Rec Center Budget Amendment Draws Pointed Criticism at Council Table

In the last meeting of the fiscal year, the Saline City Council increased its general fund expenditures by $800,000, water expenditures by about $900,000, and wastewater treatment plant expenditures by $42 million.

What council would not do, however, is increase its general fund contribution to the Rec Center by an additional $70,000.

Councillor Dean Girbach motioned to separate the Rec Center amendments from the others. That motion passed 5-1. (The giant increase in the wastewater treatment plant project will be balanced by lower costs this year.)

Treasurer Sarah Finch said the late budget amendments were out of an "overabundance of caution" in the event that revenues do not meet the city's projections.

"Director (Sunshine) Lambert has done a significant amount of work to lower expenditures," Finsch said. "We've done a lot of work here to accommodate the ongoing equipment and facility needs. Operationally, they are really putting pen to paper to limit spending where they can."

Finch said the budget increase was necessary to ensure the fund would not end the year with a deficit. She noted that if the Rec Center did have a deficit, the Rec Center fund would only take what was needed. For example, if the shortfall was 20,000, it would not take the full $70,000.

City Manager Dan Swallow echoed Finch's comments.

"I think it's critical not to incur a fund deficit," Swallow said. "I think the Rec Center has done a great job at reducing expenses where they can, and I think this is a reasonable approach to go forward."

Councillor Janet Dillon questioned whether some amendments were cost-cutting or whether they were cost-shifting to the general fund. For instance, the Rec Center is saving $60,000 in IT costs. The work continues to be done, but the payment no longer comes from the Rec Center budget.

Finch said she's had questions about the cost under the Rec Center budget.

"Since I've started, I thought the 60, 000 allocation to the Rec fund is pretty substantial for the IT needs they have. So we are really reevaluating the method of cost accounting that we're using," Finch said.

Then Dillon asked the big question.

She noted that the city has padded the Rec Center budget a few times over the years to avoid a corrective plan.

"At what point do we say the system is broken here? I don't want to see them fail, but the city cannot keep constantly bailing them out," Dillon said.

Girbach agreed with Dillon and took issue with the accounting.

"The reason why I took I (separated the Rec Center budget amendment) is, if we're going to do proper cost accounting, changing an IT allocation in the 11th month into a budget year, that's a big question for me," Girbach said. "Doing it at this time for me seems to be very much a concern in terms of how we do our accounting for our city."

Girbach said if it's a major issue, the city should go back and change its fund balances. Finch said these changes would be made in the future.

"The Rec fund obviously has a lot going on, so my job at this point is to make sure that this fund does not have a deficit at the end of the year," Finch said. "I am putting together the best amendments that I can to make sure we have a balanced budget at the end of the year."

Girbach asked if her proposal was meant to avoid a deficit and the resulting corrective action plan.

Finch said such a plan would require a lot of work for her and her staff.

"There is a significant amount of administrative work, as you will recall, with the deficit elimination plan for the sewer fund. It takes quite a bit of work for me and my entire team to take care of that on the back end," Finch said.

Some council members have been dissatisfied with the Rec Center data for at least a decade. Girbach noted that he sees a reduction in membership revenue anticipated this year.

 "This will be my fourth ask for membership numbers. The mayor has requested. I have not received that information. It was directed by council. At this point, I'm seeing that as a dereliction of duty," Girbach said. "It's clear that membership numbers are going down. I just want accurate, transparent information, and I am trying to make this clear.  I know everyone here is trying to make this Rec Center successful, but why is it so difficult to get the information I am requesting and to present accurate numbers? This just seems like no one wants to deal with the real issue."

Councillor Tramane Halsch said he was huge supporter of the Rec Center. But, he said, it's time for council to understand the issue. He asked council to imagine the city council was dealing with a losing football team.

"How many losing seasons should we tolerate before we start having conversations about the team and about the system?" Halsch said. "There comes a point where we have to say the system is broken. We need the information to determine how it's broken and where it broke down, not to assign blame, but to truly find a path forward."

Councillor Nicole Rice said the city is in a tough spot with the Rec Center. She said the budget amendments were an effort to get the city in a better place. Rice pointed at the unexpected expenditure of the $1.3 million Dectron unit.

"It's a shell game. Let's be honest. I completely agree with my colleagues that this sits on the shoulders of City of Saline taxpayers. But we are not putting the City of Saline taxpayers in a bad position by working hard to figure out how to make this Recreation Center work," Rice said. "This shell game right here, lessons have been learned and we understand how to budget better for next year."

Rice said she understands the concerns raised by Girbach, who worked in accounting.

"But the truth behind it is not that we're trying to steal money from the taxpayers or that we're trying to do something bad," Rice said. "We're switching money from one city service to another city service."

Rice said she hoped council might dial down its comments regarding the rec center.

"I personally would like to dial it down just a little bit for the public to know that we're not doing something nefarious. We're just fixing something we didn't properly anticipate," Rice said.

Girbach made a motion to approve the Rec Center budget amendments with the 11th-hour change in IT allocations. In addition, Girbach asked that council receive membership numbers even if they couldn't be presented before the end of the fiscal year. The motion was seconded by Councillor Jim Dell'Orco.

Council approved the motion by a 4-2 vote, with Girbach, Halsch, Dell'Orco and Jenn Harmount voting yes and Rice and Dillon voting no.

What's causing the deficit concern? Finch said that with eight days to go in the year, membership revenue is down by $22,000.

Dillon said City Council cannot asked to make these decisions so late in the fiscal year.

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