HomeMy WebLinkAbout20100183.tiff 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 January 20, 2010, at 9:00 a.m., with the following present:
Commissioner Douglas Rademacher, Chair
Commissioner Barbara Kirkmeyer, Pro-Tem
Commissioner Sean P. Conway
Commissioner William F. Garcia
Commissioner David E. Long — EXCUSED AFTER 2:30 P.M.
Also present:
Acting Clerk to the Board, Elizabeth Strong
County Attorney, Bruce Barker
Director of Budget and Management Analysis, Donald D. Warden
Planning Department representative, Kim Ogle
The following business was transacted:
I hereby certify that pursuant to a notice duly published December 17, 2009, in both the Windsor
Beacon and Greeley Tribune, a public hearing was conducted on January 20, 2010, to consider
the proposed Amended and Restated Consolidated Service Plan for Beebe Draw Farms
Metropolitan District Nos. 1 and 2. Bruce Barker, County Attorney, made this a matter of record.
Mr. Barker stated the Planning Commission considered the matter on January 5, 2010. He
stated Beebe Draw Farms Metropolitan District Nos. 1 and 2 are located on approximately
3,000 acres of land and are approximately six miles east of the Town of Platteville.
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 the original Service Plan for Beebe Draw Farms Metropolitan District No. 1 was approved
in the year 1986, and the Consolidated Service Plan was approved in the year 1999, in order to
reorganize. He stated the proposed Amended and Restated Consolidated Service Plan will
create a new authority to implement and amend the Service Plan. He stated Don Warden,
Director of Budget and Management Analysis, reviewed the Service Plan and indicated the
following in a memorandum dated December 14, 2009: "I have reviewed the Beebe Draw
Farms Metropolitan Districts 1 & 2 Amended and Restated Service Plans. The plans are being
amended to provide for changes in the structure and relationships between the districts. Key to
the change is the districts will enter into the Beebe Draw Farms Authority Establishment
Agreement (AEA). The AEA establishes processes for financing the operation and
maintenance of the existing public improvements as well as the financing, construction, and
operating and maintaining the additional public improvements, and the establishment of
operations and maintenance budgets and operating mill levies." Mr. Ogle stated Mr. Warden
also indicates the following in the memorandum: "The County's objective in approving the
amended service plans for the districts is to authorize the districts to provide revenues to the
Authority for the purposes authorized by the AEA. All debt issued by District No. 2 is expected
to be repaid by development fees and taxes imposed and collected for no longer than the
maximum debt mill levy imposition term and at a mill levy no higher than the District No. 2 mill
levy cap (50 mills with some stated adjustment provisions). Debt which is issued within these
parameters (as further described in the Financial Plan of the amendment) will insulate property
owners from excessive tax burdens to support the servicing of the debt and will result in a timely
and reasonable discharge of the debt. The plan also provides that in no case shall the mill levies
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imposed by the districts for debt service and operations and maintenance functions exceed their
respective mill levy caps. The amended plans appear to meet this objective. The Financial
Plan data, presented and prepared by D.A. Davidson and Company, appears to be reasonable
and demonstrates that the Financial Plan is feasible and is consistent with the county's objective
cited above. He stated Central Weld County Water District has a service agreement with Beebe
Draw Farms Metropolitan Districts No. 1 and 2 for water and sanitary improvements for the
sewage disposal system, and there is a law enforcement agreement between the Weld County
Sheriff's Office and the Beebe Draw Law Enforcement District Authority, which was approved
December 14, 2009, by the Board of County Commissioners. Mr. Ogle stated staff from the
Department of Public Works reviewed the Amended and Restated Consolidated Service Plan
and indicated the following in a memorandum dated December 18, 2009: "Public Works also
reviewed the documents related to the proposed merger to the two Metro Districts and
suggested changes and adjustments to more clearly define responsibilities and covered
activities, including clarification that construction and maintenance of all internal infrastructure
(existing and future) will be the responsibility of the combined Metro District or the provider
(water and sanitary sewer). He stated the memorandum also indicates the following: "The
Public Works Department recommends approval of the Amended Beebe Draw Service Plan and
consolidation of the Metro Districts." He stated the Plan, as proposed, does not intend to furnish
services or facilities outside of the boundaries, except as authorized by the Service Plan or by
the Intergovernmental Agreement, in compliance with Section 2-14-20.F of the Weld County
Code. Mr. Ogle stated referrals were not received from the LaSalle Fire Protection District or
the Weld County Sheriff's Office. He stated Rick Kron of Grimshaw and Harring, Attorney for
District No. 1, indicated he reviewed the Restructure Documents and, although all the changes
he requested were not incorporated, additional changes are not required prior to the County's
attorney of the Service Plan, the May, 2010, election, or prior to the execution of the documents.
In response to Commissioner Kirkmeyer, Mr. Ogle stated the Planning Commission allows
public testimony regarding items which are listed on the Consent Agenda. Mr. Barker clarified
the Planning Commission has the ability to remove an item from the Consent Agenda in order to
conduct a public hearing; however, the item was considered on the Consent Agenda because
there was no one present to speak in favor or opposition of the Service Plan. He stated
although there was nobody present at the Planning Commission hearing to speak on the matter,
written comments were submitted into the record.
MaryAnn McGeady, McGeady Sisneros, P.C., stated she worked with various consultants to
prepare the Amended and Restated Consolidated Service Plan including the law firm of Collins,
Cockrel, and Cole, general counsel for both Districts; Landmark Engineering; J.L. Walter
Consulting; R.S. Wells Corporation; Clifton Gunderson, LLP; D.A. Davidson and Company; and
Kutak Rock. Ms. McGeady stated there are approximately 104 developed lots in the
community, 67 lots have been purchased from the developer, and 54 of the lots have
constructed homes. She stated the community plans to construct a total of 800 single family
residences and to have a population of approximately 1,860. She reiterated the original Service
Plan was approved in the year 1986 and the Amended Consolidated Service Plan was
approved in the year 1999. Ms. McGeady clarified the Amended Consolidated Service Plan
facilitated the organization of Beebe Draw Farms Metropolitan District No. 2 and amended the
Service Plan for Beebe Draw Farms Metropolitan District, which became Beebe Draw Farms
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Metropolitan District No. 1. She stated the Consolidated Service Plan approved in the year
1999 authorized the Districts to provide water, street, park and recreation facilities, and other
public improvements and services. She stated the District No. 1 Board is comprised of resident
representatives, the District No. 2 Board is comprised of developer nominees, and the District
No. 2 Board currently makes all decisions regarding timing, financing, construction, operations,
and maintenance of all public improvements. Ms. McGeady stated the Districts created an
Executive Committee with two representatives from each District Board, in order to work with
the community to examine and explore potential new structures and to present the options to
the District Boards and the community. She stated numerous public meetings were conducted
from June, 2009, throughout December, 2009, including Executive Committee meetings,
community meetings, meetings with the County Attorney and County staff, and District Board
meetings. She stated there were community meetings conducted on September 8, 9, 10,
and 11, 2009, in order to ensure everyone in the community had an opportunity to attend and be
part of small group discussions regarding the details of the plan, and the meetings were offered
at both day and evening times, in order to accommodate all schedules. Ms. McGeady stated
the majority of the community residents were able to attend one of the community meetings and
surveys were provided to all of the attendees in order to gather community input.
Linda Cox, Executive Committee member and District No. 1 Board member, stated she and her
husband purchased their property in the year 2001 and moved into their dream home in the
year 2003. Ms. Cox stated she and her husband love the vastness, views, prairie, and wildlife
in the area. She stated she was eager to have amenities which would bring the community
together, particularly the children, and the Board of County Commissioners approved the
request to build the pool in the neighborhood, as opposed to at the lake, which was the original
location designated in the original Service Plan. She further stated 100 percent of the residents
were surveyed and favored the new location of the pool. Ms. Cox stated she has been involved
with planning most of the amenities and all of the amenities have been "pay as you go." She
stated working on the Amended and Restated Consolidated Service Plan has been a
tremendous experience and the most respected consultants in their fields have been engaged
in the process, in order to substantiate the assumptions in the Service Plan. She stated the
Boards have strived to create a transparent process and have provided opportunities for all the
community members to give their opinions regarding the Service Plan. Ms. Cox stated the
District No. 1 Board hired independent counsel to review the Service Plan, at the request of the
community, and the counsel made numerous suggestions and incorporated community
protections into the documents. She stated the Service Plan places significant responsibility for
the future of Beebe Draw Farms Metropolitan District Nos. 1 and 2 into the hands of the
community, which has been the desire of the residents, and it will be imperative for the advisory
committees, comprised of property owners, to assist the Authority Board. In response to
Commissioner Kirkmeyer, Ms. Cox stated when she and her husband first moved into the
community, there were not any resident representatives on the Board and the developer made
all of the decisions concerning which amenities will be provided for the community; however,
there will now be equal resident representation on the Authority Board. Further responding to
Commissioner Kirkmeyer, Ms. Cox stated if there is a disagreement between developer
nominees and the resident members, the budget will default to the previous year's budget.
Ms. McGeady stated the purpose of the proposed governance restructuring is to rebalance the
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decision making authority between the residents and the developer, and the AEA provided the
opportunity to create voting rights, which will be reflected in the agreement and implemented as
matters are considered by the Board. She stated if the Amended and Restated Consolidated
Service Plan is approved today, the process will be to present a series of election questions to
the community, which will include questions as to whether to approve the Service Plan and
whether to impose the proposed mill levies, which are necessary in order to implement the
proposed Service Plan. She stated if the community does not vote in favor of all of the items on
the May, 2010, election ballot, the Plan will not go into effect even though it has been approved
by the Board of County Commissioners. She stated in addition to the AEA, there are Capital
Pledge Agreements in the Amended and Restated Consolidated Service Plan, which need to be
approved through the election process and by the District Boards in order for the Plan to be
implemented and the Authority Board to be established. Ms. McGeady stated the Authority
Board will consist of four members and AEA defines how decisions will be made by the Board
and which votes are necessary in order to move forward with decisions. She further stated the
AEA defines the decision making structure for maintenance and operations, as well as the
construction of new amenities and infrastructure. She stated the Authority Board will own all of
the public improvements and the AEA will define the limitations for issuing debt and the timing
and phasing of the installation of public improvements. Ms. McGeady submitted a paper copy
of the PowerPoint presentation she prepared into the record, marked Exhibit L. She stated
each District will remit revenues to the Authority Board except for a small amount of money
which will be retained for budgets, audits, and minutes, in order to be able to maintain statutory
compliance. She stated District No. 1 will also retain the amount of money necessary to repay
its outstanding debt, since it has approximately $1,475,000.00 in outstanding bonds.
Ms. McGeady stated the funds paid to the Authority Board will be set aside into an account for
the operations and maintenance of all improvements, and when the operations and
maintenance budget is fully funded, the revenue will be split 85/15; 85 percent for construction
of future infrastructure and 15 percent for the construction of amenities, with a minimum amount
of $325,000.00 to be set aside for amenities in the year 2010, regardless of the accumulated
amount. She stated all of the operations and maintenance functions at the Authority Board level
will be administered by the two District No. 1 members, the District No. 1 members will establish
the operations and maintenance budget, and the District No. 2 members will participate in the
discussions; however, they will not vote regarding the execution and implementation of the
budget or on the related service agreements. She stated the entire Authority Board will
determine the type and timing of amenity construction and once approved by the Authority
Board, the District No. 1 members on the Board will supervise and administer the construction
of the amenities. Ms. McGeady stated the Authority Board will not be a substitute for the
County approval process, and the County land use and public hearing process will continue to
be followed in order to acquire consent to build the amenities; however, the Authority Board will
provide the opportunity for the developer and residents to work together to determine priority
improvements. She stated, once approved, the District No. 1 members will implement the
amenity plan, bid and award the construction contracts, and preside over the process. She
stated the construction of the infrastructure will be the responsibility of the District No. 2
members on the Authority Board; therefore, the District No. 2 members will determine the timing
of construction for roads and drainage improvements. Ms. McGeady stated any excess funds
which are not needed for infrastructure will be utilized to pay debts and if there is remaining
funding after the debts are paid, it will be placed into the amenity account. She stated the AEA
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has limitations regarding the phasing of infrastructure improvements; therefore, improvements
will not be built before the development demand requires those improvements, even if the
necessary funds have accumulated. She stated there are also financial limitations within the
AEA regarding the 104 developed lots, which will be limited to contributing to 40 mills for
operations and maintenance and debt service, and all lots developed in the future will be limited
to 50 mills. Ms. McGeady stated the 104 developed lots will only be obligated to contribute to
capital costs through the year 2018, and if the District No. 1 Board decides it wants to continue
to make a capital contribution it can do so; however, it will not be obligated to do so. She stated
the current outstanding bonds will complete the amortization and be completely repaid after the
year 2018. Ms. McGeady stated no home owner will be obligated to pay a debt service mill levy
for longer than 40 years; however, the operation and maintenance mill levy will continue into
perpetuity since it is the obligation of the community to operate and maintain its own
improvements, roadways, and park and recreation amenities; however, the waterlines are
dedicated to another District for operations and maintenance; therefore, the waterlines will not
remain an obligation. She stated there will be no additional debt issued by District No. 1 until
District No. 2 is dissolved or the Districts are consolidated, which will require an election
process, and the debt for District No. 2 will be limited to $36,000,000.00. She stated additional
limitations in the Plan include limits to the number of inclusions and exclusions which may occur
without County approval to ten (10); amendments to the AEA or Service Plan will require County
approval; there will be annual reporting requirements to the County; and third party bond
documents will be submitted to the County for review prior to debt issuance. Ms. McGeady
stated there is flow chart in Exhibit L which demonstrates how the funds will flow among the
Districts and the Authority Board. She stated the AEA specifies the members of the Authority
Board must be appointed or elected officials on the District Boards; however, the AEA does not
define the policy each Board will utilize to determine which of its members will serve on the
Authority Board. She stated the flow chart indicates the District No. 1 Board will contribute to
the Authority Board from the Operations and Maintenance Mill Levy and the Capital Mill Levy,
and it will be responsible for managing 100 percent of the taxes received for operations and
maintenance purposes from District Nos. 1 and 2; administering the operations and
maintenance of all amenities and infrastructure; may spend $20,000.00 from the discretionary
fund without Authority Board approval; and will administer construction of amenities that are
approved by the Authority Board. Ms. McGeady stated 15 percent of the taxes and
development fees may be utilized for the construction of amenities. She stated the District
No. 2 Board will contribute to the Authority Board from the Operations and Maintenance Mill
Levy and the Capital Mill Levy, and it will have the authority to enter into agreements for interim
financing and issue bonds from pledge of revenues. She stated District No. 2 will be
responsible for utilizing 85 percent of the taxes and development fees for the scoping, phasing,
and processing of the lot development. She stated the Operations and Maintenance Mill Levy is
required to be uniform throughout the community and it is determined by the District No. 1
Board members. She stated the mill levy is determined by determining the amount of funding
required for the Operations and Maintenance Budget, which is different than most Special
Districts' Service Plans where there is a minimal operations budget and the debt is the next
priority. She stated it is necessary for the payment of operations and maintenance to remain a
priority in this Service Plan forever because funding for this community is dependent on oil and
gas assessed valuation, which fluctuates from year to year. Ms. McGeady stated if there is a
year in which the Operations and Maintenance Budget reaches its cap, there will be no funding
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available that year for capital improvements. She stated the pledge of revenues to the Authority
Board is an integral part of making the AEA functional. In response to Commissioner
Kirkmeyer, Ms. McGeady stated the Service Plan does not allow consolidation without approval
from the Board of County Commissioners. Further responding to Commissioner Kirkmeyer,
Ms. McGeady clarified the Service Plan limits the number of inclusions or exclusions to ten (10)
without County approval, and the ten (10) inclusions or exclusions are allowed in order to avoid
stacking mill levies. She stated if a property is excluded from District No. 2, for example, and
included in District No. 1, a particular sequence must be followed to prevent 40 mills from being
added on top of 50 mills for the property; therefore, the inclusions and exclusions will be phased
in order to work with the development cycle. She stated one inclusion may be for a small
number of acres and another inclusion may be for a large number of acres. In response to
Commissioner Kirkmeyer, Ms. McGeady stated the limitation of ten (10) is applicable for the life
of the Service Plan.
Saranne Maxwell, Kutak Rock, stated Kutak Rock is a national law firm made up of
approximately 350 lawyers and there are approximately 20 public finance attorneys at the firm
located within the City of Denver. Ms. Maxwell stated Kutak Rock has been ranked as the #7
bond counsel in the nation and the #1 bond counsel in the State of Colorado for six (6) of the
last nine (9) years. She stated she has been a public finance attorney for over 20 years and
she has been employed by Kutak Rock since the year 1995. She stated Kutak Rock was
retained as Special Bond Counsel to the Districts and prepared the pledge agreements between
the Authority Board and District No. 1 and between the Authority Board and District No. 2.
Ms. Maxwell stated there will be several pledge agreements between the Authority Board and
District No. 2 and there will be another pledge agreement each time that an exclusion or
inclusion occurs. She stated Kutak Rock reviewed the financing provisions of the AEA;
however, it was not involved in negotiating any business terms; Kutak Rock simply implemented
the terms which were previously agreed upon. She stated the terms were implemented to give
legal enforceability to the AEA and the Pledge Agreements while recognizing the State
Constitutional and statutory provisions.
Ms. McGeady stated the Financial Plan Assumptions are listed in Exhibit L and the Financial
Plan was compiled by D.A. Davidson & Company with those assumptions. She stated the
assumptions are that there will be a total of 800 lots in the development at its completion, the
revenues will be split to dedicate 85 percent to infrastructure costs and 15 percent to amenities
costs beginning in the year 2011, the construction costs for the remaining 696 lots will be
approximately $26,000,000.00, in 2009 dollars, as projected by JL Walter Consulting, that the
Operations and Maintenance Assumptions provided by RS Wells are correct, that the Oil and
Gas Revenue Projections provided by Clifton Gunderson are correct, and that the projected
Absorption and Housing Prices provided by REI are correct. She stated other factors
considered in the Financial Plan include mill levy limitations and a two (2) percent annual
inflation rate for revenues and expenses except oil and gas valuations. She further stated the
Inclusion and Exclusion Agreement, which will be executed by the developer, is another factor
in the Financial Plan Assumptions because if the developer does not proceed with the process
in the Inclusion and Exclusion Agreement, the revenue will end at the end of the phase.
Ms. McGeady stated the District Boards strived for accountability and transparency in the
preparation of the Financial Plan. She stated the developer will be obligated to exceed the
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requirements of the County land use process concerning public hearings and publications for
future platting.
Ken Merritt, Landmark Engineering, stated he is a principal owner of Landmark Engineering and
a registered landscape architect and planner who has practiced for over 30 years in the State of
Colorado. Mr. Merritt stated Landmark Engineering was established in 1969 and it has serviced
northern Colorado for over 40 years specializing in land development planning, site design,
entitlements, landscape architecture, civil engineering, surveying, and geotechnical engineering.
He stated Landmark Engineering has been involved with the Beebe Draw Farms development
since the year 1986 and was most recently retained to provide a Concept Lotting Study, in order
to validate the assumptions in the Service Plan, to determine the feasibility and cost of Phase II
development, and to determine the number of lots which may be achieved within the Phase II
area. He stated the design criteria included the current Weld County regulations governing a
project of this type, the existing property zoning and the current entitlements within the Planned
Unit Development (PUD), and the physical opportunities and constraints of the property.
Mr. Merritt stated current Weld County regulations allow varied lot sizes within a PUD; however,
it is subject to septic system approval by the County, which is based on suitable soils,
percolation testing, and other geotechnical criteria. He stated the study incorporates the
County's open space requirements and the Roadway Development and Engineering standards,
and there will be a minimum of 350 feet between oil and gas wells and structures. He stated all
Phase II development will be subject to County staff review and the discretionary approval by
both the Planning Commission and the Board of County Commissioners. Mr. Merritt stated
approximately 4,200 acres was zoned PUD in the year 1984 and a maximum of 800 low density
residential units are entitled per the PUD Amendment approved in the year 1989. He stated the
allowed uses for the PUD include residential, recreational, and oil and gas production. He
further stated 186 lots were approved and platted for Phase I on approximately 1,160 acres,
which leaves approximately 2,350 acres on which 614 lots may be platted for Phase II.
Mr. Merritt stated the original PUD zoning required a minimum of 300 feet of separation
between oil and gas wells and structures; however, the current Weld County regulation requires
a 350-foot separation. He stated more than 150 oil and gas wells currently exist within the
Phase II site area and the Study strives to maximize the avoidance of existing oil and gas lines,
maintain clear access to existing well operations, minimize the relocation of oil and gas lines,
maintain an environmental buffer along the edge of the lake for approximately 100 to 200 feet,
maintain a 100-foot environmental building setback for all lots which are adjacent to the lake
and the Platte Valley Canal, develop a lotting concept that promotes recreational and equestrian
uses while maintaining the full use of oil and gas production rights, for the equestrian trail
system to connect all major open space areas throughout the Phase II area and to provide
connectivity to Phase I, and to continue the practice of clustering oil and gas facilities to be
within the defined and existing oil and gas operations areas. He stated all new oil and gas wells
must be placed within 50 feet of existing wells and this practice has been occurring since the
year 1999. Mr. Merritt stated the public improvements and amenities which currently exist
within the Districts include a marina and boat docks; more than 1,500 acres of open space and
nature preserves; miles of riding and walking trails; a community swimming pool and cabana; a
nature preserve and bird estuary with trails; a stocked fishing lake with docks; a playground and
community picnic area; a Community Center; outdoor riding arena; an entry monument and
landscape; a picnic area at Milton Reservoir; and street, water, and drainage improvements
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have been completed for 104 lots. He stated there are a large number of amenities within the
community and the proposed 85/15 percent split in the revenue allocation is a realistic funding
goal and represents a significant amenities budget since the Phase I development included
approximately $3,000,000.00 worth of amenities which have already been constructed, and
which is approximately 30 percent of the total construction costs to date. He stated the Urban
Land Institute has suggested in various residential development publications and case studies
that for a project of this type, and as a general guideline in establishing initial residential
development budgets, that a broad scope split of approximately 85/15 to 80/20 percent of public
improvements to amenities should be utilized when establishing Master Development
improvement budgets. He stated the split has been approximately 70/30 percent public
improvements to amenities up to this point, the allocation for the year 2010 proposes a 67/33
split, and the 85/15 split is proposed to begin in the year 2011; therefore, the overall allocation
between infrastructure and amenities is approximately 80/20 when you factor in the previous
and future allocations. Mr. Merritt stated the conclusions of Landmark Engineering, including a
maximum of 800 residential lots, are entitled per the PUD Amendment approved in the year
1989; the Concept Lotting Study verifies that a minimum of 614 lots can be achieved within the
2,300 acre Phase II area based on the Key Design Criteria previously referenced; the estimated
cost of $26,000,000.00 for 614 lots is a reasonable and appropriate development budget based
on the number of acres available in the Phase II area and the proposed number of lots within
the Phase II area, with an average development cost per lot of $42,345.00. He stated reducing
the number of lots does not necessarily reduce the remaining construction cost for completing
the project, and the cost is driven by the amount of land to be developed. He further stated that
if the developer chooses to construct fewer lots of a larger size, as opposed to constructing
more lots of a smaller size, it will not necessarily relate to lower construction cost. In response
to Commissioner Kirkmeyer, Mr. Merritt stated the clustering requirement that he mentioned is a
requirement under developer's criteria and it has been implemented since the year 1999.
Further responding to Commissioner Kirkmeyer, Mr. Merritt stated there are no clustering
requirements by the Oil and Gas Conservation Commission and there are no agreements in
place between the developer and oil and gas companies to ensure the clustering will continue to
occur; however, the oil and gas companies have respected the requirement. Commissioner
Kirkmeyer inquired as to how this Service Plan is going to be successful, since the previous
plans have not been. Mr. Merritt stated the role of Landmark Engineering has been to validate
some of the assumptions which are part of the proposed Service Plan; however, there will be
other speakers who will testify regarding the feasibility of the Service Plan.
Ms. McGeady stated it was necessary to make many assumptions in order to prepare the
Finance Plan, and the assumption regarding density was made based on what has been
approved in the past. She stated the remaining lots have not been platted yet and the Service
Plan states, "approval of the Service Plan by the County does not imply approval of the
development of a specific area within the Districts, nor does it imply approval of a number of
residential units or the total site floor area." She stated the Board of County Commissioners will
ultimately determine where the streets will be constructed and how many lots will be
constructed. In response to Commissioner Kirkmeyer, Ms. McGeady confirmed the previous
financial limitations were 40 mills for operations and maintenance and debt service, and
financial limitations for new development will be 50 mills.
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J.L. Walter, J.L. Walter Consulting, stated he graduated from Colorado State University and his
degree is in Construction Management. Mr. Walter stated he has worked on numerous land
development projects over the past 35 years, he has been involved with the Beebe Draw Farms
Project for approximately 25 years, and he has been the Construction Project Manager for this
Project for approximately 14 years. He stated he prepared cost estimates for the Service Plans
approved in the years 1986 and 1999, and he has prepared cost estimates for the current
proposed Amended Service Plan. He further stated he has administered all of the construction
activities for the Districts to date, and he has utilized actual costs from his files to estimate the
costs for developing the remaining 696 lots. Mr. Walter stated he considers the number of units
of materials which have previously been utilized (tons, square yards, et cetera), since those
amounts will remain relatively the same, and he considers the unit costs, which vary over time
due to increases or decreases in materials, labor, and equipment costs. He stated the utility
costs have consistently increased over time. He further stated the number of lots is not a
significant factor in the construction cost, the total acreage is more indicative of the cost.
Mr. Walter stated there will basically be the same number of roads and water lines regardless of
the number of lots in the area. He stated the Weld County Department of Public Works has
confirmed his cost estimates.
Denise Denslow, RS Wells Corporation, stated she was charged with developing the Operations
and Maintenance Plan for Beebe Draw Farms. Ms. Denslow stated RS Wells Corporation is a
subsidiary of Clifton Gunderson and RS Wells Corporation has been in the special district
industry in the State of Colorado for approximately 25 years. She stated RS Wells Corporation
was acquired by Clifton Gunderson in the year 1999 and Clifton Gunderson is a nationwide CPA
and consulting services firm. She further stated RS Wells Corporation services over 400 special
districts within the State of Colorado, most of which are within the Front Range. Ms. Denslow
stated RS Wells Corporation has a team of approximately 40 professionals dedicated to
servicing municipalities and special districts and it manages, develops, and implements
hundreds of budgets and forecasts each year. She stated that she works for the part of
RS Wells Corporation which provides management services to special districts and
municipalities. She stated she has a Bachelor of Science degree in Urban and Regional
Planning and a Master degree in Public Administration with a minor in Public Finance, she
worked as a City Manager in the States of Colorado and Michigan, she was the Director of
Community Development for the City of Littleton, and she has been the District Manager for
RS Wells Corporation for seven (7) years. Ms. Denslow stated she utilized a conservative
approach regarding the projection, and the numbers reflect historical management and
operations of districts in the State of Colorado, combined with actual current budget costs of
Beebe Draw Farms Metropolitan Districts. She stated the Management Team for RS Wells
Corporation established benchmark operations and replacement costs; however, the Operations
and Maintenance Plan does not take into consideration long-term changes in the market,
changes to building codes and planning regulations, or changes in the desires of the
community. She stated the Plan assumes a standard inflation rate of two (2) percent.
Mike Noyes, Clifton Gunderson, stated he has a Bachelor of Science degree in Civil
Engineering, a Master of Arts degree in Business, and a Law degree. Mr. Noyes stated he
worked as an Oil and Gas Facilities and Drilling Engineer for 14 years in the States of Texas,
Louisiana, and Arkansas, and he has been a consultant for 15 years building financial models
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for litigation purposes, in order to compute damages for oil and gas claims, construction claims,
and construction audits. He stated the Districts approached him to provide a projection of the
revenue which will be derived from oil and gas production. He first identified which oil and gas
wells are located within the Districts and how much the wells have historically produced, then he
applied a pricing schedule to the projected oil and gas production. Mr. Noyes stated he followed
steps to determine the current production environment, identify the wells located within the
Districts, obtain historical oil and gas production volumes and well counts, analyze the historical
production patterns and develop reasonable basis for projecting future volumes, apply price
forecast to generate future revenues, and project assessed values from oil and gas production.
He stated when researching the current production environment he discovered the Wattenberg
Field, where the Districts are located, is one of the largest gas fields in the United States and it
is a tight gas reservoir, which means the gas has a difficult time flowing through the rock and
steps have to be taken to facilitate the flow of the product to the well. He stated well density is a
key component since more wells are placed in the field in order to increase the production due
to the poor flow of the product to the wells. Mr. Noyes stated other techniques utilized to
increase the production include acidation, which cleans existing flow paths, and fracturing,
which creates additional flow paths. He stated these types of wells typically exhibit strong initial
production and then decline within approximately one (1) year to a modest rate of production,
and these wells can produce oil and gas for approximately 30 years. He stated the field has
experienced an increase in well density; there was initially one (1) well for every 320 acres and
there are now five (5) wells for every 160 acres. Mr. Noyes stated Rule 318A was introduced in
the year 2005 and allows infill and boundary wells, which reduces the spacing to eight (8) wells
for every 160 acres, and he believes Rule 318A requires the wells to be clustered. He stated
the field has begun to conduct horizontal drilling, which is a technique to expose more of the
producing bed to the well. He stated the primary oil and gas companies that own wells in the
field include Noble Energy, Anadarko, Petroleum Development Corporation, EnCana Oil and
Gas, and Petro-Canada. He stated it is beneficial to have multiple operators with wells in the
field because if one is no longer in operation, the others will continue to operate. Mr. Noyes
stated historically the gas pricing has been set by the Colorado Interstate Gas pipeline;
however, more pipelines have been recently constructed, which should improve the pricing. He
stated in order to identify the wells within the Districts he obtained a base map of each of the
Districts, he utilized the Colorado Oil and Gas Conservation Commission Information System on
the Internet to determine which wells were within the Districts, he then reviewed the individual
well location plats to ensure the well locations, and he cross-referenced the identified locations
with the Weld County Assessor's Office. He stated that he extracted the historical production
volumes from the Colorado Oil and Gas Conservation Commission Information System, he
aggregated the production by district and by year maps, and he determined since the year 2005
there have been approximately 165-190 wells within the Districts and there has been a
consistent decline of approximately 10.7 percent per year in oil production and 13.4 percent per
year for gas production. Mr. Noyes stated he applied those decline rates to production volumes
from the year 2008 in order to estimate production for the years 2009 through 2043. He stated
the estimate assumes the same technology which was utilized from the year 2005 to the year
2008 will remain in place for the foreseeable future and that there will be no boost in production
from further reductions in field spacing rules, which results in a conservative production
forecast. He stated oil and gas prices have historically been highly variable and he utilized
projected pricing from the United States Department of Energy and the Energy Information
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Administration in order to project the pricing. Mr. Noyes stated he adjusted the pricing forecast
downward based on citizen comments and based on the actual pricing through September,
2009, and the Energy Information forecast was more aggressive than the model he utilized to
determine his projections. He stated crude oil pricing remained fairly regular through the end of
the 1990s, it was approximately $20.00 per barrel, and then the pricing rapidly increased and
the market became volatile over the last few years. He stated gas pricing has followed a similar
trend. He stated the Crude Oil Price Forecast from the Energy Information Administration
predicts crude oil will hover in the price range of approximately $70.00 to $80.00 per barrel for
the year 2010, which is consistent with his model. Mr. Noyes stated the Energy Information
Administration has a similar outlook for the Natural Gas Price Forecast, which predicts gas will
be priced at approximately $5.58 per 1000 cubic feet (Mcf) for the year 2010; however, his
model predicts gas will be priced at approximately $3.18 per Mcf, in order to remain
conservative. He stated oil and gas production is the largest factor in determining the assessed
value of the Districts since it is responsible for over 90 percent of the total assessed value for
the Districts; however, it is not the only factor. He stated the projected assessed value is
conservative because the Wattenberg Field is considered to be a low-cost, low-risk field and the
projections do not assume any impact from new technology, horizontal drilling, or the potential
for shale gas in the field.
Ms. McGeady stated the goal of the Districts for the Financial Plan was to examine the long
term plan to sustain the community with a mill levy. She stated one variable which is impossible
to predict is the revenue from oil and gas production since the market is volatile and factors
which cannot be planned for, such as war or acts of terrorism, may occur and affect the pricing.
Tom Bishop, D.A. Davidson and Company, stated D.A. Davidson and Company is a Regional
Investment Banking Firm which serves the northwestern United States, it has $125,000,000.00
in capital and over 1,000 employees. Mr. Bishop stated he is a Senior Vice President in the
Public Finance Department and has over 30 years of experience in local government finance for
special districts and municipalities. He stated D.A. Davidson and Company has been a market
leader in special district underwriting since the year 1992 and it has obtained over 50 percent of
the market share of special district financing, with more than 300 district bond issues and
$3,000,000,000.00 in par since the year 2001. He stated D.A. Davidson and Company
prepared the Financial Plan to demonstrate feasibility and economic viability, and all of the
assumptions and conclusions from each of the experts have been incorporated into the
Financial Plan. Mr. Bishop stated the Financial Plan assumes the payment of existing District
No. 1 debt service and payment of operations and maintenance first followed by the remaining
revenue being utilized for infrastructure and amenities based on an 85/15 percent split. He
stated the Plan shows sufficient funds to cover projected operations and maintenance expenses
from District revenues and funds available to construct the majority of future infrastructure with
additional dollars available for the construction of new amenities and enhancements to current
amenities.
