Editor’s Note: The following letter was submitted by former city council member and local resident Bob Carlsen, in response to a previous article in the Nov. 2 issue of TMJ, entitled, “Woodland Park Seeking a 15%, Nearly $2 Million Budget Hike for 2022.”
Dear City Council Members:
For a number of years it has been the consensus, or campaign promise of many, to pay off the City debt as soon as the prepayment penalty ends in 2025. The principal due on this debt in Jan 2026 is $1,725,000 for the COPs for Memorial Park (conveniently ignored in the proposed 2022 Budget) and $5,815,000 for the municipal bonds for the WAC, for a total of $7,540,000. This would have required a reserve from the General Fund of $924,550 in each year from 2018 to 2025. The actual reserve has been far below this amount. The 2022 budget proposes setting aside a total (including previous reserves) of $1,185,000 by the end of 2022, leaving $6,355,000 to be set aside in 2023, 2024, and 2025, or $2,118,333 per year.
In 2020 revenues exceeded the budget by $2,625,258.20 of which $1,000,000 was used to increase the reserves and the remainder used to increase City expenditures. Some of these expenditures are needed including a 3% cost of living increase in 2021, with another 3% increase proposed in 2022. In 2021 and 2022 the total COLA provided to Federal government employees, retirees, and Social Security annuitants is 7.5%. To be fair to our employees and to reduce the turnover, the 2022 budget should provide an addition 1.5% COLA above the proposed 3%. Some of the proposed expenditures are not needed, as reflected in the proposed 17% increase of expenditures over the previous year. Much of this could be used to increase the reserves. If it were at all possible to raise the reserves, after the debts were paid off, the City would no longer have to budget $975,000 for debt payment or the $2,118.333 for the reserve. This leaves over $3,000,000 that can be used each year for other City needs or reduce taxes. But the City cannot afford to increase the reserves this much.
Let us start by agreeing to abandon the fiction that City Council ever intended nor is now capable of reserving sufficient funds to pay off the $7,540,000 debt by the beginning of 2026. If anything, this was a useful gimmick to constrain city expenditures, which the city is now trying to recapture with this obvious revenue glut. Council will just have to deny unnecessary budget requests, which I could identify, but won’t. Even if this City Council were to strive to increase the reserves in 2022, the Council elected in April 2022 is not bound by such intentions, and could use whatever reserves have been set aside on other priorities. They may believe that paying off a 3.5% loan over 30 years is a good deal, allowing future residents of Woodland Park and Teller County to pay for this amenity. So this is an argument not to increase reserves, but to use our revenues now for priorities that would have been deferred to 2026.
One high priority would be to reduce property taxes by capping the amount of revenues at $1,700,000, the average annual amount the City received in the decade before the recent large increases to property assessed values, thus eliminating the windfall to the City to the detriment of our residents. This would reduce the projected 2022 property tax revenues from $2,111,170 to $1,700,000, a reduction $444.170. This is equivalent to a 3 mil reduction for 2022, from 15.75 mil to 12.75 mil. Should future assessed values decrease, the mil rate can be increased. Should one argue that the City cannot afford this reduction, an easy solution is to pay the entire Street Operations budget of $532,437 from the Street Capital Improvements (410) Account instead of the General Fund. The Pavement Management Plan calls for expending this amount annually for street maintenance, including crack sealing and pot hole repairs, the task of our Street Crew.
Last November our voters agreed to cap property tax revenues for the NE Teller County Fire District, and adjusting the mil rate each year to meet that cap, just as I’m proposing now. On 2 Nov 2021, Colorado voters approved Proposition 120 that reduces property taxes for Colorado residents and businesses. Why can’t the Council of an overwhelmingly conservative city do the same now? The first step would be to agree to a Ballot Initiative, a draft I previously proposed for your consideration, for voter approval in April 2022.