ISSUE # 51 .... TriumphANT: Success at the Aspen Polls
November 3
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November 3 ISSUE # 50: Be A ParticipANT - Vote November 2
October 16
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ISSUE # 49 .... In The MeANTime: An Update
October 13
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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. 
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.ISSUE # 48 .... DisenchANTed with Secrecy Inside Aspen's City Hall
September 23
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THE RED ANT SPEAKS
On September 1, The Red Ant (a.k.a. Elizabeth Milias) addressed the Aspen Business Luncheon at the St. Regis hotel. Speaking to a packed house that seemed to enjoy it, I thought you might be interested in what I had to say. For those of you who were in attendance, thank you for the wonderful support. The following are my remarks. Be sure to read the city's panicked response below: "Thank you for coming... Alan and Todd didn't want to include the fact that I'd worked on the Bush-Cheney campaign in their email notification of this event. They said people wouldn't come. I didn't agree with them, but I went along. ---- Thanks guys for leaving that out.... Current Events in Aspen: The Real Story -- A Critical Discussion of Aspen City Hall Politics. As you might imagine, the City got very excited about my talk and contacted me last week requesting my "prepared remarks" for prior review. ......
I'm here today to talk for a few minutes about what I see as the "Culture of Secrecy" at Aspen's City Hall. In general, when I use the term "city hall," I am referring to city council, city attorneys John Worcester and Jim True, and city manager Steve Barwick. This is structured as several "Ant Bytes" that will illustrate an institutional practice of secrecy that has created dangerous scenarios which have current and on-going repercussions for each of us.
* * * * * * *
But first, a little on the genesis of The Red Ant. I got back to town amidst the Ordinance 30 controversy and just prior to the lid being blown off the Burlingame budget issue. The only news on the stories was what was in the papers. It was clear to me that there was something rotten in Denmark. And nobody was connecting the dots. Enormous parts of the stories were not being told. But worst of all, people were mad, but they were afraid to get involved. Needless to say, I was outraged. It was in this time period that I met Marilyn Marks --- and we decided to do something ---- to take the issues head-on, name names and make the comments that the newspapers wouldn't. A periodic email essay, sent out to our friends, seemed to be the simple solution, and The Red Ant was born. Marilyn and I recently decided that our civic efforts are more powerful with a "divide and conquer strategy," and since this spring, I have been flying solo with The Red Ant. Last month, The Red Ant celebrated her 2nd anniversary.
* * * * * * * * *
I'd like to begin with Ordinance 30 of 2007 aka "emergency" Ordinance 30. This legislation was brought forward by then-councilman and current BOCC candidate Jack Johnson. Passed close to midnight, without public input, Ordinance 30 required that all properties 30 years or older be reviewed for potential historic significance before they could be demolished or even altered. This "emergency" was justified by a list of 14 buildings that had allegedly already been demolished and another list of homes the city had its eyes on for years without the owners' knowledge. This "secret list" identified 53 post-war properties that had potential historic value. The properties on the "secret list" had been bought and sold to unknowing buyers throughout the years. The "secret list" was withheld from the public for a while, but when it was released, on the already-demolished list were several buildings that had NOT been demolished at all (like the Annabelle Inn) and others that were going through the proper legal procedure. ((((This is what happens without a public process.)))) This was also the first time that local property owners learned that their properties were on the "secret list".
So, where does what started as Ordinance 30 stand today? The Historic Preservation Task Force of citizens was recently disbanded after two years when they came to an impasse on the issue of voluntary vs involuntary historical designation of private property. For three years, the affected property owners have been in purgatory. Not only have their property values fallen with the market, those with houses on the now-public "secret list" have had to endure this additional burden of uncertainty. Just last night, the city's historic preservation staff proposed to council a NEW scoring system for the 53 properties still in purgatory. Properties would be scored on a secret "historic value scale" and those in the highest category would then qualify for involuntary designation. But surprise, surprise. Council apparently doesn't have the stomach for "involuntary designation" and they sent staff back to the drawing board.
With this, I'd have to say that despite the secret lists, the late night vote, the inaccurate justification, and the lack of public process, the outlook for those "purgatory" properties is looking better than expected. But, as usual, before completely eliminating the list, council rested. So what's next? I don't know. It must be secret.
* * * * * * *
In the same timeframe, Burlingame was being built and nearing completion. Now recall that the former Bar X Ranch was annexed to the city of Aspen in 2005 when voters were promised that the per-unit subsidies at Burlingame were to be $62,500. At the completion of phase 1, a Citizens Budget Task Force was formed to prepare financial estimates for the Burlingame phase 2 bond measure. And then the big secret was revealed: there had been no budget for Phase 1.
The CBTF was immediately put under gag order and the press was kept from meetings. All references to the $62,500 subsidy mysteriously disappeared from websites overnight (and were later attributed to a "brochure error"). Budget and spending issues on Burlingame could not be discussed in public meetings.
However, much later, when the city tried to address the egregious fiscal mis-management at Burlingame, a "missing" $25 million was attributed to "inflation" - this, on a fixed-price contract. Currently, out at Burlingame, the city is still working through the punch list for phase 1, but there is $4m in the current budget for Burlingame phase 2 planning and design. Yes, $4M.
The denial of intentional voter mis-information, the many attempts to keep secret and cover-up the financial disaster, the arrogant and premature expenditures for the next phase...... I hope Burlingame phase 2 does NOT move forward. Just think - we don't have enough jobs for the people already in employee housing; we're in an environment of declining demand for it; it's terribly difficult to get financing for deed restricted property; and there is ABSOLUTELY no assurance that an enormous bond will pass to build this thing. But I'm sure they have a secret plan.
* * * * * * * *
Now, it's no secret that I was appointed to be an Election Commissioner in 2009, just prior to the now infamous IRV election. In short, here's how it went ---- The public voted in 2007 to use Instant Run-off Voting in our elections. That there were multiple methodologies of the controversial vote-counting scheme was kept secret from the voters. The "rules" for Aspen's vote count were determined mostly in secret meetings of city staff, the city attorneys and the incumbents running for office -- Mick and Jack.
Among other problems, as an election commissioner I witnessed messed up pre-election software testing. In one case, the candidate with lowest number of votes came out as the winner, while the candidate with the highest number of votes became the loser. Reminds me of the biblical reference "the first shall be last and the last shall be first." ---- But I digress.....
This precipitated some late-night last-minute software changes in the wee hours before the election. City attorney Jim True tested this software alone, in secret, in his office. And after the election, when the city's election contractor discovered a vote tabulation error, the city kept this secret until the deadline for a recount had passed.
But when the election commissioners began to ask questions, we were swiftly "disappeared." But before I left ---- one big secret had been revealed: the city knows how you voted. It's been proven. Your constitutional right to an anonymous ballot has been violated, and this was likely not the first time.
Now the city calls that election "the most transparent" in history. WRONG. It's all a big secret. It comes down to this fundamental question: Why won't the city show the same ballot images that they showed on television screens the night of the election? What are they hiding?
Currently there's a new EC in place and they have agreed to look into the citizen complaints and at various recommendations from the district attorney to make changes and corrections to the serious legal violations from the 2009 election. I will surprise you and say that my outlook on Aspen elections is so-so. I am cautiously optimistic. The issues are cumbersome and the ingrained environment is shrouded in secrecy. It will be extremely difficult for the EC to make the changes that the city attorneys and city council don't want made. But laws were broken, and we must demand that integrity and honesty be returned to our local elections. That's no secret.
* * * * * * *
So you ask, how can this happen? Who's in charge over there at city hall? Steve Barwick is the Aspen's city manager - its CEO if you will. But the big secret is that he is not in charge: Mick Ireland is. Barwick never makes his positions known and is not functioning as a CEO.
In fact, Barwick 1) ...initiated the $18 million purchase of the BMC property and completed it without an appraisal, bankrupting the housing fund. 2) He led, oversaw and continues to lead wasteful expenditures of millions of dollars of public funds on unrealistic, ill-conceived, failed projects and programs such as the ZG Master Plan, the Main Street Median and the outdoor pool at the ARC. 3) And, he recently attempted to have an Aspen citizen "punished" by the Rotary Club for dissenting with the local government. We don't hear much from Barwick, just that he agrees with Mick on everything the mayor puts forth. This void in leadership creates the incubator in which the culture of secrecy thrives.
The current situation? City council recently rewarded Barwick with a $170,000 annual contract, never mind that he's been in this role for 11 years now and no previous councils would give him one. As such, the outlook for professional city management is BAD. Now Barwick has a contract. And it's no secret that he gave "free housing for life" to the public works director when this individual threatened to leave his job. ---- It's a fair bet that Barwick is secretly hoping that Mick does the same thing for him.
* * * * * * *
There are ongoing issues of what I call Funny Money at city hall. The City has a knack for secretly moving money around, misplacing it and spending it inappropriately. As citizens, we never learn about the city's secret money maneuvers until they get caught!
During its 2008 land-banking spending spree, the city "borrowed" $8M from the Wheeler's RETT account to buy the $18M BMC property. They're paying it back with interest now, but ....??? And then there's the missing $475K from Obermeyer Place, earmarked for the recycling center...... But don't forget the city employee purchase cards or "P-Cards" ---- These debit cards that pull straight from the city's coffers were revealed to have been used by employees for meals at high end restaurants and even for purchases from a fur store, totaling in excess of $250,000 in 2007 and 2008.
