After the Statesboro City Council met last week to hear presentations from three agencies funded by the city's hotel/motel tax, there are strong opinions about how funds should be distributed under the new budget.
The Statesboro Convention and Visitors Bureau, the Downtown Development Authority and the Averitt Center for the Arts presented marketing plans and submitted budgets for review by the council during a called work session at the Pond House on Cypress Lake Road. With steady or slightly increasing expenditures and falling revenues, the council is looking for ways to tighten the city's budget.
During the work session, Councilman John Riggs discussed the possibility of the city assuming responsibility for tourism promotion to share resources with other departments. Such a move would effectively end the city's contract with the SCVB but Riggs was non-committal a day later about the direction the council may take.
"We haven't made decisions yet and we're going over all our options," Riggs said. "I hate to be vague but I just don't have any specifics on that. Like I said, we're looking at all our options and we haven't made any final decisions."
The contracts with the SCVB, the Averitt Center and the Downtown Authority, all of which are non-profit organizations, separate from, but funded by the city, expire on June 30. For the 2010 fiscal year, which ends June 30, the city's finance department anticipates $444,130 will be collected from the hotel/motel tax. The SCVB currently received 69 percent of those revenues, while the Averitt Center receives 23 percent and the DSDA receives 8 percent.
The council must act in a public meeting to vote to extend or let expire contracts with the three organizations before any changes would take place. Councilman Travis Chance said he originally supported the idea of dividing up the hotel/motel more equitably between the three organizations, but said he was influenced by the arguments of Councilmen Riggs and Will Britt.
"We are desperately trying to restructure, become more efficient and do everything in our power to keep from raising taxes and to keep from laying people off and downsizing our workforce," Chance said. "Unfortunately sometimes restructuring is painful. While this definitely was not a path I was anticipating us taking, two of the other councilmen made the push and made the argument that maybe funding the SCVB was not the best thing for us and maybe we just needed to do it more efficiently ourselves."
Doug Lambert, a member of the SCVB board and owner of Southeastern Hospitality Services Inc., disagrees with the potential decision by the city to quit funding the organization completely.
"There's no reason to do that. For 26 years, the SCVB has done a great job," Lambert said. "It's had the support of the industry. It's effectively raised hotel sales in town from about $2.5 million to $10 (million). And if you look at the program of work that they accomplished, it's very professional. There's no need to do that."
Increasing motel tax
During a special called meeting in March, the council met to finalize wording for legislation that would increase the hotel/motel tax by one percent, from five to six percent. Such an increase needs approval from the Georgia legislature, so a special meeting was called to consider passing a resolution in time for the measure to reach Atlanta before the body finished the 2010 session.
Lambert said he met with the mayor and city manager and told them that if the SCVB was funded at the current level and received a portion of the tax increase revenue, then he believed the SCVB board and hotel owners would be in favor of the hotel/motel tax increase. The council's refusal to consider sharing any of the additional revenues with the SCVB or maintain its current funding level is why Lambert said he spoke out against the tax increase.
"There weren't any assurances from the city that the one percent increase was going to be spent on tourism promotion," Lambert said. "In fact, Councilman Britt said ... the money would be spent on the (Averitt) arts center. We believe if you tax a certain segment of the population's customers, then that segment ought to benefit - which is the way the law was written - from the promotion.
"When you spend money on marketing then it increases sales and when you increase sales you increase employment, sales tax, property tax and everything that goes with it. It's an investment more than just a departmental expense."
The idea of moving Averitt Center expenses out of the city's general fund was one reason Britt cited for seeking the one percent hotel/motel tax rate, which could have generated $80,000 to $100,000 in additional revenue, primarily from out of town visitors. When the measure didn't pass, a work session to hear presentations from the three agencies and to discuss future division of the hotel/motel revenues was called.
"The Arts Center needs more funding to be able to operate. We must quit transferring money from the general fund to the Arts center especially when there is a mechanism out there to fund it," Britt said about the work session. "Plus the DSDA could use a little money for grants and some facades and things like that."
The SCVB was instrumental in bringing in larger, multi-day events such as the Special Olympics and sporting competitions out at Mill Creek Park. Lambert said he didn't think the DSDA and Averitt Center brought in many overnight visitors from out of town but said his organization supports both downtown events and the arts center.
"The Convention and Visitors Bureau has been around for 26 years and has done a good job of promoting not only increasing hotel sales but it's done a good job of promoting Statesboro in general. It's been very involved with the arts center and the downtown promotions," Lambert said "We've done the marketing for Celebration South, the SCVB supported Scare on the Square. We gave $70,000 to the opening of the arts center. So it's not like we're not promoting those things already."
According to the Budget Assumptions for the Fiscal Year 2011 Operating Budget for the City of Statesboro which were handed out to council members at the city's budget retreat, the city has been considering the possibility of redistributing hotel/motel tax revenues. The budget assumption had SCVB funding lowered to 15 percent, the DSDA and the Averitt Center raised to 25 percent and a new Tourism Development Office funded with 35 percent of the tax.
Considering the current funding level for the SCVB, Lambert said the agency essentially would cease to operate in its current capacity if it received only 15 percent of the hotel/motel tax funds.
"If they cut our percentage to 15 percent, they will effectively do that," Lambert said. "Because 15 percent would not be enough to continue to operate as an SCVB - maybe the SCVB could do some advertising with that money or something like that. But it effectively would do away with it."
The law requires that a tourism board of some kind must receive 2 of the now 5 percent hotel/motel tax, or 40 percent of the total collected funds. Britt said the numbers the city and council are now considering 40 percent for the new tourism office, 35 percent for the Averitt Center and 25 percent for the DSDA.
Another funding option is Georgia House Bill 335, which would allow for the use of a Special Purpose Local Option Sales Tax (SPLOST) by a community to fund cultural organizations. A referendum would be required to go before county voters and approved before SPLOST money could be used for such funding purposes. The house already voted in favor of the bill 164-1 and the bill received a favorable report from the Senate Finance committee, but the Senate has yet to vote on the proposed legislation.
Britt said the possibility of using SPLOST money won't alter his decision to consider bringing the responsibility for tourism promotion under the city's umbrella.
"It doesn't change anything for me because I feel if you cut the SCVB any amount of money ... if you cut the SCVB (from the current 69 percent) down to 40 percent you're basically telling them ‘you're not delivering the product we want delivered,'" Britt said.