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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 09/25/2018 - PUBLIC HEARING AND RESOLUTION 2018-083 APPROVING TAgenda Item 2 Item # 2 Page 1 AGENDA ITEM SUMMARY September 25, 2018 City Council STAFF Josh Birks, Economic Health Director SUBJECT Public Hearing and Resolution 2018-083 Approving the Montava Metropolitan District Nos. 1 through 7 Consolidated Service Plan. EXECUTIVE SUMMARY The purpose of this item is for City Council to consider approval of the Montava Metropolitan District Nos. 1 through 7 Consolidated Service Plan (Service Plan). The developer of the proposed Montava Development has submitted the Service Plan to support the proposed development of approximately 988.5 acres located in the northeast portion of the community near the existing AB/InBev Brewery. The development is anticipated to include 2,000 single family homes, 2,400 multi-family units, 200,000 to 400,000 square feet of office, 88,900 square feet of retail. The project has committed to provide 10 percent of housing units in a mix of for rent and for sale affordable housing. In addition, the project will deliver all units as US Department of Energy Certified Zero Energy Ready along with other commitments. A Metro District with a Mill Levy Cap of 60.00 mills has been proposed to support the project. City Council conducted a public hearing on the Service Plan at its September 4, 2018 meeting, but continued further consideration of the proposed Service Plan to its September 18, 2018 meeting and then again at the September 18 meeting to September 25, 2018, to allow additional time to refine the Public Benefit commitments and other legal aspects. The Service Plan submitted for consideration by this review includes refinements to performance assurances and commitments. STAFF RECOMMENDATION Staff recommends approval of the Resolution. BACKGROUND / DISCUSSION Under the Council Meeting Rules, the presiding officer is authorized to establish the order of proceedings for this type of item. The order of hearing that has been used for metro district service plan hearings is as follows. 1. Announcement of item, 2. Consideration of any procedural issues, 3. Explanation of the application by City staff, 4. Presentation by the applicant, 5. Public testimony regarding the application, 6. Rebuttal testimony by the applicant, 7. Councilmember questions of City staff and the applicant, and 8. Motion, discussion and vote by City Council. Montava is a multi-phase long-term development proposal located in the northeast portion of Fort Collins. The project is located in the area covered by the Mountain Vista Sub Area Plan (MVSAP). The project anticipates Agenda Item 2 Item # 2 Page 2 delivery on several key principals of the MVSAP while also providing a community that follows New Urbanist principles to promote environmentally friendly habits, walkable neighborhoods, and a variety of housing types. PROJECT OVERVIEW The proposed Metro District will support a large-scale (988.5 acres) planned development that will extend the City into the largest remaining undeveloped section of the Growth Management Area (GMA). The project anticipates constructing: • Approximately 4,400 residential units (a mix of single-family and multi-family) • A town center including 88,900 square feet of retail • Approximately 200,000 to 400,000 square feet of office • Allocating land for natural areas, schools, and a community park • A 40-acre organic farm; and • A variety of other public open spaces and trails. The project is generally located between Mountain Vista on the south, Richards Lake Road on the north, Timberline Road on the West and the train tracks on the east (Attachment 1). The project, called Montava, “Mon” for mountains and “tava” the Ute Indian work for “sun,” uses the MVSAP as its basis for design and development approach. Service Plan Revisions Since September 4, 2018 On September 4, 2018, City Council voted unanimously to postpone consideration of the proposed Consolidated Service Plan for Montava Metropolitan District Nos. 1-7 (the Service Plan). Again, on September 18, 2018 Council voted to further postpone consideration of the Service Plan to its September 25, 2018 meeting. Council had several concerns with the Service Plan as presented on September 4, 2018. The following changes have been made to the Service Plan in response to these concerns: • Further Council Approval Required – No Debt, Debt Mill Levy, or Fees to pay debt may be issued or collected until City Council approves an intergovernmental agreement and/or development agreement securing the Public Benefits (see revisions to Section IV.B(1-3)). • Operating Mill Levy cannot Exceed 10.000 Mills – Revisions removed the portion of Section IX.B.3 which previously stated that when a majority of the Board is composed of End Users then, at the board’s discretion, the Operating Mill may be increased up to 50.000 mills. With this revision, any increase the Operating Mill Levy will require a Service Plan Amendment approved by City Council. • City may Dissolve a District for Inaction – Revisions to Section XVI now empower the City, at its option, to dissolve the District if no intergovernmental agreement or development agreement has been approved by City Council within three years of Service Plan approval. • Enhanced Commitment Language – Significant revisions were made to Exhibit J, which describes the Public Benefits to be delivered by the Project. Additional details regarding these commitments is included in the Public Benefits section of this summary below. All other changes in the proposed Service Plan are either refinements in the spirit of the Model Service Plan, minor in nature, further changes for clarification, or to respond to Council’s requests for changes and clarification on September 4, 2018. A redline version of the Service Plan compared to the version submitted on September 4, 2018 is attached to provide clarity on these changes (Attachment 2). Council Follow-Up – Affordable Housing Council had several unanswered questions during the discussion of the Service Plan. Several of these questions deal with affordable housing. Generally, these questions dealt with the tension between increasing the supply of affordable housing units in Fort Collins versus the concerns over added cost burden to households by increasing property taxes with a Metro District. Agenda Item 2 Item # 2 Page 3 What is the current Area Median Income (AMI) as calculated by the United States Department of Urban Development (HUD)? Currently, HUD calculated the AMI for a four-person household at $85,100 in Fort Collins, see Table 1 below. The City’s current definition of affordable housing requires that units be priced so that a household earning 80 percent of AMI can cover the monthly cost of ownership. The current 80 percent AMI income is $68,100 for a four-person household. Table 1 Area Median Income, 4-Person Household, 2018 Percent AMI Area Median Income (AMI) HUD Classification 100% $ 85,100 Moderate Income 80% $ 68,100 Low Income 60% $ 51,060 Low Income 50% $ 42,550 Very Low Income 30% $ 25,550 Extremely Low Income Source: HUD Based on current AMI levels what would be the maximum sales price for Affordable Homes? Using standard industry assumptions regarding homeowner’s insurance costs, property tax costs and homeowner’s association dues or metro district taxes the maximum sales price has been calculated for three- person households and four-person households, see Table 2. The result is maximum sales prices ranging between $278,000 and $312,000 assuming a four percent down payment under the Federal Housing Authority loan program and a five percent interest rate. The Project anticipates providing at least 50 residential units priced within this range. The calculations below are based on conservative assumptions of Property Taxes, including Metro District property taxes. The real cost of Metro District taxes to household in a $280,000 home will be $84 a month and regular property taxes would be $153 per month for a total property tax cost of $237 per month roughly half of the amount used in the calculations below. Agenda Item 2 Item # 2 Page 4 Table 2 Estimated Maximum Sales Price by Household Size at 80 percent AMI, 2018 3 Person 4 Person 80% AMI $ 61,300 $ 68,100 Monthly Income $ 5,110 $ 5,680 Available for Housing (38%) $ 1,942 $ 2,158 Property Taxes (.072%) $ 200 $ 230 Metro Taxes/HOA Fees ($200/mo) $ 200 $ 200 Insurance (.038%) $ 110 $ 120 Monthly Mortgage Payment $ 1,432 $ 1,608 Loan Amount $ 266,800 $ 299,500 Down Payment $ 11,100 $ 12,500 Total Purchase Price $ 277,900 $ 312,000 Household Item How might Affordable Housing be delivered within a Metro District? Council discussed a concern about how a metro district can deliver affordable housing. In general, there are several methods for delivery affordable housing that might be employed by a developer. The concern is how to deliver affordable housing without adding additional property tax burden to the purchaser. One way to understand this concern is to review how affordable housing sales prices get set according to the City’s policy. There are three guiding principles to the policy: 1. Target AMI – Targets 80 percent AMI or below; 2. Affordability Period – Target is a minimum of 20-years of affordability; and 3. Income Available for Housing Cost – Limited to 38 percent of income. Following these principles, calculating a sales price that complies would require that added costs from Metro District property taxes be included within the 38 percent of income aspect of the policy. Therefore, the Affordable Housing sales price in a Metro District will be lower than outside a district. The calculations in Table 2 above show how estimated metro district costs could impact the sales price. Another way to evaluate the tension between increasing the number of units versus increased cost is to consider the manners in which housing could be delivered: • Traditional Delivery – Existing affordable housing providers could construct units within the district using their traditional funding approaches. These units would need to be rented or sold at a price point that complies with the City’s policy. The monthly cost to the user would be no different within the district than outside the district. Therefore, the housing provider would need to identify and obtain additional subsidy to cover the resulting lower sales price for a unit that will cost the same inside and outside of a district. • Land Trust – A developer could elect to transfer or sell affordable housing lots to a Land Trust operating in the State or Region. The Land Trust, typically a non-profit, would then reduce the tax burden to the Agenda Item 2 Item # 2 Page 5 occupant by removing 25 to 30 percent of property value associated with land. In addition, a Land Trust would also have to price units following the same principles – meaning that the net cost to the occupant would be consistent inside and outside a district. • Land Bank – A developer could elect to sell a portion of their property to the City’s land bank program at a market or discounted rate. These units would need to be rented or sold at a price point that complies with the City’s policy. The monthly cost to the user would be no different within the district than outside the district. As stated, the above are some examples of how a developer might deliver affordable housing while minimizing the impacts of added Metro District property taxes. However, the above list is not exhaustive. The key take-away is there are several methods to deliver affordable housing in a Metro District that does not pass added cost onto the occupants. Council Follow-Up – Zero Energy Ready Homes City Council wanted to understand the impact of the developer’s commitment to construct all homes within the project to the Department of Energy Zero Energy Ready Home (ZERH) standard. What is a ZERH and how does it differ from existing City Code? The U.S. Department of Energy (DOE) defines a ZEHR as “a high-performance home which is so energy efficient, that a renewable energy system can offset all or most of its annual energy consumption.” Practically, a ZERH home meets all the requirements of a net zero energy home less the renewable energy system, DOE requirements include: • Certified Energy Star Version 3.0 or Version 3.1 • Envelope – Fenestration to meet or exceed Energy Star requirements. Ceiling, wall, floor and slab insulation to meet 2012 or 2015 IECC levels. • Duct systems shall be located within the homes thermal and air boundary. • Hot water systems shall meet EPA WaterSense Single Family New Home specs along with other specific provisions not noted here. • Lights & appliances – Appliances shall be Energy Star qualified and 80 percent of lighting shall be Energy Star qualified. All bath and ceiling fans are Energy Star qualified. • Home must be certified EPA Indoor airPlus. • Home must meet requirements of the DOE PV-Ready checklist. What is the energy, thermal, and cost savings of a ZERH compared to a code compliant home? Recent modeling efforts comparing a ZEHR to a code compliant baseline home have netted the following results: • Approximate kilowatt hour (kWh) saving per year estimated at 1,350 kWh; • Approximate Therms (th) saving per year estimated at 300 th; and • Total cost savings compared to a baseline home of approximately $450 per year This modelling assumes the following: • Baseline assumes 2015 IECC code with local amendments and gas thermal heating; • Assumes a 2,400 square foot home with 4 bedrooms, 2 bathrooms, and a full basement; and • Utility rates are the default rates. Agenda Item 2 Item # 2 Page 6 What is the estimated CO2 avoided from a ZERH compared to a code compliant home? Converting the above energy and thermal savings avoids approximately 3.0 metric tons of CO2 equivalency each year. Therefore, the proposed 498 housing units would avoid a collective 1,500 metric tons of CO2, which is equivalent to 300 passengers vehicles being removed from the road for a year or converting 50,000 incandescent bulbs to LED bulbs. What is the anticipated impact of 500 plus ZERHs on the Utility system and infrastructure? • ZERH home standards do not fundamentally change the panel size requirements for electric service or the distribution system designs to supply and receive energy to and from the homes. • If a ZERH leverages electrification of building heat and includes charging infrastructure for electric vehicles, the panel size requirements can increase based on National Electric Code (NEC) requirements. • The peak demands (flows in and out) of the home can increase as well, which can require up-sizing of the distribution system to supply and receive energy to and from the home. If you consider the home owner as a prosumer, it requires the necessary infrastructure to move the energy in and out of the home to accommodate the energy transactions. • Although peak demands can be partially managed with a distributed storage device, to allow for full active management of future integrations with the larger bulk electric systems, it is recommended to maintain or increase the physical infrastructure designs to support the long-term reliability and flexible operations of these homes and neighborhoods. AUGUST 20, 2018 - COUNCIL FINANCE FOLLOW-UP On August 20, 2018, the Council Finance Committee reviewed the proposed Consolidated Service Plan for Montava Metropolitan District Nos. 1 through 7 (the “Service Plan”). The Committee requested additional information on several items: • Water Reduction from Non-Potable Irrigation – It is commonly considered that irrigation water in residential development accounts for 50 percent of total usage during irrigation season. Furthermore, the applicant is working with Dr. Yaling Qian at Colorado State University (CSU) to determine the best plant types and planting approaches to maximize the quality of landscaping and minimize water use. • Origin of On-site Coffin Well Water – No formal name exists for the shallow alluvial aquifer below the proposed project; however, the Water Court of Colorado has deemed the wells to be “non-tributary” meaning that pumping these wells does not negatively impact the river. Furthermore, at full build-out, with conservative water use estimates, the Project uses less than one-third of the total decreed well production. • Gray Water Use – The applicant is working with Dr. Sybil Sharvell at CSU. So far, an approach has not emerged that is a viable economic or practical option. However, the applicant remains committed to implementing gray water use where it proves viable. • Water Source/Use for the Farm – The salinity of the site’s well water is not conducive to growing vegetables. Therefore, the Farm will be served by North Poudre Irrigation Ditch (“NPIC”) water, which has been serving the quarter section south of the farm location for the past several decades. This solution requires acquisition of some water rights and a long-term lease arrangement between the applicant and the City for NPIC usage. • Manufactured Home and Construction – An early concept was to partner with Unity Homes, out of Vermont, to provide manufactured homes for the project that would be assembled in a manufacturing facility on-site. As discussions continued, it will be too difficult to begin the community with this type of housing and construction approach. However, the applicant is looking to streamline permitting and construction process to ensure all homes meet the Department of Energy Zero Energy Ready standard. Agenda Item 2 Item # 2 Page 7 METRO DISTRICTS Montava has submitted the Consolidated Service Plan for Montava Metropolitan District Nos. 1-7 (the “Service Plan”). The Metro District would be used to construct critical public infrastructure and other site costs reducing the overall development costs. Service Plan Overview The Service Plan calls for the creation of seven Metro Districts working collaboratively to deliver the proposed Montava development. The phased development is anticipated to occur over the next 25 plus years and support an estimated population of 11,073. A few highlights about the proposed Service Plan, include: • Assessed Value – Estimated to be approximately $76 million in 2029, which would be ten years into the phased development and not include full build-out • Aggregate Mill Levy – 60 mills, subject to Gallagher Adjustments • Debt Mill Levy – 40 mills may not be levied until a City Council approved development plan and/or intergovernmental agreement has been executed that delivers the pledged public benefits • Operating Mill Levy – 20 Mills to fund several on-going operations, such as but not limited to: (a) a non- potable irrigation system, and (b) a community-wide “in home” water conservation program • Maximum Debt Authorization – Anticipated to be $203 million to cover a total a portion of the estimated $325 million in public improvement costs • Regional Mill Levy – 5 Mills, anticipated to be used to fund specific transportation and/or stormwater improvements Public Improvements The Service Plans anticipate using the Debt Mill Levy to support the issuance of bonds in the maximum amount of $203 million to fund all or a portion of the following $325 million in public improvements (details available in Exhibit E and Exhibit H of the Service Plan): • Earthwork – Up to approximately $21.5 million in earthwork and site preparation costs associated with the proposed project, including significant grading associated with stormwater management linked to the Cooper Slough • Streets – Up to approximately $105.3 million to fund local residential streets, alleys, boulevards, and arterials both on- and off-site • Water Improvements – Up to $11.1 million in costs to construct potable water infrastructure both on- and off-site supporting the project • Sanitary Sewer Improvements – Up to $15.7 million in costs associated with constructing the sanitary sewer infrastructure both on- and off-site for the project • Non-potable Water – Up to $13.8 million to construct a non-potable irrigation system to server the entire development – this infrastructure will significantly reduce the projects need to acquire water rights and demand on potable water treatment facilities • Storm Sewer Improvements – Up to $10.2 million in costs to construct the main storm sewer system and infrastructure for the project (costs associated with grading is included in the Earthwork amount above) • Recreation Facilities – Up to $8 million in costs to construct on- and off-site public parks, open space, recreation facilities and/or services • Landscaping, Trails, Open Space and Farm Facilities – U to $44.2 million to install landscaping, construct trails, open space, and farm facilities • Administrative, Miscellaneous, and Engineering – Up to $47 million in costs associated with administering, managing, surveying, engineering, inspecting, testing, planning, and permitting the construction of the public improvements • Contingency – Up to $48 million in contingency assumes a 20 percent factor on top of the costs estimates provide, which are only based on a conceptual design Agenda Item 2 Item # 2 Page 8 Due to the preliminary nature of the project design and planning, the applicant has not supplied an estimate of non-basic costs. Non-basic costs are assumed to be costs that are not typical for a development of the proposed project’s type and/or size. These costs therefore, are considered extraordinary infrastructure costs. While no estimate of non-basic costs has been supplied, the conceptual planning and design of the project has uncovered several extraordinary development conditions, including: • Cooper Slough – The Cooper Slough creates several significant stormwater detention, retention, and water quality issues across the site. These impacts are complicated by the fact that the slough is not consolidated creating multiple entry points for water during a storm event. The net result is the need to manage the stormwater on the site in a variety of ways that deal with off-site conditions. This consumes a significant portion of land, approximate 150 acres or 15 percent of the District area, reducing the potential return from development and adding cost. • Utility Extension Requirements – The proposed District will be served by ELCO and Boxelder Sanitary Sewer, both are smaller districts that do not have the necessary distribution infrastructure in place to support the proposed development. A significant cost will be associated with extending this infrastructure to serve the site. • Non-potable Irrigation System – The applicant intends to serve 85 percent of the community’s irrigation need through a non-potable system. Constructing, operating, and maintain this system will have significant costs – estimated at $13.8 million to construct. Public Benefits As required by the Metro District Policy, the Service Plan will deliver several extraordinary development outcomes that support several public benefits. The applicant is committed to developing and constructing a catalytic community. However, due to the preliminary nature of the proposal, the Service Plan makes firm and formal commitments on several Public Benefits the developer intends to provide through the project. In other cases, the applicant remains committed to pursuing public benefits that exceed these commitments but cannot provide specific details at this time. Therefore, the Public benefits are split into two categories: (a) Committed Public Benefits - Items that the Service Plan commits the Developer to deliver and codify in a development agreement and/or Intergovernmental agreement before issuing debt; and (b) Other Extraordinary Public Benefits - Items that the applicant intends to deliver as part of the project that need additional research, design, and evaluation to determine feasibility. These items may or may not be included in a final Approved Development Plan and/or Intergovernmental Agreement alongside the items in the first category. Committed Public Benefits: The Public Benefits with expanded commitment language are described below (details available in Exhibit J of the Service Plan): • Large-Scale Comprehensive Master Planning – The Montava parcel, through the new Planned Unit Development (PUD) process, will be comprehensively master-planned, with an emphasis on multi-modal transportation. The PUD Master Plan will provide designs for coordinated, interconnecting trail, street, sidewalk, transit and storm drainage systems. • New Urbanist Development – The applicant has designed the project following several key New Urbanist principles which promote environmentally friendly habits, create walkable neighborhoods, and a variety of housing types and job opportunities. These principles will be implemented by one or more of the following: o Creating a mixed-use town center integrated with surrounding neighborhood fabric; o Developing the site as a series of neighborhoods with centers, based on a 5-minute walk shed; o Mixing housing types and intensities within each neighborhood; o Creating walkable streets and trails that connect meaningful destinations; o Distributing traffic through a network of connected streets; o Integrating market rate and affordable housing. Agenda Item 2 Item # 2 Page 9 • Agri-Urban Development – The MVSAP calls for integration of agricultural uses with development, the project will have a 40-acre organic farm. The land will either be donated or sold at a substantially discounted amount to the Poudre Valley Cooperative, which entity will in turn enter into a long-term lease with the farmers. The primary business model of the farm will be organic produce. • Zero Energy Ready – Residential development in the Montava PUD Master Plan will be built to the Department of Energy’s Zero Energy Ready Home “ZERH” standard. • Affordable Housing – The applicant has committed to constructing 10 percent of units as affordable or workforce housing, whether owner-occupied or leased, ranging from sixty percent to one hundred twenty percent of the Fort Collins AMI for a family of four. These units will be provided through any of the following mechanisms or any other mechanism mutually agreed upon by the Developer and the City o Through the City’s land bank program. An option contract with the City for the purchase of five acres within the Montava PUD Master Plan has been executed at a to be determined and mutually acceptable location – this contract will enable the development of approximately 100 of the affordable units and secure the units as affordable into perpetuity; o Through the collaborative effort among developers in the Mountain Vista Subarea, the City, a community land trusts and entities such as Housing Catalyst and Habitat for Humanity on a strategy for long-term affordability; o Through the sale of land by the Developer to a non-profit or