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Elitist?

Dear Editor:

Is a public recreation center an elitist proposition? A few community members seem to think so and are using selective, extreme financial numbers to claim that Pagosa shouldn’t have such a wonderful amenity.

The proposed rec center would be for locals and tourists at prices similar to rec centers in Durango, Cortez and other progressive communities, so it wouldn’t be elitist in terms of who is allowed to use it.

Perhaps rec center opponents wish to have community members believe that only elite, wealthy residents could afford the 1-percent sales tax increase n eeded to build the rec center. Truthfully, however, each family will continue to spend as they normally would on local purchases, with the bottom line being that they would pay 1-percent more for those purchases — that’s $4.17 a month if you spend $5,000/yr. locally. Is this too much for the substantial positive effects of a community rec center? We think not.

Opponents feel the best option is to maintain the current situation where those who can afford the time and expense to drive to Durango should simply do that and spend their recreation (and restaurant, and Wal-Mart) dollars there. Remember that the sales tax you pay to Durango helps pay for their rec center. Research commissioned by the Town Council has shown that Pagosa can responsibly afford an appropriately sized rec center, so why don’t Pagosans deserve this? Should we be satisfied with only the outdoor recreation nature provides? Seniors should realize that the center would provide a pool for activities such as water aerobics and an indoor walking/jogging track as a safer alternative to walking on icy winter roads. A rec center would provide a positive afterschool option for kids, many of whom currently have few safe, healthy afterschool options until caregivers get off work. Also, many park and rec programs (basketball, volleyball, etc.) are at maximum capacity so a community recreation center would provide much-needed space for these programs. The school gyms and the Community Center are increasingly being used for school and non-athletic events, so gym space availability is decreasing as demand for park and rec programs continues to increase.

Another major issue is that tourists contribute a large fraction of our sales tax revenue. As more competing mountain communities build similar recreation centers, visitors heading for the mountains may choose to visit those communities instead of Pagosa because they offer facilities and a progressive outlook that appeal to families with children and/or multi-generational families. Yes, visitors come here for the natural beauty and the outdoor recreation opportunities, but it’s common for them to want to use indoor recreation facilities as well. The Community Center and the Visitor’s Center staff (ask them) receive frequent requests from tourists who ask where our recreation center is. They are always amazed there isn’t one.

The upcoming ballot issue will ask voters whether a community rec center is worth a 1-percent sales tax increase for a 20-year bond. It’s worth every penny.

Gwen and Tim Taylor

This story was posted on February 27, 2014.
  • ajpagosa

    No one here is against a rec center, or at least no one I talk to, people are against THIS rec center proposal for very good reasons. I would advise you to look closely at the cost details and consider current town and county budgets before you decide to vote for this. That and get a better understanding of the local economy.

    There are approx $7M of capital improvements (river walk, 6th st bridge, etc.) which are scheduled but will not be affordable under this program. We will not be able to borrow another penny if this passes for a very long time. The user fees and operating costs have been significantly over and under estimated respectively. Did you know there is no money for the actual land in the proposal? It assumes the sewer commission just gives a parcel they put $6M into.

    I am a life long gym rat and would love to see a nice facility here, in a setting which worked to enhance downtown synergy and improved the whole experience for tourists and residents alike. Unfortunately this proposal and the 1% tax to support it is poorly planned, too expensive, does nothing for growth, and starts a tax war with the county that may have severe repercussions.

    There are many other reasons why it is a bad idea, but just consider the notion that you’re being played on this. A very nice facility that is affordable could be built without wasting tax money, taking it from people who can’t vote, or shutting down other programs. It could be done without putting up literally half the current Town general fund annually as collateral to bankers, another half as debt payment, putting a total of over $3.1M of Town funds hostage each year to debt service. [And that is NOT using the 44.9M number, that is the “optimistic” GKB scenario “Series 2014 S/T (Plan C-2A 20yr”).] It could be done with the cooperation of the BOCC and allow all AC resident vote on it.

    But none of these things have been done or even considered. Instead we have this very expensive extremely divisive proposal and its backers fomenting hate all around. Not understanding how the tactics used here are good for the community, let alone the rec center itself. And yes, it is “elitist” in the sense that it lets the 10% treat the other 90% of Archuleta County as their tax slaves.

