HomeMy WebLinkAbout20052880.tiff BRIDLE CREEK
METROPOLITAN DISTRICT NO. 2
- SERVICE PLAN
- CITY OF DACONO,COLORADO
FINAL
AUGUST 22, 2005
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2005-2880
TABLE OF CONTENTS
I. Introduction 1
II. Purpose of the Proposed District 4
HI. 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 10
_ e. City Construction Standards 11
f. Limitation on Eminent Domain 11
g. Dedication of Improvements to the City 12
h. Ownership and Maintenance of Public Improvements 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 19
d. Limited Mill Levy 21
e. Investor Suitability 22
f. Refunding Bonds 22
g. Developer Bonds 23
h. Construction Financing Notes Issued to Developer 24
i. Identification of District Revenue 25
j. Security for Debt 26
k. Services of District 26
1. Quinquennial Review 27
m. Letters 27
VI. Landowners' Obligations as to Public Improvements 27
VII. Annual Report 28
VIII. Dissolution 29
— IX. Consolidation 31
X. Elections 31
XI. Indemnities 32
XII. Disclosure and Disclaimer;No Third-Party Rights 33
XIII. Intergovernmental Agreements 34
XIV. Conservation Trust Fund 34
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
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TABLE OF EXHIBITS
Exhibit A Legal Description
Exhibit B Boundary Map
Exhibit C Vicinity Map
Exhibit D Property Owner's Consent
Exhibit E Engineer's Estimate of Costs and Certification
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 District Disclosure Statement
Exhibit L Form of City Disclaimer Statement
Exhibit M Form of Intergovernmental Agreement between District and City
Exhibit N Resolution of City Council Approving Service Plan
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BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
SERVICE PLAN
I. INTRODUCTION
The District shall be named the Bridle Creek Metropolitan District No. 2 (the "District").
The purpose of the District is to finance certain streets, street lighting, traffic and safety controls,
water, sanitary sewer, landscaping, storm sewers and flood and surface drainage, and park and
recreation improvements for a proposed development to be known as Bridle Creek. The
developer of Bridle Creek and the petitioner for the formation of the District is Bridle Creek,
LLC, a Colorado limited liability company (the "Developer"). The District is intended to
provide for the financing of public improvements for Bridle Creek, but is not intended to be a
District with perpetual existence. The District will consist of approximately eighty-one and nine
hundred twenty one-thousandths-of-one (81.920) 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 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 any
specific landscaping improvements dedicated and conveyed to the City be maintained by a
homeowners' association formed for Bridle Creek, for the use and benefit of residents, taxpayers,
and property owners. The District shall not provide fire protection or emergency services, which
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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 south of Graden Boulevard (Weld County Road 10)
between Colorado Boulevard (Weld County Road 13) and Holly Street (Weld County Road 15).
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
Bridle Creek, LLC Miller, Gruber&Rosenbluth, LLC
a Colorado limited liability company Dianne D. Miller, Esq.
Bruce Galloway Jennifer L. Gruber, Esq.
Timothy Nyberg 700 17`h Street, Suite 2200
911 Hilderbrand, Suite 203 Denver, Colorado 80202
Bainbridge Island, Washington 98110 (303) 285-5320
(206) 780-9989 (303) 285-5330—facsimile
(206) 780-5893—facsimile dmiller@mgrlawfirm.com
pacwest@bainbridge.net igruber@mgrlawfirm.com
timothy@bainbridge.net
Investment Banker Engineer
Kirkpatrick, Pettis, Smith, Polian Inc. Carter::Burgess
Thomas R. Bishop Sean O'Heam, P.E.
1600 Broadway Street, Suite 1100 707 17`h Street, Suite 2300
Denver, Colorado 80202 Denver, Colorado 80202
(303) 764-5737 (303) 820-5240
(303) 764-5770—facsimile (303) 820-4842—facsimile
tbishop@kpsp.com Sean.OHearn@c-b.com
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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
biordana,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;
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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 Bridle Creek,
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,
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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 eighty-one and nine hundred twenty one-
thousandths-of-one (81.920) 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, Bridle Creek, 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.
Bridle Creek, LLC has consented to the formation of the District, which consent is attached
hereto as Exhibit D and incorporated herein by this reference.
Bridle Creek is being developed for the anticipated construction of one hundred twenty-
six (126) townhomes and three hundred sixty-four (364) condominium dwelling units for a total
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of four hundred ninety (490) multi-family homes. The current population of the District is zero.
The estimated population of the District at full build-out is one thousand two hundred fifty-nine
(1,259) 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 Six Million Two Hundred
Sixty-Eight Thousand Seven Hundred Sixty-One Dollars ($6,268,761.00). 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 sixty-five and six hundred
seventy-seven one-thousandths(65.677)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.
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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, sanitary sewer, 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
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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
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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 Four Million Eight Hundred
Fifty-One Thousand Six Hundred Eighty Dollars ($4,851,680.00), 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
Two Million Seven Hundred Sixty-One Thousand Eight Hundred Eighty-Five Dollars
($2,761,885.00) (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 Bridle Creek.
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
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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 Bridle Creek.
b. Description of Existing Conditions.
The area is predominantly undeveloped.
c. Anticipated Development.
The Developer anticipates total build-out to occur by 2013,with the completion of twenty
(20) townhomes in 2006, twenty (20) townhomes in 2007, twenty (20) townhomes in 2008,
twenty (20) townhomes in 2009, twenty (20) townhomes in 2010, twenty-six (26) townhomes in
2011, one hundred eighty-two (182) condominium dwelling units in 2012 and one hundred
eighty-two (182) condominium dwelling units in 2013, 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 Bridle Creek, and that City development standards and
requirements may affect the foregoing numbers of anticipated homes and the foregoing
anticipated build-out schedule.
— 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
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schedule, and shall be installed in compliance with any phasing plan approved by the City for
Bridle Creek.
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
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.
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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, sanitary sewer, 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.
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
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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"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 a "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.
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
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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, sanitary
sewer, 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
District. 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
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Water District consenting to the overlapping boundaries for financing purposes only. The
District shall not provide ongoing water services to the District. The District anticipates
receiving sanitary sewer service from either the St. Vrain Sanitation District or the Dacono
Sanitation District. The District shall not provide ongoing sanitary sewer 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 Bridle
Creek. 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 fmancial 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-
_ 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
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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
fmanced 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 one (1) series of bonds in 2008. The combined total estimated cost of the improvements
is Four Million Eight Hundred Fifty-One Thousand Six Hundred Eighty Dollars ($4,851,680.00).
The District has the capacity to issue general obligation bonds in the aggregate principal amount of
approximately Two Million Eight Hundred Thousand Dollars ($2,800,000.00), projected to yield
net bond proceeds of approximately Two Million Eighty-Nine Thousand Seven Hundred Ninety-
Five Dollars($2,089,795.00). Accordingly, it is currently anticipated that the bond proceeds will be
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insufficient to allow for repayment of Two Million Seven Hundred Sixty-One Thousand Eight
Hundred Eighty-Five Dollars ($2,761,885.00), which will be contributed by the Developer;
however, if the financing 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
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
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this Service Plan, and such an amendment shall be considered a material modification of the
Service Plan.
The District intends to issue one (1) series of general obligation bonds in the aggregate
principal amount of approximately Two Million Eight Hundred Thousand Dollars
($2,800,000.00). 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 Three Million Eighty
Thousand Dollars ($3,080,000.00) ("debt limit"); except to the extent otherwise provided in
Article V.f 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 bonds will be issued in the approximate amount of Two Million Eight Hundred
Thousand Dollars ($2,800,000.00) and are anticipated to be issued in 2008. All net proceeds of
the 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 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 (townhomes and condominium dwelling units, combined). For example, the
bonds represent four hundred ninety (490) units. The net bond proceeds from the bonds are
anticipated to be Two Million Eighty-Nine Thousand Seven Hundred Ninety-Five Dollars
($2,089,795.00). Therefore, upon the issuance of each building permit, approximately Four
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Thousand Two Hundred Sixty-Five Dollars ($4,265.00) per unit will be transferred from the
escrow account to the unrestricted account for each dwelling unit covered by such 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,
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 Three Million Eighty
Thousand Dollars ($3,080,000.00) of general obligation debt (together with construction
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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.
Estimated interest rates used in the Financing Plan are based on information furnished by
the underwriters, Kirkpatrick, Pettis, Smith, Polian 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.
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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
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
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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.
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
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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
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
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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
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.
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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,
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,
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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 Dollars ($1,000.00) per townhome and Seven
Hundred Fifty Dollars ($750.00) per condominium dwelling unit. 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,
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 Twenty-Five Thousand Dollars ($25,000.00), 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.
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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 (5th) 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 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 Bridle Creek, of the obligation to enter into a
subdivision improvements agreement regarding such improvements, 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,
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or policies, or under other agreements affecting the property within the District or Bridle Creek,
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 315` 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;
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
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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
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
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(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, 2011, if
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
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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
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,
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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:
Phillip C. Gans Myrna Orlando
25805 Columbine Glen Avenue 10251 Dusk Court
Golden, Colorado 80401 Littleton, Colorado 80125
Terence P. Boyle Judy Wong
5402 Nassau Circle East 7259 South Garland Court
Cherry Hills Village, Colorado 80113 Littleton, Colorado 80123
— Mark Apelman
2992 South Fillmore Way
Denver, Colorado 80210
XI. INDEMNITIES
The fully executed Bridle Creek, 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
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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
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.
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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. The District
anticipates entering into an intergovernmental agreement with the Bridle Creek Metropolitan
District No. 1 for the sharing of costs related to public improvements benefiting both districts,
including, but not limited to, off-site street improvements, off-site landscaping improvements,
off-site sanitary sewer improvements and off-site water improvements. The total estimated costs
of the shared off-site improvements are included in Exhibit E. The cost-sharing
intergovernmental agreement is expected to provide that, to the extent one district finances and
constructs the shared off-site improvements, the other district shall reimburse the financing and
constructing district for its agreed-upon share of the costs of the shared off-site improvements,
but only if such reimbursement does not adversely affect the reimbursing district's ability to
repay its bonds. No other intergovernmental agreements are proposed at this time. Any
intergovernmental agreements proposed regarding the subject matter of this Service Plan
(including, without limitation, the above-referenced cost-sharing agreement with Bridle Creek
Metropolitan District No. 1) 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.
