2020 sda virtual workshop › sda › web › board... · 390 union blvd, suite 400, denver, co...

SHAREHOLDERS Paul R. Cockrel James P. Collins Robert G. Cole Timothy J. Flynn Evan D. Ela Linda M. Glesne David A. Greher Kathryn G. Winn Allison C. Ulmer Matthew P. Ruhland

ASSOCIATES Joseph W. Norris Bart W. Miller Ayshan E. Ibrahim

[email protected]

390 Union Blvd, Suite 400, Denver, CO 80228-1556

office 303.986.1551 | toll free 800.354.5941 | fax 303.986.1755 | www.cccfirm.com

2020 SDA Virtual Workshop



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VIDEO 1 PRESENTER: JIM COLLINS

JIM COLLINS ([email protected])

Jim Collins is a Senior Partner with Collins Cockrel & Cole, which serves as General Counsel to over 220 special districts, a number of Municipalities, and Intergovernmental Authorities; and CCC donates hundreds of pro bono hours to SDA every year. Jim holds Juris Doctorate, MBA and Bachelor degrees; and is a co-founder of the Special District Association, where he continues to serve as Executive Vice President. Jim also serves on non-profit Boards; served two terms as Mayor of the City of Littleton; served in a number of municipal positions; and created and operated the first Special District Management and Financial Consulting Firm.

I. BOARD MEMBERSHIP.

A. Qualifications.

1. A person who is a “Registered Voter” of Colorado, and a resident or owner (or spouse). § 1-4-501, C.R.S.; § 1-13.5-301, C.R.S.; § 32-1-103(5), C.R.S.

2. A Trust, Partnership, LLC or Corporation cannot be a registered voter of Colorado & therefore is not qualified to be a Board Member.

B. Taking Office.

1. Oath: Taken within thirty (30) days of the election or appointment; read out loud; right hand raised. § 32-1-901, C.R.S.; Article XII, Sections 8 and 9, Colorado Constitution. Please be sure to use the standardized form of oath required by law beginning in 2018. § 24-12-101, C.R.S. File with the County Clerk before taking office; also must file with DLG and District Court.

2. Bond: ($1,000 for board members/$5,000 for the treasurer); common to obtain and file a single blanket position schedule bond setting forth the required amounts for each of the positions of Director and the amount for the position of Treasurer. Crime coverage is available through SDA Property and Liability Pool. § 32-1-901, C.R.S.



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3. Commencement of Term: At next meeting, but no later than thirty (30) days after election or appointment. § 1-1-202, C.R.S.

C. Vacancies. Reasons for vacancies: failure to meet qualifications, failure to satisfy the oath and bond or insurance requirements; resignation; failure to remain qualified; felony conviction; removal from office or voidance of election by Court; unexcused absences at three consecutive Board meetings followed by a fourth absence; or death. § 32-1-905, C.R.S.

D. Term Limits. Two 4-year terms (or one 4-year and one 3-year term for those elected in 2020 and 2022 election years, see note below), unless voters of District lengthen, shorten, or eliminate term limit. Partial terms don’t count towards term limits (e.g., 2 year-terms; appointments). Article XVIII, Section 11, Colorado Constitution; Attorney General Opinion No. 2000-2 (February 9, 2000).

NOTE: Regular Special District elections will be moving from even-numbered years to odd-numbered years beginning in 2023. Those elected at this May’s and the May 2022 will sit for 3-year terms. The regular elections in 2023 and 2025, will again be for 4-year terms. § 1-1-104, C.R.S.

E. Compensation. Maximum = $100/meeting, up to $2,400/yr.; includes study sessions (essentially for all posted meetings). § 32-1-902, C.R.S. No director can receive compensation as employee of the District. Either an employee or director, but not both. § 32-1-902(3)(b), C.R.S. Reimbursement of costs is not considered compensation.

F. Bylaws, Rules, Regulations and Policies. Make your own laws regarding District operations, rules, policies, and procedures not in conflict with state law. § 32-1-1001, C.R.S. Once made, you must follow these “laws”.

II. CONFLICT OF INTEREST.

A. Fiduciary Obligations.

1. Public Trust: Holding public office is considered a “public trust” by which a fiduciary obligation to the citizens/public arises. § 24-18-103, C.R.S. Local government officials are responsible for acting in good faith and acting in the best



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interests of the public. § 24-18-104, C.R.S., provides rules of conduct for maintaining the fiduciary obligation of public office.

2. Confidentiality: As part of the fiduciary obligation, Board members have a duty to keep confidential information confidential (i.e. discussions held in executive session or communications with the District’s attorney). This protects both the District and the Board.

