HomeMy WebLinkAbout20110861 HEARING CERTIFICATION
RE: CONSIDER AMENDED AND RESTATED CONSOLIDATED SERVICE PLAN FOR
BEEBE DRAW FARMS METROPOLITAN DISTRICT NOS. 1 AND 2
A public hearing was conducted on March 16, 2011, at 9:00 a.m., with the following present:
Commissioner Barbara Kirkmeyer, Chair
Commissioner Sean P. Conway, Pro-Tem
Commissioner William F. Garcia
Commissioner David E. Long
Commissioner Douglas Rademacher
Also present:
Acting Clerk to the Board, Elizabeth Strong
County Attorney, Bruce Barker
Planning Department representative, Kim Ogle
The following business was transacted:
I hereby certify that pursuant to a notice duly published February 9, and February 10, 2011, in
both the Windsor Beacon and Greeley Tribune, respectively, a public hearing was conducted on
March 16, 2011, to consider the proposed Amended and Restated Consolidated Service Plan
for Beebe Draw Farms Metropolitan District Nos. 1 and 2.
Kim Ogle, Department of Planning Services, presented a summary of the proposal and entered
the favorable recommendation of the Planning Commission into the record as written. Mr. Ogle
stated this is a proposed amendment to the applications approved by the Board of County
Commissioner in January, 2010. He stated the community election conducted on May 4, 2010,
to approve the Service Plan, resulted in a tied vote of 42 to 42. He stated since then the two (2)
Districts have been negotiating revisions and obtaining input from the residents and the
developer, resulting in the proposed Amended and Restated Consolidated Service Plan.
Mr. Ogle stated on November 2, 2010, a majority of electors for District Nos. 1 and 2 approved
the proposed Amended Service Plan and related restructuring documents. He read the referral
comments submitted by Don Warden, Director of Budget and Management Analysis and former
Director of Finance and Administration, into the record, as follows: "The Weld County
Department of Finance and Administration has no objections to the Amended and Consolidated
Service Plan for Beebe Draw Farms Metropolitan District Nos. I and 2 as presented. The
Amended and Consolidated Service Plan, as proposed, is consistent with the approach that
resulted from MaryAnn McGeady's efforts in working with representatives of the community and
developers to resolve some of the historic issues associated with the two (2) Districts. Finance
and Administration staff concurs with the approach that resulted from those discussions and is
incorporated into this proposal."
MaryAnn McGeady, McGeady Sisneros, P.C., representative for Beebe Draw Metropolitan
District Nos. 1 and 2, stated she has two (2) presentations prepared for today; a short version
9• which explains the changes in the proposed Service Plan, or a longer version which explains all
the elements of the proposed Service Plan. Chair Kirkmeyer indicated the Board would like
Ms. McGeady to begin with the shorter presentation, and the Board will hear the longer
o presentation if it has remaining questions. Ms. McGeady indicated the Service Plan previously
approved by the Board was presented to the community for implementation via an election
which resulted in a tie vote; therefore, it became clear more time was needed to reach a
consensus. She stated both District Nos. 1 and 2 appointed Executive Committee
HEARING CERTIFICATION - CONSOLIDATED SERVICE PLAN FOR BEEBE DRAW FARMS
METROPOLITAN DISTRICTS NOS. 1 AND 2
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representatives, which collaborated on the proposed Amended and Restated Consolidated
Service Plan and then submitted it to the community for election, which was opposite of the
process previously followed, where the election occurred after the Board of County
Commissioners approval. Ms. McGeady stated the proposed Amended and Restated
Consolidated Service Plan was approved in the community election this time. In response to
Chair Kirkmeyer, Ms. McGeady stated she is unsure as to the exact numbers in the most recent
election; however, it was approximately 50 to 20. She stated there was a significant amount of
discussion about how revenues will be allocated within the community, and the Service Plan
anticipates the establishment of an Authority Board by intergovernmental agreement. She
stated the Board will have two (2) resident representatives and two (2) developer
representatives, appointed by their respective Districts. Ms McGeady stated the available
revenue to the Authority Board for various functions was revised, and there will now be an 80/20
split, with 80 percent of property tax revenues, minus operating costs, being deposited to the
Infrastructure Account, and 20 percent being deposited into the Amenities Account. She stated
the previous distribution was 85 percent to the Infrastructure Account and 15 percent to the
Amenities Account; therefore, there was a five (5) percent increase to the amount of property
tax revenue which will be applied to the amenities account. She stated 100 percent of the
Development Fees will now be deposited into the Infrastructure Account; whereas, previously
