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HomeMy WebLinkAbout20060454.tiff HEARING CERTIFICATION RE: CONSIDER SERVICE PLANS FOR PROPOSED PIONEER REGIONAL METROPOLITAN DISTRICT (SERVICE DISTRICT) AND PIONEER REGIONAL METROPOLITAN DISTRICTS NO. 1 THROUGH NO. 6 (FINANCING DISTRICTS) A public hearing was conducted on February 6, 2006, at 9:00 a.m., with the following present: Commissioner M. J. Geile, Chair Commissioner David E. Long, Pro-Tem Commissioner William H. Jerke Commissioner Robert D. Masden Commissioner Glenn Vaad Also present: Director of Finance and Administration, Donald D. Warden Acting Clerk to the Board, Carol A. Harding Assistant County Attorney, Lee Morrison Planning Department representative, Brad Mueller The following business was transacted: I hereby certify that pursuant to a notice duly published January 18, 2006, in the Fort Lupton Press and January 17, 2006 in the Greeley Tribune, a public hearing was conducted to consider the proposed Service Plans for the Pioneer Regional Metropolitan District(Service District)and Pioneer Regional Metropolitan Districts No. 1 through No.6(Financing Districts). Lee Morrison,Assistant County Attorney, made this a matter of record, and stated the certificate of mailing is in the record indicating the entities which were notified. Brad Mueller, Department of Planning Services, presented a brief summary of the proposal and entered the unfavorable recommendation of the Planning Commission into the record as written. He stated a recommendation for denial was given for all seven districts. Mr. Mueller stated the site is north of Keenesburg and Hudson, near Weld County Roads 49 and 32. He stated the service district covers one acre of the 5,600 acres, and he located each of the six financing districts on the map. Mr. Mueller gave a brief history of Title 32 Special Districts, and stated the application includes a one-acre service district, which will be operated and maintained by a Board of Directors. He stated there are eight proposed services,and the District will purchase water and sanitation services from Resource Colorado Water and Sanitation Metropolitan District (Resource Colorado), which will receive fees through the six financing districts. He stated the six financing districts are various sizes and are being used to allow phasing of construction and financing of the Service District as construction progresses. Mr. Mueller reviewed the State criteria for approval,and he stated the Planning Commission concluded the proposed services are urban in nature,although the area is zoned agricultural and is not located within an Intergovernmental Agreement(IGA)Area, Urban Growth Boundary or municipality. He further stated the Planning Commission also found that existing services are adequate for the site, and there is some uncertainty about the feasibility of the Service Plan,although the Service Districts have the ability to provide the services that are intended. Mr. Mueller stated the Planning Commission found the Service Plan complies with several discretionary State criteria, including that adequate services are not available from others,and service standards are compatible. He stated the Planning Commission; however,does not believe that the Service Plans comply with the Weld County Comprehensive Plan, since urban-level development is not supported at this time in the 2006-0454 � SD0126 e co I�t- 03- -O0 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 2 subject area. Mr.Mueller stated another discretionary criteria of the State is that the District comply with water quality plans for the area, which the Planning Commission believed could be met with additional information;and that it be in the best interest of the proposed area of Weld County,which does not comply at this time. Mr. Mueller stated Don Warden, Director of Finance and Administration,indicated that County policy has been met with the revised Service Plan,which has been resubmitted to comply with the policy for Special Districts that this Board recently adopted. He stated additional review comments have been submitted, including a Memorandum dated January4,2006,from TrevorJiricek, Department of Public Health and Environment;a Memorandum dated January 24,2006,from Mr.Warden containing his revised recommendation(marked Exhibit E);an updated reportdated January 30,2006,from Leland Consulting Group;a letter dated January 30, 2006, to McGeady Sisneros, P.C., forwarding his updated commen ts; a subsequent Memorandum from Mr. Warden dated February 3, 2006 (marked Exhibit E); and a copy of four Conditions of Approval proposed by staff should the Board of Commissioners choose to approve the Service Plans. Mr. Mueller submitted the applicant's response to his updated comments, marked Exhibit F,which includes proposed language for the Resolution for approval. Mr. Mueller stated the Department of Public Health and Environment stated the Service Plans do not adequately account for unexpected water costs that may occur, and staff is concerned about the apparent intention fora high degree of recreational facilities without budgeted recreational capital in the Plans. Mr. Mueller stated Finance and Administration emphasized the County would not accept the infrastructure. Mr. Mueller stated the independent financial review from Bill Cunningham, Leland Consulting Group, indicates the absorption rates thatform the assumptions of the financial elements of the Plan are overly aggressive, the market rates and assessment values for future housing is likely lower than projected by the applicant, and the result of those changes is a negative fiscal impact to the County,with similar impacts being felt by other entities. Mr. Mueller stated concerns of Planning staff regarding the future citizen representation for the Service District and the scope of the possible inclusion of Weld County Road 49. Mr. Mueller summarized that the Planning Commission found the Service Plans do not meet state statute since there is no current existing or projected need;the existing rural services are adequate for the rural zoning in the area;there are uncertainties surrounding the capability of providing services,as well as financial uncertainties;the Service Plans do not comply with the Weld County Comprehensive Plan;there is some uncertainty about water quality; and it is not in the best interest of the area at this time. Responding to Chair Geile,Mr.Mueller stated the Planning Commission's comments regarding water were concerning the protection of water quality, not water supply. Don Warden, Director of Finance and Administration, stated he submitted three reviews of the Service Plan. The first one,dated December 5,2006, recommended denial since the Service Plan raised a number of issues he felt did not comply with proposed Metropolitan District requirements. Mr.Warden stated the revised Service Plan addressed all of those issues, including changing the maturity for bonded indebtedness from 40 years to 30 years,and clarifying some of the issues with mill levies by Chris Fellows,who was drafting those policies. Mr.Warden stated at the time of his January 2, 2006, recommendation he had concerns about whether it would be necessary for the County to accept certain improvements. He stated he would not recommend acceptance of any improvements which were not at the normal level for the County,or specific services not provided by the County,for example, streetscaping,other landscaping improvements, park and recreation facilities, transportation systems such as buses and rails, certain street development, and water and sewer. Mr. Warden stated the applicant's February 3, 2006, response clarified they were providing flexibility in case the County,at some future date, did want to have ownership or control 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 3 of those services; however,they did