Resident generated news about Lakewood, Colorado
Resident generated news about Lakewood, Colorado
Lakewood Withheld Financial Information While Spending on Controversial Projects
On September 8, 2025, the Colorado Supreme Court ruled against Lakewood in an important court case against MetroPCS. As a result, Lakewood now owes around $42 million in tax refunds to MetroPCS and other cell phone carriers. That was big news, but what happened after the court decision is just as important.
Lakewood withheld the financial ramifications of the MetroPCS court decision during crucial budget planning. Although Lakewood didn’t know the total amount involved, the staff was aware that they would have to refund millions of dollars to the cell phone companies. Yet there was no public presentation of possible impacts during the crucial September and October budgeting months. Instead, Lakewood spent millions on controversial projects as soon as they could. Millions that could have gone toward the mandated refund.
Lakewood’s excuse for not discussing the matter sooner is that they didn’t know the full extent of the financial implications. Councilor Isabel Cruz says Councilors asked for this information many times during budgeting. Meanwhile, every month of delay the interest was accumulating on the refund owed.
Evidently, Lakewood City Manager Kathy Hodgson prioritized buying Emory Elementary over bringing the refund resolution to City Council. That choice cost an additional $1 million in interest. It also lost the public trust.
Lakewood Knew At Least $26,147,767 Needed
Even though Lakewood staff apparently did not provide full information to City Council, staff had already calculated taxes collected as part of the court case. Exhibits filed in 2022 showed that Lakewood needed at least $26,147,767 (shown below) to cover refunds if they lost. And they did lose, with apparently no preparation. (Document made available by Natalie Menten, a Board Director with the TABOR Foundation. Support them here)
In Lakewood’s press statement below, even they say it only took weeks to supply the current refund figure. The budget was passed almost two months after the court decision. Emory was purchased even later. There is no explanation for the delay.
Spending Millions on Emory
The court case was decided September 8, 2025. The 2026 budget was adopted on October 6, 2025 with no public discussion of the need for future refund funds. The very next meeting, October 13, 2025, was the first reading for City Council to spend $4 million on the controversial Emory Elementary School purchase.
Lakewood was desperate to close the Emory deal as quickly as possible.
Residents were never told that almost two months prior, Lakewood had lost this major lawsuit and could be expected to pay a large amount of money.
There were months between the September decision and the January TABOR vote in which Council could have stopped spending on pet projects like the Action Center and Navigation Center and had millions ready to pay for this refund. Council had the opportunity to do so and did not.
Councilors Isabel Cruz was glad that so many of the projects they wanted were still getting done. She did not mention any specific project, such as a voter-approved TABOR projects or controversial Council projects.
City Manager Kathy Hodgson was ultimately in charge of the decision not to tell City Council or the public about the financial liability details while closing a deal she personally originated.
City Manager Kathy Hodgson also personally brainstormed the Emory deal in 2022. Coincidentally, 2022 was the same time of the MetroPCS lawsuit.
Another Self-Created Emergency
Instead of being upfront about the upcoming costs, Lakewood withheld the amount until THE VERY NEXT MEETING after the Emory Elementary School deal was finalized. Councilor Roger Low congratulated everyone on closing the Emory deal before the end of the year. His congratulations included the city staff and attorney’s office who certainly knew about the financial liability.
After waiting until Lakewood was ready to discuss the refund, it suddenly became urgent to pass the budget appropriation quickly. Lakewood Chief Financial Officer Holly Bjorkland said interest on the refund is accumulating at about $240,000 per month. Lakewood currently owes about $13 million in interest, including the time spent waiting for the Supreme Court decision after they lost the first time.
That means that holding off on this resolution since September 8, 2025 cost Lakewood almost $1,000,000. This figure reflects interest that accrued after the Supreme Court’s final ruling and does not include interest accumulated during earlier stages of the case.
No “Material Liability” Disclosed
This lawsuit did not appear overnight. As Lakewood resident Lenore Herskovitz explains, the case began in 2022. In April 2024, Lakewood lost in District Court. The City appealed to the Colorado Supreme Court, which ruled that the District Court got it right in its final ruling on September 8, 2025.
By the time voters were being urged to permanently surrender their TABOR refunds in 2024, the City had already lost once in court and knew that millions of dollars were potentially at stake. Yet during budget hearings, public meetings, and ballot discussions, there was no meaningful disclosure that a massive financial liability loomed.
In the City’s Annual Comprehensive Financial Report for the year ending December 31, 2024, page 82, the City Attorney stated:
“The City is named in numerous lawsuits. In the opinion of the City Attorney, none of these lawsuits are expected to result in a material liability… or have a material effect on the City’s financial statements.”
That statement was made after the City had already lost in District Court. The Colorado Supreme Court agreed with the District Court.
If City leadership truly believed the liability would not be material, that reflects stunning misjudgment. If they believed otherwise and failed to disclose it, that reflects a possible premeditation that TABOR funds could be used for financial relief. Either way, the public was left in the dark.
The Bottom Line
Lakewood delayed addressing a known tax-refund obligation after the September 8, 2025 Supreme Court ruling while continuing discretionary spending. That choice cost taxpayers nearly $1 million in additional interest, cost millions more in non-voter-approved projects, and undermined public trust.