A sales tax used to fund Cortez’s recreation center has officially been reduced to the rate voters approved in 2018 after the city revealed it had mistakenly collected a higher amount for years.
City Manager Drew Sanders told City Council in mid-October that the 0.55% collection rate – which should have dropped to 0.35% in 2018 – went unnoticed for years. Sanders said Wednesday the error was discovered Sept. 25.
On Wednesday evening, City Council passed an ordinance restoring the 0.35% sales tax rate approved by voters seven years ago. The previous council should have passed an ordinance to implement the ballot measure, but it never happened.
In a unanimous vote, the current council corrected the error. Questions remain about how much was collected under the 0.55% rate and the steps the city will take to address the mistake.
“Our purpose right now is to come to you, and by extension the community, quickly, declare the omission that occurred and get that corrected,” Sanders told City Council Wednesday night.
“We will and are working on trying to figure out what how much we actually took in erroneously during that time so that we can accurately declare that.”
Based on preliminary calculations by The Journal, the city might have overcollected about $2.6 million from early 2022 through September.
Cortez’s financial statements from 2017 to 2021 were not immediately available on the city’s website. The Journal is awaiting data after submitting a Colorado Open Records Act request Monday.
Sanders told The Journal Monday afternoon that he could not yet comment on the accuracy of our estimate.
“What safeguards do we have in place to make sure this doesn't happen again?” said Councilor Bill Lewis. “I mean, it's easy for us to say, ‘well, those (past City Council members) aren’t here anymore.’ But you know, I think we need to have a better answer than just that.”
“I guess for your answer, Bill, I think it’s on us,” said Mayor Rachel Medina. “It’s on the elected body to to make sure that we're holding staff accountable.”
“As soon as it was brought to our council's attention, the direction was fix it now,” said Council member Robert Dobry. “Don't wait through the end of the year. Don't wait through anything. And our goal is to fix it as soon as possible and then we'll figure the rest out from there.”
Sanders said nothing in Colorado statute penalizes Cortez for making such a mistake.
“As far as we can tell, no, there is not a statutory penalty of any kind,” Sanders told The Journal Monday. “But that doesn’t make it right.”
The city has not been in touch with any relevant Colorado agency about the matter, such as the Department of Local Affairs, Sanders said.
“I would just say this comes at a really bad time, but this is the right thing to do,” Lewis said before making a motion to put the council’s vote into place. “And not only is it the right thing to do, it’s the only thing to do.”