The current situation on funny money -- ?? Another secret. We won't know until the next one's revealed. And the Outlook - BAD.
* * * * * * * *
Speaking of Funny Money, my favorite issue du jour "Affordable Housing" ---It's the subject of a major story I'm working on for an upcoming Red Ant, so look for that... I prefer to call it "subsidized housing" because there is nothing affordable about affordable housing. The dirty little secret about subsidized housing is that the Aspen Pitkin County Housing Authority - APCHA - is really not in charge. Nobody is.
You see, APCHA merely facilitates the sales of the subsidized units, and after that, it's no longer their responsibility to manage the homeowners associations. These are on their own to manage and collect dues from themselves. Yes, APCHA determines eligibility, conducts the lotteries and is working to improve enforcement, but the fact is, once the units are sold, nobody's in charge.
As a result, the entire program is facing an enormous and potentially financially catastrophic capital reserves issue. Most subsidized housing projects have not collected sufficient capital reserves for on-going maintenance and repairs, if they have even collected them at all. You see, there is no incentive as a subsidized housing owner to pay into capital reserves - demand's been high and there was always the next guy, waiting in line to buy his subsidized housing from you.
Consider the big mess at Centennial. In the owned-unit portion of the project, there is a terrible mold problem that is affecting a number of structures there. The problem is, the HOA reserves are so terribly insufficient that the tens of millions the repairs will take will have to come from another source. And special assessments from the owners will likely be more than the places are worth! But, interestingly, at Centennial, there is also a rental unit portion of the project. This is privately managed. And they have no deferred maintenance problems because the rents being charged cover the cost of ongoing maintenance, and security deposits exist to fix up the units when they're turned over.
Currently, a new-ish group called Housing Frontiers Group is looking into the problems at APCHA and trying hard to come up with new solutions. I like the direction. Outlook: ok. But APCHA needs to be completely reworked, from scratch.
* * * * * * *
So what can we as a community do to address the culture of secrecy at city hall? The key is to get and stay informed. Get involved. Ask the tough questions. ((((I always start with the question: where's the money?)))) But most importantly, VOTE, and vote knowledgeably.
There is a terrible pattern of cart-before-the-horse ballot measures that we've fallen victim to because the city kept parts of the issues secret. We believed ballot language that convinced us to vote for: 1) Annexation of Burlingame - the secret: they marketed the measure with false subsidy information 2) The Hydro electric plant - the secret: city doesn't have federal permits nor have they determined the proper water level for the river 3) IRV was sold as way to conduct cheap elections with just one trip to the polls - the secret: there are numerous methodologies that each yield different outcomes with the very same ballots. 4) This November, we'll have the option to repeal IRV. This is a good thing, right? Secret: without a definition of what IRV will look like if it's kept and without a definition of what the "traditional" voting method means, it's hard to know which is better. The city would prefer to make these decisions after the vote ----- likely in secret.
It's like herding kittens over there. As I often say in The Red Ant, city hall is a target-rich environment, and these guys put the "fun" in dysfunctional..... But actually, they're running a tight little game ---- at our expense. Until we started asking the tough questions, they've been keeping secrets and laughing all the way to the bank. Our friend Jack Johnson here says that "voters should vote, and then shut up." I whole-heartedly disagree. The local government works for me. And I'm here today to remind you that they work for you too. All of their activities and decisions and emails, etc ----- this is public information.
To all of my Red Ant readers, I truly appreciate your feedback. I respond to 100% of what I receive, including: directives to leave town, questions that I try my best to answer, and suggestions which often become the subject of future Red Ants. However, my most difficult feedback is the "you should" comments. I can't do this alone. I've been working hard to create a drumbeat and establish a community of citizens who feel the same way I do. I need your help and your involvement
* * * * * * *
The Red Ant says, sometimes someone just has to call it as she sees it. I'm sick of the BS. I'm sick of the secrecy. And I think you are too. Let's stick together. Thank you for reading The Red Ant and thank you for sending it to your friends. We're making a difference every day." ((END))
....AND THEN THE CITY PANICKED!
In the Q & A portion of the event, city community relations officer Sally Spaulding came unhinged. Event organizers had to ask her to sit down and perhaps come back another day to make her own presentation. But in the true demonstration of exactly the theme of my speech, Sally promptly sent out a hilariously defensive and untruthful email to a select (secret?) list of recipients, The Red Ant not included. The lies - oh my! I couldn't have asked for a better and more predictable action by the city to prove my point!
The following are examples of Sally's crazy-talk city spin, followed by the facts. It is good to know that The Red Ant has the city on the run. (That's the idea.) But it is unbelievable how far the city will go in order to try to defend its secrets! They never let the facts get in the way of their story!!
1. On my statement "There was no budget for Phase 1 of Burlingame"
- City Sally: "This is simply wrong. There was a budget...." She continues, "The city of Aspen signed a contract with Shaw Construction to deliver Burlingame Phase 1 at a fixed contract price of $36.4 million."
- The Truth: A construction contract is not a budget.
According to the publicly available spreadsheet titled "BG Reconciliation" which served as the basis for and was included in the McMahon and Associates (CPA) audit, through July 2008, $52 million had been spent on Burlingame Phase 1. And this is a conservative number. To-date, Burlingame Phase 1 continues to incur ongoing costs (2 years later) as the punch-list is still not complete. The same document shows that millions of dollars more have been spent at Burlingame, but allocated to Phases 2 & 3. Should these phases not be built, the actual Phase 1 expenditures will skyrocket! On July 28, 2008, in a city press conference, city manager Steve Barwick stated that there was "no comprehensive budget" for Burlingame Phase 1. In addition, according to the Aspen Daily News, July 31, 2008, "A city of Aspen press release issued Monday afternoon that described the audits as confirming that Burlingame Phase 1 was delivered 'on budget' also appears dubious. A second version of the press release issued Tuesday omitted the phrase. The McMahan and Associates audit appears to confirm what critics of Burlingame have been saying, i.e., that Burlingame had no comprehensive budget." NOTE: The Red Ant will gladly retract this statement if/when the city presents its comprehensive Burlingame Phase 1 budget. Numerous official "open records" requests have yet to produce this elusive document.
2. On my alleged statement that "Meetings on Phase 2 of Burlingame are being held in secret"
- The Truth: I never said that. (See speech text above.) But I do indeed intend to vociferously oppose ANY and ALL bond measures for future Burlingame development, and I encourage all citizens to do the same.
3. On my alleged statement that "IRV pre-election software was fixed by Assistant City Attorney Jim True"
- City Sally: "Another ridiculous accusation.... Elizabeth knows this accusation is incorrect but continues to repeat it."
- The Truth: (Hint... take better notes and quote me accurately!) I said that "Jim True tested this software alone, in secret, in his office." (See speech text above.) There is a BIG DIFFERENCE.....
According to an email from city clerk Kathryn Koch on election day, May 5, 2009, at 4:54pm, regarding her plans for the pre-ballot-counting logic and accuracy test of the vote-counting machines and software, she wrote, "We have the tape from the Accuvote machine; we have Jim True's hand tally which is consistent with True Ballot's tabulation" (from the prior evening). Jim True's "hand tally" was done overnight on May 4, 2009, alone, in secret, in his office, after the public Logic and Accuracy Test did not initially yield correct outcomes. He did not notify the election commission nor any candidates of this test, despite the fact that this test was to have been conducted in public according to election law. (There is a chance that the city clerk may have been involved with True's late-night test, so he may not have been entirely "alone," but it was certainly still not conducted in public or with public notification.)
4. On my statement that the city broke the law on the 2009 election:
- City Sally: "The district attorney has confirmed that no laws were broken."
- The Truth: According to the DA's published opinion on the election "irregularities" surrounding the May 5, 2009, election, there were (and I quote):
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- "Ordinance violations... prosecutable in the Aspen municipal court" (p. 1 -- Jurisdiction)
- Numerous "rule violations" (pp. 6 and 8 -- Claims 1, 3 and 11)
- "Violation(s) of duty" by the city clerk (p. 7 -- Claims 5 and 8)
- A "technical violation of the law" (p. 10 -- Claim 21)
- A "violation of charter or municipal code by misinforming or not informing its own electorate" (p. 9 -- Claim 16)
- A "violation of the state constitution" (p. 9 -- Claim 14)
- "Violations of the city's charter" (p. 7 -- Claim 9)
- "Violations of the Secretary of State's rule" (p. 11 -- Claim 25)
- "Violations of the city's election rules" (p. 7 -- Claim 7)
- "Breach of contract or fraud" (p.11 -- Claim 24)
While the DA found "no prosecutable state crimes," he listed several of these infractions as best addressed by "the election commission or the city itself," and suggested that some be brought before the municipal court. Again, while the DA noted that he felt these problems and violations "do not belong in the criminal justice system," he in no way "confirmed that no laws were broken" as the city would have you believe!
5. On my alleged statement that "the city won't release the 2009 ballots because it has something to hide"
- City Sally: "The city won't release the ballots because it is against the law to do so. A judge has confirmed this."
- The Truth: (Once again, check the facts and quote me accurately.) I said, "Why won't the city show the same ballot images that they showed on television screens the night of the election? What are they hiding?" (See speech text above.)
