Bed Tax changes tabled after lengthy response from Bed Tax organizations

On Tuesday, February 13, Globe City Council received pushback from a packed house as members of Bed Tax organizations attended to speak out about proposed changes to the Bed Tax distribution outlined at a previous meeting.

The changes involve funding cuts to four of the five organizations to add the City’s First Friday event as an additional recipient. The proposal would bring the percentages down to 16.6% each.

The bed tax was established in the early 1990s to support organizations actively working to bring in more tourism to the City. The City of Globe collects a 3% tax added to hotel stays and distributes it in quarterly disbursements according to the splits the organizations agreed to as follows: Chamber and Southern Gila Economic Development Corporation, 22.5%; Cobre Valley Center for the Arts and Downtown Association 20%, and the Historical Society 15%

The organizations agreed upon the previous splits when the bed tax was established to reflect the varying impact each organization had in bringing tourism to the area. 

City Manager Paul Jepson said in recent years the City has been collecting between $230,000 and $250,000 annually via the bed tax. According to Melissa Steele, economic development specialist for the City of Globe, that amount is a 120% increase over FY2016/17 numbers. Steele cited the “hard work and effort” of the bed tax organizations and the City of Globe as reasons for the increased development activity.

“If we were to take all of us and work together moving forward, and collaborate and have a great partnership, can you imagine what those efforts would bring?” Steele said.

Mayor Gameros noted that the proposed changes were included in the City’s Strategic Action Plan last year and were discussed in subsequent budget meetings, prior to being on the agenda at Council’s January 23 meeting.

The response from the organizations on Tuesday voiced a unified objection and charges that the City did not properly engage the organizations in discussing changes to determine what the negative impacts might have on these organizations and to discuss alternative plans to be voted on by everyone.

Many people spoke on this issue in a Request To Speak: 

Linda Gross, Publisher of Globe Miami Times, said she recognized this council as one of the most progressive, noting the improvements they have made to infrastructure, parks, recreation, and elsewhere. She applauded the City’s efforts in growing First Fridays, but noted their proposal to increase funding to this event at the expense of the bed-tax organizations was counterproductive.

Outlining the numbers presented in the City’s proposed budget, she noted that the city is currently investing $80,000 into First Fridays and want to grow this by nearly $50,000 through additional Bed Tax funding, to bring the total budget to $126,000.

The City currently underwrites the full cost of First Fridays, paying for live bands and entertainment, providing vendor space for free, and offering up crowd-pleasing novelty features like EuroBungee, IceSkating, and AxeThrowing for free. She suggested, 

A more prudent approach would be to explore ways to make First Fridays financially sustainable without compromising the vital support these bed tax organizations offer throughout the year.

This point was also made by Debbie Yerkovich, whose comment was read into the record: 

“Mr. Mayor and Council. Find another way to augment the funding of First Friday without diverting key funds from anchor organizations that have been involved in our community for decades.  

As vendors at First Fridays, we love it that it’s free, that the special events such as ice skating, rock climbing, the snow globe, entertainment, is ALL free. Free for vendors &  free for visitors. However, free is not only not sustainable, but also not competitive for other organizations to put on events. Don’t vote on this tonight. Make sure that all 5 bed tax recipients are meeting together to collaborate on ANY bed tax adjustments.  

Speaking as a board member of the Globe Miami Chamber of Commerce, Mickie Nye provided the history of the bed tax program, 

“In the 1980s Ingo Radicke and Jim Valenzuela went to each of the Hotels/Motels and asked each to sign a letter of support implementing a new tax, the Bed Tax. Originally it was for the Globe Miami Regional Chamber of Commerce and Economic Development Corporation, one entity. The Council at the time approved and implemented this tax. Later down the road other community Nonprofits were included as a recipient to this bed tax.

Until this year, representatives for each of the five non-profits that have been receiving the bed tax money have met and agreed to the split of those funds. The city/city staff have never said this will be your split. But in the past the city has honored the agreements between them.”

Nye asked the City if First Friday was a non-profit like the five current Bed Tax recipients. 

According to Jepsen, 

 “First Friday program is part of the City of Globe, and doesn’t need to be a nonprofit organization because the bed tax funds actually belong to the City, and the City can legally collect a bed tax. Partnering with the nonprofits is an optional way to use the bed tax funds. The City is the funder, so it can keep the funds for its own use.”

Angel Ruiz, Executive Director of the Chamber, pointed out the importance of the Chamber’s central role as the visitor center for the area, community rallying point, and meeting/event venue for local organizations and governments.

