By Marcy Stamper
Nonprofits in Okanogan County that have been waiting to find out how much they will get back from the tax levied on lodging — which they use to promote tourism — should get the word this week.
The Okanogan County Lodging Tax Advisory Committee (LTAC) scored applications in January for the $95,000 the county commissioners allocated this year to help the groups with advertising, and the commissioners finished reviewing LTAC’s recommendations and awarded the funds last week.
Still up in the air is an additional $93,000 requested by the county’s Parks and Recreation Board, which manages the Okanogan County fair, for a major bathroom renovation at the fairgrounds. Although that money has been budgeted, the commissioners have not made a decision yet, in part because they are in the process of reorganizing the Parks and Recreation Board, according to Laleña Johns, clerk of the board for the county commissioners.
The pool of tourism-promotions money comes from a 2-percent state tax levied on all hotels and motels in the county, which is remitted back to the county to distribute to promote tourism — specifically, “to put heads in beds.” After 40 percent is taken off the top to pay off the construction bond for the Agri-Plex, the remaining 60 percent is dispensed to nonprofits.
The money for the fairgrounds bathrooms — which will supplement a $50,000 grant obtained by the Parks and Rec Board — may also be delayed by questions about whether the board provided adequate information for LTAC to evaluate the proposal for its potential to attract overnight tourists. The new bathrooms will have showers and a laundry for campers, said Johns.
In a letter sent to the commissioners in March, LTAC members questioned whether the bathrooms meet the goal of increasing tourism and overnight stays. In the letter, LTAC pointed to the commissioners’ expectations that all applicants must show a return on investment so that the funds are used most effectively. LTAC and the commissioners approved a scoring system last fall as the basis for reviewing applications, according to the letter.
The commissioners told LTAC that while they had set aside the money for the bathrooms, the fair would still have to meet the same scoring requirements as other applicants, said Karla Segale, an LTAC member.
“We have no problem with the fairgrounds on the request for funding — it’s straight and above-board,” said Segale. But the letter said “the Fairgrounds request for funding does not adequately address the guidelines set forth by the State RCW [law], which contributes to the perception that all applications are not held to the same standard.” They also said the $93,000 seemed “disproportionate” to the potential return on investment.
The fairgrounds brought in almost $50,000 from RV camping last year, said Johns. The facility collected another $11,000 from winter trailer and boat storage, although there is no lodging tax collected on those amounts.
The commissioners are still evaluating the fairgrounds’ application, said Johns.
Money distributed later than usual
Nonprofit organizations that rely on the 2-percent money to supplement their advertising budget have been awaiting the commissioners’ decision, since they must match the grants with their own expenditures and plan their marketing campaigns accordingly, said James DeSalvo, executive director of the Methow Valley Sport Trails Association, a big recipient of the funds. The awards are usually made by the end of February, according to Rebecca Sawyer, the LTAC secretary.
The county received about $205,000 from the lodging tax this year, and the commissioners authorized $95,000 for LTAC to use for tourism promotions. (They can carry over a portion of the lodging tax for future years.) Total requests exceeded $160,000, so LTAC was not able to recommend grants for all the applicants, nor award the full amount requested.
Requests this year ranged from $44,000 by MVSTA to $500 by the Friendly OK Car Club. The other largest requests came from Methow Arts Alliance, which asked for $17,500; the Omak Stampede, which requested $12,950; and the Okanogan Borderlands Historical Society in Oroville, which asked for $10,970.
Most groups got considerably less than they applied for. MVSTA received $27,000, Methow Arts got $11,000, the Stampede got $6,500, the Borderlands Society got $1,944, and the Car Club got $350. The county commissioners followed LTAC’s recommendations.
Many groups that have historically applied for the funds did not submit an application this year. LTAC members speculate that the decrease is connected with a new requirement in state law for the nonprofits to document how many people spend the night to participate in their events.
For many of the smaller nonprofits that present theater, art exhibits or car shows, there is no straightforward way to determine how many people are spending the night, and little or no paid staff to keep tabs on attendees.
“It’s an impossible thing to measure,” said Jane Hubrig, managing director of The Merc Playhouse in Twisp, although an audience survey helps them to gather the information.
Groups such as MVSTA have an easier time calculating overnight stays, since they have an extensive database with addresses of participants in two-day events and track sales of multi-day ski passes, said Kristen Smith, MVSTA’s marketing director.
Where the money is invested
The 2-percent money and its allocation have long drawn scrutiny — and sometimes controversy — from people in the tourism industry who perceive that it is not being reinvested in proportion to where it is collected. For many years, the largest lodging facilities in unincorporated Okanogan County were Sun Mountain Lodge and establishments in Mazama, but with the expansion of nightly rentals at Veranda Beach on Lake Osoyoos the balance has changed, according to Johns. The law does not require that the money be invested where collected.
The Department of Revenue does not make public a detailed account of where taxes are collected, but Johns uses the information to administer the program. She tallied the taxes collected in 2013 and found 61 percent came from the Methow Valley and 39 percent from the rest of the county. Accommodations span everything from Sun Mountain Lodge to B&Bs to RV parks.
Johns also calculated the grants made by LTAC by location of the nonprofit. Although some of the nonprofits she placed in the Methow Valley serve the broader county — for example, the Loup Loup Ski Education Foundation and the Cascade Loop Association — even after subtracting those groups from the Methow total, 62.5 percent of the funds were granted to groups based in the Methow in 2014.
About half of the nonprofits that have applied for the money are located in the Methow Valley, but they typically request and receive larger grants.
The ‘second’ 2 percent
The commissioners and the county’s Marketing Board are also scrutinizing what is called “the second 2 percent,” another tax on lodging levied by the county (as opposed to the state). This money has been divided 60-40 between the Okanogan County Tourism Council (for advertising, a website and maps) and MVSTA (for trail maintenance) since the tax was approved in 1999, according to Johns.
At another meeting in March, the commissioners and Marketing Board discussed the history of the county’s lodging tax and how the money is allocated, said Segale, who also serves on the Marketing Board. The board and commissioners are scheduled to meet again at the end of May to go over the second 2 percent, said DeSalvo, who also sits on the board.