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Home My WebLink About2020 Liquor Proposed Detail BudgetCity of Columbia Heights Table of Contents Liquor 2020 Proposed Detail Budget Liquor Operating Summary Page 1 Liquor Store #1 Proposed Expense and Narrative 2 Detail Expense 3 Summary of Costs 5 Liquor Store #2 Proposed Expense and Narrative 7 Detail Expense 8 Summary of Costs 10 Liquor Store #3 Proposed Expense and Narrative 12 Detail Expense 13 Summary of Costs 15 Liquor Non -Operating Summary Page 17 Proposed Expense and Narrative 18 Detail Expense 19 Summary of Costs 20 Reviewer's Notes Blank Pages 21 City of Columbia Heights, Minnesota BUDGET 2020 Revenue 30999 Taxes 31999 Licenses & Permits 32999 Intergovernmental 33999 Charge for Services 34999 Fines & Forfeits 35999 Miscellaneous 36999 Sales and Related Charges 39199 Transfers & Non Rev Receipts Total Revenue Expenses 0999 Personal Services 1999 Supplies, including cost of goods 2999 Other Services and Charges 4999 Capital Outlay 6999 Contingencies & Transfers Total Expenses Change to Fund Balance Proprietary Fund Information Capital Asset Purchases Liquor Store #1 Store #2 Store #3 609 609 609 8,945 7,098 3,401 4,120,500 3,291,000 1,356,000 4,129,445 3,298,098 1,359,401 576,500 475,400 160,000 3,071,300 2,479,200 1,018,700 295,700 237,200 64,200 3,943,500 3,191,800 1,242,900 18 5, 94 5 106,298 116,501 1 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 DEPARTMENT: LIQUOR STORE #1 609 LIQUOR 49791 LIQUOR STORE #1 Actual Expense 2017 Actual Expense 2018 Adopted Budget 2019 Department Proposed 2020 City Manager Proposed 202 Council Adopted 1 2020 Line Item Description 0999 Personal Services 488,396 540,513 551,400 576,500 576,500 1999 Supplies 2,951,515 3,040,752 3,035,100 3,071,300 3,071,300 2999 Other Services & Charges 270,324 272,764 283,600 295,700 295,700 4999 Capital Outlay - - - 6999 Contingencies & Transfers - - - - TOTALS: LIQUOR STORE #1 3,710,236 3,854,029 3,870,100 3,943,500 3,943,500 Activity Description Under MN statute, the primary purpose of municipal liquor stores is to control the distribution of alcohol . Municipal liquor stores can also generate income for the community, reducing the amount of property taxes otherwise required for city operations. The income opportunities are limited however, by significant market competition within the metro area. Additionally, when the current Top Valu I facility was constructed in 2007-2008 at 4950 Central Avenue NE, the City Council chose to construct the building to very strict design guidelines, so that this store will be a leading example for other businesses in the community for many years. Our city's three -store municipal liquor operation is the 6th largest by gross sales in Minnesota. It has provided funds for city infrastructure, equipment, and mitigation of the negative effects of alcohol in the community through activities such as D.A.R.E. Obiectives Carrying on from 2019, the liquor operation will continue to develop the product offerings and sales strategies that allows the stores to stay current with the rapidly changing Twin Cities metro market. A shift in advertising concepts will also support the growth of the stores. In 2020 advertising will be pulled from redundant local papers and shift to media that will target a new customer base. New strategies include; increased Social Media presence, industry specific publications and apps and zip code focused mailings. Branded uniforms will also be introduced to all staff in 2020 to provide a consistent, cohesive look for the operation. This will help our employees stand out to customers, provide a sense of unity and improve the brand image and customer service of the operation. 2020 will bring a migration of inventory and processes to a new point -of -sale system, as our current system will no longer be support by Microsoft. The upgrade will allow us to continue our achievements in inventory management, purchasing and historical sales data which allow the operation to continue to be financially sound. Budget Comments on Proposed Budget Within the Supplies category, the cost of goods sold for the liquor operation is budgeted each year to reflect the most recent sales projections available. Apart from the cost of goods sold, the proposed increase in 2020 operating expenses for all three stores combined is $54,400 or 3% over the 2019 budget. $26,500 of this increase (for all three stores combined) is in personnel, primarily for cost -of -living increases in labor agreements. We note that personnel was over -budgeted for store 3 in 2019 and under -budgeted by an equal amount for stores 1 & 2 in 2019, relative to where the staffing actually occurs. For this reason, the 2020 budget for store 3 shows a decrease in personnel from the 2019 budget. We also note that the average budgeted increase in personnel for all stores combined over the combined period of 2019 and 2020 is 3.3% per year, which closely follows the labor agreements for those years. The proposed 2020 increase in non -personnel costs is $27,900 (for all three stores combined). The largest components of this are $9,200 to sealcoat all three parking lots, an increase in credit card fees of $6,500 to match actual sales , $3,200 more in advertising to remain competitive, and a $2,800 premium increase for property and liability insurance. 