A financial relationship between the city of Highland and its chamber of commerce hit a snag at a recent budgetary meeting, as Mayor Joe Michaelis deemed the city’s funding of the organization illegal.
The topic of the chamber’s funding was brought up by Michaelis during a discussion of the city’s FY 2020 budget. Highland’s Chamber of Commerce has received the funds from the city’s hotel/motel tax for more than a decade that funds events the chamber believes brings tourism to the city.
Those events include the annual Lighted Christmas Parade and Street Art Festival. City money also helps pay for wages, a website and more. In total, the chamber requests roughly $24,000 annually.
Michaelis said state statute 20 ILCS 605/605-705, which allows the collection of a hotel/motel tax in Highland doesn’t allow funding for things outside of tourism. He said while many events the chamber hosts fall under tourism, the other items budgeted have little to do with bringing people to Highland.
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“It hovers around one word and that’s tourism,” Michaelis said.
In a rebuke of the council’s years funding toward the chamber, Michaelis suggested the council and city take a “hard look” at the request from funds from the chamber before granting the chamber the annually requested $24,000.
“I’m suggesting to the council to look at this item very hard,” Michaelis said. “We cannot do this. … We cannot pay their wages, we cannot pay for their website, their building maintenance and the list goes on.”
City Attorney Michael McGinley echoed the mayor’s comments on the state statute.
“The money that we collect on the hotel motel tax needs to be used by the city explicitly for tourism or to attract overnight guests,” McGinley said.
Michaelis also added that the city surveyed several nearby cities to study their financial relationship between the chamber. He said none of the responses from nearby cities funded their chambers in anyway either than membership fees.
The council agreed, going forward, the chamber should have to come to the council and request funds like other organizations in the city and not receive blanket funding.
“Somewhere or another this got past us and we have just been indiscriminately giving out $24,000 a year,” he said. “So when you’re looking at this I would strongly suggest that there be no money budgeted under this item and that they, like anyone else, approach the podium and have a very detailed outline of where every bit of the monies are going to.”
Councilman Aaron Schwarz, who first brought up the concerns about the city’s funding of the chamber last month at a council meeting, said funds from the hotel/motel tax could be used more effectively somewhere else.
“We had talked about the need for a new swimming pool,” Schwarz said.
“A great idea,” Michaelis replied. “It’s a destination. Is that tourism? Absolutely.”
Schwarz said the items the funds from the tax were being earmarked for, in general, didn’t seem as important keeping the city’s parks and recreation department funded in the wake of Illinois’ new minimum wage legislation and a possible new pool.
“We were talking earlier about how parks and rec is going to be hit really hard with the minimum raise change and with the swimming pool I think we ought to earmark those funds for those purposes,” Schwarz said. “I think, personally, that would be a priority over most of the things I see the funds of hotel/motel funds going to.”
Other members of the council agreed the chamber’s funding should be reviewed this year.
Chamber of Commerce Executive Director Nancie Zobrist said she couldn’t comment on the discussion about the funding because the city had not made the chamber aware of the issue.
The Chamber of Commerce, in its request to the City Council in February stated the $24,000 would be used to pay for events hosted by the chamber, questions the chamber fields about other events in town and the city itself. It also goes toward annual membership with the Tourism Bureau of Southern Illinois, advertisements in several publications and serving as the city’s visitor center, which staff time and resources are spent toward.
“These funds represent an integral part of our annual budget and are used to support programs and events that create a high quality of life for Highland residents and visitors alike,” a letter to the council read. “The Chamber works very hard every day of the year to promote tourism in Highland.”
The chambers 2018 budget was roughly $30,000.
The request also touches on why the funds requested should fall under the label of tourism, stating the chamber office serves as a visitor’s center for the city, that its website brings in tourism and that the several events it hosts brings in tourists who eat in town and often stay overnight.
The budget is far from being passed and is currently in a draft stage, but as it stands Michaelis said the chamber should have to come forward to ask for funds one request at a time, based on statute and that things outside of tourism-based activities should not be funded.
The budget will be in mid-April and voted on by the council Monday, April 15, after a public hearing.