11.21.16 Gambling Report to the Board

1. Approval ofOCTOBER 2016LG1004- Actual Expenditures(amounts in italics – the other amounts have already been approved)

2. Approval ofNOVEMBER2016LG1004- ProjectedExpenditures/Lawful Purpose Expenses

3. OCTOBER 31, 2016BANK RECONCILIATION Report. Today’s balance is $83,045.12.

4. The required financial and inventory paperwork from SEPTEMBER 2016 is also being presented for approval. (OCTOBER2016 will be presented at theDECEMBERboard meeting.)

5. 50% RUSH CITY CONTRIBUTION: As of the end of October, our required Rush City donations are $15,280.01. This number will likely increase by the end of December. It’s time to start making our yearly donations. Last year we gave $10,000.00 to the Rush City Schools (this is an important donation and ultimately benefits our hockey community). I’d be comfortable giving $12,000 this year, as we’ve far exceeded our yearly required contribution amounts from last year. Bob will be presenting another idea for a $1960.00 donation to Rush City also benefiting our hockey community. Ideas for the remaining required contributions: 1. The Senior Citizen’s room/dinner in Rush City is asking business for a new flat screen TV (they said they’d put up a plaque next to it in honor of who donated it). 2. The VFW has passed along to us a request for donations to help a long time resident and retired Rush City fire fighter, Darrin Forcier, who is in the midst of a long rehabilitation after suffering a stroke.

6. FUND LOSS: The LG250 Fund Loss Request being sent into MN Gambling control is being passed around for the board’s approval. The police report from the incident and a spread sheet showing details of the final fund loss amount of $1974.00 per start cash and final game audits are attached. If the fund loss request is approved, PCYH will be able to write this amount off. If not approved (because they’ve found us at fault by not having tight enough internal controls), the general account will then have to pay back this $1974.00 to the gambling account. The last two fund loss request’s we sent in, have been approved. Another option would be to have The Other Side Bar pay back the $1974.00 (and if later approved by gambling control for write off, we would then have to pay them back that money.)

7. THE OTHER SIDE BAR: After another fund loss/theft, the board asked for a report on how much money we were profiting at this site to decide if it was worth keeping our gambling there. I ran some reports and was pleasantly surprised to find that the past year (11/2015-11/2016) our NET profits at this site are much better than expected! Profits look higher that both Froggys and Chubbys even in the initial report, but when you take out expenses where site allocations vary, they make almost 8% of our profits, compared to Froggys at 13% and Chubbys at 14%, The Village at 18%, and the VFW at 46% (both Chuckers and the PC Country Club make less than 1/2%). Bingo significantly increased our gross revenues there by 24% as well. A good thing in my opinion. If we continue with gambling there, I would have less start cash on site (only $1050.00 instead of the $2050.00 before the theft, as we can always pay a bingo jack pot by check, instead of keep the cash on site), we could also make them provide the $1050.00 in start cash needed (this might be an accounting nightmare when it came to cash over/shorts and or loss games.) They have also assured me that they now have a lock on the security camera system and the safe bolted to the wall. They have always followed every other internal control policies I’ve asked of them, and they have been one of our better sites as far as cash shorts go too!

8. HOLIDAY THANK YOU GIFTS: The past several years we’ve given holiday gift certificates out during the month of December during our meat raffles as a thank you to our loyal customers. We’d like to continue doing this. The gambling account is not legally allowed to pay for these, however (the general account will need to.) We’d like to give: 20 Gift certificates for Heggies pizzas at the VFW ($210.00), 10 gift gift certificates for 10 Heggies pizzas at FROGGYS ($80.00) and another 10 gift certificates for a 1 topping pizzas at THE VILLAGE ($106.90). Last year we spent $350 on gifts for just Froggys and the VFW, this year the total would come to $396.90 for three sites instead of just the two. As a business perspective, I don’t think this is too much to ask considering the $108,798.00 in lawful purpose expenses (ice fees, donations, required fees /taxes) that we were able to pay last year by having our gambling in these establishments! Thank you.