Boyd Says Lid Needed On "Out Of Control Spending" At Visitors Bureau; Doak Defends Agency

Friday, February 17, 2017

County Commission Finance Committee Chairman Tim Boyd said the commission needs to act "to rein in out-of-control spending at the Chattanooga Visitors Bureau."

He said Visitors Bureau officials have no oversight and have "carte blanche" to spend an ever-increasing amount of county collections from the hotel/motel tax.

Commissioner Boyd said the county should be using some of the riches from the hotel/motel tax for paying for tourism-related items, such as $690,000 he said was paid by the county for horse trails at the Enterprise South Nature Park (while applying for a grant to cover a majority of the costs).

Instead, he said the money is going for Visitors Bureau salaries and over $5.4 million in advertising.

Bob Doak, longtime Visitors Bureau president, said, “Commissioner Tim Boyd apparently does not understand basic economics or how to run a business. It appears that he has limited knowledge of how to market & promote a destination to grow tourism.

“The CVB’s mission is to motivate visitors, groups, conventions and sporting events to choose Chattanooga over all other destinations. This is a fiercely competitive industry, requiring a consistent and disciplined approach.

 

"The results speak for themselves, in 2007; the economic impact of tourism in Hamilton County was $710,400,000. Today, the impact exceeds $1 billion. Today, we have more restaurants, attractions, hotels, retail and a greater quality of life due in part to the millions of additional visitors and the money they have placed in the local economy.

 

"Tourism brings new money to Hamilton County without straining our governmental services. The most recent study shows that every property owner in the County saves $500 off the top per year on their property tax bill. The tourism industry pays over $10 million dollars annually in Hamilton County property taxes.

 

"Commissioner Boyd’s attempt to discredit the effectiveness of the Chattanooga CVB is disgraceful. This is an attack on the industry, which is a major contributor to our economy.

 

" Mr. Boyd is attacking the 7,500 employees & their families who rely on their jobs in the tourism industry.

" Mr. Boyd is attacking developers that are making multi-million dollar investments; believing & expecting that this growth in tourism will continue. The investors in our community know that the CVB has created a successful model that has contributed year over year growth.

" Mr. Boyd is cementing his lack of understanding of destination marketing & promotion.

"From a perspective of oversight, The CVB Board of Directors, comprised of brilliant tourism & business professionals, provide input & oversight of our strategies and budget. In addition to the Board oversight, the CVB meets regularly with Mayor Coppinger & his staff. The CVB is audited by an independent, third-party CPA firm every year. The notion that the CVB has no oversight and its spending is “out-of-control” is pure nonsense and inane. Once again, Commissioner Boyd has demonstrated his lack of understanding of the CVB operation.

 

"Our success did not happen by accident. It is the result of visionary thinking by many, including the Hamilton County Commission, who created this funding model. Mr. Boyd’s proposed formula would decimate the tourism industry and result in a decline in thousands of jobs & revenue. We should spend more on promoting tourism; the return on investment is proven.

 

"Mr. Boyd’s unconventional opinion is simply dead wrong. The Chattanooga CVB model works. Rather than putting out negative misinformation, Mr. Boyd should focus on being a positive force for economic development as is demonstrated by the Mayor Coppinger and his fellow County Commissioners."

Records obtained by commission members from Mr. Doak show the agency with 25 employees and an annual payroll of $2.3 million.

Mr. Doak is paid $175,000. Ed Dolliver, vice president of sales, is paid $130,000, and Tim Morgan, vice president of sports, receives $104,000. 

The payroll also includes a music marketing manager, two sports account managers, a network/database administrator, a director of partnership marketing, a marketing and public relations manager, a membership/tourism administrative assistant, a project manager, a director of national/regional accounts, a public relations specialist, a sales coordinator, a director of convention and visitor services, a receptionist, a director of national accounts, two team leaders for visitor services, a director of corporate sales, a director of national accounts, reunions, a director of tourism, a sports tourism specialist, a director of multicultural accounts and convention services and a controller.

Commissioner Boyd said the Visitors Bureau "should be put on a budget of $2 million to cover payroll and marketing." He said the remainder of the hotel/motel receipts could be used for tourism-related projects throughout the county.

The current Visitors Bureau budget shows $8,409,530 in revenue and $8,409,530 in expenses.

Most of the revenue was listed as coming from the hotel/motel tax - $7,178,464. 

Commissioner Boyd said, "They don't even operate a visitors center. Almost all cities of any size have a place that visitors can go to get information about local attractions."

The county at one time had a board that took requests from local groups on tourism-related projects. The Tourist Development Agency was abolished.

The County Commission in 2007 decided to turn its hotel/motel tax revenue over to the Visitors Bureau. It would get everything that was left after (1) funding of the county's 50 percent share of the operating deficit, if any, of the Carter Street Corporation (which operates the Convention Center) (2) funding of the county's 50 percent share of the governmental allocation for the Greater Chattanooga Sports and Events Committee and (3) reserving $300,000 per year (after retirement of debt service in 2010) for capital improvements and operating deficits of the Convention Center.

Albert Kiser, county finance director, said, "All of the proceeds collected by the county (minus the trustee’s commission) now go to the CVB.  As I recall, the sports committee disbanded and the Carter Street debt has been paid off."

In 2007, the county portion of the hotel/motel tax was $4.7 million. After down years in 2008 and 2009 it rose to almost $5.2 million in 2010/2011. It went to around $5.4 million for the next two years and then surged to $5.78 million in 2013/2014. 

Trustee Bill Hullander, whose office collects the hotel/motel tax and turns it over to county finance each year, said it continues to grow annually.

Last year, it brought in $6.6 million for the county and $5.9 million for the city. Daisy Madison, city finance director, said the city uses its part for paying down the debt on the 21st Century Waterfront project and for any riverfront-related expenses.

The previous year it was $6.4 million for the county and $5.8 million for the city.

Commissioner Boyd said, "The Visitors Bureau once a year has a big party where they brag about the $1 billion in tourism spending. That's well and good. It's great. But how much of that would happen without the Visitors Bureau spending $5.4 million on advertising and $2.3 million on payroll?"

He said, "The county mayor keeps hinting that we are going to have a tax increase this year. I, for one, will not support a tax increase as long as we have agencies such as the Visitors Bureau operating with no controls and no oversight spending every dollar they get." 

 



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