Silt ‘urban renewal authority’ moves a little too fast
Post Independent Staff
Glenwood Springs, CO Colorado
SILT, Colorado – The town government here, in its eagerness to promote economic development by setting up an Urban Renewal Authority (URA), appears to have run just a bit afoul of state law.
But a town official assured the Post Independent that it was simply a misunderstanding that started with the Garfield County Assessor’s Office.
A state bureaucrat recently sent a letter asking Garfield County Treasurer Georgia Chamberlain to hold off on paying tax proceeds to Silt derived from a property tax levied by the URA. The reason, according to the letter, is that URAs cannot levy taxes.
The amount in question is a tax bill for $4,247, based on the value of the once-vacant commercial lot now occupied by the Dollar General Store. Chamberlain said she expects to refund that amount to Dollar General in the near future.
Scott Olene, manager of local government services for the Division of Local Government/Department of Local Affairs, wrote to advise Chamberlain, “Please note that Urban Renewal Authorities are prohibited from levying ad valorem taxes” by state law.
Ad valorem taxes are levied against real estate or personal property, and payments typically go from the state, through the county government and then to the towns or other taxing entities.
Olene told the Post Independent that the authority can collect revenues based on property taxes or sales taxes, or both, which can be the basis for what is known as a “tax increment financing” (TIF) program.
But the URA, he said, is prohibited from levying its own taxes.
The revenues to the authority come from annual increases in the assessed value of property (or the annual increases in sales tax proceeds collected, if that method is used) within the authority’s boundary. The principle behind the TIF is the belief that the property’s increase in value is linked to its inclusion in the URA.
The important part in this case, he said, is that the URA, which is to be funded by a property-tax-based TIF, cannot collect TIF revenues until the URA has existed for two years. By the second year, he said, the value of properties within the URA will have risen and the URA can benefit from that increase.
But the Silt authority tried to collect its revenues in the first year of its existence, Olene explained.
“It was an accident,” Olene told the Post Independent, predicting that it will not require much work by the town to fix the problem and get the authority on track.
Silt Town Administrator Pamela Woods agreed.
In an email to the Post Independent, Woods noted that the town received a “tax certification notice” from the assessor’s office toward the end of last year. The notice asked the town to provide a formal certification of property tax rates linked to Silt’s Urban Renewal Authority Service Plan.
“Assuming that the assessor was requesting that we provide a certification for this plan, we provided what we believed they were requesting,” Woods wrote. “Apparently, the assessor’s office sent this to us in error, a year ahead of schedule, and we responded.”
She emphasized that the town will work with Assessor Jim Yellico, Chamberlain, Olene and anyone else to ensure that the TIF collection mechanisms are correct and Silt’s Urban Renewal Authority is operating as it should.
And, she predicted, once a new assessment is conducted on the Dollar General property, “the value will be far in excess of the current value, and we will receive far more than the $4,247.”
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