FEDRAC MINUTES 04-17-2019 SPECIAL CITY or
Federal Way
City Council
Finance/Economic Development/Regional Affairs Committee
Wednesday, April 17, 2019 SPECIAL MEETING Federal Way City Hall
5:00 P.M. SUMMARY MINUTES Hylebos Conference Room
CALL TO ORDER: Committee Chair Duclos called the meeting to order at 5:00 p.m.
COMMITTEE MEMBERS IN ATTENDANCE: Chair Dini Duclos, Councilmember Hoang Tran,
Councilmember Lydia Assefa-Dawson
COMMITTEE MEMBER EXCUSED:
COUNCILMEMBERS IN ATTENDANCE: Deputy Mayor Susan Honda, Councilmember Mark
Koppang
STAFF MEMBERS IN ATTENDANCE: Economic Development Director, Tim Johnson; City
Attorney, Ryan Call; Accounting Manager Chase Donnelly; Mayor's Office Manager, Kathy
Arndt
OTHERS PRESENT: Federal Way Citizens
PUBLIC COMMENT:
REVENUE GENERATING IDEAS DISCUSSION:
*Please refer to attached documents*
Chair Duclos explained that the purpose of this meeting is to review revenue generating ideas
identified by the ad hoc committee for consideration and possible recommendation to full
Council. Economic Development Director Tim Johnson presented to the Committee several
staff reports, entitled "Economic Development Review of City Council Revenue Generating
Ideas", "Update, Formulation of Tourism Promotion Area" and "Update, Large Tourism Events
in Federal Way in 2019." Mr. Johnson explained the various revenue generating ideas, broken
down by how likely each is to produce additional revenue. Discussion took place regarding
these topics.
Information only.
NEXT MEETING: April 23, 2019
MEETING ADJOURNED: 6:08 p.m.
Wednesday,April 17, 2019 Pagel
STAFF REPORT
DATE: April 12, 2019
TO: FEDRAC Committee
FROM: Tim Johnson, Economic Development
SUBJECT: Economic Development Review of City Council Revenue Generating Ideas
RECOMMENDATION:
Accept and File
BACKGROUND:
The City Council has been brainstorming ideas of generating revenue. For reference, attached is their
October 8, 2018 Chart on Revenue Generating Ideas. As a part of this process, the City Council has been
examining the identified opportunities. In the effort to further examine these opportunities, the chair of
FEDRAC requested input from economic development.
DISCUSSION:
The brainstorming categorized the ideas into three categories. They include the following:
• Most likely to produce additional revenue
• Likely to produce additional revenue
• Unlikely to produce additional revenue
The Finance Director provided a response and insight at the City Council Retreat in January 2019. This
review follows a similar approach to the response.
MOST LIKELY TO PRODUCE ADDITIONAL REVENUE
Increase Sales Tax
In the examination of increasing sales tax, there is no tax capacity left under state authority to increase
local sales tax in Federal Way.
However, increasing volume could be an option. Washington could collect hundreds of millions of
dollars a year in extra tax revenue due to a Supreme Court ruling that identifies online shoppers owe
state sales tax even if they buy from a company in another state.
In 1992, the Supreme Court ruled (Quill Corp. v. North Dakota) that under the commerce clause of the
US Constitution, a retailer with no physical presence in the online purchaser's state of residence
(technically called a "nexus" requirement) is not required to collect a state or local sales tax from the
consumer.
However, the Supreme Court revisited this issue in 2018 in South Dakota v. Wayfair, Inc.,
overturned Quill, and gave states broad authority to collect the tax. The Supreme Court upheld a South
Dakota law requiring any entity with sales of$100,000 or more or with at least 200 transactions in South
Dakota to collect and remit the state's sales tax.
1
While the State of Washington's Office of Financial Management knows of the case, they also
understand that it will not be a single solution for revenue. Washington relies heavily on sales tax for
state programs and salaries and has tried to collect the taxes on the increasing volume of goods
purchased online from outside its state line.
The Legislature passed a series of laws to try to capture some of that money, including a provision in
2017 tax compromise bill. That law requires so-called remote sellers who have more than $10,000 in
sales with Washington customers to do one of two things. They can either voluntarily collect a "use tax"
from the customer, which is equal to the sales tax, and send it to the state; or they could notify the
Washington Department of Revenue of the buyer so the state can try to collect it. Estimates prepared
for that bill projected it could collect as much as$350 million in additional tax revenue for the state in a
two-year budget cycle. This law took effect on January 1, 2018. And even though revenue is being
collected, the state is just now beginning to understand what it will be able to collect.
For Federal Way, Economic Development recently examined Non-Store Taxable Retail Sales comparing a
ten year period, 2007 to 2017, see Attachment B. Taxable sales increased by three fold from Non-Stores
during this time period. It appears that if there is a shining star in generating revenue for the City, this
is one category to keep an eye on as this sector increases have occurred in less than five years. It is
recommended that City Council direct the Mayor to have staff examine opportunities related to this
sector in addressing revenue generation.
Marijuana Tax
While Washington has legalized recreational marijuana, there are a variety of issues Federal Way needs
to understand related to this possible revenue stream.
First, the City's Finance Director identified during the City Council Retreat the potential of receiving
$300,000 a year through state revenue sharing of taxable marijuana sales based upon the City's
elimination of the moratorium on marijuana retailing.
