Kennesaw’s top tourist attraction, the museum, has been running annual deficits for more than a decade, and is expected to operate at a deficit again next year, according to the 2014 budget that was approved Sept. 16.
While some residents cite the positive impact tourists have had on the city, others are concerned that the city is not handling its finances with their tax dollars in mind.
During a City Council meeting last week, Kennesaw resident Patricia Powers expressed concerns that taxpayers were heavily subsidizing the activities of the museum and gardens.
To keep these facilities afloat, “residents are paying a lot of minimal fees, and they need to be funded by the people who use them,” Powers said.
To help the museum and gardens balance their books, the city has been transferring money to them each year from the city’s general fund, which is fed by fees and taxes paid by Kennesaw residents.
In the 2013 budget alone, city officials transferred $557,643 to the gardens and the museum. That figure is expected to rise to $616,322 in the 2014 budget, which was adopted by a 3-2 vote of the council.
How the museum grew its exhibits, and its debt
The Southern Museum of Civil War and Locomotive History began as The Big Shanty Museum in 1972, when Georgia obtained The General locomotive from the state of Tennessee.
It was housed in the old Frey cotton gin, and continued to grow, as more locomotive and Civil War history were added to the exhibits.
The museum’s first big growth spurt took place in 2001 when it received the proceeds of a $4.9 million bond and joined the Smithsonian Affiliations Program, which enabled it to display Smithsonian exhibits and artifacts.
Twelve years later, the city still makes payments totaling about $435,000 per year to retire the bond debt, with $3.2 million still remaining to be paid back, said Pam Davis, the city’s spokeswoman.
Last year, the Southern Museum of Civil War and Locomotive History ran a deficit of $416,458, as its total expenditures were $764,188. The museum only made $347,730 from admission fees, gift shop sales, rental fees and donations.
“It’s basically a huge debt we have to pay for this thing every year,” Councilman Bruce Jenkins said. “I think the original idea was based on assumptions, that it would serve as an anchor to the downtown and be an economic engine for growth. But what they failed to take into account was that the economy would tank and people would have less money for vacations and take their vacations closer to home.”
That means fewer railroad buffs are making the drive from Pennsylvania or New Hampshire to visit the impressive little museum in Kennesaw.
The bond, which was not put before voters for their approval, could be paid off early if the city chooses to do so, Davis said.
“I’ve had grave concerns for years about the cost, that we haven’t been able to find ways to increase the revenue stream against the cost to the taxpayer. It’s been very difficult. …We need to look at some serious, serious answers to get this in a better position for us financially,” Jenkins said. “The late councilman Bill Thrash and I would constantly bring this up every year.”
Jenkins said he voted against this year’s budget, largely because of the museum and gardens becoming a huge burden on the taxpayers.
What irks Jenkins most of all, he said, is that residents have to pay “twice” for the museum — first on their tax bill and second if they choose to actually visit the facility.
Adult visitors to the museum pay $7.50 for museum admission.
“I have always felt that this museum should be free to the residents of Kennesaw. You’ll still get residual income, from family of residents and out of town visitors,” he said. “But I feel like they’ve already paid for this facility once and I don’t feel like taxing them twice is right.”
Grant to partially fuel new expansion
The museum is expecting to receive a $500,000 grant next year from the TEA Federal Highway Administration to build a new education center, which is expected to be matched by the Museum Foundation.
The new education center is expected to cost between $900,000 to $1.1 million, said Davis.
The museum has nine full-time employees while the gardens employ three full-time employees, including a newly appointed executive director, and three part-time employees. Dr. Richard Banz, the museum’s executive director, earns a salary of $64,722.
Gardens not breaking even, either
The Smith-Gilbert Gardens cost the city $314,189 to operate last year, and only brought in $173,000. Next year, the city has $379,274 budgeted for the gardens, but they are only expected to make $180,260.
The gardens rely heavily upon volunteer support, which is considered vital to the running of the gardens, said Carrie Camden, who works at the gardens.
The gardens also host weddings, school groups, and tours of the property, which do not make enough to cover the budget shortfall.
