They email minute by minute updates on pool closing and openings, they are finally emailing a link to the meeting packet before the meeting but we still have to go to Greenwood Village, wherever that is, to get a copy of the proposed budget. Here is the notice on Solterra Connect:
“2020 Draft Budget
Pursuant to statute, the Boards of Directors of the Fossil Ridge Metropolitan Districts Nos. 1-3 have received draft 2020 budgets by the statutory deadline. Said draft budgets are available for review at the offices of Community Resource Services, 7995 E. Prentice Avenue, Suite 103E, Greenwood Village, Colorado”
The request to a board member for an emailed copy was ignored. The management company (CRS) emailed a copy at our request. Thank you.
Here are the budgets for each District. The key budgets are the general fund budget for District 1 – the district which spends all the money – and the debt obligation budgets for all three districts. That debt is the money we pay to the bond investors who put up the money that Brookfield used to pay itself $30 million.
Now, before we get started, a reminder. These budgets have nothing to do with the HOA. The HOA only deals with the trash pick up, landscaping (paid for through the district budgets we are about to review) and whether or not you can paint your house with polka dots and fill the front yard with plastic pink flamingos.
Also – December 2, 2019 is the only public hearing on the budget. If you have questions or concerns after reading the above budgets (highlights below) you won’t want to wait until then. There won’t be much time to make changes during that meeting. The final budget must be filed no later than December 15.
- Spending – Where’s It All Going – Lots of Money for Administration, Litigation?, Trees that Keep Dying, YMCA (Pool), Signs?
The primary budget is the general fund for District 1.
The first thing that jumps out is the difference in the total expenditures from 2018 to 2020.
$1.5 million in 2018.
$2.9 million – almost double – for the proposed 2020 budget.
Administration
CRS is the firm hired to run the District – like a “contract” city manager (remember the Districts are actual governments under state law).
CRS 2020 budget – $80,000
Then we have Overlook, Brookfield’s captive management company, that is still here. It was clear from a couple of meetings that CRS and Overlook are competing – providing similar reports and data to the board on finance issues.
Overlook (aka “District Office Administration” and “Property Management”) – $136,123
Total administration CRS plus Overlook: $216,123
Retreat/Pool Administration
Remember how happy everyone was with the YMCA and how we were talking about making some changes. The board decided in a formal resolution NOT to review the YMCA contract or the Overlook contract for another year. And, YMCA asked for a $40,000 increase. The 2020 budget for Retreat/Pool Administration is a $60,000 + increase.
Brookfield advertises its close relationship with YMCA in providing services to its developments.
Retreat/Pool Administration 2020 budget – $206,500
Last year 2019 – $141,333
Legal
General – answering questions handling routine matters – 2020 budget $25,000. That sounds about right.
Litigation – suing someone or being sued – as far as we know we are not planning to sue anyone or be sued – 2020 budget $175,000.
What? We could hire an in-house attorney working 8 hours a day for a year for less than that. The community should have some questions about what is going on. Or about to go on.
Poor Trees
We keep planting trees that can’t survive here.
Tree/Shrub Replacement 2020 budget – $90,000.
Last year 2019 – $49,443.
2018 – $16,650.
Oh, and if you have admired the poor spindly trees planted along McIntyre by Brookfield – District 1 homeowners signed on to maintain all of that area on both sides of the street. Tom Waterman signed the formal contract accepting responsibility to maintain that area (and continuously replace all those trees as they die out):
Waterman Site Plan for McIntyre
That bill won’t come to District 1 until after that area is completed. It is not part of the 2020 budget. I don’t believe this decision was discussed or voted on in any board meeting.
Grass
Sod replacement 2020 budget – $100,000
Last year 2019 – $8,243
Signs
What signs? Hopefully not the Brookfield signs advertising homes for sale that sold years ago.
Signs – 2020 budget – $40,000
Last year budget 2019 (estimated) – $973
Retreat
Total 2020 budget, including the $206,500 pool administration discussed above – $423,500.
Last year (2019) – $212,879
Pool furniture (2020) – $13,000 Last year (2019) – 0
Retreat maintenance (2020) – $65,000. Last year (2019) – $25,445 (new floor, drapes)
Security (2020) – $17,000. Last year (2019) – $6,785
Reserves
Pursuant to reserve study (cost about $10,000) of money that needs to be saved to pay for maintenance/replacement of “stuff” over the next 3 – 5 years. 2020 budget – $374,000.
Source of funds – new $80.00 quarterly reserve fee to be paid by homeowners.
Note for future discussion: What has not yet been addressed or funded are reserves for maintenance/replacement of “stuff” that will need to be maintained/replaced sometime beyond 3-5 years – such as the sewer pipes we own. When they break and need fixing or need to be replaced, we, not Green Mountain, will need to pay for those costs. Under our IGA and maintenance agreement with Green Mountain we hired them to clean the pipes. But they don’t own the pipes. We do. So if they need to be repaired or replaced, we will need to come up with the money to do that. Again, we need to open a discussion with Green Mountain about the IGA that Brookfield and Adam Paul arranged for us (the sewer service expires in 2023 and we are paying higher rates that other customers which includes money to repair and replace the pipes.)
