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Home My WebLink About20053033.tiff DACONO ESTATES METROPOLITAN DISTRICT SERVICE PLAN _ CITY OF DACONO,COLORADO FINAL AUGUST 22, 2005 2005-3033 (c_, is TABLE OF CONTENTS I. Introduction 1 II. Purpose of the Proposed District 4 III. Boundaries, Population&Valuation 5 IV. Description of Proposed Facilities 7 a. Type of Improvements 7 b. Description of Existing Conditions 10 c. Anticipated Development 10 d. Public Improvement Schedule 11 e. City Construction Standards 11 f. Limitation on Eminent Domain 11 g. Dedication of Improvements to the City 12 h. Ownership and Maintenance of Facilities by the District 13 i. Acquisition of Land for Public Improvements 14 j. Services to be Provided by other Governmental Entities 14 k. Integration 15 V. Financial Plan 15 a. General 16 b. Debt Issuance 17 c. Other Financial Restrictions, Limitations and Requirements 20 d. Limited Mill Levy 21 e. Investor Suitability 22 f. Refunding Bonds 23 g. Developer Bonds 23 h. Construction Financing Notes Issued to Developer 25 i. Identification of District Revenue 26 j. Security for Debt 26 k. Services of District 26 1. Quinquennial Review 2.7 m. Letters 27 VI. Landowners' Obligations as to Public Improvements 28 VII. Annual Report 28 VIII. Dissolution 30 IX. Consolidation 31 X. Elections 31 XI. Indemnities 33 XII. Disclosure and Disclaimer;No Third-Party Rights 33 XIII. Intergovernmental Agreements 34 XIV. Conservation Trust Fund 35 XV. Modification of Service Plan 35 XVI. Failure to Comply with Service Plan 37 XVII. Resolution of Approval 37 XVIII. Severability 37 XIX. Certification 39 -' i TABLE OF EXHIBITS Exhibit A Legal Description Exhibit B Boundary Map Exhibit C Vicinity Map Exhibit D Property Owner's Consent Exhibit E Engineering Estimates and Engineer's Certificate of Costs Exhibit F Location of Public Improvements Exhibit G Financing Plan; Forecasted Cash Surplus Balances and Cash Receipts and Disbursements; Market Projection Consultant's Analysis; Developer's Letter in Support of Market Projections Exhibit H Underwriter's Letters Exhibit I Legal Counsel Letter Exhibit J Part I - Developer Indemnity Letter Part II - District Indemnity Letter Exhibit K Form of Disclosure Notice Exhibit L Form of City Disclaimer Statement Exhibit M Form of Intergovernmental Agreement between District and City Exhibit N Resolution of City of Dacono Approving Service Plan — ii DACONO ESTATES METROPOLITAN DISTRICT SERVICE PLAN I. INTRODUCTION The District shall be named the Dacono Estates Metropolitan District (the "District"). The purpose of the District is to finance certain streets, street lighting, traffic and safety controls, water, landscaping, storm sewers and flood and surface drainage, and park and recreation improvements for a proposed development to be known as Dacono Estates. The developer of Dacono Estates and the petitioner for the formation of the District is Dacono Estates, LLC, a Delaware limited liability company (the "Developer"). The District is intended to provide for the financing of public improvements for Dacono Estates, but is not intended to be a District with perpetual existence. The District will consist of approximately two hundred seventeen and one hundred thirty-three one-thousandths (217.133) acres and no changes in the District's boundaries are anticipated or authorized. The District shall be dissolved when its financial obligations are paid or provided for or when the City of Dacono, Colorado (the "City") requests dissolution, provided then-applicable statutory requirements are met, all as further described in this Service Plan(together with all Exhibits hereto,the "Service Plan"). Except as expressly provided in this Service Plan, all public improvements and facilities financed, constructed, installed, or acquired by the District shall be dedicated and conveyed to the City or its designee, and will be operated and maintained by the City or its designee upon City acceptance and completion of the District's warranty obligations. The City may require that any specific landscaping improvements dedicated and conveyed to the City be maintained by a homeowners' association formed for Dacono Estates, for the use and benefit of residents, taxpayers, and property owners. The District shall not provide fire protection or emergency - 1 - services, which fire protection and emergency services shall be provided by the Mountain View Fire Protection District. The District may exercise those powers of a metropolitan district set forth in §§32-1-1001 and -1004, C.R.S. only to implement the provisions of this Service Plan, and only to the extent authorized by and in a manner consistent with this Service Plan. The District is generally located north of Summit Boulevard (Weld County Road 8), between York Street (Weld County Road 11) and Colorado Boulevard (Weld County Road 13). The proposed boundaries of the District are limited to those boundaries described in Exhibit A, attached hereto. This Service Plan has been prepared by the following Developer and participating consultants (the "Organizers"): Developer District Counsel Dacono Estates, LLC Miller, Gruber& Rosenbluth, LLC a Delaware limited liability company Dianne D. Miller, Esq. Stephen J. Foley Jennifer L. Gruber, Esq. Robert C. Swenson 700 17'' Street, Suite 2200 _ 6321 South Newport Court Denver, Colorado 80202 Englewood, Colorado 80111 (303) 285-5320 (303) 689-0242 (303) 285-5330--facsimile (303) 689-0240 facsimile dmiller(u mgrlawfrm.com sfoley43(a,aol.com jgruberna,mgrlawfirm.com fsland@mindspring.com Investment Banker Engineer _ Kirkpatrick, Pettis, Smith, Polian Inc. MB Consulting, Inc. Thomas Bishop A Colorado corporation 1600 Broadway Street, Suite 1100 Mark F. Bishop, P.E. _ Denver, Colorado 80202 333 West Colfax Avenue, Suite 500 (303) 764-5737 Denver, Colorado 80204 (303) 764-5770--facsimile (303) 825-7475 tbishopna kpsp.com (303) 825-7341—facsimile mbishopnn,mbcdenver.com — -2 - Bond Counsel Accountant Sherman& Howard, LLC Clifton Gunderson, LLP Blake T. Jordan, Esq. Dawn Jones 633 17th Street, Suite 3000 6399 South Fiddler's Green Circle, Suite 100 Denver, Colorado 80202 Greenwood Village, Colorado 80111 (303)297-2900 (303) 779-5710 (303)298-0940—facsimile (303) 779-0348—facsimile hiordan@sah.com dawnjones@cliftoncpa.com Market Projection Consultant DRM Real Estate Advisors, L.L.C. Derek R. Maunsell, MAI — Post Office Box 270898 Fort Collins, Colorado 80527 (970)267-2900 (970)267-2900—facsimile derekmaunsell@drmrealestate.com Pursuant to the requirements of the Special District Control Act, §§ 32-1-201, et seq., C.R.S., this Service Plan consists of a financial analysis and an engineering plan showing how the proposed facilities and services of the District will be provided and financed. As required by § 32-1-202(2), C.R.S., the following items are included in this Service Plan: a. A description of the proposed services; b. A financial plan showing how the proposed services are to be financed, including all elements required by § 32-1-202(2)(b), C.R.S.; c. A preliminary engineering or architectural survey showing how the proposed services are to be provided; d. A map of the proposed District's boundaries and an estimate of the population and valuation for assessment of the proposed District; - 3 - e. A general description of the facilities to be constructed and the standards for construction, including a statement of how the facility and service standards of the proposed District are compatible with facility and service standards of the City and special districts that are interested parties pursuant to § 32-1-204(1), C.R.S.; f. A general description of the estimated cost of acquiring land, engineering services, legal services, administrative services, initial proposed indebtedness, estimated proposed maximum interest rates and discounts, and other major expenses related to the organization and initial operation of the District; and g. A description of any arrangement or proposed agreement with any political subdivision for the performance of any services between the proposed District and such other political subdivision and, if applicable, a form of the agreement. II. PURPOSE OF THE PROPOSED DISTRICT The District will finance the construction of public improvements for Dacono Estates, which improvements shall be dedicated and conveyed to the City or its designee as provided in this Service Plan, or as otherwise required by the City. A certain number of limited improvements, upon the direction and consent of the City, will be dedicated and conveyed to other servicing districts, or, upon prior written approval of the City, retained by the District and operated and maintained by the District or a successor non-profit homeowners' association, for the use and benefit of residents, taxpayers, and property owners. The public improvements shall be financed through the issuance of indebtedness as set forth in Article V, "Financial Plan". Except as specified in or pursuant to this Service Plan, the District shall not construct or own any improvements, shall not provide for any maintenance, repair or operation of any improvements, -4 - and shall not perform any services without the consent of the City as evidenced by a resolution of approval of the City of Dacono City Council. In addition, the District will not contract with any other governmental entity to receive any services that are or may become available from the City, or to provide any services to or within any other governmental entity, without the prior written consent of the City. The District shall not provide any services or facilities within any area of the District that overlaps with the service area of another special district without first obtaining the written consent of each and every special district whose service area is so overlapped. The District shall dissolve when its financial obligations are paid or provided for, or otherwise upon request of the City, subject to then-applicable statutory requirements, all as further provided in Article VIII. III. BOUNDARIES,POPULATION & VALUATION The District consists of approximately two hundred seventeen and one hundred thirty- three one-thousandths (217.133) acres located entirely within the boundaries of the City, as more particularly set forth in the legal description attached hereto as Exhibit A, and as shown on the boundary map attached hereto as Exhibit B and the vicinity map attached hereto as Exhibit C. The petitioner, Dacono Estates, LLC, a Colorado limited liability company, also the Developer of the District property, is the sole owner of all property to be included in the proposed District. Dacono Estates, LLC has consented to the formation of the District, which consent is attached hereto as Exhibit D and incorporated herein by this reference. Dacono Estates is being developed for the anticipated construction of six hundred eighty- five (685) single-family homes and two hundred forty (240) townhomes. The current population - 5 - of the District is zero. The estimated population of the District at full build-out is two thousand six hundred ten (2,610) people, subject to development approval by the City. It is acknowledged that City development standards and requirements may affect the foregoing numbers of anticipated homes and population. The estimated assessed value at full build-out is Seventeen — Million Five Hundred Thirty-One Thousand Four Hundred Ninety-Two Dollars ($17,531,492.00). The property is currently zoned for residential uses. The current assessed valuation of the District for purposes of this Service Plan is Zero Dollars ($0.00). The total overlapping mill levy imposed upon the property within the proposed District for tax collection year 2004 was seventy-eight and three hundred forty-seven one-thousandths-of-one (78.347) mills. — The District shall be required to obtain written approval from the City of a Service Plan modification prior to any inclusion or exclusion of property to or from the District, or any other change in its boundaries. Any such approval may be granted or denied by resolution of the City Council, in its discretion. Any inclusion may be on the condition that all property originally in the District remain in the District, and on such other conditions as the City may impose. Any exclusion may be on the condition that there is no detriment to the remaining residents and taxpayers within the District, or to the District's bondholders, and on such other conditions as the City may impose. No changes in the boundaries of the District shall be made unless the prior written approval of the City Council has been obtained as part of a Service Plan modification, as provided herein. - 6 - IV. DESCRIPTION OF PROPOSED FACILITIES a. Type of Improvements. The District will finance, construct, acquire and install public improvements consisting of streets, street lighting, traffic and safety controls, water, landscaping, storm sewers and flood and — surface drainage, and park and recreation improvements and facilities (as the foregoing terms are used in § 32-1-1004(2), C.R.S. and the sections referenced therein) within the boundaries of the District, and shall operate and maintain specific public improvements as directed or approved by — the City, all as limited by this Service Plan. The Central Weld County Water District (the "Water District"), by contract, provides potable water to the City for delivery to City water users. The Water District owns and maintains treatment, distribution, and storage facilities (including pump station(s), elevated tank(s), and master meters and appurtenances) and delivers water to the City water system at certain master meter locations. The property within the District will receive water service from — the City through the City's arrangements with the Water District. The District, together with the — Developer, may provide financing for Water District water system improvements and facilities that may be necessary for service to areas within the District, which facilities and improvements are to be designed, constructed, installed, or acquired by the Water District. The District will also provide for the design, construction, acquisition, and installation of City water system improvements and facilities located within the boundaries of the District. In addition, a separate raw water irrigation system will be installed by the District if it is determined by the Developer — and the City to be feasible and if it is approved by the City. The District will provide financing for the City water system improvements, together with the Developer, as more fully set forth below. All Water District system improvements shall be owned by the Water District. All City - 7 - water systems improvements shall be dedicated to, conveyed to, and owned by the City upon acceptance and completion of the District's warranty obligations. A separate raw water irrigation system, if authorized by the City, shall, at the City's option, either be dedicated and conveyed to the City or its designee, or owned by the District and maintained by the District or a homeowners' association. All water rights for water service to the property and for any raw water irrigation system shall be owned by the City. The District will not purchase, own, manage, adjudicate, or develop any water rights or water resources; provided, however, that, upon the prior written consent of the City, which may be granted or denied in the City's sole discretion, the District may manage, adjudicate, or develop those water rights proposed for use in any raw water irrigation system. The Developer, at its expense, is responsible for achieving any required fire flows. The District shall not design, construct, acquire, or install water improvements or facilities through contracts by the District, including off-site improvements, except upon approval of the City and Water District with respect to the Water District system, and the City with respect to the City water system. Any intergovernmental agreement between the District and the Water District shall be submitted to the City for review and shall be approved by the City prior to execution by the District. The District shall not construct any facilities outside the boundaries of the District, except as necessary to connect service for the District to the facilities of other entities involved in providing services to the District as described in this Service Plan, or as approved or directed by the City, or, with the City's consent, as approved or directed by other governmental entities having jurisdiction. However, the District shall not construct any water facilities, except any approved separate raw water irrigation system and those facilities approved by the City for the - 8 - City water system, without the prior written consent of the Water District, which consent may be withheld for any reason or for no reason. The Organizers of the District have prepared a preliminary engineering report based on the City's construction standards. The table attached hereto as Exhibit E lists all facilities that the District, subject to development approval of the City, will be authorized to finance, acquire, design, construct, and install, including the costs in current dollars of each, together with an explanation of the methods, basis, and/or assumptions used. A letter concerning the reasonableness of the cost estimates and of the methods, bases, and assumptions used is included in Exhibit E. The combined estimated cost of the improvements is Eleven Million Three Hundred Fifty-Six Thousand One Hundred Eighty-Two Dollars ($11,356,182.00), which exceeds the estimated debt capacity of the District. Funding for improvements not funded by the District shall remain the responsibility of the Developer of the property, which amount is presently estimated to be Four Million One Thousand Eight Hundred Fifty-Four Dollars ($4,001,854.00) (the difference between the total estimated cost of the improvements and the total estimated net proceeds projected to be received from the District's general obligation bonds). The City is not responsible for assuming any of the costs of the improvements funded by the District or necessary for service to Dacono Estates. A map showing the location of the public improvements to be financed by the District is attached hereto as Exhibit F. The District shall be authorized to finance, acquire, design, construct, and install those types of public improvements and facilities authorized under this Article IV and generally shown on Exhibit F, subject to development approval by the City. Phasing of construction shall be in accordance with a phasing plan approved by the City, which plan shall comply with City development and construction standards and be designed to meet the - 9 - needs of residents and taxpayers within the boundaries of the District. The engineering exhibits provided herein are preliminary. Upon the prior written approval of the City, the District may, without amending this Service Plan, relocate or redesign improvements or facilities to be provided by the District as necessary to comply with City design requirements or to better accommodate the pace of growth and resource availability within the District. All public improvement locations, designs, plans, and specifications are subject to City approval. City consideration of any proposed changes in locations, designs, plans, and specifications for public improvements may be undertaken through the development review process for Dacono Estates. b. Description of Existing Conditions. The area is predominantly undeveloped. c. Anticipated Development. The Developer anticipates total build-out to occur by 2015, with the completion of fifty- seven (57) single-family homes in 2007, one hundred (100) single-family homes in 2008, one hundred (100) single-family homes in 2009, one hundred (100) single-family homes in 2010, one hundred (100) single-family homes in 2011, one hundred (100) single-family homes in 2012, one hundred (100) single-family homes in 2013, twenty-eight (28) single-family homes and one hundred twenty (120) townhomes in 2014 and one hundred twenty (120) townhomes in 2015, subject to final design and development approval by the City. It is acknowledged by the Developer that City approvals are required that have not yet been obtained for Dacono Estates, and that City development standards and requirements may affect the foregoing numbers of anticipated homes and the foregoing anticipated build-out schedule. _ - 10 - d. Public Improvement Schedule. Construction of the public improvements will commence as soon as possible following approval of the Service Plan. The public improvements will be phased to meet the development schedule, and shall be installed in compliance with any phasing plan approved by the City for Dacono Estates. e. City Construction Standards. All proposed facilities and improvements shall be designed and constructed in accordance with the standards and specifications established by the City and in effect from time to time, and with applicable standards and specifications of the federal government and the State of Colorado. All proposed facilities and improvements shall be compatible with those of the City and other governmental entities having jurisdiction, including, but not limited to, the Water District. The District and its engineer have designed and shall design the facilities and improvements to meet such standards, specifications and compatibility requirements. The District will obtain approval of civil engineering plans and permits for construction and installation of facilities and improvements from the City prior to construction or installation. The District shall be subject to all applicable provisions of the Dacono Municipal Code and to all City rules, regulations, and policies with respect to the conduct of its work on the improvements, as in effect from time to time. f. Limitation on Eminent Domain. The District shall not exercise any power of dominant eminent domain against the City and shall not exercise any power of eminent domain without the prior written consent of the City. No exercise of eminent domain by the District is contemplated or authorized in this - 11 - Service Plan, and any proposed use thereof shall be considered a material modification of this Service Plan subject to the City's prior written approval. g. Dedication of Improvements to the City. Except as specifically set forth in Article IV.h., below, the District shall dedicate and convey to the City or its designee, or cause to be dedicated and conveyed to the City or its designee, all public improvements and facilities, including, but not limited to, all streets, street lighting, traffic and safety controls, water, landscaping, storm sewers and flood and surface drainage, and park and recreation improvements and facilities, as well as all rights-of-way, fee interests and easements necessary for access to and operation and maintenance of such improvements and facilities, to the extent such property interests have not already been acquired by the City through the land use approval process. The District shall not operate or maintain any public improvements, except as necessary to comply with its warranty obligations hereunder and except to the extent expressly permitted by Article IV.h., below. The District shall also dedicate and convey to the City or its designee any other facilities and improvements contemplated in this Service Plan, together with necessary rights-of-way, fee interests, and easements. All such improvements, facilities, easements, and rights-of-way shall be conveyed to the City or its designee immediately upon completion of construction, installation, and expiration of the two (2) year warranty period that commences after the City has issued Initial Acceptance as set forth below. All improvements, facilities, rights-of-way, fee interests, and easements shall be conveyed and dedicated to the City or its designee by instruments acceptable to the City, free and clear of all liens and encumbrances, except those