Let’s “pull back the curtain”….wonder what we will find???
As we told you in our article, Port Authority and Visitors Bureau…Joined by a Coastal Manager and the ORC, there is a particular circumstance that bothers us a bit since we believe the Commissioners are “working around” the Ohio Revised Code relative to the allocation of Lodging Taxes. The Visitors Bureau is a 501(c)6 MEMBERSHIP Non-Profit and the Port Authority is a governmental body and a product of the Ohio Revised Code.
The Coastal Manager is a port authority employee reporting directly to Mark Rantala, Executive Director of the Port Authority. As a Port Authority employee, the Coastal Manager receives all the benefits of a Lake County government employee, including OPERS. However, the Port Authority does not have enough revenue to fund this position (probably because they are wasting $300,000 on The Better Flip Project) so they ask for money from the Visitors Bureau. LFC has confirmed that the Visitors Bureau has been paying the salary and pension of the Coastal Manager since 2014 (bed tax 1% fund expenditures 2014 – 2018).
Based on our reading of the applicable ORC section governing the allocation of lodging taxes, at no time shall lodging tax funds be used to pay for operating expenses of a port authority, unless said port authority is operating a military-use facility. A port authority may be reimbursed for expenses incurred in connection with a coastal improvement project via cooperative agreement under ORC Section 307.678 Tourism Development Facility or Project Cooperative Agreements. We do not believe the Lake County Coastal Plan qualifies as a project as defined in this section of the ORC.
We told you in our article, Open Meetings Act…the Public Has a Right to Know, Commissioner Cirino booted LFC member, Brian Massie, out of an “off the record” meeting that was held on February 19 with Lake County Visitors Bureau staff; President of the Visitors Bureau Board, Amy Sabath; Executive Director of the Visitors Bureau, Scott Dockus; and Commissioners Cirino and Hamercheck (2 Out of 3 Ain’t Bad…Quorum or Meatloaf song?…it’s so confusing). [Note to Commissioner (Blank), please do not think that we have forgotten that incident….]
We understand the discussion was to involve a presentation of 2018 accomplishments and a request for approval for funding their 2019 tourism projects out of the Tourism Reserve Fund (the 1% lodging tax fund held by the Commissioners). So, the meeting was also a budget hearing, and the public has a right to know how the Visitors Bureau plans to spend those public funds.
During our investigation leading up to the meeting, we learned that the Visitors Bureau board did not want to continue to fund the Coastal Manager’s salary and pension so we are assuming that was also to be part of the discussion. We can understand that mindset since we understand that the salary of the Coastal Manager for the Port Authority is more than the salary of Mr. Dockus, Executive Director of the Visitors Bureau. We also understand that Mr. Dockus and his staff do not receive a pension, and it just doesn’t seem fair that the Visitors Bureau is footing the bill for the pension of the Coastal Manager.
We sent off a records request to the Commissioners relative to that “off the record meeting,” as we told you in our article, Visitors Bureau and Commissioners…Holding a Public Meeting in Private. The Commissioners are still trying to argue that the meeting was not a public meeting. We will have to agree to disagree…for now…at some point we are quite sure someone will get to the bottom of it. Anyway, they produced the emails between the Visitors Bureau and members of County government relative to the meeting (2018-2019 EMAILS OFF THE RECORD MEETING).
They also produced a draft Agreement between the parties (the County Commissioners and the Visitors Bureau) under the signatures of Jason Boyd, County Administrator, and Scott Dockus, Executive Director of the Visitors Bureau (2019 DRAFT AGREEMENT BETWEEN VB AND COMMISSIONERS BED TAX FUNDS).
(LFC Comments: Although it is in the ORC, it amazes us how each governmental body gets their percentage of any funds they get their hands on even for a second (administrative costs dontcha know). The expression “possession is nine-tenths of the law” must have started with a governmental body. They always have to “dip their beak”!
We believe that Commissioner Cirino, as President of the Lake County Board of Commissioners, should sign the final Agreement on behalf of the Commissioners and Amy Sabath, as President of the Lake County Visitors Bureau Board, should sign on behalf of the Visitor Bureau; but we are not surprised they made their employees sign off.)
