Lodging tax debate, dispute intensifies during testy meeting
Mounting tensions over the distribution of lodging tax dollars reached new heights Tuesday, during a contentious meeting where Ely council members rebuffed a request to throw former member Paul Kess off of the area’s lodging tax board.
A motion to dismiss Kess failed to take hold and instead an amendment to delay any action until January was approved 6-1, with council member Emily Roose opposed.
While council member Jerome Debeltz made the motion to remove Kess, he later spoke in opposition to his own motion. The potential removal was first suggested by Roose, who voiced displeasure that Kess went against a council directive to support a $315,000 allocation to the tourism bureau.
Instead, Kess voted in November with the rest of the lodging tax board to allocate about $210,000 to the bureau, two-thirds of what was requested, with a provision that additional funding would be considered at a later date.
That decision resulted in howls of protest, from some area lodging providers, tourism bureau contractors as well as Roose.
In advance of the meeting, Roose outlined her intention to remove Kess from the board and instead appoint a council member to that position.
“Constituents who voted for me and for us are not having their voices heard and they did not vote for Paul Kess,” said Roose.
Roose also took issue that Kess “did not vote as directed,” citing an October council vote to direct Kess to follow the tourism bureau’s request that the agency continue to get 95 percent of lodging tax proceeds, which according to most recent estimates equals about $315,000.
“We gave our direction and we were not listened to, and that is a major concern,” said Roose.
But others on the council voiced some confusion over the October vote, and said they have since changed their mind.
“I was confused about what that motion was,” said council member John Lahtonen. “I’m going to admit I made a mistake.”
Lahtonen added that he believed Kess “is doing a wonderful job” as the city’s representative on the lodging tax board and that he opposed efforts to remove him.
Council member Al Forsman offered a similar sentiment and said he made a mistake by backing the tourism bureau’s October request.
“I made a mistake in voting on something that was a major change in the way the city was approaching (the lodging tax), without having a chance to take it back and review it and look into it,” said Forsman. “I think Paul has stayed true to the direction we provided him.”
Mayor Heidi Omerza added that “I’ve always found that when people push against you the most, that’s when I have learned the most.”
Omerza pointed to disagreements with Kess over other issues during the time both served together on the council.
“It does not always behoove us to agree on everything,” said Omerza. “When someone is pushing back and does not agree, you step back and think why.”
Kess took to the podium both at the start of Tuesday’s meeting and during the debate over the motion to remove him.
He first reiterated concerns about the effectiveness of the tourism bureau’s spending as it relates to attracting visitors to the region and advocated a more “balanced approach” to using lodging tax proceeds, which in 2026 will include up to $53,000 for the Ely Chamber of Commerce to help staff the new trailhead building, as well as up to $20,000 to the city of Ely for utilities and maintenance of the new facility.
Tourism bureau representatives have argued those expenditures are not appropriate and perhaps illegal, but the lodging tax board has countered with a legal opinion that such spending is within the law.
The Ely Chamber of Commerce has also stepped into the fray, sending a letter to the city opposing the removal of Kess from the lodging tax board, and providing its own research showing lodging tax funds are being used elsewhere in the state to support visitor center operations as sought by the organization.
Kess also defended his move to seek out Omerza, clerk-treasurer Harold Langowski and an unidentified council member after the October vote.
He said all three indicated he could vote as he saw fit on lodging tax issues and was not bound by the council’s directive.
“I was concerned I could not support that motion,” said Kess. “I talked to the clerk. I talked to the mayor. I talked to a councilor. I did not go further because I did not want to violate the open meeting law.”
Kess added that he is representing the city on the lodging tax board “to the best of my ability and will continue to do so as long as you continue to have me as your representative.”
At times, confusion was prevalent at the council table.
After Debeltz moved to remove Kess, and Roose seconded the motion, council member Angela Campbell asked “would you amend this and we can discuss this in January/” That seemed to be in reference to the start of the new year, when Omerza makes recommendations for appointment to various boards and commissions.
Debeltz then took the unusual stance of speaking in opposition to his own motion.
“Paul was on the council with me and he was concerned a long time about the lodging tax board and spending,” said Debeltz. “Even though I made the motion, he’s been a good councilor and he’s worked hard.”
Debeltz added that “we can rectify this instead of throwing him down the road.”
Omerza also questioned the process, adding “you’re making this difficult when it comes to procedures because I am the one doing all of the committee assignments.”
The motion to dismiss Kess immediately was never acted upon, and instead the lone vote taken was to wait until January.
Lahtonen asked for clarification before he voted.
“There’s nothing saying he’s going to be taken off,” Lahtonen said.
Just minutes after the council vote, during the open forum portion of the meeting, the council heard from Whitney Woods, the tourism bureau’s marketing director.
“I want everybody to know how (the current funding for the tourism bureau) what’s happening now and how that’s going to manifest itself in the next year,” said Woods.
Woods said that “I can not make any plans for 2026 until you decide,” the tourism bureau’s funding for next year.
She outlined cuts in the tourism bureau’s budget related to video streaming and podcasts, and that print advertising could be cut in half.
Employee hours are also being cut as a result, as well as partnerships, conferences, community outreach and any public relations outside of news releases.
“I’m letting everybody know that if tourism does go down, there is a reason,” said Woods. “This is a huge amount that’s going to be cut.”
Woods was cut-off in mid-sentence by Omerza, who gaveled the presentation to a close after the allotted three minutes for the open forum. The meeting was promptly adjourned.
