Southeastern North Carolina Agricultural Center and Farmers Market in Lumberton, NC

Fiscal Research Division _ Natural & Economic Resources Southeastern North Carolina Agricultural Center and Farmers Market in Lumberton, NC Justification Review May 1, 2012 SEN C AC underperforms relative to other facilities and requires the most significant General Fund subsidy Executive Summary In FY 201 1-12, Fiscal Research Division staff conducted a justification review of the Department of Agriculture & Consumer Services’ (DACS) Southeastern North Carolina Agricultural Center & Fanners Market (SENCAC). Staff found that while SENCAC provides a hospitable place for meetings and events, visitation and revenue are low relative to DACS’ other facilities. SENCAC requires the largest General Fund subsidy as a percentage of total expenditures, 77 percent. The Charlotte and Asheville farmers markets each require a subsidy of about 25 percent; the Agricultural Center in Williamston requires a 62 percent subsidy. Facilities in Raleigh, Colfax, and Fletcher are self-supporting. In FY 201 1-12, SENCAC requires $362,230 in General Fund appropriation. With the opening of the multi-purpose pavilion, DACS is requesting an additional $392,200 from the General Fund for operations and lists over $2.1 million in outstanding pavilion needs. Given SENCAC’s expansion, staff is concerned that DACS has no business plan or performance measures that can be compared to other facilities for SENCAC. From a broader perspective, all of DACS’ farmers markets and agricultural centers are enterprise-type operations that compete with public and/or private facilities. It is reasonable to expect that these facilities should operate like businesses, with thoughtful planning and evaluation and the goal of being self-supporting. To address these concerns, staff recommends that the General Assembly: 1 . Cease General Fund support for SENCAC’s current business model; 2. Provide nonrecurring support in FY 2012-13 and require DACS to evaluate SENCAC’s operations and recommend an alternative operating model or plans for closing the facility; and 3. Require DACS to develop business plans for each farmers market and agricultural center as well as a system- wide strategic plan. Scope and Methodology This report on the Department of Agriculture & Consumer Services’ (DACS) Southeastern North Carolina Agricultural Center & Fanners Market (SENCAC) is one of four “justification reviews” of State government programs required by S.L. 2011-145, Sec. 6.6. The Fiscal Research Division’s (FRD) objectives for each justification review are to: • Provide a description of each program; • Identify major policy issues that the General Assembly should address; • Explore means to achieve program objectives more efficiently; • Characterize the likely results of alternative funding levels and opportunities to save taxpayer dollars; and • Identify performance measures that have been established by the agency and the usefulness of those performance measures as well as the agency's progress toward meeting their established measures. To accomplish these objectives, FRD visited SENCAC as well as two other State fanners markets (Asheville and Raleigh) and one agricultural center (Asheville).