Committee approves Camden Snow Bowl’s $874,000 budget, reviews audit report
CAMDEN — The Camden Budget Committee April 20 voted to recommend approving the Camden Snow Bowl's FY18 budget of $874,000, as submitted by Acting Town Manager Roberta Smith and Acting Snow Bowl Director Beth Ward. If approved by the Select Board at a later date, the budget 5 percent less overall than the FY17 budget.
Thursday night's review of the Snow Bowl budget was just that, a review, as the budget committee's role is as an advisory to the Select Board. Final decisions about the Snow Bowl's budget and finances fall on the Select Board's shoulders.
Also Thursday night, the budget committee had on its agenda a review of the April 12 audit of the Ragged Mountain Redevelopment Project at the Snow Bowl. A variety of audit issues were discussed by the committee, with one member, Kate Bates, taking the Select Board to task for its lack of performance, which she deemed “being asleep at the wheel.”
Earlier in the week, at the Select Board's April 18 meeting, auditor Ron Smith ran through his firm's findings and determined that of the $6.5 million allocated by the town and Ragged Mountain Foundation to fund the redevelopment project, a total of $6,547,528.87 had been spent. Of that, the town had spent $1,964,258.66 of the $2 million voters approved for the project. The Foundation thus far has paid the town $3,840,136.16. That leaves a deficit of $743,134.05.
According to the wording of the bond:"The Town's share of the cost will be limited to the lesser of 30 percent of the actual cost of the Project or Two Million Dollars ($2,000,000). Town funds will be distributed by the Select Board in a manner which ensures that a minimum of seventy percent (70 percent) of the actual cost of the Project is funded by donations."
In the report, Smith wrote: "Our review suggests that the Town approved and paid approximately $750,000 in project expenses beyond the amount approved by the voters."
Smith, with the Buxton-based company R. H. Smith and Company. also said that the approximately $750,000 in expenses were paid for out of the town's General Fund, putting it at a dangerously low level and seriously impacting the town's cash flow. He said he is confident the money went into the mountain, but that the town needs to work with the Foundation to get the money reimbursed so it has cash in the bank again.
Acting Town Manager Smith started Thursday night telling the committee members that despite what they might have heard at the audit meeting April 18 or read in the media, "The town has not spent $743,134 beyond their authorization to do so." She added the caveat "...as long as the Foundation [Ragged Mountain Foundation] reimburses us the 70 percent."
She went on to say that in the beginning of January 2017, two bills totaling $719,000 were created and submitted to the Foundation, the first bills they had received in between 18 months to two years. She said that at that point though, there was some concern about the accuracy of some of the numbers so she told the Foundation to hold off paying them.
Budget Committee member Alison McKellar asked if the bills were sent out while former Town Manager Pat Finnigan was still there, to which Smith said, "Yes."
"What did they [Foundation] say?" said McKellar.
"I don't know, I wasn't here then," said Smith.
Select Board Chairman John French spoke up and said that when the board discovered there hadn't been any billing in almost two years, and they were told that cash flow was getting low, the board told Finnigan to get a bill together for what they figured was owed at the time.
"We wanted as much turnover as we could, and that was where the $719,000 came from. Then Roberta came on board and that slowed things down," said French.
Budget Committee member Kate Bates said that because both the town and the Foundation had essentially paid what they originally pledged to pay for the project, and that was supposed to include a lodge, to finish the project with a lodge, "the project will need to be significantly overspent."
Smith said that that's been the case for at least two years. "It was discussed that it was no longer a $6.8 million project by an $8.4 million project."
Committee member Morgan Laidlaw said that the Foundation is making an attempt to come up with the overage, as they committed in the beginning to be responsible for 70 percent even if the project ran over.
Smith also said that if $2.6 million is the right estimate for a new lodge, and it's now an $8.4 million project, then it's short $1 million. Whether or not the Foundation has been able to raise the extra $1.6 million and is capable of coming up with another $1 million to finish the project is not known.
With the Select Board members in attendance at the meeting, as they are at all budget committee meetings, Bates said for her, the discussion she wanted to have is not just about the numbers, but accountability by French and the board members, including Jim Heard, Don White and Marc Ratner.
