Culture, Parks and Recreation Commission Special Revenue Fund Sub-Committee Minutes - 11/30/2016
TOWN OF SIMSBURY – CULTURE, PARKS, AND RECREATION COMMISSION
SPECIAL REVENUE FUND SUBCOMMITTEE – Subject to Vote of Approval
Special Meeting Minutes – Wednesday, November 30, 2016 – 2 pages
Call to Order
The meeting was called to order at 5:31 p.m. in the Town Hall Main Meeting Room by Gerry Wetjen,
C. P. & R. Commission and SRF Subcommittee member. Other SRF Subcommittee members present included Rob Pomeroy, Jr. and Linda Schofield from the Board of Finance; Mike Paine and Sean Askham from the Board of Selectmen, and David Bush, chairman of the C. P. & R. Commission. Sean Kimball, director of finance/treasurer, and Gerry Toner, C. P. & R. director, were also in attendance.
Special Revenue Fund History
Mr. Toner explained that prior to 1999, the entire budget for the C., P. & R. Department came from the town’s General Fund. In 1999, the Board of Selectmen set up the Simsbury Farms Special Revenue Fund to provide a solution to the continued deficits at the Simsbury Farms Recreation Complex. Its purpose was to account for all the revenues made and expenses incurred at the SFRC. The Memorial Pool budget, however, remained in the General Fund because it was not part of the SFRC. A few other expenses which should have been in the SRF, such as golf course equipment maintenance, also remained in the General Fund.
Mr. Toner noted that this seemed to be the right solution at the time, and for the first 10 to 12 years, the SRF was relatively self-sustaining. The following years, the SRF has been financially unstable, and in the last three years, it has been running a deficit budget. This is due to many factors. Beginning in 2010 P & R Department expenses—even those that are not related to the SFRC—were shifted out of the General Fund Budget and into the SRF. Unlike SRFs in other towns, which only pay for seasonal, part-time employees, Simsbury’s SRF started off paying 50% of the full-time, year-round director and administrative assistant’s salaries, and 50% of their fringe benefits. In recent years the SRF has been paying 70% of their salaries and 100% of their fringe benefits, in addition to the salaries of full-time, year-round recreation supervisors and P & R maintenance staff. All these expenses have put undue pressure on the town’s recreation programs, including the golf course, to be revenue producers instead of town services.
The C. P. & R. Department has made every effort to cut expenses and raise fees on activities, without pricing themselves out of the market or cutting back on safety. But even these strategies have not completely solved the problem. Outdoor recreation activities will always be weather-dependent, so income and expenses will never be consistent. In addition, fiscal year accounting (July 1 to June 30) splits camps, aquatics and golf budgets into two separate reporting years. So the timing of these receipts and payments will always impact year-over-year financial results.
Previous SRF Subcommittee Action
The previous SRF Subcommittee formed in early 2014 to serve as a deficit mitigation team for the SRF.
After many meetings, it decided to have the town subsidize the C. P. & R. Department in the short-term, and then find a better long-term solution. It agreed to a $90,000 subsidy from the town for FY2015/2016, in exchange for taking the ‘golf course equipment maintenance’ line item out of the Capital and Non-Recurring budget. To raise funds for golf course equipment maintenance, members voted unanimously at the January 2015 C. P. & R. Commission meeting to approve adding surcharges to outing fees, season passes and daily greens fees for both resident and non-resident golfers. After providing this stop-gap solution, the previous SRF Subcommittee was discontinued before offering a long-term solution. The mission of the newly formed SRF Subcommittee is to find a long-term solution.
Culture, Parks and Recreation Commission Recommendation Report
Prior to this meeting, Mr. Toner distributed Mr. Wetjen’s 13-page report to all SRF Subcommittee members: “Recreation Funding: Simsbury Farms Special Revenue Fund History and Analysis / Recommendations for the Tri-Board Revenue Fund Committee / Culture Parks and Recreation Commission / October 2016.” Subcommittee members discussed the recommendations and several different options.
If it is running a continued deficit, it was noted that the SRF should be shut down. The SRF could be dissolved, and the entire C. P. & R. budget could be transferred into the town’s General Fund. This would raise the Board of Selectmen’s budget and raise taxes. As a result, C. P. & R. line items would be subject to greater scrutiny.
Take all—or a reasonable portion of—the full-time salaries and benefits of the C. P. & R. staff out of the SRF so that the SRF might have a chance to be self-sustaining.
Take just the golf course budget out of the SRF, and transfer it into an enterprise fund. As defined on the web site, http://www.municipalconsultants.net/enterprise_fund_accounting_systems.a... enterprise fund establishes a separate accounting and financial reporting mechanism for municipal services for which a fee is charged in exchange for goods or services . . . Generally, a town may adopt an enterprise fund with approval by a town meeting . . .” Another web site describes it this way: “In governmental accounting, [an enterprise fund] is a fund that provides goods or services to the public for a fee that makes the entity self-supporting.”—https://www.allbusiness.com/barrons_dictionary/dictionary-enterprise-fun....
After the discussion, all members agreed that: a. The SRF paradigm is not working efficiently; b. A long-term solution would come down to what the Boards of Selectmen and Finance are willing to digest for the next few fiscal years, and c. More financial analytics were needed to make an informed decision. Mr. Kimball agreed to run some numbers and investigate different financial scenarios. He will see how the town’s debt service and bond rating would be affected, and check with the town attorney and auditor.
Other Business
Mr. Askham noted that an overall plan for the maintenance of the town’s Open Space should be considered. Subcommittee members felt that it was an important C. P. & R. topic, but one that should have its own special meeting. Mr. Wetjen added that funding for all Parks, Recreation and Open Space needs to be looked at in its entirety—either by this subcommittee or by the Board of Selectmen.
Adjournment
Mr. Askham made a motion to adjourn the meeting. Mr. Bush seconded the motion. All were in favor. The meeting was adjourned at 6:23 p.m.
Next Meeting
The next meeting of the SRF Subcommittee will take place in mid-January 2017. Date TBD.
Respectfully submitted,
Lorrie McElligott
Commission Clerk