Lee County Tourism Council to dissolve by end of 2023

DIXON — The Lee County Tourism Council is on target to dissolve by the end of the year, following the termination of an intergovernmental agreement that helped fund the not-for-profit.

“There’s been a small focus group that’s been working on making changes to still maintain a tourism program, albeit a completely reformatted tourism program,” Lee County Administrator Wendy Ryerson said during the July 20 Lee County Board meeting.

Since its formation in 1988, the Lee County Tourism Council has promoted the county’s lodgings; restaurants; attractions; conventions; expositions; and theatrical, sport and cultural activities. Its funding comes from a 5% hotel tax imposed countywide, except in municipalities that have their own hotel tax.

On Dec. 2, 2004, Dixon and Lee County entered an intergovernmental agreement whereby the Lee County Tourism Council and the city would split 98.5% of the hotel tax revenue 50-50; 1.5% of the revenue goes to the county treasurer for administration.

Dixon is withdrawing from that agreement, effective Nov. 30. The decision was finalized on May 1, when Dixon City Council members unanimously voted to terminate the intergovernmental agreement.

City officials first notified county officials of the change late last year, as previously reported. Lee County was notified again on May 10, following the City Council’s vote.

“They [Dixon] wish to collect their own tax,” Ryerson said. “So that ended up resulting, of course, in a significant reduction to the income that we saw from the hotel tax.”

The loss of Dixon-based hotel tax revenue will result in an estimated 73% decrease in funds, according to an ordinance Lee County Board unanimously approved on July 20.

The ordinance amends the Lee County Code to reflect changes from the ending of the intergovernmental agreement and dissolution of the Lee County Tourism Council. Come Dec. 1, Lee County will continue to impose a 5% hotel tax on all applicable persons and/or businesses outside of Dixon, according to the ordinance.

Lee County Board members also unanimously approved a memorandum of understanding between the board and the Lee County Tourism Council at the July 20 meeting. The memorandum lays the provisions of the dissolution process, Ryerson said.

Per the memorandum of understanding, all Lee County Tourism Council records and “other materials” will be delivered to the Lee County Board chairperson; all agencies will be notified of its dissolution; all funds, financial records and other property will become Lee County’s property; ownership of LeeCountyFun.com and LeeCountyTourism.com will be transferred to the Lee County Board; and the council’s executive director will be paid an additional $5,000 for the increase in duties related to the dissolution.

Not-for-profit vs. Nonprofit

The Lee County Tourism Council is a not-for-profit, which is similar to, but different from, a nonprofit.

A Feb. 6 article on the U.S. Chamber of Commerce’s website notes that there are four key differences between not-for-profits and nonprofits. It explains that,

• “Nonprofits are formed explicitly to benefit the public good; not-for-profits exist to fulfill an owner’s organizational objectives;
• “Nonprofits can have a separate legal entity; not-for-profits cannot have a separate legal entity;
• “Nonprofits run like a business and try to earn a profit, which does not support any single member; not-for-profits are considered ‘recreational organizations’ that do not operate with the business goal of earning revenue; and
• “Nonprofits may have employees who are paid, but their paychecks do not come through fundraising; not-for-profits are run by volunteers.”

Another key difference is that, although both types of organizations must apply for tax-exempt status from the U.S. Internal Revenue Service, donations by an individual to a not-for-profit are not tax deductible.