City grappling with lodging taxes, Convention Center

The issue of how lodging tax revenue is spent and who receieves the money is being revisited by the city of Ocean Shores.

The issue of how lodging tax revenue is spent and who receives the money was before the Ocean Shores City Council Monday night, at the same time the city’s Lodging Tax and Advisory Committee is considering applications for the funds as well as a possible new marketing and management plan for the Convention Center.

First, a recent state Attorney General’s Office opinion was cited as the reason for a proposed amendment to place the authority for spending the lodging tax proceeds with the City Council and not the so-called LTAC committee.

“It’s a sea change,” said Mayor Crystal Dingler, who sits on the LTAC committee in her current dual role as interim manager of the Convention Center. Also on the committee is City Councilman John Lynn, along with members of the hotel industry (Darcy Hambrick and Don Kajans), the business community (Dianne Hansen) and Jim Nagan of the Coastal Interpretive Center.

“When awarding lodging tax revenues … a municipality may award amounts different from the local lodging tax advisory committee’s recommended amounts,” the amended resolution states. The changes, however, can only be made after the council “submit its proposed change to the advisory committee for review and comment at least 45 days before the final action on the proposal.”

The LTAC capped the 2016 city budget process somewhat at odds with the City Council over its process to award last year’s funds. The City Council ultimately approved the budget late last year without taking a formal vote on the LTAC recommendations, some of which were opposed by members of the Council who are no longer in office. The city had $930,000 in 2016 anticipated tax revenue from hotel/motel taxes, with at least $466,000 allocated to operations at the Ocean Shores Convention Center.

Some of the approved expenditures included: $60,000 to the Ocean Shores Co-Op Marketing Group for its now three-year plan to advertise Ocean Shores in the Seattle-Tacoma I-5 market; Fund the Coastal Interpretive Center at $12,000 and the Highway 109 billboard at $5,400.

On Thursday (Sept. 22) at 8 a.m. the LTAC body will meet at the Convention Center to look at the 2017 applications for lodging tax funds. “We’re going to have a lot more requests than we have dollars,” Lynn said.

One of the requests approved by the council on Monday was the LTAC’s recommendation for $20,000 to be used for the first phase of an agreement with Pinnacle Venue Services of San Antonio, Texas, “to provide services to help the Convention Center bring in more business.” The second phase would be to hire a sales and marketing director for the start of a two-year program.

Pinnacle at first gave the city a management proposal of about $1 million for the Convention Center, but Dingler said “it was not something we could do. We simply don’t have enough money in our lodging tax budget.”

The company came back with a revised proposal, along with another assessment proposal from Columbia Hospitality of Seattle, Dingler said of the options already considered by the LTAC group. Dingler noted there was money left in the 2016 lodging tax fund budget to afford the first phase of Pinnacle’s plan.

“As a second step, I would suggest that we then discuss if we want to have them consulting with us to help us implement some of the things they have suggested,” Dingler said, including the addition of a sales and marketing director.

Resident Don Williams spoke against the Pinnacle proposal and also voiced an Open Public Meetings Act complaint about how the LTAC conducted business at its last meeting.

“Pinnacle is a company that has less than two years of experience,” he said. “I think you should be asking the question, what due diligence has been done on this company?”