Daily Sitka Sentinel

New Visitor Contract Proves Thorny Issue

By SHANNON HAUGLAND
Sentinel Staff Writer
    The Assembly on Tuesday directed the city administrator to negotiate with the Sitka Chamber of Commerce on a month-to-month contract to continue to provide visitor services for the city.
    The 6-0 vote followed an hour-long executive session about renewal of the contract.
    The Assembly meeting was suspended at 10:30 p.m., with four items left on the table, and was to resume at 6 p.m. today at Harrigan Centennial Hall.   

Visitor Services
    For the past three years, the Chamber and its subsidiary Visit Sitka have provided visitor services, including promotion and marketing. It was funded with a percentage of the income from the city’s bed tax. The three-year contract expired June 30, and the next contract is in negotiations.
    The Chamber submitted the only response to the city’s RFP for a three-year contract.
    Assembly members agreed that there are still issues to be worked out with the new contract, and more time is needed to accomplish this.
    “There are some things that need to be hammered out,” Assembly member Kevin Knox said. “That’s not unreasonable.”
    Aaron Bean said no one is arguing to cut back on visitor promotion, or saying that marketing Sitka is “not super-important.”
    “We’re making sure the money is being spent to the best ability it could be,” he said.
    About a dozen advocates for the visitor industry spoke about the work the Chamber and Visit Sitka have accomplished over the past three years, and voiced support for the Chamber continuing its work under a new contract. They said a month-to-month extension would not allow the organization to plan for the longer term, and would put Visit Sitka into a place of “uncertainty” for the year ahead.
    “Let them do the work they’ve continued to do well,” said Andrew Thoms, director of the Sitka Conservation Society.
    A few asked why a new contract wasn’t negotiated by the time the last one expired on June 30.
    “It doesn’t add up to me why we would get to this point,” said business owner Alana Peterson.
    Assembly members said there are still points to work out, and asked for patience.
    Ben Miyasato was disappointed the discussion had taken on an “us versus them” tone.
    “We do want a good contract, we don’t want to rush it,” he said. “Give a little patience so a better contract will be negotiated.”
    City staff submitted a contract proposal to the Assembly for the last meeting that set the contract at $300,000, which is about 30 percent less than last year’s funding. Funding for the organization is based on a percentage of bed tax revenues. It also asked for more priority given to marketing for Centennial Hall and other convention facilities, more emphasis the shoulder and winter seasons, and quarterly meetings with city staff.
    Chamber director Rachel Roy said the Chamber and Visit Sitka have done their job well for the past three years. Since 2015 Sitka has had a 47 percent increase in visitors, a 22 percent increase in bed tax collections and 12 percent increase in sales tax revenue. She said the Chamber is using funding from the city to market Sitka, under a three-year strategic marketing plan, and is currently working on its next three-year strategic plan.
    Roy said that with the growth of bed tax revenues, the Visitor Enhancement Fund can “fully support our community’s efforts toward the enhancement of tourism and visitor-related activities with plenty remaining for the city to fund special tourism projects.”
    “The Chamber recognizes the temptation to scale back or reserve funds,” Roy said. “However we encourage at least the current funding formula or an increase to unlock the maximum potential of the travel industry for our businesses and for Sitka.”
    Mayor Matt Hunter said before the vote that there are “valid concerns we need to work out.”
    “Let’s fix it,” he said.
    Although the vote called for the negotiating group to report back in September, it may be done before then.
    “We need to do it right before we sign a long-term contract so let’s get it done,” Hunter said.
    The Assembly also appointed Steven Eisenbeisz to serve as an Assembly liaison in the negotiations process.

Property Tax/Bed Tax
    The meeting ended automatically at 10:30 p.m. when the Assembly failed to have the required six votes, or unanimous agreement, as required to extend the meeting to 11 p.m.
    The Assembly was in the midst of discussing the first of four tax-related proposals, and will pick up the debate at 6 p.m. tonight.
    Two ordinances call for the exemption of groceries and utilities from sales tax but only if voters approve an increase in the millage rate from 6 to 8 mills.
    Kevin Knox, who sponsored the ordinance with Bob Potrzuski, said he is trying to make Sitka’s tax structure more equitable, and less onerous for lower-income Sitkans.
    A few Assembly members commented on concerns they had on the exemption language or the plan in general, but the discussion stopped when time ran out.
    The other two items were co-sponsored by Knox and Hunter. They would remove the sales tax on lodging, and increase lodging tax to 14 percent.

Other Business
    In other business:
    – consultants on the Sitka Community Hospital RFP said site visits will begin today for the three companies that have submitted management proposals for the hospital: Sitka Jet Center, Quorum Health Resources and SEARHC. The proposers will have until July 27 to revise their offers, with presentations set for Aug. 13, and a town hall Aug. 20. In other hospital business, CEO Rob Allen reported that June was a busy month, with $3.4 million in the bank.

    The Assembly also:
    – approved a marijuana cultivation facility license and marijuana store renewal for Northern Lights Indoor Gardens at 1321 Sawmill Creek Road, Suites O and P, and a retail marijuana store license renewal for Weed Dudes at 1321 SMC, Suite J.
    - upheld its June 26 decision to deny a lease for boat equipment storage for Trident Seafoods at the Gary Paxton Industrial Park. Richard Wein cast the lone vote to rescind a previous vote to deny the lease. The GPIP board had recommended approval of the lease, and reaffirmed its support at a meeting since the Assembly turned it down. One of the objections the Assembly has raised is that the boat equipment storage proposed by Trident is not consistent with the goals of the park for economic development and job creation.
    - approved a 30-year rent-free lease to the Sitka Historical Society for the Sitka History Museum at Harrigan Centennial Hall. The Assembly also approved a 24-month agreement to waive utility fees and property tax for the organization. The museum asked for free use of the foyer, which was not granted. The vote was 4-2 on the lease, and unanimous on the 24-month agreement.
    – approved tariff schedule adjustments for the Gary Paxton Industrial Park dock.
    – approved extension of the agreement between the city and Seafood Producers Cooperative on use of the Marine Services Center.