Study Session
April 21, 2025
Transcript
Describer:
Here is the agenda for this event:
Study Session Special Meeting
Monday, April 21st, 2025, at 5:30 p.m. at 7404 Yorkshire Drive, Castle Pines, CO 80108
I. Call Special Meeting to order.
II. Roll call. Determination of quorum. Disclosure of potential conflicts.
III. Consider approving April 21st, 2025, board meeting agenda.
IV. Finance Items.
A. Presentation: Cash & Investments.
B. Review: Monthly Claims for Payments:
1. Review: Payments made from March 15th, 2025, to April 18th,2025.
V. Legal Items
A. Review: 2025 Petrocco Farms Lease Agreement.
B. Review: PCWRA IGA for Bond Repayment, Reclaimed water diversion pond upgrades.
C. Review: Proposal for Mineral Rights Evaluation.
VI. Executive Session, District Manager Performance Review and Contract. The Board may upon motion and a 2/3 vote, enter into executive session for the sole purpose of conducting contract negotiations and to instruct negotiators as allowed by Sections 402(3)(a) and 402(4)(e)(1), Colorado Revised Statutes. Proposed motion: I move to enter executive session to conduct contract negotiations
pursuant to sections 402(3)(a) and 402(4)(e)(1), Colorado Revised Statutes.
VII. Adjourn.
Describer:
The video starts on graphic with a white background and forest green letters which says “Castle Pines North Metro District Study Session April 21, 2025”. The meeting opens on a shot of all board members present.
Board President Jason Blackaert:
All right. good evening and welcome to the Castle Pines.
Board President Jason Blackaert:
Sorry. Again. Okay. Good evening and welcome to the Castle Pines North Metropolitan District special meeting. Today is Monday, April 21st, 2025 at 5:30 p.m.
Board Voting All Speak:
We'll call this special meeting to order, and we'll start with the roll call. Jim. present no conflicts. Thank you. Tara. present no conflicts, Jana present, no conflicts Leah present, no conflicts. And I'm Jason present with no conflicts.
Director Blackaert:
We'll move on to considering approving the April 21st, 2025 board meeting agenda.
Board Member Tera Radloff:
Moved to approve, as presented.
Director Blackaert:
I'll second that. Having a second. We'll go to vote. Jim.
Board Voting All Speak:
I, I Tara, I Jana, I Leah. I, I approve as well.
Director Blackaert:
So we will go ahead and open up item number four finance items. Good evening Eric.
Financial Director Eric Harris:
Good evening. Board. welcome to tonight's, It's a special meeting. Correct. As you may recall, I just put forward a number of topics for us to kind of have a brief discussion on that are more informative in nature as far as a background for the district's back office and operations.
Financial Director Eric Harris:
particularly more finance related. So those topics will come over the next, you know, several, several meetings. But tonight, just wanted to talk about, briefly cash and investments for what the district holds right now. So with all that being said, I wanted to dive right in and feel free to interrupt me if you have any questions, whatsoever.
Describer:
Eric is presenting from this Format:
TO: Board of Directors – Castle Pines North Metropolitan District
FROM: Eric Harris, H2 Advisors (H2)
DATE: April 21, 2025
RE: Work Session – Overview of District Cash & Investments Introduction
The purpose of this memorandum is to offer the District governance an overview of the Cash Management
Processes within the District.
1.) District Regulatory Environment –
a. Legal Investments of Public Funds – C.R.S. § 24-75-601.1
b. Public Deposit Protection Act (PDPA)
c. ASC 305 - Accounting
2.) Operational
a. District’s Operating Checking Account - i. City-Wide Banks (Transitioning to UMB)
b. District’s Investment Account - i. COLOTRUST
3.) Policies & Procedures
a. Implementing a process related to 90 days of working capital in the District’s Checking account.
b. Currently reviewing District records and resolutions for past Policy
c. Currently Maintains Proper Segregation of Duties for all Cash Management Processes - i. Cash Receipts/Lockbox - ii. Wires/ACH Transfers - iii. Positive Pay using Decision Rules - iv. Remote Deposits
4.) Recommendations
a. Switch Reserve Investments to a COLOTRUST Edge Account for higher investment earnings
b. Currently looking at a system and processes to update the District’s Merchant Processing and
Payment Platform
c. Investigate improvements to the Positive Pay Processes
d. Currently looking at a system and processes to update the District’s Account’s Payable Process
Financial Director Eric Harris:
the district, in my, memo, I don't know if you have it available. Nathan. Nathan or not? just several bullet points just to go over. but just wanted to start off briefly as, the regulatory environment that special districts have to operate in, in the state of Colorado. there are several things that are applicable.
you have a legal reference up there for, Colorado Revised Statutes 24 Dash 75 601. And really, what that is, is what's baked into our, our, our law that special districts have to, you know, basically hold cash and investments in US denominated dollars, all the basic, basic legal fees associated with all the securities that districts can hold.
