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2018, 08-21 minutes jt mtg MINUTES SPECIAL JOINT MEETING Spokane Valley City Council Spokane Valley Lodging Tax Advisory Committee Spokane Valley City Hall Council Chambers Spokane Valley, Washington August 21, 2018 Attendance: Councilmembers Staff Rod Higgins, Mayor Mark Calhoun, City Manager Pam Haley, Deputy Mayor Erik Lamb,Deputy City attorney Brandi Peetz, Councilmember Chelsie Taylor, Finance Director Linda Thompson, Councilmember Mike Stone,Parks &Recreation Director Ben Wick, Councilmember John Hohman, Deputy City Manager Sam Wood, Councilmember Cary Driskell, City Attorney Arne Woodard, Councilmember Chaz Bates,Economic Development Specialist Christine Bainbridge, City Clerk Lodging Tax Committee Members: Sam Wood, Chair Lee Cameron,Mirabeau Park Hotel Colleen Heinselman, Hampton Inn Suites Gregory Repetti, The Hub Absent: Scott Peterson, Spokane County Fair Board Mayor Higgins called the meeting to order at 5:00 p.m. and welcomed members of the Lodging Tax Advisory Committee (LTAC). ROLL CALL: City Clerk Bainbridge called the roll; all Councilmembers were present. After Ms. Taylor read the "Council Goals and Priorities for Use of the Initial 2% Lodging Tax,"the floor was opened for discussion. Mr. Cameron mentioned the 1.3%set-aside funds and Ms.Taylor replied that all these are captured through the budget process. Mr. Calhoun re-read goal#6 and said with that plus the $500,000, it is anticipated the fund will have slightly over $1.8 million by the end of 2018; said there have been about seven different occasions where those funds have been discussed, with the most recent discussion last week; said we had partnered with the County, Liberty Lake, and the Central Valley School District to look at ball fields, and at Plantes Ferry and other places and for other projects,which he said has all come to Council several times, and that during the July 10 Council meeting, Council narrowed that list of ten projects down to three: a sports plex as noted in the initial study, replacement of a structure at the fairgrounds, and the CenterPlace West Lawn improvements; he said we will work to gather more information on each of those three to bring before Council again at a future meeting. Discussion briefly turned to bonds and how much any particular bond amount would require in payments to service such a debt. Mr. Cameron asked if it is legal for the LTAC to set aside a fixed annual amount to be used for bonding. Deputy City Attorney Lamb stated that it would be acceptable, but he would like to research the process to confirm whether it needs to be an application since it is the LTAC that makes recommendations from the applications. Mr. Cameron said he was checking with the Attorney General and said the AG's office said we could do that provided it goes through the process. Councilmember Woodard Special Joint Council/LTAC Meeting 08-21-2018 Page 1 of 3 Approved by Council:09-11-2018 asked about a bond process and Mr. Lamb said procedurally we would apply for a bond toward a capital facility; then once the LTAC makes its recommendation and Council approves, then we could go forth on the bond process.Deputy City Attorney Lamb also stated this process would need to be confirmed with our bond counsel, and that likely the primary payment would be from LTAC revenues and the secondary from a city fund to cover any deficit. Mr. Calhoun agreed and said we would identify the LTAC as the primary source and if there weren't enough funds to make that payment, then the general fund would make up the difference. There was discussion about both of the LTAC funds, the 1.3% and the regular 2%, and of the available amount for the 2019 awards,and Finance Director Taylor mentioned that we also keep some residual funds for cash flow purposes. Councilmember Wick suggested setting aside some of those funds prior to advertising so applicants would know exactly how much would be in the "pot" but Deputy Mayor Haley said since the last several years were good economically speaking, that could change in the future. Mr. Cameron said that when the State Lodging Association went to the Attorney General, a set aside was challenged; said they are very serious about goal #2 [Council will emphasize the utilization of funds for capital expenditures to develop tourism destination facilities or venues within the City of Spokane Valley as a means of drawing additional visitors to the City (recognizing that this option is limited to facilities owned by a municipality or public facility district). Council would like to move in the direction of allocating a majority of lodging taxes toward this purpose] and in trying to create a real strong tourism presence for the valley for economic development; he said one would think that by now with two year's history, there would be an expectation that a set-aside would continue, that a portion of that could be bonded; said he knows the City ultimately has to make the decision, but he reminded Council that lodging has strongly purported and encouraged Council to focus on a large sports venue with that 1.3% set-aside; and that the plan and hope is that 1.3% would grow so it could be applied toward a large sports venue. Mr. Cameron said that sports is the largest tourism draw in the county; and that it is easier to build on something that already exists. Mr. Lamb spoke about the change in the law concerning LTAC awards and not like the set- aside for CenterPlace,there is no indication that this 1.3 would be an annual or ongoing/recurring set aside; and said to assure or to limit risk of any challenge, the cleanest way would be to have the City apply; that it might be best to look at it on a percentage basis; that LTAC can weigh-in and Council can approve or not. Mr. Calhoun noted that if the LTAC came forward and recommended for example, $250,000 for a bond payment, that would be a bit specific as we don't have a bond yet. Mr. Lamb said today's meeting is a special meeting so we can only take the action included in the notice, and it was noticed that the meeting is for discussion purposes. Councilmember Woodard asked if the LTAC has any disagreements or questions about the goals or priorities, and if not, then we move ahead with the normal process. Mr. Cameron said concerning the three areas of interest,he would like to recommend that we have one more joint meeting on this topic, and said the LTAC wants to help Council make the most informed decision possible; said it is critical to acquire property, and then we can do further due diligence on how it is funded in the future; based on the past study, we need to define space. Mr. Repetti mentioned the LTAC process,and said he feels under-informed at this point to talk about large things like a sportsplex, or replacement of facilities at fairgrounds;said he is not familiar with CenterPlace;said he feels these things require separate conversations about how the funding works; and again said he doesn't feel informed enough to have an adequate recommendation at this point. Mr. Calhoun stated that Council has discussed this seven times, that we need to carry these topics forward and we can let the LTAC know of upcoming conversations on this topic. Mr. Calhoun again stated that Council has narrowed that ten item list down to three; and last week's admin report should be given to members of the LTAC, and Ms. Taylor said she will get copies to members of the LTAC,which includes a copy of the last presentation made to Council,which includes the two studies,as well as all the financials.There was brief talk about the timing of having another meeting, but nothing concrete was decided. Councilmember Wood said he would like LTAC's input on those three projects, and Mayor Higgins mentioned we will have another meeting like this in the future, Special Joint Council/LTAC Meeting 08-21-2018 Page 2 of 3 Approved by Council:09-11-2018 with Mr. Calhoun adding that it would be good to get an admin report to the joint group so all can weigh- in at the same time. It was moved by Deputy Mayor Haley, seconded and unanimously agreed to adjourn. The meeting adjourned at 5:41 p.m. ATTEST: L.R. Higgins, U Christine Bainbridge, City Clerk _ Special Joint Council/LTAC Meeting 08-21-2018 Page 3 of 3 Approved by Council:09-11-2018