Council seeks ideas that could stretch excess funds
City departments will have a chance to make their best case for why they could use the $600,000 in “excess” revenue the city collected in 2009.
That’s what a majority of Colorado Springs City Council members supported at an informal council meeting on Monday.
Interim City Manager Steven Cox will compile proposals from various departments and then council will decide whether or not to put the best one on the ballot. If they do, voters would decide in November if the proposal merits the money or if they want the city to refund the $600,000 in the form of a $2.95 credit to their utility bill.
Much of Monday’s meeting was devoted to discussion about what to do with the money, which the city ended up with because it exceeded the TABOR property tax revenue cap for last year. TABOR, the Taxpayer’s Bill of Rights, limits how much tax money the government can spend.
Mayor Lionel Rivera supported asking voters for permission to put the money back into city services, such as street repairs.
“I think we’re sending a mixed message to voters if we’re cutting programs but we aren’t giving them the option to spend that money those programs,” he said.
Since the TABOR cap was put on in 1991, Colorado Springs voters have approved measures allowing the city to keep extra funds seven out of the eight times such a request has been on the ballot, according to Vice Mayor Larry Small.
Small said that soliciting ideas from different departments might produce suggestions that would be more valuable and longer lasting than filling potholes, one possible use for the money.
“I would like to see the departments compete for this money,” he said. “Competition will get better value out of this money. My interest is getting $900,000 of value from $600,000.”
Cox is expected to bring three or four of the best proposals to the council’s next informal meeting on July 26.
The city came into the excess money because it did not lower the property tax mill levy as a part of the 2009 budget. The council was expecting home values to decrease due to the recession, thereby lowering the amount of money the city would collect in property taxes.
TABOR sets a maximum mill levy and the city must seek voter approval to raise it. The goal was to avoid reducing the levy so much that it would create a budget shortfall, said Terri Velasquez, the city’s chief financial officer.
“It was difficult to say whether we would have money above the TABOR limit or not when we decided not to lower the mill levy,” Velasquez said. “Given the recession, it’s very difficult to know how much property values would be impacted and when. Once you lower the mill levy rate it’s difficult to go back and adjust it upward.”
The property tax revenue cap in 2009 was $22.4 million. The amount that the cap increases each year is calculated under TABOR with a formula that factors in the community’s growth and inflation.
The city is not predicting excess revenue this year because the mill levy was lowered in the 2010 budget due to TABOR restrictions.
Property taxes make up only a small portion of the city’s tax revenue. Most of its revenue comes from sales tax collections.
In the past year, the city has cut millions from its budget, removing trash cans, turning off streetlights and turning over the operation of a community center to a local church.
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