{"id":15740,"date":"2025-11-10T17:36:02","date_gmt":"2025-11-11T00:36:02","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/cortez-overcollected-tax-for-years-despite-2018-vote-to-reduce-it\/"},"modified":"2026-03-31T03:50:32","modified_gmt":"2026-03-31T03:50:32","slug":"cortez-overcollected-tax-for-years-despite-2018-vote-to-reduce-it","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/cortez-overcollected-tax-for-years-despite-2018-vote-to-reduce-it\/","title":{"rendered":"Cortez overcollected tax for years despite 2018 vote to reduce it"},"content":{"rendered":"

\"The
The Cortez Recreation Center, shown in early November. A sales tax in Cortez was established in 2001, providing money to build and run the center. Voters approved a 2018 ballot measure to extend the tax at a reduced rate. City officials recently discovered the city has mistakenly continued collecting the higher rate. (Benjamin Rubin\/The Journal)<\/span><\/figcaption><\/figure>\n<\/p>\n

Cortez officials revealed in October that a city sales tax to fund the Recreation Center was collected at a higher rate, even after voters approved a reduction in 2018.<\/p>\n

City Manager Drew Sanders told City Council in mid-October that the collection rate of 0.55% \u2013 meant to be reduced to 0.35% in 2018 \u2013 had gone unnoticed for years.<\/p>\n

\u201cWe have been collecting at the 0.55% rate all along, unbeknownst to any of the current staff or the current council,\u201d Sanders said during the Oct. 14 meeting. \u201cBut because we found this, we are obligated to bring it forward and present it to council and the community.\u201d<\/p>\n

Put differently, for every $10 spent at a Cortez business, 5.5 cents have gone to the Cortez Recreation Center, even after voters opted \u201cyes\u201d in 2018 for that amount to be 3.5 cents.<\/p>\n

Based on preliminary calculations made by The Journal<\/em>, the city might have overcollected an estimated $2.6 million from the start of 2022 until September this year.<\/p>\n

Cortez\u2019s financial statements from 2017 to 2021 were not immediately available on the city\u2019s website. The Journal<\/em> filed a Colorado Open Records Act request the statements Monday morning.<\/p>\n

Sanders told The Journal<\/em> Monday afternoon that the city had not yet calculated how much was over over-collected, so he could not comment on the accuracy of our estimate.<\/p>\n

\u201cThat\u2019s not our focus right now,\u201d he said. \u201cOur focus is how to address it and get it dealt with immediately. This is something that happened before we were here.\u201d<\/p>\n

City Council will hold a public hearing at its Wednesday, Nov. 12 meeting, during which elected officials will likely pass an ordinance to reinstate the 0.35% sales tax rate approved by voters in 2018. The previously seated City Council was supposed to have passed an ordinance putting the approved ballot measure in place. That never occurred.<\/p>\n

Some questions remain unanswered. It\u2019s still unclear how the error persisted, how much exactly was over-collected, and what other approaches the city might take to address the mistake.<\/p>\n

\u201cWe will investigate and try to figure out exactly how much it was,\u201d Sanders said. \u201cWe want to be open with the community.\u201d<\/p>\n

Voters keep sales tax at reduced rate<\/div>\n

Sanders told councilors that voters approved a measure in 2001 allowing for a 0.55% sales tax intended to help construct the Cortez Recreation Center. Money from the tax was supposed to keep the building running and pay off debts tied to it.<\/p>\n

The tax dollars used to fund the 46,000-square-foot center were scheduled to expire in 2018. In April 2018, Cortez voters approved a measure to reduce the sales tax by 0.20 percentage points, Sanders said.<\/p>\n

The Journal <\/em>reported <\/a>that the vote passed 1,009 to 465.<\/p>\n

Sanders said City Council at the time was supposed to pass an ordinance amending the tax, following the decision made by voters.<\/p>\n

\u201cDuring the budget preparation this year, we inadvertently came across this and realized that never occurred,\u201d he said during the Oct. 14 meeting, adding that the mistake was discovered three weeks prior.<\/p>\n

The additional 2 cents per $10 spent have gone entirely to operating the Recreation Center, Sanders said. Debts associated with the center\u2019s development were paid off in 2022, he said.<\/p>\n

\u201cWe cannot and have not used that for other funding streams,\u201d Sanders told The Journal.<\/em><\/p>\n

How is Cortez addressing the mistake?<\/div>\n

On Wednesday, Nov. 12, City Council is slated to consider amending the city code \u2013 through Ordinance No. 1350, Series 2025 \u2013 establishing the sales tax approved in 2018. That date will include time for a public hearing.<\/p>\n

Oct. 28 was the original date set for the ordinance to be considered on second reading, but a processing error led to delays, Sanders said during the evening\u2019s meeting.<\/p>\n

\u201cAs far as we can tell no, there is not a statutory penalty of any kind,\u201d Sanders said Monday. \u201cBut that doesn\u2019t make it right.\u201d<\/p>\n

Sanders said that correcting for the sales tax mistake would be tricky. Tourists visiting Mesa Verde National Park and other attractions pass through Cortez, with various estimates pinning dollars spent to the tens of millions. Plenty of that money inevitably goes into the rec center sales tax.<\/p>\n

The city has not been in touch with any relevant Colorado agency about the matter, such as the Department of Local Affairs, Sanders said.<\/p>\n

Cortez Finance Director Randy Bailey responded to The Journal<\/em> in an email last week that more comment would have to wait until the week of Nov. 10. Bailey did not respond to a request for comment Monday.<\/p>\n

\u201cI will add, this ordinance was brought forth with urgency for council consideration given the date of the action authorizing it, and the rapidly closing window to implement the change at the start of the fiscal calendar should council approve the ordinance on November 12th, and desire the earliest effective date possible,\u201d Bailey said.<\/p>\n

\u201cResearching the history of this matter in detail will be our focus after the ordinance is approved, and we have a plan for implementation by the effective date,\u201d he said.<\/p>\n

\u201cThe city was in trouble back then to the tune of being behind five years in audits,\u201d Sanders said, referring to Cortez in 2018. \u201cWe inadvertently found this problem. I called the council immediately.\u201d<\/p>\n

On Oct. 28, Bailey told City Council that the 2026 proposed budget presentation was accommodating the shift in sales tax, given the ordinance likely to be passed by councilors.<\/p>\n

\u201cWe\u2019ve also adjusted downward the sales and tax revenue forecast for the recreation center fund in light of Ordinance 1350 that is currently in process,\u201d Bailey said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Council looks to pass ordinance establishing tax originally lowered by voters to fund Recreation Center<\/p>\n","protected":false},"author":1,"featured_media":15741,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[28,29],"naviga_topic":[],"class_list":["post-15740","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-headlines","tag-newsletter"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/15740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=15740"}],"version-history":[{"count":2,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/15740\/revisions"}],"predecessor-version":[{"id":19818,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/15740\/revisions\/19818"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/15741"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=15740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=15740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=15740"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=15740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}