July 28, 2010 Dianne Miller Miller Rosenbluth, LLC 700 17 th Street - - PowerPoint PPT Presentation

Presentation to Garfield County Planning Commission July 28, 2010

Dianne Miller Miller Rosenbluth, LLC 700 17th Street Suite 2200 Denver CO 80202 303.285.5320

 RE North, RE South and RE East  Overview of special districts  Statutory requirements  Why are these districts needed now?  Special district provisions that protect property

• wners and the county

 Required and permissive findings

 Rocky Shepard

• Carbondale Investments, LLC
• the property owner’s representative and organizer of

the proposed districts

 Dianne Miller

• Miller Rosenbluth, LLC
• legal counsel to the proposed districts

 Sam Otero

• 8140 Partners, LLC
• engineer for the proposed districts

 Bruce O’Donnell

• Geo K Baum & Company
• financial advisor to the proposed districts

Summary of Significant Content of Service Plans

 Carbondale Investments proposes 3 metropolitan

districts on property owned by them to serve a residential and commercial community to be known as “River Edge Development” (the “Development”)

 The Development consists of approximately

239.94 acres and contains commercial development, up to 1200 units of residential development including the affordable housing component required by Article 8 of the Garfield County Unified Land Use Resolution.

 The Districts are

located between SH82 and the Roaring Fork River, south of CR113 and are bi-sected by the Roaring Fork Transportation Authority rail right-of-way

 The Districts shall be empowered to provide

the necessary public infrastructure improvements to the Development, including water, sanitary sewer, storm drainage, streets, traffic control, park and recreation, transportation and other public facilities and services as permitted by statute

 The estimated cost of the improvement is

$60,354,388 based on the maximum build

• ut scenario in the Service Plans

 The Districts will be empowered to operate and

maintain any public infrastructure not dedicated to other governmental entities. The anticipated cost of annual operations and maintenance, at full built out, is $1,500,000 per year

• Carbondale Investments is currently re-negotiating

certain terms of an existing pre-inclusion agreement with Roaring Fork Water & Sanitation District and anticipates that water and sewer services will be provided by RFW&S, although the RE Districts will remain

• bligated to construct all water and sanitary sewer

facilities for the Development and will to operate the non-potable irrigation system

 A mill levy of 45.00 mills is proposed to be assessed by

the Districts generating approximately $34,300 per year for each $1,000,000 of assessed value. These tax revenues will be used to pay for each of the Districts’

• peration expenses, maintenance costs and debt
• bligations
• 35 mills is anticipated to be dedicated to the payment of bonds

and 10 mills to operations

 A facility fee of one percent (1%) of the home sale price of

each residential unit shall be assessed within the North District and the South District and is expected to produce a total of $4,983,502 through 2045

 User fees will be used to assist with operations. These

fees may include, but not be limited to user fees charges for use of community facilities; user fees for potential internal transit system and a raw water system fee

 The maximum general obligation indebtedness

for the Districts is not expected to exceed $40,500,000

 The Districts shall have a mill levy limitation of

50.00 mills, Gallagherized

 The Financial Plan anticipates a single bond issue

in 2015 in the par amount of $27,000,000, the proceeds of which will reimburse Carbondale Investments for amounts they will expend on public infrastructure for the Development

• Carbondale Investments investment in the Development

will greatly exceed the amount of proceeds available from bonds issued by the Districts

Historic and Current Trends and Information

 Special Districts date back to the early mining

camps in Colorado in the late 1800s. As the camps grew, the residents sought mechanisms to join together to provide certain essential services such as fire protection and sewer service. Special districts of one form or another have been utilized since that time

 Colorado special districts have been instrumental

in providing public infrastructure to meet the growing needs of the state's population in the face of increasing demands on cities and counties to keep up with the ever-increasing need for urban services

Source: http://www.sdaco.org/sites/default/files/attachments/ Guide_for_Citizens_da.pdf_5-29-09.pdf

 Although special districts already existed, the legal

structure was recognized by an authorizing act of the Colorado General Assembly in 1949 recognizing special districts as a form of local government created to provide certain municipal-type services in unincorporated or rural areas of the state. The General Assembly declared that special local government service districts could be created to provide necessary and desired services within designated boundaries

 In 1981, the General Assembly recodified all the

statutory provisions relating to various types of special districts in what is referred to as the Special District Act. The Special District Act constitutes article 1 of Title 32 of the Colorado Revised Statutes, which is the general source of most of the statutory authorization, as well as limitations, upon the formation and operation of special districts

