HomeMy WebLinkAbout20090407.tiffBEFORE THE BOARD OF COUNTY COMMISSIONERS OF WELD COUNTY
IN RE: APPEAL OF DECISION OF THE BOARD OF DIRECTORS OF BEEBE DRAW FARMS
METROPOLITAN DISTRICT NO. 1 REGARDING THE GRANTING OF A PETITION FOR EXCLUSION OF
CERTAIN PROPERTY
APPELLANT'S COMBINED REPLY TO RESPONSE BRIEFS OF BEEBE DRAW FARMS METRO DISTRICT
NO. land REI LIMITED LIABILITY CO.
Appellants, Jeff Hare, Mike Welch, Rod Gantenbein and Angie Powell, by their attorneys,
Bernard Lyons Gaddis & Kahn, P.C., submit the following Reply to Response Briefs of Respondents
Beebe Draw Farms Metropolitan District No. 1 ("District") and REI Limited Liability Co. ("REI").
I. ROLE OF BOCC AND THE STANDARD OF REVIEW.
REI argues that the BOCC should review the record and uphold the exclusion under the same
standard of review established by C.R.C.P. Rule 106 for a trial court's review of quasi-judicial
decisions of lower tribunals. District argues that the BOCC should not consider any legal arguments
that were not presented or preserved in the record.
Regarding the standard of review, REI cites Millis v. Board of County Commissioners, 626
P.2d 652 (Colo. 1981) to support its argument. That case, however, was simply a judicial review of
the decision of the Larimer County Board of Commissioners which had approved a modified service
plan. There was no district board decision because the district therein was yet to be formed! That
case involves only the issue of judicial review of a final decision of a lower tribunal. All of the other
cases cited by REI involve judicial review of a final decision by lower tribunals.
Here, however, there is no final decision to be reviewed by the court under Rule 106(a)(4)
until the Weld County Board of Commissioners makes its final decision under §32-1-501(5)(b)(II),
C.R.S. The plain language of that statute mandates an independent "determination whether to
exclude the properties" and not merely an appellate type review. An independent determination
requires substituting the BOCC's judgment for that of the District's Board.
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REI also cites to Greenwood Village v. South Suburban Metropolitan Recreation & Park
District, 509 P.2d 317 (Colo. 1973) as further support of its argument that the "arbitrary and
capricious" standard should apply in derogation of the unambiguous statutory phrase "determination
whether to exclude." That case did not involve an exclusion decision by the special district under
§32-1-501, C.R.S., but rather the separate and distinct exclusion proceedings initiated by a
municipality regarding the exclusion of annexed territory. Under that statute, the trial court, not the
district board, makes the determination. The Supreme Court reviewed the trial court's ruling, not the
ruling of a lower court reviewing under Rule 106 the decision of another governmental entity.
Clearly, this case and all of the cases cited by REI are inapplicable.
The comparison of the legislature's choice of words regarding review of inclusion orders and
review of exclusion orders is persuasive. For review of inclusion orders by special district boards, a
Rule 106 action must be brought "within thirty days after entry of the order of the board, to
determine whether the action of the board granting the decision was arbitrary, capricious, or
unreasonable." (§32-1-401(2)(d), C.R.S.)
However, in stark contrast, for review of exclusion orders §32-1-501(5)(b)(II), C.R.S.,
requires an intermediate appeal to the BOCC prior to seeking judicial review under Rule 106. The
statute explains that the BOCC shall consider the factors and "make a determination whether to
exclude the properties." Because the BOCC can make an independent determination whether to
exclude, it is not restrained to simply review the decision of the District under an arbitrary or
capricious standard, but can substitute its "determination" for that of the District's board.
Finally, the record does contain the objection by the Appellants with respect to the issue of
whether the exclusion is a material modification. With respect to -the other procedural issues, those
are based upon the statute's requirements which must be met regardless of whether any person
objects.
