City’s hotel tax money sits unspent in general fund

The city appears to have more than $1.8 million in hotel sales tax revenue accrued in the general fund that should have been disbursed to Trotter Convention Center.

During a discussion at Thursday’s city council work session, Mayor Keith Gaskin said Trotter director Rogena Bonner had brought to his attention the convention center had not received those funds in several years.

“I don’t think the funds are being used at the wrong place. I just think they are (going into) the wrong fund as a whole,” Bonner said, noting she hasn’t seen any of the revenue since joining the city in 2019. “That money is used for the upkeep of the Trotter, and I want to make sure if it’s in the wrong place that going forward it’s put in the right fund.”

City Attorney Jeff Turnage explained that the hotel tax had been in place since 2005, and that 2 percent of hotel/motel bed rental was supposed to go to the “operation and maintenance of the convention space.”

In 2005, the legislature passed a local-private bill that said the money was to be used to promote conventions and maintenance of the convention center. The tax money would be collected and sent to Jackson, which would then in turn send the city its share, Turnage explained.

“I think, reading between the lines, because the city had a bond issue back in that era to fix up the Trotter,” Turnage said. “That bill paid off that debt, but it did not have a sunset and is still in effect. The (current) dollar amount, I couldn’t tell you.”

Turnage said this tax is different from the 2-percent tourism tax that goes to the city, Lowndes County, the Convention and Visitors Bureau and the Golden Triangle Development LINK — which is collected from sales of prepared food and beverages.

During the work session and immediately after, no one knew how much hotel tax money was coming in, where it was going or why it wasn’t being transferred to The Trotter.

Gaskin told The Dispatch later Thursday that he, human resources director Pat Mitchell and interim chief financial officer Linda Holliman found the money still sitting in the general fund.

Gaskin said that records went back to 2013, when the city changed accounting software, and there was a balance of $830,000 in the account then.

“As or Jan. 31, 2022, there was $1,873 million in that account, and it had all gone into the general fund,” Gaskin said. “We’re not sure that that number is accurate, and we’re going to get our auditor to look at it.”

The last time the money was used was in 2018, Gaskin said, when about $50,000 was taken out to build the enclosure around the patio area at the lower level of the Trotter.

The tax issue arose while officials were discussing possible rate increases to use Trotter facilities. Gaskin told The Dispatch this morning more research is needed as to whether those hikes would be necessary once the hotel tax is being disbursed properly.

This is at least the second time that the city has struggled with what is in certain funds. Previously, during a discussion about potential pay raises, the council was told that officials had no clear idea how much money was in the city’s insurance fund or how that fund was maintained.

Gaskin said this was another example of why the chief financial officer and chief operations officer needed to work together.

“Those two positions need to be working closely together so there’s a backup,” he said. “We are working now to put together a list of all those funds and how they are dispersed. With this fund, the last time we can see that there was a transfer made was 2017 and obviously something went wrong between then and now.”

COO Jammie Garrett started at City Hall earlier this month. The city is still searching for a CFO to replace Deliah Vaughn, who left in September.

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