This issue of The Red Ant circles back on several hot local topics that made headlines this past summer, and includes the latest updates and my thoughts. Please be sure to forward this Ant to your friends and neighbors who are particularly interested in these important issues!
AVH - BIG BONDS AND CONSTRUCTION AHEAD
June 2010's Issue #44 presented a comprehensive overview of Aspen Valley Hospital's proposed expansion plans (to read this issue, click here). Currently, they are looking to build Phase 2 of a 4-phase development with an estimated $120 million price tag. (The $6.5 million Phase 1 - the new obstetrics center - was completed in 2008, using cash on hand and money left over from a 2003 bond.)
Earlier this year, touting a 4-pronged financing plan, AVH leadership cited "cash on hand + revenue bonds + philanthropy + general obligation bonds" as the sources for their proposed expansion. Between available cash-on-hand and revenue bond potential, there should be approximately $40 million dollars available for the project. 
In June, upon receiving final approval from council for Phase 2, AVH CEO David Ressler acknowledged that roughly two-thirds (or $80 million) would need to come from fundraising and new property taxes. He said he would like to see the $80 million shared equally between philanthropic giving and new property taxes, but that AVH needed to get farther along in its design process before the final price tag could be determined.
Obviously, the environment is no good for rattling the tin cup at donors, especially to the tune of $40 million. There isn't a capital campaign in sight. But a referendum on the November ballot to approve $50 million in general obligation debt - now that's the quick and easy way to fast money! (An extra $10 million? Chump change in the "free money" game!) Never mind that Phases 3 and 4 have yet to be approved!
This November, the Aspen Valley Hospital District presents Referendum 5B to the voters:
"Shall Aspen Valley Hospital District, Pitkin County, Colorado, debt be increased $50,000,000 (fifty million dollars), with a repayment cost of not more than $86,850,000 (eighty-six million, eight hundred and fifty thousand dollars) and shall district taxes be increased not more than $4,363,000 (four million, three hundred and sixty-three thousand dollars) annually to pay such debt; such debt to be issued for the purpose of acquiring, constructing, equipping and furnishing hospital facilities ....?" (Click here to read the full ballot language.)
Yes, of course it's wonderful to have a good community hospital right down the street. And Phase 2 will bring us improvements to hospital zoning, segregation of internal traffic flow, privacy and space for operations such as upgraded patient care (from 25 to 36 refurbished private rooms), cardiac/pulmonary rehab and physical therapy relocated to a second floor, same day surgery moved to contiguous space with other surgery, relocation of food service and dining, 12,000 s.f. of medical office space (the remaining 15,000 s.f. will be added in Phase 3), a basement receiving dock, a 236-space 3-story parking garage, 18 units of subsidized housing and site work (loop road and storm water retention ponds). But $50 million, when only Phase 2 has been approved and there's nothing to show in the philanthropic-giving bucket?
The Red Ant predicts that AVH will be back next fall and the fall after that (tax measures can only be on the November ballot) to hit us up for more general obligation debt financing if/when Phases 3 and 4 come online. They said that each phase would result in threshold improvements that can stand alone, but I anticipate a "there's no turning back now" scenario that will be used to justify issuing further debt to "complete" the project. And short of a windfall in the philanthropic giving account, they're $30 million short today. Wonder what that number will be next year?
The arrogance of rushing this bond measure onto the November ballot is unbelievable. In these economic times and with the great uncertainty in the healthcare environment, Aspen Valley Hospital would have been well-served to have demonstrated the community's actual and proven support of the massive expansion by producing remarkable results from a capital campaign. Instead, AVH relied on a survey of 306 local voters to gauge interest in funding the hospital expansion. Support was favorable but not overwhelming with a 5-3 margin.
The Red Ant is told that saying NO to the hospital is like being mean to puppies and babies. Perhaps a "NO" vote should be sent as a "SLOW DOWN" message. Even though council approved the plans for Phase 2, this is clearly not the time for this scope of expansion. Why the rush? And do we really need all that they want to build?
(And, as predicted, after being told by city planners to ignore financial-related concerns, council never did once ask "how the hospital plans to pay for its expansion" and about "its policies related to treatment of patients with Medicaid and Medicare," never mind 22% of its patients are covered by the programs and this number is, of course, expected to grow.)
