Chamber, city in dispute over payments, use of funds

The relationship between the Grand Coulee Dam Area Chamber of Commerce and Electric City reached a new low this past week.

While the relationship has been simmering for a long time, it spilled over Oct. 22, when the chamber’s weekly meeting was devoted to a perceived problem in how Electric City handles its hotel/motel money. There was even a suggestion that the chamber sue the city.

The situation got worse last week when the chamber sent registered letters to all Electric City’s council members, its mayor, city clerk and the city attorney.

The dispute is over how the city paid, or did not pay, invoices related to two contracts the city has with the chamber. The city has annually provided hotel/motel funds to the chamber for ad campaigns promoting the area.

One contract this year was for $24,479.58, providing money to support the six major festivals and tourism in general for the area. The city says it overpaid this contract by $3,208.51.

A second contract, executed in mid-summer for $10,000 for a late-season ad campaign, wasn’t fully executed. The city has stated that only $4,300 worth of invoices were turned in for this campaign and they were promptly paid.

Two subsequent meetings have been held, churning over the disagreement. Two chamber board members met with City Clerk Jackie Perman and Tourism Committee Councilmember Richard McGuire at city hall. Then Perman attempted to help patch things up with a visit to the chamber office to deliver the decision that invoices wouldn’t be paid.

But the disagreement goes much deeper than a handful of invoices.

It goes back, the chamber asserts, to the original purpose of collecting the hotel/motel tax from visitors at motels and campgrounds, a tax authorized by the state Legislature to provide funds to develop tourism.

The chamber says that it has repeatedly requested a meeting with the city’s tourism council committee and Mayor John Nordine II, and has been told that it wasn’t necessary. Then the chamber asked to be placed on the agenda for the next city council meeting, and that has been denied.

“One of the many hats the local Chamber of Commerce wears is to advertise and support tourism growth in our community,” Executive Director Peggy Nevsimal said this week via an email when asked for comment. “This is done through general advertising in print, on radio and TV, on the Internet, and through the planning and funding of festivals that bring tourists to town and provide active things for our local population to participate in.

Without funding from lodging tax dollars, which are generated by local resorts, campgrounds and hotels, we would be unable to promote our community. Electric City continues to disburse only a small portion of what they receive from the state, and has now refused to reimburse expenses that they have historically reimbursed. We are at an impasse on how to resolve this, as their tourism committee and mayor have repeatedly told us, via their city clerk, that they do not want to meet with us on this topic.”

Chamber President Kerry Higgins said Tuesday that he didn’t have any other comments to make, other than those already made.

Both Mayor John Nordine II and Councilmember Brad Parrish spoke to the issue. Nordine said, “I don’t think it is helpful for chamber officials to bash our city clerk. She is just trying to do her job.” He also stated, “The city does have a plan to use its reserve hotel/motel money, and we are working on a pathway project now.”

Parrish also commented: “We are following the RCW (state law) in how we handle our hotel/motel money. Why would we want to meet with them when they are abusive to us and getting personal with our city clerk?” He added, “The chamber is entitled to its opinion.”

The city sits on about $300,000 of hotel/motel money and has been accused of “hoarding” the funds and not releasing them for promoting the area.

The city has long maintained that it wanted to take on a major project with the money, but until just recently had not indicated what that project might be. Over the past few months, Parrish, who along with McGuire comprises the council’s tourism committee, has been working on the pathway project.

The council moved ahead at its last meeting in support of the pathway project and is set to officially pass a resolution at its next meeting, Nov. 10. The resolution will call for $40,000 to be set aside from its hotel/motel fund for the development of a plan for the pathway.

The pathway would eventually extend from Sunbanks Lake Resort to North Dam Park, and maybe beyond. It would help eliminate safety issues for walkers and bicycle riders who face traffic at very narrow places along the highway. A number of people routinely walk between Sunbanks and North Dam Park.

Parrish reported to the council that the first phase of the project would likely be from Coulee Playland to North Dam Park, with a projected cost of some $500,000. The city’s hotel/motel money would pay for any matching money that a grant might require. The city gets about $65,000 a year in hotel/motel money, paid through a tax on occupancy rates at Sunbanks Lake Resort, the Sky Deck Motel and Coulee Playland.

In regard to the immediate invoice problem, the chamber has maintained that advertising invoices have been applied to the wrong contract and that correcting that would free up funds to cover other invoices.

Chamber President Higgins and board member Scott Hunter, editor and publisher of The Star, went to city hall to work things out and left hoping that transferring invoices between contracts was a possibility. The next day, Perman called for a meeting in an effort to “patch things up.” She told the chamber that it would have to pay back the money that the city overpaid on the first contract, but that the city would add that amount, about $3,200, to what Electric City gives to the chamber for its 2016 advertising campaign.

The series of events prompted the chamber’s letter to the city and an email to chamber members.

In the letter to the city, the chamber points out that the contract states that “dispute resolutions” will be handled by the mayor, whose decision is final, but that the mayor refuses to meet with the chamber.”

“This balk came as a complete surprise and has plunged the chamber, a non-profit organization into a funding crisis,” the letter states. “All our submitted expenses are for those which have been both incurred and paid for with chamber funds on the expectation that the city would honor their contractual agreement and pay their portion of tourism-related expenses.”

The letter continued: “It is an inappropriate and wasteful use of lodging tax funds to hoard them; they should be spent on tourism activities, as other cities and counties in Washington state do.

“With all due respect, we implore Electric City to take steps to become responsible custodians of the lodging tax funds with which it is entrusted, for the sake of the citizens by which you have been elected and tasked with representing. ...

“We have sent this letter to you and the entire city council in hopes of opening a dialogue with a city representative other than the city clerk about our unpaid expenses and the use of lodging tax monies moving forward. If our request is not honored in what we feel is an acceptable manner, we intend to plead our case in the court of public opinion and, if forced to, in a de novo judicial review, per the terms of the municipal service agreements signed between our two organizations.”

When asked to respond to the conflict, City Clerk Perman stated: “Ever since I moved here in the late 70’s, the chamber has done a great job promoting our area and today is no different. I applaud their hard work. I also admire the city councils throughout the many years in showing due diligence in their guardianship of public funds. It is not an easy job.”