Title
A Resolution Approving the Issuance of Debt by the Copper Ridge Metropolitan District of Tax-Exempt Bank Loan, Series 2025, in the Estimated Principal Aggregate Amount of $50,906,000.
Related Items: N/A
Council District # 2
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 $50,906,000 by the Copper Ridge 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 tax-exempt bank loan. The timing of the proposed bond issuances is to support the funding of future public improvements such as the Flying Hose Club Drive Bridge, Ridgeline Drive Bridge, a pedestrian overpass and portions of road connecting Powers Boulevard to Interquest Parkway.
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.
Background:
The Copper Ridge Metropolitan District was created in 2008 to finance site improvements. The District consists of approximately 234 acres adjacent to North Gate Boulevard and Voyager Parkway. The District included all land considered for inclusion in the Initial District Boundary Map (Exhibit C-1), and as such no Future Inclusion Boundary Map was provided.
Pursuant to the District’s Service Plan (Resolution 51-08), the District has a maximum debt authorization of $85 million dollars. Since the Service Plan was approved before the latest Model Service Plan in 2022, the maximum mill levies are based on old Model policy. Presently, the maximum debt mill levy is 30 mills for residential land uses and 50 mills for commercial land uses. The operations and maintenance mill levy is capped at 10 mills. The District has retained the same boundaries since the creation of the District and no amendments to the Service Plan. A number of debt issuances have occurred between 2013 and the present day to fund improvements and refund old debt.
The scheduled improvements to be financed through the tax-exempt loan are planned in collaboration with Pikes Peak Regional Transportation Authority (PPRTA), the Colorado Springs Urban Renewal Authority (URA), and City Public Works. The listed partner organizations are aware of the requested debt issuance and support the request as it will contribute to their shared goals. The improvements below are all apart of Phase Two of the Power Boulevard Extension Reimbursement Agreement and will be funded by this loan.
• Flying Horse Club Drive Bridge over future State Highway 21 (Powers Boulevard).
• Ridgeline Drive Bridge over State Highway 21 (Powers Boulevard).
• Pedestrian Overpass (west of Flying Horse Club Drive) over State Highway 21 (Powers Boulevard).
• State Highway 21 (Powers Boulevard) from Voyager Parkway to State Highway 83 (InterQuest Parkway)
The District’s pre-authorized debt maximum is set at $85 million dollars. As of now, the District holds approximately $40.4 million in debt, leaving a remainder of $44.5 million available toward the maximum debt limit. However, the District intends to utilize approximately $30 million of the $50,906,000.00 proposed tax-exempt loan to refund the outstanding Series 2023 loan. This allocation of $30 million toward refunding does not count toward the maximum pre-authorized debt. With portions of the loan being used toward refunding, the remaining amounts will be used to finance the will be counted toward the maximum pre-authorized debt. With the $40.4 million in existing debt and the remaining balances of the proposed loan, the District anticipates having approximately $15 million remaining in pre-authorized debt. Additional information can be consulted in the “2025 Loan Agreement” provided by the petitioner.
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 limitations required by the City’s Special District Policy. This debt is being arranged with a third-party financial institution, but it has not been actively marketed. A letter has been provided by an external financial advisor with an opinion regarding the “fairness and feasibility of the interest rate and the structure of the debt”.
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:
The District was established by an election in May 2008 following adoption by Council of a resolution authorizing creation of the District (Resolution No. 51-08). In 2010 City Council approved an urban renewal plan for the area where the District is located. In 2013, Council approved an initial debt issuance of $1,850,000 in the form of a general obligation loan (Resolution No, 111-13). In 2014, Council authorized issuance of up to $3,000,000 in debt as an additional loan (Resolution No, 63-14). On June 14, 2016, Council approved issuance of up to $11,250,000 in debt in the form of a limited tax general obligation loan (Resolution No, 61-16). On February 13, 2018, Council authorized issuance of up to $6,000,000 in additional debt in the form of another bank loan (Resolution No. 8-18).
On May 28, 2019, Council approved Resolution No, 52-19 authorizing this debt to be issued an amount not-to-exceed $61,000,000. On September 10, 2019, Council approved a request to increase that authorization to up to $70,000.000 (Resolution 84-19), and an additional $20,770.00 was approved by Council on July 25th, 2023 (Resolution 98-23). Council has also approved several actions pertinent to the urban renewal designation for this area.
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:
Move to adopt a resolution of the City of Colorado Springs, Colorado approving the issuance of debt by the Copper Ridge Metropolitan District Tax Exempt Bank Loan, Series 2025, in the estimated principal aggregate amount of $50,906,000.00.