Senate Local Government & Housing [Apr 22, 2026 - Upon Adjournment]

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Senator Kipp, tell us about 1300. Thank you. Thank you, Mr. Chair and members of the committee for hearing this bill today. Colorado is facing two crises that are deeply connected, a shortage of affordable housing and the rising cost of health care. Research consistently shows that stable housing is one of the strongest determinants of health outcomes. People who lack stable housing have higher rates of chronic disease, worse mental health outcomes, and rely more heavily on emergency services, the very services our health districts are designed to provide. HB 26-1300 recognizes that connection and puts it into action. This bill allows health service districts, which already serve our communities through hospital, clinics, and emergency care to add affordable housing to their service plans without triggering a lengthy material modification process, as long as the district's board affirmatively votes to do so. Importantly, this is entirely opt-in. No district is required to take on housing services, and this is about expanding what's possible for districts that see housing as a part of their mission to improve health outcomes and giving them a straightforward path to act on that. This is a practical, locally-driven solution. Health districts know their communities. They know when their patients are cycling through emergency rooms because they don't have a stable place to recover. They know when workforce housing shortages are making it impossible to recruit and retrain the nurses and paramedics their communities depend on. This bill gives those districts one more tool to address root causes, not just symptoms. So I ask for your yes vote.

Thank you, Mr. Chair, and thank you, Senator Kipp, for bringing the bill. I just wanted to clarify the way I understand it. The current law is that if a special district health board wants to expand their scope, in this case, go into affordable housing, they have to go to the local government authority, whether it's a county commissioners or a city council, and petition them for the ability to expand their scope. This bill would remove that requirement, so that would be up to just the board itself to make the determination whether or not they would expand into affordable housing?

Senator Kip. Oh, I'm sorry, Mr. Kip.

Okay. Thank you.

Thank you, Chair and members of the committee. My name is Bev Staples. I'm here on behalf of the Colorado Municipal League and our 270 municipal members. I am here today to testify in respectful opposition to House Bill 1300. At its core, our main concern with House Bill 1300 is around local control and the proper stewardship of taxpayer dollars. Colorado's municipalities strongly support affordable housing solutions. Our members live this challenge every day alongside our residents. But how we fund those solutions matters just as much as the outcomes that we seek. Health service districts are created with a clear voter-approved purpose to provide critical health services to their communities. Taxpayers agree to fund these districts with the understanding that these dollars will be used specifically for health care needs. House Bill 1300 would allow those funds to be redirected toward affordable housing projects without obtaining approval from locally elected officials, which is a fundamental shift. When we ask residents to approve taxes, we are entering into a compact with them where we are saying, this is how your money will be used. If we later change that purpose without their consent, we do risk eroding public trust, not just in this one district, but in government broadly. And that trust is essential. Without it, future efforts to fund both health care and housing can become more difficult. Local governments are often positioned, are best positioned to balance competing priorities, coordinate land use, and ensure that housing investments align with broader community goals. Removing their role from this process undermines thoughtful planning and weakens accountability. As local governments, we absolutely welcome the opportunity to partner with health districts to fund affordable housing, and we believe there are mechanisms in place today to engage in that partnership. I want to be clear that this is not about opposing affordable housing, but rather it's about ensuring that funding decisions remain transparent, locally driven, and faithful to voter intent. Therefore, I urge you to oppose House Bill 1300. Thank you for your time and consideration.

Good morning members of the Senate Local Government Committee My name is Megan Wagner and I here on behalf of the Special District Association to testify in opposition to House Bill 1300 To be clear, we are not opposed to affordable housing, but this bill does make a radical change to the established process for creating a special district and making changes to a service plan. A little bit of background on the formation of a special district under Title 32 is helpful here. Before a special district is formed, a service plan is carefully developed and must be approved by a municipality or county. A district court judge must approve the plan and set a date for the election. The plan is then presented to the voters with the proposed district, who must approve both the district's purpose and the use of the taxpayer dollars for those specific services. House Bill 1300 undermines that process. It would allow a health district board to independently engage in building affordable housing without seeking approval from the municipality or county and without voter approval for the significant change in the use of taxpayer funds. Further, the bill lacks clear guardrails. It does not define the type of affordable housing that may be developed, nor does it require any meaningful nexus between the housing and the core mission of the health district, such as workplace housing or employee housing. As written, it grants broad authority with little accountability. This is a significant departure from the longstanding practice and removes critical oversight from both local governments and voters. For these reasons, we oppose House Bill 1300. Thank you.

Thank you, Mr. Chair. Ms. Staples, you mentioned a desire to go back to the voters to change what the special district has been created originally for. But under current law, does that have to happen?

Ms. Staples.

Ms. Wagner.

Mr. Valdez, did you hear the question?

So the question was, right now, if a health district wants to build affordable housing, and that wasn't in the original charter from the voters, does it have to go back to the voters to make a change, or does it have to go to the local governing body to make a change?

Thank you, Mr. Chair. It does not have to go back to the voters. but it does have to go back to the city or the county who approved the original service plan.

