County, Timnath resolve lawsuit

By Dan MacArthur
Fossil Creek Current

Timnath and Larimer County each gave ground to settle the county's lawsuit challenging the town's creation of an urban renewal authority.

The town agreed to return to the county a progressively greater share of tax-increment revenues generated by the increasing value of properties within the authority boundaries. It also agreed to limit the size of the authority territory to boundaries at the time it was established, with one exception.

In exchange, the county agreed to drop its lawsuit challenging creation of the authority. The county also pledged not to contest the inclusion of the new Wal-Mart Supercenter site on the northeast corner of Harmony Road and Interstate 25 into the authority boundaries.

Timnath's rebates to the county will start at 15 percent beginning the sixth year after the authority's creation. They will increase in 15 percent increments every five years until totaling 60 percent in the last five years of the authority's 25-year life.

It is not possible to predict how much money would be returned to the county. Earlier, officials estimated the county would be deprived of at least $25 million in taxes had Timnath retained all the additional tax revenues generated by new businesses within the authority boundaries.

"It's the right thing to do," Timnath Mayor Donna Benson said of the settlement. "We were willing to (share revenues) from day one." She said the town now is working on a similar revenue-sharing agreement with Poudre Fire Protection District.

Benson said the settlement is well structured so the town has early access to the full tax increment revenues when it most needs them. They will be used to make the infrastructure improvements necessary to accommodate the expected growth from a town of some 230 residents to one of as many as 12,000. At the same time, she said, a greater share is gradually returned to the county to finance its correspondingly increased demand for services.

"So I think it was a win-win," said Benson.

"I think it's a good compromise," agreed Larimer County Manager Frank Lancaster. "We don't want taxpayer money used by both sides to fight each other."

Lancaster said the county most importantly persevered in assuring the size of the authority would not increase with future annexations. While the county still objects to allowing undeveloped "green fields" to be designated as blighted, he said, that imprecise definition and other issues must instead be dealt with by the state legislature.

Additionally, the agreement commits the county and Timnath to work in good faith toward adopting an intergovernmental agreement by the end of this year. Such an IGA would address issues surrounding growth management, community separators, land use and relationships with surrounding communities.

The settlement has been imminent for months, according to both parties, delayed only by further tweaking by respective attorneys.

The lawsuit arose from Timnath's December 2004 creation of an urban renewal authority encompassing the entire town boundaries (about three square miles). The designation followed a study determining the whole area was qualified for inclusion as a blighted area. Creation of the urban renewal authority enables governments to retain increased tax revenues resulting from development or redevelopment of property. Revenues realized through that tax-increment financing then could be pledged toward retiring bonds issued to pay for public improvements on the property.

The Larimer County District Court dismissed the county's legal challenge a year ago, prompting the county to appeal to the Colorado Court of Appeals.