Vail rec vote could clear financial future

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NWS Vail Clubhouse PU 10-8 Preston Utley/ A golf club leans against a crumbling clubhouse at the Vail golfcourse. The golf course is asking for more funds on this years ballot to repair the crumbling building.

Cliff Thompson
October 9, 2004

VAIL - Will voters in Vail increase their taxes to help the Vail Recreation District pull itself out of a financial hole and improve aging golf course facilities?

It's the topic of two separate, almost stealth-like ballot choices Nov. 2 that voters will need to study before voting. The issues have not generated many headlines since they were proposed last spring.

The two issues made it on the November ballot after being pulled rom a May election at the request of the town of Vail, which wanted to coordinate its capital projects - redevelopment of town facilties, such as streets and sidewalks - with the rec district. The town also will be borrowing money for projects that are part of the $1 billion redevelopment of the village and Lionshead.

One issue, 5A, seeks an increase in property taxes to give the district $915,000 more operating revenue per year. It will increase property taxes paid on a home valued at $1 million by $137 per year.

The second, 5B, seeks voter permission to issue up to $6 million in bonds to build a new golf clubhouse and Nordic center, replace bridges on the golf course and make the new clubhouse meet Americans with Disabilities Act requirements.

The Vail Recreation District operates the athletic fields and parks in Vail, the golf course/Nordic center and Dobson Arena, under a lease from the town of Vail. It became a separate taxing entity 13 years ago when it split from being a town department.

Since Sept. 11 the district has suffered the effects of diminished tourism and increasing competition. It also depleted its bank accounts remodeling Dobson Arena and upgrading its ice-making system, district officials say.

"It starts with the remodeling of Dobson Arena," said Peter Cook, a member of the rec board of directors. "They borrowed $3.4 million to fix the ice sheet right before 9-11 and that left them with no reserves."

Since that time, golf course revenue has dropped from $1.8 million to $1.2 million, Cook said. On top of that, the statewide reassessment of property last year caused the district's property tax revenue to drop by $105,000.

The tax rate the district uses to assesses property tax is 2.76 mills, or about 40 percent of the statewide average of 6.5, said Dennis Stein, executive director of the district. The district's annual budget is $4.1 million per year.

As the financial situation became tighter, the district didn't replace some aging equipment, Stein said.

"If you don't have the money, you don't spend the money," he said. "Our (vehicle ) fleet is past its usable life. We've got tractors that are 30 or 40 years old."

The district has leased equipment instead of purchasing it, which raises the cost of operating, Stein said.

Competition and capital

Growth in the western end of the county has hurt district revenue by changing the game, Stein said.

"We've now got competition. Eagle has a rink and golf courses have proliferated throughout the county. We're not the only game in town," Stein said.

Adding to the financial burden is district's former dependedance on the town of Vail for capital improvements to town-owned facilities such as Dobson Arena. That's no longer happening, he said.

"It's not a troubled business, it's under-funded," Cook said. "The VRD ended up with no cash reserves and about $500,000 less in revenue. We are in a break-even position and should show positive cash flow next year of $60,000 or $70,000.

"But you can't be that tight," Cook added. "We need $500,000 to operate in the winter so we don't have to borrow with tax anticipation notes."

To make it through the lean winter months, the district has, over the last few years. borrowed money in anticipation of tax revenues that appear later in the year.

The district also has trimmed 11 full-time positions since Sept. 11 and has frozen the pay scale of 200 seasonal employees, Stein said.

Capital issues

Because the district has been cash-strapped, it also has put off maintenance and major improvement projects, Stein said.

The district has proposed floating bonds to pay for the needed improvements. Total cost with interest and amortization will approach $14.5 million. Once the bonds are paid, the debt payments - which will cost the owner of a $1 million home $100 per year - will end.

The core of the bond issue is replacing the 25-year-old clubhouse and its restaurant. It may cost more to repair than to rebuild, Stein said.

"It's got major electrical, mechanical, plumbing and gas-line problems," he said. "We've got problems all over the building."

Board member Nino Liccardi agreed.

"The clubhouse is an aging product. It doesn't get better with age," he said. "It's going to have major issues if we don't deal with it."

Part of the $6 million bond will be used to purchase new snow-grooming machinery for the Nordic center, Stein said. That will allow the facility to open earlier in the year and will open up new terrain.

The Nordic center gets heavy use from area schools and with more terrain and track there would be less wear and tear.

Two bridges that are used to cross Gore Creek are aging and can't support grooming machines, he said.

Future maintenance and construction projects will include putting a new roof on Dobson Arena and updating the skatepark on the Lionshead parking garage.

"We need to increase the quality of the programs, not decrease them," Stein said.


Vail Recreation District Ballot issues

5 A

Shall Vail Park and Recreation District taxes be increased $915,953 annually in the first full fiscal year, or by such amount as may be raised by the imposition of an additional ad valorem property tax rate of 1.713 mills, commencing with the collection year beginning January 1, 2005, and continuing thereafter, for general operating purposes including:

Develop and fund a capital improvement and equipment replacement program.

Develop a positive cash flow to avoid annually issuing tax anticipation notes and lease purchase obligations.

Fund the intergovernmental commitments for golf course, Red Sandstone Gynmastics Center, water conservation and irrigation improvements.

Fund the implementation of federally mandated Americans with Disabilities Act requirements.

Allow enterprise fund operations to retain its revenues for reinvestment in the enterprise operation, and other operations to be upgraded to preserve the investment to date.

Resulting in a total district operating mill levy rate not to exceed 5 mills, exclusive of refunds, abatements, and debt service; and shall the district be authorized to collect, retain and spend all tax revenue collected from such total property tax rate, and all other revenue received from any source commencing January 1, 2005, and continuing thereafter, as a voter-approved revenue change, offset and exception to the limits which would otherwise apply under Article X, Section 20 of the Colorado Constitution, or any other law, and as a permanent waiver of the 5.5 percent limitation under section 29-1-301 CRS (Colorado Revised Statutes)?



5 B

Shall Vail Park and Recreation District debt be increased $6,000,000, with a repayment cost of $14,500,000 and shall district taxes be increased $700,000 annually or such lesser amount as may be necessary to provide for the payment of such debt and any refundings thereof; such debt to be issued for the purpose of providing capital improvements to district facilities, including but not limited to acquiring, constructing, improving and equipping;

a new golf/Nordic clubhouse

Two bridge replacements

Nordic snow grooming equipment

ADA accessibility requirements;

and all other necessary, incidental, appurtenant, and convenient facilities and equipment, land and property rights, together with extensions of and improvements to such facilities, within and without the boundaries of the district; and shall the mill levy be increased in any year without limitation as to rate or amount, to pay the principal or, premium, if any, and interest on such debt (or to create a reserve fund for such payment) such debt to be evidenced by loans, bonds, or other forms of indebtedness including loans, bonds, or other, including loans, bonds, or other forms of indebtedness issued to refund such debt as may be issued in the discretion of the board of directors of the district, bearing interest at a maximum net effective interest rate not to exceed 7.5 percent; such debt to be sold in one series or more at a price above, below or equal to the principal amount of such debt and on such terms and conditions and with such maturities as permitted bylaw and as the board of directors of the district may determine, including provisions for redemption of premium of not more than three percent; and shall proceeds of such debt and the revenues from such taxes and any earnings from the investment of such debt proceeds and tax revenues be collected and spent as a voter-approved revenue change under article X, section 20 of the Colorado Constitution or any other law?


Staff Writer Cliff Thompson can be reached at 949-0555, ext. 450, or