CR 05-164 Charitable Gambling Premises Permit Application for Hopkins Raspberry Festival
December 14, 2005
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Council Report 2005-164
CHARITABLE GAMBLING PREMISES PERMIT APPLICATION FOR
THE HOPKINS RASPBERRY FESTIVAL
Staff recommends approval of the following motion: Move that the Hopkins City Council
adopt Resolutions 2005-122, approvin(J the charitable gambling premises permit for the
Hopkins Raspberry Festival, 1022 Mainstreet.
Adoption of this resolution will allow the Hopkins Raspberry Festival to continue to run the
existing charitable gambling activities at Decoys.
Overview
. The Hopkins Raspberry Festival has requested a renewal of their gambling license
and premises permit. They conduct charitable gambling at Decoys only.
Primary Issues to Consider
. Does this organization meet the criteria of the City's gambling policy?
Yes
. Has the organization conducted its past gambling operations in accordance with
state and local laws?
Yes
Supporting Documents
. Resolution 2006-122
. Legislative Policy 4-A, Lawful Gambling
. List of donations made by the Hopkins Raspberry Festival
. 2004-2003 Audit
. Gambling License Application available in the City Clerk's office
~~~
Terry Obermaier, City Clerk
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 2005-122
RESOLUTION APPROVING A GAMBLING
LICENSE FOR THE HOPKINS RASPBERRY FESTIVAL
WHEREAS, the Hopkins Raspberry Festival has been an integral part of
the Hopkins Community, and
WHEREAS, the Hopkins Raspberry Festival has applied for a gambling
license to conduct lawful gambling in 2006 and 2007, and
WHEREAS, the Hopkins Raspberry Festival has conducted gambling
activities in accordance with state law and Hopkins City Policy,
NOW, THEREFORE, be it hereby resolved that the City Council of the
City of Hopkins, Minnesota, approves the Hopkins Raspberry Festival
Premises Permit Renewal application at Decoys, 1022 Mainstreet, Hopkins.
Adopted by the City Council of the City of Hopkins, Minnesota, this 20th day
of December, 2005.
Eugene J. Maxwell, Mayor
ATTEST:
Terry Obermaier, City Clerk
POLICY 4-A
LAWFUL GAMBLING
1. PURPOSE
1.01 The purpose of this policy is to establish rules and procedures for lawful gambling in
the City of Hopkins.
2. REGULATIONS
2.01 Except as otherwise enumerated herein, the provisions of Minnesota Statute Chapter
349 relating to the definition of terms, licensing and restrictions of gambling are
adopted and made a part of the statement of policy promulgated by the City of Hopkins
as if set out in full
2.02 An applicant for a license shall be a registered Minnesota nonprofit corporation or an
organization which is designated as exempt from the payment of income taxes by the
Internal Revenue Code and whose principal location or office is within the City of
Hopkins.
2.03 The organization defined in Section 2.02 must be engaged in its activities for the benefit
of the community within the City of Hopkins for at least five years on a perpetual,
continuous, uninterrupted basis and have at least 30 active voting members.
2.04 Gambling allowed by the city shall be carried on only within premises owned, occupied
or leased by the organization except such activities permissible under M.S. 349.166.
2.05 No application for a premises permit will be approved for any organization to conduct
gambling on any premises other than the premises of an on-sale liquor licensee or the
premises of a fraternal, veterans or other non-profit organization. In order for a
fraternal, veterans, or other non-profit organization to conduct gambling on their
premises, such premises must have been continuously owned and occupied for a period
of at least five years. No application for premises permit shall be approved for any
organization for a site established for the primary purpose of conducting gambling.
This section shall not apply to any organization which is exempt from the requirement
for a gambling license according to M.S. 349.166.
2.06 A Class A license will only be approved for an organization that is licensed pursuant to
Minnesota Statute, section 349.16, and that conducts gambling on premises that it owns
and operates.
2.07 More than one organization, as defined in Section 2.02, may conduct gambling within a
single owned, occupied or leased premise. More than one organization may jointly
conduct a lawful gambling game at one location. However, two or more organizations
shall not separately conduct the same game at the same time at one location.
2.08 The operation of gambling devices and the conduct of bingo and raffles licensed or
approved pursuant to the authority granted to the City of Hopkins shall be carried on
under the supervision of a gambling manager designated by the organization. The
gambling manager shall be responsible for the operation of the gambling activity and
Legislative Policy Manual -- Chapter 4-A
the receipts and profits generated from the operation.
2.09 The gambling manager shall be an active member of the organization issued the license
and shall qualify under state law.
