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COUNCIL - AGENDA ITEM - 09/27/2016 - PUBLIC HEARING AND RESOLUTION 2016-075 APPROVING T
Agenda Item 1 Item # 1 Page 1 AGENDA ITEM SUMMARY September 27, 2016 City Council STAFF Patrick Rowe, Redevelopment Program Coordinator Josh Birks, Economic Health Director SUBJECT Public Hearing and Resolution 2016-075 Approving the Block 23 Metropolitan District Nos. 1 and 2 Service Plan. EXECUTIVE SUMMARY The purpose of this item is to consider the Consolidated Service Plan for Block 23 Metropolitan District Nos. 1 and 2. The intent of the proposed Block 23 Metropolitan District Nos. 1 and 2 (jointly, the Districts) is to eventually provide public improvements (primarily a parking structure) that facilitates and makes possible a mixed-use project on Block 23 that is in keeping with planning and community objectives for a development in downtown Fort Collins. The primary purpose of the Districts is to finance, construct, acquire, own, operate, and maintain those public improvements. This action establishes a preliminary framework service plan to allow the Districts to be created, but not to begin financing and construction of the proposed public improvements. This approach provides limited authorization that allows the proposed Districts to move forward with a November election, while preserving and calling for future review and consideration by the City Council of an amended service plan. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BACKGROUND / DISCUSSION Post Modern Development (the Developer) is in the early stages of planning a mixed-use development on Block 23 in downtown Fort Collins (the Project). Block 23 is located immediately north of the City’s Planning and Building offices at 281 North College Avenue (Attachment 1). The Project property spans approximately three quarters of Block 23, generally encompassing the entire block with the exception of the existing Old Town Flats project. The development as currently conceptualized will feature retail, office and residential components and will include a seven (7) story mixed-use structure as well as a parking structure. The parking structure is proposed to accommodate approximately 500 spaces, 250 of which are potentially available to the City for lease or purchase at commercially reasonable terms for parking. The remaining 250 spaces will be retained for the development’s use. Block 23 represents a high value redevelopment opportunity, and staff is generally supportive of utilizing the metropolitan district tool to address parking challenges (both site specific parking needs and general area parking needs) and to enhance development outcomes at this site. Agenda Item 1 Item # 1 Page 2 Initial Service Plan Details Much of the substance of the service plan will be provided to Council for its consideration at a later date as part of a service plan amendment. Below are several of the more significant service plan details taken in part from the initial service plan submittal that included an “Infrastructure Preliminary Development Plan,” which lists planned public improvements and there estimated costs, but which are not authorized in the limited service plan now being proposed. Proposed Improvements (both Districts): Potable water, Sewer, Storm Systems, Streets, Parking Structure, and, Parks and Trail improvements. (As noted above, the service plan section specifying planned public improvements is not a part of the limited service plan). Estimated Cost of Improvements: $15,012,000 ($10,000,000 of which is estimated for a parking structure; after removing contingency, engineering, etc., the parking structure represents 90% of the estimated costs). (As noted above, the service plan section specifying the estimated costs of planned public improvements is not a part of the limited service plan). Proposed Land Use by Assessed Value (Commercial/Residential): From an Assessed Value basis at buildout, the residential components of the Project are estimated to represent 14.5% of the total project, with commercial components representing the balance at 85.5%. Multi-District Service Plan: The Service Plan calls for the creation of two distinct districts for the purpose of distributing the costs associated with the public improvements between the residential and commercial components of the Project. The Districts are proposed primarily for the purpose of financing and constructing the parking structure, though the service plan includes other public improvements as well. What is a Metropolitan District? Creation of a Metro District A metropolitan (metro) district is a governmental entity created and organized under the Special District Act in Title 32, Article 1 of the Colorado Revised Statutes (Special District Act). As a governmental entity, it is separate and distinct from the municipality within which it is organized and located. The creation of a metro district within a municipality is initiated by the district’s organizer filing a “service plan” with the municipality. The organizer of most districts is typically also the owner and developer of all the land identified in the service plan as included within the district’s proposed boundaries. The service plan is the governing document controlling the future existence and operation of the metro district, together with the Special District Act and other applicable law. A metro district can only be created and organized if the municipality’s governing body approves the service plan. Accordingly, when a district is proposed to be organized within the City, the City Council has the authority to approve, approve with conditions or disapprove the service plan. In exercising this authority, the Council has considerable discretion and the Council’s decision is subject to judicial review only on the basis that its decision was “arbitrary, capricious or unreasonable.” Through this approval process, the City also has the authority to limit the metro district’s powers and operations under its service plan, such as by limiting the public infrastructure and services that the district can finance and provide under the service plan. The City can also require in the service plan that some or all of the public infrastructure to be constructed be dedicated to the City. For example, utility improvements and streets are typically dedicated to the municipality, but park and recreation improvements are often not. The City can also impose in the service plan a maximum cap on the metro district’s mill levy and on the amount of bonds and other debt the district can issue. Following a municipality’s approval of a district’s service plan, the requisite number of taxpaying electors in the district must sign a petition for organization, which is filed with the district court of the county in which the district is located. Following public notice, the court holds a public hearing and authorizes an election. The election is used not only to authorize the creation of the district, but also to elect the district’s first board of directors and usually to approve under TABOR the district’s property tax mill levy and its authority to issue bonds and other multiple-fiscal year debt. Agenda Item 1 Item # 1 Page 3 Metro districts are governed by their elected board of directors, subject to the requirements and limitations of their approved service plans, the Special District Act and other applicable law. Powers of Metro Districts Except as limited by its approved service plan, a metro district may provide public improvements and services to the property owners and residents within its boundaries related to any two or more of these service areas: Parks and Recreation Sanitary Sewer and Storm Water Traffic and Safety Controls Streets Water Public Transportation Television Relay and Translator Facilities Solid Waste Mosquito Control Fire Protection And, unless limited in the service plan, a metro district has these powers: (a) to levy property taxes; (b) impose fees and other charges for the facilities and services it provides; (c) issue debt, like bonds; (d) exercise the power of eminent domain; (e) construct public improvements both within and outside its boundaries; and (f) to provide its services directly or through intergovernmental agreements with other governmental entities, such as a municipality, county or other metro district. While metro districts are often used to provide ongoing services, they are more often used to finance public improvements for the use and benefit of the district’s property owners and residents. Eligible capital costs are usually financed through the district’s issuance of general obligation bonds paid from the property taxes levied by the district. When its bonds are properly issued and used for eligible public purposes, the income earned from them by a bond purchaser can be exempt from the purchaser’s federal and state income taxes. The tax-exempt nature of metro district bonds usually results in lower infrastructure financing costs than would be the case with private financing alternatives. Once the initial infrastructure has been completed, a metro district will continue to exist while the infrastructure bonds are being paid, but are often dissolved once the bonds are retired. However, a metro district is permitted, again unless limited by its service plan, to exist in perpetuity in order to provide certain ongoing services to the district’s inhabitants, such as: trash removal and recycling; security services; architectural design review and covenant enforcement; maintenance and administration of the common areas; and the operation and maintenance of the district’s facilities. Potential Advantages of Metro Districts Metro districts are viewed by developers as a useful tool for financing public improvements required for commercial and residential development with tax-exempt general obligation bonds secured by the district’s property taxes to be collected from future increases in assessed valuation of property within the district as it develops. This use of district bond financing can provide savings to the district’s developer, which theoretically results in a reduction in the price of lots and/or the availability of funds for additional amenities for the development. Metro districts can also perform many of the functions usually provided by owners’ associations. For