Economy rebounds in 1st quarter
By Dennis Webb
Post Independent Staff
Glenwood Springs continues to turn the corner economically after skidding downhill the past few years.
Revenues from the city’s sales and accommodation taxes both rose during the first quarter of this year. Sales tax revenue grew by about 1.8 percent, or $38,900, over the first quarter of 2004, according to a report from the city’s finance director, Mike Harman. Accommodation tax revenue, the key measure of tourism activity, grew nearly 7.4 percent, or about $7,200, over the same period a year earlier.
Sales tax revenue, the city’s chief source of funding, fell 1.78 percent last year, from $10.25 million to $10.07 million. The decline continued a trend that began in 2002, due to factors including a post-9/11 national economic slowdown, the city’s Coal Seam Fire in 2002 and the opening of the Wal-Mart superstore in Rifle in 2003.
However, sales tax revenues began to show signs of improvement late last year. November and December revenues topped the same months the previous year. The rebound continued with a 3.65 percent increase in January over the same month a year earlier, a 0.72 percent increase in February and a 1.14 percent increase in March.
Actual revenues were highest in March, at $837,785, followed by January at $700,300 and February at $678,177.
However, the February and March figures still lagged behind the totals for those months in 2001, 2002 and 2003. By contrast, January’s strong showing fell short only of the $725,228 January posting for 2003.
After rising 3.8 percent last year, accommodation tax revenues rose took off in January and February, achieving 10.42 and 14.62 percent increases each month, respectively, over the same months a year earlier. Growth slowed sharply in March, amounting to only a 1.28 percent increase.
However, March is historically a stronger month for tourism than January and February, and this year was no different. Accommodation tax revenues reached $45,798 in March, compared to $31,060 in February and $28,374 in January.
While March’s total lodging tax revenues were still lower than in the same month in 2001 and 2002, January and February’s totals were higher than the same months even in 2001, when annual sales tax revenues peaked.
City manager Jeff Hecksel said he hopes the positive results of this year’s first quarter can be sustained in later months. The city previously has gotten off to a good start only to lose ground the rest of the year, he said.
“Maybe if we get another quarter positive rather than negative that would be a good sign. We’re all very conservative in how we look at that but certainly positive is better than negative,” he said.
The problem is that even if this year’s revenue continues to grow, it isn’t likely to be close to what the city collected in 2001. But while revenues have declined in recent years, expenditures have continued to rise, thanks in part to rising prices for things such as fuel, he said.
Contact Dennis Webb: 945-8515, ext. 516
The quarterly financial report will be presented to Glenwood Springs City Council at its meeting tonight. Among other scheduled action, council will:
– Consider renewal of a lease and license to encroach in connection with Adventure Paragliding’s operation. Council may consider a complaint by a city resident about the condition of the takeoff site on Red Mountain. That is private property, but the landing site on the east side of the Roaring Fork River is city property.
– Conduct second readings of ordinances regarding animal control and banning motorized vehicles on city trails.
– Give a first reading to an ordinance amending the definition of child-care facilities.
– Consider amending minimum lot size and front porch encroachment language for the planned unit development at Cardiff Glen.
– Hold a closed-door meeting to receive legal advice regarding potential litigation.
– Consider changing the meeting times of the first council meeting each month from 6:30 to 7 p.m., to better allow for work sessions before each meeting.
Council will meet for tonight, anyway, at 6:30 p.m. Council also will hold a 7 a.m. breakfast meeting today. In addition, it will hold a 5 p.m. work session to further discuss water and sewer rates, which the city is looking at possibly increasing.
In addition, council has scheduled a 7:30 p.m. work session to further discuss putting a transportation tax on this fall’s ballot, and what should be funded by the tax.
All council meetings will be at City Hall, 101 W. Eighth St.
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