The city of Rhinelander's 2020 budget has been approved, however the matter of the city's share of room tax revenue remains unresolved. The city wants to take 45 percent of the room tax revenue in 2020, a significant increase from the usual 30 percent, a move Chamber officials claim is contrary to state law and the terms of the agreement between the city and the Rhinelander Tourism and Marketing Committee.
Before the City Council's Nov. 25 vote to approve next year's financial plan, Rhinelander Area Chamber of Commerce executive director Lauren Sackett stepped forward to explain the chamber's concerns.
In arguing against the proposed increase, Sackett noted that state statute caps the amount of room tax revenue that can be kept by a municipality at 30 percent.
The Rhinelander Tourism and Marketing Committee (RTMC) is to receive the other 70 percent of the room tax revenue, Sackett told the Common Council.
The Rhinelander Area Chamber of Commerce is the fiscal agent of the RTMC, she added.
City attorney Steve Sorenson was asked to give a legal opinion as to whether the city could collect 45 percent of the revenue rather than 30.
"The city can use the money as long as they stay within the terms of their ordinance," he told the council Nov. 25, adding that the allocation has to be used for the advancement of the community as well as the administrative costs for servicing the organizations doing the promotion.
"What I did do is I did research of the allocations that were put forward in the budget, and subject to policy decisions of this board, it is going to withstand legal scrutiny," he explained. "It is a policy decision that you are voting on; legally you can do it, but it is a policy decision."
Ultimately, the council decided to gather more information from stakeholders and revisit the matter at a later date.
In a phone interview last week, Sackett stood by her assertion that the city cannot take 45 percent of the room tax revenue.
"From my understanding of room tax law, the Wisconsin state statutes are pretty clear on what the municipality can retain and how that money is supposed to be spent," she said. "It's also a city ordinance that says the city can retain 30 percent. So I do believe that they are incorrectly allocating funds, and we are going to work to make that change (in the budget)."
Sackett said she found out about the change on Nov. 19 when the proposed budget was posted to the city's cloud drive.
"I had been keeping my eye out for the draft 2020 budget," Sackett said. "So on Tuesday (Nov. 19) morning, I had seen that it had been posted online that those funds were different than it has historically been."
She said she reached out to mayor Chris Frederickson for an explanation.
"I reached out to the mayor because he has been on the room tax group with us, and he said he wasn't aware of that part of the budget. From there, I reached out to our room tax chair to talk about what we should do."
When asked if she tried to get information from either city administrator Daniel Guild or finance director Wendi Bixby, Sackett said she did attempt to make contact with the latter.
"I reached out to Wendi Bixby, asking for clarification, and I did not hear back from her," she said. "And I chose not to reach out to Mr. Guild. I haven't talked to him in quite a while, I have not yet reached out to set up a meeting about this issue. But it's been a while since I've had conversations with him."
She said the Thanksgiving holiday made it difficult to contact an attorney for assistance on the disagreement.
"We are in the process of looking at all of our various avenues," Sackett said. "We are a part of some organizations that have some legal advice that they can offer to us. But with the short week and the holidays, I have not been able to connect with any of those people yet."
Sackett said there are options for the Chamber to consider.
"We are looking at all avenues to work to make this the best form of tourism advertising and promotion," Sackett said. "We really want to make Rhinelander the destination that we know it can be."
The room tax district collects the extra tax money from the hotels and resorts in Rhinelander and the town of Pelican. The money can only be spent by a tourism organization, in this case the Chamber, to promote lodging in the area, with a portion going to the city to be spent to promote tourism in Rhinelander.
"We are looking at all avenues to work to make this work out, and we know that the room tax organization and the Chamber have a lot of resources and tourism knowledge that we don't want to see not be utilized by the city taking over certain things that they think they can do the marketing for," Sackett explained.
She said that it has always been the committee's intention to work with the city to promote the entire area with the revenue.
"I don't want this to be a point of contention," Sackett stressed. "I want this to be collaborative with all the things that the Chamber does. I really hope that if they really had concerns about how we are doing our marketing and advertising, they would have come to us first, rather than try to take money from us."
She said the Chamber "was never included in any conversations at all about this."
"It was never shared with us that they didn't like what we're doing, or they had different ideas from what we've been doing," Sackett said. "I would have hoped that they would have approached us at one of our (room tax group) meetings. They (the city) do have two spots for the room tax group that only the mayor has been attending our meetings this year."
"We really feel that we have a lot of great resources to be the tourism advocate for the community and the city does have a place at the table to help us make those decisions," Sackett added. "And we would rather work with them on this issue than have them work against us on this issue. We are here to be an advocate for our community and we're here to really drive visitation into our community, and I hope that we can move forward in a way that is best that works well with our other organizations."
Mayor Frederickson did not respond to an email request for comment on Sackett's statements.
Jamie Taylor may be reached via email at jamie@rivernews online.com.
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