Residents speak out at council meeting
Residents at Monday night’s meeting spoke highly of both attractions, but admitted that they didn’t visit them frequently. Many believe the city should contract with a private company to operate the museum and the gardens. Others proposed a smaller operating budget.
Mayor Pro-Tem Jeff Duckett did not seem overly concerned about the deficits because they help bring tourist dollars into the city. Some have referred to this as the “spin-off effect” of tourist attractions while others call it the “halo effect,” a reference to the fact that the destination itself may lose money but it brings more customers into town and helps support nearby restaurants, shops and other businesses.
Cobb Travel and Tourism estimates the economic impact of the museum to be more than $4 million annually, and the garden’s impact at more than $700,000.
In 2012, the gardens had 6,167 visitors and, so far this year, the gardens have attracted 6,221.
The museum had 32,049 visitors in 2012, and that has grown to 35,792 this year.
“The museum has a ‘halo effect’ to the rest of the downtown,” Duckett said. “It is hard to put a money amount on how much it helps to bring in to neighboring businesses,” Duckett said, adding that the attractions are, “not set up to make a profit, because they enhance the (city’s) quality of life.”
Mayor Mark Mathews said that the museum and gardens add to the quality of life that the residents of Kennesaw expect from their city.
Like parks and recreation, sanitation and public works, the museum and gardens all add to the value of living in Kennesaw, and should not be seen as a business like Kroger, Publix or McDonald’s, which are expected to make profits, he said.
The museum and the garden have their own foundations, he added, which have helped to fund-raise and bring in sponsorships, saving the city from transferring money from the general fund into balancing the museum and garden’s budgets.
Yet Sam Paglioni, a resident who spoke at the meeting last Monday, asked the council to figure out why the attractions are losing money rather than focusing on quality-of-life issues.
Gift shop turnaround
Banz hired an associate, Jenkins said, to run the gift shop, and her efforts have helped to make that part of the operation profitable as sales have jumped 15 percent.
“If we can get the rest of the museum to that point, we’ll have things turned around,” Jenkins said. “That’s what it will take.”
Residents don’t necessarily want to wait very long to see the fortunes of the railroad museum turned around, they said at the meeting.
“If a museum doesn’t change its static display, people are not going to come back. I like the museum, but it needs to be run a little more efficiently,” Paglioni said, before sitting down to a standing ovation from other residents in the council chamber.
“The question demands, is the halo effect really worth all that this is costing the taxpayer?” Jenkins said. “Are we really getting $600,000 or $700,000 worth of halo generated for downtown?”
Jenkins said he would like to see the City Council consider outsourcing the museum to a private company, just as it has recently done with the city sanitation services, “saving the city thousands of dollars in the process.”
That’s a solution Councilman Matthew Riedemann said he would also like to discuss. He voted in favor of the budget but isn’t happy with the museum and the gardens hemorrhaging cash.
“The museum, as well as the gardens, were charged with the task of raising enough money to run as a business, without being a drain on the general fund of the citizens,” said Riedemann, a recent appointee to fill Thrash’s seat. “I’m still trying to dig in and come up with an intelligent plan. Should we privatize it? I don’t know right now. But all options at this point should be on the table.”
The Southern Museum of Civil War and Locomotive History
Address: 2829 Cherokee St., downtown Kennesaw
Executive Director’s Salary: $64,772
Visitors in 2012: 32,049
Visitors so far 2013: 35,792
Admission: $7.50 adults, $5.50 children ages 4-12
2013 Revenue: $347,730
2013 Expenditures: $764,188
2013 DEFICIT: -$416,458
The Smith-Gilbert Gardens
Address: 2382 Pine Mountain Road, Kennesaw off Cobb Parkway
Employees: 3 full-time, 3 part-time
Executive Director’s Salary: $40,798
Visitors in 2012: 6,167
Visitors so far 2013: 6,221
Admission: $7 for adults $5 children ages 6-12
2013 Revenue: $173,000
2013 Expenditures: $314,189
2013 DEFICIT: -$141,189