The past few years for the city of Owensboro, Kentucky, have been filled with news of major projects sprouting up on the city skyline. But now, Owensboro officials say the city faces a budget shortfall of about $40 million. Now, the city could face some future cuts.

Brad Byrd sits down with Owensboro Mayor Tom Watson to discuss how the city got into this financial situation, and where does it go from here.

Transcripts of interview:

Brad Byrd: For Owensboro, Kentucky, population of about 58,000. the past few years have been filled with news of major projects sprouting up on the city skyline. But the party may be over and it’s time to pay the fiddler. Owensboro officials are staring at a short timeline for complex work to balance the books. Last week, Mayor Tom Watson and city commissioners heard options to get there, and I’m joined tonight by Owensboro Mayor Tom Watson.  Mayor, thank you so much for taking the time for being here. You’re back in office and you have inherited what appears to be a serious financial crisis that is facing Owenboro, Kentucky. Perception out of the blue. You’re city’s estimated shortfall according to City Manager Bill Parrish at more than $40 million over a four year period. You just took office. How did we get to this point? What happened?

Mayor Tom Watson: Well, they had the opportunity to partner with some aggressive developers and there was a will to do more than just Smothers Park. The addition of the convention center partnered with the county fiscal court, but we took the biggest load every time we do something down there over the last four or five years. It helped out with the Hampton Inn, guaranteeing them the occupancy rate. If it doesn’t get to a certain number, then the taxpayers help them out with it. I mean everything down there basically is supported by some kind of tax dollars except probably the Holiday Inn. That’s a stand alone place. But the rest of the places, you have the Riverpark Center, it’s $176,000 a year subsidy to keep it going. Smothers park takes about close to $1 million to keep it clean and spruced up, then the Hampton Inn. Now, they’re getting ready to do something with the Bluegrass Museum, and we have no idea how much we’ll have to subsidize that.”

Brad Byrd: “Owensboro has been the envy of other cities at least looking into it from the outside. These major development projects, three hotels in downtown Owensboro, and the city of its size, you told me earlier you don’t believe Owensboro was paying as it goes.”

Mayor Tom Watson: “No, sir, they really weren’t. I think they were in a timeline of if you build it they will come. So, when they built the convention center, it’s done okay but it certainly hasn’t cash flowed. So, taxpayers have subsided it about half a million dollars a year now which will go up in the next two years.”

Brad Byrd: “As we see the video here of the convention center, it is an impressive place. And of course, there is the Hampton. You’re tell me though that these venues particularly the convention center, it’s not bringing in what city officials thought it would? It’s not returning an investment on the dollar?”

Mayor Tom Watson: “No, sir, it really isn’t, and that’s the reason for the third hotel. So, the convention people say ‘We need another hotel, so we can have more rooms, therefore we can have larger event and therefore we can generate more revenue.’ My concern all along was trying to build a piece of your economy on tourism when we were very difficult to get to. We don’t have great air service. We don’t have a four-lane highway. So, that worried me from the very beginning. But most of the people in the community that lived there all my life, they’ve understood that they’ve spent more than they’ve taken in. They made not effort to generate any extra revenue or taxes in hopes over the next four or five years things will get better. Now, we have a downtown tax increment financing district. There’s possibilities of generating revenue there. We’ve got Alorica rebuilding the old BB&T Bank and it’s going to be 500 to 750 employees downtown, so that’s a new jump. Then we have the tax increment financing district out on Highway 54 by the hospital, and projected numbers by staff and by the tax increment financing people could be $1 billion. But that’s not going to help us now.”

Brad Byrd: “But $42 million, that is a big number that a city the size of Owensboro is apparently facing. So, where do you make cuts? I’ll just throw out some possible areas that the city has basically outlined: Ben Hawes Golf Course, Cravens Pool possibly just shutting that down, there could be a shortened air show. The Bluegrass Museum, you’re particularly troubled by that. Why?”

Mayor Tom Watson: “Well, I don’t really have a business plan. There’s a small couple of pages for the Bluegrass Museum. And it’s kind of the way I understand it, it’s built on the opportunity to stream bluegrass music across the country. So, you’d have like Sirius satellite radio, you pay a fee, and you can get bluegrass from there. But it’s 47,000 square feet a building. And obviously with the bankruptcy of the construction company, and these tax increment financing districts, there’s a certain rhythm to them that things need to fall in place in times, so you can get your base money going and you can start generating the tax dollars.”

Brad Byrd: “A lot of challenges suddenly coming up. Gabe’s Tower technically now someone is holding the keys to the car on that in Mr. Bob Zimmerman. And the city had offered by I believe $225,000 for that. Can you even do that, or is that what we’re looking at now going to continue to wither on the vine there?”

Mayor Tom Watson: “We’ve also had the opportunity to use some community block grant money in conjunction with fixing up the neighborhood and possibly putting a facade on the gates shopping center there. And three of the four corners by Gabe’s Tower are going to be owned by us that we can develop, sell, and put the businesses around that.”

Brad Byrd: “But the tower has to come down?”

Mayor Tom Watson: “Yes, sir, it’s not a safe place and there’s still some mediation that needs to be done. And we feel like we’ve made a generous offer, and they accepted it. And Mr. Zimmerman has a passion for this place, so made another offer. We got to let the courts unwind this stuff. And after that, we still have the opportunity for condemnation. I feel bad for the people who live west of it. All these years with that mess sitting in their front yard.”

Brad Byrd: “And there’s a large vacant, about a 9 acre track of land by the former home of the hospital. That is one are you’d like to see developed.”

Mayor Tom Watson: “Nine block from downtown. We have a project called where we’re trying to twist all the property that’s not up to date and revitalize that area, so we’re using community block grant money for that. So, when Gabe’s comes down, we’ll have a transfer opportunity for the transit system there, so then we can use federal dollars.”

Brad Byrd: “Tax increase in the future for Owensboro.”

Mayor Tom Watson: “Yes, sir, there’s no way around it.”

Brad Byrd: “And we’ll get into that much later as this process winds down. Go to my Facebook page, and tell us what you think about the situation now facing Owensboro residents. Mayor Tom Watson, once again thank you very much for joining us tonight, and this is going to be an ongoing story this financial situation that Owensboro is finding itself in. We’re going to try to get all sides on this matter, their opinions on this. But thank you for joining us tonight.”