HomeMy WebLinkAbout2004.0113.TCWSM.MinutesTOWN OF FOUNTAIN HILLS
MINUTES OF THE WORK-STUDY SESSION OF THE
FOUNTAIN HILLS TOWN COUNCIL
JANUARY 13, 2004
Mayor Wally Nichols convened the work-study session at 6 p.m.
ROLL CALL — Present for the roll call were the following members of the Fountain Hills Town Council: Mayor
Wally Nichols; Vice Mayor Rick Melendez; Councilmembers Michael Archambault, Susan Ralphe, and Leesa
Stevens. Councilman John Kavanagh was absent.
ALSO PRESENT: Andrew McGuire, Town Attorney; Frank Ferrara, Fountain Hills Chamber of Commerce;
Roxanne Boryczki, Mark McDermott, and Vladimir Hulpach, Tourism Bureau; and Bev Bender, Town Clerk.
Mayor Wally Nichols called the meeting to order at approximately 6 p.m. and announced that Town Manager Tim
Pickering would be absent from the meeting due to illness.
Mayor Nichols explained that the subject of the meeting was to discuss the future direction of tourism within Fountain
Hills, particularly with the Fountain Hills Chamber of Commerce. He introduced Frank Ferrara, Executive Director of
the Fountain Hills Chamber of Commerce.
Mr. Ferrara introduced Roxanne Boryczki, President of the Board of Directors for the Chamber of Commerce and a
member of the Advisory Committee for the Tourism Bureau; Vladimir Hulpach, Chairman of the Tourism Bureau; and
Mark McDermott, Chamber of Commerce Consultant for Tourism Matters. Mr. McDermott served as the State
Director of the Office of Tourism for the past seven years.
Mr. Ferrara opened with the history of the Chamber, clarifying the different tourism functions in the community. He
-xplained that the Chamber had always utilized a Tourism Committee, albeit sometimes small and lightly funded. For
many years the Town funded the Chamber of Commerce to do it's advertising, but that advertising arrangement ceased
to exist in 2001 when funds became tight. At that time there was a grant from the Office of Tourism called the "Team
Grant" that required matching funds. In 2001 Ms. Boryczki, Tourism Committee Chair, developed a tourism group that
was larger in size (12-13) and was comprised of individuals interested in tourism in the Town, i.e., lodging, golf, and
bed & breakfast. Under the auspices of the Chamber of Commerce, the group pursued the grant. Since there were at
that time no matching funds, $37,500 was added to the Chamber budget for that purpose, which was approved under
Mayor Sharon Morgan. The grant was successful, and $37,500 was provided to the Tourism Committee, renamed the
Tourism Council. The provision of the grant meant that the funds were Town -controlled funds, earmarked for tourism
aspects.
In the ensuing year (2002), Proposition 202 provided some possible funding, not only from the Town treasury but also
from the Ft. McDowell Yavapai Tribe. The Tourism Council applied for the 202 Prop funding, and that funding came
through the Town on an IGA (intergovernmental agreement) between the Tribe and the Town. Both 202 and the
"Team Grant" funding required a municipality, which is why the Town became involved in the business of tourism. He
continued that the Chamber of Commerce was the only organization in town that had, (and would continue to) promote
the Town of Fountain Hills, through Chamber ads, festivals, etc.
Mr. Ferrara indicated that it became apparent to the Board of Directors of the Chamber that there was competing work
- a Chamber Committee called "Public Relations", and a Tourism Council standing committee called "Public
Relations". The Chamber felt that it should be brought back under the Chamber of Commerce Board of Directors, and
he (Mr. Ferrara) was given the authority to hire a tourism consultant out of the Chamber funds (not tourism funds) and
to provide office space and supplies needed for that consultant. This consultant was Mark McDermott who was
charged with the task of consulting with the Chamber on all tourism matters, and the Board of Directors of the
Chamber would have the last say on tourism matters. The Tourism Bureau would still be a division of the Chamber of
Commerce, managed by a 17-member advisory board, which constituted every avenue of business, leisure, sports,
including Fort McDowell. He noted that the Fort and the Tourism Bureau were an officially recognized entity of the
Chamber of Commerce, and through a resolution passed by the Council, that Tourism Bureau was then recognized as
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the spokesperson for the Town of Fountain Hills. Mr. Ferrara noted that the responsibility of the Chamber was then to
assure that the Tourism Bureau was successful and that all involved had the same purpose and goal - to promote the
well being of the Town and the tourism industry.
