Services adapting to expansion

In the third installment of the news team’s examination of AMS finances, Common Ground and TAPS are put under the magnifying glass

Queen’s Pub (QP) is $26,585.88 ahead of its year-to-date budgeted food sales.
Queen’s Pub (QP) is $26,585.88 ahead of its year-to-date budgeted food sales.
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Tristan Lee, head manager of Common Ground, says this year the service focused on summer marketing and redesigning the space.
Tristan Lee, head manager of Common Ground, says this year the service focused on summer marketing and redesigning the space.
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Both TAPS and Common Ground have seen huge increases in student usage over the past year, but increased revenue has also meant increased costs for both services.

In 2005, the Queen’s Pub (QP) and Alfie’s nightclub were amalgamated into TAPS. While both services are calculated into the total revenue and losses of TAPS, they appear individually on the budget.

This year, TAPS’ revenue is budgeted to be $30,839.67 up from last year.

TAPS is budgeted to finish the year at a $1,913.14 loss. This is a significant improvement over last year when TAPS suffered a $45,714.94 loss.

Jay Deslauriers, TAPS head manager, said that while TAPS expenses have increased by $78,467.75 this year mostly because of the minimum wage increase, food sales at QP have skyrocketed.

According to February’s month-end financial statement, the QP is $26,585.88 ahead of its Year to Date (YTD) budgeted food sale revenue.

The QP is also beating its budget in alcohol sales. As of February’s month-end, the service is $59,170.84 ahead of its YTD budgeted revenue. QP is also $59,082.73 ahead in revenue of where it was at the same time last year.

“All the revenue is based fully on volume … a lot more people are using the service,” Deslauriers, ArtSci ’10 said.

Although QP’s prices stayed the same and there was limited menu change, Deslauriers said that QP is being seen as more of a restaurant on campus, which helps explain the increase in user volume.

“[This was] my kind of vision for QP. We’re the only real restaurant on campus,” Deslauriers said.

Alfie’s has not seen similar increases in revenue this year. Although they are budgeted to make $32,682.67 more in revenue than they did last year, as of the Feb. month-end financial statement, they are $34,944.03 behind the budgeted YTD sales.

“A lot of people are contributing our lower Alfie’s nights to all the big DJs happening at [clubs like] Stages,” Deslauriers said, adding that despite this, new events like Classic Rock Night, have brought more people back to Alfie’s.

Other special event days like St. Patrick’s Day and the last day of semester also increase sales at QP and Alfie’s dramatically, Deslauriers said. While TAPS typically makes around $7,500 on Thursday and Friday nights, on special event days, revenue can increase to $11,500.

Ben Hartley, AMS vice-president (operations), said that the common assumption he’s heard around campus, that Alfie’s is causing TAPS to suffer financially, isn’t justified.

“TAPS this year is taking on extra cost in wages, salary and [Student Constable] charges,” Hartley said, adding that TAPS currently requires two Student Constables to be on duty after 8 p.m. at the QP, and seven on Alfie’s nights. “Their charges went up as a means of retaining staff. When you do that, it affects the people that use them,” Hartley said.

Hartley said that he expects TAPS to beat its budgeted loss this year.

“I don’t know if it will be by a ton, but I expect it to be profitable,” Hartley said. “We’re a little bit behind, but I’m not terribly concerned.” TAPS’ YTD net profit is $54,811.49 compared to the $55,683.66 budgeted as of February’s month’s end financial statement.

Hartley said that the merging of QP and Alfies into TAPS has increased the financial sustainability of both services and Alfie’s is not at risk of shutting down.

“It’s kept Alfie’s as being the student nightclub … Alfie’s offers a lot of intangible benefits to students as well,” Hartley said.

Hartley said that because the TAPS services have been around for over 30 years, their finances are a bit more predictable than a service like Common Ground, which Hartley said is still in its infancy. Even though it has existed for 10 years, Hartley said that its move from the original location in the JDUC to the Queen’s Centre has meant a completely different operation for the service because of huge increases in user volume.

Hartley said that Common Ground suffered some financial difficulty last year and sat at a $84,362.59 loss. This year they are budgeted to come in at $62,789 loss.

“One of the main problems for them was the shift over to the Queen’s Centre … it was a move from a small space in which their operation was fairly refined to a larger space,” Hartley, ArtSci ’10, said.

Now fully functioning in the Queen’s Centre, Hartley said that Common Ground saw an unexpected 37 per cent increase in user volume this year.

“When your volume goes up, your cost of sales and operating expenses go up,” Hartley said. “The margin becomes the important piece.” Hartley said that it’s important for services within the AMS to be financially sustainable.

