DATE: Wednesday, August 27, 1997            TAG: 9708270558

SECTION: LOCAL                   PAGE: B5   EDITION: FINAL 

SOURCE: BY MAC DANIEL, STAFF WRITER 

DATELINE: CHESAPEAKE                        LENGTH:   49 lines

CHESAPEAKE CITY COUNCIL APPROVES CONFERENCE CENTER'S BUDGET

The City Council approved the operating budget for the Chesapeake Conference Center on Tuesday, despite the fact that it showed a deficit at year's end.

The vote was 7-2, with Councilmen John M. De Triquet and Alan P. Krasnoff voting against.

The conference center's estimated expenses are predicted to exceed total resources by $64,352.95 in the budget, down from an expected $146,000 deficit in a previous budget, which was pulled the day before it was to be presented to council.

City officials plan to make up the shortfall with money from a $150,000 contingency fund approved in this year's operating budget.

On July 21, the conference center's initial operating budget was pulled from consideration. Higher-than-expected bids on the center's food and beverage service contract, as well as a shortage of time for review by the city's budget office and city manager, resulted in the delay, city officials said.

The conference center is slated to open officially Sept. 2 and hold its first official function Sept. 5.

Councilman de Triquet questioned the latest budget numbers, some of which varied widely from the numbers initially proposed a month before.

``What's driving the balance sheet?'' de Triquet asked budget director Iris A. Hoskie. ``I think you'll agree that I have to be a little cautious with a balance sheet where every time expenditures go up, revenue goes up as well.''

Hoskie explained that the discrepancies between the old budget and new budget were due to new figures being available, including more precise revenue figures from local hotel and meal taxes dedicated to funding the cost of the $9 million center.

Hoskie said the first budget's initial shortfall of $146,000 was significantly cut after $300,000 in retained earnings from the 1996-97 fiscal year was added to the project's total revenue, giving the conference center an anticipated $2.58 million in revenue instead of the previous $2.28 million. The budget previously listed $140,600 in retained earnings.

Total expenses, however, have risen from $2.43 million to $2.64 million, creating the $64,000 shortfall.

The food and beverage contract has risen from an estimated $867,520 to $1.06 million and now accounts for 40 percent of the center's expenses.

Local meal and hotel taxes were raised by the City Council to help pay for the conference center, revenue that is expected to total $1.14 million. These funds alone account for 44 percent of the center's annual revenue. KEYWORDS: CHESAPEAKE CITY COUNCIL

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