example, they can enforce the private covenants of the owners’ association and provide for the ongoing operation and maintenance of the district’s common areas and other amenities, such as park and recreational facilities. And while the owners’ association fees paid by a homeowner cannot be claimed as an itemized deduction on his or her income tax returns, the district’s property taxes paid by the homeowner can be claimed as an itemized deduction. Agenda Item 1 Item # 1 Page 4 Potential Disadvantages of Metro Districts Critics of metro districts question whether their use by developers to finance required public infrastructure actually results in any reduction in the price of lots as compared to similar lots in developments not within a metro district. They argue that lot purchasers pay the same amount for their lot and pay much more in annual property taxes because of the district’s additional mill levy, with any savings realized from using a metro district going to the developer’s bottom line. Depending on the level and nature of the restrictions imposed on a metro district’s powers in its approved service plan, the municipality in which the district is located might suffer a loss of control and influence over the area within the district’s boundaries. Metro districts can and have failed financially resulting in them filing bankruptcy. In such circumstances, the City would have no legal obligation to assume responsibility for any of the district’s bonds and debt nor would the City be required to construct the district’s unfinished infrastructure or to continue providing the district’s services. Nevertheless, while a metro district and the municipality that approved its service plan are separate and distinct governmental entities, a metro district’s financial failure can have two potential adverse effects for the municipality. First, it could affect the municipality’s financial rating, although this is not likely. Second, and more likely, the district’s residents could have an expectation that the municipality will step in to assume the district’s responsibilities and the residents will bring political pressure on the City’s leaders to do so. Enforcement of Service Plans If a metro district takes an action that is a material departure from the requirements or limitations of the approved service plan, the municipality approving the plan may file an action in court to enjoin that action. Also, the approved service plan can grant additional enforcement remedies to the municipality. City Metropolitan District Policy In July 2008, the City Council adopted Resolution 2008-069 establishing the guidelines and parameters under which City staff is to review and evaluate metro district service plans filed with the City (the Policy) (Attachment 2). While the Policy also provides guidance to the Council in making its decision of whether or not to approve a service plan, the Policy makes it clear that it is intended to only be a guide for Council and that nothing in the Policy “is intended, nor shall it be construed, to limit the discretion of City Council, which retains full discretion and authority regarding the terms and limitations of all District Service Plans.” The guidelines and parameters set in the Policy for evaluating metro district service plans include: Total assessed value of the taxable improvements within the metro district at full build-out should be at least $10 million plus CPI increases since 2008 Development should be “predominantly commercial,” meaning no less than 90% non-residential and no more than 10% residential Bias against using metro district to fund “basic infrastructure improvements normally required from new development” Service plan should “enumerate and describe all powers” of the district for which there is a demonstrated need and those powers not needed should not be approved in the plan The district should not have the power of eminent domain 40 mills should be the “Maximum Mill Levy” for both debt service and district operations and maintenance Agenda Item 1 Item # 1 Page 5 District’s “Financial Plan” should be prepared by an investment bank or financial advisor listed in “Bond Buyer’s Market Place.” Financial plan should include a “Total Debt Limitation” for the district that should not exceed “100% at projected maximum debt capacity as shown in the Financial Plan” Service plan should include an “Infrastructure Preliminary Development Plan” No development fees may be charged by the district unless identified with particularity in service and financial plans. Bonded indebtedness should be limited to what can be serviced by the Maximum Mill Levy All debt under financial plan should be issued within 15 years of the district’s formation Debt issued should have a 30-year maximum maturity date, except for a refunding that results in net present value savings All debt should be paid and district dissolved no more than 40 years after service plan approved Service plans should require additional Council approval 20 years after district formation and every 10 years thereafter if the district is to continue to provide operation and maintenance services No issuance of additional debt if district is in default in payment of existing debt, except to refund debt If multiple districts are to be used, the proposed absorption of the project and the improvements to be financed should be reasonably projected to occur over an extended period of time or it should be a mixed- use project with a minimum of its assessed value derived from non-residential uses Certain “Material Modifications” of the service plan should be defined in the plan, as well as what are not considered “Material Modifications” (“Material Modification” to a service plan require prior Council approval under the Special District Act) Service plan should require the district to provide the City with an annual report Service plan should expressly allow City to impose certain sanctions if district is in material default of the service plan Again, the Policy provides that it “is intended as a guide only” and not intended “to limit the discretion of the City Council.” Consequently, the Council is free to waive any of the requirements and limitations listed above, as well as impose any other reasonable requirements or limitations in the service plan as a condition of its approval. Limited Service Plan Details The Developer has submitted a limited service plan for the Districts. The limited service plan provides a preliminary framework and limited powers under which the Districts are authorized to proceed with additional organizational steps and a November election. The Districts will have three years from approval of the limited service plan by City Council to obtain the Council’s approval of a service plan amendment. If the Districts do not timely obtain Council’s approval of a service plan amendment, the City may opt to compel the Districts to dissolve by the remedies available to it under the Special District Act. As described above, the City Policy contains a number of criteria for evaluating service plans. A full policy review of the Project will be conducted at the time of the service plan amendment. For the purpose of this limited service plan, the following Policy criteria are particularly relevant: Agenda Item 1 Item # 1 Page 6 Development must be “predominantly commercial”; defined as no less than 90% non-residential. The development as proposed is 85.5% commercial and 14.5% residential on an estimated assessed value basis at buildout. This exceeds the preference set by the City Policy of no more than 10% residential, but may reflect an appropriate mix for a multi-story mixed-use development in downtown. Max Mill Levy. The limited service plan does not authorize a mill levy. Any mill levy will require a service plan amendment that City Council will consider for approval. Max Debt Limit. The limited service plan does not authorize a max debt limit. Any debt limit authorization will require a service plan amendment that City Council will consider for approval. Multiple-District Structure. The limited service plan specifies a two-district structure for the purpose of equitably allocating costs between the residential and commercial components of the Project. Unresolved Items/Additional Analysis to be Conducted at Service Plan Amendment Public Parking. The applicant has indicated approximately 250 parking spaces may be available to the City for lease or purchase at commercially reasonable terms. To engage with the Developer on parking, the City must evaluate its parking needs at this particular location relative to parking plans and demand. Assuming parking needs are confirmed at this location, the City will need to assess the availability and strategy to underwrite the parking for lease or purchase. Maturity of Plans. To better understand and communicate the development project and potential resulting public benefits, staff recommends a further maturing of the development plans and additional City Planning Department conversations on the proposed development. Financial Review. The City’s independent consultant will conduct a full financial review of the proposal: assessing the need for public financing, the appropriateness of the proposed maximum mill levy and debt limit, and the underlying development assumptions and program (financial analysis based on submitted information is underway, but incomplete and will likely require further input from the applicant). Engineering Review. The City will also request a limited engineering review to confirm cost assumptions and overall feasibility from an engineering and constructability perspective (engineering review based on submitted information is underway, but incomplete and will likely require further input from the applicant). Legal Review. The City will provide a thorough legal review of the proposed service plan amendment, as was done for this proposed limited service plan. Comprehensive City Policy Review (including staff assessment of public benefits). The City will provide a thorough review of the proposed amended service plan relative to the City Policy, including a staff assessment of any public benefits from the proposed Districts. Districts’ Limitations Following approval of this limited service plan and continuing until a service plan amendment is approved by City Council, the