2012, 10-17 minutes I1SV-FS2lUserslmcalhounOudgets120131Lodging Tax12012 10 17 minutes to LTAC meeting.docx
CITY OF SPOKANE VALLEY, WA
Lodging Tax Advisory Committee
Minutes of Meeting held October 17, 2012
2013 Award Year
The meeting was called to order at 8:45 am and in attendance was:
• Committee Members Jeff Fiman (by conference call), Peggy Doering, Doug Kelley, Lee
Cameron and Committee Chair- Brenda Grassel.
• City Staff comprised of Sarah Farr and Mark Calhoun.
• Applicant presenters included:
o Phil Champlin (HUB),
o Denise Pauling from Unlimited Marketing, Larry Davis and Stephanie Hughes
(Valleyfest),
o Jayne Singleton and Herman Meier (Spokane Valley Heritage Museum),
o Cheryl Kilday and Jeanna Hofmeister (Spokane Regional CVB —Visit Spokane),
o Rich Hartzell and Erin Gurtel (Spokane County Fair and Expo Center)
o Eric Sawyer (Spokane Regional Sports Commission)
Mark Calhoun then addressed the Committee and applicants on a number of issues including:
• A reminder that beginning in 2007 and running through June 30, 2013 the State Legislature
added more permissive language in regards to how hotel/motel tax could be used. The
expansion of uses included financing of operations, but beginning July 1, 2013 the tax can
again only be used for marketing purposes.
• A brief explanation related to the financial information included in the Committee packet. He
noted that the 2013 Budget projects $460,500 will be available for distribution in 2013, and
that the City Council, at their September 25, 2012 meeting by consensus decided to set
aside $80,000 for City directed activities with the remaining $380,500 available through this
grant process. The $80,000 earmarked by the City will be used for:
o $30,000 to partially offset CenterPlace advertising costs, and
o $50,000 for City directed marketing to raise Spokane Valley's tourism profile.
• He currently anticipates an ending fund balance in Fund #105— Hotel/Motel Tax Fund of
$118,432 which should be adequate to cover:
o Cash flow resulting from the one-month delay between when the tax is collected by a
hotel and when it is remitted to the City.
o The uncertainty of what actual revenues might be.
o The need for additional money should an unexpected opportunity arise during the year.
The committee then discussed the Council's decision to set money aside. Ms. Grassel's
recollection was that City Council members attended a conference in which signage was
brought up in discussion, and Council wanted to bring more people off of the freeway using
signage. She stated she suggested postponing putting that money aside until the Lodging Tax
Advisory Committee could be informed or consulted. She thought one councilmember agreed,
but it was decided to set it aside. Discussion ensued regarding the understanding that a mobile
application development is one possible use of the funds.
The Committee consensus was that they felt the City should have to apply for and make
presentations to the Committee for hotel/motel tax proceeds including both CenterPlace
advertising and other marketing efforts.
Page 1 of 4
11SV-FS21Users mcalhounleudgetsl2013kLodging Tax12012 10 17 minutes to LTAC meeting.docx
Applicant presentations were then made:
• 8:50 HUB Sports Center-Phil Champlin
• 9:00 Spokane Regional Sports Commission - Eric Sawyer
• 9:20 Spokane Valley Heritage Museum - Jayne Singleton and Herman Meier
• 9:40 Visit Spokane - Cheryl Kilday and Jeanna Hofmeister
• 10:25 Valleyfest - Denise Pauling, Larry Davis, Stephanie Hughes
o Change their request to $30,000 as they understand they won't receive $50,000.
• 11:25 Spokane County Fair and Expo Center- Rich Hartzell and Erin Gurtel
During applicant presentations the Committee asked questions and discussed various points.
One particular point Ms. Grassel asked to be included in the meeting minutes is that City of
Spokane lodging tax has historically been allocated with 50% going to Visit Spokane and 50%
going to the Spokane PFD. Beginning this year however the allocation is as follows:
• The first $100,000 collected is granted out, and the balance is allocated:
o 5% - Sports Commission
0 55% -Visit Spokane
o 45% - Spokane PFD
Following applicant presentations, deliberations ensued by Committee members and they
discussed:
• whether CenterPlace should be required to make a presentation
• that they feel Valleyfest is a community event that should be funded by the City but not with
lodging tax because the return on investment to the City comes from increased sales taxes
rather than lodging taxes
• whether they should reallocate the $80,000 set aside by the City Council at their September
25, 2012 meeting.
