HomeMy WebLinkAboutPED 2020-08-03 COMPLETE AGENDA PACKETCity of Tukwila
Planning & Economic
Development Committee
O Thomas McLeod, Chair
O Kathy Hougardy
O Zak Idan
AGENDA
MONDAY, AUGUST 3, ZOZO — 5:30 PM
HAZELNUT
III IT % E)NFERENCE seem
(At east entFance ef City Hall)
Distribution:
T. McLeod
Mayor Ekberg
K. Hougardy
D. Cline
Z. Idan
R. Bianchi
D. Quinn
C. O'Flaherty
A. Youn
L. Humphrey
THIS MEETING WILL NOT BE CONDUCTED AT CITY FACILITIES
BASED ON THE GOVERNOR'S PROCLAMATION 20-28.
THE PHONE NUMBER FOR THE PUBLIC TO LISTEN TO THIS
MEETING IS: 1-253-292-9750, Access Code 665320301#
Item
Recommended Action
Page
1. BUSINESS AGENDA
a. King County Coronavirus Relief Fund Grant in the
a. Committee consideration/
Pg.1
amount of $31,965.
decision.
Derek Speck, Economic Development Administrator
b. Economic Development Work Plan.
b. Discussion only.
Pg.5
Derek Speck, Economic Development Administrator
c. Tourism funding: Work Plan.
c. Discussion only.
Pg.11
Brandon Miles, Business Relations Manager
d. Tourism funding: Tourism promotion and lodging tax
d. Discussion only.
Pg.15
briefing.
Brandon Miles, Business Relations Manager
e. "Experience Tukwila": Performance measures.
e. Discussion only.
Pg.33
Brandon Miles, Business Relations Manager
2. MISCELLANEOUS
Next Scheduled Meeting: August 17, Z0Z0
SThe City of Tukwila strives to accommodate individuals with disabilities.
Please contact the City Clerk's Office at 206-433-1800(TukwilaCityClerk(a�TukwilaWA.gov) for assistance.
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Planning and Economic Development Committee
FROM: Derek Speck, Economic Development Administrator
CC: Mayor Ekberg
DATE: July 27, 2020
SUBJECT: Business Recovery Update: Grants
ISSUE
Staff requests Committee approval to use a $31,965 grant from King County's Coronavirus
Relief Fund.
BACKGROUND
King County allocated $1.95 million to cities within the County (except Seattle) to provide
economic relief and support to small and underserved businesses. On June 19, the City of
Tukwila was notified that we are eligible to receive $31,965. A copy of the County's objectives
and eligible expenditures is attached.
Eligible uses and examples of expenditures are described on page 2 of the attachment titled
King County Corona Virus Relief Fund — Subrecipient Grant Agreement. Potential uses of these
funds was briefly discussed at the Committee's meetings on July 6 and July 20. At the July 20
meeting the Committee focused on two options:
(1) Issuing small grants directly to businesses.
(2) Marketing Tukwila's International Boulevard through a program that includes small
business grants in combination street pole banners or flags representing the United
States and the main countries of origin for our residents with a social media component
to attract visitors to the area.
Staff has asked the County if street pole banners or flags would be an eligible expense under
their grant criteria. They are looking into it and we hope to have their answer in time for the
PED meeting.
DISCUSSION
Staff recommends using the funds to issue grants directly to small businesses. We recommend
the following approximate allocation:
Direct grants $26,000
Grant administrator $ 3,000
Interpretation and assistance $ 2,000
PPE 965
Total $31,965
INFORMATIONAL MEMO
Page 2
Grants would be up to $1,000 each and would reimburse businesses for business interruption
costs not previously satisfied by any other funding source. The grant administrator would be an
organization, such as Evergreen Business Capital, which is a lender certified by the US Small
Business Administration and a mission to provide financing to underserved communities. We
recommend reserving some funds for interpretation and assistance. This could be used to
translate documents, one-on-one interpretation, or small contracts with local non -profits to
provide technical assistance in our top languages to help businesses fill out the application.
Under this grant the City could purchase and give PPE to eligible businesses. That may be a
useful way to introduce the program and build relationships with very small businesses.
Due to the very limited funds, it would be unfortunate to set eligibility criteria so wide as to have
many applications that would be rejected due to lack of funds. Also, due to the small size of the
grants, it is important for the application process to be a simple as possible for the businesses,
the grant administrator, and the City. Thus, in addition to other basic criteria, staff recommends
the following key eligibility criteria:
a) Businesses with fewer than 10 FTEs
b) Located within the Tukwila International Boulevard District boundary
c) Occupies a brick and mortar location (versus purely online)
d) Gross annual revenues under $1 million
e) Properly paid the City business license for past two years
If we receive more applications than available funding, we recommend the following ranking
criteria:
a) Historically underserved business owner
b) Financial impact due to COVID-19 pandemic
c) Required to close under Washington State's Stay Home order
d) Required to reduce capacity and operations under Washington's Safe Start order
e) Serves key community need of child care
Staff is available to discuss variations of the above program or other alternatives.
FINANCIAL IMPACT
No budget changes are requested at this time; however, we would need an amendment to the
2020 budget to reflect the grant revenue and matching expenses of up to $31,965.
RECOMMENDATION
Authorize staff to implement the small business grant program as described.
ATTACHMENTS
King County Corona Virus Relief Fund — Attachment C Scope of Work
https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's Office/PED, August 3/King County Coronavirus Relief Fund/PED 2020-8-3
2 Infomemo Business Recovery Grants.doc
1. King County
King County Coronavirus Relief Fund
Subrecipient Grant Agreement
Economic Development for Cities
ATTACHMENT C - PROGRAM SCOPE OF WORK
1. Introduction
On May 12, 2020, King County Council passed Ordinance 19103, which allocated a total of $1.95
million for a grant program to support King County cities' economic relief and recovery activities in
response to the COVID-19 public health emergency. This grant program is intended to help
alleviate the significant adverse economic impact of COVID-19 on incorporated municipalities of
King County. The funds will be distributed to every city of King County, except for the city of
Seattle, based on per capita population with a minimum grant of $10,000.
Note: With the grant minimum set at $10,000, some of the calculated city allocations will be
adjusted slightly to keep the total programmatic allocation at $1.95 million.
2. Program Objectives/Outcomes
King County is seeking to achieve the following outcomes with this grant program:
a. Small businesses receive the support they need to overcome disruptions caused by COVID-19
b. Small businesses receive the support they need to safely re -opening while adhering to local
public health guidance and operating guidelines designed to protect employees and
customers
c. Support underserved and other priority small businesses that have not been able to access
other resources*
d. Help small businesses restart quickly, recover from the impacts of the pandemic, and
contribute to the overall economic stability of the community (i.e., revenues and jobs)
While King County empowers the subrecipient to define 'small business', cities should prioritize
grant funds to businesses that meet a reasonable standard of 'small' and have experienced acute
business interruption or require immediate assistance to adapt their services to adhere to public
health guidance and considerations.
* For the purposes of this grant program, King County considers historically underserved business
owners to be those from Black, Native, people of color, immigrant, refugee, and LGBTQ
communities.
3. Eligible Expenditures
The grant funds must be used for cities' economic relief and development activities in response to
COVID-19. The funds should only be used for costs that were not accounted for in the city's 2019
fiscal year budget and must comply with all federal requirements set for the Treasury's
Coronavirus Relief Fund (detailed in Attachment A "Federal Terms"). Expenditures must be
incurred in the period from March 1, 2020, through December 30, 2020, and must be recorded and
documented using the generally accepted accounting principles and the provisions of Title 2 CFR
Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements.
Attachment C — Scope of Work
Page 1 of 2
3
LQKing County
Expenditures may fall in any of the following broad categories:
❑ City internal operational expenditures
❑ City direct expenditures for small businesses
❑ Passthrough grants to small businesses to reimburse the costs of business interruption
caused by required closures.