for-profit builder and the development of that land as part or all of the affordable units; o Through legally enforceable reservation of acreage within the Montava PUD Master Plan for the eventual sale to an entity for development of affordable units o Through deed restrictions for a twenty year period if another method for long-term affordability does not result from the collaborative effort described above. o Furthermore, sixty-five percent of the affordable units will be delivered by one of the above methods, or other mutually agreeable method, prior to receipt of a building permit for more than fifty percent of the total housing units. The remaining thirty five percent of the affordable units shall be delivered by similar means before the last one hundred of the total housing units can received building permits. Other Extraordinary Public Benefits: The following items the developer of the proposed Project intends to develop further through research, evaluation, and financial analysis and hopes to include in the development. • Energy and Water Conservation – The Project intends to evaluate several additional opportunities to reduce the energy and water consumption of the project below average consumption levels of similar development types, including: o Residential Battery Storage – The applicant is working with Colorado State University and the City of Fort Collins Utilities to create distributed storage by providing a battery in every home o Non-potable Irrigation – The applicant’s planned non-potable irrigation system will meet 85 percent of all irrigation needs and significantly reduce the use of potable water by the project – estimated cost of $8.0 million o Community-wide In-Home Water Conservation Program – The applicant proposed purchasing water from the East Larimer County Water District (ELCO) through a master meter and “manage” individual user water consumption through allocations across the project, this could enable the project to achieve a significant reduction in overall water use • Parks and Recreation Facilities – The applicant is working with the City to deliver several park and recreation facilities in the project that would serve the northeast region of Fort Collins primarily and all residents o Community Recreation Center – The applicant intends to partner with the City to develop and construct a Community Recreation Center in the project o Poudre Library District Facility – The applicant intends to partner with the Poudre Library District to develop a library branch in the project o Community Park – The applicant is working with the City to create an 80 plus acre community park to serve the northeast region of the City Agenda Item 2 Item # 2 Page 10 • Natural Areas – The applicant is working to deliver natural areas through the project including 150 acres of stormwater land that will be landscaped to create habitat and function as a natural area providing both recreation facilities and Nature in the City • Affordable Housing – The applicant intends to deliver at least 10 percent of the residential units as affordable housing with a mix of rental and ownership products – partnerships are forming with the City (for a Land Bank parcel), Housing Catalyst, and Land Trusts such as Elevations Land Trust, which serves the Front Range market • Housing Variety – The applicant intends to deliver a variety of housing types. Policy Comparison A comparison of the proposed use of Metro District revenues to the policy is provided below in Table 3. For reference, the two Metro Districts approved by Council at its September 18th meeting are provided for comparison – Waterfield and Water’s Edge. Table 3 Metro District Policy Comparison Montava Waterfield Water's Edge Policy Mill Levy Caps 60 Mills 50 Mills 50 Mills 50 Mills Basic Infrastructure Partially Partially Not Supported To enable public benefit Eminent Domain Will Comply Will Comply Will Comply Prohibited Debt Limitation Will Comply Will Comply Will Comply 100% of Capacity Dissolution Limit Will Comply Will Comply Will Comply 40 years (end user refunding exception) Citizen Control Will Comply Will Comply Will Comply As early as possible Multiple Districts Yes Yes Yes Projected over an extended period Commercial/ Residential Ratio Mixed Use 100% Residential Residential (Phase 1); Mixed Use (Phase 2) N/A APPLICANT SERVICE PLAN REQUESTS The applicant proposing the Service Plan utilized the City’s Model Service Plan as a basis for this request. The following changes have been requested by the applicant: • Financial Plan Alternatives – The applicant has added language to Section IX.A indicating that the attached financial plan is not the only method of implementation of the District’s goals and objectives and that other financial structures may be used that must and will comply with the Service Plan. • Operating Mill Levy – The applicant has proposed modifying the language of IX.B.3 related to operating mill levy to allow for the District Board, when composed of a majority of End Users, to exceed the ten (20) mill cap indicated in the Model Service Plan, while still complying with the Aggregate Mill Levy Maximum. • Refunded Debt and Maximum Debt Authorization – The applicant has proposed changes to the language of the Model Service Plan in Section IX.B.7 indicated that “bonds, loans, notes or other instruments which have been refunded shall not count against the Maximum Debt Authorization • Maximum Debt Mill Levy Imposition Term – The applicant is asking that the 40-year maximum term for imposing the Debt Mill Levy begin running from the date each of the Metro Districts imposes its Debt Mill Levy, instead of from the date the Service Plan is approved as provided in the Model Service Plan. Agenda Item 2 Item # 2 Page 11 Performance Assurances The proposed Service Plan requires prohibits the issuance of any debt or imposition of the Debt Mill Levy or Fees to pay debt, unless and until the delivery of the Public Benefits are secured for each development phase in a manner that is approved by the City Council. This requirement can be satisfied by one or both of the following methods, as applicable: • Intergovernmental Agreement - For those Public Benefits to be provided by one or more of the Districts, each such District must enter into an intergovernmental agreement with the City agreeing to provide such Public Benefits as a legally enforceable multiple-fiscal year obligation of the District under TABOR and by securing performance of that obligation with a surety bond, letter of credit or other security acceptable to the City and all such intergovernmental agreements must be approved by the City Council by resolution; and • Approved Development Plan - For those Public Benefits to be provided by one or more Developers, each such Developer must enter into a development agreement with the City under the Developer’s applicable Approved Development Plan, which agreement must legally obligate the Developer to provide those Public Benefits before the City is required to issue building permits and certificates of occupancy for structures to be built under the Approved Development Plan for the Project or to secure such obligations with a surety bond, letter of credit or other security acceptable to the City and all such development agreements must be approved by the City Council by resolution. POLICY EVALUATION AND TRIPLE BOTTOM LINE SCAN The Metro District Policy supports the formation of a Metro District regardless of development type when a District delivers extraordinary public benefits. The public benefits should be: (1) aligned with the goals and objectives of the City whether such extraordinary public benefits are provided by the Metro District or by the entity developing the Metro District because Metro Districts exist to provide public improvements; and (2) not be practically provided by the City or an existing public entity, within a reasonable time and on a comparable basis. The Service Plan for the Montava Project delivers several proposed policy outcomes, as described in the attached matrix (Attachment 3). Triple Bottom Line – Scan An interdisciplinary staff team met to prepare a Triple Bottom Line Scan (“TBLs”) of the proposed Service Plan. The TBLs included two scenarios: (a) the proposed development compared to no development; and (b) the difference in impact from residential units constructed with the proposed Metro District versus those typically constructed in the community. The TBLs summary is available as Attachment 4. SCENARIO A: The TBLs analysis found that developing the property compared to leaving it fallow will have several potential environmental impacts, including increased consumption of land, water, and energy. However, the analysis did not find a meaningful difference between no development and the proposal for Economic or Social. SCENARIO B: The TBLs analysis found that in many ways the proposed residential construction enabled by a Metro District is no different from the residential development currently occurring in the community. However, there were a few notable differences – most significant is the anticipated energy and water savings from the standard of construction proposed and the inclusion of affordable units. Agenda Item 2 Item # 2 Page 12 FINANCIAL ASSESSMENT The Metro District Policy requires all applications for a Metro District Service Plan submit a Financial Plan to the City for review. Economic & Planning Systems prepared an analysis of the financial plan (Attachment 5). The analysis found: • EPS found that the market values used in the public revenue estimates to be reasonable. • Montava is an ambitious and large-scale development that will need to capture a significant portion of the market to achieve the proposed buildout assumptions in its Financial Plan. Montava will need to compete with other larger-scale residential and mixed-use developments planned for North Fort Collins. The fact that North Fort Collins is one of the only remaining growth areas of the city should help each of the developments meet their growth targets. • The Developer’s market study includes a grocery anchored community shopping center of approximately 90,000 square feet will be supportable based on projected growth in the trade area. Montava is well located for a retail center to serve the northeast Fort Collins area. However, there are other parcels also seeking to build neighborhood or community retail centers and likely insufficient demand to support more than one soon. • The public benefit projects have not been programmed or costed. It is therefore not possible to evaluate the economic value of these benefits against the $179.8 million of infrastructure costs that would be offset by metro district revenues. Basic Infrastructure vs. Public Benefit The Metro District Policy allows a metro districts to fund “basic infrastructure”, that which is typically expected to be provided by a developer (both in type and magnitude), when the inclusion of “basic” infrastructure offsets higher costs associated with extraordinary development outcomes that cannot directly be provided by a metro district (Defined in Exhibit A of the Metro District Policy, e.g., rooftop solar, affordable housing, etc.). The Developer has committed to provide several public benefits and has estimated their cost or value at between $228.0 million and $378.0 million. As stated by EPS, the preliminary nature of the proposed Project means that the public benefit projects have not been fully programmed or costed. Therefore, it is difficult to assess the benefits against the requested Maximum Debt Authorization of $203.0 million. Most of the public benefits will be described further in the proposed Planned Unit Development (“PUD”). City Council will be the decision-making body in the PUD review process. Therefore, City Council will have the opportunity to further understand the public benefits to be delivered by approving this Service Plan. In addition, Council will therefore have another opportunity to weigh in on the developer’s commitment to and scale of public benefits at that time. As a result, staff recommends approval of the Service Plan with the full requested Maximum Debt Authorization of $203.0 million, recognizing that additional details will be identified, described, and committed to in the PUD review. Estimated Property Taxes Table 4, shows the property tax estimates by proposed unit type from the existing tax mill and the proposed metro district. The weighted average increased cost to a home owner is approximately $1,510 annually. This amount will vary over time based on the underlying assessed value as determined by the County Assessor. Agenda Item 2 Item # 2 Page 13 Table 4 Property Tax Estimates CITY FINANCIAL IMPACTS The proposed Metro District Service Plan will not have an impact on the City’s financials. The Metro District policy includes fees designed to offset the cost of staff review and monitoring of Metro Districts. In addition, the proposed Service Plan includes a requires the following notice be included in all debt: “By acceptance of this instrument, the owner of this Debt agrees and consents to all of the limitations with respect to the payment of the principal and interest on this Debt contained herein, in the resolution of the District authorizing the issuance of this Debt and in the Service Plan of the District. This Debt is not and cannot be a Debt of the City of Fort Collins” BOARD / COMMISSION RECOMMENDATION • Unable to present to the Superboard meeting on September 6, 2018 as the agenda was too full; • Presented to Affordable Housing Board on September 6, 2018 – Draft Meeting Minutes attached (Attachment 6); • Unable to present to the Energy Board on September 13, 2018 as the agenda was too full; • Unable to present to the Air Quality Advisory Board on September 17, 2018 as the agenda was too full; PUBLIC OUTREACH No public outreach has been conducted on this item. Agenda Item 2 Item # 2 Page 14 ATTACHMENTS 1. Vicinity Map (PDF) 2. Montava Metro District Service Plan (Redline showing changes) (PDF) 3. Policy Evaluation Matrix (PDF) 4. Triple Bottom Line - Montava Metro District (PDF) 5. Market and Financial Feasibility Assessment (PDF) 6. Affordable Housing Board Minutes, September 6, 2018 (Draft) (PDF) 7. Combined Vicinity Map Northeast Fort Collins (PDF) 8. PowerPoint Presentation (PDF) I 8 § MONTAYA METRO DISTRICT FORT COLLINS, COLORADO 0 0:::: U) ROJEC �--------�� OCATION ---11 0 C) z ��R�l�C�H�A�R�D�S,..,.;;;�=mw��===;�-�- 2000 1000 0 - - 2000 --- scale 1"=2000' feet N- I w- 1- <( 1-- U) 0:::: w- r------1-z FORT COWNS, CO DA TE: JULY 2018 JOB NO. 1230.0001.00 SHEET 1 OF 1 748 Whalers Way, Suite 200 Fort Colline, Colorado Phone: 970.228.0557 il!, ______________________ rax:_e_01.22&__.0204 _ _ ATTACHMENT 1 ATTACHMENT 2 GHG Reduction 100% Zero Energy Ready; Distributed Storage Increase Density Yes, New Urbanist Affordable Housing At least 10% of units; Approx. 440 units Water/Energy Conservation 100% Zero Energy Ready; Distributed Storage; Non‐potable irrigation system; Community‐wide water conservation program Walkability/ Pedestrian Infrastructure Pedestrian and Bicycle Friendly design principles Workforce Housing N/A Multimodal Transportation Design principles applied Availability of Transit N/A Infill/ Redevelopment N/A Enhance Resiliency Cooper Slough Public Space Pocket Parks; Mixed‐Use Open Space; 150 Acres natural area Increase Renewable Capacity Distributed Storage Mixed‐Use Town Center; Housing Variety Off‐Site Contribution to Regional Transportation System Economic Health N/A PUBLIC BENEFIT/POLICY ASSESSMENT MATRIX Environmental Sustainability Critical Public Infrastructure Smart Growth Management Strategic Priorities On‐Site Transportati on system extension; Cooper Slough Improvemen Montava Metro District Nos. 1-7 The proposed Consolidated Service Plan for Montava Metropolitan District Nos. 1-7 will support the construction of a multi-phase long-term development located in the northeast portino of Fort Collins (the “Project”). The Project is located in the area covered by the Mountain Vista Sub Area Plan (MVSAP). The project anticipates delivery on several key principals of the MVSAP while also providing a community that follows New Urbanist principles to promote environmentally friendly habits, walkable neighborhoods, and a variety of housing types. The Triple Bottom Line Scan prepared for the Project evaluated two different baseline scenarios: (a) no development; and (b) traditional code based residential development without mixed-use. The following summary includes the highlights from the two scenarios (identified in bold/italics) and contrasts the results of each. Positive Consumes less land for the same number of homes - new urbanist approach to lot layout (Scenario B) Supports Climate Action Plan - all homes Zero Energy Ready (Both) Improves outdoor air quality – energy efficiency (Scenario B) Indirect education of environmental stewardship (Both) Negative Consumes additional land currently in a natural state (Scenario A) Increases construction waste (Scenario A) Decreases outdoor air quality – increased traffic (Scenario A) Positive Supports future infrastructure needs by constructing a street grid, new arterials, and regional stormwater improvements (Both) Supports talent development in the community by providing additional housing opportunity – some affordable (10 percent) (Both) Negative Impacts the cost of living by increasing property taxes for home owners, offset by energy efficiency, housing variety and price point, and affordable housing (Neutral) (Both) All other conditions are neutral (Both) Positive Agri-urban and organic farm will increase access to healthy food (Both) Town Center, Recreation Center, Community park, neighborhood parks, pocket parks, and walkability will impact social interactions (Both) Project will provide up to 440 affordable units dispersed throughout the project – supporting the City’s affordable housing goals and enhancing the inclusivity of the community (Both) Negative All other conditions are neutral (Both) Montava Metro District Nos. 1-7 SCENARIO A SCENARIO B City Council adopted a revised policy for Reviewing Metropolitan District Service Plans (the “Metro District Policy”) on August 21, 2018. The Metro District Policy allows for a wide range of projects to apply for the use of Metro Districts to offset either extraordinary costs or basic costs that enable the delivery of extraordinary development outcomes. These extraordinary outcomes cover a range of possibilities generally grouped into four categories: Environmental Sustainability, Critical Infrastructure, Smart Growth Management, and Strategic Priorities. The TBLs included two scenarios: (a) the proposed development compared to no development; and (b) the difference in impact from residential units constructed with the proposed Metro District versus those typically constructed in the community. SCENARIO A: The TBLs analysis found that developing the property compared to leaving it fallow will have several potential environmental impacts, including increased consumption of land, water, and energy. However, the analysis did not find a meaningful difference between no development and the proposal for Economic or Social. SCENARIO B: The TBLs analysis found that in many ways the proposed residential construction enabled by a Metro District is no different from the residential development currently occurring in the community. However, there were a few notable differences – most significant is the anticipated energy and water savings from the standard of construction proposed and the inclusion of affordable units. M EMORANDUM To: Josh Birks and Patrick Rowe Economic Health & Redevelopment, City of Fort Collins From: Dan Guimond and Elliot Kilham, Economic & Planning Systems Subject: Montava Metro District Market and Financial Review EPS #183080 Date: August 17, 2018 This memorandum summarizes Economic & Planning System’s (EPS) evaluation of the Financial Plan section of the Consolidated Service Plan (Service Plan) for the Montava Metropolitan Service District (District). The City is required to approve the Service Plan for a Title 32 Metropolitan District (metro district) prior to it being submitted for a vote by the electorate of the district. EPS’s third-party analysis helps to inform the City’s review and approval decision—specifically as it relates to the Financial Plan. The evaluation includes a review of the market and financial assumptions underlying the application as well as the general feasibility of the District’s Financial Plan, including public revenue and bond proceed forecasts. The evaluation also reviews the proposal against the proposed metro district policy requirement for extraordinary public benefits. Development Program Montava is a proposed 860-acre new urban planned community in North Fort Collins located east of Interstate 25 and north of Richard’s Lake Road as shown in Figure 1 at the end of this section. The proposed project is a mixed-used development with residential and commercial uses. Commercial uses include community serving retail and other service-oriented businesses supporting the residential development as well as significant office and industrial development. The project is projected to buildout over the next 25+ years; at which time, it is forecasted to include 4,465 housing units and 855,000 square feet of commercial space. ATTACHMENT 5 Memorandum August 17, 2018 Montava Metro District Review Page 2 The Developer provided a preliminary development program to D.A. Davidson, the District’s bond underwriter, as shown in Table 1. This preliminary program includes: • 2,455 single family homes with a projected market value of $450,000. • 2,010 multifamily units with a projected market value of $225,000. • 210,000 square feet of retail with a projected market value of $150 per square foot. • 200,000 square feet of office with a projected market value of $200 per square foot. • 445,000 square feet of industrial with a projected market value of $100 per square foot. Table 1 Proposed Montava Development Program and Market Values The Developer plans to begin platting the development so that the first finished lot is completed in 2019. The proposed buildout or vertical construction of Montava is estimated to take place over a 25-year period from period from 2020 to 2044, as shown in Table 2. • Single Family: The first single family residential houses are projected to be completed in 2020 with buildout finishing in 2034, an average rate of 164 homes per year. • Multifamily: The first multifamily units are projected to be completed in 2020 with buildout finishing in 2042, an average rate of 87 units per year. • Retail: The first retail space is projected to be completed in 2020 with buildout finishing in 2042, an average rate of 9,130 square feet per year. • Office: The first office space is projected to be completed in 2023 with buildout finishing in 2044, an average rate of 9,091 square feet per year. • Industrial: The first industrial space is projected to be completed in 2020 with buildout finishing in 2038, an average rate of 23,421 square feet per year. The preliminary program is used as inputs into D.A. Davidson’s estimate of bond proceeds and draft bond series offerings. As the basis for the Financial Plan, EPS focused its market assessment on these inputs. However, the program is subject to change. In addition, the Developer has also announced an intention to build a “new urbanist” development with a variety Description Amount % Total Market Value 2018 $ Residential Units $/Unit Single Family 2,455 55% $450,000 Multifamily 2,010 45% $225,000 Total/Weighted Avg. 4,465 100% $348,712 Commercial Sq. Ft. $/Sq. Ft. Retail 210,000 25% $150 Office 200,000 23% $200 Industrial 445,000 52% $100 Total/Weighted Avg. 855,000 100% $136 Source: DA Davidson; Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 3 of residential housing products of various sizes and densities, not just single family and multifamily units. The Developer has undertaken preliminary design work to begin to define this more detailed program and has hired DPZ CoDesign, a noted new urbanist design firm, to lead these efforts. These preliminary efforts, however, have yet to define price ranges for the various housing products, making a market evaluation premature at this time. Table 2 Proposed Montava Buildout Residential (Units) Commercial (Sq. Ft.) Description Single Family Multifamily Total Retail Office Industrial Total Year 2018 0 0 0 0 0 0 0 2019 0 0 0 0 0 0 0 2020 160 50 210 20,000 0 30,000 50,000 2021 175 150 325 20,000 0 40,000 60,000 2022 170 125 295 20,000 0 20,000 40,000 2023 180 100 280 25,000 15,000 0 40,000 2024 180 0 180 25,000 0 30,000 55,000 2025 180 180 360 0 25,000 0 25,000 2026 180 90 270 10,000 10,000 40,000 60,000 2027 160 90 250 10,000 10,000 0 20,000 2028 175 180 355 10,000 0 40,000 50,000 2029 175 80 255 0 10,000 0 10,000 2030 160 100 260 10,000 10,000 40,000 60,000 2031 130 0 130 10,000 0 0 10,000 2032 140 0 140 20,000 0 50,000 70,000 2033 150 100 250 0 30,000 50,000 80,000 2034 140 100 240 10,000 20,000 30,000 60,000 2035 0 120 120 0 0 0 0 2036 0 110 110 0 0 50,000 50,000 2037 0 100 100 10,000 0 0 10,000 2038 0 110 110 0 10,000 25,000 35,000 2039 0 75 75 0 0 0 0 2040 0 0 0 0 20,000 0 20,000 2041 0 75 75 0 0 0 0 2042 0 75 75 10,000 20,000 0 30,000 2043 0 0 0 0 10,000 0 10,000 2044 0 0 0 0 10,000 0 10,000 2045 0 0 0 0 0 0 0 Summary Total 2,455 2,010 4,465 210,000 200,000 445,000 855,000 Average [1] 164 87 194 9,130 9,091 23,421 34,200 [1] Average betw een the first and last year of build-out Source: DA Davidson; Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 4 Figure 1 Montava Metro District Vicinity Map Diagram Memorandum August 17, 2018 Montava Metro District Review Page 5 Metro District Proposal Summary The Service Plan proposes to form seven separate metro districts. The districts will have the ability to impose an aggregate mill levy of 60 mills, which includes a Debt Mill Levy and an Operating Mill Levy. The Operating Mill Levy can equal up to 60 mills until the District imposes a Debt Mill Levy, at which point the Operating Mill Levy cannot exceed 20 mills. While District levies are capped at 60 mills, the Service Plan allows for adjustments to the mill levies in the event that there are changes to the method of calculating assessed value or any other changes impacting the revenue generating capabilities of the District. In such cases, the District may increase or decrease mill levies to ensure that actual tax revenues generated are not diminished. This ability helps to further guarantee future revenue streams and reduce the risk for the bond holders. The Debt Mill Levy is expected to be used to finance public improvements listed in Exhibit E of the Service Plan. The Developer’s engineering consultant estimates that the total