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HomeMy WebLinkAbout 17-19 - Approving the Third Amendment to the Greens Metro DistrictSTATE OF COLORADO SS: COUNTY OF WELD CERTIFICATE OF AUTHENTICITY (Proposed Third Amendment to Greens Metro District Service Plan) I, Larissa Medina, Town Clerk, in and for said Town of Firestone, in the County of Weld, in the State aforesaid, do hereby certify that the attached is a true and correct copy of Resolution No. 17-19, adopted by the Firestone Town Board of Trustees of the Town of Firestone, on the 12th day of April, 2017. In witness whereof, I have hereunto set my hand and the seal of the Town of Firestone, this 12th day of April 2017. Town Clerk q<'(AL) ®� t� TOWN OF FIRESTONE, COUNTY OF WELD, STATE OF COLORADO 1N RE THE THIRD AMENDMENT TO SERVICE PLAN FOR THE GREENS METROPOLITAN DISTRICT, IN THE TOWN OF FIRESTONE, COUNTY OF WELD, STATE OF COLORADO RESOLUTION NO. 17-I RESOLUTION OF APPROVAL WHEREAS, by Resolution No. 02-41, adopted September 26, 2002, the Board of Trustees of the Town of Firestone, County of Weld, State of Colorado (the "Town"), approved the Service Plan for The Greens Metropolitan District (f/k/a Firestone Trails Metropolitan )istrict); and WHEREAS, by Resolution No. 15-41, adopted August 12, 2015, the Town approved the Second Amendment to the Service Plan for The Greens Metropolitan District (the "District"); and WHEREAS, pursuant to the Special District Act, there has been filed with the Town a proposed Third Amendment to Service Plan for the District; and WHEREAS, pursuant to the provisions of Title 32, Article 1, Part 2, C.R.S. as amended, the Board of Trustees of the Town, following due notice, held a public hearing on the proposed Third Amendment to Service Plan, which hearing was held on April 12, 2017; and WHEREAS, the Board of Trustees has considered the Third Amendment to Service Plan and all other testimony and evidence presented at the hearing; and WHEREAS, based upon the testimony and evidence presented at the hearing, it appears that the Third Amendment to Service Plan for the District should be approved by the Board of Trustees, subject to certain conditions set forth below, in accordance with Section 324- 204.5(1)(c), C.R.S. THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO: Section 1. That the Board of Trustees, as the governing body of the Town of Firestone, Colorado, does hereby determine, based on representations by and on behalf of The Greens Metropolitan District (the "District") that all of the requirements of Title 32, Article 1, Part 2, C.R.S., as amended, relating to the filing of the proposed Third Amendment to Service Plan for The Greens Metropolitan District have been fulfilled; that notice of the hearing was given in the time and manner required by the Town; and that the modifications proposed by the Third Amendment to Service Plan do not constitute material modifications of the Service Plan. Section 2. That, based on representations by and on behalf of the District, the Board of Trustees of the Town has jurisdiction over the subject matter of the proposed Third Amendment to Service Plan pursuant to Title 32, Article 1, part 2, C.R.S., as amended. Section 3. That, pursuant to Section 32-1-207, C.R.S., Section 32-1-204.5, C.R.S., Section 32-1-202(2), C.R.S., and Section 324-203(2), C.R.S., the Board of Trustees of the Town of Firestone, Colorado, does hereby find and determine, based on the Service Plan, as amended by the Third Amendment to Service Plan, the representations by and on behalf of the District and other evidence presented at the public hearing, that: (a) There is sufficient existing and projected need for organized service in the areas to be serviced by the District; (b) The existing service in the areas to be served by the District is inadeduate for present and projected needs; (c) The District is capable of providing economical and sufficient service to the area within its boundaries; (d) The area in the District districts has, or will have, the financial ability to discharge the proposed indebtedness on a reasonable basis; and (e) The approval of the Third Amendment to Service Plan is in the best interests of the District. Section 4. That the Third Amendment to Service Plan for The Greens Metropolitan District, as set forth in Exhibit A to this Resolution and dated March 20, 2017, is hereby approved subject to the District paying all reasonable expenses of the Town, its attorneys and consultants, as well as the Town's reasonable processing fees, in connection with the modification of the Service Plan approved herein in accordance with § 32-1-204.5(1)(c), C.R.S. Section 6. That a certified copy of this Resolution be filed in the records of the Town of Firestone and submitted to the District. RESOLVED, ADOPTED AND APPROVED this day AT�T:� • ,, Carissa'iGledina. Town Clerk T OF FIRES_ ONE, COLORADO xPaul Sorensen, Mayor of o®® m IN THE TOWN OF FIRESTONE, COLORADO Resubmitted March 20, 2017 THE GKEENS METROPOLITAN DISTRICT THIRD AMENDMENT TO SERVICE PLAN I. INTRODUCTION This Third Amendment to the Service Plan (the "Third Amendment") for The Greens Metropolitan District (the "District") amends and supersedes, only to the extent provided herein, the original Firestone Trails Metropolitan District Service Plan approved by Resolution 02-41 adopted by the Board of Trustees on September 26, 2002 (the "Service Plan") as amended by the First Amendment thereto approved by the Board of Trustees of the Town of Firestone, Colorado (the "Town") April 10, 2013 and confirmed by the Town by the First Amendment to the Service Plan (the "First Amendment") to confit•�n the name change of the District to The Greens Metropolitan District, as amended by the Second Amendment