06-07-2021 Council Work Session Packet

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Page 49 of 73 Annual Profit and Loss Statements The P & L budget summaries provide a summary of Years Zero to Five for both Management options. These P & L Statements breakdown the revenue and expenses as follows with detailed categories within each:  Facility Revenue  Program Revenue  Operational Expenses  Program Expenses  City Administration Allocation  Annual allocation to Long Term Capital Replacement Reserve The P & L Statements calculate the annual Net Revenue (Deficit) and the percentage Cost Recovery for both Management options. The Net Revenue (Deficit) calculations calculate the following Net Revenue scenarios:  Net Operating Expenses  Net Operating Expenses with City Administration Allocation included  Net Operating Expenses with City Admin Allocation plus annual Capital Reserve Fund allocation Following is a summary of the Profit and Loss Summary for Year Two. Year Two P & L Comparison Budget Category City Managed Option Hybrid Management Option Variance Facility Revenue $1,767,017 $1,561,440 $(205,577) Program Revenue $406,157 $186,162 $(219,995) TOTAL REVENUE $2,173,174 $1,747,602 $(425,572) Operational Expenses $1,952,592 $1,617,475 $335,117 Program Expenses $191,529 $67,550 $123,979 City Admin Share Allocation $157,500 $157,500 $0 *TOTAL EXPENSES $2,301,621 $1,842,525 $459,096 NET REVENUE (DEFICIT) $(128,447) $(94,923) $33,524 Cost Recovery 94% 95% *NOTE: Total Expenses do not include annual Long Term Reserve Allocation. Accrued Net Operating Revenue (Deficit) The P & L Statements also show the accrued Deficit for the Rec Center from Year Zero through Year Five. The accrued Deficit is where the biggest variance between the City Managed and Hybrid Management Model exists. The accrued Deficit for the Hybrid Management Model is significantly less than the City Management Model based on the much lower up front re-opening costs and the faster ramp up of membership and program revenue.