Silent Sports Center Pro Forma Business Plan. March 2013

Transcription

1 Silent Sports Center Pro Forma Business Plan March 2013

2 I. SILENT SPORTS CENTER BUSINESS PROPOSITION The Loppet Foundation (Foundation) and the Minneapolis Park & Recreation Board (Park Board) have worked together successfully for over ten years. In that time, the Foundation and the Park Board have created a high-level winter recreation area, with world class cross country ski facilities. The Foundation and the Park Board have brought events like the City of Lakes Loppet to Minneapolis and have leveraged assets like the Loppet to provide year-round outdoor recreational opportunities to the entire community, but especially to inner-city youth from North Minneapolis. Because the Foundation and the Park Board have a common mission - to provide year-round outdoor recreational opportunities to the Minneapolis area - with a special emphasis on North Minneapolis youth - the Foundation and the Park Board propose to enter a more formal partnership going forward. The purpose of the partnership would be to create a silent sports center that would enhance Theodore Wirth Park, provide better services and attract more people to the park, while at the same time saving Park Board funds. For purposes of this business plan the silent sports center project is assumed to be complete. 1 This business plan focuses on the Loppet Foundation s management of the silent sports center once complete. Management of the silent sports center includes: management of the welcome center building (silent sports lodge); management of the winter recreation area, including cross country ski trails throughout the Minneapolis Parks & Recreation system, and the snowboarding and tubing hills at Theodore Wirth Park; management of the mountain bike event trails surrounding the welcome center and extending to the area adjacent to Bassett Creek and north of the Wirth Chalet; For purposes of this business plan, the income areas are roughly grouped together. Because many of the expenses run across the entire plan, the expense areas are not necessarily grouped by any one area of the business. Note that this business plan does not include the Loppet Foundation s current non-profit business, but only the new income and expenses related to this venture specifically. 1 The Loppet Foundation is currently engaged in a fundraising campaign to raise the necessary funds for the silent sports center project. This business plan only becomes relevant if the necessary funds are raised and the silent sports center is built.

3 II. INCOME The Foundation-run Silent Sports Center will derive revenues from roughly three areas: 1) the welcome center building, 2) the winter recreation area, and 3) the mountain bike event trails. A. Management of the Welcome Center Building There are two basic income categories related directly to the Welcome Center - rent and pass or membership type fees. 1. Income - Rent In general, the Foundation has assumed very conservative rent numbers. Rent figures include rent for a bike and ski shop ($1,500/month), rent for a restaurant type facility ($1,000/month) and rent for office space for other non-profits with complementary missions ($1,000/month total). The Foundation also expects to charge rent for use of the Welcome Center training room for activities such as a yoga studio ($1,000/month). Finally, the Foundation expects to rent the space for periodic banquets and weddings. Conservatively estimating two weddings or banquets per month at $1000 rental the Foundation expects to generate some $24,000/year off of weddings and banquets. 2. Income - Welcome Center Passes and Memberships The concept here is to include showers and lockers facilities in the welcome center, similar to what might be found in a health club. The difference is in the exercise facilities. The welcome center might provide one small room for doing some push-ups and pull-ups and stretching, but would otherwise offer only the trails. Rather than providing exercise bikes, stairmaster machines, weight lifting apparatuses, etc., the Loppet Foundation would provide a gateway to the outdoors - the assumption being that the club member would check in, change clothes and proceed into the outdoors to go skiing, biking, running or hiking. A station or stations for checkin validation would be located on the trails themselves. The business plan assumes 300 annual memberships at $35/month and about ten day passes sold per day at $10 each. B. Winter Recreation Area The Foundation will derive revenue from three basic facets of the winter recreation area - cross country skiing, tubing and snowboarding. 1. Cross Country

