December 17, 2018
Transcript
Describer:
AGENDA
Board of Directors Meeting of Castle Pines North Metropolitan District
Including action in its capacity as the governing board of the
Castle Pines North Wastewater Activity Enterprise
and the Castle Pines North Water Activity Enterprise
Monday, December 17, 2018, at 6:00 p.m.
7404 Yorkshire Drive, Castle Pines, CO 80108
SPECIAL NOTICE
Consideration of Debt Authorization
To whom it may concern:
The Board of Directors of Castle Pines North Metropolitan District, acting in its capacity as the governing board of the Castle Pines North Wastewater Activity Enterprise and the Castle Pines North Water Activity Enterprise, will consider entering into a loan agreement in the amount of $4,250,000 and pledging enterprise revenue for repayment as further described under agenda items 9. M. and N. at its regular meeting on December 17, 2018, at 6:00 pm, at 7404 Yorkshire Drive, Castle Pines, Colorado.
AGENDA ITEMS
1. Call to Order Regular Meeting/Pledge of Allegiance.
2. Roll Call/Announcement of Quorum/Disclosure of Potential Conflicts of Interest.
3. Approval of Agenda.
4. Approve minutes for the Regular Meeting of November 19, 2018.
5. Public Comments.
6. Open Space Manager’s Report.
7. Legal Counsel’s report.
8. District Manager’s Report.
9. Action Items.
A. Appointment to fill Board Vacancy and Election of Secretary Position. (Board)
B. Approve District Manager Contract. (Legal)
C. Consider Proposal for 2018 Financial Audit. (Manager)
D. Approve 2019 Board Meeting Schedule & 2019 Holiday Closures. (Manager)
E. Consider Approval of Memorandum of Agreement to Convey Real Property to the City of Castle Pines. (Legal)
F. Ratify License Agreement with PSCO for use of District’s Exclusive Easement. (Legal)
G. Review 2019 Rates and Fees Structure. (Director McEntire)
H. Approve 3.0 Capacity Expansion Agreement with PCWRA. (Legal)
I. Consider RFP responses and approve one for financing a three-million gallons-per-day wastewater treatment plant expansion at the Plum Creek Water Reclamation Authority (PCWRA). (Manager, Legal, Ehlers)
J. Consider engagement of Kutak Rock LLP as Bound Counsel in connection with expansion financing. (Legal)
K. Consider adoption of resolution declaring the District’s official intent to reimburse itself with proceeds of a future tax-exempt borrowing for certain
capital expenditures in connection with the wastewater plant expansion project to be undertaken by the District; identifying the nature of such capital expenditures and the funds to be used for such payment; and providing certain other matters in connection therewith. (Legal)
L. Approve/Ratify Current Payables For the Month of November 2018. (Checks #24013 - 24047)
General Fund/Debt Service Ratify $33,478.80
Enterprise Fund Ratify $168,731.39
Electronic Payments (all funds) Ratify $105,449.72
Total Expenditures Ratify $307,659.91
M. In the Board’s capacity as the Governing Body of the Wastewater Activity Enterprise: Consider adoption of a resolution of the Castle Pines North Metropolitan District Wastewater Activity Enterprise authorizing the Wastewater Activity Enterprise to incur the indebtedness of a Special Limited Revenue Loan in the approximate principal amount of $4,250,000 (the “Wastewater Activity Loan”) for the purpose of financing the wastewater treatment plant expansion at the Plum Creek Water Reclamation Authority; approving the forms of a Loan Agreement, Promissory Note, Revenue Pledge Agreement and other related documents; and authorizing the execution and delivery thereof and performance thereunder. (Legal)
N. In the Board’s capacity as the Governing Body of the Water Activity Enterprise: Consider adoption of a resolution of the Castle Pines North Metropolitan District Water Activity Enterprise authorizing the Water Activity Enterprise to enter into a Revenue Pledge Agreement with the Wastewater Activity Enterprise pursuant to which the Water Activity Enterprise will pledge its system revenues to secure the Wastewater Activity Loan; approving the form of such Revenue Pledge Agreement and other related documents; and authorizing the execution and delivery thereof and performance thereunder. (Legal)
10. Directors’ Matters.
11. Public Comments.
12. Adjourn.
Board President, Director David McEntire:
Good evening everybody. Welcome to the Castle Pines North Metropolitan District meeting of December 17th, 2018. We'd like to, call the meeting to order. With, the Pledge of Allegiance. How's that?
All:
I pledge Allegiance to the flag of the United States of America And to the republic for which it stands, one Nation under God, indivisible, with liberty and justice for all.
David:
Thank you for that. Directors, when I call your name, please indicate, by acknowledging, that you are present and that you have, either potential conflicts or none.
Board Member Director Denise Crew:
Present, no conflicts.
Board Member Director Robert Merritt:
Present, no conflicts.
David:
You know, Director McEntire is here and has no conflicts of interest. The next item is the agenda.
We have, a quite lengthy agenda tonight. I'm glad that the auditorium is completely packed. For fear that the public comment section will run over. Not that those that are here can't speak for, say, maybe four minutes, but, yeah, we'll try to get through it as quickly as we possibly can. There is one item I would like to, just under the action items nine, and that would be nine A where this board is prepared to appoint before the board vacancy tonight.
And we can go ahead and include the election of the secretary position. I'd like to move, that, in consideration of that, that, appointee passed the action items tonight so that, we don't start off abusing that individual, to the very end of the action item. So let's make it, if you want to make those adjustments, it's, it's taking eight in and adjusting all of them up, okay?
I'll try to make sure that I have them right when we get through them. Is there any other adjustments to the agenda, Director? Hearing none. Look for a motion to approve the agenda for December 17th.
Denise:
I'll make a motion to approve the agenda for December 17th.
David:
2018. We have a motion on the floor is there a second?
Robert:
I'll second that motion.
David:
We have the motion in the second to approve the agenda of December 17th, 2018. All those in favor when called upon, please give your yay or nay for those here and online.
Board Voting All Speak:
Director Merritt? Yay. Director Crew? Yay. Director McEntire is a yay. That motion passes with the, adjustment on, action item nine A to go to 9M.
David:
That being said, we have, the item number four approval of the minutes for the regular meeting.
That was, last month, November 19th, 2018. We have each you've been given a copy of the minutes during, the period between last month and this month. I'm sure you've had an opportunity to take a look through them. Are there any comments, questions, concerns about that before I pursue a motion to approve the minutes of that regular meeting on November 19th, directors?
Hearing none, that would support a motion to approve that.
Robert:
I make a motion to approve the regular, meeting minutes of November 19th, 2018.
David:
And is there a second?
Denise:
I'll second.
Board Voting All Speak:
We have a motion on the floor by Director Merritt to approve the November 19th, 2018 minutes. A second by Director Crew. Those in favor signify by saying I or nay when called on. Director Crew? I. Director Merritt? I. Director McEntire's in the affirmative I and, the motion passes unanimously.
David:
We're on agenda item number five for those that are following along. that's our first public comment session. I have not received the sign up sheet in the back where there would have been anyone signed up to make a public comment, but there's, kind of, none.
Well, as I've had a bad habit of doing in the past, I would just ask the audience if there was somebody that maybe forgot or overlooked that part of the process and would like to speak to the board at this time. If so approach the podium, introduce yourself and your address. If none, we'll move on. Anyone? Great.
Alright, there are no, no one here for public comments. Item number five for tonight is completed. Item number six, is our one and only Craig Miller, our Open Space Manager here with his report. We've all gotten a copy of your report, Craig. I know that this is taking out of your time tonight. And, so, while we don't need you to read your report, if you don't mind, and unless there's something that you missed or would like to highlight. Otherwise, the directors may have some Q&A for you.
Open Space Manager, Craig:
Sure, I do have just a couple of items I'd like to highlight. And, one was the, tree brush that we're generating. It's just been fabulous that we've been able to find this tree contractor Covid Ree.
He's at my beck and call all anytime I need to chip it. It cost us about $225 versus putting it in the dumpster and spending $450. So we're pretty proud about having that arrangement set up. And then I think, other than that, any questions that you may have?
David
That, or did I interrupt you? No. That mulch, I'm sure you have a zillion ways to use that.
Craig:
Actually, they hauled it away for me.
David:
Is that right?
Craig:
Yeah, because the problem with brush chip mulch, especially dead pine, is it breaks down very, very quickly. Okay.
I mean, it basically degrades within six months or less. It's not a real high quality mulch. It's not as good as live tree chippings. So they just hauled away from you and take care of it, which is great. And they recycle it themselves in their own right.
David:
It's not a business we need to be in is it?
Craig:
No no no no no, we don't have anybody to watch over that.
David:
Okay, very good. Craig, in your absence last week, we were talking about, I think it was during the meeting, and if it wasn't, it was between meetings. We were talking about the, degree by which you guys have over the course of the fall.
The summertime, Fall, and may have gotten stopped now, rehabbing the electrical conduit. Yep. In some of these entryways. I'm sure that that culminates in, reviewing and renewing any of the water issues that are in those same areas, etc., etc.. These are entryways into, the, the individual communities within Castle Pines North. Yep. That being said, is it true that we have some that, of those areas, broad stroking it, that belong to or that are maintained, maintained by the HOAs and some that are not?
Craig:
That is correct.
David:
It would seem like to me that it'd be a little easier to keep track of, if it was all one way or another.
Craig:
Actually, it works out very well because it's only about 3 or 4 of the neighborhoods. Things like the hamlet, that take care of their own grounds and through there. They have their maintenance contractors taking care of that.
