HomeMy WebLinkAboutCouncil Minutes Cultural Arts Budget Meeting - May 12, 2026 (208) 359-3020
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City Council Fiscal Year 2027 Budget Meeting Minutes – May 12, 2026
Mayor Jerry Merrill
Council Members:
Bryanna Johnson David Reeser
Colin Erickson Bill Riggins
Eric Erickson Alisha Tietjen
City Staff:
Spencer Rammell – City Attorney
Matt Nielson – Finance Officer
Keith Davidson – Public Works Director
Alan Parkinson – Planning & Zoning Administrator
Scott Johnson – Economic Development Director
Deborah Lovejoy – City Clerk
2:30 P.M. Fiscal Year 2027 Budget Meeting – Cultural Arts Department
Finance Officer Nielson reviewed the Cultural Arts Budget Report.
Discussion: the Cultural Arts Fund (Fund 81) was created several years ago to better track the financial performance of individual cultural arts activities. The fund was reorganized
so that each activity received its own activity code, allowing city staff to evaluate the success of each program based on its direct costs and revenues. The goal is for activities to
generate enough revenue to cover not only their direct costs but also a portion of indirect or overhead expenses.
The Romance Theater and the Tabernacle, payments are recorded in the respective venue funds to help measure the financial performance of the facilities themselves. Fund 81 primarily
consists of activity-related revenues. While transfers from the General Fund are technically revenue, they are presented separately so the true subsidy provided by the General Fund is
more visible. The city's objective is to eliminate any year-end deficit in the fund while gradually reducing the amount of General Fund support required. The fund occasionally receives
grants or contributions, although most donations are designated for specific activities and are recorded directly within those programs. During the COVID-19 pandemic, the city received
operational grants from the federal government intended to help encourage public participation in cultural activities, but those types of grants have become less common in recent years.
General Expenses: the department only has two full-time employees whose wages are split among three funds: Cultural Arts, the Tabernacle, and the Romance Theater. The budgeted amount
of approximately $58,800 in this fund represents only the portion of their salaries allocated to Cultural Arts. The budget includes a 2.73% cost-of-living adjustment (COLA) that will
take effect later in the year. Part-time wages are for when part-time employees work on specific programs, their labor costs are charged directly to those activities. However, some part-time
work, such as general department marketing and other support functions, cannot be assigned to a specific program and is instead budgeted as a general departmental expense. Approximately
$17,000 was budgeted for these non-assignable part-time wages during the current year, with about $8,800 spent so far. The lower spending in this category is partly due to staff focusing
significant effort on the Flood 50 project, which is accounted for in a separate fund.
Benefits, workers’ compensation: when a department experiences workers’ compensation claims, the associated costs are allocated back to that department for approximately three years.
The city paid nearly $100,000 in additional workers’ compensation costs this year due to claims across departments. Each department is then charged a proportional share based on its
three-year claim’s history. City Staff confirmed that Cultural Arts had recorded approximately $4,400 in claims in 2024 and about $14,000 in 2025.
Operating expenses: including smaller budget items such as fuel and supplies. The current year's hired work expense is projected to reach approximately $1,800. City Staff proposed reducing
that line item back to its more typical level of $500 for the next budget year. Insurance costs, final insurance figures were not yet available, but the budget includes a modest increase
to account for anticipated cost growth. Travel and training expenses are budgeted at $2,000, while most other smaller operating expenses are expected to remain relatively stable with
little change from prior years.
Computer programming and software costs as one of the larger items. Finance Officer Nielson explained that these expenses include a variety of technology-related charges allocated per
employee, such as Microsoft and Windows licensing, Tyler Technologies software fees, firewall services, and other information technology systems and security programs used by the department.
Bookings City Generated activity on page 2 of the report. These events involve partnerships with outside groups through ticket-sharing agreements or other contracts, with the goal of
generating a modest profit to help cover departmental overhead costs. The program operated at a loss in 2024, generated approximately $2,700 in net revenue in 2025, and is projected
to finish the current year with a small loss of about $900 due to a lack of additional bookings. The budget projects about $1,000 in profit next year.
Movie License: discussion whether to continue offering free movie screenings since the city pays approximately $800 for the movie license. City Staff explained that the license comes
with strict advertising restrictions. Movies cannot be promoted through front-facing advertising, social media, websites, or push notifications.
Theater Productions Program: which includes the city's larger theatrical productions and performances. The fund has consistently operated at a loss, losing approximately $3,700 in both
2024 and 2025. For the current year, the loss is now projected to be closer to $4,000. The board reviewed the revenue and costs associated with the theater production program. Discussion
noted that admissions revenue is projected at approximately $6,400, with an additional $1,693 generated through participant registration fees, while total program expenses are about
$12,000. Finance Officer Nielson said he will zero out the fund.