acceptable to the City in its sole discretion. Failure to comply with the requirements of this Article IV.g. shall be deemed an unauthorized material modification of this Service Plan. - 12 - Once a public improvement to be dedicated to the City is constructed and installed,the City shall issue an "Initial Acceptance" letter stating the improvement has been constructed or installed in conformance with the City's standards, or shall issue a letter specifying the corrections necessary to bring the improvement into compliance with City standards for the issuance of such "Initial — Acceptance" letter. The District at its expense shall promptly undertake any necessary corrections. Upon issuance of the "Initial Acceptance" letter, the public improvements shall be warranted for two (2) calendar years from the date of such "Initial Acceptance", during which time the District shall maintain the improvements and correct all deficiencies therein as directed by the City. At the conclusion of such two (2)year period, the City shall issue a"Final Acceptance" letter if the public improvements conform to the City's specifications and standards, or shall issue a letter specifying the corrections necessary to bring the improvement into compliance with City standards for the issuance of such a "Final Acceptance" letter. The District at its expense shall promptly undertake any necessary corrections. A "Final Acceptance"meeting shall then be arranged, at which time the City will issue "Final Acceptance" for all public improvements to be accepted by it, and the District — will execute and deliver to the City all necessary instruments to dedicate and convey to the City the improvements and facilities, and all necessary rights-of-way, fee interests, and easements. h. Ownership and Maintenance of Public Improvements by the District. Except for facilities and improvements described in this Article IV.h., the District shall not be authorized to own or operate any improvements or facilities to be provided pursuant to this Service Plan, other than as necessary to permit the financing and construction thereof, except through approval by the City of an amendment to this Service Plan. The District shall have authority to operate and maintain the improvements described in this Article IV.h. - - 13 - Tract landscaping improvements will be retained by the District for operations and maintenance, except that upon request of the City, any such improvements and facilities shall promptly be dedicated and conveyed to, and thereafter owned, operated, and maintained by the City or its designee. If retained by the District, the District may contract with a non-profit homeowners' association for operation and maintenance of these improvements and facilities. Any contract with a homeowners' association must be approved by the City in advance, and the City may require assurances that a homeowners' association accepts the operation and -- maintenance obligations and has the financial ability to undertake such obligations. i. Acquisition of Land for Public Improvements. The District shall acquire, at no cost to the City, all lands or interests in land required by the City for construction of streets, street lighting, traffic and safety controls, water, landscaping, storm sewers and flood and surface drainage, and park and recreation improvements being constructed or installed by the District. Such land or interests in land may be acquired by the District by instruments of conveyance and/or plat dedication, in form and substance acceptable to the City. All land and interests in land shall be conveyed to the City or its designee at no cost to the City at such times and by such instruments of conveyance as the City may reasonably require, free and clear of all liens and encumbrances. Exceptions must be approved by the City in advance and in writing. Failure to comply with this provision shall be deemed a material modification of this Service Plan. j. Services to be Provided by other Governmental Entities. The District proposes to finance, construct, acquire, and install the public improvements necessary to serve the District's residents and taxpayers, but is not authorized to and shall not provide any ongoing water, sanitary sewer, park and recreation, or other services within the - 14 - District. The District shall receive sanitary sewer service from the St. Vrain Sanitation District -- and the Dacono Sanitation District. The District shall not provide any sanitary sewer services. The District shall obtain a letter from the Carbon Valley Park and Recreation District consenting to the overlapping boundaries for financing purposes only. The District shall not provide ongoing park and recreation services. The District shall obtain a resolution from the Water District consenting to the overlapping boundaries for financing purposes only. The District shall not provide ongoing water services to the District. The District is within and shall receive fire protection and emergency services from the Mountain View Fire Protection District, or any successor entity thereof. Nothing herein shall limit or discharge the District's responsibilities for operation, maintenance, and repair of public improvements prior to their acceptance by the City and conveyance to the City or its designee, or limit or discharge the District's warranty obligations. k. Integration. All facilities and improvements shall be constructed so as to be integrated with existing and planned facilities and improvements of the City and other entities providing service to Dacono Estates. The District shall obtain from such other serving entities approval of the proposed plans for the facilities and improvements. V. FINANCIAL PLAN This Article V describes the nature, basis,method of funding, debt and mill levy limitations, and other financial requirements and restrictions for the District's public improvements program and operations. Together with the Financing Plan attached hereto as Exhibit G and further described below, this Article V constitutes the financial plan for the District as required by § 32-1- _- - 15 - 202(2)(b), C.R.S. A detailed Financing Plan, consisting of the Accountant's Forecasted Cash Surplus Balances and Cash Receipts and Disbursements (including a Summary of Significant Forecast Assumptions), the Market Projection Consultant's Analysis, and the Developer's Letter in Support of the Market Projections is contained in Exhibit G, attached hereto and incorporated herein. The Financing Plan includes estimated operations and administration costs (including estimated costs of warranty maintenance), proposed indebtedness and estimated interest rates and discounts, and other major expenses related to the organization and operation of the District. The Financing Plan projects the issuance of the debt and the anticipated repayment based on the development assumptions (including the market projections and absorption forecasts set forth therein) for property within the boundaries of the District. The Financing Plan demonstrates that, at the projected level of development, and with the projected Developer support, the proposed District has the ability to finance the facilities identified herein and will be capable of discharging the proposed indebtedness on a reasonable basis. a. General. The provision of improvements and facilities by the proposed District will be primarily financed through the issuance of general obligation (limited tax) bonds (the "bonds"), secured by the ad valorem taxing authority of the District and other District revenues, as discussed below. For all purposes of this Service Plan,the terms"bonds," "general obligation bonds," "general obligation debt," "general obligation indebtedness" or any similar term shall mean limited tax general obligation bonds as further provided in V.d., below. The Financing Plan anticipates the issuance of _ three (3) series of bonds in 2007, 2010, and 2013. The combined total estimated cost of the improvements is Eleven Million Three Hundred Fifty-Six Thousand One Hundred Eighty-Two Dollars ($11,356,182.00). The District has the capacity to issue general obligation bonds in the - 16 - aggregate principal amount of approximately Eight Million Four Hundred Seventy-Five Thousand Dollars ($8,475,000.00), projected to yield net bond proceeds of approximately Seven Million Three Hundred Fifty-Four Thousand Three Hundred Twenty-Eight Dollars ($7,354,328.00) Accordingly, it is currently anticipated that the bond proceeds will be insufficient to allow for repayment of Four Million One Thousand Eight Hundred Fifty-Four Dollars ($4,001,854.00), which will be contributed by the Developer; however, if the fmancing capability of the District changes and will permit repayment in the future (due to higher than anticipated assessed values, lower interest rates, or other changed circumstances), the District may agree to repay the Developer for unreimbursed public infrastructure costs so long as the District has the capacity to make such payments without exceeding the debt limit or Mill Levy Limit provided in this Service Plan, and subject to all other requirements of Article V.h., below. Payments made to the Developer by the District are expected to be made principally from bond proceeds and shall not exceed the amount advanced by the Developer for capital costs of District public improvements. The Developer acknowledges and accepts the risk that, if all or a part of the general obligation bonds proposed to be issued by the District are not issued, because of changes in financial conditions or for any other reason, the Developer may not be paid or reimbursed for the cost of public improvements or other advances to the District. b. Debt Issuance. This Service Plan authorizes only the issuance of general obligation bonds, except as provided below with respect to notes issued to the Developer for construction financing. All financial obligations of the District are subject to the provisions as to the Limited Mill Levy and other limitations as set forth below. Other than ad valorem property taxes, specific ownership taxes, facility fees, amounts capitalized from bond proceeds, and investment income on the _ foregoing, no District revenues shall be pledged to any financial obligations of the District. The - 17 - District may be authorized to issue revenue bonds, certificates, debentures, or other evidences of indebtedness or to enter into lease-purchase transactions, only upon approval of an amendment to this Service Plan, and such an amendment shall be considered a material modification of the Service Plan. The District intends to issue three (3) series of general obligation bonds in the aggregate principal amount of approximately Eight Million Four Hundred Seventy-Five Thousand Dollars ($8,475,000.00). The aggregate principal amount of all general obligation bonds and all other forms of borrowing by the District, throughout the District's existence and regardless of subsequent payments and discharges, shall be limited to a total of Nine Million Three Hundred Twenty-Two Thousand Five Hundred Dollars ($9,322,500.00) ("debt limit"); except to the extent otherwise provided in Article VI. with respect to refunding bonds and in Article V.h. with respect to construction financing notes (i.e., notes or other financial obligations, if any, issued by the District to the Developer to evidence the District's obligation to repay the Developer's advances for construction costs). The first series of general obligation bonds will be issued in the approximate amount of Two Million Three Hundred Seventy-Five Thousand Dollars ($2,375,000.00) and are anticipated to be issued in 2007. The second series of general obligation bonds will be issued in the approximate amount of Three Million Dollars ($3,000,000.00) and are anticipated to be issued in 2010. The third series of general obligation bonds will be issued in the approximate amount of Three Million One Hundred Thousand Dollars ($3,100,000.00) and are anticipated to be issued in 2013. All net proceeds of the first, second, and third series of bonds issued by the District (after deduction of reasonable amounts for capitalized interest, capitalized reserves and issuance costs) will immediately be deposited into an escrow account held by the bond trustee. Bond - 18 - proceeds will be released from the escrow account into an unrestricted account on a pro rata basis as building permits are issued by the City, as further described below. The amount of bond proceeds released into the unrestricted account will be on a per unit basis (single-family and townhomes, combined) and will be proportionate with each series of bonds. For example, the first series of bonds represents approximately twenty-eight percent (28%) of the total amount of bonds to be issued by the District. Twenty-eight percent (28%) of the total units within the District is approximately two hundred fifty-nine (259) units. The net bond proceeds from the first series of bonds are anticipated to be One Million Nine Hundred Thirty-Four Thousand Six Hundred Ten Dollars ($1,934,610.00). Therefore, approximately Seven Thousand Four Hundred Seventy Dollars ($7,470.00) per unit will be transferred from the escrow account to the unrestricted account upon the issuance of each building permit; provided, however, that such transfers from the escrow account shall not be made unless all public improvements required to serve the dwelling units for which such building permits have been issued have been completed and initially accepted by the City in accordance with the City's subdivision requirements and the subdivision agreement. By depositing net bond proceeds into an escrow account and releasing portions of such proceeds only upon the conditions described above, the City, its taxpayers, and its residents can be assured that continued development will occur to pay the bonds and, to the extent development does not occur, the escrow account will be used to defease the bonds within the time required by any applicable federal requirements for tax-exempt bonds, but in no event later than three (3) years from the date of issue and, as a result, there will not be an excessive debt burden on the existing lots within the District. The District's Financial Advisor has indicated that issuance of building permits is a generally accepted lending criterion for special district debt, - 19 - and that, accordingly, the escrow release requirements will evidence sufficient development activity within the District to support repayment of the corresponding debt. The anticipated par amount of each series of bonds is an estimate only. The actual amount of the bonds issued will be subject to assessed valuations and market conditions as they exist at the time of issuance of each series of bonds, and will be issued only in compliance with the above-stated debt limit and all other requirements and restrictions of this Service Plan. c. Other Financial Restrictions,Limitations and Requirements. The District shall request voter authorization for a maximum of Nine Million Three Hundred Twenty-Two Thousand Five Hundred Dollars ($9,322,500.00) of general obligation debt (together with construction financing notes) to account for unforeseen contingencies, increases in construction costs due to inflation and all costs of issuance, including capitalized ` interest, reserve funds, discounts, legal fees, and other incidental costs of issuance; however, the debt limit imposed by this Service Plan shall control unless modified with the City's approval pursuant to Article XV hereof. Any increase in the amount of general obligation debt (together with construction financing notes) actually issued in excess of the projected amounts shown in Exhibit G will be consistent with the District's debt capacity at the time of such issuance (based on higher than anticipated assessed values, lower interest rates or other changes from projected circumstances). The authorized maximum voted interest rate is eighteen percent (18%) per annum and the maximum underwriting discount is four percent (4%) of bond principal. The actual interest rates and discounts, within such maximum voted amounts, will be determined at the time the bonds are sold by the District and will reflect market conditions at the time of sale. The term of any bonds issued by the District shall not exceed thirty (30) years. -20 - Estimated interest rates used in the Financing Plan are based on information furnished by — the underwriters, Kirkpatrick, Pettis, Smith, Pollan Inc. In the event bonds are issued at an interest rate higher than the estimated rates used in the Financing Plan, the principal amount of bonds will be reduced so as to result in total debt service payments approximately equal to those projected in the Financing Plan, and so that debt service on the bonds can be paid from the revenue sources contemplated in this Service Plan. If actual increases in District assessed valuation are less than the projected increases for those factors as shown in the Financing Plan forecasts, it is expected that the District would compensate by increasing its mill levy (subject to the Limited Mill Levy) or by reducing the principal amount of the bonds issued. No bonds issued by the District shall provide for acceleration as a remedy upon default, unless the District has received the prior written administrative approval of the City, which approval may be granted only by the City Administrator or the City Council. All bonds of the District shall be structured utilizing a commercial bank with trust powers as trustee to hold the bond proceeds and debt service funds and to pursue remedies on behalf of the bondholders. Any bonds issued by the District pursuant to this Service Plan shall be in compliance with all applicable state and federal legal requirements, including without limitation § 32-1- 1101(6), C.R.S., and article 59 of title 11, C.R.S., and shall be approved by nationally recognized bond counsel. An opinion shall also be obtained from bond counsel or counsel to the District that the bonds comply with all requirements of this Service Plan. d. Limited Mill Levy. "Limited Mill Levy" shall mean an ad valorem mill levy (a mill being equal to 1/10 of 10) imposed upon all taxable property in the District each year in an amount sufficient to pay the - 21 - principal of, premium if any, and interest on the bonds as the same become due and payable, and to make up any deficiencies in any debt service reserve for the bonds, but, together with all other District mill levies (including, without limitation, all mill levies for administration, warranty maintenance and other operating expenses), such mill levy shall not exceed fifty (50.000) mills; provided, however, that if the ratio of actual valuation to assessed valuation for residential real property (presently seven and ninety-six one-hundredths percent (7.96%), as shown in Exhibit G) is changed pursuant to Article X, section 3(1)(b) of the Colorado Constitution and legislation implementing such constitutional provision, the fifty (50.000) mill levy limitation provided herein will be increased or decreased (as to all taxable property in the District) to reflect such changes so that, to the extent possible, the actual tax revenues generated by the mill levy, as adjusted, are neither diminished nor enhanced as a result of such changes ("Gallagher adjustment"). The Limited Mill Levy shall be an enforceable limit on all District mill levies. e. Investor Suitability. Except as provided below in this paragraph as to rated bonds and in Article V.g., below with respect to Developer Bonds, the District's bonds shall be issued not in a public offering and only to financial institutions or institutional investors within the meaning of § 32-1- 1101(6)(a)(IV), § 32-1-103(6.5) and § 11-59-103(8), C.R.S. The District shall provide for and shall utilize appropriate minimum denominations and mechanisms and procedures for transfers and exchanges of bonds that are reasonably designed to insure continuing compliance with such limitation of sales to institutional investors. If the District's bonds are rated in one of the four highest investment grade rating categories by one or more nationally recognized organizations that regularly rate such obligations, compliance with the institutional investor limitation set forth above shall not be required. - 22 - f. Refunding bonds. General obligation refunding bonds may be issued by the District to defease original issue bonds in compliance with applicable law, but any such refunding shall not extend the maturity of the bonds being refunded nor increase the total debt service thereon and shall meet the requirements of§ 32-1-1101(6)(a), C.R.S. Refunding bonds shall not be subject to the debt limit stated in Article V.b., above, provided that such refunding bonds demonstrate net present value debt service savings; but if such refunding bonds do not demonstrate net present value debt service savings, any increase in principal amount of the refunding bonds over the principal amount of bonds being refunded shall be subject to such debt limit. Any issuance of refunding bonds must comply with Article V.e., above, "Investor Suitability". Except to the extent expressly provided in this Article V.f., all limitations, restrictions and requirements of this Service Plan with respect to general obligation bonds of the District shall be applicable to refunding bonds, including, without limitation, Limited Mill Levy, debt limit, maximum interest rate, maximum discount, maximum term, prohibition on acceleration, bank trustee requirement and opinion requirements. g. Developer Bonds. In lieu of issuing bonds to third party investors,the Developer may choose to purchase all bonds of a series (the "Developer Bonds"). Except as provided below in this Article V.g., Developer Bonds shall not be sold, transferred, assigned, participated or used as security for any borrowing. Developer Bonds shall not be subject to the escrow requirements of Article V.b., above; however, Developer Bonds may be resold (or otherwise transferred, assigned, participated or used as security) only to the extent that the requirements for release from escrow (issuance of building permits and initial acceptance of public improvements) have been met with respect to - 23 - the principal amount of Developer Bonds to be sold, transferred, assigned, participated, or used as security. If and when Developer Bonds are resold by the Developer, such resale must comply with the institutional investor requirements of Article V.e., above, (unless the Developer Bonds have received an investment grade rating as described in the last sentence of Article V.e. above). The purchase of Developer Bonds by the Developer shall not be subject to any underwriting discount, and interest rates on Developer Bonds shall not exceed the estimated interest rates used in the Financing Plan. Except as otherwise specifically provided in this Article V.g., all limitations, restrictions, and requirements of this Service Plan with respect to general obligation bonds of the District shall be applicable to Developer Bonds, both when owned by the Developer and upon any permitted resale, including, without limitation, Limited Mill Levy, debt limit, maximum interest rate, maximum term, prohibition on acceleration, bank trustee requirement, and opinion requirements. For purposes of ownership of Developer Bonds, the Developer shall include all affiliates or entities under the majority control of the Developer ("controlled affiliates"), provided that the Developer and any such controlled affiliate must be an accredited investor, as that term is defined under sections 3(b) and (4)(2) of the federal "Securities Act of 1933" by regulation adopted thereunder by the Securities and Exchange Commission, at the time of acquisition of the Developer Bonds. To the extent that transfers or exchanges of Developer Bonds are permitted under this Article V.g., the District shall provide for and shall utilize appropriate minimum denominations and mechanisms