HomeMy WebLinkAboutCSD-14-066 - The Aud - Video Score Clock Replacement Staff Report
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REPORT TO: Community and Infrastructure Services Committee
DATE OF MEETING: June 23, 2014
SUBMITTED BY: Kim Kugler, Director of Enterprise, 519-741-2200 ext. 7544
PREPARED BY: Kim Kugler, Director of Enterprise, 519-741-2200 ext. 7544
WARD(S) INVOLVED: 10
DATE OF REPORT: June 10, 2014
REPORT NO.: CSD-14-066
SUBJECT: THE AUD —VIDEO SCORE CLOCK REPLACEMENT
RECOMMENDATION:
That the City of Kitchener provide the Kitchener Rangers with $357,875 of funding
from the KMAC Site Upgrading capital account by August 1, 2014 to replace the
video score clock; and further,
That the KMAC Site Upgrading capital account be adjusted in the 2015 capital
budget as outlined in report CSD-14-066.
BACKGROUND:
The Kitchener Rangers and the City of Kitchener partnered in the funding and
installation of a video score clock for the Aud in 2002. The operating system for that
clock is now 11 years old and technical support is no longer available for servicing the
equipment or for sourcing replacement parts for repairs. To avoid any risks of having
the system fail during the 2014-15 hockey season, the Kitchener Rangers investigated
the costs to replace the existing system.
REPORT:
The Kitchener Rangers reviewed and priced a number of video score clock options and
have selected Daktronics as their supplier. Daktronics is a world leader in video board
equipment and technology and they are present in more than 60% of the NHL and NBA
facilities in North America. They also have supplied video score clocks within the
hockey facilities in Guelph, Brampton and will be installing equipment in Kingston and
Niagara.
The Kitchener Rangers have provided the City with an opportunity to partner in the
replacement of the Aud video score clock. The replacement cost of the video score
clock is $1,431,500 and the hockey club is requesting a 25% contribution towards the
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cost from the City which would equate to $357,875. The replacement cost split of 75/25
is based on the existing advertising revenue splits in the lease agreement.
In addition to the video score clock replacement, the Kitchener Rangers have agreed to
fully fund an additional $338,500 to replace the existing back lit advertising panels in the
rink with a new ribbon board and to make a $200,000 donation to improving the sound
system making their total investment $1,612,125. The total project cost including the
video score clock replacement, new ribbon board and sound system upgrades is
$1,970,000 and the City's contribution is only $357,875. The new ribbon board will
replace static advertising with new video technology which will provide more
opportunities for sponsorship and advertising sales and the sound system upgrades will
enhance the customer experience.
There are three benefits in the City partnering with the Kitchener Rangers for the
replacement of the video score clock.
The first benefit is that the City will continue maintaining its revenue share of 25% of the
net advertising revenues from the video score clock which is approximately $10,000-
$15,000 annually. If the video score clock is not replaced, the current advertising
revenues would disappear.
The second benefit is that, while the video score clock is being installed, the Kitchener
Rangers have agreed to make an additional investment into the Aud by replacing all the
back lite advertising panels with a new ribbon board. This upgrade will reduce
expenses for event organizers and promoters who now incur additional costs ranging
from $6,000 to $25,000 for covering competing sponsors and advertisers, making the
Aud more attractive when event organizers and promoters are comparing event
buildings. The upgrade could also assist the City in attracting major sporting events and
potentially attracting new sporting tenants who could now rent the ribbon board to
provide their sponsors and advertisers an opportunity to be seen at the Aud, which was
previously unavailable. The ribbon board could add potentially $20,000 to $100,000 to
the revenues in a business case for new tenants considering the Aud for basketball or
lacrosse.
The third benefit of partnering with the Kitchener Rangers is their $200,000 donation to
upgrades to the sound system within the Aud, creating a more enjoyable experience for
the patrons.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Community Priority: Quality of Life - "Our shared vision is for Kitchener to be a
community that invests in maintaining basic services, in addition to amenities such as
community centres, museums, theatres, art galleries, and leisure facilities..."
Effective and Efficient Government: Asset Management — "A solid Corporate Asset
Management program ensures the availability and sustainability of existing and future
assets of the City of Kitchener'.
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FINANCIAL IMPLICATIONS:
The total cost to the City is $357,875 and is recommended to be funded from the KMAC
Site Upgrading capital account. A portion of the funding available in 2014 ($52,875) can
be allocated to the project, but other commitments at KMAC will require this account to
be replenished in subsequent years. This will be done through additional transfers from
the Aud CRF (Capital Reserve Fund) as well as reallocating the funding budgeted in
2017 for Aud Sound System Replacement to the KMAC Site Upgrading capital account.
The table below summarizes the funding sources for the project:
KMAC Site Upgrading - 2014 $52,875
Aud CRF - Increased transfer in 2015 75,000
Aud CRF - Increased transfer in 2016 75,000
Aud CRF - Increased transfer in 2017 75,000
Aud Sound System Replacement - 2017 80,000
TOTAL $357,875
ACKNOWLEDGED BY: Michael May, DCAO, Community Services
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