The Steamboat Springs City Council spent the last hour-and-a-half of its Tuesday work session on fiscal sustainability, continuing conversations on a potential vacancy tax and a potential lift tax to generate more city revenue. 

City Attorney Dan Foote gave a presentation on the potential vacancy tax, which was also discussed in the city’s Feb. 11 work session. 

Vacant homes require some basic level of service but do not generate the same sales tax revenue as an occupied home, said Foote, since nobody is there. The empty units, then, “are not covering the cost for the service” the city provides, and a vacancy tax would address this deficit.

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The purpose of the vacancy tax would be either regulatory or revenue-based. If it were regulatory, Foote explained, it would disincentivize vacancy and encourage long-term rental/owner occupancy, and the revenue would likely be used for housing. If it were revenue-based, it would eliminate inequities in the tax system, could be unrestricted and as a result could “address impacts to the general fund.” 

In what Foote termed “very preliminary numbers,” the fiscal impact of vacant homes in Steamboat, based on the 2025 budget, is estimated at $6.5 million. The tax base is projected to be 1,250-3,250 empty units, which Foote acknowledged is a “big range.” 

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Using the mid-range of the tax-base estimate — 2,250 units — Foote and Finance Director Kim Weber arrived at a $3,000 flat rate to offset the impact of the $6.5 million. Applying that rate to the tax-base estimate would generate $4.25-$9.75 million annually, assuming 100% compliance. 

“I think even people who are motivated and agree with it are probably going to struggle with it a little bit in the first couple of years,” Foote said. “So I think we have to assume that there is going to be some degree of noncompliance.” 

“I just want to say that I think it’s very wise and fiscally responsible for council to be looking at both the vacancy tax and the potential lift tax,” said local resident Diane Brower during the public comment period. “You’ve been talking about diversifying revenue streams for quite some time … and I think these taxes make so much sense. You really need to be taxing the sources of impact on our community, on our city, not so much on the residents who live here.”

After public comment concluded, council agreed to proceed with continuing discussions about a possible vacancy tax. All agreed that its purpose should be to generate revenue for the general fund, rather than being regulatory. Council also decided to table issues regarding the terminology of the tax and the stipulation of occupancy for short-term rentals for future work sessions. 

Weber then gave a presentation on the lift tax, explaining three possible assessment methods if it were to proceed:

• Breckenridge model: tax assessed on daily and multi-day passes, excluding seasonal and multi-resort passes
• Vail model: tax assessed on all ticket and pass sales, including multi-resort passes 
• Snowmass Village model: contribution assessed on skier days

Weber also mentioned the various restriction options of the lift-tax revenue. According to the 2025 budget, the city generated $6.4 million in sales-tax subsidies for transit. Lift-tax revenue could be put toward the current service level of $6.4 million, be restricted to use for expanded service, or be used for some combination of the two. It could also be used for parking — Breckenridge, said Weber, has parking and transit tied together in its lift-tax model. 

David Hunter, Steamboat Resort president and chief operating officer, addressed council during the public comment period.

“We have long stated that we support a lift-ticket tax, as long as it’s designated specifically to innovative transportation, and you have heard us voice that by committing to a lift-ticket tax to fund the RTA,” he said, referring to the recent proposed formation of a Regional Transit Authority. 

“We have shown this commitment through the RTA process both with financial and capacity support. We do not support a lift-ticket tax that goes to the general fund, as it’s not guaranteed to go to transportation. Even though the voluntary tax agreement specifically earmarks collected taxes to go to transportation, the city designates this as donations, and therefore they are not counted or, as far as we know, don’t go to transportation … We look forward to working with the city as partners as we work through the process to discuss how we continue to support SST (Steamboat Springs Transit), without jeopardizing the RTA.”

Council agreed that, should the lift tax proceed as a ballot measure, it should be assessed through all ticket sales. There was disagreement among council regarding whether the revenue should be restricted for a specific use, and what that use should be. Council members agreed to revisit the matter in upcoming work sessions. 

During council’s March 4 meeting, newly appointed City Manager Tom Leeson said that he, Weber and Public Works Director Jon Snyder met with Ski Corp. representatives, including Hunter, for the first time on March 3 to discuss the possible lift tax. Leeson established with Ski Corp. representatives that the city is using a parallel approach: an actual lift tax to be decided on by voters, and a negotiation with Ski Corp. to see if an agreement can be made.

The city and Ski Corp. agreed to meet twice monthly between now and August, with August being the tentative deadline, as ballot language must be certified in advance of a November election, should the city decide to move forward with a measure. The meetings would include a neutral facilitator. 

“How do we manage transparency in this? We are entering negotiations with an individual who’s trying to dictate how a tax dollar is spent — realistically, in their best interest,” said Councilor Bryan Swintek. “So how do we make sure the public is aware that we are operating in their best interest as well?”

Leeson clarified that he intends to provide regular, timely updates from the bimonthly meetings with Ski Corp. to council to ensure communication and clarity about the process. 

The two groups also agreed that the negotiating team should include two members from council, added Leeson. He asked who among the councilors would be interested in being a representative. 

“I am not interested,” said Councilor Steve Muntean. “I’ve done a lot of work with Ski Corp. over the years, so I do not think that is appropriate.” 

Swintek voiced his enthusiasm for being one of the representatives. Councilor Joella West initially met the volunteerism with apprehension. 

“Bryan, I worry about you being on it, because you have a very well-defined opinion of where we start …you’ve been very upfront about that … it kind of needs to be a smart but neutral room. Can you do that?” asked West.

“In order for me to become a Joella one day, I need the opportunity to learn. So I will do my best,” Swintek responded.

Swintek last month said he “disagreed vehemently” with restricting lift tax revenue. He advocated to direct it to the city’s general fund. Councilor Amy Dickson was supportive of Swintek representing the city, mentioning that she shares similar views with him on the lift tax. City Council President Gail Garey agreed with the idea of West and Swintek being the two representatives. 

“With any luck at all, there’s no expectation in this room right now that we will walk into those meetings with Ski Corp. and already have in our minds exactly what we expect to walk out with, or a feeling that we are obligated to walk out with that particular thing,” said West. “It’s a blank sheet of paper, not a sheet of paper with the conclusions already written on it. That’s what we had when we walked into the room for Brown Ranch. And we won’t do that again, or at least, I won’t.” 

With the negotiating team finalized, discussions between the city and Ski Corp. are set to begin March 24.