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.
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.
"The full extent of this continuing and increased bond obligation needs...to be fully explained to voters..."
ReplyDeleteSince the submission of Attorney Hayes' letter two weeks ago, has there been any effort by the mayor, city council or the city attorney to answer these questions?
Has the District's Board of Directors followed up with the city attorney to get answers?
How are people suppose to make an informed vote on these issues when so many questions go unanswered?
Great question.
ReplyDeleteHow about the issue of permits? I was recently quoted for a deck replacement. The contractor said, "It's too bad you didn't do this before CPN became a city. Now it will cost you at least $350 for a permit. If you'd done this when you were unincorporated it would have been more in the $100 range." How can this be? Who all is getting paid? Why in the world would it cost me MORE for a permit now vs. when we were unincorporated?