HomeMy WebLinkAbout20050772.tiff SERVICE PLAN
FOR
THE HILLS
METROPOLITAN
DISTRICT NO. 2
(FIRESTONE, COLORADO)
Submitted: July 1, 2004
Resubmitted: August 26, 2004
_ Resubmitted: September 13, 2004
Approved: September 16,2004
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{00025572.DOC r5) 2005-0772
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TABLE OF CONTENTS
Page
INTRODUCTION 1
A. General Information 1
B. Need for the District 4
C. Proposed Structure 4
I. Multiple District Structure 4
2. Boundary and Adjustments; Consolidation 5
D. Proposed Land Use/Population Projections 6
II. DESCRIPTION OF PROPOSED IMPROVEMENTS AND SERVICES 7
A. Types of Improvements 7
1. Streets 8
2. Water 8
3. Safety Protection 9
4. Parks and Recreation 9
5. Other Powers 10
(a) Plan Amendments 11
(b) Phasing, Deferral 1 1
B. Standards of Construction/Statement of Compatibility 11
C. Dedication of Improvements to the Town 12
D. Ownership and Operation of Facilities by the District 13
E. Acquisition of Land for Public Improvements 14
F. Services to be Provided by other Governmental Entities 15
G. Integration 15
III. PURPOSE 15
` IV. DESCRIPTION OF PROPOSED FACILITIES AND ESTIMATED COSTS 16
A. Type of Improvements and Preliminary Engineering Estimates 16
B. Regional Improvements/Intergovernmental Agreements 16
1. Regional Improvements 16
2. Intergovernmental Cost Sharing and Recovery Agreement 17
3. Voter Authorization 17
C. Limitation on Eminent Domain 18
V. FINANCIAL PLAN 18
A. Introduction/General 18
B. Debt Issuance 22
1. Issuance of Developer Bonds 22
(a) Maximum principal amount; no discount 24
(b) Term 24
(c) Interest Rate 25
(d) Subordination 25
(e) Discharge 25
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1
(0 Transferability 25
2. Issuance of Non-Developer Bonds 26
(a) Secured and Unrated Non-Developer Bonds 26
(b) Development Threshold for Unrated Non-Developer Bonds 27
(c) Other Restrictions on Non-Developer Bonds 28
(i) Maximum Principal Amount 28
(ii) Term 29
(iii) Interest Rate 29
(iv) Trustee 29
(v) Refunding Bonds 29
_ (vi) Required certification as to Saddleback Park 30
3. Cost-Sharing Obligations 30
4. Financial Estimates 30
C. Other Restrictions, Limitations and Requirements 31
1. No acceleration 31
2. Authorized Security for Debt 32
3. Limited Mill Levy and Principal Amount Limits 32
4. Transfers and Exchanges 32
5. Compliance with law, opinions 32
D. Debt Service and Administrative Mill Levies 33
E. Costs of District Administration and Operations 34
F. District Revenue Sources 34
G. Revenue-Sharing Payments to Town for Public Improvements 35
H. Economic Viability 38
I. Quinquennial Review 39
J. Letters 40
VI. LANDOWNERS' OBLIGATIONS AS TO PUBLIC IMPROVEMENTS 40
VII. ANNUAL REPORT 41
VIII. DISSOLUTION 43
IX. ELECTIONS 44
X. INDEMNITIES 45
XI. DISCLOSURE AND DISCLAIMER; NO THIRD PARTY RIGHTS 46
XII. INTERGOVERNMENTAL AGREEMENTS 46
XIII. CONSERVATION TRUST FUND 47
XIV. MODIFICATION OF SERVICE PLAN 48
XV. RESOLUTION OF APPROVAL 49
XVI. FAILURE TO COMPLY WITH SERVICE PLAN 50
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XVII. SEVERABILITY 50
XVIII. CONCLUSION 51
XIX. CERTIFICATION 51
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TABLE OF EXHIBITS
EXHIBIT A Legal Description of Initial Property
EXHIBIT A-1 District Map
EXHIBIT B District, Development and Vicinity Map
EXHIBIT C Description of Facilities and Costs
EXHIBIT D Street and Safety Protection Improvements
EXHIBIT E Drainage Improvements
EXHIBIT F Park and Recreation Improvements
EXHIBIT G Water System Improvements
EXHIBIT H Financial Plan
EXHIBIT I [Intentionally Omitted]
EXHIBIT J Underwriter's Letter
EXHIBIT K Letter from Counsel to the District
EXHIBIT L Developer's Indemnity Letter and District's Indemnity
Letter
EXHIBIT M Disclosure Notice
EXHIBIT N Form of Town Disclaimer
EXHIBIT 0 Form of Town IGA
EXHIBIT P Form of District IGA
EXHIBIT Q Mill Levies of Overlapping Entities
EXHIBIT R Resolution of Approval
EXHIBIT S Letter from Bond Counsel
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SERVICE PLAN FOR
THE HILLS METROPOLITAN DISTRICT NO. 2
I. INTRODUCTION
A. General Information
Pursuant to the requirements of the Special District Act, Section 32-1-101, et seq.,
C.R.S., this Service Plan (together with all Exhibits hereto,the "Service Plan")consists of a
financial and jurisdictional analysis demonstrating how the proposed facilities and services of the
proposed The Hills Metropolitan District No. 2 (the "District") will be constructed and financed.
The District is to serve as a"financing only"district to finance certain street, safety protection,
water, and park and recreation improvements for or in connection with the approximately Six
Hundred (600)acre Saddleback Hills Lake &Conservancy Limited Liability Company
development(the "Development").
The District shall be authorized to provide only the limited facilities and to
perform only the limited functions set forth in this Service Plan. As set forth above, the District
shall serve as a"financing only"district and does not intend to operate as a competing
government with the Town of Firestone(the"Town"). All improvements financed, constructed
or installed by the District, except as may be authorized pursuant to Article II.D. or an
amendment to this Service Plan, shall be dedicated and conveyed to the Town or its designee
upon completion, and upon expiration of the District's warranty obligations, such improvements
will be operated and/or maintained by the Town or such designee. It is intended that the District
provide for the financing of the Improvements(defined herein), but it is not intended that the
District have perpetual existence. The District will be dissolved when its financial obligations
are paid or provided for, or when the Town requests dissolution, provided then-applicable
statutory requirements are met, all as further described in Article VIII of this Service Plan. The
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District's financing of the Improvements will benefit the residents of the Development and the
Town's residents because such financing will assist in the completion of regional improvements
serving the constituents of both the Town and the Development.
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, and shall not perform any services, without the consent of the Town as
evidenced by a resolution of approval of the Town's Board of Trustees. In addition, the District
will not contract with any other governmental entity to receive any services which are or may
become available from the Town, or to provide any services to or within any other governmental
entity. The District shall comply with the requirement of Section 32-1-107, C.R.S.
The property within the District will receive water service from the Town and no
other source, and sanitary sewer service from Tri-Area Sanitation District ("Tri-Area
Sanitation"). It is expected that the Frederick-Firestone Fire Protection District will provide fire
protection services to the District and the Town will provide police protection services.
The Development is entirely within the boundaries of the County of Weld (the
"County"),the Town, Central Weld County Water District ("Central Weld"), and Frederick-
--- Firestone Fire Protection District. A chart setting forth mill levies of overlapping entities is
attached hereto as Exhibit Q.
The Development will be developed into a mixed-use planned community with
single and multi-family residences, commercial uses and public uses. Other compatible uses as
allowed by the zoning may also be incorporated.
This Service Plan has been prepared by Saddleback Hills Lake & Conservancy
Limited Liability Company, and Saddleback Hills Lake and Conservancy#2 LLC (the
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"Developer") and the following participants listed below. All property within the District is
currently owned by Saddleback Hills Lake & Conservancy Limited Liability Company and
Saddleback Hills Lake and Conservancy#2 LLC. The term"Developer" as it is used herein
shall refer to Saddleback Hills Lake &Conservancy Limited Liability Company and Saddleback
Hills Lake and Conservancy#2 LLC, as well as any successors or assigns of such entity;
provided that any such successors and assigns must accept all duties and obligations contained or
referred to in or relating to this Service Plan, and must re-execute the indemnity letter(Exhibit
L) in form satisfactory to the Town and provide such other written assurances of acceptance of
such duties and obligations as may be requested by the Town.
District Counsel:
Darlene Sisneros
Jacqueline C. Murphy
McGeady Sisneros, P.C.
1675 Broadway, Suite 2100
Denver, CO 80202
Phone: (303) 592-4380
Fax: (303) 592-4385
Landowner/Developer:
Saddleback Hills Lake & Conservancy Limited Liability Company
Saddleback Hills Lake and Conservancy#2 LLC
5460 S. Quebec Street, Suite 300
Greenwood Village, CO 80111
Phone: (303) 721-1516
Fax: (303) 770-7383
Financial Advisor/Underwriter:
Samuel R. Sharp
Kirkpatrick Pettis Smith Polian, Inc.
1600 Broadway, Suite 1100
Denver, CO 80202
Phone: (303) 764-5786
Fax: (303) 764-5770
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Engineer:
Jim Jannicke
John S. Strandberg
CVL Consultants, Inc.
7901 E. Belleview Ave., Suite 150
Englewood, CO 80111
Phone: (303)482-9526
Fax: (303)482-9586
Bond Counsel:
Saranne Maxwell
Kutak Rock LLP
1801 California, Suite 3100
Denver, CO 80202
Phone: (303) 297-2400
Fax: (303) 292-7799
District Accountant:
John Simmons
J.W. Simmons &Associates, P.C.
9155 E. Nichols Ave #330
Englewood, CO 80111-0834
B. Need for the District
The Property, as hereinafter defined, is now vacant and is not presently served by
the Improvements. Neither the Town, the County, nor any other special district, other than the
Districts,has plans to provide the Improvements within a reasonable time and on a comparable
basis. Therefore, it is necessary that the District be organized to provide the inhabitants of the
Development with the Improvements.
C. Proposed Structure
1. Multiple District Structure. Services will be provided to the Development
by three metropolitan districts: the District, The Hills Metropolitan District No. 1 ("Hills
No. 1"), and The Hills Metropolitan District No. 3 ("Hills No. 3") (the District, Hills No. 1, and
Hills No. 3 shall be referred to collectively as the "Districts"). The Districts,collectively, will
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undertake the financing and construction of the Improvements in sequential order(i.e., the Hills
No. 1 will proceed with initial construction, then the District, etc.), and that the Districts will
share certain regional infrastructure costs pursuant to the District IGA more specifically
described in Article IV.B.2 herein.
The formation of multiple special districts for this Development provides the
following advantages: 1) those who benefit from the Improvements pay for them; 2) the structure
ensures that the commitments made to the Town regarding the installation of public
infrastructure and contributions to Town projects will be satisfied; 3) no District is compelled to
finance the Improvements in advance of its need, because additional Districts are available to
undertake financing for the Improvements; 4) the use of tax exempt bonds to construct public
infrastructure helps keep initial housing costs at a reasonable level; 5)the structure assures well
planned phased development; 6) the structure allows flexibility to address changing needs and
expectations over time; 7) the structure allows the inhabitants to vote for representatives on the
board of directors of the Districts and run for the board within several years.
2. Boundary and Adjustments; Consolidation. The area to be included
within the boundaries of the District is located entirely within the Town and the Development,
and is approximately 213 acres (the"Property"). A legal description of the Property is attached
hereto as Exhibit A and a map of the Property is attached hereto as Exhibit A-1. A vicinity map
is attached as Exhibit B. The District shall be required to obtain written approval from the Town
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 Town Board of Trustees, 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
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conditions as the Town 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 Town may impose. No changes in the
boundaries of the District shall be made, unless the prior written approval of the Board of
Trustees has been obtained as part of a Service Plan modification, as provided herein. Upon
approval from the Town, any exclusions and inclusions will be processed in accordance with
parts 4 and 5 of Article 1, Title 32, C.R.S. The District shall not include any property which has
not been annexed by the Town.
The District shall not file a request with the District Court to consolidate with another
district without the prior written approval of the Board of Trustees.
D. Proposed Land Use/Population Projections
Based on the preliminary planned unit development ("PUD") plan for the
Development, Hills No. 1 is anticipated to include seven hundred sixty-nine (769) single family
residential units. The District is anticipated to include six hundred forty-eight (648) residential
units. At an estimated three persons per residence, this would result in a resident population of
approximately one thousand, nine hundred forty-four(1,944)persons in the District based upon
proposed single family zoning. Hills No. 3 is anticipated to include four hundred ninety-two
thousand four hundred forty-six (492,446) square feet of commercial development. It is
acknowledged that Town development approvals and requirements may affect the foregoing
number of anticipated residential units and the foregoing estimates of population and commercial
density.
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II. DESCRIPTION OF PROPOSED IMPROVEMENTS AND SERVICES
The following paragraph provides a description of the proposed services which the
District will be empowered to provide. The District is authorized to finance the construction of
those categories of improvements described below,both within and without the District, for the
purpose of implementing the provisions of Article V.G., which provides for District-Town
revenue sharing for capital improvements benefiting both the Town and District. To the extent
this Service Plan otherwise authorizes improvements or facilities without the boundaries of the
District, such improvements or facilities may be pursued only if authorized pursuant to the Town
IGA and, if applicable, the District IGA, as defined herein.
A. Types of Improvements
The District shall have the authority to provide for the design, acquisition,
construction, installation and financing of certain street, water, safety protection, and park and
recreation facilities and improvements within and without the boundaries of the District, as
generally described and depicted on Exhibits C through G and as more specifically set forth on
the Town-approved final plans for the Development ("Improvements"). The District shall not
have the authority to provide any other types of facilities, improvements or services other than
the Town-approved Improvements. Exhibit C generally describes the Improvements and lists
each type of improvement planned to be provided by the District for the Development, the
phasing of construction of the Improvements, and the costs in current dollars. Exhibit C also
includes anticipated costs for water rights acquisition, and improvement costs for Saddleback
Park(defined herein) proposed to be constructed by the District or Developer, as further
described in Article II.A.4. An explanation of the methods,basis, and/or assumptions used to
prepare the above estimates is also included in Exhibit C, along with an engineer's statement of
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reasonableness as to the costs set forth in Exhibit C. The Improvements are further generally
depicted and described in Exhibits D through G. The exact design, subphasing of construction
and location of the Improvements will be determined at the time of final platting, and such
decisions shall not be considered to be a material modification of the Service Plan;provided,
however, that Saddleback Park shall be completed in accordance with the Phasing Plan (also
defined herein)unless otherwise agreed in writing by the Town.
1. Streets. The District shall dedicate and convey all street improvements to
the Town for ownership and maintenance after construction, inspection, completion of the
District's warranty obligation, and final acceptance of the improvements by the Town. Such
dedications and conveyances shall occur as phases of the Development are completed in
accordance with the subdivision requirements of the Town. Unless otherwise directed by the
Town, all streetscaping improvements, upon the consent of the Town,will be maintained by the
District or a homeowners or owners association. To the extent the Town permits or requires the
District to own any landscaping improvements, the District shall have the authority to maintain
such improvements.
2. Water. The Development will receive potable water service from the
Town and no other source. The District, together with the Developer, may finance, design,
construct, and install certain Town water system improvements and facilities located within the
boundaries of the District. However, all water system improvements shall be dedicated and
conveyed to, and owned by the Town, and shall be maintained by the Town upon acceptance and
completion of the District's warranty obligations. All water rights for water service to the
Property shall be owned by the Town; except as set forth below, the District will not purchase,
own, manage, adjudicate, or develop any water rights or water resources. The District shall have
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the right to finance the acquisition of water rights which must be dedicated to the Town for
provision of Town water service to the Property provided, however, that such rights shall be
conveyed and dedicated free and clear of all liens and encumbrances to the Town at the time of
plat approval. It is acknowledged that no subdivision plat or other development proposal shall
receive final approval until the Town becomes the titled owner, free and clear of all liens and
encumbrances, of all water required for the area to be platted or developed. Upon consent of the
Town,the District shall have the authority to retain water rights for a non-potable raw water
irrigation system, and to finance and install such a system. Also upon consent of the Town, such
non-potable raw water irrigation system and related water rights may be owned, operated, and
maintained by the District or a homeowners' association. Any consent required in connection
with the raw water irrigation system shall be evidenced by a written resolution and agreement by
and with the Board of Trustees. To the extent required by Section 32-1-107, C.R.S., the District
will obtain the consent of Central Weld.
3. Safety Protection. Unless otherwise directed by the Town, all safety
protection improvements shall be dedicated to the Town for ownership and maintenance in
accordance with the procedures set forth below.
4. Parks and Recreation. The Financial Plan contemplates the construction
of a park("Saddleback Park"), which the Developer has agreed to convey to the Town and
construct pursuant to a First Amendment to Annexation Agreement for the property included in
The District, Hills No. 1 and Hills No. 3 ("Park Agreement"). The Saddleback Park property
shall be conveyed by the Developer to the Town at the time of the first final plat for the
Development, as further provided in the Park Agreement. The Developer or Districts shall
construct those certain park facilities and improvements at Saddleback Park that are generally
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described in the phasing plan set forth in Exhibit F, and any Town-approved modifications
thereof(the "Phasing Plan"), and generally depicted in the park concept plan set forth in Exhibit
F, and any Town-approved modifications thereof("Concept Plan"). Such facilities and
improvements are hereafter referred to as the"Saddleback Park Improvements." The Town may
require modifications to the Saddleback Park Improvements as set forth in the Park Agreement
and Town IGA. To the extent the Districts undertake the construction of the Saddleback Park
Improvements, such improvements shall be completed in strict compliance with the Phasing Plan
and the Districts' failure to comply with the Phasing Plan shall constitute a material modification
as set forth in Article XIV. If the Saddleback Park Improvements are financed and duly
implemented in compliance with the Phasing Plan, then Certified Costs (defined below) for such
Improvements may be credited against the District's revenue-sharing obligation to the extent and
as provided in V.G. below. All park and recreation improvements and facilities shall be
dedicated and conveyed to the Town or its designee and maintained by the Town or its designee
upon acceptance and completion of the District's warranty obligations. Notwithstanding the
foregoing, certain park and recreation facilities may, with the consent and direction of the Town
(as evidenced by a written resolution and agreement by and with the Board of Trustees),be
owned by the District and maintained by the District, the Town, a homeowners association or the
Carbon Valley Park and Recreation District("Recreation District"). To the extent the District
owns any park and recreation improvements, it shall have the authority to maintain such
improvements. To the extent required by Section 32-1-107(3), C.R.S., the District will obtain
the consent of the Recreation District.
5. Other Powers. In addition to the enumerated powers, the Board of
Directors of the District shall also have the following authority:
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(a) Plan Amendments. To amend the Service Plan as needed, with the
prior written approval of the Town, subject to the appropriate statutory procedures and subject to
the provisions of Article XIV hereof.
(b) Phasing, Deferral. Subject to the provisions of this Section II.A.5
and Articles VI and XIV hereof, to defer, forego, or reschedule the financing and construction of
Improvements to the extent consistent with then existing land uses for the Development
approved by the Town, and in compliance with any phasing plan and PUD plans approved for
the Development and any Town development standards, to better accommodate the pace of
growth, resource availability, and potential inclusions of property within the District.
Notwithstanding the foregoing, if the District undertakes the construction of the Saddleback Park
Improvements, the District shall strictly comply with the Phasing Plan for completion of the
Saddleback Park Improvements and may not defer, forego, or reschedule the financing or
construction of the Saddleback Park Improvements unless the District has first obtained a Town-
-- approved modification of the Phasing Plan.
B. Standards of Construction/Statement of Compatibility
The Improvements shall be designed and constructed solely in accordance with
the standards and specifications established by the Town and in effect from time to time, and
with the applicable standards and specifications of other governmental entities having
jurisdiction. The drainage facilities as set forth in Exhibit E shall be constructed in accordance
with the standards and specifications established by Tri-Area Sanitation. The Improvements
shall be compatible with applicable standards, specifications and requirements of the Town and
other governmental entities having jurisdiction. Such other entities include,but are not limited
to, Central Weld, Tri-Area Sanitation, the federal government, and the State of Colorado. The
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District and its engineers have and will design the Improvements to meet such standards,
specifications and compatibility requirements of the Town and such other governmental entities.
The District will obtain approval of civil engineering plans and permits for construction and
installation of the Improvements from the Town and from Tri-Area Sanitation or other
governmental entities, as applicable, prior to the construction or installation of such
Improvements. The District shall be subject to all applicable provisions of the Firestone
Municipal Code and to all Town rules, regulations, and policies with respect to the conduct of its
work on the Improvements, as in effect from time to time. The District shall obtain all permits,
licenses,permissions and approvals required by the Town, including but not limited to right-of-
way permits, development plan approvals, and utility and construction plan approvals.
C. Dedication of Improvements to the Town
Except to the extent otherwise specifically provided herein, the District shall
dedicate and convey to the Town or its designee all of the Improvements, together with
necessary rights-of-way, fee interests and easements. The Improvements, easements and rights-
of-way shall be conveyed to the Town or its designee immediately upon completion of
construction, installation and expiration of the two (2) year warranty period that commences after
— the Town has issued an Initial Acceptance as set forth below. The Improvements and all
necessary rights-of-way, fee interests and easements shall be conveyed and dedicated to the
Town or its designee by instruments acceptable to the Town, free and clear of all liens and
encumbrances, except those which are acceptable to the Town in its sole discretion. Failure to
comply with the requirements of this Article II.C. shall be deemed to be an unauthorized
material modification of this Service Plan.
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Once an Improvement to be dedicated to the Town is constructed and installed,
the Town shall issue an"Initial Acceptance"letter stating that the Improvement has been
constructed or installed in conformance with the Town's standards, or shall issue a letter stating
the corrections necessary for the issuance of such an"Initial Acceptance" letter. The District
shall promptly undertake any necessary corrections. Upon issuance of the "Initial Acceptance"
letter, the Improvements shall be warranted for two (2) calendar years from the date of such
"Initial Acceptance,"during which time the District shall, at its expense, maintain the
Improvements and correct all deficiencies therein as directed by the Town. At the conclusion of
such two (2) year period, the Town shall issue a"Final Acceptance"letter if the Improvements
conform to the Town's specifications and standards, or shall issue a letter stating the corrections
necessary for the issuance of such a "Final Acceptance"letter. The District shall promptly
undertake any necessary corrections. A"Final Acceptance Closing" shall then be arranged and
held (such closing in no event to occur more than 120 days after the issuance of the "Final
Acceptance"letter), at which time the Town will issue a"Final Acceptance" for the
Improvements to be accepted by it, and the District will execute and deliver to the Town all
necessary instruments to dedicate and convey to the Town the Improvements, and all necessary
rights-of-way, fee interests and easements.
