N. Routt homeowner pays tax on water that doesn’t flow, wins on appeal
July 27, 2017
The Routt County Board of Commissioners voted 2-1 July 25 to overrule the board of the Steamboat Lake Water and Sanitation District, upholding the petition of North Routt homeowner Steven C. Warnke to be excluded from the water district and absolved from paying $347.31 in annual taxes.
The district has the right, under Colorado law, to appeal the Board of Commissioners' ruling in district court.
Warnke, who lives within the water district at 57005 Golden Tide Place on Willow Creek Pass, is among a number of homeowners in the water district who do not have drinking water and sewer service through the district but still pay taxes to the district. Warnke told commissioners, he was compelled by Steamboat Lake Water and Sanitation to dig his own water well and install a septic system before he could build a home on his 5.98-acre lot.
The short version of the district's position, based upon the recommendations of its longstanding engineering consultants, is that the difficulty of extending water and sewer to Warnke's home is so great, it is prohibitively expensive. But to exclude the Warnke property from the district boundaries would result in a negative fiscal impact on other residents of the district.
"I spent time and effort to install sewer and water systems as directed by district," Warnke said. "I'm troubled to be paying taxes to this district, when, by their own rules, I can't receive service.”
Warnke is chairman of the Routt County Planning Commission and, in that role, leads discussions pertaining to the fate of people and entities seeking development and land use permits from the county, among other duties. Before this week's appeal hearing began, Chairman of the Board of County Commissioners Tim Corrigan said that he and fellow commissioners Doug Monger and Cari Hermacinski could rule impartially on the matter.
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"I don't think that reflects any kind of conflict for us. We can fairly judge the appeal," Corrigan said.
It was Hermacinski who voted to deny Warnke's appeal of the water district's original finding.
The Steamboat Lake Water and Sanitation District was represented in this week's hearing by Steamboat Springs attorney Rich Tremaine, who made the case that it is commonplace in the broader taxing environment for individuals to pay taxes to entities whose services do not directly benefit them.
"We all pay taxes for services we don't use," Tremaine said. "That's inherent in our tax system. Look at the college or the cemetery district or the library, where you are paying taxes for something at least, at the moment, you are not using."
Tremaine described a complex system used by the water district's engineers to place properties in one of three categories based upon how"feasible" it is to extend services to them and how "integral" they are to the tax base of the district.
In the recent round of service hearings, three properties were kept within the district, and the owner of a fourth was granted their petition to be excluded.
With regard to Warnke's appeal, Hermacinski said she was not willing to overrule the district board.
"My inclination would be … to let it go to district court if that's where the parties are headed," she said.
Monger strongly disagreed.
"I think somebody needs to take responsibility up there," he said. "These (homes) will never get service. We already know that. I think they've already paid" for their own water and septic systems.
Corrigan said he was not compelled by Tremaine's argument that the relatively modest amount of district taxes Warnke is being required to pay is for the greater benefit of all the district residents and voted with Monger in favor of Warnke's appeal.