The State currently taxes marijuana through a single excise tax of 37%at the time of retail sale, in
addition to the regular state and local sales tax. The revenue from the excise tax is shared with cities,
towns, and counties (RCW 69.50.540). This tax took effect in June 2015 when the legislature passed HB
2136 and fully replaced the previous excise tax of 25% at three different phases (production, processing,
and retail sale) established by the original marijuana initiative of 2012.
Also, the normal retail sales tax for each jurisdiction has always applied to retail sales of marijuana at
licensed stores, and that has not changed, but RCW 82.08.9998 provides that, since July 1, 2016,
the retail sales tax will not be applied to:
• Retail sales of medical marijuana to "qualifying patients or designated providers who have been
issued recognition cards."
• Retail sales tax of high CBD/low THC medical cannabis to any person
2
Second, through the state agency rulemaking process, the Liquor and Cannabis Board has adopted
regulations on the maximum number or retail store licenses that will be issued for each county, and for
some of the cities and towns in each county. The State through this process has allotted 3 stores for
Federal Way. Current state documentation illustrates that there are four licenses with current or
pending licenses for these three allotted stores.
It is difficult to estimate the sales tax revenue of a future store in Federal Way. If there was no leakage
factor, meaning consumers do not go elsewhere due to price, loyalty and promotion it would be easier.
Simply, understanding the tax implications is hard to estimate until a store has a track record of
operation and the city can understand its fiscal impact. Currently Federal Way is in other nearby
jurisdiction's trade market area for marijuana rather than the other way around.
However, as identified by both the directors of Economic Development and Finance, due to the City's
moratorium, the state Liquor and Cannabis Board is currently not accepting retail applications unless
there are changes made by jurisdictions that either have banned or have a moratorium on marijuana
stores.
Additionally, the City needs to understand the regulatory compliance applicable to stores and needs to
understand the variety of implications associated with this revenue stream.
Nuisance Tax on Buildings
A nuisance tax on empty and blighted buildings has been identified by the City Attorney as unlawful in
Washington. There may be some confusion with condemnation of blighted properties where a local
jurisdiction can recover its costs in that process. But there appears to be no ability to generate revenue,
by imposing fees to recoup the cost of mitigating properties that do not comply with nuisance laws.
Storage Facility Fees
Due to our current practice of using employee counts to define the business registration fee, the city's
Finance Director suspected that storage facilities pay a small fee compared to other types of businesses
of a particular profitability. Discussions on this topic were quickly complicated when staff received
feedback from impacted businesses that identified that many apartment complexes operate very similar
to the storage rental business.
While an increase on fees can raise revenue, the question needs to be examined further related to how
much additional revenue beyond the current fee can be acquired? On the surface it does not appear to
be a significant single source that can be a solution to the General Fund. This is a City Council policy
discussion that needs further review.
Levy LID Lift
A taxing jurisdiction that is collecting less than its maximum statutory levy rate may ask a simple
majority of voters to "lift"the total levy amount collected from current assessed valuation by more than
1% (RCW 84.55.050— also see WAC 458-19-045, which provides a better understanding of the process
than the statute). The new levy rate cannot exceed the maximum statutory rate.
The passage of Initiative 747 in 2001 established a "101% levy limit" limiting the amount that any taxing
jurisdiction can increase its regular property tax levy (the total amount of revenue collected) from
current assessed valuation (excluding new construction) without voter approval. The state Supreme
Court struck down the initiative in 2007, but the legislature reinstated it.
3
The levy limit is as follows:
• Taxing districts under 10,000 population may not increase the total levy amount collected from
current assessed valuation by more than 1%annually(the "levy lid").
• Taxing districts with a population of 10,000 or more may not increase the total levy
amount collected from current assessed valuation by more than 1% annually or the rate of
inflation, whichever is lower. However, if the inflation rate is below 1%, these jurisdictions may
adopt resolutions of"substantial need"to increase the levy up to 1 percent.
While this mechanism can increase revenue, it requires a vote of the people. Successful lid lifts have
been shown to require public education campaign and specific uses identified that will be funded.
Transportation Benefit District
Chapter 36.73 RCW authorizes cities to form transportation benefit districts through a mechanism of a
quasi-municipal corporation and independent taxing district that can raise revenue for specific
transportation projects.
Revenue from A transportation benefit district may be used for transportation improvements included
in a local, regional, or state transportation plan (RCW 36.73.015(6)). Improvements can range from
roads and transit service to sidewalks and transportation demand management. Construction,
maintenance, and operation costs are eligible.
A district is primarily funded either through vehicle license fees and/or sales taxes.
The most common TBD funding source is a vehicle license fee(RCW 82.80.140, RCW 36.73.040(3)(b)).
TBDs may impose vehicle license fees up to$50 without a public vote however, they are subject to a
variety of conditions, or may impose fees up to$100 with voter approval.
While this mechanism is a revenue generating idea, it cannot be used to enhance the General Fund.
LIKELY TO PRODUCE ADDITIONAL REVENUE
Increase Fees for Renting Chambers
While this is likely to produce additional revenue, the key question is how much revenue can an increase
of a fee enhance the General Fund. It is recommended that the City Council annually review this and
other fees as part of its budget process.
Business&Occupancy Tax
Enactment of a B&O tax would likely produce revenue; however, the city policy has been not to have
one in support of creating a strong business environment. Additionally, to enact a B&O tax, there are
significant overhead costs associated with its administration. How much could be gained needs to be
fully examined. Additionally, if the economy wanes, will it place the city in a difficult position regarding
the retention and attraction of business and industry? It is recommended that the City Council should
consider further examination and discussion.
