Steamboat City Council to discuss how to spend $1.2M in excess 2A trails tax funds
March 11, 2019
STEAMBOAT SPRINGS — On Tuesday, Steamboat Springs City Council will discuss how to move forward with accommodations tax funds that are not currently designated for specific projects.
"This is a work session that is for council to get an update on the accommodation tax fund and work through the process of how they want to move forward," City Finance Director Kim Weber said.
Steamboat's accommodations tax is frequently referred to as the 2A tax, named for the 2013 referendum that designated revenue from the tax to fund trail development, improvements to Yampa Street and marketing these tourist-related improvements.
If you go
What: Steamboat Springs City Council work session
When: 5 p.m. Tuesday, March 12
Where: Citizens' Meeting Room in Centennial Hall, 124 10th St.
City Council also will discuss community housing code and dog-related issues in the city, including off-leash areas, enforcement and fenced dog parks.
At that time, $660,000 was designated toward these items annually, but the city has collected more than $660,000 in revenue over the years. This work session will focus on how to deal with the extra funds.
Accommodations tax history
City voters first passed the accommodations tax in 1986. The original ballot language designated revenue from the tax for "improvements and amenities in Steamboat Springs, which will promote tourism and enhance the vitality of Steamboat Springs."
Initially, the tax paid for the former Strings Music Tent, the Tennis Center at Steamboat Springs and improvements to Haymaker Golf Course.
In 2013, accommodations tax revenue paid off the final bond on the projects at Haymaker, and a committee was formed to advise City Council on how to spend the money going forward.
Several proposals were considered: more pickleball courts, purchasing land for open space, building more restrooms in city parks, a sports complex at Howelsen Hill and improvements to the Emerald, Bear River and Yampa River Botanic parks.
In 2013, two projects were placed on the ballot and approved by voters with a 10-year sunset. The first was a revitalization of Yampa Street, installing pocket parks and wider sidewalks, among other improvements. The second was the Steamboat Springs Trails Alliance proposal, which suggested expanding trails in the areas of Emerald Mountain, Buffalo Pass, Mad Creek, Rabbit Ears Pass and within city limits.
At a glance
2013 Referendum 2A ballot language:
Shall the city of Steamboat Springs be obligated to a multiple-fiscal year obligation by allocating, for the next 10 fiscal years, the revenues from the existing public accommodations tax (tax revenues), on a fiscal year basis, as follows: A) The first $600,000 of tax revenues to be split on a 50 percent-50 percent basis between 1. the development of trails in and around the city in accordance with the Trails Alliance proposal and 2) improvements to Yampa Street in accordance with the Yampa Street River Park proposal, until the total allocation to the improvements on Yampa Street reaches $900,000, thereafter 100 percent of the first $600,000 of tax revenues shall be spent on development of trails; B) the next $60,000 of tax revenues to be split on a 50 percent-50 percent basis between 1. marketing of the tourist-related improvements constructed with tax revenues and 2. reserves for the Haymaker Golf Course capital improvements; and C) any tax revenues in excess of $660,000 may be spent at the discretion of city council on projects authorized by the 1986 public accommodations tax ballot question?
The ballot language allocated $660,000 in revenue a year. Of that, $300,000 went to Yampa Street and $300,000 went to trails. The remaining $60,000 went to marketing those trails and Haymaker.
In 2017, according to the plan laid out in the ballot language, the funds designated for Yampa Street were folded into the funds designated for trails, meaning $600,000 annually is intended for trails listed in the Trails Alliance proposal from 2017 to 2023.
"The reason the original ballot language only allocated $660,000 is because that was the lowest it got during the recession, so now we’re bringing in $1.1 million a year, but that can go down by 20 percent in one year during a recession," Weber said.
That leaves some accommodations tax money available for other projects that were not set forward in the 2013 ballot language.
So far, this extra cash was allocated to the Old Town Hot Springs expansion project ($286,000) and paid for design work on the project to build a second sheet of ice adjacent to Howelsen Ice Arena ($355,228). Today, there is $1,193,688 available for other projects, which must be used for tourist amenities.
This is what City Council will discuss Tuesday when it will consider how and whether to appropriate these "excess" funds.
Deciding how to move forward
On Tuesday, Weber will ask council members if they want to allocate this money or keep it restricted. If council members do want to allocate the money, they will have to decide how this will be done — through a committee, making the decision themselves or some other way. The council also will consider whether it would like to have an election to repurpose accommodations tax funds.
Some opponents of the Mad Rabbit Project, which is receiving funds from the accommodations tax, have called for the city to retract accommodations tax funds from the project. Weber said the bulk of public comments she's received related to the tax are about Mad Rabbit.
"This work session really isn't about that," she said.
City Council can take public comment at the council’s discretion in work sessions. If council holds public comment, members of the Routt Recreation Roundtable have been advised that one representative of each stakeholder group will have three minutes to speak.