100,000 visitors will come from out of town and their spending will result in over 21 million dollars in TOT and sales tax revenues to the City of San Diego.

Annually, the corporation and our partners at the San Diego Tourism Authority sell the building to events that will occur in future years.

The largest clients usually book their events five to ten years in advance.

When the event is confirmed, the client also works with our teams to arrange contracts with local hotels to secure blocks of rooms.

The annual goal for the sales teams is to book events that will generate 900,000 room nights for the destination, which are spread into future years when the event is scheduled to occur.

The sales terms are divided into long-term sales and short-term sales based on when the event is scheduled.

Long-term sales team has an annual goal of 860,000 future room nights, and short-term sales team has a room goal of 40,000.

This chart provides a summary of total future room nights that were sold in a given year.

The last two columns show the combined sales efforts for the fiscal years 13 and 14 when the corporation contracted with the tourism authority to handle our long-term sales.

This pace is ahead of last year, and based on the events detailed in the section of this chart, marked tentative, you will see, the SDTA believes that they will meet their annual goal this year.

In fiscal year 2014, SDTA booked 816,188 room nights, 95% of the long-term sales goal.

This chart provides an update on the short-term sales team's progress in the current fiscal year, which ends June 30th.

As of March, the end of March, the team has secured 95 events that will generate more than 21,000 contracted room nights.

The short-term sales team also believes that it will meet its annual goal this year.

In fiscal year 2014, the short-term sales team exceeded their room night goal, booking $41,072 room nights and achieving $103% of their goal.

The short-term sales team also exceeded their revenue goal by 15%.

This slide details the two phases of this effort.

As you can see, the first phase is now complete, and we are now currently in the market having meetings with potential naming rights sponsors.

I want to assure you that we are moving as rapidly as possible to secure a partner that can help address the funding needs for organizing infrastructure capital operations and maintenance for the facility.

The contract was extended to fiscal year 26, resulting in 1.47 million dollars in additional revenues over the next five years.

An effective beginning fiscal year 2016, the new telecommunications data and internet services contract carries a significantly higher commission percentage to be paid to the corporation.

In 2012, the corporation estimated numerous positions, in 2012, the corporation eliminated numerous positions, resulting in a $2 million savings over a five-year period.

Additional staff reductions were done in the summer of 2014, providing additional savings.

The corporation continues to implement operational strategies to reduce costs as well.

This slide shows how efforts to reduce utility use through the installation of low energy lighting on our exhibit hall and throughout the building will save the corporation approximately $660,000 a year in utility expenses.

The LED retrofit is unfolding in two phases.

We are estimating a savings of 1.2 kilowatt hours in phase one and another 1.2 kilowatt hours savings in phase two.

Each phase of the LED project should save about $215,000 in electric utility costs annually.

The cost of this retrofit will be recouped within one year of its installation.

We have been updating the facilities as well of our older restrooms and installing low-flow faucets and toilet fixtures.

In addition to responding to our statewide and regional water crisis, this has so far saved the corporation $34,547 annually.

This savings is growing as the cost per 100 cubic feet of water gets more and more expensive.

I'm going to turn it over to Gil now to introduce you to our budget presentation.

Thank you, Laurie.

Good afternoon, everyone.

As Chair of the Budget Committee and former member of the audit committee, I wanted to briefly outline the various tools and processes that we use to monitor the corporation's finances, provide oversight, and give direction to the staff.

This slide outlines the our key tools, including monthly and quarterly financial statements, including uh that include any major budgetary uh variances.

On a monthly basis, we also receive a report on capital expenditures.

The budget committee and our audit committee regularly review the financial records and reports, drive the budget process and perform our annual corporate audit.

The board is actively involved beyond just scheduling scheduled meetings as we are regularly in communication with senior staff on all issues tied to finance and budget throughout the year.

One of the requests included in the council members we receive uh council members we received was additional information about performance measures that we are tracking.

This slide provides some of the key performance measures that we track.

Um for example, all major expense categories are tracked by event on a monthly basis, labor costs by division or compared to revenues monthly and annually and reviewed as well by event.

Utility consumption is reviewed monthly, and financial statements are reviewed in detail monthly to identify any issues, trends, or errors.

And one of the most valuable activities the corporation undertakes is benchmarking is a benchmarking effort of our operations to test uh against the industry's best practices.

Go to the next one.

Okay.

Sorry, I'm going to turn over to Mark to give you an overview of the budget process.

Okay.

All right, thank you, Gil.

Um, before we review our fiscal year 2016 budget numbers, we would like to provide you with a brief overview of our budgeting process, one that, as you will see, is developed in detail from the bottoms up, and is driven by events that are already booked in the convention center.

Our budget process is a six-month exercise that starts with our sales department projecting rental revenue by individual event.

Then our food and beverage department estimates food and beverage revenues by those same individual events.

This two-step process is done for every single event anticipated to take place in the convention center and serves literally as the cornerstone of our entire budgeting process.

Here's an example of the first phase of our budget process.

The time frame of this is typically October through December.

This was an actual 2016 event in the center column that you see on this slide, indicating gross rent, rental credits, net rent, and then gross food and beverage sales and food and beverage commission revenue for this one specific event.

And then, as I mentioned a minute ago, we do this for each and every single event throughout the entire year.

So the result is overall budgeted rent and food and beverage revenues for fiscal year 2016 as shown on the right column on this slide.

After we finish compiling all of the rent and food and beverage revenues by all events, we are ready to begin the next phase of our budgeting process, which is to release all of this information, the rent in the food and beverage revenues, all the detail, to individual divisions throughout the convention center organization, and then task them to do two things.