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Home My WebLink About20071866.tiff ce ‘ir, TO: Clerk to the Board of County Commissioners for Weld tip al County Wi`l C FROM: Cyndy Giauque DATE: June 27, 2007 COLORADO RE: East I-25 Sanitation District; Order on Rule 106 appeal filed by the Town of Mead The attached Order was issued by the Court Monday, June 25, 2007. The Rule 106 appeal filed by the Town of Mead was dismissed by the Court. Please file in the East I-25 Sanitation District file. 7- ?- a©o 9 2007-1866 • District Court,Weld County,State of Colorado Court Address: 901 9s'Avenue, P.O.Box 2039,Greeley,CO 80632 EFII.ED Document-District Court 2005CVS13 Phone Number:(970)351-7300 Fax:(970)356.4356 CC Weld County District Court 19th JD Plaintiffed ng Date:Jun 2 ur TOWN OF MEAD u re,u).1534:611 v. BOARD OF COUNTY COMMISSIONERS OF WELD Case Numbers:05 CV 513 COUNTY,et al., Defendants and 05 CV 1488 Consolidated with: 05 CV 1488, Division 10 In Re THE ORGANIZATION OF THE EAST I-25 SANITATION DISTRICT ORDER These cases concern the Town of Mead's("Mead")Rule 106 challenge to the Board of County Commissioner's("Board")resolution approving a service plan for the creation of the East I-25 Sanitation District("District");and,Mead's objection to the petition to organize the District pursuant to the provisions of C.R.S. §32-1-206. Mead claims that the Board acted arbitrarily,capriciously and unreasonably in determining that: a)There is sufficient existing and projected need for organized service within the boundaries of the proposed special District. b)The proposed District has, or will have,the financial ability to discharge the proposed indebtedness on a reasonable basis. I. Introduction. The proposed District lies immediately east of Mead and partially within Mead's 208 sewer service boundary, as designated by the North Front Range Water Quality Planning Association(hereafter, "the Water Quality Planning Association"), under the auspices of§208 of the Federal Clean Water Act. It also overlaps the St.Vrain Sanitation District.The District proponents consist of twelve individuals seeking to develop approximately 3,000 acres of agricultural land with residential densities of six single- family equivalents per acre. However,the land not currently zoned for urban scale development. Mead opposes the formation of the District,because it believes that the proponents of the District should seek annexation by Mead,which would then provide sewer services to residents within the District. Mead's MEAD v WELD Co,.doe Page 1 of 10 Comprehensive Plan anticipates future urban development,but its Land Use Code does not allow for residential density of the type sought by the District. The District proponents oppose annexation by Mead because of the impact fees Mead imposes on annexed property owners to finance future improvements and services for the annexed properties. Initially,the District's proponents requested that Mead provide them with sewer services,but withdrew the request when Mead imposed annexation as a condition of extending such services. The District proponents submitted their Service Plan to the Board in November of 2004, proposing to initially serve approximately 3,000 acres. The District proposed to to install wastewater collection lines for transportation wastewater toe the Saint Vrain Sanitation District("St.Vrain")for treatment in St.Vrain's wastewater treatment plant. In December of 2004,the Weld County Planning Commission recommended that the Board approve the formation of the District,but suggested as a condition that the District be dissolve if the Water Quality Planning Association refused to transfer the overlapping portion of Mead's 208 service area to the proposed district. The Board approved the plan at a February 14, 2005 hearing. Following Mead's challenge to the February resolution,the Board conducted a second hearing on August 3,2005,and approved a modified service plan that included the 208 boundary-change condition. It is the Board's actions at these two hearing that are before this court for review. Statement Of Facts This action results from the proposed formation of a special district to provide wastewater collection to an area east of1.-25 which area is generally bounded,with some exception,by Highway 66 on the south,Weld County Road 17 on the east,and Weld County Road 38 on the north.The proposed Service Plan for the East 1-25 Special District("the Special District")was presented as a project that would initially encompass approximately 3300 acres,more or less,in the first phase.Two additional phases were contemplated in the proposal,but such phases would be completed at a later date,as growth and demand indicated.At such time as all three phases are completed,the Sanitation District would provide service to approximately 13,000 acres.The real property in question is located in unincorporated Weld County,and also mostly within the 208 boundaries designated to the Town of Mead by the North Front Range Water Quality Planning Association("NFRWQPA")as the management agency for purposes of the federal Clean Water Act("the 208 Boundary").The district was proposed to finance the construction of a sewer collection system(and possibly a lift