To Haul or Not to Haul - That is the Question

Representative Libby Szabo has introduced House Bill 11-1116 (“HB 1116”) in the Colorado House of Representatives, which would regulate the ability of local governments to require residents to pay for and utilize residential waste services provided for by these municipalities. 

The foundation of HB 1116 is to protect the right of individuals to determine how they will dispose of their own garbage. In addition, the bill is aimed at protecting the existence and viability of small businesses which haul residential garbage.

HB 1116 was considered by the House Committee on Local Government yesterday and an amended version of the bill was referred to the full House for consideration which provides as follows: 

 

  1. In the event HB 1116 is signed into law, local governments after the effective date of the new law that wish to require citizens to pay for and utilize the residential waste services of that governmental entity – must first provide the electorate with an opportunity to vote on whether the municipality may be allowed to take such action. 
  2. The ballot initiative to be considered by the electorate must include a description and cost of the residential waste services being proposed by the municipality.
  3. These ballot initiative requirements would extend to a town, city, county, home rule city, city and county, home rule city and county, special district or other local governmental entity with the authority to take such action.

From a homeowner association (“HOA”) perspective, the issue of requiring all citizens residing in a municipality to pay for and utilize the residential waste services of a municipality is an interesting issue. In many cases the governing documents of associations require the HOAs to assess for and provide residential waste removal services. If a municipality were to require the same residents to pay for waste removal services from the local government, the following questions present themselves:

 

  1. Does this constitute double taxation of residents of HOAs? In other words, would a resident be required to pay assessments to their association for waste removal and the local government for the same or similar service?
  2. If an HOA decided not to provide residential waste services as required by the governing documents and to let the municipality take over this responsibility – could the directors of the association be opening themselves up for a breach of fiduciary duty claim for failure to provide the services required by the governing documents?

Interestingly, HOAs exist because the municipalities in which they are situated required the development of new residential construction in associations. The reason for this is simple – the municipalities benefit from the tax base created by these developments without having to provide the traditional services to these residences. Instead, associations become responsible for assessing members to provide for things like trash removal, snow removal, maintenance and upkeep of streets, parks and green spaces. While HB 1116 does not address the inequities for HOAs, at least it gives the residents of HOAs the ability to vote on whether a municipality should take over hauling garbage. 

 

We will be following HB 1116 from the association perspective as it proceeds through the legislative process and will provide you with significant updates.