ELY — Councilor Emily Roose asked the council to replace Paul Kess as its representative on the Ely Area Lodging Tax Joint Powers Board on Tuesday after he declined to follow council direction on how lodging tax dollars should be allocated.
Roose requested that he be replaced with a city councilor, escalating a dispute over tourism funding that has divided the council and threatened cuts to tourism marketing programs.
“I think that it would be appropriate to replace Paul Kess on the Joint Powers Lodging Tax Board and appoint an Ely City Councilor in his place,” Roose said, noting that constituents who voted for council members expected their voices to be heard.
The motion follows weeks of controversy over Kess’s decision to vote against the council’s directive at a Nov. 5 Joint Powers Board meeting, a choice that has previously drawn criticism from tourism business owners.

What happened
On Oct. 7, the council voted to direct Kess to support giving the Ely Area Tourism Bureau 95 percent of lodging tax funds, its historical allocation. The directive also called for using reserve funds for one year to meet requests from the city and Chamber of Commerce while developing a longer-term funding structure.
At the Nov. 5 board meeting, however, Kess supported a compromise that gave all three requesting entities — the tourism bureau, city, and Chamber — two-thirds of their funding requests.
When later questioned about not following the council’s directive, Kess said he had consulted with the city clerk, mayor, and a councilor, all of whom told him he had discretion to vote as he saw fit.
Roose challenged this interpretation Tuesday, arguing that constituents did not give city staff or individual councilors the authority to override a council vote.
“I think that it’s important that our constituents who voted for us are not having their voices heard,” she said.

Kess asks for clarity
Returning to the council Tuesday, Kess defended his approach and called for the council to clarify whether it truly wants to return to the historical 95 percent allocation.
“There’s a sort of general concern overall that we are trying to get more specific information as to the results that they’re producing,” he said. “I think we look back, I … am concerned that despite the amounts of money that has been spent over the last few years, we are not seeing increasing results.”
Indeed, the city received a letter from business owner Dafne Caruso who stated that only 37.44 percent of the tourism board’s budget went to direct marketing. The rest went to wages, services, equipment rental, and sponsorship.
He said that when he was appointed to the board, he understood that it was to advocate for a more balanced approach to lodging tax spending.
“I asked if I was promoting the idea that we needed a more balanced approach for the use of the lodging tax monies,” Kess said. He said the compromise allocation reflected months of effort to create a more equitable distribution of funds.
“I’d like to ask the council to make a motion, maybe not tonight but at some point, that clarifies what your intent is and if you want me to continue to do a more balanced approach,” he said.
Kess also expressed disappointment that the discussion had become personal.
“I am disappointed that as a community, we continue those kinds of ad hominem attacks,” he said, adding that no one had contacted him directly to discuss concerns before publicly criticizing him.

Tourism bureau cutting programs
The funding dispute has already had consequences for the Ely Area Tourism Bureau. Marketing director Whitney Woods spoke to the council Tuesday to outline extensive cuts resulting from receiving roughly two-thirds of the bureau’s requested $315,000 budget.
The bureau has eliminated two contractor positions entirely, reduced hours for two others, and cut multiple marketing initiatives including video production, podcasts, and most print advertising.
“Right now, the only thing that actually is worth the small amount of money that we have is digital ad campaigns, and we will be doing that,” Woods said. Conferences, community outreach, and public relations beyond press releases have also been eliminated.
She said the uncertainty has made planning for 2026 nearly impossible.
“I cannot make any plans for 2026 until we decide on this. It has actually made it very hard for any sort of strategic planning whatsoever,” she said.
She warned the council: “I’m just letting everybody know that if tourism does go down, there is a reason for it. This is a huge amount that’s going to be cut.”

Council response split
Roose’s request to replace Kess faced immediate complications.
Mayor Heidi Omerza noted that the power to make committee appointments rested with her and that she would need to consult with the city attorney about whether such a change was within the council’s authority.
Councilor Al Forsman admitted he had been confused about what the Oct. 7 resolution meant and regretted voting for it.
“I made a mistake of voting on something that had a major change in the way the city was approaching things without having a chance to take it back and really look into it,” he said, adding that he believed Kess had stayed consistent with the direction the city had been moving.
Roose noted that even councilors who had changed their opinions about the Oct. 7 directive should be concerned that their representative didn’t follow it.
“He still went against what we directed him to do, and I think that discredits the fact that our constituents voted for us to represent them, right?”
The council ultimately voted 6-1 to amend the motion, postponing consideration of replacing Kess until January. The appointment to the Joint Powers Board is made annually. Roose dissented.

The broader debate
The controversy reflects a larger tension over how lodging tax dollars should be used. Recent requests from the city for up to $20,000 for trailhead building maintenance and from the Chamber of Commerce for up to $53,000 to staff that facility have prompted debate over whether operational expenses qualify as legitimate uses of lodging tax funds.
The Joint Powers Board’s decision to provide two-thirds funding to all requesting entities came after debate about appropriate uses of lodging tax dollars and whether funding visitor center operations and building maintenance qualified as legitimate expenditures under state law.