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HomeMy WebLinkAboutR-2023-151 Resolution authorizing a temporary agreement between the State of Washington Department of Revenue and the City of Yakima Tourism Promotion Area for the administration and collection of the tourism promotion lodging chargesA RESOLUTION RESOLUTION NO. R-2023-151 authorizing the Temporary Agreement for the State Administration of the City of Yakima and Yakima County Tourism Promotion Area Fees. WHEREAS, the Tourism Promotion Area (TPA) is an important tool for the City's investment in our local economy through tourism, created by Ordinance No. 2004-17 and revised by Ordinance Nos. 2010-37, 2011-21 and 2021-11 of the City Council of the City of Yakima, pursuant to the authority of Chapter 35.101 RCW; and WHEREAS, RCW 35.101.090 provides that a City imposing a lodging charge by resolution or ordinance shall contract with the Department for the administration and collection of lodging charges, and WHEREAS, the City of Yakima received a notification from the Department of Revenue regarding the administration of the City's TPA charges and its ordinance that needs to be evaluated and addressed, which requires the temporary agreement be entered into; and WHEREAS, the City Council of the City of Yakima finds that it is in the best interest of the City of Yakima and its residents to enter into the temporary agreement with the Department of Revenue; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized to execute the Temporary Agreement for the State Administration of the City of Yakima and Yakima County Tourism Promotion Area Fees, a copy of which is attached hereto and fully incorporated herein. ADOPTED BY THE CITY COUNCIL this 14th day of November, 2023. ATTEST: , " Janice Deccio, Mayor I osalinda Ibarra, City Clerk TEMPORARY AGREEMENT FOR THE STATE ADMINISTRATION OF THE CITY OF YAKIMA AND YAKIMA COUNTY TOURISM PROMOTION AREA FEES THIS AGREEMENT ("`Agreement") is entered into by and between the City of Yakima ("City") and the State of Washington Department of Revenue ("Department") for the administration of the tourism promotion lodging charges imposed under authority of RCW 35.101.052. This Agreement is effective December 1, 2023. RECITALS WHEREAS the Legislature of the State of Washington by chapter 35.101 RCW authorizes a legislative authority, either singularly or through an interlocal agreement with other jurisdictions. to establish a Tourism Promotion Area ("TPA") to permit the levy of lodging charges to be expended exclusively for tourism promotion; WHEREAS chapter 35.101 RCW provides that a legislative authority imposing a lodging charge by resolution or ordinance shall contract with the Department for the administration and collection of the levy of lodging charges; WHEREAS the legislative authority has by ordinance, copy attached hereto, indicated its intention to fix and impose a lodging charge in addition to all other sales and use taxes and any special assessments that may be levied (Ordinance No. 2011-21); WHEREAS Ordinance No. 2011-21 provides xclusi ns from the TPA lodging charge which are not permitted under state law, including: vehicle parks, campgrounds and any lodging business not classified as a hotel or motel with forty or more lodging units; NOW, THEREFORE, to provide for the administration of lodging charges, the parties agree as follows: AGREEMENT 1. Incorporation of Recitals. The above recitals are true and correct and are incorporated herein by this reference as if fully set forth. 2. Functions of the Department. The Department shall exclusively perform all functions incident to the administration and collection of the lodging charges imposed by Ordinance No. 2011-21 taxable by the state under chapter 82.08 RCW. The Department will collect TPA charges described under Ordinance No. 2011-21 and any amendments until December 31, 2024, to allow the City or any other party to seek corrective legislation to chapter 35.101 RCW, or to permit local jurisdictions to adopt exclusions according to their unique geographic and economic needs. In the event corrective legislation is not enacted by December 31, 2024, the City shall amend Ordinance No. 2011-21, or adopt another ordinance which does not include exclusions not permitted under existing state law. The Department will not enter into a new agreement to collect the TPA charges for the City until the nonconforming ordinance is cured. 3. Collection Not Authorized. Pursuant to RCW 35.101.050, the Department is not authorized or required to administer and collect on behalf of the City any charge for which there are more than six classifications. 4. New or Additional Legislation. In addition to the Ordinance attached hereto, the City shall provide the Department with copies of any new and/or additional ordinances imposing any new charges or changing the rate of any charge. Such copies shall be provided to the Department no later than 75 days prior to the effective date of the ordinance. 5. Collection of Lodging Charges. The Department shall collect the lodging charges by the end of the following month after the due date of the taxable period for which lodging charges are imposed pursuant to the ordinance. In accordance with RCW 35.101.090, the charges so collected shall be deposited by the Department in the local tourism promotion account in the custody of the state treasurer. The Department shall provide the state treasurer with instructions on the proper monthly distribution of the deposited funds in accordance with RCW 35.101.100. 6. Rules and Regulations Adopted by the Department. Any specific rules and regulations adopted by the Department to facilitate the administration and distribution of the lodging charges shall be in accordance with the State Administrative Procedure Act and chapter 35.101 RCW. Until specific rules and regulations are adopted, the Department shall apply the provisions contained in chapters 82.03, 82.08, 82.12, 82.14, and 82.32 RCW, as the same exist or may hereafter be amended and insofar as the same are relevant to lodging charges. Such provisions shall have full force and effect of Department rules when applied to lodging charges. 7. Uniform Collection. The Department performs its duties hereunder so that as far as possible the lodging charges shall be administered and collected uniformly with the state's sales and use taxes. 8. Refunds or Credits. Any refunds or credits the Department finds are owed relating to the lodging charges shall be refunded to the taxpayer from the City's portion of the local tourism promotion account. 9. Notification of Error of Fund Distribution. Either party shall have six months from the date funds are distributed by the state treasurer to notify the other party in writing of any error in the amount of distributed funds. The party receiving such notice shall have sixty (60) days to review the claim. Upon agreement of the parties, the Department shall deposit any necessary additional funds with the state treasurer for distribution to the City; or in the event of an over - distribution, the City shall return such over -distribution to the Department. If the City and the Department cannot reach an agreement, the parties agree to attempt mediation or other dispute resolution process prior to instigating litigation in Superior Court. 10. Disclosure of Taxpayer Information, Documentation and Reports. The Department shall provide taxpayer information, documentation, and reports to the City, in accordance with the disclosure limitations of RCW 82.32.330. The City shall require its authorized representatives that have access to confidential taxpayer information to sign a Department "Confidentiality and Non -Disclosure Agreement" and shall ensure such representatives comply with RCW 82.32.330. 11. Parties' Communication and Cooperation. The parties agree to establish and maintain open lines of communication and to work cooperatively to improve administration and public understanding of the lodging charges (special assessments). Either party may initiate a meeting, to be held at a mutually convenient time and place, to share information and to discuss matters related to administration and collection of the lodging charges. 12. Disputes. In the event a dispute arises under this Agreement that cannot be resolved by mutual agreement of the parties, either party may elect mediation in which the Department and the City shall each individually appoint one member to a Dispute Board and those members shall select a third member. The Dispute Board shall evaluate the dispute and make a written determination after considering the relevant facts and legal authorities. The Dispute Board's determination shall be given significant weight by both parties who will meet after the determination is issued to resolve the dispute. If a resolution is not reached, the determination of the Dispute Board shall be admissible in any future legal proceeding between the parties concerning the dispute. Each party shall be responsible for a proportionate share of the costs of the member of the Dispute Board. This remedy is not intended to be exclusive of other remedies existing in law, by statute, or otherwise. No suit, action, or proceeding of any kind, type, or nature whatsoever arising out of or in any way relating to this Agreement will be commenced by the City or the Department other than in the Superior Court of Thurston County, Washington. 13. Indemnification. To the extent permitted by law, the City agrees to indemnify, defend, and hold harmless the Department for the State of Washington from claims that challenge the authority of the City to impose lodging charges pursuant to the Ordinance. The City agrees that in the event there shall be a legal challenge to the Ordinance or resolutions, the Department shall not be obligated to represent the City or otherwise defend its position in any proceeding relating to such challenge. 14. Effective Date. This Agreement shall take effect at 12:01 AM, December 1, 2023 and shall thereafter terminate on December 31, 2024. 15. Waiver. Any failure by any party to insist upon strict performance of any provision of this Agreement shall not be deemed a waiver of the right to require future strict performance of such provision. No failure or delay in exercising any right or remedy hereunder shall be deemed a waiver of such right or remedy. No term or condition of this Agreement shall be waived, modified or deleted except by an instrument, in writing, signed by personnel authorized to bind each of the parties. 16. Modification. This Agreement may be amended by mutual agreement of the parties. Such amendments shall not be binding unless they are in writing and signed by personnel authorized to bind each of the parties. The parties to this Agreement will notify each other in a timely manner when they find it necessary to request an amendment to this Agreement. 17. Entire Agreement. This Agreement contains all the terms and conditions agreed upon by the parties. No other understandings, oral or otherwise, regarding the subject matter of this Agreement shall be deemed to exist or to bind any of the parties hereto. 