4 Revenue from cross country skiing is mostly related to pass sales, but lesson fees and event permitting fees also come into the equation. a. Income - Cross Country Pass Sales The Park Board brings in revenues between $120,000 and $160,000 per year from the sale of cross country ski passes. The Foundation expects pass revenues to both increase and stabilize under Foundation management. Pass revenues should increase for a number of reasons: Marketing. Most people do not even know that a ski pass is required. The Foundation plans to post more signage to this effect. Special effort in this regard will be made in the Chain of Lakes area - where there is the biggest concentration of skiers but the least signage or enforcement. The Foundation will also be sending a postcard mailing to past passholders and to the relevant portion of the Foundation s mailing list. This simple technique should ensure significantly increased pass sales. Urgency. With snowmaking, people purchase early season skiing. The Park Board has typically not demonstrated the urgency necessary to attract passholders. The Park Board routinely opens cross country ski trails after places like Elm Creek Park Reserve. With a pond to optimize the snowmaking and a Foundation-driven maintenance crew the trails should open earlier in the year, which will have a significant effect on pass sales. Reliability. Grooming on Park Board trails has not been reliable. One day the trails are groomed, the next day they are not. Trails on the Chain of Lakes, Hiawatha Golf Course, Columbia Golf Course and Gross Golf Course are typically groomed only about once per week. The Foundation has a plan to groom more reliably and frequently but at less cost. Specifically, the Foundation plans to store grooming equipment at each location and have neighborhood volunteers do the grooming in these areas. This is the technique used at Woodland Hills in Elk River and at Battle Creek Park in St. Paul. Both systems routinely receive accolades for the excellent grooming. This approach will save on maintenance costs while at the same time making the trails more reliably groomed. This too will have a dramatic effect on pass sales. Currently there are about 3,000 season pass and about 4,500 daily passes sold each year. With better marketing, more early season snowmaking and more reliable grooming the Foundation expects season pass sales to increase dramatically. Conservatively, the Foundation expects to generate at least $180,000 in cross country pass sales per year. b. Income - Cross Country Lessons The Loppet Foundation already has a significant lesson presence in the Minneapolis area. Running the walk-up type lessons is just another small revenue stream. The Park Board has typically taken in about $5,000 in walk-up type lesson income and the Foundation expects to take in a similar amount. However, by running the walk-up lessons the Foundation expects to increase revenues for its Loppet Nordic Racing (LNR) through referrals to the longer-term LNR programming.

5 c. Income - Cross Country Event Permitting Because Wirth Park has snowmaking facilities and challenging terrain Wirth Park is a highly desirable place to run cross country events. As the manager of the winter recreation area the Foundation will need to permit the use of the trails in order to balance general passholder use with event use. The Foundation expects to permit some fifteen high school meets at about $800/meet as well as three to five citizen events at about $1000/event - for a total of at least $15,000 per season. 2. Income - Tubing The tubing hill for the Park Board has typically brought in around $70,000/year. The Foundation believes that this number will grow for three reasons. First, the engineering of the current tubing hill causes significant problems that delay the start of tubing by several weeks each year. Correcting this problem through moving the tubing hill to a new, better planned, location, combined with better snowmaking facilities and a different management structure will mean earlier and more reliable snow on the tubing hill. Second, the Foundation will be investing in the marketing of the tubing hill - investments that do not happen under Park Board management. Third, the tubing hill will move to a new and, hopefully, better location - closer to the welcome center building. Based on these changes, the Foundation conservatively estimates revenues of about $100,000 per year from the tubing hill. 3. Income - Snowboarding Snowboarding revenues have never been a substantial part of the winter recreation program income. The Foundation does not expect this to change. However, the Foundation does plan a few modifications to the current program. The current snowboarding hill is cupped in shape - which means that it is difficult for beginner-level users. Some grading of the snowboard hill will help make it more friendly to beginner-level snowboarders. With many implements (jumps, rails, etc.) that only experienced snowboarders can handle, the snowboard hill is currently geared toward the advanced riders, but the size and lack of variety of the hill make it better for beginner level snowboarders. The Foundation will market the hill to beginner-level snowboarders only, letting the advanced snowboarders go to more appropriate venues like Hyland Hills, Buck Hill or Afton Alps. With the new emphasis on beginners, combined with the attraction provided by the new chalet and the more convenient path from the new welcome center to the snowboard hill, the Foundation expects snowboard income to increase slightly, with most of the increase going to the bike and ski shop, which will handle the snowboard rentals. C. Mountain Bike Event Trails The Foundation believes that there is significant demand for event trails for mountain biking, cyclocross, and trail running type events. Examples of some of the demand segments include

