As mentioned in Part One, the Town of Pagosa Springs recently approved a contract with a genttleman from San Antonio — David Harris — to serve as the new Town Manager.
The previous Town Manager, Andrea Phillips, had served for almost exactly six years before resigning in early August of this year, reportedly to be closer to family. As fate would have it, early August was the beginning of ‘budget season’ for the Town government, the time of year when the Town makes its most important decisions about the immediate future, including — for example — how many employees to keep and recruit (more than last year), how to pay them enough to allow them to afford to live comfortably in our community (more than last year), how much money to dedicate to support local non-profits (less than last year), and how much to spend on maintaining a slowly decaying infrastructure.
And of course, how much to spend on tourism industry subsidies.
Luckily — considering the need to have a complicated budget completed and approved by December — the Town Council was able to lure former Town Manager Greg Schulte out of retirement, to serve as Interim Town Manager until the position could be filled on a more permanent basis. (Understanding that nothing is permanent, except death and taxes.)
Mr. Schulte, working with an efficient and professional staff, was able to present a draft budget for the Council’s consideration at the November 16 meeting. The budget included minor adjustments to the Town budget presented on October 3.
You can download the November 16 budget here.
That November 16 meeting was the last one at which Mr. Schulte is expected to serve as Interim Manager, with Mr. Harris scheduled to take the reins this week. So the staff had ordered a ‘Thank You Greg’ farewell cake to celebrate Mr. Schulte’s brief but important tenure.
Mr. Schulte took it upon himself to cut the cake.
Another possibly important task that Mr. Schulte had handled during his fairly brief tenure?
A few weeks ago, the Archuleta Board of County Commissioners had announced that they wanted to re-negotiate the Intergovernmental Agreement (IGA) that governed the composition of the Pagosa Springs Area Tourism Board and its funding mechanism.
The Town and County have been jointly subsidizing the tourism industry for a number of years now, using Lodging Taxes collected from those same tourists. The Town collects a 4.9% tax on overnight stays in motels, vacation rentals and B&Bs; the County collects a 2% tax.
For the past decade, those tax subsidies have been climbing rather steadily…
…Until 2022, when — to everyone’s surprise — the tax revenues declined.
Here are a couple of graphs published by the Tourism Board.
In the top graph, we can see the explosion of tax money generated by tourism during 2020 and 2021, and then a slight downturn in 2022.
We see a similar effect in the second graph, which shows the County’s 2% Lodging Tax decreasing during the first half of 2023, relative to 2021and 2022.
If I were sitting on the Tourism Board during 2020 and 2021, I might have felt some feelings of pride, considering that the goal of the Board is to increase tourism. I might have felt like the Tourism Board was at least partly responsible for the tax collections finally exceeding $1 million a year in 2020.
Of course, not all of Pagosa’s tourism growth during the COVID crisis was due excellent marketing by the Tourism Board. We’ll look into that issue a bit deeper in Part Three.
The decline in Lodging Tax during 2022 and 2023 may have caused some discomfort among the Archuleta County commissioners, because they voted, this past summer, not to renew a tax-sharing memorandum with the Town.
The discomfort may have been generated, in part, by local business owners who were engaging in criticism of the Tourism Board?
In 2015, the Town and County adopted a Memorandum of Understanding (MOU) regarding the administration of Lodging Tax subsidies. The MOU created the Pagosa Springs Area Tourism Board, jointly funded by the two Lodging Tax streams, for the purpose of promoting Pagosa Springs as a tourism destination… the County and Town having agreed that tourism was an integral part of the local economy and that they fully support providing subsidies for marketing of Pagosa Springs and Archuleta County as a tourism destination.
The Town Council and BOCC appointed members to a ‘Working Group’ to review the previous MOU and create a new Intergovernmental Agreement (IGA). Mr. Schulte was part of that ‘Working Group’.
The ‘Working Group’ also reviewed and incorporated suggestions from area lodging companies who had sent a letter to both the Town Council and the Board of County Commissioners, demanding changes to the Tourism Board composition and activities.
The negotiated IGA has since been approved by the BOCC and by the Town Council.
The new agreement requires the Tourism Board to be heavily stacked with tourist industry and business representatives. To wit:
1.2.1 The Tourism Board shall consist of nine Board Members, all of whom shall be appointed by both the County and Town Council, except as set forth below:
- 1 County Commissioner (appointed by the County)
- 1 Town Council Member (appointed by the Town Council)
- 1 Lodging Association Member
- 1 Chamber of Commerce Member
- 1 Board of Realtors Member
- 1 Short Term Rental Representative
- 1 Hospitality Representative
- 2 At-large Members from the general public of Archuleta County
Some people have claimed that we have a ‘representative’ form of government, here in America.
I’ve personally never seen a local government board that, in its required composition, so dramatically fails to represent the broader community.