Waukon City Council discusses proposed hotel/motel tax

by Dwight Jones

The Waukon City Council met in regular session the evening of Monday, January 17 with a full council in attendance.
Under Regular Business agenda item #1, the City addressed a resolution to place a possible hotel/motel tax on an upcoming election ballot. Dennis and Carn Murphy, who own Kelly’s Place Bed and Bath in southwest Waukon, were in attendance and expressed some serious concerns about how such a tax (up to 7%) added to their current costs could damage their business, which is already slower than they had anticipated it would be. The Murphys also own a similar business in Lansing, which passed a 2% hotel/motel tax late last year.
Based on Iowa State law, 50% of the dollars generated by such taxes go to the City’s General Fund while the other 50% needs to be spent on recreation, tourism, etc. Dennis Murphy gave a very thorough description of the dollars his Waukon property currently generates and how the tax would adversely affect both he and his customers, which are here “100% due to family-related issues”, including family reunions, birthday parties and so on.
Unlike other communities that have a particular draw (i.e. Lansing and the Mississippi River), Murphy explained that though they enjoy Waukon, it doesn’t have that one “hot ticket” item and creating additional expense for his customers will only make their job of keeping the rental occupied more difficult. He continued on, explaining that for a hotel that offers a reasonable nightly rate and due to the fact that most stays are one or two nights, it doesn’t affect things all that much. His business, in contrast, provides a full house, accommodating multiple families and thus the nightly rate is higher, extended stays are common and the tax is going to accumulate quickly, making his property harder to fill.
Councilman Joe Cunningham appreciated Murphy’s presentation but disagreed, stating, “if the City and business owners like you (Murphy) can work together, we can take these dollars generated and help your business, which in the end would be a true win-win”. Cunningham stated that he travels a lot and couldn’t recall ever not paying a similar tax, whether it be in a large city or smaller community. Councilman John Ellingson stated that he felt there should be some sort of compromise, and a motion was made to table the issue until the next meeting. Before then, the Council hopes to be able to have further discussions with the Murphys, Matt Teslow, who owns the Old Bakery Guest House in downtown Waukon, and representatives from the Stoney Creek Inn, if they are available.
Three resolutions were then passed regarding fiscal sponsorships for the Waukon Wellness Center, Waukon Area Fire Protection District and Waukon Park and Recreation for Allamakee County Foundation grant requests.
Members of the Allamakee Snowmobile Club were in attendance to ask the Council for approval of re-routing their current snowmobile trail through town. Chief of Police Clark Bollman was in support of the proposal, with his only request being that individuals trailer their snowmobile to the trailhead. The Council approved the request with a February 1, 2011 effective date.
The Council then set a hearing date of February 7, 2011 (the next regularly scheduled council meeting) to review a tobacco sale violation by Kwik Star. The hearing will only be held if requested by Kwik Star.
The Council then had an extended talk, with much input from Lyle TeKippe of TeKippe Engineering, regarding the proposed replacement of Third Avenue NW. The Council is considering funding the project, at a total cost of approximately $800,000, with Road Use Tax funds and some form of adjoining property owner assessments. The Council will continue to review the project, along with plans to develop a long-term plan to handle similar projects in the future.
City Attorney Jim Garrett then explained the City’s options for imposing a fee to property owners for yard waste disposal, an expense not currently billed. The City spends a considerable amount of money annually to manage the highly used yard waste disposal site, and funds generated by the above-listed fee would help cover those expenses. The Council also discussed a separate fee billed to commercial users (tree trimmers, etc.).  The issue will continue to be discussed at future meetings.
The Council then approved the expense of sending Zoning Administrator Al Lyon to an upcoming surface water informational program in Dubuque.
In the final items on the agenda, the Council approved an internal advance from TIF funding to the Lomen Property Project Fund and the establishment of a Kitchen Krafts Project Fund.
The meeting was then adjourned following just under two hours of discussion.