Tag: H-Tax

  • Revenue down, events uncertain

    Council Members Disagree On Funding Events

    BLYTHEWOOD – As Blythewood works through its budget process for the 2020/21 fiscal year, the funding of events became a point of contention at the May 26 town council meeting, which was held via Zoom.

    With all the disruptions caused by COVID-19, two things were made clear: hospitality tax (H-tax) revenue is down significantly, and unknowns related to the virus could put a damper on the annual town events that are funded by H-tax revenue.

    “At the end of the day, to give you a balanced budget we had to make some drastic cuts,” said Town Administrator Brian Cook, who presented a draft budget on first reading that was created with input from council members.

    The town’s hospitality tax, which is generated by restaurants, is down from a typical $175,000 to just $29,000 – less than 17 percent of the typical amount. The town uses this money to fund tourism, including events that are supposed to draw tourists.

    Looking at a budget proposal that included major cuts to events in the coming year, the council members clashed over what approach to take.

    “I’m not comfortable saying ‘This is how much money we’re going to get’ because I think it’s going to be a lot less than anybody anticipates,” said councilman Donald Brock.

    “If people aren’t going out spending, then money’s not going to flow into the town coffers, and if the town doesn’t have the money, then we can’t spend it. I think we really need to kind of step back and be cautious in allocating funds and not overpromise.”

    Brock’s suggestion was to fund each event at $1 as a placeholder, and re-assess quarterly when actual revenue – and the status of events realistically taking place amid social distancing – is known.

    Also, he said, weight should be given to cultural events like Black History Month, which don’t have their own revenue stream, over entertainment-focused events that raise money through ticket sales and sponsorships and that generate enough revenue to fund themselves.

    “Revenue has nothing to do with it!” declared Councilman Eddie Baughman. He repeated the statement several times.

    “The whole idea behind the hospitality tax money is to bring folks to town to spend money,” Baughman said. “Their revenue should be irrelevant.”

    Baughman was particularly concerned about the Big Red Barn Summer Jam event. He said a significant percentage of the profits it generates go to fund charitable activities in town.

    Baughman asked for an explanation for why the event, which last year received $12,000 in town funds and this year requested $25,000, was slated to receive just $6,250.

    “We’re cutting their funding almost to the point that they’re probably going to back off and not do it,” he said.

    At that (May 26) council meeting, with available H-tax funding dropping from $175,000 to only about $29,000, administration suggested the following reduced funding amounts.

    Only three events were funded at $6,250 in the budget proposal: Summer Jam, which topped 1,000 attended in its second year and RibFest and OktoberFest, both of which brought in well over 2,000 in their first year. Black History Month was slated to receive $5,000; Bengal Boys Golf $2,250; Holiday Market $1,500; the Big Grab $1,000; and Spring Market $746. The July 3 fireworks, which was set to receive $25,000 before the cuts were initiated, brings in 5,000 – 6,000. While it’s still in the discussion stage, council is leaning toward have the fireworks event but with no music and no food and attendees would view the fireworks from their vehicles.

    Three other events and several planned maintenance projects were slated to receive $0.

    Mayor Bryan Franklin said the reasoning behind funding some events a lot more than others was sound. In the draft budget, the bulk of the available funding was allocated toward events that have significant ahead-of-time costs, such as hiring, booking performers and publicity costs.

    “It’s not picking winners and losers,” he said. “It’s where does that start-up money come from? What organization does it need to go to early so they can lock in plans, and how can we keep it below our $29,000 [revenue projection]?”

    After the May 26 meeting, some council members suggested pulling $134,654 from the H-tax fund balance to fully fund the FY21 H-tax events as shown in the chart above. These amounts are proposed but will be voted on at the June 22 town council meeting at The Manor.

    Sutton Shaw, who owns the Big Red Barn Retreat and organizes the Summer Jam, was in attendance to lobby for her event.

    She touted the enthusiasm she witnessed among tourists at Myrtle Beach on a recent weekend as a sign of good news for tourism and events, but her comments on the realities of planning the Summer Jam cast doubt on the timing of this year’s event in light of COVID-19.

    “Some of us are planning now,” she said of event organizers. “Our summer jam originally happens in July. We are trying to move to September….”

    She didn’t make a specific request for funding, but rattled off a list of her own community contributions. She expressed disappointment in what she felt is council’s lack of appreciation for her efforts as reflected in the proposed reduced funding amount for her event.

