In an effort to check the box for seeking public input on ideas for reducing Loveland’s growing budget deficit next year of $3 million, city staff ran into trouble. Despite best efforts to control the outcome, community participants in a city hosted forum pointed to Loveland’s inequitable tax collection between Centerra and the rest of the community as an area that needs work. see story
Especially discrediting to the city’s “citizen engagement” effort was the presence of former McWhinney VP Rich Shannon who attended all three meetings and voted quietly alongside Loveland residents. A Ft. Collins resident, Shannon works for the Pinnacle Group that is closely tied to McWhinney by managing its metro districts and other special taxing districts.
Not surprisingly, Shannon was reported to favor raising taxes in Loveland through a special tax district to solve the looming budget deficits in future years. That really shouldn’t be a hard choice for Rich Shannon to make. His company stands to profit from the establishment of more special taxing districts while the home he owns in Ft. Collins will never be impacted by the additional taxes he wants Loveland residents to pay.
The current budget deficit is an artifact of the 2004 Master Financing Agreement (MFA) between the City of Loveland and the McWhinney family members who inherited property on I-25. The agreements give McWhinney’s metro districts hundreds of millions of dollars in future sales taxes and also property tax generated in Centerra. Over the past 7 years McWhinney has been largely successful in amending the agreement to reduce or eliminate its obligations to provide public services or regional transportation improvements as contemplated when the deal was first advertised in Loveland.
As Centerra grows, so does the number of people requiring basic government services from Loveland but not necessarily paying the taxes to fund those services like police, fire, street maintenance and parks and recreation.
An easy way to understand the impact is if a restaurant hands out too many 50% off coupons it eventually goes broke. If only 10% of diners pay with a discount coupon the business can manage cash flow easily by subsidizing the discounted diners from profits earned from regular customers. But if the coupon is good for 25 years (like Centerra’s) perpetually and discount diners become 30% or more of all customers every night there will be trouble. Like Loveland, the restaurant would be forced to either reduce services or raise prices to keep pace with the growing number of discount diners.
It is unlikely the current council will muster the political will necessary to take-on a powerful special
interest like Centerra/McWhinney so it is easier to raise taxes on everyone else or further reduce city services. That means the McWhinney tax discount continues while the rest of Loveland is asked to live with less government services or pay higher taxes to make-up the growing budget deficit as Centerra grows.
Allowing Rich Shannon into the so-called citizen input process itself was grounds to dismiss the effort as farcical. But when the advice from the majority of authentic Loveland residents and taxpayers was ignored, tempers flared. The citizen’s list of remedies were simple and direct. Define the role of local government and what must be funded, revisit the Centerra tax inequity problem by having the metro districts pick-up some authentic government services in Centerra and eliminate annual funding for the council’s slush fund known by its euphemism of “Council Reserve.”
On March 22, the Council will have the opportunity to consider the public’s real input to the sessions or instead stick with the carefully manipulated limited choices provided by staff.
