Members Present: The following Directors were present and acting:
- Ron Krall, President
- Gary Osteen, Vice President
- Brock Knez
- Ash Lesniak
- Dusty Atkinson
Assistant District Manager:
- Kasey O’Halloran
District Manager:
- Jodi Lightfoot
Guest:
- Mary Andre, CDC Engineering
- Melinda Sherman, Sharp, Steinke, Sherman & Engle
- Mitch Wallerstein, Timber’s Resident
- Mike Lomas, Timber’s Resident
Call to Order: The Regular Meeting of the Board of Directors of Timbers Water & Sanitation District was called to order by President Ron Krall on March 5, 2018 at 5:44 pm, noting a quorum was present.
Minutes: The Board reviewed the regular meeting minutes of the February 2018. Upon motion duly made by Ash and seconded by Gary , it was
RESOLVED to approve the meeting minutes.
Financials: Approval of February Financials is tabled until next month when the auditor’s adjustments should be completed. Ron would like to look at each meeting separately next month.
Invoices: Invoices for February 2018 were reviewed. Ash would like Kasey and/or Jodi to review the CDC invoice before payment. Upon motion duly made by Ash and seconded by Brock and unanimously, it was
RESOLVED to approve payment of the open invoices.
Transfer of funds from TWSD to TWSWA Enterprise:
None needed.
Public Hearing: Ron called the public hearing portion of the meeting to order. A resolution to create three subdistricts within the Timbers Water and Sanitation District was proposed. Ron stated that this resolution has created a lot of interest in this topic and he wants to thank everyone who has expressed their opinions and thoughts. On behalf of the Board, Ron apologized to members of the District for the short notice of the resolution. Due to the Election timeline, this had to be done. Ron also apologizes for the complexity of this issue and that after the discussion tonight, it should be much clearer.
Ron stated that this resolution was brought to the table for action tonight because TWSD has three distinct service parts. The parts are broken into the Timbers Village and Timbers Condos area, Timbers Preserve and three properties that receive no service from the Timbers Water and Sanitation system. Melinda recognized that the Lomas Subdivision and Sky Valley Subdivision must be added to the legal description within the resolution. Jodi asked how the Timbers Village open space is handled and Melinda stated it is exempt from taxation. The first grouping receives water and sanitation, the second grouping receives just sanitation and the third receives no services from the TWSD. In 1999, the District applied to the Assessor office to create different tax districts to recognize the different service levels for different properties. Unfortunately at this meeting, the proper procedure was not followed to create the subdistricts which needs to be done to properly tax the district locations in different ways. This has been brought to everyone’s attention because the sanitation loan will be forced to be paid off by the entire district, regardless of service. With a subdistrict being created for just sanitation services, the properties owners in the sewer subdistrict will use taxes to pay taxes to back the sanitation loans. Ron then opened the floor to questions.
Dusty asked if the no service lots cost the District anything and Ron stated no, they cause no cost to the District at all.
Dusty asked what happens if everything goes through tonight and the ballot measure does not pass. Ron and Melinda stated that if the ballot measure does not pass, TWSD cannot use taxes to pay off the sanitation system debt. TWSD would then have to tax every single lot at the same tax rate to pay off the $2.07mil and would still be short $1.5mil. TWSD would have to do another ballot measure in November to get authorization to pay the $1.5mil back OR use revenue bonds which are paid off through fees. The service fee could be done in anyway equitable. So if we charged an equitable fee, the Availability of Service fee would be half the charge of the sewer fee.
Melinda stated that the 3 sub districts must be created or tax everyone uniformly. Mill levies that are currently on the water and sanitation properties are higher than on the properties that just have water. In 2012, a ballot measure was created to increase the amount of money brought into the district in Mill Levies.
Is there an option to do a tax credit back to the Timbers Preserve? Melinda’s bond counsel doesn’t believe that would work financially. Ron doesn’t believe that would be acceptable by the Preserve homeowners as they would be depending on the Board to reimburse the homeowners every year for the next 30 years.
