Cortez, county may be headed to court

Relations between Montezuma County and the city of Cortez — which have been strained for years — may be headed for an all-time low.

The city is planning to sue the county over $48,000 city officials believe they are owed; in return, the county has given up for now working to develop a broad intergovernmental agreement with Cortez.

On July 18, a strongly worded letter from Cortez City Attorney Jim Hatter accused the county of acting “in bad faith” concerning the proposed use of road-impact fees the city had paid to the county for improvements at the entrance to Brandon’s Gate subdivision, a development under construction that was annexed into the city but whose main access is via County Road L on the northern border of the city.

The city annexed and approved the development before any agreement on impact fees was reached with the county, which requires such fees from all developers based on a long-standing formula.

An agreement was finally worked out last year after the county put up a barricade blocking the entrance to the divided boulevard leading to the subdivision.

Under that agreement, Hatter said in his letter, the city “contributed $70,000 to the County for improvements to Road L. An additional $35,000 was contributed to the county by the developer,” also to be spent on Road L at Brandon’s Gate. The county says it never received the developer’s money, but Shepherd maintains that money was committed to improving the intersection.

“It was our understanding that the money was to be used for improvements on Road L,” Hatter wrote.

However, one issue has now become just what the definition of “improvements” is.

“This would be blacktopping the road or widening it,” Hatter wrote, “[but] we recently discovered that all the County intends to do is chip and seal the road. We do not consider that an improvement, we consider that maintenance.

“It is the city’s position that the City money should be refunded due to what appears to be the County’s misapplication of the funds,” he wrote. The letter said that chip-seal costs approximately $22,000 per mile and demanded that all but $22,000 of the city’s $70,000 be repaid.

“We feel the County has acted toward the City disingenuously and in bad faith,” Hatter concluded, “and if we have no other recourse, we will resort to litigation.”

However, the county has a very different take. Minutes of the commissioners’ meeting on June 19, 2006, state that the city proposed, and the county voted to accept, “$70,000 for general construction by the County on Road L over to Road 26, plus the City will spend $30,000 for construction of A and D Lanes at the intersection of Road L and Brandon’s Boulevard, and the City to put $70,000 to finish Alamosa Street to Highway 145 by 2008.”

City Manager Hal Shepherd told the Free Press on July 26 that a lawsuit would definitely be filed within a few days in an effort to recover most of the impact fees, and reiterated Hatter’s contention that the county’s plan to chip-seal the road is merely maintenance, not the “improvements” that were promised last summer.

However, Shepherd conceded that the deal worked out between the entities in June 2006 was only an oral agreement and there had been no specific definition of what work the county was supposed to perform.

“Unfortunately, from now on we’ll have to do a written contract with the county because I wouldn’t trust them to agree to what we agreed to at their meeting,” he said, “and their meetings are not recorded, so I’m going to have a hard time proving it if they all lie.”

The city was led to believe the halfmile stretch would be completely reconstructed with blacktop, Shepherd said, but then city officials learned that only one layer, or “lift,” of chip-seal costing about $12,000 would be done this summer.

The city’s July 18 letter also implies that the county took the $70,000 and put it into the general road fund.

In a July 23 letter to the commissioners’ attorney, Bob Slough, County Administrator Ashton Harrison expressed “surprise” about the threat of a lawsuit and the notion that the city would “seek to reopen a matter we thought was resolved by both parties last year.”

Harrison said the funds for Road L are kept separate from the general road fund and would not be used on other roads. The money is to be used to chip-seal Road L west to Mildred Road this summer, he said, and what money is left will be kept to be used later on Road L.

Shepherd, however, insisted the county is not keeping its end of the bargain.

“In the letter . . . [Harrison] said they were going to go ahead and chip-seal it and then use the rest of the money at a later date, which is different from what he wrote me a month ago — that it was all going to be done this summer,” he said. “Well, you can’t spend $70,000 on chip-seal for a half-mile, so we want a refund since they’re not going to do what they said they were going to do.”

Shepherd also maintained that the A and D lanes that the city agreed to build couldn’t be completed because the county would have to acquire rights-of-way from adjacent property owners, and this hadn’t been done. To this point only small areas of new asphalt have been added near the entrance.

Efforts short of litigation have proven fruitless, Shepherd said, since in an exchange of e-mails the “answer was basically, ‘Stick it.’

“There wasn’t much sense in meeting with Ashton since he told us he wasn’t going to do what we asked,” Shepherd said.

But none of this sound and fury is changing the minds of the county commissioners, who remain steadfast in their position that the impact funds are being properly used by the county road department and there is no reason to return any money to the city.

