CCW Minutes and Attachments 1-10

COUNCIL COMMITTEE OF THE WHOLE The Council Committee of the Whole met on July 9, 2019 at 6:00 p.m., with Council President Hare presiding. Members of Council present were Mr. Anderson, Mr. Sudler (departed at 7:37 p.m.), Mr. Neil, Mr. Slavin (departed at 7:40 p.m.), Mr. Cole, Mr. Polce, Mr. Taylor, and Mr. Lindell. Mayor Christiansen was also present (departed at 7:34 p.m.). Civilian members present for their Committee meetings were Mrs. Doyle and Mrs. Haass (Utility), Mr. Caldwell and Col. Dix, Retired, (Parks, Recreation, and Community Enhancement), and Mr. Contant and Mr. Shevock (Legislative, Finance, and Administration). Mr. Neil moved to amend the agenda to change the order of the committees, as follows: Utility Committee; Parks, Recreation, and Community Enhancement Committee; and Legislative, Finance, and Administration Committee. The motion was seconded by Mr. Polce and unanimously carried. UTILITY COMMITTEE The Utility Committee met with Chairman Cole presiding. ADOPTION OF AGENDA Mr. Neil moved for approval of the agenda, seconded by Mr. Taylor and unanimously carried. Presentation - Kent County Sewer Project Ms. Debbie Pfeil, Senior Planner, KCI, reviewed a presentation entitled “Kent County Levy Court US 13 Sewer Rehabilitation Project, City of Dover Council Committee of the Whole, July 9, 2019” (Attachment #1). Mr. Sudler asked about the closed circuit television video (CCTV) inspection process and who would review the video. Responding, Mr. Dan Strang, Senior Project Manager, KCI, stated that they are doing the CCTV inspection as a pre-inspection because there is currently a 24-inch force main that runs down the median and it is beginning to fail. He explained that instead of cutting open the concrete pipe and installing new pipe, they will inspect strategic locations of the existing pipe using CCTV to ensure the new PVC pipe will fit through. Mr. Strang noted that they are not worried about the integrity of the existing pipe as much as whether they can install the new pipe without any problems. Mr. Sudler noted his appreciation for the strategy adopted for letting the community know about this project, and stated that he thought it was a model that other organizations and agencies should adopt. Mr. Anderson asked if there were particular time frames indicated on the websites and social media to let the public know how long particular disruptions would last. In response, Ms. Pfeil stated that when they met with those affected in particular areas, they talked about the anticipated window of time that it might take, and as the project progresses and they have more information they are releasing additional information. She explained that the first notification for Garden Lane said it is through the first week of August, noting that it is anticipated to be a four-week project, weather permitting. Ms. Pfeil advised that the problem they have with releasing too much information ahead of time is losing credibility, and they don’t want people to feel that there will be a major delay in regard to the weather. Responding to Mr. Taylor regarding the new materials, Mr. Strang stated that they would be installing a new PVC pipe. He explained that they looked at different alternatives and decided not to install a flexible sleeve

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 2 inside the pipe to line it because of concerns regarding the integrity of the existing pipe. Mr. Strang advised that they did not want to install a good liner in a bad pipe and have to do it again in five (5) years. He stated that the new PVC pipe is anticipated to last between 50 and 80 years and there is potential for it to last longer since it will be protected by the existing pipe. Mr. Strang noted that the selling point for the PVC was that it is brand-new infrastructure. He stated that the existing pipe is 40 years old and had a history of challenges related to the material and how it is installed, and they thought PVC piping would be less susceptible to some of the previous gas problems. Mr. Taylor asked if this project was put out for bid and why George & Lynch was selected. In response, Mr. Strang stated that this was a publicly advertised project and they received three (3) bids. He advised that one (1) of the bidders withdrew their bid because of a substantial error on their part, and George & Lynch was the lowest responsive bidder remaining. Dedication of Rights-of-Way and Public Infrastructure - Energy Lane and Stover Boulevard Mrs. Donna Mitchell, City Manager, reviewed the background and analysis regarding the evaluation of proposal for the dedication of rights-of-way and public infrastructure for Energy Lane and Stover Boulevard. She noted that the pylon sign at the beginning of Stover Boulevard, along with the vegetation within the island will be owned and maintained by Chesapeake Utilities, and an agreement had been provided to the City stating this fact. Staff recommended acceptance of dedication of rights-of-way and public infrastructure of Energy Lane and Stover Boulevard. Dedication is to include all of the referenced public improvements. Mr. Neil moved to recommend acceptance of staff’s recommendation. The motion was seconded by Mr. Taylor and unanimously carried. Mr. Neil moved for adjournment of the Utility Committee meeting, seconded by Mr. Anderson and unanimously carried. Meeting adjourned at 6:21 p.m. PARKS, RECREATION, AND COMMUNITY ENHANCEMENT COMMITTEE The Parks, Recreation, and Community Enhancement Committee met with Chairman Anderson presiding. ADOPTION OF AGENDA Mr. Sudler moved for approval of the agenda, seconded by Mr. Neil and unanimously carried. Presentation - Opioid Community Response Team Efforts (Kristan McIntosh, Senior Consultant - Health Management Associates) Ms. Kristan McIntosh, Senior Consultant, Health Management Associates, reviewed a presentation entitled “Opioid Overdose Community Response Teams (CRT)” (Attachment #2). Mr. Sudler asked if, other than identifying hotspots indicated as areas with very high rates of opioid overdose deaths in 2018 and possibly talking to some of the constituents in those areas, Ms. McIntosh had found that there is a need for any additional programs or activities separate from clinical treatment. Responding,

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 3 Ms. McIntosh stated that she had. She explained that clinical treatment and the need for more treatment was a theme that has come up. Ms. McIntosh stated that the whole effort is a component of a Centers for Disease Control and Prevention (CDC) funded grant project that the Division of Public Health (DPH) is working on and another component of the project was conducting community surveys and a gap analysis that focused very specifically on determining support services individuals who are living with opioid use disorder (OUD) need, other than treatment services. She noted that the services that rose to the top were peer support, stable housing for individuals with OUD in general and for individuals coming out of the criminal justice system specifically, as well as transportation. Ms. McIntosh noted that they are currently in the process of sending out another survey; however, those findings are anticipated to be released and she offered to share the results with members. Mr. Sudler stated that he would like to see the results as well as the survey questionnaire. Mr. Lindell asked whether, in regard to community involvement, local schools and school districts had been considered. In response, Ms. McIntosh stated that involving the school districts as stakeholders had come up in a lot of conversations and they are concentrating on involving them. She noted that they had recent conversations with the kids' department related to services for children and families and how to strategically include the school districts without impinging on them. Ms. McIntosh welcomed any thoughts or recommendations Mr. Lindell may have in this regard. She explained the importance of involving schools, both in terms of children and youth who have or may develop addiction issues, as well as for children and youth who are living within families that are impacted by addiction overall, to help break that cycle. Mr. Caldwell asked who would be providing the resources for the City of Dover. Responding, Ms. McIntosh explained that the DPH is leading this effort and they are working on distributing the resources, including Naloxone. She stated that they are also working to develop a resource card for distribution as well. In response to Mr. Caldwell, Ms. McIntosh stated the CRT is specifically involved in responding to a specific type of crisis, a disruption in the supply of opioids. She explained that they had spoken to the Police and Fire Departments and EMS, so individuals who would like to get involved do not necessarily have to be from a crisis group; however, if there are individuals from crisis groups that he thinks should be involved, she would welcome them. Responding to Col. Dix, Ms. McIntosh explained that fentanyl increases the potency of the substance to which it is added. She stated that some individuals seek out substances with fentanyl in them because they can use less of the substance, cut it with fentanyl and sell it at a higher potency so that they make more money. Ms. McIntosh advised that it is important for individuals to be aware of the presence of fentanyl in substances and to have resources available, because if an individual uses a substance and is not aware that it has fentanyl in it, it can increase their risk of overdose. Mr. Taylor stated that, as a retired law enforcement officer in the City, he found that one of the biggest problems was dealing with “real time,” explaining that the HIPAA laws that govern law enforcement and first responders don’t allow them to tell people immediately not to use a certain substance because they can’t bring up someone else’s case. He asked how the CRT collaboration manages that issue. In response, Ms. McIntosh explained that none of their communications will impact ongoing enforcement investigations, so the real time nature might not actually be real time. She indicated that the communications that the CRT receive will be identified and the DPH will do communications regarding mass events, such as five (5) or more individuals who have overdosed within three (3) hours. Ms. McIntosh explained that HIPAA laws and confidentiality are something that the CRT stakeholders will need to receive training regarding. She stated

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 4 that DPH is very cognizant of that fact and is going to work on making sure that the communications that they share are very clearly identified and that the community response team stakeholders all know how to responsibly share that information with other stakeholders so that they can get the information without putting anyone at risk. Mayor Christiansen recognized the efforts of Lieutenant Governor Bethany Hall-Long, Councilman Polce and others who took criticism when they went out on the streets with the initial distribution of Narcan. He stated that, as a volunteer firefighter, he had responded to a number of call regarding individuals who have overdosed on heroin and he cannot believe that the state is undertaking a program to address a health and public safety crisis in regard to the opioid crisis, while at they were on the verge of authorizing a gateway drug, which they will probably do in the next session of the legislature. Mayor Christiansen stated that he finds it very unconscionable because it will unravel all of the good work that Ms. McIntosh, the Lt. Governor, and others are trying to do. Responding, Ms. McIntosh indicated that this topic came up during their planning meetings and, although it is outside of the scope of the CRT, it is certainly related. Mr. Taylor asked if consideration had been given to making this a health care crisis exclusively versus a criminal justice situation, explaining that those who are incarcerated are not getting the help they need, so when they get out, they pick up where they left off. He stated that he thought if this were made a health care issue versus a criminal justice issue, the professionals are already in place who can do what needs to be done immediately versus going through six (6) months to a year of incarceration with no rehabilitation. In response, Ms. McIntosh stated that there is a lot that goes into why it is not a standard health crisis including stigma regarding addiction; however, she noted that one of the benefits that the CRT project and the work of the Behavioral Health Consortium Addiction Action Committee is that they are under the DPH. She stated that the CRT is using a CDC public health response framework to respond to these types of events, and she thinks that people are recognizing that the status quo is not working, so the focus is moving into the health care space. Ms. McIntosh expressed her hope that it continues to move that way because having a criminal justice focus, while important in some respects, is not the way to treat people who have substance use disorders. Mr. Slavin noted that there were individuals in the audience who he believed worked and lived with this issue on a daily basis and asked if it would be okay if the Chair invited members of the public to ask questions of Ms. McIntosh. Mr. Sudler moved to suspend the rules to allow members of the audience to speak. The motion failed for lack of a second. Mr. Anderson advised that the Chair can invite members of the public to speak. Mr. Anderson stated that they had discussed overdose deaths, which are tragic and important, but one of the important things that they can do a lot about are the overdoses that don’t result in death. He explained that with medications like Naloxone at least four (4) or five (5) times more individuals are surviving than are dying. Mr. Anderson stated that this shows the real extent of the problem and asked if Ms. McIntosh could elaborate on how that fits in with the CRT project. Responding, Ms. McIntosh informed members that the data they have used is specifically related to opioid overdose deaths, in an effort to target areas that are adversely affected, but the goal is that even if an individual does experience an overdose, that it does not result in death. She stated that the goal is to work themselves out of a job, so that individuals have the

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 5 resources that they need within the community to prevent an overdose if possible and to ensure that if an overdose does occur, it does not result in a fatality. In response to Mr. Anderson, Ms. McIntosh advised that OpiRescue Delaware is a free overdose rescue application available for downloading. She explained that it provides real time training, information, and community resources for substance use disorder treatment and support. Ms. McIntosh stated that it contains detailed information on how to recognize signs of an overdose, and the steps for administering Naloxone. Brother Peter-Joseph St. Mary Avitabile, CSC, Deacon, Saint Miriam Parish and Friary, stated that he is very invested in this topic because he has seen a great deal of hardship, loss and grief. He noted that he saw the word “volunteer” and asked if there would be funding coming into the community to help manage the project once it is brought to fruition. He stated that he thought faith-based organizations are the way to go because people feel more comfortable coming inside a safe environment that doesn’t say mental health services or hospitals, and there are lots of things that they can do at that first stage when individuals are seeking help. Brother Peter-Joseph St. Mary Avitabile indicated that the Vines Project was doing similar work and would like to unify and direct their attention to the funding sources, noting that there is a grant in connection with Columbia Presbyterian Hospital. Responding, Ms. McIntosh stated that the CRT is hoping to engage faith-based communities of all types in these efforts because they know that a lot of individuals who are not accessing support elsewhere and the faith-based communities have a connection to the community and the ability to communicate and distribute resources unlike other entities and treatment providers. She noted that they are currently in the infrastructure development phase and trying to find ways to build and sustain the project which will require funding. Reverend Theodore Henderson, Interdenominational Ministerial Alliance (IMA) of Dover and Vicinity (IMA) President, stated that he was glad they brought up faith-based communities, explaining that one of the topics they will discuss in the next presentation is a drug and alcohol prevention program, which he indicated is a faith-based program. He noted that when he was a kid, they locked individuals up, and he was glad they were getting away from that now that the issue was no longer just in his neighborhood. Reverend Henderson stated that there are many things that can be done to prevent individuals from getting involved with opioids and indicated that the IMA wants to establish another link. He stated that he saw his first death when he was in the fourth grade in Columbus, Ohio, in the inner city, and nobody cared, but now that it's a crisis, everybody cares, and he thinks there’s something a little bit lopsided about that. By unanimous consent, the meeting recessed at 6:59 p.m. and reconvened at 7:02 p.m. Presentation by the Greater Dover IMA Social Action Committee Reverend Rita Mishoe Paige, Social Action Chair, Interdenominational Ministerial Alliance (IMA) of Dover and Vicinity (IMA) and Reverend Theodore Henderson, IMA President, reviewed a presentation entitled “Social Action Committee of the Interdenominational Ministerial Alliance (IMA) of Dover and Vicinity, Dover Park Survey Presentation for City of Dover Parks, Recreational and Community Enhancement Committee, July 9, 2019” (Attachment #3). Mr. Slavin stated that he had the misfortune of being on Council when the building at Dover Park was demolished and, before it was demolished, the City was guilty of demolition by neglect because the building was closed, mold grew, and it deteriorated to the point where the only choice Council had was to knock it down. He recalled that he and former Councilman Sean Lynn voiced their concern that if they demolished