You can't go out and, you know, you know, have very risky investments. You know, you can't go out and broker public funds. What you do is you you can hold several different identified types of securities with that. And what we do on our side is we mitigate a lot of that compliance work. investing in local government pools.
So we have people to allow, you know, people that take care of those, investments for us. So we don't have to worry about all that stuff. We don't have to go to a brokerage house. We don't have to go to investment bank to kind of manage our own investments, if that makes sense. we can certainly dive into that a little bit more, but that's the background associated with, that restriction that we have to abide by.
what you will see a lot of special districts is they'll defer to that statute as far as their investment policy. a lot of it has in terms of maturities and some of those nature. So you have to have, securities that I think is mature less than five years. yeah. So that's essentially all it is, is pretty lengthy, statute.
But if you want to dive into it any particular time, we can certainly do that. the next thing is the Public Deposit Protection Act. this is at the state level. And what this, I guess the, purpose of this act is to protect, local government funds in the event that anything happens in our federal banking system becomes insolvent.
What it does is it gives priority to local governments so that you can access your funds. Any, bank account that the district holds has to be insured and collateralized up to 102% of the funds that are being held. So there's, there's kind of a lot of, only certain banks allow you to, hold local government accounts.
So that's, and we use citywide banks are, be for the districts accounts. So there's a huge compliance piece associated with that that the banks have to take care of. From the district's perspective. This anytime we we need to open up an account. There are several kind of check boxes that we have to do. In addition, the banks registered those funds with the state as well.
So that's just something for you to be aware of, of how districts funds are treated differently from yours. In my funds, any sort of small business or business funds as well in the banking system. so on top of that, we also have there's some accounting, stuff that we have to report on as well. So in the district's audit, we actually have to mark to market, which is really easy to do for the district's, cash and investments.
So essentially fair market value of all. It's of all the district funds. So if you go to the audit, it's, it's pretty boring language, but we have to go through it every single year with our with the district's auditor is what it does. Is it, it proves and, points out all the compliance pieces that I just spoke about.
you know, to the penny, the fair market value associated for all the funds that the district holds in the bank account. Right now, the district has approximately. I'm going off memory from the end of March. 49.5 or $50 million around that ballpark of funds on the district's bank account right now. Any questions? Just. Ken. Okay. next up is, and, well, in that citation, if you go, if you pulled the audit, Nathan, I think it's on page 28 of the document.
Describer:
On Screen:
Estimates
The presentation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.
Subsequent Events
Management evaluates subsequent events through the date the financial statements are available for issue, which is the date of the Independent Auditors Report.
2. Cash, Cash Equivalents And Investments
A summary of cash, cash equivalents and investments as of December 31, 2023, follows:
Cash with county treasurer, fair value $47,536, Deposits with financial institutions, $390,063, Colorado Government Liquid Asset Trust (Colortrust) $50,746,957 for a total of $51,184,556. The above amounts are classified in the statement of net position as follows: Cash and gas equivalents: Government activities, $1,428,941, Business type activities $49,755,615 for a total of $51,184,556.
Financial Director Eric Harris:
If you scroll all the way down, you will see that.
I know, yeah. Right there. Yeah. the reporting, with this, and it's AC, let me make sure I get the citation right. 305. it basically says there's an active market for your, for your assets. And that being the US dollar, if you had more complex assets which are legally able to.
Jason:
Eric. none of us have gotten this document. Nathan. Is this part of.
Eric:
It's not part of the packet? Okay. Yeah. I just, you would have received this packet, and, you know, last summer when you approved the audit. And so I just wanted to pull that up right now. And what you'll see that under footnote two, I believe, right there is, the district's register of, cash at the end of the year and then the subsequent footnotes, proving out, how they valued the US dollars that the district owns and has on their balance sheet, as well as, all of the, regulatory language associated with it.
So that's one more thing we have to do from, the district standpoint, when we have to kind of report our cash balances. from an investment policy perspective and from a procedural standpoint, what we what we try to do is keep approximately 90 days of cash working capital within the district's checking account. Now, it's seasonal in nature.
and right now we're getting we have just got caught up in the form of, monitoring the district's bank reconciliations and everything from the transition period from last September. And so we got that up to date. So now we're implementing a procedure so that we're targeting to have 90 days of cash at any particular time in the district's bank account to fund any expenditures that are needed from a process standpoint, going and then all other funds will be swept into a district's, colored trust account.
And what they call a trust account is, is a local government investment pool. You can think about it as, you know, like a Wells Fargo or anything else. But what they do is they have, investment advisors that manage, several different funds that any local government has the option to invest in at any particular time. There's several that are out in the marketplace.
C-Safe call a trust. Of course. You have the option to go out into a private bank and purchase CDs or anything else and self-manage those, but a lot of special districts, I will say, there are less, don't have the overhead, if you will, to manage that process. So we outsource all that, those items to an investment, you know, investment house to take care of.
So there are several different types of these, with college trusts, going from the least return up to the greatest amount of return, they have what's called a prime fund, which, you know, basically mirrors what the prime rate is. You have their plus account, which is the the district currently has most of their funds in and they're the call a trust plus one.
And then they also have a new product called call a ColoTrust Edge. Excuse me. so, I don't have this as a component of any sort of handout, but if, if Nathan, if you want to go to that next document, it would have been zero two. this is just some examples. We get monthly reports associated with, what their holdings are.
Describer:
On screen. A large table of various returns on various investment products by Colotrust
Eric:
You know, everything from T-bills to overnight commercial paper to banks and things of that nature. but what you'll see is you get the greatest return in their edge product as well. but it's the least liquid. And what I mean by least liquid. It just takes a couple of days to settle out, as opposed to we have a pretty overnight access to other funds, if necessary, out of there.
Plus or Prime account. And there's there's quite a few difference. There's about a half percent difference in the return. So one of the recommendations I would probably I would like to make to the board and I don't think we necessarily need board action, but I would like to do is start moving funds over to their edge product to get just a greater amount of return for the district as well. So if you go to that Excel document, Nathan.
Board Member Leah Enquist:
So, Eric, quick question, that that particular product, is that like a riskier investment product, which could yield the higher return?
Eric:
So, real quick, Nathan, if you go back to their edge product, it's a PDF.
Describer:
On screen. A large table of various returns on various investment products by Colotrust
Eric:
And it would have been that's their prime product. scroll in a little bit and see which one this is. This might have been their plus one. Okay. So this is Colorado Edge. So what you see here is here's all their different holdings. If you scroll down in the bottom they're investing in T-bills. So I mean how it's not going to get that risky but or notes rather so the objective at least that I've always used for districts when they're holding funds is we have to at least be, you know, meet inflation.
That's the objective here. And to protect those funds. so in Nathan, if you go back to that Excel document and I will what I will do is I will send these documents out to you so you have them available. I didn't I didn't know how to package them up accordingly. This first page, is a current holdings across, the state for all the local governments.
Describer:
On screen. An Excel sheet listing the Historical Fund Data as described by Eric.
Eric:
And if you zoom in to this as of the start of April, what you will see is,
And here's the, daily yield, if you will, for their prime product. It was about 4.39%, 4.25% for their plus product, 4.39. And then you're at 4.64 for their, edge product. And it's very easy for us to make that change within our portal as well. so just want to kind of provide that, historical perspective. A lot of these maturities, like I said, they're going to change daily.
the district does received investment earnings, and deposits daily as well into the, into their account. so operationally, the district really has these two accounts right now. We were able to close down the district's first bank account earlier this year, which was great. We've had the district had that account open for probably 7 or 8 years.
right now we have our operating. The district has our operating cash account and their Cola trust account. from a procedural standpoint, the district receives cash receipts for utility bills paid and the operating account, and they cut, you know, checks and pay bills and vendors and all those things out of their operating account, as well as payroll and everything else that the district has a pure operational account.
The district's Colotrust account, we receive property tax disbursements into that account, monthly, around the 10th of every single month. and then we have the ability to segregate funds out and sub accounts as well. And that's been used for years by this district. 20, 20, 30 years had the ability, you know, from a process standpoint, you know, segregate out, receive renewable water fees, sewer fees, tap fees, all those things.
And we we could manage to at least on a cash basis of not just only in our accounting system. So that's that's what's happening on a procedural standpoint. a couple of things. like I said, I mentioned these before. we're still reviewing past, records and resolutions with District council right now for investment policies in the past or anything, you know, could have been from the early 90s.
