Castle Rock Town Council is exploring options for dealing with a surplus of funds that are expected to push the town over the 2014 TABOR limit.
The Colorado Taxpayer’s Bill of Rights imposes revenue restrictions on state and local governments. When annual revenues exceed TABOR limits, the Town Council has until the end of the next year to either refund the money in some manner or ask voters to allow them to keep the money to spend on local services.
Castle Rock has been very successful in obtaining funds from other sources for capital improvement projects in recent years.
For instance, for the ongoing construction of the North Meadows Extension, which will connect The Meadows to U.S. 85 and Interstate 25, the town has received several funding commitments. The Colorado Department of Transportation has committed $4.8 million to partially fund the new road’s interchange with U.S. 85. Douglas County has committed $10.5 million that will provide part of the funding for the roadway east of U.S. 85 and its interchange with I-25. The developer of The Meadows, Castle Rock Development Co., will contribute $7 million in phased funding for future widening west of U.S. 85, as the road goes from it initial two-lane configuration to four lanes.
These contributions total more than $22 million and will contribute to projected TABOR excesses in 2014 and 2015.
The town expects to receive similar contributions from developers and government agencies for Philip S. Miller Park and other capital improvement projects, which will be counted as TABOR revenue in 2014.
“To a certain degree it’s a good problem to have. It tells us things are starting to get better here in Castle Rock,” Mayor Paul Donahue said.
If these surpluses are used for refunds, as they likely would be under current TABOR guidelines, the town will need to find alternative ways to pay for these projects.
“(For example) if we took the money that we got from say the county and CDOT that was over the revenue limit and we rebated that back to the taxpayers, we still have to pay the contractor for the North Meadows project and unlike some governments we’re not allowed to spend the same money twice,” Castle Rock Town Manager Mark Stevens said. “So if we took the money we needed to pay the contractor for North Meadows and used it for rebates we would need to cut or reduce other town expenditures in order to come up with the money to pay the contactors.”
The council has offered three possible solutions for dealing with the TABOR question.
The first option is to abide by how the guideline is currently set and provide refunds to taxpayers. This is potentially problematic for the town because in many cases the funds involved have already been contractually committed to projects such as North Meadows and Miller Park.
Paying refunds would likely result in the need to consider reductions in future town spending in order to offset the refund amounts.
Another option would be to explore other alternatives to receiving project contributions from developers and other governments other than receiving direct funding from them.
The third option would be to ask voters to amend the bill of rights in a way that would exclude these kinds of contributions from TABOR limits.
The council decided more research on the possible options was needed and that they would revisit the issue in June or July, at which time they would decide if a November 2014 TABOR election will be needed.
“I don’t know if we would be looking at it as closely if it turned out to be actual tax payer money. If this was something directly from the taxpayers of Castle Rock but this is a little different. We’ve got municipalities and different entities coming in and helping us out for specific projects and I think that kind of changes it a little bit,” Donahue said. “I do think it would make sense to take a little more time with this and come up with a solution that works for everyone.”