Sherman renews threat to withhold $2.5M in funding to tourism agency
Washington County Commission Chairman Nick Sherman is threatening to withhold nearly $2.5 million in funding to the county’s tourism agency over renewed complaints that officials have not received enough financial information and documents from the organization.
Sherman requested during Tuesday morning’s workshop meeting that a motion be placed on Thursday’s voting agenda asking county Treasurer Tom Flickinger to redirect the hotel tax revenue into a “special fund” rather than send the annual allotment to the Washington County Tourism Promotion Agency.
It’s the second time in the last 16 months that Sherman has threatened to stop disbursements to the tourism agency in an ongoing rift between him and Jeff Kotula, who heads that organization and the Washington County Chamber of Commerce. Kotula said the tourism agency has provided annual audits to the county commissioners, but Sherman has demanded more information with a detailed list of additional financial statements, leases, meeting minutes and employment agreements with third-party vendors.
“These are very basic questions about where the money is going … and we have not received the answers,” Sherman said during the meeting.
Commissioner Larry Maggi questioned the renewed threat to redirect the revenue from the 5% hotel tax into a special account, and raised concerns about how it could cost the county even more money in legal fees should the issue end up in court.
“We just can’t do that,” Maggi said. “We’ve lost in court several times. I think it’s a waste of time and money.”
Maggi then asked Commissioner Electra Janis, who is at a conference in Washington, D.C., and attended the meeting by telephone, whether she approved of Sherman’s demand to withhold funding from the tourism agency.
“Electra, are you in favor of this? Are you a second vote on this?” Maggi asked.
“Yes, I plan to be,” Janis responded.
Last year, the county filed an open records request with the Tourism Promotion Agency asking for a variety of documents, but it was denied by the state’s Office of Open Records because the organization is not a government entity. A subsequent appeal to Washington County Court of Common Pleas was rejected by Judge Michael Lucas for much of the same reasons, although the county has filed another appeal to the state Commonwealth Court.
County solicitor Gary Sweat said the open records request case is different than the current discussion to withhold hotel tax revenue funds because the latter falls under the Fourth Class County Code that requires the tourism agency to provide financial records through the annual audit.
In a written statement Tuesday, Kotula questioned the county’s legal stance since the tourism agency has already provided annual audits and offered to hold meetings with the commissioners to discuss issues or even hire a facilitator to find common ground. He said the agency submitted a “high-quality, clean audit conducted by an independent, certified public accounting firm” in March that gave the commissioners a view of the organization’s finances and spending.
“Under state law, Commissioners Sherman and Janis do not have the authority to determine the standards of an independent audit, select our auditor, select what is included or excluded in an audit, or change auditing standards,” Kotula said. “The commissioners can only withhold funds if we do not submit a report within 90 days of the end of our fiscal year. Neither the commissioners nor county treasurer have any authority to withhold funds outside of that fact.”
In December, the commissioners floated an idea to change the disbursement of the hotel tax revenue money that would have sent 75% of the money to a joint fund that would require agreement on how the funds are spent. The tourism agency would have received 20% of the remaining revenue and the county’s treasurer would receive 5% as an administrative fee. That plan fizzled out before it could go into fruition, apparently over concerns about its legality.
In a written statement sent after Tuesday’s meeting, Sherman said he and Janis sent a letter to Kotula on Sept. 10 with a list of demands that the agency provide various records to county officials beyond the annual audit. He added that they are “concerned there could be potential wrongdoing,” which is why they’re asking for additional documents.
“Washington County no longer allows people to have a blank check to walk around and spend taxpayer dollars with no oversight,” Sherman said. “We, as the elected leaders, are only asking for transparency,” Sherman said.
Kotula took exception with that characterization and reiterated the agency’s attempts to meet with the commissioners using a facilitator on two occasions this summer, only to be rebuffed.
“For the commissioners to make false allegations of wrongdoing is a distraction from their continued waste of taxpayer dollars on losing case after case against our organization,” Kotula said. “The commissioners have over 20 years of clean audits on file and Commissioner Sherman himself served six years on our board – until last year. He has reviewed our audits, financials, expenditures and income. He knows our organization has quality financial reporting, adheres to the highest auditing standards, and complies with the law.”
The commissioners will hold their voting meeting at 10 a.m. Thursday in the public meeting room on the ground floor of the Crossroads Center building at 95 W. Beau St. in Washington.