[Editor's Note: This news coverage has been underwritten by Factual Aspen Investigative Reporting (FAIR). FAIR has been formed and organized in Aspen, Colorado, as a nonprofit corporation to conduct investigative journalism in the public interest, and to provide accurate, meaningful, and non-biased news coverage based on correct factual information.]
ASPEN, COLORADO (Post Time News)—Despite major snafus in the affordable housing program, local elected officials are asking voters to approve an extension of the Real Estate Transfer Tax (RETT) that paves the way for tens of millions of dollars of bonds—long-term debt that would be used to finance the program far into the future.
Aspen City Council is in fact asking voters to extend the RETT for bonding purposes for a total of 32 years into the future—the same amount of time the affordable housing program has been in existence. The consequences of municipal bonds are far-reaching because they would dramatically shift the affordable housing program from a pay-as-you-go model to one largely dependent on debt financing at a time of global concerns about the reliability of credit markets and declining RETT revenue due to a slowdown in the local real estate market.
The RETT extension through December 31, 2040, arrives on the November 2008 ballot after Aspen City Council decided not to put a bond measure to voters in the wake of inaccuracies in a 2005 Burlingame Ranch affordable housing brochure that provoked an ongoing controversy.
As of now the RETT will expire December 31, 2024. Ballot question 2F extends the RETT an additional sixteen years so to provide a funding mechanism for long-term bond obligations.
“I don’t think that the RETT should be extended without a plan and an idea of how much the bonds are going to be for,” City Council Member Dwayne Romero told Post Time News. “We need a plan here and a system in place that is going to ensure everything is done right. You can’t go to the bank and just ask for money without having
a plan. By extending this RETT that is what we are essentially doing.”
Why should the voters of Aspen give City Council the authority to issue bonds when the City has admitted to making mistakes in the past?
“I think it’s necessary to extend the RETT so it clears the way for the bonds,” City Council member Steve Skadron said. In an open house at City Hall in spring 2008, City staff floated the idea of putting a $49 million bond issue on the ballot, but City Council Members in the end decided against putting that measure on the ballot. City planning documents have used $200 million and more as a figure Aspen will need to fully address its near-term affordable housing needs.
“This is a long-term problem and it needs a long-term solution,” Mayor Mick Ireland, sitting in the Mayor’s chair in Council chambers, told Post Time News. “We need the flexibility to be able to address the problem. We are not like a school where we get funds every year. We need to have the ability to go out there and pass bonds so we could deal with this affordable housing problem.”
When pressed about whether the City was asking for a blank check for affordable housing, Mayor Ireland and City Council Member Jack Johnson said they did not yet know how much affordable housing bonds will cost in the future, and there could not fix a hard figure. The City also faces the challenge of creating a new department, the Capital Asset Management Department, to manage affordable housing issues based on the recommendation of consultants who studied what went wrong—and right—during the Phase I Burlingame process.
The Actual Housing RETT collections year to date through August 2008 are $3,983,982, or down 39 percent. The 2007 number was $6,560,022.
“I haven’t really decided if I am going to vote to extend the RETT so the City Council could do more affordable housing,” Aspen resident Jim Stockton said within view of City Hall. “The snafu with Burlingame is still in my mind and I have to decide on who I am going to vote for President.”
All three Aspen ballot issues pertain directly to affordable housing. In addition to 2F, ballot issue 2E looks to extend Aspen’s 0.45 percent sales tax for affordable housing and day care. The tax is scheduled to expire on June 30, 2010 and if passed will run through December 31, 2040.
Aspen City Manager Steve Barwick said about 55 percent of the tax will go toward day care, and 45 percent will go to affordable housing. Ballot issue 2G is a nonbinding advisory measure that asks voters if they are in favor of increasing density at Burlingame, “in substantial compliance with the recommendations of the Citizen’s Budget Task Force, the conclusions of the Performance Audit, and suggestions of the Construction Experts Group,” according to the language on the ballot. Burlingame would increase from the approved 236 units up to 300 units maximum, pending approval of Burlingame residents.