Isle Of Palms Delays Vote On Near $1M Tourism Budget

By Brian Sherman for The Island Eye News

The Isle of Palms City Council has voted to postpone a vote on the budget presented by the Charleston Area Convention & Visitors Bureau following a discussion concerning the role of the Accommodations Tax Advisory Committee and criticism of the CVB from ATAX Committee Chair Ray Burns.

The Council is required to approve a budget provided by its destination marketing organization – which has been the CVB for more than two decades – each year. During fiscal year 2023, which started July 1, IOP is expected to send approximately $900,000 generated by the state’s 2% tax on short-term rentals to the CVB. At their monthly meeting June 28, Council members chose not to approve the CVB’s budget after Burns said the organization was “the big elephant in the room and nobody’s willing to deal with it except for the ATAX Committee.” Burns was explaining to Council members why he went along with a plan at a recent meeting of the committee to give the newly-formed Isle of Palms Chamber of Commerce $10,000 in ATAX money from what is known as the 65% fund. “I voted for it because I see the CVB as a real problem,” Burns said. “Our only alternative in getting an alternate nonprofit DMO was the Chamber of Commerce at this point in time. I felt it gives them the opportunity to get started and get the ball moving in the right direction. A year from now, they might be in a position to prove that they have the wherewithal to do tourism promotion.”

The Chamber’s first application for ATAX funds – $10,000 to establish its website – was tabled by the ATAX Committee. Burns said the Committee learned that the CVB was paying to develop the Chamber’s website, and a revised application later requested the same amount of money to instead develop social media content. “We didn’t understand that whole relationship and how our $10,000 was to fit in that whole thing. We’re already paying the CVB hundreds of thousands of dollars, and now they’re funding the Chamber’s website development,” he said. “We just felt like we needed more information.” ATAX funds are generated by the 2% tax charged by the state on short-term rentals. After the state takes a small amount to distribute to government entities that have little or no tourism-related income, the municipality where it is collected gets to keep $25,000 plus 5%. The remainder is split into two pots: The city must spend the 65% pot on projects and services related to tourism, while the 30% pot must be directed to a nonprofit organization and spent on attracting overnight visitors. Council Member John Bogosian suggested that the $10,000 be taken from the 30% pot so the city would have additional money to spend on its own tourism-related projects and services. City Administrator Desiree Fragoso said the Chamber might be eligible for 30% money but not until the Council designated the Chamber as a DMO. She said the $10,000 application was associated with the $50,000 the city budgets every year out of the 65% pot “for programs and sponsorships.” 

Council Member Rusty Streetman, who headed the ATAX Task Force, which was created to study the city’s options for its accommodations tax money, wasn’t sure the Chamber was ready to become a DMO. “It’s clear the Chamber of Commerce someday aspires to be a DMO,” Streetman said.

“They are nowhere near that level yet. There’s still a lot of work to be done to sort of prove themselves. I think someday, based on their goals and aspirations, they may be very eligible for part of the 30% that we give to an eligible DMO.” The Council voted by an 8-1 margin to approve the ATAX Committee’s recommendation to give the Chamber $10,000 out of the 65% pot, with Council Member Blair Hahn voting no, “because the CVB is already providing them $25,000 to develop their website presence and their additional request for $10,000 from us I thought was duplicative. I didn’t feel comfortable providing that money.” Hahn added that he later talked with Chamber Treasurer Sandy Stone “and he gave me more information about how the $10,000 is to be spent, which helped justify their application for the money.” While Council members approved the ATAX money for the Chamber, they weren’t as satisfied with the CVB’s proposed budget.

Bogosian asked if the ATAX Committee had reviewed and approved the plan. “I don’t have any idea whether they are in favor of this budget. Do they have concerns on it? I would look to them to vet the budget,” Bogosian said. Mayor Phillip Pounds pointed out that the ATAX Committee is not required to approve the CVB’s budget but only review it, which he said they did. 

“What’s the purpose of a review without some type of recommendation after the review,” Bogosian countered. 

“They could all think it stinks. I have no idea whether that’s the case or not, so how do I vote on this?” Council Member Jimmy Ward suggested that a decision on the CVB budget be postponed until the Council’s July meeting, after the ATAX Committee offers its insight. “I would like to see their recommendations, how they feel about it. I value their opinion. And I would like to have a representative from the CVB come in and explain in more detail,” Ward commented. The vote to postpone voting on the CVB’s budget until July 26 passed 8-0. Streetman chose not to vote because was appointed by the Council to serve on the CVB’s board of governors for the current year. At the June 28 meeting, the Council also approved the Personnel Committee’s recommendation to appoint two new members to the ATAX Advisory Committee.

 Rebecca Kovalich’s term will run through Dec. 31, 2023, while Gloria Clarke will serve until the end of this year. The Committee is now back to its full complement of seven members, after five people resigned from March through June

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