The following list provides some examples of eligible expenditures:
• Materials to give out to businesses to facilitate safe opening (e.g., PPE, sanitation supplies,
plexiglass barriers, markers, signage)
• Rental of materials to increase the outdoor seating capacity for restaurant businesses
• Marketing materials for businesses
• Passthrough grants to businesses to reimburse business interruption costs not previously
satisfied by any other funding source
• Technical assistance to businesses (consulting services)
• Temporary staff hired to engage with businesses
• Consulting Services (business surveys, training, city marketing materials, etc.)
4. Grant Documentation & Reporting
EXIBIT #
Form/Report
Short Description
Interval
1
Pre -award: risk
Short survey to understand City's
With the intake
assessment questionnaire
administrative capacity
form preceding
agreement signing
2
Federal Funding
• Only for entities receiving grant funds in
With the signed
Accountability and
excess of $25,000.
agreement
Transparency Act (FFATA)
. King County will use this information to
(if the grant amount
Data Collection Form
report to www.FSRS.gov within 30 days
is in excess of
of the award.
$25,000)
• Template attached.
3
Bi-monthly performance
Summary expenditure report by eligible
Bi-monthly
report
activity
following
agreement signing
4
An expenditure report
A standard report generated from the
Within 30 days of
detailing all expenditures
city's official accounting system or
final payment
up to the grant amount
sufficient documentation to demonstrate
utilizing grant funds
grant expenditures, payee, and date of
transaction
5
Direct Grant &
A standard report that outlines all
Within 30 days of
Beneficiaries Report
businesses who received a direct grant
final payment
payment from the city, detailing business
utilizing grant funds
information and key demographic
indicators
Attachment C — Scope of Work
12
Page 2 of 2
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO:
Planning & Economic Development Committee
FROM:
Derek Speck, Economic Development Administrator
CC:
Mayor Ekberg
DATE:
July 27, 2020
SUBJECT:
Economic Development Workplan for 2020: Update
ISSUE
Staff seeks the Committee's feedback on the City's economic development workplan for 2020
and prioritization.
BACKGROUND
The City's Economic Development Division of the Mayor's Office leads the City's business
retention, attraction and marketing efforts, facilitates commercial real estate development, and
serves as a general liaison to the business community. The Economic Development Division
also manages the City's lodging tax program.
Staff provided a draft of the economic development division's workplan for 2020 to the
Committee at its meeting on January 13, 2020. At that time, the Committee expressed a desire
for the Economic Development Plan to be completed by summer 2020 and recognized that
would require hiring a consultant. On 2/3/20 the Committee gave staff approval to issue an RFP
to select a consultant and acknowledged the cost would be $50,000 to $70,000 and would
require a budget amendment.
In early March 2020 the COVID-19 pandemic was becoming more obvious and on March 16,
2020 the Governor announced a statewide closure of all restaurants, bars, entertainment and
recreational facilities, and a limit on large gatherings. During this time Economic development
staff turned its focus to supporting the City's emergency operations unit and helping businesses
mitigate, respond, and recover. Throughout the pandemic, staff has spent most of its time on
business recovery work such as the following:
1. Provided information to businesses through the City's website and emails (approximately
weekly) with information and resources.
2. Monitored the pandemic and its effect on the economy.
3. Created and implemented the Great Tukwila Carry -Out marketing campaign to support
restaurants.
4. Provided recommendations on the State's Working Washington Small Business
Emergency Grant Program.
5. Conducted weekly "windshield surveys" of Tukwila businesses closure compliance and
business activity assessment.
6. Participated in the Southside Mitigation and Recovery Taskforce (SMART) which is lead
by the Seattle Southside Chamber of Commerce.
5
INFORMATIONAL MEMO
Page 2
7. Created and implemented www.SavingLocalKC.com with a marketing campaign to help
local businesses make online and phone sales transactions.
8. Conducted a business survey (online and via telephone).
9. Explored collaborations with other regional partners for grants such as the opportunity
from the US Economic Development Agency.
DISCUSSION
The City's current draft of the economic development division's workplan for 2020 is attached
with changes from the January version shown in strikeout and underline. The main change is
that, due to the pandemic, staff has been working on business recovery instead of the economic
development plan.
Following are ongoing business recovery work items:
1. Following up with requests or specific needs indicated by some of the businesses
through their survey responses or other contacts.
2. Providing information to businesses through the City's website and emails
(approximately weekly) with information and resources.
3. Monitoring and researching to understand the economy's recovery and to find additional
resources.
4. Expanding marketing for Saving Local KC.com.
5. Expanding marketing and branding through ExperienceTukwila.
6. Continuing our work with the Lodging Tax Advisory Committee and exploring more ways
to support business recovery such as a rebate program.
7. Supporting the Chamber of Commerce's Southside Promise program and using the Port
of Seattle grant for additional business advisory assistance.
8. Exploring marketing and event partnerships with Westfield Southcenter and other
businesses.
9. Coordinating Tukwila's use of the $31,965 CARES Act grant from King County.
10. Monitoring for other grant opportunities.
11. Supporting City regulation revisions, if needed, to support business.
If the Committee and Council are interesting in making the economic development plan a top
priority, some considerations are:
1. Authorizing funding
2. Outreach will need to be more online and through virtual meetings than in person. Some
businesses may not be as available to participate as they focus on recovery.
3. The economy is in a drastic state of flux. We would need to make assumptions as to the
timing of the recovery and what the economy will look like afterward. For example, a
vaccine could significantly affect how businesses operate.
4. What other work should be a lower priority.
One option is to work on the economic development plan as time is available as a secondary
priority but to elevate specific work items that are relatively easy to implement and move forward
now. As an example, the City could create an inexpensive marketing campaign that focuses on
attracting a particular business cluster such as those related to architecture and interior design
https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's Office/PED, August 3/Economic Development Workplan/Economic
Development Workplan Infomemo.doc
6
INFORMATIONAL MEMO
Page 3
since we are so close to the Seattle Design Center. Staff welcomes feedback from the
Committee on items that could fit into the workplan.
FINANCIAL IMPACT
This item has no financial or budget impact at this time.
RECOMMENDATION
Information and discussion only.
ATTACHMENTS
Current Economic Development Workplan for 2020
https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's Office/PED, August 3/Economic Development Workplan/Economic
Development Workplan Infomemo.doc
7
City of Tukwila
MAYORS OFFICE
ECONOMIC DEVELOPMENT DIVISION
2020 WORKPLAN - DRAFT 7-27-20
Tukwila Village A Support Tukwila Village Community Development Associates (non-profit)*
B Approve developer parking management plan*
C Approve estopple certificate of completion for Phase 2*
Land Sales A Coordinate sale of city property to HealthPoint for health and wellness center*
B Coordinate sale of Longacres parcel
C Coordinate sale of Newporter parcel
D Coordinate sale of former fire station 53 parcel
E Coordinate sale of Minkler parcel
F Coordinate sale of George Long shops parcel
Public Safety Plan A Coordinate sale of Traveler's Choice property to affected businesses*
B Support project management team with design and permit review*
Economic A Create an economic development plan for Tukwila
Development B Increase understanding and inclusion of equity and social justice*
Plan
Business A Monitor the pandemic, economy and resources. Inform businesses*
Recovery B Coordinate use of $31,965 business support grant from King County*
C Develop and implement SavingLocalKC.com*
D Conduct business survey* - Done
E Provide recommendations for Working Washington Grants* - Done
F Conduct windshield surveys for business compliance and activity* - Done
G Develop and implement the Great Tukwila Carry -out* - Done
Lodging Tax A Coordinate committee including applications, contracts, and reporting*
Advisory B Monitor legislative issues
Committee C Build upon business relationships*
Branding and A Lead development of branding and wayfinding plan*
Tourism B Build partnerships with strategic organizations (e.g. Sounders and Seawolves)
Marketing C Facilitate and sponsor special events such as Rave Green Run, etc.