4
UNLIKELY TO PRODUCE ADDITIONAL REVENUE
Air B&B
There are a variety of companies like Air B&B that offer accommodations. Similar companies with
similar business models include VRBO and HomeAway that focus on vacation or second-home rentals.
However, there are now many more in the marketplace from HomToGo, Flip Key, HouseTrip, Tripping
and VayStays.
The ability to track these single residential rentals would take significant staff time as they go on and off
the market. Additionally, the city's current policy related to Lodging Taxes impacts facilities in excess of
40 units. Immediate revenue may be only from business registrations. A single vacation rental would
not provide significant revenue.
Increase Business Registration Fees
Given that the City is in the process of converting to the state system, the cost for business registration
is already increasing, albeit small due to the administrative handling by the state. It is recommended
that ongoing review be undertaken to ensure Federal Way is comparable to the registration fees
charged by other South King and Puget Sound cities.
Rental Inspections
An idea to ensure landlords are caring for their properties has been the concept of charging property
owners for inspections of residential rental properties. By design, this is a nuisance enforcement issue.
Further examination is needed to determine if a reasonable fee covers the cost of such implementation.
The dilemma with such a fee is it gets passed on to the consumer. From a policy perspective enactment
could hurt the low income population of Federal Way. Nonetheless, the fee covers the cost of the
inspection not to enhance the General Fund.
Bring in More Retail
This item is the flip side to the previously identified item "Increase Sales Tax Rate." This idea is to
increase the volume of taxable items. As previously identified, a retail sector that is showing significant
growth in Federal Way is the category of Non-Retail stores. A Non-Retail store for example is Amazon.
Here customers buy items on the Internet and the City receives sales tax based upon destination-based
sales tax.
Destination-based sales tax means that if a retailer delivers or ships merchandise to a buyer in
Washington, the sales tax that is collected is based on the rate at the location where the buyer receives
or takes possession of the merchandise. This only affects shipments and deliveries to locations within
Washington State.
The Non-Retail Stores sector has seen a threefold increase in taxable sales in ten years in Federal Way,
see Attachment, Federal Way, Comparison of Total Taxable Sales, 2007 & 2017. This is substantial
growth albeit small in comparison to other sectors; however, it is seeing significant growth specifically in
the last five years 2012 to 2017. This corresponds to the Americans increasingly shopping on line. The
average U.S. household spent$5,200 on line in 2018.This is up 50 percent from five years earlier.
5
Economic development is working to bring more retail business into Federal Way. The key is more
construction of building space as there is currently a 5 percent vacancy factor (excluding the former
Sear's site). The opportunity is certainly worth pursuing to enhance the city's tax base.
Sports Performance Industry
The ability to embark on recruitment of specific targeted industries as it pertains to revenue generation
can present long term opportunities. As it pertains to current needs of revenue generation, it takes
significant time to manifest itself even with existing targeted industries.
In 2015, Economic Development identified through a Location Quotient Analysis, key targeted industries
for business attraction. The key opportunities included the following sectors based upon history of
employment and business growth and future comparative advantages including skilled labor force,
facilities and infrastructure, availability and access to capital.
• Business & Professional Services
• Information, Communication and Technology
• Healthcare and Medical Tech
• Entrepreneurialism
• Arts &Tourism
• International Trade and Investment
The attraction and growth of businesses in these categories takes significant time. Major employers in
anyone of these categories can take four to five years before impacts are felt on the Federal Way
economy.
Sponsorships and Grant Programming
In the City Council's search for new or more revenue, sponsorships were identified as a method for
generating new revenue. Before examining the potential for revenue, the Council should examine what
should be considered in evaluating a sponsorship program. Such evaluation might include the following:
• Impact on City Mission
• Revenue Potential
• Impact on Staff
One city to study is the City of San Diego. They have been very successful in sponsorships of city
programs, projects and services along with selling advertising on city facilities.
Sell Advertising on City Property
Similar to the issue of sponsorship, city staff has historically examined this opportunity. There has been
discussion about advertising under city code at the ball fields at Celebration Park. Again, key questions
need to be addressed as identified above and as it pertains to city codes.
Fines; Parking/Traffic Tickets, Code Compliance
Given that Federal Way does not have a parking garage or metered on street parking, there are little
options for increasing revenue. Both the Police Department and Community Development can provide
insight as it pertains to the ability to increase fines on traffic violations and code compliance issues.
6
More/Better Marketing of City Facilities
It takes money to make money. However, in conversations with local hoteliers, they are always
examining our fees on our facility rentals as a part of their review for their facilities adjusting rates to the
marketplace.
It appears that our facilities are being used and seldom sitting vacant. Specifically, recent examinations
have taken place on Dumas Bay Center and the Performing Arts and Events Center illustrating
opportunities; therefore we appear to be current in pricing.
Other
Additionally, the "fiscalization" of land use, the use of land use planning and development to encourage
revenue production as a first-order goal became important in the United States during the anti-tax
environment of the 1980s. The concept holds that local governments are more likely to favor
development projects and zoning decisions that generate sales tax or increase other revenues than
those that do not. Given that Federal Way is built-out, the only other option is to increase density of
commercial properties through redevelopment to enhance increased revenue.
