On “Pillow Tax” and LAVA
In November the voters approved a lodging tax intended to support and develop tourism for Longmont, and there has arisen a controversy about the exact manner in which it is to be spent. There have been some speculations about exact items on which the funds might be spent, and there is an anxiety on the part of LAVA that their research and their work to inform the voters might have a benefit directed elsewhere.
I think all would agree that the “pillow tax” money, like any other tax funds, must be expended in a wholly responsible manner, and ultimately directed by elected officials. The federal acquisition regulations (FAR) lay out some procurement procedures that we can adapt here.
Procurements of different sizes logically operate under different rules – snowplows are harder to buy than staples. In this instance there is the added consideration of a raised public sensitivity to where the funds go, how they get there, and what the accountability is. A general principle is, in my opinion, that no private organization has an inherent and absolute right to tax funds. That said, I would expect LAVA to propose for a contract to do the work, and the association might indeed come to benefit from their civic-oriented efforts. One might even guess that LAVA will turn in a very sound proposal, but if other organizations submit competent proposals, all proposals are to be evaluated on an equal basis.
Here’s the process I suggest, based on the size of the funds, the contention the situation has raised, and the benefit the public expects from the tax. First the City issues a Request for Information, in which the task is described in general terms with the opportunity for interested organizations to influence the detailed form and content of the subsequent request for proposals (RFP). Then the RFP is distributed, including stated performance goals and a schedule for attaining them, demonstrated competence of the organization to carry them out, and other relevant items. Included in the RFP are the criteria against which the proposals will be quantitatively compared and given a grade. Negotiations are conducted with responders who supply proposals that meet the basic criteria, and the contract is made with the organization whose proposal comes out best for the citizens. That’s simple enough, right? In federal practice it’s often lengthier than an eager technologist just wanting to get the job done is happy with, but in the end it’s fair, it’s visible, and it works to the advantage of the taxpayer.
There has been a commotion about exactly what activities the tax may be used to support. Whatever the details of the result end up being, they are governed by the wording the voters approved, since this is clearly not a General Fund kind of tax. The City Attorney has the responsibility to lay out the range of possible performance items that can be included in a contract to use these funds, and to assure that the RFI, RFP, and contract language conforms.
Because of the sensitivity the public has shown to this matter, I would want a “Sunshine” provision to the contract. That is, the contractor would be required to conduct its business in a public manner. Meetings, discussions, decisions would be done only with prior announcement and with full access to the public. That’s how Council operates, it’s how the Boulder County tax-spending committee I sit on operates, and it’s how the public has come to expect its public organizations to operate in general. I don’t know that City contracts ordinarily have such a stipulation, but this is a controversial situation that can only benefit from this openness.
Certainly LAVA worked very hard (and long!) to research the best way to use the lodging tax and subsequently to persuade the voters that this is a worthy venture. I anticipate that LAVA would respond to an RFI so that an RFP and contract that are to the citizens’ benefit can be written. With LAVA’s detailed knowledge of the Longmont situation I would expect them to turn in a good proposal, and I would not be surprised were it to be the successful proposal.
But I do not think that LAVA “owns” the tax money. Only the taxpaying public can make that claim of ownership. The voters decided to impose the tax, and Council’s responsibility is to spend it well.