Stories about hotel-motel tax in Friday Harbor

TOWN OF FRIDAY HARBOR HOTEL/MOTEL

Town to match county's hotel/motel tax rate

posted 12/03/02
Nineteen months ago, Friday Harbor Town Councilmembers added an additional 1.2 percent hotel/motel tax to the 2 percent already collected on lodging facilities. Thursday, Dec. 5, 2002 they will vote on an ordinance to increase the 1.2 percent to the full 2 percent allowed by law. This will make the town's rate the same as the county's rate.

The county began collecting an additional 2 percent in October 2002. This is on top of the 2 percent it already collected. The new money is earmarked exclusively for tourism promotion. When the county's rate went into effect, it meant businesses in the town were taxed at the same rate with the difference between the 3.2 percent town rate and the 4 percent county rate going to the county.

With the adoption of the ordinance, the hotel/motel tax imposed on lodging businesses in Friday Harbor will go to the town. Town Administrator King Fitch said the amount is estimated at $40,000 per year.

Town's promotion campaign begins

posted 02/18/02
Puget Sound residents listening to Star 101. 5 FM (KPLZ) will hear Bud Rodewald extolling the benefits of a visit to San Juan Island. The radio commercial is part of the recently approved promotional campaign the town is financing through the 1.2 percent increase in hotel motel tax.

"I thought the idea was to get people to come to Friday Harbor?" Mayor Gary Boothman asked during the Feb. 7, 2002 Town Council meeting,

Councilmember Bill LaPorte explained that the lodging tax advisory committee felt that was too narrow a scope and it would be better to embrace the island. "They are still going to come to Friday Harbor," LaPorte said.

"Friday Harbor is "the spotlight of the campaign," Councilmember Vonda Sheiman said. The choice of Friday Harbor resident and KPLC commentator Bud Rodewald is "perfect for the campaign," she said.

The jazz contemporary station was selected for the first promo because of its demographics -- 35- 49-year-olds leaning toward higher educational level.

JayRay Ads and PR of Seattle will be paid $39,558 for the next phase of the promotion.

The phase includes:

A short term promotion to be completed by March 31, 2002.
A process to achieve a longer-term approach.
A coordination with similar San Juan County efforts.
A phone number and Web address for the promotion.
A telephone survey of Central Puget Sound residents to determine awareness and perceptions of Friday Harbor and San Juan Islands.

Town hires ad agency

posted 11/02/01
Money from visitors to Friday Harbor will be used to attract more tourists. Friday Harbor Town Council approved a contract with JayRay Ads & PR to promote tourism. The goals of the $12,000 contract include an increase of occupancy rates mid-October through mid-May and a return to full occupancy rates in July and August.

Councilmembers approved a 1.2 percent increase in the hotel/motel tax earlier this year. The purpose of the additional tax, which is only paid by lodging facilities, was to promote tourism. A committee consisting of two councilmembers -- Hedda King and Vonda Sheiman -- and five lodging facility operators was formed. After a request for proposals, the committee heard a presentation by JayRay. "This firm came highly recommended," Sheiman told the council at their Nov. 1 meeting.

Councilmember Bill LaPorte echoed her assessment. "The lady from CTED (the state Community Trade and Economic Development agency) said you've got the best," he said.

The ad agency will:

Develop a marketing communication plan.
Implement elements of the plan.
Contact news media; initiate news story development; coordinate with the Town of Friday Harbor Lodging Tax Advisory Committee members for local support.
Research paid media opportunities, purchase the media, create the messages and provide the committee with all background information about the transactions.
Facilitate committee marketing communications planning sessions.

The contract spells out measurable objectives:

Calls and emails for reservations will increase to an amount to be determined by the committee. Lodging managers will track those leads generated by the marketing communications campaign.
All major broadcast and print news outlets within 300 miles will be contacted at least two times by January 31, 2002 and asked to put Friday Harbor lodging opportunities and related stories into their news features, columns and calendars.
The paid media will reach 60 percent of the primary target audience of adults 35+ an average of eight times by May 15, 2002.
Eight media and/or commercial or not-for-profit partners will add their resources to the campaign by May 15, 2002.
Friday Harbor employers and employees will receive promotional messages that give them key messages that they can successfully use, allowing them to support the campaign.

The plan is divided into three phases. The $12,000 covers phase one which is to be completed by Nov. 30, 2001. Costs for Phases 2 and 3 are still to be determined.

SIgn of the economic times

posted 11/02/01
The Town of Friday Harbor received 51 applications for a billing clerk position. The full-time job begins Jan. 2, 2002. "This speaks volumes about the community right now," said Councilmember Vonda Sheiman.

