Fort Worden PDA Finance & Audit Committee June 18, 2020 - - PowerPoint PPT Presentation

Fort Worden PDA

Finance & Audit Committee June 18, 2020

Reopening Budget Scenarios & Cash Flow Considerations

Budget Scenarios Overview: Cash Position

• 150,000
• 100,000
• 50,000

50,000 100,000 150,000 200,000 250,000 300,000 July Aug Sept Oct Nov Dec Jan Feb Mar

Cash Position by Month

Reopen August 2020 Reopen April 2021

Reservations on the Books

Month Group Leisure Standard Leisure NR Third Party Total Leisure Total Aug $3,730 $106,856 $124,306 $923 $232,085 $235,815 Sept $21,236 $32,347 $87,327 $112 $119,786 $141,022 Oct $12,172 $7,773 $32,167 $408 $90,348 $102,520 Nov $27,218 $7,222 $19,034 $0 $46,256 $73,474 Dec $17,840 $7,101 $6,325 $0 $28,426 $46,266 2020 $82,196 $161,299 $269,159 $1,443 $516,901 $599,097 Jan $2,998 $1,749 $5,848 $0 $7,597 $10,595 Feb $99,786 $0 $0 $0 $0 $99,786 Mar $9,000 $598 $6,408 $0 $7,006 $16,006 Q1 2021 $111,784 $2,347 $12,256 $0 $14,603 $126,387

Budget Scenario 1: Fort Worden Services Open Aug 2020

General Assumptions

• Phase 3 reopening for Jeffco likely to occur in late June/early July; campgrounds reopen
• Recovery Plan and FEMA funds provide financial support for PPE expenses for reopening
• Makers Square construction stays on schedule
• LCP grant reimbursements occur in late July; provides cash flow for reopening

Budget Scenario 1 Opens August 2020: Advantages & Risks

• Strong accommodation revenues forecasted for August through Nov (net $309,000)
• Opening Taps and Canteen restaurants will be a value-add for community members, people

staying overnight at Fort Worden, which will most likely result in sustainable operation during the time the restaurants are open.

• Brings back and retains staff at least until the end of November or December.
• Builds community support and public confidence that PDA will survive crisis
• Enables the PDA’s ability to provide more service support to Partner businesses (minimally,

F&B, security, maintenance)

Advantages

Budget Scenario 1 Opens August 2020: Advantages & Risks

• A COVID spike could result in cancelled reservations
• Inability to accommodate groups that are 50 persons or less and adhering to the Governor’s

group gatherings restriction may result in reputational risks and future lost opportunities.

• Inability to accommodate groups that are 50 persons or more will result in additional

cancellations for the larger groups.

• Opening Taps will yield low revenue margins.

Risks

Budget Scenario 1 Opens August 2020: Advantages & Risks

• A COVID case at the Fort could shut down affected/contaminated unit(s) for 3 weeks
• Restaurant requirements for contract tracing can result in the PDA’s limited ability to

adequately trace a a person that is carrying the virus.

• Costs to operate under COVID may be greater than anticipated
• Potential for emergency or compliance repair is a risk given the nature of the buildings and

may affect financial sustainability for a limited reopening. (e.g., HVAC, Fire Alarms)

Risks

Budget Scenario 1: Fort Worden Services Open Aug 2020

Revenues Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Accommodations 266,387 430,050 395,000 1,091,437 Catering: Food & Alcohol Sales 105,953 105,953 Restaurant: Canteen 62,000 62,000 Restaurant: Taps 75,117 63,000 21,000 159,117 Restaurant: Reveille 65,492 65,492 Total Food & Alcohol Sales 246,562 125,000 21,000 392,562 Leases 29,400 29,400 29,400 29,400 117,600 Other Revenue 70,768 33,000 16,302 16,950 137,020 PPE Reimbursement Grant 107,639 107,639 Grants/Donations 27,000 90,400 9,840 127,240 Total Revenues 640,117 152,800 718,231 462,350 1,973,498 2020

Budget Scenario 1: Fort Worden Services Open Aug 2020

Expenses Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Cost of Goods 86,813 39,390 6,930 133,133 Personnel Salaries & Wages Pre Covid Staffing 665,866 665,866 Post Covid Skeleton Crew 135,486 79,650 79,650 294,786 Post Covid Reopening Crew 140,050 113,850 253,900 Total Personnel 665,866 135,486 219,700 193,500 1,214,552 Benefits & Payroll Costs 155,721 129,852 43,460 37,059 366,092 Repairs & Maintenance 10,950 21,000 20,500 52,450 Utilities 131,225 57,000 54,000 54,000 296,225 Contracts 54,690 46,500 46,500 46,500.00 194,190 General Operating Expenses 126,451 23,262 44,100 47,250 241,063 PPE/Sanitization Supplies 4,549 900 105,530 7,090 118,069 Total Expense 1,236,265 393,000 573,680 412,829 2,615,774 Net Revenues