D Facilitate art in Southcenter District*
E Facilitate Baker Boulevard for festivals and events
F Facilitate improvement of Tukwila Pond Park*
G Develop strategy to grow entertainment attractions
H Develop and implement digital media strategy for ExperienceTukwila*
I Develep ai-sicai iii^cai'a strategy for yisitin^,�—and iyin^,�—in the
Policy A Manage City's regional transportation policy and advocacy*
B Participate in zoning and on street parking policy for Tukwila Int'I Boulevard*
Page 1 of 2
9
MAYORS OFFICE
City of Tukwila ECONOMIC DEVELOPMENT DIVISION
2020 WORKPLAN - DRAFT 7-27-20
Business A Marketing to attract business and development
Retention, B Networking to attract business and development
Expansion, and C Respond to business inquiries*
Attraction D Support development of TIB with branding, business development, etc.
E Support maintenance of KentValleyWA.com and SoundsideAlliance.com*
F Provide permitting assistance for priority projects*
Regional ED A Participate in Greater Seattle Partners, Chambers of Commerce,
Organizations Seattle Sports Commission, Int'I Council of Shopping Centers, etc.
Other A Coordinate development agreements (when ED is the lead)
B Manage multi -family property tax exemption program (approved projects)
C Coordinate Port of Seattle economic development grant*
Administrative A Participate on Administrative Team*
C Staff Soundside Alliance for Economic Development*
D Staff Port of Seattle Roundtable (START)*
E Staff Airport Budget Proviso Working Group*
Small Projects A Business ewtFeaeh feF plastic bag peliey
B nnicaraa-study
C Crosswalk art - Done
D 4Culture grant for Old City Hall preservation plan
E Bank De -Risking - Done
Potential Projects A Adapt to economic development plan
B Coordinate way to leverage business community relationships
C Evaluate ZIP code effect on city tax revenue and image
D Support analysis of sales tax
E Participate in Green and Duwamish River related policies (e.g. levee)
F Support analysis of affordable housing economics and policy
G Expand branding related to business retention, expansion, and attraction
H Support special event permit process to attract strategic festivals and events
I Participate in regional economic development policy such as PSRC
J Coordinate policy review for expansion of multi -family tax exemption program
Notes:
Top priority items for 2020 are indicated by an asterisk
Items that have been removed from the original workplan are shown in strike through.
Items that are underlined have been added since January.
10
Page 2 of 2
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Planning and Economic Development
FROM: Brandon Miles, Business Relations Manager
CC: Mayor Ekberg
DATE: July 27, 2020
SUBJECT: Tourism Funding: Work Plan
ISSUE
Schedule for briefing Planning and Economic Development (PED) are issues related to tourism
funding as part of 2021/2022 budget update process.
BACKGROUND
At the July 20 PED meeting staff provided an overview of the status of the lodging tax fund and
requesting input on items to be reviewed as part of the lodging tax budget update. The lodging
tax budget is scheduled to be completed in October to be included in the City's overall budget.
DISCUSSION
Based upon last meeting's discussion, as well as previous discussions with PED, staff
has prepared the following draft schedule, including the dates for briefings to PED on
specific topics. Staff would like feedback (removing or adding items) on the topics as
well as which items should go to the full City Council for briefing. Staff will prepare a
final document to transmit to the full council with the final budget.
Committee
Topic
Meeting Date
Outcomes/Goals
Notes
Name
PED
Tourism Funding:
August 3, 2020
PED gains an
This initial
Tourism
understanding of
discussion
Promotion and
the different
started on June
Lodging Tax
tourism funds
1. This will be a
Briefing
being used to
continued
promote the City.
discussion with
PED.
LTAC
Briefing to LTAC
August 14,
Begin to get input
2020
from LTAC
members about
funding priorities.
PED
Lodging Tax
August 17,
Review revenue
Revenue and
2020
forecasts for
Ending Fund
2021 and 2022.
Balance
Forecasts
PED
Lodging Tax
August 17,
Understand what
Allowable Uses
2020
is eligible and
and Process for
what is not
using funds
eligible for use of
11
INFORMATIONAL MEMO
Page 2
lodging tax funds.
PED
Historical Uses of
August 17,
Understand how
Lodging Tax
2020
the City has
Funds
historically used
lodging tax funds,
including
background on
groups that have
received funds in
the past.
LTAC
Continued
September 11,
Discussion on
Discussion with
2020
LTAC priorities
LTAC.
for 2021 and
2022.
PED
Tourism
September 21,
Background on
Note, due the
Promotion Area
2020.
TPA, TPA
Labor Day
(TPA) and
Interlocal
Holiday there is
Seattle Southside
Agreement, and
no meeting on
Regional Tourism
the City's
September 7.
Authority
agreements with
(SSRTA)
SSRTA. Discuss
any possible
updates to the
TPA ILA.
PED
SSRTA Return
September 21,
Understand how
on Investment
2020
SSRTA
(ROI)
calculates its
ROI.
PED
Measurement of
September 21,
Discuss how the
Success for
2020
City wants to
Tourism
measure success
Promotion
of both lodging
Activities.
tax and TPA
funds.
PED
Other? What else
October 5,
Discuss new
could we be
2020.
activities,
doing and what
specifically
other
possible new
opportunities are
festivals and also
out there.
discuss
partnerships with
Visit Seattle and
Kent Valley Wa
cities.
PED
Creation of
October 5,
Discuss
Tourism Funding
2020
allocation of
Allocation
funds based on
https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's Office/PED, August 3/Tourism Funding, Work Plan/Tourism Funding Info
12 Memo, no attachments.doc
INFORMATIONAL MEMO
Page 3
Buckets.
the City's overall
goals.
PED
Draft 2021 /2022
October 5,
Draft budget for
Lodging Tax
2020
PED
Budget
consideration.
LTAC
Funding requests
October 9,
Forward funding
for 2021 and
2020
requests to City
2022.
Council for
review.
PED
Lodging Tax
October 19,
Review of funding
Funding
2020
requests
Requests
forwarded by the
LTAC to the City
Council.
PED
Final Budget for
October 19,
Review budget
Committee
2020
and forward to
consideration
the full City
Council.
FINANCIAL IMPACT
None.
RECOMMENDATION
Discussion only.
ATTACHMENTS
None.
https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's Office/PED, August 3/Tourism Funding, Work Plan/Tourism Funding Info
Memo, no attachments.doc
13
14
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Planning and Economic Development
FROM: Brandon Miles, Business Relations Manager
CC: Mayor Ekberg
DATE: May 20, 2020, Updated July 27, 2020
SUBJECT: Tourism Funding Discussion
ISSUE
In light of the COVID-19 pandemic's impact on the economy and role of tourism in business
recovery, staff would like to provide an overview and background on how the City's uses the
lodging tax and TPA funds.
This item was originally discussed at the June 1, 2020 PED meeting. Staff would like to continue
the discussion and has included a new attachment.
BACKGROUND
Over the last 20 years the City Council has authorized the collection of two separate revenue
sources for tourism funding. These revenue sources include the City's lodging lax and Tourism
Promotion Area (TPA) fee. In 2019, in total just over $1.5 million of combined funds were
collected through the lodging tax and TPA fee. In light of COVID-19 pandemic's impact on the
overall economy and role of tourism in business recovery, staff would like to provide an
overview and background on how the City's uses the lodging tax and TPA funds. Each of the
two revenue sources is authorized under a separate RCW and each have specific limitations on
how the funds can be used.
Lodging Tax
Statutory Authority
Lodging tax (City's 101 Fund) is collected pursuant to RCW 67.28 and TMC 3.40. State law
allows the City to collect 1 % on eligible stays in lodging businesses (hotels, extended stays,
motels, bread and breakfasts, and Airbnbs). Certain stays for emergency housing and for any
stay in a lodging business that exceeds 30-days are exempt from the tax. Like retail sales tax,
the lodging tax is remitted by the lodging businesses to the Department of Revenue and the
remitted back to the city two months after collection.
Allowable Uses
RCW 67.28.1818 limits the use of lodging tax funds as follows:
"All revenue from taxes imposed under this chapter shall be credited to a special fund in the
treasury of the municipality imposing such tax and used solely for the purpose of paying all or
any part of the cost of tourism' promotion 2, acquisition of tourism relations facilities, or
operation of tourism related -facilities. "
' RCW 67.28.080 defines `Tourism' as "economic activity resulting from tourists, which m ay includes sales of
overnight lodging, meals, tours, gifts, or souvenirs."
