To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Michael J. Hyman, Town Attorney
Title
Dawson Trails Metropolitan District No. 1 - Review of Proposed Bond Issuance
Body
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Executive Summary
Per section 11.02.110 of the Castle Rock Municipal Code, all metro districts within the Town must submit proposed financings of district debt to the Town Council for review and comment.
Background
Dawson Trails Metropolitan District No. 1 (the “District”) has requested that the Town Council review and, if appropriate, comment upon the proposed issuance of Special Revenue Capital Appreciation Turbo Refunding and Improvement Limited Tax General Obligation Bonds. (the “Bonds”). A “turbo” bond is a type of municipal bond designed to accelerate the repayment of principal to investors when excess cash becomes available. These bonds will have two maturity dates: an expected earlier maturity, when the bond converts from a capital appreciation turbo bond to cash flow bonds, and a scheduled long-term maturity when the cash flow bonds are discharged.
The approximate principal amount of the Bonds is $280,215,979, with an estimated interest rate of 7.00% (anticipated to yield 7.25% as the result of compounding interest). The initial maturity date of the Bonds is in 7 years (December 1, 2033), with a final discharge date of December 2, 2074. The Bonds will allow the District to refund and defease the District’s outstanding 2024 Bonds and 2025B Bonds, as well as to fund approximately $30,000,000 in additional public improvements that are authorized by the District’s Service Plan.
The District’s debt limit is $1,062,390,000. With the proposed issuance, the District will have $832,174,021 in debt limit remaining. The estimated interest rate and term of the Bonds are within the Service Plan limits of 18% and 50 years, respectively. Lastly, the District will not be exceeding its maximum debt mill levy of 64.044 mills, which levy is subject to future assessed valuation adjustments by the State.
Staff Recommendation
Based on the District’s submittal, Town Staff finds that the Bonds comply with the Service Plan and Section 11.02.110 of the Town Code. Town Staff recommends that the District be allowed to move forward with the issuance of the Bonds as proposed without further comment.
Proposed Motion
No motion is necessary for this item.
Attachments
Attachment A: Letter to Town of Castle Rock
Attachment B: Certificate Concerning District Financing