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Memo - Depot 2003 Financial Year-end and 2004 Financial Position , ,- . .3.. - - MEMORANDUM . To: Honorable Mayor and members of the City Council FROM: Jay Strachota, Facilities Director CC: Steve Mielke, City Manager DATE: March 17, 2004 SUBJECT: Depot 2003 Financial Year-End (unaudited) and 2004 Financial PosItion This memo/discussion is intended to update the Council regarding the status of The Depot's 2003 year-end financial position and current financial position for 2004. Through December 2003, The Depot had total 2003 revenues of $198,670 while incurring expenses totaling $198,475. This amounts to a positive fund balance of $195 for 2003 so there will be no subsidy by the City for 2003. If grant funds are subtracted from revenues and grant commissions are subtracted from expenses, The Depot has generated monthly revenues averaging approximately $8,500 and monthly expenses of just under $16,000. These figures include both Teen Center and Coffee Shop revenues and expenditures. It is very early in 2004 but through the end of February 2004 total revenues (excluding grant and lease payments) are ahead of last year by approximately $1,200 and total expenses (excluding grant and lease expenses) are lower than 2004 figures by approximately $1,200. While the . project as a whole is doing better the first few months of 2004, the concessions sales are down about $400 from last year at this time. Still, projections show no city subsidy expected in 2004. In 2003, the City billed the Hopkins School District for$19,000 of the 2003-2004 levy for lease. The Finance Department was able to charge the School District what was needed to cover costs in 2003, while reserving the unused portion of the levy-for-Iease dollars for use in 2004. This is in part what balanced the Depot year-end fund balance to a positive $195. A larger or smaller figure can be charged to the School District to the extent that revenues and expenses vary. There's $31,000 left of the Hopkins School District 2003-2004 lease levy that will be billed in 2004. The current lease with the School district runs through the end of the 2004-2005 school year. The Depot received approximately $76,000 in grants for 2003, primarily for general operating purposes. In addition, several thousand dollars have been donated to help fund cost of providing a police presence at The Depot on event nights. For 2004, The Depot has been awarded grants totaling $64,000. This figure includes the second of two $10,000 payments from the McKnight Foundation (two-year grant for, $10,000 each year) and the $54,000 Title V JJAC grant administered by the State of Minnesota. The 2004 Title V JJAC grant award came in $4,000 more than the grant request. Staff has been told by the grant administrator, Carrie Wasley, that the Depot is eligible for a third year (2005) in funding from Title VJJAC. Reapplication is necessary and a third year of funding is very possible. . With regard to Depot organizational structure and mission, the attached "Conceptual Organizational Chart for Depot Programs" has been updated since it was shown to Council in . July of 2003.The chart now includes the Student Board and Partners as the decision making bodies of the Depot, and shows further refinement of the roll of the Depot Business. The Depot Student Board, Partners and City staff continue discussions surrounding the structure of the Depot and the roles of the City and other partners. If I can be of further assistance in answering or researching any questions you may have, please let me know. . . j- "- . Conceptual Organizational Chart for Depot Programs DEPO PROGRAMS < ::.,'.x.'::'::::c..'.'" 't':::::'::'.: .,... .. . , . . ,.. ...... . .. -" .. -, . ...... --. - ..... ...... ,...., ....... ".. ., , ,', ,".. . :i1~iill~~~.}tlii~~I; . . , _.- Recent City staff discussions have centered on the concept of The Depot as a facility made up of separate, but somewhat interdependent programs. Programs include the Depot Teen Center, the Business Education Program, the Park District's Trailhead, and Facility Rentals. , Teen Board & Partners The primary decision making bodies of the Depot, the Student Board and Partners strive to reach consensus on issues involving all aspects of the Depot. The Student Board and Partners also recognize that each has its area of special need, expertise, and commitm~nt. Teen Center. With direction from the Student Board of Directors and the Teen Center Coordinator, the Teen Center would continue to plan and implement teen activities such as Friday Night Concerts and other special events. In cooperation with the business . education program (i.e., coffee shop, etc.), the Teen Center would also remain "open" for drop-ins when no planned programming is scheduled. The Teen Center would continue - .. .un_.. ....._._. :[ . ;. . to be supported primarily by grants and contributions. The Depot Partners would continue to serve in an advisory and oversight capacity. Business Education Program. This program consists ofa working business to serve as a Business Lab for the Hopkins High School Business Department. The Coffee Shop has recently begun to fill this role. The Business Department, in cooperation with the Depot business/operations manager, will take the lead in developing the educational curriculum and designing a viable business model. In addition to business revenues, The Depot levy for lease set by the School District would help fund for this program. Park District Trailhead. Currently The Depot serves as a trailhead for the SW Regional LRT Trail operated by the Three Rivers Park District. The City of Hopkins' lease with the Hennepin County Regional Railroad Authority contains provisions related to the trailhead and stipulating the responsibilities the City has with regard to its operation (e.g., hours during which The Depot is expected to remain open). The Park District has made capital improvements to The Depot grounds. It may be appropriate to invite the Park District to serve as an official Partner on the Depot Partners Board. Rentals. The Depot is occasionally rented out for private events, during which time the building, or a part of the building, is closed to the general public. Through December, approximately $4,950 has been earned for rentals in 2003. A new curtain/room divider has recently been installed and may make The Depot more attractive as a rental facility ." for special events, meetings, etc. The Rental "program" would be the responsibility of the Depot Operations Manager. Discussion Among The Depot Partners & Student Board While City staff believes that The Depot Coffee Shoplbusiness may be able to increase revenues and/or lower expenses to the point where the business itself breaks even or makes a small "profit," staff also feels that it is very unlikely that the business can ever truly generate enough earned revenue to significantly support the teen center, as was the original goal. Under this new proposed approach, the goals of providing a safe, chemically free gathering place for teens would remain, but the method of delivery and the responsible organization/personnel may change somewhat. For instance, the School District would be the driving force behind The Depot Coffee Shoplbusiness for business education purposes. For such a shift in thinking/focus to occur among The Depot Partners & Student Board, will need to reach a consensus with regard to The Depot's ongoing structure and mission. .