City holds lodging tax funds

The Port Orchard City Council acted against recommendations by the city’s lodging tax committee, voting to shelve the allocation of $13,624 dollars in lodging tax funds. They’re saving it for a rainy day.

The city council voted last week to hold onto a majority of 2011’s lodging tax carry over funds, save $2,700 allocated to a nonprofit organization called The Cruz. The lodging tax advisory committee, a group of four representatives from local businesses and four representatives from local eligible organizations, recommended all of the carryover funds be distributed to eight local agencies that applied to receive the money.

Lodging tax revenues are collected from local hotels and motels and are to be distributed in a way that boosts city tourism. Often known as “putting heads in beds,” the funds are distributed to nonprofit organizations that foster tourism through marketing, events or recreation.

Council member Jerry Childs, the chairman of Port Orchard’s Economic Development and Tourism Board, argued the money should be set aside for tourism projects that come up later in the year, rather than allocated to specific groups that could have applied for lodging tax funds earlier in the year during the normal cycle of disbursement.

“The idea behind the money is to set it aside for unforeseen marketing and promotional opportunities,” Childs said. “This money is money that is surplus money.”

Council member Fred Chang, advisor of the lodging tax committee, said he was not opposed to shelving the money, if Childs and other council members had a better idea of what the money would go toward. He was afraid, Chang said, that the money could go outside of traditional means of putting heads in beds and go to fund projects such as building the city website or paying for police overtime at events; causes that didn’t necessarily boost tourism to the city.

“The lodging tax committee advises distributing these funds,” Chang said. “I’m hearing no plan but to sit on it (the funds).”

The issue of distributing the carryover lodging tax funds has long been a controversial issue among the council. Last year, the city distributed the carryover funds, but several leaders representing the city’s nonprofit community were upset that the city’s lodging tax didn’t go to fund local events, while organizations such as the Kitsap Peninsula Visitor and Convention Bureau got more money.

This year, requests of more than $40,000 came in from eight groups seeking a slice of the $16,324 in carryover funds. Two of the groups — the Port Orchard Bay Street Association and the Cedar Cove Inn — were deemed by the city’s attorney not eligible to receive funding because they did not meet the criteria for distribution set out by state law. Money to the Bay Street Association would have gone toward funding marketing for the planned Port Orchard Public Market, a privately owned business. Cedar Cove Inn was also deemed ineligible to receive funds because it is privately owned.

Gil Michael, the owner of Cedar Cove Inn and his wife, Kathy, voiced their distaste for the decision to shelve the money after the city council meeting.

“To have them [the nonprofit organizations] denied outright by the council is disrespectful,” Gil Michaels said. He argued the funds should be distributed to nonprofits, not put aside because of the idea that they were surplus money.

“These funds are not extra, they are not surplus and they need to be correctly termed and discussed,” he said.

NOTE: A previous version of this article incorrectly named the Cedar Cove Association as ineligible to receive lodging tax funds. The Cedar Cove Association, a local nonprofit organization, is eligible to receive the funds.

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