The Board of County Commissioners has signaled intent to place issues on the November ballot.
In a meeting Wednesday, the BoCC approved submitting written intent to County Clerk and Recorder June Madrid to place measures on the ballot. The possible measures include:
• A roads-specific mill levy;
• A reduction of sales tax on the purchases of automobiles, recreational vehicles and boats; and
• A use tax on building materials.
Giving intent allows Madrid to estimate costs for the ballot and election, but does not obligate the BoCC to place all three measures on the ballot, Madrid said.
The BoCC was required to provide written intent to take part in the election by tomorrow, July 22.
The commissioners held a work session Monday to present information on the three potential ballot initiatives.
The work session also allowed the BoCC to hear public comment on the measures.
Road mill levy
The first of the possible ballot initiatives presented by County Administrator Greg Schulte, and the one for which the county provided the most information, concerns a mill levy for roads, in conjunction with a “de-Brucing” effort to allow Archuleta County to collect the additional mill levy revenue above limits imposed by the Taxpayer Bill of Rights (TABOR).
The County’s 1A ballot measure and following fund was also a de-Brucing measure.
Referendum 1A was approved for a span of five years by the voters, allowing the county to keep property tax revenues above state-imposed limits through 2011, with the last of the revenue received by the county in 2012.
While the 1A measure was technically for a number of government operations, the BoCC at the time issued a commitment letter splitting the funds between four categories — roads, training and technology, parks and recreation, and facilities.
According to Schulte, over $3.2 million has been appropriated for roads from the 1A funding, with over $3.15 spent in the same time period.
Schulte said the money has helped apply over 3.5 million gallons of magnesium chloride on 600 miles of roads and has helped gravel 18 miles of roads.
Schulte then further broke down the 1A roads funding and expenditures by year — $613,000 funded in 2008, with $150,000 spent; almost $1.08 million funded in 2009 including carryover from 2008, with $931,500 spent; almost $1.15 million funded in 2010 including carryover, with $871,000 spent; and $1.2 million in funding in 2011 including carryover, with $1.2 million in the process of being spent.
In addition to the end of 1A funding in 2012, Schulte said declining property tax revenues will cut the overall 1A amount from about $1.5 million to around $300,000.
In 2011, the commissioners appropriated 60 percent of the overall 1A amount to roads.
Because of the decrease in roads-related funding, the BoCC is considering a roads-specific mill levy to allow for the institution of a five-year road plan currently being produced by an outside consultant.
In 2011, Schulte said, a portion of the county’s overall mill levy (18.233 mills goes to the county), 1.693 mills, goes toward roads, providing $718,000 from the mill levy, $1.45 million from sales tax (which is restricted to capital expenditures), and $1.5 million from Highway Users Tax Funding, a fuel tax.
In addressing what an additional mill levy would yield following required splits with the Town of Pagosa Springs, Schulte estimated an additional five mills would yield a net of $1.477 million, while 10 mills would yield an estimated $2.95 million and 15 mills would provide about $4.43 million.
Schulte said he did not believe the mill levy increase could be selectively applied to certain areas of the county — a belief County Attorney Todd Starr echoed.
Starr said another option would be to create an improvement district comprising the county minus existing districts such as the Aspen Springs Metro District. Starr said that option would be “messy.”
Starr continued, saying the cleanest of the options might be to enter into agreements with districts that maintain their own roads, as well as the town, and pay each a portion of a countywide levy.
Schulte then provided an example of a property valued at about $300,000. The total tax for the county’s 18.233 mills for the property would be about $460, of which the road portion would be about $43 per year. Schulte continued that, for a property of this value, each additional mill would be about $25.
The county maintains about 275 miles of roads currently and collects about $718,000 from the roads portion of the county mill levy, which Schulte said equates to about $2,600 per mile of road.
Comparing the county’s situation to Aspen Springs, which maintains about 66 miles of roads within its metro district, Schulte said the district collects 14.638 mills or $159,000, which equates to about $3,900 per mile.
