The Park City City Council received a lengthy briefing on the financial health of the city at their meeting Thursday night. Despite relatively strong financials and better than expected summer sales tax numbers, the council is still worried about the months ahead.
There was actually quite a bit of good news at Thursday’s financial update to city council. Sales tax revenues have outperformed expectations this summer, Park City’s credit rating is good, even great, and the city’s capacity to take on debt is in really good shape.
Councilmember Steve Joyce told KPCW on Friday that despite the strong summer, winter will be a different challenge, and that makes him and his colleagues a little nervous.
“I’m worried,” said Joyce. “To me, there’s a couple of things. One is I think everybody was surprised at how well the summer went. Now we’re in winter and I think we’re really starting to see a slowdown, people don’t want to eat outside and, yeah, you can get some curbside pickup and stuff, but that’s just not the same and it would sure as hell help if it would snow out there because we want to actually get some skiers here. So I’m worried; I don’t think we can look at what happened in the summer and feel comfortable about what’s coming in the winter.”
Joyce and fellow Councilmember Becca Gerber recently completed a routine survey of local businesses and found that even though the summer was stronger than anyone expected, businesses saw a sharp decline in November.
Official sales tax numbers are released on a two month delay, but Joyce said November is typically one of the weakest months of the year and the December to March peak ski season is really what makes or breaks many local businesses.
“People definitely saw a big drop off,” he said. “It was like September was great, October was pretty good so I think we’ll see good numbers from October, but November was really a big drop off to everybody we talked to, but it normally is so I think it’s just even a little bit worse. Now is when it counts. As much as I care, I really don’t care about November because it doesn’t make that big an impact. Now it starts to count, we’re going into Christmas.”
Now that we know that COVID-19 vaccines are in fact real and on their way, Park City is looking at what the recovery from the pandemic could look like.
According to Thursday’s presentation, even with a solid bounce back, the next fiscal year will likely not be at pre-pandemic levels. A full recovery could take years.
One bright spot of the presentation was the city’s ability to take on debt. Even with the significant hit taken this year, Park City still has the ability to borrow upwards of $100 million, thanks to frugal financial planning and a strong credit rating.
Joyce said of all the things to worry about during the pandemic, Park City’s ability to borrow money is not one of them.
“We can still borrow just a tremendous amount of money, close to $100 million, which I wouldn’t recommend by any means,” explained Joyce. “We have a lot of room in debt service. It’s a different question of should we, but even with the little two year spike that we have, gauche, we’re so low that it’s just not a big deal.”
One major project on the horizon is the Arts and Culture District at the corner of Bonanza Drive and Kearns Boulevard. The project is expected to cost in the ballpark of $70 million dollars and will be the topic of discussion at next Tuesday’s special meeting of the city council.
Joyce has been outspoken about the funding for the project at past council meetings and Tuesday offers a hard look into just how the city plans to pay for it.
He said if it comes down to borrowing money to do it, he’d be in favor of the public having a say in the process first.
“I want to understand how we’re going to pay for it, what tax money we have already available, what capital money we have sitting around, and then what we would have to do bonding wise,” he said. “At some level, the question will be, you know, some sources we can bond against just by the city council making a decision, of course with public input, but for things like general obligation bonds, it actually has to go to a public vote. My inclination is if we need to borrow a bunch of money for the Arts and Culture District, I like the idea of putting it out to the public. I like to see what their level of support is.”
Tuesday’s special city council meeting about the Arts and Culture District is scheduled to begin at 6pm. Details on how to participate virtually can be found here.
