Title
A Resolution of the City of Colorado Springs approving an Amended and Restated 2025 operating plan and budget for the First & Main 2 Business Improvement District
Presenter:
Allison Stocker, Senior Planner, Planning Department
Kevin Walker, Planning Director, Planning Department
Body
Summary:
This is a request to approve an amended and restated 2025 operating plan and budget for the First & Main 2 Business improvement District (“District”). The District is required to amend and restate their operating plan and budget to account for a requested bond issuance that was not contemplated in the operating plan approved in October 2024. This related bond issuance would consist of a Series 2025 Limited Tax General Obligation Bond that has a maximum principal amount of $1,484,000.00 and is to be taxed at an interest rate of seven (7) percent. The bond issuance shall be a separate action made by Council.
This item will be presented for action at the May 13th, 2025, City Council meeting along with the associated bond issuance.
Previous Council Action:
The First and Main BID No. 2 was established by election in late 2008 following approval by Council on September 9, 2008. The budget and Operating Plan for this BID has been approved annually since that time; most recently in October of 2024. In February of 2009 Council approved the issuance by this District of $2.4 Million in Limited Tax General Obligation Bonds, and those bonds were subsequently issued. On October 26, 2010, Council further approved the issuance of Public Improvement Fee Revenue Bonds, Series 2010 in an amount not to exceed $2,000,000. These bonds were issued in January of 2011. Additionally, there were changes in Governance which were approved by Council via Ordinance 14-17 in February 2014, and an inclusion in 2018 via Ordinance 18-34.
Council has heard the related bond issuance request at work session on March 24th, 2025.
Background:
BIDs are created under Colorado Statute and City Policy to finance and/or maintain certain public improvements in non-residential areas, utilizing property tax mill levy as the revenue source. BIDs are separate legal entities from the City, but their Operating Plans and the Special District Policy require City Council approval of all formal BID debt. The standard of review of the debt instruments is consistent with the Operating Plan and all applicable laws. The District’s original 2008 Operating Plan and Budget and subsequent annually approved Operating Plan and Budget stipulate a maximum of $55,000,000 in indebtedness and was amended in 2009 to reduce the maximum indebtedness to $20,000,000. Per the 2025 Operating Plan, the current debt service combined with the proposed bond issuance is approximately $20,000,000.
This BID is authorized to levy up to 50.0 mills for debt service, and 1.0 mills for operational purposes, and these mill levies are currently in place for properties within this BID.
The issuance of this debt was not anticipated in the 2025 Operating Plan and Budget for this BID (as approved by City Council in October 2024). However, the 2025 Operating Plan did anticipate pledging revenue to binds anticipated to be issued by First & Main Business Improvement District. Since the bond issuance was not contemplated in the 2025 plan, the Petitioner is required to amend and restate the operating plan before a bond issuance could move forward (Exhibit 1). The proposed bond issuance is to support public improvements within the district and are anticipated to include parking, drainage, landscaping, and street facilities. The only changes to the 2025 operating budget were to the debt service fund and capital project fund pages as shown in Exhibit E.
Financial Implications:
Pursuant to the District’s operating plan, the City Special District Policy, bond documents, the issuance of this debt does not constitute a financial obligation of the City. The documents will contain the limitations required by the City’s Special District Policy. City Charter Section 7-100 provides that the total debt of any special district may not exceed ten percent (10%) of the total assessed valuation of the taxable property within the District unless such debt is approved by at least a two-thirds vote of the entire Council.
Board/Commission Recommendation:
N/A
Stakeholder Process:
N/A
Alternatives:
City Council could choose to approve, deny or modify the proposed resolution.
Recommended Action
Proposed Motion:
Move to approve a Resolution of the City of Colorado Springs approving an Amended and Restated 2025 operating plan and budget for the First & Main 2 Business Improvement District
Summary of Ordinance Language N/A