Mr. Ferrara advised the Council that the Chamber had contributed to the past two art fairs by placing advertising
inserts in the Phoenix Magazine and Scottsdale Tribune. The Chamber also developed a brochure on tourism that was
developed with a temporary telephone clearinghouse. Ms. Boryczki had originally fielded the telephone calls, which
were now being taken by Chamber representatives.
Mark McDermott followed Mr. Ferrara. He explained that he had been retained for the past three months as a paid
consultant to the Tourism Bureau and had played a significant role in formulating the structure of the organization. He
noted that he had been the Director of the Arizona Office of Tourism, hired by Governor Symington, carrying over to
the Hull administration from 1996 through 2002. He informed the Council that he was a resident of the Town of
Fountain Hills and that he had originally been involved on a volunteer basis with the Tourism Council. He noted that
his primary concern was that the economic formula for the Town of Fountain Hills was tied to the success of the
tourism or visitation components. He noted that Arizona's economy was tourism based, and many people were not
happy about that. He agreed that it might need to change to a certain degree, increasing higher -level jobs and
recruitment. He also noted, however, that the economy of the state was still tourism -dependent, a $30 billion total
economic income on direct spending of $12 billion. He also noted that visitor spending generated $1 billion to the
general fund revenues. He proposed that Fountain Hills had been enjoying a lesser degree of these funds due to the
potential of product development that it currently had to fund the needs of the Town. He understood that tourism
seemed frivolous when dealing with fire, land, and water issues, but he appealed the Council to continue the discussion
as to how bringing outside dollars into the community could assist and how it was consistently proven that by spending
money for marketing, return on investment could be exponentially increased by 3% to 12%, depending upon the
effectiveness of the marketing. He asked for open-mindedness as to the importance of the industry of tourism to the
community, as well as seizing the opportunity to get the name of Fountain Hills and Ft. McDowell into an awareness
campaign in the entire regional market. He added that with a 2.6% sales tax, for every $1 million spent in the Town,
$26,000 would be generated in tax revenue. He asked if each day trip visitor spent $50, how many would be needed to
spend $1 million? 20,000 visitors would generate $26,000 in incremental spending, and 20,000 visitors was not a tall 140
order considering the volume base of the marketplace in terms of people already traveling into the metropolitan area.
Mr. McDermott informed the Council that in overnight trips alone, 10 million leisure visitors traveled into the Valley
with an average stay of four nights. There were an additional 10 million visitors traveling into the Valley on day trips
from 50 miles or more away, and they were spending money on entertainment, meals, recreation, and shopping.
Fountain Hills as a destination had outdoor recreation, nature and adventure, golf, arts & crafts, and retail orientations,
and was soon to be more resort oriented with the facility of CopperWynd. He added that all of the basic elements as to
why people came to Arizona were in Fountain Hills, but the Town was not taking advantage of the opportunity and
adequately promoting it. Mr. McDermott closed by indicating that the Town needed to make a commitment to tourism
and include it formally in its economic development planning, both from the standpoint of promotion and product
development.
Councilwoman Nicola asked Mr. McDermott how, other than in dollars, he felt that the Town and Chamber committee
could best "partner" to most effectively use the money and resources already on hand. Mr. McDermott responded that
the key would be by "working together", approaching tourism as an important and critical segment of economic
development. He added that he did not see the Town poised to recruit industry or knowledge -based business, but
recreation facilities development, attractions development, and supporting development of new tourism resorts needed
to be increased. He added that as the Town moved forward with the plans for development of the downtown corridor,
relating to the Fountain Park, the Town should think in terms of what would make the community a "draw", a place
people wanted to visit. He believed that the Chamber was anxious to work with the Town in a planning project such as
tourism, not just about money, but about having a product, which could be melted together into the kind of product
currently generating traffic and seen as a true tourism destination, overnight destination. He advised that the area was a
strong daytrip destination with great potential for being an overnight destination. He suggested that the Town needed
to keep people here longer and spending more money. He stated the opinion that the amenities that came with tourism
would enhance the quality of life for the residents of the Town. The residents could then have more to enjoy than if it
weren't for the patronage of outsiders that helped to make those businesses successful. An example would be a movie
theatre. The Town had not been able to recruit a movie theatre because there was not enough potential traffic to make
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that theatre successful. He suggested that any attractions such as good museums and other entertainment venues
depended upon a good balance of local and non-residential travel in order to make it successful.
