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State Audit Informs County Council That It Cannot Share Riverboat Revenue

Posted On May 31, 2017

By Mike Perleberg

Dearborn County Council. File photo.

(Dearborn County, Ind.) – A state audit suggests that Dearborn County government should not be sharing its riverboat casino admissions tax revenue.

Otherwise, the county is breaking state law.

The State Board of Accounts’ audit was released to the public on May 19. In the 16-page document, auditors looked at the county’s 2015 sharing of $1.5 million in riverboat admissions tax revenue to various governmental entities as part of revenue sharing agreements between the county and those municipalities.

“Indiana Code 4-33-12 (Admission Taxes) does not contain provisions authorizing a county to enter into agreements with units of local government to share a county’s share of admission taxes. Sources and uses of funds must be limited to those authorized by the enabling law, ordinance/ resolution, or grant agreement. (Accounting and Uniform Compliance Guidelines Manual for Counties of Indiana, Chapter 1),” the audit states.

Also getting a look in the audit was $384,894 in financial assistance distributed to non-governmental agencies in 2015. Those agencies included fire and EMS departments and private schools. There are no agreements between the county and those entities laying out how the taxpayer funds are to be used, but there should be.

“A contract, grant agreement, or memorandum of understanding is a starting point in establishing internal controls to provide assurance that public funds paid to other entities are being used for intended public purposes,” the audit notes.

Dearborn County Council president Liz Morris tells Eagle Country 99.3 a 20-year-old county council resolution began the revenue sharing in 1997, when local riverboat gaming was in its infancy. Under that resolution, the county has shared a quarter of its admissions tax revenue with Aurora, Dillsboro, Greendale, St. Leon, and West Harrison.

While it may have been legal in 1997, state law has changed over the years to prohibit such revenue sharing.

“No one is looking to harm anyone else. The bottom line is that Dearborn County Government has to abide by state law. There are going to be effects, of course, by doing so, but we have to be lawful,” says Morris.

Dearborn County Council discussed the audit Tuesday, voting to table any action on the revenue sharing ordinance. To be compliant with state law, Morris told her fellow councilmembers that they must pass a new resolution rescinding the 1997 resolution.

Morris said she was in on small group meetings with the SBOA auditors earlier this spring where the findings and need for change were shared. She said council members who just learned about the problem on Tuesday need time to digest it.

The council could finesse a solution to continue the revenue sharing by writing up a contract for service with each municipality or entity.

“But I think that’s just asking for the wrath to come down,” said Morris, adding that method would equate to grasping at straws.

Council could take up the matter again at their next meeting on Tuesday, June 27.

The law affecting the county’s revenue sharing habits does not apply to the City of Lawrenceburg, the official host community of Hollywood Casino. Host communities are permitted to share their admissions tax revenue.

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