Thank you, Mr. Chair. So just to confirm, so the impact of this bill is to remove that step, right? So no longer would you have to have the approval of the local governing body? That's the change? Okay.

Sorry, Mr. Chair. Yes, that's correct, Senator.

Snyder. Thank you, Mr. Chair. and I guess for you, Mr. Valdez, you seem to be the answer man today. So I don have the legislative history of these health special districts but looking through all the material it seems like having the local government authority have to be petitioned and approve of the expansion of their scope for what I believe are called substantive modifications Seems like that has a feel of compromise. Instead of having to go back to the voters for every substantive change, at least they have to go through the local government authority. So I'm wondering if you had any of that legislative history. Let me know if I'm on the right track.

Thank you, Mr. Chair. You could have written the history, sir, because that's exactly what that's designed to do, not go all the way back to the voters, but give that governing body that made the initial okay on the service plan the power to say yes or no, because it's a material modification, and that's what we're talking about in this circumstance.

One final question. And, of course, the voters of the district would always have the ability to, if they weren't happy with the board's direction or some of the decisions they made, they could actually recall or remove those people through an elective process. Is that correct?

That's correct. Okay.

And I have an additional question. Mr. Valdez, last year you and I, you were very helpful with me when I was considering moving into a metro district. and we talked about a service plan. Is that what we're talking about here, a metro district that has to provide a service plan for those prospective owners?

Thank you, sir. Yes, we're talking about the service plan that is basically the constitution for any special district. That's the governing document. And so if we're going to amend that, the process right now, as we've described and discussed, is that the district goes back to the city or the county and says, we want to make a big change here. And it can be costly and it can be time-consuming, which is why it's put in place, so that there are those guardrails that you've heard about from previous testimony.

And what is the difference between a special district and a metro district?

Okay.

Thank you. Seeing no further questions, thank you for your time. And does Mr. Bowne need to sign up? No. Okay. Okay, we will go to those that are for this legislation. Ms. Gonzalez, if you'll pull up Kathy Alderman, former representative and former mayor, Jenny Arndt, and then Kinsley Halstead. Okay, we will start with former legislator and former mayor, Ms. Jenny Arndt.

Good to see you.

Thank you very much, Mayor slash Representative. And Ms. Alderman, thanks for joining us.

Thank you, Ms. Alderman. Ms. Halstead, thanks for joining us.

Thank you. Thank you, Ms. Hestead. Committee, questions for this panel?

Arndt.

Good to see you again.

Sure.

Mayor Arn.

and thank you for that and it's my understanding many of the 27 or so health districts in colorado were formed for similar reasons, often to support a rural hospital that, you know, might be living on the margins and they want to keep that asset in their community. But I guess I'm going back to that original vote after they've established the boundaries and the qualified electors and then they have a vote. And I think you might have heard me ask, Mr. Valdez, that if the approval of a local governing authority, whether a county commission or a city council, was kind of a compromise step to make sure that the board didn't have that sole discretion to make an expansion of their service mission, for lack of a better term. So I'm just wondering what checks would be left upon the board if they decided to go in a direction and a number of their original voters didn't want to go that direction, maybe didn't vote for the special district creation because it was focused on, say, a hospital or particular health needs. So I'm struggling with that concept that we would be taking kind of the last guardrail off of this process.

Thank you very much. Thank you, Mr. Chair. Well, I don't know how many original voters for the district are still around, for one. That district goes in perpetuity. So the original voters for that district would be quite old now, even if you were 18 and 1960, correct? So the original voter intent was to build a hospital and provide health services. I don't have their charter in front of me. The check and balance here, with all due respect, Senator, is the legislature, is you all, our voted representatives. So if our voted representatives in this body say that it is permissive for that duly elected local body to contemplate providing housing services with the health money, because housing, as we know, is a precursor to health, that they can do so if they want. and I think that mostly it would be used in times of emergency flexibility you could imagine I mean when the floods and the fire came through the Larimer County and the the district is massive it true there was all sorts of needs for evacuation a temporary shelter You know if the board took a vote also I don know if you looked at the budgets I looked at a few of the budgets of the, I think that Larimer probably has one of the bigger health districts in the state. They're quite small. They won't be building housing with this, but I could imagine where they're doing rental assistance short term. Right. So someone comes to them in need. And so we're not building another hospital. Right. So they're providing health services, dental. They do good work. it just provides that extra layer of flexibility and that they are elected so i don't know why it takes away a level if this duly elected body says that housing is a precursor to health and gives them the flexibility to take that vote that seems like a pretty big check we're not rewriting everyone's charter. We're just giving them permission to use some of their money for a precursor to health.

Yes, Senator Ball. Thank you, Mr. Chair. Mayor slash Representative Arndt, thanks for coming. Question for you. You mentioned that you didn't think this would be spent to build new affordable housing so much as it would be used in, like, cases of emergency rental assistance, things like that. In that scenario, why would the local government deny the request? Like, if there's an emergency happening, it's all hands on deck, and there's a health district who says we can help out by, you know, supplying some money that can keep a shelter open, something like that. I guess I'm hard-pressed to imagine a scenario where the county commissioners or the local government says, no, we don't want that help.

