The state-owned Honey Creek Resort near Moravia continues to struggle with making enough money to cover expenses and debt payments, a new audit shows.
The state auditorís report for the year that ended June 30 shows Honey Creek made $6.07 million in operating revenue, while spending $5.8 million.
The surplus of $235,966 wasnít enough to make debt payments of $1.47 million for fiscal 2013. Those payments were covered by the Iowa Department of Natural Resources (DNR), which oversees operations of the resort.
The DNR has been required to use statewide conservation funds to cover shortfalls at Honey Creek. Those transfers from the state's Resource Enhancement and Protection program will end next summer, when the state will pay off the bonds, DNR Spokesman Kevin Baskins said.
At that point, the DNR could negotiate a performance-based contract with its operator, Baskins said. The resort is managed by Central Group Companies of St. Cloud, Minn.
The resort on the shore of Lake Rathbun boasts a 105-room lodge, 28 cottages, restaurant, water park and 18-hole golf course. The state financed $33.5 million of the $58 million project with bonds that have escalating payments through 2036.Revenue for fiscal 2013 included $3.3 million from lodging, $1.9 million from restaurant and banquet operations and $623,000 from the golf course. The largest income came from lodging, where expenses were just $708,000. The golf course lost about $43,000 last year, which included both flooding and drought conditions.