Business owners and town leaders from Highlands, Franklin and Nantahala have been mulling over a way to allocate the county’s lodging tax— a 3 percent levy collected on all overnight stays at hotels, motels and vacation rentals that is used to promote the county’s travel and tourism.
County officials learned in July its method of distributing the lodging tax did not abide by state law, which prompted officials to form a nine-member tax study committee to devise a new plan.
Currently all occupancy tax fees collected from accommodation businesses in the Franklin and Nantahala are distributed to Franklin’s Chamber of Commerce. All revenue generated in Highlands is allocated to the Highlands Chamber of Commerce. However, this system is no longer valid since both organizations are private entities whose budgets are not of public record.
County officials are now required to set up a method to provide some check and balances to make sure taxpayers’ money is not being misspent.
Currently the money is given to both chambers, who use the revenue to promote tourism. In Highlands, a visitor center is funded from the money, along with two part-time visitor center positions. Franklin’s chamber uses the money to award grants for various travel-related organizations. The money is also used to operate a visitor center and funds two part-time visitor center positions.
The money is distributed based on where it is collected. Last year Franklin got $141,653, Highlands got $243,039, and in Nantahala $19,628 was raised. All money generated from Nantahala accommodations has been set in a reserve fund until a plan is formulated and approved by commissioners.
Committee members have decided to nix the idea of forming a county-wide tourism development authority, saying the money should stay on a local level. Instead task force members are recommending that each of the three areas form a tourism development committee to manage and allocate the money.
This method will allow each to receive the tax generated, said Franklin Alderman Mike Grubermann. He proposed that each chamber of commerce continue to be in control of the tax expenditures, which can be used for the promotion of tourism and travel.
The plan is for each area — Franklin, Highlands, and Nantahala — to develop a tourism development committee. Grubermann says each TDC must establish a contract with the county. He says the contract can specify the uses of the tax money.
For instance, the county could specify that a certain percentage can only go toward the operation of a visitor center. Also, each committee will be responsible for providing county officials with an audit, a yearly budget and its advertising and marketing plans. The committees will also report to the board of commissioners on a quarterly basis.
Each committee will be comprised of seven members: a town board member, a county commissioner, a chamber of commerce member, a tourist retail shop owner, a restaurant owner, and two representatives from lodging businesses. Also, each committee will have its chamber of commerce executive director. The executive director will sit on the board and only vote in the case of a tie.
Establishing a TDC will not be a problem for Franklin, said Linda Harbuck, executive director of Franklin’s chamber. The chamber currently has a TDC committee comprised of nine to 12 members including a town board member, a county commissioner, and area accommodation and retail businesses owners.
Under the new plan, Highlands and Nantahala must create a TDC. Bob Kieltyka, executive director of Highlands Chamber of Commerce, says forming a TDC will not be a problem. He says chamber members were considering the possibility of establishing a marketing board that would oversee the organization’s advertising and promotions.
However, the Nantahala area might have a different reaction to this plan. Ron Baker, owner of Nantahala Mountain Resort, was absent from the Feb. 6 meeting. At previous meetings Baker said area businesses are interested in forming a chamber of commerce; however, it is uncertain if Nantahala will be able to establish a TDC.
Since Nantahala is a community, its does not have a town board nor a representative from the area on the board of commissioners. Task force members plan to seek legal advice from County Attorney Lesley Moxley regarding the formation of the TDC.
Additionally, committee members are looking at reducing the county’s administrative fee for collecting the lodging tax. The county collects a 15 percent fee from the lodging tax. Committee members say this percentage is too high and should be lowered to 5 percent.
“I think we understood in discussions that the fee would be rolled back,” Grubermann said