Expo Center Still Aiming for 2014 Target to be Self-Sustaining

In Wednesday's budget workshop that was largely punctuated by repeated reminders of flat or depleting revenue and increasing expenditures, it was the Expo Center report that provided a glimmer of optimism that the entity is very capable of becoming self-sustaining by 2014.

In fact, things are already looking brighter.

Expo Center Manager Kristen Damazio told City Council that with two months left in the year, it has already surpassed projected revenues for the whole year and that projected year-end expenses are expected to be about 8 percent less than budgeted -- totaling about $44,000 not spent.

Of course, the Center will still net a loss this year -- about $126,000 -- but that represents 40 percent less than the $340,000 loss in 2010, she said.

In 2012, the Center is already set with at least two new city-run events for St. Patrick's Day and a Brew and BBQ, and a host of returning events like Creationfest, the Highland Games and the King Count Fair (run by an outside party) are helping to keep revenue projections into 2014 high.

In fact, about $487,000 in event bookings have already been made for 2012, she said. That's roughly what the Center took in in total revenues for all of 2010.

For 2013 and 2014, Damazio said she calculated for a 10 percent increase each year in revenue based on current bookings and a three percent increase in expenditures. That comes to the following projections:

• 2013: Revenues = $715,055; Expenses = $755,104
• 2014: Revenues = $786,560; Expenses = $777,757

Councilman Mike Ennis, council's Expo Center committee chair, commended Damazio for working to reduce the subsidy to the Expo Center by 40 percent this year and assuming an additional 40 percent reduction next year. To get to that, he cautioned, it's assumed that revenue would grow by 10 percent. The revenue change between 2010 and 2011 was flat -- in fact there was a slight decrease from $487,440 to $484,520 -- so 2012 will be a pivotal year to see if the current plan is working, he said.

Part of the continued reductions in expenses was eliminating unprofitable events, said Damazio, including the Spring Fair and giving management of the King County Fair to an outside agency, . Staff also moved out of the Expo Center offices and those who remained made efforts to save on utilities by shutting off lights and heat when not in use.

Some highlights in revenue generation from 2011 include:

• Short-term rentals were up $95,000 in 2011 over 2010
• Oktoberfest generated about $10,000 this year after the Center got a sports and entertainment license (to serve alcohol); in 2010, the Center only netted $2,000
• New marketing efforts to the Hispanic community as well as online wedding websites and RV groups have brought in additional short-term rentals

The Center's overall operating expenses decreased from $828,000 in 2010 to $610,000 but it couldn't avoid an increase in interfund services, which jumped from $104,000 last year to nearly $115,000 this year. 

Damazio explained that the interfund services represents expenses that any agency in the city pays into different pots of money to cover costs for things such as finance, a city attorney, vehicles and insurance. 

For 2012, Damazio indicated there were about $73,000 needed in capital improvements including exterior painting, the purchase of a new go-cart for maintenance and Field House repairs and maintenance.

Next year, the Center also foresees $122,000 in additional expenses to cover staffing changes, new events and the purchase of alcohol and associated paraphernalia for resale (now that there is a sports and entertainment license), she said. However, the Center stands to net back between $40,000 to $50,000 in revenue for these expenses.

Outside of city funding, the Expo Center also retains about $705,000 in funding from King County -- left from a $2 million fund given to the city in 2007 when it took over the center in which $1 million each was designated explicitly for operating and capital expenses, Damazio said.

And Everything Else

Green River Community College Small Business Assistance Center (SBAC) sent to the city in an email Wednesday a request for $4,000, City Administrator Mike Thomas reported, though the city hasn't spoken with officials there yet. .

Councilman Jeff Beckwith provided more information after contacting the SBAC locally and asking why they hadn't submitted a funding request for 2012, he said. They told him they thought their efforts would not be successful this year but Beckwith said he corrected that perception and encouraged them to put in a request. Reading from an email he received from program director Deanna Burnett-Keener, the $4,000 would support four workshops along with business consulting -- it was not clear Wednesday if this meant there would be staff onsite in Enumclaw or by appointment only.

Various councilmembers encouraged representatives from Green River's SBAC to come to the next meeting to share more information.

$10,000 for Economic Development: The $10,000 budgeted this year for economic development under Community Development is indeed being spent this year, said director Erika Shook. The money would go towards tourism marketing -- a Request for Proposal (RFP) is prepared -- along with a website and advertising materials. Shook also said staff are looking into hiring an outside firm to help consult on what types of business the city might want to pursue to establish a presence in town. Councilman Glen Jensen, to be an active partner in this endeavor.

City Funds: 

Streets: Public Works Director Chris Searcy reported that funding has been depleted and so there are no capital projects budgeted for 2012. As potholes form, there is money in the operating budget to fill them, but large-scale street improvements don't have funding. The fund seeks to use $60,000 from the Real Estate Excise Tax (REET) funds to subsidize operations, which was only recently made legal due to a statute change on the part of the state Legislature, said Thomas. 

The statute "allows jurisdictions to use 35 percent of REET funds to cover operations and maintenance of capital facilities up to a certain dollar amount," he said.

The $60,000 figure was used, according to Finance Director Stephanie McKenzie, as it would help keep the fund from having a negative balance. 

Councilman Rich Elfers said he was upset that the city would again ignore a paid consultant's recommendation that the more time passes before the streets are taken care of, the costlier they'll be.

Water and Wastewater: Revenues were less than forecasted due to lack of growth, foreclosures and vacant businesses. The pressure is on existing customers possible through rate increases if new connections aren't built soon, Searcy said.

Natural Gas: Per discussion from Councilman Jim Hogan in , staff is working on a rate decrease of 5 percent passed onto customers thanks to some astute purchasing of natural gas into winter 2013. 

Solid Waste: Cardboard recycling has netted about $10,000 for the city but King County tranfer station fees are increasing and the cost is likely to be passed on to customers. Beckwith indicated he didn't think a rate increase was appropriate this year given that this fund could meet minimum reserve requirements but Searcy countered without a rate increase, it could mean a larger increase in the coming years and would the preference be small, incremental increases or a decrease followed by a large increase? 

Elfers asked about options to possibly outsource garbage, and Thomas indicated that there were discussions with King County Solid Waste about county facilities and starting next year they'll be talking about the future of garbage in the county, with an eye towards what it might mean for the city's own utility. "But we're not going to know that until we get into that conversation," he said.

Equipment Rental & Replacement: The purchase of several vehicles had been deferred in past years but a number of vehicles need replacing including two engineering vehicles, one dump truck, two water vehicles, a garbage truck and two patrol vehicles for police, said Searcy.

Facilities: The city will be using REET funds to replace the Stevenson-Yerxa building roof, said Searcy. Elfers asked why REET was funding roof replacement when Fund 180 is specific to building maintenance. Hogan offered that the use of REET is highly restrictive while Fund 180 can be changed at the will of council. Thomas added that REET funds are depleting as well.

Data Processing/Information Technology/Media Services: Information Services Manager Joe Nanavich reported on the consolidations and restructing of departments following the departure of former Media Services Manager this spring. He reviewed highlights from this year, including the police department Computer Aided Dispatch/Records Management System (CAD/RMS) and continuing work on that in 2012. 

The meeting was adjourned at 9:32 p.m. with remaining agenda items including the facilities fund, contingency fund, lodging tax fund, REET, cemetery fund, property mangement fund and debt service funds rolling over to next Wednesday's fourth budget workshop which begins at 7 p.m. at City Hall.