Plus the property there is not Castle Pines North Metro property, per the Douglas County Assessor's map. So, that's what really dictates whether we maintain a neighborhood entry way or not. Is it City of Castle Pines or because we have a maintenance agreement with them for median islands? Or, is it Castle Pines North? And if it's the homeowner's association, then they're responsible for.
David:
Could you do us a favor and take a look at those that we do maintain and provide us with, your opinion, before next meeting as to whether or not we're using our resources and the HOAs are living up to their responsibilities, and there's no conflict potentially with this arrangement.
Otherwise, if there is a better scenario where, again, there's continuity between all the communities. Even if that were to, culminate in ordaining ground or at least entering into some kind of an agreement, with these HOAs, where again, everyone or the HOAs as an example, were in charge of the electric.
They were in charge of the water. They were in charge of the fertilizer. Certainly under our guise as rest of over more. But, same spirit of continuity.
Craig:
I can look into that. But I can tell you right now that, for the five years that we've been doing this has been the most efficient thing for us because we have a maintenance map.
You can see it on a wall in my office. We've got it available online. It's very clear what we do and what the HOAs do. And we can certainly try. I mean, it sounds like you want divest yourself of the neighborhood entry ways. And one of the issues there that I have is lack of continuity, because we've got brand new neighborhood signage that we put in five years ago.
This continuous across all of the neighborhoods that we work with. As an example, Claremont Estates over here is not part of our maintenance agreement. We also have consistency in landscaping. We've been doing re-landscape designs for the last five years and constructing brand new median island entries into the neighborhoods that we do maintain. So we have a theme going on through there.
My concerns if we divest ourselves from that, and certainly it's your call, but you're going to start to get a hodgepodge of maintenance. Not everybody does the levels of maintenance at the same level we do. And we see that very clearly in some of the neighborhoods that we don't maintain. But if that's your desire, I can certainly look into it.
One of the issues that we have with the electrical is we don't have any maps of where the electrical is, all of the electrical lines, all OMX cable is buried direct into the ground with no conduit, and we don't have any idea of how to reroute everything and do everything except to be reactive. We'd much rather be proactive.
And we could be proactive on our irrigation because we know our irrigation very well. There's another aspect too, is the irrigation water for those neighborhood entryways that we maintain. That's on our bill right there. So, I don't know how much pushback you might get from the HOAs if you say, hey, you're going to take this over now. But I can certainly look into it if you want.
David:
I guess what, really energized my thinking in that regard has been this Esperanza scenario. Where he came to us looking for the short and sweet answer to an area or a piece of property within their within their community, that they wanted to landscape. Right. Without going through or going through all of those details over the course of the last half of the year, which seemed like to me there's a much easier, more efficient, less costly way of staying out of their way and vice versa. If that's not ventured by anyone the way I've characterized it.
But, in the spirit of keeping things simple, take a look at it. Share with us what your how you really feel, and we'll take it from there. But that's where my thoughts came.
Craig:
Sure. And the Esperanza issue. You know, my only objection to it is they want to grow plants without water. You can't do that. There is no water source over there.
So that's the issue. That's the only issue right there. Plus, you are setting a precedent because we do have a lot of trail heads that enter into other neighborhoods. Next thing you know, people are going to say, I want this piece of open space landscaped and we don't have water to provide any landscape sustenance there either.
So but my feelings are it's working great the way it is. Okay. But I can look into a little bit further. I'll talk to David. We'll sort of noodle around, get some ideas for you for the next board meeting.
David:
Let's just, yeah, make sure that we feel good about what we're doing and that we maximize the opportunity for efficiencies and economies. Not only of the district money, but our time. So I look forward to it. Thank you for that. Yep. You bet. Directors?
Denise:
Yeah, my first question was going to be what did they do with the tree chip. But, now we know. Yeah. Not much. Yeah.
Craig:
No, they take it back and recycle it. So. But like I say, we don't want to be the mulch business. I did that when I was city forester to the town of Parker. And it's a nightmare.
Denise:
Okay.
Craig:
It really is.
Denise:
That works. That works. We've been talking a little bit and, you and I have discussed a little bit the dog tuff grass. And I know we have a little bit over at the library. Can you just kind of refresh our memory? How much is there? How long as it's been there?
Craig:
The library dog tuff grass was installed a year and a half ago, so it hasn't been two full seasons. It usually takes two full seasons to fill in completely. We've got probably about close to 300ft² there I believe. Okay. We also have a little patch of about 50ft² that we're experimenting with on Castle Pines Parkway,
An area that's been killed by road salt and is very inhospitable. The stuff is growing like crazy with no irrigation. So it's been doing pretty well from us, for us, from that standpoint. As you recall, it's only available by plugs. You can't you can't seed it. You can't sod it, so you have to plug it in.
The plugs come 72 in a flat. You can get it from sell sources. It is a plant select selection from the Colorado Nursery Association here in Colorado. So most nurseries around here, you can order it in advance and they'll grow it for you. Prices range here in the metro area somewhere in the neighborhood of between $50 to $70 a flat.
You can get it from highcountrygardens.com in New Mexico and shipped to you for less than $50 a flat; it's the most cost effective way to do. But it's a it's a great product; it's really easy to establish. We also have right at the corner of Yorkshire and Monarch, okay? If you can picture that, south of Castle Pines Parkway. HOA One decided to do a large area of dog tuff grass.
So they tore out a whole bunch of sod looking, for sod replacement. They've been successful in establishing it, except for the weeds. So they're waiting to get control on the weeds next spring to get a rebate established. But, if you get a chance to drive by that corner there, it's just to the south of the of the elementary school, okay?
Right there in the corner of Yorkshire Monarch. It's sort of like, by Buffalo Ridge, Yeah, exactly. Yeah, Monarch comes down like this and Yorkshire comes around like this and it's right on that corner. So, it's a pretty impressive patch right now, with the exception of the weeds that are there, so.
Denise:
Okay, so can you compare the cost of that to regular sod? Sounds like this is quite a bit more.. expensive.
Craig:
Oh, it's much more expensive. However, the water savings and the money savings that you get and the maintenance, because you do not have to mow it, which is huge.
Denise:
And in your opinion, when you compare it to grass..?
Craig:
It's better, it's far better.
Denise:
Does it look better?
Craig:
It does, in fact, I have a patch in my backyard that when friends come over, I invite them to barefoot through it. Walk through this, now walk through the bluegrass. And they said, I like this better. It's like really super soft grass. It's very, resilient. It's called dog tuff because it does not get damaged by a dog's urine or by a dog activity. They can scratch the heck out of it and it's back in really quick.
What it is, is a cold season version of Bermuda grass, okay? Which grows very quickly, but it was an anomaly that was discovered down in, up in North Colorado as well as New Mexico.
And They cultivated in both spots. It's been grown as far north as I believe Greely. So it's very, very tough, very durable. It goes dormant about two weeks sooner than bluegrass and it greens up about a week later than bluegrass.
Denise:
Do you have to aerate it, too?
Craig:
Nope, no aeration. Limited fertilization, if at all. The patch that I've got in the backyard is three years old. I think I fertilized it once with a half rate. It just doesn't require a lot of maintenance. Which makes it a wonderful alternative here for Colorado, because literally, we do not have the water to support the acres of bluegrass. The miles of bluegrass that we grow in the state. It's slowly catching on as, this is the answer.
Yes, it's a high up front cost because, figure $50 for 70ft², okay? Your sod cost is going to be somewhere in the neighborhood of about $0.25 a square foot. So, much, much cheaper. Half the cost or a little bit less.
Denise:
Any other neighboring communities have big areas of this?
Craig:
Nobody's really grown it on the scale that we're seeing here in this community. So, we're sort of a leader.
Denise:
We can be the high end?
Craig:
Absolutely, it's kind of cool.
Denise:
I think it's fascinating, so.
Craig:
Yeah, so take a look at that corner. I think you'll be really impressed. It's got that nice little mounded kind of look from it, from the plugs. And when you mow it down, and I usually more mine once in the spring just to get the dead grass off.
It starts to come back flat, but then slowly over the season it mounts up again, which I think is a really nice look. If you don't like that look, you can mow it more frequently to keep it, you know, nice and level. But I've seen some customers, or not some customers, but some people attend my classes. Both at the library and at Tagawa, have done dog tuff grass.
They've done their entire backyard with it. And they bring me pictures and it's like they just love it. They can't believe how low maintenance it is. The dog tuff grass that I have in my yard, I water it 3 or 4 times a Summer. That's it. Like I say, the patch that we got growing on Castle Pines Parkway that we just dabbed it into the sandy, salty soil.
It just took off and I expected it to die. And it's like, here it is three years later and it's just getting bigger every year. That's cool. Yeah.
Denise:
Hmm. That's envisioning big things with this thing in the future.
Craig:
It's just time. It takes time. Yeah. One and a half two years so it's nice and full, past that point it's pretty low maintenance.
Denise:
Great, thank you.
Craig:
You're welcome.
Robert:
In your professional opinion, are there any other areas in the community that you would like to see another project, or maybe even replacing sod?
Craig:
We're working on that. What we have to do is we have to find a zone, an irrigation zone, that makes sense. You can't put dog tuff grass next to bluegrass, they're incompatible. They will battle it out, and the bluegrass win, because it's a cool season grass. It does a little bit better in the Spring and Fall than dog tuff does.
