05-28-1996 EDA - Laserfiche WebLink

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,_ c�o�� ;c; o �Ul�lDn A P C,i�t��' �A ~°krPft , Par[o��S��QS ECONOMIC DEVELOPMENT AUTHORITY Agenda Section 7a R�QUEST FOR EDA CONSIDERATION Report Number:EDA96-53c STAFF R�PORT Report Date: 5/23/96 EDA MEETING DATE Mav 28, 1996 Special Order of Bus. Consent Agenda Public Hearings X �DA Business Item Description: Consideration of Continuing Operations at the Bel-Rae Ballroom through July Executive Director's Review/Recommendation: -No Comments to supplement this report -Comments attached. Lxplanation/Sumn2aNy (attach supplenzent sheets as necessary) Sumrnary: Mr. Jambor has prepared an estimated cash flow projection for July based on the regular Thursday and Friday night events which has had a steady and dedicated patronage. The City(EDA) would need to hold the liquor license and secure insurance coverage for that license in addition to general liability coverage for the building and its contents. Mr. Jambor has offered to oversee the operations of these events for the City through July and beyond if we so desire. Bob Long has prepared a management agreement which would allow Mr. Jambor to hire laUor and run the events as he has done so for many years. All of the operating expenses would come out of the profit generated from the events. The agreement includes a provision for the Jambors to talce 50% of the profits after all of the operating expenses are covered. This would cover Tony's time for arranging and overseeing the events and Dolores' time for preparing the necessary financial statements and handling the booldceeping. Because the City would be required to secure a liquor license there are additional liability issues we must incur. I spolce with the City insurance agent and he would not recommend offering setups because insurance agencies are very slceptical regarding the liability. In addition, by holding a liquor license for this type of operation we would talce the rislc of not being eovered under the Governinental Tort Ainunity limit of $600,000. Therefore, we would need to secure additional coverage over and above the basic premium. I have prepared a sources and uses spreadsheet based on the estimated ticicet/bar sales and fees for events. I have also estimated the general operating expenses that we would incur to lceep the ballroom open for another month. According to Mr. Jambor June, July and August are the slowest months due to the summer weather for the Friday night DJ but they are the most successful months for the Thursday senior single events. He based his estimates talcing this into consideration. If we are just loolcing at sources and uses for the events there is a positive cash flow but once we talce out the additional operating expenses there is a negative cash flow. ' ,1 .-`! ; � �.' �_' Executiv, �irector � (Continued) RECOMMENDATION: Not to Continue Operations through July based on the Projected Sources and Uses Spreadsheet and Insurance Liabilities or Consider operating for 6 months to increase the proiit margin.