The Boxelder Basin Regional Stormwater Authority is seeking permission to make interest-only payments in 2017 on three loans it has from the Colorado Water Conservation Board, or CWCB.
The authority, which is made up of the city of Fort Collins, the town of Wellington and Larimer County, has a cash-flow problem.
It owes $588,728 by the end of the year to the John W. Day Family Partnership as the final payment on a $1.67 million settlement finalized in April that ended legal wrangling over a flood-control project the authority built east of Interstate 25 and south of County Road 52.
The authority doesn’t have the resources to pay the settlement and the principal on its CWCB loans this year, said Gerry Horak, president of the authority board and member of the Fort Collins City Council.
It will be able to make interest and principal payments in the years to come based on revenue projections, he said.
Putting to rest the dispute with the Day Family Partnership was critical for the authority, Horak said. The court fight could have gone on for years with no guarantee the authority would prevail.
“This was all about cost avoidance,” he said. “To not settle would have been insane.”
The authority wound up owning the 62-acre site that makes up its East Side Detention Facility, or ESDF. The project is designed to dramatically restrict flows on Boxelder Creek during a 100-year flood event, which is defined as having a 1 percent chance of occurring.
Changing the flows would remove numerous downstream properties from the creek’s 100-year floodplain and potentially open them up to development. Roads, bridges and other infrastructure also would be protected from damaging floods.
Sites downstream include the areas around the interchanges of I-25 with Mulberry Street and Prospect Road. The reduced floodplain also would benefit the town of Timnath and its plans for development, said Stan Myers, district manager of the stormwater authority.
The Federal Emergency Management Agency is reviewing the modeled impact of the authority’s projects on flood flows and is expected to revise its map of the floodplain in 2018.
The balance on the CWCB loans, which helped fund construction of three authority projects, is $8.8 million. The authority has proposed paying $240,620 in interest and deferring $484,030 owed in principal.
The restructured loans would be paid off in 14 years as originally planned. With stormwater fees coming from new developments in the authority’s service area, the loans might be paid off earlier than scheduled, Myers said.
When the loans are paid, the authority will be dissolved. Boxelder members are negotiating how facilities built by the authority will be operated and maintained after it ends…
In addition to the ESDF, the authority made $5 million in improvements to and around Clark Reservoir north of Wellington. The project took hundreds of homes and dozens of businesses in Wellington out of the Coal Creek floodplain.
The authority also built a crossing structure of the Larimer-Weld Canal for Boxelder Creek that will be maintained by the ditch company.
The county is open to taking responsibility for Clark Reservoir and the ESDF, Blomstrom said. But details, such as setting up funds to cover ongoing maintenance costs, have yet to be negotiated among the authority’s members…
Properties in unincorporated Larimer County in the authority’s service area are charged annual stormwater fees based the type of property and the amount of impervious surface, such as parking lots and rooftops, it has.
In 2017, the fee on a residential property is $66, up from the $60 that was charged since the district began.
The authority has been controversial from its inception, with many residents saying it was not needed. But officials said with the history of flooding within the Boxelder Creek Basin, which stretches from southern Wyoming to the Poudre River, flood-control was needed to protect people and property.
Horak said the CWCB is willing to restructure its loans to Boxelder on the condition it receives legal assurance the governing board has the authority to change conditions of the loan.
Wellington officials aren’t sure about that, according to a letter sent to the CWCB by a Longmont law firm representing the town. The letter states modifying the loan agreement would result in $104,734 in additional interest.
The authority’s members – not its board – would have to approve the restructuring the loan, according to the letter from attorney Jeffrey Kahn.
Wellington officials did not immediately respond to calls for comment.
Myers said Wellington officials have expressed several concerns regarding what they see as escalating costs for the Boxelder authority and have sought a cap on how much the town would contribute.
With its spike in residential development, Wellington contributes about 40 percent of the authority’s annual $1 million budget.
The town has withheld its allotment for 2017 until its issues can be addressed, Horak said.