The Crested Butte News Serving the Gunnison Valley since 1999
Obligations gobbling up RETT this year
The Crested Butte real estate transfer tax (RETT) has helped fund millions of dollars’ worth of nearby open space over the past several years. But the economy has landed a blow to the RETT funds as real estate sales in town have slowed down and prices declined. As a result, the Town Council received a warning at the Monday, April 1 council meeting that there wasn’t a lot of wiggle room in the open space fund.
“You probably shouldn’t be talking about a lot of new projects right now,” counseled town finance director Lois Rozman. “We need to get phase 3 of the Kochevar project paid for so we’re not just throwing away rent funds year after year.”
In a memo to the council, Rozman pointed out that the RETT open space fund has a current balance of $681,664 but $100,000 of that is earmarked for conservation easement protections. The Kochevar parcel “rent” is $28,000 and the payoff is $759,000. Anticipated 2013 revenue is a bit more than $400,000.
“We have agreed with the Trust for Public Land to purchase phase 3 of the Kochevar property at the end of 2013, assuming transfer tax comes in as budgeted,” Rozman wrote. “If we do not receive the needed transfer tax we will be pushing the phase 3 purchase into the 2014 budget and continue to pay lease payments on the property.”
Through February, the town has collected $56,000 in RETT funds, compared to $62,500 through February 2012, Rozman noted, saying, “The average annual collections for open space are around $410,000 since 2000 (excluding three extraordinary years of 2004-2006).”
If the anticipated revenues come in, Rozman said, the RETT open space fund could have a balance of about $200,000 after paying off the Kochevar parcel. “If this occurs, it would allow the Town to talk about future projects during the 2014 budget discussions,” Rozman’s memo concludes.
Rozman cautioned the council against committing to future projects until the budgetary situation firms up. “If you commit $50,000 you are probably okay but $500,000 is probably going out on a limb.”
Town planner John Hess said he would prefer to see more than the $100,000 budgeted for conservation easement protections. “It’s essentially an insurance policy for the 18 conservation easements held by the town,” he explained.
Mayor Aaron Huckstep said that given the complexity of such easements, $100,000 wouldn’t go far in legal fees to protect the land.
Rozman suggested the town could continue to fund the legal earmark with $20,000 a year until an adequate amount is attained.
“It just seems like a heck of a lot of money just sitting there,” countered Councilperson Jim Schmidt. “I have faith in the people on the other side of the conservation easements. But stranger things have happened, I guess.”
The discussion was meant for informational purposes only, so the council made no decisions and took no action on the matter. But they are now aware of the tight financial situation for the open space fund.
