Loveland's Independent News Source
Loveland, May 3, 2017

Early last month Loveland's City Council voted unanimously to extend the public debt of the
Centerra Metro Districts controlled by the McWhinney brothers Chad and Troy through their
family's development company until 2050.  In addition, Loveland's City Council added the
power to accrue compounded interest to enable the brothers to borrow another $32,000,000
on behalf of the people and businesses of Centerra.

$6,000,000 of the new debt will go towards their unfunded 2004 promise to contribute
$50,000,000 towards improving the I-25 and U.S. 34 interchange while the balance will go
largely towards improving McWhinney owned properties to develop 400 additional apartments
in Centerra.  Absent the compounding interest creating what are called "
forever bonds" the
McWhinney's were unable to refinance the over $115,000,000 already accrued by Centerra in
public debt given the lack of a credible path towards repayment by the end of their Urban
Renewal Authority in 2029.

By extending the term of Centerra Metro District's power to impose and raise property taxes
(using its own Mill Levy), Loveland's City Council opened the door to revolving public debt.  As
agreed in the resolution passed on April 4, 2017, Centerra's lenders may now grow the
al balance far beyond the original borrowed on behalf of Centerra taxpayers in the
way a revolving credit card debt can grow exponentially while the debtor payments only
covers a portion of the interest.  

Centerra - Whose Paying the Debt Back?

The phrase "No taxation without representation" originated in the 1750s as the battle cry of
American colonists in the Thirteen Colonies regarding King George III of England's imposition
of taxes upon colonists while using the power of the state to compete against them with his own
business concerns.

Not unlike the Loyalists of the 1750's, Loveland's City Council treats the McWhinney's as the
sovereigns of Centerra in the eastern half of the city.  Operating under what local attorney and
Councilman Troy Krenning referred to as a "
legal mirage" the McWhinney's have power to
incur debt, decide how to spend the tax revenues and raise future taxes upon property owners
and shoppers to repay the "public's" debt in Centerra without ever having to stand for election.

Incredibly, the McWhinney's largely exempt themselves and the building where they do
business, 2725 Rocky Mountain Ave. in Centerra from the very Mill Levies they impose on
other commercial property owners in Centerra.  This is accomplished by controlling the
boundaries of the taxing districts.

As originally conceived, Centerra was broken into primarily three taxing districts as described
in city documents but now has five,
"Centerra Metropolitan District No. 1 (control district)
Centerra Metropolitan District No. 2 (commercial), and Centerra Metropolitan District No.
3 (residential)."
 District No. 4 is the service district and the later District No. 5 (industrial).  As
designed, only property owners or residents in the tiny area determined to be District 1
boundaries may vote to elect the Centerra Metro District Board of Directors who control all the
other districts.

Centerra District No. 1 therefore operates as the Buckingham Palace of Centerra.  The only
qualified "electors" of Centerra's Board are people or entities that control the very small patch
of land determined by McWhinney to be District No. 1.  Not surprisingly, the McWhinney's own
that property and therefore appoint the Centerra Board.  All four Centerra board members,
Kim L Perry, Joshua Kane, David Crowder and Thomas Hall list McWhinney's office on Rocky
Mountain Ave. as their own work address in state disclosure documents.   Alan Pogue, the
Denver attorney who represents McWhinney before Loveland's City Council, is listed as the
official contact for the Metro Districts.  
see our story Centerra Enigma to better understand

According to Larimer County records, the property owners of Centerra's District No. 1 paid
zero property taxes towards the Centerra Metro District Mill Levy while owners in District 2
(balance of commercial properties in Centerra) paid just under $5,000,000 in 2016.

Incredibly, Alan Krcmarik, who holds the title of Executive Fiscal Advisor for the city, and
briefed the city council before their vote on April 4, (recommending to extend Centerra's taxing
authority) offered inaccurate information to council.   According to the agenda item he
prepared now preserved in the minutes of the meeting he informed Loveland's City Council,

"The Centerra Metropolitan Districts Nos. 1-5 (the “Districts”) are planning to refinance
the outstanding bonds that have been issued to take advantage of the current favorable
market conditions and provide cost savings to the Districts and their taxpayers."

