Rooney Valley News

 

Here is the link to the meeting Tuesday, August 13, 2024:

https://greenmountainwater-org.zoom.us/j/81489465906

 

Here is the agenda and related documents:

 

https://www.greenmountainwater.org/files/3eb76e4c8/2024_0813_GMWSD_Board+Regular+Meeting+Agenda.pdf

 

https://www.greenmountainwater.org/big-sky-update-and-settlement-proposal

 

https://www.greenmountainwater.org/files/1c86be446/Resolution+Consenting+to+Overlap-Green+Mountain+Water+and+Sanitation+District+%2801177623-2%29.pdf

 

Relevant text of the agenda:

 

“8. Director’s Matters

a. Ravine Bridge Discussion of Agreement
b. Ravine Crossing Plan for Lakewood Submittal
c. 11907 W Alameda Pkwy Plan Approval Request
d. Discuss Lobbyist Contract Renewal
e. Discussion and Vote on request for overlapping district – The Bend @ Lakewood MD (at
4th and Union)
i. Presentation by Coloradans for Metro District Reform, John Henderson
f. Discuss a Public Hearing for Federal Center Study Results

9. Legal Matters (Dylan Woods, Title 32 Attorney for the District)

 

10. Executive Session Executive Session pursuant to §24-6-402(4)(b) and/or §24-6-402(4)(e), C.R.S. for the purpose of receiving legal advice regarding:

 

a. Big Sky mediation and settlement negotiations

b. Ravine bridge agreement (if needed)

 

 

11. Legal Matters – Any actions resulting from executive session

     

 a. Discussion and vote on proposed settlement offer as per Memorandum of
Understanding dated July 30, 2024″  

 

[End of updated information regarding hearing – updated Monday, August 12, 2024]

 

 

 

The District Court recently held that there was absolutely no obligation, no legal obligation, for Green Mountain Water and Sanitation District to provide service to developers OUTSIDE the Green Mountain District Boundaries.    In fact, the Green Mountain Service Plan limits Service to residents WITHIN the district boundary.

 

 

That hasn’t stopped aggressive developers prevailing upon deferential Green Mountain boards in the past from violating the Green Mountain Service Plan and  providing service outside the district boundary.  And doing so without public hearings.

 

 

• In 2006, there was no  public hearing when Green Mountain,  led by a pro-developer board, violated the Service Plan and voted to provide service outside its district boundary to Brookfield for Solterra.

 

 

• On election night, May 8, 2018,  there was no public hearing when Green Mountain, led by a pro-developer board, violated the Service Plan and voted to provide service outside its district boundary to CDN for Big Sky.

 

• • Emails from Big Sky’s attorney, Charles Norton, show that Big Sky was worried the new board being elected on May 8 would not support service outside the district boundary so he pushed for a decision before the new election.   

 

He was right.   Newly elected Jeff Baker, Alex Plotkin and Adrian Hanagan, overcoming obstructive efforts by the Green Mountain manager and attorney eventually found out about the Big Sky IGA which provided service outside the district boundary in violation of the Service Plan.  

 

 

AND THEN, FOR THE FIRST TIME SINCE AT LEAST 2006  THERE WERE PUBLIC HEARINGS ABOUT PROVIDING SERVICE OUTSIDE THE DISTRICT BOUNDARY IN VIOLATION OF  BOTH  GREEN MOUNTAIN’S AND  BIG SKY’S OWN SERVICE PLAN

 

Lots of public hearings.

 

 

And after Jeff Baker retired, Karen Morgan and the new pro-resident boards have continued that tradition of public hearings on the issue of service outside the district boundary – extraterritorial service.   

 

They will do it again on Tuesday, August 13, 2024.

 

 

They understand that under the statutes, the board members owe a  fiduciary duty to the residents, not the developers.   (Contrary to a description by a former failed city council candidate, that the board is a “toaster appliance” obligated to do the developer’s bidding.)   Again, as the District Court held, there is absolutely no legal obligation to provide service to developers outside the district boundary.  