station or force main if additional phases are constructed)that would flow into the St.Vrain Sanitation District's wastewater treatment plant. The county planning services followed the statutory procedure in preparing the case for hearing;first the hearing at the Planning Commission to obtain a recommendation,followed by a hearing at the Board of MEAD v WELD CO..doc Page 2 of 10 r The Board of County Commissioners heard the proposal for the Service Plan for the formation of the East 1-25 Sanitation District on February 14,2005.Proper notice of the hearing was given,pursuant to statutory requirements.The Town of Mead appeared and was represented by the Town Mayor,counsel for the Town,and an engineer for the Town. Several hundred pages of information were also provided by Mead to the Board, including information concerning and supporting many of the arguments Mead has now presented to this court. County Commissioners.Comments were received from several interested parties or entities,and the appropriate statutory notices were given for the hearings.The Planning Commission held a hearing on the proposed Service Plan for the Special District on December 21,2004,after which the Planning Commission recommended approval with a condition that the proposed Special District obtain a change in the 208 boundary within a year of the decision of the Board. County Commissioners.Comments were received from several interested parties or entities,and the appropriate statutory notices were given for the hearings.The Planning Commission held a hearing on the proposed Service Plan for the Special District on December 21,2004,after which the Planning Commission recommended approval with a condition that the proposed Special District obtain a change in the 208 boundary within a year of the decision of the Board. The proponents of the Special District presented evidence concerning each of the four criteria required by section 32-1-204, upon which the Board of County Commissioners must base their decision concerning the Service Plan.The Town of Mead and its agents presented objections to the evidence, many of which objections have been repeated in the Opening Brief for the Town of Mead.After consideration of all of the evidence,the Board of County Commissioners unanimously approved the Service Plan for the proposed Special District,and included in the Resolution of the Board a condition that the Special District must obtain designation as the 208 Boundary agency within one year of the Court's order organizing the district. The approval by the Board contained a condition,and a question arose whether,pursuant to statute,the approval of the Board constituted a"final approvaL"At a meeting on August 3, 2006,the said condition that the proposed Special District must obtain approval for a change of the 208 Boundary was incorporated into the Service Plan of the Special District, and the Board then amended its resolution approving the Service Plan so that the resolution no longer contained a condition in the Board's approval. Upon the Board's approval of the Service Plan for the proposed Special District,the proponents of the Special District,on August 14,2005,filed a petition with this Court for the organization of a special district in Case No.05CY 1488.This Court subsequently consolidated the cases of the petition for organization of the Special District and the Town of Mead's Rule 106 appeal of the Board's approval from the February 14,2006 hearing. MEAD v WELD Co..doc Page 3 of 10 S. II. Applicable Legal Standards for Review. C.RC.P.Rule 106. Under this rule,the court must consider: "[W]hether,on the basis of the whole record,the findings of the agency are supported by any competent evidence. [citations omitted]. No competent evidence means the record is devoid of evidentiary support for the decision [citations omitted].The reviewing court may not reweigh the evidence presented to the hearing officer." See Puckett v. City and County of Denver, 12 P.3d 313 (Colo.App.2000)cert denied Nov. 6,2000. The Board's action will be considered arbitrary and capricious if the court finds that the Board: 1) neglected or refused to use reasonable diligence and care to procure evidence that it is authorized to consider in exercising its discretion; 2) failed to give candid and honest consideration to the evidence before it;or, 3)exercised its discretion in such a manner as to indicate clearly that its actions is based upon conclusions that reasonable persons could not reach in fairly and honestly considering the evidence before the Board. Van DeVegt v. Bd. or County Comm'rs of Lorimer County,90 Colo. 161, 166(1936). C.R.S.§32-1-203(2). "The board of county commissioners shall disapprove the service plan unless evidence satisfactory to the board of each of the following is presented: (a) There is sufficient existing and projected need for organized service in the area to be serviced special district (b) The existing service in the area to be served by the proposed special district is inadequate for present and projected needs; (c) The proposed special district is capable of providing economical and sufficient service to the area within its proposed boundaries; (d) The area to be included in the proposed district has,or will have,the financial ability to discharge the proposed indebtedness on a reasonable basis. C.R.S.