and procedures for transfers and exchanges of Developer Bonds that are reasonably designed to insure continuing compliance with applicable requirements and restrictions as provided in or cross-referenced by this Article V.g. The Developer (including all controlled affiliates) assumes all risk of nonpayment or other - 24 - default on Developer Bonds, and shall comply with the above-stated limitations, restrictions, and requirements regarding Developer Bonds. h. Construction Financing Notes Issued to Developer. The District may issue construction financing notes to the Developer to evidence the District's obligation to reimburse the Developer's advances for construction costs; any Developer advances which are not so reimbursed shall be treated as Developer contributions as described in Article V.a., above. Such notes shall be subject to the following restrictions set forth above for general obligation bonds: Limited Mill Levy, debt limit, maximum term, prohibition on acceleration, and opinion as to Service Plan compliance; but such notes shall not be subject to the above-stated bank trustee requirement or bond counsel opinion requirements. The repayment of construction financing notes from proceeds of an equal or lesser principal amount of the District's bonds shall not be treated as an increase in the principal amount of District debt for purposes of the debt limit under this Service Plan. Such notes shall not be general obligations of the District, shall bear no interest, shall be issued only to the Developer (and, therefore, not subject to any underwriting discount), and shall not be sold, transferred, assigned, participated, or used as security for any borrowing. The Developer hereby represents it is an accredited investor, as that term is defined under §§ 3(b) and (4)(2) of the federal "Securities Act of 1933" by regulation adopted thereunder by the Securities and Exchange Commission, and the Developer agrees it will also be such an accredited investor if and when it acquires such notes. Such notes shall be paid from proceeds of the District's general obligation bonds when and if received by the District (subject,however, to the escrow requirements of V.b., above); otherwise the notes will be unsecured obligations of the District. To the extent that any of such notes are outstanding when the District's general obligation bonds are also outstanding, - 25 - payments on the notes may be made only if such payments do not adversely affect the District's ability to pay its general obligation bonds. The Developer solely assumes the risk of nonpayment or other default on such notes, including, without limitation, delay, inability, or failure of the District to sell or issue its general obligation bonds. i. Identification of District Revenue. The District will impose a mill levy on all taxable property in the District as the primary source of revenue for repayment of debt service and for operations and administration. The mill levy imposed by the District shall not exceed fifty (50.000) mills, except for Gallagher adjustments permitted under Article V.d., above. Although the mill levy imposed may vary depending on the phasing of facilities anticipated to be funded, it is estimated that a mill levy of approximately forty (40.000) mills will produce revenue sufficient to support debt service, operations, and warranty maintenance expenses throughout the repayment period. The District expects to impose facility fees upon property located within the District and may impose such facility fees without the consent of or notification to the City, provided that such facility fees are limited to a one-time imposition of One Thousand Two Hundred Dollars ($1,200.00) per single- - family dwelling unit and Eight Hundred Dollars ($800.00) for townhomes. The District shall not impose any other fees or user charges, and the imposition of any other fee or charge shall be considered an unauthorized material modification of this Service Plan. j. Security for Debt. The District will not pledge any City funds or assets for security for the indebtedness set forth in the Financing Plan of the District. k. Services of District. The District will require sufficient operating funds to plan and cause the public improvements to be constructed. The costs are expected to include: organizational costs; legal, - 26 - engineering, accounting, and debt issuance costs; compliance with warranty obligations; and compliance with state reporting and other administrative requirements. The first year's operating budget (for 2006) is estimated to be Forty Thousand Dollars ($40,000.00), increasing annually at a rate of two percent (2%) to accommodate for inflation. The District currently anticipates that, upon approval by the City, a non-profit homeowners' association will maintain some or all of the improvements the District may retain pursuant to Article IV.h., above, which may further reduce or eliminate the District's operations and maintenance obligations. Such improvements will be retained by the District for operations and maintenance, unless the City requests that such improvements be dedicated and conveyed to the City or its designee. 1. Quinquennial Review. Pursuant to § 32-1-1101.5, C.R.S., the District shall submit application for a quinquennial finding of reasonable diligence in every fifth (5a') calendar year after the calendar year in which the District's ballot issue to incur general obligation indebtedness is approved by its electorate. Upon such application, the City Council may accept such application or hold a public hearing thereon and take such actions as are permitted by law. The District shall be responsible for payment of the City's consultant and administrative costs associated with such review, and the City may require a deposit of the estimated costs thereof The City shall have all powers concerning the quinquennial review as provided by statutes in effect from time to time. m. Letters. Attached hereto as Exhibit H is an underwriter's letter stating its intention to underwrite the District's financial obligations as proposed in the Financing Plan. Attached hereto as Exhibit I is a letter from legal counsel for the District stating that the petition for organization of the District, this Service Plan, notice and hearing procedures in connection therewith, and - 27 - provisions thereof(including, without limitation, provisions as to the District's bonds, fees, and revenue sources)meet the requirements of Titles 11 and 32, C.R.S., and other applicable law. VI. LANDOWNERS' OBLIGATIONS AS TO PUBLIC IMPROVEMENTS The creation of the District shall not relieve the Developer, the landowner or any subdivider of property within the District, or any of their respective successors or assigns, of any obligation to construct public improvements for Dacono Estates, of the obligation to enter into a subdivision improvements agreement regarding such improvements, or of the obligation to provide to the City letters of credit as required by the City to ensure the completion of such public improvements, or of any other obligations to the City under City ordinances, rules, regulations, or policies, or under other agreements affecting the property within the District or the Dacono Estates development, or any other agreement between the City and the Developer (or any such landowner, subdivider or successors or assigns). VII. ANNUAL REPORT The District shall be responsible for submitting an annual report to the City within one hundred twenty (120) days from the conclusion of the District's fiscal year. Failure of the District to submit such report shall not constitute a material modification hereof, unless the District refuses to submit such report within thirty (30) days after a written request from the City _ to do so. The District's fiscal year shall end on December 31s` of each year. The content of the annual report shall include information as to the following matters that occurred during the year: a. Boundary changes made or proposed; b. Intergovernmental Agreements entered into or proposed; c. Changes or proposed changes in the District's policies; - 28 - d. Changes or proposed changes in the District's operations; e. Any changes in the financial status of the District, including any issuance of financial obligations or any change in revenue projections or operating costs; f. A summary of any litigation and notices of claim involving the District; g. Proposed plans for the year immediately following the year summarized in the annual report; h. Status of construction of public improvements; i. The current assessed valuation in the District; and j. A schedule of all fees, charges and assessments imposed in the report year and proposed to be imposed in the following year and the revenues raised or proposed to be raised therefrom. The foregoing list shall not be construed to excuse the requirement for prior written City approval of material modifications of this Service Plan or for any other required City approval. The annual report shall be signed by the President and attested by the Secretary of the District. Along with the annual report, and at any more frequent intervals as reasonably requested by the City, the District shall provide to the City a currently dated and written certificate, signed by the President and Secretary of the District, certifying the District is in full compliance with this Service Plan. If the District is not in full compliance with this Service Plan, the certificate shall include a detailed statement describing such noncompliance, and the District shall cooperate fully with the City in providing further information as to, and promptly remedying, any such noncompliance. The City reserves the right, pursuant to §§ 32-1-207(3)(c) and (d), C.R.S., to request reports from the District beyond the mandatory statutory five (5) year reporting report. In addition to the foregoing, the District shall cooperate with the City by providing prompt - 29 - responses to all reasonable requests by the City for information, and the District shall permit the City to inspect all public improvements, facilities, books, and records of the District. VIII. DISSOLUTION Promptly when all general obligation bonds to be issued by the District have been paid (or when provision for payment thereof has been made through establishment of an escrow as provided by § 32-1-702(3)(b), C.R.S.), the District will so notify the City and will cooperate fully with the City in taking all steps necessary under then applicable law to dissolve the District (including, without limitation: formulating a plan of dissolution; executing the District's consent to dissolve pursuant to § 32-1-704(3)(b), C.R.S.; making any necessary agreements as to continuation or transfer of warranty maintenance and other services, if any, which are then being provided by the District; submitting a petition for dissolution to the District Court; and conducting any required dissolution election). In addition, at any time after the District has issued all of its general obligation bonds (excluding refunding bonds) as contemplated by the financial plan, upon the City's request, the District will cooperate fully with the City to dissolve the District pursuant to a plan for dissolution stating there are outstanding financial obligations and providing that the District will continue in existence (with the City Council serving as the District Board if the City so elects) to the extent necessary to adequately provide for the payment of such financial obligations, as provided in §§ 32-1-702(3)(c) and 32-1-707(2)(c), C.R.S. To the extent any District financial obligations are owned by the Developer (or by the Developer's controlled affiliates as provided in Article V.g.), the Developer shall cooperate fully, and shall cause any such controlled affiliate to cooperate fully, with the City to dissolve the District. Also, on or after December 31, 2010, if - 30- the District has not issued any of its general obligation bonds, the City shall have the right to require the District to dissolve in accordance with applicable law, and the District will cooperate fully with the City to dissolve the District. To the maximum extent permitted by law, the above-stated agreements to cooperate in dissolution of the District shall be binding on the undersigned Developer (including the Developer's controlled affiliates) and shall also be binding on the Developer's successors in title to any and all land in the District (including the nominees for the initial Board of Directors set forth in Article X hereof and succeeding directors who own land within the District); and such agreements shall obligate all such persons to cooperate fully with the City as described above, including, without limitation, the signing of petitions, execution of consents, and voting in favor of dissolution in any required election. IX. CONSOLIDATION The District shall not file a request with the District Court to consolidate with another special district without the prior written approval of the City Council. X. ELECTIONS Following approval of this Service Plan by the City, and after acceptance of the organizational petition and issuance of orders from the District Court, elections on the questions of organizing the District and approving bonded indebtedness and various agreements described herein will be scheduled. All elections will be conducted as provided in the court orders, the Uniform Election Code of 1992 (as may from time to time be amended), and Article X §20 of the Colorado Constitution (the "TABOR Amendment"), and are currently planned for November - 31 - 1, 2005, but may be held on any legally permitted date. The election questions are expected to include whether to organize the District, election of initial directors, and TABOR Amendment ballot issues and questions. Thus, the initial ballot may deal with the following topics (in several questions, but not necessarily using the exact divisions shown here): a. Whether to organize the District, b. Membership and terms of the initial board members, c. Approval of new taxes, d. Approval of maximum operational mill levies, e. Approval of bond and other indebtedness limits, f. Approval of an initial property tax revenue limit, g. Approval of an initial total revenue limit, h. Approval of an initial fiscal year spending limit, and i. Approval of a four(4) year delay in voting on ballot issues. Ballot issues may be consolidated as approved in court orders. The petitioners intend to follow both the letter and the spirit of the Special District Act, the Uniform Election Code and the TABOR Amendment during organization of the District. Future elections shall comply with the TABOR Amendment, and may be held as determined by the elected Board of Directors of the District. The following persons, who are or will be owners of property within the District, are anticipated to be nominated for the initial board of directors of the District: Stephen J. Foley Robert C. Swenson 6321 South Newport Court 756 Spring Creek Road Englewood, Colorado 80111 Silverthome, Colorado 80498 - 32 - Cindy Foley Karen Zain Henry 6321 South Newport Court 420 Franklin Street — Englewood, Colorado 80111 Denver, Colorado 80218 Richard David Preston 2119 Arapahoe Street Golden, Colorado 80401 XI. INDEMNITIES — The fully executed Dacono Estates, LLC Indemnity Letter attached hereto as Part I of Exhibit J is submitted by the Developer to the City as part of this Service Plan. The form of the District Indemnity Letter attached hereto as Part II of Exhibit J shall be executed by the District and delivered to the City immediately upon formation of the District. The District shall not incur any financial obligations of any kind or otherwise perform any functions authorized under this Service Plan until the District Indemnity Letter has been duly executed by the District and delivered to the City. The execution of such Indemnity Letters are material considerations in the City's approval of this Service Plan, and the City has relied thereon in approving this Service Plan. XII. DISCLOSURE AND DISCLAIMER; NO THIRD-PARTY RIGHTS The District will also record a statement against the property within the District that includes notice of the existence of the District, the anticipated mill levy, and the maximum allowed mill levy. The form of the notice is attached hereto and incorporated herein as Exhibit K, subject to any changes required by the City in the future. In addition, attached hereto as Exhibit L is a form of the City's disclaimer statement. The District shall conspicuously include this disclaimer statement, or any modified or substitute statement hereafter furnished by the City, in all offering materials used in connection with any bonds or other financial obligations of the - 33 - District (or, if no offering materials are used, the District shall deliver the disclaimer statement to any prospective purchaser of such bonds or financial obligations). No changes shall be made to the disclosure or the disclaimer set forth in Exhibits K and L,respectively, except as directed by the City. Neither this Service Plan, the intergovernmental agreement to be entered into between the City and the District as described in Article XIII below, nor any other related agreements shall be construed to impose upon the City any duties to, or confer any rights against the City upon, any bondholders, investor, lenders, or other third parties. XIII. INTERGOVERNMENTAL AGREEMENTS The District shall enter into an intergovernmental agreement with the City in substantially the form set forth in Exhibit M. The District shall execute and deliver the intergovernmental agreement to the City immediately upon formation of the District. The District shall not incur any financial obligations of any kind or otherwise perform any functions authorized under this Service Plan until the intergovernmental agreement has been duly executed and delivered to the City. The execution of such agreement is a material consideration in the City's approval of this Service Plan, and the City has relied thereon in approving this Service Plan. No other intergovernmental agreements are proposed at this time. Any intergovernmental agreements proposed regarding the subject matter of this Service Plan shall be subject to review and approval by the City Council prior to their execution by the District. Failure of the District to obtain such approval shall constitute an unauthorized material modification of this Service Plan. - 34 - XIV. CONSERVATION TRUST FUND The District shall not apply for or claim any entitlement to funds from the Conservation Trust Fund, which is derived from lottery proceeds, or other funds available from or through governmental or nonprofit entities for which the City is eligible to apply. The District shall remit to the City any and all conservation trust funds it receives. XV. MODIFICATION OF SERVICE PLAN The District shall obtain the prior written approval of the City before making any material modifications to this Service Plan. Material modifications require a Service Plan amendment and include modifications of a basic or essential nature, including, but not limited to, the following: a. Any change in the stated purposes of the District or additions to the types of facilities, improvements, or programs provided by the District; b. Any issuance by the District of financial obligations not expressly authorized by this Service Plan, or under circumstances inconsistent with the District's financial ability to discharge such obligations as shown in the build out, assessed valuation and other forecasts contained in the Financing Plan, or any change in debt limit, change in revenue type, or change in maximum mill levy (except for any necessary Gallagher adjustment as provided in Article V.d., above); c. Any change in the types of improvements or estimated costs of improvements from that set forth in Exhibit E of this Service Plan; d. Failure by the District to enter into the intergovernmental agreement (the form of which is attached hereto as Exhibit M) immediately upon the District's formation as provided in - 35 - Article XIII of this Service Plan, or failure by the District to execute and deliver the District indemnity letter (the form of which is attached hereto as Exhibit J-II) immediately upon the District's formation as provided in Article XI of this Service Plan; e. Failure to comply with the requirements of this Service Plan concerning the dedication of improvements or the acquisition and conveyance of lands or interests in land; f. The failure of the District to develop any capital facility proposed in its Service Plan when necessary to service approved development within the District; g. Any proposed use of the powers set forth in §§ 32-1-1101(1)(f) and —11010.5), C.R.S., respecting division of the District; h. The occurrence of any event or condition defined under the Service Plan or intergovernmental agreement as necessitating a service plan amendment; i. The default by the District under any intergovernmental agreement; j. Any of the events or conditions enumerated in § 32-1-207(2), C.R.S., of the Special District Act; or k. Any action or proposed action by the District that would interfere with or delay the planned dissolution of the District as provided in Article VIII hereof. (The examples above are only examples and are not an exclusive list of all actions that may be identified as a material modification.) The District will pay all reasonable expenses of the City, its attorneys and consultants, as well as the City's reasonable processing fees, in connection with any request by the District for modification of this Service Plan or administrative approval by the City of any request hereunder. The City may require a deposit of such estimated costs. - 36 - XVI. FAILURE TO COMPLY WITH SERVICE PLAN In the event it is determined the District has undertaken any act or omission that violates this Service Plan or constitutes a material departure from the Service Plan(including,without limitation, any material modification of this Service Plan as described in Article XV that is not duly authorized by the City), the City may utilize the remedies set forth in the Colorado statutes to enjoin the actions of the District; may withhold issuance of any permit, authorization, acceptance, or other administrative approval for Dacono Estates; or pursue any other remedy available at law or in equity, including affirmative injunctive relief, to require the District to act in accordance with the provisions of this Service Plan. The District shall pay any and all costs, including attorneys' fees, incurred by the City in enforcing any provision of the Service Plan. To the extent permitted by law, the District hereby waives the provisions of§ 32-1-207(3)(b), C.R.S., and agrees it will not rely on such provisions as a bar to the enforcement by the City of any provisions of this Service Plan. XVII. RESOLUTION OF APPROVAL The Developer and other proponents of the proposed District agree to and shall incorporate the City Council's Resolution of Approval, including any conditions on such approval, into the Service Plan presented to the Weld County District Court. Such resolution shall be attached as Exhibit N. XVIII.SEVERABILITY If any portion of this Service Plan is held invalid or unenforceable for any reason by a court of competent jurisdiction, such portion shall be deemed severable and its invalidity or its unenforceability shall not cause the entire Service Plan to be terminated. Further, with respect to - 37 - any portion held invalid or unenforceable, the District and City agree to pursue a Service Plan amendment or take such other actions as may be necessary to achieve to the greatest degree possible the intent of the affected portion. - 38 - MX. CERTIFICATION _ This Service Plan is submitted to the City by the undersigned Developer, which is the District petitioner, and with the consent of all property owners of all property within the boundaries of the proposed District. The undersigned will cause written notice of the City's hearing on the proposed Service Plan to be duly given to all "interested parties" within the meaning of§ 32-1-204, C.R.S., and will or has caused all other required filings to be made and all other applicable procedural requirements to be met. The information contained in this Service Plan is true and correct as of this date. DACONO ESTATES, LLC, a Delaware limited liability company By: FS Dacono Estates, LLC, Manager, a Colorado limited liability company By: Stephen . Foley, IVfanage.