2 RCW 67.28.080 (6) defines `Tourism Promotion' as "...activities, operations, and expenditures designed to
increase tourism, including but not limited to advertisings, publicizing, or otherwise distributing information for the 15
INFORMATIONAL MEMO
Page 2
RCW 67.28.1816 goes into further detail about permitted expenditures of lodging tax funds,
specifying:
"Lodging tax revenues under this chapter may be used, directly by any municipality or indirectly
through a convention and visitors bureau or destination marketing organization for.
(a) Tourism marketing;
(b) The marketing and operations of special events and festivals designed to attract tourists;
(c) Supporting the operations and capital expenditures of tourism related facilities owned or
operated by a municipality or public facilities district created under chapters 35.57 and
36.100 RCW; or
(d) Supporting the operations of tourism related facilities owned or operated by nonprofit
organizations described under 26 U. S. C Sec. 501(c)(3) and 26 U. S. C Sec. 501 (c)(6) of
the internal revenue code of 1986, as amended.
It is important to point out that RCW 67.28 provides no definition of "tourist." Historically, the City
of Tukwila has defined as a "tourist" as someone who lives outside of Tukwila and visits the
City, either for a day or to spend the night. Additionally, there is a common misconception that
lodging tax funds can only be used to support activities that create "heads in beds" or travel
more than 50 miles. Again, this is not a requirement of State law. While the City must report
metrics, such as hotel stays and visitors, when using lodging tax funds. The funds do not have
to be awarded to activities that solely generate hotel room nights.
Under current state law, lodging tax funds cannot be used to support general city operations or
activities. Attached is a memo presented to the City Council in 2016, which provides more
details on allowable uses of lodging tax funds.
Status of Fund
As of May 7, 2020, there was $1.985 million in the City's lodging tax fund. In 2019, annual
revenues for lodging tax collection was just over $800,000. With the sharp drop off in travel, the
City is forecasting a significant drop off in lodging tax collection for 2020 and possibly for 2021.
The City is contractually obligated through 2020 to provide Seattle Southside Regional Tourism
Authority (SSRTA) $202,500 in lodging tax funds. Additionally, the City has two approved
applications to the City's Parks and Recreation Department of $40,000 for art along Baker Blvd
and $125,000 to help fund a master plan for Tukwila Pond'.
There is no requirement that the lodging tax fund be spent down annually. Unspent funds will
remain in the 101 fund and can be used in future years, subject to the use limitations outlined
above.
Historical Use of Funds
The largest single recipient of lodging tax funds from the City over the last 18 years has been
SSRTA. Until 2015, SSRTA was operated as Seattle Southside Visitor Service (SSVS) by the
purpose of attracting and welcoming tourists; developing strategies to expand tourism; operation tourism promotion
agencies; and funding the marketing of or the operation of special events and festivals designed to attract tourist."
3 RCW 67.28.080 (1) provides the following definition of `Acquisition' "...siting, acquisition, design, construction,
refurbishing, expansion, repair, and improvement, including paying or securing the payment of all or any portion of
general obligation bonds, leases, revenue bonds, or other obligations issued or incurred for such purposes..."
a The City also had an approved application and contract with the Seattle Seawolves, but this contract was canceled
due to the COVID-19 pandemic. Virtual Sports also had an approved application and staff has not yet entered into a
contract due to the scope of work being impacted by Stay Home, Stay Healthy Order.
https://tukwilawa.sharepoint.com/sites/maVorsoffice/cc/Council Agenda Items/Mayor's Office/PED, August 3/Tourism Funding, Tourism Promotion and Lodging
Tax/MEMO, Lodging Tax Policy, PED, 2020.06.01, Updated July 27.doc°Tukdata2k!2r t„
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INFORMATIONAL MEMO
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City of Tukwila. The Museum of Flight, City of Tukwila, Starfire Sports, Renton Chamber of
Commerce, and Seattle Southside Chamber of Commerce, and others have also received
funding in the past. Any entity, including for -profit organizations, is eligible to receive lodging tax
funds, provided it is engaged in activities eligible to be funded with lodging tax funds.
State Law requires that any proposed use of lodging tax funds be review by a Lodging Tax
Advisory Committee (LTAC). The City's LTAC comprises four lodging businesses; four entities
eligible to receive lodging tax funds; and one City elected official, who serves as the Chair of
LTAC. LTAC makes a recommendation to the City Council on whether an application should
receive funding. The City Council has final authority in approving a request for lodging tax funds;
however, the City Council cannot override a "no" from LTAC. The City Council can choose not
to fund an entity that LTAC recommend be provided funding. The City Council can also change
the amount of the funding, provided it provides the LTAC 30-days' notice of its intent to modify
the amount.
TPA Fee
Statutory Authority
Tourism Promotion Areas (TPA) are authorized under RCW 35.101. There is no corresponding
City TMC for TPAs. Outside King County individual cities, towns, and counties can form their
own TPAs. For most municipalities in King County, a TPA must include at least two
municipalities (this requirement does not apply to the City of Federal Way).
In 2014 the Cities of Tukwila, Des Moines, and SeaTac executed an interlocal agreement ("TPA
ILA)" to form a TPA to cover the combined boundaries of the three cities. Through the TPA ILA
the cities agreed that the City of SeaTac would serve as the legislative authority for the
combined city area. The City of SeaTac is responsible for overseeing the TPA on behalf of the
three cities. Any city can terminate its relationship under the TPA ILA Agreement by providing
one-year notice to the other city partners.
In 2014, after receiving a petition from hoteliers, the City of SeaTac formally adopted a
resolution setting out a TPA fee in the three -city area. The total fee was $2 per night per eligible
hotel stay in a hotel or motel with at least 90 rooms5. The $2 rate was the maximum permitted
under the current State law. State law was recently amended to allow the rate to go up to $5 per
night, provided 60% of the businesses that would pay the increase petition for the increase and
it is approved by the legislative authority.
Allowable Uses'
RCW 35.101.130 states that the Legislative Authority, "...shall have sole discretion as to how
the revenue derived from this charge is to be used to promote tourism promotion that increases
the number of tourists to the area."
`Tourism Promotion' is defined as, "...activities and expenditures designed to increase tourism
and convention businesses, including but not limited to advertising, publicizing, or otherwise
distributing information for the purpose of attracting tourists, and operating tourism designation
marketing organizations."
5 The TPA fee is a flat fee, while the lodging tax is a percentage. This allows the TPA to collect higher revenue than
the lodging tax when rates are low. For example, a room at a hotel going for $100 a night would only provide $1 in
lodging tax funds, while the TPA gets the full $2.
6 RCW 35.101 was amended by the last legislative session. These changes go into effect on July 1, 2020. Staff is
discussing the RCW as it will be amended in July.
httos://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's office/PED, August 3(Tourism Funding, Tourism Promotion and Lodging
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Unlike the lodging tax RCW, the TPA RCW provides a definition of tourist'.
A `tourist' means a person who travels for business or pleasure on a trip:
(a) Away from the person's place of residence or business and stays overnight in paid
accommodations;
(b) To a place at least fifty miles away one way by driving distance from the person's place
of residence or business for the day or stays overnight. However, island communities
without land access are exempt from the mileage requirement under this subsection
(5) (b); or
(c) To another country or state outside of the person's place of residence or business.
Status of Funds
Following provisions in the Interlocal Agreement, all TPA funds remitted for the TPA go directly
to SSRTA. In 2019, SSRTA received $3.96 million in TPA funds. Assuming that the TPA funds
are generated proportional to the number of hotel rooms in each of the three TPA cities,
Tukwila's portion of the TPA funds generated for SSRTA was just over $1.13 million, or 29%.
In early 2020, SSRTA budgeted ending 2019 (unaudited) with an ending fund balance of $4.45
million. This includes both TPA funds it received, lodging tax funds received from the three
cities, and misc. revenue.
Historical Use of Funds
As outlined above, 100% of the funds remitted for the TPA go directly to SSRTA. The City of
Tukwila does not receive the funds. SSRTA uses these funds for tourism promotion activities
and administration costs.
