1. A Case Study In Protecting Colorado Enterprises’ Authority In Setting Fees
Milan E. Timm Revocable Living Trust v. Fort Collins-Loveland Water District and South Fort Collins Sanitation District
Intros, Brenden too
Format: alternate leads, interaction/questions as we go
My background, General Manager, Two Districts, Newness to job. Part of my job is wastewater. Treated by Wastewater Operators.
Who in audience? Attorneys? Engineers? Boardmembers?
Presenters: Chris Matkins, FCLWD and SFCSD
Bob Cole, Collins Cockrel & Cole
J. Andrew Nathan, Nathan Dumm & Mayer PC

2. Overview Pre-Litigation Litigation Post-Litigation
Fee Setting Generally
FCLWD’s and SFCSD’s History
Interactions with Plaintiff Developer
Litigation
Filing of Complaint, Discovery, and Mediation
Trial
The Role of Experts
Post-Litigation
Problems and Difficulties
The Role of Districts in Litigation
Parting Thoughts and Q&A
Much at stake: threatened ability to charge based on classes. If lost, custom fees.
stress/time/effort to win the case
Former Manager (35 years), Current Manager, Engineer (38 Years), Controller (13 years)
Went to everything and essentially knew everything
Districts, size, history, location, number of taps, history of high growth, investment to stay ahead of that growth.
Leadership of the board and former manager: fees collected were adequate, water collected was sufficient, both Districts in excellent condition

3. Pre-litigation
Before the lawyers get involved

4. Fee Setting Generally Fees vs. Exactions Fees Exactions TABOR
Krupp v. Breckenridge Sanitation District, 19 P.3d 687 (Colo. 2001)
Koontz v. St. Johns River Water Management District, 133 S.Ct (2013)
Fees
Legislatively enacted
Rationally related to a specific government service
Exactions
Specific, discretionary, adjudicative determination
Nolan/Dollan
TABOR
Water Activity Enterprises Exemption
General Enterprises Exemption
Bob Leads

5. FCLWD’s and SFCSD’s History
Water and Sanitary Sewer Service
PIFs
Buy-in Method
Impact Fee
Raw Water Costs
Multi-Family Factor
PIF
Fee Studies and Fee Changes
Studies by Integrated Utilities Group in 2000 and 2001
MF Factor Reduction in 2015
Wastewater never stops. Interesting, complex. Harnessing biology. It's a lot like the library system. You take a book, you use it for a while, you bring it back in the same condition. This is expensive, difficult, investments last decades. We can’t afford to screw it up. Operators do this.
PIFS: a way for Growth to pay it’s way
Adjusted down for MF (Water)
Not Adjusted down for MF (Sewer)
Impact fee: 1997 for 110% of Master Plan. redo-ing infrastructure due to density exceeding master plans (here). Sewer Pipe : farm vs. roadway.
Raw Water Costs: use more, pay more. (BIGGEST COST)
Had fee studies performed in 2006 for both utilities, Boards adopted fees less than were recommended

6. Interactions with Plaintiff Developer
M. Timm Development, Inc.
History of developing and constructing apartment complexes in California, Nebraska, and Colorado
Project
10.5 acre-lot in Fort Collins
Approved construction of 146-unit multi-family dwelling
Plaintiff’s Experts
Dudek – Interior Consumption Analysis of other projects
Larry Owen – Served as M. Timm’s Representative to District
Dispute
Challenged the Multi-Family Factor (.185 vs. .4)
Prior to Mtimm: Water fees for MF = 0.6 vs. 1.0 for SFR. Sewer Board: none
Late 2014 conversations focused on Water Cost, economizing taps. Developer presented water use data from other projects in other locations.
Early 2015 – MTIMM requested a reduction from 0.6 to District Engineer Recommended reduction from 0.6 to 0.4. on water rights.
By June District received letter threatening litigation
Early 2016: Several attempts to mediate failed
Developer’s data/safety factors vs. Districts
Staying power: businesses can walk away from problems. We must always be viable.
Mediation highlighted this: 5 year warranties vs. 100 drought designs

7. litigation
Negotiations, discovery, and trial

8. Complaint, Discovery, and Mediation
TABOR Violation
Per Se Taking (Monetary Exaction)
Regulatory Taking (Penn Central)
Discovery
Written discovery regarding Plaintiff’s finances
Led to dismissal of Regulatory Taking claim
Depositions
No expert depositions
Mediation
Joint study
Binding on one party, binding on all parties
Ultimately unsuccessful

9. Trial Judge vs. Jury Preparation Litigation TABOR
Exactions and Takings
Preparation
Witnesses
Experts
Court
Litigation
The problem of math
Helping a Judge understand complicated information and issues

10. Result Judgment in Favor of Districts on All Claims
Order of All Costs and Fees for Districts for the amount of $124,141.30
No appeal by Plaintiff

11. The Role of Experts Plaintiff’s Expert – Larry Owen
Lack of Experience in Water and Sanitation Systems
On Plaintiff’s Payroll
Pre-litigation demands and changing analysis
FCLWD and SFCSD Experts
District Employees
Terry Farrill
Mike DiTullio
Chris Matkins
Outside Experts
Jason Mumm
Rick Giardina
150 Years Experience vs. 15 Years Experience

12. Post-litigation
Lessons learned

13. Problems and Difficulties
TABOR and Enterprises
Court ruled the Districts were subject to TABOR, but that the fees did not violate TABOR
Does not follow statutory law
Ruling not appealable as Districts were prevailing party
Frequency of fee adjustments and fee studies
15 or 16 years between fee studies
Factual support for rates
Litigation as a cost-saving maneuver for developers
FCLWD and SFCSD were not the only Districts M. Timm filed suit against
Collaboration between Districts

14. The Role of Districts in Litigation
District Managers and Engineers
Working with Developers before litigation
Use as “unpaid” experts
District Counsel
Advisor and support system
Conduit between litigation counsel and District
The Role of Experts
District Boards
Keeping Boards apprised of the status of litigation
Approval and support from Boards required and encouraged
Litigation counsel’s presentations to Boards
Audience interaction: one glaring omission. any ideas? Pay the Bills! Nice Dinner,
Before handing off the baton, express sincere thanks to both Andy, Brenden, Bob for expertise and efforts
Hire the best attorneys, ensure they are experts in the specific areas of law you are being challenged in. Similar advice for experts.

15. Parting Thoughts and Q&A
Chris Matkins
Bob Cole, Esq.
Andy Nathan, Esq.
Follow Nathan Dumm & Mayer on LinkedIn:
The presenters would like to thank Brenden Desmond who tried the case with Andy Nathan, for putting together this presentation