[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.

At least that is what I get from this article.

In its first year of operations in 2006, the venue hosted 70 events totaling 126 days. While in 2007, that number grew to 99 events totaling 157 days.

With its first two years of operations, it is estimated the venue has contributed more than $10 million in economic impact with more than 223,000 people in attendance.

But just to make sure we will hire some consultants to estimate the economic impact anyway.

The county also hired a third-party firm to conduct a study on the venue's economic impact. However, County Judge Mike Bradford said it won't be ready for a few weeks.

But we don't need to wait for the study we are going to go ahead and pay for to affirm our opinion that the facility is operating and having the impact as originally planned.

However, members of the Commissioners' Court still contend the venue has served its intended purpose: Giving the community a multi-purpose facility to hold events.

"I think the small operations lost we have encountered is a fair swap for the economic impact the facility brings," [Midland County Judge Mike] Bradford said.

But wait! In the first two years of operations we have turned down almost as many events as we have accommodated!

Since operations began at the venue, 122 events were lost due to dates already being booked, the report states.

So if the estimated economic impact of the events that have been held at the Horseshoe above is a given and the number of events we must turn down due to the venue already being booked is roughly 70% of the number we actually book and this number will necessarily rise because we cannot expand the calendar year...then it all becomes obvious:

We need to build a second Midland Horseshoe.

Because we have lost out on $7,000,000 million in economic impact and we just can't afford that!

Which reminds me.....isn't it about time for another Monthly Financial Report?

UPDATE: The County Auditor has now posted the County Financial Statements for May and June....but without the pages showing the performance of the Midland Horseshoe in those months. So what are the chances we will ever see those figures broken out of the main report again?

Take a look at this MyWestTexas.com article on the recent Amateur Softball Association tournament held at the Ezell Softball Complex recently.

The numbers are pretty amazing:

The ASA 14 and Under Nationals has attracted 86 teams from about 18 states to the Freddie Ezell Softball Complex at Ulmer Park this week.

The week-long event is generating an estimated $44,000 in hotel and motel taxes for Midland, said Nancy Swallow, the sports director for the Chamber of Commerce Convention and Visitors Bureau.

According to her department's calculations, 4,876 room nights have been generated with 1,900 attendees staying in Midland hotels -- some checking in as early as Monday.

As far as a return on investment, the Ezell Softball Complex is head and shoulders above The Lemon Bowl.

If we must spend tax dollars on sports venues it would be better to create several high quality venues that can be used and promoted extensively by the masses.....the unpaid masses....rather than big complexes that only a very few events can utilize and that just don't draw any people.

With that in mind here is my suggestion to County officials regarding the Horseshoe: The next capital purchase you make needs to be some sort of softer flooring that can be easily laid down and picked back up. Then go out and buy as many volleyball net set-ups as will fit in the building.

Then let the local volleyball parents/fans/organizations go to work bringing in people for their's and the county's mutual benefit.

One big volleyball tournament will bring in more people than the constant parade of Gun and Blade shows combined.

There is no web link yet for today's Reporter-Telegram article on the losses being incurred by the Midland Horseshoe, but I was struck by two back-to-back paragraphs.

"While we never expected the complex to make money, we have taken steps to bring in more revenue," Commissioner Randy Prude said Tuesday.

This includes the county's move to collect hotel and motel taxes that it began to receive this year. As of April, the county collected nearly $74,000, according to the data.

Uh, guys? Taxes are not really revenues. They are just expenses borne directly by the public rather than borne indirectly by the public through the county.

For whatever reason the County Auditor's office has begun including in its monthly financial reports a separate page for the financial performance of the Midland Horsehoe.

Financial reports for the county can be found on their website here and they go back as far as October, 2007.

The two most recent reports (March, 2008, and April, 2008) are the only reports that have the Horseshoe numbers shown separately.

This is what they show:

March, 2008
Income: $186,117.94; Expenses: $505,106.55; Net Loss: $318,988.61

April, 2008
Income: $207,404.81; Expenses: $610,088.88; Net Loss: $402,684.07

The total net loss for just this two month period totals $721,672.68.

(IMPORTANT UPDATE BELOW)

There is included in these financial statements a line item called "Capital Outlay - Equipment" that makes up about one-half of the loss for the two month period ($348,225) and I would like to see Ospurt's opinion on what those costs would comprise....but even if you completely removed those charges that still leaves around a $373,000 loss for just the two month period.

With all of the hand-wringing about the ongoing losses incurred by the Scharbauer Sports Complex we may be missing the real story which is that the Midland Horseshoe is making the sports complex look like a sweet deal.

BIG, IMPORTANT, MONSTER UPDATE: Word has gotten to us that the losses set out in the County Auditor's report is a cumulative figure for the fiscal year and not a monthly figure.