CB council approves IGA for Whetstone utility extension

Council assured town is protected with the IGA

By Mark Reaman 

While some on the Crested Butte town council voiced that the language could have been a little tighter with the proposed Intergovernmental Agreement (IGA) between the town and Gunnison County concerning a potential utility extension agreement to the Whetstone affordable housing project, there was enough of a comfort level based on staff, legal and county assurances that the IGA was approved unanimously in a 5-0 vote on Monday.

The IGA stemmed from a road bump in the process to consider a utility extension of water and sewer from Crested Butte to the housing project near Brush Creek Road. The town had asked for a detailed engineering feasibility study from the county that owns the land and is developing the workforce housing project. The county came back with an incomplete analysis. County representatives said it would cost millions of dollars to obtain the information being sought by the town. In order to spend that money, the county wanted assurances that if the capacity and financial analysis came in favorably, the town would continue with the utility extension process. The council had given a “conditional approval” to the utility extension based on those criteria. 

The IGA basically laid out nine provisions to that effect, including that the extension project would be “cost neutral” to the town and also demonstrate beneficial impacts to the long-term operation of the town’s water and wastewater system infrastructure, enterprise fund and the utility rate structure of the utility customers of Crested Butte.

The county and town both acknowledged that there was risk to both entities with the utility extension and project, but both want to see a major workforce housing project completed in the North Valley and Whetstone is located two-and-a-half miles south of the town.

Assistant Gunnison County manager for community and economic development Cathie Pagano told the council at the September 18 meeting that the county manager had signed the proposed IGA sent to the county by the town “so we are happy with it.”

David Leinsdorf, an attorney and former county commissioner, had sent the council some suggested wording additions for the IGA and councilmember Beth Goldstone indicated she was comfortable with the suggestions.

When asked for his legal opinion by mayor Ian Billick, town attorney Richard Peterson-Cremer said that since the IGA was already signed, he didn’t see any significant impact from the suggested changes. He recommended the council keep the original document that was signed by the county.

Leinsdorf suggested the IGA be clearer that the town must have the capacity to service Whetstone and all existing town property (including future development) inside CB before proceeding. His language wanted to also make clear that the town could determine if there was a negative financial impact as a result of the extension. “Shea Earley (CB public works director) warned the council almost exactly a year ago about looming potential infrastructure issues with the public works of town,” Leinsdorf said. “The town should be the entity to decide if there is a negative financial impact and the town should review the technical and financial feasibility as well.”

Leinsdorf suggested a change of the word “shall” to “may” in the document when it came to a future potential annexation discussion.

Citizen Karl Zachar asked when the town staff and council would present the needed code change to accommodate such a utility extension since it is currently only allowed through annexation. Staff indicated there was no hurry and the process would not take long or slow down the project.

“The other thing is that as a finance guy I am sensitive to the costs,” Zachar said. “The information from last week that the Paradise Park project was 62% over initial budget was embarrassing and a red flag. I don’t want the engineering study to come in and the town not understand the actual costs. The financial analysis of potential annexation benefits to Crested Butte that was also presented (by the firm TischlerBise) was a joke. It was as if the consultant decided out of thin air that people in Whetstone would spend 66% of their sales taxes in Crested Butte. That won’t happen. The cost perspective is worrying.”

“David (Leinsdorf) brings up a few good points,” said councilmember Jason MacMillan. 

Peterson-Cremer said that under current statutes and previous agreements, the town was protected. 

Assistant Gunnison County manager for sustainability and operations John Cattles agreed. “This IGA is built on previous agreements and studies that are already incorporated into our partnership. It is redundant but can be put in.”

“Neither party can force discussion toward annexation. There is no obligation to annex,” said town manager Dara MacDonald.

“I don’t think the wording changes from what we’re doing but it makes sense,” said Goldstone. “We are taking public comment into consideration even though it is already signed by the county.”

“Is there a cost to asking the county for these changes,” Billick asked MacDonald.

“They aren’t material changes,” she said.

“The changes aren’t huge but we took the draft and thought it was fair, so the county signed it,” said Cattles. “The worry is that if it comes back, our attorney will also want to start making more changes.”

“If the changes aren’t material and other agreements already in place require us to do these things, we would prefer to move forward,” added Pagano.

“In some ways there is comfort in having that language more explicit,” said councilmember Gabi Prochaska.

“In good faith, I am happy to agree to it as written,” said MacMillan. “At the end of the day we want to move things along. The county has been a good partner.”

Billick asked Peterson-Cremer how important the IGA was in context to other agreements. Peterson-Cremer said it was an agreement outlining how to move forward and not an ironclad contract. “It is more like an MOU (Memorandum of Understanding),” he explained.

“So, this involves a lot of trust to not put each other in a box,” said Billick.

“Correct,” said Peterson-Cremer.

Billick asked Cattles and Pagano if that is how they understood the situation and Cattles agreed that the town had the discretion under the IGA to walk away from the utility extension if the town decides it doesn’t work financially. He referred council to the fourth IGA provision that the county would agree to fund any differential impact between the increased cost and a cost-neutral position for the extension.

The council voted 5-0 to approve the IGA. Councilmember Mallika Magner and Anna Fenerty were not at the meeting.