Ash asked why the subdisctricitng doesn’t require voter approval and Melinda stated that it is in the Statues that way. First, the Resolution would pass at the Board level, it will then be submitted to the County for approval, if they don’t approve it, it could include jumping through more hoops and going through court. Melinda does not believe that it will be denied by the County as they originally proposed it to the Board in 1999.
Mike is wondering if he is a Condo owner, when the sanitation system is complete, will he be priced out of his home? Everyone at the table agreed. Ron stated that you either have a district where everyone pays for what they get or you have a uniform payment on everyone which will induce a revolt.
Gary wanted to know how much is the jump in price that the $3.5mil will cause on his property taxes. Dusty stated that he was surprised it wasn’t higher. Mary stated the remaining amount that is needed would come from Grants hopefully. All of this was summarized in the memorandum Ron sent out to the Board.
Ash wanted to know why we can’t wait until the November election. We can’t accept the Loan we have applied for already or accept any new loans until the legal counsel can approve and sign off that our District is complying with all of the laws.
Melinda spoke with the Bond counsel and stated that the District could continue forward with the already approved $2.07 mil.
Mike stated that if we know we need a new sanitation system we have to go forward otherwise the state will shut us down. Melinda stated that the subdistricts must be created first then the Board can vote to pass a Resolution on how much to get in voter approved debt . Jodi proposed going forward with the sanitation system, having everyone paying it off with the already approved $2.07mil and then get a new resolution passed to paying off the remaining wastewater treatment facility by just the sewer subdistrict.
Brock is wondering if the water is set up equitably and wants to adjust the water fees to pay for the sanitation fees. Ron stated that the Timbers Preserve is paying for the water debt just like everyone else is. The fees are assessed by EDU’s.
Dusty would like to know how far back this would set the timeline. Dusty believes the Condos won’t agree to go forward on the May election. Melinda stated the TABOR pros and cons that will get sent out will help explain to the community the situation.
Jodi asked if we can reapply for the loan with the Disadvantaged community status. Mary stated the last option would be in June. Mary stated that the PEL came back at 10 but CDPHE has required that our design will continuous meet 10. Mary has tried to hold off on Denitrification design but they won’t allow for it. Jodi spoke to Greg Winkler and he suggested not asking for more money in a Ballot Measure so that when the District can’t afford it the State will have to come back and lower regulations. Jodi stated that the District also has a limit for what they can pay. Mary doesn’t believe she has ever seen CDPHE back off.
Ron asked if there were any more questions and Ash asked Ron to read off a paragraph from March 13 2017 minutes. Ron summarized that meeting and stated that this is what brought this whole issue to light. The previous bond counsel and Melinda then came to realize the District has been inaccurately establishing Mill Levies.
Mitch spoke up stating that there is no other option but to create the SubDistricts as this all has to go forward to get the WWTF complete.
Dusty asked if our loan application will be affected if there are less ‘payers’ without the Timbers Preserve. Mary believes that has already been taken into consideration on the Loan eligibility. Dusty asked with the 3 subdistricts, which will only change the process going forward, not change anything in the past? Correct.
Melinda commented that if the resolution is to be passed, someone needs to state that the description of the water and sewer needs to be amended to include the Sky Valley Subdivision and Lomas Subdivision.
Gary is wondering if we will be owing anyone money since we have been doing this wrong in the past. Melinda has been researching it but does not know the answer. Melinda explained that what we are doing now is just proposing to go forward, legally with what we have already been doing. Mary asked what was not legal about the former process. Melinda stated that the form in which they created the subdistricts was just not the right process. Melinda stated that she believes the 2.07mil will still be on the table, regardless if the subdistricts pass.
Old Business: DOLA Grant Hearing – This hearing is on Tuesday next week. DOLA has made arrangements for Ron to make a short video to present at this meeting. Jodi asked that a Board member attend. Dusty stated he could be available. Jodi and Dusty stated they will attend together. Jodi will meet with Mary to walk through anything she should be prepared for. Ron will speak with Mary about his presentation. (ACTION)
Design Issues – Mary is working with CH2M on the denitrification design. They are working on a summary on the future design that they will propose to the Board in the future. Mary said there are two ways of doing the denitrification so they are considering all of the options. At the next meeting, the Board will need to decide when to put the sewer project to bid.
