Title
Resolution of the City of Colorado Springs, Colorado approving the issuance of debt by the Ellston Park Metropolitan District Senior Limited Tax General Obligation Bonds and Subordinate Limited Tax General Obligation Bonds, Series 2025, in the estimated principal aggregate amount of $4,000,000.
Council District # 1
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 $4,000,000 by the Ellson Park 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 senior limited tax general obligation bond and a subordinate limited tax general obligation bond. The timing of the proposed bond issuances is to support the funding of future site improvements and to finance construction that has already occurred onsite. 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 Ellston Park Metropolitan District was created in 2021 to finance site improvements such as street improvements, sidewalks, retaining walls, and landscaping within the district boundaries. With the creation of the District and approval of the development plan in 2022 (PUDD-22-0005) with a subsequent modification in 2024 (PUDD-24-0005, refer to Exhibit J), the site has since been able to move forward with work onsite to begin constructing one hundred and sixty-seven (167) single family attached and detached units.
The initial District boundaries consisted of approximately twenty-nine (29) acres as illustrated in Exhibit C-1 of the 2021 Service Plan. No future inclusion areas were identified in the service plan (Exhibit C-2) as the surrounding properties are already built out.
Since the approval of the District’s service plan was completed under the City’s previous model service plan, certain policies reflected in the District’s Service Plan will differ from the City’s current Model that was adopted in 2022. As such, the maximum debt mill levy for residential land uses was limited to 30 mills and the operations and maintenance mill levy was limited to 10 mills per the policy at the time. Both mill levies are to be calculated based on the assessment values from on or after January 1st, 2006. The service plan did include the option of a higher mill levy for debt service, fifty (50) mills, for commercial uses; however, the approved development plan does not include any commercial uses.
Since the creation of the District, no debt has been issued. The service plan outlines a maximum authorized debt of $15,000,000, which will allow the District to request a maximum Series 2025 bond issuance of $4,000,000 without concern of going over the set maximum. Per the Preliminary Plan of Finance (Exhibit B) provided by the Petitioner, the anticipated total debt issuance will likely be closer to $2,524,000 based on the cost of improvements.
Besides the Preliminary Plan of Finance (Exhibit B), a variety of other supporting documents have been provided to accompany this request. The Petitioner has provided the bond resolution, draft indentures of trust, draft opinion letters from multiple external parties, estimated costs of all public improvements, and a draft certification attesting to the fairness and feasibility of the proposed bonds.
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 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:
This item was heard by Council on the September 22nd, 2025, work session agenda.
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 of the City of Colorado Springs, Colorado approving the issuance of debt by the Ellston Park Metropolitan District Senior Limited Tax General Obligation Bonds and Subordinate Limited Tax General Obligation Bonds, Series 2025, in the estimated principal aggregate amount of $4,000,000.