Berthoud Parks and Recreation Bonds

Issue 3G lets the Town of Berthoud borrow $28,000,000 in sales and use tax revenue bonds, with a maximum repayment cost of up to $60,000,000, and repay them from all or part of the town's sales and use tax, "without increasing taxes." The town's sales and use tax totals 4.0%, and the question leaves that rate unchanged. The bonds may pay only for parks and recreation purposes, "including but not limited to" the design, construction and equipment of Mountain Vista Park, a community park site with ballfields, aquatic recreation features and related improvements.

Town Administrator Chris Kirk said he believed the town could service the debt from its 1998 1% sales tax and 2019 1% sales tax. Staff name those two funds as the primary repayment sources. Their projection includes future inflation adjustments to current spending, a larger construction transfer in 2026, projected park revenues and expenses, and debt service; under those assumptions, they expect both funds' reserves to grow. In that projection the 1998 fund also pays for street improvements, sidewalks and a transportation transfer, and the 2019 fund pays for operating the Berthoud Recreation Center.

The notice of election gives the maximum annual repayment cost as not to exceed $2,200,000. Staff told the board the $60,000,000 cap sits above their $54,000,000 debt service estimate. Staff do not expect debt service to reach the cap, which allows for interest rate increases through the months after the election. The question sets no repayment term and leaves the timing, prices and other terms to the Board of Trustees. Investment earnings on the proceeds, in any amount, and the money that repays the bonds become a voter-approved revenue change, outside the revenue and spending limits of the Taxpayer's Bill of Rights (TABOR) or any other law.

For months the board considered financing the park with certificates of participation, which need no public vote. On August 11 it voted 6-1 to ask voters for bonds instead. Mayor Pro Tem May Soricelli-Albrecht voted no, concerned that the park had no backup plan if the measure failed. On August 25 trustees worried the draft language might not make clear that taxes would not rise. Bond counsel suggested adding "(without increasing taxes)," and the board adopted Ordinance 1390 with that wording, 5-0. In the ordinance, the board says it does not expect existing revenue to build the park in the near future without borrowing.

In November 2018 Berthoud voters approved Ballot Issue 3I, 51.6% to 48.4% in Larimer County's count. It raised the town sales and use tax by 1.0% from January 1, 2019, with the revenue kept in a separate fund restricted to parks and recreation. On the same ballot they rejected Ballot Issue 3J, 54.0% to 46.0% in that count: $30,000,000 in sales and use tax revenue bonds for parks and recreation, with a maximum repayment cost of $59,000,000.