No charges coming against 4 Loveland council members

LOVELAND — A special prosecutor appointed by the five-member Loveland City Council majority has chosen not to pursue misdemeanor charges against four sitting members and three former members.

In an email sent Monday to acting Loveland City Attorney Vince Junglas,  Kathy Haddock wrote that although a report by special counsel Christopher Gregory had concluded that probable cause exists to suspect that the seven had willfully violated Loveland’s charter and municipal code as well as the Colorado Open Meetings Law, “I do not believe that the report includes evidence, or the likelihood that evidence exists, to prove that a violation of the OML, or the City Charter or Code has occurred. … Therefore, there is not probable cause for me to file any criminal charge.

“There are occurrences described in the report that the city may want to adopt policies or an ordinance to prevent from happening in the future,” she wrote, “but the existing laws have not been violated.”

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At issue are letters that council members Dana Foley, Patrick McFall, Steve Olson and Andrea Samson and former council members Richard Ball, John Fogle and Don Overcash signed on Loveland City Council letterhead last year and sent to Gov. Jared Polis and state lawmakers.

The letter to Polis was sent April 19 and signed by all but Samson. All seven signed the letter to legislators. The letters expressed their opposition to Senate Bill 23-273, which would have prohibited the designation of undeveloped land as blighted so it could be eligible for urban-renewal consideration — the strategy that McWhinney Real Estate Services Inc. was pursuing to gain approval for its proposed $1 billion Centerra South development on farmland on Loveland’s eastern edge.

The urban-renewal plan and master-finance agreement would use 25 years of tax revenues that the development would generate to pay for Centerra South’s infrastructure, including streets and utility lines. The letters to Polis and lawmakers contended that the legislation would derail McWhinney’s project.

SB 23-273 passed the Senate and House last spring, but Polis vetoed it. 

The previous City Council approved the Centerra South plans in votes April 18 and May 2, just before Polis vetoed the bill. Gregory’s report noted that in Polis’ veto statement, the governor explained “that part of his logic and thinking is what happened in that May 2 meeting.”

Gregory’s report contended that the coordinated letters, passed around in a “daisy chain,” constituted a clear set of violations of open-meetings provisions in state law as well as the Loveland city charter. The Loveland municipal code states that “willfully or knowingly” violating the charter provisions about open public meetings could result in a fine between $25 and $300, up to 90 days in jail or both.

Haddock, former senior attorney for the city of Boulder who now has her own Broomfield-based law practice, had to decide whether to file charges before the one-year statute of limitations for misdemeanors ran out this Friday and next week.

To file criminal charges, she wrote to Junglas, “there would have to be probable cause to believe all of the elements of the charge could be proven beyond a reasonable doubt.” Those elements, she said, were that a meeting occurred, three or more council members attended the meeting, “public business was discussed or formal action could have been taken at the meeting,” the meeting was not open to the public, and “each of the above actions was done willfully.”

Haddock determined that “one council member asking other council members to join him in signing a letter and other council members signing the letter does not mean a meeting occurred. If each of the receiving council members had separately signed the letter and sent their signature back to the asking council member, a meeting would not have occurred. The report does not show anything more than this scenario.”

She noted that Loveland doesn’t have the power to pass state legislation, and that SB 23-273 “could not have affected Loveland’s approval of the urban renewal plan” since Loveland adopted it before the Legislature sent it to Polis.

Reached for comment Monday, Mayor Jacki Marsh said she was disappointed in Haddock’s decision, saying, “my core belief is that a court needed to decide this.” 

She also said a court needs to decide whether Centerra South is a valid URA.

“A conclusion was reached, and I’m not a lawyer. I apply common sense, which differed from what Haddock was saying,” Marsh said. “I’m trying to be cautious of open-meeting laws while I’m mayor, and I thought this was an open-and-shut case.”

However, Troy Krenning, the only attorney on the Loveland City Council, said Monday he was “relieved” by Haddock’s decision even though he had made the original motion at the March 19 meeting to hire the special counsel.

