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New Programs Spend Lodging Taxes on Parks

A surplus of 2022 room-tax collections will be spent on parks, according to a plan created by Destination Door County (DDC) and approved by the Door County Tourism Zone Commission (Commission).

“It’s extremely important for us to reinvest back into the community that we love,” said DDC president and CEO Julie Gilbert during the April 27 Commission meeting when presenting the proposal that was approved.

Gilbert said the increase in visitor numbers during the past few years has helped to grow the local economy and provide more opportunities for residents, but that increase has “also put stress on our fragile, natural ecosystem and stretched our local resources.”

With outdoor recreation being a major driver of leisure visits, according to their analytics, as well as a key quality-of-life feature for local residents, investing room-tax dollars in parks balances economic and environmental sustainability.

“It demonstrates to our residents that Destination Door County recognizes the impact of tourism on our community,” she said. “It demonstrates to our environmentalists how tourism can directly benefit our community and the environment; and it helps residents understand that 70% of room-tax dollars stewarded by DDC goes to things they care about and not just toward marketing.”

The new program would contribute $125,000 to DDC’s Community Investment Fund (see the sidebar story), with the remaining $800,000 spent as follows:

  • Municipal Parks, $150,000: Each municipality receives $2,500, with the remainder distributed to each municipality based on the percentage of room tax it received according to the 2022 Commission audit. This program would be managed by DDC.
  • Friends of Door County Parks, $150,000: This money would be disbursed based on an application process. Friends could apply for money for new projects rather than budgeted ones (unless those were expanded or enhanced amenities that had not been planned for). This program would be managed by the Door County Community Foundation. 
  • Door County State Park Fund, $500,000: A fund will be established at the Door County Community Foundation for the state park Friends groups with an initial $250,000 ($50,000 for each of the five such groups at Newport, Peninsula, Potawatomi, Whitefish Dunes and Rock Island state parks). An additional $250,000 would be available to match Friends groups’ own fundraising efforts, dollar for dollar, with the overall goal of raising a total of $500,000, or up to an additional $100,000 per Friends group.

Where Did the Money Come From?

The money for the new programs comes from a Reserve Fund held by the Door County Tourism Zone Commission (Commission).

The Commission collects the 8% room tax from all lodging facilities in Door County, disbursing 70% to DDC for tourism promotion or tourism development, as required by state statute, and 30% back to the municipalities where the lodging facilities are located, to be spent however the municipality cares to spend it.

But that 70% disbursal to DDC is based on DDC’s adopted budget of estimated room-tax collections. If revenue exceeds the estimate, the Commission is under no obligation to disburse the extra to DDC and may keep it in a Reserve Fund, as per the entity agreement between the Commission and DDC.

In 2022, the Commission collected $11,053,941 in room tax. DDC’s approved 2022 budget was for $6,810,376 in room-tax revenue – or $927,381.10 less than the actual 70% of room-tax collections would have been.

As part of the agreement between DDC and the Commission, DDC may “from time to time, present special nonbudgeted proposals for application and use of funds in the Reserve Fund,” according to the agreement. 

That’s essentially what DDC did with its parks proposal.

“The amount requested was $925,000, so there would be $2,381.10 left over” in the Reserve Fund, said Juliana Behme, Commission administrator.

The Commission’s Response to the Plan

Commission chair Josh Van Lieshout said the proposal was a “brilliant way to solve our nearly $1 million opportunity in 2023 and 2024.” 

Other Commission members also praised the plan, saying it was well conceived and in alignment with DDC’s goals and direction.

“I think it’s just excellent,” said Nedd Nedderson, one of the Commission’s Ephraim representatives. 

Another of Ephraim’s representatives, however – Matt Meacham – did not have the same reaction.

“We got this [proposal], like, 15 hours ago,” Meacham said, and he wanted to be able to take it back to the Ephraim Village Board for feedback. “Second point: I’m interested how investing all this money into public parks – how does that help protect the environment?”

Gilbert said the groups that receive the money would be the best ones to decide that, whether it’s ensuring that trails are updated or creating better signage to keep people on paths.

“It will be based on what Friends groups [and other entities] think is most beneficial,” she said. 

Meacham said he believed parks could do those things with current funds. Commission vice chair Dave Eliot – and publisher/co-owner of this newspaper – said that “all of the Friends groups in all of the parks are starved for cash,” and municipal parks have individual needs.

“In Baileys Harbor, we have two parks in need of repairs that will push us above our budget,” said Eliot, who was elected in April to serve as chair of the Baileys Harbor Town Board. 

Eliot said it was the Commission, and not local municipalities, that decided how the room-tax dollars were spent, a point echoed by Myles Dannhausen Sr., a Commission member who represents the Town of Egg Harbor. Dannhausen said state statute gives destination-marketing organizations authority to spend their portion of room-tax dollars however they want, as long as it’s in keeping with the parameters of state statute.

“I would hesitate to create a precedent where we have to take everything back to municipalities to get their blessing on what we’re doing,” Dannhausen said.

But Meacham and Commission member Linda Wait, who represents Sevastopol, wanted to table the proposal for a month to get that municipal feedback. 

“I like the basics of this proposal,” Wait said. “This is one way to get a portion of that 70% back into the municipalities and keep it in the county. I agree with Matt that it would be prudent to take this back to our boards.”

The other commission members did not agree.

“I think the plan is really good, and I really like the attention to the parks, and there are a lot of needs in the parks,” said Commission member D’Ann Jackson of Nasewaupee. “I think we all have other things that are important, too, but let’s look to the future on those and not hold something up that’s really important.”

The Commission approved DDC’s proposal for the Reserve Fund spending on a voice vote, with only Meacham and Wait dissenting.

Community Investment Fund

Of the $925,000 Reserve Fund dollars, a total of $125,000 will be contributed to the existing Community Investment Fund. That program launched in January by Destination Door County (DDC), with the Door County Community Foundation as the administrator, grants money to nonprofits, community business associations and local governments for projects that benefit visitors and local residents.

DDC committed $847,000 to that fund in 2022, budgeted another $1 million for 2023, and will add the additional $125,000 to it to achieve almost $2 million for local projects.

Application deadlines occur four times a year, on the first Thursdays of January, April, July and October.

Given the program’s launch in January, the first application deadline passed on April 6. Bret Bicoy, Door County Community Foundation president and CEO, said applicants would normally be informed of a decision four to six weeks after the deadline.

“But this being the first time with the new process, there is the possibility that it may take slightly longer as we work to create new protocols,” Bicoy said. 

When asked how many applications they have received, Bicoy said that DDC plans to release that information when it announces the recipients of the first grant rounds.

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