Just two weeks after rejecting a local bed tax increase, the Ely City Council reversed itself at their June 23 meeting and voted to approve the first reading of an ordinance to impose the 2 percent hike on local hotel rooms. The ordinance will increase the city’s transient lodging tax for visitors who bed down at local inns to 12.5 percent on Aug. 1 and then up to 13.5 percent on July 1, 2017.
Councilmember Kurt Carson, who had originally voted against the ordinance, joined Councilmember Bruce Setterstrom in putting the measure on the council agenda. Setterstrom said that the tax was necessary in that the city had serious infrastructure needs that needed to be addressed in a timely manner and that the tax was the best means to achieve those needs without having to seriously impact local residents.
Councilmember Sam Hanson moved to approve the ordinance, which was seconded by Councilmember Jolene Gardner.
Councilmember Pat Robison, who also voted down the tax at the last council meeting, thanked Setterstrom and Carson for putting it back on the agenda.
Mayor Melody VanCamp, who broke a 2-2 deadlock with her vote at the last council meeting, the vote which shot down the ordinance, said she had since talked with City Administrator Bob Switzer and realized that the only other option was to raise utility fees, which the council originally imposed in 2011 and cost residents $10 for water and $5 for sewer.
VanCamp said an increase in the utility taxes would place a burden on Ely residents and take over 10 years to garner the amount of money needed to make the improvements.
“Meanwhile, in that 10 year period, we’re hoping and praying we don’t have a substantial break in our mainlines,” Switzer said, noting that the average age of the city’s cast iron water and sewer lines was about 65 years old.
Switzer said that the Nevada Department of Transportation (NDOT) had an improvement project planned for Aultman Street, which runs through the city’s downtown core, and Great Basin Blvd. in 2018, and encouraged the council to take advantage of the opportunity to replace infrastructure under those main boulevards while they were already ripped up rather than wait for 10 years and then tear the streets up again.
Switzer said that the city collects an average of $344,000 a year from those fees and has banked approximately $1.4 million thus far in a capital improvement fund. He estimated the cost of the planned infrastructure projects at $5 million and estimated the city would have $2 million by the time the project began. He surmised the lodging tax would bring in $250,000 a year once it was fully implemented in 2017. He said there was no sunset placed on the tax.
The council voted 5-0 to pass the tax.