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~ p~ , CASE # 4 Copies distributed at the meeting CHARITABLE GAMBLING By: Sandra Ashley Helling, Finance Officer Background: At the May 25, 1993 meeting, the Finance Committee recommended Council adopt a policy that allows charitable gambling organizations to deduct monthly net losses against future profits realized for the same site within the same permit year. A resolution confirming this policy will be on the next Council agenda. Also at that meeting, I reported that two organizations with sites in Ramsey were late in submitting their reports to our City. Since that time, the Anoka Area Hockey Association has submitted reports and associated payments totaling $1,760.05 for activity through April 1993. I have not yet updated their recap files here at the City, but no significant reporting differences are anticipated. Today I sent a letter to the Anoka Area Ice Arena Association that advised of the City's policy in regard to monthly losses.. This letter also restated requests for information and clarification as contained in my letters of August 25, 1992, February 26, 1993, and April 6, 1993. Attached are copies of the latest letter and a summary of their reports as generated by our office. The current status. of the Charitable Gambling Fund is as follows: Special Revenue Fund 270 $11,632 12,010 2,223 399 $26,264 Cystic Fibrosis Ramsey Lions Anoka Area Hockey Anoka Ice Arena Fund Balance Site locations: None as of 03/93 Superbowl, Lallys, VFW Post J.R.'s (03/93), McDuffs J.R.'s Bingo and pull-tab activity began at the VFW on June 1, 1993. In a discussion with Jerry Hamlet regarding this site of the Lions, he stated distributors have advised that they will lose money for the first few months and summers are slow. The Lions expect this site to be profitable in September of this year. Observations: Until June 1, 1993, Anoka Area Ice Arena was the only organization conducting bingo at a site within Ramsey. The City recap for the permit year ending February 1993, shows total net receipts (Gross receipts less prizes) for bingo of $18, but overhead expenses directly resulting from bingo during this period exceed $45,000. This bingo operating loss is so significant, the site realized an overall $4,720 net operating loss for the permit year. Previously Cystic Fibrosis conducted bingo at this same site and they realized an overall operating profit each month. In addition to the continuing bingo losses at the Ramsey site, it appears this site also incurs significant expenditures for accounting review. From May 1992 to February 1993, the accounting professional service expenditures for J.R.'s was $9,990, whereas the organization's other site, Billy's in Anoka, incurred a cost during this same time period of