Thank you, Mr. Chair. I agree with you, Senator. I also don't think that most health districts have contemplated this probably before. I mean, this created quite a good discussion, right? I don't know if they know that that would even be – think about when these charters were created so many years ago, right? So I don't know how many times they've refer back to their enacting charter or not. I'm not sure. But I don't know. I mean, a few of you have come from local government. I went from the state back to, and I realized how slowly local government works. If you're having a fire, a flood, an emergency, we would probably put that on our schedule at City Hall in four or five months. Now, you can make some extraordinary hearings and those sorts of things. That's absolutely true. But I believe they meet once a month, the health district. So I'm just thinking in terms of their flexibility. I don't know why we would make them have a material modification if we expanded what we allowed through the enacting statute that's all thank you vice chair Snyder thank you mr. chair again for

Mayor Arn.

and for those questions. I wanted to raise the issue of recuperative care in my testimony as an example of something that may be a non-emergency situation where a health district could pay a housing provider for basically room and board so that the hospital is not releasing people into homelessness who cannot recover on the street. And so I use that example as in Denver right now, we contract with six different hospitals who pay us for beds in our recuperative care center, which essentially is room and board. It's short-term temporary housing for individuals that are experiencing homelessness but are suffering from a health care condition and need a place to recover. And so this seems like a win-win for a health services district, so that that individual doesn't end up back in the emergency room. Again, those very high, costly emergency room services that are often covered by Medicaid. And just from a community benefit standpoint, the hospital is ensuring and making sure that it's not releasing people into homelessness where their health condition worsens if there's a place where that person can recover and they can pay for. And so that was one of the reasons why I raised that particular example as something that health districts could consider from a flexibility standpoint if they had the ability to do this. Thank you, Ms. Altman. Yes, Senator Ball. Thank you, Mr. Chair. One question

I would be happy to answer it, but I have no idea.

That's probably a local government question. You know, we'd have to get I think we'd have to get Michael Valdez back up here because I don't I that struck me, too.

Yes, sir. Michael Valdez, SDA. The question was whether or not material modification, you have to go back to both jurisdictions. yes, but not the voters. You have to go back to both jurisdictions that approved the original service plan. So not the voters, but back to the governing bodies, the city council, the county commissioners.

So the reason I ask is I'm wondering, and this is a hypothetical, so take it with a grain of salt, but if you had a health district that spanned two counties and maybe neither one of them wanted affordable housing in their own county or maybe one did and one didn't. Right now it seems like the health district, if there was a county that didn't want it built in that county, they effectively have veto power. But if the bill passes, you could have a situation where that health district is able to put affordable housing in the county that might object to that with the approval of maybe the majority of the people elected to the district who might come from that second county, if that makes sense.

That is exactly the point. Again, a modification of a plan doesn't go back to the voters. It goes back to the board or commission of the county and or city. But you're right. if one county, city didn't approve it, is an effective veto.

Senator Kipp? No amendments.

Senator Kipp? Thank you, and thank you, everybody, for hearing this bill today. Really appreciate it. You know, I think our witnesses made some good points. There were situations during the pandemic where probably some of our local health districts were using some of their funding for services to help provide people with some types of housing. And was that legal under this? Maybe not. So can we at least make progress in the area of making sure that they are able to do this? you know, people had not brought this to me saying that they would be maybe interested in supporting it if this were narrowed, if this bill should move forward. We'd be happy to narrow the circumstances under which this type of housing might be provided But you know really I do want to also make sure that we do reiterate that the affordable services have to be carried out in coordination with local public housing entities, including local public housing authorities, local housing agencies, and the local government entity responsible for conducting an applicable regional or local housing needs assessment. So it's not being done in isolation. It is just removing the red tape, because when you're in an emergency, you're probably not going to go through the red tape. You're just going to do stuff, and we'd like to make sure that everything that's being done is kosher. Anyway, thank you all for hearing the bill today. I would ask for your support.

Then I move House Bill 26-1300 to the Committee of the Whole.

Senator Liston. Thank you, Mr. Chair and committee members, and thank you, Senator Kipp, for bringing this bill. I was kind of on the fence on this bill, but the good senator from Manitou Springs brought up something that, as I focused in on it, about the affordable housing services and what it means, the planning, financing, acquisition, construction, reconstruction, rehabilitation of affordable housing, et cetera. I'm somewhat concerned. We all know the tight budgets that the various health care facilities are in, whether it's rural or even here in the Denver health care area. And I'm just afraid that the health care people know what they're doing in the health care area. and I can certainly appreciate wanting to help people when they come out of hospitals that they're duly taken care of, but inadvertently if something like this should pass, would these health care districts be going beyond their scope and getting in a little bit over their head? So while I appreciate what the good senator is trying to do, I'm reluctant to support this right now without knowing a little bit more about it, but I appreciate where you're coming from.

