Conference center’s deficit exceeds $525,000 in FY20

The Manchester-Coffee County Conference Center suffered a net operating loss of more than $525,000 in Fiscal Year 2019-2020, according to The Tennessee Comptroller of the Treasury.

The Comptroller of the Treasury has released the audit report of the Public Building Authority of Coffee County for Fiscal Year 2019-2020, ending June 30, 2020. Coffee County PBA owned and operated the Manchester-Coffee County Conference Center, and until Dec. 31, 2020, Coffee County and Manchester City equally shared the operating loss of the conference center. Coffee County and Manchester City signed a new contract, and Manchester City is now the sole municipality responsible for covering the deficit of the conference center. Manchester City established a new Public Building Authority, City PBA, which owns and operated the center now.

This report identifies findings and expenses that affected the PBA of Coffee County.

Findings (issues)

The auditors have identified two findings (issues): budget and net operating loss. The same issues existed when the auditors completed a report for the previous year. PBA has decreased the number of findings in recent years. Last year, PBA corrected five of the findings that had existed previously.


“We noted that actual expenditures exceeded the amount appropriated in the budget in the general fund,” auditors wrote. “This practice is contrary to state statutes, which require all expenditures of the general and special revenue funds to be authorizes by the governing body. Without following proper procedures, the organization has not authorized all expenditures by the end of the fiscal year.”

According to auditors, all expenditures should be authorized in either the original budget or an amendment to that budget.

Net operating loss

During FY20, the center suffered a net operating loss of $525,788. The conference center suffered a net operating loss of $339,764 in the prior fiscal year.

State statutes require proprietary funds to prescribe rates sufficient to pay all expenses of operations. Continued losses could affect the organization’s ability to continue to meet its obligations as they become due, according to auditors.

“Care should be taken to ensure the Conference Center operates at a break-even point in the future,” auditors wrote.

Bean, Rhoton & Kelley, PLLC prepared the audit report.

Management’s notes

According to MCCCC’s management, the center received financial support from Manchester City and Coffee County; however, it generated hotel tax revenue, but those funds are not directly allocated to the center.

The conference center experienced significant cancellations and rescheduling due to the COVID-19 pandemic, from March to June 2020. Non-essential staff was temporarily laid off. Salaried staff was retained to continue to book events, host and sanitize smaller events, complete daily maintenance and complete critical projects. All maintenance projects, including new carpet, parking lot resurfacing and installation of new ceiling tiles were completed.

According to PBA member Zach Lowry, there are five salaried employees: the general manager, the assistant general manager, the event manager, the banquet captain and the executive chef.

Coffee County PBA members were Lowry Stan Teal, Patricia Pinegar, Lowry, Claude Morse, David Pate, David Pennington. Rebecca French served as general manager, who oversees sales, hiring, training, human resources, customer service, billing, advertising, marketing, website and social media design, market planning, building maintenance, budget adherence, according to the audit report.

Rebecca French continues to serve as manager. The newly created, Manchester City PBA consists of Tiffany Hillsman, Jay Boyte, David Bradley, Ken Huddleston, Jake Shelton, Stan Teal and Lowry.


Lowry’s comments

Lowry, who served on the Coffee County PBA, continues to serve on the Manchester City PBA.

“At the start of FY20, the MCCCC was on track to have its best financial year since its inception,” Lowry said. “However, the global COVID-19 pandemic had a severe effect on our ability to do business for several months at the end of the FY. Sanitizing supplies and cleaning labor were unexpected and unbudgeted expenses, and the center was not eligible for relief funding from the state. During this time, a majority of the staff had to be laid off, but assistance was provided with their unemployment applications or in their search for new employment. The remaining staff continued work to complete a variety of scheduled maintenance projects, including carpet and ceiling tile replacement and a parking lot resurfacing.”

Lowry praised French and the center’s employees.

“Because of the hard work of our General Manager and the rest of the MCCCC staff, the amount of additional money requested of the PBA beyond the original budgeted amount was kept to a minimal amount and the audit only contained two findings. We expect that both of these findings will be resolved in FY22 once the transition of the operation and funding of the MCCCC to the City of Manchester is completed.”