Longmont City Council met on January 7, 2020 to discuss metro districts.
Meeting Transcription Disclaimer:
Note: The following is the output of transcribing from a video recording. Although the transcription, which was done with software, is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or [software] transcription errors. It is posted as an aid to understanding the proceedings at the meeting, but should not be treated as an authoritative record.
To listen to the meeting alongside a transcript, please visit: https://otter.ai/s/hI8BqR7FSmaIsRL4a5qROg
For a transcript of the meeting, please read below:
One two test
Um, I can just I can tell I’m going to be here tonight. So that’s what you’re seeing me. You You’re seeing me do that. Yeah I’ve done this 1000 times, literally 1000 times
Alright everybody, we’re gonna get started. Looks like every everybody’s ready to go. So we’ll start with the roll call please, Lucien
Mayor Bagley council members Christiansen Hidalgo fairing,
Martin. Peck. Rodriguez
here, Martin. Oops, sorry. There’s two Martin’s and waters.
Okay, at this time, I’ll entertain any motions that are not pertaining to the subject matter tonight. If there is any. Seeing none, we will, I guess start with our first presentation.
MaryAnn McGeady , would you like to go first?
Thank you. So my name is MaryAnn McGeady. I’m with the firm of McGeady Becher
been practicing in the area Public Finance and particularly working with special districts and
bankers get really in on that mic for me,
okay, there. Wow. Okay, I can hear it now. Okay, so again MaryAnn McGeady with McGeady Becker practicing in public finance, particularly organizing and representing special districts since 1982. appreciate this opportunity to speak to you about Metropolitan districts, and have a brief presentation to provide and then I’m available for any questions that you might have. Um, I understand our time here today is limited. So if you have questions that occur to you after the session, or if you have questions during the session, we don’t have time to answer I can always submit a response in writing, and everyone can have the benefit of that. See if I can use the technology.
Perfect. Thank you. Okay, so first history of special districts. There has been some suggestion that special districts are new in Colorado and wanted to clarify that special districts began in the statutes in the state of Colorado. To provide services to early mining camps, they needed roads, they need water, they needed sewer and other services, towns and counties didn’t want to pay for those services. And so the statutes were changed to allow districts to be organized for that purpose. During the 1970s, there was some revision to those statutes to make them more efficient, and to be consistent between in among the different statutes. And in 1981, there was a consolidation of the special district statute so that instead of having four or five, six different districts for the different purposes, if you needed more than one type of service, you could combine those services and have them provided by one district. Okay, so challenges facing jurisdictions and land developers today are how to provide necessary infrastructure for development, or redevelopment projects. How to utilize public financing to pay for public improvements that allow development to pay its own way, assures all phases of public improvements are financed and completed, just like when the mining towns were developed and developments Through the 70s into the 80s. And through today, existing cities existing county taxpayers don’t want to pay for future growth. And that’s where special districts come into play. So how do we share their sufficient revenue sources and a governance structure to fund operate, maintain public improvements? All the city does not plan to fund operator maintain, and how to assure, again a current challenge how do we share a consumers access to information regarding districts existence, its purposes, taxation and debt authority and other district information. So what is a special district, basically a quasi Municipal Corporation and political subdivision and that’s kind of short speak for local government, a local government with limited powers that are established through its service plan. There’s many different types of special districts. This presentation is going to focus on Metropolitan districts. This is a chart on compiling information from the division of local government. And for everyone’s information, if you’re looking for information on specialist districts the divisional local government website is a really good place to go. That’s where all the districts how’s their service plans, they’ve held their budgets there. they file their audits their their boundary map. So it’s a treasure trove of special district information. In terms of the number of Metropolitan districts in the state, you can see currently, as of January 7 2020, what’s posted on their website is that there’s 1827 Metropolitan districts in the state of Colorado. So, a little more on what is a district simply a special district that provides any two or more services permitted to be provided by district. Metropolitan districts are utilized to fund a wide range of public improvements necessary to support commercial and residential development. So how is a district formed? Generally there’s a service plan submitted, considered and if approved by the county or city that the properties within then the service plan is submitted with a petition For organization to the district court, that petition has to be signed by certain percentage of representation of the land to be taxed by that district. The court conducts a hearing and orders and an organizational election unless it determines that the statutory procedures for organization haven’t been met. At the organization election, if all the questions on regarding organization and taxation are passed, that result is certified back to the court. And if the court feels again, that the jurisdictional requirements have been met, and the election passed, that they approve an order and to create creating that district, once that order is recorded, that entity exists. So in the beginning, why, why a district? Well, why a district is because in this jurisdiction, it would be a city approves a development. The city approves a development and determines that there’s public improvements that needs to be financed and maintained that the city does not want to that are necessary, and that will help to meet the objectives of the city. It also is an effort to assure That the most efficient financing through long term tax exempt debt is provided that can only be issued by a local government. And in this assumption is the city does not want to be that government.
So, why use Metropolitan districts to finance public improvements and the writings getting small, so you can look at the presentation in front of you wanted, it can assist in achieving goals and I understand some of the goals that you’ve articulated for your community is inclusionary housing, some is enhanced community amenities, some is a delivery of certain infrastructure that goes beyond what’s on site for that particular community or subdivision and then efficient maintenance of community amenities. And just want to note there if a homeowner’s association maintains an amenity, then it is exclusive to that community. If if the amenity is maintained by a special district. It is a local government and amenity and is needs to be available to the general community in a similar fashion. to zip the city on that amenity.
General excuse me,
the district would generate an independent source of revenue to finance the cost of construction, operation and maintenance of those public improvements assuring that the growth that would occur because of that development pays its own way also enables a community to address infrastructure needs while allocating costs to everyone in that community. It also can facilitate relationships between other types of entities and I’m not sure if you’ve had projects you have that are facing these types of challenges. But if there is a possibility of sharing revenue or coordinating projects with si dot RTD, with your city with the county with other districts, this kind of entity could enter into those relationships through intergovernmental agreements and create pen have creative financing solutions to complicated infrastructure issues. So and lastly can provide for perpetual operations and maintenance of public improvements. Some of the feedback that We’ve gotten from municipalities and counties, particularly on improvements, like drainage improvements is working with homeowners associations can be frustrating, because sometimes they don’t maintain those improvements to the standards that the city or the county would desire. And so having districts be responsible for those things having intergovernmental agreements between those districts of the city or county that are enforceable assures that the important detention matters, retention matters. Landscape areas, those things that are important to both parties aren’t maintained into the future. So organizational elections, Tabor, I understand there’s been some questions about why are their elections held before the residents live there? Shouldn’t the residents have the right to be voting on the debt to be issued and to be voting on the taxation? So one of the points I wanted to share is about the Tabor amendment and how it functions when the taper amendment was drafted in 19 9200. voted on in by voters in the state. It was drafted with the assumption that there is a base of assessed valuation. So if you’re the city of Longmont, in 1992, you had provided services for many decades. So you had a certain assessed valuation, you provided certain services you had those numbers to work from. And every year as your city grows, you have a base adjustment based on the constitutional calculation, and that advances your ability to provide services. If you want to provide services beyond that formula, you have to go to a vote and increase your revenue streams and your expenditure caps. So with a special district when it starts, its base is zero. And so to go, it has to have an add its organizational election questions passed so that it can tax to operate, maintain and administrate and so that it can issue debt. It’s voting those things within the parameters of the service plan, that the jurisdiction that approved it to become into existence approved. So it doesn’t have of an unlimited ability to to vote those questions and to implement or execute its plan. So, again to focus here, who are the voters at that time? Again, it’s been brought up in many articles and discussions about is it fair who those voters are are the current property owners because the development hasn’t occurred yet. There’s no one living there. The only people who can vote are nominees or those with relationship with a developer or landowner in that property. Again, the purposes are limited to the surface plan that was approved by the jurisdiction. And the issuance of debt based on that voter authorization is, is confined and restrained to what’s allowed under the service plan. Okay, so what’s in a service plan? And I think looking to the requirements that you currently have, in your ordinance about service plans, and also the one service plan that you recently approved, you have a good example of what a city can do to assure that it’s about Use its boundaries are set forth in that service plan. And in looking at the service plan that was approved in your ordinances, some of the things that you have focused on and seemed to be important to you would be limiting compounding interest on debt, limiting the number of years of taxation for debt repayment. And we refer to those as debt mill levy. And how many years Can you impose a debt mill Levy, another is a limit of the amount of taxes that can be imposed annually. And again, that’s referred to as a mill levy limit.
Next is required disclosure. We want to make sure that consumers who are acquiring property in districts know about the district and your ordinance requires that the service plan you approved requires that next is a requirement to submit debt that is proposed to be issued in the documents related to that to the city for review to confirm that there’s compliance with those limitations in the service plan prior to the issuance of any series of debt. So that’s in your ordinance and also in the plan. The last And next is also a requirement that any property that’s added into the district’s boundaries, that prior to that inclusion, the city has consented to that so that you don’t have the district kind of mission creeping around and providing services to property that you didn’t agree should receive property from that district. Last, clearly a to be articulated in the service plan in your ordinance but also in any debt that’s issued by the district that the city has no responsibility for payment of that districts debt, that it is that the obligation of the revenue streams the district has and the community has that served by that district, not the general city. I should stop and say does anybody have questions for me so far? It’s kind of a lot to chew on. Okay. governance. So who governs the special districts? under state statute they can be organized to have a five member board or seven member board. The initial board is elected at the organizational election. districts are elected for us. staggered four year term. So the hope is that you don’t have all all five or all seven board members turning over at the same time who can vote or who can serve. So to serve as a board member, you have to be an elector, basically a voter. To be a voter, you have to either live in the district and again, at the time of organization, no one lives there. Usually, next is if you’re not living there, then you have to own or have a contract to purchase pursuant to which you’re obligated to pay taxes, or have a spouse or civil partner who owns or has such a contract. And so when districts are organized frequently, that’s what you you would understand that the individuals who are serving on that board either own a piece of property as an individual in that district where they have a contract to purchase. One thing I want to mention about special district elections for directors, which is a little bit different than other kinds of local governments, is under the state statutes. There’s a call that the elections happen in May currently and even numbered years. And there’s a call for nominations that is published, I believe it’s either February, it’s in February, end of February. And if the district does not receive self nomination petitions for more candidates than they have seats available, the district’s cancel the election under the state statute. And the reason the statute is written that way, is because districts have limited sources of revenue. And the thought being at the legislature is that if you don’t have more candidates than you have positions available, that there’s no need to spend the money to have a full election and vote into office, the one candidate who’s running for the one position that’s available. So any questions about that? Okay. And those publications are made in the newspaper. So usually they’re made in the either the Denver Post or the local newspaper, because they have to be a paper of general circulation. For that district,
okay, transparency district, there’s been a lot of conversation about transparency. And do districts have an obligation to be transparent? And yes, they do. They have the same obligation to comply with Open Meeting laws, open Records Act election laws, as other local governments, including the city. In addition, they have a requirement to file transparency notices, a transparency notice is a list of contact information for that special district, it also list who’s on the board and what their terms are, and then who you contact so that if you want to serve on that board and running an election or be considered for appointment, who do you contact, that information is in that transparency. Notice, under the state statutes that transparency notice can be filed with the special district Association, and they put it on their website. So if you are interested, as I am about special districts, you can just google Special Districts Association Colorado, because there are special districts and other states so if you don’t put Colorado After it, you might end up in California or some other state special district organization. And you won’t find the transparency notices there. But if you Google it, you’ll have a transparency toggle you, you click on that. And then you can search for any special district that is a member of the special district Association. And that’s pretty much almost every special district in the state. So that’s where those transparency notices are next. It has been a part of the conversation in the special district community about enhancing its accessibility to consumers. The information about the districts and one solution for that is the state legislature has made available, the ability for districts to have websites through sipa, the state portal and so it doesn’t cost very much now for districts to have that and I know in this last year in 2019, almost every district that we have, represent and many others have a double Did resolutions to contract with sipa and have their website established there? What they can do is in addition to posting meaning noses there, they can also post their minutes their their budgets, their their audits, their maybe important agreements, so that those things are available to members of the community. Another thing that’s been under conversation is use of social media. Create, and we have some districts that we work with that are starting to do that, do videos on that, whether you’re and again, this is a difference between homeowners associations, and special districts which are governments. If you go to a homeowner’s association website, you can only get into it if you are a member. If you’ve ever tried to get into an HOA website for a community you don’t live in but you can’t get in for a special district websites. It’s open to everyone anyone can get in. And so the idea is to try to put up videos and again we’ve got a few who do this so that you can click on the video how to read my property taxes, how to read my water bill. You know who’s Providing my covenant enforcement services and so that that’s easier for people to access than reading documents, and particularly reading documents that get recorded. I read a lot of documents that are recorded, it’s not most people’s habit.
And we’re fortunate to be in 2020 that we can use this technology now.
Again, accountability, districts must comply with service plan provisions that you approve. They also have requirements to report to you on their compliance with their annual reports. They also have requirements to adopt budgets and work within their budget and appropriations. They have audits they have to do and also public bidding of projects. Okay, so Metropolitan District services, unless limited by a service plan, a district may finance construct, operate, maintain all of this list of improvements. I won’t read it to you, but I think you’re probably generally familiar. And for most districts, they don’t have the entire list there’s, you know, a selection of which of those power They need for the particular project. Okay, so what are the common powers of special districts one is to levy and collect taxes to issue debt to impose and collect fees rates, tolls, charges, enter into contracts, agreements, acquire, sell and lease property, adopt rules and regulations create enterprises establish a special Improvement District. Again, their ability to do any and all of these things is addressed in every service plan. Some service plans are very broad and give them the ability to do anything the statutes allow some service plans are more limited. Under your ordinance more limited says very specifically what a district can and cannot do. Additional power some districts provide covenant enforcement design review services, so instead of having an HOA and a district in the same community, you have the district to all those services. Security Services is is another power. Again, I don’t know how relevant to the projects that you work on but in some air, some Metropolitan parts of the metropolitan area There’s a need for more security than and give support to the police department security services can only be provided if that district has an agreement with the police department. So they can just often hire and managed security services without an agreement to coordinate those services with the police department, its Police Department says no, then they can’t use that power. And then business development support. Okay, so again, for special district governments, they have to comply with all the laws that apply to all other governments, they have to comply with their service plan requirements. And then they have to apply with whatever policies and procedures the local government has adopted from time to time. And so there are jurisdictions that revise their policies from time to time. And so in addition to what’s in the service plan, the special district often has to look back to your changing policies to make sure they’re in conformance. Okay, so how are Metro district improvements finance through the issuance of general obligation bonds which are paid out of their property taxes already? revenue bonds. revenue bonds is a reference to a district that’s issuing debt that has more sources of revenue to pay back of in their own property taxes. And so we talked a little bit earlier about revenue sharing agreements, doing documents with other governments to share projects, and that’s an example of where you might end up with a revenue bond. Okay, also Metro districts can apply for grants and loans. Frequently, service plans will constrain how a district can do that because they don’t want the cities or counties don’t want districts competing with them for grants or loans. But there are certain grants and loans that districts can get access to that cities can’t that could bring money into the project to benefit the community. Less I just put up just for general information that districts can do special assessment bonds through si DS they can organize renewable energy and energy efficient improvements, again, would be addressed project by project in the service plans that you consider approve a district without it being in their service plan cannot use that power. So what are a metro district sources of revenue, we talked about their property taxes. They also impose chart facilities fees or systems development fees that are one time fee paid before building permit. They may also depending on kind of services they provide or programming, they have my charge some recurring fees, similar to HOA fees. Or they also share in the specific owner ownership taxes.
