Hot Sulphur Springs turns to voters for revenue again
October 6, 2009
Once bitten, town officials at Hot Sulphur Springs are hoping townspeople won’t be twice shy.
Ballot questions concern property taxes in the upcoming November election, similar to ballot measures that failed last year.
This time, however, it was the townspeople themselves who coaxed the town board to put two questions back on the ballot concerning increased property-tax income and allowing the town to keep all its property tax revenues, according Hot Sulphur Springs Mayor Hershal Deputy.
The 2009 measures 2A and 2B are two out of three questions posed last year. Town residents have said they misunderstood the intent of the measures last year, said Deputy.
“I think it was a misunderstanding last time. People thought it was going to double their taxes when in truth, it was only going to double the town’s share of the taxes,” he said.
“I think the board was surprised last year with all three of the ballot questions,” said Hot Sulphur’s contracted town manager Chuck Reid of Clifton Gunderson, Greenwood Village. “I think they thought residents in Hot Sulphur Springs understood the seriousness of the issues and the limited resources the town had to work with.”
Last year’s ballot questions came to voters prior to the banking meltdown and the 2009 American Recovery and Reinvestment Act. Since then, the town has managed to garner $3.3 million in stimulus money to build a new water-reatment plant, a new clear well and a second 230,000-gallon storage tank to position its water system for at least the next two decades.
But as much as $1.3 million of the stimulus loan is required to be paid back at no interest over the next 20 years.
With general fund revenues averaging about $250,000 a year, the town remains in search of income to sustain its progress.
Before the Recovery funds came about, the town raised its water rates for water-system work mandated by the Colorado Department of Public Health and Environment. The town anticipated significant debt to replace its clear well.
“In my work with the town board last year, we really tried to create as many different options and varieties for funding as we could come up with, including the tax measures, waiving the 5.5 percent limitation, and raising water fees,” Reid said.
A component of last year’s failed measures to increase the mill levy by 5 mills is not part of this year’s ballot measures directly because of the town’s receipt of stimulus money.
A question to increase the mill levy by 3 mills, however, returns to the ballot.
If 2A passes, the town would gain an additional $30,240 a year in property tax revenue – increasing the present 8.95 mills to 11.95 mills – to handle basic town functions such as road maintenance (pothole repairs), snow removal and signage improvements as the town works to pay back the $1.3 million of the federal ARRA loan.
Per $100,000 of appraised residential value, 2A amounts to about $24 a year to the town.
For an average Grand County household appraised at $300,000, the increase would cost property owners about $75 a year, or just over $6 a month.
And if 2B passes, the town would be able to retain and spend revenues gleaned from increases in property-tax valuations in spite of a statutory rule that says towns are restricted from levying more revenue than it did in previous year plus 5.5 percent.
Last year, because of miscalculations of mill levies and a failed ballot measure, the town of Hot Sulphur was forced to give back to its residents a refund of about $20,000 in income by ratcheting down its mill levy because of the 5.5 percent rule.
As far as this year’s measure 2 B, “It’s not a back door way to raise taxes,” Deputy stressed. “If it were to happen, taxes aren’t going to go up. They would stay the same. It’s just an avenue (for the town to keep) more than the 5.5 percent.”
At present, the town’s modest general fund – compared to other Grand County towns – primarily is financed from property-tax revenue, followed by sales tax and finally by franchise fees.
“The town has had a hard time maintaining and funding capital projects, but the group that is here now wants to turn that around,” said town administrator Sandy White, “to fund our own projects and to have reserves to maintain streets, the sewer lagoon and the collection and distribution lines through town.”
By doing that, she said, the town’s planning and water department officials will be working on capital outlay plans to apply over the next 10 years.
“The two ballot questions would really help Hot Sulphur Springs to be financially solvent and healthy and to not have to rely on getting grants,” Reid said. “It makes them self-sufficient.”
– Tonya Bina can be reached at 970-887-3334 ext. 19603 or e-mail firstname.lastname@example.org.