    • ajpagosa

      Occurs to me based on talking to a lot of people in Town and outer Archuleta county, that the following needs to be explained:

      There has already been at least one tax war locally. The result of that was that the Town annexed nearly all the retail & commercial property along HWY 160 corridor, including basically all the retail in Pagosa Lakes. So City Market, McDonald’s, hardware stores, restaurants, gas stations, etc. All of that. Very difficult if not impossible to buy basic necessities or eat, or stay overnight in a motel, that is not considered “Town” for sales tax purposes. However none of the surrounding residential is Town. So you can do all your shopping and dining in “Pagosa Lakes” thinking this is not Town and will not be subject to this new tax but you’d be wrong. It is not just old downtown where the tax applies. But pretty much all the residential that is Town is only old downtown and immediate surroundings.

      Another result of the tax war and annexation was the Town and County have a cooperative sales tax agreement (on county-wide sales in Town or not) to split a total of 4% equally, 50-50. This has been in place for quite some time and it has worked well, reflects the unusual arrangement of nearly all retail being under Town authority but having 90% of Archuleta county residential outside of it. I would add none of the cities or counties frequently being used for comparison purposes has anything like this odd arrangement.

      So enter a new 1% tax applied to Town sales. This is being done not only without the consent of county government, but against its express wishes. They (BOCC) have previously rejected a similar rec center proposal even when the local economy was much better off under much rosier economic projections. They really don’t want this latest one and especially done in this manner.

      So anyway I just wanted folks who are for the rec center, who maybe were not aware of these local subtleties and history to get a chance at seeing the bigger picture behind some of the objections I and others have.

      Finally a very recent issue has been raised relative to this. The revenue projections used by the proponents and those used by GK Baum, the investment bank underwriting the bond issue, may inaccurately reflect the actual % of total sales within Town vs not. The first GKB cost proposal I saw assumed they were equal. The next assumed they were 90%. Figures from the state of Colorado indicate 75%. What this means is there is sales-taxable activity outside of town that may be bigger than previously thought. So that if you assumed a new 1% tax got 100% of AC activity, it won;t and your revenue estimates for a Town-only tax are light.

      Hope this helps some people get a better handle on the issues.

      • Billy Skipper

        The county has never entertained a rec center proposal, only the town. Bottom line is, if you feel disenfranchised by not being able to vote, visit Clifford Lucero and Steve Wadley, the two county commissioners who openly oppose this endeavor. They could have taken steps to ensure that a county vote was at least considered, but did not.

        • ajpagosa

          Maybe you need to have lived here more than 4 months. County has already shot down at least one rec center prior to this one, and they shot this one down. Actually this is mostly the same one they already shot down, during much better economic times.

          The supporters are using fake numbers and intimidation to try to ram this through with no oversight. That is because a sober examination of the proposal by anyone sane would reject it. As the county already did a number of years ago

          • Billy Skipper

            Sigh. What rec center proposal did the county shoot down? When? The county has no right to the one penny, if this passes, by the way.

          • ajpagosa

            Double sigh, 2006 look it up. The present proposal is nearly that same one, minus all the glorious development they thought would happen in 2006-on that would support it. Again you would know this if you hadn’t just moved here.

          • Billy Skipper

            I’ll raise you one sigh, it was the TOWN then, the town again, now. It was NEVER considered by the count and isn’t being considered, now. Why do you think the proposal is almost the same, as you mention. It never got to the ballot, I don’t think.

          • ajpagosa

            The rec center proposed then was similar if not identical to the one proposed now. It was shot down then largely because the county opposed it, or so I am told. I was not living here at the time. No it never got to the (county) ballot because the first one stood zero chance of passing a county wide vote. No one considered the shady idea of enticing the town to break with BOCC and go it alone without their consent.

            Next time I see a commissioner wandering around town I’ll ask for a more precise history if you like.

          • Billy Skipper

            Neither was I (living here) but it was the town alone, then, also, and would have been a town vote then. See a pattern? Why won’t the county engage, on any level?

          • ajpagosa

            Because they understand the limits on county finance better than the Town does, and any rec center is taking revenue out of the entire county ahead of much more necessary improvements. We have very peculiar arrangement here WRT what is Town what isn’t and who gets to vote on what. And sadly we are not a very wealthy county or town. See my history summary above.

            I actually think the end result of this is we might get a rec center, just not this one. A cheaper one with better disclosure ahead of time, and more citizen input, voted on by the entire county would be so much better, and head off the tax war that is already going on.

          • Billy Skipper

            Or we may never get one.

