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HomeMy WebLinkAboutagenda.council.worksession.20250728AGENDA CITY COUNCIL WORK SESSION July 28, 2025 4:00 PM, City Council Chambers 427 Rio Grande Place, Aspen I.Work Session I.A Legislative Update - Rep. Elizabeth Velasco I.B Aspen School District Ballot Question II.Council discussion of the items published in the most recent information update, as needed Zoom Meeting Instructions Join from PC, Mac, iPad, or Android: https://us06web.zoom.us/j/82449657031?pwd=gzfyV3UxILGHAZQKVn56Ij1isc6YHu.1 Passcode:81611 Join via audio: +1 346 248 7799 Webinar ID: 824 4965 7031 Passcode: 81611 International numbers available: https://us06web.zoom.us/u/kcAxloJpZ0 Memo - School District Ballot Question Discussion.docx Attachment A - School District Ballot Question Examples.docx Attachment B - Figures for Tax Question Context.docx 1 1 TO: Aspen City Council FROM: Pete Strecker, Interim City Manager MEMO DATE: July 28, 2025 RE: Potential Tax Question to Benefit Public Education PURPOSE: This memorandum serves as catalyst for Council discussion around a potential tax question to benefit public education for the upcoming November election. BACKGROUND: Currently, the City of Aspen’s sales tax levy equates to 2.4%. This aggregate amount is comprised of multiple voter approved levies that benefit various programs within the City, and can be summarized by the following. In addition to the City’s taxation at the time of sale, other overlapping jurisdictions’ taxation is also included, and results in a total tax rate of 9.30%.  1.50% for Parks and Open Space – approved into perpetuity  0.45% for Childcare and Affordable Housing – sunsets Dec. 31, 2060  0.15% for Transportation – approved into perpetuity  0.30% for Education – sunsets Dec. 31, 2026 2.40% total City sales tax  3.60% for Pitkin County  0.40% for Roaring Fork Transit Authority  2.90% for State of Colorado 9.30% total aggregate sales tax The above baseline does not reflect the potential impact of sales tax questions being considered for this November. While Aspen Fire District is still contemplating its decision to move ahead with a sales tax question (up to 0.50%), the Early Childhood Education Coalition is determined to move forward with its 0.25% sales tax question this Fall. These requests are joined by a request of the Aspen School District to City Council to consider an additional sales tax question for public education (along with other property tax and debt issuance questions outside of Council purview). DISCUSSION: As noted above, the City currently levies a 0.30% sales tax which is dedicated for the purposes of public education, but this tax is scheduled to sunset at the end of 2026. Due 2 to the deadline approaching, the District is interested in seeking input from the community about further financial support for public education. Additionally, as the District has limited reserves and other financial challenges, it is also seeking to increase revenues from various tax initiatives: it plans to request a doubling of both Town of Snowmass Village and City of Aspen tax support, plus ask for a district wide request for a higher property tax (via an increased mill levy override). While Aspen continues to support the School District in many ways financially as outlined in a memorandum discussed at the July 14th work session, it is important to consider the following:  Today, the City of Aspen provides significantly more funding than other benefactors within the School District boundary, using a 0.30% sales tax. a. Currently, no additional funding comes to the District from households that reside outside of the Town of Snowmass Village or Aspen city limits. b. Town of Snowmass Village households contribute roughly $500K annually to the School District, or approximately $1,600 per student from that community. c. The City of Aspen provides $3.9M currently to the School District, or more than $4,400 per student that reside within the 81611 zip code (thus, includes students outside of city limits).  Implications of further elevating the City’s sales tax rate as a mechanism to provide financial assistance to the School District can influence tourism or consumption of locally sold goods. It can also negate the possibility for the City to leverage this taxing authority for other community needs that might come up in the future. .  The financial challenges of the School District are noted to be worsening due to changes at the State level (HB 25-1320), and the allowances for funding under broader legislation; however, some of those legislative changes denote a phased approach (~15% per year) and will not be fully implemented until 2031. As such, there may be time available for the School District to consider a more equitable approach that can incorporate a wholistic solution, as the School District also considers a higher mill levy override to increase property taxes across all district households on an equitable basis. NEXT STEPS: Staff are looking for direction on how the Council would like to proceed with utilizing the City’s taxing authority to support public education and the Aspen School District. Once 3 staff have direction, a ballot question can be drafted and brought back to Council for consideration at the August 12th regular meeting. Possible options for Council consideration:  Do nothing for this November. This would result in the current City of Aspen 0.3% sales tax for education continuing to be collected through December 31, 2026 and would delay any request of voters for this election cycle, but would not prohibit a question to be proposed within the November 2026 election.  