HomeMy WebLinkAboutPED 2020-10-19 Item 1B - LTAC - Lodging Tax Funding Application for City of Tukwila's 2021-2022 Basic Operations for $290,119100 I
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Planning and Economic Development
FROM: Brandon Miles, Business Relations Manager
CC: Mayor Ekberg
DATE: October 13, 2020
SUBJECT: 2021/2022 Lodging Tax Funding Requests
City of Tukwila Basic Operations
ISSUE
Review of a lodging tax funding request from the City of Tukwila, Office of Economic
Development for basic operations of the City's tourism program for 2021 and 2022.
BACKGROUND
The City collects a 1% 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.
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.
The City accepts applications on a rolling basis, with the LTAC reviewing requests monthly.
Pending Application(s)
Following its October 9, 2020 meeting, LTAC recommended approval of an application from the
City of Tukwila, Office of Economic Development to fund its basic operations activities.
1 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
1. 2021 and 2022, City of Tukwila, Basic Operations, ($290,119)
Overview
The City of Tukwila's Office of Economic Development is the City's lead for tourism program.
The Office oversees the City's lodging tax application process; develops and executes special
marketing initiatives, such as the Great Tukwila Carryout and Saving Local, KC; provides
oversight of contracts with recipients of lodging tax funds; and is the lead in the development
and day to day operations of Experience Tukwila. The pending lodging tax application supports
the City's administrative costs associated with the tourism program. The application can be
divided into three parts:
1. Marketing and Operations
Funds are provided for as needed professional services, such as marketing and graphic design.
During 2020 these funds being set aside in the 2020 application were crucial in the City's
response to COVID-19. The City was able to quickly launch the Great Tukwila Carryout and
Saving Local, King County3.
Funds are also set aside to support small, third party events throughout the City. In the past the
City has used these funds to support food truck rodeos at Westfield Southcenter and sendoffs
for the Seattle Sounders FC. Funds allocated for these events are typically small, around $500
to $1,000 dollars. Having the funds set aside allows the City to quickly react to potential
opportunities. It also reduces the administrative burden on groups seeking small amounts of
funds from the lodging tax program.
2. Administrative Costs
Funds are provided for the City's administrative costs associated with the lodging tax funds.
This includes a halftime FTE in Economic Development, travel, office costs, and other
administrative costs. Both staff and elected officials can use these funds to attend events
associated with tourism. Without these funds, the City's general fund would have to support
these costs.
3. Indirect Cost Allocation
The City charges all special events an indirect cost allocation to reimburse the general fund for
its support of the special funds, such as lodging tax. The general fund supports the lodging tax
fund by providing accounts payable services, legal supports, fleet, facilities, and technology
services. The cost allocation is determined by Finance after the completion of an indirect cost
allocation study.
Staff Analysis
This application by the City allows the City to implement its tourism program. Without the
approval of the application the City would have to reduce activities, or the general fund would to
be used to support staff and activities.
LTAC Recommendation on Application: Do Fund
3 Saving Local, King County also received additional lodging tax funds through its own application. However, the
City was able to start Saving Local with the funds in the basic operations application, while the funding request was
pending.
INFORMATIONAL MEMO
Page 3
Staff Recommendation on Application: Do Fund
FINANCIAL IMPACT
The application total request will not exceed $290,119 ($141,160 for 2021 and $148,959 for
2022). There are sufficient funds in the City's lodging tax (101) fund to support this application.
RECOMMENDATION
Staff recommends approval of the application and that the Committee forward the application to
the City Council's November 2, 2020 consent agenda.
ATTACHMENTS
• City of Tukwila 2021 and 2022 Lodging tax application.
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Application to the City of Tukwila for Use of 2020 Lodging Tax Funds
Event or Activity Name (if applicable):
2021 and 2022 City of Tukwila, General
Administration, Small Marketing, Small Event
Support, Indirect Cost Reimbursement, and
labor costs.
Amount of Lodging Tax Requested:
$290,119 (2021: $141,160; 2022:
$148,959)
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
I am an authorized agent of the organization/agency applying for funding. I understand that:
• I am proposing a tourism -related service for 2020. 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
format determined by the City.
_/s/ 10/8/20
Signature: Date:
Brandon J. Miles
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1) Describe your tourism -related activity or event.
The City of Tukwila requests funding for 2021 and 2022 for administration of the City's lodging tax
fund, basic small marketing activities, office supplies, limited travel, professional services, small event
support, reimbursement of the City's indirect charge, and labor (half time FTE).
Funds for this application are used for general administration, staff time (half of an FTE), and related
costs incurred by the City in managing its lodging tax program. In the past the funds for this application
were used for the following activities intended to support the entire tourism program.
• Office Supplies;
• Professional Services;
• Small Marketing Activities;
• Small event support;
• Training and Education;
• Membership, Registration, and Subscriptions;
• Parking, Travel, and Meals; and
• Indirect Cost Allocation.
• Small Event Support
Last year LTAC approved $133,000 for the City's Administration application. Lodging tax supports a .5
FTE in the office of economic development, with the remaining .5 FTE being supported by the general
fund.
The City is also requesting a charge for the City's 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.
The City is also requesting small amount $290,119 for small sponsorship opportunities throughout the
year that could help build the Tukwila brand and help enhance the tourist destination. For 2019, the
City had success in using these funds to support marketing of an e -gaming event at Virtual Sports and
supporting the food truck rallies at the Mall. Due to COVID-19 in 2020 many of these activities were
curtailed. The City is helping to sponsors Halloween activities throughout the City.
In 2019 (2020 is not a good comparison due to COVID-19), 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. The City is also managing the Experience Tukwila digital platform
development and marketing, which launched this year.
