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Hope groups seeking innkeeper dollars


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An organization that sponsors Hope’s largest outdoor festival wants to become a satellite operation for the Columbus Area Visitors Center and obtain the funding that could come with it.

Heritage of Hope Inc. is seeking up to $40,000 generated from the county’s innkeeper’s tax that was provided a year ago to the Visitors Center for use in 2014, the Hope organization’s spokesman Larry Simpson said.

If the Visitors Center approves the funding, an 18-month pilot program would have Heritage working with the center to increase hotel and motel stays, said Lynn Lucas, Visitors Center executive director.

 

The Convention, Recreation and Visitor Promotion Commission wants to use proceeds from the innkeeper’s tax to attract visitors from outside a 50-mile radius of Bartholomew County, said Denise Pence, commission president.

“We have to look at hotel and motel stays by the month because that’s where most of our income is generated,” Lucas said. “The local ordinance also specifies you must have local hotel owners on the (commission), and that’s what their interests are going to be.”

But even if Heritage of Hope’s request is approved, the arrangement between the organizations will be on a trial basis only, Lucas said.

It could take up to two years before the Visitors Center makes decisions regarding a permanent satellite location, she said.

While Heritage of Hope is best known for presenting the three-day Heritage Festival each September in Hope, there are four divisions within the organization that work to promote a variety of programs in the northeast Bartholomew County town, Simpson said.

The grant money being sought by Heritage of Hope represents about 3 percent of $1.24 million collected and distributed to the Visitors Center last June as part of its 2014 allocations from the visitor promotion commission, Lucas said.

The county’s innkeeper’s tax, assessed by adding 5 cents to every dollar spent on hotel stays lasting less than 30 days, has generated between $1.01 million and $1.35 million annually over the past five years.

The money is in turn reinvested in tourism efforts through the promotion commission to increase the number of visitors from outside Bartholomew County.

Of the $1,918,786 in total income received by the Visitors Center last year, 67 percent came from the innkeeper’s tax, according to the organization’s 2013 annual report. The remaining $678,410 was self-generated through other sources such as special events, tours, gift shop sales and facility rentals, the report states.

The Visitors Center decided to require that the recipient of the grant money in 2014 would be willing to become a satellite of the Columbus office to promote countywide tourism, Lucas said.

“This is much larger than just Hope or the Heritage Days,” Simpson said.

Welcome Center funding

The $40,000 grant being sought by Heritage of Hope is money that the Hope Welcome Center had wished to receive.

The Hope Welcome Center received $48,000 in 2012 and $82,500 in 2013 from the innkeeper’s tax proceeds. But in June 2013, the promotion commission voted 6-4 to provide no direct funding to the welcome center for 2014, rejecting its application for $92,400.

The majority of commission members felt money allocated to the welcome center “did not generate the kind of progress in increasing tourism that had been expected,” former commission president Jeff Baker said shortly after the decision was made.

The 4-year-old welcome center, created as a project of the Hope Chamber of Commerce, nearly closed while waiting to receive the money that Lucas said was never promised to them.

Bartholomew County hotel and motel owners, who provide the funds allocated by the visitor promotion commission, have said the Hope Welcome Center doesn’t produce many overnight stays, Lucas said.

The commission voted last June to recommend to the county council that all innkeeper’s tax proceeds, totaling $1,320,120, be handed over to the Visitors Center with instructions for the center to distribute some of the funds to other organizations to promote Bartholomew County events outside Columbus.

For the rest of 2013, the Hope Chamber of Commerce believed the Visitors Center had set aside $40,000 of the total innkeeper’s tax proceeds specifically for the welcome center, according to minutes from the Jan. 20 meeting of the Hope Town Board.

But Lucas said those funds were never earmarked for any one community or organization.

According to the town board minutes, Chamber President Chad Swank said that, while he was expecting the Visitors Center to provide him with application instructions for the $40,000 in December, he didn’t hear back from them until after the first of the year.

In January, Swank received an email from the Visitors Center stating only that $40,000 had been set aside for a satellite operation, the minutes state.