 

 

The Board, which has two new members, will hear from the public on this issue again Tuesday, August 13, 2024 before the board decides whether or not to provide service outside the district boundary to two proposed developments – Big Sky (CDN/Lennar) and Indigo at Red Rocks (Cardel).

 

 

The proposed service outside Green Mountain’s district to these two proposed developments, totals 1,875 homes (estimated 4,687 people) and a large commercial area.   It is located west of Solterra and north of the current development at Red Rocks Center and east of C-470.  

 

 

Here is the Map.  The area in yellow is Big Sky (and CDN/Lennar – the Developer).  The area in blue is Cardel (Indigo at Red Rocks).

 

 

Here is the text of the “memorandum of understanding” that will be presented to the Board for your comment and decision by the Board on Monday August 13:

 

                                                “MEMORANDUM OF UNDERSTANDING

Big Sky Metropolitan District No.1,CDN Red Rocks, LP, Cardel Homes U.S. Limited Partnership, and Green Mountain Water and Sanitation District participated in mediation on July 29, 2024 in an effort to resolve the dispute captioned Big Sky, et al. V. Green Mountain, Jefferson County Case No. 2019cv30887.  

 In furtherance of those efforts, Green Mountain representatives present at mediation, Karen Morgan and David Wiechman, agree to present the following proposal for resolution from Plaintiffs to the Board at its next regular meeting on August 13, 2024, during executive session for discussion:

The parties will work in good faith to negotiate a new intergovernmental agreement (IGA) to include the following non-exclusive terms:

•  In the new IGA, the Big Sky Service Area shall be defined as and is comprised of the property outlined in red on Exhibit 1 attached to this Memorandum of Understanding;
• The new IGA would cover the Big Sky Service Area only;
• Under the new IGA, Green Mountain agrees to provide sewer service to the Big Sky Service Area only;
• Any new IGA would not include any need to oversize the Big Sky sewer system;
• The language of any new IGA would clearly dictate that Big Sky would be 100% responsible for advancing alt costs associated with the design, construction, and maintenance of the Big Sky sewer system, design and construction of any lift station, and any improvements to the Green Mountain system required by the addition of the Big Sky Service Area;
• Big Sky would be wholly responsible for maintenance of the Big Sky sewer system and any lift station, but in the event any such maintenance requires additional Green Mountain employees, Big Sky would be responsible for such cost of the employee;
•  If capacity issues arise with any portion of the system or if improvements are needed to handle additional capacity, Big Sky will advance payment for those fixes;
• Big Sky would agree to clear indemnification language relating to its sewer system and any lift station;
• Big Sky agrees that any new IGA would not include any language pertaining to tap fee rebates; and
• Tom Morton agrees to step down from the Big Sky Board of Directors, if necessary;
• Cardel agrees to pay Green Mountain $100,000;
• Green Mountain would prepare the initial draft of any new IGA;

 

Green Mountain will report back to Plaintiffs’ counsel before end of business on August 14, 2024, the outcome of the Board decision on August 13, 2024 regarding proceeding with a new IGA;

If the Board votes to proceed with a new IGA, Green Mountain will provide Plaintiffs with a first draft by August 21, 2024; Plaintiffs will thereafter provide comments and revisions by August 26, 2024;

If the Board votes to proceed with a new IGA, Green Mountain will schedule a special meeting by September 10 for public hearing on and Board consideration of a new IGA.

Green Mountain agrees to vote at this special meeting to approve or not approve the new IGA;

 

If the parties reach a new, final IGA, they will file a Consent Decree with the court

 

All Parties agree that this memorandum of understanding is not a confidential document.”

 

As the MOU states, Karen Morgan  and Dave Weichman agreed to pass the request for service along to the full board.  From prior and recent public comments, it appears neither will vote to support providing service outside the district and creation of a new IGA.  But of course, based upon past experience, they and all the board members  will listen to what the residents have to say about the issue before making a final decision.  Thats the point of having a hearing on the matter.

 

Note:

 

• The plaintiffs have apparently decided that providing service to all of Rooney Valley was not a good idea.  Indeed, two of the other developers have dropped out of the case.