2.1 0 Organizations seeking approval for a premises permit, that are not currently conducting
gambling in the City, must provide the City, in addition to the application forms, a copy
of the minutes of a general membership meeting, where a quorum was present, wherein
the organization approved a motion authorizing the gambling activities.
2.11 Participants in raffles, paddlewheels, pull tabs and tip boards shall be restricted to
individuals who have attained the legal drinking age. This restriction only applies to
premises where liquor, wine, beer or 3.2 beer is served. Where intoxicating beverages
are not served the age shall be eighteen.
2.12 Organizations wishing to renew a gambling license must provide the City with a
financial audit of its lawful gambling activities and funds for the previous two years.
The audit(s) must be performed by an independent accountant licensed by the state of
Minnesota.
2.13 In addition, such organizations must provide the City with information on all
expenditures of lawful gambling funds during the previous two years. Such information
must include at a minimum the name of the recipient, the amount of the expenditure or
contribution, and a brief description of how the expenditure or contribution meets the
definition of "lawful purposes" as defined in M.S. 349.12. The City reserves the right to
require additional documentation from licensed organizations, or organizations seeking
licenses, as it deems necessary.
2.14 A fee of $100.00 shall be charged to all organizations submitting a Premises Permit
Application or Applications for approval by the City.
Established 11/19/85 by Resolution 85-3218
Revised 4/19/94
Revised 12/16/97
City of Hopkins
Legislative Policy Manual -- Chapter 4-A
2
Summary of donations by Hopkins Raspberry Festival Charitable Gambling
1/1/04 - 12/31/04
Hopkins Raspberry - $91,046.48
St Louis Park Partacular - $11,046.48
MS Society - $500.00
G.V. Lutheran Church - $500.00
Scholarships and Bonds for Royalty - $5000.00
1/1/05 - Present
Hopkins Raspberry -75,582.89
St Louis Park Partacular - $6000.00
Hopkins Little League - $733.95
Scholarships and Bonds for Royalty - 3500.00
LAWFUL GAMBLING FUND OF
HOPKINS RASPBERRY FESTIVAL ASSOCIATION, INC.
(LICENSE #02297)
(MN 10# 3815795)
STATEMENT OF ASSETS, LIABILITIES AND PROFIT CARRYOVER
REGULATORY BASIS
OCTOBER 31, 2004 AND 2003
2004 2003
ASSETS
CASH
Gambling Bank Accounts:
Interest Bearing $ 43,378 $ 46,062
Cash - Games In Play 1,462 4,938
Starting Game Banks 8,387 10,906
Total Cash $ 53,227 $ 61,906
INVENTORIES $ 2,269 $ 3,239
Total Current Assets $ 55.496 $ 65.145
LIABILITIES
ACCOUNTS PAYABLE
State Gambling Taxes $ 13,283 $ 16,659
Vendors Payable 2,921 3,881
Total Accounts Payable 16,204 20,540
Unearned Revenues - Games In Play 1.462 4,938
Total Current Liabilities $ 17,666 $ 25,478
COMMITMENTS AND CONTINGENCIES
FUND BALANCE
FUND BALANCE
Profit Carry-Over $ 37,830 $ 39,667
Total Liabilities and Fund Balance $ 55.496 $ 65.145
See accompanying Notes to Financial Statements.
(2)
LAWFUL GAMBLING FUND OF
HOPKINS RASPBERRY FESTIVAL ASSOCIATION, INC.
