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Nice to have some options

Kaye Ferry

Whether you want to exercise them or not, it’s just nice to know you have options. And while the jury is still out, last Wednesday the Conference Center Committee got the word that it has no legal obligation to move forward with building the center if they decide, for whatever reason, that it is unwise to do so. According to town of Vail’s Denver attorney who specializes in these matters, the ballot question that was passed by the voters gave the town the discretion to spend the funds authorized for collection and subsequently collected, but does not carry with it a legal obligation to spend those funds and actually build a conference center.If the ultimate decision is not to build, they were also given some choices about how to handle the funds that have already been collected.As I have been writing, the committee has been doing a very diligent job in collecting facts and a wide variety of information on building a conference center, but mostly has been focusing on the design and financial aspects. Spurred on by the reality of a vote two years ago, albeit with a very marginal win, they have proceeded in good faith with the notion that they had a mandate to bring this project to fruition. There has been an underlying driving force that there was no turning back.But I think it’s fair to say that some very serious questions have been raised which have led to some very serious concerns about the viability of this project. It’s probably no surprise to anyone that the desired size and “world class” (how I hate that term) finishes everyone thinks we need, combined with all of the infrastructure requirements, don’t match up with the money we have to spend.Probably the most compelling reason for slowing down has to do with shortfalls that are anticipated, and there is no debate on that subject. It’s universally accepted that there will be some. It’s simply a question of how large they will be and who will pay for them.This brings up another point that needs clarification. All along, the community has been told that any shortfalls that exceed the sales tax revenues generated by the conference center will not fall to the town’s general fund. This is technically correct. The bonds that are the financial instrument being employed to fund this project do not carry with them a legal requirement that the town make them good if all else fails.There is a very harsh reality, however, that is indisputable. If the town chooses not to make good on any deficits, its borrowing power for future projects will be severely compromised. That’s why it’s good to have choices. There has been the suggestion to put construction off a little longer in order to accumulate a stockpile of cash. But we all know that by doing so, we’ll just be chasing inflation. There has also been the idea of downsizing and cutting back finishes, etc., all of which are still in the hopper of ideas.It was also suggested years ago, even before the vote, that the lodging community, which really pushed for this project and stands to gain the most, should guarantee the losses. Oddly enough, that was thrown out as an idea again last week – slightly tongue in cheek but with a certain amount of seriousness. There’s always some truth in lighthearted comments.There’s also been the notion that taxes might have to be raised again to cover the losses, to say nothing of marketing expenses. Yet none of these ideas have move past just that – ideas that are on the table for consideration.The one thought that has taken the firmest hold on the group is that the town’s general fund cannot become liable for the losses, whether legally required or not. Some other mechanism will have to be found to cover whatever losses might occur. If that requires an increase in taxes, the voters will have to agree. In my opinion, that agreement should be obtained before one shovel of dirt is turned. With regard to the taxes that have already been collected if this project gets deep sixed, the are a couple of choices. The voters can agree at the polls to allow the town to retain the funds and apply them to something else. I’m not sure if the “something else” has to be defined at the time of the vote but what little I understand about TABOR, I’d say it would.The other alternative involves issuing a tax credit, which is easier than some had originally thought. It does NOT require that the taxes be refunded to each collecting entity. Rather, the percentage used for sales tax collections can be lowered for a specific period of time until the credit is used up. For example, the current rate for the town is 4.5 percent. That could be lowered for a period of time until the credit is absorbed. We are currently collecting something in excess of $3 million per year for the conference center against approximately $15 million in total sales tax collections.But as I said, choices are good. And we can’t make the right one until we have all of the facts, something that wasn’t true when we originally voted on this. But we’re getting closer. So the beat goes on. I’ll keep you posted.Do your part: call them and write them. To contact the Vail Town Council, call 479-1860, ext. 8, or e-mail towncouncil@vailgov.com. To contact Vail Resorts, call 476-5601 or e-mail vailinfo@vailresorts.com. For past columns, vaildaily.com-columnists or search:ferry. Kaye Ferry is a longtime observer of Vail government. She writes a weekly column for the Daily.Vail, Colorado


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