Council divvies lodging tax funds

The Spokane Valley City Council had an extra $50,000 to dole out Tuesday as members decided how to allocate the city’s lodging tax funds.

City finance director Mark Calhoun announced that the 2012 lodging tax revenue had come in higher than expected. The city had previously announced that it would give $380,500 to organizations to promote tourism in Spokane Valley.

Much of the debate over the money has centered on whether or not to provide funding for Valleyfest. The organization has received funding every year since the city incorporated, but this is the second year in a row that the majority of the Lodging Tax Advisory Committee did not recommend funding the annual festival. Last year the council voted to give Valleyfest $30,000.

Councilman Chuck Hafner recommended that the council start with the average of the recommendations made by advisory committee members. That would provide $21,100 to the HUB Sports Center, $17,800 to the Spokane County Fair and Expo Center, $150,200 to the Spokane Regional Sports Commission, $1,400 to the Spokane Valley Heritage Museum, $5,200 to Valleyfest and $184,800 to Visit Spokane (formerly the Spokane Regional Convention and Visitor’s Bureau). Each organization had asked for significantly more. Visit Spokane, for example, had asked for $350,000.

Hafner then suggested dividing the new revenue to award an additional $30,000 to Valleyfest, $5,000 to the Heritage Museum, $10,000 to the Fair and Expo Center and $5,000 to the city’s discretionary marketing fund.

Councilwoman Brenda Grassel argued that the HUB, Regional Sports Commission and Visit Spokane gave the city a better return on investment than Valleyfest or the Heritage Museum. The goal should be to replenish the lodging tax fund by giving the money to organizations that generate a lot of hotel room nights, she said. “We recognize that there are festivals and organizations that can also receive these dollars,” she said.

Mayor Tom Towey said that while “heads in beds” was important, the tourists that come to town for day trips to shop, eat and fill their gas tanks can’t be ignored. “That chunk that is defined as tourists, we’ll never know,” he said. “There’s absolutely no way to tell.”

There’s no argument that Visit Spokane and the Sports Commission bring in the most overnight hotel says, Towey said. “But certainly we have to support the other organizations that do a tremendous amount of work in our community,” he said.

Towey suggested that the council come up with a formula during its February retreat that takes into account the different categories of organizations eligible for funding and is fair to everyone “instead of having everybody fight.”

Heritage Museum director Jayne Singleton said her organization has received some funding every year. “It has not had a negative impact on the replenishment of the fund,” she said.

Jody Sander, president of the Hotel/Motel Association, urged the council to focus the funding on organizations that generate hotel nights. While Valleyfest is a great event, she said, “They’re two nights out of 365 nights.”

Many members of the community assume that Valleyfest is a city sponsored event, Hafner said, and the council must consider what the community thinks.

“They don’t care how many people stay in beds,” he said. Not all the lodging tax allocations may benefit the hotels directly, Hafner said. “On the other hand, it may be beneficial to our community.”

The majority of the council agreed to move forward with Hafner’s funding suggestions. Grassel and Councilman Arne Woodard voted no.