Districts will be limited in the following ways: They cannot undertake any activity except minimal administrative or ministerial activities required by state law to maintain the Districts. They cannot levy any tax or impose any fee. They cannot construct any public improvements. They cannot incur any debt. They will not be able to exercise the power of eminent domain without obtaining the prior written consent of City Council (note: this limitation will carry forward with future service plan amendments). The approval of the current form of the service plan does not obligate the City Council to approve the service plan amendment or any zoning, subdivision, planning, building permit or other land use matter for the owner of the real property within the Districts. Agenda Item 1 Item # 1 Page 7 CITY FINANCIAL IMPACTS The City does not have financial liability associated with the formation or operation of the Districts. As a matter of stewardship, the City does conduct a financial review of any proposed metro district. This analysis is pending and will be available at or prior to any service plan amendment. BOARD / COMMISSION RECOMMENDATION This item was presented to the Council Finance Committee on September 19, 2016 (Attachment 3). PUBLIC OUTREACH Other than the mailed notice required for this public hearing, there has been no public outreach. ATTACHMENTS 1. Location Map (PDF) 2. Metropolitian District Review Policy (PDF) 3. Council Finance Committee Minutes, September 19, 2016 (draft) (PDF) 4. Powerpoint presentation (PDF) Walnut St Cherry St B uckingham St Willow St Linden St LAogvean Mathews St Chestnut St 1st St Pine St Sycamore St Peterson St Maple St Canyon Ave Maso n C t Poudre St W Oak St S Meldrum St S Sherwood St L i n d e n Cente r Dr E Oak St N Meldrum St N Sherwood St ³I Laporte Ave N Howes St Remington St S Mason St W Mountain Ave Riverside Ave Jefferson St Lincoln Ave S Howes St S College Ave E Mountain Ave N Mason St N College Ave E Lincoln Ave Block 23 City Metropolitan of Fort Collins District CITY GEOGRAPHIC These and were map OF not products FORT designed and INFORMATION COLLINS or all intended underlying for general data SYSTEM are use developed by members MAP for use of PRODUCTS the by the public. City of The Fort City Collins makes for no its representation internal purposes or only, warranty dimensions, as to contours, its accuracy, property timeliness, boundaries, or completeness, or placement and of location in particular, of any its map accuracy features in thereon. labeling or THE displaying CITY OF FORT COLLINS PARTICULAR MAKES PURPOSE, NO WARRANTY EXPRESSED OF MERCHANTABILITY OR IMPLIED, WITH OR RESPECT WARRANTY TO THESE FOR FITNESS MAP PRODUCTS OF USE FOR OR THE UNDERLYING FAULTS, and assumes DATA. Any all responsibility users of these of map the use products, thereof, map and applications, further covenants or data, and accepts agrees them to hold AS the IS, City WITH harmless ALL from made and this against information all damage, available. loss, Independent or liability arising verification from any of all use data of contained this map product, herein should ATTACHMENT 2 Finance Administration 215 N. Mason 2nd Floor PO Box 580 Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com Council Audit & Finance Committee Minutes 09/19/16 9:30 - 11:30 am CIC Room Council Attendees: Mayor Wade Troxell, Ross Cunniff Staff: Darin Atteberry, Mike Beckstead, Laurie Kadrich, Lance Smith, Tiana Smith, John Voss, Rachel Rogers, Tom Leeson, Josh Birks, Patrick Rowe, John Duvall, Jackson Brockway, Tyler Marr, Carolyn Koontz Others: Donald Taranto, TST Consulting Engineers, Dale Adamy, Citizen Meeting called to order at 9:32 am NOTE: Only the Metro Districts presentations were given due to schedule conflicts. Gerry Horak was not present so Utility Rate Review and Annual Year End Adjustment presentations were deferred and will be given during a special CFC session yet to be scheduled. UAPPROVAL OF MINUTES Ross Cunniff made a motion to approve the August 15, 2016 Council Finance Committee minutes. Mayor Troxell made a second to the motion. The minutes were approved unanimously. Metro District Review - Block 23 Metropolitan District Nos. 1 and 2 Service Plan Josh Birks, Economic Health Office Director Patrick Rowe, Redevelopment Program Coordinator EXECUTIVE SUMMARY The purpose of this item is to solicit Council Finance Committee input on the Block 23 Metropolitan District Nos. 1 and 2 Service Plan. The intent of the proposed Block 23 Metropolitan District Nos. 1 and 2 (jointly, the “Districts”) is to provide public improvements (primarily a parking structure) that facilitates and makes possible a mixed-use project on Block 23 generally in keeping with planning and community objectives for a development in downtown Fort Collins. The primary purpose of the Districts is to finance, construct, acquire, own, operate, and maintain those public improvements. This action establishes a preliminary framework service plan. This approach provides limited authorization that allows the proposed Districts to move forward with a November ballot question, while preserving and calling for future review and consideration by the City. ATTACHMENT 3 2 GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Have we provided enough information for Council to make a determination on the proposed limited framework Block 23 Service Plan? BACKGROUND/DISCUSSION Post Modern Development (the “Developer”) is in the early stages of planning a mixed-use development on Block 23 in Downtown Fort Collins (the “Project”). Block 23 is located immediately north of the City’s Planning and Building offices at 281 N. College Ave. The Project property spans approximately three quarters of block 23 and generally encompasses the entire block with the exception of the existing Old Town Flats project. The development will include retail, office and residential components. As proposed at this early stage, the Project will include a seven (7) story mixed-use structure as well as a parking structure with 500 parking spaces. All powers must be granted by Council in the Service Plan Formation steps; Service Plan approval - (City’s role) If approved - take a petition for organization to district court Organizational election (coupled with TABOR election which restricts timing) Last date in order to make this November’s election is 9/28 Governance - Independent Board Block 23 Service Plan • Proposed Improvements: Potable water, Sewer, Storm Systems, Streets, UParking StructureU, and Parks and Trail improvements. • Estimated Cost of Improvements: $15,012,000 ($10,000,000 of which is estimated for a parking structure). Parking Structure represents 90% of funds. • Proposed Land Use (Commercial/Residential): • 60% commercial / 40% residential (deviation from City Policy) What council is being asked to do at this time; Difficult for staff to give a full appraisal that it would typically do so we are proposing that we take an approach similar to Foothills Mall where we brought forward a limited or Shell Service Plan which allowed for organizational election to take place and enables developers and partners to stay on schedule - then bring back required Service Plan amendment which will include details, proposed improvements and powers of the district Policy that was adopted in 2008 provides some guidance for staff and Council on how to review Service Plans Shell Plan doesn’t answer any of the questions - not being authorized at this time No ability to levy tax – no way to generate revenue at this time No debt is allowed to be issued Cannot construct public improvements 3 Only activities that are allowed are minimal administrative activities which are needed in order to maintain the organization in good standing with the state. Service Plan amendment must be completed within 3 years of Council’s approval of the current Shell Service Plan. If an amendment is not brought forward within 3 years, the District automatically dissolved. We did this at Foothills to give time for the project to progress. Next steps; Council meeting review of both Districts on 9/27 If Shell Service Plan is approved, x We would continue to work with the developer to gain more understanding about land use and mix of use. Further advance discussion around parking - the 500 spaces includes approximately 250 surplus spaces - Some discussion regarding what the city’s role may be as far as owning ,managing these spaces. • Public Parking Concept Development and Review. • Financial Review. • Engineering Review. • Legal Review. • Comprehensive City Policy Review (including staff assessment of public benefits). Approval of limited shell Service Plan is in no way a statement of support for any future Service Plan Amendment - this simply allows for the process to move forward, take advantage of timing for the November election. Darin commented; it is important to understand that there has been a significant amount of work up to this point (staff time investment) - this was not done in a flip way - very thoughtful approach Patrick Rowe added; staff recommendation - we do see value - this-block has been under-utilized for a period of time Ross Cunniff commented; seems pretty straightforward - one thing that would useful for Council to have - more discussion about pros and cons of including this much residential. Think we would need explicit Council overwrite on that. Mayor Troxell asked; are the train tracks in Block 23? Patrick Rowe responded; the NW corner of Block 23 is rounded off by the train tracks and is the proposed location of the parking structure (use as a buffer). Darin Atteberry commented; potential for public / private partnership with the parking structure. Potential leverage opportunity as there is a documented need we have been discussing for some time. Josh Birks responded: we see these as intertwined. Darin Atteberry, Mayor Troxell and Russ Cunniff are ok with moving forward on Block 23. 