Library district may ask for tax increase
Having recently approved budget cuts requiring layoffs and reductions in hours and services, the Garfield County Library District Board of Trustees may ask voters for a tax increase.
That plan isn’t fully formulated yet, but board members and staffers agreed during their Thursday meeting to start exploring the library district’s options.
If it can quickly determine the best funding mechanism to pursue, the board might be looking to get that question on the November ballot this year.
Sandi Langlais Kister, the board’s at-large member, encouraged the board to move quickly on a decision whether to pursue a mill levy increase because getting that question on the November ballot will require the district to hit the ground running.
The vast majority of the organization’s revenues comes from a property tax (1 mill) approved by voters in 2006 and from county sales tax.
Typically the property tax has made up a larger chunk of the library district’s revenues. But this year property tax revenue, tied to oil and gas production, is projected to significantly declined. The library district isn’t the only organization affected by declines in oil and gas production, but it projects a drop of $1.2 million in property taxes next year.
“The board is exploring all possible options to secure the future of our libraries, including the possibility of going to the voters,” the district’s new executive director, Jesse Henning, wrote to the Post Independent. “These discussions are occurring due to the financial realities of our region.”
That drop in property tax revenue accounts for 30 percent of the district’s operating budget, “and we have been told to expect continued decreases for the next few years,” he wrote.
Next year’s budget anticipates nearly $4.6 million in revenue, with property tax and sales tax revenues each bringing in about $2.2 million.
“Additionally, the libraries have lost $2.18 million in revenue over the last five years due to the ongoing Noble Energy sales tax refund settlement, and we are expecting to lose another $100,000 in 2017,” wrote Henning.
In a lawsuit the oil and gas company Noble Energy said it had been erroneously paying sales tax on fracking materials, and a 2010 settlement has since required refunds and withheld sales taxes from Garfield County entities that would otherwise pocket that revenue.
“At this point, I think we’re looking at all options,” said Todd Anderson, the board’s president.
Whether that’s a property tax increase, sales tax or some other revenue source is yet to be seen, “but I think the mill levy is probably the most effective way to go.”
The timing of such a move is also in question. Anderson believes the law only allows the library district to pose a bond issue question on odd number years, so the board and staff is looking into whether similar restrictions apply to property taxes.
The board and staff plan to meet with Garfield County commissioners to get a better grasp of their options.
“It’s pretty preliminary, but I think if we’re going to move forward for the November ballot we need to be pretty on the spot in February,” said Anderson.
The district is also weighing its options for refinancing its certificates of participation, which it used to pay for new facilities. However, the district’s finance manager, Kevin Hettler, advised that interest rates are not in a position where that move would be beneficial now.
“At the same time, we are seeing demand for library services increasing dramatically despite these continued decreases in funding,” wrote Henning. “We are checking out 91,000 items a year more than we did in 2012 and seeing 79,000 more library visitors. Last year alone, our public internet computers were used for a total of 63,820 hours — the equivalent of seven years. Our services are in very high demand by our communities, and we are doing everything we can to meet that demand. But it is difficult to see how we could keep up if we face another big revenue hit in 2018.”
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