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Home My WebLink About20194159.tiff HEARING CERTIFICATION RE: CONSIDER SERVICE PLAN, MET19-0002, FOR PLATTE RIVER METROPOLITAN DISTRICT A public hearing was conducted on September 18, 2019, at 9:00 a.m., with the following present: Commissioner Barbara Kirkmeyer, Chair Commissioner Mike Freeman, Pro-Tem Commissioner Sean P. Conway Commissioner Scott K. James Commissioner Steve Moreno Also present: Clerk to the Board, Esther Gesick Assistant County Attorney, Bob Choate Director of Planning Services Department, Tom Parko Director of Finance and Administration, Don Warden The following business was transacted: I hereby certify that pursuant to a notice duly published July 31, 2019, in the Greeley Tribune, a public hearing was conducted on September 18, 2019, to consider the proposed Service Plan for the Platte River Metropolitan District. Bob Choate, Assistant County Attorney, made this a matter of record and presented a brief summary of the proposal, which is 54 acres in size, and noted the intention for the inclusion area to expand and incorporate the 16,000-acre 70 Ranch property. He referenced the referral response from Don Warden, Director of Finance and Administration, who indicated no concerns with the Financial Plan, explaining the mill levy is dependent upon taxing of oil and gas properties. Mr. Choate explained the Board has the option to approve with Conditions or disapprove, and he reviewed the criteria which must be found to support an approval. Lastly, he noted his concern that the initial application did not provide much detail; however, based on his referral comments, the applicant has submitted additional information to ensure the proposal meets the criteria requirements. Diane Miller, Miller and Associates Law Offices, displayed a PowerPoint presentation (Exhibit D) outlining the general location, initial boundary, and inclusion area owned by the applicant or associates. She explained only included properties will have a mill levy or fees imposed for provision of services, and she clarified the Metropolitan District cannot provide water service to any property owner without prior consent of an existing water district. She stated the applicant is willing to state they will not be a water service provider to any property owner with existing water service from any other provider without the provider's prior consent. Ms. Miller asserted there is a need for a regional district with the ability to provide water on a large scale so multiple communities can take advantage of the infrastructure. { ---- Robert Lembke, owner and representative for the Special District, expressed his appreciation for the Board proceeding with the hearing, and explained the intention of the district to bring legal organization of future water infrastructure in Weld County through the proposed Service Plan. He explained water infrastructure is a challenge for small communities and water prices continue to increase; however, he clarified the intent is not to provide domestic potable water service, but cc: cTMEG'), eac& -(e,e), 2019-4159 r_=Cnw), PLCTP), aPPL R£P SD0141 O3/041 HEARING CERTIFICATION - SERVICE PLAN FOR PLATTE RIVER METROPOLITAN DISTRICT (MET19-0002) PAGE 2 rather, to capture the unofficial water groups to be stored in reservoirs at various locations which he proceeded to describe for the record. Mr. Lembke explained the engineering and infrastructure necessary to transmit the water will be funded through this Metropolitan District for the benefit of areas, such as Kersey, Milliken and Gilcrest. a He described the Section 25 Reservoir(located at Highway 34/CR 69), as well as the necessary infrastructure and water resources which will allow for augmentation of well pumping to further benefit the communities of Milliken, Kersey, Fort Lupton and Lochbuie. E Next, Mr. Lembke described the Diversion Project at the Milliken Reservoir Site, reviewed the negotiations which need to be finalized, and explained the ditches and pipelines involved. a He also provided a brief overview of the 70 Ranch Recharge Facility and the engineering work necessary to ensure the appropriate water return flows and prevention of impacts to the water table for the underground water storage project. He stated other facilities are contemplated and the proposed Metropolitan District could participate to help further serve the water needs of the region. Mr. Lembke committed to providing an Engineer-stamped report reflecting the updates to the acreage to include initial acreage. He also submitted a summary of the revisions to the Service Plan (Exhibit E), clarifying the assessed valuation, inclusion language requiring notice to the Board of Commissioners and other ancillary providers prior to any future amendments, and assurance that no funds for facilities will be utilized outside of Weld County. Ms. Miller referenced Exhibit E and noted the amended definitions of 'Service Area' and 'Inclusion Area' for the record. She stated Mr. Lembke recently purchased another property, which they anticipate will be included in the future; however, she reiterated the amended provisions stipulate adequate notice will be provided prior to inclusion of any new area. In response to Commissioner Conway, Mr. Lembke clarified full buildout of the Milliken site will provide approximately 15,000-acre feet of storage, the current 70 Ranch site will provide 55,000-acre feet of storage, the Section 25 Reservoir will provide approximately 15,000-acre feet, and he anticipates additional capacity at future sites. He further stated both agricultural and municipal users could contract with the Special District to allow for well pumping augmentation. Kirk Mueller, Attorney for High Point Resources, Inc., and Bonanza Creek Energy, Inc., asserted that if the Service Plan inclusion area contains the 70 Ranch property, then all of his concerns expressed with the previous case, MET19-0001, are the same