I'm Mayor Moore and I'm calling to order the special meeting meeting of town council on October 7th, 2025.

Will you please rise and join the budgetable meeting?

And two public course is individual with liberty justice.

Council member Pastor Melly.

President.

Council member Morrow?

Here.

Council Member O'Connor.

Here.

President.

Mayor Pro Tembell.

Here.

Council Member Hoback?

Here.

And you have a common way.

All right.

We'll move on to the approval of the agenda.

Do we have a motion to approve?

So move.

Second.

So I think we had the Mayor Pro Tem and Councilmember Hoback on the second.

All in favor say aye.

Aye.

All opposed say no.

All right.

We have an agenda.

We'll go on to public comment.

Do we have anybody who would like to speak tonight?

We have Jason Manley.

Okay, and I will read the script.

Jason, you can join us up here at the podium.

Um please remember public comment is not an interactive QA forum, but rather a time for you to state your comments on a particular item or issue.

Public comment provides the opportunity to discuss items that are not on the agenda or consent agenda items only.

Please sign up using the kiosk in the library.

When called upon, please state your full name and address for the record.

Public comment is limited to three minutes per person.

You'll be given a twenty-second warning when your three minutes are almost up.

At the three-minute mark, I'll ask you to wrap it.

I am a director in Erie Highlands District Number One.

I came to respectfully ask that this body takes the ability and appoints Josh Mom to our vacant spot.

We just really need the support of the town to use the articles given to it as the approver of our special district.

Uh members of our public have supported him.

I have emailed you out all the ability to see our recordings to see what dysfunction we're at.

So I truly need, and I'm begging for this uh committee or council to support us.

Um since June, we've only operated with four members.

This has calls us to be in deadlock multiple votes uh a clutter of times.

With budget season upon us, with needing to get into passing policy for other coming year.

We we're hampered.

We can't support our our residents.

We can't support a citizens.

And so as not just a board member or a community member, I am begging for this uh council to take action and support us and support Erie Highlands district number one as we continue to move forward.

I know there's one more question.

Hello.

My name is Ashraf Sheikh, 159 Piney Creek Lane.

And I'm also a resident of Erie Highlands.

And I'm also before the board here or the council here today to make a formal request for you to use your Title 32 powers over Erie Highlands Metro District One to appoint a replacement board member for a seat that has been vacant for well over the statutory limit of 60 days now.

Our board has been in a 2-2 deadlock for you know since June.

And it's mostly due to the actions of two specific board members.

The president and treasure of our board are currently holding us hostage.

Despite multiple chances to appoint a replacement, they have refused, actively refused to explain why they are voting against this board member and have not up until this last meeting agreed to any sort of process to fill that appointment.

Because they left a meeting without an adjournment, just left and denied quorum with a full agenda ahead.

And rapidly approaching our budget season.

They have acted on behalf of the district without prior approval of the board in both legal filings and in registering website domains for the district.

And as a result of actions like this, we've actually have an act of recall against one of the board members.

But neighbors from throughout the neighborhood have gotten together and donated their time and money to volunteer and collect signatures.

We've got well over 300, uh, which is the limit for a recall.

So we had our recall petition accepted for sufficiency on September 17th.

And so there's a 30-day deadline to set an election date.

So they just didn't show up.

And then during this most recent meeting, one of the director the director under recall um has insisted on a protest hearing, despite being informed that her protest is not legally sufficient, does not meet statutory requirements, and will cost the district thousands of dollars.

It's just an attempt to delay her recall.

So I ask you to end this disruptive and costly deadlock by appointing Josh Mall, a former board member who has many years of service to the community, both as a private citizen and on the board to this position.

He has widespread support.

Many, you know, these metro district meetings, very few people usually show up.

We've had meeting, we've had 80 to 100 people show up, many of them to voice support of him as well to fill this position.

So he has community support.

So we are just asking you as we approach our budget hearing in November that needs to be passed by December.

Um I ask that you appoint Josh so we can go through our process with an actual board that can make decisions, and that's not deadlock two on everything.

Um and we also need someone to help set this date for uh for a recall election without having the ability of two of the members who are working together to simply leave and deny quorum for any other decisions throughout for that for the board.

Um so once again, we help we ask that you use your title 32 powers, appoint a replacement board member, and help us move past this.

Thank you.

All right, any other speakers tonight?

We have no one else uh in the room or online, thank you.

All right, we'll move to our first agenda item, which is item 25 uh 517 special district review and policy.

And I will um I believe I've turned it over to Melissa.

Is that right?

Or to Sarah.

Um we'll turn it over to Sarah, and then we have we have a guest Melissa back, so I'll invite them up as well.

Okay, great.

Thanks.

You can believe it's this is not it.

And we'll tag team it here, just so you know the flow.

Oh, okay.

Yeah, no worries.

Whoever put that up.

All right, so this evening we're gonna be reviewing uh special districts uh apropos for uh the public comment we just received.

Um we are going to first provide an overview of what special districts are and then go into how we are um reviewing them and the policy that we have.

Um, and we're gonna look for input back from council on how we may or may not want to update the policy that we have for special districts.

So I'm going to turn it over to Melissa for Melissa Wiley for a very quick intro of our guest.

So I'm happy to welcome Melissa Buck here today.

We actually both went to grad school at the University of Pennsylvania together, and she won't say this, I'm gonna say it for her.

She's just incredibly brilliant, um especially when it comes to municipal financing.

And so she's really helped us understand metro districts and has a lot of great experience in the region.

So we thought it would be great to invite her to come and just provide you with just an overview of special districts, how they are in the region, just sort of that 101 piece, and then um Sarah and I will deep dive into our policy after you've had that overview on what some edits are you might want to make to our policy.

Great.

Sounds good.

Okay, perfect.

Um, should I just click or yes scroll?

Okay, okay.

Oh, there we go.

Okay.

Eventually I'll get this right.

Um, okay.

So as uh thank you, Melissa.

Uh, you're very kind.

Uh Melissa has been a great supporter of mine through throughout the years, and it's kind of crazy to think that we've known each other for quite this quite a while.

Quite a while now.

Um, but anyway, so um I again, my name is Melissa Buck.

It's pretty easy.

You already have another Melissa, you probably remember that name.

Um, so I've been working in public finance and government for almost 20 years at this point.

Um, and then specifically within Colorado for at least the past 10 plus years.

Um, and during that time, most of my time in Colorado has been spent working on special district financing, so not just metropolitan districts, but it could also be um like tax increment financing for urban renewal authorities.

But since Colorado has been such a growing state, that is where most of the debt issuances have been, and so as a result, most of my career has been spent with development finance from one sort or another.

Um, so I thought I would start um by going through the basics with council, and feel free to this is a conversation as well.

Feel free to ask me questions as we go through these things.

I know that this has was part of your packet.

Um, but you know, starting from the very top, uh what is a metropolitan district?

Um, the legal structure of it, it's an independent local government entity created under the Colorado Special District Act, um, Title 32, as was mentioned earlier today.

It's effectively a quasi-municipal corporation.

Think of it as like a mini town government with very specific limited powers.

Um, and it's created by petition.

So the landowner, in many cases, the developer, they petition the town or municipality that metro district is located in to establish that district.

It's approved by the town, and then it operates independent to the town's council.

Um, so the basic purpose of a metro district is to finance infrastructure for new development.

The core principle behind this is that development pays its own way, um, which means that uh future residents in the district pay for the infrastructure through their property taxes, not existing town residents paid out of the town's general fund to fund the infrastructure in that specific subdivision or development.

Um you might wonder why does this tool exist?

Infrastructure is expensive, long story short.

Um, the streets, utilities, drainage, landscaping.

I mean, you might be looking at upwards of 20, 30 million to put all of that in, depending on the nature of development, depending on the number of houses, but it's fairly expensive.

And so from a developer standpoint, they would obviously prefer not to um pay that up front at a cash equity.

And if they can, they want to seek the lowest cost of capital, which in many cases would be tax exempt municipal financing.

Um the metro district look at it as a financing tool where development pays its own way, and that um tax exempt financing is used for that.

You pledge the property taxes, and over time it repays the developer for the cost of putting in that infrastructure.

And it's in many ways, you can think about it, it's fairly equitable because the people that are actually benefiting from that infrastructure are the ones that are paying for it.

And that's what I mean by development pays its own way.

So typical powers and services.

But I'm just going to focus on what most residential metro districts, their powers actually are.

That's really their primary power.

They can issue bonds to fund upfront costs, build streets, maintain common areas, so on and so forth.

Less common, but you do sometimes see it, is fire protection, water source systems, although most frequently this is provided by whatever town or municipality that district is located in.

And then you might see mosquito control or cable fiber infrastructure.

What they don't do, they do not provide police services, they don't run schools, they don't normally enforce covenants unless it's specifically spelled out in the service plan, meaning they're not an HOA.

And so, and nor do they provide general municipal powers.

Are there any in Erie that have fire protection as part of the metro district?

I don't think so.

Probably not.

This is this is more common, like when you see the fire protection stuff, it's more common out in the mountains.

You might see something along those lines, but again, it's it's really specific to the service plan and the individual community what they want to see.

Yeah, because they are no, there's already a tax for fire protection.

Yeah, and there is, and there is stuff in the Special District Act where you can't duplicate the provision of services without a waiver from that particular entity.

So, for example, if you say, okay, I'm going to provide fire protection, you need to get a waiver from whatever fire protection district you're in order to provide that service.

Okay, thanks.

Um, and then so costs typically covered.

Um, it's really the first furry that you see here.

It's public infrastructure, streets, utilities, um, community facilities.

Sometimes that might be uh, you know, building out a rec center, but they can't build a private club.

I do want to make that distinction.

Um, so it can't be like a private golf members only club, it can be a recreation center, but um you can't use tax-exempt financing to build private facilities, if that makes sense.

It can be private to the district, though, right?

Yes, it can be private to the district, but it can't be um like a private for use club.

Um, and and like I said, this is this is just a financing tool and way to reimburse the developer for the upfront costs the developer has put into building out the infrastructure in that district.

Um, so common roles and responsibilities, we've kind of touched on this a little bit.

Um, I do want to clarify a little bit because frequently I get, I don't know about you guys, but I get a lot of questions from people about what does a town do, what does the HOA do, what is a metro district do.

Um so as I mentioned, the metro district taxes property owners through a mill levy.

It has debt and bonding authority, it finances and builds the capital infrastructure, and eventually it transfers all the infrastructure it has built over to the town.

Um the HOA, they charge membership dues, uh, they enforce covenants, design standards, they might manage private amenities, um, pools, all that sort of stuff.

And they, in most cases, but not always, um, they handle landscaping and common areas.

The town, on the other hand, provides the general municipal services, whether it's public safety or general pub general uh I don't know, town services, parks and rec, that sort of thing.

And it also is responsible for maintaining and operating the infrastructure once it has been transferred over to the town.

And the Erie is funded by general taxes, not district specific taxes, which is what the metro district is.

And so, and I'll go a little bit more into this as we talk about the impact on the homeowner.

But residents might pay, call it $2,000 a year to the metro district in property taxes.

They might pay $800 a year in membership dues for the HOA, and then you know, $450 in taxes to town of Erie.

So and these are kind of made up numbers.

But that's their that's their general, that's the general division of powers.

Life cycle of a metro district.

And so I thought it was it would be helpful to discuss how a metro district evolves over time because it helps you understand the dynamics of what's important and what's not.

So typically in phase one, as I mentioned, call it year zero, the developer will petition the town for a district.

And then you or staff will get a draft service plan, and you could choose to approve, conditionally approve, or deny that service plan.

Assuming you approve it, the district is legally created, the initial board is elected, usually it's all it's five people, and they're usually all affiliated with the developer.

In phase two, which would be the early development years, call it years one through three, maybe one through five.

Um, the district will typically issue bonds, um, tax exempt bonds to fund that infrastructure I talked about earlier.

Um, and then that infrastructure will get built.

And then you have the first homes to start selling, but the board is still going to be developer controlled, because the developer is still very much in most cases the um majority landowner, and you don't have a ton of residents that have moved in yet.

Um, in phase three, you start to see bigger um more build out, um, and then homes continue selling, residents move in, they're paying the property taxes.

The board developer might still control the board initially, um, but there might also be some shifting over to residents uh coming in and sitting on the board.

And then in phase four, where you have the transition, um, that's really when you have the transition from the developer-controlled board to a resident-controlled board.

Um, and this timing can change.

Sometimes it's when the development is 25% built out, other times it's closer to 50 to 60% built out.

It's really going to be specific to that individual neighborhood.

Um, and then lastly, in the in uh phase five, the maturity, all the debt is eventually paid off.

The infrastructure is turned over to the town if it hasn't already.

Um, and then you the district can decide if it wants to dissolve, or if it wants to continue with very limited operations and maintenance provisions.

Um, and that's really a policy decision for the board.

So long as there is debt outstanding, they cannot dissolve the district.

Um, so the critical point on this side is that really from formation through 15 years or so, call it, you're gonna probably have a developer-controlled board while the residents are paying taxes to uh repay that infrastructure debt.

Um, and this can create some potential conflicts of interest.

The developer, as you might expect, wants to maximize their financial return while residents want to lower their tax burden.

Um, and it's why what you guys put out in the service plan is so important because it sets the guardrails on what the developer or that metro district can and cannot do.

Um I'll just stop here and see if anybody has any questions before we go into policy and practical considerations.

So on the policy side, could we say that you have to start turning over the board when 25% of the homes move in, 50%, something like that, or is it 100% up to the developers to well, I think that's that is a policy discuss discussion for you guys.

Um, and later on in the presentation, we do talk about.

I did look at your guys' policy versus practice for other municipalities in the area.

Um, some places incentivize that it's they may not say by 25% and may not have that um hard threshold, but they'll say ASAP, you know, or um other places, Aurora, for example, is a lot more permissive, and they just allow it on there.

You also have to keep in mind developers don't want to control these things forever.

They they want to get repaid for all whatever they think that they're owed for the reimbursements, they want the development to be successful, and then they want to move on to their next project.

Um, they're not going to be interested in staying on this all the time.

