The Cortez Recreation Center hosted an open house on Tuesday to discuss an upcoming ballot issue that could affect its revenue.
Cortez plans to put a question on the April 3 ballot asking residents to continue the sales tax that funds the rec center past its planned sunset date of Dec. 31, 2021. The draft ballot question would reduce the tax rate from 0.55 percent to 0.35 percent, but would not specify a sunset date. A group of volunteers called Citizens for Recreation organized the open house and gave several presentations on the ballot issue throughout the day.
The current sales tax was approved by voters in a bond election in 2001, and helped fund the rec center’s construction. The debts the city incurred during construction will be paid off in 2021, but Deb Berger, treasurer of the Citizens for Recreation, said the building will still need the extra revenue after that.
“The rec center was never designed to be self-supporting with just the fees,” she said. “It needed to be supplemented with sales tax.”
Right now, 5.5 cents out of every $10 spent at a Cortez business goes to support the rec center. If the ballot question passes, that amount would be reduced to 3.5 cents per $10 starting in 2022.
Joye McHenry, the rec center supervisor, said its average annual expenses total about $962,500, while its average annual revenue is about $517,000 without the sales tax, based on estimates from the past eight years. Starting next year, the city plans to undertake several major repairs on the building, like replacing the heating, ventilation and air conditioning system and repaving the parking lot.
McHenry also noted the building’s personnel costs are going up with the increased state minimum wage.
Since it was passed, the 0.55 percent sales tax has brought an average of more than $1.2 million to the rec center annually, out of which $690,000 has gone to loan payments every year.
Once those payments stop, McHenry said the center would receive about the same amount of money from the reduced tax rate as it does now, if the ballot measure passes.
If it doesn’t pass, she said the city may have to consider reducing the center’s business hours or making other cuts to cover the loss in revenue.
Daily admission fees to the center range from $3.50 for children ages 5 to 12 to $5.50 for adults, which McHenry said is comparable to other recreation centers in the region.
The annual passes, which range from $144, the most expensive pass for a child, to $468 for a family of four or more, are significantly cheaper than many of those in other towns. At the Durango Recreation Center, for example, a child or teenager would pay $215 for an annual pass, and a family with two adults and two children would pay $550.
McHenry said many other recreation centers in the Southwest are subsidized, whether by sales tax or a mill levy.
The ballot question, in its current form, specifies that funds raised through the reduced sales tax can only be used for “the operations and maintenance of the family recreation center or ... any capital improvements or additions to the family recreation center,” a point McHenry and the other presenters stressed throughout the presentation.
In the November election, a bond measure for the Montezuma-Cortez RE-1 School District failed after several voters complained that it wasn’t specific enough about how the revenue would be spent.
About a dozen people attended the first presentation of the day, and volunteers handed out fact sheets and copies of the ballot question to visitors all day.
Several audience members asked questions to clarify what the ballot question would do and who would be able to vote on it. One man said he was concerned about the question’s lack of a sunset date. As written, it would allow the sales tax to continue indefinitely. McHenry said the city would take those concerns into consideration.
“The ballot question hasn’t been set,” she said. “It hasn’t been approved by city council yet, and that’s why we’re doing this community outreach.”
Berger said the Citizens for Recreation plan to give more presentations on the issue to Cortez voters’ groups during the next few months. The council must vote to approve the ballot question’s wording before it can go to the voters in April’s municipal election.