HomeMy WebLinkAboutReg 2018-02-20 Item 4E - Funding - $59,064 Lodging Tax Funding for Economic Development General Administration and OperationsCOUNCIL AGENDA SYNOPSIS
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Prep ?red by
Ala !or's review
Council review
02/20/18
BJM
Resolution
Alt Date
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Bid Arard
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Si( YNM )R E Council ,Vluyor — I IR I-1)CD — Finance r Fire "I1S' — Pta/N — Police PIF Court
SPONSOR'S The City of Tukwila's Office of Economic Development is requesting $59,064 in lodging tax
Summ \Ry funds to be used for general administration and operations. The Office of Economic
Development is the City's lead on tourism related activities, including new initiatives and
managing contracts with lodging tax recipients.
It.i.vir:\.\11) By 1 I C.O.W. mtg. Z CDN Comm E Finance Comm. Public Safety Comm.
Trans &Infrastructure E Arts Comm. E Parks Comm. E Planning Comm.
DATE: 2/13/18 COMMEPTEE CHAIR: KRULLER
RECOMMENDATIONS:
spoNsoR/ADmiN.
C()MNIITTI'lr,
Mayor's Office! Economic Development
Unanimous Approval; Forward to Consent Agenda
COST IMPACT / FUND SOURCE
L\'11,; \ DITURI: -REQL1R11) AMOUNT BUDGETED APPROPRIATION REQUIRED
$59,064 $673,914 $N/A
Fund Source: 101 FUND, LODGING TAX
Comments: Per State Law, Lodging Tax Funds are limited to use for tourism promotion activities.
ITEM INFORMATION
ITEM No.
4.E.
STAFF SPI NsoR: B. MILES
ORM [NAL AGFND.1 DiVIE: 2/20/18
AGIADA ITI INI T ' '1,I,I City of Tukwila's General Adminstration Lodging Tax Application
CM IG( )RY DiscuJsion
.\11Date
Motion
\f/y, Dale 2/20/18
Resolution
Alt Date
E Ordinance
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Bid Arard
A tD Dale
fl pub/i,, I leering
1(1,g1)ate
Other
.\Ig Date
Si( YNM )R E Council ,Vluyor — I IR I-1)CD — Finance r Fire "I1S' — Pta/N — Police PIF Court
SPONSOR'S The City of Tukwila's Office of Economic Development is requesting $59,064 in lodging tax
Summ \Ry funds to be used for general administration and operations. The Office of Economic
Development is the City's lead on tourism related activities, including new initiatives and
managing contracts with lodging tax recipients.
It.i.vir:\.\11) By 1 I C.O.W. mtg. Z CDN Comm E Finance Comm. Public Safety Comm.
Trans &Infrastructure E Arts Comm. E Parks Comm. E Planning Comm.
DATE: 2/13/18 COMMEPTEE CHAIR: KRULLER
RECOMMENDATIONS:
spoNsoR/ADmiN.
C()MNIITTI'lr,
Mayor's Office! Economic Development
Unanimous Approval; Forward to Consent Agenda
COST IMPACT / FUND SOURCE
L\'11,; \ DITURI: -REQL1R11) AMOUNT BUDGETED APPROPRIATION REQUIRED
$59,064 $673,914 $N/A
Fund Source: 101 FUND, LODGING TAX
Comments: Per State Law, Lodging Tax Funds are limited to use for tourism promotion activities.
MTG. DATE
RECORD OF COUNCIL ACTION
2/20/18
MTG. DATE
ATTACHMENTS
2/20/18
Informational Memorandum dated 01/26/18
Lodging Tax Application from the City of Tukwila
Minutes from the Community Development and Neighborhoods Com. 2/13/18
i__
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City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Community Development and Neighborhoods
FROM: Brandon Miles, Business Relations Manager
CC: Mayor Ekberg
DATE: January 26, 2018
SUBJECT: City of Tukwila's General Administration Lodging Tax Application
ISSUE
Approval of funding requests for lodging tax funds for the City of Tukwila.
BACKGROUND
The City of Tukwila's Office of Economic Development is requesting $59,064 in lodging tax
funds to be used for general administration and operations. The Office of Economic
Development is the City's lead on tourism related activities, including new initiatives and
managing contracts with lodging tax recipients.
Available Lod Ina Tax Funds
The City collects a 1')/0 lodging tax on certain qualifying overnight stays in paid accommodations
(hotels/motels/Airbnb) in the City. State law limits the use of these funds to tourism promotion'.