Lane 4 brochure planned

By Sharon Kivisto

posted 10/09/01
Friday Harbor's Lodging Advisory Committee is developing a pamphlet called Lane 4 which they hope will reduce traffic congestion in Friday Harbor. The name is derived from the designated Friday Harbor lane at the Anacortes ferry terminal.

The pamphlet will contain tips on ferry travel, offloading in Friday Harbor, and a map of the town. Councilwoman Vonda Sheiman said Washington State Ferries officials seem receptive to the idea of distributing Lane 4 in Anacortes.

A rough draft of the pamphlet was shown at last week's council meeting. Sheiman said the committee is open to suggestions.

Ways to help increase tourism

By Sharon Kivisto

posted 10/02/02
The town, the county and a county-wide business association are each working on ways to counter the decline of tourism in the San Juans. Tourism business was slower this year. Since the Sept. 11 terrorist attack on the U.S. it has declined even more. Both the town and the county governments rely heavily on sales tax revenue for funding.

County Commissioner John Evans wants the BOCC to discuss possible ways the county could promote tourism. Last week he said, "I want a discussion of the idea of working in conjunction with the tourism industry to help promote tourism." Using economic development money to do so would be appropriate he said.

Commissioner Darcie Nielsen said the subject could be discussed but "I have strong feelings about the county spending money to promote tourism."

Friday Harbor Town Council voted in May to increase the hotel/motel sales tax by 1.2 percent. The increase went into effect Monday, Oct. 1. The council will spend those funds directly for promoting tourism. Other hotel/motel funds are used for maintenance of the portable restrooms and set aside for the expansion of the sewer plant and for construction of restrooms.

Friday Harbor town council appointed five people to its newly formed Lodging Tax Advisory Committee in June. The committee will meet at 5:30 p.m. today (Tuesday, Oct. 2) in Town Hall. They are developing a request for proposals from ad agencies to promote tourism in Friday Harbor.

The committee which consists of two councilmembers -- Vonda Sheiman and Hedda King -- and five representatives from the tourism industry -- Tori Zehner (Friday Harbor House), Jim Smith (Discovery Inn), Dick Robinson Hillside House B&B) , Laura Saccio (Friday's Historical Inn) and Bill Giesy (RE/MAX) -- will present their recommendations to the Town Council at a future meeting.

The county-wide Business Association of San Juan County is putting together a panel discussion for all businesses on ways to use the Internet to salvage the shoulder season business. The seminar will be held at 10 a.m. Nov. 7 at Rosario Resort on Orcas Island. More details will be released later.

The BASJC board voted to give $1,000 to the county's Visitor Information Service to expand the San Juan Islands section in the Washington State Visitor's Guide. The board plans to ask the BOCC to increase the hotel/motel sales tax 2 percent.

Giesy appointed to town committee

posted 07/21/01
Bill Giesy was appointed to Friday Harbor's Lodging Tax Advisory Committee July 19. He replaces Linda Francis who resigned because her business San Juan Inn is in escrow. The committee formed in June 2001 consists of two councilmembers (Vonda Sheiman and Hedda King) and five representatives from the lodging industry.

The committee will advise the town council on the best way to use a portion of the funds collected from the hotel/motel tax. Sheiman said Giesy was the unanimous recommendation from the committee. The group felt it needed a member who represented a business involved in vacation rentals. Giesy owns RE/MAX San Juan Island.

Lodging tax advisory committee approved

posted 06/22/01
Five innkeepers were officially named to Friday Harbor's new lodging tax advisory committee June 21. Councilmembers Vonda Sheiman and Hedda King will work with Linda Francis (San Juan Inn), Tori Zehner (Friday Harbor House), Jim Smith (Discovery Inn), Dick Robinson Hillside House B&B) and Laura Saccio (Friday's Historical Inn) to come up with ideas on the best uses of the new 1.2 percent hotel/motel tax. The Town Council will give final approval to any plan.

Tax increase delayed, committee formed

posted 05/18/01
A 1.2 percent increase in hotel/motel tax for Friday Harbor lodging facilities will be delayed three months. The town council approved the additional tax during a special meeting Tuesday, May 15 in order to meet the presumed 45-day notice needed by the state.

It turns out the state changed the rules last year. A 75-day notice is now required and the taxes can only begin on Jan. 1, April 1, July 1 or Oct. 1. Town staff became aware of the new rules after they contacted the state to inform them of the intent to charge the tax beginning July 1. The tax will go into effect October 1.

At their May 17 meeting, the council created a seven-member committee to advise them on the use of the funds. Tori Zehner of Friday Harbor House, Jim Smith of Discovery Inn, Laura Saccio of Friday's Historical Inn, Dick Robinson of Hillside Bed & Breakfast and Linda Francis of San Juan Inn were named to the committee. Francis and Robinson were not present at the meeting and they will be contacted to make sure they wanted to be on the committee. The five attended the Tuesday meeting and expressed interest in how the money was to be used. Farhad Ghatan offered to serve on the committee.

