Article By: Bernie O’Hare Special to the Bethlehem Press
During a presentation about hotel taxes at Northampton County Council’s Finance Committee meeting May 18, Budget Administrator Doran Hamann warned against awarding tourism grants before knowing a little more about how much revenue is coming in from the hotels this year.
DiscoverLV, which gets 68.75 percent of the hotel tax grant money, called Hamann after receiving its check for March.
“Where’s all our money?” asked President Mike Stershic.
“What do you mean? We sent you all we received,” was the answer.
Hamman told Stershic he’d look into the possibility that DiscoverLV was being shortchanged. He determined that revenues were up 1.6 percent in the first quarter. But during the same period in 2015, they were up 14 percent. And 2014’s first quarter revenues were up eight percent. Hamman said revenue drops after the first quarter.
“I’m just telling you what history has shown us. We’re only up 1.6 percent. If we drop four percent or five percent, we’re going to physically collect less hotel room rental tax revenue in 2016 than we did in 2015,” he said. Stershic said, “You’re right Doran. It’s basically stagnant out there.”
Hamman cautioned against spending “all the money that we think we’re gonna’ get because, if we don’t get it, we have to make some hard decisions about reducing the payouts to the individuals.” He warned that, if hotel tax revenues drop 11 percent this year, the county will have a problem.
Hamman predicted that a $1 million grant to Steelstacks and PBS-39 should be completely paid in September or October.
Department of Community and Economic Development Director Diane Donaher, prior to her abrupt resignation, had told council that there would be hotel tax money available for a second round of tourism grants this year. Hamann advised waiting to see whether revenues pick up.
Council President John Cusick said council should avoid pledging any additional money to outside groups until next year.
Hotel Bethlehem Managing Partner Bruce Haines agreed with Hamman’s assessment about hotel stays in the first quarter of this year. At the Hotel Bethlehem, they were up about one or two percent, but in the previous two years, the increases were much higher. Haines is unable to explain why the increases were so high during 2014 and 2015. But he disputed Hamman’s view that rentals will drop below the first quarter as the year goes on. According to Haines, the fourth quarter is actually the busiest time at hotels in the Mid-Atlantic region, while first quarters are usually stagnant.
In other business, Northampton County Council is adding personnel costs at Gracedale, the county nursing home. At its May 19 meeting, council accepted Executive John Brown’s recommendation to add two full-time and three part-time housekeepers for the afternoon shift. Currently, there are no housekeepers on the afternoon shift. Deputy Administrator Cathy Allen told council that the housekeepers would be used for bigger projects.
In addition, council accepted Brown’s recommendation to increase the LPN per diem rate from $24 to $28 per hour in order to be competitive. LPNs in the per diem pool are limited to 950 hours per year.
Cusick questioned the wisdom of adding staff at Gracedale when the unaudited first quarter report shows that the nursing home is already $1.7 million in the red. Controller Steve Barron countered that it is only because Gracedale is waiting for reimbursements from Medicare and Medicaid.
Cusick also complained about per diem nurses being unionized. A teacher in New Jersey, he notes substitute teachers in his district are never compelled to join a union. But Allen said the only reason the county was able to establish a per diem pool for LPNs is because AFSCME, the collective bargaining agent for most employees at Gracedale, agreed.