HomeMy WebLinkAboutORD2024-014 Bed Tax FAILEDFAILED INTRODUCTION
Sponsored by: Sorensen
Introduction: November 12, 2024
Failed: November 12, 2024
Reconsideration: November 25, 2024
Reconsideration Failed:
November 25, 2024
CITY OF SEWARD, ALASKA
ORDINANCE 2024-014
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, REVISING SEWARD CITY CODE SECTION 5.45.015(A)
HOTEL/MOTEL ROOM TAX — LEVY OF TAX, TO INCREASE THE
HOTEL/MOTEL TAX RATE FROM FOUR PERCENT TO EIGHT
PERCENT EFFECTIVE JANUARY 1, 2025
WHEREAS, initiative Ordinance No. 95-01-INIT was placed before the voters at the
regular election in October 1995 and was approved by a majority of the voters voting on the
question, thereby establishing a 4% hotel/motel room tax, and creating Seward City Code
5.45.015, which provides the authority for the imposition of a hotel/motel room tax; and
WHEREAS, the revised preliminary 2025/2026 operating budget includes a
proposed 4% increase in the hotel/motel room tax, increasing the tax rate from 4% to 8%,
and generating an estimated $694,533 in additional revenues; and
WHEREAS, the City of Seward has one of the lowest bed tax rates of the Alaskan
communities that have a bed tax; and
WHEREAS, the City recognizes the need to diversify revenue in a way that minimizes
the burden on residents and year-round community members; and
WHEREAS, these additional funds would help the visitor industry pay for continued
support of Seward's destination marketing, additional infrastructure in visited areas, and
general services that are used by visitors and residents alike such as public safety.
NOW, THEREFORE, THE CITY OF SEWARD ORDAINS that:
Section 1. The Seward City Code Section 5.45.015(A) is amended as follows:
Strikeout — Delete Bold Underlined — New
A. There is hereby levied a tax on all hotel/motel rent equal to fear eight, percent of the hotel/motel
rent.
Section 2. The effective date of the change to the hotel/motel room tax rate is January
1, 2025.
CITY OF SEWARD, ALASKA
ORDINANCE 2024-014
Page 2 of 2
Section3. This ordinance shall take effect 10 days after its enactment.
ENACTED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA on
this 16th day of December 2024.
THE CITY OF SEWARD, ALASKA
FAILED INTRODUCTION
Sue McClure, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Kris Peck
City Clerk
(City Seal)
1
1
City Council Agenda Statement
Meeting Date: November 12, 2024
To: City Council
Through: Kat Sorensen, City Manager
From: Jason Bickling, Deputy City Manager
Subject: Ordinance 2024-014: Revising Seward City Code Section 5.45.015(A)
Hotel/Motel Room Tax — Levy of Tax, to Increase the Hotel/Motel Tax Rate
from Four Percent to Eight Percent, Effective January 1, 2025
Background and justification:
The hotel/motel room tax, also known as the "bed tax," was initiated by voters in 1995 (Initiative
Ordinance No. 95-01-INIT) by a majority vote. The tax was established at 4% and has not been
increased since the initiative passed. The bed tax is considered a sales tax, and, as a home rule
city, the City of Seward has the authority to amend the tax levy by ordinance.
The bed tax is a fee on the end user. Short term rentals and hotels/motels collect the bed tax from
visitors. They do not pay the bed tax they simply remit it to the city. No extra work is required for
those businesses to implement the change since the system to collect the bed tax is already in
place.
Past collection amounts for the City of Seward are listed below:
2023 - $840,428
2022 - $804,511
2021 - $713,633
2020 - $217,434
2019 - $591,674
2018 - $556,065
For the communities in the state that collect bed tax, Seward has one of the lowest rates. For
comparison, other Alaskan communities that impose a bed tax are listed below:
4% - Seward
6% - Valdez, Wrangel, Nome, Sitka
7.5% - Denali Borough
8% - Houston, Wasilla, Palmer (Mat -Su Borough), Fairbanks, Fairbanks Borough, North
Pole, Skagway, Yakutat
9% - Juneau
10% - Dillingham
12% - Anchorage, Bethel
X
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with (citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
Total amount of funds listed in this legislation: $ 548,638
This legislation (✓):
Creates revenue in the amount of:
Creates expenditure in amount of:
Creates a savings in the amount of:
Has no fiscal impact
Funds are (✓):
X
$ 548,638
Budgeted Line item(s): 4020- Hotel/Motel Room Tax
Not budgeted
Not applicable
Affected Fund (✓):
General
Boat Harbor
Motor Pool
X
Available Fund Balance
SMIC
Parking
Other
Electric
Water
Wastewater
Healthcare
Note: amounts are unaudited
Finance Director Signature:
Attorney Review
X
Yes
Attorney Signature:
Not applicable Comments:
Administration Recommendation
X
Adopt Ordinance
Other: