Forest Lakes Metropolitan District, Pinon Pines 1, 2, and 3, Dec. 4 and 13 – District participates in Northern Delivery System; rates increase for 2024; budgets approved

FLMD and PPMD 2 and 3
Northern Delivery System participation agreement
Future water reuse possibilities
Rates increase for 2024
2024 budget—FLMD, PPMD 2 and 3
Amended 2023 budget for FLMD
2023 audit engagement letter
2024 budget—PPMD 1
Annual administrative resolution
Board member election

By Natalie Barszcz

At the Forest Lakes Metropolitan District (FLMD) and Pinon Pines Metropolitan District (PPMD) 2 and 3 meeting on Dec. 4, the board approved participation in the Northern Delivery System (NDS), approved the 2024 budgets and mill levies subject to receiving the Jan. 3 revised property tax assessment, and approved rate increases and an updated contract for services with Triview Metropolitan District (TMD). The board received budget-related updates on the Northern Monument Creek Interceptor (NMCI) pipeline project and the Pikes Peak Regional Water Authority/Colorado Springs Utilities (CSU) Indirect Potable Reuse Study.

A town hall meeting preceded the regular board meetings via teleconference at 3 p.m. District Manager Ann Nichols confirmed that no residents attended the six-minute meeting to receive updates on the FLMD public infrastructure project status, and the PPMD 1 and 2 outstanding debt and financial statement reviews. The PPMD 1 all-resident board members did not attend any of the scheduled meetings on Dec. 4. A rescheduled special meeting was held on Wednesday, Dec. 13 at 4 p.m. At the PPMD 1 special meeting, the board approved a reduction in the debt service mill levy for PPMD 1, adopted the 2024 budget, certified the mill levy (pending the Jan. 3 revised property tax assessments), and approved the annual administrative and board member election resolutions.

Note: The meetings were held via teleconference.

FLMD and PPMD 2 and 3

Treasurer/Assistant Secretary Douglas Stimple, chief executive officer of Classic Homes, was excused.

Northern Delivery System participation agreement

District Attorney Russell Dykstra of Spencer Fane LLP requested the board approve a proposal for the district to buy into the capacity of the NDS.

Nichols said:

The district proposes a participation agreement in the NDS to connect the district to the CSU water storage tank (Highway 83) and deliver return flows back to the district.
TMD upfronted the cost of the NDS that is awaiting completion of the pump station at the Highway 83 tank before water can be delivered. See www.ocn.me/v23n12.htm#tmd.
The district will own 3.7% of the total share capacity of the pipeline.
CSU will charge a convey, treat and deliver fee annually to TMD for 25 years. The district will pay 3.7% of the total annual cost billed to TMD (subject to CSU rate increases).
The delivery fee will also increase incrementally for FLMD if TMD needs to increase the meter size in the future.
The district budgeted $200,000 in 2023 and $800,000 in 2024 (split into five payments of about $199,506).

Tom Blunk of CP Real Estate Capital, representing Forest Lakes LLC and Forest Lakes Residential Development, said it was important to protect water rights with TMD and complete the loop for the district.

Nichols said even though the district is not quite ready to exercise control of its return flows, the water supply including surface water is virtually all 100% reusable to extinction, and all the first use water supplied to customers can be recaptured and legally reused. It is essential in this environment to retain water rights and get the water back to the district when needed, and the TMD agreement will allow this to happen (via an existing interconnect) when the Beaver Creek flows into Bristlecone Lake are not very high, she said.

The board approved the NDS Participation Agreement with TMD, 4-0.

Future water reuse possibilities

Nichols said the district is considering moving its wastewater treatment to CSU in the future through the NMCI pipeline. The NMCI pipeline project request for proposal design is in process, and CSU is close to choosing a consultant. The NCMI will move ahead only if after 30% of the design phase reveals the pipeline is the most efficient way to provide service to customers, instead of making the costly regulatory requirements to the Upper Monument Creek Waste Water Regional Treatment Facility. The 2024 budget includes $90,000 for the district’s share of the design cost. The Pikes Peak Regional Water Authority/Colorado Springs Utilities Indirect Potable Reuse Study would cost about $350,000, and a grant for $250,000 had been requested from the Colorado Water Authority. If the grant is successful, the remaining cost of $100,000 will be split between the participants, she said.

Rates increase for 2024

Dykstra said the district had not received any public comments before the meeting. He opened a public hearing for the proposed 2024 rate increases for water, wastewater, and landscape services for FLMD and noted the increases had been published over 30 days in advance and posted appropriately on the FLMD website from Oct. 11, 2023.

Nichols recommended the board approve the proposed 7% increase in water and wastewater service rates, with no change in development fees, and a $1 increase for the irrigation/landscaping monthly fee. The increase is necessary to get the rates up to a level that will sustain operations for the future now that development fees cannot be relied on as the residential districts grow closer to buildout, said Nichols.

