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Ballot Questions Take Shape During Aug 1 Work Session

In this week’s Salida City Council work session, ballot language for the Coordinated Mail Ballot November 8, 2022 election moved closer to being finalized. Monday’s session focused on finding the most impactful ways that the the Short Term Rental (STR) market could raise funds for workforce housing. Voter approval is required for newly increased/new types of revenues as well as changes as to how proceeds are used.

OLT and STR Permit Tax Direction

Council members expressed thanks to Finance, Administration and Community Development staff for providing multiple options regarding the Occupational Lodging Tax (OLT) as well as raising the annual flat tax on STR permits. Everyone on the dais (including Mayor Shore) weighed in during give-and-take including the City Administrator, City Attorney, and Treasurer.

It was apparent that a major effort was made to seek fairness and also recognize that hotels are treated as commercial ventures which pay higher property taxes and incur higher fixed costs than STRs.

  • Recognizing the significant constraints Salida faces (being a statutory city) limits the flexibility of currently available options; consensus nonetheless quickly gathered around “Option 4”. This requires a ballot question but would raise the STR tax from the current $3.66/night to $10, based on the number of bedrooms/sleeping areas in short-term rentals, with hotels staying at $4.82/night/room.

It was assumed that the higher OLT would be passed on to guests and not absorbed by STR owners. If passed by voters, this measure is estimated to bring in $300,000 of new revenue, earmarked for workforce housing relief.

  • As to the annual flat tax (currently $270/STR permit), a range of higher taxes (from $500 to $5,000) was discussed, along with the resultant increase in revenues, ranging from $50,000 to $1,034,000 annually. While the funds raised by taxes at the higher end might help provide significantly more assistance to more workers, guidance from the council to staff was to proceed with a $1,500 flat tax at this time.

The estimated additional revenue from this measure is $269,000 annually, based on current license holder data, again earmarked for workforce housing. If approved, it is roughly the same sum as raised by the higher OLT in Option 4 above.

Both sets of guidance will now move to a resolution for first reading at the next regular council meeting on August 16. This timing will allow for a second reading and public hearing in advance of the end-of month deadlines to submit ballot language for the November 8 General Election.

According to city staff, one of the most promising uses for the new funds is to create “deed-restricted” buy downs, to narrow the gap between market prices and local Adjusted Median Incomes (AMIs), especially addressing the shortage of studios and one-bedroom units, in both existing and new homes.

The current Salida City Council indicated that this is significant but only a first step; especially if the gap for “middle-market” housing continues to widen. In addition, STR tax rates may likely be addressed again in future years and refined further if Salida becomes a “home-rule” city.

August 2 Council Regular Session Wrap Up

Westward viewscape of First Street with proposed Residences at Salida Bottling in the center background. Image courtesy of City of Salida

Ordinance 2022-11 Submits Ordinance 2022-06 To Referendum And Calls For Special Election

Again, with no opposition either online or in-person, and no new evidence given to council members to consider, the Salida Bottling planned development at 323 West First Street (previously approved after a public hearing and affirmed two weeks ago) will now formally be submitted for inclusion on the November 8 ballot.

Long-time resident Nancy Dominick referred to the opponent’s petition saying ” that the people want a voice in this”. Council member Justin Critelli urged voters to “get educated” on the now packed November ballot.

Mayor Shore said people should “verify and not blindly trust information” put before them.

Consent Agenda, New Business Resolutions and Ordnances All Approved Unanimously, Move Forward

A resolution seeking overnight camping use of Marvin Park for two special events was approved as was the resolution setting the Coordinated Mail Ballot Election and adoption of the Unform Election Code for November 8.

A pair of linked ordinances approving the annexation of the parcel at 611 Oak Street for the new Salida Fire Station, as well as zoning it as  C-1 (Commercial), also passed without dissent.

Finally, the ordinance rezoning Lot 15 of the West End Subdivision on CR 140 also passed on first reading.  All three ordinances now move to second reading and a public hearing on August 16.