not intend for the County to accept those services. He stated, at that time,the revised Service Plan met County policy based upon the recent Code amendments; however,the feasibility study was still pending. Mr.Warden stated his final recommendation,dated February 3, 2006, was completed after he received the report from Mr. Cunningham, who was retained by the County to review the financial and marketing feasibility. Based on the information provided by Mr.Cunningham,Mr.Warden stated there is concern about the absorption rate,which Mr. Cunningham feels is fairly aggressive and based on the Denver metro area, instead of what might happen in a more remote Weld County area; and the competition this project could have with other projects in the same growth corridor of the north Denver area. Mr.Warden stated the impact is that, instead of a 20-year buildout, it would take 30 or 35 years, which impacts the financial feasibility,bonding and ongoing maintenance operations. When projections are carried out through the total buildout, instead of a surplus as shown in the Service Plan, a substantial fiscal deficit exists, with the Service District basically paying only two-thirds of its way. Therefore, he recommended denial of the Service Plans, based upon the buildout being more appropriately demonstrated to be 30 or 35 years instead of 20, which creates a financial deficit instead of a surplus,thereby allowing a project which is not paying its own way. In addition,he cautioned against creating another Beebe Draw-type district,which promised immediate buildout; however, after 20 years it is still not built out, leaving a lack of services, and promises unfulfilled. Mr. Warden stated the Comprehensive Plan discourages a project in a remote area where services are not fully available, and the Leland Group analysis provides good evidence why projects in remote areas of Weld County may not be in the best interests of Weld County's future growth and fiscal well being. Responding to Commissioner Vaad,Mr.Warden explained if the buildout is longer than projected, the burden would shift to taxpayers because the services provided by the County would be subsidized by all taxpayers in Weld County; however,the more immediate impact would be a fire district or Aims Community College,which would be impacted if the Service District were not paying its own way. He further explained by creating a population of 30,000,there is an increased demand for services, which may cost $15 million; however, if the fees only raise $10 million, the other $5 million would be picked up by other overlapping taxing entities. Responding to Chair Geile, Mr. Warden stated the overall bond issue information given is within the parameters of County policy of 65 mills. Responding to Commissioner Jerke, Mr. Warden stated it is true that a residential enclave does not normally pay its own way, since it typically carries a high demand for services, with a low generation of property tax. He further stated that staffs recommendation is that it is necessary to create a community, with a retail, industrial and commercial component containing an employment base. He stated it is necessary to create viable economic communities, which would have sales tax,etcetera, in addition to property tax. Mr.Warden stated the Board,as policy makers, needs to determine what they want to see in Weld County,and he stated the Mixed Use Development Study is being accomplished because it was determined that development should occur in an orderly fashion with viable economic communities. Commissioner Jerke stated it is incumbent upon the applicants to show there is a place for those other businesses in their project. Bill Cunningham, Leland Consulting Group, stated he was asked to review the absorption and buildout of land uses, market values by land use type, fiscal impacts to the County (operating revenues and expenditures), and impacts on area schools. Responding to Chair Geile, Mr. Cunningham stated market absorption is how fast a development will be built and occupied,or how long commercial development is open. He stated in these Service Plans,the applicant is planning 10,000 housing units,with nearly 30,000 new residents at buildout. He stated he does not have a problem with the methodology for determining the absorption forecast provided in the Service Plans; however, he estimates the Pioneer development will be more affected by growth in Weld County, 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 4 rather than in the extended Denver region. He stated the Plan includes a projection of 10,000 units over a ten-year period,or approximately 500 units per year must be built and occupied,generating tax revenues at that rate. He stated that if you look at the competition, such as Reunion in Commerce City,a lot of master planned communities near Brighton, and the development which will be occurring in southwest Weld County over the next 20 years. Mr. Cunningham stated in looking at the level of competition compared to market share numbers, he felt the applicants would have to capture a significant market share,which is higher than he would estimate for the project, especially when looking at the location and position versus all the other competitive projects. Therefore, he felt the 500 units per year was too aggressive, given current market conditions and where growth is headed in the County. Mr.Cunningham stated the effect is that the absorption level, if not accurate, puts the financial feasibility of the project behind from the beginning,and he feels the absorption rate used is too aggressive. Mr. Cunningham stated the second issue is how the County's operating revenues and expenditures would be affected. Again,he stated the methodology was appropriate for a project of this size and scope,at this level of the planning process. He stated the applicant used the current revenues and expenditures in the budget and applied them to create a per capita indicator based on the unincorporated population, which determines the per capita impact on revenue in unincorporated Weld County. He stated the applicant also attempted to measure employees in unincorporated Weld County,which was estimated at about 15 percent of the unincorporated population,which he also used. However,when the applicant went through their methodology,taking the per capita number and forecasting it forward based on the new population this project is going to generate,they applied a per capita number for unincorporated Weld County which is approximately twice what it really is. The effect was that they were underestimating future operating expenditures,which had the most profound impact on his numbers. Those two impacts, Mr.Cunningham stated,turned the applicant's estimate of fiscal surplus at buildout for the County into a fiscal deficit, indicating it would cost more to service the 28,000 or 30,000 residents than the revenues coming in. He reiterated it was the combination of slower absorption and an understatement of expenditures required to serve that area. Mr.Cunningham stated,as Mr.Warden summarized, the absorption rate is too high, which has a limiting impact on revenues, the assumptions regarding expenditures were not correct,therefore,creating higher expenditures than were forecast. That combination resulted in the fiscal equation being tipped over to a deficit situation rather than a surplus situation. Mr.Cunningham stated the bond issue and the indebtedness for the Service Districts are two different issues. He stated the revenues for the Service District are over and above the property tax mill levy. He stated he is analyzing the fiscal impact to the County in serving all of those new residents. He stated this project has the potential of nearly doubling the population in unincorporated Weld County,and he is trying to analyze the fiscal impacts to County services,operating revenues and expenditures,that relate to that increase in population. He stated if the absorption rate is slower than expected, there is the danger that the financing portion gets ahead of development, which creates problems for the bonded indebtedness because of the mill levy changing each year or the pricing and assessed value of the housing. Responding to CommissionerJerke,Mr.Warden stated the biggest difference in incorporated and unincorporated populations is in the area of public works and law enforcement services. He stated the problem occurs if the project is not built out, although there is not much difference if the Service Plans and Service District work. Mr. Warden stated an example would be to add 30,000 residential units to the City of Greeley which, without property or sales tax proponents, would be subsidized by the overlapping taxing entities, with an increased cost to all other taxpayers. 