A group in favor of fire district consolidation is pitching a citywide property tax in order to take fire funding away from the volatile sales tax revenues. The issue could be one of several local tax measures on the table in 2011.

Photo by John F. Russell

A group in favor of fire district consolidation is pitching a citywide property tax in order to take fire funding away from the volatile sales tax revenues. The issue could be one of several local tax measures on the table in 2011.

Fire district tax efforts begin to form in Steamboat

Rural district changes name, takes 1st step toward ballot proposal

Advertisement

photo

Steamboat Springs firefighter Craig Malchow guides a firetruck after a false alarm in Steamboat Springs last week. A group in favor of fire district consolidation is pitching a citywide property tax in order to take fire funding away from the volatile sales tax revenues.

— The fire district surrounding Steamboat Springs is formalizing its efforts to place a property tax before city voters next year in order to consolidate local fire and emergency services in one funding entity.

Such a consolidation would implement a property tax for city residents. A reduction of some of the city’s sales tax, potentially on utilities and food purchases, would offset that property tax.

The issue could be one of several local tax measures on the table in 2011.

As politicians in Washington, D.C., wrestle with national tax-cut legislation, a fire district consolidation could be one of three upcoming proposals for tax additions in Steamboat Springs and, perhaps, Routt County. The cash-strapped Yampa Valley Housing Authority is kicking the tires on a ballot measure for tax funding next year, and ideas also are circulating about a tax-funded regional transportation authority.

Meanwhile, the city’s Tax Policy Advisory Board is undertaking renewed efforts to assess Steamboat’s tax policy. The board will form recommendations for the Steamboat Springs City Council to address changing conditions and forecasts since a previous tax board’s recommendations in 2005.

Jack Dysart is co-chairman of the tax board and served on the previous board, as well. He expressed hope that the new board’s recommendations could be ready in late 2011.

Dysart said the previous tax board determined that specific tax proposals could reduce a local government’s ability to adapt on a yearly basis and allocate funding according to the greatest needs.

“In general, we thought it was better to have more general taxes and less specific taxes for things,” Dysart said.

The rural fire district is seeking that specificity, though, in a time of volatile sales tax revenues and widespread city budget cuts.

If successful, the fire district vote 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 the property tax.

“We’re sorting through a lot of data to make sure that the structure we propose in this is easily understandable … hopefully with as little impact to our citizens as possible,” said Kathy Connell, who is president of the rural fire district’s board of directors and leading the consolidation effort.

Connell is a former Steam­boat Springs City Council president who owns property in the city and outside it, within rural district boundaries. She said the rural fire district plans to hold public meetings and conduct a community outreach campaign as its ballot proposal takes shape.

The rural district already has taken initial steps in what Connell called Phase 1 of the process.

Connell said the fire district’s new name is the Steamboat Springs Area Fire Protection District. That change, made Nov. 28, replaced the word “rural” with “area,” an attempt to change the perception of the district that pays for fire services to areas surrounding city limits.

“It’s not a matter of it’s rural and city, it’s a matter of us,” Connell said.

The area district also has hired Denver lawyer Dino Ross, whose focuses include fire protection districts and employment law. Connell said the rural district is meeting with the Routt County Board of Commissioners on Dec. 21 to discuss potential regional impacts of a consolidation, such as whether to include Routt County Search and Rescue funding in the proposal.

A citywide fire district vote could occur in spring or early summer.

City voters have rejected property tax proposals for fire and emergency services twice in the past decade. City Clerk Julie Franklin said those votes occurred in November 2002 and 2003.

Seeking stability

Connell told the City Council in October that the proposal’s intent would be to provide a stable, long-term funding source for the rural fire district, which assesses a property tax on its residents and contracts with the city for fire and emergency services.

The Steamboat Springs Area Fire Protection District forms 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.

The district had expenditures of more than $1.2 million in 2010, Connell said.

In addition to those contributions, city fire and emergency services are funded by sales tax revenues, which have dramatically decreased during the economic recession.

Fire services have been a priority during the city’s budget conversations, though, and have not suffered the same cuts as other city services or staffing levels. Steamboat Springs Fire Chief Ron Lindroth said in October that, “all of our service-level needs were well met by the 2011 budget.” Lindroth said the rural district funds about a third of the city’s annual fire rescue budget.

