LovelandPolitics
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| IRS Correspondence with Centerra The Centerra Metro Districts are really are group of bank accounts controlled by developer McWhinney. Centerra has no offices or employees so is controlled entirely by McWhinney. |
Loveland, October 26, 2019
This story is not as complicated as some might pretend and begins with a 2014 hasty action
by Loveland's City Council to assist McWhinney's Centerra with an IRS problem see our
original story which is copied by the IRS in their February 6, 2015 correspondence to
Centerra.
To the right of this story are links to all the correspondence we have obtained between the
IRS and Centerra (essentially McWhinney).
Developer McWhinney intends to keep tight control of the public monies raised through fees
and diverted taxes of the Centerra Metro District (estimated to be $600 million) at least for 25
years and have never made that a secret. The problem is the IRS doesn’t allow privately
controlled entities to issue tax exempt bonds. McWhinney’s tightly controlled Centerra Metro
Districts have now issued approximately $188 million in “tax free” municipal bonds.
A few years ago McWhinney persuaded the IRS through a series of attorney letters that
Centerra meets the definition of being a public entity (despite only McWhinney family and
employees serving on the board), in part, using the argument the Loveland City Council is
elected and provides oversight of the Metro Districts; which they don’t.
On October 22, 2019 Loveland Mayor Jacki Marsh, frustrated by McWhinney's reluctance to
share critical financial information about the Centerra Metro District with the city and the
efforts of her colleagues to frustrate her attempts at oversight, sent an email to the IRS
disclosing her belief that key elements of the information contained in the correspondence
between the IRS and McWhinney from 2014 to 2015 contained false information.
We are providing our readers the IRS correspondence (essentially questions) to Centerra by
the IRS and the McWhinney hired attorney's responses. Essential to McWhinney's defense
are the following three assertions that Mayor Marsh is challenging;
1. Even if Centerra is controlled by the developer instead of a board elected by residents,
businesses and landowners of Centerra, it is essentially controlled by an "elected" public
body because the Loveland City Council is providing that oversight of expenditures.
2. All the monies collected and spent by the metro districts are used for public purposes.
Conspicuously absent from the IRS disclosures is the RSF (Retail Sales Fee) which is
collected by the City of Loveland and returned to McWhinney without any accounting.
McWhinney has refused to answer questions regarding the RSF claiming it is not part of the
public metro districts when Mayor Marsh has questioned their representatives in public
meetings.
3. In 2014 Loveland's City Council, at McWhinney's request, added residential zoning to the
only controlling district (District #1) as part of an effort to begin allowing at least some
residents to vote in upcoming Centerra Metro District elections regarding the increasing
public debt and where the monies are being spent. It is now almost 2020 with no residents
participating in any Centerra board votes. McWhinney's solution is to only allow an
apartment building where they likely choose the tenants to vote sometime after 2021 as their
back-up plan.
After two years of diligent efforts and considerable personal expense, Mayor Marsh finally
obtained the "check register" or essentially expenditures for Centerra over the past five years
as that information has not previously been provided to city staff or any elected
representatives.
Contrary to Councilman John Fogle's regular public assertions that the entire Centerra Metro
District budget simply goes to debt repayment, instead only approximately $12 million of the
$20 million collected in both property taxes and sales fees last year went towards debt re-
payment. The other approximate $7-8 million went into McWhinney's bank accounts for
various "services" and a number of their closely associated companies providing services to
Centerra. McWhinney employees conduct the "bids" on behalf of Centerra and not
surprisingly McWhinney wins the contracts.
Currently, Centerra is only paying interest payments on their latest public debt of $11 million.
Mayor Marsh has been an advocate of allowing public control of Centerra Metro Districts (as
required by law) instead of the current arrangement which former Loveland Councilman Troy
Krenning and local attorney described as a "legal mirage" of public control.
The McWhinney's have spent thousands of dollars in the current election cycle to oust
Loveland Mayor Jacki Marsh. To put a fine point on it, Troy McWhinney even waived Dave
Clark for Mayor signs at the corner of 287 & Highway 34 last Saturday as they are leaving no
stone unturned to control every voice on Loveland's City Council.
This story is not as complicated as some might pretend and begins with a 2014 hasty action
by Loveland's City Council to assist McWhinney's Centerra with an IRS problem see our
original story which is copied by the IRS in their February 6, 2015 correspondence to
Centerra.
