Amid all the glowing reports of a billion dollar in retail sales and that the bookings at the Branson Convention Center are ahead of what was programmed there appears to be a “Caution Light” starting to blink. At the April 29 meeting of the city of Branson s Budget and Finance committee it was reported that the 12 month rolling average for Branson’s primary revenue stream remained flat and that the Branson Convention Center had a $651,861 operating loss during the period of October 2007 through March 2008.
Information relating to the trend of the 12 month rolling average of the city’s 1% Sales Tax was presented by John Petty, President, District Offices, LLC. The trend of the city’s 1% city sales tax collected outside of Branson Landing and Branson Hills has remained flat over the 12 month rolling period. The discussion about the report indicates that the 1% city sales tax, collected from areas other than Branson Landing and Branson Hills, is the primary source of revenue that the city uses to meet its current operational needs.
Petty said that while the collection of the tax in Branson Landing and Branson Hills is trending up it is “bubble revenue.” He explained his use of the term “bubble revenue” as revenue that is, for the most part, not available to the city for current operational needs because it is used to pay off the Tax Increment Financing (TIF) bonds used to finance the projects. Petty pointed out that 100 percent of the tax collected from Branson Landing and 50 percent of the tax from Branson Hills goes to pay TIF debt.
Branson Mayor Raeanne Presley, while thankfully acknowledging the trend of growth at Branson Landing and Branson Hills, again reiterated that 100 percent of the tax collected at Branson Landing and 50 percent of the tax collected at Branson Hills does not come back to the city. In terms of the city’s primary revenue generator to meet the city’s current operational needs, the 1% city sales tax collected outside of the TIF districts, she said, “Sales tax, across the board for the city are flat so there’s the story.”
In analyzing the data being presented, Alderman Stephen Marshall said that there’s a belief in town that because Branson Landing is doing so well that the that the incremental revenue has gone up in those areas outside the TIF Districts and that’s not happened. Frank Schoneboom, Acting City Administrator, agreed saying, “That data suggests that you are absolutely right.” Marshall continued, “There are folks that look at all this data that includes Branson Landing taxes etc. which is what we have been talking about here for months. It shows a fictitious increase in taxes because the taxes are going out to pay for the bonds.” Petty added, “It’s like looking across into your neighbor’s yard and saying, “My landscaping looks great.’”
When analyzing the operational report for the Branson Convention Center submitted by Hilton Corporation, the city’s contract convention center manager, the report was categorized as sloppy with incorrect dates etc. The trend indicated by Petty’s presentation was one of reported expenses exceeding reported revenues for each month since Oct. 2007 with a year to date loss of $651,861 for the six month period.
One of the foundational documents used to support the building of the convention center in downtown Branson was a study entitled, “Feasibility Analysis of the Proposed Branson Downtown Exhibition and Convention Center Study,” (CS&L Study) that was received by the city of Branson during Feb. 2003. That study estimated that the convention center would have an annual net operating deficit of $530,000 per year in a stabilized year of operation. Although the losses for the first six months of this year are more than estimated for the whole year in that report it should be pointed out that, as the study used the term, a “stabilized year” was assumed to be the normal operation of the facility that would occur by the fifth year of operation.
Various members of the committee had questions relating to aspects of the report relating to food and beverages costs, labor costs, marketing, not staying within the parameters of the budget that Hilton had submitted, the operation of the laundry, etc. There was no representative of Hilton present at the meeting and the questions were not resolved. Mayor Presley said, “I suggest that we get the new guy in here. He should be on board within a week or two.” Hilton is currently in the process of bringing a new General Manager on board to replace the General Manager that recently retired.
Furnished Courtesy of the Branson Daily Independent.
