Hotel tax tabled for now
Published 12:02 am Wednesday, September 16, 2020
UTVs allowed on city streets, if licensed
The Ironton City Council once again debated adding a 3 percent tax on hotel rooms and once again, it was tabled.
On Sept. 10, during their online meeting, the council had a second reading on Ordinance 20-58, which if passed, would put a 3 percent excise tax on all hotels or motels in Ironton. The council had discussed a similar ordinance in November 2018.
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Joining the council online was Mike Holtz, the president of MPH Hotels, which owns the Holiday Inn Express and is building the Town Place Suites by Marriott.
Holtz said there have been some delays on the Marriott hotel project due to COVID-19 affecting the production of windows but those have arrived “so we are moving pretty good and are expecting an early spring opening,” hopefully in March.
Town Place Suites by Marriott is a 108-room facility aimed at the business traveler.
Holtz said he doesn’t think the Ironton tax was a good idea since hotel guests are currently paying 13.25 percent in state and local taxes when they rent a room. He said the tax in Huntington, West Virginia pay 13 percent and tax in Ashland, Kentucky is between 12.5–13.4 percent.
He said occupancies are down nationally about 29 percent because of the pandemic. The Ironton Holiday Inn Express is down about 12 percent and is the number one producer in the area for the past two years.
Holtz said their customers are very educated and shop hotel rates online and it is very easy for them to distinguish between hotels based on price, amenities and location.
“We are in an extremely competitive business in an extremely difficult business right now,” he said, adding that currently, the hotel industry is down 50 percent from one year ago and is worse than after 9/11 and during the Great Depression. He said his 15 hotels are down $7 million from March 2019.
“I would strongly encourage you to vote against this tax increase, as it would cost the community lost jobs and the hotel lost business,” Holtz said.
The Holiday Inn Express has 21 employees and the Town Place Suites by Marriott will have 32.
Holtz said the reason they chose to build in Ironton was because of the strong, working relationship between the government and the company.
“With you, we worked to make Ironton the preferred location for hotel guests coming to the area,” he said.
Councilman Chris Haney asked Holtz if he knew the amount the county government got in hotel tax.
Holtz said the state tax was 5.75, the county was 1.5 and the other six percent is the hotel tax.
One percent of the tax, about $20,000 comes back to Ironton.
Haney said the county is getting 7.5 percent and it wasn’t that the council wanted to increase the tax, but rather they want the city to get its fair share. The city gets 1 percent of the hotel tax from the county.
“When it all started, the county was taking 3 percent. And then it went along and went along and the county took another 3 percent,” Haney said. “All we want to do is get our fair share. The hotel is located in Ironton, it is not located in Proctorville or South Point or anywhere else. It is located specifically in Ironton. It is our police department that is going to respond to anything, not the Lawrence County sheriff, not the state highway patrol. If, Lord forbid, a fire happens, Ironton Fire Department will respond. I think the county is taking too much of a percentage for themselves and leaving nothing left for Ironton.”
Haney said his first inclination was to work with the county commissioners on this but they have been shot down on this matter.
“This is not necessarily to make it hard on you, I’m just fighting for Ironton’s fair share in this,” Haney said, adding he doesn’t think a tax on an Ironton hotel should go anywhere but to Ironton.
Holtz said that to the customer, the tax is just part of the total and they don’t know where it goes.
He said he doesn’t want to see customers go to another hotel because of the price and then the hotel and the governments lose out.
“We are in a very price sensitive business,” Holtz said.
Vice Mayor Craig Harvey said that if the City Council would pass a 3 percent hotel tax, the county would no longer give them the 1 percent.
“So, there would only be a net gain of 2 percent,” he said.
When it came time for the reading of the ordinance, Councilwoman Beth Rist made a motion to table the hotel tax. It was seconded by Bob Cleary.
The council voted four to three to table the ordinance.
Cleary, Rist, Mike Pierce and Nate Kline voted to table it, Harvey, Haney and Jacob Hock voted against tabling it.
The ordinance can be untabled and voted on again at a later time.
Nate Kline asked Mayor Sam Cramblit about Halloween. The mayor replied he is still waiting on guidance before anything is announced.
There was a first and second reading on an ordinance authorizing the redemption of $286,658 of wastewater system improvement bonds.
There will be a finance committee meeting to discuss the matter before a recommendation, favorable or unfavorable, is made.
Finance director John Elam said he recommends to extend it for ten years.
The mayor asked the city to raise the limits for competitive bidding and esimates for purchases and contracts to put the city’s purchasing limit in line with the state government.
The council passed the ordinance.
The council also voted to allow people to use utility terrain vehicles in the city limits, if they are properly inspected and licensed.
Cleary asked if the UTV driver had to have a valid driver’s license.
Harvey said the driver has to have a legal driver’s license and insurance.
Cleary also asked about the loudness of the vehicles.
Harvey said he did some research and many of them are 80 decibels, which exceeds the noise nuisance law. Because of the noise, there is a ban of the vehicles from 10 p.m.-8 a.m.
They will also have to be inspected by the police department and have a state license plate.
The UTVs are legal in Hanging Rock but that doesn’t make them legal in Ironton or any other place.
Rist, said, as a former police officer, she would not vote for it because they are dangerous and that they will cause a lot of trouble for the police department.
Cramblit said that a thing to keep in mind was there are future plans of tying the city’s Gateway Center to the trails in Wayne National Forest and that UTVs would be a part of that. He said if UTVs become an issue in the city, the ordinance could be amended to take care of it.
The city already allows golf carts in the city.
The ordinance passed six to one, with Rist voting against it.
On Sept. 3, the council had a short meeting about authorizing the mayor to enter into an agreement for consulting services with IBI Group. It was approved.