Johnson City Public Building Authority chairman Mike Eddy said the agency has spent nearly all of the proceeds of land sales over the past few years and will likely need funding from the city to continue operations. (Lee Talbert / Johnson City Press)
The Johnson City Public Building Authority will likely need an infusion of cash from the city by the end of the agency’s fiscal year to continue operations, board Chairman Mike Eddy said Wednesday.
After subsisting for a few years on the proceeds from the sales of property along the corridor opposite East Tennessee State University on West State of Franklin Road, Eddy estimated the PBA will require additional funds by July.
“We run a deficit of about $600,000 a year,” he said. “We may have enough money to make it through our fiscal year, but it would be very close.”
The PBA, tasked with overseeing operation of the Millennium Centre and marketing the conference meeting space to prospective groups, regularly runs a deficit each month. In August, that deficit was $62,875, slightly under the budgeted loss figure.
But Eddy said the losses are offset by the taxes collected by the city from the increase in hotel, bar and restaurant business from the incoming conference attendees.
“The whole purpose, when the board was set up under City Manager John Campbell, it’s always been understood that we would run a deficit,” he said. “But with the increase to tourism and economic development in the city, they’re getting money that way.”
The PBA hasn’t made an official request to the city for fund transfers, but Eddy said the commission members receive monthly updates on the agency’s finances, so the dwindling resources should come as no surprise to them.
“We’ve told them the situation in the past, at workshops over the last several years,” the chairman said of the Johnson City commissioners. “They may have allocated something in their budget already, or they may have to transfer from reserves.”
In the city’s 2014 fiscal year budget, the authority is expected to expend $1.4 million with $530,000 in operating transfers from the general fund.
After selling off lots on the north side of West State of Franklin to businesses and residential developments, the PBA has one property left, Lot 8.
A number of potential buyers have eyed the land over the years, but the lack of a direct access to West State of Franklin has soured most of the deals.
The board now says the best option for Lot 8 is to offload it to ETSU to be used as a parking lot.
“We could last a little longer if we could sell that lot, but I doubt that will happen any time soon,” Eddy said. “We’ve been telling the city for years that we were going to have to have some money transferred over eventually, and it looks like this will be the year.”