So last slide here is about property owners associations versus special districts and sometimes people have questions about that. Frequently asked, Well, why can’t you just use an HOA to do all of these things and again, couple of points one, hoa is don’t incur debt and issue debt with the same long term repayment and also with the tax exempt status and so they don’t get the same interest rate or benefit to the ultimate consumer that you get through a special district. special districts have broader powers that Hoa income provide a broader range of functions and services. Again, we talked about what their revenue streams are and they are very different. During recessionary cycles, I frequently get calls from Hoa saying, Can you turn us into a metro district? The reason for that is their frustration that during stressful economic times, hoa people stop paying their HOA dues. If there’s foreclosures, they don’t get to collect all the dues, because there’s forgiveness, I think it’s about six months worth of past due HOA dues you can get in a foreclosure and then the bank doesn’t have to pay anymore. And so what that does is shifts the costs to the other homeowners to pay for maintenance that the distressed properties didn’t pay their fair share of And so again, we get those calls, particularly during distressed periods in the economy, can you Marion, take my Hoa and make it a district. So I think that’s all that I had. I don’t know if I went over my 10 minutes or not. I wasn’t paying attention but if I did not I can reserve that time for questions.
So I prefer,
I believe the format tonight calls for the the next presentation and then we’ll have a question period after that.
Okay. Thank you. Thank you.
Good evening. My name is john Henderson. I’m also an attorney but I’m not here representing anyone. Throughout my work on special districts, it’s all been volunteer work, largely an effort to educate, identify issues, and hopefully work together to address solutions. Can you hear me better okay. My journey started, when I started working with a group that was opposing development around dinosaur rich. I’m hopefully you all are familiar with it. It’s a wonderful facility just in the foothills there near the intersection of I 70. And see for 70 they were planning to and circle in golf. Our perspective buried Dinosaur Ridge with four large car lives. As a result of working on that project. We accumulated a lot of documents, and the course of going through those documents. I kept running across these things called special districts. I had no idea what they were. I’ve lived in own homes in four different states and had never heard of special districts before. And every time I turn the page, it got worse and worse, and more and more, literally frightening. The immediate question I had was our community was very close to that area. And they had built a intersection to facilitate the development of these car lots or whatever else was going to be there. And now they’re proposing warehouses in order to facilitate the development there. My question was our community which was down the roadways, I thought might be contributing to the cost of that intersection wasn’t our intersection. It wasn’t within our district. But as it turns out, yes, we were, they were using money that you would normally think was going to be spent on infrastructure, lot fees, they were siphoning that money off. And they’ve made themselves a $10 million loan, backed by our money to build that intersection. So I’m here to share with you as I have as on as many occasions I have to simply talk to people about our experiences was special district abuse. In a limited time I I’ll hit the highlights. I spent hours at my kitchen table talking to folks about these would be happy to share some of that information. If you all have specific areas of concern. I’ve written over 60 blogs on the issues and continue to write and and learn as we go along. So one of the issues one of the critical issues is this question about voter rights in our community and soltera, as in every community that has created a special district, like ours, and like the one that you all just recently created. The most important thing that happens is they take away the right of future residents. vote on future debt. Take it away. It’s eliminated. So when future residents move in there, they have no right originated with the constitution that Tabor men that they have no right to vote on future debt.
Instead, that power
is assigned to the board, the Board of Directors. And as you know, from your experience, the Board of Directors is the developer. As we heard just a few moments ago, there’s nobody living there. And when you look at the ballot issues that were attached to your service plan, you see who’s being proposed as the board of directors. There are three names as I recall, and those three people are the developer or the developers, employees or associates same thing and our community. There were, as I recall, four or five individuals, they were all, either the developers officers, or employees of the developer. And in fact, what we learned later learned, attending meetings. Those individuals were professional directors. They served on at least 10 1220 boards. This is what they did. This is what they did as part of their employment for the developer making decisions about taxing and spending. For those residents, who had no power had no power to vote and to vote on future debt was completely eliminated. We in our community, recall the board of directors once our community woke up after 11 years, but we’re not done. Yeah, we got them off the board. But there still remains that ballot issue that was passed in 2006. That says the residents no longer have the power to vote on future debt. We need to eliminate that. And we’ll be starting a campaign tomorrow to repeal it was valid issues. The ones that were passed by the eight voters were all employees of the developer in 2006.
not only did they eliminate our right to vote on future debt, with those ballot issues, and they’re identical to the ballot issues that were attended to your service plan, that development that you all are that service plan that you all approve in the ballot issues does the same thing. It eliminates the right of the future residents of that neighborhood to vote on any future debt. Here. Not only did they eliminate that, right? eliminate that, right? But when you move into or when you enter into a contract purchase a home and a special district pursuant to the statutes, you are automatically bested as an eligible voter. You don’t even have to move in yet. As long as you have a contract, you can vote and you can serve on the board.
Think about this for just a moment
in our community for 11 years, and another community we’ve been meeting with and sharing stories with a number of other folks in the Front Range have had similar experiences and other community was 20 years, for 11 years and for 20 years and that other community and I’m sure it’s routine and the others, they canceled the elections. And you heard Why? Because nobody Do you want to vote or nobody wanted to run? Now, just think about that for our community, a lot of retirees, a lot of folks who are actively engaged in our community. We had several entrance instances, folks that we talked to said, we went to the meeting. We said we wanted to be on the board. But they told us now we’ve already made appointments. You know,
we don’t need your services.
Will we also found out as we were knocking on doors for our recall petition, we had residents tell us well, they told us in public meetings, that we could not vote and we could not serve, until the development was built out 75%. That’s simply what’s false.
for 11 years, for
for 11 years,
we did not have the right to vote.
And why? Because if the residents sat on the boards, they would have the same power, issue debt or not issue debt that the developers had. It wasn’t until 11 years and the community woke up. We did a recall campaign. And literally minutes before that recall was certified a sufficient they all resigned. And parents ethically Why did that happen? Why did they do that? They did not want the recall to become a matter of official record. Because what they have to do when they issue those bonds, and if you refer to the documents that I gave are distributed to you and they’re not in any water. But the last document their set begins outstanding and authorized but in an issue. It says that in 2006. Now this is a document that is being distributed to potential bond investors who are willing to buy the bonds that the developer is issuing to repay their loans. This bond says to the bond investors at the 2016 election, the qualified electors for each of the districts voted to go into debt for as much as 4.9 billion out the zeros billion dollars. It’s actually saying the residents in 2006 were really happy about going into this debt. And you should buy these bonds because they’re really anxious about paying you back. Of course, what they don’t say in this document its financial document to the bond investors is the only voters in 2006. Were employees of the developer. And by publishing having to disclose in that same document, that there was a recall petition, and why there was a recall petition. Those bonds wouldn’t sell. The other issue. We’ve talked about taking the right of the voters away to issue debt. We’ve talked about the general right to vote. The other thing that happens in those ballot issues and the same thing and your ballot issues are the ones you just saw and the same and ours is they basically write themselves in blank check for the finance. Now there are some numbers in the service plan. I believe it was $25 million $25 million. And that appears in the service plan to be the cap the cap of debt. And then there’s a reference to repayment. The details in the ballot issues though tell you a different story. In the ballot issues, there is a maximum debt of $25 million. But it’s times I believe it’s six in your case. In our case, it was 10.
In that same document
that I shared with you. What they do is they add up all of those limits, so each ballot issue is added So I think there were six. So you multiply that 25 million times six, that’s the real debt limit, not what was in the service plan. And then the maximum amount that can be financed, is also multiplied. And I believe in in
in your ballot issue.
have to check it I don’t recall right offhand, but I think it was 205 million. Again, that’s multiplied. It’s multiplied by each ballot issue. This is the what I’ve shared with you as the expert, is what the bond says. And the bond says to the bond investors, the total amount of debt and the total amount of financing for that is a multiple of what’s in each of those issues. One of the issues that we had or and still have is, how is this financing work? So let’s step back a minute as to literally, how does this work? Start with dirt, prairie dogs, rattlesnakes, couch and occasional mountain lion in our area. And there is there are no people. Now we heard just a few moments ago that the purpose of these districts is to finance the construction of infrastructure. And that’s true. There’s simply no purpose. There was no purpose for these districts other than to pay for infrastructure. And we know how it was done in the past and in many most other jurisdictions. And that is the developer uses their capital their money to build the infrastructure.
Back in the old days,
they’d go to a bank, you’d have a loan officer supervising, supervising that to make sure the money was spent for what it was supposed to be spend for.
Just think about that for a minute.
In our community, and I assume it will be true for this, this new development that you all have. They have the money. Money is already there. In our case, they spent whatever it was, and we still don’t know, because they won’t tell us. They spent, let’s say $30 million to put in the infrastructure for about 1400 homes.
Let’s assume that
they had the money. They paid it. The pipe was paid for The holes were dug, the connections were made, all of that infrastructure went into place. They didn’t need any of the communities or the residents money to put those pipes in the ground. They had that money already.
what this is all about
is repaying that. And with all due respect, generating and outrageous profit margin for the developers. What they do what they did in our community, is they say, okay, we put that money in the ground. You residents have to pay us back, even though you’ve already paid for the lot.
it You do the numbers. And again,
we don’t have all the details. But if you do the numbers based upon past experience, I’m kind of old in the old days. I’ve represented developers in the past and prior jurisdictions. When you pay that hundred thousand dollars for the lot or $50,000, a lot of it goes for the cost of the lot. In our jurisdiction, it was pennies on the dollar. I talked to the bankers, it said that those lots were paid for by the bankruptcy payment.
The prior developer of our area went bankrupt.
So how did they pay off that bankruptcy 20 mils to the residence goes to pay for the mount carbon bankruptcy. So we actually paid for the land through that. So let’s give them let’s say $10,000 per watt, the very small launch So that’s, that’s one factor. That’s one element of paying for the lot. The other element is the infrastructure. How much does it cost to put the pipes in the ground? If you work the numbers in our area, that’s about $30,000 per lot.
$30,000 per lot.
So that’s 40, let’s say 50,000. They sell it for 100. They’ve covered their costs, and they still have a pretty healthy margin, profit margin of $50,000. So what’s this business about recovering additional monies to the special districts? subject for another time when we get more details from the districts. But putting that aside for just a moment, what they say is and what they said in our cases, $30,000 that we’re saying was paid for the infrastructure and hasn’t been paid already, even though they made a lot of money on those lots is alone. That money that we paid out, put the pipes in the ground is alone. It’s alone to the future residence.
And if you look at the first document
reimbursement of developer loan, see when I bought the house, nobody told me you had a loan to the developer. There’s no disclosure. But there it is. In 2008, there’s an agreement reimbursement or developer loan. And it’s a multi page document that says the district the metro district agrees to repay alone to the developer.
For all the developers advances
second page are the signatures for that agreement.
You look at your copy, and maybe you can see the copy here.
They didn’t even have two different people sign the document. The same person has signed as the developer. And the same person has signed as the president of the district. So basically, the developer said to himself, I’m going to loan myself this money and the district, future residents of the district are going to have to pay it back. I submit that’s what they call a single party contract that simply on enforceable recent court decisions, I’ve noted that there is an obvious conflict of interest. So we according to the A developer have this loan to repay them back. We heard about transparency and accountability. Unlike the in the old days when you had a loan officer overseeing all of this and making sure money was spent the way it should be spent, there is no accountability in special districts. There is no loan officer. The only check and balance the only check and balance comes in two forms. The first and the most important and why I’m here tonight is because that is you.
You are the only ones in this.
I’ll call it scheme who stand in the position stand in the potential position to advocate for and provide that check and balance On behalf of the future residents
who have no clue when they move in,
you are the only ones there who can hold the developer accountable, accountable. And make sure that whatever that money they’re spending on infrastructure is actually being spent on that instead of a project down the road
and that the money is being efficiently spent.
If there is no oversight is there isn’t any special districts. There is nothing to police, an individual from spending the money, the most effective and efficient way.
Because the market for forces are completely corrupted.
They know that after 10 years or less,
they’re going to get Whatever they want
through property taxes,
there is no better investment and no safer investment than one that is guaranteed with property taxes. And they know they’re going to get paid back.
And they can put in whatever number they want.
One of the other documents I’ve shared with you come from our budgets. Last bond that was issued in our area was 2016. The recall was early 2017. The first document that hold up has the words budget and the number $14,950,000. That is the amount of Money and the actual amount was 12.4 million. That is the amount of money that went into the bank account when they sold the bonds. These are bonds that were voted upon by the board. Voters, the residents didn’t have an opportunity to to vote on those. They issued bond 2016 10 years after the development started. You’ll see in the next line that that basically $12.5 million dollars was transferred to district one. Metro district one we had three districts but for purposes of this discussion, they transferred the money to the district. So the bonds were sold came in as revenue $12.5 million dollars. The next excerpt from the budget
revenues and expenditures for district one. It shows the transfer came in, of 12, basically 12 and a half million dollars, amen to the district one. And then it went out as an expenditure to repay developer principal and interest. They literally wrote a check for 12 and a half million dollars to the developer. So the bonds that were issued, generated income of 1212 and a half million dollars with the stroke of the pen, that money went directly to the developer to repay what they call developer advances. If you look at the same document at the top, it says developer advances they were still, quote, advancing money. At that time, it was five and a half million dollars that they were advancing as recently as 2016.
What did that money pay for?
We the residents have been asking that question for three years. And they won’t tell us. That’s your transparency. That’s your accountability. They simply won’t tell us and there’s no authority at the state level. And unless the city gets more actively involved, there is no authority at the city level to make them tell us what they spent the money on. Prior to the completion of the recall, we’re in the middle of it. The mayor of Lakewood put together a group to mediate the recall issue. With all due respect. He’s
favorite of the developers
They worked very hard to persuade us to with withdraw the recall petition. And in the course of those conversations, I sat right next to the special District Attorney for the developer. And I asked her, I said, What did you all spend? In that case? It was $29 million. What did you all spend the $29 million that you issued the bonds for? And this is 11 years later, and she looked at me said, we’re still trying to figure that out, quote, unquote, in a room of about six or seven people.
I know I’m probably way over but
you all are in a position
to be us.
Before we move in,
that second check and balance is us.