for this proposal, stating the mineral interests will be taxed but they will not benefit from the proposed services. He further stated the 70 Ranch property does not need regional water infrastructure, and although there is a competitive market, Mr. Lembke is proposing the use of Metropolitan Districts to fund his development projects. Mr. Mueller stated the matter of whether mineral interests are subject to notice for inclusion is still pending review by the Colorado Supreme Court; therefore, this proposal should not be able to include properties they do not own without petition for inclusion. He further stated, if the Court rules in favor of the mineral interests, then there will be no funding for the projects described in the Service Plan, nor has there been any real demonstration of the need for water at 70 Ranch. He referenced paragraph 6.H of the Service Plan which indicates an assessment of up to 65 mills, versus the combined 50 mills paid to other special districts by the 70 Ranch property. Lastly, Mr. Mueller expressed concern regarding the definition of 'Service Area', which will permit the export of water to other recipients outside of Weld County. He stated the Special District Act does not reference regional services, raising millions of dollars, or providing services throughout the region based on taxes generated in Weld County. He asserted 2019-4159 SD0141 HEARING CERTIFICATION - SERVICE PLAN FOR PLATTE RIVER METROPOLITAN DISTRICT (MET19-0002) PAGE 3 that once the district is created, the Count will only receive notice if there is a material deviation from the Plan, which is hard to enforce. PA In response to Commissioner Conway, Mr. Mueller clarified the petition has been submitted to the Supreme Court and his clients are waiting for the Court to take up the case because he is convinced the Appeals Court ruled in error. As a past member of the South Platte River Roundtable, Commissioner Conway explained there is a gap of 50,000-acre feet on the Platte River, which must be augmented by 2040, to which Mr. Mueller reiterated the 70 Ranch property does not need water. In response to Chair Kirkmeyer, Mr. Mueller stated one of the requirements for the Metropolitan District is to demonstrate the need of the included properties and its inhabitants; however, this Service Plan proposes to provide infrastructure and water to communities in the region which are not within the Service Plan boundary. Responding further to Chair Kirkmeyer, Mr. Mueller reiterated paragraph 6.H references 65 mills, and speculated that if the proposed inclusion language is adopted as requiring notice, then it is very likely the applicant will comply with the notice requirement and submit the petition for inclusion of the 70 Ranch property because they need the tax revenue to proceed with the proposed development projects. Todd Bean, Weld County resident, stated he has been involved in both the water and oil and gas industries. He agreed that water is necessary, all the regions' rivers converge at 70 Ranch, and there is value to the proposed Service Plan. In response to Commissioner Conway, Mr. Bean concurred there is a water gap. Responding to Chair Kirkmeyer, Mr. Bean stated he is a member of the North Weld County Water District (NWCWD) Board. Eric Reckontine, NWCWD Board member, supported the language proposed in Condition #4.A and confirmed the Board of Commissioners does not have the authority to consent on behalf of the Water District. Kathy Naibauer, Central Weld County Water District (CWCWD) representative, reiterated the language in paragraph#5.A is more protective for the District. She further stated the CWCWD provides service to properties within two miles of the 70 Ranch property, and requested an opportunity for the District's legal counsel to review the proposed modifications prior to taking any final action. Mr. Lembke expressed concern with the position of the oil and gas industry that would make them exempt from most special district assessments and would be devastating for Weld County. He stated most of the ranching and cattle grazing on the 70 Ranch property has been destroyed by oil and gas activity, and although they still have the need for some irrigation water, a majority could be repurposed for regional needs. He reiterated that the Service Plan now requires the Board of Commissioners to receive notice of any Intergovernmental Agreements, potable water may be provided within the boundaries of the district with prior consent of existing water service providers, and any services provided outside of the boundaries will require approval by the Board of Commissioners. He stated the primary objective is to utilize Junior water rights available on the river to provide a reliable water source without drying up farms. He further stated the Appeals Courts of Weld and Adams Counties each agreed that the existing Special Districts would be negatively impacted by allowing mineral interests the ability to petition for exemption based on 2019-4159 SD0141 HEARING CERTIFICATION - SERVICE PLAN FOR PLATTE RIVER METROPOLITAN DISTRICT (MET19-0002) PAGE 4 the logic that they do not benefit from the services. In response to Chair Kirkmeyer, Mr. Lembke confirmed the services of the proposed Metropolitan District will be entirely within Weld County. Ms. Miller expanded upon the court cases referred to by Mr. Mueller, stating the Sand Hills case has been finalized and the Colorado Supreme Court did not take up the issue concerning the ability for mineral interests to receive notice prior to inclusion. Secondly, the Colorado Supreme Court has not yet decided to hear the South Beebe Draw case, and as the law currently stands, consent of mineral owners is not required for inclusion. She further stated there are other instances of a special district boundary providing services to a much larger service area. In response to Commissioner James, Ms. Miller explained the plan proposes 50 mills to cover the debt