With the hotel tax grant fund running low, Lebanon County Commissioners changed the requirements for applicants seeking financial support for tourism-based events.
Commissioners approved to alter the Hotel Tax Grant Program guidelines to ensure recipients requesting funds are using those dollars to promote events that attract tourists to stay overnight in Lebanon County by a 2-1 vote at their biweekly meeting Thursday, Aug. 1. In other words, put “heads in beds.”
Another proposal that would have required grant application recipients to show “significant spending” was removed from the revised language in program guidelines. That was included to provide funding for one-day events that would generate significant revenue but not necessarily have led to overnight accommodations at county-based lodging facilities.
Commissioner Jo Ellen Litz voted against the measure while commissioners Robert Phillips and Mike Kuhn voted in favor of adopting the change.
Prior to the vote, county solicitor Matt Bugli provided a recap of his review of the state law that created the hotel tax program since he was asked by the commissioners at their July 18 meeting to ensure the county is in compliance.
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At that meeting, commissioners had tabled three funding requests totaling over $17,000 because their hotel tax grant fund totaled about $8,300. Following concerns about compliance that were raised by Litz at the July meeting, Bugli was asked to research if the county was following the law as established by Act 142 of 2000.
“I am happy to report we are fully compliant with what the county code requires,” said Bugli. “Just to provide some background for the board, Lebanon County and other counties have the ability to enact the hotel tax and collect money from hotels, Airbnbs, etc.”
Bugli noted that subsequent amendments in 2016 allowed counties to collect 5 instead of 3 percent from guests who stay overnight in Lebanon County and that recodification of the law via Act 14 of 2024 had no impact to counties in classes 3 through 8. Lebanon County is a fifth-class county since it has between 99,000 and 150,000 residents.
Bugli highlighted that the county collects the tax and distributes it to Visit Lebanon Valley (VLV), the local tourist agency, minus a 4 percent administrative fee kept by the county treasurer’s office. VLV then distributes 35 percent of the remaining 96 percent of funds to the Lebanon Valley Exposition Corp. (LVEC) and 10 percent to Lebanon County, keeping the balance of the proceeds.
VLV is required via County Ordinance 54 to use the funds for the purposes of “tourism, promotion and tourism development” while LVEC is charged to spend their funding for “tourism, convention promotion and tourism development.” The ordinance also states the county’s portion is designated for “maintaining special county tourism efforts.”
Bugli read a section of the county code that permits the collection of the hotel tax and noted that the verbiage in the law is also contained within the county’s guidelines, which were created following the law’s passage in 2000.
The passage in the law also iterated in the county’s eligibility requirements states that: “Events, programs, expenditures, or grants that are directly and substantially related to tourism or a business, convention, or meeting travel destination within the county, augment and do not compete with private sector tourism or travel efforts and improve and expand the county as as destination market as deemed necessary by the recognized tourist promotion bureau.”
Bugli added there are two subsections that contain the additional stipulations that “grants require a cash or in-kind local match of at least 25 percent” and that “grants may not be used for signage that promotes a specific private entity unless the signage also carries the logo of a recognized tourist promotion agency.”
Litz said she was opposed to commissioners having created percentage distribution rates because state law requires all funding to go to the tourist promotion agency (TPA), which in Lebanon County is Visit Lebanon Valley.
Bugli told commissioners that he reached out to York County and said they have a memorandum of understanding with their TPA that states where the funding goes, adding that 55 percent remains with the tourist agency and 45 percent goes to York County. In Monroe County, their procedures are similar to Lebanon County’s concerning how the program is administered, Bugli said.
“As far as money as when it goes from the TPA to other entities, this is something that other counties have also demonstrated – I don’t want to say control over – but that the county is collecting the money but the county is setting the parameters for how that money should be used by the TPA in accordance with the law,” Bugli replied to Litz.
Chairman Bob Phillips said that nowhere in the law does it show that Lebanon County is doing anything illegal, with Bugli adding that’s a point that he wants to make clear.
Phillips also reiterated that he is still interested in looking at the reallocation of the grant funding levels, which is a topic he highlighted on July 18. However, he said that wasn’t a conversation he was prepared to have at Thursday’s meeting.
County administrator Jamie Wolgemuth said County Ordinance 54 contains the percentages each agency receives and are not enumerated in the county’s hotel tax guidelines, adding the guidelines could be changed anytime commissioners wished to amend them.
“The changes to the guidelines are essentially to make a priority out of putting heads in beds, which, you know, generates the tax,” said Wolgemuth. “It makes a priority out of events that are being funded that generate overnight stays. It asks the applicant to provide some data or demonstrate that is going to be the case.”
