Wednesday, October 16, 2019

Mt. CB council hears from public on lodging tax

Town council fine-tunes ballot language

By Kendra Walker

In an effort to finalize November ballot issue language for a proposed lodging tax, Mt. Crested Butte Town Council addressed community feedback during a July 16 public work session. The proposed 2.9 percent tax would be directed at guests paying for Mt. Crested Butte short-term rentals and hotels, and the proceeds would help fund affordable housing projects.

Mt. Crested Butte resident Kathy Hooge gave her input. “I’m here to tell you it’s not going to make any difference one way or the other because when you go to a hotel, or when you plan a vacation, you don’t call up the person and say ‘So what’s your sales tax?’ You don’t. You say, ‘What’s your nightly rate? Do you have to pay for parking at your place?’ Those kinds of things, so it’s not going to make any difference.”

Town manager Joe Fitzpatrick clarified that group businesses and convention and meeting businesses do look closely at those additional taxes. “They are the ones it would impact the most,” he noted.

Additionally, Hooge expressed her concern to protect the life of the affordable housing projects initiated under the tax. She referenced the Marcellina Apartments, now called The Timbers, which were originally built by Crested Butte Mountain Resort to house employees but were later sold and turned into condominiums by the new owner. “So what will be the plan to make sure that in 20 years, they can’t just say ‘Oh, we’ve all changed our minds’?” she asked.

Community development director Carlos Velado explained that deed restrictions could be placed on affordable housing units. “If you deed-restrict a unit that’s attached to that property, that lasts, it survives,” he said.

“The challenge with deed-restricted units is that if they go into foreclosure, oftentimes there aren’t procedures in place for the deed restriction to survive,” Velado continued. “In the past the town hasn’t had enough funds in the coffers to buy a property at foreclosure.”

“Because everybody’s hurting at the same time,” chimed in councilman Nicholas Kempin.

“So that’s one of the things we discussed as a way to use some of these funds,” Velado continued. “In the case of a foreclosure on a deed-restricted property, those funds can be used to rescue that property out of foreclosure.”

Hooge also asked council if some of the money could be used for down payment assistance.

Councilman Dwayne Lehnertz responded, “We talked about keeping it overly broad so that we could do that. That avenue would not be closed off to us because our intent is to create something that supports any aspect of affordable workforce housing.”

Mayor Janet Farmer said, “While it’s out there as a possibility, it’s not a priority. We really want to get some funds built up so we can do something helpful with infrastructure for someone who is going to build workforce housing, some major expenditure assistance. And then as time goes on maybe we get to a point where we’ve got some of those things … then [down payment assistance] might be a direction that we go with some of the funding.”

Councilmember Lauren Daniel added, “There are some employers in the valley that offer that to their employees. Mt. Crested Butte Water and Sanitation offers some programs; our town offers some down payment assistance.”

Farmer brought up feedback she’s heard over the past several weeks outside of council meetings. Though not in attendance at the July 16 meeting and unavailable for comment before print, Crested Butte Mountain Resort director of lodging Heather Leonard had expressed her concern to Farmer.

Referring to the hotels, Farmer said, “They’re not too happy with the 2.9 percent” potential lodging tax. Because, she clarified, of a fee council had not originally taken into account. Hotels charge an additional 3 percent to their nightly rental fees to pay to the Mt. Crested Butte Town Center Community Association, which helps fund various maintenance projects such as landscaping, snow removal and asphalt repair. Farmer explained a 2.9 percent tax would take hotel taxes up to a total of 19.8 percent charged to their guests; however, council felt the 3 percent association fee falls under a category different from the proposed tax.

“That is not a direct expense because they’re getting paid back. So it’s not in addition to,” said Lehnertz.

“It’s an operating cost,” said councilman Steve Morris

“It would be like if you tacked on the $20 to your VRBO for landscaping and snow removal,” added Kempin.

“At Town Hall we are trying very hard to educate [the Town Center Community Association] and the public that it is not a tax, it’s a fee,” cautioned town clerk Tiffany O’Connell. “Government is the only one that can put a tax on something.”

Farmer concluded, “If you’re all okay that they’re going to have that high amount tacked on to their room costs—we may get some pushback at some point.”

Council also determined the proposed tax percentage should have the flexibility to lower in the future with voter approval. “As long as you don’t exceed the 2.9 percent, council has the opportunity to lower it,” explained town attorney Kathleen Fogo. “So if you have a pile of money, you could reduce it to 1 percent, for example.”

“It gives the public a voice,” agreed Morris.

Council debated the jurisdiction of the funds raised, whether the tax would support projects only in Mt. Crested Butte proper, or be extended to projects outside of town limits. They ultimately decided the funds would not be limited to Mt. Crested Butte, but council would prioritize Mt. Crested Butte projects first.

Hooge expressed her unhappiness with extending beyond Mt. Crested Butte limits, saying, “I don’t want the money going from here down to Gunnison. And it’s not because I’m against Gunnison, I shop there—it’s just that I feel like they already have enough things going on.”

“If we have the opportunity to contribute to something that benefits our community, whether or not it’s in our community or not, I would like to have the option to do that,” said Lehnertz.

Fitzpatrick added, “You can’t see all these things from this chair today [about] what may come up.”

Based on the evening’s discussion, Fogo will update the ballot issue draft for review at the August 6 Town Council meeting.

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