"What's more concerning to me is the Select Board's What's more concerning to me is the Select Board's significant lack of management, not only of this project but also failure to manage the town manager, to condone four pages of bad practices, to leave us with a general fund that is greatly depleted, to leave us with a town that doesn't have a five-year capital plan and saying 'Sorry, now it's time to move on,'" said Bates. "It doesn't cut it. And I would like to hear from the Select Board members, who appear to have been asleep at the wheel, how they explain their failure to manage the town manager and represent the best interest of the townspeople. If those aren't the two things you are here to do, what are you doing?"
Heard reiterated his statement from Tuesday night, adding history of he project going back to the beginning when the Redevelopment Committee was being old their budget was off by at least $1 million. He also said that back then, if you disagreed with the committee, or questioned things, you were "deemed against the project."
Both of those things, among others, in his opinion, doomed the project at the start.
"As for managing Patricia Finnigan, we did a terrible job. I asked at every meeting, 'I want to see the Snow Bowl numbers,' and was told, 'I'll get them to you at next meeting.' Next meeting comes around, no numbers. I am not the only one who asked for the information, asked the question. Why at that point we didn't have a serious conversation with Pat, I can't tell you," said Heard.
Heard said they also questioned Finnigan why she was going to be the project manager of the Redevelopment Project. He said they told her she had no idea what she was doing and had never done anything like it before.
"Pat kept assuring us 'Oh, I can do it,' said Heard. "And the board said, 'You've got to have a project manager. And it turns out, she was the project manager, and it started out, the very first thing was pretty bad – it was taking trees off the mountain. Took the topsoil off the mountain and then that soil ended up in the pond."
Managing Finnigan, said Heard, was like "trying to herd a bunch of cats."
"And it didn't get done and it didn't get done for a long time until it resulted in Pat having to resign. All I can say, Kate, is I'm terribly sorry," said Heard.
French said that as chairman and having been on the board the longest, he takes the brunt of the blame, saying he "should have seen it."
He said he was the one saying they did not need a project manager, that he made the project too simple in his mind. But this project was bigger in scale and scope than any the town had tackled before, and the fell out of the gate when the logging work went bad, followed by not keeping track of the change orders.
"I didn't push hard enough for the financials," said French. "I put too much trust in Pat. I hired her, it's her job, and I expected her to manage. We did some things that we shouldn't have. If we had a clerk of the works we would be talking like this. I know I screwed up and I don't know what else you want me to say, Kate."
"One consideration ought to be that none of you run again for this office," said Bates.
"I'm not running again Kate, I made that decision before you made it for me," said French.
"I'm not running again," said Heard.
"But I am," said White. "I look at it the other way. I am embarrassed. It is very bothersome to me that I didn't see any of the signs. And it's a wonderful opportunity to serve this town and I want to continue to serve it."
White said that it's easy to say, "Just step away," but he believes that in life, mistakes are made and life goes on.
"I believe that if you can stand the heat, you stay in the kitchen, if you can't, get out. I'm not ready to leave... Just to walk away because we made some mistakes is not the thing to do. We weren't the only ones I would call were hoodwinked. We had other audits over the past few years and that never caught any of this," said White.
White said they have a resident to thank for bringing the issue forward, "and that's what a small town is all about."
He also said that the Select Board has done "wonderful things" for the community."
"We have been part of some great innovations and I want to see that continue and this, we need to put behind us, we all need to put this behind us and say we can do a better job as a community," said White.
Smith then told the Budget Committee that she wanted to say something about processes and procedures. She wanted them to know that it's not that the town didn't have them, it's that the town strayed away from them.
Before she left, she said work that had started on the project, before the town had approved funding a portion of it, was paid for through a contract drawn up with the Foundation.
"The way to do business is to draw up a contract for the work being done," said Smith. "And you require those contractors to be insurance and bonded. It's just, it's one of those things that there is a reason you ask for those things. And if you fail to do that, you are putting yourself at risk. And unfortunately, with this project, everything that could go wrong, went wrong."
Few concerns about Snow Bowl’s budget
Moving to the Snow Bowl budget, Ward provided some statistics, including that the 2016-2017 season saw 60 days of operation, compared to 42 during the 2015-2016 season.
Opening day was Dec. 17 this season, compared to Jan. 1 last season; while closing day last year was March 6, compared to March 19 this year.
This season saw 52.8 inches of natural snow while last season had a paltry 22 inches. It should also be noted that 2016 was the lowest natural snow accumulation, compared to 121.5 inches in 2015, 72.6 in 2014, 57.8 in 2012, 31.3 in 2011 and 104.5 in 2010.
