The closed sessions the Ephraim Village Board has held since April to talk with its attorney about current or potential litigation were revealed to be about the village’s issue with a grant program Destination Door County (DDC) launched this year that benefits local community projects.
The village, backed by its attorney’s opinion, is questioning the legality of how that grant program is administered, according to documents sent to the Door County Tourism Zone Commission (Commision), and discussed at the Commission’s Aug. 17 meeting.
The Commission is the entity that collects the 8% lodging tax from all municipalities and in accordance with state statute, distributes 30% to the municipality where the lodging facility is located, and 70% to a contracted tourism entity, in this case DDC.
DDC launched the CIF grant program in January of this year as a way to funnel some of the tax dollars to local projects, while still adhering to state statute that governs use of those dollars. Successful grant applications must show a benefit for tourism – statute requires 70% of room tax dollars be spent on tourism – but also for the local community.
The DDC partnered with the Door County Community Foundation, (Community Foundation) to administer the grant program.
As of the second round of grant allotments announced in August, DDC had granted $575,251 to 12 local projects, with one more grant cycle to go in 2023.
That total amount would have been $675,251. However, Ephraim rejected the $100,000 it was awarded during the second round of grants, announced in August, for its North Ephraim Multimodal Trail with solar lighting. The Peninsula Pulse asked the village by email why it had applied for the program in the first place.
“The short answer is, while we had some unanswered questions, we had no legal cause for concern until we received the opinion of our attorney in mid-July,” said Brent Bristol, village administrator.
The village questions, from its attorney’s interpretation of the statute, the Community Foundation’s role in the grant program. It asserts that placing the grant dollars with the Community Foundation constitutes a “giving” of those dollars to the organization, and an authorization of the Community Foundation to directly engage in tourism.
Neither of those things, according to Ephraim, are allowed by statute.
Instead, the village proposed in a letter to the Commission that the Community Foundation be removed from the equation, and return money it’s holding for the grant program to the Commission’s reserve fund. It also wants the DDC to review the grant applications and put those it approves into its budget process, or have the Commission fund the grants from its reserve fund.
The Commission discussed Ephraim’s complaint at its Aug. 17 meeting, and said the village’s understanding about the relationship between DDC and the Community Foundation was inaccurate, and “a demonstration of a fundamental misconception” about the grant program and the Community Foundation’s role, according to Dave Eliot, Commission vice-chair, and publisher/co-owner of the Peninsula Pulse, during the Commission’s Aug. 17 meeting.
“The Commission contracts with DDC to use the [70% room tax] money,” said Commission member D’Ann Jackson, who represents Nasewaupee. “That’s their decision to make [how they use that money]. I don’t see why they think they [the village] have anything to say about DDC’s decision to contract with the Community Foundation.”
The Commission members decided unanimously to send the village a letter stating its position. It also decided to request a meeting with Ephraim village president Mike McCutecheon “to try to get from him the root of concern,” particularly in light of the closed sessions the village has been holding under the Open Meeting law, using the potential litigation exemption, said Commission chair Josh Van Lieshout, during the Commission’s Aug. 17 meeting.
“My idea is to meet with the village president to get a better understanding of the issue; that’s my goal,” Van Lieshout said. “What I don’t want to have happen is, I don’t want to see this go down the path of litigation.”
Van Lieshout extended the invitation for a meeting. The Ephraim Village board went into a closed session on Sept. 5, again under the litigation exemption, deciding unanimously when it returned to open session to reject the Commission’s offer to meet with individual board members as “non-constructive,” instead proposing “an open meeting with the full Ephraim Village Board and members of the Door County Tourism Zone Commission,” according to the minutes of that meeting.
On Sept. 8, the Commission sent a letter signed by Van Lieshout to Ephraim, defending the grant program and how it’s administered.
“The Door County Tourism Zone has only ever engaged with one marketing entity in its entire sixteen-year history – the Door County Visitor Bureau, Inc., now doing business as Destination Door County,” Van Lieshout said in the letter. “Further, contracts related to the creation of the Community Investment Fund are between the Door County Community Foundation and Destination Door County.”
Van Lieshout further stated that the funds the Commission distributes to DDC were in alignment with DDC’s budget, which was approved unanimously and included a presentation of the grant program.
As of deadline, Van Lieshout said by email that he did not know what the Commission’s next step would be.
“I’ll have to think more about it, but I’m not sure there is much else to do,” he said.