Dear Blog Readers

As voting is underway, I hope that you have found this blog site informative during the last couple of weeks, we will continue to try and provide as much information through this site as possible. I have spent the last weeks carefully considering the 2D ballot issue and its ramifications good and bad. For me it boils down to this: Do you want to fund the city from the money currently being used to prepay Metro debt? These prepayments are being done to position our community for future borrowing for renewable water. (The 2009 plan) My answer is no. The ballot question further asks that the City be allowed to ratchet up their mil levy to 19 mils in the years ahead when the Metro District is able to reduce mils as our debt is paid down with no consideration from the homeowners as to purpose. My answer is no.

I have heard compelling arguments that a no vote on these measures and no property taxes funneled from the Metro District budget means the city will run an extremely lean budget that will provide a much lower standard of service than we are accustomed to for 2009, that is true. Please do not hold any illusion otherwise.

I have also heard that a no vote means that other land owners will be less inclined to petition for annexation during 2009. That may or may not be true but a “no vote” would not preclude them from doing so. Also, that annexation would increase the City’s assessed value which would increase our revenue if a tax were imposed beyond what those properties would bring in expenses. True, but no matter how temping developers paint that picture, I suspect with today’s market any windfall from new development will not be realized in 2009.

I foresee that a no vote will further impress upon the homeowners, through limited services in 2009, that a standalone property tax increase for the current and any future incorporated property will be necessary to sustain the city. The sooner we are presented with a ballot measure from the city, that does not interfere with renewable water pursuits, the better.

The Cost of Obtaining Renewable Water

The cost of obtaining renewable water resources in the State of Colorado is rising at a rate of 10% or more each year. Obtaining a renewable water source is a complex and expensive process. In order to achieve our goals, partnerships must be developed early to share the costs of supplying water, transmitting it, storing it and treating it. Putting together the components, which include purchasing water rights and then going to court to get them adjudicated to the District, purchasing storage space for the renewable water, purchasing transmission services to get the water to Castle Pines North community, and building treatment facilities to treat and distribute the water, takes time and longterm planning. Having available funds in place to act when agreements are made is crucial. This can only be achieved with careful budgeting and building of financial reserves over years of operation. CPNMD has set in motion a plan to achieve this goal and is well on its way to completing the plan.

Renewable Water Why You Should Care

CPNMD philosophy has always been to payoff its debt as quickly as possible so that taxes may be reduced. Under CPNMD’s plan, taxes could potentially be reduced in 2013 by 8 to 9 mills due to the early payment of some of the bonds. Additionally, because the debt will have been repaid, the District and its residents should expect to save more than $2.6 million in interest expense or approximately $800 per household. Under the City’s proposed ballot initiative, if it passes a vote of the citizens, and the board of directors of Castle Pines North Metropolitan District elect to educe the current 24 mill levy, the City could then impose an equal and offsetting mill levy. If this were to occur, the District would resort to paying debt according to the payment schedules established by the bonds and taxes could not be reduced until at least 2019. Managing the revenues and expenses of CPNMD, as it relates to the current outstanding bond payment obligations, requires a carefully constructed balance of Fixed and Floating rate debt obligations. Both issuance types have been utilized to better manage the opportunity afforded by such a Financial plan for the longterm renewable water program of CPNMD. Annual prepayment of Floating rate debt allows for the planned insertion of longer term debt after the floating rate debt is prepaid which provides the best leverage for total borrowing cost reductions and debt burden containment. Constructing such a plan has utilized bond insurance and letter of credit support from major banks enabling CPNMD to borrow at the lowest possible interest rates in the market. CPNMD is an efficient operation managing its resources carefully with a low administrative overhead of just 9 people controlling an annual budget of $12 million. Longterm planning has been completed, budget projections have been prepared for the full renewable water plan and CPNMD is well on its way to completing the objectives.

