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HomeMy WebLinkAboutMinutes 01/20/1998 CALL TO ORDER: ROLL CALL: APPROVAL OF MINUTES: Review ofRFP Draft No.2 Consideration of Funding Categories for Additional 2% Tax LODGING TAX ADVISORY COMMITTEE Port Augeles, Washington January 20, 1998 Chairman Wiggins called the meeting to order at 3 :05 p.m. Members Present: Councihnan Glenn Wiggins, Councilman Orville Campbell, Bob Harbick, Dick Vogel, John Platt, David Morris, Steve Oliver, Randy Johnson, and Bob Grattan. Members Absent: Bill Rinehart and Jim Haguewood. Staff Present: Attorney Knutson, Clerk Upton, and Contracts/Projects Administrator Smith. Public Present: Scott Hance, Troy Woody, Dick Hendry, Roger Moses, Rick Hert, and Erl Hansen. After introduction of guests present, Randy Johnson moved to approve the minutes of the Lodging Tax Advisory Committee meeting of January 12, 1998. The motion was seconded hy John Platt and carried unanimously. The members of the committee reviewed in depth the second draft of the RFP, making various language changes to the text. One element of the RFP, having to do with training in customer service techniques, generated a great deal of discussion as to the approach by which such training might be implemented. In addition, there was some debate as to whether the dollar range should be made a part of the RFP as opposed to receiving input from prospective contractors as to what their financial needs would be in order to meet the requirements of the RFP. Bob Harbick expressed his opposition to including the dollar range in the RFP, but David Morris suggested that being more specific might generate more proposals. Attorney Knutson advised the group that the contract could be negotiated for more or less than what is stated in the RFP; there is no requirement to adhere to the dollar range in the RFP. Tim Smith suggested that a period of sixty (60) days be allowed for response to the RFP. After further discussion, Steve Oliver moved to fonvard the RFP, as modified, to the City Council, along with the program as outlined. The motion was seconded by David Morris. Bob Harbick moved to table the motion to later in the meeting. The motion to table was seconded by John Platt and carried unanimously. John Platt, Bob Harbick, and Dick Vogel, representing the tax collectors on the committee, met and discussed the funding categories. They distributed copies of their proposal, which essentially suggested that the additional 2% should be directed to marketing. The proposal was reviewed by the three committee members, and it was noted that a 25% funding cut would be made to activities, if accepted by the committee. -1- LODGING TAX ADVISORY COMMITTEE January 20, 1998 Consideration of Funding Categories for Additional 2% Tax (Cont'd) Chairman Wiggins distributed copies of the debt service schedule relative to the Vern Burton Community Center, noting that the bond would be callable on December I, 2002. An option the committee might wish to consider would be to accumulate sufficient fimds to pay off the debt. By paying the debt early, over $130,000 in interest would be saved, which would ultimately result in an additional $48,000 per year for funding of other priorities. In the ensuing discussion, Bob Harbick expressed the opinion that such an action would not put heads in beds, and the lodging industry does not have the luxury of time to wait during the accumulation of funds to call the bond. Tim Smith emphasized that the committee has been charged with the responsibility of balancing the interests of the collectors with the interests of the recipients. He suggested that it may be advantageous to table any further consideration of this option until after the time the RFPs have been received and a three-year agreement has been negotiated. The committee could keep its options open until the determination has been made as to how much to spend on a marketing program. Lengthy discussion was held relative to the motion passed at the last meeting, at which time the committee unanimously agreed to "proceed with the RFP incorporating a range of $450,000 - $550,000 over a 5-year term". There was not unanimity with regard to the intent of the motion, as some committee members were of the opinion that the amount was flexible and others felt the amount was firm. A letter, which was read aloud by John Platt, was submitted to the Lodging Tax Advisory Committee by the North Olympic Peninsula Visitor & Convention Bureau, requesting that funds from a lodging tax increase be dedicated to advertising and promotion that creates overnight lodging. John advised the committee members that people in the industry are working together for the common good; he sununarized efforts between the Chamber and the VCR John suggested that, if the community doesn't get behind the businesses, then individual efforts may produce little or no results. Discussion was again generated with regard to the dollar range to be included in the RFP, and Attorney Knutson reiterated that the range in the RFP may be changed based on the outcome of the negotiations. After further discussion and clarification, the members were in agreement that negotiations with a contractor may result in either a