Country Inn and Suites in Quincy.
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Published: 5/27/2009 | Updated: 6/7/2009
 Mayor John Spring intends to rule today on whether to revoke or suspend the hotel operator’s license of Country Inn and Suites for non-payment of its hotel-motel taxes for eight months in 2008.
Testimony at a license-revocation hearing Wednesday at City Hall indicated the hotel’s management failed to turn over $87,496 in hotel-motel taxes owed for the period April through November. The company also owes the city $4,373 in penalties along with an undetermined amount of interest.
Country Inn and Suites, 110 N. 54th, could be forced to shut down if Spring decides to permanently revoke the license.
In an interview after Wednesday’s hearing, Spring said this will be a “tough decision” for him because the city tries to iron out problems with local businesses whenever it can. But previous efforts with Country Inn and Suites have been unsuccessful.
“It is unfair to our other hotels and motels that collect the tax to have a company in the same business not do likewise,” he said.
In a related development, Mike Hill, managing member of Quincy Hotel LLC, the corporation doing business as Country Inn and Suites, made an appearance in Adams County Circuit Court this morning in response to a lawsuit filed by the city. The suit seeks fines and penalties in excess of $156,000 from Country Inn and Suites for non-payment of hotel-motel taxes.
The suit specifically relates to $10,890 in hotel-motel taxes the hotel collected in May 2008 and which it should have turned over to the city treasurer by June 30, 2008, but never did. The City Code provides a minimum penalty of $500 per offense and $500 for each day the violation continues.
The suit asks the court to assess a per-diem fine of not less than $156,000 based on non-payment for at least 312 days. The city also is requesting the court to order the hotel to pay the taxes owed for May 2008 along with interest, which totals 2 percent a month.
Hill told Judge Chet Vahle he intends to pay the amount of taxes due in full. Vahle continued the case to June 11.
Hill told The Herald-Whig he has acquired sufficient funds to remit all overdue hotel-motel taxes owed by the hotel. He said he hopes to have this accomplished by Monday or Tuesday.
Hill said he planned to meet with city officials this morning to lay out plans in hopes of averting further legal action. “That’s up to the city,” he said.
Hill said that regardless of what may happen with the license revocation issue, the hotel’s banquet facility will keep operating. “I want it to be known that this doesn’t affect the banquet center. So any weddings and stuff that we have can still go on as planned,” he said.
At Wednesday’s hearing, City Attorney Anthony Cameron said the hotel has been operating without a license since its previous one expired Nov. 30. City Treasurer Peggy Crim, who issues licenses, said the City Code specifies a license may not be renewed if a hotel is in arrears on its tax payments.
Hill testified that the hotel was struggling financially for a while. “But it’s starting to come around. I just need time to get caught up.”
If the hotel loses its license, Hill said he would have to lay off 28 people “and shut the doors.” Consequently, he said, there would be no way the hotel could come up with the money it owes the city.
Hill presented three proposals. One called for paying off the debt on a month-to-month basis, another to pay $20,000 a month until the balance due is paid in full and a third for depositing $1,000 a day into an interest-bearing account in the city’s name, which would enable to hotel to clear its debt within 120 days.
“We’re here to work with people,” Spring said in an interview. “Today was the first time in almost 12 months that we’ve actually seen substantial plans presented by Mr. Hill to repay this money that is owed the city.”
Hill testified that the Country Inn’s hotel-motel tax revenue was used “to pay my employees” and cover other operating expenses. However, he claimed a bookkeeping system used by the hotel calculated its gross revenue incorrectly by adding in the amount of taxes owed, so his tax obligations were calculated wrong.
“Our records indicate we owe about $72,000,” Hill told The Herald-Whig.
Hill said his company is now auditing the hotel’s books for the past two years and plans to refile all monthly returns with the city.
“But you’re not denying the fact that you didn’t pay your taxes,” Spring said to Hill Wednesday. Hill agreed that was true.
In his closing argument, Cameron urged Spring to revoke the hotel’s license.
“He (Hill) took the money that he received from guests in trust that was to be paid over to our treasurer, which was then to be paid over to another public purpose (the Oakley-Lindsay Center), and he used it in support of the operation of the hotel. That’s what the rules say you can’t do,” Cameron said.
During the hearing, which lasted nearly an hour, Cameron called Crim as a witness. She provided testimony on the amount of money owed for each month in question. She also said Hill paid the $5,208.74 tax bill he owed for December 2008 but as of Wednesday hadn’t made any payments for the period of April through November.
The city has not said if the hotel has paid for any months in 2009.
— ehusar@whig.com/221-3378
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