6 the new high school mountain bike league, high school cross country running events, citizen mountain bike events, citizen trail running and citizen cyclocross events. The Foundation expects to permit at least four high school events at a fee of about $500/event, six citizen mountain bike events, four citizen trail running events and four citizen cyclocross events at about $500/event as well - for a total of at least $9,000 in trail permit fees.

7 III. EXPENSES There are six expense categories for the Silent Sports Center project: 1) management, 2) general maintenance, 3) welcome center costs, 4) costs specific to particular areas like cross country skiing, tubing, snowboarding and mountain bike/event trails, 5) marketing costs, and 6) Park Board fees. A. Management Costs The silent sports center, including the Welcome Center, will be managed by a single individual. The employment expense for this management position is expected to be in the $60,000 range. The Foundation s executive director is expected to spend about half his/her time on the silent sports center - equating to about $30,000/year. B. General Maintenance Costs Under this plan the Loppet Foundation takes over trail maintenance, snowmaking, trail grooming and similar operations. The primary maintenance costs include staffing, volunteer management, and equipment costs. 1. Maintenance Staffing and Volunteers The Loppet Foundation plans to take a hybrid approach to the maintenance staffing needs of the silent sports center. The staff would include one full-time foreman-level employee and seasonal employees augmented by volunteers. The foreman would coordinate and manage the seasonal employees and the volunteers. The seasonal employees would work primarily in late- November and December or until the snowmaking process is complete, with one or two staying on through early-march. The foreman and the seasonal employees would be augmented by volunteers, who would help with both snowmaking and grooming. The Foundation anticipates about $50,000 in employment expense for the maintenance foreman and another $16,000 in expenses for the seasonal employees. In order to ensure longterm volunteerism, the Foundation would spend an additional $10,000 per year on volunteer coordinating and volunteer perks like hats and jackets. 2. Maintenance Equipment Costs This Business Plan assumes that the Park Board continues to maintain its current fleet of equipment. The Loppet Foundation would augment that equipment with additional equipment (snowmobiles and grooming implements), mostly for use in volunteer grooming of outlying ski courses (Hiawatha, Gross, Columbia and the Chain of Lakes). The Foundation anticipates an initial investment of $10,000 and an ongoing cost of $7,000/year.

8 C. Welcome Center Expenses There are several elements to management of the welcome center building. Staffing costs, maintenance and utilities lead the way. 1. Staffing the Welcome Center. The Foundation anticipates several types of staffing for the Welcome Center - concierge/information, janitorial, management and staff related to the bike and ski shop and the coffee shop/restaurant. The business plan includes staffing for 360 days with 18 hours per day and two concierge/informational staff at $12/hour. These concierge/informational staff would also sell passes for skiing, tubing, par-3 golfing, etc. The plan anticipates spending $1500/month on janitorial services for the common areas of the Welcome Center. The bike and ski shop and the coffee shop/restaurant space would be responsible for their own employees and janitorial services. 2. Maintenance of the Welcome Center. Because the Welcome Center will be a new building, the Foundation anticipates that maintenance costs will be relatively low. The Foundation is anticipating maintenance costs of $12,000/year. 3. Welcome Center Utilities. Because the Welcome Center will be a LEED certified building, utility costs should be minimal. The Foundation expects utilities to run no more than $24,000/year. 4. Sinking Fund With the welcome center built as a green building and with high standards of construction, the roof and the mechanical system should not need replacement for up to 40 years. For that reason, setting aside $20,000/year for replacement should be more than adequate to cover the costs. The Foundation has allocated $20,000/year to a sinking fund for the building. D. Expenses Related to Specific Areas Certain expenses are attributable to particular areas - like cross country skiing, tubing, snowboading and mountain bike/event trails. 1. Expenses - Cross Country Ski Trails After maintenance costs, including snowmaking and grooming, have been covered, there are minimal extra expenses. Signage, instructor fees for lessons, trail preparation and costs for

