Avon: Traer Creek debt tapped town’s fund
Avon, CO Colorado
AVON, Colorado – The metro district that manages the Wal-mart shopping center owes Avon so much money, that debt has dealt a worse blow to town finances than the recession, Avon Town Manager Larry Brooks said Tuesday.
“I can tell you without a doubt the recessionary cycles for us pale in comparison” to the impact of the Traer Creek Metropolitan District’s outstanding payments, he said.
The metro district owes the town nearly $2 million, town Assistant Manager-Finance Scott Wright said.
Michael Lindholm, a spokesman for developer Traer Creek LLC (which is separate from the metro district) pointed out that those figures are under dispute.
“The amount they claim they are owed is disputed,” he said.
Under the original agreement between the town and the shopping center’s developer, the metro district would reimburse the town for sales tax lost when the Wal-Mart in downtown Avon closed and was replaced by Pier 1 Imports, Sports Authority and Office Depot, Wright confirmed.
The metro district has missed payments the last 26 months, totaling more than $1.1 million, Wright said.
Additionally, the metro district has not reimbursed the town for $844,379 worth of municipal services at the Wal-Mart shopping center and surrounding roads. Those services include things such as police protection and snowplowing.
But Lindholm says the metro district isn’t the only party breaking the agreement. He said the town has discontinued some of its municipal services at the center, such as snowplowing and maintenance on street lights.
Because payments from the metro district aren’t coming in, Avon has been dipping into its own funds to cover the cost, Wright said. That means the town’s fund balance could dip lower than the town likes. The fund balance is “cash the town has in reserve,” Wright said.
Town policy requires the fund balance to remain at or above 35 percent of the town’s operating expenses, Wright said.
Officials like to keep the town’s reserves at 35 percent because the town’s revenues are based on conditions that could fluctuate – like tourism, sales taxes and environmental conditions like droughts.
If the reserves drop below 35 percent, “it puts the town at higher risk for not being able to have funds they need in an emergency or for some other reason,” Wright said.
The fund balance currently rests at about $7.4 million, or about 46 percent of total expenses.
By the end of 2010, the town estimates Traer Creek’s debt will increase by more than $1.1 million, bringing the total to $3 million. That would drop the fund balance to just under $4.3 million, or 27 percent of total operating expenses, Wright said.
The outstanding payments have been the source of litigation between the town and the metro district. Both parties have agreed to put the lawsuits on hold for six months so they can try to reach a settlement, a town press release said.
Yet Lindholm said the town has yet to talk to reach out to Traer Creek’s developers for those settlement discussions. He would prefer the town start open talks “instead of spending time trying to give the developer and the metro district a black eye.”
If the settlement attempt fails, Brooks said the town may need to make budget cuts.
“We are likely to dip further into our general fund and make additional cuts unless settlement with the Village proves fruitful,” he said in the press release. “The town of Avon has been fiscally conservative, so the town could weather the recessionary downturn; however, the town cannot continue to carry an additional loss of over $1 million per year due to non-payment by Traer Creek Metropolitan District.”
Staff Writer Sarah Mausolf can be reached at 970-748-2928 or firstname.lastname@example.org.
Support Local Journalism
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User
Are we seeing more bears because there are more bears on the valley floor, or because we’re all spending more time at home? It could be a bit of both.