Council decides how to spend $2 million in accommodations tax reserves

The City of Steamboat Springs expects to have about $2 million dollars in its accommodations tax reserves by the end of the year, and the city’s staff asked City Council how that money should be spent.  

Council members were presented with five different options during their meeting on Tuesday, Oct. 11.

The first option, which staff recommended, is to dedicate the money toward unfunded capital improvement projects that match the criteria of the accommodations tax ballot question passed in 1986

The second option was to send a “call for projects” out to the community, which would allow residents, community groups and nonprofits to suggest ways to spend the money.

The third option was a grant program, would be similar to a “call for projects”, but the funds would involve a grant application process.

The fourth option was to allocate funds to more than one of the first three options and the fifth option was to do nothing and decide on where to spend the money later.

Winnie DelliQuadri, the city’s special projects and intergovernmental services manager, described the pros and cons of each option.

According to DelliQuadri, funding capital improvement projects would alleviate pressure from the city’s capital fund and general fund while putting money toward projects listed in the city’s master plans. Option one was described as the least intensive on the city staff’s capacity and workload. 

“We’d come to you with recommendations, and you could tell us what you wanted to fund,” DelliQuadri said.

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The drawback to option one, according to the city’s staff, is capital projects often require ongoing maintenance.

“It does help us deal with the backlog of projects that are unfunded in our (capital improvement projects),” DelliQuadri said. “It does mean that we are going to have future maintenance costs for those projects for the most part.”

Option two, calling for projects, would provide greater community engagement, according to DelliQuadri, and could potentially fund projects not owned by the city and thus wouldn’t rack up maintenance costs.

But a call for projects would require more staff time to finish the process of receiving, reviewing and approving recommendations from the community, according to DelliQuadri.

“It would take significant staff time, either on behalf of the city or some partner,” DelliQuadri said. “And it wouldn’t address any of our backlog of projects.”

Option three, awarding grants, has similar pros and cons to calling for projects, including the additional strain on staff. But awarding grants could potentially form partnerships with various agencies to grant out money to nonprofits.

“Old Town Hot Springs would really love this option,” DelliQuadri said. “The pickleball courts would also love this option.”

Saving the accommodations tax revenue for later would give the city financial flexibility down the road, DelliQuadri explained, but wouldn’t address any existing need.

City Council unanimously supported the first option, and some members listed some of the capital projects they would like to see funded.

The criteria in the 1986 accommodations tax ordinance specifies that the 1% tax on lodging can only be used for projects that “enhance the viability of Steamboat Springs as a premiere destination resort,” and must “function to preserve, promote and enhance the community identity.” 

City Council was presented with five projects recommended by the Parks and Recreation Department but could choose any capital project that meets the 1986 criteria.

Council member Heather Sloop said she wanted to fund solar lights at Howelsen Hill.

“We’re not only asking people to go to the hill, but we’re also asking people to park there and walk over the bridge, too,” Sloop said.

Council member Gail Garey wanted to look at adding additional terrain to Howelsen Hill, considering the new tubing operation took terrain away, and council member Dakotah McGinlay wanted to help fund Bear River Park.

City Council President Robin Crossan liked all those suggestions and added that she would like to investigate funding the westward expansion of the Yampa River Core Trail.

A recent inspection of the Steamboat Tennis and Pickleball Center revealed that the membrane must be replaced and should be insulated. While $500,000 from the city’s 2023 accommodations tax budget has already been allocated toward the membrane, another $500,000 will be needed for insulation and heating, ventilation and air conditioning upgrades.

Sloop said funding the membrane should be a high priority considering the city transferred ownership of the structure as part of a partnership.

“You don’t give somebody a beat-up old building and go, “there you go.’” Sloop said.

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