          • ajpagosa

            Well I want one just not this one. I’m an avid lifter among many other things and PLPOA is great. But I have a complete powerlifting gym in my garage because they don’t have the facilities to lift heavy safely. Not heated though so winters are tough, but mainly I am snowboarding winter and not lifting too heavy. So PLPOA is fine (and warm).

            HOWEVER I do understand more than a little finance and I can read cost proposals. I will not support this blindly just to have a fancy place to work out if it is indeed as costly as this is relative to our future needs. I have helped people plan and build successful commercial gyms, I know what they cost vs what you get, take my word for it for 1/10th or less the cost of this you could get 95% the utility and run at an operating profit. ESPECIALLY if you got a public private thing going similar to Skate Pavilion and had no debt like they do.

            This has almost no demonstrable return on a substantial investment, in fact it is negative. We should be looking at ways to get a positive return on debt, and a way to keep money in the county, growing. If I have to keep working out in my garage until then I guess I will.

          • Billy Skipper

            Well, the skate pavilion not only has no debt, they have no pavilion and, unless things have changed recently, no property, so that works out. Bottom line is, this financing mechanism (sales tax) has been proven over and over and over across the state and country. You don’t have to agree with it, I get it, but people in Durango, Cortez, Gunnison, Fruita, etc. sure do.

          • ajpagosa

            Skate Pavilion is a go last I heard.

            As I have pointed out many times before none of those other towns compare fairly to us in demographics or % of general fund and debt load this project would entail here. There are many unusual and unique aspects to Pagosa & Archuleta County I’ve never seen anywhere else. Especially the Town vs County tax war situation.

            It’s not the sales tax being used for something that is the problem, it is how much of current revenues sales tax used this proposal represents. For example Durango’s rec center costs less than our proposed one, yet they have ten time the general fund and ten times the population. They average 1000 users a day, They cover 90% of operating costs with user fees. Our rec center would cost more than 100% current general fund annually. On and on.

            It’s just too expensive. However if one were to drop out just the pool and aquatics, guess what costs drop like 80%. You could run that at a profit even.

          • Billy Skipper

            Going round and round, but Durango’s was much less expensive because of when it was built, over a decade ago. That is precisely why some proponents view this as a ship sailing away, because rec centers don’t get cheaper and the town is in the best financial shape in decades, perhaps ever. What do you think it would cost to build Durango’s today?? Well over the $18 million dollar estimate of this one.

          • ajpagosa

            Well it cost 12M then, vs 18M now for ours if you want to play nominal vs real dollar on all cost issues, be my guest. Real dollars locally vs history we’re still in a deep recession and not getting much better.

            It is still true that nominal or real terms, Durango is right now has ten times or more the general fund, ten times or more the total economy, so they can afford something that costs in that range, we just can’t. We don’t have the horsepower and will have nothing left over for emergencies or other programs already approved but not yet funded. That is IF cost estimates are accurate and they just aren’t.

          • Billy Skipper

            Battery is just about gone. But if you don’t believe the numbers work, so be it. History tells me otherwise. Nothing wrong with digging deeper, though, even if we disagree.

          • ajpagosa

            Agree to disagree on the numbers, but I do think this level of detailed discussion should have been engaged in, in public, long before this ever got onto a ballot.

          • Dave

            You can stop digging now. The argument has come full circle at least twice. You are not going to win any numbers fight with your new pals. What is being revealed in this discussion is the lack of developable land the Town of Pagosa Springs owns. It has Reservoir Hill, Middle School HWY 160 field, The sewer plant/Rec Center site. The County owns better land for a Rec Center in Town than Town does. So do a lot of other people & organizations. I wonder if the bankers get a opportunity to call in the loan & foreclose do they get keep the valuable riverfront park land as a loan guarantee?
            I will say it again-I am not against “a rec center” just this one for many of the repeated reasons expressed by your new friends. Town needs to take out cheap loans to get in the land acquisition business before land prices & loan rates escalate. Some banker is going to get themselves a nice concrete mansion with a pool next to the river.

          • Chris Gerlach

            Durango has a vastly greater income structure due to their size, regional assets and draw for tourism. We are much smaller and much more fragile in terms of our projected income, and have to be more cautious. As for your unfounded claim that we are in better financial shape than ever that just shows you have not done the research into our real history. We HAVE to be cautious now more than ever.

          • Billy Skipper

            Give me a break. The auditor said that two weeks ago, period. It is not unfounded, the auditor, Mike Branch, stood in front of council and said that. Funny how that little tidbit ESCAPED THE GREAT REPORTING CAPABILITIES OF THE SUN. I know why.

