08-22-18 Personnel and Finance (#4)

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CITY OF SOUTH BEND I OFFICE OF THE CLERK $25,000 less in terms of loss for this coming year. That is being driven by a goal that we will have one hundred and fifteen (115) events within the Morris this coming year, which is an increase. And our goal for two (2) years from now is to have one hundred twenty-five (125) events. We believe we need to run more events through that building and we will continue our effort to do so. That $25,000 ends up being through a tightening of our operation and with working to be more efficient with what we are doing as well as growing revenue. While we still see the increase of two percent (2%) on the salary side and four percent (4%) on the benefits side, we are able to chip away at that by bringing in more events. We are proud of that and the good work that team is doing. There is no new head count but just a new and concerted effort to bring more events. He continued, This (referencing a slide of the presentation) will give you a historical look where we have been with revenue and expense. It has definitely been a net revenue over the last number of years. 2016 stands out for a couple of reasons. That was a longer run on the Broadway Theater side with Wicked. I wouldn't call that an anomaly because, frankly, that is where I expect that to be in a number of years. So while it is outside the norm, our intention and goal is to have more years that look like 2016 as compared to where we have been.The Palais is anticipating a$190,000 deficit this year. That is slightly increased year over year. That is due in part to how we are accounting for positions which has been above and below the line in the past as well as a new operating deal with the folks at Navarre Hospitality. That has been renewed through 2020. It changed slightly and it will increase that deficit as well as there are fewer mid-term bookings for 2019. So we are working aggressively with the team at Navarre to close that gap. He went on,The Century Center is not asking for any dollars from the General Fund at all.Through our allocation from the St. Joseph County Hotel-Motel Tax Board, we have funding as well as through our event revenues. In 2017, the Center had almost a $12 million economic impact and that is considerably more than the economic impact from 2012 when that was previously conducted. We will now run the economic impact each year going forward. We are excited about what that means. Through our operating budget and through a consolidation and reorganization of that agreement with SMG, who is the event management, food, beverage, sales and marketing contractor,we have done a terrific job over the last five (5)years. We are pleased to renew that for three (3) years. That will expire in 2020. We were able to largely hold flat our expenses while reinvesting in our operation. We reinvested to the tune of $100,000 in a new Business Development Fund that we are able to attract new business,buy-down events or whatever the case may be. That is something new for this coming year. He continued, In gross,there is an anticipated$4.5 million in revenue this coming year. There are fewer events and people so we are working hard to get to that number. Fewer long-term bookings is the reason for that to stay flat so we will close that gap through more local business,which, isn't necessarily our main mission and focus but it is a short-term strategy for us to ensure we get that $4.5 million in revenue. We are moving forward with a balanced budget as we anticipate $4.5 million on the expense side. Here (referencing a slide in the presentation) you can see the breakdown on that. We are asking the Hotel-Motel Tax Board for $1.26 million for capital and $1.275 on the operating side. That has been flat for the last number of years. And as a little bit of perspective, there are no dollars coming in from the City and their General Fund. We are actually trending up, too. SMG has worked hard to bring more events into that building to see revenues increase. You will see in 2015 when it didn't hit that trend line. The reason for that is much of our space was offline to make improvements. The resulting impact of those improvements is apparent EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld I South Bend,Indiana 466011 p 574.235.9221 If 574.235.9173 1 TTD 574.235.5567 I www.southbendin.gov 4