CR 06-012 Charitable Gambling Premises Permit App for the Hopkins Elks Club
January 13, 2006
Council Report 2006-012
CHARITABLE GAMBLING PREMISES PERMIT APPLICATION FOR
THE HOPKINS ELKS LODGE 2221, 30 - 8th Ave S
Staff recommends approval of the following motion: Move that the Hopkins City Council
adopt Resolutions 2006-004, approving the charitable gambling premises permit for the
Hopkins Elks Lodge 2221, located at 30 - 8th Ave S.
Adoption of this resolution will allow the Hopkins Elks to continue to run the existing
charitable gambling activities at the Elks Club.
Overview
The Hopkins Elks Lodge has requested a renewal of their gambling license and premises
permit. The Elks Lodge conducts charitable gambling at the Elks Club location 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
. Resolutions 2006-004
. Legislative Policy 4-A, Lawful Gambling
. Financial Statement and Independent Auditor's Report, Years ending March 31,
2005 and 2004
. List of donations made by the Elks
. Gambling License Application available in the City Clerk's office
Terry Obermaier, City Clerk
Council Report
Page 2
Alternatives
1. Approve Resolutions 2006-004, allowing the Hopkins Elks Lodge to continue the
present gambling activities at the present location.
2. Do not approve the resolutions with the result that the Hopkins Elks Lodge will no
longer have gambling in the City of Hopkins.
3. Continue to the next meeting for more information.
Staff recommends alternative one.
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 2006-004
RESOLUTION APPROVING A GAMBLING PREMISES
LICENSE RENEWAL FOR THE HOPKINS ELKS LODGE, AT
30 _8TH AVENUE SOUTH
WHEREAS, the Hopkins Elks Lodge 2221 has been an integral part of
the Hopkins Community, and
WHEREAS, the Hopkins Elks Lodge 2221 has applied for a gambling
license to conduct lawful gambling in 2006 and 2007, and
WHEREAS, the Hopkins Elks Lodge 2221 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 Elks Lodge 2221 Premises
Permit Renewal application for The Hopkins Elks Lodge at 30, 8th Avenue
South, Hopkins MN.
Adopted by the City Council of the City of Hopkins, Minnesota, this 17th day
of January, 2006.
Eugene J. Maxwell, Mayor
ATTEST:
Terry Obermaier, City Clerk
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 has its principal or registered office, street address and zip
code within the City of Hopkins.
2.03 The organization defined in Section 2.02 must be engaged in its primary 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 members as
defined in Minnesota Statute Chapter 349.
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 permit or license to conduct bingo 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 Only one organization, as defined in Section 2.02, may conduct gambling within a
single owned, occupied or leased premise.
Legislative Policy Manual -- Chapter 4-A
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
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.
2.10 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 notice sent to the general membership announcing the meeting to authorize
gambling activities, and 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 oflawful 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.
2.15 The City shall receive 10% of net profits from organizations conducting gambling in
leased premises.
Established 11/19/85 by Resolution 85-3218
Revised 10/5/1993
Revised 4/19/94
Revised 12/16/97
Revised 8/19/2003
City of Hopkins
Legislative Policy Manual -- Chapter 4-A
2
~n____
,
.'.
..