    • Billy Skipper

      Funny you don’t mention the debt service reserve fund of about $1.5 million built into the plan. Care to explain how it works or where it comes from? Do you even know what it is?

      • Chris Gerlach

        The debt service fund serves to protect the BUYER not the town. Dont try to fool people please.

        • Billy Skipper

          WRONG as usual, it protects both. Bet you can’t explain how. Where does it come from, if you understand it so well?

          • ajpagosa

            Actually I can. They are selling the bonds at an 8% premium over par. The 8% must be kept as a reserve until the entire loan is paid back. If it is used because the new 1% fell short of making the debt payment, it must be replenished immediately. Furthermore the GKB spreadsheets show that fully 1/2 of the town’s current income of 2% tax on all Archuleta County sales is also being put up as collateral, approx 3.2M total is being put up for debt maintenance. Says that in black and white on GKB spreadsheets, even the “rosy” ones.

            But now we know even those numbers are WRONG.

            Back on point, even worse the debt maintenance must be paid before anything else. So for example if the new sales tax is light, and they tap the reserve, they have to fill it back up out of general fund, up to the full 1% county-wide tax. Before salaries, road work, keeping the lights on etc.

            So yeah they try to pitch this as a safety reserve, the reserve is for the BANKERS peace of mind, not ours. But wait it’s even better. We have t pay a higher interest rate for this privilege. No one gives you 8% up front for free, especially not bankers. So they have to offer a rate to buyers on PAR value (100) that a buyer thinks is a good deal to pay 108 for? Get it?

            Still no documentation on the $44.9M, appears to have pulled from someone’s posterior at the last minute, no review no support.

          • Billy Skipper

            You couldn’t be more wrong, but suffice to say you can use the debt service reserve fund to make a bond payment the first year, if needed, and any other year, or every year, if needed. Your post actually proves you have a very feeble understanding of this, but you get a cookie for understanding the reserve comes from the sale of the bonds. Everything else is a guess. It’s o.k., I understand it because I work in the industry.

          • ajpagosa

            Prove it.

            Oh, and please disclose your financial relationship to this project.

          • Billy Skipper

            Tom has lots of friends with finance backgrounds. Some have better backgrounds than others. You are starting to get on the right track, now, however, but aren’t quite there. As soon as you get the DSRF, you can invest it in a separate account and use just the interest, or the actual reserve. Depends on how much you are short. If you never need it becomes your last payment if you don’t pay down early. The rate, which is at about 4.3 right now, is LOCKED as soon as you sell the bonds. You are correct on one point, the DSRF can only be used for bond payments ( ain’t Google great).

          • ajpagosa

            LOL so you’re basically saying there is nothing materially wrong with what I first wrote.

            Please disclose your financial relationship to this project. GKB?

          • Billy Skipper

            There is a lot materially wrong, but the average voter is probably bored to death over this, already. Anyway, I am not “connected” to the project, but can vote on it. I am a financial analyst, by trade and wanted to run the numbers for myself, so I did. But you have to understand them, all of them, before you go bonkers over the “bad accounting.”

          • ajpagosa

            No, no please explain why I’m wrong. We’re all just here trying to understand.

          • Billy Skipper

            Just because bonds are sold at a premium doesn’t necessarily mean a higher rate. Sometimes true, sometimes not. What really matters to those who buy the bonds is the yield. Again, you’re not way off, but still assuming too much.

          • ajpagosa

            No it does mean a higher rate relative to PAR. The bondholder of course will calculate YTM on what he pays (108), but relative to the 18M par value in this case the effective rate will be higher than it would be otherwise in order to get the 8% up front. It helps to keep it as a reserve but not enough to offset the higeher effective yield on par.

          • Billy Skipper

            Again, ask Baum. The scenarios are endless

      • ajpagosa

        I explain it below, based on your comments I doubt you understand it.

  • Chris Gerlach

    I am certainly in support of the idea of a nice rec center for all ages for the town, i have been concerned by the “creep” of the community up the hill for the flight from town centers is an issue American Town planning has faced and not really dealt with in reasonable ways for decades. I love the idea and would love to use it myself. But. Actually many Buts over this certain proposal. AJPagosa covers the facts and issues very well. We cannot afford this manner of procuring such a center at this time. The current national habit of spend now pay later has greatly weakened our entire national economic structure and it has continued at the state and local level as a creeping malaise in the way people think of such matters. We cannot endlessly spend without an known source of dependable income and without budgeting wisely.