But it took
educated informed, engaged, people are 11 years to figure this out. And until you have citizens on those boards, you will never have the account the kind of check and balance and the accountability. That is imperative in deciding how billions of dollars are being spent in the Front Range money that could be spent on roads, schools, law enforcement, and are quite simply going into the profit margins, profit coffers for frequently out of state developers, in our case, Brookfield from Canada, and they’re there. At any rate, you will have that position. I have done an analysis evaluation of the statutes. There are a couple things that I’ll just highlight for you and I can provide more later on if if you’re interested, first of all, under the statutes, you all have the power, you will have the ability, if you’re going to do a special district, and I still would love to spend time arguing as to why you don’t need them. But if you’re going to create a special district, you will have the power to make it a conditional special district. And I would suggest you can make it conditional until those boards are all resident boards. That would put you in a position of making requirements disclosures, and as detailed as you want them as you need them, in order to make sure that developer is spending money the way it should be spent. Now, some people have said, Well, this is a private company, you can’t, you know, get into their business. And I say, well, then they have no business getting into the government business. Why? They cross that line and are making an application to become a government because that is exactly what’s happening. You all are creating a government, they are becoming a government in every shape
Another thing that’s already provided for in the statutes and you all apparently had been very aggressive and doing that already, Lakewood does not have an ordinance a special district ordinance. I’m I’m in position of beginning to draft a proposed model ordinance for them. You all are, are way ahead of the curve there. But you can require within that ordinance, the kind of oversight that’s absent. For example, what what we would love to be able to see is on a monthly basis
what did you spend the money On
the receipts will be somewhere. What did you spend the money on? And are you over budget or under budget, same kind of thing that a loan officer would have done in the old in the prior occasions. Mr. Henderson, I’m sorry, I’ve gone over
just a little bit.
For the interest in sake of time, we will start opening up the opening up for questions from our council members.
Thank you for your time.
So my question is from either one of you. What if the district doesn’t comply with the service plan? What regulatory authority does the municipality have
to make them comply?
Certainly, this is Mary ambiguity. There is material modification section in the statute. And so if a district deviates from its service plan, then it can be called a material modification. And then it’s required to come in and go through a full service plan amendment process. And one thing I’d like to say is I didn’t understand that we were coming to have a presentation on discussion of the situation in soltera, that Mr. Henderson has described, what I would like to say is that with his limited experience in special districts, he does not understand what went on there. It was not abuse, that the service plan required every debt issuance to go through the city that approve their service plan. And so before every series of bonds was issued in those districts, the city reviewed those plans, that every improvement that was built out there and financed through those districts was in that service plan of those districts, and there was no abuse and I appreciate Different people have different perspectives of a circumstance. But I felt the need to say something because that is just not true. But if we want to have a debate on on that project, we could schedule that for another time. But I just want to be clear that I do not agree with his characterization of the facts in that circumstance at all. I also want to comment on the ballot issue. Question, he identified that there’s all these different valid issues that have dollar amounts that add up to a certain amount. The reason they’re voted that way, is because if you have streets that come in at a higher price and water that comes in at a lower price, you don’t know have you got the right voter authorization. So it is a custom to vote, the maximum debt amount in every power. And yes, that does add up to a very high number. However, the district cannot issue more debt than the total amount that is in the service plan. So if you voted 20 if your service plan limit is $5 million, or $25 million, and you vote that through seven different powers, it comes up to a big number. You still can’t issue more than what the service plan limit is this one to clarify that.
Okay, and I do have another question for you. You again mentioned that an HOA Hoa is have called you wanting to know how they can become special districts because of foreclosures or whatever. Yeah, what happens? There’s also foreclosures in special districts. Correct. So what happens to that mill levy that is on that property? Good. Is that not dispersed throughout the district as well? Just like an
HOA? No, that’s a very good question. Property taxes are always doing owing and when property gets foreclosed on the property taxes still get paid. HOA dues and assessments have a statutory limit on what what the foreclosing entity has to pay. And so if the property taxes aren’t paid, just like the school district taxes and the city taxes they will accumulate and when the property’s finally bought out a tax sale, then all that amount gets paid,
and so familiar. These are just Texas.
mill levies impose the taxes. And so it is the same thing. Meaning when you receive your tax bill, the total amount of dollars that you’re owing is calculated based upon your assessed valuation and the mill levy imposed by every entity that taxes you, the city, the County School District, the special district. Okay, thank you. Sure.
I, specifically to this question, which which question are you responding to?
First with respect to soltera. I think it’s important that the attorney disclose as she’s ethically obligated to do that she represents Brookfield, the developer and, and so there is a debate.
understandable, but we’re not here to debate that either and so if you are responding to the specific question that Councilmember Peck said that would be great.
Thank you. With respect to the material modification, that’s not enough of over that’s not enough oversight. For example, we have a situation where Big Sky is a development, basically next door, they have said that it was not material modification to unilaterally expand their boundary and convert their purpose from building homes becoming a sanitation district. So, unless the city is active, and has very specific criteria for monitoring what they’re doing, you’re going to be in litigation forever because they’re going to say it’s not a material modification. And they’re going to take you to court with respect to the ballot issues, they are what they are the ballot issues are what govern, not the service plan, that that ballot issue. And and the proof of that, quite frankly, is what happened in our area. I showed you what the bond issue said. bond issue added all of those up, and it was exponentially higher than any limitation that was set in the service plan.
Thank you. Thank you. Councilmember waters.
Thanks, Mayor. protune Rodriguez. So some questions, I think for staff and and in a couple of questions for Marion. And maybe I’ll start with Marion, and then I’ll go to stab, could you and your slide 21 you listed The number fees or the slide 21. In front of me, our slides in 12. The handout we got that you you mentioned the fees that could be paid. If, if it whether it’s fees or any other compliance issue, right, that we have a service plan we approved. somebody decides, probably wouldn’t be us because we’re not close enough to the day to day of the service plan. It would be a resident or a board member, somebody decides or one of our staff that the that the district is out of compliance, either they’re charging fees, they shouldn’t be charging or there’s some other non compliance issue. What What’s our authority to police the non compliance, Okay, can we simply put that on the agenda direct staff to put on the agenda, summons the board members and say there’s a problem and it’s going to get fixed? I mean, what are our options?
Okay. And actually in thinking a little bit longer about the question that you asked Councilmember pepper there. It’s kind of related, which is you have a service plan, which has a statutory ability to if the district deviates from it to have the council call it, the district in material modification, and then require a service plan amendment. That’s a pretty dramatic process. And so in many jurisdictions, in addition to approving a service plan, you’ll have an intergovernmental agreement. That’s a part of the service plan cases. Not in all cases, but I’m saying some jurisdictions prefer that. And that agreement varies depending on jurisdictions. But what often it will do is pull out the limitations on the districts of authority that are in the service plan, and put them into an agreement and have a reporting requirement on compliance. And then if the city feels that there is a deficiency in compliance, then that’s a breach of that contract in some in one session, circumstance we also included in the Intergovernmental Agreement, a notice and collaboration provision. So for instance, if the city feels that there is a non compliance event, they give notice of that then there’s a 60 day period where they meet and talk about what’s going on to see if maybe there’s a misunderstanding or if there’s a reconciliation, or if the city provides its interpretation to the district and the district and comes into compliance. There’s no need for material modification event. So so an intergovernmental agreement can put contractual teeth and another remedy process as opposed to just material modification. And I think your ordinance and the service plan that you did a provide has very specific limitations on including not adding other property, not expanding or changing your powers. Some of the things that Mr. Henderson suggested, could be of concern to you, you’ve already got in your ordinance and so you could list those not only in the service plan, not only in your policy but also in that inner governmental agreement.
I want to go to some Those some of those restrictions or some of those agreements that were embedded in the in the member, I would say just an observation. I’m really glad I don’t live in Lakewood. Based on what I’ve heard, but what we did with this plan is quite, I think, pretty directive, maybe not enough. I still am curious about the enforcement capacity. When when and I’m going to turn this off in just a minute and ask, I can’t remember if if there will be an IGA with the mountain Brook district once it’s created, but we’ll get to that in a
minute I can. I can look.
Let me then turn to Jim or or Jim or Harold a Eugene. We were there were a number of caps we, we were imposed or they volunteered and we approved in their application. The toe as I recall, the estimated total cost of infrastructure was $28 million. They voluntarily agreed to limit what the district would cover up that 20,000,020 million to a third of the total cost or 9 million. As I recall, the limit of what they could take from the district was the 9 million plus interest was 13. And change those, those numbers resonating. So the so that the plan with that was approved restricts how much the developer could take a third of the estimated cost to develop development and with whatever the accumulated or accrued interest was cap that at 13 million plus they’re between 13 and $14 million. Am I recalling that correctly?
I’m trying to find I was on that page earlier. I think what it said was 25 million with cost. And if you look at the total cost, and the district i thought was kept what the developer could be reimbursed and $9 million In this.
So in terms of some of what the worst fears that we’ve heard, we’ve addressed, at least in the one plan that we reviewed, we specifically addressed what the developer could take. We also kept the mill levy of 50. And any change would be a material change, it would have to come back to us for approval, as I recall correct. Now, let me just follow up on one one part of this because as I asked the question, the time it’s all on good that we said that we kept the middle of it 50. What happens if assessed valuation goes down, we hit a recession. They don’t sell the homes who’s on the hook to service, the debt created by the sale of the bonds? And I we were told at the time, and I was, which was the right answer as far as I was going, was it residents? It was bondholders. It was investors, which occurred to me afterwards, I should have asked a second question and that is how does that get enforced? Because as we read in the in that series in the Denver Post, About about Junior bonds and you know how the interest rate continues because it doesn’t get paid. So the interest rate continues to accumulate. That’s a question I should have asked in July. What are the provisions in that plan to make certain that that does not happen to residents of the mountain Brook development? Once they’ve purchased homes? If assessed, valuations go go down, homes don’t sell. There isn’t the estimated valuation right at 50 mils to cover the obligation that bondholders are assuming are going to that’s going to be paid?
A lot of question there. So one part of that question was do we have an intergovernmental agreement? flipping back through what you had approved for mountain Brook and intergovernmental agreement was a part of what you will
we will have one once there’s a district
correct is well, I can’t I don’t represent mountain Brook but the documents that you approved require that your documents also limit interest, how it can accrue on developer debt, your documents also Have a limitation on the number of years a debt mill levy can be imposed or debt taxation can be imposed. So there is a certain period of time where that debt would continue to continue to accrue interest if it were not amortized and paid. But at some point, there’s no longer a debt mill Levy, so it would discharge. Again, more questions you had asked. I’m trying to remember them all.
Unfortunately, at the end of the day, enforcement’s a big deal, right? If somebody is out of compliance, what are our options to hold people accountable? Okay, once we once we’ve acknowledged there’s a problem here,
right. Well, and let’s take maybe a step back and talk about what is the process, Mr. Henderson had referenced the fact that there was developer loan and how does that happen? It happens because when there’s financing risk is moving around the table, right? We end in the middle of the cap and the end the discharge, it limits risk away from the The ultimate resident and commercial tenant and property owner in the district boundaries. So that’s what mila vicap does. That’s what debt taxation discharge does, or mill levy limitation terms. So that risk is pushed away from the property owner. So now it’s coming back to the developer in the bondholder, right? bondholders, particularly, because of the big recession, are very sensitive to taking risk. And so that is frequently why you’ll see developers in the initial instance, loaning the money to the district or advancing the money for the construction, the improvements, and then when the project begins to develop, having the district issue the bonds and then pay them back. Okay, so until the market is receptive to the credit capacity of that project, it’s not going to buy the bonds. Now, that credit capacity is evaluated in many different ways. So it depends on who the home builders are, what the absorption is among competing communities, you know, all those pieces and Another thing is that when the bonds are issued there, there are third parties involved. There’s a bond attorney, and also a tax attorney who has to give a tax exempt opinion. You can’t get a tax exempt opinion without a feasibility analysis. The feasibility analysis has to be done by somebody independent to the district to the developer to the project. And so that feasibility analysis is saying what’s happening in the market, what our houses in a residential context what our houses selling for in a commercial context, what a property’s leasing for all of that, and those reports are part of the evaluation of Kenny these bonds be issued is tax exempt. So, so to your question, there’s more eyes on this, then than just the city. However, in your in your situation, your ordinance and also in what you approved and, again, this is just my reviewing of your documents, and maybe your staff has a different observation, but I believe you the district has to submit it’s dead is your winces to you for review by your staff, before debts issued. So if they feel and looking at it and looking at the plan that there’s a deviation, circumstance, then they’re going to call a material modification or say don’t issue those bonds until we meet and talk and make sure that you’re compliant. So that is a point where you could say, we have eyes on you. Another is the annual report. The service plan I’m looking at here does require a narrative summary of the progress of the district and implement implementing the plan for the report year, which is the prior year, their audit their financial statements, let’s see all kinds of information about the debt and how they’re paying on their debt. Are they in default in their debt, what their budget is the summary of the development that has occurred, summary of all fees, charges assessments imposed, and that would get to your point, where if there’s limitations in here about what the fees should be, you would know because it’s been reported That it’s wrong. Also you would see it in the audit you would see it in the budget.
As I recall that the that plan stipulated no additional fees except what might be charged to non neighborhood or mountain Brook residents for the use of amenities. Got to be some fee structure to use the pool or to use the shared rec center or whatever is the amenity,
right but not a recurring fee that basically circumvents the millet that
was in the plan, as I recall, stipulated in the plan. Yeah, well, one more thing, and that is you seem to be familiar with the plan, but I’ll refer to our team as well. It’s my recollection that we were very specific in the review of that in terms of the schedule for the transition of governance of the district from the initial board to the residents. And the The answer is I recall, because I asked it was the first residents as if they’re interested in serving the first resident who either purchases occupies a home is eligible to serve on the board if they’re willing to stand for election in the second and the third and every resident, and as soon as their residents that the control of that board transitions to residents of residents are willing to serve. Do I recall it correctly? There’s no waiting period, other than whenever the next election cycle is.
yes, I was pretty certain I was remembering that accurately. Thank you, Jim. Are you I have some more questions, but I’ve had enough time here.
All right. I would like Mr. Henderson to respond to some of the same questions. And in addition, I would like to know how refinancing affects this. I’ve been told that when the original bond is refinanced with the original stuff is refinance, that nothing That was in the original service plan really applies. I don’t know if that’s true. In other words, the limits and the caps and things like that.
Yes. Because what once, what happens, oftentimes is the bonds are issued. And the repayment schedule for the bonds includes a balloon. We were familiar with that. I’ve seen it many times after 20 years, a payment of $23 million on let’s say, a $30 million bond is due. So what happens is it’s refinanced, and it starts all over again. So the time limit for refinancing is independent of those restrictions. So yes, that that is a potential problem. And that’s why it was reported in the post research and I have no reason to doubt the research on it. That in many instances, it’s like that report. in credit card debt, you get another credit card to pay off the first credit card, then you get a third credit card to pay off the second. And some instances the community will never ever get out of debt. For example, in our bonds, it’s written into the bond language and it says that 50 mil cap and that’s a statutory cap, by the way, that 50 mil cap, once you reach that, the bonds tell the bond investors that the residence will only be liable for 50 mils. But that doesn’t stop them from issuing the debt. What happens is you’re just paying at some point a portion of the interest on the actual debt, but it continues, in our case forever, until that maximum is reached, in our case $4.9 billion. So even though you may only be paying 50 mils each year and you’re tapped out, and you can’t generate any money, do things You want to do all you’re doing is paying off the developers profit that in my words. You’re even though you’re only paying 50 mils a year, you’re going to be paying forever until you reach $4.9 billion. I did want to respond briefly on the on the concern about what happens if you can’t pay the debt. Well, castle pines is the case in point they went bankrupt. And the individual residents were getting bills for $40,000 in taxes, it does have an impact on the residents. It has a direct impact. They tried to raise some of the issues that are being raised now saying, Hey, wait a minute. self serving, conflict of interest contracts. They’re not enforceable fraud. We didn’t know there was nothing to Closed, the court said it’s too late. Those are arguments you may have had toward the developer. But once that that is is transformed into debt with the bond investors, you have to pay and those arguments aren’t going to be considered with respect to the the bond and in the service plan for mountain Brook, the debt limit there on page 17 is $25 million dollars. And the plan says, quote, the district shall have authority to incur debt and the total principal amount of $25 million
and that’s what was anticipated.