2 City of Columbia Heights, Minnesota 2020 Budget Worksheet 609 49791 1 LIQUOR LIQUOR STORE #1 Actual Expense 2017 Actual Expense 2018 Adopted Budget 2019 Department Proposed 2020 City Manages Proposed 2020 Council Adopted 1 2020 Line Item Description PERSONAL SERVICES 1000 ACCRUED SALARIES 1010 REGULAR EMPLOYEES 1011 PART-TIME EMPLOYEES 1012 SEASONAL EMPLOYEES 1013 PART-TIME OTHER 1020 OVERTIME -REGULAR 1021 OVERTIME -PART-TIME 1030 VACATION & SICK 1031 HOLIDAY PAY 1050 SEVERANCE PAY 1070 INTERDEPARTMENTAL LABOR SERV 1080 INTERDEPARTMENTAL LABOR CR 1210 P.E.R.A. CONTRIBUTION 1220 F.I.C.A. CONTRIBUTION 1225 FLEX BENEFIT FICA 1300 INSURANCE 1400 UNEMPLOYMENT COMPENSATION 1510 WORKERS COMP INSURANCE PREM 1700 ALLOCATED FRINGE 1800 INTERDEPARTMENTAL FRINGE CR 1810 COLA ALLOWANCE 0999 TOTALS: PERSONAL SERVICES SUPPLIES 2000 OFFICE SUPPLIES 2010 MINOR EQUIPMENT 2011 COMPUTER EQUIPMENT 2020 COMPUTER SUPPLIES 2030 PRINTING & PRINTED FORMS 2160 MAINT. & CONSTRUCT MATERIALS 2171 GENERAL SUPPLIES 2175 FOOD SUPPLIES 2199 DELIVERY 2280 VEHICLE REPAIR AND PARTS 2282 GAS, OIL, LUBRICANTS 2510 COST OF GOODS SOLD - LIQUOR 2520 COST OF GOODS SOLD - BEER 2530 COST OF GOODS SOLD - WINE 2550 COST OF GOODS SOLD - MISC TAX 2553 COST OF GOODS SOLD - CIGARETTES 2559 COST OF GOODS SOLD - LOTTERY 2590 COST OF GOODS SOLD - MISC NTAX 2600 REFUNDS & LOSS ON DEPOSITS 1999 TOTALS: SUPPLIES 224,308 238,508 238,400 259,100 128,364 13 3, 219 140,400 140,700 20,517 25,264 23,700 30,000 - 181 - - -26,449 367 - - 4,349 4,149 4,800 5,100 15,032 2,610 28,141 29,963 30,400 32,500 28,954 30,728 31,200 33,300 47,989 52,779 47,700 58,400 -182 4,671 - - 17, 373 18,073 17,900 17,400 16,900 - 488,396 540,513 551,400 576,500 323 602 500 600 1,139 293 1,200 1,200 2,728 3,811 4,000 4,000 573 739 800 900 59 9,348 248 18,659 606 133 1,102,960 1,269,513 388,769 41,720 27,512 70,342 16,886 2,951,515 9,400 118 20,979 248 63 1,121,077 1,323,643 383,705 42,271 30,026 86,227 17,551 3,040,752 10,000 10,000 200 200 20,000 21,000 300 300 100 100 1,129,000 1,130,000 1,312,000 1,350,000 399,000 399,000 42,000 41,000 28,000 27,000 71,000 69,000 17,000 17,000 3,035,100 3,071,300 259,100 140,700 30,000 5,100 32,500 33,300 58,400 17,400 576,500 600 1,200 4,000 900 10,000 200 21,000 300 100 1,130,000 1,350,000 399,000 41,000 27,000 69,000 17,000 3,071,300 9 City of Columbia Heights, Minnesota 2020 Budget Worksheet 609 49791 LIQUOR LIQUOR STORE #1 Actual Expense 2017 Actual Expense 2018 Adopted Budget 2019 Department Proposed 1 2020 City Manage Proposed 1 2020 Council Adopted 2020 Line Item Description OTHER SERVICES & CHARGES 3050 EXPERT & PROFESSIONAL SERV. 3105 TRAINING & EDUC ACTIVITIES 3210 TELEPHONE & TELEGRAPH 3211 CELL PHONES 3220 POSTAGE 3250 OTHER COMMUNICATIONS 3310 LOCAL TRAVEL EXPENSE 3320 OUT OF TOWN TRAVEL EXPENSE 3420 ADVERTISING ENTERPRISES 3430 ADVERTISING OTHER 3600 PROP & LIAB INSURANCE 3810 ELECTRIC 3820 WATER 3830 GAS 3850 SEWER 4000 REPAIR & MAINT. SERVICES 4010 BUILDING MAINT:LABOR & BURDEN 4020 BUILDING MAINTENANCE 4040 INFORMATION SYS:INTERNAL SVC 4050 GARAGE, LABOR BURD. 4080 VEHICLE REPAIR 4100 RENTS & LEASES 4300 MISC. CHARGES 4310 CREDIT CARD FEES 4330 SUBSCRIPTION, MEMBERSHIP 4390 TAXES & LICENSES 4395 STATE SALES TAX 4910 BUILDING DEPRECIATION 4930 EQUIPMENT DEPRECIATION 2999 TOTALS: OTHER SERVICES & CHARGE CAPITAL OUTLAY 5180 OTHER EQUIPMENT 4999 TOTALS: CAPITAL OUTLAY 6999 TOTAL OTHJER FINANCING USES TOTALS: LIQUOR STORE #1 2,085 3,424 2,400 2,500 2,500 175 735 800 800 800 2,234 2,579 2,300 2,400 2,400 35 - 400 300 300 57 - - - 2,595 2,568 2,700 3,000 3,000 810 873 800 800 800 - - 100 100 100 13,638 14,900 15,000 16,600 16,600 11 18,510 17,800 17,900 19,200 19,200 27,833 25,774 29,000 27,100 27,100 1,532 1,267 1,700 1,500 1,500 6,081 5,489 5,000 5,800 5,800 980 1,017 1,000 1,100 1,100 1,997 2,689 4,000 4,800 4,800 6,400 8,400 11,000 11,000 11,000 21,961 22,197 23,000 27,000 27,000 22,000 22,000 25,300 26,600 26,600 911 757 600 600 600 193 157 300 200 200 55,753 59,178 57,000 60,000 60,000 2,020 2,020 2,000 2,000 2,000 312 263 300 300 300 65,909 64,554 66,000 66,000 66,000 16,303 14,111 15,000 16,000 16,000 270,324 272,764 283,600 295,700 295,700 3,710,236 3,854,029 3,870,100 3,943,500 3,943,500 4 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 FUND NUMBER 609.49791 SUMMARY OF COST FACTORS FOR THE COMING YEAR Explanation of Personnel LIQUOR STORE #1 BUDGET 2019 Adopted 2020 Proposed Total Total F.T.E. Total Total Comp Total Total Comp Position Title 2019 2020 Salaries Fringe & Fringe Salaries Fringe & Fringe Liquor Operations Manager 0.47 0.47 46,924 15,330 62,254 49,792 16,489 66,281 Asst. Store Managers 2.00 2.00 121,324 45,124 166,448 128,712 48,234 176,946 Store Supervisors 1.47 1.47 62,683 21,874 84,557 77,536 27,821 105,357 Retail Clerk 5.27 5.07 