After a public hearing in September, the El Paso County Planning Commission recommended that the Board of County Commissioners approve Woodmen Hills Metropolitan District’s amended and restated service plan.Evan Ela, the district’s attorney, presented the new service plan to the planning commission.The new service plan is consistent with the county’s land development code, special district policies and state statute; and eliminates developer-friendly provisions such as reimbursing the developer for water and sewer tap fees at the developer’s discretion, Ela said.If approved by the BOCC in its current form, the new service plan will allow the district to do the following:
- Base service fees on the cost of providing the service, instead of using the fee schedule in the current service plan; Ela said the district no longer follows current service plan’s fee schedule anyway.
- Set and collect tap fees for water and sewer hookups and allocate the tap fees at the board’s discretion, instead of using them to pay interest on the district’s debt, as required by the current service plan
- Enforce covenants if a majority of voters in filings 1 through 10 decide they want covenant enforcement in an election to be held in May
- Hold mill levy elections to tax real property in the district (with a cap of 60 mills)
The new service plan also raises the district’s debt authorization from $16.2 million to $53 million.Ela said the increased debt cap will give the district flexibility to go to the public bond market to fund infrastructure projects over the next 20 years.Formed in 1995, the district’s service plan has been updated twice to increase the debt authorization so that projects, such as the two existing recreation centers, could be built, he said.The district’s most immediate need is to upgrade its wastewater treatment plant or build a new plant (estimated to cost $15.2 million) sometime in the next six years.John McGinn, who works for the district’s water consultant – JDS-Hydro Consultants Inc. – said the current plant will not meet the new criteria for nitrate, nitrogen and phosphorous; expected from the Colorado Department of Public Health and Environment in 2016.McGinn said the favored option is to build a new plant that will be funded in part by user fees paid by Woodmen Hills’ residents and wastewater treatment fees already being collected, or fees that will be collected from other metropolitan districts in the area, including Falcon Highlands, Paint Brush Hills, 4 Way Ranch and parts of Meridian Ranch.In addition to the wastewater treatment plant, over the next 20 years the new service plan estimates the district needs $10.9 million for water infrastructure and $11 million for additional recreation centers, Ela said.He said the district has about as much debt as allowed by the current cap of $16.2 million.The district’s current debt is through Woodmen Hills Public Facilities Authority, which sold privately placed bonds to individuals, said WHMD board secretary Al Kreps.Woodmen Hills’ developer Rusty Green still sits on the PFA board, Kreps said.Under the arrangement, the district makes regular 4-percent interest payments to the PFA, which pays the bondholders. The district also pays PFA an additional 4 percent when the district has accumulated tap fees on 100 new homes, Ela said.To date, the payments have been interest only. Principal payments start in 2016 or 2020, he said.Ela said the district could refinance its existing debt in the public bond market with terms more typical for Colorado districts.The district will save money if it issues public bonds backed by voter-approved taxation because the interest rate on such bonds tends to be lower than bonds backed by user fees, such as the PFA bonds, he said.Ela also said it is his legal opinion that the current debt cap of $16.2 million and the proposed new debt cap of $53 million only applies to tax-based indebtedness – not to fee-based indebtedness.”When this district … amended this plan twice before, each time it was to increase the debt cap, even though it was being financed through fees. … I question whether they needed to come back and get that cap frankly, but that’s how business has been done here in the past, so we’re going through it the same way,” Ela said.Several Woodmen Hills residents spoke in favor of the new service plan.Ralph Laurie said he bought a house in Woodmen Hills in 2006 because he liked the community’s well-maintained, coherent tone and thought it would be a good place to raise a family. Now there are broken windows covered with black plastic, derelict boats in people’s yards and weeds five-feet tall, he said.”I would move out of Woodmen Hills in a heartbeat if I could find somebody who liked that neighborhood enough to take my house,” Laurie said.Lynne Bliss said she supports the new service plan because it will give residents the opportunity to vote on increased indebtedness to take care of the community’s needs, such as recreational facilities, over time instead of subjecting residents to arbitrary fee increases.”Many of us moved into that area with the idea that covenants would be enforced,” Bliss said. “Covenant enforcement preserves home values and the tax base.”Others spoke against the new service plan.Cheryl Ward said she was against increasing debt.”I know infrastructure is needed, but they are going to have to figure out a way to do that without putting this on the taxpayers,” Ward said.When it comes to covenant enforcement, tripling the debt limit and