By Elena Cawley, Staff Writer
Coffee County Mayor Gary Cordell has made a request to the Manchester City Government to cover 70 percent of the losses associated with Manchester-Coffee County Conference Center (MCCCC).
Currently, the two entities share the losses equally.
Cordell made his request to members of the Coffee County Budget and Finance Committee during their Feb. 20 meeting.
Cordell told the committee members he had had a formal conversation with Manchester City Mayor Lonnie Norman about five months ago, when he asked Norman to consider picking up 70 percent of the losses of MCCCC.
According to Cordell, Manchester City benefits from the conference center – by collecting hotel-motel and sales taxes – more than the county does.
However, according to Cordell, there has been no response from the city.
Over budget, again
During the same meeting, MCCCC Executive Manager Rebecca French gave an update about the status of the conference center.
The amount budgeted to cover operational losses in fiscal year 2018 was $280,000; however, French said, losses are expected to reach $328,000.
Since the center opened its doors in fiscal year 03, taxpayers have helped keep them open by funding the losses.
According to conference center audits, operating losses over the years total more than $2.5 million.
With the losses increasing – $301,329, $407,178 and $505,975 in fiscal years ’15, ’16 and ’17, respectively – Coffee County officials have expressed concerns about the financial situation at the center.
County officials have stated they hope to see the conference center’s losses reduced during the current fiscal year; however, the center has again exceeded the budgeted figure.
French requested $280,000 from Coffee County and Manchester City to cover this year’s projected losses; and with the two funding bodies equally splitting the deficit, the county’s share this year was expected to be $140,000. However, with the losses now projected to be $328,000, the county’s bill will be $164,000.
“Year to date, we’re trending overbudget,” French said. “It looks like we’ll finish the year at negative $328,000. It’s still too high, and everyone on PBA [Public Building Authority] is very disappointed.”
The seven-member PBA board oversees operations at the conference center. Members are appointed.
French said the center is over budget because of “in-kind” contributions to the community – which she defines as discounts given to nonprofit organizations and schools for renting the center – were not factored in when preparing the budget. Schools receive a 90-percent discount and nonprofits receive a 50-percent discount to rent the center, according to French.
“The center is a place nonprofits and schools can use,” French said. “Anybody that doesn’t have a large budget has the ability to use our building at a discount. If the schools come, they pay $150 for a $1,500 rental.”
The difference – $1,350 – is counted as an in-kind donation.
Year to date, discounts given to nonprofits and schools total $129,000, French claims.
“With the schools, you have to make sure the whole building is available to them,” French said. “And there is labor for setting up the room.”
According to French, labor expenses incurred during events that are not very profitable, such as those associated with schools and nonprofits, contribute to the losses.
Currently, there are 29 employees at the center. Six of them – French, two chefs, two event managers and a banquet captain – are full-time employees, according to French.
Rush Bricken, chair of the budget and finance committee, said that providing the center to schools and nonprofits may have to be limited in order to control the center’s losses.
“I don’t want to be negative, but before PBA, schools found space for their events,” Bricken said. “If you booked your full year with public events, you would be kicking out a lot of private customers. You can only go so far by being benevolent. That’s where the whole thing circles back to how much community subsidizing is appropriate.”
Bobby Bryan, member of budget and finance committee, said the tolerance of the community for covering the losses of the center is close to reaching its limit.
He also said, the current formula by which the county and city equally share losses is not fair because the city benefits from hotel-motel tax paid by center visitors who book hotel rooms.
“The associated revenues with hotel-motel tax and sales tax are not equal, and that bothers me,” Bryan said. “It’s disproportionate. The taxpayers have a certain tolerance for cost, and we have exceeded that for too many years. We are talking about $328,000 this year. We share that amount with the city but [the city doesn’t] share the benefits.
“Manchester can do something about it, if Manchester decided to be fair,” Bryan said.
The hotel-motel tax collected by Manchester City is 6 percent of the amount paid for hotel rooms. Under state law, the county can’t collect hotel-motel taxes.
Request for 70/30 split
“I requested from Manchester to pay 70 percent of the losses,” Cordell said. “About five or six months ago, I approached the city mayor. There has been zero response. I feel that it’s time to put it on the table. The taxpayers are not getting the revenues.”
Budget and finance committee member Mark Kelly suggested an amount he thought would be reasonable for the county.
“If you maintain the current model, with the large use of nonprofits and schools, my number is around $50,000,” he said.
By limiting school and nonprofit use, he said, it’s possible for the center to break even.
Norman said he does not remember Cordell’s request.
“The county and the city have a number of other agreements,” Norman said. “It would not be proper to renegotiate one without renegotiating all of the others.”
According to Norman, the city’s hotel-motel tax was enacted by the state legislature in 1981, 19 years before the county commission and Manchester Board of Mayor and Alderman approved the PBA/Conference Center Agreement in 2000.
“The PBA, which oversees the conference center, is governed by a board of directors,” he said.
Norman added that the city has no control over the appointment of the PBA directors.
“It would be unfair for the city to assume a greater percentage of the cost with no control over the directors who manage the PBA,” he said.
However, Coffee County Attorney Robert Huskey said that some of the board members are nominated by Norman and approved by the Manchester Board of Mayor and Aldermen.
“The statute and the bylaws say PBA has to have a minimum of seven members,” Huskey said. “The statute says that, and their bylaws mirror the statute.”
According to the minutes of Coffee County Commission’s Sept. 13, 2016 meeting, David Pennington’s appointment to the PBA board as a representative of Manchester was simply accepted by the county commission; county officials didn’t vote to approve his appointment.
According to Huskey, in order to change the rate for covering the losses of the center, an amendment to the 2000 agreement would have to be approved by both the Coffee County Commission and the Manchester Board of Mayor and Aldermen.
“For the county commission, it would take a majority of the membership,” Huskey said. “With 21 commissioners, it will take 11 votes to approve it.”