As Aspen City Council members begin to consider asking voters to reallocate the Wheeler’s Opera property transfer tax revenue to other community use, they told staff on Tuesday they wanted to be, too. conservatives as possible by keeping reserve funds high enough to support the historic building and its cultural programming.
City financiers presented some reserve fund options for the board to consider in Tuesday’s business meeting so it can begin to model scenarios on what percentage of future transfer tax revenue could be reallocated without falling below the agreed threshold.
“I would be wrong on the extremely conservative side,” said Councilor Ann Mullins, adding that she covers 100% of annual expenses, a fixed reserve amount of $ 7.6 million. “I think that’s a threshold that the community is also comfortable with because I think if we propose too drastic a decrease in the fund or the income used, I’m not sure that is suitable for the community. “
The city’s current financial policies for the Wheeler require a minimum of 25% of the annual budget authorization, or roughly $ 2 million.
The idea of reallocating Wheeler RETT funds has been discussed by various boards over the decades and has been the subject of more consistent conversation in recent years.
That’s because the Wheeler Fund has grown to well over $ 32 million, thanks to the active real estate market, especially over the past year.
RETT generated $ 8.4 million in 2019 and in 2020 it grew to $ 17.6 million.
The Wheeler gets 0.5% of that tax revenue, based on a 1979 vote of Aspen residents.
The order of this vote says that only $ 100,000 of the RETT can be used for artistic grants each year, otherwise the money is dedicated to the Wheeler.
Voters have confirmed the tax twice because it has a periodic sunset provision every 20 years. The most recent extension allowed the tax to be approved until December 2039.
Those renewals focused on extending the tax and did not consider adjusting its permitted uses, according to city finance director Pete Strecker.
As the balance of the fund continues to increase, it is possible that future collections will be redirected to another community objective yet to be determined.
There are emerging needs that the community may want to fund, whether it’s subsidized child care, replacing an aging stormwater system, mental health programs, or increasing funding for arts and culture organizations, to name a few.
Council asked staff in February to explore and present opportunities on how to leverage future tax collections for other community benefits.
The Wheeler’s $ 32 million could cover the annual costs of running the opera five times without any income.
City staff predict that $ 10 million will be needed for capital expenditures over the next 10 years. They also predict that grant levels over the next 10 years will average $ 4 million per year.
The Council is expected to discuss in May what other goals or programs should be funded.
Voters are expected to approve such a reallocation, and a ballot question could be ready as early as November if council agrees, according to city manager Sara Ott.
The ballot question would likely call for an expiration date for the expanded use of the 0.5% tax, or part of it, so that the community can assess the benefits of any funded program.
Council members agreed on Tuesday that any expanded use of the Wheeler RETT’s income should last between five and eight years, then asked voters whether they should pursue it.
Sometimes board members would argue in circles or show frustration at understanding what the impact of their decision on threshold reserve levels or withdrawal from the Wheeler Fund would be.
They left it up to the staff to sort through and come back with various options and show how they would affect the fund.
Mayor Torre said this was just the start of a long and complicated process.
“It’s not going to get any easier but it can get clearer, so I think the recording we had today really speaks to where that advice is, the concern we have with the. Wheeler funds and the fact that it’s going too low and we want to know more about what that looks like as we move forward into the future, and I think that’s a good step forward, ”a- he said, “It’s a conversation that’s been creeping into the community for quite some time and we’re starting this conversation.”