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Hotel/motel tax recommendations made

Without the small chunk of money they get from the city each year, the Kitsap County Historical Society wouldn’t be able to bring in the 8,000 tourists and visitors they do annually, according to administrator Pamela Kruse.

Tourists that sometimes shop at other stores and eateries in town.

Tourists that lay their heads down in hotels in Bremerton as well.

The downtown non-profit organization relies on the city’s hotel and motel lodging tax money, which is a 4 percent tax on any nightly room in the city.

The money can only be used to fund tourism-related agencies like the Historical Museum, the Bremerton Chamber of Commerce, or the Kitsap Peninsula Visitor and Convention Bureau.

This year, the city of Bremerton has slipped in their application as well. It requested funding for the start-up costs at the conference center.

City officials refer to the conference center as the cornerstone of the city’s revitalization, as well as a gigantic tourism magnet.

And, according to Finance Director Michael Wilson, as well as Bremerton City Council members, starting next year, they want to use all or most of the hotel/motel tax money to pay for the building next to the ferry terminal.

“The city has just as much of a right to ask for the money as the other groups,” said Wayne Olsen, council member for District 1.

“A lot of these organizations have to stand on their own two feet eventually.”

Since he was hired in November, Wilson has learned quickly how to squeeze out money from an ever-tightening annual budget.

He first suggested using the hotel/motel tax dollars for the conference center, because it falls into the criteria of a tourism-related facility.

“Our proposal for 2004 was to try not to put a burden on some of those businesses dependent on the hotel/motel tax,” he said. “After this year, we will be proposing to use most, if not all of it.”

According to the city’s application presented to the hotel/motel tax committee, the conference management group Columbia Hospitality plans to bring in 4,800 guests in the first six months of operation in 2004, and 9,920 guests in 2005. In 2005, Columbia Hospitality plans to stock the center full of groups for 276 of the 365 days.

The lodging tax committee is composed of hotel owners in the area, city council members, and directors of some of the groups applying for the money.

Each year, a number of groups apply for about $180,000.

The city-owned Admiral Theatre automatically gets $90,000 of the money, due to a multi-year operating agreement.

For the rest of the groups, they send in detailed applications about how the funds will be spent, how it will bring in tourism, and how successful their efforts have been in the past.

Over the years, not all of the money the city has brought in from the tax has been used to fund the smaller groups.

That money has been culled into a reserve fund, which sits at about $200,000.

This year, the city applied for $150,000 of that reserve fund, as well as $75,000 of the annual fund.

City Council Member Eric Younger, who chaired the hotel/motel tax committee, and who is one of the most ardent watchdogs on the city budget, said the city should get the money it requested.

After several months of discussion, the committee has recommended the city receive $197,000 to help pay for the conference center.

Other groups will get a sum similar to what they received in the past, such as the Bremerton Chamber of Commerce ($35,000), the Bremerton Historic Ships Association ($13,000), the Kitsap Visitor and Convention Bureau (35,000), and the Kitsap Historical Museum ($8,000).

However, nothing will be set in stone until the council approves the annual budget during the Nov. 25 council meeting.

When the city council approved a contract with Columbia Hospitality to manage the conference center, the council endowed the city budget with about $800,000 in debt for start-up costs. That includes paying for Columbia Hospitality’s salaries.

Both Wilson and members on the Bremerton City Council agree that it would be impossible to run the center without the group. There are no current staff that could work overtime to create fliers, network and bring clients into the center.

“We could pay it back out of taxpayers money, but I don’t think we want to cut it out of police and fire. Eventually we are going to have to balance the budget,” Olsen said.

The annual budget process is going to be very “interesting this year,” Younger said. “There will be a lot of tough decisions that will be made.”

Although Younger admits it is impossible to predict the future, he said because more than 70 percent of the city’s budget goes to pay for employee salaries, some jobs could possibly be lost.

As for the future of the hotel/motel tax money, it is important to get the most bang for the buck, he said, and it is yet to be determined whether the conference center will offer all the tourism advertising needed, Younger said.

If it can’t, then he believes the funding should be spread throughout different groups as it is now.

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