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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
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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(l)(f) and —1101(1.5),
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.
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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 Bridle Creek; 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 -
XIX. 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.RS., 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.
BRIDLE CREEK, LLC, a Colorado limited
liability company
Bruce Galloway, anager
August 15, 2005
EXHIBIT A
Legal Description
707 17th Street
SAte,2770u
Carter:Burgess Derive( CO Ba2g2.3.g,
-- Phone 3C3 B20 524S
July 12,2005 Fox:303-820 2402
W a v.c-'a coal
Property Description
Bridle Creek Metropolitan District No. 2
A portion of the North Half of Section 18,Township 1 North,Range 67 West of the 6th Principal
Meridian,City of Dacono,County of Weld, State of Colorado,being more particularly described
as follows;
COMMENCING at the North Quarter corner of said Section 18(a found 2"aluminum cap
stamped"PLS 29425");
WHENCE the Center Quarter corner of said Section 18 (a found 2"aluminum cap stamped"PLS
29425")bears S00°27'38"E(Basis of Bearing-assumed)a distance of 2656.36 feet;
THENCE S87°45'08"E a distance of 919.03 feet to a point 30.00 feet southerly of the northerly
line of the Northeast Quarter of said Section 18,being the POINT OF BEGINNING;
THENCE S23°25'50"E a distance of 217.74 feet;
THENCE S70°42'07"W a distance of 402.60 feet;
THENCE S44°19'51"W a distance of 143.43 feet;
THENCE N83°40'52"W a distance of 228.30 feet;
THENCE N03°45'56"E a distance of 58.37 feet;
THENCE 569°18'20"W a distance of 446.77 feet;
THENCE S50°18'20"W a distance of 1225.00 feet;
THENCE 545°18'20"W a distance of 165.00 feet;
THENCE 524°28'45"W a distance of 698.55 feet;
THENCE S00°22'36"W a distance of 566.29 feet;
THENCE N89°37'24"W along the southerly line of the Northwest Quarter of said Section 18 a
distance of 1038.67 feet;
THENCE N00°11'49"W along a line being 30.00 feet easterly of and parallel with the westerly
line of the Northwest Quarter of said Section 18 a distance of 1374.87 feet;
THENCE N89°50'38"E tangent with the following described curve a distance of 885.95 feet;
THENCE along the arc of a curve to the left,having a central angle of 11°35'50",a radius of
25.00 feet,a chord bearing N84°02'43"E a distance of 5.05 feet,and an arc distance of 5.06 feet;
THENCE N00°09'22"W non-tangent with the last described curve a distance of 1242.75 feet;
THENCE 589°36'58"E along a line being 30.00 feet southerly of and parallel with the northerly
line of the Northwest Quarter of said Section 18 a distance of 1625.46 feet;
THENCE S89°37'23"E along a line being 30.00 feet southerly of and parallel with the northerly
line of the Northeast Quarter of said Section 18 a distance of 918.10 feet to the POINT OF
BEGINNING.
Con ,:v < e ft (81.920 Acres),more or less.
_ /f1.lw \,
! te:
'rep.(- , b 00'°, 1
Date j 3 :
' /t7^.' - i
Ke l .�.W.Carlson PLS 1 (
For a t.:kkitiogghalf of
•;s�
Carter `ti-;• ss;•hter
.d Edlit$
K:\071814-Bridle Creek\Desc\DistrictParcels\District2.doc Page t of 2
Cortex& Burgess. Inc. Carter&burgess Consultants, Inc.
C&B Architects,Englneers, Inc. C&8 Architects/Engineers, P.C. C&B Nevada-Inc_
NW COR. SEC. 18
RECOVERED &ACCEPTED
j6 rater./2 i1 n.CoP N'ly Line NE 1/4 Sec. 18
stomped 'ALBERS DRECEL dc
POINOF COMMEIC
PONLY TIN RU R67W 512 57 N1/4T COR.SEG18 �E
RUM OF BOHM \_
513 518 RECOVERED &ACCEPTED S ST45'0 "
24aos N'ly Line NW 1/4 Sec. 18 -8 2ALUMN.CAP PS 29425 $ E
a�su— > No-to—7_-_-- — �� —_ Or 9190
en IS 89'36'58" E' 9".5723"-E S 23'25'50" E
A l 3 1625.46 -11%918.10'I • W
217.74'
IN in BRIDLE came
o
i I (-NI N LI o �T NO. 2 5 6g N 6 1' S 70'42'07" ;4V';�-.
o N (3A68.450 .1 T 402 60
I bow S 44'19'51" Y�� 1,
z 4, N d3'45'56" E 143.4,3' v , I
�0q�II � 58.37' N 83'40'52" W( ( L- Imo' L
m CB=N '02'43" E 43. 0° 23 .30�
V Dg-U1'35 50 S
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�I"N 895038 E � I� �o Leer
zI 885.95' * 165.00' ;,z �� o 1� - er;-*.-1 ` I- ' i i il
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NI
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N 89'37'24" W bb's 1' l
1038.67' N _S'ly'Line NW_1i/4 ec 18 sic ! ' II LLine' NE 1!/41 Sec. 18
661/4 CORSEGIB - - - -
RECOVERED 8 ACCEPTED C1/4 CORSEC.18
2—t/t ALUNN.CAP RECOVERED & ACCEPTED
P15 28258 2'ALUMN.CAP P1S 29425
0 150`30 600 1200
I O
1 inch - 600 t
CARTER & BURGESS PROJECT NO.
CUENf PROJECT NO. N 1/2 SEC. 18
REVISION DESCRFNON
DROWN DCW IDATE 07-12-05 ISCALE 1'=600' T1 N R67W 6th Carter•Burgess TTY BRIDLE CREEK
707 Seventeenth SSt., #1120-5240 2300,ut erenver, CO 80202 METROPOLITAN DISTRICT NO. 2
DES YAWS ND AR/A410CWTD DECiNMC DATA WAS PREMED IT CARID A REVISION: DRAWING NO. SHEET NO.
OUNCESS.NC.Fat DIE MOJECT INOCARD.ANY COWIr CM=• Ww s C AT 1 SOLE i 5K a IE 0 DISTRICT2 2 OF 2
EXHIBIT B
Boundary Map
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BOUNDARY EXHIBIT DA'E AUGUST 2005
Carter.Burgess BRIDLE CREEK METROPOLITAN SCOLL
707 17711 S'• ne.270° NOT TO SCALE
CONES,CO 60202DISTRICT No.2
_
(303)07)820-O-8240 Fe.(303)82O-4842
DACONO,COLORADO
EXHIBIT C
Vicinity Map
-CITY OF DACONO-
STATE HIGHWAY 52
/
IP'
WELD COUNTY ROAD NO. 12
Ln
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—
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WELD CO. RD. ce / A
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3 3
PERRY STREET
VICINITY MAP DATE:
Carter Bur ess AUGUST 2005
707 17Th ST. STE. 2300 9 BRIDLE CREEK METROPOLITAN SCALE: NOT TO SCALE
DENVER, CO 80202 DISTRICT No. 2
(303) 820-5240 Fax (303) 820-4842
DACONO, COLORADO
EXHIBIT D
Property Owner's Consent
_ August 15, 2005
City of Dacono
Post Office Box 186
Dacono, Colorado 80514
RE: Proposed Bridle Creek Metropolitan District No. 2 (the "District")
To Whom It May Concern:
Bridle Creek, LLC, a Colorado limited liability company, is the 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, Bruce Galloway, as Manager of
Bridle Creek, LLC, a Colorado limited liability company, consent to the organization of
the District.
BRIDLE CREEK, LLC,
a Colorado limited liability company
Bruce Galloway, M ager
STATE OF COLORADO )
) ss.
COUNTY OF fDr2mAiyS )
4 sworn to before me on this 15th day of August 2005, by Bruce
Gallo apagft., iridle Creek, LLC, a Colorado limited liability company.
•
S LEAL] ••44 As
Ii ii.z. 30 .0;9: Notary Public
of cot.-
tv
\\ _
My commission expires //Jig oak .
Bridle Creek\No. 1 Service Plan
JLG0721
0811.0003
- - 707 17th Street
- Carter:Burgess Si.rteDenver,
znve r,CO 80202-3404
Phone: 303.820.5240
July 12,2005 Fox:303.820.2402
w w..c-b.com
Property Description
Bridle Creek Metropolitan District No. 2
A portion of the North Half of Section 18,Township 1 North,Range 67 West of the 6th Principal
Meridian,City of Dacono,County of Weld,State of Colorado,being more particularly described
as follows;
COMMENCING at the North Quarter corner of said Section 18(a found 2"aluminum cap
stamped"PLS 29425");
WHENCE the Center Quarter corner of said Section 18 (a found 2"aluminum cap stamped"PLS
29425")bears S00°27'38"E(Basis of Bearing-assumed)a distance of 2656.36 feet;
THENCE S87°45'08"E a distance of 919.03 feet to a point 30.00 feet southerly of the northerly
line of the Northeast Quarter of said Section 18,being the POINT OF BEGINNING;
THENCE 823°25'50"E a distance of 217.74 feet;
THENCE S70°42'07"W a distance of 402.60 feet;
THENCE S44°19'51"W a distance of 143.43 feet;
.THENCE N83°40'52"W a distance of 228.30 feet;
THENCE N03°45'56"E a distance of 58.37 feet;
THENCE$69°18'20"W a distance of 446.77 feet;
THENCE S50°18'20"W a distance of 1225.00 feet;
' THENCE 545°18'20"W a distance of 165.00 feet;
THENCE S24°28'45"W a distance of 698.55 feet;.
THENCE S00°22'36"W a distance of 566.29 feet;
THENCE N89°37'24"W along the southerly line of the Northwest Quarter of said Section 18 a
distance of 1038.67 feet;
THENCE N00°11'49"W along a line being 30.00 feet easterly of and parallel with the westerly
line of the Northwest Quarter of said Section 18 a distance of 1374.87 feet;
THENCE N89°50'38"E tangent with the following described curve a distance of 885.95 feet;
THENCE along the arc of a curve to the left,having a central angle of 11°35'50", a radius of
25.00 feet,a chord bearing N84°02'43"E a distance of 5.05 feet, and an arc distance of 5.06 feet;
THENCE N00°09'22"W non-tangent with the last described curve a distance of 1242.75 feet;
THENCE S89°36'58"E along a line being 30.00 feet southerly of and parallel with the northerly
line of the Northwest Quarter of said Section 18 a distance of 1625.46 feet;
THENCE 589°37'23"E along a line being 30.00 feet southerly of and parallel with the northerly
line of the Northeast Quarter of said Section 18 a distance of 918.10 feet to the POINT OF
BEGINNING.
