Government Affairs Update

September 2017

Barbara Koelzer, Regional Government Affairs Director








In this issue…


Boulder County
Council Approves Six Ballot Measures: The City Council voted to place six measures on the November ballot. The first measure is a four-year capital improvement tax designed to fund a list of projects and local non-profits. A second question would give the City bonding authority to raise additional funds in addition to sales tax revenue.

Three questions relate to Boulder’s plan to separate from Xcel Energy and operate a municipal electric utility. One question asks voters to provide more than $16 million in tax funding for the next three years of the project. The second question extends the City Council’s privilege to meet in executive session and the third question is a charter change designed to reduce the City’s legal liability. The last question involves a series of minor language tweaks to the city charter, none of which have significant impact on policy.

Inclusionary Zoning Ordinance Passes Second Reading: On September 5, the City Council approved an inclusionary zoning ordinance that creates a new five percent “middle income” housing requirement for affordable projects in Boulder for households earning between 80 and 150 percent of the Area Median Income (AMI). The ordinance also adjusts the cash-in-lieu option in an effort to incentivize developers to build for-sale developments rather than pay cash into the City’s affordable housing fund. The ordinance faces a third and final hearing on September 19. If approved the current inclusionary zoning ordinance, originally passed in 1981, will be repealed and replaced by the new ordinance.

Larimer County
Commissioners Add Ballot Questions: The Board of County Commissioners voted to put two questions on the November ballot. First, they decided to ask voters to extend the existing sales tax for The Ranch to pay for expansions and improvements. In addition, they agreed to a residents’ request to remove term limits for sheriff, clerk, surveyor, assessor and treasurer. The Commissions agreed that these “skill” positions require professional expertise and are not political seats per se.

Fort Collins
Council Says No to Water’s Edge Metro District: The City Council voted 5-2 to postpone indefinitely the Water’s Edge Metropolitan District service plan, effectively stopping the development of the project, targeted for adults with 848 dwelling units (patio homes, condos, townhomes and single-family units) and up to 70,000 square feet of commercial development. By issuing bonds, the developer hoped to build, finance and maintain the project, including a non-potable water system, parks, open space and recreation amenities. Water’s Edge is located between Douglas Road and Richards Lake Road on Turnberry Road.

Ross Cunniff made the motion, saying the proposed service plan wasn’t the best option for the project. He said it could be developed with fewer mills of additional property tax. The service plan called for a mill levy cap of 100 mills, 50 mills of debt and 50 mills for operating costs. Cunniff said 41 mills for debt would be “better.”

The City’s current metro district policy focuses on commercial development and Cunniff argued the City should re-examine its policy before approving any new districts. Mayor Troxell, who said it was a “good project” and Ray Martinez, voted against Cunniff’s motion. Staff had recommended approval of the service plan although it did not comply with the City’s current metro district policy because of its community amenities, all of which would be open to the public.

Raw Water Policy Approved: On September 5, the City Council unanimously approved a new raw water ordinance which will now become law on January 1, 2018. The ordinance increases the cash-in-lieu rate to $16,700 per acre foot and decreases the raw water requirement to reflect data on ten years of water consumption by existing customers.

The ordinance is part of the City’s plan to move towards a cash-focused system and ensure “that adequate water supply and associated infrastructure are available to serve the water needs of development.” Bob Overbeck argued that offering “discounted water” to development at the expense of current rate payers is unfair, but staff explained the fees are based on the cost of the water and by law the City can’t charge more. Overbeck based his argument on the fact that Wellington and Timnath charge much less for a four-bedroom home than Fort Collins. For example, Wellington charges $9,000 for a home on a 6,000 foot lot and Timnath charges $25,000 while the City will charge $9,000 under the new ordinance.

City Council Begins Work on 2018 Budget: During LBAR’s City Council candidate interviews, some candidates criticized city staff for miscalculating revenue projections. The candidates said staff couldn’t explain where the money went, but that isn’t entirely true. Because of the error, Loveland will have $17 million less than anticipated for capital improvement projects as the Council begins its 2018 budget process.

