Council considers bed tax changes at January 23 meeting

Members of the Globe City Council: Mayor Al Gameros, Vice Mayor Mike Stapleton (District 4), and Council members Freddy Rios (District 1), Mike Pastor (District 2), Jesse Leetham (District 3), Mariano Gonzalez (District 5), and Fernando Shipley (District 6). All members were in attendance at this meeting except Councilman Rios and Councilman Leetham.

City proposes changes to bed tax system

Council discussed potential changes to the City’s bed tax system, which would cut funding to four of the five bed tax recipients while adding First Fridays to the Bed Tax distribution. 

Currently, Globe’s bed tax supports five organizations that promote tourism and serve visitors in the area:

• The Regional Chamber of Commerce
• the Southern Gila County EDC
• the Gila County Historical Society
• the Cobre Valley Center for the Arts and
• the Downtown Association.

In recent years, Jepson said, the City has been pulling in between $230,000 and $250,000 annually via the bed tax, and this amount gets passed on to the bed tax organizations according to a percentage worked out by the organizations themselves when the Bed Tax was first established in the 1990s.

The split allows the EDC and Chamber to receive 22.5% each, the Downtown Association and CVCA to receive 20% each and the Historical Society to receive 15%. 

The City’s proposal to add First Friday to the mix and split the Bed Tax evenly among the five organizations and plus the City’s event, means each would receive 16 2/3% of the Bed Tax distribution.  The result would be a cut of $13,000 each to the Chamber and EDC, $8000 each to the CVCA and Downtown Association, a $4000 increase to the Historical museum, and an additional $40,000 to the First Friday event.

Jepsen says that since the City started promoting First Friday two years ago, it has become very popular. As a result, during the last budget cycle, Council discussed adding First Friday operations as a sixth recipient of bed tax funds. The current proposal would implement that change.

With the addition of First Fridays as a recipient, the bed tax funds would need to be split six ways. Jepson said the City is proposing splitting the funds equally in the future, which would work out to 16 2/3% for each organization. The change toward an equal split has already been adopted and included in the City’s budget for the current fiscal year. Jepson said.

Jepson said the City spends about $126,000 per year on First Fridays, including providing activities such as rock climbing, ice skating, and a snow bubble.

“It’s a big change. Some of them are going to a little bit less money, but some of them are going to make a little bit more money. But it will all be equal, which I think is a good thing.” Councilman Mike Pastor

According to the City’s projections, the total bed tax amount this year will reach approximately $237,857. With a 16 2/3% split, each organization would receive about $39,600 for the year, depending how actual numbers turn out.

For comparison, on the old system, the Chamber and EDC would each have received $53,000, the CVCA and the Downtown Association would each have received $47,000, and the Historical Society would have received $35,000.

Hence, the new system would have the Chamber and EDC each receiving about $13,000 less per year and the CVCA and Downtown Association each receiving about $7,000 less, while the Historical Society would receive about $4,000 more than under the old system.

The City is also proposing to make distribitions twice a year – spring and fall – instead of the current quarterly distributions. This suggested change is because there have been many issues with organizations not being able to keep up with their requests. The organizations are required to make a formal request for each distribution, and often, organizations have fallen behind on submitting these requests. These delays can wreak havoc on the City’s ability to pass an audit, as the City is required to spend budgeted funds during the fiscal year where they are allocated.

Jepson said the City is also suggesting establishing a new requirement that each organization make a presentation to accompany each request. These presentations would allow the Council an opportunity to stay up to date with the organizations’ activities and how they are spending the bed tax funds.

“It’s important that [the bed tax organizations] understand that we have to get those numbers in, or those presentations and distributions, before our fiscal year is over, and we’ve been kind of lax in that. And that makes it difficult to get a clean audit.” Mayor Al Gameros

Legally, the organizations must spend the funds on activities that advance tourism, and the Council has a duty to ensure this happens.

Currently, the organizations are required to make one presentation per year. The change would increase that to two presentations per year, while reducing the number of requests that each organization has to submit from four per year to two per year.

For the first distribution of the year, the City would need to estimate the numbers for April to June to get everyone on the new schedule.