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 5 Mr. Mueller explained that when Planners speak of growth paying its own way, they are typically talking about most immediate and capital needs. He stated the bonding pays for those needs; however, Mr. Cunningham is projecting problems with this project because of the length of time required for full buildout. Mr.Mueller stated the planning concepts eluded to by Mr.Warden do not carry an expectation of growth paying for itself for purely residential projects; however, when residential,commercial,and retail are evenly projected,the balance of government services versus expenditures is obtained. He stated Mr. Cunningham found an imbalance in both instances. Responding to CommissionerJerke,Mr.Mueller stated growth can pay its own way;however,this analysis suggests the buildout and balance of uses does not allow that to happen with this plan. Responding to Commissioner Vaad, Mr. Cunningham stated the analysis done by the applicant's representative, RCLCo, which is part of the application, is the analysis which considered the northeast Denver market share,and the 1-76 market share. He stated his approach was to balance that with the growth in Weld County, using the State demographer's numbers, and the growth in southern Weld County over the next 20 to 30 years, as opposed to simply extending the Denver Metro area northward. He referenced Table 1 in his report, which includes the required market shares of Weld County growth that this project would have to obtain, based on state demographer numbers,and stated his belief that the number is too high,given all the other developments that are nearby. Mr. Cunningham stated it is very difficult to ascertain market values, stating the RCLCo analysis used$250,000 per unit,which did not appear to account for the mix of products that their development project showed. He stated they included 8,000 single family units, about 1,000 single family attached units, such as Townhouses,and 1,000 multi-family units. Mr.Cunningham stated he attempted to account for the lower value multi-family units and lower value single family attached units,thereby lowering the average unit value for residential than was provided in the Service Plan. Responding to Commissioner Vaad, Mr. Warden stated the developer could pay more up front money to provide services before the fees are generated,allowing more control. Mr.Cunningham added that the potential for a Metropolitan District when development is not occurring as fast as anticipated, is to adjust the unit price to speed up the absorption rate; and the danger is that a developer might be forced to increase the mill levy to cover some of the slower absorption,or lower market value. He stated this project is in a position that will most likely require a lower market price to entice the individuals to purchase their homes, therefore, the pricing of the homes does need to be monitored through the length of the project. Responding to Commissioner Masden, Mr. Cunningham stated the commercial component of this project includes approximately 200,000 square feet,which is appropriately tied to the speed in which residential sales occurs. He indicated a better land use balance would be preferable, since 200,000 square feet appears small for 30,000 people. Mr.Warden stated the lack of a County sales tax will be an issue with this large of a development, and even if a large amount of retail services were included, without a County sales tax there would not be revenue received from it. Responding to Chair Geile,Mr.Cunningham stated he did not attempt to establish the assessed value for the project, although he could extend his analysis to include that component. He stated the underlying assumptions behind those numbers and the fact that the numbers have been inflated at a fairly good clip, the compounding impact is sizeable. Mr.Warden stated when considering the bonding portion of the Service Plan, there are not as many issues,and if the applicants build the project correctly,building it and phasing it at the same rate that sales are taking place, they will not be spending ahead of the project. He stated the risk occurs if they get ahead of the project, building infrastructure to market more sales, without the sales to support the additional infrastructure costs. Mr. Warden reiterated he is not concerned about the bonding, especially since it is broken out into six financing districts, and the bonded indebtedness would be available for building the infrastructure. 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 6 Chris Paulson, Partner in Pioneer Communities, stated his partners in this project are Joel Farkas and Harvey Deutch. He stated an amendment to the Comprehensive Plan was submitted last summer, and the Service Plans were submitted prior to the Board of Commissioners adopting its Metropolitan District Policy. He stated the information reviewed by Leland Consulting Group was part of the Comprehensive Plan submittal, not the Service Plan. He stated Jack Reutzel from Reutzel and Associates, will address the issues discussed by Mr. Cunningham. Mr. Paulson stated this application stems, in part, from the approval of Resource Colorado Water and Sanitation Metropolitan District(Resource Colorado). He stated the Board requested them to look at using some of the water from the Lost Creek Basin in Weld County. He stated they found a large parcel of non-irrigated ground,in the path of growth being generated by Denver International Airport (DIA), and the growth of the urban corridor along 1-76. He stated that having Resource Colorado provide potable,consumable water from a unique water resource,will allow the developer to take advantage of the growth occurring around DIA, giving these districts a competitive advantage. He stated this data,in plain form,will have a tremendous advantage over Reunion,and other similar projects,because of the available water. Mr. Paulson stated the approval of Resource Colorado made that opportunity available for Weld County. He stated the County has also supported the provision of sewer service through the 208 approval in the North Front Range Water Quality partnership,which was conditional upon the Comprehensive Plan amendment and land use application being approved to coincide with the designation of the sewer service. He stated approval of the Service Plans is the next logical step, including one service district which is a small service area that can take the bonding capacity and provide for the initial infrastructure for water,sewer,and highways. He stated that over a period of time the six financing districts will consume the services and prepare the future property owners for the responsibility of management of those districts in an orderly fashion. He stated the reason there are six districts is that,as growth occurs,the individuals who are the beneficiaries of that growth will be in control of the metro, sewer, and water