But what we are ensuring is, you know, which is very standard for a lot of special districts, is that 90 day cash within the district's account and then swing and the rest into an investment pool. So we're in the process of reviewing that. We're also doing the procedural, on our monthly processes to make sure we have that 90 day cash on hand.
the district also utilizes positive pay as well. So we have some additional controls. We're reconciling bank accounts. We have all the appropriate segregation of duties in place. right now. And so that's, one thing I do want to note for you. and we're also looking at, changes to the accounts payable process as well. Whether it be, you know, online workbench for approvals and electronic disbursements to a clearinghouse to cut AP checks, because as of right now, the district does cut paper checks in this office.
And so we have the appropriate controls in place right now. But once it leaves this building, it's just a challenge for any business or any and susceptible to fraud. So we want to make sure we improve upon that process in the future. And so we can get dig into that in, you know, further months. and that essentially, and the last thing I will say is, we are looking at updates and to our processes for our merchant processing right now.
And that are possibly tied to the district's utility, billing provider. Right now, that process is kind of segregated in multiple different ways. So if someone pays by a credit card or a debit card on their utility bill, they'll go to a separate provider. But if it's through ACH, it's actually going to be through the district bank.
So we want to kind of consolidate that and automate that process as much as possible to mitigate any sort of controls. So we're looking at integrations into what's called CBS or the continental billing system. in the future, just to make sure that it's all integrated and connected and so we don't have any particular, information inside this district's office right now and basically get it to a top tier, you know, system from the standpoint of interaction with the rate payers and things of that nature.
but with that, just wanted to open up. If you have any questions, just want to give you a general overview of how the district's, cash and investments operate. and as well as, you know, what the district is doing internally on our side.
Jason:
I'll, let Jim chime in first since he's remote. Jim, do you have any questions today?
Board Member James Mulvey:
just real quick on the different funds that you have mentioned. any difference in costs or overhead fees or for the management of those accounts? anything significantly different I should ask you?
Eric:
All right. I don't believe so. I don't have that, off the top of my head, but I will certainly investigate that.
Jason:
Good question. Anybody else have any questions?
Board Member Tera Radloff:
Just quickly. So I was going to ask you about the positive pay. Tell me quickly how that works.
Eric:
There's several general, versions of this, but I'll keep this very high level. Just be, for the nature of our conversation. the district, does upload all the checks into the banking system to allow for permissions base for anything that's withdrawn from the district's account.
So we have the ability to accept or deny any pending transaction items associated with it. So if we have a check number, say, 1001 and to vendor A, the ABC sewer repair company, for the amount of $5,000, we're going to upload certain attributes associated with that transaction to the banking website, to allow that check to clear. But if that check or piece of paper is presented, that's off, or someone else steals that check or, defaces that Jack and presents that to our bank, it will be denied.
So it's an additional control, that it's that additional management that we do in-house for that. And as far as I know, the district has incorporated that process. So you're welcome.
Jason:
Any other questions? Okay. Thanks, Eric. I think we're, Good on that point. Did you, have a point with, payments? Anything stick out?
Eric:
nothing. Nothing sticking out right now.
but what I will do is I'll investigate the investment fees associated with that. the district does not pay. Oh, sorry. Jumping back to it does not pay any trustee fees or anything to those investment house. on the payments, getting to that, what is great is the district has fully transitioned to a monthly payables process right now.
So this claims what claims are going to be presented for payment and review are relatively bare right now outside of the automatic ACH is that are withdrawn from our the district's account. What we working with Susan and Nathan we have been able to get the utilities registered for automatic ACH and so everything for the wells, the wells, utilities and everything have been paid.
I believe that check is around 60 to $70,000. Or that withdrawal for the payment for that bill was presented. So, we had one manual check that was cut, that was presented. Nothing stuck out. And that was a regular check that we have. and then all the electronic payments were nothing out of the ordinary. But what you will see for this next month, because, Susan actually did did just process the bill pay today for the district will have that on this next month's report.
Jason:
All right. Thank you very much. We'll go ahead and close out item number four, then finance items, and we'll move to item number five. Legal items. Paul.
Legal Counsel Paul Polito, Esq.:
Let me try again. Good evening everyone. Nathan, I think you're taking over this Charcoal Farms lease agreement. Okay.
District Manager Nathan Travis:
All right, so this is something that, I'll bring again. Excuse me.
Describer:
On Screen: The opening of the Farm Lease Agreement.
FARM LEASE
THIS LEASE is made and entered into on this __ day of _____ , 2025, effective
as of January 15, 2025, by and between Castle Pines North Metropolitan District, a Colorado
special district, the Lessor, and Petrocco Farms, Inc., the Lessee, the addresses of each as set forth in Paragraph 18 below.