Seattle Southside Regional Tourism Authority
SSRTA is the City's primary destination marketing organization$. SSRTA mission is to help
promote the Seattle Southside region (cities of Des Moines, Tukwila, and SeaTac) for tourism.
In 2019, SSRTA had total operating expenditures of $4.297 million (See below).
SSRTA is the successor to Seattle Southside Visitor Service (SSVS), which until 2015 was run
as a division of Tukwila's Economic Development Office. The Cities of Des Moines and SeaTac
were serviced by SSVS via interlocal agreements with the City of Tukwila. At one time the City
of Kent was also served by SSVS but left in 2014.
In 2012 the Cities of Tukwila, SeaTac, and Des Moines began to have conversations about
forming a TPA, with the goal of providing additional funds for tourism promotion activities. These
conversations were the result of requests by area hoteliers for the cities to consider creating a
TPA. As discussed above, the cities entered an interlocal agreement in 2014 for the creation of
a TPA. A TPA fee began to officially be collected in the spring of 2015.
Through the TPA ILA, the cities of Tukwila, SeaTac, and Des Moines also provided a
recommended amount of lodging tax funds each city would provide to SSRTA annually. The
lodging tax contribution is a "recommended amount" and no City is contractually obligated to
' This definition goes into effect on July 1, 2020.
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INFORMATIONAL MEMO
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provide the amount listed in the TPA ILA. The table below shows the suggested lodging tax
contributions to SSRTA from the three TPA cities.
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INFORMATIONAL MEMO
Page 6
Year
SeaTac9
Tukwila
Des Moines10
2014
$835,000
$712,000
100% of
lodging tax
funds.
2015
$460,000
$405,000
2016
$383,333
$337,500
2017
$306,666
$270,000
2018 and
beyond
$230,000
$202,500
The TPA creation provided addition funds available for tourism promotion activities in the
Seattle Southside region. The table below shows the total expenditures for SSVS and SSRTA
since 2010. In 2016 the total expenditures for tourism promotion by SSRTA increased over
180% from the prior year.
Year
Total Expenditures
(SSVS and SSRTA)
% Change in
SSVS and
SSRTA
Expenditures
from previous
year.
Total Lodging
Revenue in the
Cities of Des
Moines, Tukwila,
and SeaTac.
% Change in
lodging
revenue from
previous year.
2010
$1,321,879
N/A
$190,337,838
N/A
2011
$1,525,988
15.44%
$201,068,568
5.64%
2012
$1,470,058
(3.67%)
$217,520,038
8.18%
2013
$1,428,043
2.86%
$230,190,887
5.83%
2014
$1,462,123
2.39%
$259,819,652
12.87%
2015"
$1,504,207
2.88%
$292,605,392
12.62%
2016
$4,248,883
182.47%
$302,062,920
3.23%
2017
$4,533,770
6.70%
$318,864,960
5.56%
2018
$4,634,628
2.22%
$330,574,999
3.67%
2019
$4,297,657
(7.27%)
Data not yet
available.
N/A
In March, SSRTA began projecting a significant revenue reduction of TPA fees because of the
COVID-19 pandemic (see below).
9 The City of SeaTac has chosen to provide more funds to SSRTA than what was outlined in the TPA ILA.
10 The City of Des Moines no longer provides 100% of its lodging tax funds collected to SSRTA.
" SSRTA did not take over the functions of SSVS until the end January 1, 2016. The expenditures provided for
2011 are Tukwila's expenditures for SSVS.
httos://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's office/PED, August 3(Tourism Funding, Tourism Promotion and Lodging
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INFORMATIONAL MEMO
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Seattle 5outhside Regional Tourism Authority (RTA] Financial Pro Forma
2020-2022
2019
2019
2020
20ZO
2021
2022
Approved
Approved
Projection
Projection
projecticn
Budget Year-end Actuals
Budget
(unaudited)
Revenues
1 TPA Special Assessments
5 3,674,82S $
3,963,260
$ 3,900,000 S
1,252,474
$ 3,170,608
S 3,368,771
2 LTC -Tukwila
202,500
202,SD0
202,S00
202,500
202,500
202,500
3 LTC-SeaTac
830,000
830,000
930,000
830,000
830,000
830,D0o
4 LTC -Des Moines
111,000
52,497
55,500
15,000
10,000
25,000
5 Interest Revenue
48,500
71,829
65,000
22,500
6,000
7,5D0
6 Misr, Other Revenue
2,500
10,422
2,SOD
5,500
5,500
S,SDO
7 Advertising
7S,000
40,480
50,000
7,500
7,500
7,500
Total Revenues $ 4,944,325 $
5,170,989
$ 5,105,500 $
2,335,474
$ 4,232,108
$ 4,446,771
Expenditures
8 Salaries& Benefits
$ 1,622,209 S
1,451,758 $
1,630,500 $
1,459,652
$ 1,465,000 $
1,567,550
9 Supplies
31,000
14,197
15,000
10,000
13,Soo
14,DDO
10 Small Equipment
20,000
5,755
20,000
11,000
7,000
7,D0o
11 Professional Services/Ads/Prc m otio ns
2,200,000
2,013,177
2,323,000
2,098,250
2,100,000
2,200,000
12 Communications/Postage
81,000
36,088
41,000
30,000
33,000
36,D00
13 Travel
115,000
47,357
80,000
13,000
47,500
60,00o
14 Operating Leases
120,000
87,512
120,000
110,636
119,000
120,000
15 Insurance
12,000
10,611
12,000
11,00o
12,000
13,000
16 Maintenance
6,000
3,654
6,000
3,800
3,900
4,D00
17 Mfscellaneous/Printing
861,000
S89,609
7S1,000
530,000
600,000
675,D00
18 Capital -Digital Images
39,000
11,000
39,000
11,000
15,000
20,000
Total Operating Expenditures
5,107,209
4,270,718
5,037,590
4,288,338
4,415,90-0
4,716,550
19 Capital Outlay
100,000
26,938
68,000
20,000
25,000
23,000
Total Expenditures and Capital Outlay
5,207,209
4,297,657
5,105,500
4,308,338
4,440,900
4,739,550
20 Excess of Revenues over (under) expenditures
(262,984)
873,333
-
(1,972,864)
(209,792)
(292,779)
Beginning Fund Balance
$ 2,153,571 $
3,582,569 $
3,94Z,503 $
4,455,902
$ 2,483,037 $
Z,Z74,246
Ending Fund Balance
$ 1,890,687 $
4,455,902 S
3,942,503 $
2,483,037
$ 2,Z74,246 $
1,981,467
Contingency Reserve (2 months)
$ 968,042 $
716,419 $
939,751 5
714,966
$ 736,131 $
786,249
Economic Downtum/Recession Reserve (11% of SA)
$ 404,231 $
435,959 $
429,000 $
137,772
$ 349,767 S
370,565
Capital Asset Replacement Reserve
$ 110,000 S
110,076 $
183,465 S
193,465
$ 183,465 S
183,465
Unassigned Balance
$ 508,414 $
3,193,449 $
2,490,286 $
1,446,934
$ 1,DD5,893 S
641,189
DISCUSSION
Staff would like to start having discussions with the City Council and the hospitality community
regarding some policy issues with tourism funding for the City of Tukwila. Staff has identified
several issues, which are discussed below. Staff envisions that additional issues/questions
could come as we move through this process. The goal is to get direction from the City Council
on 2020 expenditure plans and the development of the 2021/2022 City budget.
1. Need for Strategic Focus for Lodging Tax and TPA Funds.
In 2019, the City started to prepare a Six Year Financial Model for lodging tax (See
Attached). While non -binding, the Financial Model is the City's first effort to strategically
examine how lodging tax could be used to advance overall strategic initiatives. Given
the changes due to the COVID-19 pandemic, staff seeks Council's direction on whether
any of the potential projects in the Financial Model are no longer of interest or if other
projects should be added.
httos:l/tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's office/PED, August 3/Tourism Funding, Tourism Promotion and Lodging
Tax/MEMO, Lodging Tax Policy, PED, 2020.06.01, Updated July 27.dccU kdata2k1mr'fi, Gnrn., An, .C-Arnr,,,n tmAn,;unf6A4prnARP,,nnt6 der
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2. Lack of Marketing Efforts for Tukwila in the Greater Seattle Area.
