City discusses hospitality tax and street lights

The city's convention and visitors bureau may not receive as much funding from the city's hospitality tax as they have in past years, depending on how well the city's economy fares.

The city's convention and visitors bureau may not receive as much funding from the city's hospitality tax as they have in past years, depending on how well the city's economy fares.

At Monday's meeting, the Dickinson City Commission discussed revising an ordinance regarding the city's hospitality tax to have more control on how much money goes to the CVB.

Dennis Johnson, city commission president, said the bureau is receiving funding from two areas: the hospitality tax and the lodging/occupancy tax.

"As I see the issue here is we have an occupancy tax, which is a 2-percent tax on rooms, and that tax is 100 percent dedicated to the convention and visitors bureau," Johnson said.

City attorney Matt Kolling said the current ordinance states that 20 percent of the 1 percent hospitality tax goes to the Dickinson Convention and Visitors Bureau.


"The proposed ordinance takes out the 20 percent allocation to the visitors bureau," Kolling said. "If the ordinance is adopted, the amount of funding provided to the visitors bureau would be a matter of your discretion during your annual budgeting process."

Johnson said with Dickinson's strong economy, the occupancy tax is generating quite a bit of money.

"I would much rather see the amounts decided by the city commission in terms of the hospitality tax, so if the occupancy tax has a significant increase, the amount that goes over from the hospitality tax would decrease and that money would be held at the city level," Johnson said.

If the occupancy tax declined, Johnson said the commission could increase the amount of the hospitality tax to accommodate.

No action was taken on the matter, but it will be discussed at the next meeting.

A public hearing was held during Monday's meeting regarding the 2010 budget.

The public was invited to voice their concerns and many questioned the proposed street light utility, which passed its first reading at a meeting earlier this month.

"My only point is; I understand the concept of the street light franchise fee, but you could also apply that to police protection and fire protection," said Dickinson resident Leon Mallberg. "Churches expect fire protection, expect police protection. Those kinds of things have legitimate spreads also."


Kolling said creating a utility for the police and fire protection would present "some serious legal challenges."

Kessel said there is a precedent for a street light utility. Bismarck has been charging for street lights for quite some time.

If the street light utility is implemented, the average expected monthly charge to a home would be about $2 and commercially about $10. Rates would be based on the size of the water meter. The larger the meter, the more the home or establishment would be charged.

About $185,000 in revenue would be generated from the utility, which would go toward the cost of operation of the street light utility, but not new construction.

"When it comes to something like street lights, we all enjoy the street lights and they are a necessary thing to have," Johnson said. "The philosophical question here is, if we need $180,000 more in revenue to cover the city obligation, our choice would be to put that on the back of all the property tax owners, which would be about 70 percent of the people or we could create this utility and put it on the backs of all 100 percent of property owners regardless of whether or not they are tax exempt."

The cost to operate the street lights is about $300,000, and the street light utility, if created, will not have an excess of money, said Shawn Kessel, city administrator.

In other matters:

r The Mayor's Committee on the Employment of Persons With Disabilities has organized Diversity Days which will take place Oct. 18-24. Johnson proclaimed the month of October as Celebration of Diversity Month.


r Representatives from El Sombrero and Ponderosa Liquors came before the commission to face a penalty due to having two liquor license violations within a 24-month period. Both establishments were given a $1,000 fine and a one-day suspension of their liquor license, to be determined by Kessel.

r Recommendations regarding property owner and builder exemptions were heard from members of the public.

The next meeting of the commission is scheduled for 5:15 p.m., Oct. 5 at Dickinson City Hall.

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