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Ongoing conference center losses troubling to county

Posted on Thursday, September 29, 2016 at 8:22 am

By Elena Cawley, Staff Writer

 

Members of the Coffee County Budget and Finance Committee expressed frustration during the Sept. 20 meeting over continued operating losses of the Manchester-Coffee County Conference Center (MCCCS).

Manchester-Coffee County Conference Center

Manchester-Coffee County Conference Center

“As far as I am concerned, if it gets too far out of hand, shut it down,” said Coffee County Commissioner Bobby Bryan. “I would hate to do that, but I have seen it operating in the hole every year. Also, I feel the least they can do is report to us on a monthly basis.”

So far this fiscal year, Coffee County has paid about $82,000 for the Manchester-Coffee County Conference Center (MCCCC), which is $32,000 more than the county has budgeted for the entire fiscal year.

Of that $82,000, about $57,000 is expensed payroll for last year, according to Budget and Finance Director Marianna Edinger, while $8,000 is losses for July, and $17,000 is losses for August.

“They (MCCCC) had not expensed payroll for last year,” Edinger said. “When they finally did, it was beyond the point we were able to amend the budget (for 2015/2016.) So what I did was split it up, and $57,121 will come out of this year’s budget.”

For this year, the county has budgeted $50,000 for the conference center, so paying for these payroll expenses means more than a $7,000 deficit.

“Also, they sent me two bills for July and August,” Edinger said.

Coffee County and the City of Manchester equally share the losses of the conference center, said Edinger. Tullahoma residents pay for the conference center through their county property taxes. She said the losses that have to be covered by the county for July are about $8,000 and for August are more than $17,000. If the losses of the MCCCC continue at the same rate for the remainder of the fiscal year, they will amount to more than what the MCCCC’s management has projected.

“So right now, we are looking at $82,000 to be expensed, and in the budget we have $50,000,” Edinger said.

The MCCCC has projected a loss of $100,000 for the 2016/2017 fiscal year.

“Because we were hearing from the conference center that they would only be $100,000 short for this coming fiscal year, we have only put $50,000 in the budget,” committee member Rush Bricken said. “With the $57,000 expenditure from last year, right out of the gate, we’re $7,000 short.

“It seems we have a budget issue, and it could be a large number,” Bricken said. “This is just two months into the beginning of the (fiscal) year and we’re already on the wrong way.”

Bricken also said he thinks the MCCCC is too heavily staffed for the “soft months.”

Commissioner Tim Morris said the next three months should be better financially for the MCCCC.

“You should be getting to the three months that ought to be lucrative – November, December and January – there should not be a loss,” Morris said.

Members agreed that transparency has improved since Rebecca French has been hired to manage the center. French took over in December 2015 after Alyce Heifner resigned as a general manager.

“My personal feeling is either manage it right or shut it down,” Bryan said. “You’re talking about taxpayers’ money.”

Member Tim Morris agreed.

“I would like to see it break even, and if it can’t, everybody needs to realize that we need to move forward and find somebody else,” Morris said. He also expressed concern that there is not enough advertising done for the MCCCC.

According to the minutes of the August meeting of the Public Building Authority (PBA), which operates the MCCCC, the total income for August was about $29,000, which was 87 percent of the budgeted goal for the month. Projected loss for the month was $28,000 while the actual loss was $32,545. To break even, the MCCCC needs to bring an income of about $58,000 a month.

Also, according to the minutes of that meeting, some improvements have been done during the last few months, including gaining 52 new customers, improved customer service and implementation of employee evaluation forms.

“If we could live with an acceptable shortfall, we will be OK,” Bricken said. “It’s just when that shortfall becomes over that acceptable number, something has got to change.”

Financing of the MCCCC

The Manchester-Coffee County Conference Center was built in 2002, and Coffee County and Manchester split the cost for the project equally. The building cost $3.5 million, and about $1.7 is still owed. The county’s portion is $865,000, according to Edinger.

The county and city still pay for the loan. They also share the losses every year.

Since the center was open, county taxpayers have had to pay between $70,000 and $90,000 annually for operating the center, according Edinger.

Shutting down the center

The MCCCC is operated by the Public Building Authority (PBA).

“The PBA was established as a joint effort of the city and the county,” Coffee County Attorney Robert Huskey said.

The city and the county have an agreement to pay for the loan and pay for the operational expenses related to the MCCCC, but the PBA has operational authority over the MCCCC, according to Huskey. The members of the PBA are appointed by the Manchester city mayor and the county mayor in September for 6-year terms. Current members of the PBA are Pat Egan, Stan Teal, Vernon Sherrill, David Pate, David Pennington, Richard Dix and Patricia Pinegar.

The only way the MCCCC could be shut down is with a decision made by the PBA, according to Huskey.