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Dos Rios board denies PILT exemption request from Confluence Center
Summary
The Dos Rios General Improvement District board voted down an exemption request for the Confluence Center's payment-in-lieu-of-taxes obligation after staff warned of bondholder and disclosure complications; the motion failed 5-1.
The Dos Rios General Improvement District board considered a request Dec. 3 from the Confluence Center of Colorado for an exemption from its payment-in-lieu-of-taxes (PILT) obligation and ultimately voted the request down 5-1.
Rusty Lloyd, president of the Confluence Center board, told directors the nonprofit sought relief because an increased mill levy in a default scenario could be "crushing" to small nonprofits and would divert scarce resources away from programming. "We are here ... asking for an exemption," Lloyd said, noting concern about a possible jump to a 50-mill rate if the district were to default.
John Gormley, chairman of the Colorado Riverfront Foundation and a Confluence affiliate, said the nonprofit is willing to pay the assessed PILT if modest but asked the board to consider an exemption or an annual city-level support conversation if bond documents preclude relief. "We would like to have your support for as long as you'd be willing to give it to us, year to year," Gormley said.
City staff and counsel advised caution. City Attorney John Shaver and CFO Jay Valentine said the district's covenant allows for an exemption in limited circumstances but that granting one could trigger reporting obligations to municipal securities regulators and affect bondholders and the price of the bonds in the secondary market. Counsel said the covenant's exemption language exists, "however, that triggers a whole ... number of other complications relative to the pledge of the revenue and the bond documents." The city manager and city attorney said they would not recommend a city commitment to fulfill the PILT because it could create precedent and complicate debt service obligations.
Director Van Dyke moved to adopt the Confluence Center's request as drafted; the motion was amended to address an exemption request and failed on a 5-1 vote. The board did not adopt a permanent exemption or a city fulfillment of the PILT obligation.
CFO Valentine summarized that the GID's 2026 debt-service obligation was estimated at $940,150 and that the city currently plans to cover most of the 2026 debt-service gap ($859,089) from the sales tax capital fund while the GID would cover about $81,000. Board members said they remain concerned about the pace of development in Dos Rios and the financial strain of covering infrastructure before private development produces tax revenue.
The board took no further relief action at the meeting; staff advised the Confluence Center to pursue exemption language in ways that account for bond-covenant impacts and the district's reporting obligations.