Paul Hughes, who served as city manager from 1998 to 2005, was involved in the formation of the current system. He said Bob Litzau of the city’s finance department was instrumental in creating the formula that allowed for annual funding changes depending on factors such as the rural district’s population.

Before the current system, Hughes said, “there was considerable unhappiness between the city and the fire district over who was paying for what.”

Hughes said given that history of debates, he understands and sympathizes with the rural district’s desire for stable funding.

But Hughes also is a member of the Tax Policy Advisory Board.

“I would hope that nobody would ask to go to the voters until that group’s work is done,” Hughes said last week. “We’re looking at all options and would hate to have any precluded before we finished and presented recommendations to City Council.”

In October, commenting about the recession’s impacts on the local economy and job mar­­kets, City Council President Cari Her­­ma­cinski indicated the poten­­tial challenges of any tax proposal.

“I don’t know if we could pass a tax for drowning kittens right now,” she said.

Comments

Scott Wedel 3 years, 8 months ago

Trouble with asking for taxes in good times or bad is answering the question of whether the money will be effectively used which implies the question of whether existing money is being well used. And that a recent SB city council could even consider buying the Iron Horse suggests that SB has too much money.

Only way I would consider voting for a tax is if there was also a measure stating city of SS needed voter approval of any debt, bonds, certificates of participation and so on. One city council has no right to spend so much that debt was issued and thus obligates future city councils to pay that debt.

0

pitpoodle 3 years, 8 months ago

No Steamboat Springs property tax for any reason. It sets a precedent. Once a property tax is adopted for a good cause, it can be extended to any cause good or bad. There is no guarantee the spending will be monitored -- just take a look at recent Fund Board spending mismanagement of sales tax revenue. This mismanagement gives no recourse to taxpayers as none of the Fund Board members are part of the election process. They make huge financial mistakes and we, as taxpayers, pay for every penny of it. Buyer beware.

0

Scott Wedel 3 years, 8 months ago

Also, the tax board might want to look at updated assessed values before arguing that property tax is a more stable revenue source. Over the next 5 years the local governments financed by property tax will probably be worse off than the local governments financed by sales tax.

YVHA might want to focus on their mission and stick to what has popular support which would appear to be owning and operating affordable rentals. Their venture into real estate development and speculation suggest that they have strayed from their area of expertise. And it didn't help that during the boom that they also freely spent on their management staff.

As for regional transportation, looks like it already exists and area seems to be well served There doesn't appear to be any additional service that would have decent ridership. So the need for a transportation tax is not so clear. And with advocates talking about completely impractical things such as rail then it looks like it'd just create money to be wasted (rail is only viable when road alternatives are so congested that rail is much faster).

0

sodacreekpizza 3 years, 8 months ago

If combining the city fire department with the county fire district makes sense and saves money by eliminating duplications in service or administration it makes good sense to talk about the combined entity.

What does not make sense is to propose a NEW TAX to pay for something we already have! Take the city funds that currently pay for fire protection and dedicate them to the new combined entity. If this is a good idea there should be some money left over on both sides.

The discussion about reducing sales taxes on some items to "offset" this NEW TAX has some problems:

  1. The amount of sales taxes locals pay on items being discussed for sales tax relief will not fully offset the NEW property TAX (but the toursists will get a nice break)

  2. The amount businesses will save by not paying sales tax on utilties will be a small fraction of what they will have to pay in this NEW TAX.

  3. Because the NEW property TAX will fall most heavily on local businesses (not exactly thriving right now) and then on local homeowners and only last on second home owners, this idea just shifts the burden of who is paying for fire protection.

There may be a way to offset the tax collected and make it revenue neutral for the combined city/county fire protection budget, but nothing being talked about at this time will make it expense neutral for the people that will pay the NEW TAX.

This is an unfair approach and a bad idea. NO NEW TAXES PLEASE! Especially not to pay for something we already have.

0

Scott Wedel 3 years, 8 months ago

I'd guess the combined district would have to have the same taxing mechanism throughout the district and couldn't rely upon sales tax inside city limits and property tax outside.

Whether property or sales falls more heavily on locals vs second homeowners or tourists, I think is pretty much a tie. Second homeowners don't have to pay property taxes, but they do tend to spend when in the area. Tourists pay sales taxes when in the area, but locals pay the sales tax all the time. I think the data suggests that locals would pay about the same amount via sales tax or property tax.

