Image: 2022 artist rendering of the proposed Archuleta County Administration Building.
At the conclusion of an Archuleta Board of County Commissioners’ work session on January 14, I heard Commissioner Veronica Medina makes some comments that gave me hope for a better future.
Only a slight ray of hope. But hope, nevertheless.
Commissioner Median was referring to the BOCC’s plan to fund and construct a new, multi-million-dollar ‘administration building’ at some point in the next couple of years. Sitting at the work session table with her was Commissioner Warren Brown, just beginning his second term in office, and newly-seated Commissioner John Ranson, along with County Attorney Todd Weaver and County Manager Jack Harper.
Commissioner Medina referred to “COPs”. Certificates of Participation.
“I absolutely do not want us to look at only doing a COP. I don’t think a COP benefits our community. I don’t feel like it encompasses, or fosters, engagement from our community. I feel like it’s the total opposite…”
For any readers not familiar with “Certificates of Participation”… it’s a financing tool commonly used by Colorado governments, to fund large capital projects.
A harmless sounding tool, one might say. Why would anyone be opposed to a “certificate” that involves “participation”?
Colorado is fairly unique among the 50 U.S. states in having a specific section in its constitution commonly referred to as TABOR — the Taxpayers Bill of Rights — added to the constitution in 1993 by a majority vote of the state’s electorate. TABOR places certain limitations on government spending and revenue collection, and it also requires voter approval for any new or increased taxes.
TABOR is despised by some who work in government, because it also requires voter approval for long-term government debt — for loans lasting longer than one year.
The idea behind TABOR was to protect taxpayers from unreasonable debt burdens, caused by reckless spenders in government positions.
But governments, and the banks and investors that work hand-in-hand with them, developed a clever financing tool called “Certificates of Participation” whereby the bank or investment team funds the new building or infrastructure out of their own pocket, and then “leases” the building or infrastructure back to the government entity until the investors have collected the equal to the principal and interest the investors would have earned with a traditional loan — at which point, government entity owns the building or infrastructure.
For all intents and purposes, this is a “long-term debt” — the kind for ought to require TABOR approval — but the Colorado courts have ruled that this “lease/purchase” scheme is not a “long-term debt” because, in theory, the government entity could stop leasing the building and walk away. So courts have allowed COPs to be created without any participation from the voters and taxpayers.
The Archuleta BOCC used COPs in 2019 to finance their oversized Detention Facility (County jail) after the voters rejected the project, twice.
And this lack of community buy-in and approval is presumably what Commissioner Medina was referring to, when she said she felt like COPs are “the total opposite” of community engagement.
Yes, a COP is convenient, in the sense that there’s no need to “sell” the project to the voters and get their approval. But COPs have a hugely negative impact on the government entities finances.
When voters approve a revenue bond, they also approve additional taxes to pay for the project. But when the BOCC used COPs to build the jail, they created no additional revenue to pay back the loan. So the annual payment of principal and interest must now be taken from other County departments. In particular, in the case of the County jail, a portion of the money was redirected away from the Road & Bridge Department. The County is paying about $816,000 per year on the jail COPs — for the next 20 years. The payments for the jail began in 2019, and will ultimately total about $20.6 million.
$20.6 million diverted from other County needs… for a facility that could have been built for less than $10 million? This didn’t have to happen.
Commissioner Medina:
“Commissioner Brown was part of [approving the jail COPs] and he saw the negative impacts that came back from the community. The understanding of why we needed a jail, and all that, was a part — but I think we can do better. And I think we need to explore different options, and not just the COPs.”
She then referred to the report on potential property purchases, delivered by consultant Troy Bernberg in mid-December, which highlighted a vacant parcel in Aspen Village as the best location for a new administration building.
“I stated it then, and I’ll state it again — I was not impressed by that consultant. Maybe that task was simply out of his wheelhouse, but Commissioner Ranson or myself could have done the same darned thing that he presented to us. I can do property evaluations all day long.”
We note that Commissioner Medina is a licensed realtor, and Commissioner Ranson has a background in public finance.
“So I was definitely not impressed with what he brought forward. And it was definitely not what I had requested. So I was very disappointed in that.”
I have to agree with Commissioner Medina. I was likewise disappointed in Mr. Bernberg’s presentation in December.
But I’m not sure what she means by “explore different options” for funding a future County admin building. There’s only one other option that I’m familiar with, that doesn’t require the BOCC to divert revenues from Road & Bridge and the rest of our County departments:
A voter-approved bond issue. Something requires a compelling presentation to the voters, and something that requires a well-managed election campaign.
Things that the County has regularly shown itself incapable of.
Read Part Two, tomorrow…