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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Council rejects Valleyfest request for lodging tax money

Valleyfest director Peggy Doering is worried about securing community sponsors for the annual three-day festival after the Spokane Valley City Council recently decided not to give the festival lodging tax funding for the first time since 2004.

“This is the time of year that we are visiting with our sponsors and trying to secure funding for next year,” Doering said. “They’ve been asking us what is going to happen with the funding.”

Every year the Lodging Tax Advisory Committee makes recommendations to the council about spending tax money collected by local hotels and motels. The tax is to be spent promoting tourism. The city expects to collect $430,000 in 2012.

Doering requested between $40,000 and $50,000 to pay to advertise the festival. Valleyfest received $36,000 in lodging tax money for the 2011 event, which accounted for a substantial portion of the event’s $132,000 budget.

The businesses that usually sign on as sponsors do so because they know the event draws in thousands of attendees and use the event to market their business, Doering said. “They are concerned about how I’m going to be able to bring them the same number of attendees as they have gotten in the past,” she said. “It’s a business decision. It’s not that they don’t love Valleyfest. They’re business people. This is how they’re able to reach their target audiences.

“No one has said no yet. I’m out there fighting.”

Councilwoman Brenda Grassel, who chairs the lodging tax committee, said Valleyfest’s application didn’t include information on the number of room nights generated. The application was due two weeks before Valleyfest. “She admitted that because of the deadline, where it falls, they didn’t have the opportunity to get the number of room nights,” Grassel said.

Valleyfest has already received $19,500 in outside agency funding from the city this year, Grassel said. “I don’t think it’s fair to say the city isn’t supportive,” she said. “They’ve already received more than half what they did last year. If you are dispersing money and you want to replenish funds you have to have the hotel nights to do that.”

Councilman Bill Gothmann, who has spoken in favor of giving funding to Valleyfest, said he doesn’t agree with Grassel’s interpretation. It isn’t in state law and it isn’t anything the council has discussed, he said. “That’s something she and the committee dreamed up,” he said. “I think the philosophy is wrong. What they have done is changed the rules.”

The law states that the money can be used for “advertising, publicizing or otherwise distributing information for the purpose of attracting and welcoming tourists” and “funding marketing of or the operation of special events and festivals designed to attract tourists.” It can also be used for the acquisition and/or operation of tourism related facilities.

Gothmann also noted that Grassel said during a council meeting that she believes Valleyfest is a local event and doesn’t attract tourists from out of the area. “She’s biased,” he said.

Members of the Gonzaga University marketing department randomly questioned 218 Valleyfest attendees during the September event. Their questions showed that 48 percent of those interviewed had traveled farther than 31 miles to attend the event. Of those, nearly half said they had stayed in a hotel/motel or campground. The rest stayed with family or friends.

Doering said she could use the outside agency funding for marketing, but had planned to use it to collaborate with businesses located on Sprague Avenue during the Friday night parade.

The council has agreed to allow a second round of applications and Valleyfest may apply for that, Grassel said. The applications are due in January and the issue should be before the council for a vote in March. Grassel said the Spokane Valley Arts Council and the Convention and Visitor’s Bureau missed the first application deadline. “We were trying to make this as fair as possible,” she said. “We don’t want to arbitrarily favor one organization over another.”

Doering said that her application was complete and on time, but she will apply for funding again even though she fears the outcome will be the same. “It will be the same up and down vote we had last time,” she said. “It’s not going to change.”

Grassel said she expects Valleyfest will get funding in the second round of lodging tax grants.

If Valleyfest doesn’t get lodging tax funding the event will look a lot different, Doering said. The festival has been expanding for years and the loss of the funding would put it back at 2005 levels, which is before a full day of events was added on Sunday, she said. Still, Doering is determined to keep the festival going. “It might have a different look to it, but it will happen,” she said.