ACRA bailout not worth the gamble | AspenTimes.com

ACRA bailout not worth the gamble

Aspen, CO Colorado

Now is not the time for Aspen City Hall to engage in risky business, but it appears poised to do exactly that.

On Monday, the City Council will take up a marketing budget that contemplates forwarding $500,000 to the Aspen Chamber Resort Association (ACRA), which would use the funds to market the resort.

ACRA would be required to pay $400,000 of the total back, but only if voters approve a Local Marketing District or some other mechanism to raise additional marketing dollars in a future election, possibly as soon as November 2010.

If voters reject the district – in which Aspen lodges would charge an additional 1 percent sales tax that would generate $1 million annually for marketing – the city would be out $400,000.

This newspaper endorsed the Local Marketing District earlier this year because we believed marketing Aspen is essential to the resort’s economic success. The ski-resort industry is highly competitive when it comes to marketing, and Aspen would fall by the wayside while competitors such as Vail plow ahead to keep their name in the skiing public’s consciousness.

But snafus with the mail-in ballot forced the county clerk to pull the Local Marketing District question – Referendum 5A – from the November ballot. That’s because only voters who resided within the district were supposed to vote on the proposed tax, but some voters within the district didn’t find the measure on the ballot, while others, living outside the district, did find the question.

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Because the ballot was pulled, it put ACRA in a quandary of sorts. Now City Hall is coming to the rescue with a $400,000 advance, and has said ACRA could pay it back in annual installments of $100,000.

This show of generosity also comes just months after City Hall has laid off 21 employees in response to lost sales tax revenue as a result of the recession. The city also has been forced to eliminate 24 positions and freeze wages.

Were the Local Marketing District to fail, the city would have to find ways to make up for its losses. And it could come down to another wave of layoffs. That is not a legacy Aspen voters want, should they reject the ballot question. But it’s a position the city seems willing to thrust upon them.

If ACRA really needs the money now, it should be required to pay it back, regardless of how a future vote turns out.

For the city to just give it the money not only is risky business in the form of a $400,000 gamble, it’s bad business. And there’s no room for that, especially in this economy.