In 2017, the City of Tukwila engaged Bill Baker, a renowned destination brand consultant to
guide the City in the development of a City brand12. Mr. Baker's work also included a
significant discussion and survey on how people view the City within the Seattle region. This
work included telephone surveys, online surveys, and focus groups. There was considerable
discussion on the name the City should use to market itself. Name suggestions included,
Southcenter, Tukwila, and Seattle Southside. Through Mr. Baker's work the City determined
that the "Tukwila" name had strong brand identification within the Seattle area. Mr. Baker's
work completed work including the development of a brand strategy, brand blueprint, and
brand style guide. The City Council formally adopted Mr. Baker's brand recommendations in
2018.
Since 2018 staff has been working on efforts to market Tukwila within the Greater Seattle
area, generally within 50 miles of the City. These efforts have primarily included sponsoring
events, such as the Rave Green Run and Food Truck Rodeo at Westfield Southcenter. As
part of the COVID-19 response, the City quickly launched social media channels to help
promote businesses open and to help highlight resources available to businesses.
The City should consider other opportunities to promote itself, specifically the City should
consider the development of a website focused on visitors and business attraction; limited
ad buys; and ongoing public relations outreach.
3. Tourism Promotion versus Destination DeveloDment
Historically the City has provided lodging tax funds for initiatives and activities that are
focused more on tourism promotion and have not provided lodging tax funds for destination
development. Examples of tourism promotion activities include funding for marketing and
sales. Destination development includes capital projects and developing/sponsoring
festivals and events to be held in the City. In 2019, the City began to take steps to begin to
develop the destination by awarding funds complete a master plan for Tukwila Pond and to
install art along Baker Blvd. Other possible examples of destination development including
the creation of a Riverwalk along the Green River and installation of wayfinding signage.
The City also launched the Tukwila International Food Truck Rally last year in partnership
with Westfield Southcenter.
Given the differences between the allowable uses between lodging tax funds and TPA
funds, the City may want to consider creating distinction between how the funds can be
used with regards to tourism promotion and destination development. Tourism promotional
activities, such as what SSRTA is providing, generally are for tourism promotion and
marketing activities. Given that well over $3.5 million of funds are being provided for tourism
promotion to SSRTA via the TPA funds, the City should consider how lodging tax funds can
be used for destination development. As a reminder, lodging tax funds can be used for
capital projects and the City can also bond against the future lodging tax funds.
" This "brand" is for tourism and economic development use only and is not a City brand.
httos://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's office/PED, August 3(Tourism Funding, Tourism Promotion and Lodging
Tax/MEMO, Lodging Tax Policy, PED, 2020.06.01, Updated July 27.docU kdata2k12kr'fi, Gnrnrn,,,�r mm,,. tmAn,;us.nne., ARPe 0016 dAA
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4. Lack of other organizations doing tourism promotion and tourism development activities,
such as downtown associations and neighborhood groups.
One of the biggest tourism limitations in the City of Tukwila is the lack of our organizations
that are directly or indirectly involved in tourism promotion and destination development in
the region. Take for example Pioneer Square, which has Visit Seattle, the Downtown
Association, Seattle Chamber, and the Pioneer Square Association all engaged in some
tourists related activities. Having a variety of organizations working on tourism development
issues would strengthen the City's overall tourism appeal. For example, the Pioneer Square
Association works on developing art in the Pioneer Square District (destination
development), which Visit Seattle uses as content for its tourism promotion activities.
When other organizations do destination development and tourism promotion they directly
and indirectly market the City. For example, Destination Des Moines promotes Des Moines
via videos and events as does Discover Burien. The City of Tukwila lacks these types of
organizations; thus the City has tried to fill the void.
5. Leveraging Lodginq Tax Funds to Obtain Grants.
Another option the City should consider is using lodging tax funds as match to obtain federal
and state grants for infrastructure projects that support tourism.
6. The Need for More Varied Use of Lodging Tax Funds.
Many cities award a large number of smaller lodging tax grant applications for activities
occurring in their cities. For example, the City of Renton, which historically collects less
lodging tax funds than Tukwila, regularly has upwards of 20 applications per year for lodging
tax funds. These applications are often for small amounts to support small events, festivals,
and activities. Smaller activities help to develop a destination and help to create a distinct
and unique visitor experience. Economic Development staff has been working to attract
other groups to the City and to help existing groups explore securing lodging tax funds for
eligible activities.
7. Using Lodging Tax Funds for Business Attraction
The City's Economic Division is funded primarily from the City's general funds. Starting in
2019, some labor costs in Economic Development were funded by lodging tax funds. Some
cities use lodging tax funds to help marketing the City for business attraction. Given that
many guests in Tukwila hotels are business travelers there is a strong argument that
increased economic activity from business attraction woudl bring more overnight guests
(business travelers) to the City. Note, staff has not engaged legal on the question of whether
lodging tax funds could be used for business attraction.
Additionally, the City could also provide funds to the Chamber of Commerce in order to help
it with its mission of supporting area businesses and attracting businesses to the City.
8. Lack of Metrics to Track Success
The City lacks metrics to follow to track success of the lodging tax program and TPA.
FINANCIAL IMPACT
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INFORMATIONAL MEMO
Page 10
None.
RECOMMENDATION
This is for discussion only. Staff would like to have ongoing discussions with the Committee and
create recommendations to take the full Council for policies on the use of lodging tax and TPA
funds.
ATTACHMENTS
• Memo dated September 23, 2016, "Permitted Uses of Lodging Tax Funds."
Lodging Tax Six Year Financial Model, updated July 14, 202()
• Tourism Funding at a Glance-
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City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance and Safety Committee
FROM: Brandon J. Miles, Business Relations Manager
CC: Mayor Ekberg
DATE: September 23, 2016
SUBJECT: Permitted Uses of Lodging Tax Funds.
ISSUE
The City charges a 1 % special excise tax on the sale of or charge made for overnight lodging
stays. State law limits how these funds can be used. This memo outlines the limits on the use of
lodging tax and discusses permitted and prohibited use of the funds'.
BACKGROUND
Revised Code of Washington (RCW) 67.28.1815 limits the use of lodging tax funds as follows:
[A]II revenue from taxes imposed under this chapter shall be credited to a special fund in
the treasury of the municipality imposing such tax and used solely for the purpose of
paying all or any part of the cost of tourism2 promotion 3, acquisition of tourism -related
facilities, or operation of tourism -related facilities.
RCW 67.28.1816 goes into further detail about permitted expenditures of lodging tax funds,
specifying:
Lodging tax revenues under this chapter may be used, directly by any municipality or
indirectly through a convention and visitors bureau or destination marketing organization
for. -
(a) Tourism marketing;
' RCW 67.28 places strict limits on the type of entities eligible to receive lodging tax funds. Additionally,
approving expenditures of lodging tax funds is a two-step process, requiring review by the City's Lodging
Tax Advisory Committee and City Council. State Law gives considerable authority to the City's Lodging
Tax Advisory Committee in reviewing and approving funding requests. For more information on entities
eligible to receive funding and the process for awarding funds, see the memo dated September 22, 2016,
entitled, "Lodging Tax Approval Process."
2 RCW 67.28.080 defines "Tourism" as "economic activity resulting from tourists, which may include sales
of overnight lodging, meals, tours, gifts, or souvenirs."
3 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."
4 RCW 67.28.080 (1) provides the following definition of "Acquisition" ..."includes, but is not limited to,
siting, acquisition, design, construction, refurbishing, expansion, repair, and improvement, including
paying or securing the payment of all or any portion of general obligation bonds, leases, revenue bonds,
or other obligations issued or incurred for such purpose or purposes under this chapter."
