Kokomo — Kokomo/Howard County Convention and Visitor’s Bureau’s plan to retire the bonds for the Kokomo Event Center by the end of the year has hit a possible roadblock.
The CVB learned Wednesday from the Howard County Council that the building corporation formed to purchase the Event Center is the only group that can determine how the funds in the reserve for the bond payment can be used.
Kim LaFollette, treasurer for the CVB, said there is $400,000 in reserves and no one had previously informed the CVB board that the bonds couldn’t be retired.
LaFollette told council members the 2011 budget was prepared with the expectation that the bonds would be retired utilizing funds in reserve and there would be $342,311 in anticipated revenues from the innkeeper’s tax.
The CVB board had wanted to retire the bonds early and use all of the 5 percent from the innkeeper’s tax to pay for its operations starting in 2011.
Currently 40 percent of revenue from the innkeeper’s tax goes to retire the Event Center bonds and the remaining 60 percent funds the CVB. The bonds are scheduled to be retired in 2013, at which point the innkeeper’s tax will be reduced from 5 to 4 percent.
County Attorney Larry Murrell said the building corporation controls the funds. However, he said it was administratively dissolved by the Indiana Secretary of State’s office for the failure to file paperwork.
“We’re in the process of reforming the building corporation,” Murrell said. “When it is reformed, it will repay the county $55,000 for the roof repair.”
Councilman Paul Wyman, R-2nd District, said when the county takes ownership of the Kokomo Event Center, it wants the building in good repair.
“The only funds available are in the reserve fund,” he said. “Those funds should go to repair the building.”
LaFollette said the CVB board was told the reserve funds can only be used to pay off the mortgage.
“Did you ever ask the building corporation if the mortgage could be paid off?” Wyman asked.
LaFollette said the CVB was told the reserve funds could be used for the bonds. She said the innkeeper’s tax has provided $2.5 million to pay off the bonds for the Event Center.
“You’re looking at the tourism industry to pay for repairs,” she said. “Paying $1,500 to $1,600 per month in interest, as a banker, doesn’t make sense.”
LaFollette said employees took a 20 percent pay cut in 2009 when revenues declined and the proposed budget restores 10 percent of the salaries.
“Your entire staff was in the top 10 [in terms of pay] among county employees,” Wyman said.
LaFollette countered that the staff members were paid according to their experience.
Wyman said the CVB should be discussing what will be done with the proposed 2011 budget if the bonds are not retired.
LaFollette said the budget will have to be revisited if the bonds are not retired.
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