Does the Town make a profit on the Dockside Restaurant Lease?

I was hoping that the Selectmen would discuss certain agenda items in more detail during the April 4, 2012 meeting and submitted my questions for the Board to the Town Manager. However, he graciously answered my questions, so I wouldn't need to take the time to ask them at the meeting. 

I was surprised to learn from our correspondence that our Town government doesn't track the expenses of owning Dockside closely enough to know whether or not its monthly rent of $3,125/month actually produces a profit or loss.  Unlike, Pop Whalen or the Municipal Electric department which are set up as enterprise funds. 

Which raises the question of why aren't all revenue producing properties, like Dockside restaurant and the Railroad Depot, set up as an enterprise fund or at least having their costs accounted for closely enough to know whether they produce a profit or loss?   Certainly, there are limitations to running a town (municipal corporation) like a business, such as providing safety services that produce no revenues.  However, rental properties certainly seem appropriate to hold to business standard of whether or not owning them is producing a profit or loss (surplus or deficits) to their owners, the taxpayers.  Perhaps the Board of Selectmen will put this on thier to-do list for this year.

Below are excerpts from my e-mail with the Town Manager pertinent to the Dockside Lease:

My questions reference Dockside Lease Agreement
 Approval: Lease Agreement with Garwood's for Dockside Restaurant Facility.  Please provide the basics of the lease being approved, how long is the lease for, what is the monthly rent amount, what is the expected profit from the lease. 

Mr. Owen's Reply:
As per Article 29 of the 2011 Town warrant, the new lease is for 5 years, with a 5-year optional extension, or 10 years in total.  Under the new lease, the monthly rent will start out the same as under the old lease ($3,125/mo), but will then be adjusted each year in December going forward by an amount equal to the Boston CPI (Consumer Price Index), so that the lease revenue will no longer be a stagnant amount, but will increase each year with the rate of inflation.  There is no profit from the lease, as municipalities do not make profits.  The lease presently generates a revenue of $37,500/yr, which goes into the Town’s general fund, and which closes out to the surplus (undesignated fund balance) that the Town uses to offset a portion of the tax rate each year. 

 My follow up Questions to Mr. Owen,

As to whether the Dockside lease makes a profit

1) Is there a law that says a municipality cannot make a "profit," or, in other words. make more from a lease than it spends on the expenses of owning and leasing out restaurant? 

2) Perhaps, I should reword my question.  Does the rent charged cover all of the Town's expenses inherent in being the landlord of a lakeside restaurant. 

3) Reporting the rent simply as a revenue stream makes it sound as if there are no costs associated with the restaurant, when there are the costs of maintenance of wear and tear items, updating for ADA accessibility, etc. that go with the Town owning a lakefront restaurant building. 

4) So what is left of that revenue stream once the expenses of owning the building are subtracted and what costs are being included in your calculation?

Mr. Owen's Reply

Mr. Bickford:  When I say that municipalities don’t make profits, it is because the term “profit” pertains to private businesses, as the amount of their revenue that accrues to the benefit of the business owner or the stockholders.  Municipalities make surpluses (or deficits). 

I cannot tell you precisely how much of a surplus that the Dockside restaurant generates, because we do not have it set up as its own fund, like the Pop Whalen Arena or the Electric utility, so that we can capture all the costs associated with it.  What I can tell you is that the Town has already made the investments in the last couple of years  to provide the ADA-accessible bathrooms there and to make a number of other improvements to meet code compliance standards, so we do not anticipate that there will be many large-scale expenditures required by the town over the period of the proposed 10-year lease.  The revenues to be realized by the town over the 10-year term of the lease will be in excess of $300,000.  It is hard for me to conceive how the Town would have to spend anything close to that amount on maintenance over 10 years, unless the building is damaged by fire or natural disaster and needs to be dismantled and reconstructed , in which case the Town’s insurer would probably be involved in helping to finance its reconstruction.  Dave Owen

http://wolfeblog.com/ A conversation on Wolfeboro Politics

If you haven't had a chance to visit Bob Lemaire's blog "wolfeblog.com" on Town Politics, Home Energy and Brewster Memorial Hall, you owe it to yourself to read it.  It provides an excellent reality check to the hyperbole that is passed off as fact each year just before the town elections.  Bob even includes links to the documents he is writing about. 

Take a look at all the postings and commentaries from such well known folks as Bob Tougher of the Budget Committee and John Linville.  Bob Tougher was considerate enough clarify a point on tax rates and Bob Lemaire was gracious enough to admit his mistake.  This is the best place I've found for civil political discourse on the Town of Wolfeboro. 

Whether or not you agree with Bob's past or present positions on issues, you'll find his blog to be a great education. http://wolfeblog.com/

Wolfeboro Deputy Fire Chief Completes National Fire Academy Executive Fire Officer Program

Wolfeboro Deputy Fire Chief Thomas J. Zotti entered an elite corps of less then 3,000 graduates upon completing the four year Executive Fire Officer Program (EFOP) at the U.S. Fire Administration’s National Fire Academy in Emmitsburg, Maryland this spring.  The EFOP is designed to provide senior officers with the ability to transform fire and emergency services organizations from being reactive to proactive; with an emphasis on leadership development, prevention, and risk reduction;  to conduct and apply research to their departments;  and to enhance their executive-level knowledge, skills, and abilities needed to lead achieve needed changes.

