Attorneys for La Plata County and the Tamarron Metropolitan District have reached an agreement to limit the district’s ability to issue future debt.
Tamarron, which serves the Glacier Club development north of Durango, first came under scrutiny earlier this year after the Colorado Department of Local Affairs sent a letter to the county. DOLA raised concerns that the district’s financial reports showed it was continually unable to pay its debt obligations.
The district has missed $14 million in debt payments and projections show it will likely never be able to pay off the $23,127,000 in bonds issued in 2006. The bonds were issued to build the development’s public infrastructure.
After receiving the notice from DOLA, the Board of County Commissioners requested an application for quinquennial findings of reasonable diligence, exercising its right to conduct an oversight review of the district’s service plan every five years. In June, the board voted not to accept the application, and opted to hold a public hearing instead.
Two issues of concern arose for commissioners, both of which, Tamarron representatives say, should not be cause for concern.
The first is unissued debt. Given the district’s track record of missing debt payments, the board has voiced concerns about what would happen if the district’s directors issued more debt. The district’s voters, just four people at the time, approved borrowing of up to $150 million in 2003, leaving $127 million in unissued debt after $23 million in bonds was taken out in 2006.
But Jim Goodman, chief operating officer of Glacier Club and chairman of the Tamarron board, has repeatedly said the district has no intention of issuing more debt. And as of the BOCC’s vote Wednesday, that intention is now official; the district may not seek approval to issue more debt without first clearing it with the BOCC.
The other issue is the potential liability of homeowners in the district to pay off the growing debt, which currently sits around $40 million.
However, the district’s directors are not concerned and say that property owners should not be concerned either. Conditions of the bond limit taxpayers’ fiscal liability to no more than 50 mills, and the debt essentially expires on Dec. 2, 2046.
“The safety of taxpayers within the district is not jeopardized by this because of the 50 mill levy cap,” Tamarron attorney Paul Cockrel told the BOCC.
The current bondholder purchased the debt for $7 million and agreed to the mill levy cap because although the revenue will not fully discharge the debt burden, it will generate an estimated $36 million over the next 23 years.
“I think I’m feeling pretty comfortable that with this stipulation, this debt ... is not somehow going to be put on all the lot owners or property owners, present or future,” said Commissioner Marsha Porter-Norton from the dais. “It will be paid off in 2046.”
rschafir@durangoherald.com