FINANCIAL IMPLICATIONS:
The next step should be the calculation of potential revenue in order to understand the impact of the
ideas generated as part of the brainstorm.
POLICY IMPLICATIONS:
There are variety of revenue generating ideas that require further analysis such as a Levy LID Lift and a
transportation benefit district and marijuana store revenue. Council should explore options and
directions to understand potential revenues, costs, and other policy implications.
7
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FEDERAL WAY
Comparison of Taxable Retail Sales
2007 to 2017
NAICS Category 2007 2017
Furniture and Home Furnishings Stores $11,994,541 $26,852,055
Building Material and Garden Equipment and Supplies Dealers $82,364,672 $97,504,006
Health and Personal Care Stores $ 21,471,050 $36,866,082
Clothing and Clothing Accessories Stores $46,558,777 $45,444,082
Sporting Goods, Hobby, Book, and Music Stores $40,136,300 $43,334,750
General Merchandise $286,907,479 $279,880,048
Accommodation $18,251,975 $30,265,372
Arts, Entertainment, and Recreation $14,998,826 $35,827,560
Restaurants, Food Service and Drinking Places $146,723,155 $213,036,010
Food and Beverage Stores $57,588,017 $54,109,159
Electronics and Appliance Stores $59,343,104 $55,567,776
Miscellaneous Store Retailers $80,596,080 $51,555,658
Nonstore Retailers $10,842,011 $37,625,889
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STAFF REPORT
DATE: April 12, 2019
TO: FEDRAC
FROM: Tim Johnson, Economic Development
SUBJECT: Update, Formulation of Tourism Promotion Area
RECOMMENDATION:
Accept and File
BACKGROUND:
Local area hoteliers requested and have petitioned for the creation of a Tourism Promotion Area under
state legislation.
The petition and subsequent program implementation was presented by Economic Development before
a City Council Budget Hearings in October 2018.
Since then, City Economic Development has initiated a draft Staff Report with review and input support
from Finance, Personnel and City Attorney's Office.
DISCUSSION:
The Staff Report (draft version attached)will be presented in June to the Lodging Tax Advisory
Committee, (LTAC)for review and approval. It will then proceed on to FEDRAC in June (potentially) for
review and approval. It then can be moved to the City Council Agenda in July or August.
FINANCIAL IMPLICATIONS:
The formulation of a Tourism Promotion Area provides hoteliers the opportunity to assess themselves to
raise funds 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.
Preliminary estimates identify that $400,000 to $500,000 can be raised annually to hire staff to perform
this activity.
POLICY IMPLICATIONS:
Local hoteliers have petitioned the City under state legislation to implement this activity
CERTIFICATION OF ENROLLMENT
ENGROSSED SUBSTITUTE SENATE BILL 6026
Chapter 148, Laws of 2003
58th Legislature
2003 Regular Session
TOURISM PROMOTION AREAS
EFFECTIVE DATE: 7/27/03
Passed by the Senate April 27, 2003 CERTIFICATE
YEAS 42 NAYS 6
I, Milton H. Doumit, Jr. ,
Secretary of the Senate of the
BRAD OWEN State of Washington, do hereby
certify that the attached is
President of the Senate ENGROSSED SUBSTITUTE SENATE BILL
6026 as passed by the Senate and
Passed by the House April 27, 2003
YEAS 74 NAYS 24 the House of Representatives on
the dates hereon set forth.
FRANK CHOPP MILTON H. DOUMIT JR.
Speaker of the House of Representatives Secretary
Approved May 8, 2003. FILED
May 8, 2003 - 1:35 p.m.
GARY F. LOCKE Secretary of State
Governor of the State of Washington State of Washington
ENGROSSED SUBSTITUTE SENATE BILL 6026
AS AMENDED BY THE HOUSE
Passed Legislature - 2003 Regular Session
State of Washington 58th Legislature 2003 Regular Session
By Senate Committee on Ways & Means (originally sponsored by Senator
West)
READ FIRST TIME 03/10/03 .
1 AN ACT Relating to authorizing special assessments to fund
2 convention and tourism promotion; reenacting and amending RCW
3 43 . 79A. 040; and adding a new chapter to Title 35 RCW.
4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
5 NEW SECTION. Sec. 1 . Unless the context clearly requires
6 otherwise, the definitions in this section apply throughout this
7 chapter.
8 (1) "Area" means a tourism promotion area.
9 (2) "Legislative authority" means the legislative authority of any
10 county with a population greater than forty thousand but less than one
11 million, or of any city or town within such a county, including
12 unclassified cities or towns operating under special charters .
13 (3) "Lodging business" means a person that furnishes lodging
14 taxable by the state under chapter 82 . 08 RCW that has forty or more
15 lodging units .
16 (4) "Tourism promotion" means activities and expenditures designed
17 to increase tourism and convention business, including but not limited
18 to advertising, publicizing, or otherwise distributing information for
P. 1 ESSB 6026 . SL
1 the purpose of attracting and welcoming tourists, and operating tourism
2 destination marketing organizations .
