Emerald deal has wide reach in Steamboat | SteamboatToday.com

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Emerald deal has wide reach in Steamboat

Orton parcel’s $755,000 cost deepening city’s reserve spending

The city's pending purchase of 586 acres on Emerald Mountain is adding a $755,000 expense to a budget strapped by declining funds for capital projects. The purchase could reduce funds available for future projects, such as an extension of Yampa River Core Trail, which Judy and David Saunders, of Chicago, enjoyed during a snowy day in April 2010.

John F. Russell

— As the city prepares to close next month on a highly prized Emerald Mountain parcel, the reserve spending required for the purchase and Steamboat Springs' shrinking capital improvements fund is creating some trepidation in City Hall.

"The bottom line is, nothing we do is going to remove the fact that we're spending a couple million of reserves this year, period … and now we're asking to spend another $755,000," city Finance Director Deb Hinsvark said Monday. "The $755,000, no matter how you slice it, is going to put us further into the use of our reserves."

Spending money on the 586 acres owned by Lyman Orton, highly desired for its recreation value and permanent public use, could significantly reduce the amount of funds available for an array of future capital improvement projects. Potentially affected projects include new headquarters for the Steamboat Springs Police Department and extensions of Yampa River Core Trail.

"There are going to be a lot of mothballed projects to do this," Hinsvark said.

The city's capital improvements program is funded by building-use and excise taxes from new development, state and federal grants and even the city's general fund, which pumped $1.6 million into the program in 2010. The capital fund begins 2011 with a balance of about $5.5 million but is projected to end this year with about $3 million. The fund, drained by a recessionary economy and lack of new development, is projected to have about $2 million available annually from 2013 until at least 2016.

The capital fund also provides hundreds of thousands of dollars for annual paving projects and ongoing expenses, including $90,000 in yearly athletic field improvements contractually required by Triple Crown Sports.

"It's apparent that if we only have $2 million a year to spend on non-grant-related projects, we would spend half of that amount on our street and parking lot repair projects," Hinsvark said.

Steamboat Spr­­ings City Council members noted the sharp decline in the capital fund during the budget process in October. Councilman Jon Quinn, for example, called the projections "absolutely terrifying" and "unsustainable."

But several factors, including the timing of a $600,000 Great Outdoors Colorado grant and strong community desire for the Emerald land, led City Council to move forward with the Orton purchase, which has a total cost of about $1.3 million.

Tax debate coming

The Emerald purchase also could heighten a coming debate about the city's accommodations tax. That tax is dedicated to uses that promote tourism and improve Steamboat's identity as a destination resort. Its revenues have long been dedicated to Haymaker Golf Course, but that use of the tax revenue sunsets in 2013, creating an availability of potential funds that has not gone unnoticed by local organizations.

"I've been on the (Howelsen) ice rink advisory committee, and they're very interested in that tax … along with Great Outdoors Colorado (grant funds), to hopefully put up another sheet of ice," Pete Van de Carr said Monday.

Van de Carr compared interest in accommodations tax revenues to "vultures circling over a dead cow."

Hinsvark, tho­­ugh, suggested to City Council last week that future accommodations tax revenues could be used to pay back the city for the Emerald purchase. She said the land's value to tourism and the Bike Town USA initiative could make such a use appropriate.

Accommodations tax revenues, at least in part, also could continue to be used for Haymaker improvements after 2013, Hinsvark said.

City Council President Cari Hermacinski acknowledged the looming issue.

"We all know if there's one tax that everyone has their eyes on in the very near future, this is clearly it," Hermacinski said last week. "I think this is really just an introduction to this idea."

Councilman Scott Myller said he would want "complete buy-in from the lodging community" for any future use of the accommodations tax.

City Council's discussion of that tax is slated to continue next month.

Meanwhile, government programs manager Winnie Delli­Quadri said the city should be able to close on the Emerald parcel early in March. Some of the $755,000 already has been spent, she said, for items including an appraisal of the Emerald land, an environmental statement and surveying.

"At closing, we will have spent all of the $755,000," DelliQuadri said. "I anticipate no hiccups at this point; it's all progressing nicely."

— To reach Mike Lawrence, call 970-871-4233 or e-mail mlawrence@SteamboatToday.com