Hotel/motel tax use sent back to committee

Chamber provides alternate criteria

The outcome of discussion at the Aug. 25 Jefferson city council meeting of the use of hotel/motel tax funds won’t be known until the end of September. After an hour of discussion mayor Craig Berry referred the matter back to the committee he had appointed last March to develop criteria for an application to receive the funds, which are earmarked for the promotion of tourism and convention business.

About 25 persons were there for the discussion. As they arrived, they were given a counter proposed criteria written by the Greene County Chamber board. That document had been provided to the council on Monday afternoon. On the reverse side were the ballot language from the 2001 referendum seeking the 7 percent tax on hotel/motel lodging in the city, and a copy of the recommendation of a tax force that in April recommended that the funds go only to the Chamber, and that principal and interest payments on a construction loan for a Welcome Center be allowed for reimbursement.

Council member Lisa Jaskey and city administrator Mike Palmer, both of whom were on the committee that wrote application made brief statements. Chamber president Omega Sang opened discussion for the Chamber. “The criteria you proposed and that is up for adoption today… is legally inconsistent with the ballot initiative adopted by the citizens of Jefferson on Aug. 7, 2001, granting us, as the Chamber, exclusive access to these funds… The criteria we are proposing is in agreement with the ballot language passed by voters in 2001, and is in agreement with the task force recommendation.”

Sang also pointed out that the Chamber proposal does not preclude other groups from accessing the funds through collaboration with the Chamber. “I ask that you approve this criteria as it fulfills the will of the people back in 2001 who passed the ballot and the will of those who made up the tourism task force earlier this year,” she concluded. For a copy of the Chamber proposal, click here: Chamber criteria For the committee’s criteria, click here: Council criteria

Tom Polking, president of the Thomas Jefferson Gardens board, Sid Jones, president of Home State Bank, Cathy Proctor Krieger,  director of the Chamber in 2001, and others addressed the council.

Discussion of the welcome center at the Thomas Jefferson Gardens was pertinent because it was a request to approve payments on a construction loan to finish interior work that sparked the debate of hotel/motel tax use late last year. With no answer to the request, work on the project has stalled. Also, the committee’s proposed criteria specifically deny use for construction or debt.

The Thomas Jefferson Gardens board sees the Chamber as a partner, Polking explained. TJG has funding to maintain the actual gardens but no budget for the building and its staffing, or for marketing. TJG is relying on the Chamber for that. “It’s really, really hurt us that we’re about a year behind in getting people in that building. We’ve turned down weddings, we turned reunions. We have not marketed because we don’t have any people. We don’t have any restrooms… We’ve been stymied. We’ve been waiting for the Chamber to complete their half of the project,” Polking said.

He said he had relied on the Chamber to finish and staff the building “because I thought they were getting some money relative to the hotel/motel tax. I’m here to tell you that if you’re looking at who our partner is, I think the Chamber is a good partner.”

He said he hears many complaints about the building not yet being open. “I’ve got to get that building open. I’ve got to tell the Thomas Jefferson story…. and that’s what the Chamber is supposed to do. That’s what our original thought process was.”

Jones gave a history of the welcome center and use of hotel/motel tax funds for it. The conversation began in January 2013. “From the very beginning, a consideration of the welcome center project by the Chamber was planning on having access to 80 percent of the hotel/motel tax,” he said. As bank president, he has seen financial and other documents about the project from its inception.

He said Home State Bank believed the hotel/motel tax fund was a “solid source” for payment and made an initial construction loan for Phase 1 of the project, the exterior. That was completed in September 2014. It was approval of a loan for Phase 2, the interior, that was denied for lack of assurance from the city that the fund could be used. He reminded the city council that Polking had first asked the city to partner on the building, but that the city council said it was a tourism project and should be managed by the Chamber.

Jones provided dates of all correspondence with the city concerning the welcome center and hotel/motel tax use. He noted that work done on the exterior of the building by the Chamber has not been reimbursed. “Over the last eight months, the Chamber seems to have done everything that was asked and encouraged by the city to move forward with the release of hotel/motel tax receipts so that Phase 2 of the welcome center can be done. The task force was asked for and made a very specific recommendation which, to date, has not been followed.”

“The Chamber board and staff has worked very hard to satisfy the city council, yet for some reason there continues to be some lack of trust between the city and the Chamber which if not resolved can create some really difficult situations for the Chamber budget. It’s time for the city to honor what the ballot said, which was to release 80 percent of the hotel/motel money to the Chamber for their direction on how it should be spent for tourism and convention expenses,” Jones said.