In the first bond, and and with respect to the rest of the community, in the in the financial documents are appended to your service plan. It should And this is a critical percentage. It shows how much money is that community worth? What’s the valuation? And I think the number was somewhere around $25 million. What’s the debt? Again, about 23 $25 million. So you’ve got 100% ratio of the debt to the valuation. The state of Colorado. I don’t remember the date, but sometime in the last 10 years issued a brochure that threw up some warning signs about special districts and it was supposed to be generally available to the community. One of the things that they say is, it is risky, it is very risky to go above 30% valuation. What you have here is 100%. And that’s what happened in castle pines that got upside down and actually community was significantly compromised financially as a result. Like you
have any more questions, Polly?
Yes, I actually have a few more. Excuse me.
Can I address your question? Pardon? Can I address your question? Your question, I believe was about refinancing bonds and they fall do they somehow circumvent the limits that are in your service plan? And the answer is no. When you have to issue bonds, there’s all these boxes you have to check. Right? And one of the boxes you have to check is can I issue it under my service plan? Another is has it already been issued? So if I have 25 million in debt authorization in my service plan, and let’s say I’m going to do I’m going to issue 10 million in bonds, and then I’m going to refinance that 10 million in bonds, but it’s going to cost me 12 million to do it. Why is it going to cost me 12 million to do it because Maybe there was interested accrued at current couldn’t current pay, maybe there’s transaction costs. It’s now 12 million. What happens is the first 10 million subtracts from the 25 million. When I refinance with 12 million, that extra 2 million comes off the 25 million. So you keep reducing to get to zero. Okay. So I just wanted to clarify that point. Okay, then.
I also would like both of you to address the fact that there are no term limits to officers. Officers of the No, I’m sorry, not term limits, but there are no
there are terms but there are no term limits to officers of these boards. And so people can in theory, stay on these forever. They do have to run for reelection, but exactly, you know, if somebody holds the possibility of taking your home away from you, you’re not likely to run against them.
Okay. for clarification, no one’s going to take anybody’s home away. The castle pines example cited was from a pre 1992 bond issuance, where you had an unlimited miletti pledge, and that was an issue in the late in the mid to late 80s. We work through changes with the legislature, I was part of the Colorado housing council Task Force and working through those and also also working with FHA and VA to be able to meet the concerns that they had about how special districts function in Colorado and how they can do insured lending. And so we satisfy the requirements of FHA and VA and the concerns expressed at that time, so we would never have those bankruptcies again. So castle pines is an example of what happened before the statutes changed, so no one’s taking anybody’s house away. terminix with regard to term limits on special districts are a little bit unique. that there has been historically not a lot of interest in serving on those boards. The purpose of waiving the term limit is not so that you can have a developer board member nominee on that board forever. But so you can populate that board forever. I have boards where there are residents on the board who stay on for four or five terms. I’ve been doing this a long time. As a matter of fact, I was looking this morning for the election cycle and who would who would serve as the do for the election in a residential community that I’ve represented since the 80s. And there are five board members, three of them coming up for election. I called each one of them to say, is anybody else going to run and they what happens in these communities is often it sorts out there’s people who are interested in the HOA. Usually they’re more interested in the HOA because the HOA does the things they’re interested in. That the HOA plants the flowers Has the Easter Egg Roll has the holiday puppet show. Okay, what the district does is manage is dead. And that does become of interest to people at certain points in time, but it usually doesn’t hold their attention for very long. And so again, my experiences, I have had to go and beg Hoa boards to get me board members to serve. So that is why that happens. And if that answers your question,
yes. Can you explain to me why these transparency plans allegedly are being posted not on the Department of local affairs side but on special, the special district Association, which is a not a government entity?
That’s a good question. It’s because of what the legislature provided for compliance with that. And so there could be a legislative change to file that with Dola. If people think that’s a good place to look for, for those documents, but the legislature requirements were to either mail them out, or to post them on the FDA website. And most jurisdictions post them on the FDA website, because it’s less expensive to do that to mail is very expensive. So that’s why we post them there. And again, once people understand that they’re there, you can go and get every district in the whole state there is very, very obsessive, but
there’s no notice of that on the Colorado Dola site that I’ve seen. I’ve tried to find, I’ve tried to find it is not really that easy to find any of those plans on the Dola websites
to find the service plans or to find anything. Okay. Well, I I personally am not responsible for
I know the paralegals in our office are really good at it. So if you want support and that we can I can get one of the paralegals to help you matriculate their site. But and again, we we have to file in compliance with what the state legislature requires and they require Through through SDA and their websites very simple. Again, what you do is you just Google’s Special Districts Association, Colorado, their homepage comes up transparency notices right up there, you click that. And then it’s either do you want to update your transparent notices? Or do you want to basically search one, and you can get, you can get the names of every district pretty much in the state there.
Do they also have the service plans there?
No, they don’t have the service plans. The service plans are at the but you know, what, what you
can be in one place?
Well, actually, I appreciate what you’re saying. However, the transparency notice gives you the contact people. And so because they’re public records, you can email those contact people and say, send me the service plan. And they will send it to you within 72 hours by email. I mean, that’s what the state statutes require. So they will thank you.
Any more questions, Polly?
Okay, just your mic was stolen.
Real quick. I do have a question. So essentially, it sounds like enforcement or oversight is is generally triggered through either a material change or the the request for issuance of debt, as well as an annual report. Is that correct?
Are you asking with regard to your ordinance? Or are you asking generally speaking, what the statutes require? Those are three different questions.
Those are three different, I’m just saying those are all points where oversight would would come into play
under your ordinances? Yes. Under our ordinance, yes. Under the state statutes, it would be the material modification,
just material modification. Okay. And then this will be a staff question
to the staff.
Those are the three points i guess i identified in our ordinance is their capacity or any sort of what is the staffs capacity to have general oversight outside of those, those three points for any sort of compliance is their capacity at the staff level to oversee compliance outside of the three that I listed outside of those three, like monitoring for compliance outside of, you know, the issuance of debt and the annual report or material modification.
So I think that’s dependent on
total volume and what you have to determine what that capacity is going to be. At least in terms of the mountain Brook service plan. There are components that were required, and I’m going to let these these guys jump into their components that were required to do based on what Council adopted so we now are required to review the debt issuance. That’s coming forward in how we look at that.
And so that’s a piece that we’re going to have to do.
So it’s kind of a tough question for me to answer because if you have 100 of these, yeah, that’s going to strain capacity. If you have a handful of these it’s a it’s a different question. The one thing I did want to point out council asked this question, and I don’t think anyone’s answered it. There is a distinction actually, in the plan that we adopted, when it refers to the modification of a service plan. In ours, we actually said in addition to the matters described here and as constituting a material modification of the service plan, the city council will determine what change constitutes and material modification. We actually put that in the plan that says the council will make that determination. Okay. So,
you mind if I address your question? Not that I can speak to your current staff capacity but wanted to say in different jurisdictions, there are requirements to, for the districts to pay a fee or to pay the processing costs or the outside consultant costs. There’s one jurisdiction the city and county of Denver, because they have so many special districts, they have a specific fee, they on a sliding scale depending on the level of activity of that district that they charge every year. And so every district in the City County, Denver has to send money over because they have staff now at city and county of Denver for purposes of monitoring as you’ve described. And so if you ever had that many districts, that’s another possibility to approach paying for that because it shouldn’t overburden the staff to take care of something new. Thank you.
And one of the drums that we’re beating is disclosure self disclosures. For example, I can envision a half page disclosure for prospective homeowner That would actually take the numbers out of the ballots, which are buried there weren’t nobody will ever see them, and put them on a disclosure to the residents when they go into the home. So the same thing could be here. So for example, especially in the early stages, you all could, as part of your disclosure requirements, not wait a year, not wait for someone to say, hey, this isn’t right. And that’s what material modification, but you could require a monthly basis, especially in the early phase, a disclosure as to what amounts were paid. And for what, and if anybody wants to look at including the public, what the receipts actually show, there’d be a mechanism for doing that. The problem with the transparency notice and what they are producing is it doesn’t tell you get in the microphone, please. I’m sorry. The transparencies that are filed with the SDA And even materials that are filed with the state. It’s on a volunteer basis, there’s no enforcement. So when I go and I look up a site, more often than not half the information is not there. service plans are almost never there. The ballots are almost never there. So if you require those things up front and make it a part of the digital file for that person, then somebody can go to your site and look that stuff up. Because otherwise, you have to do what I’ve been doing for the last three years and file quarter requests for my own board, even to get the agenda for the next meeting.
Thank you, Councilmember waters.
Thanks, Mayor pro Tim rigas. Is that recall on in the mountain book plan that we approved? I there are there three disclosures a disclosure occurs on three occasions or it was it two occasions Could you review the timing of those so that we’re assured that that home that those who would be purchasing homes aren’t at closing before they see their first disclosure and risk losing a deposit? I recall, we addressed that, but I would be worth you reviewing exactly what the agreement is, or that what the plan calls for in terms of disclosure. And what is the what’s disclosed. What Mr. Henderson just suggested, is, informs what the disclosure might include.
You guys looking for that? All right. Well, you you look, because I have a different question, but I’m going to come back to it. One of the things I guess this is for me, it’s the other council members, and maybe it’s to the to our presenters. We we’ve read In the the post, the series in the post was very informative, and fuels lots of questions and obviously lots of concerns. My as I read it, not that I wasn’t interested, I marked it up. But I’ve, you know, I’ve I’ve gone back over. But it struck me as the kind of the 9010 rule 90% of your problems coming from 10% of your sample. Every teacher knows what that means. Everybody’s ever run an organization knows what that means. And given the number of special districts are metric districts in the state of Colorado, it was a small sample of the total that was reported. I don’t question the veracity of the report, or the horror stories that people experience. I’m not questioning that. But I want so we know a lot about the worst cases. I’m just wondering how much we know about the best. I heard in one of the presentations or one of the comments. When the Heard a reference to the top 10 selling developments in Colorado all being in Metro districts. So the metro study third quarter 2019 lists those 10 districts, the communities in which they exist, the names of the districts. Justin just in my own, kind of wearying of folks who were doing this I, you know, learned about other districts. I could I could read off this list of 10 names of the 10 districts. I can also read off a list of another list of districts in the hidden rivers Canterbury crossing, one Canterbury crossing two Parker properties in the Parker area, all of which, at least appear to be success stories. So we’ve learned a lot about the worst cases. I’m just curious, how much do we know about the best and that regardless of where this where we end up with a decision about Metro districts, we got to make that decision. It seems to me Knowing not only the worst cases, but the success stories. What is there? What can we learn from those that would inform what we’ve already done a pretty good job with it sounds to me like with our own ordinance, and the kind of criteria we use to review the, the mountain Brook application, and for whatever it’s worth, as in the run up to the review of the mountain Brook application is I was doing my work. And Marsha and I were communicating back and forth. Marcia would be except she had a personal emergency and had to attend to the net result of what she and I went back and forth with is a kind of a framework. There’s a narrative and a framework for what might inform based on what we’ve done in what we’ve learned since what we did with mountain Brook. either an ordinance or a series of ordinances that first protect our residents and allow us to take advantage of the instrument to advance our Housing objectives if we’re willing to take on that work. So if anybody’s interested, I’m happy to share a copy of what she and I developed. You’ve Haven’t I think, Mayor pro tems already received a copy. I brought printed copies if anybody’s interested. Only because it reflects what we’ve learned. And I think is useful if we if we want to consider if we want to consider the prospect of keeping the tool in the toolbox, and getting smart about it, use it so we do no harm and help us accomplish our housing objectives. So do you guys have a question on or an answer to the
Councilmember waters and council Eugene made city attorney. So this is from the service plan regarding notice. Notice in the form approved by city manager shall be record against all property within the district prior to formation sent to the board of directors of the district by certified mail of the board of directors shall send to each record property owner such notice within 30 days of the formation of the district. In addition, the district shall record with the Boulder County Clerk and recorders office, a notice of inclusion in the metro district that identifies the existence and effect of the district refers to exhibit s. Exhibit S is a three four page description of what a district is what it means what sort of property taxes may be assessed includes examples, describes a governance pretty pretty complete information about the district.
So we’ve done a pretty good job, or at least they did a pretty good job in presenting to us a series of disclosures that address some of the concerns that we’ve heard about. I’m going to pass those down. So that for the staff for Harold and his team, and If the Meet the Press wants copies of what we did there, they’re available. Thanks.
Also want to answer your question about timing? Because I think it’s related to something. Another question that I had that was sent out to me. And the question was from Councilmember Hidalgo fairing to say, How much time did you spend in processing this? And the estimate that we gave, because we didn’t keep accurate counts was, at least in processing this one, we spent about 135 hours of staff processing that application to your question, and the answer that that comes with this is, is the amount of time depends on how open or restricted the process is, the more restricted the process is, the less time it takes because there are things easier to do. The more open it is, the more time it takes because then we’re really having to dig in in those processes. So I wanted to make sure I answer that question in terms of what kind of time we spend on this, what that looks like, and then qualify that to say, it really depends on volume in terms of that capacity and what else we have going on at that time.
So, just to follow up on that real quick, that would have been 135 hours before the council even ruled on the service plan.
That would be all the way through
all the way through. So after after we approve the service plan
up into we brought it to Council
is prior to our approval of the service plan. Okay, thank you. Councilmember Christiansen
thank you that included that it tied up our planning, engineering, natural resources, redevelopment, finance, legal and city managers office and LPC. I just like to point that out. So another problem that I have with This is that if you the United States Public Interest Research Group.
Berg has reviewed
these districts country with countrywide and found that that about 40% of them never file plans at all. And of course, there isn’t really any sort of, really the dolla dolla is a repository of the plans. Dola has no capacity or authority to oversee the plans to enforce the plans or to punish anyone who does not comply with the plans. So this is really isn’t oversight as far as I’m concerned.
If that’s a question the answer would be that the responsibility under the statute lies with the overseeing jurisdiction that the district is organized within. So the plans are kept by the jurisdiction. They’re also in the court files for the organization of the district. So if for some reason your bill, you know, a building that you keep documents in burns down or you lose your data, not only does the district have that information, but it’s in the court files. So again, the oversight is with the city for districts organized here. You’re right. It’s not with Dola. They’re a repository. I don’t know that that’s a bad thing. Because again, it’s the city that you’re in, that oversees what you do. Dola wouldn’t know if a district was functioning outside its service plan, because it’s not in day to day touch as you would be.
