Hotel/Motel Revenues & the Economic Development Fund


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Hotel/motel tax revenues used to go into the General Fund, but as of FY2009 were earmarked for an Economic Development Fund (Fund 46). According to the FY2012 budget,

[t]he Economic Development Fund accounts for our agreements with outside agencies that help provide various economic development functions on behalf of the City. These agencies are paid through the Hotel/Motel revenue the City receives.

That’s not entirely true.

The original participants were as follows:

Daley Policy Group: $72,000, federal lobbying
DeKalb County Economic Development Corporation (DCEDC): $42,500, industrial recruitment
ReNew DeKalb: $50,000, downtown development
Chamber of Commerce: $50,000, tourism

The following year, DCEDC’s compensation was bumped up to $45,000 annually. ReNew*** was transferred to the TIF trough, which perhaps makes some sense but also has served the purpose of reducing an embarrassing deficit.

Shortfalls are largely made up with transfers out of the General Fund.

Beginning this year, Hopkins Services will be contracted as a consultant in commercial development at $75,600 annually, but budgeted out of Administrative Services (i.e., General Fund) instead of Economic Development. This is no surprise, because Fund 46 obviously can’t support it — even if Monday’s decision to remove Daley’s allocation stands the test of pressure during consideration of Daley’s actual contract.

No matter how it turns out, the new council took a shot at a sacred cow last night.

Perhaps the move will stimulate further discussion. Here are a couple ideas:

— Pay Hopkins Services and all other econ development contracts out of the Economic Development Fund. Let the hotel/motel revenues define the limit on contributions toward outside developmental services.

— Consider something new, such as the addition of a grant writer.

— Give private organizations, such as ReNew and the Chamber, firm deadlines for self-sufficiency.

Sources: FY2008-FY2012 budgets from the city’s Downloads page.

* The 2008 hotel/motel tax hike bumped up revenues, but apparently not as much as anticipated!
** This is the budget as proposed before Monday’s action to remove Daley Policy Group’s $72,000 allocation.
*** I write it this way instead of Re:New DeKalb because ReNew DeKalb, Inc. is the name registered with the state. You will not find Re:New DeKalb in the Secretary of State’s online database.