The Colorado Court of Appeals has ruled construction contracts, payment records and other documents from the InterQuest North Business Improvement District in Colorado Springs must be disclosed.
The plaintiffs in the case, Timothy Leonard and the Deepwater Point Company of Evergreen, have been seeking the records through the Colorado Open Records Act since 2019.
“This is a significant victory for taxpayers and the public who wish to review and inspect exactly how their tax funds are being spent by a developer-controlled district board on the construction of public improvements,” Leonard said in an email.
After the District Court issued orders in September 2021 that INBID, controlled by Norwood Development Group, withhold some records of its activities,
He and Deepwater asserted that INBID withheld public records regarding expenditure of public funds in violation of CORA. INBID’s board was dominated by Norwood officials and hired Norwood as a contractor for infrastructure work and issued bonds that were then purchased by Norwood.
“Construction contracts, plans, change orders, and invoices, cannot be hidden by developer-controlled special district boards from the taxpayers who want to see how their money is being spent,” Leonard said in a release regarding the appellate court ruling. “In this district, the developer is the landowner, board member, landlord, installer of public improvements, property manager, and holder of all the $25M of tax-exempt bonds. The taxpayers deserve some transparency and accountability.”
Ian Speir of Nussbaum Speir Gleason PLLC, attorney for Leonard and Deepwater, said, “The Court reaffirmed CORA’s mandate of government transparency, observing that when requested records are tied to public funds, ‘CORA’s purpose is at its zenith.’ This decision should put an end to the practice of using third parties to suppress public expenditure documents from public view.”
Chris Jenkins, CEO of Norwood, didn’t respond to an email request for comment.
The area at issue surrounds or abuts Scheels All Sports store in North Colorado Springs.
Before the lawsuit began, INBID required submission of contracts, pay requests, change orders and the like to the board for projects it funded. After the litigation got underway in May 2020, the district adopted a new resolution that states that the board accepts “the District Engineer’s opinion in lieu of documentation....”
When Leonard sought invoices and payment information from the district, the district claimed it didn’t possess those records, the engineer did. The District Court concluded that if the district didn’t have such documents, even if they’re in the possession of InterQuest and other business entities connected to the improvements, they don’t have to be produced.
“The court reasoned that it did not have ‘authority to order the District to obtain and produce or disclose the requested documents from the private engineers,’” the Court of Appeals decision noted about the lower court’s ruling that the appellate court reversed.
Noting the Legislature has declared that “all public records shall be open for inspection by any person, at reasonable times,” and that public records are “writings made, maintained, or kept” by public agencies, the Court of Appeals ruled that “[T]he requested documents are so intimately related to public funds, CORA’s purpose is at its zenith.
“To provide public improvements, the District, a public entity, has paid the Developer approximately $15 million in public funds. The construction contracts and payment records obviously shed light on both the propriety and reasonableness of those payments. These requested documents therefore clearly involve ‘the receipt or expenditure of public funds,’” the appeals court ruled.
The question then becomes whether the records in question were “made, maintained or kept” by the district. Citing a previous case decided by the Colorado Supreme Court, the ruling noted that under CORA one “keeps” a “writing” when the writing is “in his care, custody, or control” or “if he directs another to have care, custody, or control of the document.”
It matters not that INBID never accessed the documents it required the engineer to maintain, the court said. Rather, the resolution accepting the engineer’s opinion in lieu of documentation “proves that the District directed the Developer to keep these documents.”
Hence, the court reversed the District Court’s judgment and remanded the case back to the District Court “for further proceedings,” including whether “statutory redactions to the records are necessary” and to determine how much in attorney fees INBID must pay to Leonard and Deepwater.
While the District Court awarded $42,000 in attorney fees to Leonard and Deepwater related to the portion of the initial lawsuit in which they prevailed (obtaining emails that had been initially withheld), now they are able to recover all their attorney fees, because the appellate court sided with them and overturned the District Court’s judgment.
Leonard said his attorneys are due a total of more than $62,000.