Discussion Starts on Local Option Tax
On Wednesday, July 15, The city of Council held a grand opening and ribbon cutting at the new City Hall location in downtown Council, at 100 Michigan St. The city had recently traded the property with the owners of Council Guns. Council Guns is now located in the industrial park at 104 Council Ave and City Hall. After an extensive remodel, City Hall is finally open downtown. Many residents showed up to the grand opening to check out the new building and the recent remodel, as well as grab a bite to eat as Mayor Gabe Wilson was cooking up hotdogs. Everyone was invited to stay after the celebration for the monthly City Council meeting, which was the first to take place in the new building.
The new meeting room for the City Council was beautifully remodeled and much more spacious than the old room, allowing for the growing attendance at meetings. Mayor Wilson called the meeting to order and they started on the reports.
Kathy Hughes with the Airport Commission said there have been 4,140 gallons of fuel sales with a net of $2,700 to the airport. $155 to date for the courtesy car has been received. A local contractor looked at the area to build the pergola will submit design and material estimates. He is planning on donating all of his labor. There is a pilot interested in a second hangar. The current build spot that was approved by the council last year wants to build a pad this year and let it settle over the winter before putting down concrete. The second tentative builder hasn’t put in a plan yet. The next Airport Commission meeting is July 27 at 6:30 p.m. at hangar #5.
Ashley Scott, the City Clerk, had an airport fuel system update. She said it would be 4-6 weeks before they received everything and could start. All the smaller projects had been completed except painting trim on City Hall and doing the awning over the door. These would be done as time allowed before snow flies.
Caleb Shumway with Public Works said a fire hydrant was run over on the fourth, but there was otherwise low damage. They have been working with M2 and fiber optic to finish the projects. There is still more pothole mix.
Next, they went over the proposed budget for the next year. Scott went over some of the changes. Employee medical benefits increased 12.5%. She thought it was a good call not to give a cost of living increase. She also wanted to clarify for people reading the budget that water and sewer rates are not increasing, but the published budget will look like there is an increase in revenues because of some funds that were already existing in the water fund that have been properly added in. The Council approved the proposed budget for publication.
The City Council passed a resolution declaring the old City Hall building surplus property. It will then be auctioned off. There was some discussion about what to set the minimum bid price. They ended up going with the value they were given last year of 160,000 for the minimum. The building is on a 1 acre lot. They have to hold a public hearing at the next meeting, then post the legal notice, so they are looking to September for the auction. Scott thought they could do the surplus cars at the same time. The City Council also approved the purchase of two flags and a flag stand for the meeting room.
Next, Jeff Schroeder, City Attorney, had a presentation about resort city local option taxes. This was potentially an option for Council and the City Council wanted to hear what it was about and ask questions. Attorney Schroeder explained that if the city wished to pursue it they would have to adopt an ordinance that must be approved by vote at an election with at least 60% of the vote. It can be scaled basically however they want. There is an option for an occupation tax, liquor tax, or all sales subject to tax within the city.
One thing they are required to do as part of the statute is to set up a property tax relief fund to offset costs to residents. Any revenues in excess of those budgeted go into the property tax relief fund that reduces the amount of property tax asked for. Additionally, they could specifically budget funds to be used for property tax relief as part of the budgeting. They also have to set a time frame from the beginning during which things cannot be altered or changed without another vote of the people. So the ordinance would have to include: the things to be taxed, the amount they will be taxed, and a list of the things they are going to spend the money on.
The whole idea is they make a finding that the city derives a major portion of their economic well being from people who come and visit, who are not paying property taxes. The funds could help pay for road improvements, parks, property tax relief, basically whatever they want for the city. Some other cities that have done this include Irwin, Swan Valley, Crouch, Cascade, Riggins, and Mackey. Every city does it a little differently. “It’s an optional sales tax, typically 1-2%,” said Jeff Schroeder.
The City Council had mixed reactions. Council Member Dave Tubridy was skeptical. “It stings everybody,” he said. Mayor Wilson was interested in the property tax relief concept. “We don’t want the locals to bear the brunt of this, we just want to get a fair shake out of everybody else.” Tubridy said he’d consider it, but thought trying to get it on the ballot in November would be rushing it, and they need to do the research and education first. “We need to do the education up front, not on the backside,” he said. Council Member Mendy Stanford was interested in seeing how much property tax relief they would be looking at exactly.
Some of the residents who were present for the meeting also had questions and were able to get some clarification about how the ordinance could potentially work. One resident encouraged the council to think about the categories and how they could disproportionately impact citizens. A local business owner said less than 20% of her stays were people passing through, and that most were locals who needed temporary housing or people working in the area, who would pass on additional costs to locals. Another resident thought that a tax on consumption was more constitutional then a property tax and was in favor of the idea. Others expressed concerns that Council didn’t have enough tourism to make it worthwhile. Another resident said he was totally against it.
Schroeder advised the council to talk to the city of Cascade because they had a good discussion about it and good reasons for and against. The deadline for getting on the May ballot would be around the end of February. The City Council was concerned about rushing the process and everyone wanted more education on whether it even made sense. Mayor Wilson also mentioned they needed to take into consideration the potential mining industry moving into the area. The City Council hoped to have strong community participation moving forward with any decisions. “We don’t know unless we hear from you guys, and we want to hear from you,” said Dave Tubridy. “We want to make sure that it’s beneficial, if it’s not beneficial we don’t want it.”
Before the meeting adjourned, Dave Tubridy thanked several people. “On behalf of the Mayor and my colleagues, I would like to thank city staff, Ashley, Pepper, Caleb , and Justin, for everything they’ve done to make the City Hall transition happen.”
