As vetting of Steamboat lodging tax proposals nears end, public vote becomes more likely
March 10, 2013
Steamboat Springs — As the quest to identify a new use for Steamboat Springs’ lodging tax edges closer to an end this month with the vetting of eight final applications, it’s now more likely the process will conclude with a public vote.
At a Steamboat Springs City Council meeting last week, City Attorney Tony Lettunich confirmed an election would be required to commit the revenue stream to a project for an extended number of years or to finance any project through bonds.
A scan of the remaining applications for the lodging tax reveals that a majority, if not all of the applications, fall under one or both of those requirements.
Old Town Hot Springs, for example, is requesting $300,000 annually in lodging tax revenue for 10 years to help fund a major expansion project.
Lettunich said to bind future councils to whatever project or projects the current council chooses to fund with the lodging tax, voters here must either approve a TABOR question allocating the funds or vote to approve bonds to fund the projects.
Without a binding vote, Lettunich said applicants could be leery of beginning their long-term projects without the assurance that the funds could not be cut off by a future council.
The 1 percent lodging tax typically generates $600,000 to $800,000 each year and currently is being used to pay off the debt on the construction of the Haymaker Golf Course.
The money will be freed up from that use next year.
The city needed voter approval to allocate the lodging tax, also referred to as the accommodations tax, to Haymaker Golf Course bonds in the ’90s. The measure failed the first time it was on the ballot but passed in its second effort.
Lettunich also confirmed last week that the public tax revenue could be awarded to a private corporation or a nonprofit as long as it is "for a valid public purpose."
Like the Old Town Hot Springs, almost all of the current applicants for the tax are seeking funding for a period of more than five years.
Friends of the Chief is requesting $150,000 for 20 years to transform the historic downtown theater into a performing arts center; Friends of the Yampa is requesting $50,000 to $100,000 annually to help support major improvement projects on the Yampa River; the Haymaker Golf Committee is requesting $190,000 per year for at least five years to grow its capital improvements budget; the Downtown Revitalization Committee is requesting $400,000 annually for 20 years to build a Yampa River Park and a promenade along Yampa Street; and the city of Steamboat Springs has a request out for nearly $1.5 million to help purchase six open space parcels to be used by residents and tourists.
The Steamboat Springs Trail Alliance included a number of budgeting scenarios for their plan to build 46 new biking and multi-use trail segments and connections.
A conservative scenario has them requesting an increasing amount of lodging tax revenue throughout seven years, starting with $8,242 in Year 1 and $75,295 in Year 7.
Many of the applicants plan to leverage other funding sources such as grants and private donations for the projects.
To bypass the need for an election, the council could choose to let the lodging tax revenue accrue throughout a number of years and pay for a project all at once.
Lodging tax committee member Scott Marr said Sunday that the potential of a public vote won’t affect how he vets the remaining eight applications.
"I think our task is not to figure out the bonding or (whether the project needs to got to a vote), but to pick the best projects that are going to promote tourism," he said.
The potential financing of each project is likely to become clearer on March 20 and 21 when the eight finalists are interviewed by Marr and the other members of the lodging tax committee during public hearings.
To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com