Manitoba town improperly used $90K from special levy on hotel rooms:ombudsman

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WINNIPEG — Manitoba’s ombudsman says The Pas improperly reallocated more than $90,000 from a special levy on hotel rooms, set aside to generate tourism in the town, for other purposes.

The ombudsman said in a release Tuesday it looked at the matter after receiving a November 2013 complaint from a hotel owner/operator that the money was not properly spent, and that the town failed to provide adequate notice to hoteliers of its plans to use the money.

The town said it took the position that what it did was permissible under The Municipal Act, saying that it had transferred the money in the town’s 2013 Financial Plan in accordance with the law and after giving proper notice.

Some of the money was directed to a fund to develop property next to the town’s airport and another portion to The Pas Rotary Club.

The ombudsman found that the town acted unfairly, unreasonably and contrary to its own bylaw and The Municipal Act.

The town enacted the accommodation tax bylaw on Oct. 19, 2011, which imposed a five per cent tax on all accommodation shorter than 60 days.

“The residents of the municipality are entitled to expect and trust that their elected government would respect and adhere to its own by-laws, which bylaws the municipality has the responsibility under provincial statute to impose and enforce,” the ombudsman said in its report.

“This is especially the case where the bylaws in question engage a municipal government’s power of taxation, a power the public expects and relies on being exercised in a fair, transparent, and lawful manner.”

The investigation also found that the hotel taxation law was passed, the Destination Marketing Committee never actually became a functioning body. The five-member committee held only one meeting Oct. 4, 2012, at which no official business was recorded. No expenditures were ever made by the committee, with the exception of $71.40 to cover the meal costs incurred at its only meeting. The chairman’s appointment expired on May 16, 2013, and he was not replaced.

The ombudsman recommended that the town return the tax revenue it used for other purposes to its Destination Marketing Fund.

The ombudsman said the town accepted the recommendation, and has developed a plan to implement it.

The provincial ombudsman investigates complaints from people who feel that they have been treated unfairly by government.