Wolgemuth noted that some applicants do a great job of proving that they had overnight stays while others are “questionable as to whether they are generating overnight stays.”
“So you aren’t replenishing the fund by giving grants to those events, but again, that’s entirely up to you, the guidelines are yours,” he said. “You can waive the guidelines, which you have done from time to time and that’s perfectly allowable.”
Wolgemuth added that the maximum grant distribution amount is $5,000, and commissioners have the right to make changes to that figure as they wish.
In other county news, Holly Leahy, administrator for Mental Health/Intellectual Disabilities/Early Intervention, presented two contract amendments for fiscal years 2023-24 and 2024-25 for services provided “above and beyond” the original contracted service provider amounts.
Both sets of invoices are paid through the department’s current budget and allocations, meaning the contract changes will not require any additional spending of taxpayer dollars to cover those costs.
For FY 2023-24, there are 13 contract amendments – four for Mental Health, seven for Early Intervention and two for Intellectual Disabilities, totaling $71,633. For FY 2024-25, there are three contract amendments for Intellectual Disabilities, totaling $17,851.
All contract amendments for both fiscal years were unanimously approved by the commissioners.
Leahy also presented and commissioners unanimously approved the 70-page Lebanon County Human Services Plan for the 2024-25 fiscal year.
Leahy said this annual plan is the commonwealth’s way of obtaining data and reports for how several county agencies are spending block grant funds provided by the state throughout the year. She noted the block grant funding program includes her agency, the Lebanon County Commission on Drug and Alcohol Abuse and Lebanon County Community Action Partnership (LCCAP).
“We’ve been a block grant county since 2017 (and) the block grant brings us together to write the plan, but more importantly allows for great collaboration as they’re flexible funds which can be redistributed from one department that may be under budget to one that is running a deficit,” she said.
Leahy said the county’s annual allocation under the block grant funding program is over $4.74 million, with 61 percent of those funds going to MH, 28 percent to ID, 6 to the drug and alcohol commission and 5 percent to LCCAP.
“It’s also important to note that the block grant funding is only a percentage of the overall funding for each department as we receive federal, categorical and county funding,” she added.
Phillips noted that there were nine participants for what he said is a laborious task that put a lot of hours into creating the new annual plan. He noted that prior to the creation of the block grant program, remaining funds were returned. Now, however, this program is “a way to keep monies in Lebanon County and reallocate them.”
Leahy said it’s been a few years since the county has had any leftover funds because of the ability to transfer remaining monies to other agencies, especially to LCCAP to aid that agency with rental assistance since those costs are “ever increasing.”
“It’s been quite a gift to be able to transfer those funds and utilize them for what our community needs here in Lebanon,” she added.
The deadline to file the plan with the Pennsylvania Department of Human Services is Aug. 12.
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In other county business, the commissioners voted to:
- Approve a lien subordination agreement with WEPA for the organization’s property at 9 S. 9th St., Lebanon. The agreement allows M&T Bank to be the first lien holder and the county as second lien holder. Lebanon County had been first holder since it provided a $750,000 American Rescue Plan Act grant to WEPA for restoration of the former Elks building. It was noted the county’s lien prevented WEPA from borrowing funds, but this move now allows the workforce development organization to secure loans for additional renovation projects.
- Issue a proclamation recognizing August as Child Support Awareness month. The county’s domestic relations department will run a Child Support Awareness event on Friday, Aug. 9 from 10 a.m. to 2 p.m. at the rear of the county courthouse. The event is open to children and parents, and department employees will be available to answer questions. Family-friendly activities will be held and a bookbag giveaway will be part of the festivities.
- Renew the Medical Assistance Transportation Program’s participation grant and assurance of compliance agreement with the commonwealth.
- Make the following advisory board moves for several organizations: Lebanon County Drug and Alcohol reappointments: Tina Litz, criminal justice representative, Bonnie Loy, optional rep, Marilyn Nolte, human services professional. All three reappointments run through Feb. 19, 2027. Accept the resignation of Amy Custer from Children & Youth. Accept the resignation of John Prorubiansky with Area Agency on Aging and replace him with Faye Fox. That position runs through June 30, 2026.
- Grant a real estate tax exemption for a fully disabled veteran or the veteran’s family.
- Approve the minutes of the July 18 meeting and July 17 workshop, the treasurer’s report and various personnel transactions. As part of the treasurer’s report, the commissioners also passed a motion to collect municipal taxes for Mount Gretna Borough beginning on Jan. 1.
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