Vice Chair Snyder. Thank you, Mr. Chair, and thank you to Senator Kipp and all the witnesses. I think I understand better what your intent is here, but I'm having a hard time finding a way to support this bill. If you let me digress a little bit, we just had an election with our Metropolitan Parking District down in Manitou Springs. The city council sought to terminate that district and take over the one lot they operate and one of the electors sued in district court and the court ruled that no, it was a board decision to terminate and they actually had a vote. They determined there were 68 electors alive, and that vote, they turned down the closure of the district.

Thank you, Mr. Chair. I'll also be a very respectful no today, and I'll emphasize respectful because I love the creative thinking that went into this bill, and I hope it does to Mayor Representative Arndt's comments. I hope it does spur some creative thinking on behalf of the health districts for how they might come to local governments and ask to have creative solutions along the lines of what we're talking about. But I think, and this discussion has been useful for me at least to understand how this all works, but it feels like what we would be removing is really just a piece of local coordination, and I think that's what I'm a little uncomfortable with. I mean, I used to work in the city of Denver, and I tend to think that one bad impact of just the proliferation of special districts in Colorado in general is we lose a level of coordination that we would otherwise have. So I do hope that what I think the witness has testified to happens. I hope that we do see special districts coming together with local governments to try to further affordable housing, which we need in our state. But I also think that element of local coordination is very important. So for that reason, I'll be a respectful note today. Thank you.

No.

No.

Respectfully, no.

Respectfully, no.

No.

Respectfully, no.

My co-prime is sitting in Ag Committee. We're going to kind of tag team this because we're doing confirmations over there right now. But committee, thank you for hearing this bill today. I have a small community in my district and actually several that are kind of on the brink of maybe the same situation as going on in Hartman, Colorado. So the town is incorporated. The city clerk, the mayor, and all the council people have resigned, and so that leaves the town still incorporated, but they can do nothing because of statute. They cannot petition for an election. They cannot hold one themselves and be a legal election, and they have a water system that is failing. It's been under boil order for a long period of time. Their water system needs major upgrades. And when this city council and mayor decided to resign, they had the foresight to prepay the electric bill on the water well for a few months out. But come about July, it's going to be a hard stop and there will be no more water. without having officials to sign off on water tests, paperwork to fix the water system, you name it, nothing can be done. So what this bill does is change the statute to allow an emergency for the state to step in to get the water system up and going to perform the tests for a six-month period. and then a landowner or resident of the town can petition for an election either to reincorporate, elect officials, unincorporate, and to form a water authority. So that's what the bill does. it sets up a $100,000 fund to allow for CDP to come in and get the water system up and going and then to hopefully get on their feet enough to hire a water manager. So that's kind of the nuts and bolts of this bill, and welcome any questions.

Thank you, Mr. Chair, and thank you, Senator Pelton, for bringing this bill. So the town's called Hartman, and we have this petition. It looks like it's signed by about 21 of what I have heard is about 30 residents, and 11 of them have the last name of Hartman. So I doubt if that's purely coincidental. But this is a statutory town, right? Yes. And there's already a process in state law for dissolution of a statutory town?

Thank you. So under current statute, if all the officials have resigned or are not in place, they have to wait five years to be able to do anything under current statute. And if I can follow up this letter on the cover letter is rather concerning Apparently there were some physical altercations a few years back and one of the trustees went to the hospital So have they hit that five-year mark where they haven't had any sitting elected officials?

No. In fact, they're about three months in is all.

Thank you, Chairman, and thank you, board members or committee members. Yes, my name is Don Wilson. I'm the Prowers County Administrator here down by Hartman. You know, this bill addresses a gap in current statute when a municipality is struggling with its organizational functionality in a situation where services and critical infrastructure can become unstable. creating great concerns for the residents. I think Senator Snyder mentioned that we had a letter of concern for the water infrastructure of this community. And those of you that have worked with me before know that I'm an advocate for local control. But in this scenario, we see where there's not enough ability to work with each other or other entities to have the stability the residents need. So this bill kind of creates that avenue where we can take a balanced approach with limited and target support from outside agencies and focus on that key infrastructure without stepping into their sovereignty. This bill doesn't affect dissolution. It doesn't affect incorporation or reincorporation. So I am asking for your support on this bill. You know, we had several community meetings during the development of this bill, and we also worked with multiple entities across the lines. We worked with CML. We worked with the state, DOLA, CDPHE. And I think we came to a point that I think is a good thing to see in a bill. Not everybody is totally happy So I think we came to a good conclusion there so with that I just asked for your support and I be here for the next few minutes for any questions Thank you Okay Thank you Mr Wilson Because of your time constraint I going to see if there

Thank you, Mr. Chair. I just want to recognize former Representative Wilson. You are the second former mayor slash representative we've had in committee today testifying. And then it sounded like you said at the end there you have a compromise that nobody's 100 percent happy with, but everybody can live with. Is that a good definition of a good compromise? I think it is.

