Edgerton, Fulton, Albion form tourism zone, two commissioners appointed

{child_byline}By Kim McDarison milton@hngnews.com

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Three municipalities, Edgerton, Fulton and Albion, have recently joined together to form the Edgerton Tourism Zone. Two of the three, Edgerton and Fulton, have named representatives to the zone’s governing Room Tax Tourism Commission.

The City of Edgerton Common Council has appointed resident and former Edgerton city council member Mark Wellnitz and the Town of Fulton Board of Supervisors has appointed Town of Fulton Supervisor Andy Walton. A third municipality, the town of Albion, will be appointing its representative in November, Town of Albion Board of Supervisors Chairman Bob Venske said.

The tourism commission was formed through a contractual agreement between the three municipalities signed Oct. 1.

As stipulated within state statutes, commissioners will serve for one-year terms.

Money to develop tourism within the zone will come through the adoption of a new 5% room tax, which will be collected within the three municipalities by the municipal clerks on a quarterly basis and passed onto the commission. Collection of room tax within the zone will begin on Jan. 1.

Three hotels within the zone will be responsible for paying room tax. They are Coachman’s Lodge and Resort, 984 County Road A, Edgerton; Quality Inn, 11102 Goede Road, Newville, an unincorporated area within Fulton and Milton, and Towne Edge Motel, 1104 N. Main St, in Albion.

An estimated $88,050 is expected in room tax revenues in 2020, according to materials prepared by Edgerton community volunteer and tourism zone advocate Jim Kapellen. The information was shared with the two town boards and Edgerton city council by Kapellen in May.

Kapellen told the Milton Courier that he, and another volunteer, Vicki Morris, also of Edgerton, began promoting the idea two years ago after he, Morris, and Edgerton City Administrator Ramona Flanigan formed an informal committee to explore forming a tourism zone. Several years earlier, Kapellen said, the idea of collecting room tax was floated within the communities, but was met with opposition from one of the area’s lodging providers and then lost momentum.

Today, Kapellen said, that hotel has a different owner, and while that owner, too, had some concerns, he also owns several hotels in communities around Rock County and was familiar with paying room tax.

State statutes govern how tourism commissions are formed, Kapellen said. Statutes stipulate that each municipality within a tourism zone must have representation on the commission commensurate with the amount of annual room taxes collected within the zone. In zones where annual room taxes collected are less than $300,000, each municipality shall have one member on the commission. Once a zone is established and its municipal representatives appointed, the group meets and selects a chairman, vice chairman and secretary. The chairman then must appoint two members from within the hotel and motel industry, with each serving a one-year term on the commission. Appointed commissioners may be reappointed, according to the statute.

The commission must also choose a “tourism entity,” defined within statutes as an organization that must have obtained official classification by the IRS as a nonprofit by Jan. 1, 2015. Governmental agencies do not fit the classification, Kapellen said.

Also stipulated in statutes, the nonprofit must spend at least 51% of its revenue to promote and develop tourism.

The Edgerton Area Chamber of Commerce has been recommended as a potential tourism entity for the Edgerton Tourism Zone, Kapellen said, but it will not officially hold the title until after the commission meets and makes that decision. A meeting time and place will be determined after Albion appoints its commissioner, Kapellen said.

As stipulated in the statute, the commission must contract with a tourism entity to obtain staff, support services and assistance in the development and implementation of programs to bring visitors to the zone.

As shared with municipalities by Kapellen within his presentations, of the 5% room tax collected within the zone, 70%, as outlined in state statutes, must go to the tourism entity.

According to Kapellen, statutes further note that 30% of the monies collected in room tax can be used by the participating municipalities as general purpose revenue, meaning it is not earmarked for tourism.

The municipalities within the Edgerton Tourism Zone also approved returning 2% of revenues collected as part of their 30% share to the lodging operators within the zone to help offset the cost of booking fees, which are collected by third-party agents such as Hotel.com.

According to statutes, the commission must:

• report to participating municipalities annually how the room tax money was spent.

• not use any of the room tax revenue to construct or develop a lodging facility.

• monitor the collection of room tax.

• report to the municipality any delinquencies or inaccuracies in tax due.

The commission is also responsible for developing a process for hiring a tourism director, and policies about how the commission will operate.

During presentations given in May, Kapellen defined a tourism zone as a geographical area where a room tax is collected on overnight lodgings. The tax revenue is then used to promote tourism in the surrounding area.

Next steps, he said, would be for each municipality to adopt an ordinance to create the tourism zone.

In September, the Edgerton city council and the Fulton town board adopted an ordinance to create a room tax district and impose a room tax. The Albion town board passed the ordinance in October.

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