[Finance] Draft Budgets

Thu Mar 13 11:37:38 PDT 2014

Thanks Zennon,

Good feedback on bike valet numbers, its appreciated.

1) I see what you are saying on the service hours. The service hours had 
been set up in a somewhat arbitrary matter as a first attempt and I had 
stuck with those numbers. I took a second look at this yesterday and 
revised things to come up with numbers that could be linked back to 
capacity and operational hours, here is what I came up with.

Setup 	Capacity 	Hours 	Capacity * Hours 	Service Hours 	Bike 
Hours/Service Hours
Small 	50 	8 	400 	1 	400
Medium 	150 	8 	1200 	3.25 	369
Large 	300 	8 	2400 	6.75 	356
Bombers 500 	500 	8.5 	4250 	12 	354
Bombers 750 	750 	8.5 	6375 	18 	354
Bombers 1000 	1000 	8.5 	8500 	24 	354
Bombers 1250 	1250 	8.5 	10625 	30 	354

I then used these numbers to revise our rates and the numbers for the 
Bombers proposal. Those numbers are attached in the Summary pricing 
schedule (2014-Bike-Valet-Pricing.xlsx). For those who want to look into 
more details, I'm also attaching a more detailed spreadsheet that goes 
through costs (BV-Draft-Costs-2014-V4.xlsx).

2) The average use number was a total estimate on my part, and didn't 
reflect the Bombers experience. I'm attaching a graph from Amanda's 2013 
BV report to give a better idea of what the actual bicycle numbers from 
2013 were for the Bomber games. We were at capacity until the Banjo Bowl 
in September. Three issues that we think led to the decreasing number of 
cyclists both going to the game and parking with us that we hope to 
address in 2014 are bike valet capacity not meeting demand, bicycle 
thefts and convenience. On the first front, we want to ensure that we 
have enough capacity to meet fan needs from the start of the season so 
that they get in the habit of using the service. Last year, we turned a 
lot of people away at the early games, when were full well before game 
time. I think that led many to drop the bikes, especially as it got very 
hard to find a place to park for those arriving at the games a bit late. 
The bicycle thefts all occurred with bikes parked outside of the bike 
valet service, but it was a definite issue as the season went on. That 
was a negative of all the publicity we received. The third strategy we 
are hoping to use to attract more cyclists is to have an additional 
valet site located at the southwest corner of the stadium for those 
coming in from Fort Richmond or along Chancellor Matheson, as its a bit 
awkward for these patrons to get to the current valet locations.

3) We've given the Bombers 2 options to consider. A status quo option 
that would allow us to park 500 bikes/game and an enhanced option that 
would allow us to park 1250 bikes during the peak months, scaling down 
to 750 as the season progresses and weather deteriorates. Fro the 10 
game package, we've priced the 500 bike capacity at $11,500 and the 
larger capacity package at $19,150. We've included a 15% admin fee in 
the cost of both proposals (as well as our general pricing), so the 
financial benefit to us for the extra capacity would be in that 15% fee. 
We would also gain from tips, increased exposure of Bike Winnipeg, and 
the more basic goal of encouraging more people to bike to the game (and 
hopefully gain the confidence to bike to other destinations as well). 
I'm attacing the summary we sent to the Bombers as well. The plan will 
be to get in front of them to provide a proper presentation/pitch.

It's hard to say how the Bombers will react. We can also work with the 
Event Day Advisory Committee to help push for increased capacity as 
Janice Lukes is part of that committee. As the money for bike valet 
actually comes through an MPI sponsorship, we can also contact them 
about the expanded capacity. I am going to contact the WRHA about some 
potential funding opportunities for Bike Winnipeg, and will also look 
the potential for that funding to provide capital for any expansion.

