The recently incorporated Thompson Hotel Association will receive $400,000 from the City of Thompson's accommodation tax revenues for 2017 and 2018 under an agreement approved unanimously by council Jan. 2.
The first payment is payable now that council has approved the agreement. The second instalment for 2017 and the first for 2018 will be payable upon the opening and staffing of an office in Thompson before Aril 30. The final $100,000 is payable on July 1.
In addition to the base funding of $200,000 for 2018, the association, which was incorporated through the Manitoba Companies office Oct. 27, will also receive 75 per cent of any accommodation tax revenues in excess of $500,000 for the year 2017.
Other conditions of the funding include providing semi-annual reports on association projects and reports by event for the number of bed nights and tourists generated by the funding along with any additional sponsorship events received. An annual plan must be presented to council and a council member will serve as liaison to the association's board.
"I realize that there are some people who feel that perhaps we should not be making the $200,000 for 2017," said Coun. Penny Byer. "Our promise to this organization was that if they formed and became a legal entity of hotels we would honour that $200,000 so as far as I'm concerned that part of this resolution is keeping this promise that we have. We have to be good for our word."
Byer also said there are lots of potentially beneficial spinoffs to the city.
"We can't sit still and just exist as a city. We have to try and I think that creating this agreement with the Thompson hotel association is a good effort on our part and a good partnership now that we've created," said Coun. Kathy Valentino. "This clearly shows that we’re trying and we're trying something different and I really hope that this works out and that it will be a success not only for them but for the city of Thompson."
Mayor Dennis Fenske said this agreement, along with the reduction of the business tax and the passing of the tax abatement bylaw, is part of the city's effort to encourage investment at a time when Vale's Manitoba Operations are downsizing.
According to the city's 2017 financial plan, the accommodation tax brought in $461,513.49 in 2016. In 2009, the first year it was in place, revenues were about $527,000. The forecast revenue for the 2017 budget is $500,000.
Council gave second and third reading to a bylaw amendment and first reading to a separate bylaw regarding the accommodation tax at its Jan. 30, 2017 meeting to make it easier to reallocate where those revenues can be directed in the future.
The economic reserve bylaw was amended to include the words "and promoting tourism" in the first and third paragraphs and the words "and tourism" in sections one and two. Council also approved first reading of an amendment to the accommodation tax bylaw to replace the previous wording in section 3.6 with the following: “The tax collected under subsection 3.1 remitted to the tax collector under subsection 5.2 and not refunded under section 6 is to be deposited appropriately into the according funds: the Infrastructure Reserve Fund of the City of Thompson, the Affordable Housing Reserve Fund of the City of Thompson, the Public Safety Initiatives Reserve Fund of the City of Thompson and the Economic Development and Tourism Reserve Fund of the City of Thompson. Council will allocate the percentage of revenues to each fund through resolution on an annual basis for the said year. All deposited funds will be used only in accordance with the terms of each individual fund.”
