Finance director outlines fixes to 204 building revolving fund, recommends FY28 changes

Finance Director Jennifer Mintz told the Select Board that the 204 Cultural Arts Municipal Building’s revolving fund was not failing on revenue but on being asked to carry building ownership costs that should be borne by the general fund.

"The fund's major problem has never been its revenue. Instead, it was the cost that landed upon it," Mintz said, tracing how utilities and other base costs shifted into the revolving fund around fiscal year 2021 and led to structural deficits despite steady rental income.

Mintz presented a framework to correct the imbalance: designate 35% of building costs as a base ownership load paid by the general fund and treat the remaining 65% as program-driven, to be shared among the departments that use the building and the revolving fund. Applied to FY27 projections, Mintz said that allocation would make the fund’s net program costs close to projected net revenue, effectively allowing the revolving fund to “break even on its own program driven activity.”

She recommended four actions: reclassify an incorrectly posted FY17 revenue item, document the utility history for accounting transparency, split the cultural affairs director’s salary 50/50 between general fund and the revolving fund starting in FY28, and implement the 35/65 allocation in FY28 as part of the budget cycle. Mintz stressed that two immediate technical corrections (the FY17 posting and the recreation revenue misallocation) can be handled now, while the substantive reallocations should be scheduled through FY28 budget appropriations.

Board members commended the clarity of the analysis and asked practical questions about how gym usage and recreation program revenue would be calculated; Mintz said allocations were derived from square footage and programming percentages and recommended annual review to ensure the allocation stays accurate as programming changes.

Town Administrator Jay and other Select Board members noted the FY28 timing is required to ensure appropriations are correct and that changes will affect how some municipal departments are charged moving forward. The board directed staff to return with the FY28 budget language, a clarified spending-cap proposal for the next town meeting, and follow-up calculations on recreation revenue and gym allocation.