Steamboat Springs The city of Steamboat Springs' proposal to use tax increment financing to fund urban renewal projects in the downtown corridor got an ice-cold reception from the Steamboat Springs School Board on Monday night.
A majority of school board members were skeptical of the city's proposal to commit some future gains in sales and property taxes attributable to new development downtown on urban renewal projects like sidewalk construction and pedestrian lighting.
The school board members see the plan as coming at the expense of future property tax funding they feel the district could otherwise get without the urban renewal plan.
The city's urban renewal consultant has estimated the plan has the potential to divert $1,000,000 in future property tax growth from new development away from both the school district and Routt County over a period of 25 years.
But the consultant also estimates that the county and the school district stand to gain more in property tax revenue after the 25-year period, and sales tax revenue gains could be realized even sooner.
Board President Roger Good said he felt the plan ultimately would make the district more dependent on the state, which already backfills the school district's coffers to the tune of millions of dollars each year.
"It increases our reliance on something other than ourselves, and that is a little bit troubling when you're turning your destiny over to someone else," Good said.
School board members also questioned the need for the city to use the tax tool.
City Planning Director Tyler Gibbs, Finance Director Kim Weber and Casey Earp, the assistant to City Manager Deb Hinsvark, laid out the city's vision for a new urban renewal area downtown and what it could accomplish.
The use of TIF downtown would encourage private development by showing the city is committed to improving the infrastructure there, the officials said.
Gibbs said the use of TIF at the base of Steamboat Ski Area helped property values there grow higher overall compared to other parts of the city, and its use downtown is estimated to generate $1.6 million in additional sales tax revenue over and above what would be generated without a downtown urban renewal plan.
If that estimate from a Centennial-based consultant was realized, the school district would stand to get about $800,000 in increased sales tax revenue.
The city officials also stressed that property tax revenue that would be used in a TIF downtown would come only from new development, not existing buildings, which means the base of the school district's property tax revenue would not be affected.
Finally, city officials said that unlike the base-area URA, the one downtown would be mostly sales tax driven, meaning the city would have more "skin in the game."
For many aspects of the plan, school board members had a question.
Board member Scott Bideau gave one of the more pointed criticisms of the evening when he suggested that instead of turning to the tax tool to fund sidewalks and other infrastructure, the city should instead pay for the sidewalks by bailing on its plan to build an $8 million to $10 million police station that Bideau said he felt "nobody wants."
Board Vice President Joey Andrew asked whether things like the city's tap fees or other development fees were hindering redevelopment and why they couldn't be adjusted before using a TIF.
Finance Director Weber said tap fees are calculated based on what it cost to provide the service, and those fees are an entirely different funding source from sales tax that would be used in a TIF.
City staff presented the urban renewal proposal to the Steamboat Springs City Council earlier this month.
Part of the reason the URA is being proposed is because the city's strategy of waiting for private developers to put in sidewalks and other key infrastructure in places has resulted in several gaps downtown.
Despite growth in sales tax revenue, there also are millions of dollars' worth of infrastructure improvements like sidewalks that have sat on the city's parked project list because of the demands of other maintenance.
After hearing about the concerns from the county and school board about the URA, and with a long list of questions of their own, council members asked staff several questions and moved to slow down the talks.
The URA discussion will resume Sept. 2 in Centennial Hall.
By the end of the city's presentation Monday to the school board, there was some consensus in the room.
Both sides agreed that they should continue their conversations about the school board's concerns.
"We're all part of the same community," Planning Director Gibbs said. "We want the same things. Finding the right balance as to how to do that is why we're here."
To reach Scott Franz, call 970-871-4210, email scottfranz@SteamboatToday.com or follow him on Twitter @ScottFranz10