4 Metro District Review - Harmony and I-25 District Nos. 1-3 Service Plan Josh Birks, Economic Health Office Director Patrick Rowe, Redevelopment Program Coordinator EXECUTIVE SUMMARY The purpose of this item is to solicit Council Finance Committee input on the Harmony and I-25 District Nos. 1-3 Service Plan. The intent of the proposed Harmony I-25 Metropolitan District Nos. 1-3 (jointly, the “Districts”) is to provide public improvements that enable a 260 acre coordinated development project that will feature residential, retail, office, warehouse/flex space, and hotel components. The primary purpose of the Districts is to finance, construct, acquire, own, operate, and maintain those public improvements. This action establishes a preliminary framework service plan. This approach provides limited authorization that allows the proposed Districts to move forward with a November ballot question, while preserving and calling for future review and consideration by the City. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Have we provided enough information for Council to make a determination on the proposed limited framework Harmony I-25 Service Plan? BACKGROUND/DISCUSSION Project Description - Post Modern Development (the “Developer”) is in the early conceptual design stage of planning a large scale, coordinated, and phased development across a 260 acre site (the “Project”). The Project is located at the south-west corner of Harmony Road and I-25. The development will include a variety of uses including residential, retail, office, warehouse/flex space, and hotel components. The Service Plan calls for the creation of three distinct districts for the purpose of phasing the project. The Districts are proposed primarily for the purpose of financing and constructing a variety of public improvements (specified below) that are necessary for the development of the site. H25 Service Plan – much larger than Block 23 SW corner of Harmony and I25 - formerly gravel mining site - number of gravel mining ponds 260 acre coordinated development • Proposed Improvements (all districts): Miscellaneous/Fill/Grading, Sanitary Sewer, Water Distribution, Storm Systems, Non-Potable Water, Streets, and Parks and Trail improvements. • Estimated Cost of Improvements: $176,379,467 (District 1 $55,665,942; District 2 $54,209,092; District 3 $66,504,433). • Proposed Land Use (Commercial/Residential): • 63% commercial / 38% residential (deviation from City Policy) Strategy is the same but motivated by different unanswered questions (will highlight in a slide for Council) Scale of this project warrants more time and in-depth study Not to diminish the work the applicant has done – this is to make city staff more comfortable Same next steps - Council to consider Shell Service Plan on the 27P th Resolving some of the land use issues Continue financial engineering and legal review after Shell Service Plan is approved 5 One thing that is different is that the Harmony 25 Service Plan is to be initiated within the next 3 years not necessarily completed as is the case for Block 23 which recognizes the complexity as opposed to the Block 23 Service Plan. Limited Authorization / Limited Service Plan: • Not levy any tax or impose any fee. • Not incur any debt. • Not construct any Public Improvements. • No activity except minimal administrative activities. • Requires amendment be initiated in 3-years.…to allow plans to develop and unresolved questions to be addressed. Ross Cunniff commented; land use concerns are a big issue - different from our City Plan. Josh Birks responded; approval by Council for Shell Service Plan is not an indication of any future preference or approval of land use Mayor Troxell commented; a number of the improvements dealt with Stormwater John Birks responded; that is another reason for the issue of standard being initiated not completed as there will be FEMA processes required in order to get a letter of map revision - that will have to happen – reuse the site in a meaningful way – gravel pits in the area with exposed water that need to be filled – this figures into why the standard is different as far as when this should begin Ross Cunniff asked; is there land use code regarding wet land mitigation? Josh Birks responded; we will address that and include in the AIS for the 27P th Mayor Troxell commented; since this is a gateway kind of project you may want to refresh what that means. Also as part of our natural area continuum - those are important perspectives to be clear about as well – I can see a project really enhancing those from current conditions Mayor Troxell asked; did all of the things get sorted out with Timnanth? Josh Birks responded; the issues this committee has raised are the same issues that would be resolved ahead of any Service Plan amendment. Approval does not endorse and repurposed - we are simply enabling to take advantage of timing - waiting another year would be financial detrimental for the developer. Darin Atteberry asked Don Taranto if this will be coordinated with Strauss Cabin Road. Don Taranto responded; the coordination is happening between this and Straus Cabin Road - the technical review of the analysis is being taken care of - the actual effort of determining that can’t be done until we know exactly how the district is being put together. Mayor Troxell, Darin Atteberry and Ross Cunniff are ok to move forward. Meeting adjourned 1 Consolidated Service Plan for Block 23 Metropolitan District Nos. 1 and 2 Josh Birks and Patrick Rowe September 27th , 2016 ATTACHMENT 4 Location Map 2 Block 23 Development Proposal 3 • 7-story mixed-use structure and parking structure (500 spaces). • Retail, office, and residential uses. What is a Metropolitan District? 4 • Quasi-Governmental entity with the authority to levy property taxes, issue debt, and charge for services. • Many uses, including construction and financing of public improvements. What is a Metropolitan District? 5 Formation Steps: • Service Plan Approval (City’s role) • Petition for organization filed with district court • Organization election (and TABOR election – November, or May of even years) Governance: Independent board. Block 23 Metro District 6 Purpose: Address site constraints and provide enhanced development outcomes consistent with City plans. Initial Service Plan Summary 7 • Proposed Improvements (both districts): Potable water, Sewer, Storm Systems, Streets, Parking Structure, and, Parks and Trail improvements. • Estimated Cost of Improvements: $15,012,000 ($10,000,000 of which is estimated for a parking structure). • Proposed Land Use (Commercial/Residential) by assessed value at buildout: • 85.5% commercial and 14.5% residential Areas of Further Development 8 • Public Parking. • Maturity of Plans. • Financial Review (in-progress). • Engineering Review (in-progress). • Legal Review. • Comprehensive City Policy Review (including assessment of public benefits). Limited Authorization 9 Limited service plan: • Not levy any tax or impose any fee. • Not incur any debt. • Not construct any Public Improvements. • No activity except minimal administrative activities. • Requires amendment within 3-years. …to allow plans to develop and unresolved questions to be addressed. Next Steps 10 Tonight’s consideration of a limited framework service plan. If approved… • Public Parking Concept Development and Review. • Financial Review. • Engineering Review. • Legal Review. • Comprehensive City Policy Review (including staff assessment of public benefits). Staff Recommendation 11 Staff recommends approval of the limited service plan. *Note: Approval does not obligate or imply approval of any zoning, subdivision, planning, building permit, or other land use matter. 12 -1- RESOLUTION 2016-075 OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS APPROVING THE CONSOLIDATED SERVICE PLAN FOR BLOCK 23 METROPOLITAN DISTRICT NOS. 1-2 WHEREAS, the provisions of Title 32 of the Colorado Revised Statutes (“C.R.S.”) allow for the formation of various kinds of governmental entities to finance and operate public services and infrastructure; and WHEREAS, on July 15, 2008, the City Council adopted Resolution 2008-069 creating a Policy for Reviewing Proposed Service Plans for Title 32 metropolitan districts (the “City Policy”) setting forth criteria to be considered when a service plan is submitted for consideration; and WHEREAS, pursuant to the provisions of Article 1 of Title 32 of the Colorado Revised Statutes (“Special District Act”), Preston Center 7 II LLC (the “Petitioner”) has submitted to the City a Consolidated Service Plan (the “Service Plan”) for the Block 23 Metropolitan District Nos. 1-2 (each a “District” and collectively, the “Districts”); and WHEREAS, a copy of the Service Plan is attached hereto as Exhibit “A” and incorporated herein by reference; and WHEREAS, the Service Plan outlines the initial terms and conditions under which the Districts will be authorized to exist; and WHEREAS, the Service Plan limits the initial powers and authorized actions of the Districts to steps required for the formation of the Districts and routine regulatory compliance, and conditions the subsequent contracting, financing, acquisition, construction and installation of public improvements by the Districts, as well as the issuance of debt by the Districts, upon the approval by the City Council, in its sole discretion, of a Service Plan Amendment detailing the financial plans and plan of improvements for the Districts (the “Service Plan Amendment”); and WHEREAS, in accordance with Subsection B of the Review and Approval Process Section of the City Policy, and § 32-1-204.5, C.R.S., Petitioner complied with all notification requirements for the Public Hearing, as evidenced by the “Certificate of Mailing Notice of Service Plan Hearing” dated September 20, 2016, attached hereto as Exhibit “B” and incorporated herein by reference (the “Notice Requirements”); and WHEREAS, in addition to compliance with the Notice Requirements, the Petitioner published notice of the Public Hearing in the Coloradoan, a newspaper of general circulation within the Districts; and WHEREAS, the City Council has reviewed the Service Plan and considered the testimony and evidence presented at a public hearing on September 27, 2016 (the “Public Hearing”); and -2- WHEREAS, the Special District Act requires that any service plan submitted to the district court for the creation of a metropolitan district must first be approved by resolution of the governing body of the municipality within which the proposed district lies; and WHEREAS, the City Council wishes to approve the Service Plan for the Districts. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, AS FOLLOWS: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That the City Council hereby determines that the City’s notification requirements have been complied with regarding the Public Hearing on the Service Plan. Section 3. That the City Council hereby finds that the Service Plan contains, or sufficiently provides for, the items described in § 32-1-202(2), C.R.S., and that: a. There is sufficient existing and projected need for organized service in the area to be serviced by the proposed Districts; b. The existing service in the area to be served by the proposed Districts is inadequate for present and projected needs; c. The proposed Districts are capable of providing economical and sufficient service to the area within their proposed boundaries; and d. The area to be included within the proposed Districts has, or will have, the financial ability to discharge the proposed indebtedness on a reasonable basis. Section 4. That the City Council’s findings are based solely upon the evidence in the Service Plan as presented at the Public Hearing and the City has not conducted any independent investigation of the evidence. The City makes no guarantee as to the financial viability of the Districts or the achievability of the desired results. Section 5. That the City Council hereby approves the Service Plan. Section 6. That the contracting, financing, acquisition, construction and installation of public improvements by the Districts, as well as the issuance of debt by the Districts, shall be contingent upon the approval by the City Council, in its sole discretion, of a Service Plan Amendment detailing the financial plans and plan of improvements for the Districts as a condition of financing or constructing any improvements under the Service Plan, containing such other limitations, terms and conditions as may be determined by the Council, in its sole discretion, to be necessary or appropriate to protect the interests of the City and property owners within the District Service Area. -3- Section 7. That the City Council’s approval of the Service Plan is not a waiver or a limitation upon any power that the City Council is legally permitted to exercise with respect to the property within the Districts. Passed and adopted at an adjourned meeting of the Council of the City of Fort Collins this 27th day of September A.D. 2016. ____________________________________ Mayor ATTEST: ______________________________ City Clerk 1443.0003; 782665 CONSOLIDATED SERVICE PLAN FOR BLOCK 23 METROPOLITAN DISTRICT NOS. 1&2 City of Fort Collins, Colorado Prepared by: WHITE BEAR ANKELE TANAKA & WALDRON 2154 E. Commons Ave., Suite 200 Centennial, Colorado 80122 Submitted on SEPTEMBER 26, 2016 EXHIBIT A i TABLE OF CONTENTS I. INTRODUCTION .............................................................................................................. 1 A. General Overview. .................................................................................................. 1 B. Purpose and Intent. .................................................................................................. 2 C. Need for the District. ............................................................................................... 2 D. Objective of the City Regarding District’s Service Plan; Approval of Service Plan Amendment. ............................................................................................................ 2 II. DEFINITIONS .................................................................................................................... 3 III. BOUNDARIES ................................................................................................................... 5 IV. PROPOSED LAND USE AND ASSESSED VALUATION ............................................. 6 V. DESCRIPTION OF PROPOSED POWERS, IMPROVEMENTS AND SERVICES ....... 6 A. Powers of the Districts and Service Plan Amendment. .......................................... 6 1. Operations and Maintenance. ...................................................................... 6 2. Development Standards. ............................................................................. 6 3. Privately Placed Debt Limitation. ............................................................... 7 4. Inclusion and Exclusion Limitation. ........................................................... 7 5. Maximum Debt Authorization. ................................................................... 7 6. Monies from Other Governmental Sources.. .............................................. 7 7. Consolidation Limitation. ........................................................................... 7 8. Eminent Domain Limitation. ...................................................................... 7 9. Service Plan Amendment Requirement. ..................................................... 8 B. Infrastructure Preliminary Development Plan. ....................................................... 8 VI. FINANCIAL PLAN............................................................................................................ 8 A. General. ................................................................................................................... 8 B. Elections. ................................................................................................................. 8 VII. ANNUAL REPORT ........................................................................................................... 9 A. General. ................................................................................................................... 9 B. Reporting of Significant Events. ............................................................................. 9 VIII. DISSOLUTION .................................................................................................................. 9 IX. MATERIAL MODIFICATIONS ..................................................................................... 10 X. SANCTIONS. ................................................................................................................... 10 XI. CONCLUSION ................................................................................................................. 10 XII. RESOLUTION OF APPROVAL ..................................................................................... 11 ii LIST OF EXHIBITS EXHIBIT A-1 Legal Description of Project Area Boundaries EXHIBIT A-2 Legal Description of District No. 1 EXHIBIT A-3 Legal Description of District No. 2 EXHIBIT B-1 Project Area Boundary Map EXHIBIT B-2 District No. 1 Boundary Map EXHIBIT B-3 District No. 2 Boundary Map EXHIBIT C Vicinity Map I. INTRODUCTION A. General Overview. The Districts, which are intended to be independent units of local government separate and distinct from the City, are governed by this Service Plan which has been prepared in general accordance with the City Policy. The Districts are needed to provide Public Improvements to the Project for the benefit of property owners within the Districts and other local development, and will result in enhanced benefits to existing and future business owners and residents of the City. The primary purpose of the Districts will be to finance the construction of these Public Improvements. The Districts are located entirely within the City and being organized under a multiple- district structure. As this Project will include a mix of residential and commercial uses a multiple-district structure will provide for an efficient structure to fairly distribute the costs of public improvements and ongoing operations and maintenance. A multiple-district structure will allow for equitable distribution of costs, while also providing for the proper coordination of the powers and authorities of the independent Districts and avoids confusion regarding the separate, but coordinated, purposes of the Districts that could arise if separate service plans were used. Under such structure, District No. 1, as a service and financing district, is responsible for managing the construction and operation of the facilities and improvements needed for the Project, as well as contributing to the tax base needed to support the Financial Plan for capital improvements. District No. 2, as a financing district, is responsible for contributing to the funding and tax base needed to support the Financial Plan for capital improvements. A multiple- district structure that features the operation of District No. 1, in part as a service district which owns and operates the public facilities throughout the Project, and the operation of District No. 2 as a financing district that will assist in generating the tax revenue sufficient to pay the costs of the capital improvements, is a configuration that will create several benefits. These benefits include, inter alia: (1) coordinated administration of construction and operation of Public Improvements, and delivery of those improvements in a timely manner; (2) maintenance of equitable mill levies and reasonable tax burdens on all similarly-situated areas of the Project through proper management of the financing and operation of the Public Improvements; and (3) assured compliance with state laws regarding taxation in a manner which permits the issuance of tax exempt Debt at the most favorable interest rates possible. Allocation of the responsibility for paying Debt for Public Improvements and capital costs will be managed through development of a unified financing plan for those improvements and through development of an integrated operating plan for long-term operations and maintenance. Use of District No. 1 as the service district, to manage these functions, will help maintain reasonably uniform mill levies and fee structures throughout the coordinated construction, installation, acquisition, financing and operation of Public Improvements throughout the Project. Intergovernmental agreements among the Districts will assure that the roles and responsibilities of each District are clear in this coordinated development and financing plan. This Service Plan provides a preliminary framework and limited authorization under which the Districts are authorized to proceed with an Organizational Election. Notwithstanding any provisions to the contrary contained herein, following the entry of court orders formally decreeing the Districts