LAWFUL GAMBLING FUND OF
HOPKINS ELKS LODGE NO. 2221
(License # B-00365)
Statement of Assets, Liabilities and Fund Balance
REGULATORY BASIS
March 31, 2005 and 2004
ASSETS
Year Ended
3/3112004
Year Ended
313112004
CURRENT ASSETS:
CASH:
Cash on Haod - Site Baoks
Cash in Bank - Checking
Total Cash
INVENTORIES:
Inventory
Total Inventories
Total Current Assets
3,500.00 4, I 00.00
7,165.94 15,340.27
10,665.94 19,440.27
884.61 660.42
884.61 660.42
11,550.55 20,100.69
0.00 0.00
0.00 296.00
2,025.96 2,056.26
2,025.96 2,352.26
13,576.51 22,452.95
OTHER ASSETS:
Merchandise Prizes Not Awarded
Raffle Ticket Expense
2% Tax Refund - G-7430
Total Other Assets
Total Assets
LIABILITIES
CURRENT LIABILITIES
Accrued State Taxes
Deposits from Games Still in Play
Other Liabilities
Total Current Liabilities
34.54 235.13
0.00 0.00
30.00 0.00
64.54 235.13
64.54 235.13
Total Liabilities
FUND BALANCE
Profit Carryover Beginning of Year
Revenues in Excess of Expenses
Expenses in Excess of Revenues
Profit Carryover
Variaoce
Fund Ba1aoce End of Year
22,217.82
. 0.00
8,729.39 -
13,488.43
23.54
13,511.97
35,256.64
0.00
13;015.28
22,241.36
-23.54
22,217.82
Total Liabilities aod Fund Balaoces
13,576.51
22,452.95
(See accompaoying Notes to Finaocial Statements)
LAWFUL GAMBLING FUND OF
HOPKINS ELKS LODGE NO. 2221
(Liccnse B-00365)
Statements of Revenues, Expenses and Changes in Profit Carryover
REGULATORY BASIS
For the Y cars Ended March 31, 2005 and 2004
Year Endcd 3/31/05 Yeal' Ended 3/31/04
Amount % Amount %
REVENUES
Pull-Tab Receipts 505,194.00 98.27% 673,219.00 99.31%
Bingo Receipts 3,461,45 0.67% 2,445.25 0.36%
Raffle Receipts 4,344.00 0.84% 0.00 0.00%
Paddletickets 0.00 0.00% 2,160.00 0.32%
Tipboard Receipts 1,110.00 0.22% 60.00 0.01%
Interest Income 0.00 0.00% 0.00 0.00%
Revenues Collected 514,109.45 100.00% 677,884.25 100.00%
COST OF REVENUES
Pull-Tab Plizes 425,686.00 82.80% 568,111.00 83.81 %
Bingo P1izes 1,727.04 0.34% 1,192.32 0.18%
Raffle P1izes 3,266.72 0.64% 0.00 0.00%
Paddleticket Prizes 0.00 0.00% 1,080.00 0.16%
Tipboard P,izes 615.00 0.12% 30.00 0.00%
Cost of Revenues 431,294.76 83.89% 570,413.32 84.15%
GROSS PROFIT 82,814.69 16.11% 107,470.93 15.85%
ALLOWABLE EXPENSES 53,536.66 10.41% 60.990.68 9.00%
REVENUES IN EXCESS Of
ALLOWABLE EXPENSES 29.278.03 5.69% 46,480.25 6.86%
APPROVED ADJUSTMENT 0.00 0.00% 0.00 0.00%
LAWFUL PURPOSE EXPENDITURES
Gambling Taxes:
State Combined Receipts Tax 2,504.41 0.49% 2,580.24 0.38%
State Ideal G-d1llbling Tax 10,824.15 2.11% 13,587.80 2.00%
State Ideal Gambling Tax Refund -2,025.96 -0.39% -2,115.94 -0.31%
Board fee 514.11 0.10% 513.35 0.08%
Olher State Taxes (8.5%) 238.99 0.05% 198.30 0.03%
Total G-d11\bling Taxes 12,055.70 2.34% 14,763.75 2.18%
Audit Fees 967.00 0.19% 967.00 0.14%
Program Expenditures 24,984.72 4.86% 43,765.60 6.46%
Total Lawful Purpose Expenditures 38.007.42 7.39% 59.496.35 8.78%
REVENUES IN EXCESS OF EXPENSES
BEFORE INCOME TAXES -8,729.39 -1.70% -13,016.10 -1.92%
INCOME TAXES 0.00 0.00% 0.00 0.00%
Revenues in Excess of Expenses 0.00 0.00% 0.00 0.00%
Expenses in Excess of Revenues -8,729.39 -1.70% -13,016.10 -1.92%
Profit Carl)'-over - Begi1111ing of year 22,241.36 35,256.64
Profit Carry-over - Adjustments 0.00 0.82
Profit 0u1)'-over - End of Year 13,511.97 22,241.36
(See accompanying Notes to financial Statements)
LAWFUL GAMBLING FUND OF
HOPKINS ELKS LODGE NO. 2221
(Licensc #B-00365)
ANALYSIS OF MAXIMUM ALLOWABLE EXPENSES
AS A PERCENTAGE OF GROSS PROFIT
REGULATORY BASIS
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004
3/31/2005 3/31/2004
Gross Profit 68,733.03 90,591.24
Allowable Expenses
Cost of Games Used 9,551.50 12,179.26
Compensation and Payroll Taxes 35,958.15 36,640.20
Accounting and Legal Serviccs 1,925.00 2,790.00
Adveltising 827.35 212.00
Bank Charges & Supplies 3,378.71 2,845.12
Ganlbling Equipmcnt and Rcpalrs 1,175.95 3,318.76
License Rcnewals, Investigative Fce 100.00 525.00
Penalty & Interest 0.00 0.00
Rent 0.00 1,144.88
Utilities 0.00 0.00
Reimbursement of Excessive Cash Shortages 0.00 -123.54
Cash ShOltages 620.00 1,459.00
Total Allowable E"'penses 5,3.536.66 60,990.68
Maximum Allowable Expenses by Minnesota
State Statutes 37.803.17 49,825.18
Excess of Maxinlum Allowable Expenses in Excess
of Allowable Expenses - Current Year -15,733.49 -11,165.50
Beginning CunlUlative Maximum E""penses in
Excess of Allowable Expenses 56,679.36 67,844.86
Ending Cwnulative Maximum Allowable Expenses
in Excess of Allowable Expenses 40,945.87 56,679.36
.