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 6 the building without a plan to replace it immediately, they would be here for years trying to replace it, and indicated that they are still trying. Responding to Mr. Slavin, Rev. Paige stated that the IMA intends for the partnership they are pulling together to be a separate nonprofit entity. Mr. Slavin stated that he thought that was a wonderful thing to have happen. He noted that he did not know whether they were aware of the action taken by the legislature this year for the $1M that Dover had appropriated for a parking garage and read Section 36 of House Bill No. 260 of the 150th General Assembly, as follows: “The Section 1 Addendum of 81 Del. Laws c. 303 appropriated $1,000,000 to the Office of Management and Budget (10-02-00) for the City of Dover – Parking Garage. Said funding may be used by the City to implement initiatives associated with the Dover Park Master Plan and the Schutte Park Master Plan, provided the initiatives are minor and/or major capital improvements for said parks.” Mr. Slavin advised that this gives the City the flexibility and authority to redirect money toward this kind of project. He stated that he would be willing to sponsor a motion to put some of that money out to the IMA’s new partnership as a challenge to then go out and leverage that money from private foundations and givers, and see if they can double that money, noting that he thought they were a lot closer now than they have ever been with access to these funds. Mr. Sudler stated that he would be willing to second the motion indicated by Mr. Slavin. He noted that he thought that he and Mr. Slavin had both had strong feelings regarding this matter and put forth a valid effort to put back what was promised. Mr. Sudler suggested that the more than 300 surveys submitted in 2014 by the Mt. Zion A.M.E. Church be included with the IMA results for comparison of the current and past data. Mr. Taylor indicated that the IMA had his support from the beginning of their presentation and that he is willing to contribute as much as possible, such as recruiting local contractors who also understand the need and are willing to give above and beyond. He stated that he thought this is a doable project and, if the City and IMA collaborate and do it in excellence, it will get done. Mr. Taylor noted that when he was a Dover Police Officer they had youth week at Dover Park and used the building that was there, and he sees the pain and hurt that are a direct result of that building no longer being there. Mr. Dix noted that when he was in high school he worked for the City of Milwaukee, WI as a floor walker in social centers and when people got disruptive, he would remove them from the facility. He indicated that when he was reading the presentation, he thought that they were describing something more like the Milwaukee, WI social center, rather than a park recreational center. Mr. Dix noted that he thought that the Capital School District was talking about abandoning certain schools on the east side of the city and suggested that the IMA try to get one of the schools, explaining that he thought it would be perfect for their use because they would have a cafeteria and meeting rooms. He stated that he thought they are required by state law to demolish the building but the IMA might be able to get one for their use. Responding, Rev. Henderson indicated that he and the IMA worked together with Mr. Taylor on the initiative to get the recent referendum passed, and it was his understanding that they are going to renovate, modernize, and innovate the schools, not tear them down. Col. Dix suggested that the IMA contact Dr. Dan Shelton, Capital School District Superintendent, to find out what the plan is because he knows they are talking about abandoning grade schools on the east side of Dover, which he thinks would fit perfectly with the IMA’s plans. Mr. Neil recalled that over the next four (4) years $500,000 is budgeted for improvements for Dover Park based on the plans designed to clean up and make that a very usable park, including the possibility of a

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 7 building. He indicated his approval of the IMA moving ahead on the suggestion of Mr. Slavin, noting that he thought that they could have an even larger area because this is in the 3rd Council District and it would be wonderful for the homeowners’ associations to be able to utilize the building for their meetings which he and Mr. Cole currently attend in school buildings that aren’t really set up for that purpose. Mr. Neil stated that there is great possibility if they use the building as a social center when people can meet. He noted that their sample of 102 people is a very small amount of the 7,000 voters in the 3rd District; however, he thought it’s a worthwhile project and if it does come about he'll support it. At the request of Mr. Anderson, Mrs. Donna Mitchell, City Manager, clarified that the allocation in the budget is an annual allocation to try to get some of the options included in the Master Plan implemented piecemeal over five (5) years, explaining that it was noted that the City was looking at fund-raising to get those options completed. She advised members that the Master Plan included a 1,440 sq. ft. building as one of the options and, since the park was purchased through grant funds from the U.S. Land and Water Conservation Fund and the Delaware Land and Water Conservation Trust Fund, the City is prohibited from using the land for anything other than public park land, except for where the old building was located. Mrs. Mitchell explained that, since the old building footprint can be used, she contacted the engineer to determine whether a 3,600 sq. ft. could be configured using the former building footprint and he said that with some tweaking it could be put in that space. Col. Dix suggested that they could also consider two (2) floors. Mr. Sudler stated that he thought that they serve the people, the people do not serve them, so they don’t tell the people where they need to be, the people tell them where they need them to be, and throughout the years, the people had already told them they want another building in the same location, so he thought it was a little disrespectful to try and divert attention from what the constituents had already said. He indicated that although Dover Park is located in the 3rd District, people from elsewhere use the park and members have a responsibility to be friendly and good neighbors to all the districts. Mr. Sudler noted that he thought that members needed to get back to listening to the people and serving at the will of the people, not just doing what they think needs to be done for them. He stated that unless you have actually gone out and done the footwork and talked with these people, your thoughts are really not valid in regard to a placement. Mr. Sudler explained that he and the IMA had a pulse on the people because they had been out there and he thought it was disingenuous for members to divert the attention away from what the people had already said. Rev. Paige stated that she thought that the location at Dover Park was perfect because it is right next to a public housing development, a State Housing Authority, tax credit, development, as well as low to moderate income developments. She noted, as someone who has worked in that area for more than 30 years, that people in those developments have a lot of transportation barriers, and if the center is in Dover Park, they would have easy access and be able to walk directly to the center without having to cross a highway or a street. Rev. Paige explained that her suggestion of a satellite police office in the building was based on her previously experience as the administrator for the public housing drug elimination program. She noted that the program no longer exists because the Department of Housing and Urban Development (HUD) cut the funds; however, she used to negotiate the contracts with all of the municipal police agencies throughout Kent and Sussex Counties for extra duty protection in all of the public housing developments and some of their sites. Rev. Paige stated that they had space dedicated for police officers and just the presence of a car being there was a deterrent to crime. She noted that a lot of shootings had been taking place on the east side of

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 8 Dover and at the Dover Housing Authority development next to Dover Park and, although she could not speak for the police, she suggested that a police presence would be a great thing for the east side. Mr. Hare stated that he thought there were a lot of good ideas; however, he expressed concern that there were a lot of details that had not been addressed. He suggested that this matter be brought back at a separate meeting dedicated to this topic, so members could delve into it and get more details. Mr. Slavin moved to recommend that the City explore a challenge grant to the newly formed nonprofit partnership for Dover Park that must receive 501(c)(3) designation from the IRS in order to receive any funding. The source of City funding is found in Section 36 of House Bill 260 of the 2019 legislative session, and the intent of the motion is simply to have the City begin that dialogue about funding. The motion was seconded by Mr. Sudler and unanimously carried. Mr. Sudler moved to recommend acceptance of the report, seconded by Mr. Taylor and unanimously carried. Presentation - Skate Park Advocates Col. Dix informed members that he had discovered that Mr. Dave Hugg, Director of Planning and Community Development, was instrumental in installing a skate park in Smyrna approximately 15 years ago. He stated that he was looking at the company that supplied the equipment for that park, and in thinking about the plans that were previously proposed for concrete structures, he took photos of Smyrna Skate Park for members to review (Attachment #4). Mr. Anderson noted that the gentleman scheduled to make the presentation regarding the skate park had requested a delay due to childcare issues. Mr. Lindell moved to defer this matter until the Council Committee of the Whole/Parks, Recreation, and Community Enhancement Committee meeting in August. The motion was seconded by Mr. Hare and unanimously carried. Mr. Taylor moved for adjournment of the Parks, Recreation, and Community Enhancement Committee meeting. The motion was seconded by Mr. Neil and unanimously carried. Meeting adjourned at 7:37 p.m. LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE The Legislative, Finance, and Administration Committee met with Chairman Lindell presiding. ADOPTION OF AGENDA Mr. Anderson moved for approval of the agenda, seconded by Mr. Neil and unanimously carried.

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 9 Proposed Ordinance #2019-16 Amending Chapter 102 - Taxation of the Dover Code by Inserting a New Article VII - Lodging Tax (Sponsors: Hare and Polce) Mr. Polce reviewed Proposed Ordinance #2019-16, explaining that it proposes a suggested 3% tax rate for lodging establishments. He advised that the General Assembly vested the City the power to take this action on June 30, 2019. Mr. Polce moved to recommend adoption of Ordinance #2019-16, seconded by Mr. Slavin. Mr. Neil stated that he thought that this was long overdue, noting that he talked about it when he was first elected in 2015 and there was supposed to be some resistance from the tourism community. He advised that whatever the City uses these funds for, whether it’s strictly for infrastructure, there is no reason why visitors should not help. Mr. Anderson stated that he thought members needed to talk to Mr. Dave Hugg, Director of Planning and Community Development, because he has some ideas regarding this matter; however, he thought they could enable it and should then come back to discuss the details of how best to utilize the funds. He stated that with that caveat, it has his support, because if they don’t do it, it’s going to be done anyway and the money will not stay in the local community. Responding to Mr. Shevock, Mr. Polce explained that the lodging tax is specifically for rooms in a hotel, motel or tourist home, as defined in 30 Del. C. §6101, and does not apply to event spaces. Mr. Contant asked whether the City did an assessment regarding how the lodging tax would impact the average rates in the area, and the annual amount the City expects to receive. In response, Mr. Polce stated that the National Conference of State Legislatures (NCSL) did a full assessment of state lodging taxes from a national perspective (Attachment #5), and even with a 3% increase by both the City and Kent County, the City is still at a marginal increase. Mr. Polce noted that an article titled “The Impact of the Hotel Room Tax: An Interrupted Time Series Approach,” published in the National Tax Journal in December 1992, (Attachment #6), when this debate first hit the national publications, clearly outlines what tax rate fear at the time was and showed that there was a non-marginal impact on both business development and rental in the demography that was outlined. He stated that an article titled “Tax Policy and US Hotel Industry Economic Impacts,” published in Oxford Economics, in November 2017 (Attachment #7) also demonstrated that a small tax, such as 3%, when dealing with consumer behavior, i.e. hotel rentals, shows a non-varied impact. In regard to the question regarding average rates in the area, Mr. Polce reviewed information from Trivago.com for the top four (4) hotel rentals, including calculations regarding the total increase to consumers with the 3% City and County lodging tax (Attachment #8), noting that it would equate to an approximate $12 increase on a room rental that was typically $198. He stated that he thought that consumers would continue to pay regardless of the marginal increase. Responding to Mr. Anderson, Mrs. Donna Mitchell, City Manager, stated that she did not have the research with her; however, when this matter was discussed years ago, the prior administration had researched the potential annual revenue of a lodging tax and she believed it was between $600,000 and $800,000, although she did not recall what proposed rate that was based on. Mr. Anderson stated his belief that, at that time, 2% would raise approximately $700,000 and 3% would raise close to $1M, and newer projections showed between $900,000 and $1.2M.

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 10 Mr. Hare noted that the City of Dover was not a pioneer in this area, explaining that four (4) other municipalities had already established lodging taxes, including the cities of Milford and Wilmington. At the request of Mr. Taylor, Mr. Polce explained that he thought Council would need to discuss where these funds will ultimately be dispensed and welcomed feedback regarding an amendment to the ordinance regarding this matter. Mr. Hare stated that he agreed with Mr. Polce, and thought that was conversation for another time, perhaps during a workshop. He asked how the City would know if it was receiving the correct amount. In response, Mr. Polce provided an article titled “Bill Silva on the downside of the lodging tax,” published in the Delaware Business Times on May 18, 2018, (Attachment #9), noting that the 149th General Assembly passed House Bill 377, which was enabling legislation to allow the state, counties, and political subcommittees, i.e. municipalities, to start collecting lodging taxes up to 3% and, as a result, there is a system in place through the Department of Finance to ensure that accounts are reconciled. Mr. Cole noted that the process is outlined in 30 Del. C. §6104 - Payment of tax, as follows: “The amount of the tax collected for each month shall be reported and paid over to the Department of Finance not later than the fifteenth day of the month following the month of collection on forms to be prescribed by the Department of Finance. Interest at the rate of 1 percent per month, or fraction thereof, shall be charged on payments made after the prescribed due date.” Mr. Neil noted that each of the counties currently receives money from the state collection for tourism, so the process should be seamless. Mr. Polce explained that this issue was brought to the attention of the General Assembly on June 30, 2019 by Representative Sean Lynn and Senator Trey Paradee in reaction to a legislative measure that was also introduced by Senator Paradee that allows the County to levy a lodging tax up to 3% with all of the funds to be diverted to DE Turf. Mr. Polce explained the significance of that is that monies that are generated in the City from individuals using City roads, infrastructure, and critical services if needed, are then diverted to DE Turf. He stated that this will give the City the ability to be on a level playing field with everyone else. Mr. Lindell stated that he concurred with Mr. Polce sentiments regarding this matter. He informed members that he had recently traveled through South Carolina, Georgia, and Florida and everywhere he stopped, he was assessed a local and state lodging tax. He explained that he did not consider not going to Charleston because he might have to pay an additional $12. Mr. Lindell indicated that he thought people would still come to the City, and this would allow the City to divert some funding to critical needs and relieve some of the burden from the taxpayers. (City Clerk Office Note: Subsequent to the meeting, Mr. Polce provided an article titled “Top 10 cities with the highest travel taxes” published in Fortune, May 2012 (Attachment #10)). The motion to recommend adoption of Ordinance #2019-16 was unanimously carried. Mr. Neil moved for adjournment of the Legislative, Finance, and Administration Committee meeting, seconded by Mr. Shevock and unanimously carried. Meeting adjourned at 7:59 p.m.

COUNCIL COMMITTEE OF THE WHOLE MEETING OF JULY 9, 2019 PAGE 11 Mr. Neil moved for adjournment of the Council Committee of the Whole meeting. The motion was seconded by Mr. Taylor and unanimously carried. Meeting adjourned at 8:00 p.m. William F. Hare Council President WFH/TM/dd S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Committee-Minutes\2019\07-09-2019 CCW Minutes.wpd Attachments Attachment #1 - Presentation entitled “Kent County Levy Court US 13 Sewer Rehabilitation Project, City of Dover Council Committee of the Whole, July 9, 2019” Attachment #2 - Presentation entitled “Opioid Overdose Community Response Teams” Attachment #3 - Presentation entitled “Social Action Committee of the Interdenominational Ministerial Alliance (IMA) of Dover and Vicinity, Dover Park Survey Presentation for City of Dover Parks, Recreational and Community Enhancement Committee, July 9, 2019” Attachment #4 - Photos of Smyrna Skate Park, provided by Col. Dix Attachment #5 - National Conference of State Legislatures (NCSL), Table of State Lodging Taxes, dated January 28, 2019, provided by Mr. Polce Attachment #6 - An article titled “The Impact of the Hotel Room Tax: An Interrupted Time Series Approach,” published in the National Tax Journal in December 1992, provided by Mr. Polce Attachment #7 - An article titled “Tax Policy and US Hotel Industry Economic Impacts,” published in Oxford Economics, in November 2017, provided by Mr. Polce Attachment #8 - Information from Trivago.com, provided by Mr. Polce Attachment #9 - An article titled “Bill Silva on the downside of the lodging tax,” published in the Delaware Business Times on May 18, 2018, provided by Mr. Polce Attachment #10 - An article titled “Top 10 cities with the highest travel taxes” published in Fortune, May 2012, provided by Mr. Polce

ATTACHMENT #1 Council Committee of the Whole Meeting of 07/09/2019 Kent County Levy Court US 13 Sewer Rehabilitation Project City of Dover Council Committee of the Whole July 9, 2019

Project Owner Kent County Levy Court Department of Public Works  Diana T. Golt, P.E. Director of Public Works  Andy Riggi, P.E. Assistant Director, Engineering

Project Team  Project Management  Construction Management and Inspection  Community Outreach Both Companies  Project Contractor have local offices in Kent County

Project Partners Located in the City of Dover

Project Scope  The sewer project involves installing a small carrier pipe into a larger host pipe a.k.a. “sliplining” for 15,400 linear feet  This method allows work to occur in the median with the existing pipe  Pipe Install Includes: • Cleaning of the existing pipe • Closed Circuit Television Video (CCTV) inspection • Access points for future maintenance & Inspection • Jack & Bore US 13 crossing to avoid lane closure • Testing new pipe Photo courtesy of Aegion-Underground Solutions-State Profile “Use of Fusible PVC pipe in Georgia surpasses 200 projects”

Project Scope  Anticipating a 5 month project duration (weather permitting)  No anticipated disruption of sewer service  Starting last week of June  Limited traffic disruptions, such as: • Temporary lane closures • Temporary turn lane closures

Project Scope  Restricted by Peak Time / Events / Hours: • Holidays & Fall Race Weekend • Daytime work allowed • Specific work can only be done at Nighttime

Project Area 3 Phases • Start south at Garden Lane and move north to West Denney’s Road Dover Downs Hotel & Casino Dover Mall Wilmington University Delaware State University Delaware Technical Community College

Project Area – Phase 1A T1 Garden Lane from DuPont Highway to Chatham Cove Entrance T2 Northbound Left Travel Lane near Townsend Boulevard Intersection T3 Southbound U-Turn South of Jefferic Boulevard T4 Northbound left turn at Lepore Intersection T5 Northbound U-Turn South of North State Street Intersection

Project Area – Phase 1B T6 Southbound U-Turn at McDonald’s / Yukon T7 College Road Intersection T8 Southbound Turn Lane at College Road Intersection T9 Northbound U-Turn near South Mall Road Entrance

Project Area – Phase 2A No anticipated traffic disruptions have been identified in this Phase; however, the end of Phase 1B (T9) and the beginning of Phase 2B (T10) have limited disruptions (see phasing maps).

Project Area – Phase 2B T10 Southbound U-Turn across from Delaware State Police Headquarters T11 Northbound U-Turn North of Wawa and across from C.F. Schwartz Toyota T12 Northbound Left Turn into KW Boulevard (Dover Town Center, DSU Commons, Sam’s Club, etc.) T13 Cedar Chase Drive Intersection

Project Area – Phase 3 Northbound Turn Lanes at West T14 Denney’s Road Intersection West Denney’s Road from T15 DuPont Highway to Delaware Technical Community College Delaware Technical Community T16 College Entrance Road of West Denney’s Road

Project Outreach - Meetings  Kent County Levy Court Sewer Advisory Board (1)  Kent County Levy Court Commissioners Meeting (1)  City of Dover Management Meeting (1)  Project Outreach Workshops (2)  City of Dover Council Committee of the Whole (1)

Project Outreach - Notifications  Kent County Levy Court Press Releases  Kent County Levy Court Social Media • Facebook (2 accounts) • Twitter • Next Door  US 13 Construction Project Coordination • DelDOT Sidewalk project • City of Dover Electric light upgrade project • Capital Station commercial development project • Commercial development project (Kings Highway & Maple Parkway)

Project Outreach - Notifications  Advanced general project notices • Door to door – hand delivered Businesses (250) Residential (150)  Direct management contact • Schools (4) • Churches (2) • Multi-Family Developments (5) • Hotels (14) • Businesses (12)

Project Outreach - Notifications  07-01-2019 Notification / Garden Lane Closure • Advanced door to door notice – hand delivered in area • Email notification subscription group • City of Dover City Manager Public Works Electric Planning and Inspections • Kent County Department of Public Safety • State of Delaware Transportation Management Center (TMC)

Project Outreach - Notifications  07-08-2019 Notification / Project Start – Temporary Traffic Disruptions Phase 1A • Email notification subscription group • Press release • City of Dover City Manager Public Works Electric Planning and Inspections • Kent County Department of Public Safety • State of Delaware Transportation Management Center (TMC)

Project Outreach - Services  County Website Information Portal • New project page created • Direct link to information http://www.co.kent.de.us/sewerproject/ • QR Code established

Project Outreach - Services  Website Project Page • Project Information • Project Area/Map • Notifications Up to date project notifications Press Releases Monthly Reports • DelDOT traffic camera link • Project Point of Contact

Project Outreach - Services  Dedicated ongoing communication services • Email subscription notifications • Project phone line: (302) 318-1139 • Project email address: project.outreach@kci.com

Questions / Comments Debbie Pfeil Outreach Project Manager Sr. Project Manager/Planning Manager (302) 318-1133 debbie.pfeil@kci.com

ATTACHMENT #2 Council Committee of the Whole Meeting of 07/09/2019 Parks, Recreation, and Community Enhancement Committee Meeting Opioid Overdose Community Response Kristan McIntosh Teams 1

WELCOME | Overdose Crisis Response Team Presentation • Review Opioid Overdose Crisis in Delaware • Discuss Division of Public Health Opioid Overdose System of Care • Review Opioid Overdose Crisis Response Team Structure in Kent County • WE NEED YOUR HELP! 2

THE OPIOID OVERDOSE MORTALITY CRISIS IN DELAWARE Rate of Opioid-Related Overdose Deaths in Delaware 30 27.7 28 26 24 22 20 US Delaware Deaths, Age Adjusted 18 16.9 16 14.8 13.9 14 12 12.6 12.8 14.8 12 13.3 Rate per 100K Persons 9.3 9.2 10 7.7 10.4 8 6 9 6 5.1 7.4 7.9 4.1 4.5 4.5 4.2 4.5 6.8 7.3 3.7 3.5 6.1 6.4 6.6 4 5.9 4.5 4.7 5 4.1 2 2.9 3 3.3 0 Source: CDC WONDER 3

THE OPIOID OVERDOSE MORTALITY CRISIS IN DELAWARE 4

DELAWARE OPIOID OVERDOSE SYSTEM OF CARE | Overview System of Care Goals • Decrease the incidence and severity of opioid addiction. • Ensure optimal, equitable, and accessible care for all. • Prevent unnecessary deaths and disabilities. • Contain costs while enhancing efficiency. • Implement quality and performance improvement of opioid addiction care throughout the system. • Ensure designated facilities have appropriate resources to meet the needs of patients 5

COMMUNITY CRISIS RESPONSE TEAMS (CRT) | Overview Definition: Grassroots hyper-local community advocates who marshal resources in real-time during an opioid overdose crisis What is a crisis? A rapid increase in the number of opioid overdoses and/or a substantial disruption in the supply of illicit opioids Pre-Crisis During Crisis Build community resilience through engagement activities Implement enhanced Post Crisis Assess community resources screening that can be leveraged during a crisis Disseminate information Conduct After Action Review Meet iteratively to maintain Notify DPH of Activities CRTs Naloxone distribution 6

COMMUNITY CRISIS RESPONSE TEAMS (CRT) | CRT Components 1. Prevention: The capabilities necessary to avoid an opioid overdose crisis. 2. Protection: The capabilities necessary to protect communities from the negative public health impact associated with an opioid overdose crisis. 3. Mitigation: The capabilities necessary to reduce loss of life and property by lessening the impact of an overdose crisis. 4. Response: The capabilities necessary to save lives, protect property and the environment, and meet basic human needs after an overdose crisis has occurred. 5. Recovery: The capabilities necessary to assist communities affected by an opioid overdose crisis to recover effectively. 7

KENT COUNTY | Dover Dover Local CRT Boundaries North of W. North St. South of Division St. East of Saulsbury Rd. West of State St. 8

KENT COUNTY | Smyrna Smyrna Local CRT Boundaries Northeast of Carter Rd. Southeast of Glenwood Ave. West of Dupont Blvd. 9

CRT INFRASTRUCTURE Lead CRTs ensure DPH has ultimate response readiness at the accountability for county-level and augments Division of Public Health the CRTs response when needed Delaware DMRC offer support Medical and community to Reserve Corps CRTs New Castle Kent County Sussex County County Hedgeville Claymont Dover Smyrna Seaford Millsboro Local CRTs conduct community engagement and marshal resources during a crisis 10

CRT INFRASTRUCTURE Each entity who participates on the CRT will have a defined role that is outlined as part of the Kent County CRT Response Plan Entity Possible Role(s) DPH • Identify and validate each opioid-related sentinel event using data • Coordinate with CRT stakeholders to implement CRT Action Plan • Ensure sufficient resources are available to CRT stakeholders First • Operate under standard protocols to prevent overdose fatalities Responders • Carry additional Naloxone and resource cards during an overdose spike • Report unusual symptoms to DPH Hospital EDs • Identify staff that are responsible for educating patients who experienced an overdose at discharge • Deploy discharge protocols to expedite connections to treatment services SUD • Communicate with existing and former clients during a spike through a variety of Treatment information sharing channels Providers • If trained as a trainer in Naloxone Administration, provide Naloxone training and kits to patients and their families Community • Use existing relationships and presence in the community to share information about Groups the increased risk of overdoses and local resources • If trained as a trainer in Naloxone administration, train individuals who are at risk and their families to administer Naloxone 11

COMMUNITY CRISIS RESPONSE TEAMS (CRT) | CRT Planning Meetings • First CRT Planning Meetings held with interested stakeholders in June • In Kent County, 21 stakeholders attended making up a diverse range of entities • Lots of key takeaways from the discussion, including: • A focus on acting immediately • Great interest in being trained to administer naloxone and/or become a train the trainer • Heavy focus on communication of opioid related sentinel events across the community 12

WE NEED YOUR HELP DPH and HMA are seeking compassionate community- minded individuals to serve on our Local CRTs

SEEKING CRT MEMBERS ACROSS ALL COUNTIES, Including Kent County Qualifications • Live or work in- or adjacent to the local CRT boundaries • Able to commit 8-12 hours of volunteer hours annually • Oriented or willing to be trained on the status of opioid overdoses in the community • Be a community ambassador for CRT efforts • Attend virtual and in person trainings and meetings as needed 14

GET INVOLVED | Contact your County Lead Contact us if you would like to join a CRT or if you have any questions! Kristan McIntosh| Senior Consultant | New York, NY • Kent County Lead, Crisis Response Team • (646) 590-0238 | kmcintosh@healthmanagement.com Liddy Garcia Bunuel | Principal | Washington, DC • Sussex County Lead, Crisis Response Team • (410) 924-9435 | lgarciabunuel@healthmanagement.com Xavior Robinson | Senior Consultant | Washington, DC • New Castle County Lead, Crisis Response Team • (202) 516-4481 | xrobinson@healthmanagement.com 15

ATTACHMENT #3 Council Committee of the Whole Meeting of 07/09/2019 SOCIAL ACTION COMMITTEE Of the INTERDENOMINATIONAL MINISTERIAL ALLIANCE (IMA) Of DOVER AND VICINITY DOVER PARK SURVEY PRESENTATION For CITY OF DOVER PARKS, RECREATIONAL and COMMUNITY ENHANCEMENT COMITTEE JULY 9, 2019

The Social Action Committee of the IMA of Dover and Vicinity administered Community Surveys from February 21 – May 22, 2019 for the purpose of determining the interest of the community in having a recreational facility built as well as the programs and services desired. Four Formal Meetings Were Held in the East Dover Area: 1. February 21- White Oak-Town Point Civic Association meeting. A total of 6 surveys were completed. 2. April 11- Dover Housing Authority (Afternoon and Evening) A total of 2 meetings were held, and 12 surveys were completed. 3. May 14- Transformation AME Zion Church/A total of 6 surveys were completed.

Others Completing the Survey Surveys were also administered to people at the Dover Park, employees at Head Start Telamon Corporation-Willis Road location and the Dover Educational and Community Center. Also Completing surveys were people attending a Human Trafficking Workshop at Delaware State University, local clergy and individual residents throughout the community.