3 NEW SECTION. Sec. 2 . For the purpose of establishing a tourism
4 promotion area, an initiation petition must be presented to the
5 legislative authority having jurisdiction of the area in which the
6 proposed tourism promotion area is to be located. The initiation
7 petition must include the following:
8 (1) A description of the boundaries of the proposed area;
9 (2) The proposed uses and projects to which the proposed revenue
10 from the charge shall be put and the total estimated costs;
11 (3) The estimated rate for the charge with a proposed breakdown by
12 class of lodging business if such classification is to be used; and
13 (4) The signatures of the persons who operate lodging businesses in
14 the proposed area who would pay sixty percent or more of the proposed
15 charges .
16 NEW SECTION. Sec. 3. A legislative authority shall, after
17 receiving a valid initiation petition under section 2 of this act,
18 adopt a resolution of intention to establish an area. The resolution
19 must state :
20 (1) The time and place of a hearing to be held by the legislative
21 authority to consider the establishment of an area;
22 (2) A description of boundaries in the proposed area;
23 (3) The proposed area uses and projects to which the proposed
24 revenues from the charge shall be dedicated and the total estimated
25 cost of projects; and
26 (4) The estimated rate or rates of the charge with a proposed
27 breakdown of classifications as described in section 5 of this act.
28 NEW SECTION. Sec. 4 . (1) Except as provided in subsection (2) of
29 this section, no legislative authority may establish a tourism
30 promotion area that includes within the boundaries of the area:
31 (a) Any portion of an incorporated city or town, if the legislative
32 authority is that of the county; and
33 (b) Any portion of the county outside of an incorporated city or
34 town, if the legislative authority is that of the city or town.
ESSB 6026 . SL p. 2
1 (2) By interlocal agreement adopted pursuant to chapter 39 . 34 RCW,
2 a county, city, or town may establish a tourism promotion area that
3 includes within the boundaries of the area portions of its own
4 jurisdiction and another jurisdiction, if the other jurisdiction is
5 party to the agreement.
6 NEW SECTION. Sec. 5. A legislative authority may impose a charge
7 on the furnishing of lodging by a lodging business located in the area.
8 (1) There shall not be more than six classifications upon which a
9 charge can be imposed.
10 (2) Classifications can be based upon the number of rooms, room
11 revenue, or location within the area.
12 (3) Each classification may have its own rate, which shall be
13 expressed in terms of nights of stay.
14 (4) In no case may the rate under this section be in excess of two
15 dollars per night of stay.
16 NEW SECTION. Sec. 6. Notice of a hearing held under section 3 of
17 this act shall be given by:
18 (1) One publication of the resolution of intention in a newspaper
19 of general circulation in the city or county in which the area is to be
20 established; and
21 (2) Mailing a complete copy of the resolution of intention to each
22 lodging business in the proposed area.
23 Publication and mailing shall be completed at least ten days prior
24 to the date and time of the hearing.
25 NEW SECTION. Sec. 7 . Whenever a hearing is held under section 3
26 of this act, the legislative authority shall hear all protests and
27 receive evidence for or against the proposed action. The legislative
28 authority may continue the hearing from time to time . Proceedings
29 shall terminate if protest is made by the lodging businesses in the
30 area which would pay a majority of the proposed charges .
31 NEW SECTION. Sec. 8 . Only after an initiation petition has been
32 presented to the legislative authority under section 2 of this act and
33 only after the legislative authority has conducted a hearing under
34 section 3 of this act, may the legislative authority adopt an ordinance
p. 3 ESSB 6026 . SL
1 to establish an area. If the legislative authority adopts an ordinance
2 to establish an area, the ordinance shall contain the following
3 information:
4 (1) The number, date, and title of the resolution of intention
5 pursuant to which it was adopted;
6 (2) The time and place the hearing was held concerning the
7 formation of the area;
8 (3) The description of the boundaries of the area;
9 (4) The initial or additional rate of charges to be imposed with a
10 breakdown by classification, if such classification is used;
11 (5) A statement that an area has been established; and
12 (6) The uses to which the charge revenue shall be put. Uses shall
13 conform to the uses declared in the initiation petition under section
14 2 of this act.
15 NEW SECTION. Sec. 9. (1) The charge authorized by this chapter
16 shall be administered by the department of revenue and shall be
17 collected by lodging businesses from those persons who are taxable by
18 the state under chapter 82 . 08 RCW. Chapter 82 . 32 RCW applies to the
19 charge imposed under this chapter.
20 (2) At least seventy-five days prior to the effective date of the
21 resolution or ordinance imposing the charge, the legislative authority
22 shall contract for the administration and collection by the department
23 of revenue .
24 (3) The charges authorized by this chapter that are collected by
25 the department of revenue shall be deposited by the department in the
26 local tourism promotion account created in section 10 of this act.
27 NEW SECTION. Sec. 10 . The local tourism promotion account is
28 created in the custody of the state treasurer. All receipts from the
29 charges for tourism promotion must be deposited into this account.
30 Expenditures from the account may only be used for tourism promotion.
31 The state treasurer shall distribute the money in the account on a
32 monthly basis to the legislative authority on whose behalf the money
33 was collected.
34 NEW SECTION. Sec. 11 . The charges imposed under this chapter are
ESSB 6026 . SL p. 4
1 in addition to the special assessments that may be levied under chapter
2 35 . 87A RCW.
3 NEW SECTION. Sec. 12 . The charges imposed under this chapter are
4 not a tax on the "sale of lodging" for the purposes of RCW 82 . 14 . 410 .
