SHAWNEE — Nearly five months after unofficially cutting ties and filing lawsuits against each other, the city of Shawnee and its chamber of commerce have reconciled.
Monday night during its first meeting of 2013, the Shawnee City Commission approved a new contract between the city and the Greater Shawnee Area Chamber of Commerce.
The chamber's board of directors approved the same contract in late December.
The commission voted 6 to 1 to approve the contract. Only Ward 6 Commissioner Steve Smith voted against it.
“There's just too many things wrong there,” Smith said of the new contract. “I have to check out some other things before I offer more of a comment.”
Smith said he recently requested emails from the city of Shawnee and the chamber as he sought more information about the contract negotiations between the two entities.
“I got the ones from the city,” he said. “The chamber, well, they just never responded. I have a problem with that.”
At stake is the nearly $500,000 generated each year by the city of Shawnee's hotel occupancy surcharge.
Under the terms of the new contract, the chamber will continue to receive up to 99 percent of the hotel tax but will be subject to more oversight by the city.
One of the more prominent changes in the new operating agreement focuses on a 2009 land deal between the chamber and a power company, a transaction discussed at length in court filings made by a city attorney in August.
The chamber will have to deed the prime real estate off Interstate 40 over to the city. The land is intended to be the site of a visitors center for people traveling in and around Shawnee.
The new contract will not allow the chamber to charge rent to the Shawnee Convention & Visitors Bureau, which is administered and operated by the chamber itself.
In the past, the chamber had charged the visitors bureau about $8,000 each year in rent.
Other smaller changes, including a requirement that the chamber keep an inventory of such things as office supplies, are included in the contract.
A letter from Shawnee City Manager Brian McDougal to the city commission, in which he discusses the changes made to the contract, also includes a very specific caveat for an out-of-state consultant.
“(The) Chamber agrees to retain the services of Bill Geist to do an analysis of the operations, goals, and methods of governance of the CVB and to assist the City Officials, Chamber Staff, CVB Staff … with its management and governance of the CVB,” McDougal wrote in the letter, which was dated Jan. 3. “Payment for these services shall come from the proceeds of the Hotel Tax.”
Lawsuits to be dropped
Now that the new contract has been approved by the Shawnee City Commission, the lawsuit filed by the chamber will be dropped. A cross-petition, filed by the city days after the chamber's lawsuit, also will be dismissed.
Attorneys for the chamber filed a lawsuit in August after city officials attempted to sever ties between the two entities. At the time, the contract between the city and the chamber had been in place — with no issues — since 1994.
The lawsuit sought more time to untangle the complex working relationship between the chamber and the city. The chamber's attorney, Mike Clover, said the abruptness of the city's actions at the time were the impetus of the lawsuit.
“We think a reasonable notice to terminate this would be six months ... 90 days ... whatever the judge feels is appropriate with all the facts and everything else,” Clover said in August. “We never did once think that there would be a contract that would be around forever.”
Attorneys for the city fired back the next week, accusing the chamber of misusing taxpayer funds and questioning a $500,000 land purchase made more than three years ago.
The August 2009 land deal between the chamber and Canadian Valley Electric Cooperative Inc. is the focus of the city's countersuit.
Shawnee city attorney Mary Ann Karns wrote that the chamber paid $500,000 for the property, which is described as just more than two acres near Harrison Avenue and Interstate 40.
“In making this purchase and the payments using the hotel tax, (the chamber) deliberately and illegally diverted funds, thus breaching the Contract by failing to spend revenues as required,” Karns wrote. “(The chamber's) name, not the City's, is on the title.”
Karns said all of the money used to make the $200,000 down payment and monthly mortgage payments were funds raised by the city's hotel surcharge fee.
The city's countersuit states that using “taxpayer funds to purchase an asset for itself” is reason enough for the contract between the chamber and city to be terminated.
“Plaintiff's position is illegal,” Karns wrote. “The use of public money to purchase property for another is illegal.”