County ready to cut conference center ‘ongoing financial drain’

The Board of Mayor and Aldermen voted Nov. 3 to enter into a new agreement with Coffee County regarding the Manchester-Coffee County Conference Center. The Coffee County Public Building Authority (PBA) has owned and operated the center since its inception 20 years ago, and Coffee County and Manchester City equally covered the operating losses of the center. County officials say that the city sees most of the benefits associated with the center, such as sales tax and hotel tax revenues. However, the county couldn’t change the original agreement until the bonds on the construction of the center were paid off. With the bonds scheduled to be paid off 2021, the city has agreed to absorb the full operating losses of the center and form Manchester Public Building Authority, which would relieve financial burden for the county. The new agreement must be approved by Coffee County Commission, and it’s on the agenda for the commission’s Nov. 10 meeting.

 

County ready to cut financial burden associated with the center

Coffee County Attorney Robert Huskey has provided a statement about the status of the operational contract for the conference center.

 “There has been continuing and increasing concern over the past years by the County of the Conference Center,” Huskey said. “The obligation of the County stems from the contract to support the Conference Center, which in addition to the approved budgeted expenses requires the County to pay half of any shortfalls that occur over and above the Conference Center budget while having absolutely no control over the Conference Center’s expenditures.”

Both the county and the city recognize that the conference center is “a wonderful facility and would like to see it continue,” said Huskey.

Both entities have to weigh the cost with the benefits and, while for the past 20 years the costs for the county and the city have been equal, the benefits, in the way of sales taxes, “greatly enhances the City with little or no benefit to the County itself,” according to Huskey.

“The County is bound under the operating contract between the City and the County until the bonds on its original construction are satisfied, but then under the contract the parties are free to renegotiate and change or terminate the contract,” Huskey said. The bonds are scheduled to be paid off next year under the normal terms of those bonds; however, if the County can terminate its obligation for operational expense of the facility by the end of this year by paying off its portion of the bonds early, they would like to do so,” Huskey said.

 

No corresponding financial benefit to county

“With the desire to end the County’s ongoing financial drain of compensating shortfalls without corresponding financial benefit, for a period of months County officials and City officials have been negotiating to reach an agreement as to the future of the Conference Center and the obligations and entitlements that would exist between the two governmental entities.”

With the city being the primary beneficiary of the benefits of the conference center, the county and city have tentatively agreed that a new contract or agreement would be signed to relieve the county of further financial obligation to the conference center, said Huskey.

 

Agreement

favored by county

Huskey hopes city and county will sign the contract by the end of the year.

Under the new contract, the conference center will continue to operate under the governing control established by the Manchester Board of Mayor and Aldermen with continued shared ownership of the facility that had been constructed and maintained by the city and county together and would provide that at any time the conference center ceased to operate for whatever reason, the real property itself would still be owned by the county and city, and the county would receive its respective portion of that value at the point of sale or termination, said Huskey.

“That in substance and principle has tentatively been agreed upon between the two entities and we are now in the process of trying to work out the specific details,” Huskey said.

Manchester City Attorney Gerald Ewell presented a proposed agreement to BOMA on Nov. 3, and BOMA voted to enter into negotiations with the county.

The proposed agreement provides a framework for further negotiations between the county and the city, said Huskey.

“That document is not a final agreement,” Huskey said. “That is a work product and in principle the County is in agreement with the document that was reviewed by the City this week, but the specific details have not as yet been finalized. One thing that I’m satisfied is being accomplished or will be accomplished by the ultimate agreement is that neither entity, the County or the City, will any longer be bound to continue to provide money for its operation without any control over the expenditures, as has been required under the existing joint contract. That arrangement will be at an end with this new contract that we anticipate will ultimately be signed.”

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