CVB- Stricter budget limits for tourism are workable

After spending $2.27 million over the past seven years to attract visitors to Cape Girardeau, city tourism officials say they can live with last week's out-of-court settlement that puts limits on their budget's growth.

The Convention and Visitors Bureau has a track record that proves it can pay its own way, said John Mehner, president of the Cape Girardeau Chamber of Commerce, which operates the CVB under a contract with the city.

Under an agreement between the city council and Cape Girardeau businessman Jim Drury, the CVB's $440,000 budget can grow no more than 3 percent annually unless motel and restaurant tax revenue -- which funds the bureau -- increases by 7 percent or more in a single year.

Even in booming times, the CVB budget can't grow by more than 10 percent in a single year, the agreement states.

Within those restrictions, tourism work can still grow, Mehner said, because of continued support by residents. That will come despite a new sunset clause limiting the life of city hotel and restaurant taxes.

The agreement has a provision to automatically terminate the taxes -- possibly as early as 2015 -- once the city has the money to pay off $8.9 million in bonds for the city's share of funding for the Southeast Missouri State University's River Campus arts school.

Mehner said the sunset clause shouldn't hurt the CVB because he believes the city and chamber can make the case to voters to extend the taxes.

"The more people we can get to come here and spend money the better off we are," he said.

The CVB, Mehner said, can show it's paid for itself, boosting the local economy and generating tax revenue for the city.

CVB director Chuck Martin's case in point is a baseball tournament last May. The CVB spent $2,000 to help sponsor the tournament, which drew 46 teams whose players and fans spent an estimated $138,000 on meals and lodging.

Mehner said the CVB won't take all the credit for tourism. The university, motel and restaurant industries and other businesses all help draw tourists.

Southeast Missouri State University economist Dr. Bruce Domazlicky said it's difficult to identify just what tourism was generated by a convention and visitors bureau.

The agreement last week between the city council and Drury put an end to over five years of litigation regarding the city's use of motel and restaurant tax money to help pay for the university's River Campus project.

The council agreed to a number of conditions related to the spending of motel and restaurant tax money. Besides helping to fund the River Campus, the taxes go to operate the city's convention and visitors bureau.

Since the CVB's inception 19 years ago, its budget has grown by over $383,000 from an initial $56,250.

Mehner said the chamber has sought to make the CVB more accountable since taking over the operation from the city in October 2002 under an annual contract with the city. The chamber had operated the CVB from its inception in 1984 to 1992. The city then ran the CVB for a decade.

Under the 2002 contract, the council decides annually how much motel and restaurant tax money should be budgeted to operate the CVB, and the chamber has an accounting firm annually review the bureau's spending, Mehner said.

In addition, the council is kept better informed of CVB operations because Councilwoman Evelyn Boardman serves on the CVB task force and on the chamber's board of directors, Mehner said. The CVB also is aided by an 18-member CVB task force.

Mehner said the CVB's current $440,000 budget is less than the $458,000 the city budgeted for the operation for the fiscal year that ended June 30, 2002.

The CVB operates with three full-time employees and one part-timer. About 25 percent of the budget goes to salaries. The rest goes to advertising, sponsorships of community events and recruitment of conventions and tours.

Under the contract, up to 10 percent of the budget can go to the chamber as an administrative fee.

Mehner said the chamber only is trying to cover its costs. This fiscal year, the chamber probably will take about $40,000 or less than 10 percent, Mehner said.

The money goes to cover the costs of accounting and other administrative tasks handled by the chamber. When the city operated the bureau, those duties were handled by city hall, Mehner said.

mbliss@semissourian.com

335-6611, extension 123