cost of the public improvements will be approximately $325 million, and the Developer anticipates issuing approximately $203 million in debt to fund a portion of these public improvement costs. Metro District Policy The City is currently considering updating its policy originally adopted in 2008 for reviewing proposed metro district service plans. The new policy update proposes to remove previous limitations for metro district to be 90 percent commercial and not to be used to fund “basic infrastructure improvements normally required from new development”. In their place, the policy requires that developers deliver “extraordinary public benefits” to the City. In addition, the new policy would increase the recommended maximum mill levy for both debt service and O&M to 50 mills—up from 40 mills in the 2008 resolution. The proposed Montava maximum aggregate mill levy of 60 mills exceeds this recommended maximum mill levy. While the District may not end up using the full mill levy, the Service Plan gives the District the flexibility to do so. Memorandum August 17, 2018 Montava Metro District Review Page 6 Market Assessment This section reviews market values and buildout/absorption assumptions used to estimate the potential public financing revenues and debt capacity of the project, as described in the proposed Financial Plan. The section is organized into the four different land use types proposed for the development: residential, retail, office, and industrial. Residential Market Values To help determine their reasonableness, EPS compared the market value assumptions used the in the Financial Plan’s debt capacity estimates with recent sales in Fort Collins. In addition, EPS compared Montava’s proposed market values with other comparable developments in the Fort Collins area. Recent Sales The Developer’s proposed market values fall near the average of recent sales in the Fort Collins market. The Fort Collins Board of Realtors’ (FCBR) reports that the average price of a single family home sold in Fort Collins in 2018 was $457,002. CoStar, a real estate database service, reports that the average sales price for an apartment unit in the past year was $210,725, as shown in Table 3. • Single Family: The Financial Plan uses a market value of $450,000 or 1.5 percent less than the average of recent sales. As a result, the proposed values are in line with market averages and are appropriately conservative for use in public revenue estimates. • Multifamily: The Financial Plan uses a market value of $225,000 for multifamily units. This is 6.8 percent greater than the average apartment unit price of $210,725, as reported in CoStar. This average, however, includes both new and existing apartment buildings. It should be expected that a new construction unit would trade at a premium to the market average. Table 3 Proposed Montava Market Values Compared to Average Prices in Fort Collin’s Market Description Single Family Multifamily Service Plan $450,000 $225,000 Average Price $457,002 $210,725 Difference -$7,002 $14,275 % Difference -1.5% 6.8% Source: DA Davidson; FCBR; CoStar; Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 7 North Fort Collins Projects This section compares Montava to other recent for-sale residential projects in the North Fort Collins market area. This comparison reveals that Montava’s price points for single family homes largely overlap with the price ranges proposed in recent residential projects, as shown Table 4 and Figure 2. At a proposed 4,465 units, however, Montava would be one of the largest residential development projects in Fort Collins. Table 4 For-Sale Residential Projects in the North Fort Collins Market Figure 2 Price Range in Comparable Residential Projects and Montava Project Status Project Start Product Units Price Compable Projects Single-Family $350,000-$650,000 Townhomes $300,000-$430,000 Condos $230,000-$450,000 Single-Family 18 $540,000-$570,000 Townhomes 37 $327,500-$360,000 Timbervine Under Construction 2017 Single-Family 146 $346,000-$390,000 East Ridge Approved --- Single-Family 568 $300,000-$400,000 Waterfield Single-Family 2,455 $450,000 Multifamily 2,010 $225,000 *Total housing units for all product types Source: Zillow; FCBR; DA Davidson; Economic & Planning Systems Proposed Development Proposed 2018 Old Town North Third Phase 2007 450-500* Revive Under Construction 2015 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Old Town North Revive Timbervine East Ridge Waterfield Price Range Source: Zillow; FCBR; DA Davidson; Economic & Planning Systems Montava Single Family Home Memorandum August 17, 2018 Montava Metro District Review Page 8 Absorption EPS compared the planned buildout to forecasted future demand for specific housing products. We calculated future housing demand as part of our work on the update to Fort Collins City Plan, organizing these estimates into low density (single family homes), middle density (2- to 20-unit buildings), and high density (20 or more unit buildings) housing products. (More detail on EPS’s housing demand estimate is shown in Table 6 on the following page.) Based on this comparison, EPS calculated an implied capture rate by Montava to gain a perspective on the size and reasonableness of the proposed building plan. From 2016 to 2040, EPS estimates that there will be a demand of 570 low density units and 701 middle and high density units per year, for a total annual average of 1,270 units. In comparison, the Developer proposes to buildout Montava at an average of 164 low density, single family homes per year from 2020 to 2034 and 87 multifamily units from 2020 to 2042. EPS assumed that Montava’s multifamily units will be a mix of middle and high density housing types. This development schedule implies a capture rate of 29 percent for low density products and 12 percent for middle and high density units. In total, the proposed schedule implies a 20 percent capture rate. A capture rate of 20 percent is a significant portion of the residential development market in the Fort Collins market, and may be relatively aggressive. Overall, it is a large and ambitious development, and its success depends on its ability to attract a large segment of the market. The fact that the development seems to be targeting the middle of the market in terms of prices and has a variety of housing types should help it attract a wider market demand segment. Ultimately, Montava’s ability to meet this implied capture rate will depend on size of the pipeline and its competitive position against other projects. There are currently of number of proposed large-scale residential developments in North Fort Collins, including Waterfield and Water’s Edge, that will compete with Montava. However, North Fort Collins is one of the few remaining growth area of the city, meaning that Montava may have less competition from other areas of the city. Table 5 Montava Development Implied Residential Capture Rate Waterfield Fort Collins Waterfield Description Average Annual Avg [3] Capture % [4] 2016-2040 Low Density [1] 164 570 29% Middle + High Density [2] 87 701 12% Subtotal 251 1,270 20% [1] Based on definitions from the CityPlan estimate, low density housing includes Single Family homes [2] Based on definitions from the CityPlan estimate, middle and high density includes all Multifamily units. [3] Annual average from CityPlan housing demand forecast completed by EPS. [4] Capture % = Waterfield Average / Fort Collins Average. Source: Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 9 Table 6 Fort Collins City Plan Future Housing Demand Estimates Retail Development Market Values For its public revenue estimates, the Montava Financial Plan assumed that the retail space in the development will have a market value of $150 per square foot. To benchmark this assumption, EPS compared it to the historical five-year average sales price per square foot of retail space in the Fort Collins market and to the capitalized value of retail space. Capitalized value was calculated by dividing the five-year average retail rent per square foot by the five-year average capitalization rate in the Fort Collins market. Both benchmarks are greater than the assumption used in the Montava’s Financial Plan, as shown in Table 7. The five-year average sales price in Fort Collins is $214 per square foot or 43 percent greater than the Montava assumption. The capitalized value of retail space over the last five years was approximately $241 per square foot or 60 percent greater than the Montava assumption. As a result of these comparison, EPS concludes that the market value used in the Financial Plan is relatively conservative. Using a higher retail market value more closely aligned with market averages in the Financial Plan would increase the estimated public revenues from the development and may allow the Developer to lower the proposed maximum mill levy, which currently exceeds the City’s recommended maximums. Table 7 Retail Market Value Comparison 2016 2040 Description Amount % Total Amount % Total Total Ann. # Ann. % Low Density 42,254 66% 55,926 59% 13,672 570 1.2% Middle Density 14,891 23% 20,998 22% 6,108 254 1.4% High Density 6,590 10% 17,296 18% 10,706 446 4.1% Total 63,735 100% 94,220 100% 30,485 1,270 1.6% Source: Economic & Planning Systems 2016-2040 Sales Price Capitalized Montava Description Per Sq. Ft. [1] Value [2] Assumption Market Value ($/Sq. Ft.) $214.00 $240.73 $150.00 % Difference [2] -43% -60% 0% [1] 5-year average sales price per sq. ft. [3] Percent difference from the market value assumption. Source: CoStar; Economic & Planning Systems [2] Capitalized value equals the 5-year average rent divided by the 5-year average capitalization rate or $15.89 / 6.60%. Memorandum August 17, 2018 Montava Metro District Review Page 10 Retail Demand and Buildout The Developer commissioned a market study by Gibbs Planning Group to determine the amount of supportable retail. Based on an estimated retail trade area roughly equating to a six-mile radius surrounding the proposed Montava development as well as estimates of population growth (including buildout of Montava) and of average household income within the trade area, Gibbs Planning Group calculated total potential supportable retail space to equal 88,900 square feet. This total demand is broken out into different retail types, as shown in Table 8. The demand essentially represents a grocery-anchored community retail center, with a variety of full and limited service restaurants, bars and breweries, and other ancillary retail surrounding the anchor. EPS reviewed the market report commissioned by the Developer and concludes that the North Fort Collins market is a significant growth area of the city and will likely be able to support a community retail center sometime in the future. However, in the Financial Plan, the Developer proposes to build retail space simultaneous with the residential portion of the development, as shown in Figure 3. More realistically, the retail development would not occur until the trade area has reached certain household thresholds that would be supportive of an anchor grocery store. This grocery store would then spur ancillary retail space in the development. In addition, Montava will likely face competition for this retail demand. For example, the proposed Water’s Edge metro district is planning to build 70,000 square feet of retail. Based on the Developer’s market study, there isn’t enough retail demand to support two community centers in the near future. Table 8 Montava Potential Supportable Retail Description Amount % Total Sq. Ft. Grocery Stores 25,000 28% Full-Service Retaurants 17,000 19% Limited-Service Eating Places 16,600 19% Parmacy 5,300 6% Apparel & Shoe Stoes 5,000 6% Mics. Store Retailers 3,700 4% General Merchandise Stores 3,400 4% Bars, Breweries & Pubs 2,900 3% Specialty Food Stores 2,900 3% Home Furnishing Stores 1,800 2% Special Food Services 1,700 2% Office Supplies & Gift Stores 1,400 2% Electronics & Applicances Stores 1,300 1% Jewelry Stores 900 1% Total 88,900 100% Source: Gibbs Planning Group, Inc.; Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 11 The Montava proposal includes a total of 210,000 square feet of retail space over the 2020 to 2045 timeframe. This equates to 48 square feet per household within Montava. With the exception of 30,000 square feet, the development of this additional commercial space is tied to residential development over the 2020 to 2034 timeframe. Figure 3 Proposed Retail and Residential Development 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 0 50,000 100,000 150,000 200,000 250,000 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 CumulativeHouseholds Retail Space Cumulative Retail Space Households Source: Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 12 Office Development Market Values The Montava Financial Plan assumed that the office space in the development will have a market value of $200 per square foot. To benchmark this assumption, EPS compared it to the five-year average sales price per square foot of office space in Fort Collins and to the capitalized value of office space. Capitalized value was calculated by dividing the five-year average office rent per square foot by the five-year average capitalization rate in the Fort Collins market. The Montava assumption is 22 percent greater than the average sales price, which was $157 per square foot, and 2 percent greater than the capitalized value at $195 per square foot, as shown in Table 9. Given the fact that it will be new space but in a relatively new market area, EPS finds the Montava assumption to be appropriately conservative. Table 9 Office Market Value Comparison Absorption EPS benchmarked Montava’s proposed office development against historic office development in the city to calculate an implied capture rate, as shown in Table 10. From 2023 to 2044, the Developer proposes to build an average of 9,091 square feet of office per year. Over the last 18 years, from 2000 to 2017, the city delivered an average 134,430 square feet of office space per year. As a result, the Montava proposal implies a capture rate of 7 percent per year relative to the historical average. EPS finds that a 7 percent capture rate is a reasonable target for the development. However, we note that the office market in North Fort Collins is immature. In the short to medium term, much of the office will be residential-service based uses. Similar to retail, these uses may not develop until a certain threshold population is reached. Table 10 Montava Development Implied Office Capture Rate Sales Price Capitalized Montava Description Per Sq. Ft. [1] Value [2] Assumption Market Value ($/Sq. Ft.) $157.00 $195.55 $200.00 % Difference [2] 22% 2% 0% [1] 5-year average sales price per sq. ft. [3] Percent difference from the market value assumption. Source: CoStar; Economic & Planning Systems [2] Capitalized value equals the 5-year average rent divided by the 5-year average capitalization rate or $14.67 / 7.50%. Montava Fort Collins Montava Description Annual Avg Annual Avg Capture % 2023-2044 2000-2017 Office 9,091 134,430 7% [1] Capture % = Montava Average / Fort Collins Average. Source: City of Fort Collins; Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 13 Industrial Development Market Values The Montava Financial Plan assumed that the industrial space in the development will have a market value of $100 per square foot. To benchmark this assumption, EPS compared it to the five-year average sales price per square foot of office space in Fort Collins to the capitalized value of industrial space. Capitalized value was calculated by dividing the five-year average industrial rent per square foot by the five-year average capitalization rate in the Fort Collins market. The Montava assumption is 15 percent greater than the average sales price, which was $85 per square foot, and 12 percent less than the capitalized value at $112 per square foot, as shown in Table 11. EPS finds that the market value assumption is realistic and appropriately conservative. Table 11 Industrial Market Value Comparison Absorption EPS benchmarked Montava’s proposed industrial development against historic industrial development in the city to calculate an implied capture rate, as shown in Table 12. From 2022 to 2038, the Developer proposes to build an average of 23,421 square feet of industrial space per year. Over the last 18 years, from 2000 to 2017, the city delivered an average 141,826 square feet of industrial space per year. As a result, the Montava proposal implies a capture rate of 17 percent per year relative to the historical average. EPS finds that a 17 percent capture rate is a relatively aggressive, though not unachievable target for the development. Table 12 Montava Development Implied Office Capture Rate Sales Price Capitalized Montava Description Per Sq. Ft. [1] Value [2] Assumption Market Value ($/Sq. Ft.) $85.00 $111.82 $100.00 % Difference [2] 15% -12% 0% [1] 5-year average sales price per sq. ft. [3] Percent difference from the market value assumption. Source: CoStar; Economic & Planning Systems [2] Capitalized value equals the 5-year average rent divided by the 5-year average capitalization rate or $8.50 / 7.60%. Montava Fort Collins Montava Description Annual Avg Annual Avg Capture % 2022-2038 2000-2017 Industrial/Flex 23,421 141,826 17% [1] Capture % = Montava Average / Fort Collins Average. Source: City of Fort Collins; Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 14 Financial Analysis The Service Plan proposes to use the stream of revenues raised from mill levies to issue debt in the form of bonds. These bond proceeds will be used to reimburse the Developer for public improvement costs. This section reviews proposed public improvement costs and the revenue and debt estimates described in the metro district Service Plan. Public Improvement Costs TST Inc. Consulting Engineers provided the public improvement cost estimates used in the Service Plan. Overall, public improvements associated with the development are estimated to be approximately $325 million, as shown in Table 13. Many of these costs are basic infrastructure improvements typically required for development, including earthwork, streets, sanitary sewer, water, and storm water infrastructure improvements. It is important to note that these cost estimates are preliminary and will likely change as the development plan evolves and becomes more detailed. The Developer proposes to issue debt generating approximately $180 million in project proceeds, as shown in Table 13. This debt would cover 55 percent of the total public improvements costs. The Developer would need to cover the remaining $145 million or 45 percent of total costs with other funds. Table 13 Public Infrastructure and Estimated Costs Description Amount % Total Public Improvement Costs Administrative & Misc. $11,000,000 3% Earthwork $21,499,312 7% Streets (Onsite & Offsite) $105,255,350 32% Sanitary Sewer (Onsite & Offsite) $15,732,500 5% Water (Onsite & Offsite) $11,081,500 3% Nonpotable Water (Onsite & Offsite) $13,814,500 4% Storm Water (Onsite & Offsite) $10,286,290 3% Recreation Facilities $8,000,000 2% Landscaping, Trails, Open Space, and Farm Facilities $44,215,395 14% Construction Costs $240,884,847 74% Contingency (20% of Construction Costs) $48,176,969 15% Engineering/Survey/C.M. (15% ofConstruction Costs) $36,132,727 11% Total $325,194,543 100% Metro District Impact Project Funds $179,778,140 55% Other Funds $145,416,403 45% Total $325,194,543 100% Source: TST, Inc.; Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 15 Revenue Estimates Proposed Mill Levies and Facility Fee The proposed maximum District Mill Levy of 60 mills is relatively common and within the distribution of similar metro districts in Colorado. The 60 mills would be added onto to the existing property tax levy of 90.828 mills and increase the property tax burden by 66 percent. For the residential portion of the property, the maximum District Mill Levy would result in an average of $1,500 per year or $125 per month of additional cost to the tenant. For the commercial portion of the property, the maximum District Mill Levy would result in an average of $2.36 per square feet of additional property tax cost per year, as shown in Table 14. Table 14 Metro District Mill Levies Market Assessed Property Tax Description Value Value Existing District Total 90.828 mills 60.000 mills 150.828 mills Residential (Units) 7.20% Single Family $450,000 $32,400 $2,943 $1,944 $4,887 Multifamily $225,000 $16,200 $1,471 $972 $2,443 Weighted Average $348,712 $25,107 $2,280 $1,506 $3,787 % Total 60% 40% 100% Commercial ($/SF) 29.00% Retail $150 $44 $3.95 $2.61 $6.56 Office $200 $58 $5.27 $3.48 $8.75 Industrial $100 $29 $2.63 $1.74 $4.37 Weighted Average $136 $39 $3.57 $2.36 $5.93 % Total 60% 40% 0% Source: DA Davidson; Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 16 Public Revenue Forecasts and Bond Proceeds D.A. Davidson, the District’s financial advisor, estimates that the metro district will generate a total of approximately $462 million in revenues from Debt Mill Levy collections, as shown in Table 15. The market value and absorption assumptions described in the Market Assessment section of this memorandum are the main drivers of these revenue estimates. A reduction in the proposed market values for the residential and commercial development and/or extended buildout and absorption schedule will reduce the total bond proceeds. The underwriting process and bond structure includes reserve funds and capitalized interest mitigate difference between forecasted and actual values relating to market values, buildout schedule, and other variables. These public revenues will be used to generate approximately $179 million that can be used to reimburse the Developer for infrastructure expenditures related to the public improvements. D.A. Davidson anticipates issuing the debt in six separate bond series, as shown in Table 16. Table 15 Montava Metro District Public Revenue and Project Funds Table 16 Estimated Bond Proceeds by Series Description Amount % Total Public Revenues Bond Proceeds $202,747,000 44% Interest $259,538,171 56% Total $462,285,171 100% Project Funds Bond Proceeds $202,747,000 Reserve Fund -$15,010,550 Cost of Issuance -$7,958,310 Total $179,778,140 Source: D.A. Davidson; Economic & Planning Systems Bond Series Description 2023A 2027A 2031A 2035A 2039A 2044A 2019B Total Bond Proceeds $40,425,000 $42,075,000 $40,995,000 $38,300,000 $14,635,000 $11,160,000 $15,157,000 $202,747,000 Reserve Fund -$3,235,008 -$3,367,208 -$3,280,808 -$3,065,133 -$1,168,742 -$893,650 $0 -$15,010,550 Cost of Issuance -$1,617,000 -$1,683,000 -$1,639,800 -$1,532,000 -$585,400 -$446,400 -$454,710 -$7,958,310 Project Fund $35,572,992 $37,024,792 $36,074,392 $33,702,867 $12,880,858 $9,819,950 $14,702,290 $179,778,140 Source: D.A. Davidson; Economic & Planning Systems Memorandum August 17, 2018 Montava Metro District Review Page 17 Public Benefits The City’s proposed policy for reviewing metro districts supports the formation of a district “where it will deliver extraordinary public benefits that align with the goals and objectives of the City”. The proposed policy goes on to define four focus areas or types of benefits that meet this policy as follows: • Environmental Sustainability Outcomes – defined as public improvements that provide environmental benefits including reduction in greenhouse gases, water or energy conservation, community resiliency against natural disasters, renewable energy capacity, and/or other environmental outcomes. • Critical Public Infrastructure – public improvements that address significant infrastructure needs previously identified by the City. • Smart Growth Management – public improvements that facilitate design that increases development density, enhances walkability, increases the availability of transit or multimodal facilities, and/or encourages mixed use development patterns. • Strategic Priorities – public improvements that address City priorities including affordable housing, infill or redevelopment, and economic health improvements (e.g., job growth business retention, or construction of a missing economic resource). Exhibit K of the Service Plan describes the proposed public benefits of the Montava project. The Developer is able to provide these public benefits in part due to the District bonds that reimburse the developer for public improvement costs. More specifically, by reimbursing basic infrastructure investments typically associated with development with District bond proceeds, the Developer is able to invest more money into public benefits the City views as priorities. These include environmental sustainability, critical public infrastructure, smart growth management, and strategic priorities like affordable housing. As described in the Service Plan, the primary public benefit of Montava is its new urbanist design, which follows many smart growth management principles, including: denser development; mixed-use town centers; walkable communities; a variety of housing options; and multi-modal transportation options. The development also plans to include energy and water conservation initiatives. For example, the Developer has indicated that every home will meet the U.S. Department of Energy’s Zero Energy Ready Home Standard and the U.S. Environmental Protection Agency’s WaterSense Guidelines. The Developer also intends for at least 10 percent of the total housing units to be affordable, in addition to a number of other benefits described in Exhibit K. The Developer has not provided any information on the costs/value of different proposed public benefits, and how the District Bond helps to offset these cost by funding basic infrastructure. Overall, the Service Plan does not guarantee the delivery of public benefits. Public benefits will have to be vetted and guaranteed through additional approval steps for the metro district, including approval of the development plan. Memorandum August 17, 2018 Montava Metro District Review Page 18 Summary and Conclusions • The proposed Montava maximum aggregate mill levy of 60 mills exceeds the maximum mill levy of 40 mills in the City’s current metro district policy and the maximum mill levy of 50 mills in the proposed new policy. • EPS generally finds that the market values used in the public revenue estimates to be reasonable. These assumptions align with market averages, given a new construction premium, and the residential market values are comparable to other recent developments in North Fort Collins. • Montava is an ambitious and large-scale development that will need to capture a significant portion of the market to achieve the proposed buildout assumptions in its Financial Plan. In particular, Montava will need to compete with other larger-scale residential and mixed-use developments planned for North Fort Collins. The fact that North Fort Collins is one of the only remaining growth areas of the city should help each of the developments meet their growth targets. • The Developer’s market study includes a grocery anchored community shopping center of approximately 90,000 square feet will be supportable based on projected growth in the trade area. Montava is well located for a retail center to serve the northeast Fort Collins area. However, there are other parcels also seeking to build neighborhood or community retail centers and likely insufficient demand to support more than one in the near future. • As outlined in Exhibit K Public Benefits, the Service Plan proposes an extensive list of public improvement that potentially meet the City’s proposed metro district criteria for extraordinary public benefits including: denser development; mixed-use town centers; walkable communities; a variety of housing options; and multi-modal transportation options. The development also plans to include energy and water conservation initiatives. The Developer also intends for at least 10 percent of the total housing units to be affordable, in addition to a number of other benefits described in Exhibit K. • However these potential projects have not been programmed or costed. It is therefore not possible to evaluate the economic value of these benefits against the $179.8 million of infrastructure costs that would be offset by metro district revenues. DRAFT MINUTES CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD Date: Thursday, September 6, 2018 Location: Colorado River Room, 222 Laporte Avenue Time: 4:00–6:00pm For Reference Diane Cohn, Chair Ken Summers, Council Liaison Sue Beck-Ferkiss, Staff Liaison 970-221-6753 Board Members Present Board Members Absent Diane Cohn Curt Lyons Catherine Costlow Jen Bray Kristin Fritz Rachel Auldridge Jeffrey Johnson Staff Present Sue Beck-Ferkiss, Social Policy & Housing Project Manager Brittany Depew, Administrative Assistant/Board Support Josh Birks, Director of Economic Health Office Tim McCollough, Deputy Director, Utilities Joe Wimmer, City Manager’s Office Call to order: 4:02 Agenda Review: Added Josh Birks to discuss Metro Districts Public Comment: None Review and Approval of Minutes AGENDA ITEM 2: 100% Renewables—Tim McCollough, Deputy Director of Utilities Light and Power Fort Collins Partners for Clean Energy, made up of many organizations with shared common value around renewable energy, hope to achieve goal of 100% renewables by 2030. Council asked staff to review this goal. Working with Platte River Power Authority (PRPA)—Fort Collins Utilities is the retail utility provider, and Fort Collins owns part of PRPA and has two seats on their board. Six other board members from the other three co-owning communities. Underlying principals are shared: reliability, financial sustainability, environmental stewardship. Received direction from Council to address this goal and conduct outreach. Going back to Council in October. If adopted, this would provide input to many upcoming processes. Main question arising is “How much will this cost?” August minutes will be approved in October. ATTACHMENT 6 2 | P a g e Utility costs greatly impact housing affordability. How you define renewable energy can vary greatly. Trying to answer the question, “Is this a mandate or a goal?” Three questions for this board: 1. Do you support the proposed resolution? 