Voters to Decide If .3 Percent Sales Tax Hike Will Fund Rec Center
MONTROSE – With resounding applause from an audience of about 90 people, the Montrose City Council unanimously agreed to allow the Montrose Recreation District to put a 0.3-percent sales tax increase proposal to voters in April for funding a new community recreation center.
The suggested sales tax is .1 percent higher than what voters nixed in 2012 for a proposed rec center in another location, because MRD officials say the interest rate, in a strengthening bond market, was too low in the initial proposal, according to MRD Executive Director Ken Sherbenou.
Opponents argued that the new tax is too costly, with residents outside city limits calling it "taxation without representation" because they don't get to vote on the proposal but are required to pay the increased sales tax.
"Measure B" would increase the city sales tax from 7.65 to 7.95 percent. The average Montrose household spends about $7,000 annually on taxable goods in the county, said Sherbenou. The .3 percent tax would add about $21 to that total, he said, so that roughly 30 cents on every $100 spent would be generated for construction of the new rec center. Its projected cost is $25.5 million.
In November, the MRD Board of Directors voted to suggest a sales tax increase that raised $11.7 million for the construction of a new Rec Center off Woodgate Rd., but that number soon grew to $14.1 million because, Sherbenou said, the projected interest rate is expected to rise by one full percentage point by the time the financing is finalized.
The new sales tax would expire upon raising $14.1 million toward the estimated $25.5 million construction cost, and officials say no additional tax increases will be needed to operate the Rec Center.
County resident K. Heinschel said the Rec District was "deliberately ignoring county residents," and expected the city council to speak "for not only the city residents but for the county residents as well."
"As you know, we in the county don't get to vote for the city council, yet you are in a position to increase our taxes," Heinschel said. "Is this good representative government? I think not.”
Heinschel asked the city to draft a rebate program to refund taxes collected on county residents who did not vote for Measure B, and said there are other, greater needs in the city, such as replacing the crumbling Columbine Middle School. "If you have but one vote, would you support education or swimming?" Heinschel asked.
City resident Becky Waugh said there are ample opportunities in Montrose for recreation, and that a community recreation center is not at the top of the list of what’s needed. "There is a lot to do in this town already," she said. Of the MRD, she said, "We just ask that they live within their budget.” Resident Elaine Pigford described the proposed .3 percent sales tax hike as "taxation without representation.
"We spend our money but don't get a vote," she said.
According to the MRD, sales tax revenues would be combined with money raised through grants, fundraising, partnerships and aggressive saving plans to pay for construction of the Rec Center, with just over $1 million of the projected $25.5 million going towards remodeling the Montrose Aquatic Center into an MRD field house, equipped with a new indoor turf field.
In March, the city will send out more than 10,000 ballots for its April mail-in election, which will decide the fate of Measure B as well as the configuration of the next city council. The election is expected to cost $30,000, a $5,000 increase over 2012 due to an increased number of ballots.
In the spring of 2012, the MRD's proposed Measure A, calling for a 0.2 percent sales tax increase for 10 to 14 years to fund a new recreation center, failed, 2,971 to 2,372. The estimated cost in 2012 for the new Rec Center was around $22 million.
Since 2012, through careful budgeting, the MRD has been able to save about $800,000 annually from revenues to help pay for the operating costs of a new Rec Center (the $800,000 is one-third of MRD revenues of $2.4 million). MRD staffers say this savings, along with the purchase of the 26 acres of land off Woodgate Rd. for the Rec Center, improves the plan’s chances of winning voter approval.
A new intergovernmental agreement between MRD and city officials will save the district $100,000 annually through shared services with the city.
And so the district's primary message is this: Montrose is the last sizable Western Slope community (besides Grand Junction) that lacks a Rec Center. Voters in Delta, Cortez, Gunnison, Durango and Fruita all passed one percent tax increases to fund their community Rec Centers, and Measure B would require just a third of that.
MRD board members have said the positive economic impact of the Rec Center center will easily outweigh the city’s investment by increasing property values, increasing the health of the community and becoming an economic driver.
"Everyone we have talked to said if you’re going to do it, do it right, and we have the right plan now," Sherbenou said.
Many Montrose families were in attendance at Tuesday’s meeting, in a show of support for the new facility.