[As requested by Walsingham]

Current Commissioner, and Candidate, Jimmy Smith said some interesting things regarding the Horseshoe Arena at a recent LWV forum. From the MRT Article:

[Midland County Commissioner Jimmy] Smith said Midland County built the Horseshoe, a multipurpose facility, to increase Midland's ability to attract large events and it has been a catalyst for creating 1,500 jobs and more development along Interstate 20.

[Midland County Commissioner Jimmy] Smith said the county knew when the Horseshoe was built its benefits would take a while to kick in. He said the event center lost $400,000 its first year and not all the revenue been counted yet. He said the facility has also brought $3 million into the community.

According to the CSL Convention Center Feasibility Study for the Expanded Midland Center (pg 98), the proposed $68 Million dollar center in year five would generate about $14 Million a year in net new spending (direct and indirect) and create 237 net new jobs (direct and indirect).

Using the ratios of jobs to annual spending in CSL's report, and Commissioner Smith's $3 Million figure, seems like the number is closer to 51 jobs. About 1,449 jobs less than claimed. Though according to the MRT report on the Horseshoe in August, the 2-year impact was reported at $10 Million, even if this last year accounted for $7 Million you are still only looking at 118 jobs.

As to the loss, since the County conveniently neglects to include the debt service payments for the series 2004 certificates of obligation let in the amount of $8,920.000 for the expressed purpose of building the horseshoe or considers refunding monies taken from the Reserve Funds of the County to cover total construction costs of around $14 Million not anticipated by the C.O.'s, there is no such thing as a just $400,000 loss, in any year. Let's look at 2009.

Here are the numbers the way the County presents them to the Public:

2009 Budgeted Expenses: $975,800

2009 Budgeted Revenue: $205,000 (Rentals/Concessions/Insurance)

2009 Budgeted Bed Tax Revenue: $360,000

2009 Projected "Official" Operating Deficit: $410,000

Here's how it really shakes out:

2009 Budgeted Expenses: $975,800
2009 Debt Service Payment on 2004 C.O.'s: $630,000
2009 Refunding Reserve Funds ($5M/20yr/0%): $250,000

2009 Budgeted Revenue: $205,000 (Rentals/Concessions/Insurance)

2009 Real Deficit: $1,650,000

2009 Budgeted Bed Tax Levy: $360,000

2009 Additional Local Sales and Use and Ad Valorem Tax Levy: $1,290,000

Yeah that's right, for the Horseshoe to operate, the County levies about $1.65 Million in taxes.

The short of the matter is these facilities NEVER turn a profit. If they did, local governments would never be asked for a dime to build and maintain them, private developers would do it.

The Horseshoe, or something like it, is probably a necessary quality of life project, but our elected officials need to stop deceiving the public by spinning yarns that the losses will turn around and the facilities will make money. Let's call a spade a spade, it is a taxpayer funded enterprise that pays a small percentage of its way on its own.

I seem to recall one of the reasons for building the Horseshoe to replace the Expo Building, was because the Expo building was such a drain on the budget....by todays ChamberMath(tm) Logic that facility should have been overflowing with cash as long as it had been there.

Over at the Midland County Auditor's web page.

Maybe our Master Municipal Budget Parser and Odds-Maker Ospurt can provide the Over/Under on the Midland Horseshoe's Operating Loss for 2009.