B. Guide to Conduct/Ethical Principles. § 24-18-105, C.R.S. provides a list of ethical principles (but not necessarily automatic violations of the public trust):

1. Public official should not acquire/hold an interest in any business/undertaking which s/he has reason to believe may be affected by official action taken by the District over which s/he has substantive authority;

2. Public official should not (within 6 months after termination/leaving office) obtain employment where s/he will take advantage of information obtained while in office that is not public;

3. Public official should not perform an official act when s/he has a substantial financial interest in a competing business or undertaking; and

4. Public officials are discouraged from assisting/enabling members of their immediate family in obtaining employment or any economic benefit from a person who s/he is in a position to reward.

In short…you know it when you see it.

C. Conflict/Potential Conflict. Disclosure Required. Per § 24-18-109(3), C.R.S., any board member who has a conflict with any matter proposed or pending before the Board must:

1. Disclose the conflict to the Board and to Secretary of State;

2. Refrain from voting on the matter; and

3. Refrain from attempting to influence others’ vote on the matter.

However, the conflicted board member may vote (without attempting to influence the decisions of others) only if their vote is necessary to obtain a



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quorum or enable the Board to act and if written disclosure of the conflict is made to the Secretary of State and to the Board at least 72 hours prior to the time official action is to be taken.

D. Proscribed Acts Constituting a Conflict of Interest. Described in C.R.S. §§24-18-104, -109, -201, -202, C.R.S. in detail, and generally fit into the following categories:

1. Having a personal financial interest; 2. Accepting gifts of substantial value of substantial economic benefit; 3. Representing an entity before the Board; or 4. Being interested in a contract.

E. Effect of Conflict of Interest. Failing to disclose a conflict of interest is a CRIMINAL offense (class 2 misdemeanor). § 18-8-308, C.R.S. It also could void or invalidate the Board action taken. Disclose even if only a hint of conflict.

III. BOARD MEETINGS.

A. Notice Requirements.

1. Notice must be provided at least 24 hours before all meetings of a quorum of a board at which any public business is discussed.

2. Special districts may now authorize posting the required notice on the district’s website or other official online presence of the local government (including social media). The online posting must be searchable (if possible) and accessible to the public at no cost. § 24-6-402, C.R.S.

B. Special Meetings and Study Sessions. Board may hold special meetings, including study sessions, at which a quorum of the board is present and information is presented to board, but no official action can be taken. Notice requirements apply to special meetings and study sessions. § 32-1-903, C.R.S.



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C. Location of Meetings.

1. Must be in the District, or within boundaries of the County, or within any County so long as the meeting location is not more than 20 miles from the District boundary.

2. The Board may waive the distance requirements if the change of location is on the agenda of a prior regular or special meeting and approved by resolution of the board stating the reason for moving the meeting location, stating the date, time, and place of meeting. § 32-1-903, C.R.S.

D. Open to the Public. Any meeting of quorum (3 or more) at which public business discussed must be open to the public. § 24-6-402, C.R.S. This is one reason to establish subcommittees of only 2 directors.

1. How to handle public comments. Organize meeting to have a public comments agenda item. Public comment must be allowed during any public hearings. Require public to present comments in an orderly way with a set time limit on speakers. Consider adopting a policy regarding public participation in meetings (time limit for public comments, audio/video recording devices, and disruptions to meetings).

2. Rules of Procedures. Can use Robert’s Rules of Order (but not recommended) or a streamlined version of rules of procedure.

E. Voting/Attendance. Motions or Resolutions. Must have a quorum in attendance. § 32-1-103(16), C.R.S.; § 32-1-903, C.R.S.

a. Attendance: Directors of required to attend board meetings, unless excused. Electronic attendance counts as attendance (see Note below). § 24-6-402, C.R.S.; § 24-90-109, C.R.S.; § 24-90-110.7, C.R.S.

Note on Virtual/Electronic Meetings: Due to the limitations put in place regarding the COVID-19 pandemic, meetings may need to be held electronically, either via phone or video conference. While online meetings do present a new set of challenges, all of the rules regarding meetings still apply. The call-in/log-in information must be available to the public if the meeting is open to the public and included in the agenda (or contact information provided to receive the call-in/log-in information). Verify everyone on the call can hear



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properly and handle all technological issues before proceeding with meeting. We highly recommend running a few test meetings to check these issues before the meeting.

F. Minutes. Required for all formal meetings. Not required but permitted for study sessions where no formal action taken. § 32-1-902, C.R.S.; § 24-6-402, C.R.S.