-�� August 22, 2005 EXHIBIT A Legal Description ma /igi! Land Consultants 480 Yuma Street ■ Denver, Colorado 80204 Oft (303) 436-9233 • Fax: (303) 436-9235 Date 09-01-05 Job No. 05019 LEGAL DESCRIPTION PARCEL 1 A PARCEL OF LAND LOCATED IN THE SOUTH HALF OF SECTION 13, TOWNSHIP 1 NORTH, RANGE 68 WEST OF THE SIXTH PRINCIPAL MERIDIAN, COUNTY OF WELD, STATE OF COLORADO, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE EAST QUARTER CORNER OF SAID SECTION 13, CONSIDERING THE EAST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13 AS BEARING S00°13' 57"W AND WITH ALL BEARINGS CONTAINED HEREIN RELATIVE THERETO; THENCE ALONG THE NORTH LINE -- OF SAID SOUTHEAST QUARTER N89°36' 01"W, 30 .00 FEET TO THE POINT OF BEGINNING, BEING A POINT ON THE WEST RIGHT-OF-WAY LINE OF WELD COUNTY ROAD NO. 13; THENCE DEPARTING SAID NORTH LINE AND ALONG SAID WEST RIGHT-OF-WAY LINE, BEING 30 . 00 FEET WESTERLY FROM AND PARALLEL WITH THE EAST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13, S00°13' 57"W, 1745 .77 FEET; THENCE N89°46' 03"W, 280 . 00 FEET; THENCE S00°13' 57"W, 596 . 67 FEET; THENCE N89°00' 33"W, 596 . 67 FEET; THENCE S00°59' 27"W, 280 .00 FEET TO A POINT ON THE NORTH RIGHT-OF-WAY LINE OF WELD COUNTY ROAD NO. 8; THENCE ALONG SAID NORTH RIGHT-OF-WAY LINE, BEING 30. 00 FEET NORTHERLY FROM AND PARALLEL WITH THE SOUTH LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13, N89°00' 33"W, 1703 . 54 FEET TO A POINT ON THE WEST LINE OF THE SOUTH HALF OF THE SOUTHEAST QUARTER OF SAID SECTION 13; THENCE ALONG SAID WEST LINE NOO°00' 57"E, 1284 . 84 FEET TO THE SOUTHEAST CORNER OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SAID SECTION 13 ; THENCE ALONG THE SOUTH LINE OF SAID NORTH HALF N89°17' 57"W, 285 .96 FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF THE ST. VRAIN BRANCH OF THE UNION PACIFIC RAILROAD AS DESCRIBED IN BOOK 212, PAGE 279, BOOK 252, PAGE 10, BOOK 260, PAGE 439 AND BOOK 305, PAGE 213, SAID POINT HEREINAFTER REFERRED TO AS POINT "A"; THENCE ALONG SAID EAST RIGHT-OF-WAY LINE N12°23'22"E, 1342 .46 FEET TO A POINT ON THE NORTH LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13, FROM WHICH POINT THE CENTER OF SAID SECTION BEARS N89°36' 01"W, A DISTANCE OF 1.66 FEET; THENCE ALONG SAID NORTH LINE S89°36' 01"E, 2591. 82 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED PARCEL 1 CONTAINS 6, 536, 833 SQUARE FEET OR 150 .065 ACRES MORE OR LESS. AND ALSO; SHEET 1 OF 4 MR %//gil Land Consultants 480 Yuma Street • Denver, Colorado 80204 Oft (303) 436-9233 • Fax: (303) 436-9235 Date 09-01-05 Job No. 05019 PARCEL 2 BEGINNING AT THE AFOREMENTIONED POINT "A" ; THENCE CONTINUING ALONG SAID SOUTH LINE N89°17' 57"W, 147 . 91 FEET TO THE POINT OF BEGINNING, SAID POINT OF BEGINNING BEING A POINT ON THE WESTERLY RIGHT-OF-WAY LINE OF THE UNION PACIFIC RAILROAD AS DESCRIBED IN - BOOK 212, PAGE 279, BOOK 252, PAGE 10, BOOK 260, PAGE 439 AND BOOK 305, PAGE 213; THENCE DEPARTING SAID WESTERLY RIGHT-OF-WAY LINE AND CONTINUING ALONG SAID SOUTH LINE N89°17' 57"W, 2154.23 - FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF WELD COUNTY ROAD NO. 11; THENCE DEPARTING SAID SOUTH LINE AND ALONG SAID EAST RIGHT-OF-WAY LINE, BEING 30 .00 FEET EASTERLY FROM AND PARALLEL WITH THE WEST LINE OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SAID SECTION 13, NOO°12'27"W, 1301.15 FEET TO A POINT ON THE NORTH LINE OF THE SOUTHWEST QUARTER OF SAID SECTION 13; THENCE ALONG SAID NORTH LINE S89°36' 01"E, 2316 .65 FEET TO THE WEST RIGHT-OF-WAY LINE OF SAID UNION PACIFIC RAILROAD; THENCE ALONG SAID WEST RIGHT-OF-WAY LINE 806°51' 45"W, 1320.79 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED PARCEL 2 CONTAINS 2, 921,490 SQUARE FEET OR 67 . 068 ACRES MORE OR LESS. ERO O I' (i'. VIGIL, S;.NO. 26606 ill 26606 :El - _ ofaio•t *f 1 a, :S@z �/r, � ••.e..d3 fc SHEET 2 OF 4 EXHIBIT B Boundary Map Vigil Land Consultants 1-80 Yuma Street ■ Denver, Colorado 80204 Off: (303) 436-9233 • Fax: (303) 436-9235 M- ote 09-01-05 Job No. 05019 ATTACHMENT TO LEGAL DESCRIPTION - NOT A SURVEY Point of Commencement E 1/4 Cor, Sec. 13 Center, Sec. 13 TIN, R68W, 6th P.M. TIN, R68W, 6th P.M. P — N89'36'01'l4' .. ., .... Ti:: 1.66' N89'36'01'W O 30.00' O S89'36'01"E 2591.82' cc -- J N LINE, SE 1/4, SEC. 13 Z I m UU m m n _ Point of 30, I N CC 2 v H 'v- -' Beginning z cc N Li; 4 ---()_0000 '- i I n ^ I - ) ZryryOu) n Q Lri I O=r9, (V 1 d' vul inmmm (N ryI^ N. \ to M !(�N' z o% -y W O IN a Z Z PARCEL 1 z WI 6,536,833 S.F. I0 150.065 AC. r i oe S LINE, N 1/2, S 1/4, EC. 13 ppp b Er a \ N89'46'03"W 1n z .4 POINT " " 280.00' n I JO N89'1 57' d' n SE Cor, N1/2, U - SW 1/4, Sec. 13 O — 28 .96' �F w TIN, R68W, 6th P.M. p v • - In J W LOT 2 '- \ I o _. I ^^ (%j r h In co ci o • cn to -- / S00'59'27"W 280.00' /Lc1r3gz3No N89'00'33"W 596.67' 8 ' c I - N89'00'33"W 1703.54' S LINE SE�1/4, SEC. 13 N T N89'00'33'W — _ — _ 2613.82 _ - WELD COUNTY ROAD N0. 8 S 1/4 Cor, Sec. 13 SE Cor, Sec. 13 TIN, R68W, 6th P.M. TIN, R68W, 6th P.M. SCALE: 1"=500' SHEET 3 OF 4 Vigil Land Consultants -AM (80 Yuma Street • Denver, Colorado 80204 Off: (303) 436-9233 • Fax: (303) 436-9235 )- ate 09-01-05 Job No. 05019 ATTACHMENT TO LEGAL DESCRIPTION - NOT A SURVEY - W 1/4 Cor, Sec. 13 TIN, R68W, 6th P.M.cis Center, Sec. 13 TIN, R68W, 6th P.M. - S89'36'011' 2316.65' N LINE, SW 1/4. SEC. 73 276.46' ._ p I Q O CC Z -0, oLi O lb U� N a ._ Q nl M �' f.) N- Z PARCEL 2 I- ct v - ZIa 2,921,490 S.F. m1'0oM^CC I 3 N UN^ON n \ 67.068 AC. tr) = Qaaiaa J NI N ^ .,Ni- IN er NOvi O H N Z U g 2 h 6 CNN 2•1 p9) - Q ZI O 3 O Z CO �mmm0 Lit I Z C I S LINE, N12, SW 1/4, SEC. 13 4 N89'17'57"W 2154.23' I N89'17'5710/ SE Cor, Ni/2, — I 30.00' Point of SW 1/4, Sec. 13 OT Beginning TIN, R68W, 6th P.M. N69.17'5715, 147.91' — SW Cor, N1/2, SW 1/4, Sec. 13 TIN, R68W, 6th P.M. POINT A" N LITTLE Oz':'' CREEK i OT 2 SUBDiViSION SCALE: 1"=-500' SHEET 4 OF 4 EXHIBIT C Vicinity Map • i I I I I I 1 I - 1 -_L-_-_l_ - l _ 1___ _ L DACONO ESTATES METROPOLITAN DISTRICT VICINITY MAP K >&Y s $ gjlt ;# • ^•} f Ci -A ! t s <t ♦k,. iw' ! i 2q : . 4"X" ➢ 4 '{ 4, trei- N^ '4'? aA ;9m° Ord : t b A%,,7 ' ' +:d .� n.. F feT ..<.-1 Z i a7. • ;' ti o .` g ,t:?,x ;Rfrvu, a ,1 Ns`�,«., •ws1', �,_. € ; .ir ao : • .1.: (t tx • S t 84 ..di dye}^c�c`.w' ;' aF '�lX! .`.6 �" yv� fit. . $t''st�.2 :`�o#t° ,"!r,T A<^s 5+P• '...« w ..x, { 4.,.rta144;'aK 3 4 n' te" `' -. 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AUGUST 31,2005 EXHIBIT D Property Owner's Consent August 22, 2005 City of Dacono Post Office Box 186 Dacono, Colorado 80514 RE: Proposed Dacono Estates Metropolitan District(the "District") To Whom It May Concern: Dacono Estates, LLC, a Delaware limited liability company, is the sole owner of the property attached hereto as Exhibit A, which property is proposed to constitute the boundaries of the District. The purpose of this letter is to advise that I, Stephen J. Foley, as Manager of FS Dacono Estates, LLC, a Colorado limited liability company, as Manager of Dacono Estates, LLC, a Delaware limited liability company, consent to the organization of the District. DACONO ESTATES, LLC, a Delaware limited liability company By: FS Dacono Estates, LLC, Manager, a Colorado limited liability company By: � Stephen . Foley, NYanager7rfr/ STATE OF COLORADO ) ) ss. COUNTY OF Denver ) _ Subscribed and sworn to before me on this 22m day of August 2005, by Stephen J. Foley, as Manager of FS Dacono Estates, LLC, a Colorado limited liability company, as Manager of Dacono Estates, LLC, a Delaware limited liability company. [SEAL] otary Public My commission expires ` I'J,QQO • Dacono Estates\Service Plan (� JLG1531 0809.0003 EXHIBIT A vigil Land Consultants 480 Yuma Street ■ Denver, Colorado 80204 _ Oft (303) 436-9233 • Fax: (303) 436-9235 Date 09-01-05 Job No. 05019 LEGAL DESCRIPTION PARCEL 1 A PARCEL OF LAND LOCATED IN THE SOUTH HALF OF SECTION 13, TOWNSHIP 1 NORTH, RANGE 68 WEST OF THE SIXTH PRINCIPAL MERIDIAN, COUNTY OF WELD, STATE OF COLORADO, MORE PARTICULARLY DESCRIBED - AS FOLLOWS: COMMENCING AT THE EAST QUARTER CORNER OF SAID SECTION 13, CONSIDERING THE EAST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13 AS BEARING S00°13' 57"W AND WITH ALL BEARINGS CONTAINED HEREIN RELATIVE THERETO; THENCE ALONG THE NORTH LINE OF SAID SOUTHEAST QUARTER N89°36'01"W, 30. 00 FEET TO THE POINT OF BEGINNING, BEING A POINT ON THE WEST RIGHT-OF-WAY LINE OF WELD COUNTY ROAD NO. 13; THENCE DEPARTING SAID NORTH LINE AND ALONG SAID WEST RIGHT-OF-WAY LINE, BEING 30 . 00 FEET WESTERLY FROM AND PARALLEL WITH THE EAST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13, S00°13' 57"W, 1745.77 FEET; THENCE N89°46' 03"W, 280 . 00 FEET; THENCE S00°13' 57"W, 596 .67 FEET; THENCE N89°00' 33"W, 596 .67 FEET; THENCE S00°59'27"W, 280 . 00 FEET TO A POINT ON THE NORTH RIGHT-OF-WAY LINE OF WELD COUNTY ROAD NO. 8; THENCE ALONG SAID NORTH RIGHT-OF-WAY LINE, BEING 30 .00 FEET NORTHERLY FROM AND PARALLEL WITH THE SOUTH LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13, N89°00' 33"W, 1703 .54 FEET TO A POINT ON THE WEST LINE OF THE SOUTH HALF OF THE SOUTHEAST QUARTER OF SAID SECTION 13; THENCE ALONG SAID WEST LINE N00°00' 57"E, 1284 .84 FEET TO THE SOUTHEAST CORNER OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SAID SECTION 13; THENCE ALONG THE SOUTH LINE OF SAID NORTH HALF N89°17' 57"W, 285 . 96 FEET TO A POINT ON _ THE EAST RIGHT-OF-WAY LINE OF THE ST. VRAIN BRANCH OF THE UNION PACIFIC RAILROAD AS DESCRIBED IN BOOK 212, PAGE 279, BOOK 252, PAGE 10, BOOK 260, PAGE 439 AND BOOK 305, PAGE 213, SAID POINT HEREINAFTER REFERRED TO AS POINT "A"; THENCE ALONG SAID EAST RIGHT-OF-WAY LINE N12°23'22"E, 1342 .46 FEET TO A POINT ON THE NORTH LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13, FROM _ WHICH POINT THE CENTER OF SAID SECTION BEARS N89°36' 01"W, A DISTANCE OF 1.66 FEET; THENCE ALONG SAID NORTH LINE S89°36' 01"E, 2591.82 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED PARCEL 1 CONTAINS 6,536, 833 SQUARE FEET OR 150 .065 ACRES MORE OR LESS . AND ALSO; SHEET 1 OF 4 /igi! Land Consultants 480 Yuma Street ■ Denver, Colorado 80204 Off: (303) 436-9233 • Fax: (303) 436-9235 Date 09-01-05 Job No. 05019 PARCEL 2 BEGINNING AT THE AFOREMENTIONED POINT "A"; THENCE CONTINUING ALONG SAID SOUTH LINE N89°17' 57"W, 147 . 91 FEET TO THE POINT OF BEGINNING, SAID POINT OF BEGINNING BEING A POINT ON THE WESTERLY RIGHT-OF-WAY LINE OF THE UNION PACIFIC RAILROAD AS DESCRIBED IN BOOK 212, PAGE 279, BOOK 252, PAGE 10, BOOK 260, PAGE 439 AND BOOK 305, PAGE 213; THENCE DEPARTING SAID WESTERLY RIGHT-OF-WAY LINE AND CONTINUING ALONG SAID SOUTH LINE N89°17'57"W, 2154 .23 FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF WELD COUNTY ROAD NO. 11; THENCE DEPARTING SAID SOUTH LINE AND ALONG SAID EAST RIGHT-OF-WAY LINE, BEING 30.00 FEET EASTERLY FROM AND PARALLEL WITH THE WEST LINE OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SAID SECTION 13, N00°12'27"W, 1301.15 FEET TO A POINT ON THE NORTH LINE OF THE SOUTHWEST QUARTER OF SAID SECTION 13; THENCE ALONG SAID NORTH LINE S89°36' 01"E, 2316 .65 FEET TO THE WEST RIGHT-OF-WAY LINE OF SAID UNION PACIFIC RAILROAD; THENCE ALONG SAID WEST RIGHT-OF-WAY LINE S06°51'45"W, 1320 .79 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED PARCEL 2 CONTAINS 2, 921,490 SQUARE FEET OR 67 . 068 ACRES MORE OR LESS. ,Rp, iirs{gltitiif{J(t io 0 e' 0. VIGIL, S..NO. 26606 it 26606 r o%oio4: 'S 4 LAND ',�aunfauawo ,' SHEET 2 OF 4 Vigil Land Consultants °---MIM480 Yuma Street • Denver, Colorado 80204 Off: (303) 436-9233 ■ Fax: (303) 436-9235 Date 09-01-05 Job No, 05019 ATTACHMENT TO LEGAL DESCRIPTION - NOT A SURVEY Point of Commencement E 1/4 Cor, Sec. 13 Center, Sec. 13 TIN, R68W, 6th P.M. TIN, R68W, 6th P.M. — N89'36'01'W ` Nt P - A T TED 1.66' N89'36'011,1 o 30.00' — 589'36'01 "E 2591.82' J N LINE, SE 1/4, SEC. 13 U Z I Q o I I 03__nn � " Point of 30, Z ...1,(42'n rh u b Beginning Zen-aaaa at cnIn K ZZ`'hmo pl^ 16 I 144 Nt/100mmm N �' u, C----- 2 0 1e N z z N O 2 PARCEL 1 j� Z - WI 6I ,536,833 S.F. 150.065 AC. "? i Q O S LINE N 1/2, I/4, EC. 13 O - Ct - N89'46'03'W 1n h POINT "A" 280.00' I Z O2 SE Cor, N7/2, "-' N89'1 5TW v - SW 1/4, Sec. 13 El 28 ,96' W TIN, R68W, 6th P.M. ol Q CO toN i' W to 0 — ._... . _.. W tell ^^ N in SLOB VISION . 0 _ i. o SOO59 W' '27' LOT 3 0 " i 280.00' vi \ Z ; N89'00'33"W I b 596.67' I — _ 3N89'00' 3'W 1703.54' S LINE SE 1/4, SEC. 13 N - F -- _ — N89'00'331Y — — — — 2613.82' — — — _. WELD COUNTY ROAD NO. 8 S 1/4 Cor, Sec. 13 ' �' SE Cor, Sec. 13 TIN, R68W, 6th P.M. TIN, R68W, 6th P.M. SCALE: 1"=500' SHEET 3 OF 4 —Vigil Land Consultants 480 Yuma Street • Denver, Colorado 80204 Off:: (303) 436-9233 • Fax: (303) 436-9235 Date 09-01-05 Job No. 05019 ATTACHMENT TO LEGAL DESCRIPTION - NOT A SURVEY W 1/4 Cor, Sec. 13 TIN, R68W, 6th P.M. Center, Sec. 13 TIN, R68W, 6th P.M. — S89'36'01'E 2316.65' N LINE, SW 1/4, SEC. 13 276.46' _ O r I• I 0 Ct O n O) 0 Z °q' ^p (-3 O CI U Ct '- Q ry1 in '" M I-• Z PARCEL 2 I"- ¢0'' h 2,921,490 S.F. col.-.1, aen z CC I n 67.068 AC. 3 W ?a0�� J Nj N I•I, Q aaaa O N (s1 2 I- �ZNN0tt1 '- W h b 0NNNM Z Z V1 mmmm Z (0 30' — S LINE N 1/2, SW 1/4, SEC 13 N89'17'57'W 2154.23' I I N89'17.57-W SE Cor, Ni/2, — I 30.00' L uT I Point of sw 1/a, Sec. 13 Beginning TIN, R68W, 6th P.M. N8717.57'W — 147.91' SW Cor, N1/2, SW 1/4, Sec. 13 TIN, R68W, 6th P.M. POINT A" N LITTLE DRY CREEK 1 OT 2 St 3Di 4r .;,.,:.1 SCALE: 1"=500' SHEET 4 OF 4 EXHIBIT E Engineer's Estimate of Costs and Certification The Metropolitan District for Dacono Estates Preliminary Construction Cost Estimate This engineers estimate of probable cost to construct the public improvements within the district boundaries along with the required offsite improvements are represented in the approximate costs listed by category below. Parks and Open Space Construction cost for the landscaping, streetscaping, parks and open space. Onsite Landscaping $ 700,000 Offsite Landscaping $ 200,000 Roadway Construction Construction costs for the sidewalks, curb and gutter, asphalt pavement and pavement prep. Onsite Roadway $ 4,522,957 Offsite Roadway $ 1,746,609 Waterline Construction Construction cost for the installation of the water distribution system. Onsite Waterline $ 842,530 Offsite Waterline $ 204,891 Storm Drainage Construction Construction cost for the installation of the storm drainage system. (Not including major drainage construction for Little Dry Creek) Onsite Storm Drainage $ 929,058 Offsite Storm Drainage $ 120,000 20% for Contingencies, Surveying and Materials Testing. Onsite $ 1,509,772 Offsite $ 550,372 8/3 1os Total of the Probable Construction Cost of the District Improvements for Dacono Estates _ Total Onsite Improvements $ 8,534,317 Total Offsite Improvements $ 2,821,872 Total estimated Budget $ 11,356,189 The above preliminary estimated cost to construct the district improvements for Dacono Estates are based on preliminary design and does not represent the final design for the site. Changes to this plan may result in the increase or decrease of this preliminary estimate. 8/31/05 Dacono Estates Metropolitan District preliminary Cost Estimate Description Quantity Unit Cost Total Water- Onsite- 8" PVC 17,759 $ 23.25 $412,897.00 12" PVC 6,556 $ 33.00 $216,348.00 FH 59 $ 3,615.00 $213,285.00 total- $842,530.00 Offsite- 12" PVC 4,237 $ 33.00 $139,821.00 FH 18 $ 3,615.00 $65,070.00 total- $204,891.00 Storm Drainage- - Onsite- 18" RCP 2,380 $ 40.00 $95,200.00 24" RCP 1,976 $ 48.00 $94,848.00 36" RCP 1,625 $ 53.00 $86,125.00 48" RCP 1,365 $ 84.00 $114,660.00 54" RCP 905 $ 105.00 $95,025.00 inlets 36 $ 3,600.00 $129,600.00 MH 76 $ 3,600.00 $273,600.00 pond outlet 2 $ 20,000.00 $40,000.00 total- $929,058.00 Offsite- bridge 1 $120,000 $120,000.00 total- $120,000.00 Roadwav- Onsite- C&G mountable 63,551 $ 12.00 $762,612.00 C&G median 1,190 $ 10.00 $11,900.00 Asphalt 112,958 $ 33.45 $3,778,445.00 total- $4,552,957.00 Offsite- C&G 15,840 $ 12.00 $190,080.00 Asphalt 46,533 $ 33A5 $1,556,529.00 total- $1,746,609.00 Landscaping- - Onsite- $700,000.00 Offsite- $200,000.00 Contingencies, Surveying, and Materials Testing- Onsite- $1,509,772.00 Offsite- $550,372.00 Total Onsite Improvments- $8,534,317.00 Total Offsite Improvments- $2,821,872.00 Total Estimated Budget- $11,356,189.00 - M B CONSULTING, INC. PLANNING • CIVIL ENGINEERING • LANDSCAPE ARCHITECTURE • PROJECT MANAGEMENT August 22, 2005 City of Dacono 512 Cherry Avenue Dacono, CO 80514 RE: Proposed Dacono Estates Metropolitan District To Whom It May Concern: I, Mark F. Bishop, a Registered Professional Engineer in the State of Colorado, have reviewed the Engineer's Estimate of Probable Construction Costs within the proposed Dacono Estates Metropolitan District area. The Engineer's Estimate of Probable Construction Cost was based on the following information and assumptions: A. The quantities for each item were based on conceptual design of public improvements, as depicted in the Dacono Estates Preliminary Construction Plans dated August 22,2005,prepared by MB Consulting, Inc, which are not approved by appropriate agencies. B. Unit costs were based on recent bid costs for similar projects. Based on these assumptions, I believe that the Engineer's Estimate of Probable Construction Cost contained within the Service Plan for the Dacono Estates Metropolitan District is reasonable for the public improvements portion of this project. Additionally, I have reviewed the exhibits of the location of the public improvements within the Service Plan for the District (Parks and Open Space, Roadway Construction, Waterline Construction and Storm Drainage Construction) and believe the exhibits represent the conceptual design of the public improvements prepared by MB Consulting, Inc. For and on behalf of MB Consu ' Inc. petGI, gals o oAa uC.y e °^rJ o nP 00 5"CaV Mark - fetal . Project Manager 333 W. Colfax Ave., Suite 500 • Denver, CO 80204 • www.mbcdenver.com • Office 303-825-7475 • Fax 303-825-7341 EXHIBIT F Location of Public Improvements I I I I r _1 . 1 I 1 L L . L . l_. I- L- L- l- L DACONO ESTATES METI=IOPOLfTAN DISTRICT ROADWAY AND TRAILS L x - / '. I I 1� l ICI 1 - �� r_ iii'\ II �I - �l�i I 9 IB� III�� E.RIV€ I SLAW °- M O r k,:n eali p 1 1 1 1 1 . c. a. . III Is .� h. _leftillif z ® _® � � I(� R" R ' Dvre i Z� w - a se, -�- BLAZING STAR BRAE ■■ Imo/ i • _ � s AA 'ell 7/ cr 1. �u©. L ��((////�� -� \ lr\� -- SM5 1OPYE Li IPI�i —�� \ •t.� � il� . , iXVME ORIYE B L. R 1�/rIIIIII s -�PIC MN r1.11 NM LZIUI NMI MOS a.I R 0.U&Nk'.MIEfl - '�` RUBI I --�� _ ° _ , 4 E / �Y /. & �� 0.i �� / /�/ //2 8 ri H - _ , . LITTLE DRY CREEK SUBDIVISION / 11 1 ° .. I� ��r�� no II / I /2 - _ WELD COUNTY ROAD a AUGUST 31,2005 L_ I- L- I- '.- I- I^ t- ti--- I- I- I- I- I- !- I- I- I- DACONO ESTATES METROPOLITAN DISTRICT WATER t 7 I I III > GVE,Kil 50 b S 9,D111 10 1/ l A I 7 o 41 .1 W I RI FOR Ea II' -... W ' BLAZING STAR CT BLAZING STAR AVENUE LARCR F' „ N II 1 Ru:No I. c N1l9EtOV2R(RACE e i TsuxaovreRw:vE PNE LANE I r M I a DRIVE e. 20 1_1 H. ¢ WPY O a� i I x p 1 1 sNPPOMGON p� IRIS LANE ' 4 is O OWERR ;E" uPo e Lt, j. . • .` i THYME WYE w .. - 1 z in , DRIVE A 1 s H ¢ YARROW WAY Z o H I R LITTLE DRY CREEK SUBDIVISION /' i;' I, , .. -E_ —•— -.. - WELD CO ANTYRa.oa - —_. � _-. ..... AUGUST 31, 2005 I I .1 I 1 I I I I _I _ .S ... . I -_ 1__ I_ _ I- I- L_ L_ _ L DACONO ESTATES METROPOLITAN DISTRICT STORM SEWER I ‘ \ L ____?-_ ___. , ------i______, i I___ � I �IIIIIIIii11111 � N, _ LIC, 12 LEFL Nyrr r WEFONI4 / ilL cru� ,: LOPI � 1111__111■ h_ • J to '6) a � s�.A• 4 III ■11\� ■ I r_ 41� „ �u ti ■1111, %//�i�, � I� s�Ii1/ /`— II_II�11 I. 1■_111- � ON�~AREA I PROPOSED OETENiKKI I a j/(litONOLOG.� 11 — F r� r� ,I PROPO ED 0 0 LITTLE DRY CREEK SUBDIVISION - LOL1➢ON 9 / / 9O `% „.,,,,---'-- 0 z i I ____ ® - - 1- i WELD COUNTY ROADS -�•® I- I- I- I- I--. .I- I- L-- I- I- I•- F . I-- {- I-- I- I- I- DACONO ESTATES METROPOLITAN DISTRICT PARKS AND OPEN SPACE I f `, ,rt II :r i I �` IrA�1>~-GIEVSJ_ DIVI IION i i _ ( is __.: • BLAZING STAR 91A)ING SiMCN I ' _ a rte", YA LURE DR 0/ 6LAZ NC 9TMC I, S)cni._y F I WIWYIOWER PLACE % C k i WER DRIVE 0 I %j �.. I LUP NE UNE Fl II�� S 1, BIKINI,6i,).UNIY£s o I 5NMONMON WAY 17: w a 9--1ii i w NI9 LWEI if4i / `�', a. E RNARtA MW 4�0 ' g r- a _ w w iTNYME IXUVE W_Atm ¢ /a /i' 5 w SAGE LANE RUBIN E CARTER Y % %/. �, %% p L ,✓ c I; �� - LITTLE DRY CREEK SUBDIVISION % �/// '%p /� 1 C4 I I WELD COUNTY ROAD II a AUGUST 31, 2005 E 1 I __I___ _L I 1- L_ l- L__ 4.-- 1-•- I-- I- �I R- DACONO ESTATES METROPOLITAN DISTRICT OFFSITE 11 � � rt •� ", .„.••-,-,:_.),,,,='• rI ..�'.__- ,r4,.--±_ �_'__...Tf ice-^_.j—11 r 'A , .• qw gu Ivy Iov- ?-fr- r.--r: i >*t--•--i-j---1 \.\( , ,J(. 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AUGUST 31, 2005 EXHIBIT G Financing Plan Forecasted Cash Surplus Balances and Cash Receipts and Disbursements Market Projection Consultant's Analysis Developer's Letter in Support of Market Projections DACONO ESTATES METROPOLITAN DISTRICT FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS AUGUST 30, 2005 TABLE OF CONTENTS PAGE Accountant's Report 1 Projection Summary 2 _ Schedule of Estimated Assessed Valuation 4 Schedule of Estimated Bond Debt Service Requirements 6 Summary of Significant Forecast Assumptions and Accounting Policies 11 a Clifton Gunderson LLP Certified Public Accountants&Consultants Accountant's Report The Petitioners for Formation of Dacono Estates Metropolitan District Weld County, Colorado We have compiled the accompanying forecasted surplus cash balances and cash receipts and disbursements of Dacono Estates Metropolitan District (the "District") (in the Formation Stage of Development) as of the date of formation and for the calendar years ending through 2043, in accordance with attestation standards established by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of a forecast, information that is the representation of the Petitioners for Formation of the District (collectively, "Management") and does not include evaluation of the support for the assumptions underlying the forecast. We have not examined the forecast and, accordingly, do not express an opinion or any other form of assurance on the accompanying schedules or assumptions. However, we did become aware of a departure from the guidelines for presentation of a forecast established by the American Institute of Certified Public Accountants, which is described in the following paragraph. Furthermore, there will usually be differences between the forecasted and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. We have no responsibility to update this report for events and circumstances occurring after the date of this report. As discussed in Note 4, the forecast is presented on the cash basis of accounting, whereas the historical financial statements for the forecast period are expected to be presented in conformity with generally accepted accounting principles on the accrual basis for government wide statements and the modified accrual basis for individual fund financial statements for all funds of the District by fund type. Guidelines for presentation of a forecast established by the American Institute of Certified Public Accountants require disclosure of the differences resulting from the use of a different basis of accounting in the forecast than that expected to be used in the historical financial statements for the period. Accordingly, if the AICPA presentation guidelines were followed, the forecast would indicate that the presentation reflects — surplus cash balances and the cash received and disbursed rather than fund balances and the revenue and expenditures that would be recognized under generally accepted accounting principles based on the accrual basis and the modified accrual basis of accounting. LLA — Greenwood Village, Colorado August 30, 2005 Offices in 14 states and Washington,DC HLB International ► I ► 1 I I I I ► r I I ) ► 1 I ► i ► DACONO ESTATES METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SUMMARY-GENERAL FUND AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2043 Cash Receipts Cash Disbursements Cash Balances General Net Specific Annual Administrative Annual Cumulative Total Fund PrPesty Ownership Developer Interest Total Costs Total Surplus Surplus Collection Assessed Mill Taxes Taxes Contributions Income Cash $40,000 Cash Cash Cash Collection Year Value Levy ' for at Receipts Inflated by Disbursements (Deficit) Balances Year L (See Page 5) 9600% 10.00. Administration 2.00% 100% 2005 0 000 0 0 0 0 0, 0 0 0 0 2005 2006 0 0.00 0 0 40,000 0 40000 40,000 40,000 0 0 2006 2007 0 0.00 0 0 41,000 0 41,000 40,800 40,800 200 200 2007 2008 380,190 5.00 1,863 186 40,000 4 42,053 41,616 41,616'i 437 637 2008 2009 1,752,716 5.00 8,588 859 33,000 13 42,460 42,448 42,448 12 649 2009 2010 3,717,290 500 18,216 1,822 24,000 U 44,051 43,297 43,297 754 1,402 2010 2011 5,699,006 500 27,925 2,793 14,000 28 44,746 44,163 44,163 583 1,9851 2011 2012 7,820,998 5.00 38,321 3,812 3,000 40 45,195 45,046 45,046 149 2,134 2012 2011 9,882,776 5.00 48,426 4,841 41 53,312 45,947 45,947 7,365 9,498 2013 2014 12,170,105 4.00 47,707 4,771 190 52,668 46,866 46,866 5,802 15,300 2014 2015 14,287,339 3.25 45,505 4,551 306 50,362 47,804 47,804 2,558 17,858 2015 2016 16,470,194 3.25 52,458 5,246 357 58,061 48,760 48,760 9,301 27,159 2016 2017 17,531,492 3.25 55,838 5,584 543 61,965 49,735 49,735 12,230 39,389 2017 2018 17,882,122 3.25 56,955 5,696 788 63,439 50,730 50,730 12,709 52,099 2018 2019 17,882,122 3.25 56,955 5,696 1,042 63,693 51,744 51,744 11,949 64,047 2019 2020 18,239,765 3.25 58,094 5,809 1,281 65,184 52,779 52779 12,405 76,452 2020 2021 18,239,765 3.25 58,094 5,809 1,529 65,432 53,835 53,835 11,597 88,050 2021 2022 18,604,560 3.25 59,256 5,926 1,761 66,943 54,911 54,911 12,032 100,081 2022 2023 18,604,560 3.25 59,256 5,926 2,002 67,184! 