Loveland City Council recall protest to get hearing as board minority sues

LOVELAND — Signs of deepening discord on the Loveland City Council continued on Tuesday, with the board’s four-member minority filing a civil-rights complaint against the city in federal court and City Council voting to hire a hearing officer to rule on a member’s appeal of a recall petition seeking to oust him.

City Council members Dana Foley, Patrick McFall, Steve Olson and Andrea Samson sued the city in U.S. District Court in Denver, claiming that the five-member board majority violated their right to petition by opening a prosecutorial investigation against them over alleged open-meetings law violations after they drafted a letter last year requesting that Gov. Jared Polis veto a bill that would have prohibited including agricultural land in urban-renewal areas. If passed, that bill could have derailed McWhinney Real Estate Services Inc.’ s Centerra South mixed-use development on the east side of Loveland, which the plaintiffs supported.

And on Tuesday night, City Council — with member Troy Krenning absent — voted 8-0 to appoint Denver-based attorney Mark Grueskin to hear Krenning’s protest of a recall petition against him that was circulated by former City Council member Dave Clark and two other Loveland residents. That petition was certified Aug. 13 for the Nov. 5 ballot.

The office of interim City Clerk Angie Sprang announced Wednesday that the hearing on Krenning’s protest would be held in council chambers starting at 9 a.m. Sept. 5, and could be continued to the next day if needed.

Grueskin, a shareholder at the Recht Kornfeld PC law firm, often represents governmental entities and officials in litigation and regularly practices before the Colorado Supreme Court and the Colorado Court of Appeals.

Krenning, the only attorney on the current council, has drawn continued fire from development and other business interests in Loveland since taking office. Two weeks after he was elected, Krenning led the drive to rescind the Centerra South agreements, a decision that subsequently was reversed after McWhinney sued the council alleging breach of contract. Krenning also led the push to investigate the four-member council minority over alleged open-meetings violations before the agreements were originally approved by the previous council.

In a letter sent last Thursday to Sprang, Krenning demanded a hearing on his protest, led by an officer who would have the authority to issue subpoenas and compel witnesses to testify.

In his letter, Krenning contended that the petition verbiage stated that those signing it must be “eligible electors” instead of the “registered electors” required by state law. He wrote that a ruling by the hearing officer and subsequent judicial review would be unlikely to be completed before Sept. 10, the last day the City of Loveland must certify all issues it wishes to place on the Nov. 5 ballot. If the recall had to be held in a separate election, Krenning wrote, it could cost the city from $65,000 to $100,000, invalidating the petitioners’ claim that the recall would come with no cost to Loveland taxpayers.

His letter also disputed petitioners’ claims that his “destructive and abusive behavior” has “cost Loveland millions of dollars, damaged its reputation and resulted in the loss of excellent and respected leadership” — apparently referring to officials such as Loveland city manager Steve Adams and city attorney Moses Garcia, with whom Krenning had led negotiations for exit agreements.

If Krenning’s protest of the recall petition is upheld, Loveland city attorney Vincent Junglas has said the recall sponsors would have to restart their effort “from square one.”

The complaint in federal court by the City Council minority demanded a jury trial, claiming that the investigation of their alleged open-meetings violations, spurred by Krenning, deprived them of their “right to freedom of expression and right to petition” under the U.S. Constitution’s First and Fourteenth Amendments. Their attorney, John Zakhem of the Denver firm Campbell Killin Brittan & Ray LLC, had threatened at a council meeting in March that any further action by the board majority against them “will be met with a federal lawsuit for civil-rights violations.”

In their complaint, the four want the federal court to declare the city’s “official policy to sanction and punish Plaintiffs” unconstitutional, contending that the council majority had sought to “criminalize exercising their right to free and protected speech and petition activity on questions of government policy.” They claim that they “suffered injuries and damages in an amount to be determined at trial” and that “the depravation [sic] of Plaintiffs constitutional rights caused injury and damage, compensable to Plaintiffs by Defendant.”

Section 15-7 of the Loveland City Charter provides that “any willful violation of a provision of this Charter shall be deemed a misdemeanor and may be prosecuted in the Municipal Court. Any person convicted of such a violation may be punished by imprisonment for a term not to exceed the maximum term of imprisonment that the Municipal Court is authorized to impose …. by a fine in an amount not to exceed the maximum fine that the Municipal Court is authorized to impose … or by both such fine and imprisonment.” The four plaintiffs claim that the council’s application of that charter provision “is unconstitutional as it was used to sanction and punish Plaintiffs herein for exercising their right to petition the government and speak freely on matters of public concern.”

In April, a special prosecutor appointed by the five-member Loveland City Council majority said she had chosen not to pursue misdemeanor charges against the four sitting members as well as three former members. In an email sent to 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.”

The new lawsuit is one of several swirling around the council.

In one of them, eight plaintiffs, including recall organizer Clark as well as former Loveland City Council members Richard Ball, John Fogle, Don Overcash and Chauncey Taylor, sued the current City Council, seeking the ouster of Mayor Jacki Marsh, Mayor Pro Tem Jon Mallo, and council members Krenning, Erin Black and Laura Light-Kovacs, alleging that they violated the city charter last Nov. 21 by not calling for a public vote on its rescission of the agreements for the proposed Centerra South development that the previous council had approved in April and May 2023. That lawsuit said a public vote should have been called because Loveland voters in the same Nov. 7 election that propelled council members less amenable to McWhinney’s plans into office had also approved the citizen-initiated Ballot Issue 301, which gave voters the final say on urban-renewal plans.

In the other case, Ward 1 resident Peter Gazlay claimed unequal treatment under the law because the city failed to conduct a background investigation of Krenning, the winning candidate in Ward 1, and then after he was elected, applied a background test that was different from all other candidates prior to seating him.

Meanwhile, Loveland barbershop owner Bill Jensen filed two complaints against the city. He sued in July in Larimer District Court, contending that the council deprived him of transparency and violated open-meetings law when a quorum emerged from an executive session at 2:15 a.m. on Feb. 21 and reversed its Nov. 21 decision to rescind the McWhinney agreements. Jensen alleges that the action was done “without a full and timely notice to the public” and without citizens’ opportunity to comment on the action it took.

He also is appealing a district judge’s decision in March to throw out his first complaint, which alleges that the previous city council’s votes to approve the agreements with McWhinney were invalid based on open-meetings violations and improper notice.

The new federal case is Dana Foley, Andrea Samson, Steve Olson and Patrick McFall v. the City of Loveland, a Colorado Municipal Corporation, in United States District Court for the State of Colorado, case No. 24-cv-02370-MEH. 

Editor’s note: This article has been updated to include the date of the hearing on the recall protest.