Marinette Forms City Tourism CommissionIssue Date: February 1, 2017
Thanks to a new state law that went into effect with the start of 2017, the City of Marinette has formed a new commission to decide how to best use the approximately $300,000 a year they collect through the city's room tax.
The group met for the first time on Friday, Jan. 27. Members are Mayor Steve Genisot; Alderman Dorothy Kowalski, representing City Council and its Finance Committee, K.C. Wilson, manager of the Best Western Riverside Hotel, representing hotels and motels, and Scott Wahl as a citizen at large.
A number of other interested parties were on hand for Friday's meeting, including Marinette City Attorney Jonathan Sbar, Marinette County Supervisor Shirley Kaufman, who is a former city alderman and current chair of the county's Economic Development and Tourism Committee; former Marinette Mayor Doug Oitzinger; representatives of American Legion Baseball; City Clerk Lana Bero; City Finance Director Jackie Miller, Judy Alwin, who runs the state Visitor's Center on Stephenson Island in Marinette.
Genisot has been serving as acting chair to get the new commission organized, so the first order of business at Friday's meeting was election of a regular chair.
Wahl nominated Wilson, explaining he is the one member in the hotel business and therefore most versed in what types of promotion might be most beneficial to them. Kowalski seconded and everyone voted in favor.
Sbar distributed copies of a Wisconsin Legislative Council information memorandum on the two new state law provisions that govern municipal room taxes in Wisconsin. Those laws created the need for the city to form a committee or commission to govern spending of the room taxes it collects. That had previously been optional.
Sbar said that provision had been somewhat controversial, since it takes some authority away from cities. He suspected it was enacted as a result of lobbying by the hotel association, "but it is what is and it is in place," he said, indicating they must work with it.
There is a bit of confusion over provisions in the two laws that seem to conflict, with one saying they must contract with some other tourism entity, and another saying the committee or commission can decide how to spend the room tax money. The League of Municipalities advises that they must contract with an entity, but how much they spend that way is up to the Commission.
There was a long discussion on what constitutes a "tourism entity," and commissions were asked to look into options and ideas before their next meeting when they may or may not make a decision. A requirement that the entity's board of directors must include at least one representative of a lodging place that collects the room tax, so at this point neither the Marinette County Tourism Alliance nor the Marinette Menominee Chamber of Commerce would meet the criteria. If the Alliance were incorporated it would qualify with or without a city hotel memo on its board. Also, the Chamber is a Marinette and Menominee entity, and not entirely City of Marinette.
Sbar asked about the possibility the county' Tourism Alliance will be incorporated as a private non-profit, which has been on their agenda for consideration. Currently it is a county committee, an arrangement that had been put in place a few years ago as an interim measure until the group could be incorporated.
Kaufman said the group is waiting to find out what happens with the city, and with making the tourism coordinator's part time job into a full time position.
There was talk of what the city can do if a qualifying organization does not exist, which at this point seems to be the case. It appears any city-based non-profit organization might meet the legal requirements. However, Sbar said under the non-profit option, the entity would need to spend 51 percent of its total budget on tourism.
Also, Sbar said, while the law says they must contract with a tourism entity, it does not say how much of the room tax proceeds they have to contract for. He felt even a contract for $500 a year would fulfill the requirement, which would leave the Commission free to decide for itself how to best use the rest of the room tax money.
The city is allowed to retain up to 30 percent of the room tax money for regular expenses. The remaining 70 percent must be used to promote tourism in the city.
Genisot said the by law the organization they contact with must spend at least 51 percent of the room tax money it gets to promote tourism in the city, not 51 percent of its entire budget.
Genisot and Sbar agreed the decision could be delayed, and asked members to give some thought to the possibilities before the next meeting. Sbar advised giving some thought to deciding just want they want the contracted entity to do for the city.
To questions from Oitzinger, Sbar said the city itself has no control over how the 70 percent of room tax money is spent, only the Commission does. However, the Council is represented by Alderman Kowalski, who is also chair of the Finance Committee.
Wilson asked if there is any limit on how long the city can let the room tax money accumulate before it is spent, and Sbar said to his knowledge there is none. They can have for big ticket items like a convention center, for example.
The city collected $265,000 in room tax dollars last year, but the budget had anticipated $300,000. That money helped pay some city expenses, for example the money that went to the Tourist Information Center for expenses and supplies and Logging Festival seed money.
To questions from other Commission members, Wilson said the hotel business is seasonal, and they are generally full in summer. He said while the Cabella's Walleye Tournament will be wonderful exposure and a great thing for the city and the area as a whole, "It's the winter months we need promoted." He said even Marinette Marine seems to station more personnel there in summer. He felt sports tournaments are the only really logical things to work on to draw visitors and fill hotel rooms in winter.
Wahl asked for a report at the next meeting on what roommate money came in in recent years and how it was spent.
There will be some expenses for the city to host the huge Cabella's National Walleye Tournament this summer, and at Friday's meeting the Commission approved paying for the major item, the $15,000 host fee. Other obligations for the city include hosting a complimentary pairing meeting/reception for approximately 300 people on Tuesday, Aug. 15, the evening prior to the start of the tournament, with location and food provided by the city; provide volunteers as needed to work during the tournament, and provide complimentary ice for fish care during the event. Cost of ice alone could be well over $500.
Wilson said Best Western has agreed to "comp" some of the needed rooms. Genisot said the county will likely put $5,000 toward tournament expenses. Sbar noted they have also applied for a GEM Grant from the State Department of Tourism to help cover expenses.
The city also must provide an adequate launch facility and weigh-in sites during all the days of the event, provide complimentary housing for the tournament staff and camera crew (10 rooms for five nights), and locate discounted/preferred hotel rates to advertise to tournament anglers. Contestants will probably need 750 room nights during the event.
"No city has ever lost on this, they just welcome their money back," Alwin declared.
How future funding requests will be handled is a decision to be made by the Commission in the future. Some items, for example bleachers for the baseball field, already are in the city budget. Other items of that sort would go first to the Parks and Recreation Committee, the city's Finance Committee, and then to the Room Tax Commission.
Genisot suggested before their next meeting commisison members should do some research to find out what other communities do, what sorts of projects they fund, and in general, what criteria they require.
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