State Representative State Representative

DANEYA ESGAR CHRIS HANSEN

Colorado State Capitol Colorado State Capitol
200 East Colfax Avenue 200 East Colfax Avenue
Denver, Colorado 80203 Denver, Colorado 80203
Capitol: 303-866-2968 Capitol: 303-866-2967
daneya.esgar.house@state.co.us chris.hansen.house@state.co.us

COLORADO
HOUSE OF REPRESENTATIVES
State Capitol
Denver
80203

July 18, 2018

Hon. Walker R. Stapleton

Colorado Department of the Treasury
200 E. Colfax Avenue, Suite 140
Denver, CO 80203

Dear Treasurer Stapleton:

As members of the Capital Development Committee and the Colorado General Assembly, we
write to you to express our concern over your office’s delay in issuing the certificates of
participation authorized under the recently passed, bipartisan Senate Bill 17-267.

Our state’s aging infrastructure is in dire need of improvement and repair and any delay affects
our economy, our businesses and the hardworking people of our state.

In May 2017, the General Assembly passed SB17-267 that authorized $1.8 billion in certificates
of participation to mend Colorado’s dilapidated transportation system and deploy much needed
funds for repairs and critical safety upgrades to state operated buildings and institutions of higher
education. The first tranche of the certificates of participation (COPs) would generate $380
million for transportation and $119 million for these high priority capital construction and
maintenance projects.

On June 18, 20181, nonpartisan staff for the Capital Development Committee informed the
committee that the Treasurer’s office would not be promptly issuing the COPs designated by
SB17-267 as originally planned. Under statute, the COPs are eligible to be issued at the start of
the 2018-19 fiscal year, which began July 1, 2018. We believe it is in the best financial interest
of the state to move forward on these projects, and are very concerned about the delay.

Needlessly delaying extremely urgent projects could put the physical and financial health and
safety of Coloradans at risk; these critical projects have been prioritized and should be expedited.
Furthermore, delays could unnecessarily waste tax dollars as interest rates rise and horizontal and
vertical construction costs continue to escalate. Some estimates of cost escalation rates for
delayed capital construction projects are as high as six percent per year. In order to make the best
use of public funds and get these critical projects started rapidly, the COPs should be issued as
soon as possible.

1 https://leg.colorado.gov/sites/default/files/images/18cdc_0618rev_agenda.pdf
The projects that are anticipated to use funding from SB 17-267 have largely indicated that they
plan to start either design or construction of their projects in the fall. Delays in funding create the
most problems for weather-dependent construction projects and many of the project coordinators
indicated that they expect delays to increase costs. Delaying funding will also cause further
deterioration in outstanding maintenance projects, causing safety concerns for students, state
employees and any Coloradan using these public buildings.

To highlight what is at stake, here are some examples of projects that have been prioritized for
funding due to urgent needs for repairs and upgrades:

• Critical repairs to roofs, elevators, fire alarms, security and HVAC systems for mental
health facilities across the state are in jeopardy of further deterioration and in some cases
pose a safety risk if the Treasurer’s office continues to delay funding.
• The Department of Military and Veterans Affairs needs to begin a project to mitigate the
flooding risk at one of their sites.
• Pikes Peak Community College was approved for emergency funding to reroof sections
of the Aspen building, where students apply for financial aid, receive learning assistance
and tutoring, and access disabled student support services. PPCC is also slated for
improvements to the fire sprinkler and alarm system, and cited that delays would cause a
safety risk.
• At Colorado Mesa University, critical electrical projects may be suspended if funding is
delayed, and the further delay of three roof repair projects will cause costs to escalate.
• The Department of Corrections could lose the use of cooling systems at six warehouses
and face the deterioration of many roofs, boilers, plumbing, and windows across the state,
making repairs more extensive than needed.
• Delays in funding will impact economic development in areas of the state that are still
recovering from the recession. Pueblo Community College needs to renovate their
welding shop to prepare job seekers for high-demand, good-paying positions. And
delaying funding for the Colorado State Fair’s repairs to water, sanitary, and storm water
infrastructure will impact readiness for the 2019 fair.
Your office communicated to members of the Capital Development Committee that your original
appointed bond counsel advised against COP issuance due to a lawsuit filed by the Tabor
Foundation in 2015, later amended to include the funds authorized by SB 17-267. However, the
General Assembly and the Governor provided clear authority and direction to fund these vital
projects and no injunction has been granted that would prevent the COPs from moving forward,
so your office should not delay the issuance of funding based on ideology or this pending lawsuit
any further. This lawsuit could take years to resolve and these pivotal repairs cannot be delayed
without causing price escalation and risking the health and safety of Coloradans.

The committee received notification yesterday that you are not planning to attend the upcoming
CDC meeting as requested in a previous letter sent by the entire bipartisan committee. We
respectfully ask that you reconsider, because these important projects deserve your attention. We
request that you respond to the questions posed in the prior letter as well as the following
questions in-person at the next Capital Development Committee meeting on July 23, 2018:
 1) Why is your office delaying funding for these critical maintenance projects? Please
provide a timeline of your decisions regarding the issuance of COPs since the Governor
signed SB 17-267 into law on May 30, 2017.
2) Did your office consider the adverse financial implications of increased construction
costs, delays in construction schedules, and rising inflation that would result from
delaying the issuance of the COPs?
3) Did your office consider that any delay in the issuance of the COPs required by SB17-
267 would have a direct impact on the health and safety of students, state employees, and
the public?
Thank you in advance for the consideration of these requests. We look forward to hearing from
you promptly on this important matter.

Sincerely,

State Representative Daneya Esgar State Representative Chris Hansen

Vice-Chair, Capital Development Committee Member, Capital Development Committee