Local Marketing District comes under scrutiny in wake of sales tax

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Past Event

Local Marketing District board meeting

  • Tuesday, February 7, 2012, 1 p.m.
  • Centennial Hall, 124 10th St., Steamboat Springs
  • All ages / Free

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Past Event

Local Marketing District board meeting

  • Friday, March 16, 2012, 9:30 a.m.
  • Centennial Hall, 124 10th St., Steamboat Springs
  • All ages / Free

More

Past Event

Local Marketing District board meeting

  • Friday, May 18, 2012, 9:30 a.m.
  • Centennial Hall, 124 10th St., Steamboat Springs
  • All ages / Free

More

Past Event

Local Marketing District board meeting

  • Friday, July 20, 2012, 9:30 a.m.
  • Centennial Hall, 124 10th St., Steamboat Springs
  • All ages / Free

More

— The board of the Local Marketing District, which makes decisions about how to spend public and private funds used to secure commercial airline service into Yampa Valley Regional Airport, began a new era Friday by promising increased transparency and public outreach.

LMD board member Chuck Porter said the group’s move to City Council chambers in Centennial Hall at the city’s request signaled the change. New public interest in the affairs of the LMD and how it works with the airlines is coming to the forefront this year as the city begins collecting a 0.25 percent general sales tax approved by voters in November. The tax, estimated to generate $1.3 million annually, was sold to voters as a way to maintain and even build passenger capacity on ski-season flights into and out of YVRA.

“This is a true partnership, and we encourage you to attend,” Porter told the audience at Friday’s meeting. “We may be required to go into executive session at times because there are contracts that have to be discussed with some confidentiality. But we intend to operate with as much transparency as possible.”

A handful of the dozen or so members of the public who showed up at Centennial Hall on Friday had specific points to make during the public comment portion of the meeting.

The LMD will advertise a special public meeting on Feb. 7 to consider a replacement for board member Bob Milne, who resigned after leaving the valley to take a new job. Mark Scully wasted little time standing up and expressing his interest in the opening on the board and added that he thinks the board needs to go further in presenting information to the public.

“I support this very much,” Scully said. “The public/private collaboration is critical. I’d like to know, where is the money coming from and where is it going, and what is it really translating into? It’s a lot of money. To me, the key is a scorecard. To me, it seems there should be a website.”

Ken Solomon asked that the LMD board consider broadening membership to represent the entire city.

“You’re receiving 50 percent of your (public) revenues from the new tax, and my understanding is there are only 600 eligible voters who live in the LMD out of about 8,000 voters in the city,” Solomon said. “It strikes me as unfair.”

LMD legal counsel Tom Sharp told Solomon that the requirement that members of the board be registered voters who live within the boundaries of the local marketing district is decreed by state statute and that the LMD has no power to change it. He added that when the LMD was created by City Council, it had the option to make itself the board of the LMD or to create the five-member board of LMD voters.

Steamboat businessman Steve Hitchcock told the board he thinks the LMD should pursue additional air service outside the ski season.

“With the new tax coming on and collected by businesses outside the LMD, I’d like to see the LMD take on the task of summer air,” Hitchcock said.

Porter replied that summer air service is on the LMD board’s agenda. Porter added that the revenues from the new tax will first be applied for the 2012-13 ski season.

At the city’s urging, public meeting notices for the LMD board now will be posted outside City Hall, at City Market and at the post office, as well as in a vestibule outside the Chamber’s offices at 125 Anglers Drive.

To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com

Comments

mavis 2 years, 3 months ago

A partnership that doesn't represent the entire city??? Has reprucissions for the ENTIRE county... and gets to go to executive session while claiming to be transparent????? WOW..Come on people DEMAND accountaility from the government it's YOUR money they are spending.

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Stephen Evans 2 years, 3 months ago

Other communities do not use tax money to promote tourism. Isn't it the job of the chamber of commerce and the buisness members Since they are the ones to benifit financially? Using tax dollars to Promote private buisness without representation or accountability IS WRONG !!!!!

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Ed Miklus 2 years, 3 months ago

It is interesting to note that the law of unintended consequences is at work subsequent to the passage of the quarter percent sales tax increase. Now, every citizen in the City of Steamboat Springs has "standing" as it relates to the LMD. Although not everyone can be on the board, everyone can attend their meetins, speak their opinions and use the Colorado Open Public Records Act to obtain information; there are some folks involved with the LMD that are uncomfortable with this. Citizens should use the tools available to them, albeit imperfect, to hold all involved with the LMD (Council, LMD Board & Ski Corp) accountable for our money.

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Scott Wedel 2 years, 3 months ago

BTW, it is my understanding that they do not have to go into closed sessions when discussing contracts. It is their option. For negotiating a contract then it makes sense that their negotiating strategy is not revealed to the other party.

But there is far less justification of why a negotiated contract should remain secret.

