Budget cuts have the future of two agencies geared toward economic development hanging in the balance.
Spending in all the city’s departments has been cut back to meet the shrinking revenues, and those cuts have trickled down to the auxiliary agencies whose goal is to bring revenue into the city.
Main Street Gainesville, the mini-Chamber of Commerce for the city’s downtown businesses, and the Lake Lanier Convention and Visitors Bureau each receive a large portion of their funding from the city’s hotel/motel taxes.
Revenue from the tax relies on the number of people who stay in city hotels. Projections for next fiscal year’s revenue from the tax are about $50,000 lower than the $498,000 the city expects to collect by July.
Main Street’s $82,250 funding request from the city was trimmed to $71,000 when City Manager Kip Padgett presented the final draft of the budget to the City Council last week.
The visitors bureau’s $149,400 request was trimmed to $132,800.
The city’s funding for the agencies also came with stipulations this year that 75 percent of the two agencies’ cuts would have to come from the personal services side of their budgets — a line item reserved for employee salaries and benefits — and should not affect services the agencies provide.
Now, the directors of the two agencies say they’ll have to wait and see what their future will be and try to adjust.
Joe Burnett, executive director of Main Street, said the agency’s board will meet Wednesday. They’ll have to decide how to deal with cuts to the main funding source and deal with the requirement that 75 percent of that loss should be absorbed by personnel.
Burnett is the agency’s only employee, he said, and for the downtown organization to keep its “Main Street” brand, it has to keep one full-time employee.
“To be a Main Street city is a privilege, it’s not a right,” Burnett said. “It’s something you have to compete for. ... It’s a brand. We want to protect the brand.”
The downtown organization, which sponsors events like the Blue Sky concert series, Trick or Treat on the Square and Downtown by Candlelight, will likely have to look for funding from other sources. The agency’s second-largest funding source is membership fees paid by its approximately 110 members — many are mom and pop businesses that also have tough choices to make about where to put their revenue in a sluggish economy, Burnett said.
“That side of the budget is also experiencing problems,” Burnett said. “The business community is not in the greatest shape, either.”
Stacey Dickson, president of the Lake Lanier Convention and Visitors Bureau, said the cut in funding might just be the bureau’s incentive to bring more tourists to Gainesville.
She calls it a silver lining to the budget cloud.
“The harder we work to increase visitation to the area, the more (hotel/)motel tax is collected and our revenue is bound to go up,” Dickson said.
The bureau, which also receives funding from the Lake Lanier Islands Development Authority and proceeds from Hall County’s hotel/motel tax, is still waiting to hear how the economy will affect its other funding sources.
“We’re still in the middle of figuring out what we’re going to do all over the board this year,” Dickson said.
Trimming the bureau’s personal services budget could also be difficult.
The bureau has seven employees, four of which are full-time, to run its two locations in the county, Dickson said. Already, the bureau cut its paid interns from the budget, reduced hours for part-time employees and reduced benefits for full-time employees to make ends meet.
But Dickson said she will be prepared to accommodate whatever budget demands the city requires and still work to increase tourism in Hall County.
“We’re hustlers,” Dickson said. “We have to be.”