And that's not to mention the competitive medical services environment in the region. Valley View Hospital in Glenwood Springs is nearing the completion of its 10-year, 145,000 s.f. expansion (including a 29,600 s.f. cancer center) and regularly advertises its comprehensive services on tv and in the local papers. In addition, St. Mary's in Grand Junction cites its status as the only level 2 trauma center between Denver and Salt Lake. We are long on high-quality healthcare on the western slope. And, most Aspen residents leave town in any case for their medical procedures when they have the option.
INSTANT RUN-OFF VOTING (IRV) - VOTE YES AND IT'S GONE!
The good news is that IRV, the ill-conceived and controversial voting method that confused Aspen voters and created an ongoing legal mess for city hall, is up for repeal on the November ballot. Thank goodness! (Vote YES and repeal it!)
Referendum 2B asks Aspen voters if they want to replace IRV with June run-off voting procedures:
"Shall Ordinance 20, series of 2010, be approved? Ordinance 20, series of 2010, if approved, amends sections 2.7, 3.2 and 3.3 of the City of Aspen Home Rule Charter to eliminate instant run-off voting procedures and re-instate previously used run-off procedures in June for the election of mayor and members of council ...." (Click here to read the full ballot language.)
The question of "If not IRV, then what?" became the great debate in getting this measure on the ballot. Despite living through the horror of the 2009 election when Aspen learned that there are many ways to skin the IRV cat (different tabulation methodologies produce different results - with the same ballots), council refused to define what IRV would look like should it be retained. They simply refused to specify a methodology. (In the unfortunate case that IRV is retained, council will, once again, define it after the fact. They never learn.)
The obvious choice was to return to what we had before, a traditional run-off election. But Mayor Mick and others who champion progressive voting gimmicks argued vehemently to add a third choice, "winner take all." Largely favoring the incumbent candidate because of name recognition, the "winner take all" method could determine a winner with just 34% of the vote in a 3-way contest. Hardly a mandate! Thankfully, rational minds prevailed and this third option was tabled, but not before a most-telling disagreement between the mayor and the city attorney:
At a council meeting in September, Mick was adamant that IRV, if retained, won't change. City Attorney John Worcester had to then school the boys on the fact that the Election Commission was planning to recommend changes to improve IRV if it is retained. The Red Ant had to laugh -- so much for the "Mick says so" answer to public comments!
THE HYDRO PLANT - SINKING LIKE A STONE
The Red Ant #45 delivered a report on the Castle Creek Hydro-electric Plant, for which a $5.5 million bond issue was approved by voters in 2007 (to read this issue, click here). Public outcry over the misguided and seemingly mis-represented project has gained momentum over the summer, resulting in continual letters to the editor challenging the wisdom and the legality of this folly.
It recently came to a head on September 13 when citizens came before council, many of whom implored council to deny the necessary land use approval for the project to move forward. Despite the lack of land use approval and proper permits, the city has been moving forward all year, installing elaborate pipelines (called "penstock") -- $2.3 million worth -- throughout the area, citing an "emergency drainage" system for Thomas Reservior.
But really, this current penstock installation is an ill-disguised attempt to gain a "conduit exemption" from the feds in order to avoid an environmental impact study and bypass obtaining a federal permit. A "conduit exemption" can be granted when there is an existing waterway -- a flume, a ditch, a tunnel, a pipe -- with water currently running through it for other purposes. The city is messily creating an "emergency drainage" system -- it's "conduit" -- for a reservoir that has no threat of danger (per state officials) so as to create a means to avoid the critical, costly and time-consuming EIS and the elaborate and bureaucratic process of obtaining a federal permit. Shameful.
The Red Ant is particularly interested in the new name for the Castle Creek hydro plant. The city is now calling it the "Castle Creek Energy Center." What's this all about? Local resident Maureen Lipkin addressed this name and purpose change at the public hearing. At Aspen's "Energy Center, there will be multiple uses for this building and site, not just hydro: hydrogen extraction, hydrogen storage, a fuel station for cars and buses, geo-thermal and solar. All that at the same location. As well as a museum." This, in a residential neighborhood?? Is this wise?? Necessary?? And who approved the changes??