Jepson said the idea of including First Fridays as a bed tax organization, and changing the split, had already been discussed in May, “so that shouldn’t be a shock to anybody.”

The item was moved to Council’s next meeting for further consideration and possible approval.

Globe receives DOT Safe Streets planning grant

Council voted to receive a US Department of Transportation Safe Streets Grant for the City of Globe “Downtown District” Project that had been awarded in Decmber. The grant is in the amount of $124,846.39 and was sponsored by Senator Mark Kelly. Council also approved spending an additional $31,000 as matching funds, which will come from the excise tax.

The grant is a planning action grant. It will pay for temporary applications, which could include any of the following, in a demonstration corridor for 18 months:

• narrowing the corridor in order to reduce speeds, to help pedestrians
• solar-powered pedestrian beacons
• paint for crosswalk “piano keys”
• signage
• possibly a bike lane
• narrowing the corridor treatments on the side
• curb extensions
• landscaping elements

Connie Callaway explained that the grant has a data collection component. Using the data collected, the City will be able to apply for an implementation grant that would help the City install successful applications throughout the city.

The grant has a Vision Zero component and also has a large public engagement component, which Callaway said will be a first in the area.

Mayor Gameros and Callaway explained that this was a complex grant application. Four people from the City’s grant committee had to attend classes in order to apply for the grant, and they would also need to attend additional classes in order for the City to apply for the implementation grant. One qualification was that there had to have been at least one fatality within the demonstration corridor.

“The mission is to make our streets safer. And it’s a commitment from us.” Mayor Al Gameros

Gameros said this was the first award to the City of a DOT grant in over a decade, and he gave credit to Callaway for doing the brunt of the work.

Callaway pointed out that another city had received a planning grant and later was able to receive a $28 million implementation grant to improve all of their streets.

Motions approved

Council also approved motions for the following:

• Accounts payable in the amount of $694,274.48
• An agreement between the City of Globe, Tri-City Fire District, and the Town of Miami for fire protection services. Chief Gary Robinson said Globe usually provides about 25% to 33% of services needed at fires in Miami, depending on the specific event. Robinson also pointed out that when Miami wishes to obtain fire-related services, such as an arson investigation, it needs to make a request and pay for those services. The agreement includes a fee schedule for services. This item had been discussed at a previous Council meeting. 
• A memorandum of understanding with Tonto Basin Fire District to administer the Gila County online fire learning platform.
• A subscription agreement with C&M Communication LLC for 800 MHz radio service for the Globe Fire Department, for an annual amount not to exceed $10,000. This item also was discussed at Council’s previous meeting. Chief Robinson said the system is currently operational and all public safety entities in the area are operating on it. The equipment was purchased through Homeland Security grant funds.
• Moving forward a grant application to the Attorney General’s Office to be utilized to support the operations of the Copper Hills Family Advocacy Center. Lt. Steve Williams explained that the City has applied for and received this grant for the past two years. It’s a no-match grant and is flexible in terms of what it can be used for. Lt. Williams said the PD usually applies the funds to office expenses, training expenses and upgrades to the Family Advocacy Center. The amount awarded is based on the Center’s needs and, usually, prior victim numbers, so the exact amount is currently uncertain. The application will be brought back at Council’s next meeting for ratification, and if and when the grant is awarded this year, it will come back before Council again for acceptance.
• Adopting the Public Safety Retirement System 457(B) Deferred Compensation Plan. Jepson said this is an item brought forward by ASRS to the legislature with the intention of allowing early payments and easing the burden of PSPRS payments on cities. Councilman Shipley explained that it means funds can be voluntarily taken out of employees’ taxable income now and they will only need to pay the taxes later, when they pull it out of the retirement account. Council discussed this change at a previous meeting.
• Final approval of an agreement with the Arizona Department of Revenue for the administration of State Tax collection and distribution. The item was discussed at a previous Council meeting.

To view this meeting online, visit https://www.youtube.com/watch?v=wz-2huaKlWg.

To view documents related to this meeting, click here. 

Full minutes can be found by going to the City Hall website at https://www.globeaz.gov/government and clicking on Agendas/Minutes in the bottom left-hand corner.

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