Extend the current 0.30% City of Aspen sales tax for another 5 years (or any other duration proposed by the Council). This wo uld lock in Aspen’s financial support to public education that is already meaningfully more (on a per pupil basis and aggregate dollars) than provided by other communities within the School District boundaries. This perpetuates the inequity in providing f inancial support for the School District, but does not elevate it beyond current levels.  Adjust the amount of the City of Aspen sales tax for another 5 years (or any other duration proposed by the Council), beginning January 1, 2027. This will bring the financial support from roughly $4M today to a new amount specified by Council. In addition to perpetuating the inequity of financial assistance to public education, depending on the Council action for setting the percentage to levy, this may also increase the aggregate sales tax rate to be levied on consumers within Aspen city limits and could potentially have an adverse impact on the local economy as a result.  Shift the taxing structure from a sales tax to a property tax to provide financial support to the School District. This would utilize the same property taxing structure that is used by the School District broadly and by the Town of Snowmass Village when it agreed to provide additional funding support to public education in the past. This option would help to eliminate the escalating sales tax rate levied within Aspen city limits. Two options could be pursued under this property tax methodology: o Allow the number of mills levied to float to only collect a certain amo unt of revenue annually. o Set a specific number of mills and allow the amount of revenue collection to fluctuate based on the movement of assessed valuation of property annually. The above options are all possible and can be considered by the Council , or additional recommendations may be made. Ultimately, staff require direction from Council for the purposes of drafting recommended ballot language for consideration on at the August 12th regular meeting. 4 MANAGER’S COMMENTS: Though the memorandum includes various considerations for alternatives to the School District’s request for doubling current support from the City, this does not mean to reflect there’s any less desire for partnership than has always existed between the City and the School District. Rather, the presented options for Council consideration are meant to outline the possible consequences with regard to elevating the aggregate sales tax that may stifle economic activity and/or change future tax question options for the Council on other community needs. Additionally, these staff statements are meant to provide context to the level of support Aspen already provides relative to other contributors or benefactors of the School District’s services. ATTACHMENTS: Attachment A: Possible Ballot Questions Attachment B: Figures for Tax Question Context 5 Attachment A – Possible Ballot Questions Option 1: Extend the sunset provision of the existing 0.30% sales tax WITHOUT IMPOSING ANY NEW TAX, SHALL THE CITY OF ASPEN BE AUTHORIZED TO EXTEND ITS EXISTING .30% SALES TAX DEDICATED TO EDUCATIONAL PURPOSES, WHICH WAS APPROVED BY THE VOTERS IN 2012 AND EXTENDED BY APPROVAL OF THE VOTERS IN 2016 AND 2020, AND IS SCHEDULED TO EXPIRE ON DECEMBER 31, 2026, AND CONTINUE TO COLLECT SUCH SALES TAX THROUGH DECEMBER 31, 2031, FOR THE PURPOSE OF PROVIDING SUPPORT FOR ASPEN SCHOOL DISTRICT NO. 1 AS DESCRIBED IN THE PRIOR BALLOT QUESTIONS; AND SHALL THE REVENUE FROM SUCH SALES TAX AND EARNINGS THEREON BE COLLECTED, RETAINED AND SPEND BY THE CITY AS A VOTER APPROVED REVENUE CHANGE NOTWITHSTANDING ANY LIMITS CONTAINED IN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW? Option 2 – Adopting a new dedicated sales tax for public education, effective January 1, 2027 (upon sunset of the existing 0.30% sales tax) SHALL THE CITY OF ASPEN, COLORADO TAXES BE INCREASED $_________ ANNUALLY (ESTIMATED) FOR THE FISCAL YEAR (2027) AND BY SUCH AMOUNTS AS MAY BE GENERATED ANNUALLY THEREAFTER BY A NEW ___% SALES TAX COMMENCING JANUARY 1, 2027 AND CONTINUING THROUGH DECEMBER 31, 2031, TO BE USED FOR EDUCATIONAL PURPOSES PROVIDING SUPPORT TO ASPEN SCHOOL DISTRICT NO. 1 (RE); PROVIDED FURTHER THAT THE REVENUES DERIVED FROM SUCH SALES TAX SHALL BE COLLECTED BY THE CITY OF ASPEN AND DISBURSED THROUGH A TRUST OR OTHER NONPROFIT ENTITY CREATED BY INTERGOVERNMENTAL AGREEMENT BEWTEEN THE CITY AND ASPEN SCHOOL DISTRICT NO. 1, WITH SUCH TRUST OR OTHER