Tempers flare over funding to Washington County’s tourism agency
Tempers flared between Commissioners Nick Sherman and Larry Maggi during a rowdy debate over whether Washington County officials should withhold nearly $2.5 million in annual funding sent to the county’s tourism promotion agency.
Sherman asked for a motion during Thursday’s voting meeting to place the county’s hotel tax revenue normally sent to the tourism agency into a “special fund” over his concerns that not enough financial information and documents have been provided upon his request.
Sherman said they have reached out several times to tourism officials asking for additional documents – such as financial statements, leases, meeting minutes, management agreements and employment contracts with third-party vendors – beyond the annual audit that is required.
“I’ve been asking for these documents for over six years. At this time, I’m not willing to wait any longer,” Sherman said. “I don’t know what the tourism promotion agency is hiding. … I was curious before this happened and now I’m really, really curious. If they have absolutely nothing to hide, this should be a very, very simple conversation.”
He said the county has given the tourism agency plenty of opportunities to answer seven questions dating back to last year, but has yielded no results except for the audit, which he called “incomplete.”
“I want these questions answered and I want to withhold this money until they answer our very simple questions,” Sherman said.
“That is a great speech,” Maggi fired back while asking to table the motion as Sherman pushed for a vote.
Maggi took exception with Sherman’s characterization, pointing out that the commissioners received a letter from the tourism agency earlier this week – reiterating another letter sent in July – asking to have a meeting with a mediator to discuss how the two sides can move forward. He then questioned the quest for transparency, alluding to a 2-1 vote moments before in which Sherman and Commissioner Electra Janis agreed to pay $2,128 in legal services to Eckert Seamans law firm as part of the county controller’s audit of the ransomware attack in January 2024 in which the county sent $346,687 in cryptocurrency to Russian hackers.
“It’s ironic you’re saying tourism is hiding something. What are you guys hiding from the 2024 cybersecurity matter?” Maggi said.
Maggi and Sherman argued for several moments about the cyberattack audit and tourism funding before the debate soured.
“Why are you protecting (the tourism agency)?” Sherman said.
“I’m not protecting them,” Maggi said.
“You sure as (expletive) are,” Sherman said. “This is ridiculous. Why? Are you concerned about losing your ability to go on golf outings and everything else you’re doing? Why are you doing this?”
“Get control, Mr. Chairman,” Maggi responded. “I hate to see you go on a personal attack. … I’m sorry you did that. I’m not going to do the same thing to you.”
The discussion then steered back to Sherman’s insistence that the Fourth Class County Code allows the commissioners to dictate how the tourism agency’s audit should appear and gives them the ability to withhold if it’s not provided in a manner they deem to be acceptable.
“We have every right to say this is what we want their audit to look like,” Sherman said. “We’ve asked these questions for multiple months. I don’t know why you’re protecting them. You’ve been steadfast in transparency as long as I’ve known you. I’ve been proud to stand shoulder to shoulder with you and say we’ve always worked together for transparency, and I don’t know why we don’t have it on this issue. … I’m just asking basic questions.”
“You’ve done a good job of gaslighting me, but it’s not going to work,” Maggi said.
With that, Sherman called for a vote and the commissioners approved the motion 2-1 to direct county Treasurer Tom Flickinger to withhold the funding from tourism, with Sherman and Janis voting in favor and Maggi voting against it.
Jeff Kotula, who is president of the tourism agency and the Washington County Chamber of Commerce, said in a written statement after Thursday’s meeting that their annual audit from March complies with the county code.
“We have met our responsibilities under law, yet Commissioners Sherman and Janis still made the decision today to direct the Treasurer to withhold hotel tax revenues in violation of those laws,” Kotula said.
But even after the vote, there is still some uncertainty about whether the money can be withheld and, if so, who will control the special account.
“I am going to have a discussion with my solicitor to ask that very question,” Flickinger said in an interview following the commissioners meeting. “Do I have to comply with the commissioners’ dictate, or as an elected (row officer) do I have a different responsibility?”
Flickinger said October’s payment would normally be made today, but he will temporarily pause that transaction until he gets legal advice from attorney Lane Turturice, who is his row office’s solicitor. Flickinger, who earlier this week offered to act as a mediator so both sides could find common ground, also did not know the mechanics of the special fund.
Kotula said he would welcome having a discussion with the commissioners, although he admitted that previous offers have been rebuffed.
“And despite our numerous offers – most recently this past Monday – to sit down, resolve differences and chart a new path forward together, the commissioners continue to ignore our meeting requests, choosing instead to waste tens of thousands of taxpayer dollars on more attorneys and more expensive lawsuits,” Kotula said.
Kotula added that the loss of revenue will stifle marketing grants and funding given to local organizations, festivals and events to attract people to Washington County. He did not say whether the tourism agency might consider suing the county if the impasse persists.
“It is difficult to believe that the agency responsible for promoting Washington County’s great communities, downtowns, fairs, youth sports and culture, perhaps now has to try to counteract the potential injuries to our tourism industry caused by the commissioners’ decision,” Kotula said.
It’s the second time in the last 16 months that the county has threatened to stop disbursements of the 5% hotel tax revenue earmarked for the tourism agency. Last year, the commissioners suggested changing how the hotel tax revenue is distributed, formulating a plan to send 75% of the money to a joint fund that would require agreement on how the funds are spent, with the tourism agency receiving 20% of the remaining revenue and the county’s treasurer receive 5% as an administrative fee. But that plan was scuttled before it could move forward, apparently over legal concerns.