Con:inin QQ41 -.: a fe--. (81.920 Acres),more or less.
rep rc4flS d 1t -'
Date 3- i
Ke t. _:`W. Carlson PLS
3 % 6
For • laphalf of
Carter ,`t •`e'ss,•Ine Ste"
An t
K:\071814-Bridle Creek\Desc\DistrictParcels\District2.doe Page 1 of 2
Crier&Burgess,Inc Carter a Burgess Consultants, Inc
:3C5 Architects/Engineers,Inc. C&fi Architects/Engineers,PC. C88 Nevada. :nc.
- NW COR. SEC. 18
RECOVERED&ACCEPTED
st mom`.",SRS DRS g P N'ly Line NE 1/4 Sec. 18
POHLY TIN R6816 R6791 512 S7
513 S18 NP 1/4r COR.SEC.18 POINT OF tEGPMNG
2ooz Ps zaws 'ly Line NW 1/4 Sec. 18 R .CAAP REONERED &PLS 2294225 S 8745.0 "03$ E — —
S 89'36'58" E-rte S ;•
1625.4fi` 918.10' S 2S25'50"2 E
a I �,in BRIDLE CREEK I ^ W 217.74'
c l N. METROPOLITAN DISTRICT NO. 2 9�.19` , " C
rn 5+a et92D Acres S 6 4 6. S 70'42 07
w (3,688,460 eµMJ - - 403_.(6Q/\)-'
CA
0 N 43'45'56" E S 44'19'51.=V -,\ \
143.4 ,Y, ,
_ " 00�0 158.3- N 83'40'52" W
co jCB=N 84'0243 E �p`rt`o� 9
De=t1 S \ti 1c _ I I
Oil R=25.00' A=5.06' di 1 '
wl \-� . 0
I N-89'30L38=E ) --
I 885.95' � S 45'18'20" Q=
— z I e3- 165.00✓ {, z to .r --
= I h S J 1
At 4 e�Ee ter ( �_ —
ii
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.
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- II 130 Nc�O C,s1_\ i l
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N 89'3724" W o '
1038.67 �N _S'ly`Lin e 118_ Line NH 1 / c. 18
COj /4 EREDCOR.SEC.18A ` D C1/4 COR.SEC.18
RECOVERED &ACCEPTED
2 1/2•ALUMN.CAP RECOVERED&ACCEPTED
PIS 28258. .. 2ALUYN.CAP PIS 29425
0 150 SOO
600 1200
1 inch = 600 ft
CARTER & BURGESS PROJECT NO.
— CLIENT PROJECT NO.
REVISION DESCRIPI0N N 1/2 SEC. 18
DRAWN DOW IDATE 07-12-05'SCALE I'=6OO' T1 N R67W 6th P.M.
Carter=Burgess n"E BRIDLE CREEK
707 Seventeenth St, #2300, Denver, CO 80202 METROPOLITAN DISTRICT NO. 2
tJ0),msx•B r(z,)s0-"•i
1105 WTFIDAL AND ANY ASSOCIATED ELECTRONIC DATA WAS PREPARED NT CAMERA WARN: DRAWING NO. - SHEET NO.
BURGESS,MC.FOR TIC:PROJECT INDICATED.AIN PI=OR RoO EATION WITHOUT THE
TERM.CamFP OF CARTER a BURGESS SNAIL BE AT THE SOLE Risk OF ME USER. 0 DISTRICT2 2 OF 2
EXHIBIT E
Engineer's Estimate of Costs and Certification
707 17th Street
$v1 c.
00
Carter:Burgess ne C
"hone: 332 e235243
The Bridle Creek Metropolitan District No. 2
Probable Construction Cost Estimate
This engineer's 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.
On Site Costs
Based upon Opinion of Probable Costs for other planned developments in the vicinity of
the Bridle Creek Metropolitan District No. 2, a typical cost per acre for on-site
infrastructure construction is $45,000 per acre. This cost includes roadways, storm
sewer, sanitary sewer mains, water mains and minimal grading per City of Dacono
design specifications
The following costs are not included:
1. Offsite roadways and utilities
2. Lift stations
3. Landscaping
4. Private streets/parking and utilities (including water meters)
5. Dry utilities
6. Environmental
7. Geotechnical considerations
• 8. Fees (plan review, tap fees, application fees, impact, etc.)
— 9. Weld County coordination and submittals
10. Traffic signalization
This estimated cost per acre is provided with the understanding that it is not based on an
actual site development plan for the Bridle Creek Metropolitan District No. 2.
Accordingly, it should be used for preliminary planning purposes only. This Opinion of
Probable Costs for the Bridle Creek Metropolitan District No. 2 should be revised once
actual roadway, water distribution, sanitary collection and storm water management
systems have been designed for the development.
On Site Cost Estimate—82 acres @ $45,000/acre $3,690,000
Off Site Costs
Parks and Open Space
Offsite Landscaping (WCR 13) $ 56,250
Roadway Construction
Offsite Roadway (WCR 10 and WCR 13) $ 805,430
Waterline Construction
Offsite Waterline $ 50,000
[Note that offsite improvement costs for water will require adjustment once water district
and/or development agreements are in place.]
1cne s R jcs. In _crterF _ `Con≥c. w.
333 ec s.Eny veers 3P,B Archltecfs T g'meers, PC CR3 Nevada Inc.
Sanitary Sewer Construction
Offsite Sanitary $250,000
[Note that offsite improvement costs for sanitary sewer will require adjustment once
sanitation district and/or development agreements are in place.]
Storm Drainage Construction N/A
Total Probable Construction Costs for District Improvements
• Total Onsite Improvements $3,690,000
• Total Offsite Improvements $1,161,680
Combined Estimated of Probable Costs $4,851,680
Carter&Burgess,Inc. Carter&Burgess Architects/Engineers,Inc. Carter&Burgess Consultants,Inc.
C&B Architects/Engineers,Inc. C&B Architects/Engineers,RC. C&B Nevada,Inc.
707 17th Street
Seine 2300
Carter«Burgess
Denver,COC 80202-3404
Phone:303.320.5240
Fax:303.820.2402
www c-b.cam
August 30, 2005
City of Dacono
512 Cherry Street
P.O. Box 186
Dacono, CO. 80514
RE: Estimate of Probable Costs
Proposed Bridle Creek Metropolitan District No. 2
To Whom It May Concern:
I, Jeffrey Sean O'hearn, a Registered Professional Engineer in the State of Colorado,
have reviewed the Engineer's Estimate of Probable Construction Costs within the
proposed Bridle Creek Metropolitan District No. 2. The Engineer's Estimate of Probable
Construction Cost was based on the following information and assumptions:
• Quantities and associated costs for known off-site items were based on
• conceptual design of public improvements, as depicted in the Bridle Creek
Construction Plans dated June 2005, prepared by Carter & Burgess, which are
not approved by appropriate agencies. Costs for unknown off-site items were
estimated. On-site costs were estimated on a cost per acre basis; and
• Unit costs and per acre 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 Bridle Creek Metropolitan
District No. 2 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 subject district(e.g.,roadways and sidewalks, storm water
management system, water distribution system, sanitary sewer collection system and
parks/trails and open space) and believe the exhibits represent the conceptual design of
the public improvements as they are know at this time.
For and on behalf of %O0 REM,
Carter&Burgess, Inc. vd oozy SEAN°Kea
of fir°
°g� ae
ean O'Heam, .E. Vac ,°��
�
CO P.E. No. 33568 C °°°°«°°°°°s\t•
_ S�0NRL �6
Carter&Burgess,Inc Carter&Burgess Consultants, Inc.
C&8 Architects/Engineers,Inc. C&B Architects/Engineers,PC. CPA Nevada, Inc.
EXHIBIT F
Location of Public Improvements
U WMtY JOT Nal]
a
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A A O
aOm
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Z.�
1
°`"
/��arter::Buress STREETS,SIDEWALKS AND TRAILS EXHIBIT g AUGUST 2005
C
m, n, �.2300a1�ai BRIDLE CREEK METROPOLITAN ""E NOT TO SCALE
(,°f� „°0OFm(303)„o-,,,, DISTRICT No.2
DACONO,COLORADO
-
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aCm
n O m
ti m
0
Zr�
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D r
Nzz
e
M yy
PROPOSED'minket
•
•
WATERLINE EXHIBIT °°`
Ca Her BurgasNOT TO 2005
„ 17111 n, f 2300 AUGUST
BRIDLE CREEK METROPOLITAN DAVE
DENIER.a CO 50202
°° DISTRICT No.2 NOT TO SCALE
(303)11Q-53/0 !m(303)520-4842
DACONO,COLORADO
610 COLWIY ROW MI) (We SE[IIC.)
r p�
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•
•
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SANITARY SEWER EXHIBIT DATE AUGUST 2005
Car l SYrgess BRIDLE CREEK METROPOLITAN
J°oo7i.'m 7TH 57.CO 00202 E'x3°° NOT TO SCALE
(Y])u0-5240 Fax(303)em-484x DISTRICT No.2
DACONO,COLORADO
KID COMO R]W M.I3 (M7 SCOW
6
U
m
Fri A
A a
ti U
n
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•
•
•
•
•
Carter Burgess STORM WATER CONTROL EXHIBIT AUGUST 2005
80202
om BRIDLE CREEK METROPOLITAN SC"E
DOWER,CO NOT TO SCALE
(]03)82 -sxw F (,1N)820-4842 DISTRICT No.2
DACONO,COLORADO
stIO=NW ROO lb I3 Ste=SON)
•
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•
Carter Burgess LANDSCAPE AND OPEN SPACE EXHIBIT °A" AUGUST 2005
'70)117 cS S '2300 BRIDLE CREEK METROPOLITAN scat NOT TO SCALE
(303)524-5240 re,(103)820-.1„ DISTRICT No.2
DACONO,COLORADO
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
BRIDLE CREEK
METROPOLITAN
DISTRICT NO . 2
FORECASTED SURPLUS CASH
BALANCES
AND
CASH RECEIPTS AND DISBURSEMENTS
AUGUST 30, 2005
TABLE OF CONTENTS
PAGE
Accountant's Report 1
Forecast
Summary 2
Schedule of Estimated Assessed Valuation 4
Schedule of Estimated Bond Debt Service Requirements 6
Summary of Significant Forecast Assumptions and Accounting Policies 8
MClifton
Gunderson Xn LLP
Certified Public Accountants&Consultants
Accountant's Report
The Petitioners for Formation of
Bridle Creek Metropolitan District No. 2
Weld County, Colorado
We have compiled the accompanying forecasted surplus cash balances and cash receipts and
disbursements of Bridle Creek Metropolitan District No. 2 (the "District") (in the Formation Stage of
Development) as of the date of formation and for the calendar years ending through 2038, 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.