D. Ownership and Operation of Facilities by the District
The District shall serve as a"financing only" District and shall not be authorized
to own or operate any Improvements, other than as necessary to permit the financing and
construction thereof, except through approval by the Town by resolution or through a Town-
approved amendment to this Service Plan. Notwithstanding the foregoing, the Town may agree
or require that specific landscaping improvements, subdivision signage, open space/park tracts, a
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raw-water irrigation system or certain other Improvements be retained by the District and
operated and maintained by the District. Town consent to any such District ownership or
operation shall be evidenced by a written resolution and agreement by and with the Board of
Trustees. In such event, the District may contract with a homeowners' association for the
operation and maintenance of such improvements. Any contract with the homeowners'
association must be approved by the Town in advance, and the Town may require assurances that
the homeowners' association accepts the operation and maintenance obligations and has the
financial ability to undertake such obligations. In addition, upon request by the Town, the
District will dedicate and convey to the Town or its designee, any Improvements which the
District is otherwise obligated to operate and maintain, so that the Town or its designee may
operate and maintain such Improvements.
E. Acquisition of Land for Public Improvements
The District shall acquire at no cost to the Town all lands or interests in land
required by the Town for construction of the Improvements. Such land or interests in land may
be acquired by the District by instruments of conveyance and/or plat dedication. All such land
and interests in land shall be conveyed to the Town or its designee at no cost to the Town at such
times and by such instruments of conveyance as the Town may reasonably require(but in no
event shall such conveyances be made later than the"Final Acceptance Closing" described in
Article II.C. above), free and clear of all liens and encumbrances, except those which are
acceptable to the Town. Exceptions must be approved by the Town in advance and in writing.
Failure to comply with this provision shall be deemed to be an unauthorized material
modification of this Service Plan.
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F. Services to be Provided by other Governmental Entities
The District proposes to finance, construct, and install the Improvements,but is
not authorized to and will not provide any ongoing services within the District, with the limited
potential exception of ongoing ownership, maintenance and operation of specific landscaping
improvements, subdivision signage, open space/park tracts, or certain other improvements at the
Town's election, as provided herein. The District shall cooperate with the Town and the
Recreation District to incorporate the District into the Recreation District and to obtain a
resolution from the Recreation District consenting to the overlapping boundaries for financing
purposes only. Except as may be allowed by the Town as provided above, the District shall not
provide ongoing park and recreation services. Sewer services shall be provided by Tri-Area
Sanitation. Nothing herein shall limit or discharge the District's responsibilities for operation,
maintenance and repair of public improvements prior to their acceptance by the Town and
conveyance to the Town or its designee, or limit or discharge the District's warranty obligations.
G. Integration
The Improvements shall be constructed so as to be integrated with existing and
planned facilities and improvements of the Town and other entities providing service to the
Development. The District shall obtain from such other serving entities approval of the proposed
plans for the Improvements. The District shall provide the Town with copies of any submittals
to such entities at the time of their submittal, and with copies of any approvals from such entities
upon receipt.
III. PURPOSE
The District will finance the construction of the Improvements for the Development and
certain regional public improvements. The District's financing of the Improvements and certain
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regional public improvements will benefit the residents of the Development and the Town's
residents because such financing will assist in the completion of regional improvements serving
the constituents of both the Town and the Development.
IV. DESCRIPTION OF PROPOSED FACILITIES AND ESTIMATED COSTS
A. Type of Improvements and Preliminary Engineering Estimates
A general description of the Improvements, including estimated costs of the
Improvements and water rights acquisition are set forth in Exhibit C attached hereto. Exhibits
D through G include facility maps and preliminary drawings for the Improvements. As set forth
in Exhibit C, the estimated cost of the Improvements exceeds the amount of debt anticipated to
be issued in accordance with the Financial Plan. As contemplated by the Financial Plan the other
Districts will be contributing funds to the District for regional improvements (i.e., cost sharing).
To the extent that the cost of the Improvements cannot be financed with bond proceeds or cost
sharing contributions,the Developer shall be required to pay such costs, as set forth in Article V.
The Town is not responsible for assuming any of the costs of any Improvements necessary for
service to the proposed Development.
B. Regional Improvements/Intergovernmental Agreements
1. Regional Improvements. Subject to the requirements of Article XII of this
Service Plan, the District may participate in intergovernmental agreements with other
governmental entities, including,but not limited to, the Town, Central Weld, Tri-Area
Sanitation, the Recreation District, other special districts or adjacent property owners to share the
costs of regional improvements or recoup advanced costs for regional improvements benefiting
others,provided that any such regional improvements are included in the Improvements or are
otherwise authorized pursuant to an agreement with the Town. Except for the Town IGA, all
(00025572.DOC v:5) 16
intergovernmental agreements are subject to additional Town approval as provided in Article XII
hereof.
2. Intergovernmental Cost Sharing and Recovery Agreement. The Districts
shall also enter into an Intergovernmental Cost Sharing and Recovery Agreement(the "District
IGA"), which shall govern the relationships between and among the three districts with respect
to the financing and construction of Improvements which are regional improvements. In the
District IGA, the Districts acknowledge that the Improvements include regional improvements
that will benefit some or all of the Districts, and that development within the Districts is not
expected to proceed at the same time. Therefore, the District IGA establishes a mechanism
whereby the Districts may cooperatively fund, construct and install certain of the Improvements
which are regional improvements. A draft of the District IGA is set forth in Exhibit P; the final
form of the District IGA shall be subject to review and approval by the Town prior to execution
by the Districts. The fully executed District IGA shall be provided to the Town upon execution.
It is anticipated that the District will proceed with construction in advance of Hills No. 3 and will
receive cost sharing contributions from the other Districts in the amount of approximately Three
Million Three Hundred Twenty-Nine Thousand Eight Hundred Fifty-Eight Dollars ($3,329,858),
— as set forth in the Financial Plan (defined below).
3. Voter Authorization. To the extent necessary to comply with statutory
and/or Constitutional requirements for approval of debt or long-term financial obligations, the
terms of the aforementioned intergovernmental agreements and any other intergovernmental
agreement deemed necessary to effectuate the long-term plans of the District will be submitted to
the electors of the District for approval. The District shall have the authority to obtain the
(00025572.DOC v:5) 17
required voter authorization in order to exercise its rights and obligations under such agreements
but may not enter into the agreements without prior written approval of the Town.
C. Limitation on Eminent Domain
The District shall not exercise any power of dominant eminent domain against the
Town, and shall not exercise any power of eminent domain without the prior written consent of
the Town with the sole exception that the District shall have the authority to exercise the power
of eminent domain (but not against the Town) for the sole purpose of acquiring interests in real
estate (excluding water rights)to secure the delivery of non-potable water to the Development if
the Town authorizes the use of a non-potable raw water irrigation system for the Development.
The exercise of the power of eminent domain by the District without the prior written consent of
the Town, other than as permitted by the immediately preceding sentence, shall be considered an
unauthorized material modification of this Service Plan.
V. FINANCIAL PLAN
A. Introduction/General
This Article V, together with Exhibit H attached to and incorporated in this
Service Plan, constitutes the financial plan for the District required by Section 32-1-202(2)(b),
C.R.S. (the "Financial Plan"). The Financial Plan describes the nature, basis, method of funding,
limitations on debt and mill levy limitations associated with the District's public improvements
program and other activities. For purposes of this Service Plan, the terms "debt" and
"indebtedness" include all borrowings or other financial obligations of the District, regardless of
form, type, terms or security (excluding District construction contracts for which funds have
been appropriated and excluding unsecured payment obligations incurred in the ordinary course
of business which do not constitute borrowing and which are to be paid from current revenues
{00025572.DOC v:5) 18
within the same budget year in which incurred). All District financial obligations,whether
"debt"or"indebtedness"or not, must be consistent with this Service Plan.
Exhibit H contains a Summary of Significant Assumptions and Accounting
Policies along with alternative financing scenarios associated with both variable rate/rated
financing("Alternative A"; see V.B(2)(a) "Secured and Unrated Non-Developer Bonds"below)
and non-rated fixed rate financing ("Alternative B"; see V.B(2)(b) "Development Threshold for
Unrated Non-Developer Bonds"below). Both of these alternative financing scenarios include all
proposed debt and estimated interest rates and discounts, estimated costs of the District's
administration and the District's limited operations and maintenance activities, and other major
expenses related to the organization and activities of the District. Anticipated payments from
other Districts as required by the District IGA are also reflected in Exhibit H. Exhibit H also
contains matrix and timeline presentations summarizing key financial information and
assumptions, proposed financing alternatives and financial relationships for all of the three
proposed Districts. The Financial Plan projects the issuance of debt and anticipated repayment
based on the development assumptions for the Property (including the market projections and
absorption forecasts included in Exhibit H). Letters from the Developer and from THK and
Associates in support of these assumptions, projections and forecasts are also contained in
Exhibits H and L.
The following are the selected key assumptions and projections for the District, as
further set forth in Exhibit H. Actual results will vary based upon timing of development.
• From approximately 2004 through 2008, the Improvements will be constructed at
a total estimated cost of Eleven Million Ninety-Nine Thousand Five Hundred Twenty-Five
_ Dollars ($11,099,525), of which Three Million Three Hundred Twenty-Nine Thousand Eight
{00025572.DOC v:5) 19
Hundred Fifty-Eight Dollars ($3,329,858) will be paid by Hills No. 3. From approximately 2004
through 2006, the Developer will make advances to the District totaling approximately Three
Million Eight Hundred Eighty-Nine Thousand Six Hundred Sixty Dollars ($3,889,660)
(Alternative A) or Two Million Two Hundred Seventy-Eight Thousand Five Hundred Eleven
Dollars ($2,278,511) (Alternative B) for such costs, as well as approximately One Hundred
Twenty-Eight Thousand Two Hundred Twenty-Two Dollars ($128,222) for initial costs of
District administration and limited operations and maintenance activities, in exchange for the
issuance of Developer Bonds (as defined and further described in V.B(1)below). The Developer
will contribute approximately Two Million Eight Hundred Four Thousand Three Hundred Six
Dollars($2,804,306) (Alternative A) or Three Million Eight Hundred Eighteen Thousand Three
Hundred Seven Dollars ($3,818,307) (Alternative B), which contribution is not expected to be
repaid by the District ("Developer Contribution").
• From approximately 2005 through 2008, a total of approximately 648 residential
units will be constructed in the District. Full buildout is expected to occur by 2008, with market
absorption of substantially all units projected by 2008. Current assessed valuation of the
Property is assumed to be $-0-; assessed valuation for the Property at full buildout is expected to
be approximately Fourteen Million Two Hundred Sixty-Three Thousand Two Hundred Ninety-
Seven Dollars ($14,263,297), and the District is expected to receive property tax revenue based
on such estimated full buildout assessed valuation beginning in 2010.
• The District is expected to issue two (2)series of Non-Developer Bonds(as
defined and further described in V.B(2)below), in 2005 and 2008. Kirkpatrick Pettis Smith
Polian, Inc. ("Kirkpatrick Pettis"), the District's Financial Advisor/Underwriter, has estimated
the District's debt capacity for such Non-Developer Bonds (i.e., the maximum amount of Non-
{00025572DOC v:5} 20
Developer Bonds that such firm expects to be willing to market and underwrite consistent with
reasonably prudent underwriting practices) as follows: Under Alternative A (variable rate/rated),
there is capacity for an estimated total principal amount of Seven Million One Hundred Fifty
Thousand Dollars ($7,150,000) of Non-Developer Bonds, projected to yield net proceeds (after
deduction of capitalized interest, reserve funds, and issuance and other incidental costs as set
forth in Exhibit H under Note 3 - Bond Assumptions) of Six Million Two Hundred Sixty
Thousand Eight Hundred Seventeen Dollars ($6,260,817). Under Alternative B (non-rated),
there is capacity for an estimated total principal amount of Eight Million One Hundred Fifty
Thousand Dollars($8,150,000) of Non-Developer Bonds, projected to yield net proceeds (after
deduction of capitalized interest, reserve funds, and issuance and other incidental costs as set
forth in Exhibit H under Note 3 - Bond Assumptions) of Seven Million Eight Hundred Twenty-
Four Thousand Dollars ($7,824,000). Under Alternative A, approximately Two Million Twenty-
One Thousand Eight Hundred Ninety-Nine Dollars($2,021,899) of the proceeds of Non-
- Developer Bonds issued by the District will be applied toward repayment of Developer Bonds
(One Million Seven Hundred Eighty Dollars ($1,000,780) in Developer Bond principal, and One
Million Twenty-One Thousand One Hundred Nineteen Dollars ($1,021,119) accrued interest
thereon), with approximately Two Million Eight Hundred Eighty-Eight Thousand Eight Hundred
Eighty Dollars ($2,888,880)principal amount of Developer Bonds remaining outstanding after
all Non-Developer Bonds have been issued. Under Alternative B, approximately Two Million
Nine Hundred Ninety-Seven Thousand Nine Hundred Thirty-Four Dollars ($2,997,934) of the
proceeds of Non-Developer Bonds issued by the District will be applied toward repayment of
Developer Bonds(Two Million Two Hundred Seventy-Eight Thousand Five Hundred Eleven
Dollars($2,278,511) in Developer Bond principal, and Seven Hundred Nineteen Thousand Four
{00025572 Doc v:5) 21
Hundred Twenty-Three Dollars ($719,423) accrued interest thereon) and it is expected that all
Developer Bonds of the District will be fully repaid from such sources by the end of 2008.
• The estimated cost of the Improvements includes approximately Three Million
Three Hundred Twenty-Nine Thousand Eight Hundred Fifty-Eight Dollars ($3,329,858)in
regional infrastructure costs for which the District will be entitled to cost-sharing payments from
the other Districts pursuant to the District IGA. It is expected that such payments will be
received by the District in 2006 as set forth in Exhibit H.
The Financial Plan demonstrates that, at the projected level and timing of
development, and with the projected Developer support and cost-sharing reimbursement
payments, the proposed District has the ability to finance the Improvements and will be capable
of discharging the proposed indebtedness (including the Developer Bonds and Non-Developer
Bonds) on a reasonable basis.
B. Debt Issuance
The District is authorized to incur only the following types of debt: (i) Developer
Bonds, as further defined and described below in V.B(I); and (ii)Non-Developer Bonds (which
may include Refunding Bonds), all as further defined and described below in V.B(2). The
District may not incur any other type of debt(including without limitation revenue bonds or
lease-purchase financing)without obtaining the Town's approval of an amendment to this
Service Plan,which shall be considered a material modification hereof. Notwithstanding any
other provisions of this Service Plan, the District shall not incur any debt until the Town has
approved the first final plat for the Property.
1. Issuance of Developer Bonds. "Developer Bonds"means obligations
issued by the District to the Developer or to a principal thereof or to affiliates under the majority
j00025572.DOC v:5) 22
control of the Developer, provided that Developer Bonds may not be issued in a public offering
and may be issued only to persons or entities who are accredited investors at the time of such
issuance. The term "accredited investor"as used in this Service Plan means accredited investor
as 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. The District will obtain
representations from all persons or entities to whom Developer Bonds are issued or transferred
(i.e., the Developer, its principals and controlled affiliates, as the case may be) that they are, at
the time of such issuance or transfer, accredited investors. The appropriate documentation for
any Developer Bonds(including, without limitation, the legend set forth in V.B(I)(f)below)
shall provide that,by purchasing or otherwise accepting any Developer Bond, any owner or
holder thereof waives and releases any then existing or future claim against the Town or the
Town's elected or appointed officers, employees, agents or contractors in any manner related to
or connected with the District, its Service Plan or any action or omission with respect thereto. It
is expected that the District will receive initial funding from the Developer(both for costs of
capital improvements and for costs of administration and limited operations and maintenance
activities), and that the District will issue Developer Bonds to evidence the District's obligations
to repay a portion of such costs(excluding the Developer Contribution, which is not expected to
be repaid). The Developer and any such principals and controlled affiliates solely assume the
risk of nonpayment or other default on the Developer Bonds, including, without limitation,
delay, inability or failure of the District to sell or issue Non-Developer Bonds; any amounts
incurred with respect to Developer Bonds which are not paid (including, without limitation,
amounts discharged as provided in V.B(I)(e) below)will be treated as part of the Developer
Contribution. The District and the Developer shall comply, and the Developer shall take all
;00025572.DOC v:5) 23
action necessary to cause its principals and controlled affiliates to comply, with all limitations,
restrictions and requirements applicable to Developer Bonds.
For Alternative A,Developer Bonds are expected to be repaid in part
(approximately One Million Seven Hundred Eighty Dollars ($1,000,780)principal plus One
Million Twenty-One Thousand One Hundred Nineteen Dollars ($1,021,119) interest) from
proceeds of Non-Developer Bonds issued by the District; principal of and interest on the
remaining Developer Bonds are expected to be paid from ad valorem property taxes, specific
ownership taxes,Facility Fees and investment income. For Alternative B, Developer Bonds are
expected to be repaid in full (Two Million Two Hundred Seventy-Eight Thousand Five Hundred
Eleven Dollars ($2,278,511)principal plus Seven Hundred Nineteen Thousand Four Hundred
Twenty-Three Dollars ($719,423) interest) in 2005 and 2008 from the proceeds of Non-
Developer Bonds issued by the District. Developer Bonds shall be subject to all of the
restrictions and limitations set forth below under V.C. and D., and will also be subject to the
following restrictions and limitations:
(a) Maximum principal amount;no discount. The aggregate principal
amount of Developer Bonds that may be issued by the District throughout the District's existence
and regardless of subsequent payments or discharges, shall be limited to a total of Four Million
Three Hundred Thousand Dollars ($4,300,000). The principal amount of Developer Bonds
issued(but not Developer Bond interest), together with any other payments to the Developer by
the District, shall not exceed the amount of costs advanced by the Developer, and no discount or
commission shall be paid or taken with respect to Developer Bonds.
(b) Term. Developer Bonds shall be limited to a thirty(30) year term.
{00025572.DOC v:5) 24
(c) Interest Rate. The interest on Developer Bonds shall be subject to
a maximum allowable interest rate of three hundred(300)basis points above the thirty(30) year
'AAA' Municipal Market Data rate in effect at the time such Developer Bonds are incurred.
(d) Subordination. All Developer Bonds shall be subordinate to all
Non-Developer Bonds, with respect to all sources of repayment. Payments on Developer Bonds
may be made by the District only to the extent that such payments do not adversely affect the
District's ability to pay Non-Developer Bonds.
(e) Discharge. Any outstanding principal and accrued interest on
Developer Bonds that remains unpaid after the final maturity date of such Developer Bond shall
be deemed to be forever discharged and satisfied in full, and shall be treated as a Developer
Contribution.
(I) Transferability. Developer Bonds may be issued only as physical
securities and shall not utilize The Depository Trust Corporation or any similar securities
depository. Developer Bonds may be transferred to persons or entities other than the Developer,
its principals and controlled affiliates, only if the requirements for the issuance of Non-
Developer Bonds set forth under V.B(2)below have been met with respect to such Developer
Bonds. Unless and until such requirements have been met, no Developer bonds shall be
transferred, assigned or participated to any persons or entities other than the Developer, its
principals and controlled affiliates, nor used as security for any borrowing, and the face of the
Developer Bonds shall contain a restriction on transferability in substantially the following form:
THIS BOND MAY ONLY BE TRANSFERRED IN A
TRANSACTION NOT INVOLVING A PUBLIC OFFERING
AND ONLY TO SPECIFIED ENTITIES WHICH ARE
ACCREDITED INVESTORS, AND EACH PROSPECTIVE
PURCHASER OF THIS BOND MUST EXECUTE ONE OF THE
FORMS OF "TRAVELING INVESTOR LETTER" WHICH ARE
‘000255n.Doc v5) 25
ATTACHED TO THIS BOND, BY WHICH,AMONG OTHER
_ THINGS, SUCH PERSON OR ENTITY REPRESENTS AND
WARRANTS THAT IT IS SUCH AN ENTITY AND THAT IT IS
AN ACCREDITED INVESTOR. BY PURCHASING OR
_ OTHERWISE ACCEPTING THIS BOND,THE OWNER OR
HOLDER HEREOF WAIVES AND RELEASES ANY THEN
EXISTING OR FUTURE CLAIM AGAINST THE TOWN OF
_ FIRESTONE, COLORADO OR THE TOWN'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.
2. Issuance of Non-Developer Bonds. "Non-Developer Bonds"means debt
which is permitted under this Service Plan to be issued by the District to third parties (i.e.,
— without complying with the ownership and transferability restrictions set forth in V.B(1)
hereof). All Non-Developer Bonds will be general obligation bonds(subject to the Limited Debt
Service Mill Levy provisions of V.D. below), secured by ad valorem property taxes and
additionally secured by Facility Fees and specific ownership taxes. As set forth in Exhibit H, it
is expected that the District will issue two (2) series of Non-Developer Bonds, in years 2005 and
2008, in the aggregate principal amount of Seven Million One Hundred Fifty Thousand Dollars
($7,150,000) (Alternative A)or Eight Million One Hundred Fifty Thousand Dollars($8,150,000)
(Alternative B). At the time of issuance of the second series of Non-Developer Bonds,proceeds
of such Non-Developer Bonds must be applied to pay outstanding Developer Bond principal and
interest in an amount such that no more than Two Million Nine Hundred Thousand Dollars
($2,900,000) in Developer Bond principal remains outstanding.
(a) Secured and Unrated Non-Developer Bonds. "Secured Bonds"
means Non-Developer Bonds which are either(i)rated in one of the four highest investment
grade rating categories by one or more nationally recognized organizations which regularly rate
such obligations(which rating may be based on credit enhancement, including insurance issued
{00025572.DOC v:5 26
by an insurance company authorized to do business as an insurance company in Colorado and
authorized for such risk by the appropriate Colorado regulatory agency or official); or(ii) are
— fully secured as to the payment of all principal and interest by the letter of credit, line of credit or
other credit enhancement, any of which must be irrevocable and unconditional, issued by a
depository institution(A) with a net worth of not less than ten million dollars in excess of the
obligation created by the issuance of the letter of credit, line of credit, or other credit
enhancement; (B)with the minimum regulatory capital as defined by the primary regulator of
such depository institution to meet such obligation; and (C) where the obligation does not exceed
ten percent of the total capital and surplus of the depository institution, as those terms are defined
by the primary regulator of such depository institution. Any District payment obligations to any
letter of credit provider, insurer or other credit enhancer must comply with all Service Plan
restrictions applicable to the corresponding Secured Bonds. No development threshold test
applies to the issuance of Secured Bonds.
Non-Developer Bonds which are not Secured Bonds are referred to in this
Service Plan as "Unrated Non-Developer Bonds."
(b) Development Threshold for Unrated Non-Developer Bonds. The
District may issue Unrated Non-Developer Bonds only when builder activity has commenced
within the District, demonstrated as follows: The District may issue up to Twenty-Five
Thousand One Hundred Fifty-Four Dollars($25,154) in Unrated Non-Developer Bonds principal
for every building permit that has been issued by the Town for a dwelling unit within the District
("Development Threshold"); provided that the following additional criteria are also satisfied: (i)
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 Town in accordance with the
{00025572.DOC v:5) 27
Town subdivision requirements and subdivision agreement; and (ii) the Unrated Non-Developer
Bonds are issued in denominations of One Hundred Thousand Dollars ($100,000) or more, and
shall be issued not in a public offering and exclusively to financial institutions or institutional
investors, as such terms are defined in Section 32-1-103(6.5), C.R.S. As set forth in Exhibit J
herein,the District's Financial Advisor has indicated that, in the process of underwriting bonds
for a non-rated residential metropolitan district, one key criteria 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. Accordingly, this Service Plan includes
a"Development Threshold" for issuance of non-rated debt based on building permits in the
Districts.