 

• But the plaintiffs are still proposing a system that is more than just the Big Sky Service Area defined in its Service Plan.  Their reference here to the “Big Sky Service Area” is misleading.  And Big Sky is again violating its own Service Plan by Big Sky proposing to provide service to Cardel’s development WHICH IS NOT PART OF BIG SKY’S DISTRICT.  
  • In city and court filings in 2020 and again in 2023, Big Sky admits that Cardel’s development is not part of Big Sky.  
  • It could be included, but only with an application and permission by the City of Lakewood (and Cardel) under Title 32, after public hearings.
  • There is only one Big Sky Service Area and that is the one defined in its Service Plan approved by Lakewood in 2016.  The Big Sky Service Area in this IGA proposal is not the Big Sky Service Area approved in the 2016 Service Plan.
  • This MOU proposes a new “mini” “Big Sky Sewer System” that Big Sky would still run and own, providing service to its own development and, in addition, providing service to another development built by Cardel (Indigo at Red Rocks).  
  • Not all of Rooney Valley but still not “just” Big Sky.

 

• The new IGA would not have the “kickback” provision which they now appear to agree was a clear violation of TABOR.

 

Here is the full text and signature page:

 

2024_07_30_Memorandum of Understanding_Green Mountain

 

 

To be sure, since 2018, the Green Mountain residents have consistently declared that they opposed providing service to developers outside the district.  

• They said so overwhelming ever since 2018 in  public hearings and meetings.  
• It was a primary issue in the recall election of 2021 that gave a 3-1 vote of confidence to Karen Morgan, Jeff Baker and Alex Plotkin.  
• It was an issue in every election since.  
• It was recently re-affirmed in the public meetings and vote denying Brookfield’s request for additional service outside the district boundary  (after the Solterra IGA expired).  

 

 

So why is it coming up again.   Because trial in the Big Sky case is set to begin the end of September and there are efforts  to settle.  

 

We have been here before.   

• In January, 2021, there was a mediation in anticipation of trial set in March, 2021.  As a result of that mediation there were efforts to settle.

 

• In the middle of that campaign to force a settlement on the board, the Court dismissed the case, much to the surprise of those trying to persuade the board to settle.

 

 

Big Sky appealed and the Court of Appeals sent the case back asking for more facts noting that there had been no discussion of the actual reasons stated by the board for terminating the Big Sky IGA, including the reason that the Big Sky IGA violated Big Sky’s own Service Plan.

 

So the District Court got the case back again, denied motions by both sides to resolve the case without a trial, saying, as the Court of Appeals said, he wants to see all the facts in a trial. 

 

So, once again, there was a mediation this past Monday  in anticipation of trial which is now set for September 23, 2024.  Initially Green Mountain said there was no point to a mediation.  They would not agree to providing service outside the district.  The Court still ordered mediation to see if the case could settle (a routine request from most courts).  

 

So we are here again.

 

• There was mediation on Monday, July 29.  
• There was pressure to settle, even though Green Mountain said “no” once before, has already  won once and still has the facts and law to win again.  

 

 

And in fulfilling its fiduciary obligation to the residents, the Board is again asking the residents whether or not they want to provide service to developers outside the district boundary.  

 

• If the residents want to provide service outside the district boundary, then the board should go ahead and prepare a new IGA obligating Green Mountain to provide the service for Big Sky and Cardel.  

 

• If the residents don’t want to provide service outside the district boundary, then the board should defend its decision terminating the Big Sky IGA and go to trial.

 

 

Here is the list of issues the Judge wants to hear about at trial (based upon his latest decision) with very brief reference (in bold) to facts and arguments in Green Mountain’s favor.  There are many documents and other evidence supporting these statements (in bold) and this is only a quick summary offered to show, from one perspective, that it is likely that Green Mountain will win the case a second time.   (Details available on request).

 

Could Green Mountain lose at trial and all subsequent appeals.  Yes, anything’s possible.   But in at least one informed opinion, that is not the likely outcome.  And even if Green Mountain lost the trial and all appeals, Big Sky wants service, not money.   Then Green Mountain can provide service based upon a developer “tricked you” election night IGA.    But I bet that trick won’t work again.