Yes, Senator Snyder, I think it is a – it shows that we really got into it with each agency and got to something workable without stepping on anybody's toes, without interfering with anybody's sovereignty. We're good with it, so thank you.

Thank you, Mr. Chair. My name is Nicole Rowan. I'm the director of the Water Quality Control Division at the Department of Public Health and Environment. And as you indicated, I'm here for questions today. I can help answer questions on compliance with the Safe Drinking Water Act.

So that's the one last remaining issue for me is the $100,000, which I think will be requiring this to go through appropriations. So that $100,000 would be used to bolster, to maintain their well system down in Hartman area. What do you anticipate that $100,000 being used for if it's needed?

Thank you, Senator, for the question. So I think what the funding will be used for is to make sure that there is an operator overseeing the chlorination of the water system and providing, paying for the chlorine in the time that they are working to transition to a different owner of the water system potentially and also any monitoring that's required as part of the Safe Drinking Water Act.

Thank you. And to Ms.

Ms. Roman, thank you. So just to be clear, if this bill doesn't pass, the citizens of Hartman will effectively be out of water, what, in another 90 days or so?

Thank you, Mr. Chair. Thank you, Senator, for the question. My understanding of the situation on the ground is that the power for the well, the pump in the well house has been paid for the next few months. But it is anticipated that that will no longer be paid after maybe the July or August time frame. All right.

three minutes for your testimony. Good morning. My name is Jamie Darrell. I am actually a Denver resident, but I am a vested interest as that property is houses my mother. So I am here actually in opposition of this bill, and you'll have to bear with me. This is my first time doing this. So if I get this wrong, I'm sorry. And I did actually submit two things. I'm going to do this, but I did submit also this in writing, so there's a little bit more there because I was pretty sure I only had two minutes.

I do have you listed as opposed to the bill, so my apologies.

So would you like me to step back or do you want me to go ahead?

It's friendly opposition. I don't mind. I am not conflict averse. All right, so there's no question that Colorado needs to address the vulnerabilities facing its smallest communities. Recent acknowledgement, not knowledge, of rural town failures has revealed real gaps in statute, real weaknesses in continuity, and real consequences when support systems fail. Addressing those gaps is necessary. However, Senate Bill 157 is short-sighted because it responds to Hartman in isolation. Without examining the broader pattern of statutory failure across statutory towns in Colorado, this bill is introduced without conducting any assessment of governor's fragility, the collecting data on statute, failures and no evaluation of those towns currently showing risk. Nor has it considered the population this bill impacts most of often communities that are aging, low income, and administratively fragile, failing to consider the reality of displacement of these residents. Without that information, Senate Bill 147 is not evidence-based governance, it is reactive governance. As written, this bill contains several critical flaws that create uncertainty, increase risk, and leave residents unprotected. That includes it creates abandonment criteria that are undefined and unverifiable, making it possible for a town to be dissolved based on triggers no one can measure or contest. Two, because of statements like or words like critical water infrastructure, it is not defined in Colorado law and no agency tracks what towns have it. The bill can only be applied inconsistently and unfairly across communities. It provides no guaranteed hearing, no required community input, and no assured judicial review, allowing a town to lose its government without residents ever having a chance to speak. It dissolves a town without explaining what happens to property rights, contracts, debts, or ordinances, leaving residents and counties with unresolved legal and financial consequences. It responds only after after collapse and offers no strategy to prevent future failures. It becomes ineffective as a long-term governance tool. It strengthens no oversight, funding, or technical assistance, leaving vulnerable water systems just as unsupported as before and no safer from collapse. It offers only temporary maintenance money with no plan for who will ultimately own, operate, or bring a failing system into compliance, ensuring instability continues after abandonment. It drives perverse incentives by making emergency support available only after abandonment, which encourages struggling towns to fail to receive help that should have been available long before crisis. And finally, this bill was rushed under the appearance of helping Hartman, yet it does not mitigate risk or resolve the issues that caused Hartman's collapse. It compounds them. If urgency is possible for a bill that dissolves towns, urgency should be possible for a bill that protects them. One that aligns with public safety provides a path to success and offers actionable, effective, and impactful solutions. Statutory towns are not the only government type harmed by these gaps. These failures quietly affect residents across Colorado every day. This is simply the first time the consequences have become visible. Rural communities have been asking for help for years, and the agencies meant to support them did not act. Colorado can do better than this bill, and I am asking for your no vote.