There is currently just over $1 million in lodging tax funds available for use. This does not
include revenue for the months of November and December because of the two month lag in
receiving lodging tax funds from the State. Additionally, the City has budgeted to collect
$755,000 in funds in 2018.
Application Approval Process
The City's Lodging Tax Advisory Committee (LTAC) reviews all requests, even by the City, for
use of lodging tax funds. LTAC then forwards a list of recommended applications to the City
Council for its review and consideration. If LTAC does not recommend an application be funded,
that application is not forwarded to the City Council. The City Council may approve or deny any
of the applications recommended by the LTAC. The City Council may also approve an
application and increase or decrease the dollar amount awarded2.
RCW 67.28.080 (6) defines "tourism promotion" as "...activities, operations, and expenditures designed to
increase tourism, including but not limited to advertising, publicizing, or otherwise distributing information for the
purpose of attracting and welcoming tourists; developing strategies to expand tourism; operating tourism
promotion agencies; and funding the marketing of or the operation of special events and festivals designed to
attract tourists."
2 On August 17, 2016, the Washington State Attorney General's Office issued an informal opinion regarding
whether a municipality could change the dollar amounts recommended by the local lodging tax advisory
committee. Specifically, the informal opinion states:
"When awarding lodging tax revenues pursuant to RCW 67.28.1816(2)(b)(ii), 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."
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INFORMATIONAL MEMO
Page 2
The City accepts applications on a rolling basis, with the LTAC reviewing requests monthly.
Additional funding request by the City of Tukwila, Museum of Flight, Starfire Sports, and others
are expected to be reviewed the LTAC in February.
Pending Applications
There is currently one application form the City of Tukwila pending.
1. City of Tukwila. General Administration, $59,064.
The City of Tukwila is requesting $59,064 in funding for administrative costs associated with the
lodging tax fund.
Of the $59,064 requested, $36,414 will be transferred from the lodging tax fund to the general
fund. The lodging tax fund is one of several special revenue funds managed by the City. Under
State law, the City is permitted to charge special revenue funds for the indirect costs that are
incurred by the general fund to support and maintain these special revenue funds. These costs
include, but are not limited to legal support, accounting, insurance, technology services, human
resources, and facilities support, all activities that are needed to support the lodging fund.
Additional funds are provided for training, travel, professional services, and membership to
several business and tourism organizations. These opportunities are available to all elected
officials, employees and LTAC members if applicable. Staff is requesting additional funds for
professional services to create and print collateral reflecting the adopted City's tourist brand.
Only the actual costs will be billed. Funds not used will remain in the lodging tax fund and are
eligible to be used next year. In 2017, the City was approved for $55,800 in lodging tax funds,
but only spent $53,176.59.
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INFORMATIONAL MEMO
Page 3
FINANCIAL IMPACT
The total amount of funding requested from the lodging tax fund is $59,064. As discussed
above, the City has budgeted the collection of $755,000 in lodging tax revenue in 2018.
2018 Lodging Tax Overview
Revenue
Projected Lodging Tax Revenue (Budgeted)
Expenditures
$755,000
Notes
This was the budgeted
estimated in the adopted City
budget.
Committed Funds
Seattle Southside Regional Tourism Authority
($292,500)
In 2017, the City approved a
two-year application and
contract with Seattle
Southside Regional Tourism
Authority. The number
shown reflects the funds
committed, but not yet paid.
Southcenter 50 Planning and Marketing
Pendin. A..lications
City of Tukwila, General Administration
($36,560)
($59,064)
In 2017, the City approved
$50,000 for planning and
marketing related to the
Southcenter 50 celebration.
This is a project based
application and the funds
carry ....over ....into ....2018 ............ ..............
Total Approved and Pending expenditures:
($388,124)
2017 Projected Ending Fund Balance:
$1,000,000
This is an estimate as the
City is still waiting for the
State to remit lodging tax
funds for November and
December.
Estimated Additional Funds Available for
Activities:
Current Tourism Reserve Fund:
RECOMMENDATION
Staff recommends that the City Council approve the funding request, as recommended by
LTAC. Staff suggests that the application be placed on the February 20, 2018 Consent agenda.
