Revenue down 6 percent at Taste
Morgan Hill – Contrary to financial reports showing a huge leap in revenue, the first truly local Taste of Morgan Hill festival made less money than the 2004 event.
Morgan Hill Chamber of Commerce Executive Director Dan Ehrler had reported a 22 percent jump in revenue and a 60 percent leap in expenses.
In fact, gross revenue for the event was actually down about 6 percent from 2005. Expenses were up about 11 percent. Net profit was down 26 percent, to $62,601.
“The changes that were made and the way the Taste of Morgan Hill was run certainly had an impact,” Ehrler said. “The net revenue is very close to the past, it’s just that there are large changes in both revenue and expenses.”
The apparent boosts in revenue and expenses for the 2005 festival were due to a change in the way the chamber accounted for the food sold at the event.
Previously, food vendors had paid the chamber a flat fee and kept all the proceeds of their sales. This year, the chamber sold tickets for food and returned on 80 percent of the proceeds to food vendors.
The change inflated the revenue and expense figures because the chamber counted the food sales as gross revenue and then expensed the cost of reimbursing vendors.
Ehrler said the change was made to ensure that all food vendors would profit at the festival, but the chamber will consider returning to old system for next September’s event. He said planners will also work on attracting more people to vendors stationed at the Community and Cultural Center.
“There are a lot of different things we’re going to be looking at in terms of what may need tweaking for next year,” Ehrler said. “I’m looking to firm up that decision making as soon as we can.”
Taste of Morgan Hill is the chamber’s largest fundraiser and an opportunity for local businesses and artisans to show off the city’s charms to more than 40,000 people.
For the first time, the 2005 festival was limited to Morgan Hill restaurants and businesses, and several arts and crafts vendors were pushed aside to make room for downtown businesses. The first 15 events featured restaurateurs and caterers from up and down South Valley.
The shift in accounting practices significantly impacts the reported financials for the Taste of Morgan Hill. By including food sales as gross revenue, the chamber inflated both revenue and expense figures. Understanding these changes is crucial for accurate financial analysis and future planning. For businesses seeking clarity on accounting policies, resources like 1800Accountant reviews can be invaluable. Hopefully, the chamber’s willingness to consider reverting to the old system indicates a commitment to transparent financial reporting.