5 NEW SECTION. Sec. 13. (1) The legislative authority imposing the
6 charge shall have sole discretion as to how the revenue derived from
7 the charge is to be used to promote tourism. However, the legislative
8 authority may appoint existing advisory boards or commissions to make
9 recommendations as to its use, or the legislative authority may create
10 a new advisory board or commission for the purpose .
11 (2) The legislative authority may contract with tourism destination
12 marketing organizations or other similar organizations to administer
13 the operation of the area, so long as the administration complies with
14 all applicable provisions of law, including this chapter, and with all
15 county, city, or town resolutions and ordinances, and with all
16 regulations lawfully imposed by the state auditor or other state
17 agencies .
18 NEW SECTION. Sec. 14 . The legislative authority may disestablish
19 an area by ordinance after a hearing before the legislative authority.
20 The legislative authority shall adopt a resolution of intention to
21 disestablish the area at least fifteen days prior to the hearing
22 required by this section. The resolution shall give the time and place
23 of the hearing.
24 Sec. 15. RCW 43 . 79A. 040 and 2002 c 322 s 5, 2002 c 204 s 7, and
25 2002 c 61 s 6 are each reenacted and amended to read as follows :
26 (1) Money in the treasurer ' s trust fund may be deposited, invested,
27 and reinvested by the state treasurer in accordance with RCW 43 . 84 . 080
28 in the same manner and to the same extent as if the money were in the
29 state treasury.
30 (2) All income received from investment of the treasurer ' s trust
31 fund shall be set aside in an account in the treasury trust fund to be
32 known as the investment income account.
33 (3) The investment income account may be utilized for the payment
34 of purchased banking services on behalf of treasurer ' s trust funds
p. 5 ESSB 6026 . SL
1 including, but not limited to, depository, safekeeping, and
2 disbursement functions for the state treasurer or affected state
3 agencies . The investment income account is subject in all respects to
4 chapter 43 . 88 RCW, but no appropriation is required for payments to
5 financial institutions . Payments shall occur prior to distribution of
6 earnings set forth in subsection (4) of this section.
7 (4) (a) Monthly, the state treasurer shall distribute the earnings
8 credited to the investment income account to the state general fund
9 except under (b) and (c) of this subsection.
10 (b) The following accounts and funds shall receive their
11 proportionate share of earnings based upon each account ' s or fund' s
12 average daily balance for the period: The Washington promise
13 scholarship account, the college savings program account, the
14 Washington advanced college tuition payment program account, the
15 agricultural local fund, the American Indian scholarship endowment
16 fund, the basic health plan self-insurance reserve account, the
17 Washington state combined fund drive account, the Washington
18 international exchange scholarship endowment fund, the developmental
19 disabilities endowment trust fund, the energy account, the fair fund,
20 the fruit and vegetable inspection account, the game farm alternative
21 account, the grain inspection revolving fund, the juvenile
22 accountability incentive account, the local tourism promotion account,
23 the rural rehabilitation account, the stadium and exhibition center
24 account, the youth athletic facility account, the self-insurance
25 revolving fund, the sulfur dioxide abatement account, and the
26 children ' s trust fund. However, the earnings to be distributed shall
27 first be reduced by the allocation to the state treasurer ' s service
28 fund pursuant to RCW 43 . 08 . 190 .
29 (c) The following accounts and funds shall receive eighty percent
30 of their proportionate share of earnings based upon each account ' s or
31 fund' s average daily balance for the period: The advanced right of way
32 revolving fund, the advanced environmental mitigation revolving
33 account, the city and county advance right-of-way revolving fund, the
34 federal narcotics asset forfeitures account, the high occupancy vehicle
35 account, the local rail service assistance account, and the
36 miscellaneous transportation programs account.
37 (5) In conformance with Article II, section 37 of the state
ESSB 6026 . SL p. 6
1 Constitution, no trust accounts or funds shall be allocated earnings
2 without the specific affirmative directive of this section.
3 NEW SECTION. Sec. 16. Sections 1 through 14 of this act
4 constitute a new chapter in Title 35 RCW.
Passed by the Senate April 27, 2003 .
Passed by the House April 27, 2003 .
Approved by the Governor May 8, 2003 .
Filed in Office of Secretary of State May 8, 2003 .
p. 7 ESSB 6026 . SL
CERTIFICATION OF ENROLLMENT
HOUSE BILL 1279
Chapter 131, Laws of 2015
64th Legislature
2015 Regular Session
TOURISM PROMOTION AREAS
EFFECTIVE DATE: 7/24/2015
Passed by the House March 5, 2015 CERTIFICATE
Yeas 73 Nays 25
I, Barbara Baker, Chief Clerk of
the House of Representatives of the
FRANK CHOPP State of Washington, do hereby
Speaker of the House of Representatives certify that the attached is HOUSE
BILL 1279 as passed by House of
Representatives and the Senate on
Passed by the Senate April 15, 2015 the dates hereon set forth.
Yeas 46 Nays 3
BARBARA BAKER
BRAD OWEN Chief Clerk
President of the Senate
Approved April 29, 2015 1:37 PM FILED
April 29, 2015
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
HOUSE BILL 1279
Passed Legislature - 2015 Regular Session
State of Washington 64th Legislature 2015 Regular Session
By Representatives Kochmar and Gregory
Read first time 01/16/15 . Referred to Committee on Community
Development, Housing & Tribal Affairs .
1 AN ACT Relating to local tourism promotion areas; and amending
2 RCW 35 . 101 . 010 .
3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
4 Sec. 1 . RCW 35 . 101 . 010 and 2009 c 442 s 1 are each amended to
5 read as follows :
6 Unless the context clearly requires otherwise, the definitions in
7 this section apply throughout this chapter.
8 (1) "Area" means a tourism promotion area.
9 (2) (a) Except as otherwise provided in this subsection,
10 "legislative authority" means the legislative authority of any county
11 with a population greater than forty thousand, or of any city or town
12 within such a county, including unclassified cities or towns
13 operating under special charters . ( (Hemmer, ) )
14 (b) Except as provided in (c) of this subsection, in any county
15 with a population of one million or more, ( (ire) ) "legislative
16 authority" ( (shall e ems=Te_f) ) means two or more jurisdictions
17 acting jointly as the legislative authority under an interlocal
18 agreement created under chapter 39 . 34 RCW for the joint establishment
19 and operation of a tourism promotion area.
20 (c) For a city incorporated after January 1990, with a population
21 greater than eighty-nine thousand, and located in a county described
P. 1 HB 1279 . SL
1 in (b) of this subsection, "legislative authority" means the city' s
2 lecrislative authority.
3 (3) "Lodging business" means a person that furnishes lodging
4 taxable by the state under chapter 82 . 08 RCW that has forty or more
5 lodging units .
6 (4) "Tourism promotion" means activities and expenditures
7 designed to increase tourism and convention business, including but
8 not limited to advertising, publicizing, or otherwise distributing
9 information for the purpose of attracting and welcoming tourists, and
10 operating tourism destination marketing organizations .
Passed by the House March 5, 2015 .
Passed by the Senate April 15, 2015 .
Approved by the Governor April 29, 2015 .
Filed in Office of Secretary of State April 29, 2015 .
--- END ---
p. 2 HB 1279 . SL
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STAFF REPORT
DATE: April 12, 2019
TO: FEDRAC
FROM: Tim Johnson, Economic Development
SUBJECT: Update, Large Tourism Events in Federal Way in 2019
RECOMMENDATION:
Accept and File
BACKGROUND:
The City of Federal Way will be host to two large tourism events:
• Korean American National Sports Festival, Friday,June 21 through Sunday,June 23.
• The Speedo Winter National Swimming Championships Tuesday, December 10 through
Saturday, December 14th
DISCUSSION:
Last held in here in 1997, the Korean American National Sports Festival will be once again held in the
Puget Sound. Federal Way will be host to the opening and closing ceremonies at Memorial Field. Also
as of this Staff Report, the following events will be held in Federal Way, however, they may be subject to
change.
Softball - Celebration Park
Soccer- Celebration Park
Ssireum -Saghalie Middle School
Taekwondo - Dacatur High School
Track& Field—Memorial Stadium
10k Run - Federal Way(Possibly BPA Trail)
Volleyball— Federal Way(Beamer High School)
Estimating 3,500 to 5,000 people includes participants (athletes),judges, officials and spectators.
No admission charge to watch events. At this point, no schedule has been released related to events.
See ATTACHMENT A, 2019 Korean American National Sports Festival
NOTE: For further information see website http://www.kasa-wa.org/
The Speedo Winter Junior Nationals-West swimming competition will be held at the King County Aquatic
Center beginning Tuesday, December 10 through Saturday, December 14. Over 1,000 swimmers will
compete for national titles. This is one of two events held simultaneously in the nation for young
swimmers. Swimmers living west of the Mississippi River will compete here, while others east of the
river go to another venue to compete.This event was last held in Federal Way in 2014.
There is an admissions charge. No information as of to date on cost. See ATTACHMENT B, background
information on event.
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The Korean American Sports National festival is aimed to elicit their
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The Korean American Sports National Festival is meant not only to educate physically as a simple
sports event but also increase the population of Korean players and pride of being a Korean.
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u harmony and unity among Korean Americans. Also by getting together with excellent players
" p and their leaders across the United States, the Korean American Sports National Festival leads to the
increase of the Korean American Sports population and informs Korean physical strength
and wisdon to the world.
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About KANSF
The Korean American Sports Festival is to unite together among Korean
-Americans,ensure mutual cooperation,enhance pride as a Korean,and
contribute to community development and communication between
communities.
Starting LA in 1981,the Korean American Sports Festival with a history of 35 years has been
the largest sports festival in United States. It is a general sports competition across the
nations held every two years The Korean American Sports festival is aimed to elicit their national
unity through the remarkable achievements as a result of their sweat and efforts.
The Korean American Sports Festival is meant not only to educate physically as a simple sports event
but also increase the population of Korean players and pride of being a Korean. By cheering for the
players across the nations thq Korean American Sport festival seeks harmony and unity among Korean
Americans. Also by getting together with excellent players and their leaders across the United States, the
Korean American Sports Festival leads to the increase of the Korean American Sports population and informs
wv Korean physical strength and wisdom to the world.
The Korean American Sports Festival is to discover gifted children in sports and expand the wayfor their entry into
the world stage The festival provides a strong foundation where the new generation of Korean players with excellent
skill is able to learn and win successfully on the world stage.
Our Objective 7�- - 171
The Korean American Sports National Festival in TIO-1:4-2-FERHM.7H--R&.I2_�_!AAi old°I oAJ2F
Seattle is to develop athletic cohesion by connecting o��z �°�z�foI `iolT�F°�xil�cNslz o�H xil °�°I
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2The Korean American Sports National Festival in
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The Korean American Sports National Festival in
Seattle is to unify among Korean communities,
encourage our culture and pride on being a Korean
to our Korean generations and adoptees, and develop
a framework for frequent communications with U.S
society, which enhances Korean American's Prestige
and its images in United States.