Schulte also noted that the county wouldn’t know an appropriate amount to ask for until the five-year road plan is completed in August or September, also posing questions about how long the mill levy should be in place.
“If we’re going to go to the voters, for how much are we going to ask?” Schulte said, adding, “That’s information we need out of the road plan to make an intelligent decision.”
Audience member Jim Huffman said the measure would need to sunset after a given amount of time, and that specific language within the measure should detail how the funding would be controlled.
Huffman cautioned against collecting additional tax from everyone unless the county were able to bring all roads up to the same level.
Commissioner Clifford Lucero said the plan would be specific and be for five years and that de-Brucing needed to be in the ballot language “when we go out.”
Lucero also said the road plan would be necessary in order to figure out the mills proposed.
“We’re shooting from the hip if we start throwing out numbers,” Lucero said.
Huffman also cautioned against a measure that would be too complicated.
Others voiced their reactions to an increase.
“You’ve got an uphill battle here to pass a mill levy increase this year,” said Barbara Rawlings.
Commissioner Michael Whiting suggested it be looked at as a return to pre-1A mill levy amounts because 1A inadvertently and permanently reduced the county’s mill levy to 18.223 (a fact Finance Director Diane Sorenson discovered).
Sales tax reduction
The second of the proposed measures is a 2-percent reduction of the county sales tax for the purchase of new automobiles, RVs and boats.
Schulte said the idea behind the measure is to “incentivize” vendors to locate operations within county limits.
Schulte posed questions about how the measure would work with the Town of Pagosa Springs, the estimated job impact of the incentive and how long the measure would be in place.
Whiting said that, right now, Archuleta County gets 4 percent of nothing because dealers are unable to survive in Archuleta County, adding that automobile and parts sales are the single largest leakage of money from Archuleta County.
Whiting said a dealership has expressed interest in an Archuleta County location, but has hesitated due to the tax discrepancy.
Building material use tax
Garnering the most public discussion at the Monday work session was a proposed use tax on building materials, an initiative that has failed at the polls at least twice
Schulte pointed out that, in its last failure at the polls, it was combined with a sales tax on automobiles.
Schulte, as well as audience members, characterized the measure as one that would “even the playing field” for providers of building materials in Archuleta County.
To lead into the question of how such a use tax would work in Archuleta County, Schulte explained that, in neighboring Hinsdale County, the use tax is paid when the building permit is issued, with the amount being 4 percent of 50 percent of the valuation of work.
If actual receipts show the cost of materials is less than the estimate, the builder is then eligible for a refund, Schulte continued.
Schulte then posed questions about a use tax implementation in Archuleta County and whether the county has the capacity to administer such a program.
Resident and builder Tim Horning was the first to speak, noting he believed it was the combination of the automobiles in the use tax measure that caused it to be defeated previously.
“I believe campaigning the right way would make it an appealing measure to vote for come November,” Horning said.
“I think it makes a lot of sense,” said Lucero, “but we have to have a group to go out and campaign it.”
Schulte noted the county could not campaign for any measures.
Horning also noted the majority of the board members of the Builders’ Association had voiced support for the measure, but that no official support had been garnered.
Further discussion was about the cost of supplies in surrounding communities versus Pagosa Springs due to lower taxes and the existence of wholesale vendors for building supplies, with Horning saying out-of-town businesses have a 4-percent advantage when bidding packages in Archuleta County because of the additional taxes in Archuleta County versus La Plata County.
Huffman, however, said there may be a price difference other than the sales tax, as well.
Bill Hudson said the tax looks good for the person selling the materials, but not for the consumer.
“Get rid of the tax,” Hudson said. “We’re all hurting.”
Whiting posed the question of a use tax being a punitive measure against people choosing to purchase materials outside Archuleta County or if a reduction within Archuleta County would be a better idea.
The BoCC has until Aug. 16 (the last meeting prior to the Sept. 2 deadline unless a special meeting is called), to approve a resolution for each intended ballot measure.
The resolution(s) certifying the ballot questions are due to the clerk by Sept. 2.
Following the certified ballot questions, pros and cons will be sought between Sept. 8 and. 20 for each measure.