RECITALS
A. Lessor owns the four parcels of land described in Exhibit A hereto, situated in the County
of Weld and State of Colorado, together with all improvements, if any, on or appurtenant to said
parcels, and including three wells augmented by contracts between the Central Colorado Water
Conservancy District and Lessor. The above-described lands, and improvements are collectively
referred to hereinafter as the "Premises."
B. Lessor desires to maintain the Premises as an irrigated farm for the present.
C. Lessee desires to continue to operate the Premises as an irrigated fa1m.
D. Therefore, Lessor desires to lease the Premises to Lessee, and Lessee desires to lease the
Premises from Lessor. Lessor and Lessee agree as follow:
Nathan:
Bring it again at the meeting Monday. so this is a lease agreement for Petrocco Farms. we still own the land associated with the water rights that we sold up in Wells Fargo. So we are Wells Fargo, weld, Weld County. so we still own the dirt up there. this will be the third year in a row that we are positive that we are not going to lease land again for another year, so we'll see if it comes back.
But basically, even though Aurora has purchased the water rights, they put in kind of why this is coming so late in the year is there's a lot of communication that has to happen between, our water rights attorney Petrocco Farms, and then Aurora. So, we did get confirmation that Petrocco wants to farm the land again and that they have the water rights.
that they're leasing separately from Aurora. so this is just a lease agreement to allow Petrocco to continue to farm the land like they always have. this is not a huge revenue generator for us. The, lease term, I think, or the amount is $38,600. that's basically enough to cover our costs of owning the land and any associated fees.
There is a real advantage to us having this land be occupied because we're. It gets us out of, like, weed mitigation and kind of like general property maintenance obligations that we have. so Austin put this, together for us. Petrocco is, ready to go. Ready to roll. so bring that back for approval on Monday.
There is another farm up there called the Anders Farm. we don't know if they are going to lease that property again from us this year or not. Austin's working on back and forth communication with them to try and figure out if they have any interest. Any questions on that one?
Board Member Leah Enquist:
Does Austin and Paul, do you two coordinate collaborate? Are you supposed to. Do you need to? I was just curious.
Paul:
we have there's no sort of standard operating procedure for for when we do or don't. I mean, for example, I reviewed this agreement that he put together, but I didn't change it. This, you know, I'm.
I'm not going to mess with this. The districts then. this is the third iteration now, and Austin has been handling it, so that's I'm not going to necessarily step on his toes or something like this.
Leah:
Okay, thanks. But just curious.
Describer:
On screen.
Plumcreek IGA introduction:
INTERGOVERNMENTAL AGREEMENT (Bond Repayment)
THIS INTERGOVERNMENTAL AGREEMENT (“IGA”) is adopted and approved with an
effective date of To be announced, 2025, by and among the Town of Castle Rock (the “Town”),
Castle Pines Metropolitan District, acting by and through its Water and Sanitation Activity Enterprise (“CP Metro”), and Castle Pines North Metropolitan District (“CP North”) and Plum Creek Water Reclamation Authority (“PCWRA”). The Town, CP Metro, and CP North may be individually referred
to herein as a “Member” and collectively as the “Members.”
Nathan:
All right, so the next thing that I wanted to discuss, some kind of running point on all of these this evening. so this again, I'll bring it to board meeting on Monday. so this is an IGA for, between us and the Plum Creek Water Reclamation Authority. They are. They are our wastewater treatment plant that we're a regional partner in.
There is a reuse reservoir. which is basically the pond that they put our treated water in, and then we sell to the Ridge Golf Course. that pond is way out of spec, so it needs a pretty substantial rehab or overhaul. Total cost on that project. We don't have completely nailed down yet, but we're between six, about six and, $8.5 million.
So this IGA is basically us agreeing to to cover our portion of those costs. We were, very unexpectedly able to secure, state revolving fund dollars for that. So we're still waiting on the final loan paperwork to come through. but basically that's, a loan that we would get, through the state that has significantly lower interest rates.
So right now, we're looking most likely somewhere between three and a half and 5% on that loan. So significantly better than anything we get at market. So even though the the upper end of that project cost is around $8.5 million, the way that that's managed is it's actually divided by golf course. So there are four separate golf courses that pull out of that pond.
We're responsible for 25% of it. So we have one of the four golf courses as the Ridge. So, our right now we're looking at a monthly, a monthly debt obligation of between about eight and $9,000 that would be associated with that. that cost would be include will be included, enrolled into our up and coming rate and rates and fees study.