But we're looking at a few areas in town where we can say this is one irrigation zone, and it's one contiguous patch of turf that's separated from everything else, let's put it in. It's like it's at this corner, like I say down there, take a look at that. That'll give you an idea of what can be done, if you isolate an irrigation on and just replace the turf in that one area.
Robert:
When we're looking at that, we can look at maybe a thousand square feet. When you recoup your money and break it down for people. So they can say, "Okay, I'm going to be in this for three years before I get my money back, if I replace my whole yard". We can actually make a list for people.
Craig:
Yeah, we don't have any figures on return on investment yet, here in Colorado. Simply because it's been in development here for well over ten years, but it's been in private development for the most part; only publicly released two years ago. So it's very, very soon to be looking at. But, you know, considering what I told you, about 50 bucks, per seven square feet. The cost of installation has got to include as well, removal of the existing turf or killing of the existing turf, which is what these guys did.
They actually did a half and half. One half, they stripped out all the sod. The other half, they sprayed it with Roundup. It's better when you spray it with Roundup, cut the grass really short when it's dead and plug it in because it keeps the weeds down. It's a lot easier because you don't have dump fees with the sod, which makes a huge difference in every yard.
But there's still going to be some costs involved in that and some costs involved in terms of hand weeding. Because the grass is herbicide intolerant. You can't spray weed killers on it, you'll kill the grass. So it's all hand weeding. They suggest oftentimes like first plug it out to sprinkle corn gluten down because it's a natural fertilizer and a natural weed inhibitor and it does help you in some cases.
Robert:
Excellent, thank you very much.
Craig:
Welcome, any further questions?
David:
Craig, would you say then that this is a better application for residential or commercial?
Craig:
It's definitely better for residential because most people don't have acres of turf. If I'm going to endeavor to replace acres of turf at $50 per 70ft², it's going to get into the tens of thousands of dollars very quick, just for one acre. But on a residential basis, if you've got a small, average residential lot with maybe 2,000 or 3,000 square foot of bluegrass, ideal, Absolutely ideal in terms of a cost effectiveness standpoint.
And seriously, when you're not watering once a week and you're watering 2 to 3 times a year, your return on investment will come back. But again, that's also dependent on how much water are you actually applying currently to your bluegrass? Most people are significantly overwatering, and that's one of the problems that I've seen with some of these, alternative grass species, is you put them into a homeowner's hand, they can treat water like bluegrass, which causes it to fail.
David:
I ask a question because, you keep bringing up the weeds as an issue. That may be a little more expensive in a commercial application controlling them than there would be on a residential. Absolutely. Especially a small area. Yeah. This building, in the ground that it sits on, the bluegrass that surrounds it, what do you think about replacing it with that dog turf?
Craig:
It would certainly be doable, but you're probably talking astronomical costs just because of the amount of turf that we've got on site. We probably have a half an acre of sod right here.
David:
Look at it for us and then throw a number, a return on investment number back. Okay. Just based on the, I think we can include, as opposed to debate the weed management because it's so close to home. Let's just look at the return of investments with the water.
Craig:
Right. Well, again, the weed issue is typically the best solved by sprinkling down corn gluten and you can buy corn gluten at the feed shop.
David:
Then take that approach.
Craig:
Yeah, that's what we'd probably do if we did it large scale here.
David:
Yeah, so let's just kind of use this as a guinea pig. Not sure that, we really get the flavor of how good or how expensive this alternative is, just at the library. So, would you please?
Craig:
Yeah, I'll take a look at that. Another thing I'd like to point out is that we do have constant traffic to these cell towers back here with aerial lifts, and they tear the hell out of our bluegrass. They compact the soil very badly. We probably would have to omit the back space back here. Just simply because of that constant truck traffic.
David:
Or make it a hard area. And obviously you could make it a hard area for less money than the dog turf.
Craig:
Absolutely, concrete's a lot cheaper than dog tuff grass.
David:
It sure is, as well as gravel. Yeah. Like about a quarter. So, yeah, take a look at.
Craig:
Yeah. We'll look at it and I'll come back with some ideas for you.
David:
Thank you much. You're welcome. Anybody else?
Robert:
Thank you for your time.
David:
Thank you, Craig, again for that report. And..
Denise:
Can I interrupt just one other question? Sure. I'm sorry to go back to this one, when you do this Roundup, obviously there's a bit of a fear with putting a bunch of Roundup on your sod, what are ramifications?
Craig:
Actually, media has blown it way out of proportion. Roundup, in terms of pesticides, we deal with what's known as early LD50s, which is the lethal dose of 50% of a test lab animal. The LD50 of Roundup is actually less than the LD50 of a cup of coffee or an aspirin. So that's what blows everybody away.
What everybody's excited about Roundup about, and so angry about it, is Roundup ready crops, genetically modified soybeans that you can spray Roundup over the top. The other interesting chemical property of Roundup typically breaks down in contact with soil in contact with turf within about 48 to 72 hours into harmless organic components. So it has no soil residual. Literally, I've been using roundup for over 50 years. I had a full head hair back then, but I'm just kidding.
But, I haven't grown gills and flippers yet, so. And I've been exposed to it, overexposed to it at times. You know, where I've been involved in spray drifts and stuff like that. I don't have any qualms with Roundup.
I'll tell you another interesting story. When I was going to college, I had a pesticides class and the college professor, uh no, it was a crops and soils class. And the college professor came in and brought in this brand product. A bottle of Monsanto's round booth, brand new introduced. And he's showing it, he's pouring it into a glass, and he's telling us about the viscosity, the color and all the chemical properties of it. And then all of a sudden, he took a sip of it. We're all like going.
Whoa. Because we learned in pesticide class, you don't do that. He says, I just wanted to show you that this has a very, very low LD50. The other thing you need to understand to about Roundup is, Roundup concentrate is very different than Roundup mix. When you mix it, it's half a percent roundup and 99.5% water. So there's a lot of public fear about the use of Roundup in the landscape care industry; it's unfounded.
As far as genetically modified organisms, once again, I know enough about plant materials over the cultures, I'm not concerned about that. But that's what the media has got everybody riled up on. Oh, they're spraying over the top of the soybeans. It's on the soy bean plant. No it's not, by the time it comes to market, it's gone. So my two cents.
Denise:
I can sleep safely, thank you.
Robert:
And 15 years later, are you still getting Christmas cards from that professor? He's still someone... That was the first question, thanks.
David:
Very good. Item number seven. Counsel, do you have a report for tonight?
Legal Counsel Kim Seter, Esq.:
Mr. Chairman, the report is in your packet. There were a number of items that we were going to pulled from the agenda tonight because we were waiting on the Colorado Water Conservation Board to agree to allow a parody. Go ahead. But we just got an email within the last few minutes, suggesting that they are willing to allow us to use the water enterprise funds to back up this loan.
So, with your permission, we'll proceed with all of those documents tonight. The first thing that will have to happen, though, is you'll have to review the responses to the request for proposals, Mr. Man will have a recommendation for you on that. And if you approve of the JPMorgan Chase proposal, we can go ahead and move ahead with all the debt documents.
Other than that, I think everything is in the agenda under the action items that's in my report. But if you have any questions, we can respond to those now, or we can just walk through each one of them, whatever your preferences. If we don't do it now, we can do it one by one under the action items.
David:
You know, I'm sure that the directors have taken a look at, the recommendations, for JPMorgan Chase. I've got, Morgan Stanley in my head. And, I'm not sure where it came from, so let me work through that. In the meantime, I have reviewed the documents as well as they have, and I'm sure that if there's any comments or questions we can handle that as that item comes up. So why don't you just take a run at all of the items, that pertain to, the required conversations and discussions, actions and execution to these documents all the way through item nine M.
What would be renamed is M because in N mine now. That being said, the first one that you would take into consideration would not be the, proposed audit. We'll do that. The meeting schedule, we'll do that. But, probably, the, would it be the ramifications of the license agreement?
Kim:
Okay, actually, it would be the old item E, I think. Consider approval of memorandum of agreement to convey real property. Do you want to go through those?
David:
Well that doesn't have anything to do with the loan. But we could do that, before the loan stuff and do all the loan together. No, let's go with..
Kim:
Top to bottom?
David:
Yep, top to bottom.
Kim:
All right, why don't we just start with the old item B, then? Okay. You have fulfilled all of the legal requirements to engage the new district manager. The recommendation at the last board meeting was that Mr. Worley would be that person. That has been posted per law.
And you are in a position tonight to approve the contract that was attached to the legal status report, which you had seen the last couple of meetings. If you want to engage Mr. Worley, that's ready.
David:
Before we do that and, prayerfully hopes that we don't have to do it twice, not that he's not worth it, but, you know what? I failed to introduce or open this meeting up with the idea that this is a special notice for the consideration of debt authorization by this board tonight. So, as staff is taking minutes, please let it reflect that this agenda and this meeting is inclusive of the special notice, for consideration of debt authorization.
Now that I've cleaned up my mess there, you've introduced the item for District Manager contract. Do we have a contract tonight?
Kim:
Yes, it's attached to the legal status report.
David:
Okay, do we have an original that your going to look to have signed? Yes. Okay, and we can do that after the meeting? Yes, we can. I'd look then to the directors for any comments, questions or concerns about the selection that we made as a board for Jim Worley to serve as Interim Director and subsequently, District Manager.
Any comments or questions before I entertain a motion to make him our District Manager tonight?
Denise:
I'd love to make a comment. No, I read through the contract. It's everything that we had talked about and discussed. And I just want to say, I think it's amazing that you're our new District Manager. We're looking forward to working with you and continuing so far has been a really great relationship. So, thank you.
