HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/08/2014 - POTENTIAL LARIMER COUNTY REFERENDUM TO EXTEND THEDATE:
STAFF:
July 8, 2014
John Stokes, Natural Resources Director
WORK SESSION ITEM
City Council
SUBJECT FOR DISCUSSION
Potential Larimer County Referendum to Extend the Help Preserve Open Space ¼ Cent Sales Tax.
EXECUTIVE SUMMARY
The purpose of this item is to seek Council input on a proposed extension of the County’s ¼ cent open space
sales tax, Help Preserve Open Space (HPOS). HPOS provides significant support to the City’s Natural Areas
Department (NAD) but is set to expire in 2018. A ballot measure extending the tax may be referred by the Board
of County Commissioners to the voters in November. A Council agenda item has been scheduled for August 19th
to consider an endorsement of the final HPOS ballot language.
Larimer County staff has prepared three potential ballot scenarios for the Commissioners to consider. The
alternative preferred by County officials would reduce HPOS revenues received by the NAD by approximately
14%, or $530,000, beginning in 2019. The reduction would represent an overall diminution of NAD revenues by
approximately 5% beginning in 2019. Natural Areas staff supports this option as long as the NAD is able to
discontinue a $350,000 a year contribution for the development of the paved trail system; and, as long as West
Nile Virus treatments continue to be financed by the general fund, a $134,000 annual savings to the NAD.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Is City Council comfortable with the staff recommendation to support the potential ballot issue?
2. Is City Council comfortable with the County’s preferred alternative (which staff supports)?
BACKGROUND / DISCUSSION
The original version of HPOS was initiated by citizens and first approved by voters in 1995; the tax was collected
from 1996-2003. In 1999 a citizen-initiated extension of the tax was approved by voters and extended the tax from
2004 - 2018. Per the current ballot language, the County can receive between 35-45% of the tax, and the
incorporated cities within the County must receive no less than 55% of the tax. Monies are allocated to cities
based on population or sales tax revenue generated - whichever benefits each city the most. Currently the County
receives 42% of the revenues; the cities receive the remaining 58%.
The County must spend 70% of the revenues it receives on land conservation and development of acquired lands
and may spend no more than 30% of the revenues on operations and maintenance. Fort Collins may spend the
revenues it receives from the County in accordance with the following ballot language:
[T]he revenue deposited shall be used to further implement the Fort Collins Natural Areas Plan
[Master Plan] and to further implement of the Fort Collins trails program; and that a portion of the
revenue shall be used for long-term management and maintenance of natural areas and trails…
The Natural Areas Department currently receives approximately 37% of its revenues from the HPOS tax. In 2013
these revenues amounted to $3,814,000. The majority of the revenues are used to support the Department’s
operations and maintenance. In addition, these revenues have supported a $350,000 a year contribution for the
paved trail system that goes through, and links, the City’s natural areas and parks. This ongoing contribution was
instituted in 2003 when City revenues were affected by an economic downturn.
July 8, 2014 Page 2
HPOS revenues are particularly important to the Department due to spending restrictions that are contained in
Open Space, Yes! (OSY) the Fort Collins ¼-cent sales tax that supports the NAD. OSY requires that 80% of its
revenues be spent on land conservation and restoration; the remaining 20% can be spent on operations and
maintenance. Thus, the Department combines HPOS revenues and 20% of OSY revenues to fund core
operations (such as trail, parking lot, bathroom, and fencing construction and maintenance as well as other day-
to-day functions).
For several months a committee has been meeting to assess the financial needs of Larimer County for future
management of existing open space lands, as well as acquisition and management of new lands. The committee
is composed of citizens, a Fort Collins City Councilmember (Gerry Horak who is an appointed member to the
County’s open lands board), County staff, members of the County’s Open Lands Advisory Board and the County’s
Parks Advisory Board, and Legacy Land Trust.
This discussion has been deeply informed by Our Lands Our Future, an extensive year-long exploration of the
future of open lands programs throughout the County. The study was conducted by Larimer County in
partnership with local municipal governments, including extensive participation by Fort Collins. A great deal of
polling data was collected that demonstrated strong support for continued land conservation and recreation
programs on a countywide basis. The full OLOF report can be found at <http://larimer.org/ourlands_ourfuture/>
Based on the discussions of the committee, three different scenarios for an extension of HPOS have been
developed. All three options keep the sales tax at ¼ of a cent. Each of these options has various financial
implications for the County and the cities. The implications have been modeled using a financial analysis tool that
was developed for the County as part of the OLOF planning process. Fort Collins’ Natural Areas staff played a
key role in developing the model which projects the costs of managing various kinds of land, as well as acquisition
costs.
Scenario I would retain the City/County revenue share-back at 58% for the cities and 42% for the County. The
County’s spending restrictions are altered (from the 70% for conservation/development and 30% for operations)
to 35% for acquisition and development, 50% for long-term management, and 15% flexible funds. This approach
would allow the County to conserve up to 12,000 acres of land; however, in ten years the County would not have
enough revenue to maintain its properties. This scenario would keep revenues to Fort Collins whole.
