As Keystone incorporation vote nears, its proponents and Summit County officials differ on the possible financial impacts

While both groups project similar revenues for a would-be town, they see differences for how much of it would need to be spent — and what would be left over

Robert Tann/Summit Daily News
Ahead of a March 28 vote that will determine whether or not Keystone will become its own town, Summit County officials discussed a report on the potential financial impacts to the area during a Feb. 21, 2023 meeting.
Robert Tann/Summit Daily News

Nearly a month before a vote in Keystone that will determine if the area will become Colorado’s newest town, Summit County officials met to discuss the potential fiscal impacts should its residents break away from being governed by the county.

A report by officials presented during a Feb. 21 Summit Board of County Commissioners meeting found similar revenue projections for Keystone as another report conducted by a nonprofit group of advocates for incorporation — known as the Keystone Citizens League. However, it differed on how much funding would be left over year-over-year based on the would-be-town’s expenses. 

“Both our assumptions are relatively close on revenues,” said David Reynolds, the county’s finance director. “It really comes down to the cost assumptions … between admin, public works, etcetera.” 

According to a county memo presented by Reynolds, Keystone is projected to bring in about $20 million in revenue over the next five years beginning in 2023. That projection was based on data compiled by a Colorado-based consulting firm, Triple Point Strategic Consulting, which the county contracted with.

A citizens league analysis projects that revenue will be $19 million over the same period of time. 

But county officials also estimate the town will spend $19.6 million over the next five years compared to an estimate of $14.3 million by the citizens league, though much of that is based on a 2021 report, according to Reynolds. 

Based on more recent projections in 2022 from the citizens league, Reynolds said that spending projection is likely closer to $16.9 million — a difference of about $2.7 million, or 20%. But even as newer data shows the citizens league’s projections have “narrowed the gap,” the discrepancy between that and the county’s model leave officials skeptical of Keystone’s fiscal sustainability. 

“The county analysis indicates that the town of Keystone general fund will be barely able to operate at break-even level after incorporation,” the memo reads. “The (citizens league) analysis is much more optimistic with surpluses contributing to a significant general fund reserve.”

The memo goes on to state that county officials do not believe the expenses projected in the citizens’ league’s model are “sufficient to operate the town of Keystone.”

The main discrepancies appear in projections for administration, public safety, community development and public works but also include what county officials said were bigger unknowns, such as housing projects. 

For example, the county analysis projects public works spending to be roughly $500,000 more each year than what is estimated in the citizens league’s model. In 2024, the county estimate’s Keystone could need to spend more than $644,000 on public works while the other model estimates spending of just over $218,000.

“You can’t buy a piece of heavy road equipment for less than $400,000,” Reynolds said. 

Financial estimates from both Summit County officials and the Keystone Citizens League show similar revenue projections for the next five years should Keystone become a town. Where the two groups differ, however, is in funds left over after spending year-over-year. This graph shows that county officials project that, after spending each year, the town would have far less remaining funds compared to projections by the citizens league, a nonprofit. 
Jenna deJong/Summit Daily News

But a memo presented to the Summit Daily News by Keystone resident Ken Riley, who represents a coalition of advocates for incorporation known as the Keystone Incorporation Committee and is also the president of the citizen’s league, disputes much of the county’s analysis and claims it is based off a “very early draft” of expense projections. 

The memo cites several factors as reasons for the discrepancies between the two studies including “inflated” expenses by county officials based on inflation-related costs that did not account for increases in sales tax revenue; county officials’ inclusion of “miscellaneous” expenses in each department and an alleged $130,000 per year in “double counting of costs.”

“The county’s analysis is designed to paint the incorporation picture in the worst possible terms,” the memo reads.

The push to make Keystone its own town, which will culminate in a vote from registered Keystone residents and property owners on March 28, marks the second such effort to do so in more than two decades

With a petition last summer from residents and property owners that garnered enough signatures to trigger an official election, proponents of incorporation have made the case that it will be better for the community’s needs. 

A one-page memo provided by Riley lists several areas that he and others believe will be improved should Keystone become its own town. That includes traffic and pedestrian safety issues on U.S. Highway 6; lack of consistent law enforcement presence; lack of child care infrastructure and land regulation rules that are “based on unincorporated Summit County needs, not Keystone’s,” according to the document.  

Riley, in an interview with the Summit Daily, said he feels that by the county releasing its cost analysis weeks before the March 28 vote, it is “designed to try to influence our election,” and claimed that if “Keystone incorporates, the county is going to lose over $6 million a year in revenue.”

County spokesperson Dave Rossi, in an email, stated that Riley’s claims “are false” and said county data shows that number is closer to $4 million.

Commissioner Tamara Pogue, during the Feb. 21 board meeting, said some some fiscal information has become muddied as conversations around budget impacts to Keystone and the county unfold.

“One of the assertions,” Pogue said, “is that the county is somehow keeping money or making money off of Keystone. Our analysis would indicate that’s not the case.”

Reynolds, the finance director, agreed with that to which Pogue said, “what Keystone is contributing financially, we are contributing back.”

Commissioner Josh Blanchard, in a nod to complaints from some Keystone residents that have fueled the incorporation effort, said commissioners remain committed to supporting the community — and questioned if incorporation would best position Keystone to do the same. 

“There’s no doubt that this (board) takes care when we think about Keystone as part of unincorporated Summit County,” Blanchard said. “Any assertions in terms of not being concerned or staying at bay in this conversation isn’t necessarily true … the last thing we would want is for any resident in Keystone to be put in the positions where services or programs are limited.”

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