Councilwoman Stevens asked how Mr. McDermott would respond to residents who believed that the Town was at
,,,,east two years away from having a good product that would bring in tourism, and that the Town should postpone
spending the big dollars until that time. Mr. McDermott responded that people should not be penny-wise and pound-
foolish in the sense that the Town actually did have good product, although it had not yet come together in the
downtown corridor. The Town still had a great outdoor recreation product, a number one attraction in the state. Scenic
vistas and related outdoor recreation was the number one reason people came to Arizona. The Town has excellent
scenic vistas, outdoor recreation at McDowell Mountain Park and at the tribal lands, fantastic golf, arts & crafts, arts &
culture, and the River of Time Museum, which had now been raised to a certified museum status. He added that the
Town needed to package the product and sell it through organized tours, generating traffic now and having the town's
reputation expounded upon by visitors.
Vice Mayor Melendez observed that Mr. McDermott did not mention the fountain in his list of amenities, and he
indicated that when people came to see the fountain, they stayed only a few minutes and returned to their destination.
Vice Mayor Melendez added that visits to the fountain needed to become shopping experiences in order to obtain the
revenue of the dollars. He also mentioned the proposed performance pad that could bring weekly concerts, as well as
the Children's and Community Theatre where 5,000 to 6,000 Scottsdale and Mesa residents visited. Mr. McDermott
agreed that there were far more attractions available than he initially stated, that they just needed to be packaged and
promoted.
Councilwoman Ralphe indicated that she was happy to see that the number one attraction in Arizona was "outdoor
scenic vistas". She pointed out that in a couple of years, an extensive north/south trail would come through the vicinity
of Four Peaks, segments of which were already built. Secondly, she noted that McDowell Mountain Preserve trails
would also be a big draw.
Councilman Archambault asked how to track dollars spent from tourism. Mr. McDermott responded that primary
search had to be completed, or State research needed to be tapped. The State employed an independent research firm
(awbased in Washington, D.C. that specialized in tourism and travel research on a Nielsen -type panel survey process. On
an annual, monthly, year-round basis they surveyed 40,000 households per month to determine where people were
going, what they were doing, the size of their travel party, and how much they were spending. Through this broad -
scale marketing, the researchers distributed to the states how many estimated overnight travelers they had had and
where they came from. For more money, the research could be extrapolated down into metropolitan area activity from
those overall state figures. Additionally, he noted that research could be done on a local basis, i.e., overall occupancy
of local hotels, average rate of hotel and related revenues generated, measuring tax revenues in the tourism sections,
and via a formula called the TEIM (Tourism Economic Impact Model), a formula where they calculated what percent
of spending occurred in the restaurant and the retail sectors as directly related to overnight traveler spending versus
resident spending. He indicated that this information could be obtained from the State Tourism Office.
Councilman Archambault asked if the breakdown on Page 3 of the Tourism Impact Study was traditional. Mr.
McDermott responded in the affirmative and added that tracking hotel activity was a primary way of measuring
tourism activity; however, with so few accommodations in Fountain Hills and so much traffic in and out, they were not
getting a good picture.
