Loveland to mull moratoriums on metro districts, oil and gas drilling

LOVELAND – The Loveland City Council on Tuesday will consider motions that would enact a six-month moratorium on creation of residential metropolitan tax districts as well as a temporary moratorium on oil and gas drilling within the city.

Both moves could have impacts on the plans of McWhinney Real Estate Services Inc., developer of the Centerra projects on the city’s eastern edge.

A metro district is a type of special district similar to a school, fire or water district. Developers establish them to finance the infrastructure – such as roads, water and sewers – necessary to support a new subdivision by collecting taxes from property owners to pay for things other local entities don’t.

New council member Laura Light-Kovacs wrote in materials supporting Tuesday’s council meeting that she intends to introduce a motion instructing city staff “to look into making our current laws around metro tax districts more prescriptive. Specifically, I’m looking for greater protections for future residents of metro tax districts.”

She wrote that several other municipalities “still allow metro tax districts in residential areas, but require additional transparency and oversight from the developer and the city to ensure that residents know their future home is in a metro tax district not at closing, but earlier in the process, perhaps when an offer is made.” She said such information could help prospective homeowners know “what that means for their own tax burden, the current amount of debt, projected debt at full buildout, and what the benefits (if any) come from living in the metro tax district.”

In addition, she wrote, “I’d also like staff to explore the possibility of eliminating the metro tax districts in residential areas entirely, including the pros and cons, feasibility etc.”

Mayor Jacki Marsh told BizWest on Monday she would support more transparency in metro districts because “it’s insufficient to tell people, ‘Additional fees may apply.’ That doesn’t let people cost-compare. This way, people can honestly shop.”

McWhinney formed the Centerra Metro District in 2004 to fund public improvements in that project, and the Loveland City Council in June approved three new metro districts for McWhinney’s proposed Centerra South mixed-use development. However, in November, Loveland residents resoundingly approved Ballot Issue 301, which gave the final say on urban-renewal plans that often include metro districts, and the new City Council members responded by voting to rescind approvals of the Centerra South Urban Renewal Plan and the master finance plan and intergovernmental agreement the previous council had worked out with McWhinney last spring.

Meanwhile, Marsh, who spearheaded last week’s drive to rescind the Centerra South agreements, will move Tuesday to impose a temporary moratorium on new oil and gas applications, permitting, facilities or development until the city’s staff can submit proposed updates and revisions to the city’s rules and regulations.

Last June, the previous City Council approved an application by MRG LLC, a McWhinney subsidiary, to drill multiple horizontal wells from a 13-acre pad east of Interstate 25, running them under the highway and into McWhinney’s Centerra development. The company had agreed to abandon a site for oil and gas development in Centerra South.

“Before any further of these gets applied for, I want to put pressure to get this done,” Marsh said. “I imagine it would be a short moratorium. We’d just like to take all the work Larimer County did, start there and then tweak that. We don’t need to reinvent the wheel.”

Curbs on hydraulic fracturing had been passed by Colorado cities including Fort Collins and Longmont, but were struck down by the Colorado Supreme Court in 2016, which ruled that state regulations took precedence. However, in 2019 the state Legislature passed Senate Bill 181 to give municipalities the opportunity to pass regulations that exceed state standards. Larimer County responded by tightening its oil and gas regulations in 2021, and the Fort Collins City Council adopted location standards on oil and gas facilities last April.

Marsh and council member Andrea Samson asked for the new regulations for Loveland “and staff got started on it,” the mayor said, “but it never went back to council.”

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