The amount being spent on payroll and administration costs in Tourism Penticton’s 2014 budget gave some Penticton city councillors pause when they reviewed it Wednesday.
With overall expenses of $909,000, up from $630,800 last year, Coun. John Vassilaki was the first to express concern that $404,685 is going to cover payroll and administration costs for the organization, which runs the Penticton and Wine Country Visitors Centre and handles destination marketing for the community.
Revenues at Tourism Penticton are expected to be up next year, but so are expenses, requiring the same $354,000 investment from the City of Penticton to keep the operation going.
“It’s way out of line,” said Vassilaki.
“There is no way I can go along with such a payroll when all the money the city puts into it is all eaten up by salaries and whatever.”
Vassilaki said he considers every dollar that isn’t used to promote the community a waste.
“To have such a huge payroll for such a small budget, $300,000 is outrageous,” he said.
And on top of that you have your general administration expenses, and that makes it $400,000.
Miranda Halladay, president of the Tourism Penticton society, said it comes back to the split last year that saw the two per cent hotel room tax given to the Penticton Hospitality Association.
“The quick answer is that this organization was built on the supposition that ultimately external marketing would be housed within this organization or a unified organization as one,” said Halladay.
“Perhaps we were overly optimistic last year in the opportunities that we thought we could co-operate with the hospitality association on and engaging that budget back in a unified form.”
Earlier this year, PHA director Tim Hodgkinson told council the organization was waiting for better documentation from Tourism Penticton on their plans before committing the hotel room tax funds.
Relations between the two groups improved, and until recently, both were working on plans to create a unified organization.
“The whole focus of Tourism Penticton changed when the HRT funds went to another organization,” said Chuck Loewen, the city’s general manager for recreation services and treasurer for Tourism Penticton.
“They still have to run a visitor information centre, which takes up the largest portion of the payroll and then there is a couple of individuals that their focus has changed, not so much from the destination marketing, which is now the function of the HRT funds, but rather to selling.”
“I think it is important to note if they are not out there selling promotional packages, they can’t add that additional destination marketing we were able to achieve last year.”
Coun. Helena Konanz also admitted concern over the amount devoted to payroll, but Vassilaki was the vote in opposition to giving preliminary approval to the budget.
Mayor Garry Litke is pleased with how the 2014 budget process is progressing so far, though he admits there have been some stumbling blocks.
Though council managed to give preliminary approval to a capital budget without having to increase the city’s tax requirement, Litke said the grant applications are a problem.
Those total almost $1 million, well over last year’s $577,275.
“Even the amount we granted last year was really difficult in order to keep the tax requisition under control. That’s going to be one of our biggest challenges,” he said.
“We didn’t conclude our discussion on the grant applications, but that is going to be a very tough one.
“Any time you are looking at approving only half of what has been applied for, those become very difficult conversations.”
Much of the increase over last year is made up of new groups requesting grants, like the Penmar Community Arts Society and the Performing Arts B.C. Provincial Festival, along with organizations returning to the table, such as the Okanagan International Children’s Festival.
The process has also slowed budget discussions, but Litke said that is nothing new.
“That is normal, and it is always a problem,” said Litke, explaining that a couple of factors are contributing to the problem.
“Our chief financial officer is new, so he has presented it in a way we have never seen before.
“It was a little odd, because the order on the agenda was different than the order on the spreadsheet we had and that was different than the order in our binders.”
There was also discussion about the process to follow, with some councillors wanting to review them one at a time, while others wanted to look at all of them first and then deal with them.
“So we had to wrestle that to the ground and that was partly because this is my first time in the chair and there are some new opinions on council about how it should be done,” said Litke.
“I am going to make some suggestions to the CEO, our financial officer and council so that on the 17th we’ll deal with it more efficiently.”