9 volunteer trail ambassadors are some of the only other expenses. The total costs for cross country after snowmaking and grooming are less than $6,000/year. 2. Expenses - Tubing After snowmaking and grooming, the primary costs for tubing involve the cost of the attendants and the cost to purchase and maintain tubes. This business plan assumes that the Park Board conveys its stock of tubes to the Foundation and also assumes that the Park Board moves the tubing facility to its new and better location. The plan assumes that the tubing hill is open for nine weeks - three weekdays and two weekend days each week, for four hours each day during the week and for twelve hours each day on weekends. It assumes four attendants working at all times. With those assumptions, the tubing hill costs some $18,000+ per year to operate. 3. Expenses - Snowboarding Similar to the tubing hill, snowboard expenses after snowmaking and grooming are not significant - with the cost of attendants and instructors being the biggest expenses. The total cost to run the snowboarding hill is also just over $18,000 per year. 4. Expenses - Mountain Bike / Event Trails The mountain bike/event trails will be maintained primarily with volunteer labor. The maintenance foreman will lead this effort and coordinate with volunteers. Between volunteer expenses and trail maintenance supplies, event trail maintenance is expected to run some $8,000/year. E. Expenses - Insurance After getting an initial quote, insurance costs for the Silent Sports Center are expected to cost no more than $25,000/year. F. Expenses - Marketing To make this plan work the Foundation needs to engage in an extensive marketing effort. Particular areas that need marketing attention include the cross country ski passes, the health club aspect of the welcome center and the tubing hill. Marketing efforts will include appeals to past pass holders, to the Loppet Foundation s mailing list, to runners, skiers, bikers and mountain bikers and to the general public that lives in the area. The tubing hill also needs to be a marketing focus. Signage, brochures, flyers, mailings and coupons will all be part of the Foundation s marketing efforts. The Foundation expects to incur costs of just less than $17,000/year on marketing and sponsorship expenses. G. Park Board Fees

10 This Business Plan assumes that the Foundation would pay the Park Board an 8% fee on revenues from the Silent Sports Center. This 8% fee would cover fees collected by the Foundation incident to the running of the Silent Sports Center. For instance, the 8% fee would apply to trail pass fees for cross country skiing, snowboarding and tubing. It would apply to permit fees and welcome center use fees - e.g., for use of the locker room or use of the facility for a wedding or other event. It would not apply to fees collected by sub-lessors, like a bike and ski shop or a coffee shop or restaurant. Instead, the Park Board fee would apply to rent or concession fees paid to the Loppet Foundation by the sub-lessor. Based upon revenue projections, it is anticipated that the Foundation would pay the Park Board about $45,000/year.

11 IV. ANALYSIS: LEVERAGE AND ECONOMIES OF SCALE This business plan is independent of the Loppet Foundation s current business model. But in reality the current Loppet Foundation and the Winter Recreation Area management plan will complement each other on multiple fronts. For instance, the Loppet s youth programming efforts will now have a home in the welcome center. This will allow the Foundation to increase the quality of its youth programming and to serve more North Minneapolis youth. This plan has not directly analyzed the potential for economies of scale that a bigger organization can command. Suffice it to say that generally the Loppet Foundation currently operates in the black and the Silent Sports Center operation plan contained here also projects positive net revenue. To the extent that there is concern about what might happen if the Silent Sports Center business does not go as planned, there are two backstops to consider. The first is the cost savings that the Loppet Foundation can achieve by having a larger organization. An example might be the Loppet s Operations Director. The Operations Director currently spends significant time engaging in manual labor type tasks like hauling equipment around. Under this plan the Operations Director likely morphs into the manager of the Silent Sports Center generally, with other, lower-cost employees taking on the manual labor aspects of the job. The second backstop is the successful and diversified nature of the Loppet Foundation currently. Foundation revenues emanate from a variety of sources, including sponsorship, grants, event registration fees, programming fees, memberships and donations. While there is some chance that one or more of these sources of income will dry up, it is highly unlikely that the organization as a whole will go under.

