Public Hearing: Increase to the Transient Occupancy Tax by 2%
|Meeting Date:||June 3, 2008||Primary Staff Contact:||Lee Tuneberg|
|Secondary Dept.:||None||Secondary Contact:||Ann Seltzer|
|Approval:||Martha Bennett, City Administrator||Estimate Time:||30 minutes|
Does Council wish to increase the Transient Occupancy Tax (TOT) from 7% to 9%?
Consider the input from the public forums held in February and input from the public hearing and determine whether or not to increase the TOT.
At the regular City Council meeting on April 15, 2008 staff was directed to schedule a public hearing to hear input on raising the TOT by 2%.
At the April 15 meeting staff provided a spreadsheet with a suggested allocation of the increase funds. The council voted to modify the staff recommendation to allot $225,000 to the Visitor and Convention Bureau, $109,000 for Economic and Cultural Development Grants and $68,000 for qualified City projects including the set aside for public art.
During the same meeting, the Council voted to allocate 5% of the TOT increase for the purpose of public art. The attached spreadsheet reflects the current allocation of funds, allocation of funds based on a 2% increase reflecting council direction including public art and staff's previously suggested allocation of funds based on a 2% increase including public art.
ORS 320.300 states funds generated from a lodging tax increase may be used as follows:
"Tourism promotion" means any of the following activities
1. Advertising, publicizing or distributing information for the purpose of attracting and welcoming tourist;
2. Conducting strategic planning and research necessary to stimulate future tourism development;
3. Operating tourism promotion agencies; and
4. Marketing special events and festivals designed to attract tourists.
"Tourism promotions agency" includes"
1. An incorporated nonprofit organization or government unit that is responsible for the tourism promotion of a destination on a year-round basis;
2. A nonprofit entity that manages tourism related economic development plans, programs and projects.
3. A regional or statewide association that represents entities that rely on tourism related business for more than 50 percent of their total income.
1. Means a conference center, convention center or visitor information center; and
2. Means other improved real property that has a useful life if 10 or more years and has a substantial purpose of supporting tourism or accommodating tourist activities.
ORS 320.300 defines "tourist" as:
"A person who, for business, pleasure, recreation or participation in events related to the arts, heritage or culture, travels from the community in which that person is a resident to a different community that is separate, distinct from and unrelated to the person's community of residence, and that trip requires the person to travel more than 50 miles from the community of residence; or includes an overnight stay".
In order to comply with State law and the use of the new funds the City will need to require additional documentation in the Economic and Cultural Grant application process. Additional application requirements will include a marketing outreach plan to communities more than 50 miles away and indication of the applicant ability to implement the plan, and a means of tracking attendees to determine if they meet the definition of tourist as defined in ORS 320.300.
For accounting purposes and to insure compliance with State law, the Finance department will keep the increase funds separate from the existing funds allocated for Economic and Cultural Development grants.
If council approves the increase, council will need to approve an amendment to AMC 4.24 Transient Occupancy Tax and a resolution detailing the allocation of the funds which will come to the council at a future date.
|Related City Policies:|
1. Move to approve increasing the transient occupancy tax by 2% and allocate the funds in the following manner:
2. Move to retain current TOT tax at 7%.
|Attachments: Click on the PDF file below to view the following attachments:
The council packet from April 15, 2008 contained a list of comments received during the public forums on TOT increase and on the benefits and use of funds from a TOT increase. The public input is available online. Hard copies are available upon request.
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