TOML STRUGGLES WITH MATH
The Mammoth Arts and Cultural Center (MACC) project has uncovered a few problems hiding behind the walls of the existing Edison Theatre, and fixing them could cost the town $900,000.
Town Manager Rob Patterson revealed the problems during a budget presentation to the Mammoth Lakes Town Council on Wednesday, when he recommended $2.5 million in additional funding for work associated with the MACC and Edison Theatre. The council approved the budget adjustment 4-1.
About $900,000 of those additional funds would go toward work on the existing theatre after construction exposed previously unidentified structural problems, including rot.
Patterson said the problems became apparent as the town began connecting the new MACC to the existing Edison Theatre.
The town took over the theatre from the Mammoth Lakes Foundation, which had completed some construction work on the building before the MACC project began.
“A lot of structural elements and problems were uncovered,” Patterson told the council. The issues, he said, included rot and other problems that made a “significant redo” of the building necessary.
The additional MACC funding also includes architectural change orders and added costs for building management, security and access, and signage.
But that’s not all…
That wasn’t the only expensive oversight revealed in Wednesday’s meeting.
Patterson said the town also made mistakes in its salary and benefits budgeting during the previous budget process, errors that should have been caught during the budget review but instead resulted in the town underestimating personnel expenses.
The mistake was made in the town’s salary and benefits worksheet, which is used to calculate employee compensation costs for the budget. The worksheet is “complicated” and includes multiple components, Patterson said, and errors made during the process were not caught before the budget was adopted.
Those errors were part of a broader budget gap. Patterson said the town needed about $3.5 million in additional TOT revenue to cover the gap between last year’s budget and the 2026-27 budget.
The fourth-quarter adjustment recognizes $1.8 million in additional departmental expenditures, some of which Patterson attributed to the budgeting errors. The expenses have already been incurred or committed, rather than representing new spending proposed in the adjustment.
Police services account for some of the additional costs. The department has dealt with vacancies, recruitment and significant overtime during the year, all of which contributed to spending above its budget.
Patterson told the council that the errors “should have probably been realized last year during that budget review process.”
Luckily, the town had record-breaking Transient Occupancy Tax (TOT) revenues to help cover the additional expenses. The town’s baseline TOT revenue for the year is expected to finish slightly above $29.5 million, an all-time high.
With these unforeseen expenses in mind, Patterson proposed putting $150,000 toward reserves this quarter, a measly contribution next to the roughly $10 million the town already has sitting in reserves.
That prompted a lengthy conversation among the council about how the town should use and fund its reserves while considering additional spending on development projects.
Councilmember Brent Truax asked whether some of the MACC’s “shoulds” and “wants” could instead be paid for with money from the tourism reserve.
It’s not a crazy assumption. The town has used tourism dollars for more than tourism promotion in the past.
“We have utilized those funds for housing. A lot of those funds are housing. But also recently for fire, for EMS services, for really things that we think are going to impact the visitor experience,” Patterson said.
Patterson said he was less comfortable making that connection for a broad capital project like the MACC. The question then became whether the town should move money from its dedicated tourism, transit and housing funds into its broader reserves before deciding how those funds should be used going forward.
Truax wanted to have that policy discussion first. Other council members, including John Wentworth and Bill Sauser, favored approving the allocations and revisiting the reserve question later, particularly with winter approaching and construction moving forward.
The council ultimately approved the budget amendment 4-1, with Truax voting against it, and agreed to bring the reserve question back for a future agenda item.
