Recommendations Made For Holbrook Lodger’s Tax Budget

The lodger’s tax is expected to generate approximately $165,000 in the coming fiscal year. Alley explained that revenues from city events such as marathons and the mud run will be added to the lodger’s tax fund, bringing revenues to an estimated total of $177,000. Unlike in previous years, the fund will be kept entirely separate from the city’s general fund and any overages will roll over to the next year.

Under the proposal, the Navajo County Historical Society will receive an increase and the chamber of commerce, a decrease. Alley explained that a $7,280 increase to the historical society will help pay the cost of staffing the front desk of the courthouse seven days a week.

“They do it cheaper than I could do it, and they’re doing a good job,” he remarked.

That increase will bring the total contributed to the society to $39,680.

The proposed decrease to the chamber’s budget totals $9,600 and takes the contribution from $57,000 this fiscal year to $48,000 last year. Alley explained that in reviewing the chamber’s budget proposal, he found areas that he felt could be cut, at least in terms of using lodger’s tax funds. In his proposal, Alley reduced the chamber’s $1,000 for lunch, travel and conferences to $250; eliminated $1,500 for producing a printed city guide, noting that the city is already in the process of producing one and the two entities should work together using one budget; cut $3,000 from the $13,000 budget for summer cultural dances, noting that they used to be put on at no cost and dancers earned tips; reduced the budget for Wild West Days from $10,000 to $7,000, and told the council that if the chamber cannot do it for that amount, the city will; reduced the budgets for Christmas festivals and unallocated special projects from $1,000 each to $500 each; cut funding for insurance from $2,355 to $1,000, noting that the city will work with the chamber regarding insurance for special events; and cut the budget for member services/mixers from $2,259 to $572.

The budget for the director’s salary at $28,178 was left intact, as well as $2,400 for advertising, $600 for cell phone costs and $2,000 for accounting costs, among other miscellaneous items that made up the chamber’s proposed $70,000 budget.

The remainder of the lodger’s tax revenue would be divided mainly among the fair board and special events. Alley noted that the $40,000 contribution to the fair board would remain the same and $29,740 is set aside for special events. The salary for the city’s special events coordinator will be paid out of the general fund. Lodger’s tax will also be used to pay for maintenance of the digital sign at the corner of Navajo and Hopi Blvd., insurance, a $3,500 donation to the Hashknife Posse, utilities and maintenance at the historic county courthouse.

Alley explained that he understands that no matter what decisions are made, not everyone is going to be happy about how the funds are divided.

He also noted that a suggestion that the events budget come from the parks and recreation department is not feasible if the city wants to maintain the current park system and complete the splash pad.

“We can’t take it out of parks. Somebody pays if we do that,” he said. “It’s a fine balancing act.”

Alley noted that the city budget is stretched about as far as it can go, and all tourism promotion activities need to be financed from lodger’s tax revenues.

“It would be real easy if I had enough money to give everyone what they wanted, but I don’t,” he said.

Alley also reviewed city staff’s budget proposals for administration, the airport, community development and the senior center with the council, noting that most changes are minor. He reminded the council that he and staff members are only making recommendations, and it is up to the council to set the policies that guide the budget process.

“I think what we’ve come up with is fair and equitable to everybody,” he said.

Vice Mayor Charles Haussman noted that, in regard to lodger’s tax, he believes the council is obligated to honor the original purpose of the tax to promote tourism in Holbrook.

“The goal is to attract tourists to come and spend money in our community, and we need to decide how we can best do that,” Haussman said.

He pointed out that it would be helpful to council members if they had some data on which to base their decisions, such as surveys of what advertising efforts and events drew visitors into town.

“I feel obligated to the people that pay the tax to use the money in the most effective way,” he remarked.

Councilmen Myron Maxwell and Richard Peterson both noted that they felt comfortable with Alley’s proposed budget.

Peterson said, “It says that this (lodger’s tax) is to enhance and develop tourism, and I think this budget does that.”

The council did not vote on the budget since other portions have yet to be reviewed.

In other action May 12, the council:

* Approved an agreement with the Northeastern Arizona Law Enforcement Training Academy for police officer training services.

* Approved the acceptance of a $12,000 library services and technology grant.

* Tabled an agreement with Navajo County for city magistrate services.

Councilman Maxwell noted that he would like more information before entering into the agreement.

* Approved the transfer of certain Federal Aviation Administration (FAA) funds from 2012 to the City of Winslow.

Alley explained that the funds were designated for a new fuel station at the airport and the city has already replaced the fuel pump at a lower cost than the city’s portion of the cost share for the larger project.

The next regular council meeting is set for 6 p.m. on Tuesday, May 26, at city hall. Results of the May 19 city election are to be canvassed, and newly elected members of the council are expected to be sworn in at the meeting.