176,395 44,816 221,211 178,860 49,056 227,916 COLA Allowance 12,675 4,225 16,900 - - - Rounding -1 31 30 Subtotal 9.21 9.01 420,000 131,400 551,400 434,900 141,600 576,500 Total 9.21 9.01 420,000 131,400 551,400 434,900 141,600 576,500 Supplies Object Code Misc. Office Supplies 600 2000 Minor Equipment calculators, display fixtures, carts, shelving, etc. 1200 2010 Computer hardware/software video cameras, percons, gift card software, other 4000 2011 Computer Supplies thermal register paper, cables, misc. 900 2020 General Supplies bags, light bulbs, signs, paper towels, bleach etc. 10,000 2171 Food Supplies 200 2175 Vehicle Parts van parts and repairs 300 2280 Gas, Oil and Lubricants 100 2282 Cost of Goods Sold & Delivery 3,054,000 2XXX 3,071,300 Other Services & Charees Expert & Professional Services Audit fee per prep manual 2,500 3050 Training & Educ. Activities 2@ MMBA conf+ Alcohol Svc. Training 800 3105 Telephone - per prep manual 2,400 3210 Cell Phone - LOM 300 3211 Other Communications Per prep manual rounded est 3,000 3250 Local Travel Expense - mileage 800 3310 Out of Town Travel Expense - mileage 100 3320 Advertising Expense City Pages, Sun Focus, etc. 16,600 3220 Property & Liability Insurance 19,200 3600 Liquor Summary of Costs Continued on Next Page 5 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 FUND NUMBER 609.49791 Liquor Summary of Costs Continued Electric - per trend Water - per trend Gas - per trend Sewer - per trend Repair & Maintenance Services Copier @ Konica rate RMS license /RITE Cloud Retailer SaaS RITE/CardefenderSaaS RITE/general suppt LED Sign & Misc. equip maint Building Maintenance: Int Svcs - per prep manual Building Maintenance Fire alarm & extinguishers Intrusion alarm monitoring Window cleaning Pest control Electrical: ballasts, relamp, etc. Elevator agreement $140/mo. + parts Doors/security system maint Fertilizer, weed control, mulch Lawn sprinkler maint HVAC base agreement HVAC & Cooler repair not covered Rugs, towels, mops Carpet cleaning Sealcoat Other bldg., roof, & plumbing repairs Information Sys: Internal Svc - per prep manual Garage, Labor Burden - 1/3 van per store Misc. Credit Card Fees - per trend Subscription, Membership MMBA, MLBA, misc. Taxes & Licenses - elevator permit & misc. Depreciation per schedule 200 2,500 600 1,000 500 1,300 500 600 400 1,000 3,000 4,000 1,200 300 3,700 2,000 3,000 1,000 4,300 700 LIQUOR STORE #1 BUDGET Object Code 27,100 3810 1,500 3820 5,800 3830 1,100 3850 4,800 4000 11,000 4010 4020 27,000 4020 26,600 4040 600 4050 200 4300 60,000 4310 2,000 4330 300 4390 82,000 4910/4930 295,700 11 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 DEPARTMENT: LIQUOR STORE #2 609 49792 LIQUOR LIQUOR STORE #2 Actual Expense 2017 Actual Expense 2018 Adopted Budget 2019 Department City Manager Proposed Proposed 2020 2020 Council Adopted 2020 Line Item Description 0999 Personal Services 410,930 445,311 453,800 475,400 475,400 1999 Supplies 2,398,210 2,417,599 2,478,700 2,479,200 2,479,200 2999 Other Services & Charges 217,649 212,314 226,900 237,200 237,200 4999 Capital Outlay - - - - - 6999 Contingencies & Transfers - - - - - TOTALS: LIQUOR STORE #2 3,026,788 3,075,224 3,159,400 3,191,800 3,191,800 Activity Description Under MN statute, the primary purpose of municipal liquor stores is to control the distribution of alcohol . Municipal liquor stores can also generate income for the community, reducing the amount of property taxes otherwise required for city operations. The income opportunities are limited however, by significant market competition within the metro area. Additionally, when the current Top Valu I facility was constructed in 2007-2008 at 4950 Central Avenue NE, the City Council chose to construct the building to very strict design guidelines, so that this store will be a leading example for other businesses in the community for many years. Our city's three -store municipal liquor operation is the 6th largest by gross sales in Minnesota. It has provided funds for city infrastructure, equipment, and mitigation of the negative effects of alcohol in the community through activities such as D.A.R.E. Objectives Carrying on from 2019, the liquor operation will continue to develop the product offerings and sales strategies that allows the stores to stay current with the rapidly changing Twin Cities metro market. A shift in advertising concepts will also support the growth of the stores. In 2020 advertising will be pulled from redundant local papers and shift to media that will target a new customer base. New strategies include; increased Social Media presence, industry specific publications and apps and zip code focused mailings. Branded uniforms will also be introduced to all staff in 2020 to provide a consistent, cohesive look for the operation. This will help our employees stand out to customers, provide a sense of unity and improve the brand image and customer service of the operation. 