David:
Yes. Satisfied with what we have before us tonight. So maybe he wants to be the Director to make the motion to hire Jim Worley as our District Manager moving forward.
Robert:
We can definitely do that. I'd like to make the motion to hire Jim Worley as our District Manager for the Castle Pines North Metro District at this time.
David:
We have a motion to hire Jim is our district manager moving forward with her second. I will second. Denise Crew seconded that motion. Any further questions? Comments? Concerns? Hearing none. Seeing none. I'll ask for a vote on the motion. When called upon, please indicate your affirmation or otherwise.
Board Voting All Speak:
Director Crew. I. Director Merritt. I. Director McEntire is in the I motion passes unanimously. Welcome aboard. Jim.
District Manager Jim Worley:
Thank you very much, appreciate it.
Kim:
Mr. Chairman, we'll skip old items, C and D. Those will be presented by the manager, and move on to old item E. Consider approval of memorandum of agreement to convey real property to the City of Castle Pines. City of Castle Pines is working on improvements to the Castle Pines Parkway, right out here.
In that process, they're seeking actually started it as a condemnation action. But that's not an adversary thing. There's a little sliver on this curve that they want to take, and I assume they're trying to straighten out that curve a little bit. They proposed paying $1,900 for that sliver as part of the condemnation. In your packet
Attached to the legal status report is a memorandum of agreement to accept the $1,900 in exchange for that sliver. The sliver, I don't remember how long it is, but it's pretty much goes all the way around the corner, around the curb. On one end, it comes to a point. On the other end, it's only a little over a foot wide.
So it's a very small piece of property.
David:
That looks like it about 225, according to the survey. But in total, it's worth around 155ft. Nonetheless, we're only talking about a strip of property about just over a foot wide. And so I appreciate, you marking up that map, so that that was more clear to the directors and myself.
Do we need to, make a motion?
Kim:
Just a motion to approve the memorandum. And its execution is all we need. I would make that motion to approve the memorandum and its execution tonight.
Board Voting All Speak:
I'll second that motion. We have a motion and a second tonight to, for approval of the memorandum of agreement to convey the real property to the city of Castle Pines. Any further discussion on the matter? Hearing, Seeing none. Ask for a vote on the motion. Please indicate by sharing with us, your approval or otherwise, when called upon Director Crew, I. Director Merritt I. Director McEntire's, an I the motion passes unanimously. Counsel.
Kim:
Mr. Chairman, moving on to former item 9F there. Prior to Mr. Worley coming on board, there was a license agreement that we had drafted with Public Service Company to utilize a portion of our exclusive easement on the Legae property to run power lines within the easement.
You're gonna use use that power for your lift station, so you need it as much as they do. The license document came back signed by Public Service Company without any changes to our draft. Mr. Worley signed it. So tonight we would just like to have his signature that ratified, his signature ratified and have you accept that license agreement.
David:
Very good. Directors, you heard what council said about that service agreement. With PSEO for the district's exclusive easement, within the Legae project, namely for, electric continuity to our lift station and their needs as well. That being said, is there a motion on the floor to approve or ratify, the district's exclusive easement?
Robert:
I'd like to make a motion to ratify the licensing agreement with PSEO and district exclusive easement.
Board Voting All Speak:
Is there a second? Second. Director Crew seconded. Or Director Merritt has made the motion by Director Crew Seconded. Any further questions? Concerns? Comments? Hearing none. Seeing none. I ask for a vote on the motion. When called upon, please indicate by affirming same or otherwise. Director Merritt. I. Director Crew. I. Director McEntire is an I. The item passes unanimously. Counsel.
Kim:
Item number 9H is the expansion agreement with the Plum Creek Wastewater Reclamation Authority. We've talked about that agreement several times over the last few months. That's the agreement that establishes your right to obtain 13% of the new capacity in exchange for paying for that capacity. I think we've reviewed a draft of that before. It is in your meeting packet, and, we believe it's ready for execution.
Mister Worley has also approved it. If you're ready to move forward with that, entertain a motion to approve the 3.0 capacity expansion agreement.
David:
Beth, thank you for handing, these documents out to us. Any of those that require my signature, and I'm sure the rest of the directors, namely the treasurer or the secretary, as long as Jim, you have initialed those documents.
And counsel would be satisfied with that, and be able to execute that then tonight. With that, I would like to go ahead and make a motion to approve of the 3.0 capacity expansion agreement with PCWRA as presented tonight. As well as, as was, included in our board package, received last week. Is there a second on the floor?
Robert:
I'll second that motion.
Board Voting All Speak:
Director Merritt seconded my motion. Is there any additional conversation? Comments? Questions? Concerns? Hearing. Seeing. None. Please indicate your approval when called upon. Director Crew I, Director Merritt. I, Director McEntire is, as well. The item to approve that 3.0 capacity expansion agreement with PCWRA is unanimously approved. Counsel.
Kim:
Mr. Chairman, in order to pay for the expansion project, the board previously approved advancing one million dollars to the authority that has been paid and now there's another 4 million that will have to be paid in the future. In order to finance that, Matt is here to make a recommendation as to the RFP responses, and that would be the next item. And I'd like to turn this over to him for that one. Then entertain a motion to approve whoever you choose to provide those funds.
Jim Mann rises from the audience and passes out paperwork to the board and then goes to the podium to speak.
David:
Thank you sir.
Jim Mann with Elders (partners in the in the public finance lending business):
What we're financing is the, the district's portion of the expansion of the Plum Creek Wastewater Treatment Plant. Again, you did make a decision to utilize and fund balance for a portion of that project, leaving about $4 million that needed to be borrowed for the balance of the project to for it to be done.
We did, at your direction, do a request for a proposal for a bank loan. We received three proposals that were qualified. The low bidder was JP Morgan Chase at 3.08%. The high bidder was BB&T Bank at 3.82. We had one in between at 3.68%. What that boils down to, to mean for the district is that if you finance this over the entire 15 year period and don't make any prepayments, the $4 million in our loan is at this point $4,105,000.
Based upon where we are today with issuance expenses, would cost the district $5.18 million dollars. So about a little over $1 million of interest would be accrued. Because of the competitive nature of the proposal, we're happy to report that the low bidder is 280,000 dollars less than the high bidder. That's not to say that you would have had the high bidder, but that's a possibility.
So we always recommend that whenever possible, you get out there and put a competitive component into any financing you do, because that's when you get the sharpest pencil. I think in this case, it shows that if you would have been stuck with the high bid, you would have been paying about a little over a quarter million dollars in addition on interest than you would, previously.
Now, one thing I'll say is that, this obligation is pre-payable starting 2025. With the intention that, much of the revenues that are going to come in from, tap fees are going to be used to pay down this obligation. So if tap fees are being reseeded more quickly, you'll be able to pay the obligation off more quickly and then thereby reduce your interest costs that much more. Just as a compare and a contrast
This is at 3.08% for 15 years. Your, Colorado Water Conservation Board loan is at 3%. So it's fairly comparable to what you were able to get there. Granted, that goes up over a longer period of time. But, interest rates have come up from where you ended up signing those loan agreements as well.
The obligation itself does include a dual revenue pledge. So you're pledging not only the wastewater revenues, but you're also pledging water revenues in the event that there is a shortfall from the wastewater utility in terms of being able to make the monthly deposits necessary to go in and make the bond payments on a semiannual basis.
The only time you're going to use water revenues is if, for whatever reason, there is a shortfall in the wastewater utility. We use the dual pledge simply because when we go out to the marketplace to look at investors, they like to see that at a bare bones minimum, you've got about $1.25 left over after you operate the utilities, make any debt payments.
In the case of the wastewater utility as a sole pledge. We were barely covering a one times coverage, without, non-recurring revenues. That's fairly thin and you would have felt that in your interest rate. So as we talked through it, by combining the revenue pledges, we were able to bring that coverage ratio up to just under two. So two times coverage. Which made for a very attractive obligation for the bidders to look at and that's reflected in the interest rate that you received.
The one hiccup that we ran into is that the Colorado Water Conservation Board requires that we show that, twelve of the previous eighteen consecutive months, that the utilities would be bringing in at least one times coverage, before they'll sign off and say you can go ahead and issue this debt.
We had a conversation today. You're well above that one times coverage in terms of, what, the utilities. It's just a matter of getting a certified public accountant, an independent one, to sign off and say that coverage is there. Then the Colorado Water Conservation Board will then sign off and you can issue the debt. We're going to be in a position to close.
The one thing I will say is that based upon all this happening over the last week, we are in a position where we had originally set up to close for this Friday. It's likely going to get pushed into next week. So these numbers will change just very slightly in terms of what the actual interest cost is going to be because we're going to end up closing few days later.
I don't know whether there's going to be any additional costs from our legal consultants on the deal, but other than that, that's the only additional cost that may come in, in terms of what this obligation would be. With that, that's kind of the high level. You know, we're very pleased to work with the district on this obligation. It has turned out to be a little bit more work than what we thought it was going to be, in terms of getting through all the legal questions.
But we're very happy to be here. And again, my name's Jim Mann, and I have with me Melissa Buck. She has been working with us on this deal, and I wanted to bring her along this evening so that you see her face. In the event at a future meeting, she's here, and I'm not here.
David:
Very good. Jim, question. Yes? The nuance that you described as a 1 or 1.25, percentage, revenue over what cost?
Jim:
So when you calculate the coverage, the first thing you do is you take all your revenues and you operate the utility.
