Glenwood City Council leaves tourism marketing fund structure intact
GLENWOOD SPRINGS, Colorado – City Council voted 4-1 Thursday night to maintain the current accommodations tax funding share for tourism marketing efforts, which are currently administered by the Glenwood Chamber Resort Association.
The decision upheld a previous 3-3 vote in July rejecting a budget resolution that would have taken part of the marketing share of the tax dollars and put it toward event promotion grants next year.
However, because of the tie vote, council agreed to give it more discussion at a future meeting.
A funding structure OK’d in 2006 gave 80 percent of revenues from the city’s 2.5 percent accommodations tax to tourism marketing efforts, while 20 percent was to go into a separate city fund for special event promotion grants.
But, a stipulation of that agreement said the annual marketing budget could not fall below $546,000. And, if tax revenues dip below that amount, 100 percent is to go into marketing, according to the agreement.
The combination of a negative marketing fund balance after 2009, and a continued decline in accommodations tax revenues this year, meant there wasn’t any new money for event promotions this spring.
“I do feel that tourism is a tremendously important part of this community,” Mayor Bruce Christensen said at Thursday’s meeting. “But we didn’t even have the 20 percent to work with this year.” That made the special events grant cycle this spring particularly difficult, he said.
City Council ended up backfilling the promotions fund with some of its health and human services grant money to pay for such things as the Fourth of July fireworks and downtown lighting during the holidays.
A proposed change in the accommodations tax funding split would have put a straight 80 percent of revenues toward marketing and 20 percent toward event promotions, without a threshold for marketing.
At Thursday’s meeting, chamber tourism officials argued that an effective marketing effort requires at least $500,000.
“As we see a drop in marketing dollars, the number of people who come to our town is going to continue to decline,” said Tourism Board member Steve Beckley, who owns the Glenwood Caverns Adventure Park.
Accommodations tax revenues fell below $600,000 last year after bringing in more than $800,000 the previous two years.
Tax revenues continue to drop this year. The June tax report showed another 5.8 percent decrease in revenues, and year-to-date revenues are down 6.6 percent compared to 2009.
Likewise, lodging occupancy figures compiled by the Chamber Resort Association are also down about 7.5 percent for the year, including a 10.6 percent drop in occupancy for June.
“If my park numbers were going down like that, I wouldn’t spend more money to plant flowers,” Beckley said, relating it to the city putting money toward special events. “I’d keep it in marketing to get more people here.
“It’s an endless spiral, and it’s money that may never come back,” he said.
Council agreed to keep the funding structure as is for now, but will also lower the required reserve balance from 30 percent to 15 percent as a way to free up some more money in future years for promotions grants.
But the council vote didn’t come without a word of caution to keep spending in check at the same time other agencies are getting by with fewer resources.
“I don’t think anyone disputes that marketing is important,” Councilor Russ Arensman said. “But the downfall we’re seeing is not strictly related to a decrease in marketing dollars. We did have a massive national recession.”
Only Councilor Stephen Bershenyi voted against keeping the current funding structure in place.
“I think it’s an unfair equation,” he said. “We’re asking other organizations to go without, and I have a real fundamental problem with that.”
In a related matter, City Council also began the process to solicit applicants for the new city Tourism Board, which was approved last month to replace the existing board that operates under the auspices of the chamber.
The city will accept applications for the new board through Aug. 26, and intends to appoint the new board at the Sept. 2 City Council meeting.
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