To: Honorable Mayor and Members of Town Council
From: Michael J. Hyman, Town Attorney
Title
Resolution Approving the Second Amended and Restated Consolidated Service Plan for Crystal Valley Metropolitan District Nos. 1 and 2
Body
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Executive Summary
Resolution 2020-__ (Attachment A) approves the Second Amendment to the Amended and Restated Consolidated Service Plan for Crystal Valley Metropolitan District Nos. 1 and 2 (Second Amendment). The Second Amendment authorizes District No. 2 to issue $80,263,889 of debt, of which: (i) $75,415,000 will be used to refund the District’s currently outstanding general obligation debt and provide funds to pay for certain public infrastructure costs previously funded by the developer, Crystal Valley Recovery Acquisition, LLC (CVRA); (ii) $1,248,889 will be used to pay CVRA for the Central Corridor landscaping improvements; and (iii) $3,600,000 will be used to fund the costs of water tank improvements within a sub-district yet to be organized.
Further details of the proposed debt refinancing plan are set forth in the Districts’ June 10, 2020 Petition and Amendment to Consolidated Service Plan Submittal (Attachment B). The proposed debt will be of a higher credit quality and a lower cost, and will be repaid within the same term as the District’s current outstanding debt. Issuance of the debt will not increase property taxes in the Districts.
Meeting with District Residents
On June 24, 2020, a presentation was given on the Second Amendment and proposed debt refinancing plan at a special meeting of the District No. 2 Board. Approximately 26 residents of the District attended the presentation and were invited to ask questions and provide comments concerning the proposal. An outline of the presentation prepared by the District’s financial advisor, Piper Sandler Municipal Advisory Services, is attached (Attachment C).
Service Plan Amendment Review Standard
The Special District Control Act, Article 1, Title 32, C.R.S. and Chapter 11.02 of the Castle Rock Municipal Code govern the Town Council’s consideration of the request for approval of the Second Amendment. Following a public hearing thereon, the Special District Act specifically authorizes the Council to approve the Amendment as submitted, to disapprove the Amendment, or to conditionally approve the Amendment. Notice of the public hearing was provided in accordance with the Special District Act (Attachments D and E).
As relevant to the Amendment, the Special District Act provides that the Council shall disapprove the Amendment unless it finds that Districts have, or will have, the financial ability to discharge the proposed debt on a reasonable basis. The Amended and Restated Financial Plan (Attachment B, Exhibit G) is based on the current financial condition of the Districts and revised financial projections which evidence the ability of District No. 2 to retire all indebtedness proposed under the restructuring. The Financial Plan has been approved by staff and found to present reasonable assumptions and projections.
The Districts may appeal an adverse decision by the Council to the District Court.
Staff Recommendation
Staff recommends approval of the Second Amendment to the Amended and Restated Consolidated Service Plan as presented.
Proposed Motion
“I move to approve Resolution No. 2020-__: A Resolution Approving the Second Amended and Restated Consolidated Service Plan for Crystal Valley Metropolitan District Nos. 1 and 2.”
Attachments
Attachment A: Resolution 2020-__
Attachment B: Petition and Amendment to Consolidated Service Plan Submittal
Attachment C: Outline of June 24, 2020, presentation to residents of District No. 2
Attachment D: Publisher’s Affidavit - Notice of Public Hearing
Attachment E: Certificate of Mailing - Notice of Public Hearing