Ms. McGeady stated she graduated from law school and then began practicing in the special
district area in the year 1982. She stated she was initially exposed to special districts when she
clerked for Kutak Rock in its securities department in the year 1981. She further stated she
currently serves on the Municipal Bonds Supervision Advisory Board, which is a governor
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appointed seat, and she has served on it since its inception in the year 1992. Ms. McGeady
stated her firm represents more than 200 special districts in the State of Colorado and she has
been involved with organizations, consolidations, and dissolutions of special districts and she is
one of the few attorneys in the State who has been involved with quinquennial reviews. She
stated her background and experience give her a unique perspective in examining government
structures and alternatives to government structures. She stated she believes the proposed
Amended and Restated Consolidated Service Plan satisfactorily supports the findings to be
made by the Board of County Commissioners pursuant to Section 32-1-203 (2)(a) — (d) and
Section 32-1-203 (2.5) (a)-(e) of the Colorado Revised Statutes and Section 2-14-10 of the
Weld County Code. Ms. McGeady stated there has been an extraordinary amount of
community involvement and evaluation of the Plan by the Boards, community, and County staff.
She stated the efforts have come with extraordinary expense and both Districts have spent a lot
of time and money to create the Plan being proposed.
Jeff Hare, resident of Beebe Draw Farms Metropolitan District No. 1, stated he has worked on
this process for more than two years and the proposed Plan is a culmination of the community
efforts. Mr. Hare stated Mr. Kron reviewed the agreement for compliance; however, he did not
negotiate on behalf of District No. 1. He stated he had prepared to testify at the Planning
Commission hearing; however, he was asked to save his presentation for the meeting today
with the Board of County Commissioners; therefore, he simply submitted a letter with his points
of concern for the Planning Commission to consider and he requests that the Board of County
Commissioners forward some of his concerns regarding the Financial Plan on to the Planning
Commission for review. He stated the Service Plan, which was approved in the year 1999,
created the dual district structure and resulted in taxation without representation for the
residents since the residents did not have input until recently and are still not fully represented.
Mr. Hare stated the residents should have always had input and the right to be the majority on
the District No. 1 Board. He stated the Pelican Lake Ranch Community/Beebe Draw Farms,
was marketed as a high-end equestrian community and there were supposed to be riding trails,
an indoor riding arena, a clubhouse overlooking Milton Reservoir, an Olympic-sized pool, and
multiple tennis courts. He submitted a copy of the First Filing for Beebe Draw Farms and
Equestrian Center into the record, marked Exhibit P, and stated the First Filing was approved in
the year 1985 and revised in the year 1989. He stated the First Filing was the public record
which indicated to residents what the community would look like. Mr. Hare stated there were
originally 188 lots platted and people anticipated the amenities placed in Outlot A, which
included an indoor arena with the capacity to seat approximately 1,000 people, to be
constructed as indicated on the plat. He stated Pelican Lake Ranch was supposed to be the
premier equestrian community in the State of Colorado containing indoor and outdoor riding
arenas, stables, and a cross-country jumping course. He stated between the years 1999 and
2003 there were 57 lots sold; however, since 2003 there has only been approximately ten (10)
lots sold and three (3) of those lots were sold to existing residents as buffer lots. Mr. Hare
stated there are approximately 50 fully or partially developed lots available for sale in the
community. He stated approximately 12 of the lots have infrastructure; however, they do not
have streets constructed. He stated since the year 2003, the lot sales have averaged less than
one (1) per year, and since the year 1999, the lots sales have averaged 6 per year. Mr. Hare
stated the roads he has highlighted in the color pink on Exhibit P remain unpaved and include
the main road to access the amenities in Outlot A. He stated current standards for new
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developments require the infrastructure and paved roads to be planned prior to selling the first
lot. He stated he has attempted to identify what occurred in the year 2003 which slowed down
the number of sales occurring within Pelican Lake Ranch, since the housing market in Weld
County was strong in the years 2003 through 2006, and he has attributed the reduced number
of lot sales to the Second Filing hearings which occurred in August, 2003. He stated he did not
attend the Second Filing hearings; however, he has read the testimony and there were people
who felt strongly about the matter on both sides of the issue. He stated there had been no
growth to justify additional platting; therefore the Board of County Commissioners made the
correct decision to deny the request; however, he believes people ceased to believe in the
community vision at that point. Mr. Hare stated the residents want to understand what the
developer will do to stimulate growth in the community and the residents want their home values
to stabilize. He stated a substantial portion of the Financial Plan is predicated upon growth
within the community; therefore, more homes need to be built and the assessed home values
need to be increased in order to transition from assessed oil and gas value to assessed value of
homes in order for the Financial Plan to work. He stated oil and gas production and assessed
value may significantly decline. Mr. Hare stated there was not a plan presented for how the
developer intends for the community to grow from 57 homes to more than 800 homes and most
of the community believes there is not a plan for growth. He stated the Community Center
overlooking Milton Reservoir, the Olympic-sized swimming pool, the tennis courts, and indoor
equestrian facility have not been constructed, and the only amenity which has been constructed
is a small pool. He stated the oil and gas industry has changed dramatically since the year
2003 and a substantial number of new oil and gas wells have been placed in the community,
and there has been a 43 percent increase in wells within Filing 1 and a 34 percent increase in
the number of wells within Filing 2. He submitted 55 photographs of oil and gas wells and tanks
within the community, marked Exhibit N, and he submitted five (5) letters from people in the
community marked Exhibits R, S, T, U, and V. He stated the outdoor horse arena was planned
to be adjacent to the indoor horse arena, a committee of horse owners in the community has
worked with the developer to obtain some of the equestrian amenities, and an outdoor horse
arena has been constructed in the middle of Filing 2; however, the developer indicated the land
would be donated for the outdoor arena and later retracted the offer and the developer
proposed charging $50,000.00 per acre for the land for the indoor arena and the District must
now rent the land for the outdoor arena from the developer. Mr. Hare stated REI, LLC,
purchased the property in the early 1990s from a bank after the previous owner had filed
bankruptcy, and REI, LLC, and the current investment group presented the Phase II Filing
proposal which was rejected by the Board of County Commissioners in the year 2003. He
submitted a map of the Phase II Filing into the record, marked Exhibit O, and he stated the pink
paper indicates where the outdoor arena is located in the proposed future open space. He
stated the Phase II Filing was submitted before a 40 percent growth in the number of oil and gas
wells occurred and it was projected there would be a total of 594 lots; however, the Finance
Plan which has been presented is projecting 800 lots. Mr. Hare stated the testimony from the
consultant that the construction costs will remain the same regardless of the number of lots was
not included in any of the presentations given to the community and he believes the number of
lots must have some impact on the Finance Plan. He stated a change is necessary for the
community since there is currently a two-district structure which is driven by the developer and
there is an intergovernmental agreement which gives the majority of the authority and power to
the District No. 2 Board. He stated there was a recall approximately 1.5 years ago and in
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response to the recall an exclusion hearing was conducted, which changed the Districts from
being overlapping to being congruent and independent from one another. Mr. Hare stated the
court case has been postponed pending the determinations made by the Board of County
Commissioners. He stated in addition to the exclusion hearing, there was a massive change to
the Intergovernmental Agreement voted upon before three (3) Board members were recalled
from the District No. 1 Board. He stated the Service Plan and the Intergovernmental agreement
give most of the power and authority to the developer, for example, the District No. 1 Board
does not have any budget authority and the budget is solely controlled by District No. 2.
Mr. Hare stated he is supportive of a change and the Districts need a structure to carry the
community through to completion; however, whether completion is 500 or 700 more lots, if only
one to six lots continue to be sold each year, it will take between 100 and 200 years to sell all
the lots. He stated residents in the community have advised friends and family members not to
purchase a home there under the current circumstances and it is difficult to convince a realtor to
show a home in the community due to its situation. He stated he worked extensively with Dick
Lyons, attorney for District No. 1, throughout the process and he was involved with a lot of the
primary negation. Mr. Hare stated the residents have spent several thousand dollars of their
own money and he and Mr. Lyons have attended every meeting except one that Ms. McGeady
has requested; however, there was never a meeting at which there was a developer
representative. He stated Ms. McGeady represents District No. 2 and her services, and all of
the consultants, are being paid for by the Metropolitan District with the residents' taxes, while
the developer has not spent a dime. Mr. Hare stated the consultants' presentations are
compelling and if he had $250,000.00 at his disposable he could have compiled an impressive
presentation to counteract each of the consultants' claims. He stated 55 percent of the people
in the community signed the recall petition, which indicates the community is ready for a
change. He stated the structure concepts he initially proposed to Ms. McGeady is similar to
what is being proposed; however, he developed other concepts as he learned more about the
placement of the oil and gas wells and the revenue projections. Mr. Hare stated what he has
determined will be the best structure is to revert back to a single district governing board where
anyone can be elected and the members will serve equally on the board. He stated if the
Metropolitan District was being formed today, a model Service Plan would be presented and
there would be one district governing board, which is in the best interest of the community. He
stated he has another concept, named the "Divorce Theory", which resulted since the exclusion
process occurred, the developer does not want the residents to have control of its land, and the
residents do not want the developer to have control of their land. Mr. Hare stated the "Divorce
Theory" is to define an agreement for the sharing of certain amenities, while allowing each
District to operate separately. He stated what is being proposed today resembles a "Separation
Plan." He stated it was earlier stated if an agreement cannot be reached regarding amenities,
the budget will revert back to the previous budget; however, if there is no agreement on
amenities, nothing will happen and the amenity will not be constructed. He stated the reason
the recall was conducted, and that so many people are passionate about the proposed
Amended and Restated Consolidated Service Plan, is because the Districts have not been able
to successfully work together. Mr. Hare stated community input has been requested by the
District Boards before; however, most of the community feels the feedback has only been
requested from a small group of people and the community input has not been effective, for
example, when an amenity survey is conducted, the results of the survey have not been acted
upon. He stated Ms. McGeady misrepresented the build-up of infrastructure funds, for example,
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if there is not another lot built in the community, the 85 percent designated for infrastructure
funds will accumulate indefinitely, in which case, the funds will only be spent to the extent the
developer wants to give back to the community, since there are no flow-back provisions in the
Service Plan. He stated $50,000,000.00, for example, may be accumulated in the infrastructure
fund, since there is no cap in place, and nothing can be spent on amenities, debt service, or
maintenance and operations without the approval of the developer to reallocate the funds.
Mr. Hare stated the real estate market may remain difficult for some time, there are already 50
lots available for sale, and the developer may not be in business for much longer, since the
office located in the City of Denver has been closed and there seems to be only one person
remaining employed by the company. He stated there needs to be a trigger to establish when
money will be contributed to the infrastructure fund, since there is no reason to contribute to an
infrastructure fund if no lots are being sold, and this is the most significant flaw in the proposed
Service Plan. He stated REI, LLC, is more of a land speculator than a developer since it
purchases land, constructs infrastructure, and then sells the land to another company to
develop residential or commercial structures and Pelican Lake Ranch has been for sale for
more than four years. Mr. Hare stated he would like to know the developer's plans to complete
the community. He stated the only way to improve the dynamics of the community is to grant
more resident control and realtors will have more confidence that more emphasis will be placed
on things which will benefit the residents within the community. He stated the number of lots
which may be realistically built without changing the layout of the community is fewer than 406.
