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<br />Memorandum: 621 Foundation Premises Permit Renewal Application . <br />January 11,2002 <br />Page 2 <br /> <br />10. Non-621 Foundation Trade Area $ 1,000.00 (0.2% NPAT) <br /> Spending (Center for Independent <br /> Living) <br />11. Subtotal Trade Area Spending $ 38,467.91 (9.5% NPAT) <br />12. Lawful Expenses to 621 Foundation $ 363,000.00 (90.0% NPAT) <br />13. 621 Foundation Expenditures to Support $ 173,795.45 43.17%NPAT) <br /> Trade Area Programs <br /> <br />Trade Area Spendinl! Issues <br />1. 10% Contribution to Arden Hills <br />The applicant deducts previous month payments to Arden Hills as a reduction to current <br />month net profit in the same manner as other taxes paid to the State of Minnesota. However, <br />Minnesota Statues 349.123 Subdivision I (Local Regulation) states that such ten percent net <br />profit contributions "is not considered an expenditure to the City nor a tax under Section . <br />297E.02, and is valid and lawful." Staff is of the opinion that the local ten percent <br />contribution requirement has not totally been met. <br /> <br />2. Ordinance No. 318 Compliance <br />For nineteen (19) of the twenty-four (24) months of this review period, the requirements of <br />Ordinance No. 318 were in effect. Ordinance No. 318 specifies that permitted organizations <br />shall not include expenditures made to itself as satisfying the trade area expenditure <br />requirement. In the case of the applicant, 90% of net profits has been paid to itself. <br /> <br />3. Funding 01621 Foundation Program Activities <br />In reviewing audited financial statements for the applicant for the years ended June 30, 2000, <br />and June 30, 2001, it was noted that, approximately two-thirds of the organization's revenue <br />came from charitable gambling sources and one-third from other sources. The revenues were <br />used to fund program activities and grow the endowment of the organization. <br /> <br />To make the case that the organization has satisfied the trade area spending requirement, one <br />would have to assume that 100% of local projects (generally direct grant payments to <br />teachers) are funded exclusively from charitable gambling sources and that all other revenue <br />sources are used solely for endowment growth purposes. <br /> <br />. <br />