Use of Lodging Tax for the CHA, and Surprise Public Comment on an Executive Session Agenda Item
Following a lengthy discussion during its January 31 special session the Chaffee Board of County Commissioners (BoCC) finally made a motion that will allocate up to 60 percent of the county’s annual lodging tax to the Chaffee Housing Authority (CHA) for the next few years. It was not their first conversation; the Chaffee Housing Authority made an earlier presentation to the BoCC outlining the uses of lodging tax to formalize their request and outline the uses for funding.
As BoCC Chair Keith Baker noted, “We want to be sure the public is comfortable with our decision based on what they voted on. We also want to have some flexibility to take advantage of opportunities that may occur.”
Executive Director of the Housing Authority Becky Gray made a presentation, which had been developed jointly by the CHA and county staff noting that this was the latest session in a year-long conversation requesting reallocation to CHA operations.
She noted that 2024 is the end of the intergovernmental agreement (IGA) underlying the CHA, which since 2021 has had an operating budget of $185,480. “We’ve secured additional grants for Jane’s Place (the total cost is estimated “heavy” at $6.1 million) and during this time we have set up the structure of a housing authority and set up partnerships regarding how to handle homelessness,” explained Gray, who added that they are waiting for a housing grant of $1.3 million and have already raised $2.3 million.
Gray said that nearly a dozen banks have already responded to the request for a proposal for financing, but that the CHA does face TABOR rules and can’t take on additional debt. All Jane’s Place rents will be capped at 80 percent AMI (average median income) and the challenge is securing Jane’s Place lease purchase financing.
“Setting up dedicated funding to the CHA from the lodging tax will allow us to set up lease purchase financing and secure a continued operating budget for CHA activities,” said Gray, who explained that Jane’s Place has to be subsidized “because low-income housing is subsidized … vouchers make the rent affordable.” She said the CHA board is looking at adding more diversity to the board, but noted that each jurisdiction appoints its board members, the CHA does not. “Anyone is welcome to apply. We also have committee structures for governance, development, finance, and community engagement … and those are great places to begin to get involved.”
“I think I can see a path forward with this funding,” said commissioner P.T. Wood. “It’s difficult because it is a flexible funding source [meaning the lodging tax revenue].”
“This is an up to 60 percent — it is not a guaranteed 60 percent … if we hit a bad year, we have to be mindful that it might not always be there,” said Baker. He asked for and received an assurance that the Jane’s Place project still continues to pursue other funding resources.
The CHA would apply lodging tax revenues committed to it, first to debt service then to any operating expense beyond the $185K operating budget. The remainder would go into a fund balance to apply toward future housing projects.
“Until we have more diverse funding, like adding fees for services, the need will be there,” said Gray. “We won’t need it forever — let us get this off the ground.”
The Chaffee County EDC (Economic Development Corporation) supports policies for sustainable revenue sources for housing. “On behalf of the EDC Public Policy Committee, we support Jane’s Place and any project that brings new units to market … this is an important project to get CHA that early win to build confidence in CHA, said EDC Director Jake Rishavy.
“This is a significant multi-year funding commitment – this makes it a big deal for us … we’re talking about one percent of the units in terms of the shortfall – this needs help to get over the finish line,” said Commissioner Greg Felt. “We want to encourage bigger thinking [to address] the 1,100 unit shortfall of housing … what P.T. says is very true about our ability to make long term decisions because of TABOR … despite all my hard questions I do feel it’s really important to get this project done. I don’t see phasing it as an option. As Reed [McCulloch] said, it takes a long time to get the momentum going.”
“I’ve heard some concern that committing this to Jane’s Place might preclude working on other projects, but I think it actually reinforces the effort and will open the doors for other projects,” said Wood.
“Is there an implied understanding that we seek municipal partnerships to come alongside this?” said Baker. This illustrates that to work on these big problems you have to start early and work hard,” said Baker. “Some voices (like Reed’s) saying 20 years ago this is a big problem and we need to get on it. This can be a model start toward bigger things to create housing for a workforce we all depend on. I agree there is some risk involved, but nothing great happens without some risk.”
In the end, Felt made a lengthy motion to approve the CHA lodging tax usage request:
“I make a motion to amend the 2023 budget and allocate $260,000 in 2023 to the Chaffee Housing Authority, for support of Jane’s Place and potential operating expenses as presented, and I would also like to frame our intent to allocate $350K lodging tax in 2024 and 2025 and $300K in 2026 to 2030,” said Felt. “I would also like to express our intent to negotiate with Salida, and Buena Vista and the door is always open to Poncha Springs, to extend the existing IGA through 2024, and to signal our intent to renew that IGA with those municipalities to carry forward beyond 2024, and direct staff to draft a resolution that realizes both the decisions for the $260,000 for this year and our intent for the future.”
Wood seconded the motion and it passed unanimously.
This left the recently-added executive session, called by the BoCC so they could get an update from the Chaffe Department of Human Services Director Monica Haskell and Chaffee Sheriff John Spezze regarding their actions related to the closure of The Schoolhouse in Poncha Springs.
Baker said that the BoCC has received significant written public comment, but that he had decided to exercise the chair’s discretion and accept public comment on this subject only to people who had not submitted written input.
There was no public comment received based on that request; which isn’t surprising since it had not been announced to the news media or the public so that they could be informed of the option.
The BoCC announced that it would make no decisions once it exited the executive session.