25
INFORMATIONAL MEMO
Page 2
(b) The marketing and operations of special events and festivals designed to attract
tourists;
(c) Supporting the operations and capital expenditures of tourism -related facilities5
owned or operated by a municipality or a public facilities district created under
chapters 35.57 and 36.100 RCW; or
(d) Supporting the operations of tourism -related facilities owned or operated by nonprofit
organizations described under 26 U. S. C. Sec. 501(c)(3) and 26 U. S. C. Sec.
501(c)(6) of the internal revenue code of 1986, as amended.
DISCUSSION
Several Councilmembers have inquired about permissible uses of lodging tax funds. Based
upon the limitations outlined above, staff would like to provide some guidance on the future use
of lodging tax funds.
A simple question that can be asked to help determine if lodging tax funds can be used is
"Is the activity, operation or expenditure designed to increase tourism or welcome tourists to the
City?"
If the answer is yes, then lodging tax might be able to be used after further analysis of the
specific funding request.
Tourism could include people who travel and stay overnight in the City (overnight visitors) or
those who travel to the Tukwila for the day (day visitors). Economic activity from Tukwila
residents would not be considered tourism.
The following lists examples of activities, operations and expenditures that would likely be
eligible for lodging tax funding. This is not intended to be an exhaustive list.
• Marketing and advertising intended to bring overnight visitors to the City.
• Marketing and advertising intended to bring day visitors to the City.
• Installation of new "way finding" signs for tourists and installation of City identification
signs.
• Sponsoring, operating, and marketing of special events or festivals, either by the City or
third parties, if designed to bring tourists to the City.
• Installation of banners on street poles or across city streets if either welcoming tourists to
the City or promoting upcoming events.
• Capital improvements, such as park improvements or trail improvements, designed to be
used primarily by tourists.
• Maintenance of parks primarily used by tourists, such as Fort Dent Park or the Green
River trail.
5 RCW 67.28.080 (7) defines "Tourism -related facility" as, "...real or tangible personal property with a
usable life of three or more years, or constructed with volunteer labor that is: (a)(i) Owned by a public
entity; (ii) owned by a nonprofit organization described under section 501(c)(3) of the federal internal
revenue code of 1986, as amended; or (iii) owned by a nonprofit organization described under section
501(c)(6) of the federal internal revenue code of 1986, as amended, a business organization, destination
marketing organization, main street organization, lodging association, or chamber of commerce and (b)
used to support tourism, performing arts, or to accommodate tourist activities."
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INFORMATIONAL MEMO
Page 3
• Supporting marketing and operations of government entities (City of Tukwila and SSRTA)
or nonprofit organizations, when activities performed are designed to attract tourists to
the City or welcome tourists to the City.
The following lists examples of activities, operations and expenditures that would likely NOT be
eligible for lodging tax funding. This list is not intended to be exhaustive.
• Funding basic general governmental operations of the City6
• Marketing and advertising directed at residents.
• Way finding signs in residential areas intended for residents.
• Sponsoring of special events or festivals intended for residents.
• Capital improvements, such as park improvements, intended for residents (such as at
parks used primarily by residents).
• Maintenance of parks primarily used by residents, such as Hazelnut Park.
• Capital expenditures for tourism related facilities owned or operated by a non-profit.
Reportinq Requirements
RCW 67.28.1816 requires that entities receiving lodging tax fund report metrics back to the
municipality. Per State Law, the following is required to be submitted to the City in the project
close out for a specific funding request:
1. Actual number of people traveling for business or pleasure on a trip.
2. Number of people traveling for business and pleasure and staying in paid
accommodations in the City.
3. Visitors who traveled more than 50 miles or more from their place of residence of
businesses for the day or staying overnight.
4. Visitors who traveled from another county or state.
It is important to note that the City's Lodging Tax Advisory Committee is granted significant
authority by RCW 67.28.1816 when reviewing lodging tax requests. The City Council cannot
reverse a decision of the Committee if the Committee chooses not to approve a specific funding
application. Traditionally, the Committee has considered the metrics outlined above very
strongly when considering funding requests.
RECOMMENDATION
Information and discussion only. Forward to the October 10, 2016 Committee of the Whole
meeting for discussion by the full Council.
ATTACHMENTS
• None.
6 The City is permitted to charge special funds, like the lodging fund, for costs incurred by the general
fund to support the special funds.
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m
DRAFT, DISCUSSION ONLY
Lodging Tax Six Year Financial Plan
Forecasted
Actuals
Year 2019 2020 Budget 2020, Updated 2021 2022 2023 2024
Revenue
Orginal Estimated Amount $ 800,000 $ 800,000 $ 840,000 $ 882,000 $ 926,100 $ 972,405
Lodging Tax Collection (Revised, 5/7/20) $ 819,095 $ 800,000
Expenses
Marketing, Sales, Major Sponsorships
Contracted DMO Services
$ 202,500
$ 202,500
SSRTA Emergency Funding
$ 75,000
Major Sponsorships Funding Request
$ 150,000
$ 150,000
Seattle Seawolvs
Seattle Southside Chamber of Commerce
$ -
Virtual Sports
$ 30,000
Small Event Development and Support
$ 10,000
$ 15,000
Digital Development and Website (Experience Tukwila)
$ -
$ 88,375
SavingLocalKC.com
$ 154,170
Destination Development
Wayfinding Plan Development and Installation
$ -
$ 50,000
Southcenter Art Investements
$ 600
$ 39,400
Tukwila Pond
$ -
$ 125,000
World Cup Planning and Activiation
$ -
$ -
Adminstration/Operations
Salary
$ 58,040
$ 56,586
Benefits
$ 18,124
$ 18,411
City Overhead Charge
$ 18,741
$ 19,416
Adminstration Expenses
$ 21,385
$ 30,000
$ 116,290
Total Expenditures:
$ 479,390
$ 1,053,858
Starting Year Balance:
$ 1,617,625
$ 1,957,330
Ending Fund Balance:
$ 1,957,330
$ 1,703,472
Totals
1 $ 400,000 $ 450,000 $ 600,000 $ 700,000 $ 800,000 $ 4,569,095
$ 202,500
$ 202,500
$
202,500 $
$ 75,000
$ 50,000
$ 150,000
$
150,000 $
$ 10,000
$ 50,000
$ 5,000
$ 15,000
$
15,000 $
$ 88,375
$ 50,000
$
50,000 $
$ 154,170
$ 100,000
$ 150,000
$
100,000 $
$ 39,400
$ 75,000
$
75,000 $
$ 125,000
$ 200,000
$
200,000 $
$ 40,000
$
40,000 $
$ 53,870
$ 58,284
$
60,032 $
$ 18,411
$ 18,963
$
19,532 $
$ 19,416
$ 19,998
$
20,598 $
$ 30,000
$ 30,000
$
30,000 $
$ 1,021,142
$ 1,009,745
$
962,663 $
$ 1,957,330
$ 1,336,188
$
776,443 $
$ 1,336,188
$ 776,443
$
413,780 $
202,500 $ 202,500 $ 1,417,500
150,000 $ 150,000 $ 950,000
15,000 $ 15,000 $ 90,000
50,000 $ 50,000 $ 376,750
100,000
$
100,000
$ 600,000
75,000
$
75,000
$ 379,400
200,000
$
200,000
$ 1,050,000
50,000
$
50,000
$ 180,000
61,833
$
63,688
$ 412,333
20,118
$
20,722
$ 134,281
21,216
$
21,853
$ 141,239
30,000
$
30,000
$ 201,385
975,668
$
978,763
$ 5,932,888
413,780
$
138,112
138,112
$
(40,650)
Notes
Salary for Bus Manager is split 50/50 between general fund and lodging tax. Salary savings
reflects credit to lodging tax for 14 furlough days for 2020.
Revenue Increase (2021-2024) 0.05
Salary is assumed to rise 3% per year. 0.03
Benefits are assuemd to rise 3% per year. 0.03
Indirect Cost Allocation is assumed to increase 3% per year. 0.03
This document does not bind the City to provide funds nor does it authorize any funding. All use of lodging tax funds must be approved by LTAC and the City Council through an application process.
Overhead charge is charged to all special accounts and recoups the cost of the general fund to support the lodging tax fund. This include facilities, IT services, legal, and accounting.
