IRS digs into rec center bond issue
Grand County. CO Colorado
The Internal Revenue Service is examining the municipal debt issuance of a $19.5 million recreation district bond for compliance with federal tax requirements.
The Fraser Valley Metropolitan Recreation District received a letter from the IRS in mid-December, stating that it is a common practice of the IRS to do a debt examination on public and private bond issues.
According to the rec district’s bond attorney, however, some of the specific requests in the letter – like the land donation agreement for Grand Park Community Recreation Center – indicate that this investigation was likely generated by a local inquiry, Parks and Recreation Director Scott Ledin said during a public meeting with the board Feb. 22.
Ledin said the rec board has retained Kutak Rock, its initial bond attorney, to represent the board.
“It’s unfortunate we have to go through this process and spend more taxpayer money,” Ledin said, but, at the same time, the board needs to confirm that there aren’t any problems with the tax-exempt status of the bonds.
A concerned citizen’s group brought the issue to the forefront several years ago. At the time, the group questioned a reversionary clause and several other contingencies in the land donation contract with Grand Park developer Clark Lipscomb.
The rec district provided the IRS with its first request – the complete bond transcripts – prior to the Jan. 17 deadline and has been working to compile the additional information that the investigator said he generally likes to review.
Ledin said he doesn’t know how long the IRS examination generally takes.
The $19.5 million, voter-approved bond issue paid for the Grand Park Community Recreation Center and improvements to Pole Creek Golf Course club house and the Sports Complex.
– Reid Armstrong can be reached at 970-887-3334 ext. 19610 or email@example.com.
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