Judge forces county to collect disputed taxes in Prospect

Local taxpayers could be responsible for repayment

Gunnison County and the town of Mt. Crested Butte are hoping to see the proceedings over a disputed court order come to a close this week so they can push the case up to the state court of appeals.

By closing the proceedings, Gunnison District Court Judge Steven Patrick is clearing the way for an appeal of a case that could, if left unchanged, expose county taxpayers to financial liability from the fight between homeowners and the developer in Mt. Crested Butte’s Prospect subdivision.
It was a bittersweet conclusion to a motion filed by the county and the town asking Judge Patrick to reconsider his December ruling forcing the county to levy a 50-mill tax on Prospect homeowners that essentially doubled property tax bills in the subdivision. On March 11, Judge Patrick heard oral arguments from both sides in the case.
In his order denying the motion to reconsider, Judge Patrick explained that the case being considered was a ruling for “mandamus” relief, which is a court order compelling a government official to perform a duty, in this case levy a tax. In the order, he refers to “mandamus relief” as “a drastic act, narrow in scope and within the trial court’s discretion.”
By putting such tight parameters on the conditions for his order for mandamus relief, the judge said the questions being raised couldn’t be answered in such a narrow case.
Late last year, two days before special districts from around the county were required to have certified mill levies on file with the state, the Prospect homeowners asked the commissioners to certify an additional tax levy of 50 mills, or enough to generate almost $439,000 a year, according to the court’s calculations. Most of that money was to be used by the homeowners to cover legal expenses from a dispute with the subdivision’s developer.
Feeling the additional 50 mills would violate the terms of a service agreement between the town of Mt. Crested Butte and the Prospect subdivision, the Gunnison Board of County Commissioners did not certify the mill levy and was sued by the Prospect homeowners.
With hours left in the workday before the state’s deadline, Judge Patrick agreed to hear the homeowners’ case and then handed down the order granting mandamus relief, forcing the county to levy the additional 50 mills.
In his order denying the county’s motion to reconsider his ruling, Judge Patrick said there were “three prongs” to his analysis: whether the county had discretion over its decision to certify the additional 50 mills; whether the homeowners had tried other administrative avenues to raise the tax; and whether the homeowners had the right to ask the county for the additional mills.
With hours left before the state’s mill levy deadline, the judge agreed that there were not any administrative alternatives and he said the county did not have discretion over its decision, saying its role is “ministerial.” He also said the homeowners were entitled to certification of the mill levy.
In response to the judge’s ruling, Gunnison County filed a motion for injunctive relief that asked the court to grant the county permission to stop collecting the disputed tax, knowing that if the tax were ever successfully challenged, any taxes collected would have to be returned to the taxpayers. The judge stopped short of granting the motion for injunctive relief, but consolidated it with the lawsuit that started the legal melee.
According to Gunnison County treasurer Melody Marks, almost $159,000, or 36 percent, of the $439,000 has already been collected, which was better than she expected under the circumstances. “There have been a couple of [property owners] who paid under protest,” Marks said.
All of the collected funds have already been distributed, Marks said, as required by court order.
But while it might sound like a death knell for the county’s case, Art Trezise, deputy county attorney, says the judge’s denial of the motion to reconsider puts a legal punctuation on the case that allows it to go to the next level.
“The sooner the county can get its case in front of the court of appeals and get a favorable ruling, the sooner it can stop collecting the illegal tax,” Trezise said.
Judge Patrick scheduled a briefing for Wednesday, April 9, after which he could certify his decision as final.