(c) Other Restrictions on Non-Developer Bonds. All Non-Developer
Bonds(both Secured Bonds and Unrated Non-Developer Bonds) shall be subject to all of the
restrictions and limitations set forth below under V.C. In addition, the following requirements,
conditions, restrictions and limitations shall apply with respect to all Non-Developer Bonds (both
Unrated Non-Developer Bonds and Secured Bonds), with only those exceptions specifically
stated below:
(i) Maximum Principal Amount. The aggregate principal
amount of Non-Developer Bonds that may be issued by the District, excluding Refunding Bonds
to the extent provided in (v)below, throughout the District's existence and regardless of
subsequent payments or discharges, shall be limited to a total of Nine Million Dollars
($9,000,000). This maximum principal amount exceeds the principal amounts assumed in
{00025572.DOC v.5{ 28
Exhibit H in order to allow for increased in costs due to inflation or other contingencies in
excess of amounts described in the District's cost estimates.
(ii) Term. Non-Developer bonds shall he limited to a thirty
(30) year term.
(iii) Interest Rate. The maximum net effective interest rate on
Non-Developer Bonds shall be three hundred (300)basis points above the thirty(30) year 'AAA'
Municipal Market Data rate in effect at the time such Unrated Non-Developer Bonds are issued;
except that(a) for Secured Bonds issued at a variable interest rate for interest periods longer than
weekly, the maximum net effective interest rate shall be twelve percent (12%)per annum; and
(b) for Secured Bonds issued at a variable interest rate for weekly or shorter interest periods, the
maximum net effective interest rate shall be eighteen percent (18%)per annum. For all Non-
Developer Bonds, the maximum discount shall be four percent (4%)per annum..
(iv) Trustee. All Non-Developer Bonds shall be structured
utilizing a commercial bank with trust powers as trustee to hold and disburse the bond proceeds
and debt service funds and to pursue remedies on behalf of the bondholders.
(v) Refunding Bonds. The District may refund its Non-
- Developer Bonds through the issuance of general obligation refunding bonds ("Refunding
Bonds") in compliance with applicable law,but any such refunding shall not extend the maturity
of the Non-Developer Bonds being refunded nor increase the total debt service thereon. Any
issue of Refunding Bonds must comply with all requirements for Unrated Non-Developer Bonds
as set forth in V.B(2)(b) and (c) above, unless such Refunding Bonds are Secured Bonds as
provided in V.B(2)(a)above. Refunding Bonds shall not be subject to the maximum principal
amount stated in V.B(2)(c)(i) above,provided that such Refunding Bonds demonstrate net
(00025572DOC v:5} 29
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
Non-Developer Bonds being refunded shall be subject to the maximum principal amount stated
in V.B(2)(c)(i) above. Except to the extent otherwise provided in the immediately preceding
sentence,Refunding Bonds shall be subject to all of the restrictions and limitations applicable to
other Non-Developer Bonds (including, without limitation, those set forth below under V.C. and
D.). Non-Developer Bonds issued to immediately pay and discharge Developer Bonds, as
contemplated by V.B(1) and Exhibit H, are not Refunding Bonds within the meaning of this
paragraph (v).
(vi) Required certification as to Saddleback Park. At least
ninety(90) days,but not more than one hundred twenty(120) days, prior to the issuance of any
issue of Non-Developer Bonds (including Refunding Bonds),the District shall obtain a written
certification from the Town that there is substantial compliance with the Phasing Plan for
construction of the Saddleback Park Improvements or the District is otherwise in compliance
with its obligations in Section 10 of the Town IGA. Non-Developer Bonds shall not be issued if
the aforementioned certification is not obtained.
3. Cost-Sharing Obligations. As set forth in IV.B(2) herein, the District
shall enter into the District IGA pursuant to which the Districts shall share in the cost of
improvements that benefit the other Districts, which payments are estimated as set forth in
Exhibit H.
4. Financial Estimates. Actual interest rates and (where applicable)
discounts, for all Developer Bonds and Non-Developer Bonds(i.e., for all debt of the District),
within the applicable maximum amounts stated in V.B(1) and(2) above, will be determined
{00025572.DOC v 5 30
when such debt is entered into by the District and will reflect market conditions at the time of
sale. Estimated interest rates and discounts used in Exhibit H are based on information
furnished by Kirkpatrick Pettis as Financial Advisor/Underwriter to the District. In the event
that any District debt is issued at an interest rate higher than the estimated rates used in Exhibit
H, the principal amount of District debt will be reduced so as to result in total debt service
payments approximately equal to those projected in Exhibit H, and so that the District's total
debt service can be paid from the revenue sources contemplated in this Service Plan. Any
principal amount of District debt in excess of the principal amounts shown in Exhibit H will be
issued (subject to the maximum principal amount limits stated in VB(1) and(2) above) only if
changes in financial conditions or assumptions permit the resulting total debt service to 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 Exhibit H,
it is expected that the District would compensate by increasing its mill levy(subject to the
Limited Debt Service Mill Levy) or delaying the issuance of debt. It is expected that any such
increase in the projected debt service mill levy to compensate for decreased inflation and
revaluation factors would not exceed approximately five(5) additional mills.
C. Other Restrictions, Limitations and Requirements. The following restrictions,
limitations and requirements shall apply to all Developer Bonds and Non-Developer Bonds (i.e.,
to all debt or indebtedness of the District).
1. No acceleration. No debt issued by the District, and no District payment
obligations to any letter of credit provider, insurer or other credit enhancer, shall provide
acceleration as a remedy upon default.
l000255n.DOC v:5) 31
2. Authorized Security for Debt. Other than ad valorem property taxes,
specific ownership taxes, Facilities Fees(defined herein), amounts capitalized from bond
proceeds, and investment income on the foregoing, no District revenues shall be pledged to any
debt of the District. The District will not pledge any Town funds or assets as security for any
District debt.
3. Limited Mill Levy and Principal Amount Limits. All District debt is
subject to the Limited Debt Service Mill Levy provisions of V.D. below. All District debt is
subject to the respective maximum principal amount limits set forth in V.B(1)(a) (Developer
Bonds) and V.B(2)(c)(i) (Non-Developer Bonds) (except to the extent otherwise provided in
V.B(2)(c)(v) concerning Refunding Bonds). No District debt shall be issued as capital
appreciation bonds or utilizing any financial structure which would interfere with the
effectiveness of any such maximum principal amount limits.
4. Transfers and Exchanges. As to all District debt instruments, the District
shall provide for and shall utilize mechanisms and procedures for transfers and exchanges which
are reasonably designed to insure continuing compliance with applicable institutional investor,
accredited investor and minimum denomination requirements.
5. Compliance with law, opinions. All debt issued or incurred by the District
shall be in full compliance with all applicable requirements of state and federal law, including,
without limitation, Section 32-1-103(6.5), C.R.S., and Article 59 of Title 11, C.R.S., as amended
from time to time, and all other applicable state and federal securities laws and regulations. All
Non-Developer Debt issued or incurred by the District shall be approved by nationally
recognized bond counsel. In addition, concurrently with any issuance of debt or indebtedness by
the District, an opinion shall be obtained from bond counsel or counsel to the District that such
{00025572.DOC v5) 32
issuance or incurrence of debt by the District complies, in all material respects,with all
applicable requirements of this Service Plan and the Town IGA.
D. Debt Service and Administrative Mill Levies. "Limited Debt Service Mill Levy"
means that the ad valorem property tax mill levy pledged or otherwise applied for repayment of
all District debt(including any required debt service reserve payments) shall not exceed a total of
fifty(50) mills, subject to the following:
1. In the event of changes in the ratio of actual valuation to assessed
valuation for residential and commercial real property(from 7.96%or 29%, respectively),
pursuant to Article X, Section 3(1)(b)of the Colorado Constitution and legislation implementing
such constitutional provision, the Limited Debt Service Mill Levy will be increased or decreased
(as to all taxable real property in the District, including both residential and commercial real
property) to reflect such changes so that, to the extent possible, the actual tax revenues generated
by the mill levy, as adjusted, are neither diminished nor enhanced as a result of such changes
("Adjustment").
2. The District's ad valorem property tax mill levy for costs of the District's
administration and its limited operations and maintenance activities ("Administrative Mill
Levy") shall not be subject to the Limited Debt Service Mill Levy but shall be separately limited
to a total of three and one-half(3.5)mills, subject to Adjustment in the same manner provided in
paragraph (1) above. The District's authority to impose an Administrative Mill Levy shall
terminate upon dissolution of the District.
The mill levy limitations described above in this V.D. shall be enforceable limits
on all District mill levies, subject only to Adjustments as expressly provided for herein. The
District will also comply with all applicable statutory and constitutional limitations, restrictions
(00025572.DOC v:5) 33
and requirements applicable to its ad valorem property tax powers, as well as all limitations,
restrictions and requirements contained in its voted authorizations.
E. Costs of District Administration and Operations
Costs of the District's administration and its limited operations and maintenance
activities are estimated as shown on Exhibit H. The first year's operating budget (2004) is
estimated to be Thirty-Three Thousand Dollars ($33,000). It is anticipated that the District will
impose an operations and maintenance mill levy as set forth in Exhibit H. Exhibit H projects
that, starting in 2009, the District will have sufficient revenue to pay for the ongoing
administration and limited operations and maintenance activities of the District, as well as all
required debt service payments. Prior to that time, the Developer will advance or contribute
funds to the District. To the extent such advances are to be repaid to the Developer by the
District, they may be evidenced by Developer Bonds as provided in V.B(I) above to be repaid
from the Limited Debt Service Mill Levy.
The District's ad valorem property tax mill levy for costs of the District's
administration and its limited operations and maintenance activities shall be in addition to the
District's debt service mill levy.
F. District Revenue Sources
The District will impose ad valorem property tax mill levies(limited as set forth
in V.D. above) on all taxable property in the District as the primary source of revenue for
repayment of debt service and for costs of the District's administration and its limited operations
and maintenance activities. Although the mill levies imposed may vary depending on the
phasing of development and construction of facilities anticipated to be funded, it is estimated that
a total District mill levy of approximately forty(40)mills (subject to Adjustment)will produce
(00025572.DOC v:5( 34
revenue sufficient to support all debt service and administration, operations and maintenance
expenses throughout the repayment period. The District also expects to receive its share of
specific ownership taxes from the County, which are expected to serve as an additional source of
revenue for the District.
— It is anticipated that a development fee of$2,000 per single family unit and
$1,000 per multi-family unit will be imposed ("Facility Fee"). The District may only increase
the Facility Fee by 2%per year. All revenues received from the Facility Fee are expected to be
pledged for the repayment of principal and interest on Non-Developer Bonds. Once any Non-
Developer Bonds have been issued, Facility Fees shall be applied only to payment of debt
service on such Non-Developer Bonds.
The District may not impose any tax other than ad valorem property taxes (limited
as provided in V.D. above), and may not impose any fees or charges other than the Facility Fee,
without obtaining the Town's approval of an amendment to this Service Plan, which shall be
— considered a material modification hereof.
The District also expects to receive revenue from investment income and cost-
sharing payments as set forth in Exhibit H.
The Town shall have no collection, administration or other obligations or
responsibilities with respect to any revenues of the District. Payments to the District shall not
limit, reduce, affect, impair or discharge any taxes or fees to be paid to the Town or other
governmental entities serving the Property.
G. Revenue-Sharing Payments to Town for Public Improvements
I. Except as otherwise expressly provided in Section V.G.2 below, the
District will pay to the Town for deposit into the Town's capital improvements fund twenty-three
{00025572.DOC v:5) 35
percent (23%) of the District's total net bond proceeds derived from the issuance of Non-
Developer Bonds. Such amounts shall be paid to the Town immediately upon issuance and
delivery of each such series of Non-Developer Bonds which, according to Exhibit H, is
anticipated to occur in 2005 and 2008. The funds so paid to the Town may be used by the Town
to finance any street,park or recreation capital improvements, or other capital improvements
(either within or outside the boundaries of the District),which improvements the District would
otherwise be empowered to construct, i.e., streets, street lighting, traffic safety controls, water,
sanitary sewer, landscaping, storm drainage or park and recreation improvements and facilities,
any of which improvement shall be of benefit to the Town and District as determined by the
Board of Trustees.
— 2. By approving this Service Plan and executing the Town IGA, the Town
expressly agrees that if the Developer and/or the Districts fund the construction of or construct
the Saddleback Park Improvements in accordance with the Phasing Plan, Concept Plan and other
applicable provisions of the Park Agreement, Town IGA and this Service Plan, then the Certified
Construction Costs (as defined below) related to construction of the Saddleback Park
Improvements shall be applied as a credit toward the Districts' satisfaction of the revenue
— sharing obligations as set forth herein and in the Town IGA, and the provision set forth above
regarding revenue-sharing amounts being paid to the Town upon issuance and delivery of each
series of Non-Developer Bonds shall be inapplicable to the extent of such credit.
At least sixty(60) days prior to Hills No. 3's issuance of any Non-Developer
Bonds, the Districts shall provide the Town with documentation regarding the total costs
incurred by the Developer and/or the Districts for construction of the Saddleback Park
— Improvements, including but not limited to architecture and design, engineering, legal fees,
{00025572.DOC v:5) 36
construction management fees,permit fees, surveying expenses, and labor materials construction
costs("Certified Construction Costs"). Such documentation shall include an independent
engineer's certification of the construction costs and the District's certification that such
documents and costs incurred are true and accurate. The Certified Construction Costs shall
exclude costs for construction of any local or collector streets abutting Saddleback Park
(currently denoted as Saddleback Circle and Garland Street on the Concept Plan). The Certified
Construction Costs may include utility costs only for those utilities that directly serve
Saddleback Park. In the event that the Certified Construction Costs are equal to or exceed 23%
of the aggregate net proceeds(after deduction of reasonable amounts for capitalized interest,
reserve funds and issuance costs) of the Districts' Non-Developer Bonds previously issued and
to be issued as certified by the Districts' Financial Advisor("Aggregate Net Non-Developer
Proceeds"), the Districts shall be deemed to be in full compliance with the above-described
Town regional improvement revenue sharing obligation and the Town shall not be entitled nor
shall it seek additional participation from the Districts for regional improvements pursuant to
such obligation unless otherwise provided by mutual written agreement among the Districts and
the Town. In no event shall the calculation of Aggregate Net Non-Developer Proceeds include
Developer Bonds or Refunding Bonds. Alternatively, in the event that the Certified Construction
Costs are less than 23% of the Aggregate Net Non-Developer Proceeds, then, as provided in the
Town IGA and the Hills No. 3 Service Plan, Hills No. 3 shall pay the Town an amount equal to
— the difference between such 23% of Aggregate Net Non-Developer Proceeds and the Certified
Construction Costs from the proceeds of its first series of Non-Developer Bonds, or, if agreed by
the Town, from its first and second series of Non-Developer Bonds on a pro-rata basis.
{00025572.DOC v:5) 37
Although the Developer and Districts anticipate that issuing Non-Developer
Bonds will be issued to fund construction of Improvements or the acquisition of Improvements
from the Developer, they acknowledge the possibility that the Developer or a successor or
assignee thereof may elect to fully fund the Improvements and retain ownership of Developer
Bonds for more than five years thereby delaying the issuance of Non-Developer Bonds. In the
event that the Districts have not issued Non-Developer Bonds by the date that is one (1) year
after completion and the Town's conditional acceptance of the Saddleback Park Improvements,
the Districts acknowledge that the Developer is obligated pursuant to the Park Agreement to
submit the Certified Construction Costs to the Town and to pay the Town the amount, if any,
resulting from deducting the Certified Construction Costs from 23%of the aggregate net
proceeds of all Developer Bonds issued by any of the Districts, which shall be calculated by
deducting the reasonable issuance costs from the principal amount of all Developer Bonds issued
by the Districts which net amount shall be certified to the Town by the Districts' Financial
Advisor.
H. Economic Viability
Exhibit H illustrates the estimated income and expenses for the District over a
thirty-nine (39) year period assuming issuance of two (2)series of Non-Developer Bonds, each
maturing within a thirty(30) year period from the date of issuance. The analysis reflects a total
build-out period of four(4) years starting in 2005, and a total mill levy of forty(40) mills
(subject to Adjustment). It is also assumed that assessed valuation will be realized in the year
after construction and that tax collections will be realized in the second year after construction.
The District intends to capitalize interest on Non-Developer Bonds to permit payment of interest
during the time lapse between the issuance of Non-Developer Bonds and the collection of tax
{00025572.DOC v:5) 38
levies from the construction of taxable properties. Interest income through the reinvestment of
construction funds, capitalized interest, the Facility Fee, specific ownership taxes and annual tax
receipts will provide additional funds.
Town approvals are required and have not yet been obtained for the proposed
Development. The Developer acknowledges that Town development approvals and
requirements may affect the amount and timing of the development anticipated in this Service
Plan.
The Developer acknowledges and accepts the risk that, if all or a part of the Non-
Developer 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
advances made to the District.
These revenue sources are projected to be sufficient to retire all proposed District
debt assuming that development occurs as projected; otherwise, increases in the projected mill
levy(subject to the mill levy limit stated in V.D. hereof)may be necessary.
The Financial Plan contained in this Service Plan demonstrates the economic
viability of the District.
I. Quinquennial Review
Pursuant to Section 32-1-1101.5, C.R.S., the District shall submit application for a
quinquennial finding of reasonable diligence in every fifth calendar year after the calendar year
in which the District's ballot issue to incur general obligation indebtedness was approved by its
electorate. Upon such application, the Board of Trustees 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 Town's consultant and administrative costs associated with such
(00025572-DOC v:5) 39
review, and the Town may require a deposit of the estimated costs thereof. The Town shall have
all powers concerning the quinquennial review as provided by statutes in effect from time to
time.
J. Letters
In addition to the letters from the Developer and from THK and Associates
contained in Exhibit H and Exhibit L, there is attached hereto as Exhibit J an underwriter's
letter stating its intention to underwrite the District's financial obligations as proposed in this
Financing Plan. There is attached hereto as Exhibit K 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 debt, fees and revenue sources) meet the requirements of Title 32,
C.R.S., and other applicable law. There is attached hereto as Exhibit S a letter from Bond
Counsel for the District (i) stating that provisions for payments to the Town are permissible
under currently applicable laws, and that the District is permitted by currently applicable laws to
make such payments to the Town as described in Article V.G; and (ii)describing any significant
legal or tax requirements or restrictions that the Town will be expected to comply with in
connection with such payments, other than those requirements and restrictions set forth in
Section 11 of the form of Town IGA attached hereto as Exhibit O.
VI. LANDOWNERS' OBLIGATIONS AS TO PUBLIC IMPROVEMENTS
The creation of the District shall not relieve the Developer, or the landowner or any
subdivider of property within the District or Development, or any of their respective successors
or assigns, of obligations to: construct public improvements for the Development; including,but
not limited to,the Saddleback Park Improvements; enter into subdivision improvement
(00025572.DOC v:5} 40
agreements regarding all such improvements; provide to the Town letters of credit as required by
the Town to ensure the completion of all such public improvements; or any other obligations to
the Town under Town ordinances, rules, regulations or policies or under the annexation
agreement, as amended, subdivision improvement agreement, or other agreements affecting the
property within the District or the Development, or any other agreement between the Town 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 Town within one
hundred and twenty(120) days from the conclusion of the District's fiscal year. Failure of the
District to submit such report shall not constitute an unauthorized material modification hereof
unless the District refuses to submit such report within thirty(30) days after a written request
from the Town to do so. The District's fiscal year shall end on December 31st of each year. The
content of the annual report shall include information as to the following matters which 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 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;
(00025572.DOC v:5) 41
H. Status of construction of Improvements, including but not limited to a detailed
report of the status of the Saddleback Park Improvements completed in the preceding year and
planned for the upcoming year and identification of which entity(District(s) or Developer)has
completed or will be completing such Improvements;
I. The current assessed valuation in the District; and
J. A schedule of all fees, charges and assessments imposed in the report year and
proposed to be imposed in the following year, and the revenues raised or proposed to be raised
therefrom.
The foregoing list shall not be construed to excuse the requirement for prior written Town
approval of those matters that are considered material modifications of this Service Plan, or for
any other required Town 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 Town, the District shall provide to the Town a currently
dated and written certificate, signed by the President and Secretary of the District, certifying that
the District is in full compliance with this Service Plan and with the Town IGA. 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 Town in providing
further information as to, and promptly remedying, any such noncompliance. The Town reserves
the right, pursuant to Section 32-1-207(3)(c), 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 Town by providing prompt responses to all reasonable requests by the
Town for information, and the District shall permit the Town to inspect the Improvements and all
books and records of the District.
;00025572.noc v5) 42
VIII. DISSOLUTION
Promptly when all of the debt to be issued by the District as described in Article V hereof
has been paid or otherwise discharged (or when provision for payment thereof has been made
through establishment of an escrow as provided by Section 32-1-702(3)(b), C.R.S.), the District
will so notify the Town and will cooperate fully with the Town in taking all steps necessary
under then applicable law to dissolve the District (including, without limitation: formulating a
plan of dissolution; executing the District's consent to dissolve pursuant to Section 32-1-
704(3)(b), C.R.S.; making any necessary agreements as to continuation or transfer of
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 Non-Developer Bonds as
contemplated by the Financial Plan (excluding Refunding Bonds),upon the Town's request, the
District will cooperate fully with the Town to dissolve the District pursuant to a plan for
dissolution stating that there are financial obligations or outstanding bonds and specifically
providing that the special district will continue in existence (with the Town Board of Trustees
serving as the District Board if the Town so elects) to such extent as is necessary to adequately
provide for the payment of such financial obligations and outstanding bonds as provided in §§
32-1-702(3)(c) and 32-1-707(2)(c), C.R.S. Also, on or after December 31, 2011, if the District
has not issued any of its Non-Developer Bonds, the Town shall have the right to require the
District to dissolve in accordance with applicable law, and the District will cooperate fully with
the Town 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(constituting the owner
{00025572.DOC v.5} 43
of one hundred percent (100%) of the land in the District) 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 IX hereof and succeeding directors who own land
within the District); such agreements shall obligate all such persons to cooperate fully with the
Town as described above, including,without limitation, the signing of the petitions, execution of
consents, and voting in favor of dissolution in any required election.