Um, that said, there have been situations.

Um, for example, there is a client of mine.

Uh out on, I guess it's out towards golden.

Technically, it's Lakewood, but when you're driving out there, it feels like it's actually golden.

Regardless, um so the developer had controlled the board, and then they had more residents move in, and then residents started uh sitting on the board, and they're created this conflict as I talked about.

And the residents did not want to issue all of the debt that they had been authorized under their service plan.

And that meant that the developer had not gotten reimbursed for everything that it felt it was owed.

And um, they were really gearing up for litigation.

The developer um, to be perfectly frank, did a little bit of a boneheaded move and resigned from the board.

And so that left all the residents um in control, and they probably spent like three, four years going back and forth, racking up legal costs.

Um, one party saying you need to issue this debt and pay me, the other party saying uh no, we can't afford it, which I don't think any analysis would say that they couldn't.

Um, and then just going through what is the developer actually owed.

Long story short, they ended up settling not that long ago.

Um, and then the district did issue additional debt, but it wasn't the full amount that the developer had initially said it was owed.

Okay, and then another question that we don't need to answer right now, but when we get into the policy, is how do we set the mills?

Um because the more mills, the more money that goes to the developer for the infrastructure, the less mills, the happier our residents are.

Anyway, we'll get there.

And I'll just answer that really quickly.

Right now, Mayor, we have the rate of return for the developer at 12 to 15% at maximum.

So that helps us when we look at the performa, make sure that their the profit is not too much, basically.

And then we partner with someone like Melissa and her firm to help us review the pro forma, their rate of return.

Um, but right now the metro district policy is uh rate of return of 12 to 15%, and it caps the mills.

I would argue that when we review it, we probably want to increase the mills just because of the cost of development, but still pay more attention to what the rate of return is for the developer.

Yeah, and I may want to have the discussion or at least on the table on what if we reduce it?

And you know, you think back to the time pre-Vista Ridge, there were no metro districts, right?

I live in a pre-metro district and I pay a lot less in property taxes, metro district, metro district, no metro, no metro, metro district, and you have a metro district too, Emily.

Yeah, and so it creates this other issue in town, right?

With if we want to build a rec center going out to the voters for a property tax increase becomes more difficult because many people are like, that is way too expensive already.

Anyway, we'll get there.

Yeah, I mean, it's certainly uh a policy consideration for you guys.

Um, I mean you could also consider that it would just be development specific.

Um, I mean, to Melissa's point that not every development is going to need the full, I think your mill levy cap is 55 mills, 10 for operations and 45 for debt.

Not every single development is gonna need that, and that's gonna play out in your pro forma review.

Well, one thing that's my question to Sarah, but I do we have a lot of development entitled developments where that need a metro distribution.

Most most of them are already established, they may need adjusted or whatnot, but I don't I don't think we're at the stage we used to be where we're having a lot of probably the last five years that uh I've been on.

I don't know, but certainly not.

Yeah, we have not had a ton of metro districts requested at this point, but we have uh thousands of units that are entitled right now that can be built in that are in metro district areas, and then you know, Northwesterly is probably the most recent approved metro district, and that's about 1800 units.

So we have a lot of homes that are going to be placed into metro districts that are yet to be built.

25 gateway area would be one that might forward.

Okay, the biggest.

Yeah, the whole there's probably our gateway site, and then there's another site on the north as well.

So those uh sorry, those areas don't have a metro district or they're okay.

All right.

As far as maturity, have you seen many that have gotten to maturity?

And if so, does it always turn over the town?

Do they ever try to refinance and build more infrastructure or replace infrastructure or anything like that?

Um replacing infrastructure, that's probably more the town's responsibility.

Um, you know, it is it is something that I've talked about with some of my other clients.

Um so in a prior life, I used to do public private, like pretty large complex public-private partnerships, and in every single development agreement, you would have um handback requirements.

So basically whatever condition that infrastructure would be when you hand it back to the public entity.

Um, and that's not really discussed in service plans, nor do I I don't know how you would enforce it as a town.

Um, because in a P3, you can you know, you withhold milli like hundreds of millions of dollars.

So there's a huge incentive to make sure that things are um in the way that they should be.

Um so in terms to answer your question about maturity.

I mean, uh the most notable example right now is probably the football stadium.

Um that was a metropolitan district, it was set up to fund the construction and the infrastructure for mile high.

Um, and I'm sure everybody has seen the news, like mile high is moving.

Um, and so the thought is is that they will dissolve that metro district and turn that land back to Denver.

Um, you know, but it is I think the key thing with metropolitan districts is remembering is that they are financing tools, and so if you have a debt limit, um, however much they could possibly issue, they can't issue more than that.

Um there's only going to be so much debt that any mill levy can support.

Um legislation says that you can't issue debt for longer than 40 years.

Um in many service plans, you see things like if you're going to refinance that debt, it has to be a resident controlled board has to vote to refinance that, especially if they're going to extend the term.

Um, you also see things in service plans where the metro district doesn't have the ability to levy a debt service mill levy past 40 years.

Um, so there are all different ways that you can put guardrails in there that can be protective of homeowners.

Um it's just you know, as you guys go through this process, like various things to think about neighbor would be a guardrail as well, right?

Um, so most of the tape, most of them will have had a taper election, you know, back when the developer owed owned all of the land.

And so you'll see things like uh the amount of authorized debt would be normally two and a half to three times the amount of debt within the service plan.

Um, you know, they can raise taxes however necessary within state statutes, they can retain all of the funds from that.

So they would have you know thought about a lot of that stuff at inception before it gets turned over to residents when the debts paid off at maturity, and if they decide to do um operational maintenance uh going forward, that's typically for pools and landscape and whatnot, not for roads or right.

It's um it'll be laid out in that service plan, like what exactly they're going to maintain.

I mean, maybe maybe they provide street sweeping, who knows?

Um, but that's what the operations in Malevi will go for.

Um, most commonly I see it's um open space trails, parks, that sort of stuff that they're maintaining within the district.

Thanks.

So does the policy have a fixed number of EOS?

The policy?

A lot of the plan.

Um the plan the plan stays in effect until all the debt is repaid or until that district is dissolved.

So if in the situation you have repaid all the debt and you still have the operations after that, the district would still be in there and the plan would still be in effect.

So don't we know ahead of time how much we borrowed and how long does it take to repay it?

It's a fixed amount that goes every month like a payment, right?

Um then we said no, not quite.

Um, because the I mean, this this is getting a little bit into the weeds, but um the way most metro dirt bonds, that's what people refer to them when you don't really have anything there, and it's just like a field, and then you're waiting for uh vertical development.

The way most of those are issued is what's called cash flow bonds.

So there's no set principal and interest payment.

It's pay what you can.

So as the development gets more built out, you obviously have a lot more um tax dollars that could go to repay the debt.

Um so there's no set time unless you have uh a discharge date.

Um so frequently you'll see something uh, you know, regardless of however much is left on this bond issue, this loan, there'll be a hard debt date, call it December 31, 2052.

All the debt is forgiven after that.

Um, and that's that's how the bonds have been marketed, that's how they've been offered.

Investors understand that.

Um that's one mechanism to do it.

The other mechanism would be to um in the service plan say that you can only once you impose a debt service mill levy, you can only impose it for 30, 40 years.

Um, and then after that, there is no mechanism to repay the debt.

And so effective in effect, you have a discharge provision.

So the board can decide, okay, we're increasing the payment or when more forms go.

Um so the board doesn't decide that it will be um uh it's what's called an event of default in the bond documents.

So under the under that structure that I talked about with cash flow bond, the district, regardless if of its ability to pay principal and interest in full, um, it has to levy its maximum allowed debt service mill levy.

And so long as it's doing that and it's doing all the things legally allowed to pay these bonds, then they're not in default, but they do have to turn all of this money over to pay off the debt.

Um, and then basically until they're current in their um, until their current interest and current principal.

So they're not paying off accrued principal and accrued interest.

I probably should have mentioned that.

So with a cash flow bond, you typically have compounding interest.

So it operates a little bit like a credit card in that if you don't make your required principal and interest payment, it gets capitalized into your principal balance.

Um, and so the way that uh these bonds work is you pay off interest first and then you pay off principal.

So until you become current on your principal and interest payments, you have to use the maximum mill levy.

After that point, then you can lower it to whatever is necessary to repay that debt for that year.

So are all the metro district bonds set up that way where you pay off the interest first and then you pay off the principal?

Um it will be discussed in the bond documents, the vast majority of them are.

Um just like you know, with a credit card, for example, that you will pay off interest first before you start paying off principal.

It just does not seem to be a really good financial.

I mean, these these are well, these things are very speculative.

I would say the vast majority of metro districts blow up, you know, they really start not making the full principal and interest payment um, probably in year three or four.

And the reason for that is because IRS rules allow you to capitalize interest, meaning you can borrow funds to pay debt service for three years.

Um, and then after that, I you know, development very rarely uh fits whatever the projections are, and so you might start accruing it, and then at other times it like you know, development knocks it out of the park.

Um, so it's it's a way to compensate the investor, the bondholder, for taking quite a big gamble that they may not get their principal, they may not get repaid.

I guess I need to understand the risk a little bit better because I was thinking of it the way that uh council member Pastramelli was thinking about it, that it's kind of like a mortgage, and you're paying principal, you're paying interest along the way, but at least you're paying down the principal.

In this particular case, if you get behind, you could start to increase the principal.

Creating uh a longer term issue and challenge.

Yeah, compounding interest is always going to be um always going to carry that risk.

Uh and with these types of debt, they are highly speculative.

Um, they're restricted to pure institutional investors.

You can't, like you and I, as retail investors couldn't go out and buy a dirt bond because it is speculative, and there is a good chance that you will lose your money.

And that's why the bonds are structured that way, because honestly, I don't know that you would find an investor that would buy 30-year fixed rate debt, um, current interest bonds, like you're talking about, where it is kind of like a mortgage.

Um, they probably won't buy that until you've hit, I would say, at least 40, 50% of build out.

Um, and typically when you hit that threshold, you can get a rating, get a credit rating on that.

So your cost of borrowing goes down pretty significantly.

Um, and then you can issue bonds because in the way that you're talking about, because you have a greater certainty that you will be able to make those payments.

Right.

Okay, so they're backed by uh property taxes, however, the risk is if you don't have homes being built.

And now they've got the infrastructure in the ground, they've got to pay on it, and there's nobody to pay on.

Correct.

Can we use bonds moving finance?

Yes.

Yeah, they they can be refinanced.

Um, you know, they can be refinance however is laid out in the service plan, uh, whether it's you know, they need a resident controlled board to do a refunding, or um, and that's typically only if you're extending the term.

If you're maintaining the term, like you've got 20 years left on a bond issue and you want to refinance and you're not extending it, then you know you could do that for cost savings.

Um, but but yeah, you can definitely refinance.

Brandon reminded.

Okay, I'm gonna keep this going.

Okay, yeah.

Um, okay, great question so far.

Okay, so this I'm gonna try to go through this um a little bit quickly.

So um, what you see before you are just other development financing tools.

This does not include like a downtown development authority or a uh urban renewal authority.

This is simply stuff at the town's disposal.

Um, so essentially you've got four options.

You have the metro district, as we talked about, which is developer initiative initiated and eventually resident controlled, and it's funded by the property taxes within the district only.

Um, so the pro of this is that there's no town money required.

The develop the infrastructure is developed, sorry, delivered early, and the risk is actually transferred to the district.

The downside of this is that the homeowner taxes, typically for 30 30 to 40 years is going to be a little bit higher.

There's a complex government uh governance structure, and then you're gonna have a developer that controls um debt issuances and the terms regarding that in the forefront.

The second option would be developer cash cash pay.

Um, so the developer funds whatever out of its pro forma um and then recovers the cost through higher um home prices.

Um obviously there's no long-term tax obligation for residents, and it's pretty simple, but um you're gonna need a developer that's got very deep pockets, and then you're gonna have a house that is a little bit more expensive than everywhere else.

And so it could slow the development timeline.

Um, the other side of this would be town-issued debt.

So a general improvement district is most frequently what you see.

The town creates the board, creates the district and controls it.

You're the board.

Um, and it's funded by property districts in this district only.

The town maintains control.

Um, the residents still are not town residents who don't live in the district, aren't going to pay taxes on that.

The downside of this is that the debt goes on to the town's books.

It requires a public election um administrative burden on the town.

Um, and then the last way is basically if you pay it through uh either town issue debt or the general fund.

So just kind of doing a reality check on this.

Most developers would prefer metropolitan districts because it shifts the cost and the risk to the district.

Um, and quite frankly, most developments wouldn't pencil financially without the districts.

Um, developer, most developers can't afford to pay the 20, 30 million up front to put in the infrastructure for the district.

The town GIDs give you control, but it is something you have to think about the administrative burden on your staff, and if you can get voter support for it.

And then if you fund it out of the town's general fund, then development does not pay its own way, and that town residents are going to be funding or subsidizing development within that district.

So metro districts are effectively the path of least resistance in getting development built.

And then the question kind of comes into as you've guys already started talking a little bit, is what's in the service plan and the safeguards put in there.

So key benefits and challenges.

The benefit is you have infrastructure that's delivered a lot sooner.

The neighborhood is generally completed a lot faster.

And the costs are localized to the beneficiaries, meaning the residents within that district.

And then eventually you will have resident control.

So they can make decisions about the residents, once they control the board, they can make decisions about their governance and what they do or do not want to do.

So, and then you do still have developer control during that critical period.

So I'm gonna skip on to a little bit of here.

And this is not representative of what Erie's policy is, which caps the mill levy at 55 mils.

So what you see here is just you know, wanted to illustrate the impact on the homeowner.

50 mils is what's laid out in state statutes for debt service.

Uh, and then 10 mils is commonly what's charged for operations.

So if you had a house that has a market value of $500,000, you'd be probably looking at about $2,000 a year of property taxes.

Um, and that's pretty significant when you go down the line.

In most places, your school district would have the largest mill levy and have that largest property tax component associated with it.