RESULTS OF 2019 Community Survey for White Oak/Dover Recreational Park and Facility A total of 102 surveys were completed and returned to the IMA SocialAction Committee. • 40 completed had East DoverAddresses. • 2 had Capital Green Addresses • 1 had a Capitol Park Address • 43 were from residents throughout Dover with 19901 and 19904 zip codes. • 2 completed with no address • 4 were residents from Camden • 1 completed with a Houston, DE address • 1 completed with a Smyrna address • 3 had Felton addresses • 1 had a Frederica address • 4 had Magnolia addresses

The Following are the Top Five Programs Those Surveyed Would Like to See Offered: Alcohol & Drug Prevention Family Counseling Open Area for Community Meetings/Events Gang Prevention Domestic Violence The Following are the Top 7 Activities Those Surveyed Would Like to See Offered: Summer Camp Fitness/Zumba Learn to Swim Day Trips Teen Night Dance Classes Gymnasium

A total of 5 of the 14 non Dover residents completing the survey were utilizing the Dover Park and the remaining 9 were at the Human Trafficking Workshop at Delaware State University. The 5 non Dover residents completing the survey in the Dover Park proves that the park services residents living in and outside of Dover.

Other Program and Activity Interests Listed Were: Basketball, Police satellite office, training for trades, cooking classes, women’s workshops, mentoring, money management, family wellness, volleyball, voter registration, Boys & Girls Club, Play Ground, College Prep Information, Military Information, Pickle ball (singles &doubles), Adult Night, Arts & Crafts, board games, Black History programs, Legal Aid, building strong men and women workshops, building strong families, reading programs, bullying workshops, mental health, swimming classes, horseback riding, tennis, social skills, hospitality skills, soccer, football, swing sets, yoga and meditation for young people, tennis, child abuse workshops, sewing classes, cultural events, emotional intelligence, restorative justice, parents night out, programs to help immigrants filling out their VISS application and other court paperwork, etiquette and personal management for youth.

Recommendations The IMA Social Action Committee recommends that a community partnership be organized by the Social Action Committee consisting of the faith based community, the City of Dover Police Department, and other appropriate representation from the City, the appropriate State of De representation, Major Rundle from the DAFB, Delaware State University and other educational institutions, young people, community residents, sororities, fraternities, the Masons, Links, other civic and community organizations and others desiring to be a part. The purpose would be to collaboratively raise money to build a facility to house many of the programs and services desired by the community residents completing the survey. We are also proposing management to be the responsibility of the partnership.

ATTACHMENT #4 I Council Committee of the Whole Meeting of 07/09/2019

7/9/2019 State Lodging Taxes ATTACHMENT #5 Council Committee of the Whole Meeting of 07/09/2019 '"\\NCSL 111111 State Lodging Taxes 1/28/2019 Specific Statewide Taxes on Lodging - By State The following table contains state lodging tax rates. Please keep in mind that these taxes are often levied in addition to local lodging and/or sales taxes. Contact: Jackson Brainerd State Lodging Tax Rates State Sales Tax Lodging Tax Total State Tax Alabama N/A 4.0% [1] 4.0% Alaska No state sales tax N/A None Arizona N/A 5.5% 5.5% Arkansas 6.5% 2.0% 8.5% California N/A N/A None Colorado 2.9% N/A 2.9% *Connecticut N/A 15.0% 15.0% *Delaware No state sales tax 8.0% 8.0% Florida 6.0% N/A 6.0% Georgia 4.0% 5$ fee per room 4.0% *Hawaii 4.0% 10.25% 14.25% www.ncsl.org/research/fiscal-policy/state-lodging-taxes.aspx 1/4

7/9/2019 State Lodging Taxes State Sales Tax Lodging Tax Total State Tax Idaho 6.0% 2.0% 8.0% Illinois N/A 6.0% 6.0% Indiana 7.0% N/A 7.0% Iowa N/A 5.0% 5.0% Kansas 6.5% N/A [2] 6.5% Kentucky 6.0% 1.0% 7.0% Louisiana 4.45% N/A 4.45% *Maine N/A 9.0% 9.0% Maryland 6.0% N/A 6.0% Massachusetts N/A 5.7% 5.7% Michigan 6.0% 6.0% [3] 12.0% Minnesota 6.875% N/A 6.875% Mississippi 7.0% N/A 7.0% Missouri 4.225% N/A 4.225% Montana 3.0% [4] 4.0% 7.0% Nebraska 5.5% 1.0% 6.5% Nevada N/A N/A [5] None *New Hampshire No state sales ta x 9.0% 9.0% New Jersey 6.625% 5.0% 11.625% New Mexi co 5.125% N/A 5.125% New York 4.0% N/A 4.0% North Carolina 4.75% N/A 4.75% North Dakota 5.0% N/A 5.0% Ohio 5.75% N/A 5.75% Oklahoma 4.5% N/A 4.5% www. ncsl .org/research/fiscal-poli cy/state-lodging-taxes.a spx 2/4

7/9/2019 State Lodgin g Taxes State Sales Tax Lodging Tax Total State Tax Oregon No state sales ta x 1.8% [6] 1.8% Pennsylvania N/A 6.0% 6.0% Rhode Island 7.0% 5.0% 12.0% South Carolina 5.0% [7] 2.0% 7.0% South Dakota 4.5% 1.5% [8] 6.0% Tennessee 7.0% N/A 7.0% Texas N/A 6.0% 6.0% Utah 4.7% 0.32% 5.02% Vermont N/A 9.0% 9.0% Virginia 4 .3% [9] 0.0% 4.3% Washington 6.5% N/A 6.5% West Virginia 6% N/A 6% Wisconsin 5% N/A 5% Wyoming 4% N/A 4% District of Columbia N/A 14.95% 14.95% Puerto Rico N/A 9% 9% Virgin Islands N/A 12.5% 12.5% N/A =ta x not levied on accommodations * =no additional local ta x on accommodations [1] State lodging tax rate raised to 5.0% in mountain lakes area. [2] A state lodging ta x is only levied in special statutory designated redevelopment districts at 5.0%. [3] State levied lodging tax varies. Convention hotels located within a qualified local government unit with 81 -160 rooms rate is 3.0% and 6.0% for hotels with more than 160 rooms. All other hotels with 81-160 rooms is 1.5% and 5.0% for hotels with more than 160 rooms. [4] Specific sales ta x levied on accommodations . State has no general sales ta x. www.ncsl.org/research/fiscal-policy/state-lodging-taxes.aspx 3/4

7/9/2019 State Lodging Taxes [5] Counties must levy a lodging tax of 1% or 2% based on population. [6] The rate becomes 1.5% after 7/1 /2020. [7] State sales tax on lodging is lowered to 5.0%. [8] Seasonal Uune-September) [9] An additional 0.7% may be included in the rate in certain planning districts. Copyright 2019 by National Conference of State Legislatures www.ncs l.org/research/fisca l-policy/state-lodging-taxes.aspx 4/4

(Uec;emtJt-H, 'f':-l�ILJ, pp q,j.:J-'P ATTACHMENT #6 Council Committee of the Whole Meeting of 07/09/2019 THE IMPACT OF THE HOTEL ROOM TAX: AN INTERRUPTED TIME SERIES APPROACH** CARL BONHAM, EDWIN FUJII, ERIC IM, AND JAMES MAK* ABSTRACT bus, phio from l 1.5 percent to 15.5 per­ cent. In August 1984, the average hotel Travel destinations commonly levy hotel room tax rate in 45 U.S. cities with room room taxes to finance services demanded taxes was about 7 percent (Mak 1988). A hy touri:;ts and resicknts. Evidence to d,(lfe similar survey of 242 U.S. visit�r conven­ on the effects of a hotel room tax has cen­ tion bureaus found that the average hotel tered on ex ante analyses of the incidence room tax rate in January 1990 was nearly of a hotel room tax and its effect on the 10 percent [Hiemstra and Ismail, (1990, demand for travel and vacation goods. In p. 4)J. With the enactment of a 5 percent this paper we employ interrupted time se­ hotel room tax by the State of New York ries analysis to estimate ex post the impact in June 1990, New York City currently of a hotel room tax on real net hotel rev­ has the highest hotel room occupancy tax enues by analyzing that time series before in the U.S. at 19.25 percent plus $2 on and after the imposition of the tax. We find every room priced at $100 or more.2 that the tax had a negligible effect on real The popularity of the hotel room tax lwtel revenues. �terns from t�e widely held perception that its burden 1s largely borne by tourists Introduction rather than residents, with little negative T impact on industry sales. For example, RAVEL destinations commonly levy Combs and Elledge (1979, p. 203) argued �pecial tourist taxes to finance public without empirical evidence, that the "de: services demanded by tourists and resi­ mand for lodging in a resort [is] inelastic dents. A popular tax is the ad valorem ho­ with respect to price," and concluded that tel room (transient accommodation) oc­ "a small ad valorem tax imposed on motel cupancy tax, typically assessed as a percentage of the rental price of an oc­ �ooms and other forms of temporary lodg­ cupied hotel room. In 1990, 47 out of 50 �ng would have very little impact on the industry and would generate substantial states in the U.S. levied taxes on hotel revenue for the local government." Hotel room rentals {Hiemstra and Ismail, (April operators, by contrast, generally believe 1990, p. 4)]. Alaska, California, and Or­ that a hotel room tax harms the indus­ egon do not levy state taxes on room rent­ als but permit localities to levy hotel room try.3 However, empirical studies on the taxes. impact of the hotel room tax yield contra­ I n recent �ears, �ising fiscal responsi­ dictory results. 4 . _ _ In a previous article in thisjournal, Fu­ b1hties combined with the growing reluc­ ... tance of residents to pay higher truces have Jll, Khaled and Mak (1985) estimated the induced many state and local govern­ ex ante incidence of a proposed hotel room ments to enact new truces or increase rates tax in Hawaii. 5 We are unaware of any on existing hotel room taxes. Since 1987 empirical studies that measure the ex post Atlanta raised its hotel room tax from 8 effect of the imposition of a hotel room true. The purpose of this paper is to estimate percent to 11 percent, Fort Lauderdale from 7 percent to 9 percent, Portland, Or­ the impact of the 1987 Hawaii hotel room egon from 6 percent to 9 percent, Dallas tax by comparing the real net (after tax) from 9 percent to 13 percent, and Colum- rental receipts of hotel operators before and after the imposition of the tax. A nov­ *Department of Economics, University of Hawaii at elty of this paper is the use of tax base Manoa, Honolulu, HI 96822. rather than survey data to measure hotel Carl Bonham is also a resean:her with the Social Sci�_nce Research Institute at the University of Ha­ receipts. We measure the impact of the true wau. on real net hotel rental receipts using in- 433

(l.Jf~CO !nt.JOI, l ~lJL) , pp. ' l .JJ ...' 11 434 NATIONAL TAX JOURNAL [Vol. XLV terrupted time series analysis. Our em- suming demand and supply remained un- pirical results indicate that the tax re- changed, economic theory predicts that the duced real net rental receipts by about 1 room tax must always increase the (after percent. The coefficient, however, is not tax) price of hotel room rentals to con· significantly different from zero. In sum, sumers and reduce the net price received the State is able to raise substantial by hotel operators, except in cases where amounts of tax revenue from the new tax the elasticity of supply is infinite or the without imposing a significant burden on elasticity of demand is zero. Indeed, if the hotel operators. incidence of the room tax falls partly on consumers, higher after-tax prices are likely to decrease the quantity demanded Taxing Hotel Room Rentals in for lodging and the net revenues of hotel Hawaii operators. Act 340 passed by the 1986 Hawaii State Our model treats the imposition of the Legislature imposes a 5 percent "tran- new transient accommodation tax as a sient accommodation" tax, commonly quasi-experiment and measures its effect called the hotel room tax, on proceeds from using an interrupted time series model.8 the rental of "transient accommodations" The imposition of a transient accommo· beginning January 1, 1987. 6 The tax ap· dation tax in January 1987 breaks the plies to the gross proceeds from room time series for real after-tax hotel rental rentals and includes the hotel tax "visibly receipts into two discrete segments. The passed on and collected." Thus the tax base null hypothesis is that the new tax had for the hotel room tax is equal to 1.0525 no significant effect on real net hotel rental multiplied by the rental price of the hotel receipts. We use monthly data on the nat- room. The effective tax rate is 5.25 per- ural log of real after-tax hotel rental rev- cent of the rental price of the lodging. 7 enues (lnHR) constructed from the gen· With exceptions for very small hotel op- eral excise tax base data on hotel receipts.9 erators, monthly returns and payments are The data span the period from January due by the end of the month following the 1980 to March 1990 (see Figure 1). We transaction month. The new transient ac- began the series in January 1980 to ex· commodation tax is in addition to the 4 elude the potential effects of the (1979) percent sales (i.e., general excise) tax lev- second oil crisis on travel and terminated ied on the gross proceeds received by the the time series just prior to Iraq's inva· sellers for all retail transactions, includ- sion of Kuwait. ing hotel rentals. Hence, the combined An additional exogenous event was rel- tax on hotel room rentals rose from 4.16 evant to the empirical analysis. In Sep· percent to 9.41 percent. Tax collections tember 1985, the Group of Five Nations under the two taxes are displayed in (the U.S., Great Britain, France, Ger· Table 1. many, and Japan) agreed to intervene in In fiscal year 1990, the State collected foreign exchange markets to bring about $82 million from the transient accom- a depreciation of the dollar relative to modation tax, making it the third largest other currencies. The Plaza Agreement, source of state government revenues after as this intervention is referred to, at- the general excise tax and the state in- tempted to correct for the appreciation of come tax. An additional $62 million was the dollar relative to other major curren- collected from the general excise tax lev- cies over the period 1981-1985 (see Yar- ied on hotel room rentals. brough and Yarbrough, 1988, p. 437). Since demand for travel is highly sensitive to exchange rate fluctuations (see e.g., Gray The Model 1966, and Loeb 1982), the depreciation of The imposition of a hotel room tax cre- the dollar subsequent to the agreement is ates a wedge between the price of hotel expected to have a significant impact on room rentals to consumers and the after- foreign travel to Hawaii. Japanese visi· tax price received by hotel operators. As· tors, for example, comprise the second

