Elko Convention & Visitors Authority Lodging Committee Meeting Comfort Inn 2970 Idaho Street Elko, NV Wednesday, March 25, :00 PM.
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1 Elko Convention & Visitors Authority Lodging Committee Meeting Comfort Inn 2970 Idaho Street Elko, NV Wednesday, March 25, :00 PM. Minutes Committee Members Present: Michelle Mota, Comfort Inn Chris J. Johnson, City of Elko Mike Patel, Scottish Inns Ken Patel, Quality Inn & Suites Jolene Stone, HIE-Elko, Best Western, TBird Gary Morfin, Stampede Motel Barry Bhakta, Comfort Inn Mahendra Bahakta, Budget Inn Jairah Ramirez, Hilton Garden Inn Michelli Leedy, Holiday Inn Express Julie Carroll, Quality Inn & Suites Pamela Rand, Motel 6 Matt McCarty, Townplace Suites Krystal Oppenhein, Red Lion Ashely Libro, Red Lion Lenny Martinez, Red Lion Kitty Nash, Oak Tree Inn Dawn Stout, City of Elko James Wiley, City of Elko Curtis Calder, City of Elko Reece Keener, City of Elko ECVA Staff Present: Don Newman, Executive Director Tom Lester, Tourism & Convention Manager Kimberlee Longley, Facility & Catering Coordinator 1. Welcome & Introductions; Barry Bhakta, Chairman Mr. Barry Bhakta called the meeting to order at 6 pm. 2. Public Comments Non-Action Item Pursuant to N.R.S , 2 (c) (3) this time is devoted to comments by the general public, if any, and discussion of those comments. No action may be taken upon a matter raised under
2 this item on the agenda until the matter itself has been specifically included on a successive agenda and identified to be an action item. None at this time. 3. Approval of the Minutes from the September 24, 2014 meeting Action Item (public comment) Mr. Matt McCarty made a motion to approve the minutes from the September 24, 2014 meeting, Mr. Mahendra Bhakta seconded the motion. Motion passed unanimously. 4. Presentation by the City of Elko regarding possible tax increase- Non-Action Item Mr. Curtis Calder introduced himself as well as Mr. James Wiley, Ms. Dawn Stout, Mr. Chris Johnson, and Mr. Reece Keener. Mr. Calder stated that they was going to go over 2 large projects where some of the funding would be from a proposed 2% room tax increase. He then asked Mr. Wiley to give an overview of each project. Mr. James Wiley first spoke on the Elko Sports Complex project. He stated that the city of Elko owns about 80 acres by the Humboldt River and that for years a sports complex has been in discussion to go in that area. Mr. Wiley spoke on how plans were starting to move forward and that the complex would be built in 3 phases. Phase 1 would include 3 softball/baseball diamonds, parking, and wetland area. He also spoke on how Elko is currently pressed for field space in both the youth and adult sports and that having a sports complex would draw people from out of the area with tournaments; which would in turn create room nights. He further stated that having tournaments would help the Elko community as a whole and that Elko has put itself on the map with the Little League. Mr. Wiley spoke on how the Little League will be coming to Elko next year for a tournament. Mr. Wiley spoke on how adult teams travel as well and that the sports complex would be a multiuse facility which would include soccer fields, baseball diamonds, and football fields. Due to the size and cost of roughly $20 million dollars the sports complex would be built in phases. Mr. Wiley then spoke on the cost of Phase 1 which would be 11 million dollars. He spoke on how 1/3 of the funding would come from the City of Elko, 1/3 would come from private donors, and final 1/3 would be in kind labor and community donations. The 1/3 of funding from the City of Elko would be from the 2% room tax increase. Mr. Wiley then asked the committee for questions or comments. Mr. Matt McCarty asked how the fields would convert from one to the other.
