Doug Glibert Treasurer City of Castle Pines North

The key task for the treasurer at this time is preparation of the city budget for 2009. The city’s finances are starting to come into sharper focus as revenue sources identified during the CH2M HILL OMI feasibility study are updated and costs of services are reviewed. A good understanding of revenues is key because Colorado cities cannot run deficits and certain amounts must be set aside for reserves each year. Beginning in February 2009, the city must take on all services currently provided by Douglas County.

The Castle Pines North city sales tax went into effect as scheduled on July 1, 2008. First receipts from the sales tax will come to the city in September, reflecting the time merchants have to file returns and then the time the Colorado Department of Revenue requires for payment to the city. The property taxes approved by voters in 2007 are more complicated. These taxes are the 4.5 mills (from Ballot Question 2D) for law enforcement— around $660,000 per year—and some or all of the property tax (from Ballot Question 2E) currently collected by the CPN Metro District, an amount up to $3.2 million per year.

The feasibility study for the city was based on a tight integration of City, Metro District, and HOA activities and revenues to drive down costs of services and reduce layers of government. The sharing of services with HOAs is planned through fees--not taxes, which should be lower than the HOA dues that they replace. That process is proceeding with the help of a separate HOA shared services task force.

The revenue and services sharing process with the CPN Metro District has been the subject of a series of intense and productive negotiations. The city and the Metro District are nearing completion of a framework agreement to enable sharing of revenues and eventual integration of services.  The revenue sharing should commence in 2009 with a move of some of the property tax revenues from the CPN Metro District to the city. Integration of services will take one to two years to initiate. Both the city and the CPN Metro District are aware of the complex efforts needed to start up a new city.  Both groups felt that it is best to pursue services integration after the city has had an opportunity to establish operations and put key contractors in place. Waiting also allows the CPN Metro District to put its renewable water strategy in place.

The revenue and sharing negotiations were guided by four key principles. First, solutions that avoid property tax increases to any part of the city were given highest priority. This would include avoiding a tax increase to the residents of city property owners in both the CPN Metro District and the Hidden Pointe Metro District. Second, revenue was matched with responsibility. This means that revenues were kept in the entity, city or Metro District, where the services were performed. Third, solutions were structured to ensure BOTH a renewable water future AND high quality public services. The negotiators recognized that the city cannot be in the position of impairing property values by having first class renewable water but only third class public works services or first class public works and no renewable water future. To maintain the unique character of the community, residents should expect high quality public works and adequate renewable water.  Fourth, the tax structure was designed to facilitate further development in the commercial areas but retain the rural residential character of the community. Such a balance requires a balance between property taxes and sales taxes. This allows the use of property tax incentives to attract new businesses but does not require that the city attract large numbers of big box retailers to generate sales tax.

Details of the agreement should be forthcoming in the next few weeks. The agreement will require a slight modification to Ballot Question 2E, which will not change the tax rates but will simply allow for shifting of revenue from the CPN Metro District to the city. Details of the agreement will be presented in public meetings about the 2009 City Budget and will be fully explained in the commentary to the budget.

Contact Doug Gilbert at .