Public Building Authority Chairman Zach Lowry submitted the following response to the budget situation. His statement follows:    

 

Last year, for FY22, the MPBA approved a budget for the operation and maintenance of the Manchester Coffee County Conference Center for $436,272 in operating expenses plus $104,000 in capital repairs, bringing the total budgeted amount to $540,272. When presenting our budget to the City and the Board of Mayor and Aldermen, we explained that our goal was to produce an accurate estimation of the operating costs of the center for the fiscal year and to not have to return to the board later in the year asking for more money. The City of Manchester agreed to reimburse our budget up to a maximum of $500,000 (a cut of 7.5%), and we expect to come under that thresholded amount this fiscal year. 

 

For FY23, the MPBA entered into the budget process with the same intent to keep the budget as closely representative of the estimated operating costs as possible and approved an operating budget of $430,457 with $118,000 in capital repairs. This is an increase of only ~1.5% in a year where the inflation rate was 8%. We have made a number of new changes to help drive revenue increases as well as cost cutting measures to reduce the operating costs, but the building and equipment maintenance is just a fact that we must deal with as the building continues to age. We were asked by the City initially to cut our budget by a fixed 10% rate, at which time we explained that while the City can choose to reimburse our expenses at a level of their choice, the MCCCC ultimately operates by the MPBA budget and any cuts would have to come at the cost of capital projects rather than operations. It was later proposed that our budget be reduced further to $400,000, a cut of 27.2% from the MPBA’s projected figure. At that level, we would be unable to perform a number of necessary maintenance items to adequately ensure the safety and security of the building in the future. We feel that these numbers are honest and not out of line with past years’ numbers while we work to complete critical capital repairs to the building. 

 

For context, from the onset of the center in the early 2000s, neither the City of Manchester nor Coffee County chose to directly appropriate a percentage of tax revenue for their respective Public Building Authorities to provide funding for the operation of the conference center. To the best of my knowledge, we are the only such entity in the State of Tennessee that is not structured in this way. Most municipalities that choose to embark on building a facility such as our conference center would work to determine an amount of a source of tax revenue, such as their hotel occupancy tax, to be allocated directly to fund their conference center. In this way, the center is 100% funded by residents from outside of the municipal area and imposes no burden to the local taxpayers. Because the MCCCC has no such funding appropriation, every year we are forced to submit an audit to the state that describes an “operating loss” in the hundreds of thousands of dollars, generally equal to the entirety of the operating budget. 

 

Since the conference center exists mainly to generate tax revenue for the city and the county through tourism, it makes sense that some of that money should be used to fund the center itself. For instance, if someone drives from Nashville to attend an event at the MCCCC, then they have dinner in town and stay in a hotel room for the night, we have generated sales and occupancy tax revenue that goes to the general fund but not a single cent of this “income” is credited back to us on our balance sheet. For a center like ours that has hundreds of events every year and brings thousands of people to visit Manchester and Coffee County, this is a considerable amount of tax revenue generated to the benefit of our community. Because of this, it is difficult to imagine how our center could ever hope to “break even” when you consider what a significant portion of the income that they generate is never added to their balance sheet. It is my sincere hope that we can remedy this issue in the coming years and provide some sort of direct appropriation of tax funds for the operation and maintenance of the MCCCC so that the center can continue serving the local community and bringing all of the benefits that it provides without being criticized for situation that neither any MCCCC employee or PBA board member can ever hope to solve.