Our Chamber of Commerce is many things to many people, she said. 

Being open six days a week, not only as the Chamber of Commerce. We are a visitor center for tourists and locals alike. People stop by to visit us whether it’s to ask for directions, use bathrooms, or Wi-Fi, want to know the cool stuff to do in the Globe Miami area like Besh ba Gowah, Cobre Valley Center for the Arts, hiking, where to eat, rock hunting or just where to stay for the night, we are the presence out there on Highway 60.

We promote and host key events for our communities, Arizona Poppy Fest month, the camaraderie annual dinner, the Apache Jii festival and the annual golf tournament. These are just a few of the key functions that the Chamber of Commerce does within the limited budget that we have to work with.

Phil Stewart, also a board member of the Chamber, said the Chamber could benefit the community by more funding, not less, citing the Chamber’s plan for a new electronic sign on Hwy 60, seen by 20,000 cars a day and used to inform people about local businesses, events and emergencies. 

He added that the Chamber, which functions with one full-time, and one part-time staff, would like to afford two full-time people, allowing their Director to get out in the community more and look into hosting other events. 

To sum up, we are asking the City Council to sit down with the five community-based organizations and discuss this redistribution so it can properly benefit all of us. Really what we are asking you to do is to help us help you make our community thrive and prosper.

Stacey Herrera Murry, the Chamber’s president and a local business owner, pointed out the Chamber’s integral role in creating the bed tax and serving the community. The Chamber was initially approached about launching a First Fridays, but did not have the staffing, nor could it afford the insurance such an event requires. However, they have assisted First Fridays, by providing staff to help set up and have been a huge supporter of the event, promoting it through the Chamber and to visitors who stop in. 

She addressed the 120% increase in bed tax revenue and partially attributed that to the city’s marketing efforts, but noted the work of all the organizations that contributed to greater revenues. 

Adding that,

“Inflation has caused much of the increase in the bed tax receipts, and all the bed tax organizations have seen their costs increase because of inflation,” 

Alexis Rivera, Town Manager of Miami, spoke as a member of the Chamber and someone who has volunteered with Apache Jii for 18 years. He pointed out the wide impact of the event and the need to spend money on marketing. He said the Chamber needs the support of the City of Globe to be successful.

Marcia Walish, spoke in support of the Cobre Valley Center for the Arts, saying that the CVCA has relied on volunteers for 38 years.

“They manage the upkeep of a large historic building and are open seven days a week, year-round. They depend on financial support from members, United Fund, the bed tax, and other local entities.”

Lorie Luipold, owner of Splash of Copper Gifts and a Chamber member, said she supports First Fridays but is concerned because, as a business owner, First Fridays does not benefit her shop or other businesses in the north end of Broad Street, as traffic isn’t directed there. She pointed out that the City also often doesn’t have a backup plan for inclement weather and has frequently canceled First Fridays.

She ended her remarks by saying,

It’s unjustifiable to redirect monies to an event that takes place only once a month and doesn’t benefit businesses across town, and take funds away from organizations that do benefit her business by supporting tourist traffic.

Jo Nell Brantley, a member of both the Downtown Association and CVCA, said the original purpose of the bed tax was to

“provide a steady source of funding for the nonprofits that were working with the City to promote tourism. The nonprofits agreed amongt themselves on the distribution and the hotels and city were happy with that. 

In the new budget, the Downtown Association would receive 16.6% of $250,00 which is $41,500 per year, and that amount will not even cover the cost of our employees. We still need to fund our other projects including events, the three historic buildings that we maintain and restore and keep open for the use of the public. Maintenance and restoration construction costs are just so high. 

For First Fridays to receive the same amount of bed tax money for one event that we receive for all our activities is very discouraging. And I’m even more discouraged when I see that their budget is $126,00, which is three times what we get for everything we do. 

Molly Cornwell, Director of the Downtown Association, said that they have been faithful to this city for almost 20 years. She pointed out that in addition to hosting multiple events year-round for the community and bringing in overnight guests, they have three historical brick-and-mortar buildings that require a good deal of maintenance. 

“It takes a lot of $5 jail tours to put in $30,000 doors, which are historically appropriate, or put a new roof on the baby depot (freight office). These are buildings we don’t own, but lease. We do it because it is good for the community. “

 

“I can tell you that the Downtown Association has repeatedly brought in news stations to cover our events and our work, including Channel 10, Chanel 12, Chanel 3 and 5. We’ve had several bloggers and travel writers and the International Ghosts Hunters. All of which continue to create stories and raise awareness of Globe and things to do here.

