In a 4-to-2 split vote near the end of the Aug. 7 Salida City Council session, council members approved Article 6 on first reading, adjusting existing Resolution 63 Series 2008 to raise the total occupational lodging tax collected from visitors who rent rooms in Salida hotels by $1.16 beginning in January 2019. The adjustment is part of a total $4.82 occupational lodging tax approved by Salida voters in 2008, totaling only half of what was approved in 2008. Council members Justin Critelli, Dan Shore, Cheryl Brown-Kovacic and Harald Kasper voted for the increase, while council members Mike Bowers and Rusty Granzella voted against it.
“I was originally in favor of this raise, but I’ve been contacted by some of the lodgers. They have a legit complaint, so I’ve changed my mind,” said Bowers, who initially tried to get the council to table the discussion until January 2019. “Let’s set it aside, get more info and come up with an alternative tax idea to come to the voters in 2019.”
The amount council members approved after a lengthy discussion and public comment is still only half of the remaining voter-approved occupational tax that is not yet being collected. The proposed implementation of the occupational tax, which is already voter-approved, would be used to help fund renovation work on the Salida Aquatic Center, work that has been stalled for more than two years.
“I’d like to amend the ordinance on first reading, only moved forward with the raise planned for Jan. 2019, adding the $1.16 (only for the first-year bump) and then in the meanwhile attempt to find other sources for the pool work,” said Kasper, who made the motion.
Two lodging owners of hotel properties along U.S. Highway 50 expressed the imbalance they already deal with between their properties and hotels near them on county land that do not have to assess the tax.
“Please don’t raise the hotel lodging fee,” said Edgeric Graff, representing the Circle R Hotel, located at 304 E. Rainbow Blvd.,who brought a letter from 11 Salida lodgers located on U.S. Highway 50. “We’d like to see you pursue other outlets for raising revenue for the pool. We have to compete with others on (U.S.) 50 who don’t pay this fee. We’d rather see a 0.5-percent recreation fee, something like that.
“We only have a few high summer months, and adding this fee in the off-season months is big on top of the room cost. We feel the voters weren’t properly educated when it was passed. This is a flat fee – it’s big on top of a $65 room. We also pay the county lodging tax, so combined it is an 18-percent fee on a $65 room. In the summertime it doesn’t impact us as much, but in the winter when it’s slow … we’ve learned to offer a 10-percent discount to get these people to pay.”
Kasper originally suggested a compromise. “The concern I heard was that this lodging fee distorts the competition. Can we compromise and go with a $1 adjustment? Or can we make an attempt to get the other hotels to volunteer to get on board? It’s in their interest as well to have this improvement of the hot springs pool. If that is not successful, could we attempt to work together with the county?”
Shore said he was concerned about the competitive environment in general. “I struggle with the fact that some of the hotels are outside city limits, so outside this fee. There are all these online bookings … right now, it’s true what the voters passed was a flat fee, not a sliding scale.”
Brown-Kovacic was concerned that the lodging owners had a few inaccuracies in their public comments. “It’s not true that we aren’t holding the short-term rentals to the occupational tax. We are, and they are collecting taxes.”
Granzella pointed out the combination of fees – occupational tax, school tax and the commercial tax. “Maybe there should be more options; perhaps do this in percentages up to $4.82 if that is possible based on the original ordinance. Or maybe we only charge it three or four months a year. Anyway, the lodging folks should be involved in that discussion.”
The city says it has done due diligence regarding the proposed occupational tax adjustment. “We did public meetings at the SteamPlant in April, we attended lodging meetings and we did a lodging survey,” said acting City Administrator Theresa Casey. “We’ve tried to come up with an compromise based on the way it was enacted.”
Article 6 to Resolution 63, Series 2008 will return at a future Salida City Council session, and it will include another public hearing.