What will it Cost?
tp://www.cpnmd.org/attachments/waterConservation/SpecialMailerOct2008.pdf

CPN Discusses Ballot 2D & 2E and Water Challenges

On Sunday the CPN Homeowners for a Solid Foundation hosted a citizen meeting for concerned citizens to hear a presentation on upcoming community ballot questions by Mark Shively, past president of Castle Pines North Metropolitan District. The presentation covered the Castle Pines North renewable water challenges, how the ballot questions will impact the ability of the community to fund sustainable water supplies, and other tax implications of the CPN ballot issues. In addition to serving as President of the Metro District, Mr. Shively has also served as its Treasurer, and for the past two years has served as Chair of Douglas County Water Resource Authority (http://www.dcwater.org/). His “real job” these past twenty years is that of registered investment advisor. From time to time he serves as an expert witness in his field. He has lived in Castle Pines North since 1986.

For the rest of the story go to http://denver.yourhub.com/CastlePines/Stories/Elections/General/Story~531108.aspx

When is a Tax Increase Not a Tax Increase? Only in Castle Pines North

I found this well written response to the recent Connection articles and thought it was worth sharing....

When is a Tax Increase Not a Tax Increase?...Only in Castle Pines North
The posting by Lisa Crockett on the CPN website and reprinted in Castle Pines Connection, "City Asks Voters to Consider Re-worded Ballot Questions," emphatically states seven times that the CPN ballot issues will result in "no increase in property taxes!"The article attempts to portray the new tax measures as simply technical corrections. Voters should be aware that ballot questions 2D and 2E potentially extend current taxes beyond their current expiration. As such, residents will spend more tax dollars in the future to fund city services. That, my friends is a new and additional tax and the first line of the Ballot Question tells you so.A copy of the article follows. I have added my comments and corrections in red.

For the entire article please visit http://castlepinespolitics.blogspot.com/

Ballot Commentary

The City has presented two ballot initiatives.

The 1st ballot issue 2D:
The City of Castle Pines North is requesting approval of up to 19 mills of NEW property taxes. This ballot initiative suggests that if the CPN Metro District is able to free up some taxes/mills, the City can automatically charge a NEW tax without your consideration as to what your taxes will be paying for. Currently the Castle Pines North Metro District is collecting taxes for specific purposes, providing water now and into the future, maintaining our parks and open space, and paying off the remaining $23 million of historical debt and $9 million from purchasing water storage space in Rueter Hess reservoir in 2009.

The Metro District’s taxes you currently pay are part of a well thought out professionally managed financial structure. The operations budget is lean and the remaining taxes are dedicated to only paying our current debt. As that debt is paid off, your taxes will be reduced or your vote will be necessary for these mills to be transferred to another purpose. Currently the Metro District is prepaying our debt when the interest rates are low in preparation for purchasing renewable water. Our debt must be lowered rapidly in order to borrow the necessary amount of funds for our renewable water plan.

The City is proposing that when those taxes are reduced they will automatically be transferred to a NEW permanent tax for City purposes.

The 2nd ballot issue 2E:
This is a clear attempt to bypass the obligation of the Tax Payers Bill of Rights (TABOR), a process called “De-Brucing.” The TABOR Amendment demands that governmental entities manage spending in an appropriate way. This ballot initiative will allow the City to collect, retain, and spend taxes and fees such as Franchise Fees, Tap fees, Park Fees, Grants, etc. This initiative being proposed by the City of Castle Pines North removes citizen control and gives the City the ability to spend money without direction by its citizens.

Conclusion:
It is important that each CPN homeowner carefully learn and consider the repercussions of these ballot measures. As members of one of the highest taxed communities in Colorado we need to retain a voice and control of our hard earned money and hold the City of Castle Pines North accountable for their budgetary decisions in the years ahead.

Understanding CPN's Water Plight

As these ballot issues seek funds currently dedicated to the Castle Pines North renewable water plan, it is important that everyone understand the water plight in Douglas County and the plan our Metro District has in put place.

Citizen's Guide to Denver Basin Groundwater
http://www.cfwe.org/CitGuides/CG-Groundwater.pdf

CPN Metro Districts Integrated Water Resource Plan http://www.cpnmd.org/attachments/waterConservation/FinalIWRP.pdf

From the Metro District Attorney - 10/22 still no answer from the City!

HAYES, PHILLIPS, HOFFMANN & CARBERRY, P.C.

