Economy worries City Hall |

Economy worries City Hall

City Hall, suffering from the nationwide economic downturn, appears on the cusp of declaring a financial alert, a step that last occurred during a development slowdown before the 2002 Winter Olympics.

Park City Manager Tom Bakaly said sales-tax revenues collected by City Hall are down about 3.5 percent since the beginning of the summer and there has been about a 10 percent drop in fees generated by building activity. Sales taxes and building fees have long been important revenue streams for the local government.

Bakaly said it is likely a so-called financial alert could be declared by mid-November, putting it at the beginning of the ski season. Under an alert, City Hall would delay expenditures, such as putting off buying new equipment if the older equipment still works.

Bakaly said, though, the local government would continue to offer services at the same level. An alert would not require cuts in the budget, he said.

"I don’t think at the alert level they’d notice it," Bakaly said about the impact on regular Parkites and visitors.

An alert occurs when City Hall anticipates a drop of up to 9 percent in money reserves or major revenue sources like sales taxes, property taxes and building fees. Bakaly said the last time an alert was declared was in 2000. At that time, construction dipped as the area prepared for the upcoming Olympics.

Bakaly said City Hall is generating projections for the winter, when sales taxes typically spike as skiers vacation in Park City. He said he must consult with City Hall’s budget team before deciding whether to declare the alert.

If conditions worsen, City Hall would take additional steps, but Bakaly said it is unlikely the local government would face a crisis.

Jim Hier, a Park City Councilman who closely monitors the City Hall budget, said it appears certain the sales-tax revenues will be down and he is concerned about a drop in the fees collected from builders.

He said there could be less money available for construction projects once officials consider the next municipal budget. The budget talks usually start in earnest in the spring, with the City Council approving a spending plan in June.

Hier said Park City has enjoyed a "constantly expanding economy" since the early part of the decade.

"To me this is more of a normal business scenario, more than the past four or five years," Hier said.

Bill Malone, who helms the Park City Chamber/Bureau, has recently indicated there might be "fewer people this year" visiting during the winter. He said in an interview it is too early, however, to declare the normally lucrative ski season a bust even though he said the volume of calls about vacations is "way down."

"January is still our biggest month for booking," Malone recently told the Summit County Commission.

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