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II. PROCEDURAL ISSUES
A. Defective Petition Due To Lack of Signatures.
Appellants contend that the exclusion petition should not have been accepted because it did
not comply with the statutory requirement that the petition be signed "by the fee owner or owners" of
the property to be excluded. Respondents District and REI argue that the petition was valid,
notwithstanding the fact that the owners of 39 of the acres described in the Petition for Exclusion did
not sign the Petition, and cite to Adams v. City of Colorado Springs, 496 P.2d 1005 (Colo. 1972) for
the proposition that the petition may be over -inclusive. However, that case does not stand for the
proposition that a petition that is not in conformity with the statutory requirements may nevertheless
be legally acceptable. Rather, in that case, the published notice contained a legal description that
was over -inclusive and the court simply ruled that over -inclusive legal description in the notice met
the statutory requirement that the notice be published. Here, this petition did not meet the statutory
requirement that the petition be signed by 100% of the property owners and therefore the District's
Board can not simply waive or ignore this statutory requirement.
Respondents argue that the error was corredted by the District's Board subsequently
granting only part of the Petition and deleting the remainder. However, as stated in Johnson v. City
Council, 540 P.2d 1081, 1082 (Colo. 1975), such statutory requirements are more than mere
formalities, and the District's argument that "there was no good reason to restart the exclusion
proceedings" fails in light of this statutory requirement.
B. The Lack of Deposit.
District argues that the failure of REI to post a deposit is immaterial because the "Board did
not require such a deposit prior to the public hearings because REI agreed...to pay all actual costs
of the proceedings." REI joins that argument, but concedes that the statute does require a posting
of a deposit yet argues that the statute does not provide for disqualification as a penalty if a deposit
does not accompany the petition. Therefore, both parties argue that REI can legally substitute a
promise to pay for the statutory requirement of a deposit.
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To the contrary, the purpose of this statutory requirement is obvious —to make the
petitioners, not the taxpaying citizens, bear the costs of the exclusion proceedings. Here, the
Respondents appear to argue that the citizen -taxpayers, through the District, can bear these costs
until REI decides when and if it will pay the exclusion costs. The requirement for a petition to be
accompanied by a deposit is similar to the requirement in Rule 65 of the C.R.C.P which requires the
posting of a security deposit when an injunction is issued, and the failure to comply with the rule
nullifies the injunction. Short v. Finance, 502 P.2d 982 (Cob. App. 1982).
C. The Timeliness and Sufficiency of the Written Objection.
After arguing for a "substantial compliance" test for determining the issue of the lack of
signatures and the lack of deposit, REI and the District then argue strict compliance with regard to
the content, substance, and form of the written objection submitted by the Appellants. District
argues that the Appellant's written objections were not filed by 10:00 A.M. of the date of the hearing
and that the letter was not an objection as required by the statute.
First, the statute (§32-1-501(2), C.R.S., specifically states that the notice shall indicate the
designated time and place where the public may appear to show cause in writing why the petition
should not be granted. The designated time and place refers to the hearing, not a time and place
other than the hearing such as the 10:00 A.M. requirement in the newspaper notice.
Second, the statute does not require the objection to contain any level or degree of evidence
on any of the evidentiary factors upon which the District must make findings. Rather, the statute
simply requires that any written objection contain a reason "why the petition should not be granted."
Here, the written objection stated that the petition should not be granted because the citizens
wanted an opportunity to examine the financial impacts and stated that this massive exclusion "may
also constitute a material modification to the Service Plan which would need to be approved by the
County Commissioners." (Record; October 20 Board Meeting; page/tab 7). Hence, even under a
strict compliance rule, the written letter submitted at the hearing complied with all statutory
requirements.
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III. A MASSIVE EXCLUSION IS MORE THAN A MERE CHANGE IN THE BOUNDARIES.
Both Respondents argue that §32-1-207(2), C.R.S., exempts this massive exclusion from
being a material modification to the Service Plan because this exclusion is simply a boundary
adjustment which is permitted without need for service plan modification.
District erroneously interprets this statute on page 4 of its Response and argues that the
statutory definition of a material modification is limited to any of the...four circumstances" listed in
the statute. To the contrary, the statute unambiguously states that that the term includes "changes
of a basic or essential nature including but not limited to" the four examples (emphasis added).
