Regional REALTOR®overnmental Advocacy Update 8.8.2011

Larimer County

Commissioners Put Jail Tax Extension on Ballot

House District 49 Boundary May Change

Thompson School District Considering Tax Measures for Nov. Ballot

Status of Louisville Research Park Unclear

FasTracks Project Receives Funding for 36

Municipal Utility Added to Nov. Ballot

City Council Gives Preliminary Approval to Campaign Finance Resolution

Candidates Emerging for City Council Race

CREC Amends CE Rule

Foreclosure Rates Drop

Education Tax Proposal Gaining Supporters

MID Facts

Impact of the Debt Ceiling Decision on REALTOR® Issues

Larimer County

Commissioners Put Jail Tax Extension on Ballot: Larimer County Commissioners have given tentative approval to place a 0.375 percent sales tax extension for the November election ballot to finance county jail operations. The 15-year tax extension would replace two existing 0.2 percent sales taxes set to expire in the next few years, and it would help the County avoid taking money from other sources to pay for the jail.

The sales tax extension would bring in about $14 million per year. It is projected to pay for 44 percent of jail operation costs through 2021, with the remainder paid through fees and the County's general fund. The tax extension would cost $3.75 on a $1,000 purchase. It would replace two current taxes that total 0.4 percent, or $4 per $1,000 purchase.

Voters approved both of the existing taxes in 1997 to fund construction at the jail and courthouse. One of the taxes is scheduled to expire in 2012; the other would end in 2014. Polling by the County found broad voter support for combining and extending the taxes to support public safety. An official vote on the ballot item's language is expected at the commissioners' Aug. 23 meeting. Note: Loveland REALTOR® Kurt Albers is the chair the committee which will campaign on behalf of the ballot question.

House District 49 Boundary May Change: The State House District that now encompasses unincorporated Larimer County and Windsor might look very different if the Reapportionment Commission's recommendations are approved.

Reapportionment is the process of redrawing the boundaries of state legislative electoral districts to reflect population changes that result from the mandated decennial census results. The "one person, one vote" mandate requires the Commission to achieve equal population among the districts, and the Colorado Constitution defines this mandate as no more than 5% deviation between the most populous district and the least populous district.

The proposed map released by the Commission adds Jackson County to the House District 49, in effect doubling its geographic size. The proposal also removes Windsor from the district. The Commission is now traveling the State taking public comment. On Sept. 5th the preliminary plan for reapportionment will be published; it must be finalized by Oct. 7. Then it will be submitted to the Colorado Supreme Court for review. If the Court approves the proposed plan, it must be filed with the Secretary of State on Dec. 14. Note: County Commissioner Steve Johnson said he has not followed the issue closely but agreed that the proposed plan for HD 49 did not seem to serve the interests of citizens in incorporated Larimer County. The two counties have different demographics and it is difficult to see how one representative could represent such a large and diverse area.

Thompson School District Considering Tax Measures for Nov. Ballot: It appears that the leadership of the Thompson School District may ask voters to approve a $12.8 million mill levy override (MLO) and $36 million bond measure. School Superintendent Ron Cabrera says the MLO would help the cash-strapped district restore positions and services cut in the past two years, help retain staff who are being lured away to other districts by higher pay and pay for '21st century instructional needs.' The bond would pay for infrastructure needs such as new roofing, keyless entry systems and lighting.

A survey, which the District is utilizing to assess the public's support for the measures, will cost $30,000 to $80,000. The results will be available by the end of August. The District will make a decision on putting the MLO and bond measures on the ballot by the end of August.

Status of Louisville Research Park Unclear: ConocoPhillips, the nation's third-largest oil company, has announced it will split itself into two separate publicly traded companies and its CEO and that Chairman Jim Mulva will retire once the transaction is complete. This could spell trouble for ConocoPhillips's proposed alternative energy research park (the former StorageTek site) in Louisville. Mulva had championed the project, which was anticipated to generate 7,000 jobs at build-out.

FasTracks Project Receives Funding for 36: Major construction to widen a 10-mile portion of U.S. 36 between Denver and Broomfield should begin next summer. The redevelopment of U.S. 36 is progressing, as FasTracks funding sources have been firmed up, said the executive director of 36 Commuting Solutions, a coalition of governments and businesses seeking to push the project forward. A $54 million loan from the U.S. Department of Transportation's Transportation Infrastructure Finance and Innovation Act is on track to close in late August.

Including the grant, $310 million in funding has been identified, including $38 million from the Colorado Department of Transportation and $120 million from the Regional Transportation District. This will add a managed toll/carpool lane each direction from the Interlocken Loop exit to the existing express lane near Interstate 25 and build portions of the bikeway that will flank the highway.