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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. Limited funds are
also providing to help support small scale events and activities in the City.
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 as the Rock 'N' Roll Marathon; the Backyard Wildlife Fair; and marketing
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.
Having access to funds for small events allows the City build its destination.
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).
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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
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.
20,000
b.
Number of people who will travel fewer than 50 miles for your
event/activity.
19,000
c.
Number of people who will travel more than 50 miles for your
event/activity.
1,000
d.
Of the people who travel more than 50 miles, the number of people
who will travel from another country or state.
200
e.
Of the people who travel more than 50 miles, the number of people
who will stay overnight in Tukwila.
50
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f.
Of the people staying overnight, the number of people who will stay in
50
PAID accommodations (hotel/motel/bed-breakfast) in Tukwila.
g.
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)
200
Special Note: The numbers provided above are direct estimates for this application and related to
the proposed special events part of the budget. Many of these special events will help with the
City's overall destination development goals. Existing hotel guests will be able to benefit from the
activities.
Additionally, 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 2019
Starfire Sports received $44,500 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?
As discussed above, the City uses its lodging tax funds to support a wide range of activities. In 2020, the
City anticipates funding a variety of activities. These funded activities have metrics, which the City will
use for reporting purposes for this funding request. However, for reporting purposes the City report
the metrics for these third -party applications separately. Additionally, the City's efforts are intended to
create a better tourist economy and encourage more organic visits to the City. These organic visitors
are difficult to attract directly, but ultimately success can be tracked by increase sales at area
businesses and increase revenue from hotels.
No.
No.
14) Are you applying for lodging tax funds from another community? If so, which communities
and in what amounts?
15) Are you applying funding from Seattle Southside Regional Tourism Authority (SSRTA)? If so, in
what amount?
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 $290,119 spread out over two years (see below):
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The following is the proposed budget for the campaign (note funds in rows 1-11 might be moved
between budget rows, but won't exceed the total amount requested).
Column
Budget Item
2020
Approved
Budget
2021
Proposed
Budget
2022
Proposed
Budget
Notes
1.
Office Supplies
$750
$750
$750
This is for general
offices supplies and
for domain names
holds the City has
purchased.
2.
Professional
Services
$11,000
$12,000
$12,000
These funds are
used to assist with
tourism promotion
activities that might
arise during the
year. For example, in
2020 funds were
used for the creation
of a dining guide to
highlight restaurants
offering carryout
and delivery during
COVID-19,
photography,
Halloween events
and activities, and
other small-scale
operations.
3.
Training and
Education
$6,000
$2,000
$6,000
These funds are
intended for staff,
LTAC Members, and
elected officials who
might desire or need
education or training
for tourism related
activities. Staff is
forecasted a lower
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demand for these
activities in 2021.
4.
Memberships,
Registrations,
and
subscriptions.
$8,000
$8,000
$8,500
Memberships could
include:
• Seattle
Chamber of
Commerce
• Seattle
Sports
Commission
• Washington
Tourism
Alliance
• WFEA
• Others
5.
LTAC Meetings
$0
$100
$0
Staff tries to
minimize expenses
for LTAC meetings.
Staff is allocated
funds for 2021
should equipment or
services be needed
for virtual meetings.
6.
Parking, Travel
and Meals
$1,000
$500
$1,500
This is for staff, City
Councilmembers,
and LTAC members
who might want to
attend tourism
related meetings.
Staff is forecasted a
lower need for these
funds in 2021.
7.
Small Event
Sponsorship
$8,000
$15,000
$15,000
These funds are
used to support
small events and
activities in the City
and in the region.
Some examples of
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use of the these
funds in the past
include supporting
an e-gaming event
at Virtual Sports,
Seawolves player
appearances,
hosting a quarterly
meeting of the
Seattle Sports
Commission in
Seattle, and food
truck events with
Westfield. Having an
access to funds
allows staff to
partner quickly to
for events and
activities, without
going through the
lengthy lodging tax
process.
Some events in 2021
may be virtual to
comply with COVID-
19 restrictions, while
also allowing the city
continue branding
and marketing
efforts.
8.
Sub-Total:
$34,750
$38,350
$43,750
9.
Labor (wages
and benefits)
$78,834
$78,802
$79,978
This is not a new
position. Funding for
the Business
Relations Manager
will be split 50/50
between the general
fund and lodging tax
fund.
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10.
Indirect Cost
$19,416
$24,008
$25,231
This a transfer to the
Allocation:
City's general fund
and helps to
reimburse the City
for cost to the
general fund
associated with the
lodging tax funds,
such as accounting,
legal, TIS, facilities,
and fleet.
11.
Sub -Total:
$98.250
$102,810
$105,209
Funds may be
carried over from
2021 to 2022. The
total cost will not
exceed $290,119.
12.
Operations
$133,000
$141,160
$148,959
All activities.
Total:
It may be necessary to move funds between rows 1-11; however, the total expenditure will not
exceed the total listed in row 12.
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:
Lodging Tax Advisory Committee
c/o Brandon Miles
City of Tukwila
6200 Southcenter Blvd
Tukwila, WA 98188
Or,
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Brandon.Miles@Tukwilawa.gov
Questions?
LTAC Contact:
Brandon J. Miles
(206) 431-3684
Updated: December 17, 2019
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DRAFT
City of Tukwila
General Administration
2020 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. Parking, Travel, and Meals
6. Indirect Cost Allocation
7. Staff costs (wages and labor)
8. Small Event Support and Sponsorship
Note, funds may be moved between the categories, but the total expenditure will not exceed
$133,000.
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