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City Attorney Craig Johnson recently called a fee unenforceable that was negotiated at the time of the Bonnaroo property annexation into Manchester city limits in April of 2021.

“It’s very questionable whether we can enforce (the ordinance),” Johnson told Finance Committee members at the special call meeting held Jan. 22.

Johnson noted that the state-approved city charter allows for the Board of Mayor and Aldermen to levy tax and implement impact fees, the charter’s language does not specifically grant the city authority to assess event taxes.

“We can’t call it an impact fee because it’s not,” he said. “The person paying the fee is not really getting anything individually by the charge.”

Johnson doubted the fee in its current standing would pass a court challenge.

The county faced a similar situation when it passed in 2022 its large event fee, that virtually mirrored the language of the city version.

The county’s version was, however, submitted to the Tennessee General Assembly as a private act.

Finance Chairman Joey Hobbs, elected aldermen following the annex in August of 2022, said that to his understanding an agreement was made between the city and the festival and now that is not being upheld.

Mayor Marilyn Howard recalled the festival agreeing to the ticket tax at the time of the annex. She said Monday that an adviser from MTAS, a municipal advisory group, told her that currently enforcing the ordinance was not worth the fight.

“They (Bonnaroo organizers) pretty much told us they were not going to give us money for the fee when we met with them,” Howard said. “They led me to believe that they weren’t going to give us any more money. They want to be our friends… but I got the impression that they weren’t going to give us (money). ”

Johnson clarified that the tax itself “may not survive court challenge and nobody wants to be a part of that.”

Johnson said that were the tax to go before the state for approval, he felt that the festival’s lobbyist would not fight it at the state level. He felt, coming out of a recent meeting with Bonnaroo, that the festival was concerned that paying the tax without state approval would set precedence for other municipalities to tax other festivals.

“It appears that it was made and contemplated with some infrastructure improvements,” Johnson said, noting that he was not in his current position when the document was penned.

“The problem is according to several sources, a ticket tax is not for that purpose unless it’s passed by the legislature,” Johnson said.

Festival organizers told the Times in December, “The spirit of the annexation was of mutual benefit to both the city of Manchester and the festival. Manchester would gain a significant windfall in tax revenue and the festival would have a path to road improvements and potential future city infrastructure.”

They added, “Bonnaroo is proud of the 20+ years it has called middle Tennessee home. The festival contributes hundreds of millions of dollars in economic impact to the region each year as well as a plethora of community engagement initiatives.”

Yet the organizers voiced concern about the tax, “With this already significant contribution to the city of Manchester, Coffee County, and the state of Tennessee we do indeed oppose further targeted taxation of our business.”

Bonnaroo’s responded in 2022 to the county’s passing of its large event fee with a strongly worded letter that expresses Bonnaroo’s “disappointed that the Coffee County Commission has chosen to single out the festival in this manner, especially in 2022 after two years of canceled festivals and losses and after offers to an agreed-upon fee were rejected by County leadership.”

The festival announced it would cut reimbursements to the County for its costs incurred related to County police, fire, traffic, and emergency services.

“Moving forward, Bonnaroo expects this substantial sum derived from the Fee (potentially in excess of $300k annually) to be more than enough to cover the County’s costs ‘related to’ Bonnaroo, including reimbursements in 2023 and beyond,” the letter reads.

One infrastructure improvement requested was the widening to three lanes New Bushy Branch Road and the replacement of a bridge on that road. That request came shortly after the announced closure of the so-called Exit 112 on I-24 by TDOT. Grants were announced at the time that would have funded the improvement.

Bonnaroo referenced the annexation agreement, which binds the festival to cover any budget shortfalls for New Bushy Branch Funding should TDOT not be able to fully cover the cost of the program. “Bonnaroo is committed to continuing conversations with TDOT and City Officials to find resolution on the road project. There is no handshake deal, only the legal document,” the organizers said.

“The road (grant) was moving and at one time the state was going to pay 100% of that (cost),” Ho0ward said. “Now we’re saying if you want the road…if there’s a road brought in…they will pay upfront the money that is bonded.”

Vice Mayor Mark Messick suggested the best way forward was to send the ordinance to the General Assembly as a private act.

“Still I think it’s worth doing that way, rather than cobble together something that they can appose,” Mesick said.

The matter will be on the February Finance Committee agenda. In order to go before the General Assembly a private act would need to be heard before its late April or early May recess.