Snowmass Village, Colorado:
Village financiers to look at alternate sources of revenue
Weaker than expected real estate sales in Snowmass Village this year have the town government looking for other ways to bolster its transfer tax fund, which is burdened by demands from recreation to roads, and landscaping to capital equipment purchases.
As budget season approaches, hard choices will need to be made about reserve monies versus operating dollars, and how to fund the Snowmass Recreation Center’s $441,000 annual subsidy, the town’s financial advisory board recently determined.
“The RETT [Real Estate Transfer Tax] fund continues to be troubling,” said Marianne Rakowski, the town’s finance director during a meeting earlier this month. “Our revenues are not covering our expenditures in this fund.”
Current estimates project that 2014 RETT expenditures will exceed revenues by $682,012. This year’s budget is $3.6 million.
“We’ve found it’s a non-sustainable revenue source,” said board member Rick Griffin.
Since 1986, the town has levied a 1 percent tax on the sale of property. In 2004, Snowmass voters approved placing additional recreation-oriented demands upon the RETT. The fund already was contributing to the repair and maintenance of roadways, capital expenditures of buses, landscaping of parking lots and other rights of ways.
In Aspen, the affordable housing development fund and the Wheeler Opera House are the beneficiaries of that city’s RETT tax, according to community relations director Mitzi Rapkin.
Maintaining a reserve fund of about $2 million in the RETT is another priority for Snowmass town officials that was outlined during early budget discussions. In 2009, during the depth of the recession, Snowmass Village was glad to have cash on hand.
That year, town sales tax was down 15 percent, county sales tax down 175 percent and other general fund revenue was off by 16 percent.
Then-town councilman Arnie Mordkin implored council to dip into the “rainy day funds, because ‘it’s pouring now.’”
Five years later, the real estate transfer tax is still lagging behind Aspen and a resurgent downvalley market, Rakowski said.
For the first six months of the year, prices per square foot in Aspen averaged $1,201 while in Snowmass Village the average square foot sale price of a residential property was $639, according to Land Title.
Many blame the unfinished Base Village project for the widening chasm between property values in Aspen and Snowmass Village.
Subsidy hasn’t dropped as expected
In looking at the subsidy levels at the Snowmass Recreation Center and Aspen Recreation Center, an apples-to-apples comparison is difficult because of the varied programming and range of facilities.
Snowmass’ rec center subsidy is $441,000 while Aspen’s is $2.264 million this year. When taken as a percentage, town of Snowmass Village recreation programs are 39 percent subsidized and 61 percent recovered, according to Rakowski. Aspen’s are 58 percent subsidized and 42 percent recovered.
Griffin said he’d expected the annual recreation center subsidy to have dropped to $250,000 by now based on lofty expectations on where real estate sales and values would be in Snowmass Village.
In addition to financial disasters, the financial advisory board also recommended being prepared for natural disasters such as wildfires. If Snowmass Village follows Colorado Springs’ recommendation (based on last year’s catastrophic fires) to set aside 2 percent of its general fund revenues for natural disasters, that would be $283,510.
For more information, please read the full article:
http://www.aspendailynews.com/section/home/163594
Leave a Reply