He stated infrastructure priorities need to include completing the construction of the roads within
the community. Mr. Hare stated Filing 1 is essentially District No. 1, and Filing 2 is essentially
District No. 2 since the exclusion process occurred, and approximately 75 percent of the oil and
gas revenue is generated by District No. 2 and approximately 25 percent is generated by District
No. 1. He stated 40 percent of District No. 1's 25 percent allocation must be given to the
developer for infrastructure costs. He stated he never had an opportunity to present his theories
on a single district structure and the "Divorce Theory," and even though he was involved with
the initial negotiations, he was only offered three to four minutes to make his points in the public
presentations and Mr. Lyons was not invited to participate in the community presentations. He
reiterated Ms. McGeady was hired by District No. 2 and she considered its best interests.
Mr. Hare stated if members of the community had the opportunity to hear alternatives to the
proposed Service Plan, they may have felt differently about the restructuring. He stated there
needs to be more emphasis placed on constructing the amenities than the infrastructure, since
the completed lots are not being sold and there is no need for additional infrastructure until
additional lots have been sold. He stated for the first ten years the residents of the community
have been taxed without representation and have been subject to metropolitan district laws
which were written by home builders and people who favor them. He further stated there needs
to be metropolitan district reform at the State level and he testified last year at a Senate
Committee hearing regarding Senate Bill 09-087. Mr. Hare stated the main issue which needs
to be determined in the restructuring process is whether the residents or the developer should
have control of the money and the residents have substantially more invested into the
community than REI, LLC. Commissioner Kirkmeyer inquired as to who directed Mr. Hare to
save the presentation he prepared for the Planning Commission until the Board of County
Commissioners hearing. She stated it does indicate in the Planning Commission minutes that
the Planning Commission made the request and she inquired as to whether the request was
made by Department of Planning Services staff. Mr. Hare stated he would rather not say who
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specifically requested that he save the presentation for today's hearing. Commissioner Garcia
inquired as to whether Mr. Hare is requesting the matter be remanded to the Planning
Commission. Mr. Hare stated he is unsure of the appropriate process; however, he believes the
Planning Commission should review the flaws in the Finance Plan. He stated he is unsure
whether the Board of County Commissioners is able to amend the Financial Plan or whether the
Planning Commission needs to approve the proposed changes. Commissioner Conway stated
Mr. Hare indicated he would like more money to be initially set aside for amenities than the
amount proposed in the Service Plan of $325,000.00, and he inquired as to what amount
Mr. Hare would deem to be appropriate. Mr. Hare stated there are many people in the
community who believe all of the amenities identified on the First Filing should be funded, which
may not be realistic. He stated the community has shifted from being equestrian-centric, due to
concerns about long-term maintenance costs and sustainability, and the community survey has
identified the Community Center with exercise facilities as the next amenity desired by the
community, which will cost at least $1,000,000.00. Commissioner Kirkmeyer stated the
presentation indicated there is an existing community center. Mr. Hare stated the existing
Community Center consists of two sales offices in a building about half the size of the
Commissioners Hearing Room, it is managed by District No. 2, and the developer refers to it as
a Community Center when it benefits REI, LLC, to do so. He stated District No. 2 recently
reduced the amount of rent paid by the developer for the sales offices and he inquired if the
office space is available to community residents for the same amount of rent and he was
informed by the District 2 Chairman it is a sales office and not available for rent. He further
stated the Community Center has no process for members of the community to reserve the
space for any reason. In response to Chair Garcia, Mr. Hare stated an appropriate trigger to
establish when money will be contributed to the infrastructure fund may be anywhere between
12 and 25 lots sold. He stated he does not want to stop or inhibit growth in the community;
however, he does not want funds to indefinitely accumulate in the account.
Doug Tabor, resident of Pelican Lake Ranch, stated he and his wife, Lauren Tabor, have been
residents since the year 2000 and enjoy living there. Mr. Tabor stated he often travels for work;
however, his wife attended numerous meetings which were constructive and positive. He
thanked Ms. Cox and Linda Black, Chairwoman for the District 1 Board, for the incalculable time
and effort they have invested into the process. He stated Mr. Hare does not represent his
position and he does not represent many other members of the committee. Mr. Tabor stated he
was a member of the Equestrian Committee that assisting in organizing the outdoor riding arena
and round pen, it is a beautiful riding arena, and he feels lucky to have those amenities in his
community. He stated his house was last appraised at $435,000.00, and it is inaccurate for
people to portray the community as rundown or indicate that people hate living in it. He stated
some changes are necessary and the Service Plan which has been presented is a viable plan
which has been heavily researched and there has been a tremendous amount of community
input; therefore, he recommends the Board approve the Service Plan and allow the community
to vote on the Service Plan at the election in the month of May.
Ms. Black stated she has been a resident of Pelican Lake Ranch since the year 2001 and she
appeared before the Board in the year 2003 concerning Filing 2. She stated she previously
submitted a letter, since she did not know if she would be able to miss a class she is teaching to
attend the hearing. She stated she was one of the people appointed to the District No. 1 Board
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after the District No. 2 members resigned in the year 2008, and she was appointed as the
Chairwoman for the District No. 1 Board in November, 2009. Ms. Black stated she also serves
on the Executive Committee and she has been intimately involved in the process, including
attending the Planning Commission hearing. She stated the District No. 1 Board has actively
educated and informed the community and sought feedback from the community at every stage
of the process through numerous community meetings and phone calls. She stated Mr. Hare
and the people he represents have been very involved in the process and Ms. McGeady has
sought input from Mr. Hare and his attorney. Ms. Black stated the process has been incredibly
iterative and recursive, and the Service Plan was submitted to the community for a vote, which
resulted in 44 residents voting in favor of the Service Plan and 22 voting against it. She stated
she was one of the two Board members who employed him, upon the recommendation of the
community who voted to obtain independent counsel, and Mr. Crone reviewed the Service Plan
for statutory compliance, as well as for the risks and benefits to the residents as taxpayers and
homeowners; therefore, Mr. Crone did not solely review the Service Plan for statutory
compliance, contrary to what Mr. Hare indicated. She stated Mr. Crone provided two separate
rounds of feedback to the District No. 1 Board prior to his final opinion, only herself and one
other member of the District No. 1 Board communicated with Mr. Crone, and she chided
Ms. McGeady for attempting to schedule a meeting with Mr. Crone, in order to maintain a clear
separation. Ms. Black stated the proposed Service Plan is a good plan; however, it is not
perfect and it does not meet all of the community members' desires since the community is
made up of a passionate group of individualists. She stated the Service Plan will provide
increased resident governance, it is transparent, and it will provide a stable funding source as
the transition from oil and gas revenue to a tax base occurs. She stated the Service Plan will
benefit the residents' heirs and the people who inhabit the community in the future more than it
will benefit the current residents. Ms. Black stated it has been a dynamic process and everyone
has not always agreed; however, the involved parties have been thorough, deliberate, recursive,
and accountable, and the Service Plan provides most of the community what it desires. She
stated in community meetings people have indicated they do not want any more amenities
because there is no money to fund new amenities. She stated the land is too fragile to support
a boat dock by the lake, and she is one of the residents who wants an indoor horse arena;
however, 15 residents indicated they never want one, 17 indicated it is a number one priority,
and 32 were somewhere in the middle on the amenity survey. Ms. Black stated there are also
differences in the community vision, and the people who sold her the lot promised items which
were not in the covenants or the Service Plan; however, she read the covenants and the
Service Plan; therefore, she was aware of which items were not possible. She stated she is a
golfer; however, she would not support a golf course in the community due to land instability
and the amount of water which would be necessary to sustain a golf course. She stated even
though there were many amenities promised to the residents, the community must be able to
construct, support, and maintain any potential amenities. Ms. Black stated there are many days
nobody utilizes the small pool. She stated there are 54 houses in the community and some are
uninhabited; therefore, the community has wonderful amenities, and although the community
would like to have more amenities, the amenities need to be responsibly created. She stated
there is no trigger for the infrastructure fund; however, there is also no trigger for the amenities
fund and if the community cannot agree on how to spend the money in the amenities funds, it
will remain unspent and accumulate. Ms. Black stated the reason Mr. Hare was not provided
more time at the community meetings is because Ms. McGeady's firm was being paid for its
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presentation and Mr. Hare could have scheduled his own community meetings at the
Community Center. She requested that the Board of County Commissioners approve the
Service Plan and give the residents the opportunity to vote on the matter. She stated the
financing is solid, there has been a great deal of time invested into the Service Plan, many
professionals have been employed, and most of the residents are in support of the Service
Plan. In response to Commissioner Kirkmeyer, Ms. Black stated if there is no agreement
among the Authority Board, the community will revert back to its current structure, and if there is
disagreement regarding amenities, no amenities will be constructed.
Chair Rademacher called a one hour recess.
Upon reconvening, David Clinger, land planner, stated he has planned approximately four to
five hundred subdivisions in 40 states, and his company focuses on plans which are sensitive to
environment. Mr. Clinger stated he was hired by REI, LLC, to analyze the property and
determine whether it could support an additional 614 lots. He stated he studied the topography,
existing and proposed wells, access roads, minimum lot sizes, and set back distances, and his
company concluded the property could support an additional 630 lots, while accommodating the
terrain and existing oil and gas wells and preserving the environment. He stated the Service
Plan envisions 47 percent of the property as common open space for pedestrian and equestrian
trails and parks. Mr. Clinger stated this is the worst economic situation he has witnessed in 38
years of practicing and in the 14 states where his company has projects in progress, most of the
projects have been suspended. He stated the economy endures cycles and there are very few
pieces of land which are near a large reservoir, as this property is, and people love being near
water and the views on the property are incredible; therefore, the community will recover, and
he has no doubt that the Service Plan will move forward. He stated he has worked with this
developer on previous projects and is confident the developer will withstand the test of time and
develop the ground, and it is unfair of Mr. Hare to refer to the developer as a speculator. He
stated a speculator purchases property when it is inexpensive and sells it when it can make a
profit, and REI, LLC, has worked hard with the district. He further stated a developer purchases
land, develops lots, creates covenants and conditions, and then sells the lots to builders, and
this is exactly what REI, LLC, is doing. Mr. Clinger stated it is an unfair characterization to call
the developer a speculator and the developer has been a first class client.
Mike Welch, resident of Pelican Lake Ranch, stated Mr. Hare represents his point of view and
he became concerned initially in the year 2006, when he was told by Miles Lane, the former
sales person in the Community Center, that there will be a golf course constructed and that
Mr. Welch's home will be situated at the first hole, since he is not in favor of a golf course being
constructed on the property. He stated he was informed by Mr. Lane that the golf course
construction had been made possible by an increase in natural gas production; however, there
was an outstanding bond in the amount of $1,600,000.00 at the time and he thought the
revenue should be utilized to pay it off. He stated it was at this time he discovered all the
money was controlled by the developer and he became interested in the structure of the
community. He stated the proposed 85/15 percent split of the budget is better than the existing
Plan; however, a 75/25 percent split would be preferable, since the taypayers should have
control of the money. He thanked the Board of County Commissioners for considering the
quinquennial review since it forced the developer to consider changes to the current Service
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Plan. He stated REI, LLC, planned to be sold out by the year 2009, in which case, the residents
would have been in control by now. He stated between the years 1999 and 2005, which was a
spectacular period for real estate sales, the developer managed to sell only 55 of the 800 lots;
therefore, he would like to know what the plan is to sell more lots. Mr. Welch stated
Ms. McGeady has conducted many meetings; however, the meetings never mentioned
85 percent of the budget was to be dedicated for infrastructure improvements which the
community has no input regarding and 15 percent for amenities which the developer can veto.