Mark

On 12/03/2014 12:33 AM, Gagne, Zennon wrote:
> Great work Mark and Amanda at quantifying the costs associated with BV. The considerable amount of effort that has gone in to the analysis definitely helped me gauge how the operation is run and the costs associated with it. I've spent a significant amount of time looking at these costs:
>
> 1. The one thing I don't understand is how the 'service hours' are assigned to each capacity. As in, why is it 30 hours for 1250 capacity, 25 hours for 1000, and 10 hours for 500? Is this calculated on the first tab at the bottom? (See Bombers-1250 Cell B41 for the 30 hours).
>
> 2. If I read Tab 1 Cell B52-C52 right, we run at 75% of capacity on average. Is it realistic to believe that we can park over 1000 bikes in a game if we are not currently hitting capacity of 400?
>
> 3. What is the financial benefit to BV and Bike Winnipeg of an increase in capacity from 400 to 1250 bikes. Is there room on the bombers side to triple our rate per game for triple increase in capacity? If we do end up negotiating for the preferred 1250, will the rate paid by the bombers be increased accordingly? How will that work? I also think if we give the bombers too many options, they will opt for the lower amount to keep the costs as low as possible.
>
> What do you think, overall awesome job on this, pretty cool to see how everything comes together as you have laid it out.
>
> Zennon
>
> -----Original Message-----
> From: finance-bounces at lists.bikewinnipeg.ca [mailto:finance-bounces at lists.bikewinnipeg.ca] On Behalf Of Mark Cohoe
> Sent: Monday, March 10, 2014 6:13 AM
> To: finance at lists.bikewinnipeg.ca
> Cc: 'jeremy at bikewinnipeg.ca'
> Subject: [Finance] Draft Budgets
>
> HI,
>
> Amanda and I met over the weekend and did a detailed run through of the
> numbers for bicycle valet to come up with pricing for small (<50 bikes),
> medium (50-150 bikes) and large (> 150 bikes) setups. For the Bombers,
> we developed 4 scenarios based on capacities of 1250, 1000, 750 and 500
> bikes, 500 being the status quo. Amanda, I've made a few small changes
> to the numbers from what we had Saturday, but mainly to deal with the
> service hours. I also decided you were right about listing the capital
> costs under expenditures in the budget, so that's in there too.
>
> To develop the prices, we broke down costs into fixed and operational
> costs. We borrowed Jeremy's idea of service hours to help factor fixed
> costs into the rates. To calculate a service hour fee, we assigned a
> fixed number of service hours to each setup type, multiplied that number
> by the estimated number of each contracted setup type to determine a
> service hours total for the season, and then divided fixed costs by that
> number to get a service hour cost. See the Cost Analysis Spreadsheet to
> review these calculations.
>
> The service hour fee was then combined with estimated variable costs to
> get a total setup cost (which included transport and a fixed number of
> operational hours) and hourly rate for any additional hours.
>
> Note that because the Bombers contract takes up such a large portion of
> our contract setups, the service hour costs depends on which capacity
> scenario the Bombers choose for 2014. The actual service hour charge is
> listed on each tab (Bombers-1250, Bombers-1000, etc.) as a fixed number
> rather than as a linked cell. In each case it was calculated by setting
> the service hours cell on the rates tab and adjusting the quantity of
> new stations and racks in the depreciation calculation.
>
> I've marked the 1250 bike capacity option as the preferred option. If
> the Bombers go with that option, we would have to come up with an
> additional $12,000 for capital acquisition. Amanda and I thought it
> would be best to ask for a multi-year contract from the Bombers, so
> ideally this would give us ability to get a loan. We also recognized
> that regardless of what option is chosen by the Bombers, we will need to
> bill game by game to manage our cash flow.
>
> For the BV and BW budgets, I've made calculations based on the Status
> Quo option, which gives capacity for 500 bikes/game. We had a capacity
> for 400-450 last year.
>
> To balance the BV budget, I pushed the Bomber rate up a bit to
> $1300/game. The BW budget includes a contingency of 4% of expenses (BV
> and BW Core).
>
> Cheers,
> Mark
>

-- 
Mark Cohoe
Executive Director
Bike Winnipeg
www.bikewinnipeg.ca
204-894-6540

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