September 22, 2008
Erin M. Smith, Esq. City of Castle Pines North Attorney

Re: Issues Surrounding Resolution No. 08-33

Dear Erin:
This letter is written at the direction of and on behalf of the Board of Directors of the Castle Pines North Metropolitan District (the “District”) in response to Resolution No. 08-33 adopted by the City Council of the City of Castle Pines North (the “City”) and delivered to the District Board at its regular monthly meeting of September 15, 2008. Because of the significance to the community of persons jointly served by the City and the District, we ask that this letter be distributed by you to the members of the City Council and that it be attached to and incorporated in the minutes of your next regularly scheduled City Council meeting so that its exact contents will be readily available for review by any member of the community

The Board of Directors of the District wishes to cooperate with the City Council in finding positive solutions to the issues that face our mutual constituents. However, any such solution will be positive only if it does not jeopardize the repayment of the District’s outstanding bonds or our mission of assuring that a renewable water supply is put in place for our community and if it is fully understood in context and is beneficial to the constituents of both governmental entities. Accordingly the District Board feels that it is only proper and in the best interest of full discussion and disclosure to all the constituents and electors in the Castle Pines North community that the following points be made and agreed to or disputed by you, and the following questions be directly and publicly addressed by you as the elected officials of the City:

1. It is the understanding of the District Board and its advisers, including bond counsel, based on discussions with the City’s legal counsel that the language used in the “FIRST BALLOT ISSUE” as identified in Resolution No. 08-33 is construed by you to mean that any mill levy reduction from the District’s current 43 mill levy that is approved by the District Board for fiscal/calendar year 2008 (for collection in 2009) will in fact constitute the maximum mill levy that may be approved by the City Council in 2008 and any future year without a separate citizen vote. Strictly as a hypothetical example, should the District determine, in its sole legislative discretion, to reduce its current 24 mill levy for debt repayment by 4.5 mills (to a new total of 19.5 mills) the City would have the right (if the First Ballot Issue is approved by the voters) to assess up to a 4.5 mill levy in 2008 (for collection in 2009) and years following. If, in that same hypothetical example, the District determined in 2010 that it needed to increase its debt service mill levy because of a decline in the District’s assessed value, increased interest rates, or other unforeseen factors (to, strictly as a hypothetical example, 22 mills), the City would continue to have the right to assess 4.5 mills. Conversely, if the District Board determined in 2010 that it could further reduce the debt service mill levy to 12 mills (again, a hypothetical number), the City would not have the right or ability to increase its mill levy to more than 4.5 mills.

Query: Is our understanding of your interpretation of the First Ballot Issue, as stated in this paragraph, correct?

2. As residents of the Castle Pines North Metropolitan District you are aware that the District currently possesses the voter-approved legal authority to impose a debt service mill levy substantially in excess of 24 mills and is obligated to do so if necessary to provide funds for bond repayment.

Query: Assuming, for the sake of discussion, the District Board reduces the current 24 mill levy in 2008, but then the District Board found it necessary to increase its debt service mill levy in any future year(s) in order to pay principal and interest on existing bonded debt, or in order to pre-pay existing debt, would the City take the position that it is legally bound to reduce its mill levy (of whatever amount) by the same amount as the District’s voter-approved debt service mill levy was increased?

3. Any reduction in the District’s current 24 mill levy for debt repayment will result in the inability, or at least curtailed ability, to prepay existing bonds. Such an event will increase the period of time during which those bonds will remain outstanding and, therefor, increase the amount of interest that will be paid on those bonds before they are retired. As a result, the District will most likely have to impose a debt service mill levy on its residents for a longer period of time than we had been planning. The full extent of this continuing and increased bond obligation needs, in the opinion of the District Board, to be fully explained to voters being asked to approve the First Ballot Issue.

Query: Will the City commit to including these facts in any information prepared or disseminated by the City for submission to electors?