The commissioners say the matter shouldn’t even be under dispute.

“This is a one-sided conflict,” said Commissioner Steve Chappell. “The [county’s] zoning law is cut-and-dried; we charge impact fees on new development for the improvement and maintenance of the roads impacted.

“It’s illegal to use that money on any other roads, so there is no conflict,” he added. “Hal Shepherd has misled the city council and that’s just the bare facts.”

Chappell said the county’s chip-seal process has proven more durable and cost-effective than traditional asphalt paving, which the county hasn’t used for decades at any rate.

“We’re having better luck with chip-and- seal as far as holding up, so to say it isn’t as good a road as asphalt is a mistake on Hal’s part, because he doesn’t know, and the county has a history of how the roads hold up.

“I just don’t see a reason to make an issue out of it,” Chappell said. “It’s just such a phony issue — the money’s there, there’s no misuse of it, and the county’s intentions and purpose for the use of that money are pure.

“I honestly can’t see where Hal’s coming from, other than he just wants to be involved in [the money’s] determination and use, but all he has to do is go to the law and it’s there, so he doesn’t need to go to court to find that out.”

Chappell predicted that if the issue did wind up in court, the judge would decide in favor of the county because “that’s the law.”

And Commissioner Larrie Rule, who made the motion that supposedly sealed the impact-fee deal last year, said there had never been a commitment made by the county to repave the road with asphalt.

“We’ve lived up to our agreement because that’s what we told them to begin with — that we’d resurface that road,” Rule said. “We didn’t say nothing about blacktopping it because the county does not blacktop roads — blacktop is way more expensive than what chip-and-seal is, and that’s why the county uses it.

“An ‘improvement’ wouldn’t be actually rebuilding the whole road,” he added. “Any time you do anything to it, it’s an improvement, and that’s what we were talking about. Now if we did blacktop roads, I could see there might be an argument, but we don’t.

“We’re not doing anything different than we’ve done for any other developer in the county,” Rule said. “We can’t treat the city any different than we do anybody else.”

Rule also pointed out that the city hasn’t fulfilled its commitment to build the A and D lanes at the subdivision entrance.

“They went out there and just put on little bitty 2- or 3-foot shoulders, so they’re not doing what they said they were going to do. There’s sort of a turning lane and that’s all that it amounts to.”

Rule said Shepherd’s view on the necessity of acquiring additional rightsof- way for that part of the road is incorrect as well, since the present right-of-way would be sufficient for widening it.

“They would have had room to do that,” Rule said, “but [the city] never talked to anybody about it. That was one of the problems with the whole thing — they never talked to nobody to begin with, they just went and done it.” The county also says the city has so far failed to improve Alamosa Street east to Highway 145 as it promised.

At a recent commission meeting, the commissioners and Harrison said they will now have to hold off on entering into any new agreements with the city, such as a long-sought intergovernmental agreement. Harrison said the county will continue to honor its agreements to provide financial support to some city-run projects that benefit both entities’ residents, such as the library, the animal shelter and the tourism office.

Shepherd likewise said the city would continue to provide the bulk of support for those operations regardless of the outcome of the current fight over CR L.

However, both Rule and Chappell pointed out that the city benefits from a 4.05 percent sales tax paid by all county residents and tourists who shop and stay in Cortez, while the county has far less discretionary money available, with most of its revenues committed to programs over which the county has little control, such as social services.

Even the half-cent sales tax the county collects is by law dedicated exclusively toward paying off the bonds for the jail.

The commissioners also pointed out that the city is the main tax beneficiary of all the events held at the county fairgrounds, such as the Ag Expo and rodeos, because most out-of-town participants patronize the restaurants and motels in Cortez, yet the county pays for the fairground’s upkeep and improvements.

Regarding the strained relationship between the two largest local governments, Shepherd said, “It’s an attitudinal situation that doesn’t seem to get any better — maybe the new city manager will have more success than I’ve had.”

Shepherd is retiring in September after 10 years of wrestling with growth and revenue issues in the rapidly developing area.

Rule said the legal scrapping “doesn’t do anyone any good no matter who wins. The more hard feelings you create, then it’s just that much harder to get back out of it.

“I was hoping [the threat of a lawsuit] wouldn’t go anywhere, that they’d back off, but I felt from what [the city] said the other day they wouldn’t, so we’re sort of getting prepared for it — we got our minutes and we know what they said, and that’s what you go by.

“If they got anything different than that, then let’s see it.”

From -August 2007.