As the summer tourist season winds down, the Eastern Sierra will see a lull in visitors for the next few months. While the slower month may mean a drop in business and guests, the TOT numbers (transient occupancy tax) from Fiscal Year 2018-2019 numbers are in which, when paired with July’s TOT numbers, paint a picture of relative prosperity for the area.
In all, Mammoth Lakes saw more than $20.2 million in TOT revenue from July 2018 to June 2019, with record numbers in nine months out of the year.
This TOT total exceeds the previous year’s total of $17.9 by more than $2 million, a 13.1% increase.
The biggest overall change came in April 2019, which saw a 41.3% increase in TOT revenue from April 2018.
*Thank you Mother Nature with a side helping of Ikon Pass.
Lara Kaylor, director of Communications and PR at Mammoth Lakes Tourism (MLT), suggested one aspect of such a drastic change could have to do with lodging properties increasing their rates but also pointed out that “it’s really a community effort”.
“It’s amazing to see that money,” says Kaylor.
According to Kaylor, MLT’s goal is to have “less peaks and valleys”, that is, to keep things consistent in terms of tourism throughout the year so that businesses and employees won’t dread an offseason.
“It’s not just winter anymore,”says Kaylor, “we really are becoming a year-round destination”.
She also pointed to MLT’s increased efforts in marketing the summer and fall seasons in the past five years as a means of maintaining that consistency.
MLT draws a great deal of its funding from another tourism-related source: the Tourism Business Improvement District (TBID), an assessment rate that varies for different business types (restaurants, lodging, retail).
TBID raises approximately $6 million annually.
What does all this mean for the town? The Town’s website defines TOT as “an essential component of the town’s funding mechanism” comprising “60% of the General Fund [revenue], providing for services such as snow removal, recreational programming, and road maintenance”.
Documents from the town indicate that the budgeted revenue from TOT for FY 2018-2019. was $13.5 million, a relative far cry from the actual figure generated during that time span. And it appears as though that trend may continue: July 2019 generated close to $1.9 million in TOT, 60% more revenue than the FY19-20 budget estimated.
Town Finance Director Rob Patterson called this revenue “a good start to the program” and “more indicative of how we’re rolling off of last year”.
Looking to the coming months, “Last summer, we had a lot of problems with smoke so I anticipate September and August…to be pretty strong,” says Patterson.
That being said, Patterson also urged caution, stating that “December will be the first test of how strong the economy is.” And how strong the weather pattern is.
Last year, Mammoth Lakes Tourism panicked and asked for $250,000 in emergency marketing funds when it hadn’t snowed a week before Thanksgiving.
It then proceeded to dump for the next five months.
A Town Council staff report written by Patterson for the June 5, 2019 Town Council meeting indicated that the base TOT for FY2019-2020 was recommended at $13.5 million in TOT, which figures to precisely 58.6% of General fund budgeted revenue for the year.
The report further states that “While the last four years of actual TOT has significantly outperformed this estimate, we need to remain vigilant of the volatility in this main source of revenue”.
Patterson further explained the meaning behind that statement, stating, “I’d like to keep the number low because we have not really had a downturn, a recession. That’ll tell us how low the number will shrink.”
He provided two factors in his cautious approach: the upcoming election year and the lifespan and the lifespan of relative prosperity. “I’m sure in the next two to four years there’ll be something of significance that comes down,” says Patterson.
He also expressed concern that growing the budget too quickly could result in a larger local government that, if need be, could be difficult to constrict [in a downturn] and pointed to the relatively short history of the TOT and TBID programs as something to account for. He noted that neither program has really been tested against a major recession.
Patterson did concede that the next year’s budget will require an increase on account of employee salaries and other costs [skyrocketing pension and benefit obligations] going up.
So what about the extra $6.5 million or so from this year? “When we do have excesses,” says Patterson, “we can spend them on one-time expenditures so that it pays for things but doesn’t go into our annual operating budget”. He cited examples such as the multi-use facility, parcel project, road work, and to a lesser extent, the new civic center.
There are those about town who would disagree with this handling of the money, to which Patterson says “I think it’s easy to make those sort of expectations when you’re not the person in charge”.