Cells in yellow show pending applications.
IV Cells in green show approved applications.
Cells in red are budgeted items that have not been encumbered.
7/14/2020
BJ M
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Tukwila Tourism Funding at a Glance
Tukwila's tourism is funded by two separate revenue sources — the City's lodging tax and the Tourism Promotion Area (TPA) fee.
Jointly, these funds promote our many attractions and help welcome tourists to the City.
Lodging Tax vs. TPA Fee LODGING
Statutory Authority: Tukwila Municipal Code 3.40 Interlocal Agreement (ILA) between
Tukwila, SeaTac, and Des Moines
How charges are calculated:
Total funds collected from Tukwila
properties in 2019:
Where do the funds go?
Does the City Council control the funds?
1% of eligible stay in all city hotels,
motels, and Airbnb's
Ex. $100 room rate=$1 charge
$819,000
The City's 101 fund for tourism -related
expenditures
Yes (Subject to the City's Lodging Tax
Advisory Committee approval)
$2 per night per room of eligible stays only
in motels and hotels with 90 or more rooms
Ex: $100 room rate=$2 charge
$1,149,000 (estimate)
The Seattle Southside Regional Tourism
Authority (SSRTA) which promotes tourism
in Tukwila, Seatac, and Des Moines
No (Modification of Interlocal Agreement
(ILA) required)
Can the tax and fee be repealed? Yes. The standard process for modifying Yes. The City can opt out of the Interlocal
the Tukwila Municipal Code applies Agreement (ILA) with one year's notice
How Funds Can Be Used
Promotion and marketing to bring tourists
that live greater than 50 miles away?
Promotion and marketing to bring tourists that
live within 50 miles of the City?
Marketing special events?
Operations and expenditures related to facilities
owned or operated by a municipality or public
facilities district?
Supporting the operations of tourism -related
facilities owned or operated by a
nonprofit organization?
Examples of how we use the funds:
Yes
Yes
Yes
1Z
Yes
Yes
SavingLocalKC, Experience Tukwila, Starfire
Sports, Museum of Flight, Seattle Southside
Regional Tourism Authority, Seattle Seawolves,
Tukwila International Food Truck Rally
Yes
No (Effective July 1, 2020)
Yes (provided the funds are used to bring in
tourist from greater than 50 miles)
one
No
Support the Seattle Southside Regional
Tourism Authority (SSRTA) which promotes
tourism in Tukwila, SeaTac, and Des Moines
31
Tukwila Tourism Funding at a Glance
Tukwila's Relationship with the Tourism Promotion Area (TPA)
and Regional Tourism Authority (RTA)
IT
t.ity nas agreement
Tourism for lodging tax funds,
Promotion $202,500 for 2020
Area
City of
TOFWukwila
$39,632
Des Moines
Per ILA, TPA funds go directly
to SSRTA, $3,963M for 2019
City of
City of SeaTac is responsible for
overseeing the Tourism promotion
area through ILA
Lodging
Tax Funds
(Actuals)
Source for 2019
$830,000
SeaTac
$202,500
Tukwila
$52,497
Des Moines
Estimated
TPA Fee
TukwilaWA.gov
32
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Planning and Economic Development
FROM: Brandon Miles, Business Relations Manager
CC: Mayor Ekberg
DATE: July 27, 2020
SUBJECT: Experience Tukwila: Performance Measures
ISSUE
Discussion of performance measures for Experience Tukwila.
BACKGROUND
This year Tukwila launched its social media to promote the City to people within the greater
Seattle region (within 50 miles of the City). These social medial accounts are part of the City's
overall campaign to help to bring more people to the City and to help the City brand itself in the
region. The overall campaign is called, "Experience Tukwila." Experience Tukwila will have
several components:
1. Digital Platforms
Digital platforms will include social media (Facebook, Instagram, Twitter, and Linkedln),
website, and direct email. These platforms will digitally promote Tukwila, its community
members, its businesses, and everything that makes the City unique. The digital
platforms will include custom photography and videos highlighting the City.
2. Small Events and Festivals
Events and festivals will be sponsored under the "Experience Tukwila" name. Previous
events include the Rave Green Run, International Food Truck Rally, and Drag Queen
Bowling. The City will work to develop and support additional events and festivals
coming into the City.
3. Sponsorship
The City will sponsor third party activities in the City, such as Seattle Chocolates
Haunted House, Starfire Sports soccer tournaments, the Museum of Flight. These
activities do not fall under the small events and festivals given that they are usually
longer in duration activities and are on a larger scale.
DISCUSSION
Performance measures and key performance indicators (KPIs) are important in allowing
the City to track the success of activities. The following outlines staff's initial ideas for
performance measure and KPIs for Experience Tukwila. These are draft and staff would
like to work with PED as part of the budget process to identify the appropriate
performance measures and KPIs for Experience Tukwila. Staff will also be reviewing
how other similar organizations track success of their efforts.
33
INFORMATIONAL MEMO
Page 2
Overall Performance Measures for Experience Tukwila
Performance Measure
Target
Method Trackin
Increase total hotel occupancy
TBD
While tracking these
and hotel revenue.
performance measures is
simple, tracking how
Experience Tukwila impacted
Increase the total number of
TBD
visitors (day and night)
the overall City economy
coming to the City.
would be difficult. The City
could use surveys to track
impacts of the City's activities.
Increase dwell time people
TBD
spend in the City when
For example, if someone visits
visiting.
the Experience Tukwila
website, we could ask them if
they plan or have visited the
Increase total revenue at
TBD
entertainment establishments,
City. However, this creates a
restaurants, and retailers.
causation versus correlation
issue.
Cell phone data might also be
able to be used to track
certain outcomes.
Public Perception of the City.
TBD
In 2017 the City completed a
survey of Puget Sound
resident's perceptions of the
City. This survey could be
duplicated on a regular basis
to see if the City's marketing
efforts on changing how
people in the region view the
City.
Key Performance Indicators for Certain Activities
Website
KPIs
Goals
Method of Tracking
Total Sessions
TBD
Google Analytics
Total Unique Visitors
TBD
Total Page Views
TBD
Click Throu hs
TBD
Videos Viewed
TBD
Total Session time.
TBD
Geographic location of
visitors.
TBD
Specific pages viewed
TBD
Ranking on Google Search
Top of page 1.
Searching "Tukwila" on
Google
https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's Office/PED, August 3/Experience Tukwila, Performance
34 Measures/Experience Tukwila, Peformance Measures, Info Memo.doc
INFORMATIONAL MEMO
Page 3
KPIs
Total engagements (likes,
shares/retweets, comments).
Reach/Impressions
Tags/mentions
Hashtag utilization
Click through rate
Video views
Check Ins
Social Listening reports
Open Rate
Clickthrough rate
Media Impressions
Tickets Sold
Total Attendance
Revenue from event
Media impressions of event.
Attendance at event or
activity.
Media mentions
Hashtag usage
Social Media
Goals
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
Email Marketin
TBD
TBD
Small Events and Festivals
TBD
TBD
TBD
TBD
TBD
Saonsorshi
Method
Track usage on social media
accounts.
Free analytics provided by
social media companies.
Free analytics provided by
social media companies
Free analytics provided by
social media companies
Free analytics provided by
social media companies
Free analytics provided by
social media companies
Free analytics provided by
social media companies
TBD
Tools provided with email
management systems
(Constant Contact, Mail
Chimp, etc.)
TBD
Tracking of tickets sold
Tracking admission and
headcounts.
Ticket sales and vendor sales
reports.
TBD
Online sales and headcount.
Self -reporting and google key
word monitoring.
Free analytics provided by
social media companies
FINANCIAL IMPACT
N/A. Costs will be determined once we decided which performance indicators to use and which
KPIs to monitor. Many KPIs can be monitored using free tools on google and social media
accounts.
RECOMMENDATION
Discussion only. Staff will work to refine and define performance measures as part of the budget
process.
ATTACHMENTS
None.
https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Mayor's Office/PED, August 3/Experience Tukwila, Performance
Measures/Experience Tukwila, Peformance Measures, Info Memo.doc
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