December 2004








Statutory Authority and Directive



I.† Introduction/Preamble



II.† Division and VHS Actions to Address Financial Shortfalls



III.† Perspectives on the Possibility of Consolidation



IV.† Next Steps:† Perspectives on Best Way to Continue the Discussion



V.† History and Heritage in all their Forms are Important to Vermont






Pursuant to Section 229 of No. 122 of 2003 (Adj. Sess.), a committee was created to examine the possible consolidation of the State Division of Historic Preservation and the Vermont Historical Society.† The committee held its first meeting on August 9, 2004, at which Commissioner of Finance and Management Rob Hofmann was elected chair.† Subsequent committee meetings were held on September 9, October 7, October 14, and November 9, 2004.




Statutory Authority and Directive




(a)† There is created a committee on the consolidation of state‑funded historic preservation activities.† The committee shall consist of the following:

(1)† the commissioner of finance and management;

(2)† the commissioner of housing and community affairs;

(3)† the state historic preservation officer;

(4)† the executive director of the Vermont historical society;

(5)† one member of the Vermont historical society board;

(6)† one member of the Vermont advisory council on historic preservation;

(7)† a representative of the preservation trust of Vermont; and

(8)† two members of the general assembly, one from the house appointed by the speaker and one from the senate appointed by the committee on committees.

(b)† The committee shall review the current historic preservation goals of the state, including a comprehensive summary of the funding, organization structure, and programmatic activities of the various organizations that receive state funding for historic preservation activities.

(c)† The committee shall report by November 15, 2004 to the general assembly on its findings and shall make specific recommendations on:

(1)† the unification of these activities in one state agency;

(2)† a single funding request for the unified agency in the fiscal year 2006 budget.

(d)† Legislative members shall be entitled to compensation under 2 V.S.A. ß 406.† The† executive and legislative staff shall provide support to the committee as appropriate to accomplish its tasks.† Primary administrative support shall be provided by the legislative council

†††††††† (e)† The administration shall include the recommendation of the committee in the fiscal year 2006 budget submission made to the general assembly.



I.† Introduction/Preamble


††††††††††† Vermonters have a deep and abiding appreciation of their past.† They recognize that Vermontís historyóits human heritage, built environment, historic communities, and other enduring aspects of the Green Mountain experience--has tremendous importance for the state.† In both intangible (creation of a sense of identity, the distinctive look and feel of the towns, and the influence of heritage on making Vermont a special world) and tangible (jobs and careers, heritage tourism, preservation as a key factor in downtown revitalization) ways, history has value for Vermont.† As many Vermonters realize, knowledge of our state and local past is vital not only to understanding the present, but also to devising solutions to contemporary challenges and creating a better future for our children and grandchildren.† Accordingly, funding for Vermontís heritage organizations, whether from the private sector or from government, constitutes a sound investment for Vermont.†

††††††††††† The Vermont Division for Historic Preservation (the Division) and the Vermont Historical Society (VHS) are two of Vermontís premier heritage organizations.† The Division, as part of the Department of Housing and Community Affairs, is the public entity designated to be the advocate for historic buildings and districts and prehistoric sites. Through technical assistance, training, a variety of programs, benefits, and administrative rules and regulations -- both state and federal -- the Division encourages preservation-based community development, often with a variety of public, private, and nonprofit partners.† Declining downtowns, abandoned factories, deteriorated barns, housing, schools and town halls benefit from the work of the Division in rehabilitating and recycling places built and used by Vermonters before us.† Vermonters, schoolchildren, and visitors experience Vermontís history where it happened at the Division-operated State Historic Sites, from Chimney Point where Native American and French settlement is interpreted to Revolutionary battlefields; from the architectural splendor of the mansion of Justin Morrill, Vermontís senator who sponsored legislation creating the nationís land grant college system to a rural village where a 20th century president grew up and returned throughout his life.†

Chartered by the legislature in 1838, VHS is Vermontís oldest cultural heritage organization.† VHS maintains a museum with a permanent exhibit at the Pavilion in Montpelier, an exhaustive Vermont history research library, education and outreach programs, and has recently launched innovative new initiatives such as the Vermont History Expo and the Community History Project, along with publications, programs, and the League of Local Historical Societies, to extend the Societyís reach throughout the state.† The Division and VHS have strong national reputations, and their work has an impact on the lives of tens of thousands of Vermonters every year.