3 Mr. Wiley responded that portable mounds would be used and that the Little League field by the wetlands would not be a convertible field due to its proximity to the wetlands. He also spoke on the sports complex would also have a concession stand as well as batting cages. Mr. McCarty asked if the soccer fields would be crossing the baseball fields and what kind of surface would it have. Mr. Wiley stated that an artificial surface would be used so that an extended season could be possible with no damage to the fields. The Little League field would have natural grass. Mr. Tom Lester asked if the artificial surface would be made of rubber. Mr. Wiley responded that yes, it would be a green carpet with rubber and sand mixed in it. Mr. Lester asked Mr. Wiley if he was aware of the studies showing that type of surface may be causing cancer. Mr. Wiley stated that he had seen articles on the topic but that it hasn t been proven and if is proven to do so another option would be utilized. Ms. Jolene Stone asked about entrances for the sports complex. Mr. Wiley stated that one entrance will be off of Erecart on the south side of the bridge and the other entrance will be off of Bullion Road at the West end of the current residences. Ms. Dawn Stout spoke on how a 6.5 million dollar bond is being considered. The bond would be over a 20 year period. Ms. Lenny Martinez asked what would happen to the existing fields. Mr. Wiley stated that the existing fields would be maintained but would eventually house a new pool facility and a rec center. Mr. Newman asked if there were any projections on how many traveling teams would be brought into the area due to the sports complex. Mr. Wiley said that with the completion of phase 1 plus the existing fields being used, Elko could see about teams per weekend. The Little League brings in a little less but that the numbers could go up depending on the facility. Mr. McCarty asked if the 20 million to complete the facility was today s price or the projected price over the period of years for the project to be completed. Mr. Wiley stated that the 20 million was today s price and that the longer the project takes to get completed the more it will cost.
4 Mr. Curtis Calder spoke on how Phase 1 will be the most expensive to complete due to all the grading needed on the ground. Mr. Reece Keener stated that a lot of the expense for Phase 1 would also come from the sewer and water lines that were needed as well as the electricity having to be put in. Mr. Wiley spoke on how Phase 2 would have an estimated cost of 3 million and that Phase 3 would be an estimated 2-3 million in cost. Mr. Newman asked if there had been a breakdown on the fees to help pay for Phase 2. Mr. Wiley stated that the fees hadn t been broken down for each phase. Mr. McCarty asked if the funds generated by recreational activities stayed in the rec fund or do they go to the other funds? Ms. Stout stated that the money generated from youth recreations would go to the rec fund and be used to maintain the facility. Ms. Martinez asked how marketing for the sports complex would be paid for. Mr. Wiley stated that the rec funds would be used for marketing and that the City may ask for marketing support from the ECVA. Mr. Barry Bhakta asked about a timeframe for the 3 phases. Mr. Wiley could not give a time frame as there would be a lot of other projects happening at the same time as the sports complex. Mr. Barry Bhakta asked about the cost to maintain the facility. Mr. Wiley stated it would be around k a year to maintain the facility. Mr. Calder stated that the sports complex would hopefully be a self-sustaining facility due to the tournament playing that would occur there. He then asked Mr. Wiley to please speak on the second project; which is the replacement of the water irrigation system at the Ruby View golf course. Mr. Wiley stated that the Ruby View Golf course needs a new water irrigation system as the current system is old and starting to experience a lot of failures. He went on to speak on how this is a necessary project and that the current system has long outlived its life span. The new system will be more efficient and will have triple the amount of heads than the current system. He then spoke on how the cost will go down due to the efficiency and that the new system will be fully automated and easier to control. He concluded speaking by saying that the new system would be
5 good for 30 years and would cost around 3 million. The 3 million would come from the remaining portion of the 2% room tax increase. Mr. Matt McCarty asked when the project would begin. Mr. Wiley stated the City hoped to start the project in the fall, work for a few months (weather permitting) and then finish by June 1 st of next year. Ms. Stout spoke on what the room tax funds currently, how much money is in each fund, and how the money is divided to different groups. She spoke on how there are two bond payments as well as how much money is actually left over at the end of each year. Ms. Stout concluded by stating that the replacement of the water irrigation system is a critical project as the current system is failing and to just keep trying to save money each year isn t going to work to pay for these projects. Mr. Gary Morfin asked about the 400k in the recreation fund rolling over. Ms. Stout said yes, it rolls over. Mr. Morfin inquired about paying off the project within four years using the money projected during that time. Ms. Stout stated that the full amount couldn t be used just for the irrigation replacement