Proposed .02 Percent Sales Tax to Cover Part of Building Cost
MONTROSE – Officials with the Montrose Recreation District presented Montrose city staff and councilors with the final plan for building and funding a new Community Recreation Center at a work session Monday.
At its Jan. 21 meeting, council will review the plan, which recommends a tax increase of 0.2 percent to cover the cost of construction of a new Rec Center off Woodgate Road on the April 2014 municipal ballot.
MRD Executive Director Ken Sherbenou told council and staff that "preliminary conclusions" from a new economic study suggested a $25.5 million investment in the new rec center would be justified.
"We have the money to run it, but we don't have all the money to build it," MRD board member Barbara Bynum said in the 30-minute presentation.
The measure, if approved by council and then by voters, would increase the city sales tax from 7.65 to 7.85 percent.
The MRD Board of Directors voted last month to suggest a sales tax increase that raised $11.7 million for the construction of a new Rec Center off Woodgate Rd., but that number soon grew to $14.1 million because, Sherbenou said, the projected interest rate is expected to rise by one full percentage point by the time the financing is finalized.
The new sales tax would expire upon raising $14.1 million toward the estimated $25.5 million construction cost, and officials say no additional tax increases will be needed to operate the Rec Center. The sales tax has an estimated life of 17 years, generating approximately $835,000 per year based upon current city sales tax collection.
"If [the] collection went up,” Byrum said, the sales tax “would end earlier.”
Sales tax revenues would be combined with money raised through grants, fundraising, partnerships and aggressive saving plans to pay for construction of the Rec Center, with just over $1 million of the projected $25.5 million going towards remodeling the Montrose Aquatic Center into an MRD field house, equipped with a new indoor turf field.
The district held a series of meetings last month to survey the public’s response to the project.
"The public input really has driven this process all along," Sherbenou said, adding that survey results showed strong community support for the new rec center.
Bynum said the positive economic impact of the Rec Center center will easily outweigh the city’s investment, and that is the message the district will take to voters next spring.
"Even it they never use the Rec Center it's still a benefit to their community in terms of increasing their property values, increasing the health of their community and being an economic driver," she said.
In the spring of 2012, the MRD's proposed Measure A, calling for a 0.2 percent sales tax increase for 10 to 14 years to fund a new recreation center, failed, 2,971 to 2,372. The estimated cost in 2012 for the new Rec Center was around $22 million, but an uptick in construction costs, Sherbenou said, has raised that estimate by roughly 12 percent.
A new intergovernmental agreement between MRD and city officials however, would save the district $100,000 annually through shared services with the city.
Since 2012 the MRD, through careful budgeting, has been able to save about $800,000 annually from revenues to help pay for the operating costs of a new Rec Center (the $800,000 is one-third of MRD revenues of $2.4 million). MRD staffers say this savings, along with the purchase of the 26 acres of land off Woodgate Rd. for the Rec Center, improves the plan’s chances of winning voter approval.
The district's primary message is this: Montrose is the last sizable Western Slope community (besides Grand Junction) that lacks a Rec Center, and voters in Delta, Cortez, Gunnison, Durango and Fruita all passed one percent tax increases to fund their community Rec Centers – five times the tax increase the Montrose Recreation District is seeking. The Montrose County School District has already signed off on plans to remodel the Montrose Aquatic Center for its use.
Montrose City Councilor Kathy Ellis voiced concern about increased traffic along Woodgate Rd. during construction, to which City Manager Bill Bell responded that the city would make it a “priority” to move Woodgate Rd. up on its priority list for impact mitigation.
Councilor David Romero asked how many people use Delta's Rec Center, and at what cost, to which Sherbenou responded that the MRD estimates the number of daily users at the Montrose Rec Center would be three times the number of people using the Delta Rec Center.
Opponents suggested the MRD collect signatures petitioning the sales tax increase, rather than bringing it to council. In a letter to The Watch, resident Dee Laird wrote, "No doubt the question will be on the ballot again, but already there are plans to oppose it.
"The Rec District Board, rightly or wrongly, seems to have tunnel vision, focusing only on how to make a new Rec Center a reality,” Laird said. “But, as I pointed out, the reality of the economic situation is that the average taxpayer doesn't need any new taxes, no matter how noble the cause is perceived to be by a select few.”
Laird reported that 12 percent of the Montrose population is on food stamps, 9.3 percent receives medical assistance, 13.7 percent is at the poverty level, 8.4 percent is unemployed, 19.5 percent of the population is aged 65 and above and largely live on fixed incomes, and 60 percent of School District children receive lunch program assistance. Given these numbers, Laird said, and the recent recession, too many families and individuals are too strapped to be able to afford a tax increase.
"Montrose City and County are the only local entities in Colorado that levy a sales tax on food. Maybe removing this tax should be considered for the ballot in lieu of an addition for the Rec District project that is not widely supported in this economy," Laird wrote.
Residents can inspect the plan at www.montroserec.com.