The first heat wave of summer sent Harvard families to the town beach in droves this week. They were greeted by Harvard’s youthful staff of red-suited lifeguards and teen parking monitors, managed by beach director Alexandra Luck. The beach house was open, floats and ropes were in the water, and swimming and boating classes for all ages were set to begin.
But this spring, the traditional July beach opening was in doubt, threatened with delay or outright cancellation as town officials and the Parks and Recreation Commission argued about the program’s viability. Disturbing revelations of past financial discrepancies prompted the commission to change the way it does business, while commission Chair Wyona Lynch-McWhite called for an audit of Parks and Rec finances, which will begin in August.
The business changes were made with less than a week remaining before the start of the new fiscal year. By a 4–0 vote at their June 25 meeting, commissioners Joe Reynolds, Steve Victorson, Doug Thornton, and Bob O’Shea agreed to drop the computer software traditionally employed to register users for beach offerings and to replace it with a new system on Harvard’s town website, one that connects directly to the town’s municipal finance system and accepts only credit cards or electronic checks as methods of payment. Lynch-McWhite, who had been skeptical of the change, was away on business.
Some programs have already been moved to the new system. As of July 1, residents must purchase beach parking stickers and register for swim and boating classes using the new software. (See this week’s Notice Board.) Registration for other beach offerings, including boat storage and fishing tournaments, will be added as quickly as possible, but not until later this summer. Eventually, registration for every program offered by the commission, including the Youth Track Clinic and the winter after-school ski program, will be handled in the same way. New Parks and Rec Commissioner Bob O’Shea, appointed by the Select Board in May, is managing the transition.
The software switch is the first in a series of steps the town and commission are taking to correct problems that have plagued the beach program for years and led Finance Director David Nalchajian, now in his second year, to question whether Parks and Rec brings in enough money to cover the cost of its beach programs. At the close of last year’s beach season, according to Nalchajian, the commission’s revolving fund, used to pay beach staff, was overdrawn by $11,000.
Parks and Rec commissioners have long been convinced, however, that not all the fees they collect are properly credited to the commission’s account. If the registration system used by Parks and Rec is to be believed, beach users signed up for $40,920 worth of services in 2017, but only $33,445 of that amount was collected. Moreover, according to Lynch-McWhite, the town has been unable to account for hundreds of 2017 beach stickers. She says commission records show that only 205 stickers were sold last year, in contrast, she says, to past sales of 600 to 700 stickers. Lynch-McWhite has stated that if, for example, 350 of the missing stickers were sold but the money lost—200 resident stickers, say, at $50, plus 100 senior stickers at $25—the revolving fund has been deprived of $15,000 it would otherwise have received.
The imprecision of these numbers has been exacerbated by the inability of either the commissioners or the town finance department to reconcile the data collected by their respective systems, a daunting manual task neither party has been inclined to undertake. Before July 1, users signed up for Parks and Rec programs using a third-party software package, LeagueAthletics, at the commission’s website. Payments made through that system were deposited to a third-party bank, Sage Bank, and then transferred to the town. When revenue was transferred from Sage Bank to the town’s MUNIS system, transaction details were lost and, as a result, there was no way for the town to know who had paid for what.
Former Parks and Rec treasurer Frank Culmone, who resigned this spring, said in an email that the commission has traditionally accepted payment by cash, check, or credit card, collected at Town Hall, the beach (while in operation), online, or through the mail. Ultimately, Culmone noted, the accuracy in coding these payments, collected in a variety of locations and handled by multiple staffers, demands a great deal of line-item manual accounting work, well beyond the scope of either Town Hall or a volunteer commission. The end result, he said, is a great number of inaccuracies. “Last time I looked,” he wrote, “roughly 30 percent of revenue was uncategorized.”
If it could be shown that the revolving fund should have been credited with an additional $23,000 in revenue in 2017, then there is reason to believe the program did pay for itself and could have finished the season with a small surplus.
“What we determined is that you really can’t trust the data,” Bragan said in a June meeting. O’Shea agreed, telling the Press “It’s the blind leading the blind.”