ATTACHMENTS
A. City of Tukwila, General Administration Application
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Application to the City of Tukwila for Use of 2018 Lodging Tax Funds
Event or Activity Name (if applicable):
General Administration
Amount of Lodging Tax Requested:
$65,161, $59,064
Applicant Organization:
City of Tukwila, Mayor's Office
Federal Tax ID Number:
91-6001519
Mailing Address:
6200 Southcenter Blvd
Tukwila, WA 98188
Primary Contact Name:
Brandon J. Miles
Primary Contact Phone:
(206) 431-3684
�..
Primary Contact Email Address:
Brandon.Miles@Tukwilawa.gov
Check all the service categories that apply to this application:
✓ Tourism promotion or marketing.
Operation of a special event or festival designed to attract tourists.
Operation of a tourism -related facility owned or operated by a non-profit organization.
✓ Operation and/or capital costs of a tourism -related facility owned by a municipality or a
public facilities district.
Check which one of the following applies to your agency:
Non -Profit (Note: Attach a copy of your current non-profit corporate registration from the
Washington Secretary of State Office)
✓ Municipality
Note: January 26, 2018: Application updated following Lodging Tax Advisory Committee meeting on
January 23, 2018. Changes are shown and reflect the approved request from the Committee.
I am an authorized agent of the organization/agency applying for funding. I understand that:
• I am proposing a tourism -related service for 2018. If awarded, my organization intends to enter
into a services contract with the City; provide liability insurance for the duration of the contract
naming the City as additional insured and in an amount determined by the City; and file for a
permit for use of City property, if applicable.
• My agency will be required to submit a report documenting economic impact results in a
litlii"in-e-c-1 ned by the City.
Signature:
Printed or Typed Name:
Brandon J. Miles
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1) Describe your tourism -related activity or event.
The City of Tukwila requests funding for 2018 for administration of the City's lodging tax fund.
Funds for this application are used for general administration and related costs incurred by the City in
managing its lodging tax program. In the past the funds for this application are used for the following
activities intended to support the entire tourism program:
• Office Supplies;
• Professional Services;
• Training and Education;
• Membership, Registration, and Subscriptions;
• LTAC Meetings;
• Parking, Travel, and Meals; and
• Indirect Cost Allocation.
Last year LTAC approved $55,800 for the City's Administration application and a total of $53,176.59
was spent. Unused funds revert to the lodging tax fund for future use.
As with past applications, the single largest item in this application is the indirect cost allocation. The
lodging tax fund is one of several special revenue funds managed by the City of Tukwila. Under State
Law, the City is permitted to charge special revenue funds for the indirect costs that are incurred by
the general fund to support and maintain these special revenue funds. These costs include, but are not
limited to, legal support, accounting, insurance, technology services, human services, and office
administration. Activities that are needed to support the lodging fund.
In 2017, the City of Tukwila, Mayor's Office oversaw nearly $400,000 in lodging tax funds awarded to
outside groups. Each award requires a contract and ongoing oversight by City staff.
It should be noted that currently the City of Tukwila does not charge any direct staff time to the
lodging tax for staff time associated with tourism related functions and management of third party
lodging tax contracts.
2) If an event, list the event name, date(s), and projected overall attendance.
This request is not for a specific event. However, the application helps support the City's ability to use
funds to support third parties and for the City to use lodging tax for possible events.
3) Is your event/activity/facility focusing on attracting overnight tourists, day tourists, or both?
Both, the City uses its lodging tax funds to support marketing activities for both day and overnight
visitors. These are for activities either done by the City or by third parties.
In the past the City has used its lodging tax funds to support Seattle Southside Regional Tourism
Authority; events such the Rock 'N' Roll Marathon; the Backyard Wildlife Fair; and marketing
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activities at the Museum of Flight and Starfire Sports. Providing funding for outside organizations
requires administrative support from several departments, including Finance, City Attorney,
Technology Services, City Clerk, and Economic Development.
Additionally, there are tourism related trainings, events, and memberships that the City would like to
be part of. These activities help support the City's ongoing tourism efforts.
4) Describe why visitors will travel to Tukwila to attend your event/activity/facility.
N/A
The request is for funding to help support City's costs incurred by the City to administer the lodging tax
fund and for expenses that are related to tourism. As discussed above, the lodging tax fund is used to
support a variety of activities in the region, which bring both day and overnight visitors to the City.
Costs associated, such as offices supplies, travel, parking, and education related to tourism and
marketing should be charged to lodging tax and not the City's general fund.
5) Describe the geographic target of the visitors you hope to attract (locally, regionally,
nationally, and/or internationally).