56,010 56,010 11,174 111,256 2023 2024 18,976,651 325 60,441 6,044 2,225 68,710 57,130 57,130 11,580 122,836 2024 2025 18,976,651 3.25 60,441 6,044 2,457 68,942 58,272 58,272 10,670 133,505 2025 2026 19,356,184 3.25 - 61,649 6,165 2,670 70,484 59,438 59,438 11,046 144,551 2026 2027 19,356,184 3.25 61,649 6,165 2,891 70,705 60,627 60,627- 10,078 154,630 2027 2028 19,743,308 3.25 62,882 6,288 1,091 72,263 III 61,839 61,839 10,424 165,053 2028 2029 19,743,308 325 62,882 6,288 3,301 72,471 61,076 63,076 9,395 174,449 2029 • ' 2030 20,138,174 1.25 64,140 6,414 3,489 74,043 64,337 64,337 9,706 184,154 2030 I 2011 20,138,174 3.25 64,140 6,414 3,683 74,237 65,624 65,624 8,613 192,767 2031 2032 20,540,938 3.25 ' 65,423 6,542 3,855 75,820 66,937 66,9]7 8,883 201,650 2032 2033 20,540,938 3.25 65,423 6,542 4,033 75,998 68,275 68,275 7,723 209,373 2033 2034 20,951,756 3.25 66,731 6,671 4,187 77,591 69,641 69,641 7,950 287,323 2034 2035 20,951,756 ].25 66,731 6,673 4,146 77,750 71,034 71,034 6,716 224,039 2035 2036 21 370,792 3.25 68,066 6,807 4,481 79,354 72,454 72,454 6,900 230,938 2036 2037 21,370,792 3.25 68,066 6,807 4,619 79,492 73,904 73,904 5,588 236,527 2037 2038 21.798,207 3.25 69,427 6,943 4,731 81,101 75,382 75,382 5,719 242,246 2038 2039 21,798,207 3.25 69,427 6,943 4,845 81,215 76,889 76,889 4,326 246,572 2039 2040 22,234,172 3.25 70,816 7,082 4,931 82,529 78,427 78,427 4,402 250,974 1. 2040 2041 22,234,172 3.25 70,816 7,082 5,019 82,9171, 79,996 79,996 ?921 253,895 2041 2042 22,678,855 3.25 72,232 7,223 5,078 84,533 81,595 51,595 2,918 256,833 2042 2043 22,678,855 3.25 72,232 7,223 5,137 84,592 83,227 83,227 1,365 258,197 2043 2,017,073 201,711 195,000 89,011 2,502,795 2,244,598 2,244,598 i 258,197 This financial information should be read in comrtchon with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountants Report. Page 2 I t I s t I I ) l 1 I I I I 1 I 1 I I II' DACONO ESTATES METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SUMMARY-DEBT SERVICE FUND AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2043 I Cash Receipts Cash Balance, Debt . Net Specific Single-Family Tovaihome Total Cumulative Net Net Net Total Annual Cumulative Total Service Property Ownership Residential Residential Interest Annual Cash Debt Service Debt Service Debt Service Bonds Surplus Fund Cash Surplus Surplus Collection Assessed Fwd Taxes Taxes Facilities Fee Pacilitiet Pee Income Cash Available on on on Transfer to Cumulative Maximum Debt to Disbursements Cash Cash Collection Year Value ME per Unit @ per Unit @ at Receipts for 2007 Bonds 2010 Bonds 2013 Bonds (Release from) Surplus Balance Assessed (Deficit) Balances Year (See Page 311 Levy 98.00% 10.00% 11,200 5800 2.00% I Debt Service (See Page 6) (See Page 8) (See Page 10) Surplus Fwd Balance Ratio 2005 0 2005 2006 0 0.00 0 0 18,000 0 0 18,000 18,000 18,000 18,000 847,500 Na 18,000 2006 2007 0 0.00 0 0 80,400 0 0 80,400 80,400 0 80,400 98,400 847,500 Ne 80,400 2007 2008 380,190 35.00 13,041 1,304 120,000 0 0 134,345 134,345 0 134,345 232,745 847,500 625% 134,345 2008 2009 1T52,716 35.00 60,118 6,012 120,000 0 0 186,130 186,130 0 186,130 418,875 847,500 136% 186,130 2009 2010 3,717,290 35.00 127,503 12,750 120,000 0 0 260,253 260,253 178,125 0 82,128 501,003 847,500 145% 260,253 2010 2011 5,699,006 35.00 195,476 19,548 120,000 0 0 335,024 335,024 228,125 0 106,899 607,902 847,500 93% 335,024 2011 2012 7,820,998 35.00 268,260 26,826 120,000 0 0 415,086 415,086 189,375 0 225,711 833,613 847,500 68% 415,086 2012 2013 9,882,776 35.00 338,979 33,898 120,000 24,000 0 516,877 516,877 188,250 225,000 0 13,887 847,500 847,500 85% 427,137 89,74 89,74 2013 2014 12,170,105 35.00 417,435 41,744 3,600 96,000 1,795 560,574 650,314 192,125 225,000 232,500 0 847,500 847,500 69% 649,625 (89,05 ) 68 2014 2015 14,287,339 35.00 490,056 49,006 0 72,000 14 611,076 611,765 195,625 225,000 232,500 (41,360) 806,140 847,500 58% 611,765 (68) 2015 2016 16,470,194 33.00 564,928 56,493 0 0 0 621,421 621,421 198,750 235,000 232,500 (44,829) 761,311 847,500 50% 621,421 2016 2017 17,531,492 35.00 601,330 60,133 0 0 0 661,463 661,463 196,500 239,250 232,500 (761,311) 0 0 476 (93,061) 754,52 754,52 2017 2018 17,882,122 35.00 613,357 61336 0 0 15,090 689,783 1,444,307 199,250 243,125 232,500 46% 674,875 14,90 769,43 2018 2019 17,882,122 35.00 613,357 61,336 0 0 15,389 690,082 1,459,514 201,625 241,625 232,500 46% 675,750 14,33 783,76 2019 2020 18,239,765 35.00 625,624 62,562 0 0 15,675 703,861 1,487,625 203,625 250,125 232,500 44% 686,250 17,61 801,37 2020 2021 18,239,765 35.00 625,624 62,562 0 0 16,028 704,214 1,505,589 205,250 247,875 232,500 44% 685,625 18,58 819,96 2021 2022 18,604,560 35.00 638,136 63,814 0 0 16,399 718,349 1,538,313 211,500 250,625 237,500 42% 699,625 18,72 838,68 2022 2023 18,604,560 35.00 638,136 63,814 0 0 16,774 718,724 1,557,412 207,000 253,000 237,125 42% 697,125 21,59 860,28 2023 2024 18,976,651 35.00 650,899 65,090 0 0 17,206 733,195 1,593,482 212,500 260,000 241,750 40% 714,250 18,94 879,23 2024 2025 18,976,651 35.00 650,899 65,090 0 0 17,585 733,574 1,612,806 212,250 256,250 246,000 40% 714,500 19,07 898.30 2025 2026 19,356,184 35.00 663,917 66,392 0 0 17,966 748,275 1,646,581 216,625 262,500 249,875 38% 729,000 19,27 917,58 2026 2027 19,356,184 35.00 663,917 66,392 0 0 18,352 748,661 1,666,242 215,250 263,000 248,375 37% 726,625 22,03 939,61 2027 2028 19,743,308 3500 677,195 67,720 0 0 18,792 763,707 1,703,324 223,500 263,125 256,875 35% 743,500 20,20 959,824 2028 2029 19,743,308 35.00 677,195 67,720 0 0 19,196 764,111 1,723,935 220,625 267,875 254,625 34% 743,125 20,98 980,810 2029 2030 20,138,174 35.00 690,739 69,074 0 0 19,616 779,429 1,760,239 227,375 271,875 257,375 32% 756,625 22,804 1,003,614 2030 2031 20,138,174 35.00 690,739 69,074 0 0 20,072 779,885 1,783,499 228,000 270,125 259,750 31% 757,875 22,010 1,025,624 2031 2012 20,540,938 35.00 704,554 70,455 0 0 20,512 795,521 1,821,145 232,875 278,000 261,750 2Y/a 772,625 22,896 1,048,520 2032 2033 20,540,938 35.00 704,554 70,455 0 0 20,970 795,979 1,844,499 231,625 274,750 268,375 27% 774,750 21,229 8,069,749 2033 2034 20,951,756 3500 718,645 71,865 0 0 21,395 811,905 1,881,654 234,625 286,125 269,250 25% 790,000 21,905 1,091,654 2034 2035 20,951,756 35.00 718,645 71,865 0 0 21,833 812,343 1,903,997 216,500 281,000 269,750 23% 787,250 25,093 1,116,747 2035 2036 21,370,792 35.00 733,018 73,302 0 0 22,335 828,655 1,945,402 237,250 290,500 274,875 21% 802,625 26,030 1,142,777 2036 2037 21,370,792 35.00 733,018 73,302 0 0 22,856 829,176 1,971,953 241,875 288,500 274,250 18% 804,625 24,551 1,167,328 2037 2038 21,798,207 35.00 747,679 74,768 0 0 23,347 845,794 2,013,122 0 540,750 278,250 16% 819,000 26,794 1,194,122 2038 2039 21,798,207 35.00 747,679 74,7680 0 23,882 846,329 2,040,451 0 538,125 281,500 13% 819,625 26,704 1,220,826 2039 2040 22,234,172 23.00 501,158 50,116 0 0 24,417 575,691 1,796,517 0 548,250 289,000 10% 837,250 (261,559) 959,267 2040 2041 22,234,172 23.30 501,158 50,116 0 0 19,185 570,459 1,529,726 0 0 835,375 7% 835,375 (264,916) 694,351 2041 2042 22,678,855 23.00 511,111 51,118 0 0 13,817 576,186 1,270,537 0 0 855,125 4% 855,825 (278,939) 415,412 2042 2043 22,678,855 2000 444,506 44,451 0 0 8,308 497,265 912,677 0 0 854,625 0% 854,625 (357,360) 58,052 2043 19,962,655 1996,271 822,000 192000 488,876 1 23,461,802 5,966,000 8,076,375 9,361,375 0 ? 23,403,750 51,052 This financial information should be read in connection with the accompanying Summery of Significant Forecast Assumptions and Accounting Policies and Acemmtanfs Report Page 3 I I I I l ► I I I I I I I I I I I I I DACONO ESTATES METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE OF ESTIMATED ASSESSED VALUATION (Page I of 2 -Continued on Page 5) AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 204: TOTAL RESIDENTIAL UNITS Single-Family Townhome TOTAL RESIDENTIAL UNITS Est.Biennial Cumulative Estimated Est.Market Annual Est.Market Annual Annual Annual Revaluation Market Residential RESIDENTIAL Construction Collection Number of Value per Value Number of Value per Value Number of New Value of New per State .Value Assessment ASSESSED Year Year Dwelling Unit of New Dwelling Unit of New Residential Residential Statute at of New Ratio VALUATION Units $230,000 Units Units 5130,000 Units Units Units 2.00% Units Inflation compounded annually on base price at 2.00% 2.00% 2005 2007 230,000 130,000 0 0 0 7.96% 0 2006 2008' 234,600 0 132,600 0 0 0 0 0 7.96% 0 2007 2009 57 239,292 13,639,644 135,252 0 57 13 639,644 13,639,644 7.96% 1,085,716 2008 2010 100 244,078 24,407,784 137,957 0 100 24,407,784 272,793 38,320,221 7.96% 3,050,290 2009 2011 100 248,959 24,895,940 140,716 0 100 24,895,940 63,216,161 7.96% 5,032,006 2010 2012 100 253,939 25,393,858 143,531 0 100 25,393,858 1,264,323 89,874,342 7.96% 7,153,998 2011 2013 100 259,017 25,901,736 146,401 0 100 25,901,736 115,776,078 7.96% 9,215,776 2012 2014 100 264,198 26,419,770 149,329 0 100 26,419,770 2,315,522 144,511,370 7.96% 11,503,105 2013 2015 100 269,482 26,948,166 152,316 0 100 26,948,166 171,459,536 7.96% 13,648,179 2014 2016 28 274,871 7,696,396 120 155,362 18,643,444 148 26,339,840 3,429,191 201,228,567 7.96% 16,017,794 2015 2017 120 158,469 19,016,313 120 19,016,313 220,244,880 7.96% 17,531,492 2016 2018 0 0 4,404,898 224,649,778 7.96% 17,882,122 2017 2019 0 0 224,649,778 7.96% 17,882,122 2018 2020 0 0 4,492,996 229,142,774 7.96% 18,239,765 2019 2021 0 0 229,142,774 7.96% 18,239,765 2020 2022 0 0 4,582,855 233,725,629 7.96% 18,604,560 2021 2023 0 0 233,725,629 7.96% 18,604,560 2022 2024 0 0 4,674,513 238,400,142 7.96% 18,976,651 2023 2025 0 0 238,400,142 7.96% 18,976,651 2024 2026 0 0 4,768,003 243,168,145 7.96% 19,356,184 2025 2027 0 0 243,168,145 7.96% 19,356,184 2026 2028 0 0 4,863,363 248,031,508 7.96% 19,743,308 2027 2029 0 0 248,031,508 7.96% 19,743,308 2028 2030 0 0 4,960,630 252,992,138 7.96% 20,138,174 2029 2031 0 0 252,992,138 7.96% 20,138,174 2030 2032 0 0 5,059,843 258,051,981 7.96% 20,540,938 2031 2033 0 0 258,051,981 7.96% 20,540,938 2032 2034 0 0 5,161,040 263,213,021 7.96% 20,951,756 2033 2035 0 0 263,213,021 7.96% 20,951,756 2034 2036 0 0 5,264,260 268,477,281 7.96% 21,370,792 2035 2037 0 0 268,477,281 7.96% 21,370,792 2036 2038 0 0 5,369,546 273,846,827 7.96% 21,798,207 2037 2039 0 0 273,846,827 7.96% 21,798,207 2038 2040 0 0 5,476,937 279,323,764 7.96% 22,234,172 2039 2041 0 0 279,323,764 7.96% 22,234,172 2040 2042 0 0 5,586,475 284,910,239 7.96% 22,678,855 '.1 2041 2043 0 0 284,910,239 7.96% 22,678,855 685 175,303,294 240 37,659,757 I 925 212,963,051 71,947,188 This financial information should be read in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report. Page 4 ) I I I 1 1 i I I ) I I ) I I I I I I DACONO ESTATES METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE OF ESTIMATED ASSESSED VALUATION (Page 2 of 2 - Continued from Page 4) AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 204: Undeveloped Residential Land Single-Family Townhome Annual Cumulative Estimated Platted& Less: Annual Planed& Less: Annual Market Market Land LAND RESIDENTIAL TOTAL Construction Collection Improved Lots Lots Actual Improved Lots Lots Actual Value of Value of Assessment ASSESSED ASSESSED ASSESSED Collection Year Year $230,000 Used Value 5130,000 Used Value Undeveloped Undeveloped Ratio VALUATION VALUATION VALUATION Year 10O0% 10O0% Land Land (See Page 4) 2005 2007 0 0 0 0 0 0 0 0 29.00% 0 0 0 2007 2006 2008 1,311,000 0 1,311.000 0 0 0 1,311,000 1,311,000 2900% 380,190 0 380,190 2008• 2007 2009 2,300,000 (1,311,000) 989,000 0 0 0 989,000 2,300,000 29.00% 667,000 1,085,716 1,752,716 2009 2008 2010 2,300,000 (2,300,000) 0 0 0 0 0 2,300,000 29.00% 667,000 3,050,290 3,717,290 2010 2009 2011 2,300,000 (2,300,000) 0 0 0 0 0 2300,000 2900% 667.000 5,032,006 5,699,006 2011 2010 2012 2,300,000 (2,300,000) 0 0 0 0 0 2,300,000 29.00% 667,000 7,153,998 7,820,998 2012 2011 2013 2,300,000 (2,300,000) 0 0 0 0 0 2,300,000 29.00% 667,000 9,215,776 9,882,776 2013 2012 2014 2,300,000 (2,300,000) 0 0 0 0 0 2,300,000 29.00% 667,000 11,503,105 12,170,105 2014 2013 2015 644,000 (2,300,000) (1,656,000) 1560,000 0 1,560,000 (96,000) 2,204,000 29.00% 639,160 13,648,179 14,287,339 2015 2014 2016 0 (644,000) (644,000) 1,560,000 (1,560,000) 0 (644,000) 1,560,000 29.00% 452,400 16,017,794 16,470,194 2016 2015 2017 0 0 0 0 (1,560,000) (1,560,000) (1,560,000) 0 29.00% 0 17,531,492 17,531,492 2017 2016 2018 0 0 29.00% 0 17,882,122 17,882,122 2018 2017 2019 0 0 29.00% 0 17,882,122 17,882,122 2019 2018 2020 0 29.00% 0 18,239,765 18,239,765 2020 2019 2021 0 29.00% 0 18,239,765 18,239,765 2021 2020 2022 0 29.00% 0 18,604,560 18,604,560 2022 2021 2023 0 29.00% 0 18,604,560 18,604,560 2023 2022 2024 0 29.00% 0 18,976,651 18,976,651 2024 2023 2025 0 29.00% 0 18,976,651 18,976,651 2025 2024 2026 0 29.00% 0 19,356.184 19,356,184 2026 2025 2027 0 29.00% 0 19,356,184 19,356,184 2027 2026 2028 0 29.00% 0 19,743,308 19,743,308 2028 2027 2029 0 29.00% 0 19,743,308 • 19,743,308 2029 2028 2030 0 29.00% 0 20,138,174 20,138,174 2030 2029 2031 0 29.00% 0 20,138,174 20,138,174 2031 2030 2032 0 29.00% 0 20,540,938 20,540,938 2032 2031 2033 0 29.00% 0 20,540,938 20,540,938 2033 2032 2034 0 29.00% 0 20,951,756 20,951,756 2034 2033 2035 0 29.00% 0 20,951,756 20,951,756 2035 2034 2036 0 29.00% 0 21,370,792 21,370,792 2036 2035 2037 0 29.00% 0 21,370,792 21370,792 2037 2036 2038 0 29.00% 0 21,798,207 21,798,207 2038 2037 2039 0 29.00% 0 21,798,207 21,798,207 2039 2038 2040 0 29.00% 0 22,234,172 22,234,172 2040 2039 2041 0 29.00% 0 22,234,172 22,234,172 2041 2040 2042 0 29.00% 0 22,678,855 22,678,855 2042 2041 2043 0 29.00% 0 22,678,855 22,678,855 2043 15,755,000 (15,755,000) 0 3,120,000 (3,120,000) 0 This financial information should be read in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report. Page 5 1 I 1 I f I I !. I I I I ) I I I 1 I I DACONO ESTATES METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE of ESTIMATED BOND DEBT SERVICE REQUIREMENTS AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2043 Series 2007 Bond Issue Dated: December L 2007 82,375,000 Issued: December I,2007 Interest Rate: 7,500% Principal payments due on Dec.1. Reduce Debt Net 2007 Outstanding Total 2007 Service By Bonds Principal Bonds Capitalized Debt Service Year Principal Coupon Interest Balance Debt Service Interest Payments Year (Sec Page 7) 2007 ].500% 0 2,3]5,000 0 0 0 2007 2008 ].500'6 178,125 2.)]5,000 178,125 (1]8,125) 0 2008 2009 7.500% 178,125 2.375,000 178.125 (178,125) 0 2009 2010 7.500% 178,125 2,375,000 178,125 0 178,125 2010 2011 50,000 7.500% 178,125 2.325,000 220,125 228,125 2011 2012 15,000 7.500% 174,375 2,310000 189,375 189,375 2012 2013 15,000 7.500% 173,250 2,295,000 188,250 188,250 2013 2014 20,000 7.500% 172,125 • 2,275,000 192,125 192,125 2014 2015 25,000 7.500% 170,625 2,250,000 195,625 195,625 2015 2016 30,000 7.500% 168,750 2.220,000 198,750 198,750 2016 2017 30,000 7.500% 166,500 2,190,000 196,500 196,500 2017 2018 35O00 7.500% 164,250 . 2,155,000 199,250 199,250 2018 ' 2019 40,000 7.500% 161,625 2,115,000 201,625 201,625 2019 2020 45,000 7.500% 158,625 2,070,000 203,625 203,625 2020 2021 50,000 7.500% 155,250 2,020,000 205,250 205,250 2021 2022 60,000 7.500% 151,500 1,960,000 211,500 211,500 2022 2023 60,000 7.500% 147,000 1900,000 207O00 207,000 2023 2024 70,000 7.500% 142,500 1,830,000 212500 212,500 2024 2025 75,000 7.500% 137,250 1,755,000 212,250 212,250 2025 2026 85,000 7.500% 131,625 1,670,000 216,625 216,625 2026 2027 90,000 7.500% 125,250 1,580,000 215,250 215,250 2027 2028 105,000 7.500% 118,500 1,475,000 223,500 223,500 2028 2029 110,000 7.500% 110,625 1,365,000 220,625 220,625 2029 2030 125,000 7.500% 102,375 1.240,000 227,375 227,375 2030 2031 135,000 7.500% 93,000 1,105,000 228,000 228,000 2031 2032 150.000 7.500% 81875 955,000 232,875 232,875 2032 2033 160,000 7.500% 71,625 795,000 231625 231,625 2033 2034 175,000 7.500% 59,625 620.000 234,625 234,625 2034 2035 190,000 7.500% 46,500 430,000 I 236,500 236,500 2035 2036 205000 7.500% 32,250 225,000 237,250 237,250 2036 20)7 225,000 7.500% 16,875 0 241,875 241,875 2037 2,3)5,000 I 3.947,250 I 6.322,250 (356,250) 5,966.000 USE OF PROCEEDS: Developer Reimbursement 1,934,610 Capitalized Interest 345,390 Interest at 2.500% Issuance Costs 95 000 $2,375,000 Note The net proceeds of the bonds will be deposited imo an escrow account Such proceeds will be released on a pro rata basis as building permits are issued. This financial information should be read in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report. Page 6 1 I 1 I I 1 I 1 I I I I ) I I I I I I DACONO ESTATES METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE OF CAPITALIZED BOND INTEREST AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2042 CALCULATION of CAPITALIZED INTEREST on SERIES 2007 BOND ISSUANCE Beginning Capitalized Interest at Disbursements Ending Date Balance Interest 2.500% To Debt Service Balance (See Page 6) (See Page 6) 12/01/2007 0 345,390 345,390 6/01/2008 345,390 4,317 (89,063) 260,645 12/01/2008 260,645 3,258 (89,063) 174,841 6/01/2009 174,841 2,186 (89,063) 87,965 12/01/2009 87,965 1,098 (89,063) 0 6/01/2010 0 0 0 0 12/01/2010 0 0 0 0 345,390 10,859 (356,250) This financial information should be read in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report. Page 7 I I 1 1 I I I I I I I I I I I I I I I DACONO ESTATES METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE of ESTIMATED BOND DEBT SERVICE REQUIREMENTS AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2043 Series 2010 Bond Issue Dated: December 1,2010 83,000,000 Issued: December 1,2010 Interest Rate: 7.500% Principal payments due on Dec.I. Reduce Debt Net 3010 Outstanding Total 2010 Service By Bonds Principal Bonds Capitalized Debt Service Year Principal Coupon Interest Balance Debt Service Interest Payments Year flee Page 91 2010 3,000,000 0 0 0 2010 2011 7.500% 225,000 3,000,000 225,000 (225,000) 0 2011 2012 7.500% 225,000 3,000,000 225,000 (225,000) 0 2012 2083 7.500% 225,000 3,000,000 225,000 225,000 2013 2014 7.500% 225,000 3,000,000 225,000 225,000 2014 2015 7.500% 225,000 3,000,000 225,000 225,000 2015 2016 10,000 7.500% 225,000 2,990,000 235,000 235,000 2016 2017 15,000 7.500% 224,250 2,975,000 239,250 239,250 2017 2018 20,000 7.500%. 223,125 2,955,000 243,125 243,125 2018 2019 20,000 7.500% 221,625 2,935,000 241,625 241,625 2019 2020 30,000 7.500% 220,125 2,905,000 250,125 250,125 2020 2021 30,000 7.500% 217,875 2,875,000 247,875 247,875 2021 2022 35,000 7.500% 215,625 2,840,000 250,625 250,625 2022 2023 40,000 7.500% 213,000 2,800,000 253,000 253,000 2023 2024 50,000 7.500% 210,000 2,750,000 260,000 260,000 2024 2025 50,000 7.500% 206,250 2,700,000 256,250 256,250 2025 2026 60,000 7.500% 202,500 2,640,000 262,500 262,500 2026 2027 65,000 7.500% 198,000 2,575,000 263,000 263,000 2027 2028 70,000 7.500% 193,125 2,505,000 263,125 263,125 2028 2029 80,000 7.500% 187,875 2,425,000 267,875 267,875 2029 2030 90,000 7.500% 181,875 2,335,000 271,875 271,875 2030 2031 95,000 7.500% 175,125 2,240,000 270,125 270,125 2031 2032 110,000 7.500% 168,000 2,130,000 271,000 278,000 2032 2033 115,000 7.500% 159,750 2,015,000 274,750 274,750 2033 2034 135,000 7.500% 151,125 1,880,000 286,125 286,125 2034 2035 140,000 7.500% 141,000 1,740,000 281,000 281,000 2035 2036 160,000 7.500% 130,500 1,580,000 290,500 290,500 2036 2037 170,000 7.500% 118,500 1,410,000 288,500 288,500 2037 2038 435,000 7.500% 105,750 975,000 540,750 540,750 2038 2039 465,000 7.500/. 