• 596,148
• 240,200

144,551 49,521

• 642,276

2020

Budget Scenario 1: Fort Worden Services Open Aug 2020 Lodging/Accommodations July 2020 –March 2021

Assumptions

There is potential for increased leisure travelers due to pent-up demand from I-5 corridor. Fort Worden’s lodging facilities, location and space for outdoor activities makes it a very desirable spot to come and stay. There will be increased demand in reservations once Fort Worden starts taking reservations again. January-March 2021 is very difficult to predict, so this budget presents estimated low bookings. The Cottage Collection, NCO Row, Officers Row, Bricks and the Lofts will be reserved at no more than 50%. Dorms will be off line. Given the ADR is over $500 for Aug and that the occupancy for all collections presented in this budget is only 20% for August, the room for increased sales is strong.

Budget Scenario 1: Fort Worden Services Open Aug 2020 Lodging/Accommodations July – December 2020

Assumptions

Overall operating costs are planned to be lower than if the Commons and Front Desk were

• pen and despite increased cleaning requirements. Examples of a few are:
• Leisure travelers will check in on the porch of the Sales office in house 15.
• Cleaning a unit will wait one day before housekeeping enters, providing a wait period that

reduces extra-ordinary efforts for cleaning. The PDA is also purchasing ultra-violet ray cleaning equipment that will reduce the labor time and provide better sanitization.

• Dishes and other kitchenware will be reduced to a minimum. At check-out all kitchen the

wares will be removed and sterilized through our commercial dishwashers. The dishwasher labor cost is included in the restaurant budget.

Budget Scenario 1: Fort Worden Services Open Aug 2020 Lodging/Accommodations 2020

Revenues Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Accommodations 266,387 430,050 395,000 1,091,437 Other Revenue 12,119 16,302 16,950 45,371 Total Revenues 278,506 446,352 411,950 1,136,808 Expenses Personnel Salaries & Wages Pre Covid Staffing 123,211 123,211 Post Covid Skeleton Crew 37,486 28,980 28,980 95,446 Post Covid Reopening Crew 47,320 67,020 114,340 Total Personnel 123,211 37,486 76,300 96,000 332,997 Benefits & Payroll Costs 33,381 17,286 22,434 22,434 95,535 Repairs & Maintenance 10,000 12,500 22,500 Utilities 131,225 57,000 54,000 54,000 296,225 Contracts

• General Operating Expenses

22,600 5,800 19,600 24,000 72,000 PPE/Sanitization Supplies

• Total Expense

310,417 117,572 182,334 208,934 819,257 Net Revenues

• 31,911
• 117,572

264,018 203,016 317,551

Budget Scenario 1: Fort Worden Services Open Aug 2020 Restaurants July 2020 – December 2020

Assumptions Taps

There will be a limited menu Open hours will be determined by sales and activity. Initially, it is budgeted to be open Thurs through Monday from 12 to 9. Outdoor seating only until there is indication that there is a high likelihood there will not be a Covid-19

• utbreak.

There will be two main sections each served by a server and one bus person during busy periods. During slow periods the server will manage serving and busing. There will be one bartender working a shift. Kitchen will need one prep and one main chef. The patio will be reconfigured to have a total of 13 tables and able to seat a total of 42 people. (Patio Layout on next slide.)

Budget Scenario 1: Fort Worden Services Open Aug 2020 Restaurants July 2020 – December 2020

Assumptions Canteen

The menu will be the same as last year. It will only open if camping is open. Open 7 days a week from 12 to 6. There will not be any indoor service or seating. There is a remodel cost to moving the POS and services to a spot that accommodates orders that take place outside the building. There will not be any retail sales. There will be one cashier/runner, a main cook and a prep cook Monday-Thurs. Friday- Sunday there is a second part-time runner that assists in standard peak hours.