organized, and continuing until a Service Plan Amendment is approved by the City Council, the Districts shall not undertake any activity except minimal administrative or ministerial activities required by State law to maintain the Districts as lawfully existing political subdivisions of the State unless or until a Service Plan Amendment is approved by the City Council, in its sole discretion. Without limiting the generality of the foregoing, the Districts shall not levy any tax, impose any fee, construct any Public Improvements, enter into any contracts or agreements for the construction of any Public Improvements or for the procurement or provision of services or tangible property, or incur any Debt until the Service Plan Amendment is approved. The approval of this Service Plan does not obligate the City Council to approve the Service Plan Amendment or any zoning, subdivision, planning, building permit or other land use matter for the owners of the real property within the Districts. B. Purpose and Intent. The Districts, which shall be independent units of local government separate and distinct from the City, is governed by this Service Plan. The Districts are needed to provide Public Improvements to the Project for the benefit of property owners and taxpayers within the Districts, and through its formation, will result in enhanced benefits to existing and future business owners and/or residents of the City. The primary purposes of the Districts will be to finance, construct, acquire, own, operate and maintain the Public Improvements. This Service Plan is submitted in accordance with Part 2 of the Special District Act, Section 32-1-201, et seq., C.R.S. It defines the powers and authorities of the Districts and describes the limitations and restrictions placed thereon. The information provided in this Service Plan is preliminary in nature and subject to change as development within the Project evolves. As plans for development are refined and finalized, the same shall be included as part of an Approved Development Plan. C. Need for the District. There are currently no other governmental entities, including the City, located in the immediate vicinity of the Districts that, at this time, can financially undertake the planning, design, acquisition, construction, installation, relocation, redevelopment, and financing of the Public Improvements needed for the Project. Formation of the Districts is therefore necessary in order for the Public Improvements required for the Project to be provided in the most economic manner possible. D. Objective of the City Regarding District’s Service Plan; Approval of Service Plan Amendment. The City’s objective in approving the Service Plan for the Districts is to authorize the Districts to provide for the planning, design, acquisition, construction, installation, relocation and redevelopment of the Public Improvements from the proceeds of Debt to be issued by the Districts. A Financial Plan, which describes the Debt anticipated to be issued by the Districts, shall be submitted to the City as part of the Service Plan Amendment, as shall an Infrastructure Preliminary Development Plan. The City shall, under no circumstances, be responsible for the Debts of the Districts and the City’s approval of this Service Plan shall in no way be interpreted as an agreement, whether tacit or otherwise, to be financially responsible for the Debt of the Districts or the construction of Public Improvements. The City’s approval of this Service Plan shall, under no circumstances, be interpreted as an agreement by the City that it will approve the Service Plan Amendment or that any particular provisions set forth in this Service Plan will be approved by the City in the Service Plan Amendment. The City’s objective in approving this Service Plan is to allow the proposed Districts to proceed with the Organizational Election. This Service Plan is intended to establish limitations applicable to the Districts and explicit financial constraints that are not to be violated under any circumstances. The primary purpose is to provide for the Public Improvements associated with the Project and regional improvements as necessary. II. DEFINITIONS In this Service Plan, the following terms which appear in a capitalized format herein shall have the meanings indicated below, unless the context hereof clearly requires otherwise: Approved Development Plan: means a development plan or other land-use process authorized under the City Code that sufficiently identifies the Public Improvements necessary for facilitating development of the Project within the Service Area as approved by the City pursuant to the City Code, as amended from time to time. Board or Boards: means the Board of Directors of any of the Districts, or the boards of directors of all of the Districts, in the aggregate. Bond, Bonds or Debt: means bonds or other financial obligations for which a District has promised to impose an ad valorem property tax mill levy, and other legally available revenue, for payment. Such terms do not include intergovernmental agreements pledging the collection and payment of property taxes in connection with a service district and taxing district(s) structure, if applicable, and other contracts through which a District procures or provides services or tangible property. City: means the City of Fort Collins, Colorado. City Code: means the Code of the City of Fort Collins, the Fort Collins Land Use Code, and any regulations, rules, or policies promulgated thereunder, as the same may be amended from time to time. City Council: means the City Council of the City of Fort Collins, Colorado. Developer: means Preston Center 7, II, LLC, a Colorado limited liability company. District: means Block 23 Metropolitan District No. 1 or Block 23 Metropolitan District No. 2, individually. District No. 1: means Block 23 Metropolitan District No. 1. District No. 2: means Block 23 Metropolitan District No. 2. Districts: means Block 23 Metropolitan District No. 1 and Block 23 Metropolitan District No. 2, jointly. District Organization Date: means the date the order and decree for organization issued by the Larimer County District Court as required by law for the District or Districts is recorded with the Larimer County Clerk and Recorder. External Financial Advisor: means a consultant that: (1) is qualified to advise Colorado governmental entities on matters relating to the issuance of securities by Colorado governmental entities including matters such as the pricing, sales and marketing of such securities and the procuring of bond ratings, credit enhancement and insurance in respect of such securities; (2) shall be an underwriter, investment banker, or individual listed as a public finance advisor in the Bond Buyer’s Municipal Market Place or, in the City’s sole discretion, other recognized publication as a provider of financial projections; and (3) is not an officer, agent or employee of the Districts. Financial Plan: means a Financial Plan, as the same is described in Section VI and which shall be included within the Service Plan Amendment. The Financial Plan shall be prepared by an External Financial Advisor or shall be accompanied by a letter of support from an External Financial Advisor. The Financial Plan shall describe (a) how the Public Improvements are to be financed; (b) how the Debt is expected to be incurred; and (c) the estimated operating revenue derived from property taxes for the first budget year through the year in which all District Debt is expected to be paid or defeased. This Financial Plan is intended to represent only one example of debt issuance and financing structure of the Districts, any variations or adjustments in the timing or implementation thereof shall not be interpreted as material modifications to this Service Plan. Infrastructure Preliminary Development Plan: means the Infrastructure Preliminary Development Plan as described in Section V.B. and which shall be included as part of the Service Plan Amendment. The Infrastructure Preliminary Development Plan shall include: (a) a preliminary list of the Public Improvements to be developed by the District; (b) an estimate of the cost of the Public Improvements; and (c) the map or maps showing the approximate location(s) of the Public Improvements. The District's implementation of this Infrastructure Preliminary Development Plan is subject to the Approved Development Plan and any change conditioned upon various external factors including, but not limited to, site conditions, engineering requirements, City, county or state requirements, land use conditions, and zoning limitations. Maximum Debt Service Mill Levy: means the maximum mill levy the Districts are permitted to impose upon the taxable property within the Districts for payment of Debt, which shall be included in the Service Plan Amendment. Maximum Debt Authorization: means the total Debt the Districts are permitted to issue, which shall be included in the Service Plan Amendment. Maximum Debt Maturity Term: means the maximum term for a District Debt issuance, which shall be included in the Service Plan Amendment. Organizational Election: means the initial election at which the Districts’ organization, the initial slate of directors and associated terms of office for each director and debt and taxing authorization is voted upon pursuant to the requirements of TABOR. Project: means the development or property commonly referred to as Block 23. Project Area Boundaries: means the boundaries of the area described in the Project Area Boundary Map and the legal description attached hereto as Exhibit A-1. Project Area Boundary Map: means the map attached hereto as Exhibit B-1, describing the overall property that incorporates the Project. Public Improvements: means a part or all of the improvements authorized to be planned, designed, acquired, constructed, installed, relocated, redeveloped and financed, specifically including related eligible costs for acquisition and administration, as authorized in Section V below, to serve the future taxpayers and property owners of the Service Area as determined by the Board of the Districts in its discretion. Service Area: means the property within the Project Area Boundary Map after such property has been included within the Districts. Service Plan: means this service plan for the