to the Service Plan (the "Second Amendment") approved by the Board of Trustees of the Town by Resolution 15-41 on August 12, 2015 to exclude the Hamilton Property from the boundaries of the District and limit the District's boundaries acid update exhibits to reflect only the District Property after the exclusion of the Hamilton Property. The Town has jurisdiction to adopt a resolution of approval to approve this Third Amendment by virtue of Section 32-1-204.5 C.R.S., et sey. The purpose of the Third Amendment is to clarify and revise certain language in the Service Plan which sets forth: (1) limits on call protection, (2) that all bonds are issued for cash, and (3) the requirement of the use of a Trustee for the issuance of all bonds, including Developer Bonds. The modifications of the Service Plan are necessary to update the Service Plan to ensure that the issuance of debt by the District is in the most effective and efficient manner, and to reduce the costs of issuance and eliminate restrictive language which may have an unintended negative effect on the issuance of Debt by the District and incurrence of unnecessary costs and expensesA This Third Amendment shall amend and restate the following portions of Article V: A. Portions of Section (d) entitled "Other Financial Restrictions, Limitations and Requirements"; and B. Portions of Section (f) entitled "Investor Suitability" This Third Amendment is submitted pursuant to �§ 32-1-201, et seq., C.R.S., as amended (the "Special District Control Act"), and the requirements of the Town as set forth in the Service Plan. The District is aquasi-municipal corporation and political subdivision of the State of Colorado. The Town approved the Service Plan for the District on September 26, 2002 (the "Service Plan") and the Weld County District Court ordered the organization of the District on November 21, 2002 pursuant to the requirements of the Special District Control Act. This Third Amendment shall not change the primary terms, conditions and exhibits of the original Service Plan as it is currently amended, except for only the following select sections, references and exhibits. II. ARTICLE V ��OTHER FINANCIAL RESTRICTIONS, LIMITATIONS AND REQUIREMENTS" The first paragraph of Article V, Section (d) of the Service Plan, entitled "Other Financial Restrictions, Limitations and Requirements", is revised to eliminate the requirement that all bonds be sold for cash. Such first paragraph of Article V, Section (d) shall be replaced in its entirety with the following: "d. Other Financial Restrictions, Limitations and Requirements. E The District shall request voter authorization for such amount of general obligation debt as the District deems sufficient to allow for allocation of the amounts deposited in the Town's capital improvements fund (as described in Article V.c, above) among the District's powers, unforeseen contingencies, increases in conshuction costs due to inflation and all costs of issuance, including capitalized interest, reserve funds, discounts, legal fees and other incidental costs of issuance; provided, however, that the amount of general obligation debt (together with construction financing notes) achially issued by the District shall not exceed the debt limitation of Four Million, Four Hundred Thousand Dollars ($4,400,000) as stated in Article V.b., above. The authorized maximum voted interest rate is fifteen percent (I S%) per annum and the maximum underwriting discount is fow• percent (4%) of bond principal. The actual interest rates and discounts within such maximum amounts, will be determined at the time the bonds are sold by the District and will reflect market conditions at the time of sale; provided, however, that the actual interest rate shall not exceed Five Hundred (500) basis points above the thirty (30) year `AAA' Municipal Market Data rate in effect at the time the bonds are sold. The interest rate shall be a simple interest rate without compounding for unpaid principal or interest." III. ARTICLE V "OTHER FINANCIAL RESTRICTIONS, LIMITATIONS AND REQUIREMENTS" The fifth paragraph of Article V, Section (d) of the original Service Plan, entitled "Other Financial Restrictions, Limitations and Requirements", is revised to eliminate the requirement that all bonds require the structuring and use of bank trustee. Such fifth paragraph of Article V, Section (d) shad be replaced in its entirety with the following: "All publicly placed bonds of the District shall be sti•uctured utilizing a commercial bank with trust powers as trustee to hold the bond proceeds and debt service funds and to pursue 3 remedies on behalf of the bondholder. Privately placed bonds of the District may alternatively be structured utilizing a commercial bank as a paying agent to no and administer bond proceeds and debt service funds." IV. ARTICLE V "INVESTOR SUITABILITY" Subsection (1) of Article V, Section (f) of the Service Plan, entitled "Investor Suitability", is revised to clarify that call protection on bonds shall not exceed five (5) year call protection. Such subsection (1) of Article V, Section (f) shall be replaced in its entirety with the following: "f. Investor Suitability. 