    It is not a matter of who spends where but how MUCH there is to share. And as for the idea that such a center will bring visitors, I have been directly involved in the tourism – visitor service and support industry in Pagosa for many years and know that very well indeed and I can assure you that people did NOT make travel plans based on if they could use a rec center here. Just is not a fact that is true. So I urge restraint and wisdom in the current situation, and hope for a happy future possibility when our current obligations for the town and spending are met and above all we need to continue to work harmoniously with the county, and be in agreement and union with all of our residents.

    Our county infrastructure ie road net, was originally designed with a population of 40,000 in mind a former County Director of Roads and Bridges told me. We just don’t have the tax base to support that now, and may never have it. The vision of unlimited growth was around as recently as 2006 which was a big boom year for real estate sales. Sadly that did not continue. So we must be wise and work with what we have and support each other, Town and County. For that to happen it means we may need to defer some things we would LIKE to have until a time when we can reasonably AFFORD them. But thanks for sharing the hopes many of us share..and hope to see realized at the right time and in the right way.

    • Billy Skipper

      Gwen and Tim are spot on. The opponents can throw out any scary number they want because they really don’t understand the financing, or are pretending not to understand. Bottom line cost is one penny on the dollar for any purchase of taxable goods purchased within town limits.PERIOD.

      • Chris Gerlach

        That cost is NOT the question it is the liability that the proposed bond structure would place upon the Town for the years it would take to pay the bond back. THAT is the danger and it is very real as the current bond is proposed. I understand the financing very well now after some study and honest review and I trust the Council members and public are also looking into it now too. I suggest that all do and that we all vote no.

        • Billy Skipper

          Quit alluding and making generalities. If you understand it so well, you should be able to list SPECIFICALLY what and why the town is in such great jeopardy. Obviously you have the time to post here, so prove you know what you are talking about. The bond structure is NO DIFFERENT those used to build thousands of rec centers across the country. And, if the Sun does such a great job getting all the info out there, as you suggest, why is there still so much confusion? What a complete JOKE of a paper.

          • ajpagosa

            Please explain to us simpletons what is inaccurate about the Sun’s latest article? Seems to me they are doing the community a service by exposing all this bad accounting. There’s a whole lot more where that came from, doesn’t even scratch the surface.

      • ajpagosa

        Did you get these talking points from your special friend? They sound awfully familiar. And make no sense. Since nearly all retail is within town limits, it is a 1% tax on everything everyone in Archuleta County buys. Yet 90% of people have no vote. Get it?

        Furthermore if the cost projections or user fees are not correct, another $1.8M out of the TOWN’s general fund is put up as collateral, all other town expenses subordinate to that. Let me know if this is too complicated. That means other expenses do not get paid for until the debt is paid. NO excuse for bad projections, and believe me most of the cost projections I’ve seen are fantasies.

        I understand the financing very well thank you. This is a con job like this county has never seen before.

        Please see my post below explaining the “reserve” fund they are so generously lending us (and making us pay interest on for 20-25 years).

  • Billy Skipper

    Misconceptions and lack of understanding by those proposing and pushing it? The mayor thinks it is a $44 million proposal. Talk about misconceptions. There are many on both sides, no doubt, but let’s not pretend the naysayers know it all, far from it.

    • Chris Gerlach

      We all understand very well that is a potential figure of liability. I was trying to set a tone of conciliation and congenial concern. But if a person’s advocacy of a desired outcome blinds them to the truth of facts and the facts include a potentially ruinous cost to the town from both a rec center built in such as way as this proposal AND the bond issue as proposed, then there is no point to further attempts to illuminate these people. We will hope the voters will understand and resoundingly defeat this foolish proposal now and as i suspect, again and again if it is dragged before us in the future as it has been in the past. There is a reasonable and right way and proper time for such fine ideas but this is not it.

      • Billy Skipper

        The liability, or chance of ever having to repay 44 million is ZERO. It’s zero, so you don’t understand it, obviously. You try to preach harmony and peace like someone out of the “Kung Fu” series. Sorry grasshopper, but if you label folks who want this as insane, foolish, whatever, you will be called out. Who’s blind here, by the way? It seems as if you’re mind is made up, but you obviously don’t care to explain the scenarios in which this absolutely will fail. You’re wrong. Vote no. You’re right, though. This will not just go away. With the lame duck mayor still pulling the strings and the media behind him, this was never going to get a fair chance. Let’s see how the voters digest all the information, and if we have to, we’ll do it all over again.