2020 will bring a migration of inventory and processes to a new point -of -sale system, as our current system will no longer be support by Microsoft. The upgrade will allow us to continue our achievements in inventory management, purchasing and historical sales data which allow the operation to continue to be financially sound. Budget Comments on Proposed Budget Within the Supplies category, the cost of goods sold for the liquor operation is budgeted each year to reflect the most recent sales projections available. Apart from the cost of goods sold, the proposed increase in 2020 operating expenses for all three stores combined is $54,400 or 3% over the 2019 budget. $26,500 of this increase (for all three stores combined) is in personnel, primarily for cost -of -living increases in labor agreements. We note that personnel was over -budgeted to store 3 in 2019 and under -budgeted by an equal amount to stores 1 & 2 in 2019, relative to where the staffing actually occurs. For this reason, the 2020 budget for store 3 shows a decrease in personnel from the 2019 budget. We also note that the average budgeted increase in personnel for all stores combined over the combined period of 2019 and 2020 is 3.3% per year, which closely follows the labor agreements for those years. The proposed 2020 increase in non -personnel costs is $27,900 (for all three stores combined) . The largest components of this are $9,200 to sealcoat all three parking lots, an increase in credit card fees of $6,500 to match actual sales , $3,200 more in advertising to remain competitive, and a $2,800 premium increase for property and liability insurance. City of Columbia Heights, Minnesota 2020 Budget Worksheet 609 49792 LIQUOR LIQUOR STORE #2 Actual Expense 2017 Actual Expense 2018 Adopted Budget 2019 Department Proposed 2020 City Manager Proposed 2020 Council Adopted 2020 Line Item Description PERSONAL SERVICES 1000 ACCRUED SALARIES - - - 1010 REGULAR EMPLOYEES 160,536 178,457 186,000 197,000 197,000 1011 PART-TIME EMPLOYEES 133,925 149,188 143,900 159,200 159,200 1013 PART-TIME OTHER 8,724 10,200 5,900 7,300 7,300 1020 OVERTIME -REGULAR 83 - - - - 1021 OVERTIME -PART-TIME - - 1030 VACATION & SICK 2,833 6,471 - - - 1031 HOLIDAY PAY 3,152 3,701 3,900 4,100 4,100 1050 SEVERANCE PAY 11,424 - - 1070 INTERDEPARTMENTAL LABOR SERV - 627 - - 1080 INTERDEPARTMENTAL LABOR CR - - 1210 P.E.R.A. CONTRIBUTION 22,908 25,595 25,400 27,500 27,500 1220 F.I.C.A. CONTRIBUTION 24,304 26,820 26,000 28,100 28,100 1225 FLEX BENEFIT FICA - - - - - 1300INSURANCE 28,754 28,670 34,000 37,500 37,500 1400 UNEMPLOYMENT COMPENSATION - - - - - 1510 WORKERS COMP INSURANCE PREM 14,286 15,582 14,900 14,700 14,700 1700 ALLOCATED FRINGE - - - - - 1800 INTERDEPARTMENTAL FRINGE CR - 1810 COLA ALLOWANCE - - 13,800 0999 TOTALS: PERSONAL SERVICES 410,930 445,311 453,800 475,400 475,400 SUPPLIES 2000 OFFICE SUPPLIES 166 128 200 200 200 2010 MINOR EQUIPMENT 704 1,000 700 700 2011 COMPUTER EQUIPMENT 6,789 2,011 4,000 3,000 3,000 2020 COMPUTER SUPPLIES 778 916 1,000 900 900 2160 MAINT. & CONSTRUCT MATERIALS 59 - - - 2171 GENERAL SUPPLIES 5,714 7,824 6,000 7,000 7,000 2175 FOOD SUPPLIES 180 135 200 200 200 2199 DELIVERY 14,339 16,235 15,000 16,500 16,500 2280 VEHICLE PARTS 232 187 300 200 200 2282 GAS, OIL, LUBRICANTS 19 63 - - 2510 COST OF GOODS SOLD - LIQUOR 779,401 809,148 802,000 805,000 805,000 2520 COST OF GOODS SOLD - BEER 1,116,183 1,104,482 1,166,000 1,156,000 1,156,000 2530 COST OF GOODS SOLD - WINE 328,208 320,714 335,000 336,000 336,000 2550 COST OF GOODS SOLD - MISC TAX 33,003 33,596 33,000 35,000 35,000 2553 COST OF GOODS SOLD - CIGARETTES 19,248 25,587 21,000 23,000 23,000 2559 COST OF GOODS SOLD - LOTTERY 81,721 83,012 82,000 83,000 83,000 2590 COST OF GOODS SOLD - MISC NTAX 11,467 13,560 12,000 12,500 12,500 2599 CASH DISCOUNT - - - - - 2600 REFUNDS & LOSS ON DEPOSITS - - - - - 1999 TOTALS: SUPPLIES 2,398,210 2,417,599 2,478,700 2,479,200 2,479,200 OTHER SERVICES & CHARGES 3050 EXPERT & PROFESSIONAL SERV. 1,812 3,210 2,400 2,500 2,500 City of Columbia Heights, Minnesota 2020 Budget Worksheet 609 49792 LIQUOR LIQUOR STORE #2 Actual Expense 2017 Actual Expense 1 2018 Adopted Budget 1 2019 Department Proposed 1 2020 City Manager Proposed 2020 Council Adopted 2020 Line Item Description 3105 TRAINING & EDUC ACTIVITIES 3210 TELEPHONE & TELEGRAPH 3211 CELL PHONES 3220 POSTAGE 3250 OTHER COMMUNICATIONS 3310 LOCAL TRAVEL EXPENSE 3320 OUT OF TOWN TRAVEL EXPENSE 3420 ADVERTISING ENTERPRISES 3600 PROP & LIAB INSURANCE 3810 ELECTRIC 3820 WATER 3830 GAS 3850 SEWER 4000 REPAIR & MAINT. SERVICES 4010 BUILDING MAINT:LABOR & BURDEN 4020 BUILDING MAINTENANCE 4040 INFORMATION SYS:INTERNAL SVC 4050 GARAGE, LABOR BURD. 4080 VEHICLE REPAIR 4100 RENTS & LEASES 4300 MISC. CHARGES 4310 CREDIT CARD FEES 4330 SUBSCRIPTION, MEMBERSHIP 4390 TAXES & LICENSES 4395 STATE SALES TAX 4910 BUILDING DEPRECIATION 4930 EQUIPMENT DEPRECIATION 2999 TOTALS: OTHER SERVICES & CHARGE! CAPITAL OUTLAY 5180 OTHER EQUIPMENT 4999 TOTALS: CAPITAL OUTLAY 6999 TOTAL OTHJER FINANCING USES TOTALS: LIQUOR STORE #2 140 1,328 2,273 954 12,910 14,372 18,446 1,614 4,857 962 1,504 5,300 21,674 18,000 210 153 46,161 2,020 40 50,571 12,348 217,649 1,577 2,214 