Special Report: Hotel Transportation Tax Heist?

Monday, June 25, 2012

Augusta, GA

By Lori Davis

On May 18, 2012, Augusta Today member Dean Klopotic submitted a Georgia Open Records Act Request to the City of Augusta for an accounting of the $1 ‘bed tax’, or hotel transportation tax, which was enacted in 2008 to fund the capital and operating budgets for the TEE Center, plus to fund the Laney Walker Improvement project. The City Law Department responded with accounting reports showing the requested information.

The Tax was enacted via Ordinance Number 7034  on February 19, 2008. Collections began March 1, 2008. The existing hotel tax comes under the framework of  Ordinance 7209.

Subsequent to the enactment of this ordinance, on September 16, 2008 Ordinance 7083 was passed and executed. This ordinance added Code Section 2-2-33.7 which reads:

Funds were collected and distributed to the Laney Walker Redevelopment Projects for the Fiscal Years 2008 through 2010, with the balance allocated to the Augusta Transportation Department. However, in Fiscal Year 2011, $350,000 was transferred to the TEE Center, Department 297061910, Account #5721110. Why? And who decided to blatantly go against the ordinance? If transportation suddenly stopped getting their allotment, did anyone in transportation question this? Did any of the money ever go for transportation?

The Ordinance does not allow the money to be transferred because the parcel that the Manager and TEE Center Partner, Augusta Riverfront, LLC owns under the TEE Center (parcel #037-3-047-00-0)  had not been deeded over to the city at the time that the funds were transferred for TEE Center use.

*see map aerial of parcel (yellow border) below*

In other words, the money should have continued to go to transportation even until this very day. This expenditure looks to me to have been a misappropriation of funds for a purpose other than allowed by Augusta’s governing ordinances.

Another issue is that  Ordinance Number 7034  allows the $350,000 to be spent on operation and maintenance costs for the Tee, while the tentative agreements with Augusta Riverfront, LLC, Manager of the TEE Center, say that $100,000 is to go to the TEE Center Capital Budget, while the remaining $250,000 goes to operations and maintenance.

Is our City government a renegade operation who ignores its own ordinances?

So let’s summarize what all happened here. In order to fund the Laney-Walker redevelopment project with the hotel-motel tax it had to be linked to promoting tourism. That was done by linking the $1 hotel bed tax to transit (which is considered a tourism related service). Between 2008 and 2010, Augusta Public Transit was receiving its $350,000 per year from the $1 per night hotel/motel tax. However, those payments ceased in 2011 and were diverted to the TEE Center. But under the guidelines of the ordinance that established the new hotel/motel tax, the TEE Center was not eligible to receive any of these funds in 2011 because Augusta Riverfront, LLC had not met key stipulations of the agreement, such as deeding over a parcel under the TEE center to the city. Augusta Public Transit should still be receiving that $350,000 per year from the $1 per night hotel bed tax that was diverted to TEE operations.

To make matters worse, we discovered that the $350,000 diverted from transit to the TEE Center all went towards marketing. The irony in all of this is that all of the other hotels in Richmond County are paying into this new hotel-motel tax which is essentially going to market a competitor hotel, the Augusta Riverfront, LLC owned Marriott, which has exclusive use of the TEE Center. The marketing program paid for by the Augusta CVB for the TEE Center with this $350,000 conspicuously mentions the convenience of the Marriott hotel being attached to the facility but gives short shrift to other Augusta hotels such as the Ramada Plaza, which is just a few blocks away. The fact of the matter is, none of this money should have gone to the TEE Center in 2011 nor currently, and Ordinance Number 7034 and the tentative agreements between the city and Augusta Riverfront, LLC conflict with one another.

Recently, I went on a tour of the TEE Center as provided by the Convention and Visitors Bureau. I asked the question,”How will convention attendees get here from other area hotels? Will there be a shuttle service provided?” The answer I received was a quick, “No. That simply is too costly.“

What if the money that should have been going to transportation all of this time had still been going to transportation as the ordinance had stipulated? Is any of this fair to the other hotel owners in Augusta who are being taxed to subsidize their competition? Why did the TEE Center receive $350,000 from the hotel/motel tax in 2011 when this was clearly a violation of the ordinance that established the tax? Who authorized this diversion of funds from the transit department?

Just imagine how much $350,000 could have helped improve the transit system. And shouldn’t some of it go towards providing transportation from the other area hotels to this new publicly funded convention center that they helped pay for via the hotel-motel tax? Why does everything go towards the benefit of Augusta Riverfront, LLC? These may be some questions other area hoteliers may want to start asking. Stay tuned for updates.**

LD

Below are the public documents cited in this article: