The Ames City Council discussed the possibility of raising taxes on hotels and motels Tuesday night in hopes of remaining competitive with neighboring cities.

A presentation given by representatives of the Ames Convention and Visitors Bureau proposed that the hotel/motel tax be raised from 5 to 7 percent in order to stay competitive in the marketplace for lodging.

“Last year, West Des Moines and Ankeny added more rooms than what Ames had to begin with,” said Julie Weeks, executive director of the visitors bureau. “Ames has an extraordinary amount of diversity in restaurants and entertainment for a town of 50,000.”

The proposal comes after Ames experienced a significant increase in visitor groups, from 17 groups in 2001 to 25 groups in 2004.

The tax is used for three purposes: 60 percent of the tax goes to the bureau’s marketing and operations, 20 percent goes to replace the local option sales tax and 20 percent is used for economic development.The 2 percentage point increase would go to new initiatives, such as online hotel and transportation booking, a reserve fund for operations and grants for local cultural and educational programs.

Councilman Steve Goodhue said the council has received grant requests in the past. Members of the visitors bureau said they hope the tax increase will take some requests off the city’s hands.

The bureau requested a public vote on the increase be held in April so collection can begin in July 2005. Members hope the new initiatives, if passed, will be put into place by January 2006 and for the grant program in January 2007.

“This gives us the opportunity to partner with Iowa State and create new markets,” Weeks said. “We want to enhance special events and activities and put in place an initiative we don’t have on the table today.”

The council also tackled the issue of public health. Ames Mayor Ted Tedesco proclaimed Tuesday be called “Not-So-Fat Tuesday,” rather than the Fat Tuesday traditionally celebrated before Mardi Gras.

The event is sponsored in conjunction with Mary Greeley Medical Center’s annual Mardi Gras Ball which supports the William R. Bliss Cancer Center.

“Wellness is the focus of the Mary Greeley Medical Center,” Tedesco said. “Ames’ goal is to celebrate healthy living.”

The council also approved the second reading of the Northeast Gateway Overlay District zoning ordinance. The overlay district is the area where a new mall and other businesses could be built. Matthew Goodman was the only council member to vote against the ordinance, which will become law if the third reading is passed at the City Council’s next meeting.

— Emily Klein and Adam Calder contributed to this article.