Birmingham Ice Sports Arena

City of Birmingham Workshop 3-8-21 Overview of today’s discussion

• Enterprise Fund Accounting • What is an enterprise fund? • When is an enterprise fund used? • Enterprise fund financial statement presentation vs. governmental fund presentation • Key considerations • Review of Proposed Improvements and Future of the Birmingham Ice Arena

2 Enterprise Fund Accounting Overview

3 What is an Enterprise Fund?

GASB Statement No. 34:

• Enterprise funds may be used to report any activity for which a fee is charged to external users for goods and services

• Current City Enterprise Funds: . Water Fund . Sewage Disposal System Fund . Automobile Parking System Fund . Golf Courses (nonmajor enterprise fund)

4 When to use Enterprise Funds?

GASB Statement No. 34:

• Activities are required to be reported as enterprise funds if any one of the following criteria is met:

. The activity is financed with debt that is secured by a pledge of the net revenues from fees and charges of the activity

. Laws or regulations require that the activity’s costs of providing services be recovered with fees and charges, rather than with taxes or similar revenues

. Management establishes fees and charges, pursuant to its pricing policies, designed to recover its costs of providing services, including capital costs (such as depreciation or debt service)

5 Enterprise Fund Basis of Accounting

Accrual basis of accounting

• Revenue is recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows

• Balance sheet would include long-term assets and long-term liabilities

Financial statement presentation would include operating income and expenses, as well as a cash flow statement

6 Balance Sheet Comparison

7 Income Statement Comparison

8 Key Considerations Pros: • Allows the City to see how well rates/fees are covering costs • More transparency on Ice Arena operations • Long-term assets and liabilities are included which allows for short-term and long-term perspective on financial condition

Cons/Alternative Options: • More administrative work for the finance/accounting team (i.e. separate accounting, cost allocations, budgeting, etc.) • Accounting for the activity in an enterprise fund will not impact operations or profitable of the activity • Transparency can be accomplished through other means such as enhanced internal reporting

27 Review of Proposed Improvements and Future of the BIA

10 Birmingham Ice Sports Arena Project Timeline: March 2nd Parks & Recreation Board Update March 4th Architectural Review Committee March 8th Commissioner Workshop March 10th Issue GC RFP March 31st GC RFP Due April 12th Commissioner GC Recommendation April 13th GC Engagement April 24th Last Day of Ice Rental – Main Rink April 26th Ice Removal April 29th Construction Start Sept. 20th Owner Occupancy

PLANTE MORAN CRESA | BIRMINGHAM SPORTS ICE ARENA FACILITY ASSESSMENT 11 Birmingham Ice Sports Arena

LOCKER ROOM EXPANSION NEW TEAM LOCKER ROOM, LOCKER ROOM EXPANSION, REFEREE ROOM NEW MECH. NEW PARTY EQUIPMENT ROOM

LOBBY NEW PLAYER BENCHES RENOVATION

RINK STORAGE RINK STORAGE

RECONFIGURED BLEACHERS

PLANTE MORAN CRESA | BIRMINGHAM ICE SPORTS ARENA RENOVATION/ADDITIONS 12 Birmingham Ice Sports Arena

NEW PARTY ROOM

LOCKER ROOM EXPANSION

PLANTE MORAN CRESA | BIRMINGHAM ICE SPORTS ARENA RENOVATION/ADDITIONS 13 Birmingham Ice Sports Arena – ADA Improvements

LOCKER ROOM TOILET RMS PLUMBING FIXTURES PLAYER BENCHES

ACCESSIBLE ROUTE – COL. GUARDS CONCESSION FURNITURE CONCESSION COUNTER

LOCKER RM DOOR OPENING DRINKING FOUNTAINS DOOR HARDWARE 14 PLANTE MORAN CRESA | BIRMINGHAM ICE SPORTS ARENA RENOVATION/ADDITIONS Birmingham Ice Sports Arena – Potential Revenue Extended Ice Rental Season:

Spring Hockey Leagues – May Figure Skating Club rental Summer Camps – June to August High School Development Camp Power Skating - Laura Stramm, Kim Muir Spring Tournaments

PLANTE MORAN CRESA | BIRMINGHAM ICE SPORTS ARENA RENOVATION/ADDITIONS 15 Birmingham Ice Sports Arena – Potential Revenue Party Room Rental:

Birthday Parties Team Events Community Rental Curling Events

PLANTE MORAN CRESA | BIRMINGHAM ICE SPORTS ARENA RENOVATION/ADDITIONS 16 Birmingham Ice Sports Arena – Potential Revenue Live Barn Subscriptions

PLANTE MORAN CRESA | BIRMINGHAM ICE SPORTS ARENA RENOVATION/ADDITIONS 17 Birmingham Ice Sports Arena – Potential Revenue Women’s Leagues

PLANTE MORAN CRESA | BIRMINGHAM ICE SPORTS ARENA RENOVATION/ADDITIONS 18 Birmingham Ice Sports Arena – Potential Revenue Team Locker Room Rental Team Office Rental

PLANTE MORAN CRESA | BIRMINGHAM ICE SPORTS ARENA RENOVATION/ADDITIONS 19 Birmingham Ice Sports Arena – Potential Revenue Naming Rights

PLANTE MORAN CRESA | BIRMINGHAM ICE SPORTS ARENA RENOVATION/ADDITIONS 20 Plante Moran Cresa 27400 Northwestern Highway | Southfield, MI 48034

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