G. Executive Sessions. Should be noted on agenda for all meetings. Minutes must reflect one of permitted topics of discussion. No formal action/votes allowed. Only at regular or special meeting, not study sessions. Requires 2/3 vote to enter executive session. Should be recorded, except for legal advice attested to by attorney. Must retain recording for 90 days, then recommend deleting. § 24-6-402, C.R.S. (Summary sheet is available, just ask us to send it to you.)

H. Resolutions and Motions. Both methods may be used for board action, and are equally valid. Should consider the record you want. Resolutions can be more detailed than motions that are only recorded in the minutes. Resolutions allow an explanation/justification for the rule or regulation, and are given a great deal of preference by the Courts.

IV. PUBLIC RECORDS.

A. Public Right of Access. All “public” records are open to inspection by any person. “Public” records include most documentation (digital or hard copies) maintained by the District and the correspondence of elected officials…including email. The District’s “official custodian” may establish rules regarding inspection procedures. Special rules for records kept digitally; generally, must provide in the same format in which they are kept. § 24-72-201, et seq., C.R.S.

B. Fees.

1. May charge a copy fee up to 25¢ per page unless actual costs exceed that amount. § 24-72-205(5), C.R.S.

2. May charge a research and retrieval fee up to $33.58 per hour (no charge for first hour) only if the District has adopted written policy imposing the fee



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posted on the custodian’s webpage or otherwise published. Can withhold records until payment received. § 24-72-205(6), C.R.S.

Note: The Director of Research of the Legislative Council has the ability to increase the maximum hourly research and retrieval fee every five years, which it did for the first on July 1, 2019 from $30.00 to $33.58. Any updated maximum fee will be posted on the Colorado General Assembly website and your District’s Open Records Policy should be updated before charging the new maximum hourly research and retrieval fee.

C. Transmission of Records. Upon request, the District must transmit the records by mail, delivery service, fax, or email. Cannot charge a fee for email transmission.

D. Response Time. Records must be provided within 3 working days, or the custodian must give written notice (within 3 days) that “extenuating circumstances” exist, which extends the response period by an additional 7 working days. § 24-72-205(3)(b), C.R.S.

E. Denial of Access. Certain records are not “public” and are not subject to disclosure. Examples: personnel files (except for inspection by the party in interest and the employee’s direct supervisor), privileged/confidential information, real estate appraisals, and names and contact information for users of public facilities. Check the Board Member Manual for the complete list of exceptions. If you’re going to deny access, state in writing why and what law you are relying upon. § 24-72-204, C.R.S. We have available a sample Resolution Designating an Official Custodian and Adopting Policy on Open Records Requests.

F. Email Policy. All Districts that have an email communication system must adopt a written policy on monitoring email communications that includes a statement that employee emails may be a public record and subject to public inspection. § 24-72-204.5, C.R.S.

G. Consumer Data Privacy. Recent legislation requires all forms of local and state government in Colorado (as well as all private entities) to take “reasonable” steps to protect personal information (e.g. social security numbers, bank accounts, online accounts and passwords), adopt a written policy for disposal of information when no longer needed, and investigate and/or notify the



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public of any breach. § 6-1-713, C.R.S. There are no monetary penalties for non-compliance by governmental entities, but you should take data security seriously given the prevalence of hacking and other cyber-crimes.



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VIDEO 2 PRESENTER: BOB COLE

BOB COLE ([email protected])

Bob Cole has been working in local government law since 1986 and is a shareholder at Collins Cockrel & Cole. His practice focuses on emergency services, special districts and municipal clients, and has involved water rights, and natural resource issues before local, state and federal agencies, courts, and the Colorado legislature. Before becoming a lawyer, Bob worked for nine years for the United States Forest Service on the Sequoia, Cleveland and Klamath National Forests in California - primarily in fire management and timber management. Bob remains active in a number of forestry and wildfire related organizations, including serving on the Board of Directors of the National Forest Foundation and as Chair of its Grants Committee. This year marks Bob’s 44th year working in the fire service. Bob has been active in numerous community organizations, and is a former Assistant Coach of the Evergreen High School Mountain Bike Team. Bob has a B.S. degree in Forest Management from Oklahoma State University and a J.D. from the University of Colorado. Bob lives in Evergreen, where he and Patty have raised four children and enjoy hiking, backpacking, cycling, fly fishing and hunting.

I. SERVICE PLANS.

A. Conformance/Importance. District must conform, so far as practicable, to the Service Plan. Recommend occasional review, particularly before undertaking a new service or activity.