Christmas Program: it continues to require a subsidy. The event's subsidy was significantly lower last year than in previous years and expressed hope that the same approach could be
used again to keep costs down. Finance Officer Nielson explained that the program remains appropriately budgeted within the Cultural Arts Fund because it is fundamentally a cultural
arts activity regardless of which departments or staff members take the lead.
Oktoberfest Event: was not held the previous year because of weather conditions. The event remains included in the budget. The event requires a subsidy of approximately $5,500 each
year, prompting discussion about whether it should continue. The event is offered free to the public; it does not generate enough revenue to cover its costs. City Staff suggested pursuing
sponsorship opportunities.
Summer Musical Program: City Staff confirmed that no summer musical would be held during the current year, and Finance Officer Nielson noted that approximately $22,000 mistakenly remained
in the budget and will need to be removed.
Art Stroll program: which receives approximately $5,000 in annual funding. City Staff explained that the event is held six times per year and is designed to encourage residents and
visitors to spend time downtown and visit local venues. The program remains free to the public and is viewed as a community engagement and downtown promotion effort rather than a revenue-generating
activity.
Visual Arts Program: as one of the department’s most successful activities, it consistently generates approximately $3,000 to $4,000 annual profit, helping offset departmental overhead
and support other cultural arts activities.
International Village Event: which is still in the planning stages. Finance Officer Nielson included approximately $2,800 in the budget to cover potential startup expenses, although
it remains uncertain whether the event will move forward. City Staff reported plans to meet with a BYU-Idaho class to further develop the concept and gather ideas. Discussion included
whether the budgeted funds would support event planning, marketing, venue costs, or a potential soft launch at the Romance Theater. A previous collaboration with a university class had
cost approximately $3,000, suggesting the proposed budget amount is reasonable. However, because details such as sponsorships, admissions revenue, and
overall event structure have not yet been finalized, Finance Officer Nielson recommended keeping the funding in place until the concept is more fully developed.
Patriotic Program: a subsidy of $2,100 to operate. City Staff confirmed that the Patriotic Program would not take place this year because the department is focusing its efforts on a
larger patriotic concert instead. As a result, $2,100 budget allocation could be removed for the current year. The Patriotic Program would likely return in the following year once resources
are no longer dedicated to the special concert event.
Thanksgiving Program: expenses primarily consist of music, facility, and staffing costs. While the event is generally subsidized, occasional sponsorships and contributions have helped
offset expenses, including support from local businesses.
Messiah Sing-In, noting that it is held once each year and, like many cultural arts programs, much of its cost reflects staff time and facility expenses required to organize and host
the event. Discussion regarding the Rexburg Tabernacle Orchestra. The previous year's discussion about whether the orchestra should charge admission to reduce its reliance on city funding.
Rather than charging admission, the orchestra chose to pursue sponsorships and fundraising. They were able to secure sponsorship for the first concert, and additional sponsorship support
to cover future performances. As a result, the orchestra's subsidy has been reduced dramatically, from nearly $8,000 to only a few hundred dollars, creating a more sustainable funding
model.
Upper Valley Women's Choir: which has followed a similar path by obtaining sponsorship support. A recent sponsor contributed $2,000, significantly reducing the amount of city funding
required. Although the subsidy is still budgeted, it is substantially smaller than in previous years.
Arts in the Park a free summer community program that does not generate revenue and is funded entirely through city support. City Staff explained that the program provides free entertainment
at the Beehive Pavilion on Monday evenings during the summer months. The series typically begins with a performance by American Footworks, a local youth dance group that uses the event
as a community showcase before departing on its international tour. Additional performances feature local bands and other entertainers. The program schedule has been reduced from six
performances to three.
Art Cart is a concept that was not included in the budget because it was only an idea that had not moved forward. Quilt Show remains uncertain enough that the event should be postponed
for at least another year.
Flood of Memories is an annual event that features a screening of the flood documentary at the Romance Theater on the anniversary of the Teton Dam Flood. Staff confirmed that the event
should remain in the budget for next year because it continues to be held annually. City Staff asked for $300 budget for this event which would cover the cost of using the Romance Theater
and associated labor.
Community Education Art Classes: City Staff reported that they are working with Recreation Director Lewis to expand and restart the classes.
Miscellaneous are city-sponsored events, which serve as a catch-all for minor activities and expenses throughout the year.