§32-1-203(2.5). "The board of county commissioners may disapprove the service plan if evidence satisfactory to the board of any of the following,at the discretion of the board,is not presented: MEAD v WELD CO..doc Page 4 of 10 • (a) Adequate service is not, or will not be, available to the area through the county or other existing municipal or quasi-municipal corporations, including existing special districts, within a reasonable time and on a comparable basis. (b) The facility and service standards of the proposed special district are compatible with the facility and service standards of each county within which the proposed special district is to be located and each municipality which is an interested party under section 32-1-204(1). (c)The proposal is in substantial compliance with a master plan adopted pursuant to section 30-28- 106,C.R.S. (d) The proposal is in compliance with any duly adopted county, regional, or state long-range water quality management plan for the area. (e)The creation of the proposed special district will be in the best interests of the area proposed to be served. Barden of Proof. Proceedings before the Board,as in all administrative proceedings, are accorded a presumption of validity and regularity. All reasonable doubts regarding the correctness of the Board's rulings must be resolved in favor of the agency, and the burden is upon Mead to overcome this presumption of validity. See City and County of Denver v. Bd. of Adjustment for the City and County of Denver,55 P.3d 252 (Colo.App.2002)cert.denied October 15,2002. III. Mead's Claims. Absence of Existing Need. Mead claims that the few existing homes in the District are served by septic systems,and hence do not constitute an existing need. Mead further argues that the Weld County Comprehensive Plan(WCCP)must be amended and District land before urban development can occur. Mead observes that the Service Plan itself notes that the current population of the proposed district is minimal,and that all of the affected properties are zoned agricultural,"with varying degrees of farming or ranching intensity." Absence of Projected Need. Mead relies on the need to amend the WCCP,the need to rezone the land,and the absence of an existing plan for urban development within the District for its claim that projected need is speculative.Mead also observes that the Dept.of Planning Services suggested that the proposed plan is premature,because only 160 acres within the District boundaries are located within a Mixed Use Development(MUD)area,and are therefore able to apply for urban development. However, the planning director for the City of Longmont state that about 1000 acres of District lands are within the I-25 MUD area and are planned fro urban development. MEAD v WELD Co..doc Page 5 of 10 Mead states that it has never refused to provide sewer service to any property within the District, provided that the property owners apply for annexation,and that it has plans for the future construction of a wastewater treatment facility. On the other hand,the Service Plan provides that"[t]here are no other existing municipal or quasi-municipal corporations which are willing to provide adequate(wastewater) treatment services to the initial District within a reasonable time,and on a comparable basis." Mead argues that this statement is wholly conclusory and is contrary to the facts presented to the Board,and that claims of Mead's insufficient superstructure capacity and financial capacity are unsubstantiated. Mead asserts that its existing Lake Thomas wastewater treatment plant can provide service to lands surrounding Lake Thomas and including the I-25 Business Park,and further that Mead has the financial wherewithal,potential bonding ability and physical capacity to provide services to the District. Mead states that it has been planning a new area wastewater treatment facility for years in anticipation of fulfilling its intention to urbanize and provide sewer services to an area within the District. Mead further states that it has approved a new Comprehensive Plan concerning the subject area,that it has commissioned a wastewater facilities study,and that it has acquired and annexed. This facility is apparently planned to be in operation by 2007,and required to be so by 2009 to comply with Mead's NPDES permit. The District's Inability to Provide Economical,Sufficient Service. In addition to renewing the §208 boundary argument,Mead asserts an absence of evidence to establish that St Vmin has the physical capacity to treat the District's effluent,that the proposed"gravity forced main"system is mechanically feasible;and,that the District can provide adequate security for the bonds necessary to finance its superstructure.Mead argues that,while St.Vmin has the capacity and ability to treat the District's effluent,the absence of an existing contract betweet St. Vrain and the Distirct is fatal to the District's application. Mead further argues that there are computational and engineering errors regarding the siphon that will be necessary ro move the District's effluent uphill for a portion of its route to