Saturday, July 4, 2020

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Moab, UT

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    City sales tax comes in higher than expected

    York credits residents for surprising revenue numbers

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    Doug McMurdo
    Doug McMurdo
    Editor Doug McMurdo reports on news out of the Moab City Center, tourism, courts, change of government and more.

    Sometimes, bad news is good news.

    City of Moab Finance Director Klint York in a sales tax update to the City Council Tuesday revealed the virtual shutdown of Moab’s economy beginning in March did not result in the worst-case scenario City Hall expected.

    March and April revenue totals were released in May and June, respectively. Because the pandemic prompted the shutdown in mid-March, York and other city officials believed the numbers would be 50 percent of the roughly $860,000 earned in March and April 2019, roughly $430,000 for March, and 10 percent for April, about $86,000. April was a month York said was so quiet downtown looked like a ghost town.

    But March started with a bang and earned 70 percent of revenue it had earned in 2019 two weeks into the month — about $597,400 — and April came in at 44 percent of 2019 revenue, or about $375,300.

    York said he was surprised by April’s performance, suggesting local residents contribute 35 to 40 percent of sales tax revenue, and we “owe them our thanks.”

    Those better-than-expected numbers mean the city will collect two million fewer dollars than last year — atrocious, but not nearly as bad as the more than $3. million that had been forecasted.

    The City of Moab’s budgeted sales tax revenue for the next fiscal year beginning Wednesday, July 1, is roughly $9.5 million. Nearly half of that will come from Resort Community taxes, about $4.6 million. Sales and Use taxes are budgeted at nearly 2.3 million and Transient Room taxes at $1.4 million. Highway taxes — what motorists pay when they get gas — is pegged at about $900,000. Energy and Franchise taxes, at about $163,000 and $140,000, respectively, round out the sales tax budget.

    The City of Moab has and will continue to receive federal COVID-19 relief funding, but how it can be spent is restricted and might not help improve the bottom line.

    “This in no way puts us where we want to be,” clarified City Manager Joel Linares. “I think the biggest baseline is where May numbers come in next month. Are we at 100 percent of normal? Seventy percent?”

    Linares said the city also has $1 million in its rainy day fund. Using that money, combined with cost-savings in the wake of significant and across-the-board layoffs and furloughs of the workforce, could help the city break even — and that’s gambling that the pandemic doesn’t worsen and prompt a second shutdown. Either way, the rainy day fund will be fully depleted.

    COVID-19 cases are spiking across the U.S. and large swaths of the public refuse to wear masks or practice social distancing, leaving officials worried the economy will again be interrupted.

    In answer to a question posed by City Council Member Karen Guzman-Newton, Linares said the City has spent about $280,000 out of roughly $470,000 in CARES Act revenue on personal protective equipment, overtime for police, extra cleaning and other items.

    Aquatics Center a money pit

    The Moab Recreation and Aquatics Center opens Friday, along with the Center Street Gym and the Moab Arts and Recreation Center.

    Virtually the entire staff was furloughed or laid off — and some quit after refusing offers to remain at a lower wage — and some of them have been brought back. York acknowledged reopening the municipal swimming pool at Swanny Park was “a hot topic.”

    The former manager posted a lengthy comment on social media that was highly critical of the City of Moab’s spending habits, but York said after doing a “deep dive” into the asset he determined there’s a “ton of cost and not much revenue.”

    That was an understatement. The revenue in 2019 was an impressive $413,000, but the expenses exceeded $1 million, mostly due to salaries and benefits.

    He suggested the City Council adjust labor rates and hours, adjust open swim hours, raise fees and sell concessions, as well as pursue the proposed new Recreation, Arts and Parks tax that could ease the financial hemorrhaging at MRAC and elsewhere.

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