Finance Officer Nielson reviewed the Arts Promulgation Fund 36 Budget Report.
Discussion: Historically, the city charged an arts fee of approximately 1.25% on utility projects, such as water and wastewater infrastructure projects. However, recent legal guidance
and court decisions raised
concerns about whether those charges were permissible. After consulting with legal counsel, the city decided to discontinue charging Arts Promulgation fees on utility projects. As a
result, a larger share of Cultural Arts funding will need to come from the General Fund. Based on current projections approximately $145,700 in General Fund support will be needed next
year to balance the Cultural Arts Fund, although that amount could decrease slightly due to the elimination of some programs. He also proposed carrying forward approximately $25,000
in remaining Arts Promulgation funds to help offset costs.
Finance Officer Nielson reported that the fund began in 2026 with approximately $228,000 in carryover reserves, but several major expenditures are planned. About $21,500 has been allocated
for public art, including artwork already installed in City Hall and an additional piece associated with the Flood 50 exhibit, which is expected to arrive soon. The Arts Promulgation
Fund to support facility improvements. Approximately $60,000 is earmarked for the Tabernacle HVAC project, while another $20,000 is planned for capital improvements at the Romance Theater.
These commitments will significantly reduce available fund balances and further limit the amount of Arts Promulgation revenue that can be used to support Cultural Arts operations in
future years.
Finance Officer Nielson reviewed the Tabernacle Budget Report.
Finance Officer Nielson explained that a significant portion of Tabernacle revenue comes through the city's affiliated 501(c)(3) organization (Fund 95). Donations made through the nonprofit
must be transferred into the Tabernacle Fund. He projected approximately $18,000 in donated funds this year and about $6,000 next year from ongoing fundraising efforts.
Discussion regarding auditorium rental revenue. Because the Tabernacle has been impacted by construction and renovation work, rental activity has been limited this year, with projected
revenue of about $12,000. However rental income should rebound to approximately $20,000 next year once the facility is fully operational again. Additional revenue includes a $245,000
federal grant supporting the HVAC project, along with a small amount of investment income generated from fund reserves.
Tabernacle Fund, focusing on fundraising progress and future revenue projections. Estimates include donations already received and pending transfers, total fundraising efforts are approaching
$150,000. Hopefully an additional $40,000 to $55,000 could be raised by September to support ongoing restoration and improvement projects. The major sources of recent contributions,
including a substantial payment from BYU-Idaho related to the John Schmidt fundraising event, which generated more than $70,000. The fund carried forward approximately $337,000 at the
beginning of the year. After current expenditures, the fund is projected to carry forward approximately $124,000, which would be reserved for future phases of Tabernacle improvements.
Finance Officer Nielson projected approximately $7,000 in museum admissions next year, though members noted that pre-renovation museum revenues may have been closer to $10,000–$12,000
annually.
Flood 50 project: approximately $17,000 in donations have been received for Flood 50 activities, which is why project expenses are expected to exceed the original budget.Discussion
also covered future donations related to the Tabernacle Museum. Approximately $3,000 in projected donations for next
year, explaining that these funds would likely come from grants or donor contributions earmarked for specific museum purposes rather than general operations.
Janitorial supply expenses are lower this year because the facility has been largely unavailable during construction, reducing cleaning and maintenance needs. Utility costs: approximately
$10,000 is included in the budget next year for heat and electricity. Tabernacle's building maintenance and capital improvement budget. The city intentionally maintains a healthy reserve
for building repairs and has budgeted $5,000 for general maintenance needs. Capital expenditures, explaining that the current year's $5,000 capital allocation is intended for repairs
and replacement of the exterior porch lighting.
Tabernacle HVAC project, which is currently estimated to cost approximately $895,000, although the final cost could increase. Discussion regarding the Tabernacle renovations, which
includes a proposed $300,000 building remodel project focused on upgrading the bathrooms and hallway access. The project can only move forward if sufficient outside funding is secured.Current
projections assume that the Tabernacle will raise an additional $45,000 this year, bringing total fundraising efforts to the targeted level. Even with that amount, the project would
still require approximately $183,000 in additional revenue next year through private donations, federal grants, state grants, or other external funding sources. The General Fund will
not be used to pay for the next phase of renovations, meaning the project must be funded through successful fundraising and grant efforts.
Finance Officer Nielson reviewed the Museum of Rexburg Budget Report.
Museum Fund: a small portion of the Cultural Arts Department’s two full-time employees is allocated to museum operations, resulting in approximately $8,500 in salary expenses assigned
to the museum budget. Historically, museum part-time wages have ranged between $38,000 and $40,000 annually, but staffing levels have been reduced significantly. Approximately $4,100
has been spent so far this year, with around $8,000 projected in total spending this year and budgeting $18,000 for next year.