 

Here is the Court’s list of issues and one perspective’s brief description of the facts and law in defense of Green Mountain’s position: 

•  Cardel and CDN’s status as potential intended 3rd party beneficiaries with privity or
  standing.   The IGA expressly states there are no 3rd party beneficiaries.

 

• Whether Defendant Green Mountain W and S District (GM)’s willingness letter was a
  promise or contract.  The “will serve letter” expressly states it is only good if the parties reach an agreement on an IGA.  The IGA was terminated 12 months after the election night no public hearing approval by the board being voted out of office.  After the first four months the developers were put on notice that the IGA may not be valid, followed by 8 months of discussion and hearings about the issue.

 

• The validity of the May 8, 2018 Intergovernmental Agreement (IGA) between GM and
  Big Sky.   It is not valid because it violated Big Sky’s Service Plan, Green Mountain’s Service Plan, the Local Government Budgeting Act and TABOR.  Neither Big Sky or Green Mountain had authority to create a new sanitation district for all of Rooney Valley.

 

• Whether the common law, C.R.S. §§ 29-1-110(2), or §§ 29-1-203(1) exempts the IGA from the Local Government Budget Law (LGBL).  The law does not state there is an exemption.  The Court would be making new law.  

 

• The applicability of the Memorandums of Understanding to the IGA.  The MOU’s all expressly stated they were only good if the parties reached an agreement on an IGA.

 

• Whether or not the IGA is for multiple fiscal years and whether there are multiyear funds
  and appropriations.   The IGA cannot work without multiyear funding and it expressly provides for “kickback” payments of money by Green Mountain to Big Sky/CDN for improvements to the Green Mountain infrastructure for up to 10 years.

 

• How the conduct of the parties indicate whether the IGA stipulates multiyear or annual funds and appropriations and the presence of cash reserves.  Again, the IGA cannot work without multiyear funding.  Burden is on Big Sky to show the IGA can operate without multiyear funding.  

 

•  The relevance of the Fossil Ridge IGA.  It is not relevant.  It is entirely different.  The Solterra IGA provides service to Solterra only.  The Big Sky IGA establishes Big Sky as the new “master meter” sanitation district for all of Rooney Valley.  Big Sky’s own counsel admits Big Sky would be the “administrator” or “master meter” deciding, managing and owning the “Big Sky Sewer System” for all of Rooney valley.  The Big Sky IGA created a new “de facto” sanitation district in violation of Big Sky’s Service Plan and Title 32.

 

• Whether or not GM breached the IGA and the applicability of the IGA’s default
  provisions.   Green Mountain terminated the IGA because it was not valid.  The default provisions don’t apply if the IGA was not valid to begin with.   A legislative body, like Green Mountain can amend its Service Plan to provide service outside the district boundary.  Big Sky could amend its Service Plan to transform itself into a new sanitation district providing services to other developers in Rooney Valley.  But neither were done.  And once Green Mountain’s new board realized what had happened, they had a fiduciary duty to correct the violations and, in this case, acting as a legislative body, terminate the illegal Big Sky IGA.

 

•  The effect of the GM Termination Resolution.   It was a valid exercise of the legislative function.  The election night board approved the IGA.  The newly elected board terminated the IGA.   A vote of an elected board is presumed correct and one legislative board cannot bind another legislative board.  Any inconvenience to the developers was minimal since the notice of a potential problem was given within 3 months and the termination within 8 months.    Developers in this case assume a lot of risk by hoping to get sewer from outside a district that does not have to provide the service.  But it is their risk, not the community’s risk.  Big Sky had sewer from their own district (Mt. Carbon) and other sources.

 

• The validity and applicability of LGBL and Taxpayer Bill of Rights Act (TABOR) to the
  IGA.   As the Court held the first time, both are applicable and render the Big Sky IGA invalid.  The additional facts that the Court of Appeals requested are there in the IGA.   To the extent the IGA is ambiguous, since Big Sky/CDN drafted the IGA, any ambiguities should work against them, not Green Mountain.