1. A Service Plan that states certain facilities “will” be built obligate the District to build those facilities, unless no longer “practicable”. Plains Metropolitan District v. Ken-Caryl Ranch Metropolitan District, 250 P.3d 697 (Colo. App. 2010)(cert. denied).

B. Amendment/Material Modification. Amendments & material modification to service plan require BOCC/municipal body approval through substantially same process as original approval; expensive. Boundary changes generally not a material modification. §32-1-207(2), C.R.S. contains list of what constitutes a “material modifications”:

• Any addition to the types of services provided; • Decrease in the level of services;



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• Decrease in the financial ability of the District to discharge indebtedness;

• Decrease in the need for organized service in the area; or • Inclusion of property into a new county or city, if so determined by the

BOCC or municipality’s governing body.

C. 45-Day Notice. 45-day notice option allows publication of proposed activity/service one time in newspaper, filing with District Court and Board of County commissioners or governing body of approving municipality. If in doubt, amend or publish.

II. BOUNDARY ISSUES.

A. Inclusion. Three steps: (1) Petition, (2) Public Hearing, and (3) Election.

B. Exclusion. Only by Petition (limited exception for fire protection districts, see below). Petition can be denied based upon the factors in § 32-1-502(3), C.R.S.

1. Simultaneous inclusion/exclusion by fire protection districts. § 32-1-502(1.5), C.R.S. As long as the including district to provide fire protection service has equal/lesser mill levy to excluding district, no inclusion election is required. § 32-1-502(4)(C)(I), C.R.S.

C. Consolidation. By agreement of consolidating districts & election of voters in both districts. Or, by Inclusion and Dissolution.

D. Intergovernmental Agreements. Can be functional equivalent of consolidation. Examples: creation of an Authority; agreement to hire single entity to manage services of multiple districts; many other variations possible.

E. Service Outside District Boundaries. By contract; can implement special rates but the same standards for noticing and setting rates apply. Consider whether Service Plan authorizes the activity.



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III. PROPERTY ISSUES.

A. Acquisition Issues.

1. Title Insurance – recommended to protect District; review encumbrances.

2. Environmental audits and surveys – recommended.

3. Payoff of taxes – districts are exempt from property taxes. Recommend payoff of all outstanding taxes at closing.

4. Letter to Assessor recommended.

5. Financing options available – lease purchase; revenue bonds.

B. Condemnation/Eminent Domain – Districts have condemnation power unless restricted by service plan. Park & rec districts restricted to property for television relay/translator facilities or access easements to district facilities. Water rights not subject to condemnation. Strict statutory rules and procedures must be followed.

C. Easements, Leases, and Other Property Interests. Easements; prescription/acquiescence. Leases – subject to annual appropriation. Licenses (severe limitations). Life estates.

D. Encroachment onto Public Property - No prescriptive rights against district property.

E. Relationship to County and Municipal Powers.

1. Location & Extent can overrule zoning.

2. District subject to subdivision regulations; but may acquire less than 35 acres without first subdividing, if the local government has the power to exercise eminent domain. §30-28-101(10)(c), C.R.S.

3. District is subject to building codes and permits.



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IV. FINANCIAL MATTERS.

A. Fees, Rates, Tolls, and Charges.

1. The Board has the power to fix fees, rates, tolls, penalties, or charges for services, programs, or facilities provided by the District. § 32-1-1001(1)(j), C.R.S. Must be justified/reasonable (i.e., based on District’s actual costs).

2. Fire protection and emergency services providers shall confer with local governments, owners or developers to determine whether there should be an impact fee to defray the impacts to the fire and emergency services provider. § 32-1-1002(1)(d.5), (e), C.R.S.

3. Water and sanitation districts that provide service directly to residents must consider the fees, rates, etc. at a public meeting held at least 30 days after giving notice to customers. § 32-1-1001(2), C.R.S.

4. Tap fees and other impact fees must be deposited in an interest-bearing account that clearly identifies the category, account, or fund of capital expenditure for which the fee was imposed; spent only on capital improvements; and the accounting must be available for viewing on the District’s website. § 29-1-803, C.R.S.

B. Collection of Delinquencies and Assessment of Penalties.

1. Unpaid fees, rates, rolls, penalties, and charges constitute a perpetual lien against the property served. Takes priority over other encumbrances, except tax liens. May assess penalties or collection fees (be careful – they should be based on your actual costs) and interest up to 1% per month. § 32-1-1001(1)(j), C.R.S., § 32-1-1006(1)(d), C.R.S.

