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HomeMy WebLinkAbout04/07/2014 Work SessionCity of Springfield Work Session Meeting MINUTES OF THE WORK SESSION MEETING OF THE SPRINGFIELD CITY COUNCIL HELD MONDAY, APRIL 7, 2014 The City of Springfield Council met in a work session in the Library Meeting Room, 225 Fifth Street, Springfield, Oregon, on Monday, April 7, 2014 at 6:00 p.m., with Mayor Lundberg presiding. ATTENDANCE Present were Mayor Lundberg and Councilors VanGordon, Wylie, Moore, Ralston, Woodrow and Brew. Also present were City Manager Gino Grimaldi, Assistant.City Manager. Jeff Towery, City Attorney Mary Bridget Smith, City Recorder Amy Sowa and members of the staff. 1. Springfield Transient Room Tax Revenues, Spending and Future Strategies and Projects Assistant City Manager Jeff Towery and Senior Management Analyst Courtney Griesel presented the staff report on this item. Springfield's Transient Room Tax (TRT) funds are generated by taxing overnight hotel stays in Springfield. The City has spent room tax revenues historically on general fund, economic development, and tourism related activities. For every night stayed in a Springfield hotel, the City receives 4.5% of the room rate. This percentage is referred to as the Transient Room Tax or TRT. With over 1,400 rooms in the Springfield area, events and destinations generating more visitors and increasing annual hotel occupancies also increase amounts of TRT funds received by the City, funds which are required by the State to be used in part for tourism related activities. Because of this direct relationship, it is important to be strategic in both supporting tourism related facilities, activities, events, and destinations and the spending of received TRT dollars. In light of the TRT analysis of projected revenues, expenses, and accumulated reserves, staff is asking if Council would like staff to solicit community project proposals for remaining available funds through a formal process, which would include Council review and selection, or continue making contributions to TRT reserves, or a combination of both. A power point was presented on this item. Mayor Lundberg asked if the room tax rate was different in other communities. Ms. Griesel said it could be set by community. Eugene and Springfield both charged 4.5 %, and Florence charged 4 %. The County charged 5% in addition to the City TRT. TRT revenues increased with more visitors staying at the area hotels. A percentage of the revenues from the TRT must be spent on tourism related projects. She reviewed the historical trends in TRT revenues in Springfield. Generally revenues were down in the winter. Overall, Springfield TRT revenues were up which matched current trends. She referred to a chart showing how TRT funds were generally spent in Springfield. It was a policy decision on how these funds were spent. City of Springfield Council Work Session Minutes April 7, 2014 Page 2 Ms. Griesel said there were several types of TRT projects including investments in events (often annual) or investments in facilities which increased capacity. She referred to a table showing a snapshot of past room tax expenditures on tourism related projects or events from 2002 through 2013. These investments were divided between regional partnerships and Springfield partnerships. The Community Challenge Grant Program allowed the community to submit formal solicitations for TRT funds. This program was similar to the process for awarding Community Development Block Grant (CDBG) funds with a committee that reviewed the solicitations and provided a recommendation to the Council. Mr. Towery referred to a chart showing the revenues over the last few years and projected revenues The number of rooms has grown, which increases the number of hotel stays. The chart also showed the activity in the reserve account. Councilor Brew said he didn't see any capital projects on the charts Mr. Towery said the last capital project was years ago when the City helped fund the renovation of Hayward Field in the amount of $270,000 over eighteen years. Councilor Ralston said the Glenwood Convention Center was referenced. He thought this presentation was to show whether or not the City had enough funds for that project. Mr. Towery said this was an opportunity to see the funds available. When they met with the County later in the evening, they would be seeking direction for that project. Councilor Ralston asked how much the Glenwood project would cost. Mr. Towery said about $150,000 the first year, $200,000 for the next couple of years, and up to $340,000 during the tenth year. The payment was set up to increase as the number of rooms and revenue increased. Councilor Ralston said the Glenwood project was important and he felt the City should focus on that project before funding other projects. Mayor Lundberg said she wanted to discuss room tax in general because there were newer councilors that had not been through some of these processes. Some small projects bring in large events. If all of the needed funds could be set aside for the Conference Center and the City still had funds left over, they should have some direction on how to allocate those funds. This discussion was to understand the process better. Councilor Ralston said he would like to use the conservative approach and fund the important project first, then see if we have enough in the future for other projects. Councilor Woodrow asked if the City had received any requests from the community. Mr. Towery said the latest requests had been for Track Town Olympic Trials and NCAA Track and Field Championships at Hayward Field. They had also received smaller requests for specific projects. Mayor Lundberg said the City had allotted $100,000 to the Olympic Trials City of Springfield Council Work Session Minutes April 7, 2014 Page 3 Mr. Towery said that as correct. Looking at the current projections beyond funding a conference center and maintaining a healthy reserve, FYI there should be about $75,000 to further supplement reserves or look at a local project process. Councilor Moore asked if there were "restrictions on the length of time reserves can be kept in place. Mr. Duey said the reserve was retained in anticipation of fluctuation in revenues and unanticipated expenses. Revenues were fairly reliable for TRT funds and Council had discretion of how and when to spend. Reserves were generally a safety net for one or two years. Councilor Ralston asked for clarification on the room tax rate in Eugene and Springfield, and the rates for Lane County and Oregon-. Mr. Towery said visitors paid City, County and State room tax. In Eugene and Springfield, that totaled 10.5 %. Councilor Woodrow said she liked the fact they were reviewing this and they would get more information when talking about Glenwood. She would like another work session on this topic once they decided on the Glenwood project so they would know what funds they had remaining. Mayor Lundberg said in the past, discussion about the TRT would be part of the Budget process. There was a TRT Committee made up of Budget Committee members that received applications for TRT funds. Mr. Grimaldi said they could discuss it during the Budget process, or after a Memorandum of Understanding was negotiated for the Conference Center and the cash flow was known. Councilor Woodrow said whatever worked best. Mayor Lundberg said it was generally approved during the Budget process. ADJOURNMENT The meeting was adjourned at 6:23 p.m. Minutes Recorder — Amy Sowa Christine L. Lundberg Mayor Attest: Amy Sow City Recorder