72 13,448 14,000 19,559 3,098 4,410 1,001 1,478 7,200 11,734 18,000 460 133 47,938 2,020 141 49,216 11,404 212,314 600 1,500 400 2,400 1,000 100 14,000 14,000 20,000 1,800 4,000 1,000 3,000 9,700 18,000 20,700 100 200 1,600 2,600 600 100 15,000 15,100 20,500 2,000 4,600 1,100 3,500 9,700 21,000 21,800 500 200 200 47,000 49,000 2,000 2,000 - 100 51,000 51,000 12,000 12,500 226,900 237,200 200 1,600 2,600 600 100 15,000 15,100 20,500 2,000 4,600 1,100 3,500 9,700 21,000 21,800 500 200 49,000 2,000 100 51,000 12,500 237,200 3,026,788 3,075,224 3,159,400 3,191,800 3,191,800 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 FUND NUMBER 609.49792 SUMMARY OF COST FACTORS FOR THE COMING YEAR Explanation of Personnel LIQUOR STORE #2 BUDGET 2019 Adopted 2020 Proposed Total Total F.T.E. Total Total Comp Total Total Comp Position Title 2019 2020 Salaries Fringe & Fringe Salaries Fringe & Fringe Liquor Operations Manager 0.38 0.38 37,938 12,395 50,333 40,257 13,332 53,589 Asst. Store Managers 2.00 2.00 121,324 45,124 166,448 128,712 48,234 176,946 Store Supervisors 0.84 0.84 36,191 14,564 50,755 39,093 15,741 54,834 Retail Clerk 4.38 4.61 144,213 28,180 172,393 159,538 30,493 190,031 COLA Allowance 10,300 3,500 13,800 - Rounding 34 37 71 Subtotal 7.60 7.83 350,000 103,800 453,800 367,600 107,800 475,400 Total 7.60 7.83 350,000 103,900 453,800 367,600 107,800 475,400 Supplies Object Code Misc. Office Supplies 200 2000 Minor Equipment calculators, display fixtures, carts, shelving, etc. 700 2010 Computer hardware/software video cameras, percons, gift card software, other 3,000 2011 Computer Supplies thermal register paper, cables, mist. 900 2020 General Supplies bags, light bulbs, signs, paper towels, bleach etc. 7,000 2171 Food Supplies 200 2175 Vehicle Parts van parts and repairs 200 2280 Gas, Oil and Lubricants - 2282 Cost of Goods Sold & Delivery 2,467,000 2XXX 2,479,200 Other Services & Charges Expert & Professional Services Audit fee per prep manual 2,500 3050 Training & Educ. Activities 2@ MMBA conf + Alcohol Svc. Training 200 3105 Telephone - per prep manual 1,600 3210 Cell Phone -Scheduler - 3211 Other Communications Per prep manual rounded est 2,600 3250 Local Travel Expense - mileage 600 3310 Out of Town Travel Expense - mileage 100 3320 Advertising Expense City Pages, North Easter, Sun Focus, etc. 15,000 3220 Liquor Summary of Costs Continued on Next Page 10 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 FUND NUMBER 609.49792 Liquor Summary of Costs Continued Property & Liability Insurance Electric - per trend Water - per trend Gas - per trend Sewer - per trend Repair & Maintenance Services Copier @ Konica rate RMS license /RITE Cloud Retailer SaaS RITE/Cardefender SaaS RITE/general suppt LED Sign & Misc. equip maint Building Maintenance: Int Svcs - per prep manual Building Maintenance Fire alarm & extinguishers Intrusion alarm monitoring Window cleaning Pest control Electrical: ballasts, relamp, etc. Elevator agreement $140/mo. + parts Doors/security system maint Fertilizer, weed control, mulch Lawn sprinkler maint HVAC base agreement HVAC & Cooler repair not covered Rugs, towels, mops Carpet cleaning Sealcoat Other bldg., roof, & plumbing repairs Information Sys: Internal Svc - per prep manual Garage, Labor Burden - 1/3 van per store Misc. Credit Card Fees - per trend Subscription, Membership MMBA, MLBA, misc. Taxes & Licenses - elevator permit & misc. Depreciation per schedule 1,800 400 800 500 1,200 500 300 400 1,200 2,200 1,200 300 3,300 2,000 2,600 700 3,300 1.800 LIQUOR STORE #2 BUDGET Object Code 15,100 3600 20,500 3810 2,000 3820 4,600 3830 1,100 3850 3,500 4000 9,700 4010 21,000 4020 21,800 4040 500 4050 200 4300 49,000 4310 2,000 4330 100 4390 63,500 4910/4930 237,200 11 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 DEPARTMENT: LIQUOR STORE #3 609 49793 LIQUOR LIQUOR STORE #3 Actual Expense 2017 Actual Expense 2018 Adopted Budget 1 2019 Department Proposed 1 2020 City Manager Proposed 2020 Council Adopted 2020 Line Item Description 0999 Personal Services 143,285 150,279 180,200 160,000 160,000 1999 Supplies 974,973 1,021,799 1,008,400 1,018,700 1,018,700 2999 Other Services & Charges 48,744 55,288 57,900 64,200 64,200 4999 Capital Outlay - - - 6999 Contingencies & Transfers - - - - TOTALS: LIQUOR STORE #3 1,167,002 1,227,365 1,246,500 1,242,900 1,242,900 Activity Description Under MN statute, the primary purpose of municipal liquor stores is to control the distribution of alcohol . Municipal liquor stores can also generate income for the community, reducing the amount of property taxes otherwise required for city operations. The income opportunities are limited however, by significant market competition within the metro area. Additionally, when the current Top Valu I facility was constructed in 2007-2008 at 4950 Central Avenue NE, the City Council chose to construct the building to very strict design guidelines, so that this store will be a leading example for other businesses in the community for many years. Our city's three -store municipal liquor operation is the 6th