Districts approved by the City Council, as the same may be amended from time to time, specifically including the Service Plan Amendment. Service Plan Amendment: means an Amended and Restated Service Plan approved by the City Council in its sole discretion in accordance with applicable state law, the City Charter and City Code. Special District Act or Act: means Article 1 of Title 32 of the Colorado Revised Statutes, as amended from time to time. State: means the State of Colorado. TABOR: means to Article X, Section 20 of the Constitution of the State. Vicinity Map: means a map of the regional area surrounding the Project, as attached hereto at Exhibit C. III. BOUNDARIES The Project Area Boundaries includes approximately 4.36 acres. A legal description of the Project Area Boundaries is attached as Exhibit A-1. The Project Area Boundaries are divided into two (2) separate and distinct Districts (District No. 1 and District No. 2), legal descriptions for which are attached hereto as Exhibits A-2 and A-3, respectively. A Project Area Boundary Map is attached hereto as Exhibit B-1, and maps of District No.1 and District No. 2 are included as Exhibits B-2 and B-3, respectively. Finally, a Vicinity Map is attached hereto as Exhibit C. It is anticipated that the Districts’ Boundaries may change from time to time as they undergo inclusions and exclusions pursuant to Section 32-1-401, et seq., C.R.S., and Section 32-1-501, et seq., C.R.S., subject to the limitation set forth in Article V below. IV. PROPOSED LAND USE AND ASSESSED VALUATION The Service Area consists of approximately 2.62 acres of commercial space. The Service Area further consists of approximately 1.74 acres of residential space. The current assessed valuation of the Service Area is approximately zero dollars ($0) for purposes of service plan financial forecasting, and, at build out, is expected to be Twenty Million Two Hundred Sixty Eight Thousand and Eighty Three Dollars ($20,268,083). Approval of this Service Plan by the City does not imply approval of the development of a specific area within the Districts, nor does it imply approval of the total site/floor area of commercial buildings or space which may be identified in this Service Plan or any of the exhibits attached thereto or any of the Public Improvements, unless the same is contained within an Approved Development Plan. V. DESCRIPTION OF PROPOSED POWERS, IMPROVEMENTS AND SERVICES A. Powers of the Districts and Service Plan Amendment. Only after approval of the Service Plan Amendment shall the Districts have the power and authority to acquire, construct and install the Public Improvements within and without the boundaries of the Districts as such power and authority is described in the Act, and other applicable statutes, common law and the State Constitution, subject to the limitations set forth herein. If, after the Service Plan is approved, the State Legislature includes additional powers or grants new or broader powers for Title 32 districts by amendment of the Special District Act or otherwise, any or all such powers shall be deemed to be a part hereof and available to or exercised by the Districts. Such additional powers granted by the State shall not constitute a material modification of this Service Plan. 1. Operations and Maintenance. The purpose of the Districts is to plan for, design, acquire, construct, install, relocate, redevelop and finance the Public Improvements. The Districts shall dedicate the Public Improvements to the City or other appropriate jurisdiction or owners association in a manner consistent with the Approved Development Plan and applicable provisions of the City Code. Those improvements that are not dedicated to the City or other appropriate jurisdiction or owners association may be maintained by the Districts. 2. Development Standards. The Districts will ensure that the Public Improvements are designed and constructed in accordance with the standards and specifications of the City, including the City Code and Approved Development Plan, and of other governmental entities having proper jurisdiction, as applicable. The Districts, directly or indirectly through the Developer, will obtain the City’s approval of civil engineering plans and will obtain applicable permits for construction and installation of Public Improvements prior to performing such work. 3. Privately Placed Debt Limitation. Prior to the issuance of any privately placed Debt, the Districts shall obtain the certification of an External Financial Advisor substantially as follows: We are [I am] an External Financial Advisor within the meaning of the District’s Service Plan. We [I] certify that (1) the net effective interest rate (calculated as defined in Section 32-1-103(12), C.R.S.) to be borne by the District for the [insert the designation of the Debt] does not exceed a reasonable current [tax-exempt] [taxable] interest rate, using criteria deemed appropriate by us [me] and based upon our [my] analysis of comparable high yield securities; and (2) the structure of [insert designation of the Debt], including maturities and early redemption provisions, is reasonable considering the financial circumstances of the Districts. 4. Inclusion and Exclusion Limitation. The Districts shall be entitled to include within their boundaries any property within the Project Area Boundaries without prior approval of the City Council. The Districts shall also be entitled to exclude from their boundaries any property within the Project Area Boundaries so far as, within a reasonable time thereafter, the property is included within the boundaries of another District. All other Inclusions or exclusions shall require the prior approval of the City Council by written agreement with the District. 5. Maximum Debt Authorization. The amount of Debt authorized for issuance by the Districts (the “Maximum Debt Authorization”) shall be set forth in the Service Plan Amendment. The District shall not issue or incur any Debt prior to the approval of a Service Plan Amendment. 6. Monies from Other Governmental Sources. The District shall not apply for, or accept, Conservation Trust Funds, Great Outdoors Colorado Funds, or other funds available from or through governmental or non-profit entities which the City is eligible to apply for, except pursuant to an intergovernmental agreement with the City. This Section shall not apply to specific ownership taxes which shall be distributed to and a revenue source for the Districts. 7. Consolidation Limitation. The Districts shall not file a request with any Court to consolidate with another Title 32 district without the prior written consent of the City Council. 8. Eminent Domain Limitation. The Districts shall not exercise its statutory power of eminent domain without first obtaining the prior written consent of the City Council, which will only be allowed to facilitate the construction of Public Improvements pertinent to the Project. This restriction on the Eminent Domain power by the Districts is being exercised voluntarily and shall not be interpreted in any way as a limitation on the District's sovereign powers and shall not negatively affect the District's status as a political subdivision of the State of Colorado as allowed by Article 1, Title 32, Colorado Revised Statutes. 9. Service Plan Amendment Requirement. This Service Plan is general in nature and does not include specific detail in some instances because development plans have not been finalized. After the Project has received an Approved Development Plan and upon application from the Districts, the City agrees to timely consider a Service Plan Amendment in accordance with the Special District Act, provided that the City Council shall be under no obligation to approve a Service Plan Amendment or to include any particular provisions in any Service Plan so approved. Any action of the Districts which violates the limitations set forth in this Service Plan shall be deemed to be a material modification to this Service Plan unless otherwise agreed by the City as provided for in Section IX of this Service Plan or otherwise expressly provided herein. B. Infrastructure Preliminary Development Plan. The current estimated costs of the Public Improvements are expected to be substantial and will be based upon requirements set forth in the Approved Development Plan. The Districts shall have authority to provide for the planning, design, acquisition, construction, installation, relocation, redevelopment, maintenance, and financing of the Public Improvements within and without the boundaries of the Districts, as the same are more specifically defined in the Approved Development Plan. The Infrastructure Preliminary Development Plan, including: (1) a list of the Public Improvements to be developed by the District; (2) an estimate of the cost of the Public Improvements; and (3) maps showing the approximate locations of the Public Improvements shall be consistent with the Approved Development Plan and included as part of the Service Plan Amendment. All of the Public Improvements will be designed in such a way as to ensure that the standards will be consistent with or exceed the standards of the City and shall be in accordance with the requirements of the Approved Development Plan. VI. FINANCIAL PLAN A. General. The Districts shall be authorized to provide for the planning, design, acquisition, construction, installation, relocation and/or redevelopment of the Public Improvements from its revenues and by and through the proceeds of Debt to be issued by the Districts, provided however that the Districts shall not be authorized to issue any Debt until the time that the Service Plan Amendment is approved, in the City Council’s sole discretion. B. Elections. The Districts will call an Organizational Election on the questions of organizing the Districts for an election to be held on November 8, 2016, electing the initial Board, and setting in place financial authorizations as required by TABOR. The election will be conducted as required by law. VII. ANNUAL REPORT A. General. The Districts shall be responsible for submitting an annual report with the City’s Clerk not later than September 1st of each year for the year ending the preceding December 31 following the year of the District Organization Date. The City may, in its sole discretion, waive this