12 V. NET REVENUE PLAN There may be some concern that the Loppet Foundation will make money off of public land... There are a few points that should be made here. First, the Park Board currently loses some $230,000/year on the winter recreation area. Under this plan, with a minimal initial investment and $10,000/year in expense the Park Board provides more and better services than it did at a loss of $230,000/year. Moreover, the whole reason that the parties are partnering on this project is that the parties missions are generally aligned. Both the Park Board and the Loppet Foundation want to see more people enjoying the outdoors throughout the year. To the extent that the Loppet Foundation has positive net revenues those revenues go back into satisfying the Foundation s mission - to promote and support the cross country skiing lifestyle in the Minneapolis area, especially among inner-city youth. While this mission does not necessarily equate exactly with what the Park Board would do with Silent Sports Center proceeds, this business plan saves the Park Board at least $220,000/year before the net revenues are even considered.

13 VIII. PARTNERS The Loppet Foundation prides itself on working with the community. Community partners include: Minneapolis Park & Recreation Board Minneapolis Public Schools Minneapolis Community Education Department Beacons afterschool programming Bolder Options Northstar Ski Touring Club Minneapolis Youth Ski League The Sisu Foundation Major Taylor Bicycling Club The Courage Center Skijor USA Minnesota Kubb Minnesota Orienteering Club The Pohlad Foundation UCare Minnesota The Medica Foundation The Huelsmann Family Foundation The Uptown Association Cedar Lake Park Association Nice Ride Minnesota Back Country Trail Patrol Association Minnesota Canoe Association Boys & Girls Clubs Oak Park Community Center Redeemer Center for Life Wilderness Inquiry Friends of Eloise Butler Wildflower Garden The Foundation also partners with scores of private businesses, usually in sponsor relationships. See the sponsor pages of the various Loppet events to learn more about the Foundation s private partners.

14 IX. PRO FORMA ACCOUNTING

15 May June July August Sept. Oct. Nov. Dec. Jan. Feb. March April Total Inco Cross Country Pass Fees 30, ,000 30,000 20, ,000 Cross Country Permit Fees 5,000 5,000 5,000 15,000 Cross Country Lesson Revenues 2,000 2,000 1,000 5,000 Cross Country Rentals ,050 Snowboarding 10,000 10,000 10,000 30,000 Snowboard lessons 2,000 2,000 1,000 5,000 Tubing 50,000 25,000 25, ,000 Concessions - coffee shop/restaur ,000 1, ,200 1, ,000 9,900 Concessions - bike and ski shop , ,500 1, ,000 8,100 Rent - bike and ski shop 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000 Rent - restaurant 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Rent - other non-profits 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 event trail permit fees 500 2,000 3,000 2,000 1,500 9,000 Welcome Center "member" fees 3,000 5,000 6,000 7,000 7,000 7,000 7,000 8,000 9,000 9,000 9,000 9,000 86,000 Welcome Center day pass fees 3,000 5,000 5,000 5,000 4,000 3,000 2,000 2,000 3,000 3,000 1,000 3,000 39,000 Welcome Center yoga studio rental 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Welcome Center rental fees (weddings, banquets, etc.) 500 3,000 3,000 2,000 4,000 3,000 1,000 1,000 2,000 2,000 1,000 1,500 24,000 Par-3 golf kiosk ,000 Total Income 12,600 21,300 24,000 22,500 22,800 19,300 46, ,050 95,350 82,650 17,000 20, ,050 Expenses Management Executive Director (based on % time 2,500 on silent sports 2,500center) 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 30,000 Accounting and Tax Filing 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000 Program Manager (based on 50% time) 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000 Winter Recreation Area Supervisor 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000 General Maintenance Maintenance staff 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 50,400 Volunteer Expenses 3,000 2,000 2,000 3,000 10,000 Equipment Equipment purchase - for grooming secondary 0 courses 10,000 10,000 Storage trailers rental ,000 Snowmobile depreciation and maintenance Welcome Center Staff 12,960 12,960 12,960 12,960 12,960 12,960 12,960 12,960 12,960 12,960 12,960 12, ,520 Utilities 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000 Maintenance 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Sinking Fund ,000 20,000 Janitorial 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000 Cross Country Signage 1,000 1,000 Ambassadors 1,000 1,000 Transaction fees for passes 0 Lesson fees ,499 Trail Preparation 3,500 3,500 Tubing Hill 0 tubing hill operators - 4,200 4,200 4,200 12,600 Tubes 3,000 3,000 Tube storage 1,000 1,000 1,000 3,000 Transaction fees for passes 0 Snowboard Hill 0 snowboard hill operators 3,500 3,500 3,500 10,500 snowboard hill instructors 2,000 2,000 1,000 5,000 Hill Preparation 1,000 1,000 Tow line and other maintenance 1,000 1,000 Event Trails 0 Volunteer costs 1, ,000 Maintenance ,000 5,000 Marketing costs 0 advertising ,000 brochures 2,000 2,000 4,000 signage 1,000 1,500 2,500 Direct mail to passholders 2,500 2,500 Insurance 12,500 12,500 25,000 Park Board fees Park Board fee 41,444 41,444 concessions fee to Park Board 3,840 3,840 0 Total Expense 49,410 33,910 33,910 36,910 33,910 49,410 60,910 46,943 47,943 43,943 32,910 98, ,303 PROFIT/LOSS -36,810-12,610-9,910-14,410-11,110-30,110-14, ,107 47,407 38,707-15,910-77,694 3,747 Cash Status - Year-to-Date -36,810-49,420-59,330-73,740-84, , ,870 11,237 58,644 97,351 81,441 3,747

