The Manchester-Coffee County Conference Center will again this fiscal year exceed its approved amount of deficit spending, this time by more than $130,000. Its total loss is expected to near $340,000.
While county officials have voiced concerns the center has continually operated in the red, their main frustration is with the center exceeding even its approved deficit every year, and with the lack of transparency and accountability of the Public Building Authority (PBA).
The seven-member PBA owns and operates the conference center, which has been operating in the red since opening for business in 2002, losing about $3 million over its history. Half of those losses have come since 2015.
According to PBA member Greg Sandlin, who has expressed his own concerns about the center’s failure to operate within its approved spending limits, the center is expected exceed those limits again this year.
Exceeding the deficit cap
Coffee County and the City of Manchester, which equally share responsibility for the losses of the conference center, agreed during the FY19 budget process to cover up to $252,450 in the current fiscal year. But out of the gate, the county and city had to use some of those funds – $46,696 – to pay for losses the center incurred in FY18, ending June 30.
That left the conference center with $205,757 remaining to cover losses in FY19. But, according to Sandlin, the projected loss is much higher, at $337,953. As projected, the deficit will total more than $130,000 above the remaining funds. Even if the full fund were still available, losses at the center would exceed approved funding by more than $85,000.
The projected numbers are based on the center’s profit/loss statements July through November, but do not include December, according to Sandlin.
“December was a good month but the [profit/loss statement] is not complete at this date, so I cannot submit that data,” Sandlin said.
When members of the Coffee County Budget and Finance Committee discussed the issue on Jan. 2, PBA member Stan Teal brought up the idea of the county levying an occupancy tax in Manchester and Tullahoma, on top of already existing hotel taxes in the two cities.
Teal suggested the potential revenue from that tax be used to finance the conference center.
Committee member Joey Hobbs said he would support the tax but, “I don’t like the hotel tax being intertwined with the conference center,” adding “that’s not addressing this problem.”
“Now it’s a good time for the PBA to say, ‘We are six months into the year, this is how we are going to finish,’” Hobbs said. “Are we even going to meet budget? The early predictions are we are going to be over again. What are we doing to address all those things?”
Hobbs acknowledged the conference center is an asset, saying “It helps our community.” But, he added, PBA members need to be more accountable.
Hobbs asked Teal what measures PBA has taken to ensure it would meet its budget this year.
“We have consistently been increasing our pricing and decreasing our expenses,” Teal said. “Last year, we had the highest sales the center has had. And this year is going to be even better. We are going in the right direction.”
But Teal also said that most other conference centers are funded through hotel taxes.
“Without lodging taxes, conference centers don’t make a profit,” Teal said.
Commissioner Ashley Kraft disagreed.
“Hotel taxes go back to the community,” Kraft said, adding that conference centers “are paid for by pricing correctly, selling at a good price, making profit and then paying off the bills.”
The problem at the Manchester-Coffee County center, she said, is related to operations.
Elena Cawley may be reached via email at email@example.com.