4. Staff Report-Kitchen Rental Request from Jeff Schneider of Fine Time Products � �
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SCANDIA
srar�RepoT:
Date of Meeting: November 6, 2013
To: City Council
From: Brenda Eklund, Deputy Clerk
Re: Kitchen Rental Request from Jeff Schneider of Fine Time Products
Bacicground:
Last December,the Council approved a Kitchen Rental Agreement with LA Schackmann and Jeff
Schneider, Marine on St. Croix residents,to make and package candies under the business name of
Fine Time Products. Per the agreement,they pay a non-resident rate of$18 per hour for use of the
kitchen.
Mr. Jeff Schneider has contacted the City about a reduction to $12 per hour(resident rate) for use
of the Community Center kitchen. A copy of Mr. Schneider's letter is included in your packet.
Jeff Schneider and Lorie Schackmann will be at the Council meeting to answer any questions
you may have.
Issue:
Should Mr. Schneider's current rental of$18 per hour(non-resident rate)be reduced to $12 per
hour(resident rate)?
Proposal Details:
As Mr. Schneider explains in his letter, lowering their operating costs would be advantageous to
the company's profitability and could result in more rental hours for use of the kitchen. He also
explained that the time in the kitchen to dry and package the candies is considered idle time with
no use of the appliances. So far this year, they have paid for 30 hours of kitchen time at a cost of
$540.
Fiscal Impact:
Unknown. It would be dependent on the projected additional hours for which the kitchen could
be rented.
Options:
1) Amend the Kitchen Rental Agreement with LA Schackmann and Jeff Schneider to a
rental rate of$12 per hour.
2) Do not approve a rate reduction.
Fine Time Products LLC respectfully requests an hourly rate-reduction for the Scandia Kitchen Rental.
This request will attempt to explain why a$12.00 per hour Scandia Kitchen Rental fee could be more
advantageous for Scandia and Fine Time Products LLC in the future. The present rental fee of$18.0�per
hour is prohibitive because of its negative effects on our product profit-margins(members may already
recognize that confections&food items in general are wholesaled with relatively"thin"margins in a
highly"competitive" marketplace).
We would like to point out that a large chunk of our kitchen time must go to"passive"{no energy being
used except for lights}chores like product drying and bagging. As an example,our Mayan Meringues
must be left for one hour in a cooling oven-after they've been baked. This idle time is necessary to
dissipate moisture content prior to packaging. The Cane&Cacao Brittle we produce needs to dry and
harden for 50-70 minutes before it can be packed or transported. Chocolate wafers need to"rest"for
60-90 minutes before packaging and transport. A year's worth of production in the Scandia Kitchen has
provided the hands-on experience necessary for us to gather&digest this information.
During the past 12 months, Lorie and I have endeavored to become as efficient as possible. Our product
sales/tests during 2013 have been modestly successful. A dozen retail stores scattered throughout
Minnesota have supported our efforts and helped introduce our products to their customers. Our
projected hourly use of the Scandia Kitchen could increase significantly during the upcoming 14 months.
But,we'll need to maintain viable ope�ating costs for overhead-equilibrium as well as profitability.
Lorie and I appreciate the ongoing consideration we receive from everybody involved in our project and
we will strive to insure profitability for all parties involved.
Jeff Schneider and Lorie Schackmann
Fine Time Products
via e-mail