County reviews options for financing fair

Tax options to help finance operating costs of Jackson County Fair appear tied to the county’s general fund and general fund tax rate.

According to Indiana code, operating expenses for county fairs can be financed as line items within the general fund budget, Mary Jane Michalak, from the communications office for Indiana Department of Local Government Finance, said Thursday.

Michalak added, however, state code does allow some bonding authority for county agricultural or horticultural societies operating county fairgrounds if the bond proceeds are aimed at making building improvements.

Charging a gate or parking fee is not under consideration by the fair board, although it has been discussed in the past, board treasurer Jack Montgomery said Monday afternoon.

The question of funding for the Jackson County Fair surfaced last month at meetings of the Board of Commissioners and County Council.

Fair Board member Jack Montgomery asked that the county approve $50,000 to repair the roof on the antiques building. Lean receipts from recent fairs have left the board in the hole by about $17,500, Montgomery said.

Council gave tentative approval to the request, and officials briefly discussed how money might be raised for future needs. Fairgrounds buildings and the property on which they sit southeast of Brownstown along Indiana 250 are owned by the county. The fair board operates the fair.

Montgomery suggested the county explore the possibility of a tax for the fair. Montgomery said Monday afternoon that counties surrounding Jackson County have a dedicated fair tax. He was uncertain whether that was part of their general fund tax rate.

Council President Andy Fountain said he suspects that tax rate — up to one-tenth of a cent — would have to fall within the county’s maximum general fund levy.

“I don’t think it could be a new tax,” he said Sunday night.

“With the economy still not recovering and the local income tax still not recovering, I’m not sure we have that room in the general fund for it,” Fountain added. “We’ll have to study  that during budget  time. I’d like to find some additional income for the fair, at least some maintenance funds.”

Councilwoman Debbie Hackman suggested in May the county consider tapping the Jackson County Visitor Center’s investment funds to help finance fair needs.

According to state law, convention, visitor and tourism promotion funds may be used to “promote and encourage conventions, visitors and tourism within the county and … promote and encourage industrial and economic development within the county.”

That definition would seem to put use of the innkeepers tax revenue for building expenses in doubt, although Hackman said last month that improving the fairgrounds would essentially promote the fair and therefore promote tourism.

For many years, commissioners funded a $23,000 line item in its annual budget for maintenance and premiums for the fair, but that allocation was dropped. Since 1997, the fair has received $20,000 annually from the visitor center’s income — collected through the innkeepers tax. The visitor center’s tax income also makes an annual stipend to Jackson County Industrial Development Corp.

Industrial development funding is capped at a maximum 25 percent of tax collections.

Questioned last week about the suggestion of using visitor center money for fairgrounds upkeep, Tina Stark, director of the visitor center, said its investments help finance its operating costs and act as an insurance policy against a catastrophe that could cut off or sharply reduce the flow of innkeepers tax revenue.

She pointed to fires that have destroyed a lodge and a music venue in Nashville in recent years and greatly cut into Brown County’s innkeepers tax revenue.

“The investment fund has a three-fold use, as an operating fund, rainy day fund and catastrophic emergency operational fund,” Stark said.

She added declining revenue has required the center to use some reserve funds for operating expenses this year.

Blaming the sour economy, Stark said the county’s innkeepers tax revenue dropped 12 percent from $313,842.94 in 2008 to $279,224.73 last year.

Stark would not comment on whether she thinks the innkeepers tax could be used for maintenace expect to say she’s exploring that possibility.

Other options?

For years, if not forever, admittance to the Jackson County Fair has been free. Has the fair board considered adopting gate or parking fees as have some county fairs in Indiana? Entrance to the Wayne County Fair is free, for instance, but the fair charges to park.

“That’s come up over the years, but the board doesn’t want to implement fees to get into the fair,” Montgomery said. “It’s a place where people can go,  enjoy themselves and not have to pay. It is the county’s fair and people should be able to visit without paying.”

Montgomery said it’s a “given” that fair attendance would suffer if gate or parking fees were charged. That, in turn, could cut into revenue generated from rides and fees paid by vendors.

“The thing that amazes people not familiar with the fair once they do go is the lawn chairs,” Montgomery said of the folks who set up chairs in an area between church food stands and the midway. “Those people come every day and see people they’ve not seen in a year. That would probably go away, too.”

Montgomery said he considers the fair to be a tourist destination for many from outside the county.

“Sometimes it’s more of a reunion than a fair,” he said. “People really look forward to it.”

His children often come home from California and North Carolina during the fair, whenever they can, Montgomery added.

The fair board also receives rental income for storing boats and campers inside fair buildings during the winter. That income is fairly consistent, Montgomery said. A Form 990 EZ for 2008 online shows rental income at $13,925.

Hackman asked Montgomery whether there was an opportunity to make more rental income by using buildings for receptions, such as at the Bartholomew County fairgrounds, where many wedding receptions are staged.

Montgomery said Monday the fair doesn’t have a building with heating and cooling or bathrooms for such purposes and added the fair’s contract for Brownstown Speedway could also affect such rental possibilities.

The fair receives income through that speedway contract as well. That income was pegged at $26,995 on the 2008 Form 990 EZ.

More recently, racetrack income has included a set fee plus income on utility use, Montgomery said.

“We get paid pretty much up front a set fee,” he said. “We wanted to avoid that roller coaster.”

That income roller coaster, he said, went up and down in past years with racetrack attendance, depending in part on how many races would be rained out in a particular season. It made budgeting difficult, he said.
“We’re getting consistency (with the flat fee),” Montgomery said. “Not as much (income) as in some years in the past, but some years would just be bummers. This is easier to set a budget with.”
Carnival income also goes up and down, based on the weather.

“If we have two or three days of rain, it really digs into the receipts on the carnival rides,” he said.

Other issues

One issue facing the fair board is the loss of some longtime members who basically lived for the fair, Montgomery said. Their dedication and ability to make donations and ferret out donations from others allowed the fair to operate with less income.

“People like Earl Goecker, Bob Kauffman and Herschel Rotert were retired and donated hours and often materials to make improvements and repairs,” Montgomery said. “They just lived for the fair and came up with ideas and found materials that could be donated. They made things happen.

“Now, those people are gone and we’re having to bid out projects at full cost in many cases,” he added.

There was an exception about three years ago, Montgomery said, when donors and volunteers came together to build a new cattle building.

“We were fortunate that Goecker Construction donated a major portion of the steel to us and erected that building and area agri-related businesses donated $32,000 to help put that building up,” he said. “The cost to put that building up without that steel and those donations would have been prohibitive to us.”

What are some of the fairgrounds’ needs?

“We need to put metal siding on some of the older wooden buildings to reduce routine maintenance costs,” Montgomery said.