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Thursday, August 1, 2013

Revenues to Offset Expenses at Center of 'Community' Life?

Seeing Both Sides of School District's Math

Conscious of righteous indignation rising from the July 2nd City Council meeting when shocked Council members learned of staff estimates that the Emeryville Center of 'Community' Life (ECCL) would dramatically increase operating expenses, the Emery School District is busy reminding everyone the project will increase revenue, offsetting these rising expenses. Tattler readers will remember it was revealed at that July meeting the ECCL will cause a 400% increase in the operating expenses at the City's Recreation Center, a 100% increase in the City's overall maintenance expenses, and would put the City's General Fund at risk in an $11 Million gamble.  That's a big increase but the School District says it will be ameliorated by at least $100,000 in increased annual revenue generated by the project.

How does the District believe that the ECCL will earn revenue?

Photo by flickr user riptidesportsgrill
Who wants a beach or a Napa Valley
wedding these days?
Obviously, from all the rental income they will receive when the ECCL is used for weddings and wedding receptions.

That's right, the District's budget asks us to assume that rentals of the Community Multi-Purpose Room will earn the City $50,000 per year, mentioning weddings as an example on page 18 of the Staff Report.
But the money provided by weddings is not gravy, it's not simply some sideline mad money mentioned to help keep the naysayers of the project at bay;  no, this is real money the School District and the City is counting on to help balance the books.

The School District would have us believe they're onto something.  Emeryville residents may be unaware that destination beach weddings and the like are out, pass√© even in this modern age.  Instead, the modern bride and groom are increasingly seeking out the ease and convenience of a wedding with close proximity to a school cafeteria.  Wedding guests can choose from last Thursday's beef burritos or Wednesday's veggie lasagna.

We urge couples even considering nuptials to contact City Staff to make their reservations now. The ECCL may not be built yet, but the chance to reserve the artificial turf fields for your dream wedding is not something you want to take a chance on missing, so reserve your date now.

For a lifetime of memories on 
your special day,
how about tying the knot here?
But the revenues don't stop there!  Money will be flowing in from all quarters we're told, helping to offset the 400% increase in operating expenses.  For instance the District also assumes that third party service providers will be lining up to sign a long-term lease of the newly-built library, adding another $20,000 per year in ECCL revenue.  The District says it's easy to see why so many entrepreneurs would be clamoring for such an opportunity.  Just look at a library's compelling business model: a library faces significant product acquisition costs (paying for books and other materials), has significant staffing costs (librarians), and then it loans out all of its product to the public for free.  But like a drug pusher on the corner, there's a catch to that freebie: overdue fines.  People frequently forget to return library books on time and daily fines can rack up at rates up to 10 cents per day!  Go out of town for a long weekend and forget to return your book?  You could be looking at a 40 cent fine when you get back.  If you have money to invest for your retirement, you should look into these third-party providers that pay to rent and operate libraries.  The numbers crunching green eye-shade folks at the School District tell us it's a no-brainer.  (Disclaimer: The Tattler is not a licensed financial advice provider, we're only the messenger here.)

When you add in the $30,000 per year that a third-party is going to pay to lease the project's proposed Wellness Center, the District has found a total of $100,000 in annual ECCL revenues.  This is the promise of the Center of 'Community' Life realized for all to see.  Just because the efficiencies and economies of scale the District promised didn't materialize is no reason to start doubting the School District's math.  You've got to look at the expenses column to be sure, but also don't neglect to look at the revenue column they remind us.  Only then does one get a clear picture of the 'genius' of the Emery School District's vision.

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