During last week’s Holbrook Council meeting the council discussed amending the city’s tax code pertaining to the Lodger’s Tax. The Lodger’s Tax is a tax imposed upon travelers who come to the city and stay at hotels, vacation rentals and campgrounds for less than 30 consecutive days. Currently, the Lodger’s Tax is 3% and the proposal presented by administration is to increase that tax to 5% (the maximum allowed by law), with the additional 2% to be used to improve city facilities and/or roads.
Mayor Kathleen Smith noted, “The financial implications of increased revenues are estimated to be $646,000 (per year),” adding that a majority of cities in the state have increased their rates to the 5% in order to fund capital projects.
City Manager Randy Sullivan explained that this tax would be applied strictly to those coming to town and staying in the city for the short term. “Williams, Kingman, a lot of those cities that are based on tourism like Holbrook, and so close to a national park have gone to this model and that’s how they’ve been able to revitalize they’re downtown areas.”
Smith agreed, stating, “We are different than a lot of these other cities that have the big retail giants for their tax base, so we have to be creative. That’s the only way we’re going to be able to grow and get the right staffing and resources.”
When asked how the city would regulate vacation rentals such as those offered by Airbnb, Sullivan stated that is monitored by the Department of Revenue. “If we start getting our business license involved then we can have them on a directory and then we can audit them. Until we get that in place, we can’t really audit them,” he stated, adding, “We can only identify people that should be paying taxes but then between the Department of Revenue and our auditors we can audit them.”
Black was not impressed by the proposal, noting that he believed the added tax would cause visitors to the city to choose to stay elsewhere. “I totally do not like this. I don’t think we need to go this route. Some members of this council have expressed their spending habits if they find out somebody is charging them to use their credit card; they won’t go do business there. We want our tourism to grow. Granted this is easy money… this is not the way we need to build up our tourism base.” He reiterated, “I’m totally against this.”
Councilwoman Karina Pack, whose family owns the Wigwam Motel stated that as far as increasing lodger’s tax she would be okay with it if it went towards a new pool. “I’m here, my kids are here. I would use it (and) everybody in the community would use it.” Pack didn’t feel the increased tax would deter people wanting to stay in her motel but expressed her overall concern with tax increases and the rising costs of living.
Black doubted additional funds could be allocated to a designated cause, saying that once the administration had the funds, they could use it for whatever they deemed fit and nothing could be promised. Councilwoman Arcenia Pacheco disagreed, stating that specific projects can be allocated for that funding, a statement upheld by Sullivan.
“The big thing is that Holbrook needs revenue,” explained Councilmember Roxanne Pergesen. “A 2% increase in taxes for tourists is not going to deter them from staying. I think it’s worth the risk, especially when we’re one of the only towns that are not taking advantage of this and everyone else is doing it. If we’re not moving forward, we’re moving backwards.”
Smith agreed, “If we keep saying we’re not going to do anything, we’re not going to grow. A city is not every stagnant, you’re either growing or dying,”
Councilwoman Teri Tafoya stated her belief that tourists are not going to know that the tax was once 3% and is now 5% and as such will not be deterred by such a small increase.
The item was for discussion only and will be brought before the council again at the meeting for a vote, following a public hearing. If increased, the increase would go into effect January 2026.
The council unanimously approved an amendment to the recently approved increase to fees at Hidden Cove Golf Course in July. The amendment reduces the family monthly greens fee from $110 to $80, the family yearly greens fee from $1,100 to $800 and the cost to play disc golf that was $10 is now free. Smith explained that she, as well as city administrators received numerous phone calls regarding the increase in July and felt it prudent to address the concern for the benefit of the community. Regarding the removal of the disc golf fee, Smith stated, “I do believe in the future we should be charging something, since they are using the golf course, however, (at this time) it’s not necessarily the best functioning golf course.” Although the fees were lowered in these categories, aside from the removal of the disc golf fee, the other fees are still an increase from the fees earlier in the year.
The council also unanimously approved the purchase of a CAT motor grader. The current grader was purchased in 1998 and is no longer functioning properly. The cost for 2019 grader including the trade-in is $155,000. This expense is already budgeted and the purchase will be made using the Highway User Revenue Funds allocated to the city.
David Mills, the owner of SEI Realty based in Snowflake, who had worked with the city on previous matters as a consultant presented to the council. He informed the council of the demand for light industrial and commercial industrial in the region and briefly discussed the possibility of marketing for development the city-owned property on East Hermosa Drive (also known as the old Northland Pioneer College site), which has three buildings on the property. The project proposed by Mills was to allow his company to sell the buildings in order to create some income and then hire an engineer. “There’s an additional 19 acres right next to that. Along the front there’s a little bit of drainage issue but the rest of the property is very developable,” stated Mills. He stated that that acreage could be developed into lots for sale to attract small commercial development.
In discussion of current events, Smith informed the council that the city’s logo, created by Mojo Marketing of Flagstaff has been nominated for a Golden Prospector Award presented by the Arizona Association of Economic Development. She also said that Holbrook resident and Romo’s Mexican Grill owner Mark Romo is hosting a holiday toy drive for kids in Holbrook, Joseph City and Winslow. There will be opportunities provided in each community to donate unused toys or cash in the near future. “Their biggest need is identifying families that could use it so reach out to myself or to Mark if you know of families.”
Vice Mayor Mike Nilsson stated that the Holbrook Food Bank will be hosting a Bunco party at 6 p.m. on Saturday, Nov. 8. “Food prices have gone up a lot. What used to cost us $8,500 to give food boxes away, now costs $14,700 for about exactly the same amount of food as we used to buy. So, we put in for some grants and we’re going to have this Bunco, so please come and support us.” He noted that anybody in need is welcome to fill out an application at the food bank noon to 2 (p.m.), Monday through Friday. All furloughed federal employees are encouraged to come in. He added that for the holidays, the box includes a ham, a bag of potatoes, oranges and green bean casserole fixings.
Black reiterated that he is still receiving numerous complaints about the water trucks on McLaws Road that he estimated used between 70,000 to 100,000 of gallons per day for the renewable energy projects being developed, expressing his concern for the amount of water used.
Sullivan noted that the city has hidden hats throughout the city and recommended people check out the city’s social media to learn more. The city will also be hanging photos of veterans along the city’s main streets honoring local veterans. Those interested can submit information and a photo online at the city’s website. This project is currently only for local vets.
Sullivan also said that the city is doing asphalting along First Avenue and Joy Nevin Avenue, followed by fog and chip sealing utilizing new equipment.
