I was struck by the percentage of income that came from grants, contributions and sponsorships. Of the $1.067 Million of income received, almost $780 Thousand came from this "free" income. Over 75% of total income, that amount paid for about half of the total expenses. We were given half of what we spent.
Unfortunately, we only "earned" $290 Thousand, or less than 20% of total expenses. That $290 Thousand came from about 40,000 visitors. I suggest now that 40,000 visitors should have represented a reasonable success for this event. 40 Thousand people coming through our small, rural community represents a positive achievement that took years of work by many in this community, most particularly by outstanding city employees like Peggy Bourne.
However, this achievement did not represent a success. It represented a half million dollar loss, a debt which we all will have to dig in our pockets to retire. Forty Thousand just did not cut the mustard for an event with a $1.5 Million budget. This begs the question, how many visitors would we have needed to break even?
Well, our "nut", or the amount we had to "earn" was total expenses minus total grants, or $808 thousand in order to break even. With 40 thousand visitors, we achieved only 36% of that amount.
At the rate of income per visitor represented by the information above, our city would have had to attact 111,426 visitors to break even.
The question I ask our city leaders to answer is whether or not they believe that was a reasonable expectation for a rural community like Great Falls.
Many of the variables were known before the event started. The total amount of hotel rooms in the city is a knowable number. June is usually a rainy and chilly month; no one should have been surprised that a coat and umbrella were needed.
This accounting raises serious questions about the scope of the planned event. Our municipal leaders had a fiduciary duty to manage that scope to keep it reasonable. I suggest that the finanical shortfall we experienced shows that such management was nonexistent.
I like and respect our mayor, our city manager, and the members of our city commission. However, they have a duty to be conservative in their estimations. Was a budget that required 112 Thousand tourists to come through Great Falls, MT in our chilliest and rainiest summer month a conservative estimate?
I think not.
Income | Percent of total expenses | ||||||||||||
Grants-Federal | $409,000 | 25.79% | |||||||||||
Grants-State | 142,500 | 8.99% | |||||||||||
Grants-Misc | 126,875 | 8.00% | |||||||||||
Grants-Contributions | 82,584 | 5.21% | |||||||||||
Grants-Sponsorship | 16,250 | 1.02% | |||||||||||
Grants ("free income") subtotal | $777,209 | 49.01% | |||||||||||
Admissions | 203,443 | 12.83% | |||||||||||
Entry Fees | 59,710 | 3.77% | |||||||||||
Other | 27,105 | 1.71% | |||||||||||
Earned Income subtotal | $290,258 | 18.30% | |||||||||||
Total Income | $1,067,467 | 67.32% | |||||||||||
Expenses | |||||||||||||
Marketing | $ 383,870 | 24.21% | |||||||||||
Tribal Events | 268,828 | 16.95% | |||||||||||
Arts and Culture | 149,206 | 9.41% | |||||||||||
Museums and Tours | 145,834 | 9.20% | |||||||||||
Misc Vendors | 131,530 | 8.29% | |||||||||||
Community | 98,217 | 6.19% | |||||||||||
Academia | 84,895 | 5.35% | |||||||||||
Salaries | 65,598 | 4.14% | |||||||||||
Location Rental | 52,644 | 3.32% | |||||||||||
Bus Rentals | 43,158 | 2.72% | |||||||||||
Breaks Monument videos | 41,000 | 2.59% | |||||||||||
Amenity | 38,788 | 2.45% | |||||||||||
Upper Portage Camp | 34,694 | 2.19% | |||||||||||
Float Trips | 22,172 | 1.40% | |||||||||||
Ticket Seller Fee | 16,691 | 1.05% | |||||||||||
Re-enactments | 8,635 | 0.54% | |||||||||||
Total Expenses | $1,585,760 | 100.00% | |||||||||||
Profit (loss) | $(518,293) | -32.68% |
4 comments:
You said: "The question I ask our city leaders to answer is whether or not they believe that was a reasonable expectation for a rural community like Great Falls."
I think a more realistic question is whether anyone even did a break-even analysis before the event??!!?? In other words, did they have any idea how many visitors they would need in order to break even? If not, I submit that is gross negligence.
Greg;
I really hope that you are wrong here. I expect that our government leaders are reasonable enough people to not have expended public money without first doing their due diligence.
C'mon, this is easy math. If you spend $1.5 Million and get $780 Thousand in grants, you should have some plan somewhere that foresaw making up the difference ...
Isn't it also fair to say that the loss number is pretty charitable? In fact, the taxpayer will end up footing the bill of about $1,000,000.00 for the event. We could have just given the 40,000 visitors $25.00 cash each!
Also, shouldn't any work papers whereby the city was computing a break-even analysis be public record? I'd like to see their due diligence, wouldn't you?
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