Steamboat takes swing at accommodations tax discussions
Haymaker Golf Course, Emerald land among possibilities for revenue
March 13, 2011
At a glance
On Nov. 4, 1986, Steamboat Springs residents approved an accommodations tax devoted to tourism-related amenities. The tax won 71 percent of the vote, with 1,362 in favor and 564 opposed.
Throughout the years, the tax has provided funding for a Strings Music Festival tent, the Tennis Center at Steamboat Springs and Haymaker Golf Course. The Haymaker use expires in 2013, leaving future use of the revenues open for debate.
The 1986 ballot question asked:
“Shall the City Council of Steamboat Springs, in order to provide revenues to fund development of improvements and amenities in Steamboat Springs which will promote tourism and enhance the vitality of Steamboat Springs as a premiere (sic) destination resort, and enhance the community identity, environmental desirability and economic health of Steamboat Springs, enact an ordinance levying a lodging tax of 1 percent on public accommodations of less than 30 days?”
Steamboat Springs — Revenues that will be available in 2014 already are whetting the appetites of several local entities — including a public golf course, an ice rink committee and a cycling advocacy group, for example — and all could get a slice of the pie.
But each could go hungry, too.
The city's accommodations tax, approved by voters in 1986 and long dedicated solely to bond debt associated with Haymaker Golf Course, will have available unallocated revenues in three years. The Haymaker allocation officially sunsets in 2013, but because tax revenues from that year will be needed to complete the debt payments, the tax pie won't be on the table until 2014.
It's been long awaited.
"I think people have been looking at this stream of income since I've been on City Council, and that was 2007," Steamboat Springs City Council President Cari Hermacinski said this month.
The tax generated $651,000 in 2009 and just more than $600,000 in 2010, according to the city's Haymaker budget records. The revenues are budgeted for $527,000 this year. Hermacinski said revenues have approached $800,000 in years when the economy has been stronger.
"It's a big chunk of change," she said.
The City Council is scheduled to begin public discussion of future accommodations tax uses at its April 5 meeting in Centennial Hall. City Finance Director Deb Hinsvark said last week that cutting future revenues into several slices, rather than allocating the whole pie at once, could be the best strategy going forward.
"I am recommending that we not bond again because when we bond, every penny that comes in is spoken for and there's no other options for the community," Hinsvark said. "I think pay-as-you-go projects make more sense right now."
There are plenty of those.
Capital needs at Haymaker and a second sheet of ice at Howelsen Ice Arena, for example. Or payback of the city's pending purchase of 586 acres on Emerald Mountain.
Sandy Evans Hall, executive vice president of the Steamboat Springs Chamber Resort Association, said the Chamber board has talked about using the tax for cycling tourism infrastructure through the Bike Town USA Initiative or for the region's airline service program.
The 1 percent accommodations tax is separate from the 2 percent lodging tax for the local marketing district, which funds the airline program.
Hinsvark said that although City Council could, theoretically, not decide on accommodations tax spending until 2013, when setting the 2014 budget, having the conversation in 2011 can help local groups and the city plan for what's to come.
Hedging their bets
Given the well-known amount of interest, people talk cautiously about potential uses of the accommodations tax.
"We are currently in discussions — and I want to emphasize discussions — about a second sheet of ice," said Steve Dawes, chairman of the city's ice rink advisory committee. "We're discussing whether it might be eligible for (Great Outdoors Colorado) funding and whether we could raise money privately because we are not sure about trying to use the accommodations tax when it becomes available."
Dawes knows the accommodations tax well — he was chairman of the lodging committee when the tax passed in 1986.
He also was chairman of a committee that explored the creation of a public golf course in Steamboat in the mid-'90s.
That course became Haymaker. Voter approval was required to allocate the accommodations tax to Haymaker bonds. The measure failed one year and then passed in its second effort, in the '90s.
Hermacinski expressed support for designating at least some accommodations tax revenues for future capital needs at the golf course.
"I think it's responsible to build up a little reserve to pay for the capital that will be necessary," Hermacinski said, citing the city's investment in its public course.
John Vanderbloemen, chairman of the Haymaker Golf Management Committee, said Haymaker opened in 1997 and its current irrigation system is about 14 years old.
"One of the major long-term capital needs that you have to plan for is (the) irrigation system," he said last week. "Is it imminent? Not at all. But it is something you have to plan for."
Like Dawes, he spoke cautiously about the cash.
"It may be logical that … some portion of the future revenues might be allocated toward Haymaker, to make sure Haymaker remains healthy and in good condition, like any city asset," Vanderbloemen said.
Hinsvark said Haymaker has an operational reserve of about $1.4 million. Vanderbloemen said that although the golf course has been profitable from an operational standpoint of day-to-day costs and revenues, long-term capital projects will require an additional funding source.
Hinsvark said the accommodations tax has a balance of nearly $1.4 million — from tax revenues exceeding Haymaker debt payments — that will be needed in 2013.
A balloon payment of nearly $1.5 million is scheduled for the end of the Haymaker debt service in that year. Because that debt is due by the end of the first quarter in 2013, the city likely will have to pay more than $450,000 up front and then use accommodations tax revenues for the remainder of the year to pay itself back.
After that, Hinsvark said, accommodations tax revenues could help pay the city back for its investment of about $700,000 in a 586-acre land purchase on Emerald Mountain. A $600,000 Great Outdoors Colorado grant also will go toward the land's $1.3 million cost.
The city is scheduled to close on that purchase at 1:30 p.m. Wednesday at Heritage Title Co. in downtown Steamboat.
The Emerald parcel is related to efforts by the Bike Town USA Initiative, which, along with city officials, has identified $11 million in local cycling improvement projects and is seeking funding on numerous fronts.
City Council member Scott Myller has said he would want "complete buy-in from the lodging community" for any future use of the accommodations tax.
Evans Hall agreed.
"The lodging association would like to have some say in recommending the next project. They believe that was part of the process," she said.
Committee Chairman Larry Mashaw could not be reached last week.
Evans Hall said the lodging group could organize a process to review funding suggestions and make a recommendation to City Council "based on what they think would most enhance the visitor experience."
"I think that's the role they'd like to play and would be willing to play," she said.
All those topics and more will be on the table in upcoming discussions.
"We want as many people as possible to attend this meeting on April 5 and voice their opinion about the accommodation tax," Hermacinski said.
Vanderbloemen said that could make for fun times in Centennial Hall.
"It'll be an interesting conversation, won't it?"
— To reach Mike Lawrence, call 970-871-4233 or e-mail mlawrence@SteamboatToday.com