Eagle-Vail 5A clarification
I am writing in an attempt to bring factual and unbiased clarification to the complex topic of Eagle-Vail Metropolitan District’s 5A ballot issue. Under Colorado’s Taxpayer Bill of Rights, all new bond ballot questions must contain three numbers which limit the amount of property taxes that can be collected. These numbers are designed to protect taxpayers, as they set certain limits that cannot be exceeded in structuring the bond.
I am writing to provide insight on how the ballot numbers were determined. My objective is to help taxpayers understand and thus make an informed decision. Since EVMD cannot spend its funds to support or oppose this ballot question and since this could potentially be construed as either being in favor of or opposed to 5A (although that is not the intent), I am not being compensated by Eagle-Vail (or anyone else) to provide this information.
The first number is the amount of the borrowing, which under this ballot will not exceed $10,895,000. This is what EVMD is asking that it be allowed to borrow through the bond issue and this is the amount that other advisors have advised the improvements being requested could cost, including a provision for cost escalations and contingencies.
The second number is the annual maximum on how much in principal and interest can be levied to support the bond issue. This number is $1,095,000. This maximum is required by TABOR. While the ballot language could be construed to say that this amount can be levied in every year that was not the intent. Unfortunately TABOR does not provide the flexibility to clarify this topic within the ballot language.
EVMD is already collecting $475,000 per year to repay the 2009 bonds and the new bond payment is structured to be approximately $580,000 per year (if approved), until 2035, when the 2009 bonds are paid off, making the combined annual debt service approximately $1,055,000. After the 2009 bonds are paid off the payment on the new bond will increase but to no more than $1,095,000 through 2045. The benefit of this structure is that it minimizes the impact of the new bond while the 2009 bonds are being paid off and allows EVMD to lock in record low interest rates for the next 30 years. The downside is that it pushes principal repayment into the future and prevents the total bond payment from dropping after the 2009 pool bonds are paid off in 2035.
The third important number in the ballot question is the total amount of principal and interest that can be paid over the life of the bond issue. This number is $22,425,100 and serves as a cap on the total amount that can be repaid. This limit was established by assuming 21 years of repayment at approximately $580,000 plus nine years at $1,095,000 plus a contingency.
Hopefully this information will help voters understand what the debt repayment will be so they can make an informed vote.