Tourism Dollars Shift To Debt Service

The city of Watertown will spend a majority of its tourism fund to pay debt service it owes for capital improvements.
The City Council agreed at a Tuesday night budget work session to use $100,000 of that fund for projects that will allow the rise in the 2009-10 tax levy to be trimmed to $306,762, or a 4.3 percent increase from the current budget. The tourism funds will, in effect, replace general fund money that would have been used for debt service.
The city's tourism fund can be used for a limited number of items because it is supplied by county bed tax. The county imposes a 3 percent tax on the occupancy of hotel and motel rooms; only municipalities that have businesses that contribute to the tax get a share of the revenue. Use of the bed tax distribution is restricted by county law.
"I think the statute states it can be used on tourism or convention-related development," County Attorney David J. Paulsen said.
The attorney agreed the statute has a broad interpretation, which allows the municipalities to use the funds in a number of ways.
"The idea is to promote tourism in the community," City Manager Mary M. Corriveau said. "One way to do that is destination marketing. But you need to have destinations that people want to visit."
The city will spend almost $379,000 on debt for capital projects in the 2009-10 budget that are tourism-related, Mrs. Corriveau said.
Those projects include reconstructing portions of the sewer and roads at Thompson Park, improvements to the Alex T. Duffy Fairgrounds municipal arena and installing amenities in parks along the Black River.
Mrs. Corriveau said Thompson Park, the fairgrounds and the Black River parks are the three largest sources of tourism-related capital debt in the city.
Municipalities that receive bed tax funds largely use the revenue for advertisements and publicity, County Administrator Robert F. Hagemann III said, although he said the uses are not restricted to that alone.
"The reason for it being broad-based is it allows flexibility for the locality to make a determination at that particular year and time," Mr. Hagemann said. "Using it for promotion isn't always the case."
The city reduced a proposed 7.9 percent levy increase to 4.3 percent using the tourism fund and by increasing fees and fines to create about $141,000 in additional revenues.
Lawmakers have not made any widespread cuts to programs or services during budget deliberations. City Comptroller James E. Mills warned the council Tuesday night about buying down the levy using a restricted revenue stream.
"I just want you to know that this is a one-shot revenue for this year," he said.
The city will hold a public hearing on the budget at 7:30 p.m. Monday at City Hall, 245 Washington St.