TELLURIDE – When an industrial hygienist confirmed the presence of mold in the Town of Mountain Village-owned Village Court Apartments in the spring of 2008, the town began an expensive remediation project on the 13-building complex.
Now, more than one year and $1.3 million later in repairs, including window and siding replacement, mold remediation, and crawlspace ventilation improvements, the town is close to completing work on the four highest priority buildings: numbers eight, nine, two and three. (Building two was not so much a priority due to a need for remediation but because the town wanted to coordinate the work with a planned 1,088-square-foot expansion of the Mountain Munchkins childcare facility located there, according to Town Manager Greg Sparks).
With the first phase of the project nearly finished, which Interim VCA Manager Steve Spencer said he hoped would be by the end of the month, the town is turning its sights to the next round of buildings in need of work: numbers one, four, five, six, and seven and is trying to figure out, in these challenging economic times, how exactly to pay for it.
"We’ve pretty much depleted reserves from the VCA funds and will have to look at other ways to finance the remediation down there,” Finance Director Kevin Swain told the Mountain Village Town Council during a recent meeting.
Revenue to fund the VCA renovation comes primarily from the rent money it collects, and right now it is leaner than usual.
“It’s a little tight because occupancy is down a little bit,” said Swain.
Sparks put occupancy at about 85 percent compared to near capacity in recent years and attributed it to both normal seasonal fluctuations and the state of the economy.
“We’re typically a little low anyway before the workers come in for ski season,” he said, adding, “Construction has been down, so occupancy has been down.”
Still, “We haven’t lost tenants because of the work,” he added.
In addition to rental income, the town’s affordable housing fund generates about $200,000 in revenue a year for the complex, which also receives some grant funding.
Swain said that the town is also exploring government weatherization programs that could help offset the costs.
There is still money set aside for the VCA – a couple hundred thousand dollars, according to Swain – but those funds are earmarked for debt service, not capital improvements.
Deciding how to proceed with the project comes at a less-than-opportune time, on the heals of the abrupt departure of former Mountain Village Director of Community Development Sally Vecchio in late July, who oversaw the project, as well as that of former VCA Manager Dave Mocko, who reported to Vecchio.
Together the two had the most knowledge of progress of the remediation, according to Sparks.
The town is meeting with consultants to determine what remediation should get the highest priority among the next round of buildings.
“We can’t do them all at once,” said Swain. “The urgency and total scope of the problem remains to be determined.”
As the town nails down the next phase and prepares its 2010 budget it will have a better idea as to whether it will have the ability to pay for the work out of ready cash, or whether it will need to seek financing.
“It’s a pretty expensive little deal going on there,” he said. “We don’t have the resources to continue on at that pace,” said Swain.
“If it’s more extensive than what we’ve got in the budget then we’ll have to look elsewhere.”
Sparks said that he does not expect that the remaining buildings: numbers 10, 11, 12, and 14 will require remediation because they are relatively new. There is no building number 13.
Staff plans to present a comprehensive plan to council on what work has been completed on the first four buildings, and what additional work needs to be done during the second phase.
“We are working on VCA aggressively and are committing the resources we think are necessary,” said Mayor Bob Delves. “We’re taking our responsibility as landlords seriously, but we’re not flush either.”