He stated there is a divergence of opinion within the community and most of the unhappiness
among the residents is due to the residents purchasing lots at the height of the market. He
stated there will be safeguards in place regarding the further issuance of bonds for much of
Phase I; however, future residents will be subject to the 50 mills levy and there is 29 million in
outstanding bonds which may issued. He stated the tax payers should be in control of the
money and not the corporation, and the developer threatened to sue if the bonds were revoked
during the quinquennial review.
Susan Francis, resident of Pelican Lake Ranch, stated Donna Harr, another Pelican Lake
Ranch resident, had to leave the hearing; however, she wrote a letter to be read into the record,
marked Exhibit Q. Ms. Francis read Ms. Harr's letter into record, stating promises of grand and
imminent amenities were originally marketed by realtor projection projects, based on the
perceived desires of perspective buys; however, few or none were a certainty. She stated that
Ms. Harr indicated in her letter that early in the year 2000, the initial resident interest occurred
regarding understanding the constantly changing timeline for when the amenities would become
a reality, and as a result of this interest, tremendous advancements began. She further stated
Ms. Harr's letter indicates the existing swimming pool was never intended to replace the larger
pool, which was planned to be the sole pool; it was intended to be a pocket pool and one of
several to be constructed throughout the development. Ms. Francis stated Ms. Harr's letter
indicates in the year 1986, the equestrian focused residents were projected to be a large
percentage of the overall residents; however, it is currently less than ten (10) percent of the
community and it has been determined through surveys and resident input the equestrian
features are not among the most desired amenities and the highly desired amenities include
sport courts and a grass field, which are presently under construction, and there is currently an
area developed for fishing, nature viewing, and picnic areas at Lake Christina. She stated
Ms. Harr's letter indicates there is slow growth due to all the homes in the community being
custom built and there are a few overly entitled residents who cause the community to be on the
front page of the Greeley Tribune newspaper and constantly send the message to realtors that
the community is in an unstable state of unrest. She further stated Ms. Harr's letter indicates
there are not any amenities which are supported by the majority of the residents which have not
become a reality in a timely manner as a result of the developer. Ms. Francis stated Ms. Harr's
letter indicates the community is extremely well set with amenities for any community with less
than 60 existing homes, the POA fees are extremely low compared to other communities, and
the developer should have a significant amount of input regarding how its money is spent,
particularly at this stage of the construction, while taking the residents' input into consideration.
Ms. Francis stated Ms. Harr's letter indicates Mr. Hare proposed the "Divorce Theory; however,
she proposes the "Parents versus Teenagers Theory."
Ms. Francis stated she has lived in large, beautiful, expensive, high-end communities located
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within the mountains, in which the homes cost approximately $1,000,000.00, which did not
contain paved roads or any amenities. She stated one the reasons she and her husband
decided to purchase a home in Pelican Lake Ranch was for the existing amenities and they
have loved living there. She stated it is a close-knit community, the developer has done a
tremendous job with the amenities it has provided, and she feels privileged to live in the
community.
Roy Wardell, resident of Pelican Lake Ranch, stated his ranch borders two and 1/2 miles on the
east side of Pelican Lake Ranch and one mile on the south, and he has been involved with the
hearings from the beginning. Mr. Wardell stated he has had problems with some of the things
the developer has done and he has voiced concerns about erosion control; however, he
purchased a home within Pelican Lake Ranch four years ago and he is pleased to be there. He
commended the people who developed the Service Plan. He stated he does not know the
details of the Finance Plan; however, he assisted Ms. Black in facilitating a meeting of the
residents to discuss the conflict within the community. He stated the community needs to move
forward with the Service Plan even though it is not perfect, and it is his perception that a
minority group has kept the conflict going and insisting on more changes to the Service Plan.
Mr. Wardell stated he wants the community to move forward and if he is wrong about the
majority of the residents being in favor of the Service Plan, it will be voted down in the Spring.
He commended Ms. Black and Ms. Cox for their efforts and stated it is a good plan and he
wants to move forward.
Ms. Cox indicated she wants to speak in defense of Ms. McGeady. She stated Ms. McGeady
facilitated negotiations, concessions by the developer, and moving the process forward in order
to meet the election date, and she has served the entire community; not only District No. 2.
Ms. Cox stated the goals regarding the community involvement process were openness,
transparency, and widespread attendance; however, the same people were attending all the
meetings; therefore, it was stipulated that each resident attend only one of the smaller
community meetings, in order to prevent one group of people from dominating the meetings.
She stated emails have been sent to the residents, items have been posted in the Board room,
and the Service Plan has been available to everyone. Ms. Cox stated amenities can be vetoed
not only by the developer; the residents may veto an amenity the developer wants.
Ms. McGeady stated the Service Plan is very complicated and the AEA and Finance Plan
contain many details which apply to the concerns being discussed; however, she will try to
cover the highlights. She stated the maximum mill levy for the 54 existing houses, in the
amount of 40 mills, derives less than $80,000.00 in revenue per year. She stated in the 2010
tax year 18 percent of the overall taxes from oil and gas values are within District No. 1 area
and 82 percent are within the District No. 2 area, and by the year 2030, two (2) percent of the
tax revenue will come from oil and gas in the District No. 1 area, partly based on the projected
decreased production. She stated another point is that the 104 lots, including the 54 lots with
existing homes, are not required to keep the mill levy at 40 mills to make any contribution to
capital improvements after the year 2018, and the newly developed area will carry the capital
construction costs. Ms. McGeady stated there are people who moved into the community with
assumptions regarding how much they would be taxed and what the taxes would pay for and
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although there are different perspectives, she thought the debate would be closed by eliminating
the obligation to continue to pay the 40 mills in the year 2018, which is when the existing debt
will be fully amortized. She reiterated one of the important elements of the Finance Plan is that
there will be developer fees split 85/15, in addition to mill levy deriving revenue. She stated the
argument was presented that millions of dollars could accumulate with no development
occurring; however, no development fees will be paid without development occurring, since the
fees are paid at the time the building permit is issued, and if no additional houses are
constructed, $14,000,000.00 in development fees will be removed from the 85 percent of the
budget dedicated for infrastructure costs and there will be no taxes derived from the homes
which were not constructed; therefore, the only money which may accumulate is from the oil
and gas production, which is projected to diminish over time. She stated it is important to
achieve full build-out for the project because the current maintenance cost exceeds the capacity
of the current number of homes to pay it without the revenue generated by oil and gas.
Ms. McGeady stated the goal is to allow funds to accumulate from the overall current assessed
valuation before the oil and gas revenue diminishes to the point that the funds necessary to
complete the infrastructure are no longer available. She stated the Service Plan does include a
provision regarding the phasing and timing of infrastructure construction, which indicates that
the two District No. 2 representatives on the Authority Board have the discretion to phase in and
complete the infrastructure in the Filing 1 area, without limitation, and when the next plat is
approved for the development, the District No. 2 representatives on the Authority Board can
authorize the development of 50 more lots without limitation; however, after that point, there will
be an limitation of 40 lots allowed as inventory. She stated there is a possibility that money will
accumulate; however, if a plat is approved for the remaining area which generates less than the
projected infrastructure costs, the remaining funds will be utilized to pay outstanding debt and
any remaining funding will then go towards amenities. Ms. McGeady stated historically the
development of this community has been an iterative and phased process, and the plan cannot
anticipate everything; however, the AEA provides flexibility for certain circumstances. She
stated the AEA includes a provision which indicates that if a seat is not filled, the vote is
eliminated from the Authority Board's quorum and voting requirements; therefore, if there is a
situation where the developer has been foreclosed on, the residents will gain full control of the
Authority Board and its functions. She stated the oil and gas industry is paying most of the
taxes in the district and it was a policy decision made many years ago when the original District
was organized. Ms. McGeady stated the Service Plan fairly allocates the ability to expend the
revenue in order to complete the development and in order to provide a reasonable balance
between amenities and infrastructure for the installation and sustainability. She stated there are
two situations in the AEA where voting can occur and the Authority Board may not agree; one
situation is regarding amenities and the other is increasing the Operations and Maintenance
Budget. She stated if the Operations and Maintenance Budget is not agreed upon, there is a
formula in the AEA for a base operating budget which will be defaulted to; however, if there are
increases due to new amenities, for example, if the Authority Board agrees to expand the
existing Community Center facility by adding a recreation area, the base budget can be
amended to include the maintenance and repair costs for the facility. She stated there was a
great deal of discussion with the community, the Authority Board, and the developer regarding
the amenities package and it took a lot of negotiation for the developer to agree to allow the
residents the veto over amenities, since the developer passionately believes there are more
amenities which must be constructed in order to increase lot sales in the community and the
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residents could always veto proposed amenities. Ms. McGeady stated the developer and the
residents take the same risk, since amenity development will not commence without the
resident and developer representatives being in agreement. She stated this is an integrated
Master Plan Community; therefore, any theories regarding divorcing the community were
evaluated and discarded because it would create an odd package of available amenities, and
residents would have to pay surcharges or admission fees for amenities outside of their
respective District, and it does not make sense for a Master Plan Community to function in that
manner. In response to Commissioner Conway, Ms. McGeady stated Page 28 of the AEA
contains specific limitations regarding when new infrastructure may be developed and it states,
"All Infrastructure needed to complete Filing No. 1 will be constructed on a phased basis as
provided below and as authorized in the Service Plan and set forth in Filing No. 1. The two
District No. 2 Members may authorize the construction of all Infrastructure necessary to serve
the remaining lots within Filing No. 1." Ms. McGeady stated the majority of the feedback from
the community regarding this topic indicated the residents want the developer to sell houses as
fast as possible, that the best way to enable the developer to do so is to sell the lots in Filing
No. 1 first, and to construct additional roads if necessary in order to sell the remaining lots in
Filing No. 1. She stated limitations for the completion of roads in Filing No. 1 was discussed;
however, it was determined to be necessary to allow flexibility in order to sell the remaining lots
in Filing No. 1. She further stated Page 29 of the AEA states, "The two District No. 2 Members
may authorize the construction of all Infrastructure necessary to serve fifty (50) lots on the
property within the Development outside of Filing No. 1." Ms. McGeady stated the reason the
number 50 was selected is because the developer believes there will be marketing momentum
which builds as Filing No. 1 is built out and there is a cost savings for infrastructure installation
when roads and waterlines are installed for 50 lots, as opposed to ten (10) to 20 lots. She
stated after Filing No. 1 is complete, no more lots may be constructed until the lot inventory falls
below 50. She further stated historically the Districts have constructed only what was needed,
and the residents have not partnered with the developer to commence construction prior to it
being necessary; therefore, it was difficult to negotiate an agreement which is this specific, and
the number may be slightly higher than necessary in order to avoid the need to amend the
Service Plan if marketing momentum increases. In response to Commissioner Kirkmeyer,
Ms. McGeady confirmed if the Service Plan is approved today, the request will be made for
82 lots to be excluded from District No.1 and included in District No. 2, and the infrastructure
Filing No. 1 will be completed first. Further responding to Commissioner Kirkmeyer,
Ms. McGeady clarified in Filing No. 1 there are 188 lots; 104 lots have been developed,
including infrastructure; 67 lots have been sold; and 54 homes have been constructed.
Ms. McGeady stated it may be years before the plat is approved for Filing No. 2 and roads
cannot be constructed without the plat being approved. In response to Commissioner
Kirkmeyer, Ms. McGeady stated she is unsure what the number of proposed lots was for Filing
No. 2 which was denied in the year 2003. Commissioner Kirkmeyer stated it seems possible
that a great deal of money could accumulate in the infrastructure fund because infrastructure
costs cannot be authorized for 50 lots outside of Filing No. 1 until the remaining area is platted.
