Sharon Paulus: Maintain projects

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Dear Editor,

In your opinion piece, appearing in the Oct. 21 edition, you stated “The decision in front of voters in Referendum 2A is to allocate the accommodations tax revenue for 10 years to fund two projects instrumental in the tourism economy and the enhancement of our community for all who recreate and live in Steamboat and the Yampa Valley.”

I believe the decision to be different: Do voters really want to commit 10 years of tax revenue to two new projects when the city has a difficult time maintaining existing facilities?

Don’t get me wrong. I think these two projects are wonderful and surely would enhance our community as well as grow tourism. The Steamboat Springs Trail Alliance master plan will expand our trail system, which will benefit many in our community. Yampa River Park will help to revitalize and attract tourists to a beautiful, but often overlooked, area of town. Both are good solid ideas to benefit locals, tourists and our economy.

But is there a plan to maintain these projects? Is there a budget for the routine maintenance that will be needed to ensure their existence for the next 20 years and beyond?

In the past, it seems these questions have been ignored. For example, take the Steamboat Springs City Council’s refusal to maintain the Tennis Center facility. Year after year, the council chooses to remove funding for what should be considered general maintenance of their facility. Apparently, they see this as a way to cut spending. The only thing accomplished by deferring maintenance is ensuring that the costs for repairs will be greater.

Another thing overlooked in your commentary is that any excess funds will be allocated to the marketing of the new amenities and capital improvements to the Haymaker Golf Course. Did Haymaker draw the lucky straw? Why were they singled out over all of the other facilities?

My proposal: vote no on Referendum 2A.

The City Council can appropriate funds to both the Steamboat Springs Trail Alliance and the Yampa River Park. They then could use a portion of the money to upgrade/repair ALL existing amenities (the Tennis Center at Steamboat Springs, Howelsen Hill, Howelsen Ice Arena, Haymaker Golf Course, etc.). And, most importantly, design a plan for the routine maintenance for each facility/amenity.

Planning and budgeting for the true costs of amenities, now and in the future, is the responsible way to manage.

Sincerely,

Sharon Paulus

Steamboat Springs

Comments

Scott Wedel 9 months, 3 weeks ago

Yeah, be mindless like the above 2A supporter.

The accommodations funds do not go away if 2A doesn't pass. They will be spent wiser and more effectively if projects are accountable and need annual approvals as compared to locked in funding for 10 years.

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Eric Meyer 9 months, 3 weeks ago

Annual approvals would work for most projects. If 2A fails the odds at getting any extension to the core trail fail with it (unless council decides that it should be on the CIP budget). Currently the City seems to think medians are more important to the majority of its citizens than more core trail.

Right now trails are poised to receive a million dollar matching grant to help extend the core trail. If Steamboat is going to take advantage of that grant and 2A fails, the city general fund would have to cover that remaining money. Right now that looks like more than a million dollars from the general fund instead of the accommodations tax money that comes from visitors. This opportunity at the million dollar matching grant is not one that will be on the table again in the near future. Honestly I personally could care less about the core trail to legacy ranch project, but it is clear that many in this community and those who pay this tax (lodging community) want at least a portion of their money to go towards core trail projects.

Don't be mindless, be informed. Is 2A perfect? No. Are there reasons to support it? I would say yes.

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Scott Wedel 9 months, 3 weeks ago

I call BS on claiming that money would have to come from general funds.

Anyone being honest would expect the city to use two years of accommodations tax to pay for projects that required two years of funding. The city could easily enough save up two years of revenues or, if it all must happen right now, then loan the project next year's revenues.

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Eric Meyer 9 months, 3 weeks ago

Scott,

I think you understand that the council cannot commit more than one years funding without a vote right?

I also assume you think getting $1,000,000 dollars from a GOCO grant would be a good thing. Am I wrong?

If 2A does not pass, there is no way to accept the $1,000,000 in grant money without committing other funds (I assume the general fund unless the city has other stashes of money, or private money steps in).

Even with 2A passing the core trail to legacy ranch is in jeopardy based of how the council worded the Ballot. The General fund (or other) would still be involved based on timing because our part of the match would exceed the current plan of $900,000 over the first 3 years. Grants have a timeline the projects need to be completed by (I think this one is three years).

This is a special trail grant round is now or sometime likely 10 plus years down the road if it ever comes back. The Accommodations Tax alone could not be saved fast enough to accrue the matching funds needed the way council currently wants to spend the money.

We have warned council of this possibility for months and we are on a path to decide to: 1) not accept $1,000,000 to help extend the core trail or 2) pay it a large portion of it out of general funds.

GOCO has asked us to complete the full application and only a few other preliminary applications were asked to continue and submit the full application and when you add up all the other applications that were asked to continue, it totals close to the 10 million that GOCO has budgeted for this special grant round for trails.

It is not BS. We did our homework (all volunteer by the way) and have tried to warn others of any and all possible glitches along the way. It would be nice if others listened before they made rash decisions.

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Scott Wedel 9 months, 3 weeks ago

"If 2A does not pass, there is no way to accept the $1,000,000 in grant money without committing other funds"

Well, I guess they have convinced you of their BS of why a bad idea must be accepted.