Um so if you live in a metro district, then you would have a property tax bill that's roughly 200,000 more than what your um whatever the comparable house would be outside of the metro district.

$2,000 more.

If it's 50 mils.

Oh no.

Um, but this is I think one of the reasons why Erie's policy has disclosure requirements, um, because many times people don't know what they're buying into.

Um the other thing I see pretty frequently is um people get a property tax bill or they get shown a property tax bill, and then the next year their property taxes double.

And what they don't understand, especially if you're buying new construction, is that it's a um it is a partial assessment.

Um, and so once your house is fully moved, like built, you're moving in and all that sort of stuff, then you should expect to see your property tax double.

Yeah, and I think we should also point out that this charge is done on $500,000, but our homes in the area are probably I don't know what do you know what the average is $800, $800, $700,000.

$7500.

Okay, and so, and we know we have some over a million, so if this is a million, the metro district alone would be $4,000.

Yeah, yeah.

Um, so council's role.

Um, state statutes are pretty clear with what you have to do.

Uh, you can choose to approve it.

Uh, you can choose to disapprove the service plan, or you can choose to conditionally approve the service plan, subject to um whatever condition that you've put in there, whether it's a modification or additional information.

Um, and so the key thing on this when council, when you're looking at a service plan is everything related to that metro district is going to be laid out in that plan.

Um, and once you've approved the plan effectively, that horse has left the barn.

You do not have the ability to go back in and change things.

So long as the development is following the terms of the plan, they're effectively operating as their own mini town government.

So I, you know, it's long story short, when you're approving the service plan, you're essentially authorizing the tax obligation for the people that will eventually live in this district.

And I want to also emphasize metro districts are simply a tool.

They're neither good nor bad.

And so with if you have strong safeguards in service plans, they can work really, really well.

Without having those safeguards, they can you know lead to a whole bunch of negative press, as anybody that reads the Denver Post probably knows from the past few years.

And so, long story short, it's really what your policy, whatever your guys' policy is that's gonna drive a lot of these decisions.

Um, and so from that, I I did want to spend a little bit of time just talking about how Erie's approach compares to some of your peer communities around in the area.

Um, I'm not saying anything is right or wrong, it's just simply a comparison of where you guys stand based off of what various communities, their priorities and their uh approach to the circumstances.

And so with that, I'm just gonna focus on four, because there's a bunch of stuff here.

And if you have any other questions, you can always ask me after the fact.

Um, but anyway, the biggest one here is probably gonna be mill levy caps.

Uh, you guys have 55 mills, 10 being allocated to OM.

Um, I will say Boulder, uh I'll just kind of go left to right.

So um, you have what you guys do.

Fort Collins takes a fairly restrictive approach to uh metro districts because in effect they don't actually want them without saying that they don't want them.

That's effectively what their policy says.

Um, Boulder does not allow metro districts for residential residential metro districts.

They do use them occasionally for commercial purposes, but in effect, Boulder has said not happening in the town.

Um, Denver will use them very selectively, and so their uh mill levy cap is uh 50 mils, 10 being allocated to OM.

Aurora, their policy is basically so long as a service plan fits their model service plan, they will, in most cases, if not all, approve it.

So they're very permissive because their method, their uh goal is maximum growth and growth pays its own way.

Um, and then lastly, Commerce City, they recently changed their policy.

They had been on a moratorium for the past couple of years and then just recently changed their policy to allow metro districts, um, but with fairly strong oversight.

So what this means is that you guys are kind of in the middle.

Um, if you think about Fort Collins being on the more restrictive side and a role being on the more permissive side, you guys are kind of in the middle of that.

Um I think the question for you guys, as you talked about, is really what what do you want to set that if you want to even have uh a mill levy cap, but what exactly does that mean for your community, and how are you going to evaluate if it's necessary or not?

Um then, oh yeah.

So in the Boulder scenario, there's not a whole lot of building in Boulder, but there is building.

And so basically, if a developer home builder wants to build, they just front the cost and make a match.

Build into the home price.

And that and that tracks with what Boulder has done historically.

The state did strike down uh development caps and growth caps, uh, but for a long time, Boulder was essentially no growth.

Um they did not, they like things just the way they it was, and they did not want to have any growth.

And so you adopt policies to implement that.

So with our residents uh signaling that we're growing too fast.

I mean, there's an argument to be made that we can adopt a Fort Collins-ish type policy, maybe.

Yeah, um, so Fort Collins, their policy is it sets a pretty high bar for having metropolitan districts.

In effect, they don't have the point system that you guys have.

I think from my take reviewing your guys' policy versus some of the other folks, you guys are kind of in the middle between super permissive and basically saying no.

Um Fort Collins, they it's a lot more subjective.

There's no sort of point system with that.

It's just, hey, tell me how do you fit our community goals and you know what exactly you're gonna do for us?

And in essence, that has meant that they haven't had metropolitan residential metropolitan districts.

Yeah, they're growing up there, or they're new.

They are they are growing.

Most of the development has been kind of on the outskirts.

Um, so for example, Timness, which is literally across I 25, um, they've been growing like crazy because you can buy housing there, whereas in Fort Collins, and meaning you can buy, you know, your four-bedroom house with a white picket fence and so on and so forth, which may be a little bit more expensive if you were in downtown Fort Collins, or maybe it's just not you can't find that in the city.

So does Timnith have a metro district?

They have quite a number of metropolitan districts, um, but they don't have any set policy.

It is a case by case basis.

No mill levy cap in terms.

When I was talking with um Fort Collins several years ago when we were crafting this, um, they did say that they did still have growth, but that the projects weren't as large.

And so the infrastructure liability for the projects was not as great.

And so it's um a little bit different when we're looking at much larger scale of some of the projects we see in Erie versus some of the smaller scale.

That's a really good point.

Um, you're not gonna see a development of 1800 homes in Fort Collins.

So, what if we went down that path?

What if our developments were?

I don't know, how big are the developments for Collins?

Are they 200 homes?

Are they gosh?

I can't remember.

I think maybe the maximum one was something like 40 acres in comparison to ours that are 400 to 600 acres.

Um it's just the scale of the properties that the developers are taking down.

Just a different model.

Um land costs might also be higher in Fort Collins.

Um, so that also plays into it as well.

We can um, if you'd like sort of jump to what our policy has now, and then um kind of talk through more what you all might want to see.

So um as Melissa mentioned, uh, you know, where our policy is in the middle, I wanted to talk about some of the key aspects of it.

Just to give you an overview, we developed it over 14 months.

We did a lot of research with other municipalities.

We also talked to people who live in metro districts, we talked to developers, we tried to bring all the stakeholders to the table.

And what we ended up with were sort of these key elements.

So, one, we really wanted to ensure that prospective buyers were educated that they were in a metro district before they signed all the papers at closing.

So we felt like when you're given 60 papers to sign at closing, and one of those papers says you're in a metro district and your taxes are gonna be higher.

That's not the best time to tell you.

So we put in the metro district policy that residents must be notified um 10 days before they put their earnest money down because then they have an opportunity to be like, actually, I can't afford it for whatever it is.

But a lot of people move to Colorado from other states and they have never heard of a metro district and they have no idea what that is.

And so um, we felt like what we really need to establish was that we let people know.

I do want to give a lot of credit to Heidi Majeric, who is a big developer in this process with us, and she developed a whole process for letting people know as they moved into Westerly and showing them what their payments would be, and so really consider that um a nice best practice.

Um, we'll confirm that the taxes imposed by the metro district result in clear public benefits and they're not excessive.

So to your point, Mir, really looking at that um RO like return on um ROR.

So, what is there gonna be their profit and ensuring that it's not excessive to residents who are being taxed?

Um promote development that aligns with the town's strategic priorities.

So that was the impetus behind our point system.

And so that's really something for you to look at as a policy update as you look at town priorities.

Does that point system still reflect your priorities, or is that something we should start to modify?

But you know, it looks at things like sustainability, like parks and open space, um, affordable housing, but Azure Priority Shift, you might really want to look at that point system.

So the idea is that whatever we're building is in alignment with who we want to be as a town and what we want in the town.

Um, notification time and locating location for a meeting.

So we did see um some behavior from some metro districts where they were not notifying residents when there was going to be a meeting, or the meeting was in Denver, even though the metro district is an Erie.

And so we just wanted some consistency in the policy that if I'm in a metro district and you're having a meeting, I should be able to attend that meeting.

It should be maybe like at 6 p.m., you know, just being resident friendly, like our um own council meetings are so people can attend and participate, and that's really clear.

Um disclosure and information about um home buyers and tax obligations.

So I talked about that and how um Westerly sort of became the best practice in that.

Metro district board membership requirements to ensure resident participation.

So we had seen some examples and in our stakeholder interviews where residents were not able to participate um and actually have a voice and and that that whole process that Melissa was talking about.

So that can turn into something.

So we put in our um policy that we expect that when they submit to us, they will say when that resident ownership is going to occur, and they'll be able to outline that for us.

We can certainly make that more detailed or restrictive, but we do require that they let us know when residents will be able to participate.

Um maximum mill levy that for infrastructure maintenance as we've already talked about, and then um that last piece is just sort of that bigger piece of your priorities and making sure that your priorities are in some way in there so that staff has something to measure against to make sure that we're adhering to council priorities when we're looking to bring this to you all for approval.

Thank you, Melissa.

And I will just go over.

I think we just went through that slide.

So when somebody applies for a metro district, we do evaluate the service plan.

Um, and not only do they need to provide a point, the service plan and financial plan as part of that, they also need to have to craft a letter kind of talking about what their public benefits are and address the point system.

All of that is taken in.

We evaluate that uh multi-departmental process, and um we have a third-party review of the service plan to make sure that it is financially feasible and that the mills that they're asking for are reasonable and not excessive.

And so they do look at the um return on investment for the project.

They ever ask for mills less than our maximum.

Not in well, I've only reviewed maybe two or three, and I uh one did, yeah.

So just to give an example of like the 45510.

I mean, I would kill to get to 5510 now because we're I'm at 77, so it's like how does that happen if we have to do that?

It is adjusted, it's it's been adjusted.

So depending on when your metro district was established, you can adjust the mill levy up to take into account changes in the assessed value.

So, for example, um, it used to be I mean, gosh, I don't even remember Malcolm, you probably remember what was it?

The latest one now it's 6.7% residential.

Before that, it was seven point one four 7.14, and then before that it was like 7.96.

And I think a long time ago it used to be like 12% of your market value.

So depending on whenever your metro district was established, let's say it used to be 12% of market value.

You can adjust the mill levy to hold the revenues neutral.

So they would still generate the same amount of revenue, but increase your mill levy.

Yeah, yeah.

The I think ours is also hard because we're one of the earlier slides.

Yeah.

Covenant controls in our metro district.

So that was also an adjustment to be made for that.

I think there's a few others that have that in town here, but it's not seen very often.

Yeah.

We've actually only approved two metro districts under our policy.

All the others were approved prior to the policy being adopted.

And what year was the policy adopted?

2020 2021 and 2022 is when we we were in 2021 and we implemented in 2022.

And we did it because you know, we are hearing these things from our residents and also from other municipalities that that they thought we should, you know, really set some standards and policy that you all could compare to or adjust to make sure that um you know things didn't get predatory or whatever.

We we have had in our metro districts requests to set the date to um I'm I'm not remembering the details, it's been a couple of years, but back to 2017 in relation to um where the um tax rates were.

I don't know, Melissa, if that's something that you've seen.

Um I mean it it kind of depends.

Uh you mean the gallagherization of the I think so.

I'm sorry, I'm not yeah, I mean, it's it's gonna be laid out in that service plan, honestly.

Um I don't recall, I don't know that you guys have that in your policy.

Do you know we have I don't think they do, yeah.

That's what I'm asking.

Yeah, I mean, it is it is I think for for a number of developers, and certainly when you sell these bonds, I mean the state continues to play around with assessment ratios.

Um, and that can negatively impact the ability to finance infrastructure if you've gone from like 12% and you've just cut that in half, you've cut your pledged revenues in half.

So it can take a lot longer to repay that debt, and then you have to think about creative ways of how you're gonna do that.

Gallagher residential assessments went up, right?

So the assessment ratio went down, so the gallagherization, the mill levy adjustment went up.

Yeah.

So all right, I'm gonna keep us going because we're a little bit over the hour we had allotted.

So essentially we review these um internally with staff and we make a recommendation and take that to town council, and you have all of the information that we present to you to evaluate, and from there you can determine if you want to approve the districts or not.

Um you you do have the option.

I think as Melissa said that you can not approve it, they can come back with a different structure again.

So it's not like they forever are put to bed.

So and then we do have annual fees and reporting requirements as part of our policy.

And that's one thing that oh used to have in a computer to um switch slides.

So I will say that we did when we adopted this policy, have the idea that we would come back in on a regular basis and be able to adjust elements of it in relation to the fact that we know the market and development is dynamic and some and actually the legislature is dynamic, and that has also influenced some of our desire from staff level to come back and at least update the point system because there are um points in there that are now just state required things that need to be happen, or Prop 123 came out after we um adopted this in 2022.

So we have some adjustments where we think it would make more sense to align better.

Um so we internally have some ideas, and uh well, we don't have to go into them in detail, but from here we're hoping that council can weigh in and say what you know what would you like us to evaluate and bring back.

So the point system, you didn't put a slide in here for that.

Do we have that somewhere so we can look at that?

The metro district policy is actually online, and so we can send that out to you.

And if you just scroll to the bottom of the policy online, it has the point system.

So we can email that all um out to you.

We didn't think you had to like decide that today.

You might want to go back and just look at the policy and look at the point system and let us know your thoughts.

But we first wanted to give you a just an overview.

Some of you are very familiar, like Mayor Pro Tempel has been in a lot of these conversations, but for some of you, you know, it's nice to have this high-level overview, and then you can deep dive with what you want to change in the policy.

And it is also on your uh one of your attachments to this agenda item.

And um, um, so I was looking over the point system.

What are the most commonly selected um items on here?

Well, I guess there was only two points approved.

But I mean it seems like there's you know the 10% home ownership at uh less than 120 AMI that gets you 10 points and takes care of that.