There is a BIG DIFFERENCE between "releasing ballots" (which nobody has requested) and "showing ballot images" (which the city has already done, not once but twice: on election night and again on May 7, 2009, when a "random" group of 260 ballots were shown to the public as part of the "public audit"). It is NOT against the law to show the ballot images. Obviously. Or the city couldn't have done it two different times. And the city knows this. They just don't want anyone to see the ballot images up close and individually, so they continually misrepresent the request. And yes, The Red Ant firmly believes that the city is hiding something.
6. On my statement that "there is a terrible mold problem at Centennial that will cost tens of millions to fix"
- City Sally: "... more to the tune of hundreds of thousands of dollars. It would/will be the Homeowner Association that would foot the bill for any repairs."
- The Truth: According to Housing Frontiers Group member Adam Frisch, "In true Aspen form, the Frontiers group has been shut out of anything to do with Centennial - it's mostly been closed-door sessions." He goes on to mention, "It is interesting that the rental buildings and the ownership buildings were built at the same time by the same people in the same way. The professionally managed, rental building is doing just fine, but the self-governed ownership building is in shambles."
Housing Frontiers Group member Andrew Kole adds, "Rumor is, they (Centennial) want the city to pay. I am against that. If they had been collecting proper capital reserve fees and done maintenance, the money would be there and the problem would be smaller."
Furthermore, the Centennial HOA commissioned a study to fix the damage. The estimate was $1.5 million per building, and there are 7 affected buildings. This comes to $10.5 million, and that does not include the myriad costs associated with relocating the residents of the 92 affected units on a tbd basis while repairs are addressed at the 25-year-old subsidized housing project.
7. On my statement that "There's a culture of secrecy at city hall"
- City Sally: "If you think there is a culture of secrecy, come to one of our hundreds of public and noticed meetings each year...."
- The Truth: With the facts, the truth is abundantly clear. All of these facts are a matter of public record. The city is deceptive, sneaky, dishonest and scared. And they will go to great lengths to maintain their culture of secrecy, including trying anything to discredit their detractors.
A CONSTANT CHALLENGE
This is indicative of the continual nonsense The Red Ant deals with every day. The culture of secrecy at city hall keeps me busy! It's a daily chore to check the facts and do all I can to correct them in the public record. Aspen deserves the truth, and the community is not going to get that from city hall. In The Red Ant, the opinions are mine, but the facts are the facts.
**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!
ISSUE # 47 .... Debt Financing in Aspen: The ReluctANT Truth
August 24
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In a new twist, this issue features a collaboration between The Red Ant and valley resident Phil Verleger, whose "Community Voice" was heard recently at The Aspen Business Luncheon.
Mr. Verleger is the David Mitchell Professor at the Haskayne School of Business at the University of Calgary. Phil is principal of his own company which provides economic consulting to firms, governments, and individuals on energy and commodity markets. He was a senior staff economist at the Council of Economic Advisers when Alan Greenspan was Chairman. And he was a Special Assistant to the Secretary of the Treasury from 1977 to 1980. He has taught at Yale University and the University of California Santa Barbara. He was also a Senior Fellow at the Peterson Institute.
ASPEN'S ECONOMY
Philip K. Verleger: Aspen's economy is extraordinarily fascinating to an economist. Almost nothing is manufactured here. Instead, income comes from two sources: visitors and investment. Most investment goes into private or public structures. What this means is that one portion of those living in town and the valley earns its income from construction, while another portion earns its income from providing services to visitors. A third, significant portion of those living in the area works for governments.
The Red Ant: It would be difficult if not impossible to accurately find - yet alone estimate - the number of construction workers in the area. But there are fewer and fewer every day. However, regarding the number and cost of local government workers, rather than embarking on another unscientific survey, The Red Ant decided to go scientific this time. The findings are APPALLING:
Aspen
- 320 "full-time equivalent" employees
- $26.5 million payroll budget (including benefits)
- Of a $91 million annual budget for the city, that's 29% to payroll and benefits
Pitkin County
- 244 full and part time positions, including 8 elected officials
- $22 million payroll budget (including benefits)
- Of a $60 million annual budget for the county, that's 37%
So, 564 people work for the local government -- on the public payroll to the tune of $48.5 million this year. That's ONE THIRD of the combined budgets of the City of Aspen and Pitkin County! (Are you angry yet?)
CONSTRUCTION CONSTERNATION -- IMPACTS BEYOND HAMMERS AND NAILS
PKV: Aspen's economy has been hit hard by the collapse in investment (construction). The impacts on the down valley economy have been even more severe. A very significant share of those working in construction has lost all or most of its income. The construction sector has experienced a depression, not a recession. The construction sector is not likely to experience a recovery in 2011 or 2012.
Furthermore, a recent Aspen Daily News article stated that Snowmass base village owner Related Companies had planned to spend $30 to $35 million constructing 73 residential condos that it "expected to generate (sales) revenue of approximately $130 million, thus resulting in an expected net profit of approximately $100 million." (If these stunning figures are correct, it's no wonder that Aspen is going bust.)
Here is the interesting question -- if the expected profits on the project were so large - even including the cost of the land purchase - then how far will prices fall when new owners take title after the auction? Assume they get the project for 35 cents on the dollar. Will they then try to sell at the original prices, or will they try to turn it quickly by sharply lowering the price?
Now extend the example to Aspen. There are several projects in bankruptcy. Will the buyers of these projects do the same? Now think of what happens to property values. These discounted sales will bring down property values. Mick could possibly then get his wish -- Aspen could become the playground for the middle class. What happens then to the market for the big homes? When Aspen is less exclusive, the rich start looking elsewhere. This, of course, does not help property values.
In the meantime, the new crowd will probably want more services. Remember the old saying "I would never want to be a member of a club that would admit me."
Oh yes - how do we pay the interest on all the bonds?
ANT: The following table illustrates the dramatic decline in building permits and associated revenue for the City of Aspen from 2008 through July 2010.
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2008
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2009
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2010 - YTD
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Permits
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Residential
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234
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253
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155
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Commercial
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475
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340
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109
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Electrical
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380
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309
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139
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Mechanical
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207
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174
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134
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Plumbing
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353
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318
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84
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Valuation*
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$ 144,934,032
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$ 101,310,160
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$ 38,507,185
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Average Valuation Per Permit
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$ 204,420
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$ 170,843
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$ 145,861
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Building Permit Revenue
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$ 2,162,363
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$ 1,300,501
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$ 494,035
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*Valuation total is based on residential and commercial permits, excluding tents and fire sprinklers.
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The local government's aversion to "development," which in their narrow minds is construction in general, is an enormous problem for Aspen. The construction industry is beyond hurting. And the concept of "development" should not be looked upon as inherently negative.
Take for example the city's 2008 purchase of the BMC West property for $18 million as part of its ill-fated "land banking" program. (The city bought this lumberyard land without an appraisal at the top of the market for future use as a subsidized housing development.) Just last week, the city agreed to cut the rent by one-third for the lumberyard. The rent cut was required because the lumberyard's sales revenues are down significantly due to the construction decline in Aspen. So here's the irony -- the city's anti-building stance, combined with the recession, now costs it over $200,000 a year in rental income! The cost will likely rise to $636,000 a year because the lumberyard will probably close.
And of course the local anti-construction stance pervades local politics. The Aspen Times, in their predictable endorsement of Jack Johnson for the open board of county commissioner seat, cited that he "will not cave in to development interests" as other candidates would. It's this sort of scare tactic that The Times hopes will convince voters that since Jack is "anti-development," his opponent therefore has an evil plot to pave Aspen and build skyscrapers. When "investment" (construction) is one of our key economies, The Red Ant points out that this endorsement actually perpetuates Jack's anti-jobs, anti-business stance and is extremely dangerous for Aspen!
The recent approval for the construction of a new, privately-funded Aspen Art Museum on the Wienerstube property will bring some building activity to town. (Recall: the city got itself into a legal pickle with the land owners there and was forced to settle a lawsuit by enabling the Museum proposal to go forward in order to protect the draconian Aspen Area Community Plan (AACP) that was sure to get shot down as a regulatory document by the district court.) It's a terrible precedent for future land-use issues for sure, but thankfully Aspen will reap great rewards from this exciting new project that will create short-term construction jobs and in the long term will be one more world-class amenity that will attract visitors to Aspen, especially given that admission is free there all the time!
PROPERTY VALUES AND PROPERTY TAXES -- REAL IMPACTS TO YOUR WALLET
PKV: The threat of falling property values combined with the wobbly situation of smaller banks will limit growth in areas such as western Colorado. Recovery may have to wait for the large, solvent national banks to acquire two or three of the local lending institutions. Aspen will benefit, however, from its popularity with a class of second home buyers that does not require financing. The local papers have reported recently a sales increase for very expensive homes. Such activity will continue because the location is very attractive and because there are winners, even in a prolonged slowdown (the third depression). Note the recent sale of Andrea Yeager's Silver Lining Ranch property: it was assessed at $13.5 million but sold for $10 million. That is a 25% reduction. And they say the rich are still paying!?!
