The board of the Greater Oak Harbor Chamber of Commerce unanimously voted not to accept $25,000 in lodging taxes awarded by the Island County commissioners last month because, they claim, the process may have been contrary to law.
“There is significant risk to the chamber if this taxpayer funded award is challenged and then deemed invalid,” Chamber President Jason McFadyen wrote in an email to the county commissioners.
“We feel the entire process was undermined by politics and/or some other rationale that has not been explained to us.”
There’s still a chance that the chamber will get the money. Island County Prosecutor Greg Banks has asked the state Attorney General’s Office for an opinion on the law regarding the distribution of the taxes, which are collected at hotels, camping sites and other lodging venues.
“If we get confirmation in writing that what the commissioners did was legal, then we will gladly accept the funds to market Whidbey Island,” McFadyen wrote in an email to the Whidbey News-Times.
The controversy over the distribution of the so-called “2 percent funds,” which are supposed to be used to boost tourism and have historically been a major source of funding for chambers, was a result of the commissioners and the volunteer Lodging Tax Advisory Committee disagreeing about how much the Oak Harbor chamber should receive.
The quarrel has been unusually personal. Two of the commissioners suggested that Oak Harbor chamber officials were being greedy and unwilling to share.
On the flip side, Oak Harbor attorney Chris Skinner wrote a letter accusing the commissioners of “playing petty politics” and added that Commissioner Jill Johnson “turned the public discussion into a grade school level analysis” in her comments about the matter.
There’s an open legal question as to whether the law, which was amended in 2013, allows the county commissioners to change the award amounts recommended by the advisory committee.
The law states that the county or city leaders “may choose only recipients from the list of candidates and recommended amounts provided by the local lodging tax advisory committee.”
The Municipal Research Center, the city of Oak Harbor and the chamber interpret that to mean that the officials can only award amounts recommended by the advisory committee and can’t change the amounts.
The prosecutor, however, interpreted it differently.
“The county reads the word ‘only’ as modifying the word ‘recipients’ but not the phrase ‘the recommended amounts,’” Banks wrote in a letter to the Attorney General.
The controversy arose after the county’s Lodging Tax Advisory Committee recommended that the Oak Harbor chamber receive $31,000 for its visitors center, plus $2,581 to underwrite an ice-skating event next winter.
The commissioners sent the recommendation back to the committee, requesting that they cut the amount for the chamber and increase the amount to the the PBY-Naval Air Museum in Oak Harbor; they noted that the city also awarded the chamber $167,000 in lodging taxes.
The committee elected to keep the recommended amount the same.
Last year, the chamber received $30,000 from the county. Commissioner Rick Hannold said the chamber’s average allocation over the last six years was only $20,000.
The commissioners weren’t happy. Commissioners Hannold and Jill Johnson criticized the chamber for being unwilling to share the funds; Commissioner Helen Price Johnson asked what the chamber does to justify the amount.
The commissioners were unwilling to approve the entire $31,000 award, so it appeared likely that the chamber’s funding would be cut altogether — except the money for the ice skating rink.
The prosecutor’s office advised the commissioners that they were free to change the amounts, so the commissioners awarded the chamber $25,000.
The chamber board consulted with legal counsel and declined the award because the commissioners “lacked the statutory authority to make such an allocation,” McFadyen wrote in an email obtained through a public records request.
Johnson emailed McFad-yen back, saying the chamber board jumped the gun and should wait until the attorney general gives an opinion.
Johnson noted that Hannold offered to meet with the chamber board and explain the facts but that the chamber declined the offer.
“I’m not sure why this keeps escalating, but I would encourage you to rescind this email and simply avoid billing against the grant until we have heard back from the state,” Johnson wrote.
“Once we have that answer we can consider the next steps, but I would advise against taking funding off the table at this stage. It seems premature.”