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Steamboat Springs City Council discusses property tax in budget session

Officials consider revenue stability in down economy

Steamboat Springs — The volatile nature of city revenue streams is reviving conversations about the potential stability of property taxes, and a local fire district is exploring a tax proposal that could come before city voters next spring. — The volatile nature of city revenue streams is reviving conversations about the potential stability of property taxes, and a local fire district is exploring a tax proposal that could come before city voters next spring.

— The volatile nature of city revenue streams is reviving conversations about the potential stability of property taxes, and a local fire district is exploring a tax proposal that could come before city voters next spring.

Amid three years of declining sales tax collections and a 2011 budget that projects zero revenues from building-use taxes related to new development, conversations about asking city voters to support a property tax to fund city services and programs arose again in Centennial Hall last week. City Clerk Julie Franklin is accepting applications from residents who want to join a tax policy advisory board, which would be appointed by the Steamboat Springs City Council to assess the benefits and challenges of the city’s current tax structure and gauge whether changes are needed.

The City Council appointed a previous Tax Policy Advisory Board in April 2004, with the same mission. But much has changed since that board’s report, particularly the state of the city’s capital improvement program, which is funded by revenues including building and use taxes. The council viewed projections last week that show a drain of that fund’s reserves by as soon as 2012.



“The current method by which we fund our CIP improvements is just not sustainable,” said Councilman Jon Quinn, who has floated the idea of a city property tax with increasing frequency in recent months. “I think it’ll be real quiet for construction and development in our community for maybe a decade.”

There’s no set timeline for the appointment of the new tax policy board. City Manager Jon Roberts said part of the board’s work could be to recommend when to place a ballot issue before city voters, if a property tax is deemed necessary. Roberts didn’t rule out November 2011 but said the process leading to a ballot issue could be lengthy.



“Clearly, our sales tax revenues have seen a pretty dramatic swing in the downward direction, and that’s causing us to take action to deal with that,” he said. But “anytime you’re talking about possible changes to tax structure, that is not something that occurs overnight.”

Fire consolidation

Steamboat Springs is one of 15 Colorado municipalities — out of 294, according to the state Department of Local Affairs’ property tax division — that does not assess a property tax. Others in the state’s western half include Silverthorne, Delta, Montrose and Salida.

That could change for Steam­boat in 2011. The Steamboat Springs Rural Fire Protection District announced last week that it’s working to put a property tax before city voters next spring or early summer.

Kathy Connell, a former City Council president and current president of the fire district’s board of directors, said the board is “moving full speed ahead” with plans for a ballot issue that would join the rural district with Steamboat Springs Fire Rescue and remove fire and emergency services from the city’s general fund — instead consolidating the two districts under one umbrella funded by a property tax.

Connell said the district is forming a committee of business owners to assess potential impacts on commercial properties. She also said the district’s goal is a proposal that’s “revenue-neutral” for voters, by reducing other city taxes.

“We’re exploring elimination of the utility tax and the elimination of part of the food tax,” she said.

The rural fire protection district is a 420-square-mile doughnut surrounding city limits — extending two miles west of Milner, to the Mad Creek area in North Routt County, to the base of Rabbit Ears Pass and to Yellow Jacket Pass off Colorado Highway 131. Property owners in the district pay a property tax that allows the district to contract with the city of Steamboat for fire and emergency medical services.

Steamboat Springs Fire Chief Ron Lindroth said the rural district pays for about one-third of the city fire department’s annual budget.

A consolidation ballot issue would propose extending the rural district’s property tax throughout the city.

“What we’re looking for is a stable revenue source,” Connell said.

Balancing needs, costs

Lindroth said last week that he couldn’t take a position on a potential property tax vote. But he said there could be benefits to not only a more stable revenue source, but also a governing body — in the form of a consolidated district board — that would focus solely on fire and emergency services, rather than the broad, citywide concerns that dictate the City Council’s budget process.

“I, as a fire chief, support anything we can do to provide stable revenue sources for emergency services and plan for future needs and meet our current needs,” he said. “I think that those are good things for the community in a very big way.”

Jennifer Schubert-Akin is a co-founder of The Steamboat Institute, which supports reducing the size of government and limiting taxation.

“If I were giving my input on this, I would say let’s look at both the expense and revenue side,” she said about a potential fire district property tax. “If sales tax is not going to sustain even basic services, then maybe you have to look at a property tax, but before you do that, you’ve got to make sure expenses have been reduced as much as possible.”

Roberts said his primary focus with city finances remains on the expenditure side. Steamboat’s proposed 2011 budget includes $700,000 in personnel cuts and trimmed expenses for every city department.

Lindroth said his department is adequately funded heading into next year.

“I think our department is doing well and able to provide the current level of services,” he said. “All of our service-level needs were well met by the 2011 budget.”

Lindroth declined to forecast beyond that, though.

“That’s a crystal ball I can’t look into.”

— To reach Mike Lawrence, call 871-4233 or e-mail mlawrence@steamboatpilot.com— To reach Mike Lawrence, call 871-4233 or e-mail mlawrence@steamboatpilot.com— To reach Mike Lawrence, call 871-4233 or e-mail mlawrence@steamboatpilot.com


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