David:
Okay, so we're in million seven? Yep. Okay.
Jim:
And then after you've operated the utility, we need to show that you've got at least one and a quarter or $1.25 for every dollar of debt service to make a difference. In total.
David:
In total. One million. 1.105. Yes. Okay, and over what period of time?
Jim:
Typically the coverage is done on an annual basis, that coverage test. So it's really it's going, that coverage test, once you issue the debt is going to be done on an annual basis, and it's going to be based on your end of year numbers.
David:
Our shortfall was a little over $2 million dollars. Hence having to use water enterprise revenue to compensate for that shortfall.
Jim:
And the thing about the wastewater utilities, you've been running it on a very frugal basis, where you're really about a one times coverage and you're just making enough money to pay your obligations, your operations and any debt. That puts you in a tough position if you have to go out and borrow money. That's why the water enterprise was brought into the mix, because the water enterprise is generating a significant amount cash that we could then prop up the wastewater utility and get some favorable interest rates.
David:
The and you were using the 2019 approved budgeted numbers?
Jim:
We actually started with the 2017 audited figures and are looking at the 2018 end of year numbers to really do the calculations. We have to actually go backwards. It's always going to lag.
David:
In any case we're going to have a small makeup there? Yep. I see that that, 2025 is the first time that we can prepay, without a prepayment penalty. What's the prepayment penalty beforehand?
Jim:
There is no ability to prepay prior to 2025. Penalty or not? Right.
David:
Okay, so it's almost a contradiction of effort where if we happen to have the win fall of the tap fees, as an example, we're not able to prepay that? Or was that a prepayment in full that is the issue?
Jim:
Any time after time in 2025, after, whatever the date specific? December 1st, 2025, you can prepay the day, but not until then. And so in the event that you get a huge windfall, you're going to want to invest that out to December 1st, 2025.
David:
Note that are investment return, at least from an institutional point of view, where the risk is nil is a fraction of the 3% that you're getting.
Jim:
But actually, believe it or not, right now, you could probably come close to that. You're not gonna match it, but you're gonna get pretty close. The other alternative is that you have to do a defeasance, a legal defeasance of some of the debt. Which means you're taking whatever cash that you had and you are putting it in an escrow account to legally diffuse future principal payments.
The problem with doing that is, again, the investment usually makes that more costly than just holding the money, because the investment on the escrow account tends to be less than what you're able to do in the open market. Sure. But that's one way, if there was a real desire to do it, that you could really lock that money up and make sure that it goes to the stated purpose.
Otherwise, a future board or future district board may choose to say, well, we're just going to keep making our debt payments and we're going to use that money for something else.
David:
We had the same prepayment requirement from the other two bidders?
Jim:
It was the same bidder, same prepayment requirement for the number two bid. The number three bid had no prepayment concerns, but the actual cost kind of outweighed the benefit of having that prepayment consideration.
David:
Well it's around 70 basis points, and so, okay. The nuance, in regard to the reporting requirements, I see here is a 30 day after adoption of the annual budget, which we can comply with, the audited financial statements that we have 270 days. Have you made sure that we're not looking at having to do any additional audit work to comply with this?
Jim:
Yes, your audit was completed well before the 270 days. And that languages is pretty standard for the audit.
David:
This is for the 2018 audit. Yeah. And it's going to be further out than 270 I think. So, as long as you're not 270 days out, as long as you're not pushing this, we. As I recall, we just approved the 2017 audit maybe 60 days ago, so.
Jim:
Which gets you right under the 270 days.
David:
Well, we're going to get close, so. Yeah. That timing, which is typical, does it work for you? Yeah. Or work for them? Okay, all right. And. Jim, I did not have this in my packet. I don't know if, directors if you did, I know that we had, had this emailed to us the moment that we had a chance to. And that's when I had a chance to look at it as well. But it was not in my packet, okay? That being said, is there any other questions or comments for Jim?
Denise:
Just one quick question. When we originally started talking about this, we were looking at a bond of over 5 million, and we fronted a million of our own reserves. Had we financed that extra million, and I know you can't give an exact number, but what would that have cost in interest over the term of this loan, assuming it pays out as it's predicted to?
Jim:
You would be roughly paying another 20% of that interest cost. So, you know, it's one, almost 1.2 million. So 20% of that would have been the additional interest cost. Okay. So you would have had another 270,000, 250,000 dollars of added interest costs that would have been added to the overall. Okay, thank you.
David:
Alright Jim, thank you so much for your work all the way through this evening. And again, your partner's name? I'm sorry. Melissa. Melissa, thank you for coming, it was nice to meet you. Thanks for the Q&A. Is there anything more we needed, Jim? Counsel?
Kim:
Not unless you have any questions. And I think you're ready to entertain a motion to accept the proposal from JP Morgan Chase, if that's what you choose to do.
David:
Yeah, I think that, directors, any more questions, comments, concerns? I'd entertain a motion to, approve the proposal from JP Morgan Chase as presented tonight. That's the same one then dated, we'll put a date to it, yeah? Call it, December 17th.
Kim:
Mr. Chairman, James made a good point, if you make that contingent upon the approval from the Colorado Water Conservation Authority, that would be good because if that doesn't come through, this deal may not fly.
David:
And that application has been made?
Kim:
It's been discussed. What's required is that the study that James mentioned from a CPA audit. Yeah, okay. And we have that in the works already, you'll hear a little more about that in a little bit.
David:
You would make a motion. Okay. That entity again was the Colorado?
Kim:
It's the Colorado Water Conservation Board.
David:
All right, I'd like to make a motion then that as directors representing this district, approve the proposal submitted by Elders, partners in the in the public finance lending business, presenting the proposal dated December 17th, 2018. Where in their recommendation, to accept the JP Morgan Chase proposal, provided that the Colorado Water Conservation Board, approve, this transaction as well.
Board Voting All Speak:
Tonight. Okay. We have a motion on the floor to approve the proposal, submitted tonight, dated December 17th with the condition of of the, approval from Colorado Water Conservation Board. Any further discussion from the Directors hearing? Seeing? None. look for a vote on the motion when called upon. Please signify by saying yes or no if you are not employed tonight, when, Director Crew. Yes.
Yes. Director Merritt. Yes. And Director McEntire is a yes as well. The motion, as requested, as presented and as voted on is approved unanimously. Again. Thank you sir. Thank you ma'am. Counsel.
Kim:
Mr. Chairman, the next item is item 9, former item 9 J consideration of engagement of Kutak Rock as bond council in connection with the expansion financing.
In preparing these loan documents, it will be necessary for us to provide opinions to the bank and also to bond council and also to you that you've taken all the steps necessary to properly consummate this transaction. But as part of the transaction, you'll need bond council to opined that the transaction is tax exempt. The reason you get such a low rate is because this obligation does not require taxes to be paid on the investment income by the bank, in this case. Very important piece of all of these transactions. You have in your meeting packet an engagement letter from Kutak Rock to provide that opinion, and it's ready for approval if you wish to do so.
David:
Based on what was in the package and what the directors have reviewed, as well as recent history and the engage of Kutak Rock in a like kind of opinion and consultation, I would look for the directors, if there's no immediate Q&A of councsel to make a motion.
Robert:
I'd like to make a motion to consider the engagement of Kutak Rock LLP and the bond council in connection with the aforementioned financing.
Board Voting All Speak:
Is there a second? I’ll second. Director Merritt made a motion to approve the engagement Kutak Rock LLP as bond counsel tonight. Director, Crew has seconded, for any other last minute conversation. Concerns, comments, hearing, seeing none, and called upon, I ask for your approval or denial of the motion tonight. Director Crew. I. Director Merritt. I. Director McEntire is an I, as well motion approved unanimously. Counsel.
Kim:
Mr. Chairman former agenda item 9 K is the adoption of a resolution declaring the district's intent to reimburse itself the proceeds that have been advanced. The Internal Revenue Code requires such a resolution. It's a way of avoiding fraud, basically, so that you can't come back three years from now and say, hey, you know, we should just reimburse ourselves for something we did years ago and has already completed.
That resolution is not in your packet. It is in the stack that Beth handed out to you a few minutes ago. And all it does is, describe the advance of the $1 million and your intent to reimburse yourself once this loan transaction is completed. And if you're ready, we can entertain a motion to approve that resolution.
David:
I'll make the motion.
Describer:
Council huddles for a discussion off mic.
David:
Counsel, I'd like to go ahead and make a motion tonight as we're considering the adoption of this resolution to adopt the resolution, in its current form, pending any modifications after the final word from Jim. As a byproduct of the review and approval of the audit have to believe in some form or passion or another they're connected and they have to be, slightly modified.
Whether they are there or not, please accept the motion that I'm going to make on the floor to adopt the resolution declaring the district's official intent to reimburse itself with proceeds of the future tax exempt borrowing for certain capital expenditures, which are in connection with the wastewater plant expansion project to be undertaken by Castle Pines North Metro District. Identifying the nature of such capital expenditures and funds to be used, such payment providing certain other matters in connection there with.
Board Voting All Speak:
Is there a second? A second the motion. We have a motion on the floor and a second to approve. That agenda item, formerly known as nine K or elaborately laid out and not repeated by me tonight, looking for votes from the board of Directors, when called upon, if there's no further conversation, comments or questions. Hearing. Seeing. None. Director Crew. I. Director Merritt. I. Director McEntire is an I that motion is unanimously approved.
David:
Do you want to jump to, item formerly known as 9 M?