The total cost of the widening the highway, building a bus rapid transit system and building the bikeway between Boulder and Denver is estimated to be $1.3 billion.

Municipal Utility Added to Nov. Ballot: The City Council approved detailed ballot language to ask voters for permission to create a new municipal utility. The final approval of Boulder's energy-related ballot questions will take place Aug. 16.

The measure would also authorize the City to issue bonds to pay for the start-up costs. A separate question would ask voters to extend a utility occupation tax that Xcel is now collecting from Boulder customers. That money would be used to pay for the expected $1 million a year that the City would need to cover legal and engineering fees associated with making the move to a municipal utility. The current utility occupation tax is a tax on Xcel's revenues collected from the sale of natural gas and the sale of electricity, which is then passed through to the customer. Business customers pay approximately 80 percent of the occupation tax.

The Boulder Smart Energy Coalition http://bouldersec.com/, a group of Boulder citizens and businesses, is supportive of the City's energy goals and aspirations but is concerned about the high risks and unknown costs of buying the electrical system and operating it as a City-owned utility. Interestingly, a survey conducted by the City indicated a majority of residents say using renewable energy sources is more important than cost. 70 percent of respondents favored the creation of a municipal utility. Note: Why is this issue noteworthy for REALTOR®?? For one, utility costs for Boulder property owners could increase markedly if these measures pass in November. In addition, it is reasonable to assume other municipalities, notably Fort Collins, could consider similar strategies because their climate action plans also emphasize clean energy and carbon reduction.

City Council Gives Preliminary Approval to Campaign Finance Resolution: The City Council voted unanimously to approve the first reading of a ballot question that would protest the Citizens United decision last year by the U.S. Supreme Court. That decision removed the government's ability to limit "independent expenditures" from companies to advocate on behalf of a candidate or issue. A corporation can also now establish a political action committee and make unlimited corporate contributions to that committee.

The national group called Move to Amend is trying to pass a constitutional amendment saying that corporations are not people and money is not speech. The Boulder City Council approved language that would recommend a constitutional amendment abolishing the rights of corporations to be protected as "persons." The Council decided not to move forward with language that would support specifically overturning the Supreme Court's decision.

The measure will face a second reading on Aug. 16. Putting the referendum on the Nov. 1 ballot could cost the City as much as $20,000, according to a memo from City Manager.

Candidates Emerging for City Council Race: Twelve potential candidates are gathering for five available City Council seats.

Mayor: Warren Bell will challenge Mayor Cecil Gutierrez. Gutierrez, a former band teacher, says his leadership helped the City obtain the coveted ACE park project contract. Bell took out a petition for the Ward 4 City Council seat in 2007 but never submitted it. In 2003, he ran unsuccessfully for the Ward 4 seat in a special election.

Ward I: Incumbent Donna Rice has not announced if she will run for re-election. Rob Molloy, who previously ran in the 2010 special election, is planning to try again. He said he wants to continue recent work in city development, such as the ACE project and revitalizing downtown. Molloy, who serves on the Loveland Planning Commission, is a landscape architect and owner of Planscapes.

Ward II: Incumbent Carol Johnson and challenger Mike Schoonover will vie for the Ward 2 seat. Johnson was elected in 2008 and during her first term in office led the charge for a voter-approved 3 percent lodging tax. Schoonover is a compliance technician who has lived in Loveland since 1996 and wants to become part of the process. He said he plans to run for City Council because "I'm tired of sitting on the sidelines and watching things go by."

Ward III: Businessman John Fogle, Steven Weber and incumbent Kent Solt all hope to win the Ward 3 seat. Solt wants to continue the work he has begun, including seeing the ACE project to fruition. He is an investigator with Keypoint Government Solutions. Fogle said his experience creating and growing four local companies makes him qualified to address finances and job growth within the City. The Loveland High School graduate is a computer and network consultant and owns Northern Consulting. He supports business and growth that pays for itself. Weber, a Loveland native, works as a cashier at Walmart. He believes two main issues that need attention are historic preservation and reducing the crime rate.

Ward IV: John Buck, Dave Clark, Tom Cooper and Ralph Trenary hope to replace longtime Councilor Larry Heckel, who has decided not to run for re-election. Clark, a local businessman, was elected to the council in 2004 and served until an unsuccessful bid for mayor in 2009. Trenary is a retired Army officer who has volunteered in Loveland schools and has served on the Loveland Citizens Financial Advisory Commission. Buck is a supervisor at Home Depot and describes himself as a fiscal conservative who wants to give back to the community. Little information is available about Cooper as of yet. Petitions are due Aug. 22, so it is possible more candidates will emerge before the deadline.

