The following comments and opinions are those of the author only. They do not represent an official position for the city of Manitou Springs or City Council.
Given the city’s many needs and uncertain financial future, should we continue to restrict public funds that could be used elsewhere in the city?
Many Manitou Springs residents may be unaware of the city’s Urban Renewal Authority, the role it plays and the financial policies that underpin it. The URA controls significant funds that can be used only under limited circumstances.
The URA was formed in 2006 to overcome urban blight and revitalize eastern Manitou Avenue. Its boundaries include properties on either side of Manitou Avenue from the eastern arch to the U.S. Highway 24 overpass.
It was designed to channel tax revenue back into properties in that area. The property and sales taxes amounts collected in 2006 within the area were set as the basis for future comparisons. Any tax exceeding that baseline goes directly to the URA, not to the city’s general fund.
This was before Manitou legalized recreational marijuana in 2014 and limited sales to two locations, both in the URA. Marijuana sales have been a gold mine for the URA, with a smaller percentage going to the city.
According to the URA’s budget, it will get approximately $1,733,000 in sales tax and $115,000 in property tax in 2022. In comparison, the city as a whole expects to get $8.5 million in sales tax and $865,850 in property tax.
Weigh the URA revenue against that for the entire city, you will see that the URA prospers handsomely. This is a lopsided arrangement — shouldn’t the windfall benefit everyone?
The URA’s retained funds from last year are $2,295,169. With this year’s income, that will total more than $4 million. Again, this is lopsided — shouldn’t the windfall be spread more evenly for the benefit of all?
In comparison, on July 19, City Council earmarked $2,646,000 for eight major projects. These will benefit the city at large and protect our quality of life.
These allocations were not as generous as Council might have liked. They came with a strong sense of fiscal caution. Taxes from recreational marijuana sales are substantial. If Colorado Springs voters legalize it in November, the city budget will see severe shortfalls.
The URA’s anticipated capital expenditures for this year include:
- Two sculptures for Manitou Avenue: $110,000;
- Restroom renovations at Fields Park: $65,000;
- Property acquisition: $1,250,000;
- Streetscape enhancements: $1,500,000;
- Street tree program: $25,000;
- Pedestrian bridge over Fountain Creek: $250,000; and
- Holiday lighting: $35,000.
These expenditures would total $3,235,000.
Some of the URA projects are less than essential, such as wrapping a dozen utility boxes with artwork at a cost of $5,000-$8,000 apiece. That’s potentially almost $100,000. Two sculptures already occupy spots along Manitou Avenue where they are difficult to appreciate; three more are on the way at about $55,000 each.
In addition, the URA will credit sales tax collections at the new Holiday Inn Express back to the hotel for construction incentives. Although the hotel’s owners had already committed to the project, the URA offered concessions, potentially to the tune of $2.1 million.
Suppose the URA money was used elsewhere in the city.
There has been a lot of deferred maintenance throughout Manitou, all begging for fixes. The cost of repairing deficiencies at City Hall, the fire station and the Pool & Aquatic Center come to a little less than $2 million, based on a report City Council received in April.
A more recent surprise is that we need to create our own ambulance service.
Legal limitations prevent spending URA funds outside its boundaries. Once the city remits money to the URA, it belongs to the URA, regardless of needs elsewhere in the city.
There are several possible scenarios:
- Make no changes and let the URA keep its status quo;
- Disband the URA; close it out and channel all future money to the city’s General Fund, reserving only enough funding to satisfy existing URA obligations. This would require voter approval; or
- City Council could withhold all or a portion of the money that would otherwise go to the URA. The city could then use the money where needed.
If Colorado Springs legalizes recreational marijuana, our tax base will be severely damaged. We need to make the most of our resources now.
More money for capital projects would help with overdue improvements. A strong cash reserve will be helpful, especially when federal infrastructure programs take hold and perhaps ask for matching local money.
More importantly, citizens citywide should share the windfall that fell to the URA.