Olympia’s lodging tax program that funds tourism events and projects, getting looked at for expanding access and revising the vetting

Olympia Economic Development Director Mike Reid and Cultural Access Tax Program Specialist Amelia Layton presented the proposed updates to the lodging tax program, which aim to broaden participation in the funding opportunity.

At the Finance Committee meeting on Wednesday, June 21, Layton, who would replace Reid as the lead staff for the Lodging Tax Advisory Committee (LTAC), said the program had not been reviewed since 2007.

Reid said the community around the Lake Fair, one of the applicants for the LTAC program, sparked the advisory board to look at the program.

"The last time that this had gone forward to a council committee or council review was in 2007," Reid noted.

Layton shared that the LTAC program collects a 4% tax on overnight stays at various lodging establishments in Olympia. It is a restricted resource to be used for tourism-related activities. The collection comprises two components: 2% goes to the Washington Center for Performing Arts, and the second 2% is subject to the LTAC committee recommendations based on the application pool.

The revenue from the Olympia Lodging Tax program is utilized for various tourism-related activities.

These include marketing campaigns targeted at attracting visitors from a minimum distance of 50 miles and marketing and managing special events and festivals. In addition, the funds are used for the operational and capital expenditures of tourism-related facilities owned or operated by a municipality or a public facilities district.

Layton said the current council policy stated for the use of LTAC fund, as adopted by the Olympia City Council in June 2007, include:

• Olympia's lodging tax fund will be the primary source of city funding for activities, operations, and expenditures designed to increase tourism. The city does not make any multi-year commitments for tourism promotion services. However, service providers are not limited or prohibited from making annual requests of the same nature.
• The city intends to maintain a reserve in the fund and will assess on an annual basis how much of the fund to appropriate in a given year.
• The Olympia City Council has created a lodging tax committee to conduct an annual process to solicit and recommend lodging tax-funded services for city council consideration.
• The city will only consider proposals for the lodging tax fund from public and non-profit agencies.

Though RCW 67.28.1817 allowed the creation of a lodging tax advisory committee, Reid noted that these rules are not RCW's.

Reid sought input from the Municipal Research Service Center for guidance, which pointed out that these are self-imposed rules.

While funds are restricted to supporting nonprofit facilities, Reid was concerned that one specific requirement, which states that applicants must be a recognized nonprofit, may create a barrier to application.

"Adding extra rules may have created an unintentional access barrier, said
Reid.

Layton laid out the proposed updates, which she said are based on discussions with the Social Justice and Equity Commission, Climate and Equity frameworks, and staff knowledge of best practices in granting structure, including application, review, and reporting.

Layton said the following updates are intended to broaden participation in the funding opportunity and ensure that the application provides the lodging tax advisory committee a better understanding of the applicant's organization and proposed programs, and potential impact on tourism:

Structure

• Set aside 10% for emerging events.
• Allow for multi-year funding commitments.
• Goal to keep, at maximum, 25% of the previous year's awarded dollars in reserve.
• Allow relevant for-profit businesses to apply for funding to market events/activities.

In the recent meeting with the SJEC, Reid said the commission recommended setting some dollars aside yearly to attract new applicants.

"If all the time, the funding goes to legacy events… newer and smaller events will have a hard time competing," Reid said, quoting the equity commission's comment.

"We want to give more people a shot. These are probably smaller grants that have less risk. We want to give more people an option," Layton said.

Application updates include:

• Addition of Olympia's non-discrimination policy on page one.
• Asking for the organization's mission statement.
• Asking applicants to address accessibility considerations for the proposed event/activity/facility.
• Asking applicants to provide information on their waste reduction strategy and/or other climate-related considerations for the proposed event/activity/facility.