HomeMy WebLinkAbout20194153.tiff HEARING CERTIFICATION
RE: CONSIDER SERVICE PLAN, MET19-0001, FOR REAL WELD 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-Tern
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 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 Real Weld Metropolitan District.
• Bob Choate, Assistant County Attorney, made this a matter of record, provided a brief
explanation of the subject parcel and designated inclusion area owned by 70 Ranch, LLC, in
relation to a soccer complex, and cited the review criteria for the record. He also referenced his
initial referral response recommending denial, as well as his subsequent comments that can be
addressed with appropriate conditions of approval. Mr. Choate addressed clarifying questions
from the Board, stating the edits suggested in the draft Resolution were added subsequent to the
Planning Commission hearing.
El Diane Miller, Miller and Associates Law Offices, represented the applicant and introduced
Ronald Von Lembke to make the formal presentation.
le Ronald Von Lembke, Real Weld Chairman, provided a brief summary of his background
and qualifications, the vision for the sports complex, and he introduced Jared Spires, Real Weld
Chief Operating Officer, and Marcus Hass, Board member. Mr. Von Lembke highlighted the need
and intended services to the citizens of Weld County and displayed a PowerPoint presentation,
including a promotional video. a He discussed the plan to identify potential service areas,
contract with other Metropolitan Districts through Intergovernmental Agreements, purchase
additional land and facilities, work with local jurisdictions to expand the program, and contract with
private developers to design/build programs to meet the needs of the community. He reiterated
the plan to create infrastructure in preparation for future development, and establish fees and
taxes for services which teach life lessons through sports. Mr. Von Lembke stated the vision is
to establish a sports complex which will enhance the quality of life for county residents, with
coaches and leaders who bring experience and encourage academic excellence. He explained
the Subsurface Irrigation Efficiency Program (SIEP) design with an artificial turf field requiring less
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water for irrigation, allowing year-round practices, aiming to be an economic contributor in Weld
County through the hosting of the largest tournament west of the Mississippi River. He stated he
plans to keep the County informed of the organization's successes and goals for the future.
---� Jared Spires, Real Weld COO, stated they have learned valuable lessons through the
development of previous facilities concerning the potential for other sports, drainage
considerations, expectations of future athletes, the benefit of highly qualified coaches resulting in
higher rates of collegiate placement, and life lessons for professional development.
• Ms. Miller displayed a slide titled: "Requested Revisions", showing updates to the assessed
valuation to include the initial boundaries, as well as additional language to Section 5.A - Powers
of the District, to address referrals from local water districts and clarify the district will not usurp
existing service providers. She further stated they are willing to obtain and provide engineer-
stamped drawings to satisfy the concerns of the County Attorney's Office. Ms. Miller referenced
the list of services in C.R.S. §32-1-1004(2), and explained they are requesting the Metropolitan
District type to build the internal road and bring in water and sanitation services for the proposed
complexes, and they would be willing to add a specific statement to the Service Plan to avoid the
creation of any overlapping districts.
Doug Dennison, High Point Resources Corporation, stated he has no argument against the
location of the premises for the athletic programs; however, he did express concerns with the
impacts of an additional Metropolitan District assessing 55 mills, above and beyond the millions
of dollars already paid in ad valorem taxes. He referenced the letter from Kirk Mueller (marked
Exhibit C), and stated they are not opposed to paying taxes, but the proposed tax levy is too high.
He explained the surface estate is owned by the applicant; however, the minerals are
owned/leased by numerous individuals and operators who have not been included in the review
process, nor approached to determine if they need the services offered or whether they desire to
be included or excluded.