2. Taxes, Fees And Bake Sales – Where is All the Money Coming From and How Much
The draft budget shows we aren’t taking in as much money as we plan to spend.
Total revenue – $2,150,673 to $2,544,733 depending how how much the fee increase is for 2020.
Total expenditures 2020 – $2,954,569.
We are short $803,893
But, there is a surplus left over from previous years, conveniently, $815,641.
So we will end 2020, according the budget, with a surplus of $11,748.
Fees (not taxes)
There are two sources of income – our property taxes – and our fees. Lets look at the fees first.
The current fee is $1060 and will be raised to between $1,100 to $1,440. This is the fee. Not the property taxes.
This increase, in addition to the surplus, pays for the budget shortfall.
Taxes (not fees)
We pay property taxes and “specific ownership taxes” (car registration) to the County. Part of what we pay to the County is only collected by the County but is not spent by the County. It is actually paid to the District and they spend it.
Technically, people who live in District 2 pay taxes to District 2 and people who live in District 3 pay taxes to District 3. But in one of the meetings just before the recall (June, 2017), Brookfield and the resident directors decided to have the people just pay District 1 instead. No real authority for doing it – they just did it. But that is another issue for another day.
So, in addition to paying property taxes for Fire, Police, Schools, Roads and subsidizing the developers at Dinosaur Ridge (Jefferson County), we pay property taxes to District 1.
Now, most of the taxes we pay to District 1 go to pay the principal and interest on the bonds that Brookfield issued to pay themselves $29 million.
The rest of the property taxes (plus the fees) pay for the items listed above and the rest of the general fund. So, some of the property taxes and all of the fees pay for the general fund items such as the administration, pool, retreat, trees, signs, reserves and unknown litigation.
Total 2020 budget property taxes paid to the general fund for pool administration, trees, district administration, retreat maintenance. . . etc – $368,140.
Now this is much lower than last year which does not make sense. The property valuation (how much Jeffco Assessor said our property is “really” worth) went up so the taxes should go up. And the mistake in the mill rate given to Jeffco applied to the debt tax not the general fund tax. So, another question.
Total 2020 budget property taxes we will pay for the debt (principal and interest) for the Brookfield bonds – $2,395,235.
This number is both higher and lower than last year. It is higher because the “value” of our property which they use to calculate how much we pay in taxes increased according to the Jeffco tax assessor. It is lower because we told Jeffco to only collect 32.210 mills instead of 38.210 mills.
Now, the bond debt – how much we owe each year to pay down the Brookfield bonds over the next 45 years is $2.4 million a year.
Last year (2019) our property tax income to pay the Brookfield bonds was much less than what we owed:
income – $1,867,939
what we owed – $2,449,143.
But, even though we were short last year and this year on taxes paid for the debt, we paid way too much in previous years so there is a surplus of $1.7 million. Big surplus of our taxes. But it is covering the shortfall for now.
Bottom line – our property taxes to pay the Brookfield bond debt will rise because the value of the homes according to the Jeffco assessor also went up.
And even though there is a shortfall because we aren’t paying enough in property taxes and because of the mistake in the mill rate we gave to Jeffco, we have such a large surplus built up – so we can easily make up the difference.
Bottom line – our property taxes to pay the general fund (Retreat, trees, administration ,etc) plus the fees are also short of the expenditures.
But, again, we have a surplus from prior years that will make up the difference. And we are also increasing the fees to help make up the difference.
Note for future consideration – the bonds: Our current total mill rate is 43.668. (Multiply .043668 times the value of your home according to Jeffco and that will equal your property tax – just for the district – it does not include school, fire, roads, subsidizing Three Dinos developers, etc).
38.210 mills for the debt
5.458 mills for the general fund (operations – Retreat, trees, etc)
The maximum mill rate we can pay is 50 (subject to the Gallagher formula which is financial alchemy so don’t worry about that now. It could be a little higher than 50).
It takes 38.210 mills to generate the $2.4 million each year we are paying for the Brookfield bonds now. Those bonds were for $29 million.
Brookfield wants the board to issue another $30 million in bonds.
And we still don’t know what that money was spent on or what happened to the income from selling the lots which would normally pay for the infrastructure.
If our bond limit is maxed out to 50 mills, we will keep paying that debt until we have paid $4.9 billion according to the ballot measure Brookfield voted for itself in 2006.
And we will not be able to issue bonds for anything we need – like the work that will be necessary on the tributary area – or replacing sewer pipe – or other recreational areas – or more trees.
Brookfield took the right to vote on bond debt away from the residents in 2006. We need to get that right back through a ballot issue repealing what Brookfield did in 2006 – a ballot issue in May that will return the right of the residents to vote on bond debt back to the residents.
John Henderson