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project that is desired. Assuming that the liquor store fund is made <br />whole in July, 1997, the finances for a Westbound site and a new <br />Northbound store looks something like the following: <br /> <br />1/97 Cash Balance <br />Westbound Site <br />7/97 King/Main Revenues <br /> <br />Northbound Profits '97 <br /> <br />Operating Reserves <br /> <br />$675,000 <br />(3?5,000) <br /> 225,000 <br /> <br />525,000 <br />125,000 <br />650,000 <br />200:000 <br />$450,000 <br /> <br />A new Northbound store is estimated at $960,000 plus bond issuance <br />costs. Accordingly, the debt for a new Northbound store would be <br />approximately $550,000. This debt could be repaid in about a six year <br />time frame with profits from the Northbound store. <br /> <br />The above scenario assumes a continued contribution out of the liquor <br />store profits of $163,000 annually to the general fund. This <br />contribution includes the payment for part of the City Hall and Fire <br />Hall projects. This contribution is based on the assumption of <br />$293,000 annual profits being made by the Northbound operation. <br />Accordingly, about $130,000 annually will be available for debt. More <br />funds could be available for a project debt if the profit estimate is low <br />or if the city transfers less money into the general fund. The above <br />scenario is viewed as a worse case scenario and the financial situation <br />could be much better than the above review. Staff prefers to not go <br />into debt for a new Northbound store, but even if we waited one year <br />we would still be in debt to a certain extent. The debt would be less <br />and more manageable, but at this time it does not appear that we can <br />construct a new Northbound by only using the liquor store reserves. <br />As long as the debt is manageable, this situation is not a major <br />concern. <br /> <br />council\liqstrpj.doc <br /> <br /> <br />