St. Vrain's treatment facility. Mead raises additional specters surrounding a required rezoning,amendment of Weld County's Comprehensive Plan,amendment to the Water Quality Planning Association's 2003 Water Plan,a required change in St.Vrain's policy with respect to forced main flows,District Court approval of the plan,and the issuance of necessary bonds. Arbitrary.capricious and unreasonable determination bi the Board that the District will Be able to discharge the proposed indebtedness on a reasonable basis. In essence,Mead argues that: 1. Financing will depend upon general obligation bonds; 2. The proponents of the District have insufficient funds to fmance the project; 3. The source of financing depends solely upon tap fees; MEAD v WELD Co..doe Page 6 of 10 4. The growth predictions are unrealistic, unsupported by competent evidence; and, 5. There is no competent evidence to support a conclusion that the District will discharge its indebtedness in a reasonable manner. The Board's Aueast 3 2005 hearing lacked Droner advance notice. The Board abused its discretion in approving a service Am that contained conditions that are not self-executing. the pistrict's 132-1-305(41 petition contained factual misstatements. Denial 2f Due Process bk the Board. These allegations fall into four categories: 1. Approving the resolution prior to any hearing; 2. Considering information not presented at the hearing; 3. Failure to consider all evidence presented at the hearing;and, 4. Depriving Mead of the opportunity to rebut the proponents' evidence. IV. Response of the Board and District Proponent The court finds that the following responses are supported by the record in this case,and adopts the same as its findings. Existlne and nroieeted need. Competent evidence was presented at the February 14,2006 hearing that there was sufficient existing and projected need for service in the area,and that the existing service was inadequate to serve that need. Ken Williamson,a resident of the Mead,testified that the Town has not been able to provide sewer service to him or other residents in his subdivision,even though his residence was built about 10 years ago.Mr.Williamson also owns property that is included in the 1-25 Business Park. He has been trying to get sewer service in that area east of I-25 since 1986,although Mead represented that it was going to provide service in that area since it is in Mead's"208 Boundary."Mead has still not repaired or expanded. Mead's mayor informed the Board that Mead has been planning for wastewater treatment services in that area"for a number of years",but that Mead had not decided whether to construct an additional treatment plant or to deal with St.Vrain Sanitation District. Mead will not provide any wastewater collection or treatment services to any landowner unless and until the landowner's property has been annexed into the Town of Mead. Russell Caldwell,then Senior Vice President of Kirkpatrick Pettis(since acquired by the D.A. Davidson Co.),a regional banking firm in Denver,testified at the Court hearing that he prepared the portion of the proposed Service Plan that concerned the Financial Analysis. Mr.Caldwell relied upon his MEAD v WELD CO..doc Page 7 of 10 knowledge of all of the projects and growth occurring in the general area as a result of several financing projects in which he had been involved in reaching his opinions and presenting his projections concerning the project. A factor in his analysis is whether projected growth will be sufficient to sustain repayment. While his opinion was sharply challenged by Mead's witness, Stephen Clark,the Board apparently elected to rely on Caldwell's estimate and his assurance that the Davidson firm was prepared to underwrite the District'project. The Board found that adequate service is not,nor will be available to the area through the County or the Town of Mead within a reasonable time and on a comparable basis,and that the standards of the proposed District were compatible with the facility and standards of Weld County(32-1-203(2.5)(a)and (b). The District's ability to provide economical and sufficient service. Russell Caldwell and John Burgeson presented testimony on this issue,including an anticipated build-out of 180 single family homes in the first Phase of the Service Plan. Assuming that a major portion of the property were to be commercial and industrial,Caldwell confirmed that the tap fee would be sufficient to retire the bonding debt fairly quickly in about 15 years. Also anticipated was a mill levy of about 5 mills to support operation and maintenance,and a proposed cap of 20 mills, Caldwell's opinion,based upon his experience,was that the proposed Special District would be"a fairly efficient program compared to many districts that we looked at." The District's ability to discharge the proposed indebtedness on a reasonable basis. Mr.Caldwell relied upon his knowledge of all of the projects and growth occurring in the general area as a result of several financing projects in which he had been involved in reaching his opinions and presenting his projections concerning the project. Mead's witness, Steven B. Clark, testified that the proposed plan is unworkable,if the anticipated growth