Ce,las-ncer-.4....,‘__, LLA
Greenwood Village, Colorado
August 30, 2005
Offices in 14 states and Washington,DC H LB International
I I I I I I I I I I I I I I I I 1 I I
BRIDLE CREEK METROPOLITAN DISTRICT NO.2
ON 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 2031
Cash Receipts Cash Disbursements Cash Balances
General Net Specific Annual Administrative Annual Cumulative
Total Fund Properly Ownership Developer Interest Total Costs Total Surplus Surplus
Collection Assessed Mill Taxes Taxes Contributions Income Cash $25,000 Cash Cash Cash Collection
Year Value Levy for at Receipts Inflated by Disbursements (Deficit) Balances Year
(See Page5) 98.0DY. 1000% Administrative 200% 2
2005 0 2005
2006 0 0000 0 0 25,000 0 25,000 25,000 25,000 0 0 2006
2007 88,740 5.000 435 44 25,250 0 25,729 25,500 25,500 229 229 2007
2008 332,316 5.000 1,628 163 25,000 5 26,796 26,010 26,010 786 1,015 2008
2009 580,764 5.000 2,846 285 24,000 20 27.151 26,530 26,530 621 1,636 2009
2010 844,020 5.000 4,136 414 22,500 33 27,083 27,061 27,061 22 1,658 2010
2011 1,102,505 5.000 5,402 540 21,750 33 27,725 27,602 27,602 123 1,781 2011
2012 1,413,057 5.000 6,924 692 20,750 36 28,402 28,154 28,154 248 2,029 2012
2013 2,782,161 5.000 11,673 1,167 16,000 41 28,881 28,717 28,717 164 2,193 2013
2014 4,686,648 5.000 22,965 2,297 4,200 44 29,506 29,291 29,291 215 2,407 2014
2015 6,268,761 5000 30,717 3,072 48 33,837 29,877 29,877 3,960 6,367 2015
2016 6,394,136 5.000 31,331 3,133 127 34,591 30,475 30,475 4,116 10,483 2016
2017 6,394,136 5.000 31331 3,133 210 34,674 31,084 31,084 3,590 14,073 2017
2018 6,522,019 5.000 31,958 5196 281 35,435 31,706 31,706 3,729 17,802 2018
2019 6,522,019 5.000 31,958 3,196 356 35,510 32,340 32,340 3,170 20,972 2019
2020 6,652,459 5.000 32,597 3,260 419 36,276 32,987 32,987 3,289 24,261 2020
2021 6,652,459 5.000 32,597 3,260 485 36,342 33,647 33,647 2,695 26,956 2021
2022 6,785,508 5.000 33,249 3,325 539 37,113 34,320 34320 2,793 29,749 2022
2023 6,785,508 5.000 33,249 3,325 595 37,169 35,006 35,006 2,163 31,912 2023
2024 6,927 219 5.000 33,914 3391 678 37,943 35,706 15,706 2,237 34,149 2024
2025 6,921,219 5.000 33,914 3,791 683 37,988 36,420 36,420 1,568 35,717 2025
2026 7,059,643 5.000 34,592 3,459 714 38,765 37,149 37,149 1,616 37,333 2026
2027 7,059,643 5.000 34,592 3,459 747 38,798 37,892 37,892 906 38,239 2027
2028 7,200,836 5.000 35,284 3,528 765 39,577 38,649 38,649 928 39,167 2028
2029 7,200,836 5.000 35,284 3,528 783 39,595 39,422 39,422 173 39,339 2029
2030 7,344,853 5.000 35,990 3,599 787 40,376 40,211 40,211 165 39,505 2030
2031 7,344,853 5.000 35,990 3,599 790 40379 41,015 41,015 (636) 38,868 2031
2032 7,491,750 5.000 36,710 3,671 777 41,158 41,835 41,835 (677) 38,191 2032
2033 7,491,750 5.000 36,710 3,671 764 41,145 42,672 42,672 (1,527) 36,664 2033
2034 7,641,585 5.000 37,444 3,744 733 41,921 43,526 43,526 (1,605) 35,059 2034
2035 7,641,585 5.000 37,444 3,744 701 41,889 44,396 44,396 (2,507) 32,552 2035
2036 7,794,416 5.000 38,193 3,819 651 42,663 45,284 45,284 (2,621) 29,931 2036
2037 7,794,416 5000 38,193 3,819 599 42,611 46,190 46,190 (3,579) 26,352 2037
2038 7,950305 5.000 38,956 3,8% 527 43,379 47,114 47,114 (3,735) 22,618 2038
888,206 88,820 184,450 13,931 1,175,407 1,152,789 1,152,189 22,618
This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report.
Page 2
I I I I I I I I I I I I I I I I I I I
BRIDLE CREEK METROPOLITAN DISTRICT NO.2
(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 2031
Cash Receipts Cash Balances
Debt Net Specific Townhome Multi-Family Total Cumulative Net Cumulative Total Annual Cumulative
Total Service Property Ownership Residential Residential Interest Annual Cash Debt Service Cash Available Bonds Surplus Fund Cash Surplus Surplus
Collection Assessed Fund Taxes Taxes Facility Fee Facility Fee Income Cash Available on for Surplus Transfer to Cumulative Maximum Debt to Disbursements Cash Cash Collection
Year Value Mill per Unit @ per Unit @ at Receipts for 2008 Bonds Fund (Release from) Surplus Balance Assessed (Deficit) Balances Year
(See Page s) Levy 9800% 1000% SLOW S750 200% Debt Service (See Page 6) Surplus Fund Balance $280,000 Ratio
2005 0 2005
2006 0 0000 0 0 20,000 0 0 20,000 20,000 0 20,000 0 20,000 20,000 2006
2007 88,740 35.000 3,044 304 20,000 0 400 23,748 43,748 0 43,748 0 23,748 43,748 2007
2008 332,316 35.000 11,398 1,140 20,000 0 875 33,413 77,161 0 77,161 77,161 77,161 280,000 843% 77,161 (43,748) 0 2008
2009 580,764 35000 19,920 1,992 20,000 0 0 41.912 41912 0 41,912 41,912 119,073 280,000 482% 41,912 0 0 2009
2010 844,020 35.000 28,950 2,895 20,000 0 0 51,845 51,845 0 51,845 51,845 170,918 280,000 332% 51,845 0 0 2010
2011 1,102,505 35.000 37,816 3,782 26,000 0 0 67,598 67,598 0 67,598 67,598 238,516 280,000 254% 67,598 0 0 2011
2012 1,413,057 35.000 48,468 4,847 0 136,500 0 189,815 189,815 210,000 (20,185) (20,185) 218,331 280,000 198% 189,815 0 0 2012
2013 2,382,161 35.000 81,708 8,171 0 136,500 0 226,379 226,379 225,000 1,379 1,379 219,710 280,000 117% 226,379 0 0 2013
•
2014 4,686,648 35.000 160,752 16,075 0 0 0 176,827 176,827 208,875 (32,048) (32,048) 187,662 280,000 59% 176,827 0 0 2014
2015 6,268,761 33.100 203,346 20,335 0 0 0 223681 223,681 233,875 (10,194) (187,662) 0 D 44% 46,213 177,468 177,468 2015
2016 6,394,136 33.100 207,413 20,741 0 0 3,549 231,703 409,171 237,000 43% 237,000 (5,297) 172,171 2016
2017 6,394,136 33.100 207,413 20,741 0 0 3,443 231,597 403,76B 239,750 42% 239,750 (8,153) 164,018 2017
2018 6.522,019 33.100 211,561 21,156 0 0 3,280 235,997 400,015 237,125 41% 237,125 (1,128) 862,890 2018
2019 6,522,019 33.100 211,561 21,156 0 0 3,258 235,975 398,865 244,500 40'6 244,500 (8,525) 154,365 2019
2020 6,652,459 33.100 215,792 21,579 0 0 3,087 240,458 394,823 246,125 39% 246,125 (5,667) 148,698 2020
2021 6,652,459 33.100 215,792 21,579 0 0 2,974 240,345 389,043 247,375 38% 247,375 (7,030) 141,668 2021
2022 6,785,508 33.100 220,108 22,011 0 0 2,833 244,952 386,620 248,250 36% 248,250 (3,298) 138,370 2022
2023 6,785,508 33.100 220,108 22,011 0 0 2,767 244,886 383,256 253,750 35% 253,750 (8,864) 129,506 2023
2024 6,921,219 33.100 224,511 22,451 0 0 2,590 2_495522 379,058 253,500 33% 253,500 (3,948) 125,558 2024
2025 6,921,219 33.100 224,511 22,451 0 0 2,511 249,473 375,031 257,875 32% 257,875 (8,402) 117,156 2025
2026 7,059,643 33.100 229,001 22,900 0 0 2,343 254,244 371,400 261,500 30% 261,500 (7,256) 109,900 2026
2027 7,059,643 33.100 229,001 22,900 0 0 2,198 254,099 363,999 264,375 29% 264,375 (10,276) 99,624 2027
2028 7,200,836 33.100 233,581 23,358 0 0 1,992 258,931 358,555 261,500 27% 261,500 (2,569) 97,055 2028
2029 7,200,836 33.100 233,581 23,358 0 0 1,941 258,880 355,935 268,250 25% 268,250 (9,370) 87,685 2029
2030 7,344,853 33.100 238,252 23,825 0 0 1,754 263.831 351,516 268,875 22% 268,875 (5,044) 82,641 2030
2031 7,344,853 33.100 238,252 23,825 0 0 1,653 263,730 346,371 273,750 20% 273,750 (10,020) 72,621 2031
2032 7,491,750 33.100 243,017 24,302 0 0 1,452 268,771 341,392 272,500 182. 272,500 (3,729) 68,892 2032
2033 7,491,750 33.100 243,017 24,302 0 0 1,378 268,697 337,589 280,500 15% 280,500 (11,803) 57,089 2033
2034 7,641,585 33.100 247,878 24,788 0 0 1,142 273,808 330,897 282,000 13% 282,000 (8,192) 48,897 2034
2035 7,641,585 33.100 247,878 24,788 0 0 978 273,644 322,541 287,375 10% 287,375 (13,731) 35,166 2035
2036 7,794,416 33.100 252,835 25,284 0 0 703 278,822 313,988 286,250 7% 286,250 (7,428) 27,738 2036
2037 7,794,416 33.100 252,835 25,284 0 0 555 278,674 306,412 289,000 0% 289,000 (10,326) 17,412 2037
2038 7,950,305 33.100 257,892 25,789 0 0 348 284,029 301,441 290,250 0% 290,250 (6,221) 11,191 2038
5,901,192 590,120 126,000 273,000 50,004 6,940,316 6,929,125 0 ', 6,929,825 11,191
This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report.