85 percent of the Development Fees was distributed to the Infrastructure Account and
15 percent was distributed to the Amenities Account. Ms. McGeady stated there was previously
going to be $325,000.00 deposited to the Amenities Account when the Authority Board was
established, and there will now be $400,000.00 deposited. She stated there was previously
$200,000.00 set aside from the general mill levy funds for the 1998 bonds, and there is no
longer any amount set aside to assure payment of the debt service funds; however, there will be
$325,000.00 deposited into two (2) separate Reserve Accounts to begin reserves for capital
repair and replacement, and operating and management. She stated the definition of developer
has been broadened to include any entity or person having 20 percent or greater ownership
interest in REI or its successors, and any entity that REI has a 20 percent or greater ownership
interest in. Ms. McGeady stated there continues to be a certificate required for the issuance of
debt from an external financial advisor, regarding the reasonableness of the debt terms. She
stated the maximum debt interest rate is limited to 400 basis points above the MMD, which is an
industry indicator of rate, unless waived by a majority vote of the Authority Board. She stated
this was introduced into the Service Plan based on concerns the rate may exceed what some of
the residents perceived to be a reasonable rate. Ms. McGeady stated that other than the
Pledge Agreement, District No. 1 shall not have the authority to issue any more debt, unless it
amends the Service Plan at a later time. She clarified District No. 1 is where the residents live,
and the boundaries of District No. 1 will continue to grow, as development occurs. She stated in
the event there is a shortfall in revenues for operating purposes, the agreement will allow for the
transfer of funds from the Infrastructure Account to the Operating and Management Account,
subordinate to outstanding debt issued by District No. 2, yet not subordinate to Developer
Revenue Obligations. Ms. McGeady clarified that if the Developer has advanced funding to the
District for the construction of infrastructure, the repayment of the Developer will be subordinate
to the transfer commitment. She stated there are also restrictions on the number of lots the
Developer may have in inventory without the consent of the Authority Board. She stated there
has been a great deal of community input in the Service Plan process and she looking forward
to its implementation. Ms. McGeady stated there was one (1) change made to the Service Plan
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after the election, at the request of some of the resident representatives on the District No. 1
Board, which was introducing the ability of the Board to provide trash collection services in the
future, if it is determined that is what the community wants, and it will be determined by the
resident Board members whether to implement the ability. In response to Commissioner
Conway, Ms. McGeady confirmed the Authority Board will consist of two (2) District No. 1
members and two (2) District No. 2 members; however, the operating functions will be governed
by the resident representatives, the developer representatives will govern the infrastructure
construction, and the amenities will be governed by the Authority Board, with both resident and
developer input being necessary to implement a new amenity. Further responding to
Commissioner Conway, Ms. McGeady stated three (3) of the four (4) members on the Authority
Board must reach a consensus for approval on matters. Commissioner Conway inquired as to
how residents are appointed to the Authority Board. Ms. McGeady stated the District No. 1 and
District No. 2 Boards, which each consist of five (5) members, will still exist for the purpose of
appointing members to the Authority Board. In response to Chair Kirkmeyer, Ms. McGeady
confirmed the residents will be elected to the District No. 1 Board and then that Board selects
two (2) people to serve on the Authority Board, and the District No. 1 Board will be able to select
representatives for the Authority Board by utilizing any procedure it chooses to establish;
however, it has not yet determined its process. In response to Commissioner Garcia,
Ms. McGeady stated all of the meetings were held in the one (1) common facility in the
community, all the residents live within walking distance from the facility, and all meeting notices
were posted in the mail room within that facility, along with meeting agendas. She stated there
was also e-mail communication distributed to people within the community by the Board
members, and there were community meetings, in addition to the Board meetings, leading up
to, and following, the approval of the Service Plan. She stated there was also communication
with all of the property owners, in order to reach those property owners who do not live within
the community. Ms. McGeady stated the election was conducted by mail-in ballots; therefore,
all the property owners received ballots, whether or not they reside within the community.