NONPROFIT ENTITY MANAGED BY INDIVIDUALS SET FORTH IN SUCH INTERGOVERNMENTAL AGREEMENT; AND SHALL THE REVENUE FROM SUCH TAX AND EARNINGS THEREON BE COLLECTED, RETAINED AND SPEND BY THE CITY AS A VOTER APPROVED REVENUE CHANGE NOTWITHSTANDING ANY LIMITS CONTAINED IN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW? Option 3a – Fixed dollar amount property tax for public education (mill levy would float to only collect a specific amount of revenue annually) SHALL THE CITY OF ASPEN TAXES BE INCREASED $[_________] IN 2026 FOR COLLECTION IN 2027, AND ANNUALLY THEREAFTER THROUGH DECEMBER 31, 2031, BY THE IMPOSITION OF AN ADDITIONAL PROPERTY TAX MILL LEVY AT A RATE SUFFICIENT TO GENERATE SUCH AMOUNT; SUCH TAXES TO BE USED FOR EDUCATIONAL PURPOSES TO SUPPORT ASPEN SCHOOL DISTRICT NO. 1 AND TO REIMBURSE THE CITY FOR THE COSTS OF COLLECTION OF SUCH TAXES IMPOSED BY PITKIN COUNTY; PROVIDED FURTHER THAT THE REVENUES DERIVED FROM SUCH MILL LEVY SHALL BE COLLECTED BY THE CITY OF ASPEN AND DISBURSED THROUGH A TRUST OR OTHER NONPROFIT ENTITY CREATED BY INTERGOVERNMENTAL AGREEMENT BEWTEEN THE CITY AND ASPEN SCHOOL 6 2 DISTRICT NO. 1, WITH SUCH TRUST OR OTHER NONPROFIT ENTITY MANAGED BY INDIVIDUALS SET FORTH IN SUCH INTERGOVERNMENTAL AGREEMENT; AND SHALL THE REVENUE FROM SUCH TAX AND EARNINGS THEREON BE COLLECTED, RETAINED AND SPEND BY THE CITY AS A VOTER APPROVED REVENUE CHANGE NOTWITHSTANDING ANY LIMITS CONTAINED IN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW? Option 3b – Fixed mills property tax for public education (revenue collected annually would fluctuate based on the change in assessed valuation of property) SHALL THE CITY OF ASPEN TAXES BE INCREASED $[_________] IN 2026 FOR COLLECTION IN 2027, AND BY WHATEVER AMOUNTS ARE PRODUCED ANNUALLY THEREAFTER THROUGH DECEMBER 31, 2031, BY THE IMPOSITION OF AN ADDITIONAL PROPERTY TAX MILL LEVY AT A RATE NOT TO EXCEED [___] MILLS; SUCH TAXES TO BE USED FOR EDUCATIONAL PURPOSES TO SUPPORT ASPEN SCHOOL DISTRICT NO. 1 AND TO REIMBURSE THE CITY FOR THE COSTS OF COLLECTION OF SUCH TAXES IMPOSED BY PITKIN COUNTY; PROVIDED FURTHER THAT THE REVENUES DERIVED FROM SUCH MILL LEVY SHALL BE COLLECTED BY THE CITY OF ASPEN AND DISBURSED THROUGH A TRUST OR OTHER NONPROFIT ENTITY CREATED BY INTERGOVERNMENTAL AGREEMENT BEWTEEN THE CITY AND ASPEN SCHOOL DISTRICT NO. 1, WITH SUCH TRUST OR OTHER NONPROFIT ENTITY MANAGED BY INDIVIDUALS SET FORTH IN SUCH INTERGOVERNMENTAL AGREEMENT; AND SHALL THE REVENUE FROM SUCH TAX AND EARNINGS THEREON BE COLLECTED, RETAINED AND SPEND BY THE CITY AS A VOTER APPROVED REVENUE CHANGE NOTWITHSTANDING ANY LIMITS CONTAINED IN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW? 7 Attachment B – Figures for Tax Question Context A. Students within Aspen School District RE-1 by Location: # of Students % of Total Woody Creek (81656) 48 3% Town of Snowmass Village (81615) 318 20% Aspen and Surrounding Areas (81611) 895 57% Out of District 299 19% Note: 81611 zip code includes areas outside Aspen city limits, including Aspen Village, AABC, Red Mountain, etc. B. Assessed valuations for different entities supported by Aspen School District RE-1: Assessed Valuations Town of Snowmass Village $856,276,380 City of Aspen $2,930,335,720 Aspen RE-1 (School District) $5,342,831,920 Pitkin County $5,684,821,370 Note: The School District boundaries largely mirrors the larger Pitkin County boundaries in terms of total assessed valuation, however, some areas of the County are supported by the neighboring school district. C. The current level of financial support from Town of Snowmass Village and Aspen : Calendar Year 2024 Mechanism for Support Existing Financial Support TOSV (via property tax) 0.596 mills $510,341 City of Aspen (via sales tax) 0.30% Sales tax $3,912,327 Total $4,422,668 Note: The School District is seeking to double these levels of support. If the Town of Snowmass Village doubles its property tax levy to 1.192 mills, the City of Aspen could consider an equivalent mill levy. This would generate $3.5M from the City of Aspen, just slightly less but comparable to the current 0.30% sales tax amount above. For context - every 0.100 mills will generate approximately $293K under the current assessed values within city limits. This amount can be used to derive other alternative mill levy thresholds. Assessed Valuation Mills Revenue City of Aspen $2,930,335,720 1.192 $3,492,960 8 2 D. Future Considerations Note: Perhaps a countywide solution could be considered with a limited amount of revenue generated above the school district needs distributed down valley to the neighboring school district? For instance, an approximate 1.208 mills levied across the Aspen School District boundaries would generate $4.4 million. That same levy across the entire county would generate $4.7M. The difference of $283K may possibly be shared with the neighboring school district to reflect an appropriate share for students not supported within the RE-1 boundaries. # of Mills Revenue Generated School District boundaries 1.208 $4,422,874 Pitkin County boundaries 1.208 $4,705,978 Excess Generated $283,104 9