The EFOP consists of four bachelors degree and/or graduate level courses two weeks in length spanning a four year period.  An equally important part of the EFOP are the four Applied Research Projects (ARP) relating  to their fire department required in addition to the four core courses. 

The first course “Executive Development”  focuses on developing effective management and leadership skills for fire officers as they make the transition from manager to senior executive.  The second course “Executive Analysis of Community Risk Reduction” focuses on the executive fire officer as the leader in community risk reduction, assessing community risk, developing a draft plan for a local risk reduction initiative and applying change management models and addressing organizational politics.  The third course “ Executive Analysis of Fire Service Operations in Emergency Management” is a comprehensive  course covering among other topics risk assessment , incident  documentation, media/political considerations, standards, legal mandates, capability assessment, damage assessment, emergency operations, integrated Emergency Management System, Emergency Operations Center and emergency operational readiness. The final course “Executive Leadership” emphasizes the practical application of the skills learned in the prior courses.  The applied research projects of each student are archived for distribution  at http://www.usfa.fema.gov/lrc.

Governor proposes cutting $1.3 Million in Aid in 2012 for GWRSD Building Projects

Wolfeboro: Articles in the Fosters Daily Democrat and the Concord Monitor newspapers examine the effect of Governor Lynch's proposed $1.3 million cut in building aid for GWRSD renovations including those at Kingswood Regional High School in Wolfeboro, NH for the year 2012. The Governor Wentworth School district includes the towns of Brookfield, Effingham, New Durham, Ossipee, Tuftonboro, Wolfeboro.

http://www.fosters.com/apps/pbcs.dll/article?AID=/20110220/GJNEWS_01/702209903

http://www.concordmonitor.com/article/249075/no-title

Court Rehears Wolfeboro Firefighters' Case

Having granted the Wolfeboro full-time firefighter's Motion for Reconsideration, the Superior Court is holding a hearing today, March 30, 2011, to reevaluate part or all of its prior decision to uphold the Wolfeboro Board of Selectmen's actions rescinding recognition of the firefighters' union as a collective bargaining unit. The granting of the motion for reconsideration means that the court has agreed to reevaluate part or all of the matter based on a different analysis of the issues already heard or a consideration of further facts or points of law not available at the time of the original decision. A motion for reconsideration is only granted when there is a clear basis for concluding that the court has overlooked, been unaware of, or misunderstood some significant point of fact or law that could change the decision or decree.

Article 12 Recount: Mislaid Ballots Found, Numbers Change, But Article 12 Still Doesn't Pass

The numbers announced after the Article 12 recount proved to be wrong, but irrelevant to the final defeat of the bond Article 12 to renovate Brewster Memorial Hall. The numbers initially announced after the recount showed a 41 vote drop in Yes votes and 52 vote drop in the total votes cast for Article 12. The initial recount showed 1001 yes votes and 717 no votes bringing the percentage of votes in favor of the renovation down to 58.2% or 1.8% short of the 60% majority required for a bond article. The 1001 yes votes was a 41 vote drop from the original count of 1042 Yes votes and the 717 no votes was an 11 vote drop from the original 728 No votes. The election day count showed 1770 votes cast for Article 12 and the recount showed 1718 votes cast: a drop of 51 votes from the election day count. Town Moderator Randy Walker deemed 25 ballots to be blank, three to be void, and one to be an over-vote. However, only yes or no votes are counted when determining the majority of votes. After the moderator announced the recount numbers, several members of the public and of the recount committee left

However, Moderator Walker stated that after he announced the recount numbers, he and other members of the recount committee were bothered by the obvious disparity between the election count and the hand recount and so they decided to recount the votes again. Moderator Walker stated that, on one hand, it’s common to pick up additional votes on a hand recount because the electronic ballot counter disregards some ballots for any number of reasons, such as someone starting to fill in one bubble and then filling in the other bubble. However, on the other hand, it is rare to come up with fewer votes on a hand recount than were electronically counted, which caused him to investigate the disparity further. After two more hand recounts revealed the same disparity, a search revealed that some Article 12 ballot pages had been misplaced, after being separated from the other two ballot pages. Luckily, at least two members of the public had stayed and witnessed the final recount, which produced 18 additional votes. The final tally is 1044 Yes votes and 744 No votes or 58.4% in favor: still short 1.6% of the needed 60%.

On March 10, 2011, ten voters presented the town clerk with a request for the recount of the votes for Article 12. The Town Clerk scheduled the recount for March 15, 2011 and posted a notice the day before, on at least the town website. The moderator appointed a committee of 10 to recount the ballots including Selectmen Murray and Silk, budget committee member Stan Stevens, and election official Laurie Jones. Town Moderator Randy Walker assisted by Town Clerk Pat Waterman supervised the 10 counters. The ballot counters separated the ballot page for article 12 from the other two pages of the ballot and then separated the Article 12 pages into piles of Yes votes, No votes, Blank votes, Void votes and Over-Votes (both yes and no bubbles filled in). The ballot counters counted the Yes and No piles, reaching the final number once the missing ballots were found and added to the count. Members of the public witnessing the recount included Joyce Davis, Bob Lemaire, Suzanne Ryan, and Alan Kasiewicz.

Recount of Votes for Article 12 Brewster Memorial Hall

There will be a recount of the votes cast for Warrant Article 12 the Renovation of Brewster Memorial Hall on this Tuesday, March 15, 2011 at 8:00 am in the meeting room of Brewster Memorial Hall.