The town of Basalt will issue a “voluntary refund” to local taxpayers as soon as this fall for nearly $2 million in property taxes that were paid in excess during the years of 2016 to 2019. On Tuesday night and in a split decision, elected officials voted on first reading of Ord. 15 to pay back residents and businesses for overcharges from the four-year period.
TABOR, or the Colorado Taxpayer’s Bill of Rights, requires a maximum rebate of four years when there’s been an over collection. The overcharge was discovered early in 2019 by finance director Christy Hamrick.
Certificates of Participation, which do not require voter approval, will be the financing mechanism. Town Manager Ryan Mahoney stressed that the refund will not come out of the town’s general fund.
Mayor Jacque Whitsitt reiterated that she believed town staff and outside counsel had completed its due diligence in determining the refund was the best course for Basalt. Joining Whitsitt in the affirmative vote were councilors Ryan Slack, Jennifer Riffle and Katie Schwoerer. Absent was Gary Tennenbaum, who earlier this month supported this decision.
Councilman Bill Infante, who is opposed to the refund, was joined in his no vote by Auden Schendler. Infante stayed true to his previous opinion that “Issuing a $3 million refund is going to saddle the Basalt voters” into the future. (According to the ordinance, the maximum total repayment shall not exceed $2.8 million and the lease term shall not go beyond Dec. 1, 2029. The payments will run about $280,000 annually.)
Infante has consistently called for putting this question to the voters, a suggestion with which the majority of council disagreed.
“You can’t buy trust with a $900 rebate,” Infante said. That’s the estimated average refund for a homeowner that was cited last month by the town manager. Businesses would on average receive a larger refund as they pay a higher rate.
Infante has remained firm in the opinion that “Every penny collected was for the public good and the benefit of Basalt.”
Schendler, who was absent during the July 9 meeting when some of these issues were fleshed out, opined that, “We’re struggling with two different forces trying to do the right thing.”
He said, “That’s a big deal to add debt.”
But Schendler also posited that taxpayers be allowed to “gift” the money to either another entity or allow the money to be placed in an independent fund.
“There’s this positive opportunity to turn lemons into lemonade,” Schendler said. “Put it in the hands of the people. You could then get a movement where people say, ‘this money can go to good community causes and benefit the community.’ We could build a community chest or a trust fund,” he said, while urging staff to be open to these possibilities.
Several on council, as well as the town manager, seemed open to this suggestion, noting that specific uses for the money, including day care, wildfire mitigation and the arts, could be targeted.
The COP’s will be guaranteed by Town Hall or another local property, elected officials decided Tuesday night in a separate vote. A section of the TABOR amendment states that a municipality may use “any reasonable method” for a refund, to include tax credits, rate reductions and direct payments. A survey of residents showed that a direct payment was favored.
Voters will still decide in November on a ballot question that would set the mill levy rate at 5.957 mills.
According to the town, “Since 1994, the town’s general operating mill levy has ranged from 6.151 mills for the 1994 fiscal year, to a low of 2.562 mills in the 2010 fiscal year. The general operating mill levy for the last four fiscal years has been: 5.957 mills (2019), 5.792 mills (2018), 5.810 mills (2017) and 5.480 mills (2016).”
TABOR was originally approved as a constitutional amendment in 1992 and requires a public vote before tax increases can be implemented. However, two years after it was voted in, Basalt residents opted overwhelmingly to “de-Bruce,” which lessens some of those regulations.
Second reading and a public hearing on Ord. 15 will be held Aug. 13.