City of Colorado Springs
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File #: 19-421    Version: Name:
Type: Resolutions Status: Passed
File created: 7/22/2019 In control: City Council
On agenda: 10/22/2019 Final action: 10/22/2019
Title: Approval of the Proposed 2020 Operating Plan and Budget for the First and Main North Business Improvement District Presenter: Carl Schueler, Comprehensive Planning Manager
Attachments: 1. 2020 Operating Plan and Budget - First and Main North BID

 

 

Title

Approval of the Proposed 2020 Operating Plan and Budget for the First and Main North Business Improvement District

 

  Presenter: 

Carl Schueler, Comprehensive Planning Manager

 

Body

  Summary:

The First and Main North Business Improvement District (BID) is a legal entity separate from the City of Colorado Springs.  However, as required by State statute, it is necessary for City Council to review and approve the proposed 2020 Operating Plan and Budget for the BID.

 

  Previous Council Action: 

City Council approved formation of this BID in 2004 (Ordinance No. 04-51) and has approved the BID’s Operating Plan and Budget annually since its formation. 

This item was introduced in a City Council Work Session on October 7, 2019.

 

  Background:

The boundaries of this development-specific BID were established pursuant to an election in 2004.  This BID has an elected board, which is comprised of individuals associated with Nor’wood Development Group.  The District is authorized to provide the acquisition of improvements, construction of improvements, operation and maintenance of parking facilities, roadways, lighting, driveways, public utilities, and landscaping.

This Operating Plan and Budget is provided in a format consistent with the standard template approved by Council in August 2014 for these documents.

This BID does not anticipate any major changes or new activities in the coming year.

 

  Financial Implications:

The District issued $1,927,000 in Limited Tax General Obligation Bonds, Series 2005 for infrastructure improvements.  The bonds financed public improvements which included streets, parking, water lines, and sewer lines, and carry an interest rate of 6.0%.  These bonds are privately placed with this developer. Additionally, as of 2018 the developer associated with this BID had advanced $338,405 to the District related to additional public improvements costs.  The District anticipates repayment of a portion of the advances for these improvements in 2020. The 2020 proposed budget includes $7,000 in additional Developer advance.

The proposed mill levy for the BID in 2020 is 51.000 mills (1.000 mill for general expenses and 50.000 mills for debt service).  Although the series 2005 Bond Resolution limited the mill levy to 34.000 mills for years 2016 through 2034 due to lower than projected revenue from the limited mill levy, the Board of Directors of the District approved keeping the mill levy at 39.000 mills.  However, pursuant to the Second Amendment to Bond Resolution, Series 2005, dated November 29, 2017, the District authorized the mill levy limitation to not exceed 50.000 mills for payment of principal, premium, and interest on the bonds and any parity bonds.

Staff notes that the existing and projected debt service fund balances for this BID are small and provide limited margins in the event of a revenue shortfall.  The District responds that in the event of a shortfall the risk would accrue to the (related party) bondholders.  They further state that the term of these particular bonds cannot be extended without a refunding of these bonds. 

As a separate legal entity, the financial activities of the BID are separate from those of the City.  Any financial obligations of the BID are specific to the property within its boundaries and do not constitute an obligation of the City.

 

  Board/Commission Recommendation:

The BID Board of Directors recommends City Council’s approval of the 2020 Operating Plan and Budget.

 

  Stakeholder Process:

N/A

 

  Alternatives:

N/A

 

Recommended Action

  Proposed Motion:

Move to approve the proposed 2020 Operating Plan and Budget for the First and Main North Business Improvement District.

 

Summary of Ordinance Language

N/A