At a study session on September 12, staff explained that the City erroneously included certain funds in Loveland’s TABOR (Taxpayer Bill of Rights) excess revenue, leading the City Council to believe it would have $21.4 million in additional revenue to use for capital projects. After reviewing its methodology, staff realized the actual amount is $4.4 million, which presents a challenge for the 2018 budget and into the future.

Fortunately, all types of City revenues have increased over what was originally projected. General fund revenue sources – sales, use, and property taxes all increased this year. Water, power, wastewater and stormwater enterprise funds also received more revenue than forecast, as did the City’s transportation fund, which increased 10 percent over projections.

Weld County

GARA Endorses Gates, Fitzsimmons: The Greeley Area REALTOR® Association is endorsing John Gates for Mayor and Michael Fitzsimmons for Ward 3. Gates has served on the City Council for eight years and has also served as mayor pro tem. During that time he has demonstrated his support for REALTOR® issues. Michael Fitzsimmons has served as a planning commissioner and has been very active in the community as a volunteer. He impressed the interviewing committee with his knowledge and relevant experience.

GARA is not endorsing candidates for the Ward 2 or at-large seats. Only one Ward 2 candidate, Lavonna Longwell, participated in an interview with GARA. Brett Payton was unable to attend. GARA interviewed two of the three candidates for the at-large seat: Stacy Suniga and Edward Mirick. The interviewing committee felt both were good candidates but neither stood out as worthy of endorsement. The third candidate, Thomas Marlo, was unable to participate in GARA’s interview process.

GARA Supports Mill Levy Override: GARA’s Board of Directors unanimously voted to support School District 6’s request to increase property taxes by $14 million a year through 2023 by a mill levy override. The 2017 ballot language is nearly identical to the measure that failed in 2016. The money raised will pay for security cameras at high schools and bus replacement, recruitment and retention of staff to maintain class size, school technology for students, charter schools and updating textbooks, expanding summer school and workforce readiness programs. Quality schools are a top priority for home buyers and the District 6 is the only large district in the state with no mill levy override. More information is available here:

Council Funds Senior Housing Project: On September 5, the City Council approved a resolution authorizing assignment to the Colorado Housing and Financing Authority (CHFA) of a $5 million Private Activity Bond Allocation for the construction of a 96-unit senior living project. The federal government provides each state with an annual private activity bond allocation. The State then distributes the funding to cities and counties within the State.

The project includes one and two-bedroom units that will serve seniors with income of 30 percent, 50 percent and 60 percent of the Average Median Income. The total cost of the project is $14.1 million. In addition to receiving an allocation of non-competitive tax credits, the project is will also be funded via State tax credits.

NISP Plan Approved By Parks and Wildlife Commission: The Northern Integrated Supply Project (NISP) cleared another obstacle last week when its fish and wildlife mitigation plan was approved by the Colorado Parks and Wildlife Commission. The project also requires approval by Colorado Water Conservation Board and must be signed by the governor.

NISP would store water from the Poudre River in the proposed Glade Reservoir, which would be built at U.S. Highway 287 near Colorado Highway 14, and the proposed Galeton Reservoir near Greeley for 15 front range water systems, including the Fort Collins-Loveland Water District, Dacono, Erie, Eaton, Windsor and the Left Hand Water District. Water would be taken from the Poudre year-round depending on conditions, but the largest draw would be during the spring peak flow period. A decision from the U.S. Army Corps of Engineers is expected in 2018.

Business Coalition Pushing Transportation Tax: On September 5 Denver Metro Chamber of Commerce President/CEO Kelly Brough announced a coalition will push a 2018 ballot initiative for a state transportation sales tax. The measure will probably be similar to the failed House Bill 1242, which sought a roughly half-cent sales-tax hike over 20 years to fund major statewide highway expansions, transit, bike lanes and local transportation projects during the 2017 legislative session.

