Green Bay struggles to pay debts due to shortfalls in excess room tax revenue
GREEN BAY, Wis. (WBAY) - Some Green Bay city leaders feel as if they got caught holding an empty bag after not enough excess room tax revenue was generated in 2020 to cover debts accrued from the construction of the Resch Expo Hall and the KI Convention Center.
The money to pay the debt is coming from the Room Tax Stabilization Fund, generated by seven area municipalities: Allouez, Ashwaubenon, Bellevue, De Pere, Green Bay, Howard, and Suamico. The fund balance was negatively impacted by the pandemic which took a toll on tourism and hotel stays.
However, Green Bay struck its own deal with Brown County in 2017, setting up a $500,000 reserve account (from sources other than room taxes) in the case the city can’t make a bond payment on the KI Convention expansion.
The county’s bond payments are prioritized starting with the Resch Expo Hall, second the KI Convention Center and third the KI expansion. The city has sole responsibility for the debt of the KI expansion in the event there’s not enough room tax money left to cover the costs.
“We need the City of Green Bay to be our partner, just like you needed us to be our partner when the KI-2 (KI expansion) project came forward,” said Brown County Executive Troy Streckenbach at a July 11, 2017 meeting of the Green Bay Redevelopment Authority.
Four years and a pandemic later the city is finding itself without a partner after county leaders informed the city in early May, there wouldn’t be enough money left in the Room Tax Stabilization fund to cover all the costs to make its debt payments in June and December.
It left the city with no choice but to tap the $500,000 reserve to make the $732,000 payment due June 1 for debt on the KI expansion.
Alder Barb Dorff says the city shouldn’t have had to tap into the reserve yet.
“The County did not follow through even though the money was there and chose to keep that money for their December payment,” said Alder Dorff at Tuesday’s city council meeting.
Now, with its reserves dried up, city leaders are left trying to figure out how to make the December payment of $728,000 if not enough room tax is generated over the next couple months to cover the costs.
“There is one additional reserve fund that is set aside when you set up your initial loan and it’s set up to make that last payment,” said the City’s Finance Director, Diana Ellenbecker. “According to our financial advisor that’s going to be the very last place you want to tap, but it’s a possibility.”
Another possibility is to use levy dollars, which the city could explore to cover the costs.
City leaders say federal funds from pandemic relief can’t be used to pay off previous debts.
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