No. 41 HOTEL ROOM TAX 435 TABLE l TAX COI.l,ECTlONS FROM HOTELS AND TRANSIEN1' ACCOMMODATIONS (in thousands of dollars) Fiscal Year General Excise Tax Hotel Room Tax Total 1987 $49,919 $23,510 $ 73,429 1988 $56,612 $62,279 $123.951 1989 $57,608 $75,973 $133,581 1990 $61,931 $82,438 $144,369 ource: State of Hawaii, uepartment of Taxation, Annual Report, 1987-1988, /Ylflf-1989, and 1989-1990. Notes: The fiscal year runs from July 1 to June 30. Thus for fiscal rear 1987, the t~nsient accommodation tax was in effect for only 6 months. ln that year transient accommodation tax collections were less than half of the general excise tax collections on hotel rentals; this is explained by the lag in getting operators to register for the new tax. As of June 19_87, there were 8,619 filers for the transient accommodation tax. ln June 1988, there were 10,770 filers. largest group of Hawaii tourists. The yen/ nents in the residual series that might be dollar exchange rate fell from 237 yen per mistaken for tax effects. The attraction of dollar in August 1985 to 127 yen per dol- the time series approach is that it pro- lar three years later, cutting almost in half vides a parsimonious representation of the the yen price of vacations in Hawaii. Be- real revenue series in terms of its own past. tween 1985 and 1990 the Japanese share An alternative approach would be to of total Hawaii visitor traffic rose from 14.5 estimate a reduced form equation for the percent to 20. 7 percent. 10 Similarly, the real revenue series with the appropriate share of total foreign visitors rose from economic explanatory variables. A dummy 29.5 percent to 36.4 percent. 11 To capture variable would then be used to capture the the separate effects of the Plaza Agree- effect of a policy change. 12 Such a model ment in 1985 and the imposition of the would, however, require deseasonalized- hotel room tax in Hawaii in 1987 we used monthly data on a long list of variables two policy dummies: one for the exchange (e.g., airfares, incomes, hotel room rates, rate adjustment and the other for the im- prices of other vacation goods, competing plementation of the hotel room tax. destination prices, exchange rates, tourist Intuitively, intervention analysis can be taxes, etc.), not all of which are readily thought of as a two-step process. First we available. identify an ARIMA noise model for the real While the time series approach does not revenue series prior to the Plaza Agree- offer a structural explanation for the be- ment and the imposition of the hotel room havior of the real revenue series, it does tax. This identified model is then reesti- allow us to identify systematic changes in mated using the full sample and the re- the stochastic process generating the rev· siduals are analyzed for systematic com- enue series before and after the imposi· ponents. If the model identified for the tion of the tax. The appropriateness of this pre-intervention sample produces random approach is illustrated by the stability of residuals when estimated over the full the empirical results reported below. The sample, there is no systematic effect from noise model identified in the pre-inter- either policy change. Note that the valid- vention period fits the data remarkably ity of this approach requires a well-spec- well before and after the imposition of the ified noise model for the preintervention tax. period to eliminate systematic compo- Our model is described as follows:

(l.J(n :w1111w', 1 ~ m/.), pp. 113,1- 111 436 NATIONAL TAX JOURNAL [Vol. XLV lnHRi = N, + ~~(IJ,t) (1) 8m(B) = 1 - I 81B 1 (i = 1,2, ... ,m) where D = {O if the impact is permanent lnHRi = ln(real net after tax hotel re- 1 if the impact is transitory ceipts) wh(B) = I w;Bi (i = 0,1,... ,h) = the "noise" component of the k number of periods by which the ARIMA structure initial impact lags behind the == the transfer function capturing intervention point. the effect of the discrete inter~ ventions (j = 1,2) The path of f(l 1) is determined by 8m(B). j = 1: 1 since September 1985 The permanent impact converges to '"h(l)/ (exchange rate adjust- 8m{l). The degrees of polynomials in B, m ment) and h, are empirically determined. 13 0 otherwise Empirical Results = 2: 1 since January 1987 (hotel room tax) The model is initially fit over the pre- 0 otherwise intervention series, 1980:1-1985:8 (i.e., The pre-intervention series is driven en- before the Plaza Agreement (1985:9) and tirely by N, and is assumed to take the the hotel room tax (1987:1)) to identify the form of the following ARIMA model: ARIMA structure underlying the time se· ries. A series of diagnostic checks is per· N, = µ formed using the estimated autocorrela· tion and partial autocorrelation functions. 0q(B) · 0Q(B") The appropriate ARIMA structure is se- + e <!>p(B) . <l>r(B")(l - B)~'(l - B")~2 t lected using the rule of parsimony. The (2) ARIMA structure identified from the pre- intervention sample is: where µ. = mean of N:i <!>p(B) = 1 - ~ <!>;B' (i = 1,2, ... ,p) <l>r(B") 1 - I <l>;.B ;. (i = 1,2, ... ,P) l-6 9B9 (i = 1,2, ... ,q) 4 6q(B) 1 - I 6;B; = µ + (l -<!>1B)(l-<l>12)B 12 1 ( ) 0Q(B") = 1 - I E>;.Bi• (i = 1,2, ... ,Q) are the autoregressive, seasonal autore- Parameter estimates are reported in the gressive, moving average, and seasonal first column of Table 2. 14 The Q statistic moving average polynomials in the back fails to reject the null hypothesis that e1 shift operator B of order p, P, q, and Q, is serially uncorrelated. Thus, we assume respectively. (1 -· B) and (1 - B") are the that the identified ARIMA structure is reverse difference and seasonal difference appropriate. It is noteworthy that the two operators, respectively. The parameters >.. 1 sets of estimated parameters of the AR- and >.. 2 are binary variables. If the series IMA structure in Table 2 are not statis- is first order integrated, >.. 1 = 1 and 0 oth- tically different from each other pairwise, erwise; if the series is first order season- with each parameter estimate within the ally integrated, >.. 2 = 1 and 0 otherwise. other's 95 percent confidence interval. A The innovation series e 1 is independently comparison of forecast and actual real net and identically distributed with zero mean. hotel receipts generated by the model is The transfer function for each interven- displayed in Figure 1. tion is described as: To estimate the impact of the imposi- tion of the hotel room tax, we impose the pre-identified ARIMA structure on the (3) entire sample along with transfer func· tions for the Plaza Accord and the hotel where room tax. The complete model with the

( LJ()(~() /1/1) (>•/ , / }J}Jr.j. {!(!. 'U ,J·'I I 41 HOTEL ROOM TAX 437 l<'IGURE 1 REAL HOTEL REN'l'AL REVENUE lN l.OGARl'l'HMS ACTUAL FORECAST RoomWI 80 81 82 83 84 85 86 87 88 89 ntified transfer functions has the fol- 2 percent initially, with a total long run 1ing form: increase of 28.5 percent. More importantly, our results show that {D = N + W1,o I real after-tax hotel room receipts declined •t.t t (1 - 81,1 B) 1.t- 2 by approximately one percent as a result of the imposition of the room tax in 1987. (5) However, the coefficient of the hotel tax dummy, w 2,0 , is not significantly different !'he ARlMA model estimated for the full from zero. In sum, the hotel room tax had nple with the two policy dummies in- a negligible impact on the real room re- ded is reported in the last column of ceipts of hotel operators. 16 ble 2. The ARIMA structure identified Our results suggest that the hotel room !r the pre-intervention period is very tax is almost fully shifted forward to tour- ble throughout the full sample period, ists (i.e., the price to buyers rose by the licating that the two transfer functions full amount of the tax) with no significant iquately explain the change in the time revenue loss to hotel operators. Thus, the 'ies during the post-intervention pe- demand for hotel lodging may be close to d. Our results illustrate the separate perfectly inelastic. This is further sup- i!Ct.s of the two dummy variables on real ported by examining data on real hotel er-tax hotel rental receipts.16 Note that room rates displayed in Figure 2.17 Fig- ! coefficient of the Plaza Agreement, w10 ure 2 shows no sharp decline in the trend 0.021, is positive and significant (at 5 of the room rate series before and after rcent one-tail test) as expected, indi- the room tax was imposed, indicating that ;ing that the depreciation of the dollar hotel operators were able to shift vir· :>aequent to the Plaza Agreement had a tually the entire tax on to consumers. The :nificant positive impact on travel to shifting is more extensive than predicted twaii. Exchange rate adjustments in- by the earlier work of Fujii, Khaled, and 1ased real hotel revenues in Hawaii by Mak (1985) for Hawaii which suggested

(Uocemo o1, nJ:Jl J, pp. 11..u - 111 438 NATIONAL TAX JOURNAL LVol. XLV TABLE 2 PARAMETER ESTIMATES Parameters Pre-Intervention Full Sample Sample (80: 1-85:8) <80:1 - 90:3) µ 6.5961 l 6.59602 (l()C).29) (123.56) 99 -0.25125 -0.25396 (2.12) (2.86) +1 0.33921 0.24479 (3.02) (2.76) +1,2 0.59489 0.64330 (5.72) (8.91) wl ,O 0.02105 (1.78) 61.1 0.92623 (16.47) 0>2,0 -0.00944 (0.13) ()(24) 21.90 24.98 Notes: ADS01ute t statistics are r~~ m parentheses below each coefficient. I • I 0 0 I Q(24) 1s the L1ung-Box Q stattsllc for the null hypothesis that the first 24 residual autocorrelabons are equal to zero. The Q statistic is distributed as a chi-squared statistic with 24-k degrees of freedom, where k is the number of estimated parameters. ex ante that about two-thirds of the tax round-trip airfare and lodging. 18 Another would be shifted to tourists with a mod- potential explanation for the absence of a erately large negative impact on hotel significant tax impact is that other travel rental receipts. The results are closer to destinations in the U.S. have also in· the predictions of Combs and Elledge creased their room taxes recently. How· (1979) who argued that because the de- ever, it is difficult to imagine that various mand for lodging is likely inelastic with tax changes elsewhere, imposed in differ· respect to price, a small ad ualorem tax ent amounts and at different times and on lodging would have little effect on net places, exactly canceled out the new room after tax hotel receipts and yield substan- tax in Hawaii. tial revenue for the local jurisdiction. One plausible explanation for the lack of a significant impact is that visitors did Conclusion not know about the new tax. Since the In recent years many fiscally belea· room tax is typically paid by tourists when guered state and local governments have they check out, they may not have ade- either implemented new hotel occupancy quately anticipated or responded to the taxes or substantially increased existing higher effective price of rooms. However, hotel taxes to finance public services. The this does not apply to more than half of popularity of the tax stems from the all tourists to Hawaii who purchase pre- premise that the hotel room tax is largely paid package tours that include at least exported to non-residents with little neg·

No. 4] HOTEL ROOM TAX 439 FIGURE 2 HOTEL RENTAL PRICE IN LOGARITHMS REAL NOMINAL- · .16 4.60 ·.24 440 ·.32 4.20 ·.40 ·.48 4.00 ·.56 3.80 ·.64 Room JU 80 81 82 83 84 85 86 87 88 89 ative impact on hotel operators. equal to the ratio of the supply and demand elastic· ities for lodging. Empirical estimates suggested a Our analysis of the effects of the 1987 supply elaaticity of 2 and a demand elasticity of l, Hawaii hotel room tax indicates that the yielding the prediction that approximately two thirds tax did not have a significant negative of a hotel room tax would be passed on to visitors in impact on hotel rental receipts. Our find· the form of higher prices. This study, however, like other extant studies, predicts the incidence of the tax ing may not be entirely surprising since ex ante. a 5 percent increase in lodging expendi- 6Transient accommodations are defined as accom· tures represents less than 1.5 percent of modations that are customarily occupied by a tran· the total cost of a typical vacation in Ha- sient for less than 180 consecutive days. A transient is a person who does not have the intention of making waii inclusive of round-trip airfare. That the accommodation a permanent place of domicile. may not be true of travel to other desti- Exemptions are granted for health care facilities, school nations. Therefore it is important to per· dormitories, nonprofit corporations, military person· Corm similar analyses for other travel nel on permanent duty, and government-subsidized low-income renters. See Bock, Brilliant, and Gerding destinations. (1990). 7 For example, since the tax base (B) is inclusive of the tax charged hotel guests, to net the same room ENDNOTES revenue as before the tax, hotels must add on a tax to guests of 5.25%. That is: **The authors are indebted to Chung H. Lee, Ken White, three anonymous referees, and the editor for B = l .0525*R helpful comments. 1 Wall Street Journal, Tax Report, March 8, 1989. After tax ( = .05*8), hotels net (1-.05)*8 = .95*B = 2See "New York's Hotel Tax Highest in the Na· .95*1.0525*R = R. lion," The Sunday Honolulu Star Bulletin and Ad- "Time series intervention analysis was first pro- wrtiur (September 16, 1990), p. F4. posed by Campbell and Stanley (1966) and Cook and sSee, for example, Schofield (1991), p. 1. Campbell (1979) to aasess the impact of a discrete in· 'See, for example, Fujii, Khaled and Mak (1985), tervention in a social process. The methodology is de· Zuraski and Sanders (1989), and Hiemstra and Ismail scribed in McDowell, McCleary, Meidinger, and Hay (1991). (1980). It has a broad range of applications. For ex· 8This partial equilibrium model demonstrated that ample, Box and Tiao (1975) used it to examine the the burden of a hotel occupancy tax is approximately effectiveness of air pollution control laws. McPheters,