doesn't occur. However, Mr. Caldwell's company underwrites bonds for projects such as this one. Caldwell testified that he has every confidence in the project,and that Caldwell's company was prepared to underwrite it.Despite assertions to the contrary,the costs to be charged by St. Vrain were discussed at the Board hearing, and the Board was aware that there were yet other costs that would be charged by St. Vrain. Notice of the Board's August a,2005 hearing. There are no statutory requirements for public notice, except for the standard notice of a MEAD v WELD CO..doc Page 8 of 10 . regularly scheduled meeting of the Board. Efforts were made by the proponents to ensure that Mead and other interested parties knew of the Board's meeting,and the issue that was on the agenda. Mead and other interested parties appeared at the meeting and these parties, including Mead, were permitted to make statements on the record. The Board abused its discretion in aoorovine a service olan that contained conditions that are not self-executing. In essence,Mead argues that the validity of the service plan depends upon conditions not yet met, e.g.,amendment of Mead's Section 208 boundary by the NFRWQPA within twelve months of the date of a court order approving the service plan. This condition is self-executing in the sense that if the condition is not met within the 12-month period,the district will be dissolved. Additionally,the NFRWQPA will not consider altering a 208 boundary, unless a service plan has been approved by the court and the voters. This fact situation differs from that cited by Mead in its brief,In Re the Organization of La Plata Archuleta Water District. There,the resolution included a number of conditions that could be imposed or altered by the court, and if certain criteria were exceeded,the plan would be resubmitted to the Board, which would then delegate a final review to the planning commission. Hence,the La Plata resolution did not specify the exact nature of the final service plan. Here,the resolution provides for no alteration of the service plan,merely a condition subsequent that is essential to the viability of the service plan as presented to the Board. The District's*32-1-305(41 petition contained factual misstatements. Mead first argues that the metes and bounds description of the proposed district,as shown in Exhibit A to the Petition,does not enable a landowner to determine whether his or her property lies within the proposed district. The court rejects this argument without further comment. Mead next argues that the acreage computations in the service plan and in Exhibit A do not agree. Assuming that this difference is a computational error,the area stated in Exhibit A is the larger of the two;therefore,the difference is not relevant. If the area stated in the service plan is in fact smaller than the area stated in Exhibit A,again there is no fatal difference. Finally,Mead argues that the District's stated costs are false;however,the court fords that Mead's arguments rests upon the assumption that the testimony of its witnesses were true, while the testimony of the District's witnesses was not. The Board resolved this disputed testimony in favor of the District,and its resolution is supported by the evidence. MEAD v WELD CO..doc Page 9 of 10 . S { Denial of Due Process by the Board. Due process in administrative hearings requires that affected parties be given notice and a meaningful opportunity to be heard.The primary requirement is that the principles of fundamental fairness be observed in such proceedings. See Monte Vista Prof 1 Bldq.Inc. v.City of Monte Vista,531 P.2d 400(Colo.App. 1975). Mead was given a verbal summary of the contents of the Debt Capacity Analysis prepared by Russell Caldwell,when Mr.Caldwell testified in detail of the contents of the Debt Capacity document. Mead was also then given an opportunity to respond to Mr.Caldwell:s testimony and opinions.Mead presented its financial information in rebuttal to Mr.Caldwell's information and opinions through three different witnesses.The Transcript of the Board hearing clearly shows that Mead had a full and fair opportunity to respond to Mr. Caldwell's information and opinions as set forth in the Debt Capacity Analysis,and as summarized by Mr.Caldwell in his testimony at that hearing.At the Court hearing, Mead did not present any additional information concerning its ability to finance a wastewater treatment facility beyond what had already been presented at the Board hearing. V.CONCLUSION For the reasons stated above,the court fords and concludes that the Board's approval of the proposed Service Plan for the East 1-25 Sanitation District was proper and in compliance with the applicable statutory requirements. Accordingly, it is ordered that: 1. Mead's petition under C.R.C.P.Rule 106 is dismissed 2.Pursuant to C.R.S. § 32-1-305(4),the question of the organization of said Special District shall be submitted to an election to be held for that purpose, in accordance with Title 1,Articles 1 to 13,C.R.S. 3.Counsel for the Petitioner shall draft an Order,setting the election for October 2,2007. Done June 22,2007,by the court: Jona W. Hays,Senior Di Judge MEAD v WELD CO.doc Page 10 of JO Hello