12-09-1985 Council Packet - Laserfiche WebLink

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�� •r , FROM: Marl, Bernhardson, City Administrator,. DATA:: December 5, 1985 SUBJECT: Liquor Store Operations/Strategic Busines,3 Plan 1986 Attached please find business strategy plan that has been developed by Lorraine McGowan, Tom Kuehn and myself as a means to improve the current liquor store operation. As you may be aware Lorraine engaged the services of Lynn Griffith with Minnesota Municipal Ligjor Association to suggest changes last year to improve business. One of the changes suggested was to offer discounts on selected items as a means to attract business and it was indicated to Lorraine at the time that it would take approximately a year for this to actually be reflected in an upturn in sales. This was commenced back in April and it will sti11 be another 3 to 4 months before we expect to see significant results frcm this move. The two most significant items that we will be undertaking in this strategy plan is a significant rf,-suction in personal service costs so that over the next 2 years we will be able to get those costs to an acceptable percentage of sales for our size of operation. The second is that we will be specifically attempting to reduce the inventory size in order to free up money for investment income. Lorraine McGowan is presently working with current employees to arrange these reductions through projection of hours and other means appropriate to reduce overall personnel costs. Yet at the same time work to provide the appropriate customer service that is needed in order for the boutique wines style of operation to be effective. Should we sustain a loss this year and are unable to show a profit next year the City will be required to put the question of whether we should continue in the municipal liquor business off sale to a vote. it would be my recc ^rr-ndat ion that if we are not able to show a profit in 1986 'iat Council liquidate the operation and save the cost and expen:ie of a public vote. RECOMMENDATION - It is L-ecommende:l that the City of Orono cunt:nee its liquor operation for the year 1986 taking the appropriate actions in an attempt to turn it around and that shouli tht_ ipci.—tion in 1986 show not only increased sales of at least 10% but a net profit with investment income of $10,000 that the City then make a conscious decision to 1iet out of the business and that we look first to see if the current employees are interested in taking over the operation and absent that look to liquidate it in some other manner. Should you have any ether questions or comments, please feel free to contact me. PROPOSED MOTION - Moved by seconded by that the Council take un6er advisement the inf-ormation given by ,taff and that the item be ulaced on the agenda for Januery 11, 1986, discussion. Ayes __, Nays cc: Tom Kuehn and Lorraine McGowan