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HomeMy WebLinkAboutMinutes 10/24/1997 CALL TO ORDER: ROLLCALL: Introductions / Purpose Review of Proposed Schedule ReviewofLTAC Ordinance and RCW LODGING TAX ADVISORY COMMITTEE Port Angeles, Washington October 24, 1997 Chairman Wiggins called the meeting to order at 3:05 p.m. Members Present: Bob Harbick, Dick Vogel, John Platt, David Morris, Steve Oliver, Randy Johnson, Bill Rinehart, Bob Grattan, Councihnan Glenn Wiggins, Councilman Orville Campbell, and Jim Haguewood. Staff Present: Attorney Knutson, Clerk Upton, and Contracts/Projects Administrator Smith. Public Present: Rick Hert. After everyone present introduced themselves, Chairman Wiggins acknowledged the members who also served on last year's advisory committee: Bob Harbick, John Platt, Glenn Wiggins, and Orville Campbell. Chairman Wiggins emphasized the fact that those chosen to serve on this committee were charged with the responsibility of representing a particular interest, and members of this committee must keep this responsibility in focus. The Lodging Tax Advisory Committee has two purposes: (1) to consider application proposals and prepare a recommendation to the City Council as to the distribution of the existing 2% lodging tax for the 1998 City Budget, which is the first priority; and (2) consider a recommendation to the City Council pertinent to a possible 2% increase in the lodging tax, to include a recommendation as to its potential use and implementation timing. In the ensuing discussion, it was pointed out that the committee is interested in putting "heads in beds", particularly during the shoulder season. The average occupancy for the year stands at approximately 52% at the present time. Chairman Wiggins briefly reviewed the proposed schedule to be followed in hearing presentations from requesting agencies, determining recommended allocations, and preparing a timely recommendation for presentation to the City Council in conjunction with the budget process. Further discussion on the schedule was deferred to later in the meeting. Attorney Knutson reviewed the proposed ordinance to be presented to the City Council establishing the Lodging Tax Advisory Committee, as well as the RCW requiring the establishment and composition of the committee. He noted that the City Council would be acting on the committee's recommendation late in December. In addition, Attorney Knutson indicated the City Council had agreed to expand the membership of the committee beyond the requirements of the RCW. The Lodging Tax Advisory Committee would be required to follow the Open Public Meetings Act and, as such, the City Clerk would be filing appropriate meeting notices with the media. Attorney Knutson advised the committee members of the possibility that public comment may be accepted during this process. It is intended that the proposed ordinance would be taken to the City Council at its meeting of November 4 and, after a minimum waiting period of 45 days, action could be taken on instituting the additional 2% tax if so desired. Therefore, the City Council could take action on the additional tax at its first meeting in January, 1998. -1- LODGING TAX ADVISORY COMMITTEE October 24, 1997 Lodging Tax Revenue and Allocations History Determination of '98 LTAC Allocations Process In the following discussion, staff was asked to determine when the debts covered by the lodging tax would be paid in full, such as the debt service on the Convention Center and the Fine Arts Center roof Caution was expressed that, before the committee turns its attention to the additional tax, consideration should be given to whether the original amount is being spent properly. The question was raised as to whether funds can be leveraged into a GO Bond in order to be directed towards facilities. Additionally, committee members asked that information be provided specific to funds spent on the Vern Burton Convention Center as opposed to revenues generated from Vern Burton utilization. Tim Smith referenced items included in the packet which summarized a history of the tax revenues and allocations for the past few years. In considering the allocations, the committee members were interested in knowing what has been accomplished by the different agencies receiving funds. It was agreed that the application form should include a portion for the applicant to address in specific terms how funds were spent this past year and what was accomplished. Clerk Upton reviewed the City's approach once the allocations have been determined. The City enters into a contractual agreement with the agencies, the language of which requires the agencies to submit regular activity reports, as well as detailed financial reports. The City cannot dispense funds in order to provide cash flow to the agencies but, rather, it must make payments to the agencies in a reimbursement mode. Clerk Upton noted that many of the reports discuss the success of certain activities and number of participants; however, they are often lacking in terms of concrete numbers, such as "heads in beds". Tim Smith stated the presenters of funding requests should be prepared to address this issue, but he noted that some of the funding allocations do not lend themselves to tracking the number of beds. Jim Haguewood spoke in support of the group establishing guidelines and a process for the establishment of a cohesive plan before proceeding with consideration of the funding applications. He cited as a possible strategy a proposed plan, as submitted by the Downtown Forward group, for a "Basecamp Port Angeles" which would incorporate a cohesive marketing plan for connnunity events, media marketing, and economic development. Jim suggested that another meeting be held to discuss forming a plan, which was supported by other committee members. David Morris referenced a joint marketing proposal which has been developed by various entities, such as the Chamber