The Town of Castle Rock and the Douglas County School District are at odds over a proposed ordinance change that would give the town greater discretion over how land and cash dedicated for school facilities can be used.

Under Castle Rock’s municipal code, new developments must dedicate land or pay cash-in-lieu fees for public services, including parks, water facilities, fire stations, police stations, town administrative facilities, trails and schools. The code stipulates that the land and cash fees “shall be used for its intended public purpose.”

On Aug. 18, the Castle Rock Town Council approved the first reading of a code amendment that would allow the town to use the land and cash designated for school facilities for other public purposes if certain conditions are met, regardless of its original designation in a development plat.

The school district has raised concerns over provisions that specifically affect school-related land and cash dedications.

Under the current code, residential subdivisions must provide land or cash-in-lieu payments for school facility needs generated by a proposed development, similar to payments for water and emergency services. 

The land and cash are conveyed to the town and held until the school district requests the funds or land for school construction.

The town currently has the option to provide compensation for land conveyed if officials determine the property would be better suited for another public purpose.

The proposed amendments would maintain the existing structure in which the town holds the land and cash, but would add requirements the district must meet before receiving the property or funding. If those requirements are not met, the town could repurpose the land or cash for another public use.

Land ‘unsuitable’ for schools?

Castle Rock officials said the proposed changes are intended to address several properties currently held for school purposes that they believe are unsuitable for future school development because of their size, location, proximity to other schools or changing community needs.

Officials also said they want to provide certainty to nearby residents about future land uses. The town has identified 13 undeveloped sites dedicated for future school facilities that are currently managed by the town.

The new ordinance would place a number of provisions on the school district’s access to the land and cash. 

Under the proposed ordinance, the town would retain all land conveyed for school purposes until DCSD notifies the town of its intent to construct a school, obtains approval of a site development plan and demonstrates that it has sufficient funding to complete construction.

If, within 10 years of the conveyance, the district does not satisfy those requirements, its rights to the land could be extinguished following a public hearing and Town Council decision. The town would then retain the property for parks, recreation or open space.

If the district notifies the town that it intends to build a school on land conveyed by the town or purchased with cash-in-lieu payments, and the town transfers the property to the district, the district would have three years to complete construction. If it fails to do so, the property could revert to town ownership.

The proposal also changes how the town handles cash-in-lieu payments.

The current ordinance states that cash provided for school purposes “will be utilized by the town to purchase land for conveyance … when requested.”

The proposed language states that the cash “may be utilized by the town to purchase land for conveyance … if requested.”

District officials concerned with proposed changes

Douglas County School District Superintendent Erin Kane sent two letters to the Town Council outlining the district’s concerns and requesting a delay in approving the ordinance until district and town leaders could meet.

“If adopted, it would strip the Douglas County School District of critical resources that developers set aside specifically for students in the Castle Rock community and will substantially, if not completely, prevent the School District from building new schools in Castle Rock,” Kane wrote.

Kane said the changes would allow the town to take property and funds currently held for the district without compensation. 

School officials noted that the town can already repurpose land that has been dedicated for school sites if they pay the market value of that property so that the school district gets money in exchange for the dedicated land. 

“Developers, and ultimately homebuyers, paid these fees expecting them to support school construction, not to sit in municipal coffers indefinitely or to support other uses,” Kane wrote. “The Ordinance would let the Town collect money under the banner of school funding while spending it however it chooses.”

Kane noted that a new elementary school costs about $70 million, while a new combined middle and high school can exceed $100 million.

The ordinance would effectively prohibit construction of new schools in Castle Rock because of the 10-year extinguishment provision and three-year construction deadline, Kane asserted. She said school sites are often acquired years before community growth creates a need for a new facility.

During a recent DCSD Board of Education meeting, Kane cited the district’s new school in Sterling Ranch as an example. According to Kane, the district first sought voter funding in 2022 but did not secure approval until 2024. The school is not expected to be completed until 2027.

School construction projects routinely take four to six years or longer from planning to completion, she said.

Changes could violate Colorado Constitution?

Kane also argued that the funding requirements for conveying property to the district are impractical. Because the district typically funds school construction through voter-approved bonds, she said it cannot secure financing without first identifying a specific school site, but cannot secure a site without first obtaining the funding.

“By the time the School District could navigate a bond election and prove it has funds in hand, any viable site would be sold to another buyer,” Kane wrote.

Kane further argued that applying the ordinance to existing land dedications would be unconstitutional.

“The Town cannot now unwind those dedications without violating the Colorado Constitution,” she wrote.

Kane recommended several revisions, including meetings between town and district leadership, retention of mandatory language governing cash fees and a grandfather clause protecting existing school-designated land and funds.

During the board meeting, district officials noted that school planning often extends 20 years or more into the future. Board members acknowledged concerns about vacant properties but said they wanted alternative solutions that would not give the town sole authority to redirect land and money dedicated for schools.

Board members also pointed out that some school sites identified in district capital plans as far back as 2015-16 are only now reaching stages where development may occur.

The board voted to direct Kane to invite Town Council members to meet with district officials to discuss the ordinance before final approval.

The Town Council approved the ordinance on first reading by a 5-2 vote. Council members Ryan Hollingshead and Kevin Bracken voted against the measure.

“I don’t understand the thinking, and I just worry that some of this may be a little short-sighted,” Hollingshead said.