Mountain Times
May 9, 2018
By Julia Purdy
The
Killington Select Board has begun the process of unraveling several
financial knots. Unlike the Gordian Knot, which Alexander the Great
simply cut through with his saber, thus astonishing the world,
Killington’s financial knots must be analyzed, untied and backed out,
one by one.
The bulk of the Killington Select Board meeting
Tuesday, May 1, concerned financial reports and updates from the interim
town manager, Chet Hagenbarth. Handouts included the treasurer’s
report, budget status summary, a report comparing budgeted with actual
revenues and expenses for FY2017 and FY2018 (ending June 30, 2018), and
an operating note/cash flow analysis.
The Select Board members also worked from a detailed, multi-page budget status report, available at the town office.
The
knottiest challenge for Killington concerns debt. Several items have
drained the general fund in recent years, leading to the need to borrow
operating funds.
The cash flow analysis handout showed a present
negative cash balance of $736,236, with general expenses totaling
$801,461 between now and Aug. 1. Hagenbarth attributed the shortfall
partially to a $250,000 loan recently made to Green Mountain National
Golf Course.
Other pressures on town resources include a sharp
jump in appropriations, namely, an increase of $31,000 in the Rutland
County tax, from $62,000 to $93,032, due in the fall. Hagenbarth said
that he is investigating ways to better plan for that.
Shoring up
the pro shop at the golf course has been problematic as well. Hagenbarth
reported on a draft audit showing the golf course lost net operating
income $1,795, directly tied to loss in revenue, although expenses were
slightly lower in 2017.
Hagenbarth said the goal is for the golf
course to repay $250,000, authorized at a Select Board meeting on April
17, before the end of the year. He said People’s United Bank is open to
setting up a revolving credit line for the golf course as of, Jan. 1,
2019, to avoid such a “crossover” of funds in the future.
The
biggest hole in town finances has been caused by the refusal of FEMA to
reimburse for Irene debt — the cost of bringing two culverts, destroyed
by Tropical Storm Irene, up to new state standards, rather than just the
cost of restoring them to their prior condition. The town has cut
deeply into its unassigned (reserve) fund to cover the gap, resulting in
a net cash balance of $97,000.
Hagenbarth quoted directly from
the last year’s audit, which states that the unassigned fund balance has
fallen below the town’s ability to sustain government operations for
two months, although the town continues to maintain significant reserves
for future operations capital.
People’s United Bank and the
Vermont Municipal Bond Bank, he said, have both said this needs to stop,
“in no uncertain terms. … We need to have close to $1 million in
reserves,” he said, explaining that part of that $1 million includes
taking care of the Irene debt, and about $700,000-$750,000 is needed for
reserves to cover 60 days of town operations.
In light of these
facts, Hagenbarth asked the Select Board for authorization to apply to
the Vermont Municipal Bond Bank for an operating note of slightly over
$1 million. The unassigned fund balance that was used to pay FEMA would
be written off from tax receipts, and the reserve fund would be brought
up to a level that will “make the lenders happy” by allowing surplus
year-end funds to remain “untouched.”
Jim Haff, Select Board
member, clarified that excess year-end funds must either be rolled over
to lower property taxes or be used to set up a reserve fund. “What we
need to do is set up that fund,” he said.
McGrath stressed the requirement to get permission from the voters for a specific purpose other than lowering taxes.
Haff
hastened to point out that no definite tax rate is being set but that
this would be a general plan. He made a motion to approve the town
manager to go ahead with the application for the $1 million operating
note. The motion passed unanimously.
Tax sale letters sent
In
the manager’s report, Hagenbarth said that notices have been sent out
for tax sales of properties delinquent in 2016 and prior.
Clerk-Treasurer Wonsor added that the redemption period adds another
year of delinquent taxes, depending on the date of the tax sale. No date
has been set.
Select Board Chair Steve Finneron said that the
“first option” for delinquent taxpayers is to set up a payment plan,
which can avoid a tax sale.
Grants
Hagenbarth
announced a grant of $43,000 for bike trails toward a total cost of
$83,000, with a $20,000 match from the town of Killington and the rest
coming from the USDA Forest Service, and the Killington Mountain Bike
Club.
The Vermont Agency of Transportation wil llikely approved a
grant for bridge reconstruction on Archie Baker Road, obligating the
town for $30,000 on a matching basis.