2. May disconnect service after following due process procedures (written notice and hearing). C.R.S., § 32-1-1006(1)(d), C.R.S.

3. For water, sewer, or water and sewer services only, may also certify delinquent accounts to the County Treasurer for collection with taxes. § 32-1-1101(1)(e), C.R.S.

C. Mill Levy/Property Taxes 101. Property tax revenue supports special districts, public schools, county/municipal government. Several components to



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property tax calculation: actual value and assessed value of the property; assessment rate; mill levy (tax rate).

1. County Assessor sets value of all property in the county. Residential property valued using the market approach (comparable sales).

2. Residential Assessment Rate – 7.15% set by legislature for 2019 taxes collected in 2020 (will likely be revisited and subject to change again in 2021); Commercial/Personal Property – 29%. Statewide rate. Will discuss more under Gallagher Amendment.

3. Mill levy is the property tax rate imposed by the District. The Board must calculate and certify the mill levy to the County no later than December 15 of each year. Mill levy increases are limited by TABOR and the statutory annual maximum increase of 5.5% unless the District gets voter approval. § 29-1-301, C.R.S.; § 32-1-1201, C.R.S.; § 39-5-128(1), C.R.S.

4. Calculation of property taxes:

Step 1: Actual Value x Assessment Rate = Assessed Value Step 2: Assessed Value x Mill Levy = Taxes Due

D. Sales Tax.

1. Metro districts with street improvement, safety protection, or transportation powers in their service plans may impose a sales tax for transportation projects or fire service (with voter approval) within the District’s boundaries except areas within a municipality. § 32-1-1106, C.R.S. Certain metro districts, with voter approval, may now impose a sales tax to support fire protection services. § 32-1-1106, C.R.S.

2. Health service districts may impose a sales tax (with voter approval) anywhere in its boundaries, even within a municipality. § 32-1-1003(5), C.R.S.

E. Budgets.

1. Must adopt an annual budget prior to certifying the mill levy no later than December 15 of each year, or December 31 if no mill levy.



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2. Notice and public hearing required when budget is considered for adoption by the Board. Must adopt a resolution adopting the budget and making appropriations for the budget year prior to certifying the mill levy.

3. Appropriations cannot exceed budgeted expenditures. Expenditures beyond the appropriated amount are invalid and void. § 29-1-103, C.R.S.; § 29-1-106, C.R.S.; § 29-1-108, C.R.S.; § 29-1-110, C.R.S. This could cause a contract to be cancelled.

F. Budget Amendments.

1. Resolution amending the budget required when expenditures within a fund (not every line-item) exceed the amount appropriated.

2. Should be adopted before the end of the year. Requires same notice and public hearing requirements as original budget.

G. Donations & Gifts. Prohibited from making donations or grants to private individuals or entities unless the District receives value in return. Marketing and public relations can have value. Be sure to recite the value the District is getting when you make a donation. Article XI, Section 2, Colorado Constitution.

H. Public Funds. Limitation on the investment of public funds (types of investments, rating categories, maturity dates). Public Deposit Protection Act (PDPA) requires that deposits of public funds may only be made in “eligible public depositories” designated by the State. Must inform the depository that District funds are subject to the PDPA; maintain documents necessarily to identify such funds; and apply to the State for an assignment of an account number for all accounts established with an eligible public depository. Criminal misdemeanor to violate the PDPA. § 24-75-601, et seq., C.R.S.; § 11-10.5-111, C.R.S.

V. TABOR AND GALLAGHER.

A. TABOR Amendment. Limits how much revenue a government may receive and keep. Voter approval required for:

1. New tax, tax rate increase, or increase in Residential Assessment Rate (statewide vote);



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2. An increase in property tax or total revenue collected over the previous year’s revenue limitation + inflation and local growth. (De-Brucing available - authorizes retention of revenue in excess of the TABOR limit); or

3. Debt or multiple fiscal year financial obligations (unless adequate cash reserves have been pledged and held to pay the obligation).

Enterprises are exempt from the above requirement. An “enterprise” is a government-owned business that is authorized to issue its own revenue bonds and receives less than 10% of annual revenue in grants from all state and local governments combined.

B. Gallagher Amendment. Divides the state’s total property tax burden between residential and commercial property (45% must come from residential property, and 55% from commercial property).

1. Pre-Gallagher, assessment rate for residential and non-residential property was 30%. Gallagher adopted in 1982 in response to skyrocketing residential property taxes.

2. Gallagher sets the assessment rate for commercial/personal property at 29%. The residential assessment rate (RAR) floats…in theory….(TABOR + Gallagher = Ratchet Down Effect.