IX. ELECTIONS
Following approval of this Service Plan by the Town, 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 order, the
Uniform Election Code of 1992, as amended from time to time, and the TABOR Amendment,
and the initial District election is currently planned for November 2, 2004, but may be held on
any legally permitted date. The initial election questions are expected to include whether to
organize the District, election of initial directors, and ballot issues and questions required by the
TABOR Amendment and by applicable statutes. Thus, the ballot may deal with the following
topics (in several questions,but not necessarily using the exact divisions shown here):
a) Whether to organize the District;
b) Membership and terms of the initial board members;
c) Approval of new taxes;
d) Approval of maximum operational mill levies;
e) Approval of bond and other indebtedness limits, and approval of
multiple fiscal-year obligations;
{00025572.DOC v:5) 44
f) Approval of an initial property tax revenue limit;
g) Approval of an initial total revenue limit; and
h) Approval of an initial fiscal year spending limit
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 to comply with the
TABOR Amendment 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
intended as nominees for the initial boards of directors of the District:
Clint Blum
Ron Gollehon
Kimberly Gollehon
Sharon M. Blum
X. INDEMNITIES
The fully executed Saddleback Hills Lake &Conservancy Limited Liability Company
and Saddleback Hills Lake and Conservancy#2 Indemnity Letter attached hereto as Part 1 of
Exhibit L is submitted by the Developer to the Town as part of this Service Plan. The form of
The Hills Metropolitan District No. 2 Indemnity Letter attached hereto as Part 2 of Exhibit L
shall be executed by the District and delivered to the Town as soon as practicable upon formation
of the District. The execution of such Indemnity Letters are material considerations in the
Town's approval of this Service Plan, and the Town has relied thereon in approving this Service
Plan. The District shall not incur any financial obligations outside of the ordinary course
necessary as part of the District's organizational meeting (e.g., secure D&O insurance), or
(00025572.DOC v:5} 45
otherwise perform any functions authorized under this Service Plan until the District's Indemnity
Letter has been duly executed and delivered to the Town.
XI. DISCLOSURE AND DISCLAIMER; NO THIRD PARTY RIGHTS
The District will also record a statement against the property within the District which
will include notice of the existence of the District, anticipated mill levies and maximum allowed
mill levies. The form of the notice is attached hereto and incorporated herein as Exhibit M
subject to any changes directed by the Town in the future. In addition, there is attached hereto as
Exhibit N a form of Town disclaimer statement. The District shall conspicuously include this
disclaimer statement, or any modified or substitute statement hereafter furnished by the Town, 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 form of disclosure or the disclaimer set forth in Exhibits M and N, except as directed by the
Town. Neither this Service Plan, the Town IGA set forth in Exhibit O hereto, nor any other
related agreements, shall be construed to impose upon the Town any duties to, nor confer any
rights against the Town upon, any bondholders, lenders, investors, contractors or other third
parties.
XII. INTERGOVERNMENTAL AGREEMENTS
The District shall enter into an intergovernmental agreement with the Town (the "Town
IGA"),which shall be in substantially the form set forth in Exhibit O. The District shall execute
and deliver the Town IGA to the Town as soon as practicable upon formation of the District.
The execution of such Agreement is a material consideration in the Town's approval of this
Service Plan, and the Town has relied thereon in approving this Service Plan. As discussed
i00025572.DOC v:5) 46
above, it is also anticipated that the Districts will enter into the District IGA. The District shall
cause the District IGA to be fully executed by all three Districts and shall deliver a fully
executed and certified copy thereof to the Town as soon as practicable upon formation of the
District. The execution of such District IGA is a material consideration in the Town's approval
of this Service Plan, and the Town in approving this Service Plan has relied upon the
Developer's representations that such District IGA will be executed 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 Town IGA and District IGA have
been fully executed and delivered to the Town.
No other intergovernmental agreements are proposed at this time, but such agreements
are anticipated between the District and Central Weld, the Recreation District and potentially
other entities providing service to the Property. Any intergovernmental agreements proposed to
e-
be entered into by the District shall be subject to review and approval by the Town 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.
XIII. 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 Town is eligible to apply. The District shall
remit to the Town any and all conservation trust funds which it receives.
(00025572.DOC v:5) 47
XIV. MODIFICATION OF SERVICE PLAN
The District shall obtain the prior written approval of the Town before making any
material modifications to this Service Plan. Material modifications require a Service Plan
amendment and include, but are 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 materially inconsistent with the District's financial
ability to discharge such obligations as shown in the build out, assessed valuation and other
forecasts in Exhibit H, or any change in any debt limit, change in revenue type, or change in
maximum mill levy(except for any necessary Adjustment as provided in V.D. above);
C. Any change in the type of improvements or change of more than fifteen percent
(15%) in the estimated costs of improvements from what is stated in Exhibit C of this Service
` Plan;
D. Failure to comply with the requirements of this Plan concerning the dedication of
Improvements or the acquisition and conveyance of lands or interests in land;
E. Failure of the District to develop any capital facility proposed in this Service Plan
when necessary to service approved development within the District.
F. If the Districts undertake the construction of the Saddleback Park Improvements,
failure of the Districts to improve Saddleback Park in accordance with the Phasing Plan.
G. Failure to obtain the required certification in accordance with Article V.B.2.c.vi.
herein.
(000255n.DOC v:5) 48
H. The occurrence of any event or condition which is defined under the Service Plan
or Town IGA as necessitating a service plan amendment;
I. Any proposed use of the powers set forth in Sections 32-1-1101(1)(f) and 1101
(1.5), C.R.S. respecting division of the District;
— J. The default by the District under any intergovernmental agreement with the Town
or among the District and any one or more of the Districts.
K. Any of the events or conditions enumerated in Section 32-1-207(2), C.R.S.;
L. Failure by the District to deliver its executed Indemnity Letter as provided in
Article X hereof, or enter into the Town IGA and the District IGA (in the form of the District
IGA as reviewed and approved by the Town)upon the District's formation as provided in Article
XII hereof.
M. Any action or proposed action by the District which 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 which
may be identified as a material modification.
The District will pay all reasonable expenses of the Town, its attorneys and consultants,
as well as the Town's reasonable processing fees, in connection with any request by the District
for modification of this Service Plan or administrative approval by the Town of any request
hereunder. The Town may require a deposit of such estimated costs.
XV. RESOLUTION OF APPROVAL
The Developer and other proponents of the District agree to and shall incorporate the
Board of Trustees' Resolution of Approval, including any conditions on such approval, into the
{00025572.DOC v:5} 49
Service Plan presented to the appropriate district court. Such resolution shall be attached as
Exhibit R.
XVI. FAILURE TO COMPLY WITH SERVICE PLAN
In the event it is determined that the District has undertaken any act or omission which
violates the Service Plan or constitutes a material departure from or an unauthorized material
modification of the Service Plan, the Town may utilize the remedies set forth in the statutes to
seek to enjoin the actions of the District, or may 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. Additionally, if such failure to comply with this Service Plan
respects any obligation of the District, if undertaken by the District, to comply with the Phasing
Plan, then the Town may withhold issuance of any further building permit for the Development
if such failure is not cured within sixty(60) days of notice of such failure to comply. The
District shall pay any and all costs, including attorneys' fees, incurred by the Town 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 that it will not rely on such provisions as a bar
to the enforcement of any provisions of this Service Plan, unless the Town gives its prior written
consent to such reliance. Any such consent shall be evidenced by a written resolution the Board
of Trustees.
XVII. 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
_ any portion so held invalid or unenforceable, the District and the Town agree to pursue
I00025572.DOC v:5) 50
amendment or take such other actions as may be necessary to achieve to the greatest degree
possible the intent of the affected portion.
XVIII.CONCLUSION
It is submitted that this Service Plan for the proposed The Hills Metropolitan District No.
2 establishes that:
A. There is sufficient existing and projected need for organized service in the area to
be serviced by the proposed District;
B. The existing service in the area to be served by the proposed District is inadequate
for present and projected needs;
C. The proposed District is capable of providing economical and sufficient service to
the Development; and
D. The area to be included in the proposed District has or will have, the financial
ability to discharge the proposed indebtedness on a reasonable basis.
XIX. CERTIFICATION
This Service Plan is submitted to the Town by the undersigned Developer,which is the
District organizer and sole owner of the Property and the Development. The undersigned has
caused written notice of the Town's hearing on the proposed Service Plan to be duly given, on or
prior to the initial hearing date, to "all interested parties" within the meaning of Section 32-1-
204, C.R.S. The undersigned will cause all required filings to be made and all other applicable
procedural requirements to be met with respect to organization of the District. To the best of
Developer's knowledge, the information contained in this Service Plan is true and correct as of
this Date. The undersigned representatives certify that they have been duly authorized to execute
this Certification on behalf of the entities set forth above their respective signatures.
(00025572.DOC v:5) 51
[SIGNATURE PAGE TO THE HILLS METROPOLITAN DISTRICT NO. 2
SERVICE PLAN]
Saddleback Hills Lake & Conservancy Limited
Liability Company
By:
Title:
Date:
Saddleback Hills Lake and Conservancy#2 LLC
By:
Title:
Date:
(00025572.DOC v:5) 52
[SIGNATURE PAGE TO THE HILLS METROPOLITAN DISTRICT NO. 2
SERVICE PLAN]
Saddleback Hills Lake & Conservancy Limited
Liability Company
By: /
Title:
Date: (?,
Saddleback Hills Lake and Conservancy#2 LLC
s
By:
Title: Vvp,,,,,,4„
Date: G( _� z . o (-1
(00025572.DOC v:1) 52
EXHIBIT A
Legal Description of Initial Property
a..J
` 1
J
J
-
A
(00020848.DOC v:11
. THE HILLS METROPOLITAN DISTRICT NO. 2
PARCEL I
L A part of the South Half of Section 20 and a part of the Northwest Quarter of Section 29, Township
2 North, Range 67 West of the Sixth Principal Meridian, Town of Firestone, County of Weld, State
of Colorado, being more particularly described as follows:
BEGINNING at the Southeast corner of said Section 20;
= Thence North 89°42'37"West, along the south line of the Southeast Quarter of said Section 20, a
distance of 2630.01 feet to the North Quarter corner of said Section 29; •
Thence South 00°11'58"East, along the east line of the Northwest Quarter of said Section 29, a
distance of 2632.75 feet to the Center Quarter corner of said Section 29;
Thence North 89°40'46"West, along the south line of the said Northwest Quarter, a distance of
1929.96 feet to a point;
Thence North 00°00'20"East a distance of 1236.54 feet to a point;
Thence North 89°59'40"West a distance of 16.98 feet to a point
Thence North 00°00'20"East a distance of 120.00 feet to a point,
— . Thence North 01°29'21" West a distance of 1232.79 feet to a point;
Thence North 00°29'37"East a distance of 50.00 feet to a point on the south line of the Southwest
Quarter of said Section 20;
Thence South 89°30'23"East, along said south line, a distance of 1429.30 feet to a point;
Thence North 00°00'20"East a distance of 208.81 feet to a point of curvature;
Thence along the arc of a curve to the right having a central angle of 45°04'12", a radius of
440.00 feet, an arc length of 346.11 feet and whose chord bears North 22°32'26"East a
distance of 337.26 feet to a point of tangency;
Thence North 45°04'32"East a distance of 132.10 feet to a point of non-tangent curvature;
Thence along the arc of a curve to the left having a central angle of 40°39'55", a radius
of 835.00 feet, an arc length of 592.63 feet and whose chord bears
South 69°22'40"East a distance of 580.27 feet to a point of tangency;
Thence South 89°42'37"East a distance of 44.00 feet to a point; •
Thence North 00°17'23"East a distance of 70.00 feet to a point;
Thence South 89°42'37"East a distance of 43.00 feet to a point;
Thence North 00°17'23"East a distance of 27.30 feet to a point of curvature;
Thence along the arc of a curve to the right having a central angle of 70°56'06", a radius
of 300.00 feet, an arc length of 371.41 feet and whose chord bears
North 35°45'26"East a distance of 348.14 feet to a point of tangency;
Thence North 71°13'29"East a distance of 190.95 feet to a point of curvature;
Thence along the arc of a curve to the left having a central angle of 71°13'09", a radius
of 150.00 feet, an arc length of 186.45 feet and whose chord bears
•
North 35°36'55"East a distance of 174.68 feet to a point of tangency;
Thence North 00°00'20"East a distance of 257.78 feet to a point;
Thence North 83°29'17"East a distance of 1815.42 feet to a point on the east line of the Southeast
( Quarter of said Section 20;
•
•
PAGE 1 OF 2
�L
Thence South 01°02'38"East, along the east line of said Southeast Quarter, a distance of 1473.92
feet to the POINT OF BEGINNING.
PARCEL 2
A part of the Southwest Quarter of said Section 20,being more particularly described as follows:
Commencing at the Southwest corner of said Section 20;
Thence South 89°30'23"East, along said south line of the Southwest Quarter of said Section 20, a
distance of 740.03 feet to a point;
_ Thence North 01°03'51"West a distance of 63.66 feet to a point;
Thence North 88°56'09"East a distance of 35.00 feet to the POINT OF BEGINNING;
Thence North 01°03'51" West a distance of 714.81 feet to a point of curvature;
Thence along the arc of a curve to the right having a central angle of 14°04'36", a radius
•
of 575.00 feet, an arc length of 141.27 feet and whose chord bears
North 05°58'28"East a distance of 140.91 feet to a point of tangency;
• Thence North 13°00'45"East a distance of 199.34 feet to a point;
Thence South 55°47'01"East a distance of 955.20 feet to a point;
Thence North 82°41'12"East a distance of 349.28 feet to a point; •
Thence North 65°08'39"East a distance of 241.89 feet to a point;
•
Thence South 45°04'32" West a distance of 121.12 feet to a point of curvature;
Thence along the arc of a curve to the left having a central angle of 45°04'12", a radius of
621.00 feet, an arc length of 488.49 feet and whose chord bears South 22°32'26"West a
distance of 475.99 feet to a point of tangency;
Thence South 00°00'20"West a distance of 142.14 feet to a point of curvature;
Thence along the arc of a curve to the right having a central angle of 90°29'17", a radius
of 15.00 feet, an arc length of 23.69 feet and whose chord bears
South 45°14'59"West a distance of 21.30 feet to a point of tangency;
Thence North 89°30'23"West a distance of 1103.89 feet to a point of curvature;
Thence along the arc of a curve to the right having a central angle of 88°26'32", a radius
of 15.00 feet, an arc length of 23.15 feet and whose chord bears
North 45°17'07" West a distance of 20.92 feet to the POINT OF BEGINNING.
•
Containing 212.844 acres, more or less.
•
The above and foregoing describes a surface estate only. Expressly excluded from this
legal description are any estates below the surface including oil, gas and other minerals
(including sand and gravel) and any related rights of surface use.
cy_ PAGE 2 OF 2 .t.
EXHIBIT A-1
District Map
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- i 2 OF 4 THE HILLS 7901E Belleview Avenue
Date:04/07/03 sui 8 1
Englewood,CO 8011111
Job No:01803101 METROPOLITAN DISTRICT NO. 2 Tel:(720)482-9526
Fu(120)482-9546
This drawing is intended only to accompany the attached legal CONSULTANTS, INC. OF COLORADO
description and does not represent a monumented land survey. MIL.ENOINeEMINo • LAND nICICvsuo . LANDNLANae0
J:
EXHIBIT B
1 District, Development and Vicinity Map
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09/05/2003 08:00 7204829546 CVL CONSULTANTS PAGE 02
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EXHIBIT C
Description of Facilities and Costs
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Civil Engineering
Land Surveying
Land Planning
CONSULTANTS OF COLORADO,INC.
G June 23,2004
gg City of Firestone
L,. 151 Grant Avenue
Firestone,Colorado 80520
Re: Engineer's Estimate of Anticipated Costs for the Service Plan for the Hills
Metropolitan District No. 2.
Firestone,Colorado
C CVL Ref.#01803101
CVL Consultants has prepared and reviewed the estimate of anticipated costs for the
Service Plan for the Hills Metropolitan District No. 2. This estimate was based on the
quantities reflected in the preliminary design for the Saddleback Hills Lake and
Conservancy construction plans. The unit costs for the included items are based on
L., current construction standards and deemed acceptable.
The attached estimate should be a reasonable assumption of the probable cost for the
improvements of this project.
Sincerely,
CVL Consultants of Colorado, Inc.
tai • j tt,
..o• 693 A;
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• ' /
James J. Jannicke,P.E. •
Project Manager
- 1
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- 7901 E. Belleview Ave., Ste 150 Englewood, CO 80111 Tel. (720) 482-9526 FAX (720) 482-9546
DENVER • PHOENIX LAS VEGAS
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SADDLEBACK HILLS LAKE AND CONSERVANCY SADDLEBACK HILLS LAKE AND CONSERVANCY SADDLEBACK HILLS LAKE AND CONSERVANCY
ENGINEER'S ESTRATE OF ANTICIPATED ENGINEER'S ESTIMATE OF ANTICIPATED ENGINEER%ESTIMATE OF ANTICIPATED
METRO DISTRICT COSTS II METRO DISTRICT COSTS 82 METRO DISTRICT COSTS H
LOTS 772 42.70% 1803 TOM Leto LOTS 443 3524% 1440 LOTS CONIIRNNM
VILLAGES 1,2,411 VILLAGES 3,12-14,18-15
STREET EXCAVATION OFF SITE TOTAL COST STREET EXCAVATION OFF SITE TOTAL COST STREET EXCAVATION OFF SITE
TOTAL COST
$365,51530 $11661320 $17,539.40
WATER TOTAL COST WATER TOTAL COST WATER
TOTAL COST
$t,751UEXT1 $19$52X62 $333.714.00
STORM DRAINAGE TOTAL COST STORM DRAINAGE TOTAL COST STORM DRAINAGE
TOTAL COST
91,502,492.00 $544,250.00 $55,311.00
GAS/OIL RELOCATION FOR PUBLIC IMPROVMENTS TOTAL COST GAS/OIL RELOCATION FOR PUBLIC IMPROVMTNTS TOTAL COST GA3roIL RELOCATION FOR PUBLIC IMPROVMERTS
TOTAL COST
$5.418,50190 $4YA50.00,, 1166.000.00
STREETS/SAFETY PROTECTION TOTAL COST STREETS/SAFETY PROTECTION TOTAL COST STREETS/SAFETY PROTECTION
TOTAL COST
92.919,93125 $1,750,332.50 $725,305.30
PARKS&RECREATION TOTAL COST P I RECREATION TOTAL COST PARKS&RECREATION
TOTAL COST
$9,057,918.11 91,100.55]97 $574,744.52
PROFESSIONAL FEES TOTAL COST PROFESSIONAL FEES TOTAL COST PROFESSIONAL FEES
TOTAL COST
$701,788.18 $509,552.50 $125,10530
GENERAL PROJECT COSTS SUMMARY GENERAL PROJECT COSTS St GENERAL PROJECT COSTS St
' ITEM TOTAL COST ITEM TOTAL COST ITEM TOTAL COST
STREET EXCAVATION OFF SITE $553,82530 STREET EXCAVATION OFF SITE $116613.50 STREET EXCAVATION OFF SITE 111,525.40
WATER $1,705182.73 WATER 51,451,01922 WATER !333,714.00
STORM DRAINAGE $1,302,02.00 STORM DRAINAGE $644.280.00 STORM DRAINAGE 558.853.00
STREETS MID SAFETY PROTECTION 12,939,53121 STREETS AND SAFETY PROTECTION $1,130,53220 STREETS AND SAFETY PROTECTION $125,305.50
PARKS I RECREATION $5047,93611 PARKS A RECREATION $4,406187.51 PARKS&RECREATION $114,744.82
GAS&OIL RELOCATION FOR PUBLIC IMPROVEMENTS 11.418,50120 GAS&OIL RELOCATION FOR PUBLIC IMPROVEMENTS $188,050.00 GAS&OIL RELOCATION FOR PUBLIC IMPROVEMENTS 1188,000.00
ESTIMATED TOTAL CONSTRUCTION COST: $17,044,174,41 FSTNATED TOTAL CONSTRUCTION COST: 16924,9782 ESTIMATED TOTAL CONSTRUCTION COST: 12,186381.32
PROFESSIONAL FEES $701,75520 PROFESSIONAL FEES 9509,55230 PROFESSIONAL FEES 9125,505.201
PROJECT MANAGEMENT 6%OF CONSTRUCTION COSTS 9552,20.72 PROJECT MANAGEMENT F%OF CONSTRUCTION COSTS $4419412 PROJECT MANAGEMENT 5%OF CONSTRUCTION COSTS $109,319.371
CONTINGENCIES 15% $2955,52615 CONTINGENCIES 15% 51.323,74420 CONTINGENCIES 15% 1727956.10
ESTIMATED ADDITIONAL COST& $4,116504,38 ESTIMATED ADDITIONAL COSTS: 12,274947.14 ESTIMATED ADDITIONAL COSTS: $56691X88
DISTRICT II COST ESTIMATE: 521,154,77619 DISTRICT 32 COST ESTIMATE $11,095,52/221 DISTRICT83 COST ESTIMATE 52.752,45595
$35,006.77120
EXHIBIT D
Street and Safety Protection Improvements
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EXHIBIT E
Drainage Improvements
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Park and Recreation Improvements
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Saddleback Park Phasing Plan
Page 1: Saddleback Park Improvements**, Deadlines and Estimated Costs
PHASE 1
Acres 33.3 Acres
Relocation of oil and gas facilities 3 Oil/gas Wells
Relocation of Sinclair pipeline 1
Overlot grading TBD
Seeding TBD
Estimated Cost $ 250,000 Phase 1
Completed Prior to Issuance of 152 Building Permits
PHASE 2
Acres 8.7 Acres
CBT Shares TBD' Shares
Soccer Fields 2 Fields
Parking Lot(Central) 1 Parking Lot: 100 spaces
Internal Driveways TBD
10-wide Concrete Trail As Shown
Walkways, Landscaping, Irrigation TBD
Signage TBD
Necessary Utilities TBD
Necessary Grading and Drainage TBD
Restroom TBD
Other Park Equipment TBD
Engineer and Landscape Arch Design TBD
Average Cost Per Acre $ 130,000
Estimated Cost $ 1,131,000 Phase 2
Completed Prior to Issuance of 386 Building Permits
Subtotal $ 1,381,000 Phases 1 and 2
PHASE 3
Acres 12.5 Acres
CBT Shares TBD' Shares
Soccer Fields 1 Field
Softball Fields 1 Field
Parking Lot(Central) 1 Parking Lot: 150 spaces
Internal Driveways TBD
10-wide Concrete Trail As Shown
Walkways, Landscaping, Irrigation TBD
Signage TBD
Necessary Utilities TBD
Necessary Grading and Drainage TBD
Concession,Restroom, etc Building TBD
Other Park Equipment TBD
Engineering&Landscape Arch Design TBD
Average Cost Per Acre $ 130,000
Estimated Cost $ 1,625,000 Phase 3
Completed Prior to Issuance of 722 Total Building Permits
Subtotal $ 3,006,000 Phases 1,2 and 3
Saddleback Park Phasing Plan
Page 2: Saddleback Park Improvements*', Deadlines and Estimated Costs
PHASE 4
Acres 12.1 Acres
CBT Shares TBD* Shares
Softball Fields 1 Field
10-wide Concrete Trail TBD
Walkways, Landscaping, Irrigation TBD
Signage TBD
Necessary Utilities TBD
Necessary Grading and Drainage TBD
Other Park Equipment TBD
Engineer&Landscape Arch Design TBD
Average Cost Per Acre $ 130;000
Estimated Cost $ 1,573,000 Phase 4
Completed Prior to issuance of 1,048 Building Permits
Total Cost $ 4,579,000 Phases 1,2,3 and 4
•Owner shall dedicate water
necessary for irrigation of turf and
landscape areas identified in the final
development plan for the Saddleback
Park Improvements. Dedications shall
be CBT units and shall be at a rate of
2.5 units per acre of irrigated turf and
landscape area (1.0 units per acre for
areas approved for planting of native
grass)unless the Town otherwise
agrees to different rates or alternative
water supplies. Dedications shall be
made at or prior to the time phases are
completed to allow for timely irrigation
of installed turf and landscaping.