Kim:
Yes, Mr. Chairman, go ahead, former 9 M is this board sitting in its capacity as governing body of the wastewater activity enterprise. You can do that now. You don't need to adjourn in a separate meeting. The resolution that has been handed to you by Beth is a draft. Now, I think it's very close to final after receiving that email. But we still want this approved contingent upon the agreement of the Colorado Water Conservation Board. What the resolution does is it sets parameters for the final closing of the loan documents.
So within that resolution, we will choose somebody to have the authority to sign documents, as well as to approve any changes that take place between now and the time of closing. The resolution is in that stack of paper that you were handed. It approves all of the closing documents that are necessary. Within the language of the resolution, you also be approving the engagement of an independent public accountant to complete the report that Mr. Mann talked about to satisfy the the Water Conservation Authority.
If you have questions, you probably have questions on this one, if not, that's fine.
Jim:
One other point on the adoption of this resolution is that we should also appoint a delegate from the board to act on behalf of the board, to sign off on any final changes that are necessary for the closing documents. There may be some tweaks to that final resolution as we get the to the conclusion and the closing period, and somebody needs to just be able to sign off on that as part parameters.
Kim:
There's a second person that will also approve. Once you've approved the resolution, we'll get the delegate. Then you'll also have to have an authorized person to take care of actions that are required after the closing. So we'll address those in a second.
David:
Eric, do we have an idea of what this certification might cost? And this is a certification of the 2017 audit?
Financial Director Eric Harris:
Correct, so looking at the additional bonds test with the CWCB loans, the three loans that are in place, through the water enterprise fund. The district, there's a look back period of 12 of the prior 18 months. I reached out to the district's public auditor partner, the gentleman Russell White, who was here several meetings ago when he presented the 2017 audit.
He said this is pretty typical in the industry. There's always some sort of analysis that has to be done. It's a different level of attestation, if you will. It's not a full blown audit, it's just a review saying the calculation is correct. So what that will entail of is, Amanda, we have the calculation, we have to pull our numbers, put it together.
He he he said he'd deliberate and turn it around in a couple days. Give us a letter saying yes, we do agree with that calculation. That should be enough of a certificate, if you will, for CWCB and then we'll continue on.
David:
We're talking hundreds of dollars, not thousands, right? Correct. Do we want to take into consideration both those items at one time? Former 9 M and N, given the difference between the water enterprise and the wastewater? Is acknowledged? But it's both the same?
Kim:
In a single motion, you mean? Yes. We can't do that. Okay.
Describer:
The board has a discussion off mic.
David:
After Conversation, with the directors, with your presentation tonight. I'd like to make a motion tonight that that we adopt resolution for CPNMD wastewater activity enterprise, authorizing the wastewater activity enterprise to incur the indebtedness of the Special Limited Revenue loan in approximately 4.25 million dollars for the purpose of financing the water treatment expansion at Plum Creek Water Reclamation Authority.
Of course this includes improving the forms of loan agreement, promissory note, revenue pledge agreement, and other related documents authorizing the execution delivery of their of and performance they're under. I've also been asked to serve as the designee that you were asking for, Jim, knowing that at closing our secretary treasurer will join me in executing the final document Counsel.
So I have a motion on the floor as read a few minutes ago. Do I have a second?
Board Voting All Speak:
So I have a motion on the floor as, are, as read. Three minutes ago. Do I have a second? I second. We have a second on the floor. We have a second from Director Merritt. Second that motion. For the, wastewater activity enterprise and the adoption of the resolution for, the activity on the wastewater enterprise to incur the indebtedness.
Any other comments, questions or concerns? Hearing. Seeing none. As for vote on the motion. When call upon, indicate your yes or your no. As you desire. Director Merritt. Yes. Director Crew. Yes. Director McEntire is a Yes. That item known formally known as nine M, is unanimously approved. Counsel.
Kim:
Mr. Chairman, within item nine M, you will also need to appoint a responsible, something called a responsible person, for post-closing compliance matters. That could be the district manager. It could be one of the board members. It's probably the easiest to have district manager take care of that. Post closing? There are various reporting requirements that have to be followed up on. And that's what that's for.
David:
Is that typical of district manager or of our finance director?
Kim:
The finance director would be more common.
David:
Then that finance director is Amanda. Should we appoint her?
Kim:
That would be fine.
David:
Jim?
Jim:
Yeah, absolutely fine, you bet. No problem.
Kim:
I would just say the finance manager rather than Amanda, because you just never know.
David:
Okay, comes out so easy, Amanda. Okay, very good. Nothing personal Eric. I hope she feels better. Alright, very good. I will need to amend the motion that we can include, yeah?
Kim:
If it's okay with the second, that's fine by me, that'll work.
Robert:
That's approved. We're good.
Kim:
Former item 9 N. Former item 9 N, your now sitting as the board of the water activity enterprise. As Mr. Mann explained, the water activity enterprise is backing the payments from the base water activity enterprise.
That resolution that you have in the stack of documents, is the document that's allowing the water activity enterprise fund to act as collateral for the loan. That's ready for approval if you're ready to do so.
David:
Yeah, it's obvious that we couldn't have done them at the same time unless we had mannequins or puppets or ventriloquists or what have you. Sorry about that.
Kim:
Mr. Chairman, that should be contingent also upon the Colorado Water Conservation Board approval of the transaction.
David:
Very good. Then I'll go ahead and make that motion if it pleases the board tonight, to adopt a resolution of the Castle Pines North Metro District Water Activation Enterprise authorizing Water Activity Enterprise enter into revenue pledge agreement with the Wastewater Activity Enterprise, pursuant to which the Water Activity Enterprise will pledge its system revenue to secure the Wastewater Activity loan.
This of course is contingent upon the approval by the Colorado Water Conservation Board and extends to include, or is made to include, approving one of such revenue pledge agreements and other related documents authorizing the execution delivery thereof at performance there under is there a second?
Denise:
I will second the motion.
Board Members Vote All Speak:
We have a motion on floor to approve. The item known as formally known as Action item nine N and a second by Director Merritt or. Excuse me, Director Crew. Any additional comments? Questions Concerns by board? Hearing.
Seeing. None. I ask for a vote on the motion. When called upon, please indicate with your approval or otherwise. Director Crew. Yes. Approved. Director Merritt. Yes. Director McEntire is a yes as well. Motion passes unanimously.
David:
Is there any other items Counsel that is come up as a part of this we want to address right now or, Are you good? I'm good.
Okay, very good. Thank you so much. Beth, thank you for this. After the meeting, we'll hang around and execute those that we can, making sure that either yourself or Kim has signed those and Jim has signed those as well before the board finishes their work.
All right, that being said, action item formerly known as 9 C, a consideration of the proposal for the 2018 financial audit. Our new manager, Mister Worley, will you please handle items formally known as action item 9 C and B? Which again, is that engagement of the financial folks for the 2018 audit and then the 2019 board meeting schedule and holiday closing schedule.
Jim:
I will, sir, thank you. Thank you, board, for showing the confidence in me to keep rolling. I'll hit the ground running tomorrow morning at 7:30 at PCWRA. Thank you again, I appreciate that. I enjoy working with all of you.
The first item is a proposal of the 2018 audit you have in your packet, a proposal from Rubin Brown. Rubin Brown performed the audit for us last year, if I'm not mistaken, right Eric? This will be the second year they've done that. Their cost last year was I think 25,000 is what we paid last year. This year it ranges between 23,000 and 26,000, roughly the same cost. This is a pretty, challenging district to audit, I would say. A lot of information. We'd like to continue with Rubin Brown for another year. Recommend approval, please.
David:
Directors any questions for Jim on that?
Describer:
The Board Huddles for a discussion off-mic.
David:
Jim, in the conversation with the directors, as it relates to engaging these folks again, It's, I prefer the 23 than 26 obviously. In the hopes that Craig comes back next month with ways that we can simplify the district so that maybe next year it's under 23. Those are just some of my Christmas wishes.
I can jot those down and put them on your desk if you'd like for when you hit the ground running tomorrow. But, with that, we have no problem. Do we need a motion to approve that?
Please, yes, sir.
Is there a director who'd like to make a motion to approve those functions on auditors for 2018?
Denise:
I'd like to make a motion to approve Rubin Brown as our auditors for the 2018 budget.
Jim:
It's for the 2018 audit, financial.
Denise:
For the 2018 audit, Thanks you, Thanks.
David:
Is there a second?
Robert:
I'd like to second that motion.
David:
We've got a motion on the floor by Director Crew, a second by Director Merritt to engage Rubin Brown, the entity known as Rubin Brown, to provide this district with the audit for 2018. That audit work is, planned to begin when, Jim?
Jim:
I think some of it's already actually started as far as Eric's group is concerned. Started to putting together some documents. Why don't you give us a time frame?
Eric:
Field work is scheduled for April, end of April. Then, approval of the audit in June. There is numerous requirements that requires Castle Pines North Metro District to have an audit, including state statute, including our debt covenants with our outstanding debt. We would like to continue with them.
As Jim Worley mentioned, last year was our first year audit. They did an incredibly good job, very efficient. Noted with the complexities that the district has, including the multiple different funds. So, there's a lot of activity that occurs with all that. So I would like to, of course, commend them as well.
Board Voting All Speak:
Very good. And there's motion on the floor. Second. Any other questions comments concerns hearing seeing none. I ask for your vote of approval or otherwise. When called upon Director Crew. I. Director Merritt. I. And McEntire is I. Jim, you have a unanimous approval. Please engage Rubin Brown to begin that fund audit.
Jim:
I will, thank you very much.