due to the other projects also happening at the same time. Mr. Newman asked about using the money from the sewer fund to pay for the irrigation replacement. Ms. Stout said that the City could not legally use those funds as they are only allowed to be spent on the sewer system. She then spoke on how the new irrigation system would be more efficient in the way the water is used as well as how much inflow the sewer plant receives. Mr. Chris Johnson spoke on how the City had just put in a new line to the sewer and that the grass quality has improved at the golf course. Mr. Calder spoke on how the upkeep of the sewer plant is a very expensive task and that the cheap parts are around a million dollars. Mr. Newman asked what would happen if a drought occurred. Mr. Wiley stated that the golf course would not be affected due to the use of affluent water. Mr. McCarty asked about the distribution of funds from the recreation fund. Ms. Stout spoke on how the money is divided up between different funds. (SEE RECREATION FUND BREAKDOWN FOR FURTHER DETAILS)
6 Ms. Stout then stated that the 2% room tax increase would be dedicated to the bonds for the two projects-sports complex and golf course irrigation replacement. Mr. Newman asked about possible grants for the projects. Mr. Johnson spoke on a foundation dedicated to Northern Nevada cities. The Pennington Foundation is managed by Mr. Richard Stults and that in 2015/2016 the foundation will receive money thru the sale of some assets as outlined in the estate. The money from the foundation has to go to the Northern Nevada area and the sports complex would be a perfect project to receive the funds. Mr. Stults has been in contact with the City and more information should come further down the road. Mr. Morfin asked if that foundation was also donating to Winnemucca s sports complex project. Mr. Calder stated that while Winnemucca is building a sport s complex they are going about it differently than Elko. Mr. McCarty asked if there would be competition from Winnemucca for some of the Pennington Foundation money. Mr. Calder stated that he didn t believe that there would be competition as Mr. Stults knows that Elko is very serious about building the sports complex due to the amount of money already spent on the planning phase. Mr. Wiley spoke on how they are hopeful to have a design team speak at one of April s City meetings. Mr. Lester asked how long it would be before the hotel rooms would actually start to be filled by those coming in to use the sports complex and stated that a few fields will not fill the rooms right away. Mr. Calder stated that the existing fields would also be utilized during the completion of phase 2 and 3 of the sports complex. Mr. Lester stated that he felt it would be hard to attract teams while the complex was completing phase 2 and 3 when the Winnemucca complex would be completed. Ms. Stone stated that as a mother of two boys who traveled for sports there is a lot of interest from other teams to come to Elko. She said since no one has come here before they all want to rather than go to the same towns over and over. Mr. Wiley stated that it would be a matter of marketing and getting in on the traveling circuit. Mr. McCarty asked about the budget showing no growth for 5 years. Ms. Stout stated that while forecasting a budget you work with what you know from the past as well as current conditions.
7 Mr. McCarty stated it looked like it would take 8 years to pay just interest on a 20 year bond. Ms. Stout stated that was normal for a 20 year bond. Mr. Calder reminded the committee that this was for an estimated 5% bond which in all actuality could be less; until it actually went to bond it was hard to say what the percentage would truly be. Mr. Morfin asked why not use an investment to pay for the complex or a portion of it. Ms. Stout explained that the money in that account was actually for the sewer and legally could not be used. Mr. Newman asked about doubling up on the sports complex to complete it quicker as well as if there were any other investment funds that could be used for the projects. Ms. Stout stated that the City makes very little interest on their investments and that there are a lot of projects happening in 5 years. Mr. Morfin asked if there had been more than 1 bid on the sports complex. Mr. Wiley stated that bidding would be limited due to all the special requirements the builder had to meet and that the City wants the most the qualified company for the design process. Mr. Morfin stated that it didn t sound like the numbers presented were hard numbers. Mr. Wiley stated that no, they were not hard numbers just estimates. Mr. Newman stated that he felt that money generated by tourism should not be used for the water irrigation project at the Golf course. If the room tax increase is used for that project then the City and Golf course need to focus on bringing in more golf groups into Elko to help offset the use of tourism money. Mr. McCarty asked if the 2% increase would go away after the projects were paid for. Mr. Calder stated that yes, once the bonds were paid in full the 2% increase would go away. Ms. Jariah Ramirez asked how long phase 1 would take. Mr. Wiley stated anywhere from 8-12 months depending on weather. Mr. Calder spoke on how it would be better to increase the room tax now rather than later so that money could go into a fund for these projects. Once the projects were ready to be bonded the money already in the fund could be used as money down which would mean less to finance.
