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Which state agency should operate Cedar Lakes?

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Officials at the West Virginia Department of Education have stated the Cedar Lakes Conference Center may be more financially efficient under another agency. The historic Statts Mill Covered Bridge is a landmark at the Jackson County facility. Officials at the West Virginia Department of Education have stated the Cedar Lakes Conference Center may be more financially efficient under another agency. The historic Statts Mill Covered Bridge is a landmark at the Jackson County facility.
MIKE RUBEN / The State Journal MIKE RUBEN / The State Journal

It has been 19 months since the state's Education Efficiency Audit was issued, but questions remain about the status of Cedar Lakes Conference Center. The answers may come this week when the state Board of Education meets in Romney.

The facility near Ripley has been affiliated with the Department of Education since its inception in 1950, but state officials have been looking into the possibility of transferring ownership to another agency. With an original focus on the state's Future Farmers of America and the Future Homemakers of America, Cedar Lakes recently celebrated 50 years of hosting the Mountain State Art & Craft Fair.

"The board believes the facility can be better utilized by another agency," said Liza Cordeiro of the Department of Education's office of communications. "Currently, the facility is used by a small number of K-12 students during the summer months and occasionally during the school year."

She noted the center's operational shortfall of $1 million annually.

"In our current economic times and in light of the statewide budget reductions for FY15, it seems impossible to continue to operate the facility in its current capacity," Cordeiro said.

Financially speaking, Cedar Lakes has been keeping its head above water through annual supplemental appropriations from state government much like state parks. The 2012 report raises the issue of whether Cedar Lakes would benefit by being transferred to another state agency. It also makes observations about reducing expenses and generating more revenue. 

"The desire would be that a state agency/organization that could generate additional revenues and could use the facility year-round would be better able to end the fiscal year with a positive revenue cache," she said. "The WVBE has a responsibility to provide a thorough and efficient education to all students and ultimately prepare them for college and/or career success. 

"As such, the (board) and (department) must focus all of their efforts, financial and otherwise, on funding areas that provide direct services to local classrooms within our counties and within the regular instructional day, and providing the necessary resources to continue the implementation of SB 359 and other WVBE initiatives imperative for the improvement of student achievement." 

Self-sufficiency goal

Cedar Lakes typically generates between $1.6 and $1.8 million annually through its fees for the use of meeting space, lodging and meals. The West Virginia Legislature has been supplementing that with appropriations of approximately $1 million per year. 

The 300-acre complex centered on a series of manmade lakes hosts approximately 500,000 visitors per year. The facility has meeting space for 400 and can accommodate 606 overnight lodgers in its dormitory-style cabins and the newer hotel-like Holt Lodge.

"Without the supplemental support from the legislature, (Cedar Lakes Conference Center) would operate at a loss each year," the audit stated. 

Part of the problem is that the Department of Education has not been utilizing its own center, according to the report. While education spends about $1.9 million annually on similar facilities, "little of this business is given to CLCC."

Department use, such as science and foreign language camps, has been on the increase in recent years, but "several thousand to millions could be saved in the cost of paying for meeting space and a reduction in the cost of meals and refreshments," according to the report. Cedar Lakes has also been upgrading the conference facilities such as a recent expansion to the Assembly Hall.

By converting just 10 percent the department's meeting and training needs to the venue, $190,000 in annual spending could be kept in-house rather than being outsourced, according to audit. "In tight budget times … (the state) should take every opportunity to encourage use of Cedar Lakes by these groups," it stated.

Also, it's challenging to recruit professional organizations due to the fact the center has traditionally catered to the "band and church camp" clientele. In 2010, the average occupancy rate for rooms was only 21 percent. 

Cedar Lakes has limited its marketing and promotions due to an agreement reached with nearby privately owned facilities. Such agreements "put the center at an unfair disadvantage when trying to operate a profitable enterprise," according to the audit's findings.

Further, it states the center needs to review and adjust its rate schedule. The charges need to be high enough to cover operational costs and low enough to attract customers.

"If the cost of doing business exceeds what the market will bear in prices, the continuation of the enterprise should be reconsidered," it suggested.

Personnel costs

Cedar Lakes is caught between offering employees good wages and benefits and being competitive. Personnel costs account for about 70 percent of the center's expenses. In accordance with state code, the center pays its employees comparable to the rates offered by the Jackson County Board of Education. Those rates are considerably higher than what is being paid for similar jobs in the private sector for "virtually every position."

It noted that the center operates year round while most school service personnel are employed 10 months per year.

"Certainly, Cedar Lakes should pay a competitive wage to all of its employees," the audit recommended of the housekeeping, cooks, custodians, grounds and maintenance workers. "But it will never break even if it is required to incur personnel costs often double that of its competitors."

The report suggests a gradual move away from the requirement to match the county's service personnel wage levels beginning with new hires rather than current employees. It estimated a savings of $353,900 could be realized over five years.

A new home?

Another potential solution would be to move the center away from the Department of Education.

"It should be administered by a department with the appropriate resources, expertise and mission to support such an endeavor, such as the Department of Administration, or even the Department of Education and the Arts."

"If CLCC is administered by another executive branch agency, then wages would be more in line with market rates," the report noted.

Financial relief also could come in the form of private donations. Similar to several state parks, the Cedar Lakes Foundation was organized to handle contributions. The efforts have been limited, though, by the center's uncertain status.