I I would say the attainable housing, maybe not in the ownership, but in the rental, the um housing diversity, ADUs, um, just diversity in general.

Flooding gas plugging more and gets.

Oh, yes.

So with regard regarding um plugging the wells, just can that be paid out of the um what's collected under that mill levy from the metro district?

Because it's not public improvement.

Yeah, I don't think that's a considered a public improvement, but it would be something the developer brings as of a proposal.

Uh and I don't know whether we include it in the uh service plan or not, but it was a commitment from the developer, and then we incorporated that into the consideration of development review when the development came forward.

Yeah, so things like affordable housing or contributions to affordable housing cannot be paid out of the metro district proceeds.

So it is something that is just part of the overall development package.

We record that in a development agreement, and then we track it as development occurs.

This is why I asked if the um mill levy was always the max because you could do a switch, right?

You would never know that they were doing a switch.

But they could say, okay, great, I can get lots of points by saying I'll do affordable housing or I'll do oil and gas plugging.

I can't pay for that directly to the metro district, but on my pro forma, I it doesn't cost to me.

It will then drive down my profitability, which then says you should give me more mills to get my profitability up.

And so how do we how do we ensure that uh we're not padding profitability by getting lots of points to do these other things, right?

There's there's no free lunch here, right?

If if we're encouraging them to do affordable housing, plugging wells, sustainability, the homeowners are gonna pay that somehow.

The pro forma review that we have an independent third party do uh looks specifically at the cost of the public infrastructure.

And the mills are uh and based on the estimated return on the development from the houses, you know, they look at per lot sales rates that are typical and evaluate what mills they're asking for to make sure that uh it's balancing out.

I'd love to see one of those proformas for maybe one of the metro districts that is approved.

Is that something that's public uh it's confidential and it could be?

Yeah, I don't I don't I don't think the reviews themselves because it's typically a negotiation, right?

But if we are signing off, we the council, we should be able to see that, right?

Let me look to see what we have provided council in the past.

Um to see what I can find.

So because there is some confidentiality um requested by the developers when they're handing over performers, but the finance plan should be something oh, the finance plan is is a published, that's a public document.

Yeah, well, my point my point is that if if the pro forma is important, but if we as the approvers can't see the pro forma, we just have to say Bob said it's cool.

Okay, then what's Bob's credentials?

What's what is on the line for him, other than I'm getting paid by the people that want me to say it's cool, right?

I did you can see where I'm going.

Well, but uh the town does hire the third-party reviewer, so ostensibly that's more objective and not provided by the developer.

Okay.

So we make the developer pay for it through their fee to apply for getting a metro district, but the town retains the three-party review.

Yeah, I part of my skeptic, I you know, obviously, I appear skeptical of all the metro districts, and that is only because the developments that were built before metro districts they got built somehow.

Then all of a sudden, um, I think Vista Ridges, which was I believe the first metro district in Erie, I think their mills are relatively low, and then somehow we got to 77 mills, and I think the developers will get take as much as they can if they can prove their profitability.

And and I just want to understand how they prove their profitability is under what was it, 15%?

12 to 15%, which what we now have in the policy, but that could be something we look at too.

I don't know, Melissa.

Do you have a sense of what a developer feels like is good profitability right now?

Is that still the range or um I think that that's probably still the range?

I mean, certain places you're gonna be riskier, you're probably gonna need a higher rate of return to do that.

Um, I also say that with metro districts, you didn't really see that used prior to Tabor.

Um Tabor really created a lot of restrictions on the town's ability to finance debt and put in infrastructure.

And so, you know, if you are growing significantly, then you have to find other ways to do it.

And that's that's really one of the biggest reasons why they exploded and grass.

Okay.

There's also things, oh sorry, okay.

There's also things that I think add cost that you know, really the to your point about the uh the development, you know, that that those people there uh foot the bill for the the improvements to that area, but we've done things where you know that stretch of Erie Parkway from uh uh pretty much from uh Briggs to or sorry from yeah, from Briggs all the way up to uh uh County Road 5.

I mean that was paid part of it was paid by Erie Highlands, part of it was paid by Colliers Hills.

So we've done things that there's improvements that every resident has, but they're being paid for by those metro districts.

So and that's one of the things that Tabor kind of impinged abilities and towns to do those things.

So I think municipalities have kind of taken advantage of metro districts when hey, we can you know have this really cool road and and not everyone's paying for it, so it's kind of balancing act, yeah.

Okay, so things for us to think about are the point system.

I found the document, so got that.

Um whether we put a cap on the mill levies, and if I understand you right, if we put a cap on it similar to Fort Collins, which is just a little bit lower, then that is a maybe a disincentive to develop here potentially.

Yeah, I I think that's ultimately what it comes down to is how much development do you want to incentivize within your community?

Um, as I mentioned, Aurora is very pro uh development, um, which is why they you know approve the vast majority of metro districts.

Um, and then you have Boulder, which doesn't really want development, or at least not metropolitan district type of development.

Um, and so they they don't really allow this.

And obviously, that's that's a question for you guys on how much you do want to incentivize it.

Um, you know, the other thing I would suggest that you might want to take a look at, and I don't recall in your policy if you do have anything on developer reimbursements.

Um Commerce City did just change its policy, they lifted the moratorium, but as part of their policy change, they said uh they capped developer reimbursements at 80 percent.

Um 80 percent of whatever infrastructure costs and that sort of stuff.

So the developer has to put in 20% equity into that or build that into its pro forma.

So it would be something for you guys to consider um if if that was something else that you wanted to do.

Um, and that and that goes a little bit more into the amount of debt that you guys would authorize within the the service plan too.

Do they do away with the profitability check then?

And they basically just say they talk about profitability, whether it's right or wrong.

I don't know that they go that far into doing a pro forma review.

Um it's still like a case-by-case basis, so they're cautiously stepping back into the metro district game.

That's interesting because if we went down that path and it was the raw cost of the sewer pipes of the water pipes, the roads, and we can estimate that, and we said whatever percentage of that is what we are saying, okay in a metro district, it puts some of the risk back on the developer um to build the project as opposed to putting all the infrastructure risk on the investors, which then creates this model where the investors will only invest if you pay interest first.

Um and then there's the risk that you don't pay fast enough, so now your principal's growing.

Yeah, I guess it gets pretty complicated.

Um, you know, I I would say you think about the mill levies too within like if you put in a mill levy cap, if you're going to uh if you're going to limit the amount of developer reimbursements as well.

If your goal is no development within URI, then sure, you know, if you lower that cap and then put in a limit on the developer reimbursements, that's practically speaking what's going to happen.

Um, but you know, like I said, this is a policy consideration for you guys, and there's probably some good middle ground on here.

I don't think anybody is looking to stop the growth, but there's definitely pressure to say, whoa, you know, slow down until we get you know our rec centers over capacity, our police station is overcapacity, our our public works facility or uh parks and rec facilities are over capacity.

So we haven't kept up with the growth.

And so that has people concerned, rightfully so.

So one question I have about um our policy with with uh with resident um participation and metro district boards.

So um kind of along the lines with the two gentlemen that spoke in public comment, and similar to what you said about the analogy of that were there were residents that weren't allowing debt to be issued to avoid those things.

Can we have uh uh in our policy?

Uh obviously I uh want resident participation, but uh I think it's important to hold elections uh if those people are on there and and not just appointments.

Uh I think that's a problem that we've uh that we've seen um hopefully can avoid us having to go clean up afterwards.

Something to consider too.

Elections are really expensive to run.

They are, but you know to the two gentlemen that spoke earlier that that was a cost saving measure and it ends up costing more in the long run.

So I guess they're not elections aren't required, they aren't required.

No districts, so some metro districts, some of them.

Who's appointing them?

The the metro district can appoint.

Yeah, so in the beginning, the in the beginning, the developer uh it's developer controlled.

Um so the developer appoints folks on behalf of the metro district.

Um, and then if you uh honestly, the biggest issue I find in most metro districts is even filling board positions.

Um, frequently you'll see a metro district that's got two or three folks that sit on the board.

Um so long story short, the district can appoint it if there's a vacant seat.

If you can test it, then you have to hold an election.

Okay.

The district being the existing board, basically, right?

Yeah.

So would it be possible to put together um suggestions for us?

Maybe we have what we have today, and maybe there is a more liberal um plan that would allow us to grow faster, and then maybe there's two that would allow us to grow slower, one slightly slower, and one maybe significantly slower, taking everything we've heard.

I mean, it just feels like there's so many pieces that I'm thinking that if you can give us some something to look at, and then we can maybe discuss some of those options.

Yes, I can come back, uh work with staff and um and town management to we'll we'll come up with what are the elements of the policy that we'd want to look at in terms of the options.

It's not going to be everything, it might just be mill levy limits and a few other things.

So we'll identify that and come back in a when we can get back on the agenda for you guys.

The point system is anybody else doing a point system, or is it very unique in that way?

I think for Collins may sort of informally do that, but they don't have it as part of it.

They don't have it something we could look at to compare to.

Although we were kind of modeling it after Fort Collins approach and saying you need to have sustainability measures, you need to do affordable housing.

So I would love to see whatever they have, even if it's not formal, if they have something that's shareable.

I feel like they did several years ago, but they may have modified that.

And I would say, Mayor, to the different options we could come back with that.

Two other things are to really look at the point system, make sure it still aligns with your values.

I mean, we can look at other municipalities and provide you that information, but it's worth taking a look at that.

And then to Mayor Pro Tem Bell's point, is if you have some experience or you've heard from residents on some concerns and you want us to look more into like this particular example, let us know that, and then we can also build that into the options.

Like we research more about elections or the resident participation, and here's our suggested language.

So I know many of you live in a metro district, so I think it's worthwhile while we're working on this to just talk to people about their experience since we can build in that stakeholder engagement with you.

As far as direction, I would encourage you to look at the survey results.

I think that that at least gives us a place to start.

With the point system, exactly as a starting place.

And if you give us a few examples, I think that could be a place to say, hey, we took into account the survey results that said this.

I don't think anybody's looking for the boulder solution.

One thought for the point system is so I know the like say the pool facility in a metro district can't be private, it has to be accessible to the public, but it's usually a high cost.

I mean, maybe something could be uh point awarded for a more um uh cost-friendly um entry fee by other residents outside of the district, maybe encouraging to take some pressure off of our recreation facility.

Just a thought.

And a second thought completely different from that.

Um, thinking about Erie Highlands, I thought two of the districts were a sidewalk and a street or something like that.

That was a control district, yeah.

I don't think we've approved one since then.

So that that's a different structure.

Um it's it's referred to like a master and servant district structure.

You guys don't tend to have those.

Um, and and really the markets moved away from that because of you know, transparency concerns and um a lot of political pushback.

But effectively, what you have is a multiple district um structure.

The master district is typically developer controlled.

Frequently you see this structure in like a large master planned community, and so you'll have I mean, like a hundred square feet that'll be district one.

Um, and the developer will always own the land there, at least until the debt is all issued and um you know reimbursements are paid and so on and so forth.

The other districts, however many they might be, so call it two, three, four, or five, however many, their sole purpose is to levy taxes and to remit it back to district one.

District one is the one that will issue the debt, will make all the policy decisions regarding the other districts, so on and so forth.

Um, it's it's not a structure that you see super common anymore.

And like I said, it is more frequently used with huge master plan communities because you want to be able to, as a developer, you want to be able to see your development happen.

And as you might expect, um you have phases of development.

So you have phases one, two, those get built out, those residents are paying taxes, and then you still have infrastructure costs for phases three, four, five.

But you want, if you're living a resident, you're living in phase one, you want your property tax to go down.

You don't want to issue any more debt.

But as a developer, you still want your entire development to happen.

So that's why you generally see that structure.

Um, but like I said, it's not super common anymore.

And and does would a town council approve that master district?

Yes.

Okay.

Okay.

Well, thanks for having me.

Sorry for uh going a little over time.

Okay, we're gonna move on to our next item, which is 25245, the draft uh resilience action plan presentation and discussion.

One point, what's that?

Almost one still good.

Thank you.

Uh just guess though.

All right, cool.

Um let's see.

Uh we have both uh Emma Emma Marino and Erica Thornley.

Um, which one to take the lead?

I will kick us off.

Okay, great.

So um good evening, Mayor, Council members.

We are excited to be here with you this evening.

Um my name is Erica Thorley, sustainability manager with the town, and I use she, her pronouns.

Tonight we are here to present to you the town of Erie's first resilience action plan.

This plan is a result of an exciting partnership with the CU Boulders Master's the Environment Program, graduate program, and three fantastic students in this program.

Before we begin tonight's presentation, I just wanted to make sure um that we all get a chance to introduce ourselves.

So Emma.

Yep.

Hi everyone, I'm Emma Marino, sustainability and water conservation specialist with the town, and I use sheher pronouns.

Good evening, council members.

My name is Stephanie Correa Diaz.

I use they them pronouns, and I'm a second year master student in the Masters in the Environment Program at CU Boulder, studying renewable energy and urban resilience.

Hello everyone, my name is Sean Lee.

I use he him pronouns.

I'm also a second year Masters of the Environment uh student at CU Boulder, uh studying urban resilience and sustainability and sustainable food systems.

Good evening.

My name is Adam Morata, and I use he him pronouns.

And I'm sure it will not come as a shock to interview to hear me say that I'm also a second-year graduate student at CU Boulder, and I'm studying urban resilience and sustainability.

All right.

Well, we uh over the next 20 or 25 minutes or so, we have um a few things that we'd like to go over with you tonight.

Um, the first thing that we're gonna do is just delve into the masters in the environment program a little bit to give you all a little bit more of a background on um the program that we're part of.

After that, we'll provide a little bit more context for the project and uh what we've been doing over the last few months, sort of our methodology, and then we'll dive in uh in a fair amount of detail into the vulnerability assessment that we created earlier in the process and bring out some of those findings from that uh assessment that we did after that.

We'll focus a little bit on some of our community engagement efforts that have taken place over the last few months, and then we'll wrap things up by talking about the plan itself uh and just kind of at a at a high-level overview.