But this activity should not mislead anyone. Local property values will decline. Valley communities should expect to see average property value assessments decline around 35 percent from their peaks. Prices and assessments could fall further if the fiscal stimulus (Obama's $862 billion program and the Fed's/Treasury's $2 trillion TARP bailouts) does not continue. In January all of this could end -- and taxes could go up. This is a prescription for real trouble. While there will undoubtedly be fudges, the implications of falling property values for the revenues of Aspen, Eagle County, Garfield County and Pitkin County are not good, not good at all.
ANT: Let's make the math simple -- if property values fall by 50%, then tax rates have to double to hold revenues constant.
In other words, with declining property values in our future, prepare for higher property tax bills. And that's to maintain the status quo. If voters approve additional bond measures, this will create even higher property taxes. Debt financing is NOT free money.
GOVERNMENT SPENDING -- NOW IS NOT THE TIME
PKV: Under these circumstances, one might ask whether now is the right time for government organizations in the valley to embark on large capital projects. To a Keynesian, the answer is obvious -- increased government expenditure is required to stimulate the economy and boost employment. On the other hand, Keynesian economists did not confront the prospect of ten years of stagnation as Japan experienced from 1990 to 2000. Those advocating new capital expenditure programs should consider the consequences of such an event for the valley.
Anyone proposing capital projects also should consider the consequence of current and prospective voter anger. The experience of towns and cities in California that borrowed heavily before 1978 was terrible. Those localities had to make serious job cuts after being forced to raise property tax rates to make payments on bonds.
Voters need to consider the consequences of mandated freezes on expenditures. Bond holders MUST be paid first. Therefore, road repairs, other maintenance and/or employees may have to be cut if Aspen and Pitkin County are forced to curtail expenditures. Aspen would be wise to look at the experience of Vallejo, California. The town is in bankruptcy; bond holders are demanding that the town allocate revenues from car registration to pay interest on bonds rather than pay the police! I
t is all together possible that outside supervision could be forced on many towns and cities across Colorado and the United States in the coming years as the depression eats out the core of the nation's economy. Those cities and towns that do best will be the ones that have the least debt.
ANT: With the abundance of local bond measures under consideration, the debt burden contemplated by our elected leadership (and electorate) could prove to be a financial disaster. The Aspen Valley Hospital expansion, Burlingame subsidized housing project Phase 2 and a ridiculous purchase of The Given Institute to save the building from demolition would likely require north of $200 million in new debt. For example, at 4.25% interest (the city -- as well as other Pitkin County jurisdictions -- is still a good credit risk therefore it has good market access, even now), these borrowings would require roughly $8.5 million a year to service, depending of course on the type of debt issued, length of the issuance and other factors. This $8.5 million annual debt service -- in addition to the annual debt service already on the books -- will be the first payments out of the public coffers each year. (The city currently pays approximately $3 million per year in debt service, but this does not include the schools, the hospital, or county-wide overlapping debt so the overall existing debt service number is actually much higher.) In an environment of decreasing revenue (read: a smaller overall budget), the impact of increasing debt service payments makes for mandatory cuts. The big question is - from where??
Steve Malanga of City Journal warns of an impending "local debt bomb." In his Summer 2010 installment, Malanga states, "State and local borrowing, once thought of as a way to finance essential infrastructure, has mutated into a source of constant abuse." He goes on to highlight that "cities began to expand the scope of what bonds financed to include everything from subsidized housing to private hospitals," creating a scenario where "total state and local debt has soared from $1.5 trillion in 2000 to $2.4 trillion (in current dollars)"...with total liabilities increasing from "15% of GDP in 2000 to 22% this year." Even more disturbing is what this debt has paid for: development projects "including many in which the private sector has wisely shown little interest, expect when the government subsidizes them." The Red Ant cannot help but be reminded of the enormous bonds that will be necessary for the Aspen Valley Hospital expansion.
While some in Aspen live for the day when "the quiet years" return, those with common sense should worry that an outside mandate which limits the ability of the town and the county to provide services to visitors could quickly chase tourists and wealthy second home owners away. No one wants to visit or own a home in a town where the roads aren't plowed, where the services are poor and where police protection is non-existent. Cuts in expenditures (such as Pitkin County's recent Armageddon warning) will quickly convert the area from a popular stopping point for the wealthy to a second Leadville. It will also lead to a further drop in the value of all real estate and a serious decline in tax revenues and services.
If the rich know one thing, it's how to write off a bad investment!
THE SERVICE SECTOR
PKV: The situation faced by the service sector (especially those taking care of visitors) could also be troublesome. The deflationary environment that is developing could cause many potential visitors to re-evaluate vacation plans. Aspen does compete with other destinations, although many seem oblivious to this fact. Tighter incomes will reduce vacation spending and boost the price sensitivity of some visitors. Merchants and those marketing lodging may have to become more competitive on pricing.
Aspen could also confront the further loss of foreign visitors. The recent drop in the euro/dollar exchange rate has been a boon for German exporters and American consumers. However, it raises the cost of U.S. vacations for European visitors.
ANT: One of the most troubling aspects of the current race for a rare board of county commissioner seat is that candidate Jack Johnson intends to refashion Aspen into a "sustainable non-profit arts and culture economy." Huh? Without a benefactor to underwrite such a wreckless endeavor, this is at best the misguided pipe-dream of someone who simply has zero dollars and cents sense. Does he not recognize that Aspen's arts and cultural programs are largely supported by those who come here to enjoy the exclusive resort and its amenities and/or their vacation homes? Jack additionally stated at the pre-primary candidate "squirm night" his desire to "return" Aspen the world-class destination resort to its roots as an "agricultural economy." He was not referring to the community garden either. Yes, it's outrageously funny for sure, but could be frighteningly impactful if he is to be elected and actually pursues such nonsense, especially given the property tax exemptions for those who allow cattle grazing in their subdivisions, for example. The Red Ant reads this as Jack's plan to "completely transform" Aspen. Where have we heard THAT before?
With construction already in the pits, it's dangerous attitudes such as this that threaten the service sector of our fragile economy as well. If we're not careful, the "quiet years" may just be on the horizon.
ARE WE BEYOND THE TIPPING POINT??
We all know that tax measures usually pass in Aspen. This happens for a variety of reasons, but none are so obvious as the fact that those who pay much of the property tax revenue cannot vote here, and those who do vote here pay a disproportionately small amount.
Consider -- in 2009, property tax revenue for Pitkin County was $110 million. Of this, tax revenue from the deed-restricted, subsidized properties in the Aspen/Pitkin County Housing Authority (APCHA)'s portfolio was $966,000 (0.9% of the total), while property tax revenue from non-resident property owners was $64.3 million (59% of the total). Next, factor in that of the 13,616 registered voters in the county, over 4,000 are residents of subsidized housing. And that number is artificially low. It's probably more like 5,000. (The Red Ant ran the APCHA owner/tenant list* against the voter rolls, but there are presumably additional registered voters who live in subsidized housing units who are not on the title or lease.)
So, nearly 40% of registered voters pay less than 1% of property taxes. And when just 23% of all registered voters show up to vote as was the case for the August 10 primary, you can easily see what can happen! Of course, those 40% of voters who pay less than 1% of property taxes could soon be paying 2%, 3% or even 4% of these taxes if assessed values fall as projected. Those owning deed restricted properties are unlikely to see any notable change in their assessed values while second homeowners and those living full-time in free market properties will see substantial reductions in their assessed values. This means that the burden will rise disproportionally on the 40%. The Red Ant wonders whether Aspen voters will be as generous with their own dollars as they are with other people's money.
*The APCHA owner/tenant list was incomplete, and did not include all rental tenants, nor did it list the owners or tenants for its full portfolio of 2,800 units. However, the list received by The Red Ant "is the most up-to-date list that we have on our system at this point in time." But I digress.
THE RED ANT ASKS -- WHAT'S NEXT??
While all of that is fairly obvious to anyone who thinks about it, there is another, extremely shocking reason why the Ba'ath Party remains in office year after year, making life difficult for all residents who have a shred of capitalistic inclination and raising taxes regularly for further publicly-funded amenities. Many local residents who CAN vote here DO NOT. It's true. The Red Ant finds it a wee bit Big Brother-ish, but the voter rolls as well as the list of who actually showed up to vote are matters of public record. Therefore it was one of the easiest research projects ever undertaken in the history of The Red Ant.
For the August 10 primary, just 3,107 registered voters participated. Maybe you didn't care about the primaries for the state and national races. But if you are reading The Red Ant, it's a safe bet that you have a shred of concern for the future of Aspen and Pitkin County - this place we all on some level call home.
Why is it then that narrowing the field of 4 candidates to 2 for a rare, open board of county commissioner seat and the race for sheriff didn't warrant three minutes of your time? As The Red Ant stares at the list of those who did vote, it's shocking (and sad) to see who didn't. Is it any surprise that former city councilman Jack Johnson, the instigator of 2007's overnight emergency Ordinance 30 that placed all structures over 30 years old on a list preventing even the smallest exterior changes without government approval that plagues homeowners to this day, the tyrant who single-handedly drove the community-minded owners of the Broadmoor Hotel to sell the Hotel Jerome, the father of Aspen's controversial, likely illegal and ill-fated Instant Run-off Voting, and hater of private property rights, made the cut? This is serious, folks.
Apathy is costly. While there were no bond measures on the ballot in the primary round, the politics of our elected officials ultimately bears a great cost. And yes, we will see several debt financing measures for extremely costly capital projects on the ballot in November.