largest by gross sales in Minnesota. It has provided funds for City infrastructure, equipment, and mitigation of the negative effects of alcohol in the community through activities such as D.A. R.E. Objectives Carrying on from 2019, the liquor operation will continue to develop the product offerings and sales strategies that allows the stores to stay current with the rapidly changing Twin Cities metro market. A shift in advertising concepts will also support the growth of the stores. In 2020 advertising will be pulled from redundant local papers and shift to media that will target a new customer base. New strategies include; increased Social Media presence, industry specific publications and apps and zip code focused mailings. Branded uniforms will also be introduced to all staff in 2020 to provide a consistent, cohesive look for the operation. This will help our employees stand out to customers, provide a sense of unity and improve the brand image and customer service of the operation. 2020 will bring a migration of inventory and processes to a new point -of -sale system, as our current system will no longer be support by Microsoft. The upgrade will allow us to continue our achievements in inventory management, purchasing and historical sales data which allow the operation to continue to be financially sound. Exterior and interior updates to improve the visual appeal of this store in 2019 and 2020 are planned as part of a larger project approved by the City Council in prior years. These updates include exterior trim, lighting, signage, flooring, paint, counters, and additional security cameras. Budget Comments on Proposed Budget Within the Supplies category, the cost of goods sold for the liquor operation is budgeted each year to reflect the most recent sales projections available. Apart from the cost of goods sold, the proposed increase in 2020 operating expenses for all three stores combined is $54,400 or 3% over the 2019 budget. $26,500 of this increase (for all three stores combined) is in personnel, primarily for cost -of -living increases in labor agreements. We note that personnel was over -budgeted to store 3 in 2019 and under -budgeted by an equal amount to stores 1 & 2 in 2019, relative to where the staffing actually occurs. For this reason, the 2020 budget for store 3 shows a decrease in personnel from the 2019 budget. We also note that the average budgeted increase in personnel for all stores combined over the combined period of 2019 and 2020 is 3.3% per year, which closely follows the labor agreements for those years. The proposed 2020 increase in non -personnel costs is $27,900 (for all three stores combined) . The largest components of this are $9,200 to sealcoat all three parking lots, an increase in credit card fees of $6,500 to match actual sales , $3,200 more in advertising to remain competitive, and a $2,800 premium increase for property and liability insurance. liVA City of Columbia Heights, Minnesota 2020 Budget Worksheet 609 LIQUOR 49793 LIQUOR STORE #3 Actual Expense 2017 Actual Expense 2018 Adopted Budget 2019 Department Proposed 2020 City Manager Proposed 2020 Council Adopted 2020 Line Item Description 1 PERSONAL SERVICES 1000 ACCRUED SALARIES - 1010 REGULAR EMPLOYEES 26,225 27,806 31,700 24,600 24,600 1011 PART-TIME EMPLOYEES 61,274 67,003 66,700 70,300 70,300 1013 PART-TIME OTHER 24,856 26,751 41,500 34,900 34,900 1020 OVERTIME -REGULAR - - - - - 1021 OVERTIME -PART-TIME 1030 VACATION & SICK - - 1031 HOLIDAY PAY 88 221 700 600 600 1050 SEVERANCE PAY 3,608 - - 1070 INTERDEPARTMENTAL LABOR SERV - 53 1080 INTERDEPARTMENTAL LABOR CR - - - - - 1210 P.E.R.A. CONTRIBUTION 8,429 9,138 10,500 9,800 9,800 1220 F.I.C.A. CONTRIBUTION 8,638 9,252 10,800 10,000 10,000 1225 FLEX BENEFIT FICA - - - - - 1300INSURANCE 5,088 4,668 6,300 4,600 4,600 1400 UNEMPLOYMENT COMPENSATION - - - - - 1510 WORKERS COMP INSURANCE PREM 5,080 5,387 6,200 5,200 5,200 1700 ALLOCATED FRINGE 1800 INTERDEPARTMENTAL FRINGE CR - 1810 COLA ALLOWANCE - - 5,800 0999 TOTALS: PERSONAL SERVICES 143,285 150,279 180,200 160,000 160,000 SUPPLIES 2000 OFFICE SUPPLIES 24 56 - 100 100 2010 MINOR EQUIPMENT 175 - 300 300 300 2011 COMPUTER EQUIPMENT 1,280 989 2,000 1,200 1,200 2020 COMPUTER SUPPLIES 281 422 400 400 400 2030 PRINTING & PRINTED FORMS - 80 - - - 2171 GENERAL SUPPLIES 3,542 3,555 3,300 3,600 3,600 2175 FOOD SUPPLIES 56 53 100 100 100 2199 DELIVERY 4,689 5,498 6,000 6,600 6,600 2280 VEHICLE PARTS 232 173 300 200 200 2282 GAS, OIL, LUBRICANTS 19 63 - - - 2510 COST OF GOODS SOLD - LIQUOR 397,113 425,588 411,000 415,000 415,000 2520 COST OF GOODS SOLD - BEER 408,847 398,033 422,000 420,000 420,000 2530 COST OF GOODS SOLD - WINE 41,115 44,142 43,000 42,500 42,500 2550 COST OF GOODS SOLD - MISC TAX 16,572 20,596 17,000 18,500 18,500 2553 COST OF GOODS SOLD - CIGARETTES 21,315 25,628 22,000 23,500 23,500 2559 COST OF GOODS SOLD - LOTTERY 74,038 90,796 75,000 80,000 80,000 2590 COST OF GOODS SOLD - MISC NTAX 5,675 6,129 6,000 6,700 6,700 2600 REFUNDS & LOSS ON DEPOSITS - - - - 1999 TOTALS: SUPPLIES 974,973 1,021,799 1,008,400 