Delaware County Fair officials are pushing for a bed-tax increase they say will secure the future of the fairgrounds and its signature event, the Little Brown Jug.

Delaware County Fair officials are pushing for a bed-tax increase they say will secure the future of the fairgrounds and its signature event, the Little Brown Jug.

The Delaware County Agricultural Society's board passed a resolution last month supporting an additional 3 percent tax on hotel rooms in the county to pay for permanent improvements at the fairgrounds.

"If the conditions of our facilities are not improved and these needs continue to go unmet, the Delaware County Fair and the Little Brown Jug will simply cease to exist," board Vice President H.C. "Chip" Thomson said.

The Little Brown Jug, which has been conducted at the fairgrounds since 1946, is one leg of the Triple Crown of pacer harness racing.

Thomson, who presented the tax proposal to Delaware City Council last week, is visiting local government boards throughout the county to garner support for the plan, which would need approval from the state legislature.

The draft legislation supported by the fair board is generic in terms, but likely would affect only Delaware County. It would allow a county that hosts a fair with "an annual harness horse race with at least 40,000 attendees" to levy an additional 3 percent bed tax.

Bill Lowe, general manager of the fair, said that while the fairgrounds is home to one of the most exciting racing events in the world, it also is home to leaky pipes, crumbling roads and outdated buildings.

"This place is 75 years old and it's patched together," Lowe said.

Fair officials estimate a countywide 3 percent bed tax could raise $190,000 annually for renovations at the fairgrounds. Lowe said the funds first would go to fixing water lines, then to roads and buildings.

Thomson said a water main on the fairgrounds broke in early April, spilling 175,000 gallons of water. He said the rough winter caused multiple breaks, and even a minor one can cause utility bills to shoot up.

Lowe said some of the barns at the site are so old that owners will not lodge their animals inside. One barn, built in 1938 with partial funding from a Works Progress Administration grant, has a roof that "looks like a roller coaster," Lowe said.

Eighteen of the buildings at the site were built before 1960 and seven date back to the initial construction of the fairgrounds in 1938. The fair office is the former bathhouse for the now-defunct county swimming pool built at the same time as the fairgrounds.

Lowe said only a few of the buildings at the fairgrounds can be used in the winter, and they often generate high utility bills because of their age and lack of insulation.

Thomson said the proposal to revitalize the fairgrounds would be an "economic development plan start to finish."

He said revamped facilities would attract more visitors and allow the site to host more events, such as circuses and horse shows. Visitors to the fairgrounds would buy gas, food and other items throughout the county, he said.

Delaware County already has a 3 percent bed tax to support the Delaware County Convention and Visitors Bureau. The proposed increase would raise the bed tax to 6 percent throughout the county.

The tax rate would be 9 percent in the city of Delaware, Berkshire Township and Orange Township, because those municipalities already have their own 3 percent lodging taxes.

Thomson said he did not think the proposed tax increase would hurt tourism in the county.

"Ask yourself, have you ever let a bed tax determine where you're going to stay?" Thomson said.

He said the implementation of the additional bed tax is a way to raise funds for capital improvements without burdening local municipalities or taxpayers.

Agricultural society board member Pat Paykoff said fair officials have done what they can with the money available. He said the board has identified numerous fixes, from installing new water lines to sandblasting and painting the grandstands, for which it has no funding.

"We've stopped a lot of bleeding, but now it comes time to have a little bit of funds to do some things," he said.

Paykoff said short-term investments in utilities and facilities could save a lot of money in the long term.

Currently, the vast majority of the fair's revenue comes from fees related to racing and admissions. Fair officials said that revenue has not been great enough to tackle major improvements.

Paykoff said the board is stuck in a cycle of using funds from successful fair years to pay for expenses from previous years when the fair coincided with bad weather or other disruptions.

In 2012, for example, the Delaware County Agricultural Society's records showed total operating revenues of $4.3 million and expenses of $4.2 million. The society ended up with a operating income of more than $111,000.

In 2011, however, records show the fair posted an operating loss of more than $100,000. Fair officials blamed that number on rainouts on multiple days of the fair.

Lowe said plummeting revenues in the wake of the 9/11 terrorist attacks in 2001 and Hurricane Ike in 2008 similarly had repercussions on the society's financial situation for years afterward.

Thomson said he came up with the bed-tax plan in 2002 as the best way to free the fair from its cycle of boom and bust years. While his pitches to state officials have not given him the desired results yet, he said he'll keep trying.

Thomson said he thinks conditions at the facilities have deteriorated to a point where officials will see the necessity of the proposal.