In fact, only District No.1 (controlling district) is authorized to refinance the bonds while the
property owners within that district are not "
taxpayers" for the long-term bond repayment as
the McWhinney's have exempted their own controlling district property from any Mill Levy
obligations to Centerra.  Historically, the British Royals exempted their own properties from the
very taxes they imposed on their subjects though the Queen now makes a voluntary tax
payment in modern times on Buckingham Palace.

Absent from Krcmarik's presentation to Loveland's City Council on April 4, was a credible plan
on how the growing Centerra public debts will be repaid.  In 2029, when the Urban Renewal
Authority expires, Centerra's diverted property tax revenue will drop precipitously leaving few
options for repaying the remaining debt other than to increase Mill Levies on both commercial
and residential properties within Centerra.  McWhinney currently has the authority to raise the
Mill Levy on commercial properties in Centerra up to 72 mills.  However, such an extreme move
will detrimentally impact retailers paying triple net leases who are likely to simply move into
newer developments in Northern Colorado with lower property taxes.  

The most likely scenario will be missed debt payments beginning in 2030 thus triggering the
compounding interest by the lenders.  McWhinney's plan as described to Loveland's council is
to borrow even more money and use it to develop their own parcels in Centerra to increase the
overall tax base going towards Centerra's growing public debt repayments.  LovelandPolitics
asked if this isn't a "
Ponzi scheme" to one City Councilman who replied, "yes."  He proceeded
to explain he was not on the city council in 2004 so not really responsible.

Krcmarik Misinformed Loveland's City Council Over IRS Ruling Impacting Centerra

Back in 2014 Krcmarik sought an "urgent" action by Loveland's City Council on behalf of
McWhinney claiming the "
IRS policy" changed regarding government tax-free bonds thus
disqualifying Centerra from issuing government debt.  In fact, the IRS simply made a ruling on
existing law that said plans to perpetually maintain private control of a metro district by
definition means it is not a public entity.

Loveland's City Council ignored the IRS ruling that requires metro districts to be governed by
the population it taxes, at some point, to qualify for issuing tax-free government bonds.  
Instead, Loveland's City Council allowed McWhinney to slightly expand District No. 1 to include
a future multi-family residence that presumably would enable a future resident other than
McWhinney to vote for the Centerra Board of Directors.  Councilman Troy Krenning called the
scheme a "
legal mirage" and voted no against the majority of his colleagues whose questions
prior to passing the resolution revealed they believed the IRS was somehow changing its
regulations per Krcmarik's erroneous instructions

Today the residents, businesses and commercial property owners (like Promenade Shops) in
Centerra continue to pay special taxes to the various Centerra Metro Districts controlled by
McWhinney without any voice in the process.  The McWhinney brothers Chad and Troy
continue borrowing and spending public funds
for projects  considered most beneficial to their
own interests despite the 2014 IRS ruling.  see our 2014 story on the IRS ruling and
Loveland's urgent reaction
Centerra: Taxation
Without Representation
McWhinney's Unelected
Taxing Authority

Centerra District No. 2
(commercial properties
72 mills now until 2050
(council extended authority 4/4/17)

Centerra District No. 3
(residential properties)
5 mills until 2029

Centerra District No. 4

(commercial overlapping)
72 mills now until 2050
(council extended authority 4/4/17)

Centerra District No. 5
(industrial properties)  
25 mills now until 2050

General Sales Tax
Currently at 1.25% and called "improvement

Note: City of Loveland reduced sales tax rate
in Centerra by 40% to make Centerra's "fee"
sales tax less visible to shoppers beginning
in 2004.

Additional fees and "improvement" charges
not listed here
King George III and Mercantile-ism
"The lands and the people in these
countries were viewed as the property
of the king, to use and dispose of in any
manner that he considered most
beneficial to his interests."
 2014 IRS Ruling Centerra Ignores

“A governmental unit is inherently
accountable, directly or indirectly, to a
general electorate. In effect, § 103 relies,
in large part, on the democratic
process to ensure that subsidized
bond financing is used for projects which
the general electorate considers
appropriate State or local government  
purposes. A process that allows a  private
entity to determine how the bond subsidy
should be used without appropriate
government safeguards cannot satisfy §