1. Developer Bonds shall be issued only to MSP Corporation, a Colorado corporation, its affiliates, subsidiaries, heirs, successors or assigns (collectively, the "Developer"). The actual amount of the bonds issued will be subject to assessed valuations and market conditions as they exist at the time of issuance of each series of bonds and will be issued only in compliance with the above -stated debt limit and all other applicable requirements and restrictions as provided in the Service Plan. Call protection on all bonds issued shall not exceed a period of five (5) years from the date of initial issuance; and" V. EFFECT OF THIRD AMENDMENT Except as specifically modified herein, the original Service Plan of the District as approveI by the Board of Trustees on September 26, 2002, as amended by the First Amendment thereto approved by the Board of Trustees on April 10, 2013, and as amended by the Second Amendment thereto approved by the Board of Trustees on August 12, 2015 remains in effect. VI. RESOLUTION OF APPROVAL The District and proponents of the District agree to and shall incorporate the Board of Trustees' Resolution of Approval, including any conditions of such approval, into this Third Amendment to the Service all presented to the Weld County District COUrt. Such resolution shall be attached as Exhibit A. VII. CONCLUSION This Third Amendment demonstrates that: a. There is sufficient existing and projected need for organized service in the area to be serviced by the District; b. The existing service in the area to be served by the District is inadequate without the District for present and projected needs; c. The District is capable of providing economical and sufficient service to the area within its proposed boundaries: d. The a2•ea to be included in the District has, or will have, the financial ability to discharge the proposed indebtedness on a reasonable basis; e. The facility and service standards of the District are compatible with the facility and service standards of Weld County and Town of Firestone, which are interested parties hereunder. § 32-1-204(1), C.R.S.; f. The Third Amendment will be in the best interests of the area to be served. VIII. CERTIFICATION It is hereby respectfully I•equested that the Board of Trustees of the Town of Firestone, Colorado, which has jurisdiction to approve this Third Amendment by virtue of Section 324- 204.5 and Section 32-1-207(2) C.R.S., et seq., as amended, adopt a resolution of approval which approves this Third Amendment to the Service Plan for The Greens Metropolitan District as 5 submitted. The undersigned will cause written notice of the Town's hearing on the proposed Service an to be duly given to all "interested parties" within the meaning of § 32-1-204, C.R.S., and will or has caused all other required filings to be made and all other applicable procedural requirements to be met. THE GREENS METROPOLITAN DISTRICT By: Marcus Palkowitsh, President EXHIBIT A Form of Resolution of it of Firestone Approving the Third Amendment 7 Memorondunz To: Mr. Samuel J. Light, Esq. Light Kelly, P.C. Mr. Bruce Nickerson Ms. Carissa Medina Town of Firestone From: David S. O'Leary, Esq. Re: Proposed Third Amendment to Service Plan for The Greens Metropolitan District Date: March 20, 2017 The Greens Menropolitan District (the "District") has requested that the Town of Firestone (the "Town") consider the attached proposed Third Amendment to the Service Plan (the "Service Plan") for the District to help facilitate a bond issuance by the District. Based upon initial preparation for the issuance of bonds and review of the Service Plan there are three (3) issues to be addressed in facilitating the completion of the bond issuance through changes in the Service Nan, Pl 1. No Call Protection —The current language regarding call protection is confusing and conflicting. The proposal conforms this provision into a 5 Year Call Protection. The current language restricts the marketability of the bonds and creates the need to prepare a new bond issuance if the Developer sells the bonds in the future. Placing a five (5) year call on the bonds is more in tune with industry standards and is still more restrictive than typical non -rated District bond issuances which typically have a ten (10) year call. 2. Bonds .must be issued. for cash —The current language in the Service Plan provides that all bonds must be issued for• cash. This creates a logistical problem with Developer issued bonds, reimbursements and exchanges for bank financing, and creates a phantom income tax situation. The unintended consequence of issuing for cash is that the bonds would have to be issued immediately or too soon if the bonds cannot be used as a reimbursement or exchange for another financial instrument. This in turn raises costs of bond issuance and more interest would accrue to the detriment of the District. These are District funds which do not need to be incurred or expended unnecessarily. Developer Bonds are typically not issued for cash; rather there is an exchange of a Bond for the reimbursement obligations to the Developer or other entity which holds the reimbursement obligation of the District and no cash is exchanged. This avoids the creation of a phantom income tax situation. DN 168231 G. I 3. Requirement of using a Trustee — The language in the current Service Plan requires any financing to be facilitated through a trustee with trust provisions. This creates additional costs for the District when it is not needed for a Developer issued bond (which will result in an additional $1,500 - $3,000 upon issuance and additional costs of $2,000-$5,000 per year which are paid for by the District as an additional administrative cost using taxpayer funds). Many bond financing transactions use bank departments and refer to the agent as a paying agent. This change will reduce District administrative costs and provide for quicker repayment of the bonds, which is beneficial to all homeowners within the District. We respectfully request being placed on the next available agenda for consideration by the Town. Thank you for your time and consideration of this application for a Third Amendment to the Service Plan for The Greens Metropolitan District to clean up the language and facilitate a bond issuance by the District. 2 DN 168231 G. l