Um, something that I'll make sure to point out is uh we should have ample time at the end for any questions you have if we do want to get into a little bit more of the details.

Um, there will be opportunities for that.

And if there's anything that we're unable to answer during the course of the questions, then we'll make sure to follow up as promptly as possible to provide the information you asked for.

Sound good?

Yeah, great.

Great.

So just to go into our program called Masters of the Environment or MEMV for short.

It is a professionals master's degree program that is applications focused and supports students to provide them the skills so that they're able to solve both environmental and sustainability issues within the nonprofit, public and private sectors.

MEMV has five degree tracks, which we call specializations, and those focus on sustainable policy, the outdoor industry, energy, food systems, and urban resilience.

Right now, the team is completing our capstone project with the Town of Erie Sustainability Division.

And so we started that in January, January, and we'll be wrapping that up towards the end of the year.

All right.

So the purpose of the project was to create Erie's first resilience action plan.

We think it's important to define resilience before we continue in the presentation.

And resilience is defined as the ability of a community to recover from a disaster or persist sustainably in the face of new ongoing hardship.

That is from the Town of Erie Sustainability Division.

From the 100 Resilient Cities Program, resilience is this is a city's ability to adapt, survive, and grow in the face of challenges.

Lotus Engineering and Sustainability is supporting the sustainability action plan update draft.

We are working alongside LOTUS because both of our draft plans have similar goals.

Resilience is one of the four guiding principles of the sustainability action plan, alongside being human-centered, balancing growth and providing equity.

The resilience action plan is an iterative document with an emphasis on regular revision and updates.

And resilience is a component of sustainability plans, or it can be on its own plan, like we have here today.

So to dive into the methodology that we took, we first reviewed plans created by the town of Erie.

So we looked at plans such as the 2019 iteration of the sustainability plan, the transportation mobility plan, and many, many others.

What we found is that the town of Erie has done a lot of good work in resilience, even if it's not labeled as such.

And so we wanted to highlight that progress while we have some recommendations in our plan as well.

We then reviewed other plans within the region and across the United States that had similar themes as Sean mentioned resilience plans, sustainability plans, and climate action plans.

We then completed a vulnerability assessment of the town and then gained perspectives from community leaders through interviews and then from town of Erie residents through town of Erie events.

So in the vulnerability assessment, we assess the most pressing hazards related to Erie resilience within each hazard category is an explanation of how these hazards have affected Erie in the past, as well as projections of how they may harm Erie going forward.

As a team, we researched local, state, and federal data sets to back up the conclusions we made in the vulnerability assessment.

And this assessment was created to get a baseline understanding of goals and strategies that we may include in the resilience action plan.

The topics that we researched included air quality, drought, extreme heat, flooding, wildfires, as well as a breakdown of social vulnerability.

All right, let's talk about air quality a little bit and what we found there.

The two most prominent outdoor air pollutants that are affecting Erie and surrounding areas were ground level ozone and also particulate matter.

The graph that you see up there is from the North Front Range Metro Planning Organization.

And all it's showing you is that pretty much the entirety of the Northern Front Range is not in compliance with federal ozone standards.

There's been some sort of ozone non-attainment pretty much since 2004 in the region.

In addition to ozone, I mentioned particulate matter.

So those are those really tiny particles, way thinner than a human hair, small enough that people can inhale, inhale them, and then they can enter the respiratory tract in the bloodstream, and obviously can exacerbate existing health conditions when that occurs, especially in sensitive populations.

So that's a common uh issue affecting Erie, but it's not just limited to outdoor air pollution.

We also considered indoor air pollution.

And something that affects residents here and across the state of Colorado is radon.

In fact, there are some estimates that perhaps half of all Colorado homes have excess levels of radon in them.

And the reason why that's such a concerning statistic is because radon is a leading cause of lung cancer.

But don't worry, it's not all doom and gloom.

Um we have good things to share as well.

Um, some things I wanted to point out.

For one, Erie does have a lot of air quality monitoring already taking place, including at the Erie Community Center, as well as at several sites near oil and gas wells.

Additionally, the town is currently providing rebates for radon mitigation systems and also for indoor air purifiers to kind of help combat some of these issues.

So I I know we have a website for air quality, right?

So, and when I look at that, it typically shows work green.

So, how does that relate to exceeding the federal just so happens we have our air quality monitor experts in the audience?

You didn't last long back then.

David Frank, director of environmental services.

So it's a regional phenomenon driven by atmospheric conditions along the northern front range here, where during the summertime and we don't have a lot of turnover in the air.

If we don't have storms come and sweep the air out, the ground level ozone just accumulates at the base of the mountains there.

Federal guidelines are it's I know that the exceedance is at 70 parts per million.

Uh and I believe it's if you have eight days of exceeding 70 ppm, then you are in in exceedance of federal law.

Uh, I don't have the numbers in front of me.

This ozone season wasn't terrible.

I want to say it was like something like a dozen days.

Uh so it's not an everyday phenomenon.

It's when you have stagnant very hot conditions and a lot of UV radiation.

Um, UV interacts with uh nitrous oxides and VOCs to break apart oxygen, which reforms as ground level ozone.

So that's how it accumulates here.

It's not like things are emitting ozone.

Um, it's a combination of vehicle exhaust and just the urban environment with our high altitude uh and and kind of the meteorology of the area.

So probably the highest risk days or the days that accumulate our summer hot days where the air is not moving.

Yeah, July and August.

Not like the last few days we've had.

No, not at all.

Um, and I would encourage everybody, um, CDPHE uh will send you uh ozone alerts.

Um tell you, hey, maybe today is not the day to go for a jog, especially for um you know sensitive populations, but they also give advisories on like, hey, yeah, if you can wait till after sundown to gas up your car, that would really help.

Um, and of course, we have lots of rebates um in the area, not specific to Erie, but across the northern front range to uh trade in your your old gasoline lawnmower for electric lawnmower.

Those old two-stroke engines that don't have catalytic converters and other you know monitored amenities really contribute a lot to the problem.

But you're not here to talk to me.

So I'm gonna go sit down.

Thanks.

David, you should join us over here by Melcom.

I have a feeling it's gonna come up again.

Probably could.

Okay, so moving on to drought, within the last five years, moisture conditions have been drier than average across the contiguous 48 states in the United States.

Contiguous just referring to states that share a border.

So this specific data point excludes Alaska and Hawaii.

Droughts are considered to increase due to decreasing precipitation, increasing temperatures, and earlier runoff seasons, all of which are factors that decrease the water supply that we can access from mountain sources.

And as you can see in the map below, that is from the US drought monitor.

Boulder and Well County are both currently experiencing less drought, less severe drought conditions compared to the rest of the state.

The town of Erie has also done a lot to mitigate the risks of drought, such as the water efficiency rebates and the launch of the sustainability division surf replacement rebate program in 2021.

Great.

And um related to drought, but certainly distinct as well.

Um I wanted to spend a little time talking about extreme heat.

The graph that you're looking at there is from the UM U.S.

Climate Explorer, and it's a chart of historic and projected uh days above 95 degrees Fahrenheit.

Um when you look at like the time period of 1971 to 2000, the average was somewhere around eight days per year where that threshold would be reached.

Projections looking towards the end of the century, put it closer to 35 to 80 days per year is what we're looking at.

And that's um kind of high and low end.

Uh, in addition to just those like that threshold of 95 degrees, temperatures are projected to be on the rise in general.

If you compare uh current times to 1895, the state of Colorado as a whole, the average annual temperature is increased about 2.9 degrees.

Or if you just go back to the baseline I just mentioned, that kind of late 20th century, 1971 to 2000.

Just since then it's gone up 1.4 degrees Fahrenheit.

And kind of looking at projections, then again, there's a range.

Um, it's looking to be about 1.1 degrees to 4.1 degrees additional temperature increase by 2050.

Um, similar to that, uh, heat waves are also expected to increase by a pretty big margin.

Um, as far as the definition for that, we're just looking at like four-day streaks of elevated, maintained, you know, high average temperature.

Heat a heat wave that would occur only once in like that 1971 to 2000 period.

Uh, by the 2060s, it's forecast to occur about 10 times.

So that same kind of threshold for temperature.

But again, in keeping with the pattern here, I've got good news to share too.

Uh, I just want to point out some of the good work that Erie is already doing related to heat.

For instance, the town does provide tree rebates and cost shares to help residents, HOAs, schools, and nonprofits uh increase the tree canopy and the shade and the cooling effect that that brings to an area.

Additionally, Erie also provides uh energy efficiency rebates for things like heat pumps, evaporative coolers, home energy audits, and also cellular shades, which is obviously goes a long way in helping residents maintain that level of comfort when those heat waves hit.

All right, so for flooding, uh Erie in the Front Range experiences flooding.

The 2013 floods are an example of this.

The 2013 flood caused billions of dollars in damages to Colorado that had to be rebuilt by local, state, and federal governments, including Erie.

And flood likelihood is most commonly broken up into the 100-year floodplain and 500 year floodplain.

And just to clarify, 100-year and 500-year floodplain does not mean that a flood will only happen once every 100 or 500 years.

The 100-year floodplain signifies the 1% chance of a significant flood occurring in a single year.

Therefore, a home within the flood within the 100-year floodplain has a 25 to 30% chance of experiencing damaging flood within a typical 30-year mortgage.

A 500-year flood signifies the increase in size of the flood and potential damage it may cause.

And those flood floods carry a 0.2% chance of occurring in a single year in the 500-year floodplain.

The 2013 floods are an example of a 500-year to even a 1,000-year flood event based on its location.

And it got this designation because of how large and destructive that event was in some areas.

Yet infrastructure projects done on Coal Creek since then have reduced effects of flooding all across Erie, and future projects are also in place to prevent further erosion.

However, from the slide, we can see that the census block south of Erie, Old Town Erie and Weld County, has the highest percentage of land area in the 100-year floodplain of any census block at 25%.

And the image on the left is that census block and where that's located, uh, mainly making up the Erie municipal airport, and that's from Colorado Environment screen.

Then on the right, you can see the entire extent of the 100 and 500 year floodplain in Erie from the mile high flood district map.

So moving on to wildfires, Erie has a moderate likelihood of wildfires, which is more than 58% of the communities in the United States.

And this data point comes from the U.S.

Forest Service from their wildfire risk to communities website.

This data can be visualized on the map on the left side of the slide.

The map on the right is from the Colorado State Forest Service, and this shows historic data of fire ignitions that can show likelihood of future wildfires.

So based on the federal and the state data, Central Erie has the most likelihood for a fire ignition in the future.

The Tana Very has also done a lot of good work with wildfire partners to bring the impacts of wildfires down, potential wildfires down, such as home assessments and the community chipping program.

So social vulnerability is how susceptible community is to hazards like wildfire combined with those community level stressors such as poverty.

We use data from the Colorado Department of Public Health and Environment, as well as other resources to analyze community and environmental vulnerabilities.

And in our research, we found that the central corridor of Erie contains the highest percentage of low-income residents at 15%, highest percentage of households that are housing cost burdened at 34%, and the highest percentage of people of color at 33%.

And the location of Central Erie is the area north, uh Reliance Park to the north and Erie Community Park to the south.

And housing cost burdened is defined as someone who spends 30% or more of their income on their monthly housing costs.

In that same central area, it stands out for its elevated environmental and climate risks as it ranks the 95th percentile for potential economic and life loss from natural disasters, including wildfire and flooding.

However, organizations like Being Better Neighbors are working to connect with members of the community to improve community wide resilience.

All right, we're gonna switch gears a little bit.

Congratulations.

You've made it through the dense statistic laden slides.

We're gonna talk a little bit about our community engagement efforts over the last few months now.

Our team got to attend uh eight different town events uh over the course of the late spring and summer.

Uh during those events we that we were tabling at, we got to interact with over 900 community members, which was a lot of fun for all of us.

I think we can agree on that.

Uh, if you look at the photo, I know it's not a very big photo on the bottom right of the slide.

You can kind of see that our team is flanked by a couple of large post-it notes.

And so the way we went about uh our interaction is that we threw those large post-it notes, equip people with uh Sharpies and asked them to rank their top three.

Um, one question was what are the hazards that you perceive to be impacting Erie?

The other one was where would you like to see the town prioritize its efforts in relation to resilience?

And so the graphs on this slide kind of show you those results from all eight events.

The one on the left, I know it might be kind of small text, uh, but that's the one that uh shows the hazards that were identified.

And so the top three that uh folks generally mentioned were drought, wildfires, and extreme heat.

And the dark orange on these graphs is for citizens and or sorry, residents of Erie, and then the lighter orange is for non-residents.

We wanted to differentiate those responses.

As far as the top identified priorities, those were uh ecosystems, wildlife and trees, uh, land use and transportation, and water conservation.

I should also note that we had a third open-ended question, which was just inviting folks to share with us their definition of what resilience is.

Um, and we've compiled all of those open-ended responses into uh appendix B in the plan that we put together.

Um and I also have a slide here so I can always speak to those if any of you are interested tonight as well.

And then these are some pictures from uh the community engagement events.

We started off uh with the Arbor Earth Day celebration, uh, spoke with about 200 folks there.

Uh, it was a great way to start the process out.

Uh we had our most single event responses from the town fair at about 250.

Uh the farmers' markets, you'll notice that number's higher.

That's because that was spread over about five different events.

And then we wrapped things up uh with the very fun and exciting first ever Erie Fest that was put on by Being Better Neighbors.

Um, something that I'll also want to point out too is that uh we were accompanied uh at all these tabling events by very supportive members of the sustainability division, including these two right here.

Um we also had uh representatives from the sustainability advisory board uh who are on hand, and this provided a good opportunity for us to not only collect uh data, you know, and responses from community members, but then also provided another forum for the sustainability division and sustainability advisory board to provide some educational materials and um information about existing rebates in town.

So moving on into interviews, we conducted 16 interviews with various different members of town of Erie staff, members from town council, members of nonprofits, and other community leaders, both regionally and locally.

They were able to give us a lot of personal anecdotes of how hazards impacted them, such as the Marshall Fire.

