Sonoma County cuts tourism bureau budget, shifts funds to emergency services

Sonoma County supervisors decided Tuesday to cut by about $1 million the amount of money they will send the local tourism marketing organization through taxes levied on overnight hotel stays, choosing instead to make more funds available for emergency responders who say they face a heavy burden from increased visitation to the region.

The cut, which won’t take effect until next fiscal year, applies to the share of hotel-bed tax revenue received by Sonoma County Tourism. Currently, the bureau receives a share of the funds equal to an estimated ?$3.1 million this year. The Board of Supervisors voted to lower that portion amid a broader debate about how to spend the bed taxes and offset the impacts of the county’s booming tourism sector.

Tourism bureau officials said the current funding level produced fruitful results, but Supervisor Shirlee Zane, the board chairwoman, said the organization could easily afford a reduction in bed tax revenue, pointing to a county review indicating Sonoma County exceeds similar California counties in the amount it spends on its tourism marketing organization.

Sonoma County Tourism has an annual budget of more than $8 million, most of which comes from a 2 percent assessment on room revenues of more than $350,0000 in the unincorporated areas and most of the county’s nine cities.

“I feel very strongly that the tourism bureau has an exceedingly rich, rich, rich budget,” Zane said at Tuesday’s meeting. “You’ve got a good job. But it’s time now for some accountability, and it’s time to spend that money where the real impacts are happening.”

Tim Zahner, the interim CEO of the tourism bureau, defended the level of funding his organization has historically received, crediting supervisors’ previous allocations with helping the county receive an explosive growth in hotel bed tax revenue over the past decade.

“Sonoma County’s investment in the hospitality economy is a unique, progressive approach to rural economic development that outpaces other California counties in results,” Zahner told the board. “Reductions in this investment will reduce yields in off-season and midweek visitation.”

Supervisor James Gore floated a proposal to lessen the funding cut to the tourism bureau over the next two years, worrying that the proposed reduction was perhaps too heavy a financial blow to land all at once. But he was unable to win support from Zane or Supervisor Lynda Hopkins, the two board members who developed and presented the bed-tax recommendations.

Under the new funding arrangement, approved unanimously by the four supervisors present, the county anticipates sending about $2.2 million in bed tax funds to the tourism bureau next fiscal year. The cut is expected to free up money that can be invested into improvements for fire and emergency services in the county - an issue the board plans to consider in more detail later this year. Supervisor Susan Gorin was absent Tuesday.

Under the contract, the tourism bureau is required to hire an independent financial auditor, with use of up to $50,000 of the bed tax revenue. The board also directed the tourism bureau to spend a total of $450,000 in the tax revenue over the next two years on securing a statewide regional conference as well as various programs around safety, environmental cleanup and other issues.

“No one is denying that, economically speaking, tourism is a good thing - it’s a huge driver to the west county and it’s a huge opportunity for rural economic development,” said Hopkins, whose district includes the lower Russian River and the Sonoma Coast. “(But) we have to recognize that there are really substantial impacts being borne by communities that, quite frankly, were never laid out in a way to accommodate this many visitors.”

Fred Peterson, a winery owner and longtime Geyserville volunteer firefighter, told supervisors the growth in visitation to his area over the years has strained emergency responders.

“To promote and encourage more visitors without adequately providing emergency services is both irresponsible, unconscionable and ultimately bad business,” Peterson said.

Supervisors also affirmed plans for how they want to spend the new revenue provided through Measure L, which raised the bed tax from 9 percent to 12 percent. The measure, promoted specifically as a way to address the impacts of tourism, was overwhelmingly approved by voters in November.

Most of the new money was previously earmarked by supervisors to fund roads, emergency services, regional parks and affordable housing.

Supervisors agreed to spend 8 percent of the new money, estimated at $385,000 this fiscal year, on code enforcement and compliance, much of which will cover two staff jobs in the auditor-controller-treasurer-tax collector’s office. Additionally, 10 percent of the additional tax revenue - an estimated $500,000 this fiscal year - will go toward a new “tourism impact fund” that will allocate money to each supervisor’s district based on how much bed-tax revenue the district generated in the previous year.

Residents of the Bodega Bay area, several of whom spoke at Tuesday’s meeting, are hopeful the new bed taxes can generate some much-needed improvements to their area, which is heavily impacted by tourists, particularly in the summer months when beach goers flock to the coastal village.

“Unincorporated areas like our tiny little town are generating high percentages of the tourism tax-based income for our county while (also) carrying most of the physical and monetary burdens resulting from this tax generation,” said Patty Ginochio, a Bodega Bay resident and business owner. “This increase in tourism has caused an impact to our community’s physical infrastructure, like our roads … We ask that you begin to address those concerns that we have as a tiny town.”