LAWFUL GAMBLING FUND OF
HOPKINS ELKS LODGE NO. 2221
(License #B-00365)
RECONCILIATION OF PROFIT CARRYOVER
REGULATORY BASIS
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004
ADDITIONS:
3/31/2005
3/3112004
Cash in gambling bank accounts
7,165.94
15,340.27
Cash in staltiug banks
3,500.00
4,100.00
Ending inventol)'
884.61
660.42
Cash receipts not deposited from games
closed and reported on schedules B
7430 Refund
Raffle Ticket Expense
Mdse Prizes paid for, not awarded
0.00 0.00
0.00 0.00
2,025.96 2,056.26
0.00 29.00
0.00 0.00
13,576.51 22,185.95
Required reimbursement for excess cash ShOlt
TOTAL ADDITIONS
SUBTRACTIONS:
Tax to be paid to depal1ment of revenue
34.54
235.13
Net cash receipts from games in play aod
U1ll'epolted at month eud
0.00
0.00
Net loans included in bank statement
balance above
Other
0.00 0.00
0.00 0.00
30.00 0.00
0.00 0.00
64.54 235.13
13,511.97 22,241.36
13,511.97 22,241.36
0.00 0.00
',.,
Unpaid invoices included in ending inventory .
Unpaid invoices included in cost of goods sold
TOTAL SUBTRACTIONS
.
Profit Can)'over from Financial Statements
Profit Can)'over from Tax Report
Difference
Organization Name
Gambling Fund Reconciliation
Ucense Number
Month and year reported
.. G-l Schedule F
.
Hopkins Elks Lodge No. 2221
B-00365
3/31/05
Your gambling checking account
1) End.of~month bank balance
from bank statements
'2j"'T.;tai'cii;;;idriii'aC;;~uiii........""""""""...""..................................................................................................................................................................
........~.~P..~.~.i!:.!.'?.T.~.~.~~!.............................................................................._......_.._._.___............................................_...............................................~.
9,359..87
102.00
3) Add Lines 1 and 2 3
.4j..T~t~i'~r~h~k~...............................................................................................................................................................................................................
outstanding 4
,.S).Subtr~.d.iin;.4.tr~~.jf~.;.3:..This.{;;..............................................................................................................................................................................
the reconciled bank balance. 5
...............................................................................................................................................................................................................................................
9,461.87
2,296.93
Additions: other gambling funds not included in your checking account
7,166.94
6) Start banks por books
Unreimbursed losses
6.
6b
3,600.00
0.00
........~~~:.I?!.:T.~~!~..~.~.~.~..~!~~~~.!~.~!~~.i.~.rJ..~~~~.~~~.~.~.~~~.~~~.:..~~t..........................................................................................~
7) Dollar amount of your
ending inventorj 7
.8)..c;~h.~~;iv;;d.b.Lii.~~i......................................................................................................................................................................
deposited during the month. 8
.9)..T~ai'~r;;.;;~jj.nts..{~..aii.savings.........................................................................................................................................................
and investment accounts 9
.1.i:ij.Am~;:iri.i.~rr~q.uj'r;ci"r~imb..;~r..........................................................................................................................................................
excess cash short Oine 34 G~1) 10
.1"l.j'Fu~d.L.~~~.....................................................................................................-...........................11"8......................0:0.0..............
