OPINION: Beaches -What we thought we got in the 2023/2024 budget
On April 5, 2023, a 2023/2024 budget for the Beaches was presented to the Board of Trustees. The revenues were projected at $1,032,300 and consisted of five main areas
1) Food and Beverage revenues are $380,900 with expectations that operating profits will be $81,465 or 21% of revenues. Incline Spirits could not make a go of it last season, yet, IVGID staff believes they can knock the socks off. I doubt that will happen.
2) The Bars will be leased to Incline Spirits and the rent paid IVGID will be $51,800.
3) Rentals for kayak racks and the boat ramp is projected to generate $210,000 in revenues with no expenses.
4) There are 16 Aquatic programs – 3 are lifeguard camps, 5 other camps and the balance are paddle board lessons . Revenues are projected at $140,000 but expenses are not disclosed
5) Revenues from Admissions are only $228,200. Most beach visits are free by using Resident Passes or punch cards. Running the admissions consist of many types of expenses. The largest are Hosts for $308,000, Central Service Costs of $234,000 and Services and Supplies of $196,000.
Park maintenance has no revenues but the expense budget is $830,849 or $5,400 per day.
Total expenses exceeding revenues excluding any capital projects will be $1,282,000 and funded by the annual Facility Fees paid by property owners. Bad or Good?
What we got instead
In the Tentative Budget (Form 4404LGF) filed with the State and approved by the Board on April 12, 2023 had all revenues s equal EXCEPT the admission revenues were increased by $664,800 or 3 times what was presented one week earlier. This increase, assuming an average entry fee of $12, would mean an additional 55,000 people will storm the beaches. Why? Who came up with this? Is this fake in order to reduce losses?
Suddenly, Central Service Costs were lowered by $95,000 with no explanation.
As to staffing needs , Management has indicated that full time equivalent employees will be reduced from 21.3 to 15.3 because of the inability to staff lifeguard stations. At the same time, Management intends on staffing food and beverage venues. It would seem logical that employees would be added. Why no lifeguards at the beaches when 3 training camps are being provided to train life guards?
Interest income from investments was increased by $85,000 because the public requested Management to invest the $6.7 million sitting around waiting for construction of a new Incline Beach building which will be lucky to get started within two years. The budget for 2023/2024 is only $4,000,000 for the building but Staff’s first pass at design was over $6 million. So back to the drawing board. Nothing will happen for several months no one seems to know what should be designed. A survey was just done to ask property owners for input.
Budgeting seems to be an ongoing problem at IVGID with little rhyme or reason. Just numbers on paper.
The author, Cliff Dobler, is a long-time resident and property owner of Incline Village and a registered voter.
Interesting that they forecast more beach entry revenue suggesting greater attendance. Remember that our beaches will be smaller due to high water line so more entries mean more crowding.
Agree, the budgeting process and/or inconsistencies are troubling.
It does feel like a hand sliding into our back pockets. Thanks for bringing this to our attention
Budgets should be based on past revenue not forecasts which are rarely accurate.
Most budgets for both government entities and private businesses use estimates not the prior year’s numbers. Otherwise they wouldn’t be budgets so much as putting a new date on last year’s financials. But the forecasts should be grounded in reality, which is often not the case for IVGID.
Excellent analysis, but what can be done to obtain a public explanation by the IVGID Board for the gross inconsistencies relative to the initial budget. The massive increase (55,000) in the number of fee-paying persons for beach entry suggests more beach usage by non residents. Do we want this?
IVGID Cannot magically get 55,000 more people out of thin air. I’m guessing someone got creative with excel spreadsheet to make numbers look good. Whatever the historical number are, that’s how many will visit.
The only other explanation is to increase fees to create more revenue, assuming that demand is constant despite higher fees.
Good stuff Cliff! As always, you are spot on & correct in your facts and analysis. Hopefully residents of Incline Village will listen to you.
The punch cards are also paid separately by the owners for additional revenue then deducted entrance fees. Since they’re non refundable and expire on May 31 (is that even legal?) they basically get free extra revenue when the punch cards are not fully used….