Aspen to ask voters to extend RETT
August 20, 2008
ASPEN ” If the controversy around the costs of Burlingame Ranch isn’t confusing enough for citizens, how about a 361-word ballot question?
That’s what Aspen voters likely will face in November when they are asked to approve a $16 million bond and extend the Real Estate Transfer Tax (RETT).
The length of the question stems from state constitution requirements stemming from the Taxpayer Bill of Rights (TABOR) approved by Colorado voters in 1992.
“This is a disservice to the community,” said Aspen City Councilman Steve Skadron regarding the proposed ballot question’s length and confusing language.
But because TABOR mandates local governments to disclose potential tax increases as a result of borrowing money in the unlikely event that bonds fail or the government can’t pay it back, the wording must be included, officials said.
“TABOR was designed to ask questions that force you to vote ‘no,'” said Mayor Mick Ireland in explaining the intent of Rep. Douglas Bruce, R-Colorado Springs, the author of the legislation. Among other things, TABOR limits revenue growth for Colorado governments and requires that any tax increase be approved by the voters.
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Despite its confusing nature, the ballot question ” which was written by the city’s bond counsel ” was supported by the majority of the Aspen City Council on Tuesday.
The council is expected to formally vote Aug. 25 to place three questions relating to affordable housing on the November ballot.
The 361-word question ” which by law also must be in all capital letters ” essentially asks voters to authorize $16 million in bonds to reimburse money borrowed for land purchases made in 2007, as well as to extend the RETT, which is the largest funding mechanism for affordable housing. It is set to expire in 2024.
The maximum repayment on that bond would be slightly more than $31.3 million, borrowed at an average interest rate of 5.25 percent, assuming a 30-year term. The bond would allow the city to pay back the Wheeler Opera House fund, which it borrowed $8 million from to buy land for future affordable-housing development. The rest of the money would be used as working capital for the city to deal with contingencies for ongoing projects and revenue fluctuations. It also could be used for a redesign of the final phases to be built at Burlingame, located across from Buttermilk on the north side of Highway 82.
A second question on the fall ballot will ask voters to renew the 0.45 percent housing/daycare tax, which feeds money to area daycare providers, as well as to the housing fund.
The third question would be advisory, asking voters to give elected leaders direction on whether they should proceed with future construction of Burlingame that’s consistent with recent recommendations of a citizen budget task force; an outside audit concerning the city’s performance as a developer and a construction experts group that is currently studying the best way to build additional units.
A second part of that question asks voters if they prefer the original 236 units at the affordable-housing development, or as much as 300, as the construction experts group has recommended.
“We don’t want to spend money on design and engineer costs [for a new design] without voter approval,” Ireland said.
Building more units at Burlingame would increase the overall taxpayer cost of the project but decrease the per-unit subsidy.
City Councilman Dwayne Romero on Tuesday voiced the only opposition to the question regarding Burlingame, arguing that the city isn’t ready to present a solidified plan to citizens on the future of the project.
And since the first phase of Burlingame, which includes 84 multifamily units and seven single-family homes, wasn’t executed well by the city, the entire process needs to be re-examined before moving forward, Romero said.
Cost escalations and misleading voter information in 2005 led to the formation of a citizen budget task force, which recommended outside audits be done on the city’s performance as a developer and the financial controls of the project. Those results found that the city didn’t have the resource capacity to manage a large-scale project like Burlingame. A recommendation was made to create a separate development department staffed with asset managers experienced in architecture and construction. Several other recommendations also were made, and the council will consider adopting them.
“There is a lack of understanding and digestion that has yet to occur on the means and methods for the future,” Romero said, adding none of the recommendations have been discussed by the council.
“There are still internal inconsistencies,” he said, calling for a fully developed plan to be presented to voters for their approval. “In order to be successful you need to take the time.”
The majority of the council agreed that a resolution should be drafted explaining the recommendations of the audits and the citizen budget task force so voters can better understand the nature of the question.
Councilman Jack Johnson also asked that a memo explaining the TABOR Amendment be written so voters understand why the bond question has to be 361 words.
Ireland suggested that a financial plan on the future of Burlingame should go before voters in May so they can have the final say on the cost of the project.