Kokomo/Howard County CVB cuts salaries, increases health insurance contribution

ken.delabastide@kokomotribune.com

The tough economy is having a dramatic impact on the employees of the Kokomo/Howard County Convention and Visitors Bureau.

The CVB board on Thursday voted to cut employee salaries by 20 percent for the remainder of the year, starting July 1.

The board also voted to increase the employees' contribution toward health insurance from $20 to $53 for the remainder of 2009 and to increase the contribution to $80, starting Jan. 1. Employees currently pay 10 percent of the premium costs and that will increase to 15 percent on July 1.

"It's heartbreaking that we have to make this move," said Kim LaFollette, treasurer for the CVB. "We hope it is temporary."

LaFollette said the staff does an excellent job of promoting the county.

Revenue from the innkeeper's tax has dropped by 32 percent for the year, from $171,000 collected through May 2008 to $116,000 through May this year.

LaFollette said 40 percent of the tax revenues, or $46,464, has gone toward making the mortgage payment on the Kokomo Event Center through May.

The board approved the 2010 operating budget at $326,900, which is $38,689 or 10.5 percent less than the 2009 budget of $365,589.

LaFollette said salaries and advertising in 2010 were kept at the same amount as was the $8,000 budgeted to upgrade the CVB Web site.

The CVB pays $180,000 per year toward the Kokomo Event Center mortgage.

"We didn't want to compromise our strategic plan," LaFollette said of the 2010 budget. "The way people's travel has changed, they are taking more three- and four-day trips."

Kelly Karickhoff, president of the CVB board, said the salary cuts will be reviewed in the last quarter of the year to determine if they have to be carried over to 2010.

"The staff decided to take the pay cut to avoid a reduction in the staff," she said.

The board also voted to discuss with Howard County officials the possibility of paying off the Kokomo Event Center mortgage early.

Between 1997 and 2008 the innkeeper's tax has provided $2.5 million toward the mortgage.

Karickhoff said the CVB used to receive 4 percent of the innkeeper's tax for operating costs. She said when the Event Center mortgage was added, the tax was increased to 5 percent, but funding for operations was reduced to 3 percent of the tax revenues.

The 5 percent innkeeper's tax is set to drop to 4 percent in 2012 when the mortgage is scheduled to be retired. CVB board members want to maintain the 5 percent tax rate for operating costs and to build up reserve funds.