Budget Scenario 1: Fort Worden Services Open Aug 2020 Restaurants July 2020 – December 2020

TAPS Jul 20 Aug 20 Sept 20 Oct 20 Nov 20 Dec 20 Total Revenues Food Sales Alcohol Sales (50% of 2019 Sales) 16,000 12,000 9,000 37,000 Food Sales (50% of 2019 Sales) 20,000 15,000 12,000 47,000 Total Revenues 36,000 27,000 21,000 84,000 Expenses Cost of Goods (33%) 11,880 8,910 6,930 27,720 Personnel Salaries & Wages (50% of Revenues) Reopening Crew 1,600 17,100 13,500 10,500 42,700 Benefits & Payroll Costs 240 2,565 2,025 1,575 6,405 Repairs & Maintenance 500 500 500 500 2,000 Utilities 0.00 Contracts 0.00 General Operating Expenses 250 750 750 750 2,500.00 Total Expense 2,590 32,795 25,685 20,255 81,325 Net Revenues

• 2,590

3,205 1,315 745 2,675

Budget Scenario 1: Fort Worden Services Open Aug 2020 Restaurants July 2020 – December 2020

CANTEEN Jul 20 Aug 20 Sept 20 Oct 20 Nov 20 Dec 20 Total Revenues Food Sales 32,000 30,000 62,000 Total Revenues 32,000 30,000 62,000 Expenses Cost of Goods 9,600 9,000 18,600 Personnel Salaries & Wages Reopening Crew 900 11,650 11,650 24,200 Benefits & Payroll Costs 117 1,515 1,515 3,146 Repairs & Maintenance 1,000 500 500 2,000 Utilities 0.00 Contracts 0.00 General Operating Expenses 250 750 750 1,750 Total Expense 2,267 24,015 23,415 49,696 Net Revenues

• 2,267

7,986 6,586 12,304

Budget Scenario 2: Fort Worden Services Open April 2021

General Assumptions

• Skelton crew remains at PDA on part-time basis until April 2021 with little staff turnover
• Makers Square is completed by end of October 2020
• Historic Tax Credits are secured by end of year to fund sustain skeleton crew and April

reopening

Budget Scenario 2 Opens April 2021: Advantages & Risks

• Less risk to not reopen and need to close due to COVID threats
• Staff can focus on mobilization funding for reopening in April and seek funding to for repairs

and permanent building improvements during closure.

• Staff, board and partners have more bandwidth to work on new business model for a “new

normal”

Advantages

Budget Scenario 2 Opens April 2021: Advantages & Risks

• No summer revenues other than leases; cash flow comes to a halt
• It will be more difficult to secure a credit line without revenues
• FEMA Emergency Covid Funds may no longer be available to cover PPE/sanitizing supply costs
• More leisure and group cancellations and refunds; increase financial insolvency risk
• Likely loss of key staff due to later reopening
• Will require payout of employee vacation benefits
• Recruiting new staff in 2021 may be more difficult
• Potential loss of public confidence and increase in uncertainty about Fort’s future
• Glamping construction restarts in 2021and may not be completed for April reopening

Risks

Budget Scenario 2: Fort Worden Services Open April 2021

Initial Draft Presented at Special Board Meeting June 12, 2020

2021 Revenues Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Quarter 1 Accomodations 266,387 266,387 Food Sales 246,563 246,563 Leases 29,400 29,400 58,800 29,400 Other Revenue 70,768 33,000 29,400 29,400 162,568 Grants/Donations 27,000 90,400 117,400 Total Revenues 640,118 152,800 29,400 29,400 851,718 29,400 Expenses Cost of Goods 86,813 Personnel Salaries & Wages 665,861 124,500 79,550 79,500 949,411 79,500 Benefits & Payroll Costs 155,721 140,000 22,500 22,500 340,721 22,500 Repairs & Maintenance 10,950 7,500 7,500 25,950 7,500 Utilities 131,225 57,000 54,000 54,000 296,225 54,000 Contracts 54,690 46,500 46,500 46,500 194,190 46,500 General Operating Expenses 131,000 25,000 22,500 22,500 201,000 22,500 Total Expense 1,236,260 393,000 232,550 232,500 2,094,310 232,500 Net Revenes

• 596,142
• 240,200
• 203,150
• 203,100 -1,242,592
• 203,100

2020

Cash Flow Considerations

Limited Reopen Aug 2020 Full Reopen April 2021 Additional Cash Flow Required to Carry through to April 2021 $400,000 (100,000 in 2020 and 300,000 in 2021) $700,000 (400,000 in 2020 and $300,000 in 2021) Advance Deposit Short Term Liability as of 6/15/2020: Total: $226,802 2020 Event Balance: $36,275 2021-22 Event Balance: $190,527 Compensated Absences (Vacation Payout) Short Term Liability as of 6/15/20: Total estimate: $97,000 $35,000 $62,000

Makers Square

An estimate of at least $1 million will become available at the end of Makers Square project 1.5 million was funded by a revenue bond. In July we expect to be in a positive cash position of over $500,000 due to reimbursable grants

New Credit Line

The credit line will need to be based

• n secured contracts or clear revenue

streams.

Potential Sources of Cash Flow

A new source of funds will need to be secured in early July to continue in either reopen budget scenarios.

Committee Discussion