On Monday, November 18, I attended a public meeting concerning plans for infrastructure improvements to Highway 62 and the historic business core, and a related CDOT/RAMP grant application to pay for those improvements. Town and CDOT have both made such improvements a goal for over 10 years, and have spent considerable time and money developing, scoping it and engineering some of it.
At the meeting, representatives of CDOT, Town Council, the Town staff and outside engineering consultants provided a lot of information about the project scope, timing, cost and funding. CDOT will contribute over $11M. The town will need to put in about $2M cash as matching funds. Town Council intends to raise that money by selling municipal bonds, and to ask the voters to approve a property tax hike to fund the repayment of the bonds. The town assumes 5.5 percent interest on the bonds. Interest is likely to be much less. The town will apparently repay the bonds over 20 years. With 5.5 percent interest over 20 years, repayment will cost $3.3M, approximately. The town projects a property tax increase of $42 per year per $100,000 of residential property owned, and $147 a year on each $100,000 of commercial property owned.
I own property in town. The increase seems to me a reasonable price to pay in exchange for about $11M of CDOT money. I urge all property owners to consider the extent to which the proposed improvements will increase your property values. I expect the values (especially downtown) to start rising as soon as the bond passes – if it passes. So, based strictly on cost/benefit analysis, I consider this a sound proposal as-is.
However, it could and truly should be much better. In 2006, the taxpayers passed a 0.5 percent sales tax increase to fund capital improvements. The town council convinced the taxpayers to vote for that increase by telling the taxpayers the money would be used for the proposed improvements to the historic business core. I know, because I served on Town Council at the time, along with Mayor Clark and Councilman Johnson. Many business owners specifically told me they approved the sales tax increase because it would improve the historic business core. At the November 18th meeting, Mayor John Clark told the community a couple interesting facts: Town council is not committed to using the sales tax funds for the proposed improvements to Highway 62 and the Historic Business Core. (2) the 0.5% sales tax raised about $100,000.00 last year. Councilman Rick Weaver told me he would insist the Council commit at least 25 percent of the sales tax revenues to this project.
Think about it: over 20 years, $100,000 a year in sales tax adds up to $2M. If committed to the proposed project, that tax money could reduce the cost of the bond principal and interest by $2M. That would reduce needed property tax increases by more than half. The Town Mayor says he won't commit that money to the infrastructure project. At best, Councilman Weaver would commit $500,000 (25 percent) of the sales tax money to reduce the bond cost.
In my opinion, something is wrong here. Town Council (me included) already committed – seven years ago – to spend that sales tax money on these very improvements. Before I vote for any bond, I need from Town Council two things: (1) An accounting for all sales tax revenue collected to date from the 0.5 percent increase, and (2) a commitment from Town Council to use those taxes collected in the future to fulfill the duty it assumed to the taxpayers when it advertised the sales tax as a way to fund this project – or, in the alternative, a very convincing explanation as to why we should spend those taxes on something else. If council won't keep the commitment it made seven years ago for use of our sales tax money, why should we let them impose an additional property tax now?
– Rodney Fitzhugh, Ridgway