Steamboat Springs delays base area decision amid loan issue
Bank negotiations to continue for base area loan; Duckels contract stalled
May 5, 2010
Reason for default
U.S. Bank sent the city a default notice April 19 asking for additional security on the city’s $17.5 million loan for base area redevelopment, primarily because of a decrease in Steamboat Springs School District property tax assessments announced in December, about a week before the loan was approved.
The school district, along with at least six other entities, assesses a property tax within the base area Urban Renewal Authority. Increments of those tax revenues fund the URA and support the $17.5 million redevelopment loan.
Thus, the school district’s collection of less property taxes than documented in the loan means there could be less revenue available to pay off that loan.
On Dec. 14, the school district approved a reduction in property tax assessments, or mill levies, because the district had over-collected about $4.2 million worth of property taxes between 2007 and 2009. The over-collection occurred because of an incorrect interpretation of legislation involving the state’s Taxpayers Bill of Rights.
The city’s loan, approved Dec. 22, did not account for the school district’s decreased revenue stream. U.S. Bank called that a default on the loan conditions.
Dale Mellor, finance director for the school district, said Monday that the district’s property tax collections will be lower than planned until 2013.