Hiking events

Elko City Council OK with 15% hiking tourist tax for ECVA

ADELLA HARDING Elko Daily Free Press

ELKO – Elko City Council has voted to increase the lodging tax from 14% to 15% to help raise funds for the Elko Convention and Visitors Center to make a lump sum payment coming due in 2026 for the conference center.

There will be two readings of the order before the action is final.

The board voted Sept. 27 in the same motion to also move 0.5% council tax allocations from the ECVA marketing fund to the ECVA setup fund to provide more dollars for the $6.5 million lump sum payment. dollars, but the vote was close. Mayor Reece Keener and Councilor Mandy Simons voted against the motion.

Keener originally wanted to file a lawsuit for more financial documents from ECVA, but he opened the door to the city’s director of financial services, Jan Baum, by presenting four scenarios to increase revenue from the lump sum payment that she and ECVA Executive Director Annette Kerr elaborated.

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Baum said the board-approved script would bring in about an additional $400,000 a year, based on current budgets.

“No other percentages are reallocated, just marketing,” she said.

T-Rex competitors, led by members of the NNYSA and Elko County Gold basketball teams, race the track at Elko County Fairgrounds during six flights comprised of community members working in health, real estate, business, leadership and more in August. 27, 2022.

Lodging tax allocations also go to the City of Elko Recreation Fund, the Airport Alliance to keep SkyWest coming to Elko, the State, the Recreation Council, the Western Folklife Center and to the council of fairs.

Under the approved scenario, ECVA will receive $1.663 million per year in room tax revenue for operations, marketing fund, and facilities fund, but will still have to make its annual payment of $565,686 for the conference center.

Baum said in the appeal that ECVA currently makes this payment using income from different sources, but with the increase in money coming in, ECVA could make the payments solely from the fund of the installation, so for me they should be able to save money in other ways.”

Simons said she would support reallocating 0.5% to the marketing fund, but nothing else as the city may need the remaining 2% allowed for resort tax, but Kerr warned that if ECVA did not repay the loan, she could “lose everything”.

She said that when financing was arranged, the lender put ECVA’s name on all of the separately created limited liability companies for the design and construction of the $9 million conference center, and a default could result in loss of building and land.

Elko City manager Curtis Calder suggested the council consider raising the room rate to 15% for 10 years to generate around $3 million, and that would be “at least half the payout and could be a starting point” to approach the Elko County Council. stewards for further assistance.

Kerr said ECVA plans to speak with the county.

“To me, the conference center is worth it,” Calder said, but he said he wouldn’t be “comfortable raising the 2% tax” because the city might need the last one. 1% allowed to meet other needs.

The motion by Councilman Chip Stone, who also sits on the ECVA board, did not impose a one-year limit on the 1%, however, as Calder suggested.

Keener said the hotel community is against increasing the resort tax. Hoteliers spoke out against the increase in accommodation tax on September 13.

Both Stone and Councilman Clair Morris pointed out that the lodging tax is a pass-through tax paid by room renters, rather than hotels and motels.

“It does not affect local citizens,” Morris said.

With the 0.5% reallocation, the ECVA marketing fund will receive $353,887 per year, up from $495,442 previously.

Kerr said the marketing fund grew to $1 million because there was no point spending marketing dollars during the COVID-19 pandemic, but ECVA is in full swing providing funds for events in the region. of Elko who put “the head in the beds”.

Bail would be another option for reimbursing the conference center, and it was raised at ECVA’s previous board meeting on September 27, when the board voted to hire the law firm Sherman & Howard from Las Vegas to review current funding arrangements. for the conference center.

However, the ECVA board has delayed hiring the lawyers as bond agents until there is a decision on how to meet the lump sum payment.

“To me, all of these deals are a bit complicated,” said Delmo Andreozzi, ECVA board member and Elko County Commissioner, who told the board he thought the attorneys should ” deconstruct and reconstruct” all chords.

He said, however, he felt it was premature to hire the company because “we don’t know what path we’re taking at this time” to handle the $6.57 million lump sum payment that is due in March. 2026.

ECVA signed a build and use of facilities agreement in 2015 for the conference center adjacent to the convention center, and the original loan amount was $12 million. ECVA has contributed $3 million, and the balance of $9 million has been funded at almost 4.75% for 25 years, with annual payments of $565,686, but the lump sum payment to repay it is in 2026.

The law firm estimated that the cost of reviewing legal documents for funding would be “in the range of $5,000 to $7,500”, but the fees to be a special counsel if the authority decides to offering bonds would be up to $55,000, if the bonds are not. t issued before December 31, 2023. They would be recalculated after this deadline.

Kerr said staff recommend reviewing the 2015 agreements and consider Sherman & Howard a bonding agent, if “we decide to go out to bond.”

She said, however, that Sherman & Howard is also the city’s bond attorney for Elko, and the firm said that in the event of a conflict of interest, the city comes first.

ECVA board member Matt McCarty, who also sits on the school board, offered to hire the law firm just for the review.