Item D, formerly known as 9 D, you have your in your packet. Actually, it's in there twice. Once it's attached to my report, the other it's by itself. That's the board meeting schedule for 2019, the remaining holiday schedule for 2018 and the estimated holiday schedule for 2019. The only difference you'll notice are the first two meetings of the year. Historically, we've always had those the day after Martin Luther King Day or the day after Presidents Day, even though we're not necessarily off.
The board can still have them that night if you want to. It's absolutely not a problem, we've just done it this way historically. So, that's the recommendation. Everything else is on the Monday, the third Monday starting at 6:00. So unless you wanted to change the January and February meeting to have them on the actual Monday, then I recommend approval of the schedule.
David:
Directors, any comments questions? Okay. Sure, I'll make a motion to approve the 2019 Castle Pines North Metro District board meeting and holiday closure schedule as presented tonight, both separately and in your report, Jim. Is there a second?
Robert:
I second that motion.
David:
We have a second. Motion in the second. Directors, any more comments, questions, concerns? Council have you looked at it? Yes. No concerns. Eric it conforms with the complicated compiling of our financial matters on a monthly basis? No interference there as you can see?
Eric:
We'll look and see what calendar day that those fall on. As far as, sometimes there's a somewhat tight turnaround, including this month. But we will go on a somewhat quarterly basis to make sure we get financial statements ready on a timely basis.
David:
Again, it's been typical. I think we're good to go. I just thought maybe I'd. Right Yes. Give you a shot.
Board Voting All Speak:
We have a motion on the floor. And a second. No further discussion. And, ask for a vote on the on the on the motion. When called upon, indicate your yay or otherwise Director Crew. I, Director Merritt I and Director McEntire is a I, as well. That request Mr. Worley is approved unanimously. Continue.
Jim:
Thank you. I'll go to my report. Now, the only other item that we have is G, which I think you were going to address, Mr. Chairman and then I'll have Eric stand up here in just couple of minutes related to L for the table.
But I wanted to address a couple of things in my report. You have a copy in your packet there. A couple of things I want to point out. Number one, and it's actually in Eric's report, later that we certified mill levy. That has been taken care of. We had to do that by December 15th to get it done.
That's all been taken care of and finally behind us. Also in the packet, I didn't know it, but in the packet each month you get an engineer's report. It comes from Greg Sekera with Kennedy Jenks. It highlights all the different things that they're working for us on. Certainly I'll try to address any questions if you choose to. If not, please accept the report.
The last item that I have, other than thanking you, which I did a few minutes ago, last month when I stood up here, I told you that we had lost a long time employee, who chose to retire, Janet Burnham. I told you the two most important things I believe to make sure things keep going is the utility billing and payroll.
I understand why the payroll is so important. So I reached out to CRS - Community Resource Services. For full disclosure, I used to work for them. Two individuals have come in and done a fantastic job. Dawn Hershberger, is excellent in utility billing. She came in here and has learned the Continental System, with help certainly from Continental, through one of their techs.
But she has learned that system and the utility billing for the end of November went out on schedule. You should have all receive that. I want to commend Dawn for her great work, she is still doing it, she was in the office today. The other one, which is certainly important is payroll. Also from CRS, Nancy Weiss came in and has taken over the payroll system.
We've had a challenge or two with PERA, but that's all been taken care of. I want to commend both of those people, for jumping right in here and doing an excellent job. I would venture to say probably not too many people in the community noticed any difference in the utility billing. I want to commend those publicly. That's all I have. Any questions?
David:
Yeah, nice work Jim. CRS, I second, has done a wonderful job for the district and it's residents. The one outstanding item I did see on my bill is the title of the renewable. I won't use that three letter word, but rather the investment fund, if we can keep that on the hot list so that as we move into 2019, those that are making that investment are assured that that's exactly where it is, or what it is, and where it's going.
Otherwise, they've done an outstanding job for the district and I will go on to share with those of you that are here, the directors already know it. We have a couple reports that are typically here and Eric's here to make the financial presentation. You'll notice that there's a couple of them missing. They were only missing as a byproduct of our worst case, a day or two, of compiling this information and pulling this rabbit out.
of the hat, as it were. The information is in hand now. Those reports are being compiled. Nothing that is subject enough to concern myself. I haven't heard from the directors or from Jim, that there's, any reason to be concerned until which time we get those reports. And, of course, we will be receiving them. They're just not available to us tonight.
We're able to conduct the business that we have to do tonight, as usual. We'll make sure that the financial files are charged accordingly as they come due. We should be 100% on target, on track and on time across the board by next month. If there aren't any other questions or comments for Jim, I'll use that as a segue into, introducing Eric from Pinnacle for the financial report.
Thanks Jim.
Eric:
Mr. chairman, board, it's a pleasure to be here in front of you this evening. My name is Eric Harris. I work with Amanda Castle as acting accounting manager for the district. Um, thank you. We reached out to Mr. Jim Worley about a week and a half ago and said, there was a transition that occurred, the employee that retired Janet Burnham did house a lot of the processes needed to keep the district running on a daily basis.
It was wonderful to have Jim reach out to CRS to make sure we had continuity in the processes. From the standpoint of utility bills going out of time, they did. There's just some lingering items that we were closing up as far as just making sure everything closed up the accounting system from payroll and utilities, but we're getting our arms around that.
We should be fine for this next month. With that, being the Monday, being so close, our last payables run was on the fifth of this month. With any accruals, it wasn't really, advantageous even that produce financial statements at this time. As far as any activity for November, the district was still receiving invoices in the mail.
Like I said, I'll lock this up for this next board meeting, making sure financial statements are available for you to review and give a full presentation. But this evening, as, financial report is absent from your board packet, what you'll see is just sort of a ratification of the last month's payables in front of you.
What that is, is, from, a total of $307,659.91. That includes general fund expenditures for parks and open space in the general fund, as well as the three enterprise funds and all electronic disbursements that occurred during the periods of November 10th to December 7th.
David:
Yeah, while waiting on the board packets, directors you have some of the early drafts of those reports. Again, they'll be brought into typical format. Let's just make sure that when they are finalized, for the current period, that Jim gets a copy. Jim, directors get a copy so that all files are charged with those that we're missing tonight.
Again, thanks Eric for showing up in Amanda's condition and helping out. You were a great help. It's with your presentation that I'll go ahead and make a motion in his request to approve and ratify the current payables, as written on the agenda tonight for November 2018. Those are for checks 24013 through 24047.
That's to ratify the general fund, open space parks, debt service for 33,478.80 of the three enterprise funds, 168,731.39 and all electronic payments from all funds of 105 or 4972 for the same total as Eric shared with the earlier $307,659.91.
Do I have a second?
Robert:
I'll second that motion.
Board Voting All Speak:
We have a motion and a second for items as characterized, formerly known as not as just characterized, as just described. Under item, formerly under item nine L. Any further discussion comments questions seeing hearing none. Ask for vote on the motion with the yay or nay. When called upon Director Crew. Yay! Director Merritt. Yay! Director McEntire is a yay. Eric, you hit it out the park motion approved unanimously.
Eric:
Thank you sir. Any other questions from the board? Go ahead.
Robert:
Just a final question, how's Amanda?
Eric:
Oh, she's doing well. We're hoping she's back in the office by mid-week. Her whole family's battled influenza, so we'll see. Hopefully, I think they turned the corner, so we hope and pray that she's back this week.
Robert:
Appreciate it, thanks.
Eric:
You're welcome.
David:
And before you leave, as a segue into, just a couple comments I want to make about the 2019 rate and fee structure. I would like to make sure that everyone that is here knows and understands that work by this board, over the course of a myriad of months and a mountain of paperwork to look through and analyze, study, culminated in going back to the drawing board and looking for additional feedback, additional analysis, additional studies to ensure that much like the, Parker water debt that we looked at, that we were using our resources as wisely as possible.
That being said, our approval came about 30 days later than we had otherwise hoped to. However, while meeting the seat requirements for those approvals, and we are in full compliance.
We conducted this in a very historical, from my perspective, and others that I've spoken to, honest and transparent process. That being said, you have to know that approximately 3500 taps, that we service, that correspondence in one form, fashion or another, we ensured was received by or residents. We heard back from three. Okay.
Now I'm not saying that we didn't hear of, have comments and questions and conversations much more than that. But at the end of the day, there were three that just couldn't see it beyond, their concerns to be on the same page as we. Simply put, we added 3% to the water, cost of water, operating water department, and we added 4% to the cost of operating a sewer, wastewater company.
And as Jim and Melissa are here to testify, they're bare bones, bare bones. Just enough to cover the costs. Right, wrong or indifferent, it was in the months and hearts, and intellectually, what this board of directors believed was the right thing for 2018. Going into 2019 to hold, any adjustments otherwise that were not, a byproduct of, of growth, but rather just rates of fees at that three and 4% for water and wastewater, respectively.
I just want to say nice job, directors, great job. I couldn't be prouder to be serving with you in that regard. I know that I speak for at least 2000 of our residents who I met and had lengthy conversations with during our campaign, etcetera. That by virtue of them not sharing with us their displeasure with what we did, I think I think that's thumbs up. So thank you very much.
I also want to make sure that, Eric, you and Jim keep in mind as we move through the 3% capacity debt situation, that we keep in mind, that I'm again, and we need to hurry. I would like to potentially make one more adjustment moving into 2019, with regard to our rates and fees. I brought it up last time. I did not approve, or make a motion to approve the budget contingent. I don't believe on, an affirmative or otherwise, but again, an encouraging word to look into.
