Title
Authorization of First & Main Business Improvement District to issue debt in the form of Series 2025 Limited Tax General Obligation Bond. (Legislative Item)
Presenter:
Allison, Senior Planner, Planning Department
Kevin Walker, Director, Planning Department
Body
Summary:
This is a request to approve issuance of debt by the First & Main Business Improvement District (“District”) in the form of Series 2025 Limited Tax General Obligation Bonds, to be repaid from a combination of limited property tax, and intergovernmental expenditures with the First & Main 2 Business Improvement District. The Bond will be in the approximate principal amount of $3,294,184.00 and will have an interest rate of seven (7) percent. The requested bond amount would be approximately 65% of the maximum debt amount authorized at this time. The City’s Special District Policy and the District’s approved Operating Plan and Budget require that City Council’s approval be obtained prior to issuing any debt. 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 Section 7-100.
Previous Council Action:
City Council approved formation of this BID in 2003 (Ordinance No. 03-37) and has approved the BID Operating Plan and Budget annually since its formation. City Council also approved the BID’s issuance of its 2009 and 2011 bonds, as well as a boundary modification associated with formation of the First and Main Business Improvement District No. 2 in 2008. In 2014, Council approved an ordinance authorizing this BID to convert from a Council-appointed to an elected board of directors. This conversion was subsequently formalized via a May 2014 election.
This item was heard at Council Work Session on March 24th, 2025 and no concerns were raised.
Background:
BIDs are created under Colorado Statute and City Policy to finance and/or maintain certain public improvements in non-residential areas, utilizing a 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 consistency with the Operating Plan and all applicable laws. The District’s original 2003 Operating Plan and Budget and subsequent annually-approved Operating Plan and Budget stipulate a maximum of $22,000,000 in indebtedness and was amended in 2010 to reduce the maximum indebtedness to $5,000,000. Per the 2025 Operating Plan, the current debt service is approximately $302,000, and when combined with the requested bond issuance is within its permitted pre-debt authorization allowance.
This BID is authorized to levy up to 50.0 mills for debt service, and 1.053 mills for operational purposes, and these mill levies are currently in place for properties within this BID.
The issuance of this debt is generally anticipated in the 2025 Operating Plan and Budget for this BID (as approved by City Council in October 2024). The proposed bond issuance is to support public improvements within the District and are anticipated to include parking, drainage, landscaping, and street facilities.
The draft forms for the bond are attached. The anticipated interest rate of the Series 2025 Bond will be approximately 7.00%. The 2025 Bonds will be repaid by a mill levy of approximately 50 mills per year, subject to adjustment, and property and intergovernmental revenue sharing with First & Main 2 Business Improvement District. The 2024 Bonds will have a thirty-year term with a bond maturity date of December 1st 2055.
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:
The City’s staff-level Special District Committee has been provided copies of these materials. All comments received have been in support and/or with no stated concerns.
Stakeholder Process:
N/A
Alternatives:
City Council could choose to approve, deny or modify the proposed resolution.
Recommended Action
Proposed Motion:
Move to approve the authorization of First & Main Business Improvement District to issue debt in the form of Series 2025 Bond Limited Tax General Obligation Bond.
Summary of Ordinance Language N/A