8.11 Electronic Scoreboard Acquisition
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION
DATE
12/11/2006
TIME
4:00 P.M.
AGENDA SECTION ORIGINATING DEPARTMENT: APPROVED FOR
NO: 8 AGENDA:
BICENTENNIAL CENTER
ITEM
NO. 11 BY:
Page 1 BY: Keith Rawlings
ITEM:
Acquisition of electronic scoreboard, equipment and related advertising displays.
BACKGROUND:
Since February 14, 2005, the Bicentennial Center has been working with Daktronics Sports Marketing, Inc.
(DSM) to develop a marketing plan in order to pay for needed electronic improvements in the arena - primarily
a new scoreboard. At the time the City Commission authorized this project, it was known that two financing
options existed and would be evaluated upon completion. We are now at that point. The two options are:
1. Have DSM provide a turnkey project by contracting directly with advertising sponsors in order to pay
for the costs of the equipment; or
2. Purchase the equipment ourselves and retain the advertising revenue to offset our expenditures.
The project is now essentially complete and we are just awaiting the final signed agreements from the 4
sponsors we have obtained. One has entered into a 3-year sponsorship, with rights to continue for up to 10
years and the remaining 3 have pledged 1 O-year commitments.
If we proceed with the DSM turnkey project, we will be paying for financing in an amount deemed appropriate
by DSM. If we purchase the equipment ourselves (actually a lease-purchase arrangement), we would be able
to obtain a more favorable financing rate and increase the percentage of the funds going to equipment and
signs.
This project essentially has two components. One of the components consists of equipment that is unique to
Daktronics - namely scoreboards, shot clocks, locker room clocks and lobby message displays. This is the
portion covered by the lease-purchase. The second component consists of signage throughout the building
(lobby, arena and concourses) that could easily be provided by local companies.
FISCAL NOTE:
There will be the necessity of paying for the equipment purchased through a combination of cash from the
sponsors and financing the remainder. We currently estimate that the financing rate will be in the 4.5% - 6%
range. Potential exists for additional sponsorships to be sold, resulting in 100% of the additional revenue
coming to the City. Had we proceeded with the "turnkey" approach with DSM, only 65% would come to the
City.
As it is structured, advertising revenue raised through these sponsorships will cover the entire costs of all
equipment acquisition.
RECOMMENDED ACTION:
It is recommended that the City Commission authorize staff to proceed with a lease-purchase of equipment
desired to enhance our electronic scoreboard and related other equipment, as well as other signage necessary
to satisfy the terms of the advertising agreements with our new sponsors. The amount of this purchase from
Daktronics, Inc. would be $194,000 and would require us to obtain financing on approximately $135,000 to
$140,000.
In order to best accomplish this, we would also request authorization to prepare specifications for the remaining
signage required to complete the overall project and obtain bids for this final component of the project.
Estimated installation and completion of all components of this project is Spring of 2007.