County approves CVB budget

3/19/2013

By SCOTT AUST

By SCOTT AUST

saust@gctelegram.com

Though the issue of using transient guest tax money for economic development recruitment is far from resolved, the Finney County Commission decided Monday to approve the 2013 Convention and Visitors Bureau budget.

The proposed $1.4 million CVB budget had been in limbo since last November when the county postponed action on the budget until a decision was made about sharing excess bed tax revenue with Finney County Economic Development Corp. The CVB has been operating this year using its 2012 approved budget of $800,000.

The county is still working on revising the charter resolution that governs the bed tax, a 6 percent tax charged by hoteliers to those who stay in local motels. Two weeks ago, the county commission sent the issue to its legal counsel to come up with wording that would allow the revenue to be used for economic development purposes when a need arises.

Commissioners said Monday they hope to see a draft of an amended resolution at the next commission meeting.

For more than six months, the CVB and Finney County Economic Development Corp. have talked about how future additional bed tax revenue that exceeds CVB's budget could be held in reserve by the county commission to use for potential economic development incentives.

In February the CVB board agreed to put a $45,000 line item in its 2013 budget earmarked for the county's economic development group to use, but the current bed tax resolution does not allow funds to be used that way.

John Washington, CVB treasurer, said approving the CVB budget would provide budget authority to make expenditures, but doesn't necessarily mean the organization will spend it all, or that it has specific uses identified for all the funds.

Washington indicated the $1.4 million budget includes $800,000 in projected revenue from the bed tax and $629,000 in unencumbered cash from CDs that came with the CVB after its split from the Chamber of Commerce.

Essentially, the money is carryover from cash balances in 2011 and 2012 and is not earmarked for anything right now. But to spend it, those funds need to be put into a line item in the budget, which makes some expenditure line items look inflated.

"Those monies are not identified except for in the line items. Those line items will fluctuate," he said. "So you'll see line items that have actual amounts, but it's inflated to handle that unencumbered cash."

Commissioner Dave Jones appreciated the explanation of some of the inflated line items, some of which jumped out at him, but told Washington he has asked for more specifics in the past.

"The budget's great, but I'd like to know what the money is actually being spent on, and I don't know how we get a hold of that. People ask us all the time, what are they spending it on? I have no idea," Jones said.

Washington said the CVB plans to begin providing a detailed expenditure page each month to be included in the commission's meeting information packet, and he told Jones expenditure information from 2012 is available if the commission wants it.

Regarding using CVB funds for economic development, Jones suggested looking at the $629,000 in unencumbered funds to create a pool of money that either CVB or FCEDC could draw upon if something big came along that needed money.

While not sure of the legality of doing something like that, Jones said an arrangement like that would create a vested interest for FCEDC to put "heads in beds" because a portion of its potential income would be based on hotel stays.

Washington said he wasn't sure of the legality, but indicated the county can always come to the CVB to request money as long as it meets state statute.

Jones, noting that the county approves the CVB budget, said it's a bit backwards to say the county should go to CVB to request funds. As long as it's legal, unused funds ought to be set aside and then CVB or FCEDC could come to the county commission to request their use.

"The voters didn't elect the convention and visitors board. They did elect us and they can un-elect us," Jones said.

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