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HomeMy WebLinkAboutMinutes 08/20/2003 CALL TO ORDER: ROLL CALL: Approval of Minutes 2004 Budget Projections 2004 Chamber of Commerce Lodging Tax Request LODGING TAX ADVISORY COMMITTEE Port Angeles, Washington Angust 20, 2003 Councilman Campbell called the meeting of the Lodging Tax Advisory Committee to order at 3 :05 p.m. Members Present: Councilman Campbell, Councilman Headrick, Carol Griffith, Bob Harbick, Jack Harmon, Michael Luehrs, and Dave Neupert. Members Absent: Jim Haguewood, Patty Hannah, Steve Oliver, and Bill Rinehart. Staff Present: Manager Quinn, Finance Director Ziomkowski, Parks & Recreation Director Connelly, Economic Development Director Smith, Clerk Upton, and Recreation Services Manager Cole. Others Present: Russ Veenema and Paul Lamoureux. Approval of Minutes: Dave Neupert moved to approve the Lodging Tax Advisory Committee minutes of July 31, 2003. The motion was seconded by Bob Harbick and carried unanimously. 2004 Budget Projections: Councilman Campbell asked Finance Director Ziomkowski to provide a summary of the Lodging Tax revenue projections for 2004. Director Ziomkowski indicated the City is still awaiting a report for August, 2003, but the revenue could be approximately $30,000 below budget for 2003. She acknowledged that Russ Veenema, being somewhat closer to the situation, appears to be more positive in terms of the final revenue figures. Nevertheless, Director Ziomkowski estimated revenues to be at $390,000, which would be $20,000 below budget. Projections for 2004 are at $406,000. Russ Veenema, Chamber of Commerce, distributed an informational sheet setting forth the Lodging Tax revenues since 2000. Also included were his projections into 2004 at $406,500. Director Ziomkowski felt that the August figures should be very positive in light of the favorable weather conditions and, although she was not comfortable projecting revenues for 2004 at a level higher than $400,000, she felt it may be possible to exceed that amount if the marketing efforts prove successful. Michael Luehrs indicated thatthe months ofJune, July, and August of this year were much stronger than the same months this past year, and Bob Harbick felt the higher numbers might be experienced because of the workers coming to town for the Graving Yard project. The project contractors, according to Manager Quinn, are being encouraged to use a balanced approach between hotels, rentals, and the like in placing their employees in temporary housing. 2004 Chamber of Commerce Lodging Tax Request: Russ Veenema presented information itemizing projected Lodging Tax revenues for 2004, as well as the proposed expenditures, all of which were categorized under Capital Projects, Event/Tournament Funding, Guest Service, and Advertising. In order to save money, he indicated he had purposely cut back on some of the media ads, the size of ads, as well as some of the -1- LODGING TAX ADVISORY COMMITTEE August 20, 2003 2004 Chamber of Commerce Lodging Tax Request (Cont'd) colored ads. He proceeded to review each of the categories, and a question was raised as to a $1 ,200 expenditure for "Services from the City". Director Ziomkowski and Clerk Upton explained the City has a contract with Dave Brewer for radio announcing services in the form of information and updates when emergency situations occur and to provide information to travelers on Radio Station 1610 AM. With regard to event and tournament funding, Economic Development Director Smith felt the Chamber's match program was a wonderful idea, and he was surprised there weren't more participants. Michael Luehrs felt many of those who conld have participated were unaware of the availability ofthe program. Russ Veenema indicated that, due to poor participation and lower funding, the program will not be continued in 2004. Mr. Veenema then referenced the costs to operate the Visitor Center, noting that some of the $68,000 expense is offset by Chamber memberships. Mr. Veenema then discussed the proposed advertising campaign for 2004, stating his intention to provide further information as the advertising is approved. He felt that the advertising must remain flexible as the year proceeds, based on the response to the different forms of advertising. He discussed in depth the joint marketing program in which Port Angeles participates, under the auspices of the North Olympic Peninsula Visitor & Convention Bureau. That entity involves the various cities and counties on the Peninsula, involving itself in advertising, promotion, lobbying, and marketing. Mr. Veenema indicated the marketing partners would like more funding from Port Angeles, and he reviewed the funding levels of the other participants. Discussion was then held concerning proposed funding, or lack of funding. for the Chamber's web site, direct mail campaign, magazine ads, and newspaper ads. Mr. Veenema explained the importance of the ferry racks, indicating the Chamber pays for the rack space in advance. The Chamber members are being encouraged to participate in the ferry rack system by purchasing an allotted time from the Chamber in order to advertise their businesses. No major changes are being proposed for the print materials and postage. Mr. Veenema explained the proposed expenditures forTY, radio, creative, and billboard ads. The total proposed expenditure for 2004 was submitted at $410,13 7. Councilman Campbell reviewed the report submitted to the City Council the previous evening, and he noted some questions arose about the billboard advertising at $20,000. Mr. Veenema responded he was not planning on spending the full $20,000 but, rather, he could obtain space in the Seattle market for $4,000. Mr. Veenema summarized the report he submitted to the Council, at which time the Council approved an additional expenditure of $72,000 for 2003. Dave Neupert directed attention to the Art on the Town project; it is now known that $19,000 ofthe authorized $20,000 will be used for that purpose. Michael Luehrs would like to be certain that the extra funds from that budgeted amount are directed to marketing. Discussion followed, and Director Ziomkowski reported there is a $20,000 deficit, something that will need to be addressed. The typical response to a deficit is to decrease spending. Clarification was provided for the committee members with respect to the $28,000 remaining from the original recommendation of$1 00,000 for added marketing. Director Ziomkowski felt that Mr. Veenema had been fiscally responsible in his report to the Council. The ensuing discussion centered around funding for billboard advertising, the mural project, and balancing the funding needs for marketing and capital. Councilman Campbell shared that the City Council would like to see a 50 - 50 split between marketing and capital. Lengthy discussion and debate then followed on the matter of funding for Parks & Recreation events, with some committee members feeling the General Fund should be tapped for all Parks & Recreation expenses. Other committee members supported continued funding in light of the success of the Parks events and tournaments, plus the fact those events have proven to bring tourists to Port Angeles and put heads in beds. - 2- LODGING TAX ADVISORY COMMITTEE August 20, 2003 2004 Chamber of Commerce Lodging Tax Request (Cont'd) Adjournment Councilman Campbell noted there has been a good return on investment with regard to Parks & Recreation. Bob Harbick recalled a commitment had been made to fund Parks & Recreation out of the General Fund, particularly because ofthe commitment made for the conference center. Michael Luehrs was concerned that the need to focus on return on investment is empowering an additional investment in capital in the future. He indicated he would continue to be a proponent for advertising. He felt the City should not recognize the Lodging Tax funds as operational dollars for the projects it has underway, as it is the City's responsibility to fund Parks & Recreation. Councilman Campbell and Director Ziomkowski explained to the committee that Police, Fire, and Parks are funded through the General Fund budget. Any decreases made would occur in Parks, as it is not likely that Police and Fire would be cut. Further discussion and debate followed, and Manager Quinn stressed the importance of having a balance between capital and marketing. Michael Lnehrs moved to forward for approval the 2004 expenses as outlined on Russ Veenema's spreadsheet, subject to legal compliance with State law, The motion was seconded by Dave Neupert. Following brief discussion, a vote was taken on the motion, which carried unanimously. o further business, the meeting adjourned at 4:40 p.m. b df A~~~ jl,pto^_ Becky J. Up , . C1er - 3-