The city and the Cannon Beach Chamber of Commerce are at odds over how to fund the Visitor Information Center.
For the past 30 years, the city has funded operations, which amounts to about $160,000 a year. For the first time, the city proposed spending $40,000, and has asked the chamber to cover the remaining $120,000 with lodging tax dollars. The change would cut into the chamber’s promotion program, which is financed by the lodging tax.
Paying $120,000 to operate the Visitor Information Center would dip into about a third of the chamber’s fund, which is anticipated to have $385,655 earmarked to promote tourism during the off-season next year. Since 2015, the amount of lodging taxes paid to the city has increased by double digits almost every quarter, in part because of the team’s marketing efforts, chamber board president Greg Swedenborg said. He argues the change in fundong for the Visitor Information Center will substantially influence the ability to do marketing and promotion.
“Paying $120,000 this year would make us come to a screeching halt,” Swedenborg said during a budget hearing Wednesday.
The idea to reallocate the funds comes at a time when the city is looking at ways to be more stringent with transfers out of the general fund, City Manager Bruce St. Denis said. Years of heavily subsidizing other city funds like public works, which has projects that can’t be covered by water rate revenues, has caused the general fund balance to decrease over time, St. Denis said.
“The goal is not to take money away from the chamber. We have to make hard choices about how we are spending general fund money,” St. Denis said. “So in this budget we are proposing splitting out some of the funding for the visitor center.”
The suggested reallocation is also a part of a larger effort to consolidate the contracts the city holds with the chamber. Currently, the city holds two contracts – one to transfer funds to support the visitor center and another that allocates transient room tax revenue to be used for promotional purposes. Transitioning into one, multi-year contract could be more efficient, he said. St. Denis also hopes the change could encourage the city to invest more of these dollars into “rainy day” funds.
“We are so reliant on what comes in for tax revenue from a hotel standpoint, and if their revenues go down, our revenues go down. And if something happens, like the economy goes south or something, we’re not in a very good spot,” St. Denis said.
The chamber has long advocated for a multi-year contract, as it would allow the organization to do long-term planning and projects. Executive Director Jim Paino said he does not have an issue contributing to the Visitor Information Center, but is concerned with the increase coming all at once. Instead he is suggesting a phase-in that would allow the chamber to slowly take on the responsibility of funding the Visitor Information Center over the course of three years.
“In two and a half years we started this promotions program from scratch, and now we are to the point where we see that we are making an impact,” Paino said. “We would have to reevaluate our whole process if this came all at once.”
The city will continue to work with chamber throughout the budget process to find a number that works for both entities, St. Denis said.