Board Scrutinizes First Draft of Killington Budget

Board Scrutinizes First Draft of Killington Budget 

12/8/16

By Curt Peterson

Standard Correspondent

KILLINGTON — The town-owned Green Mountain International Golf Course presented another wrinkle resulting from Killington’s change from a calendar year to a fiscal year. The select board invited William Hall, an accountant with R. H. R. Smith & Co. of Buxton, Maine, to come and explain their options regarding their audit of the two entities.

When the town and the golf course were both operated on a calendar year they were audited at the same time and appeared as one report. But the town opted to have a one-time eighteen-month budget year in order to align with the New England Municipal Resource Center fiscal year accounting system. The Board decided to leave the golf course on a calendar year basis because of its seasonal nature – on June 30, the end of a fiscal year, the golf course will have had most of its expenses and very little of its revenue. It was thought that December 31 would give a more accurate picture of its financial year.

Now, faced with their first June 30 audit, the select board has to choose – should they audit the golf course effective June 30, or effective Dec. 31?

The last Green Mountain audit was done Dec. 31, 2015 – the last town audit was done December 31 2014.

Hall recommended two audits, one calendar-based for the golf course, and the other a fiscal year audit for the town. He explained this would require moving two assets, one a reserve fund set up for a golf course debt balloon payment due in 2022, and another for capital improvements, and the golf course’s debt out of the town’s accounting results.

“We will have to provide an ‘adverse report’ in the town audit,” Hall said, “which means there will be a note stating the figures pertaining to the golf course, that had been reported as part of the town’s audit in the past, are not included and have not been audited as of this date.”

He said the note would also offer an explanation as to why that was the case. Ironically, he noted, a “qualified report” is much worse, in accounting terms, than an “adverse report”.

The board voted to accept Hall’s recommendation — and Town Manager Deb Schwartz agreed to engage the Smith firm to complete the separate golf course audit as of Dec. 31.

Schwartz announced that the first draft of the town budget for 2017-18 indicates an increase over interpolated previous 12-month figures by 8 percent.

“Some of the increases,” she said, “are caused by adjustments for underfunding in previous budgets.”

She cited as examples, legal costs and workers compensation insurance. On closer examination the Board decided to trim the legal budget estimates considerably from the $40,000 Schwartz had calculated using last year’s expenses and what she considered “possible future obligations” involving an ongoing lawsuit against the Select Board by resident M. B. Neisner.

Selectman Chris Bianchi pointed out $5,400 of last year’s legal costs

were for negotiations regarding Schwartz’s employment contract, and much of the contingent fees she had included for the Neisner suit were unnecessary.

“The law says if we exceed our budget on any expense during the year, we must make it up in the subsequent year’s budget,” he said. “We can’t charge the taxpayers for unexpected expenses we may never incur.”

“And I assume we are not going to be spending any more legal fees on your employment contract,” he added.

Another large increase occurred on the line item for “property and casualty insurance”, which appears to have gone from $37,000 to $67,000 from last year to this year. Schwartz had no explanation other than that she and others had reviewed building values and exposures with the insurance carrier prior to receiving the cost estimate. The town is insured by Passive Insurance Co., as provided through the Vermont League of Cities and Towns. Most Vermont towns use this carrier.

Select board chair Patty McGrath thought the appearance of such a large increase might have something to do with the 18-month budget. Schwartz agreed to discuss the increase with VLCT insurance representatives.

Bianchi made an impassioned plea to include $100,000 of revenue from the options tax as a town sponsorship for the effort to bring the FIS World Cup Women’s Ski Races back to Killington next year. He said it’s an appropriate way to invest the tax funds, which are meant to support local businesses.

“This year’s event was a huge success,” he said. “Killington businesses benefitted significantly. If we can help bring the same result next year I think it would be the right thing to do.”

McGrath said Mike Salimano, president and CEO of Killington Resort, told her the event had a bigger negative financial result than they had expected, and he worries they can’t afford to lose that much every year. She thinks in that light Bianchi’s suggestion is a good idea.

“The options tax covers 20 percent of the town’s budget every year,” she said. “The money comes from work and services provided by our local businesses, and their success is what we should be investing it in.”

Bianchi acknowledged that the voters might turn down the investment at Town Meeting, but he thinks it should be proposed.

“Just a few years ago the people in town said it was high time for the Resort to show some action and not just words,” he said. “Well, now the Resort has stepped up with action and it’s time the town did the same.”

Comment: Has the Selectboard lost their minds? We're facing an 8% increase in the budget and they want to fork over $100 grand to the resort. WTF!! The resort spent the money full well knowing the benefit from the World Cup was not immediate profits from the event itself but from the international and media exposure it received from it. This in turn stimulates demand for its services and provide long term financial reward. 
And how much did the town spend on supporting the event itself this time?
SELECTBOARD STOP IT, QUIT TRYING TO FLEECE THE TAXPAYERS!!!