16 Income Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Cross Country Pass ,000 20, ,000 Cross Country Perm ,000 5,000 15,000 Cross Country Lesso 0 0 4,000 1,000 5,000 Cross Country Renta ,050 Snowboarding ,000 10,000 30,000 Snowboard lessons 0 0 4,000 1,000 5,000 Tubing ,000 25, ,000 Concessions - coffee 5,500 3,500 2,700 2,300 14,000 Concessions - bike a 4,000 1,500 3,000 2,000 10,500 Rent - bike and ski s 4,500 4,500 4,500 4,500 18,000 Rent - restaurant 3,000 3,000 3,000 3,000 12,000 Rent - other non-pro 3,000 3,000 3,000 3,000 12,000 event trail permit fee 6,000 3, ,500 Welcome Center "m 27,000 27,000 27,000 27, ,000 Welcome Center day 6,500 6,000 3,500 3,500 19,500 Welcome Center yog 3,000 3,000 3,000 3,000 12,000 Welcome Center ren 10,000 9,000 4,000 4,500 27,500 Par-3 Golf kiosk 1,500 1,500 1,500 1,500 6,000 Total Income 74,000 65, , , ,050 Expenses Management Executive Director (based on 50% time on silent sports 7,500 center) 7,500 7,500 7,500 30,000 Accounting and Tax Filing 7,500 4,500 4,500 4,500 21,000 Program Manager (based on 50% time) 6,000 6,000 6,000 6,000 24,000 Winter Recreation Area Supervisor 15,000 15,000 15,000 15,000 60,000 General Maintenance Maintenance staff 12,600 12,600 12,600 12,600 50,400 Volunteer Expenses 0 3,000 7, ,000 Equipment Equipment purchase - for grooming secondary courses Storage trailers rental 0 0 2, ,000 Snowmobile depreciation and maintenance ,000 5,000 Welcome Center Staff 38,880 38,880 38,880 38, ,520 Utilities 6,000 6,000 6,000 6,000 24,000 Maintenance 3,000 3,000 3,000 3,000 12,000 Sinking Fund 5,000 5,000 5,000 5,000 20,000 Janitorial 4,500 4,500 4,500 4,500 18,000 Cross Country Signage 0 0 1, ,000 Ambassadors 0 0 1, ,000 Transaction fees for passes Lesson fees 0 0 1, ,499 Trail Preparation 0 3, ,500 Tubing Hill tubing hill operators ,400 4,200 12,600 Tubes 0 0 3, ,000 Tube storage 0 0 2,000 1,000 3,000 Transaction fees for passes Snowboard Hill snowboard hill operators 0 0 7,000 3,500 10,500 snowboard hill instructors 0 0 4,000 1,000 5,000 Hill Preparation 0 0 1, ,000 Tow line and other maintenance 0 0 1, ,000 Event Trails Volunteer costs 2,000 1, ,000 Maintenance 1,000 4, ,000 Marketing costs