††††††††††† †In recent years, both the Division and VHS have experienced financial challenges attending to the maintenance and expansion of their programs.† At the end of FY2000, with a general fund appropriation of $350,228, the Division had accumulated bills and deferred purchases and services at the State Historic Sites (Sites) due to a decline in receipts and a rise in costs.† In FY2001 the Division received a $120,000 budget adjustment to its general fund appropriation to pay accumulated bills from the previous year and deferred purchases and services.† This amount trued up the budget by the end of FY2002, but by 2004 the Division once again requested an adjustment to its base budget of $75,000.† In FY2005 the Divisionís budget adjustment request is $56,000.† This shortfall is due to a decline in revenue from admission fees and sales at the Sites.† Sites visitation has dropped 14% from 2000 to 2004, and Sites income has dropped 6.5%.† Although the decrease in visitation is the result of many factors, including high gasoline prices, it is likely that the most significant factor in 2004 was the extended periods of inclement weather.† The State Parks experienced a decline in attendance of 5.4% from FY2000 through FY2004.

It should be made clear that the Divisionís budget shortfall is not the result of an unsupportable expansion program or increased staffing.† In fact, staffing at the Sites has remained constant over the past 12 years.† There are only 3.75 permanent staff for the ten sites that are open to the public and 50-60 part-time, seasonal employees.† The most significant change in staffing is the loss of three employees in the past 12 years -- a regional sites manager, a restoration carpenter, and an education coordinator.† The education coordinator from 1998 to 2001 was funded 50% by private donation and 50% by the state, but the state discontinued funding.†












Historic Sites Ten Year Appropriations History for Personal Services and Operational Expenses

(does not include Capital Expenses)












General Fund (Annual)






























Special Funds






















mental Transfers










































*Includes $75,000 Budget Adjustment

**$56,000 Budget Adjustment Requested but not included in $409,352

However, operating expenditures are up 10%. †The decrease in revenue from admission fees has had such a significant budgetary impact because admission fees, together with gift shop sales, account for 50 percent of the Sitesí budget.† Nationally, few historic sites programs generate as much as 50% of their budget through admission fees and gift shop sales.


Agency of Commerce and Community Development

Division for Historic Preservation / Historic Sites

State-owned Historic Sites Attendance and Revenues and Personal Services and Operating Expenditures

Fiscal Year 1995 to Fiscal Year 2005




Fiscal Year


July to June

Special Fund

Fiscal Year


July to June




(includes donations)





GF and SF


2005 (to 10/04)



































































NOTE: $75,000 budget adjustment received in FY2004 $120,000 one-time appropriation received in FY2001


























NOTE: Total expenditures for FY1995 to FY2000 do not reflect invoices totaling approximately $40,000 to $60,000 that were unpaid each year and held over to be paid in the following fiscal year due to lack of funding.







In the past five years, the VHS budget has risen by 107%, due principally to adding the Vermont History Center in Barre as a VHS facility, the renovation and expansion of the Pavilion museum in Montpelier, and the addition of the Vermont History Expo and the Community History Project.† This growth in expenses has outstripped the Societyís sources of stable income which have increased by 57% during the same period.† In FY2004, the State of Vermont increased the Societyís general fund support by 40%, from $245,057 to $343,050, the first discretionary increase in the VHS annual appropriation in the last 20 years.†

This study committee came together principally to consider whether consolidation of state-funded work in Vermont history might address the two organizationsí fiscal concerns.†



II.† Division and VHS Actions to Address Financial Shortfalls


A. Vermont Division of Historic Preservation

To address its budgetary challenges, the Division has proactively undertaken several initiatives with its partners to increase visitation to the Sites over the past 20 months. These efforts are ongoing and include:

1) Leasing the Plymouth Cheese Factory to a Vermont master cheesemaker.† This lease should attract visitors, increase revenue by at least $12,000 per year in rent by year three, and will reduce operating expenses by approximately $4,000 per year;

†2) Working with the Small Business Development Center to develop business plans for the Sites in order to increase revenues and decrease expenses;

3) Collaborating with the Department of Tourism and Marketing, and Vermont Life to develop and deliver a marketing campaign to improve marketing of the Sites;

4) Improving the Divisionís Historic Sites website. †This has resulted in a definitive increase in ďhitsĒ to the website as well as increased website-directed visitation to the Sites;

5) Raising admission fees, where feasible, at the larger Sites; admission fees are statutorily capped at $8.00.† At present, the highest actual fee charged is the $7.50 fee at the Coolidge Homestead.† Admission fees were raised in 2004;

6) Examining closing some of the Sites to address the budget shortfall, but after examination of fixed costs such as insurance, utilities, and upkeep, the Division decided this would be counterproductive because the savings would not outweigh the lost revenue.† Moreover, the Legislature has repeatedly instructed the Division not to close the Sites due to strong support from the public;†

7) Examining the issue of unemployment compensation for the Divisionís

part-time, seasonal employees which accounts for approximately 25% of seasonal personnel costs, and amounted to $50,000 for the 2004 season. This is an inescapable legal reality; however the committee has expressed some interest in looking at a statutory solution to this problem;

8) Strengthening relationships with our seven Sitesí Friends groups who fundraise to improve attendance, educational programs, and the quality of the visitor experience at the Sites; the Friends groups are a fairly new development for the Division.†

The Divisionís efforts over the past 12 months are already showing results.† The Division anticipates that, despite the fact that the summer of 2004 was the third rainiest summer on record in Vermont, it will be requesting a supplemental appropriation of only $56,000 this year, down from the $75,000 it requested last year.† The Division will continue to build upon its initial successful efforts to market fully the Sites to reach as broad an audience as possible and will continue to collaborate with its partners within the historic preservation community.

B. The Vermont Historical Society

The VHS budget was $414,000 out of balance starting FY2004 because the VHS had not identified permanent sources of funding for the ongoing personnel and operating increases for its newly created programs and facilities.† The VHS met the short-term challenge through a combination of board donations, increased private-sector fundraising and assistance in the state supplemental budget.† Aware that the shortfall would recur, the VHS board and administration have created a multi-faceted strategy:† higher income from membership dues, increased earned income from museum shop sales and product development, continued upward momentum in the Annual Giving program, elimination of the capital campaign debt and its interest payments, cost-cutting to reduce spending, and an emphasis on planned giving as a long-term way to build adequate endowments for permanent funding to narrow the gap.† That VHS is moving in the right direction on private-sector fundraising is evident in the fact that in FY1994, VHS raised $141,601 from 872 annual-giving donors, for an average of $172 apiece; and in FY2004, those figures were $587,632 from 1,154 donors, for an average of $509 apiece.†

At the same time, VHS will ask the state to reexamine the fiscal partnership that has existed between them since 1848.† For most of the 20th century, that partnership constituted a nearly equal split of the VHS annual operating budget, with the state sometimes providing as much as 60% of the annual funding.† That percentage began to slip in the late 1980s, and the rate of change accelerated rapidly when the Society embarked on the History Center, History Expo, and Community History Project initiatives in the 1990s while state funding remained flat.† In FY2005, the stateís share of the VHS operating budget stands at 19% (up from 17.5% in FY2004).† While the Society recognizes that it cannot rely solely on the state to address its fiscal concerns, VHS is hopeful that the success and value to Vermont of its greatly expanded programs and services merit consideration of a gradual return to a balance between public and private support of the organizationís work.††

During the committeeís discussion, the Commissioner of Finance and Management, Robert Hofmann, and the Chair of the House Appropriations Committee, Rep. Richard Westman, have both emphasized that budget pressures in areas such as Corrections, Mental Health Services, Medicaid, Education, the Environment, Transportation, Economic Development, and Public Safety, and the obligations related to state personnel costs may collectively constrain Vermontís immediate ability to increase support to either VHS or the Division.