JE Kirk Mueller, Attorney, represented High Point Resources Corporation and Bonanza Creek
Energy, Inc., and stated although his clients support soccer and future sports programs, their
primary concern is the high mill levy and lack of input. He referenced the Sand Hills Metropolitan
District, approved by the Town of Lochbuie, which was transferred to the 70 Ranch property, and
stated they filed litigation concerning the status of minerals as Real property and that issue is
pending with the Colorado Supreme Court. He described similar circumstances involving the
Beebe Draw Metropolitan District, and it now appears to be happening again for a third time in
which the applicant is seeking to include the mineral production they do not own. Mr. Mueller also
expressed concern with the limited information in the Service Plan, which does not address all
the other infrastructure, as well as legal problems due to modification of the plan. He asserted
the only reason the site was selected was to gain the advantage of oil and gas tax revenues by
including the 70 Ranch property. e Commissioner Conway commented that if this matter is
not taken up by the Colorado Supreme Court, then there will be no change to the current District
Court ruling. Mr. Choate confirmed the notice meets the statutory requirement, which does not
require mineral interest notification. Mr. Mueller stated the plan identifies other property which is
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not included in the original notice; however, Mr. Choate clarified the subject of this hearing is
specific to the 102-acre property owned by the applicant, but the plan does allow for voluntary
inclusion of any land without further approval by the Board and it is not clear whether they have
to give notice to the public, other than 45-days' notice to the Board. He explained the litigation is
attempting to address the question of whether mineral interest owners are involved, but the
Colorado Revised Statutes (C.R.S.) only address "territory" and petitions for exclusion have noy
been received, other than the concerns expressed regarding taxing mineral interests. Bruce
Barker, County Attorney, and Mr. Mueller discussed that C.R.S. provisions do not address mineral
interests; however, C.R.S. §32-1-401(A) addresses "Real" property for voluntary inclusion and
the pending litigation is asking the Supreme Court to rule that Real property includes mineral
interests. Mr. Choate noted the financial analysis was for up to $25 million, and he questioned
whether that would change if the mineral interests were excluded. In response to Chair
Kirkmeyer, Mr. Choate stated, if approved, the district can incur indebtedness up to $25 million;
however, an amount more than that requires Commissioner approval. Responding to
Commissioner Conway, Mr. Choate clarified the plan identifies the inclusion area and that any
property owner can petition to be included without notice to the Board of Commissioners. In
response to Chair Kirkmeyer, Mr. Barker reiterated C.R.S. §32-1-401(A) includes "mineral" as
Real property for voluntary inclusion, and the notice provisions address the description of the
"territory" for the formal boundary. Mr. Barker clarified the voluntary inclusion is determined by
the District Board, not the Board of Commissioners. He stated the applicant's intent is to include
16,000 acres of the 70 Ranch property without notice to the Board of Commissioners, based on
the opinion that it does not materially modify the application.
El Robert Lembke, property owner, stated if the district is approved and properly formed, he
will be donating 35 acres of land at the intersection of U.S. Highway 34 and County Road 63 near
the Town of Kersey. In response to Chair Kirkmeyer, he clarified that while the owner of 70 Ranch
has not agreed to include the entire 16,000 acres, yet they followed the standard form for the
Service Plan to address the entire property.
IR Kathy Naibauer, Kersey resident and representative of the Central Weld County Water
District (CWCWD), stated the CWCWD was a referral agency for both proposed Metropolitan
Districts and their primary concern is the potential conflict, as they are a potable water provider
for the 16,000-acre 70 Ranch property. She stated the applicant made comments at the Planning
Commission hearing indicating the area communities lack adequate infrastructure; however,
Intergovernmental Agreements are in place with those communities for potable water. She further
stated the CWCWD was not notified of this hearing, therefore, she requested this matter be
continued to allow their attorney adequate time to review the requested additions. Mr. Choate
clarified the proposed revisions and referenced the additional drawings which need to be stamped
by an engineer to demonstrate the additional fields and facilities. Commissioner Conway stated
the statutes clearly prohibit the duplicate provision of potable water unless the existing district
consents.
Ms. Miller stated that at each judicial level of the litigation, the courts have rejected the
argument that oil and gas interests must be notified in order to include property in a special district.
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She stated the statutory provision cites ". . . real property capable of being served by the district,"
and obviously, minerals beneath the surface cannot be served by a special district. She stated
the applicant has met the notification requirements and explained the CWCWD did not receive
notice because it is not a Title 32 district; however, at the discretion of the County, they were
provided the opportunity to submit referral comments. She further stated the Service Plan is a
guidance document and does use the word "may"to allow for flexibility in the future, and the model
service plan does identify certain properties for future inclusion. She noted, if the applicant
exceeds the initial parameters, they must come back before the Board for a material modification,
and any petitions from property owners for inclusion must be authorized through the Court. Ms.
