True Analysis of Centre Finances
This spread sheet on the link below is a great illustration of the true financial results of the Centre’s operation, when you account for the Innkeepers Tax Subsidy. Joe Gries, County Auditor confirmed they have a $4.1 Million Dollar cash reserve, which is very close to the calculations found from the Centre’s financial statements prepared by SMG and data provided by Brian Gerth.
In addition, please find a copy of the Innkeepers Tax code IC 6-9-2.5 which provides the language regarding the Vanderburgh County Innkeepers Tax. Specifically, I draw your attention to section IC 6-9-2.5-7.7 titled Convention Center Operating Fund where the County Treasurer is required to establish a convention center operating fund; deposit into this operating fund the amount of 2% rate (of the gross receipts of hotels, motels cabins, etc… in Vand. Co.); and the money can only be expended for the operating expenses of a convention center.
As previously reported, generally accepted accounting principles have NOT been followed in regards to the reporting of the results of operations. The attached analysis clearly indicates that innkeepers’ tax revenues have bypassed the income statement, misleading the public as to the true financial condition of the Centre. If Marsha Abell should elect to close the Centre it will be on the false premise that the Innkeepers tax is not part of the Centre’s income stream.
Ms. Abell’s well timed and most likely orchestrated by some puppetmaster “the sky is falling so give me my hotel” manifesto turns out to be nothing more than part of the hotel supporter’s last ditch PR campaign that thus far has been based on false claims, last minute concessions, undue distress directed at the Evansville City Council (more on this later), brow beating by union officials, and veiled threats to any opposition with influence.
Scare tactic of closing ‘The Center” is just another smoke screen by the administration, along with a scaled down taxpayer gift by 7 million dollars. Remember HCW HAS NEVER BEEN VETTED.
You are wrong on both points.
You’re right, HCW was vetter by Rob Hunden at a cost of $200/hr.
The spreadsheet link is sideways. To fix that on a later Windows machine, open the link, right click, and select “rotate counterclockwise”.
…or if that doesn’t work for you, click here to see it right side up:
http://i978.photobucket.com/albums/ae262/bradlinzy/Centrespreadsheet_zpsbf7feae3.jpg
So what happened in 2009 and 2004 that allowed for a couple of decent years? This needs further study.
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Technically speaking, The Centre is operating at a yearly loss, but if these numbers are correct, which they appear to be, that means there is really no rush to close The Centre, and to do so would actually COST the County revenue generated by the Innkeeper’s Tax.
In a weird sort of way, Marsha Abell’s threat would hurt the County and benefit any City bureaus who would receive the balance of that Innkeeper’s Tax if a Convention Centre were not operating, by law.
Brad: What do you mean by “Technically speaking…”? Does this mean you are admitting you are wrong and Marsha is correct.? When you are dealing with accounting numbers, it is wrong or it is correct. Brad you need to stick to selling guitars.
By the way, when it is shut down there are some operating expenses that continue. What if there is a big emergency expense like the need of a new roof needed? Or would you prefer, the Centre is handled like Roberts Stadium?
From a free market perspective it’s obvious The Centre is not self-sustaining; however, when yo take into the account the annual Innkeeper subsidy, it’s clear The Centre is still a revenue generator for the County. To close it would represent a net LOSS for the County.
Are you suddenly rejoining the ranks of true fiscal conservatives, Wayne? If so, welcome back! How was your trip?
Am I reading it right that you don’t want the Centre to be handled like Roberts Stadium? If so, THANK YOU! The truth shall set this whole town free. What a shame the way that arena and its supporters were treated.
Once more, excellent find! I’m not sure I understand why she threatened to close down the Centre if the current plan wasn’t approved. Does she not have any faith that the private sector would finance at the very least a 180 room hotel to support the Centre?
R&R: The answer is no–no faith. Read the whole consulting report. Over 50% of convention hotels built are financed by 100% by public money. We have a much better deal with HCW.
If there is not public money involved, no adequate convention hotel will be built. If a full service hotel is not built that will attract conventions–do not build anything. It will be a waste of money
Fair enough Wayne. I agree whole completely with you. The only thing I struggle with is now we are hearing Mr. Warren say 225 rooms is pushing it. Why did the Weinzapfel admin try 220 with kunkel and woodruff. Were there not convention and hotel experts telling them that wasn’t enough?
Could we revisit the kunkel financing package of $8 mil and tax abatement for a 220 room hotel with the option of adding floors and amenities in the future. Is that possible from an engineering standpoint?
Does Marsha not understand that she is not popular in the community? Her last minute threat was uncalled for and she has proven again that she is an amateur when it comes to local politics.
Villian: Do not be killing the messenger because you do not like the message. You may not like it, but it is what it is.
Marsha has been in politics for years. She is no amateur. She has been elected several times. For you to say she is an amateur shows you know anything about local politics.
Marsha does not make threats. She tells it like it is—that one of the many good traits about her.
Both you, Wayne, and Marsha need to take long looks in the mirror. Threats and tantrums belong in a nursery, not in the public arena. I don’t care how long either of you have been in the game – your years in offices may make you both old timers but it doesn’t make either of you good representatives of the Party or the community. In fact, your comments illustrate one of the terrible truths about the current state of both political parties. Get over the ‘we know more than you do’ attitudes and allow for true consensus. To do that you will have to stop being do defensive and listen – really liste – to the things so many people are saying.