I Page 3
I
I I I I I I I I I I I I I I I I I I
BRIDLE CREEK METROPOLITAN DISTRICT NO.2
(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 2038
TOTAL RESIDENTIAL UNITS
TH-Townhome Lots®1100 Sq Ft Units MF-Condominium Lots®1000 Sq Ft Units MF-Condominium Lots®900 Sq Ft Units TOTAL RESIDENTIAL UNITS Est.Biennial Cumulative Estimated
Em.Market Annual Est.Market Annual Est.Market Annual Annual Annual Revaluation Market Residential RESIDEN IA1.
Construction Collection Number of Value per Value 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 Dwelling Unit of New Residential Residential Statute at of New Ratio VALUATION
Units $153,000 Units Units $150,000 Units Units $130,000 Units Units Units 200% Units
Inflation compounded annually on base prii 200% 2.00% 2
2005 2007 0 0 0 7.96% 0
2006 2008 20 153,000 3060000 150,000 0 130,000 0 20 3,060,000 0 3,060,000 7.96% 243,576
2007 2009 20 156,060 3,121,200 153000 0 132,600 0 20 3,121,200 6,181200 7.96% 492,024
2008 2010 20 159,181 3,183,624 156,060 0 135,252 0 20 3,183,624 123,624 9,488,448 7.96% 755,280
2009 2011 20 162,365 3,247,296 159,181 0 137,957 0 20 3,247,296 12,735,744 7.96% 1,013,765
2010 2012 20 165,612 3,312,242 162,365 0 140,716 0 20 3,312242 254,715 16,302,701 7.96% 1,297,695
2011 2013 26 168,924 4,392,033 165,612 0 143,531 0 26 4,392,033 20,694,734 7.96% 1,647,301
2012 2014 172,303 0 84 168,924 14,189,646 98 146,401 14,347,309 182 28,536,955 413,895 49,645,584 7.96% 3,951,788
2013 2015 175,749 0 B4 172,303 14,473,439 98 149,329 14,634,255 182 29,107,694 78,753,278 7.96% 6,268,761
2014 2016 179,264 0 175,749 0 152,316 0 0 0 1,575.066 80,328,344 7.96% 6,394,136
2015 2017 182,849 0 179,264 0 155,362 0 0 0 80,328,344 7.96% 6,394,136
2016 2018 0 0 1,606,567 81,934,911 7.96% 6,522,019
2017 2019 0 0 81 934,911 7.96% 6,522,019
2018 2020 0 0 1,638,698 83,573,609 7.96% 6,652,459
2019 2021 0 0 83,573,609 7.96% 6,652,459
2020 2022 0 0 1.671,472 85,245,081 7.96% 6,785,508
2021 2023 0 0 85,245,081 7.96% 6,785,508
2022 2024 0 0 1,704,902 86 949,983 7.96% 6,921,219
2023 2025 0 0 86,949,983 7.96% 6,921219
2024 2026 0 0 1,739,000 88,688,983 7.96% 7,059,643
2025 2027 0 0 88,688,983 7.96% 7,059,643
2026 2028 0 0 1,%73,780 90,462,763 7.96% 7,200,836
2027 2029 0 0 90,462,763 7.96% 7,200,836
2028 2030 0 0 1,809,255 92,272,018 7.96% 7,344,853
2029 2031 0 0 92,272,018 7.96% 7,344,853
2030 2032 0 0 1845,440 94,117,458 7.96% 7,491,750
2031 2033 0 0 94,117,458 7.96% 7491,750
2032 2034 0 0 1,882,349 95,999,807 7.96% 7,641,585
2033 2035 0 0 95,999,807 7.96% 7,641,585
2034 2036 0 0 1,919,996 97919,803 7.96% 7,794,416
2035 2037 0 0 97.919,803 7.96% 3794,416
2036 2038 0 0 1958,396 99,878,199 7.96% 7,950,305
126 20,316,395 168 28,663,085 196 28,981,564 490 77,961,044 21917,155
This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report.
Page 4
I I I I I I I I I I I I I I I I I I I
BRIDLE CREEK METROPOLITAN DISTRICT NO.2
(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 203E
Undeveloped Land '
TH-Townhome Lots®1100 Sq Ft Units MF-Condominium Lots®1000 Sq Ft Units MF-Condominium Lots®900 Sq Ft Units Annual Cumulative Estimated
Planed& Less: Annual Platted& Less: Annual Platted& Less'. Annual Market Market Land LAND RESIDENTIAL TOTAL
Construction Collection Improved Lots Lots Actual Improved Lots Lots Actual Improved Lots Lots Actual Value of Value of Assessment ASSESSED ASSESSED ASSESSED Collection
Year Year 3153,000 Used Value 5150,000 Used Value $130,000 Used Value Undeveloped Undeveloped Ratio VALUATION VALUATION VALUATION Year
10.00% 10.00% 10 Land Land (See Page 4)
2005 2007 306,000 0 306,000 0 0 0 0 0 0 306,000 306,000 29.00/. 88,740 0 88,740 2007
2006 2008 306,000 (306,000) 0 0 0 0 0 0 0 0 306,000 29.00% 88,740 243,576 332,316 2008
2007 2009 306.000 (306,000) 0 0 0 0 0 0 0 0 306,000 29.00% 88,740 492,024 580,764 2009
2008 2010 306,000 (306,000) 0 0 0 0 0 0 0 0 306,000 29.00/. 88,740 755,280 844,020 2010
2009 2011 306,000 (306,000) 0 0 0 0 0 0 0 0 306,000 29.00% 88,740 1,013.765 1,102,505 2011
2010 2012 397,800 (306,000) 91,800 0 0 0 0 0 0 91900 397,800 2900% 115,362 1297,695 1,413,057 2012
2011 2013 0 (397,800) (397,800) 1,260,000 0 1,260,000 1,274,000 0 1,274,000 2,136,200 2,534,000 29.00% 734,860 1,647301 2,382,161 2013
2012 2014 0 0 0 1,260,000 (1260,000) 0 1,274,000 (1,274,000) 0 0 2,534,000 29.00% 734,860 3,951,788 4,686,648 2014
2013 2015 0 0 0 0 (1,260,000) (1,260,000) 0 (1,274,000) (1,274,000) (2,534,000) 0 29.00% 0 6,268,761 6268,761 2015
2014 2016 0 D 0 0 0 0 0 0 0 0 0 29.00% 0 6,394,136 6,394,136 2016
2015 2017 0 0 0 0 0 0 0 0 0 0 0 29.00% 0 6,394,136 6,394,136 2017
2016 2018 0 0 29.00% 0 6,522,019 6,522,019 2018
2017 2019 0 0 29.00/. 0 6,522,019 6,522,019 2019
2018 2020 0 0 29.00/. 0 6,652,459 6,652,459 2020
2019 2021 0 0 29.00% 0 6,652,459 6,652,459 2021
2020 2022 0 0 29.00% 0 6,785,508 6,785,508 2022
2021 2023 0 0 29.00% 0 6,785,508 6,785,508 2021
2022 2024 0 0 29.00% 0 6,921,219 6,921,219 2024
2023 2025 0 0 29.00% 0 6,921,219 6,921,219 2025
2024 2026 0 0 29.00% 0 7,059,643 7,059,643 2026
2025 2027 0 0 29.00% 0 7,059,643 7,059,643 2027
2026 2028 0 0 2900% 0 7,200,836 7,200,836 2028
2027 2029 0 0 2900% 0 7,200,836 7,200,836 2029
2028 2030 0 0 29.00% 0 7,344,853 7344,853 2030
2029 2031 0 0 29.00% 0 7344,853 7,344,853 2031
2030 2032 0 0 29.00% 0 7,491,750 7,491,750 2032
2031 2033 0 0 29 0 7,491,750 7,491,750 • 2033
2032 2034 0 0 29.00% 0 7,641,585 7,641,585 2034
2033 2035 0 0 2900% 0 7,641585 7,641,585 2035
2034 2036 0 0 29.00% 0 7,794,416 7,794,416 2036
2035 2037 0 0 29.00% 0 7.794,416 7,794,416 2037
2036 2038 0 0 29.00% 0 7,950,305 7,950,305 2078
1,927,800 (1,927,800) 0 2,520,000 (2,520,000) 0 2,548,000 (2,548,000) 0
This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report
I Page 5
BRIDLE CREEK METROPOLITAN DISTRICT NO.2
(IN THE FORMATION STAGE OF DEVELOPMENT)
FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS
GENERAL AND DEBT SERVICE FUNDS ONL\
SCHEDULE of ESTIMATED BOND DEBT SERVICE REQUIREMENTS
AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 203
Series 2008 Bond Issue
Dated: December 1,2008 52400,000
Issued: December I,2008
Interest Rat 7.500% Principal payments due on Dec.I.