“With Common Ground and the AMS in general … if you try to fix everything in one year you can actually do more damage than you might expect,” Hartley said. “We were looking at [Common Ground] on a two to three year scale. What we expect is for them to be in a position to break even … I expect Common Ground would be in reach of [this] next year.” Hartley said that he is fairly confident Common Ground will do better than expected due to exemplary sales.

According to February’s month end year to date sales, Common Ground is $128,289.98 ahead of budgeted sales, and $189,974.11 ahead of sales at this time last year. They were budgeted to be $85,484.12 ahead of last year.

“Common Ground faces the obvious competitor of Tim Hortons [in the Queen’s Centre],” Hartley said. “You’ve seen [it] develop into something that really takes in the concept of student life … when people are up there it makes them feel welcome.”

Tristan Lee, Common Ground head manager, said that this year has seen some huge changes for the service.

“Last year we were [in the Queen’s Centre] for half a year, but at that point the team before ours had planned to move in here before August,” Lee, ArtSci ’12, said, referencing the Queen’s Centre flooding in July 2009. “For us, we had the entire summer knowing we would be in this building … we wanted to this be a starting point,” Lee said, adding that his management team tried to prepare for an increase in customer volume.

“We decided we wanted to rebuild Common Ground from the bottom up … on top of that we wanted to market so that we could get a large increase in customer volume,” Lee said.

During Orientation Week, Lee said that the service registered with Tour of the Town so that 2,000 incoming students would be brought to Common Ground. In addition to this, Lee said that the management team strived to make the new space as appealing as the old one by putting more artwork on the walls, and bringing plants into the space.

“We [also] went through the menu and revaluated. We did this to ensure that all our products would be ones we would sell a lot of,” Lee said. “Building our brand was another part of our concern for the summer.”

Lee said that Common Ground held a sampling day in the summer where customers could try out new sandwiches and drinks and give feedback to the service. This influenced some new items that were added to the menu, such as the seasonal gingerbread latte.

Another location was added to Common Ground in September 2010.

The Common Ground (Cogro) Express opened in Common Ground’s old space in the JDUC with limited hours and a condensed menu. Lee said that the revenues and losses from this location of Common Ground are not separated from the service’s financial statements.

“When we count our cash from [Cogro express] it’s deposited [at Common Ground],” Lee said, adding that Cogro Express is doing just as well as it was expected to in a general sense.

Lee said that two staff members are always scheduled during Cogro Express’ 30 weekly operating hours, and that the only additional costs the service has are general food and supply costs.

“It has the potential to have huge increases in revenue … I think it’s something that especially next year will expand even more.” Lee said that the minimum wage increase last year had a huge effect upon Common Ground. The 50 cent increase meant an additional $35,000 had to be budgeted for wages.

Currently Common Ground is open 109 hours a week. Lee said that although there have been talks in the past of reducing the service’s hours to cut down on the cost of wages, a change would impact Common Ground’s role for students.

“We believe that the point of Cogro is to offer students great service … because we are open until 1 a.m., we can serve students in the library very late,” Lee said.

Lee said that Common Ground has seen a general increase of sales in all products, and this was largely due to the Golden Ticket marketing campaign run throughout March that offered customers the chance to win prizes by finding tickets in their premade sandwiches.

“It’s something that we wanted to do to really establish Cogro as the place to go and somewhere that would remain [in] competition steadily for the next 10 years,” Lee said, adding that March saw an increase of roughly 100 premade sandwiches per day during the Golden Ticket campaign.

Lee said that he was fairly confident that Common Ground will end with a lower deficit than budgeted. “I don’t think we’ll break even this year by any means, but that wasn’t really our goal … Given that revenues have gone up so much this year, I think it’ll continue to go up next year,” Lee said.

Breaking even

Every year, all sectors of the AMS are budgeted with the intent of breaking even rather than making profit.

Although AMS services like the Tricolour Outlet, Common Ground, TAPS and the P&CC are profit seeking by nature, all money made is pooled back into the AMS’s operating fund.

Ben Hartley, AMS vice-president (operations), said this is because the AMS is not just a student government, but also a $14.7 million not-for-profit corporation.

“We can’t be profit seeking,” Hartley, ArtSci ’10, said. “We can have individual ancillaries that can do that … the books at the end of the year will be a reflection of not only the services but the entire operations of the society.”

Hartley said that in the event that an area of the AMS or the AMS as a whole does make a profit, the excess revenue will go back into the AMS’s operating fund.

“A surplus for a service does not benefit [it] in the next year,” Hartley said. “It’s not reflective on their operating statement for the next year.” In the event that a part of the AMS is in a deficit, Hartley said that the AMS will absorb the costs.

“AMS Assembly as well as the offices budget for zero, as well as the services as a whole,” Hartley said.

Katherine Fernandez-Blance

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