City votes to spend more money on tourism, economic development

Two economic development groups are poised to get more City and Borough of Juneau money in the next fiscal year after a pair of split votes.

Both Travel Juneau and Juneau Economic Development Council requested more funding during Wednesday night’s Finance Committee Meeting, and in both instances requests were approved, although one of Travel Juneau’s asks was moved to the pending budget line.

Travel Juneau requested $885,000 compared to $860,000 last year, plus $325,460 in marine passenger fee money for the downtown crossing guard program and $148,300 in marine passenger fee money for the visitor services program.

A 6-3 vote approved the requests. Mayor Beth Weldon and Assembly members Michelle Bonnet Hale, Mary Becker, Wade Bryson, Rob Edwardson and Carole Triem voted for approving the request. Assembly members Maria Gladziszewski, Alicia Hughes-Skandijs and Loren Jones voted against it.

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“The 885,000 that’s being requested is four-sevenths of the hotel bed tax that’s been collected,” Jones said. “It’s also $25,000 more than Travel Juneau was awarded last year.”

“I’m not willing at this point to vote for the additional $25,000,” he added.

An additional request for $120,000 in hotel bed tax money to support enhanced marketing is a pending decision, and Travel Juneau will get a chance May 8 to further explain how that money would be used.

During a short presentation for the board, Travel Juneau President and CEO Liz Perry shared some of Travel Juneau’s highlights.

These included 9,800 hotel room nights associated with meetings and conferences and had an estimated impact of $3.59 million for the city, which Perry said works out to be a return of $13.32 for every $1 invested. Additionally, Perry said 20,000 rooms are booked through 2023.

Data provided by Travel Juneau showed the average visitor who travels by plane to Juneau spends $704 per visit, ferry visitors spend $440 and those in town for meetings spend about $1,720. Those relatively lucrative meetings were the main focus of conversation.

There were questions about what sort of conferences Juneau is being marketed for and what markets Juneau is competing against.

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Perry said typically groups of 200 to 300 are Juneau’s “sweet spot” and the goal is to attract meetings and conferences from any locale that can reasonably get to Juneau, which means there is competition with Anchorage, Fairbanks and the Pacific Northwest.

“Any group that can afford to meet in Hawaii can easily afford to meet in Juneau, Alaska,” Perry said.

Jones expressed concerns that Travel Juneau only recoups about 8 percent of its budget in revenue annually and asked if that’s the norm for a tourism promotion revenues.

“We are well within the range of destination organization in terms of government grant money and revenue,” Perry said.

Bryson asked if it might be more fair to consider the $13.32 to $1 ratio and the 1,300 percent recovery.

Perry said she’d take it.

Ya down with JEDC

Juneau Economic Development Council’s request generated less discussion, but a closer 5-4 vote.

JEDC asked for $415,000 from the city — $325,000 in core funding and $90,000 in additional strategic investments.

The core funding figure is unchanged from fiscal year 2019, but the strategic investment number was a bump of $15,000.

Weldon moved to approve the requests, and it appeared the motion had passed without objection. However, that was rescinded after it became clear that Assembly members, including some on the phone, did not realize what had transpired.

“I’m not sure what I’m catching and what I’m not on the phone right now,” Edwardson said.

Edwardson, Hale, Hughes-Skandijs and Gladziszewski expressed concern about awarding more money, even to a worthy cause, amid state budget uncertainty. They voted against the request. Weldon, Becker, Jones, Triem and Bryson voted in favor of it.

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Hale and Edwardson said there are bound to be other asks with economic development impact, such as from the Childcare Task Force, that might be equally wise investments.

Weldon and Bryson both stumped for approving the requests in the name of economic development.

“Every penny we put in here is a future dollar we will see down the road,” Bryson said. “I am strongly in favor of the mayor’s motion.”

Water they waiting for

The Finance Committee also considered the possibility of water and waste water rate increases that would go into effect in January.

The Utility Advisory Board recommended a 4 percent increase to both water and waste water for each of the next five years, while City Manager Rorie Watt recommended a smaller 2 percent increase for the next five years.

The first increase in the manager’s recommendation would go into effect in January and the next increase would be set for July 2021 to soften the impact.

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Watt said he was reluctant to water down what the UAB suggested in his recommendation, but he ultimately did.

“I am worried about the state budget and the impact on the cost of living in Juneau,” Watt said. “It’s not that I think we don’t have aging infrastructure, we do. There really should be no scenario where we do not keep pace with inflation.”

Bryson asked if it would be possible to split the difference between the two recommendations.

“Since I’m torn, why not go down the middle?” Bryson asked.

Mike Vigue, director for the Public Works & Engineering Department, said that is a possibility.

“There’s no reason to say it can’t happen except you need enough votes to do that,” Vigue said.

However, no action was taken, and instead the topic will be revisited during a June meeting.

“We have a lot to consider along with that one,” Jones said. “I will schedule this for June 12, in which we can do our homework in between. Then we can have a full discussion then. Then we can decide what to move on to the Assembly.”