6.7. SR 11-15-2004 - Laserfiche WebLink

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MUNICIPAL LIQUOR OPERATIONS Provides for the total operation of the Elk River Municipal Liquor Stores as authorized by Minnesota State Law and the Elk River City Council. 2005 BUDGET COMPARED WITH 2004 BUDGET The 2005 municipal liquor operating budget is proposed in the amount of $1,114,100. This is a $115,900 or 11.6 percent increase over the adopted 2004 budget. The biggest change in the liquor operation is the planned construction of a second municipal liquor store. The plan calls for the project to be bid out in February, have construction start in the spring, and have "Westbound" open for business in late fall of 2005. Westbound is proposed to be 10,000 sq. ft. and the project has a construction budget of approximately $1.75 million. Funding for this project will come from a combination of liquor store reserves and a bond (or a loan from local banks). Northbound, constructed in 1997, is scheduled to have its debt paid off in 2007. Overall, sales in 2005 are projected to be flat at Northbound at slightly over $4 million. Sales for three months at Westbound are projected at $450,000. Based on a 27% gross profit figure and some miscellaneous revenue, this works out to be $1,241,200 in total revenues. This is a $53,700 or 4.5 percent increase over the revenues in the adopted 2004 budget. Regarding expenditures, an increase in personnel services is anticipated with an additional store needing more manpower. Additionally, personnel services is planned to increase based on a typical cost of living adjustment and employee wage step increases as identified in the pay plan. Other expenditure increases to note, all of which are due mainly to the second store, include an increase in utilities, depreciation, and credit card fees. Credit card fees are approximately 3% of the operating budget and in general is the "price of doing business" in today's economy. Approximately 50% of the sales at Northbound are by credit card. Another expenditure to note is the capital outlay for $10,000. This is for a new monument sign at Northbound. Also, the transfers in the amount of $233,300 is at the identical level as what was in the 2004 budget. With the addition of the second store, another full-time employee is planned to be added in 2005. The liquor store operation in 2005 will include the liquor store manager plus five full-time employees and between four and seven part-time employees depending on the season.