ROCK FALLS – The city has decided to end its agreement with Rock Falls Tourism and is considering taking legal action to gain control of tourism money that predates the pact.
The possibility of litigation put the city council in closed session before the vote late Tuesday. The city said it had reason to consider legal action.
"They made it clear to us they were not turning over funds," City Administrator Robbin Blackert said.
Before May 1, 2008, the city had handled tourism duties and had about $661,000 in reserve for that purpose. When the agreement was signed, Tourism received that money, in addition to the monthly income from the hotel tax.
In 2012-13, the local hotel tax brought in $160,148.41. The city receives 5 percent to cover administrative costs, leaving Tourism with about $152,141.
The council on Feb. 18 had authorized Mayor Bill Wescott to send an official notice of the city's intent to end the tourism agreement that has been governed by city ordinance since 2008.
The contract, which also included lease provisions for city-owned office space used by the Rock Falls Convention and Visitors Bureau, expired March 1. At the February council meeting, Wescott said legal counsel had advised him to terminate the current pact before trying to negotiate a new one. Both sides are required to give 60 days' notice of their intent to terminate before the contract expires.
Quincy attorney Chris Scholz, who represents the CVB, attended the February meeting, during which he suggested that the city postpone its vote and reconsider termination.
Blackert said the reasons for ending the agreement were not performance-based. In fact, during the February meeting, several council members praised the work done by Tourism Executive Director Tim Wilson.
"Tim has been energetic and a breath of fresh air," Blackert said. "This is more about procedural things."
Wednesday morning, Wilson was unaware of the termination vote.
"It's nice when people tell you that you're doing a good job," he said, "but the bottom line is I'm still working month-to-month with no real contract."
Wilson, who started in Rock Falls a little more than a year ago, said the issues were complex.
"There are a million different factors," Wilson said. "A lot of it is the city wants more direct control over how the [tourism] money is spent."
Blackert declined to comment on personnel, but said the city plans to continue all tourism endeavors.
"It's possible we would form a city department and operate it with the hotel tax funds." she said.
City oversight of the local hotel tax money falls on the council for approval of expenditures. The treasurer or someone designated by the treasurer also looks at the books. The ordinance calls for the treasurer to inspect Tourism's financial records at least once a year and file a written report no later than April 1 with the council.
Blackert said the city has never seen a Tourism audit, and officials have asked for financial records from 2009 to the present. She said they were told that the requested financials would be available when a new agreement was reached.
"The crux of the matter is that the aldermen are having a hard time with the lack of transparency," she said. "It's not acceptable being denied access to financial records."
Scholz said Wednesday that the first request for financial records that he is aware of was a written request from the mayor that arrived in his office on Monday.
"Under the current agreement, Rock Falls Tourism is obligated if requested to provide financial information," Scholz said. "I have urged them to document things, but this is the only written request I have received."
Former Mayor David Blanton, who is a member of the Tourism Board of Directors, said that while he was mayor, the Tourism financials were done as part of the city's audit. A separate audit was done for the first time a couple of months ago.
Wescott said the audit, which cost the city $5,000, arrived on his desk late Wednesday – after repeated attempts to get it since May.
"We were told it was finished, locked in a drawer, and they would be happy to give it and other records to us after there is a new agreement," Wescott said.
Blanton said he knew nothing about any conditions attached to the availability of records. He said all the council ever had to do was to ask, preferably in writing.
"The numbers have always been available, but to my knowledge no one asked us about the records," Blanton said. "They are certainly entitled to those records, but if the mayor is asking for them under the current agreement, it should be done in writing."
Blanton said the mayor came to Tourism with a "wish list" a few months ago, and he is disappointed by what he sees as the city's unwillingness to communicate.
"We reviewed the list and have been asking for a meeting with the whole council ever since – and still no meeting," Blanton said. "All we've gotten are 11th-hour extensions of the agreement."
State law requires that local hotel tax money be used only for tourism-related purposes. While there is a state tax on hotels, the collection and governance of the local tax is left to the municipalities.
In Rock Falls, the hotel tax ordinance calls for the city treasurer to, by a certain date each month, place the funds from the previous month into the Rock Falls Tourism Promotion Fund, which was created specifically for the tax.
Wescott said the city just wants to see financials on a regular basis and for parties to be accountable.
"The first thing we asked for on the wish list was for them to present a budget with proposed operational expenses," he said. "We don't believe there is any money missing, but we want to make sure the money we collect is being spent as it should be."