2017 Ballot Question 5B

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NORTHWEST LAKEWOOD SANITATION DISTRICT BALLOT QUESTION 5B.

This is not a request for District voters to approve, under Article X of the Colorado Constitution (Taxpayer Bill of Rights-TABOR), an increase in tax rates. The existing mill levy of 7.696 will remain the same if the question is approved. It is a request for District voters to allow the District to spend revenues collected under the existing tax rate if revenues from existing taxes grow faster than the rate of inflation and population growth ("debrucing"). At present, revenue collected in excess of the prior year's revenue and then increased by rate of inflation and population growth must be refunded to the taxpayer. TABOR does not permit inflation-adjusted per capita spending to return to a pre-recession levels when there has been a recovery from a down-turn in the economy (this is known as the "ratchet-down effect"). There was significant recession this century which reduced taxes significantly in the District but the TABOR limit on spending did not let the District take full advantage of the increased tax revenue when the economy recovered. The estimated additional sum will about $200,000 that would not need to be refunded after collection.

Requests to "debruce" are hardly unique in Colorado. Statistics from the Colorado Office of Legislative Services show that: a. Colorado voters in 2005 approved Referendum C which allows the state to retain and spend tax revenue in excess of the TABOR limit up to a cap (so far the cap has not been exceeded and there have been no refunds of state tax revenue); b. as of 2013, 49 of 64 Colorado counties had obtained voter approval to retain and spend all county tax revenues in excess of the TABOR limit; c. as of 2013, 198 of 271 Colorado municipalities had obtained voter approval to retain and spend all municipal tax revenues in excess of the TABOR limit; and d. as of 2005, 174 of 178 Colorado school districts had obtained voter approval to retain and spend all district tax revenues in excess of the TABOR limit. According to the Colorado Department of Local Affairs, 89% of all special districts in Colorado (NWLSD is a local government special districts) had obtained voter approval to retain and spend all district tax revenues in excess of the TABOR limit on spending.

Approval to retain and spend the tax revenue collected above TABOR spending limits is important to help ensure the safe and efficient operation of the wastewater disposal and treatment system for two basic reasons:

    1. The only sources of tax revenue permitted by law for special districts such as NWLSD are from property taxes and specific ownership taxes (specific ownership taxes for 2017 are approximately $90,000). This year (2017) property taxes will result in approximately $1.3 million in tax revenue to NWLSD. However, expenses for operation, maintenance, and administration of the district will amount to approximately $2.1 million (about $1.135 million of this amount goes to Metro Wastewater Treatment for the district's fees in treating its wastewater to ensure all federal and state discharge rules and regulations are met). In 2017, there will be an approximate deficit of $700,000 between the tax revenues for the district and the basic operations of district in collecting, treating, and discharging wastewater. These are recurring costs every year for operation of the district's wastewater system and this deficit is being made up from part of the facilities renovation and service fees.

    2. The district's infrastructure is seriously aging, having almost been entirely constructed in the 50's and 60's. Almost all of the pipe is clay which is not overly durable. It is nearing or has reached the end of its life expectancy of from 50-75 years. This pipe will need to be replaced reaching the peak of need for replacement in the years 2031-2033 when almost one-third of the total will require replacement. The total cost estimated at this time for replacement during those years is over $33.6 million. During the years 2034-2038, it is estimated another 34% of the total pipe will also need replacement with an estimated total cost $39 million. These projections have been closely analyzed and researched by the district's engineers, Martin/Martin (and this analysis can be seen on NWLSD.com). Up until now and until 2031, NWLSD has been replacing obsolete and worn-out line at about .5 to 2% per year. The facilities renovation and services fee has been partially used to bear this burden. However the Board of Directors has been trying to build up reserves so the burden of replacing lines will not be so extraordinary during the 2030's when the present taxes and fees will not be near enough.

Allowing Northwest Lakewood Sanitation District to retain and spend the amounts above the TABOR limit on spending, without increasing taxes, will permit the NWLSD to address these two deficits to some degree.

 

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