Perhaps the most poignant question of the night came from Connie Harvey who simply asked, "Here's this construction project underway .... Are you going to stop it while you wait for the citizen process or are you going to just keep going?" Crickets. Nobody said a word, that is, until mayor Mick arrogantly stated, "We're not putting the turbines in yet." Despicable.
Following the meeting, mayor Mick told the Aspen Daily News that he was "somewhat concerned" about the city being stuck with the already-purchased (for $1.4 million) generator if the project is not approved. Yes, things like generators must be ordered in advance, but surely not so far in advance that they precede the necessary permits and approvals! He went on to say, "The delay is about figuring out how to best protect the stream, not kill the project." Oh, really?
Council continued the meeting and its final decision until October 12. **Late breaking news: The Aspen Daily News reports on "a behind-the-scenes planning process" whereby an independent mediator will be working with Castle Creek residents over the next 30 days to hear both sides of the issue in a mediation context. Details are still unfolding, but council has continued (again) its land use review until at least October 18. Stay tuned.
The bonds for the hydro plant were issued in 2008, even though there is no guarantee that the Federal Energy Regulatory Commission (FERC) will grant final approval for the project. If council or FERC does not approve the current proposal, or it is held up for several years in the regulatory process or in court, the funds would have to be allocated elsewhere (and because the bonds were originally approved by the voters, this may entail the need for another public vote).
Presumably issued with the full faith and credit of the city, the bondholders (think of them as lenders to the city) don't care where the money is spent as long as the city makes the annual principal and interest payments for the next 20 or so years. Then again, the proceeds are required (IRC section 103) to be spent on appropriate tax exempt purposes within specific time limits or the city will owe penalties plus interest to the feds that, based upon the issue size, could reach into the tens or even hundreds of thousands of dollars. And the clock is ticking. This is what happens when you issue debt before you actually know for certain that you have a project.
And there is one other issue. Since the hydro project is supposed to generate income to repay the already-issued debt, should it not be built, the city will have to find another way to pay that debt back. Can you say RATE INCREASES???
The Red Ant will look into this issue and report back, should the hydro plant be scrapped. A reallocation ought to be interesting given that much of the money has already been spent.
The Red Ant is reminded of the old adage, "If you have to eat sh**, don't nibble."
THE GIVEN INSTITUTE: DESPERATE TIMES, EMERGENCY MEASURES?
Built in 1973 on land donated by philanthropist Elizabeth Paepcke, The Given Institute in Aspen's west end has been on the city's list of "potential historic resources" because it was designed by modernist Harry Weese, who famously designed the Metro in Washington DC. 
Owned and operated as a conference center dedicated to medical research by The University of Colorado's School of Medicine, The Given has been operating at a $200,000+ annual loss for several years. The city learned in June of the university's plans to raze the structure and sell the spacious 2.25-acre lot overlooking Hallam Lake to a private buyer for up to $20 million.
As the Aspen Daily News reported, "As a state educational institution, CU does not have to follow local land use regulations, meaning it can tear down the Given Institute without fear or interference from the city, which otherwise might attempt to designate the property as historic against the owner's will."
Local outcry at the potential loss of this 1970's-era structure called on council to have the city buy The Given outright from CU (With what? For what?), float a bond on the November ballot so that local taxpayers would foot the bill to buy it (debt financing is "free money" in Aspen, right?), or even "force" the Aspen Art Museum to buy The Given instead of a parcel of its choosing. Thankfully, none of this nonsense moved forward, likely because of the price tag, but the din has not diminished.
As time was running out on its "negotiations" with the university, the city apparently saw that The Given was as good as gone. That was, until the city attorney's office came up with a nefarious plan for council: pass an Emergency Ordinance that would re-zone the property from residential to academic, thereby preventing a potential buyer from building a single-family home there. (And, incidentally, greatly reducing the value.)
The controversial caper to "save" The Given took the mayor and councilmen Skadron and Johnson all of 15 minutes to approve on first reading. (Once final, an emergency ordinance goes into effect in just 24 hours.) Never mind that Aspen's city charter calls for emergency ordinances ONLY in the case of "preservation of public property, health, peace, or safety." Our city attorneys claimed that preservation of The Given through this Emergency Ordinance "is necessary for the promotion of public health, safety, and welfare and should be implemented immediately to preserve the health, peace, safety, and general well-being of the residents and visitors of Aspen," however, "welfare" and "general well-being" are NOT permitted criteria for an emergency ordinance! Nor is CU's property the city's property, even though CU is a state entity.
