Draft FAQ

Work in progress. Answers are not yet authoritative

1.     Where does the money go?
a.     Pie chart  showing the percentages can be seen here. Roughly 80% of expenses go directly to providing service and maintance.
b.     Note that the largest expense is the “outflow” payments to the Metropolitan Reclamation District. We cannot reasonably change
      suppliers (the pipes go where they go). And any renegotiation would most likely result in increased costs. 

2.     How does this compare to other districts?
a.     Comparable Pie chart(s) to be determined

3.     Why not merge with a larger district for savings?
a.     Based on the experience of other districts, the likely procedure is dissolving one, and the area becoming part of an existing District.
      This entails considerable administrative costs (exclusive of any infrastructure upgrades the new District requires before joining),
      between Court filings, elections, etc.  costs upwards of $50,000 would be likely. The new District owner could require extensive
     upgrades …it is hard to forecast what those might entail. In any event, the maximum savings per year possible would be about $10K.

4.     Why are our sewage fees taxes?
a.     In order to save residents money, instead of having a separate “user fee” per household paid with after-tax monies, at the inception
      of the CHN development the decision was made to use pre-tax dollars. In addition, using the County property tax system reduces
      the overhead of collecting and distributing funds.

5.     Why do we need to raise taxes?
a.     District expenses were significantly more than revenues in 2007 and 2010.  Annual District expenses have exceeded annual
      revenues in each of 2011 – 2013, and the 2014 budget anticipates that total expenses will again exceed annual revenue.  The
      expenses in 2007 and 2010 combined with the trend evident during 2011 – 2014 has resulted in a decrease in the District’s cash
      reserves, and increases the likelihood that the District will not be able to respond appropriately to an emergency repair situation.

     The District needs to raise taxes in order: (1) to ensure that annual revenue is enough to cover annual expenses; and (2) to
     ensure that the District is able to maintain an adequate reserve account.

     If voters approve a variable mill levy (allowing the District to increase and decrease the mill levy on an annual basis based on
     projected annual expenses), the Board will best be able to take care of the sewer system and protect the neighborhood from any
     emergency expenditures.

6.     What happens if the District runs short of funds?
a.     Failure to meet our financial obligations under the “Intergovernmental Agreement”  (viz. paying for waste water processing)
      would result in each and every resident being billed directly (with pre-tax funds) by the Metropolitan Reclamation District.
      They would include any overhead and penalties.
b.     Failure to do necessary preventative maintenance or catastrophic maintenance could result in huge bills for residents nearest any
      damaged pipes.

7.     Other than raising taxes, what can be done to close the gap?
a.     We could transition to a “user fee” levy. This would not require approval of the voters, and would not involve elections to make
      adjustments (up or downwards) to the fee. However, the administrative costs would go up, as residents our effective cost basis
      would go up even higher (post-tax vs pre-tax dollars). 

8.   Where can I find the District’s Service Plan

a.   Despite many efforts to find the original document, it appears to have been lost. To clarify precisely what the District’s scope is, an Intergovernmental Agreement has been drafted and we expect to have it ratified by the Cherry Hills Village City Council in the next few months. Current Draft

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