This week’s meeting of the Grand County Board of County Commissioners (BOCC) saw the Board decide on three issues to be presented to the voters on the 2018 general ballot and receive updates on property assessment values for 2018 and the ongoing effort to bring short-term rental property owners into compliance with the year-old permitting system.
2018 BALLOT MEASURES
Following two weeks of discussion on potential 2018 ballot issues, Commissioners unanimously approved three measures to be presented to voters in November, including a proposed 5 percent sales tax on retail marijuana, a proposed 5 percent excise tax on retail marijuana production, and an opt-out choice of Colorado’s Senate Bill 152, which restricts the participation of government entities in offering telecommunications services.
The first ballot measure was passed by the Board and would require sales tax to be collected and submitted by retailers selling recreational marijuana products. Some community input expressed concern about raising taxes on consumers but was met with input from another community member, Rich Rosene of Kremmling, who said, “There are additional impacts such as increased law enforcement, EMS, and other costs related to the legalization of marijuana. I think this is an appropriate way to raise money for that, where you’re taxing the consumer and not the whole county.” The final measure, if passed by voters, would require the 5 percent tax, with an anticipated annual revenue of $310,000 to the County, and would permit retailers to retain up to 3 ⅓ percent of the tax collected to “cover the expense of collecting and remitting the tax,” as explained by County Finance Director Curtis Lange.
A related measure would levy a similar 5 percent excise tax on recreational marijuana growers or producers at the first sale or transfer of product to a manufacturer or retailer. Earlier discussion included the possibility of starting at a lower rate and gradually increasing it to the State-capped maximum of 5 percent. This week, the Board agreed on a flat 5 percent proposal, recognizing that the voters could vote it down and that, if passed, the higher revenue would help to pay for uncertain administrative and implementation costs that would likely include a full-time salary and increased armored car costs to transfer remittances from the cash-based industry.
Both measures read that produced revenue will go into the General or Road and Bridge funds and be used for “public safety, road construction, general government purposes, and any other lawful purpose.”
The final proposed measure also saw some community discussion, mostly from Eden Recor of Grand County Internet. Recor had previously testified against the measure at the original 2017 hearing on the Broadband initiative opt-out and sent a letter read by Commissioner Kristen Manguso at last week’s meeting. He expressed concerns about the impact of the opt-out allowing the County to go “into the internet business,” thereby impacting private business and discouraging private investment in telecommunications infrastructure. He also expressed concern over a financial interest held by Commissioner Rich Cimino in telecom company Slopeside Internet.
Cimino, stating that he’d received counsel on the matter, did not participate in the discussion and abstained from the vote that had Manguso and Commission Chair Merrit Linke vote in favor of approving the measure for the ballot.
Manguso reiterated, in regards to all three proposed measures, that “I am a limited government person. But it is my firm opinion that the voters get to speak. And I will continue to defend that.” Linke and Cimino were in full agreement, emphasizing that their vote neither decided the issues nor meant endorsement of any of the issues. “I agree,” said Linke, “we’re deciding to let the public speak on this.” “This is how it should work,” echoed Cimino.
2018 ABSTRACT OF PROPERTY ASSESSMENT
Grand County Assessor Tom Weydert provided the Commission with an Abstract of Assessment for Grand County property values in 2018, following initial appeals processes. The presented Summary of Assessment provided a total valuation for Grand County property at about $738 million, a $6.5 million increase in value when compared to the final 2017 valuation of $731.5 million. Properties are assessed differently, according to zoning and usage, and show a general positive trend in valuation. Vacant land is currently valued at approximately $90 million, down from $92.9 in 2017; residential property at $388.4 million, up from $369.3; commercial properties at about $90 million, up from $88; and industrial remaining constant at $40.3 million.
Two notable differences in valuation are in agricultural land and producing mines, currently valued at $9.26 million and $2.34 million respectively. In 2017, Grand County agricultural land was assessed at close to $20 million and producing mines at $4.6 million. The changes in these properties may both have significance to Grand County. The negative change in Ag valuation seems to indicate a considerable shift in land usage in a traditionally agricultural community. And the mining industry has long been an important revenue source for the County and other taxing entities.
In all, approximately $664.7 million in Grand County properties are currently taxable for 2018, compared with $660 in 2017. Property tax collections last year resulted in $10.95 million for the County, $12.8 and $2.85 million for the East and West Grand School Districts, and $2.38 million for the Grand County Library District. While both residential and non-residential taxing rates will remain mostly constant this year, hopefully resulting in slightly higher taxing revenue in 2018, concerns remain high about the future effects of the State Gallagher Amendment, which have seen residential tax rates decreasing for years as non-residential rates continue to rise.
STR ENFORCEMENT OF DELINQUENCY
Community Service Deputy Rick Liberali of the Grand County Sheriff’s Office (SO) updated Commissioners on recent efforts to enforce compliance of the County’s Short-Term Rental (STR) program.
Since May 2017, all STRs or vacation rentals in unincorporated Grand have been required to be registered and permitted with the Community Development Department. In that first year of regulation, permit application cost property owners an annual flat fee of $150– a minimal fee for many properties charging hundreds of dollars for a single night’s stay. Yet, over a year into the program, brought forward and implemented in order to maximize revenue to the County, the program is running in the red, with barely 80 percent of advertising properties coming into compliance with the permitting process and administrative and adjacent costs far above what was originally anticipated.
As of this past June, enforcement efforts have been turned over to the SO and Deputy Liberali to try and bring a remaining 135-ish properties into compliance. Liberali reported that delinquent cases were being provided by Community Development in batches of 15 to 16 at a time and that he had been posting an attorney-approved Notice of Violation on property doors with “amazing results.” The letter of notice, he said, includes an admonition to essentially “call me or go to jail, making them an offer they can’t refuse.”
He stated that program administrators expected an 80 percent response and compliance with the newest enforcement efforts, leaving approximately 24 cases with no recourse but to go to court. “The penalties accrued should a case go to court,” according to Liberali, “are equivalent to $100 a day.” However, response has so far exceeded the expectation. Of the first batch of cases of violation, 15 of 16 have been closed with nothing more than the posted notice, bringing in $2,325 in delinquent revenue.
However, the involvement of the SO adds more cost to a program that is, so far, not self-sustaining. The Sheriff’s Office charges in most cases of document service with an example of $35 plus mileage in order to serve a civil summons or complaint anywhere in the county outside of Hot Sulphur Springs. According to the County Manager’s Office, violators are not being charged for the cost of document service, though they recognize that this time-cost is nominal compared to the time-cost of a court proceeding.
In the meantime, “I will continue to vociferously chase these,” said Liberali, who says he has also been in contact with the Department of Revenue about potential sales tax violations as well. “ It is a flagrant violation of the zoning. It’s my responsibility to bring as many people into compliance in this process as possible.”