lower or higher amount for contract purposes. Tbe committee would be in a better position to make that determinatiott once the quality of the proposals submitted has been determined. Chairman Wiggins emphasized the need to make a recommendation to the City Council relative to the RFP concept. The committee would then need to try and identitY how the capital issue would be addressed in the overall scheme. Chairman Wiggins read into the record a letter from the Chamber of Commerce indicating that the membership of the Chamber would not take a position on the additional 2% tax but, if a 2% tax were added, the Chamber wanted all of the additional money spent on marketing. Councilman Campbell noted that the lodging industry had introduced some very good points, and it is apparent that there is a lack of trust of what the City might do with the additional tax funds. However, he expressed concern with the possibility of dedicating the additional funds totally to marketing endeavors, without any regard to the reserves. Councihnan Campbell urged the committee members to consider the importance of having a reserve fimd available in the event future opportunities arise that deserve pursuit. He felt it to be good business practice to have such a reserve. After finther lengthy discussion, David Morris moved to bring the motion off the table. The motion was seconded by Steve Oliver and carried unanimously. David Morris inquired as to the urgency of detennining the categories to be funded, and it was agreed there is no urgency at this time. It was agreed the efforts should be directed to implementing the 2% increase with the target date of April I. -2 - Consideration of Funding Categories for Additional 2% Tax (Cont'd) Consideration ofLTAC Letter to Lodging Industry ADJOURNMENT: LODGING TAX ADVISORY COMMITTEE January 20, 1998 John Platt advised the committee members that the collectors on the committee were of the opinion that the funds should be dedicated to marketing and that the two entities in town, being the Chamber and VCB, have experience in tourist promotion and are deserving of the committee's support. He agreed that the committee should proceed and issue the RFP. This led to discussion being introduced as to the possibility of only one proposal being submitted -- from the Chamber and the VCB. Steve Oliver was concerned that to make such a statement might well assure that possibility becoming reality, and he expressed the hope that the receipt of proposals might provide the committee with a fresh outlook and new ideas to consider. Consideration was then given to the motion on the table, which was in need of clarification. Therefore, after due consideration, the motion was restated to move the RFP, as modified, to the City CouncU as the suggested program at this point, and that a portion ofthe additional 2% tax is the basis for the funding of this program. A vote was taken on the motioo, which carried unanimously. Bob Harbick moved to adopt the proposal submitted by the collectors for the allocation offunds for 1999. The motion was seconded by John Platt. David Morris moved to table the motion until the time the RFPs have been received. The motion to table was seconded by Randy Johnson. A vote was taken on the motion and carried by a majority vote, with 5 voting in favor and 3 voting in opposition. Councilman Campbell agreed there needs to be more discussion regarding allocations; the proposals should be considered first. In addition, Tim Smith felt it would be advisable to receive a financial forecast so that the committee is aware of the projected funds to be available. Chairman Wiggins called the committee's attention to another letter submitted by the Chamber of Commerce, having to do with the need for additional funds so that the Chamber and VCB could participate in an upcoming International Sports Show in Seattle. It would be intended to display the recent rating of Port Angeles as the "Best Outdoor Sports Town" in Washington State. In the letter, the Chamber noted the City's increased hotel/motel revenues which might fund the sports show participation. Steve Oliver responded that the committee had held discussion early on in the allocation process of the original 2%, and it was agreed at that time that the committee would not revisit agency requests for funding beyond the original allocation. Steve further expressed the opinion that to provide additional fimds to one agency might well open the door for similar requests from other agencies. David Morris agreed with the premise that an undesirable precedent would be established. Randy Johnson, however, noted that this is a special request in the interest of increasing tourism. Tim Smith distributed copies of a draft letter to be sent to the members of the lodging industry in Port Angeles. In view of the time, it was suggested that conunittee members review the letter and be prepared for discussion at the next meeting. John Platt emphasized the need to mail the letter as soon as possible. The next meeting is scheduled to be held Monday, January 26, 1998, 3:00 p.m., in the Public Works Conference Room. The meeting was adjourned at 4:50 p.m. v -A ,,- ~ ~O~~~. i1pta^ Becky J. U ,C, Clerk - Glenn Wiggins, Chair - 3 -