3. After Gallagher, RAR dropped to 21%; continued to decrease based on these periodic adjustments. Biennial adjustments to RAR used to determine Assessed Value. (Actual Value x Assessment Rate = Assessed Value). Revisions effective for odd year property tax years (collectable the following even and odd years).

4. The legislature fixed the RAR at 7.15% in 2019. Will likely be subject to change again in 2021.

5. When residential values go up, Gallagher requires an automatic reduction in the RAR to maintain the 45/55 split. Can significantly reduce property tax revenues depending on residential property values.

6. District can “de-Gallagherize” its mill levy (meaning the voters authorize the District Board to vary the mill levy rate any time there is a change in the method of determining the District’s assessed valuation).



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7. “De-Gallagherizing” election – fairly straightforward if the District is asking for another tax increase at the same time. Significant questions on how to phrase ballot question if the District wants the current property tax revenue to stay flat but fluctuate the mill levy in the future, if needed.

VI. PUBLIC FINANCING.

1. Special districts may borrow money and incur debt, but TABOR imposes obligations prior to incurring most kinds of debt.

2. General obligation debt and revenue bonds – TABOR election required.

3. Refunding bonds, tax or bond anticipation notes – usually no TABOR election is required.

4. TABOR enterprise debt – no election requirements.

5. Special 72-hour notice must be posted when issuing or refunding general obligation debt.

6. Filings required with Colorado Securities Commission for certain types of financings.

7. Audit must include the amount of authorized but unissued general obligation debt as well as current or anticipated plans to issue debt.

8. Multiple fiscal year financial obligations and lease/purchase agreements – no election required but must be subject to annual appropriation by the Board.

VII. AUDITS.

1. Annual audit required unless revenue or expenditures are less than $750,000. § 29-1-604(2)(b), C.R.S. If neither the revenues or expenditures exceed $750,000 for the fiscal year, the District may request an audit exemption by filing an application with the State Auditor by March 31. § 29-1-604(3), C.R.S.



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2. Audit must be submitted to the Board by the auditor by June 30 and filed within 30 days after receipt by the District. May request a 60-day extension. § 29-1-606, C.R.S.



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VIDEO 3 PRESENTER: ALLISON ULMER

ALLISON ULMER ([email protected])

Allison Ulmer, a partner at Collins Cockrel & Cole, has a broad background in local government law with particular experience in real estate, contracts, employment and construction law. Allison has provided general counsel representation for special districts, municipalities, and local government authorities since 2009. Prior to joining CCC, Allison represented developers, individuals, and land trusts on matters of real estate, land use, public finance and conservation law at Isaacson Rosenbaum in Denver, and she was also in-house counsel for a nonprofit organization in Washington, D.C., where she managed the leasing of field offices nationwide. Allison received a B.A. with honors in Government from Smith College in Massachusetts in 2001 and a J.D. from the University of Denver Sturm College of Law in 2006.

I. CONTRACTING.

A. Construction Contracts.

1. All construction contracts over $60,000 must be published & bid. § 32-1-1001(1)(d)(I), C.R.S.

2. All construction contracts must state that the money appropriated for the project is equal to or in excess of the contract amount. § 24-91-103.6, C.R.S.

3. Changes to the contract price, or contract time for performance must be made by Change Order and contract must include specific statutory language. Failure to comply waives the District’s right to claim non-appropriation as a defense. § 24-91-103.6, C.R.S.

4. Contracts over $50,000 require payment & performance bonds. § 38-26-105 & 106, C.R.S. Recent legislation clarifies that projects financed with private monies and constructed on government-owned land are subject to these requirements. § 38-26-106, C.R.S.

5. Contracts over $150,000:

a. Maximum retainage is 5%. § 24-91-103, C.R.S.



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b. Publish notice of final payment at least 2 times and 10 days prior to making final payment. § 38-26-107(1), C.R.S.

6. Be sure to include the “illegal aliens” provision (§ 8-17.5-102, C.R.S.) and Colorado labor preference on projects over $500,000 (§ 8-17-101, C.R.S.).

7. Consider Integrated Project Delivery (IPD) process (§ 32-1-1801, et seq., C.R.S.) as alternative to select contractor on the basis of “best value” (not just for design-build contracts!). Still requires published bidding, but also allows for pre-qualification of bidders.

B. Other Contracts.

1. Purchase of vehicles, equipment, non-construction materials, real and personal property, leases, professional services not subject to bidding – although some comparative review or requesting multiple bids is advisable.