and an additional 15 mills to conduct operations. Mr. Choate stated that distinction is further addressed in the referral response provided by Mr. Warden. IEJ Responding to Chair Kirkmeyer, Ms. Miller explained the water service provided by the Real Weld Metropolitan District will be specific to the needs of the soccer complex facilities being created, whereas, the Platte River Metropolitan District is intended to be a regional and wholesale water provider with large-scale facilities to support other water providers who will, in-turn, support individual homes, businesses and/or agriculture. Chair Kirkmeyer suggested that distinction should be made clear in the Real Service Plan amendments for the upcoming hearing. Additionally, she stated the intention of entering into Intergovernmental Agreements (IGA) with other entities needs to be identified in the Platte River Service Plan,with the assurance that water service will be provided entirely within Weld County. Mr. Lembke clarified all the infrastructure will be located within Weld County to address water depletions primarily in Weld County; however, it is conceivable that some water may leave Weld County. e Commissioner Freeman commented that an IGA with the CWCWD may result in Weld water serving certain properties within Morgan County. Commissioner Conway also observed that an agreement with the City of Brighton or portions of Adams County could result in water being returned to the Platte River and flowing back into Weld County. Chair Kirkmeyer emphasized the Comprehensive Plan Goals and Policies encourage keeping water within Weld County and not drying up individual farms. Chair Kirkmeyer requested Mr. Warden review page 22 of the Service Plan reflecting 50 mills, as well as page 23 expressing 65 mills, and then she called for a five-minute recess. a, Chair Kirkmeyer reconvened the hearing. Mr. Warden explained the maximum allowed is 55 mills, which will be used to offset the debt, and the revenue generated by 10 mills will be used for operations. He confirmed the amounts are specifically identified in the Service Plan. Mr. Lembke stated he would be willing to modify the Service Plan to make it clear that the primary intention is to build infrastructure to address depletion needs in Weld County. Chair Kirkmeyer expressed concern with the generation of tax revenues with such high mill levies and requested this plan be consistent with the Real Weld Service Plan, which limits revenue to design, planning, construction, maintenance and operations. In response to Commissioner Freeman, Mr. Lembke confirmed he agrees with adding language requiring 45-days' notice to the Board of Commissioners prior to any future inclusions beyond the original 54-acre property. 2019-4159 SD0141 HEARING CERTIFICATION - SERVICE PLAN FOR PLATTE RIVER METROPOLITAN DISTRICT (MET19-0002) PAGE 5 Mr. Mueller stated the 70 Ranch property is already within the South Beebe Draw Metropolitan District and he expressed concern with the possibility of adding the overlap of this new water service. Mr. Barker stated he believes the proposed language will address that concern; however, he requested clarification of 70 Ranch and its affiliates. Chair Kirkmeyer stated the initial boundary includes the 54-acre property, and any other inclusions will require prior notice. She further stated the appropriate language can be drafted for consideration, if continued. El Ms. Miller confirmed there are two Metropolitan Districts with water service powers; however, if this Service Plan is approved, then, the 70 Ranch property would be excluded from the South Beebe Draw Metropolitan District and included in the Platte River Metropolitan District. She stated they are willing to amend the Service Plan to clarify the intent to ensure no overlapping within a single tax year. Chair Kirkmeyer reviewed the revisions requested by the applicant, including: 1) any potable water service requires prior consent of an existing water district; 2) the initial boundary is limited to the 54-acre property and any future requests for inclusion will require 45-days' notice; 3) tax revenue generated will be designated for design, planning, construction, maintenance and operations; 4) the primary purpose is to meet the depletion needs within Weld County; and 5) there will be no overlapping tax districts within a single tax year. Chair Kirkmeyer agreed there is a need and this proposal will address the water gap and serve the needs of agriculture and municipal users. Commissioner James stated he believes this is a masterful plan which will be very beneficial to Weld County. Commissioners Freeman and Conway concurred, noting it will provide more water than NISP (Northern Irrigation Supply Plan) and proposals such as this are necessary for small communities to survive, considering the vast increase in cost for water shares. Chair Kirkmeyer reiterated it is also an important part in preventing drying up farms. El Mr. Lembke stated he will be out of town and requested the ability participate in Monday's hearings via teleconference, and the Board concurred. Ms. Miller thanked the Board for their patience and diligence. Commissioner Conway moved to continue consideration of the Service Plan for the Platte River Metropolitan District to Monday, September 23, 2019, at 9:00 a.m. The motion was seconded by Commissioner James, and it carried unanimously. There being no further discussion, the hearing was completed at 2:50 p.m. 2019-4159 SD0141 HEARING CERTIFICATION - SERVICE PLAN FOR PLATTE RIVER METROPOLITAN DISTRICT (MET19-0002) PAGE 6 This Certification was approved on the 23rd day of September, 2019. BOARD OF COUNTY COMMISSIONERS W LD COUNTY, O ORADO ATTEST: dartife4) C „e,/o.4. C'Jl,�talL �C � arbara Kirkmeyer Chair Weld County Clerk to the Board W Mike Freeman, Pro-Tern BY: L I V �`� Q eputy Clerk to the Board �..:� 1 • .4 l j *1\ Sea . Conway T ,1 at °NI. t . 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