districts. Mr. Paulson stated the small amount of commercial property was included as a conservative estimate; however,it was also in response to the Towns of Hudson and Keenesburg, both of which requested a chance for their communities to grow and provide the commercial aspect of the development where possible. Mr. Paulson stated they do not want to take the chance away from those communities, since it is their intention to allow the Towns to grow along with this project. Responding to the problems identified by Mr.Cunningham in his fiscal analysis,Mr. Paulson stated growth will pay its own way in the southeastern Weld region. He stated that by bringing water into the area from outside,the property owners do not have to pay for it. He stated a Law Enforcement Authority will be established to provide the mechanism to pay for public safety which will not be paid for by other County taxpayers,and a school foundation would be in place before the growth hits the rest of the community. Mr. Paulson reiterated the applicants have a vision for growth for southeast Weld which,even if their projections are off,will provide planned and orderly growth. (Changed to Tape#2005-04). He stated the proposed resolution submitted in their response dated February 3, 2006, modifies the first two proposed Conditions of Approval,to state that no bonds will be issued until the Comprehensive Plan amendment has been approved. He stated they are also willing to include an appendix showing the lower growth scenario projected by Mr.Cunningham. Responding to Commissioner Vaad regarding Highlands Ranch,Mr. Paulson stated that project is 35,000 units over a period of 35 years, with a huge amount of commercial properties. He also stated Littleton was much further away than Hudson and Keenesburg are from this project. Jack Reutzel,Attorney,stated he provides land use counsel to the applicants. He stated it makes sense to move this project forward. He stated it is necessary to take the language in the 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 7 Comprehensive Plan,language in the Special District Statute,and language in the Service Plan and place it on a straight line. He stated this is a seven step process, beginning with approval of Resource Colorado, the 208 boundary change, and approval of the Service Plans being the third step. He stated it precedes the Comprehensive Plan amendment because it answers the fundamental question of whether the Districts,as proposed, have a mechanism to provide services. He stated that approval of the Service Plans,conditional on the Comprehensive Plan amendment, answers that question in the affirmative. Mr. Reutzel stated the Comprehensive Plan states urban growth may take place within towns,within urban growth boundary areas,within areas of IGA's,or within other areas where services are available or can reasonably be made available. He stated the Service Plans address future growth in this region; and even though there is disagreement on the rate, it is believed by both sides that growth will occur in this corridor. Mr. Reutzel stated the four proposed Conditions of Approval adequately protect the County,and the seven step process will require many further appearances before this Board. Mr. Reutzel stated Mr. Kaufmann will present the answer to the statutory criteria required to determine whether there is an existing or proposed need for the services. Gadi Kaufmann, CEO of Robert Charles Lesser Co., LLC (RCLCo), reviewed the company's reputation and experience for providing review of large scale master planned services on a national basis. He stated the Denver Metro region is growing and Weld County will no longer be able to stay independent from that growth. Therefore,the County will need to accommodate the overflow from nearby counties,which will make more sense for the fundamentals of this project. Mr. Kaufmann referenced the charttitled,"High Growth and Affordability in Weld County"showing the activity in the area over the last five years. He stated the source is the State demographer, and the chart shows that Adams County has been the second fastest growing county in the area, with housing prices rising. He discussed the amount of growth projected for the next 25 years in Adams and Weld Counties,which average 2,800 units per year. Mr. Kaufmann discussed the multiple constraints in Adams County which are forcing growth south into Weld County, including the major impact on the region by DIA, the amount of development going on around this area, and support services growing up around the airport creating new jobs. He stated growth is also constrained in Adams County because of the flight path, Rocky Mountain Arsenal, Barr Lake, and the railroad tracks through the area. Mr. Kaufmann stated most of the land in Adams County has traded hands and much of it is already planned for development, leaving very limited opportunity for large parcels of property in Adams County. He stated that 60 percent of the building permits currently being issued in Adams County are along the 1-76 corridor. Mr. Kaufmann stated all of these constraints in Adams County will cause growth to spill over into Weld County,which has already been happening in the southwestern part of Weld County. He stated the same thing will happen in the southeastern portion of Weld County. Mr. Kaufmann stated, using the State demographer's data,there will be 127,500 new households over the next 25 years in Adams County;currently they have planned 56,900 units, therefore,2,200 of 5,000 are identified at this point,leaving 2,800 units or surplus per year,or 71,000 units over the next 25 years. He stated that development in Denver has always "spilled out" to surrounding entities. Mr. Kaufmann stated the near term units are smaller, because of available parcels; however, in the long term the number of units"spilling"into Weld County will increase. He stated Weld County is expected to grow by 87,500 units or 3,500 units each year,leaving a potential demand of 6,324 units per year,or 158,100 total. Mr. Kaufmann summarized that growth is pushing in this direction and 1-76 is already getting 60 percent of Adams County's activity since it is already established;therefore,with Weld County being closer to where the jobs are and future jobs will be, the demand will definitely push over the County line and Weld County will be left with the question of how to accommodate that growth. He stated it can be done in 30 to 35 acre lots or in a large 2006-0454 S D0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 8 planned development as discussed with this project. Responding to Commissioner Vaad, Mr. Kaufmann stated Weld County's core growth is an increase of 2,000 to 3,000 units per year, although the southwest portion has stabilized at about 2,500 additional units per year. He stated growth should begin shifting to the northeast area,which has had almost no growth since there is no economic engine, enabling infrastructure, or development patterns to allow growth to occur; although growth is starting to go north on 1-25. He stated Weld County will end up with three basic units, including the Greeley,central Weld County area with its own economic base and developing over the same path as now,as well as the southwestern and southeastern portions of the County. (Recess for lunch, reconvening in the Department of Planning Services Hearing Room.) Upon reconvening, Sam Sharp, Kirkpatrick Pettis, Investment Bankers, stated he is the lead underwriter for special districts in Colorado,with a great deal of experience in the market and with this application in particular. He discussed the financial feasibility of this application, and stated there are three stakeholders,the future taxpayers in the district,the bond holders,and the developer. Mr. Sharp stated the mill levy cap insulates the future taxpayers from any development risk