Thus, contrary to District's erroneous assertion, a material modification is not limited to a decrease
in the level of services, a decrease in financial ability to discharge debt, an addition of services, or a
decrease in existing or projected need for organized services.
The determinative factor is whether the exclusion of all of the remaining undeveloped
property, constituting approximately 75% of District No. l's territory, is a material modification or a
simple change in the boundaries of District No. 1. Clearly, the exclusion of 75% of the territory in a
district constitutes a material modification when the Service Plan clearly provides for piecemeal
exclusion from District No. 2 and not from District No. 1.
Additionally, District argues that the new Amended IGA requires re -inclusion of the excluded
property at some future date and cites to Section 4.4 of the Amended IGA (Record; November 3
meeting; tab 11, page 12) yet that Section does not require re -inclusion of the property into District
No. 1. All that is required under Sec. 4.4 is that the Board of District No. 1 must accept and grant
any petition for inclusion. However, as explained in the opening brief, REI is not a party to the IGA
and there is no requirement before the County Commissioners in the record that REI will be legally
required to petition for inclusion. REI and its successors in interest are private parties and are not
subject to the IGA. Accordingly, removal of the property from District No. 1 constitutes a material
modification.
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District and REI argue that this exclusion is part of a new financing plan, yet admit several
times in their respective briefs that the purpose of removal of the property was in response to recall
petitions being filed by some citizens thus raising the fear that the constituents would gain control of
District No. 1. This is precisely why the exclusion constitutes a material modification —it is a change
of a basic or essential nature not contemplated by the original Service Plan.
As previously explained in the Appellants' Appeal and Opening Brief, this change rests upon a
shaky legal foundation because it is totally dependent upon an Amended IGA that binds the
legislative discretion of the Board of District No. 1. REI argues that a government can be bound by
contracts for essential services such as utilities, citing to City of Denver v. Hubbard, 17 Colo. App.
346, 68 P.993 (1902). However, that case clearly distinguished the ability of a municipality to bind
future boards in the exercise of their proprietary functions (e.g., paying light and utility bills) versus
the illegal delegation of governmental powers. The court explained:
.. A city has two classes of powers, the one legislative, public, governmental in the exercise
of which it is a sovereignty and governs its people; the other, proprietary, quasi private,
conferred upon it not for the purpose of governing its people, but for the private advantages
of the inhabitants of the city, and of the city itself as a legal personality. In the exercise of
the powers of the former class, it is governed by the rule here invoked, that the city council
can make no grant and conclude no contract which will bind the city beyond the terms of
their offices, because such action would circumscribe the legislative powers of their
successors and deprive them of the unrestricted exercise of their powers as the exigencies of
time might demand." 17 Colo. App. at 368.
Here, the new IGAs purport to bind the future boards of District 1 in the exercise of its governmental
functions' of making quasi-judicial determinations regarding future inclusions and its legislative
function of establishing appropriate mill levies. The fact that the entire scheme is legally contingent
upon the outcome of the November 2009 TABOR election in District No. 2 underscores the
conclusion that this massive exclusion is a material modification of the Service Plan and that it is
much more than a boundary adjustment.
Any exclusion that is dependent upon a legally questionable IGA that attempts to bind future
boards in the free exercise of their legislative discretion and is contingent upon a future TABOR
election to equalize taxes is a material modification of the Service Plan. Furthermore, these changes
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alter the basic nature of the relationships between the two districts and the relationships between
the property owners/citizens and the two districts. For these reasons, these actions by the District
are changes of a "basic or essential nature."
REI argues that if the Amended IGA is illegal in this respect, then the existing IGA may also be
legally suspect. This is certainly true, but the Appellants have, as yet, not challenged the existing
IGA's in a court of law under a declaratory judgment, and those other documents are not at issue
here. The issue here is whether the District can radically alter the symbiotic relationships
established by the Service Plan by substituting new Amended IGAs to camouflage this exclusion as a
mere "boundary adjustment."
IV. THE STATUTORY CRITERIA.
This Board may make an independent determination whether to exclude the property based
upon the record before it by applying the same criteria/factors set forth in §32-1-501(3),C.R.S.