Reduce Debt Net 2008
Ouumnding Total 2008 Service By Beads
Principe) Bonds Capitalized Debt Service
Year Principal Coupon Interest Balance Debt Service Interest Payment, Year
(See Page li
2008 0 2,800000 0 0 2008
2009 7.500% 210,000 2,800000 210,000 (210.000) 0 2009
2010 7.500% 210,000 2,800,000 210,000 (210.000) 0 2010
2011 7.500% 210,000 2,600,000 210,000 (210,000) 0 2011
2012 7.500% 210.000 2,800,000 210,000 210,000 2012
2013 15,000 7.500% 210,000 2,785,000 225,000 225,000 2013
2014 7 500% 208,875 2,785,010 208875 208,875 2014
2015 25,000 7.500% 208,875 2,760,000 233,875 233,875 2015
2016 30,000 7.500% 207,000 2,730,000 237,000 237,000 2016
2017 35,000 7.500% 204,750 2,695,000 239.750 139,750 2017
2018 35,000 7.500% 202,125 2,660,000 237,125 237,125 2018 '
2019 45,000 7.500% 199.510 2,615,000 244,500 244,500 2019
2010 50,000 7.500% 196,125 2,565,000 246,125 246,125 2020
2021 55,000 7.500% 192,375 2,510,000 247,375 247,375 2021
2022 60,000 7.500% 188,250 2,450,000 248,250 248,250 2022
2023 70,000 7.500% 183,750 2,380010 253,750 253,750 2023
2024 75,000 7.500% 178,500 2,305,000 253,500 253,500 2024
2025 85,000 7.500% 172,875 2,220,000 257,875 257,875 2025
2026 95,000 7.500% 166,500 2,125,010 261,500 261,500 2026
2027 105,000 7.500% 159.375 2,020,000 264,375 264,375 2027
2028 110,000 7.500% 151,500 1,910,000 261,500 261,500 2028
2029 125,000 7 500% 143.250 1,785,000 268,250 268,250 2029
2030 135,000 7500% 133,875 1,650,000 268,875 268,875 2030
2031 150,000 7.500% 123,750 1,510,000 273,750 273,750 2031
2032 160,000 7.500% 112,500 1,340,000 272,500 272,500 2032
2033 180,000 7.500% 100,500 1,160.00 280,500 280,500 2033
2034 195,000 7.500% 87,000 965,000 28^_,000 282,000 2034
2035 215,000 7.500% 72.375 750,000 207,375 287,375 2035
2036 230,000 7.500% 56,250 520,000 286250 286,250 2036
2037 250,000 7.500% 39.000 270,000 289,000 289,000 2037
2038 270,000 7.500% 20,250 0 290,250 290,250 2038
2.800,00D 4,759.125 I 7.559,125 (630.000) 6,929.125
USE OF PROCEEDS-
Developer Reimbursement 2,089,795
Capitalized Interest 598,205 Interest at 3 000%
Issuance CODs 112,000
52.800.000
Note'. The net proceeds of the bonds",II 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 oN3 in connection with the accompanying Summary of Significant Forecast Assumplions and Accounting Policies
and Accountant's Report.
Page 6
I ► I I I ► I I I ► ► ► l
BRIDLE CREEK METROPOLITAN DISTRICT NO.2
(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 2038
CALCULATION of CAPITALIZED INTEREST on SERIES 2008 BOND
ISSUANCE
Beginning Capitalized Interest at Disbursements Ending
Date Balance Interest 3.000% To Debt Service Balance
(See Page 6) (See Page 6)
• 12/01/2008 0.00 598,204.64 598,204.64
6/01/2009 598,204.64 8,973.07 (105,000.00) 502,177.71
12/01/2009 502,177.71 7,532.67 (105,000.00) 404,710.38
6/01/2010 404,710.38 6,070.66 (105,000.00) 305,781.04
12/01/2010 305,781.04 4,586.72 (105,000.00) 205,367.76
6/01/2011 205,367.76 3,080.52 (105,000.00) 103,448.28
12/01/2011 103,448.28 1,551.72 (105,000.00) 0.00
598,204.64 31,795.36 (630,000.00)
This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions anc
Accounting Policies and Accountant's Report.
•
Page 7
BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
(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 Bridle Creek Metropolitan District No. 2 (the "District") (in the Formation
Stage of Development), located in the City of Dacono (the "City") in Weld County, Colorado. It
is to display 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, of 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 value of residential properties are forecasted to increase 2% per year,
starting in 2007 through build-out. The market value 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 2008 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 81.920 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, sanitary sewer, landscaping, storm drainage, and park and recreation improvements
needed for the area.
Page 8
BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
(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 will 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 $2,800,000 of debt with one bond
issue. 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 2007. 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 Bridle Creek, LLC, a Colorado 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 2006. 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 9
BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
(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 2007, for the combined
purposes of debt service and administration. The initial mill levy for the General Fund is
expected to be set at 5 mills and remain at such throughout the period of the forecast. The initial
mill levy for the Debt Service Fund is expected to be set at 35 mills and be reduced to lower
levels in future years as displayed in the forecast.
The Gallagher Amendment to the Colorado Constitution 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.
Pursuant to House Bill 05-1289, the residential assessment ratio will remain at 7.96% in 2005 for
collection in 2006. 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 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 2008 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 2007 ("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 10
BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
(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 the development of infrastructure within the District for platted and
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 81.920 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) FACILITY FEE
The forecast anticipates that the Board of Directors will set a facility fee, projected to be
collected at the time of a request for a building permit from the builder based upon $1,000 for
each townhome residential unit and $750 for each multi-family 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 11
BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
(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
bonds 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 3%. The calculation of
this interest is also shown as a separate Schedule 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 $25,000 in 2006. Beginning in 2007, these disbursements have been
increased for inflation by 2%per year throughout the term of the forecast. Should administrative
costs exceed the forecasted amount, the Developer will contribute funds to the District for the
shortfall. These administrative services are necessary as long as bonds are outstanding
throughout the life of the District.
Page 12
BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
(In the Formation Stage of Development)
SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS
AND ACCOUNTING POLICIES
August 30,2005
NOTE 12) INFRASTRUCTURE IMPROVEMENTS
The estimated cost of the capital infrastructure improvements to be funded under the Service
Plan is $4,851,680, 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).
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, 2008 in the amount of
$2,800,000. The proceeds of such debt will be used for issuance costs, capitalized interest, 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, 2009, and per the scheduled maturities are payable over a
30-year period,with the final payment on December 1, 2038.
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 2008 Bonds in any year will be deposited to and held in
the Surplus Fund, up to a maximum amount of$280,000. The forecast assumes that the Debt to
Assessed Ratio will be equal to or less than 50% in 2015, at which time the Surplus Fund will be
terminated and any moneys therein applied to any legal purpose of the District.
Page 13
BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
(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 3%, and other related debt service costs for the
proposed Series 2008 Bonds have been provided to Management by Kirkpatrick Pettis, the
proposed underwriter of the proposed bond issuance of the District.
This information should be read in connection with the accompanying Accountant's Report
and forecast of financial information.
Page 14
®DRM REAL ESTATE ADVISORS,LLC
Consulting.Research& Valuation
August 28,2005
Ms. Jennifer L. Gruber,Esq.
Miller,Gruber&Roseubluth,LLC
700 17th Street
Denver,Colorado 80202
and
City of Dacono
Town Planner/Planning Department
512 Cherry Avenue
Dacono,Colorado 80514
Re: The Proposed Bridle Creek MD Residential Development
(Proposed residential subdivision development
containing 126 townhomes and 364 Condominium units)
South of WCR#10,between WCR#13 and WCR#15
Dacono, Colorado
Dear Ms.Gruber and the City of Dacono Planning Department:
I was engaged by Bridle Creek 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.
Bridle Creek Metropolitan District No. 2
Relative to the subject's multi-family lots/units (i.e., 364 multi-family lots/unit and 126
townhomes), 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.
Re ectfully submitted,
AL ESTATE ADVISORS,LLC
Derek R.Maunsell,MAI
(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
Bridle Creek development
Dear City Council:
We have reviewed the above-referenced study conducted by DRM Real Estate Advisors,
LLC and support its findings. Please note that 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 internal projections derived from more than twenty years experience as real
estate developers and our involvement in the north front range real estate market, we believe that
rates of absorption will increase in the future to correspond with those projected in the financing
plan. While the real estate market is by its nature difficult to predict, fundamental constrictions
in the housing supply, a strong Colorado economy, and the continued development of the
regional transportation infrastructure strongly suggest that growth will accelerate along the I-25
corridor. In particular, we believe that a large segment of the home-buying population will be
attracted to Dacono because it offers the advantages of a pleasant exurban lifestyle combined
with multiple viable transportation options. Our experience suggests that trend-lines drawn from
historical data do not always capture the dynamics of a region in transition. We believe that
Dacono is undergoing a transition and historical trends in housing absorption will shift upwards
as the town enters a new growth phase.
Since DRM Real Estate Advisors, LLC conducted a simple linear regression analysis on
historical housing data in the Dacono area to estimate absorption rates, we believe their results
slightly understate the actual absorption rates our development will experience over the coming
years. Nonetheless, their study is a valid and useful prediction based on standard industry
techniques. Further, the study serves as an important baseline for the adjustments we have made.
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
Bridle Creek Metropolitan District No. 2 formation application.
Please do not hesitate to call with any questions you have about this correspondence.
Very truly yours,
BRIDLE CREEK, LLC, a Colorado limited liability
company
4
Bruce Galloway, anager
Bridle Creek No.2/Service Plan
JLG0723
0834.0003
EXHIBIT H
Underwriter's Letters
Kirkpatrick Pettis
A Division of D.A.Davidson&Co.
Fixed Income Capital Markets
August 22,2005
Jennifer Gruber
Miller, Gruber&Rosenbluth, LLC
700 17th Street, Suite 2200
Denver CO 80202
RE: Proposed Bridle Creek Metropolitan District No. 2
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 Bridle Creek Metropolitan District No. 2. 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. The interest rate assumptions contained in the Service Plan are reasonable
based on current market conditions.
Because the financing in these districts is intended to pay for public infrastructure, we issue
bonds as close to the time the infrastructure is needed as possible. During the period of time
when homes are being constructed but not yet on the tax rolls,the District is projected to meet its
debt service obligation with capitalized interest. 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 a 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,
Thomas R. Bishop
Senior Vice President
Kirkpatrick Pettis
Dix I t.ron of D.A.Davidson&Co.
F iverl Income Capital,market
Kirkpatrick Pettis
A Division of D.A.Davidson&Co.