(Clerk's Note: A copy of the PowerPoint presentation Ms. McGeady prepared was
subsequently submitted for the record and has been added to BOCC Exhibits as Exhibit A,
although she only reviewed the points listed on the last page of the exhibit at the hearing.)
Jeff Hare, resident of Beebe Draw Farms Metropolitan District, stated he opposed the prior
restructuring, and he was elected to the District No. 1 Board and is serving as its Chairman, and
he was one (1) of the two (2) community members who were appointed to work on the
restructuring. He stated the outcome of the negotiations resulted in significant compromises for
both the District No. 1 and District No. 2 Boards. He stated the Authority Board, in addition to
the two (2) District Boards, is an overly complicated structure, and it would have been better to
transition to a single board, which is part of the Model Service Plan for Weld County. Mr. Hare
stated he was previously one (1) of the main leaders opposing the restructuring; however, once
it was renegotiated, he strongly supported the restructuring. He indicated approximately one-
quarter of the community voted in opposition to the proposed Service Plan, most of which were
mainly opposed to the issuance of any additional debt. He stated the concepts within the
Authority Board and the restructuring are extremely complicated and it is not easy for the
average person within the community to understand the protections placed in the Service Plan
for the issuance of further debt. Mr. Hare stated the major point in discussions for him was to
protect the people living in the community at this time regarding debt issuance, and to also
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protect the people who will move into the community in the future. He stated there was a
standstill in the negotiations until he and another member agreed to allow further debt issuance
for the community, and there are good safeguards in place to protect the people; however, debt
issuance remains a concern for people living in the community and Metropolitan Districts in
general. Mr. Hare stated a major topic of conversation during the negotiations was the flowback
provision, for if there comes a point in the life of the community where operating and
management cannot be supported through tax revenue and there are significant reserves for
infrastructure, the funds will be utilized for operating and management costs. He reiterated the
Amenities Fund will be resident-controlled and most of it will probably be reserved for operation
and maintenance costs, since 200 to 250 homes will be necessary to support the roads and
amenities in the community, and there are only 54 now; therefore, it is not currently an
economically viable community without the oil and gas revenue, which accounts for 75 to
90 percent of the incoming funding at this time. He stated the flowback provision will only be
helpful in a slow growth scenario; however, due to the fact there will be approximately
250 homes necessary to sustain the community, the provision will not be helpful. Mr. Hare
stated he was also concerned about long-term road costs at the last hearing, and the last
financial plan, which failed, only accounted for approximately $500,000.00 in road costs for the
life of the project. He stated he did not understand how much of a problem it was until he
evaluated the Financial Plan from a profit and loss perspective, rather than a bond perspective,
since the Financial Plan was compiled by a bond firm and it was difficult for him to understand,
even as a CPA. He stated the previous Financial Plan allocated $500,000.00 for roads over
approximately 50 years for approximately 730 homes, and there has been approximately
$250,000.00 worth of maintenance, for the years 2010 and 2011, for the existing approximately
9 to 11 miles of existing linear roads in the community; therefore, $500,000.00 is only
approximately one (1) to two (2) percent of what the actual cost will be. Mr. Hare stated he is in
support of the proposed Amended and Restated Consolidated Service Plan, and he has
information he would like to share with the Board, concerning suggested changes for
Metropolitan Districts, in order to prevent catastrophes and financial shortfalls. He stated the
Financial Plans presented to the Planning Commission need to be profit and loss based, and it
needs to have a structure which average people with some level of financial comprehension can
understand, including the creation of a model or spreadsheet. He stated road costs need to be
analyzed and reviewed by someone in the Department of Public Works, who can complete the
projections regarding the cost per linear foot, since it was significantly understated in this
instance. Mr. Hare recommended requiring a single governing board, since in this instance the
community is tripling its administrative burden by having three (3) boards. He suggested the
Board consider implementing an automatic "time out" on debt authorization as part of the
Service Plan, as opposed to having to force issues through a quinquennial review process. He