Jaskey replied that the council had not received the Chamber’s March 31 or June 30 financial statement as promised by former Chamber president Ben Yoder. Nikki Uebel, who became Chamber treasurer in March, then distributed the March 31 statement to the council. She did not have the June 30 statement available.

Former Chamber director enters discussion: Cathy Krieger explained the 2001 ballot language. Click here to read: 2001 ballot “We wrote it that way for a reason. We hope that it would be honored that way. Now, obviously there’s more money on the table than there ever was. The fact of the matter is the Chamber cannot generate enough revenue on membership alone…. The Chamber has to make some money off tourism or there’s no way it can exist unless its membership dues were outrageous and then the small business owners can’t could afford it,” Proctor said.

There was discussion that city clerk Diane Kennedy, after conversation with Palmer, had disallowed reimbursement for Bell Tower Festival expenses asked for by the Chamber, calling the festival a fundraiser for the Chamber. “The element of fundraising in those activities doesn’t need to be held against the Chamber because those are important outside dollars that are coming in. So they make a little money. That will offset what they need to charge the small business owners here in Jefferson and in Greene County. I think that’s really important,” Krieger said.

Council member Shannon Black quizzed Krieger about how the funds were disbursed to the Chamber. Krieger said the Chamber was told how much money was in the fund and submitted expenses accordingly. She and the board knew what would be considered as tourism expenses and determined what to submit. “We weren’t submitting expenses for the council to say ‘well, this doesn’t count.’ We worked in good faith to honor the ballot in what the voters wanted in creating more tourism business,” she said.

Clerk Diane Kennedy said that over the years, she and Chamber directors had worked together verifying what expenses would be submitted to the council for reimbursement. The city has never simply provided 80 percent of the hotel/motel tax money to the Chamber. Kennedy said the city’s auditors over the years have advised her not to provide a lump sum payment to the Chamber because of audit requirements. “The money that comes in is city funds. I have to account for that…. I am ultimately responsible for the accounting and expenditure of those funds. If those funds go to another organization, that subjects all their books to be open for audit. I’ve been advised by the auditors against doing it that way,” Kennedy said.

Council wants to fund other groups: Black said that because the hotel/motel tax fund is a city fund, and because the fund is increasing, “We cannot just say ‘Yes, the Chamber can have 80 percent of them all.’ We have to re-look at this and we all have to work together on this. I understand it’s confusing when you read the ballot language, but we have to leave some opportunity for maybe other non-profit organizations that might come along… and I see you’ve made some provision for that, and that’s great, but there’s still more work to be done here. We’ve not changed our processes. We’ve told you to still submit receipts to the hotel/motel fund, and as long as they meet the requirements of what that can be disbursed for, they will be, as long as funds are there,” Black said. “The issue tonight is not the building at Thomas Jefferson Gardens…. No one here is against that building.”

“I understand the misunderstanding with the ballot language. I’ll let Bob (Schwarzkopf, city attorney) speak to the legalities of this,” she said.

Sang asked Black why the council must provide funds to other organizations. “I think there are a lot of people who have interest in the growth and promotion of Greene County, and I don’t think it’s fair or right to allow just the Chamber to be the entity that decides all of that, especially when those funds are city funds,” Black answered.

“You don’t think it’s a reasonable idea that they could collaborate with the tourism vehicle for our county and still fulfill their mission and purpose?” Sang asked.

“I do think that’s a possibility. Sure,” Black said.

Don Orris, a member of the Thomas Jefferson Gardens board, asked Black to clarify her earlier statement that the Chamber should be submitting expenses as before. At that time, the mayor referred the criteria back to the committee. He suggested that representatives from the Chamber, the Thomas Jefferson Gardens, Jefferson Matters: Main St, and whoever thinks the money should apply to, attend the meeting.

“The group that you just described is the tourism task force,” Jones said. “All those people were involved, and the recommendation has already has already come out of that and been presented to the council. It’s very clear. I don’t know what’s going to happen. I think it’s great to step back and look at it. I think it really needs that. I do think there was a really defined and well represented group of people that came up with the decision.”

Berry said the committee would look at its own criteria and the Chamber’s criteria and make another recommendation. When asked about a time line, Berry’s first response was that there was no time line. When several people pressed him, the committee agreed to meet and have another recommendation before the end of September. Berry said all interested parties would be notified of the meeting time.

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