(Ur·w onwv r: 1 ~ ':.J I.) , Pf' . .r1 .1, 1-111 440 NATIONAL TAX JOURNAL [Vol. XLV Mann, and Schlagenhauf (1984) analyzed the impact ruary (peaks and troughs are highly variable, chang· of more severe penalties for the use of firearms on ing from year to year). Visitors to Hawaii must ne- property crime. More recently, Fomby and Hayes gotiate a wide variety of factors in planning their (1990) employed intervention analysis to examine the vacations. When are airfares lowest? When doee Golden impact of the War on Poverty on families in the low- Week or Spring Break fall? Note that school and m est quintile of the income distribution. holidays fluctuate from year to year as do cold spelll 9The hotel revenue series is derived by dividing the in both the East and West. Income is certainly not 1 general excise tax base data on hotel receipts ("'total smooth series either. The lumpiness of Japanese in- hotel rental receipts • 1.0416) by the U.S. consumer come due to significant bonuses in June and Decsm· price index times 1.0416. Two a<ljustments were made ber may contribute to the observed behavior of our to the series. Y.'irst, since we are modeling consump· data. Finally, the conclusions of this paper are un- tion and not tax revenues per se, the data are lagged changed when our model is estimated without the one period (e.g. January tax collections reflect De- moving average parameter. cember receipts). Therefore, the dat.a used in the em- 15 Notice that the dumMy for the Plai11 Agreernen~ pirical analysis actually begin in December 1979. Ii. is lagged one period, while the dummy for the ho- Moreover, since visitor lengths of stay can span two tel room tax, 12, is not. The lagged impact of each pol· monthly reporting periods (and average length of stay icy change is determined empirically. The tax dummy is about 10 days) , we weighted current and previous is not significantly different from zero either contem· ' month receipts by 2/3 and 1/3, respectively. poraneously or with a lag. 10State of Hawaii, The 1990 State of Hawaii Data 18 We have treated the Plaza agreement as an ex· Book, (Honolulu: Department of Business, Economic ogenous policy change. An alternative would be to Development and Tourism, 1991), p. 197. specify a transfer function for the real after-tax nv· 11 Hawaii Vi8itors Bureau, 1991 Annual Research enue series and extract the information in the yen/ Regort <Honolulu, 1992), p. 4, dollar exchange rate by including it as an indepen· 2See Slemrod (1982) for an example of such an ap· dent variable, Using this alternative specification, the proach used to measure the impact of the Revenue pre -interoention sample for the transfer function model Act of 1978 on the volume of stock transactions. ends immediately prior to the imposition of the hotel 13 A transfer function model is a multivariate AR- room tax, not prior to the Plaza agreement. Although IMA model where causal input variables determine the sample periods are different, we find that the noiee the output variable, and the error term (capturing the model from this alternative specification is quite aim· combined effects of all other factors influencing the ilar to that reported in Table 2, and the imposition of output series) is modeled as an ARIMA proceSB. Here, the hotel room tax had a very email negative \mpacl the real revenue series is influenced by policy dummy on real hotel revenues. The hotel room tax dummy inputs. In a more general model the revenue series has a coefficient of ·.0065 with a t-atatistic of 0.04 11 could be determined by inputs such as the explana· compared with a coefficient of ·0.0094 with a t-atatl• tory variables used in a reduced form model , The dy- tic of(.13) as reported in Table 2. Thus, in both caaee, namic response of real revenues to the policy change the imposition of the hotel room tax had a negligible is described by the general rational distributed lag, im~act on real hotel room rental receipts. 1 f!I,), called a transfer function, or an impulse re- These are computed from data on average hotel sponse function. In contrast to the usual static-dummy room rates provided by the accounting firm of Pannell variable approach using a reduced form model, the Kerr Forster based on their monthly surveys or in· transfer function model allows for a dynamic re- dividual hotel properties in Hawaii. The surveys cover sponse of real hotel revenues to policy changes. The approximately two thirds of all hotel rooms and ii path of f(l,) is determined empirically and provides subject to measurement error. Thus we use the price information on the impact, transition, and Jong run series only as supporting evidence. 18 effects of the policy change. Hawaii Visitors Bureau, 1990 Annual Researth 14 The identified noise model reported in Table 2 Report (Honolulu, 1991), p. 50. In 1990, the percen~ contains a nine month moving average component in· age of Hawaii tourists purchasing package tours wu eluded to whiten the residuals by capturing the sig- 54%. nificant autocorrelation in the hotel revenue series at lag nine. While some researchers have attributed sig- nificant autocorrelations at long lags to chance and REFERENCES thus elected to ignore them (e.g. Granger and New- bold (1986), pp. 107-114), others have chosen to model Bock, R., E. Brilliant, and J . Gerding, Taxes of Ha· the observed correlation (e.g., Thompson and Tiao wati 1990. (Honolulu: Cross Roads Presa, 1990). (1971), Fackler and Krieger (1986), Koch and Rasche Box, G.E.P., and G.C. Tiao, "Intervention Analyli1 (1988), and Hanssens and Vanden Abeele (1987)). We With Applications to Economic and Environmental choose to model the observed correlation to eliminate Problems,'' Journal of the American Statistical Al· all systematic fluctuations in the residuals of the sociation. Vol. 70 (1975), pp. 70-79. preintervention model to avoid mistaking them for Campbell, D.T., and J.C. Stanley, E%perimental and systematic effects of the hotel room tax. Furthermore, Quasi-Experimental Designs for Research. (Chi· the seasonal and aseasonal behavior of the revenue cago: Rand McNally, 1966). series is complex enough to generate such correla- Combe, J.P., and B. Elledge, "Effects of a Room Tu tions. There are a wide variety of factors affecting the on Resort Hotels/Motels," Nalicnal Tax Jownal. Vol. seasonal pattern of the revenue series. Hotel room 32 (1979), pp. 201-207. revenues exhibit annual peaks that typically occur in Cook, T.D., and D.T. Campbell, QIU18i-Experimtlllll· June and December and troughs in October and Feb- lion. (Chicago: Rand McNally, 1979)

11.11i c e1111w r, /"1}1 .!.), pp 'l .JJ- •l t No. 4] HOTEL ROOM 'l'AX 441 Department of Taxation, Annual Report. (Honolulu: Loeb, P., "International Travel to the United States, State of Hawaii, 1987 /1988, 1988/1989, and 1989/ An Econometric Jt:valuation," Annals of Tourism 1990). Research, Vol. 9 (1982), pp. 7-20 Fackler, J.S., and S.C. Krieger, "An Application of Mak, J., "Taxing Hotel Room Rentals in the U.S.," Vector Time Series Techniques to Macroeconomic Journal of Travel Research. Vol. 27 (1988), pp. 10- Forecasting," Journal of Business and Economic 16. Statistics, Vol. 4 (1986). McDowell, D., R. McCleary, E. Meidinger, and R. Hay, Fomby, T., and K. Hayes, "An Intervention Analysis Interrupted 1'ime Series Analysis. (San Francisco: of the War on Poverty," Journal of Econometrics. Sage, 1980). Vol. 43 (1990), pp. 197-212. McPheters, L., R. Mann, and D. Schlagenhauf, "Eco- ~'ujii, E., M. Khaled, and J. Mak, "The Exportability nomic Response to a Crime Deterrence Program: of Hotel Occupancy and Other Tourist Taxes," Na- Mandatory Sentencing for Robbery With a l<'ire- tional Tax Journai. Vol. 38 (1985), pp. 169-1'17. arm," Economic Inquiry. Vol. 22 (1984), pp. 550- Granger, C.W.J., and P. Newbold, l"orecasting Eco- 670. nomic Time Series, 2nd edition. (New York: Aca· "New York's Hotel Tax Highest in the Nation," The demic Press, 1986). Sunday Honolulu Star-Bulleti11 and Aduertiser. Gray, H. P., "The Demand for International Travel (September 16, 19901, p. F4. By the United States and Canada," International Schofield, G., "Bed Tax on City Council Agenda,'' The Economic Review Vol. 7 0966), pp. 83-92. Cairns Post, July 6, 1991, p. 1. Hanssens, D M., and P.M. Vanden Abeele, "A Time- Slemrod, Joel , "Stock Transactions Volume and the Seriea Study of the Formation and Predictive Per- 1978 Capital Gains Tax Reduction," Public Finance formance of EEC Production Survey Expectations," Quarterly, Vol. 10 (1982l, pp. 3-16. Journal of Business and Economic Statistics, Vol. 6 State of Haw an, Department of Taxation, Annual Re· (1987). port, 1987-198H, 1988-1989, and 1989-1990. Hawaii Visitors Bureau, 1990 Annual Research Re- "Tax Report," Wall Street ,lo11mal. (March 8, 1989). port (Honolulu, 1991). Thompson, H.E., and G.C. Tiao, "Analysis of tele- Hiemstra, S., and J. Ismail, Amounts and Types of phone data: a case study of forecasting seasonal time Room Taxes Levied on the /,odging Industry . Pre- series,'' Bell Journal of Economics and Manage - senU!d to the Hospitality, Lodging and Travel Re· ment Science, Vol. 2 (1971), pp. 616· 541. search Foundation, American Hotel and Motel As- Yarbrough, B., and R. Yarbrough, The World Econ- aocia tion. (West Lafayette, Indiana: Purdue University, 1990). omy: Trade and Finance. (Chicago: Dryden Press, Hiemstra, S., and J . Ismail, "Analysis of Room Taxes 1988). l.Alvied on the Lodging Industry," Journal of Travel Zuraski, R., and H. Sanders, "Characteristics of Tour- Research, (Summer, 1992), pp. 42-49. ists and State Taxation of Tourist-Related Expen- Koch, P.O., and Robert H. Rasche, "An Examination ditures," 1989 Proceedings of the Eighty -Second of the Commerce Department Leading- Indicator Annual Conference on Taxatio1'. Tax Institute of Approach," Journal of Business and Economic Sta- America, National Tax Association (1990), pp. 63- tutics, Vol. 6 (1988). 69.

ATTACHMENT #7 OXFORD Council Committee of the Whole Meeting of 07/09/2019 ECONOMICS TAX POLICY AND US HOTEL INDUSTRY ECONOMIC IMPACTS NOVEMBER 2017 EXECUTIVE SUMMARY To quantify the potential impacts of tax policy changes on the hotel industry and the industry's valuable contributions to the US economy, Oxford Economics conducted a scenario analysis for the American Hotel & Lodging Association (AHLA). The analysis highlights a five-year period beginning in 2018, and focuses on tax policy changes under tax cuts of $1.5 trillion over a ten-year period, which we believe will cause real GDP growth to accelerate to 3.0% in 2018 before gradually slowing. The results show that tax cuts provide a stimulus to the economy and are expected to generate a boost to hotel industry operations, cause additional guest spending at restaurants and stores in the travel destination, and increase hotel capital investment-all benefitting the broader national economy. Specifically, the tax cut scenario analyzed in this study would support: • $57.4 billion of additional hotel guest spending in the US (onsite at hotels and ancillary guest spending, such as at local restaurants and stores); • $131. 7 billion of additional sales at US businesses, including additional purchases by hotels of supplies and services; • $22.3 billion of additional wages and salaries for US workers, equivalent to the annual compensation of 94,700 employees for five years; and • $3.9 billion of additional state and local tax revenues. With lower personal income taxes and broad increases in employment, wages and salaries, US consumers would have more discretionary income for travel. Meanwhile, increased business activity and investment would support stronger business travel. Employee training and meetings with customers would increase as businesses respond to the stronger economy.

OXFORD ECONOMICS Tax Policy and US Hotel Industry Economic Impacts Under this tax cut. scenario, direct hotel guest spending would be $57.4 billion higher over the five-year period, compared to a scenario without tax cuts. More hotel guests means more spending in local communities, including stores, restaurants, and attractions. That would also contribute to higher state and local tax revenues, including occupancy and sales taxes. This increased demand at hotels would support hiring new employees and additional shifts for existing ones, as well as additional capital investment in hotels. All told, this investment would result in an estimated $11.0 billion in additional direct wages and salaries for employees at hotels and other business serving hotel guests or involved in hotel construction or renovation. Tax Policy Assumptions This analysis is based on assumed characteristics of legislation that may be passed by Congress. In the scenario with tax policy change it is assumed that: (1) there is a reduction in personal income and corporate taxes that results in net tax cuts over ten years; (2) many, or all, of the tax cuts, sunset after ten years; and (3) the tax cuts disproportionately benefit higher-income households. Other assumptions were also made in performing the analysis. The impacts of tax policy changes were quantified using Oxford Economics' Global Economic Model. In the framework of this model, tax reductions stimulate economic activity in the short-term, but moderating factors impact the positive effects, including, but not limited to, a reduction in tax revenue, increased government debt, and higher interest rates. 3

OXFORD ECONOM ICS Tax Policy and US Hotel Industry Economic Impacts 1. OVERVIEW Tax policy changes have been a central part of the political dialogue over the past year and various proposals have been put forward to simplify the tax code. These proposals have also implied reductions in both corporate and personal tax rates . To quantify the potential impacts of tax policy changes on the hotel industry and the industry's valuable contributions to the US economy, Oxford Economics conducted a scenario analysis for the American Hotel & Lodging Association (AHLA). As part of this analysis, we prepared two macroeconomic scenarios to analyze how tax policy changes would affect the broader economy: • No Tax Cut Scenario: No tax policy changes. • $1.5 Trillion Tax Cut Scenario: Tax policy changes that result in net tax cuts of $1.5 trillion over a ten-year period Based on these scenarios and previous research Oxford Economics conducted for AHLA, we analyzed the impacts to the hotel industry and its broader contribution to the US economy over a five-year period beginning in 2018. The results show that tax policy changes that provide a stimulus to US economic activity are expected to generate a boost to hotel industry operations, as well as cause additional guest ancillary spending (e.g. at restaurants and stores in the destination) and capital investment by hotels. This boost to the hotel industry would further benefit the broader economy. In the $1.5 Trillion Tax Cut Scenario, we estimate real GDP growth would accelerate to 3.0% in 2018, before gradually slowing. Relative to the No Tax Cut Scenario (2.0% GDP growth in 2018), this short-term boost would lift personal income, employment, consumer spending and investment. These effects would result in increased hotel demand, spending by hotel guests, and hotel capital investments; thereby supporting increased earnings by hotel employees, purchases from suppliers, and indirect and induced economic impacts. As shown in Fig. 1, the economic impacts of the hotel industry in the $1.5 Trillion Tax Cut Scenario would support: • $57.4 billion of additional hotel guest spending in the US (onsite at hotels and ancillary guest spending , such as at local restaurants and retail stores) over a five-year period (all estimates reported in real, 2015 dollars) ; • $131. 7 billion of additional economic output, representing sales at US businesses; • $22.3 billion of additional wages, salaries and other labor income for US workers (equivalent to the annual compensation of 94 ,700 employees for five years), including $11.0 billion of direct labor income earned by employees at hotels , other businesses serving hotel guests or involved in hotel construction or renovation (equivalent to the annual compensation of 55,300 employees for five years); and , 4