(Councilmen Torre and Romero were absent from the special meeting, so it's no surprise that the mayor was quickly able to steamroll these shenanigans past his two disciples without intelligent debate.) The second and final reading as well as the public hearing were then scheduled for September 20.
CU spokesman Dan Meyers acknowledged the downside of the city's action. "Should the decision become the law of the land, it will make it very difficult to sell the property. It's very disappointing and we're not happy the city is considering this step." Meyers went on to say that "school officials are concerned that the city is giving more weight to local residents who care about the historic value of the property than to taxpayers around the state who support the university in its educational and health care endeavors." Ya think?
A bevy of council executive sessions (closed to the public) ensued during the week following the advent of the Emergency Ordinance. It would seem that the "emergency" turned out to be more of a prank call to 9-1-1. That, or a skinned knee. The latest is that council has "continued indefinitely" its decision on whether to implement the emergency ordinance. Nice back-pedal. (Perhaps CU looked at the city's laws -- as The Red Ant did -- and pointed these out?)
When neophyte politicians listen to the recommendations of sneaky lawyers who work at the behest of mayor Mick -- and don't do their own due diligence on things like the legal requirements for emergency ordinances as clearly spelled out in the city charter -- city council stands to further embarrass itself by enacting petulant laws that say "If we can't have it, we'll make your wishes impossible and destroy your property value."
The saga continues.... But city officials don't know if/when the measure will come before council again. Expect wrecking balls soon.
ASPEN ART MUSEUM - FREE ART DOWNTOWN, CIRCA 2013
On August 3, Aspen learned that council, after a 7-hour meeting, had approved plans for a new Aspen Art Museum to be located on the Wienerstube property at the corner of Spring St. and Hyman Ave. The approval enables the AAM to build a structure with maximum allowances of 30,000 s.f. and 47 feet in height.
While some citizens lament a perceived "lack of public process" associated with the approval, it turns out that "unique and accelerated process" for the approval came because the AAM acquired the property for its new building as part of a legal settlement between the landowners and the city, stemming from council's 2008 denial of a mixed-use building on the site and the ensuing lawsuit.
There is great confusion about the project, so The Red Ant wants to make several points clear and correct some of the mis-information that's out there:
On the use of public funds:
- This project is totally privately funded, on private land purchased and paid for by the Aspen Art Museum. There is NO taxpayer funding of this project.
- As the AAM is a 501(c)3 non-profit organization, it will be exempt from the real estate transfer tax (RETT) of 1.5% when purchasing the property.
- The building fees for this project are not being reduced.
On the height, mass and scale:
- The configuration has been determined through review by city staff to comply with the code as in effect at the time of the project's original submission.
On community character and values:
- The Wienerstube building has not been designated historic and therefore does not require a review by the historic preservation commission.
- The planning and zoning commission declined to review the project, although their review was not necessary as part of the approval process.
- Subsidized housing mitigation does not require the housing to be on site.
Parking
- This project is consistent with the city planning department's recommendation to reduce user traffic in the city core.
Most importantly, The Red Ant reminds readers that as we collectively work to develop and sustain our tourism-based economy, it is amenities like the Aspen Art Museum that will continue to bring new and unexpected visitors to Aspen.
The AAM plans to occupy its Shigeru Ban-designed building in late 2013. And admission to the museum is always free.
COMMUNITY VOICES
This issue's community voices section is dedicated to the intelligent and articulate presentations of opposition to the hydro plant by local citizens who spoke out in a public hearing on September 13, urging council to deny the land use approval. The Red Ant says to all who wrote in and spoke out, THANK YOU. Your voices are important. It takes guts to participate in the public process, but it makes a huge difference!
Tom Hirsch
- "Most people who arrive at major decisions with major impacts like this with multiple layers of impacts - economic and environmental, as well as aesthetic - generally do due diligence before they make these decisions."
- "It is generally not done to put a hydro plant in a residential neighborhood."
- "It's really difficult to (create perspective here) after the fact of millions of dollars already being committed and now you're supposed to make an informed decision. You guys are in an impossible position."