The board approved the rate increases, 4-0.

2024 budget—FLMD, PPMD 2 and 3

The boards unanimously approved the resolution adopting the 2024 budget and appropriating funds for 2024 for FLMD and PPMD 2 and 3.

Nichols said the mill levies are exactly the same as in 2023 for FLMD and PPMD’s 2 and 3, and she requested the board approve the resolutions to set the mill levies for the districts, subject to any final change after the El Paso County Assessor notifies the district on Jan. 3 with the adjusted property tax assessments.

Blunk said the debt service mill levy for PPMD 3 will be analyzed in 2024, and it’s possible that the mill levy will be lowered in 2025.

The board approved 4-0 the mill levies and transparency notices for FLMD, and PPMD’s 2 and 3, subject to any adjustment in early 2024.

Note: The mill levy for PPMD 2 was approved at 55.664 mills, and PPMD 3 was approved at 50 mills for collection in 2024. The mill levy for FLMD is set at 0.000 mills. The 2024 transparency notices for all four districts (including PPMD 1) will be posted in January 2024 at www.forestlakesmetrodistrict.com.

Amended 2023 budget for FLMD

Dykstra opened a public hearing to consider approval of a resolution adopting the amended 2023 budget for FLMD.

Nichols said the amendment is required at the end of 2023 for the conveyance of the public infrastructure from Filings 5, 6, and 7 development and Phase 2 of the Falcon Commerce Center. Collectively it amounts to just over $24 million ($9 million includes public infrastructure expenditure for roads that will be conveyed to the appropriate jurisdictions—El Paso County and the Town of Monument). The amendment increases the expenditures to sufficiently cover the conveyance, said Nichols.

The board approved the 2023 budget amendment, 4-0.

2023 audit engagement letter

Dykstra requested the board approve an engagement letter with Hoelting & Co. for the 2023 audits for FLMD and PPMD 2 and an audit exemption request for PPMD 3.

Nichols said the fees had not yet been finalized via letter, but the FLMD’s fee was expected to be $17,150, and the Pinon Pines districts’ fees are expected to be $6,250 each, according to the auditor.

The board approved the engagement letter subject to final legal review, 4-0.

The board approved the third amendment to the TMD Contract Operations Agreement to increase the fee by 10% for a total of $18,150 per month (the fee includes water and wastewater operations; customer billing; and the increase adjusted for the landscaping fee). See TMD article on page < 15 >.

The Dec. 4 meetings adjourned at 4:53 p.m.

2024 budget—PPMD 1

Dykstra opened the public hearing for the 2024 budget for PPMD 1.

Nichols said the assessed property values rose significantly on existing homes and the little bit of new construction in PPMD 1. She proposed reducing the existing debt service from 31.5 mills to 20.5 mills beginning Jan. 1, 2024, and said she would not know if the district would have enough mill levy to cover the operating expenses and management for PPMD 1 until the adjusted property tax assessment is received on Jan. 3 from the El Paso County Assessor.

President Mike Hitchcock said he did not want to put too much burden on the taxpayer, just pay the bills.

Nichols said even with the 11 mills reduction to the debt service, the district would still retain a little cushion at the beginning of the year and through to the end of 2024.

The board unanimously approved a resolution to adopt the 2024 budget, appropriate funds, and set the mill levies at 29.133 mills for collection in 2024 (subject to any necessary adjustment after the final evaluation of property tax assessments from the El Paso County Assessor on Jan. 3).

The board unanimously approved the 2023 audit for PPMD1 for a fee of no more than $6,250.

Annual administrative resolution

Dykstra said the state Legislature mandates that special districts must now provide a town hall for residents to attend annually. The district will hold an annual town hall meeting on the first Monday of December 2024 at 3 p.m. Out of the 120 town hall meetings previously held, only two residents had attended, and although there is good intent by the state Legislature, the meetings have not been super effective to date, he said.

All four boards approved the 2024 annual administrative resolution that includes the addition of an annual mandated town hall meeting.

Note: This reporter did not attend the town hall meeting at 3 p.m. on Dec. 4.

Board member election

The board unanimously approved the transparency terms for the board member election scheduled for May 2025.

Note: The all-resident five member PPMD 1 board has two director positions vacant. The three incumbent directors are required to be present to maintain a quorum for voting purposes at each meeting. Board director positions are not term limited.

The meeting adjourned at 4:18 p.m.

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Meetings are usually held quarterly or, when necessary, on the first Monday of the month at 4 p.m., via teleconference. Meeting notices are posted at least 24 hours in advance at forestlakesmetrodistrict.com. For general questions, contact District Manager Ann Nichols at anicholsduffy@aol.com or 719-357-5810.

Natalie Barszcz can be reached at nataliebarszcz@ocn.me.