There are two ways I can think of off the top of my head.

1) Work with GOCO to accept the grant in the next budget year so that this year's and next year's accommodations tax are combined to reach the $1M local contribution.

2) Have the city loan from reserves the balance of the money and next year the city council votes to repay the loan from accommodations tax revenue.

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Eric Meyer 9 months, 3 weeks ago

Scott,

1) I doubt GOCO will delay funding it 3 years or more (not even the projected 2014 & 2015 tax would equal the required match).

2) Wouldn't a loan be the same as committing the money for more than one year? All I have heard is that a city council cannot commit to anything beyond one year with out a vote (whether it is to approve a bond or just approve a multi year commitment). If that is not Colorado Law, then yes, I guess they convinced me of their BS. I would love to see something that shows that a city council can commit to more than one year of funding obligations without a vote. Do you mind finding that? PS. I have not filled out my ballot yet.

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Eric Meyer 9 months, 3 weeks ago

Scott,

If using "certificates of participation" to help pay for the Core Trail or purchasing the land on Yampa Street is how you suggest council should or would get around the limit of a one year budget commitment, I personally think that is a very bad path even if it could be done. I don't think anyone associated with the SSTA wants the trails project compared to the current state of the Iron Horse.

You & John have helped point out a potential very large negative that I had never considered if 2A fails.

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Eric Meyer 9 months, 3 weeks ago

Sharon,

"But is there a plan to maintain these projects?"

Yes and it is very detailed for the trails projects. The dirt trail projects annual maintenance can be covered by a self imposed fee for events that use the city owned trails.

"Is there a budget for the routine maintenance that will be needed to ensure their existence for the next 20 years and beyond?"

The trails projects took 30 years into account when looking at not only maintaining the proposed projects but also their eventual replacement costs. The first 6 years were required and are available in the proposals that were submitted to the committee.

Unfortunately, the accommodations tax money is not an endless pool of money and is not a possible funding source to maintain existing facilities. The money that would go to Haymaker, if 2A passed, is not to maintain it.

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John Fielding 9 months, 3 weeks ago

They managed to fund the Iron Horse purchase without voter approval.

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Eric Meyer 9 months, 3 weeks ago

Thanks John,

Based on a very uninformed and unverified google search it does appear that the Iron Horse was funded by issuing "certificates of participation" (http://www.steamboattoday.com/news/2007/nov/27/iron_horse_loss_expected/).

Since I had no idea what those were, I came across this: "A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues." and "The authority usually uses the proceeds to construct a facility that is leased to the municipality, releasing the municipality from restrictions on the amount of debt that they can incur." http://www.investopedia.com/terms/c/certificateofparticipation.asp

Thanks for showing me how bad council and others can be when they work around a system that at first glance is set up to have checks and balances. I have learned a lot in this process. While I am not sure those could even be used to fund the trails projects, I really hope this council does not pull any tricks like that if 2A fails. Hopefully recent history has shown them how bad those types of decisions typically end up.

I would much rather council decides 2014 money (quickly to keep projects moving) and then if council insists, they can clean up the language and redo it like they did for Haymaker when it did not pass on its first attempt.

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Scott Wedel 9 months, 3 weeks ago

The Iron Horse funding via COPS is intentionally designed to avoid TABOR requirements of voter approvals of debts. COPS is legally a form of a lease.

City would presumably not be idiotic enough to follow your suggestion of issuing COPS to borrow ahead for accommodations tax revenues.

If GOCO were to immediately require the city have a million dollars then 2A doesn't make that money appear. You claim that GOCO would be so impressed with passing 2A that they would grant money based upon the promise of revenues for future years. You also claim that GOCO would refuse to believe the a SB government would be willing to keep a promise to allocate money in future years.

Assuming your claims are true then SB government could just as easily allow trails to borrow against some other city government reserve fund. The city has millions sitting in reserves. And then city council could use the next year's accommodations tax to repay the internal borrowing from the other fund. Note that the internal borrowing would only take two years to be repaid.

City could not have done that for Iron Horse because it didn't have the cash in reserves and they couldn't afford to pay it back quickly. So the city had to go to outside investors to get the cash for Iron Horse.

That you are just learning about this stuff now strikes me as further evidence of how the city government basically tricked the Trails Alliance and their supporters to agree to measure 2A. The reasons given as to why a 10 year funding commitment is needed are so demonstrably false that if we had a local newspaper that did fact checking that there would be pants on fire ratings given to the supporters claimed benefits of a 10 year funding commitment.

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Eric Meyer 9 months, 3 weeks ago

Scott,

You either do not take the time to read the comments or intentionally twist your words to fit your latest argument.

Either way (2A passes or fails) other money would be needed to complete the core trail and capitalize on the GOCO grant based on the ballot language. It just looks like it needs more if 2A fails.

Council cannot borrow against another fund without making a multi year commitment (avoiding TABOR). That is something I absolutely DO NOT suggest.

