The Town Council is considering a ballot question for the November 2017 election regarding sales tax. As you are aware, a question was on the November 2016 ballot that would have raised both the Timnath sales tax and expanded the use tax and the measure failed. In listening to residents about why it failed, we heard two concerns. First, Council decided late in the election season to place it on the ballot so there wasn’t as much communication with residents as there should’ve been as to why it was on the ballot, and how the tax could help meet the growing needs of our community. Second, residents shared they were not sure they understood how the use tax increase would be implemented so they were understandably reluctant to support that piece of the ballot question.
The Town is growing rapidly and our infrastructure, parks, streets, and other community events and development funding needs have not decreased since last year’s election. In fact, our growth has actually increased those needs. We have listened to residents and heard their support of our Town of Timnath vision. They have voiced their desire for the Town to move forward with prioritized project needs that continue to make Timnath a very special place to live.
Therefore, we are considering placing a modified question on the ballot in November regarding sales tax only, not use tax. This is so important for funding our future that we want to make sure we have good dialogue with residents and share with you what the funding needs are and how the sales tax could help solve some of them. We also need to hear from you so we can make a decision as to whether we should place it on the ballot, and in the event we do, we want to make sure that you have a solid understanding of these needs so you can make an informed decision in November.
Attached please find a list of some anticipated questions and answers regarding this very important issue. Included in this is a list of some of the projects that this sales tax increase will fund. We’ve also attached a separate, more detailed list of what we have spent to date on a variety of projects for the benefit of your community.
As you can see, we have significant anticipated capital expenditures of over $82 million over several years. These are projects that residents themselves have said are important for our quality of life and that they want to see built. These projects also include special events that build a sense of community and should be continued. As our needs continue to grow, finding alternative sources of revenue is a critically important responsibility of the council if we’re to continue to build the community our residents expect and deserve, and we take that seriously.
As mentioned above, we are considering a sales tax only ballot question. Under consideration is raising the general sales tax from 3.0% to 4.3% and the grocery tax from 2.25% to 3.55%. This represents a lower tax increase than was proposed in 2016 and there is NO consideration of a use tax expansion. The increase we are discussing would put us at a rate on par with other similarly situated surrounding communities that are fast growing and have the same kinds of infrastructure needs that come from being situated near major traffic corridors. If approved, this measure would raise an estimated $17.8 million dollars over the next five years, enabling the majority of the projects referenced above to be built or be well under way in that time period. These dollars are expected to be generated in large part by visitors to Timnath who shop at Costco and Walmart. It is important to note that we conservatively estimate that over 90% of the total shoppers at Costco alone reside outside of Timnath, yet the sales tax they pay will help us fund a very large percentage of our infrastructure needs.
In order to obtain public input and facilitate community dialogue about this potential proposal, we are planning on several Resident/Council Member coffees to discuss the issue. Below are the dates, times and locations for these discussions. We hope you can attend one as this is a critically important issue for our community.
If you have additional comments or questions, please don’t hesitate to contact April D. Getchius, Town Manager at email@example.com or by phone at 970-224-3211, myself, or any member of the council. Thank you and we look forward to seeing you at the coffees.
Mayor and on behalf of Council
|Coffee Date||Time||Location||Hosted By|
|July 27, 2017||6-7 pm||The Pavilion at Harmony Club|
4176 Club Drive, Timnath
|Town Council Members|
|August 5, 2017||10-11 am||Fire Station 8|
4800 Signal Tree, Timnath
|Town Council Members|
|August 15, 2017||10-11 am||Summerfields Community Center, 6000 Summerfields Pkwy., Timnath||Town Council Members|
|August 17, 2017||5-6 pm||WildWing Subdivision|
3065 Laminar Drive Timnath
|Town Council Members|
FREQUENTLY ASKED QUESTIONS
- What sales tax rate is the Town Council considering?
- The Council is discussing increasing the general sales tax from 3.0% to 4.3% and the grocery for consumption at home tax rate from 2.25% to 3.55%. No expansion in use tax is being considered. The county and state tax will not change.
- How does the proposed tax rate compare with other areas I shop at?
- Below is a table that shows the aggregate tax rate for various shopping areas and the sales tax you pay compared to the proposed Timnath tax rate.
|Shopping Area||Effective Sales Tax Rate*|
|2534 (Johnstown/Scheels area)||9.31%|
|Front Range Village on Harmony||8.18%|
|Windsor, Larimer County||7.50%|
|Windsor, Weld County||6.85%|
|*Includes all sales taxes and applicable public improvement fees, retail sales fees. All rate comparisons are based on non-food purchases.|
- Why is the Council considering any tax increase?