18. Counterparts. This agreement may be executed in two or more counterparts. each of which shall be deemed an original and which together constitute one and the same. IN WITNESS WHEREOF, the State of Washington, Department of Revenue, and the City of Yakima have executed this contract as of the day and year written below. Attest: 12/14/2023 Date Attest: t1-Iq ?ca3 SR ADD OPS, Department of Revenue Date Robert Harrison, City Manager, City of Yakima, WA aoa3 Date Sara Watkins, City Attorney, City of Yakima, WA C,TY CONTRACT NO: RE SOLUTION NO. Approved as to Form only: Andrew Krawczyk, Assistant Attorney General 1 AN ORDINANCE CITY OF YAKIMA ORDINANCE NO. 2011-21 relating to the Yakima Tourism Promotion Area for the City of Yakima and revising the Tourism Promotion Area ordinance to reflect the decision of the city of Union Gap and the city of Selah to terminate their participation in the Tourism Promotion Area and to make the necessary adjustments in membership and assessment provisions relevant to said termination; and amending sections 5.99.010, .020, .030, .040, .060, and .070 of Chapter 5.99 of the City of Yakima Municipal Code entitled "Tourism Promotion Area". BE IT ORDAINED BY THE CITY OF YAKIMA: Section 1. Sections 5.99.010, .020, .030, .040, .060 and .070 of Chapter 5.99 entitled "Tourism Promotion Area" of the Yakima Municipal Code is amended to read as follows: Chapter 5.99 TOURISM PROMOTION AREA Sections: 5.99.010 Definitions. 5.99.020 Establishment of tourism promotion area. 5.99.040 Tourism promotion charge. 5.99.050 Use of tourism promotion charge revenues. 5.99.060 Establishment of Yakima hotel and motel commission. 5.99.070 Modification or disestablishment of the tourism promotion area. 5.99.080 Administration/collection of tourism promotion charges. 5.99.090 Inspection of records. 5.99.100 Contract with state for administration. 5.99.110 Violation —Penalties. 5.99.120 Severability. 5.99.010 Definitions. As used in this chapter, the following terms, unless the context otherwise dictates, shall have the following meanings: "Agreement" means the interlocal cooperation agreement between the city of Yakima, the city of Union Gap, the city of Selah and Yakima County for the establishment of a Yakima County tourism promotion area by the city of Yakima as authorized by RCW 35.101.040(2). "Annual budget" means the Yakima County tourism promotion area budget for a fiscal year, as adopted or amended by the city council of the city of Yakima, after the receipt of a recommendation from the Yakima hotel and motel commission, identifying all estimated revenue from tourism promotion charges for the fiscal year, and providing for all proposed uses of tourism promotion charge revenue for the purpose of providing tourism promotion in Yakima County for the ensuing fiscal year. "Lodging business" means business located within the Yakima County tourism promotion area that furnishes lodging taxable by the state under RCW Chapter 82.08 and that is classified as a hotel or motel with forty or more lodging units. Reasonable vehicle parks and campgrounds are not included. "Operator" means the operator of a lodging business, whether in the capacity of owner, general manager, lessee, sub lessee, mortgagee in possession, licensee, designee, or any other similar capacity. Page 1 The "promotion of tourism and convention business" means activities and expenditures designed to increase tourism and convention business, including but not limited to advertising, publicizing, or otherwise distributing information for the purpose of attracting and welcoming tourists to the city of Yakima and the unincorporated areas of Yakima County. "Tourism promotion charge" means the charge imposed by the city of Yakima on the furnishing of lodging by a lodging business within the Yakima County tourism promotion area for the purpose of providing for funding of the promotion of convention and tourism business, under the authority of RCW 35.101.050, in Yakima County. "Yakima County tourism promotion area" means the tourism promotion area with boundaries that include the city of Yakima and the unincorporated areas of Yakima County and which was established by the ordinance of the city council of the city of Yakima pursuant to the authority of RCW Chapter 35.101 as authorized by the resolutions of the city council of the city of Yakima and the county commissioners of Yakima County adopting the terms of the agreement. "Yakima hotel and motel commission" means the Yakima hotel and motel commission, established by the city of Yakima, whose members are appointed by the county commissioners of Yakima County and the city council of the city of Yakima to provide recommendations to the city council of the city of Yakima on proposed uses and projects of the Yakima County tourism promotion area. 5.99.020 Establishment of tourism promotion area. There is hereby established a Yakima County tourism promotion area having boundaries which include the city of Yakima and the unincorporated area of Yakima County; provided, however, no area within Yakima County which is within the boundaries of any incorporated city or town shall be included within the boundaries of the tourism promotion area unless the city or town has entered into an agreement prior to the effective date of the ordinance codified in this chapter. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). 5.99.040 Tourism promotion charge. Effective October 1, 2011 there shall be imposed a tourism promotion charge on the furnishing of lodging by a lodging business located in the Yakima County tourism promotion area in the amount of two dollars ($2.00) per room per day. The tourism promotion charges imposed under this chapter are not a tax on the "sale of lodging" for the purposes of calculating the lodging tax limit specified in RCW 82.14.410. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). 5.99.050 Use of tourism promotion charge revenues. The revenues from the tourism promotion charges imposed by the city of Yakima within the Yakima County tourism promotion area shall be used for the following purposes only: A. The funding of all activities and expenditures designed to increase tourism promotion and convention business within the Yakima County tourism promotion area as specified in the Yakima County tourism promotion area budget; B. The marketing of convention business that benefit local tourism and result in increased convention business within the Yakima County tourism promotion area; C. The marketing of Yakima County to the travel industry in order to benefit local tourism and result in overnight stays within the Yakima County tourism promotion area; and Page 2 D. The marketing of Yakima County to recruit major sporting events in order to promote local tourism resulting in overnight stays within the Yakima County tourism promotion area. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). 5.99.060 Establishment of Yakima hotel and motel commission. A. The city council of the city of Yakima, pursuant to the authority of RCW 35.101.1301(1), hereby establishes a seven -member Yakima hotel and motel commission to advise the city council of the city of Yakima on the expenditure of tourism promotion charge revenues by the Yakima County tourism promotion area to fund tourism promotion in Yakima County, which shall be composed of five voting members and two nonvoting members who shall be appointed in the manner set forth in this section. B. Voting members of the Yakima hotel and motel commission shall be selected by the city council of the city of Yakima in the manner set forth in subsections C and D of this section, from a list of nominees prepared by the Yakima Valley lodging association. All nominees for voting membership on the Yakima hotel and motel commission must be operators of lodging businesses within the Yakima County tourism promotion area or employed by the operator of such a lodging business. C. The city council of the city of Yakima shall appoint five voting members to represent the city of Yakima, with the voting members appointed by the city of Yakima representing qualified lodging businesses that are located within the city limits of the city of Yakima or within the unincorporated areas of the county tourism promotion area.. D. One nonvoting member of the commission shall be appointed from the members of the county commissioners of Yakima County and one nonvoting member shall be appointed from the members of the city council of the city of Yakima. Nonvoting members of the Yakima hotel and motel commission may participate in all discussions regarding proposed activities and programs by the Yakima County tourism promotion area for the promotion and marketing of tourism in Yakima County but shall not have voting rights. E. The initial voting members of the Yakima hotel and motel commission shall serve staggered terms, with one member serving a one-year term, two members serving two-year terms, and two members serving three-year terms. The length of the term for each individual member of the initial Yakima hotel and motel commission shall be chosen by lot at the first meeting of the commission. Thereafter, all voting members subsequently appointed to the Yakima hotel and motel commission shall serve for three-year terms. F. All of the revenues from tourism promotion charges collected by the city council of the city of Yakima from lodging businesses within the jurisdiction of the unincorporated area of Yakima County and the city of Yakima shall be allocated by the city council of the city of Yakima in accordance with the annual budget for the Yakima County tourism promotion area. The Yakima hotel and motel commission shall make a recommendation to the city council of the city of Yakima on all annual budgets; however, the city council of the city of Yakima shall have the ultimate authority to set and approve all annual budgets. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). 5.99.070 Modification or disestablishment of the tourism promotion area. A. The city council of the city of Yakima, by appropriate action, may modify the provisions of the ordinance codified in this chapter or provide for the disestablishment of the Yakima County tourism promotion area, after adopting a resolution of intention to such effect. Such resolution of intention shall describe the change or changes proposed, or indicate that it is the intention to disestablish the Yakima County tourism promotion area, and shall state the time and place of a public hearing to be held by the city council of the city of Yakima to consider the proposed action. B. If the operators of lodging businesses which paid over forty percent of the tourism promotion charges imposed within the Yakima County tourism promotion area during the Page 3 preceding calendar year file a petition with the city council of the city of Yakima or the Yakima hotel and motel commission requesting that the city council of the city of Yakima adopt a resolution of intention to modify or disestablish the Yakima County tourism promotion area, the city council of the city of Yakima shall adopt such resolution and act upon it as required by law. Signatures on such petition shall be those of a duly authorized representative of the operators of lodging businesses in the Yakima County tourism promotion area; provided, however, the effective date of any modification or withdrawal shall be coordinated with the Washington State Department of Revenue in conjunction with its responsibility to administer the tourism promotion charges imposed pursuant to this chapter. C. In the event a resolution under subsection A or B of this section proposes disestablishment of the Yakima County tourism promotion area, the city council of the city of Yakima by ordinance shall disestablish the Yakima County tourism promotion area; unless at such hearing, protest against disestablishment is made by the operators of lodging businesses paying over fifty percent of the tourism promotion charges in the Yakima County tourism promotion area. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). 5.99.080 Administration/collection of tourism promotion charges. The tourism promotion charges imposed under this chapter shall be administered by the Washington State Department of Revenue and shall be collected by lodging businesses from persons taxable by the state under RCW Chapter 82.08. The provisions of RCW Chapter 82.32 apply to the tourism promotion charges imposed under this chapter. The tourism promotion charges collected by the Washington State Department of Revenue shall be deposited by the Department in the local tourism promotion account created and maintained by the State Treasurer. All receipts from the tourism promotion charges imposed hereunder must be deposited into this account. Expenditures from the account may only be used for tourism promotion resulting in overnight stays in the tourism promotion area lodging businesses. The State Treasurer shall distribute the money in the account on a monthly basis to the city of Yakima. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). 5.99.090 Inspection of records. All lodging businesses subject to the collection of the tourism promotion charges, as set forth in this chapter, and the city council of the city of Yakima consent to the inspection of such records as are deemed necessary by the Washington State Department of Revenue pursuant to applicable statues, rules or regulations. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). 5.99.100 Contract with state for administration. The mayor of the city of Yakima, or a majority of the city council of the city of Yakima, is authorized to enter into contract(s), at other than an open meeting, with the Washington State Department of Revenue for the administration of the charge imposed pursuant to this chapter. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). 5.99.110 Violation —Penalties. Any person, firm or corporation who fails or refuses to collect the charge as required under the terms of this chapter with the intent to violate the provisions of the ordinance codified in this chapter or to gain some advantage or benefit, either directly or indirectly, and any guest who refuses to pay any charge due under this chapter shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by imprisonment in the county jail for a maximum term fixed by the court of not more than ninety days, or by a fine in the amount fixed by the court of not more than one thousand dollars or by both such imprisonment and fine; provided, however, the penalty provided for under the terms of this section shall be in addition to any other provisions provided for by law. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). Page 4 5.99.120 Severability. If any part or provision of the ordinance codified in this chapter or its application to any person or circumstance is held invalid, it is the intent of the city council of the city of Yakima that the remainder of this chapter, or its application of the provisions to other persons or circumstances, is not affected. (Ord. 2010-37 § 1 (part), 2010: Ord. 2004-17 § 1 (part), 2004). Section 2. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance is declared invalid or unconstitutional for any reason, such decision shall not affect the validity of the remaining portions of this ordinance. Section 3. This ordinance shall not be in full force and effect until 30 days after its passage, approval, and publication as provided by law and by the City Charter AND approval is received from the Washington State Department of Revenue as required by YMC 5.99.070(B). PASSED BY THE CITY COUNCIL, signed and approved this 17th day of May, 2011 t ATTEST: City Clerk Publication Date: May 20, 2011 Effective Date: June 19, 2011 Micah Cawley, May Certified to be a true and correct copy of the original filed in my office. Page 5 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDASTATEMENT Item No. 4. For Meeting of: November 14, 2023 ITEM TITLE: Resolution authorizing a temporary agreement between the State of Washington Department of Revenue and the City of Yakima Tourism Promotion Area for the administration and collection of the tourism promotion lodging charges SUBMITTED BY: Bob Harrison, City Manager SUMMARY EXPLANATION: The City of Yakima has the authority to impose a lodging charge. This agreement shall contract the City of Yakima with the State of Washington Department of Revenue for the administration and collection of the levy of lodging charges. ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: Adopt Resolution. ATTACHMENTS: Description ❑ Resci _.; ❑ Temporary Agreement ❑ Ordinance 2011-21 O Ordinance 2021-11 Upload Date 11190023 11'9/2023 11'912023 Type Resolution Contract Backup Matenal Backup Matenal