Property Acquisition – Nothing new to report
District Manager Position – The Board reviewed duties proposed for the District Manager and Onsite Manager. The Board recommended the following duties be added to the District Manager position: Preparation of briefing papers for HomeOwners Association Meetings; Preparation of regular briefing papers for District Members; Oversight of CDC and other contractors. The Board recommended the following duties be added to the Onsite Manager position: determine when fire hydrants need to be plowed free of snow. The Board also recommended the Onsite Manager only needed to attend the Board meeting once a quarter or less, at the discretion of the District Manager.
The Board authorized its President to negotiate contracts with Kasey O’Halloran and John Fitzgerald for the District Manager and On-Site Manager positions, respectively, effective April 1, when Jodi Lightfoot will formally resign.
Fire Hydrant Project – Mary will get the number on what it will cost to complete the Lomas Hydrant for the Board at the next meeting. Kasey and Mary will email to figure out when/how to start the project. (ACTION)
Woolverton Letter – Table this discussion until meeting.
New Business: Resolution to Create Subdistricts– Ron moved to pass the approval of the Resolution as amended with the legal description of the Lomas and Sky Valley properties. Gary seconded the motion. Discussion ensued. Dusty agreed that he would feel the same way as the Timbers Preserve. Gary agreed he would vote for the approval to keep the process moving. Ash voted “no” because he felt like more time was needed to explore the legal implications & the pros/cons of the decision (including the Board’s liability ) and that he felt all members of the district should help shoulder the costs of the sewer system. In the case of the Preserves directly Ash stated that he didn’t believe they should pay the full estimated 40% but maybe there was a percent that we could all agree they should cover. Ron agreed that the Board is in its best position to have the subdistricts for future use. Melinda explained that there is a water subdistrict, sewer subdistrict and a no service subdistrict. Ron called for a vote for the approval – Ron, Brock and Dusty were in favor, Ash and Brock were opposed. The motion passed.
Resolution for Sewer Subdistrict to take on debt – A resolution has been proposed for taking on $3.5mil by just the sewer subdistrict. The resolution approved last time was approved for everyone to pay for the additional $1.5mil. To pass this tonight, the Board would have to also have to amend the SRF loan application. Mary stated that the SRF Loan is to be used for the DOLA grant match that we are currently applying for so the timing is very tight. The Resolution has to be passed tonight to get certified on the Ballot by Friday. Ash proposed going forward with the $2.07mil now and then amend the loan in May after the vote. Ron stated that the risk of having only the $2.07mil approved is losing the Disadvantaged Community Status. Jodi stated that then we could go through USDA at 2% for 40 years. We could amend the Ballot Measure to have the $2.07 to be paid for by the sewer subdistrict. The Board would then be responsible for convincing the community to pass the Ballot Measure. Ron stated that the reason for the $3.5 mil is because we need to get the grant done and take advantage of the disadvantage community status. This would signal to the state that the Board is ready to go. Ron said he believed in the past that keeping the debt at $2.07mil was leverage instead the state has now shown they believe it is the board not committing to this project. Ash suggested using the $2.07 for the sewer collection project and then go forward with asking for more voter approved debt.
Ron thinks it is a good idea to ask the voters to reapprove the $2.07 for the subdistrict and see what the State will allow when we aren’t able to get the additional money.
Ron motioned that the resolution be amended for the total amount of $2.07mil to be paid for by the sewer subdistrict and it was seconded by Dusty. Motion passed unanimously.
Rescind the previous Resolution – Dusty motioned to rescind the ballot measure that passed in the February meeting, Ron seconded and it passed unanimously.
With business concluded and upon motion duly and unanimously approved, it was
RESOLVED to adjourn the regular meeting the Timbers Water & Sanitation District Board of Directors at 9:15 pm, this 5th day of March 2018.
Respectfully submitted,
Kasey O’Halloran
Assistant District Manager
Timbers Water and Sanitation District