Gulf Shores approves lodging tax increase with changes

By Melanie LeCroy / melanie@gulfcoastmedia.com
Posted 12/22/21

The Gulf Shores City Council voted unanimously in favor of the 3% lodging tax increase Dec. 13, but the increase will be implemented over a two-year period.City Administrator Steve Griffin told the …

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Gulf Shores approves lodging tax increase with changes

Posted

The Gulf Shores City Council voted unanimously in favor of the 3% lodging tax increase Dec. 13, but the increase will be implemented over a two-year period.


City Administrator Steve Griffin told the council he took the comments, concerns and feedback into consideration when revising his recommendation on the 3% Lodging Tax increase. He recommended the city council consider phasing the increase over a two-year period:

• 2% lodging tax increase effective Sept. 1, 2022, for an overall lodging tax rate of 15%.
• 1% additional tax increase effective Sept. 1, 2023, for an overall lodging tax rate of 16%.


The phased-in approach to the lodging tax increase required Griffin and the department heads to make changes to the proposed 2022 annual budget. Those changes include deferring projects.


"I recommend deferring for one year the Coastal Gateway Community Park. I had scheduled that working with the Parks and Recreation Department to begin construction in 2023-2024. Now that we have acquired the 81-acre tract just south and adjacent and working with the new North to South Road, I think it is prudent we plan that 81-acres together with the 40 acres. Construction would begin 2024-2025," Griffin said.


Another project that will be deferred is the remodel and fortification of the existing Oyster Bay Fire Station. Griffin explained that Scott Fuller with the Gulf Shores International Airport is confident the city could secure a Federal Aviation Administration grant for $2 million to build a fire station at Gulf Shores International Airport.


"I will work with Fire Chief Mark Sealy to look at how that station could be used not only to serve the airport but the vicinity of northeast Gulf Shores where there is so much development that has occurred," Griffin said.


The income generated by the lodging tax increase was budgeted to finance the proposed 10-year Capital Improvements Program.

Griffin told the council that he and the Finance Committee have talked to two potential lenders and received quotes for interest-only payments on new capital debt during the construction phase of the projects. This financing option would lower the annual future debt service payments in 2022-2025 during the phased lodging tax increase.


Several residents that spoke to the council during the many open comment forums asked the city to earmark the new lodging tax funding for transportation and public safety projects. Griffin said he did not recommend the funds be earmarked but did propose staff provide an annual accounting of the new 3% lodging tax revenues collected. The staff did this with the 2018 2% lodging tax increase which shows actual expenditures have been $25,673,654 versus the $11,212,049 of revues received.


"Our goal is to have a balanced, fair, approach and everybody needs to benefit from what we do here and to do that we have to make some tough decisions. I believe we came to an equitable, good decision," Craft said.


The council suspended the rules of procedure so they could consider the lodging tax increase ordinance and voted unanimously in favor to adopt the ordinance.


During the regular council meeting, the council:
•     Passed a resolution authorizing, ratifying and confirming the Airport Authority's acceptance of a $59,000 grant from the Federal Aviation Administration for the Airport Coronavirus Response Grant Program. The money is intended to reimburse operational expenses as a result of the COVID-19 pandemic. The grant is a 100% Federal Aviation Administration funded grant and no matching funds are required.
•     Passed a resolution adopting the 2022 budget for the fiscal year beginning Jan. 1, 2022 and ending Dec. 31, 2022. The budget can be viewed at gulfshoresal.gov.