Fixed Income Capital Markets
July 5, 2005
Petitioners for Bridle Creek Metropolitan District No. 2
c/o Bruce Galloway
Pacwest
203 Parfitt Way, Suite 200
Doc Side Building
Bainbridge Island, WA 98110
RE: Letter of Intent—Proposed Bridle Creek Metropolitan District No. 2
Dear Petitioners:
The Petitioners are in the process of organizing the proposed Bridle Creek Metropolitan
District No. 2 (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
Kirkpatrick Pettis
A Di-vision of D.A.Dcv:dson 3 Co.Fixed Income Cooiiol Markers
1600 Broadway,Suite 1100 • Denver.Colorado 80202-4922 . (303) 764-6000 • (800) 942-7557 • Fax (303) 764-6002
www.dodavidson.com • www.kpsp.com
D.A. Davidson & Co.
member SIPC
Bridle Creek Metropolitan District No. 2
Page 2 of 4
certain approving opinions when the securities are delivered. All fees and expenses
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 Phh is m of D.A.Davidson&Co.
Filed Income Capital:Markets
Bridle Creek Metropolitan District No. 2
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 or the District becomes an organized legal entity.
Any action to terminate by notice shall provide no less than 30 days notice prior to
termination. An action to terminate by notice will include a breakup fee of$20,000 owed
to Kirkpatrick Pettis for services rendered. However, in the event the District is not
Kirkpatrick Pettis
A DR Rion of D.A.Davidson&Co.
Fixed Income Capita IMarkets
Bridle Creek Metropolitan District No. 2
Page 4 of 4
organized within one year of the date of this letter agreement, no break-up fee shall apply
to termination of this letter agreement.
After the organization of the District, Bridle Creek, LLC shall use its best efforts to have
the District enter into a letter of intent with Kirkpatrick Pettis. This letter of intent shall
include a break up fee of$35,000. After the first issuance the breakup fee will not apply to
any subsequent issues. Kirkpatrick Pettis may resign as investment banker to the District
by providing written notification with no less than 30 days notice to the District.
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
14.4
Thomas R. Bishop Samuel R. Sh p
Senior Vice President Vice President
ACCEPTED this &tin day of 3(4 ly 2005.
Proposed Bridle Creek Metropolitan District No. 2
146
Authorized Officer
Kirkpatrick Pettis
A Divisioh of D.A.Davidson&Co.
Fixed income Capital Markets
EXHIBIT I
Legal Counsel Letter
Miller, Gruber& Rosenbluth, LLC
ATTORNEYS AT LAW
Dianne D.Miller* www.mgrlawfirm.com
Jennifer L.Gruber*
700 17th Street,Suite 2200 Telephone: (303)285-5320
t
Monica A.Rosenbluth .
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 Bridle Creek Metropolitan District No.2
This firm has acted as counsel to the Petitioners in connection with the organization of
the Bridle Creek Metropolitan District No. 2 (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 July 15; 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 firm
Very truly yours,
MILLER, GRUBER&ROSENBLUTH, LLC
Bridle Creek No.2/Service Plan
JLG1555
._ 0828.0003
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: Bridle Creek Metropolitan District No. 2
Ladies and Gentlemen:
This Indemnity Letter (the "Indemnity Letter") is delivered by the undersigned Bridle
Creek, LLC, a Colorado limited liability company ("Bridle Creek") 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 Bridle Creek Metropolitan District No. 2 (the
"District"). In consideration of the City's approval of the Service Plan, Bridle Creek, 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. Bridle Creek 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. Bridle Creek 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 Bridle Creek, 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. Bridle Creek 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. Bridle Creek 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 Bridle Creek 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. Bridle Creek 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 Bridle
Creek 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. Bridle Creek 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 Bridle Creek 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 Bridle
Creek.
Very truly yours,
BRIDLE CREEK, LLC,
a Colorado limited liability company
4
Bruce Gallowa , Manager
, 2005
(Date of Organizational Meeting)
City of Dacono
Post Office Box 186
Dacono, Colorado 80514
RE: Bridle Creek Metropolitan District No. 2
Ladies and Gentlemen:
This Indemnity Letter (the "Indemnity Letter") is delivered by the Bridle Creek
Metropolitan District No. 2 (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, Bridle Creek, LLC,
a Colorado limited liability company ("Bridle Creek"), 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,
BRIDLE CREEK METROPOLITAN DISTRICT
NO. 2
President
EXHIBIT K
Form of District Disclosure Statement
BRIDLE CREEK METROPOLITAN DISTRICT No. 2
WELD COUNTY,COLORADO
DISCLOSURE STATEMENT
Pursuant to Article XII of the Service Plan
of Bridle Creek Metropolitan District No. 2
DISTRICT ORGANIZATION:
The Bridle Creek Metropolitan District No. 2 (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 Bridle Creek
Metropolitan District No. 2, 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, sanitary sewer, 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
Bridle Creek 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 2006 through
2038 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.
BRIDLE CREEK METROPOLITAN
DISTRICT NO. 2
President
STATE OF COLORADO )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
200_, by as President of the Bridle Creek Metropolitan
District No. 2.
WITNESS my hand and official seal.
My commission expires:
Notary Public
EXHIBIT A
(Legal Description of District)
Bridle Creek\Service Plan
JLG1210
0811.0003
707 1 7th Street
Suite 2300
en
Carters=Burgess D
Denver;CO 80202-3404
Phone: 303.520 5240
July 12,2005 Fax:303.820.2402
wvw.c-b.com
Property Description
Bridle Creek Metropolitan District No. 2
A portion of the North Half of Section 18,Township 1 North,Range 67 West of the 6th Principal
Meridian,City of Dacono,County of Weld, State of Colorado,being more particularly described
as follows;
COMMENCING at the North Quarter corner of said Section 18 (a found 2"aluminum cap
stamped"PLS 29425"); •
WHENCE the Center Quarter corner of said Section 18(a found 2"aluminum cap stamped"PLS
29425")bears S00°27'38"E(Basis of Bearing-assumed)a distance of 2656.36 feet;
THENCE 587°45'08"E a distance of 919.03 feet to a point 30.00 feet southerly of the northerly
line of the Northeast Quarter of said Section 18,being the POINT OF BEGINNING;
THENCE S23°25'50"E a distance of 217.74 feet;
THENCE S70°42'07"W a distance of 402.60 feet;
THENCE S44°19'51"W a distance of 143.43 feet;
THENCE N83°40'52"W a distance of 228.30 feet;
THENCE NO3°45'56"E a distance of 58.37 feet;
THENCE 569°18'20"W a distance of 446.77 feet;
THENCE S50°18'20"W a distance of 1225.00 feet;
' THENCE S45°18'20"W a distance of 165.00 feet;
THENCE S24°28'45"W a distance of 698.55 feet;
THENCE S00°22'36"W a distance of 566.29 feet;
THENCE N89°37'24"W along the southerly line of the Northwest Quarter of said Section 18 a
distance of 1038.67 feet;
THENCE N00°11'49"W along a line being 30.00 feet easterly of and parallel with the westerly
line of the Northwest Quarter of said Section 18 a distance of 1374.87 feet;
THENCE N89°50'38"E tangent with the following described curve a distance of 885.95 feet;
THENCE along the arc of a curve to the left,having a central angle of I1°35'50", a radius of
_ 25.00 feet, a chord bearing N84°02'43"E a distance of 5.05 feet,and an arc distance of 5.06 feet;
THENCE N00°09'22"W non-tangent with the last described curve a distance of 1242.75 feet;
THENCE 589°36'58"E along a line being 30.00 feet southerly of and parallel with the northerly
line of the Northwest Quarter of said Section 18 a distance of 1625.46 feet;
THENCE S89°37'23"E along a line being 30.00 feet southerly of and parallel with the northerly
line of the Northeast Quarter of said Section 18 a distance of 918.10 feet to the POINT OF
BEGINNING.
Con •inm •,••• *. r :•,.. a fe- .. (81.920 Acres),more or less.
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—
10 300
600 12
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CARTER & BURGESS PROJECT NO.
CLIENT PROJECT NO. N 1/2 SEC. 18
- REVISION DESCRIPTION
DRAWN DGW IDATE 07-12-05 ISCAJF I.=600' T1 N R67W 6th P.M.
Carfer°Burgess IDLE: BRIDLE CREEK
707 Seventeenth en S)�2300,D CO 80202 METROPOLITAN DISTRICT NO. 2
Tic MATERIAL NC NOV ASSOCIATED EILCIPoMIC DATA WAS PREPARED if CAREER! RE iSION: DRAWING NO. SHEET NO.
OURGESS,.MC.MEEDI COMMIT CARTER a BURGESS AI BE AT TIC SOU c a 11E USER. 0 DISTRICT2 2 OF 2
EXHIBIT L
Form of City Disclaimer Statement
CITY OF DACONO, COLORADO-DISCLAIMER STATEMENT
As a requirement imposed in its formation process, the Bridle Creek Metropolitan
District No. 2 (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
BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
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 BRIDLE CREEK METROPOLITAN DISTRICT
NO. 2, 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
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 Bridle Creek 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].
BRIDLE CREEK METROPOLITAN DISTRICT NO. 2
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 BRIDLE CREEK ME I'ROPOLITAN DISTRICT NO. 1
AND BRIDLE CREEK METROPOLITAN DISTRICT NO. 2 IN THE CITY OF DACONO,
COUNTY OF WELD, STATE OF COLORADO
RESOLUTION NO. 05-67
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 Plans of the proposed Bridle Creek Metropolitan
District No. 1 and Bridle,CreekMetropolitan District No. 2 (hereinafter collectively referred to
as "Bridle Creek Metropolitan Districts 1 and 2" or the "Districts") on the 22n° day of August
2005; and
WHEREAS, the City Council has considered the Service Plans 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 Plans 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 Bridle Creek, LLC, a
Colorado 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 Service Plans for the proposed
Bridle Creek Metropolitan Districts 1 and 2 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 the proposed special
districts 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
Plans 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 Districts;
1
(b) The existing service in the area to be served by the proposed Districts is
inadequate for present and projected needs;
-r
(c) The proposed Districts are capable of providing economical and sufficient
service to the area within their proposed boundaries;
(d) The area to be included in each proposed District has, or will have, the
financial ability to discharge the proposed indebtedness for such District
on a reasonable basis; and
(e) The creation of the proposed Districts 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 Plans:
(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 Districts (including notice as described in C.R.S. §
32-1-304).
