Music Center profit loss discussion - this is fun.

The latest discussion on the financial impact the Music Center has on the City budget can be found on the city website and starts 1 hour 5 minutes and 11 seconds into the video (1:05:11).  The latest figures are posted below.  The video to the left starts at about 1:19:25.  This time was chosen because of my remark stating that debating the numbers is fun.  My view is that being able to figure out these costs and benefits is like solving a puzzle or a riddle.  Last month we got some preliminary numbers and the DDN wrote a story that made it seem like the Music Center made the City $160,000.  We see in this update some numbers and if you listen to the rest of the video to the left you will hear that these numbers don't include overtime paid for police services directly related to security of the facility and they only include 10 months of the past year.  With that information I'm sure many of my friends will be saying that the Music Center didn't make the City $160,000 but instead cost the city over $200,000 (not including the mortgage payment, that's totally different).  As we progress in this discussion its my goal that as we go into the next year we capture a good picture of what it cost us this year and put it into a format that we can post on the City website so that people can refer to an official city position.  This will help further the discussion on how we can best utilize the Music Center as we go into future years. 

The main reason I broke up the report into multiple pictures was because the screen shot wasn't readable otherwise.  However, it did make it possible for me to add comments also.  If you would like to download a .pdf version of the report you can do it by clicking here

This first section was briefed to be the profit loss as they relate to the contract with the management firm we hired to run the music center.  These are important numbers to present in this format because this would be what would determine the profit sharing part of the contract.  In that contract we pay the management company a set amount per year ($225,000) and then a portion of the profit after the profit exceeds a certain amount (my memory tells me that was $150,000 but I'm not absolutely sure that is correct).  

Music Center Financials - profit loss as they relate to MEMI contract

These next numbers show revenues and expenses that aren't counted in the management contract toward the calculation of profit / loss.  But they are revenues and expenses that the city has because of the Music Center.  At the end of the first set of numbers a net of $87,345 is presented.   The second set of numbers turns our to be an additional cost to the city of $276,174.  In this document the $276,174 is not subtracted from the $87,345 to show a net of negative $188,829.  I know a lot of people would do this calculation and say that the Music Center had a $188,829 loss instead of the $160,000 profit reported in the DDN.  Others may even add in the cost of police overtime and also ask for an entire year of costs instead of just ten months.  These are items we can discuss and debate as we move forward.  

Music Center profit loss as they relate to Other City and One Time Capital Expenditures

Below you will find the notes that tell us that there is still work being done.  Its good for you, me and staff to realize that these still are not the final numbers we want people to refer to as we go forward or later when we look back.  
Music Center notes

Other items that come to mind when trying to answer the question of how much cost / benefit does the music center provide include:  
1.  How much psychological benefit it provides.  This won't be a $ number but I do hear a lot of comments from residents that they are proud we have the music center so it seems right to note this and perhaps try to capture it in the report some way.

2.  How much economic activity it provides.  This will be another fun puzzle to discuss but since "spurring the development of the Heights" was one of the main reasons given for building the facility it makes sense to try and capture how well that objective is being met.

3.  Capture the sign costs and benefits

4.  Decide how "little" we need to go for the discussion to be usefull.  For instance we did not capture the cost on the Human Resources department this year. How much did this cost?  Council has already made the decision to buy $35,000 of software next year mostly because of the extra work this year needed to hire the part time employees for the Music Center.  So it seems like there should be some costs listed this year due to the strain on the HR department. 

See, solving this puzzle is fun and discussing the results can be great entertainment for you and me.  Won't you join me!