17 Incom Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total advertising ,000 brochures 2, , ,000 signage 1, , ,500 Direct mail to passholders 0 0 1, ,500 Insurance 12, , ,000 Park Board fees Park Board fee 41,964 41,964 concessions fee to Park Board 4,360 4,360 Total Expenses 125, , , , ,343 PRO -51,230-49, ,104-50,437 15,707 Cash -51, ,960 66,144 15,707 Cash -47,483-97,213 69,891 19,454

18 Income Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Cross Country Pass ,000 20, ,000 Cross Country Perm ,000 5,000 15,000 Cross Country Lesso 0 0 4,000 1,000 5,000 Cross Country Renta ,050 Snowboarding ,000 10,000 30,000 Snowboard lessons 0 0 4,000 1,000 5,000 Tubing ,000 25, ,000 Concessions - coffee 5,500 3,500 2,700 2,300 14,000 Concessions - bike a 4,000 1,500 3,000 2,000 10,500 Rent - bike and ski s 4,500 4,500 4,500 4,500 18,000 Rent - restaurant 3,000 3,000 3,000 3,000 12,000 Rent - other non-pro 3,000 3,000 3,000 3,000 12,000 event trail permit fee 6,000 3, ,500 Welcome Center "m 27,000 27,000 27,000 27, ,000 Welcome Center day 6,500 6,000 3,500 3,500 19,500 Welcome Center yog 3,000 3,000 3,000 3,000 12,000 Welcome Center ren 10,000 9,000 4,000 4,500 27,500 Par-3 Golf kiosk 1,500 1,500 1,500 1,500 6,000 Total Income 74,000 65, , , ,050 Expenses Management Executive Director (based on 50% time on silent sports 7,500 center) 7,500 7,500 7,500 30,000 Accounting and Tax Filing 7,500 4,500 4,500 4,500 21,000 Program Manager (based on 50% time) 6,000 6,000 6,000 6,000 24,000 Winter Recreation Area Supervisor 15,000 15,000 15,000 15,000 60,000 General Maintenance Maintenance staff 12,600 12,600 12,600 12,600 50,400 Volunteer Expenses 0 3,000 7, ,000 Equipment Equipment purchase - for grooming secondary courses Storage trailers rental 0 0 2, ,000 Snowmobile depreciation and maintenance ,000 5,000 Welcome Center Staff 38,880 38,880 38,880 38, ,520 Utilities 6,000 6,000 6,000 6,000 24,000 Maintenance 3,000 3,000 3,000 3,000 12,000 Sinking Fund 5,000 5,000 5,000 5,000 20,000 Janitorial 4,500 4,500 4,500 4,500 18,000 Cross Country Signage 0 0 1, ,000 Ambassadors 0 0 1, ,000 Transaction fees for passes Lesson fees 0 0 1, ,499 Trail Preparation 0 3, ,500 Tubing Hill tubing hill operators ,400 4,200 12,600 Tubes 0 0 3, ,000 Tube storage 0 0 2,000 1,000 3,000 Transaction fees for passes Snowboard Hill snowboard hill operators 0 0 7,000 3,500 10,500 snowboard hill instructors 0 0 4,000 1,000 5,000 Hill Preparation 0 0 1, ,000 Tow line and other maintenance 0 0 1, ,000 Event Trails Volunteer costs 2,000 1, ,000 Maintenance 1,000 4, ,000 Marketing costs