Roxanne Boryczki addressed the Council and explained the usage of dollars earmarked for tourism, how they were
invested, and the response received. She noted that in the first two years, the majority of the "Team Grant" money was
spent for ads in different publications from which leads were received; brochures were then sent to those leads that
were interested in coming to Fountain Hills. Also a public relations campaign to generate media publicity was done,
and this year a number of ads were placed through the "Team Grant" through Golf Magazine, Midwest Living, the
Arizona Office of Tourism, Journeys (State Official Visitors Guide), and Scottsdale Destination Guide. Coop programs
were investigated, ads were placed with the Scottsdale Convention and Visitors Bureau, Internet marketing was used,
�nd the Chamber website was updated to include visitor section. Since October, she noted that over 2000 leads had
Wteen received from ads placed. In the past two years, 5800 leads had been received and followed up on. A Fountain
Hills Visitors Guide was planned for the end of the year, an in depth publication noting activities, places to stay, golf
courses, restaurants, attractions such as the theatre and the museum, and trails.
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Ms. Boryczki displayed ads placed for Fountain Hills. A book of news articles had been generated on Fountain Hills
from local and national publications, from the Business Journal to Arizona Business Magazine, Scottsdale Republic,
Tribune, and information on different businesses in town. She indicated that in February a spread in Phoenix Magazine
would discuss the value of the arts within the community. Lifescapes Magazine (33,000 households in California)
would also print an editorial on Fountain Hills in February. The bed tax revenues generated at the end of the year
should show the rise in sales, as well as the restaurants and retailers. She indicated her wish to promote a unified
product to show people what Fountain Hills had to offer and why they should be here.
Vice Mayor Melendez asked how much marketing had been done in the northwest, Oregon and Washington. Ms.
Boryczki responded that the Arizona Vacation Guide went into those markets, an insert from the Office of Tourism.
Mayor Nichols noted that in Ms. Boryczki's presentation materials, it was indicated that a representative of the Ft.
McDowell Yavapai Nation would be on the Bureau; however, no mention of Ft. McDowell had been mentioned in the
ad. Ms. Boryczki responded that the ads in question were pdor to the association with Ft. McDowell, but photographs
and mention had since been made regarding Ft. McDowell Adventures. She displayed a copy of the newly approved
logo that would go into publication materials and ads as they are developed in the future.
Mr. Ferrara emphasized that the insert and story coming up would be at no cost to the Tourism Bureau funding; no
money had been spent on those two items. "Partnering" on a corporate sponsorship basis with Phoenix Magazine had
been used alternatively, a method which could continue to be used in the future for some large organizations. Ms.
Boryczki added that the reason the publications were possible was due to the work of the Tourism Bureau.
Mr. Ferrara also mentioned that due to the press clippings, Tom Peterson at Image By Nature had provided to Wheel of
Fortune representative the requested photos from the Chamber for the show
Mr. Ferrara then introduced Vladimir Hulpach, the Chairman for the Tourism Bureau and a Director with the Chamber
of Commerce. Mr. Hulpach addressed the Council and reviewed the new logo and branding statement approved that
morning. He advised the Council that he had contacted the coach operators who used to service the fountain area, and *40
he was hoping to have them return. He also noted that Ft. McDowell had a regular member on the Tourism Bureau,
and he invited people to attend Bureau meetings.
Mr. Hulpach noted that his task was to crunch numbers, and that the Bureau understood that everyone was interested in
the financial benefits of the assessment. He agreed that the benefits were somewhat difficult to assess, using the
information Mr. McDermott provided, or a three-tier benefit as reported in the study. He noted that they were able to
assess the category of direct benefits, currently assessed at $450,000, a number composed of the bed tax ($90,000),
sales tax on lodging only ($80,000), and a sales tax on golf revenues ($190,000), with the remainder from an estimated
tax on a portion of retail and food & beverage tax. He explained that indirect benefits were benefits such as real estate
and other non -traceable spending. He noted a third category of induced benefits, not necessarily tangible, such as
image and quality of life or primary or secondary employment categories. The $450,000 figure (base for further
expansion) was based on 1.6% sales tax, prior to the increase.
Responding to Councilman Archambault's question regarding tracing tourism dollars, he indicated that that if room
revenues were 30% of the entire revenues, direct spending of tourists would be a minimum of $10 million, as room
revenues are set at $3.3 million.
Mr. Hulpach noted that the Bureau had been optimistic in their outlook, and assumptions for these figures were based
on the assumption that the CopperWynd expansion took place, the Fountain Hills Resort materialized, and that the
downtown was completed as a consistent and attractive core.
