Cumberland Times-News

September 30, 2013

Allegany County rejects Canal Place funds appeal

Matthew Bieniek
Cumberland Times-News

— CUMBERLAND  — Canal Place received the same response to its funding request from Allegany County commissioners that it got from Cumberland Mayor Brian Grim: Don’t expect any additional funding.

The response came in a Sept. 25 letter from Commission President Michael McKay, which was released to the press Monday.

“I concur with your assessment that Canal Place ‘plays a significant role in the tourism economy in Cumberland,’ however, similar to the county's position with respect to Rocky Gap, the CPPDA (Canal Place Preservation & Development Authority) should be a self-sustaining entity without the ongoing assistance of local public funds,” McKay wrote. McKay wrote the letter to Andy Vick, chairman of the authority. Vick wrote a letter Sept. 19 to county and city officials requesting the city and county restore appropriation of hotel/motel tax dollars generated by the Fairfield Inn and Suites.

Both the city of Cumberland and Allegany County have phased out funding for Canal Place from those taxes.

Vick asked both government bodies to restore that funding.

The situation remains dire, Vick said in the letters to Grim and McKay.

“As you are aware, the ... authority is facing a funding gap for FY 14 (fiscal 2014) and a more serious shortfall for FY 15 and beyond. ... Although Canal Place is working diligently to become financially self-sufficient, we are not there yet, and we continue to need the county’s support to sustain our ongoing operations,” Vick wrote to McKay.

The letter to Grim contained similar language. Vick said the authority uses the funds to pay for grounds upkeep, among other things. He attributed the funding gap primarily to the withdrawal of the hotel/motel tax funds.

Canal Place is facing a loss of more than $100,000 for fiscal 2015.

McKay said that since the authority is a state agency, the state should fund Canal Place.

“If additional financial support is needed beyond what is currently being generated by existing tenants, the state of Maryland should be the primary funding entity, not the county or the city of Cumberland. With the continued loss of state funding to both the county and our municipalities, and as an appointed member of the authority board, I cannot endorse any strategy to continue providing to the authority any local public funds,” McKay said.

Canal Place should look to other funding options, McKay said.

“At this time, perhaps it would be best for the authority board to consider an alternative management and operational approach to bridge the funding gap it now faces. If the state of Maryland is unable to provide the requisite funding needed to even support the basic maintenance and upkeep of their own property, perhaps it's time for us to revisit the core roles and responsibilities of the CPPDA moving forward,” McKay said

Grim also rejected Canal Place’s request last week.

The change in funding has been known for some time, with both the county and city voting to turn off the funding for Canal Place from the hotel/motel taxes.

The tax is collected by both the city and Allegany County, and then distributed to Canal Place and other nonprofit entities.

As of fiscal 2015, Canal Place will no longer receive any of the tax dollars.

Dee Dee Ritchie, executive director of the authority, has said she doesn’t think the authority can become self-sufficient anytime soon.

Payments from the hotel/ motel taxes began in fiscal 2010 with the county granting 2 percent of its share of revenue from hotel/motel tax from Fairfield to Canal Place. The funds were to be used for capital upkeep and maintenence of nonhotel lands and were not to be used for operating expenses or personnel, according to the initial agreement.

Contact Matthew Bieniek at mbieniek@times-news.com.