To: Honorable Mayor and Members of Town Council
From: Robert J. Slentz, Town Attorney
Elizabeth Allen, Assistant Town Attorney
Title
Resolution Approving the Consolidated Amended and Restated Service Plan for Castleview Metropolitan District No. 1 and Service Plan for Castleview Metropolitan District No. 2
Body
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Background
This proposal divides Castleview Metropolitan District into District Nos. 1 and 2 which coincide with The Oaks Filing Nos. 2 and 3, respectively. The Consolidated Service Plan amends and restates in its entirety the original District service plan approved by the Town Council in 2006 and approves the organization of District No. 2. By separate resolution certain property within District No. 1 will be excluded in order to accommodate the inclusion within District No. 2. The collective boundaries of the two Districts encompass 224 acres and at build-out will have approximately 236 homes and 543 residents. No development has taken place within the Districts’ boundaries.
The amendment presents current projections for capital expenditures, debt issuance and property tax for each of the Districts.
Updated Financial Information
The estimated cost of public improvements to be constructed by the Districts are projected at $20 million, and the total anticipated debt issuance at $26.9 million. It is projected that the Districts will issue two series of 30-year term bonds ($17.8 million in 2019 and $26.6 million in 2029), the latter includes a refunding of $17.5 million of the 2019 series.
The financial plan projects that the Districts’ debt may be retired with a mill levy capped at 63.6 mills, subject to adjustment to retain revenue neutrality upon constitutional reassessment. The Districts also propose to impose a $2,000/unit capital surcharge. The two Districts are authorized to impose operation and maintenance mill levies, however the total mill levy for debt service and operation and maintenance may not exceed 74.6 mills, subject to reassessment adjustment. In addition, the duration of the debt service mill levy on any property is limited to 35 years, irrespective of the status of the debt retirement, unless extended by vote of a resident-controlled Board of Directors.
Mill levy comparison
The mill levy comparison was presented with the Lanterns Metropolitan District Nos. 1-5 service plan presentation.
Review Standard
The Special District Control Act, Article 1, Title 32, C.R.S., and Chapter 11.02 of the Castle Rock municipal code, the Special District Oversight ordinance (“SDO”) govern the Town Council’s consideration of the request for Service Plan approval.
The Special District Act specifically authorizes the Council to approve the Service Plan as submitted, to disapprove the Service Plan, or to conditionally approve the Service Plan subject to the receipt of additional information or modification. Fundamentally, the Council’s decision should be based on the Service Plan’s demonstration that the Districts will develop the necessary infrastructure to serve the The Oaks Filing Nos. 2 and 3, and that the Districts will have the financial ability to pay for the infrastructure with reasonable taxes and fees, given the level of development projected.
The Special District Act provides that the Council shall disapprove a service plan unless it finds that:
- there is sufficient projected need for the services the Districts will provided because existing services are inadequate;
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- the Districts are capable of providing sufficient and economical service; and
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- District debt can be retired on a reasonable basis.
In addition to the Special District Act, the request must be found to be in compliance with the SDO. The SDO generally provides additional detail and requirements on the submittals otherwise required by the Special District Act, and establishes objective conditions, which trigger the need for service plan amendment under the Special District Act.
The organizers may appeal an adverse decision by the Council to the District Court.
Staff Recommendation
Staff recommends approval of the Service Plan amendments as presented. The capital and financial plans reflect reasonable projections. Irrespective of the market acceptance of The Oaks Filing Nos. 2 and 3 over time, the mill levy cap limits the financial burden of individual homeowners/taxpayers.
Proposed Motion
“I move to approve the Resolution as introduced by title”
Attachments
Attachment A: Resolution
Exhibit 1: Service Plans