SUMMIT COUNTY — Voters this November decide whether to approve Amendment 61 to heavily restrict local governments' borrowing and end state-government borrowing.

Though most local officials have taken a stand against this as well as anti-tax ballot items Amendment 60 and Proposition 101, proponents say the changes are necessary.

Erik Larsson, a local business owner who supports the three issues, said the amendment will be good for Colorado's economy.

“Say I didn't insure my car, I'd need to have a reserve of positive capital to pay for emergencies,” he said, adding that this can be likened to local government. “Instead of a line of credit, they need a rainy day cash fund. And that's what this will enforce.”

The following are some of the expected impacts to local-government entities if Amendment 61 passes:

The ballot questions Amendment 60 Limits property taxes, requires school districts to reduce property tax rates by half. Amendment 61 Prohibits state from borrowing money; limits local governments' ability to pay for projects through long-term financing. Proposition 101 Makes steep cuts to vehicle taxes/fees, state income tax and telecommunications taxes/fees.

Dillon

The Town of Dillon's debt already slightly exceeds the 10 percent limit (see box) on government borrowing, which would prevent any more loans.

The town's 2009 assessed valuation was $77 million, meaning the debt limit is about $7.7 million. Dillon's existing debt is about $8 million, according to town documents.

If a snow plow were to break in January and the town didn't have the cash to put up for a new one, it wouldn't have an alternative before paying down the existing debt.

Dillon town manager Devin Granbery said the debt limit of 10 percent of the government assets' assessed value could have serious impacts, depending on what type of borrowing is needed.

“Even if you get voter approval, you can't have” beyond the 10 percent limit, he said, adding that if the town were already at that level, no more debt could be taken out.

The town has bonds that mature in 2012 with an average annual debt payment of $197,170. If Amendment 61 were approved, the town would have to reduce the tax rate by that amount in 2013.

Breckenridge

Barring any need to take out a loan, the town wouldn't likely be immediately affected by Amendment 61.

But in 2013, Breckenridge will have two debt issues retiring, which would require a $926,000 reduction of tax revenue.

In addition, future needs — such as for the town's water utility — could make a 10 year loan costly for the taxpayers even though the benefit may be realized for several decades.

“It puts the burden on people in the town at the time,” said town financial services manager Brian Waldes.

Frisco

Based on existing debt levels, the town would have to reduce annual revenues by about $432,000 per year. That's nearly 75 percent of the 2010 cost of street maintenance and exceeds both “the 2010 cost of maintaining the town's public parks and landscaping, and the 2010 cost of operating the town's summer recreational programming,” according to a Frisco staff memo.

Silverthorne

Silverthorne has typically borrowed based on the life of its assets, and it would be an extra burden to pay off something meant to last a long time in 10 years.

Projects such as the town's recreation center and pavilion were paid off on bonds “based on the fact that a building will last 20 plus years,” according to a town staff memo.

If Amendment 61 were in place when the town's recently-retired 1998 excise tax revenue bonds would have been paid in 10 years, making the annual payments an average of $800,000 rather than $510,000.

Borrowed money is repaid tax rates must decline in an amount equal to planned average repayment. The town in 2010 is paying off $159,000 through lease payments and would be required to reduce revenue by that amount next year. Some years, the payments have been such that the reductions could have been $1 million, according to town documents.

Summit County Government

County finance director Marty Ferris said that in 2016, the county will pay off about $1.25 million in debt on the Summit County Community and Senior Center and the Medical Office Building, both in Frisco. If Amendment 61 passes, then 2017 property taxes would need to be reduced by about $1.25 million.

The county doesn't have any more building projects in the immediate future.

“We're not growing county government, so we don't need more buildings,” she said, adding that there has been some push for bigger libraries.

But she said that purchase of a snowplow, which costs about $250,000, is usually paid for with borrowed money.

“We don't generally have money lying around to pay for these kinds of things,” she said. “We do lease purchases of five years.”

She said that after the plows are paid off, they usually last an additional five years before a new one is needed.

If Amendment 61 passes, the county would have to wait until the following November to ask voters to borrow the money. Voter approval might even be required for the county to continue renting its copy machines, she said.

Special districts

The Upper Blue Sanitation District isn't likely to be immediately affected by Amendment 61, but emergencies at wastewater treatment plans tend to require a swift response.

“Say if we needed $2 million (for a) major breakdown,” district manager Andy Carlberg said, “For us right now, we're in the financial position that we don't foresee that happening ... But I could see it affecting smaller (districts).”

The amendment wouldn't affect Lake Dillon Fire-Rescue as significantly as other anti-tax issues because finances are set aside each year to make capital purchases such as new trucks and equipment.

“However, this measure would preclude the future use of tools such as lease-purchase agreements and bonds, limiting the department's financial opportunities,” Steve Lipsher, LDFR spokesman said in an e-mail.

*Note: For the effects of this and other ballot measures on Summit School District, see the first part of this series in the Oct. 4 Summit Daily, or go online at www.summitdaily.com.

SDN reporters Caitlin Row and Julie Sutor contributed to this story.

About the series

On this year's statewide ballot, voters will be asked to consider three questions that will have significant impacts on how state and local government funding works. Not since the passage of 1992's ‘Taxpayer Bill of Rights” (TABOR) amendment have Colorado voters faced such potential to change how government taxes and borrows. Proponents of the measures say it's all aimed at limiting government and lowering taxes, while opponents say they'll put the state in an even more dire financial position than it is already.

The Summit Daily's five-part series this week focuses on how these measures are likely to affect Summit County.

The series:

Monday: Impacts to Summit School District http://bit.ly/c8pr0R

today: Effects on Colorado Mountain College http://bit.ly/cN69Tt

Wednesday: Effects of Proposition 101 on local government http://bit.ly/dewfmm

Thursday: Effects of Amendment 60 http://bit.ly/boU3To

Friday: Effects of Amendment 61