To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Michael J. Hyman, Town Attorney
Title
Discussion/Direction: Brickyard Metropolitan District No. 1 – Review of Proposed Bond Issuance
Body
________________________________________________________________________________
Executive Summary
Brickyard Metropolitan District No. 1 (the “District”) intends to issue bonds as authorized by the Consolidated Service Plan (the “Service Plan”) for Brickyard Metropolitan District Nos. 1-3 (collectively, the “Districts”). Specifically, the District is proposing the issuance of its General Obligation Limited Tax and Special Revenue Bonds, Series 2025, in the estimated amount of $70,090,000 (the “2025 Bonds”). The proceeds of the 2025 Bonds will be used to finance the construction of public improvements to serve the Brickyard development and to fund the costs of issuing the 2025 Bonds.
The District has submitted documentation to the Town Manager, Town Attorney and Director of Finance showing that the District will be able to repay the 2025 Bonds within the debt and mill levy parameters authorized by the Service Plan. Under the Castle Rock Municipal Code (the “Town Code”), the proposed transaction is presented for review and comment by the Town Council, but no formal approval is required or authorized.
History of Past Town Council, Boards & Commissions, or Other Discussions
Organization and Service Plan. The District is organized pursuant to the Service Plan, which Plan was approved by Resolution No. 2025-032 of the Town Council on March 4, 2025. Under the Service Plan, the District has a debt mill levy cap which is currently 50.000 mills, subject to future adjustments in the District’s assessed valuation in order to prevent the diminution of actual tax revenues. District bonds shall discharge no later than 40 years from the date of issuance. The total debt issuance authorized by the Service Plan for all the Districts is $76,500,000.
Discussion
Section 11.02.110 of the Town Code. Section 11.02.110 of the Town Code provides that metropolitan districts must submit a proposed financing for the issuance or refinancing of debt, including certain information and documents related to the proposed debt, such as the interest rate, financing costs, the type of revenues pledged, the amount of the mill levy pledged, and the offering statement (the “Proposed Debt Documents”), to the Town for review and comment before issuing or refinancing the proposed debt. Such submission must include a certification by the District that the proposed issuance is authorized by and in compliance with the Service Plan.
Proposed Bonds. The District’s current Financing Plan proposes the issuance of its 2025 Bonds in the estimated amount of $70,090,000. The interest rate currently assumed is 6.00% and is based upon a final maturity date of December 1, 2057. The 2025 Bonds will be payable from the District’s debt service mill levy, incremental property tax revenues pledged by the Castle Rock Urban Renewal Authority, and public improvement fees assessed against certain retail sales and lodging activities that occur within the Districts.
District Submission of Proposed Debt Documents. The District has submitted various Proposed Debt Documents to the Town, including a draft Forecast and a Preliminary Limited Offering Memorandum, which show that the District can repay the 2025 Bonds.
Staff Recommendation
There is no formal action to be taken by Town Council with respect to this item. Based upon a thorough review of the Proposed Debt Documents, Town Staff recommends that Town Council make no comments to the District with respect to the proposed bond issuance.
Attachments
Attachment A – Brickyard Metropolitan District No. 1 – Draft Forecasted Surplus Cash Balances and Cash Receipts and Disbursements
Attachment B – Preliminary Limited Offering Memorandum -- Brickyard Metropolitan District No. 1 General Obligation Limited Tax and Special Revenue Bonds, Series 2025