Economic Development / Visitor Services in upheaval after termination of director
by Bill Boyle
After the termination of a longtime employee, San Juan County is back to the drawing board with economic development efforts.
The employment contract of Charlie Delorme was recently terminated, two months after he was placed on paid administrative leave in January.
DeLorme has directed San Juan County economic development and visitor service efforts since 2006. The termination is not yet official, pending an appeals process. Because of privacy issues and employee rights, county officials would not discuss details of the termination decision.
Regardless, the upheaval in the office comes on the cusp of one of the most significant potential economic developments in recent years, the designation of Bears Ears National Monument.
If the new 1.35 million acre national monument moves ahead as designed, it is anticipated that there will be significant investment and development of tourism infrastructure throughout the county.
Over the past year, Commissioners have expressed growing concern about the economic development efforts in the county, outside of the tourism sector.
The common thread that Commissioners have expressed is a desire to focus on economic development, with a particular focus on job creation.
They point out that job creation in the tourism sector will be a piece of the economic development, but not an exclusive focus.
Over the past ten years, DeLorme has overseen significant growth in tourism revenues to county coffers and the corresponding growth to tourism-related businesses in the county.
In 2006, San Juan County collected $267,499 in Transient Room Tax (TRT) from visitors to the county. In the subsequent years, the TRT revenues have grown significantly and totaled nearly $1 million in 2016.
The revenue growth is due, in large part, to significant growth in visitation to San Juan County over that time frame.
It is also due to an increase in the TRT rate from three percent to 4.25 percent, and the implementation of an additional tax for customers in area restaurants (TRCC).
The growth has accelerated in recent years, with TRT collections increasing by 24.5 percent in 2016 alone. The county budget estimates that TRT and TRCC collections will easily exceed $1 million in 2017.
As the TRT and TRCC collections grew, so did the budget for the travel promotion office. The collected taxes are designated to promote additional visitation and the development of tourism infrastructure.
As a result, growth in collections serves to strengthen additional promotional efforts.
In recent years, nearly ten percent of the tourism services budget has gone to attending travel and trade shows around the country, and in some cases, around the world.
Tourism officials state that the trade show visits are an important reason for the increase in visitation to the county. Officials in other offices have questioned if attending the shows is an appropriate use of funds.
In 2017, the county budget includes 18 trade shows, with a budget of $76,000. This includes shows in Chicago, Asia, France, Australia, Dallas, Calgary, Berlin, Vancouver, Toronto, Sacramento, Sandy, UT and Quartzite, AZ.
Members of the local visitor services staff often partner with industry and state officials to share costs for the trade shows.
DeLorme has earned a number of honors for his work. He is an International Travel Trade Delegate for Utah and has served on the Utah Governor’s Rural Partnership Board. Most recently, DeLorme was named a Champion of International Business by the World Trade Center – Utah.
However, even as the awards have piled up and visitation and revenues have grown dramatically, so has controversy over the tourism office.
In recent years, a portion of the tourism funds have been funneled directly to area communities. Of the approximate $600,000 annual budget to visitor services in 2016, $140,000 was split between the cities of Monticello and Blanding for their use to promote visitation.
Officials in the northern communities expressed concern that the growth in tourism was in southern areas of the county. As a result, the funds were designated specifically for the northern communities.
In addition, portions of the collections were directed to other departments in the county. While the majority of TRT and TRCC revenues go to the visitor service budget, other revenues go to county departments that are impacted by the visitation.
In 2016, these allocated expenditures to other departments totaled more than $225,000. This includes $146,001 to the San Juan County Sheriff’s office, which represents approximately 12 percent of the total Sheriff’s budget.
Other departments receiving TRT and TRCC funds include $814 to the county airplane (five percent of the airplane budget), $3,984 to search and rescue (50 percent of the total budget), $40,546 to ambulance services (eight percent of the budget), and $35,178 to the landfill (ten percent of the budget).
Officials say the county has yet to determine how the new economic development/tourism promotion effort will be organized.
Twice in the past year, the county announced that it was seeking volunteers for a new economic development advisory committee. However, the committee has not been created.
County officials state that creation of the advisory committee will likely be delayed until a new employee (or employees) is hired to lead the effort.
In the past year, Commissioners considered two positions in the department, with a new employee focusing on economic development and DeLorme focusing on tourism.
However, if DeLorme is no longer with the county, Commissioners may reconsider the entire economic development effort.
San Juan County has had a tourism development advisory committee for many years. That board currently includes Ronnie Baird, Cindy Tumeh, Derryl Jack, Jeremy Redd, Ty Bailey, Jerry Murdock, Craig Simpson, and Harold Lyman.
The growth in tourism revenues continues to be one of the few bright spots in the San Juan County budget, which has seen a precipitous decline in the value of traditional centrally-assessed properties over the past several years.
In fact, the San Juan County General Fund has had a budgeted deficit over the past two years. In the 2016 budget, budgeted expenditures exceeded revenues by $741,000. For the current year, the budgeted deficit is $904,000.
At the same time, it must be pointed out that the total county fund balance exceeded $39 million in January, 2017. So even though the General Fund operates at a deficit, overall fund balances held by the county are significant.
Budgetary challenges to the county General Fund include a continuing deficit in the San Juan County Public Health Department. The new department was created two years ago, when San Juan County canceled its membership in the Southeast Utah District Health Department (SEUDHD).
The Public Health Department has a $105,000 budget deficit in the current year, based on $563,000 in expenditures and $458,000 in revenues.
Before the Public Health Department was created, San Juan County annually contributed $70,000 to SEUDHD. In recent years, the health fund cash balance has dropped from nearly $500,000 to a deficit balance.
The San Juan County General Fund is also stretched as the result of the legal costs related to fighting several lawsuits.
Legal fees totaled $113,837 in 2014. They more than doubled in 2015 to $260,448. In 2016, costs more than tripled, totaling $785,914 for the year.
Lawsuits include challenges in federal court to election operations, including mail-only ballots, and the district boundaries for commissioner and school board races.
Other legal costs include challenges to RS 2477 laws on public land, and a lawsuit regarding the Latigo Wind Farm.
County officials state the vast majority of legal costs are related to the voting lawsuits in federal court.
Other legal-related expenses are being paid by other budgets. In 2016, Commissioners contracted with Stillwater Consulting Group to assemble a legal analysis of the proposed Bears Ears National Monument. The analysis cost about $53,000 and was paid directly from a Commission account.
At the current time, the county is contracting with the Davillier Law Group for services related to Bears Ears National Monument and Recapture Canyon.