Miller stated, generally, the oil and gas industry has said they are happy to pay taxes, but they
still want to opt out from certain local taxing authorities. She stated it is not appropriate for any
taxpayer to pick and choose which taxes they desire to pay.
le In response to Commissioner James, Mr. Choate reviewed the Service Plan criteria.
Ms. Miller stated the proposed Metropolitan District will have the power to provide water, sewer,
streets, storm drainage, mosquito control and park/recreation services. She stated they
previously conducted a multi-county study to determine the need for a regional park and
recreation service in the northern Colorado front range; however, it was not conducted as a part
of this specific application process. Responding further to Commissioner James, she confirmed
they have also submitted a Service Plan to Douglas County, and although a portion of the funding
generated from the 16,000-acre parcel may be used in Douglas County, it will be subject to the
terms of an Intergovernmental Agreement which has not yet been drafted. She reiterated the
study was done concerning areas that would be of most benefit, and Weld County was identified.
Commissioner James requested a copy of the study justifying a financial obligation of up to
$25 million from Weld County taxpayers.
In response to Commissioner Conway, Mr. Von Lembke stated nothing similar exists in
northern Colorado.
ID In response to Chair Kirkmeyer, Ms. Miller confirmed the mineral interests are severed and
the Model Service Plan identifies the initial boundary (102 acres), and there is a provision for
inclusion of the secondary boundary (16,000 acres of 70 Ranch), but any property other than that
would be considered a substantial modification and require a hearing before the Board of
Commissioners. Mr. Barker stated the entire inclusion area is defined as the service area,
therefore, any future inclusion will not require notice to the Board of Commissioners. He clarified
the notice identified the initial 102 acres, but approval of the Service Plan would allow for future
inclusion of the additional 16,000 acres without being deemed a substantial modification or
requiring further notice to the Board of Commissioners.
At the request of Chair Kirkmeyer, Mr. Barker cited C.R.S. §32-1-1004(2) for the record and
detailed the services provided by a Metropolitan District. Responding to Chair Kirkmeyer,
Ms. Miller clarified they anticipate that the Real Weld Metropolitan District may need to construct
water and sewer line facilities, without necessarily providing the water service if it is already
available in the area. She further stated a District may provide service outside of its boundaries
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in order to fulfill the requirements of the district, and clarified it is not an eminent domain issue. In
response to Commissioner Conway, Ms. Miller confirmed their plan does include mosquito control
as an important aspect of the proposal.
Responding to Chair Kirkmeyer, Mr. Von Lembke stated he does not anticipate the soccer
complex will cost the full $25 million; however, the plan reflects the full potential and, once
approved, the District Board will establish a prudent mill levy. Regarding the request for a
continuance from the CWCWD, he explained the maps were provided in the initial plan and
reflected the site location and layout, and the update simply includes better maps that need to be
signed. He agreed the plan does allow for some flexibility, but it is not good business sense to
build something that hasn't already been reviewed and approved by the Commissioners.
el Commissioner James commented the applicant is asking for approval to establish a district
that will collect and spend taxpayer dollars, and he questioned how many people justify the need?
Mr. Von Lembke stated this is a forward-looking plan which intends to construct and have the
necessary infrastructure in place in anticipation of future growth. He stated a demographic study
was conducted and referenced but it was not formally presented with the application materials.
Commissioner Conway stated one study showed an enormous need moving forward.
El Following discussion amongst the Board, Commissioner James stated he has not seen any
evidence proving the existing or potential need for the service.
