 $169,210 $156,318 $151,125 $129,958 $119,640 $99,198 Total Liabilities and Capital $25,000 $41,336 $68,893 $98,555 $130,768 $157,245 $184,358 $186,563 $167,235 $158,480 $137,676 $128,024 $107,771

Net Worth $25,000 $30,395 $55,830 $84,780 $117,405 $143,755 $170,805 $169,210 $156,318 $151,125 $129,958 $119,640 $99,198

Appendix

Table: Highgate Arena- Current rink

Highgate Arena Operational Budget- Current Open mid-October to February Actual Budget- Proposed FY 2007 FY 2008 Revenues Public Skate and Open Stick $8,665 $10,000 Ice Sales- Town-based groups ($149/hr) $85,400 $85,000 Ice Sales- All others ($159/hr) $25,887 $38,000 Men's League $6,705 $7,000 Advertising $11,050 $15,000 Concessions (rental) $2,925 $2,875 Summer rentals $5,000 $5,000 Fundraising Programs $27,275 $31,000 Budgeted from General Fund $28,000 $0 Total Revenues $200,907 $193,875

Expenses Payroll $79,426 $82,206 Employee taxes & benefits $24,402 $34,820 Prof Dev $1,000 $1,000 Office Supplies $290 $0 Advertising $2,543 $2,500 Fundraising Program expenses $12,903 $19,500 Utilities $47,361 $55,000 Buildings and Grounds $9,570 $10,000 Arena R & M $19,872 $18,000 Arena Rental Expense $0 $500 Total Expenses $197,367 $223,526

Operational Profit $3,540 ($29,651)

Appendix

Table: Ice Sales by User

Ice Sales at Arena by user (hours sold)

YEAR 1 Organization Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Year 1 Year 2 Year 3 MAHA 0 60 60 60 60 110 20 0 0 0 0 0 370 375 380 MVU 0 0 50 70 70 40 0 0 0 0 0 0 230 220 220 Other Yth Grps 0 30 35 35 35 15 0 0 0 0 0 0 150 150 150 Other HS 0 0 15 35 35 10 0 0 0 0 0 0 95 95 95 Fig Skate Club 0 24 24 24 24 24 20 0 0 0 0 0 140 170 185 Adult lgs 0 24 24 24 24 24 16 0 0 0 0 0 136 136 136 Ext. Hcky co's 0 12 0 0 0 0 0 0 0 0 0 0 12 15 15 0 0 0 0 Misc 0 16 16 16 16 16 12 0 0 0 0 0 92 100 115 TOTAL 0 166 224 264 264 239 68 0 0 0 0 0 1225 1261 1296

Documents

HIGHGATE ARENA FIELD HOUSE - Vermont Business … · Highgate and/or the Highgate Arena project. This is a business plan. ... 5.1 SWOT Analysis 20 5.1.1 Strengths 20 5.1.2 Weaknesses