And so we would capture that with the rates that we charge the ridge for that reduced water. depending. And we might change how that structured a little bit. I know Eric's been looking at it. the Ridge is aware of this. They've been aware of it for a couple of years now. so they're they're expecting the the what will probably be a pretty, pretty significant price hike to their, current rate structure.
Leah:
When does this go like, when does it start?
Nathan:
so the idea would go into effect. we probably got a couple months to secure, the funding. we'll have to do a design review, but construction wouldn't start until early next year.
Leah:
Okay. And then how long has this been on your radar?
Nathan:
we've been talking about some version of needing to get this pond done. over. Probably the last 2 or 3 years now.
Board Member Jana Krell:
Can I ask for an overview of the scope? Like, what's the the the pond needs to be rehabbed,
Nathan
so it's, so it's a pond and associated pump house. So the current pond is clay lined.
Jana:
that's what I'm asking. It's not holding up.
Nathan
So we need to do, a full line, full lining. And then it's also got an associated pump station that needs to be rebuilt,
Jana & Nathan:
but the volume is still good. Yeah. Okay. But it would still have to be excavate it, put a new liner. Yep. And then refill or it's it's rehab. It's reuse water. So it's coming from the treatment plant affluent. So it's the treated water coming out of the plant.
Jana:
Okay. Okay. Got it.
Director Mulvey:
Okay. A couple of quick ones and I think maybe I'll jump in. it is a 25%. I mean, I understand for golf courses, we're doing a lot of them, but from a volume or flow rate, is that roughly where we need purpose and wondering if that was calculated or we're just sort of an agreed on number and then, just maybe flows over to Paul.
Jim:
but if we enter into this agreement and it sounds like it's sort of a foregone conclusion at this point, but, there's that that impacts and our ability to do any kind of inclusion. And if, you know, down the road we were looking at, you know, eliminating the metro district itself because that was a conversation previously.
at some point, does that impact our ability to kind of, essentially, eliminate the metro or merge it into another, entity, you know, government or otherwise?
Nathan:
yeah. So it won't happen. It wouldn't have an impact on our ability to potentially include with anyone. it's something that was talked about pretty, at length during the, Parker inclusion.
And effectively, Parker would just take over our seat at the wastewater treatment plant. They would also take over any agreements that we have. because this is funded by the rates at the wastewater treatment plant. there's not really any additional, hang up or anything like that. and then, yes, the flows that we pull for the golf course, for the individual car, golf courses are roughly 25%. It shifts a little bit depending on who uses what. But, it's a it's a fair number.
Jim
Okay. Thank you.
D. Each of the Members has determined that to secure and continue the availability of reuse
water for golf course irrigation, the Project is in the best interests of its residents, taxpayers,
and rate payers.
Describer:
On screen. RECITALS
D. Each of the Members has determined that to secure and continue the availability of reuse
water for golf course irrigation, the Project is in the best interests of its residents, taxpayers,
and rate payers.
Board Member Tera Radloff:
Thanks. So I did have a couple questions. in the recitals, it says that, in D, each of the members has determined to secure and continue the availability of reused water for golf course irrigation. And the project is in the best interest of the residents.
Tera:
Taxpayer and ratepayers. So when did we do that?
Nathan:
I will have to dig into that. So this was written by a A's attorney, and I can, get information on where they got that specific line item
Describer:
On screen. Recitals Section E
In order to finance the Project, PCWRA has applied for a loan from the Colorado Water
Resources and Power Development Authority (the “CWRPDA”), a body corporate and
political subdivision of the State of Colorado, and the Board of Directors of PCWRA has
passed or will pass a Resolution approving and authorizing a Loan Agreement with the
CWRPDA, and PCWRA has executed or will execute a Loan Agreement with the CWRPDA
for a loan not to exceed $8,500,000 (the “Loan Agreement”).
Tera:
because and then an E it says that, PC has passed or will pass a resolution approving and authorizing a loan agreement, which was executed.
So I think it gets to the question that Jen was asking, which was, you know, that seems like that would be something that would come before the board, before you represented the board at a PCWRA.
Nathan:
Correct. Yeah. So we have not we have not done anything at all with the loan agreement yet.
Describer:
On screen. Recitals Section K
While it is recognized that each Member will invoice the respective golf course(s) within its
boundaries for the amount of the Reuse Charges, including the amount needed to cover its
share of PCWRA’s obligations under the Loan Agreement, PCWRA’s receipt of funds
sufficient to meet its obligations under the Loan Agreement cannot be dependent upon the
golf courses’ respective willingness or ability to pay.