Respondents argue that the BOCC must affirm the exclusion because no contrary evidence was
introduced by the Appellants at the hearing on each of the factors. However, the statute allows the
BOCC to take the records and make its own determination of whether the property should be
excluded using the same statutory criteria. That determination involves mixed questions of law and
fact or ultimate fact, as follows:
A. Whether the exclusion is in the best interests of the property. Here, the exclusion is not
in the best interests of the property to be excluded because the property can only issue
debt or incur financial obligations after such indebtedness is approved by the electorate
within District No. 2 and yet there is no legal assurance that the required TABOR election
in November, 2009 will be successful. Absent a Plan modification, there is no legal
requirement that the property will be re -included into District No. 1 in the future.
Exclusion does not facilitate the financing, construction, operation or maintenance of the
improvements.
B. Whether the exclusion is in the best interests of the excluding district. The exclusion is
not in the best interests of District No. 1 for the reasons stated in Section III -C, above,
which are incorporated herein. Exclusion does not facilitate the financing, construction,
operation or maintenance of the improvements.
C. Whether the exclusion is in the best interests of the county. The exclusion is not in the
best interests of Weld County. The exclusion violates the previously approved Service
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Plan, disrupts the long range planning for the area as to the orderly development, and
removes the certainty as to which district is performing which function and for what
constituency. Allowing the exclusion to occur without modification of the Plan weakens
the statutory role of the County in its vital oversight of special district formation and
execution of service plans. Exclusion does not facilitate the financing, construction,
operation or maintenance of the improvements.
D. The relative cost and benefit to the property to be excluded from the provision of the
special district's services. There is no financial benefit for the property to be excluded
because it will not benefit from the valuation of District No. 1 when the excluded property
is developed using various financing instruments included bonded indebtedness.
E. The ability of the excluding district to provide economical and sufficient service to both
the excluded property and all of the properties within the district's boundaries. This
factor is not applicable because District No. 1. does not provide the services.
F. Whether the district is able to provide services at a reasonable cost compare with the
cost that would be imposed by other entities to provide similar services. District No. 1
does not provide services.
G. The effect of denying the petition on employment and other economic conditions in the
special district and surrounding area. There would be no adverse effects if the petition
were denied.
H. The economic impact on the region and on the special district, surrounding area. and
state as a whole if the petition is denied. There would be no negative impacts if the
petition is denied.
I. Whether an economically feasible alternative service may be available. There is an
economically feasible alternative: leave the property within District No. 1 to fully
effectuate the purposes and intent of the existing Plan.
J. The additional cost to be levied on other property within the special district if the
exclusion is granted. As explained above, the properties in District No. 1 will now be
bearing the costs of improvements that will be installed in District No. 2—a different
district, whereas (and as contemplated by the Plan) before this exclusion, the
improvements would be constructed in both overlapping districts because the
undeveloped properties lay in both.
V. CONCLUSION.
For the reasons stated herein, and in all of the Appellants' pleadings filed with the BOCC, the
Appellants request that the BOCC enter its order denying the exclusion.
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BERNARD LYONS GADDIS & KAHN, PC
By _
ichard N. Lyons, II Attorney,Keg. No. 09591
515 Kimbark, PO Box 978
Longmont, CO 80502-0978
303-776-9900
Email: rlvons@biglaw.com
Attorneys for Appellants
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CERTIFICATE OF E -MAILING AND MAILING
This is to certify that on the rti 0 day of February, 2009 a true and correct copy of the foregoing
was emailed to the following and also deposited in the U.S. Mail, first-class postage prepaid,
addressed to:
Bruce Barker, Esq.
Weld County Attorney
P.O. Box 758
Greeley, CO 80632
bbarker@co.weld.co.us
Paul R. Cockrel, Esq.
Collins Cockrel & Cole, P.C.
390 Union Boulevard, Ste. 400
Denver, CO 80228-1556
ccockrel@cccfirm.com
MaryAnn McGeady, Esq.
McGeady Slsneros PC
450 E. 17th Ave., Suite 400
Denver, CO 80203-1214
mmcgeadv@mcgeadvsisneros.com
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