Title
Resolution of the City of Colorado Springs authorizing issuance of debt by the Tuscan Foothills Village Metropolitan District in an amount not to exceed $1,420,000 located northwest of the intersection of Centennial Boulevard and North 30th Street.
Presenter:
Allison Stocker, Senior Planner, City Planning Department
Kevin Walker, Planning Director, City Planning Department
Body
Summary:
This is a request to approve issuance of formal debt in an aggregate amount not to exceed $1,420,000 by Tuscan Foothills Village Metropolitan District (“District”). The City’s Special District Policy and the District’s service plan require that City Council’s approval be obtained prior to issuing any debt. The issuance of this debt will be in the form of a limited tax general obligation refunding loan. Approval of this debt issuance will require a 2/3rds majority of the entire City Council (at least six affirmative votes) pursuant to City Charter Article 7-100.
In addition to the proposed bond issuance, a service plan amendment is being requested to raise the maximum allowable debt and increase mill levies. These changes to the Tuscan Foothills Village Metropolitan District service plan are being review concurrently with the bond issuance proposal but will be acted on through a separate resolution.
This property is located in City Council District No. 1.
Background:
The Tuscan Foothills Village Metropolitan District was created in 2016 to finance street improvements, sidewalks, utility lines, and landscaping within the district boundaries. The initial District boundaries consisted of seventeen (17) acres as illustrated in Exhibit C of the 2016 Service Plan, but in 2017 eight (8) additional acres were added to the District. The latest proposal to come before Council was an inclusion request in 2022 to amend the boundaries of the District and add two parcels (one being 3.115 acres and the other 1.011 acres). Presently, the approximate acreage encompassed by the District is thirty (30) acres.
The current service plan outlines a maximum authorized debt of $1,100,000. In 2019, the District was approved to issue debt up to their outline maximum of $1,100,000. The present request within the amended service plan is to raise the maximum debt permitted under the District to two (2) million dollars. The increased debt allowance will be used to support the related request to issue a bond of no more than $1,420,000 which will be considered by Council in a separate, but concurrent action. The possible 2025 Refunding Loan which consists of $1,420,000 dollars shall not contribute to the overall service plan debt limit per Section V.A.10 of the Service Plan as refunding outstanding debt does not contribute to the debt limit. As such, the maximum debt limit is adhered to through this 2025 Refunding Loan.
In addition to the increase in the maximum debt allowance, the District is requesting increases to the maximum debt service mill levy and to the maximum operating and maintenance mill levy. These changes will be reviewed currently and be a separate action by Council.
Financial Implications:
Pursuant to the District’s Service Plan, the City Special District Policy, and the loan documents, the issuance of this debt does not constitute a financial obligation of the City. The documents will contain the “limited default” provisions required by the City’s Special District Policy. These bonds will be marketed to third party investors.
The bond resolution is structured so that any risk beyond the maximum capped mill levy and the associated specific ownership tax will not accrue to the property owners.
City Charter Article 7-100 requires that the total debt of any proposed District shall not exceed ten percent (10%) of the total assessed valuation of the taxable property within the District unless approved by at least a two-thirds vote of the entire Council.
Board/Commission Recommendation:
N/A
Stakeholder Process:
The staff-level Special District Committee has been provided with access to these materials associated with this request. As of the date of this staff report, there have been no comments or questions from the Committee on this request.
Previous Council Action:
See above history.
Alternatives:
City Council has the options of approving or denying the issuance of debt. Council could also continue the item with specific directions provided to staff and the petitioners.
Recommended Action
Proposed Motion:
Adopt the resolution approving the authorization for the issuance of debt by the Tuscan Foothills Village Metropolitan District in an amount not to exceed $1,420,000 located northwest of the intersection of Centennial Boulevard and North 30th Street.