Conversely, the current budget of $115,500 was composed of $50,500 from the Town of Fountain Hills, $50,000 from
the Ft. McDowell Yavapai Nation through the grant under the 202 funds earmarked for tourism, and $15,000 allotted
from the "Team Program" through the Arizona Office of Tourism (dollar for dollar match for advertising). He
indicated that some funds (not directly allocated) were not shown in the budget such as the consultant fees and
administrative support.
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Mr. Hulpach outlined the Bureau's income proposals, assuming future funding through a perpetual funding method:
1. Currently there was a 3% bed tax, which represented approximately $90,000 in assessments. The Tourism
Bureau proposed that they be awarded 1 % of the bed tax (approximately $33,000 to $34,000) in dedicated
funds for tourism promotion.
2. Since the Chamber had presented their stance on the package of new taxes to be considered by the Council,
i.e., their support on a property rental tax, the Bureau would like to designate 0.4% ($20,000 to $25,000) of the
rental taxes for tourism promotion.
3. The Bureau's third proposal was that they be awarded .25% of the food/beverage tax, which could conceivably
create $40,000 in revenues.
Mr. Hulpach closed by indicating that the Tourism Bureau felt that these taxes would create a sufficient base to
continue their work with assurance of a positive future for Fountain Hills.
Mr. Ferrara indicated that the Chamber really needed stabilized funding and that they needed to be certain they had
certain percentages available for tourism (not including operating expenses). He reiterated that none of the tourism
funds were used for operating expenses. Mr. Ferrara also noted that the Chamber Board of Directors had agreed with
the tax increases (advertising, rental, and food & beverage), not just the Advisory Board. These funds would then
come to the Chamber in the form of stabilized funding. He continued that it would be to the benefit of all involved if
their proposal could be accepted. The Bureau was considering a very strong intergovernmental agreement between the
Town of Fountain Hills and the Chamber that would establish performance standards and ensure that the funds were
used properly. If approved, these funds would strictly be used for the benefit of tourism in the way of ads, etc., not for
salaries or other operating expenses.
Vice Mayor Melendez left the meeting at 7 p.m.
Councilwoman Stevens asked for clarification of the second category. Mr. Ferrara responded that the second category
was the second portion of the rental tax, explaining that the Council was studying the possibility of eliminating
exemptions for rental properties. He indicated that the Chamber did not agree with it in the context in which it was
,-laced, because he believed they were talking about the 2.6% sales tax. The Bureau was asking that the Town to level
the playing field and increase that to 3%. He further indicated that a precedent had been set as the lodging industry
already paid 3% and the bed & breakfast industry already paid 3%. He noted that the Bureau was discussing the
additional funds, not taking the 2.6% from the Town, but the .4%, such as what was done when the Chamber supported
the sales tax increase for the mountains. He indicated that it was basically the same type, but a different way. Instead
of mountains, they were asking for .4% to come back to the Tourism Bureau in the form of stabilized funding. Mr.
Ferrara added that they were already providing the 1 % of the bed tax, so they were not asking for an increase there.
The new request was the .4% on the food & beverage.
Mayor Nichols asked for a point of clarification, indicating that since the Chamber was not an intergovernmental
agency, he didn't believe they should be discussing an IGA. Mr. Ferrara disagreed with that statement, indicating that
the precedence had been set. Mr. McDermott indicated that they were arguing semantics. Town Attorney McGuire
confirmed that an intergovernmental agreement was not required. Mayor Nichols noted the need for a memorandum
of understanding, and Mr. Ferrara and Mr. McGuire agreed. Mayor Nichols asked Mr. Ferrara what tax was common
in the Valley for food & beverage. Mr. Hulpach responded that no study had been done in that regard, but that
Fountain Hills would not be the only community.