 

• Big Sky’s authority under the IGA and Special District Act.   Big Sky’s authority under its own Service Plan and Title 32 was limited to paying for the infrastructure for its housing development.  There was no authority in the Big Sky Service Plan to establish itself as a new “master meter” “administrator” for a new “Big Sky Sewer System” providing service to all of Rooney Valley, including developments outside Lakewood.

 

•  The applicability of the Big Sky Service Plan and whether the IGA was within the scope.  Again, Big Sky’s authority under its own Service Plan and Title 32 was limited to paying for the infrastructure for its housing development.  There was no authority in the Big Sky Service Plan to establish itself as a new “master meter” “administrator” for a new “Big Sky Sewer System” providing service to all of Rooney Valley, including developments outside Lakewood.

 

• Whether specific performance and damages apply.   An IGA cannot be the authority for creating a new sanitation district.  Under Title 32 only a city or county can create a new sanitation district after public hearing.  Damages, if any, would be limited to costs incurred between May 8, 2018 and either the first notice of a problem or termination.  Evidence in the public domain (Big Sky’s budget) fails to show any costs incurred after May 8 on building the “Big Sky Sewer System”.

 

• Whether there was a Vested Right Property Act violation and the applicability of the
  Contract Clause.   There is no vested right.  The Court has already held that there is no right to service outside the district boundary.   There is no vested right to a new sanitation district.  There is already a district present – Mt. Carbon.  Mt. Carbon has the obligation to provide service, not Green Mountain.

 

•  Whether promissory estoppel applies and how C.R.S. § 29-1-203 and the common law apply to promissory estoppel and the LGBL.   The Court of Appeals held the promissory estoppel did not exist if the IGA was invalid.

 

• Whether Big Sky is governed by an elected, qualified board.   It is not.  Title 32 requires a board of at least 5 elected members.  At most Big Sky had only 2 members – the developer and his consultant.

 

•  Potential spoliation and whether it is a red herring.   Spoilation based upon communicating with an elected officials’ constituents regarding a matter of public policy in providing essential utility services with scarce public resources and a specious unknown legal theory of “preemptive termination” unknown to the board members lacks any merit whatsoever.  

 

• Whether there has been a regulatory taking as contemplated in the 5th Amendment of the U.S. Constitution and Article II Section 15 of the Colorado Constitution and whether there is a procedural due process claim or violation pursuant to 42 U.S.C. § 1983.   Again, there is no entitlement to service outside the district.

 

• Whether there is relief for failure to serve CDN a public utility.   CDN had and still has access to sewer through its own sanitation district, Mt. Carbon.  Red Rocks Center is owned by Lennar, which was disclosed as the potential buyer of Big Sky/CDN.  Red Rocks Center gets sewer from Mt. Carbon and Lennar owns Mt. Carbon’s assets.  CDN also has other options for sewer.  At no time did Green Mountain have any obligation to provide sewer to Big Sky/CDN.

 

• Whether CDN is entitled to relief for impairment of contract and retroactive legislation.   Any relief is minimal, even if allowed.

 

• Whether there have been violations of the LGBL   Operation of the IGA requires expenditures that were not authorized in violation of the Local Government Budgeting Act.

 

• Whether GM’s or Big Sky’s obligations were approved by voters and exempt from the
  LGBL.   There was no public hearing on the Big Sky IGA and no budgeting approved for implementing the Big Sky IGA at the time the Big Sky IGA was approved on the night of the election 

 

• Whether GM has breached the covenant of good faith and fair dealing.   Big Sky breached its covenant of good faith and fair dealing by pushing through an illegal IGA, which violated both its own Service Plan and Green Mountain’s Service Plan, on election night in order to “trick” the voters who were voting the old board out of office.  Green Mountain on the other hand gave notice to the developers as soon as they realized there was a problem and for the next 8 months held numerous meetings and hearings and reached out to Big Sky to address the issues.  Big Sky and all the developers participated in the debates during that period of time.  The new board listened to everyone and exercised their fiduciary duty to their residents in terminating the Big Sky IGA.

 

Watch for the zoom address for the August 13 meeting.  This blog will be updated once the zoom meeting address is released.