requirement in whole or in part. B. Reporting of Significant Events. Unless waived by the City, the annual report shall include the following: 1. A narrative summary of the progress of the Districts in implementing its service plan for the report year; and 2. Except when exemption from audit has been granted for the report year under the Local Government Audit Law, the audited financial statements of the Districts for the report year including a statement of financial condition (i.e., balance sheet) as of December 31 of the report year and the statement of operations (i.e., revenues and expenditures) for the report year; and 3. Any other information deemed relevant by the City Council or deemed reasonably necessary by the City’s Manager. In the event the annual report is not timely received by the City’s Clerk or is not fully responsive, notice of such default may be given to the Board of the Districts, at its last known address. The failure of the Districts to file the annual report within forty-five (45) days of the mailing of such default notice by the City’s Clerk may constitute a material modification, at the discretion of the City. VIII. DISSOLUTION If proceedings for a Service Plan Amendment, as contemplated herein, have not been completed within three years from the date upon which this Service Plan was approved by the City Council, the City may opt to pursue the remedies available to it under Section 32-1-701(3) C.R.S., in order to compel the Districts to dissolve in a prompt and orderly manner. In such an event: 1) the limited purposes and powers of the Districts, as authorized herein, shall automatically terminate and be expressly limited to taking only those actions that are reasonably necessary to dissolve; 2) the Board of Directors will be deemed to have agreed with the City regarding its dissolution without an election pursuant to §32-1-704(3)(b), C.R.S.; and 3) the Districts shall take no action to contest or impede the dissolution of the Districts and shall affirmatively and diligently cooperate in securing the final dissolution of the Districts, and 4) subject to the statutory requirements of the Act, the Districts shall thereupon dissolve. Upon an independent determination of the City Council that the purposes for which the Districts were created have been accomplished, the Districts agree to file a petition in Larimer County District Court for dissolution, pursuant to the applicable State statutes. In no event shall dissolution occur until the Districts have provided for the payment or discharge of all of its outstanding indebtedness and other financial obligations as required pursuant to State statutes, including operation and maintenance activities. IX. MATERIAL MODIFICATIONS Material modifications to this Service Plan may be made only in accordance with Section 32-1-207, C.R.S. Departures from the Service Plan that constitute a material modification include without limitation: 1. Actions or failures to act that create greater financial risk or burden; 2. Performance of a service or function or acquisition of a major facility that is not closely related to a service, function or facility authorized in the Service Plan; and 3. Any other action or modification that is identified in this Service Plan as a material modification. X. SANCTIONS. Should any of the Districts undertake any act prohibited under this Service Plan or fail to act as required by this Service Plan, and such act or failure to act constitutes a material modification to the Service Plan as set forth in §32-1-207, C.R.S., the City may impose one (1) or more of the following sanctions, as it deems appropriate: 1. Exercise any applicable remedy under the Act; 2. Exercise any legal remedy under the terms of any intergovernmental agreement under which the District is in default; or 3. Exercise any other legal remedy, including seeking injunctive relief against the District, to ensure compliance with the provisions of the Service Plan or applicable law. XI. CONCLUSION It is submitted that this Service Plan for the Districts, as required by Section 32-1-203(2), establishes that: 1. There is sufficient existing and projected need for organized service in the area to be serviced by the Districts; 2. The existing service in the area to be served by the Districts is inadequate for present and projected needs; 3. The Districts are capable of providing economical and sufficient service to the area within their proposed boundaries; XII. RESOLUTION OF APPROVAL The Districts agree to incorporate the City Council’s resolution of approval, including any conditions on any such approval, into the Service Plan presented to the District Court for and in Larimer County, Colorado. EXHIBIT A-1 Block 23 Metropolitan District Project Area Boundaries PARCELI: LOTS13THROUGH16,INCLUSIVE,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATE OFCOLORADO. PARCELII: LOTS1THROUGH6,INCLUSIVE,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATEOF COLORADO. PARCELIII: ALLOFLOTS7AND8ANDPARTSOFLOTS9,10AND11,ALLINBLOCK23,CITYOFFORTCOLLINS, COUNTYOFLARIMER,STATEOFCOLORADO,BEINGMOREPARTICULARLYDESCRIBEDASFOLLOWS: BEGINNINGATTHESECORNEROFSAIDLOT7,INSAIDBLOCK23,THENCENORTHALONGTHEEAST LINEOFSAIDBLOCK23,ADISTANCEOF76FEETTOAPOINTONTHEEASTLINEOFSAIDLOT9IN SAIDBLOCK23;THENCENORTHWESTERLYADISTANCEOF205.3FEETTOAPOINTINTHEWESTLINE OFSAIDLOT11INSAIDBLOCK23,SAIDPOINTBEING3.7FEETNORTHFROMTHESWCORNEROF SAIDLOT11;THENCESOUTHALONGTHEWESTLINEOFSAIDLOTS11,10,9,8AND7INSAIDBLOCK 23,ADISTANCEOF153.7FEETTOTHESWCORNEROFSAIDLOT7;THENCEEASTALONGTHESOUTH LINEOFSAIDLOT7,ADISTANCEOF190.0FEETTOTHEPOINTOFBEGINNING; AND APARTOFLOT9,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATEOFCOLORADO, WHICHBEGINSATTHENECORNEROFSAIDLOT9ANDRUNSS00DEGREESOO'00"E,24.00FEET ALONGTHEEASTLINEOFSAIDLOT9;THENCEN67DEGREES45'30"W,63.41FEETALONGTHE SOUTHERLYLINEOFTHEABANDONEDBURLINGTONNORTHERNRAILROADTOAPOINTONTHE NORTHLINEOFSAIDLOT9;THENCEN90DEGREES00'00"E,58.69FEETALONGTHESAIDNORTH LINETOTHEPOINTOFBEGINNING. EXCEPTTHATPORTIONASCONVEYEDBYDEEDRECORDEDATRECEPTIONNO.99001849. PARCELIV: LOTS10,11AND12,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATEOFCOLORADO, INCLUDINGALLVACATEDRAILROADRIGHTOFWAYS. EXCEPTTHATPORTIONCONVEYEDTOCITYOFFORTCOLLINSBYDEEDRECORDEDJANUARY9,2004 ATRECEPTIONNO.20040002331. EXHIBIT A-2 Block 23 Metropolitan District No. 1 Area Boundary PARCELI: LOTS13THROUGH16,INCLUSIVE,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATE OFCOLORADO. THATPORTIONOFTHEFOLLOWINGTHREEPARCELSBOUNDEDBETWEENTHEFIRSTFLOOR ELEVATIONANDTHEBOTTOMOFTHECEILINGJOISTSOFTHESECONDFLOOROFAYETTOBE CONSTRUCTEDBUILDINGPLANNEDONSAIDPARCELS; PARCELII: LOTS1THROUGH6,INCLUSIVE,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATEOF COLORADO. PARCELIII: ALLOFLOTS7AND8ANDPARTSOFLOTS9,10AND11,ALLINBLOCK23,CITYOFFORTCOLLINS, COUNTYOFLARIMER,STATEOFCOLORADO,BEINGMOREPARTICULARLYDESCRIBEDASFOLLOWS: BEGINNINGATTHESECORNEROFSAIDLOT7,INSAIDBLOCK23,THENCENORTHALONGTHEEAST LINEOFSAIDBLOCK23,ADISTANCEOF76FEETTOAPOINTONTHEEASTLINEOFSAIDLOT9IN SAIDBLOCK23;THENCENORTHWESTERLYADISTANCEOF205.3FEETTOAPOINTINTHEWESTLINE OFSAIDLOT11INSAIDBLOCK23,SAIDPOINTBEING3.7FEETNORTHFROMTHESWCORNEROF SAIDLOT11;THENCESOUTHALONGTHEWESTLINEOFSAIDLOTS11,10,9,8AND7INSAIDBLOCK 23,ADISTANCEOF153.7FEETTOTHESWCORNEROFSAIDLOT7;THENCEEASTALONGTHESOUTH LINEOFSAIDLOT7,ADISTANCEOF190.0FEETTOTHEPOINTOFBEGINNING; AND APARTOFLOT9,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATEOFCOLORADO, WHICHBEGINSATTHENECORNEROFSAIDLOT9ANDRUNSS00DEGREESOO'00"E,24.00FEET ALONGTHEEASTLINEOFSAIDLOT9;THENCEN67DEGREES45'30"W,63.41FEETALONGTHE SOUTHERLYLINEOFTHEABANDONEDBURLINGTONNORTHERNRAILROADTOAPOINTONTHE NORTHLINEOFSAIDLOT9;THENCEN90DEGREES00'00"E,58.69FEETALONGTHESAIDNORTH LINETOTHEPOINTOFBEGINNING. EXCEPTTHATPORTIONASCONVEYEDBYDEEDRECORDEDATRECEPTIONNO.99001849. PARCELIV: LOTS10,11AND12,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATEOFCOLORADO, INCLUDINGALLVACATEDRAILROADRIGHTOFWAYS. EXCEPTTHATPORTIONCONVEYEDTOCITYOFFORTCOLLINSBYDEEDRECORDEDJANUARY9,2004 ATRECEPTIONNO.20040002331. EXHIBIT A-3 Block 23 Metropolitan District No. 2 Area Boundary THATPORTIONOFTHEFOLLOWINGTHREEPARCELSBOUNDEDBETWEENTHETHIRDFLOOR ELEVATIONANDTHEBOTTOMOFTHECEILINGJOISTSOFTHEFIFTHFLOOROFAYETTOBE CONSTRUCTEDBUILDINGPLANNEDONSAIDPARCELS; PARCELII: LOTS1THROUGH6,INCLUSIVE,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATEOF COLORADO. PARCELIII: ALLOFLOTS7AND8ANDPARTSOFLOTS9,10AND11,ALLINBLOCK23,CITYOFFORTCOLLINS, COUNTYOFLARIMER,STATEOFCOLORADO,BEINGMOREPARTICULARLYDESCRIBEDASFOLLOWS: BEGINNINGATTHESECORNEROFSAIDLOT7,INSAIDBLOCK23,THENCENORTHALONGTHEEAST LINEOFSAIDBLOCK23,ADISTANCEOF76FEETTOAPOINTONTHEEASTLINEOFSAIDLOT9IN SAIDBLOCK23;THENCENORTHWESTERLYADISTANCEOF205.3FEETTOAPOINTINTHEWESTLINE OFSAIDLOT11INSAIDBLOCK23,SAIDPOINTBEING3.7FEETNORTHFROMTHESWCORNEROF SAIDLOT11;THENCESOUTHALONGTHEWESTLINEOFSAIDLOTS11,10,9,8AND7INSAIDBLOCK 23,ADISTANCEOF153.7FEETTOTHESWCORNEROFSAIDLOT7;THENCEEASTALONGTHESOUTH LINEOFSAIDLOT7,ADISTANCEOF190.0FEETTOTHEPOINTOFBEGINNING; AND APARTOFLOT9,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATEOFCOLORADO, WHICHBEGINSATTHENECORNEROFSAIDLOT9ANDRUNSS00DEGREESOO'00"E,24.00FEET ALONGTHEEASTLINEOFSAIDLOT9;THENCEN67DEGREES45'30"W,63.41FEETALONGTHE SOUTHERLYLINEOFTHEABANDONEDBURLINGTONNORTHERNRAILROADTOAPOINTONTHE NORTHLINEOFSAIDLOT9;THENCEN90DEGREES00'00"E,58.69FEETALONGTHESAIDNORTH LINETOTHEPOINTOFBEGINNING. EXCEPTTHATPORTIONASCONVEYEDBYDEEDRECORDEDATRECEPTIONNO.99001849. PARCELIV: LOTS10,11AND12,BLOCK23,CITYOFFORTCOLLINS,COUNTYOFLARIMER,STATEOFCOLORADO, INCLUDINGALLVACATEDRAILROADRIGHTOFWAYS. EXCEPTTHATPORTIONCONVEYEDTOCITYOFFORTCOLLINSBYDEEDRECORDEDJANUARY9,2004 ATRECEPTIONNO.20040002331. EXHIBIT B-1 Block 23 Metropolitan District No. 1-2 Project Area Boundary Map EXHIBIT B-2 Block 23 Metropolitan District No. 1 Boundary Map EXHIBIT B-3 Block 23 Metropolitan District No. 2 Boundary Map EXHIBIT C Block 23 Metropolitan District Vicinity Map EXHIBIT B in consideration be obtained of by the any City's users having of these liability, products, whether or direct, underlying indirect, data. or consequential, The City disclaims, which and arises shall or not may be arise held from liable these for any map and products all damage, or the loss, use thereof or by any person or entity. Printed: September 14, 2016 Site Parcels 0 250 500Feet © ATTACHMENT 1