TO FOLLOW UP ON THE HYDRO PLANT ISSUE
While one reader of The Red Ant is currently looking into the determination of just who owns the Castle Creek water rights with both the bond underwriter and its law firm to examine possible misrepresentations and unlawful conduct by the city, another local resident and Castle Creek homeowner, Dick Butera, addressed council on August 9 with the following noteworthy points in his request that the city deny the land use application for the hydro-electric facility:
- It is not true that 70% of aspen voters approved the hydro-electric facility. In the November 2007 election, just 13.8% of those registered voted, and 70% of them approved the hydro measure. That's just 9.4% of Aspen voters.
- The city sold $5.5 million of bonds in 2007 with the statement that the cash flow would start in 2010. The hydro plant won't be operational until 2013 so this gross misrepresentation means that $1.4 million in debt service for the intervening 4 years must be added to the original projected costs of $6.1 million.
- The public was told that there would be a $300,000 positive cash flow per year from the hydro-electric plant. After inspecting the books, I found that the first positive cash flow year is 2026.
- The public was not told that this "green" project was going to lower the river to 13cfs which is a mere trickle, when the last real scientific study that was done said that 23 cfs was the minimum flow to maintain aquatic life.
- The public was not told that over $2 million of the money would be spent PRIOR to obtaining state and federal permits for a pipeline that is absolutely not necessary.
- The public was not told that of the $6.1 million cost, $1.9 million was for fees and permits.
- The public was told that 5,000 tons of carbon in the air would be saved. This is a total myth promoted by the city and perpetuated in the local media.
- The adjoining property owners along the river in question have NEVER received a legal notice that their river was about to be drained for a totally unworkable hydro plant.
No surprise -- Mayor Mick could not contain himself and rudely berated Mr. Butera for his comments about government out of control.
AN ADDENDUM TO THE RECENT ISSUE "THE NANTUCKET EFFECT"
The Red Ant was recently contacted by the director of senior services for Pitkin County, Marty Ames, who kindly shared what the appointed "senior council" does in our community, and I happily include this below. "Senior services and the senior council acknowledge the need for 'cradle to grave' options in our community, and were instrumental in development of the existing assisted living facility, growing our home services options, and creating care management services to help seniors remain in their homes. It continues to work diligently to identify the current needs of area seniors, as well as to study and strategically plan for the future needs of the senior population.
Pitkin County Senior Services works together with the Senior Council, senior customers, local and regional entities to provide a wide range of programs and services including congregate and home-delivered meals (85-90 per day currently), transportation, exercise classes (yoga, arthritis, balance, tai chi, conditioning), information and assistance including a monthly newsletter, care management services, legal services, tax assistance, personal assistance navigating resource programs such as Medicare D, health clinics and health fairs, lectures, collaborative programming with CMC and the Given among other entities, music and intergenerational programs with MAA and local schools, trips and outings, skiing and hut trips, bicycling and too many more to list. In addition we manage a volunteer program that utilizes over 160 individuals providing over 4,000 hours of service per year."
Thank you, Marty. I hope that APCHA, City Council and the Board of County Commissioners include you in their critical current discussions regarding retirees in subsidized housing, retiree rentals of their subsidized housing so they can travel, plans for designing and publicly funding a continuing care facility affiliated with AVH, etc. The expertise of your organization should be a determining factor in any such decisions. In fact, the input of your group should lead the way for our seniors and those who will be utilizing your services in the future, beyond just the scope of your current programs. Keep up the great work!
ISSUE # 46 .... The nANTucket Effect
August 3 BUT FIRST -- TWO IMPORTANT ASPEN REMINDERS!
1) Vote in the August 10 primary! In addition to state and national races, Pitkin County has at-large races for county commissioner and sheriff on the ballot. All registered voters in the county no matter where you live and regardless of party affiliation can vote in these races. Now is the time for The Red Ant readers in the county -- Mountain Valley, Meadowood, Snowmass, the North 40 and on Red Mountain -- to take an active role and contribute to making a difference in our local elections! Early voting is in the county clerk's office, Monday - Friday, August 2 - 6, 8:30 am - 4:30 pm. For more info, go to www.PitkinVotes.org. Please make this important stop a priority!
(And yes, as recently reported by the Aspen Daily News, The Red Ant backs restaurateur Rob Ittner for county commissioner. Click here to learn more, volunteer and DONATE! Plus, if you're at all curious how I feel about former city councilman Jack Johnson's candidacy, please click here to read the letter I sent to the Aspen Daily News in February.)
2) Learn about the Aspen Art Museum's proposed new building on the Wienerstube property (633 S. Spring Street) by clicking here or by visiting the museum at its current location to view the model and renderings. The official public hearing on the proposal is scheduled before city council on Monday, August 2. Please show up and voice your support! The Red Ant thinks this will be a fabulous and exciting addition to downtown Aspen! And -- something new and different -- 100% of the funding for this spectacular facility will be borne by the AAM itself. It will be a tremendous gift to our community.
THE RED ANT "ON ISLAND"
Even The Red Ant needs a vacation! And where better than the fabulous island community of Nantucket, just 30 miles off the coast of Cape Cod. It sure didn't take long to notice the obvious similarities between Aspen and Nantucket: isolated vacation destinations where weather regularly impacts arrivals and departures, seasonal service-based tourism economies with workforce needs that wax and wane accordingly, full-time residents who tough it out in the off-seasons and take great pride in maintaining what makes the communities great, historic districts with unique architecture and strict preservation rules, real estate at the top end of the spectrum (that has not been immune to the recent economic downturn), robust arts and cultural programs. You get the picture.
And just as obvious are the familiar challenges: traffic, parking, housing, high costs of living. Ever-conducting unscientific surveys (I can't help myself), The Red Ant has seen many different approaches to familiar problems. In fact, in several cases, they do it far better "on island," and we could learn a thing or two!
KINDRED SPIRITS
Where Aspen has its unofficial "ZG" nickname, derived from early Pitkin County license plates, Nantucket has "ACK," its airport code. When you're in the know, these monikers speak for themselves. Where Aspen has its 925 and 920 local phone number prefixes that enable us to write 0-4600 (for The Little Nell, for example), Nantucket has its 228. (As such, they just write the four following digits.) We both have uniquely notable histories. Nantucket's started a lot earlier -- the island was settled in the mid-1600s and was the center of the world's whaling industry for over 150 years. About the time that The Grey Lady's "quiet years" began, The Silver Queen was striking it rich and leading the world in silver mining. Both communities' 20th century resurgences breathed new life into relative ghost towns, and came as a result of tourism and real estate development. Aspen is fortunate to have robust winter and summer tourism seasons. In Nantucket, it's all made or lost in 12 weeks each summer.
THE REAL ESTATE TRANSFER TAX (RETT)
In Aspen, real estate buyers pay a 1.5% RETT, with funds going to maintain the city-owned Wheeler Opera House and to build subsidized employee housing projects. On Nantucket, housing is seen as a community responsibility, not one for which real estate buyers alone should bear the financial burden. Instead, Nantucket's 2% RETT generates revenue specifically earmarked for open space purchases. In other words, they use growth to save land.
As a result of this effort and others like it, of the island's 50 square miles, 60% is publicly-owned open space, conservation land or wetlands. And of the remaining 40%, 32% has already been developed, effectively leaving just 8% for future development OR conservation. Remember, it's an island. No annexing property to make a bigger pie for subsidized housing!!
THE SEASONAL WORKFORCE
As with any service-based economy, it takes a workforce to keep the boat afloat. And Nantucket has long attracted cheerful, hard-working young people to work in the shops, bus the tables, serve the drinks and plant the flowers. College students from the eastern seaboard have been coming here in droves for generations, while burgeoning capitalists from Bulgaria, Moldova, Romania and other emerging democracies primarily in Eastern Europe have joined them and cannot be missed.
Eastern Europe, you surely ask? The Red Ant did too, until I learned that there is a well-established program called Work & Travel USA, run by the US State Department, that matches US employers in need of short-term seasonal staff with skilled, English-speaking international students (from over 65 countries!) who want to live, work and travel in the US. It is all run through a non-profit sponsoring organization (www.interexchange.org) that handles the screening, interviewing, travel arrangements, work visas, US tax paperwork, emergency services, etc. The students work for a maximum of 4 months and then travel for up to one month before returning to school.
Nantucket has established itself as a popular summer destination within the program. The kids' work ethic is incredible; they are cheerful and, most notably, thrilled at the experience of meeting Americans and making some cash. In conversations I've had with aspiring bankers, journalists and social workers, many want to visit New York, Washington DC and ... Niagara Falls before heading home. (Somehow a program like this just kinda makes sense. Wouldn't it be nice to have young people come to Aspen for the season again??)
AFFORDABLE HOUSING: A PRIORITY WITHOUT THE CHAOS
There is indeed a need for low and moderate income housing on Nantucket. This is currently being addressed through various entities that are funded through grants for property rehabilitation and purchases, Habitat for Humanity, and a newly established Affordable Housing Trust Fund. Collectively, their goal is to build 20 housing units per year on city-owned parcels. Recalling that Nantucket's RETT goes to the purchase of open space, the trust fund receives its funding through Community Development Block Grants (CDBG), a federally-funded competitive grant program. Furthermore, Nantucket voters recently voted not to approve an increase in the RETT to fund affordable housing.
