The Colorado Supreme Court issued a highly anticipated ruling Dec. 11 in UMB Bank v. Landmark Towers Association that has the public finance industry sighing with relief, while some others remain concerned about the difficulty of challenging elections where electors were deceived.
The case stems from a special bond and tax election challenged under the Taxpayer Bill of Rights that set a group of condominium owners in Greenwood Village against the organizers of a special tax district intended to fund the building of a new residential complex nearby. The Supreme Court ruled the homeowners association’s subsequent challenge to the bond and tax election, which took place more than three years after the district’s creation and the vote, was time barred and sent the case back to the Court of Appeals.
But an initial ruling from the Court of Appeals in 2016 invalidated both the election and the creation of the district. The decision froze pending bond sales in metropolitan tax districts around Colorado out of fear the ruling would open the door to a flood of other challenges to TABOR elections. In response, the Colorado legislature unanimously passed Senate Bill 16-211, which restricted litigation to challenge the qualifications of electors who participated in elections to votes conducted before April 21, 2016.
“The Supreme Court … provides a significant amount of comfort and finality for those in the industry to feel comfortable to move forward with their financing,” said Neil Arney, a partner with Kutak Rock who represented petitioners UMB Bank and Colorado Bondshares. That comfort comes from knowing that anybody who wants to challenge the process by which the elections were maintained has to do that within a 10-day period. He added the public finance industry had kept its eye closely on the case because of the consequences the initial Court of Appeals decision had.