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HomeMy WebLinkAboutMinutes 08/02/2001 CALL TO ORDER: ROLL CALL: Approval of Minutes Review 2001 Revenues & Expenditures Status of Multi-Year Marketing Program LODGING TAX ADVISORY COMMITTEE Port Angeles, Washington August 2, 2001 Councilman Wiggins called the meeting of the Lodging Tax Advisory Committee to order at 2:00 p.m. Members Present: Councilman Wiggins, Councilman Campbell, Zoe Bay ton, John Brewer, Carol Griffith, Patty Hannah, Bob Harbick, Steve Oliver, and Bill Rinehart. Members Absent: Jim Haguewood and Jack Harmon. Staff Present: Manager Quinn, Finance Director Ziomkowski, Economic Development Director Smith, Clerk Upton, and Event Coordinator Estes. Others Present: Rick Hert, Russ Veenema, and Michael Leuhers. Approval of Minutes: Steve Oliver moved to approve the minutes of the March 20, 2001, meeting. It was noted there were no minutes from the May 24, 2001, meeting due to lack of a quorum. The motion was seconded by Zoe Bay ton. Rick Hert asked that the spelling of his last name be corrected in the minutes. A vote was taken on the motion, which carried unanimously. Review 200/ Revenues & Expenditures: Finance Director Ziomkowski advised the group that the year started out promising, something that has not held true during the last couple of months. Overall, there is still a need to collect 66% of the taxes; however, she was not particularly concerned in that the tax collection the second half of the year is typically higher. Expenses year to date are under control, and the fund balance is improved by virtue of last year's revenues. Discussion was held by the group as to whether business had been good the first portion of the year. Varied comments were submitted to the extent that business had been average to below normal. Michael Leuhers indicated his business for the second quarter was tough, and Finance Director Ziomkowski indicated this would correspond with the lower amount of sales tax collected in comparison to last year. Rick Hert noted that tax revenues were up 6%, and he inquired as to whether rates had been increased or business improved. Carol Griffith and Michael Leuhers indicated they had increased rates. Status of Multi-Year Marketing Program: Russ Veenema, Chamber of Commerce Executive Director, distributed an informational sheet on the multi-year marketing effort conducted jointly by the Chamber/VCB. Mr. Veenema reported that, midway through the year, the Chamber of Commerce stepped up and took over the monitoring and management of the marketing fmances, etc. He reviewed the information provided, which included a listing of publications used for the placement of ads, the cost breakdown of the marketing endeavor, as well as a listing of leads generated by the ads in the different publications. Mr. Veenema reported there was a 178% increase in the number of planners sent out. -1- LQDGlNG TAX ADVISORY COMMITTEE August 2, 2001 Status of Multi- Year Marketing Program (Conrd) He indicated that, basically, the marketing program is over for the year. However, he met with Finance Director Ziomkowski to discuss the status of lodging tax revenues and determine if there would be any money left that could be used for marketing. He noted there is much to be done in terms of reorganizing the marketing effort. Any further funding would be better spent in a redirected spring campaign. Discussion followed regarding marketing funds left in 2001, which approximates $39,000. Tim Smith reviewed the fact the end of the marketing contract term is approaching, and he reminded the group that the contract had been extended for six months. A question was asked whether Copeland had been paid for its work thus far, and Mr. Veenema indicated they were paid a percentage of the value of the ads. In addition, conunents were offered concerning the web page, and Mr. Veenema indicated the Chamber is committed to making the web page even better. Conference Center Request for Proposals Conference Center Request for Proposals: Tim Smith submitted a status report concerning the City's RFP for a Conference Center. Ads were placed locally, regionally, and nationally and, thus far, there have been 18 requests for the packet. Tim felt that approximately one-third of those requests were from frrms probably incapable of submitting proposals themselves because they may be architectural or engineering fIrms without hotel or conference center partners. However, the balance of the requests appeared to be from bona fide frrms, something which he found to be very encouraging. To date, no proposals have been submitted. August 15 was set as the closing date but, because of the placement of an ad in a hotel publication, he will likely extend the deadline for submission