ITEM TITLE:
Work Session: Public Accommodation Tax Code Overview and Revision
SUBMITTED BY: Elise Sorum-Birk, Deputy City Clerk & Jordan Nelson, Assistant City Manager/ Finance Director
FISCAL NOTES:
Expenditure Required: n/a
Unencumbered Balance: n/a
Funding Source: n/a
RECOMMENDATION:
Receive and file.
SUMMARY STATEMENT:
The goal of this work session is to provide City Council an opportunity to discuss the existing Public Accommodation Tax (Bed Tax) Code (VMC 3.24) and to consider options for future updates to this tax.
During the 2024 strategic planning session and again during the adoption process for Ordinance 24-05 Council requested a more wholistic conversation about the overall structure of the public accommodation tax and the use of revenues brought in from it.
Current code sets a rate equal to 6% of the rental value and applies to hotels, motels and lodges as well as short term rentals. Current code also directs that public tax revenues should be placed in an economic development fund and distributed to economic development projects based on an application process.
In practice, for many years revenues from this tax have not gone through an application process but have instead been appropriated directly to the Valdez Convention and Visitors Bureau by Council (as was directed by code between 1992 and 2004).
Attached for review are:
• Chapter 3.24 of the Valdez Municipal Code titled Public Accommodation Tax.
• Staff recommendations for code amendments and additional amendment options for Council to discuss/ consider.
• A brief legislative history of the existing ordinance.
• Data comparing bed tax rates in communities throughout Alaska.
• Data on COV economic development spending.
• Look back at revenues and expenditures from this source.