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(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 Districts shall fully comply with the provisions
of C.R.S. § 32-1-107(3) with respect to the overlapping of service areas.
The Districts' authorization to provide services or facilities within any
overlapping area is expressly conditioned upon the Districts 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, for each District, 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; Developers' indemnity letter; and property owners'
consents that are required under the Service Plans 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 their organizational meetings, the Districts shall each execute the
District indemnity letter and intergovernmental agreement with the City
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that are required under the Service Plans and set forth in Part 2 of Exhibit J
and Exhibit M thereto, and shall provide the fully executed originals of
such documents to the City.
(0 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 Districts 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 Plans of the proposed Bridle Creek Metropolitan Districts 1 and
2, as set forth in Exhibit A to this Resolution and dated August 17, 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 22nd day of August, 2005.
o 4 OF �A... CITY COUNCIL
\ 0 PO �t'Yp++
_ i v o Fos ++� CITY OOF' DACONO, COLORADO
got tire`s^•�: pO�- Wade Carlson
Mayor
/ 'tat
-414
Val-rie Elliott-Luce
City Clerk
•
08/18/2005 5:17 PM]kkh]F:\C mpavy\Dacouo'Mmo Distric[a'Bridle Creek Approval ra.doc
3
CERTIFICATE
I, Valerie Elliott-Lucero, do hereby certify that the above and foregoing is a true,
correct and complete copy of a resolution adopted by the City Council of the City of Dacono,
Colorado, at a public meeting held on the day of au , 2005.
IN WITNES WHEREOF, I have hereunto set my hand and the seal of the City of
Dacono, Colorado, this ' day of_Or 2005.
OF 4CpA,
4V1-)
ti SEAL * City lerk
Nom RI"V
coLORPP
4
EXHIBIT A
(insert Service Plan)
5
EXHIBIT B
'Revisions to the Bridle Creek Metropolitan Districts 1 and 2 Service Plans
(Dacono City Council Meeting, August 22, 2005)
Bridle Creek Metropolitan District 1
1. Service Plan page 8, line 1: delete "and"between"dedicated to,"and"conveyed."
2. Service Plan, starting on page 9, line 11, and continuing throughout main body of Service
Plan: delete all asterisks.
3. Service Plan, page 19, line 18: change"an"to "any."
4. Service Plan, page 20, line 15: change"interests" to "interest."
5. Service Plan,page 22, line 3: change"(7.96%)percent" to "percent(7.96%)."
6. Service Plan, page 23, line 7: insert comma after"above."
7. Service Plan,page 30, line 20: change "December 31, 2010" to "December 31, 2009."
8. Service Plan, page 34, starting on line 14: delete 5th, 6th, 7th and 8t°sentences of Article XIII
(Intergovernmental Agreements) and replace with the following text:
The District anticipates entering into an intergovernmental agreement with the
Bridle Creek Metropolitan District No. 2 for the sharing of costs related to
public improvements benefiting both districts, including, but not limited to,
off-site street improvements, off-site landscaping improvements, off-site
sanitary sewer improvements and off-site water improvements. The total
estimated costs of the shared off-site improvements are included in Exhibit E.
The cost-sharing intergovernmental agreement is expected to provide that, to
— the extent one district finances and constructs the shared off-site
improvements, the other district shall reimburse the financing and
constructing district for its agreed-upon share of the costs of the shared off-site
improvements, but only if such reimbursement does not adversely affect the
reimbursing districts ability to repay its bonds.
9. Service Plan, page 38: delete"*Amounts expected to change" footnote.
10. Exhibit E, engineer's letter: revise parenthetical statement in final paragraph to read as
follows: "(e.g., roadways and sidewalks, storm water management system, water
distribution system, sanitary sewer collection system, and parks/trails and open space)."
Provide executed revised letter.
11. Exhibit G spreadsheets, page 3: in column headed"Cumulative Cash Available for Surplus
Fund," delete amounts shown after 2014 (when Surplus Fund terminates as stated in Note
13 on page 15).
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12. Exhibit G spreadsheets, page 5: column headings, 3r°, 6`" and 9th columns from left, change
"Platted & Developed Lots" to "Platted & Improved Lots"; page 13, second line under
Note 5 (continued), change "developed lots"to "improved lots."
— 13. Exhibit G spreadsheets, page 10, second paragraph of Note 1, 4`" line of paragraph, insert
"of'between "forecast," and"the."
14. Exhibit G spreadsheets, page 10, fourth paragraph of Note 1, 15` line of paragraph, change
"2006"to "2005."
15. Exhibit G spreadsheets, page 11, third line under Note 2 (continued), delete "and storm
drainage."
16. Exhibit G spreadsheets, page 12, fourth paragraph of Note 5, fourth line of paragraph,
change"45"to "40."
17. Exhibit G spreadsheets, page 13, Note 7, change"FACILITIES" to "FACILITY" in caption
and change "facilities"to "facility"in first line of following paragraph.
18. Exhibit G spreadsheets, page 15, second paragraph of Note 13, first line: change "Pledged
Revenue"to "pledged revenue."
19. Exhibit G, letter from DRM Real Estate Advisors, LLC: provide executed revised letter
with "commercial" references deleted and with additional explanatory language similar to
that provided for Dacono Estates Metropolitan District. (" . . . projections relating to
absorption differ from that of the financing plan due to the fact that our estimate of
absorption is based on current supply and demand levels. . . .").
20. Exhibit G, letter from Bridle Creek, LLC: provide executed revised letter with added
explanation of how letter from DRM Real Estate Advisors, LLC supports financial plan
assumptions.
21. Exhibit H, letter from Kirkpatrick Pettis: provide executed revised letter with added
language similar to that provided for Dacono Estates Metropolitan District; in second-to-
- last sentence of revised letter, change "alternative"to "model."
22. Exhibit J-1, indemnity letter from Bridle Creek, LLC: in third line of paragraph 2, change
— "waive"to "waives."
Bridle Creek Metropolitan District 2
1. Service Plan,page 2,line 6: change "Roads" to "Road."
2. Service Plan, page 7, line 3: delete"of"
3. Service Plan, starting on page 9, line 10, and continuing throughout main body of Service
— Plan: delete all asterisks.
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4. Service Plan, page 9, line 20: delete "that are."
5. Service Plan, page 16, line 15: insert space after"terms" and correct immediately following
quotation mark; insert quotation mark before second "general."
6. Service Plan, page 18, line 13: change "Bonds" to "bonds."
7. Service Plan, page 20, line 8: change "interests"to "interest."
8. Service Plan, page 21, line 20: change "(7.96%)percent"to "percent (7.96%)."
9. Service Plan,page 23, line 1, insert comma after"above."
10. Service Plan,page 26, line 4, change "townhouse"to "townhome." -
11. Service Plan, page 34, starting on line 8: delete 5th, 6th, 7th and 8t sentences of Article XIII
(Intergovernmental Agreements) and replace with the following text:
The District anticipates entering into an intergovernmental agreement with the Bridle Creek
_ Metropolitan District No. 1 for the sharing of costs related to public improvements
benefiting both districts, including, but not limited to, off-site street improvements, off-site
landscaping improvements, off-site sanitary sewer improvements and off-site water
improvements. The total estimated costs of the shared off-site improvements are included
in Exhibit E. The cost-sharing intergovernmental agreement is expected to provide that, to
the extent one district finances and constructs the shared off-site improvements, the other
district shall reimburse the financing and constructing district for its agreed-upon share of
the costs of the shared off-site improvements, but only if such reimbursement'does not
adversely affect the reimbursing district's ability to repay its bonds.
12. Service Plan, page 38: delete"*Amounts expected to change" footnote.
_ 13. Exhibit E, engineer's letter: in final paragraph, after "water distribution system," insert
"sanitary sewer collection system, parks/trails and open space,"; delete "onsite"before first
"roadways"; and delete reference to "offsite roadways". Provide executed revised letter.
14. Exhibit G spreadsheets, page 3: in column headed "Cumulative Cash Available for Surplus
Fund," delete amounts shown after 2015 (when Surplus Fund terminates as stated in Note
_ 13 on page 13).
15. Exhibit G spreadsheets, page 5: column headings, 3'", 6th and 9th columns from left, change
_ "Platted & Developed Lots" to "Platted & Improved Lots"; page 11, second line under
Note 5 (continued), change "developed lots"to "improved lots."
16. Exhibit G spreadsheets, page 8, second paragraph of Note 1, 4th line of paragraph, insert
"of'between "forecast," and "the."
17. Exhibit G spreadsheets, page 8, fourth paragraph of Note 1, first line of paragraph, change
"2006"to "2005."
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18. Exhibit G spreadsheets, page 9, third line under Note 2 (continued), delete "and storm
drainage."
19. Exhibit G spreadsheets, page 10, fourth paragraph of Note 5, fourth line of paragraph,
change"48"to "40."
20. Exhibit G spreadsheets, page 11,Note 7, change"FACILITIES"to "FACILITY" in caption
and change "facilities" to "facility"in first line of following paragraph.
21. Exhibit G spreadsheets, page 13, first paragraph of Note 12, first line: after "estimated"
insert "cost of the capital infrastructure improvements to be funded under the Service Plan
is."
22. Exhibit G spreadsheets, page 13, second paragraph of Note 13, first line: change "Pledged
Revenue"to "pledged revenue."
23. Exhibit G, letter from DRM Real Estate Advisors, LLC: provide executed revised letter
with "commercial" references deleted and with additional explanatory language similar to
that provided for Dacono Estates Metropolitan District. (" . . . projections relating to
absorption differ from that of the financing plan due to the fact that our estimate of
absorption is based on current supply and demand levels . . . ").
24. Exhibit G, letter from Bridle Creek, LLC: provide executed revised letter with added
explanation of how letter from DRM Real Estate Advisors, LLC supports financial plan
assumptions.
25. Exhibit H, letter from Kirkpatrick Pettis: provide executed revised letter with added
language similar to that provided for Dacono Estates Metropolitan District; in second-to-
- last sentence of revised letter, change"alternative" to "model."
26. Exhibit J-1, indemnity letter from Bridle Creek, LLC: in third line of paragraph 2, change
"waive"to "waives."
27. Exhibit K, form of recorded disclosure statement: last line of first page and first line on
second page, change"2007 through 2040" to "2006 through 2038."
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