Memorandum

City of Lawrence

Parks and Recreation Department

TO:	David L. Corliss, City Manager
FROM:	Ernie Shaw, Interim Director of Parks and Recreation
CC:	Cynthia Wagner, Assistant City Manager
Date:	October 6, 2011
RE:	Potential Revenues/Expenditures For Activities/Wellness Center

Please find attached worksheets detailing potential operating costs and revenue of the proposed activities/wellness center.

When determining costs for expenditures, fixed costs were derived from analysis of the Indoor Aquatic Center, as well as discussions from other parks and recreation professionals with similar facilities as the one proposed. The Indoor Aquatic Center was used for a reference because of size and known utility and maintenance expenses, so estimates are projected to be similar in nature.

On the revenue side, the estimates are somewhat conservative for the first year of operation with new programs and sports tournament contacts being made.  This would also be our first attempt of charging memberships to a center, but we feel that in a few years we could come very close to covering the operational cost of the facility if all the essential elements were included into its design. Gymnasium space will be critical to expanding our current leagues and offering new activities that currently do not exist. It will also have an impact on the type and number of tournaments that can be hosted in Lawrence and their impact on the local economy. 

We have put some reference notes within the spreadsheets to further explain things. If you have questions or need additional information or analysis, please let me know.