Aranci v. Lower South Platte Water Conservancy District.
2024 COA 28. No. 23CA0138. Colorado Taxpayer Bill of Rights—Water Conservancy Act—Mill Levy Rates—Collection of Taxes.
March 21, 2024
The Lower South Platte Water Conservancy District (district) was formed under the Water Conservancy Act (Act), pursuant to which it imposes and collects a mill levy on all property within its boundaries. In 2019, the district increased its mill levy rate from 0.5 mill to 1.0 mill and continued to do so in 2020, 2021, and 2022. A group of property owners within the district sued the district, alleging that the increased mill levy rate without voter approval was unconstitutional under Colorado’s Taxpayer’s Bill of Rights (TABOR), Colo. Const. art. X, § 20. The complaint also sought class certification. The parties filed cross-motions for a determination of a question of law under CRCP 56(h) to determine whether the district’s increased mill levy rate was constitutional under TABOR. The district court determined that the increased rate was constitutional under TABOR because CRS § 37-45-122(2)(a)(III), which controls how water conservancy districts fix their levy rates, predates TABOR and requires the district to fix the mill levy rate based on a mandatory, nondiscretionary formula. The court thus found that the district lacked discretion under the statute, so TABOR’s voter approval requirement in Colo. Const. art. X, 20(4)(a) did not apply. The court also denied the request for class certification, and it entered final judgment for the district.
On appeal, the property owners argued that the district court erred by determining that the district’s increased mill levy rate, without voter approval, was constitutional under TABOR. The Act provides the district numerous discretionary powers to acquire and manage property and to generate revenue, including the power to fix a mill levy rate and increase that rate in accordance with law. But TABOR supersedes conflicting state and local authority, and § 20(4)(a) requires a water conservancy district to obtain voter approval in advance to increase its mill levy rate under the Act. Accordingly, the district’s increase of its mill levy rate from 0.5 mill to 1.0 mill in 2019 and subsequent years without voter approval was unconstitutional under TABOR. Therefore, the district court erred.
The judgment was reversed, including the denial of class certification, and the case was remanded for further proceedings to include a determination on whether the case shall be certified as a class action and whether the property owners may recover their reasonable attorney fees and costs on appeal under TABOR § 20(1).