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Paonia eyes ways to replace mineral taxes

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With recent declines in mineral fund and severance tax revenues due to declines in coal mining in the North Fork Valley, the Town of Paonia is considering ways to bring more income to its coffers.

In June 2016, the town estimated that declines in mineral leasing and severance tax revenues, which in their highest years brought some $125,000 annually to the general fund, had cost about $100,000 over the past five years. In 2016, following the idling of the Bowie # 2 Mine, the town received just over $40,000 in mineral-related revenue; that figure is expected to drop to $25,000 in 2017.

Property tax revenue helps cover administrative, police, parks and streets, explained trustee Karen Budinger, who serves on the town with town finance and personnel committee. She and treasurer Ross King raised the idea to the board at the July 11 public meeting.

"The town has lost a lot of revenue," said Budinger. It currently operates on a skeleton crew, and raises and new hires are out of the question. In addition, said Budinger, money for parks and streets has declined.

An increase in property taxes isn't likely to be popular since the town recently increased water, sewer and trash fees. But what needs to be recognized, said Budinger, is that those increases go directly to those enterprise funds. In speaking for the parks and streets, "We do have to find some new additional revenue for the town."

Budinger proposed a five-mill increase to the property tax mill levy, currently at 8.322 mills. In 2016 in-town property taxes generated $103,000 revenue based on an assessed valuation of $12.32 million. A five-mill increase would generate about $40,000 in additional revenue.

"We have the second highest mill levy in the county," behind Cedaredge, said Mayor Pro Tempore David Bradford. "How much money are we trying to raise through this mill levy increase?"

Bradford estimated the increase would result in about $9 per month per $100,000 of assessed valuation on residential properties, and more for businesses. By asking voters to approve a mill levy increase, "It puts the burden on the property owners in the town," said Bradford. "I think we need to keep that in mind."

A one-percent increase in the town sales tax would generate an estimated $62,000 annually, said Bradford. Of the 6.9 percent Paonia collects in sales taxes (at 7.9 percent, the City of Delta has the highest sales tax rate in the county), the town keeps two percent, which generates approximately $133,000 annually, according to the 2017 town budget. The funds are split between streets and capital improvements. The town also receives an additional $95,000 annually from county sales taxes.

Special taxing districts for streets and parks was also mentioned as ways to generate revenue, as were occupancy or bed and breakfasts taxes, license fees on mobile food vendors, and annexation of other properties into the town. Those, said Budinger, would likely raise just enough to cover administrative costs.

"I kind of like the idea of a sales tax, because it spreads that increase around," said longtime area resident Dawn Ullrey. "I think it's not right to put that burden on property owners and businesses in Paonia. I think they already pay enough in taxes."

"Whenever we look at tax increases we also need to at least first look at where costs can be cut and where the town can be more efficient," said Mayor Charles Stewart. Budget cuts made since 2014 "have been very significant, but I think that question always has to be addressed."

With notification of formal action to participate in the Nov. 7 coordinated election due July 28, the board needs to decide soon, said King. The topic will be placed on upcoming agendas, and the public is invited to submit comments to the town.

In other business, the town will receive $502,855 from proceeds of sales of three parcels of land.

Two parcels are located at 38976 Highway 133, 38784 Marsh Road, and 11 acres of vacant land subdivided from the parcel where the town's wastewater plant is located was also sold. The land was originally purchased by the town in the late 1990s for a new wastewater treatment plant.

That is not the net amount the town will keep, explained Mayor Charles Stewart. Because some of the land was purchased through a grant from the USDA, some funds will be returned to cover repayment of a portion of the grant. "We are still in discussions with the USDA," said Stewart, but the last known figure was about $28,000. Other costs related to the sales also need to be considered, said Stewart.

The town is also required to place a portion of those proceeds, last estimated at $168,000, in the Wastewater Reserve Fund, although that number could change, said Stewart.

In other actions, Cirque Cycle, LLC, dba Remedy, received approval of a liquor license renewal. Trustee and Remedy owner Chelsea Bookout did not vote or comment on the renewal application.

A liquor license renewal was approved for Linda M. Little, dba Linda's 3rd Street Bistro. Little bought the Victorian style building at 213 Third Street in 1996. It was built in 1898, making it one of the oldest buildings in town, said Little. Stepping inside "is like stepping back in time." Little said she is working to sell the building and retire, and thanked the board for its service.

Representing the Rotary Club of the North Fork Valley, Sarah Bishop reported that club volunteers spiffed up Poulos Park on June 30 in preparation for Cherry Days. Seven volunteers picked up glass and other trash, weeded, removed sucker limbs from the chokecherry tree, increased visibility of the picnic table by trimming low limbs off of the big spruce tree, and cut back a dying shrub in hopes it will again grow.

It looked nice for Cherry Days, said Bishop. "I personally am impressed with how well that park has held up over the years," she said. She asked that the town address some maintenance issues, and thanked it for its time.

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North Fork
Paonia, Taxes
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