Good morning, Mr. Chair and members of the committee. My name is Maria De Cambra, and I'm the Executive Director of the Department of Local Affairs. We are here today in strong support of Senate Bill 26-157. This legislation was made necessary by a situation in a small town in southeast Colorado, Hardman. This is a town whose average age is 58 years old, and the median income is of $12,000, with a very high level of poverty rate of about 90%. The DOLA team has been working with Hartman for years, taking more than three dozen trips to the town since 2020 to support the town and the residents. We have helped train two different town clerks, provided orientation training for new town boards, helped staff with statutory filing requirements, including budget and audits, and help them secure a grant from DOLA to repair their failing water system. Despite all this technical and financial assistance, the town board has been unable to carry out their legal responsibilities due to infighting, recalls, and resignations. Things escalated over the last year to the point where physical violence broke out at a board meeting in January, and the last three sitting trustees resigned soon after. The town currently has no elected officials, no staff, no clerk, and no water operator. This is particularly catastrophic because of the town's failing water system. And it's important to mention we have seen situations in other towns like Kiowa and Watkins where the towns have dissolved, but they have resolved their water system situation before the town actually dissolved And one thing I wanted to mention that it particularly catastrophic because Hartman has been under several boil water advisories since 2019 and most recently in September of 2025 This situation is critical because Hartman residents could lose their water by early summer. I know there was a question by Senator Liston around when the water would be shut off. They currently have three electricity accounts and our regional manager called the electric company. One is paid through May, one is June and the other one is July. So it's a matter of like how quickly they will be shut off. So we're talking about weeks. The water storage tank is in poor condition and initial engineering reports indicate the tank's integrity has been compromised. There is also concerns that the surface water is getting into the well, which would further compromise water quality. Finally, the electricity, as I mentioned, that gets the pump to operate is paid through starting May, depending on the account. This situation has left the Hartman community with very limited options to move forward, and it's now a matter of public health and safety. DOLA has convened two recent meetings in Hartman with residents to see what we could do. There has been general consensus amongst the Hartman community that the town was not functional and that the community needed to put aside differences and work with the county and the state to address the water system. This was reinforced by the petition that Senator Pelton submitted to all of you today, and that was actually a petition that came out of a meeting that we had there on Saturday where myself and Director Berkman with Prowers County went and met with residents and Senator Pelton. And as I mentioned, you know, DOLA has been working very closely since February with a large group of stakeholders, including Prowers County, CML, special thanks to the director for his leadership, the governor's office, the Colorado Department of Public Health and Environment, public safety, the Secretary of State's office, and Senator Pelton and Assistant Minority Leader Winter to come up with a solution. The solution is Senate Bill 157, which will allow for expedited town abandonment in instances where the town operates critical water infrastructure. The bill also authorizes CDPHE to transfer up to $100,000 from the small community water and wastewater grant to the Department of Public Safety so they can help with the cost of the operation. lastly I just want to say to summarize

Director Balmer, thanks for joining us. Thank you, Mr. Chair, members of the committee. Great to be back in the building, more or less. Kevin Balmer, I'm the Executive Director of the Colorado Municipal League. I've been with the League since 1999, and I can guarantee you that this is one of those examples of, well, I thought I'd seen everything. so I think the prior testimony explains what the bill does and why it's necessary let me just come at it from a little different reason and why CML supports the bill I disagree to some extent with some prior comments including from the sponsor that Hartman is an example of one of many towns that may be on the brink of the same thing I disagree with that I think it was such an extreme and exceptional case I was there at a board meeting in December, the month prior to physical altercation, and it darn near happened then, too. The breakdowns were systemic on all sorts of levels. It happens, though. How many of you have heard of Bonanza City, of Carbonate, of Chihuahua. Those were all municipalities that don't have a water system but haven't had an election or done an audit or had a budget in years. None of them with the exception of Chihuahua have been abandoned. In fact, Carbonate was a CML member up until a couple years ago when they stopped paying dues and holding elections. Chihuahua was abandoned through the Secretary of State's abandonment process in 2019, and a whole slew of municipalities under Secretary of State Mike Kaufman in 2007, a bunch of municipalities that were still officially incorporated were abandoned in 2007. The difference with this situation is this is all about the water system, and this bill gives at least a chance of something good happening that without it, there is little to no chance, and I would say 0% chance. And I know there's a lot of concern about what happened historically and whether it was fair or whatever. It doesn't matter. We are at where we're at. This bill is very narrow. I agreed with the opposition that it was very narrowly drafted for just this situation because it was. The situation doesn't exist anywhere else, and this is the only path forward to try to ultimately get safe drinking water to the folks that live there, whether some of them like it or not. And that's kind of where we're at. So the League supports the legislation. I want to encourage the committee to help be advocates for exactly what's happening here. It is for an extreme situation that needs direct attention immediately. And then just a fun little trip down memory lane. The $100,000 from the Small Communities Water and Wastewater Fund, that came from CML-initiated legislation, that fund, back in 2009 that Senators Iskar, Penry, Representative Corey Gardner and Kathleen Curry put their name on to help ensure that the state was able to do more to support small communities. It is perfect for this type of situation, so I was pleased to see it included in the bill. I'm happy to answer any questions, historical or otherwise, and thank you for your time.

I'm just here for questions. Thank you, Mr. Chair.

I'm just here for questions only.

Thank you, Mr. Chair, Mr. Ballmer, Mr. Bergman. Thank you all for being here. So on the financial side, I know we'll see this in appropriations, at least I believe. So what happens with this $100,000? How far is that going to take this community into the future? You know, it's a life boy, so to speak. And then you referenced the fund that it came out of, that foresight. How much money is in that fund, roughly, do you know? Mr. Balmer.

