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HomeMy Public PortalAboutCouncil Minutes 1997 11/13CITY OF MC CALL MINUTES Special Meeting McCall City Council Thursday, November 13, 1997 Table Of Contents Call To Order And Roll Cad 2 Unfinished Business 2 Local Option Tax 2 Adjournment 4 MINUTES Call To Order And Roll Call The meeting was called to order by Mayor Killen at 7:00 p.m.. Ms. Arp, Mr. Eimers, Mr. Colton, Mr. Killen and Mr. Martens answered the roll call. A quorum was present. Members of the staff present were Acting City Manager Jim Henderson, City Attorney Ted Burton, and Acting City Clerk Cherry Woodbury. Unfinished Business Local Option Tax Mr. Killen reviewed the history of an option tax in McCall. He stated that McCall did have a tax many years ago. Then about 4 years ago it was revisited and voted on but did not pass. The current committee looked at the various elements of the last proposed tax and this was partly the basis for the 1997 proposal. Mr. Killen turned the floor over to Dan Krahn who headed the committee. Dan Krahn gave a brief background of the work the committee had done. The hurdles of the last proposed tax were reviewed. The committee first arrived at three different options for consideration. The pros and cons of the three options were discussed. The potential revenue was calculated. The committee wanted the public to be informed and have an opportunity to give input. The final recommendation was for a 5% bed and board tax. Mr. Killen pointed out that a public hearing was not required but the council wanted public comments and stated that no decision would be made at this meeting. Mr. Martens inquired about the change in revenue estimated. Mr. Henderson clarified the new figure of $160,129.68. The revenue estimate included funds from the use of campgrounds as well. Bill Johnson, General Manager of Shore Lodge, stated that a 5% bed tax would have a serious impact on the accommodation industry. He read a letter from Judd DeBore stating his perspective as Chairman of the Idaho Travel Council and his concern that it would place McCall at a considerable disadvantage in attracting visitors and conventions. It was pointed out that with a 5% tax added to the 5% sales tax and 2% state room tax would result in an unacceptable 12% total tax. A letter from Jane Sager was also presented stating the competitiveness of the tourist industry and the negative impact this additional tax would have. The letter also stated her position that any tax levied must be fair and should be earmarked for something that is needed. Mr. Johnson commented that Shore Lodge is in competition with not only Sun Valley but other areas of the state for convention meetings and large group accommodations. He stated that this was a major portion of their business and the 5% tax would have a significant effect on those rates. In addition to the already large burden of increased water rates, property tax, etc. to absorb this additional 5% would not be feasible. He commented on the negative publicity McCall has had this last year with mud slides, snowmobile ordinance, water bill increases, and that now the 5% bed tax would be another "hot topic". He pointed out what this burden could do and how it would have a trickle down effect on other businesses in McCall. He state that there has been slip in the transient business. He remarked that the accommodaters would prefer a proposal of a 1 % general sales tax and a 1 % bed tax and that the funds would definitely be earmarked for something specific. 2 Ms. Arp pointed out that the 2% state room tax goes to the State Travel Council and that McCall competes with Boise and other cities for the dollars and grants. Larry Shake, Brundage Mountain, stated that McCall needs to be competitive especially with the other ski resort areas. He felt that a more fair way would be to with a 1 % general sales tax, spreading it over the economy. Bonnie Shikrallah, owner of a bed and breakfast and Chamber of Commerce board member, stated that the vacation and relocation packet requests sent out by the chamber was down in numbers by 200 - 300. She remarked that McCall is no longer new. People visiting as well as locals see that sidewalks and other improvements that can be enjoyed by tourist or on an every day basis are needed. She felt an across the board tax with revenues targeted for basic improvement would be better. She did not support the 5% bed tax but would be willing to entertain support of a 1% general sales tax. Mr. Killen suggested that perhaps some portion of the revenue could be earmarked for promotion via contract with the chamber to handle the promotional advertising of McCall. Bill McMurray noted that the chamber had done a survey. There was support of the 1% general sales tax with revenue to be used for projects that would be beneficial to tourism as well as locals. He noted that this option would in fact generate more funds and thus projects completed with visual results faster. He felt that the 5% tax did not have a high degree of support. Rod Jeffries felt that there was already enough exploitation of the area and that the tax will stop people from coming. He preferred holding the status guo and did not go on vacation to see more people and sidewalks, etc. He was concemed about accommodating the people who are here and slowing down all the growth or potentially going the same way as Sun Valley and Aspen. He wanted to keep a beautiful place (McCall) as is. Ernie Woods stated that McCall has always been beautiful and did not believe growth could stand still. He remembered the tax of 1981 - 1986 and estimated that his sales were down 40% during that time. He commented that business was down again in 1997 for lots of reasons such as the mud slides, road closure, road improvement projects on Hwy 55, etc. He also stated that in 1999 rebuilding the bridge above Couger Mountain Lodge was planned. Curt Spaulding raised three questions. Is there a need for a tax? Would it be fair? Would the amount of tax be appropriate? He then explained the need that the recreation budget was strapped, the need to complete the bike paths, the need of the developing the Riverside Park, the need to improve several of the small parks. He explained that the 5% tax would be fair because few residents would pay and that permanent residents support the infrastructure and amenities that tourist enjoy. He explained it would be appropriate because other cities have taxes ranging from 4% - 13% and that if the total of 12% was high consideration of a total 11 %, same as Boise, might be appropriate. Bonnie Shikrallah stated that a comparison needs to be done of what other areas have to offer - what people feel they are getting or is available in those areas. She gave Boise as an example with the Bogus Basin ski area, Pavilion, entertainment sources and events, shopping mall, etc. - lots of amenities. Rob Hilton, Scandia Inn, agreed with McCall accommodaters. He felt it unfair to put the burden of the 5% bed tax just on the accommodaters. He questioned how far the city would go to collect revenue. Helen Eimers, Best Western, stated that when people check out of the hotel, they do check what total amount they paid and with that amount of increase (12% total) felt they would not be back again. The council agreed that there were different sides of the issue and a group to support each type of tax could most likely be found. Mr. Killen asked Mr. Johnson if the drop in transient business was correlated to tax or to new accommodaters (competition) in the area. 3 Mr. Johnson replied that it most likely was for a number of reasons such bad press due to the road closures and additional supply of rooms. He commented on the supply and demand effect. He reiterated that the group business was really the bread and butter of his business and that those groups bring in a lot of business for the other businesses in the area Bonnie Shikrallah remarked that the supply of rooms may have increased but the number of people coming is actually down. She stated she did not understand why at this particular time businesses had to be hit with another tax. Rick Fereday, committee member, stated that he did not check on area taxes before going somewhere. It was clarified that there was not statute permitting a county wide option tax. Louie Howard, Lardos, questioned the numbers on the projected revenue sheet and wondered how the high gains over 1996 were calculated. Mr. Martens pointed out that July and August of 1996 were in the 1997 figures and may have made up for the down turn. Ms. Arp inquired as to the last date to qualify the issue for the election ballot and if it was 60 days the council would have to decide at the next meeting. Mr. Colton felt that the tax issue was back to the same crossroads as four years ago. He felt people do not want any more taxes and it appeared this option tax was not favorable to many. Rick Fereday stated that the committee felt this proposal was best because it might pass and suggested putting it on the ballot and leaving it up to the voters. Mr. Martens inquired if the committee had investigated a tax combination proposal. Stan Sears, Printshop, felt that people do want projects but with business down it would be more beneficial to wait and look at this issue next year. He suggest a 1/2% general sales tax and a 1% accommodaters tax. Mr. Killen noted that it should be specified on the ballot what the funds were to be used for and that the funds could be matched with a grant. Mr. Eimers pointed out the negative effect on a business's profit margin by having to spread the overall operating costs among fewer patrons. He felt it important to listen to the business owners in the community. Dan Krahn felt it would be beneficial to come up with a plan to publicly promote the option tax and raised the question as to who would be responsible to educate and do the promoting on this kind of issue. Mr. Killen suggested looking at it during next year's budgeting. Council decided to put the issue on the November 20th agenda. Adjournment Without further business, Mr. Colton moved to adjourn. Mr. Killen seconded and the motion carried unanimously. The Council adjourned at 8:45 PM. ATTEST: 4 COc Cherry Woodbujy Acting City Clerk 5 William M. Killen, Mayor