And we also received a lot of information based on existing programs, potential gaps, and further resources that we use to strengthen the plan.

We then uh once we compiled the draft strategies of our plan, we sent those back to the interviewees as well as directors from the town of Erie to gain further feedback that created a plan that we present to you tonight.

So, based on the feedback, we separated the plan into three separate chapters.

The first chapter is called resilient infrastructure, and this focuses on building infrastructure that can both withstand and operate during hazards and also decrease the need for post-disaster rebuilding.

The second chapter is based on land management, which focuses on maintaining both public and private land while also maintaining town of Erie's local biodiversity, stormwater management, and recreation opportunities.

The last chapter is focused on community, which provides accessible resources to town of Erie residents so that they're able to succeed through safety, connectedness, and health.

And I apologize in advance because I know this can be a slightly overwhelming slide.

But uh kind of building on what Stephanie just mentioned.

Within those three main chapters, we have sections that include kind of more focused uh work that uh includes things like the lit, everything on that list to the left.

So within infrastructure focuses on things like air quality, extreme temperatures, transportation, wildfires.

Um excuse me, you can see that whole list there.

The way that we structured each of these individual sections was first we want to provide some background on kind of like what the focus is, but then we also wanted to spend some time calling out all of the progress the town has already made.

We thought it was very important to call out who's doing what and like where those good impacts are coming from because we know we aren't starting completely from scratch here.

Moving on from that bit of town progress, then within each section, we have overarching goals and then strategies within those goals that are set to uh help the realization of them.

Um, something else I want to make sure I mention is that um most of the strategies that we're including uh in the plan are town-led initiatives, but there are some that we label as partnership opportunities, and that's just recognizing the fact that the town doesn't do it alone, and that there's lots of existing um like nonprofits, people like Friends of Cole Creek, people like uh wildfire partners, which we've already mentioned tonight, that are going to be central to the realization of the goals as well.

And then if you look at the slide, there's that big ring of light blue around the core middle.

Um, those are just uh a lot of the strategy benefits that we see connected to the things that we're proposing.

What we found over and over again was that we might have a focus area, say in things related to extreme temperatures, but lots of the things that we're proposing typically have co-benefits elsewhere as well.

So, for instance, trees.

We might be kind of couching that in terms of trying to increase local cooling, but then there's also air quality improvements, there's stormwater management tied up with that in addition to habitat as well.

Um, and so just kind of calling up as benefits we thought was important as we went through the strategies.

I'll catch up with you here in a second.

There we go.

So a little bit on funding and payback.

Um, specific costs associated with each strategy were not developed as a part of the resilience action plan.

However, the town has great leeway in how it chooses to pursue those proposed strategies.

And many strategies prompt exploration and piloting of new approaches to test more widespread application.

The team has generated a list of potential funding opportunities, should that be useful to staff when they're implementing the proposed strategies.

And then one final note on funding is a recent report from the US Chamber of Commerce indicates that every dollar spent on resilience planning and action has the potential to save $13.

Seven of those dollars from reduced infrastructure rebuilding, and six of those dollars from avoided economic loss through job loss and migration.

So some next steps for our project.

Um, we will be working to incorporate any feedback from you all today and beautifying the plan for easy reading.

Then it will be then it will come back to you in final draft form in early November.

On October 31st, we will be having our Masters of the Environment symposium, and this is an event that is open to the public where we will present our project.

There will also be other 2025 ME and V Capstone Project presentations here as well.

Um, it is open to the public, however, you do have to register to attend if you are interested in going.

And if you are, please contact Erica or Google the 2025 ME and V Capstone Symposium at CU Boulder.

And then after that, we will prepare for community engagement to begin the resilience action plan implementation.

And there's some people we'd like to thank and some acknowledgements.

We couldn't have done this ourselves.

Um, firstly, we'd like to thank our partner, the Town of Erie Sustainability Division, more specifically Emma Marino and Erica Thorley for their creation of the project overall and their fantastic guidance through the writing of the plan.

I'd like to thank our advisor, Leslie Blood for her assistance in group cohesion and the editing process.

And I'd also like to thank Alice Rich Niskova for her managing of the capstone program overall.

And thank you to all of you for inviting us here to talk today.

Um, I'd like to thank all council members that have provided us with feedback already, and we're very excited to talk to you and make this plan as robust as possible.

Also, if you're interested in any of the information we use today for our references, we have our references listed at the bottom right of each slide, and they have a corresponding number in the references slide.

And now we will open it up to questions.

All right.

Great presentation.

Appreciate you coming out and uh helping us understand where we're headed.

Um I'll just open it up to council.

Um thanks for coming out and for this incredible plan.

I was poking through it.

I really like the idea of a fall tree giveaway.

I don't know if you guys saw that.

Um, kind of coordinating with Erie Fest.

I thought that was brilliant because we have such a robust effort in the spring.

And I think having a second one in the fall is great.

Um, I did have a question.

I don't know, I'm not sure if asking questions is appropriate, but um about the I was in a meeting recently where Excel gave an update about their plans to invest in infrastructure in um about 25 billion dollars is coming to the state of Colorado really to meet our plans for um data centers uh along the front range.

And so um and part of that is through the discussion was uh how much that increases costs for rate payers um around in the area.

And so I've been thinking about as I'm in other meetings talking about beneficial electrification and things.

How are we planning for that as well?

If we're you know moving towards uh really largely electrified um community.

How are we also looking at the affordability and ensuring that we're um just staying ahead of that?

Like as a society, no, as a town, as a yeah, is I mean, so part of what I've been doing is um I I testified at the regional air quality council recently, and um also the I've testified the PUC and uh on Excel's you know, transition plan that they've they're working through right now that they're required to do every few years, and um just to ensure that they're thinking about this, you know, that we want as we're moving towards electrification, which seems to be a goal, that we're not also um creating an issue where an affordability issue for folks.

So you folks that are left on the grid, yeah, gas customers.

What's that?

Well, I think it's it sounds like it's going they plan for and what they're seeing in Pennsylvania and Virginia, I think is that data centers in that area have skyrocketed prices for ratepayers.

Um, and so they're just I don't want to see that happen here.

So, how do we get ahead of it?

I think that's a really good question, and it's a complex situation.

I know the state is really exploring how they want to approach data centers to be more equitable, especially supporting our utilities as those big data hogs come online.

Um I think larger beneficial actification conversation, you know, we know that our transmission lines are aging, and most of them need to be replaced throughout the country in the next few decades, and it's gonna be very expensive.

Um, I think it's it's a really complex situation.

We work with Excel and United Power Power on Multiple plans.

Right now we're implementing our beneficial actification plan that you all approved in May, which is really exciting.

Um, but I think the larger data center conversation, like we just don't yet know what that's gonna look like in the state and how the state wants to approach it.

Um those are gonna be those are important conversations.

How do we equitably do this?

So our our rates are not set up for that yet, you know.

And is that something that we address in some of our plans locally?

Like looking at what of what how can we you know invest in infrastructure that's going to support our ratepayers as well, whether that's solar, whether that's I mean, I don't know.

I'm making it up.

I need you to tell me I think we all are.

Yeah.

Um, it's the first significant new demand uh for electricity that as a society we've seen for for generations.

Um it'll be hard to say what the impacts will be and over what time scales and how prepared we are as a society to accept that new demand.

Um, or if we'll be in a reactive mode where we build data centers, uh rate skyrocket, and then we scramble to bring new new electrical production online.

That's kind of been the capitalist model to date.

Yeah, um, but as a community, you know, we may have a knee-jerk reaction to say, well, let's just ban data centers in Erie when that's going to be a regional draw on the grid.

Um, and so you put yourself in a position as a community where you're gonna get all of the effects you're gonna have the rates go up, um, but you're you're not you're not gonna get any economic value from that uh from that industry.

So it's a it's a careful planning, and I think it requires partnerships with our surrounding communities.

We can't do this alone and in isolation.

Um there really needs to be um a front range wide consideration uh about this industry and and how we want to approach it uh thoughtfully and carefully.

Hopefully, that's my goal.

The the water piece of data centers too is so fascinating, considering we already are in such shortage.

Yeah, please don't ban data centers because that doesn't actually solve it.

It doesn't actually solve the problem uh you're creating more.

Well, no, I was in the meeting actually last week with uh um county commissioner from Adams County, and you know, they're looking at it.

So I I think if we say we're banning this, we don't approve it, then we're not at the table and we're not um having a conversation.

So um she and I had a great conversation about it, and she was like, Well, I hadn't thought about that.

So um, I don't know.

I think that's if we can all be thoughtful and planful for what it looks like.

But regional coordination, another thing with the plan is the um e-bike share.

Um, I know that's happening kind of across a lot of communities.

Um I think we we contributed to a pilot program that's in Lafayette, and I don't know exactly all the places Lafayette Superior Boulder, not sure.

Um, and then I know that commuting solutions has an e-bike library.

Um, I'm curious if there if it if there's ways that we can plug into some of those things that are already happening and um because it's it's recommended in the plan, and maybe we don't have to reinvent the bike wheel.

And also we'll need to have you know policy.

We hear a lot about uh needing ordinances around e-bikes and things, but also we know that those are important for multimodal options and uh different commuting solutions.

So um, I would like to see us get involved in in some of those e-bike libraries.

So I'll I'll that's enough from me.

Right.

Any other questions before we move on?

Um, but excellent book, keep up, and we'll see the next steps in action.

Thank you.

Thank you.

Yeah, uh great job.

Uh appreciate the you know, full action plan and whatnot.

I was going through it and seeing all the strategies and whatnot, and and Eric uh was kind of wondering now will you take some of these strategies when you build your your budget and uh you know which ones will go in and then kind of tell us which ones you don't that are top priority that didn't quite fit into the budget so we understand you know what the next level are and you know if we could get extra money where where that could go.

I may actually hand that to Emma about next year's project.

Yeah, yeah.

So we submitted an application for interest for another capstone team for next year.

So ideally we'll get another team of fabulous students who can then help us with the implementation of the project.

So we outlined a few options of what that could look like, but based on their recommendations that will build out more um what implementing some of the strategies might look like.

But we have two resilience budget items or one for next year.

Yeah, for next year.

I know we asked for more funding next year.

This is the first time we've asked for resilience funding from our sustainability division was 2025's budget.

And so all of that really went to these students and the engagement and the support for that.

Um, next year we've asked for more funding to support the students and then also to start implementing some of these projects.

Um, our neighbors are really looking at resilience hubs.

Lafayette has put a lot of investment in that.

Um, we're hoping to benefit from their research.

Um, I know our facilities manager Chad Alexander has also been really looking at that with the community center and some other opportunities.

So we're collaborating with him there.

We also, you know, heat, heat is a big focus for Boulder County this year.

I think that's another big area that we just need to understand more and build more options for residents.

We have some now, but how do we continue to support them with these heat events that we know are increasing in in severity and frequency?

Um, but yes, yes, we will be coming to you all asking for some.

And and thanks.

I mean, as they're going through it, you see all the things you guys are already doing long before you put together this this action plan.

There's all already a lot of activity going on that you guys have been kind of ahead of this.

So thanks for that.

Yep.

And as you all are looking at the draft, we noticed that the links you can't click on them.

Something went funky when it was uploaded.

You can click on the links in the references, but if you want a copy where you can click the links, let us know and we can get that your way.

Yeah, you could because I was clicking on the links.

I was like, oh run away.

Is that like a mic job?

Yeah.

She's gonna recycle it.

Yeah.

All your single stream recycling's in the middle of the day.

Easy, easy, yeah.

I think just one other piece to add, um, as far as the next steps, you know, we are developing our sustainability action plan update.

It was very intentional to keep this separate as um they discussed because it can be more iterative.

The sustainable action plan is much larger and it's a bigger process to update.

And so this is resilience is one of the four guiding principles in that sustainability action plan.

So it'll be very much involved with updating that larger plan and then being called out.

But we wanted to be able to keep coming back to it and to update it a little bit easier than if it was part of this larger plan.

When is the capstone presentation to your professors and uh fellow classmates and all that?

Is there a date set yet?

Yeah, that was October 31st, is the date.

Okay, yeah.

That's it, the Mem V thing.

Yeah.

And there is a virtual option as well.

Are you guys gonna do it in costume?

Not this year.

I might go with Sean.

I'll just rock the polo.

But you don't know what time it is, right?

Exactly that a city's presentation.

I don't know when our presentation is exactly, but I think it goes from 10 a.m.

to one.

Nine to one.

Okay.

But if you sign up online, like for the virtual option, they'll send you the schedule as well.

All right, great.

Thank you.

Thank you.

Thank you.

Yeah, cool.

I'm sorry, go ahead.

So I I sent it a bunch of questions and comments.

Um outside of that, what is the anticipated life cycle of this plan?

When how often would it be revisited?

What's the process for it to be revisited?

You know, we don't have that yet.

Um I think you know, this is new territory, and so we haven't established you know every three years or five years.

I think right now we we want to do this second phase with students next year to understand a little bit more of implementation and specific strategies for one of the risks, um, depending on what they decide to focus in on.

I'd love to hear your feedback.

You know, would you like to see this updated on a regular cadence?

Or do you think we can have this as a more flexible plan that can support our sustainability action plan updates, which is every five years?

Um, but also gives us some more flexibility as new opportunities present.

I mean, this space is moving very quickly with uh model updates, with events, with resources with technology.

Uh I I'm I would be curious to hear your thoughts, Councilor Connor.

Okay.

Um right now for every 10 minutes.

No, uh one other request that I do have.

Can we see a draft um prior to the packet that we received for the November 4th meeting?

Like an updated draft?

Yes, please.

And would you like it in um we could share like a word document with you all to get your feedback prior to?

I think I would appreciate that.

Yeah, you got it.

Thank you.

So we don't have every the 56th Earth Day event.

Yeah, got it.

I think this will keep us busy for five years.

All right.

I think we're good.

Thank you.

Thank you.

All right.

All right, we're gonna move on to our uh last item before executive session, which is 25539, the Blackfields Energy Presentation.

Todd's joined us there.

I'm gonna introduce um Tom Henley.

Okay.

Good evening.

Oh, sorry.