2. Does this resolution align with your board’s charter? 3. Is there specific feedback you would send to Council regarding this Resolution? Comments/Q&A: • Jeff: What are the other municipalities involved with Platte River? o Tim: Longmont, Loveland, Estes Park o Jeff: Do they have resolutions? o Tim: Longmont does, adopted in January 2018 • Jeff: When I look at what the City has done with water, and now time-of-day change for utilities, it seems like a lot of the cost increases are based on environmental goals and that passes the cost onto the consumer. Would this layer onto that? o Tim: Our energy costs already include Platte River’s wholesale cost, if we need to do something different for the infrastructure. That’s balanced by lower costs of certain types of renewable energy, like wind. It’s not a foregone conclusion that switching to 100% renewable would increase the cost for consumers. • Diane: Would this resolution impact developers? o Tim: This speaks to the supply side, not the consumer side. No direct tie to development requirements. • Sue: Does the resolution set any boundaries around prices? o Tim: There is a section that speaks to residential and business affordable. • Diane: I know the utilities department has recently added additional discounts. o Sue: Income qualified assistance program. o Diane: I assume this will fall under that and not directly impact it? o Tim: This wouldn’t directly impact that program at all. • Sue: Is staff submitting this with the recommendation to adopt it? o Tim: We are submitting to Council for their consideration and will not be providing a recommendation one way or the other. • Curt: What percent of electricity is generated right now with fossil fuels? How much are we trying to replace? o Tim: In 2017, about 67% was from fossil-based or carbon-based generation, but that’s declining. By 2020, we expect to see 50% from renewable sources. • Catherine: Why do we feel like we need to be the driver here rather than Platte River? o Tim: That’s a great question and speaks to the tension happening between the other groups as well. • Jeff: You said staff is not taking a position, can you say why? o Tim: We have taken a position and that was that we needed more planning time before setting this goal. • Sue: To summarize, the Affordable Housing Board feels there’s a lot of information that would be valuable in determining if a resolution is appropriate and would like to see the City find out more information before the resolution is passed. 3 | P a g e o Tim: Specifically about how it may impact housing affordability? o Sue: Yes, exactly. AGENDA ITEM 1: City Manager’s Recommended Budget and Ways to Comment—Sue Beck- Ferkiss, Social Sustainability The budget proposal has been released and boards and commissions have been asked to review and provide any recommendations to David Young by September 28. Budgeting for Outcomes (BFO) process takes places every other year, offers submitted by departments as “sellers,” include ongoing offer and enhancements. Very few enhancements are going to be funded this year. The recommended budget now goes to the Budget Lead Team (BLT) to make adjustments. Council will be discussing this outcome area (NLSH) on September 11. Social Sustainability’s ongoing budget is included, as well as Homelessness Initiatives enhancement and the Affordable Housing Capital Fund. The line items in white are being recommended for funding and those in gray are not. Comments/Q&A: • Diane: So this budget is for 2019-2020? o Sue: Yes. • Curt: Is there a short answer why the budget is so tight this year? o Sue: Not really. I think it has to do with the retail revolution and we’re very sales tax- oriented. • Sue: In this budget cycle, we got an additional $100k for human service funding, and that is not being included in the next budget at this time. o Catherine: Wasn’t that $100k already committed? o Sue: Yes, but only through 2018. • Catherine: Who ranked these? o Sue: This is the City Manager’s recommended budget. o Catherine: So they went through and ranked everything? o Sue: This is a huge process and the budget teams provide their recommendations to the City Manager. • Kristin: What are “housing access supports”? o Sue: It’s for waivers and a middle-income homebuyer assistance program, and it’s not currently included in the recommended budget. • Jeff: What’s the downtown ambassador program that’s not being funded? o Josh Birks: The DBA has been running this program for the last three years to provide ambassadors downtown to help visitors, also on the street working closely with Outreach Fort Collins (OFC) to keep an eye on inappropriate behaviors. o Sue: Funding for OFC is included in the homelessness initiatives, which is currently recommended for funding. • Curt: What’s the “land use code amendment”? o Sue: It’s not coming out of our office so I’m not sure. o Kristin: I hope that’s not the implementation step of City Plan. • Jen: You mentioned a middle-income homebuyer assistance (HBA) program pilot? o Sue: That’s the housing access support, and that’s also where waivers are. o Jen: That’s for home purchase? o Sue: Yes. 4 | P a g e o Diane: How much was requested for each? o Sue: $500k for waivers and $150k for HBA. If the budget gets passed as is, we wouldn’t have waiver money set aside, we would have to request it as we’ve been doing. • Catherine: This is a lot to digest and it would be helpful to see what is being asked in each offer. o Sue: I can send out the narratives to the board. • Sue: the Land Bank acquisition is for $1 million and to exercise an option I have negotiated with Montava, which would be medium-density and mixed-use. o Catherine: Do you need to exercise your option during this budget cycle, or could it happen in the next one? o Sue: We don’t know the timing because a lot of things have to fall into place. But if things fell in place quickly and it’s not in the budget, it could be a good interim ask mid-cycle. o Diane: So the urgency may not be as strong with this one? o Sue: The timing is difficult to predict. It’s certainly important but I don’t know if the timing is critical now. • Sue: The homelessness coordinator might be a good one to talk about. This request was to hire another staff person in Social Sustainability to coordinate this work. o Rachel: Why is this perceived as not necessary? o Sue: I think they see the importance, it’s ranked highly, they just couldn’t find the money for it. Balance competing interest. o Catherine: I think that request amount seems high. o Kristin: To Social Sustainability’s credit, there is so much going on at the local and regional level and we’re not eligible for funds if these systems aren’t in place. Without staff to really lead these, it doesn’t happen. • Diane: Let’s do a quick vote to decide if we should comment on these as a board. Starting with homelessness coordinator. o Curt: I’m a little uncomfortable saying something should get funded in place of something else without knowing the whole picture. o Sue: Let’s see if there’s anything on the list you all feel strongly enough about. Homelessness coordinator sounds like it’s mixed, the housing access supports is for waivers and middle-income homebuyer assistance. o Diane: I’m yes on the waivers. Since there’s no fund that is just for waivers, I think it would be nice to aim for. o Kristin: In terms of commenting as a board, this one feels the most important and relevant. • Sue: Land Use code amendments, two-year plan to revamp it? o Kristin: There’s no point in City Plan updates if there’s no Land Use code to support them. o Jeff: If the City Manager doesn’t want to fund the Land Use code updates because City Plan isn’t passed yet, I understand that. o Curt: So the next opportunity to fund would be 2021? o Sue: If this doesn’t get funded, there would be no clear money to get it funded until sometime in the future. 5 | P a g e AGENDA ITEM 3: Metro District Proposal & Affordable Housing—Josh Birks, Economic Health Director Metro districts are separate and independent districts, most are single purpose. Relatively common with over 1,600 in Colorado. Used by communities to advance normal course of development, achieve enhanced development outcomes. Would create new tax residents pay, used to fund public improvements, typically infrastructure. The policy in Fort Collins says you may use the tool only if you provide other community outcomes and objectives. Waterfield – 100 acres, new urbanist alley load project, increased density, 500 units, including 50 affordable units at 80% AMI or below. Montava—25+ year multi-phase project, 1,000 acre property, 4400 residential units, 10% affordable at 80% AMI (not a formal commitment but a goal), Water’s Edge—55+ age-targeted, age-in-place design, 235 acres, 847 units w/ phase two 469 units including 46 affordable. Opportunity vs. trade- offs—increased supply (potential to add nearly 600 units, housing diversity), concern over added cost (added tax, average 55% increase in property tax, how this tax burden impacts affordability). Comments/Q&A: • Jeff: What’s the density on Montava? o Josh: It’s new urbanist so it’s on the higher range of our density allowance, with a wide range of housing types. o Curt: This would be mixed use? o Josh: Yes, definitely. • Jen: Would these be affordable for 20 years? o Josh: We’re still working those details out but that’s what we’re talking about. • Jen: I’ve seen metro districts adding $80-$250/month to property tax payment o Josh: The 50 mils [used to assess property tax], 40 goes to debt and 10 goes to operations and maintenance, can take the place of an HOA. o Dianne: And you can’t do an HOA on top of this? o Josh: You can. We could create an IGA that says the developer won’t, but without a formal agreement, they could also add an HOA. • Josh: The board of these districts are residents, when the debt is gone, they could remove the 40 mil additional property tax, but the board could decide to continue taxing themselves. • Jeff: It seems an IGA would have more teeth than a development agreement. o Josh: The IGA is between the City and the district; not all of the objectives can be met by the district, so you need both an IGA and a development agreement. Won’t give a certification of occupancy until we confirm x or y, based on the IGA and development agreement. • Jen: These metro districts are being brought to Council because they include affordable housing? o Josh: All metro districts are required to go to their government entity for approval of their service plan. o Jen: Having worked with a lot of first time homebuyers and in metro taxing districts, to pass the tax burden onto the affordable units is counterintuitive. I think the affordable units have to be excluded from that calculation. o Josh: There are ways to ensure the impact of that added tax doesn’t change the affordability of the 80% units. The clearest way is to carve out the lots and say they’re outside of the district. Another way is to use a land trust model, and the land trust would be tax exempt (reducing land value). The sales price the builder offersWe require the sales prices the builder offers the units for to be affordable. 6 | P a g e • Sue: It sounds like the Affordable Housing Board supports the idea of metro districts and the way they increase density and affordable housing stock, and the board is also concerned about the increased tax burden and how that would impact the true affordability of these units. The board would want a commitment of affordability from the developers from the beginning. AGENDA ITEM 4: Business A. Council Comments—not discussed B. Review 2017 Work Plan—not discussed C. Open Board Discussion—not discussed D. Liaison Reports—not discussed AGENDA ITEM 4: Board Member Reports A. Fee Work Group & City Plan Housing Group Discussion—Diane AGENDA ITEM 5: Other Business A. Future AHB Meeting Agendas A. City Council Six-Month Planning Calendar—not discussed Meeting Adjourned: 6:20 Next Meeting: October 11 at Housing Catalyst Combined Vicinity Map Shows all three proposed Metro Districts in the Northeast portion of Fort Collins Legend Montava Waterfield Water's Edge Phase 1 Water's Edge Phase 2 2 mi N ➤➤ N © 2018 Google © 2018 Google © 2018 Google ATTACHMENT 7 1 Montava Metro District Service Plan Jeff Mihelich & Josh Birks 9-25-18 ATTACHMENT 8 Presentation Overview 1. Timeline Considerations 2. Community Benefits 3. Metro District Commitments 4. Answers to Council Questions 5. Staff Recommendation 2 Timeline Considerations 3 Metro District Policy Revision Metro District Process Timing Caught Between - Extended Revision Process & Firm Election Deadline May 15, 2017 Aug. 29, 2017 Oct. 24, 2017 Nov. 28, 2017 Mar. 19, 2018 July 10, 2018 Aug. 21, 2018 Policy Adopted (Council) Revised Policy & Model Service Plan (Council WS) Draft Policy (Council Finance) Overview Of Changes (Council WS) Background On Metro Districts (Council WS) Revision Approach (Council Finance) Consider Revision (Council Finance) Sept. 4, 2018 Nov. 2018 May 2018 July 2018 Typical Submittal Actual Submittal Council Review Project Description  25+ Year Multi Phase Master Planned Project  Increased density  4,400 Residential Units  10% affordable 4 Community Wide Benefits  Affordable Housing  Energy Efficiency  Non-potable Water  Agri-Urban Development  Schools  Community Park & Natural Areas 5 Commitments: Affordable Housing Affordability 10% of Units; Approx. 440 units 60% to 120% of AMI 20+ Years Ownership & Rental Delivery Land Bank; 5 Acres Option (Perpetuity) Strategic Partners (Habitat, Housing Catalyst) Community Land Trust Sale or Set Aside Other Items 65% of units prior to half of the project 35% before final 100 building permits Deed Restrictions as fall back position 6 Commitments: Efficiency & Conservation Energy 100% of units DOE Zero Energy Ready ~13,200 Metric Tons C02e Avoided HERS Rating in Low 40s Water Non-potable System 50% to 60% Potable Water Savings (Irrigation) Other Items “In Home” water conservation approach Partnering with Fort Collins Utilities Collaborating with CSU (Gray Water, Etc.) 7 Commitments: Parks, Natural Area, Agri-Urban Parks Integration w/ Town Center 80+ Acres District May Fund Portions Natural Area 160 acres storm water land Natural Area Amenity Nature in the City Agri-Urban 40-acre organic farm Poudre Valley Cooperative Organic Produce 8 Commitments: Others Schools High School Site relocated Elementary Middle School Housing Variety Multiple Neighborhoods Variety within Wide Range of Pricing New Urbanism Mixed Use Town Center Distribute Traffic through a Network Walkable Streets & Trails Integrate Market Rate & Affordable Housing 9 Changes to Service Plan 1. No Debt or Debt Mill until Council approves Development Agreement and/or Intergovernmental Agreement 2. Removed ability to expand the Operating Mill Levy beyond 10 Mills once the Board is composed of a majority of end users 3. City may dissolve the district if no Development Agreement or Intergovernmental Agreement has been approved within 3 years 4. Enhanced commitment language related to public benefits 5. Debt Mill Levy Imposition Term – 40 Years from first imposition of the Debt Mill Levy 10 Affordable Housing Percent AMI Area Median Income (AMI) HUD Classification 100% $ 85,100 Moderate Income 80% $ 68,100 Low Income 60% $ 51,060 Low Income 50% $ 42,550 Very Low Income 30% $ 25,550 Extremely Low Income 3 Person 4 Person 80% AMI $ 61,300 $ 68,100 Monthly Income $ 5,110 $ 5,680 Available for Housing (38%) $ 1,942 $ 2,158 Property Taxes (.072%) $ 200 $ 230 Metro Taxes/HOA Fees ($200/mo) $ 200 $ 200 Insurance (.038%) $ 110 $ 120 Monthly Mortgage Payment $ 1,432 $ 1,608 Loan Amount $ 266,800 $ 299,500 Down Payment $ 11,100 $ 12,500 Total Purchase Price $ 277,900 $ 312,000 ItemHousehold 11 2018, 4 Person Household Source: Housing & Urban Development, US Gov’t; Social Sustainability Zero Energy Ready Home Baseline Home:  2015 IECC Code with local options Zero Energy Ready Home:  Generates as much energy as consumes  Certified Energy Star Ver. 3 or 3.1  Duct Systems in thermal and air boundary  Lights & Appliances – Energy Star Qualified (80% of lighting)  Meet DOE PV-Ready checklist 12 Average HERS Rating – 58 to 62 Average HERS Rating – Low 40s Zero Energy Ready Home Zero Energy Ready Home (ZEHR) – Impact  Approximate kWh saving / year = 1,350 kWh  Approximate Therms saving / year = 300 th  Estimated Metric Tons of CO2 equivalent avoided / year = 3  Total Annual savings compared to Baseline home: $450 (Assumptions: Baseline was 2015 IECC code, with gas thermal heating. 2,400 Square foot home with 4 Bedrooms, 2 Baths, and a full basement. Utility rates are default rates.) 13 Staff Recommendation  Staff recommends adoption of the resolution 14 15 Northeast Fort Collins -1- RESOLUTION 2018-083 OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS APPROVING THE CONSOLIDATED SERVICE PLAN FOR MONTAVA METROPOLITAN DISTRICT NOS. 1-7 WHEREAS, Title 32 of the Colorado Revised Statutes (“C.R.S.”) authorizes the formation of various kinds of governmental entities to finance and operate public services and infrastructure, including metropolitan districts; and WHEREAS, in July 2008, the City Council adopted Resolution 2008-069 in which it approved a policy setting forth various guidelines, requirements and criteria concerning the City’s review and approval of service plans for metropolitan districts (the “2008 Policy”); and WHEREAS, on August 21, 2018, City Council adopted Resolution 2018-079 approving the “City of Fort Collins Policy for Reviewing Service Plans for Metropolitan Districts” (the “2018 Policy”) setting forth guidelines, requirements and criteria applicable to the City’s consideration a metropolitan district service plan to replace and supersede those in the 2008 Policy, except for the fee and notice requirements when they have been satisfied by a service plan applicant under the 2008 Policy before the adoption of the 2018 Policy; and WHEREAS, pursuant to the provisions of Article 1 of Title 32 of the Colorado Revised Statutes (the “Special District Act”), HF2M, INC. (the “Petitioner”) has submitted to the City a Consolidated Service Plan (the “Service Plan”) for the Montava Metropolitan District Nos. 1-7 (each a “District” and collectively the “Districts”); and WHEREAS, a copy of the Service Plan is attached as Exhibit “A” and incorporated herein by reference; and WHEREAS, the Districts will be organized to provide for the planning, design, acquisition, construction, installation, relocation, redevelopment and operation and maintenance of all or a portion of certain public improvements, as more specifically described in the Service Plan; and WHEREAS, in accordance with the 2008 Policy and Resolution 2018-079, the Petitioner has complied with the requirement for mailed notice of the City Council’s September 4, 2018, public hearing on the Service Plan (the “Public Hearing”), as evidenced by the “Certificate of Mailing of Notice of Public Hearing” attached as Exhibit “B” and incorporated herein by reference; and WHEREAS, the Petitioner has also provided notice of the Public Hearing by publication as evidence by the “Affidavit of Publication” attached as Exhibit “C” and incorporated herein by reference; and WHEREAS, on September 4, 2018, the City Council conducted the Public Hearing in which it reviewed the Service Plan and considered the testimony and evidence presented and then voted to continue the Public Hearing to its September 18, 2018 meeting; and -2- WHEREAS, at its September 18, 2018 meeting, the City Council voted, at the request of City Staff and the Service Plan applicant, to again postpone and continue its consideration of the Service Plan until its adjourned September 25, 2018 meeting; and WHEREAS, the City Council has received and considered additional evidence concerning the Service Plan during its September 25, 2018, continued hearing on the Service Plan; and 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 Section 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. 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 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 regarding the property within the Districts. -3- Passed and adopted at an adjourned meeting of the Council of the City of Fort Collins this 25th day of September, A.D. 2018. _________________________________ Mayor ATTEST: _____________________________ City Clerk i CONSOLIDATED SERVICE PLAN FOR MONTAVA METROPOLITAN DISTRICT NOS. 1-7 CITY OF FORT COLLINS, COLORADO Prepared by: White Bear Ankele Tanaka & Waldron, Professional Corporation 2154 E. Commons Ave., Suite 2000 Centennial, CO 80122 Submitted On: August 29, 2018 Resubmitted On: September 19, 2018 Approved On: ____________, 2018 EXHIBIT A ii TABLE OF CONTENTS I. INTRODUCTION ................................................................................................................... 6 A. Purpose and Intent. ............................................................................................................... 6 B. Need for the Districts. .......................................................................................................... 6 C. Objective of the City Regarding Districts' Service Plan. ..................................................... 7 D. City Approvals. .................................................................................................................... 7 II. DEFINITIONS ........................................................................................................................ 7 III. BOUNDARIES AND LOCATION ................................................................................... 10 IV. DESCRIPTION OF PROJECT, PLANNED DEVELOPMENT, PUBLIC BENEFITS & ASSESSED VALUATION .......................................................................................................... 11 A. Project and Planned Development. .................................................................................... 11 B. Public Benefits. .................................................................................................................. 12 C. Assessed Valuation. ........................................................................................................... 12 V. INCLUSION OF LAND IN THE SERVICE AREA ............................................................ 13 VI. DISTRICT GOVERNANCE ............................................................................................. 13 VII. AUTHORIZED AND PROHIBITED POWERS .............................................................. 13 B. Prohibited Improvements and Services and other Restrictions and Limitations. ................ 13 1. Eminent Domain Restriction .......................................................................................... 14 2. Fee Limitation ................................................................................................................ 14 3. Operations and Maintenance .......................................................................................... 14 4. Fire Protection Restriction ............................................................................................. 14 5. Public Safety Services Restriction ................................................................................. 15 6. Grants from Governmental Agencies Restriction .......................................................... 