Elgin to scrutinize tourism group's funding

Funding for the Elgin Area Convention and Visitors Bureau will be under scrutiny as the city of Elgin begins to tackle next year's budget planning, officials said.

The bureau, which gets about $200,000 in city hotel/motel tax revenues, has an open-ended funding agreement unchanged for 25 years, according to information gathered by the Daily Herald.

That stands in contrast to the Downtown Neighborhood Association of Elgin and the Elgin Area Chamber of Commerce's economic development group, which get $120,000 and $275,000 respectively, from the city and whose contracts are approved yearly by the city council.

Mayor David Kaptain said he plans to ask the city council to determine the importance of all expenses, including funding for the bureau, at a special meeting in May.

"What I envision is setting up, out of the general fund, two revenue streams for core programs and noncore," he said. "There are a number of organizations that get money from the city that we look at as things that are noncore. The convention and visitors bureau certainly could be part of that. "

The bureau hasn't been asked to provide regular email updates and yearly presentations to the city council, but that might soon change, Kaptain said. "There certainly could be better communication," he said, adding he didn't know the city's agreement with the bureau was that old.

City Manager Sean Stegall, who serves as secretary for the bureau, said he regularly reviews the bureau's finances. Its executive director, Kim Bless, gave public presentations until a couple of years ago, when the city council decided to cut back on presentations as a whole, he said.

Bless said she would "absolutely" be willing to give email and in-person updates.

Cuts to tourism funding would result in the loss of jobs and tax revenues, she said, citing a study released this week by the Illinois Council of Convention & Visitors Bureaus. "Tourism brings real dollars to the area," she said.

However, data on the economic impact of tourism is available by county, not for the Elgin area specifically, Bless acknowledged.

Determining the city's return on investment will be key, Kaptain said. "There has been the question for a long time of, 'Is there overlap between (the bureau), and the chamber and DNA? How do they work together and what are we getting out of it?'"

Elgin's hotel/motel tax revenues increased from about $461,000 in 2014 to $490,000 in 2015, city officials said.

The tax was established to fund tourism, but home-rule communities such as Elgin can use the money for any public purpose, Stegall said.

The city disburses about half those taxes to the bureau and the Hemmens Cultural Center in equal amounts, and, in small part, the cultural arts commission, documents show. The bureau also got some of the city's share of casino proceeds until about 2008, city officials said.

Bless pointed out hotel/motel taxes typically come from visitors, not residents. "We are not a burden on the city or the residents of the city, or any of the communities we represent," she said.

The bureau employs two people, Bless - at a $122,000 yearly salary - and a director of marketing, and focuses on promoting local attractions, such as Grand Victoria Casino, and bringing in sports tournaments attended by thousands who use local hotels, Bless said.

The bureau also organizes the "Bites and Bikes on the Fox" event in Elgin and launched the first Fox Valley Restaurant Week this year.

Its 2015-16 budget, which totals about $400,000, includes $175,000 in state grant money and a $52,000 end-of-year surplus, according to figures provided by Bless. Expenses include $15,000 for the visitors' guide and $151,000 to bring overnight leisure travel via digital advertising, search engine marketing, social media efforts and attendance of trade shows, she said.

The bureau represents nine communities but gets funding only from Elgin, which has nine hotels, and West Dundee, which has two hotels and contributes $7,500, Bless said. It also represents Bartlett, Carpentersville, East Dundee, Gilberts, Hampshire, Sleepy Hollow and South Elgin, which have no hotels, she said.

"Is Elgin paying the tab for marketing these other communities?" Kaptain said. "Maybe it should be called the Elgin Convention & Visitors Bureau."

The state grant, which requires matching funds, takes into account the communities represented by bureau, Bless said.