Lake Junaluska: Annexation won't save conference center much money

By Vicki Hyatt | Aug 30, 2013
Photo by: Vicki Hyatt Jack Ewing, executive director at Lake Junaluska Conference and Retreat Center, is shown in the foreground of Stuart Auditorium, one of the oldest buildings on the grounds.


As discussions about a merger between Lake Junaluska and Waynesville falter, many are expressing concern about how the uncertainty will impact Lake Junaluska Assembly Conference and Retreat Center, the largest property owner at the lake.

In a recent interview, Jack Ewing, the center’s executive director, spoke about the issue and his words should ease the minds of many. For the center, there will be little difference financially between paying extra taxes as part of the Waynesville community or paying more to upgrade the aging water and sewer systems. Here’s his assessment.

Q. If water and sewer rates increase to the levels discussed at a recent community council meeting, what will be the financial impact on the conference and retreat center?

A. If we follow the Cavanaugh plan, which is an interim step, the increase would be 30 percent, about a $25,000 increase in water and sewer rates annually starting in 2014. In round figures, we pay somewhere north of $75,000 in water and sewer fees.

Q.  Is the increase a lot?

A. Our overall budget for operations is $11 million and the conference center budget is about $8 million, so it is not a huge percentage, but given how close we have been living to the edge, it is a significant amount. We ended the year last year with a positive $94,000. The impact of annexation on water and sewer would be a negative $25,000 rather than a positive $60,000 we would have gained from annexation.

Q. Will not merging with Waynesville will hurt the conference center?

A. We’re not looking to annexation as a savior of the conference center. We believed that strategically, just as the conference center needs to upgrade its facilities, the residential component of Lake Junaluska needed to look at its options. A task force concluded the best option was through partnership with Waynesville, which is labeled annexation. Waynesville is a highly effective, highly efficient municipality knows how to do this work really, really well.

Q. So why won’t annexation save you money?

It would have saved us water and sewer money, but we would also pay taxes on the same property that is taxed by Haywood County, which is about $59,000. There will be costs to maintain the bridge over the dam, which would become our responsibility (with annexation) and we would pick up costs of providing security at the center, which is something offered at many hotels. We told Waynesville that even if we were not required to pay property taxes, we would voluntary pay fees in lieu of taxes. While there will be a cost savings in one area, the reality is that annexation is not being considered or pursued to save the conference center money.

Q. What about landscaping costs and those associated with maintaining the lake?

A. Property owners at Lake Junaluska do not pay for the privilege of having that body of water there or all the amenities such as the tennis courts, walking path or the foot bridge. We pay for that, along with all the costs of maintaining the lake. We would continue to pay those costs. The service fees collected from property owners (including the conference center) pay for specifically for security, roads, lighting, storm drains and administration.

Q. How is business at the center? Are there any patterns in the past decade?

A. A number of historic groups that have been coming to the lake that have gotten smaller. The United Methodist Church is getting smaller and the church is aging. We’ve been impacted by that but  have been fortunate to make up for the decrease in size by bringing in groups such as the BoJangles managers or the Salvation Army. We are finding new markets to generate new business. The reality is there will always be changes based on the economy or the vitality of groups we are hosting. Our job is to figure out when something goes down, how to to make it go up elsewhere.

Q. I know you've realized a profit over the past couple of years. Is that adequate to address present and future needs?

A. It is adequate for the present, but will not be adequate for the future. Annexation would have given us the opportunity to focus on the mission of Lake Junaluska to be a place of Christian hospitality where lives are transformed. It’s about transformation and renewal. That’s why we exist. It’s our only mission.

Q. What about the surrounding community?

A. While the residential nature of Lake Junaluska has been around for 100 years, it was never intended for us to be a community that existed for the purpose of community. The real reason has been for people to come, whether they live here, are part-time residents or guests of the lake to experience the beauty and transformation of the area and in particular, this holy ground.

Q. How critical is the proposed $40 million upgrade to center facilities to the future?

A. Our mission can’t be fulfilled unless people come and they will not come unless we are attractive to them. Competition to host events like we have at Lake Junaluska is great. They compare us to conference centers that are associated with four-star hotels across the nation. We know to be competitive we have to upgrade our facilities. But we aren’t upgrading to be profitable. We’re upgrading our facilities to fulfill our mission. They are a means to an end.

Q. Will room fees be increased to cover higher costs? If so, is there a breaking point where guests may look elsewhere?

A. Room fees for 2014 were set in March 2013, so no costs we incur will be passed  on to guests next season. We will have to make it up through a whole variety of ways, most of it just through cost savings. Considering we balanced the budget last year and again this year on cost savings, we can’t keep cutting expenses and thrive. There are lots of opportunities  to generate revenue, but we have to figure out how to do that in a way our guests are willing to pay for it. There is a breaking point, of course, but we don’t know where that is. The fundamental principle is for them to leave believing that what they paid, whether for scoop of ice cream, a meal at Lambuth or a room at the Terrace was worth it.

Q. How would merging with Waynesville have helped address the center's immediate and future needs?

A. The merger would not have saved us money in order for us to then build $40 million of upgrades. It would have allowed us to focus on our mission, and it would have allowed us to be highly efficient and effective in the services provided. Things have been very good under Buddy (Young's) leadership, but we've operated on a "least we can do at the least possible cost" basis because that’s what we needed to do. We can’t do that any more.

Q. What is the estimated economic impact of the center's presence in Haywood?

The estimated impact of the WNC Annual Conference alone is $3.7 million for a one- week event. There are two ways to look at economic impact. We have an $11 million budget. It is often said for every dollar spent by an organization within an area — in our case the county — there is 10-fold economic impact.

Q. How is that spread around?

A. When we had the Salvation Army here for eight days, Stuart Auditorium had between 1,200 and 1700 people in there every day. We have 391 sleeping rooms, cottage rentals with 100 rented through us and  other apartments. When we have a large event, there’s always a  significant number of people who stay in Maggie and Waynesville. People also shop and eat and businesses in the county.


Q. Some have asked about working with the Lake Junaluska sanitary district, which would allow for loans to cover needed upgrades. Is that a viable alternative to annexation? Why or why not.

A. Theoretically it is an option because they do have access to grants that we as unincorporated community do not. But remember, they purchase water and sewer services from Waynesville, so they are not going to purchase services and give them to us at a discount or an equivalent rate. They’ve got to make a profit. Their current fees are significantly higher than even Lake Junaluska’s fees. As of Jan. 1 this year, 5,000 gallons here was $58.13, but the sanitary district charge was $77.91.


Q. Have you spoken with the district representatives?

We’ve had some conversations with the sanitary district. But our analysis is this doesn’t address anything except upgrading water and sewer infrastructure. It doesn’t address governance, streets or security. The municipal study task force did not pursue this option because when you simply look at the finances of it, it didn’t make sense. It was eliminated very early on in the study. Plus, the process to merge with this would be just as difficult to do as it would be to go in with Waynesville. It would still be considered a forced annexation and still require a referendum.

Q. What is the next step?

A. Our hope is between now and next spring there will be enough conversation and dialogue that some of the issues that had been raised late in the annexation discussion can be appropriately responded to and people will understand. Much of the opposition is based on a lack of understanding of what would happen.

Q. How would that happen?

We hope there will be community council and property owner meetings. We want to have even one-on-one conversations with people who express concerns. Some people  elieve we’re pursuing because will save conference center a lot of money. That is not the case. Overall, our cost savings, if anything will be minimal.


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