OXFORD ECONOMICS Tax Policy and US Hotel Industry Economic Impacts • $3.9 billion of additional state and local tax revenues (e.g. occupancy, sales and property taxes). Fig. 1 Impact summary: $1.5 Trillion Tax Cut Scenario Difference relative to No Tax Cut Scenario Cumulative impact (5-years , 2018 to 2022) Direct Total Direct hotel guest spending (onsite at hotels and $57.4 ancillary), real Output (business sales), real (billions) $61 .1 $131.7 Wages, salaries and other labor income, real $11.0 $22.3 (billions) State and local taxes, real (billions) $2.5 $3.9 Note : Total hotel industry impacts include direct impacts (hotel guest spending onsite at hotels, ancillary guest spending , and capital investment) as well as indirect and induced impacts . Monetary amounts in billions of real 2015 dollars. Wages, salaries and other labor income are also referred to as labor income. Source: Oxford Economics 5

OXFORD ECONOMICS Tax Policy and US Hotel Industry Economic Impacts 2. ECONOMIC ANALYSIS 2.1 TAX POLICY ASSUMPTIONS Tax policy proposals at this stage are initial blueprints, and are expected to change in the legislative process. These proposals give early, and likely rough indications of the tax legislation that may be ultimately passed by Congress. 1 For this analysis, we have assumed the following: • In the $1.5 Trillion Tax Cut Scenario, there is a reduction in personal income and corporate taxes that results in net tax cuts over a ten-year period. These tax cut amounts are net of government spending reductions undertaken to help offset tax revenue reductions. • No additional infrastructure spending is assumed as part of the $1.5 Trillion Tax Cut Scenario relative to the No Tax Cut Scenario. • Many or all of the tax cuts are assumed to sunset after ten years to comply with the rules of budget reconciliation. Government spending cuts partly offset tax revenue reductions, but such cuts are back-loaded in the decade. Additionally, some offsetting revenue is raised through one-time tax holidays, such as on foreign earnings and/or carried interest income. • The tax cuts disproportionately benefit higher-income households, which have a lower propensity to spend additional income. • The legislation passes in 2017, and tax cuts are implemented at the start of 2018. 2.2 ANALYZING THE TAX POLICY SCENARIO We quantified the impacts of tax policy changes within the framework of Oxford Economics' Global Economic Model. In this framework, tax reductions stimulate economic activity in the short-term because increased disposable (after-tax) income for households would increase private consumption (consumer spending); additionally, business investment and hiring would increase in anticipation of stronger economic activity and consumption growth, and higher after-tax returns on investment. Increased economic activity would support additional wages and salaries, further boosting consumption, and generating demand for additional production by domestic companies. However, these positive effects would be moderated by several factors . Higher- income households are anticipated to spend only a portion of any direct tax cuts, limiting the short-term impacts on consumer spending. Similarly, only a portion of corporate tax cuts are anticipated to be channelled to domestic investment. Separately, lower tax rates would reduce tax revenues. The net reduction in tax revenue, only partly offset by government spending cuts and stronger economic growth, would increase the Federal deficit. Government borrowing to fund the larger deficit would increase interest rates , partly crowding out private investment. 1 We conducted our macroeconomic analysis based on assumptions as of October 5, 2017. 6

OXFORD ECONOMICS Tax Policy and US Hotel Industry Economic Impacts Also, in anticipation of the effects of fiscal stimulus, the Federal Reserve would be expected to increase interest rates more quickly to manage inflation risks. Higher interest rates would cause the US dollar to strengthen, slowing exports and increasing imports, dampening domestic production. 2.3 IMPACTS TO US ECONOMY The impacts to the US economy in the two scenarios are presented in Fig. 2 and summarized as follows. • No Tax Cut Scenario: Assumes no change to existing tax policy. GDP growth moderates to 2.0% in 2018, before gradually slowing to 1.5% by 2022. GDP growth over these five years averages 1.7%, with inflation at 1.6%. • $1.5 Trillion Tax Cut Scenario: Assumes $1.5 trillion of net tax cuts over ten years. GDP growth accelerates to 3.0% in 2018, and then slows. By 2020, GDP growth is slower than in the No Tax Cut Scenario; however, the level of GDP is higher throughout the period (0.7% higher on average relative to the No Tax Cut Scenario). On average during the five-year period, real personal disposable income in the $1.5 Trillion Tax Cut Scenario is 1.6% higher than in the No Tax Cut Scenario, and real consumer spending is 1.2% higher. We have focused on the first five years following implementation of tax policy changes as the period during which the effects of such policy changes can be most accurately analyzed. 7

OXFORD ECONOMICS Tax Policy and US Hotel Industry Economic Impacts Fig. 2 Impact to US economy: $1.5 Trillion Tax Cut Scenario 2018 2019 2020 2021 2022 Avera~e Growth rates GDP, real No Tax Cut 2.0% 1.7% 1.7% 1.6% 1.5% 1.7% $1.5 Trillion Tax Cut 3.0% 2.0% 1.2% 1.3% 1.5% 1.8% Inflation (price index growth) No Tax Cut 1.6% 1.6% 1.6% 1.6% 1.7% 1.6% $1.5 Trillion Tax Cut 1.6% 1.7% 2.0% 2.2% 2.3% 2.0% Difference in levels relative to No Tax Cut Scenario GDP, real 1.0% 1.2% 0.7% 0.4% 0.4% 0.7% Personal income, 1.5% 1.9% 1.7% 1.5% 1.4% 1.6% disposable, real Consumer spending, real 1.1% 1.5% 1.4% 1.1% 0.9% 1.2% Fixed investment, real 1.8% 1.9% 0.4% -0.2% -0.2% 0.7% Difference in level of interest rates relative to No Tax Cut Scenario (in basis points) Interest rate, 10-year gov. 56 106 91 68 65 77 bonds Interest rate, corporate 59 91 67 46 45 61 borrowing Note: Inflation is based on private consumption expenditure deflater. Source: Oxford Economics 8

OXFORD ECONOMICS Tax Policy and US Hotel Industry Economic Impacts 3. IMPACT ON THE LODGING SECTOR Increased economic activity in the $1 .5 Trillion Tax Cut Scenario would benefit hotels and the broader travel sector. Households would have more to spend on travel, not just because of lower personal income taxes, but also because of broader increases in employment, and wages and salaries, stemming from increased economic activity. As consumer spending increases, discretionary categories, such as travel, would benefit disproportionately relative to areas such as housing and utilities. In an environment of stronger economic growth, consumer and business confidence would improve. Meanwhile, increased business activity and investment would support stronger business travel, both in the transient segment and in the group segment. Many categories of business travel represent a form of business investment, such as employee training and meetings with customers, and would be expected to increase initially as businesses respond to the stronger economy. We have analyzed the potential impacts to the lodging sector in a framework that includes hotel supply, demand (occupied room nights) and price effects linked to economic drivers. To report the results in a summary format, we have focused on demand, average daily rate (ADR), and room revenue in real dollars. As shown in Fig. 3, we estimate hotel demand growth would accelerate to 3.1 % in 2018 in the $1.5 Trillion Tax Cut Scenario, supporting a 3.0% increase in ADR (in nominal dollars), and a 4.5% increase in room revenue (in real dollars). Similar to the broader economy, the impact to the pace of growth would gradually slow, but overall, room revenue in the $1.5 Trillion Tax Cut Scenario would average 2.1 % higher than in the No Tax Cut Scenario. 9

OXFORD ECONOMICS Tax Policy and US Hotel Industry Economic Impacts Fig. 3 Impact to US lodging industry: $1.5 Trillion Tax Cut Scenario 2018 2019 2020 2021 2022 Average Lodging industry, growth rates Demand No Tax Cut 1.7% 1.9% 2.1% 1.9% 1.9% 1.9% $1.5 Trillion Tax Cut 3.1% 2.2% 1.5% 1.5% 1.8% 2.0% ADR, nominal No Tax Cut 2.3% 2.2% 2.2% 2.2% 2.1% 2.2% $1 .5 Trillion Tax Cut 3.0% 3.0% 2.4% 2.5% 2.6% 2.7% Room revenue, real No Tax Cut 2.4% 2.5% 2.7% 2.5% 2.2% 2.5% $1 .5 Trillion Tax Cut 4.5% 3.5% 1.9% 1.7% 2.1% 2.7% Lodging industry, difference in levels relative to No Tax Cut Scenario Demand 1.5% 1.8% 1.2% 0.8% 0.7% 1.2% ADR, nominal 0.7% 1.4% 1.6% 1.9% 2.5% 1.6% Room revenue, real 2.1% 3.1% 2.3% 1.6% 1.4% 2.1% Source : Oxford Economics Increased demand at hotels would support hiring of new employees, and additional shifts for existing hourly employees. This would expand the wages and salaries paid by hotels. As a result, hotels and hotel employees would tend to pay higher levels of state and local taxes, including income and sales taxes. Also, increased volumes of hotel guests would generate increased spending in local communities, such as at local stores, restaurants, and attractions. Stronger demand would also tend to support moderate ADR increases in the short term , given the lags inherent in constructing new hotels. This would also contribute to higher occupancy tax revenues , as well as other local tax revenue, such as sales tax receipts. Direct hotel industry impacts in the $1.5 Trillion Tax Cut Scenario are summarized in Fig. 4. We have provided two sections for direct spending. • Hotel guest spending: represents the majority of the direct spending impact, and includes spending onsite at hotels as well as ancillary spending, such as at restaurants, retail stores and transportation providers. • Direct spending: represents direct hotel guest spending plus capital investment in hotels, such as renovations and construction of new hotels. Overall, in the $1 .5 Trillion Tax Cut Scenario, cumulative direct hotel guest spending would be $57.4 billion higher than in the No Tax Cut Scenario over the five-year period. Direct wages, salaries and other labor income at hotels, the businesses benefiting from guest spending , and construction-sector firms , would be $11 .0 billion higher than in the No Tax Cut Scenario over the five-year period . The wage, salary and other labor income impact, which would represent additional earnings by existing employees, as well as new hires, would be equivalent to the annual compensation of 55,300 employees for five years . Direct state and local 10

OXFORD ECONOMICS Tax Policy and US Hotel Industry Economic Impacts taxes would be $2.5 billion higher than in the No Tax Cut Scenario over the five- year period. Fig. 4 Direct hotel industry economic impacts: $1.5 Trillion Tax Cut Scenario Monetary amounts in billions of real 20 15 dollars 2018 2019 2020 2021 2022 Averalii!e Cumulative Direct impacts, difference relative to No Tax Cut Scenario Hotel guest spending $11.0 $16.7 $12.6 $8.8 $8.3 $11.5 $57.4 (onsite at hotels and ancillary), real Direct spending (hotel guest $11.7 $17.8 $13.4 $9.4 $8.8 $12.2 $61.1 spending and capital investment in hotels) , real Wages, salaries and other $2 .1 $3.2 $2.4 $1 .7 $1.6 $2.2 $11 .0 labor income, real State and local taxes, real $0 .5 $0.7 $0.6 $0.4 $0.4 $0.5 $2.5 -Note: Direct spending is also referred to as direct output (business sales). Direct wages, salaries and other income is also referrred to as direct labor income . Source: Oxford Economics Increased hotel guest spending and capital investment in hotels would support broader indirect and induced economic impacts (Fig . 5), such as through spending by hotel employees, and through purchases by hotels of inputs from suppliers. Overall, in the $1.5 Trillion Tax Cut Scenario, the increased total economic impacts of the hotel industry relative to the No Tax Cut Scenario would include $22.3 billion of cumulative labor income over the five-year period (equivalent to the annual compensation of 94,700 employees for five years), and $3.9 billion of additional state and local tax revenues . Fig. 5 Total hotel industry economic impacts: $1.5 Trillion Tax Cut Scenario Monetary amounts in billions of real 2015 dollars Total hotel industry impacts include direct impacts (hotel operations, guest ancillary spending, and capital investment) as well as indirect and induced impacts 2018 2019 2020 2021 2022 Average Cumulative Total industry impacts, difference relative to No Tax Cut Scenario Output (business sales), $25.2 $38.4 $28.8 $20.2 $19.1 $26.3 $131.7 real Wages , salaries and other $4 .3 $6.5 $4.9 $3.4 $3.2 $4.5 $22.3 labor income, real State and local taxes, real $0.7 $1.1 $0.8 $0.6 $0.6 $0.8 $3.9 Note: Total wages, salaries and other income is also referrred to as total labor income. Source: Oxford Economics 11

OXFORD ECONOMICS Tax Policy and US Hotel Industry Economic Impacts The total impact to labor income in the $1.5 Trillion Tax Cut Scenario by year is shown graphically in Fig. 6. The peak impact is anticipated in 2019, with $6 .5 billion of additional labor income. Fig. 6 Total hotel industry labor income impact relative to No Tax Cut Scenario In billions ofreal, 2015 dollars $7 $6 $1.5 Trillion Tax Cut Scenario $5 $4 $3 $2 $1 $0 2018 2019 2020 2021 2022 Source: Oxford Economics 12

Q, FORD Tax Policy and US Hotel Industry Economic Impacts ECONOM ICS Updated November 9, 2017 All data shown in tables and charts are Oxford Economics' own data, except where otherwise stated and cited in footnotes, and are copyright© Oxford Economics ltd . This report is confidential to American Hotel & Lodging Association and may not be published or distributed without its prior written permission . The modelling and results presented here are based on information provided by third parties , upon which Oxford Economics has relied in producing its report and forecasts in good faith. Any subsequent revision or update of those data will affect the assessments and projections shown. For further information: Adam Sacks adam.sacks@oxfordeconomics.com Aran Ryan aran .ryan@oxfordeconomics.com Oxford Economics 303 W . Lancaster Ave, Suite 2E , Wayne, PA 19087 Tel : +1 610-995-9600

