Ballot Measure 1A may have benefitted Archuleta County less than previously thought — with the remainder of the benefit, about $270,000, possibly being owed to the Town of Pagosa Springs.
The chance that the county might owe the town a portion of property tax revenue collected under the “de-Brucing” approved under Ballot Measure 1A came to light at the June 7 meeting of the Pagosa Springs Town Council.
At the meeting, Town Manager David Mitchem made mention of a letter from Archuleta County Attorney Todd Starr.
In the letter, Starr writes that there is a question as to whether or not the county owes the town “a sum certain, which sum would be calculated based on revenue received as a result of Ballot Measure 1A.”
Ballot Measure 1A, passed by voters in October 2006, allowed Archuleta County to temporarily “de-Bruce” (beginning in 2007 and sunsetting in 2011) and collect, retain and spend revenues from property taxes above state-mandated amounts as set forth in the Taxpayers Bill of Rights (TABOR), without exceeding the county’s tax levy of 18.233 mills.
In the ballot language, it is stated that the purpose of the funding is for general Archuleta County operations, including “routine maintenance of all county roads, and capital improvements, including parks; and recreation facilities and county government facilities.”
Because property taxes are paid in the calendar year following the assessment, the county began receiving revenue from 1A in 2008, with the commissioners allocating a percentage of the revenue each year to the categories of roads, parks and recreation, facilities and training.
In 2008, the county allocated 40 percent of the 1A revenue to road maintenance. In 2009, the amount was 60 percent. For the two years, the funding was spent out of the 1A fund instead of the road and bridge fund.
In 2010 and 2011, the funds allocated, 60 and 65 percent respectively, were paid to the road and bridge fund.
According to Colorado Revised Statute 30-25-206 and as pointed out in Starr’s letter, road and bridge funding cannot be appropriated through a county’s general fund.
Another statute, 42-2-202, speaks specifically to road and bridge funding and states that each municipality located within the county is entitled to receive from the county road and bridge fund 50 percent of revenue accrued through a mill levy for the assessed valuations of property located within its corporate boundaries unless a mutual agreement has been reached.
Under the statute, a county can pay a municipality in cash or the equivalent of the amount due in materials and services during the calendar year the funding is owed.
The money, materials and/or work must be used for the construction and maintenance of roads and streets within town limits, according to the statute.
Following a review of applicable case law, Starr’s letter states his belief concerning C.R.S. 43-2-202.
“Consequently, I believe that if the matter were litigated Archuleta County would be found to owe the Town of Pagosa Springs 50% of the revenue produced by the Town’s assessed valuation,” Starr writes.
In an interview, Starr said he believes the finding was the “collision of two good management practices” — reporting all road and bridge funding, including 1A, in the road and bridge fund and examining 1A to see what effect its sunset or renewal would have on the county.
County Administrator Greg Schulte said prior county administration separated the road and bridge revenues in attempts to increase transparency and make the revenues easier to monitor, though the money should have stayed within a single fund.
Schulte said the fact that 1A involved a temporary de-Brucing further complicates the issue, calling it a “unique recipe of circumstances.”
“Everything about this was unique,” said Finance Director Diane Sorensen.
Starr, Schulte and Sorensen said they believe the amount due to the town is approximately $270,000, which the town must use on its roads and streets.
Schulte said county staff is communicating with the town to structure the payment, noting the county doesn’t want the situation to “linger” past 2012.
The trio said the decision to alert the town about the owed revenues was easy, despite lean financial times on the horizon for the county.
“The money benefits the community,” Schulte said, whether it’s spent by the town or county, adding that the county is “legally and morally obligated to pay them their due.”
Sorensen also noted the county’s desire to be in compliance with the state’s rules and regulations.
“Its just the right thing to do,” Starr said, adding, “This is how to do business with partners.”
As might be expected, town staff was pleased with the news.
“I think we were all delighted, very pleased,” Mitchem said. “It’s always nice to get good news.”
Mitchem said he was also pleased that the county came forward after finding the obligation and what it indicates about the working relationship between the two governments.
“It was the county and their audit process that found the obligation. ... They had the integrity to come forward,” Mitchem said, adding that he was “pleased regarding the integrity and the spirit of cooperation.”
Mitchem said preliminary discussions with the town council indicated a payment in the form of work or materials would not fit into the town’s plans, but that discussions between Mitchem and Schulte were only beginning.