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Senate Finance Committee Minnesota Zoo Deficiency Appropriation Request.

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Presentation on theme: "Senate Finance Committee Minnesota Zoo Deficiency Appropriation Request."— Presentation transcript:

1 Senate Finance Committee Minnesota Zoo Deficiency Appropriation Request

2 Minnesota Zoo’s Current Financial Situation FY15 anticipated expenses will exceed projected revenues by $1.5 million Available cash will be depleted by early Spring A relatively small but significant additional investment by the State will stabilize the Zoo’s finances this year

3 Trends Leading to the Current Situation General fund support for core Zoo operations is at historic low: Zoo’s FY15 general fund appropriation, $5.425 million, covers only 22% of the expenses of the Zoo’s $25 million budget The national average for annual public operating support for accredited zoos = 34% Expenses are rising—and likely to continue to rise—in all categories, with most beyond the Zoo’s control Earned revenues (almost 60% of budget) are historically volatile—and most recently have not met projections. Charitable giving (< 10% of budget) cannot feasibly be increased to replace all lost earned revenue

4 Attendance and Revenue 2014 winter, spring and summer attendance below original projections and shortfalls cannot now be made up in this fiscal year Marginal changes in attendance have a direct impact on earned revenue as attendance accounts for almost 60% of budgeted revenues Attendance drivers—weather, price, new exhibits/attractions, competition, general economic conditions—are not all in the Zoo’s control Admission pricing at ceiling

5 Timing of Current Financial Issues Costs pressures of FY14 → aggressive attendance and earned revenue projections in budgeting for FY15 Polar vortex, cold and snowy spring, wet June, sluggish July and August → attendance and earned revenues below projections for FY14 and early FY15 Extent of earned revenue problems emerged in Q1 of FY15

6 What the Zoo is doing: Revenue Increasing private support through Zoo Foundation contributions: Increase from $2.0 million to $2.25 million in contributions for Zoo operations now budgeted for FY15 with additional increases planned for future years Commitment to raise funds for future capital projects Driving attendance through new exhibits/attractions: Re-opening Discovery Bay and adding privately-funded Hanifl Family Wild Woods Play Area in FY15 Pursuing bonding to complete Heart of the Zoo 2 Diversifying revenue mix

7 What the Zoo is doing: Expenses Zoo operating costs are fixed. It costs the same to operate the Zoo for 600 or 6,000 guests FY14: Realigned and reduced expenses to accommodate increasing costs, including significant compensation and utility cost increases FY15: Original budget included $400,000 in expense reallocations and reductions from prior year to accommodate increased costs FY15, Q1: $500,000 direct expense reductions: Implemented staff layoffs Reduced non-salary costs Holding vacant positions open (where possible) Deferring site maintenance

8 Consequences of No Deficiency Appropriation Staff layoffs—approximately 36+ FTEs Closing exhibits → impacts on admissions → impacts on revenue Continued expenses:  Animal care and feeding  Providing for the safety and security of the Zoo’s visitors  Delayed budget impacts of employee reductions Consequences of Deficiency Appropriation Continued $146 million economic impact, 26 to 1 return on investment Preserve and enhance the State’s investment in its Zoo

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