UPDATED — Port Angeles opens up lodging tax competition; chamber of commerce to vie for funds (with letter from PA City Manager Dan McKeen)

EDITOR’S NOTE: Read Port Angeles City Manager Dan McKeen’s letter at http://issuu.com/peninsuladailynews/docs/first_quarter_report_response

PORT ANGELES — Port Angeles Regional Chamber of Commerce officials vowed to compete for lodging-tax funds after the city informed Executive Director Russ Veenema that other groups will be eligible for the funding, raising the specter of 2015 budget cuts for the chamber.

“The city will be conducting an open request for proposals [RFP] for any future funding commitments for marketing,” City Manager Dan McKeen said in an Aug. 20 letter to Veenema.

“As with all other nonprofit tourism-related entities, you are welcome to compete in the RFP for these marketing dollars.”

In his letter on the chamber’s 2014 first-quarter report, McKeen raised concerns over hours at the Port Angeles Visitor Center at 121 E. Railroad Ave., which is run by the chamber.

McKeen said visitor center hours coincided with only one of four MV Coho ferry runs from Canada during the peak season.

McKeen also said the business group was not providing lodging-tax grant activity information required by state law.

The chamber, which has more than 450 members, is under a five-year contract with the city that expires Dec. 31.

The contract brought the chamber $340,000 in lodging taxes in 2014 — about half the chamber budget, Veenema said this week.

The contract was awarded to the chamber without going through a competitive process, McKeen said Friday, something that has been done for the past 10 years.

Nathan West, city community and economic development director, said Thursday the requests for proposal will be issued by Sept. 30.

West said eligible groups could include the Olympic Peninsula Visitor Bureau and the Olympic Peninsula Tourism Commission.

Veenema said this week the chamber plans to submit an RFP for the funding for 2015.

Most lodging taxes received by the chamber pay for promotions “and does not stay in our pockets,” Veenema said.

The 2014 lodging-tax funding to the chamber includes $65,000 for administrative support and contract management, $64,000 for visitor center operating costs and $70,000 for event-tourism project grants.

Veenema said the chamber would scale back its operations if it does not receive the lodging taxes in 2015.

“It would be a matter of running as a chamber of commerce and not as an advertising and marketing operation,” he said.

“We would have to look at our staffing levels, what we do. Things would obviously change.”

Summer hours for the visitor center are listed as from 9:30 a.m. to 5 p.m. Mondays through Saturdays and from noon to 4 p.m. Sundays.

Veenema said he arrives at about 8 a.m., with volunteers arriving between 9:30 a.m. and 10 a.m. and the office closing between 4:15 p.m. and 5 p.m.

In response to the city’s concerns, Veenema said the chamber will expand visitor center hours to open at 7:45 a.m. and close at 5:15 p.m. or 5:30 p.m. during the peak season, which ends Sept. 8 and began June 19.

“We’ll do what we can to match as many of the ferry arrivals and departures as possible,” Veenema said.

West said Veenema also has begun providing more information on lodging-tax grants administered by the chamber that go to such events as the annual Dungeness Crab & Seafood Festival, which will be Oct. 10-12 at City Pier this year.

In another change, beginning in 2015, lodging-tax funding for those events will no longer be decided by the chamber or whatever group wins the lodging-tax contract.

Rather, the city Lodging Tax Committee, chaired this year by City Councilwoman Cherie Kidd, will make recommendations to the City Council, which will make event-funding decisions.

Chamber President Todd Ortloff, KONP radio station general manager, said Thursday he was “confident the chamber will have a very good RFP.

“I think it’s going to be a little extra work to put things together, but I think in the end, it may actually be a positive by having us be really focused on what our product needs to be and how we need to do it,” he said.

“We are on par for a record for room-tax collections for the city, so obviously, something is going right.”

Lodging, or hotel-motel, taxes consist of a 2 percent tax paid by overnight guests per stay in lodging establishments.

McKeen’s missive was preceded by a July 2 letter to Veenema citing the need for additional information in six of 10 reporting areas in the first-quarter report, including monthly room-tax collected, monthly comparisons to the prior year and summer visitor center surveys.

It’s the second financial blow the city has meted out to a business group in a month.

On July 24, the city suspended 2014 funding to the Port Angeles Downtown Association for parking lot maintenance and downtown promotions, saying the business group had breached its contract.

The funding will be withheld “until PADA shows evidence of performance,” McKeen said in an Aug. 19 letter to the group’s board president, Bob Lumens, owner of Northwest Fudge & Confections.

West said Thursday that the downtown association’s finances are undergoing an audit.

He said City Attorney Bloor also is drafting a letter in response to the association’s attorney, Richard Shattuck of Silverdale, who has asked city officials to enter into mediation to resolve the two sides’ differences.

The city’s actions toward PADA and the chamber are part of the city’s effort to make groups contracted with the city accountable for their expenditures, West said.

“What we are doing is doing our best to ensure all contracted entities are being treated equally,” he said.

West said the City Council issued a directive to city staff last fall that “the status quo is no longer acceptable, that we need to see changes that result in performance-related outcomes that are measurable, and additionally, that we need to see more effective and efficient efforts from each of the contracted entities, and finally, that the council would like to see those contracted entities working together.”

Ortloff said the chamber and Port Angeles Business Association are proceeding with plans to discuss a merger under the “PA United” umbrella when committees from the chamber and business association meet Sept. 10.


Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at [email protected]

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