7/9/2019 Hotel Dover Downs Hotel & Casino, Dover - trivago.com ATTACHMENT #8 tr. G Council Committee of the Whole Meeting of 07/09/2019 :N • Sign in to trivago.com with Google Dover Downs Hotel & Casino Tanner Polee tanner.polce@gmail.com 1 Check in �oor Fri, 07/26/19 COf\JTINUE AS TANNER J i ise ... 1 To create your account, Google will share your name, email address, and profile picture with trivago.com. By continuing, Price / night $600+ Accommoda. you agree to trivago.com's orivacy_P,ollcy and terms of service. 0 '- All types V All V Dover Do ... v Select V f +I Our recommendations jo/ Dover Downs Hotel & Casino Hotel 8.6 Excellent (1079 reviews)v Casino · Hot tubs For more relevant matches, adjust your price settings. $1B@6+ Price / night max. $600+ 0 Comfort Suites Dover Hotel 6 " ) Q 3'':l> , 3. J 'l Sf' 1st Most Popular 3-Star Hotel in Dovey_�r.s..<? 3� � '3· l'l, ,,, .,. o{Jq] (_,.,. C-- -•o (:"' .¼} 7.3 (1350 reviews)v Excellent location · Good facilities r-1� ''�j Comfort Suites Hotels $106 2 nights for $212 Free breakfast I view ... j lovevacations � Holiday Inn Dover-Downtown Hotel https://www.trivago.com/?aDateRange%5Barr%5D=2019-07-26&aDateRange%5Bdep%5D=2019-07 -28&aPriceRange%5Bfrom%5O =0&aPriceRange... 1 /8

7/9/2019 Hotel Dover Downs Hotel & Casino, Dover - trivago.com 7 .4 (802 reviews)v Excellent location · Very ci G Sign in to trivago.com with Google x lovevacations ~ • Tanner Polee tanner.polce@gmail .com CONTINUE AS TANNER To create your account, Google will share your name, email address, and profile picture with trivago .com. By continuing, Best Western Galaxy Inn you agree to trivago.com's Qrivacy_RolicY. and terms of service. Hotel 7.2 (619 reviews)v Very good location · Good breakfast nights - for $190 Free breakfast [vie.°" I For more relevant matches, adjust your price settings . $18@6+ Price I night max. $600+ 0 $144 2 nights for c,:~ )~ -.... $287 ~;::kfast G() v- .. ~J 3°p EJ Hotel Sleep Inn & Suites Dover Hotel 8.5 Excellent (1679 reviews) v Excellent location · Excellent food - nights https://www.trivago .com/? aDateRange%5Barr%5D=2019-07-26&aDateRange%5Bdep%5D=2019-07 -28&a PriceRange%5Bfrom%5D=O&aPriceRange . . 2/8

7/9/2019 Hotel Dover Downs Hotel & Casino, Dover - trivago.com for $306 Free G Sign in to trivago.com with Google x breakfast Holiday Inn Express & $1 0 Tanner Polee tanner.polce@gmail.com Hotel CONT INUE AS TANNEH 6.5 Excellent (967 reviews Excellent location · Extrerr To create your account, Google will share your name, email address, and profile picture with trivago.com. By continuing, Holiday you agree to trivago.com's Rrlvacy_P.olfcy. and terms of serv ice. Inn Express $163 2 nights for $326 Free breakfast jview ... j Comfort Inn & Suites Dover Hotel ?;? 1st Most Popular 2-Star Hotel in Dover For morn relevant matches, adjust your price settings. $11@6+ Price I night max. $600+ 0 $287 Free breakfast Hotel Microtel Inn and Suites Dover Hotel 8.1 Very good (1534 reviews)v Extremely clean · Excellent value for money Hotel. .. $150 2 nights for $300 Free breakfast EJ https://www.trivago .com/?aDateRange%5Barr%5D=2019-07 -26&aDateRange%5Bdep%5D=2019-07 -28&aPriceRange%5Bfrom%5D=O&a Price Range . . 3/8

7/9/20 1 9 Bill Silva o n the downside of the lodging tax - Delawa re Busi ness Times ATTACHMENT #9 Council Committee of the Whole Meeting S t ay i nformed of more loca.1 ancl region al business news. Jo111 our newsletter list n ow ofX 07/09/2019 0. BUSINESS TIMES STU FF Suhseri ht• D1J.!it al Ed i t ton ·m,tvn1t•r Scrvil't' lluy t llf' Book of List.s EVENTS SPECIAL EDITIONS LISTS DIGITAL EDITION INNOVATION STUFF NEWS BUSINESS LEADS DBT4@ NOMINATE A LEADER UNDER 40! av�,.��·t,.A[ �r.H e..ERS & 1Nl"lfNATCFS UtJ[ER 40 ewo..·iltWSNlSST'MlSMhi.S NOMI NATE HERE YOU ARE HERE: I l1wu• _, Bill Silva on the dow nsulc of the J,,dgmg t.:1x ( > Bill Silva on the downside of the lodging tax I N NOVATION & Alf':-. VHor.olo 0 Mav 18, l018 � Bill SilvJ, C1.1unty Lodging Ta�, Dl'lawJre I lot(•l Jnd Lorlginj,! Associat ion, �fat l hC\\ Meyer The hotel indus try in New Castle Conmy is facing a direct - DELAWARE 20 1 9 Edition challenge, driven by New Castle County Executive Matthew Meyer's si ngl ing out. our industry for a 38 percent tax increase. MOST POPULAR ARTICLES House Bill 377 is legislation that would allow cou nties to levy a lodging tax of 3 percent on top of t he exi sting 8 percent in most of ESPN's Stephen A. Smith accepts role as HBCU New Castle County, except for Wil m i n gton, where the tax is 10 ambassador p�rcent. The members Delawa re Hotel and Lodging Association oppose Developer to build 2 million square-foot th is bill for the following business reasons: logistics park in New Castle 1. The 38 percent increase in the County Lodging Tax will impact the competitiveness of the hotel indust ry and cost much-needed hotel business, as the tax will be higher than Huge multi-use project underway at Claymont surrounding areas. Guests have a l ready asked about t h is proposed extre me tax. steel-mill site 2. Loss of tourism business will impact our ability to create an<l mai ntain jobs, many at entry level positions, in hotels Plans for vertical farm take root in NE and related tourism ve nues. Hotels already pay our fair share of property t axes, school taxes and other employment taxes. Wilmington 3. New hotel development will slow down, meaning fewer new jobs a nd less property taxes for the county and Concord Mall Barnes & Noble moving to possibility our state. Anti-business legislation is never for the good of our com m u n i ty. Concord Square 'prototype store' this July 4. Meyer and the New Castle County Council are pushing for the maximum tax increase of 3 percent, with no mention of any allocation for t ourism market ing. In the more progressive counties, the lodging tax increases are allocated to add marketing dollars to tourism. New Castle County is taking all the money. 5. There is no mention of addressing AirBnB, the ope rator of illegal hotels i n Delawa re, which pay zero lodging tax, and take hotel business and johs. Legislat ion should be passed to tax them like we tax our hotels. .,;>JP'll�� Travel Insurance: Always Question Your Purchase 6. Last year, the state of Delaware was about to take all the tourism marketing dollars for the three counties, desµite by Aiste Fore man existing law. The lodging ind ustry needs assurance that will never happen again. Only at the last minute was that funding restored. It would have seriously impcde<l our ability to compete. 7. An overall lack of trust of the word of government has really hurt our relations in the state , and now County When to Use New Technologies in Execut ive and Council. Marketing by Jason Trojanow ski Hotels currently pay the 8 percent l odging tax with 5 of that 8 percent going to the State of Del aware general fu nd, I of the 8 percent to beach replenishment in Sussex CoL111ty, I of the 8 percent t o fund the State Tourism Office and µrorated share of th(, last I percent to support the ma rketing of the county via the Greater Wilmington Convent ion and Visitors Does your business have too much Bureau. cash? by Joe Giordano The ind ustry is urging all hoteliers, associates, tourism i ndustry partners and the public to oppose this tax, and reach out th e chair of the House Administration Commit tee, Rep. Valerie Longhurst , to express opposi tion . Bill Silut1 is Choinn,m of the Board oJ the Delaware Hotel a11d Lodgi119 Association. Share This Post w f 3• in 9 Q https ://www.delawarebusi nesstimes .com/viewpoint-the-case-agai nst-the-lodgi ng-tax/ 1 /3

7/9/2019 Bill Silva on the downside of the lodging tax - Delaware Business Times Join our newsleller hst now Jimmy \'aim named ~lortgage lender Residential huilding Chief Justice Leo Strine brev. mdstt>r at Thompson Guaranteed Rate open~ permits spike in Ct·cil confirms fall 1 t'tirement Island llrc'wing Company Delaware office in Nev. ark County DBT4@ DEUWARE WSINESSTIMES E','f\i'"·!i Post Comment Comment NOMINATE ALEADER UNDER 40! A Namr •· l!I Email* % Website NOMINATE HERE l) S •e all Recent News Suhsrdht'J ~t·n·1ct>c., I Ach1·rt1.st• \\ith l "r; \ i\bout ti-;• C'ont .1c t l..,, \<•wr; \o\\ I IJ1git.1 l I'<ltf"ion https://www.delawarebusinesstimes.com/viewpoint-the-case-against-the-lodging-tax/ 2/3

7/9/2019 9111 Silva on the downside or the lodging la)( - Delaware Business Times Join our newsletter l•S! no~' x hltps:/lwww.delawarebus1nesshmes.com/viewpo1nt-the-case-aga1nst-the-lodg1ng-tax/ 313

7/9/2019 Top 1 0 cities with the highest travel taxes I Fortune ATTACHMENT #10 Council Committee of the Whole Meeting of 07/09/2019 Tourists take pictures in Boston's Beacon Hill neighborhood. Photograph by Getty Images Don't look now, but taxes on travel are rising. In some cities, visitors shoulder tax burdens that can add 30% to the cost of a trip, and the number is expected to continue to rise, according to a new study by the National Center for Policy Analysis (NCPA). Although many states have anti-tax sentiment, taxes on travel - including hotel occupancy and rental car fees - are an increasingly popular way to add to state coffers. Mississippj just passed legislation will allow cities to increase their occupancy and rental car taxes. And Georgia ado ted a law to assess a $5 a night room tax.to pay for repairing crumbling infrastructure, it noted. "States and cities raise travel taxes because they are looking for more revenue without raising the taxes that the local electorates hate - sales taxes and property taxes," says NCPA Senior Fellow Pam Villarreal. "It is much easier to tax out-of-towners that are not using city and state services year round and don't have as much skin in the game." Top city for travel taxes https://fortune .com/2015/08/03/travel-taxes-summer-vacation/ 2/12

7/9/2019 Top 10 cities with the highest travel taxes I Fortune ot .l<.oses pays $2:2 a day m taxes, the research tound . it's closely tallowed by Hoston ($19) and Indiana polis ($18). And the lowest areas? That would be Burbank, Calif. ($2), Orange County, Calif. ($3), and Ontario, Calif. ($4). Fees tacked on to airport car rentals and hotels are the main culprits, says Jacob Kohlhepp, a research associate with NCPA. "Renting cars and hotel rooms near the airport is expensive due to extra fees levied by the airport authority," he says. "Travelers should consider renting a car at a location farther away from the airport." Specifically: • Abou 22 states levy a_specific statewide tax onJodging, ranging from as low as 3% to as high as 13% of the price o~ a night's stay at a hotel 01~~otel. • At last count, 38 states levied a car rental tax. But the tax burden is often higher when the car is rented at an airport, where a surcharge is added by the loeal airp0rt authority. • Taken together, airline taxes can amount to a 30% surcharge on some domestic flights. They include a 7.5% excise tax on every ticket purchased, a segment tax of $3. 70 charged per takeoff and landing, and a "September 11 Security Fee," which last year doubled from $2.50 to $5.60 per leg of each flight. SHOP THIS NOW i.ltIJMMER, https://fortune .com/20 15/08/03/travel-taxes-su mmer-vacation/ 3/ 12

7/9/2019 Top 10 cities with the highest travel taxes I Fortune Cities like New York and Washington are easily explained, says Kohlhepp. "No other place in the continental United States has the same monuments and history as Washington, D.C., and no other city has the same iconic attractions as New York," he says. "New York City and D.C. are centers of business and politics. Due to this competitive advantage, they can tax tourists more without fear that tourism will decline so much as to offset the hoped-for increase in revenue." Others, not so much. In Portland, traveleTS have to deal with steep hotel occupancy taxes that are charged by both the city (6 percent) and the county (5.5 percent). These, plus a 2 percent tax paid by the hotels themselves means that hotels and travelers share 3.5 percent effective tax rate, according to the study. Rental car taxes are also 17 ercent. "The only saving grace of the city is the lack of a sales tax; says ohlhepp. https://fortune.com/2015/08/03/travel-taxes-summer-vacation/ 4/12

7/9/2019 Top 10 cities with the highest travel taxes I Fortune The cities with low travel taxes benefit The study doesn't cite reasons for the low taxes, but there are obvious benefits. Burbank, for example, is a favorite Southern California airport for frequent travelers, and its numbers have been on the rise, thanks in part to lower travel taxes. Four Florida destinations - Tampa, Fort Lauderdale, Fort Myers and West Palm Beach - also made the low-tax list, which may explain why they're so attractive to travelers, says Kohlhepp. The National Center for Policy Analysis study echoes a 2013 study by the GBTA Foundation, the education and research arm of the Global Business Travel Association which, not surprisingly, found that travel taxes were out of control. High travel taxes remain a huge concern for large corporations and specifically the executives who manage their travel _] _ _ _ _ _ _ .£... ___ _ __ &. _ ___ .J __ , ___ -----..&...! ---·- https ://fortune .com/2015/08/03/travel-taxes-summer-vacation/ 5/12