City looking to cut waste should start with wasteful NTCC

John Percy ‘mayn’t’ be a Maharaja, but, like the Maharajas of old, he doesn’t have to account to his subjects - the hoteliers of Niagara Falls - as to how he spends their bed tax money.

While the city of Niagara Falls is in disaster budget mode, there is one morsel of waste that could be cut.

The Niagara Tourism and Convention Corporation (NTCC).

By contract with the city of Niagara Falls, 80 percent of the hotel bed taxes collected from the city's 3,200 rooms, at 5 percent of every hotel room rented, goes to the NTCC. The NTCC gets about $1.2 million per year in bed taxes – money that could be used to fill budget holes.

Since 2004, the NTCC has gotten $8,845,528 in bed tax money, plus another $5 million in casino money. But what the NTCC does with the money is a closely guarded secret. Because the NTCC is a private corporation, its president, John Percy, claims he does not have to reveal its finances.

By contract with the city, the NTCC only has to produce a report that shows it returns 15-to-1 on the taxpayer's investment. To "prove" this, the NTCC employs a method that is far from scientific. Their report works like this: Over the course of a year, people contact the NTCC by phone (10 percent) or visit their internet site (90 percent). In 2010, the NTCC claims 1,004,295 visited their website or called their office.

The report assumes 46 percent of these -- or 461,976 people were “converted” and came to Niagara Falls, and further assumes, fantastically, that none of them would have come to Niagara Falls had they not visited the website or called on the phone. The NTCC provides no independent verification these people ever set foot in Niagara Falls. It is just an assumption.

Next, the NTCC assumes, that the 460,976 (assumed) people spend $445 each, or $205 million, or $84 for every dollar, taxpayers give NTCC in bed tax.

There are no names listed, or any documentation showing how much these fictional people spent.

"These findings are not just pulled out of the sky," Percy told the Council once. "They are factual and solid numbers." The fact is they are pulled out of the sky. It is decadent fiction that would pass muster only in Niagara Falls where leaders are dumb as bricks.

When it comes to measurable proof, the NTCC doesn’t have much to show. The report reveals that the NTCC booked only 6,321 room nights in 2011, fewer rooms than several private tour companies like Paradise Vacations and L and L Tours which both booked more hotel room nights, without requiring taxpayer money.

NTCC books about the same number of hotel rooms as Gene Carella, who has five hockey tournaments per year – who operates without a dime of public money and NTCC books about 4,000 rooms less than Gordon Stevens who operates his own website, www.niagarafallslive.com, which takes in zero taxpayer subsidies.

By the way the NTCC’s 6,431 rooms booked was no public service. They charged hotels 10 percent commission, on top of the five percent bed tax charged.

The NTCC also uses their “official information” center on Rainbow Blvd. to sell tours for various bus companies that feature the Maid of the Mist boat ride. They sold a meager 1,495 tours last year about five percent of what private bus tour companies sold – like Cataract Tours and Grey Line – companies that do not require taxpayer subsidies.

But the NTCC made money from it. The tour companies pay the NTCC 41 percent commission.

Since the NTCC refused to reveal how they spend the people’s money, the Niagara Falls Reporter did a little digging and got its hands on eight of the NTCC’s prior tax returns, including 2010. The returns show an organization run mainly by one man – Percy, who gets a salary of $120,682 (in 2010) plus another $96,000 in travel and lodging. And $18,000 in mileage.

One intriguing revelation contained in their tax returns is that the NTCC spends more on salaries and travel, than advertising.

Percy spent $679,000 on advertising and other media buys to promote the falls. He put out a free Visitors Guide at a cost of about $263,000.

The returns however show they picked up more than $532,000 from income, including advertising for the brochures and NTCC reaped $238,138 from commissions from tour sales and booking hotels on their website.

This paid for most of the advertising, allowing Percy and company to keep the public dollars for salaries and travel.

Percy took trips around the world. He has been to Delhi, Mumbai, London, Prague, Berlin, Geneva, Milan and other places he has chosen not to reveal. Records show he took more than 44 trips in one year alone.

One Continental Airlines flight for Percy to India cost $4,695.

When there, he might have stayed at a Crowne Plaza or Holiday Inn for $100 a night, in keeping with the caliber of hotel properties he's promoting in the falls. But he stayed at the 5-star Four Seasons Mumbai, at $634 per night.

Percy, a gourmand and connoisseur of wines and liqueurs, had dinner bills frequently in excess of $1,000.

Speaking of one of his $30,000 trips to India and of himself in the third person, Percy said, “This is not a lavish trip nor is this an exotic trip that John Percy is taking… This trip is a legitimate and worthwhile effort.” Adding that he was "treated like royalty" on the Indian subcontinent.

The contract with the NTCC and the city can be canceled with six months notice -- a little-known fact.
It is perhaps time to cancel and fill a gaping hole in our budget without harming the city one iota.