of proposals. Mr. Smith reviewed the fact that the City has entered into an agreement with the Port of Port Angeles allowing the City to market the Oak Street property. As relates to the RFP, he will notify all interested parties of the availability of this property for the project. The ensuing discussion centered around how the response thus far compares to previous RFPs, one of which only resulted in two responses. Discussion was also held on the suggestion for a land swap with the DNR so that the City could own the waterfront side at Oak Street. The Port owns the street side at Oak Street. Because of this potential, someone may submit a proposal based on ownership of the land as opposed to a lease arrangement. Mr. Smith further discussed joint marketing of the land, as well as an appraisal which will be forthcoming. Rick Hert indicated that a 72% occupancy is the national figure used when more development comes about. Mr. Smith sururnarized the data included in the RFP, which included a breakdown of the Downtown Forward plan, the growth experienced in the downtown area in terms of public/private investment, the opening of new business, and the increase in employees. All of this positive data would suggest the possibility of soliciting more interest on the part of a developer. Discussion followed concerning the possibility that a convention center may not add to the hotel beds in Port Angeles; however, it would appear there will be some interest generated by developers to increase the number of beds in the area. Tim Smith discussed the potential for local hotel owners to work on a joint proposal for a convention center. Funding Commitment to Marketing and Conference Center Funding Commitment to Marketing and Conference Center: Councilman Wiggins referred the group to the meeting packet, which included past minutes of March 2 and 24, 2000, on the matter of commitments of lodging tax funds to a convention center. Additionally, he directed attention to a letter sent to the committee from Jim Haguewood, who could not be present at this meeting. Mr. Haguewood's letter spoke in support of committing to the process currently underway with the conference center RFP and the associated commitment of $100,000 per year from lodging tax revenues. In addition, his letter suggested it to be premature to commence a debate of funding levels for the marketing program without a review of the entire budget. - 2- LODGING TAX ADVISORY COMMITTEE August 2, 2001 Funding Commitment to Marketing and Conference Center (Cont'd) Chamber of Commerce Proposal Manager Quinn addressed the group and discussed the $100,000 per year commitment. He indicated 2001 was the first year this money was set aside, and the City was able to take it out of the reserve balance without hurting any funded programs this year. It was realized, however, that in future years some kind of cutback would have to be made in order to fund the commitment to the convention center. Therefore, he proposed that the marketing campaign be reduced by $75,000 and that the typical allocation to Parks & Recreation not be funded out of lodging taxes. He offered to fund that activity out of the City's General Fund. Manager Quinn felt it appropriate for the VCB to receive its funding from the County's lodging tax funds. In addition, he noted his goal was to assure that no program would have to suffer because of the convention center funding, especially since the Parks & Recreation efforts have proven to put heads in beds. Another option for consideration would be to find an alternative way of dealing with the debt service on the Vem Burton Center. Councilman Wiggins cautioned that this proposal has not yet passed the budget process. Rick Hert suggested that, considering the fact $100,000 has already been set aside, no more be added to the commitment until after the time the RFPs have been received and a decision made as to how to proceed. However, other committee members countered this would be contrary to the agreement previously made. It was understood that $100,000 would be set aside every year, something which Finance Director Ziomkowski indicated would be helpful as leverage for bonding purposes. Lengthy debate followed on whether funding should continue at its present level for marketing purposes or if the $100,000 commitment should go forward. Various opinions were expressed in that marketing is badly needed, and the associated funding levels should not be diminished. It was also stated that funding that could be used for marketing should not go toward a $100,000 commitment for a convention center. It was, however, then pointed out that it would be fruitless to discuss any change at all until the RFPs have been reviewed in detail. Tim Smith suggested it would be