15 7. Golf Course Construction Restriction ............................................................................ 15 8. Television Relay and Translation Restriction ................................................................ 15 9. Sales and Use Tax Exemption Limitation ...................................................................... 15 11. Sub-district Restriction ............................................................................................... 15 12. Privately Placed Debt Limitation ............................................................................... 16 13. Special Assessments ................................................................................................... 16 VIII. PUBLIC IMPROVEMENTS AND ESTIMATED COSTS .............................................. 16 A. Development Standards. .................................................................................................... 17 iii B. Contracting. ........................................................................................................................ 17 C. Land Acquisition and Conveyance. ................................................................................... 17 D. Equal Employment and Discrimination. ............................................................................ 18 IX. FINANCIAL PLAN/PROPOSED DEBT.......................................................................... 18 A. Financial Plan..................................................................................................................... 18 B. Mill Levies. ........................................................................................................................ 19 1. Aggregate Mill Levy Maximum ........................................................................................ 19 2. Regional Mill Levy Not Included in Other Mill Levies .................................................... 19 3. Operating Mill Levy .......................................................................................................... 19 4. Gallagher Adjustments ...................................................................................................... 19 5. Excessive Mill Levy Pledges ............................................................................................. 19 6. Refunding Debt.................................................................................................................. 19 7. Maximum Debt Authorization ........................................................................................... 20 C. Maximum Voted Interest Rate and Underwriting Discount. ............................................. 20 D. Interest Rate and Underwriting Discount Certification. .................................................... 20 E. Disclosure to Purchasers. ................................................................................................... 20 F. External Financial Advisor. ............................................................................................... 21 G. Disclosure to Debt Purchasers. .......................................................................................... 21 H. Security for Debt. ............................................................................................................... 22 I. TABOR Compliance. ......................................................................................................... 22 J. Districts’ Operating Costs. ................................................................................................. 22 X. REGIONAL IMPROVEMENTS .......................................................................................... 22 A. Regional Mill Levy Authority. .......................................................................................... 22 B. Regional Mill Levy Imposition. ......................................................................................... 23 C. City Notice Regarding Regional Improvements. ............................................................... 23 D. Regional Improvements Authorized Under Service Plan. ................................................. 23 E. Expenditure of Regional Mil Levy Revenues. ................................................................... 23 F. Regional Mill Levy Term. ................................................................................................. 23 G. Completion of Regional Improvements. ............................................................................ 24 H. City Authority to Require Imposition. ............................................................................... 24 I. Regional Mill Levy Not Included in Other Mill Levies. ................................................... 24 J. Gallagher Adjustment. ....................................................................................................... 24 iv XI. CITY FEES ........................................................................................................................ 24 XII. BANKRUPTCY LIMITATIONS ...................................................................................... 24 XIII. ANNUAL REPORTS AND BOARD MEETINGS .......................................................... 25 A. General. .............................................................................................................................. 25 B. Board Meetings. ................................................................................................................. 25 C. Report Requirements. ........................................................................................................ 25 D. Reporting of Significant Events. ........................................................................................ 26 E. Failure to Submit................................................................................................................ 27 XIV. SERVICE PLAN AMENDMENTS .................................................................................. 27 XV. MATERIAL MODIFICATIONS ...................................................................................... 27 XVI. DISSOLUTION ................................................................................................................. 28 XVII. SANCTIONS ..................................................................................................................... 28 XVIII. CONCLUSION .............................................................................................................. 29 XIX. RESOLUTION OF APPROVAL ...................................................................................... 29 5 EXHIBITS EXHIBIT A Legal Description of Initial District Boundaries EXHIBIT B Initial District Boundary Map EXHIBIT C Legal Description of Inclusion Area Boundaries EXHIBIT D Inclusion Area Boundary Map EXHIBIT E Public Improvements EXHIBIT F Vicinity Map EXHIBIT G Public Improvement Cost Estimates EXHIBIT H Public Improvements Maps EXHIBIT I Financial Plan EXHIBIT J Public Benefits EXHIBIT K Disclosure Notice 6 I. INTRODUCTION A. Purpose and Intent. The Districts, which are intended to be independent units of local government separate and distinct from the City, are governed by this Service Plan, the Special District Act and other applicable State law. Except as may otherwise be provided for by State law, City Code or this Service Plan, the Districts' activities are subject to review and approval by the City Council only insofar as they are a material modification of this Service Plan under C.R.S. Section 32-1-207 of the Special District Act. It is intended that the Districts will provide all or part of the Public Improvements for the Project for the use and benefit of all anticipated inhabitants and taxpayers of the Districts. The primary purpose of the Districts will be to finance the construction of a portion of these Public Improvements by the issuance of Debt. It is also intended under this Service Plan that no District shall be authorized to issue any Debt, impose a Debt Mill Levy or impose any Fees for payment of Debt unless and until the delivery of the applicable Public Benefits describe in Section IV.B of this Service Plan has been secured in accordance with Section IV.B of this Service Plan. It is further intended that this Service Plan requires the Districts to pay a portion of the cost of the Regional Improvements, as provided in Section X of this Service Plan, as part of ensuring that those privately-owned properties to be developed in the District that benefit from the Regional Improvements pay a reasonable share of the associated costs. The Districts are not intended to provide ongoing operations and maintenance services except as expressly authorized in this Service Plan. It is the intent of the Districts to dissolve upon payment or defeasance of all Debt incurred or upon a court determination that adequate provision has been made for the payment of all Debt, except that if the Districts are authorized in this Service Plan to perform continuing operating or maintenance functions, the Districts shall continue in existence for the sole purpose of providing such functions and shall retain only the powers necessary to impose and collect the taxes or Fees authorized in this Service Plan to pay for the costs of those functions. It is intended that the Districts shall comply with the provisions of this Service Plan and that the City may enforce any non-compliance with these provisions as provided in Section XVII of this Service Plan. B. Need for the Districts. There are currently no other governmental entities, including the City, located in the immediate vicinity of the Districts that consider it desirable, feasible or practical to 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 7 necessary in order for the Public Improvements required for the Project to be provided in the most economic manner possible. C. Objective of the City Regarding Districts' Service Plan. The City’s objective in approving this Service Plan 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, but in doing so, to also establish in this Service Plan the means by which both the Regional Improvements and the Public Benefits will be provided.. Except as specifically provided in this Service Plan, all Debt is expected to be repaid by taxes and Fees imposed and collected for no longer than the Maximum Debt Mill Levy Imposition Term for residential properties, and at a tax mill levy no higher than the Maximum Debt Mill Levy. Fees imposed for the payment of Debt shall be due no later than upon the issuance of a building permit unless a majority of the Board which imposes such a Fee is composed of End Users as provided in Section VII.B.2 of this Service Plan. Debt which is issued within these parameters and, as further described in the Financial Plan, will insulate property owners from excessive tax and Fee burdens to support the servicing of the Debt and will result in a timely and reasonable discharge of the Debt. D. City Approvals. Any provision in this Service Plan requiring “City” or “City Council” approval or consent shall require the City Council’s prior written approval or consent exercised in its sole discretion. Any provision in this Service Plan requiring “City Manager” approval or consent shall require the City Manager’s prior written approval or consent exercised in the City Manager’s sole discretion. II. DEFINITIONS In this Service Plan, the following words, terms and phrases which appear in a capitalized format shall have the meaning indicated below, unless the context clearly requires otherwise: Aggregate Mill Levy: means the total mill levy resulting from adding a District’s Debt Mill Levy and Operating Mill Levy. A District’s Aggregate Mill Levy does not include any Regional Mill Levy that the District may levy. Aggregate Mill Levy Maximum: means the maximum number of combined mills that each District may levy for its Debt Mill Levy and Operating Mill Levy, at a rate not to exceed the limitation set in Section IX.B.1 of this Service Plan. Approved Development Plan: means a City-approved development plan or other land-use application required by the City Code for identifying, among other things, public improvements necessary for facilitating the development of property within the Service Area, which plan shall include, without limitation, any PUD or development agreement required by the City Code. 8 Board or Boards: means the duly constituted 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, notes or other multiple fiscal year financial obligations for the payment of which a District has promised to impose an ad valorem property tax mill levy, Fees or other legally available revenue. Such terms do not include contracts through which a District procures or provides services or tangible property. City: means the City of Fort Collins, Colorado, a home rule municipality. City Code: means collectively the City’s Municipal Charter, Municipal Code, Land Use Code and ordinances as all are now existing and hereafter amended. City Council: means the City Council of the City of Fort Collins, Colorado. City Manager: means the City Manager of the City of Fort Collins, Colorado. C.R.S.: means the Colorado Revised Statutes. Debt Mill Levy: means a property tax mill levy imposed on Taxable Property within a District for the purpose of paying Debt as authorized in this Service Plan, at a rate not to exceed the limitations set in Section IX.B of this Service Plan. Developer: means a person or entity that is the owner of property or owner of contractual rights to property in the Service Area that intends to develop the property. District: means any one of the Montava Metropolitan District Nos. 1 through 7, individually, organized under and governed by this Service Plan. Districts: means the Montava Metropolitan District Nos. 1 through 7, collectively, organized under and governed by this Service Plan. End User: means any owner, or tenant of any owner, of any property within the Districts, who is intended to become burdened by the imposition of ad valorem property taxes and/or Fees. By way of illustration, a resident homeowner, renter, commercial property owner or commercial tenant is an End User. A Developer and any person or entity that constructs homes or commercial structures is not an End User. 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 9 not an officer or employee of the Districts or an underwriter of the Districts’ Debt. Fees: means the fees, rates, tolls, penalties and charges the Districts are authorized to impose and collect under this Service Plan. Financial Plan: means the Financial Plan described in Section IX of this Service Plan which was prepared by D.A. Davidson & Company in accordance with the requirements of this Service Plan and describes (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 and any Fees for the first budget year through the year in which all District Debt is expected to be defeased or paid in the ordinary course. Inclusion Area Boundaries: means the boundaries of the property that is anticipated to be added to the District Boundaries after the Districts’ organization, which property is legally described in Exhibit C attached hereto and incorporated by reference and depicted in the map attached hereto as Exhibit D and incorporated herein by reference. Initial District Boundaries: means the boundaries of the area legally described in Exhibit A attached hereto and incorporated by reference and as depicted in the Initial District Boundary Map. Initial District Boundary Map: means the map of the District Boundaries attached hereto as Exhibit B and incorporated by reference. Maximum Debt Authorization: means the total Debt the Districts are permitted to issue as set forth in Section IX.B.8 of this Service Plan. Maximum Debt Mill Levy Imposition Term: means the maximum term during which a District’s Debt Mill Levy may be imposed on property developed in the Service Area for residential use, which shall include residential properties in a mixed-use development. This maximum term shall not exceed forty (40) years from December 31 of the year of the first imposition of the Debt Mill Levy. Operating Mill Levy: means a property tax mill levy imposed on Taxable Property for the purpose of funding District administration, operations and maintenance as authorized in this Service Plan, including, without limitation, repair and replacement of Public Improvements, and imposed at a rate not to exceed the limitations set in Section IX.B of this Service Plan. Planned Development: means the private development or redevelopment of the properties in the Service Area, commonly referred to as the Montava development, under an Approved Development Plan. Project: means the installation and construction of the Public Improvements for the Planned Development. 10 Public Improvements: means the improvements and infrastructure the Districts are authorized by this Service Plan to fund and construct for the Planned Development to serve the future taxpayers and inhabitants of the Districts, except as specifically limited in this Service Plan. Public Improvements shall include, without limitation, the improvements and infrastructure described in Exhibit E attached hereto and incorporated by reference. Public Improvements do not include Regional Improvements. Regional Improvements: means any regional public improvement identified by the City as provided in Section X of this Service Plan, for funding, in whole or part, by a Regional Mill Levy levied by the Districts. Regional Mill Levy: means the property tax mill tax imposed on Taxable Property for the purpose of planning, designing, acquiring, funding, constructing, installing, relocating and/or redeveloping the Regional Improvements and/or to fund the administration and overhead costs related to the Regional Improvements as provided in Section X of this Service Plan. Service Area: means the property within the Initial District Boundaries and the property in the Inclusion Area Boundaries. Special District Act: means Article 1 in Title 32 of the Colorado Revised Statutes, as amended. Service Plan: means this service plan for the Districts approved by the City Council. Service Plan Amendment: means a material modification of the Service Plan approved by the City Council in accordance with the Special District Act, this Service Plan and any other applicable law. State: means the State of Colorado. TABOR: means Colorado’s Taxpayer’s Bill of Rights in Article X, Section 20 of the Colorado Constitution. Taxable Property: means the real and personal property within the Initial District Boundaries and within the Inclusion Area Boundaries when added to the District Boundaries that will subject to the ad valorem taxes imposed by the Districts. Vicinity Map: means the map attached hereto as Exhibit F and incorporated by reference depicting the location of the Service Area within the regional area surrounding it. III. BOUNDARIES AND LOCATION The area of the Initial District Boundaries includes approximately 10 acres and the total area proposed to be included in the Inclusion Area Boundaries is approximately 988.5 acres. A legal description and map of the Initial District Boundaries are attached hereto as Exhibit A and 11 Exhibit B, respectively. A legal description and map of the Inclusion Area Boundaries are attached hereto as Exhibit C and Exhibit D, respectively. It is anticipated that the Districts’ boundaries may expand or contract from time to time as the Districts undertake inclusions or exclusions pursuant to the Special District Act, subject to the limitations set forth in this Service Plan. The location of the Service Area is depicted in the vicinity map attached as Exhibit F. IV. DESCRIPTION OF PROJECT, PLANNED DEVELOPMENT, PUBLIC BENEFITS & ASSESSED VALUATION A. Project and Planned Development. The Districts are intended to enable the Montava Vision and Master Plan (the “Master Plan”). The Master Plan is the result of an unprecedented collaborative effort including: public meetings, a weeklong public charrette, and extensive City Staff involvement. The foundation of the 860-acre development is the Mountain Vista Sub Area Plan (the MVSAP), City Plan, and the Climate Action Plan. Montava will be a unique community - the name itself is a combination of “Mon” for our ever-present mountains and the Ute Indian word “tava,” which means “sun”. “Mountain Sun” is both a reflection of the history and beauty of our area, and a commitment to renewable energy which is a foundational principal of the Project. Montava is planned as an extension of the City by providing a town center connected to surrounding development with community commercial and retail services including grocery, full and limited service restaurants, coffee and juice bar, service-oriented businesses like insurance/hair/legal, City Recreation Center, Poudre Library, and many more uses. The transportation plan will tie the Project into the surrounding community including downtown Fort Collins. Any employment that is enabled by the Project will provide opportunity for anyone in the surrounding areas. Montava is a community that will serve all of Fort Collins. In a study commissioned by the Developer of the Project, Bob Gibbs Consulting, projects by 2022 that Montava will have statistical market demand of up to 88,900 square feet and new retail development producing up to $27.5 million in sales. At full build out, total additional demand could grow to 218,000 square feet of new retail development and $70.1 million in gross sales annually. The Project is currently anticipated to contain between 200,000 and 400,000 square feet of office for employment opportunity, and between 70-100 acres of light and green industrial development, and residential development including approximately 2,000 single family homes and 2,400 multi-family units in a wide variety of types, sizes, and configurations. The anticipated population at build-out, which is anticipated to occur over 25+ years, is approximately 11,073 persons. The total assessed value at 5 years (2024) is estimated to be $36,593,000, and the total assessed value at 10 years (2029) is estimated to be $76,202,500. The total City tax paid in 5 years is estimated to be $968,739 and total City tax paid in 10 years is estimated to be $3,643,555. Approval of this Service Plan by the City Council does not imply approval of the development of any particular land-use for any specific area within the Districts. Any such approval must be contained within an Approved Development Plan. 12 B. Public Benefits. In addition to providing a portion of the Public Improvements and Regional Improvements, the organization of the Districts is intended to enable the Project to deliver a number of extraordinary direct and indirect public benefits, including: smart growth management through (i) Large-Scale Comprehensive Master Planning, (ii) New Urbanism, (iii) Argi-Urban Development, (iv) Zero Energy Ready Homes, (v) Non-potable Water System, and (vi) Affordable/Workforce Housing (collectively, the “Public Benefits”). The Public Benefits to be enabled under this Service Plan are specifically described in Exhibit J attached hereto and incorporated herein by reference. Therefore, notwithstanding any provision to the contrary contained in this Service Plan, no District shall be authorized to issue any Debt or to impose a Debt Mill Levy or any Fees for payment of Debt unless and until the delivery of the Public Benefits specifically related to the phase of the Planned Development of a portion of the Project to be financed with such Debt, Debt Mill Levy or Fees, are secured in a manner approved by the City Council. To satisfy this precondition to the issuance of Debt and to the imposition of the Debt Mill Levy and Fees, delivery of the Public Benefits for each phase of the Project and the Planned Development must be secured by the following methods, as applicable: 1. For any portion of the Public Benefits to be provided by one or more of the Districts, each such District must enter into an intergovernmental agreement with the City by either (i) agreeing to provide those Public Benefits as a legally enforceable multiple- fiscal year obligation of the District under TABOR, or (ii) securing performance of that obligation with a surety bond, letter of credit or other security acceptable to the City, and any such intergovernmental agreement must be approved by the City Council by resolution; 2. For any portion of the Public Benefits to be provided by one or more Developers of the Planned Development, each such Developer must either (i) enter into a development agreement with the City under the Developer’s applicable Approved Development Plan, which agreement must legally obligate the Developer to provide those Public Benefits before the City is required to issue building permits and/or certificates of occupancy for structures to be built under the Approved Development Plan for that phase of the Planned Development, or (ii) secure such obligations with a surety bond, letter of credit or other security acceptable to the City, and all such development agreements must be approved by the City Council by resolution; or 3. For any portion of the Public Benefits to be provided in part by one or more of the Districts and in part by one or more of the Developers, an agreement between the City and the affected District(s) and Developers that secures such Public Benefits as legally binding obligations using the methods described in subsections 1 and 2 above, and all such agreements must be approved by the City Council by resolution. C. Assessed Valuation. 