Sundance deal prompts fee hikes
May 3, 2006
City Hall wants businesses in Park City to pay more in fees in an effort to fund the bus system and contribute cash to the Sundance Institute, City Manager Tom Bakaly said on the eve of the government’s annual budget talks.
Bakaly on Thursday will approach Mayor Dana Williams and the Park City Council for the start of the government’s annual budget talks and it seems that the fees will likely be the pivotal issue in 2006, the second of Park City’s two-year budget cycle.
Budget talks during the second year of the cycle are normally reserved for less ambitious programs but Bakaly’s request for the fees could turn the spring into a polarizing debate between merchants.
In interviews, two business leaders said on Monday that they are leery of the higher fees.
The budget talks are scheduled to last through mid-June and discussions regarding the fees on business licenses are tentatively slated for May 25.
Business licenses are figured based on an equation considering the type of business and its size. Bakaly wants to increase the transit-related portion of business licenses by 25 percent. The fees collected from business licenses help fund the city’s fare-free bus system.
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He then wants to add what is being called a special-event fee, which would also vary between businesses. It would range from 2 percent to 60 percent on a portion of the overall license. Lodges and restaurants would pay toward the higher end of the range and offices and the city’s two ski resorts would pay at the lower end, Bakaly said.
The formula City Hall uses to determine business-license fees causes the wide range and officials said it is difficult to predict what the increase would be for a typical business.
The government estimates that the special-event fee would bring in $168,000 each year. Of that money, the city plans to pay $110,000 to Sundance and put the rest toward other special events.
The Sundance earmark is notable in the aftermath of a 2005 deal between City Hall and the institute to hold the Sundance Film Festival in Park City through at least 2018. It required paying the institute $330,000 annually, which will be split between City Hall, the Park City Chamber/Bureau and businesses.
"There was a commitment from the business community to contribute," Bakaly said, acknowledging that the Sundance deal prompted the special-event fee.
Ken Davis, the head of the Main Street merchants, said he is not pleased with the increases but accepted the government’s stand.
"It’s just another cost of doing business," he said. "We will reluctantly have to pay them."
Rodman Jordan, who leads the North of Main merchants, said in a statement that, "tax revenue generated from business licenses is counter-productive to economic growth and sustainability."
He prefers that City Hall generate the needed money through sales, restaurant and hotel taxes, which he said "have proven themselves economically sound" and are "customer-funded."
The special-event fee slightly resembles a proposal in 2002 in which Main Street leaders wanted to charge a tax on downtown businesses, $100 a year for most offices, between $200 and $300 each year for most retailers and between $300 and $500 annually for most restaurants.
It was unclear at the beginning of the week if the 2002 numbers would be similar to those that would be charged under Bakaly’s proposal.
The 2002 proposal was meant to fund a part-time executive director for the merchants and pay for marketing and special events.
The City Council at the time supported the idea but enough merchants signed petitions against the proposal that the elected officials were forced to scrap the cause.
There was widespread criticism of the idea, which would have created what was called a ‘Business Improvement District.’
The current special-event fee, however, appears more structured than the 2002 idea and it would be charged to businesses throughout Park City, not just those in the Main Street core, as was the case in 2002.
Also, the government has publicized its intent for the money, a contrast to 2002, when lots of merchants on Main Street were worried that the proponents had not adequately described how the money would be earmarked.
Meanwhile, in a separate request, Bakaly wants to increase the business-license fees charged to escort services to cover extra enforcement and inspections.
The city said that less than 12 businesses would be charged.