and places the risk on the bond holders and developer. He stated State statutes require investors to be sophisticated,generally high yield mutual fund companies,which are qualified to determine the risks involved. Mr. Sharp stated all other risk ends up with the developer, who evaluates risk and absorption rates, using phasing to handle the risk. He stated the six financing districts will match the absorption rate to the project,especially infrastructure,and they will learn the real market as the phases progress. Mr. Sharp stated the alternate financing plan requested by the Planning Commission is a good idea, and it will prove the point, that whether 20 or 30 year absorption, the bonds will move slower, the absorption will move slower, and the infrastructure will move slower. Responding to Chair Geile regarding the maximum interest rate of 18 percent, Mr.Sharp stated the intent was to have it be high enough that an amendment to the Service Plan would not be necessary,if the market were to change. He stated that today's market rate is between 6.5 percent and 8 percent, therefore, 18 percent would be the highest projected rate. Responding further to Chair Geile,Mr.Sharp stated he included upfront impact or development fees into his models,which are one time fees charged by the district to be used to pay back debt used to build infrastructure, and they are in addition to property taxes, probably as a building permit fee. Mr. Sharp stated it is a way to get money from the developer earlier in the process, until absorption catches up and it mostly impacts the developer. He stated the only other fee would be property taxes for future buyers at the financing district level. Responding further to Chair Geile,Mr.Sharp clarified that the service district will have ongoing fees and charges in an enterprise fund for operation, maintenance, and eventually debt service. He stated that the Service Plan does not include services provided outside of the service area boundaries, and he will make every effort to disclose all fees and costs to prospective buyers. He stated the biggest impact to property owners is the mill levy. Mr. Sharp stated the Service Plan is not at the mill levy cap limit of 65,they are only planning on 50 mills. He stated the figures are based on the RCLCo report, and the 15 mill cushion currently in the report would cover a 30 percent decrease in value. Responding to Commissioner Vaad, Mr. Paulson stated in the Service Plans, Metro District#1 is a discreet geographic area, and the finance plan calculated approximately 2,000 homes. He stated Metro District#2 is adjacent to#1, and all of the infrastructure was based on roads and connecting pipes for sewer,water, and storm drainage, to be in the next adjacent district before it comes on line;therefore, it is geographically phased as well as phased in terms of absorption rate. Responding further to Commissioner Vaad, Mr. Paulson stated the total mills for all taxing entities would be calculated around 140 mills. He stated they have tried not to have hidden fees, and they had to calculate the entire amount to determine the viability 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 9 of the project. Responding to Chair Geile, Mr. Paulson stated the 7 mills for the Law Enforcement District is not included in the 65 mill cap limit, it is created under a separate action by the Board of Commissioners. Responding to CommissionerJerke,Mr.Warden reiterated there is still a mill levy for school, library, Aims Community College, etcetera, which is how they arrive at a total of 140 mills. MaryAnn McGeady,McGeady Sisneros,P.C.,stated she has reviewed the four proposed Conditions of Approval recommended by staff; however,she presented three different Conditions of Approval for consideration, marked Exhibit G. Joel Farkas, Partner in Pioneer Communities, summarized their approach, stating first they determined what the community should look like, but more importantly,what the regional perspective is. He stated they started with the regional perspective, looking at schools,transportation,land use,water resources,other extenuating conditions, history and characteristics of the area, as well as agriculture along with all the other projections. Mr. Farkas stated the financial projections are very exact, however,they are always inaccurate once the project is begun. He stated they spent a lot of time on the question of how to retain water resources in the County, not only for their development but also for agriculture. He stated there is a lot of property in the County without water resources,which is why they started there. Mr. Farkas stated growth patterns always follow resources. He stated schools are also important, and he and Mr. Deutch have the proud distinction of actually being able to form a Capital Facilities Fee Foundation to build a Kindergarten through 12th grade school which was open and functioning prior to any residents moving into the district,which proves constraints by development can be accommodated instead of costing the County more. Mr. Farkas reiterated it takes proper handling of districts and appropriate fees; however,those have been included in the Service Plans. He stated that within the six districts,there may be five or six additional phases within each district to determine how to build infrastructure. He stated that even the early infrastructure, such as water and sewer, are built with planned plant expansions to be completed as development occurs. Mr. Farkas stated there has been discussion about what happens if growth does not occur;however,there is also the possibility that it may occur faster than projected,which would cause a bigger problem, since the developer still needs to build infrastructure and plan for schools, water, transportation, etcetera, without allowing the growth to get ahead of the infrastructure. He stated they have looked at both sides of growth possibilities. Responding to Chair Geile,Mr. Farcus stated the waste water treatment plant will be located on the northern boundary of the site,with the water treatment plant being located on the south boundary. He stated they will begin with the wastewater treatment plant,which is located to allow gravity line and discharge,therefore the location is established to capture and return flows. Mr. Paulson stated the water treatment plant is tentatively planned at the highest point of the project, which is on the southern boundary, closest to 1-76, bringing water from Lost Creek, piping it past Keenesburg to the southern point of District#1. Responding to Commissioner Masden,Mr. Paulson stated the waste water treatment discharge would be to Box Elder Creek, which eventually flows into the Platte River. He stated they are working with Central Weld Water,and currently have wells that are at 50 percent allotment from Central. He stated they have hired an agricultural consultant to determine how much to consume and how much is available to Central Weld Water for augmentation. Ms.McGeady reviewed the language proposed for three Conditions of Approval,and stated the first would tie the conditional approval of the Service Plans to approval of an amendment to the Comprehensive Plan, rather than a two-year time period. She stated this would allow for the growth projections assumed in the financing plan to be consistent with the Comprehensive Plan amendment. Ms.McGeady stated the District would exist without the ability to issue debt; however, 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 10 if land use densities and designations are different than expected in the Comprehensive Plan amendment,they will resubmit the Service Plan with a different finance plan. She stated proposed Condition#2 requires the addition of another financial plan, assuming a longer absorption period, to allow for a 30 year buildout; and proposed Condition#3 would require