13 The current assessed valuation of the Service Area is approximately zero $0.00 for purposes of this Service Plan and, at build out, is expected to be One Hundred Forty Five Million Dollars ($145,000,000). These amounts are expected to be sufficient to reasonably discharge the Debt as demonstrated in the Financial Plan. V. INCLUSION OF LAND IN THE SERVICE AREA Other than the real property in the Inclusion Area Boundaries, the Districts shall not include any real property into the Districts without the City Council’s prior written approval and in compliance with the Special District Act. Once a District has issued Debt, it shall not exclude real property from the District’s boundaries without the prior written consent of the City Council. VI. DISTRICT GOVERNANCE The Districts’ Boards shall be comprised of persons who are a qualified “eligible electors” of the Districts as provided in the Special District Act. It is anticipated that over time, the End Users who are eligible electors will assume direct electoral control of the Districts’ Boards as development within the Service Area progresses. The Districts shall not enter into any agreement by which the End Users’ electoral control of the Boards is removed or diminished. VII. AUTHORIZED AND PROHIBITED POWERS A. General Grant of Powers. The Districts shall have the power and authority to provide the Public Improvements, the Regional Improvements and related operation and maintenance services, within and without the Service Area, as such powers and authorities are described in the Special District Act, other applicable State law, common law and the Colorado Constitution, subject to the prohibitions, restrictions and limitations set forth in this Service Plan. If, after the Service Plan is approved, any State law is enacted to grant additional powers or authority to metropolitan districts by amendment of the Special District Act or otherwise, such powers and authority shall not be deemed to be a part hereof. These powers and authority shall only be available to or exercised by the Districts if the City Council first approves a Service Plan Amendment to specifically allow the exercise of such powers or authority by the Districts. B. Prohibited Improvements and Services and other Restrictions and Limitations. The Districts’ powers and authority under this Service Plan to provide Public Improvements and services and to otherwise exercise their other powers and authority under the Special District Act and other applicable State law, are prohibited, restricted and limited as hereafter provided. Failure to comply with these prohibitions, restrictions and limitations shall 14 constitute a material modification under this Service Plan and shall entitle the City to pursue all remedies available at law and in equity as provided in Section XVII of this Service Plan: 1. Eminent Domain Restriction The Districts shall not exercise their statutory power of eminent domain without first obtaining resolution approval from the City Council. This restriction on the Districts’ exercise of their eminent domain power is being exercised voluntarily acquiesced to by the Districts and shall not be interpreted in any way as a limitation on the Districts’ sovereign powers and shall not negatively affect the Districts’ status as political subdivision of the State as conferred by the Special District Act. 2. Fee Limitation Any Fees imposed for the repayment of Debt, if authorized by this Service Plan, shall not imposed by any of the Districts upon or collected from an End User. In addition, Fees imposed for the payment of Debt shall not be imposed unless and until the requirements for securing the delivery of the relevant portion of the Public Benefits have been satisfied in accordance with Section IV.B of this Service Plan. Notwithstanding any of the foregoing, this Fee limitation shall not apply to any Fee imposed to fund the operation, maintenance, repair or replacement of Public Improvements or the administration of the Districts. 3. Operations and Maintenance The primary purpose of the Districts is to plan for, design, acquire, construct, install, relocate, redevelop and finance a portion of 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 the City Code, provided that nothing herein requires the City to accept a dedication. The Districts are specifically authorized to operate and maintain any part or all of the Public Improvements not otherwise conveyed or dedicated to the City or another appropriate governmental entity. Additionally, the Districts are authorized to operate and maintain any part or all of the Public Improvements not otherwise conveyed or dedicated to the City or another appropriate governmental entity until such time that the Districts dissolve. 4. Fire Protection Restriction The Districts are not authorized to plan for, design, acquire, construct, install, relocate, redevelop, finance, own, operate or maintain fire protection facilities or services, unless such facilities and services are provided pursuant to an intergovernmental agreement with the Poudre Fire Authority. The authority to plan for, design, acquire, construct, install, relocate, redevelop, finance, own, operate or maintain fire hydrants and related improvements installed as part of the water system shall not be limited by this subsection. 15 5. Public Safety Services Restriction The Districts are not authorized to provide policing or other security services. However, the Districts may, pursuant to C.R.S. § 32-1-1004(7), as amended, furnish security services pursuant to an intergovernmental agreement with the City. 6. Grants from Governmental Agencies Restriction The Districts shall not apply for grant funds distributed by any agency of the United States Government or the State without the prior written approval of the City Manager. This does not restrict the collection of Fees for services provided by the Districts to the United States Government or the State. 7. Golf Course Construction Restriction Acknowledging that the City has financed public golf courses and desires to coordinate the construction of public golf courses within the City’s boundaries, the Districts shall not be authorized to plan, design, acquire, construct, install, relocate, redevelop, finance, own, operate or maintain a golf course unless such activity is pursuant to an intergovernmental agreement with the City. 8. Television Relay and Translation Restriction The Districts are not authorized to plan for, design, acquire, construct, install, relocate, redevelop, finance, own, operate or maintain television relay and translation facilities and services, other than for the installation of conduit as a part of a street construction project, unless such facilities and services are provided pursuant to prior written approval from the City Council. 9. Sales and Use Tax Exemption Limitation The Districts shall not exercise any sales and use tax exemption otherwise available to the Districts under the City Code. 10. Potable Water and Wastewater Treatment Facilities Acknowledging that the City and other existing special districts operating within the City currently own and operate treatment facilities for potable water and wastewater that are available to provide services to the Service Area, the Districts shall not plan, design, acquire, construct, install, relocate, redevelop, finance, own, operate or maintain such facilities without obtaining the City Council’s prior written approval either by intergovernmental agreement or as a Service Plan Amendment. 11. Sub-district Restriction 16 The Districts shall not create any sub-district pursuant to the Special District Act without the prior written approval of the City Manager. 12. Privately Placed Debt Limitation Prior to the issuance of any privately placed Debt, the issuing District 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 C.R.S. Section 32-1-103(12)) to be borne by [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 District. 13. Special Assessments The Districts shall not impose special assessments without the prior written approval of the City Council. VIII. PUBLIC IMPROVEMENTS AND ESTIMATED COSTS Exhibit E summarizes the type of Public Improvements that are projected to be constructed and/or installed by the Districts. The cost, scope, and definition of such Public Improvements may vary over time. The total estimated costs of Public Improvements, as set forth in Exhibit G, are approximately Three Hundred Twenty-Five Million One Hundred Ninety-Four Thousand Five Hundred Forty Three Dollars ($325,194,543) in 2018 dollars. The cost estimates are based upon preliminary engineering, architectural surveys, and reviews of the Public Improvements and include all construction cost estimates together with estimates of costs such as land acquisition, engineering services, legal expenses and other associated expenses. Maps of the anticipated location, operation, and maintenance of Public Improvements are attached hereto as Exhibit H. Changes in the Public Improvements or costs, which are approved by the City in an Approved Development Plan and any agreement approved by the City Council pursuant to Section IV.B of this Service Plan, shall not constitute a Service Plan Amendment. In addition, due to the preliminary nature of the Project, the City shall not be bound by this Service Plan in reviewing and approving the Approved Development Plan and the Approved Development Plan shall supersede the Service Plan with regard to the cost, scope and definition of Public Improvements. Provided, however, any agreement approved and entered into under Section IV.B of this Service Plan for the provision of a Public Improvement that is also a Public Benefit, shall supersede both this Service Plan and the applicable Approved Development Plan. 17 Except as otherwise provided by an agreement approved under Section IV.B of this Service Plan: (i) the design, phasing of construction, location and completion of Public Improvements will be determined by the Districts to coincide with the phasing and development of the Planned Development and the availability of funding sources; (ii) the Districts may, in their discretion, phase the construction, completion, operation, and maintenance of Public Improvements or defer, delay, reschedule, rephase, relocate or determine not to proceed with the construction, completion, operation, and maintenance of Public Improvements, and such actions or determinations shall not constitute a Service Plan Amendment; (iii) the Districts shall also be permitted to allocate costs between such categories of the Public Improvements as deemed necessary in their discretion. The City Code has development standards, contracting requirements and other legal requirements related to the construction and payment of public improvements and related to certain operation activities. Relating to these, the Districts shall comply with the following requirements: A. Development Standards. The Districts shall ensure that the Public Improvements are designed and constructed in accordance with the standards and specifications of the City Code and of other governmental entities having proper jurisdiction, as applicable. The Districts directly, or indirectly through any 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. Unless waived by the City Council, the Districts shall be required, in accordance with the City Code, to post a surety bond, letter of credit, or other approved development security for any Public Improvements to be constructed by the Districts. Such development security may be released in the City Manager’s discretion when the constructing District has obtained funds, through Debt issuance or otherwise, adequate to insure the construction of the Public Improvements, unless such release is prohibited by or in conflict with any City Code provision, State law, or any agreement approved and entered into under Section IV.B of this Service Plan. Any limitation or requirement concerning the time within which the City must review the Districts’ proposals or applications for an Approved Development Plan or other land use approval is hereby waived by the Districts. B. Contracting. The Districts shall comply with all applicable State purchasing, public bidding and construction contracting. C. Land Acquisition and Conveyance. The purchase price of any land or improvements acquired by the Districts from the Developer shall be no more than the then-current fair market value as confirmed by an independent MAI appraisal for land and by an independent professional engineer for improvements. Land, easements, improvements and facilities conveyed to the City shall be free and clear of all liens, encumbrances and easements, unless otherwise approved by the City 18 Manager prior to conveyance. All conveyances to the City shall be by special warranty deed, shall be conveyed at no cost to the City, shall include an ALTA title policy issued to the City, shall meet the environmental standards of the City and shall comply with any other conveyance prerequisites required in the City Code. D. Equal Employment and Discrimination. In connection with the performance of all acts or activities hereunder, the Districts shall not discriminate against any person otherwise qualified with respect to its hiring, discharging, promoting or demoting or in matters of compensation solely because of race, color, religion, national origin, gender, age, military status, sexual orientation, gender identity or gender expression, marital status, or physical or mental disability, and further shall insert the foregoing provision in contracts or subcontracts entered into by the Districts to accomplish the purposes of this Service Plan. IX. FINANCIAL PLAN/PROPOSED DEBT This Section IX of the Service Plan describes the nature, basis, method of funding and financing limitations associated with the acquisition, construction, completion, repair, replacement, operation and maintenance of Public Improvements. A. Financial Plan. The Districts’ Financial Plan, attached as Exhibit I and incorporated by reference, reflects the Districts’ anticipated schedule for incurring Debt to fund Public Improvements in support of the Project. The Financial Plan also reflects the schedule of all anticipated revenues flowing to the Districts derived from Districts mill levies, Fees imposed by the Districts, specific ownership taxes, and all other anticipated legally available revenues. The Financial Plan is based on economic, political and industry conditions as they exist presently and reasonable projections and estimates of future conditions. These projections and estimates are not to be interpreted as the only method of implementation of the Districts’ goals and objectives but rather a representation of one feasible alternative. Other financial structures may be used so long they are in compliance with this Service Plan. The Financial Plan incorporates all of the provisions of this Section IX. Based upon the assumptions contained therein, the Financial Plan projects the issuance of Bonds to fund Public Improvements and anticipated Debt repayment based on the development assumptions and absorptions of the property in the Service Area by End Users. The Financial Plan anticipates that the District will have the ability to acquire, construct, and complete all or a portion Public Improvements needed to serve the Service Area. The Financial Plan demonstrates that the Districts will have the financial ability to discharge all Debt to be issued as part of the Financial Plan on a reasonable basis. Furthermore, the Districts will secure the certification of an External Financial Advisor who will provide an opinion as to whether such Debt issuances are in the best interest of the Districts at the time of issuance. 19 B. Mill Levies. It is anticipated that the Districts will impose a Debt Mill Levy and an Operating Mill Levy on all property within the Districts’ boundaries. In doing so, the following shall apply: 1. Aggregate Mill Levy Maximum The Aggregate Mill Levy shall not exceed in any year the Aggregate Mill Levy Maximum, which is sixty (60) mills. 2. Regional Mill Levy Not Included in Other Mill Levies The Regional Mill Levy shall not be counted against the Aggregate Mill Levy Maximum. 3. Operating Mill Levy Each District may impose an Operating Mill Levy of up to sixty (60) mills until that District imposes a Debt Mill Levy. Once the District imposes a Debt Mill Levy of any amount, the District’s Operating Mill Levy shall not exceed twenty (20) mills at any point. 4. Gallagher Adjustments In the event the State’s method of calculating assessed valuation for the Taxable Property changes after January 1, 2018, or any constitutionally mandated tax credit, cut or abatement, the Districts’ Aggregate Mill Levy, Debt Mill Levy, Operating Mill Levy, and Aggregate Mill Levy Maximum, amounts herein provided may be increased or decreased to reflect such changes; such increases or decreases shall be determined by the District’s Board in good faith so that to the extent possible, the actual tax revenues generated by such mill levies, as adjusted, are neither enhanced nor diminished as a result of such change occurring after January 1, 2018. For purposes of the foregoing, a change in the ratio of actual valuation to assessed valuation will be a change in the method of calculating assessed valuation. 5. Excessive Mill Levy Pledges Any Debt issued with a mill levy pledge, or which results in a mill levy pledge, that exceeds the Aggregate Mill Levy Maximum or the Maximum Debt Mill Levy Imposition Term, shall be deemed a material modification of this Service Plan and shall not be an authorized issuance of Debt unless and until such material modification has been approved by a Service Plan Amendment. 6. Refunding Debt 20 The Maximum Debt Mill Levy Imposition Term may be exceeded for Debt refunding purposes if: (1) a majority of the issuing District’s Board is composed of End Users and have voted in favor of a refunding of a part or all of the Debt; or (2) such refunding will result in a net present value savings. 7. Maximum Debt Authorization The Districts anticipate approximately Three Hundred Twenty-Five Million One Hundred Ninety Four Thousand Five Hundred Forty Three Dollars ($325,194,543) in project costs in 2018 dollars as set forth in Exhibit G, and anticipate issuing approximately One Hundred Sixty Three Million Dollars ($163,000,000) in Debt to pay such costs as set forth in Exhibit I, which Debt issuance amount shall be the amount of the Maximum Debt Authorization. In addition, no District shall issue any Debt unless and until delivery of the relevant portion of the Public Benefits have been secured as required in Section IV.B of this Service Plan. The Districts collectively shall not issue Debt in excess of the Maximum Debt Authorization. Bonds, loans, notes or other instruments which have been refunded shall not count against the Maximum Debt Authorization. Intergovernmental Capital Pledge Agreements among two or more of the Districts pledging the collection and payment of property taxes or Fees by one District for the repayment of Debt by a separate issuing District shall not count against the Maximum Debt Authorization. The Districts must obtain from the City Council a Service Plan Amendment prior to issuing Debt in excess of the Maximum Debt Authorization. C. Maximum Voted Interest Rate and Underwriting Discount. The interest rate on any Debt is expected to be the market rate at the time the Debt is issued. The maximum interest rate on any Debt, including any defaulting interest rate, is not permitted to exceed Twelve Percent (12%). The maximum underwriting discount shall be three percent (3%). Debt, when issued, will comply with all relevant requirements of this Service Plan, the Special District Act, other applicable State law and federal law as then applicable to the issuance of public securities. D. Interest Rate and Underwriting Discount Certification. The Districts shall retain an External Financial Advisor to provide a written opinion on the market reasonableness of the interest rate on any Debt and any underwriter discount paid by the Districts as part of a Debt financing transaction. The Districts shall provide this written opinion to the City before issuing any Debt based on it. E. Disclosure to Purchasers. In order to notify future End Users who are purchasing residential lots or dwellings units in the Service Area that they will be paying, in addition to the property taxes owed to other taxing governmental entities, the property taxes imposed under the Debt Mill Levy, the Operating Mill Levy and possibly the Regional Mill Levy, Districts shall not be authorized to 21 issue any Debt under this Service Plan until there is included in the Developer’s Approved Development Plan provisions that require the following: 1. That the Developer, and its successors and assigns, shall prepare and submit to the City Manager for his approval a disclosure notice in substantially the form attached hereto as Exhibit K (the “Disclosure Notice”); 2. That when the Disclosure Notice is approved by the City Manager, the Developer shall record the Disclosure Notice in the Larimer County Clerk and Recorder’s Office; and 3. That the approved Disclosure Notice shall be provided by the Developer, and by its successors and assigns, to each potential End User purchaser of a residential lot or dwelling unit in the Service Area before that purchaser enters into a written agreement for the purchase and sale of that residential lot or dwelling unit. F. External Financial Advisor. An External Financial Advisor shall be retained by the issuing Districts to provide a written opinion as to whether any Debt issuance is in the best interest of the issuing Districts once the total amount of Debt issued by the Districts exceeds Five Million Dollars ($5,000,000). The External Financial Advisor is to provide advice to the issuing Districts’ Boards regarding the proposed terms and whether Debt conditions are reasonable based upon the status of development within the Districts, the projected tax base increase in the Districts, the security offered and other considerations as may be identified by the Advisor. Each issuing District shall include in the transcript of any Bond transaction, or other appropriate financing documentation for related Debt instrument, a signed letter from the External Financial Advisor providing an official opinion on the structure of the Debt, stating the Advisor’s opinion that the cost of issuance, sizing, repayment term, redemption feature, couponing, credit spreads, payment, closing date, and other material transaction details of the proposed Debt serve the best interest of the Districts. Debt shall not be undertaken by the Districts if found to be unreasonable by the External Financial Advisor. G. Disclosure to Debt Purchasers. Any Debt of the Districts shall set forth a statement in substantially the following form: “By acceptance of this instrument, the owner of this Debt agrees and consents to all of the limitations with respect to the payment of the principal and interest on this Debt contained herein, in the resolution of the District authorizing the issuance of this Debt and in the Service Plan of the District. This Debt is not and cannot be a Debt of the City of Fort Collins” Similar language describing the limitations with respect to the payment of the principal and interest on Debt set forth in this Service Plan shall be included in any document used for the 22 offering of the Debt for sale to persons, including, but not limited to, a Developer of property within the Service Area. H. Security for Debt. The Districts shall not pledge any revenue or property of the City as security for the indebtedness set forth in this Service Plan. Approval of this Service Plan shall not be construed as a guarantee by the City of payment of any of the Districts’ obligations; nor shall anything in the Service Plan be construed so as to create any responsibility or liability on the part of the City in the event of default by the Districts in the payment of any such obligations. I. TABOR Compliance. The Districts shall comply with the provisions of TABOR. In the discretion of the Districts’ Boards, the Districts may set up other qualifying entities to manage, fund, construct and operate facilities, services, and programs. To the extent allowed by law, any entity created by a District will remain under the control of the District’s Board. J. Districts’ Operating Costs. The estimated cost of acquiring land, engineering services, legal services and administrative services, together with the estimated costs of the Districts’ organization and initial operations, are anticipated to be $200,000, which will be eligible for reimbursement from Debt proceeds. In addition to the capital costs of the Public Improvements, the Districts will require operating funds for administration and to plan and cause the Public Improvements to be operated and maintained. The first year’s operating budget is estimated to be $100,000. Ongoing administration, operations and maintenance costs may be paid from property taxes collected through the imposition of an Operating Mill Levy as set forth in Section IX.B.3, as well as other revenues legally available to the Districts. X. REGIONAL IMPROVEMENTS The Districts shall be authorized to provide for the planning, design, acquisition, funding, construction, installation, relocation, redevelopment, administration and overhead costs related to the provision of Regional Improvements. At the discretion of the City, the Districts shall impose a Regional Improvement Mill Levy on all property within the Districts’ boundaries under the following terms: A. Regional Mill Levy Authority. The Districts shall seek the authority to impose an additional Regional Mill Levy of five (5) mills as part of the Districts’ initial TABOR election. The Districts shall also seek from the electorate in that election the authority under TABOR to enter into an intergovernmental 23 agreement with the City obligating the Districts to pay as a multiple-fiscal year obligation the proceeds from the Regional Mill Levy to the City. Obtaining voter-approval of the Regional Mill Levy and this intergovernmental agreement shall be a precondition to the Districts issuing any Debt and imposing the Operating Mill Levy, the Debt Mill Levy and any Fees for the repayment of Debt under this Service Plan. B. Regional Mill Levy Imposition. The Districts shall each impose the Regional Mill Levy at a rate not to exceed five (5) mills within one year of receiving written notice from the City Manager to the Districts requesting the imposition of the Regional Mill Levy and stating the mill rate to be imposed. C. City Notice Regarding Regional Improvements. Such notice from the City shall provide a description of the Regional Improvements to be constructed and an analysis explaining how the Regional Improvements will be beneficial to property owners within the Service Area. The City shall make a good faith effort to require planned developments that (i) are adjacent to the Service Area and (ii) will benefit from the Regional Improvement also impose a Regional Mill Levy, to the extent possible. D. Regional Improvements Authorized Under Service Plan. If so notified by the City Manager, the Regional Improvements shall be considered public improvements that the Districts would otherwise be authorized to design, construct, install re- design, re-construct, repair or replace pursuant to this Service Plan and applicable law. E. Expenditure of Regional Mil Levy Revenues. Revenue collected through the imposition of the Regional Mill Levy shall be expended as follows: 1. Intergovernmental Agreement If the City and the Districts have executed an intergovernmental agreement concerning the Regional Improvements, then the revenue from the Regional Mill Levy shall be used in accordance with such agreement; 2. No Intergovernmental Agreement If no intergovernmental agreement exists between the Districts and the City, then the revenue from the Regional Mill Levy shall