But how would we know also if if someone is not in compliance, unless we lived in that area?
Well, I think it’s because of the reporting requirements. And so if the reports weren’t being filed, and again, there’s consistency and the reports because you if there was a fee being charged, it was outside the parameter of the plan, it would show up in the finance plan, it would show up in the audit, it would show up in the disclosure documents on the bond issuance. So you would find it.
I’d like Mr. Henderson to comment on this too.
Again, I think the the easiest way to ensure compliance and oversight is doing a little bit more of what you already have started doing. And that is requiring disclosure from the developer. You know, they’re saying, well, we’ll pay a fee would be a lot easier for them just to disclose the information. And if you’re waiting on an annual report that’s too late, and it’s going to take somebody with more than a laypersons background to ferret out. That information. It took me several months to get at what some of the information was here. And my suspicion is that you’re not going to have the staff or the interest of among the lay persons to try to do that on their own. It’s their burden. They’re the ones that are coming to you and wanting this, this financing vehicle that pays them profit and interest on interest. So the burden should be on their part. And if I could just briefly respond to Mr. Waters comment about the are we looking at at 10%? Are we looking at 90% for 11 years, there were no problems in my community, because nobody knew. And even the folks that do figure it out freaking Don’t figure it out until it’s too late, until the only issue they have is refinancing those bonds. And with all due respect, one of the saddest scenes I saw were residents who were just falling all over themselves with gratitude to the same lawyers that put them into the debt. We’re now helping them refinance. It has to stop it has to be challenged before it goes to the bonds. And as I’ve told folks that have asked me for suggestions. If you’re already at the bond stage, it’s too late. All you’re doing there is managing that
thing else falling.
Okay, Councilmember Iago, fairing.
So and I guess, I don’t know who could be the ones to answer this, but in looking at the success stories that are out there, what, what impact has it had on the community at large? So where, where there might be an abundance of residential Metro districts in place? What are what are the impacts on the surrounding areas? Like has there been data collected as far as the capacity to pass bond and mill levy overrides for school district for say, or for recreational center over other city initiatives? What is the likelihood that those will consider you know, that those paths are what is the I had spoke with the mayor of Loveland. And she had talked to me about 2016 I believe, of the mill levy override that did not pass and the school district went ahead and did a survey of residents In in Loveland, and to determine where you know, where they were, you know where they live, and what they voted on. And there was a higher percentage of people who lived in the resident in the metro districts that voted down any the mill levy override. So it does have impacts on the school.
And you know, I just don’t want to speak to just the schools, but there are other tax increases that benefit the community at large. And so I really feel like we are representing the community at large. So I want to know what are the impacts
to larger communities, we don’t really have anything to base it off mountain Brook will be really our first residential one to pass. So we don’t have any historical data collected. I guess I just want to know what’s, what’s out there.
This is Marissa McGeady, those are difficult kind of intangibles to UAT it could be against speculating here, that if you’re in the community that has the newer schools, which if the community that you’re citing is the one that is the new development, it is a big development. It has the newer schools, that might be why you didn’t vote for the school district election. I’m trying to remember the name of the firm, one of the big underwriting firms had done research and survey on the question of what motivates somebody to vote yes. And a local government election. And the and the outcome of that research was it has to do with the confidence in the elected officials who would be managing what you’re voting for, and has to do with your feeling that you’re going to be benefited by what what is being voted on. Right. And so it doesn’t have as much to do with what are your overlapping taxes from the outcome of elections throughout the state and Colorado, but that’s just one evaluation that was done by one underwriting firm. It was probably seven or eight years ago. Although if you look, for instance, at Highlands Ranch Highlands Ranch is a 25,000 acre community in Douglas County. And I don’t think that they’ve had problems, you know, like any other jurisdiction getting their elections passed. I live in Ken Carroll Metro district tenkara water and sanitation districts. fire district. I’m a big believer in districts, I live in them and I experienced them. I’ve campaigned in my own community to get an election past. We failed the first time we approved it the second time. So again, it has to do with what you’re spending the money on. And do you believe in the people who are asking you for for for the money? I think that’s generally how it works. So thank you. And I guess I just wanted to add, did you want to respond? That would be great.
Yeah, briefly, I mean, anecdotally, you know, we have a community right next door to us and they’re paying $4,000 less a year in taxes on average than than we are. That has an impact. We’ve had residents move out. There were I had 26 People working on the recall campaign. A handful of them moved out when they realized that their tax burden was so much higher than than that, right.
When they realize the tax burden was that much higher in our community than it was next door, people vote with that information in mind. And it’s just, it’s just natural. I mean, taxes. I mean, we’re paying right now close to that 50 mil mark, plus 20 mils that paid for the property, plus all of the other taxes that we really want to pay. We don’t want to pay 50 mils to pay profits to a developer who isn’t accountable and won’t tell us what they spent the money on. It’s outrageous. I mean, I get I’m sorry, it’s been three years. And so I want to spend more money on school. And roads, I don’t want to spend it on profits to the developers that they won’t help won’t be accountable for. And we’re looking to the cities to to be our check and balance until we can take over the boards.
Yeah. Other the other pieces Highlands Ranch has a very different contingents constituency than Longmont. Over the last few weeks, I had actually gotten out I spend my Christmas break my winter break, meeting with close to 200 constituents in different pockets. So the 20 somethings retired folks who group of people who lived in the countryside, mobile home park, different ethnicities professions, talked to a group of
pair educational providers, and just to kind of elicit information and feedback. And I mean for really for a lot of our folks, it’s we’re living paycheck to paycheck. And so yes, the tax, you know, some of the benefits of well you can deduct it from your taxes for some people when they’re thinking about, okay, Do I have enough money to pay the bills, get the groceries, daycare, all these situations. They’re they’re not thinking that far ahead there. It’s really literally paycheck to paycheck and I and I made it a point to talk to individuals who typically don’t show up who aren’t engaged. I spoke to a group of 20 somethings who were who’s our mayor, you know, they
okay. But really, what what is what is it that you that you desire that you need? And so some of those things, yes, are affordable housing, but would there be an offset as far as if they bought into a metro district?
Would they be paying you know, would it would they get the taxes get them you know,
And then it reduces their opportunities if we have more Metro district or no and and you raise a good point, which is there is a diversity in consumers, and a diversity and housing product and and retail and office space and all of that. And every community has to have that, because there’s a need to serve everybody in your constituency base. With regard to affordable housing, I am not an expert on affordable housing. I do understand again, that if there’s public infrastructure to be constructed, or if there’s amenities to be maintained as part of an affordable housing project, that it will have a more efficient and low cost, total financing effect, and so make the project more accessible. But I think maybe best to have somebody who is expert in that address that I don’t know if there’s anybody here tonight who is and if not, maybe they could, the question could be posed to them and they could respond in writing for everyone’s benefit.
Okay, folks, we’ve been going for a while here. So I’m just going to call this the last round of questioning. So if you’re not in get in the queue, we currently have councilmembers water and Christians and in the queue. After that we will take a break and because the motivation behind this meeting truly was a debate and discussion amongst council so that’s why this will be the last round of questioning before we take a brief recess and reconvene to debate and discuss the issue. Councilmember waters
Thank you, Mayor broten Rodriguez Can I can I see if I’m curious. I’d like to ask if the land elevation Land Conservancy is in the room and anybody from Boulder Creek builders, because they did the they have partnered on the we call it profit. We cottage projects at Blue VISTA and are selling for purchase affordable homes. Can I can I can we see up there Here
he is in the center. Though that I hope they’re very focused questions, Councilmember waters,
they will be a very focused question if they’re here. Anybody from the Land Conservancy. So we do have and from Boulder Creek builders could together Come to the microphone. You have you to work together. Well, let me let me see if I have a question specifically that I want to repeat a question I asked at the ribbon cutting of the week cottage, in in in ask it again and see what kind of response we get. Only because the discussion or the comments that we just heard all legitimate concerns about especially for working families. What do we do? What are we doing in our housing, policy and package that that responds to needs from 30 to 100 in one or 10% of area, median income. Right in terms of housing inventory, so the day that you did the we did the council member Christians and I did the ribbon cutting at the cottage project. There was somebody from elevations, Land Conservancy, and one of your colleagues. It was a unique chance to ask how does this partnership work? So I learned something about the Land Conservancy and I learned something about the relationship or the partnership between Boulder Creek builders who I don’t know other than that day, and the Land Conservancy who I’d never had a chance to meet with until that day. But we in that conversation, I asked the question, if you had been able to finance that project through the use of a metro district wouldn’t have mattered what it would have had it would it would have had an impact on the market price of those homes. And I could tell you what I heard but I’m let me just ask the question. Do you have an answer to that question?
So I am Tiana Patterson, I am the public partnerships and Legal Director at elevation community land trust. So, our model is that we are in the very, very good position of having 24 million and philanthropic dollars that we go out and find quality homes that we buy at a discounted rate, we usually are able to use that discount or get that discount by partnering with local municipalities and using our dollars to help bring down the affordability gap so these homes are market rate, not always market rate but they are higher than our target ami area median income of 70% am I so in order for us to be able to sell them, we need to say if there is a $50,000 affordability gap, bring that down. So that People I 70% am I can afford it. So we would come in and bring in 25,000. And then we would ask one of our one of our municipal partners to do a match, either through money or through fee waivers or, you know, various things that would help bring that price down so that then we could put that home on the market and sell it to a family in need.
Yeah. So in for your example, 30%. ami is probably that’s not our target. But we would say as I think most of you know that there is a dearth of affordable housing for sale, affordable housing options statewide, and there has been more focused on rental homes which is valid and that’s usually where you’re going to get your 30% that’s what they can afford. But for folks who were teachers, firefighters, working class, working class, Exactly. Our target home price just to give you a sense, because I know when I start talking about statistics and AMIA is people were like, okay, it’s a 200 to $260,000. And we only do family size home. So we’re only talking about two and three bedroom and greater homes for sale. So that is what elevations mission is. And we have the unique, as I said, the unique position of being able to partner with developers, municipal partners, and other nonprofits to help make these deals work and bring the prices down. So I think with Metro districts, that’s something I’ll let Steve talked to. But that is I think you can kind of sense where Metro districts would help bring down that subsidy needed to be able to put it into a home so we could sell it
the unit I was standing in when wherever this conversation would have sold for $275,000 you You bought it down to two to 25. That’s right. Had there been a metro district? Would it could you have sold it for less than that?
Steve Erickson with I’m a founder of Boulder Creek neighborhoods
and listen to long
Yes, the short answer would be as you know, we charged nothing for the lot to elevations in order to help bridge that gap. So it was a participation all the way around. Long, long mod with fee reductions and waivers depending on the category help get that gap there are contribution of the lot and then
charitable benefactors of ECE ELC t elevations, you CLT elevators community land trust, to get them to where they were in a position to offer the homes at 225 market rate homes which we still think are attainable compared to a lot of other new homes in the community, start in the low three hundreds for the same floor plan product. So, it’s it really is for us a spreadsheet equation I
you know, it’s not a,
you know, a
at what a an accretion to profit it is. There’s a competitive market out there. Now land costs are, you know, if I could find a $30,000 dirt cost, that’d be terrific. I’m not finding it in Longmont. And if we could develop for 40,000, that would be terrific. I’m not finding land development subcontractors who will do that for that some amount. I think those are kind of old historical numbers, current numbers. It’s competitive market. It’s expensive and You know, if if there is a way to have a portion and it’s never the full amount I like in your service plan that it’s limited to sounds like it was roughly one third of the eligible public improvements under your service plan. You know, we find that if you can get to a third or 40%, that’s about all a, you know, the assessed value will support anyway. And I don’t understand the comment earlier, that the assessed value and the middle levy or the middle debt is 100%. I can’t imagine a bond underwriter ever approving something like that. So there’s just a lot of facts and figures that you guys are gonna have to go through carefully. I encourage you to at least consider with the rigor of your service plan guidelines and the disclosures that are required. That it’s a tool for you to consider, you know, you don’t have to approve it. You know, it’s a discretionary decision on the part of council. But bottom line, it is a it does allow an opportunity to bring down that upfront cost
on the finished home. Can you estimate what the what you’d be selling the week out of just for? Had you been able to finance it that way?
I really can’t on on this project without i’d need my CFO to come in and help me on that.
to your question about HR ways and things like that.
We calculate the HOA fee into our 70% ami cat. So it’s not a year where we quote you this mortgage and now you have another fee on top of it. And that would be true because we also do deals in Denver, Aurora and other places. It’s included so it’s it’s not some unexpected cost. For our honors.
Just want one more request. I wasn’t just being rhetorical. My, my query about what can we learn from the most successful districts that are reported on the on the metro Denver website, Metro study? Could we collect some information? And maybe somebody can help us do that? What is there? What can we learn it? Well, one of the patterns in terms of what we might want to think about adding to what we’ve done with an ordinance relative to or learning from those districts.
Councilmember Christian so
I thought we were not going to have members of the public come speak but other than the two presenters, but I went to that meeting and I talked with a another land press person and all we talked about was Henry George and land trust? Anyway, I would like to point out that one of the most successful Metro districts is often referred to as Highlands Park, which has been in existence for quite some time. In about a week, I will be going down to Highlands park for my annual meeting with distant relatives. It’s a gated community. It is very wealthy. I’m sure that most of the people whose children are there, send their children to private school. It is not very diverse. It’s pretty easy to have a successful Metro district. There’s no affordable housing in it. That’s not my idea of success. I don’t think Longmont needs anything. communities like that at all. I don’t mind that my distant relatives live there. They’re nice people, but I don’t think Longmont needs wealthy enclaves that are gated. Anyway, I I would like to hear Mr. Henderson’s comments on Highland Park.
I don’t have I don’t have the the article in front of me but my recollection is that the research that was done by the post indicated that Highland Park was still very much in debt. They had recycle the the original notes, but they were still paying, I think somewhere in the neighborhood of 29 $30 million. I again, I’d have to defer to that information, but it was reported in the Post article that they are not And many of the people who I’ve talked to the Highland Park area are not happy with the amount of debt that they pay. And if I could just very briefly on the disclosures because that that has been an important part of the discussion. I did look had an opportunity to look at the disclosure notice that was part of the service plan, and their general statements, but the only specific refers to the 50 mils. There’s no statement in there, for example, that they’re going to be paying, I think was close to $2 million a year to service this debt. There was no statement in that notice that the residents are going to have a maximum that of whatever the number is 205 or some multiple that million dollars. So I think it would be helpful in that disclosure. To do the same thing you do when you finance a used car. We know more information about financing a used car than we do buying a house in a metro district and if they Put those numbers in the ballot, if they can put those numbers on the financial statements. And if they can put those numbers in an annual statement, it can sure as heck put those numbers on a half page form to the homeowners who come into that sales office. Thank you.
I can’t remember back.