Scenario II would change the share-back ratio from 58/42 to 50/50. The County’s spending restrictions are altered
from 70/30 to 35% for acquisition and restoration of land; 50% for management and development; and 15% of the
funds would be flexible. The share-back split and changes to the County’s spending restrictions would allow the
County to conserve up to 36,000 acres and maintain those lands for 20 years. This scenario would diminish
revenues to Fort Collins by $530,000 annually.
Scenario III would change the share-back ratio from 58/42 to 52/48. The County’s spending restrictions are
altered from 70/30 to 35% for acquisition and restoration of land; 50% for management and development; and
15% of the funds would be flexible. The share-back split and changes to the County’s spending restrictions would
allow the County to conserve up to 22,500 acres and maintain those lands for 15 years. This scenario would
diminish revenues to Fort Collins by $400,000 annually.
County staff and the advisory committee have determined that Scenario II is the preferred alternative. Continuing
to conserve land continues to be a very high priority of Larimer County residents as demonstrated by the polling
data of the Our Lands Our Future study. This scenario maximizes the ability of the County to continue to conserve
land while also providing 20 years of operations, maintenance and capital funding.
Natural Areas Department staff supports an extension of the sales tax and, in particular, supports Scenario II.
Although it reduces the City’s share-back revenue by an estimated $530,000 annually, staff believes the County
open lands program is underfunded and requires these additional resources to adequately manage the lands it
holds, as well as those that it hopes to acquire.
In addition, the City and County natural areas and open lands programs have a long history of working together to
achieve mutual goals. Scenario II has the potential to strengthen Larimer County as a partner and is likely to
July 8, 2014 Page 3
continue to provide direct benefits to Fort Collins residents. For example, many properties have been acquired in
partnership and, in turn, these properties have been used to provide community amenities such the Blue Sky trail
that links Horsetooth Mountain Park, the Devils Backbone in Loveland, and Coyote Ridge in Fort Collins.
The Department’s long-range financial model leads staff to believe that the short and long-term implications to the
Natural Areas Department are manageable. This is especially true if Natural Areas is able to discontinue its
$350,000 a year contribution for the paved trail system; and, if West Nile Virus management is paid for from the
General Fund ($134,000 in 2015). The combined $484,000 a year savings nearly offset the potential loss from
the County.
In addition to potential financial changes to the existing ballot, the County is proposing a modification that would
discontinue the requirement that an elected official from Fort Collins, Loveland, Estes Park, and Berthoud be
appointed to its citizen advisory board. Instead, the ballot would require that the County Commissioners appoint
an advisory board of at least 9 members based on interests, geography, and location. The logic of this change is
that Larimer County is not able to appoint elected officials to the citizen advisory boards of the cities, and the
County’s Open Lands Board only makes recommendations to the Commissioners on the County’s portion of
HPOS revenues.
ATTACHMENTS
1. Powerpoint presentation (PDF)
1
Help Preserve Open Space
July 8, 2014
ATTACHMENT 1
2
Distribution of HPOS
Loveland,
$1,904,909 ,
16.7%
Fort Collins ,
$3,814,068 ,
33.5%
Larimer County,
$4,777,403 ,
42.0%
All other
municipalities,
$891,088 , 7.8%
3
Open Space Yes!,
$6,474,388 , 57%
1996 HPOS Larimer
County 1/4 Cent Sales
Tax, $3,765,230 , 33%
Earnings on
Investments, $23,522,
0%
Grants and Donations,
$882,000, 8%
Miscellaneous Revenue,
$227,062
2%
Ongoing Natural Area Revenues 2013
$11,372,202
4
2013 Expenditures
$10,336,107
Program
Management,
$709,859
7% Education, $584,754
6%
Rangers, $658,362
6%
Facility Operations,
$500,885, 5%
Public
Improvements,
$963,638
9%
Resource
Management,
$2,492,946, 24%
Land Conservation,
$4,425,664, 43%
5
2013 Expenditures by Category
$10,336,107
Personnel,
$2,942,928 , 28%
O&M, $1,950,219,
19%
Capital,
$751,133
7%
Restoration,
$880,034 , 9%
Land Conservation,
$2,689,174 , 26%
Debt Service,
$1,122,619 ,
11%
6
Core Operations
• Utilize HPOS primarily for core operations
• Due to 80/20 Open Space, Yes! spending
restrictions
7
Preferred Scenario
Ø Preferred by staff & sales tax committee (OLAB members, citizen
advocacy group, and Legacy Land Trust)
Ø Allows for future conservation of approx. 36,000 ac
Ø Larimer County’s internal splits are adjusted:
Ø In order to make this option work for the County:
• County share changes from 42% to 50%
• Cities share changes from 58% to 50%
• Allows management of current & future lands for 20 years
8
Impact to City
• Reduces revenues by ~$530,000
• Manageable if $350,000 trails contribution
discontinued
• Manageable if $134,000 WNV discontinued
9
Staff Support
• County needs the additional funding
• County and City have been great partners
• The additional resources will strengthen the
County
• The County’s program benefits citizens of Fort
Collins
10
Process
• Municipal feedback by July 11
• Open Lands Board recommendation to BOCC
July 17
• BOCC work session July 17
• BOCC adopt resolution for final ballot language
July 29
• Possible Council resolution of support August 19