Arena HVAC systems a primary concern

The All Seasons Arena Commission met Thursday afternoon to go over finances so far this year and to also talk about what they believe is a dire need to replace the heating, ventilation and air conditioning units in both of the arenas.

Special emphasis was placed on Arena 1, which is still equipped with the HVAC systems installed when the building was built in the mid-1970s. Arena 2 still has original parts, too, but is about a decade younger and isn’t as much of a concern.

Commission chair John Fjeldahl asked the commission and its advisers to prioritize the needs of the aging facilities and priority number one was the HVAC system followed by the need for new lighting fixtures in both arenas but also with an emphasis on the older one. Coming in third was to upgrade the sound systems that would be used for paging and non-concert use.

One board member suggested that making improvements “in an orderly fashion rather than in an emergency situation” would be the most economical solution to the fixes.

Renee Korslien, who as manager of the North Dakota State Fair sits in as an adviser on the meetings, backed that up and suggested the horror of systems failing during the annual Norsk Hostfest and State Fair or at a concert.

Another member said that much of the costs of the improvements would be offset by the possible utility savings that upgraded and modern systems may provide over the outmoded systems. Not only that but it was said frequently throughout the meeting that as the systems age getting parts to repair them has been getting harder with each year and that they are more often in need of repair in general.

The problem that remains is funding these needed improvements, which have also been discussed at prior meetings.

Fjeldahl said after the meeting that the board set aside about $75,000 of their 2013 budget to go to the project but that savings of that little each year would take years. Instead, the group brought in City of Minot finance director and interim city manager Cindy Hemphill to give a fast paced rundown on bonding the majority of the funds and obtaining bond ratings to get the lowest possible interest rates on those funds.

The 2014 budget is set at $760,500 in total.

She used the city’s recent bonding for expansion of the Minot International Airport as an example while giving the presentation and while answering questions afterward.

Since she began her career with the city she has seen its regular bond rating from Moody’s Investors Service rise from an A rating to a AA rating based largely on faster growth and the additional revenue streams that comes with that growth to securely back the bonding. She also said that as a political subdivision the All Seasons Arena may well be able to tie into that city bond rating to get the lowest possible interest rates.

The arena would use yearly rental rates and other contracts as their continual revenue stream to back the revenue bonds, should they ultimately pursue bonding, which seemed to Hemphill to be strong enough. The board is also looking at the lodging tax levied on hotel and motel guests as an additional backing revenue stream. While the city’s occupancy rates have shifted downward from the 85 to 90 percent of recent years to about 60 percent today, the nearly doubled amount of available rooms from new hotels actually makes the revenue larger than when it was fuller occupancy with fewer hotels.

The arena has also filled out an application to the City of Minot’s Community Facilities Fund to receive a grant to cover part of the total cost or to go toward paying off the bond debt. They had not been able to submit the application, though, due to a freeze on new applications until the city had redefined the rules. At a city meeting going on at the same time, however, a recommendation for definition was made that would ensure political subdivisions like the All Seasons Arena commission, could receive those grants but that non-profit organizations could only receive them through affiliation with a political subdivision.

If the council approves the recommendation the application will be reviewed. The board voted to apply by putting up their own money to fund 30 percent of the grant.