Thank you, Mayor Pro Tem, to elevations credit union on the land trust. From what you said. I’m assuming there’s no mill levy on those homes attached to it because it’s not a district. It’s a land trust. Correct. Okay, so that is the difference that makes them in my opinion, more affordable because when you put a mill levy on the back on a property tax, that stretches out to 40 years. The way I look at it is that 30 or $40,000 at that properties go To pay does not make that affordable, it’s just on the back end rather than on the price of the house. Because it’s still an amount that is owed by that property owner and to Eugene, you had said that the first round of homeowners in that district get a chair get, I may, I may not be understanding what you said correctly, get a disclosure or should get a disclosure sheet as to what the mill levy will be, what it pays for it, etc.
That’s correct damage recorded against the property.
So what about the second or third sale of that home? Do they get that same disclosure?
Because that’s where, in my discussions with other elected officials, that’s where some of the problems begin on the sale of the house.
service plan provides notice to each other Record owner of the property for each sale.
Okay. Thank you.
Are This is our last go round and we’re going to take a break you said Yeah.
Okay. Thanks, sir.
Can I address the issue of the district’s debt as it’s referenced in these Denver Post articles you had asked about the one district but I just wanted to mention that I not to say the reporter didn’t try really, really hard to get it right. But there are a lot of things in these articles that are not accurate. And, or or presented in a way that is very negative, but is not accurate. One of those things is the tallgrass district was referenced in here, and I’m familiar with tallgrass because I represent that district. It’s had resident board members on that board for many, many years. It suggests that it’s dead. Somehow in appropriately issued because it’s not self amortizing and has a balloon payment. What the residents decided to do in that issuance was to do a shorter term financing got a 2.6% interest rate. And what they’re doing is buying that debt down. And so when they get to the balloon payment date, and they have been dropping their mill levy every year because of that opportunity to reduce the interest rate, and when they get to the balloon payment will have a much lower principal to refinance. And the reason I want to bring that up is that the the when the district’s initially issues debt when the developer is there, that’s not the end of the debt story. And the debt is managed by the residents. And when they do get on the board, they do refinance. They do look at creative and we help them and work and support them in doing that. And I think it’s a it’s a rock star outcome to get a 2.6% interest rate and be able to buy your debt down fast. And so I wanted to be clear again, I knew in week, if you had another night, or if you wanted to spend weeks going through these Denver Post articles to get an accurate understanding of what’s going on in these districts, I’d be more than happy to come back and do that for you.
Thank you. I almost forgot my question. So, um, there were a couple of things that were mentioned about. Okay, so the housing affordability or just even some of the arguments I heard. And so let me go back when I after I spoke with constituents and it was a small group compared to the number of residents we have in total, but I really tried to make it a point to talk to different socio economic groups, ethnic groups, age groups. And the consensus I got in and so even some of the questions that I initially had, I just pulled them off the table because I really wanted to address the questions they brought forward. And one of the things that I kind of looked into
Based on a concern was okay, so when a metro district, yes, the developer can lower the cost. So let’s say it was a $350,000. home, they could put it on the market for 300,000.
What is the So then once that home turns over, once that owner decides I want to sell that house, then is he also going to be selling that home below market value? Or is it? I mean, was there anything in our service plan that says we have to keep the cost lower? I didn’t say anything. And you can’t do that. So so that assurance piece, it was like that risk factor was something that concerned me so i don’t i don’t know if maybe any of the presenters can can speak to that what happens when the house turns over is sold
Is the saving still there? I
mean, you’re absolutely right. There’s nothing that the market is going to control the sale and the cost of the house and sale price. So for example, if and it’s a, it’s a huge assumption, certainly an arcade. But if the house was discounted, the price of the house was discounted to the original owner to somehow compensate for how much money they’re going to have to pay in the future on taxes, that totally disappears with the second purchase, they’re going to get as much for their house as they possibly can, and they’re not going to discount the price of that house, or how much taxes are going to be paid in the future. And, and I think, at least in our case, the assumption doesn’t hold up. They certainly didn’t discount the cost of our houses when they were first sold to compensate for how much taxes were going to be paid in the future. They got as much for those houses as they possibly could.
Okay, and the other thing is in looking at data, we’re approximately 30 40% of our residents rent their home. Does that sound? Am I on base with that? Yes. So it’s between 30 and 40%. So another thing is I spoke with a lot of renters and that just happened by chance.
You know, they want to, they’re, they’re not in a position to own a home.
They want you know, they want assurances around rent control what I mean when we start putting different districts up, how is that going to impact the capacity to find reasonable rental rates?
Kathy, sort of our rental. that’s a that’s a tough one.
I had people asking me and I like I got nothing.
Kathy feller Housing and Community Investment division manager for the city, I can only speak to what happens under the programs that the city operates. The inclusionary housing program, for instance, we do put deed restrictions on the rental properties as well as on for sale properties, which limit the rents that can be charged and limit the sales prices that they can eventually be sold for every time they’re be sold. The problem, or the concern, I guess, with Metro districts that might have higher taxes is that are we going to have to go in and continue to subsidize to keep the sales prices low enough for the next property buyer? So this happens, one of the biggest reasons why homes become less affordable over time is not just the resale which adds real estate commission And some other things to the sales price, but also HOA fees that continue to go up and potentially in a metro district taxes. I mean taxes continue to go up on every property but potentially more so possibly under a metro district and how are we going to deal with that, for our affordable housing under inclusionary housing that are within the metro district? And I don’t know the answer to that, and I would say, and the community land trust, they’re going to have the same issue because the taxes are going to be they’re going to have to pay that they take the land out of the equation when they sell it to the homebuyer, but they they leased the land then and that has to pay for their leases have to pay for all the taxes and and everything on on the land itself as well. So it ends up I think kind of being like an HOA that continues to go up or whatever. So I’m just not sure how What the impacts will be in how we’re how we will keep things continue to be affordable if they’re within a metro district. Now the one that was approved, the affordable homes are outside of the metro district. So that might be a way of handling it.
Yeah. I mean, it’s it’s, it’s certainly it’s dependent on the circumstance, because in the case in the one that we’re talking about with mountain Brook, we were cognizant of not putting those properties within the district boundary. I think it’s a hard question to answer until you understand specific details associated with what’s been submitted and how that looks financially.
And is our plan or you know, what we passed the criteria, is it specific enough that it would address those specific issues as it stands right now.
Gonna have Eugene and others basically what we used as the credit area that was in place within the code. And then as we were talking about these issues, that was part of a negotiation, in terms of putting some of these pieces in and into the service plan based on what we were seeing and what we were trying to manage. Many of those things were not criteria that were in place that we utilized. It was it was in the conversation with the developer, and in order to get those in place. So I would say what we have, there could be things added to it, that would make it more that would take some of those things into account. But many of the things that we put in and we’ve referenced were really part of the negotiation
to add on mountain Brook, too, because the affordable Uber affordable, it made much more sense to have them not part of the metro district where if you’re hitting 80% or 70%, it might not make sense if you want them scattered throughout the development. I’m not sure you You can pick and choose lots versus, you know, a set aside of land.
Just a comment, you can pick and choose lots as long as you know, before the house is built, whether you want it in or out. And the way just to say how you would do that is you start the district with a service, a taxing boundary that’s like this big and an inclusionary. That’s the whole project that is this big. And as he as you identify the lots, that won’t be the the affordable lots, include those in and don’t include the ones that are in question that could become affordable lots until you make the determination, so you can manage for that. Another thing I wanted to say in response, I’m thinking of a project we did in another municipality. And unfortunately there we were not able to persuade the jurisdiction to do a district. And so what ended up what ended up happening is the developer decided I’m not doing the higher density product and I’m not doing the affordable housing. I’m doing single family detached. And the reason he did that is because he couldn’t afford to do the other project the infrastructure. He could without the infrastructure subsidy, basically of being able to taxes and finance it. He couldn’t afford the project. So to do single family detached, he had more profit in it, he could do that. And so we keep the the jurisdiction lost that opportunity. That’s that’s how the math falls out sometimes.
All right. Well, I’d like to thank both of our presenters, for being here tonight and answering our questions. At this time, we’re going to take a five minute break and reconvene to discuss and debate the topic.
Absolutely Oh already
Alright folks, we’re going to start, start up here in just a minute or two.
Okay, just give us a little structure. To start off the discussion at least, I feel that an easy way we can go about this because as was mentioned, I think in a previous times call article, we did vote on and approve the mountain Brook subdivision without any debate. And outside of council memory delgo fairing, we all voted a certain way without actually explaining why we voted that way. And so I think we, as just a structural thing, we can go back and actually explain our votes on the mountain Brook subdivision. Just to start things off to kind of give us a path forward in this discussion.
Ali, would you like to go first?
Sure. Each member of city council was been elected to serve the residents of Longmont not developers and investment bankers from California, Canada, Boulder, Denver, Texas and Florida. Longmont doesn’t have a problem with under building. We can look around and see that we have plenty of homes, being built. Each home built here for over the last hundred years was financed and built without Metro districts, if any residents asked for Metro and special districts No. Have developers the Longmont Association of Realtors and other special interest groups demanded it. Yes. Metro districts create a third branch the state government, one that has no oversight. Despite what has been said here. Dola is only a repository of service plans and yearly reports. According to us, Berg and others, about 40% of Metro and special districts do not comply. Ola has no authority or ability to check, enforce or punish Metro districts and special districts who do not comply once one Metro district is approved by a city they cannot be removed except by an expensive court battle. They become their own legal State third branch of state government, it fragments the city and it fundamentally undermines democracy is creates another local government with the ability to issue tax free bonds, raise taxes and fees. They also have the ability to declare eminent domain. They have the ability to receive government immunity from liability for most liability through the Colorado government immunity act. Numerous municipalities are paying the price for having for municipal and special districts for residents through bankruptcies and abandonment by these special districts and Metro districts by increased personal foreclosures and bankruptcies by the residents of these districts. Although council members Rodriguez pack and Christensen repeatedly requested that we set criteria for special districts before approving it, such as was done in Fort Collins members Finley waters, Martin and Begley refused to do so. And we approved our sole Metro district in August. That’s why I voted against approving these in the first place.
I guess it’s my turn.
I wouldn’t I did not approve the metro district because according to the speakers here tonight, they’re set up for structure infrastructure. In the metro district that we approved. There was a recreation center pool that was included in that I would have suggested that they take that out of the initial Metro district and after there was build out or three quarters build out whatever we decided upon the name Issue, another bond, having the vote the residents property owners vote on whether they wanted to actually fund a recreation center or swimming pool, whatever it is they wanted to put in it. But they put it in the initial the initial service plan, which was supposed to be for infrastructure only. That was just one of them. But I want to tell you how I came to my decision to vote against them. The first I ever heard of a residential district was through Councilman waters, and it looked really good as he a good idea. So then I had the ability to talk to three different developers who wanted to do Metro districts but in the conversation, we never got to the financing model. It was always about what a great development this would be. And I agreed, their you know, their plans looked great. It was the financing model. I had a problem with I went to an affordable housing luncheon with about 150 to 200 elected officials and realtors. When it came to the question and answer time, I said that Longmont was looking at making an ordinance for Metro districts and I needed input from whoever was there that had them. Not very many people came forward. But one, one lady stood up and said that she was on the board of 20 Metro districts 20, which I thought you were either over owning property in 20 different ones, or I don’t have any idea how she did that. So that was very interesting to me, then, because I realized, I am an elected official for the people and for the cities so that they’re the ones that are going to have the effect of Metro districts so I talked to six elected officials. from six different cities, and their responses were in Denver, some of the elected officials were trying to figure out how to write an ordinance to override Metro districts. Birth had said put a moratorium on them. Me told me that it is buyer beware, and to others that really approved Metro districts. I asked him about the resale value, what happens? And basically, basically what they said was Sucks to be you if you’re the buyer, because you’re inheriting all of this taxing authority. Then I talked to the Regional Director of Dola, Mr. Sanford, he said they 80% of their time is spent on Metro district complaints, both through municipalities and residents. They can’t do anything except for publish their financials and send them to the county treasurer’s. So We also have the statement that this council is going to monitor the service plans. But we’re supposed to be monitoring harvest junction and we don’t do that. We don’t, the financials are published in an information packet. But this council and the last two that I were on, they we never ever, ever talked about them. So my confidence that this council is going to actually monitor these Metro districts is very, very low, especially after the council’s turnover. We also don’t do anything other than have a report from our CFO, which is great for village at the peaks and their Metro district, if I understand correctly, meeting is held in Centennial in the middle of a day. So that’s what I was told. I asked where Where and when are these being held? So in order to monitor these, I would have to have total confidence not only in this council, but the following councils to make sure that our residents are not being taken for a ride on these. So that’s why I am not until we have some legislation behind this, that it isn’t all falling on the backs of staff and councils. I cannot go along with him.
All right, I guess I’ll go next.
So I’m not inherently against Metro districts, but I do believe they should be very cautiously applied. I think there were positives to the service plan. I did like the limiting down to a third, the amount that was reimbursable. I, you know, I think the 50 mils is a statutory cap anyway, but capping Mills is definitely an important aspect. You know, from testimony tonight I I think there probably could be more disclosures or smaller timeframes in between disclosures than maybe annually. But how I see Metro district so I guess for me is it’s a tool that should be applied when something provides an extreme need for the community or there’s a piece of land for instance, that is extremely hard to develop due to say a high water table where the cost of infrastructure would be exorbitant. And an example of the kind of council vision I would see where this would be applicable is really making the walkable pod neighborhoods concept happen with actual retail and, and the ability for people to not need to get in their cars to you know, wash their clothes. If they needed these laundromat or, or, you know, go get some groceries or things of that nature or even some entertainment and dining options. And similar to I believe it was the 2007 version where 51% of the square footage had to be commercial. I believe it was around the number or providing not just a good number of the workforce housing term that’s constantly banding about but actually, you know, the vast majority say 75% of the particular subdivision or development would be in that neighborhood of value. So I didn’t feel mountain Brook supplied some of those things. Yes, they they are putting in what three 400 condos, but that’s maybe half of the total units for the entire subdivision and so I know just Didn’t go far enough for me as well as it is a nice amenity center. But at the same time, it’s not likely going to stop people from getting in their cars and having to drive around the city. So I just didn’t feel that it met some of those criteria for me, I would have liked to seen more, as far as that’s concerned from from that particular development, and I was privy to that development as a planning and zoning Commissioner prior to my election. So I can tell you that the veterans village and Habitat for Humanity were not contingent upon a metro district which sometimes gets characterized as such, they were always planning on providing that as well as using that to help meet their affordable housing requirement underneath under our inclusionary zoning ordinance. And so that’s kind of in a nutshell also had some problems with the builder not being chosen yet for the condos at the time of the service plan approval, as well as I know it’s not uncommon for there to be Hoa is on top of Metropolitan districts but I really don’t like the layering of he always on Top of Metro districts because I think, you know, one argument has been that Metro districts
can take the place of an HOA.
I’ve heard that argument made before and I’ve seen it in practice in certain communities, that as a real estate appraiser that I praising. So those are just a few of the reasons that I didn’t like that particular service plan.
