HOT SPRINGS – The City of Hot Springs’ Finance Officer Misty Summers-Walton recently gave a brief recap of the city’s financial situation at the City Council meeting on June 15.
In a followup to that presentation, later in the week she provided some more insight into the current finances of Evans Plunge, which was closed down for nearly three months due to COVID-19.
Summers-Walton said that as of the end of May, the Plunge’s revenue was down 69.25% or $113,000, compared to the same time last year. She had not yet calculated June yet, since they just re-opened on June 15, but at the end of June last year, the revenue collected was $277,500. As of the end of last week, the 2020 revenue collected was at just $57,800.
“Expenses at the facility are only down 12% or $27,000 as of the same period,” Summer-Walton said. “If we are not able to make up our losses in one way or another, we have a plan to help ease the blow. We were already planning on doing a bond refunding (essentially a refinance) of the purchase debt in order to take advantage of lower bond coupon rates at the end of this year. We have the option of including the December payment in the reissue. Initially we were not going to do that however in light of the current situation we are now re-considering that as an option to help cover potential shortfalls. The December payment is $115,128.75.”
Despite Evans Plunge’s revenue being drastically down, and many other Hot Springs area businesses suffering financially during the recent COVID-19 related shutdowns, the city’s other sales tax revenue is actually up fairly significantly in comparison to last year.
“Amazingly our general sales and use tax is up from this time last year (+25% or $144K), these taxes include the 2% city sales tax and the additional 1% gross receipts tax (formerly called BBB or LLD),” Summers-Walton said. “Although we can’t tell exactly where sales tax is generated, we do have some thoughts about the increase. Last year in July the State of South Dakota implemented the sales tax on internet purchases, this as well as the pandemic keeping people closer to home for their shopping and folks from surrounding areas coming to our stores are a few of the reasons we have considered.”
Summers-Walton said the SD Department of Revenue does report sales tax by standard industry classification, but noted that “Retail Trade” is Hot Springs’ largest source of sales tax revenue with catalog and mail-order houses, food stores, general merchandise stores all represented strongly in this category. Construction materials and services are also doing well, she said.
Additionally, revenue at the Southern Hills Golf Course is up 8 percent, or about $10,000, over this time last year. “We had a very wet and late start to the golfing season last year so this is more in line with where we are typically at this time of year. The Golf Course nor the Pro Shop delayed opening,” Summers-Walton said. “They did implement new safety measures as recommend by the CDC and SDGA but it has not had a significant negative impact on business.”
She added that the City of Hot Springs Summer Recreation program, The Mueller Civic Center and the Hot Springs Public Library are all down due to closures so revenues are taking a hit. The Business Improvement District or BID fund collection is down (hotels, motels, bed n breakfasts, etc.) Some other sources of revenue are showing impacts of the pandemic such as; motor vehicle licenses and fees, interest revenue, liquor percentages and bank franchise taxes.