and the VCB, which is the essence of the strategy addressed by Jim Haguewood. It was evident that different approaches and philosophies would be brought to the table for consideration this year. Because the committee wanted more time to plan its direction, it was agreed that the schedule would be offset somewhat, particularly as it relates to sending out invitations for applications. Lengthy discussion followed, and John Platt suggested that the same type of process which was used last year, that of prioritizing on a board, also be incorporated in the conunittee's deliberations this year. The committee members individually stated their personal philosophy on the direction which should be taken by this committee. Jim Haguewood reiterated the need for a general marketing plan or focus, as opposed to different agencies requesting funds on an individual basis. There is a need to create an image for Port Angeles, and the individual agencies should fall within the marketing theme or strategy. David Morris endorsed this concept, noting that a similar endeavor is being considered between the Chambers and the VCR Randy Johnson agreed that the concept is quite similar, and he felt it important that the money being spent is getting the desired results. Councilman Campbell agreed with the opinions expressed, and he felt it would be important to develop criteria for judging the proposals coming before the committee. He felt it to be important to regenerate the tax dollars and to invest in facilities to attract tourists. Bob Grattan noted that, in looking at the historical figures reflecting revenues and expenditures, the return on investment has been ineffective. In some instances, there is also an appearance that some events/activities are attended more by local residents as opposed to tourists. He stressed the need for a fresh focus, so as to not repeat these ineffective - 2- LODGING TAX ADVISORY COMMITTEE October 24, 1997 Determination of '98 L T AC Allocations Process (Cont'd) investments. Bob also expressed interest in direct advertising in the Portland and Seattle markets. Bob Harbick stressed the need for the tax funding to be reinvested so that it can be doubled; he felt it is important to work towards getting the tourists to return to this area. Also, Bob noted that most of his customers came from the southeast, so the advertising possibilities need to be expanded. Bob also suggested there should be more cooperation in scheduling the different events so that several events aren't being held at the same time. Bob expressed concern with the fact that last year's committee formulated recommendations on funding which were ultimately changed significantly by the City Council. He asked for assurance that this would not occur again this year. Bob Harbick suggested that it would be helpful to receive some insight from the City Council members as to what their priorities might be in terms of funding. John Platt expressed the hope that increased revenues would be realized; the efforts of this committee must be focused on doing just that with the input of all of the organizations. He did not want to lose sight of what lodging owners/managers feel, as quite often decisions are made on funding allocations without the benefit of knowing how customers feel pertinent to the current tax. His facility tracks why customers come to their establishment, and they feel it is most important to be certain the monies spent are done so successfully, are based on results, and focus on putting "heads in beds". The figures are too flat for too many years in a row. John felt that festivals and meetings don't bring people to the Peninsula; however, Olympic National Park and Victoria do playa large part in tourist attraction. There is a need to avoid the duplication of effort. Dick Vogel expressed the need to stop advertising for the summer months, but to concentrate on advertising for the shoulder and winter months. The funds need to be spent wisely, with a cooperative effort. Dick noted that what has been done in the past appears to not be working; in addition, the volume of people in hotels has been decreasing and the room rates increasing. Steve Oliver agreed with commentaries already made, as he supports increased concentration on filling beds in the shoulder/winter season. He supported a balance of capital projects and marketing, something that needs to have a degree of sophistication rather than just production of another brochure. Bill Rinehart, being in the business of accounting, has noted in particular the cash flow reflected in the spreadsheets provided. It is evident that there is no acceptable return on investment, and Bill felt the connnittee must determine some method of increasing revenue and be certain the City is getting the best "bang for the buck". Chairman Wiggins suggested that he and Councilman Campbell would need to prepare input for the committee with regard to realistic expectations of this committee on the part of the City Council. Discussion followed on the suggestion to conduct an additional meeting for the purpose of establishing criteria and a process for funding applications. Some of the issues to be considered at that meeting were identified: to seek input from applicants as to how they would fill beds in the off season, to determine the ability to leverage funds, to deteffiiiue percentages to allocate for festivals/events as opposed to advertising, to consider funding for start-up purposes of activities that will grow to be self-supporting. It was agreed by consensus that staff will not send out the application packets until the committee has met again and established more specific criteria. It was agreed the committee will meet again on Monday, November 3, 1997, at 3:00 p.m. Staff will determine the location and so advise the committee members. ADJOURNMENT: The meeting was adjourned at 4:40 p.m. ~~~.. - ~lenn Wiggins, Chair \80~~~lAptn^_ Becky 1. Upt Ci lerk - 3 -