Alderman questions room tax spending

Alderman Greg Knight calls for narrower focus, more reporting for funds

A city of Medford alderman is questioning how tourism money is being spent and has called for changes in how organizations account for the room tax grant money they receive.

Like many communities in the state, Medford imposes a room tax, which is a special sales tax on those staying in motel rooms and other lodging, with the money used to promote tourism in the community. State law calls for the money to be used for tourism promotion and development.

Up until 2016, municipal councils had control over how the money was spent. However the law was changed that year to require the creation of independent commissions to review and approve funding requests after complaints of municipalities using the money for purposes unrelated to tourism. Each January the city council receives a report from the room tax commission including reports from the groups on how they spent the funds they received.

At Tuesday’s city council committee of the whole meeting, alderman Greg Knight spent more than 20 minutes highlighting a lengthy report he prepared based on concerns he had with the annual report presented to council in January 2020 on funds spent in 2019.

“It is questionable how we allocated those dollars,” he said, explaining that he did not see how the money was spent fit with his interpretation of the law.

“It doesn’t mean anybody needs to go to jail or anything,” Knight said, noting he believed it was more of an oversight.

The room tax commission allocate about $30,000 a year in room tax grants to area groups. In 2019 this included support for the Taylor County Fair, Holiday Magic of the Medford Riverwalk, Parkfest, Harvest Days, a health and wellness fair, the city’s Fourth of July celebration, the Taylor County Maple Festival and an archery tournament. Knight went through each allocation highlighting how he did or did not think they should have qualified to receive funds based on each group’s financial reporting. He objected to groups that simply listed advertising as an expense line item stating he felt there needed to be more detailed information provided. Others he questioned for using funds for material or equipment purchases to put on the events.

He also criticized the three groups who did not have reports turned into the city in time for the annual review, noting that while the reports were turned in prior to when the city had to file the annual report with the state in May, he wanted them in a more timely manner.

Alderman Christine Weix noted that in the case of the archery tournament, the money was allocated in 2019 for an event that happened in spring of 2020. She said it is impossible to have a detailed report on how money was spent on an event before the event was even held.

Knight said he recognized that people could disagree with his interpretation over how the money was spent and said that questioning the way the money was spent is a good thing. He called for the council to have a bigger role in oversight of how the room tax money is spent.

Knight also raised questions of if the city was complying with its own ordinance when during the budget process last year council members approved giving 85% of funds collected to the commission to spend and retaining 15% for other city purposes. While state law allows the city to retain up to 30% of the funds for general use, the city’s ordinance currently states the city shall retain 30% with the remainder going to the room tax.

Alderman Laura Holmes defended the organizations that received funds for events and activities. “The money can be spent for more than advertising,” she said.

Knight agreed stating it could be used for tourism promotion. Historically, the city has had a broad view of what tourism development encompasses.

“Is it your intention to narrow what is tourism development?” Weix said. She noted that every event on his list had the goal of trying to draw people to Medford. She questioned if Knight’s goal was to narrow that down or was he seeking better documentation.

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Knight proposed an interpretation that would more narrowly look at what would be reasonably expected to generate overnight stays.

Holmes noted that a motel owner serves as a member of the room tax commission and helps decide how the money is spent. In addition to members input the commission routinely solicits feedback from all motel owners about events and uses that to gauge future spending.

“I don’t want to narrow the scope of that committee,” Holmes said.

Alderman Mike Bub, who is the city council’s representative to the room tax commission defended the decisions made by the body and described Knight as “cherrypicking” his interpretation of the statute in order to find fault with how the money is spent.

Bub noted that the city has never received any questions from the state about how the money has been spent and that there have never been concerns with the forms filed with the state. He said the commission members were very aware of the law and had spent months going through it as the developed guidelines for how money can be spent. “This group takes it very seriously,” Bub said.

He said that while the city has oversight of the room tax program, that oversight is in receiving the report of how the funds were allocated rather than ongoing oversight such as with a council committee. Knight had complained of not getting minutes from the quarterly commission meetings, to which Bub responded that the commission has no legal requirement to submit the minutes to the city council. Bub said all the meetings are open and posted and anyone is welcome to attend them, something he said Knight has not done at any time in the past three years.

Bub defended the people who work to put on events and community projects and said that it was wrong of Knight to suggest that people who are volunteering their time and in many cases invest their own money into events are acting improperly. “To insinuate that things are being done shady, that is wrong,” Bub said.

Bub agreed with Knight on some points. First was with the need for the city to follow its ordinance. To that end, he moved to change the ordinance to match the more flexible language of the state law. He said this would give the city greater flexibility to make changes to it year by year. Alderman Clem Johnson provided a second and the ordinance change passed on a 7-1 vote with Knight opposed.

Bub then went on to propose to praise a uniform postevent report form that Knight developed with the help of the city treasurer. He said one of the issues is that each organization reports differently and said that having a uniform report would make it easier to track how the money is spent. However, he said the council did not have the authority to tell the commission to use the proposed forms, but rather made a motion to suggest the commission review the forms and consider using them. “There are some good things in there,” Bub said. That motion was seconded by Holmes and passed unanimously.

Both actions will come back before the city council at next week’s regular council meeting where they will be voted on again.

In other business, aldermen:

_ Recommended increasing the rate for waste hauled into the wastewater treatment plant by 3%. According to wastewater superintendent Ben Brooks, the increase is needed due to the continue operation and maintenance costs of treating the large amount of waste hauled into the city. He said the volume had increased from 3.25 million gallons in 2006 to a projected volume of 25 million gallons in 2021. Under the change, starting January 1, the rate would increase from $14.68 per 1,000 gallons to $15.12 per 1,000 gallons for holding tank waste and from $86.52 per 1,000 gallons to $89.12 per 1,000 gallons for septic tank and portable toilet waste. Brooks explained the septic tank waste is more concentrated and requires additional chemicals and procedures for treatment. Brooks said the new rates are in line with what other communities in the area are charging.

— Alderman Christine Weix questioned Greg Knight’s intent in raising questions now about the room tax.

it your intention to narrow what is tourism development?”