Altering the Wheeler fund could open city to litigation |

Altering the Wheeler fund could open city to litigation

City Attorney Jim True said Monday that any repurposing of the Wheeler Opera House's real estate transfer tax might open the city up to litigation.

Citing Aspen’s track record as a lightning rod for litigation, City Attorney Jim True said Monday that a legal showdown is possible if voters approve the potential repurposing of real estate transfer tax funds dedicated to the Wheeler Opera House.

The tax, which voters approved in 1980 and renewed in 2000, has helped the Wheeler grow a fund balance of around $30 million. For the past two years, officials have explored the possibility of reallocating some of those funds for other needs such as health and human services, perhaps. One model presented before the council Monday shows the possibility of freeing up as much as $2 million in annual repurposing funds by 2017.

One fear is that if officials were to repurpose a portion of the tax revenue, the city might find itself in violation of the taxpayer bill of rights and lose the fund altogether. Wheeler board member Richie Cohen advised the city to focus on extending the tax, which expires in 2019, before attempting to reallocate it.

“The thought of risking losing this golden goose by changing it in any way, shape or form before we’ve extended it — I don’t think it’s worth just the chance of (losing it),” said Cohen, who helped establish the tax fund. “At a later date, put it to a vote and see if we could get away with repurposing it.”

Although True noted the risks associated with reallocating the tax funds, he said that based on several court decisions dealing with the taxpayer bill of rights, it’s unlikely a court would overturn an action by the voters.

“There is a risk, as Richie noted, but looking at the overall issue, we do believe the risks are minimal,” True said.

The attorney also cited the fact that 12 other Colorado municipalities have altered their own real estate transfer taxes, and none have been challenged in court. However, the same is true for plastic-bag bans around Colorado. While other places have passed it without legal challenge, including Snowmass Village, Aspen is currently in court defending its own bag ban.

“I cannot deny there would be some (resistance) because we tend be a lightning rod for litigation over … anything,” True said.

The council did not take any formal action Monday. However, elected officials were asked to consider what amount of the Wheeler fund, if any, they would consider repurposing, and how long the potential changes should remain in effect before voters are asked to weigh in again. A real estate transfer tax is an amount paid to the city when an individual or entity purchases property within city limits.

Speaking to Cohen, Councilman Adam Frisch regarded the Wheeler as a community gem — one he would never want to jeopardize. While the tax fund enables about two-thirds of Wheeler programming, he said he thinks there’s a way to protect the historic organization while spreading funds to other areas of the community.

“My argument would be, if we had to vote right now in the community that we have $4 (million) or $5 million coming in every year, and there’s $30 million sitting there, should every single penny go to the Wheeler?” Frisch said. “I think most people would say, ‘Of course, the Wheeler’s a gem, … but I think there’s probably enough money to go around.’”

City Manager Steve Barwick said the plan is to begin crafting ballot language in summer for a question that could appear as early as spring 2016.

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