N/A.
6) Describe the prior success of your event/activity/facility in attracting tourists
The City has a long history of success in using lodging tax funds to support a wide range of activities,
including Seattle Southside Regional Tourism Authority, the Museum of Flight, Starfire Sports, and the
Southwest King County Chamber of Commerce (now known as Seattle Southside Chamber of
Commerce).
7) If this your first time holding the event/activity/facility provide background on why you think
it will be successful.
N/A
8) Describe the media strategy you employ to promote your event/activity/facility to attract
overnight and/or day tourists? Please list any digital or print media (newsletters, e -blasts,
social media, etc.) your agency uses or intends to use to promote your event/activity/facility.
N/A
9) Describe how you will promote lodging establishments, restaurants, retailers, and
entertainment establishments in the City of Tukwila.
N/A
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10) Is the City able to use your digital and print media for collaborative marketing?
N/A
11) Describe how you will use the name, "Tukwila" in publications, promotions, and for your
event?
N/A
12) Measurements and Metrics (Note: You will be required to report these metrics as part of the
close out of the agreement between your organization and the City.)
As
a direct result of your proposed tourism -related service, provide an estimate
of:
a.
Overall attendance at your proposed event/activity/facility.
0
b.
c.
d.
Number of people who will travel fewer than 50 miles for your
event/activity.
0
Number of people who will travel more than 50 miles for your
event/activity.
0
0
Of the people who travel more than 50 miles, the number of people
who will travel from another country or state.
e.
f.
g.
Of the people who travel more than 50 miles, the number of people
who will stay overnight in Tukwila.
0
Of the people staying overnight, the number of people who will stay in
PAID accommodations (hotel/motel/bed-breakfast) in Tukwila.
0
Number of paid lodging room nights resulting from your proposed
event/ activity/facility (for example: 25 paid rooms on Friday and 50
paid rooms on Saturday = 75 paid lodging room nights)
0
Special Note: The numbers provided above are direct estimates for this application. This application
helps supports the City's efforts in funding activities by third parties. Combined, these third parties
marketed the City to nearly 2 million people. For example, in 2017 Starfire Sports received $42,000
in lodging tax funds and nearly 1.2 million people visited the Starfire Sports campus. The ability to
provide funding to these third parties could not occur without the City's ability to process contracts
and provide payment, which is supported by this application.
13) What methodologies did you use to calculate the estimates and what methodologies will you
use to track outcomes, such as total participants, estimated visitor spending, etc?
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As discussed above, the City uses its lodging tax funds to support a wide range of activities. In 2018, the
City anticipates funding the City of Tukwila, SSRTA, the Museum of Flight, Starfire Sports, and other
smaller activities. These funded activities have metrics, which the City will use for reporting purposes
for this funding request.
14) Are you applying for lodging tax funds from another community? If so, which communities
and in what amounts?
No.
15) Are you applying funding from Seattle Southside Regional Tourism Authority (SSRTA)? If so, in
what amount?
No.
16) What is the overall budget for your event/activity/facility? What percent of the budget are
you requesting from the City of Tukwila?
Total requested funding is $65,164
The following is the proposed budget for the campaign (note funds in rows 1-7 might be moved
between budget rows, but won't exceed the total amount requested).
Column Budget Item
2017 2018 Proposed
Approved Budget
Budget
Office Supplies $1,000
Professional
Services
$3,000
$750
$8,000
Notes
This is for general
offices supplies and for
domain names holds
the City has purchased.
For 2017 these funds
were used for an
additional visit from Bill
Baker, the City's
branding consultant.
Funds were also used
for the creation of
some collateral for the
new brand.
For 2018, staff would
like to use some funds
to get additional
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collateral made reflect
the new brand and
have funds available for
small projects that help
with the City's
marketing, branding,
and tourism attraction
efforts.
Training and
Education
$6,000
$6,000
These funds are
intended for staff and
elected officials who
might desire or need
education or training
for tourism related
activities.
4.
Memberships,
$7,100
$10,000
Memberships to:
Registrations, and
subscriptions.
$7,000
• Seattle Chamber
of Commerce
• Seattle Sports
Commission
• Washington
Tourism Alliance
• WFEA
• Others
5.
LTAC Meetings
$2,000
$1,000
Staff tries to minimize
expenses for LTAC
meetings; however, in
some cases we need to
rent a room and/or
provide food for
meetings.