4. Additional borrowing will be required in the future in order to finance the acquisition of renewable water and ancillary facilities required to transport and treat such water. The District Board has envisioned that voter authorization for such additional debt would be sought in approximately 2013, as soon as one of the District’s existing bond issues is repaid. If the District reduces its debt service mill levy in 2008 and future years, bond repayment will be delayed as described in paragraph 3 and the taxpayers will not have experienced any tax relief because the City will be imposing a mill levy equal to the District’s reduction. The District Board is concerned that this could impair the District’s ability to secure a renewable water supply.

Query: Will the City Council agree to work with the District Board in order to make clear to electors that this requirement will continue to face the entire community regardless of the outcome of the November 2008 ballot question election results?

Again, the District Board wishes to work cooperatively with the City Council for the benefit of the mutual constituents of the City and the District. The District Board is seeking answers to the above posed questions in order to get a better understanding of the First Ballot Issue and to assist in its internal discussion of a response to the request stated in Resolution 08-33. Therefore, we respectfully request your written response to the queries posed above, which are submitted to you with the expectation that full public discussion and disclosure of the potential ramifications of adoption of the First Ballot Issue will help all of us, as well as the electors of the City and the District, determine if the approval of the First Ballot Issue is in the public’s interest.

Very truly yours,


John E. Hayes
jehayes@hphclaw.com

xc. City Clerk (for distribution to Mayor and City Council)
Castle Pines North Metropolitan District Board of Directors
Jim McGrady
Saranne Maxwell, Esq.

IGA Between The City of CPN and CPN Metro District

For comments on the new CPN City and Metro District IGA please blog here.

Proposed City of CPN Budget

For comments on the newly proposed city budget please blog here.

A Letter From Our Village Neighbors

Castle Pines Preservation Association
312 Quito Pl Castle Rock, Co. 80108

September 30, 2008

Dear Fellow Residents:

It has come to our attention recently that the City of Castle Pines North is inappropriately charging residents of Castle Pines Village sales tax. As part of their incorporation Castle Pines North (CPN) passed a 2 ¾% sales tax that is applicable to purchases from the shops on Castle Pines Parkway and to purchases delivered to the residents of Castle Pines North. We recently discovered that CPN is inappropriately charging the tax for goods and services delivered to resident’s homes in Castle Pines Village.

Somehow CPN has included the addresses of the Village in their taxing jurisdiction. We have verified that the tax is appearing on bills from Verizon and other utilities for residents in various parts of the Village. This is apparent as the utilities tend to itemize the various sales taxes. Most retailers simply provide a single sales tax amount and it is the sum of state, county and city (if applicable) sales tax. This inappropriate tax rate may be appearing in the data bases used by retailers (not just the retailers at Castle Pines Parkway) for items delivered to your home such as carpet, draperies, and appliances or automobiles.

The City of Castle Pines North, Verizon and The Colorado Department of Revenue have all been made aware of the mistake and indicate they are taking steps to correct it. In the mean time you need to check the amount of sales tax on all your bills. Residents of Castle Pines Village should be charged 4% (3% state, 1% county) on all good and services delivered to their homes. Although you can apply for a refund it’s better to avoid paying the incorrect tax at the time of purchase as the refund process is burdensome.

We have requested the documents from CPN that directed the Department of Revenue to begin collecting this tax so that we can determine how this mistake was made, how long it has been going on and how widely it is occurring. Thus far CPN is not aware of what they filed and blames the department of Revenue for the mistake. It seems as though CPN has already achieved a high level of bureaucracy in less than a year of existence.


Bill Kingery, President
Castle Pines Preservation Association, Inc.
kingery2669@msn.com

