CVB requests change to tax formula

BUCKHANNON – As it prepares for the opening of the new National Armory Guard conference center facility this summer, the Upshur County Convention and Visitors Bureau is seeking additional sources of cash flow.

The CVB’s executive director, Laura Meadows, recently appealed to the city of Buckhannon to change the formula of hotel/motel tax distribution in its 2014-2015 budget. The CVB, which has been charged with overseeing conference center operations, asked the city to adjust the formula from a 60/40 split to a 75/25 split at a recent City Council meeting.

Currently, the CVB receives 60 percent of hotel/motel taxes collected in the city, while the city receives 40 percent of that revenue.

Under the entity’s proposed configuration, the CVB would collect 75 percent of hotel/motel taxes, while the city would only keep 25 percent.

“We feel like we’re in a really critical growth stage and that’s why we’re coming to you tonight to ask for an increase in the hotel/motel tax allocation to 75 percent, rather than the 60 percent,” Meadows said at a Feb. 24 Council meeting. “Everybody’s aware of the wonderful conference center that’s being developed. We’re in the works of getting a new conference center manager, who will be taking on that entire facility as far as booking, planning and promoting the facility.”

The conference center manager will also be responsible for developing a specific website for the facility, assembling informational booklets about the conference center and devising an advertising campaign/ The completion of the conference center will enable the CVB to appeal to “a whole new market,” Meadows told Council.

“We’re going to make Buckhannon a feature of the conference center,” she said. “As we’re booking reservations at the conference center, we’re really anticipating that this is going to increase the local hotel/motel tax, so that’s beneficial for everybody. We really think there will be an increase in B&O (business and occupations tax) as we generate more business in Upshur County. The general economic development for the region’s going to be tremendous.”

Councilman Tom O’Neill asked City Administrator Michael Doss what kind of impact changing the hotel/motel tax allocation formula would have on the city’s general fund budget.

Doss said lowering the city’s cut of the hotel/motel tax would decrease by $29,500 annually the amount of money Consolidated Public Works has to work with. Consolidated Public Works pertains to improving facilities such as city parks.

“That (Consolidated Public Works) is our tightest budget,” Doss said. “The money we bring in is the money we expend.

“If I had to advocate right now, I’d much rather see a direct appropriation from council in the 14-15 budget, than I would to go and look at changing the formula,” he added, suggesting $15,000 as an appropriate figure.

“I feel the same way about a supplemental appropriation to the CVB annually for their use,” Mayor Kenny Davidson remarked. “I would really like to see the results of the (conference center) management team meeting, and I would like to see some more detail about what kind of rates we’re going to charge at the conference center, how they’re going to compare to other conference centers and those kinds of things to see if there’s a profit margin.”

Davidson noted the city has made a sizable commitment to the success of the conference center, by securing a loan of $765,000 to pay for the construction of the center.

“That annual payment is in the neighborhood of $41,000 for 30 years,” the mayor said. “We’ve made a big commitment with this conference center. Certainly I think this council wants to see the conference center thrive, so we’ll do what we have to do to make it thrive.”

Doss said arranging a direct appropriation would be in the CVB’s best interest because then its cash flow wouldn’t depend on how many people stay in the city’s hotels and motels. He suggested measuring the revenue the conference center is generating over several years before “bumping those (hotel/motel tax) formulas around.”

Councilman Ron Pugh said he’d rather do a direct appropriation – but in an amount double what Doss had earlier suggested.

“I don’t see why we don’t just go ahead and give them what they asked for this year – $30,000 from the city of Buckhannon,” Pugh said. “Then, there’s no need to wait for another conference to be held or another committee to meet.”

Councilman Dave Thomas requested that Doss return to Council with a recommendation about exactly how much Doss believes the city should commit.

“I don’t think we should make any decision tonight,” Thomas said. “I would ask Michael (Doss) to come back with a recommendation, whether it’s $15,000, $25,000 or $30,000.

“That’s why he’s sitting where he is,” Thomas told Pugh.

Davidson reiterated that he would like to see more details regarding the conference center’s management plan prior to the city giving the CVB any more money for that purpose.

“I think if we as a city council are going to be responsible for the people’s money, we have to have a pretty clear understanding of what we’re going to spend it for and I frankly don’t see that clarity here,” Davidson said, referencing a handout Meadows had supplied.

Doss is expected to present a draft budget to Council at its March 20 meeting.

Contact Katie Kuba by email at kkuba@theintermountain.com. Follow her on Twitter at IMT-Kuba.