CLEARFIELD – The Clearfield County Recreation & Tourism Authority board held a special meeting Wednesday.
Keith Clark, attorney with Pennsylvania Restaurant and Lodging Association, spoke to the board members present, as well as employees, representatives from the hotel industry in the county, Clearfield Chamber of Commerce Director Kim McCullough and County Treasurer Carol Fox and members of the press, about changes to Act 18.
Act 18 provides for the creation of county tourism authorities and how they are to be operated and funded, which is where the hotel tax was also introduced. The hotel tax funds the tourism promotions agencies, in this case Visit Clearfield County.
Clark was involved in the rewriting of Act 18 and went on to explain that as counties in the state wanted taxes on hotel rooms, different enabling statutes were created in the 1980’s.
In the late 1990’s, one was created for everyone else, Act 18, and there were 16 statutes in all. Act 18 allowed for counties to enact a three percent tax on each room rented in a county at hotels, bed and breakfasts, etc.
About five to seven years ago, pressure to increase tax rates by some counties resulted in the creation of a task force to hold discussions with the state House and Senate and especially the House tourism community. The revised Act 18 covers 57 counties, including Clearfield County.
The task force insisted that the money for TPAs should be spent in an accountable fashion and not used as “walking around money.” Clark said they have seen instances where only a portion of the money has gone to the county TPA and the county commissioners used the rest with a memorandum of understanding between the TPA and commissioners.
With the revision of Act 18, the TPAs must account for the money and how it is used. He said there were several very important changes made and went over them.
The first is the highest tax rate that can be enacted. Originally, it was only as high as three percent, but now the counties can raise the tax to five percent. Second is that the administrative fee collected by the county treasurers was set at two percent, or $40,000. Now it can be up to four percent of the taxes collected. The administrative fee can be used by the county however it wishes.
Third is the purposes of the act, how the money can be spent. Clark said the money is intended for marketing purposes and funding the TPA.
The fourth change is who can be taxed, and the new addition is cabins with water and bathrooms.
VCC Executive Director Holly Komonczi asked if this includes state park cabins that do not have water or bathrooms inside, but each has its own in a separate building next to the cabin, and Clark said they were included.
He said that sometime shares are also taxable. For all inclusive stays, which would be one or two nights plus meals and other events, cannot be taxed like the rest, but the state created a formula to be used.
Grants were the fifth area addressed. Grants are to have at least a 25 percent match from the organization applying for the grant, and it does not have to be in money but can be from “in kind” services.
It was noted that the VCC requires a match of 50 percent. Also, signage purchased with grant money must have the TPA logo.
Clark said there is a clear indication that the money is not to be kept by the county and that the board of directors has a fiduciary duty to make sure the money is spent according to the act.
Komonczi noted that VCC gives the commissioners $30,000 per year for their own grants and asked if they are still responsible to account for that money, and Clark said they were, and that they have the final approval of where the money goes, which is a major change in the act.
The sixth change is that grants cannot be given to a business with competition in the same county, and this generated considerable discussion in the meeting.
Clark agreed that the law isn’t entirely clear on this point but gave the example of two petting zoos. One cannot have a grant without the other one having it, and the TPA is responsible to do due diligence on whether there is competition.
When asked by the media what would happen if one organization, for example, a fair, would apply but another fair did not, would that mean they would give the money to both, or to neither. Clark said this is unclear but suggested that what the TPA would have to do is contact the other entity and see if they are interested in applying.
The seventh change is how a TPA can be decertified by the county. The process requires that 65 percent of the county be in agreement, and there must also be a public hearing beforehand.
Clark explained it would be based on the votes of municipalities and not a referendum of the voters. The county would go to the municipalities and ask them to vote on whether to remove the certification of the TPA, and the votes of municipalities whose population totals 65 percent of the county’s population will determine the result.
All the counties affected by Act 18 will need to adopt new ordinances and at that time also determine the tax rate and how much the administrative fees will be, or eliminate the tax altogether. Chairman Hildred Rowles asked what would happen if the county ordinance doesn’t follow Act 18 and Clark said they would have the right to take the matter to court.
Rowles also asked about how the staff is hired and who they answer to. Currently VCC and the CCRTA board hire their own staff and they are paid out of the hotel tax money.
Rowles said they are to be considered an independent authority separate from the county government. He said what is being proposed by someone is that the employees be sub-contracted from the county and then VCC would reimburse the county for salary and benefits.
Clark asked what the purpose would be, possibly control? Commissioner and board member Tony Scotto said there is precedent for the action with how Clearfield County Solid Waste Authority operates. Clark was also asked if other TPAs have county commissioners on their boards, but he did not know.
There was also some discussion on whether the authority is a municipal authority or not. Clark said the original ordinance does not refer to CCRTA as a municipal authority, but Fox noted that the original formation consisted of tourism, care for the Wopsononock Wild Area and other matters made it a municipal authority.
Komonczi also asked what happens if the bylaws are not followed. She said she has been told by the commissioners that the bylaws don’t matter in regards to county authority. Clark said the commissioners have no governance of the board because VCC is a 501(c)(6) non-profit agency.
Rowles noted they would remain in touch with Clark as they adjusted to the new Act 18.