For the week of October 16 - 22, 2002

SV option tax revenues down again for city

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By GREGORY FOLEY
Express Staff Writer

Local Option Tax revenues for the City of Sun Valley were down sharply in July compared to last year, maintaining a trend of lower revenues from tourist-related expenditures through most of 2002.

The city collected $201,053 from LOT receipts in July, down 16 percent from the city’s receipts of $239,194 in July 2001.

Sun Valley has collected a total of $880,332 through the first 10 months of the fiscal year 2001-2002, including revenues from October 2001 through July 2002. The total is down a sizable 12 percent from receipts of $1,001,958 from October through July during the fiscal year 2000-2001.

Dan Pincetich, Sun Valley city administrator, said the drop in city revenues from LOTs, which levy a 3-percent tax on lodging, retail and liquor sales in the city, was anticipated. Pincetich has set the city’s projected LOT revenue for the entire 2001-2002 fiscal year at $1,120,500, a number he expects the city will reach when all the receipts are tallied.

Pincetich said the decreases in LOT revenue this year can be attributed in large part to the nation’s lagging economy and ongoing concerns among travelers about terrorism and global political instability.

Also to blame is a significant loss of LOT revenues from Elkhorn Resort and its associated businesses. Pincetich said city LOT revenues from Elkhorn have dropped significantly since the complex was sold to new owners who stopped marketing their services and put forth a plan to tear down the resort to build a village of townhouses and condominiums.

Pincetich said the city historically brought in approximately $160,000—about 15-percent of the city total—from LOT taxes on Elkhorn businesses.

"That’s all going bye-bye," he said.

Pincetich noted that the city has brought in some revenue from Elkhorn throughout the year, as the hotel has maintained an occupancy rate of 20 to 50 percent, and golfers have continued to pay for use of the Elkhorn golf course. The resort was officially closed on Sept. 30.

Carol Waller, executive director of the Sun Valley-Ketchum Chamber of Commerce, agreed that the phasing out of Elkhorn Resort has hurt LOT revenues. "Elkhorn was not being aggressive in the marketplace, and they weren’t soliciting business," she said. "That certainly had an impact."

Pincetich said he adjusted the city’s projected LOT revenue after hearing that the CG-Elkhorn ownership group planned to close the resort.

He noted that LOT revenues from businesses owned and operated by Sun Valley Co. have remained somewhat constant over the last year, with numbers down slightly overall. Sun Valley Co. sales account for the majority of the city’s LOT revenue, usually accounting for most of the 85 percent of receipts garnered by the city outside of Elkhorn.

Pincetich for the 2002-2003 fiscal year has projected that LOT revenues will be similar to those from the 2001-2002 fiscal year.

"We’re estimating the revenues will stay put, and we hope they get better," he said.

Waller said she has seen signs that tourist visits to Sun Valley and Ketchum could improve this coming ski season. "People are definitely calling earlier and looking further ahead than they have been," she said. "We’re cautiously optimistic."

 

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