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August 22, 2012 11:35:11 AM
A resolution passed by the Columbus-Lowndes Convention and Visitors Bureau Board of Directors is being criticized by some Columbus city officials. The CVB Board on Monday voted to ask the city to stop placing the funds from a two-percent hotel tax into the city's general fund and to start using the money to "promote tourism by expanding the Trotter Convention Center."
"It is my understanding the city is placing the hotel tax into the general fund," CVB Executive Director Nancy Carpenter told her board members Monday.
Columbus Chief Financial Officer Mike Bernsen said Tuesday that Carpenter's statement is misleading.
"Throwing out an arbitrary statement that we are placing the hotel tax in the general fund is not true," Bernsen said. "When it comes to the city and taxes, we send the CVB the biggest portion -- the two-percent restaurant tax. We gave them almost $1.6 million from the two-percent restaurant tax this year alone. The other two percent -- the 'hotel percent' goes strictly to the upkeep of the Trotter (Convention Center)."
Bernsen said collected hotel tax, which averaged approximately $250,000 this year, is placed into a special account and it is then placed in the city's general fund where it is used specifically for the Trotter.
"The Trotter Convention Center is a city department," said Bernsen. "It, like every city department, is funded through the general fund. As a matter of fact, it has a budget of almost $307,000 plus an additional $18,400 in debt re-payment -- its actual budget is $325,573. The $250,000 collected doesn't even cover its budget. We also keep part of that money in a special fund just for the Trotter. That account currently has $75,000 in cash -- this money is used for the upkeep and repair of the Trotter."
The original bond for the Trotter, according to Bernsen, was paid off in 2006. In September 2008, almost $200,000 was borrowed to pay for repairs at the facility. The department's budget is also supplemented by rental fees on the facility.
"This is taking into account about $115,000 in rental fees," Bernsen said. "This is about $10,000 less than what it was at its peak."
Frank Goodman, Director of the Trotter, said the CVB should possibly look at other ways of funding the Trotter.
"We work with a budget --that is how the tax money is supposed to be used, to fund the Trotter," Goodman said. "Sounds like the CVB is overstepping their boundaries. Maybe they should set aside some of their money to help us instead of funding all of those festivals."
CVB board member Harvey Myrick, who voted to support the resolution, would not comment on it when contacted Tuesday afternoon.
Rep. Gary Chism, R-Columbus, said the city is well within its rights to fund the Trotter with the two-percent hotel tax.
The two-percent hotel or "convention tax" was created in 1983. House Bill 1069 deleted the "repeal" language, meaning the legislature does not have to approve the tax every four years. While the two-percent restaurant tax can be repealed in 2018, it is up to the city if and when the hotel tax can be repealed. Under Section 2 of HB 1069, it states, "For the purpose of providing funds to promote conventions and to construct and maintain convention facilities in Lowndes County, Mississippi; there is hereby authorized a "convention tax" to be levied upon every person, firm or corporation operating hotels or motels in Lowndes County in an amount not to exceed two percent (2%) of the gross proceeds of sales from room rentals of all such hotels or motels in Lowndes County. Such tax shall be in addition to all other taxes now imposed."
"The CVB can't legislate how the money is spent," Chism said. "The CVB wasn't even in existence when this was created. They aren't even listed as an entity."
Mayor Robert Smith concurred with Chism on the validity of the CVB's request.
"How can the CVB dictate how we spend the money?" Smith asked. "It's not for the CVB to decide. We don't tell them what to do with their restaurant money. Who are they to tell the mayor and council how to spend that money?"
CVB board member Nadia Dale, who made the motion on the resolution, said her intent was to only get a discussion going with the city about the hotel tax.
"My intention was to ignite the conversation with the city on the hotel tax," said Dale. "It's something that has been discussed for a long time. I think it's something that can improve the convention center and our city. It's just a request -- that's all."
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