I think the biggest issue regarding eliminating sales tax on food to match the revenues from property taxes would be the reasonable fear that the sales tax on food would be reinstated for something else.

Another potential controversial issue would be if the unified district means that the property and residents of SB suddenly see their share increase for paying the costs of the fire district while the expensive homes surrounding Steamboat city limits, often using ag exemption, see their share decrease.

0

Clearsky 3 years, 8 months ago

All those wealthy home owners out there in the rural areas are paying agricultural status on their homes if they meet the requirements that they have some token agricultural aspect to their property. Check it out for yourself. Make them pay the same as every other resident and there will be a huge amount added to the county coffers.

0

sodacreekpizza 3 years, 8 months ago

Scott,

I think it is a stretch to say the sales taxes on food would equal the NEW property TAX. If it is the case, it would only be because the amount currently paid by tourists would be transferred to local businesses.

If you really want to bump property tax collections, get properties like the Steamboat Grand Resort and HOTEL classified as commercial rather than residential and have them pay the fair portion of property taxes like other hotels have to.

0

Scott Wedel 3 years, 8 months ago

Clearsky, I agree with you. Some other states with ag exemptions are far stricter and some have gone as far to say ag exemption cannot be for a large luxury house. That sort of house does not help with the regional societal benefits that was the intent of creating ag exemptions.

SCpizza, A property tax for fire district would have many second home owners paying property tax. Historical data suggests that amount would be pretty close to how much tourists pay in sales tax. So it is pretty much true that locals are going to pay the same overall in taxes if the taxes are either property or sales tax.

I do agree that it is seriously wrong that condo hotels, or even flat out hotels, have been able to argue that they are residential. Anything that collects the short term lodging tax is obviously commercial and for it to be anything else is flat out wrong.

0

Ken Reed 3 years, 8 months ago

Clearsky/Scott, I live 8 miles from town and take advantage of the ag exemption. It saves about $1,500 in taxes each year to allow 70 cows to graze our pastures for 2-3 months in the summer. To me this isn't a "token aspect" as we have to provide water and pasture to the cows, drive through them on our roads, deal with all the dung and mend fences when the cows break them. And we do not get fire protection services in our neighborhood (Elk River Mountain Ranches). So I disagree with your assessments and don't consider myself a "wealthy" homeowner somehow cheating other taxpayers.

0

housepoor 3 years, 8 months ago

Wow, 35 ac can support a herd of 70 cows for 2-3 months? Or does the entire subdivision support 70 cows? So you and all your neighbors each save $1500 that must be made up to be taxed to someone else? How many lots are there? Pretty good deal, huh

0

Ken Reed 3 years, 8 months ago

Housepoor, The entire subdivision, approximately 1,000 acres, can be used by the cows during the summer. Several of the homeowners in the neighborhood opt out of the ag lease (and the tax reduction) because they don't want deal with the cows. My point was related to this article (fire district taxation) and the earlier posts. We don't get fire protection and the ag lease is not some "token aspect" of the property. The ag lease has supported the former May Ranch and now Sweetwood Cattle to provide additional grazing for their ag operations.

0

housepoor 3 years, 8 months ago

So you get paid to lease your land and you get to pay less taxes? Not blaming you, if I was offered the deal I'd take it. Saving $1500 per lot a year adds up. If 20 lots are part of the lease thats $30k and in 10 years you guys saved $300k in taxes? Nice. How much profit can you make off of 70 cows?

0

Ken Reed 3 years, 8 months ago

We don't really get paid, the homeowner's association gets approximately $400 per year to cover expenses related to the cows. If the cows don't do any damage or don't use the entire lease period, we give the money back. The only benefit to the homeowner is the tax break. And we don't get any county or city services such as fire protection or road maintenance. In 8 years I've only seen one Sheriff (thank goodness) in the neighborhood and that's because my kids were shooting a potato launcher.

0

Scott Wedel 3 years, 8 months ago

Mr Reed, Well, looks to me like you are the very definition of what is wrong with the ag exemption. Nothing against you personally for taking advantage of a gift to you in the tax laws, but you are most certainly not the type of ag situation which was intended to be receiving the tax exemption. A house worth $700K or so on a 35 acre lot valued at $1,000 or so for taxes is not preserving ag heritage in the area.

