Cleaning up the Augusta-Richmond County Coliseum Authority's public image will be just one of the challenges its seven new members face when they take charge later this month.
Their first meeting will be held eight days before the start of a new fiscal year. According to financial documents, they'll inherit a civic center complex that's barely breaking even, and only because it receives more than $2 million per year in hotel/motel and beer taxes.
That arrangement with the city ends in February once a bond used to build James Brown Arena is paid off, and City Administrator Fred Russell has proposed rerouting $1 million of the hotel/motel taxes toward paying off bonds to build the downtown trade, exhibit and event center.
Under current conditions, that would leave the authority $100,000 in the red, with nothing left to put toward more than $4 million in repairs needed for the aging arena and Bell Auditorium during the next five years, according to authority accountant J.T. Cosnahan.
Avoiding that scenario will depend heavily on Global Spectrum. The management company the authority hired last year has raised revenues despite the loss of the Augusta Lynx hockey team, filling seats with bookings such as Mama Mia! , comedian Mike Epps, World Wrestling Entertainment and the Avenged Sevenfold/Buckcherry rock concert.
The authority ended the 2007-08 fiscal year with a $1.3 million operating loss, made up for through tax revenues. The loss for the current year is expected to be about $1 million, the accountant said.
"They're generating more revenue, but when you generate revenue, you generate more costs," Mr. Cosnahan said. "There's no way that the civic center operations should ever be looked at as being profitable."
Still, if losing a chunk of the hotel/motel taxes would leave the authority $100,000 behind, Global Spectrum's Augusta general manager, Monty Jones, said that shouldn't be hard to make up. Through increased revenues, the company will come in $200,000 under budget this year -- which is accounted for in Mr. Cosnahan's projections -- and Mr. Jones said he expects to come in an additional $200,000 below the year after.
Global is still getting its feet wet in Augusta, he said, and as it becomes established it will bring in more events and sell more tickets.
"This is our first year in the market," Mr. Jones said. "Each year going forward, we expect to raise even more revenue."
But that won't fix the balance sheets entirely.
Another problem is that hotel/motel and beer taxes collections have dropped. The authority collected $2.5 million in the past fiscal year and is expected to collect $2.3 million this year.
Mr. Russell's TEE center proposal includes increasing the hotel/motel tax from 6 percent to 7 percent, which could alter calculations. Projections are further complicated because the $1 million cut into the authority's tax share would take effect in February, seven months into the next fiscal year.
During discussions of cutting the hotel/motel taxes, Mr. Russell said it's been suggested that if Global Spectrum could bring the civic center complex to a break-even point, the remaining taxes could be used as a revenue stream to float another bond issuance to fund improvements.
Both the 30-year-old James Brown Arena and 69-year-old Bell Auditorium need air-conditioning improvements: new air handlers at the arena for $1 million and a new 650-ton chiller for $500,000. Two wall-mounted end-zone scoreboards are estimated at $775,000, sound system upgrades at $300,000 and parking lot resurfacing at $500,000.
The list of needs totals $4.4 million, with some of the work already approved by the old board.
After years of complaints that infighting had made the coliseum authority dysfunctional and ineffective, the Augusta legislative delegation introduced a bill this year that shrank its board from 12 to seven members, requiring all sitting members to sit out for a year before they're eligible for reappointment.
The bill passed and the changes went into effect June 1. The delegation chose banker Cedric Johnson as chairman this week.
"I think the old board handed over as good a situation as possible when they moved out," Mr. Cosnahan said of the finances.
Reach Johnny Edwards at (706) 823-3225 or johnny.edwards@augustachronicle.com.
WHERE THE MONEY GOES
The Augusta civic center complex relies heavily on hotel/motel and beer taxes to keep it in the black. Unless economic conditions change and revenues increase, that will change if the city pulls $1 million of the tax money next year to help fund the TEE center.
CURRENT SCENARIO (BASED ON FISCAL YEAR 2008-09):
$2.3 million hotel/motel and beer taxes
-- $1 million operating loss
-- $900,000 in payments on the bond that built James Brown Arena
-- $400,000 in expenses, such as professional fees, grounds and landscaping, insurance, bank charges and attorney and accountant fees
Total: $0 (break even)
If Augusta Commission pulls $1 million of the tax money once arena bond is paid off, and revenues, expenses and tax collections remain the same:
$1.3 million in hotel/motel and beer taxes
-- $1 million operating loss
-- $400,000 in expenses
Total: -- $100,000
NOTE: Dollar amounts are approximate. Also, the second calculation is a long-term scenario based on annual figures. The tax money decrease would take effect in February, seven months into the next fiscal year.
Source: Financial documents obtained from coliseum authority accountant J.T. Cosnahan