Thank you.

I did just realize I made a mistake, so I'll correct it as we fly as we go on the fly.

So I'll get this going.

Um just click along.

Um Todd Fessenden, Utilities Director.

Um, this is Tom Henley with Black Hills Energy.

I'll just kind of give a little bit of background real quick.

We um Tom and his um team reached out to us back in 2019, I think, for the first time um looking to see if the town was interested in setting up a franchise agreement with Black Hills Energy.

They um serve about a third of the town, and it's an in in a growing area of the town on the east side of the town.

Um so that that is growing.

Um so that that is growing, and um, we do have a franchise agreement with Excel Energy, who serves the rest of the natural gas throughout the town.

Um, it comes along with a fee that's charged, and it's pretty customary.

So only a portion of the town is actually doing that now where others aren't in.

Yet we have this uh we have this um large utility operating within the town without any sort of an agreement about how we'll do it.

I can't think of any time we've had a problem, but it's always good to have um the mutual understanding on on how those things work and um where utilities get put and what what are the rules around it and stuff.

And so um we had brought this to council in 2021, I think.

Um we brought it forward, I think as an agreement, and it failed.

So we went back and did a study session, and it's in like my fault.

Is that we came back and did a study session, laid some groundwork and some understanding and came back for another vote and it and it failed um split vote again.

It was like three-three, I think.

And um, so Tom is persistent, and he reached out to me again and said, Hey, well, what do you think about bringing this back?

And I said, We're gonna have a fairly big shift on the council in 2025.

So why don't uh this was towards the end of the year, I think.

So why don't we come in in 2025?

And um, we've been kind of pushing it through the agenda because other things have come into place.

So here we are in October, and um tonight Tom's gonna just give the presentation about what does Black Hills do, what kind of safety programs, sustainability programs, um, what's normal, what's a normal operation for them within any town and um franchise agreements, what what does that mean?

And we're not gonna ask for anything, obviously, the study session, and the plan currently is to come back possibly in January with a franchise agreement for consideration.

The reason for the long lead between those two is because we've got a lot of things on the agenda between now and then.

So other we would have liked to have brought it back sooner, but that's that's what we're looking at now.

Um with that, I'll introduce Tom and let him kick it off.

Great.

Thanks, Todd.

I appreciate it.

Thank you very much for having us here.

Uh, appreciate the opportunity to uh talk to your mayor and council.

And I gotta I gotta keep reminding myself it's council now instead of trustees, which is always thrown me.

Uh but I've been with the company now for a little over three and a half years, and uh, as Todd mentioned, when I came in and found out that we did not have a franchise agreement with the town, uh, which is typically uh pretty unusual.

Uh ones that we don't have sometimes we'll have uh you know certain fee agreements set up with those towns, but the most important thing is that the company always operates at the will and whim of the uh of the town and your ordinances we operate that that way.

But the franchise dictates that we do that.

Uh and there's public utilities commission resources or recourse rather for you if we do not, as well as city recourse as well, too.

Uh, but most importantly, you get a franchise fee.

Um that could take the form of a couple different things, but let's kind of go through a little bit about what the company is.

We are in eight states now as an overall corporation.

We did just announce that we will be merging uh with Northwestern Energy out of uh Montana, and they're also in eight states.

So we're going to be combining two of the smaller cap companies and trying to get into a larger space uh and to your point, you know, being able to coral some of the data center business that's coming uh to Colorado as well as some of the other states uh like Wyoming, and we've got some pretty significant deals in the electric side of the business with Microsoft and Meta and others that they're coordinating with now.

Uh we've got about 1.35 million customers.

We've got about 800 plus communities.

Uh we, as I mentioned, have eight different states in Colorado here.

We have about 104,000 electric customers and 215 on the gas side of the business, which is solely where I operate, although I had been on the electric side of the business previously with Excel Energy.

Um we've got about 450 customers, I'm sorry, employees here within the state, and we've got about 10,200 miles worth of pipeline that includes everything from the distribution lines to people's homes and businesses as well as the main transmission line getting to other uh spots in the uh the state.

Uh community impact, we have about 640,000 dollars for the community of charitable giving.

That's everything from economic development groups, chair uh chambers of commerce.

Uh, we support the Fort St.

Frain School Foundation.

Uh, we've done things more so this year with the Chamber of Commerce, including some of the uh some of the the I'm trying to remember what community event it was, and I'm blanking on it now, but it's the first time we've done that because we haven't had the opportunity.

Um, our new general manager has made it a point that we've pushed forward into the communities that we're in, showing that you know we operate well with our neighbors because we live here too.

Uh we have people that live in the area, we have people that live in nearby community that work down the road in Frederick and the whole uh Carbon Valley area.

So, with that being said, we have about 700 plus volunteer hours for all the different charitable organizations that we work with.

I myself, as part of my job, I'm on a number of different boards within uh the whole eastern part of Colorado.

We've donated about 52,000 worth to economic development.

That's to the economic development groups specifically.

We can't offer incentives uh because we're not allowed to, but we do give money to those groups so they can help to try and lure in those customers that will help to bring good primary jobs.

Uh we're member we've uh donated to United Way.

We've also got our own program uh which we raised 156,000 for.

It's called Black Hills CARES.

Our employees and customers can donate to that, and the company's foundation matches that at 100%.

So we are pretty significant in uh in how we're trying to help our customers in these tough, tough times.

And uh, we have done trainings for more than 300 plus first responders and excavators to let them know how to properly dig around our facilities and not hit them because that's the last thing we want to do is have somebody with a backhoe hitting a gas line, creating a spark and creating a real problem, or just a leak, which can also create a significant issue for us as well.

Uh our service territory, as Tod mentioned, we're in the eastern part of the town.

Uh, all the blank space there that's not so blank anymore, is starting to fill in, and those are customers uh of ours, which are growing on the natural gas side of the company.

Um so the opportunity is there.

As far as safety for the company, uh we do have a damage prevention program uh coordinated with Call Before You Dig.

XL uses it, United Power uses it, all the other utilities within the state use it, including the municipalities, because we have to uh have people mark where the utilities are in the ground.

So not just natural gas and electricity, but also water and sewer and telecommunications and fiber don't get hit and cut off service to people.

Uh we've also had significant pipeline replacement programs and obviously great regulatory oversight, not only within the state, but from a federal level uh as well.

So if we could go to the next.

So what Todd did mention is the franchise agreement, and this essentially is an operating agreement between ourselves and the the uh the city.

So we have the ability to do it two different things, two different ways.

There's a percentage.

Uh some cities just have a straight flat 3% fee that's on the total bill, and that includes all the different safety riders and everything, which are included in there.

If you look kind of around the area, uh the only one that's different here, or the only two, I'm sorry, all three are different.

Frederick, Firestone, Firestone, and Dakota are doing it on a per therm delivery basis.

So we measure that metric, and everything gets true up at the end of every quarter where uh we can send we send them a check.

Uh most people prefer the percentage just because it's easier and it captures a greater uh usually a greater share of what's going on versus the first term because that can avoid some of the various different things.

Uh as Todd mentioned too, um Excel does have a franchise agreement with the town, and there's is I believe at 3%, which is typically again what we have as well.

As far as our mission for sustainability at uh Black Hills Energy, we have been working uh for a long time to try and replace the pipelines which are in the ground, which are steel, which tend to have a uh greater propensity for leakage, and we're replacing those as well.

We have to hope to have those out of the system very quickly.

And uh we are invested in the success of our employees uh by continually innovating uh thoughtfully, uh utilizing the resources which come about, which is new technology, which is happening all the time.

Uh there's a new one that's out there right now that helps to capture leakage from pipelines.

So if somebody hits a line, they slap a uh piece of equipment on there, it grabs the gas, essentially captures it, cleans it back up, and then after the repairs are made and everything goes back to normal, they can reinject it into the system.

So we're capturing all that methane, which would otherwise go into the atmosphere.

Next slide, please.

So we definitely focus on making people the center of our decision.

We're not going to uh do things based on the uh lowest dollar amount uh for the company.

It's it's what's the best for our company.

We have a very safety organized um system within the company.

We are very safety focused.

Every meeting we have within the company, including with our CEO, starts out with a safety share, safety tip, and uh everybody provides one of those within uh each meeting so people understand that we want you to come in and leave the same as you as you are that day, so you go home to safely to your family.

Uh we're all also very mission-focused, and uh we deliver on our uh mission of improving life with energy, and we do build on our history of environmental stewardship.

And as I mentioned, we have um very ambitious, but yet we do have achievable goals in the climate and to try and combat climate technology or climate gas and greenhouse gas emissions using the technology which is available today.

So one of the things that uh we've got is our own clean energy goals is a 50% reduction in greenhouse gas by 2035, and that is based on 2005 levels.

The state has some more ambitious goals, and we're going through the process right now with a clean, what's called a clean heat plan.

Um, we actually had an overall program set up.

Uh, one intervener uh decided to get involved and said they didn't approve of the settlement, even though we settled with staff and all the other interveners.

So the plan got thrown out, and we're going back to the public utilities commission at the end of this month for rehearing on that.

Um, it was actually supposed to start in January of this year, but we cannot do that.

But it's going to include different things like renewable natural gas, it's had more energy efficiency and uh all kinds of different things, which are going to use technology technology which is out there uh that is not being necessarily used today because it hasn't been considered state of the art, and we want to have state-of-the-art materials that capture everything, provide the best materials uh for the system and for our customers.

So, as I mentioned, we serve more than a million natural gas customers in six states, and uh since 20 uh 5, we've reduced greenhouse gas emissions by a third, and we do operate a modern gas system as I mentioned with no cast iron pipe since 2014 with nearly 99% of the infrastructure uh comprised of materials with the lowest emission factor.

So we're doing everything we can to try and get to the point where we have a very sustainable uh natural gas system.

As far as what else we're doing for natural gas emissions structure, emission reduction strategies, we're involved with the EPA methane challenge, the one future coalition, uh renewable natural gas.

We have five different projects in different states.

We don't have any here in the state.

The Clean Eat Plan.

We had uh actually secured a tremendous amount of renewable natural gas with XL, Atmos, and Colorado Natural Gas, but uh that was thrown out by the public utilities commission.

So again, we're going for rehearing to see if we can include some of that this next coming clean heat plan.

Um and we put in just about five and a half million dollars last year for energy efficiency programs just on the natural gas side of business.

So we do uh advance uh we work with emerging technologies, as I've mentioned, and try and work with some of the alternative fuels.

We had mentioned that we were gonna try and do hydrogen.

Another one that was again unfortunately thrown out by the uh public utilities commission.

And one of the things that I did kind of want to get into as well.

We just recently have um, as I'm sure you know, natural gas is is uh essentially being targeted by the state legislature to try and either reduce its usage, minimize uh the ability to use it going forward, or reduce emissions, which we fully invest in and believe in.

So, to that result, we actually, or that end rather, we went out and surveyed all of our customers to try and find out their thoughts about some of the uh things that are happening with the legislature right now and public utilities mission.

So, our first question was basically how familiar are you with the term of electrification?

And it was about six, it was about 71% familiar and very familiar from an overall state perspective here in Erie alone, it was 68%.

So people do know what it is and do understand what the goal is.

Um, the second question was how important is it to you to have the ability to choose the type of energy like electricity or natural gas in your home or business?

And from a statewide perspective, it was 88%, and in Erie alone, again, 88%.

We did have 51 respondents here.

So out of our 215,000 customers, we had nearly 5,000 responses, and we only had the survey in the field for a week.

So from the statistical perspective, it was very um impactful from the information that we were able to glean from it.

Uh third question was state of Colorado is implementing policies to phase out natural gas in the favor of electric energy resources.

And do you support this uh or oppose this uh approach?

And between the two, uh, somewhat opposed and some strongly opposed.

It was 67% from a statewide basis, and here in Erie, it was 61%.

So customers here in Erie are not necessarily in favor of that either.

Uh the fourth question was would you support or oppose?

And this is where the questions kind of get off.

So just so you're aware.

Um would you support or oppose the local policy requiring all new homes?

Local policy means state.

Um businesses to only use electric appliances and no natural gas.

Uh, strongly support from a statewide perspective, and somewhat support 14%.

Strongly oppose and somewhat oppose, it was 80%.

Here in Erie, 62%, so a little bit less.

I'm sorry, 70%, my bad.

I was a journalist, Matthew's not my strength.

Uh question number five.

Would you support a state law that requires homeowners and building owners to replace existing natural gas appliances like furnaces, stoves, and water heaters with electric alternatives?

And strongly support statewide came in at 8%.

Strongly opposed and somewhat opposed came in um uh that's 75%.

And here in Erie, 80%.

So people in Erie want to be able to choose their natural their resources, whether it's electric or natural gas, based on what we've been able to find from their responses.

Um are you aware the public utilities commission is considering a policy requiring Black Hills Energy Natural Gas customers to help fund programs that assist other households in switching from natural gas to electric appliances?

And that includes heat pumps, stoves, and water heaters.

And um, yes, from a statewide perspective, five percent.

No, statewide perspective, eighty three percent.

And from Erie's perspective, they were not 93% not aware that this is happening.

And the final question we asked uh was the Colorado Public Utilities Commission is considering a mandatory fee on Black Hills Energy and Natural Gas Bills to pay for your neighbor's conversion to electric appliance, is basically a line item writer on the bill that we collect from you to put into a fund to incentivize customers uh to switch from natural gas to all electric.

And whether or not uh the statewide answer, whether or not you support this was three percent, no, eighty-three percent in Erie, eighty percent no.

So we learned a lot of interesting things, we think, based on on the results that we received on this.

Some people understood what electrification was, but then thought, well, you know, maybe this is not a bad idea, and then it came down to do you want to pay out of your own pocket to support somebody else switching?

And they said, no, not at all.

So while what we've really kind of ascertained here is that essentially more people who are driving the uh the legislative agenda on this, yeah, are essentially very loud, have a lot of money, and have the ability to make things move quickly.

And uh from general public standpoint, uh, not so much.

They're not really necessarily happy with this this movement that's in this direction.

