Durango City Council has not yet decided how to approach a ballot question asking voters for permission to spend excess lodgers tax funds, but it is narrowing the options: Housing and parking are two of the big areas under consideration.
City Council must decide what to do with excess lodgers tax funds collected in 2021 at its next regular meeting on Aug. 16, but councilors are seeking more community feedback about how the funds should be allocated.
The city collected about $684,000 more than its projected $900,000 last year after voters approved a lodgers tax increase. This year, the city predicts it will again surpass its initial estimate of about $2 million, totaling about $1.2 million in excess funds for last year and this year.
The city recently conducted a survey to gauge public preference for how excess lodgers tax funds should be allocated if voters allow the city to retain the funds rather than issuing a tax refund. But the city received fewer responses than councilors would have liked.
Tom Sluis, city spokesman, said the survey garnered only 117 responses. At Tuesday’s City Council meeting, councilors directed city staff to conduct another survey ahead of their Aug. 16 meeting, at which time councilors must decide whether to create a ballot question asking voters to keep the 2021 and possibly 2022 excess lodgers tax funds.
The new survey will ask residents if excess funds should be reallocated to create more parking opportunities or if they should help fund affordable and workforce housing solutions. It will also ask if the money should be divvied up among the areas the lodgers tax is already funding.
Voters approved a 3.25% lodgers tax increase in April 2021. Of that, the city decided to allocate 55% to city marketing, 20% to city transit, and 14% to arts and culture programs. The remaining 11% can be use as determined by City Council.
In the first survey, which Sluis said will remain open, housing was the most popular alternative use for funds should the city retain the funds. Directing excess funds to arts was the second most popular, followed closely by using the funds to address parking needs.
A ballot question could address just the 2021 funds – the funds that must be refunded to residents before Dec. 31 if voters don’t approve a new use for them – or it could include 2021 and 2022 funds.
Several Durango residents shared their thoughts about the question of whether to bring the issue to the ballot or to issue a refund.
Teresa Craft, deputy director of the Powerhouse Science Center, proposed the idea of allocating excess funds to the Powerhouse. Specifically, she suggested the funds be used to purchase and install a “water table” for educational and creative purposes.
She said a water table would bolster the Powerhouse’s ability to “engage the scientists of all ages here in Durango.”
“It would incredibly increase our interactive space by using an outdoor area that is there (at the Powerhouse) and can be used,” she said. “But the interactivity and the exploration that comes with that beautiful sensory play that you find with water tables would be an incredible addition.”
She said kids gather at water tables at museums because they offer sensory play and the opportunity to be artistic and creative.
Water tables come in many different styles. They can include buildable dams to change water flow. They can include cascades or misting features to demonstrate the power of gravity and its effects on water. They can be designed with a 4-foot diameter in mind, or they can be 20 feet long to demonstrate the flow of a river, she said.
Durango resident John Simpson said he wants the city to take a “do-nothing” approach, which would have the excess lodgers tax funds get redistributed to residents. His reasoning was straightforward: Help Durangoans who are struggling to pay their bills.
He said giving excess funds to residents would help offset the impacts of tourism, including cost increases around town.
Mayor Barbara Noseworthy said she supports combining 2021 and 2022 funds in a ballot question. She said workforce and attainable housing is “essential” and thinks improving Durango’s housing inventory is the best use of excess lodgers tax funds.
“We’re hearing it from everyone,” she said. “So it would be my preference just to put it solely for housing because that’s $1.2 million which could serve in some ways (as) a bridge until we figure out a longer-term and larger funding (source) for that division.”
Councilor Kim Baxter said she also supports combining 2021 and 2022 funds and asking to use them for housing purposes. She said addressing Durango’s housing shortage requires “a significant enough sum of money” to make any difference, and $1.2 million can have an impact.
Councilor Olivier Bosmans suggested including a question in the new survey asking residents if they want a refund over having the city retain the funds. He said he supports refunding 2021 excess taxes to Durango residents with city utility accounts and putting the question of what to do with 2022 excess funds to voters.
Councilor Jessika Buell said she wants to check the pulse of residents to learn where they’d like excess funds to be spent. Buell said if residents are asked if they would prefer a refund, many of them will say yes. She noted the lodgers tax is largely paid by tourists, not residents.
Councilor Melissa Youssef said she supports asking voters to approve allowing the city to spend close to $1.2 million in excess funds. She would also like more feedback from the public about how those funds could be spent.
City Council was in agreement that if voters reject a ballot item for allocating the funds, refunds should be distributed to residential utility accounts only, meaning commercial accounts wouldn’t receive a refund.
cburney@durangoherald.com