in Chair Kirkmeyer commented if the taxpayer is the property owner of the district, and they
propose to tax themselves, that is not a problem; however, she expressed concern with the
inclusionary property and whether there was proper notification to all Real property owners,
asserting mineral interests are Real property and are taxed as such. She further stated, since
the minerals are severed, the applicant does not have the authority to include anyone else's Real
property, and she also mentioned concern with the potential for assessing 55 mills. She explained
a Metropolitan District is considered a political subdivision and there does need to be an element
of trust. She questioned whether there is any ability to condition any inclusionary property with a
different mill levy cap to meet only the needs of the facility and expressed concern with the
potential for tax money generated in Weld County to be utilized in Douglas County. El In
response to Chair Kirkmeyer, Mr. Barker stated there is no provision in state Statute or Code that
would allow for varying mill levies. He clarified the current plan includes every provision within
the Statute to provide all the services listed, not just the soccer facilities, which is not a provision
of the standard form; therefore, the Board could impose a condition requiring the mill levy and
revenue generated be designated solely for the cost of services provided within district
boundaries. In response to Commissioner James, Mr. Barker stated the reference to any valid,
qualifying expenses would have to be done beyond the standard plan form. Chair Kirkmeyer
indicated she wants to ensure the taxes are appropriate and not utilized outside of Weld County,
and any future inclusion should require notice to the Board. Concerning the provision of potable
water, she questioned whether that includes any other water provider, such as wells and water
associations, not just formal districts, to protect area residents.
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Commissioner Freeman agreed with the requirement of notification for future inclusions.
Commissioner Moreno stated he supports the vision of the use but agreed there are still a lot of
unanswered questions and he would like to see further studies to ensure the need for the
underlying infrastructure. Commissioner Conway stated his belief that there is a need for the
proposed use which will have long-term benefits; however, he also agreed that the cost to the
taxpayers must be addressed.
• Ms. Miller stated the applicant is willing to provide 45-days' notice to the Board of
Commissioners for any future inclusion request, which solves the issue of property owners who
may have concerns of proper notice. She stated they are also required by Statute to provide an
annual report of the budget and audit, and they are also agreeable to providing next year's budget
along with the mill levy certification. Responding to Chair Kirkmeyer, Ms. Miller agreed the
standards of the initial boundary would apply to future inclusionary properties, but there is some
difficulty with the definition of Real property and what can be included. She stated 55 mills on oil
and gas properties is well beyond what will be necessary for the provision of services to the district
within Weld County. Chair Kirkmeyer acknowledged that the proposed sports complex would
offer a huge benefit to southern Weld County, because there never seems to be enough fields or
courts available for local youth sporting events.
In response to Chair Kirkmeyer, the Board expressed support of a brief continuance to allow
the applicant time to review issues that have been raised, including: 1) notice to affected mineral
interest holders and other existing service providers within the proposed boundary, 2) evidence
of the need for a mill levy of 55 mills, 3) a provision requiring 45-days' notice for any petition for
inclusion, and 4) assurance that incurring up to $25 million dollars in debt will be spent in Weld
County.
• Commissioner Freeman moved to continue the matter to October 2, 2019, at 9:00 a.m. The
motion was seconded by Commissioner Conway, and it carried unanimously.
ell Robert Lembke, representative of the Platte River Metropolitan District, confirmed the intent
for the revenue generated for the Platte River Metropolitan District will only be used for water
facilities in Weld County. He requested the matter be heard today, and further stated the minerals
are severed, 70 Ranch still owns a substantial portion of the minerals, and if the argument
presented by Mr. Mueller on behalf of the oil and gas industry was applied, it would be tragic to
the County. He agreed that minerals are Real property; however, the owners are not required to
be noticed, which is why they have the Severance Tax. He also noted he will be traveling out of
the country on October 2, 2019, and that date may also cause them to miss the 2019 election
cycle for creation of the district, therefore, he requested the Real Weld Metropolitan District matter
be continued to early next week.
• Mr. Von Lembke agreed next week would be agreeable to help meet the election deadline.
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Mr. Mueller stated allowing extra time to review this matter makes sense, but compressing
the time based on an election issue is not everyone else's problem. Chair Kirkmeyer stated if a
provision is added requiring 45-days' notice prior to future inclusion of other properties, then the
matter before the Board would only be the initial Service Plan boundary. Mr. Mueller
acknowledged that will alleviate some of the issues, but there are still concerns.
Commissioner Conway made a motion to reconsider the matter of a continuance, which
was seconded by Commissioner Freeman, and it carried unanimously.
Commissioner Freeman moved to continue the matter to September 23, 2019, at 9:00 a.m.
The motion was seconded by Commissioner Conway, and it carried unanimously. There being
no further discussion, the hearing was completed at 12:01 p.m.
This Certification was approved on the 23rd day of September, 2019.
BOARD OF COUNTY G: �,,,/ COMMISSIONERS
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