The Parks and Rec revolving account has been used since 1988, when a Special Town Meeting approved it, to pay the town’s lifeguards and beach-sticker checkers. Every spring and summer the fund is replenished with the money paid by residents for swimming and boating lessons, parking stickers, boat storage, and more. In theory, payments by Bare Hill Rowing Association and other organizations that use the beach should also be deposited there.
State law specifies that a revolving fund be self-sustaining and cannot spend money it does not have. But as of July 3, as the new fiscal 2019 year began, the Parks and Rec account had a negative balance of $49.26, according to Nalchajian, although he did not believe all fiscal 2018 revenues had been booked.
Assistant Town Administrator and Human Resources Director Marie Sobalvarro, in a projection prepared for the Press, estimates that beach staff will cost the town $53,834 this summer. That’s the amount that needs to be available in the revolving fund over the course of the 2018 beach season. The $15,034 salary of director Luck, however, is paid by the town, included as a line item in the omnibus budget, and does not require beach revenue. Taxpayers further subsidize beach operations with a $19,000 line item in the annual town budget to cover utility bills, dock repairs, and other expenses.
This spring, Nalchajian—referencing the alleged $11,000 shortfall in 2017—told the commission in an email that unless it took steps to make the town’s beach program self-sustaining, perhaps by adjusting beach staff schedules and raising its fees, he would not allow the lifeguards and other beach staff to be hired and paid, nor would he permit swimming and other classes to begin in July. A revolving fund cannot spend money it does not have, he has asserted in interviews. The Press has requested but not obtained a copy of the email. Parks and Rec commissioners have confirmed receiving it, however. “It happened,” Commissioner Joe Reynolds told the Press.
In a June interview, Nalchajian said that while he never intended to prevent the beach from opening, he felt the commission did not recognize the urgency of the problem. Commissioners have told the Press, however, that’s because the finance department could not provide them with the reports they needed to analyze staffing levels and determine whether class fees covered the costs of instruction. Without reports, they were unable to comply. With passage of the town charter in May, however, Town Administrator Tim Bragan is now responsible for hiring and paying beach staff, in consultation with director Luck. But he must comply with staffing policies set by the commission.
Bragan convened a meeting May 31 to deal with the months-long standoff. Present were Bragan, Sobalvarro, Nalchajian, Finance Committee Chair Don Ludwig, Parks and Rec Commissioner Reynolds, and Select Board liaison Stu Sklar. Lynch-McWhite was invited but unable to attend. Harbormaster Bob O’Shea, who was not a member of the commission at that time, told the Press he was not invited, but he decided to attend anyway so he could propose a solution.
The meeting was not posted, no minutes were kept, and no memo of understanding was distributed, but according to Bragan and O’Shea and others who were present, the group welcomed O’Shea’s proposal, which was to move registration and payments to a new vendor. Unipay, the replacement system, connects directly with the town’s accounting system, replacing LeagueAthletics and Sage Bank, the commission’s legacy registration and payment systems. The group also supported a weeks-old request by Lynch-McWhite for an audit of Parks and Rec finances to answer questions about the missing parking stickers and other matters. At a cost of $2,500 to $3,500, the audit will begin in August, conducted by Roselli, Clark and Associates, the town’s independent auditor.
Bragan and Nalchajian support the new system, which will ensure, they say, that payments made to Parks and Rec, whether for a parking sticker or a fishing tournament, are deposited directly to the commission’s revolving fund. Users must pay with either a credit card or an electronic check; handwritten checks and cash are no longer accepted. The new system promises better accountability for the money Parks and Rec receives from users as well as reports that will help the town and commission match beach income to programs. Were more boat mooring sold this year than last? Are swim lessons enrollments up or down? Now the town and commission will know.
Nalchajian says that with these measures in place, he’s willing to let this year’s program proceed.
But income and expense must balance by the end of the season, Bragan said in a June interview. “They have until August or September. We’re all trying to work together to make sure that this program that the town has had for years continues.”