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LIQUOR COMMITTEE MEETING August 21, 2017 A regular meeting of the City of Jackson Liquor Committee was held on August 21, 2017 at 6:00 P.M. in the City Council Chambers of City Hall with the following persons in attendance: Liquor Committee members Dave Cushman, Brandon Finck and Matt Madden, City Administrator Jennifer Bromeland, Liquor Store Manager Michelle Bratrud and Recording Secretary Dave Maschoff. (A quorum of the Liquor Committee was present.) REVIEW OF THE JULY LIQUOR STORE FINANCIALS Liquor Store Manager Michelle Bratrud reported on the monthly analysis of the liquor store for the month of July, 2017. First of all, Bratrud outlined events in the community that may have had an effect on business at the liquor store during the month. She noted the Highway 71 Bridge replacement and road construction was underway during July of last year. During July of this year, Bratrud pointed out AGCO had a layoff from July 10" through July 14th and she was also told traffic for the Jackson County Fair was down. Bratrud reported the guest count in July of 2017 was 5,099 compared to 5,432 in July of 2016, a decrease of 333. She said invoices for July totaled $55,211.07 compared to $74,039.38 in July of 2016, a decrease of $18,828.31. Bratrud said total sales for July, 2017 were $121,648.76 compared to the same month last year of $126,726.64, a decrease of $5,077.88. She noted of that amount, there was a $3,000 decrease during the week of this year’s Jackson County Fair compared to the year before. Bratrud reported gross profits were up $8,158.60 for July of this year compared to July of 2016. Bratrud said the average sale per customer was $23.86 compared to $23.33 in July of last year, an increase of 0.53 cents. Bratrud reported there were 25 days of business during July, the same as July of 2016. Bratrud said year to date sales so far at the liquor store total $717,557.29 compared to year to date sales by the end of July in 2016 of $742,325.61, which is a decrease of $28,540.39. Finck asked Bratrud if the net profit dollar amount for the year to date for the liquor store could also be added on future monthly financial reports. LIQUOR STORE MANAGER’S REPORT/COMMENTS Bratrud reported things have been going well at the liquor store. Bratrud noted an article in the Minnesota Municipal Beverage Association newsletter regarding the success of Sunday liquor sales, She said the article noted that a majority of municipal liquor stores did very well the first couple of weekends in July that Sunday sales were allowed. She said liquor stores had a brisk business on the first Sunday on July 2" just prior to the Fourth of July holiday. However since that time, Bratrud said municipal liquor stores are reporting Sunday sales tapering off. She said the article stated the Sunday opening just spread out the six days of liquor sales over seven days. Bratrud said the article stated it will probably take a year before the results of having Sunday liquor sales can be determined. Bratrud shared some ideas with the Liquor Committee to promote the municipal liquor store. She pointed out one idea would be to have the liquor store more involved in the community since it’s a City business. For example, Bratrud said the Liquor Store could hold a fundraiser for the Splashpad by hosting a wine tasting event at the American Legion. She said people could pay a fee to participate in the wine tasting. Bratrud said after paying for the American Legion rental fee and cost for the meat and cheese platters, all proceeds beyond that could then be donated towards the Splashpad project. She said the vendors supply the wine for the tasting event so there would be no cost to the liquor store. Bratrud also mentioned offering a ten percent discount for a customer on their birthday when they show their Jackson Chamber of Commerce Perks Card. She said it’s something that could be tried for a year. Cushman said it would be a good idea to give it a try. He asked Bratrud if she’s noticed an increase in business on race nights due to the promotion with the tickets at the Jackson Motorplex. Bratrud said there has been an increase in business on race nights. She explained there is a ten percent discount coupon to use at the Jackson Liquor Store printed on the back of the race tickets sold at the Jackson Motorplex. Bratrud said race nights are very busy nights at the liquor store. 2 Madden said the new campground at the Motorplex should also benefit the liquor store since the campers will stay at the campground in Jackson, Bratrud said the liquor store is very busy on race days in Jackson Bromeland noted it would be a good to continue the promotion with the Jackson Motorplex race tickets and pursue the Perks Card ten percent discount promotion for a liquor store customer's birthday. She said keeping the Jackson Liquor Store’s name out in front of the public will help promote the store and give customers another reason to stop in. Another idea Bratrud noted would be to promote how the funds raised at the municipal liquor store are reinvested back into community. She said that could be done through the liquor store’s ads. Bratrud said some people may be unaware that the liquor store is municipally owned and that the profits earned stay in the community. Cushman said they were all good ideas to promote the liquor store. REVIEW AND DISCUSS CONCEPT OF NEW STORE AND NEXT STEPS Committee members discussed the current financial information for the liquor store and reviewed how much funding is currently in the liquor fund. Bromeland reported at the end of July 2017, there was a balance of $446,996.75 in the City’s liquor fund. Finck shared a potential financial formula to construct a new liquor store and what the debt service may be. He also mentioned about what the payments would be through bonding or borrowing based on keeping the cost of a new store at $1.2 million. Finck said his opinion is that construction of a new store would be feasible. Committee members also discussed how many more customers would be needed to patronize the store to increase sales and funding for construction of a new store. In calculating financial numbers based on how many more people would need to patronize the liquor store, Finck said there would need to be about 4,000 more people during a year, or about 83 customers per month based on average sales. Finck said he anticipates additional customer traffic may improve with the liquor store located near the Interstate and industrial park. Finck said he believes declines will be seen at the liquor store five years from now if the City continues to operate the store in its current location unless the City would buy the building and change the store. Finck said that’s the way he looks at it from running a business. Madden agreed with Finck. He asked what the next step would be in evaluating the project for a new store. Finck said the next step would be to meet with the City’s financial consultant, Shannon Sweeney to review the financial numbers. He noted to begin construction in the spring; the City needs to be moving forward. Finck said if plans aren’t in place by December in order to seek bids, the City is going to miss. the contractor's cycle and the opportunity to efficiently bid the project. He said if the project is bid during the contractor's second bidding cycle, it will be bid differently. Finck noted from a cost savings standpoint to get your best bid it’s kind of in a critical stage, or you wait another year to do the project. Bromeland said a special Liquor Committee meeting could be scheduled with Sweeney to solidify things and keep the process moving. Cushman said the Liquor Committee should keep talking about construction of a new liquor store and moving forward otherwise other things come up and time will get away and another year will go by. Finck said the Liquor Committee has to make some decisions on what is the future for the liquor store whether it’s relocating it to a new building or different building or what that is. He said we as a Committee have to really decide because otherwise we're just in limbo. Finck said we're not running a business. He said the City is running it day to day, but we're not long-term looking at this as a business. Cushman said there needs to be a plan. He noted other buildings that had been looked at in the past but the remodeling costs were astronomical. Bromeland said she would contact Shannon Sweeney and will keep the process moving forward. With no further business, the meeting was adjourned. David A. Maschoff, Reco! fa