Published: September 27, 2009 10:16 pm      

CVB revenues down 39 percent

Board hoping to restructure Event Center mortgage.

Revenue generated by the innkeeper’s tax is down 39 percent for the year, and the deficit is having a negative impact on operations of the Howard County Convention and Visitor’s Bureau.

During a meeting Thursday, board members learned the amount collected in Howard County through the 5 percent innkeeper’s tax is down $140,348 through the end of August.

The tax has generated $217,872, and of that $87,149, or 40 percent, has gone toward paying off the mortgage for the Kokomo Event Center. Tax collections are down 29 percent, or $89,413, from the 2008 revenues.

In July the board voted to cut employee salaries by 20 percent for the remainder of the year, raised employee contributions for health insurance from 10 to 15 percent and eliminated group life insurance for employees in 2010.

Executive director Peggy Hobson said each employee is taking one day off per week, but the office remains open Monday through Friday.

“We have been able to keep expenses down,” Hobson said.

To date this year, expenditures have been cut by $83,925, or 22 percent, of the $374,726 budgeted for the first eight months of 2009.

Board members are working with county officials in the hopes of eliminating or refinancing the mortgage amount.

Board President Kelly Karickhoff said there is approximately $600,000 left on the mortgage for the Kokomo Event Center and there is an estimated $400,000 in the mortgage reserve fund.

The mortgage reserve funds can’t be used to pay for operating expenses.

From 1997 through August 2009, a total of $2.2 million generated in innkeeper’s tax revenues has gone toward paying off the mortgage.

When asked about the impact on the 2010 budget, Karickhoff said the board is hoping to resolve the mortgage issue before the end of the year.

“We’re going to look at the numbers for 2010,” she said. “We will have to make some decisions in December.”

The CVB previously received 4 percent of the innkeeper’s tax for operating costs. When the Event Center mortgage was added, the tax was increased to 5 percent, but funding for operations was reduced to 3 percent.

The innkeeper’s tax is scheduled to drop to 4 percent in 2012 when the mortgage is scheduled to be retired. CVB board members want to maintain the 5 percent tax rate for operating costs and to build up reserve funds.

• Ken de la Bastide is the Kokomo Tribune enterprise editor. He can be reached at (765) 454-8580 or via e-mail at ken.delabastide@kokomotribune.com