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Home My WebLink AboutCity Council Committees - Lodging Tax Advisory Committee - 05/11/2023 Pending Approval Lodging Tax Advisory KENT Committee Lodging Tax Advisory Committee-Regular Meeting Minutes May 11, 2023 Date: May 11, 2023 Time: 4:00 p.m. Place: Centennial North and South Members: Bill Boyce, Chair Burl Battersby, Gaila Haas, Tim Higgins, Andrew Hutchison, David Kwok, Agenda: 1. Call to Order 4:00 p.m. 2. Roll Call Attendee Name Title Status Arrived Bill Boyce Chair Present Burl Battersby Present Gaila Haas Present Tim Higgins Present Andrew Hutchison Present David Kwok Present 3. Agenda Approval 4. Business A. Approval of Minutes 1. Approval of Minutes dated March 2, 2023 MOTION: Move to approve the Minutes dated March 2, 2023 RES LU T: APPROVED [UNANIMOUS] MOVER: Bill Boyce, Chair SECONDER: Andrew Hutchison AYES: Boyce, Battersby, Haas, Higgins, Hutchison, Kwok B. Review of Available Budget and Revenue Trends Cities receive their portion of earned lodging taxes back on a two month lag, and are reported quarterly. So the most updated information available to the committee for this early may meeting represents revenues from November ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Page 1 of 6 Lodging Tax Advisory Committee Lodging Tax May 11, 2023 Advisory Committee-Regular Meeting Kent, Washington Minutes 22 - January 23. For the first quarter, revenues are trending as predicted with receipts just under 20% of the adjusted budget for 2023, not alarming as January and February are generally slow times for hoteliers. Based on revenues restored with ARPA funds the committee is planning to disburse approximately 175,000 to grantees for the spring cycle. C. Review of State Requirements With a few members reviewing experiencing their first round of grant application reviews, an overview of state rules and the committee's bylaws and operating procedures was provided by Michelle Wilmot. For purposes of clarity, the text below is an excerpt from a document previously written to summarize these requirements and procedures, rather than a transcription of the overview. A complete copy of the committee bylaws was provided in the agenda packet. How Can the Lodging Tax Revenues Be Used? The guiding principle for the use of lodging taxes is that they must be used for activities, operations, strategies and expenditures designed to increase tourism. Specifically, lodging taxes can be used for: Leisure and business tourism marketing and promotion; Marketing and operations of special events, conferences and festivals designed to attract both leisure and business travelers; Operations and capital expenditures of tourism-related facilities owned or operated by a municipality or a public facilities district; or Operations of tourism-related facilities owned or operated by nonprofit organizations (RCW 67.28.1816 <http://a pp.leg.wa.gov/rcw/defauit.aspx?cite=67.28.1816>). The use of LTAC funds for capital expenditures are prohibited by nonprofits. What is the definition of tourism? Tourism is travel for pleasure or business; also, the theory and practice of touring, the business of promoting, attracting, accommodating, and entertaining leisure or business travelers. What is Included in Tourism Marketing and Operations? It includes activities defined as "tourism promotion" in state law (RCW 67.28.080 <http://a pp.leg.wa.gov/rcw/default.aspx?cite=67.28.080>). Advertising, publicizing, or otherwise distributing information to attract and welcome tourists; Developing strategies to expand tourism; Operating tourism promotion agencies; and Funding the marketing or operation of special events, conferences and festivals designed to attract tourists. ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Page 2 of 6 Lodging Tax Advisory Committee Lodging Tax May 11, 2023 Advisory Committee-Regular Meeting Kent, Washington Minutes Applications for Lodging Tax Funds In counties or cities of at least 5,000 population, applications must be submitted directly to the lodging tax advisory committee. The law is silent on how often the awards should be made. Some jurisdictions choose to make awards as part of their annual budget cycle. Others also make mid-year awards to account for unexpected increases or decreases in projected revenue. Who May Apply for Lodging Tax Funds? Convention and visitors bureaus; Destination marketing organizations; Nonprofits, including main street organizations, lodging associations, or chambers of commerce; Municipalities - The State Auditor's Office has interpreted the law to mean that all users of funds, including municipalities, are considered applicants and must follow relevant application procedures. So, cities and counties can submit applications for their own projects to the LTAC. What Must be Included in the Application? All applications must include estimates of how funding the activity will result in increases to people staying overnight, traveling 50 miles or more, or coming from another state or country. To ensure this data is collected, jurisdictions should require this information on their lodging tax application forms. State law makes no requirement that priority for funding be given to applicants expected to generate the most travelers, and lodging tax revenue may still be awarded to recipients who generate few of these types of travelers. Contracts with Recipients of Lodging Tax Funds Because of the state constitutional gift of public funds prohibition, a city or county should enter into a contract with any private organization providing marketing services, operating special events or festivals, or any other tourist promotion activity. The contract should spell out the tourism-related services to be provided in exchange for city or county funding and what reports will be required. Also, any organization doing promotion on behalf of the city or county may only spend lodging tax funds