CREC Amends CE Rule: The Real Estate Commission recently amended Rule B-2. The rule pertains to continuing education. The amendment states that licensed brokers must satisfy the continuing education requirement before applying to renew an active license, to activate an inactive license or to reinstate an expired license to active status. Licensed brokers may satisfy the entire continuing education requirement through one of the following options:

a) Completing the twelve hours required by C.R.S. 12-61-110.5 (1) (c) and (2) required by this rule in annual 4-hour increments developed by the Commission and called the 'Annual Commission Update' course. Licensees choosing this option must complete an additional 12 hours of elective credit hours to meet the 24-hour total continuing education requirement during the license period.

b) A licensee may not take the same version of the Annual Update Course more than once. If a licensed broker takes more than 12 hours of the Annual Commission Update course during a license period, the licensee will receive elective credit hours for any additional hours.

c) Completing the Commission-approved 24-hour "Broker Transition" course.

Foreclosure Rates Drop: In the first half of the year, Colorado ranked No. 9 as far as its foreclosure rate, according to a national report released by California-based RealtyTrac. The report, which tracked all foreclosure activity from the initial filing until REO, also showed that Greeley was ranked No. 17 out of 211 metropolitan statistical areas tracked by the company.

In Colorado, foreclosure activity dropped by 14.7 percent from the first half of 2010. However, the overall country showed a 29.3 percent year-over-year decline. In Colorado, one out of every 84 homes were in some stage of foreclosures, compared with a national average of one out every 111. In Greeley, one out of every 49 homes were in some stage of foreclosure. In the Denver MSA, one out of every 52 housing units were in some stage of foreclosure.

Metropolitan Statistical Area	Half Year Foreclosure Filings	Percent in some state of foreclosure	1 out of number of units in some stage of foreclosure	National Rank	Percentage of Decline from First Half of 2010
Boulder	761	0.61	164	120	11.0
Fort Collins-Loveland	1,136	.87	115	79	14.4
Greeley	1,925	2.04	52	17	28.25
Colorado	26,744	1.19	84	9	18.24

Education Tax Proposal Gaining Supporters: State Sen. Rollie Heath has the backing of two education groups for his $3 billion tax-increase proposal to fund education. The Colorado Education Association and other power players remain on the sidelines, even as Heath has managed to collect 142,000 signatures in his attempt to petition his way onto November's ballot.

Heath's proposal has the blessing of the Colorado Association of School Boards and the Colorado Association of School Executives, both influential and respected groups in the education community. Heath (Boulder) had been working since February to organize an effort to ask voters in November to pass a tax increase for education. If approved, his would increase the state's income tax, now at a flat 4.63 percent, to its 1999 level of 5 percent for five years.

The initiative would raise the state's sales tax for five years from at 2.9 percent, to 3 percent. The state has cut K-12 education by more than $500 million over the past several years.

The initiative would generate an estimated $536 million for K-12 schools and higher education in its first full year, with about $3 billion in tax revenue expected over the full five years. The business community is still largely neutral, although the Boulder Chamber supports the measure. The Denver Metro Chamber of Commerce's board plans to consider the initiative soon. The Colorado Association of Commerce and Industry is likely to take a position on the proposal in September.

MID Facts: There is some talk that the mortgage interest deduction, or some portion of it, is on the table for a cut in the grand bargain over the debt ceiling debate. Here are some figures from NAR on the mortgage interest deduction (MID):

About a third of all Americans itemize their tax deductions instead of claiming the lump-sum standard deductions. Many of these itemizers do so to claim the MID, and the fact that they can claim the MID makes itemizing a better choice for them than the standard deduction. In fact, more than 80 percent of those who itemized claimed the MID.

More than half of homeowners claim the MID. The MID can only be claimed by homeowners who pay mortgage interest, and nearly a third of home owners own their homes free and clear'without any debt. Among mortgaged properties, more than 80 percent claim the MID.

Among those who take MID, about two-third of all families earn less than $100,000.

Homeowners already pay about 80 to 90 percent of all federal income tax.

While the preserving real estate tax provisions are essential, Congress did not act on two additional and vitally important measures before the five-week summer recess. Congress has not extended the FHA Loan Limits or the National Flood Insurance Program beyond the current expiration date of September 30, 2011. Congress is scheduled to return to Washington on September 7, 2011, which will require swift action to prevent a lowering of the loan limits and a lapse in the Flood Insurance Program.