73,125 510,000 538,125 538,125 2039 2040 510,000 7.500% 38,250 0 548,250 548,250 2040 3,000,000 I ' 5,526,375 I 8,526,375 (450,000) 8,076,375 USE OF PROCPEDS: Developer Reimbursement 2,443,718 Capitalized Interest 436,282 Interest at 2.500% Issuance Costs 120,000 $3,000,000 Note The net proceeds of the bonds will be deposited into an escrow account Such proceeds will be released on a pro rate basis as building permits are issued. This Financial information should be read in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accounts( Report. Page 8 1 I I I I 1 I 1 I I I I 1 I I I 1 I I DACONO ESTATES METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE OF CAPITALIZED BOND INTEREST AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2042 CALCULATION of CAPITALIZED INTEREST on SERIES 2010 BOND ISSUANCE Beginning Capitalized Interest at Disbursements Ending Date Balance Interest 2.500% To Debt Service Balance (See Page 8) (See Page 8) 12/01/2010 0 436,282 436,282 6/01/2011 436,282 5,454 (112,500) 329,236 12/01/2011 329.236 4,115 (112,500) 220,851 6/01/2012 220,851 2,761 (112,500) 111,112 12/01/2012 111,112 1,388 (112,500) 0 6/01/2013 0 0 0 12/01/2013 0 0 0 436,282 13,718 (450,000) This financial information should be read in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report. Page 9 1 I 1 I I 1 I 1 I I I I I I I I I I I DACONO ESTATES METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE of ESTIMATED BOND DEBT SERVICE REQUIREMENTS AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2043 Series 2013 Bond Issue Dated: December 1,2013 13,100,000 Issued: December 1,2013 Interest Rate: 1.500% Principd payments due on Dec.I. Net 2011 Outstanding Bonds Principal Debt Service Veer Principal Coupon Interest Balance Payments Year 2013 3,100,000 0 2013 2014 7.500% 232,500 3,100,000 232,500 2014 2015 7.500% 232,500 1,100,000 212,500 2015 2016 7.500% 232,500 1,100,000 232,500 2016 2017 7.500% 232,500 3,100,000 212,500 2017 2018 7.500% 232,500 3,100,000 232,500 2018 2019 7.500% 232,500 3,100,000 212,500 2019 2020 7.500% 232,500 3,100,000 232,500 2020 2021 7.500% 232,500 3,100,000 232,500 2021 2022 5,000 7.500% 232,500 3,095,000 237,500 2022 2023 5,000 7.500% 232,125 3,090,000 217,125 2023 2024 10,000 7.500% 231,750 3,080,000 241,750 2024 2025 15,000 7.500% 231,000 3,065,000 246,000 2025 2026 20,000 7.500% 229,875 3,045,000 249,875 2026 2027 20,000 7.500% 228,375 3,025,000 248,375 2027 2028 30,000 7.500% 226,875 2,995,000 256,875 2028 2029 30,000 7.500% 224,625 2,965,000 254,625 2029 2030 35,000 7.500% 222,375 2,930,000 257,375 2030 2031 40,000 7.500% 219,750 2,690,000 259,750 2031 2032 45,000 7.500% 216,750 2,845,000 261,750 2032 2033 55,000 7.500% 213,375 2,790,000 268,375 2033 2034 60,000 7.500% 209,250 2,730,000 269,250 2034 2035 65,000 7.500% 204,750 2,665,000 269,750 2035 2036 75,000 7.500% 199,875 2,590,000 274,875 2036 2037 80,000 7.500% 194,250 2,510,000 274,250 2037 2038 90,000 7.500% 188,250 2,420,000 278,250 2038 2039 100,000 7.500'6 181,500 2,320,000 281,500 2039 2040 115,000 7.500% 174,000 2,205,000 289,000 2040 2041 670,000 7.500% 165,175 1,515,000 835,375 2041 2042 740,000 7.5006 115,125 795,000 855,125 2042 2043 795,000 7.500% 59,625 0 854,625 2043 1,100,000 f 6,261 332 I 9,361,375 USE OF PROCPED$ Developer Reimbursement 2,976,000 Issuance Costs 124,000 51,100,000 Note. The net proceeds of Me bonds will be deposited into an escrow eccount Such proceeds will be released one pro rata basis as building permits are issued. This financial information should be read in connection with the accompanying Summery of Significant Forecast Assumptions and Accounting Policies end Accountant's Report Page 10 DACONO ESTATES METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES August 30,2005 NOTE 1) NATURE AND LIMITATION OF FORECAST This forecast of financial information is for the purpose of a financial analysis of the proposed financial plan of Dacono Estates Metropolitan District(the "District") (in the Formation Stage of Development), located in the City of Dacono (the "City") in Weld County, Colorado. The forecast displays how the proposed facilities and services are currently anticipated to be provided and financed. _ This financial forecast presents, to the best knowledge and belief of the Petitioners for the Formation of the District (the "Petitioners"), the District's expected cash position and results of cash receipts and disbursements for the forecasted periods. Accordingly, the forecast reflects Management's judgment, as of the date of this forecast, the expected conditions within the District and the District's expected course of action. The assumptions disclosed herein are those that Management believes are significant to the forecast, however, they are not all-inclusive. There will usually be differences between forecasted and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. The forecast is expressed in terms of 2005 dollars, with the only adjustments for inflation as follows. The market values of residential properties are forecasted to increase 2% per year, starting in 2006 through build-out. The market values of residential properties are forecasted to increase 2% biennially pursuant to the reassessment of property required by State statute. The residential assessment ratio is assumed to remain constant for collection year 2009 and beyond, based upon information as explained in Note 5. The assessment ratio for raw ground and improved lots is assumed to remain at a constant 29%for the entire forecast period in accordance with historical trends. Administrative costs in the General Fund are assumed to increase by 2% per year beginning in 2007. NOTE 2) ORGANIZATION The Petitioners are in the process of organizing the District as a quasi-municipal corporation and political subdivision of the State of Colorado. The District will be governed pursuant to provisions of the Colorado Special District Act (Title 32). The District will operate under a service plan approved by the City. The District contains approximately 226.627 acres of real property located entirely in Weld County, Colorado, within the City. The District is being established primarily to provide financing for streets, street lighting, traffic and safety controls, water, landscaping, storm drainage, and park and recreation improvements needed for the area. Page 11 DACONO ESTATES METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES August 30,2005 NOTE 2) ORGANIZATION (continued) The operation and maintenance of these services and facilities, except as expressly provided by the Service Plan, is anticipated to be provided by the City or other entities, and not by the District. However, tract landscaping improvements may be retained by the District for operation and maintenance. If retained by the District, the District may contract with a non-profit homeowners' association for operation and maintenance of these improvements and facilities. As set forth in this forecast, the District is forecasted to issue $8,475,000 of debt with three bond issues. However,the Service Plan may have a higher debt amount to allow for an under estimate of valuations in this forecast. Formation of the District is intended to be timed to allow for the proper legislative,judicial and election process to be completed in order for the District's electors to be able to vote for the authorization of debt and TABOR questions in November 2005, and to certify tax levies for tax collections in 2008. The Petitioners expect the favorable approval at the election since they constitute the majority of the current eligible electors within the proposed District's boundaries. NOTE 3) PETITIONERS FOR FORMATION The Petitioners are landowners, principals or employees of the major property owner of the land included within the boundaries of the District. The major landowner, as well as, the developer of the District is Dacono Estates, LLC, a Delaware limited liability company (the"Developer"). The Developer has provided the information regarding the number of units estimated to be built each year and the initial sales values for the residential properties to be developed in the District, based upon their knowledge and experience in developing other properties. The Developer anticipates that sales values will be increased by 2% for each year beyond 2005. Platted and improved lot values were estimated to be approximately 10% of residential market value (see Schedule of Estimated Assessed Valuation). NOTE 4) BASIS OF ACCOUNTING The basis of accounting for this forecast is the cash basis, which is a basis of accounting that is different from that allowed by the generally accepted accounting principles under which the District will prepare its financial statements. Page 12 DACONO ESTATES METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES August 30,2005 NOTE 5) PROPERTY TAXES The primary source of revenue or cash receipts will be ad valorem property taxes. Property taxes are to be determined annually by the District's Board of Directors and set by County Commissioners as to rate or levy based upon the assessed valuation of the property within the District. The Weld County Assessor determines the assessed valuation. The levy is expressed in terms of mills. A mill is 1/1,000 of the assessed valuation. The forecast assumes that the District will be able to set its initial mill levy at 40 mills for collection in 2008, for the combined _ purposes of debt service and administration. The initial mill levies for the General Fund and the Debt Service Fund are expected to be set at 5 mills and 35 mills, respectively, and both are reduced to lower levels in future years as displayed in the forecast. The Gallagher Amendment states that residential assessed values Statewide must be approximately 45% of total assessed values. When the market values of residential property increase faster than the values of nonresidential property, the residential assessment ratio must decline to keep the 45 percent/55 percent ratio. According to information as set forth in the Colorado Legislative Council Staff Forecasts entitled "Assessed Value and Property Tax Projections" issued on December 20, 2004, the residential assessment ratio is projected to remain at the current 7.96% in 2005 (for collection in 2006), and then to decline to 7.62% in 2007, and 7.39% in 2009. The projections of the Legislative Council Staff are estimates only, do not have the force of law, and may or may not occur as projected. This forecast has included the current residential assessment ratio of 7.96% effective for collections in 2009 and throughout the term of the forecast period, since it is assumed that the District's Board will increase the mill levy, to maintain a mill levy that produces tax revenue in relation to current assessed valuation equivalent to revenue generated by the initial levy of 40 mills as forecasted for collection year 2008 ("Gallagher adjustment"). Per the District's Service Plan, the Mill Levy cap for the combined purposes of debt service and administration is 50 mills, as adjusted by the Gallagher adjustment. The assessed valuation for the District is dependent upon the build-out schedule of the residential properties within the District. Management of the District has based the estimate of build-out on their forecasted build-out schedule. The forecasted development build-out schedule and conversion to assessed valuation is presented as a Schedule of Estimated Assessed Valuation. The assessed valuation rate for raw ground and improved lots is 29%until a home is constructed. All residential property has been assumed to be assessed at the residential property rates as explained above. Page 13 DACONO ESTATES METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES August 30,2005 NOTE 5) PROPERTY TAXES (continued) Increases to valuation for platted and partially finished lots and for the development of infrastructure within the District for improved lots held for build-out are included in the forecasted assessed valuation. No assessed valuation has been assumed for State Assessed property that may be owned by public utilities within the District. The beginning assessed value of the land totaling 226.627 acres, which constitutes the District, has been deemed to be immaterial for purposes of the forecast. The property taxes resultant from the above mill levy and assessed valuation have been reduced for the Weld County Treasurer's 1.5% fee for collection of the taxes, and further reduced by 0.5%to allow for uncollectible taxes. NOTE 6) SPECIFIC OWNERSHIP TAXES Specific ownership taxes are set by the State and collected by the County Treasurer,primarily on vehicle licensing within the County as a whole. The specific ownership taxes are allocated by the County Treasurer to all taxing entities within the County. The forecast assumes that the District's share will be equal to approximately 10% of the total property taxes collected by the General and Debt Service Funds. NOTE 7) FACILITIES FEE The forecast anticipates that the Board of Directors will set a facilities fee, to be collected at the time of a request for a building permit from the builder, based upon $1,200 for each single- family residential unit and $800 for each townhome residential unit. NOTE 8) DEVELOPER ADVANCES The forecast assumes that the Developer will advance funds needed for organizational and construction costs to the District (see Note 12). To the extent that bond proceeds are available for organizational and construction payments in any year, the Developer advance would be reduced accordingly. In addition, to the extent that there are surplus cash balances that can be applied towards reducing this Developer advance without creating future cash deficits, the Developer advances will be reduced accordingly. Page 14 DACONO ESTATES METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES August 30,2005 NOTE 8) DEVELOPER ADVANCES (continued) The forecast does not display cash receipts for Developer advances for construction costs and bond proceeds available for construction costs nor cash disbursements for construction costs. Accordingly, the forecast assumes that any Developer advances for construction will be repaid from bond proceeds and that construction costs will be funded by Developer advances and / or bond proceeds. Any Developer advances, which cannot be reimbursed, will be treated as Developer contributions. Under the terms of the Service Plan, the District may issue construction financing notes to the Developer and such notes may not bear interest. NOTE 9) DEVELOPER CONTRIBUTIONS The forecast assumes that the Developer will contribute funds to the District for administrative costs as shown on the summary page for the General Fund of the forecast. NOTE 10) INTEREST INCOME The forecast includes interest income earned on monies that are forecasted to be on deposit or invested by the District at the prior year-end at an interest rate of 2%. Additional interest earned on deposits from bond proceeds, for payment of bond interest expense during an initial period (capitalized interest), has been included in the debt service schedule at 2.5%. The calculation of this interest is also shown as separate Schedules of Capitalized Bond Interest. NOTE 11) ADMINISTRATIVE DISBURSEMENTS Administrative expenditures include the services necessary to maintain the District's administrative viability such as legal, accounting and audit, general engineering, insurance, banking, meeting expense, and other administrative expenses. Administrative costs have been included in the forecast at $40,000 in 2006. Beginning in 2007, these disbursements have been increased for inflation by 2%per year throughout the term of the forecast. These administrative services are necessary as long as bonds are outstanding throughout the life of the District. NOTE 12) INFRASTRUCTURE IMPROVEMENTS The estimated cost of the capital infrastructure improvements to be funded under the Service Plan is $11,356,182, as expressed in 2005 dollars. The forecast assumes that the Developer will advance funds for all infrastructure costs and be reimbursed from bond proceeds to the extent bonds can be issued, which may be less than the total eligible costs(see Note 8). Page 15 DACONO ESTATES METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES August 30,2005 NOTE 12) INFRASTRUCTURE IMPROVEMENTS (continued) _ The capital infrastructure costs per the engineering estimate exceed the amount that can be reimbursed to the Developer under this Plan. Management expects that the District will allow the Developer to: either advance funds to the District; or to actually construct the improvements under the District's supervision, for reimbursement by the District upon completion of the improvements to the extent bondable; or to contribute funds to the District, should costs exceed the District's capacity for repayment of such costs. The reimbursement of any additional costs is subject to the District's authorized indebtedness and other revenue available to the District. The amount of infrastructure costs not bondable within the limits of the proposed Service Plan would remain a responsibility of the Developer. There may be additional construction costs in the future. NOTE 13) DEBT SERVICE The District anticipates issuing general obligation bonds on December 1, 2007 in the amount of $2,375,000, on December 1, 2010 in the amount of$3,000,000, and on December 1, 2013 in the amount of $3,100,000. The proceeds of such debt will be used for issuance costs, capitalized interest for the Series 2007 and Series 2010 bonds, and to fund the cost of capital infrastructure improvements or to reimburse the Developer for the advancement of those funds, to the extent possible (see Note 8). The bonds are assumed to bear interest at an estimated rate of 7.50%. The bond interest is payable semi-annually on June 1 and December 1, with annual principal payments on December 1 of each year. The bonds anticipate starting interest repayments on June 1, 2008 for the Series 2007 Bonds, on June 1, 2011 for the Series 2010 Bonds, on June 1, 2014 for the Series 2013 Bonds and per the scheduled maturities are payable over 30-year periods,with final payments on December 1, 2037,2040 and 2043,respectively. Prior to the date the Debt to Assessed Ratio is equal to 50% or less, Pledged Revenue that is not needed to pay debt service on the Series 2007 Bonds, Series 2010 Bonds and Series 2013 Bonds in any year will be deposited to and held in the Surplus Fund, up to a maximum amount of $847,500. The forecast assumes that the Debt to Assessed Ratio will be less than 50% in 2017, at which time the Surplus Fund will be terminated and any moneys therein applied to any legal purpose of the District. Page 16 DACONO ESTATES METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES August 30,2005 NOTE 13) DEBT SERVICE (continued) Assumptions related to debt principal amounts, bond interest rates, issuance costs, capitalized interest amounts and related interest earned at 2.5%, and other related debt service costs for the proposed Series 2007 Bonds, Series 2010 bonds and Series 2013 bonds have been provided to Management by Kirkpatrick Pettis, the proposed underwriter of the proposed bond issuances of the District. This information should be read in connection with the accompanying Accountant's Report and forecast of financial information. Page 17 ® DRM REAL ESTATE ADVISORS,LLC (luuulling.Rcs.carrh S \aualinn August 22, 2005 Ms. Jennifer L. Gruber,Esq. Miller, Gruber&Rosenbluth,LLC 700 17th Street Denver,Colorado 80202 and • City of Dacono Town Planner 512 Cherry Avenue Dacono,Colorado 80514 Re: The Proposed Dacono Estates Residential Development (Proposed residential subdivision development containing 685 single-family lots and 240 townhome units) Near WCR#11 and WCR#8 Dacona, Colorado Dear Ms. Gruber: I was engaged by Miller, Gruber & Rosenbluth, LLC to prepare a residential market analysis for the above referenced property for development planning. Included in the study, I have made an estimate of the projected absorption for the development based on historical and projected trends for the area. Based on the analysis presented within this market study,I have projected a rate of absorption for the subject's proposed 685 single-family lots to be in the area of 70 to 80 lots annually. Relative to the subject's 240 townhome units, I have projected an annual rate of absorption of 100 to 110 lots/units annually. The rate of absorption is based on historical and projected trends for the area as well as the location of the property and the projected size of the lots to be marketed at the property. It should be noted that the projections relating to aborptions differ from that of the financing plan due to the fact that our estimate of absorption is based on current supply and demand levels, which are projected to increase in the future. In our research, we make projections based soley on current data,and rely only nominally on trended market projections. Please feel welcome to call anytime at the numbers as they appear below if you have any questions. Resp ctfully submitted, AL ESTATE ADVISORS,LLC Derek R.Maunsell,MM (970)214-8291 -Direct Principal Certified General Appraiser-State of Colorado CG40002154(12/31/07) 4025 Automation Way, Unit F4 • Fort Collins, Colorado 80525 Phone (970) 267-2900 • Fax (970) 530-0799 August 22, 2005 City Council City of Dacono Post Office Box 186 Dacono, Colorado 80514 RE: DRM Real Estate Advisors,LLC Analysis of Absorption Potentials Dacono Estates development Dear City Council: We have reviewed the above-referenced study conducted by DRM Real Estate Advisors, LLC and support its findings. The absorption rates reflected in the Analysis of Absorption Potentials are slightly lower than projected in the financing plan and incorporated into the Service Plan because those rates are based upon current market rates. Based on our own projections, being heavily involved in the north front range real estate market, our experience tells us that the rates of absorption in the future will increase to correspond with those projected in the financing plan. Although it is impossible to predict for certain what any real estate market will do, we feel that the shortage of housing in the north, coupled with a strong Colorado economy and the continued growth of infrastructure in the northern corridor suggest that growth will continue to accelerate along I-25. We think that Dacono in particular will experience significant growth as it is strategically located in the transportation corridor of I-25 and HWY 52. We feel that Dacono is entering into a new growth phase and the trends in housing absorption will rapidly shift upward. Accordingly, the Analysis of Absorption Potentials prepared by DRM Real Estate Advisors, LLC satisfactorily confirms our projections and we request that it be admitted as a part of the Dacono Estates Metropolitan District formation application. Please do not hesitate to call with any questions you have about this correspondence. Very truly yours, DACONO ESTATES, LLC, a Delaware limited liability company By: FS Dacono Estates, LLC, Manager, a Colorado limited liability company By: Stephen . Foley,6kager Dacono Estates/Service Plan JLGO723 0809.0003 EXHIBIT H Underwriter's Letters Kirkpatrick Pettis A Division of D.A.Davidson&Co. P i xed Income Capita Markets August 22,2005 Karen Cumbo Administration Town of Dacono 512 Cherry Street,Box 186 Dacono, CO 80514 RE: Proposed Dacono Estates Metropolitan District To Whom It May Concern: As part of the service plan approval process, you have asked about the relationship between the investment bankers and the proposed Dacono Estates Metropolitan District. We are engaged with the petitioners of the proposed District as described by the attached Letter of Intent. We have the intention of serving as underwriters for the District's voter authorized debt once sufficient credit support can be identified based on assessed value or guarantees provided by the landowners. The structure represented in the financing plan involves non-rated bonds issued to a third party, which we believe will be marketable based on the growth assumptions also included in this plan. In this example, the debt would be sold to institutional investors and secured by an escrow of bond proceeds, which would be released by lot as reimbursement to developers upon receipt of a building permit. You also requested an explanation of the level of credit risk associated with the types of financing we are considering for this District. As with most start-up special Districts, this District expects to market bonds to third parties to raise capital for infrastructure before the entire project is complete. The level of risk taken by a bondholder and the interest rate required for the financing decrease as development occurs. Our recent special district underwritings vary, from bonds sold at 8% with land in the District sold to builders and no homes constructed, to refunding bonds issued with most of the homes built at interest rates of 5% with "AAA". rated insurance. In the case of"AAA" rated, insured bonds, the underlying Districts generally have debt/AV ratios of 50%or less. Because the financing in this District is intended to pay for public infrastructure, we issue bonds as close to the time the infrastructure is needed as possible. While this does increase the bondholders' risk, the bondholders understand that risk and are compensated in the interest rate on the bonds. With regard to the City's risk, we know of no example where a City was implicated in special district default and see no legal argument for such implication. Kirkpatrick Pettis A Division of D.A.Davidson&Co.Fixed Income Capital Markets 1600 Broadway,Suite 1100•Denver,Colorado 80202-4922•(303)764-6000•(800)942-7557•Fax(303)764-5770 www.dadavidson.com•www.kpsp.com D.A. Davidson & Co. Member SIPC In the process of underwriting bonds for a non-rated residential metropolitan district, one key criterion is the level of homebuilder activity. Methods of evaluating such activity include contracts for sale of land in the District to builders, closing of land in the District to builders, model home construction and home sales activity, building permits and certificates of occupancy. This Service Plan includes an escrow mechanism with release of bond proceeds based on building permits in the District. We hope this letter helps to clarify the financing model represented in the financing plan and the current