2. All service contracts must include certifications regarding illegal aliens. § 8-17.5-102, C.R.S.

C. Appropriations Clause. Multiple-fiscal year contracts must be subject to annual appropriations. Even copier leases!

D. Intergovernmental Agreements.

1. Can cover almost any lawful purpose. Subject to different contracting rules than contracts with private entities. § 29-1-201, et seq., C.R.S.

2. If requested by the DLG in writing, required to report to the DLG, within 30 days of request, a list of IGAs entered into by your district. § 29-1-205(1), C.R.S. All IGAs establishing a separate governmental entity should be filed with the DLG within 10 days of contract execution. § 29-1-205(2), C.R.S.

II. LIABILITY ISSUES.

A. Potential Sources of Liability.

1. Damage to persons or property = usually State Torts.



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2. Violation of Federal Law (e.g., deprivation of constitutional or statutory rights – § 1983 cases; antitrust; securities violations; labor and wage actions; environmental claims).

3. Contract claims.

4. Criminal acts.

B. Colorado Government Immunity Act (CGIA) (§ 24-10-101, et seq., C.R.S.). Provides limited relief to governmental entities for certain types of State “tort” (negligence theory) claims; not Federal (e.g., Section 1983 actions), contract (excluded by § 24-10-105 and 106, C.R.S.), or criminal acts. Can purchase crime coverage to cover certain damages and defense costs resulting from lawsuit for wrongful acts done in official capacity.

Liability Limits: current limits are $387,000 for one person for any injury to one person in any single occurrence, and $1,093,000 for any injury to two or more persons in any single occurrence. The limits are automatically updated according to CPI adjustments in 4-year cycles; next potential increase January 1, 2022.

C. Indemnification Resolution. Duty to indemnify directors, trustees, and employees. § 24-10-110, C.R.S.

D. Releases and Waivers. Most often used with volunteers and participants in events, e.g., in recreation activities, fire and ambulance ride-along programs. Validity requires express, knowledgeable assent to release and waiver.

E. Insurance.

1. Insurance Broker. Need to make sure insurer understands governmental immunity.

2. Self-Insurance. CGIA allows policies of self-insurance if procedural requirements are followed. Compliance mandatory. § 24-10-115, C.R.S.

3. CSDP&L Pool. Cost efficient means of obtaining insurance coverage. Offered through SDA. § 24-10-115.5, C.R.S.



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F. Constitutional Issues. When operating in public realm, sensitivity to constitutional issues is a must. Most common issues are: free speech; religion; assembly; Due Process; and issues involving the “taking” of private property.

III. PERSONNEL MATTERS.

A. Federal & State Employment Laws. Labor, employment, and personnel issues are heavily regulated by state and federal law.

• FLSA • COBRA • OSHA • FMLA • ADA • USERRA • ADEA • Colo. Youth Employment Opportunity

Act • Civil Rights Act • Workers’ Comp. Act • § 1983 Discrimination

Claims • Equal Pay Act

B. Personnel Policy Manuals. Personnel policy manuals are critical for uniform treatment of employees and dissemination of comprehensive policies. Personnel policy manuals typically cover working conditions (hours, attendance, safety), compensation and benefits, leave policies, disciplinary procedures, and specific District policies, such as drug testing.

Policy Manuals are typically Board-approved of major policies, but Procedure Manuals can also be developed separately by staff to outline the specific procedures necessary to implement Board-approved Personnel Policies. Whether these documents are together or separate, make sure they are both updated and do not contain inconsistencies.

Follow the procedures in the District’s Personnel Manual, especially when taking disciplinary action, and consult legal counsel…or else!

C. Drug and Alcohol Testing. Important – craft policy carefully. Federal regulations require drug and alcohol testing for employed drivers with CDLs.



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May conduct random drug testing only of employees in safety-sensitive positions. May require drug and alcohol test after an accident involving a safety-sensitive function or if there is a reasonable suspicion of impairment. Will you allow marijuana use? (This is a Board policy decision with some exceptions, e.g. CDL, fire/EMS and healthcare facility permits or licenses).

D. Volunteers. Unique considerations regarding compensation, insurance, personnel policies, liability, releases, and indemnification.

E. Collective Bargaining for Firefighters. Paid firefighters who work for a District or Authority with two or more paid firefighters have certain collective bargaining rights. Can request a “meet and confer” with the District/Authority to discuss safety and working conditions, but no compensation. Can initiate collective bargaining process. Cannot strike. § 29-5-201, et seq., C.R.S.