Flood 50 commemoration event: the original budget was $15,000, but total expenses are now projected to reach approximately $24,000 by the time all activities are completed. Despite
exceeding the original budget, the project is actually in a stronger financial position because it received approximately $17,000 in unanticipated donations, more than offsetting the
additional expenditures.
Museum exhibit space: which includes $15,000 for exhibit development and improvements. Approximately $6,200 has been spent so far, leaving roughly $7,000 to $8,000 available for additional
exhibit work during the year.
Museum and Tabernacle operations: the total museum expenses are projected to be approximately $35,000, with additional adjustments likely bringing costs closer to $15,000 above current
projections. The remaining funding gap will continue to be covered through a General Fund subsidy. Despite the need for ongoing support, the city's subsidy for the Tabernacle and museum
has decreased substantially over the past several years. The General Fund contributed nearly $1 million in 2024, approximately $400,000 in 2025, and about $260,000 in 2026. For next
year, the city hopes to reduce that support further to approximately $60,000–$70,000, reflecting increased fundraising success and the completion of major capital projects.
Finance Officer Nielson reviewed the Romance Theater Fund 40 Budget Report.
Romance Theater Fund, noting that it continues to require a General Fund subsidy, although the amount has fluctuated significantly over time. The theater is subsidized by approximately
$225,000 in 2024, which decreased to about $82,000 in 2025. The current year is projected to end with a subsidy
of roughly $119,000, slightly above budget, and the proposed budget for next year would increase the subsidy to approximately $206,000 if all planned projects and expenses are approved.
Revenue sources for the theater. Sales and concessions are projected to generate approximately $4,500, while rental revenue has performed better than expected. Rental income of about
$29,000 this year, but staff reported that unrecorded rentals already place revenue closer to $37,000. Members attributed the increase to strong demand and positive customer experiences,
supported by a new rental management system.
Operating expenses, part-time wage expenses have been reduced significantly in recent years because staff are now encouraged to charge their time directly to specific events whenever
possible. As a result, part-time wages are budgeted at approximately $10,000. Supplies remain fairly consistent, while janitorial expenses have increased over time due to heavier use
of the facility. Utility expenses remain one of the theater's largest operating costs. Heat and electricity are projected to total approximately $20,000 to $21,000 annually. After reviewing
recent utility bills, the electricity costs are generally higher than gas costs, particularly during the winter months when electric bills ranged from approximately $1,500 to $1,700
per month. Gas expenses fluctuate seasonally and are much lower during the summer.
Building maintenance needs, including issues with the theater's HVAC system. Approximately $4,000 had initially been budgeted for building and grounds repairs, but because HVAC repairs
may cost between $5,000 and $10,000, he recommended increasing the repair budget to $8,000 to ensure adequate funding is available.
Capital improvement projects, discussion focusing on aging equipment, technology upgrades, and facility enhancements designed to improve the user experience. The theater currently has
approximately $13,500 budgeted this year for capital projects. One priority is replacing an aging theater control system that is becoming increasingly unreliable.
Internal camera monitoring system, that would allow activity on the stage to be viewed from backstage areas and the theater lobby. Staff explained that the system would improve communication
during performances and allow patrons who temporarily leave the auditorium, such as parents with small children, to continue viewing events.
Lighting system upgrade, costs about $20,000. The theater's stage lights were originally donated by Ricks College and are decades old. Replacing them with modern lighting technology,
including LED fixtures, would improve performance capabilities, reduce maintenance needs, and likely generate energy savings over time.
Remodel of unfinished basement spaces near the restrooms, costs about $20,000. The goal is to convert currently unfinished areas into functional support spaces for theater users. One
room could serve as a catering preparation area for weddings and private events, equipped with basic amenities such as countertops, a sink, and refrigeration. Another unfinished room
would be renovated into a usable rehearsal or support space. Members agreed that improving these areas would enhance the theater's ability to host events and better serve patrons.
Romance Theater marquee, identifying it as one of the largest unknown capital expenses facing the facility. Finance Officer Nielson reported that he had received a proposal from YESCO
regarding replacement of the aging digital display boards. According to the quote, the company believes it can replace the two existing digital display panels with new LED displays at
an estimated cost of approximately $45,000 to $50,000.
Adjournment
APPROVED:
________________________________
Jerry Merrill, Mayor
Attest:
________________________________
Marianna Gonzalez, City Deputy Clerk