III.† Perspectives on the Possibility of Consolidation


††††††††††† After some discussion, the committee agreed not to recommend full consolidation of the Division and VHS at this time.† While it appears possible that consolidation might allow VHSís private-sector fundraising capabilities to assist some parts of the Division, in all likelihood that potential benefit would not lessen the need for state funding.† For most members of the committee, the reality is that both the Division and VHS have insufficient budgets to sustain excellence across the range of important programs, services, and activities they provide for Vermonters.

The committee did not reach consensus on the related question of full consolidation.† The grounds cited for full consolidation include improving service to Vermonters, enhancing the preservation of Vermontís heritage, and increasing private and public financial resources for historical work in Vermont.† After much discussion, it became clear that the subject requires more thought and attention than the committee could apply in the available time as well as a broader consideration of the best way to structure and fund state-supported work in Vermont history.†

††††††††††† The committee did look at the possibility of a smaller change by shifting responsibility for the stateís Historic Sites program from the Division to VHS.† This option provoked a good deal of discussion, but the committee did not come to consensus on whether or not to recommend it to the legislature.† Briefly, the two positions on the question were:

A.† The Division is not opposed to change if that change is in the best interests of the public, the state, and the Sites themselves, and if it is open to any well thought out and meaningful suggestions as to how the Sites should be operated and by whom.† However, despite VHSís presentation of its proposal to take over the operation of the Sites, and a lengthy committee discussion, it was still unclear exactly what VHS envisioned or how it would accomplish that vision.† It is also unclear how VHSís financial situation would be improved if it took over the operation of the Sites, especially because VHS stated it would need to hire an additional development officer and education staff.† Several issues implicated by the VHS proposal remain unanswered including how the state would benefit from this joint relationship.† What problem would this be solving, how, and to what extent?† What impact would this have on contributions from VHSís private donors?† What role would the VHSís Board of Directors have, if any?† How would personnel and liability issues be addressed?††

If the committeeís charge was to expand the stateís support of cultural heritage, the Division wholeheartedly supports such an endeavor.† However, the committee Chairman, Robert Hofmann, reminded us that the purpose was to find efficiencies and cost-savings.† While the missions of the Division and VHS have always been complementary and supportive of one another, the services provided are different.† The Divisionís focus is preservation-based community development and interpreting history in the irreplaceable sites where it happened.† VHSís focus is to serve as a research and public education resource.

B.† The committee agreed that the state-owned historic sites should play an important role in preservation and dissemination of Vermontís heritage and in preventing the corrosive social amnesia of a population out of touch with its past.† The committee also agreed that the lean rations provided by state appropriations have prevented the historic sites from realizing their full potential for Vermonters and their guests.† With extremely rare exceptions, throughout the United States, historic sites never manage to support themselves from current operations.† For the sites managed by the Division, the revenue generated by admissions and on-site retail sales combined with state support, even with the laudable cooperation of the Department of Tourism and Marketing and the state park system, will predictably continue to be inadequate.

Vermont should seriously explore options for managing its historic sites that would provide access to entrepreneurial and fundraising capacity.† VHS has demonstrated its state wide purview through the League of Local Historical Societies, the Community History Project, the Vermont History Expo, and its publications.† VHS has mounted a successful fundraising apparatus.† Preserving, interpreting, and disseminating Vermontís history is the full focus of VHS.† Generating revenue in addition to state appropriation and earned income might allow the Vermont Historic Sites program to break free of the financial restraints which currently inhibit it.



