Now that we have finally been able to put away the important issues in the city, like dog parks, maybe we will be able to start making some hay preparing for Fiscal Armageddon — which is coming next year, or 2018 at the latest for the city of Worcester.
Fiscal Armageddon occurs when our excess tax-levy capacity is gone and we can no longer simply set the tax rates to cover the budget. Although we will still have the residential and commercial tax-rate fight, it will happen after the City Council has to make cuts to the budget in order to level it with tax revenues.
Maybe we should start thinking about, or being in, businesses that are at the core of city government. We have done this in the past, and have opted out of owning the following businesses types:
- nursing homes
Now it’s time to look into other businesses, and whether the city should remain as owners of the following:
- convention center
- golf course
- train stations
- parking garages
Forget about everything you hear about the DCU Center, look at the numbers!
For fiscal year 2015, the general fund was depleted by $904,188.49 to balance the DCU budget. Let me say this again: It cost the taxpayers almost a million dollars to run the DCU Center in fiscal 2015.
Right now, we do not have actual numbers for fiscal 2016, but the approved budget set aside $490,164 from the general fund (and $470,494 for 2017). If we add together the actual number from fiscal 2015, the budgeted number for fiscal 2016 and 2017, the total is over $1.8 million. It could be more (or less).
The irony of this that while we were losing $904K in fiscal 2015, our management company, SMG, was paid $316,248 as a base fee and a matching incentive fee of $316,248. In fiscal 2016, SMG is to be paid a base management fee of $318,146 and another matching incentive fee of $316,248. While we are losing a potential $1.8 million over three years, we are paying incentives to the management company of more than $300,000 annually.
We are going to look into this more over the next few weeks, so stay tuned. In the meantime, have you ever heard of the Massachusetts Convention Center Authority? It owns and oversees the following venues:
- Boston Convention Authority
- The Boston-based Lawn on D restaurant
- John B. Hynes Veterans Memorial Convention Center
- MassMutual Center in Springfield
- Boston Common Garage
What if we were able to sell the DCU to the Massachusetts Convention Center Authority like we sold the airport to Massport?
Check back with Worcester Sun over the next few editions for more on Randell’s DCU Center plans.
Bill Randell started and operates the local news website Worcester Herald, and is the owner and author of FlyORH, a website dedicated to Worcester Regional Airport. He is also president and founder of Worcester-based businesses Advantage Benefits Group and ABG Real Estate.