EDITORIAL: Debt and Taxes… and a New County Courthouse, Part Two

Read Part One

Near the conclusion of the friendly, 40-minute meeting between the Archuleta Board of County Commissioners (BOCC) and Colorado Treasurer Walker Stapleton last Tuesday morning, we heard a brief summary, from Mr. Stapleton about the state’s new “Pay for Success” legislation — a new law meant to entice private companies to get involved with public education and child care, by subsidizing those companies with taxpayer revenues. Then the BOCC thanked Mr. Stapleton for his visit, and he assured them that his Denver office could help with the County’s courthouse issues.

“I’m happy to be here,” said Mr. Stapleton. “I’ll pass out my business cards, and you can follow up with me on the Courthouse, and I can put you into a point of contact.” Everyone shook hands.

The view of the existing Archuleta County Jail, from the scenic Pagosa Springs River Walk along the San Juan River.

The next item on the morning work session agenda was the draft Community Development Action Plan, better known as the CDAP. This document, which will be approved by the BOCC later this year, typically lists every possible “development” project that might, at some point, try and lay its hands on federal government grants or loans. As you can see from the 12-page draft document (which you can download here,) our community has a number of ongoing or future projects that the federal government — along with numerous other government agencies, and various non-profit and for-profit companies — might wish to support financially: a “geothermal greenhouse” project in Centennial Park, expansion of the Pagosa Springs Medical Center, a new taxiway at the County airport, a proposed charter school… and two dozen other development proposals.


We might look a bit closer at the proposed Pagosa Springs Medical Center expansion, as one example of an expensive capital project. At a recent presentation to the Town Planning Commission, this expansion was represented as a 24,000 square foot clinic, to be built on PSMC property adjacent to the existing hospital. The expansion — which is being billed as “Phase One” of a larger expansion plan — is expected to cost about $12 million, and it appears that the Upper San Juan Health Services District (USJHSD) will need to borrow at least $6 million to make it happen.

As a tax-supported Colorado government entity, USJHSD is subject to the Taxpayer Bill of Rights (TABOR). In 1992, the voters of Colorado approved amendments to Article X of the Colorado Constitution that restrict revenue and spending growth for all levels of government — state, local, and schools. Under TABOR, state and local governments cannot raise tax rates without voter approval — and cannot spend revenues collected under existing tax rates, without voter approval, if those revenues grow faster than the rate of inflation plus population growth.

Another requirement of TABOR: voter approval of new debt. TABOR requires voter approval in advance for the “creation of any multiple fiscal year direct or indirect district debt or other financial obligation whatsoever…”

Basically, TABOR requires the state of Colorado to act in a fiscally conservative manner.

But there are a few special cases, under which a government entity can incur new debt without voter approval. One case involves a so-called “government enterprise,” which is a defined government operation that charges for services and thus generates its own income — like, for example, a hospital. The Pagosa Springs Medical Center last year took in about $19.5 million in net revenues, according to its 2014 Annual Report (which you can download here) and received only about $1.1 million in local tax subsidies, or about 5 percent of its total net revenues. Because “less than 10 percent” of the hospital’s income is derived from state or local government contributions, USJHSD designates the Pagosa Springs Medical Center as a “government enterprise,” and claims the legal right to create a new $6 million debt, without first asking voter approval.

If we calculate the cost of the proposed PSMC expansion on a purely “square footage” basis, we can see that USJHSD is calculating the price of these new offices at about $500 per square foot. ($12 million divided by 24,000 square feet.)

This is somewhat higher than the square-foot cost of recently completed government buildings in Gunnison County, mentioned in a Daily Post editorial posted earlier this month. In that article, we noted that the new Gunnison County Courthouse and the separate new Public Safety Center had cost the community about $28.5 million — coming in at a square-footage cost of about $380 per square foot.  Cheaper than what is being proposed for the PSMC expansion here in Pagosa Springs, but still not cheap.

Which might bring us to the situation facing the Archuleta Board of County Commissioners — Michael Whiting, Clifford Lucero and Steve Wadley — who have each claimed, on various occasions, to be fiscal conservatives.

A leaking roof, during a rain event at the end of April this year, caused the closure of the Archuleta County Detention Center (better known as the County Jail) and the relocation of the County Sheriff’s Office to a temporary home on Goldmine Drive. The event is being billed, by certain County officials, as a crisis requiring a massive expenditure of taxpayer revenues.

In fact, the crisis began quite a few months before the roof began to leak. The Colorado Judicial System has been complaining about lack of space at the existing Archuleta County Courthouse, and about building code violations of various kinds, and about poor ventilation, for maybe a couple of years? And provided a reasonably full accounting of its space and safety needs, in a September 2014 report.

More recently — this past February — Courts Chief of Staff Mindy Masias made the following statement to the BOCC:

“… I find it fully unacceptable that my staff and the public have been in a building where the fire alarm system hasn’t worked for the past year, and we haven’t gotten any communication about that. Now I am in a position where I have to make some decisions, legally, about what I am going to do.” So, as we see, the BOCC already had a problem on their hands before any water leaked through the roof. Maybe even a legal problem.

We might notice that the draft CDAP document mentions the County Courthouse — or, at least, it mentions this item:

“Expand Jail Capacity & Justice Center”

From following the conversations at various recent County meetings, I understand the term “Justice Center” to mean “courtroom facilities and County Sheriff’s offices.” The price tag attached to that project, in the draft CDAP, is “8 to 12 Million.” Or, approximately the price of the proposed PSMC hospital expansion.

From those same conversations, I am getting the sinking feeling that the BOCC wants to fund their expensive project without first getting voter approval as required by TABOR.

Maybe we should look at how very badly a “Jail Expansion” can go, when the government bypasses the voter approvals required by the Taxpayer Bill of Rights in the Colorado Constitution.

Read Part Three, on Monday…


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