That would be a great question for Nicole Rowan. I don't know off the top of my head right now. This was those sponsors of the legislation back then responding to many mandates that were coming from the state on water quality issues where the state was not providing any funding for it And so in exceptional severance tax years when they occur, that fund actually receives money from what would otherwise go into the Department of Natural Resources share. So it was really revolutionary at the time. and when the state doesn't redirect severance tax money, it can really be useful for small communities. $100,000, it's a small portion of what they need. I'll let others speak to that if they want to talk about it, but it is exactly what you said.

So my question was sort of two parts. So if this bill should pass with $100,000, how far will that get the community of Hartman into the future? Will this just be kind of a Band-Aid for six months or a year or whatever? And then the fund that this is coming from, which was brought to our attention by Mr. Balmer, how much is in that ballpark figure, how much is in that the name of the fund escapes me? the Small Community Wastewater Treatment Fund.

Thank you, Mr. Chair, and thank you, Senator. As far as what the $100,000 can do to support the community, again, this is just to kind of keep the system going and maintaining it as it is. So it really is meant to be a bridge. So, you know, if there is someone else that can come in and operate the water system, that that would that funding would be sufficient as a bridge as bridge funding. The small community grant program, again, as Mr. Bomber explained, it really does fluctuate based on severance tax. My understanding, I just chatted to see if I could get an exact number, but I think the last time I reviewed the balance, I think it was somewhere less than a million dollars in that fund as it sits today.

Thank you, Mr. Chair. To add to your question, so the bill essentially has like a two-step process, right? So the first is in the short term is to give the authority for six months to the Department of Public Safety to hire a water operator and utilize the $100,000 to really just make sure we can pay for the electricity, see if there's, you know, check on the chlorine, really get it so we can continue to operate while the abandonment process takes place. Because when the abandonment process actually takes place, to what Director Bomber said, then ideally a water authority is developed, and then they would continue the operation. There is money that CDBHE and DOLA had awarded to the town, and then the question would be is, based on what we find, can that money continue to be utilized or what other funds are needed? I hope that helps.

Thank you.

Mr. I've got a couple of questions for you. The first is, how would you solve this problem if you were in our shoes? How would you solve the issues that we have right now in Hartman? I would start with what the actual issues are, and I would quit focusing on the news about the fight and actually understand what's happening in Hartman. I would also consider that this isn't just a Hartman issue, with all due respect. If you're paying attention to what's happening in rural Colorado, especially in southeast Colorado, they're consistently gaining traction in the news and with those communities, with the issues that are happening in their communities. So if you're asking me what would I do, I'm not saying there doesn't need a bill. I'm saying there needs to be a bill that actually deals with the statute that's in place versus compounding the current issues. Why are we not resolving the issues? Why are we not mitigating risks? We're looking at solving an issue without mitigating the risks that are going to continue to happen with collapse in other rural towns.

Thank you, Mr. Chair. So I understand there's maybe more deep-seated, you know, issues at play or systemic fixes that we could address. But just practically speaking in the short term, I mean, there's no mayor, there's no clerk to hold an election, there's no trustees, and there's a boil order because nobody's taking care of the water system. So just in the very immediate future, how would you solve that problem?

Yes, sir. I would start with going back to the county and requesting to be able to do a vote. We're there without the ability to do a vote because it was removed when the board decided to leave. Again, I think there's a lot of miscommunication, misunderstanding of what's actually happened there, but I would start there. Now, I'm not saying that's going to fix everything. And that boil order, by the way, I bought this house in August of 2023. It has been in boil order since. So I'm not disagreeing with everybody here that there is an issue. I am disagreeing with the way that we're approaching this because it's also not just Hartman. We have to consider that this bill impacts other small rural communities in Colorado. This just happens to be the one that we're acknowledging at this moment.

Thank you, Mr. Chair. I appreciate that. And I appreciate that you moved to Hartman recently, so we've got some in migration. Somebody has moved into Hartman recently. What do you think will happen if this bill doesn't pass in Hartman?

I think that if this bill doesn pass then I think that it needs to go back to the county or not the county I sorry I think that they need to open up and I think they would they would almost have to open up the opportunity to do a vote That community does have individuals already in place when they recalled the previous board who are willing to sit on that board and there was actually actions being taken at the end of last year to actually action the grants that were available that was put on hold for reasons that we could go into but we won't hear. And so there are people in place with the ability the knowledge and the willingness to step up and help get Hartman out of its current collapse. Now, that's also dependent on whether or not those grants will still be available as that board sat on them for so long there is a chance that that money is not available.

Thank you, Mr. Chair. One more question, but this is for maybe the other members of the panel. So I'm not familiar with the Secretary of State's process for determining town abandonment. We'd just love if, Mr. Balmer, you could enlighten me on how that works.