F. Hiring Practices.

1. Hiring a CEO-Level Employee – special procedures required under Open Meetings Law and Public Records Act for CEO-level position (District Manager, Fire Chief). Search committee may be established; list of finalists must be made public; Board must select top candidate and make offer in public meeting (not executive session). Contract negotiations regarding pay, benefits, etc. may occur in executive session, but Board must approve contract in public meeting.

2. Cannot use or request credit information in employee hiring, evaluation, or discipline, unless it’s related to the job (i.e., the employee handles District funds). § 8-2-126, C.R.S.

3. Limited use of criminal history information in hiring, and cannot request release of criminal history information in job application.

4. Cannot require applicants to disclose social media passwords or access to their social media accounts.

5. Interview Questions – dos and don’ts.

G. Colorado Equal Pay for Equal Work Act.

1. The Colorado Equal Pay for Equal Work Act, C.R.S. §§ 8-5-101 et seq. goes into effect January 1, 2021. It replaces Colorado’s prior equal pay statute



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(the “Wage Equality Regardless of Sex Act”) and significantly expands the definition of wage discrimination while altering many of the procedures for handling wage discrimination claims.

2. Applies to all employers in Colorado. The main provisions of the Act include the following:

a. Prohibit pay discrimination on the basis of sex or sex plus another protected status; b. Ban employers from requesting pay history from prospective employees; c. Ban employers from relying on pay history of prospective employees; d. Require employers to internally post job opportunities, including promotional opportunities; e. Require employers to post salary ranges in job listings; f. Protect from retaliation anyone discussing employee pay; g. Require employer recordkeeping regarding job descriptions and wage rates; h. Prohibit pay discrimination on the basis of sex or sex plus another protected status; i. Ban employers from requesting pay history from prospective employees; j. Ban employers from relying on pay history of prospective employees; k. Require employers to internally post job opportunities, including promotional opportunities; l. Require employers to post salary ranges in job listings; and m. Protect from retaliation anyone discussing employee pay.

3. Regarding pay disparity or discrimination, only legally justifiable reasons for pay disparity are the following:

a. A seniority system; b. A merit system; c. A system that measures earnings by quantity or quality or production; d. The geographic location where the work is performed;



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e. Education, training, or experience to the extent that they are reasonably related to the work in question; or f. Travel, if the travel is regular and necessary condition of the work performed.

4. Enforcement by both a private right of action and an enforcement action by the Colorado Department of Labor and Employment.



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POTENTIALLY USEFUL FORMS AND MEMORANDA

(Related to this Presentation)

1 Board Member Manual from SDA 2 Compliance Calendar (in Board Member Manual) 3 Sample Bylaws 4 Conflict of Interest Memo and Questionnaire [2 documents] 5 Form Board Policies, Procedures and Rules of Conduct Manual 6 Sample Resolution Designated Posting Place 7 Sample Resolution Adopting a Policy Concerning Public Recording,

Public Participation at Meetings, and Public Hearing Rules and Procedures

8 Summary of Colorado Executive Session Laws 9 Sample Resolution Designating Official Custodian and Adopting Policy

on Open Records Requests 10 Sample Resolution Adopting the Records Management Manual 11 Sample Resolution Adopting Email Policy 12 Sample Resolution Adopting Consumer Data Privacy Policy 13 Legal Investments Synopsis: from the Division of Local Government

https://drive.google.com/file/d/16Kak_Hhw3sMsSn89Q9UFo6BmT9AHSqLN/view

14 Subdistrict Organization Procedures List 15 Summary of Inclusion Election Procedures 16 Sample Petition for Inclusion 17 Construction – Design-Bid-Build Checklist & Integrated Project

Delivery Checklist 18 Sample Service Contract Addendum 19 Summary Sheet for Fair Campaign Practices Act Issues

For copies of any forms or other questions, please contact Jim Collins ([email protected]), Bob Cole ([email protected]), or Allison Ulmer ([email protected]).



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SPECIAL DISTRICT ASSOCIATION OF COLORADO Created in 1975 to serve the interests of the special district form of local government in Colorado,

and to provide better communication, research, legislative input, administrative support, and educational opportunities for member districts. The SDA currently has over 2,000 special district

members and over 300 associate members.

ANN TERRY MICHAEL VALDEZ EXECUTIVE DIRECTOR DIRECTOR OF POLICY

[email protected] [email protected] 303-863-1733 303-863-1733

COLLINS COCKREL & COLE, P.C. Colorado’s local government and special district lawyers since 1978.

1-800-354-5941 303-986-1551

JIM COLLINS [email protected]

ALLISON ULMER [email protected]

BOB COLE [email protected]

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