PED 2020-08-17 Item 1C - LTAC - Lodging Tax Allowable Uses and Process for Using

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Page 2 • One City elected official, traditionally the Council President, who serves as the chair of the LTAC. In 2013, the legislature amended RCW 67.28.1816 and expanded the role of the local lodging tax advisory committees. Now, in municipalities with a population of over 5,000, requests to use lodging tax funds — including requests by the municipality itself — must be submitted directly to the lodging tax advisory committee. This means that the City of Tukwila must submit an application to the LTAC to expend lodging tax funds for City of Tukwila activities. The lodging tax advisory committees review the applications for funding in a public meeting and then forwards a list of candidates to the municipality for final action (RCW 67.28.1816). As part of the application process, a requestor must provide to the City estimates on how the lodging tax funds will result in increase in the number of people traveling for businesses or pleasure on a trip. Citv Council Review Process in 2016 In June of 2016, staff took funding request applications reviewed by the City's LTAC to the Finance and Safety Committee. After Finance and Safety review, the applications were forwarded to the Committee of the Whole for discussion and review and then forwarded to a Regular City Council meeting for final action. Once the Council approved the funding requests, the recipients entered into service contracts with the City. Washington State Attorney General's Informal Opinion As part of the 2016 applications, reviewed by the City Council in June of this year, staff informed the City Council that the Council had two options with each application: (1) The Council could concur with the City's LTAC and agree to fund an application as presented or (2) the City Council could choose not to fund a specific application. Staff informed Council it could not change the specific dollar amounts recommended by the LTAC based on interpretations of RCW 67.28 provided by Municipal Research Service Center and the Association of Washington Cities. On August 17, 2016, the Washington State Attorney General's Office ("AG's Office") issued an informal opinion regarding whether a municipality could change the dollar amounts recommended by the local lodging tax advisory committee. 2 The AG's Office opined that a municipality can change specific dollar amounts recommended by the lodging tax advisory committee, provided the municipality waits 45-days before taking final action and that the lodging tax advisory committee is provided an opportunity to comment on the revised dollar amount.3 However, the AG's Office cautioned that a municipality cannot choose to fund a funding request which was not approved by the LTAC. While an informal Attorney General 2 See AG's Informal Opinion dated August 17, 2016, available at http://mrsc.org/getmedia/0562599b- d073-4b55-8817-daal b9cf39a3/w3aq081616.asPx. 3 Specifically, the Opinion states: When awarding lodging tax revenues pursuant to RCW 67.28.1816(2)(b)(V), a municipality may award amounts different from the local lodging tax advisory committee's recommended amounts, but only after satisfying the procedural requirements of RCW 67.28.1817(2), according to which the municipality must submit its proposed change to the advisory committee for review and comment at least forty-five days before final action on the proposal. ZACouncil Agenda ItemsWayor's Office\LTAC BusinessesWerno 1, Process for Lodging Tax Funds.docx 62