market for special district bonds. Please call if you have any questions or require further clarification. Sincerely, _ -22asnk. Eo S e1 R. Senior Vice President Vice President Kirkpatrick Pettis Dh is on�i U.A.Davidson&Co. Piled Income Capital Market Kirkpatrick Pettis A Division of DA.Davidson&Co. Fixed Income Capital Markets March 30, 2005 Petitioners for Dacono Estates Metropolitan District c/o Steve Foley F.S.I. Development Inc. 6321 S. Newport Court Englewood, CO 80111 RE: Letter of Intent—Proposed Dacono Estates Metropolitan District Dear Petitioners: The petitioners are in the process of organizing the proposed Dacono Estates Metropolitan District (the "District"). Once the District is organized it is anticipated that the District will authorize and issue bonds (the `Bonds"). The Petitioners desire to engage the services of Kirkpatrick Pettis, a Division of D.A. Davidson & Co. Fixed Income Capital Markets, its successors or assigns ("Kirkpatrick Pettis") regarding the creation of the District and the process leading to the sale of those bonds. Section 1. Arrangements Before Sale. There are several arrangements, which must be made before any sale of bonds can occur. These arrangements include, but are not limited to: Developing a Plan of Finance. In concert with bond counsel and District management, Kirkpatrick Pettis will prepare a plan of expected development, future capital improvements, revenues, expenses, and debt repayment. Once such a plan is prepared and approved by the Proposed Board, various debt structures can be analyzed within the plan to determine what will work best for the District. Structuring. Once a financing structure has been selected by the Proposed Board, the terms of the debt (such as the sources of payment, the nature of the security, maturity schedule, the rights of redemption prior to maturity, etc.) must be determined, taking into account both the interests of the District and the expectations of investors. Legal Counsel. Legal counsel will be selected and engaged by the District to prepare the legal proceedings necessary to authorize the debt, to assist in the preparation of disclosure documents necessary to sell the securities, and to render certain approving opinions when the securities are delivered. All fees and expenses Kirkpatrick Pettis A Division of D.A.Davidson&Co.mixed income Capital Markets 1600 Broadway.Suite 110O • Denver,Colorado 80202-4922 • (303) 764-6000 . (800) 942-7557 • Fax (303) 764-6002 www.dadavidson-com • wvrw.kosp.com D.A. Davidson & Co. member SIPC Letter of Engagement Dacono Estates Metropolitan District Page 2 of 4 of legal counsel selected hereunder shall be paid only from the proceeds derived upon sale of the Bonds. Ratings. The ratings which may be obtained for the bonds are likely to have a significant effect on the rates of interest at which the bonds can be sold. If it is determined to be in the District's best interest to obtain these ratings, Kirkpatrick Pettis will assist the District in preparing and submitting applications to the rating agencies along with detailed information about the District, the debt and any credit enhancement. Credit Enhancement. By providing investors with a guarantee of timely payments on the debt, for even a limited time period, the purchase of credit enhancement can produce a net reduction in financing costs. Kirkpatrick Pettis will assist the District in investigating the availability of bond insurance, letters of credit _ or other forms of credit enhancement and assist the District in determining the cost effectiveness of these products. Disclosure to Investors. In connection with the issuance of bonds by the District and the sale and delivery of securities to ultimate investors, material information about the District and the transaction must be compiled in a disclosure document for distribution to prospective purchasers. As set forth above under Legal Counsel, the District will engage the services of counsel to assist in the preparation of such disclosure documents and advise the District and Underwriter about sales practices, regulatory requirements, and security matters. If disclosure counsel is engaged as the District's counsel, Kirkpatrick Pettis, will expect to receive the benefit of their 10(b)-5 opinion as well. In contemplation of submitting an offer to underwrite the bonds, we will assist the District in making these arrangements. By accepting this letter and accepting our assistance in making these arrangements, the District will not incur any obligation except to pay from the Bond proceeds the expenses as provided in Sections 4 and 6 of this letter. Our active participation in making these arrangements should not and cannot be construed by the District as a promise to underwrite the bonds or as an assurance that the bonds can be sold. Section 2. Underwriting. At such time as the arrangements for the sale of the securities have been successfully completed, it is our intention to submit for consideration by the Petitioners our offer to underwrite the bonds. Our offer will be submitted in the form of a bond purchase agreement and will set forth terms of the purchase such as the rates of interest, the amount of any original issue premium or discount, our underwriting compensation (not to exceed 2 percent of the principal amount of the bonds), and the date and conditions for delivery of the bonds. Until the District accepts our offer, there will be no obligation for this firm to purchase the bonds from the District. In consideration for our Kirkpatrick Pettis A Disision of D.A.Davidson&Co. Fixed Income Capital Markets Letter of Engagement Dacono Estates Metropolitan District Page 3 of 4 work performed pursuant to Section 1, above, the District agrees that it will not consider other underwriting proposals unless Kirkpatrick Pettis has first declined to underwrite the transaction on terms and conditions acceptable to the District. Section 3. Remarketing. In the event that the District issues bonds that are remarketed within their term, the District will have to engage a remarketing agent qualified to remarket the bonds on each remarketing date. If an underwriting agreement is reached between Kirkpatrick Pettis and the District, Kirkpatrick Pettis will submit an offer to serve as remarketing agent to the District for compensation not to exceed .25 percent of the amount of bonds annually remarketed. In further consideration for our work performed pursuant to Section 1, above, the District agrees that as long as Kirkpatrick Pettis is the lead underwriter, it will provide Kirkpatrick Pettis with the option to submit a proposal to act as remarketing agent and that it will not consider other proposals to act as remarketing agent unless and until the Kirkpatrick Pettis proposal for remarketing has been rejected. Section 4. Payment of Expenses. Expenses will be incurred to make the arrangements for the sale of the bonds before their delivery and the receipt of proceeds by the District but such expenses will not be obligations of the District unless advance authorization has been obtained from the District. All of the expenses incurred in connection with the authorization, sale, and delivery of the bonds, including rating application, letter of credit fees and related expenses, insurance premiums, bond, disclosure and underwriter's counsel and our out-of-pocket expenses for any travel outside of Colorado shall be paid only from the proceeds derived upon sale of the Bonds. Section 5. Not an Offer to Buy. This letter of intent is not an offer to purchase or a guarantee that we will make an offer to purchase the District's bonds in the future. Our offer to purchase, if made, will only be made by a bond purchase agreement prepared by our counsel and reviewed by the District and its counsel after the successful conclusion of the pre-sale arrangements described in Section 1 and the completion of other preliminary matters. This letter serves to summarize the steps we hope will lead to an underwriting of bonds at a future date at which time both Kirkpatrick Pettis and the District will incur and assume additional obligations as set forth in the bond purchase agreement. Section 6. Private Placement of Debt. If the District determines that a private placement of debt to developer or other parties would be in its best interest, the District agrees it will utilize the services of Kirkpatrick Pettis as an advisor for a fee not to exceed 1% of the debt distributed. Section 7. Term of Letter Agreement. This letter agreement shall remain in full force and effect until such time as the petitioners notify Kirkpatrick Pettis in writing of their intent to terminate this letter agreement, provided that any such action or notice shall provide no less than 30 days notice of such termination and such notice will include a breakup fee owed to Kirkpatrick Pettis for services rendered. Prior to the approval of a Kirkpatrick Pettis A Davison of D.A.Davidson&Co. Fixed Income Capital Mai kets Letter of Engagement Dacono Estates Metropolitan District Page 4of4 Service Plan this break up fee shall be $20,000. After such approval, the break up fee shall increase to $50,000. Kirkpatrick Pettis may resign as investment banker to the Districts by providing written notification with no less than 30 days notice to the petitioners. Section 8. Acceptance. The petitioners or other authorized officers of the developer may indicate their desire to proceed with the delivery of these investment banking services upon the basis set forth in this letter by executing one copy of this letter and returning it to us. Respectfully submitted, Kirkpatrick Pettis, a Division of D.A. Davidson & Co. Fixed Income Capital Markets Thomas R. ishop S el R. Senior Vice President Vice President ACCEPTED this 40=7' day of April 2005. Proposed Dacono Estates Metropolitan District %zedOfflcej Kirkpatrick Pettis A Division of DA.Davidson&Ca Fixed Income Capital Mar:cats EXHIBIT I Legal Counsel Letter Miller, Gruber& Rosenbluth, LLC ATTORNEYS AT LAW Dianne D.Miller* wwwmgrlawfirm.com Jennifer L.Gruber* Telephone: (303)285-5320 Monica A.Rosenbluth 700 17th Street,Suite 2200 Denver,Colorado 80202 Facsimile: (303)285-5330 *Admitted in Colorado and New Mexico August 22, 2005 City of Dacono Post Office Box 186 Dacono, Colorado 80514 RE: Organization of Dacono Estates Metropolitan District This firm has acted as counsel to the Petitioners in connection with the organization of the Dacono Estates Metropolitan District (the "District"). Pursuant to the requirements of V.m. of the Service Plan for the District, this letter confirms that the petition for organization of the District filed with the City on May 10, 2005, the Service Plan for the District, as approved on August 22, 2005, and the notice, hearing and other procedures in connection with the approval of the Service Plan, have met the requirements of the Special District Act, §§ 32-1-101, et seq., C.R.S., and that the provisions of the Service Plan, including, without limitation, provisions as to the structure and terms of the District's bonds, fees and revenue sources, are consistent with applicable provisions of titles 11 and 32, C.R.S., and other applicable law. Please be advised, however, that this firm has not been engaged as bond counsel to the District, nor will this firm serve as bond counsel at any time for the District. This letter does not purport to offer any opinion of the type customarily required to be given by bond counsel with regard to any bond transaction of the District. This letter is limited to the use of the addressee as set forth above, and may not be relied upon by other parties or in connection with any future sale, resale or transfer of bonds and may be relied upon only as stated herein. This letter may not be used, quoted or referred to, in whole or in part, for any other purpose without the prior, written consent of the fen Very truly yours, MILLER, GRUBER&ROSENBLUTH, LLC CAti( ctti [th5, t Dacono Estates\Service Plan ILGI555 0809.0003 EXHIBIT J Part I- Developer Indemnity Letter Part II -District Indemnity Letter August 22, 2005 City of Dacono Post Office Box 186 Dacono, Colorado 80514 RE: Dacono Estates Metropolitan District Ladies and Gentlemen: This Indemnity Letter (the "Indemnity Letter") is delivered by the undersigned Dacono Estates, LLC, a Delaware limited liability company ("Dacono Estates") in order to induce the City of Dacono (the "City")to approve the Service Plan, including all amendments heretofore or hereafter made thereto (the "Service Plan") for the Dacono Estates Metropolitan District (the "District"). In consideration of the City's approval of the Service Plan, Dacono Estates, for and on behalf of itself and its transferees, successors and assigns, represents, warrants, covenants and agrees to and for the benefit of the City as follows: 1. Dacono Estates hereby waives and releases any present or future claims it might have against the City or the City's elected or appointed officers, employees, agents or contractors in any manner related to or connected with the Service Plan or any action or omission with respect thereto. Dacono Estates further hereby agrees to indemnify and hold harmless the City and the City's elected and appointed officers, employees, agents and contractors, from and against any and all liabilities resulting from any and all claims, demands, suits, actions or other proceedings of whatsoever kind or nature made or brought by any third party, including attorneys' fees and expenses and court costs, which directly or indirectly or purportedly arise out of or are in any manner related to or connected with any of the following: (a) the Service Plan or any document or instrument contained or referred to therein; or (b) the formation of the District or any actions or omissions of Dacono Estates, the District, the City or any other person or entity in connection with the District, including, without limitation, any bonds or other financial obligations of the District or any offering documents or other disclosures made in connection therewith. Dacono Estates further agrees to investigate, handle, respond to and to provide defense for and defend against, or at the City's option to pay the attorneys' fees and expenses for counsel of the City's choice for any such liabilities, claims, demands, suits, actions or other proceedings. It is understood and agreed that the City does not waive or intend to waive the monetary limits (presently $150,000 per person and $600,000 per occurrence) or any other rights, immunities and protections provided by the Colorado Governmental Immunity Act, §§ 24-10-101, et seq., C.R.S., as from time to time amended, or otherwise available to the City, its officers or its employees. 2. Dacono Estates hereby consents to the City Disclaimer Statement contained in Exhibit L of the Service Plan, acknowledges the City's right to modify the City Disclaimer Statement, and — waives and releases the City from any claims Dacono Estates might have based on or relating to the use of or any statements made or to be made in such City Disclaimer Statement (including any modifications thereto). 3. Dacono Estates hereby represents and warrants to the City that it will be an accredited investor if and when it acquires any construction financing notes, and that Dacono Estates and its controlled affiliates will be accredited investors if and when they acquire any Developer Bonds (all as defined and as further provided in the Service Plan). 4. Dacono Estates believes and represents that the assumptions, projections and forecasts contained in the District's financial plan (Article V and Exhibit G of the Service Plan) are reasonable. 5. It is understood and agreed, and Dacono Estates hereby expressly acknowledges, that the City, in acting to approve the Service Plan, has relied upon the provisions of this Indemnity Letter. 6. This Indemnity Letter has been duly authorized and executed on behalf of Dacono Estates. Very truly yours, DACONO ESTATES, LLC, a Delaware limited liability company By: FS Dacono Estates, LLC, Manager, a Colorado limited liability company ByStephen��,e Foley, anager , 2005 (Date of Organizational Meeting) City of Dacono Post Office Box 186 Dacono, Colorado 80514 RE: Dacono Estates Metropolitan District Ladies and Gentlemen: This Indemnity Letter (the "Indemnity Letter") is delivered by the Dacono Estates Metropolitan District (the "District") in order to comply with the Service Plan, including all amendments heretofore or hereafter made thereto (the "Service Plan") for the District. In consideration of the City's approval of the Service Plan, the District, for and on behalf of itself and its transferees, successors and assigns, represents, warrants, covenants and agrees to and for the benefit of the City as follows: 1. The District hereby waives and releases any present or future claims it might have against the City or the City's elected or appointed officers, employees, agents or contractors in any manner related to or connected with the Service Plan or any action or omission with respect thereto. To the fullest extent permitted by law, the District hereby agrees to indemnify and hold — harmless the City and the City's elected and appointed officers, employees, agents and contractors, from and against any and all liabilities resulting from any and all claims, demands, suits, actions or other proceedings of whatsoever kind or nature made or brought by any third party, including attorneys' fees and expenses and court costs, which directly or indirectly or purportedly arise out of or are in any manner related to or connected with any of the following: (a) the Service Plan or any document or instrument contained or referred to therein; or (b) the formation of the District or any actions or omissions of the District, the City, Dacono Estates, LLC, a Delaware limited liability company ("Dacono Estates"), or any other person or entity in connection with the District, including, without limitation, any bonds or other financial obligations of the District or any offering documents or other disclosures made in connection therewith. The District further agrees to investigate, handle, respond to and to provide defense for and defend against, or at the City's option to pay the attorneys' fees and expenses for counsel of the City's choice for, any such liabilities, claims, demands, suits, actions or other proceedings. It is understood and agreed that neither the District nor the City waives or intends to waive the monetary limits (presently $150,000 per person and $600,000 per occurrence) or any other rights, immunities and protections provided by the Colorado Governmental Immunity Act, §§ 24-10-101, et seq., C.R.S., as from time to time amended, or otherwise available to the City, the District, its officers, or its employees. 2. The District hereby consents to the City Disclaimer Statement contained in Exhibit L to the Service Plan; agrees that the District will include such City Disclaimer Statement or any modified or substitute City Disclaimer Statement hereafter furnished by the City to the District in all offering materials used in connection with any bonds or other financial obligations of the District (or, if no offering materials are used, the City Disclaimer Statement will be given by the District to any prospective purchaser of any bonds or other financial obligations of the District); and waives and releases the City from any claims the District might have based on or relating to the use of or any statements made or to be made in such City Disclaimer Statement (including any modifications thereto). 3. It is understood and agreed, and the District hereby expressly acknowledges, that the City, in acting to approve the Service Plan, has relied upon the provisions of this Indemnity — Letter. 4. This Indemnity Letter has been duly authorized and executed on behalf of the District. Very truly yours, DACONO ESTATES METROPOLITAN DISTRICT President EXHIBIT K Form of Disclosure Notice DACONO ESTATES METROPOLITAN DISTRICT WELD COUNTY,COLORADO DISCLOSURE STATEMENT Pursuant to Article XII of the Service Plan of Dacono Estates Metropolitan District DISTRICT ORGANIZATION: The Dacono Estates Metropolitan District (the "District"), Weld County, Colorado is a quasi-municipal corporation and political subdivision of the State of Colorado duly organized and existing as a metropolitan district pursuant to Title 32, Colorado Revised Statutes. The District was declared organized and an existing metropolitan district on 2005, pursuant to an Order and Decree Organizing District and Issuance of Certificates of Election for the Dacono Estates Metropolitan District, issued in the District Court of Weld County, Colorado. The Order and Decree was recorded in the records of the Weld County Clerk and Recorder on , 200_at Reception# The District is located entirely within the corporate limits of the City of Dacono, Colorado, in Weld County. The legal description of the property forming the boundaries of the District is described in Exhibit A. DISTRICT PURPOSE: The District was organized as a"financing only"district for the purpose of financing streets, street lighting, traffic and safety controls, water, landscaping, storm sewers and flood and surface drainage and park and recreation improvements, all in accordance with its Service Plan approved by the City Council of Dacono. When completed, improvements shall be dedicated to the City of Dacono or other governmental entities, all for the use and benefit of residents and taxpayers, or operated and maintained by contract with a homeowners' association formed for the Dacono Estates development. The District's Service Plan is on file and available for review at the office of the District's general counsel, Miller, Gruber & Rosenbluth, LLC, 700 17th Street, Suite 2200, Denver, Colorado 80202, and at the office of the City Clerk, City of Dacono, 512 Cherry Street, Dacono, Colorado 80514. TAX LEVY INFORMATION: The primary source of revenue for the District is ad valorem property taxes. Property taxes are determined annually by the District's Board of Directors and set by the Board of County Commissioners for Weld County as to rate or levy based upon the assessed valuation of the property within the District. The levy is expressed in terms of mills. A mill is 1/1,000 of the assessed valuation, and a levy of one mill equals $1 of tax for each $1,000 of assessed value. The financial forecast for the District (as set forth in its Service Plan) assumes that the District will be able to set its tax levy at approximately forty (40.000) mills (or less) for 2008 through 2043 for debt service and administration purposes. Except for certain adjustments permitted by the Service Plan to compensate for legally required changes to residential valuation ratios, the District shall not impose a mill levy in excess of fifty (50.000) mills. District taxes are collected as part of the property tax bill from Weld County. DACONO ESTATES METROPOLITAN DISTRICT President STATE OF COLORADO ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 200_, by as President of the Dacono Estates Metropolitan District. WITNESS my hand and official seal. My commission expires: Notary Public EXHIBIT A (Legal Description of District) Dacono Estates\Service Plan JLG1210 0809.0003 l viSISMIIMINENEW gil Land Consultants 480 Yuma Street ■ Denver, Colorado 80204 Off: (303) 436-9233 ■ Fax: (303) 436-9235 Date 09-01-05 Job No. 05019 LEGAL DESCRIPTION PARCEL 1 A PARCEL OF LAND LOCATED IN THE SOUTH HALF OF SECTION 13, TOWNSHIP 1 NORTH, RANGE 68 WEST OF THE SIXTH PRINCIPAL MERIDIAN, COUNTY OF WELD, STATE OF COLORADO, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE EAST QUARTER CORNER OF SAID SECTION 13, CONSIDERING THE EAST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13 AS BEARING S00°13' 57"W AND WITH ALL BEARINGS CONTAINED HEREIN RELATIVE THERETO; THENCE ALONG THE NORTH LINE OF SAID SOUTHEAST QUARTER N89°36' 01"W, 30 .00 FEET TO THE POINT OF BEGINNING, BEING A POINT ON THE WEST RIGHT-OF-WAY LINE OF WELD COUNTY ROAD NO. 13; THENCE DEPARTING SAID NORTH LINE AND ALONG SAID WEST RIGHT-OF-WAY LINE, BEING 30.00 FEET WESTERLY FROM AND PARALLEL WITH THE EAST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13, SOO°13' 57"W, 1745 .77 FEET; THENCE N89°46' 03"W, 280 . 