Council Direction

On May 19, 2020, three or more Councilmembers agreed to move forward on a Future Agenda Item Requests (F.A.I.R.) related to a discussion regarding the City's BBB appropriation.  City staff will be seeking further direction. 

The BBB tax was originally adopted by the Flagstaff voters in 1988. The BBB tax is a 2% local transaction privilege tax (TPT) levy on the gross revenue generated from hotels, motels, campgrounds, bars, and restaurants, and is in addition to all other state and local transaction privilege taxes. The BBB tax was originally approved for a 10-year period in 1988, and revenues were allocated to fund Tourism, Beautification, Economic Development, and Administration.

On December 19, 1995, Council adopted Ordinance 1902 approving a reallocation of BBB Tax revenues.  The BBB Tax allocation has remained the same since then and is set forth in our City Code, Chapter 3-06, Hospitality Industry Tax Revenues.   The table below represents the original and current allocations:
 

Allocations	Original	Current
Administration	3.0%	0.0%
Arts and Science	0.0%	7.5%
Beautification	32.0%	20.0%
Economic Development	16.5%	9.5%
Parks and Recreation	0.0%	33.0%
Tourism	48.5%	30.0%

At the March 5, 1996 General Election, a ballot measure was brought forth, Proposition 401, to request a continuance of the 2% BBB Tax rate for an additional 15-years.  While the official ballot measure did not include specific allocation of revenues, the publicity pamphlet provided a Fact Sheet that shared the change in allocations.

At the May 18, 2010 General Election, a ballot measure was brought forth, Proposition 401, to request a continuance of the 2% BBB Tax rate for an additional 15-years.  While the official ballot measure did not include specific allocation of revenues, the information pamphlet provided information on the current allocations and purposes.  Attached is the information pamphlet related to that election.  

As the current BBB Tax is set to expire May 31, 2028, staff recommends bringing a ballot measure to request an extension of the tax to the voters for the November 2024 General Elections with an additional opportunity two years later if the measure does not pass.  

The BBB Tax is codified under City Code Chapter 3-06, Hospitality Industry Tax Revenues.  A copy of the code is attached.  

Staff has provided an updated City Council Reports related to BBB Tax recently.  This and other reports are provided.