City of Castle Pines North Ballot Issue 2D

SHALL THE CITY OF CASTLE PINES NORTH, WITHOUT INCREASING AD VALOREM PROPERTY TAXES AUTHORIZED BY BALLOT QUESTION 2E APPROVED IN 2007 BY THE ELECTORS OF THE CITY OF CASTLE PINES NORTH, BE AUTHORIZED TO INSTITUTE A NEW AD VALOREM PROPERTY TAX, ON ALL PROPERTY TAXABLE BY LAW, RESULTING IN AN INCREASE TO THE CITY OF CASTLE PINES NORTH OF@2,786,780 ANNUALLY (ESTIMATED FIRST FISCAL YEAR DOLLAR INCREASE), BEGINNING THE FIRST FISCAL YEAR OF 2009, AND BY WHATEVER ADDITIONAL AMOUNTS ARE PRODUCED EACH YEAR THEREAFTER, WITH SUCH REVENUES TO BE GENERATED FROM A PROPERTY TAX NOT TO EXCEED A RATE OF 19 MILLS, PROVIDED THAT THE CITY MAY IMPOSE SUCH TAX ONLY IN THE EVENT THAT THE CASTLE PINES NORTH METROPOLITAN DISTRICT REDUCES OR ELIMINATES ITS CURRENT MILL LEVY, THEN THE CITY MAY IMPOSE A MILL LEVY EQUAL TO THE AMOUNT OF REDUCTION OF ANY AND ALL GENERAL MUNICIPAL PURPOSES, PROVIDED HOWEVER, THAT THE CITY MAY NEVER CHARGE ON ITS RESIDENTS A NON-UNIFORM TAX, AND THE CITY WILL NOT LEVY MORE THAN A TOTAL OF 19 MILLS, AND SHALL SUCH INCREASED TAXES CONSIST OF PROPERTY TAXES IMPOSED BY THE CITY THROUGH ORDINANCES ADOPTED FROM TIME TO TIME, SUCH ORDINANCES SUBJECT ONLY TO THE LIMITATIONS CONTAINED I N THE COLORADO AND U.S. CONSTITUTIONS; AND SHALL THE PROCEEDS OF SUCH TAXES AND ANY INVESTMENT INCOME THEREON BE COLLECTED, RETAINED AND SPENT BY THE CITY IN THE FISCAL YEAR 2009 AND IN EACH FISCAL YEAR THEREAFTER AS A VOTER-APPROVED REVENUE CHANGE WITHOUT REGARD TO ANY SPENDING, REVENUE-RAISING, OR OTHER LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION, THE LIMITS IMPOSED ON INCREASES IN PROPERTY TAXATION BY SECTION 29-1-301, C.R.S. IN ANY YEAR, OR ANY OTHER LAW WHICH PURPORTS TO LIMIT THE CITY’S REVENUES OR EXPENDITURES AS IT CURRENTLY EXISTS OR AS IT MAY BE AMENDED IN THE FUTURE, ALL WITHOUT LIMITING IN ANY YEAR THE AMOUNT OF OTHER REVENUES THAT MAY BE COLLECTED, RETAINED AND SPENT BY THE CITY?

City of Castle Pines North Ballot Issue 2E

SHALL THE CITY OF CASTLE PINES NORTH BE AUTHORIZED TO COLLECT, RETAIN, AND SPEND THE FULL AMOUNT OF ALL AD VALOREM PROPERTY TAXES, ALL OTHER TAXES, TAX INCREMENT REVENUES, INVESTMENT INCOME, TAP FEES, PARK FEES, FACILITY FEES, SERVICES CHARGES, INSPECTION CHARGES, ADMINISTRATIVE CHARGES, GRANTS OR ANY OTHER FEE, RATE, TOLL, PENALTY, OR CHARGE AUTHORIZED BY LAW OR CONTRACT TO BE IMPOSED, COLLECTED OR RECEIVED BY THE CITY DURING 2009 AND EACH FISCAL YEAR THEREAFTER, SUCH AMOUNTS TO CONSTITUTE A VOTER-APPROVED REVENUE CHANGE AND BE COLLECTED, RETAINED, AND SPENT BY THE CITY WITHOUT REGARD TO ANY SPENDING, REVENUE-RAISING OR OTHER LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION, THE LIMITS IMPOSED ON INCREASES IN PROPERTY TAXATION BY SECTION 29-1-301, C.R.S. IN ANY YEAR, OR ANY OTHER LAW WHICH PURPORTS TO LIMIT THE CITY’S REVENUES OR EXPENDITURES AS IT CURRENTLY EXISTS OR AS IT MAY BE AMENDED IN THE FUTURE, AND WITHOUT LIMITING IN ANY YEAR THE AMOUNT OF OTHER REVENUES THAT MAY BE COLLECTED, RETAINED AND SPENT BY THE CITY?