Council looks at occupancy tax funding
By Katie Zerr –
Options for funding the new aquatics center and moving forward with the project were the main topics of discussion Monday, Jan. 21, at the city council meeting.
Former councilmen Kent Mauck and Tom Unterseher both spoke to the council, urging them to move forward with the plan.
Mauck, who attended the meeting with the pool committee, explained how important moving forward with the necessary steps is to ensure the community will have a pool as soon as possible.
“I know how much pressure this is on the council,” he told them. “We would like to see this go to a vote of the people in April, with a $2.5 million opt out.”
He told the council that a lot of the people in the community support the opt out plan and that community fundraising efforts that will help to pay the yearly payment are succeeding.
“I really think this is doable,” he told the council. “In Webster they have raised more than $900,000. I know we can do better than that.”
Unterseher told the council the pool is an important part of the amenities Mobridge has to offer to help bring families into the community. He said he couldn’t expand his business here with the workforce that is here and needs to bring people into Mobridge.
Having a pool is one of the perks that families are looking for when moving into a community.
“I know being on this council is a tough job,” he said. “It is hard to balance paying the bills and moving forward with a vision. I urge you to keep moving forward.”
He said he would like the council to explore a larger aquatics center that would be an important addition to the community.
“What does this pool mean to the community? We get compared to communities in the area when it comes to amenities,” he said. “I urge you to think big about the affects of this on the community.”
Mayor Jamie Dietterle told the group there is not a person on the council who disagrees that the community needs a pool.
“We on the council are working hard to reach the $100,000 a year city donation to the pool,” he said. “We know we can’t continue to take things out of this community. We have to put this back.”
Ward III Councilman Gene Cox brought to the attention of the council information he had researched concerning cities that charge an occupancy tax on hotel rooms in order to fund projects or tourism. Cox said the occupancy tax could be used to offset the funding options for the pool project, including funds taken from the 3B tax.
“The 3B tax and committee are already established and the funds used for promotion,” he said. “People who come to town would pay the $2 per night per room tax and the revenue generated could offset funds collected from people in town.”
Dietterle said the funds could be used to help replace 3B funds that were used in order for the committee to continue to promote the community and the new aquatics center.
Mobridge chamber of Commerce Executive Director Michele Harrison asked the council to include the hotel owners in the community in any discussion about this type of tax.
“I can’t imagine that our hotel owners would not support this, but we need to have them on board,” she told the council. “I would like to hold a meeting with the hotel owners and have city officials there to get their input on this idea.”
If the council would approve a resolution to use this type of occupancy tax, the funds it generates should go directly to the pool fund, city attorney Rick Cain told the council. It should not be channeled through the general fund, but designated for this project only until the aquatics center project was paid in full.
Water tower project
The council approved Resolution 13-02, which deals with financing of the new water tower project.
As per discussions earlier concerning the financing of the project, the city needs to raise the base water rate charge to all city water users to $3.05 per bill in order to meet the standards set by the state. This is the increase on all water bills regardless of whether the user is located within or outside of the city limits.
In order to move forward with the project, the revenue base for payment of the 30-year loan needs to be in place. That includes the increase from $20.65 to $23.70 cents.
Finance Officer Heather Beck included comparisons of area communities’ water and sewer rates to those in Mobridge in order for the councilmember’s to see where the city’s rates are.
The rate increase would go into effect on July 1. The increase must stay in effect for the duration of the loan, which is a 30-year loan.