College, city to talk taxes out of court
Colorado Mountain College board members decided Monday to negotiate rather than litigate. At a CMC Board of Trustees meeting in Aspen, the board unanimously approved a motion that would authorize the college’s staff and board members to negotiate with representatives of Glenwood Springs and the city’s Downtown Development Authority on how and where the DDA’s tax increment financing will be collected. The decision means that a lawsuit filed April 19 on behalf of CMC, Garfield County and two taxpayers against the city and the DDA will not yet be served to the defendants. It will, however, remain filed in Ninth District Court while negotiations are ongoing.The suit alleges that the DDA’s funding mechanism, tax increment financing, would take some tax money, possibly a substantial amount, away from CMC, the county, the Roaring Fork Re-1 School District and taxpayers in general. DDA representatives insist the financing system will, in the end, be beneficial for everyone. They say improvements done by the DDA in the downtown core should cause those property values to increase at a faster pace than they would otherwise and that the DDA could partner with those other entities to make improvements that would directly benefit them.CMC board members voiced two main concerns Monday. The first was whether Glenwood Meadows – a large commercial and residential development already approved in Glenwood Springs – will be annexed into the DDA.If Glenwood Meadows is annexed, the majority of its reassessed value would be classified as new construction. So most of its property taxes would bypass CMC, Garfield County, the school district and other taxing entities and instead be collected by the DDA.Glenwood Meadows developer Robert Macgregor already has endorsed annexing Meadows into the DDA. The college board also would like to see whether a cap can be placed on the amount of tax increment financing revenue taken in by the DDA. “What we’re worried about is the DDA becoming all-powerful,” one CMC board member said. CMC spokesman Joe Marquez said the college wants to straighten out these issues as soon as possible. “They’re going to try and do it within 30 days,” Marquez said. “Once those issues are resolved, it looks like things will be fine.”Glenwood Springs city manager Mike Copp said representatives from the city and CMC plan to sit down soon to discuss what happens next. “I wouldn’t say it’s negotiations, it’s discussions,” Copp said. Copp cautioned that even if the present City Council agrees to terms with the college, it’s possible those terms could be changed by future City Councils. He did, however, express optimism that the discussions will be “fruitful.”Glenwood Springs Mayor Don Vanderhoof said the first meeting between the city and CMC will be to set up ground rules for the negotiations. But once those rules are laid, the mayor said, he’s generally very open to negotiating with representatives of the college and he hopes some kind of an agreement can be reached. “They have some legitimate concerns,” Vanderhoof said. “I, as a councilman, am willing to sit down and negotiate something that would be a win-win situation for everyone.”But while he’s ready to negotiate, Vanderhoof stressed that he and others at the city feel like their legal position is strong.Jesse Smith, assistant county manager for Garfield County, explained some of the implications of losing tax money on new construction within the DDA district and warned that it would be tempting for the Glenwood Springs City Council to annex Glenwood Meadows into the district. “I can’t imagine if I were on the City Council that I would turn that down,” he said. Tax increment financing, or TIF, is a system of generating money to pay for projects by using a portion of sales tax revenues and the rise in property tax, or ad valorem, revenues.The year leading up to Feb. 28, 2002, was designated as the base year for the TIF, so 50 percent of the growth in city sales tax revenues in the downtown district and 100 percent of the rise in property taxes within the district following that year will be allocated to the DDA.The funds could pay for a new parking structure or other downtown improvement projects.The financing system lasts for 25 years. The TIF system was chosen over a 5-mill property tax so citizens of the city would not be burdened with more taxes. Rather, the money is diverted from other taxing entities as property and sales tax revenues grow. CMC and Garfield County argue that with the myriad of new projects on the horizon in the downtown core – such as a new hotel and tramway at the Two Rivers Plaza just off Highway 6 & 24 on the way to West Glenwood – all the improvements would be assessed as new construction. Money that would have gone into CMC and Garfield County coffers will be lost to the DDA. DDA director Bill Evans said the vote for negotiations is a good idea. “We could have done this a long time ago,” Evans said. “We want to be a good partner. The city and the DDA both want to be good partners and not be adversaries.” The decision to hold off on serving the lawsuit goes for its other plaintiffs – Garfield County and the two taxpayers – as well.
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