††††††††††† IV.† Next Steps:† Perspectives on Best Way to Continue the Discussion


The committee reached broad consensus about the importance of the stateís heritage programs to Vermontís cultural and educational vitality, its community development, and its economic future.† The committee also shared a broad consensus that historical awareness and its important component historic preservation are so important that a continued exploration of more effective ways of advancing and supporting the stateís cultural history programs merits serious attention.† At the same time, at least two of Vermontís key history programs, the VHS and the Division, are handicapped by chronic lack of funding.† The solution to this systemic problem lies beyond the capacity of simple increases in state funding.† It probably requires nothing less than a new business plan and a new vision of public-private partnership in support of Vermontís cultural heritage.†

Direct state funding provides only a basic foundation for Vermontís cultural heritage programs, and the committee recognizes potential for large increases in state funding is limited by a broad array of important competing obligations and interests.† For state-funded cultural heritage to realize its cultural and economic potential for Vermont, the state must direct its funding as leverage to enable the heritage programs to broaden their bases of support.†

A full range of strategies should be fully explored as ways of increasing their effectiveness for these agencies, for Vermonters, and for Vermontís cultural tourism economy.† These may include either better collaboration, or consolidation of Vermontís state-funded heritage programs, or both, as well as a state partnership with private heritage organizations.† Administrative partnering examples between VHS and the Division could include new opportunities for sharing of expertise, the achievement of economies of effectiveness and scale, and the development of a greater ďcritical massĒ of support for heritage related activities.† Ways of using the stateís modest financial support for heritage as a more effective lever generating increased support and partnership from the private and business sectors should be developed.† Public and private history organizations should consider the advantages of developing expanded alliances and partnerships with the stateís history programs.†

Although the committee reached broad consensus about the importance of the stateís heritage programs to Vermontís cultural and educational vitality, its community development, and its economic future, it did not find consensus on the best process for considering ways of advancing the programs.†

One approach is for the governor to appoint a commission concerning Vermontís cultural heritage elements.† The commission would be charged with assessing and taking testimony from various stakeholders and making policy recommendations regarding the stateís organization and delivery of historical services.†

The alternative approach would be less formal and would depend upon the Division, VHS, and other agencies and organizations working together on these significant issues in a collaborative and collegial way.



V.† History and Heritage in all their Forms are Important to Vermont.


Given that significance to present and future Vermonters alike, state government has a direct interest in the preservation, appreciation, and dissemination of Vermontís past.† Close attention to the health and vitality of state-funded heritage organizations is an obligation both the legislative and executive branches should take seriously.† Charged solely with consideration of whether consolidation of the Division for Historic Preservation and the Vermont Historical Society would result in financial savings to the state, this committee is the first legislative attempt in recent memory to address

state-supported work in Vermont history.†

The committee acknowledges there are limited financial resources.† But it urges the executive and legislative branches to pay closer attention to the health and vitality of the stateís heritage organizations.











/s/ Robert D. Hofmann††††††††††††† ††††††††††† /s/ Donald Collins_______

ROBERT D. HOFMANN†††††††††††††††††††††††††††††† SEN. DONALD E. COLLINS

Commissioner†††††††††††††††††††††††††††††††††††††††††††††††††† Franklin County

Vt. Finance & Management Department††††††††††††††††††††††††††††††††††



/s/ Richard Westman_______ ††††††††††††† /s/ J. Kevin Graffagnino_____


Lamoille County†††††††††††††††††††††††††††††††††††††††††††††† Executive Director

††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Vermont Historical Society



/s/ John S. Hall______________†††††††††††††††††††† /s/ Jane Lendway_________

JOHN HALL†††††††††††††††††††††††††††††††††††††††††††††††††† JANE LENDWAY

Commissioner†††††††††††††††††††††††††††††††††††††††††††††††††† State Historic Preservation Officer

Vt. Housing & Community Affairs†††††††††††††††††††† Vt. Housing & Community Affairs

Department††††††††††††††††††††††††††††††††††††††††††††††††††††† Department



/s/ Paul Bruhn______________†††††††††††††††††††††† /s/ David A. Donath__________

PAUL BRUHN††††††††††††††††††††††††††††††††††††††††††††††† DAVID A. DONATH

Executive Director††††††††††††††††††††††††††††††††††††††††††† Council Member

Preservation Trust of Vermont††††††† †††††† Vermont Historic Preservation Advisory †††††††††††††††††††††††††††††††††††††††††††††††††††††††††† ††††††††††††††††††††††† Council




/s/ H. Nicholas Muller III_________


Board Member

Vermont Historical Society