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Most overnight visitors to Springfield have paid a lodging tax in hotels, motels and tourist courts ever since a 2% occupancy tax was approved by voters in 1979.
With two increases, approved in 1998 and 2004, the tax rate is now 5%, but visitors opting for stays in short-term rentals, like Airbnb and Vrbo, have been exempt.
Voters in Springfield will face a trio of ballot questions from the city in the April 4 election, and their approval of Question 3 would apply the 5% tax to all lodging, including short-term rentals.
City Manager Jason Gage said the revenue would be used to promote tourism to the city.
“Our best estimate to date suggests that application of the hotel sales tax to short-term rentals would result in approximately $365,000 the first year,” Gage said.
Tracy Kimberlin, who retired in 2022 as president of the Springfield Convention & Visitors Bureau Inc., told Springfield City Council that the city has around 400 short-term rentals with the capacity of 1,000 hotel rooms. He said they are legitimate and necessary accommodations that the city needs.
The existing 5% lodging tax brings in about $6.5 million a year, according to David Holtmann, Springfield’s finance director, in a report to council. He added that half of that, 2.5%, will roll off in June 2028 when debt on Jordan Valley Park projects is retired. If voters were to approve Question 3, the 5% lodging tax will become permanent and would be freed up for new uses.
The tax would increase funding to support the arts and cultural tourism, Gage said, noting the Springfield Regional Arts Council Inc. currently leads these efforts. The ballot measure specifies that 4.5% of the tax proceeds be used to support arts and culture.
Another 4.5% would be used to attract and host sporting events, an effort currently led by the Springfield Sports Commission, Gage said.
The measure calls for 47% of tax funds to be used to promote travel and tourism to the city. The balance of the generated funds would pay debt service for existing bonds purchased under the prior hotel tax, including previous improvements along the Jordan Valley Park corridor.
“When those bonds are paid in full, that portion of the new tax can be used to fund tourism-related capital improvement projects and facilities,” Gage said.
The city is not actively considering any new projects to be funded by bonds through future hotel tax revenue, Gage said.
“With that in mind, we continually collaborate and plan with other community entities that help us support tourism and the economic impact it provides to our community,” he said.
The council vote to put the measure on the ballot met with no opposition.
Voters will also be asked to approve Question 2, which would amend the city charter as it relates to competitive bidding.
The proposed change would authorize an ordinance approving acceptance of a bid and entry into contract with a successful bidder to be passed at the same City Council meeting in which it is introduced. This would skirt the current two-reading process required for passage of such measures.
Gage said the proposed change would allow, but not require, City Council to accept a competitive bid and award contracts on the first reading, rather than waiting two weeks for a second reading at the following council meeting.
“If used, this change would reduce the time to enter into competitively bid construction and other contracts,” Gage said.
He clarified that the approach would affect only the awarding of the bid and not any other aspect of the competitive bidding process.
“If questions or concerns regarding any competitive project bid should occur, the city could choose to take action on the second reading of the bill,” he said.
An advantage of the change would be a stepped-up timeline for projects in the city. One local developer, Curtis Jared, told Springfield Business Journal in a January interview that speeding up some processes is essential for the city to remain a desirable place for new projects.
“We’re not a small city anymore. We’re a large city, and we need some efficiencies,” Jared said. “We’ve got to try to streamline things.”
Springfield’s charter requires an opportunity for competitive bidding before the city makes any purchase or contract. Typically, the city accepts the bid that is deemed the lowest and best.
To make any change to the city’s charter requires action by voters.
Some of the changes proposed in Question 1 clean up the charter language, for instance, by replacing the word “personnel” with the phrase “human resources.” The updated phrasing would match the present name of the city’s Department of Human Resources, Gage said.
The ballot measure would also allow the city manager to delegate authority to remove nonregular types of employees to the HR director. This would typically apply to temporary and seasonal employees, rather than full-time employees.
Additionally, the change would add certain employees to the list of unclassified service positions.
“This will allow us to employ variable-hour employees that have variable-hour lives,” Gage said. “These include college students and others desiring more flexible schedules.”
More flexibility with employee promotions and rehires would also result from approval of Question 1, Gage said, pointing to the recent rehiring of retired police officers.
The city charter has veterans’ preference language for hiring. At present, preference is given only to honorably discharged veterans who served during time of war or expedition, Gage said.
“The proposed language eliminates the restricted eligibility, allowing preference access to all honorably discharged veterans,” he said.
The questions will all appear on the ballot as a result of City Council members voting unanimously to put them before voters.
Downtown flower shop Funky Flaura’s Unique Floral Designs LLC opened; Jordan Valley Community Health Center moved in Republic; and The Jackson Grille got its start in Marshfield.