by Richard Uhlhorn
The Lake Chelan Chamber of Commerce has a new and revised contract that will be in effect until December, 2026. The contract was approved by four of the seven person council on Tuesday, April 8. Voting No, was councilman Brad Chitty; abstaining was Jon Higgins; and absent from the meeting was Terry Sanders.
Prior to voting on the motion to approve the new contract, councilmembers had a robust discussion concerning several aspects of the new contract.
“When this discussion started it was for a five-year extension and $700,000 per year,” said Chitty. “It is time to regroup. I propose to keep it at $700,000 for the next two years while we plan.”
At issue was Point 5 a 2 extending for the period through December 31, 2026 where the city would agree to pay the Chamber 20% of the average total city lodging tax collections from the two prior calendar years.
City Administrator Wade Ferris asked about the 20% concept. “What does that 20% look like. Higgins replied that it was a considerable amount of money that would be added to the $700,000 on a yearly basis.
Chitty stated that it was his understanding that the committee would review the $700,000. “I think transparency is important,” he said. Shari Dietrich stated that she supports Chitty’s proposal to keep it at $700,000.
However, Tim Hollingsworth said things had gotten more expensive. “Twenty percent of 2024 is $400,000. We need the resources to provide for people who come here,” he said. “I would like consensus on the board that instead of a minimum of $700,000 we make it a maximum of $750,000 in the two-year contract. That is a modest increase.”
“I understand what you are saying,” said Farris. “There is a reason why we spent so much time to put this together.”
Hollingsworth admitted that the council doesn’t know what the chamber is spending money on. “Right now we don’t know and are just second guessing.”
Mayor McCardle replied that the chamber has to report exactly what they are doing (in the new contract). She stated that the city needs to take a look at what is spent. However she said that for every dollar spent, the city gets back $2.5.
Hollingsworth added that it is lodging tax money. “We are not limited to how we spend it.” He then mentioned the Golf course and that the city needs to find a way to make an investment. “We did determine we could use lodging tax money for this.” Hollingsworth stated he would support the contract as it is.
He then suggested an amendment to the motion as follows: “I move to authorize the mayor to finalize and execute the LCCC Lodging Tax Fund Agreement subject to the following changes:
- 1.- Sec. 5 (c) Remove the words “not fall below” and replace with “not to exceed $750,000.
Final Agreement Change
5c. Minimum Funding Guarantee. Notwithstanding any other provision of this Agreement, the combined total reimbursement paid to the Chamber for Advertising and Promotion Services and Visitor Information Center Operations shall not exceed $750,000 in any Agreement Year during the term of this Agreement.
Chamber Reporting Requirements.
a. Annual Report: The Chamber shall submit a written annual budget and performance report to the City by January 15th of each calendar year for the upcoming year. The report shall include:
(1) Overall Performance Metrics: i. Lodging Tax collection growth, overall as well as Q1 and Q4; ii. Sales Tax growth, overall as well as Q1 and Q4.
(2) Traditional Marketing Performance Metrics, including but not limited to: i. PR impressions by target audience; ii. Social media engagement by platform iii. Website traffic (e.g., page views, unique visitors); iv. SEO key words and click-thru rates v. Social media engagement (e.g., followers, engagement).
b. Mid-Year Review: A mid-year discussion shall be held during the July Council Workshop of the current calendar year. The review shall include: (1) Review of year-to-date Lodging Tax collections and marketing performance as defined in section 4; (2) Adjustment to Q4 strategies if necessary.
c. Quarterly: during the April, July, October and January workshop, a Chamber representative will provide an update on marketing efforts to City Council.
d. Monthly Expenditure Reports: Payment shall be made following the receipt of a report from the Chamber showing the previous month’s expenditures. The report shall be submitted by the 5th business day of each month and include: (1) Date, vendor, check number, and purpose of each expense; Page 4 of 7 (2) Categorization of expense (e.g., Wages, Supplies & Materials, Marketing, Legal & Prof. Fees, Permits, Utilities, Insurance) (3) The City percentage of each expense. (4) Any other information reasonably requested of the Chamber by the City, provided that the Chamber is permitted adequate time to prepare the information requested.
Public input: John Olson, a past city council member told the council that the City of Chelan is falling behind in its infrastructure needs. He mentioned the burgeoning second home sales, the population, number of retirees and new developments like the Wiedner Apartment
Tourism:
Tourism in Chelan and around the world has become a double edged sword. Tourism has surpassed agriculture as the Valley’s number one economic driver.
In 2020, lodging tax receipts hit $1,357,013 which is the year that COVID hit and began to shut down air travel and other vacation locations. The pandemic drove lodging tax receipts up to S2,602,445 and $2,019.330 in 2021 and2022 respectively. Since then, receipts have remained above the $2 million mark.
With the increase in lodging tax receipts (more heads on beds) some unintended consequences arose with overcrowding at Chelan and other Valley public parks. Most notable were major issues of overcrowding at Lakeside Park which resulted in residents forming “Friends of Lakeside’ coalition to bring the overcrowding issue to the City Council.
This overcrowding issue didn’t just materialize from out- of-town visitors. It also included weekend issues wherein local users of Lakeside would show up at the park early in the morning, set up tent camps for large family gatherings that included loud music, barbeques and potentially illegal consumption of alcohol.
The Friends of Lakeside and the City worked together to change the city’s park rules that will hopefully eliminate most of these issues. To help, new signage, new parking kiosks and $100,000 contract to a company to help enforce those rules.
In 2024 there were over five million visitors to North Central Washington. Over 10 million visitor days were recorded with July and August being the busiest months.
“International travel to the United States has plummeted in recent months following President Donald Trump’s return to office, with global tourists increasingly avoiding the country due to fears of detentions, deportations, political rhetoric, and heightened border scrutiny,” Travel and Tour World wrote in a March report.
The steepest drop off in travel to the US comes from Canada. Border crossings fell by 12% in February and 18% in March. Tourism industry losses could exceed $90 billion dollars this year.. If the above reports are true the 2025 tourism season should be calmer with the advent of the current federal administration’s trade wars that will keep Canadians and other international travelers from visiting the Lake Chelan Valley.
All Things Lake Chelan 