The proverbial fat lady is back for an encore as Salida city officials grapple with the rate at which to enact voter-approved ballot measure 2B.
During the City Council meeting on Monday night, Dec. 1, council is expected to set the rate at which a new occupational lodging tax will be enacted when it takes effect Jan. 1. On Nov. 4 voters approved 2B – 1,437 for, 1,394 against – authorizing the city to collect $4.82 per room per occupied room night from lodging properties within city limits.
Last week, a negotiating group comprised of representatives of the local lodging industry, city and the city’s Recreation Advisory Commission tentatively agreed to support lowering the rate to $2.50.
The recommendation represents the culmination of months of talks between the lodgers and the city before, during and after the election. Chief among lodgers’ complaints about 2B included their exclusion from the table as the city explored the idea of occupational lodging tax as a funding mechanism for city priorities. The lodgers also allege the additional $4.82 per room night would put Salida lodgers at competitive disadvantage with neighboring communities, and that the city’s new tax may prohibit the county from collecting its 1.9 percent lodging tax within Salida city limits. The county uses the revenues from the lodging tax, totaling some $300,000 annually, to promote tourism throughout the county. The state has not yet ruled on whether a conflict between the two taxes exists.
Deliberations have focused on the impact of 2B on what all sides acknowledge is the all-important local tourism economy. Little, if any, discussion has considered the impact of the different rates on the city’s capacity to fund improvements to recreation and cultural amenities as earmarked in the new tax.
While much of the focus of the debate over 2B has centered on the pool and its value to tourists, 2B ballot language spelled out that revenues from the occupational lodging tax were “for the purpose of funding capital improvements and operational expenses for parks and recreation and arts facilities in the city.”
While actual revenue and expenses for the year for recreation and the SteamPlant fund were not available for this writing, a look at 2008 operating budgets sheds light on the amount of money the city anticipates spending for recreation and arts.
While the SteamPlant Theater and Event Center was slated to have an operating surplus of nearly $2,500, the city’s 2008 budget anticipated net operating losses of nearly $415,000 for recreational resources. A mid-summer increase in pool pass rates is expected to lessen the anticipated $187,000 year-end operating deficit at the pool. Some $215,000 in maintenance expenses for Marvin Park and the city’s other trails and parks are offset by rental fees totaling only $10,000.
While it’s difficult to predict occupancy rates for the coming year, doing some basic math yields a ballpark guesstimate of the revenues 2B could generate. Presuming an annual average occupancy of 50 percent among the 676 lodging rooms in Salida, the new tax enacted at $2.50 could generate around $308,000; at $4.82 it could net approximately $595,000.
This summer, when Councilman Hugh Young first proposed the occupational lodging tax as part of an overall revenue enhancement plan, he wrote: “the city needs to invest at least $230,000 per year for the foreseeable future to continue to operate the aquatic center as a hot springs facility.”
Among chief complaints at the hot springs aquatic center are the cool temperature of the water and the changing rooms. The changing room wing of the pool was closed in August 2006 amid concerns the roof could collapse. Since then, changing rooms have been improvised out of rooms formerly used as private hot baths. Young’s report estimated cost to build new changing facilities would be around $2.5 million.
Repair to the hot springs line, which carries hot water five miles from its geothermal source in Poncha Springs to the pool, is expected to be paid for by funds from two sources: a recently awarded $450,000 grant from the Colorado Department of Local Affairs and a $325,000 settlement stemming from the city’s lawsuit against the engineering firm that designed the most recent update to the pipeline.
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Letter from Don Jackson: lodgers’ perspective retrospective
Didn’t the voters already decide this issue?
Lee’s correct in pointing to other “cultural amenities” that should benefit from the lodging tax increase. The Salida Museum, for example, needs a new roof after 30 years. The museum, along with its railroad engine display, is another Centennial Park attraction, perhaps not as well known as the pool, but certainly a destination for anyone interested in local history. Also, the city should anticipate that local performing arts organizations might want some of the revenue.