Both you, Wayne, and Marsha need to take long looks in the mirror. Threats and tantrums belong in a nursery, not in the public arena. I don’t care how long either of you have been in the game – your years in offices may make you both old timers but they don’t make either of you good representatives of the Party or the community. In fact, your comments illustrate one of the terrible truths about the current state of both political parties. Get over the ‘we know more than you do’ attitudes and allow for true consensus. To do that you will have to stop being do defensive and listen – really listen to the things so many people are saying.
Justathought: You state–“Threats and tantrums belong in a nursery, not in the public arena.”
Bad choice of words.
I do listen very carefully. I had a successful business career by listening to people. I have listened and building the convention hotel is the correct thing to do. Hopefully the City Council will do the same thing.
How’s that ROI and break even point I asked for going?
CCO: you really need to check you sources on this, the actual operating results (before subsidy) are far worse than you are showing. For example:
Source: Independent Accountant’s Review Report; Special Purpose Statement of Revenue & Expenses Arising From Activities; ” Excess of Expenses Over Revenue”:
2006 $ -680,045
2007 -565,350
2008 -672,399
2009 -170,035
2010 -598,732
2011 -502,806
Overall, the accounting firm (Harding & Shymanski)’s report shows a total ‘Excess of Expenses Over Revenue’ for these six years of $ -3,189,000; while the numbers CCO is showing are $ -2,109,000.
Re: the Accumulated Operating Deficits since the Centre opened, Harding & Shymanski, in their report for 2011 dated 8/22/2012, shows Accumulated Operating Deficits of $ -7,568,581. Conversely, the numbers the CCO is showing are (just ) $ -4,936,000 of accumulated Operating Deficits since Opening.
Conclusions: The Operating Losses, per Harding & Shymanski are far worse than the CCO is reporting. The Centre should be closed REGARDLESS of the Hotel decision; and a Change in the Law should be sought after the Centre has closed to use that Innkeepers Tax for a higher purpose.
Editor: Is it fair to assume you agree with LA’s numbers above?
What looks to me like is going on is that there are two sets of books. The first set that Marsha made her claims from is the real operating results and the second batch included the Innkeeper’s Tax revenue which is a way for the Centre to receive a “permanent disability” check. Both sets are accurate for their own purposes and both prove the Centre is not able to stand on its own with or without a hotel.
What has me curious Wayne is why the Centre performed worse financially with a hotel than without one. Could it be that the more active the Centre is that the more money it loses because the rates are not sufficient to pay the utilities and the help? That is surely what it looks like. If that is the case if the Centre gets filled up with conventions it will lose even more money.
That would mean Variable Costs are > Revenue for an event; so the more events you do, the more you lose ! Talk about running on a treadmill ! “We are always busy, yet the losses keep piling up !”
I think we have a bingo here Dr. Wu. The Centre is not charging enough to cover its costs for things like conventions yet according to most it is quite expensive. Maybe this convention business is not what it is cranked up to be.
I think THIS might be the bingo. Not what it’s cracked up to be. When both Forbes and the WSJ agree on this, there’s probably something to it.
That is obviously a tough truth to swallow because it begs the question of what to do with a Convention Centre which is running at a loss… Bulldoze it? Sell it? Give it away? Convert it to some other purpose?
I’m intrigued with trying to attract a private developer with RFPs to take The Centre and the adjacent land to built a hotel they think will suit in a free market. Let’s do that and see what kind of responses we get. If we get no interest, maybe it’s time to auction it off and leave the entertainment and convention business to the private sector rather than artificially attempting to prop up a downtown no one wants to run a business or live in.
LA:
Are you totally discounting the possibility that the CENTRE could be mismanaged, and that with the proper nonpolitical management it could break even or turn a profit?
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From the point of view of an accountant, you are showing a profit for each of the years presented.
You are presenting the Excess of “Expenses over Revenue.”
For each of the years you show $ -xxx,xxx. The negative sign before the dollar amounts indicates that the expenses are LESS than the revenue.
You are (incorrectly) showing a profit for each year. I believe you are intending to show the opposite.
An new C&P article has an Greg Wathen person saying its international news in regards to the demise of the Evansville’s Hotel convention project. Really? The international communities really? seriously saying that? Geez.
Somehow I even scrutinize that comment with an wink or two. Wow maybe I’m on the wrong thread board here. :-/ ?
Insurance companies flying pig commercial,flight attendants comment,pigs comment,looks to the other passenger, asks “Did she seriously just say that?” ;D
It wasn’t a “panic attack”, it was a temper-tantrum. She owes the public an apology for her bad behavior.
Well desperate folks sometime resort to desperate measures.
Look “desperate” up in the Dictionary.
Marsha’s picture is there. LOL
Hello
My first post, wanted it to be about getting Mrs. Abell out of office, along with her pal Winnecke, can’t wait for them to be gone. They sealed their fate with trying to go against what the citizens of Evansville truely want, or in this case don’t want, which is NOT to pay for someone elses Hotel.
Removed by editor for intentional crassness.
Larry R: That is not a nice thing to say to a lady even if you disagree with her.
Please get some professional help.
Editor: Does Larry R comment above fit your criteria about keeping comments civil and not get personal?
Answer: Not in my book.
Removed for being crass. Thank you.
Comments are closed.