Letters written in 2006 by City Attorney Park Medearis to former city councilor and Tahlequah Area Tourism Council board member Jack Spears suggest money from a hotel-motel tax could be disbursed through an agent other than the Chamber of Commerce, without voter approval.
In the TATC’s 14-year existence, some board members have occasionally clashed with members of the Tahlequah Area Chamber of Commerce over control of funds generated through a 1987 municipal election. The chamber established the TATC in 2000 “to distribute funds from the Tahlequah Hotel/Motel Tax for encouraging, promoting, and fostering tourism development in the city of Tahlequah in accordance with the contract between the chamber and the city of Tahlequah.”
In the original resolution organizing the tourism board, the chamber gave the Tourism Council the responsibility of “disbursing funds.” Chamber members approved the resolution and called for the tourism board to develop its own bylaws.
But in June 2006, less than a year after David Moore was hired as executive director, chamber board members approved a new resolution requiring the Tourism Council to “request to the chamber” the allocation of money for tourism-related expenses. The 2006 measure also created a tourism director position, which was to fall under the control of the chamber’s executive director.
That same year, Spears and fellow Tourism Council board member Dick DeGeorge began to question the relationship between the TATC and chamber operations.
The city’s original hotel-motel tax ordinance had identified the chamber as the agent to receive funds through a contract with the city. DeGeorge, then a local businessman, and Spears, who in 2006 was Tahlequah’s Ward 2 city councilor, eventually pushed to have the city funnel hotel-motel tax funds directly to the tourism board, rather than to the chamber.
Spears asked City Attorney Park Medearis to weigh in, and chamber officials sought an opinion from the state’s attorney general, Drew Edmondson.
“One question was whether or not tourism funds could be spent for the chamber. That’s part of where the problem was,” Spears said this week. “We felt like tourism funds were being expended for the chamber, and that it was illegal.”
Medearis addressed Spears’ concerns in a series of letters he wrote in early 2006. In the first, dated Feb. 8, 2006, Medearis suggested “anything rationally related to tourism development in the city of Tahlequah would qualify for expenditure” of the hotel-motel tax.
The following month, Medearis tackled more questions specifically related to the use of hotel-motel tax collections. By creating the TATC, the Chamber of Commerce would need to spend additional money to “sustain the activities of the Tourism Council,” Medearis wrote.
“It is my opinion that any expenses created by the Tourism Council’s existence [that] would be over and above the expenses of the Tahlequah Area Chamber of Commerce without the Tourism Council would be proper for consideration,” Medearis wrote.
In keeping with city ordinance, the expenses would have to be used specifically for tourism development, Medearis said.
At the time, a TATC budget set aside money to help pay the salary of the chamber’s executive director, according to Spears.
“All we knew was the fact that they put out a budget, and that paying 30 percent of David’s salary was on the tourism budget,” said Spears.
Randy Gibson, Moore’s predecessor, had an annual salary of $30,000, and no insurance or retirement benefits. At the time of Moore’s abrupt resignation in early June, he was reportedly making around $46,000, and had a benefits package.
Medearis mentioned the Tourism Council’s 2006 budget item in a letter to Spears dated in March of that year.
According to Medearis, the TATC’s budget earmarked money to pay 50 percent of monthly utilities, telephone bills, copier expenses and property taxes associated with use of the chamber facility. It also called for the Tourism Council to pay 100 percent of “repairs and maintenance.”
“Another example would be attributing 30 percent of the Chamber of Commerce director’s salary and taxes to the Tourism Council,” said Medearis. “It is noted that the Chamber of Commerce would have a salary for a director, whether the Tourism Council existed or not.”
In one letter to Spears, Medearis said he believed the hotel-motel tax ordinance allows the city council to make “administrative and technical changes or additions” by enacting another ordinance. One possible change could be to select a receiving “agent” for the tax, other than the chamber. He also cited examples of reasons why officials might elect to allocate the money through a separate body.
“Examples of where this power might be appropriately exercised would be malfeasance or misfeasance on the part of the Chamber of Commerce or if the Chamber of Commerce ceased to exist or filed for bankruptcy,” Medearis wrote. “It appears that the original intent of the enactment of the ordinance was to have the Chamber of Commerce be the contracting party unless and until circumstances arose which the city of Tahlequah, in its discretion, determined that another contracting party would be appropriate.”
“Malfeasance” is described as wrongdoing by a public official, while “misfeasance” is described as the wrongful performance of a normally lawful act.
Spears believes the chamber was trying to “take over” the Tourism Council and reduce it to “nothing more than an advisory board” in 2006.
“The main reason is because of the money,” said Spears. “If you can take total control of the Tourism Council, you’ve got that money you can channel into the chamber.”
In July 2006, members of the Tourism Council and chamber took their argument before the city council. DeGeorge asked the city to contract with the Tourism Council, rather than the chamber, as its agent for the hotel-motel tax. He suggested some of the requests for expenditures made to the Tourism Council might have been “illegal.”
Others – including current Ward 4 City Councilor Linda Spyres, who was then the chamber’s vice president for tourism development and thus on the tourism board – suggested the entire tourism group did not agree with DeGeorge.
“It’s not the Tourism Council’s plan, it’s Dick DeGeorge’s plan,” Spyres said during the city council meeting. “I think that’s illegal.”
Others suggested DeGeorge’s proposal would run counter to the wishes of voters.
Councilors opted to await a ruling from Edmondson. His conclusion, released in September 2006, suggested the 1987 ordinance could be amended by the city council to use a different tax agent without a vote of the people, so long as the rate of the tax and its purpose are unchanged; and as long as the council’s action is based “on articulable standards and is not arbitrary.”
In November 2006, the city declined to contract with the Tourism Council and opted to again disburse the tax money to the chamber. That document, signed by former Mayor Ken Purdy and former chamber President Ann Wilkins, is the last contract on record between the city and chamber. It was set to self-renew annually.
City councilors recently decided to re-negotiate the contract with the chamber.