In response to Commissioner Kirkmeyer, Ms. McGeady stated the infrastructure will not be
constructed prior to being platted, the money for the infrastructure will accumulate over years,
and it will take years to obtain approval of the plat for Filing No. 2. Ms. McGeady stated Page
30 of the AEA addresses the amounts on deposit in the infrastructure account by stating, "The
Districts acknowledge that zoning has been approved for 186 lots within Filing No. 1 and that
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the Developer is assuming that it will obtain approval for an additional 614 lots on property
outside of Filing No. 1 within the Development. Funds shall accumulate in the Infrastructure
Account in an amount sufficient to cover the Actual Capital Costs to complete the Construction
of Infrastructure necessary to serve all lots within the Development (as set forth on the final
plats approved by the County). Funds shall continue to accumulate and remain in the
Infrastructure Account so long as the Actual Capital Costs for completion of the construction of
the Infrastructure necessary to serve all lots within the Development exceed the amounts on
deposit in the Infrastructure Account. At such time as the Actual Capital Costs for completion of
the construction of the Infrastructure necessary to serve all lots within the Development is less
than the amounts on deposit in the Infrastructure Account, the following shall occur: Any excess
funds shall be used to retire any outstanding debt or obligations of District No. 2. If District
No. 2 does not have any outstanding debt or other obligations, then any excess funds shall be
deposited into the Amenity Account. In the event it is determined by a vote of all Authority
Members that no additional funds are needed in the Amenity Account, the excess funds shall
remain in the Infrastructure Account and District No. 2 shall reduce its mill levy accordingly in
the following year. Notwithstanding the above, upon approval of the District No. 1 and
Infrastructure Account and deposited into the Amenity Account." Ms. McGeady stated after the
plat is approved and the number of lots has been defined, the Actual Capital Costs can be
reevaluated, and if it the costs are lower than the anticipated target accumulation amount, the
amount will be lowed, and if the Actual Capital Costs are higher than the anticipated amount,
the amount will be raised. She stated the AEA assumes the developer has a right to construct
800 units; however, the proposed number of lots must be approved by the County prior to
commencing construction. In response to Commissioner Conway, Ms. McGeady stated one of
the arguments for dividing the budget to dedicate 75 percent to infrastructure costs and
25 percent to amenities was that the money belongs to the residents; however, it is not the
residents money, and the existing homes only generate $80,000,000.00 in tax revenue per year,
which is not sufficient income to operate and maintain existing infrastructure and amenities in
the community. Ms. McGeady stated the existing funds are being generated by oil and gas
values, and since oil and gas revenue will diminish, the balance needs to be shifted over time in
order to sustain the development without the oil and gas revenue, which is one of the factors
considered when determining the 85/15 percent split of the budget. She stated in order to shift
the balance over time, ratios were utilized for the construction of infrastructure and amenities
which will make the community marketable and sustainable after build-out, and it must be
determined what amount of development will raise enough revenue to sustain the existing
amenities without oil and gas. She further stated various planners were also consulted in order
to determine what is acceptable for amenities for a rural, high-end community for both
marketability and sustainability. Ms. McGeady stated historically there has been a 70/30 split,
which makes sense since there are often times when more money is invested into amenities in
the beginning of development than is invested into infrastructure, and there is approximately
$400,000.00 more being invested into the sports court in the year 2010, in addition to the
$325,000.00 allocated as a minimum amount to be invested into amenity improvements. She
stated there are many compromises in the Plan; however, too many amenities may affect the
sustainability of the community. She stated the capital improvement contribution from the
existing community will end in the year 2018, and most of the capital improvement contribution
is being utilized to pay off the outstanding bonds; therefore, there will not be a significant capital
improvement contribution paid by the resident taxpayers from this point forward. Commissioner
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Kirkmeyer stated the matter of concern seems to be who controls how the capital improvement
contributions will be spent, as opposed to what percentage is spent on capital improvements.
She stated the Service Plan indicates 100 percent of the taxes for Operations and Maintenance
will be utilized for Operations and Maintenance functions and District No. 1 members will have
authority over it and the Authority Board will control 15 percent of the taxes and fees for capital
improvements; however, District No. 2 has control over 85 percent of the taxes and fees for
capital improvements; therefore, some of the District No 1. residents have indicated the
Authority Board should have control over a higher percentage, perhaps 25 percent, of the taxes
and fees for capital improvements, to provide more control to District No. 1 in deciding which
capital improvements are funded first. Ms. McGeady stated 85 percent of the budget has been
dedicated to infrastructure and 15 percent has been dedicated to amenities in the Financial
Plan; therefore, if the District No. 1 residents have control over a larger part of the budget, the
District No. 1 residents will make decisions regarding roads, waterlines, and other infrastructure
phasing. Commissioner Kirkmeyer stated it will rebalance the decision making. Ms. McGeady
stated District No. 1 residents have been given a veto power concerning the 15 percent of the
budget dedicated to the amenities fund; however, the 85 percent is dedicated for infrastructure
improvements; therefore, if the residents are given the ability to consent to how 25 percent of
the budget is spent, resident control will be introduced concerning infrastructure development.
In response to Commissioner Kirkmeyer, Ms. McGeady clarified15 percent of the budget is
dedicated to amenities capital improvements and 85 percent of the budget is dedicated to
infrastructure capital improvements, which include roads, waterlines, community signage, and
items which relate to the lot development. Ms. McGeady stated there must be collaboration and
consensus between the District No. 1 and District No. 2 Authority Board members in order to
construct new amenities; however, residents have indicated they want the developer to be in
control of development and they are concerned about tying the developer's hands. She stated
there is a County land use process in place; therefore, there will be a public input process, and
the developer cannot construct structures without following the necessary processes.
Commissioner Kirkmeyer stated the assessed value appears to be split approximately 75/25 in
the Service Plan and the portion regarding proposed land use and assessed valuation indicates
the assessed valuation for District No. 1 is $11,739,000.00 and the assessed valuation for
District 2 is $35,488,000.00, for a total assessed value of$47,228,000.00. Ms. McGeady stated
the numbers change over time and it may provide a skewed perspective to make determinations
based on current valuations since the numbers may be significantly different in future years.
Mr. Bishop stated there is approximately 25 percent of the oil and gas value in District No. 1 and
approximately 75 percent in District No. 2 for the years 2008 and 2009; however, presently it
has decreased to approximately 18 percent of the oil and gas value being within District No. 1
and increased to approximately 82 percent in District No. 2. Commissioner Kirkmeyer stated
she does not understand how the value decreased for District No. 1 based on the assessed oil
and gas valuation, which increased by 68 percent. Mr. Bishop stated the oil and gas value
switched from one district to the other, due to some changes and clarifications, including
eliminating duplicate wells and correcting miscalculations. He stated the certified assessed
value for the year 2010 has an 18/82 ratio and the certified results have only been available
since December 15, 2009. He further stated the most important thing to understand is that it is
a false assumption that the residents should be entitled to 18 to 25 percent of the oil and gas
benefits of the infrastructure costs because they are paying for the infrastructure because the
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District No. 1 residents are not paying for either the amenities or the infrastructure costs.
Mr. Bishop stated the Finance Plan structure prioritizes paying off the District No. 1 debt, which
will end in the year 2018, and after the year 2018, District No. 1 will pay its share of the
Operating and Maintenance costs; however, District No. 1 will not pay any other costs toward
the infrastructure or amenities from its revenues after the year 2018. He stated even prior to the
year 2018, District No. 1 will pay a minimal amount, if anything, towards amenities or
infrastructure when you consider most of the difference between the operating costs mill levy of
District No. 1 and the 40 mill cap is primarily to repay debt plus 15 to 20 mills for operation. He
stated Mr. Hare should be thankful the residents are receiving all of the funding and benefits of
the 15 percent of the budget dedicated to amenities because it is the future growth which will
support the costs, not the taxes generated from the current homes in the community.
Commissioner Kirkmeyer inquired as to how many lots were proposed for the original Planned
Unit Development (PUD). Mr. Merritt stated the 1989 amendment approved a maximum of 801
low density residential lots, there are 186 lots currently platted for Filing 1, there are 104 lots
which are currently eligible for building permits, and there have been 56 homes constructed on
those lots. In response to Commissioner Kirkmeyer, Mr. Merritt confirmed there were 406 lots
proposed for Filing 2 in the year 2003; however, it was not allowed. Mr. Merritt stated for the
Concept Lotting Study he considered 614 smaller lots on a range of lot sizes ranging from 1.5
acres to 2.5 acres in size, as opposed to 406 lots on approximately 2.5 acre lots. He stated the
Phase 1 Plan has a density of .27 units per acre, which is one unit per four acres, and the
Concept Lotting Study reflects the same density even though it contains more lots. He stated
the reason the density is the same is due to more open space being included in the Concept
Lofting Study; there is more than 50 percent of open space in the Concept Lotting Study.
Commissioner Kirkmeyer stated Landmark Engineering's conclusion is that it will cost
$26,000,000.00 for 614 lots, which seems reasonable and appropriate; however, the financial
assumptions state that it will cost $26,000,000.00 for 696 lots. Ms. McGeady stated the reason
the financial assumptions indicate 694 lots is because it is intended that all the Filing No. 1 lots
will be completed within the $26,000,000.00 budget.
In response to Commissioner Kirkmeyer, Mr. Walter stated the costs for the basic structures,
such as roads and waterlines, are not necessarily based on the number of lots; the costs are
based on the amount of acreage. Mr. Walter stated the difference in costs between various
plans, and the difference in the costs comes down to the services; however, the difference is
relatively minimal. Ms. McGeady stated there may be a typographical error in the PowerPoint
presentation, Exhibit L; however, the numbers are correct in the Financial Plan. Mr. Walter
stated 696 lots is the correct number of lots for his cost estimate, in the amount of
$26,000,000.00, and it includes the 614 lots in Phase 2 and 82 lots which remain to be
constructed in Phase 1. He stated on one of the presentation slides there is a reference to the
cost for 614 lots being $26,000,000.00, and this is a typographical error; it should state 696 lots,
and the Financial Plan is correct. (Clerk's Note: Exhibit W was submitted after the hearing in
order to clarify the discussion regarding the number of lots.)
Commissioner Kirkmeyer inquired as to whether an additional 10 mills will be sufficient to
achieve the desired amenities. She stated the Board has a responsibility to ensure the
residents are not excessively taxed and that the development is completed as it was originally
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presented, and it was initially believed 40 mills would be sufficient. She further stated approval
of the Service Plan will not negate the need for an application to amend the PUD to be
submitted in order for the developer to vary from the approved PUD plans. Ms. McGeady
concurred with Commissioner Kirkmeyer that the Service Plan will not change the PUD which
was approved by the County, and the County has iteratively approved changes to the 1989
Plan, which is how the pool and the Community Center were constructed where the facilities
currently exist. She stated numerous experts were consulted in order to lay a foundation to
create a marketable community; however, the impact that strife within the community can have
on the marketability of a community cannot be underestimated, and there has been a great deal
of stress in this community for many years. She stated the restructuring will address many of
the residents' concerns regarding accountability and transparency, for example, residents
expressed new construction has commenced without being discussed in a board meeting;
therefore, the AEA requires that every decision must be discussed in at least two (2) meetings.