All to drive people to stay in our beds so that funds us more.

Reflecting on First Friday, she said,

“I count the number of porta johns at one First Friday event, and it is probably more than my annual budget for all my events! That hurts, as we must scrape to try to put on our events for the lowest amount of dollars. Not overspending. Just finding another way. “

She wrapped up her remarks by saying,

“You know maybe there are other ways (to address the bed tax). We have opinions, too, and would love to be part of this community. We don’t want to be pitted against each other 

Linda Gross, speaking as proprietor of CedarHill Housing and on behalf of Chrysocolla Inn, pointed out that the people staying at Chrysocolla or at her Airbnbs have not come from First Fridays.

“Our guests are staying overnight because of the paranormal events, Apache Jii and events like weddings etc being hosted at the Train Depot. Guests, when they are here on a First Friday, are charmed by the downtown activity. But they are equally charmed by our friendly merchants and historic nature of the downtown.”

City Council members were then asked for their remarks: 

Mike Pastor (District 2)

“This proposal was not a proposal for a decision…it was for us to look at how the bed tax operates and the benefit of each to the community…I don’t have a problem with sitting down with people…I don’t think equalizing the payment to everybody is unfair, but you’ll have to convince me that isn’t OK.” 

Jesse Leetham (District 3)

“I still have a lot of questions and think this shouldn’t have come to an agenda without being discussed with the Bed Tax organizations as a whole…We should sit down and have a round table discussion…Deciding this point would seem premature…Every organization does a great job, including our Economic Development Department. There are a lot of different avenues we can take that don’t include such a huge portion of anybody’s money…I feel we can get there if we all work together.”

Vice Mayor Mike Stapleton

“I moved here 12 years ago now and I always remember saying my personal model was Globe, you either get it or you don’t. And to me that is still true so I appreciate everything that we’re all doing…we have a common goal, so I too would love to sit down to go over everything together and not made a decision overnight”

Mariano Gonzalez (District 5)

He spoke first of his experience in emergency management, saying it taught him a lot about the resiliency of his community. He believes there may be deficiencies that require working together, adding that he doesn’t have a dog in this fight..he wants what is best for the City of Globe. 

“It’s important to me that we continue on this and that we work together not against (each other).”

Freddy Rios (District 1)

“I understand how important the bed tax monies are to you as an organization, but one thing that we as a mayor and Council and staff are responsible (for)…we have a Judiciary responsibility to manage the city taxes and how they are dispersed. What we are seeing is a pattern of growth. We have evidence that has proven for the past six years, the bed tax has grown year after year.”

Saying the City has seen an uptick in the bed tax and tax revenues, he noted the City has several multi-million dollar projects.

“This body is very progressive about creating a better Globe and I appreciate that you want to be a part of it…I feel like there’s a lot of commonality between all of you and your request to this body, and there’s deep concern. I get it, and think if we sit down, help us help you, I firmly agree that we can come together…Let’s really get down to what it takes to provide you what you need and also what you can do to provide the city (with what they need). “

Mayor Al Gameros

The Mayor wrapped up the session by noting that the Council decided to take control of Globe’s destiny in 2016/2017, deciding they did not want to rely on outside organizations to market and brand the city. Implementing their vision beginning in 2018, the Mayor noted it was important to include the city (in the Bed Tax) for their efforts, which he says increased not only the organizations but also the bed tax revenues by 120%. 

Globe is being recognized, he says, pointing to his recent speaking engagement at the International Economic Development Conference and interviews with magazines which have national exposure.

“More people are hearing about Globe because of a combined effort of all of us. We all need to take credit and stand shoulder-to-shoulder. He, too, noted the millions of dollars coming into the City for infrastructure, pointing out the City’s ongoing efforts to capitalize on this to make improvements. 

“I think there is a misconception about First Friday…it’s not just First Fridays; it’s our marketing efforts that have brought us to this point. Pointing out the total marketing efforts by everybody. “

Council agreed to table this issue “until such time that everybody can come to a consensus and what works together, before bringing it back to council for a decision.” Council asked the City manager to work with the organizations to arrange for further talks before proceeding on this issue. 

The members of the Globe City Council include Mayor Al Gameros, Vice Mayor Mike Stapleton (District 4), and Council members Freddy Rios (District 1), Mike Pastor (District 2), Jesse Leetham (District 3), Mariano Gonzalez (District 5), and Fernando Shipley (District 6). All members were in attendance at Tuesday’s meeting except Councilman Shipley.

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