19 Incom Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total advertising ,000 brochures 2, , ,000 signage 1, , ,500 Direct mail to passholders 0 0 1, ,500 Insurance 12, , ,000 Park Board fees Park Board fee 41,964 41,964 concessions fee to Park Board 4,360 4,360 Total Expenses 125, , , , ,343 PRO -51,230-49, ,104-50,437 15,707 Cash -51, ,960 66,144 15,707 Cash -31,776-81,506 85,598 35,161

20 Income Year 4 Year 5 Year 6 Cross Country Pas 180, , ,000 Cross Country Per 15,000 15,000 15,000 Cross Country Les 5,000 5,000 5,000 Cross Country Ren 1,050 1,050 1,050 Snowboarding 30,000 30,000 30,000 Snowboard lesson 5,000 5,000 5,000 Tubing 100, , ,000 Concessions - coff 14,000 14,000 14,000 Concessions - bike 10,500 10,500 10,500 Rent - bike and sk 18,000 18,000 18,000 Rent - restaurant 12,000 12,000 12,000 Rent - other non-p 12,000 12,000 12,000 event trail permit fe 9,500 9,500 9,500 Welcome Center " 108, , ,000 Welcome Center d 19,500 19,500 19,500 Welcome Center y 12,000 12,000 12,000 Welcome Center r 27,500 27,500 27,500 Par-3 Golf kiosk 6,000 6,000 6,000 Total Income 585, , ,050 Expen Management Executive Director (based on 50% time on silent sports center) 30,000 30,000 30,000 Accounting and Tax Filing 21,000 21,000 21,000 Program Manager (based on 50% time) 24,000 24,000 24,000 Winter Recreation Area Supervisor 60,000 60,000 60,000 General Maintenance Maintenance staff 50,400 50,400 50,400 Volunteer Expenses 10,000 10,000 10,000 Equipment Equipment purchase - for grooming secondary courses Storage trailers rental 2,000 2,000 2,000 Snowmobile depreciation and maintenance 5,000 5,000 5,000 Welcome Center Staff 155, , ,520 Utilities 24,000 24,000 24,000 Maintenance 12,000 12,000 12,000 Sinking Fund 20,000 20,000 20,000 Janitorial 18,000 18,000 18,000 Cross Country Signage 1,000 1,000 1,000 Ambassadors 1,000 1,000 1,000 Transaction fees for passes Lesson fees 2,499 2,499 2,499 Trail Preparation 3,500 3,500 3,500 Tubing Hill tubing hill operators - 12,600 12,600 12,600 Tubes 3,000 3,000 3,000 Tube storage 3,000 3,000 3,000 Transaction fees for passes Snowboard Hill snowboard hill operators 10,500 10,500 10,500 snowboard hill instructors 5,000 5,000 5,000 Hill Preparation 1,000 1,000 1,000

21 Incom Year 4 Year 5 Year 6 Tow line and other maintenance 1,000 1,000 1,000 Event Trails Volunteer costs 3,000 3,000 3,000 Maintenance 5,000 5,000 5,000 Marketing costs advertising 3,000 3,000 3,000 brochures 4,000 4,000 4,000 signage 2,500 2,500 2,500 Direct mail to passholders 1,500 1,500 1,500 Insurance 25,000 25,000 25,000 Park Board fees Park Board fee 41,964 41,964 41,964 concessions fee to Park Board 4,360 4,360 4,360 Total Expenses 566, , ,343 PROF 18,707 18,707 18,707 Cash 53,868 72,575 91,282

22 percent going to Park Board for general revenues 0.08 percent going to Park Board for concession revenues 0.08 Sinking Fund/Escrow Account $20,000.0 Golf Kiosk Fee paid by Park Board to Loppet Foundation - per year $6, Initiail cost of snowmobiles and groomers for "outying" sites - like Columbia, Chain of Lakes, Hiawatha, etc. $10,000.0 Annual cost of upkeep of Loppet grooming equipment $5, Cost of storage trailers for outlying sites $2,000.00