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Scott Wedel 9 months, 3 weeks ago

"Council cannot borrow against another fund without making a multi year commitment "

That is a flat out lie. I've seen any number of government budgets borrow or transfer from other funds without triggering TABOR.

I expect 2A to pass. I also expect that within 5 years that the SB city council and Trails Alliance to say the the 10 year commitment of 2A was.a stupid mistake.

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Eric Meyer 9 months, 3 weeks ago

Scott,

From an earlier post to you that went unanswered...

"Wouldn't a loan be the same as committing the money for more than one year? All I have heard is that a city council cannot commit to anything beyond one year with out a vote (whether it is to approve a bond or just approve a multi year commitment). If that is not Colorado Law, then yes, I guess they convinced me of their BS. I would love to see something that shows that a city council can commit to more than one year of funding obligations without a vote. Do you mind finding that? PS. I have not filled out my ballot yet."

John pointed out COPS, but neither of us seems to think council would or should go down that path. Any other ways to do a multi year commitment with out a vote?

I am not as familiar on the workings of government as you. This is how I read it and I asked for an example if you had one. I guess if the loan was paid back sooner than a year it wouldn't really matter, but in the case of the Core Trail, if they were going to rely solely on Accommodations Tax, it does not add up and they would not be able to repay the loan within the fiscal year.

I could be wrong and welcome your experience & examples.

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Scott Wedel 9 months, 3 weeks ago

"Wouldn't a loan be the same as committing the money for more than one year?"

What they cannot do is legally commit to making future loan payments. Under TABOR, a future city council is not legally obligated to make the payments. So the city government cannot go to the municipal bond market and sell secured bonds because the underwriter and insurer cannot guarantee that the government will make future payments.

The city is allowed to get financing via COPS because while the city is not compelled to make future payments since it is legally a lease. The COPS are structured so that if the city decide to not pay then it counts against it's credit rating and the COPS holders get the secured property. So to bond insurers and underwriters, it is about as good as a municipal bond.

The clearest example that the city could loan money for trails is the loan the city made to YVHA. The city in 2008 loaned $1M to YVHA to help YVHA purchase Fish Creek Mobile Home Park without violating TABOR or Colorado law. The city cannot go to court and compel YVHA to make payments, but YVHA still owes the money to the city. YVHA has not been making payments on that loan due to their financial issues. The city could foreclose upon FCMHP to attempt to recover that debt. but it cannot go to court to get a judge to compel YVHA to pay as if it were normal municipal debt.

The city's loan to YVHA for FCMHP happened within months of the city issuing COPS to finance the Iron Horse. So, both are options for city government. But almost no one remembers the loan to FCMHP because it didn't require voter approvals and not making the payments is causing YVHA any financial problems. If the city was demanding that YVHA make the payments and was planning to foreclose upon FCMHP and then sell it to get their money back then we would be hearing a bunch about inter-government loans.

So, most clearly, the City council could use their funds to loan money for building trails and expect future city councils to use the accommodations tax to repay the loan. The city just cannot go to the bond market to get the funds. But unlike YVHA, in this case the city council is the deciding authority for both the city funds loaning the money and the accommodations tax. So they can repay as much as they want as quickly as they want.

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Scott Wedel 9 months, 3 weeks ago

So, the SB city council seeking the loan for trails projects could loan money from the city's general fund or reserves to projects being funded by the accommodations tax. The SB city council, acting as the controlling authority for the accommodations tax, could accept the money and promise to repay it upon whatever schedule. What the SB city council could not do is go to court to compel the accommodations tax controlling authority, aka the SB city council, to repay the loans.

That does not strike me as a realistic issue stopping the SB city council from loaning money for trail building.

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Eric Meyer 9 months, 3 weeks ago

Scott,

Thanks for the well thought out example. Sounds possible based on your description assuming council wants to use the general (or other funds) like a bank. We'll see how all this shakes out soon enough.

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Scott Wedel 9 months, 3 weeks ago

And that all assumes that GOCO would require cash up front and would not accept a government's promise for further funding next year. GOCO commonly funds projects that rollover local government budget years and so can get two years of local government spending. GOCO has a good deal of flexibility in their funding and often enough works with local government. GOCO will not wait indefinitely while local fundraising efforts have stalled, but GOCO does not lose unspent money at the end of the fiscal year and have to reauthorize money from scratch each fiscal year.

I think it would be quite rare for GOCO to not believe a promise from SB for several years of funding for a major project. The promise would fundamentally be credible because the funding is from a special purpose tax and SB is a wealthy city which can afford funding the project.

SB breaking their promise on GOCO funding would be much like SB breaking its promise on paying on the Iron Horse COPS. Sure it can happen, but even if somehow it didn't become politically popular then the long term cost of breaking the promise is worse than keeping the promise. If SB were to break the promise to GOCO then SB would have to expect to not receive GOCO funding for years.

Regardless, if 2A loses then hopefully you all have a press release ready to claim victory and public support for trails as the public rejected a 10 year funding commitment. That the public wanted accountability and, after a few years, to see that trails are as popular as expected. That Trails Alliance welcomes the opportunity to go to the city council and request the funding recommended by the accommodations tax committee.

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