So um, we wanted to make sure you guys were all aware of this, understand what we're hearing from the community and the fact, and we could certainly make this available for you if you want to see it in a little bit more in depth, specifically just uh for Erie's numbers.

I'd be happy to do that.

Um when we come back in January, we've got a uh draft, which Todd has and the uh for the franchise, and uh we'd love to be able to chat more and more about that and answer any questions you have specifically about that.

Um, if you have any questions about our service or anybody's made complaints about somebody digging a hole, not leaving it uh without covering it up, uh you can call me and I'll be happy to get somebody out there to fix it right away.

So that's all I have and happy to answer any questions you may have.

Okay, I've got a couple to start uh with.

Yep.

How is the service area determined?

Um so the public utilities commission deservice uh determines the what they call certificated service territory, and uh it's basically just drawn up.

There's there's no necessarily rhyme or reason to it in this case.

All of our service territory mostly happens to be in Weld County.

Um, so that's where that line was drawn.

But for the most part, we didn't have a whole lot.

I think we were we were uh source gas here before, I believe, uh before before my time, and they did not have a lot of uh service within the town proper itself.

Okay, which leads into my second question with the franchise agreement.

Um let's see, I think that's slide slide six.

Uh for Excel, we get three percent.

Is that uh earmarked for anything, or does it just go into the general fund for goods into the general fund?

All right, so at the current time, like Collier's Hill, there's no franchise fee.

So the town is missing out on three percent of all gas sales to in that particular case, Colliers Hill.

Okay, and then my last question is why did this fail?

Being the one person there that was kind of like I I think there was maybe some misunderstanding at the time about what this was.

Um, I think the term, you know, in in the presentation, you see operator agreement, and I know at that time operator agreements were digging in the terms with uh some of the oil and gas operators in town, that was very contentious subject.

So I think somehow this got looped into that.

It's totally different thing.

I I was in support of it at the time.

I think the uh there was a split vote, so um didn't go through, and and also I think yeah, it's important to treat all the residence equity.

I mean, I'm uh like I'm on the other side of the street, so I'm excel, but you you literally cross the street, you're in your territory.

I also think that at that time too.

Um it primarily was Collier's Hill.

Um, you know, Morgan Hill, I think could was just kind of getting started.

Um, you know, but you as you can see just from that service area map, we're gonna have um uh Summerfield uh is gonna be in this area.

So we're there's gonna be a uh and just think about the amount that Colliers Hill has grown, there's just an ever increasing more amount of area residents that are gonna be in your service area.

So yeah, I think we're missing on a tremendous amount of revenue from from not having this in there.

So is there an estimate on the revenues at this moment for you know, I think we provided that before I want to say it was between 50 and 55,000, but uh that could be a mistake and I can get that for you for sure.

So my question is you know, not knowing why it failed twice, but what's the benefit of not having an agreement with Black Hills?

Like I don't I mean, are you just here out of the goodness of your heart?

Well, so the the franchise agreement obviously gives us well, sure.

Um, the franchise agreement gives us certainty.

So uh one of the reasons why you don't see multiple gas companies or multiple electric companies in the same town is because it costs a lot of money.

And your bill, whoever's whoever's getting the end bill, their bill would be just a multitudes higher because it costs so much.

So these basically it's it the best way to determine or to uh explain it is that all the costs are pulled together, and then all the costs are divided among that divided up against each or amongst each customer.

So uh now though, the public utilities commission has and state legislature have determined that particularly on the gas side of the business.

We used to give uh rebates to developers over a 10-year period of time based on the amount of um say natural gas that they actually use and sell or are accounted for within their development.

Uh that's gone away.

It still exists on the electric side.

So customers and are in developers can still get rebates on the electric side of the business, but on the natural gas side, the developer pays the entire cost, and then of course we know where who pays that at the end.

So then my question is um it gives you certainty gives the town three percent or whatever of the agreement or the sells.

What about rate payers?

Um does it provide less certainty for them as far as what they're paying um monthly.

No, they still have the ability whether they're whether they're uh a customer in in a town that has a franchise or an area that's unincorporated where they don't have a franchise, and their recourse uh ultimately is the public utilities commission if they have a claim uh or a concern with with the company to to go and file that with them.

And I might just jump in and try and answer a piece of that um prior question too.

Is we like having the agreement too, because then it defines the rules of how we're gonna play together.

And um, for instance, we had fiber going in all over town, and we relied heavily on our agreement with them to make sure we could hold them accountable.

And um, again, we don't have a concern.

I don't have I've never I can't remember ever having an issue with um with them.

Um, but it it does lay out the rules for everybody, and then we all know what what the rules are, and even things like if we are gonna make changes within the right-of-way, and they'll we can tell them you're gonna have to move out, move your stuff out of there.

It's uh we need that for a water line or something, you gotta move it somewhere else.

Whereas when we don't have an agreement, that can turn into a squabble or something.

And if the movement on those particular uh situations are at our cost.

Yes.

So will the users have uh ability to choose between providers, or this will be like a sole provider with the contract.

No, they do not.

Uh, and that's goes back to the certificated service territory, the way it's drawn up by the public utilities commission, whoever is within that area.

If it's if it's Black Hills territory, you're Black Hills customer.

If it's a Excel territory, then you're an Excel energy customer.

Um, because in other states I've seen like users have ability to choose between providers, is it not allowed in the no, that's that's extremely rare.

Uh I can give an example.

I believe it's Texas.

Texas, yeah, which is probably one of the worst places to use it as an example for well-run utility system based on all the uh historical outage problems they've had in the last few years.

Uh, but in El Paso, they have power lines running down one side of the road for one comp one company and down the other side of the road for the other company.

And those customers whoever choose them as cost are to be not amongst them.

That's one of the reasons why it is while the franchise agreement that we ultimately have in in terms and language is a non-exclusive franchise agreement.

People are not really necessarily gonna come and compete because then they have to build an entire system themselves.

It's not like on the electric system where uh from a transmission provider, you can wheel on those transmission lines, and then you have an offshoot distribution system that comes somewhere down the line.

Uh, we do have transmission customers on the gas side, but it doesn't go into a distribution system within an area where we're certified to serve.

Another question was uh how many people in the subway?

I'm sorry.

How many people in here?

Um, you know, it's 3,000 customers roughly, right?

Yeah, uh individual homes, 3,000 anytime between three and 3500.

Yeah.

Response was from how many thousand responder for for us, just three thousand for us.

No, no, I'm talking about the celebration.

Oh, no, no, the 51.

We only 51 people respond, yeah.

It's a small time, but it is it is a small sample size, but from a survey that's out in the field for less than a week, and uh you can't guarantee that email surveys don't go to junk.

Uh you have a valid email address.

We had a lot of inbound email addresses, which is not a surprise either.

Um, people don't update those when they pay their bill or whatnot.

But yeah, no, hold with would we love to have more?

Yes, but I think with from the trending survey results that we had here, as well as some other surveys we've seen in the state, it's consistent with uh those opinions that have been expressed, and people want to be able to choose to have their that uh natural gas resource.

Okay, thank you.

Um so back to Director Preston's comments about the advantages to the trip franchise agreement without the franchise agreement.

If there's an issue, if they run it if we run into an issue, that is it just a matter of negotiating the resolution on a case by case basis, or yeah, we work together on things when those types of things happen, and we'll have to it's a one-off kind of thing, and we generally follow good practice, you know.

That's we all agree what are good practices, like they're not gonna put a line right up against ours, and we're not gonna do the same to them, and that kind of thing.

But um, I was thinking about it too.

We deal with this in so many different ways.

We've got United Power and Excel for electricity, we've got Excel and and um Black Hills for gas.

We've got the town of Erie serves most of the water in town, but left hands here too.

And so uh if we didn't have any agreements with anybody and it was just a hope for the best when something happens, um that's not a good situation.

So yeah, and we had that um issue when the Frico ditch uh collapsed uh Erie Parkway a few years back, like five years ago or something like that, and they were like um you need to keep the water flowing and you figure out how to do that, and you're paying for it, it's we're not paying for it.

And so these are you know, old ditch companies, they've been they're the boss, they've been around since the 1800s, and what they're not gonna come to some agreement with us.

So um when we you you can get a bad player in those situations.

And I'm not saying FRICO's bad, it's just we don't have any leverage in that situation, you know.

And another example would be if we're widening a street and one of your gas lines is in the right-of-way there, who's responsible for moving it?

The franchise agreement would spell that out very clearly, so there wouldn't be any questions about it.

Sure.

That was the one thing I was gonna bring up because with all the new development.

If you guys remember the um the preliminary plat for Summerfield, I mean they're moving county right road five over.

So you've got a lot of work that we're having to do around that area.

So yeah, having that certainty, I think for important and I know speaking of the ditch companies.

I mean, we've got uh is that cottonwood ditch over there, the cottonwood.

Yeah, you're so agreeable.

Yeah, there's there's a lot of things there, and we have to guarantee that gets into Frederick, and yeah, so yeah, and we and that was a good example because we we did run into issues out there.

The contractor was kind of willy-nilly, and um and we're giving left hand a hard time, and so we were able to come in and help work that out, and we have existing agreements with left hand water um already, and it just helps us work well together.

I think um another question about your uh greenhouse emission goals.

Um refers to uh slide nine refers to 50% reduction, and slide 10 is you've achieved one third.

Does that mean you're two thirds away through that 50%, or is that those different metrics?

Those are um corporate wide.

So not just specifically here in Colorado, those are for the entire natural gas operations.

So um when it says 50% of the greenhouse gas emissions intensity by 2035, that's the same metric, but that is in the future, and we'll hit that number from here forward from from based on 20 2005.

We're already reducing it as we go.

So I can't tell you what that number specifically is.

No, but that one third is part of that 50%, is what I'm saying.

Yes, yes, and uh on slide nine.

Um the word intensity is stuck in there.

Is that have an industry meaning?

Emissions intensity reduce emissions intensity by 2035.

Is that different than just remain reducing the gases?

No, it's no different than that, it's just a different word.

That's it.

Thank you.

Okay.

Oh, one more thing.

Uh I know uh as being a good partner of a few years ago, we had an outage or some sort.

Um, I believe it's in Morgan Hill on Veterans Day when an unexpected cold front came through.

And um, my understanding that uh your people worked really hard to um work up, fix that and get the neighbors situated and with Rick's hunter open.

So uh it sounds like I got resolved in a in a very neighborly good way.

So thank you.

Thank you.

Yeah, that was an interesting one.

We were handing out portable heaters for everybody.

I I remember I called Tom one night to plan for some meeting or something, and he was out on some site down in down near Colorado Springs or some somewhere, and he was actually at the scene of the of the emergency um helping at that point.

And I'm like, man, I don't do that.

We're the coordinators, we have to try and make sure that everybody's in good communication so everything gets handled quickly and safely.

Let's go to council O'Connor.

Uh, regarding the franchise fee, um I'm assuming that's gonna be paid by the customers.

Um just like all the other franchise fees are for XL and United Power.

Is if um if we decided to not have a franchise fee, just so that we didn't increase the cost of the to those residents, is that unheard of or well the the cost would actually stay where it is now.

Okay, the three percent goes on top of it's essentially so if you've got a hundred dollars for your bill, it's 103% or it's three percent of a hundred dollars that gets added on to that that comes back to the city, and the other benefit from the um for the franchise agreement is the city does not get charged for any of the franchise fees for any of your facilities because it doesn't make any sense for us to collect it and hand it back to you.

Any other thoughts, questions?

This will come back January.

January.

Okay.

Well, uh, unless we hear otherwise, I think our plan would be to bring it back as a franchise agreement, have Tom come back to some old presentation.

Um, we're gonna have uh our attorneys that specialize in franchise fees look at that agreement again because it's been a few years since we last looked at it and they're looking at it now.

Yeah, I guess you know the one thing I would want to know is if it's different in any way from Excel's franchise fee, what's different and why?

The franchise fee itself is not.

Sorry, not the fee.

The agreement the agreement is because XL's is a book, and ours is a pamphlet, essentially.

No, it's ours is about like seven, eight pages, and theirs uh, if I remember correctly, it was like 38.

So it'd be interesting to understand what is in one versus the other.

And I'm happy to take the two and throw them into Gemini and ask it to uh do the sort and uh figure out the differences.

But you may want to do that.

We can have we'll have um Brandon over at um uh Ken Fellman's office take a look at that.

You don't want me to do that, I'll something go wrong.

All right.

Maybe we're gonna add one question.

Did your survey cover any questions about concern about indoor ear air quality associated with natural gas appliances?

No, it did not.

Uh, and the main reason we uh did not include that was because the issue was dropped at the Capitol this year.

They they approached the bill.

Uh basically what uh what Malcolm's referring to is that there was a bill of the legislature that was trying to address labeling on natural gas appliances, water heater stoves, furnaces, saying this may be upon combustion, you know, like the Surgeon General's warning on cigarettes.

Um, and it was just deemed that the that it was not something that they wanted to pursue.

There's been a lot of different um studies out there, and I can certainly send you some of the resource material that that will say uh there is no uh effect, and there's other ones that just like with the EMF issue on electric uh facilities, that there are no health effects or that there are you know some some health effects based on what's what study you read.

The preponderance of the evidence that we've seen in American uh gas association has provided for us uh across the nation and studies that they've uh either commissioned themselves or have used from other companies that have commissioned those, um, show that there's not okay.

I think we're good.

All right all right, you thank you very much for your time.

All right, do you have the executive?

Oh, I can agree off here.

All right, and I will turn over to the mayor for camp.

Yeah, thank you, mayor.

I move to go into the executive session to hold a conference with the town attorney to receive legal advice on specific legal questions, we should CRS 2464024B, and to determine positions relative to matters that may be subject to negotiations, develop a strategy for negotiations and/or instruct negotiators pursuant to CRS 2464024E, all regarding the stratus red tail ranch litigation.

All right, do we have a second?

We have a motion and a second.

All in favor say aye.

Aye, all opposed, say no.

All right, we will adjourn the meeting after the executive session.

Start to expect scene art around town.

Yeah, we're pretty excited.

We'll actually start to see public uh art going up and a