Declining tax revenue prompts hold on Rifle City Hall renovation
A projected decline in sales-and-use tax revenue prompted Rifle City Council to place renovation of City Hall on hold in order to secure enough funding to complete other infrastructure projects.
During an emergency meeting June 29 to address the issue, City Manager Tommy Klein told Rifle City Council tax revenue is unlikely to meet a 3% increase projected for 2022. The decrease, paired with inflation, means the city cannot support every desired project.
“Our street improvement fund is going to need a boost at some point,” Klein said. “We have a lot of projects that we need to do.”
Estimated costs for City Hall renovation have about doubled since originally going before council. Contracting with Phil Vaughn Construction Management of Rifle, the project increased from $3.5 million to $4 million before beginning in 2021 to an estimated $7.3 million today.
The first two phases of renovation included reconfiguration of the finance department customer service area, renovation of physical spaces, added security and plumbing and sewer improvements.
The final phase, which the city already budgeted $248,677 for in March, consisted of, among others, ceiling demolition, window replacement and masonry work on the third floor.
But other major projects loom on Rifle’s radar, prompting City Council to decide what takes the most precedence. This includes a $7 million project to enlarge piping at the city’s water facility, $3.5 million to renovate the park and ride bus station and potentially adding a new roundabout at the intersection of Whiteriver Avenue and U.S. Highway 6 for an estimated $5 million to $6 million — of which is being supported by a $1.8 million grant through the Colorado Department of Transportation.
The city has also secured $2.8 million in American Rescue Plan Act funds for the roadway projects.
February through April sales-and-use tax collections totaled about $3.23 million — $230,000 more than the same timeframe in 2021. But since then collections have tapered, with May and June expected to fall below 2021 levels, and City Council needed to decide on alternatives to completing City Hall.
“If something happens and you have no general fund backing it up,” Rifle Mayor Ed Green said, “you’ve got employees going out the door.”
The city could simply opt not to complete the third phase of City Hall renovation, which would help shrink project cost to $6.6 million, Klein said. The city could also take out a $5 million bond, re-appropriate funds from its parks and recreation department, raise certain sales taxes or not pursue the infrastructure projects on the to-do list.
Rifle City Council member Brian Condie favored completing City Hall — originally built in 1984. He said more space is going to be needed to hire additional employees based on Rifle’s growing population, while it’s likely going to cost more to complete City Hall renovation later on.
“The problem I have with piecemeal is you usually end up spending more, and you get a less effective project,” he said. “If we kick the can down the road on this, it will never be done.”
Rifle City Council Member Sean Strode favored completing other infrastructure projects because they affect more people.
“When I think about the roundabout, that affects thousands of people a day, as opposed to City Hall,” he said.
The discussion over what to do over City Hall triggered questions over why sales-and-use tax revenues are dropping. Car sales and building-use, in particular, are inhibiting adequate growth, according to city documents.
Rifle City Council member Clint Hostettler also suspected inflated gas prices have kept people from traveling more.
“We’re not getting as nearly as much traffic to Rifle as we normally do in the summer,” he said. “People aren’t driving more.”
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