Spokane Valley debates hotel tax funds

The Spokane Valley City Council had a familiar conversation Tuesday as it reviewed the funding recommendations made by the Lodging Tax Advisory Committee, which again did not support funding Valleyfest.

Valleyfest has received lodging tax money since 2004. Last year for the first time the committee opted against funding the annual festival, but after several months of controversy, the city council voted to award Valleyfest $30,000 in a second round of awards.

The money comes from a tax on hotel/motel room nights and must be used to promote tourism. The committee, headed for the past two years by council woman Brenda Grassel, includes two hotel representatives and two people representing organizations eligible to receive funding. This year the city has $380,500 to award after removing $30,000 for CenterPlace marketing and $50,000 for tourism promotion items.

The council gave little indication Tuesday how it might vote on the issue in December. Councilman Chuck Hafner questioned why the committee did not vote to give money to the Spokane Valley Heritage Museum or Valleyfest. “They must have some rationale,” he said.

Grassel said it is the opinion of the committee that the money should be given to organizations that directly result in hotel/motel room nights, even though that is not required by state law. “We just have to be very careful how we spend these dollars, that they go to the appropriate groups,” she said. “We’re seeing a reduced amount of funding this year.”

Valleyfest does not result in hotel bookings, Grassel said. “They generate tourists coming to the festival, not room nights,” she said.

During a break in the meeting Valleyfest director Peggy Doering said Valleyfest resulted in 25 room nights booked through the Visit Spokane website. Doering said several people told her they had problems with the website and called the hotels directly to book their stays, but she doesn’t know how many rooms were reserved that way. Local hotels offered a discount if Valleyfest was mentioned during the reservation process.

Marketing students from Gonzaga University randomly questioned 218 Valleyfest attendees during the 2011 event. Roughly a quarter of those said they had stayed in a hotel/motel or campground. Doering said the results of the 2012 survey are not yet available.

Hafner said that some people assume Valleyfest is run by the city. “That is not a city activity,” he said. “It’s not funded by the city. They have to raise money like anyone else.”

Council member Ben Wick said that while the event isn’t run by the city, it is held in the city. “It is a community event,” he said. “I take ownership of the Valleyfest event. I think we should be a significant contributor.”

The lodging tax committee also suggested taking the $80,000 set aside by the city and distributing it to its preferred groups. “I think this council was wise to set aside some discretionary money,” said Mayor Tom Towey. The money can be used for small items that are not otherwise in the city’s budget. Towey noted that Visit Spokane wants $400 each to add CenterPlace and Discovery Playground to its regional map; the funds could be used for that purpose.

The majority of the lodging tax committee recommends giving nearly all the city’s money to organizations not located in Spokane Valley, including the Spokane Regional Sports Commission, the HUB Sports Center and Visit Spokane. The only organization recommended for funding located inside the city limits is the Spokane County Fair and Expo Center.

The council is scheduled to vote on funding allocations at the Dec. 11 council meeting. The Nov. 20 council meeting has been cancelled due to the Thanksgiving holiday and the Nov. 27 council meeting has been cancelled because several council members will be attending a conference.