(LICENSE # 02297)
(MN 10# 3815795)
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN PROFIT CARRY-OVER
REGULATORY BASIS
FOR THE YEARS ENDED OCTOBER 31,2004 AND 2003
2004 2003
AMOUNT PERCENTAGE AMOUNT PERCENTAGE
REVENUES
Pull-Tab Receipts $ 3,41t.268 100.0% $ 4,386,146 100.0%
Raffie Receipts 0 0.0% 0 0.0%
Paddle Wheel Receipts 0 0.0% 0 0;0%
Interest Income 51 0.0% 184 0.0%
Revenues Collected $ 3,411,319 100.0% $ 4,386,330 100.0%
COST OF REVENUES
Pull-Tab Prjzes $ 2.775,252 81.4% $ 3,599.795 82.1%
Paddle Wheel and Raffle Prjzes 0 0.0% 0 0.0%
Cost of Revenues $ 2,775.252 81.4% $ 3,599,795 82.1%
GROSS PROFIT $ 636,067 18.6% $ 786,535 17.9%
ALLOWABLE EXPENSES $ 329.295 9.6% $ 392,011 8.9%
REVENUES IN EXCESS OF
ALLOWABLE EXPENSES $ 306,772 9.0%. $ 394.524 9.0%
LAWFUL PURPOSE EXPENDITURES
Gambling Taxes:
Combined Receipts and Other Tax $ 141,689 4.2% $ 189,375 4.3%
State Ideal Gambling Taxes 72,420 2.1% 95,519 2.2%
Ideal Tax Refund (17.5931 -0.5% 116.047\ -0.4%
Total Gambling Taxes $ 196.516 5.8% $ 269,847 6.1%
Audit Fees 4,000 O~1% 3,000 0.1%
Programs Expenditures 108,093 3.2% 151,200 3.5%
Board Approved 0 0.0% 0 0.0%
Total Lawful Purpose Expenditures $ 308,609 9.1% $ 424.047 9.7%
REVENUES IN EXCESS OF EXPENSES
BEFORE INCOME TAX $ (1.837) -0.1% $ (29,523) -0.7%
INCOME TAX PAID
Federal $ 0 0.0% $ 6,079 0.1%
Slale 0 0.0% 1,111 0.0%
Total Income Taxes $ 0 0.0% $ 7,190 0.1%
REVENUES IN EXCESS OF EXPENSES $ (1,837) -0.1% $ (36,713) -0.8%
PROFIT CARRY-OVER -Beginning o(Year $ 39,667 $ 76,360
ADJUSTMENTS
PROFIT CARRY -OVER - END OF YEAR $ 37.830 $ 39,667
See accompanying Notes to Financial Statements.
(3)
.
LAWFUL GAMBLING FUND OF
HOPKINS RASPBERRY FESTIVAL ASSOCIATION, INC.
(LICENSE # 02297)
(MN 10# 3815795)
ANAL YSISOF MAXIMUM ALLOWABLE EXPENSES
AS A PERCENTAGE OF GROSS PROFIT
REGULATORY BASIS
FOR THE YEARS ENDED OCTOBER 31,2004 AND 2003
(SEE INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION)
(UNAUDITED)
GROSS PROFITS
!I;
2004
R::\R nR7 !I;
ALLOWABLE EXPENSES
Cash Shortages - Net of Repayments
Cost of Games Used
Compensation and Payroll Taxes
Accounting and Legal Services
Bank Charges and Miscellaneous Supplies
Gambling Equipment
License Renewai, Bonds and City Fees
Rent
Utilities (Storage, Janitor, Trash)
$
4,804 $
47,872
217,738
o
12,252
o
2,657
40,852
3.120
Subtotal
$
329,295 $
Maximum Allowable Expenses by Minnesota
State Statute
349,791
Excess of Maximum Allowable Expenses in Excess
of Allowable Expenses - Current Year
$
20,496 $
Adjustments
o
Beginning Cumulative Maximum Expenses in
Excess of Allowable Expenses
520,363
Ending Cumulative Maximum Allowable Expenses
in Excess of Allowable Expenses
$
540.859 $
(8)
2003
7RR <;::\<;
3,122
64,476
242,951
2,500
23,534
o
5,019
36,000
14.409
392,011
432,595
40,584
o
479,779
520.363
LAWFUL GAMBLING FUND OF
HOPKINS RASPBERRY FESTIVAL ASSOCIATION, INC.
(LICENSE # 02297)
(MN ID# 3815795)
RECONCILIATION OF PROFIT CARRY-OVER
REGULATORY BASIS
FOR THE YEARS ENDED OCTOBER 31,2004 AND 2003
(SEE INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION)
(UNAUDITED)
2004 2003
ADDITIONS:
CASH IN GAMBLING BANK ACCOUNTS
$
43,378 $
46,062
CASH IN STARTING BANKS
8,387
10,906
CASH - GAMES IN PLAY
1,462
4,938
INVENTORIES
2,269
3,239
TOTAL ADDITIONS
$
55,496 $
65,145
SUBTRACTIONS:
TAX TO BE PAID TO DEPARTMENT OF REVENUE $ 13,283 $ 16,659
VENDORS PAYABLE 2,921 3,881
UNEARNED REVENUES - GAMES IN PLAY 1.462 4,938
TOTAL SUBTRACTIONS $ 17,666 $ 25,478
PROFIT CARRY-OVER FROM FINANCIAL STATEMENTS $ 37,830 $ 39,667
PROFIT CARRY-OVER FROM TAX REPORT 37,830 39,667
VARIANCE FROM BALANCE $ 0 $ 0
(9)