the control of the Service District to be transitioned to the Financing Districts by way of an Intergovernmental Agreement when all the public improvements required to serve the Service area have been financed and constructed. She reiterated the Service District is the smaller District and the Financing Districts are the ones that will have Boards of Directors that will be transitioned to residents as they move in, which will eventually give residents control of those Boards. When all the improvements have been financed and completed, the Service District would be transitioned out and the residents would take over control of all the facilities. Responding to Commissioner Masden,Ms.McGeady stated eventually the Service District would no longer provide service, and the assets would be taken over by the other Districts. Responding to Mr.Morrison,Ms.McGeady stated the Service Plan includes several authorities which would each be created by an Intergovernmental Agreement,thereby allowing the opportunity among residents of the different Financing Districts for representation on the created authority to take over the assets and maintain the systems. She stated it would be very difficult for six different Districts to run the sewer plant, for instance; however, a citizen representative from each Financial District would be included on the Authority Board,which would have responsibility for operation and maintenance of the plant. Mr. Morrison clarified that the Service Plan does not eliminate the use of authorities. Responding to Chair Geile, Ms. McGeady stated if the Service Plans are approved as presented, they will revise the Service Plan and resubmit it to staff for approval. If staff concurs it meets the Conditions, it would then be forwarded to District Court,the Court would order the election, and the election would proceed; meanwhile, the Comprehensive Plan amendment would be processed simultaneously. She stated the election process would probably be completed and the Districts organized; however, no debt could be issued prior to the Comprehensive Plan being approved. Responding further to Chair Geile, Ms.McGeady stated the IGAs create the authority,comprised of elected Board members of all the Districts,which would put the residents in control; then the transition of the improvements and assets would occur as soon as all the financing and construction is completed. She stated the IGAs would be negotiated with the residents, not based on County requirements, since it will be many years ahead. Responding to Chair Geile, Mr. Farkas stated the Districts will meet the indebtedness as they pay off bonds; however, there are also operations and maintenance to be provided, therefore, the six districts would not be dissolved. Ms. McGeady stated the assumptions in the Service Plans are that the Financing Districts will be around forever,with the wastewater and water treatment transitioned from the Service District to the Financing Districts, because that is where the money comes from to operate them. She stated at that point the Service District serves no function. Responding to Chair Geile,Mr. Farkas stated dissolution language can be included,as it pertains to the Service District. Ms. McGeady stated her proposed Condition#1 is an alternative to staffs proposed Condition A. Responding to Chair Geile, Mr. Morrison stated the Service Plan only discussed dissolution of the Service District, which would turn over control to the Financing District, therefore, that can be addressed in the same agreement. Linda Schoeneman, Roggen resident, stated she has been involved in a lot of water negotiations through the Lost Creek Water District,and her biggest concern is that representation is not present from Keenesburg or Hudson. She stated that in Roggen they pay taxes for schools, sheriff, fire, water, library,and Aims, and she asked the Board of Commissioners to guard their resources, for instance, the Sheriff says he does not have enough budgeted revenue to cover present services, and she is concerned the additional residents will add more to her tax assessment. Ms. 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 11 Schoeneman stated she does not want to have to pay for taxes up front as the project develops,and she is concerned about how services will be paid for during the growth process, without her tax burden increasing. Responding to CommissionerJerke, Mr.Warden stated 14 or 15 deputies have been added in the last five years. Joel Schoeneman stated his concern is pulling water out of the aquifer and putting it back into Box Elder. He asked why it is not being returned to the same aquifer. Mr. Mueller reviewed the Planning Commission recommendation, and stated staff and Planning Commission have tried to deal with which County services and needs would be impacted. He stated the Special District requirements in State statutes requires a demonstrated need for services. He discussed the Catch 22 of the land use process and how land use decisions might be made concurrently with service plan decisions. He stated the Planning Commission recommendation is based on the finding that the need for services is not apparent at this time. He stated it is necessary to distinguish between the financial risk through the bonding market and the risk of County services increasing. He compared this project to Highlands Ranch, which is approximately 14,000 acres of developed area versus 5,600 acres; Highlands Ranch contains approximately 1.5 million square feet of commercial area versus 200,000 square feet;and there are four distinct commercial neighborhoods and two industrial parks included in Highlands Ranch. He stated staff attempted to identify the risk benefit for future problems for the Planning Commission, although some, such as water, cannot be dealt with at this level, since it requires the land use process to further define all the details of the project. Mr. Mueller stated staff has concerns regarding the proposed language submitted by the applicant;since there is no time frame included, and the Comprehensive Plan amendment not being a precise document for determining land uses. He stated the vesting process occurs at zoning,which is a better trigger for when debt may occur. Responding to Chair Geile, Mr. Morrison stated the applicant has been directed to establish the services before they pursue the Comprehensive Plan amendment,which is why this was presented at this time. He stated the Board of Commissioners,at some point,needs to make a decision about something, instead of going in circles. He stated the issue of water is fairly in front of the Board because the determination must be made whether the proposed Districts are capable of providing economical and sufficient services to the area within its proposed boundary. Mr. Morrison stated the availability of water has already been addressed in the previously approved Colorado Resource Metropolitan District, and it has been adjudicated;therefore, the Board does not have to re-litigate the adjudication of the water rights. He stated it is relevant because that is part of the proposed service; however,the Board is looking at the contracts under which the water would be provided. Mr.Morrison stated the issue of whether it needs to be recharged is part of the original adjudication of the Lost Creek water rights. He stated the decision of where the water should be used is a part of this proceeding, based on what is being presented. Responding to Commissioner Masden, Mr. Morrison stated the Board needs to consider whether the proposal is an economical and sufficient service. Mr. Mueller stated there is a certain level of uncertainty at this stage, since the Service Plans are being considered prior to the Comprehensive Plan amendment, rezoning, and sketch plans. Responding to Chair Geile, Mr. Mueller stated it is the intention of the applicant to