Tom Stardoj
- "Who decides whether the stream is healthy, and what are your standards for making that decision?"
- "If you build the hydro plant, it will result in a tug-of-war between the health of the creeks and the viability of the plant. That's clear. Each side can only win at the expense of the other one. To me this is a lose-lose situation."
- "The project is not in the best long-term interest of the community."
Connie Harvey
- "Maybe you councilmen didn't know as much about (the hydro plant) as maybe you should."
- "Your figures (on climate change effects on the stream) don't quite compute."
Paul Noto
- "A front range appropriation of our water is a scare tactic."
Maureen Hirsch
- "In 2008, the city received a preliminary permit from FERC, and this permit gave them the opportunity to study the proposed 1.05 megawatt Castle Creek Hydro Plant. It did not give them permission to build infrastructure. A preliminary permit does not grant one that kind of permission."
Tim McFlynn and Ruthie Brown
- "(We) have learned a lot about minimum streamflow and what creates a healthy aquatic system in a stream ... And they're not synonymous."
- Be aware of the "potential unintended consequences and collateral damage."
- "Take the time to get it exactly right."
Dee Malone
- "Minimum flows are at best an estimate" that "often only maintain a minimally functional stream."
- "It's like putting the stream on life support."
- "The stream isn't as vibrant or as functional as before de-watering."
- "I don't know why we go for the minimum."
Bob Rafelson
- "I've also seen a lot of people alter the flow of the river. It's grotesque if it's altered incorrectly.... It's a grotesque thing to behold if you're guessing wrong."
Jay Hammond
- "I do not ever recall a conversation about how we were going to divert flows from Castle and Maroon Creeks that did not consider the strong health of both of those creeks."
Jeanette Darnauer
- "It is our subdivision and others below the reservoir that are being used as the justification for spending the millions of the bond money for the hydro plant as a drain line out of Thomas Reservior. So we're the ones supposedly with the potential for property damage should there be a breech in the dam. And yet neither my neighbors nor our HOA board of directors have ever been contacted by the city expressing any concern for our safety or any potential damage to our homes. Thomas Reservoir existed when the county approved our subdivision, and if we were truly in danger, we wonder why would they ever have built the neighborhood below the reservoir or why wouldn't we have been warned 19 years ago if indeed we were subject to the 'potential for millions of dollars in property damage' which is what the water department has stated as a fact in its March memo to you. The implications of such a warning could be quite serious to us as homeowners or as an HOA."
- "It baffles me how the city could claim that there would be an emergency situation when the state dam inspector in 1989 said this is a 'small, extremely small reservoir' and it was so benign it would create no public safety hazard even though Castle Ridge Apartments and the hospital were in existence at that time."
In addition, Connie Harvey and Michael Lipkin recently both had thoughtful guest columns published in the local papers. Click here and here to read Connie's two installments, and here to read Michael's.
REMEMBER: THE 2010 GENERAL ELECTION - TUESDAY, NOVEMBER 2
The following are important dates pertaining to the upcoming election:
October 4 Last day to register to vote
October 18 Early voting begins in the County Clerk's office
October 26 Last day to apply for mail-in ballot
October 29 Last day for early voting
Sample Ballot: Click HERE
Onine Voter Registration: Click HERE
For Mail-in Ballot Application: Click HERE
Early Voting: M-F October 18-29 from 8:30a - 4:30p in the county clerk's office, located at 530 E. Main Street, Suite 101 (Google Map)
Where to Vote: Click HERE
Look for The Red Ant's upcoming Election Issue,featuring endorsements and recoemmendations on the ballot measures!! Coming Soon!!
**NOTE: TO ASPEN AND PITKIN COUNTY NON-VOTING TAXPAYERS
I would like to facilitate the formation of a group for non-voting taxpayers in the city and the county. The idea is to create an organization to give a voice to this large community of taxpayers who are experiencing "taxation without representation." This includes second-homeowners and local business owners who cannot vote here. Please click here and let me know if you are interested in becoming part of such a group. Would you like to help lead it? Would you like to receive emails? Please indicate whether you are in the city of Aspen and/or in Pitkin County. I welcome your thoughts. And please tell your friends. Let's make something happen!
October 13