The summer season is the only notable "crunch time" for housing. There are 2,000 dwellings occupied by year-round residents (less than 20% of the total), so after the summer swell (the population grows to over 50,000 people), affordable rental options are everywhere for those who wish to stick around. Especially in town, Nantucket is comprised of high-density historic home sites, most with cottages and carriage houses that are rented out in high season. There's also the "Nantucket Shuffle" -- where homeowners move into their own cottages and rent out their main house to make some serious cash.
But unlike in Aspen, there are no programs or people on Nantucket trying to sell bus boys and cocktail waitresses taxpayer-subsidized, deed-restricted pieces of the dream. Paying rent is absolutely normal. And as a result, summer-to-summer, it's a revolving door of hard-working, happy folks who come to the island for the season to work and have a great time. Like it used to be in Aspen.
Even the Work and Travel USA kids find their own housing. It takes a little work, but they aren't afraid of that!
HISTORIC PRESERVATION: CONSISTENCY!
The entire island of Nantucket was placed on the National Register of Historic Places in 1966. It has the highest concentration of pre-Civil War structures in the US. There exists an incredibly strict set of building regulations that -- while cumbersome and bureaucratic -- actually mean something. These are accepted, abided by, respected and effective, primarily because they are consistently applied and equally enforced. There's no subjectivity, no mitigation. For example, there is a set of 11 "approvable colors," ranging from Main Street Yellow to Essex Green, Quaker Grey to Cobblestone, and, of course, Nantucket Red.
And when someone wants to tear down an old structure on their property, it's often offered to the first taker -- for free -- as long as they can move it off the site. This is how many properties have come to have multiple historic "out buildings" on their lots. This practice is encouraged and embraced. (And it serves to contribute to the housing market by creating rental inventory during the summer season.)
Then there's the Nantucket Historical Association. This local non-profit raises money throughout the year to preserve and interpret the history of the island. Since its founding in 1894, the NHA has been purchasing buildings with historic significance. Today it boasts 22 historical building and sites. (Somehow, the ridiculous idea that Aspen should float a bond to buy The Given Institute in order to prevent it from being torn down comes to mind....)
TRANSPORTATION
Cars were not allowed on Nantucket until 1918. They're still discouraged. Even so, parking in town is tricky. But instead of taking measures to accept and address the traffic and parking issues, the local government embraces an intentional avoidance of traditional means of mitigation: no road widening, no added lands, no traffic lights. If it's inconvenient and pricey, fewer people will do it. As further deterrents, it costs $430 round-trip to ferry a car to and from the island, and daily car rentals on the island start at $200 a day.
The Nantucket Regional Transportation Authority (NRTA) is a popular, convenient and accepted means of transportation throughout the island. Fares are $1 or $2 each way, depending on the route. Nobody -- tourists, residents and workers alike -- complains about paying for a comfortable shuttle ride into town, to the airport or to the most popular beaches. I've yet to hear anyone express that "this place" owes them a free ride.
As one might imagine, business at the bike rental shops is booming.
LOCAL GOVERNMENT: NO CONCENTRATION OF POWER
Nantucket is the only location in North America that has the same name for the island, the town and the county. Yep, the town and county are coterminous, consolidated, combined. One and the same. The 5 elected board of selectmen (BOS) are the 5 county commissioners. They're also the board of health, regional transportation authority, fire and police commissioners, board of public works and sewer commissioners. They have very defined and vast responsibilities, and as such, cannot and do not micro-manage the minute details and responsibilities of every other board and commission.
Most key commissions are filled by elected members. These include: harbor and shellfish advisory board, historic district commission, housing authority, land bank commission, moderator, planning board, school committee, town clerk and water commission. These commissions have real power and their decisions cannot be wantonly disregarded by the BOS. Appointed officials are seated with a BOS-recommended mix of skills and diversity, and chosen for their cooperative spirit. (Those too set in their ways are not to be appointed as they are less likely to compromise.)
Incidentally, Nantucket's 2010 budget is $73.5 million. (The City of Aspen alone has $91 million budgeted for 2010 -- and that doesn't include a nickel for the county!! Makes you think about redundancy just a little, huh?)
ANNUAL TOWN MEETING
Major governmental business decisions for Nantucket are made at the annual Town Meeting, held every spring after the town elections. Many issues are determined by voice vote, while others take a written ballot. This gives the entire electorate the annual opportunity to participate in the democratic process -- ranging from the approval of the annual budget to considerations of all new business. In other words, the BOS do not unilaterally hold all the power, all the time. In fact, the town meeting itself is conducted by an elected moderator, and the town's governance adheres strictly to Robert's Rules of Order, the recognized guide to running meetings effectively and fairly.
ADVISORY COMMITTEE FOR NON-VOTING TAXPAYERS
This Nantucket commission was created to make recommendations to the BOS on issues of concern to non-resident taxpayers who pay approximately 70% of the residential real estate taxes collected. Comprised of 15 appointed members who serve 3-year staggered terms, the ACNVT meets with the BOS and finance director to discuss issues facing the town. Additionally, the ACNVT addresses problems related to code enforcement, the extension of sewer districts, restructuring town departments, providing amendments to the zoning code and addressing the issues surrounding the taxation of summer rentals.
Can you just imagine Mayor Mick and our guys enacting policies created by the villainous second-homeowners!?! Heck, The Red Ant would love to see such a group get merely an audience with our esteemed leadership!
LATE-BREAKING NEWS: A step toward the end of "taxation without representation" in Colorado? There is a measure on the November ballot (Amendment 60) that will allow property owners who do not live here to vote on local tax issues! The Red Ant kids you not! Never mind that the county commissioners warn that future tax votes could be put in the hands of people who own vacations homes versus the locals. "You would see a situation where people who do not live in the community would be the majority," stated Rachel Richards of the BOCC. But I digress...
Perhaps an Aspen version of the ACNVT is an idea whose time is arriving soon!
COUNCIL ON AGING
Since 1974, Nantucket has appointed this council of 9 board members to act on behalf of its elderly residents. Acknowledging the increasing number of aging baby-boomers, the COA exists to study, address and continue to plan for the needs of this growing segment of the population. Currently, seniors can tap into the COA for programs on nutrition, education and recreation, as well as for information and lectures on health care, legal services, technology, banking and money management, social services and housing. The COA presents a robust collection of programs that served 1300 individuals in 2009, with an average of 100 people visiting the senior center each day. It's popular, it's successful and it's growing.
What is Aspen doing? Planning to float a bond in addition to the hospital expansion bond to fund the construction of a retirement center, likely on the Moore property.
AND A GREAT IRONY.....
A destination resort like Aspen, Nantucket also has to manage its "party town" reputation. But local tolerance for illegal drugs on Nantucket is ZERO, and island law enforcement actively pursues and prosecutes "possession with intent to distribute" and other drug-related cases.
Here's where it gets weird. The Red Ant was recently shown a "campaign gizmo" from a recent Nantucket Sheriff's election. Yep, a weekly "pill dispenser" promoting the eventual winning candidate. Given the major differences in drug policy and law enforcement between Nantucket and Aspen, this little gem seems to be far better suited for the sheriff's race at home! Again, even The Red Ant can't make this up!
THE RED ANT SAYS:
While Aspen's local government is loathe to contemplate -- yet alone embrace -- any idea that is not home-spun, The Red Ant thinks that it's always constructive to see what the other guys are doing. Especially when it works.
But it's the attitude of the community at large on Nantucket that's the most notable difference. Tourism is embraced. Visitors are wanted, welcome, and warmly embraced. And second-homeowners? Cherished. For some reason, on this little off-shore sliver of Massachusetts, the folks on Nantucket have realized that "trickle-down economics" is good for everyone. As a result, the anger and class warfare so prevalent in Aspen is non-existent. There's a real "we're in this together" attitude. And the fierce independence of the (10,500) year-round residents is a source of local pride. As such, entitlements for some at the expense of others are culturally repugnant. With the downturn of the economy in recent years, all on the island have felt the pain and recognize that improved tourism numbers and construction jobs are the keys to local economic recovery.
So much for a couple of hours at the coffee shop on a drizzly and foggy day.... Just thought I'd check in from the island and remind you that The Red Ant is always on the case!!
ISSUE #45 .... Aspen's New Hydro PLANT: A Big Waste of "Green"
July 17
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In addition to operating the potable municipal water supply system, the city operates a pressurized untreated water system that serves the school campus, Rotary and Iselin Parks, and provides water for snowmaking at Aspen Highlands.
In the winter, water levels are naturally very low, and this is very stressful to the eco-system.
safety threat.ISSUE # 44 .... AVH Expansion: Community AdvANTage or Fiscal Over-Reach?
June 28
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This issue of The Red Ant is focused exclusively on Aspen Valley Hospital (AVH) and its proposed expansion. There are many public benefits of such a grand plan, however there are also many weighty concerns worthy of community discussion and consideration. Please be sure to read the new "Community Voices" section at the end of this issue.
