Branson questions proposed convention center budget

The city has issues and questions about the proposed budget Hilton Hotels Corporation (Hilton) has submitted for the operation of the Branson Convention Center for the 2009 fiscal year. A primary issue relates to the allocation of expenses between the city owned Convention Center and two private hotels, the Hilton Promenade at Branson Landing and the Hilton Branson Convention Center Hotel.

Two primary documents relate to the financial operation of the Branson Convention Center. One is a “Convention Center Management Agreement (Management Agreement), dated June 1, 2005, between the city and Hilton. The other is a “Revenue and Expense Allocation and Cost Sharing Agreement (Allocation Agreement), dated the same date, between the City, Branson Landing Hotel, LLC, Boutique Hotel Development Company LLC and Hilton.

On Oct. 10 Hilton delivered a proposed 2009 draft budget to the city. Under the terms of the agreements the city has a 30 day window in which to respond. On Nov. 5, within the 30 day window, the city sent its initial “Budget Response” signed by Branson City Administrator Dean Kruithof.

Kruithof pointed out that the budget was to be a line item annual budget for each of the component units consisting of the Convention Center, the Convention Center Hotel, and the Promenade Hotel and was to address the allocation of shared costs allocated to each component. He noted that the proposed budget “addresses only the costs of the Convention Center and does not provide detail on the allocation of expenses between the Convention Center and two hotels as required by the Allocation Agreement.”

Kruithof stressed that the allocation of expenses would be necessary so that the city could review the information to determine if the allocations were appropriate or further information was needed. He went on to say that after the city had the opportunity to review that information it would be in a position to submit a “true Budget Response” under the terms of the Allocation Agreement.

He also asked for more details on six specific areas in the proposed budget. The items were laundry, marketing expenses, food and beverage, excessive increases in expenses, salaried positions, and bad debt. Kruithof expressed the opinion that food and beverage profits for the prior year was far below the industry standard and the “double-digit increased expenses” for certain items was excessive and asked for more analysis and information in those areas.

Kruithof went on to say, “With the current state of the economy and its effect on municipal revenues, the City is experiencing challenges with the provision of basic City services such as Police and Fire, and the subsidy to the Convention Center is putting a strain on the city’s budget.” He expressed his hopes that a finalized operating budget would be forthcoming as a result of the receipt of the requested information and further discussion between Hilton, the City and the hotel owners.

Furnished Courtesy of the Branson Daily Independent

About Gary Groman aka The Ole Seagull

Editor of The Branson Courier
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