00 FEET; THENCE S00°13' 57"W, 596 . 67 FEET; THENCE N89°00' 33"W, 596 .67 FEET; THENCE S00°59'27"W, 280 .00 FEET TO A POINT ON THE NORTH RIGHT-OF-WAY LINE OF WELD COUNTY ROAD NO. 8; THENCE ALONG SAID NORTH RIGHT-OF-WAY LINE, BEING 30 . 00 FEET NORTHERLY FROM AND PARALLEL WITH THE SOUTH LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13, N89°00' 33"W, 1703 .54 FEET TO A POINT ON THE WEST LINE OF THE SOUTH HALF OF THE SOUTHEAST QUARTER OF SAID SECTION 13; THENCE ALONG SAID WEST LINE NOO°00' 57"E, 1284 . 84 FEET TO THE SOUTHEAST CORNER OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SAID SECTION 13 ; THENCE ALONG THE SOUTH LINE OF SAID NORTH HALF N89°17' 57"W, 285 . 96 FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF THE ST. VRAIN BRANCH OF THE UNION PACIFIC RAILROAD AS DESCRIBED IN BOOK 212, PAGE 279, BOOK 252, PAGE 10, BOOK 260, PAGE 439 AND BOOK 305, PAGE 213, SAID POINT HEREINAFTER REFERRED TO AS POINT "A"; THENCE ALONG SAID EAST RIGHT-OF-WAY LINE N12°23' 22"E, 1342 .46 FEET TO A POINT ON THE NORTH LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 13, FROM _ WHICH POINT THE CENTER OF SAID SECTION BEARS N89°36' 01"W, A DISTANCE OF 1.66 FEET; THENCE ALONG SAID NORTH LINE S89°36' 01"E, 2591. 82 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED PARCEL 1 CONTAINS 6, 536, 833 SQUARE FEET OR 150 . 065 ACRES MORE OR LESS. AND ALSO; SHEET 1 OF 4 %uignufnd Consultants 480 Yuma Street ■ Denver, Colorado 80204 Off: (303) 436-9233 • Fax: (303) 436-9235 Date 09-01-05 Job No. 05019 PARCEL 2 BEGINNING AT THE AFOREMENTIONED POINT "A"; THENCE CONTINUING ALONG SAID SOUTH LINE N89°17' 57"W, 147 .91 FEET TO THE POINT OF BEGINNING, SAID POINT OF BEGINNING BEING A POINT ON THE WESTERLY RIGHT-OF-WAY LINE OF THE UNION PACIFIC RAILROAD AS DESCRIBED IN BOOK 212, PAGE 279, BOOK 252, PAGE 10, BOOK 260, PAGE 439 AND BOOK 305, PAGE 213 ; THENCE DEPARTING SAID WESTERLY RIGHT-OF-WAY LINE AND CONTINUING ALONG SAID SOUTH LINE N89°17' 57"W, 2154.23 FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF WELD COUNTY ROAD NO. 11; THENCE DEPARTING SAID SOUTH LINE AND ALONG SAID EAST RIGHT-OF-WAY LINE, BEING 30 .00 FEET EASTERLY FROM AND PARALLEL WITH THE WEST LINE OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SAID SECTION 13, N00°12'27"W, 1301.15 FEET TO A POINT ON THE NORTH LINE OF THE SOUTHWEST QUARTER OF SAID SECTION 13; THENCE ALONG SAID NORTH LINE S89°36'01"E, 2316 .65 FEET TO THE WEST RIGHT-OF-WAY LINE OF SAID UNION PACIFIC RAILROAD; THENCE ALONG SAID WEST RIGHT-OF-WAY LINE S06°51'45"W, 1320 .79 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED PARCEL 2 CONTAINS 2, 921,490 SQUARE FEET OR 67 .068 ACRES MORE OR LESS. 000W m"its @ti a b. O e` a. VIGIL, S_NO. 26606 $ 26606 ! J _ .Fy'Jolt LAFt �ft. o � SHEET 2 OF 4 MI _.Vgil Land Consultants 480 Yuma Street • Denver, Colorado 80204 _Off: (303) 436-9233 • Fax: (303) 436-9235 Dote 09-01-05 Job No. 05019 ATTACHMENT TO LEGAL DESCRIPTION - NOT A SURVEY Point of Commencement E 1/4 Cor, Sec. 13 Center, Sec. 13 TIN, R68W, 6th P.M. TIN, R6BW, 6th P.M. " : : :1 N89*36'01-W `' '° "" — 1.66' N89'36'01-W O 30.00' S89'36'01"E 2591.82' J N LINE, SE 1/4, SEC. 13 =Q z I Iy rn • Pon Point of 30, I m U N 2 Z1-(\i d- -o Beginning Qaaaaa tni'n n N. I >.p`^viiSo ^ y-1 I wNan W : 1 V- tqZmmmm v �� n ~ — CN.... ,ry re g^/ z PARCEL 1 K CS zz — = id 6,536,833 S.F. r) a 150.065 AC. `n I ¢o S LINE N 1/2, 1/4, EC. 13 ppp p _ O "A" N89'46'03"W 1n POINT Z 280.00' I N89'1 57' * n SE Cor, N7/2, _SW i/4,Sec.13 28 .96' d' w TIN, R68W, 6th P.M. y h N O Nto va10 in J ^ ≤ >- 10 3 — -I-I N ^^ L", CO W Oa) SLI,91) VISIOVISIONm I o toS00'59'27"W c LnT 3 0 280.00' co z 3 N89'00'33"W I -o 596.67' I n, N89'00'33"W 1703.54' S LINE. SE r/a. SEC. u N — — — N89'00'33-w - - — — 2613.82' — — _ I WELD COUNTY ROAD NO. 8 S 1/4 Cor, Sec. 13 SE Cor, Sec. 13 TIN, R6BW, 6th P.M. TIN, R68W, 6th P.M. SCALE: 1'1=500' SHEET 3 OF 4 - �gil Land Consultants 480 Yuma Street • Denver, Colorado 80204 Off: (303) 436-9233 • Fax: (303) 436-9235 Date 09-01-05 Job No. 05019 ATTACHMENT TO LEGAL DESCRIPTION - NOT A SURVEY W 1/4 Cor, Sec. 13 TIN, R68W, 6th P.M. Center, Sec. 13 TIN, R68W, 6th P.M. 589'36'01"E 2316.65' N LINE, SW 1/4, SEC. 13 276.46' O — I Q I O ^ n Z m zE- W O n UEr o -I ^ PARCEL 2 I"- ¢v N2,921,490 S.F. mUN2�N Z 6 ll cm im- \ 67.068 AC. h w Q �aaaa :• h CI HI N, Z „NI- I.2 jZt3vtNittoo 0 o ^ 41 o ♦- ZNNtoa - C] zl co Oco z 01 �mmmm --I I Z 3 (7 I ) 30' — S LINE, N 1/2. SW 1/4, SEC. 13 N89'17'57"W 2154.23' N89•n's7'W Point of SE Cor, N7/2, — 3p.00• SW 1/4, Sec. 13 I LOT Beginning TIN, R68W, 6th P.M. N89'1T57'W/I — 147.91' SW Cor, N1/2, SW 1/4, Sec. 13 TIN, R68W, 6th P.M. POINT A" N TRY CREEK LOT '2 SUBDIVISION SCALE: 1"=500' SHEET 4 OF 4 EXHIBIT L Form of City Disclaimer Statement CITY OF DACONO, COLORADO-DISCLAIMER STATEMENT As a requirement imposed in its formation process, the Dacono Estates Metropolitan District (the "District") is obligated to the City of Dacono (the "City") to include this disclaimer statement in all offering materials used in connection with any bonds or other financial obligations of the District (or, if no offering materials are used, to give this disclaimer statement to any prospective purchaser, investor or lender in connection with any such bonds or other financial obligations of the District). The date of this disclaimer statement is . [Insert date of offering materials or date disclaimer statement is otherwise delivered, unless City directs a different date]. The City has not reviewed or participated in the preparation of any offering materials or any other disclosure documentation relating to any bonds or financial obligations of the District or any other materials to which this Disclaimer Statement is appended. Other than this Disclaimer Statement, no other statement of any kind is authorized to be made by or on behalf of the City in any offering materials or any other disclosure documentation relating to any bonds or other financial obligations of the District. The City and the District are separate legal entities. The City is not a party to and is not obligated with respect to any borrowings, financings, bonds or other financial obligations of the District. As a statutory requirement for the formation of the District,the City approved a Service Plan containing financial and other information furnished by the District's organizers. The City's approval of the Service Plan was based upon such information furnished by the District's organizers, without independent investigation by the City. The District's Service Plan was prepared in 2005 and not in connection with the offering of any bonds or other financial obligations. The City's approval of the District's Service Plan should not be relied upon by prospective purchasers, bondholders, investors or lenders in evaluating the investment quality of the District's bonds or other financial obligations. The Service Plan and related agreements do not impose upon the City any duties to, nor confer any rights against the City upon, any purchasers, investors, lenders, bondholders or other third parties. By purchasing or otherwise accepting any bond or other financial obligation of the District, the owner or holder thereof waives and releases any then existing or future claim against the City or the City's elected or appointed officers, employees, agents or contractors in any manner related to or connected with the District or its Service Plan or any action or omission with respect thereto. EXHIBIT M Form of Intergovernmental Agreement between District and City INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF DACONO, COLORADO AND DACONO ESTATES METROPOLITAN DISTRICT THIS AGREEMENT (the "Agreement") is made and entered into as of this day of 200_, by and between the CITY OF DACONO, a home-rule municipal corporation of the State of Colorado (the "City"), and the DACONO ESTATES METROPOLITAN DISTRICT, a quasi-municipal corporation and political subdivision of the State of Colorado (the "District"). RECITALS WHEREAS, the District was organized to provide those public improvements and to exercise powers as are more specifically set forth in the District's Service Plan dated August 2005, and approved by the City on August 22, 2005, by Resolution No. 05- ("Service Plan"); and WHEREAS, the Service Plan makes reference to and requires the execution of an intergovernmental agreement between the City and the District; and WHEREAS, the City and the District have determined it to be in the best interests of their respective taxpayers, residents and property owners to enter into this Agreement. NOW, THEREFORE, for and in consideration of the covenants and mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,the parties hereto agree as follows: COVENANTS AND AGREEMENTS 1. APPLICATION OF LOCAL LAWS. The District hereby acknowledges that the property within its boundaries shall be subject to all ordinances, rules and regulations of the City, including without limitation, ordinances, rules and regulations relating to zoning, subdividing, building and land use, and to all related City land use policies, master plans, related plans and intergovernmental agreements. 2. NATURE OF DISTRICT. The District agrees that it is organized for the purpose of financing certain public improvements for the area within its boundaries only, which area is designated as the proposed Dacono Estates development, and that the District's purposes, powers, facilities and activities are to be limited and governed by the Service Plan. The District shall fully comply with all provisions, requirements, restrictions and limitations of the Service Plan. The District is not intended to and shall not provide facilities or service outside its boundaries(except to the extent specifically permitted in the Service Plan). Further, the District is not intended to and shall not exist perpetually, but instead shall be dissolved in accordance with the Service Plan and this Agreement. The property within the District will receive water service from the City through the City's arrangements with the Central Weld County Water District. The District shall not provide any services or facilities within any area of the District overlapping with the service area of another district without first obtaining the written consent of each and every district whose service area is so overlapped. 3. CHANGE IN BOUNDARIES. The District agrees that, as set forth in the Service Plan, inclusion of properties within, or any exclusion of properties from, its boundaries shall constitute a material modification of the Service Plan; any purported inclusion or exclusion that has not been approved by the City pursuant to the procedures applicable to a material modification of the Service Plan shall be void and of no effect. 4. CITY APPROVAL REQUIREMENTS; REVIEW OF DISTRICT SUBMITTALS. The District agrees that any City approval requirements contained in the Service Plan (including, without limitation, any Service Plan provisions requiring that any change, request, action, event or occurrence be treated as a Service Plan amendment proposal or be deemed a "material modification" of the Service Plan) shall remain in full force and effect, and such City approval shall continue to be required, notwithstanding any future change in law modifying or repealing any statutory provision concerning service plans, amendments thereof or modifications thereto. The District agrees to reimburse the City for all reasonable administrative and consultant costs incurred by the City for any City review of reports, plans, submittals or other materials or requests provided to the City by the District pursuant to the Service Plan, this Agreement, state law or the Dacono Municipal Code. The City may require a deposit of such estimated costs. 5. OWNERSHIP OF IMPROVEMENTS. The parties agree that the District shall serve as a "financing only" district and shall not be permitted to undertake ownership, operation or maintenance of public facilities and services, except as specifically set forth in the Service Plan. 6. CONSOLIDATION. The District shall not file a request with the district court to consolidate with another district without the prior written approval of the City. 7. DISSOLUTION. The District agrees that it shall take all action necessary to dissolve the District upon payment or defeasance of the District's bonds or otherwise upon the request of the City, all as provided in the Service Plan. 8. NOTICE OF MEETINGS. The District agrees that it shall submit a copy of the written notice of every regular or special meeting and work session of the District's Board of Directors to the Office of the Dacono City Administrator, by mail, facsimile or hand delivery, to be received at least three (3) days prior to such meeting. The District agrees that it shall also submit a complete copy of meeting packet materials for any such meeting to the Office of the Dacono City Administrator, by mail, facsimile or hand delivery, to be received at least one (1) day prior to such meeting. 9. ANNUAL REPORT. The District shall be responsible for submitting an annual report to the City pursuant to and including the information set forth in Section VII of the Service Plan. 10. ENTIRE AGREEMENT OF THE PARTIES. This written Agreement, together with the Service Plan, constitutes the entire agreement between the parties and supersedes all prior written or oral agreements, negotiations or representations and understandings of the parties with respect to the subject matter contained herein. 11. AMENDMENT. This Agreement may be amended, modified, changed or terminated in whole or in part only by a written agreement duly authorized and executed by the parties hereto and without amendment to the Service Plan. 12. ENFORCEMENT. The parties agree that this Agreement may be enforced in law or in equity for specific performance, injunctive or other appropriate relief, including damages, as may be available according to the laws and statutes of the State of Colorado. 13. VENUE. Venue for the trial of any action arising out of any dispute hereunder shall be in the Weld County District Court. 14. BENEFICIARIES. Except as otherwise stated herein, this Agreement is intended to describe the rights and responsibilities of and between the named parties and is not intended to, and shall not be deemed to, confer any rights upon any persons or entities not named as parties. 15. EFFECT OF INVALIDITY. If any portion of this Agreement is held invalid or unenforceable for any reason by a court of competent jurisdiction as to either party or as to both parties, such portion shall be deemed severable and its invalidity or its unenforceability shall not cause the entire Agreement to be terminated. Further, with respect to any portion so held invalid or unenforceable, the District and City agree to take such actions as may be necessary to achieve to the greatest degree possible the intent of the affected portion. 16. ASSIGNABILITY. Other than as specifically provided for in this Agreement, neither the City nor the District shall assign their rights or delegate their duties hereunder without the prior written consent of the other parties. 17. SUCCESSORS AND ASSIGNS. Subject to Section 16 hereof, this Agreement and the rights and obligations created hereby shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. [Remainder of page intentionally left blank]. DACONO ESTATES METROPOLITAN DISTRICT President ATTEST: Secretary CITY OF DACONO By: Its: ATTEST:: By: Its: EXHIBIT N Resolution of City Council Approving Service Plan CITY OF DACONO, COUNTY OF WELD, STATE OF COLORADO IN RE THE ORGANIZATION OF DACONO ESTATES METROPOLITAN DISTRICT, IN THE CITY OF DACONO, COUNTY OF WELD, STATE OF COLORADO RESOLUTION NO. 05-66 RESOLUTION OF APPROVAL WHEREAS, pursuant to the provisions of Title 32, Article 1, Part 2, C.R.S. as amended, the City Council of the City of Dacono, County of Weld, State of Colorado, following due notice, held a public hearing on the Service Plan of the proposed Dacono Estates Metropolitan District on the 22nd day of August 2005; and WHEREAS, the City Council has considered the Service Plan and all other testimony and evidence presented at the hearing; and WHEREAS, based upon the testimony and evidence presented at the hearing, it appears that the Service Plan should be approved by the City Council, subject to certain conditions set forth below, in accordance with C.R.S. § 32-1-204.5(1)(c). THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DACONO, COLORADO: Section 1. The City Council, as the governing body of the City of Dacono, Colorado, does hereby determine, based on representations by and on behalf of Dacono Estates, LLC, a Delaware limited liability company (the "Developer"), that all of the requirements of Title 32, Article 1, Part 2, C.R.S., as amended, relating to the filing of a Service Plan for the proposed Dacono Estates Metropolitan District have been fulfilled and that notice of the hearing was given in the time and manner required by law. Section 2. Based on representations by and on behalf of the Developer, the City Council of the City of Dacono, Colorado, has jurisdiction over the subject matter of this proposed special district pursuant to Title 32, Article 1, part 2, C.R.S., as amended. Section 3. Pursuant to C.R.S. §§ 32-1-204.5; 32-1-202(2) and 32-1-203(2), the City Council of the City of Dacono, Colorado, does hereby find and determine, based on the Service Plan and other evidence presented by and on behalf of the Developer, that: (a) There is sufficient existing and projected need for organized service in the area to be serviced by the proposed District; (b) The existing service in the area to be served by the proposed District is inadequate for present and projected needs; 1 (c) The proposed special district is capable of providing economical and sufficient service to the area within its proposed boundaries; (d) The area to be included in the proposed District has, or will have, the financial ability to discharge the proposed indebtedness on a reasonable basis; and (e) The creation of the proposed District will be in the best interests of the area proposed to be served. Section 4. Pursuant to C.R.S. § 32-1-204,5(1)(c), the City Council hereby imposes the following conditions upon its approval of the Service Plan: (a) The Developer agrees that the City Attorney will be given reasonable notice of all proceedings in the District Court of Weld County relating to the organization of the District (including notice as described in C.R.S. § 32-1-304). (b) The Developer agrees that, prior to the hearing date set by the District Court of Weld County pursuant to C.R.S. § 32-1-304, all fees and expenses which have been submitted to the Developer for payment by or on behalf of the City or its attorneys or financial or other advisors shall have been paid in full. (c) Prior to the hearing date set by the District Court of Weld County pursuant to C.R.S. § 32-1-304, the District shall fully comply with the provisions of C.R.S. § 32-1-107(3) with respect to the overlapping of service areas. The District's authorization to provide services or facilities within any overlapping area is expressly conditioned upon the District first obtaining the written consent of each and every district whose service area is so overlapped. (d) Prior to the Mayor's execution of this Resolution, the fully and properly executed originals of the engineer's statement of reasonableness of capital costs; accountant's letter and forecasts; letters in support of market projections and absorption rates; underwriter's letter; legal counsel letter; Developer's indemnity letter; and property owners' consents that are required under the Service Plan and set forth in Exhibits D, E, G, H, I and Part 1 of Exhibit J thereto, shall be provided to the City. (e) At its organizational meeting, the District shall execute the District indemnity letter and intergovernmental agreement with the City that are required under the Service Plan and set forth in Part 2 of Exhibit J and Exhibit M thereto, and shall immediately provide the fully executed originals of such documents to the City. 2 (f) The District shall provide the City with a copy of the District's financial statements annually. In years where an independent audit is not — conducted, provide the City with a copy of the application for exemption and the response by the State Auditor. — If any of the above-stated conditions (a) through (d) are not met, the City may file a motion with the District Court of Weld County requesting that the hearing on the organization of the District be delayed until such conditions are met, and Developer has represented that it will not oppose such motion. Further, if any of the above-stated conditions (a) through (f) are not met, the City may pursue all legal and equitable remedies available to it for failure of compliance with such conditions of approval. Section 5. The Service Plan of the proposed Dacono Estates Metropolitan District, as set forth in Exhibit A to this Resolution and dated August 9, 2005, is hereby approved subject to the — conditions stated in Section 4, above, in accordance with C.R.S. § 32-1-204.5(1)(c) and subject to the revisions set forth in Exhibit B. - Section 6. A certified copy of this Resolution shall be filed in the records of the City of Dacono and submitted to the Developer for the purpose of filing in the District Court of Weld County for further proceedings concerning the District. RESOLVED, ADOPTED AND APPROVED this 22vd day of August, 2005. - _Of DACO`` •---. 'Y CITY COUNCIL c�oRa�o l� , . f U; ° Fo! �� CITY OF DACONO, COLORADO CC� %. UARY,�' f'j P0= Wade Carlson Mayor / /, // .4111,11 /YAP Val-rieElliott- ucero City Clerk 08/18/2M5 3.33 PM[all F:\C panykDanono Mao Districts Dacono FstateUpproveLra.Loc 3 CERTIFICATE I, Valerie Elliott-Lucero, do hereby certify that the above and foregoing is a true, correct and complete copy of a resolution ad pted by the City Council of the City of Dacono, t Colorado, at a public meeting held on the J day of 2to , 2005. IN WITNEU WHE F, I have hereunto set my hand and the seal of the City of Dacono, Colorado, this°nay of f 2005. A.1/4rOFDAC0‘; ‘1C) tE � nigi"AreNL1 S'E 'ii% City Cl k� i `.NUARM p sfe %COLORP�' 4 EXHIBIT B Revisions to the Dacono Estates Metropolitan District Service Plan (Dacono City Council Meeting, August 22,2005) 1. Service Plan page 8, line 1: insert"to"between"dedicated" and comma. 2. Service Plan page 15, last line on page: change "financing" to "financial." Label Exhibit G "Financing Plan" and conform table of contents. 3. Service Plan page 17, line 8: change "circumstance"to "circumstances." 4. Service Plan page 22, line 6: strike "-of-one." 5. Service Plan page 23, line 10: insert comma after"above." 6. Exhibits A and B, legal description and boundary map: revise to include only the residential portion of the property. 7. Exhibit G spreadsheets, page 5: column headings, 3' and 6th columns from left, change "Platted & Developed Lots" to "Platted & Improved Lots"; page 14, second line under Note 5 (continued), change"developed lots" to improved lots." 8. Exhibit G spreadsheets, page 12,third line under Note 3, change "Colorado"to "Delaware." 9. Exhibit G, 'Developer letter: Revise in accordance with City request for additional explanation of how DRM Real Estate Advisors letter supports financial plan assumptions. Conform signature block to Exhibit J Part I Developer Indemnity Letter. Provide executed copy of revised letter. 10. ExhibiCH, Underwriter's letter dated August 1, 2005: Second page, second-to-last sentence, change "alternative"to "model." Provide executed copy of revised letter. 11. Exhibit M, Form of Intergovernmental Agreement: In Section 2, second line on second page, change"Property" to "property." • 5 Hello