AN OVERVIEW OF WHAT'S GOING ON AT AVH
It's 2010 and Aspen has outgrown its 25-bed community hospital. Built as an in-patient facility in 1977 -- and given the shift to far more outpatient services today -- our aging community hospital has developed inefficiencies: overcrowding, lack of patient privacy and inappropriate patient encounters. The Aspen Valley Hospital expansion master plan cites a focus on the decompression of existing space. According to AVH leadership, with contemporary design and function standards, a new and upgraded AVH will be better positioned to address the medical issues already being treated there. Aspen Valley Hospital is currently seeking city council approval for Phase 2 to further expand its facility and improve its existing services with a major outward and upward overhaul. As part of a proposed 7-year timeline, Phase 2 would be the largest of the four phases, tripling the size of the 33-year-old facility from 70,000 to 215,000 square feet. Phase 2 would address patient privacy issues with new wing of private rooms, creating a logical segregation of services that improves the internal "flow" of the facility and the establishment of critical infrastructure for potential future expansion.
THE PHASES
The expansion plans would create a health care "campus" on AVH's existing site, including the expanded hospital itself, medical office space, affordable housing and additional parking. The phase-by-phase improvements are designed to take into account realistic expectations of what can be achieved while simultaneously managing the challenge of not disrupting services and compromising safety during construction. Notably, each phase was designed to offer self-contained threshold improvements that can stand alone.
PHASE 1: Expansion and Renovation of Obstetrics - DONE (2008)
PHASE 2: Improvements to 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, a basement receiving dock, a 220-space parking garage, affordable housing and site work (loop road and storm water retention ponds). Currently in the approval process. (2010-2012)
PHASE 3: New emergency department, new imaging department, expanded surgical operations, the remaining 15,000 s.f. of medical office space, an elevated helicopter pad above the ER, a new ambulance entrance and garage, and basement space for storage and non-clinical operations. (2013-2015)
PHASE 4: A new front entrance, new registration/admitting area, better-located outpatient services, and completion of garage and external traffic operations. (2015-2016)
DOCTORS' OFFICES AT AVH?
The AVH expansion proposes the addition of 27,000 square feet of medical office space in the new facility. Designed to provide superior doctor-patient access, on-site medical office space is a new standard for modern hospitals. But is this medical office space really needed at AVH? At council's direction, city staff is currently looking into how much medical office space already exists in town. Meanwhile, The Red Ant has determined that 27,000 square feet is the equivalent of 2 x the Music Tent (seating area). As for the demand for such space, according to AVH sources, several local doctors have made early commitments to rent the new space. (As a tax-supported public entity, AVH cannot under-cut market value rents in town to fill their space.) The Red Ant thinks that on-site medical office space is a luxury that, frankly, we don't need, (especially given the additional mass and scale it would add to the facility), and cannot afford.
THE IMPACT OF OTHER HOSPITALS IN THE AREA
AVH is a small community hospital, essential to our community for general acute care such as general surgical, medical and outpatient service. Lucky for Aspen, AVH offers more than most community hospitals do, such as a fully-capable OB service, a non-invasive cardio program, a very strong orthopedic surgical program, chemotherapy services, trauma certification and a variety of state-of-the-art diagnostic tools. Acknowledging that the duplication of services with nearby hospitals is a bad economic model, AVH leadership states their commitment to "managing the delicate balance between meeting the service-based needs of our community and keeping focused on what we do well." There are several established medical centers within a 100 mile radius of Aspen. Our proximity to world-class care in the region is well known, which has definitely raised concerns about our local needs vs. our willingness to travel to have them met. It also raises the question of AVH's need (desire?) to compete with nearby facilities:
- Valley View Hospital (Glenwood)
- Vail Valley Medical Center (Vail)
- Shaw Regional Cancer Center (Edwards)
- Steadman-Hawkins Clinic (Vail)
- St. Mary's Hospital (Grand Junction)
AVH leaders reiterate that the hospital expansion is not intended to add services already provided by nearby hospitals, highlighting that in many cases, AVH already has strong relationships and collaborates extensively with Valley View in Glenwood, sharing specialists in urology, gastroenterology, ear-nose-throat, neurology and oncology. In addition, AVH regularly refers patients to Valley View's cath lab which compliments our cardiology program, as well as additional referrals to Shaw, St. Mary's, University of Colorado, Swedish and Presbyterian St. Luke's (in Denver), and such national centers as the Cleveland Clinic. AVH also works with specific programs like Sally Jobe for breast health and Blue Sky Neurology at Swedish for their stroke program which provides real-time consults to the ER here. But note, Valley View Hospital's CEO Gary Brewer recently told the Post Independent that the recent approval for the sixth and final phase (143,000 s.f. total -- 29,600 of which is a cancer center) of their 10-year expansion "will be the first step in moving the hospital ahead into the future as a regional health care facility." If the valley is to soon have a large, brand spanking new "regional health care facility" 40 miles down the road, what do we REALLY need here in Aspen? Shouldn't this factor into our local decision-making?!
SHOW ME THE MONEY
Taking into account the uncertainties in our world today, just how big does AVH need to be, how much will it cost and frankly, most importantly, who will pay? Projections at this stage are that the 4-phase AVH campus development will run in the neighborhood of $120 million. For now, however, the only consideration on the table is Phase 2. (The $6.5 million Phase 1 obstetrics center was completed in 2008, paid for with the remaining funds from a 2003 bond issue and hospital cash.) AVH leadership is looking at a 4-pronged financing plan for its future expansion phases: cash on hand + revenue bonds + philanthropy + general obligation bonds. These numbers are a rough example, but consider: the hospital currently has about $43 million in cash on-hand. But, unlike the leadership at the city-owned Wheeler Opera House, AVH realizes that it cannot simply throw all this cash on-hand into the construction bucket. Rather, AVH knows that it needs a minimum of 180 days worth of cash on-hand at all times, which is approximately $28 million. So there is around $15 million available for Phase 2 from this source. Then, given its bond rating from Moody's of BAA3 (which is based on operating revenue projections), AVH could raise approximately $26 million through revenue bonds. These revenue bonds would be paid off through operating revenues of the hospital itself. So, call it about $40 million currently available for Phase 2, without raising a nickel through philanthropy or general obligation bonds (the kind that we approve at the polls and repay with property tax increases). The Red Ant has recently met with AVH leadership, and they assert that they will contract for and construct only that which they have the money to pay for -- the difficulty being that they don't yet know the final cost estimates and funding capacity of the four sources of funds. One thing is certain, they say -- the funds that are available will be allocated to a construction scope that results in a finished stand-alone project, but many variables are "still in play." (Especially the variable that includes the potential need for general obligation bonds. Without knowing the costs, this will very likely enter into the near-term mix.) In its typical, inimitable and predictably fiscally irresponsible fashion, the city planning department informed council before its first public hearing on Phase 2 that "concerns such as how the hospital plans to pay for its expansion and its policies related to treatment of patients with Medicaid and Medicare should not be considered" when evaluating AVH's Phase 2 expansion proposal. The Red Ant cries, "Horse-pucky!" Our elected representatives should absolutely take "the money issue" into account. If there is to be even the slightest, shortest, fleeting consideration of EVER needing public funds for a project, the "who pays" question is as important as any other consideration. If AVH can independently, privately bring some version of Phase 2 to fruition, this too should be taken into full consideration.
KINDA PREGNANT?
What the community does not need after a potential go-ahead on some version of Phase 2 is a "there's no turning back now" scenario that mandates further, immediate construction, and worse, general obligation debt financing to "complete" the project. The Red Ant fears an immediate (and likely) rush to get a bond measure on the next ballot for Phase 2. Will the push for approvals and financing for Phases 3 and 4 (and specifically the bonds needed to fund them) then begin as soon as work on Phase 2 gets underway? Will the community be given time to assess the needs for further expansion before said expansion begins? The aggressive timeline indicates no. The timeline should definitely change.
MORE AFFORDABLE HOUSING!?
As with any development project in town, yes, you can bet there is yet another affordable housing mandate built into the AVH expansion plan. Early estimates have the design and construction costs at $5-$6 million. (Affordable for whom? That's a minimum of $227K/unit subsidy!) If it must be so, The Red Ant appreciates that the 22 units would be studios and 1-bedroom units for working professionals of the hospital itself. (With AVH retaining ownership of the units and renting these to their employees, the horrific issue of unit neglect and no oversight of HOA management/reserves that plagues much of the local "owned" affordable housing becomes moot.) On the other hand, however, much like affordable housing throughout the valley, the AVH housing stands out like a sore thumb -- high-density, bright lights in a rural setting -- and is distinctly the blight of the AVH campus. The good news is that council recognized this at the first public hearing and the mass and scale is likely to be reduced. But really, is this affordable housing really needed? On-site? At this stage?
COMMUNITY APPROVAL - TIMELINE
- Council conceptual approval of the Master Plan (May 2009)
- P&Z approval of the Master Plan (April 2010)
- Council approval of Phase 2 (meetings begin June 2010)
- Voter approval specific to funding (bonds) - TBD
- Council approval of future expansion phases - TBD
AVH: SOME SERIOUSLY GOOD STUFF....
An update of the AVH facilities seems absolutely appropriate at this stage of its lifecycle. If you've been there as a patient or visitor, you know why. And the proposed contemporary layout and design standards will surely improve service and care. Plus, these upgrades will likely enable AVH to attract and retain the best doctors and staff. We are very fortunate to have such an exceptional community hospital here. And this is as good a time as any to consider and weigh the decisions about a partial or full-blown hospital expansion. The Red Ant says, "Good work, AVH. You have demonstrated significant improvements in fiscal discipline in recent years, and your willingness to step forward with significant private contributions for a sizable facility upgrade is a noteworthy sign of your on-going commitment to the community."
