~ by Bob Volpe ~
It’s all about the “Benjamins.”
The Northeast Teller County Fire Protection District (NTCFPD) and the Ute Pass
Regional Health Services District (UPRHSD) are facing serious financial issues.
As a result, they want out of the Woodland Park Downtown Development Authority district, but their request for exclusion is getting a cold response by DDA leaders and is generating more questions than answers. The situation came to a head during a DDA meeting last week.
The problems stem from the fire and ambulance districts’ limited method for raising funds. By law these entities’ only true source of revenue is proceeds from property taxes
But since the DDA’s formation about 15 years ago, they can’t get any extra revenue generated from additional property tax growth, which instead, goes into the coffers of the DDA for a limited period. When the DDA tries to lure new businesses to the city, they often include generous property tax exemptions in their offer. These
incentives, called TIF agreements, (tax increment financing) are defined as the ability to capture and use most of the increased local property tax revenues from new development within a defined geographic
area for a defined period of time without approval of the other taxing jurisdictions.
NTCFPD and UPRHSD have been asking the DDA to exempt the districts from current and future TIF agreements for some time.
In a letter issued about a year ago from the Ute Pass Regional Health Service District’s CEO Timothy Dienst, to the DDA, Dienst asked for the district to be paid back and/or exempted from all future (TIF) agreements.
In his letter, Dienst stated, “It is important that UPRHSD continue to provide quality and reliable service when needed. The ambulance services provided to residents and visitors of the city of Woodland Park by UPRHSD, represent the second most utilized public service resource response after law enforcement. The revenues returned by the DDA to UPRHSD will assist in ongoing provision of these essential services and will better allow UPRHSD to fund enhanced services to match the needs of our growing city.”
Jim Ignatius, board chairman of Northeast Teller County Fire Protection District (NETCFPD) sent a similar letter to the DDA last summer, asking for their district to be taken out of the DDA area. “The amount of annual revenue lost due to TIF agreements comes at a tremendous cost and risk to NETCFPD as well as all of you and over 13,000 citizens within our district,” he stated in the letter.
Adding to the districts’ fiscal woes is the Gallagher Amendment, approved in 1982, which will negatively impact many tax entities this year. The Gallagher Amendment divides the state’s total property tax burden
between residential and nonresidential (commercial) property. According to the amendment, only 45 percent of the total amount of state property tax collected must come from residential property, and 55 percent of the
property tax collected must come from commercial property. But unfortunately for the local fire and ambulance districts, Teller County has seen a significant increase in residential growth while commercial growth has increased at a much slower rate, resulting in lower tax revenue based on the state’s Gallagher-related calculation.
With all these forces combined, the local ambulance and fire districts are facing tough economic times. To add more fuel to the firestorm of concern, the Insurance Service Office (ISO) may lower the NETCFPD’s rating, which could impact insurance rates.
With the reexamination of the fire districts rating by the ISO, the real possibility of higher home owner’s insurance and/or higher property taxes is looming over Woodland Park residents.
No Easy Solutions
The plight of the emergency service districts took center stage during the April 11 regular monthly DDA meeting, but resulting in no set conclusions.
Board chairperson Merry Jo Larsen began the discussion on the issue with a statement. She said, “I want you guys to know that we truly are sensitive to your problem and we understand that budgeting more than ever now puts you behind the eight ball and we want you to know that. And if some things can’t work out properly and I speak for myself, but if we can’t make one thing work maybe we can come up with something else that will work to try to help out.”
Ignatius, who actually served as a previous DDA board member, was in attendance and addressed the board. He commented on the effect the Gallagher Amendment would have on the district’s revenue. He said,
“When that gets recalibrated for 2017 we’re looking at somewhere around a 20 percent decrease in revenue. It’s gonna be ‘kinda’ scary on what’s going on.”
Ignatius said, “Our revenues have been relatively flat over the last few years. We continue to build a lot of extra square footage but the revenue doesn’t come to offset or mitigate the risk. So that is creating quite a hassle or us. Anyone who is in business knows that costs go up, payrolls go up. We were forced this year to reduce our staff by one so what we currently have is 12 full time fire fighters. When you look back at past decades we had 40 volunteers and 12 firemen. Today we have 12 firemen and 2 volunteers. So the amount of boots we can put on the ground has gone down because the volunteer fireman concept has pretty much gone away.”
Board member and business owner Jon DeVaux responded to Ignatius, “We have to work out an agreement to work this out. We’re under the same kind of problem that you’ve got. We’ve got a lawsuit pending, we’ve got new legislation going on in the legislature that is going to change the way DDAs are computed. We’ve got to know where we’re at.”
Board member and Woodland Park Councilman Noel Sawyer responded, “I’m not against giving money to fire and ambulance. I think we should give as much as we can, but we still have an obligation to our creditors to pay.”
Sawyer offered, “If we could give you half the mills. Would you take it?”
Ignatius answered, “Each transaction that you do. You know what? There is never and easy answer to anything in government. You sit down with the players you lay out all the facts, you try to figure out what
works for both parties and you make it happen.”
DDA Treasurer and board member Tanner Coy broke down the numbers on current and expiring TIF agreements and how the money would go to the districts. His calculations indicate the amount refunded to the districts would not amount to a very large sum.
Coy calculated, If the districts were to be exempted from those agreements completely, the reduction in revenue to the DDA would be 21.5 percent reduction in the DDA revenue, or $121,462. But the issue gets complicated for the DDA’s revenue flow, particularly in regard to the $1 million loan the DDA owes to the city of Woodland Park.
“As you know we cannot cut so much as one penny from our budget,” concluded Coy.
Ignatius countered, “We’re not trying to take money from your budget. This would be for the future.”
The discussion ended with Larsen noting, “To be continued.”