Tourism Improvement District should cover Visitor’s Bureau expense

Editor: I have just sent the following letter to the Sonoma City Council

Mayor, Council Members,

The packet for the February 22, 2012 City Council meeting includes a memorandum from then City Manager, Linda Kelly, to Mayor Sanders and the City Council. The memorandum outlines the preliminary proposal for the post-redevelopment budget and revenue. For revenue, both a sales tax and the Sonoma Tourism Improvement District tax are discussed.

The memo states that “a 2% TID (tax) would provide a means to fuel the tourism economic engine…” The revenue would be used for marketing of overnight stays, which increases the TOT generated. The memo goes on to say, “In addition, if the contract with the Visitors Bureau is not upheld by the Oversight Board, the TID Board should be tasked with funding the Visitors Bureau. This would remove the Visitors Bureau operations from becoming a General Fund expense.” Note the words “TID board should be”, not “could be”. The City Manager recommended, and the City Council acted upon the formation of the Sonoma TID with the intent, that if the redevelopment funds for the Visitors Bureau were cut, the Sonoma TID would pay the entire $218,000 Visitors Bureau operating expense.

When the Sonoma TID was formed, its initial expected revenue and budget was $440,000. If $218,000 had gone towards the Visitors Bureau’s operating expense, the marketing budget for the STID would be $222,000.

For FY2017, the STID’s estimated revenue is $735,000, according to the city’s FY2017 budget. This is $295,000 more than in FY2013. Even if the STID pays the entire $218,000 of the Visitors Bureau operating expenses, the STID would still have $517,000 left over for marketing. Adjusted for inflation, $440,000 in 2012 is worth $466,000 in 2016. So the $517,000 is well above the FY2013 revenue even with taking inflation into account.

So, why is the city contemplating spending $100,000 from the General Fund, when a major reason the STID tax was approved by the City Council in 2012, was to avoid paying the Visitors Bureau operating budget out of the General Fund?

Regards,
David Eichar