form a separate Law Enforcement Authority(LEA),which would be authorized to levy taxes. He reiterated the cumulative effects would be a total of 140 mills. Mr. Warden stated the LEA would be allowed an additional 7 mills, for that level of services. He stated the other areas are more difficult to analyze,for example,a class size reaching a limit where prior agreements with Teacher Associations have required an additional class with an additional teacher being added at that point. Mr. Warden stated the problem is that the revenues will be 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 12 inclining steadily according to growth,while the service level will go up in a stair-step manner,which creates indirect costs. He stated it may take awhile for revenues to catch up, although the County could require the developer to include up front funding. Mr. Cunningham stated impacts occur to taxpayers outside of the service area,although the Service Plans take very good care of those within the project. He stated these impacts on the rest of unincorporated Weld County for other overlapping services is what he was highlighting regarding the RCLCo analysis which showed a fiscal surplus while his analysis showed a fiscal deficit. Mr. Cunningham stated there are fiscal impacts to people outside the development,and as the plans are refined and pursued,there needs to be a capacity analysis,to determine whether one-time investments which might be required,such as purchasing a fire truck up front, to help plan for those types of needs. Responding to Commissioner Masden, Mr. Warden stated the capital investment facility fee was initiated in an attempt to build new County offices,jails, etcetera, as necessary. He stated that over time it may stay even; however, in the beginning there will be problems and shortages. Responding to Mr. Morrison, Mr. Mueller stated his comments regarding approval of the Comprehensive Plan amendment prior to the Service Plans was based on the Planning Commission recommendation, as well as the advice of Chris Fellows. He stated it is becoming more common and is preferable to have Service Plans considered and approved concurrent with zoning. Mr. Morrison stated he does not disagree; however, with the Comprehensive Plan amendment scheduled before the Planning Commission in two weeks,he is uncertain how to keep the Service Plans from becoming the basis for recommendation for denial. Mr. Morrison stated he would rather see the Service Plan approval later; however, he is not sure how that would be addressed in the Comprehensive Plan process. He stated if there is a process that would work, discussion needs to occur to allow both processes to be meaningful and completed in an order that makes the most sense without them both being used against each other. Mr.Mueller stated the Comprehensive Plan amendments and the criteria for amending the Comprehensive Plan do not require that all services be in place, simply that there be the potential for services; and his comments were directed to the time of the zoning, which would be anticipated to be some time later. He reiterated zoning is the point at which the vesting occurs for land use, and he has experienced cases where the Service Plan is considered concurrently with the zoning issue. Mr. Morrison reiterated that in conversations between the applicant and Planning Services staff, the applicant was told to get the Service Plans approved, therefore, staff cannot now suggest that approval of the Service Plans hinge on the approval of the Comprehensive Plan. He stated the two issues cannot continue to circle together,and approval of one cannot be contingent on the approval of the other, because neither could then go forward. Chair Geile stated the Board has heard the testimony by Mr. Warden about the cost of services to the County and about the timing of the schedule for the Comprehensive Plan amendment versus Service Plan approval. Responding to Mr.Warden, Mr. Morrison stated, ideally,the Service Plan would more preferably be heard later,in conjunction with the Change of Zone; however,that is not the way it is set up. Commissioner Jerke questioned whether there is any indication that the passage of these Service Plans vest the Board at any level or perception what the applicant may expect regarding approval of land use applications. Mr.Morrison stated the word"vest"has several specific meanings. He explained Legislative vesting can only occur under our Code at the Change of Zone and common law vesting requires some activity in reliance upon a decision,such as actual earth moving to create a vesting, therefore, this action does not create any kind of vesting of property rights. He further stated the record is clear that, because of the comments made, the applicant has recognized there are still 11 more steps left before final approval. Responding further to Commissioner Jerke, he stated if not approved at this time, the Service Plans could be brought up again;however, it would create a greater complication for the Comprehensive Plan amendments, because instead of having a way to accomplish service,the Board would have something that had 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 13 been voted down. Therefore, the Planning Commission would likely say if no Service Plan, no service districts, no services, they could not find a basis for approving a Change of Zone. Mr. Morrison reiterated the applicant can come back and reapply;especially since this technically is not a land use decision, therefore, they do not have to go through the Substantial Change process. Responding to Chair Geile, Mr. Morrison stated if it is approved today,the Board is accepting this process as the means of providing services,while the Comprehensive Plan amendment would be much better to deal with the impacts outside the district. Responding to Commissioner Jerke, Mr. Paulson stated he appreciates hearing the dialogue, especially since they have been struggling with it since 2004. He stated Resource Colorado's Service Plan says it cannot be a retail provider of water,therefore,the creation of a provider district is necessary in order to prove they can provide water service. He stated if the Service Plans are not approved at this hearing, they will be caught in the dilemma of appearing before the Planning Commission in two weeks without being able to show that the services can be provided. Mr. Paulson stated that without at least a conditional approval,they cannot show that the services can be provided, therefore, leaving no reason to change from Agricultural Zoning. He stated the applicant would agree that there be no issuance of bonds until the Change of Zone is approved; however, some form of approval is necessary,and without some specific format to present to the Planning Commission,everything is speculative. Responding to CommissionerJerke, Mr. Paulson stated, this would validate the Service District as a water provider, and he stated the 208 Plan has been tentatively approved,conditioned upon the Comprehensive Plan amendment. Responding to Commissioner Masden, Mr. Morrison stated if the Condition proposed by the applicant were to be approved, it would preclude them from issuing debt,although the Districts would still exist; however, as proposed by staff the Districts would be more crippled,although some shell of the District would be in place. Mr. Paulson reiterated that the action taken by the 208 Water Agency was expressly on the approval of the Comprehensive Plan change, and they are simply trying to mirror that approval. Responding to Commissioner Vaad regarding the proposed language on the applicant's Conditions, Mr. Reutzel stated the correct date for the application of the Comprehensive Plan amendment is July of 2005; however, Mr. Mueller suggested using the date of October 19, 2005, which is the date the application was