The Oak Creek Board of Trustees voted 3-1 last week to put a 2% sales tax measure for capital improvement funds on the November ballot, as town leaders weigh how to fund a backlog of costly infrastructure repairs.

The measure comes after months of discussion about how to address Oak Creek’s aging infrastructure, rising utility costs and limited revenue base.

The conversation around a sales tax ballot measure this fall began in April, when trustees floated one of two options for a 1% sales tax: funding a third deputy, which law enforcement personnel have previously said is necessary, or putting funds toward much-needed infrastructure projects. 

At the time, trustees were largely split over how the tax should be dedicated, and whether that tax should in fact be raised to 2%. 

At the board’s July 9 meeting, the trustees were presented with a utility rate study that recommended double-digit increases across the town’s electric, water and wastewater systems to fund aging infrastructure and avoid future deficits. 

Following the somewhat serious recommendations of the rate study — which would raise the average residential utility bill by about $26 per month in 2027 and another $29 in 2028, or over $50 more per month after two years — trustees signaled majority support for a 2% sales tax measure toward capital improvement projects only. 

Earlier this week, Town Administrator Louis Fineberg shared with the newspaper the town’s 2024 water loss study, which showed equally troubling results: Oak Creek loses an average of 78.5% of its water per year. 

In 2023, the town treated roughly 8.62 million gallons of water. Nearly 6.8 million gallons were lost, according to the study. 

With standard water loss in distribution systems set at 10%, Oak Creek’s water loss is eight times greater than what is considered typical. Fully upgrading the water system would cost the town over $14.3 million in 2024 figures, with that amount likely being slightly higher now due to inflation. 

The water loss study, which Fineberg called “eye-opening,” further underscores Oak Creek’s infrastructure problems and the high-stakes nature of addressing them with immediacy — but the question now is how improvements will be funded. 

One of these infrastructure issues — the Sheriff Reservoir Dam safety project, which ran into funding challenges in the fall — now has a path forward. This week, Fineberg received a letter from the Colorado Department of Local Affairs that said the town has been awarded a $620,000 matching grant, filling in the final gap of funding uncertainty. 

“Unless we have some massive inflationary episode between now and next summer, it looks like we have all the funds in place to do what we need to do,” said Fineberg. 

Fineberg said construction should commence in the spring or summer of 2027. 

The dam safety project, however, is just one of many essential infrastructure upgrades needed for the town. While grant monies make that project possible, the funds are not always guaranteed, particularly given federal funding challenges. 

When asked if the town intends to utilize any of the funding recommendations included in the water loss study, which center around potential state grants and loans, Fineberg said “we’re going to have to,” regardless of whether this fall’s ballot measure passes. 

Either way, Oak Creek residents will see rate increases next year, but “passing the sales tax will mean in all likelihood that the rate increases won’t be as severe,” said Fineberg. 

Because the cost of electricity is rising, the town’s electric utility rates must also increase, Fineberg said. But the central factor driving rate increases for water and sewer, he said, are the town’s capital needs. 

“If the sales tax can take care of the capital needs, or at least be part of the financing package, that means rates won’t have to go up as much,” Fineberg explained. 

Fineberg noted that Oak Creek, which currently implements a 3% sales tax, has the lowest rate of all the incorporated municipalities in Routt County. For context, Steamboat Springs has a 4.5% sales tax rate; Yampa, 4%; and Hayden, 5%, according to the county sales tax charts and fees page. 

If the ballot measure successfully passes this fall, Oak Creek’s sales tax will be in line with sales tax in the town of Hayden. 

Fineberg said that the advantage that some trustees see for going down the sales tax route, versus significant increases to residential utility bills, is that “there is some non-zero amount of revenue we’re getting from visitors to Oak Creek that could be used to help with the infrastructure.” 

Double-digit rate increases, by contrast, would fall entirely upon the residents. 

Only four trustees of the six on the board were present for the vote at the board’s July 23 meeting, with trustees Kelly McElfish and Christopher Hedberg absent. 

Trustees Bernard Gagne, Julie Gregory and Erika Pastor voted for the measure, with Trustee Sascha Stanger voting nay, primarily due to previously iterated issues with essential items like groceries being taxed. 

The measure now goes to voters, who will decide whether the town should broaden its tax base to help finance critical capital work.