After a solid 40 year run, Big Lake’s annual community Spud Fest celebration is in serious financial trouble, Spud Fest Committee Chair Charlean Albright admitted at a meeting Tuesday at City Hall, which drew around 60 community members. After denying there were financial issues for the past several years, it came to light at the meeting that Spud Fest had fallen into tax arrears in 2008. This fact was not discovered until 2010. Taxes had not been filed for 2008, 2009, 2010 or 2011. “Accountant Michellel Backlund sorted it all out for us,” Albright said. “We had to pay in $7,300 to cover the back taxes over these years. Somehow when we came onto the board, the processes were lost in transition. Put it down to inexperience and poor judgement, not malicious intent.” Because of their tax difficulties, Spud Fest has lost its 501c4 charitable organization status and has to file tax returns on a quarterly basis from now on. “We submitted the paperwork to get our 501c4 status back but we haven’t heard anything from the IRS,” Albright said. “But since they are now nine months behind on their paperwork, it is legal for us to continue to operate as a charitable organization until we hear from them.” “We consider if Spud Fest breaks even, the event is a success,” Board Member Patti Borchert said. “But we have to save our start up costs. Every year costs go up while local support goes down. Now volunteers are expecting to get paid for helping out.” The all volunteer Spud Fest board, which meets at Russell’s every Tuesday at 7 p.m. from January through June, includes Troy Hinrichs, Curtis Schultz, Nick Paine, Amber Lankki, Jason Lankki, Cody Munger, Garrett and Charlean Albright, Borchert and Melissa Kroll. “We are burned out,”said Borchert. “We just don’t know what else to do.” “I have been on the board for the last four years,” said Hinrichs. ‘But I didn’ really know much about being a charitable organization. “I didn’t know they had to pay taxes. I was just trying to help out in the community.” Beer Money With only $3,000 in the bank, Spud Fest is well short of the $12,000 they need in the bank to cover start-up costs, Albright said. The board handed out a sheet of financial information showing expenses and income from last year’s Spud Fest. Among the fiancial losers were t-shirt sales, minnow shots and concessions. Among the largest expenses were the carnival at $10,285, entertainment costs at $10,300 and equipment costs at $11,009. Total income from the four-day event was $36,936. After paying expenses of $34,579 and sales tax on prior years income plus interest, net income from last year was $3,360. Former Spud Fest Presidents Kevin Thompson and Norm Leslie agreed in the past the carnival had been a money maker for Spud Fest, not an expense. Spud Fest signed a contract with the carnival which runs through 2014. Another activity which did not make the kind of money it should was beer sales. Last year, Spud Fest sold 144 kegs of beer, generating an income of $33,203, approximately $30,000 less than anticipated. Rick Schroeder of The Friendly Buffalo says volunteers are thing of the past. Schroeder encouraged the committee to sit down with local business owners to talk about how they might help out. “Times have changed over last three years,” he said. “Everybody is working 50-60 hours per week. Nobody has time. I actually lose money on Spud Fest weekend.” “We volunteer,” said Schultz, “and my three little kids were out there helping all weekend last year. We are not asking for money. We are asking for help.” Some of the biggest winners when Spud Fest comes to town are the local gas and convenience stores. The carnival spends $40,000 on gas in Big Lake to fill their vehicles before they leave town but none of that money stays in Big Lake and the bigger chains like Holiday and SA do nothing to support the event, said former Spud Fest Chair Geoff Randall. “There are limits to how much you can do,” he said. Fireworks Another larger expense are the fireworks, which cost $6,000. “They were always funded by the Knights of Columbus,” said Randall, “but now their revenue from pull-tabs has gone down.” Concessions and food sales lost about $500. Susan Nagorski from the West Sherburne Tribune noted the audience was seeing the financial information for the first time. “Our questions come from these financial statements,” Nagorski said. “But as a business owner and a volunteer, what we want is transparency.” “Spud Fest has started in the red for the past few years,” said Randall. “We have to pay for the beer on Thursday. We have been floating for years, hoping we don’t get storms and trying to dig ourselves out of the hole. We need all the groups in the community to put a member on the Spud Fest board to make it happen.” Norm Leslie said the commercial clubs like the Lions took over spud Fest in 1975. “It didn’t lose a dime in 20 years,” he said. “If it doesn’t make money don’t do it. And put the information in the newspaper so people know what you are doing.” “We have had a community festival for 40 years,” said former Mayor Lori Kampa. “Tell us what you need and we will do it.” “Your question took us by surprise,” said Albright. “I don’t have an answer for that.” “This community values Spud Fest but we need a clearer idea of what you need from us,”said mayor Raeanne Danielowski. Big Lake Chamber President Tricia Skodje said the Chamber would donate a table at the Big Lake Business Expo to Spud Fest so they could sign up volunteers. “The committee needs to keep good records so we can find out where all the money goes and stop it,” said Leslie. “You have to run it as a business. It can’t continue the way it is now.” The next Spud Fest committee meeting is 7 p.m. at Russell’s Tuesday.