Eagle mulls sales tax for river park plan
January 29, 2016
EAGLE — Here's the formula: 0.5 percent, 20 years, $4 million.
That's what Eagle officials hope local taxpayers will approve when they present the Eagle River Park plan on the April 5 municipal ballot.
While the wordsmithing and legal and financial review still need to happen before the Eagle Town Board approves a final ballot question, this week town leaders honed in on the framework of what they will present to the voters. That framework includes a 0.5 percent increase in sales tax for a 20-year term which will generate upwards of $4 million.
"I think that assures that Phase 1 of the project gets done," said Eagle Town Board member Andy Jessen.
The ambitious Eagle River Park plan envisions a new amenity both in and along the river at a current truck parking site just east of the Eagle County Fairgrounds. The town has hired a company called S20 to plan various river features to attract boaters, kayakers and tubers, while a riverfront park would include passive and active recreation amenities, trails and a river beach area.
All told, the project will likely cost upwards of $10 million, and the town is looking to present the sales tax increase ballot question to the voters this spring as a way to begin the work and provide a matching funds source to attract grant dollars.
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"We are really looking at the beginning phase of a project that will go over many years and involve many funding partners," said Eagle Town Board member Kevin Brubeck.
Finding the sweet spot
A survey conducted by the Trust for Public Land last August showed strong support for the river park plan and for a sales tax initiative. Peggy Chiu of the organization noted that two-thirds of the people polled supported the initiative. However, the poll showed a dip in support as the amount of the tax increased and this week, the Eagle Town Board sifted through the numbers to find the sweet spot for likely voter approval.
At 0.5 percent, the tax would generate approximately $375,000 annually. Looking out over the 20-year period, the tax would raise approximately $4.5 million if town sales tax collections during two decades dropped 2 percent, $4.9 million if sales tax revenues saw no growth or $5.4 million if sales tax revenues saw a 2 percent increase. The average Eagle household would see an $8 per month or $97 annual increase in sales tax spending.
Members noted that if the town's sales tax revenues are robust, the revenue bonds that will be issued to pay for the park improvements could be paid off early.
"I don't think the town of Gypsum got enough credit for paying their rec center debt off early," Brubeck said. "I do appreciate governments paying off their obligations early, because the job is done."
After debating both lower and higher sales tax amounts, members of the board came to consensus on the 0.5 percent figure.
"Let's face it, this thing is a home run. I don't know why we would want to get timid on the rate," said Eagle Town Board member Geoff Grimmer.
With general agreement on the amounts, staff and bond counsel will now hammer out the ballot language, which will come back to the board in February for final approval.
"I am really looking forward to getting the information out to the community and educating the people about the plan," said Mayor Yuri Kostick.