reasonable to defer the issue until a determination has been made on the success of the RFP. If it is learned that the current subsidy didn't help at all, then a decision must be made concerning either an increased subsidy or not to pursue a convention center at all. The matter was further debated, and Rick Hert pointed out that the $45,000 that went to the VCB this year should go instead toward marketing. Russ Veenema assured the group he would work with whatever amount of money is set aside for marketing. Brief discussion followed on the possibility of public facility financing or tax increment financing for a convention center. Chamber of Commerce Proposal: Discussion was held concerning the proposal that the Chamber of Commerce handle the lodging tax funds, and Russ Veenema offered commentaries as to why it would make sense for the Chamber to fulfill this role, which would include marketing, events, and the like. Mr. Veenema felt this change would be important, especially in light of the fact that the VCB could dedicate itself to marketing the entire Peninsula. Mr. Veenema emphasized the need for special events, particularly during the non-summer months. Additionally, there is a need to increase the awareness of the Peninsula, and he urged the group to not think of marketing as being the same as advertising. He summarized how there is a commitment to not duplicate efforts across the Peninsula and, in that regard, the VCB is undergoing a major reorganization. Jefferson County has committed to a joint effort in the form of the Olympic Peninsula Marketing Council, and it is important that each entity commit at least 10% to fund the efforts of this Council. Mr. Veenema further reviewed the importance of tracking the results of all marketing efforts, and he is having some success in gaining commitments for occupancy figures City-wide. Mr. Veenema reiterated the Chamber's desire to be the conduit for handling lodging tax marketing funds, an amount that will need to be negotiated. Mr. Veenema - 3- LODGING TAX ADVISORY COMMITTEE August 2, 2001 Chamber of Commerce Proposal (ConI' d) noted that the Chamber's budget needs to be prepared for the coming year, so time is of the essence. Mr. Veenema stressed the fact that his purpose in talking to the committee was not to lobby for a $150,000 commitment to marketing but, rather, to inform the committee as to what has been occurring. He felt there has been some confusion as to whether the $150,000 for marketing was intended to be ongoing, and he noted the interest in increasing occupancies in order to attract a convention center. If marketing funds were to be cut, he expressed concern that the awareness level would decrease, resulting in a decreased occupancy level, ultimately hurting the possibility for a convention center even more. Discussion followed on the Chamber proposal, and Mr. Veenema advised the group that the Chamber would need to be told how much funding would be available as opposed to the Chamber approaching the group to ask for money. Councilman Campbell spoke in support of the proposal, but he suggested some conditions: there must be a program that can be seen and agreed upon, a budget for the implementation of the program, as well as indicators for the program. Further, he felt it crucial to earmark $100,000 for a capital program. At the request of the committee, Mr. Veenema summarized his marketing background and expertise. Councilman Wiggins then asked if the committee felt it timely to make a recommendation. Bill Rinehart moved that the committee assign or pass on the duties that were previously fulfilled by the Chamber of CommerceNCB to the Chamber of Commerce, and that the allocation of funding would go through the Chamber based on an amount approved by the committee. The motion was seconded by Steve Oliver and carried unanimously. Mr. Veenema indicated a multi- year contract for marketing would enable better planning, and he would prefer a 3-5 year agreement. Bob Harbick indicated there should be a separation into two phases, one for marketing and one for events. Councilman Wiggins suggested the group be prepared to further discuss the level of funding and time frame (term) at the next committee meeting. Steve Oliver asked that Mr. Veenerna prepare an array of what can be accomplished with a certain amount of money in terms of media buys and the like. Next Meeting Next Meeting: The next meeting will be held on Thursday, September 20, 2001, at 2:00 p.m. After brief commentaries on other matters, it was suggested that the next meeting also include a discussion on the request for funding for a performing acts center. Adjournment Adjournment: The meeting adjourned at 3:50 p.m. ~-;O~~ ' ' --- Glenn Wiggins, Chair h~~~ )~ Becky J. Upl , C Clerk - 4-