The current balance of the 1% Tourism Reserve Fund is ~$444,894.12. The Port Authority did make a request again for support for 2019 though Port Authority letter to VB re Coastal Manager (2019 request for funding from port authority). And as you can see from the draft Agreement, the Coastal Manager is being funded in the amount of $75,000 for 2019 (LFC Comment: Again we believe the ORC does not allow the Visitors Bureau to fund Port Authority operating expenses.)
You’ll also note from the draft Agreement that the parties have agreed to fund additional new roofs at the fairgrounds out of that $444,894.12 as well (it was $480K so we need to make another records request). And, beginning with the March 2019 lodging tax payments, all 3% of the lodging tax funds to be used for visitors bureau expenses under the ORC will be passed through directly to the Visitors Bureau with no oversight. At least it’s not spelled out at all in this draft Agreement. In fact, there is no mention of the word OVERSIGHT anywhere in this one-page document. Don’t worry, we’ll get the fully executed version.
As we mentioned above, the Visitors Bureau is a non-profit, but at this point they are TOTALLY funded by public money. The Visitors Bureau is a 501(c)6 MEMBERSHIP nonprofit and has had NO MEMBERS for at least 2.5 to 3 years. They are operating as a 501(c)6 membership non-profit without paid members. The 5-member board does not meet the test under the IRS rules for 501(c)6 membership nonprofits because members must contribute MEANINGFUL FINANCIAL SUPPORT to the organization.
During our investigation into the non-profit status of the Lake County Visitors Bureau, we discovered that their corporate status had been cancelled and was reinstated in 2017 by the Ohio Secretary of State (Reinstatement 2017). Remember…to have your corporate status cancelled by the Ohio SOS you’ve had to fail to file appropriate forms or pay taxes for 3 years. We made a records request of the Visitors Bureau and received a copy of their Form 990 for 2017 (2017 Visitors Bureau Form 990), which shows clearly they are operating as a 501(c)6 Membership Non-Profit. So in 2017 their corporate status is being reinstated with the Ohio SOS as a 501(c)6 membership non-profit, and for the year 2017 they filed a Form 990 with the IRS stating that they are a 501(c)6 membership non-profit and…they…have…NO…paid…members.
Okay, so the Commissioners propose to give all 3% of the lodging tax funds to the Visitors Bureau with no oversight that we can see. Given what we’ve just told you about the situation with their non-member 501(c)6 Membership Non-Profit, what could possibly go wrong? Anyone? Bueller? Are the Commissioners insane? We are getting behind this proposed legislation H.B. 176 (Proposed legislation VB hb176_00_IN). TWO THUMBS WAY, WAY UP on that one. We’d like to see the Lake County Visitors Bureau meetings be opened to public scrutiny for heaven’s sake!
Frankly, we believe any protective veil allowing the Lake County Visitors Bureau to keep their meetings and Minutes private has been pierced already since they have no paid members. We are still awaiting answers to questions we posed based on our review of the financial records they produced. They were so cooperative before the secret meeting. When inquiring about our unanswered questions recently, we were told in writing by Ms. Sabath that there is no specific time-frame spelled out in the ORC as to when the Visitors Bureau is required to produce/answer those questions. (READ: “We’ll produce that information when we are good and darn ready peasant!”)
Ahem…Ms. Sabath…the public has a right to know. At this point, the tax payer is the only one funding your very existence. And pay no attention to those slick politicians who like to try to convince you that no one in Lake County is paying those lodging taxes…that’s fodder for the sheep. Sure, some lodging taxes are paid by transient guests. But in reality, a lot of the lodging taxes are paid by the likes of Lubrizol, Steris, Avery Dennison, Lake Health System, and other large companies in Lake County.
As an aside, when doing a bit of research on some of the largest employers in Lake County, we ran across this interesting tidbit…this Crain’s Employers List PDF is from 2007. Well what do we have here…note the second largest employer…why it’s none other than…LAKE COUNTY GOVERNMENT. We wonder what the ranking is today? The school districts are placing pretty high up there in this list of largest employers as well. Right up there with the likes of Lubrizol and Steris. We wonder if they have the same ranking today even though enrollment has been steadily declining.
Out of sheer morbid curiosity, we are going to have to hunt down that information. And you wonder why your property taxes are so high. The largest employer pays NO PROPERTY TAXES……Pffffttt! Well, that and The Better Flop Project.