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Only two pennies

Dear Editor:

“It’s only a penny.” The town of Pagosa Springs runs on “only two pennies.”

The opponents of the rec center have been charged with using scare tactics. When one becomes aware of the facts, fear is a very likely reaction. The original proposal of $18 million debt had an annual payment of $1.48 million and income of $1.6 million. The actual projected income is $1.3 million. A little concerned yet?

How about you now add the O&M budgeted amount of $250,000. That’s a shortfall of at least $450,000.

Now add the overly-optimistic user fees and you may not be scared, but you should be a little afraid. It is obvious that the new 1 percent tax will not be adequate to satisfy the debt obligation, and certainly not the O&M shortfall.

This deficiency would require dipping into the current budget to close the gap, and forgoing some already scheduled projects.

The solution: Build a lesser center. That will require the elimination of something. The feature that must be eliminated may be the one that sold you on the idea in the first place.

In reference to the TABOR pro statements: “The Pagosa Springs Town Council has worked with expert firms to research all aspects of financing and construction and has shown that this is a financially responsible project.” That statement is deliberately and blatantly false. The town council neither researched nor deemed the proposal to be financially sound, that research was done solely by the proponents.

The financing is clearly flawed and there are no construction drawings to “research.” This proposed tax increase does indeed compromise the town’s ability to bond because we must pledge half of our current tax ($1.7 million), as well as all of the new tax (a total of $3 million), for the repayment of the new bond. This effectively precludes any significant bonding for the next decade or more.

Thanks to the proponents for clearing up that tax limit thing. Knowing that we can legally tax ourselves into oblivion is not terribly comforting. As a matter of fact, one might consider it a scare tactic. Not much is unattainable when tax money gushes unabated. Undoubtedly we can raise taxes, but at what point is enough, enough? The proponents are correct in that bond interest is low. Unfortunately, the proponents have chosen to accept a higher-than-market rate to get the “premium.” This is a play now, and pay a lot more later form of financing.

Tourists? When was the last time, in your vacation planning, a rec center was of paramount concern? Of any concern? It’s your town, it’s your future. Protect them both by voting no on Ballot issue A.

Darrel Cotton

This story was posted on March 13, 2014.