And I do not understand the legal structure that allows city sales tax to be collected for the entire city and distributed to a marketing district that contains a small part of the city's population and only residents of the marketing district may serve on it's board.

Oh well, as I predicted prior to the election - the LMD board lacks the public accountability that is needed when receiving tax dollars.

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Steve Lewis 2 years, 3 months ago

Chuck Porter, Thanks for the coming transparency. This is the right first step. My only complaint there would be that you should meet the standards of Public Notice that the city boards do, i.e. publish 2 weeks in advance and in the newspaper. If you sincerely want people to attend, why insist they first drive somewhere just to view your meeting schedule?

Ken Solomon's comment of taxation without representation is a serious challenge. Cure it and you will have significantly mitigated the hurdle you face in 5 years. Ignore it and this community will once again face an uncertain vote, and thereby revisit the economic hazard this airline subsidy bubble represents.

The city tax is set for 5 years. The LMD can dissolve, recreate itself anew and give City Council the option to make itself the board of the LMD or to create the five-member board of LMD voters.

You can resolve the flawed representation. Please do so.

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Steve Lewis 2 years, 3 months ago

Better, the LMD can keep its board, but demur itself and its rules to join a larger body whose votes it will honor, and whose members will be part of every executive session.

Mark Scully would be good on this larger board, but if a majority of this board are also real estate entities the airline program will tend to serve their real estate interests unfairly. As much as we all benefit from it, without question this air program is a steroid for real estate values and sales, could be manipulated for short-term real estate gains rather than long-term economic stability.

The larger board should have a majority of long term stakeholders such as Tom Sullivan and Jon Roberts.

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Scott Wedel 2 years, 3 months ago

Well, one could say the writing is on the wall for the LMD that renewing the sales tax in 5 years will be a far tougher election than the one they just had.

The tax advisory board gathered economic data showing location neutral businesses are now as big a part of the economy as tourism. And yet Chamber, City Council and this LMD all act as if the local economy was entirely tourism and LNBs did not exist. I think over the next 5 years that is likely to change and there will be a greater focus on providing amenities that benefit locals and LNBs as compared to exclusively benefiting tourism.

The outrageous campaign claims for the sales tax will be proven false. There will not be an additional 40,000 tourists per year as claimed by the head of the Chamber. In 5 years they will have to demonstrate the program has worked.

A city wide sales tax to subsidize skier vacation packages benefits too small of a slice of the local population to retain popular support. The LMD will have to recognize that the situation of that election, during economic slow times and a campaign of fear and lies will not work again. They will have to demonstrate an effective program that benefits everyone from LNBs, locals and tourism.

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exduffer 2 years, 3 months ago

I wonder how the tax advisory board explained why LNBs only seem to spend money during the same months as tourists?

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Scott Wedel 2 years, 3 months ago

November, which is hardly a big tourism month (how many flights in November), just reported sales tax revenues of over $1M. Hardly a situation of no spending. And considering that August, often considered a summer tourism month, also did $1M as did October and so on, then the opposite question can be asked: where is the sales tax for summer tourism? And considering that Jan-March is about $3M more total than 3 nontourism months, then we sure give a lot of attention for what is closer to 20% of sales tax revenues.

Considering what is spent for that modest additional sales tax revenues then it raises the question whether all the efforts to promote tourism is a money losing endeavor. Certainly, even if we spent nothing on promoting tourism then there would still be some tourism. So it would appear to be a valid concern that the city is spending more to bring tourism to town than it gets in sales tax from tourism.

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exduffer 2 years, 3 months ago

SW there is a big difference between $1.4 million(August) and $1.0 million(November) comparing . Please take a look at the graph on the last page and tell me that tourism does not matter. http://www.steamboatsprings.net/sites/default/files/2011/11/01/FinalNovember_11_SalesTax.pdf

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Scott Wedel 2 years, 3 months ago

Oops, I misread that August sales tax number and summer tourism sees about a 40% increase over nontourism months.

Though, still from the 10 year chart we have winter tourism increasing about 10% over the past 10 years while nontourism months have increased about 30%. Certainly evidence that LNBs are locally growing much faster than winter tourism. And yet LMD, Chamber and City Council spend far more on winter tourism than issues for LNBs.

And you suggested that you think that LNBs only spend money during the same months as tourists are here. No, the greater increase in revenues for nontourism months could be LNBs spending money which they spend year round. So actually most of the increase over the past 10 years for Dec-Mar can be explained by increased spending by LNBs and locals while tourism has only slightly increased. The number of occupied winter seats over the past 10 years also suggests that winter tourism has seen very modest gains.

And LNBs have similar reasons to be here during tourism months and take vacations other times. So yes they will be paying more sales tax in January than April because they may also take an April vacation.

Not that tourism doesn't matter, but there is all sort of evidence that other parts of the local economy is growing faster than tourism. And it isn't the housing sector.

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