Ms. McGeady stated there are also requirements for the developer to exceed the County's
notification requirements. She stated the only problem which can be solved by this process is
the special district issues; however, there are other issues within the community that residents
and advocates will continue to work to resolve, and all of the issues must be resolved in order to
effectively market the community. She stated if the timeline is not met for this Service Plan to
be considered in the May election, this process will have to begin anew. Ms. McGeady stated
she is concerned about fatigue in the community because it is difficult to keep residents focused
on these types of issues; therefore, it is critical to the marketing and success of the community.
In response to Commissioner Kirkmeyer, Ms. McGeady stated 67 lots have been sold and 54
houses have been constructed over the last ten (10) years. Commissioner Kirkmeyer stated
she has an issue with a metropolitan district making changes to a plat which was approved by a
previous Board in the year 1986, which is not allowed; therefore, the Districts need to follow
through with what was originally approved through the PUD in the year 1986. In response to
Ms. McGeady, Commissioner Kirkmeyer stated she is unsure if the Service Plan coordinates
with the proposed Service Plan. (Clerk's Note: Commissioner Long is no longer in attendance
at the hearing; it is 2:30 p.m.) Ms. McGeady stated she is concerned Commissioner Kirkmeyer
thinks the numbers in the Financial Plan do not add up correctly due to the typographical error
which was discovered and she indicated she would like to go through the Financial Plan in detail
if the typographical error will effect Commissioner Kirkmeyer's decision regarding approving the
proposed Service Plan. Ms. McGeady inquired whether Commissioner Kirkmeyer was referring
to the Improvement Agreement from the year 1989, which was a part of the County land use
approval process, as opposed to the Special District Plan, since the Special District Plan
provided a financing mechanism and overview; however, it did not identify the improvements.
Commissioner Kirkmeyer clarified she was inquiring if the Special District Plan did identify the
improvements. Ms. McGeady stated the Consolidated Service Plan from the year 1999 did not
specify details regarding amenities and discussions have occurred, which included Mr. Barker,
in order to determine what the amenities package includes according to the 1999 Consolidated
Service Plan. She stated one of the reasons the community surveys regarding amenities were
conducted was in an effort to understand what amenities were intended to be included in the
1989 Special District Plan and to understand what the community desires; however, the surveys
were disparate regarding what people wanted in terms of amenities and regarding what may be
interpreted to be the intent of the 1989 agreement. She further stated there is a history between
the County regarding how the improvements have been phased, specified and defined,
2010-0183
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HEARING CERTIFICATION -AMENDED AND RESTATED CONSOLIDATED SERVICE PLAN
FOR BEEBE DRAW FARMS METROPOLITAN DISTRICT NOS. 1 AND 2
PAGE 27
prioritized, and constructed. Ms. McGeady stated from one perspective, the 1989 Improvement
Agreement may appear to match the existing community, and from another perspective, there
may be a disconnection; however, it is not the purpose of the Service Plan to determine whether
there is coordination with the 1989 Improvement Agreement; it is a matter to be addressed
through the land use processes. She stated the County currently has a new form of subdivision
improvement agreement and she has been working with Mr. Barker to amend the 1989
Improvement Agreement, in order to convert it into the current format for improvement
agreements, and the 1989 Improvement Agreement bears little relevance to how the community
has phased its development and infrastructure installation in partnership with the County. She
stated Commissioner Kirkmeyer has made a valid point regarding the 1989 Service Plan
needing to be updated; however, it is not part of the Service Plan process. In response to
Ms. McGeady, Commissioner Kirkmeyer stated she has reviewed the Finance Plan and is
satisfied it does not contain errors.
In response to Chair Rademacher, Mr. Barker confirmed if there is a split decision regarding the
Service Plan, Commission Long will review the portion of the hearing he was not able to attend
and make a determination in order to provide the tie-breaking vote.
Commissioner Kirkmeyer stated it seems that approving the Service Plan will change the
Conditions of Approval for the PUD from the year 1986 and it may create an expectation that
Service Plans can be used to change PUD requirements. Mr. Ogle stated the Change of Zone
was initially approved in the year 1984 and the approval was for 100 units of R-3 and 600 units
of R-1, with recreational and oil and gas uses, and there was a stipulation that there be a
300-foot setback for oil and gas production and well sites from dwelling units, indoor and
outdoor arenas, stadiums, and the clubhouse. He stated the Change of Zone was amended in
April, 1989, to include only R-1, recreation, and oil and gas uses, and at that time there were
800 units of R-1 approved, with an average lot size of 2.5 acres. He further stated the First
Filing of the final plat was approved July 24, 1985, for 214 lots; it was subsequently amended to
include 188 lots averaging 2.5 acres in size, and the Second Filing was denied. In response to
Commissioner Kirkmeyer, Mr. Ogle confirmed 614 lots could be approved in Phase 2, as long
as the lots average 2.5 acres; however, he does not know the changes regarding amenities
without reviewing the Changes of Zone.
Commissioner Garcia thanked everyone who attended the hearing for their work. He stated the
process regarding the Service Plan has been an effort to satisfy the majority of the community
and be practicable, and this Service Plan seems to be serviceable. He stated the presentation
by Ms. McGeady and the consultants was well done, particularly Mr. Noyes evaluation of oil and
gas projections, he appreciates the three concerns Mr. Hare presented, and the one which
concerned him the most is the lack of a trigger, and he appreciated hearing from Ms. McGeady
that there is a trigger in place. Commissioner Garcia stated the basis for an agreement has
been presented which the people can vote on and he is willing to allow the Service Plan to
move forward.
Chair Rademacher thanked everyone for attending and he indicated he appreciates all of the
feedback he heard. He stated there seems to have been significantly more community
involvement than usual with this process, everyone cannot be pleased all of the time, and
2010-0183
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HEARING CERTIFICATION -AMENDED AND RESTATED CONSOLIDATED SERVICE PLAN
FOR BEEBE DRAW FARMS METROPOLITAN DISTRICT NOS. 1 AND 2
PAGE 28
although the Service Plan is not perfect, he feels comfortable moving forward and that the
Service Plan is solvent. He stated he would have felt more comfortable if some of the concerns
expressed today were addressed by the Planning Commission prior to this hearing, in order to
allow more time to address the concerns.
Commissioner Kirkmeyer inquired as to what happened at the Planning Commission hearing.
Mr. Barker explained the Planning Commission has the ability to place items on the consent
agenda, and the previous hearing took longer than anticipated; therefore, the matter was placed
back on the Consent Agenda, with the understanding that written comments could be submitted
to the Planning Commission by the people who wanted to provide public testimony. Mr. Barker
stated the Planning Commission had the option to not place the item of business on the
Consent Agenda and to hear the public testimony at the hearing it if wanted to do so. He stated
he did not advise the Planning Commission to conduct the hearing in order to address the
issues surrounding it because he was more concerned about ensuring all of the scheduled
matters were addressed that day, including ongoing land use issues. He stated these types of
matters should not be placed on the Consent Agenda in the future.
In response to Commissioner Kirkmeyer, Mr. Barker confirmed that if the Service Plan is
approved today, the residents will then vote on the Service Plan, and if it fails in the election, the
community will revert back to the existing Service Plan. In response to Commissioner
Kirkmeyer, Ms. McGeady stated her understanding regarding the litigation stipulation and the
deferral of time for responding to the quinquennial review is that all of the deadlines need to be
met, which include the approval of the Service Plan, the successful election, and the inclusion
and exclusion. She stated if all of the conditions for deferring the quinquennial review and
litigation are not met by the first week of June, 2010, there will be no new Service Plan and the
existing Service Plan will remain in place and a Quinquennial Review Plan will be created for
the Board of County Commissioners to review. Commissioner Kirkmeyer stated she will vote to
approve the Service Plan since the election will occur and the residents will be able to
determine whether they want the Service Plan. She further stated she does not believe these
types of matters should be placed on the Planning Commission's Consent Agenda, and if there
had been public testimony allowed at the Planning Commission hearing, some of the concerns
expressed could have been resolved prior to today's hearing. Commissioner Kirkmeyer stated
reverting back to the 1999 Service Plan is not a good answer; therefore, she will approve the
proposed Service Plan, in order to allow the residents to vote on it and since the alternative is
not a better option. She stated she is concerned the mill levy is being increased to 50, since
this District has been taxed since the year 1986, and the residents have been paying their share
for amenities which are not in place.
Commissioner Conway stated he will vote in favor of the Service Plan since the residents will
have the opportunity to review and vote on it. He stated this has been a time consuming
process and he thanked Mr. Hare, Ms. Cox, and the others who have worked hard to create the
Service Plan. He stated he is concerned about the tight timeframe and he does not want more
money to have to be spent by both Districts.
Commissioner Kirkmeyer stated there were suggestions made regarding changing the proposed
Service Plan; however, the Board does not have the ability to change the proposed Service
2010-0183
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HEARING CERTIFICATION - CONSOLIDATED SERVICE PLAN FOR PROPOSED
WATERFRONT AT FOSTER LAKE METROPOLITAN DISTRICT NOS. 1, 2, AND 3
PAGE 29
Plan.
Commissioner Garcia moved to approve the Proposed 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 Conway, and it carried unanimously. There being no further
discussion, the hearing was completed at 2:55 p.m.
This Certification was approved on the 25th day of January, 2010.
APPROVED:
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
ATTEST: • :'� - j r°"� � i6 ,./�-1y�
. r{ Doygl9s Radem her, Chair
Weld County Clerk to th o
s61f ,
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:arbara Kirkmeyer, ro-Tem BY: el Deputy Clerk to the Bo YV(S /
Sean 7.7.
William F. Garcia
EXCUSED
David E. Long
2010-0183
SD0001
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EXHIBIT INVENTORY CONTROL SHEET
Case - BEEBE DRAW FARMS AMENDED AND RESTATED CONSTOLIDATED
SERVICE PLAN
Exhibit Submitted BY Description
A. Planning Staff Inventory of Items Submitted
B. Planning Commission Resolution of Recommendation
C. Planning Commission Summary of Hearing (Minutes dated January 5, 2010)
D. Margaret Cooper E-mail of Support, dated 01/14/2010
E. John Cox E-mail of Support, dated 1/18/2010
F. Kathryn Masselink E-mail of Support, dated 1/18/2010
G. Gary Moore E-mail of Support, dated 1/19/2010
H. Jayne Waltz E-mail of Support, dated 1/19/2010
E-mail detailing proposed changes, and four Draft
redline/strikeout documents 0-District No. 1 Capital
Pledge Agreement; ii-Initial District No. 2 Capital Pledge
Agreement; id-District No. 2 Capital Pledge Agreement
(First Exclusion); and iv-District No. 2 Capital Pledge
I. McGeady Sisneros, P.C. Agreement (_ Exclusion)
J. Donna Harr E-mail of Support, dated 1/19/10
K. Linda Black E-mail of Support, dated 1/19/10
L. McGeady Sisneros, P.C. PowerPoint Presentation
Howard and Susan
M. Francis Letter of Support, dated 1/19/10
N. Jeff Hare 55 Photographs
O. Jeff Hare Map of Second Filing
P. Jeff Hare Map of First Filing
Q. Donna Harr Letter of Support
R. Debra Street Letter of Opposition
S. Rubi Hendricks Letter of Opposition, dated 1/19/10
Larry and Rosalind
T. Bader Letter of Opposition, dated 1/19/10
U. Joel and Debra Moreland Letter of Opposition, dated 1/20/10
V. John and Angie Powell Letter of Opposition, dated 1/20/10
W. Don Warden E-mail of Clarification, dated 1/22/10
X. Anonymous Pelican Lake Ranch Newsletter
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