WASHINGTON — A city committee that regulates the use of tax revenue from Washington’s hotel and motel sector had its funding cut this fiscal year: About $17,000 was transferred from its budget account to the city’s general fund.
Committee members said they were not informed of the change until their regular meeting on June 24.
But Washington Mayor Millie Youngquist – who also chairs the hotel and motel tax committee – said neither she nor other council members had been informed of the changes, which were finalized in a municipal budget passed in April.
Youngquist said the adjustment was likely included in the budget by former City Manager Deanna McCusker, who resigned earlier this year for personal reasons.
“I think I can speak for everyone when I say we don’t necessarily review every single item,” she said. “We are usually informed of changes, but this was not communicated to us.”
City Attorney Kevin Olson said the money transfer was legal, citing state and local laws that simply require at least 50 percent of hotel and motel tax revenue to be spent on promoting tourism. In Washington, these initiatives are overseen by a board made up of two city officials, two chamber representatives and three members of the public.
However, this may have violated a City Council resolution passed in 2017 when the city’s hotel and motel tax was introduced, which stated that all funds from the tax would be deposited into an account and spent “only upon the recommendation of the Fund Management Committee.”
“That was the intention, but you can’t really force another council to do that,” Olson said. “That was starting in 2017 … that’s what the council wanted back then, and I assume that’s what they did with this fund up until this year.”
Still, committee members said they already have plans for the expected money. The $17,000 amount represents a significant portion of the fund’s tax revenue, which totaled $80,000 last year, committee members said. That means the transfer, while legal, could create a deficit that could force the fund to delay future projects or cut back on initiatives already planned.
Michelle Redlinger, director of the Washington Chamber of Commerce, who also sits on the committee, said plans for a tourism promotion position at the chamber, funded by the organization and city money, may have to be scrapped or delayed. Also potentially at risk are repairs to downtown Christmas lights, a grant to Main Street Washington for rebranding efforts and a videographer to film and produce promotional materials for downtown.
Committee members said they had already committed to some of these projects but may have to back out of agreements where the money has not yet changed hands if the money is not available to them.
“I’m here to ask the Hotel/Motel Committee to give us those funds back,” committee member Charla Howard said at an Aug. 6 council meeting. “We’re not in the city’s general fund for a reason. Those funds are for a completely different purpose… I still feel like we’re not getting any answers.”
Because McCusker is no longer in office, officials said they could not be sure why the money was moved to the general fund or why council and committee members were not informed beforehand.
Joe Gaa, the new city manager, said his predecessor may have been trying to bolster the budget slashed by state-mandated tax cuts. He said he wanted to avoid future communication problems with the committee.
“I can promise you that there will be no surprises in the future from cuts that we have not discussed,” he said. “We will pass on the bad news.”
Council members said they could not promise they would have enough money to return money to the hotel/motel committee. But officials said they hoped to do so if they had money left at the end of this fiscal year.
Kelsey Brown, the city’s finance director, said this is quite likely, but not certain.
“We’ve exceeded our general fund projections every year so far, so it’s unlikely we won’t be able to do that,” she said. “But on paper, it’s balanced the budget.”
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