Welcome Center officials have reservations about becoming a satellite operation, however, Swank said.

Former Hope chamber president Donna Robertson said one concern is the Visitors Center’s requirements for using both staff and funding for visitor-tracking information.

Closure a possibility

But Lucas said that information is required by the state as a requirement for having an innkeeper’s tax.

Swank said when he asked Visitors Center officials in January if the satellite proposal was the welcome center’s only option he was told it would be discussed in February.

When a request for proposal notice for the money was published in March, the Visitors Center stated it “will be accepting proposals from eligible Bartholomew County non-for-profit organizations interested in establishing a satellite location for the purpose of promoting countywide tourism activities and encouraging out-of-county visitors and overnight hotel guests.”

This year’s operating budget for the Visitors Center shows $40,000 has been reserved for a satellite operation.

Without the funding, the Hope Welcome Center faced closing at the end of 2013, Swank said.

Hope chamber officials turned to the town, which agreed to provide $6,000 this year in quarterly payments from economic development income tax funds to pay for the center’s operating expenses for one year, Hope Clerk-Treasurer Diane Burton said.

While those funds helped keep the center open, it also led to complications when Hope chamber officials met with Visitors Center representatives March 26.

Hope chamber officials didn’t think it was proper to request operational funds for the welcome center from the Visitors Center while receiving economic development income tax funds from the town, Swank said.

So after acknowledging they were receiving town funds for a limited one-year period to fund operations, the chamber told the Visitors Center they wanted the $40,000 to fund tourism marketing, promotion and advertising, Swank said.

In response, the chamber was told the welcome center should apply for part of the $30,000 that had been set aside for marketing grants, instead of the grant set aside for a satellite operation, Lucas said.

But the welcome center decided not to apply after learning that marketing grants are only to be used for specific events, Swank said.

Since the welcome center’s mission is to address day-to-day inquiries and not to sponsor events, the Hope chamber and welcome center concluded they probably would not qualify for a marketing grant, Swank said.

The Hope chamber then decided not to pursue funding through the Visitors Center, Swank said.

Satellite discussions

The Visitors Center has met three times with Heritage of Hope this spring to discuss creating the satellite operation, Lucas said.

While the Visitors Center’s executive committee could make a funding decision about the $40,000 by the end of June, information is still be gathered and no timetable is in place for awarding the money, Lucas said.

Although the welcome center was turned down for direct funding from the visitor promotion commission last year, Swank said the organization is requesting direct funding again when the commission meets Monday.

The meeting gets underway at 3:30 p.m. Monday in the Bartholomew County council chambers.

The welcome center is seeking an estimated $45,000, Swank said.

But Pence said she and other members of the 11-member commission have concerns regarding the welcome center’s request.

One concern is a recent State Board of Accounts audit showed the welcome center had about $13,000 of unspent innkeeper’s tax money in February of this year from a previous allocation that, under state regulations, should have been returned to the commission, Pence said.

The issue was resolved within a few months, however, when the commission decided the welcome center could keep those funds as long as it agreed to conditions set by the State Board of Accounts.

Those conditions involved filing quarterly reports on the funds to the commission and spending the money only in accordance to local and state requirements by the end of this year, Pence said.

Neither the welcome center nor the commission was aware of the regulation regarding returning the funds, Swank said.

While Pence said she thought the matter was “no big deal,” she expects the audit will be on the minds of some commission members.

Pence also questioned that the welcome center uses the tax identification number of the Hope Chamber of Commerce when applying for funds. That practice sets a bad precedent, Pence said.

The commission will send recommendations about 2015 innkeeper’s tax grants to the Bartholomew County Council to be considered during annual budget discussions late this summer, Pence said.

Commission members are expected to be conservative about the 2015 allocations after 2013 innkeeper’s tax collections totaled $1,240,376, a drop of $114,683 from the previous year, Pence said.

The decline in tax revenue was caused by corporate and military travel expense cutbacks and a temporary tax problem with one hotel that has now been resolved, Lucas said.

Currently, 2014 innkeeper’s tax revenues are about 4 percent higher than the same time last year, Lucas said.

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