be paid to the City, for use by the City in the planning, designing, constructing, installing, acquiring, relocating, redeveloping or financing of Regional Improvements which benefit the End Users of the Districts as prioritized and determined by the City. F. Regional Mill Levy Term. 24 The imposition of the Regional Mill Levy shall not exceed a term of twenty-five (25) years from December 31 of the tax collection year after which the Regional Mill Levy is first imposed. G. Completion of Regional Improvements. All Regional Improvements shall be completed prior to the end of the twenty-five (25) year Regional Mill Levy term. H. City Authority to Require Imposition. The City’s authority to require the initiation of the imposition of a Regional Mill Levy shall expire fifteen (15) years after December 31st of the year in which the Districts first imposes a Debt Mill Levy. I. Regional Mill Levy Not Included in Other Mill Levies. The Regional Mill Levy imposed shall not be applied toward the calculation of the Aggregate Mill Levy Maximum. J. Gallagher Adjustment. In the event the method of calculating assessed valuation is changed after January 1, 2018, or any constitutionally mandated tax credit, cut or abatement, the Regional Mill Levy may be increased or shall be decreased to reflect such changes; such increases or decreases shall be determined by the Districts’ Boards in good faith so that to the extent possible, the actual tax revenues generated by the Regional Mill Levy, as adjusted, are neither enhanced nor diminished as a result of such change occurring after January 1, 2018. For purposes of the foregoing, a change in the ratio of actual valuation to assessed valuation will be a change in the method of calculating assessed valuation. XI. CITY FEES The Districts shall pay all applicable City fees as required by the City Code. XII. BANKRUPTCY LIMITATIONS All of the limitations contained in this Service Plan, including, but not limited to, those pertaining to the Aggregate Mill Levy Maximum, Maximum Debt Mill Levy Imposition Term and Fees, have been established under the authority of the City in the Special District Act to approve this Service Plan. It is expressly intended that by such approval such limitations: (i) shall not be set aside for any reason, including by judicial action, absent a Service Plan Amendment; and (ii) are, together with all other requirements of State law, included in the “political or governmental powers” reserved to the State under the U.S. Bankruptcy Code (11 U.S.C.) Section 903, and are also included in the “regulatory or electoral approval necessary under applicable 25 non-bankruptcy law” as required for confirmation of a Chapter 9 Bankruptcy Plan under Bankruptcy Code Section 943(b)(6). XIII. ANNUAL REPORTS AND BOARD MEETINGS A. General. Each of the Districts shall be responsible for submitting an annual report to the City Clerk no later than September 1st of each year following the year in which the Order and Decree creating the Districts has been issued. They Districts may file a consolidated annual report. The annual report may be made available to the public on the City’s website. B. Board Meetings. Each of the Districts’ Boards shall hold at least one public board meeting in three of the four quarters of each calendar year, beginning in the first full calendar year after the Districts’ creation. Notice for each of these meetings shall be given in accordance with the requirements of the Special District Act and other applicable State Law. This meeting requirement shall not apply until there is at least one End User of property within the District. Also, this requirement shall no longer apply when a majority of the directors on the District’s Board are End Users. C. Report Requirements. Unless waived by the City Manager, each of the Districts’ annual report must include the following: 1. Narrative A narrative summary of the progress of the District in implementing its Service Plan for the report year. 2. Financial Statements Except when exemption from audit has been granted for the report year under the Local Government Audit Law, the audited financial statements of the District 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 operation (i.e., revenue and expenditures) for the report year. 3. Capital Expenditures Unless disclosed within a separate schedule to the financial statements, a summary of the capital expenditures incurred by the District in development of improvements in the report year. 4. Financial Obligations 26 Unless disclosed within a separate schedule to the financial statements, a summary of financial obligations of the District at the end of the report year, including the amount of outstanding Debt, the amount and terms of any new District Debt issued in the report year, the total assessed valuation of all Taxable Property within the Service Area as of January 1 of the report year and the current total District mill levy pledged to Debt retirement in the report year. 5. Board Contact Information The names and contact information of the current directors on the District’s Board, any District manager and the attorney for the District shall be listed in the report. The District’s current office address, phone number, email address and any website address shall also be listed in the report. 6. Other Information Any other information deemed relevant by the City Council or deemed reasonably necessary by the City Manager. D. Reporting of Significant Events. The annual report of each District shall also include information as to any of the following that occurred during the report year: 1. Boundary changes made or proposed to the District’s boundaries as of December 31 of the report year. 2. Intergovernmental Agreements with other governmental entities, either entered into or proposed as of December 31 of the report year. 3. Copies of the District’s rules and regulations, if any, or substantial changes to the District’s rules and regulations as of December 31 of the report year. 4. A summary of any litigation which involves the District’s Public Improvements as of December 31 of the report year. 5. A list of all facilities and improvements constructed by the District that have been dedicated to and accepted by the City as of December 31 of the report year. 6. Notice of any uncured events of default by the District, which continue beyond a ninety (90) day period, under any Debt instrument. 27 7. Any inability of the District to pay its obligations as they come due, in accordance with the terms of such obligations, which continue beyond a ninety (90) day period. E. Failure to Submit. In the event the annual report is not timely received by the City Clerk or is not fully responsive, notice of such default shall be given to the District’s Board at its last known address. The failure of the District to file the annual report within forty-five (45) days of the mailing of such default notice by the City Clerk may constitute a material modification of the Service Plan, at the discretion of the City Manager. XIV. SERVICE PLAN AMENDMENTS This Service Plan is general in nature and does not include specific detail in some instances. The Service Plan has been designed with sufficient flexibility to enable the Districts to provide required improvements, services and facilities under evolving circumstances without the need for numerous amendments. Modification of the general types of improvements and facilities making up the Public Improvements, and changes in proposed configurations, locations or dimensions of the Public Improvements, shall be permitted to accommodate development needs provided such Public Improvements are consistent with the then-current Approved Development Plans for the Project and any agreement approved by the City Council pursuant to Section IV.B of this Service Plan. Any action of one or more of the Districts, which is a material modification of this Service Plan requiring a Service Plan Amendment as provided in Section XV of this Service Plan or that does not comply with the provisions of this Service Plan, shall be deemed to be a material modification to this Service Plan unless otherwise expressly provided in this Service Plan. All other departures from the provisions of this Service Plan shall be considered on a case-by-case basis as to whether such departures are a material modification under this Service Plan or the Special District Act. XV. MATERIAL MODIFICATIONS Material modifications to this Service Plan may be made only in accordance with C.R.S. Section 32-1-207 as a Service Plan Amendment. No modification shall be required for an action of the Districts that does not materially depart from the provisions of this Service Plan, unless otherwise provided in this Service Plan. Departures from the Service Plan that constitute a material modification requiring a Service Plan Amendment include, without limitation: 1. Actions or failures to act that create materially greater financial risk or burden to the taxpayers of any of the Districts; 2. Performance of a service or function, construction of an improvement, or acquisition of a major facility that is not closely related to an improvement, service, function or facility authorized in the Service Plan; 28 3. Failure to perform a service or function, construct an improvement or acquire a facility required by the Service Plan; and 4. Failure to comply with any of the preconditions, prohibitions, limitations and restrictions of this Service Plan. XVI. DISSOLUTION Upon independent determination by the City Council that the purposes for which any District was created have been accomplished, the District shall file a petition in district court for dissolution as provided in the Special District Act. In no event shall dissolution occur until the District has provided for the payment or discharge of all of its outstanding indebtedness and other financial obligations as required pursuant to the Special District Act and any other applicable State law. In addition, if within three (3) years from the date of the City Council’s approval of this Service Plan no agreement contemplated under Section IV.B of this Service Plan has been entered into by the City with any of the Districts and/or any Developer, despite the parties conducting good faith negotiations attempting to do so, the City may opt to pursue the remedies available to it under C.R.S. Section 32-1-701(3) in order to compel the Districts to dissolve in a prompt and orderly manner. In such event: (i) 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; (ii) the Board of Directors of each of the Districts will be deemed to have agreed with the City regarding its dissolution without an election pursuant to C.R.S. §32-1-704(3)(b); (iii) 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 (iv) subject to the statutory requirements of the Special District Act, the Districts shall thereupon dissolve. XVII. SANCTIONS Should any of the Districts undertake any act without obtaining prior City Council approval or consent or City Manager approval or consent under this Service Plan, that constitutes a material modification to this Service Plan requiring a Service Plan Amendment as provided herein or under the Special Districts Act, or does not otherwise comply with the provisions of this Service Plan, the City Council may impose one (1) or more of the following sanctions, as it deems appropriate: 1. Exercise any applicable remedy under the Special District Act; 2. Withhold the issuance of any permit, authorization, acceptance or other administrative approval, or withhold any cooperation, necessary for the District’s development or construction or operation of improvements or provision of services; 29 3. Exercise any legal remedy under the terms of any intergovernmental agreement under which the District is in default; or 4. Exercise any other legal and equitable remedy available under the law, including seeking prohibitory and mandatory injunctive relief against the District, to ensure compliance with the provisions of the Service Plan or applicable law. XVIII. CONCLUSION It is submitted that this Service Plan, as required by C.R.S. Section 32-1-203(2), establishes that: 1. There is sufficient existing and projected need for organized service in the Service Area to be served by the Districts; 2. The existing service in the Service 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 Service Area; and 4. The Service Area does have, and will have, the financial ability to discharge the proposed indebtedness on a reasonable basis. XIX. RESOLUTION OF APPROVAL The Districts agree to incorporate the City Council’s resolution approving this Service Plan, including any conditions on any such approval, into the copy of the Service Plan presented to the District Court for and in Larimer County, Colorado. 30 EXHIBIT A Legal Description of Initial District Boundaries 31 EXHIBIT B Initial District Boundary Map 32 EXHIBIT C Legal Description of Inclusion Area Boundaries 33 EXHIBIT D Inclusion Area Boundary Map 34 EXHIBIT E Public Improvements Description of Public Improvements a. Streets. On-site and off-site streets, curbs, gutters, culverts, other drainage facilities, sidewalks, bridges, parking facilities, paving, lighting, grading, utility relocation necessitated by public rights-of- way, monumentation, signage, snow removal, streetscapes and related landscaping and irrigation improvements, together with all necessary, incidental and appurtenant facilities, equipment, land and easements and extensions of and improvements to such facilities. b. Water. On-site and off-site potable and non-potable water supply improvements, including water rights, storage facilities, transmission and distribution lines, pumping stations, fire hydrants, meters, facilities, equipment, and related landscaping and irrigation improvements, together with all necessary, incidental and appurtenant facilities, equipment, land and easements, and extensions of and improvements to such facilities. c. Storm and Sanitary Sewer. On-site and Off-site storm and sanitary sewer collection and transmission improvements, including storage facilities, collection mains and laterals, pumping stations, lift stations, transmission lines, storm sewer, flood and surface drainage facilities and systems, and related landscaping and irrigation improvements, together with all necessary, incidental and appurtenant facilities, equipment, land and easements and extensions of and improvements to such facilities. d. Parks and Recreation. On-site and off-site public park, open space and recreation facilities or services, including parks, bike paths, pedestrian ways, public plazas and courtyards, water features, signage, monumentation, art, gardens, farm facilities, orchards, picnic areas, recreation facilities, playground equipment/areas, park shelters, public area landscaping and weed control, streetscaping, outdoor lighting of all types, and related landscaping and irrigation improvements, together with all necessary, incidental and appurtenant facilities, equipment, land and easements, and extensions of and improvements to such facilities. 35 EXHIBIT F Vicinity Map 36 EXHIBIT G Public Improvement Cost Estimates JOB NO. DATE: BY: 1230.0001.00 6/27/2018 JAZ No. Item Quantity Units Unit Cost Total $11,000,000 $21,499,312 $105,255,350 $15,732,500 $11,081,500 $13,814,500 $10,286,290 $8,000,000 $44,215,395 $240,884,847 $48,176,969 $36,132,727 $325,194,543 This is a conceptual opinion of cost and supplied only as a guide. TST is not responsible for fluctuation in costs of material, labor or unforeseen contingencies. Total Infrastructure Cost EARTHWORK NONPOTABLE WATER (ONSITE & OFFSITE) ADMINISTRATIVE & MISCELLANEOUS Contingency (20% of Costs) Engineering / Survey / C. M. (15% of Costs) CONCEPTUAL OPINION OF COST PROJECT: Montava Metropolitan Districts Additional Costs Construction Costs WATER (ONSITE & OFFSITE) LANDSCAPING, TRAILS, OPEN SPACE, AND FARM FACILITIES STORM SEWER (ONSITE & OFFSITE) RECREATION FACILITIES SANITARY SEWER (ONSITE & OFFSITE) STREETS (ONSITE & OFFSITE) 37 EXHIBIT H Public Improvements Maps 38 EXHIBIT I Financial Plan MONTAVA METROPOLITAN DISTRICT 1 Development Projection -- Total Available Revenues -- Service Plan 2050 Series 2023, 2027, 2031, 2035, 2039 & 2044 Senior Bonds Plus 2019B Cash-Flow Bonds 2082 SP#1 SP#2 SP#3 SP#4 SP#5 SP#6 [All Plans] TotalTotalTotalTotalTotalTotalTotal Available Available Available Available Available Available Available YEAR Revenue Revenue Revenue Revenue Revenue Revenue Revenue 2017 0000000 2018 0000000 2019 0000000 2020 230,00000000 230,000 2021 478,93200000 478,932 2022 794,52900000 794,529 2023 1,205,14200000 1,205,142 2024 1,339,851 205,0000000 1,544,851 2025 1,662,875 517,1240000 2,179,999 2026 1,762,647 769,8420000 2,532,489 2027 1,762,647 1,278,2950000 3,040,942 2028 1,868,406 1,426,517 365,000 0 0 0 3,659,923 2029 1,868,406 1,730,960 450,505 0 0 0 4,049,871 2030 1,980,510 1,834,818 760,743 0 0 0 4,576,071 2031 1,980,510 1,834,818 1,277,699 0 0 0 5,093,028 2032 2,099,341 1,944,907 1,392,033 160,000 0 0 5,596,280 2033 2,099,341 1,944,907 1,687,015 409,531 0 0 6,140,793 2034 2,225,301 2,061,601 1,788,236 738,100 0 0 6,813,239 2035 2,225,301 2,061,601 1,788,236 1,102,856 0 0 7,177,994 2036 2,358,819 2,185,297 1,895,530 1,448,399 110,000 0 7,998,046 2037 2,358,819 2,185,297 1,895,530 1,575,975 189,824 0 8,205,446 2038 2,500,348 2,316,415 2,009,262 1,670,534 260,701 0 8,757,260 2039 2,500,348 2,316,415 2,009,262 1,670,534 450,159 0 8,946,719 2040 2,650,369 2,455,400 2,129,818 1,770,766 506,187 95,000 9,607,540 2041 2,650,369 2,455,400 2,129,818 1,770,766 605,019 35,155 9,646,527 2042 2,809,392 2,602,724 2,257,607 1,877,012 641,320 258,772 10,446,827 2043 2,809,392 2,602,724 2,257,607 1,877,012 641,320 208,530 10,396,585 2044 2,977,955 2,758,888 2,393,063 1,989,633 679,800 382,075 11,181,414 2045 2,977,955 2,758,888 2,393,063 1,989,633 679,800 411,614 11,210,953 2046 3,156,632 2,924,421 2,536,647 2,109,011 720,588 474,086 11,921,385 2047 3,156,632 2,924,421 2,536,647 2,109,011 720,588 474,086 11,921,385 2048 3,346,030 3,099,886 2,688,846 2,235,551 763,823 502,531 12,636,668 2049 3,346,030 3,099,886 2,688,846 2,235,551 763,823 502,531 12,636,668 2050 3,546,792 3,285,879 2,850,177 2,369,684 809,652 532,683 13,394,868 2051 3,546,792 3,285,879 2,850,177 2,369,684 809,652 532,683 13,394,868 2052 3,759,600 3,483,032 3,021,187 2,511,865 858,231 564,644 14,198,560 2053 3,759,600 3,483,032 3,021,187 2,511,865 858,231 564,644 14,198,560 2054 0 3,692,014 3,202,458 2,662,577 909,725 598,523 11,065,298 2055 0 3,692,014 3,202,458 2,662,577 909,725 598,523 11,065,298 2056 0 3,913,535 3,394,606 2,822,332 964,309 634,434 11,729,216 2057 0 3,913,535 3,394,606 2,822,332 964,309 634,434 11,729,216 2058 0 0 3,598,282 2,991,672 1,022,167 672,500 8,284,622 2059 0 0 3,598,282 2,991,672 1,022,167 672,500 8,284,622 2060 0 0 3,814,179 3,171,172 1,083,497 712,850 8,781,699 2061 0 0 3,814,179 3,171,172 1,083,497 712,850 8,781,699 2062 0 0 0 3,361,443 1,148,507 755,621 5,265,571 2063 0 0 0 3,361,443 1,148,507 755,621 5,265,571 2064 0 0 0 3,563,129 1,217,418 800,959 5,581,505 2065 0 0 0 3,563,129 1,217,418 800,959 5,581,505 2066 0000 1,290,463 849,016 2,139,479 2067 0000 1,290,463 849,016 2,139,479 1 2050 2082 YEAR 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 2065 2066 2067 2068 2069 2070 2071 2072 1 2050 2082 YEAR 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 2065 2066 2067 2068 2069 2070 2071 2072 MONTAVA METROPOLITAN DISTRICT Development Summary (Aggregate) Development Projection -- Buildout Plan (updated 6/20/18) Residential Development Commercial Development Product Type SFDs MF Retail Office Industrial Base $ ('18) $450,000 $225,000 $150/sf $200/sf $100/sf Res'l Totals Comm'l SF Total* 2017 - - - - - - - 2018 - - - - - - - 2019 - - - - - - - 2020 160 50 210 20,000 - - 20,000 2021 175 150 325 20,000 - 30,000 50,000 2022 170 125 295 20,000 - 40,000 60,000 2023 180 100 280 25,000 15,000 20,000 60,000 2024 180 - 180 25,000 - - 25,000 2025 180 180 360 - 25,000 30,000 55,000 2026 180 90 270 10,000 10,000 - 20,000 2027 160 90 250 10,000 10,000 40,000 60,000 2028 175 180 355 10,000 - - 10,000 2029 175 80 255 - 10,000 40,000 50,000 2030 160 100 260 10,000 10,000 - 20,000 2031 130 - 130 10,000 - 40,000 50,000 2032 140 - 140 20,000 - - 20,000 2033 150 100 250 - 30,000 50,000 80,000 2034 140 100 240 10,000 20,000 50,000 80,000 2035 - 120 120 - - 30,000 30,000 2036 - 110 110 - - - - 2037 - 100 100 10,000 - 50,000 60,000 2038 - 110 110 - 10,000 - 10,000 2039 - 75 75 - - 25,000 25,000 2040 - - - - 20,000 - 20,000 2041 - 75 75 - - - - 2042 - 75 75 10,000 20,000 - 30,000 2043 - - - - 10,000 - 10,000 2044 - - - - 10,000 - 10,000 2045 - - - - - - - 2046 - - - - - - - 2047 - - - - - - - 2,455 2,010 4,465 210,000 200,000 445,000 855,000 MV @ Full Buildout $1,104,750,000 $452,250,000 $1,557,000,000 $31,500,000 $40,000,000 $44,500,000 $116,000,000 (base prices;un-infl.) AV @ Full Buildout $112,104,000 $33,640,000 (base prices;un-infl.) 77% of AV 23% of AV notes: Platted/Dev Lots = 10% MV; one-yr prior Base MV $ inflated 2% per annum 7/13/2018 E MMD Fin Plan 18 Dev Summary Prepared by D.A. Davidson & Co. 4 Jul 13, 2018 2:10 pm Prepared by D.A. Davidson & Co Quantitative Group~CB (Montava MD 17:SPLBE) SOURCES AND USES OF FUNDS MONTAVA METROPOLITAN DISTRICT Combined Results ~~~~~~~~ GENERAL OBLIGATION BONDS, SERIES 2023, 2027, 2031, 2035, 2039 & 2044 SUBORDINATE BONDS, SERIES 2019B ~~~ [ Preliminary -- for discussion only ] Dated Date 12/01/2023 12/01/2027 12/01/2031 12/01/2035 12/01/2039 12/01/2044 12/01/2019 Delivery Date 12/01/2023 12/01/2027 12/01/2031 12/01/2035 12/01/2039 12/01/2044 12/01/2019 Sources: SERIES 2023A SERIES 2027A SERIES 2031A SERIES 2035A SERIES 2039A SERIES 2044A SERIES 2019B Total Bond Proceeds: Par Amount 32,325,000.00 33,655,000.00 32,805,000.00 30,630,000.00 11,695,000.00 8,925,000.00 12,522,000.00 162,557,000.00 32,325,000.00 33,655,000.00 32,805,000.00 30,630,000.00 11,695,000.00 8,925,000.00 12,522,000.00 162,557,000.00 Uses: SERIES 2023A SERIES 2027A SERIES 2031A SERIES 2035A SERIES 2039A SERIES 2044A SERIES 2019B Total Project Fund Deposits: Project Fund 28,445,025.00 29,615,583.33 28,867,575.00 26,953,325.00 10,293,091.67 7,853,450.00 12,146,340.00 144,174,390.00 Other Fund Deposits: Debt Service Reserve Fund 2,586,975.00 2,693,216.67 2,625,225.00 2,451,475.00 934,108.33 714,550.00 12,005,550.00 Cost of Issuance: Other Cost of Issuance 1,293,000.00 1,346,200.00 1,312,200.00 1,225,200.00 467,800.00 357,000.00 375,660.00 6,377,060.00 32,325,000.00 33,655,000.00 32,805,000.00 30,630,000.00 11,695,000.00 8,925,000.00 12,522,000.00 162,557,000.00 5 39 EXHIBIT J “PUBLIC BENEFITS” 1. Large-Scale Comprehensive Master Planning: The approximately 914-acre Service Area will be comprehensively master-planned, with an emphasis on multi-modal transportation, through the new Planned Unit Development Overlay Regulations as the Montava PUD Master Plan (the “Montava development”). The Montava development design will include coordinated, interconnecting trail, street, sidewalk, transit and storm drainage systems which will both (i) correct existing infrastructure deficiencies within the boundaries of the Mountain Vista Subarea Plan; and (ii) provide opportunities to connect infrastructure in such area to existing City infrastructure. The Districts will have authority to build and, in some cases, to maintain these public systems and can also be used to facilitate the construction of “off-site” public infrastructure required by the City’s Land Use Code or Municipal Code for individual projects within the Montava development. 2. New Urbanism: New Urbanism is an urban design movement which promotes environmentally friendly habits by creating walkable neighborhoods containing a wide range of housing and job types. The Montava development has been designed by the industry leaders, DPZ, and New Urbanism resonates throughout the Montava development. The Montava development will implement New Urbanism by one or more of the following: a. Creating a mixed-use town center integrated with surrounding neighborhood fabric; b. Developing the Montava development as a series of neighborhoods with centers, based on a 5-minute walk shed; c. Integrating a wide variety of housing types and intensities within each neighborhood; d. Creating walkable streets and trails that connect meaningful destinations; e. Distributing traffic through a network of connected streets; f. Integrating market rate and affordable housing. 3. Agri-Urban Development: This is a concept promoted in the Mountain Vista Subarea Plan. There will be an approximately 40-acre organic farm in the Montava development. The land will either be donated or sold at a substantially discounted amount to the Poudre Valley Cooperative which entity will in turn enter into a long-term lease with the farmers. A wide variety of high-quality, organic, locally-grown produce from the farm will be available to the entire Fort Collins community. While there may be other uses on the farm in the long term, the primary business model is organic produce. 40 4. Zero Energy Ready Homes: Residential development in the Montava development will be built to the Department of Energy’s Zero Energy Ready Home “ZERH” standard. 5. Non-potable Water System: There is only one quarter section of land within the Montava development that does not have adequate coffin wells to provide all needed irrigation water for that quarter section. In all other areas, the Developer commits to the development of a non-potable water system which will incorporate the historical usage of these wells for the irrigation needs of the Montava development. 6. Affordable/Workforce Housing: At least ten percent (10%) of the total housing units approved in the Montava development will be affordable or workforce housing, whether owner-occupied or leased, ranging from sixty percent (60%) to one hundred twenty percent (120%) of the Fort Collins’ AMI for a family of four (“Required Affordable Units”). The Required Affordable Units will be provided through any of the following mechanisms or any other mechanism mutually agreed upon by the Developer and the City: A. The Developer has executed an option contract with the City for the purchase of five (5) acres within the Montava development, at a mutually acceptable location, for development by the City as part of its Affordable Housing Land Bank Program at a time it chooses. B. A continuation of the collaborative effort among developers within the boundaries of the Mountain Vista Subarea Plan, the City, a community land trust and entities such as Housing Catalyst and Habitat for Humanity on a strategy for long-term affordability of the Required Affordable Units. If a program is developed from this strategic collaborative effort which includes fair and reasonable contributions from all stakeholders, up to five percent (5%) (with the number depending on what the program can manage) of the annual developed single family lots would be contributed to the program at Developer’s cost, but not to exceed the Required Affordable Units. C. Sale of land within the Montava development by the Developer to a non-profit or for- profit builder and the development of that land as part or all of the Required Affordable Units. D. Legally enforceable reservation of acreage within the Montava development for the eventual sale to an entity for development of the Required Affordable Units (i.e. similar to the Land Bank option agreement described in paragraph A above). E. If another method for long-term affordability does not result from the collaborative effort described in paragraph B above, deed restrictions for a twenty (20) year period will be placed on all the Required Affordable Units which are single family units. 