•
** As more specifically set forth in the Park Agreement,the Saddleback Park Improvements and
the Phasing Plan and Concept Plan may be modified through the final plat/final development
process,and the Districts or Developer will construct the Saddleback Park Improvements as set
forth on the final plat and final development plan for Saddleback Park. Further, Saddleback Park
Improvements may be shifted among Phases as identified at the time of subdivision agreement,
provided that the expenditures for each Phase of Saddleback Park Improvements shall be at a
rate of$130,000 per acre for all acreage within each Phase(other than Phase 1,which shall be in
the amount set forth herein, and shall not exceed the total estimated cost for each such Phase as
set forth herein). (As an example,if all Improvements listed within Phase 3 cannot be completed
at an expenditure rate of$130,000 per acre,then at the time of subdivision agreement, a portion
of the Phase 3 Improvements may be identified for completion as part of Phase 4).
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1 if/ 1` I l�11— 11 r l ,r c il. i,) Exhibit B
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710 West CdfaxAwiu
8.panber THE VILLAGES OF SADDLEBACK HILLS ' lJJ J F 303 692 °'�'
20.Me COMMUNITY PARK PLAN NORMS tw ��
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Water System Improvements
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Financial Plan
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The Hills Metropolitan Districts#1 to#3
--- Analysis of Bonds,Subordinate Developer Debt,Developer Contributions and other Revenues for District Improvements
District#1 District#2 District#3 Totals
Alternative A Alternative B Alternative A Alternative B Alternative A Alternative B Alternative A Alternative B
— Sources:
General Obligation Bonds
Issue#1 3,800,000 3,250,000 3,250,000 3,600,000 3,400,000 NIA 10,450,000 6,850,000
Issuance costs (188,0451 (130,0001 1156,322) (144,0001 (157,383) (501,750) (274,0001
Reserve (282,000) (242,200) (267,617) (791,817) 0
Capitalized interest&expenses 0 (187,129) 0 0 (499,067) I (499,0671 )187,129)
Net Issue#1 3,329,955 2,932,871 2,051,418 3,456,000 2,475,933 0 8,651,366 6,388,871
Issue#2 4,215,000 5,100,000 3,900,000 4,550,000 5,975,000 14,090,000 9,650,000
Issuance costs (203,852) (204,0001 (177,586) (182,000) (264,4301 (645,868) (386,0001
Issuance costs (340,8831 (313,075) (476,617) (1,130,5751 0
—
Capitalized interest&expenses (848,853) (848,853) 0
Net Issue#2 3,670,265 4,896,000 3,409,339 4,368,000 4,385,100 0 11,464,704 9,264,000
—
Subordinate Developer Debt 10,551,276 8,757,112 3,889,660 2,278,511 4,695,394 19,136,330 11,035,623
Reimbursement from Other Districts
Used to retire Dev Debt•principal (2,290,172) (2,419,622) (2,290,172) (2,419,622)
Used to retire Dev Debt interest (883,044) (753,594) (883,044) (753,594)
Proceeds from 60 bond issues
Used to retire Dev Debt-principal (4,997,002) (6,337,490) (1,000,7801 (2,278,511) (3,165,650) (9,163,432) (8,616,001)
Used to retire Dev Debt-interest (2,003,218) (1,491,381) (1,021,119) 1719,423) 11,219,450) (4,243,787) (2,210,804)
Net Subordinate Dev Debt 3,264,102 0 2,888,880 0 1,529,744 0 7,682,726 _ 0
Interest on Subordinate Dev
— Debt paid from above sources (2,886,262) (2,244,975) (1,021,119) (719,4231 (1,219,450) 0 (5,126,8311 (2,964,398)
Developer contribution 4,257,068 6,051,232 2,804,306 3,818,307 5,257,434 12,318,808 9,869,539
— Interest income 10,000 20,000 0 10,000 20,000
Total net sources 11,635,128 11,635,128 10,942,884 10,942,884 12,428,761 0, 35,006,773 22,578,012
Uses-District Improvements:
District improvements paid by this District 21,154,778 21,154,778 11,099,525 11,099,525 2,752,470 35,006,773 32,254,303
Improvements paid by other Districts
—
that benefit this District 3,173,217 3,173,217 9,676,291 12,849,508 3,173,217
Improvements paid by this District above
that benefit other Districts (9,519,650) (9,519,650) (3,329,858) (3,329,8581 0 (12,849,5081 (12,849,508)
Contingency 0 0 0
—
Total improvements 11,635,128 11 635,128 10,942,884 10,942,884 12,420,161_ 0F 35,006 773 22,518,012
— Total residential units 769 769 648 648 N/A NIA 1,417 1,417
Total commercial square feet NIA NIA NIA NIA 492,446 492,446 492,446 492,446
Total Assessed Value at Buildout 14,792,630 14,792,630 14,263,297 14,263,297 16,555,729 16,555,729 45,611,656 45,611,656
I I I I I I I I I I I I I I I I I I I
The Hills Metropolitan Districts
Alternative A
I Variable Rate Bonds
I Capital Projects Fund I
District#1
• Sources of Funds Uses of Funds
Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total
•
YEAR Proceeds Advances Contribution Other Dist's Income Sources Debt Service Devl Advances Improvements Other Dist's Uses
2004 10,551,276 4,257,068 14,808,344 14,808,344 14,808,344.
2005 3,611,955 3,173,217 6,785,172 282,000 4,387,694 2,115,478 6,785,172'.
2006 6,346,433 6,346,433 2,115,477 4,230,956 6,346,433
2007 0 0
2008 4,011,148 4,011,148 340,883 3,670,265 4,011,148!
2009 0 0
2010 0 0
7,623,103 10,551,276 4,257,068 9,519,650 0 31,951,0971 622,883 10,173,436 21,154,778 0 31,951,097'
District#2 •
Sources of Funds Uses of Funds
Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total
YEAR Proceeds Advances Contribution Other Dist's Income Sources Debt Service Devl Advances Improvements Other Dist's Uses
2004 1,387,441 1,387,441 1,387,441 1,387,441
2005 3,093,678 311,739 10,000 3,415,417 242,000 3,173,217 3,415,217
2006 2,190,480 1,416,865 3,329,858 6,937,203 6,937,203 6,937,203;
2007 1,387,441 1,387,441 1,387,441 1,387,441
2008 3,722,414 3,722,414 313,075 2,021,899 1,387,440 3,722,414'
2009 0 0
2010 0 0_;
6,816,092 3,889,660 2,804,306 3,329,858 10,000 16,849,9161 555,075 2,021,899 11,099,525 3,173 217 16,849,716,
District#3
Sources of Funds Uses of Funds
Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total
YEAR Proceeds Advances Contribution Other Dist's Income Sources Debt Service Devl Advances Improvements Other Dist's Uses
2004 0 0
2005 0 0'
2006 3,242,617 4,695,394 2,504,964 10,442,975 766,684 9,676,291 10,442,975
2007 2,752,470 2,752,470 2,752,470 2,752,470
2008 0 0
2009 5,710,570 5,710,570 1,325,470 4,385,100 5,710,570
2010 0 0
8,953,187 4,695,394 5,257,434 0 0I 18,906,015 2,092,154 4,385,100 2,752,470 9,676,291 18,906,015
111 Net Bond Proceeds = Gross Bond Proceeds-Issuance Costs
I I I I I I 1 I I I I I I I I I I 1 I
The Hills Metropolitan Districts
Alternative B
Fixed Rate Bonds
Capital Projects Fund
District#1
Sources of Funds Uses of Funds
Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total
YEAR Proceeds Advances Contribution Other Dist's Income Sources Debt Service Devl Advances Improvements Other Dist's Uses
2004 8,757,112 6,051,232 14,808,344 14,808,344 14,808,344.
2005 3,120,000 3,173,217 6,293,217 187,129 3,990,610 2,115,478 6,293,2171
2006 6,346,433 6,346,433 2,115,477 4,230,956 6,346,433
2007 0 0
2008 4,896,000 4,896,000 4,896,000 4,896,000
2009 0 0
2010. 0 0
8,016,000 8,757,112 6,051,232 9,519,650 0j 32343,994P 187,129 11,002,087 21,154778 0 32,343,994
District#2
Sources of Funds Uses of Funds
Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total
YEAR Proceeds Advances Contribution Other Dist's Income Sources Debt Service Devl Advances Improvements Other Dist's Uses _
2004 1,387,441 1,387,441 1,387,441 1,387,441
2005 3,456,000 20,000 3,476,000 17,374 3,173,217 3,190,591
2006 891,070 2,430,866 3,329,858 6,651,794 6,937,203 6,937,203
2007 1,387,441 1,387,441 1,387,441 1,387,441
2008 4,368,000 4,368,000 2,980,560 1,387,441 4,368,001
2009 0 0
2010 0 0'
7,824,000 2,278,511 3,818,307 3,329,858 20,000j 17,270,676 0 2,997,934 11,099,526 3,173,217 17,270,677'
District#3 does not have an Alternative B
01 Net Bond Proceeds — Gross Bond Proceeds- Issuance Costs
I I I I I I 1 I I I I I I I I I I
(The Ndla Metropolitan District 41 •
:Alternative A
,Variable Rate Bonds
,Flow of Funds Summary
Residential Platted l Developed Lou General Fund I Debt Service Fund
Total I Total Operation and Debt
• Residential Cumulative Assessed Value @' Platted Cunwlative Assessed Value @ Cumulative Maintenance Net Net Cumulative Service Net Series 2005 Series 2008 Ropey Der Annual Cumulative
Year Units Market Value 7.96%12 yr Lag)• Lots Market Value 29%12 yrl Assessed Value Mill Levy Revenues Expenses Cash Available Mill Levy Revenues Oebt Service Debt Service Advances Cash Availabl Cash Available
2004. i 470 9.137,500 3.500 33,000 33,000 0 36.500 0 0 0'
2005 275 57.378.090 ' 11831 4,400,000 3.500 33,330 33,330 0 36.500 036,935 0 836,93 836.935'.
2006 199 108.777.292 8 5,075,090 2,649,075 2,649,875 3.509 33,663 33,663 101 36.500 515,408 229,540 285,86 1,122.003.
. 2007 193 156,082,077 4,567,2941 11931 2,000,000 1,278,000 5,843,294 3.500 34,000 34.000 101 36.500 637.458 200,633 428,92 1.551,728.
2008 102 105.637,055 8.616,338. 11021 0 1,703,750 10,320,088 3.500 39.191 39.190 DI 36.500 909.772 233.471 756,30 2.308.029
2009 0 185,037,055 12,540.999: 580,000 13,120,999 3.500 49,627 49,827 101 36.500 551,251 222.278 226,734 1,797.385 11,685.14 I 622.883
2010: 190,601,953 15,171,915 0 15,171,915 3.500 57,615 57,615 01 36.500 614.683 206,412 226,612 181,660 1 I 622,003
1 _ 2011'. 190,601,953 15,171,915! 15,171,915 3.500 57,615 57,615 101 36.500 613,981 236,555 236,587 140,839 622.883
2011 194,413,992 15,475.354, 15,475,354 3.500 58,768 58,767 01 36.500 626,211 239,155 233.022 153.235 622,804
2013. 194.413.992 15.475.354. 15,475,354 3.500 58.768 58,768 0I 36.500 626,010 241.560 242,424 142,027 622.884
2014 19B,302.272 15.704,861: 15,784,861 3.500 59,943 59,944 MI 36.500 530.489 243,635 240.452 154,402 I I 622.883.
2015 198,302.272 15.784.8611 15.784,861 3.500 59.943 59.943 101 36.500 630.402 250,505 238.541 149,357 622.884
2016: 202.268,317 10,100,558! 16,100,558 3.500 61,142 56,038 4,303 36.500 651.132 246,921 241,616 162,593 1 1 622,083.
2017' 202,268,317 16,100,558! 10,100,558 3.000 52,407 37,557 19,154, 36.500 550,968 253.362 244,514 153.093 I 1 622.9031
2018'. 206.313.603 18.422,569: 10,422,559 3.000 53,455 37,933 34,676! 36.500 653,884 254,240 247,054 162,592 1 1 622.883.
2019', 206,313.683 16,422,569 16,422,569 3.000 53,455 38,312 49.8201 36.500 663.744 259,915 249,414 154.415 622,883
2020, 210,430.957 18,751,021: 16,751,021 3.000 54,525 38.595 65.6491 36.500 676,930 260,125 251,535 165,278 622.804
2021' 210,439,957 16,751,0211 16,751.021 3.000 54,525 39,082 01,0921 38.500 676,816 260,139 258.459 158,219 1 I 622,803'
2022' 214,648,756 17,086,0411 17,088,041 2.000 37.077 39,473 78,6961 36.500 090,290 264,816 254,821 170.661 622.883
2023. 214,640,756 17,006,041: 17,086,041 2.000 37.077 39,868 75,905 36.500 690,112 259,058 261.213 159,542 1 I 622,883'
2024: 218.941,731 17,427,762: 17,427,762 2.090 37,818 40,266 73,457 36.500 703.887 267,835 262,140 173,913 622,883
2025 218,941.731 17,427,762 17,427,762 2.000 37,818 40,669 70.606 36.500 703,725 271,396 267,866 164,463 622,084. '
2026 223.320,566 17,775,317( 17,776.317 2.000 30,575 .40,076 68,105 36.500 717,802 274.406 203.038 180356 622.084
2027. 223.320,566 17,778.317' 17,776,317 2.000 38,575 41,488 65.193 38.500 717.578 276,977 273.223 167.379 I I 622,084,
2028'. 227,706,977 10,131,843' 10,131,043 2.000 39,346 41.901 62,638 36.500 731,877 279.069 272,716 180,093 1 I 622.083.
2029. 227,706,977 18.131,843; 18,131,843 2.000 39,346 42,320 59,964 36.500 731,686 200.710 281.989 168.988 1 I 622.083
2030: 232.342,717 18,494,480' 18,494,480 2.000 40.133 42,743 57,054 36.500 746,305 201,021 280,483 104,002 622.004
2031' 232,342,717 10.494,400 18,494,480 2.000 40,133 43,171 54.016 36,500 746,149 287,457 283,770 174,914 1 I 622,803
2032, 236.989,571 18,864.3701 18,864,370 2.000 40,936 43,603 51,349( 36.500 761.093 287,409 201,590 192,094 622.803
2033! 236.989.571 10,064,3701 1@884,370 2.000 40,936 44.039 40,246' 38.500 760,082 291,876 209.183 179.813 1 I 622.802
2034'. 241,729,362 19,241,657! 19,241,657 2.000 41,754 44,479 45,5211 36,509 776,075 295.595 286,014 212,021 118,35 I 604.528
2035. 241,729.382 19,241,657! 19,241,657 2.000 41,754 44,924 42,3521 36.500 770.611 582.902 292,615 0 1104,90 I 499.622
2036: 246,563,950 19,626,4901 19,626.490 2.000 42,589 45,373 39,560' 36.500 789,405 0 582,708 200,61 706,239
2037' 246.563,950 19.6264901 19,926,490 2.000 42.589 45,027 36,3311 36.500 792.819 594,311 190,50 904,747
203B, 251.495,229 20,019,020 20,019.020 2.000 42,841 46,285 32,807 35.500 806,178 933,296 1127,11 I 777.629. •
2039 251.495.229 20,019,020. 20,919,020 0.000 0 0 32,887 D.000 0 0 777,629.
2040' 255,525.133 20,419,401 20,419,40II 0.000 32,807 0.000 777,629.
2041. 256.525,133 20,419,401 20,419,401 0.000 32,887 0.000 777,629
2042, 251,655,630 20,827,789 20,627,7891 0.000 32.0071 0.000 777,629.
769 20,827,7891 0 20.027,709 1,584,469 1,551,582 32.887 23,918,570 8,057.688 9,098,812 5,984,442 777,62 777,629
Ill General Fund Net Revenues-Property Tax.Specific Ownership Tax.Developer Advances-County Treasurer Fees
121 General Fund Expense•Operating Eapensee.Repayment of Developer Advances
131 Oebt Service Fund Net Revenues•Property Tax.Specific Ownership Tex.Development Fees.Capitalized Interest.Debt Reserve.Interest Income.County Treasurer Fees
1 I I I I I I I I I I I I I I I I I I
The Hills Metropolitan District 01
Alternative B '
Find Rate Bonds
Flow al Funds Summary •
Residential Platted I Developed Lots I General Fund i Debt Service Fund '
Total ' Total Operation and I Debt '..
Residential Cumulative Assessed Value @I Platted Cumulative Assessed Value @ Cumulative Maintenance Net Net Cumulative j Service Net Series 2005 Series 2008 Annual Cumulative
Year Units Market Value 7.96%12 yr Lagl i Lots Markel Value 29%(2 yr Lag) Assessed Value Min Levy Revenues Expenses Cash Available Mill Levy Revenues Debt Service Debt Service Cash Available Cash Aveilable,.
2004, 470 9,137,500 3.500 33,000 33,000 01 36.500 0 0 0 0 0.
2005 275 57,378,060 11831 4,400.000 3.500 33,330 33,330 0j 36.500 737,129 0 737.129 737,129
2006: 199 106,777,292 8 5,875,000 2.649,875 2,649,575 3.500 33,663 33,683 101 36.500 513,697 227,500 286,197 ,023.326'
2007". 193 156,082,077 4,567,294! (193) 2,000,000 1,276,000 5,843,294 3.500 34,000 34,000 101 36.500 635,388 227.500 407,886 ,431,211
2008'. 102 185,837,055 8,616,338 (1021 0 1,703.750 10,320,080 3.500 39,191 39,190 0l. 36.500 640,044 277,500 362.544 ,793,755
2009: 0 185,837,055 12,540,999 500,000 13,120,999 3.500 49,827 49.827 101 36.500 549,154 254,000 372,000 176,8461 ,716.908.
2010 190,601,953 15,171,915 0 15.171,915 3.500 57,615 57.615 0i 36.500 631,294 221,900 355,950 53.444 ,770,352'
2011:. 190,601,953 15,171,915, 15,171,915 3.500 57,615 57,815 101 36.500 631,004 251,900 395,950 116,8461 ,753,507.
2012: 194,413,992 15,475,354' 15,475,354 3.500 58,768 58,767 0 36.500 542,935 249.800 396,150 15,0151 .748,492:
2013 194,413,992 15,475,354: 15,475,354 3.500 58,768 58,768 0 36.500 642,764 257,700 395.000 19,9361 ,738,556
2014 198,302,272 15,784,881i 15,784.861 3.500 59.943 59,944 (0 36.500 655,079 254,900 396,850 3,329 ,741,885
2015' 198.302.272 15,784,861. 15,784,861 3.500 59,943 59,943 101 36.500 655,072 262,100 393,350 13781 ,741.507.
2015'. 202,260,317 16,100,558'. 16,100,558 3.500 61,142 56.838 4,303 35.500 668,084 258,600 379,850 29,634 .771,141.
2077' 202,269,317 16,100,558 16,100,558 3.000 52,407 37,557 19,154 36.500 668,363 265,100 387,050 16.213 .787,354'
2018 206,313,683 16,422,569. 16,422,569 3.000 53,455 37.933 34,676 36.500 681,670 265,900 383,550 32,220 ,819,574
2019 206,313,683 16,422,569, 16,422,569 3.000 53,455 38,312 49,820i 36.500 682,024 271,350 390.050 20,624 ,840,198
2020 210,439,957 16,751,021: 16,751,021 3.000 54,525 38.695 65,649; 36.500 695,611 271,100 390.850 33,661 .873,859
2021 210,439,957 16,751,021! 18,751,021 3.000 54,525 39,082 81,092: 38.500 695.940 275,500 401,300 19.140 .892,999.
2022 214,648,756 17,086,041. 17,086,041 2.000 37,077 39,473 78,696i 36.500 709.808 279,200 395,700 34,908 ,927,907!
1
2023 214.648,756 17,086,041 17,086,041 2.000 37.077 39,B68 75,905:; 36.500 710,114 282.200 410,100 17,814 ,945,722.
2024: 218,941,731 17,427,762 17,427,762 2.000 37,818 40.266 73,4571 36.500 724,278 279,500 408,100 36,678 .982,400
20251 218,941,731 17.427.762 17.427,762 2.000 37,818 40,669 70,606i 35.500 724,665 286.450 415,750 22,455 .004,864.
2026 223.320,586 17,775,317 17,776.317 2.000 38,575 41.076 68,105! 36.500 739,059 287.350 417,350 34,359 2,039,224'.
2027i 223,320,566 17,776,317, 17,776.317 2.000 38,575 41,488 65,1931 36.500 739,466 292,550 423,250 . 23,688 2,062,890
20281 227,786,977 18,131,843, 18,131.043 2.000 39,346 41,901 62,6381 36.500 754,224 291,700 423.100 39,424 2,102.314:
2029; 227,786,977 18.131.843 18,131,843 2.000 39.346 42,320 59,664; 36.500 754.606 300.150 432.250 22,206 2.124.520,
2030, 232,342,717 16,494,480 18,494,480 2.000 40.133 42,743 57,054: 36.500 769.611 297,200 435,000 37,411 2,161,931.
2031. 232,342,717 18,494,480 18,494,480 2.000 40,133 43,171 54,016: 36.500 770,037 303,550 441,700 24,787 2,756,718
2032: 236,989,571 18,864,370. 18,864,370 2.000 40,936 43,603 51,3491 36.500 785,371 303,500 442,000 39,871 2,226,589,
2033x. 236,989,571 18,854,370. 18,864,370 2.000 40.936 44,039 48.2461 36.500 785.751 312,400 451.250 22.101 1,248.691'
2034' 241,729,362 19,241,657. 19,241,857 2.000 41,754 44,479 45,5211 36.500 801,347 309,550 453,750 38,047 2.286.738'
2035; 241,729,362 19,241,657. 19.241,657 2.000 41,754 44,924 42,352 36.500 907,800 315,650 459.850 26,300 2,313,038.
2036! 246,563,950 19,626,490. 19,626,490 2.000 42.589 45,373 39,568 36.500 817,790 0 774,200 43.590 2,356,627',
2037: 246,563,950 19,626,490 19,626.490 2.000 42,569 45,827 36,331 36.500 918.274 790,100 28,174 2,384,802• .
2038 251,495,229 20,019,020, 20,019,020 0.000 0 0 36.331 36.500 834,555 791,800 42,755 2.427,557,
2039: 251,495,229 20,019,020' 20,019.020 36,331 0.000 0 0 2.427,557
2040; 256,525,133 20,419,401.. 20,419,407 36.331 0 2.427,557
2041,,. 255.525,133 20,419,401! 20,419.401 36,331 0 2,427.557
20421 261,655,635 20,627.789. 20,827,789 36.331 2.427,557.
