WILMINGTON — Wilmington council passed a first reading 5-1 on an ordinance that would affect how the hotel lodging taxes are distributed.
Council member Randi Milburn said the city’s general practice has been to allot 90 percent of the hotel lodging taxes to the Clinton County Convention & Visitors Bureau, but she said there’s no ordinance supporting that practice. The current ordinance says council shall appropriate half.
Milburn said the proposed ordinance clarifies the old one and reduces the city’s administrative costs to 1 percent of the amount retained by the city. The remaining retained funds would be appropriated by council. The CVB would be eligible to apply for those funds, as would be other organizations.
Council member Joe Spicer dissented, and council members Milburn, Matt Purkey, Kelsey Swindler, Lonnie Stuckert and Jonathan McKay approved. Council member Mark McKay was absent.
A second reading was asked to be placed on council’s next meeting agenda for Aug. 4 at 7:30 p.m. That, and a third reading would have to be voted on and approved before the ordinance could take effect.
CVB Executive Director Debbie Stamper said the amount in question could remove up to $50,000 from the CVB’s budget.
“Every line item, with the exception of fixed expenses, would have to be slashed,” Stamper said. “This action will negatively impact the overall influence we have on tourism development locally.”
Stamper said the change would also create an environment of animosity rather than partnership, as organizations would compete for funds.
“I calculated for every dollar of lodging tax that we actually spend, 2.3 people visited our county, $201.90 was returned as visitor spending, $12 was returned in state tax revenue, $9 was returned in local tax revenue and we had a little over 703,000 people visit in 2015,” Stamper said, adding that visitors spend $89.4 million in Clinton County.
Stamper said CVBs are “a system that works” and asked council to reconsider its proposed ordinance.
Stamper also read a letter from Melinda Huntley, the executive director of the Ohio Travel Association, saying the CVB is an important investment in the city. The letter also cited a study by the United Kingdom-based Oxford Economics that claims communities that market themselves through a CVB outperform those that don’t, improve employment and create a positive perception of that community.
“Any time a traveler from 50 miles or more away visits Wilmington, he or she leaves behind new dollars in your community supporting businesses that could not be sustained without this additional spending,” Stamper read from Huntley’s letter. “When these businesses get more visitors due to these promotions, they buy more local goods and services.”
One person in the audience of about 30 spoke in favor of the proposed ordinance.
Paul Hunter said the CVB does a great job and believes they can continue to do so.
He said the CVB’s budget showed it would have a $100,000 rainy day fund and more revenue than it anticipates spending. He said the CVB could spend that extra revenue to pay for its current operations without having to cut any budget item.
Stamper disputed Hunter’s claims, saying the CVB has to have a reserve on hand, but Hunter said the CVB could maintain a reserve and continue spending as it does because it receives $50,000 more revenue than it projects spending.
“Why take money away from one good organization and support another good organization when you have such a vital organization already in place?” asked local lawyer Judy Gano. “If anything, we should be giving them more money so they can do some of these things.”
Ray Storer, owner of Grandpa’s Pottery, said he wouldn’t make one business decision without Stamper’s input.
“Debbie, bless her heart, she has been responsible for people far and near,” coming to his store, including a large church in Boston that wanted a video of Storer. “Debbie spearheaded all that, and she does that all the time with school children, with people who are handicapped.
“I do beg of you to give this careful consideration,” Storer said. “She deserves it. I feel like we deserve it, too.”
Randall Sarvis, a CVB board member, credited the CVB as playing a significant role in the city’s recovery, citing the Oxford Economics study and the impact of tourism on local businesses.
“That’s a lot of money in a small community,” Sarvis said. “I have to believe with those kinds of dollars at stake, why wouldn’t we want the Convention and Visitors Bureau to have as many resources as possible?”
Sarvis also said the tax was created to promote the city and that others shouldn’t see it “as low-hanging fruit.”
CVB Vice President Stephen Picklesimer, manager of Hampton Inn & Suites and Holiday Express in Wilmington, said he represents 87 percent of the tax collected by the city.
“My guests, my guests alone, are the bearers of this tax,” Picklesimer said. “Not one resident in this city pays that tax. … As a representation of the collector of that tax and the reason that that tax is available, I think my opinion should be a little bit understood.”
Picklesimer said the CVB knows how to market the area and shouldn’t lose that revenue “to people who … have absolutely no understanding of marketing this city.”
Keri Jaehnig, who works for the CVB, said, “I just don’t understand why, when an organization is doing something well, why you would take away from what they’re doing.”
“Who would not exist anymore (if the CVB funding was changed)?” Jaehnig asked. “Do your homework and reconsider because I think that it’s a lazy decision.”
Phillip Craig, executive director of the Ohio Association of Convention & Visitors Bureaus, said council was “wrestling with a tough one.”
Craig said Stamper and her board have won many awards from the OACVB and won a social media award from the Ohio Travel Association.
“Taking money from this bucket impairs the ability to regenerate it,” Craig said. “You’ll never be able to recapture what you’ve lost.”
After hearing from the public, council began its own deliberations.
Spicer said the fund was set up to fund the CVB and is working.
“I have no problems with amending the legislation” to require regular reports, Spicer said. “But let’s not blame the convention bureau because we haven’t been reporting four times a year when we as city council haven’t demanded it.”
“It was clear to me as soon as I read that (the original legislation), we have abdicated our responsibility as a council in the use of public money,” said Swindler. “Honestly, hearing the compelling stories we’ve heard tonight … I think you have nothing to worry about.”
Swindler said the CVB would be eligible to receive those funds, which she said is “public tax money, and it’s our responsibility to have not just a lookback on that money but to have a say in how it’s spent.”
Purkey said the funding considered wouldn’t come close to fixing council’s budget woes.
Purkey questioned several of the CVB’s expenses, including shipping a box to the city building, unused brochures at the General Denver (where he works) and other places as well as other questionable costs.
“Why isn’t a little bit of oversight a good thing?” Purkey asked, adding that he wondered how many more questionable costs there may be and whether the money could be spent more judiciously.
Stamper countered that the box was prepared off-site by a printer and had to be shipped and someone else in the audience said she never saw the brochures on display at the General Denver. Spicer said they printed more brochures because some recipieints said they ran out.
Reach Nathan Kraatz at 937-382-2574, ext. 2510 or on Twitter @NathanKraatz.