URA generating high revenues

City exploring numerous options for unexpected windfall

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Past Event

Steamboat Springs Redevelopment Authority Meeting

  • Tuesday, November 20, 2007, 4 p.m.
  • Centennial Hall, 124 10th St., Steamboat Springs
  • All ages / Free

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Agenda

4:30 p.m. Progress overview; project overview; construction update; 2008 proposed projects; a resolution adopting the budget and setting appropriations for the Steamboat Springs Redevelopment authority for 2008

— The urban renewal authority created at the base of the Steamboat Ski Area is generating more money than originally anticipated, and there are varying opinions about how that money should be used.

The Steamboat Springs City Council created the URA in 2005 to fund a multi-year redevelopment of public infrastructure around the ski area base. That redevelopment began this year.

In its original 2007 budget, the URA was expected to garner $7.8 million in revenues. It is now projected to bring in $10.2 million by the end of the year. Finance Director Bob Litzau noted that $2 million of that increase is the result of the city borrowing $9 million instead of the originally planned $7 million. Litzau said that move was made to take advantage of a favorable bond market.

The rest of the increase is the result of larger-than-expected tax revenues. To repay the bonds issued to finance the redevelopment, the URA employs "tax-increment financing," which devotes property and sales tax revenues above a certain established base level as its income stream.

Despite rapidly rising property values, it was sales - not property - taxes that more greatly exceeded expectations this year. The city budgeted for $420,000 in sales tax revenues this year, but is now projecting $678,751.

"Most of it is increases in sales taxes," Litzau said. "The mountain is doing better than we thought it would."

Property taxes are projected to bring in $15,000 more than anticipated, and other revenues are expected to outperform expectations by $70,000.

City Manager Alan Lanning said three options come to mind for using the unexpected funds: pay off the URA's debt sooner, do more projects, or do higher quality projects. Others, however, would like to see the money returned to those entities whose tax base has taken a hit as a result of the URA's existence.

Litzau said most of the excess funds probably would be used to pay off bond proceeds early, but he also noted that any money remaining at the end of the URA's existence would be paid back to the entities - such as the county and school districts - that would have collected the taxes that are being remitted to the URA.

"Anything we don't spend will have to be returned," Litzau said. "That money has to be paid back to the entities whose increment we took away from them."

The possible repayment is a long way down the road, however, as leftover funds wouldn't be remitted until the end of the URA's life. Litzau said the URA's bonds aren't scheduled for full repayment until 2027. In the meantime, Routt County taxpayers' bills are artificially raised by the URA's removal from the property tax base.

"All the taxpayers are paying more because the URA is coming off the top," Routt County Commissioner Doug Monger said.

At a City Council meeting earlier this year, former councilman Ken Brenner noted the URA's expected windfall and suggested a return of the funds might be most appropriate.

"Some prudence is appropriate," Brenner said. "Just because the increment is coming in, doesn't mean we have to spend it. : It's a black eye for the URA when you misuse those funds."

Should the city decide to use the funds to increase the redevelopment's scope or quality, Lanning said he would expect some level of criticism. But accomplishing the URA's intended purpose should be the ultimate consideration, Lanning said.

"The community has made a significant commitment to : improving the base area, and that's what we intend to do," he said.

At a meeting tonight, the Steamboat Springs City Council will sit as the Steamboat Springs Redevelopment Authority to consider a resolution adopting next year's budget for the URA. Project Coordinator Joe Kracum will request $2.5 million to fund the reconstruction of the intersection of Mount Werner Circle and Apres Ski Way and the intersection of Apres Ski Way and Village Drive. An additional $1 million will be requested to fund design work for projects that will begin in 2009, when the URA is expected to bring in $14 million in bond proceeds.

- To reach Brandon Gee, call 871-4210

or e-mail bgee@steamboatpilot.com

Comments

another_local 7 years, 1 month ago

Since, according to the story, the increase is a combination of increased sales tax revenue and an increased bond I would suggest the following:

  1. Hold on to the increase in sales tax as a reserve for use during the period when sales taxes decline in the URA due to redevelopment of Ski Time Square and surrounding properties. With many of the sales producing entities in the area being closed during the construction in the next few years there is likely to be a shortfall.

  2. Use the funds from the bonds for the purpose that was dertermined and stated when the bonding authority was granted or pay off the excess now if the funds are not needed and save the interest expense.

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