The city will no longer pay for visitor information center operations under a new contract with the Chamber of Commerce.
For the past 30 years, the city has paid for operations at the center through the general fund. Now, the city is asking the chamber to pay the $160,000 a year it takes to run the center from its tourism promotion program fund.
The fund, which is anticipated to have $385,655 next year, is financed by the lodging tax and is used to promote tourism during the offseason. To lessen the initial financial impact, the city will phase in the change by paying increasingly smaller portions of the visitor information center tab until 2021.
In exchange, the chamber has an ongoing contract — something the organization has sought for years — which allows staff to do long-range planning. Putting the spending under one contract gives the chamber more flexibility on how money should be divided between marketing and visitor center operations.
There is also no cap on how much the chamber can receive from lodging tax revenue — an idea proposed earlier last year.
But the new arrangement comes with a degree of risk. In a good year, the chamber could possibly receive much more money in lodging tax than the city could provide from the general fund to run the visitor center. In a bad year, there will be no general fund money to help.
“It was a long process, and like any negotiation, nobody’s super thrilled about the result … but everyone’s reached the result that works for both parties,” Jim Paino, the chamber’s executive director, said at last week’s City Council meeting. “We’re happy with it, the board’s happy with it, and we’re excited to get to work.”
The change, which came after more than nine months of negotiation, is driven in part by the city’s desire to minimize transfers out of the general fund. Years of heavily subsidizing other city funds like public works, which has projects that can’t be covered by water rate revenues, has caused concern that the general fund balance will continue to decrease over time, City Manager Bruce St. Denis has said.
But it also comes from the city’s desire to have more oversight. Part of the contract requires the chamber to meet with the city quarterly to explain what has been done and what they plan to do with the marketing program.
Some on the City Council have taken issue with a perceived lack of communication about certain projects — most notably the branding guide released last year, which included a city logo that drew some local criticism. If the council and chamber can’t come to an agreement, the council can terminate the contract within 90 days.
“It puts council and city in a better position to knowing what’s going on,” St. Denis said.
Some on the council, however, felt the contract didn’t do enough to ensure a reserve fund would be established in the event the chamber receives more in lodging taxes than anticipated in a given year.
“If the program gets wildly successful and those amounts get so large you can’t utilize those funds for promotion, I’d like to see those funds go into a reserve for a rainy day when we don’t collect as much,” City Councilor Mike Benefield said.
Part of what prompted the city to look at the chamber’s contract was the desire to find ways to save some lodging tax dollars to be used during an economic downturn or for other tourism facility-related projects.
“So when we get presented with an opportunity, like buying the elementary school, we won’t have the money to do that because we won’t have that reserve fund,” City Councilor Nancy McCarthy said. “Yes, we’ll have a little more in our general fund … but we still won’t have a reserve fund for some other things we’d like to do that has to do with tourism.”
St. Denis said he believes the quarterly meetings will help resolve any issues the council may have in the future.
“I think there are benefits to both sides,” he said. “And even though it’s been a long and spirited negotiation, I think the contract gets us into a better position than what we’ve been in the past.”