stated he appreciates the Board taking the quinquennial review process; however, the process
has its own set of complications and legal risks; therefore, a better strategy may be a debt "time
out" process being included in the Model Service Plan, where the District must automatically
reapply. Mr. Hare stated the proposed Service Plan is not perfect; however, given the variety of
circumstances within the community and legal risks from various perspectives, he feels this is a
pragmatic structure which will work for the community. Commissioner Conway thanked
Mr. Hare for his involvement in this matter, and he stated he is pleased to see the community
come together and it will hopefully be able to move forward. He stated he is willing to meet with
Mr. Hare to discuss his suggestions about Metropolitan Districts, and maybe the Board can
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conduct a public work session on the matter, in order to allow other interested parties to
participate. In response to Commissioner Garcia, Mr. Hare stated one (1) of the changes to the
operating and maintenance budget is incorporating reserves for roads and implementing
specific triggers for the operating and management budget to be incrementally increased to
compensate for the increased needs, as additional roads and infrastructure need to be
supported in the community. He stated this is one (1) of the most significant changes to the
structure of the Financial Plan, since it will protect the community, the Financial Plan is viable for
reserving funds for significant repairs, and the District No. 2 Board provided an expert to
evaluate the Financial Plan. He stated he approached the Department of Public Works to
review the Financial Plan; however, it did not have the available time. Chair Kirkmeyer thanked
Mr. Hare for the time and effort he invested to resolve these issues, and she indicated she is not
generally in favor of Metropolitan Districts as a County Commissioner, and she was not in favor
of Metropolitan Districts when she served as the Executive Director for DOLA (Department of
Local Affairs), where she participated in an audit of the Metropolitan Districts several years ago.
She stated some of the changes Mr. Hare suggested may require statutory changes, as
opposed to what the Board can implement, and she concurred with Commissioner Conway's
suggestion about scheduling a work session to discuss the matter. Chair Kirkmeyer stated she
has participated in numerous arguments about how and when the quinquennial review should
occur. She stated she is glad there is not a boom in Metropolitan Districts occurring in the
County or the State in the last few years; however, development has declined due to the recent
economy, and there was an approximately seven (7) year period where an astronomical number
of Metropolitan Districts were being formed throughout the State of Colorado, which created a
great amount of debt for the citizens of Weld County and Colorado. Mr. Hare indicated he
testified on Senate Bill 87, in the year 2009, and it is difficult to balance being pro-development
while considering the long-term risks to citizens in those communities. He stated there is a new
excitement in his community and cooperation between citizens with differing opinions, as well as
more openness from the developers; therefore, it has been a win-win situation for the
community.
Linda Cox, resident of Beebe Draw Metropolitan District, indicated she was on the District 1
Board last year, and the scrutiny and extra effort has produced a better Service Plan. She
indicated the establishment of the Authority Board was necessary due to the contentiousness
and tension within the community.
Commissioner Rademacher suggested Mr. Warden be present at the work session with
Mr. Hare, either in person of via telephone, and he moved to approve the Amended and
Restated Consolidated Service Plan for the Beebe Draw Farms Metropolitan District Nos. 1
and 2, based on the recommendations of the Planning staff and the Planning Commission. The
motion was seconded by Commissioner Garcia, and he thanked everyone for their hard work on
this matter. He stated this is a demonstration of how an interested party in the community can
participate in the process, and it is a lovely community to live in. Commissioner Conway
concurred with Commissioners Rademacher and Garcia, and he stated this has been a long
process, and he is glad to see the community brought together, since the issues have been
divisive at times. Chair Kirkmeyer concurred with Commissioner Conway. There being no
further discussion, the motion carried unanimously, and the hearing was completed at
10:10 a.m.
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This Certification was approved on the 21st day of March, 2011.
APPROVED:
BOARD OF COUNTY COMMISSIONERS
W D COUNTY, CO ORADO
ATTEST: &Loa' '7 (clt—
:, arbara Kirkmeyer hair�J�
Weld County Clerk to the Bo If:),it .
s an P. Co y, Pro-Tem
BY: ,
Deputy Clerk to the Board
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David E. Long
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2011-0861
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