- The need for improvements such as streets, parks, trails, etc. continues to require significant expenditures, again over $82 million over the next several years. Finding new revenue sources that have a minimum impact on our residents is the best avenue for our residents.
- Most of these sales taxes will be paid by visitors to Timnath who shop at Costco or Walmart. As noted earlier, over 90% of the shoppers at our two largest retailers come from outside of Timnath. This tax measure would ensure that they pay their fair share of street improvements, as increased traffic is in part why we need Harmony widened. Increased visitor activity as a result of the Rocky Mountain Sports Park is also expected to increase our number of “visitor shoppers”, and again they will be paying for a large share of the improvements needed to support the traffic increase they will produce.
- Beyond the physical improvements, tax dollars also pay for our community events like the Town BBQ, 4th of July Celebration, Taste in Timnath, Summer Concerts and more. These events help build our sense of community and our identity as Timnath residents, and make this a special place to live. We want to continue to offer these types of events, and not have to choose between a street that needs to be widened and an event that creates community.
- A sales tax increase has less impact on our residents than property taxes because it is shared by those who come to shop here from outside Timnath and use our roads. If passed, this tax would still be less than you pay in taxes today at Front Range Village, right down the street, but those taxes don’t benefit Timnath at all.
- What will the increase mean to shoppers?
- Example of increase on a $100 purchase:
|Purchase Amount||Non Food/Food||Current Tax*||New Tax*||Increase Amount|
*Includes County and State Sales Taxes
- What kind of projects will be paid for from the proposed sales tax increase?
- Below is a summary of just some of the key projects, what we’ve spent to date and what the next phases will cost:
|Project||Spent to Date||Cost of next phase|
|Timnath Reservoir Trail and Park||$1,207,000||$3,820,000|
|Town Administration Building with Community Space||Minimal on design||$3,600,000|
|Timnath South Regional Park||$2,900,000||$2,820,000|
|Ongoing Lease for Timnath Reservoir||$115,000/year||$115,000/year|
|Three Bell Railroad Quiet Crossings||None||$500,000|
|All Special Town Events
· July 4th Example
- Why can’t we fund these improvements without raising taxes?
- The Town Council has accomplished a great deal within the resources available to the Town (please see attached list of capital improvements from 2010 to 2016). We have tried to leverage responsibly to ensure funds are used wisely and effectively.
- However, without the additional sales tax revenues, the Town will be committed to trying to meet our needs but it will need to happen at a much slower pace commensurate with our income as our growth increases. It will also require tough decisions on prioritization of needs and delay of projects, parks, or reducing the community events.
- Timnath is unique in many ways but one of the ways is that we are one of the fastest growing communities in the state. Our residents come here because of the specialness of Timnath and we want to continue to meet all those needs as quickly as possible for residents to enjoy. For example, in a typical town of our size, Harmony wouldn’t be widened maybe for many years until the Town’s property tax base could cover the expense, but our residents want this road widened now for comfort, and because it is one of our major corridors. Similarly, in a typical town of this size, the north south Parkway also would wait but our residents in Old Town want traffic diverted so we are trying to find a way to build it sooner in response to the desires of those constituents. This sales tax increase would give us those dollars now, and they would be paid for mostly by visitors, rather than waiting for more homes to be built to support those projects.
- How much money will be raised by the tax increase?
- We estimate that the increase would raise an additional $17.8 million over the next five years. This will move us very far forward in meeting all of our capital needs over the next five years so that we don’t have to reprioritize and can move forward with the projects our residents have told us are important.
- These estimates are based on our current projections with regular growth. However, with the construction of the Rocky Mountain Sports Park in Windsor (to be opened in fall 2018), just 1.5 miles east of Timnath on Harmony Road, and nearly 100,000 guests visiting the Sports Park per year, we expect our center at I-25 and Harmony Road will be a shopping focal point for these families and our estimates are likely to grow beyond current projections.
- If I have more questions who do I ask?
- Again as noted, please contact Town Manager April Getchius, the Mayor, or any council member, and they will be happy to discuss or answer any questions you may have.
- What happens next?
- If after dialogue with residents the council decides to place the question on the November ballot, it will be an election question for you to vote on in November. Only Timnath residents would vote on this issue, and Timnath residents would decide.