Title
Approval of the Proposed 2021 Operating Plan and Budget for the Powers & Woodmen Commercial Business Improvement District
Presenter:
Carl Schueler, Comprehensive Planning Manager
Body
Summary:
The Powers & Woodmen Commercial Business Improvement District (BID) is a legal entity separate from the City of Colorado Springs. However, as required by State statute, it is necessary for City Council to review and approve the proposed 2021 Operating Plan and Budget for the BID.
The Operating Plan and Budget for this BID when that occurs which no changes or major activities for 2021, other than servicing existing debt and an exclusion of property that is being converted from commercial to multi-family residential zoning.
Staff notes that this BID is accumulating significant developer advances, in comparison to outstanding formally issued debt.
This BID provided a revised version of their 2021 Operating Plan to update and/or clarify the following; paragraphs 3 and 8.C, which indicates an expected property exclusion in 2021 due to the conversion of property from commercial to multi-family residential; and paragraph 6.E, additional language added to include the interest rate for the issued bonds, the bond redemption dates, and confirmation that the District will annually review the interest rate on the bonds. A red-lined excerpt from the Operating Plan is included as an attachment to this item which documents the changes made, specific to the bond refunding language.
Background:
The boundaries of this development-specific BID were established pursuant to an election in 2003. The Operating Plan for this BID indicates a possible exclusion of property in 2021 due to the conversion of the property from commercial to multi-family residential. The District anticipates that the property owner will petition to exclude the property from the District as required by statute. Under State statute, any such exclusions must be approved by separate City Council ordinance. This BID has an elected board, comprised of individuals associated with the Nor’wood Development Group. The board currently has one vacancy which the District has noted may be filled with an appointment in 2021. The BID is authorized to provide the acquisition of improvements, construction of improvements, operation and maintenance of parking facilities, roadways, lighting, driveways, public utilities, and landscaping.
This Operating Plan and Budget is provided in a format consistent with the standard template approved by Council in August 2014 for these documents.
Previous Council Action:
City Council approved formation of this BID in 2004 (Ordinance No. 04-52) and has approved the Operating Plan and Budget annually since its formation. City Council also approved the BID’s 2010 bond issuance (see below). In 2013, City Council excluded a property from this district based on its conversion to multifamily uses (Ordinance No. 13-15). State statute does not allow BIDs to tax non-commercial property.
This item was introduced in a City Council Work Session on October 12, 2020. Council had no comments or questions that were uniquely pertinent to this Operating Plan and Budget. However, this is one of the BIDs that has outstanding debt with an interest rate greater than 7.0%, and for which Council requested additional language pertaining to call dates and consideration of refinancing.
Financial Implications:
The BID issued $1,850,000 in Limited Tax General Obligation Bonds, Series 2010 for public improvements. These bonds have an interest rate of 8.5% and are subject to optional redemption beginning December 1, 2011. As described in the 2021 Operating Plan, the District will annually review the interest rates on its bonds regarding market interest rate and evaluate possibilities to refund such bonds to the extent allowed, pursuant to the bond documents. The proposed mill levy for the BID in 2021 is 26.000 mills (1.000 mill for general expenses and 25.000 mills for debt service). This remains unchanged from the prior year. This BID does not have an associated public improvement fee (PIF) at this time.
The District has an outstanding developer advance balance of $1,966,558, which accrues interest at a rate of 7%. As of December 31, 2019 the accrued interest on the developer advance balance was $412,977.
Fund balances and projected revenues are adequate to meet financial obligations. As a separate legal entity, the financial activities of the BID are separate from those of the City. Any financial obligations of this BID are specific to the property included within its boundaries and do not constitute an obligation of the City.
City Council Appointed Board/Commission/Committee Recommendation:
The BID Board of Directors recommends City Council’s approval of the 2021 Operating Plan and Budget.
Stakeholder Process:
N/A
Alternatives:
N/A
Recommended Action
Proposed Motion:
Move to approve the proposed 2021 Operating Plan and Budget for the Powers & Woodmen Commercial Business Improvement District.
Summary of Ordinance Language
N/A