Tera:
Okay. and then in K that was a question I think you touched on or off Eric did, but basically it says, you know, that covers the reuse charges.
But my question is more this is covers covering the cost of the loan. But my question is how much are we charging the golf course above and beyond that for the water? Because I know in the past there have been some concerns from residents that the golf course is getting kind of a sweetheart deal, and I don't know whether that's true or not.
That's just something that I've heard. But, but that clause that we're covering the loan, I'd like to know how much we are charging them above and beyond covering the loan.
Nathan:
Yeah, I can, I can I don't have the exact rate off the top of my head. I can, I can look that up. And then, when we do the comprehensive rate evaluation, those are excuse me, all things that we'll look at.
But so we, I wouldn't say that we've charged that the golf course has a sweetheart deal. I wasn't involved when they were originally setting those rates. they are lower than the rates that we charge our residents, but that's more driven by. It's much cheaper for us to get that water, the reuse water to the golf course, than it is to get treated drinking water to the residents. but I can get all of that background information for you.
Tera:
Thank you.
Eric:
And one one important note on that if you look at the district's financials and you'll see those in your board packet coming up, what you'll see is a golf course delivery water in the water enterprise fund after reviewing kind of the infrastructure and everything and is true reuse water is discharged from the water treatment plant.
I mean, technically, I mean we can we can run that through the wastewater fund, which is where we would be paying this debt service, as well as all of the PCWRA member assessments through as well. so that the more than likely to be pulling that out of the water fund and putting that in the wastewater fund and calling it water delivery because it's reuse water.
and it's tied to the assets and the operations tied to those rates as well. But we do, cover that. We segregate this, those items out in our rate study. But you'll see more transparency on that side if we do that,
Tera:
I like some of that.
Jana:
I have a question, Eric, and it's probably just something I need help understanding.
But so if we're on the hook for a quarter of this 8 million. So we're roughly, let's call it, we are going to assist with 2 million. Why even go? Why even participate in a bond instead of just pay it, budget it and pay it. You know, to not have to pay interest is always going to be a better option.
Eric:
What one of the general comments you have with local government is you want to spread out the benefit of the asset, and of the useful life of the asset to the taxpayers for the life of the that pond. So I assume that pond useful life now will be extended for another 30,40 years roughly. That's why we would do that.
But more than likely, this won't be a 30 year note. It's maybe like an eight year note. Nathan okay. Yeah, we haven't looked at that. Our obligation is the same obligation that we do on behalf of the taxpayers of this district, because we're a member of this authority. The authority takes out the debt, and they're obligated to assess a rate and have a lean on a rate to all the member assessments associated with that.
I will say, you know, we could, you know, provide cash to the authority, but then the authority at the end of the day, the members are probably going to take out a loan as well.
Jana:
So I think I understand we don't want to tie all of our cash up in this one thing. Okay, so that makes sense.
Thank you Eric.
Eric:
Of course.
Director Blackaert:
All right. I think we can close out that item.
Describer:
On screen. NSAl letter to the district via Eric. First paragraph.
April 17, 2025
Attention: Mr. Eric Harris
Ladies and Gentlemen:
Netherland, Sewell & Associates, Inc. ("NSAl") is pleased to have the opportunity of providing to Castle Pines North Metropolitan District (the "District") consulting, petroleum engineering, geological, geophysical, petrophysical, estimation, and evaluation services as the District has requested or may request in the future (including any related draft, preliminary, or final reports or other work product, the "Services"). Services currently requested are outlined in Attachment I. Consulting fees for current Services will be charged in accordance with the fee schedule shown in Attachment I and out-of-pocket expenses will be billed at NSAI's cost. NSAI pledges its utmost effort in serving the District's needs in a professional, efficient, and timely manner.
Nathan:
All right, so the next thing I have, and, Eric has been kind of running point on this so he can fill in, any details, but so again, this is related to the farm properties that we own in Weld County. we're currently trying to figure out the best path forward, both financially and operationally for the district.
So one of the things that we need to do as part of that process is determine if we want to, sell the land, keep the land, if we want to sell the mineral rights, keep the mineral rights. And Eric has been working to get this proposal, from NSA. This is basically a proposal for them to come through and do that and valuation.
Paul and I did have a chance to briefly, kind of review this document. Everything, for the most part, is in order. There's an indemnification clause that we need to pull out. and then there's also a, rough cast estimate. I think it was 20 to $25,000. And then we want to, make sure that that is that there, that there's some language added in there that requires them to get approval before they exceed that amount.