Councilmembers Hedda King and Vonda Sheiman will also serve on the committee.

Sales tax for FH lodging
now 8.9 percent

posted 05/16/01
Friday Harbor will begin collecting an estimated additional $60,000 a year in hotel/motel tax beginning July 1, 2001. Use of the funds is still to be determined. Town Councilmembers informally agreed to set up an advisory committee of five business owners and two councilmembers to recommend the best use of the funds.

Councilmembers approved the increase during a special meeting last night. The town has been collecting a 2 percent hotel/motel tax which is deducted from the sales tax sent to the state. In other words it is not an additional tax. The 1.2 percent increase is an additional tax. Use of hotel/motel funds is restricted to promoting tourism or operating or obtaining tourist-related facilities.

Councilwoman Vonda Sheiman explained how other jurisdictions use their funds. Ocean Shores developed a marketing plan. Long Beach has a committee which presents ideas to the council.

Tori Zehner, general manager of Friday Harbor House, questioned the need for more promotion. She said, "We need to treat our visitors better -- with bathrooms, a staffed visitor center, bike paths."

Jim Smith, manager of Discovery Inn, said, "I don't trust government to handle money dedicated to tourism... The 1.5 percent proposal scares the hell out of me...A professional agency needs to be involved and needs to draw up a marketing plan."

Dick Robinson, owner of Hillside House Bed & Breakfast, suggested the funds could be used to help subsidize public transportation. Town Attorney Don Eaton cautioned that may not be an acceptable use.

Robinson made a case for setting the increase at 1.2 percent instead of 1.5 percent. "8.9 percent (7.7 sales tax plus 1.2) sounds a lot less than 9.2 (7.7 plus 1.5)," he said.

The council approved the 1.2 percent figure. Further discussion about the uses for the money generated by the increase will take place during the council's evening meeting on Thursday, May 17. Mayor Gary Boothman encouraged business owners to participate in the discussion.

Use of the 2 percent hotel/motel tax is still up in the air also. Most of the 2 percent money collected so far has been set aside for public restrooms. (Some was used for parking on the top of First Street.) The town purchased a house on Sunshine Alley in 1999 and planned to remodel it for public restrooms.

That plan has been put on hold while the town tries to find a way to use the money to help pay for the proposed upgraded waste water treatment plant. Letters from the state Auditor and an informal opinion from the state Attorney General in 1998 said the town could not use the funds for the treatment plant. Despite the passage of legislation last year, Town Attorney Don Eaton does not believe the town can legally use the money for the treatment plant.

Councilwoman Vonda Sheiman and Eaton have been in contact with Rep. Jeff Morris and state Sen. Harriet Spanel to try to clarify the situation. They plan to continue to pursue a definitive answer from state officials.

If the funds cannot be used for the treatment plant, Mayor Gary Boothman has encouraged town councilmembers to consider buying Browne's Lumber on Spring Street for parking and restrooms. Use of the hotel/motel money for parking and restrooms is acceptable.

Increase in Friday Harbor
hotel/motel tax proposed

posted 05/04/01
Town Councilmembers will hold a special meeting at 5:30 p.m. May 15 to vote on a 1.5 percent additional hotel/motel tax. If approved the tax would be added to the 7.7 percent sales tax and would go into effect July 1. The money would be used exclusively for promotion of tourism.

Win/win solution for town's hotel/motel money

posted 09/11/00
Friday Harbor Town Council may have found a way to use hotel/motel money to finance improvements to the wastewater treatment plant and promotion of tourism. Councilwoman Vonda Sheiman suggested the town increase its hotel/motel tax from 2 percent to 3.5 percent.

The increase would allow the town to continue its $50,000 grant program for off-season tourism promotion. The rest of the hotel/motel money would be used for expansion of the waste-water treatment plant.

The council discussed the proposal during a Sept. 7 worksession.

Help for Town's infrastructure

posted 03/06/00

Friday Harbor may soon be able to tap hotel/motel 2 percent tax revenue as a source for funding for water and sewer treatment plant improvements. Gov. Locke's signature is the only obstacle remaining.

Senate Bill 6732 passed by a 79 to 18 vote, Thursday, March 3. The bill clarifies language regarding acceptable uses for the 2 percent money. (Hotel/motel 2 percent money comes from sales tax levied on the lodging industry. The state allows towns and counties to keep 2 of the 6.5 percent tax levied on hotels and motels.) It states: "that nothing in chapter 452, Laws of 1997, or chapter 35, Laws of 1998 is intended to disallow any use or purpose permitted under section 1, chapter 290, Laws of 1994 as long as the use or purpose was proposed by the local government, but not implemented by May 20, 1997.