complete. Commissioner Vaad stated these Service Plans represent a thoughtful and planned approach to an imminent surge in Weld County because of the growth that is occurring; the applicants proceeded on good faith after the Board gave instructions for the proper order of submittals; the proposed,modified conditions seem to address the four conditions requested by staff;and the issue of water is outside this process,since those decisions were made prior to this date. Commissioner Vaad stated if the changes to the Comprehensive Plan are not approved,the applicants would only lose their fees to this date. He also stated the Facilities Improvement Fee and the Transportation Impact Fees in the area do address Mr. Warden's early comments. Commissioner Jerke stated he is also looking favorably upon this request. He stated it is a simple water question at this point, and the water of approximately 4,500 acre feet, is from a closed, non- tributary basin which can be extracted and used to exhaustion. Commissioner Jerke stated he believes it is better to use it here in Weld County,specifically south Weld County,rather than have it go somewhere else. He stated water is becoming a lot like land, it tends to follow the highest and best use. Commissioner Jerke stated under these Service Plans, the provider is sanctioned and the provider of water through these Districts. He reiterated it would allow the Planning Commission to give it a fair take,since by its approval,the Board would find that the water provider is legitimate. 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 14 Commissioner Masden stated the area is definitely in an area of transition, and while most growth has been occurring in the southwest area, and north around Windsor, it appears to be moving onto the 1-76 corridor,therefore,it will have a tremendous impact on the area in the future. He stated this community would serve many in the Metro Denver area; however, it is only 19 miles from Greeley. Therefore, he concurs. Commissioner Long stated he agrees, and the Service Plans heard by the Planning Commission have been refined and clarified in the revised Service Plans which are being considered by this Board. He stated this is a step towards a decision. Commissioner Long stated there are many more approvals required before this entire project is completed, allowing for mitigation of any concerns that may occur,and allowing due deliberations to ensure the project affects citizens only in a positive manner. Chair Geile stated that if you look solely at the numbers,the argument can be made that it might not be practical to approve the Service Plans;however,it is difficult to project growth, although there is enough testimony that shows growth will occur in the area. He stated sanitation and water services have been spelled out,street improvements,safety and protection,transportation, mosquito control, parks and recreation, television, limited fire, have all been defined as services to the area. Chair Geile further stated that if all this happens, the impact will be on the surrounding property owners who are not in the Districts; however,those issues will be dealt with when the Comprehensive Plan amendment and land use application are being heard. He stated the Service Plans do adequately recognize the plans of the developer; however, he would like to see a dissolution agreement included as the Districts are completed. Chair Geile asked that language be included later to define how the dissolution will occur, and that the County will not take over the services. Commissioner Vaad requested clarification of whether staff agrees with the Conditions of Approval proposed by the applicant,with the date changed to October 19,2005,to replace the Conditions of Approval proposed by staff. Mr. Mueller stated the applicant's Conditions do not include a time line; however, staff had suggested two years. Commissioner Vaad stated the Condition requires an amendment to the Comprehensive Plan, and Mr. Paulson stated they would agree to a two-year period of time for the Comprehensive Plan amendment to be approved, if necessary. Mr. Mueller stated the inclusion language in regards to Weld County Road 49 is also outstanding. Staff would like clarification of how much could be included without it being a Substantial Change to the Plan. After discussion between the applicants,attorneys,and Board members, Mr. Farkas suggested the language should be left as it is in the Service Plan, and addressed during consideration of the Change of Zone or final approval of the land use application,since there is not enough information to ensure the wording is correct at this time. Responding to Mr. Mueller, who felt the language is too broad,Ms.McGeady suggested a fourth Condition of Approval stating if the developer made road right-of-way improvements which are outside the boundaries of the District,specifically down Weld County Road 49 to connect with 1-76, it would not require a change. After further discussion, Mr. Morrison stated the right-of-way would not have to be included to participate, and Ms. McGeady restated Condition#4 to read,"The Service Plan shall be revised to state that the Districts shall have the ability to participate in the financing and construction of any transportation or road improvements that are off-site, which are required by the County to service the development within the Service Area." 2006-0454 SD0126 HEARING CERTIFICATION - PIONEER REGIONAL METROPOLITAN DISTRICTS SERVICE PLANS PAGE 15 Commissioner Vaad moved to approve the Service Plans for the Pioneer Regional Metropolitan District(Service District)and Pioneer Regional Metropolitan Districts No. 1 through No.6(Financing Districts),with the Conditions of Approval presented by the applicant,changing the date in Condition #1 to October 19, 2005, and adding Condition #4 as stated by Ms. McGeady. Commissioner Masden seconded the motion. Responding to Chair Geile regarding dissolution,Mr.Morrison stated Condition of Approval#3 covers dissolution,since the Service District will either go out of existence or continue to exist with no ability to authority. Responding to Mr.Warden, Mr. Morrison stated by approving the draft resolution with the Conditions of Approval, the nine points are included. Commissioner Vaad clarified that the addition of Condition#4 was to allow the District to participate in improvements determined to be necessary by the Board through further land use matters, and nothing more. Mr. Morrison stated that is clear to everyone. Chair Geile requested a roll call vote for each district; each of which passed unanimously. This Certification was approved on the 13th day of February 2006. APPROVED: =OARD OF +OUNTY COMMISSIONERS ELD COO TY, COLORADO I °• _ ATTEST: /��. .►�I t '% :� �I �.�� `/ ! ,chr pies„ Weld County Clerk to the B� `� BY: ' tiu' 4 164( 2° G�,/ David E. Long, Pro-Tem D uty CI k to the Boardd, Jerke TAPE #2006-03 and #2006-04 Wes._ Robert Q. Masde:jurs Glenn Vaad 2006-0454 SD0126 EXHIBIT INVENTORY CONTROL SHEET Case - PROPOSED PIONEER REGIONAL METROPOLITAN DISTRICTS Exhibit Submitted By Exhibit Description A. Planning Staff Inventory of Items Submitted B. Planning Commission Resolution of Recommendation C. Planning Commission Summary of Hearing (Minutes) D. Applicant Notice of Hearing E. Don Warden Updated memo (2/3/06) of recommendation F. Planning Staff Applicant Response to updated comments G. Applicant Proposed Conditions of Approval H. Planning Staff Power Point Presentation I. Applicant Power Point Presentation J. K. L. M. N. O. P. Q. R. S. T. U. V. Q NJ o - % it OggZi : 0 cn \J O O �. j 0 � � \ c � : OC.) it; W a , w Ai o Oct --II'. ' \ re N r z n _ 3 1 Ill CC 0 LI U D W m U J) GCG 1� Z m V N r y U \I �l O u. W 2 i )"� �J U LU 0 °a' 2 � -On 3 .o N I- Q a E W 3 v.-; VI t\c R kr a O co n 0 Z ` . 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