Monroe County electeds mull legal fees, COVID-19 relief money, innkeepers tax, food and beverage tax
By Lauren Kent
Monroe County, Indiana – At a work session held on Tuesday of Thanksgiving week, Monroe County councilors took care of some year-end appropriations, and talked with county commissioners about next year’s priorities.
A vote on extra appropriation to cover legal fees, amended by councilors from $30,000 to $18,126, was split 6–1
Some positive news was relayed from the commissioners office about the $4.7 million in CARES Act (Coronavirus Aid, Relief, and Economic Security Act) reimbursement funding that’s been awarded to the county. The state of Indiana has told the county to submit public safety personnel expenses as claims against the $4.7 million award.
That means the county will max out the reimbursement, according to Angie Purdie, administrator for the commissioners office.
Once the money is reimbursed to the county, it goes into the county general fund, according to Purdie, which means county councilors have flexibility to spend the money as they judge to be appropriate.
Less flexible in the way it can be spent is revenue from the countywide food and beverage tax, which is split about 90-10 between Bloomington and Monroe County government. The county’s current fund balance for the food and beverage tax is $554,194, even after distributing nearly $400,000 worth of grants for COVID-19 relief to businesses and nonprofits earlier this year.
Councilors will be weighing whether to put some of that fund balance towards additional business relief, or using it to backstop shortfalls in the revenue from the innkeepers tax, due to the COVID-pandemic. The innkeepers tax is a key source of revenue for payment of $636,000 in debt service on the land surrounding the convention center and the most recent renovation to the center.
A meeting of the county’s 5-member convention and visitors commission is set for noon on Wednesday, Dec. 9. The meetings have not typically been broadcast on CATS, but based on conversation at Tuesday’s county council work session, the link to the Zoom video conference is expected to be included on the list maintained on Monroe County’s website.
Legal department appropriation
On the county council’s agenda was a request from the legal department for an appropriation for $30,000. According to county attorney David Schilling, the additional money was needed to cover litigation expenses for the rest of the year, settlements, and insurance bills. He said the county usually gets hit with a large number of bills in December.
Schilling highlighted the fact that $25,000 of the requested appropriation relates to an anticipated billing from Eubanks and Associates. That’s the law firm that is representing the county in connection with the lawsuit the county is pursuing against the U.S. Forestry Service over a logging project planned for the Hoosier National forest just southeast of the Monroe County line. The county’s environmental commission voted in mid-May to join the lawsuit.
The county council voted 5–2 in mid-April to fund the lawsuit, over dissent from Marty Hawk and Geoff McKim.
On Tuesday, Hawk said, “I don’t support this lawsuit at all. And I think that it was inappropriate. I said so at the time. And I continue to have that opinion.” Hawk added, “I believe that if more dollars are needed, at the very least it needs to come out of the commissioners’ already appropriated budget.”
On Tuesday, McKim put his objection to funding the lawsuit in the context of the county’s obligation to pay its bills: “I’m opposed to pursuing this litigation—I don’t want to spend one dime more on it. But on the other hand, I certainly acknowledge that we need to pay our bills.”
McKim said he was inclined to subtract from the appropriation the $25,000 that had been set aside for paying the legal fees, because an additional appropriation could be made when those fees are actually incurred.
McKim eventually modified his proposal when it became apparent that about $7,000 in work had already been billed by Eubanks.
Councilor Peter Iversen was the sole vote of dissent against lowering the appropriation from $30,000 to $18,126.
Hawk did not support even the lower amount, because it still included the Eubanks invoice. She said the county commissioners should pay that amount out of their own budget. County attorney Margie Rice told Hawk that the commissioners had been asked, and they’d said commissioners don’t have any funding to help with litigation costs.
The vote on the reduced appropriation was 6–1 with dissent from Hawk.
CARES, convention center, innkeepers tax
Julie Thomas, who’s president of the county’s board of commissioners, reported to the county council on Tuesday on the status of $4.7 million in federal reimbursement funds that have been awarded to Monroe County through the state of Indiana.
The county has so far reimbursed businesses and social service organizations for a total of $207,646, Thomas said. The program ends Monday, she said.
Thomas described how a contractor is processing the claims. The $70,000 agreement with Dee Owens for administration of CARES Act reimbursements was approved by the county commissioners in mid-July.
Administrator for the commissioners, Angie Purdie, had said earlier in Tuesday’s meeting that the state of Indiana did not seem to want to process individual claims.
Purdie told county councilors, “The state just said they would prefer that we use our public safety personnel costs. I think they got tired of submitting individual requests for reimbursement based on COVID.” Purdie added, “So we have been able to submit all of our personnel costs associated with the sheriff’s department, I think some of the health department, and some other things.” Purdie concluded, “We are anticipating being able to maximize our county reimbursement from the state, of the $4.7 million that was allocated to Monroe County.”
Purdie said the money reimbursed by the state goes into the county’s general fund.
McKim followed up by saying, “I just wanted to put an exclamation point on what Ms. Purdie said. But yes, that is exactly right. What goes into general is just county general funds. At this point, there’s no additional reimbursement or tallying that needs to be done.”
Thomas mentioned the nearly $400,000 in COVID-19 relief grants that had been given to businesses outside Bloomington city limits, by tapping the county’s share of food and beverage tax revenues.
Thomas also noted that the county’s current food and beverage fund balance is $554,194.
Revenues from the 1-percent food and beverage tax, which is paid on purchase of all prepared foods and beverages, have been hit by the COVID-19 pandemic, but not as hard as some had anticipated. The numbers in September’s report from this year were even slightly higher than for last September’s report. But this year’s October figures were about 70 percent of 2019’s revenues.
Under state statute, food and beverage tax revenues have to be spent on the planned convention center expansion, or related tourism investments. Thomas noted that one of the possible ways food and beverage money could be spent would be on debt service for the existing convention center.
By April next year, the convention center will have about $2.8 million in principal left on debt that was incurred for acquisition of land around the center and renovations to the existing building.
At a September budget meeting, Mike Campbell, who serves on the county’s 5-member convention and visitors commission, told the county council that April is a significant milestone, because at that point the principal could be paid back with no penalty. That would save about $275,000 in interest, Campbell said, which he called “not insubstantial at all.”
The county government’s 10-percent share of the food and beverage tax—the other 90 percent goes to Bloomington—will not amount to enough to pay off $2.8 million of principal by April next year. But the existing food and beverage fund balance of $554,194 could be put towards the debt payments on the convention center, which might be needed, given the shortfall in the revenue that comes from the 5-percent innkeepers tax.
Based on projections given by Campbell in September, innkeepers tax revenue was starting to recover from a low of about $49,000, reported in June this year. That was just 17 percent of the total for June in 2019, which was about $289,000.
Councilor Kate Wiltz, who serves on the convention and visitors commission said on Tuesday that the CVC’s existing cash reserves could cover two of next year’s quarterly payments. So there is not, Wiltz said, “an immediate crisis.” The annual amount of debt service is $636,000.
McKim described the food and beverage fund balance in terms of the quarterly debt payments, saying that three and a half of the payments could be made with the $554,194 fund balance. “So I think that that provides a pretty powerful insurance policy against continued challenges with the innkeepers tax,” McKim said.
Thomas asked county councilors to consider her report in a broader context: “So that brings us to the big question. How are we going to establish our priorities for 2021?”
President of the county council, Eric Spoonmore told Thomas, “We can certainly identify some council representatives, that could be a part of an informal work group that could work with commissioners on identifying what these priorities need to be.”
Later in the meeting, Spoonmore invited any county councilors to let him know, if they are interested in working on an informal group with commissioners.
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