Senator Ball, and I actually won't get too long into this, I'll explain how I know this and why I've done a lot of research into it. Under the current statute, if there has essentially been no activity, no election, no governing body, no budget adopted for a period of five years, a landowner or the county may petition the secretary of state to declare a municipality abandoned and that triggers a process that is well defined in statute and has been utilized a handful of times and it looks a lot like a court proceeding and notice has to be provided evidence is taken and then the Secretary of State or his or her designee will ultimately make the decision. So the Colorado Municipal League represents 270, used to be 271 until March 18th, 270 municipalities in the state. The three I mentioned up top, or the two plus Hartman, Bonanza City and Carbonate, are officially incorporated but have now no governing body and at least with Bonanza City and Carbonate years of inactivity what they don't have is this other element that this bill creates a very narrow entry into and that is a critical water infrastructure back in 2013 so watch County attempted to declare Bonanza City or ask petition to declare Bonanza City abandoned. And unbeknownst to Swatch County at the time, and somewhat ironically, the folks in Bonanza City had had a discontinuance election, often referred to as a dissolution election, that failed in 2009. But because they had had that election within a five-year window, Secretary of State ruled against Bonanza City. So that means the most recent one was the town of Chihuahua in Summit County in 2013. and many, many others in Douglas County from 2007. Those were all shared the same characteristic in that they met the five-year time frame and they had not had any of the activity that the statute requires. Now you're in a situation where because the town of Hartman is left with no governing body, which is unique to every other municipality in the state except for those that I previously mentioned, and no ability to hold an election because counties don't run municipal elections and the secretary of state doesn't run municipal elections. Municipalities run municipal elections. And you have this very serious issue with a failing water system that has been failing for some time And I agree there a lot of blame to go around for that It is critical to be able to allow someone to operate that system or have the chance to The only way to do that is through this legislation because, what's the polite way to say this? No one wants to help out anymore. There have been so many bridges burned by folks, both in prior governing bodies and residents, with the town of Hawley, with surrounding water districts that might be able to help. No one wants to do it. So this creates an opportunity, without saddling the county with liability, for the county, after we get past this initial period that Director DeCambris spoke about, for the county to be able to assist in establishing authority that might be able to get us there. And that's why I started by saying this gives them a chance. It's a great movie quote. He's saying, I got a chance. That's it. And this is it. There is no other path forward under the law as it stands now, and there are no other municipalities with the same situation. So thank you for indulging me.

Vice Chair Snyder. Mr. Chair, I move L-001 to Senate Bill 157.

So all this amendment does is just kind of clarifying language for the department and stuff on this bill, if it would happen to move forward. So that's basically all that amendment does.

Senator Higginson. Thank you, Mr. Chair. We're sorry we haven't been here the whole time. We've both been in an involved committee hearing across the hall, but I did hear a little bit of the witness testimony that you heard. I want to reiterate that what we're seeking to address here is a very specific issue with a very really unfortunate set of circumstances. For one of our communities, I want to recognize that it is Senator Pelton's community by district lines, but I think Senator Pelton will agree with me that the entire Arkansas Valley is part of a broader community, and Hartman is a part of that community as well. We know there are folks that still live there. We know that they're a proud community. We know that there are folks who are going to continue to live there. we would need to make sure that we're able to facilitate that in a safe and responsible manner and giving Prowers County the tools that they need to facilitate that for their residents there in Hartman, and would appreciate your aye vote on Senate Bill 157.

Thank you, Mr. Chair, and I want to thank my co-prime on this bill. Statute prevents the town of Hartman from just holding an election, or the county holding an election where they are a statutory town. This bill is a step at trying to correct that, trying to get the people water, and then maybe down the line someone can petition for an election to try to move that town forward again. I think this bill is timely. There are a couple other communities in my district that are kind of on the brink of almost the same sort of thing, and I think they're all over the state. just some of the rumors I'm hearing out there, there are other communities outside of my district that are just about there too. So I think this is a timely bill. Is it the perfect answer? No. But I think it's a step to help this community right now move forward, at least get their water back to where it's suitable to drink. So with that, I'd ask for a yes vote.

Thank you, Mr. Chair. I move Senate Bill 26-157 as amended to the Committee on Appropriations with a favorable recommendation.

But the way I read it, in order to qualify under 157, a town has to basically have no governing structures in place at all and owns and operates a water infrastructure critical for the treatment and delivery of water to its residents. So I know you mentioned some other towns that might be in a similar situation. I don't know their water status. But just because a town doesn't have a government, they would still have to wait five years. They'd have to meet both those conditions in order to qualify. So that seems pretty unique to me. I generally don't support specific legislation because I think we had some good comments from folks. We don't want to be setting precedents that may come back to haunt us, but I think this is crafted well enough that that won't be the case. So I will be a yes today. I hope you'll be open to maybe some floor amendments should other issues present themselves.

Senators Baisley? Aye.

Lindstedt? Aye.

Rich? Aye.

Mr. Chair? Aye. That passes unanimously. Good luck in appropriations. Thank you. Thank you, Mayor. That concludes our business for Senate Local Government and Housing. It is adjourned. Thank you.