The bill was necessary to clarify language. In 1991, the law stated hotel/motel money could be used "to mitigate the impacts of tourism." In 1997, the law was rewritten to say: "used solely for the purpose of paying all or any part of the cost of tourism promotion, acquisition of tourism-related facilities, or operation of tourism-related facilities. "

Senator Harriet Spanel (D-Bellingham) was one of the sponsors of the bill. County Commissioners, town council members, the mayor, and the local League of Women Voters all lobbied for the bill. They received help from Joe Daniels, a veteran lobbyist, who is working with the county on ferry issues. He voluntarily helped lobby for SB 6732.

"A lot of people worked very hard for little old Friday Harbor," said Mayor Gary Boothman in a phone interview Friday. "This legislation will give the town council one more tool to help pay for sewer funding,"

The town has sought additional sources of funding to help deal with the need to size its infrastructure to handle peak summer loads.

The town has been collecting the money since 1993. Prior to that it let the county collect the funds. Some of the money has been used for parking -- at the top of First St. For the past few years, hotel/motel money funded the portable restrooms in the summer in Friday Harbor.

A large portion of the money that has been saved up, is being used to paid for the purchase of the "Little House on Sunshine Alley." It is being remodeled into public restrooms.

This year, for the first time, 2 percent money was given out to groups which are promoting tourism.
(See related story)

Last year, the town collected $83,000 in 2 percent Hotel/motel money. Previous years the amount collected was:

1993: $51,479.06
1994: $68,878.36
1995: $104,211.93
1996: $102,476.66
1997: $118,471.02
1998: $126,514.39

Town ready for state money

posted 02/00
Money for public facilities in San Juan County is available from the state. The catch is: the public facility must be listed as an item in the county's capital facilities plan or the capital facilities plan of a city or town located within the county.

According to Town Administer King Fitch the county does not have such a plan. "None in place and adopted," he told the town council Thursday. "The whole argument comes down to a math equation. They didn't do the math. We did and we've been doing it for a number of years."

"If they're not going to use the $200,000 and can't because they don't have an adopted comp plan, it makes sense to give it to the town," said Friday Harbor Town Councilwoman Vonda Sheiman.

House Bill 2260 passed last year, allows the county to use some of the sales tax money it would normally send to the state Department of Revenue. The bill states: Moneys collected under this section shall only be used for the purpose of financing qualifying public facilities in rural counties. In implementing this section, the county shall consult with cities, towns, and port districts within the county.

"There is a bill pending to repeal 2260," said Sheiman. She told the council that projects on an approved list before the bill is repealed would still be funded.

Councilmembers and Mayor Gary Boothman want to select two items off of the town's facilities plan list and submit the request to the Board of County Commissioners. HB 2260 money is given to the county to dispense. The BOCC is setting up a process to distribute the funds.

"Since we are ready and we're one of the few organizations that is ready," Boothman told the council. "They (BOCC) may say out of desperation 'we'll look foolish if we don't fund somebody'."

Hotel/motel money
could flow into town's water system

Senator Harriet Spanel (D-Bellingham) sponsored Senate Bill 6732 which could lead to some financial relief for the town. If it becomes law, hotel/motel 2 percent money could be used for restroom facilities, water and sewage treatment systems. The bill clarifies the definition of "tourism-related facility."

It "revises the definition of "tourism-related facilityv in RCW 67.28.080 to accommodate the impact of tourist activities in municipalities made up entirely of islands or in municipalities that have a population of less than five thousand, to allow these municipalities to augment or redesign the infrastructure impacted by tourist activities. For the purposes of this section, "infrastructure" means restroom facilities, and water and sewage treatment systems."

In 1991 legislation was passed which allowed hotel/motel money to be used to "mitigate the impacts of tourism." In 1997 the law was revised. The funds could be "used solely for the purpose of paying all or any part of the cost of tourism-related facilities, or operation of tourism-related facilities."

Representative Jeff Morris (D-Sedro-Woolley) worked with the state Attorney General's office early last year to try to change the interpretation. Legislators, involved in the 1997 rewriting, told Morris they did not mean to remove Friday Harbor's option to use the money to pay for water and sewage capital facilities. Last year's legislative session ended with the issue still unresolved.

Spanel's bill was passed out of committee and onto the senate floor. If the bill is passed by the legislature it would go into effect 90 days after the legislative session ended.

Becky Bogard, WSHMA/WACVB and Elizabeth Bolian, SW King County Lodging Association opposed the bill. Representing the lodging industry, they argued expansion of available uses for the money would tempt local governments to raid the fund for general government purposes.

Hotel/motel money averages $110,000 to 120,000 a year for the Town of Friday Harbor. Last year it brought in $83,000.
previous hotel/motel stories

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