    “Personally I’m donating all my time, and my family has donated 75 acres of the land for a new building and investing over $1.5 million to bring our newest program in that will launch in October,” she said, noting that these efforts are aided by profits her family’s business has realized during the pandemic.

    “My family owns 26 Sonic drive-ins, and we’re killing it in sales. We’ve been up 20 and 30 percent with Covid,” she said.

    Her comments reinforced a point made by Brock earlier in the meeting.

    “If we’re continuing to allocate money to events that can fund themselves, then we won’t have money to fund upstart and new events that can bring additional tourism into town,” he said before sharing some numbers about the Summer Jam.

    Last year, he said, the town contributed $12,000 to the event. The year before that it was in the $6,500 range. Those two years, the event turned a net profit of more than $26,000.

    “I don’t know how I could sit here and possibly vote to approve an event that should be sitting on $26,000 in the bank, and their expenditure last year was $28,000,” he said, arguing that town funds should be used only to help revenue-generating events to get established – not to support them perpetually.

    Councilman Sloan Griffin agreed with the idea of taking a step back to re-assess event funding as information – about the revenue, about the effects of the pandemic, about the likely status of events in real time – becomes more clear.

    “I agree at this budget session right here that we do need to take a pause,” Griffin said. “We could be in the same situation January next year.”

    When council convene on June 10, the H-tax funding packet had done an about-face, reflecting full funding for the events as shown in chart the chart above.

    With almost $500K in the H-tax fund balance, Town Administrator Brian Cook said some council members had suggested using some of that fund to fully fund the H-tax events.

    “We took $134,654 out of the H-tax fund balance and allocated it for that purpose,” Cook said. “It will be up to council as to how much they want to use to fund the events.”

    The next meeting will be open to the public to attend and will be the final vote on the fy2020-21 budget. It will be held at Manor at 7 p.m., Monday, June 22. Those attending are asked to wear masks and practice social distancing.

  • Mayor questions how A-Tax and H-Tax awards are spent

    BLYTHEWOOD – The focus of Town Council’s third and final budget workshop on Thursday, May 23, centered on expenditures from the accommodations and hospitality tax funds.

    In recent months, Mayor J. Michael Ross has warned event organizers that he expects those who are awarded funds from the Town to spend those awards on advertising that will actually bring out crowds of people.

    “I feel like a broken record,” he said at Thursday night’s meeting. “We want these events to be successful.”

    He was addressing the organizers of the Bravo Blythewood Spring Market which organizer Sue Pence said brought in about 400 visitors over three days. The town awarded Bravo $4,000 for the event.

    Of that $4,000, Pence said, the group spent $1,250 on digital billboards in Columbia and $400 in The County Chronicle and none in The Voice.

    “Spending $1,200 of your advertising dollars on billboards in Columbia was a chance. If I see that on the next request for funding, I’m not going to approve it. I’m going to turn you down. If you had $1,250 to spend on billboards, you had money to advertise in the local papers,” Ross said.

    “We sit here and talk about we want to support our local businesses, want to shop local and that’s what we promote here in our town,” Councilman Eddie Baughman said. “To shop local, we need to advertise local. We see time and time again where the money is spent elsewhere. I think our event organizers should spend their money locally also.”

    Ross suggested advertising to the local community and then using Facebook to share outside the community.

    Ross said on Thursday evening that an arts immersion class that Bravo Blythewood is requesting funds for in the fall does not qualify for accommodation tax funds. However, on Monday, May 28, Council voted unanimously to fund the class for $1,500 of the $2,500 Bravo requested.

    Bravo organizers also sought $4,000 for their annual Holiday Market, but said it will no longer be held in the town of Blythewood but at the Columbia Country Club.

    “We’ve already contracted with Columbia Country Club and had to put down a $500 deposit,” a representative of Bravo said from the audience.

    Criticizing the town’s signage restrictions, the representative said the location outside of town would make advertising the location much easier.

    But Ross balked at funding an event outside the town limits, saying it would not bring business into the town, which is the intended use of the accommodation and hospitality tax revenues.

    “You take a tremendous risk doing that when you don’t already have the funds approved [from the Town],” Ross said. “It’s a hard sell when you take [the event] out of the town of Blythewood.”