We're down to crunch time. What I'm talking about is a renewable water fee. This is a fee, but it would go into the renewable investment fund. This is the one that is collected by all new permitted activity. Bartle and Wells shared with us where we were a bit behind, the curve in regard to the amount of money that we do charge for those, products and services.
I suggested that we make sure that we don't break any contractual obligations that we might have as a district with any of the developing community, number one. And Upon making sure that we have that right look at immediately having a discussion with those folks to increase that. Maybe over a period of time, again, the idea was maybe $2,500 per quarter, all for quarters, for a total of $10,000 permit increase or renewable investment fund, on every new permit during that period of time. Taking then I think our renewable investment fund, investment upwards to where the rest of our neighbors sit.
Then again, not wanting to shut off the activity, or leave a sour taste in anyone's mouth. I believe we need to play catch up. Jim please look at those agreements, have Kim look at them as well, making sure that we would not be in violation of anything. If so, let's get together sooner than later as we contemplate debt in the future, as well as using those investment funds. Eric, I know that were attempting to become, create parity amongst our neighbors and ourselves, and take advantage of what is a definitive number within the city before that opportunity, it no longer exists as well. Okay? Very good.
Jim:
Mr president, if you don't mind. I have one quick thing, more of a clarification. We talked about the financial statement, monthly financial statement, that time didn't allow this time. Are you wanting to have one for the month of November or are you willing to wait to do the year end one? Which, of course, would be at your next board meeting.
David:
Without a credit from Petco, we want one.
Eric:
Understood, we'll break out our hours associated with that. We'll also look at, if the board would be willing to look at the transition that we didn't intend to happen during this timeframe. But yes, we will provide that for you.
David:
Very good, you know where we live. If we need to have some additional conversation, I know there was some give and take there. It's good to have that paper trail. I'm not sure that we're not on the same page, so.
Eric:
Yes, sir. We will discuss that.
David:
Very good. Thank you. Thanks, Jim. All right. Action item. We're done with action items. Other than, a very, very important, last but not least, and this was formerly known as action item number nine A. This was the appointment to build a board vacancy left by Susan Rosenkranz. Some time ago, or Kathy, I'm sorry, Kathy Rosenkranz. Probably, about 60 days ago, maybe 90 at the most. This board has taken this situation serious. Has entertained a number of applications, by way of interest letters and resumes. Reviewed, considered, discussed them and we have come up with a decision that we would like to inform the public, as well as staff, today of that new appointment.
He happens to be sitting here, with us tonight. As I said, we wanted to make sure that we didn't run him off before it's time. We asked him to join us tonight. Counsel, I don't recall, even though it's only been since May 21st of this last year. When we took office, did we take an oath of any kind?
Kim:
You did, Mr. Chairman. We prepared an oath with a blank in it. We don't know who we're giving it to, but we just in case you make the appointment.
David:
Very good.
Kim:
The appointment should also be contingent upon confirmation of qualification, because the appointee has to be registered elector of the district and we can confirm that fairly quickly, but not until tomorrow.
David:
Understand, so do we defer the oath?
Kim:
No, the oath can be sung tonight without any problem.
David:
Very good. This gentleman has been an advocate of this district and more so, in my opinion, of the residents of this city. In fact, if it weren't for his stellar, rock solid position that the residents come first, when making these kinds of decisions and being part of this type of business, he would not have been considered by this board.
We couldn't be happier to provide everyone with the name of the gentleman that we decided to ask to join us. His name is Charles Lowen. Chuck, come on up to the to the podium, if you would, please. And it is, with the details. Is it Charles or Chuck on that oath? Chuck. So it should be Chuck Lowen, counsel, on the oath. Do we want to administer that oath orally, or is it just in written form?
Kim:
It is in written form that you're welcome to administer it if you'd like to.
David:
Well, what do you think Beth?.
Beth Dower, Seter, Vander Wall & Mielke, P.C.:
I think you want to read it.
David:
No, I think you want to read it. You thought you were going to get away without my picking on you tonight? Please administer the oath to Charles. Can you?
Beth:
Actually, that would, I'm sorry.
David:
Very good.
Kim:
Mr. Chairman? Yes? You want to entertain a motion to make the appointment first?
David:
Yep, we sure do. While it's four pages of signing, there's only a paragraph for me to read, so it won't take us that well. It's with the introduction I just made and made sincerely that, I would ask the directors, if there's, any Q&A that remains between yourselves and Mr. Lowen?
Okay, and conversely, is there, well. We'll we won't start that until you get up here. I'm going to introduce a motion, from one of you to approve. Chuck Lowen is our new, to fill our board vacancy and be our new fourth board of director, to fulfill the Kathy Rosenkranz, position in term. Do I hear a motion? I'll Second. Nope. You're going to make the motion.
Robert:
(Complaining about the mic, intelligible speech)
David:
Yep. Just hit the button once.
Robert:
I'll make the motion to accept Chuck Lowen as a new director, contingent to what's the wording I need for his background, confirmation and qualifications for the position.
Board Voting All Speak:
Second? (Denise seconds but fails to open her mic) Think we're good? We have a motion on the floor to confirm. Chuck Lowen is the new director and a second. No further discussion. Seen or heard. Ask for a vote on the motion before I administer the oath. We call upon an affirmation of Yay or otherwise. Please Director Crew. Yay. And Director Merritt. Yay! And Director McEntire is a Yay.
David:
Before we get on to what otherwise, you know, sometimes comes with balloons and whistles and things of that nature. I can't promise if there is or isn't. We do need to elect or recognized on the current board, the position of secretary. Since our swearing in, May 21st of 2018, Denise Crew has been acting in that position of not only treasurer, but also secretary.
I think it's a little over board to continue with a formal motion to make Denise Crew, secretary treasurer. Then I would like to make that motion tonight that this board point Denise Crew to the position of both secretary and treasurer moving forward. Is there a second?
Board Voting All Speak:
I second that motion. We've got a motion on the floor and a second to, appoint Denise and and, her to acquiesce as, both our secretary and treasurer moving forward. Vote on the motion when called upon please. Director Crew. Yes, Director Merritt. Yes. And Director McEntire is a Yes, as well. motion's been approved.
David:
Mr. Lowen do you want to step forward, please?
I, David McEntire, president of the board of directors of Castle Pines North Metropolitan district in the county of Douglas, state of Colorado. Hereby certify that at this regular meeting of the Board of Directors of Castle Pines North Metro District, held this day, December 17th, 2018, at 7404 Yorkshire Drive, Castle Pines, Colorado. Starting at 6 p.m., the board determined that the vacancy had occurred within the Board of Directors of the district and that it was necessary to appoint a new director to act until the next director election of the district that and that nominations were open. The appointment of a new director, and that upon unanimous vote there was appointed to board, a qualified candidate of the district. He is to subsequently act until as such, until the next regular election of the district one Chuck Lowen. I do?
Chuck:
I do.
David:
Okay, welcome aboard.
Describer:
Chuck moves to shake hands with the board and the staff.
David:
I further certify that I have caused a certificate of the appointment to be delivered to said new director and to the division of the local government of the State of Colorado as of this date. Close my two weeks with that. Chuck, you've got to come back.
First time I've ever done this thing. While it's not difficult, I'm making it more difficult than I could do that to you. Repeat after me, I, Chuck Lowen
Chuck:
I Chuck Lowen
David:
Will faithfully support the Constitution of the United States
Chuck:
Will faithfully support the Constitution of the United States
David:
And of the state of Colorado
Chuck:
And of the state of Colorado
David:
And the laws made pursuant thereto
Chuck:
And the laws made pursuant thereto
David:
And will faithfully perform
Chuck:
And will faithfully perform
David:
The duties of the office of director
Chuck:
The duties of the office of the director
David:
Of the Castle Pines North Metropolitan District
Chuck:
Of the Castle Pines North Metropolitan District,
David:
Upon which I am about to enter
Chuck:
Upon which I am about to enter
David:
I'll check this last page. Welcome aboard. All right.
Oh, come on, sit down. Up here!
Alright, I'd like to continue the meeting. Specifically item ten. These are the director matters and I'm not certain that our directors have not figured out a way to include their matters under most of the previous headings, but I may be mistaken. Director Crew, any further matters to be handled tonight? No. Director Merritt?
Robert:
Not at this time.
David:
Appreciating, all that we accomplished tonight and again just couldn't be, happier with my colleagues and proud to serve with you guys. Merry Christmas and Happy New Years to my colleagues here. To staff, thank you for all that you do and all that you represent to the residents of this city. To the folks in the audience and to those that are viewing online, Merry Christmas and Happy New Year.
We have, the last item on the agenda, which is a public comment section. We didn't have anyone that had an opportunity or that took the opportunity to speak earlier. Is there anyone that would like to take a moment to speak now, like get up at the podium, wish us a Merry Christmas or anything like that?
We wish you a Merry Christmas. I'm only getting silly up here, so, we're going to close the public comment section, tonight. We've got one last bit of business, which is item 12, an adjournment of this meeting. But before we do, I'll run again, any last comments, questions or concerns from counsel? Nothing. Nothing, District Manager? No, sir. Nothing. Finance Director. None, sir. Very good.
Board Voting All Speak:
Directors Motion to adjourn. Second. I second that motion. Director Crew. Your name? Yeah. Director. Merritt. Yeah. Director. Logan. Yeah. Director. McEntire. You have a unanimous, motion or unanimous vote on the motion. Motion carries. Meeting over.