The developers promoting the county’s largest subdivision sued the Montezuma County Commissioners this week, arguing that the county’s requirement that the developers help provide fire protection for the subdivision violated state law.

Redstone Land Company is attempting to back out of a deal it had agreed to with the commission and the Mancos Fire District that required Redstone to secure a $75,000 letter of credit and a half-acre of land to help construct a new fire substation at the company’s Cedar Mesa Ranches.

The 2,000-acre subdivision, surrounded by piñon-juniper forests, is located north and east of the Mesa Verde National Park entrance. It includes 160 lots, several of which are now being developed.

The Mancos Fire Protection District warned that protecting those houses in the event of a wildfire meant building a fire substation nearby, and Redstone agreed to help with that project before the commissioners approved the subdivision on Sept. 8, 1999.

But now the company through its attorney, Kelly McCabe, is arguing that those conditions are illegal according to Colorado law, even though they were initially agreed to by Redstone. According to the complaint, filed Monday in District Court in Cortez, the deal made by the Mancos Fire Protection District and the commission was in violation of Colorado law "because it requires the owner of a private property to dedicate real property to the public, and further requires the payment of money to a public entity" on a discretionary basis.

The complaint argues that the county has not required any other subdivisions to provide funds or property for fire protection, and that "there were no duly adopted standards for application and enforcement of such conditions in Montezuma County" at the time of the deal.

The commissioners, along with Montezuma County Attorney Bob Slough, were surprised by the lawsuit, and argued Monday that because Redstone freely entered into an explicit arrangement with the commission and the fire district to deed the half-acre and to secure funding, the deal was legally appropriate.

"I believe we may be able to get the land and the $75,000," Slough told the commission. "Our strongest argument is that we have an agreement with Redstone, but it is ultimately up to the judge to say that there is one here."

That agreement was initially followed through on by Redstone, who even went so far as to secure an irrevocable letter of credit for $75,000 from Litchfield Financial Corporation, which named the county and the Mancos Fire Protection district as beneficiaries.

Last November, Redstone requested that the commission cancel the letter of credit it requested in April 1999 as a condition of subdivision approval, but the commission denied that request, setting the stage for the lawsuit. Redstone has since withdrawn its promise to provide a half-acre of land until the courts make a decision on the case.

McCabe approached the commissioners on May 8 with a settlement proposal, requesting that $35,000 be returned back to Litchfield, but the Mancos Fire District did not respond.

The fire station will cost approximately $150,000 in total, with the remainder coming from grants sought by the Mancos fire district.

What to do with the money while the case is in court also had the commission stymied Monday, because if it is handed to the Mancos Fire District and the judge requires it to be repaid, it is unclear if the county could get the money returned.

"If we hang onto the money, the fire district may sue us also to get it," said Commissioner Kent Lindsay.

In order to distance themselves from a dispute they feel is between Redstone and the Mancos Fire District, the commission voted on Monday to transfer the money into what is called an interplea account, which allows the courts to ultimately decide what happens to the funds.

Placing the funds into such an account will likely draw the Mancos Fire District into the lawsuit, which the commission felt was appropriate.

"They need to be a part of this," Story said. "That way, if (the judge) ruled against the county then the district can share in that loss."

In a June 9 letter to the commission, the fire district requested that the money be paid in order to secure a substation in a hazardous area that they say is too far from a current firehouse to guarantee a quick response time. The area under consideration is known for frequent lightning strikes and is rife with tinder dry undergrowth, the district said.

"As you are aware, a subdivision the size of Cedar Mesa Ranches will have a major impact on the fire protection capacity of the Mancos Fire Protection district," wrote Julio Archuleta, board president of the district. "If fully constructed, the subdivision will bring in 33 percent more homes into the district in need of fire protection. Currently, the fire station in Mancos, eight miles away, is the closest fire station in the district to the subdivision. The $75,000 will assist in the construction of a fire station on property in the subdivision Redstone agreed to convey to the District."

Redstone is seeking a declarative judgment, rather than damages, on the legal issue of requiring developers to pay impact fees. Whether requiring impact fees, such as a for a fire station in a rural subdivision, is legal has not been adequately addressed by the state legislature. Existing state laws are not always clear-cut, allowing fees to be levied in some instances, such as with roads, but not in others, such as for school districts. The issue of impact fees for other special districts, such as fire, recreation and libraries, has not been adequately addressed and is considered a gray area under Colorado law.

Redstone maintains that until more homes are built in the subdivision the fire substation is not needed, according to McCabe, and that in the future when one is required, the increase in taxes derived from the new homes would be sufficient to build a new station.

The commission discussed the potential for more lawsuits regarding the lack of fire protection from home and land owners who purchased lots based on the stipulation that a fire station would be built nearby. The proximity of a fire-station to homes also determines insurance rates.