8 Mr. Newman asked if the 2% would only be used on the sports complex and the golf course irrigation replacement. Mr. Calder stated yes. Mr. Morfin stated that the small hotel owner will have to raise the room rate even in bad times in order to pay the increased room tax. He further stated that he is not against the projects but wants to make sure that everything is transparent as well as ensuring that all other methods of raising funds have been looked at. Mr. Calder stated that all other methods have been looked at and really the only tax based revenue is the room tax. He spoke further on the rules/regulations of property tax increases. Mr. McCarty asked if the rules applied to the new residents moving into the area. Ms. Stout explained how the taxation worked and that the maximum is 3% per year on increases. Mr. Calder stated that the county could raise sales tax and then spoke on different tax scenarios. He then spoke on how smaller projects (such as the tennis courts) are paid for in cash while larger ones (new police station) are bonded out. Mr. Lester asked what will happen in 5 years when the pool s roof is leaking and the sports complex still isn t finished. He asked will a new facility be built and will the room tax need to be raised again. Mr. Calder stated that projects will have to be prioritized and make decisions as situations occur. He gave the example that if the pool needs a new roof in 5 years and that project cannot be paid for the City may look at removing the structure from the around the pool and only having an outdoor pool for a while. Mr. McCarty stated that he meant no disrespect to the City but that 100% of the ECVA s funds go towards putting heads into beds and that the ECVA directly supports the local hotels in their efforts to fill rooms. He stated that he felt that if there is any funds from the increased room tax than those extra funds need to be given to the ECVA to ensure that money benefits the hotels. He concluded by speaking on how once the bonds for the projects are paid than the 2% increase either needs to disappear altogether or go directly to the ECVA. Mr. Calder stated that excess funds allocation would be possible; it would just have to be designated to go back to the ECVA. Mr. Lester stated that once the sports complex is finished then Elko will see a huge impact on tourism and revenue will be generated. He did state that he did not feel that the irrigation replacement system should be paid for with the room tax increase as golf does not fill hotel rooms.
9 Mr. Morfin stated that he wanted to make it clear that the ECVA board did not seek a room tax increase in order to expand the ECVA facility and that there would be no use of City funds to pay for the expansion. He further stated that he wanted to make sure that all funding options were explored because he hated the idea of raising taxes of any kind. Mr. Lester mentioned that White Pine County would be raising room taxes in order to pay for their Convention center. Mr. McCarty stated that he hoped that the City would get a great interest rate on the bond and build the sports complex quickly so that the revenue comes in quickly to help hotels offset the 2% room tax increase. Mr. Lester stated that the sooner the project is done the easier it will be to market the sports complex. Mr. McCarty mentioned that when he reviewed the City s agenda for their last meeting he had no idea that the room tax increase was being considered. He further stated he didn t even see the room tax increase proposal until reviewing the City s budget. He concluded speaking by thanking each member from the city for coming. Mr. Newman asked if anyone had any questions and then he thanked each member from the city for answering all of the committee s questions. He finished speaking by saying that he hopes each property receives more booked rooms as a result of the two projects and encouraged the City members to spend wisely and move through the phases quickly. Mr. Barry Bhakta stated that due to the time the rest of the agenda item (staff reports) could be found within the meeting packet and read at each committee member s leisure. He instructed the committee that if there were any questions about the staff reports to please call the ECVA staff directly. 9. Next Lodging Committee meeting: May 27, Adjourn Meeting adjourned at 7:45 PM. Don Newman Executive Director
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