“I appreciate the work Chris Gregory and Kathy Haddock put into this, Krenning said. “The investigation and prosecution are two separate processes, and I respect Kathy’s decision not to prosecute. If she doesn’t believe she should prosecute, I’m OK with it.”

As a defense attorney, Krenning said, “I prefer prosecutors who apply a high bar and not just bring a case because it might be or might not be politically correct.”

Krenning said he realized that a segment of the community would now call on the council to look for a different prosecutor, “but I’m not in favor of that. This is not Judge Roy Bean justice, where we hang the defendant today and have a trial tomorrow.”

The four accused council members hired John Zakhem of the Denver-based Campbell Killin Brittan & Ray LLC to represent them. A news release sent Monday from that firm said the four had been “exonerated from all accusations leveled at them by the council majority over the last few weeks” and that Haddock’s report had “clearly articulated their innocence.”

“In years of defending the First Amendment at all levels in Colorado, I have never seen a majority attempt this level of censorship. This was a clear case of the majority abusing its power to further purely political objectives,” Zakhem said in the news release. “This witch hunt to serve political gains, settle scores and create mayhem met its proper demise. It is laughable that the council majority calls themselves leaders or defenders of Loveland. They are now the insiders, pulling the strings behind the curtain, hiring attorneys in the dark of night, and sidetracking the real issues that face Loveland as a community.

“The Loveland council majority set a dangerous precedent,” Zakhem said, “but the scare tactics didn’t work.”

As he did in a public comment before the city council in March, Zakhem hinted at legal action of his own.

“I have no idea “what the majority ultimately hoped to accomplish with this stunt. But now I intend to vindicate the wrongfully accused and their First Amendment privilege,” he said. “I feel for the citizens of Loveland as their leaders are mired in vitriol. They shouldn’t have to watch their hard-earned tax dollars wasted on vindictive political stunts.”

Although she declined to press charges, Haddock’s letter sounded a note of caution about the way the letters were handled and suggested that some clear city policies might be needed.

“While it is not a violation of the OML to lobby the state Legislature about laws that may affect the city, it is often disruptive to a city when an employee, member of a committee of the city or an elected official say they are representing the city and lobby the state Legislature to introduce, pass or reject legislation that has not been discussed and approved at a public meeting,” she wrote. “It is also confusing when city letterhead is used for something that has not been adopted by the city.

“In my past representation of cities as general counsel, I have recommended that there are clear guidelines in the policies governing all city staff, members of boards and the council that clarify when a representation can be made on behalf of the city. This can include that only positions approved by a majority vote of council can be represented as city positions or placed on city letterhead. The policy could also specify when any official can speak on behalf of the city at legislative hearings or other meetings with other bodies.

“This creates a clear demarcation allowing all city representatives free speech to lobby on their own but limits their ability to speak or otherwise make representations on behalf of the city without formal city approval. Having such a policy in place may prevent future disruptions like [those that] surrounded SB 23-273.”

Marsh agreed that “we need to create some policies, update our charter. Technology has changed, laws have changed (since the charter was written). When you spell things out, people will comply.” It’s when things are vague that problems occur, she said.

Marsh said she is in favor of rewriting the city charter, which would involve two elections, first to elect a charter commission and then to vote on what the commission would present.

“It’s far simpler to do an amendment, which the council can propose, and let voters approve,” Marsh said, adding that it would be difficult to make all the needed charter changes by amendment, which is why she favors a rewrite.

Krenning agreed, and said he plans to urge the city council to adopt “some sort of a procedure so that if a citizen or some other counselor should be investigated, we can have a process to do it and eliminate some of these dime-store lawsuits.”

Samson, who signed the April 27 letter to the General Assembly but not the April 19 letter to Polis, referred callers seeking comment to Zakhem, but added in a comment to BizWest, “I’m hopeful we can get back to work.”

Calls and emails requesting comment from other members of the Loveland City Council had not been returned in time for BizWest’s afternoon deadline.

BizWest Managing Editor Kenneth Amundson contributed to this report.