This season the Snow Bowl was shut down for four days due to bad weather, compared to nine days last season and 1-2 days each season going back to 2010.
Ward said that it's been determined that the Snow Bowl only ever stays in the black if they sell 10,000 day tickets for the season.
As the 2016-2017 season officially comes to a close at the Snow Bowl in about two weeks, the net income is showing just under $94,000.
Bates asked if that net income would go back to the town's General Fund, to repay net losses that the town voted last year to cover. She said the taxpayers would think it's a good idea to give that money back.
"The town had a history of maintaining a Snow Bowl deficit fund, and there was always a way to spend it," said Smith. "I inquired about keeping it at the Snow Bowl, putting it aside for a bad year, like you would do with a business. A couple of years when there was a lot of surplus, we still set aside for a rainy winter fund, and then also some into a capital fund that we had a plan for. This year, I still think we need to set some aside, however we have never been faced with as much of a surplus fund as this year and I'm not sure what the Select Board will do."
Smith said there is also debt service for a new groomer that was purchased, and that payment is not included in the budget, with the thinking the surplus would cover it.
"If you take that away and don't make the debt service payment with it this year, you will put the Snow Bowl budget $25,000 in the red coming out of the gate next year," said Smith. "Whether it's set aside for the Snow Bowl or the town, it's all in one cash account in the bank for the town."
Finance Director Virginia Lindsay said that as an enterprise fund, the Snow Bowl should have its own return on interest.
Ward said that the biggest difference between this year's budget and last year's is the overhead of wages and salaries, due to the change in personnel and roles, in administration and alpine.
There has long been in the budget director, assistant director and administrative assistant positions. More recently, the administrative assistant position has remained unfunded in the budget. This year, the assistant director position is not being funded but the administrative assistant position is, which pays less. The Director's position salary is also being cut.
Ward said that the budget again is based on a 60-day season, with a revenue for peak holiday days in the conservative range.
Committee member Etienne Perret noted the major difference in the Grants/Programs/Donations revenue line, which dropped from $30,000 in FY17 to $12,000 in FY18 and asked why.
"The Foundation often donates, and while Beth based her budget on previous [$27,000 was Ward's figure], my approach was to go conservative based on what else we are facing with the Foundation at this time," said Smith.
McKellar asked if there were more things the Snow Bowl can offer for free to residents, without significantly increasing costs to the town. She suggested opening the toboggan chute for free to residents as one idea.
"It would take labor to do that, "said Ward.
McKellar asked if volunteers could be trained to run the chute for this purpose, and Ward said the liability would likely be an issue with using people that have never run the chute before.
Bates asked if a discount could be added to day passes for Camden residents, like there are on season passes. She also asked if a surcharge on day tickets to non-Camden residents was an option.
Ward wasn't inclined to go with either option. And the committee was told that the Select Board made the final decision on the ticket prices, after working with former Snow Bowl Director Landon Fake.
"One thing you all need to know is we operate under a process. No matter how out of skew it is, if you present it properly it will be handled properly. When the rates get to us, they have already been through the Snow Bowl Director, now the Four Season Committee, Parks and Recreation, the Town Manager and then to us," said White.
Smith concurred, and said that it's normal procedure that most items get vetted through the departments and the department heads before they go to the Select Board.
McKellar asked who else had reviewed the budget before them.
"The Four Season Committee reviewed it and endorsed it," said Laidlaw, who also serves as chair of the Four Season Committee.
Smith said that another change in the budget is in the rental shop. In the past, the budget included a management fee to provide staff to manage the rental shop. She said it was felt that it would be more economical and effective for the Snow Bowl to manage those employees. To cover that cost, $18,000 for part-time employees is now in the Rental Shop budget, a line that has been unfunded since 2014. That figure is nearly balanced by the removal of the $20,000 management fee put into last year's budget.
Smith also noted that the town agreed to purchase new snow guns, which ended up being deemed inappropriate for the conditions at the Snow Bowl. They were traded in for different ones, and she said Fake signed a purchase agreement for $46,000 that included a $5,000 deposit and obligations to make a $20,000 and $21,000 payment July 1, 2017 and 2018 respectively.
Those guns, said Ward, are up for sell as the plan for the company to sell them to another customer fell through.
After two hours and 10 minutes, Laidlaw made a motion to approve the $874,000 Snow Bowl budget, which McKeller seconded. The vote passed.
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