41 F. Sixty-five percent (65%) of the Required Affordable Units shall be secured through one of the mechanisms described in paragraphs A through D above (or through any other mutually agreed-upon mechanism) prior to receipt of a building permit for more than fifty percent (50%) of the total housing units approved in the Montava development, and the remaining thirty-five percent (35%) of the Required Affordable Units shall be so secured prior to receipt of a building permit for the last one hundred (100) of the total housing units approved in the Montava development. OTHER BENEFITS* Energy and Water Conservation: In addition to the Zero Energy Ready Homes commitment, the Developer is also: • Working with Fort Collins Utility Services to create a community that is founded on renewable energy use, energy conservation, with community wide impact. An example could include every home having a battery which is charged at night by the City’s wind turbine power generation, and used during the day by Utility Services for solar smoothing. • Exploring a community-wide “in home” conservation approach managed by the Districts as the intermediary between the East Larimer County Water District and individual home owners. By purchasing water for the Montava development with a master meter, the Districts can eliminate the need for excessive water dedications which are needed to account for individual variations in use. By implementing a community-wide water conservation approach managed by the Districts, the Developer could achieve a substantial savings in overall water use. Community Park: Integration is at the heart of what Montava represents. The Developer is working with the City’s Parks Division to create an 80+ acre community park to be an activity and enjoyment hub northeast Fort Collins. The intention is to activate this park from the beginning of the Montava development’s life, not in the distant future as the current Parks and Recreation Policy Plan indicates. The Districts may fund portions of this effort directly, and its use for traditional infrastructure offers flexibility for additional Developer investment and flexible terms that could make the park’s early development possible. Natural Areas: The Developer is working to provide natural areas in several ways, including the naturalization of over 160 acres of storm water land to become a beautiful natural amenity for the entire area, while protecting all of east Fort Collins from floods. The developer will also be incorporating Nature in the City, where possible throughout the Montava development. Both of these efforts can be activated and supported if necessary by Districts. Housing Variety: Housing variety is a critical element of building a Traditional Neighborhood Design community. DPZ specializes in designing communities with a tremendous, and beautiful, integration of diverse and wide ranging housing options. When done intentionally, and with the best expertise which we have hired, providing housing variety creates an incredible living environment that is unlike most of what has been built in the past 40+ years in our 42 country. This costs more money in all phases of planning, designing, and execution of development. The Districts have an indirect impact on our ability to close the gap on these additional costs. Innovation: Innovation is taking many forms in the Montava development. The Developer is working with Colorado State University in multiple areas including agriculture, waste water, energy and affordable housing. The Developer is working with global leader, Siemens, in partnership with Fort Collins Utility Services to create an innovative integration of technology around both energy and daily life. The Developer intends to make Fort Collins Broadband a foundational technology for every home owner from the beginning of the project. Employment: Employment opportunities exist where highly educated and innovative people live, and where community services and amenities are offered to those employees. The Developer is working to create a place where employers will want to open businesses, and their innovative employees will want to live. The Developer has made room in the appropriate areas of the Montava development for employment uses. Community Services: The town center is intended to include uses like community retail and commercial opportunities. The Developer intends to partner with the City to develop a Community Recreation Center, and with the Poudre River Public Library District to develop a library for the next generation. The Districts may be used to help fund various aspects of public facilities like the Community Recreation Center. *(Not considered “Public Benefits” for purposes of the Service Plan) 43 EXHIBIT K Disclosure Notice  NOTICE OF INCLUSION IN A RESIDENTIAL METROPOLITAN DISTRICT AND POSSIBLE PROPERTY TAX CONSEQUENCES Legal description of the property and address: (Insert legal description and property address). This property is located in the following metropolitan district: (Insert District Name). In addition to standard property taxes identified on the next page, this property is subject to a metropolitan district mill levy (another property tax) of up to: (Insert mill levy maximum). Based on the property’s inclusion in the metropolitan district, an average home sales price of $300,000 could result in ADDITIONAL annual property taxes up to: (Insert amount). The next page provides examples of estimated total annual property taxes that could be due on this property, first if located outside the metropolitan district and next if located within the metropolitan district. Note: property that is not within a metropolitan district would not pay the ADDITIONAL amount. The metropolitan district board can be reached as follows: (Insert contact information). You may wish to consult with: (1) the Larimer County Assessor’s Office, to determine the specific amount of metropolitan district taxes currently due on this property; and (2) the metropolitan district board, to determine the highest possible amount of metropolitan district property taxes that could be assessed on this property. ESTIMATE OF PROPERTY TAXES Annual Tax Levied on Residential Property With $300,000 Actual Value Without the District Taxing Entity Mill Levies (2017**) Annual tax levied Insert entity Insert amount $ Insert amount Larimer County Insert amount $ Insert amount City of Fort Collins Insert amount $ Insert amount Insert entity Insert amount $ Insert amount Insert entity Insert amount $ Insert amount Insert entity Insert amount $ Insert amount TOTAL: Insert total $ Insert amount Annual Tax Levied on Residential Property With $300,000 Actual Value With the District (Assuming Maximum District Mill Levy) Taxing Entity Mill Levies (2017**) Annual tax levied Insert District Name Insert amount $ Insert amount Insert entity Insert amount $ Insert amount Larimer County Insert amount $ Insert amount City of Fort Collins Insert amount $ Insert amount Insert entity Insert amount $ Insert amount Insert entity Insert amount $ Insert amount Insert entity Insert amount $ Insert amount TOTAL: Insert total $ Insert total **This estimate of mill levies is based upon mill levies certified by the Larimer County Assessor’s Office in December 20__ for collection in 20__, and is intended only to provide approximations of the total overlapping mill levies within the District. The stated mill levies are subject to change and you should contact the Larimer County Assessor’s Office to obtain accurate and current information. FINANCIAL HEALTH OF METROPOLITAN DISTRICT Financial information for (Insert District Name Here) as of (Insert Date of Last Annual Report Here): Notes Amount Total Assessed Value Insert Notes Insert Amount Current Mill Levy & Annual Revenue Insert Mill Insert Amount Current Debt Mill Levy & Annual Revenue Insert Mill Insert Amount Outstanding Debt Insert Term Insert Amount Anticipated Payoff Year Insert Notes Insert Amount Additional information regarding (Insert District Name Here) financial health and formation can be found at the City of Fort Collins website, available at: fcgov.com. In addition, the Colorado Department of Local Affairs may have the following materials available:  Audited Financial Statements  Annual Budget  Annual Report on the Service Plan  Certification of Election Results  Certification of Tax Levies  Notice of Authorization of General Obligation Debt  Notice of Issuance of General Obligation Debt  Transparency – Notice to Electors Available at: https://dola.colorado.gov/lgis/lgFinances.jsf Or Division of Local Government 1313 Sherman Street, Room 521 Denver, Colorado 80203 (303) 864-7720 Fax: (303) 864-0751 OR Contact the District at: _________Metropolitan District ______ _________[Address]________________ _________[Address]________________ _________[Phone]__________________ _________[Fax]____________________ _________[Email]___________________ CITY OF FORT COLLINS, COUNTY OF LARIMER, STATE OF COLORADO CERTIFICATION OF MAILING NOTICE OF PUBLIC HEARING IN RE MONTAVA METROPOLITAN DISTRICT NOS. 1-7, CITY OF FORT COLLINS, COUNTY OF LARIMER, STATE OF COLORADO I, Hayley M. Budzinski, of lawful age and duly sworn, state: 1. I am a paralegal at the law firm of White Bear Ankele Tanaka & Waldron acting on behalf of the proposed District in the above captioned matter. 2. That, pursuant to Section 32-1-204(1.5), C.R.S., the Notice of Public Hearing on Service Plan, a copy of which is attached hereto as Exhibit A, was provided by U.S. first class mail on August 21, 2018, to the owners of record of all real property within the District as such owners of record are listed in the proposed service plan, as set forth on the list attached hereto as Exhibit B. Signed this 21st day of August, 2018. By: Hayley M. Budzinski 1938.0003; 921444 EXHIBIT B EXHIBIT A NOTICE OF PUBLIC HEARING ON SERVICE PLAN NOTICE OF PUBLIC HEARING FOR THE ORGANIZATION OF SPECIAL DISTRICTS IN RE THE ORGANIZATION OF THE MONTAVA METROPOLITAN DISTRICT NOS. 1-7, CITY OF FORT COLLINS, COUNTY OF LARIMER, STATE OF COLORADO NOTICE IS HEREBY GIVEN that, pursuant to § 32-1-204(1), C.R.S., a Service Plan (the “Service Plan”) for the proposed Montava Metropolitan District Nos. 1-7 (“Districts”) has been filed and is available for public inspection in the office of the City Clerk of the City of Fort Collins. A public hearing on the Service Plan will be held by the City Council of the City of Fort Collins (the “City Council”) on Tuesday, September 4, 2018, at 6:00 p.m., at City Council Chambers, City Hall West, 300 LaPorte Avenue, Fort Collins, Colorado, or as soon thereafter as the City Council may hear such matter. The Districts are metropolitan districts. Public improvements authorized to be planned, designed, acquired, constructed, installed, relocated, redeveloped and financed, specifically including related eligible costs for acquisition and administration, as authorized by the Special District Act, except as specifically limited in the Service Plan to serve the future taxpayers and property owners of the Districts as determined by the Board of the Districts in its discretion. The proposed maximum mill levy each District is permitted to impose upon the taxable property within its boundaries and shall be sixty (60) mills for district improvements and operating costs, plus up to five (5) mills for regional improvements if required by the City, subject to the limitations set forth in the Service Plan. The proposed districts will be located generally on the undeveloped property south of Richards Lake Road, west of I-25 Intersection, north of E. Vine Drive, and east of Turnberry Road. A description of the land contained within the boundaries of the proposed Districts is as follows: A parcel of land located in east half of Section 32, and the west half of Section 33, Township 8 North, Range 68 West of the Sixth Principal Meridian, and the north half of Section 4, Township 7 North, Range 68 West of the Sixth Principal Meridian, City of Fort Collins, County of Larimer, State of Colorado, containing approximately 998.49 acres, as further described in the Service Plan. NOTICE IS FURTHER GIVEN that pursuant to § 32-1-203(3.5), C.R.S., any person owning property in the proposed Districts may request that such property be excluded from the Districts by submitting such request to the Fort Collins City Council no later than ten days prior to the public hearing. All protests and objections must be submitted in writing to the City Manager at or prior to the public hearing or any continuance or postponement thereof in order to be considered. All protests and objections to the Districts shall be deemed to be waived unless presented at the time and in the manner specified herein. BY ORDER OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS AS PROVIDED IN COUNCIL RESOLUTION 2008-069 Published in: Fort Collins Coloradan Published on: August 21, 2018 EXHIBIT B MAILING LIST Parcel Owner Address City State Zip 88320‐00‐001 Anheuser‐Busch Foundation c/o Anheuser‐Busch Companies 1 Busch Place St. Louis CO 63118‐1849 88320‐00‐905 Poudre R‐1 School District 2407 LaPorte Ave Fort CollinsCO 80521‐2211 EXHIBIT C 2073 2074 MONTAVA METROPOLITAN DISTRICT Development Projection -- Total Available Revenues -- Service Plan Series 2023, 2027, 2031, 2035, 2039 & 2044 Senior Bonds Plus 2019B Cash-Flow Bonds Cash-Flow Bonds >>> Surplus Total CF Bond Less Payments Accrued Available for Application Available for Date Bond Interest Toward Interest Less Payments Balance of Sub Bonds Less Payments Balance of Total Surplus Surplus Cum. Surplus CF Bond of Prior Year CF Bond Bonds on Balance Sub Bond + Int. on Bal. @ Toward Accrued Accrued Principal Toward Bond CF Bond CF Bond Cash Flow Release Debt Service Surplus Debt Service Issued 7.00% Interest 7.00% Interest Interest Issued Principal Principal Pmts. 0 0 12/1/19 34,088 0 34,088 0 34,088 12,522,000 0 12,522,000 0 0 0 0 0 0 876,540 0 878,926 0 913,014 0 12,522,000 0000 0 0 0 876,540 0 940,451 0 1,853,465 0 12,522,000 0000 0 0 0 876,540 0 1,006,283 0 2,859,747 0 12,522,000 0000 0 0 0 876,540 0 1,076,722 0 3,936,470 0 12,522,000 0000 0 0 0 876,540 0 1,152,093 0 5,088,562 0 12,522,000 0000 0 0 0 876,540 0 1,232,739 0 6,321,302 0 12,522,000 0000 0 0 0 876,540 0 1,319,031 0 7,640,333 0 12,522,000 0000 0 0 0 876,540 0 1,411,363 0 9,051,696 0 12,522,000 0000 0 0 0 876,540 0 1,510,159 0 10,561,855 0 12,522,000 0000 0 0 0 876,540 0 1,615,870 0 12,177,725 0 12,522,000 0000 0 0 0 876,540 0 1,728,981 0 13,906,706 0 12,522,000 0000 0 0 0 876,540 0 1,850,009 0 15,756,715 0 12,522,000 0000 0 0 0 876,540 0 1,979,510 0 17,736,225 0 12,522,000 0000 566,350 0 566,350 876,540 566,350 1,551,726 0 19,287,951 0 12,522,000 566,350000 2,150,439 0 2,150,439 876,540 876,540 1,350,157 1,273,899 19,364,208 0 12,522,000 2,150,439000 2,511,994 0 2,511,994 876,540 876,540 1,355,495 1,635,454 19,084,248 0 12,522,000 2,511,994000 1,825,046 0 1,825,046 876,540 876,540 1,335,897 948,506 19,471,639 0 12,522,000 1,825,046000 2,033,246 0 2,033,246 876,540 876,540 1,363,015 1,156,706 19,677,948 0 12,522,000 2,033,246000 2,232,660 0 2,232,660 876,540 876,540 1,377,456 1,356,120 19,699,284 0 12,522,000 2,232,660000 2,420,719 0 2,420,719 876,540 876,540 1,378,950 1,544,179 19,534,055 0 12,522,000 2,420,719000 2,219,940 0 2,219,940 876,540 876,540 1,367,384 1,343,400 19,558,038 0 12,522,000 2,219,940000 2,263,527 0 2,263,527 876,540 876,540 1,369,063 1,386,987 19,540,114 0 12,522,000 2,263,527000 2,621,627 0 2,621,627 876,540 876,540 1,367,808 1,745,087 19,162,835 0 12,522,000 2,621,627000 2,570,385 0 2,570,385 876,540 876,540 1,341,398 1,693,845 18,810,388 0 12,522,000 2,570,385000 2,883,614 0 2,883,614 876,540 876,540 1,316,727 2,007,074 18,120,042 0 12,522,000 2,883,614000 2,557,953 0 2,557,953 876,540 876,540 1,268,403 1,681,413 17,707,032 0 12,522,000 2,557,953000 2,770,585 0 2,770,585 876,540 876,540 1,239,492 1,894,045 17,052,480 0 12,522,000 2,770,585000 2,768,385 0 2,768,385 876,540 876,540 1,193,674 1,891,845 16,354,308 0 12,522,000 2,768,385000 2,938,268 0 2,938,268 876,540 876,540 1,144,802 2,061,728 15,437,382 0 12,522,000 2,938,268000 2,931,668 0 2,931,668 876,540 876,540 1,080,617 2,055,128 14,462,871 0 12,522,000 2,931,668000 3,106,668 0 3,106,668 876,540 876,540 1,012,401 2,230,128 13,245,144 0 12,522,000 3,106,668000 3,105,268 0 3,105,268 876,540 876,540 927,160 2,228,728 11,943,577 0 12,522,000 3,105,268000 3,287,360 0 3,287,360 876,540 876,540 836,050 2,410,820 10,368,807 0 12,522,000 3,287,360000 3,287,735 0 3,287,735 876,540 876,540 725,816 2,411,195 8,683,429 0 12,522,000 3,287,735000 2,565,898 0 2,565,898 876,540 876,540 607,840 1,689,358 7,601,911 0 12,522,000 2,565,898000 2,565,498 0 2,565,498 876,540 876,540 532,134 1,688,958 6,445,086 0 12,522,000 2,565,498000 2,727,816 0 2,727,816 876,540 876,540 451,156 1,851,276 5,044,967 0 12,522,000 2,727,816000 2,718,632 0 2,718,632 876,540 876,540 353,148 1,842,092 3,556,022 0 12,522,000 2,718,632000 1,921,822 0 1,921,822 876,540 876,540 248,922 1,045,282 2,759,662 0 12,522,000 1,921,822000 1,919,222 0 1,919,222 876,540 876,540 193,176 1,042,682 1,910,156 0 12,522,000 1,919,222000 2,030,899 0 2,030,899 876,540 876,540 133,711 1,154,359 889,508 0 12,522,000 2,030,899000 2,033,524 0 2,033,524 876,540 876,540 62,266 951,774 0 205,000 12,317,000 2,033,314 211 0 211 1,217,771 211 1,217,982 862,190 862,190 0 0 0 355,000 11,962,000 1,217,190 581 0 792 1,218,171 792 1,218,963 837,340 837,340 0 0 0 381,000 11,581,000 1,218,340 (169) 0 623 1,299,305 623 1,299,928 810,670 810,670 0 0 0 489,000 11,092,000 1,299,670 (365) 0 258 1,295,380 258 1,295,639 776,440 776,440 0 0 0 519,000 10,573,000 1,295,440 (60) 0 199 500,279 199 500,477 740,110 500,477 239,633 0 239,633 0 10,573,000 500,477 (199) 0 0 499,479 0 499,479 740,110 499,479 257,405 0 497,038 0 10,573,000 499,479000 511,620 0 511,620 740,110 511,620 263,283 0 760,321 0 10,573,000 511,620000 510,528 0 510,528 740,110 510,528 282,804 0 1,043,125 0 10,573,000 510,528000 224,354 0 224,354 740,110 224,354 588,774 0 1,631,900 0 10,573,000 224,354000 222,154 0 222,154 740,110 222,154 632,189 0 2,264,088 0 10,573,000 222,154000 238,192 0 238,192 740,110 238,192 660,405 0 2,924,493 0 10,573,000 238,192000 234,592 0 234,592 740,110 234,592 710,233 0 3,634,726 0 10,573,000 234,592000 15,255,913 0 15,255,913 740,110 740,110 254,431 3,889,157 0 10,573,000 0 15,202,267 53,647 53,647 0 __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ _________ __________ 94,764,486 2,082 94,766,568 46,796,398 32,077,616 50,111,224 50,111,224 12,522,000 12,522,000 94,710,840 53,647 53,647 7/13/2018 E MMD Fin Plan 18 D1-6 SP LB Sum+CFS Prepared by D.A.Davidson & Co. Draft: For discussion purposes only. 3 2073 2074 MONTAVA METROPOLITAN DISTRICT Development Projection -- Total Available Revenues -- Service Plan Series 2023, 2027, 2031, 2035, 2039 & 2044 Senior Bonds Plus 2019B Cash-Flow Bonds Total Par: $150,035,000 Total Project: $132,028,050 Ser. 2023 Ser. 2027 Ser. 2031 Ser. 2035 Ser. 2039 Ser. 2044 $32,325,000 Par $33,655,000 Par $32,805,000 Par $30,630,000 Par $11,695,000 Par $8,925,000 Par Surplus [Net $28.445 MM] [Net $29.616 MM] [Net $28.868 MM] [Net $26.953 MM] [Net $10.293 MM] [Net $7.853 MM] Total Annual Release Cumulative Cov. of Net DS: Net Available Net Debt Net Debt Net Debt Net Debt Net Debt Net Debt Net Debt Surplus 0% D/A Surplus for Debt Svc Service Service Service Service Service Service Service to $15,003,500 $15,003,500 Target $0 0.0% 0 00.0% 0 $0 0 0 0 0.0% 230,000 0 230,000 0 230,000 0.0% 478,932 0 478,932 0 708,932 0.0% 794,529 0 794,529 0 1,503,461 0.0% 1,205,142 $0 0 1,205,142 0 2,708,603 0.0% 1,544,851 1,293,000 1,293,000 251,851 0 2,960,454 119.5% 2,179,999 1,293,000 1,293,000 886,999 0 3,847,453 168.6% 2,532,489 1,353,000 1,353,000 1,179,489 0 5,026,942 187.2% 3,040,942 1,355,600 $0 1,355,600 1,685,342 0 6,712,284 224.3% 3,659,923 1,433,000 1,346,200 2,779,200 880,723 0 7,593,007 131.7% 4,049,871 1,432,200 1,346,200 2,778,400 1,271,471 0 8,864,478 145.8% 4,576,071 1,521,200 1,411,200 2,932,400 1,643,671 0 10,508,149 156.1% 5,093,028 1,521,400 1,408,600 $0 2,930,000 2,163,028 0 12,671,176 173.8% 5,596,280 1,611,200 1,496,000 1,312,200 4,419,400 1,176,880 0 13,848,057 126.6% 6,140,793 1,612,000 1,494,800 1,312,200 4,419,000 1,721,793 566,350 15,003,500 139.0% 6,813,239 1,707,200 1,583,400 1,372,200 4,662,800 2,150,439 2,150,439 15,003,500 146.1% 7,177,994 1,708,000 1,583,200 1,374,800 $0 4,666,000 2,511,994 2,511,994 15,003,500 153.8% 7,998,046 1,813,000 1,677,600 1,457,200 1,225,200 6,173,000 1,825,046 1,825,046 15,003,500 129.6% 8,205,446 1,813,000 1,677,800 1,456,200 1,225,200 6,172,200 2,033,246 2,033,246 15,003,500 132.9% 8,757,260 1,922,000 1,777,400 1,545,000 1,280,200 6,524,600 2,232,660 2,232,660 15,003,500 134.2% 8,946,719 1,920,600 1,777,400 1,545,000 1,283,000 $0 6,526,000 2,420,719 2,420,719 15,003,500 137.1% 9,607,540 2,038,000 1,886,600 1,634,600 1,360,600 467,800 7,387,600 2,219,940 2,219,940 15,003,500 130.0% 9,646,527 2,034,400 1,885,600 1,635,200 1,360,000 467,800 7,383,000 2,263,527 2,263,527 15,003,500 130.7% 10,446,827 2,159,400 1,998,600 1,735,200 1,439,200 492,800 7,825,200 2,621,627 2,621,627 15,003,500 133.5% 10,396,585 2,157,800 2,001,000 1,735,600 1,440,000 $491,800 7,826,200 2,570,385 2,570,385 15,003,500 132.8% 11,181,414 2,289,400 2,122,000 1,840,200 1,525,400 520,800 $0 8,297,800 2,883,614 2,883,614 15,003,500 134.8% 11,210,953 2,288,800 2,121,800 1,839,800 1,527,000 518,600 357,000 8,653,000 2,557,953 2,557,953 15,003,500 129.6% 11,921,385 2,426,000 2,245,000 1,948,400 1,618,000 551,400 362,000 9,150,800 2,770,585 2,770,585 15,003,500 130.3% 11,921,385 2,425,400 2,246,600 1,946,600 1,619,800 552,800 361,800 9,153,000 2,768,385 2,768,385 15,003,500 130.2% 12,636,668 2,572,200 2,381,200 2,063,600 1,715,800 584,000 381,600 9,698,400 2,938,268 2,938,268 15,003,500 130.3% 12,636,668 2,570,400 2,383,400 2,064,600 1,717,200 583,800 385,600 9,705,000 2,931,668 2,931,668 15,003,500 130.2% 13,394,868 2,725,600 2,523,200 2,189,000 1,822,600 618,400 409,400 10,288,200 3,106,668 3,106,668 15,003,500 130.2% 13,394,868 2,726,400 2,525,000 2,191,800 1,817,800 621,400 407,200 10,289,600 3,105,268 3,105,268 15,003,500 130.2% 14,198,560 2,888,600 2,679,000 2,322,600 1,932,000 659,000 430,000 10,911,200 3,287,360 3,287,360 15,003,500 130.1% 14,198,560 2,888,625 2,679,000 2,321,200 1,930,400 659,800 431,800 10,910,825 3,287,735 3,287,735 15,003,500 130.1% 11,065,298 0 2,835,800 2,462,600 2,047,400 695,200 458,400 8,499,400 2,565,898 2,565,898 15,003,500 130.2% 11,065,298 0 2,838,000 2,461,000 2,043,200 698,800 458,800 8,499,800 2,565,498 2,565,498 15,003,500 130.2% 11,729,216 0 3,006,400 2,606,800 2,167,400 736,800 484,000 9,001,400 2,727,816 2,727,816 15,003,500 130.3% 11,729,216 0 3,005,983 2,609,000 2,169,800 737,800 488,000 9,010,583 2,718,632 2,718,632 15,003,500 130.2% 8,284,622 0 0 2,763,000 2,300,000 783,200 516,600 6,362,800 1,921,822 1,921,822 15,003,500 130.2% 8,284,622 0 0 2,767,600 2,297,800 786,200 513,800 6,365,400 1,919,222 1,919,222 15,003,500 130.2% 8,781,699 0 0 2,933,400 2,438,200 833,400 545,800 6,750,800 2,030,899 2,030,899 15,003,500 130.1% 8,781,699 0 0 2,933,575 2,435,400 833,000 546,200 6,748,175 2,033,524 2,033,524 15,003,500 130.1% 5,265,571 0 0 0 2,584,800 881,800 581,200 4,047,800 1,217,771 1,217,771 15,003,500 130.1% 5,265,571 0 0 0 2,585,200 882,800 579,400 4,047,400 1,218,171 1,218,171 15,003,500 130.1% 5,581,505 0 0 0 2,737,200 932,800 612,200 4,282,200 1,299,305 1,299,305 15,003,500 130.3% 5,581,505 0 0 0 2,738,125 934,800 613,200 4,286,125 1,295,380 1,295,380 15,003,500 130.2% 2,139,479 0 0 0 0 990,600 648,600 1,639,200 500,279 500,279 15,003,500 130.5% 2,139,479 0 0 0 0 988,000 652,000 1,640,000 499,479 499,479 15,003,500 130.5% 2,190,420 0 0 0 0 989,200 689,600 1,678,800 511,620 511,620 15,003,500 130.5% 2,190,420 0 0 0 0 989,892 690,000 1,679,892 510,528 510,528 15,003,500 130.4% 953,954 0 0000 729,600 729,600 224,354 224,354 15,003,500 130.8% 953,954 731,800 731,800 222,154 222,154 15,003,500 130.4% 1,011,192 773,000 773,000 238,192 238,192 15,003,500 130.8% 1,011,192 776,600 776,600 234,592 234,592 15,003,500 130.2% 1,071,863 819,450 819,450 252,413 15,255,913 0 130.8% _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ 370,892,136 59,500,425 61,943,983 60,380,175 56,383,925 21,484,492 16,434,650 276,127,650 94,764,486 94,764,486 [ EJul1318 23splbE ] [ EJul1318 27splbE ] [ EJul1318 31splbE ] [ EJul1318 35splbE ] [ EJul1318 39splbE ] [ EJul1318 44splbE ] 7/13/2018 E MMD Fin Plan 18 D1-6 SP LB Sum+CFS Prepared by D.A.Davidson & Co. Draft: For discussion purposes only. 2 2068 0000 1,290,463 899,957 2,190,420 2069 0000 1,290,463 899,957 2,190,420 2070 00000 953,954 953,954 2071 953,954 953,954 2072 1,011,192 1,011,192 2073 1,011,192 1,011,192 2074 1,071,863 1,071,863 __________ __________ __________ __________ __________ __________ __________ 79,795,615 83,045,374 81,092,792 75,647,626 28,921,818 22,388,911 370,892,136 7/13/2018 E MMD Fin Plan 18 D1-6 SP LB Sum+CFS Prepared by D.A.Davidson & Co. Draft: For discussion purposes only. 1 Election Sept. 25, 2018 Deadline To Consider Tradeoffs • Scenario A - Development of this parcel will increase land consumption, water consumption and energy demand to deliver greater housing variety, affordable housing, and community amenities. Mitigations • Both - The project will be constructed to maximize the use of the land, reduce consumption of water and energy, and delivery enhancements to storm water control and quality Key Alignment: NLSH 1.1: Improve access to quality housing that is affordable to a board range of income levels; NLSH 1.6, Protect and preserve the quality of life in neighborhoods; ENV 4.1: Achieve Climate Action Plan (CAP) 2020 goals and continue progress toward the 2030 goals; ENV 4.9 Sustain and improve the health of the Cache la Poudre River and its watershed; TRAN 6.1: Improve safety for all modes of travel. ATTACHMENT 4 ts ATTACHMENT 3