The coalition includes the Chamber, the Colorado Contractors Association and the Colorado Association of Commerce and Industry. The coalition will use the Chamber’s standing campaign committee, Coloradans for Coloradans, to campaign for the measure.
The Denver Business Journal says the ballot initiative will probably face opposition from the Republican Party and conservative organizations like the Independence Institute, who argue the State can come up with a new stream of revenue for transportation from its existing revenues if it just re-prioritizes its spending and cuts quickly growing programs like Medicaid.

TRID Rule Published: On July 7, 2017, the Consumer Financial Protection Bureau (CFPB) released the final rule amending the “Know Before You Owe” (KBYO or TRID) mortgage disclosure rule. As advocated for by NAR, the final rule clarifies the ability to share the Closing Disclosure (CD) with third parties – a victory for real estate professionals nationwide.

As outlined in the 2016 proposed rule, the final rule highlights an existing exception within the Gramm-Leach-Bliley Act (GLBA) and implementing Regulation P that allows lenders to share the CD with third parties (sections 502(e)(1) and 509(7)(A)). The CFPB recognizes the CD as a “record of the transaction,” which is “informative to real estate agents and others representing both the consumer credit and real estate portions of residential real estate sales transactions.” The CFPB notes that CD sharing is permissible to the extent it is consistent with GLBA and Regulation P and is not barred by applicable State law.

The final rule was published in the Federal Register on August 11, making it effective on October 10, 2017. Mandatory compliance is required by October 1, 2018.

GSEs Change Appraisal Policies: On August 18, 2017, both Freddie Mac and Fannie Mae, collectively the Government Sponsored Entities (GSEs), announced they would allow for the use of their proprietary automated valuation tools in lieu of traditional appraisals for some purchase loan transactions.

Freddie Mac will utilize their automated collateral evaluation (ACE) to determine home value by using data from multiple listing services and public records as well as their own data of historical home values to determine collateral risks. Homes must have an 80 percent or lower loan to value, be a one unit single-family residence, and the borrower’s primary residence. Prior appraisals on the property are not required. Lenders will find out if a property is eligible for ACE by submitting the loan data through Freddie Mac’s Loan Product Advisor®. Freddie Mac does not have an estimate for how many loans will be affected. ACE is available for qualifying home purchase loans as of September 1, 2017.

Fannie Mae will allow lenders to receive a Property Inspection Waiver (PIW) on certain one-unit principal residence and second home purchase transactions with loan to value ratios up to 80 percent. Home value is determined through Fannie Mae’s data based valuation methods. Unlike Freddie Mac, Fannie Mae will require that the property in question have a prior appraisal in electronic format that has been analyzed by Fannie Mae’s Collateral Underwriter®. Lenders must submit the loan data through Fannie Mae’s Desktop Underwriter®. Fannie Mae anticipates no more than 5 percent of loans will be affected, but that could change in the future. PIWs for purchase loans are available immediately.

National Flood Insurance Program (NFIP) Extended: After the House and Senate approved a three-month extension of the National Flood Insurance Program, President Donald Trumped signed it into law on September 8 as part of a legislative package releasing more than $15 billion in assistance for storm-ravaged areas in the country. The program was set to expire on Sept. 30, but it will now remain in effect until Dec. 8. The NFIP provides flood insurance to 5 million homeowners nationwide. Lenders require flood insurance to close on mortgage financing if the home is in a flood zone.

NAR is continuing to work with lawmakers on reforms and a long-term extension to make the program better. The association supports the 21st Century Flood Reform Act, H.R. 2874, which passed the House Financial Services Committee a few weeks ago. The bill would reauthorize the program for five years, encourage private insurers to enter the market, cap annual insurance premiums at $10,000, and grandfather existing rates for certain homes that are already covered and in compliance with building standards. It would also make money available for owners to elevate their homes or take other flooding precautions and enable communities to use flood mapping techniques that are more accurate than the government’s.

The bill would make other reforms, including improvements to the processes for owners who file a claim or want to submit an appeal. “With a short extension on their side, leaders in the House and Senate should continue work on the 21st Century Flood Reform Act,” Brown said. “It’s in everyone’s interest to strengthen the NFIP and ensure the long-term certainty that current and future homeowners demand.”