• 769 20,627.7891 0 20,827,789 1,541,626 1,505,297 36.331 24,065,007 8,233,300 13,405,150 2,427,557 2,427,557,
Ill General Fund Net Revenues-Property Tax+Specific Ownership Tax+Developer Advances.County Treasurer Fees
Ill General Fund Expense-Operating Expenses+Repayment of Developer Advances
131 Debt Service Fund Net Revenues-Property Tax+Specific Ownership Tax+Development Fees+Capitalized Interest+Debt Reserve+Interest Income-County Treasurer Fees
I I I 1 I I I I I I I I I I I ► I I I
'The Hills Metropolitan District#2
Alternative A •
Variable Rate Bands
Flow of Funds Summary
Residential Platted I Developed Lets I General Fund I Debt Service fund
Total i Total Operation and I Debt
Residential Cumulative Assessed Value @ Platted Cumulative Assessed Value @ Cumulative Maintenance Net Net Cumulative I Service Net Strict 2005 Series 2008 Repay Oev Annual Cumulative
Year ' Units Market Value 7.96%12 yr Lagli Lots Market Value 29%12 yr Lag) Assessed Value Mal Levy Revenues Expenses Cash Available Mill Levy Revenues Debt Service Debt Service Advances Cash Available Cash Available.
2004 0 0.000 33,000 33,000 0.000 0 0 0
2005 75 12,874.950 573 9,075,000 0 0 3.500 33,330 33.330 36.500 395,439 396.439 396,439
2006 175 58,241,592 11751 7.575,000 0 0 3.500 33,663 33,663 36.500 253,780 180.413 73,367 469,806
2007 182 110,734,140 1,024,846 11821 3,700,000 2,631,750 3,656.596 3.500 34,000 34,000 38.500 463,409 180.417 282,992 752,798
2008 215 179,187.149 4,709.163 12181 0 2,196,750 6,905.913 3.500 34,340 34,340 36.500 1,038.061 225,399 0 0 812.652 1.555.460
2009 125,132,782 6,867,569 1,073,000 9,960.569 3.500 37,825 37,825 36.500 421,973 178,030 209.895 1,044.234 11,010,1851 555,275
2010 182.608.548 14.535.6401 0 14,535.640 3.500 55.199 55,199 I 36.500 588.171 201.021 214,263 172858 0 555,275.
2011 182,608,546 14.535,540, 14.535,640 3.500 55,199 55,199 I 1 36.500 588.138 204,098 213.067 170,974 , 101 555,275
2012 155,260,719 14,628,353: 14,826,353 3.500 56,303 56,303 1 I 35.500 599,735 206,979 216.916 175,840 0 555.276
2013 186.260.719 14,826,353' 14,826,353 3.500 56,303 56,303 36.500 599,716 204,546 220,416 174.755 101 555,275
2014 189,985,933 15,122,880'. 15,122,880 3.500 57,429 57,430 1 I 36.500 611,562 207,145 223,731 180,687 0 555,276
2015 189,905.933 15,122.5801 15,122,880 3.500 57,429 57.429 I I 36.500 811,554 209,506 221,821 180,228 0 555,276
2016 193,705.652 15,425,338,; 15.425,338 3.500 58,578 58.577 I 38.500 623,849 211,666 224,950 187,032 111 555,275
20171 193.785.652 15,425.3381 15,425,338 3.500 58,578 58,570 36.500 623,655 213.508 222.747 187.401 WI 555,274
2018,, 197.661,365 15,733,845. 15,733,845 3.500 59.749 59,750 I 1 36.500 635,921 215,152 230.572 190,197 0 555.275'
20191 197,681,365 15.733.845 15,733,845 3.500 59,749 59.749 1 I 36.500 635,942 216,555 227,944 191,444 0 555,275
2020: 201,614,592 16,048,522, 15,048,522 3.500 60,944 60,944 I 35.500 648,472 222,747 230,355 195,371 101 555.275
2021! 201.614.592 15,048,522 16,048.522 3.500 60,944 60,944 I 36.500 648.424 223,396 232,424 192,604 0 555.275
20221 205,846,884 16,369,492 16,369,492 3.500 62,163 62,045 11 I 36.500 661,230 223,844 239,294 198,093 101 555.275
•
2029 205,646.884 16,369,492 16.369,492 3.00D 53,283 39,688 13.53 I 36.500 661,202 224.055 240.699 196,449 101 555.275:
2024, 209,759,822 18.696,882. 16.698,582 3.000 54.348 40,266 27,61 36.500 674,286 229.045 241,910 203,331 101 555,275.
2025i 209,759,822 16,596,882. 16,695,982 3.000 54,346 40,689 41.29 36.500 674,280 226.507 242.790 202.992 0 555,275
•
2026: 213,955,018 17,030,819'. 17,030,819 3.000 55,435 41,078 55,65 I 36.500 667.562 232,749 248,465 206,348 101 555,274
2027: 213.955,018 17,030.819 17,030,819 3.000 55,435 41,486 69,60 ! 36.500 687,580 236,513 243.688 207,378 0 555,275
2028! 218,234,118 17,371,436'. 17,371,436 3.000 56,544 41.901 84,24 36.500 701,068 239,823 253.914 207,332 101 555.274
2029, 218,234,118 17,371,436. 17,371,436 3.000 56,544 42,320 98,47 36.500 701,116 237,621 253,367 210,130 WI 555.274.
I 2030', 222,598,801 17,718,655, 17,718.865 2.000 36.450 42,743 94,17 36.500 714.910 245,170 257,509 212,123 1 555,275
20311 222,598,801 17,718.865 17,718,865 2.000 30,450 43.171 89,45 36.500 714,599 242,043 251.373 211,483 0 555.275
20321 227,050,777 18,073.242:. 18,073,242 2.000 39,219 43,603 85,07 36.500 729.092 248.650 259,706 220,726 101 555.275
2033! 227,050,777 18,073,242 18.073,242 2.000 39,219 44,039 80.25 36.500 729.024 249.543 262,719 216,752 0 555,275.
• 2034! 231,591.792 16434,707'. 18,434,707 2.000 40,003 44,479 75,77 1 36.500 743,450 254,951 265,289 223,210 101 555,275
20351 231,591,792 18,434,707! 18,434,707 2.000 90.003 44.924 70.85 35.500 739,229 494,053 267,302 239,994 1262,2001 293,075
2036i 235,223,628 18,803,4011 18,803,401 2.000 40.803 45,373 66,28 36.500 753,663 0 523,363 226.204 4,076 297,151
2037! 236.223.628 18,803,401 18.803,401 2.000 40,003 45.827 61.26 36.500 753,753 522,287 0 231,467 526,618
2038' 240.948.101 19,179,469, 19,179,469 2.000 41,044 46,285 56,02 36.500 767,320 844,447 177,1271 451,491
•
• 20391 240.948,101 19,179,469' 19.179,469 0.000 55,02 1 0.000 0 451.491:
2040', 245.767.063 19,583,058: 19,563,058 56,02 0 451,491
2041; 245.767,063 19,563,058! 19,583,058 58,02 1 0 451,491
2042! 250,682.404 19,954,3191 19,954,319 55,02 0 451.491
648 19,954,319, 0 19,954,319 1,706,860 1,652,638 56.022 22,082,268 6,887,159 8,317,415 6,425.201 451,491 451.491
Ill General Fund Net Revenues-Properly Tax•Specific Ownership Tar+Developer Advances.County Treasurer Fees
121 General Fund Expense-Operating Expenses+Repayment of Developer Advances
131 Debt Service Fund Net Revenues—Property Tex+Specific Ownership Tax+Development Feu+Capitalized Interest+Debt Reserve+Interest Income•County Treasurer Fees
I I I I I I I I I I I I I I I 1 I I 1
'The Hills Metropolitan District P2
Alternative B •
•
I Fixed Rate Bonds
Flow of Funds Summary
r Residential Platted I Developed Lots I General Fund i Debt Service Fund
Total 1 Total Operation and I Debt
Residential Cumulative Assessed Value @' Platted Cumulative Assessed Value @ Cumulative Maintenance Net Net Cumulative 1 Service Net Series 2005 Series 2008 Annual Cumulative '
Year Units Market Value 7.96%12 yr Lagl! Lots Market Value 29%12 yr Lagl Assessed Value Mill Levy Revenues Expenses Cash Available Mill Levy Revenues Debt Service Debt Service Cash Available Cash Available,
Y004 0 0.000 33,000 33,000 0I 0.000 0 0 0.
2005 75 12,874,950 573 9,075,000 0 0 3.500 33,330 33,330 0I 36.500 150,000 150,000 150,000
2006 175 58,241,592 • (1751 7,575,000 0 0 3.500 33,663 33,663 01 36.500 248,215 252,000 13,7851 146,215.
2007 182 110,734,140 1,024,8461 11621 3,700,000 2,631.750 3,656,596 3.500 34,000 34,000 0l 36.500 456,493 252,000 204,493 350.708
2008, 216 179187,149 4,709,163: 12161 0 2,198,750 6,905,913 3.500 34,340 34,340 01 36.500 710,692 327,000 0 383.692 734,401'
2009: 125,132,782 8,887,589' 1,073.000 9,960,569 3.500 37,825 37,825 0] 36.500 403,014 321,750 318,500 1237,2361 497,165:
• 2010; 102,508,548 14,535,640' 0 14,535,640 3.500 55,199 55.199 0; 36.500 583,309 316,500 318,500 151.691) 445,474
2011 182.608.548 14.535,640, 14,535.640 3.500 55,199 55,199 101 36.500 581,534 311,250 373,500 1103,2161 342.259
2012' 186,260,719 14,926,353;. 14,826,353 3.500 56,303 56,303 (01 36.500 592,389 281,000 369,650 138,2611 303.998
2013, 185,260,719 14,826,353' 14,826,353 3.500 56,303 56,303 8, 36.500 591,561 268,900 370,800 146,1391 255,859
2014. 189,985,933 15,122,680: 15,122,880 3.500 57,429 57,430 101 36.500 602.790 266.100 396,600 129,9101 225,949
20151 189,985,933 15,122.880 15,122,880 3.500 57,429 57,429 101 36.500 602,739 273.300 332.400 12.9611 222,988
2016. 193,785,652 15,425,338. 15,425.338 3.500 58,578 58,577 0, 36.500 614,885 274,800 330,300 9,785 232.773
2017: 193,785,652 15,425,338- 15.425,338 3.500 58,578 58,578 0; 35.500 614,811 260,950 336,200 14,3391 228.434'.
2016' 197,661,365 15.733,845. 15,733,845 3.500 59,749 59,750 (01 36.500 627,207 281,400 335,400 10407 238,841
20191 197,681,365 15,733,845 15,733,845 3.500 59,749 59,749 101 36.500 627,174 286.500 342,600 11,9261 236,916.
2020 201,614,592 16,048,522 16,048,522 3.500 60,944 60,944 0' 36.500 639,805 285,900 344,100 9,605 246.721
' 2021 201,614,592 16,048,522 16,048,522 3.500 60,944 60,944 01 36.500 639,798 289,950 350,250 14021 245,319.
2022, 205,546,880 16,369.492 16,369,492 3.500 62,163 62,045 11911 36.500 652,746 288,300 350,700 73.746 260,064.
' 2023; 205,646,884 16,369,492: 16,369,492 3.000 53,283 39,868 13,534: 36.500 652.757 296,300 355,800 657 260,721.
2024' 209,759,822 16,696,882, 16,696.082 3.000 54,348 40,286 27.616: 36.500 665,937 298,250 355,200 12,487 273,208
2025'. 209.759.822 15,696,882. 16,696,882 3.000 54,348 40,869 41,2951 36.500 665,888 299,500 369,250 12,8621 270.346
•
2026'- 213,955,018 17,030,819' 17,030,019 3.000 55,435 41,078 55,655; 36.500 579,326 300,050 366,900 12,376 282.722
•
2027: 213,955,018 17,030,819'' 17,030,819 3.000 55,435 41,486 69.604'!! 36.500 679,330 309,900 369,200 230 282,951
2028; 218,234,118 17,371,436'. 17,371,436 3.000 58,544 41,901 84,247, 36.500 693.05B 306,350 370,800 73,908 295.659'.
2829; 210,234,118 17,371,436, 17,371,436 3.000 56,544 42,320 98,470 35.500 693,062 316,100 376,700 262 297,122.
•
2030: 222,598,801 17,716,865 17,718.865 2.000 38,450 42.743 94,177 35.500 707,046 312,450 301,550 13,046 310,1681
20311 222,598,801 17,718,655 17,718.865 2.000 38,450 43.171 89,456 36.500 707.021 318,100 390,350 114291 308,739.
2032, 227,050,777 18,073.242' 16,073,242 2.000 39,219 43,603 85,072 36.500 721,335 322.350 382750 16,235 324,974:
2033, 227,050777 18,073,242' 18,073,242 2.000 39,219 44,039 00,2531 36.500 721,358 325,200 394800 1,358 326,332'
2034 231,591,792 10,434,7071 18,434,707 2.000 40,003 44,479 75,7771 36.500 735,917 326,650 395,100 14,167 340,499:
•
2035! 231,591,792 18,434,707 18,434,707 2.000 40,003 44,924 70,856; 36.500 735,914 331,700 404,350 (1351 340,363-
2036 236,223,628 18,803.401 18,803.401 2.000 40,603 45,373 66,287: 36.500 750,755 0 736,050 13,905 354,268.
2037: 236,223,628 18,803,401 18.803,401 2.000 40,803 45,827 61.263 36.500 750,771 749,850 921 355,189.
2038. 240,946,101 19,179,4691 19,179,469 2.000 41,044 46,285 56,022 36.500 765.955 749,000 16.955 372.144
1 2039 240,948,101 19,179,469. 19,179,489 0.000 56,022 0.000 0 372.(44.
I 2040, 245,767,063 19,563,058. 19,563,058 56.022 0 372,144
i 2041 245.767.063 19,553,058' 19,563.058 56,022 0 372.144
2042. 250,682,404 19,954,319. 19,954,319 56,0221 0 372,144
648 19,954,319. 0 19,954,319 1,708,660 1,652.638 56,022 21,264,594 0,902,500 11,989,950 372,144 372,144
(II General Fund Nei Revenues-Property Tax+Specific Ownership Tax+Developer Advances•County Treasurer Fees
121 General Fund Expense-Operating Expenses+Repayment of Developer Advances
131 Debt Service Fund Net Revenues-Property Tax+Specific Ownership Tax+Development Fees+Capitalized Inleresl+Debt Reserve+Interest Income-County Treasurer Fees
I 3 I I I I I I I I I 1 I I I I I I 1
I The Halt Metropolitan District Y3 I
(Alternative A
;Variable Rate Bands •
'',Flow of Funds Summary I
• _ i Commercial l Platted I Developed Land 1 I General Fund i Debt Service Fund
Total i Total Operation and 1 Debt
, ' Square Cumulative Assessed Value @ Platted Cumulative Assessed Value @ Cumulative Maintenance Net Net Cumulative Service Net Series 2005 Series 2009 Repay Dev Annual Cumulative
Year 1 Feet Martel Value 29%12 yr Lag; Square Feet Musket Value 29%12 yr basil Assessed Value Mill Levy Revenues Expenses Cash Available Mill Levy Revenues Debt Service Debt Service Advances Cash Available Cash Available'
• 2004„ 0.000 20,000 20.000 Oi 0.000 0 0 0'
• zoos! 0 0 0 6 3.000 20,000 20,000 0. 37.000 0 0 0
2006'. 0 0 0 0 3.000 20,000 20,000 0; 37.000 780,101 0 780,101 780.101.
2007. 246,223 2,462,230 0 0 3.000 20,000 20,000 01 37.000 10,443 183,370 1172,9271 607,174
20081 246,223 4,924,490 0 0 3.000 30,000 30000 0 37.000 7,475 183,472 0 0 1176,0571 431.117
20091 714,047 714.047 3.000 30,300 30300 0 37.000 1,382,168 183,374 0 0 1.198,794 1,629.911.
•
2010; 265.163 30,458.894 1265,1831 1,442,374 1,442,374 3.000 30,603 30,603 01 37.000 J43,795 183,374 319,975 0 1159,5531 1,470,358.
2011', 227,283 29,629,926 1227,2831 1,442.374 1,442,374 3.000 30,009 30,909 01 37.000 303,123 193,374 319,981 0 12002321 1,270,126
2012, 32.880,442 0933,079 702,249 9,535,328 3.000 31,218 31,218 01 37.000 403,776 165.406 298.546 0 150.2551 1.219.971'
20131 57.237.438 16,598,857 0 16,598,857 3.000 64,029 54,029 01 37.000 689.856 210,325 333,347 0 146,184 1,366,055
•
2014: 58.382.187 10930,934 16,930,834 3.000 55,110 55,111 101 37.000 705,613 218,150 346,159 763.126 1621,9221 744,234:
2015: 58,382.187 16.930.934 16,930034 3.000 55,110. 55.109 131 37.000 694,653 220,510 348,281 125,862 1 744,234'
201611 59,54&831 17,269.451 17,269,451 3.000 56.212 56.213 101 37.000 708,325 222,678 355,233 130,415 101 744,2341
20171 59,549,831 17,269,451: 17,269.451 3.000 56,212 59,212 01 37.000 700357 224,513 351,587 132.279 0 744,234'
20181 60,740,827 17,614,840 17,614,840 3.000 57,336 57,337 101 37.000 722.239 231,144 357,959 133,135 Ill 744,234
2019, 60740,827 17,514,940 17,614,840 3.000 57.338 57,336 01 37.000 722.208 227,322 358,885 138,081 1 744,234
20201 61.955,644 17,967,137 17,967,137 3.000 58,483 50404 101 37.000 736,470 233,518 364,640 138,313 (II 744,234
2021' 61,955,644 17,967,137 17,967,137 3.000 58,483 58,483 101 37.000 736.456 234,162 364,770 137,524 1 744.234..
2022'. 63.194,757 10.326.480 18,320480 3.000 59.653 59,652 01 37.000 750,952 239.598 369,729 141,626 101 744,234,
2023 63.194.757 10325.48D; 18,326.490 3.000 59.653 59.653 101 37000 750,975 239,570 374.210 137,099 101 744,234:
2024 64,458,652 18,663,0091 18,693,009 3.000 60.946 60.845 0' 37.000 765,692 244,327 378.286 143.079 0 744234,
•
2025 84.458.652 18,693,009 19.693,009 3.000 60,846 60,846 10 37.000 765,732 243,543 376.751 145,438 0 744234•
2028 65,747,825 19,066,869 19,066,869 3.000 62.063 62,062 0I 37.000 780,789 247,547 385,025 148,218 101 744,234,
2027 65.747,925 19.066.869 19,068,969 3.000 62,063 62.062 0 37.000 780,769 246.094 387.594 147,092 101 744.234
2029 67,062,7112 19,448,207 19,448,207 3.000 63,304 93,305 (DI 37.000 796,076 249,400 399,726 148,951 101 744234.
2029 67.092,762 19,449,207 19,440207 3.000 63,304 63.304 101 37.000 796.096 252,179 395.811 148,106 1 744.234
2030 68,404,037 19,937,171! 18,837,171 3.000 64.870 64,569 0) 37.000 811,753 254.510 406,693 150,560 IDl 744.234.
' 2037 68,404.037 19,837.171! 19,937,171 3.000 64,570 64,570 5j 37.600 811.809 256,363 401,638 153,808 0 744.234'
2032 69,773.118 20.233,914' 20,232.914 3.000 65,861 65.862 101 37.000 827,733 262.745 411.369 153,619 0 744.234'
2033 69.772,118 20,233.914 20,233,914 3.000 65,861 65,061 0'1 37.000 827,744 263,386 410,063 154,296 101 744.234
' 2034 71,167,560 20.638.563 20,638,593 3.000 67,179 67,179 0; 37.000 844,040 268.554 418,309 157,178 101 744.234
2035 71.167,560 20.938,593 20,638.593 3.000 67,179 67.178 0:i 37.000 844.096 269,019 415,623 160.454 1 744.234
• 2036 72.590,612 21,051,364 21,051,364 3.000 68.522 68.523 (Of 37.000 656,054 541,324 . 422.473 159,975 1267,6171 476,617.
20371 72,590,912 21,051,364 21,051,364 3.000 68,522 68.522 Ol 37.000 856,203 0 687,640 168.563 0 476,617:
2038,. 74.042.730 21,472,392 21.472,392 3.000 58,926 64,541 4.3851 37.000 873,097 705.058 166.039 0 476,617'.
• 2039' 74,042,730 21.472.392, 21,472.392 3.000 68,926 40,840 32,471 37.000 864,712 1,194,162 0 1319,4501 157,166
• 2040 75,523,584 21,901,839 21.901,839 0.000 32,471 0.000 0 0 157,168
' 20411 75.523,584 21,901,839 21,901,939 32,4711 0 157,168'
•
20421 77,034,056 22,339,876 22,339,876 32,4711 0 157,168.
492,446 22,339,976; 0 22,339,876 1,903,190 1,870,718 32,471 24.259,299 7.181.913 12,639.486 4.280.733 057,168 157,168.
Ill General Fund Net Revenues-Property Tax.Specific Ownership Tax+Developer Advances-County Treasurer Fees .
Ill General Fund Expense-Operating Expenses.Repayment of Developer Advances
Is)Debt Service Fund Net Revenues-Properly Tax.Specific Ownership Tax.Development Fees.Capitalized Interest+Debt Reserve+Interest Income.County Treasurer Fees
I
The Hills Metropolitan District#2
Forecasted Statement of Sources
and Uses of Cash
For the Years Ending
December 31,2004 through 2042
J. W. Simmons &Associates, P. C. Certified Public Accountants
To the Petitioners of the Proposed
Hills Metropolitan District#2
Firestone, Colorado
We have compiled the accompanying forecasted statements of sources and uses of cash of the proposed Hills Metropolitan District
#2 (Exhibit I), the related projected debt service schedules (Exhibits II to IV) and the analysis of absorption and assessed values
(Exhibit V) for the years ending December 31, 2004 through 2042, in accordance with 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 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 statements or assumptions. 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.
.— a VV Simmons E. 144Jociate3, PC,.
October 4, 2004
9155 East Nichols Avenue.,Suite 330,Centennial,Colorado 80112-3443
Telephone(303)689-0833 Fax(303)689-0834
The Hills Metropolitan District#2
Summary of Significant Assumptions and Accounting Policies
December 31, 2004 through 2042
The accompanying forecast presents,to the hest of the Developer's knowledge and belief,the expected cash receipts
and disbursements for the forecast period. Accordingly, the forecast reflects its judgment as of October 4, 2004.
The assumptions disclosed herein are those that management believes are significant to the forecast. 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 he material.
The purpose of this forecast is to show the amount of funds available for the future construction of infrastructure
within the Districts by the issuance of general obligation bonds and subordinate developer advances and the
anticipated funds available for repayment of the bonds and advances.
The forecast is presented with two alternatives. Those Exhibits indicated by Alternative A, assume the issuance of
_ general obligation variable rate debt secured by an irrevocable bank letter of credit. Alternative B assumes general
obligation fixed rate bonds will be issued.