AND THINGS THAT MAKE YOU GO HMMMMM....
The time to ask the hard questions is right now. It is imperative that we collectively gain comfort with the answers and contingencies -- for the current proposal as well as AVH expansion beyond Phase 2.
- Are there future commitments and risks that we're not recognizing or weighing as a community or as Aspen property owners?
- 27,000 square feet of on-site medical office space? This may be how it's done at state-of-the-art medical centers elsewhere, but do we really need this additional density (not to mention expense) at AVH, especially given the commercial office space vacancies in town?
- In the evolving "new healthcare environment," what happens if/when AVH is told what they can charge for services and therefore cannot generate enough operating revenue to service their revenue bonds? Who then picks up the tab?
- Currently 22% of AVH's patients are covered by Medicare and Medicaid, and the hospital writes off $2.5 million in unpaid patient billings each year. What happens to AVH's ability to sustain its high level of service and projected revenue if/when both of these numbers increase dramatically?
- With a 4-phase planned build-out, is the risk not ultimately being borne by the taxpayers? Is this facility being funded by the people who need the services, or is there some coercion by parties that will not be held accountable down the road?
- Would the size and structure (and scope and cost) of the project be any different if it were financed strictly with private dollars? (Fiscal discipline with private vs public dollars is often self-regulating.)
- Given the imbalanced demographics of the Aspen electorate, general obligation bond issues usually pass. Can Aspen's tax-paying property owners sustain/justify/afford the increases in property taxes to commit to and complete a 4-phase AVH campus build-out in the current economy?
- Do we really need more affordable housing, or is this just a standard government mandate? In recent years, the supply-demand dynamic for affordable housing has changed dramatically. Wouldn't $5-$6 million, if it were available, be better spent by the hospital specifically on the community's healthcare needs?
- The developers have done a notable job fitting this 215,000 square foot facility into the hospital's current 19-acre Castle Creek Road location. But just because they can do it, does this justify the added density at our gateway to the Maroon Bells and Ashcroft?
THE RED ANT SUGGESTS:
Aspen is a community that loves its entitlements. And a modern, state-of-the art hospital certainly fits that bill. But, Phases 1 and 2 sound like they're nearly covered - privately (in the financial sense). For what's not economically feasible with available (read: private) funds for Phase 2, hold off. Lose the medical office space, push back on the affordable housing, and downsize the parking to complete Phase 2 without going to the taxpayers for general obligation bonds. We surely can't trust city council to recognize that general obligation debt financing is anything other than free money!
Besides, at the completion of Phase 2, the hospital will be fully functional and a major improvement to the existing facility. If Phase 2 is all the community wants (and is willing to afford), Aspen will still have a world-class hospital with logical and efficient flow, private patient rooms, cardiac rehab, improved physical therapy and significant fixes to surgery (without rebuilding it). There should be no rush toward further expansion until Phase 2 is complete and its contributions and solutions are assessed. With this new infrastructure in place, future expansions are certainly possible. But let the community decide. In due course.
Additionally, The Red Ant has recently learned of AVH's "next" expansion effort -- above and beyond the aforementioned $120 million project. It seems that the Aspen Medical Foundation has recently commissioned a study for a separate, large "continuum of care" facility on another nearby site. This project will be comprised of 100 units for independent living, 40 assisted living units and 20 nursing home units. Yes, it's true -- our demographics are definitely changing. And this could likely enable AVH to convert the Whitcomb Terrace Assisted Living facility next to the hospital into affordable housing instead of building the new structures, but "Whoa, Betty!" This is an enormously ambitious financial undertaking for our community in a tough economic environment! The Red Ant does not see debt financing as free money -- probably because it's not. AVH's ambitious plans are clearly on the fast track for public financing. Let's get ahold of this runaway train.
COMMUNITY VOICES - NEW!!
The Red Ant is pleased to introduce a new feature that presents citizens' perspectives on the critical issues. Please enjoy and consider the contributions of Aspen Valley Hospital CEO David Ressler followed by AVH neighbor and businessman David Ducote on the subject of the AVH expansion:
- RESSLER
The current Aspen Valley Hospital facility was built in 1977, at a time when services were oriented toward inpatient care and longer lengths of stay. At the time, Aspen already had a substantial need for emergency and trauma services, thus resulting in a sizable emergency room for the size of the community. In addition, the hospital was ahead of its time by having included several private patient rooms, with the remainder of the rooms having two beds. The hospital was located on a beautiful large campus on the outskirts of town, with easy access for the community and plenty of room to grow and expand as needs would later dictate.
Today, the facility is over 30 years old and is no longer a contemporary example of a modern hospital plant. Healthcare is no longer delivered in the same manner as it was 30 years ago, and there are technologies/services provided today that did not exist when the facility was designed and constructed. Consequently, as patient care has increasingly shifted to an outpatient environment, and as new services and technologies have been acquired to better meet the needs of the community, the facility has undergone a transition in which the outpatient departments have invaded former inpatient spaces.
The impact of the invasion of inpatient space is that the hospital is now improperly "zoned." Inpatient, outpatient, service and public purposes are all inappropriately intertwined and commingled. In addition, there is inadequate space in virtually every department for modern patient-centered care, evidenced by a lack of privacy and "mix" of inpatients and outpatients. Curtains are often the only barrier between patients while walls are now the contemporary standard.
In 2005, the AVH Board of Directors commissioned a needs assessment to evaluate the facility's adequacy and determine if a "right-sized" hospital could be located on the existing site. The results of the needs assessment, which assumed the same breadth of services over a minimum 20-year time period, demonstrated that virtually every clinical department is approximately half the size that it should be by today's healthcare standards.
In addition, it was determined that the hospital campus should incorporate medical office space and co-locate local physician practices within the hospital they clinically support. This is an essential component of a modern healthcare campus and enables timely medical and surgical care to patients. Also, it affords patients with access to modern physician offices with the availability of the full range of diagnostic tests available on-site.
Finally, the needs assessment determined that the existing hospital campus was the best site for expansion. The Master Facilities Plan is the product of these efforts and represents a phased approach to achieving a modern and appropriately sized facility based on contemporary standards. It also achieves the explicit board-directed goals of being environmentally responsible and sensitive to the neighborhood and community impacts of light, noise and views. After a great deal of input and analysis, and with the support of the staff, it has been designed to serve the medical needs of the community for decades to come.
- DUCOTE
I writing to express my concerns related to the proposed Aspen Valley Hospital expansion adjacent to the Meadowood Subdivision. Meadowood is a low density neighborhood with vast open spaces, excellent views and a general feeling of integration into the natural landscape. Meadowood also maintains a large open area (adjacent to the existing hospital facility) for recreation, hiking and cross country skiing. This area is for the benefit of Meadowood residents and the general public.
Unfortunately, the scale and scope of some commercial facilities adjacent to Meadowood do not adhere to the benign characteristics of a residential neighborhood. The high school and hospital are both standouts in their respective visual impacts on the area. However, despite the size, unattractiveness, traffic demands, servicing requirements and other operational impacts of these types of facilities, hospitals and schools are clearly necessary institutions in a well-functioning community. The hospital expansion, as proposed, crosses the line between functional community services and related infrastructure which are responsibly planned -- into the area of public sector fiscal and aesthetic recklessness.
The hospital seeks to develop operational capacity so that it can effectively compete with newer, more efficient alternative health providers down valley. In addition to simply serving the primary community, the institution also wants to become a health services "destination." The fact that a proposal of this enormity is in process without material input from adjacent residential homeowners is beyond comprehension. In a municipality that micromanages every aspect of development and regularly intrudes on the private property rights of its citizens and property owners, how is a project of this financial and environmental scope sailing along without the typically arduous (and frequently ridiculous) obstacles placed upon other private developers?
I suspect that part of the explanation is that the quasi-public nature of the hospital, coupled with the umbrella of public need, effectively "immunizes" the institution and its plans from proper scrutiny. This should not be the case. The hospital expansion should be subject to the same public scrutiny, impact assessments and financial viability tests as any other project.
While the proponents will advocate that this exercise has been undertaken, the fact is, it has not. If a developer wanted to put 85,000 square feet of new retail, a 12,000 square foot office building, a 220-space garage and 22 condos on the hospital site, would we be having the same discussion? The fact that the hospital provides a necessary public service may mitigate traditional barriers to growth encountered in the Aspen community. It does not eliminate them.
The Aspen Valley Hospital project needs to be completely re-assessed. The hospital is aged, improperly sited and an outgrowth of ineffective historical planning. The expansion is a huge economic bet where administrative bureaucrats are putting substantial taxpayer dollars at risk in an uncertain environment. It is also too big and too detrimental to an area surrounded by residents, wildlife and untouched natural landscape. The "compounding" nature of the hospital's requirements, in that primary hospital space expansion begets the office space need which begets a huge parking requirement which all allegedly begets the criminally stupid 22 subsidized housing units, makes this project untenable as planned. Please seek a more rational and balanced approach to accommodating the healthcare needs of the Aspen community.
THE NEXT COUNCIL MEETING
City council will be meeting again on the subject of the AVH expansion, Phase 2, on Monday, June 28, at 5:00pm at city hall. There will be time for public comment. The Red Ant encourages you to attend.