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Bayfield hosting workshop on sales tax, fees

Marijuana businesses still being considered

Bayfield town trustees continued discussion on Jan. 20 of assorted fee increases on town residents and businesses to help pay for future road maintenance, plus a new monthly fee for drainage infrastructure.

The list of items was reported in the Jan. 16 Times.

It includes raising the Source Gas franchise fee and adding a franchise fee on La Plata Electric Association, both of which would show up on bills for in-town customers. Another possibility is the creation of a drainage enterprise fund with monthly charges to residents to pay for drainage infrastructure, and possibly reversing the town's ban on medical or recreational marijuana businesses.

Trustee Matt Nyberg wanted to keep marijuana businesses on the list, "so citizens understand we're looking at all possibilities, maybe motivate them to vote for the sales tax."

Trustees are looking at new ways of finding money after town voters rejected a town sales tax increase twice in 2014. The money, estimated at $260,000 a year, would have been used for road-related and drainage projects.

Trustee Matt Salka agreed with Nyberg. "If people don't want to increase the sales tax, we have to find a way to keep the roads nice and drivable."

Trustee Michelle Nelson opposed keeping marijuana businesses on the list. Trustee Rachel Davenport added, "I see it (overseeing those businesses) as a huge staff time drain for very little."

At the Jan. 6 meeting, Town Manager Chris La May estimated that a recreational marijuana business might generate around $10,000 from the town's current 2 percent sales tax.

Nelson asked, "How much would our law enforcement budget have to increase?"

Mayor Rick Smith worried that having marijuana businesses on the list would divert attention from the real issue of bringing in more money for roads. "What I really don't want to see is the mission gets hijacked and we spend all our time discussing that instead of the real issue," he said.

The people spoke when they opposed both medical and recreational marijuana businesses, Smith said.

Nyberg countered that the people spoke when they rejected the sales tax increase twice, "but we keep throwing that out there."

Smith responded, "The sales tax is the only alternative that takes care of the roads long-term." He wants a volunteer citizens committee to promote the tax increase.

"I really don't want to open a can of worms again," Smith said, meaning marijuana businesses.

Nyberg said, "Tell people marijuana could be the alternative if they don't want the tax." That could happen when the town board meeting room is packed. At most meetings including Jan. 20, there is no one in the audience except the news reporter.

Salka lamented the lack of citizen involvement. "Let them know we're looking at every option. At least it would get them in here."

Davenport suggested, "Maybe don't ignore the idea, but instead of putting in the effort to work up ordinances, that it's still something we'll consider depending on how we do with budgeting and finding other revenue sources. (That it's) waiting in the wings."

Salka said, "I don't want a pot shop on every corner, but we have to come up with the money." He recounted a trip to another county where, "I was driving all over the road to avoid potholes. I don't want that here."

Nelson objected, "I don't think we should blackmail our citizens."

Nyberg responded, "It's not blackmail. It's educating. You see how many people come to our meetings."

Smith stressed that whatever the board decides, all the trustees will have to be for it. If the board keeps marijuana businesses as an option, they better be prepared to go with it if the sales tax increase is rejected yet again. "It will come back to haunt this board," he said. "Look how much time we're spending on it."

He directed discussion to the other options.

La May proposes to double the Source Gas franchise fee. Nelson said it's worth looking at, but she wanted to know how it would affect the average household.

"I don't think it's that significant," La May said. The current fee "only generates $10,000."

A new 5 percent franchise fee on LPEA bills in town could generate around $80,000 according to LPEA estimates, La May said. There would be negotiations with the LPEA board, and they would have to approve the franchise agreement.

Franchise fees are for use of town rights of way. La May said there are other ways to collect those fees if the LPEA board didn't approve a franchise agreement. He didn't elaborate.

Asked if town residents would have to vote on the franchise fee, La May said they did in Durango because Durango is a home-rule city and it's in their charter.

Town attorney Jeff Robbins said, "It's considered a fee, not a tax."

Another option is a street impact fee that would be charged with building permits. Robbins said impact fees must be used to offset the impacts of new development, "so it could be hard to use for existing roads."

But he also said, "It could be used for indirect impacts of a development or the town as a whole." It can't be used for existing deficiencies not tied to the development.

La May said it could be used to add a lane on a busy road, versus sand seal maintenance. He said a 2007 fee impact study put the appropriate road impact fee at just over $4,000 for a single family home.

Nelson worried that might discourage future development.

Smith wanted more staff research on this one. "If development puts a strain on existing infrastructure, there has to be a way to pay for that," he said.

Nyberg agreed with Nelson. "It might impact the one thing we are wanting," he said.

Salka added, "It should be looked at, but my worry is I want development, more residents."

La May agreed it could affect affordability, "another $4,000 before you break ground."

Smith asked La May to find out the cost to update the 2007 impact fee study.

Another option is overweight vehicle fees. La May said compliance and enforcement would be the issue. He suggested and the board agreed to table this one for now.

Other options include permit fees for work in town right-of-way, higher fees for participants in town recreation programs, and higher fees to rent town facilities.

Trustees treated the storm water drainage as a separate issue. La May said the state average residential fee is $6.01 per month. Non-residential properties are charged on average $1.30 per square foot of impervious surface such as roofs and paved surfaces. Town staff would have to spend time determining that area, La May said.

Trustees supported the drainage enterprise fee. Davenport said, "It's part of our infrastructure that we need to take care of."

La May said he was advised that when local governments seek state grants for drainage infrastructure, the question is, do you have this fee.

That got back to marijuana businesses. Trustees were still split.

Trustee J.J. Sanders wanted to know what it might take to get residents to come to a meeting to talk about the sales tax increase that trustees still want.

That meeting will be Tuesday, Feb. 3, at 6 p.m. before the regular town board meeting.