A warm winter that led to the early closure of ski resorts and a decline in tax revenue from seasonal tourism were among the factors that made fiscal 2026 challenging for Park City Municipal.
Another challenge will be in January with the loss of the Sundance Film Festival, which has moved to Boulder, Colorado, after being hosted in Park City for decades.
The impact of reduced visitation and shortened ski operations was reflected in the March 2026 drop of sales tax distribution. The distribution — excluding lodging taxes, which are called the transient room tax — came in nearly 20% below the same period in fiscal 2025. Transient room tax collections dropped 17.3% compared to March 2025.
And the effects of the weak winter system extended into spring activity more than anticipated, according to a July staff report on April sales tax. Transient room taxes were down 31.8% and citywide sales tax, excluding the transient room tax, was down 5.1% compared to April 2025.
Despite the challenges, Park City Manager Adam Lenhard said the city remains in an “exceptionally strong” financial position in fiscal 2027, which began July 1.
The City Council adopted an overall fiscal 2027 budget, which includes capital projects of about $235 million, on June 25. Nearly $56 million of that amount is in the general fund, which pays for city services and personnel expenses.
The overall fiscal 2026 budget was a little more than $304 million, with about $55 million in the general fund.
The city updated its fiscal 2027 sales tax projections to reflect current conditions and to base the budget on realistic expectations, Lenhard said in a written statement outlining budget highlights.
He said the general fund has a reserve near the 35% ceiling allowed under state law, which provides a resilient buffer that helps the city weather economic fluctuations without compromising essential services.
In response to evolving economic conditions, the municipality is taking proactive steps to ensure continuing delivery of excellent public service, Lenhard said.
Those steps include redirecting resources once dedicated to public safety, transportation and event management during Sundance to broader community services and year-round priorities.
In addition, the city is eliminating several contingency line items and redirecting $4.9 million of resort tax revenue into the general fund to support immediate community needs without raising taxes or impacting service levels.
The reallocation of the tax revenue was possible because after years of strong performance and successful grant leveraging, the transportation fund’s net position grew from $47.3 million in fiscal year 2021 to $88.7 million in fiscal year 2025 and the general fund no longer requires the same level of resort tax support, the statement says.
“Together, these initiatives help protect the services residents depend on — snow removal, transit, public safety, parks and recreation, and public works maintenance — while supporting ongoing financial sustainability,” Lenhard’s statement said.
The city will continue monitoring economic trends closely and adjusting as necessary, he said.
“This budget positions Park City to remain resilient and focused on the future,” Lenhard said. “We will continue monitoring economic trends closely and adjusting as needed, while delivering reliable services, strengthening our community assets, and investing in the people who live, work and visit here.”
The fiscal 2027 budget has raises for the mayor, who now earns $66,683.62 per year, up from $55,209, and for the five members of the City Council, who are paid $34,373 annually, up from $28,520. The compensation was scaled back significantly from what the council supported with a 4-1 vote originally.
The budget includes major community investments, including affordable housing at Clark Ranch; a new senior center; the Bonanza Park 5-acre site mixed-use development; expanded childcare scholarships; more support for local arts and culture; and improvements to bus stops, recreation facilities and historic sites.
The budget has reserve funds that can be used for qualifying city expenses, not only emergencies, said Penny Frates, the city’s assistant budget director. A fund balance is commonly used to make up for shorter-term revenue shortfalls, economic downturns and one-time expenses, she said.
“Some entities accumulate and utilize fund balance with a specific purpose, such as acquiring a particular parcel or funding an initiative,” Frates said. “Some one-time examples may be a new city vehicle or a one-time project, such as updating the general plan.”
The city was prepared to use a fund balance as an option during COVID, but Frates said it was not necessary. The net balance of the general fund has increased each year from 2016 to 2025, so those reserve funds have not been used, she said.
At the end of fiscal 2025, the general fund balance was $18.3 million and $17.4 million that was not earmarked for any specific project, department or unexpected needs.
Mayor Ryan Dickey also said the Park City economy is resilient and the outlook for 2027 is good.
“However, we are not immune from uncertainty, whether in the broader macroeconomic picture or the local effects of snowfall and weather,” he said. “We budgeted 2027 quite conservatively in light of all these factors.”
The loss of Sundance will have some impact, but Park City has a diverse year-round economy and Dickey said he’s confident in the community’s long-term strength. He pointed out the tourism economy weathered two years without the festival during the COVID-19 pandemic.
He also noted it had been decades since the city increased property tax rates. The rise in home valuation over that time has more than kept pace in helping filling the city’s revenue coffers, though most of the city’s tax revenue comes from sales tax. A home in Park City cost on average $139,000 in 1990, according to the Park City Board of Realtors. That rose to $2.8 million on average in 2025-26.
“Overall, the council’s focus is on supporting a resilient, vibrant local economy that relies less on any single source of revenue,” Dickey said. “That said, the city stays open to welcoming new events when they align with our community’s values and goals.”
He cited as examples the new Fox US Open of Mountain Biking coming to Deer Valley Resort in September and Shaun White’s The Snow League coming in January, “both of which reflect the type of organic vibrancy that aligns with our local culture.”
“We are always in conversation with residents about new initiatives and evolving priorities, though what I hear most from Parkites is a desire to keep moving forward on the opportunities before us, and I think the council has done a fantastic job in 2026 of doing just that,” Dickey said.