on items that the city or county itself could fund. This prohibits, for example, any expenditures on promotional hosting. Reporting Requirements All entities receiving lodging tax funds must provide information to their respective local government on their use of these funds as required by RCW ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Page 3 of 6 Lodging Tax Advisory Committee Lodging Tax May 11, 2023 Advisory Committee-Regular Meeting Kent, Washington Minutes 67.28.1816 <http://apes.leg.wa.gov/RCW/defauIt.aspx?cite=67.28.1816>. This includes local governments that directly use lodging tax funds for municipal purposes, such as municipal facilities or community events. Local governments will then, in turn, report this information annually to JLARC using their on-line reporting system <http://leg.wa.gov/JLARC/Pages/Lodging-Tax.aspx>. Local governments should, as part of their contract with recipients, require that the report be provided immediately after the event or activity. The deadline for local governments to submit the annual data to JLARC is March 15 for the year ending the previous December 31. JLARC does not provide advice on how to estimate tourism impacts. Good faith estimates of actuals can be reported provided applicants and users of funds indicate how those estimates will be developed. All information (including descriptions of how actual impacts were estimated) will be available for public review. Lodging Tax Advisory Committee (LTAQ This committee must have at least five members, appointed by the governing body. The committee membership must include at least two representatives of businesses that are required to collect the lodging tax, at least two people who are involved in activities that are authorized to be funded by this tax, and one elected city official who serves as chairperson of the committee. The statute also provides that a person who is eligible under the first category is not eligible for appointment under the second category, and vice versa. Organizations representing hotels and motels and organizations involved in activities that can be funded by this tax may recommend people for membership. The number of committee members from organizations representing the hotels and motels and the number from organizations involved in activities that can be funded must be equal. A city's committee may include a non-voting elected city official and vice- versa. The governing body must review the membership of the committee annually. D. Evaluate and Score Lodging Tax Grant Applications A total of 10 applications were received and the committee recommended that 9 of the 10 applications be awarded grants. The sole application not awarded a grant was determined to have provided too little information for the committee to make a decision. The 10 applications requested funds totaling 267,100, and the committee recommended grant awards totaling 170,000. Committee members were provided the following information in advance of the meeting to enable them to make informed choices in selecting award .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Page 4 of 6 Lodging Tax Advisory Committee Lodging Tax May 11, 2023 Advisory Committee-Regular Meeting Kent, Washington Minutes ......................................................................................................................................................................................................................................................................................................._............................................................................................................................................................................................................... winners and funding levels: Complete written applications (included with the agenda packet) Results of previous grant awards if applicable (not included with the agenda packet) A summary table for notes and tracking purposes (included with the agenda packet) The nine applicants recommended to Council for awards by the committee are: Applicant Event or Requested $ Recommended Program Award $ Kent Downtown Cajun Fest 10,000 10,000 Partnership 2023 In Spice Taste of 10,000 10,000 Productions, Inc. Kent/Taste of Community T-Birds Hockey 2023-2024 74,000 74,000 Club Marketing Support Pacific Raceways NHRA NW 50,000 35,000 Nationals Marketing Support Women in Manufacturing 10,000 10,000 Manufacturing Fundamentals Networking Event Series Steve King Showcase 10,000 10,000 Turcotte/Game - High School Time Events Boys & Girls Basketball Talent Showcase Kent Chamber of Visitor Center 671100 15,000 Commerce and Website Operations Support Simply Kent 3,000 3,000 Celebrations International ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Page 5 of 6 Lodging Tax Advisory Committee Lodging Tax May 11, 2023 Advisory Committee-Regular Meeting Kent, Washington Minutes ......................................................................................................................................................................................................................................................................................................._............................................................................................................................................................................................................... Festival Pacific Northwest Pints and 3,000 3,000 Defence Coalition Professionals networking event MOTION: Recommend to Council LTAC winners and funding levels for applications submitted during the Spring 2023 grant application cycle. RESULT: RECOMMENDED TO COUNCIL [UNANIMOUS]Next: 6/6/2023 4:00 PM MOVER: Tim Higgins SECONDER: Andrew Hutchison AYES: Boyce, Battersby, Haas, Higgins, Hutchison ABSENT: Kwok S. Adjournment 5:27 p.m. Rh&nda.3yluv Committee Secretary ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Page 6 of 6