Ultimately, the majority of the Committee recommended that 2013 awards be made in two tiers:
• The first tier being the $380,500 that remained after the City Council's 9/25/2012 earmarking
of $80,000 for City directed purposes, and
• The second tier reflecting the Committee's opinion of how the $80,000 should be expended.
The Committee recommended the following awards be advanced to the City Council for
consideration:
Page 2 of 4
11SV-FS21Userslmcaihoun1Budgets120131Lodging Tax12012 10 17 minutes to LTAC meetingdocx
CITY OF SPOKANE VALLEY,WA 1 01 1 7/20 1 2 1
2013 Lodging Tax Funding Requests and Awards Recommended
by the Lodging Tax Advisory Committee (LTAC)
Recommended Awards
Amount Brenda Doug Peggy Lee Jeff
Applicant Requested Grasse) _ Kelley Doering Cameron Fiman Average
HUB Sports Center 50,000 10,500 20,000 25,000 20,000 30,000 21,100
Spokane County Fair&Expo Center 30,000 14,000 20,000 15,000 20,000 20,000 17,800
Spokane Regional Sports Commission 200,000 150,000 150,000 120,500 165,250 165,250 160,200
Spokane Valley Heritage Museum 12,000 2,000 0 5,000 0 0 1,400
Valleyfest 50,000 6,000 0 20,000 0 0 5,200
Visit Spokane(Spokane Regional CVB) 350,000 198,000 190,500 195,000 175,250 165,250 184,800
692,000 380,500 380,500 380,500 380,500 380,500 380,500
LTAC Suggested Reallocation of$80,000 Earmarked by City Council on 9125/2012
-Visit Spokane(staffing of State-line visitor center) , 30,000 30,000 0 30,000 30,000 24,000
-OOe+,elopment of mobile application i 20,000 20,000 0 20,000 20,000 16,000
-CenterPlace _ 10,000 10,000 0 10,000 10,000 8,000
-HUB 10,000 10,000 0 10,000 10,000 8,000
-Fair& Expo { 10,000 10,000 0 10,000 10,000 8,000
80,000 80,000 0 80,000. 80,000 64,000
460,500 460,500 380,500 460,500. 460,500 444,500
Following the grant award process Ms. Grassel brought up some other topics that were alluded
to in applicant presentations that she felt should be brought up to the City Council. These
included the City considering awarding multi-year contracts and that the Revised Code of
Washington (RCW) calls out specific agencies that provide tourism promotion services. She
offered to either bring these topics up with the Council or that the Committee can have a round
table discussion.
Ms. Grassel then moved that the Committee pursue looking at a multi-year contract with tourism
agencies and the motion was seconded by Mr. Kelley. Committee discussion ensued and the
motion was withdrawn by Ms. Grasse). Mr. Cameron commented that he is concerned with a
multi-year contract and wondered how this would be done. He stated that he doesn't want to
close the process to other applicants and suggested perhaps taking a portion of funds that are
relatively secure. He stated he would be cautious to put the Committee in a position where they
don't fulfill the spirit of the legislation, Discussion among the Committee and Cheryl Kilday and
Eric Sawyer ensued.
Ms. Grasse) withdrew her initial motion and then in a new motion moved that the Committee
would like to have Visit Spokane and the Sports Commission meet with the City Manager and
Mayor to discuss longer term contracts. Mr. Cameron seconded the motion and suggested
getting a legal opinion as to whether this was possible, He further stated that the difficult part
politically is that you have a lot of entities that come to table and that Council doesn't want to tell
them no, and so the Committee should consider having a baseline approach that keeps politics
out and looks at it as return on investment otherwise we won't have tax dollars. He also
Page 3 of 4
IISV-FS21UserslmcalhounlBudgets120131Lodging Tex12012 10 17 minutes to LTAC meeting.docx
suggested the City provide $50,000 of economic development funds for Valleyfest. After further
discussion the motion was brought to a vote with all in favor.
Ms. Kilday from Visit Spokane then addressed the Committee and noted that the City of
Spokane recently increased their lodging tax rate by 1.73%0. She stated they would like the City
of Spokane Valley Council to also consider increasing their tax as well to equalize the tax in the
communities and provide additional funding. Mr. Cameron stated that hoteliers don't support an
increase in the tax just to generate more money. He felt the City of Spokane Valley should
guard any additional tax proceeds until the Sports Commission completes a facilities study.
The Committee would like to come back and discuss the topic of increasing the lodging tax rate
in the future.
Meeting was adjourned at approximately 1:30pm.
Page 4 of 4