Tax increase proposed for Nederland roads

John Scarffe, Nederland.  A sales tax increase for road maintenance in Nederland could be on the April ballot after a discussion during a regular meeting of the Nederland Board of Trustees at 7 p.m., December 5, 2017, at the Nederland Community Center. Town Administrator Karen Gerrity told the Board that one item in consideration for the April ballot is a sales tax increase to improve roads.


A quarter percent increase would generate $95,000 annually. Town staff has talked to legal counsel and they could bring to the January 16 meeting an ordinance about the ballot issue and one allowing the Town to take on the debt for the Biosolids project, Gerrity said.


“This is to inform the Board of the necessary steps to prepare for the April election,” Gerrity wrote in the memorandum to the Board. “Staff will be adding two items to the ballot: an initiative to increase taxes for road improvements in town and language authorizing debt for a State Revolving Fund (SRF) loan.”


The Town’s attorney will draft an ordinance for the tax increase and recommended adding this to the January 16, 2018, Board of Trustees meeting agenda. The attorney recommended that staff work with the Town’s Bond Council, Butler and Snow, to draft the debt authorization language for accepting funds from SRF that conforms to the rules of TABOR, according to the memo.


“In a turn of events, the Biosolids project timeline has changed. Staff learned that a vote is required prior to an SRF application,” according to the memo. “Staff will pursue SRF funding after the April election.


“The Colorado Department of Local Affairs (DOLA) will not fund the project unless SRF is secured. Securing funding will become the priority for 2018, and breaking ground on the project will not happen until 2019,” according to the memo.


At the Board’s November 21, regular meeting, staff discussed the importance of beginning the process to prepare for the April election. Debt authorization became the top priority in order to move forward on the Biosolids Project.


The need to raise taxes in order to fund needed road repairs was also briefly discussed. Staff recommended putting both ballot issues before the voters for the 2018 election.


“Unless otherwise directed, staff will instruct the Town Attorney to draft an ordinance for a 0.25% sales tax increase, which will increase sale tax from 8.735% to 8.985%. This will result in approximately $94,898 annually which will be earmarked for roads,” according to the memo.


“Unless otherwise directed, staff will direct Town’s Bond Council to draft an ordinance for debt authorization for $2,000,000 plus 2 percent interest for 20 years for the purpose of the Biosolids Project. Both ordinances will be presented to the board of trustees at the January 16, 2018, meeting.”


Nederland Public Works Director Chris Pelletier said the water and sewer funds are classified as enterprise funds and can’t authorize debt. It requires a vote to authorize debt.


“This year we got $256,000 which eked us over the threshold. There may be a possibility that we can reclaim our enterprise status,” Peltier said.


“I have a meeting next week to discuss this further and hammer out the details. We need to bring the project back into the timeline.”


Mayor Pro-Tem Charles Wood said, “If we have to wait for a vote in April, it will throw the project into 2019.” Gerrity said that the process starts in March.


Pelletier said: “I have re-applied for DOLA for the next cycle. If we can reclaim our enterprise status we can apply for a grant.”


Gerrity said that because it’s a municipal election we can wait until January to draft language. It will raise the Town to 8.95, which is just above the city of Boulder.


Mayor Kristopher Larsen said the Board will have a public hearing at the January 16 meeting. “Tonight, we’re just introducing the idea and asking staff to prepare.”


Trustee Dallas Masters said he’d like to see more background and research and see what other sales tax cities are doing.


Gerrity said that we will be the highest of any city in Boulder County.


Masters said he wanted more information on how the revenue is going to be spent and what’s that going for. “We need to have a ten-year plan to show the voters. How long is the increase? All these things need to be fleshed out.”


Gerrity said that staff is recommending it is added on and stays on. Pelletier put together the roads assessment by JVA, which essentially prioritized paved roads over other roads. We’ve talked about several different options – get one bond together.


“We would rather leverage our money with grants. We agreed we need more money to maintain roads and would like to use these funds to do that very thing,” Gerrity said. “We could start already increasing funds we use for the roads and leverage that to get a grant to fix particular roads.”


Larsen said that the ordinance should be written in such a way the amount and language is flexible. Revenue is to be used for streets or an additional resolution. Masters said it would be nice to know the ten-year plan of using this — something you could hold up in front of people.


The Board gave four nods to move ahead. The Board met on December 19. 2017, at the Nederland Community Center.



(Originally published in the December 21, 2017 print edition of The Mountain-Ear.)