1,018,700 1,018,700 OTHER SERVICES & CHARGES 3050 EXPERT & PROFESSIONAL SERV- 1,812 2,996 2,400 2,500 2,500 3105 TRAINING & EDUC ACTIVITIES 35 - 200 200 200 13 City of Columbia Heights, Minnesota 2020 Budget Worksheet 609 49793 LIQUOR LIQUOR STORE #3 Actual Expense 2017 Actual Expense 2018 Adopted Budget 2019 Department Proposed 2020 City Managerl Proposed 2020 Council Adopted 2020 Line Item Description 3210 TELEPHONE & TELEGRAPH 3211 CELL PHONES 3220 POSTAGE 3250 OTHER COMMUNICATIONS 3310 LOCAL TRAVEL EXPENSE 3320 OUT OF TOWN TRAVEL EXPENSE 3420 ADVERTISING ENTERPRISES 3600 PROP & LIAB INSURANCE 3810 ELECTRIC 3820 WATER 3830 GAS 3850 SEWER 4000 REPAIR & MAINT. SERVICES 4010 BUILDING MAINT:LABOR & BURDEN 4020 BUILDING MAINTENANCE 4040 INFORMATION SYS:INTERNAL SVC 4050 GARAGE, LABOR BURD. 4080 VEHICLE REPAIR 4100 RENTS & LEASES 4300 MISC. CHARGES 4310 CREDIT CARD FEES 4330 SUBSCRIPTION, MEMBERSHIP 4390 TAXES & LICENSES 4395 STATE SALES TAX 4910 BUILDING DEPRECIATION 4930 EQUIPMENT DEPRECIATION 2999 TOTALS: OTHER SERVICES & CHARGE! CAPITAL OUTLAY 5180 OTHER EQUIPMENT 4999 TOTALS: CAPITAL OUTLAY 6999 TOTAL OTHJER FINANCING USES TOTALS: LIQUOR STORE #3 59 136 100 200 200 2,142 2,095 2,200 2,500 2,500 74 72 100 100 100 38 - 3,000 3,500 3,500 5,052 5,000 4,800 5,200 5,200 6,991 6,049 7,000 6,400 6,400 323 361 400 400 400 1,247 1,159 800 1,200 1,200 392 422 500 500 500 942 952 1,400 2,400 2,400 2,100 3,600 4,100 4,100 4,100 4,836 8,167 7,000 9,000 9,000 5,000 5,000 5,700 6,000 6,000 210 388 100 500 500 13,862 15,268 14,500 16,000 16,000 2,020 2,020 2,000 2,000 2,000 40 35 - - 1,569 1,569 1,600 1,500 1,500 48,744 55,288 57,900 64,200 64,200 1,167,002 1,227,365 1,246,500 1,242,900 1,242,900 14 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 FUND NUMBER 609.49793 SUMMARY OF COST FACTORS FOR THE COMING YEAR Fx0anation of Personnel LIQUOR STORE #3 BUDGET 2019 Adopted 2020 Proposed Total Total F.T.E. Total Total Comp Total Total Comp Position Title 2019 2020 Salaries Fringe & Fringe Salaries Fringe & Fringe Liquor Operations Manager 0.15 0.15 14,976 4,892 19,868 15,891 5,263 21,154 Asst. Store Managers - - - - - - - - Store Supervisors 1.40 1.40 58,825 15,760 74,585 44,045 10,796 54,841 Retail Clerks 2.03 2.04 66,831 13,058 79,889 70,464 13,541 84,005 COLA Allowance - - 4,350 1,450 5,800 - - - Rounding - - 18 40 58 - - - Subtotal 3.58 3.59 145,000 35,200 180,200 130,400 29,600 160,000 3.58 3.59 145,000 35,200 180,200 130,400 29,600 160,000 Su lies Object Code Misc. Office Supplies 100 2000 Minor Equipment calculators, display fixtures, carts, shelving, etc. 300 2010 Computer hardware/software percons, gift card software, other 1,200 2011 Computer Supplies thermal register paper, cables, misc. 400 2020 General Supplies bags, light bulbs, signs, paper towels, bleach etc. 3,600 2171 Food Supplies 100 2175 Vehicle Parts van parts and repairs 200 2280 Gas, Oil and Lubricants - 2282 Cost of Goods Sold & Delivery 1,012,800 2XXX 1,018,700 ❑ther Services & Charees Expert & Professional Services Audit fee per prep manual 2,500 3050 Training & Educ. Activities 2@ MMBA conf. + Alcohol Svc. Training 200 3105 Telephone - per prep manual 200 3210 Cell Phone - 3211 Other Communications Per prep manual rounded est 2,500 3250 Local Travel Expense - mileage 100 3310 Out of Town Travel Expense - mileage/hotel - 3320 Advertising Expense City Pages, North Easter, Sun Focus, etc. 3,500 3220 Property & Liability Insurance 5,200 3600 Liquor Summary of Costs Continued on Next Page 15 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 FUND NUMBER 609.49793 Liquor Summary of Costs Continued Electric - per trend Water - per trend Gas - per trend Sewer - per trend Repair & Maintenance Services Copier @ Konica rate RMS license /RITE Cloud Retailer SaaS RITE/CardefenderSaaS RITE/general suppt LED Sign & Misc. equip maint Building Maintenance: Int Svcs - per prep manual Building Maintenance Fire: alarm, monitoring & svcs Intrusion alarm monitoring Window cleaning Pest control Electrical: ballasts, relamp, etc. Elevator svc agreement + parts Doors/security system maint Fertilizer, weed control, mulch Lawn sprinkler maint HVAC base agreement HVAC & Cooler repair not covered Rugs, towels, mops Carpet cleaning Sealcoat Other bldg., roof, & plumbing repairs Information Sys: Internal Svc - per prep manual Garage, Labor Burden - 1/3 van per store Misc. Credit Card Fees - per trend Subscription, Membership MMBA, MLBA, misc. Taxes & Licenses - elevator permit & misc. Depreciation per schedule 1,000 300 600 300 500 100 400 500 1,000 1,200 1,300 1,200 1,500 1,000 LIQUOR STORE #3 BUDGET 6,400 3810 400 3820 1,200 3830 500 3850 Object Code 2,400 4000 4,100 4010 9,000 4020 6,000 4040 500 4050 - 4300 16,000 4310 2,000 4330 4390 1,500 4910/4930 64,200 iR City of Columbia Heights, Minnesota BUDGET 2020 Liquor Non -Operating Non -Operating 609 Revenue 30999 Taxes 31999 Licenses & Permits 32999 Intergovernmental 33999 Charge for Services 34999 Fines & Forfeits - 35999 Miscellaneous 556 36999 Sales and Related Charges - 39199 Transfers & Non Rev Receipts - Total Revenue 556 Expenses 0999 Personal Services 1999 Supplies, including cost of goods 2999 Other Services and Charges 4999 Capital Outlay 6999 Contingencies & Transfers Total Expenses 23,000 469,900 492,900 Change to Fund Balance-492,344 Proprietary Fund Information Capital Asset Purchases 17 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 DEPARTMENT: LIQUOR NON -OPERATING 609 49794 LIQUOR LIQUOR NON -OPERATING Actual Expense 2017 Actual Expense 2018 Adopted Budget 2019 Department Proposed 2020 City Manager Proposed 2020 Council Adopted 2020 Line Item Description 0999 Personal Services - 1999 Supplies 2999 Other Services & Charges 4999 Capital Outlay - - 23,000 23,000 6999 Contingencies & Transfers 549,200 414,944 449,400 469,900 469,900 TOTALS: LIQUOR NON -OPERATING 549,200 414,944 449,400 492,900 492,900 Activity Description To improve the analysis of results at each of the three stores, activity that is not a function of store operations is accounted for separately in the non -operating department 49794. These non -operating activities routinely include acquisition of equipment over $5,000; construction of building or parking lot improvements; debt service; and transfers to other city funds. Objectives Fund the replacement of the point -of -sale system used to record all sales and inventory transactions at the three stores. The current system is Microsoft -based and Microsoft will cease supporting it in 2020. It was originally installed in 2008. Continue funding the Infrastructure Fund 430 at $50,000 per year, as in prior years. This supports the key element of strong infrastructure stated in the City Council's 2017 goal -setting report. Continue funding D.A.R.E. and other police community programs within the General Fund at $10,000 per year, as in prior years. This supports the key element of safe community stated in the City Council's 2017 goal -setting report. Budget Comments on Proposed Budget The budget for this department is $43,500 or 10% higher for 2020 than for 2019. $23,000 of this increase is for the replacement of the point -of -sale system mentioned above. This a relatively small amount for the first -year cost of a new system, including replacement of 9 cashier terminals, because staff expects the replacement system price will be structured as an on -going monthly subscription. This contrasts with the old system which was structured as a single large upfront purchase with occasional hourly labor charges for maintenance. $15,000 of this increase reflects increased annual principal payments on bonds that financed store construction. These payments were intentionally structured in this manner during the 2017 refinancing of this debt, in order to keep interest costs lower over the term of the financing. 18 City of Columbia Heights, Minnesota 2020 Budget Worksheet 609 49794 LIQUOR LIQUOR NON -OPERATING Actual Expense 2017 Actual Expense 2018 Adopted Budget 1 2019 Department Proposed 2020 City Manager Proposed 2020 Council Adopted 2020 Line Item Description OTHER SERVICES & CHARGES 3050 EXPERT & PROFESSIONAL SERV. 4020 BUILDING MAINTENANCE 4040 INFORMATION SYSJNTERNAL SVC 4330 SUBSCRIPTION, MEMBERSHIP 4390 TAXES & LICENSES 2999 TOTALS: OTHER SERVICES & CHARGE! CAPITAL OUTLAY 5120 BUILDING 5180 EQUIPMENT 4999 TOTALS: CAPITAL OUTLAY OTHER FINANCING USES 7100 OPER. TRANSFER OUT - LABOR 7160 TRANSFER OUT TO BONDS 7210 TRANSFER OUT TO GENERAL FUND 7310 TRANSFER OUT TO DARE 7330 TRANSFER OUT TO INFRASTRUCTURE 7370 TRANSFER OUT TO INFO SYSTEMS 8100 CONTINGENCIES 6999 TOTALS: OTHER FINANCING USES TOTALS: LIQUOR NON -OPERATING 101,200 389,000 9,000 50,000 549,200 549,200 86,944 268,000 10,000 50,000 414,944 414,944 85,400 304,000 10,000 50,000 449,400 449,400 23,000 23,000 23,000 23,000 90,900 90,900 319,000 319,000 10,000 10,000 50,000 50,000 469,900 469,900 492,900 492,900 19 CITY OF COLUMBIA HEIGHTS, MINNESOTA BUDGET 2020 FUND NUMBER Liquor Operating LIQUOR NON -OPERATING BUDGET 609.49794 SUMMARY OF COST FACTORS FOR THE COMING YEAR Explanation of Personnel 2019 Adopted 2020 Proposed F.T.E. Position Title 2019 2020 Total Total Total Comp Salaries Fringe & Fringe Total Total Total Comp Salaries Fringe & Fringe None - - Subtotal - - None Total - - Nonpersonnel Expenses Description Amount Object code CAPITAL EQUIPMENT AND IMPROVEMENTS LINE # DESCRIPTION PROPOSED COSTS TOTAL PROPOSED COSTS EXPENSED PROPOSED COSTS DEPRECIATED 5180 Cost to install new point -of -sale system $ 12,000 $ 12,000 $ 5180 Cost to replace 9 point -of -sale terminals with Windows 10 $ 11,000 $ 11,000 SUBTOTAL: $ 23,000 $ TRANSFERS AND CONTINGENCIES Transfer to Debt Service - per prep manual: Principal $ 260,000 Interest 57,800 Paying agent fees 1,200 7160 $ 319,000 $ 319,000 $ 7100 Transfer to General Fund - admin labor per prep manual 90,900 90,900 Transfer to General Fund - operating support for DARE 7210 and other related Police Community programs 10,000 10,000 7330 Transfer to Infrastructure Fund - per infrastructure plan 50,000 50,000 SUBTOTAL: $ 469,900 $ 469,900 $ 20 Reviewer's Notes 21 Reviewer's Notes 22