Councilmember wonderful. Thanks.
So for me, this whole conversation starts when we’re going through our inclusionary zoning discussion in the package of fees and offsets that we were discussing. We got recommendations from lvp the chamber, our own, you know, discussions among ourselves. That I was pretty clear at the time. that we were going to, we were going to adopt an ordinance. In fact, in the conversations I had with folks in the development community, I said, you know, exhale, we’re going to die on I’ll die on we’re gonna we are going to establish a payment in lieu. But we’re also willing to listen to what are the offsets so that we get the kind of inventory constructed that we need on the continuum from affordable to attainable, whether trendle or or not from 38% ami through 100% a month, or 80% enabled. So what we did with the delay of payments into a well, some of the fees until certificate of occupancy was just one example. There were others. But in that conversation, part of it was that that the prohibition on Metro districts should be part of that package. I didn’t know much about Metro districts, or special districts. I’ve learned a lot since then. But for me, I felt like and I and I couldn’t speak for anybody else. And I’m certain This wasn’t true for us and members of the council felt to me like, the commitment we made was we would work with this package, and that was part of the package. So there was for me something about keeping faith with what we I thought we had said, certainly what I had said in in, in this room, in public discussions, in terms of what the package was, so when it came to, I guess, the February decision to amend an ordinance. There wasn’t a lot of debate, because I thought we agreed to that. It was clear in that moment that night that that not everybody was on the same page. But all of that discussion was tied to I thought, some objectives we were trying to advance together. Housing objectives were trying to advance together. And certainly growing our housing inventory, whether it’s for purchase or rentals for the 30 to 50% am I was part of that. But so is workforce housing, attainable housing, at least from my perspective, as a candidate. Seems like a long time ago, the first time I attempted to do this, I talked about at that time, there wasn’t there was no inventory and there still is not much inventory in this market for teachers, that affordable for teachers, firefighters, police officers, hospitality industry, there’s just there just isn’t. And part of the reason there isn’t in my view, and I I’d be happy to have somebody prove me wrong on this. Part of the reason there isn’t, is that Longmont took the position to say to developers You pay for that up front, you get your room, you get reimbursed as you sell those homes. And what we heard a little bit ago is what happened. Developer said, Okay, that’s the deal, we’re going to build more expensive, larger detached homes, higher margins, will get our will get our infrastructure cost back home by home. But we are not going to deliver the kind of product that you need in this town for a population of young families that we’d like to establish themselves here. And if somebody can point to me, point out examples where that inventory has been in the market with the exception of one develop and then open recently, you know, I’ll I’ll just be quiet but I don’t think you can, or anybody can because it wasn’t there. So part of the, for me part of the end of the value or the interest, as we went through that whole process, was when we said leave it on the idea of a mid tier exception and I know that’s not universally valued around this time. table. But to say to developers, you give us that kind of product, we will charge a fee. Because we because we have families that need that, right? The fact that if you if you talk to the, the general manager smuckers he doesn’t have any employees who live in this area. He doesn’t live in this area. They all commute from someplace else at $23 an hour, because there’s no housing stock in this town available for
my son and daughter in law. Both stand up pretty successful people. She’s a teacher, he just went to work for CenturyLink doing kind of application development. two beautiful daughters, they can’t afford to making six figures between them and you know, probably a couple hundred thousand bucks. They can’t afford two houses in this town because there’s no inventory. So one of the one of the upsides potentially, of the idea of the metro district that we could, we could see a way to finance the cost of housing to deliver a product, which is what that was what the mountain Brook application does. Now I share your concern. Your protests about not having a builder selected at the time that reviewed and I know for a call, but I was sending a message to developer I directed at the Herald to say, Harold, you tell his developers, they darn well better find a builder that builds those 200 condos to take advantage of the mid tier exception. Because that’s what that’s the right starter home for an awful lot of families. You know, I hope they build it. I’m gonna be real disappointed if they don’t, and I know they’re watching tonight. So that’s the message again to that team. But there wasn’t a lot of debate that night when we got to the approval of that plan. I’ve heard a couple of you say, we didn’t have debate i was i sat in that chair. My recollection, we had a lot of debate. We went, we went page by page point by point in that plan, asked questions, I could pull my questions at the questions we asked about caps about transition about, about transparency about eligibility for bond purchases, a ton of I think, the right questions that gave and fact the staff did the hard work on that ahead of time, you got to give them credit. Where we end up with this in the in the caps, the limits and the accountability is more reflection, I think of Jim and these two than anything we did. But but I think we ended up with a pretty rigorous criteria. So when I hear Councilmember Christiansen say, we had no criteria. And I heard Councilmember Christiansen say that that night, will say well, maybe you don’t have one, but I did my own homework. I talked The mayor of commerce city, I talked to council members. In Parker, I talked to the director of economic health in Boulder, or in Fort Collins. I talked to a council member, Lakewood, where they had just gone through the, you know, this experience of setting the growth limit. I went in at the housing conference in October, I talked to their economic developer and their housing director from from Lakewood to learn what the implications were for them the 1% growth limit, and they’re devastating. So if if one of the ways we can assure in this town that we drive young families out or keep them out and increase our rate of homelessness, is to limit growth, and to make it so expensive for people to buy homes, that they’re going to have to go someplace else. If that’s what we want to do, then we have to be clear that that’s the objective. That’s not the objective. I think we ought to be pursued. So if you come to the the mountain Brook development, you go back to the analysis. Yeah, maybe we can argue about it, but But if you ask the question from developer after developer, you get the same answer. What would be the difference in market rate for house inside versus outside the district over $30,000 on average per home. Now just do the math, the interest rate on a 30 year mortgage at $30,000. On top of whatever you’d have to pay,
what that what the total cost of housing is for that family versus one that purchases inside the district $30,000 less financing $30,000 less than a mortgage over 30 years, but paying the the the the property tax. Total cost of housing is less inside the district than outside. That’s what we saw in that in the application from the mountain book number of folks, if we hadn’t seen if that if that if the bond house wasn’t going to be transparent if transition of leadership or governance of the of the metro District Board didn’t transition immediately. And I Jim Jim reminded me at the break that they projected by 2022, which is about the time they’re going to be people will be moving into that district in that may of 2022. election cycle is when residents would be eligible to be elected this not 10 years waiting or whatever. As soon as they’re there, they get a chance to transition onto the governing board. There were those kinds of thresholds, that if we’ve gotten a no, nope, not going to transition, nope, not going to be not transparent. Yep. The the developers are going to buy those bonds, and they’re going to, they’re going to they’re going to earn their can earn the interest, and they’re going to get reimbursed if they’re, if they’re, if they’re cashing on both ends of that. If that had been a yes to that question, not have voted no. But we got the right answers from my perspective, down the checklist. In fact, what I passed out a little bit ago, is a reflection of the checklist for me to develop as in the run up to that decision. reflects both my criteria and the criteria of council member Morton, that we were kind of working in parallel and then put some ideas together. But I just I want to save it for somebody to impute that I didn’t have a criteria that night, I want to say that’s just flat out wrong. It’s not accurate. Now, I think we ought to get together on a criteria, because I think we ought, I think if we say to ourselves in this community, we are not willing to do the work. That gets us to the point we can say we’re first going to do no harm. But we are going to figure out how to get smart learning from the best to apply this tool. So we so we continue to drive housing inventory, housing stock that’s available attainable for working families, and accessible for those either need subsidies or simply aren’t going to qualify otherwise, for for a for purchase home. If we’re not willing to do that. Then we are I have to say to this community into one another, we are not as serious about housing object as as we said, we were. We don’t we’re really not as concerned about the long term vitality of this community, because we care about the kind of housing inventory that our policies would drive the marketplace toward, for families that need market rate homes that are affordable or that are attainable, 80 to 100% of a mind. And I think that’s part of the beauty of what we did with our package. But to take that take the metro district tool out of the toolbox just seems to me to be short sighted, at least without pushing ourselves a little harder to see to learn what there is from the best because we haven’t done that. I have to say i for i could build a didn’t long enough in the field of education. I could write a series of articles and get them published someplace in persuade readers of those articles to shut down America. Public School System. I could tell a story of failure in our public school system that would make you sick. But we don’t do that, because that’s not the whole story. Certainly we have failing schools and school districts. We’ve got we’ve got superstars out there as well. But if we only tell part of the story, we’re going to make a decision based on worst case. And I’ve said many times, I think that is the worst mistake we can make. So I voted yes, because I thought it was a good application. I would vote yes. Again, on that application. I would have additional questions. I would push harder on some on some of the questions that I probably didn’t push hard enough that night. But I’m confident we made a good decision. And I, I’m confident that we’re smart enough as a council to get clear on the criteria and to make good decisions. And I’d like to think that whoever comes behind us could take advantage of what we’ve done. We can create the kind of guardrails, the kind of regulations It keeps unless you know people want to come in and just do away with them or just unravel what we would create. But any council could do that seems to me, we’re smart enough to put together a set of guidelines that keep subsequent councils in fact that would subsequent councils would likely appreciate because we did the hard intellectual work, to put it together in ways that first do no for.
But our if we’re unwilling to do that, I’m look to my colleagues into this community, I would say, we aren’t as serious about housing objectives, as we told you, we are because now we’re not willing to do what needs to be done for a part of the continuum. And by the way, those of you in the community who care about homelessness. If we stop short on this, we’re going to contribute to the homelessness or housing insecurity in this community. So hold us accountable for all of it. If we can’t deliver because we’re unwilling to do the hard work, the new how to, you know, like the other people To sit up here and get smarter about how we approach this, and we’re willing to do it. So I arrived at a set of conclusions. I think we can come together on a way to do this. There is we get to review every application, we can say no to all of them. We want to, we ought not to take away the chance to say yes to great ones that drive the market the way we want to be driven. I just don’t understand the wisdom of taking those options away from ourselves. I’m done.
Thank you, even though you weren’t a part of that vote, I would like you to chime in with any thoughts or or where you’re kind of feeling at this moment. As far as this whole subject is concerned.
I’ll put in my my two cents.
So this was a hard decision for me. I didn’t come in with a said, Okay, we’re going to, we need to stop this. I made it a point to not read editorials or the articles that went out. And I specifically looked at data.
I looked at voting trends in a couple of cities and also knowing the voters in Longmont. I Canvas a lot for
primarily public school initiatives, bonds and mill levy override. And every time we’ve tried to pass a bond and mill levy override since 2008, I was out there hitting the doors. And one thing I learned about our Longmont voters is they’re very keen and they read and they’re very careful about any kind of tax increase.
They’re very smart voters. I gotta give it to my community, our community.
They will support and stand behind Any kind of increase, if they feel it benefits the community as a whole, so I have to give, give our our community that that’s what I love about my community. They’ve been very supportive of things that
that impact the community as a whole. And I did, I went back and forth with this and I intentionally reached out and talk to people who I knew who were in support, because I wanted to kind of wrap my head around both sides to ensure that I am making the right decision. I’ve lost sleep over
it. I’ve read thousands of pages.
Because it was that serious for me.
And I still had no definitive answer. That’s what I decided during my winter break to hit doors talk to talk to groups of people, making sure that you know, so I might have a set a mindset of, Oh, this is what the community wants, and then I get out there. And I’ve totally missed the mark. I mean, I had a set of questions that I wanted to bring forward. And I wanted to talk about specific things around gentrification and certain issues that I wanted to bring to the table. But that was not those were not the concerns of the people I spoke to. And I tried to make sure that it was a well versed group of people that I that I reached out to and it was close to 200.
I think some of the,
you know, I think bottom line is I was voted here. I was elected to serve the people. And I think of about, you know, if I kind of sectioned it off.
For about every 40 or 50 people there were probably about two or three that were adamantly for, and the rest either didn’t understand or they were against and they provided Very solid reasons as to why they didn’t want to go that way. And so the other thing is we also need to honor and respect the desire of our community, and what they envision for our community. I have things that I envisioned for my community. I think if I asked every single person here, what they envisioned for long mod, everyone’s going to come up with a different idea, but it is our duty, it is our obligation to represent and carry out the desires of our community. And, and, you know, and you brought up some very valid points and you know, I want to look through it
to build criteria that would ensure individual homeowners that they aren’t paying astronomical tax rates, you know, I want to ensure that I want to eliminate as many risks as possible. We’ve been able to so you know, I pull up and I know you all know about the article, the boom town lost my
my apologies. So
So boomtowns characterized by prosperity and robust development or often desirable places to put down roots and take out a mortgage economic growth provides employment opportunities and draws new residents. So, law must be number one, categorize Boomtown.
And was this and this is through the smart asset website. So the top boom towns in America 2019 Longmont, Colorado. Why leads the way in our study on the top us boomtowns. It ranks in the top 25th percent of the study of for for all metrics we consider its economy has been doing well as it ranks ninth overall, in yearly GDP growth from 2013 to 2017. At more More than 5% long lot more than 5% long one has the top 30 rates for its unemployment rate and high five year housing growth growth rate at 2.6. And approximately 18% respectfully. And this is without the use of the tool, I really want to spend more time and delve into criteria. The concern I had in talking with staff and I’m coming in from a workers right and labor union advocate, to spend 135 hours of our staff time to process and bring forward an application just for for city council to decide if they want to move forward or not. is not acceptable to me. And that we run the risk of stretching our staff too thin. That is where mistakes happen and that is where we lose quality people. I’m really impressed with the staff. We have and I’d hate to lose them with to just over over bombarding them, well just assign it to staff and have a you know, every time I would sit in the audience and well, you know, I, I assigned staff to look into this and I’m, I’m thinking the hours are calculating in my head? How much time Are they going to have to spend to do this? And what is it taking them away from? I would like to tighten criteria. I know I spoke with Harold about the more criteria we have or the more specific criteria we have the less and correct me if I’m, if I said it wrong, the less time you spent per application, is that correct?
Yes. So generally, if I can paraphrase the question, yes. to kind of help. The question was really about. So how much time would it take based on if we had more specific criteria? And I think my answer, and if I’m wrong when I told you correct me, but the answer was more specific. The criteria is in turn Of what council wants to achieve. Yes, the easier it is for us to evaluate that in the less time that would it would take, the more general it is an open ended, the more time it tends to take and that’s really the rule of thumb on most issues that we deal with.
Yes. Okay. So, I mean, I would like to see something that has more checklists. It’s it’s more defined to lessen the burden on our city staff. Additionally, I want to see what this one does. I mean, yeah, we can look at different communities. We can look at Highlands Ranch, we can look at Parker we can they’re not lamotte. They’re not. We have a huge very, I think we have a very unique clientele of people in our city and I want to meet the needs of our city. I want to see what how this how mountain Brook development works for our city, before moving forward with any others and adjust our criteria is necessary if that is the route We decided to go, we owe it to our constituents, we owe it to our community. If this is not the direction they want us to go, it is our duty and our obligation to look for other ways. It won’t be easy, and we will have to get creative. But this isn’t the only way. And I would like to spend more effort, looking at other avenues to meet the needs of our renters of our low income housing and addressing homelessness. And I don’t believe in one silver bullet either. I want to look at various options and tools. So that’s kind of where I’m coming from.
