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City Council Finance Committee <br />Meeting Minutes <br />06/15/18 <br />Page 4 of 7 <br />The reports and corresponding narrative can be located in the packet of the June <br />15, 2018 Finance Committee Meeting. <br />DISCUSSION ON ASSET RENEWAL AND REPLACEMENT FOR <br />RECREATION CENTER <br />Finance Committee Member Lipton presented to the Committee and staff a draft <br />financial model spreadsheet he developed of a 25-year Building and Equipment <br />Renewal and Replacement Fund Projections for the Louisville Recreation & Senior <br />Center. <br />Member Lipton stated that the model separates the building and the furniture, <br />fixtures and equipment (FF&E) into two separate analyses and anticipates setting <br />up separate reserves that would accumulate over a 25 year period. <br />Member Lipton stated that several assumptions were built into the model, <br />including: <br />O 2%/yr. replacement for building over 25 years <br />O 3%/yr. inflation (for building and FF&E) <br />O 4%/yr. sales tax increase <br />O 5%/yr. cost of government increase <br />O 5%/yr. increase in user fees <br />O $125K/yr. existing annual transfer from CIP to the Recreation Fund <br />(the calculation currently used from the GreenPlay report for the old <br />portion of the building) plus 3%/yr. <br />Finance Committee Member Lipton stated that Recreation Superintendent Kathy <br />Martin performed an inventory and designated how much of the reserves would be <br />spent for each year. Member Lipton stated that the building reserves would <br />accumulate over the 25 years and would be spent in large lumps. <br />Member Lipton stated that this model is a conceptual tool or template that can be <br />modified and also used for other areas of the City where physical facilities exist <br />such as the Golf Course and Police Department. <br />Finance Committee Chairperson Maloney stated that the assumptions used <br />assume the City will have stable revenues in the years to come. City Manager <br />Balser stated that the model also assumes the City will be able to keep its <br />incremental sales tax increase discussed earlier in the meeting. Manager Balser <br />stated that she would like to see a footnote added to the model emphasizing this <br />fact. <br />Recreation Advisory Board Member Michelle Van Pelt stated that she likes the <br />portion of the model addressing FF&E and Building replacement costs, but not the <br />amounts used for the revenue and expense portion. Ms. Van Pelt stated that the <br />5 <br />