To the right of this story are links to all the correspondence we have obtained between the
IRS and Centerra (essentially McWhinney).
Developer McWhinney intends to keep tight control of the public monies raised through fees
and diverted taxes of the Centerra Metro District (estimated to be $600 million) at least for 25
years and have never made that a secret. The problem is the IRS doesn’t allow privately
controlled entities to issue tax exempt bonds. McWhinney’s tightly controlled Centerra Metro
Districts have now issued approximately $188 million in “tax free” municipal bonds.
A few years ago McWhinney persuaded the IRS through a series of attorney letters that
Centerra meets the definition of being a public entity (despite only McWhinney family and
employees serving on the board), in part, using the argument the Loveland City Council is
elected and provides oversight of the Metro Districts; which they don’t.
On October 22, 2019 Loveland Mayor Jacki Marsh, frustrated by McWhinney's reluctance to
share critical financial information about the Centerra Metro District with the city and the
efforts of her colleagues to frustrate her attempts at oversight, sent an email to the IRS
disclosing her belief that key elements of the information contained in the correspondence
between the IRS and McWhinney from 2014 to 2015 contained false information.
We are providing our readers the IRS correspondence (essentially questions) to Centerra by
the IRS and the McWhinney hired attorney's responses. Essential to McWhinney's defense
are the following three assertions that Mayor Marsh is challenging;
1. Even if Centerra is controlled by the developer instead of a board elected by residents,
businesses and landowners of Centerra, it is essentially controlled by an "elected" public
body because the Loveland City Council is providing that oversight of expenditures.
2. All the monies collected and spent by the metro districts are used for public purposes.
Conspicuously absent from the IRS disclosures is the RSF (Retail Sales Fee) which is
collected by the City of Loveland and returned to McWhinney without any accounting.
McWhinney has refused to answer questions regarding the RSF claiming it is not part of the
public metro districts when Mayor Marsh has questioned their representatives in public
meetings.
3. In 2014 Loveland's City Council, at McWhinney's request, added residential zoning to the
only controlling district (District #1) as part of an effort to begin allowing at least some
residents to vote in upcoming Centerra Metro District elections regarding the increasing
public debt and where the monies are being spent. It is now almost 2020 with no residents
participating in any Centerra board votes. McWhinney's solution is to only allow an
apartment building where they likely choose the tenants to vote sometime after 2021 as their
back-up plan.
After two years of diligent efforts and considerable personal expense, Mayor Marsh finally
obtained the "check register" or essentially expenditures for Centerra over the past five years
as that information has not previously been provided to city staff or any elected
representatives.
Contrary to Councilman John Fogle's regular public assertions that the entire Centerra Metro
District budget simply goes to debt repayment, instead only approximately $12 million of the
$20 million collected in both property taxes and sales fees last year went towards debt re-
payment. The other approximate $7-8 million went into McWhinney's bank accounts for
various "services" and a number of their closely associated companies providing services to
Centerra. McWhinney employees conduct the "bids" on behalf of Centerra and not
surprisingly McWhinney wins the contracts.
Currently, Centerra is only paying interest payments on their latest public debt of $11 million.
Mayor Marsh has been an advocate of allowing public control of Centerra Metro Districts (as
required by law) instead of the current arrangement which former Loveland Councilman Troy
Krenning and local attorney described as a "legal mirage" of public control.
The McWhinney's have spent thousands of dollars in the current election cycle to oust
Loveland Mayor Jacki Marsh. To put a fine point on it, Troy McWhinney even waived Dave
Clark for Mayor signs at the corner of 287 & Highway 34 last Saturday as they are leaving no
stone unturned to control every voice on Loveland's City Council.
| LovelandPolitics EXCLUSIVE Mayor Jacki Marsh email to Internal Revenue Agent Kim H. Chau October 22, 2019 IRS Agent Kim H. Chau letter to Centerra Metro Districts October 21, 2014 Centerra Outside Counsel Larry Carlile Response to IRS November 4, 2014 IRS Agent Kim H. Chau letter to Centerra Metro Districts February 6, 2015 Centerra Outside Counsel Larry Carlile Response to IRS March 9, 2015 IRS Agent Kim H. Chau letter to Centerra Metro Districts May 22, 2015 Centerra Outside Counsel Larry Carlile Response to IRS June 16, 2015 |
