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The Broomfield city limits signs on the east side of the city.
 (Cliff Grassmick/Staff Photographer)
The Broomfield city limits signs on the east side of the city. (Cliff Grassmick/Staff Photographer)
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Broomfield voted on three issues at it’s Tuesday council meeting, sending one to the November ballot and two to a July 28 public hearing and second vote.

Oil and gas

Broomfield unanimously approved amending language of Broomfield’s Home Rule Charter regarding accessing minerals on open space.

If the amendment passes, the revision would remove the exception for extraction of minerals so extraction would be considered a change of use of open space, according to the city. It would make the use of open space for extraction subject to the same procedures as other changes of use.

Broomfield resident Elizabeth Moura urged council to let voters decide on the issue. She felt the existing exemption is “kind of deceiving to taxpayers.” When voters choose to commit taxpayer money to obtain open space, they think it’s going to be protected for future generations.

On April 16, 2019, Gov. Jared Polis signed Senate Bill 19-181, which gave more regulatory authority to local governments over oil and gas operations. As a result, in May council passed an ordinance that revised the Broomfield Municipal Code regarding zoning for oil and gas development. It limits oil and gas developments to certain districts, established a 2,000 foot setback from properties, including residential lots, and prohibits oil and gas development on open lands, open space and parks.

This would make the charter consistent with council’s previous decision to amend the municipal code to prohibit oil and gas development in open space, City and County Attorney Shaun Sullivan has said.

The proposed revision was presented to Broomfield Open Space and Trails Advisory Committee on Feb. 27, Sullivan said, and members gave the charter amendment their unanimous support.

Marijuana

After a failed substitute motion, which would have included asking Broomfield voters if they wanted to allow recreational marijuana sales in Broomfield, council unanimously backed sending a marijuana sales tax and excise tax for cultivation to the November ballot on first reading.

A public hearing and second vote will be held July 28.

The first proposed a 4% sales tax on recreational marijuana, in addition to Broomfield’s general sales tax, and authorized council to raise it by 10% in the future without an additional vote of the pubic. Money raised through the tax would go to Broomfield’s general funds, but with an emphasis in permitting the revenue to go toward Broomfield Health and Human Services, Assistant City and County Attorney Courtney Thiemann said.

The second question was a 5% excise tax on the first sale, or transfer, of marijuana from a cultivation facility to a retail manufacturer or store.

Finance Director Brenda Richey estimated that, for five retail shops, the extra sales tax could result in $2.2 million the first year. According to the city’s memo, projected tax revenue for the excise tax revenue is $183,000.

Ward 2 Councilwoman Elizabeth Law-Evans had no opinion on the ballot language, but was “very concerned” about what she felt was a lack of public input as to whether or not recreational marijuana sales should be allowed.

A current ban on marijuana sales, cultivation and manufacturing automatically sunsets on Feb. 1.

Law-Evans proposed a substitute motion that would include both questions — one on the tax and another on whether to allow it at all.

“It’s been noted in past discussions that when retail sales ban was put in place by a previous council, that council did not put the question on the ballot,” she said. “It’s true, however council did take public comment on that question.”

This council, she said, has taken no public comment “at all” on whether to allow retail sale. The issue has instead been discussed at study sessions where a straw poll was taken, but no public input received.

“I have a real problem with that,” she said. “We cannot determine anything at a study session without public comment and proper notification. We haven’t heard from the public on this.”

Mayor Pro Tem Guyleen Castriotta disagreed, saying council has received email input during the meeting and that the first reading was publicly noticed.

“This is an opportunity for public comment,” she said. “I don’t see any difference. If voter input is so important, it should have been so important when you passed the moratorium.”

Law-Evan’s motion failed 6-3, with Councilwomen Kimberly Groom and Laurie Anderson also voting in favor.

Revenue stabilization

Council also passed, on first reading, an ordinance to put a ballot question to voters concerning a de-Gallagherization measure.

The question that will likely go to voters concerns a change in the city’s property tax mill levy to stabilize revenue in the event of a change to the residential assessment rate due to the Gallagher Amendment. It would be in addition to the state ballot initiative that will allow all Colorado voters to decide whether they want to make a major change in the state’s approach to taxes by repealing the Gallagher Amendment.

If approved by voters, the Gallagher repeal would keep residential property tax rates from dropping in future years, saving schools, local governments and the state from taking huge financial hits as a result of the coronavirus-induced recession, according to the Denver Post.

In a June 16 study session, Broomfield Assessor Sandy Herbison went through potential scenarios to consider when looking to stabilize the city and county’s revenue.

For Broomfield to maintain the same level of revenue if the residential assessment rate declines because of Gallagher, and under the The Taxpayer Bill of Rights (or TABOR), Broomfield must ask voters to authorize the local government to make future mill levy changes without a vote of the people.

A mill levy is a tax rate that is applied to the assessed value of a property.

The Gallagher Amendment was adopted in 1982 and requires 45% of the total amount of state property tax come from residential property and 55% from commercial property. The Colorado Constitution sets the commercial assessment rate at 29%, with the residential assessment rate fluctuating annually to maintain that 45/55 ratio.

The Colorado Legislature determines whether the residential assessment rate changes every other year on the odd year. Although the residential assessment rate can fluctuate, the residential rate has only gone down since 1982. It started at 21% and currently is 7.15%.

Residential property accounts for 75% of the state’s total property value, yet only pays 45% of the tax value because of Gallagher, according to the state. In Broomfield, residential property accounts for 80% of the total property value, and the assessed value is 50% of the total assessed value.

If council took no action, the residential property tax assessment rate is reduced because of Gallagher, and the city could see a loss of revenue despite an increase in residential property values, according to a June 16 council memo. Cost savings measures and service cuts may be necessary in order to balance the Broomfield budget.

Officials looked at data that showed the current residential assessment rate of 7.15% dropping to 5.88%, which was the estimated rate based on assumptions made by State Property Tax Administrator Joanne Groff.

According to a graphic created by city staff, Broomfield could lose about $4 million in revenue. Herbison said that projection is based on assumptions by Groff, who was asked by the Joint Budget Committee to give legislators an estimate of the residential assessment rate in 2021.

Groff estimated the rate would drop down to 5.88%, resulting in the millions in revenue lost, if three things happened: oil and gas drops 36% in assessed value; commercial drops 10% in assessed value and residential increases 10% in assessed value.

It is impossible to predict what will happen, Herbison said, but the 5.88% was based on all three of those things occurring.

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