Note 1: Ad Valorem Taxes
The primary source of revenue for the District will be the collection of ad valorem taxes. Residential property
is forecasted to be assessed at 7.96% of market values. Market values for 648 residential homes are
estimated to range from $165,000 to S350,000 as of 2003. Finished lots are forecasted at$25,000 per
lot and platted lots are forecasted at S12,500. Market values are forecasted to inflate at 2%per year. All
property is assumed to inflate at 2% biennially commencing in 2008. Exhibits V-A and V-B detail the
forecasted absorption,market values and related assessed values.
Property is assumed to be assessed annually as of January 1st. Property included in this forecast is assumed
to be assessed on the January 1"subsequent to completion. The forecast recognizes the related property
taxes as revenue in the subsequent year.
The County Treasurer currently charges a 1.5%fee for the collection of property taxes. These charges are
reflected in the accompanying forecast as tax collection fees.
The forecast assumes that Specific Ownership Taxes collected on motor vehicle registrations will be 10%
of property taxes collected.
The mill levy imposed by the District is proposed to equal 3.500 mills (decreasing in later years) for
operations and 36.500 mills for debt service for a total mill levy of 40.000 mills(adjusted for changes in the
ratio of assessed values to market values).
The Hills Metropolitan District#2
— Summary of Significant Assumptions and Accounting Policies
December 31,2004 through 2042
Note 2: Interest Income
Interest income is assumed to be earned at 3.0%per annum. Interest income is based on the year's beginning
cash balance and an estimate of the timing of the receipt of revenues and the outflow of disbursements
— during the course of the year.
Note 3: Bond Assumptions
Alternative A
The District proposes the issuance of variable rate general obligation bonds totaling S7,150,000 in 2005 and
2008.The bonds will have a maturity of 30 years from the date of issuance. Both series are proposed to
— carry a coupon rate of 4.0% with letter of credit fee of 1%declining to.5%when the ratio of outstanding
debt to the assessed valuation of the District is 40%or less and an annual re-marketing fee of.25%. Exhibits
II-A and III-A reflect the proposed repayment schedule of these bonds. The Bonds are anticipated to be
secured by a limited mill levy not to exceed 50.000 mills(adjusted for changes in the ratio of assessed values
to market values). The following table reflects the proposed sources and uses of funds for each bond issue.
Series 2005 Series 2008
Sources:
Bond Proceeds S3,250,000 S3,900,000
Uses:
Issuance costs 156,322 177,586
— Reserve Fund 242,200 313,075
Capitalized expenses
Available for improvements 2,851,478 3,409,339
or developer advances
S3,250,000 S3,900,000
The District also intends to issue S3,889,660 of subordinate developer owned bonds or loans from 2004
_ through 2006. The proceeds will be available to fund District improvements. The bonds or loans carry an
estimated coupon rate of 8%(the actual rate will be the indexed rate permitted by the Service Plan)for 30
years and it is forecasted that the District will repay the bonds or loans from the proceeds of the above
described Series 2008 bonds,reimbursements from other Districts and other available revenues not required
for the Series 2005 and Series 2008 bonds. Exhibit IV-A reflects the forecasted repayment of the principal
and interest on the subordinate bonds or loans.
The Hills Metropolitan District#2
Summary of Significant Assumptions and Accounting Policies
December 31,2004 through 2042
Note 3: Bond Assumptions(continued(
Alternative B
The District proposes the issuance of general obligation bonds totaling $8,150,000 in 2005 and
2008. The bonds will have a maturity of 30 years from the date of issuance. Both series are
proposed to carry a coupon rate of 7.0%. Exhibits II-B and III-B reflect the proposed repayment
schedule of these bonds. The Bonds are anticipated to be secured by a limited mill levy not to
exceed 50.000 mills(adjusted for changes in the ratio of assessed values to market values). The
following table reflects the proposed sources and uses of funds for each bond issue.
Series 2005 Series 2008
Sources:
Bond Proceeds $3,600,000 $4,550,000
Uses:
_ Issuance costs 144,000 182,000
Capitalized interest
Available for improvements 3,456,000 4,368,000
or developer advances
$3,600,000 $4,550,000
The District also intends to issue $2,278,511 of subordinate developer owned bonds or loans from 2004
through 2006. The proceeds will be available to fund District improvements. The bonds or loans carry an
estimated coupon rate of 8% (the actual rate will be the indexed rate permitted by the Service Plan)for 30
years and it is forecasted that the District will repay the bonds or loans from a portion of the proceeds of the
above described Series 2005 and Series 2008 bonds. Exhibit IV-B reflects the forecasted repayment of the
principal and interest on the subordinate bonds or loans.
Note 4: Development Fees
The District anticipates imposing a development fee of $2,000 on each single family equivalent. The multi-
- family units will pay 50%of the fee(S1,000). The forecast estimates that$1,143,000 of development fees
will be collected from 2005 through 2008. It is anticipated that the development fees will be restricted for
the payment of principal and interest on the bonds.
The Hills Metropolitan District#2
Summary of Significant Assumptions and Accounting Policies
December 31,2004 through 2042
Note 5: District Improvements
Construction costs for district improvements are forecasted to total S11,099,525 and are forecasted to he
paid from 2004 through 2008.The District will seek reimbursement of 30%of such costs from other districts
which benefit from the improvements as follows:
The Hills Metropolitan District#3-30% or S3,329,858 in 2006
In addition, the District is forecasted to pay 15% of the cost of regional improvements incurred by other
districts as follows:
The Hills Metropolitan District#1 - 15% or $3,173,217 in 2005
A portion of the construction costs are forecasted not to be supported by bonds or developer advances.
These amounts are $2,804,306 under Alternative A and $3,818,307 under Alternative B. It is forecasted
that these amounts will be contributed to the Districts by the developer.
Note 6: Operating and Administrative Expenses
_ Administrative expenses for legal,accounting,audit,management and insurance are forecasted at$33,000
per year. Inflation is provided for operating and administrative expenses at 1%per year commencing in 2005.
Operating expenses incurred prior to the collection of ad-valorem taxes are expected to be funded by
developer advances totaling $128,222. The forecast reflects that $277,849 will be available for the
repayment of advances commencing in 2009 through 2022. Developer advances are assumed to accrue
interest at 8% per annum. Any amounts not repaid within 30 years shall be discharged.
ra
ALTERNATIVE A
Variable Rate Financing
1
} 1 1 I I I I I I } I I I I I I ) I I
The Hills Metropolitan Distriet#2
Forecasted Sources end Uses of Cash
For the Years Ended December 31,2004 through 2042
Totals 2004 2005 2405 2002 2005 200.9 2010 2011 2012 Z9
L. General Fund
Beginning cash available 0 0 0 0 0 0 0 0 0 (01 101
• Revenues
Property taxes 1,457,155 0 0 0 12,798 24,171 34,862 50,875 50,875 51,892 51,892
Specific ownership taxes 145,716 0 0 0 1,280 2,417 3,486 5,087 5,087 5,189 5,189
Developer advances 128,222 33,000 33,330 33,663 20,114 8,115
1,731,093 33,000 33,330 33,663 34,192 34,703 38,348 55,962 55,962 57,081 57,081
Expenditures
County treasurer fees 22,433 0 0 0 192 363 523 763 763 778 778
Repay developer advances 277,849 0 3,142 20,169 19,819 20,569 20,211
Operating expenses 1,374,789 33,000 33,330 33,663 34,000 34,340 34,683 35,030 35,380 35,734 36,092
1,675,071 33,000 33,330 33,663 34,192 34,702 38,348 55,962 55,963 57,082 57,081
Ending cash available 56,022 0 0 0 0 0 0 0 101 101 0
Mill levy 0.000 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500
Capital Pro ects Fund
Beginning cash available 0 0 0 0 0 0 0 0 0 0 0
Revenues
Bond proceeds 7,150,000 3,250,000 3,900,000
Reimbursement from other Districts 3,329,858 3,329,858
Developer advances 3,889,660 1,387,441 311,739 2,190,480
Developer contribution 2,804,306 1,418,865 1,387,441
Interest Income 10,000 0 10,000
17,183,824 1,387,441 3,571,739 6,937,203 1,387,441 3,900,000 0 0 0 0 0
Expenditures
Issuance costs 333,908 0 156,322 0 0 177,586 0
Transfer to Debt Service Fund 555,275 0 242,200 313,075
Reimbursement to other Districts 3,173,217 3,173,217
Repay developer advances 2,021,899 2,021,899
District improvements 11,099,525 1,387,441 0 6,937,203 1,387,441 1,387,440
17,183,824 1,387,441 3,571,739 6,937,203 1,387,441 3,900,000 0 0 0 0 0
Ending cash available 0 0 0 0 0 0 0 0 0 0 0
Exhibit I-f1
1
I
) ) I I 1 I t ! ! I Y f, I t I
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
1 For the Years Ended December 31,2004 through 2042
Lets 2494 293. 2006 202 244@ ZQR 2914 2011 2O2 2012
Debt Service Fund
Beginning cash available 0 0 0 396,439 489,806 752,798 1,565,460 555,275 555,275 555,275 555,276
Revenues
Property taxes 18,399,117 0 0 0 133,466 252,086 363,561 530,551 530,551 541,162 541,162
Specific ownership taxes 1,839,912 0 0 0 13,347 25,207 36,356 53,055 53,055 54,116 54,116
Development fees 1,143,000 0 150,000 250,000 311,000 432,000 0 0 0 0 0
Transfer from Capital Project Fund 555,275 0 242,200 0 313,075
Interest income 420,949 0 4,239 3,780 7,598 19,494 27,510 12,524 12,491 12,574 12,556
22,356,253 0 396,439 253,780 465,411 1,041,842 427,427 596,130 596,097 607,853 607,834
Expenditures
Debt service'GO Debt Series 2005 6,887.159 0 180,413 180,417 225,399 178.030 201,021 204,098 206,979 204,546
Debt service-G0 Debt Series 2008 8,317,415 0 209,895 214,263 213,067 216,916 220,416
, Repay developer advances 6,426,201 1,044,234 172,888 170,974 175,840 174,755
County treasurer fees 275,987 0 0 0 2,002 3,781 5,453 7,958 7,958 8,117 8,117
21,906,761 0 0 180,413 182,419 229,179 1,437,812 596,129 596,097 607,852 607,834
Ending cash available 451,491 0 396,439 469,806 752,798 1,565,460 555,275 555,275 555,275 555,276 555,275
Mill levy 0.000 36.500 36.500 36.500 36.500 36.500 36.500 36.500 36.500 36.500
Total Mill Levy 0.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000
Assessed valuation 1000's)
Beginning 0 0 0 0 0 3,657 6,906 9,961 14,536 14,536 14,826
New construction 14,263 0 0 3,657 3,176 3,055 4,376 0 0 0
Inflation 11.0%per annum) 5,691 73 199 291
Ending 19,954 0 0 0 3M57 6,906 9,961 14,536 14,536 14,826 14,826
Exhibit FA
I 1 I I 7, I !: l I 1 ! I ) I t !
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
Far the Years Ended December 31,2004 throe,h 2042
2014 201@ 20115 2012 2018 2019 702Q 2021 2_022 2023 2024 2025
General Fund
Beginning cash available 0 (0) (Dl 0 0 (01 (0) 0 0 119 13,534 27,616
Revenues
Property taxes 52,930 52,930 53,989 53,989 55,068 55,068 58,170 56,170 57,293 49,108 50,091 50,091
Specific ownership taxes 5,293 5,293 5,399 5,399 5,507 5,507 5,617 5,617 5,729 4,911 5,009 5,009
Developer advances
58,223 58,223 59,388 59,388 60,575 60,575 61,787 61,787 63,023 54,019 55,100 55,100
Expenditures
County treasurer fees 794 794 810 810 826 826 843 843 859 737 751 751
Repay developer advances 20,977 20,612 21,392 21,021 21,817 21,437 22,249 21,862 22,572
Operating expenses 36,453 36,817 37,185 37,557 37,933 38,312 38,695 39,082 39,473 39,868 40,266 40,669
58,223 58,223 59,387 59,388 60,576 60,575 61,787 61,707 62,904 40,604 41,018 41,420
Ending cash available (0) J01. 0 0 (0) (0) 0 0 119 13,534 27 616 _ 41 295
Mill levy 3.500 3.500 3.54 3.500 3.500 3.500 3.500 3.500 500 3.000 3.000 3.000
L Capitol Projects Fund y
Beginning cash available 0 0 0 0 0 0 0 0 0 0 0 0
Revenues
Bond proceeds
Reimbursement from other Districts
Developer edvances
Developer contribution
Interest Income
0 0 0 D 0 0 0 D 0 0 0 0
Expenditures
Issuance costs
Transfer to Debt Service Fund
Reimbursement to other Districts
Repay developer advances
District improvements
0 0 0 0 0 0 0 D 0 D 0 0
Ending cash available 0 0 0 0 0 0 0 0 __0 0 0 0
Exhibit I-A
1
1 ) 1 I J 1 1 1 1 1 ) I I 1 1 D 1 1
•
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Years Ended December 31,2004 through 2042
29_13 2015 L MI 2018 1418 Z4Z0 2021 2,(M ;073 aal 2CM
Debt Service Fund
Beginning cash available 555,275 555,276 555,276 555,275 555,274 555,275 555,275 555,275 555,275 555,275 555,275 555,275
Revenues
Property taxes 551,985 551,985 563,025 563,025 574,285 574,285 585,771 585,771 597,486 597,486 609,436 609,436
Specific ownership taxes 55,199 55,199 56,302 56.302 57,429 57,429 58,577 58,577 59,749 59,749 60,944 60,944
Development fees
Transfer from Capital Project Fund
Interest income 12,658 12,650 12,767 12,773 12,821 12,843 12,910 12,863 12,957 12,929 13,047 13,041
619,841 619,834 632,094 632,101 644,535 644,557 657,259 657,211 670,192 670,164 683,427 683,421
Expenditures
Debt service-GO Debt Series 2005 207,145 209,506 211,668 213,508 215,152 216,555 222,747 223,396 223,844 224,055 229,045 228,507
Debt service GO Debt Series 2008 223,731 221,821 224,950 222,747 230,572 227,944 230,355 232,424 239,294 240,699 241,910 242,790
Repay developer advances 160,687 180,228 187,032 187,401 190,197 191,444 195,371 182,604 198,093 196,449 203,331 202,982
County treasurer fees 8,280 8,280 8,445 8,445 8,614 8,614 8,787 8,787 8,962 8,962 9,142 9,142
619,841 619,833 632,095 632,101 644,535 844,556 657,259 657,211 670,192 670,164 683,428 683,421
Ending cash available 555,276 555,276 555,275 555,274 555,275 555,275 555,275 555,275 555,275 555,275 555,275 555,275
Mill levy 36.500 36.500 36.500 36.500 36.500 36.500 36.500 36.500 36.500 36.50D 36.500 36.500
Total Mill Levy 40.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000 39.500 39.500 39.500
Assessed valuation 1000'sl
Beginning 14,826 15,123 15,123 15,425 15,425 15,734 15,734 16,049 16,049 16,369 16,369 16,697
New construction 0 0
Inflation(1.0%per annum) 297 302 309 315 321 327
Ending 15,123 15,123 15,425 15,425 15,734 15,734 16,049 16,049 16,369 16,369 16,697 16,697
Exhibit I-A
1 It L ‘ I I I I 1 1 I I I 1 L 1•
I I
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Years Ended December 31,2004 through 2042
2026 2,222 21121 2626 21114 2031 21182 211a 1234 21115 2036 2031
LGeneral Fund
Beginning cash available 41,295 55,655 69,604 84,247 98,470 94,177 89,456 85,072 80,253 75,777 70,856 66,287
Revenues
Property taxes 51,092 51,092 52,114 52,114 35,43B 35,438 36,146 36,146 36,869 36,869 37,607 37,607
Specific ownership taxes 5,109 5,109 5,211 5,211 3,544 3,544 3,615 3,615 3,687 3,687 3,761 3,761
Developer advances
56,202 58,202 57,326 57,326 38,982 38,982 39,761 39,761 40,556 40,556 41,367 41,367
Expenditures
County treasurer fees 766 766 782 782 532 532 542 542 553 553 564 564
Repay developer advances
Operating expenses 41,076 41,486 41,901 42,320 42,743 43,171 43,603 44,039 44,479 44,924 45,373 45,827
41,842 42,253 42,683 43,102 43,275 43,702 44,145 44,581 45,032 45,477 45,937 46,391
Ending cash available 55,655 69,604 84,247 98,47D 94,177 89,456 85,072 80,253 75,777 70,856 66,287 61,263
Mill levy 3.000 3.000 3.000 3.000 2.000 2.000 2.000 2.000 2.000 2.000 2.000 2.000
I, Capital Projects Fund
Beginning cash available 0 0 0 0 0 0 0 0 0 0 0 0
Revenues
Bond proceeds
Reimbursement from other Districts
Developer advances
Developer contribution
Interest Income
0 0 o o o D D o 0 D 0 D
Expenditures
Issuance costs
Transfer to Debt Service Fund
Reimbursement to other Districts
Repay developer advances
District improvements
0 0 0 0 0 0 0 0 0 0 0 0
Ending cash available 0 0 0 0 0 0 0 0 0 0 0 0
Exhibit FA
1 t I I I ) ) I I 1 ' i I t '► t I
The Hills Metropolitan District#2
Forecasted Sources end Uses of Cash
For the Years Ended December 31,2004 th rough 2042
2424 7027 242@ 2424 24.3.4 2211 2432 203;2 2034 2430 243& 201
Debt Service Fund
Beginning cash available 555,275 555,274 555,275 555,274 555,274 555,275 555,275 555,275 555,275 555,275 293,075 297,151
Revenues
Property taxes 621,625 621,625 634,057 634,057 646,739 646,739 659,873 659,673 672,867 672,867 686.324 686,324
Specific ownership taxes 62,162 62,162 63,406 63,406 64,674 64,674 65,967 65,967 67,287 67,287 68,632 68,632
Development fees
Transfer from Capital Project Fund
Interest income 13,099 13,117 13,118 13,164 13,198 13,187 13,348 13,278 13,389 9,168 9,001 9,092
696,887 696,904 710,579 710,627 724,611 724,600 738,987 738,919 753,543 749,322 763,958 764,048
Expenditures
Debt service-GO Debt Series 2005 232,749 236,513 239,823 237,621 245,178 242,043 248,660 249,543 254,951 494,053
Debt service-GO Debt Series 2008 248,465 243,688 253,914 253,367 257,609 261,373 259,706 262,719 265,289 267,382 523,383 522,287
Repay developer advances 206,348 207,376 207,332 210,130 212,123 211,483 220,726 216,762 223,210 239,994 226,204
County treasurer fees 9,324 9,324 9,511 9.511 9,701 9,701 9,895 9,895 10,093 10,093 10,295 10,295
696,887 696,904 710,580 710,628 724,610 724,600 738,987 738,919 753,543 1,011,522 759,881 532,581
Ending cash available 555,274 555,275 555,274 555,274 555,275 555,275 555,275 555,275 555,275 293,075 297,151 528,618
Mill levy 36.500 38.500 36.500 36.500 36.500 36.500 36.500 36.500 36.500 36.500 36.500 36.500
Total Mill Levy 39.500 39.500 39.500 39.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500
Assessed valuation l000'sl
Beginning 16,697 17,031 17,031 17,371 17,371 17,719 17,719 18,073 18,073 18,435 10,435 18,803
New construction 0 0 0 0 0 0 0 0 0
Inflation 11.0%per annum) 334 341 347 354 361 369
Ending 17,031 17,031 17,371 17,371 17,719 17,719 18,073 18,073 18,435 18,435 18,803 18,803
Exhibit 4A
I I I I I I I I I I I I 1 I r, I I; I I
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Years Ended December 31,2004 through 2042
2038 24.34 L 2i 204Z
General Fund II
Beginning cash available 61,263 56,022 56,022 56,022 56,022
Revenues
Property taxes 38,359 0 0 0 0
Specific ownership taxes 3,838 0 0 0 0
Developer advances
42,195 0 0 0 0
Expenditures
County treasurer fees 1,151 0 0 0 0
Repay developer advances
Operating expenses 48,285
47,436 0 0 0 0
Ending cash available 56.022 56,022 56,022 56,022 56,022
Mill levy 2.000 0.000 0.000 0.000 0.000
CapitalPro'ects Fund
Beginning cash available 0 0 0 0 0
Revenues
Bond proceeds
Reimbursement from other Districts
Developer advances
Developer Contribution
Interest Income
0 0 0 0 0
Expenditures
Issuance costs
Transfer to Debt Service Fund
Reimbursement to other Districts
Repay developer advances
District improvements
0 0 0 0 0
Ending cash available 0 0 0 0 0
Exhibit I-A
i
I I I I I I I t 1 1 I I le ! I ! I I
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Years Ended December 31,2004 through 2042
2131 203,4 2440 2041 2042
Debt Service Fund
Beginning cash available 528,618 451,491 451,491 451,491 451,491
Revenues
Property taxes 700,051 0 0 0
Specific ownership taxes 70,005 0 0 0
Development fees