$0.00
6. _...........__.......... .........._.________________
Parking, Travel and
$1,000
$37000
This is for staff, City
Meals
Councilmembers, and
$1,000
LTAC members who
might want to attend
tourism related
meetings in the region.
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17) What will you cut from your proposal or do differently if full funding for your request is not
available or recommended?
Without funding it would jeopardize the City's ability to process third party requests for lodging tax
funding. Additionally, the City might choose to require the lodging tax fund to "pay as it goes" for
support provided by the City. This could result in higher charges being imposed to the lodging fund.
Applications are considered on a rolling basis. Please contact staff to discuss the process for having the
application reviewed by the City's Lodging Tax Advisory Committee.
Completed applications should be submitted to:
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Last year this expense
was charged to the
general fund.
7.
Indirect Cost
$35,700
$36,414
Reimbursement of the
Allocation
City's general fund for
activities such as legal
support, accounting,
insurance, technology
services, public records,
and office
administration needed
to support the lodging
fund. This funding
supports all the indirect
charges with
administration of the
lodging tax funding and
is based on the citywide
overhead analysis used
to charge overhead t
special revenues funds.
8.
Total:
$55,800
$65,1 61
$59,064
It maybe necessaryto
exceed the total
rows 1-7; however,
will not
move funds between
listed in row 8.
the total expenditure
17) What will you cut from your proposal or do differently if full funding for your request is not
available or recommended?
Without funding it would jeopardize the City's ability to process third party requests for lodging tax
funding. Additionally, the City might choose to require the lodging tax fund to "pay as it goes" for
support provided by the City. This could result in higher charges being imposed to the lodging fund.
Applications are considered on a rolling basis. Please contact staff to discuss the process for having the
application reviewed by the City's Lodging Tax Advisory Committee.
Completed applications should be submitted to:
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Lodging Tax Advisory Committee
c/o Brandon Miles
City of Tukwila
6200 Southcenter Blvd
Tukwila, WA 98188
Or,
Brandon.Miles@Tukwilawa.gov
Questions?
LTAC Contact:
Brandon J. Miles
(206) 431-3684
Brandon.Miles@Tukwilawa.gov.
Updated: March 21, 2017
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DRAFT
City of Tukwila
General Administration
2018 Scope of Services
As outlined the budget above, funds will be used for the following activities intended to support the
operations of the lodging tax fund:
1. Purchase of office supplies;
2. Hiring of professional services, as needed (not project specific);
3. Training and Education for City staff, City elected officials, and LTAC members;
4. Membership, Registrations, and Subscriptions for the City;
5. Costs associated with the LTAC meetings;
6. Parking, Travel, and Meals
7. Indirect Cost Allocation
Note, funds may be moved between the categories, but the total expenditure will not exceed $65,164.
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City of Tukwila
City Council Community Development & Neighborhoods Committee
COMMUNITY DEVELOPMENT & NEIGHBORHOODS COMMITTEE
Meeting Minutes
February 13, 2018 - 5:30 p.m. - Hazelnut Conference Room, City Hall
Councilmembers: Kate Kruller, Chair, Kathy Hougardy, Zak Idan
Staff: Derek Speck, Brandon Miles, Kris Kelly, Nora Gierloff, Rick Still, Jack Pace,
Robert Eaton, Carol Lumb, Andrea Cummins, Laurel Humphrey (by phone)
CALL TO ORDER: Chair Kruller called the meeting to order at 5:30 p.m.
I. BUSINESS AGENDA
A. Lodging Tax Application from City of Tukwila
Staff is seeking Council approval of an application for $59,064 in lodging tax funds from the City
of Tukwila for general administration and operations. Of the total amount requested, $36,414
will be transferred to the General Fund for indirect costs such as legal support, accounting,
technology, and other activities that support the lodging fund. The additional funds will be
used for training, travel, professional services, and memberships to tourism related
organizations. The $8,000 in professional services will be used to create collateral for the new
brand developed in 2017. The Lodging Tax Advisory Committee (LTAC) forwarded a
recommendation to approve this request at its last meeting, having revised the original
application request of $65,164.00. Chair Kruller asked to clarify the process for the Council to
modify the amount recommended by the LTAC. The Attorney General issued an opinion that
said the Council can modify the amount but must notify the LTAC and include a waiting period
before final action. UNANIMOUS APPROVAL. FORWARD TO FEBRUARY 20, 2018 REGULAR
CONSENT AGENDA.
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