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Seattle • ` —CC o`fo1?-:1111-1-01 S-10�1-�JT.—
41Xl-11--Xlzol t-IX121011
10th
Las Angeles ail 1`of`i�'�II�H_f°i�°I o!°I�Fxi1-4
11th
Houston olT� if�il� z�sf�Ho1�
12th \ AiI;qI- H01 ;E-112;°!`112 zoite
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13th /J �1Tz o 1,Ail/Il TIH01l kl TT�f of�i a'1i z T
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San Francisco
.15th
Chicago
16th
Orange County f
17th
Kansas
18th
Washington DC
19th
Dallas
20th
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T '' v o� �H [Main Venues)
7H'IF lll (Opening Ceremony) Memorial Stadium, Federal Way High School
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1300 S 308th St, Federal Way, WA 98003
Celebration Park
Valley Ridgefield Park, Seatac City
Riverside High School, Auburn
Meadow Park Golf Course, Tacoma
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Duration / IHM ) l
June 21(Fri) - 23(Sun) 2019
Opening Ceremony / )HEI"It � I
June 21(Fri) 2019
Federal Way Memorial Field
1300 S 308th St, Federal Way, WA 98003
Event / m c;;'
Badminton / dHol`i Shooting / �F��
Baseball / OP Basketball / C:>
Softball / �L-E z Swimming / Toy
Soccer Table Tennis / EKL
Bowling Taekwondo / EH-2N �-:
Golf / z u Tennis / EilLl
Kum do - Track & Field / -'oF
Jok gu Volleyball / HH-7
Ssireum / AAI o Ice hockey / oFol_0F;7l
Wrestling Fencing / 1,H of
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PC —
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IN 201 oi
0 'it.17 Li-A, °I oF2f°� 3,035
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--I1%rsI 150
0�x1d�T150
Tfjprj CD 1000
o�7lo�`f 100
CD f LF loo
4535 [ T )
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Tl o�LI T(Washington State) �� °ll °��1 a} �l °ll (Seattle)° �1 ���T°� 101�l
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Cascade Range) �� 7l Tr (Puget Sound)°] 11 i-31 -71(Elliott Bay) 611 °l-N t}
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Sky View Observatory Washington State Ferries Alki Beach The Museum of Flight
089T, 01-91 VL
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Expenlse Estimate
_ 1•.. �� 2,250,000
2 900,000
3. AU[ 270,000 .,
4. 0471 of Afo�(227H off) 25,000
7C 7C I o o�= o p�
5. TI �sI To I 15,000
--
6. �1T o �H 0 20,000
7. C> (-H7Cf, Ei, °i"o[2) 55,000
Y
s. Li- To (dim CH 01) 10,000
9. lckm'`FHI (0120 0) 25,000
10 o cJo a (3 0, 67H E) 36,000
_- ...........
11. c,oj 5,000
12. LHEA -7111 °I Eidl 5,000
13. E-'T--ul, Oil z (30007H) 30,000
14. olF-lal oFoFz, o JHI 10,000
15. o d°I� o _ 3,000
16. 0�71 (4, oFdl � z;�ldl 10,000
17.7H°F��, TSftl�,l, T°F, o o, �I�lal 601000
18. 1 o� �H 7Cf QI�I 5,000
19• o�T 10,000
20. L1T of 10 30,000
21. 01Idldl 30,000
The Speed Winter Junior Nationals — West
USA Swimming Olympic Trials Qualifying Event
December 10-14, 2019
King County Aquatic Center
Anticipated Daily Attendance Attendee Demographics
2,100 1,000 Athletes age 13-18
150 Coaches
900 to 1100 Spectators a day
EVENT OVERVIEW
More than 1,000 of the nation's top up-and-coming swimmers will compete for national titles in
December at USA Swimming's 2019 Winter Junior National Championships in Federal Way, Washington,
at the King County Aquatic Center.
VENUE OVERVIEW
King County Aquatics Center is an aquatic facility in Federal Way, Washington. It was constructed for
the 1990 Goodwill Games. It has hosted US Olympic Diving Team Trials in 2000 and 2012. It has also
hosted the NCAA Division I Championships in 2012. It is the annual host to the, PAC-12 Men's and
Women's Swimming and Diving Championships, and the Northwest Conference Division III Men's and
Women's Swimming Championships. Additionally, it has held the USA Swimming Winter National
and US Junior National Championships. The Center will be the home of the 2021 NCAA Division III Men's
and Women's Swimming Championships. Over 200 world records have been set at the Center.
EVENT HISTORY
This event has been held previously at the King County Aquatic Center in 2014.
ROOM FLOW
Day/Date Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Total
580 1,055 1,055 1,055 1,055 4,800
VOLUNTEER HOURS
The estimated value of the volunteer time that will be spent for the meet is forecasted at 1500 hours.
The nationally recognized organization, the Independent Sector, which identifies the value of an hour of
volunteer time, illustrates that for 2019, an hour of volunteer time at$24.69 which yields$37,035.
CONTACT INFORMATION:
City of Federal Way
Lodging Tax Advisory Committee
Tim Johnson
253-835-2412