Councilwoman Stevens indicated that it all would come down to the money issue, and they would have a roomful of
residents asking that taxes not be raised. She asked who at the Chamber voted upon the two new aforementioned
categories, and Mr. Ferrara indicated that all tourism matters were under the Board of Directors of the Fountain Hills
Chamber of Commerce. He added that the beverage tax was discussed at the Tourism Bureau Advisory Committee to
obtain their opinion. She then asked how the regular chamber members were allowed to voice their opinions on how
the Board should vote. Mr. Ferrara responded that feedback was done through telephone calls, and that the Board of
Directors had been elected by the Chamber members to make appropriate decisions for them.
Mr. Ferrara explained that, in theory, the Chamber was against raising taxes, but that sometimes it was necessary for
the total good of the community. These three proposals had been discussed at a special meeting of the Chamber Board
of Directors in terms of good for the total community, understanding that the Town's businesses would be paying an
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advertising tax. He noted that the Chamber spends approximately $40,000 to $50,000 per year in advertising for the
arts fairs, and at this time the Town had not been able to recoup the taxes from those expenses.
Mr. Ferrara continued that the Chamber Board did not agree with the memberships and liquor taxes, feeling that they
were too extreme.
Councilman Archambault asked Mr. Ferrara to explain his statement about "leveling the playing field". Mr. Ferrara
responded that individuals renting property on a short-term basis were not paying the rental tax, yet if those individuals
were to stay at a hotel or bed & breakfast, they would have to pay the 3% tax. Because the lodging community was
paying the tax, the Chamber believed the rental community should also be paying his fair share of the tax. Councilman
Archambault asked if that tax would apply to Quail Run for multi -units or the apartments located across from Safeway.
Mr. Ferrara responded that all rentals then would need to pay the tax, and if there were an exemption that was going to
be removed, the Tourism Bureau would like to tag onto that tax. Councilman Archambault asked if long-term residents
would then have to pay the rental tax if their complex were larger than three units. Mr. Ferrara indicated that he did not
know the exact way the law stated it, but anyone who had a short-term rental should be involved in the taxation.
Mayor Nichols indicated that the proposal to be considered was to eliminate the exemption on rentals as long as the
individual who owned the rental has three or more units in Arizona. One or two -unit rentals would still be exempt from
paying the 2.6%, and he understood the Chamber's proposal that instead of being 2.6%, the tax be raised to 3%, and
everyone should pay it (no exemptions for one or two -unit rentals). Mr. Hulpach then explained that the Chamber
Board did not wish to include the individuals with one or two -unit rentals, Those individuals should remain exempt.
Councilwoman Nicola asked Attorney McGuire if that the number was based on was a State Statute, and Attorney
McGuire agreed that all taxes were uniform throughout. He noted, however, that the decision to be made at the next
Council meeting was only whether or not to remove the exemption.
Ms. Boryczki indicated that in many other communities, short-term rentals (30 days or less) were taxed at the same
rate as the sales tax and bed tax. If it was over 30 days, they had a step-down structure. The Scottsdale tax is 11.67%
under 30 days, then 1.7% after 30 days. Attorney McGuire indicated that they needed to see how those were defined
and to make sure that they had that ability under the models selected.
Mayor Nichols reiterated that the Council had not considered that what they were proposing was exactly what
everyone else was discussing. He then stated that if they were limited to a 30-day rental or lower, it would reduce the
estimated funding of $26,000. Mayor Nichols then asked if the Bureau was proposing to raise the bed tax rate from 3%
to 4% in order to hit budget numbers. Mr. Hulpach reiterated that it was not the desire of the members of the tourism
community, the Chamber, or the Tourism Bureau to increase the bed tax level beyond the 3%.
Mayor Nichols asked what the bed tax rates were in Maricopa County for comparison purposes. Mr. Hulpach noted
that the highest bed taxes were in Eloy at 4%. However, if the bed tax were accrued with the sales tax in Fountain
Hills, then Fountain Hills would have the highest checkout rates in the state (with the exception of the Navajo
reservation).
