A testy City Council budget study session last week provided a glimpse into the dilemma Ocean Shores is facing going into the final month of 2017 budget deliberations.

The issue: Fewer dollars available in budget for tourism and marketing to be dispersed under direction by the city’s Lodging Tax Advisory Committee.

In fact, the committee was told that not only would there likely be less money available than last year — despite more requests for the funds — but the City Council ultimately would be the body to make the decision on how any of the remaining funds are dispersed, not the committee itself. The immovable object continues to be the cost of maintaining and operating the Ocean Shores Convention Center, with the city obligated to pay back $9.37 million in bonds the city refinanced in 2014.

Councilman John Lynn, also a member of the committee, explained the obligations of the city to pay off the debt on the Convention Center, which was to be a “regional center for Grays Harbor.” In agreement with Grays Harbor County and the Public Facility District formed to oversee construction, the city assumed the obligation to operate and maintain the facility.

Under that agreement, the city also is to use lodging tax proceeds to pay for operating costs and administrative expenses, Lynn told the council.

“We swore in that bond document that we would maintain this facility,” Lynn said.

The proposed city budget for next year includes $1.034 million for the Convention Center. There is $527,726 for Convention Center Operations, $75,000 for repairs and a maintenance reserve, $15,000 for the Visitors Information Center, and $416,000 in payback to interfund loans used in the past to pay for additional costs of marketing and advertising.

Under a summary outlined by Lynn, the revenue available next year is a total of $1.05 million, with $980,00 from hotel/motel tax revenue, and $71,845 left over in a beginning balance to start the year. After paying the Convention Center obligations, there would be just $17,125 left over for the LTAC to disburse.

“Here we are, we can’t fund anything else. There is no money,” Lynn said of a total of $1.4 million in other requests for use of the hotel/motel tax money.

Those requests include $200,000 from the Ocean Shores Marketing Group Co-Op for expanding its advertising campaign to television; $50,000 to fund a plan to move the Visitors Information Center to the Ocean Shores/North Beach Chamber office; a total of $90,000 to complete a proposed plan by a Convention Center consulting group from Texas to fully hire a director and begin a series of recommendations for operating the facility; or a number of smaller amounts for the Coastal Interpretive Center, a Toughman competition, a benefit wine tasting event, or even the State Route 109 promotional billboard.

Committee member Don Kajans of the Quinault Beach Resort and Casino called the funding scenario a “conundrum.” All of the money coming in goes into the Convention Center, with expenses nearly $80,000 more than last year, he said.

“We make about $50,000 less — or plan to — in gross revenue,” Kajans said. “I don’t know of any business that can do that, even government businesses. … We’re a long way from figuring this one out.”

Kajans said the reason the LTAC group came before the council budget session was to get some guidance on how to recommend a spending plan for the final 2017 budget, which must be completed by the end of the year.

“There isn’t enough money here and we’re just going down the same road every year,” Kajans said. “We don’t have any money for marketing or advertising, but clearly we need it. Our revenue is not going up.”

One potential solution has been the suggestion that local hotels form a Transportation Promotion Area, which could then by vote of members enact a bed tax on nightly stays to be used for marketing and advertising.

“It’s hard to get the hotels together to talk,” Kajans said.

“We really need to look at what we want this building to be, and how do we want to get it there,” he added about the Convention Center. Kajans suggested the Convention Center should be promoted more as a county-wide asset and facility.

Lynn noted that convention centers elsewhere in the state don’t make money either. “They are all users of funds. … What you try to do is operate the best you can to be as efficient as possible.”

“This Convention Center is not designed to be self-supporting. It’s designed to be a vehicle to bring people to town so they stay in hotels, to shop in the businesses, to eat in the restaurants, all of that,” Lynn said.

Finance Director Angela Folkers noted the Convention Center’s operating expenses have increased.

“There is more activity, there are more people working here, and that’s the big increase as you can see from 2016 to 2017 in the budget,” she said. The trend for hotel/motel tax revenue still is up for the year, however.

“We’re looking good there, but there is no guarantee what’s going to happen in these last couple of months,” Folkers said.

Mayor Crystal Dingler noted there was one error in the proposed budget request for the Convention Center which resulted in $27,000 for flatware and dishes being counted in two areas, which actually leaves the LTAC with about $34,000 to disperse after Convention Center obligations.

Council members seemed willing to try to find other places where money could be saved and used by the LTAC to fund some of the requests beyond Convention Center operations and expenses. Dingler noted last year the committee had about $77,400 to disburse, including $60,000 to the Co-Op marketing effort, “which I agree with everybody was money well spent.” Another $12,000 went to the Interpretive Center and $5,000 went to pay for the billboard on SR 109.

That money was only made available because the LTAC proposed lowering interfund loan repayments and putting less money into the repair and maintenance fund, Dingler said.

“We have that option again this year to make what money we can,” Dingler said. “I think it’s really, really important that we fund the Co-Op marketing, and that without it we are putting ourselves in a bad position.”

The committee will meet again at 8 a.m. this Thursday Nov. 10 at the Convention Center to discuss the dilemma.