But this is just to have to evaluate that, see how much it would be worth on the open market. and then figure out if we want to keep it and keep collecting those royalties like we have been, or if it's better for us to take it to market and sell it.
Tera:
So I do have a couple questions. it said that they may request retainer, but I didn't see anything in there about a retainer.
Eric:
No. Typically this is a firm that provides, support for a lot of bond underwriting associated with valuations in the state. so I don't think in this instance, they would ask for a retainer.
Tera:
And then, for Paul, it says any lawsuit or claim shall be brought in federal district court located in Dallas County, Texas. If such court has subject matter jurisdiction, otherwise in the state district court of that county. How does that.
Paul:
I think I get that with that. It's, from what I can tell a Texas company, they want to litigate in their own venue. I don't love it. I'm not going to fight about it. you know, many times if you have a dispute over something like this, the district will, in many cases, retain outside counsel.
whether that outside counsel is in Colorado or Texas. really want to make a bunch of difference to the district. It doesn't give me any heartburn. It's. You know, I'm not used to seeing that. Most of the companies we deal with are in Colorado, but it's and I have seen it and it's I'm fine with it.
Jana:
And, Nathan, can you remind me how we, came to this company?
Nathan:
yeah. So we've we've had a few meetings on this. Kim's office was working on, trying to find someone. We had, a meeting with, myself, Eric, Kim and Paul and Austin Hammer, our water rights attorney, to kind of go over this and come up with an action plan forward. Eric had familiarity with this company, and they'd worked with him, worked with he'd worked with them before, and so we directed him to reach out.
Jana:
Perfect. Thank you.
Eric:
And one of the challenges is there's very few firms that actually provide this. Their background is, they do provide services to, you know, every any property owner that has mineral rights associated, any valuation with them. like I said, I had a great experience with them before. They will, if necessary and if warranted, they will come up here and give a presentation to you all or provide a presentation or PowerPoint to, remotely as well,
Jana:
at the cost of 20,000 to 25.
That's low. I mean, I'm okay with a sole source. I was just curious where they came from and knowing that you've worked with them before. Great. Great.
Eric:
No problems whatsoever.
Jason:
Any other questions? Jim, do you have anything?
Jim:
No. I'm good. Thanks.
Jason:
All right. I think we can go ahead and close out that item. And there's nothing else we can go ahead and close out legal items altogether. And then our next item is number six. Executive session. The board meeting upon motion.
Leah:
Jason sorry, before We make a motion to go into executive session. I have a few questions about the solution that it set up.
And then I also thought it would be helpful to align on next steps for the district manager review, if that's okay. okay.
Jana:
Is that okay? I don't know if I follow the steps.
Leah:
Well, so, for example, my understanding is we're going into executive session to review the contract and talk about that. but when I pulled up, like, the slides for, like, what we want to do for the process, it looks like, before our board meeting on Monday, you'll want to have a meeting with, Nathan to go over his annual review.
Okay. And so I want to I want to align on that. And so make sure that that was correct and was on your radar, because that would be sometime this week. And then also validate, that are in our April board meeting. It looks like that we would go into executive session if you had any like questions or comments about, the review.
And then I think, like what we come back with on the contract is that right?
Nathan:
Yeah, yeah. So the executive session today is for you guys to kind of talk about performance, where you look at the contract, generally come up together with what you want to do there. Then I would have exactly like you outlined. Yep.
Leah:
So, yeah. So I just want to make sure because it's the first time we've done this. and then I think for the IT piece, I can just follow up with you offline. Okay.
Jason:
All right. Great. Okay. Now we'll continue on with item number six, executive session. the board may upon to meet upon a motion of two thirds vote in an executive session.
Paul:
It's the language below that the prepares.
Jason:
I move to enter executive session to conduct a contract negotiations pursuant to sections 402 parentheses, three say and 402 parentheses, four parentheses E parentheses one call of the Colorado Revised Statutes.
Jana:
I will second. Having a second. We will go into executive session now. This is your vote. Oh sorry. Vote Jim I Tara.
Board Voting All Speak:
Hi, Jenna I am Leah. I, I approve as well. Now we will turn to executive session. Will Jim be able to join us from.
Jason:
I'll call you Jim.
Jim:
Okay. Thank you. I'm going to hang up here then and wait for your phone call. Thanks.
Describer:
On screen: A view of the motion read from the agenda, then the executive session slide.
Paul
Okay, we have exited the executive session, and all of the conversation stayed within the bounds. of the, of, district negotiations.
Jason:
All right. Very good. We will close out item number six and move to item number seven and adjourn the meeting. Thank you. Everyone.