Go to Hayden, Yampa and Oak Creek and explain to them why it is fair that your 35 acre lot is valued for taxes at a lower value than their .15 acre residential lots.

What is worse is the ag exemption for 35 acre lots encourages breaking up working ranches into primarily residential use luxury lots. That is counterproductive to the goal of the ag exemption to keeping ag viable. Ag exemption could be changed to require at least $25K of ag income and limit the exception so that land value cannot be reduced to less than half of the residential buildings. That way it would still be helpful to working ag, but not to luxury home owners on 35 acre ranchettes whose connection to ag is limited to knowing the rules to qualify for the ag exemption.

0

Ken Reed 3 years, 8 months ago

Scott, My point wasn't that it's fair or unfair in comparison to other towns, simply that we don't get fire protection so the ag lease comments don't specifically apply. We abide by the laws and have to get county approval each year. And I'm not a definition, I'm a law abiding citizen that takes advantage of current tax laws.

0

housepoor 3 years, 8 months ago

Rancher Ken, So you're saying you don't drive on any county roads to get to or from your spread? An amblulance would not be dispatched to your house if you call 911 because were kicked by a cow? Your farmhouse would be left to burn to the ground? Did your kids attend school? You are not breaking any laws just taking advantage of an entitlementsubsidy to a special interest group. Everyone else is doing it so it's ok.

0

Ken Reed 3 years, 8 months ago

Housepoor, Very funny. This wasn't my point, but so as to not drag this out any further. You're right, I'm wrong. You win. I lose. I hope you feel better now.

0

sodacreekpizza 3 years, 8 months ago

Many people confuse second home owners with tourists. These are two distinct groups with different demographics and different spending habits that contribute to the local economy in different ways. Tourists pay lodging taxes and proportionally spend more in restaurants. Shopping patterns are diverse. Second home owners buy a large amount of services ranging from property management, snow plowing, and maintainance etc. They shop and dine as well. These activities contribute quite a bit to the local employment picture. They tend to buy groceries more than they dine out. At the high end, the cash they leave in the valley can be quite a bit more than the average local spends.

Second home numbers are actually pretty similar to primary owner numbers. (source: mailing addresses for tax notices). For the sake of arguement, lets say that they are equal. What this means is that, in rough numbers, commercial property (read business owners) will pay half of any property tax and local home owners and second home owners will split the other half. Tourists will get a break. The amount paid in property tax may or may not be offset by some adjustment in sales taxes. Do any of us really trust any government to roll back a tax and keep it rolled back?

Who are the business owners that will pay the bullk of this new tax? Largly local working people. A property tax will shift the burden of cost on an unfair basis to local small business. These small businesses do not earn people more money than other local professional people make, but if they happen to own or lease commercial property to run a store, restaurant or service business rather than hop in a truck to get to a construction site or place of employment, they will be paying several time as much for fire protection as their next door neighbor the electrician.

0

JLM 3 years, 8 months ago

@ soda creek pizza ---

Yours is easily one of the most thoughtful and insightful and just plain smart comments ever to have been posted to the Pilot blog. Good on ya, mate!

Where ya been hiding your light?

0

Steve Lewis 3 years, 8 months ago

Soda Creek uses a different comparison than I've seen before, but it parallels the 4x higher property taxes paid by commercial property owners today relative to residential owners. Thanks to our Gallagher Amendment. This Gallagher obstacle was significant in the earlier TPAB findings, as they turned away from recommending property taxes.

From where I sit, the Fire District's funding is in better shape than the local businesses their tax would land hardest on. Their need to build a training facility? That sounds like a luxury compared with the survival mode decisions many local businesses are making. I don't understand the urgency of this.

0

sodacreekpizza 3 years, 8 months ago

Before any discussion of how to fund a combined entity, there should be a good hard look at whether the idea is worth pusuing in the first place. The two things that would make a difference in my thinking would be:

  1. Solid evidence that fire protection would be marterially improved. (annecdotes about the Rabbit Ears do not met this test)

  2. Clear and substantial monetary savings in a combined operation. We have seen only vague statements about efficiency. How much money would this idea save?

In the absence of clear, substantial advantages..... This ain't broke.

Thank you Lewi. You are right on the money. Right now, many local small business owners are working for free and living on savings hoping to survive until things get better.

No new taxes to pay for things we already have!

0

Requires free registration

Posting comments requires a free account and verification.