Source: http://www.sdaco.org/sites/default/files/attachments/Guide_for_Citi zens_da.pdf_5-29-09.pdf

 In 1981, the General Assembly recodified all the

statutory provisions relating to various types of special districts in what is referred to as the Special District Act. The Special District Act constitutes article 1 of Title 32 of the Colorado Revised Statutes, which is the general source of most of the statutory authorization, as well as limitations, upon the formation and operation of special districts

 Special districts organized pursuant to Title 32 are

quasi-municipal corporations and political subdivisions of the state of Colorado organized for specific functions. As such, their activities are subject to extensive statutory guidelines

Source: http://www.sdaco.org/sites/default/files/attachments/Guide_for_Citizen s_da.pdf_5-29-09.pdf

• As of May 25, 2010, there are 3293 active local

governments in the State

 62 counties, (Including Denver and Broomfield)  269 municipalities  1885 special districts, of which 1238 (65%) are metropolitan districts (Title 32)  1077 other local governments (highway and airport authorities, Title 29, 30 and 31 districts)

Source: http://www.dola.state.co.us/dlg/local_governments/lgtypes.htm

• Property taxes supporting government services and

facilities:

 Schools $3,267,970,264 50.2%  Counties $1,602,002,645 25.2%  Municipalities $ 335,814,890 5.3%  Special Districts $1,156,024,406 18.1%  Metropolitan Districts $ 338,049,347 5.3%

• Fire protection districts account for 30.36%

($350,386,306) and metropolitan districts account for 29.29% ($338,049,347) of the total amount shown above under Special Districts

Source: http://www.dola.state.co.us/dpt/publications/docs/2008_annual_report/Overview_2008AnnualReportFinal0 60509.pdf

http://www.dola.state.co.us/dpt/publications/do cs/2008_annual_report/SpecDistRevenue.pdf

• Special districts have proven to be increasingly

popular tools in providing services. In 1995, there were 870 Title 32 special districts. Today there are approximately 1885 special districts. Nearly all of the growth in recent years is accounted for by the formation of new metropolitan districts

• All major developments in the state are are

supported by special districts: Highlands Ranch, Inverness, Meridian, Denver Tech Center and Central Platte Valley and Union Station all are supported by special and metropolitan districts

 The Sp

Special ial District strict Ac Act (Title 32, article 1, C.R.S.) contains the legal framework for many types of special districts, including:

• Ambulance Districts
• Fire Protection Districts (may also provide ambulance

and emergency medical and rescue services)

• Health Service Districts
• Metropolitan Districts
• Park and Recreation Districts
• Sanitation Districts
• Water Districts
• Water and Sanitation Districts
• Health Assurance Districts
• Mental Health Care Service Districts
• Tunnel Districts
• Forest Improvement Districts

 Other common types of districts that are not

governed by the Special District Act include:

• Business Improvement Districts
• Cemetery Districts
• Conservation Districts (soil)
• Downtown Development Authorities
• Irrigation Districts
• Library Districts
• Local Improvement Districts
• Pest Control Districts
• Public Improvement Districts
• Special Improvement Districts
• Water Conservancy Districts
• Water Conservation Districts

Special Districts v. Metropolitan Districts

Type of District

2000 2000 2005 2005

2008

Ambulance Districts 9 10 10 Fire Protection Districts 241 249 253 Health Service (Hospital) Districts 33 34 36 Metropolitan Districts 294 673 1062 Park and Recreation Districts 46 52 53 Sanitation Districts 79 79 74 Water Districts 75 76 77 Water and Sanitation Districts 123 129 126 Health Assurance Districts First authorized in 2001 Mental Health Care Service Districts First authorized in 2007 Forest Improvements Districts First authorized in 2007

 A metro district is a type of special district

that provides at least two different types of

• services. So, instead of forming a district for

each separate function, a metropolitan district is formed which can provide all the necessary services

 There have been over 100 new metropolitan

districts formed in each of the past three years.