building a new wastewater treatment plant; the new service plan is overreaching, said Richard Fisher.”The overwhelming majority of residents don’t want the district involved with covenant enforcement,” Fisher said, referring to the results of an informal survey the board conducted last year.With a finite number of homes that can be built in Woodmen Hills, why is there a seemingly infinite need for sewage treatment, Fisher asked. “I don’t want our small community of taxpayers paying for a plant that treats everyone else’s sewage,” he said.Lee Reedy objected to a statement in the new service plan: “All members of the Board of Directors have been duly elected at public elections and none have affiliation with the land developers that originally sponsored creation of the District.””This is patently false,” Reedy said. He said campaign contribution reports filed by the four winning candidates for the WHMD board in the May 2010 election received substantial in-kind contributions from Gerald Olesh.”(Olesh) was the No. 1 contributor to each of them by far in the thousands of dollars. Mr. Olesh, who passed away in December 2010, was the general managing partner in Falcon Properties and Investments LLP, of which Mr. Benjamin I. “Rusty” Green, developer of the Woodmen Hills area, remains a key principal,” Reedy said.”The disingenuous of the statement in the service plan and its implementation under the direction of this board represents a substantial conflict of interest and raises with it at least the appearance of impropriety.”Ela said none of the board members works for the developer and he doubted contributions from Olesh were the only contributions these board members received.Reedy also said if WHMD holds elections to get voter approval for covenant enforcement, it should be done on a per filing basis, so that voter intent in each filing is known and covenants are enforced only in those filings where a majority of the filing’s voters approve it.Ela said the new service plan allows the district to create one or more sub-districts for the purpose of the May 2012 election, but the district’s board hasn’t decided the sub-district boundaries yet.”I think (Reedy’s suggestion) is probably a good way to do it,” Ela said.Woodmen Hills resident Richard Diffendorfer wanted to know if the vote on covenant enforcement and mill levies would be limited to homeowners only.Increasing the debt limit to $53 million is unthinkable, especially if non-homeowners are allowed to vote on mill levies, Diffendorfer said.”All elections have to be done according to state law, and they are open to registered voters within (the) district,” Ela said.”Given what I’ve seen out there as the climate, I don’t think there’s much chance it (a mill levy) would be approved … but at least it gives the board and future boards’ options to consider.”The board will probably wait a couple of years before issuing any public bonds so that tap fees (currently about $5,500 per house) can accumulate, Ela said. If $10 million is needed to fund an infrastructure project, the board might wait to issue bonds until it has accumulated $3 million in tap fees so that only $7 million needs to be raised, he said.Craig Dossey, project manager for the county’s development services department, said Woodmen Hills’ residents are already paying a mill levy of 62.965 to various area entities – school, library, fire, road and groundwater management districts, as well as the county.The county doesn’t have anyone on staff who could challenge the finances outlined in the new service plan, but the plan is based on “pretty conservative” estimates consistent with today’s 2-percent growth rate, Dossey said.The planning commission voted 9-0 to recommend the new service plan for approval by the BOCC, which will hear the plan Oct. 20.
“All members of the Board of Directors have been duly elected at public elections and none have affiliation with the land developers that originally sponsored creation of the District.”Affiliations to land developersAccording to the Colorado Secretary of State’s Web site, the articles of incorporation filed in 1999 for the Woodmen Hills Public Facilities Authority list Benjamin Green, Gerald Olesh and Tracey Pelfry as the corporation’s directors.The articles of incorporation for Falcon Properties and Investments LLP, available at the same Web site, confirm that Olesh was a general partner of Falcon Properties and Investments when it was established in 1996.A review of campaign contribution records at the Colorado Secretary of State’s Web site shows that current WHMD board members Al Kreps, Robert Lovato, Keith Moulton and Marge Vaga received non-monetary contributions from Olesh and from Case International Company (a Colorado Springs real estate development company controlled by members of the Case family) for direct mail, grass roots campaign activities, legal expenses, Web site design and consulting services.Kreps received a total of $4,919 in non-monetary contributions, Lovato received $9,316.74, Moulton received $10,287.72 and Vaga received $8,427.88 from Olesh and Case International.Other than Kreps, who contributed $500 to his own campaign, and Moulton, who contributed $18.03 to his own campaign; the winning candidates did not receive any contributions from any other sources.Of the other May 2010 candidates, the Secretary of State Web site shows the only other candidate to receive non-monetary contributions from Olesh and Case International was Frank Gonzales, who received $4,947.24.
