TELLURIDE TOWN BRIEFS

TELLURIDE — While it is too early to call it a trend, July marked the third month in a row of improving sales tax revenue, although still down 3.6 percent compared to last year, Town Manager Frank Bell reported to the Town of Telluride Council on Tuesday.

“We seem to be having a strong summer and we will probably exceed the sales tax projections for 2009 after the deep budget cuts we made earlier in the year,” he wrote in a memo to council.

Year-to-date, the town has collected $2.9 million in sales tax revenue, 10 percent less than it had at the same time last year, but better than expected after the 2009 projection was significantly revised. The number means that at two-thirds of the way through the year the town has collected 82 percent of its revised projection of $3.57 million.

“We’ll be down from 2008,” but above the dire message estimates, said Bell.

“It’s not as bad as we thought it was going to be,” he said.

Development related revenue is about $100,000 ahead of revised projections, however Real Estate Transfer Tax revenue, at about 638,000 to year-to-date, is presently about 70 percent behind 2008.

“Absent a remarkable recovery, we are unlikely to meet the $1.5 million revised [RETT] revenue projection for 2009,” his memo continued. “We will be lucky to make $1 million.”

CARE Tax Not Final Word On Non-Profit, Event Budgets

The community’s nonprofit organizations and special events are unlikely to be left without a financial lifeline even if Telluride’s electorate refuses a proposed sales tax increase at the ballot box this fall, Town Manger Frank Bell told elected officials who attended the most recent Intergovernmental Meeting in Mountain Village on Monday.

The CARE Tax – for Community support, Arts, Recreation and Events – would impose a six-tenths of one percent sales tax increase if approved, and would create a dedicated revenue stream to fund local nonprofits, special events and infrastructure improvements. It is anticipated to generate roughly $650,000 annually for major programs currently paid out of the town’s General Fund and Capital Budgets, including funding for grants that the Commission for Community Assistance, Arts and Special Events disperses annually to the community’s nonprofit organizations.

I don’t really want to hold the community hostage to the CARE Tax, I don’t think that’s fair,” he said.

“If we can’t keep [the CCAASE budget] the same [as the 2009 budget], I would expect some cuts but not zeroing it out by any means,” he said – as long as council approves the funding.

Residential Affordable Housing Mitigation Approved

In a rare display of unanimity council voted 7-0 on Tuesday to approve the second reading of an ordinance that will raise some existing affordable housing mitigation fees and impose new ones beginning in July 2010.

While affordable housing mitigation was not previously required on residential developments, the ordinance imposes new fees on single family and duplex residential developments, including those within mixed-use projects like penthouses over commercial spaces in the downtown commercial core.

Although a mitigation rate increase was previously contemplated, the ordinance retains the existing mitigation level on multi-family, accommodations and commercial units partly because the state property tax system disproportionately burdens commercial property compared to residential, and partly because business activity has decreased in the current economic climate, except in the case of hotels.

As an incentive for hotels to remain in single ownership, if they later convert to condo-hotel or another use provide for additional affordable housing mitigation.

Valley Floor Case Gets Scholarly Attention

The Fall 2009 edition of the Denver University Law Review is dedicated to the topic of home rule municipalities, among which Telluride’s fight to acquire the Valley Floor from Neal Blue and the San Miguel Valley Corporation figures prominently in an article written by Richard B. Collins, Director of the Byron White Center at the University of Colorado School of Law.

While Town Attorney Kevin Geiger described the 25-page article entitled “Telluride’s Tale of Eminent Domain, Home Rule, and Retroactivity” as “fairly intellectually challenging” it does a good job of dissecting the legal arguments used by both sides, he said.

“This is a pretty important case, not only locally but statewide,” said Geiger, describing it as “one of the more expansive and broadest opinions on municipal home rule authority under Colorado law,” since the Colorado Supreme Court’s 1978 decision in City of Thornton v. Farmers Reservoir and Irrigation Co.

That case concerned the city’s right to condemn water rights sited in a lake outside its boundaries and, “[w]as a major obstacle for the landowner in Telluride,” because, “The case upheld extraterritorial eminent domain in apparent conflict with a governing state statute, the very power claimed by Telluride,” Collins wrote.