Okay, now, since we’ve all gotten terminal, just start ringing in.
I getting in the queue to speak as opposed to just going we already went down the Dyess what’s up Councilmember Baca.
Thank you, Mayor Pro Tem, as far as the criteria go, and and i agree with both of you that we need to see how this one goes. But this build out is probably going to be three to four years. For the build out on mountain Brook. At what point do we know how it’s going to go? And how long do we hold up development to see how this goes? Because it’s not going to be fast. And we don’t know what the ultimate end will be for this. And as far as criteria, I do remember that we asked for us to set criteria and that’s when mailbag they said, well, let’s just do this one, and see how it goes first. And we didn’t go anywhere with that. Now cosmin water you may have had your criteria, but it wasn’t the council’s criteria. That, that is where I’m going on everything we do that it has to be the council adopting criteria to put into this ordinance or into every service plan that we look at. So that staff knows what we’re looking for, which would reduce their time. So I have no, no desire to wait three, four years, it’ll be a totally different council to see how this one goes. I mean, so that’s, that’s where I am with it.
I don’t see a need for a complex financial thing. As I said, For the last hundred, over 100 years, we’ve built these things. We’ve built plenty of housing. Without this. There’s no need. It’s been called a critical tool. So we’re subprime loans and credit default swaps, they were supposed to help get people into housing. And I think we all know how that worked. There are good tools and there are bad tools. I do not want this city divided into five terms of privilege. As far as limiting growth and making homeless more expensive, that’s certainly not something that anyone on this council wants to do. I have spent six years restoring the affordable housing mandate. I think my my commitment to affordable housing and ending homelessness is without question, and I do not care for someone who would question that. As per council rules or procedures 17.5 I moved to instruct the city manager Domingo’s and city attorney may to place on the January 20 28th regular session, a first reading ordinance to restore ordinance 2007 48. Or wait. The amended one of 2012 which I would like to point out includes mixed use of provision for mixed use development, as Councilman Rodriguez was talking about, that does provide for being able to use residential district districts provided that it doesn’t include more than 50% residential. That is the compromise and it is a good one because it it upholds the environment, lawn one and vision plan and it is what we have had in place for a good long time and has served us well. So I would like to restore ordinance 2012 regarding the residential special districts, which will thus revoke or repeal the recent ordinance 2019 13 with the addition of replacing Longmont area comprehensive plan within vision Longmont, wherever that happens. This is simple, clear and fair. Do I have a second?
seconded by Councilman council member is all the fairing
anything else Polly?
I just want to say no one wants to see fiefdoms or gated communities in this town. I agree. I do think there’s some just hard realities of what we’re what The Council is about to do and you can count the votes and its implications for a segment of our population that that we’re we are we are going to now I think do a disservice to who I think we had some prospects of making progress for on their behalf in terms of housing inventory. So there’s, there’s we’re going to continue to see houses built, but we’re not going to see houses built that are that are attainable for young families, who we’d like to see establishing themselves in Longmont. If we do this, and I can have a pretty good idea that’s what’s going to happen. So I would say to myself, to the members of this council, to the members of the community, somebody needs to say remind us that what we do speak so loudly that we don’t hear anymore what we say. Right, so Actions you’re going to take a whole lot louder than words with this vote is because we can talk the talk about homelessness and housing affordability and people have an access. And then we craft policies that obstruct our ability to do that is is anything but I can name it but anything that walking the talk, but it does speak volumes in terms of what our commitments are. So I’m going to vote no on the motion, but it will be a uncertainty it will be just for my
camera Councilmember back.
Thank you, Mayor protein. Eugene, this question is for you. Would this motion affect, for example, library districts because they’re a different type of special district or a for example, example of water district sewer district or is it just residential Metro districts? I want to make that clear.
mayor and council Eugene May, city attorney. The easy answer on library districts is no library districts is a different title,
water, sewer, and all those listed purposes are all special districts. So this would apply to those districts. They fall within the definition of special districts, parks,
that type of infrastructure.
So let me
this motion will not affected him or it will affect them. We’re only re re moving the residential Metro district.
So residential Metro Dix district is kind of an oxy On its Metro districts being used for residential development, right Metro districts do water, sewer streets, protection, services, things like that.
So it will not affect if we go back to the original
one. I’m not sure what you mean by not affect
they will be subject to the residential prohibition.
Okay. Thank you.
I would like to remind Councilman waters that we have a 12% affordable housing mandate. So of course, that will continue to be in effect and we are not harming that at all. In fact, we have lots and lots of housing being built. As far as the yes the special districts are allowed to build All of those things that
referenced but they are also already being built by the traditional method of financing. So since we have managed to provide water, sewer fire, and all those, just those services without special districts, we will continue to be able to provide those without special districts.
Council Member waters
Yeah, I just like can I like to drill down a little bit more on this question. So the difference between a metro district in a special district is Multi Purpose versus single purpose has nothing to do right with residential versus something else, right. It’s simple. It’s single purpose multi purpose. So just hypothetically We were are we saying that the that special districts are okay. would not be I’m just trying to clarify what the intent of this motion was. Because if not just ask that question was the motion to eliminate all special districts in all Metro districts?
Councilmember Christianism just
as I think you are aware, the the current rule that existed before last February, when we changed it was merely talking about residential, special districts and Metro districts. Not every single thing. That’s why it allowed for commercial districts and library districts which are another form another whole category and state law. The new special education districts that’s Another whole category and state law. This has to do with the original ordinance was 2007 as 48 and it was amended in 2012. And it really only has to do with the residential application.
So do I have the Forest Hill? Well, I think I heard the city attorney say that the distinction of residential is meaningless in this context is so to explain more.
I do have copies of the prior ordinance if that would help council understand and it
City Council will not approve the formation of special districts to fund capital improvements in development containing residential uses. It’s really about the use
except mixed use residential districts. 51% commercial.
any so how would a if there was a cultural, cultural, larger district or performing arts district and I’m looking on this list. We have a we have a creative district now. We’re about to get a feasibility study on a performing arts and Conference Center. There’s been some interest in the possibility of creating a district for this, you know, to support that is that but I don’t see that listed in what we got from Tony. So our cultural districts an option.
I think it depends on what goes in it.
Districts purposes, authorized by the statute include Parks and Recreation.
I don’t know if that would fit within the concept. I don’t know if there would be residential uses there.
But let’s just assume hypothetically, if there was a Parks and Rec district, and there’s development that’s going to occur in the residents of that development, there’s going to be developed that neighbor that’s going to be dealt developed, they’re going to be subject to it would be subject to the rec district fee or tax. This doesn’t apply in that case in terms of residential development. And if it doesn’t apply, not, as you could both answer that you can just answer that question.
I think it would apply if we went back to the old way unless it was mixed use.
So a rec district or or a special district that would apply citywide, let’s say, would what would prohibit I mean, you couldn’t then you couldn’t develop Because a new residential area would be paying that taxes that stop all within residential, all new residential development? Well, I’m asking him,
it would stop residential development that wanted to use a special district.
Well, that special district already exists, they would be using the rec district or they would be using the mosquito control district or the covenant enforcement district or the performing arts district. I just wanna make certain that we’re not shooting ourselves in that foot.
This is a new development.
Yes. If it has residential uses, it is not mixed use it would be prohibited under the old ordinance.
Well, that those implications are fairly serious, it seems to me. You can take Library District out of the mix or take a special early childhood education district out of the mix, but But it’s that if we if if the city created approved a performing arts district, city wide, or cultural arts district city wide, that would end development, new development, because they would be any new development, then that would be subject to that tax. Correct. And I think that’s the intent. But I just want to be clear on what the implications are.
Mayor Pro Tem members account so I’m going to take shots. I’m not the lawyer,
he’s lucky he’s struggling with it. And I guess my thought is, is that it’s going to probably take a new ordinance to address what you’re talking about with a citywide district. I don’t think the dish that the special district ordinance we have now would address it as is or the one that we would go back to, but if you want to put a city wide tax in place, we’re not talking about new development here. We’re talking about existing and all development. I think that’s not a Dressed in the special district code right now. So, so it’s, it isn’t today, and it wasn’t before. So it isn’t quite as simple. If we go back to the old ordinance, it’s going to require a second ordinance to keep us from restricting any new development. If there was a city wide special district for performing arts or something like that, again, I believe it’s going to we’re going to have no matter where you are with where you are today or where you go back to where you were before, it’s going to create need a new ordinance created, I believe, to to put a new tax in place, and its unique need to be voted on obviously, by the voters. So so let me now play this out. So there’s a new ordinance that allows that could a developer not not for the purposes of developing a residential area, but use the traditional approach to develop a residential area but want to create a special district just For that residential area, not for the purposes of residential development, but I want to create a recreation district. So I want to monetize my community. So I have we have amenities beyond what happens in other parts of the community. And we’ll do it through a special district, just from my, just from my, my, just for mountain Brook for just for the use of a term. Or why could why well, why Why couldn’t I do that? Given what you just said,
with with, with the audience to today, or the old ordinance, that that the old ordinance wouldn’t allow you to do that, because it’s
residential, it needs to be it only allows for mixed but I’m gonna
know after I’m gonna finish the community, right, but here’s what I’m not gonna use it for infrastructure. I’m not going to use it for building homes code. I just want to use it to monetize after the fact after I’ve financed my my community. So it’s not for the purpose of development. For the purpose of a monetizing, so I want to recreation district I want to come back I want to do a special not just a recreation district, I want to do a special Arts District. And then I want to do a special, I don’t know. Because I want to now I’m going to layer special districts to monetize and enhance my community. What would keep me from doing
the old ordinance reads the city council will not approve the formation of districts to fund capital improvements and developments containing residential uses. So if there are residential uses and their capital improvements, then this would prohibit that. Okay.
Then I’m back to my first question and what I’m wondering what the fallout might be, but I’ll be undone
things. One, one point of clarification that I heard the special the new special education districts are title 32 districts. They are not like library districts in a different title. Okay, well, I’m
Not that that’s going to happen but what what what if at the county level? What if there’s a about a question on the ballot to create a special district and county level applies countywide does not apply to us or that stops residential development because every residential development would be paying that tax for the special for these early childhood education special district.
You don’t have to answer that tonight. But that’s an answer to a question we need to have so that we’re clear on what we’re about to do.
several years ago, we voted for SF was a special funding for Metro for arts funding now was the entire town voted on that. I don’t object to any of these things where the entire town is voting on it, that it has nothing to do with this. And that would not be prohibited. We can vote on countywide things we can vote on city wide things. What I object to is creating special little areas of privilege where they get to have their own little special stuff that divides this town and makes the the inequality in this town even more extreme every year. That’s what I’m objecting to. And if you look at the special districts titles 32 It includes ambulance, health service, sanitation, fire protection, water, health assurance Park and RECs, water and sanitation. These are things that the city’s used to provide. This originally was supposed to provide things that the city could not Provide or that the rural districts could not provide, as was the mining law that our speaker one of our speakers mentioned, it has morphed into something that the cities sometimes do not want to provide because they would have to raise a special tax. It’s a way to get around Tabor. And it’s not a very fair way to get around Tabor. And it creates gentrification it truncates. Far for more inequality. We can vote on a Library District. We city wide, we can vote on a special Childhood Education district statewide who wants to have a neighborhood that has their own very special little child care. That’s not the right. And that’s what we’re talking about. We have nothing. This has nothing to do with cultural centers which we would be which we should be voting for. city wide. Four, city wide services and amenities.
Thanks. I appreciate the sentiment I and I, there’s nothing you said that I would disagree with. I would just like to make certain that that I appreciate your opinion I would like our attorney to not you have to do it tonight but to assure we’re not about to do damage to other things that we we would like to accomplish. Even if we take away our opportunity to reduce the initial purchase price of homes through the use of Metro districts as a way to finance
else has left Nikki so I think I’ll take this opportunity to chime in real quick. I’ve had the opportunity to review the document that councilmembers waters and Martin prepared and I think it has a number of very good recommendations to to look at and think about in case we might be able to get to a point where we can narrow down the scope of what we think is allowable for Metro district whether we think that or not, because I know Councilmember Adolfo fairing mentioned something to that extent where she’d like to see, you know, a specific set of criteria. And I think that if you look through that document, it gives you a good idea of some of the ways that we can further hone potential use for Metro districts. As far as the specific motion is concerned. I liked to reference it because a uses kind of a template of a potential use a, you know, commercial mixed use residential area. Do you think that limiting it to just that would be problematic because I think there could be possibilities where there are very exceptional proposals that could be presented to us like I gave the example of 75% of workforce housing is being incorporated and that is, well well, more than mountain Brook is providing no It’s probably more than generally most subdivisions coming in are providing at this time. But we do have that middle tier cut out, which hopefully would also incentivize the increased building of that. So as the motion on just reinstating this the ordinance as it was written, it’s just not the right size for me it would, it would need to be altered. So I, you know, if we are going to move forward with bringing that discussion up, be ready for potential alterations to the the ordinance as it was written just doesn’t work for me. With that said, Nobody appears to be in the queue. So let’s have a look.
So having heard that, Councilman Christensen, would you take an amendment that we bring the original one back
conversation to look at it in alternate about rather than bring it back
as it was originally
done to alter it so that it is not exactly the way it’s written, amended today.
With that, does that make sense to you?
I mean, would you accept that amendment that I’m talking as loud as I can, sorry.
So instead of instead of bringing it back as the original one, bring back the original one, with a conversation from council as to how we can alter it, and not just totally change it to add residential Metro districts in totality Would you accept that?
That’s my Christmas.
Yes, in fact, of course, we would have two more public hearings and opportunity to discuss it. So I would be open to amendments and discussing it.
I just like to point out that usually when we are bringing ordinances forward, we stick them in a study session first before we even bring into first reading. And so that would probably be the appropriate venue. I
mean, that’s my, you know,
so I would be open to voting for that amended motion.
I believe it is to bring back the 2007 ordinance as amended in 2012. To a study session,
where it would possibly be brought to a first reading
nobody’s in the queue so we can
so we can have a vote.
Holly didn’t vote.
I’m assuming she’s voting for
the vote passes with Councilmember waters dissenting. Passes four to one.
Okay, so we have that motion and that’s past.
Would anybody else like to add anything at this time? I have
a question. Is there anything that you all need from staff in terms of when we when we bring this or is it just the original ordinates?
I would suggest just bringing the original ordinance and letting the council amended as as they see fit. That would be my suggestion, because I’m not sure what kind of recommendations staff would decide to bring without knowing the intentive. council members.
Right. I just wanted to make sure that we were bringing you all what
Mayor council one minor technical clarification, I forgot that there was a non substantive amendment in 2018 when we adopted the land development code that did make some of those changes referring to envision Ahmad stead of llaman area comprehensive plan got rid of a couple of the policy statements from the old comprehensive plan. So I assume the direction is to bring back sort of the version that was in place before we amended in February 19. So there’s one subsequent to the 2012. Okay, the 2018. Okay.
With that, is there any comments from city manager? city attorney?
Can I get a motion to?
I move that we adjourn.
All in favor.
We are adjourned.