At the Lancaster County Convention Center Authority meeting held on November 27, 2007, LCCCA chairman and acting director Art Morris reported on the state of contingency funding for the taxpayer-financed hotel and convention center project. Mr. Morris had been asked by the LCCCA board to study if currently available reserve funds will be adequate to complete the construction of the project.

The March 2007 construction budget included $1.3 million for contingencies. This same budget anticipated a rapidly increasing contingency fund, to nearly $8.5 million by the end of October 2007. This contingency fund was budgeted to grow to $12.8 million by April of 2008, then gradually decrease to $3.226 million by the anticipated end of construction in March of 2009.

Unfortunately, this same budget included inadequate funding - or no funding at all - for certain items, such as construction legal fees. The anticipated "value-engineering" cost savings never materialized to the amount planned. And change orders, partially due to rock removal and unanticipated architectural issues, began rolling in immediately.

At the time of the Wachovia construction bond sale at the end of March, 2007, State Sen. Gib Armstrong had promised the LCCCA $1.5 million in additional State funds for "hard cost" contingencies. This money has not yet been approved by the State in writing, but Art Morris reports the LCCCA has received a "letter of intent" that these taxpayer dollars will be available.

As of November 2007, the LCCCA has approved $1,061,000 in change orders. Many more are still waiting to be submitted for approval. Art Morris reported that out of the total of $2.8 million in existing contingency funds, he expects that $882,000 will be available for future unanticipated expenses. Everyone involved is convinced that this will not be nearly enough to compete construction of the taxpayer-financed hotel and convention center project. The amount of money that is expected to be needed for completion of construction of the convention center is $3.26 million.

LCCCA chairman Art Morris reported that he has been in discussions with the Penn Square Partners, including over their own contingency needs. Penn Square Partners reports that they anticipate the need for an additional $2.7 million to complete the hotel and "shared space". Left unsaid was that the Penn Square Partners are refusing to put any additional money of their own into the "private" hotel and "shared space". Complicating all of this is a passage from the "Joint Development Agreement", as amended, which clearly states that HALF of all future additional funding for the LCCCA must be shared with the Penn Square Partners.

Consequently, the Lancaster County Convention Center Authority plans to ask for an additional $6 million taxpayer dollars from the State of Pennsylvania. LCCCA chairman Art Morris has already had discussions with State Sen. Gib Armstrong to request this funding, and Sen. Armstrong reportedly will do everything he can to provide additional State taxpayer dollars to provide adequate contingency funding for the taxpayer-financed hotel and convention center project.

LCCCA chairman Art Morris admitted that if the State of Pennsylvania fails to provide the necessary funding to compete the hotel and convention center project, alternative sources of funding must be found. Since the LCCCA has no sources of funding other than the "hotel tax" and State grants, without additional State money the LCCCA would be forced to ask Lancaster County for a substantial increase in the "hotel tax".

Will an additional $6 million - on top of the already additional $1.5 million from State Sen. Gib Armstrong - be enough money to complete the taxpayer-financed hotel and convention center project? Only time will tell.

UPDATE: as of the March 27, 2008 LCCCA board meeting, none of this additional funding is yet available.