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College Park Officials Detail Benefits of Hotel-Motel Tax Collection Program

Near the Hartsfield-Jackson International Airport, you’ll find College Park—and a lot of hotels and mo­tels. Thirty-three, to be exact. The number of hotels and motels has grown over the past few decades as the world’s busiest airport brings in millions of pas­sengers per year. And as the number of lodging pro­viders grew, the city of College Park’s staff found it difficult to keep up with its hotel-motel tax collection, delinquent payments and ongoing lodging provider problems.
 
Suspecting that their revenue collection was incon­sistent and a bit “topsy-turvy,” City Manager Terrence Moore, Interim Director of Finance and Accounting Nina Mallard and City Clerk Melissa Brooks all shared their financial and operational concerns with the mayor and city council. Everyone agreed: Use GMA’s hotel-motel tax recovery program to help with tax collection, follow-up and education for all 33 lodging providers.
 
The result? An increase of $231,000 in annual rev­enue between July 2013 and July 2014. Plus, the city benefited from streamlining its hotel-motel tax collec­tion process and relieving the city clerk’s staff from the day-to-day burdens of handling lodging provider payments.
 
In this City to City interview, Moore, Mallard and Brooks talked to GMA about what drove them to ad­dress their hotel-motel tax collection problems, how they made the case to city council, and why cities need to address revenue collection issues sooner rath­er than later.
 
Pictured (L-R) College Parks’ Nina Mallard, Terrence Moore and Melissa Brooks enjoy the benefits of GMA’s Hotel/Motel Tax Recovery program.
What made you decide to take a look at your city’s hotel-motel tax collection process?
Moore: In early 2013, I came on board as College Park’s city manager. During my first couple of months, Melissa told me about some concerns she had about inconsistencies in our hotel-motel tax collection pro­cess. I, too, observed that our revenue collection ef­forts for hotel-motel taxes were rather hit or miss. Several lodging providers were consistent and paid us on time, but several had issues paying us in a timely fashion. We conducted an informal sample and statis­tical analysis to back up our observations. When we reached out to GMA regarding the hotel-motel tax program, we brought our concerns to light. They came out speak to our city council, added to our observa­tions, and helped us convince our city council to act.
Mallard: Another reason we needed to address this hotel-motel tax collection issue was because of the growth in the number of hotels in our city. At 33 ho­tels and motels, our staffing did not grow along with that number. More lodging providers overwhelmed our staff and it was harder and harder for us to deal with collections, delinquencies and related problems.
 
As you made your case before the city council, how did you persuade them to prioritize this issue?
Moore: We easily convinced the mayor and city council that investing in GMA’s program would be a good opportunity. We talked about our statistical and financial concerns, and we identified a number of de­ficient hotels and motels. After including some trend analysis, we also indicated that our city’s revenue col­lection was off-center. The numbers and revenue con­cerns made it an easy decision for the city council.
 
Some cities worry that taking action to recover unpaid hotel-motel taxes might upset the local business community. How did you overcome that challenge?
Brooks: We never worried about that. We have a good relationship with our lodging providers. Most of them spend a lot of money on their properties, and they want the city of College Park to enforce and col­lect taxes. Plus, we kept them in the loop, telling them far in advance what we planned on implementing. Nearly everyone was fine with it and they understood why we moved toward GMA’s system.
Moore: Generally speaking, the business commu­nity understands that we need to do what’s appropri­ate to collect our revenue sources. That way, we re­main not only a healthy community but also a healthy government organization that is financially solvent in every way. Plus, the business community understands that more efficiency in our day-to-day operations ulti­mately helps them.
Mallard: The hotel and motel managers partici­pated in an information session where they had the opportunity to ask questions. College Park and GMA provided information to the lodging providers that clearly and transparently detailed what the program involved. Providing the lodging providers that oppor­tunity to meet made the transition more palatable so they could actually embrace it. And at this informa­tional meeting, 27 out of 33 hotels participated. That’s a high participation rate.
 
What results did you see from GMA’s service?
Moore: For revenue collection, our hotel-motel tax revenue in July 2012 was $621,845. In July 2013, it was slightly higher than that at $639,064. We proceeded with GMA’s program in August 2013. In July 2014, we collected $870,000. That’s a $231,000 increase in revenue as a result of our participation in GMA’s hotel-motel tax recovery program. That’s a very mea­sureable ROI, and a positive indicator that we made a good decision. Needless to say, we look forward to our continued participation in this program.
Mallard: From an accounting perspective, our monthly cash flow improved tremendously. We now feel more confident the money is regularly coming in every month.
Brooks: My staff is now able to focus on other im­portant issues in the office. Having GMA take care of this hotel-motel tax collection freed up a lot of time. We don’t have to spend time acting like a collection agency. Plus, GMA’s reporting functionality keeps us up-to-date. I look forward every month to getting the reports from GMA. We can also use the online system to quickly see who is reporting and if they’ve gone up or down. We still involve ourselves somewhat in the reporting, but GMA’s reports free up a great amount of time and take the stress off of us of having to won­der if our numbers are correct.
Mallard: Plus, when you have a hotel manager coming to your office who is struggling to pay their tax, they often put pressure on staff members to waive penalties and interest. It’s very difficult for a staff member to make those decisions on the spot, and so GMA takes our staff out of the middle. That promotes goodwill because now our employees don’t have to deal with those issues. It seems fairer to lodg­ing providers when our city staff doesn’t feel forced to make arbitrary decisions about who gets a break and who doesn’t.
Moore: GMA’s service helped our city operations a great deal. We look at GMA as an extension of our staff, and we can focus more on higher priority activities.
 
For other cities that might be in similar situa­tions, what advice would you give them about addressing their hotel-motel tax situation?
Moore: Consider our experience and results. Com­pare our revenue collection between July 2012 and July 2014. At our city, addressing problems with hotel-motel tax collection got the attention of the city man­ager, mayor, city council, director of finance and city clerk because it impacted revenue. Given our success and experiences so far with GMA’s program, I think the results speak for themselves.
Mallard: The longer that cities delay in implement­ing a program like GMA’s that streamlines collections and improves your revenue base, that’s money lost. If you see a revenue collection problem, look for a solu­tion as quickly as possible.
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For more information on GMA's Hotel and Motel Tax Recovery service, you can contact:
 
WHY GMA?
With our many decades of experience working with cities, GMA quickly helps improve your tax administration and establish compliance between you and your city’s hotel and motel operators. Our process ensures that you receive your hotel and motel tax revenue every month like clockwork – without you worrying about collecting it.