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One of the thorniest political matters of 2008 is resurfacing as a campaign issue for the 2009 Steamboat Springs City Council election.

Last fall, City Council considered an ordinance that would have prevented city accountants from collecting what they estimated was $4.6 million owed to them by construction contractors. The ordinance concerned a city Finance Department plan to begin requiring reconciliations of building-use tax deposits collected in conjunction with construction permits. A 1991 ordinance gave the city the right to require such reconciliations, but the provision had never been enforced.

On March 10, 2008, city officials sent their first letter to all holders of open building permits informing them that they would be required to reconcile their building-use tax payments beginning June 2, 2008. The reconciliations were to apply to all open building permits issued in the previous three years and all permits going forward.

Construction contractors argued that while they had no problem with the change in practice going forward, it was unfair to start enforcing the policy retroactively. Although some council members were sympathetic to the argument, an ordinance that would have prevented reconciliations on building permits issued before March 10 - the date of the letter to contractors - was defeated, 4-3, on a second and final reading.

Although the ordinance failed, one declared candidate and one potential candidate - former councilman Kevin Bennett and Jim Engelken, respectively - have used the issue as ammunition in arguing that current council members kowtow to the development community. Of the two incumbent council members seeking re-election this year - Cari Hermacinski and Walter Magill - only Hermacinski voted in favor of the ordinance.

So far, reconciliations haven't lived up to their billing.

The city had collected just $225,000 of the estimated $4.6 million, as of Thursday. Revenue Supervisor Kim Weber said the original estimate probably was "a little too high," but she also noted that there still are hundreds of reconciliations that need to be performed. That includes some major development projects that have not yet received a certificate of occupancy. For example, the 465,000-square-foot One Steamboat Place project at the base of Steamboat Ski Area had a building-use tax deposit of $2.9 million that has not yet been reconciled. Some projects also have been granted an extension to the reconciliation and allowed to receive a certificate of occupancy in the meantime, Weber said.

"So far, we haven't paid any additional taxes; we've got a refund," said John Shively, of Shively Construction, and president of the Yampa Valley Construction Trades Association. "I doubt they've covered their expense. : It certainly has taken a lot of time to set up a system to handle all the taxes we pay."

Hermacinski also expressed frustration with the fact only $225,000 has been collected. She noted that there always was unanimous consent on council to perform reconciliations going forward and that the only question was how to fairly handle open building permits. She said the $4.6 million estimate overly hyped the issue.

"I was thoroughly questioning that estimate the entire time," Hermacinski said. "I thought it was wildly inflated."

Magill said he is disappointed that the estimate may have been wrong, but he said the amount collected doesn't really affect the issue in question.

"It wasn't about trying to get $4.6 million for the city budget," Magill said. "It was about collecting taxes owed to the city."

Bennett agreed.

"It doesn't change the issue," he said. "These are taxes that are owed to the city."

Engelken, who still hasn't made a final decision about whether he will run for council, said that approving the ordinance still would have been a "huge mistake" regardless of how much money is involved. He said he hopes the city's finance staff becomes more aggressive about performing reconciliations and collecting the money it's due.

"I'm aware that the Finance Department is very short-staffed," he said. "But I would think hiring somebody to take care of this would be well worth the money."