 In the years between 2000 and 2004, the

number of metro districts increased from 294 to 653 during the same time period

 This growth mirrors Colorado's population

growth and increased home building through 2007

Source: http://www.sdaco.org/sites/default/files/attachments/ Guide_for_Citizens_da.pdf_5-29-09.pdf

 A metropolitan district provides needed infrastructure and

service to a specific area, with the cost being born by the property owners and residents of the area, rather than spread over the entire area of the general purpose government (city or county), as would be required if the city or county provides the infrastructure or service in the area

 Services can be provided to growing areas without

impacting the budget or reserves of the city or county

 Often there may be no other viable alternative for

providing and operating the necessary public facilities

 A special district provides a way of financing the

infrastructure up front, with the costs being repaid as development occurs and property values increase

 The district is able to finance infrastructure and public

facilities through the use of tax-exempt municipal bonds

Source: http://www.sdaco.org/sites/default/files/attachments/ Guide_for_Citizens_da.pdf_5-29-09.pdf

 Population is growing so dramatically in many areas

• f Colorado that city and county resources are being

stretched, and cities and counties are working with special districts as a means of installing the infrastructure to support the growth

 Constraints of TABOR and the desire for high quality

development require governments to consider multiple financing mechanisms to support development

 Metro districts are flexible and can be created in

numerous configurations to serve public infrastructure needs

 As a means of financing, metro districts have

unique advantages

 The cost of borrowing is lower with tax-

exempt bonds

 The payment for the cost of infrastructure is

stretched out over 20-40 years rather than front-loaded in home costs

 New development pays

s its own wn wa way

 Special districts have not created unusually

high or disproportionate tax burdens in Colorado for property owners

 Colorado ranks favorably with other states in

comparisons of property tax burdens

 http://www.taxfoundation.org/taxdata/show

/25429.html

Title 32, Article 1, Section 2

 The statutory process for special districts is

set forth in Title 32, Article 1, Section 2

• That section describes the content required in

service plans

 There is no statutory requirement for

approved zoning, comprehensive plans, plats

• r filing in order to propose a district

 There is no prohibition against forming

multiple districts and there is no statutory authority required to form multiple districts

Why Propose the RE Districts Now?

 Public and Utility Crossings of RFTA ROW

governed by PUC

• Two public access crossings, including a grade

separated crossing, and various utility crossing are necessary to provide for development. The PUC requires crossing to be under the control of government entities

 The school district

• The school district is interested in land within the
• Development. No land is possible without the public

access approved by the PUC as described above

 Amendment 60 and Amendment 61

• These districts, if formed this year, can escape the worst

consequences of these Amendments

Oversight, mill levy caps and the market

 Oversight

• The County retains the power to oversee the districts

 Mill Levy Caps

• Since 1992, the use of mill levy caps has ended the

perceived financial risk of special districts.

• In '91-'92 there were approximately 900 Title 32

districts in Colorado, 36 filed for bankruptcy protection = 4%, all did workouts. No bankruptcies have been filed since 1993

 The Market

• The market doesn’t accept the issuance of debt without

sufficient assurance of the feasibility of repayment

Title 32, Article 1, Section 203

 There is sufficient existing and projecte

ted need for organized service in the area to be served by the proposed special district

• The County Comprehensive Plan that is currently under

consideration anticipates high density residential development and a commercial node zoning for the

• area. The Community Profile prepared, in part by BBC

Research and RRC Associates projected population to brow from 57,000 in 2009 to nearly 85,000 in 2025. At 2.5 persons per household, that equates to approximately 830 homes a year needed to house the increased population. At a maximum potential, this Development would only meet demand for 10% of the housing over that period

 The existing service in the area to be served by

the proposed special district is inadequate for present and projecte ted needs

• No other district is financially capable of serving the

Development

 The proposed special district is capable of

providing economical and sufficient service to the area within its proposed boundaries

• The Service Plans provide for mill levy caps to protect

homeowners while providing sufficient tax revenues to

• perate water and sewer service, street cleaning and

snow removal and a community recreation and use facility

 The area to be included in the proposed

special district has, or wi will have ve, the financial ability to discharge the proposed indebtedness on a reasonable basis

• The mill levy protections in the service plans are

consistent with service plans on a statewide basis

 These findings are not required in order to

approve a service plan

• Short term, the Districts are needed to negotiate

with the PUC on the RFTA crossing

• Short-term, the Districts are needed to assure the

school district that suitable property will be available to them

• Short term. the Districts need to avert the

catastrophic financial problems of Amendment 60 and Amendment 61

• Long-term, the District are needed to provide

public infrastructure and operation and maintenance of public infrastructure, including maintenance of public crossing across the RFTA corridor as required by the PUC

• Long-term, Districts provide better financial

security and stability than other entities