Electric City Council moves to sequester lodging tax money

Hotel/motel tax money dominated the meeting as Electric City’s council debated with the chamber of commerce about freeing up additional monies for advertising last week.

The meeting Jan. 13 got a bit ugly, and dragged on for over an hour, with neither side giving an inch.

Councilmember Marie Chuinard said the chamber representatives appeared “hostile” in their approach.

The chamber appeared to ask why Electric City had chosen to give it $10,000 less for advertising in 2015 than it had last year, and asked the city to free up some of the $280,000 it has in hotel/motel tax reserve.

Chamber Executive Director Peggy Nevsimal gave a presentation showing how the chamber had used its funds in 2014, and how it increased tourism in the area. She asked why she hadn’t been allowed to make a presentation before the council late last year, prior to Electric City’s budget being fixed.

City Clerk Jackie Perman said that the hotel/motel council committee didn’t want the chamber to appear. She then asked Councilmember John Nordine, who is one of the council representatives on the hotel/motel committee, if that wasn’t true, and he replied, “Yes.”

Nevsimal said if the chamber would have been allowed to make the presentation last year that it might have cleared up any questions council members might have.

The council earlier last year had agreed to free up 75 percent of the hotel/motel money it received the previous year for use the next year. Later, that was switched back to 50 percent, with the other half going into the reserve fund.

Last week, the council considered a resolution that would move all such lodging tax money collected through 2012 to a new Lodging Tax Capital Improvement Reserve Account that could only be used for building new facilities or improving old ones, not spent on tourism promotion.

Council members and city staff were asked to explain why this happened.

The grilling went on for about an hour when Ridge Rider President George Kohout, known for his frankness, stood up to get in his remarks.

“I have been sitting here over an hour listening to you crying over money that isn’t yours,” Kohout said. “It’s time to get a tourism council so you guys can get the hell out of it. You being involved makes about as much sense as going outside and pissing into the wind.”

He continued, “This thing of our having to go before three towns on our knees and begging for money is a bunch of crap. You guys give us less support than the other two towns.”

Before leaving, Kohout left the council with this thought: “You guys need to grow up and turn the money loose.”

One person said the discussion went on long enough to “age cheese.”

But it didn’t end there.

Steve Salstrom, an Electric City resident, who often comments on city council issues, asked about resolutions before the council on hotel/motel funds. Issues included the fund base being used that year could not go lower than $1,000; and why city staff, such as the city clerk, the public works director and police chief, served on a group that determined how hotel/motel money was spent.

In a “what did they know and when did they know it” approach Salstrom wanted to know who ordered the city’s attorney to write up the resolutions dealing with hotel/motel money and why council members were not informed of the attorney’s involvement.

Mayor Jerry Sands said the city staff involvement was for public safety. They needed to know of special events that the money was going to support “so they could make decisions on road closures and traffic control.” He added, “They don’t make the decision on how the money is used, the council does that.”

Not fully satisfied with the answers he received, Salstrom pressed the issue to no avail.

Council members have stated several times that the hotel/motel tax money reserve fund will enable the city to do a major tourism project, and that’s why they are sitting on it.