Deputies investigating transfer of ‘bed tax’ funds

The Newton County Sheriff’s Department is investigating whether funds from the city’s hotel / motel tax fund should have been used to meet payroll and pay other city bills.

Acting on a complaint from Richard Davidson, Neosho’s mayor pro tem, the sheriff’s office is investigating whether the transfer violated the law.

“The public has an expectation to trust city officials and state officials to ensure that tax funds are spent in the way that they are supposed to be spent, and for the purpose for which they are imposed,” said Davidson early this afternoon in a telephone interview with the Daily News. “Recently, issues have been brought to light at city hall concerning the spending of the city’s hotel / motel tax for other expenses of the city.”

City Finance Director Bob Blackwood has admitted the city borrowed $611,900 from the hotel / motel tax, water and sewer and tax increment financing (TIF) funds into the general fund to pay city bills.

According to language contained in the Aug. 8, 2006, election ballot, funds from the motel / hotel tax are for the “sole purpose of promoting tourism.”

The ballot language read as follows: “Shall the city of Neosho impose a tax on the charges for all sleeping rooms paid by the transient guests of hotels, motels and tourist courts situated in the city of Neosho at a rate of four percent for the sole purpose of promoting tourism?” 
The hotel / motel tax passed by a 2-1 margin — 628 votes for, 300 against — during the Aug. 8, 2006, primary election. Money generated from the 4 percent tax was to be used to promote the city through different marketing efforts, including billboards, Web pages and print and electronic advertising.

“It is my belief that the use of these funds may be in conflict with their intended purpose and Missouri statute,” Davidson said. “As an elected official, I felt an obligation and a duty to make the Newton County Prosecutor and the Newton County Sheriff aware of these possible violations. It is now their responsibility to look into this matter, and I will be fine with whatever the outcome is of their investigation. The sheriff now has the duty to look into this situation, as I had a duty to bring forth my concerns.”

Newton County Sheriff Ken Copeland said he was going to talk to “anybody who has info on that, council members, city employees or whomever I need to talk to on this.”

Copeland said his department’s findings will be turned over to Newton County Prosecutor Jake Skouby early next week.

Presently, the Missouri State Highway Patrol is not involved in the investigation, Copeland said.

Steve Hays, city attorney, previously told the Daily News he was not in a position to say if the transfer was a violation or not, but said if the issue had been posed to him, he would have advised against the transfer.

Meanwhile, organizers of a citizens’ audit petition say enough signatures have been collected to present the document to county and state officials.

Les Bond, who has been working with the audit petition group, told the Daily News late this morning that the group had collected 10 percent more than the required 686 signatures. The group wants a state audit performed into city finances. The petitions will be presented to Kay Baum, Newton County clerk, this afternoon.