Kellogg leaders pleased with LOT decision

KELLOGG — With the recent passing of a new local option, non-property tax, city officials in Kellogg are now planning for the future.

After several years under the previously approved local option tax, or LOT, the city found itself unable to pay for the services the original tax was established to cover.

For the past seven years, Kellogg has imposed a 3.5% LOT. Commonly referred to as a "resort tax," this fee is imposed on any lodging inside the city limits of Kellogg for 30 days or less. This includes taxing those staying at hotels, motels, bed and breakfasts, vacation homes and other short-term rentals.

The recent vote increased that amount to 5.5%.

The primary use of Kellogg’s LOT is the maintenance and upkeep of its street system.

Now, along with the street maintenance, any money generated above what is needed to maintain and upgrade the roads will be used for city parks and the maintenance of public rights-of-way, including sidewalks.

“Kellogg’s streets are unique in that they serve as a human health barrier from contaminated soils,” city of Kellogg community planner Monica Miller said. “The current rate of 3.5% would still be in effect had the ordinance not passed, but the 2% increase was necessary to account for the long-term, rising costs associated with street maintenance.”

Years ago, the city made a pact with the Environmental Protection Agency in which the city agreed it would keep the roads well-maintained if the EPA paid for the city to completely replace its roads.

After years of historic mine pollution, including the use of harmful mine tailings filled with heavy metals like lead, arsenic and cadmium to build up their roads, the EPA requires a barrier to be kept in place, keeping the contaminants away from human exposure.

The LOT ballot measure decided in Tuesday's election garnered more than 80% support from the city’s voters.

“City staff worked diligently in the weeks leading up to the election to convey a clear message that the increase in local option tax would have no effect on property or sales tax in Kellogg,” Miller said. “Residents were provided with resources and direct access to details, like what revenue generated from the tax could be used for, allowing them to conduct their own research and make informed decisions based on facts.”

When the city replaced all its roads between 2015 and 2018, the plan was to put city streets on a five-year chip seal cycle in order to keep them maintained and lessen the blow to the asphalt layer.

The city was able to complete a section of road re-sealing pre-pandemic, but then, in the years following, the cost of the materials needed to do the work increased, making maintaining the five-year cycle with the revenue from a 3.5% LOT unfeasible.

Now, based on historic averages, funding will be in place for the city to move forward with its road maintenance plan.

According to Kellogg Public Works director Mike Fitzgerald, the plan is to in late summer chip or slurry seal the roads that were supposed to be resealed in 2021, then continue work into the fall months as weather allows.

Chip sealing can only be done when the air temperature is 70º or higher, while a slurry seal may be applied when both the pavement and air temperatures are 45º or higher.

“The city is pleased with the passing of the ordinance,” Miller said. “Local option tax is a significant source of revenue and has a substantial impact on the budget.”