Unsold ticket refunds 11 b 2,025.96
Merchandise prizes awarded 11 c 0.00
Merchandise prizes paid for, not awarded 11d 0.00
Other additions (attach explanation) 11 e 0.00
Total 11
.................................................................................................................................................................................................................
3,500.00
884.61
0.00
0.00
0.00
0.00
2,025.96
12) Add lines 6 through 11 12
.1.S).Add.iiii;.S..ancfiin;.1.i:..This.is....................................................................................................................................................................................
.......Y.~.l!!..2~~!:>~~~!1.~.'!~.~~!.~~~.~~!?:..............................................................................._................................_..........................................................~~.
Subtractions: unpaid obligations and receipts from games not closed
14) Total of tax listed on line 13 of all
forms G-1that remains unpaid 14 34.54
.1.5).R;;;;i~.d;p.;Sit~.fr;;;;;.;:affi;,;.'c;r.g;m~s.~tiii........................................................................................-....................................
in play that are not includ9d on fann G-1 15 0.00
.1.6)..Pr~iir~.ssiv~.tipb.oard.accumu'iat.edja~i;;;;i...................................................................................................................................
prizes not yet awarded 16 0.00
.1.7j.T~tai.i~ans.payabi~.tn;iT;.any.........................................................................................................................................................
source at end of month. 17 0.00
.................................................................................................................................................................................................................
18) Total COG unpaid including
sales tax at end of the month. 18 0.00
6,410.67
13,676.51
.~.~~.!~~~.l;!~~!~.~~~~!~~.!~~..'!!!~~~~~~~!:............._......................................................................................................_...............J.~ 30.00
.~~tI.~~!.~!.?!~~!..~.~.~!~~!~~~..........................................................................................................................................................~~ 0.00
.?~J.f.:?~.!!~~~..1~.!~.~?~Rh..~.9...........................................................................................................................................................................................~1. 64.64
Reconciliation
.
22) Subtract line 21 from line 13
This is the gambling fund balance 22 13,611.97
.23j"Am;jj-,;t.oi"your.pr~fit.~ariY~v;r....................................................................................................................................................................................
(from line 44 of this month's G-1) 23 13,511.97
.24).if.lin..;..i.i.is.;:.jiii;.2~.OVerag;...............................................................................................................-.............--.............................................24.0.00
.....~..1~.I.i.~.~..~.?!~.::.!!~~.3~.:.~.~?.~~~t~.............................................................................................................................................................................~.~....................".........
SchF MAR05 10/4/2005
HOPKINS ELKS LODGE #2221
2004 AND 2005 CHARITABLE AND LODGE CONTRIBUTIONS FROM GAMING
(See note at bottom regarding 2005 asterisks)
Real Estate Taxes
. Scholarships (Including Teenager of the Month)
. Minnesota Elks Youth Camp
. Raspberry Weekend Events
. Hopkins Community Christmas Tree
. Hopkins Fire Department Open House
. Hopkins Little League
Minnesota Special Olympics
. Hopkins School (High School and Elementary)
. Boy Scouts
Elks National Foundation
. Hopkins Family Resource Center
YMCA
. Santa Breakfast
. Empty Bowls
MS Bikathon
. Chapel View Christmas Tree
. Crime Stoppers
Helping Paws of Minnesota
Others
Approximate from Lodge & P D Fee Funds
TOTALS
Direct Benefit to Hopkins Community:
2004 2005
$11,436 $12,801
7,949 *800
7,785 *
2,024 *300
900 *
500 *
500 500
500 *
400 175
500 *
410 *
200 *
200
171 *
100 100
100
80 75
100
100 75
120 *200
Unknown *15,000+ (A)
$34,075 $30,026+
$21,209 *$16,775 (A)
Note: Due to extreme drop in income for the last three quarters of 2005,due to statewide and
especially Hennepin County, gaming income, many donations during that period of time were
made from Lodge Funds. Included were Teenager of the Month, ENF Scholarships (from P. D,
Fee Fund), Raspberry Community event costs, Youth Camp donations and many local
charitable donations. It is our hope that through expense reductions, a better economy and new
smoking rules that we may return to a time when gaming may be able to increase our share of
charitable donations.
CVL:me
1/412006