Steamboat Springs City Council has new plan for how to spend lodging tax
July 16, 2013
Steamboat Springs — Worried that voters here wouldn’t get behind its initial proposal to bond and tie up the lodging tax for 20 years, the Steamboat Springs City Council on Tuesday night settled on a new plan for how to spend the tax revenue.
The council now wants to ask voters to approve the distribution of the tax for only the next decade on the hiking and biking trails as well as the Yampa River promenade.
Under the new proposal, the tax revenue would be split evenly between the trails and the downtown amenity until the promenade received $900,000, likely after three years.
Then, the remainder of the funds up to $600,000 each year would be used to build the trail projects.
If the tax generates more than $600,000, as much as $60,000 would be split evenly between the marketing of the new amenities and capital improvements at Haymaker Golf Course.
Finally, any additional excess revenue would be collected and spent at the City Council’s discretion.
The proposal would not involve any bonding.
"I think it’s a wise move and easier to sell at the polls," council member Scott Myller said before he voted for the new ballot language.
For much of the night, the new plan for the lodging tax dollars seemed elusive for the council until several members resolved to take action.
The council also faced a looming deadline to get a ballot question certified for the fall election.
Council member Kenny Reisman compared the body’s recent deliberations about how to split the tax revenue as “trying to fit a rope through a needle.”
The evening started with members of the Steamboat Springs Trails Alliance urging the council to not bond the tax revenue as originally proposed.
Trail designer Aryeh Copa said the 20-year commitment could doom the group’s proposal.
"All of these trails cannot be built at one time and in one summer," he said. "We would rather take our chances with year-to-year funding. By not bonding, we also greatly increase our chances for grants."
Reisman said bonding would be fiscally irresponsible, and then he asked the council to accept the recommendation that he and the five other members of the lodging tax committee made to spend 90 percent of the revenue on the trails projects for the next decade, and none of it on Yampa Street.
He added the promenade has other funding opportunities outside of the tax that he thought would be more appropriate.
But Reisman’s motion did not gain any traction.
Before the new ballot language passed on first reading, Reisman also questioned what the planners of the promenade could accomplish with $900,000, an amount that is less than half of the projected cost of the project.
Council member Cari Hermacinski said the transfer of development rights off the street could generate at least $1 million for the project, and a funded business improvement district could help generate the rest.
Reisman wasn’t the only council member to have a proposal fizzle Tuesday.
Council President Bart Kounovsky’s plan to use bonding as a way to get the projects done more quickly also ended up receiving no other support on the dais.
He said the interest payments on the debt throughout 20 years could be offset by the Trails Alliance’s projections that the new trails would generate millions of dollars’ worth of additional tourism spending.
After much discussion, the council arrived at the new ballot language they predicted would fare better at the ballot box in November because it provides funding for both proposals.
"If one is lopsided, they’re going to fail," council member Kevin Kaminski said. "We need them to go out there and (campaign) on the streets together."
But Kaminski was the only council member to end up voting against the proposed ballot language.
He said before the vote that the groups were close to reaching the best compromise, and he wanted to spend more time discussing how to maximize the financial opportunities for both projects.
The council will weigh the second reading of the new ballot language Aug. 6.