Mr. McDermott discussed Proposition 302, the initiative that added a 1 % increase to the State sales tax on hotels in
order to provide for the new stadium for the Cardinals in Glendale. This tax increase was agreed to by the tourism
industry with the condition that a portion of that tax revenue would go into tourism funding. It was determined that
because that tax was a county tax, then approximately $5.5 million would go back to the individual communities
proportionately. Fountain Hills' share was approximately $10,000, and by agreement with Scottsdale, that money went
to them for broader regional promotion of Scottsdale and surrounding areas. However, it was money that could be
coming to Fountain Hills. One of the provisions in the regulations that governed Proposition 302 distribution to
tourism communities was that a tourism bureau must exists with a minimum base funding of at least $100,000. One of
the reasons Fountain Hills had not applied for those funds in the past was due to the $100,000 base funding. Although
this year the Tourism Bureau had a 50150 match with the tribe, Mr. McDermott expressed the opinion that the Town
should not rely on tribal funding to ensure that Fountain Hills' share of Prop 302 funds was brought back into Fountain
Hills. As Fountain Hills creates new lodging establishments as planned, those bed tax revenues would become more
significant, and the additional 1 % would be more as well.
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Councilwoman Ralphe asked if it was correct that there was a Tourism Council budget of a little over $100,000 and
that the Chamber Tourism Bureau was proposing to receive $100,000 from the Town. Mr. Hulpach responded in the
affirmative. Councilwoman Ralphe then asked what monies were coming from the Ft. McDowell Nation. She then
w:expressed that businesses were the primary beneficiaries of tourism and asked whether or not local businesses (other
ntities besides the Town) were funding tourism. Mr. Hulpach noted that the $100,000 was the budget for the current
fiscal year, which was composed of the $50,500 from the Town and $50,000 from the Ft. McDowell nation. $15,000
came from the matching fund and some additional funds that the Chamber was putting into the tourism market which
were not reflected prior to hiring the consultant. He noted that the Chamber wished to establish a permanent funding
mechanism, and that they would still apply for 202 funding. Ms. Boryczki addressed the second part of
Councilwoman Ralphe's question and indicated that the businesses in town were contributing through Chamber dues.
A Chamber plan was going forward to grow the membership and investigate the dues structure for funding the housing
of tourism employees if they were added in the future. She explained that this was why the Tourism Bureau wanted to
work "under" the Chamber — in an effort not to compete with the Chamber. The businesses would also contribute in
the form of paying the additional taxes that were imposed.
Mr. McDermott noted that additional support was given to the tourism programs by businesses, i.e., the transportation
and meals for the tour operators would be donated by the business community. In the future, the business community
would also donate accommodations. The Chamber's "in -kind" contribution of office space and equipment were also
donated for housing the administrative offices of the Bureau as it stands at this time. The Tourism Bureau would be
going out to the business community and asking for their support in terms of advertising for publications in order to
produce the Visitor's Guide.
Mr. Ferrara also noted that the organizational structure was represented by a wide distribution of business owners, not
only accommodations and golf. He reiterated that they were not asking for Town treasury funds, only the 1 % bed tax
that had been approved, the .025% of rentals, and the food and beverage tax.
Councilwoman Stevens stated the opinion that she would like the Bureau to find funds from people who did not come
to Council meetings and then beg the Council not to levy the taxes. She suggested that an untapped source was
"developers", i.e., MCO. She then asked Mr. Ferrara what percentage of the Chamber budget was spent on tourism. He
estimated approximately $100,000, but added that they continuously ran in the red; "no shows" at fairs and festivals
kept the Chamber in the black via a non-refundable deposit. The debt was therefore being retired very quickly, which
would free up funds for other things.
Mayor Nichols thanked Frank Ferrara, Roxanne Boryczki, Mark McDermott, and Vladimir Hulpach for attending the
work-study and responding to questions posed by the Council.
Councilman Stevens MOVED to adjourn the meeting. The motion was (SECONDED by Councilman Archambault
and PASSED unanimously. The meeting was adjourned at 7:30 p.m. /
TOWN N AIN
i
By:
W. J. Ni oIs. Alavor
ATTEST AND
PREPARED BY:
Bevelyn J. B ' d , Town Clerk
CERTIFICATION:
I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Work -Study Meeting held
by the Town Council of Fountain Hills on the 13"' day of January 2004. 1 further certify that the meeting was duly
called and that a quorum was present.
DATED this 5th day of February 2004.
By: n
Bevelyn J. B der, town Clerk
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