City Ties Funds for Tourism Bureau to Level of Hotel Revenue : Ventura: In attempt to match payment with performance, the agency will receive one-fifth of the amount raised by the standard 10% bed tax.

By JEFF McDONALD

June 27, 1995 12 AM PT

SPECIAL TO THE TIMES

Seeking to tie funding for the Ventura Visitors & Convention Bureau to its performance, the City Council on Monday voted to give the city’s marketing arm a flat percentage of the taxes generated by hotel revenue.

Under the agreement, the tourism bureau will in coming years receive one-fifth of the amount raised by the city’s 10% bed tax, which has declined in recent months.

“It might help send a message to everybody that performance is an important part of the job,” Councilman Steve Bennett said before the vote. “It’s an attempt to try to match revenues with performance.”

Typically given a set sum to print brochures, staff information booths and otherwise promote Ventura as a tourist destination, the bureau has not been granted a funding increase in four years.

For the fiscal year beginning Saturday, the council will again budget $357,800 for the bureau.

But starting July 1, 1996, the office will get 20% of the bed taxes paid by the renters of Ventura’s 2,150 motel and hotel rooms.

Councilman Gary Tuttle likes the idea of making the tourism bureau responsible for its funding.

“It gives them some incentive and it gives councils in the future some guidelines to make sure the whole program is working effectively,” Tuttle said.

The agreement approved Monday night also calls for potential increases or decreases to be capped at 10% in a year--an idea Mayor Tom Buford said is important to ensure that funding does not dry up if hotel rentals plummet.

“I’m not averse to a system that rewards success,” Buford said. “But the old saying in advertising is that when sales are down, that’s when you advertise the most.

“If bed-tax dollars began falling in Ventura, we would have some hard questions to ask,” he said. “But I’m not convinced that at that point we’d want to take dollars away.”

The idea of linking revenues to performance finds support among some economic analysts.

“Any entrepreneurial endeavor is more workable and more functional,” said Mark Schniepp, director of the Economic Forecast Project at UC Santa Barbara, which follows business trends in Santa Barbara and Ventura counties.

“Most businesses will tell you that too,” he said.

Schniepp said Ventura officials must give the bureau room to pursue its own marketing strategies.

“They should give them freedom and latitude to market the city,” he said. “If they do impede them with obstacles and new ordinances, then it will not be very workable.”

Like most local governments, Ventura collects a 10% transient occupancy tax from every hotel and motel room rented within the city. In 1994, the city received $1.86 million in bed taxes, up slightly from $1.79 million in 1993.

Local hotel and motel revenues are projected to drop 4.6% in the second half of 1995 from the same period last year--from $9.5 million to $9 million. Yet tourism officials welcome the new funding formula.

“We really haven’t found a better way to do it other than looking at the transient occupancy tax,” said Bill Clawson, the bureau’s executive director.

“In the past we’ve had no system and our budget has been the same,” he said. “This will give the city staff a starting place every year from which to figure out how much to give us.”

Clawson said he plans to have the number of Ventura’s overnight tourists increase by this time next year.

“Call it confidence on our part, but we’re willing to live or die by the transient occupancy tax,” he said.

“When revenue goes down for the city, everybody has to tighten their belts,” he said. “But when revenue goes up, we’ll benefit.”