Transfer from Capital Project Fund
Interest income 7,765
777,821 0 0 0 0
Expenditures
Debt service-GO Debt Series 2005
Debt service-GO Debt Series 2008 844,447
Repay developer advances
County treasurer fees 10,501
854,948 0 0 0 0
Ending cash available 451,491 451,491 451,491 451,491 451 491
Mill levy 36.500
Total Mill Levy 38.500 0.000 0.000 0.000 0.000
Assessed valuation 1000'sl
Beginning 18,803 19,179 19,179 19,563 19,563
New construction 0 0 0 0 0
Inflation 11.0%per annum) 376 384 391
Ending 19,179 19,179 19,563 19,563 19,954
Exhibit I-A
The Hills Metropolitan District#2
-
Schedule of General Obligation Debt-Series 2005
For the Years Ended December 31,2005 to 2035
Letter of Credit Remarketing Rating& Annual Balance
liar Princioel Comm interest Ems fees Trustee Fees IS 3,250,000
2005 4.00% 3,250000
2006 65,000 17,095 3,250,000
2006 4.00% 65,000 17,193 8,125 8,000 180,413 3,250,000
2007 65,000 17,099 3,250,000
2007 4.00% 65,000 17,193 8,125 8,000 180,417 3,250,000
2008 65,000 17,193 3,250.000
2008 45,000 4.00% 65,000 17,193 8,013 8000 225,399 3,205,000
2009 64,100 16,862 3,205,000
2009 0 4.00% 64,100 16,955 8,013 8,000 178,030 3,205,000
2010 64,100 8,431 3,205000
2010 40,000 4.00% 84,100 8,477 7,913 8,000 201,021 3,165,000
2011 63.300 8,326 3,165,000
2011 45,000 4.00% 63,300 8,372 7,800 8,000 204,098 3,120,000
2012 62.400 8.252 3,120,000
2012 50,000 4.00% 62,400 8,252 7,675 8,000 206,979 3,070000
__ 2013 61,400 8,076 3,070,000
2013 50,000 4.00% 61,400 8,120 7,550 8,000 204,546 3,020,000
2014 60,400 7,944 3,020,000
2014 55,000 4.00% 60,400 7,988 7,413 8,000 207,145 2.965,000
2015 59,300 7,800 2,965,000
-- 2015 60,000 4.00% 59,300 7,843 7,263 8,000 209,506 2,905,000
2016 58,100 7,604 2,905,000
2016 65,000 4.00% 58,100 7,684 7.100 8,000 211,668 2,840,000
2017 56.800 7,471 2,840,000
2017 70,000 4.00% 56,800 7,512 6.925 8,000 213,508 2,770,000
2018 55,400 7,287 2,770,000
2018 75,000 4.00% 55,400 7,327 6,738 8,000 215,152 2,695,000
2019 53,900 7,089 2,695,000
2019 80,000 4.00% 53,900 7,128 6,538 8,000 216,555 2,615,000
2020 52,300 6,917 2,615,000
2020 90,000 4.00% 52,300 6,917 6,313 8,000 222,747 2.525,000 •
---
2021 50,500 6,642 2,525,000
2021 95,000 4.00% 50,500 6,679 6,075 8,000 223,396 2.430,000
2022 48,600 6,392 2,430,000
2022 100,000 4.00% 48,600 6,427 5,825 8,000 223,844 2,330.000
2023 46,500 6,129 2330,000
` 2023 105,000 4.00% 46,600 6,163 5.563 8,000 224,055 2,225,000
2024 44.500 5,885 2,225,000
2024 115,000 4.00% 44,500 5,885 5,275 8,000 229,045 ,110,000
2025 42,200 5,551 ,110,000
2025 120,000 4.00% 42.200 5,581 4.975 8,000 228,507 ,990,000
2026 39,800 5.135 090,000
2026 130,000 4.00% 39,800 5,264 4,650 8,000 232,749 ,060,000
2027 37,200 4,893 ,860,000
2027 140,000 4.00% 37,200 4,920 4,300 8,000 236.513 ,720,000
2028 34,400 4,549 .720,000
-- 2028 150,000 4.00% 34,400 4,549 3,925 8,000 239,823 .570,000
2029 31,400 4,130 ,570,000
2029 155,000 4.00% 31,400 9,153 3,538 8000 237,621 .415,000
2030 28.300 3,722 ,415,000
2030 170,000 4.00% 28,300 3,743 3,113 8,000 295,178 .245,000
2031 14.900 3,275 ,245,000
2031 175,000 4.00% 24,900 3,293 2.675 8,000 242,043 .070,000
2032 21,400 2,830 070,000
2032 190,000 4.00% 21,400 2.830 2,200 0,000 248,660 880,000
2033 • 17,600 2,315 880,000
2033 200,000 4.00% 17,600 2,328 1,700 8,000 249,543 680000
-
2034 13,600 1,789 680,000
2034 215.000 4.00% 13,600 1,799 1,163 0,000 254,951 465,000
2035 9,300 1,223 465,000
2035 465,000 4.00% 9,300 1,230 0 0,000 494,053 0
3,250.000 2,793,600 437,084 166,475 240,000 6,887,159
Sources:
Bond Proceeds 3,250,000
`r Uses:
Issuance costs 156,322
Debt Seree Reserve 242,200
Beinhursnrent le other Districts 2,851,478
`- 3.250,000
Exhibit%A
The Hills Metropolitan District#2
-- Schedule of General Obligation Debt•Series 2008
For the Years Ended December 31,2008 to 2038
Letter of Credit Remarketing Rating& Annual 0alagce
leer Principal .Eaugoo Merest )set fees Trustee Fees I➢lal 3,900,000
...- 2008 4.00% 3,900,000
2009 70.000 20,514 3,900,000
2009 4.00% 78,000 20,631 9,750 3,000 209.895 3,900.000
2010 78,000 10.259 3.900,000
2010 25,00D 4.90% 70,000 00,316 9,688 3,000 214,263 3,875,000
2011 77,500 10,193 3,075,000
2011 25,000 4.00% 77,500 10,249 9,625 3,000 213,067 3,850,000
2012 77,000 10,183 3.850,000
2012 30,000 4.00% 77,000 10,183 9,550 3.000 216,916 3,820,000
2013 76,400 10,1149 3,820,000
2013 35,000 4.00% 76,400 10,104 9,463 3,000 220,416 3,785,000
2014 75,700 9,957 3,785,000
2014 40,000 4.00% 75,700 10,011 9,363 3,000 223,731 3,745,000
2015 74,900 9,852 3,745,000
2015 40.000 4.00% 74,900 9,906 9,263 3,000 221.821 3,705,000
2016 74,100 9,800 3,705,000
2016 45,000 4.00% 74,100 9,800 9,150 3,000 224.950 3,660,000
2017 73,200 9,628 3,660,000
2017 45,000 4.00% 73,200 9,681 9.038 3.000 222,747 3,615.000
2018 72,300 9.510 3,615,000
2018 55,000 4.00% 72,300 9,562 8.900 3,000 230,572 3,560.000
- 2019 71.200 9,365 3,580,000
2019 55,000 4.00% 71,200 9.416 8.763 3,0011 227,944 3.505,000
2020 70,100 9,271 3,505,000
2020 60000 4.00% 70,100 9,271 0,613 3,000 230,355 3,445,000
2021 88,900 9,062 3,445,000
-- 2021 65,000 4.00% 68,900 9,112 8,450 3,000 232,424 3,380.000
2022 67,600 8.891 3,300,000
2022 75,000 4.00% 67,600 8,940 8,263 3.000 239,294 3,305,000
2023 66,100 8,694 3,305,000
2023 00,000 4.00% 66,100 8,742 8.063 3,000 240.699 3,225.000
2024 64,500 8,530 3.225,000
2024 85,000 4.00% 64,500 8,530 7,850 3,000 241,910 3,140,000
2025 62,800 8,280 3,140,000
2025 90,000 4.00% 62,800 8,305 7,625 3,000 242,790 3,050,000
2026 61,000 8,023 3,050,000
2026 100,000 4.00% 61,000 8,067 7,375 3,000 248.465 2,950,000
2027 59,000 7.760 2,950,000
2027 100,000 4.00% 59,000 7,803 7,125 3,000 243,688 2.850,000
2028 57,000 7,538 2,850,000
2028 115,000 4.00% 57,000 7,538 6.838 3,000 253.914 2,735,000
2029 54,700 7.195 2,735,000
- 2029 120.000 4.00% 54,700 7,234 6,538 3,000 253.367 2.815,000
2030 52,300 6,879 2,615,000
2030 130.000 4.00% 52,300 6,917 6,213 3,000 257.809 2,485.000
2031 49,700 6,537 2,485.000
2031 140.000 4.00% 49.700 6,573 5,863 3,000 261.373 2,345.000
- 2032 46,900 6.203 2,345,000
2032 145,000 4.00% 46,900 6.203 5,500 3.000 259,706 2,200,000
2033 44,000 5,787 2,200,000
2033 155,000 4.00% 44,000 5,819 5,113 3,000 262,719 2,045,000
2034 40,900 5,380 2,045,000
._ 2034 165,000 4.00% 40,900 5,409 4,700 3,000 265,209 1,880,000
2035 37,600 4.946 1,880,000
2035 175,000 4.00% 37,600 4,973 4,263 3,000 267,382 1,705,000
2038 34,100 4,510 1,705,000
2036 440,000 4.00% 34,100 4,510 3,163 3,000 523,363 1,265.000
2037 25,300 3,328 1,265,000
2037 460.000 4.00% 25,300 3,346 2,013 3,000 522,287 805,000
2030 16,100 2,118 805,000
2030 805,000 4.00% 16,100 2129 0 3,000 844.447 0
3.900 GOO _ 3_.613.600 497.502 216113 90,000 8,317,415
Sources:
Bond Proceeds 3,900,000
Uses:
-- Issuance casts 177,586
Debt Service reserve 313,075
Capital improvements 1,387,440
Repay developer advances 2.021,099
.-. 3.900,000
Exhibit Ill-A
The Hills Metropolitan District#2
Analysis of Developer Owned Subordinate Debt
8.00% Repayments Outstanding
Year Advance Interest Principal Interest Total Principal Interest
0 0
2004 1,387,441 55,498 0 1,387,441 55,498
2005 311,739 115,435 0 0 0 1,699,180 170,933
2006 2,190,480 149,609 0 0 0 3,889,660 320,542
2007 336,816 0 0 0 3,889,660 657,358
2008 363,761 1,000,780 1,021,119 2,021,899 2,888,881 0
2009 231,110 813,124 231,110 1,044,234 2,075,757 0
2010 166,061 6,827 166,061 172,888 2,068,930 0
2011 165,514 5,459 165,514 170,974 2,063,471 0
- 2012 165,078 10,762 165,078 175,840 2,052,709 0
2013 164,217 10,539 164,217 174,755 2,042,170 D
2014 163,374 17,313 163,374 180,687 2,024,857 0
- 2015 161,989 18,239 161,989 180,228 2,006,618 0
2016 160,529 26,503 160,529 187,032 1,980,116 0
2017 158,409 28,992 158,409 187,401 1,951,124 0
2018 156,090 34,107 156,090 190,197 1,917,017 0
2019 153,361 38,083 153,361 191,444 1,878,934 0
2020 150,315 45,056 150,315 195,371 1,833,877 0
2021 146,710 45,894 146,710 192,604 1,787,984 0
2022 143,039 55,054 143,039 198,093 1,732,930 0
2023 138,634 57,814 138,634 196,449 1,675,115 0
2024 134,009 69,322 134,009 203,331 1,605,793 0
2025 128,463 74,519 128,463 202,982 1,531,274 0
2026 122,502 83,846 122,502 206,348 1,447,428 0
2027 115,794 91,584 115,794 207,378 1,355,844 0
- 2028 108,467 98,865 108,467 207,332 1,256,979 0
2029 100,558 109,571 100,558 210,130 1,147,407 0
2030 91,793 120,331 91,793 212,123 1,027,077 0
_ 2031 82,166 129,317 82,166 211,483 897,760 0
2032 71,821 148,905 71,821 220,726 748,854 0
2033 59,908 156,854 59,908 216,762 592,000 0
2034 47,360 175,850 47,360 223,210 416,150 0
-
2035 33,292 206,702 33,292 239,994 209,448 0
2036 16,756 209,448 16,756 226,204 (0) 0
-
3,889,660 4,558,440 3,889,661 4,558,440 8,448,100
Advances repaid from Capital Project Fund 2,021,899
_ Advances repaid from Debt Service Fund 6,426,201
8,448,100
Exhibit IV•A
I I I I I I I l I 1 I I ) I I I ). J 1
The Hills Metropolitan District#2
Forecasted Schedules of Absorption,Market Values and Assessed Values
For the Years Ended December 31,2004 through 2013
L. Schedule of Absorption
Property description Equivalent 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Single Family 55s 100.00% 54 136 190
Single Family 75s 100.00% 75 75 BO 230
Townhomes 50.00% 75 100 53 228
Platted Lots 420 12301 1541 11361 0
Finished Lots 153 55 11281 (80) 0
648
Schedule of Development Fees
Property description Fee 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
2,000 0 150,000 250,000 311,000 432,000 0 0 0 0 , 0 1,143,000
0 150,000 250,000 311,000 432,000 0 0 0 0 0 1143,000
Schedule of Market Values
Property description Market Value 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Single Family 55s 250,000 0 0 0 14,612,834 37,538,747 0 0 0 0 0 52,151,581
Single Family 75s 350,000 0 0 27,856,710 28,413,844 30,914,262 0 0 0 0 0 87,184,817
Townhomes 165,000 0 12,874,950 17,509,932 9,465,869 0 0 0 0 0 0 39,850,751
Platted Lots 12,500 0 5,250,000 12,875.0001 1675,0001 11,700,0001 0 0
Finished Lots 25,000 0 3,825,000 1,375,000 13,200,0001 12,000,0001 0 0 0 0 0
Totals 0 21,949,950 43,866,642 48,617,548 64,753,010 0 0 0 0 0 179,187,149
Schedule of Assessed Valuation il
Market Ratio 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Residential 7.96% 0 1,024,846 3,611,185 4,178,407 5,448,860 0 0 0 0 0 14,263,297
Platted&Finished Lots 29% 0 2,631,750 (435,0001 11,123,7501 11,073,0001 0 0 0 0 0 0
Totals 0 3,656,596 3,176,185 3,054,657 4,375,860 0 0 0 0 0 14,263,297
Cumulative 0 3,656,596 6,832,781 9,887,436 14,263,297 14,263,297 14,263,297 14,263,297 14,263,297 14,263,297
Collection Yr 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Exhibit V.A
ALTERNATIVE B
Fixed Rate Financing
I I I i I ! I ) Z I I I i ) I 1 1 I
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Tears Ended December 31,2004 through 2042
Totals 2044 249;1 7.049 2110/ 2449 2048 241Il 2Qil 2012 2013
L General Fund
Beginning cash available 0 0 0 0 0 0 0 0 0 10l 101
Revenues
Property taxes 1,457,155 0 0 0 12.798 24,171 34,862 50,875 50,875 51,892 51,892
Specific ownership taxes 145,716 0 0 0 1,280 2,417 3,486 5,087 5,087 5,189 5,189
Developer advances 128,222 33,000 33,330 33,663 20,114 8,115
1,731,093 33,000 33,330 33,663 34,182 34,703 38,348 55,962 55,962 57,081 57,081
Expenditures
County treasurer fees 22,433 0 0 0 192 363 523 763 763 778 778
Repay developer advances 277,849 0 3,142 20,189 19,819 20,569 20,211
Operating expenses 1,374,789 33,000 33,330 33,863 34,000 34,340 34,683 35,030 35,380 35,734 36,092
1,675,071 33,000 33,330 33,663 34,192 34,702 38,348 55,962 55,963 57,082 57,081
Ending cash available 56,022 0 0 0 0 0 0 0 10 101 0
Min levy 0.000 _3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500
L Capital Projects Fund 1
Beginning cash available 0 0 0 285,409 0 0 0 0 0 0 0
Revenues
Bond proceeds 8,150,000 3,600,000 4,550,000
Reimbursement from other Districts 3,329,858 3,329,858
Developer advances 2,278,511 1,387,441 891,070
1 Developer contribution 3,818,307 2,430,866 1,387,441
Interest Income 20,000 0 20,000 0
17,596,676 1,387,441 3,620,000 6,851,794 1,387,441 4,550,000 0 0 0 0 0
Expenditures
Issuance costs 328,000 0 144,000 0 0 182,000 0
Transfer to Debt Service Fund 0 0 0
Reimbursement to other Districts 3,173,217 • 3,173,217
Repay developer advances 2,997,934 17,374 2,980,560
District improvements 11,099,525 1,387,441 6,937,203 1,387,441 1,387,440
17.596,676 1,387,441 3,334,591 6,937,203 1,387,441 4,550,000 0 0 0 0 0
Ending cash available 0 0 285,409 0 0 0 0 0 0 0 0
Exhibit h6
i
{ ? 1 1 1 1 s 1 ) I I I 1 1 I 1 I 1 1
The Hills Metropolitan District#2 1
Forecasted Sources and Uses of Cash
for the Years Ended December 31,2004 through 2042
Ietalt 2004 2005 200k 2007 200.@ 2409 2010 2011 14_12 2413
Debt Service Fund II
Beginning cash available 0 0 0 150,000 146,215 350,708 734,401 497,165 445,474 342,259 303,998
Revenues
Property taxes 18,399,117 0 0 0 133,466 252,066 363,561 530,551 530,551 541,162 541,162
Specific ownership taxes 1,839,912 0 0 0 13,347 25,207 36.356 53,055 53,055 54,116 54,116
Development fees 1,143,000 0 150,000 250,000 311,000 432,000 0 0 0 0 0
Transfer from Capital Project Fund 0 0 0 0 0
Interest income 158,552 0 0 11,7851 663 5,201 8,551 7,662 5,887 5,228 4,401
21,540,561 0 150,000 248,215 458,495 714,473 408,468 591,268 569,492 600,507 599,679
Expenditures
Debt service•GO Debt Series 2005 8,902,500 0 252,000 252,000 327,000 321,750 316,500 311,250 261,000 268,900
Debt service•G0 Debt Series 2008 11,989,950 0 318,500 318,500 373,500 369,650 370,800
County treasurer fees 275,987 0 0 0 2,002 3,781 5,453 7,958 7,958 8,117 8,117
21,168,437 0 0 252,000 254,002 330,761 645,703 642.958 692,708 638,767 647,817
Ending cash available 372,144 0 150,000 146,215 350,708 734,401 497,165 445,474 342,259 303,998 255,859
Mill levy 0.000 36.500 36.500 36.500 38.500 36.500. 38.500 36.500 36.500 36.500
Total Mill Levy 0.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000
Assessed valuation(000's)
Beginning 0 0 0 0 0 3,657 6,906 9,961 14,536 14,536 14,826
New construction 14,263 0 0 3,657 3,176 3,055 4,376 0 0 0
Inflation(1.0%per annum) 5,691 73 199 291
Ending 19,954 0 0 0 3,657 6,906 9,961 14,536 14,536 14,826 14,826
1
1
Exhibit 1.8
1
I I I I 1 1 1 1 ) I 1 I I 1 I I I } I
,
The Rills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Years Ended December 31,2004 through 2042
2914 2915 291.& 29.11 291@ 2019 2929 2921 29ZZ 2929 2924 295
General Fund
Beginning cash available 0 (01 10) 0 0 (01 (01 0 0 119 13,534 27,616
Revenues
Property taxes 52,930 52,930 53,989 53,989 55,068 55,068 56,170 56,170 57,293 46,108 50,091 50,091
Specific ownership taxes 5,293 5,293 5,399 5,399 5,507 5.507 5,617 5,617 5,729 4,911 5,009 5,009
Developer advances
58,223 58,223 59,388 59,388 60,575 60,575 61,787 61,187 63,023 54,019 55,100 55,100
Expenditures
County treasurer fees 794 794 810 810 826 826 843 843 859 737 751 751
Repay developer advances • 20,977 20,612 21,392 21,021 21,817 21,437 22,249 21,862 22,572
Operating expenses 36,453 36,817 37,185 37,557 37,933 38,312 38,695 39,082 39,473 39,668 40,266 40,669
58,223 58,223 59,387 59,388 60,516 60,575 61,787 61,787 62,904 40,604 41,018 41,420
Ending cash available (0) (01 0 0 (01 f01 0 D 119 13.534 27,616 41,295
Mill levy 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.000 3.000 3.000
LCapital Projects Fund 11
Beginning cash available 0 0 0 9 0 0 0 0 0 0 0 0
Revenues
Bond proceeds
Reimbursement from other Districts
Developer advances
Developer contribution
Interest Income
0 0 0 0 0 0 0 0 0 0 0 0
Expenditures
Issuance casts
Transfer to Debt Service Fund
Reimbursement to other Districts
Repay developer advances
District improvements •
0 0 0 0 0 0 0 0 0 0 0 0
Ending cash available 0 0 0 0 0 0 0 0 0 0 0 0
Exhibit 1.8
I
1 1 I 1 1 1 1 1 t 1 1 I I 1 1 1 I ) 1
The Hills Metropolften District A2
Forecasted Sources and Uses of Cash
For the Years Ended December 31,2004 through 2042
24L 2.015 20.11 MI 291$ 7.41,4 2020 2021 2022 ?021 2024 2025
Debt Service Fund
Beginning cash available 255,859 225,949 222,988 232,773 228,434 238,841 236,916 246,721 246,319 260,064 260,721 273,208
Revenues
Property taxes 551,985 551,985 563,025 563,025 574,285 574,285 585,771 585,771 597,486 597,486 609,436 609,436
Specific ownership taxes 55,199 55,199 56,302 58,302 57,429 57,429 58,577 58,577 59,749 59,749 60,944 60,944
Development fees
Transfer from Capital Project Fund
Interest income 3,886 3,835 4,003 3,929 4,108 4,075 4,243 4,236 4,473 4,484 4,699 4,650
811,070 611,019 623,331 623,258 635,622 635,789 648,591 648,585 661,708 661,719 675,079 675,029
Expenditures
Debt service-GO Debt Series 2005 266,100 273,300 274,800 260,950 281,400 286,500 285,900 289,950 288,300 296,300 298,250 299,500
Debt service•GO Debt Series 2008 366,800 332,400 330,300 338,200 335,400 342,600 344,100 350,250 350,700 355,800 355,200 369,250
County treasurer fees 8,280 8,280 8,445 8,445 8,614 8,614 8,787 8,787 8,962 8,962 9.142 9,142
640,980 613,980 613,545 627,595 625,414 637,714 638,787 648,987 647,962 661,062 662,592 677,892
Ending cash available 225,949 222,988 232,773 228,434 238,841 236,916 246,721 _ 246,319_ 260,064 260,721 273,208 270,346
Mill levy 36.500 36.500 36.500 36.500 36.500 38.500 36.500 36.500 36.500 36.500 36.500 36.500
Total Mill Levy 40.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000 39.500 39.590 39.500
Assessed valuation 1000'sf
Beginning 14,826 15,123 15,123 15.425 15,425 15,734 15,734 16,049 16,049 16,369 16,369 16,697
New construction 0 0
Inflation(1.0%per annum) 297 302 309 315 321 327
Ending 15,123 15,123 15,425 15,425 15,734 15,734 16,049 16,049 16,369 16,369 16,697 16,697
•
Exhibit I•B
l ) I 1 1 1 1 1 1 1 I E 1 1. I I 1 ) t
R
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Years Ended December 31.2004 through 2042
2026 2027 2028 2O24 2030 2031 2132 2033 2134 295 2131 2037
General Fund 1
Beginning cash available 41,295 55,655 69,604 84,247 98,470 94,177 89,456 85,072 80,253 75,777 70.856 66,287
Revenues
Property taxes 51,092 51,092 52,114 52,114 35,438 35,438 36,146 36,146 36,869 36,669 37,607 37,607
Specific ownership taxes 5,109 5,109 5,211 5,211 3,544 3,544 3,615 3,615 3,687 3,687 3,761 3,761
Developer advances
58,202 56,202 57,326 57,326 38,982 38,982 39,761 39,781 40,556 40,556 41,367 41,367
Expenditures
County treasurer fees 766 766 782 782 532 532 542 542 553 553 564 564
Repay developer advances
Operating expenses 41,076 41,486 41,901 42,320 42,743 43,171 43,603 44,039 44,479 44,924 45,373 45,827
41,842 42,253 42,683 43,102 43,275 43,702 44,145 44,581 45,032 45,477 45,937 46,391
Ending cash available - 55,65 69_,604 _ 84,247 98,470 94,177 89,456 85,072 80,253 _ 75,777 70,856 66,287 61,263
Mill levy 3.000 3.000 3.000 3.000 2.000 2.000 2.000 2.000 2.000 _ 2.000 2.000 2.000
Capital Projects Fund 1
Beginning cash available 0 0 0 0 0 0 0 0 0 0 0 0
Revenues
Bond proceeds
Reimbursement from other Districts
Developer advances
Developer contribution
Interest Income
0 0 0 0 0 0 0 0 0 0 0 0
Expenditures
Issuance costs
Transfer to Debt Service Fund
Reimbursement to other Districts
Repay developer advances
District improvements
0 0 0 0 0 0 0 0 0 0 0 D
Ending cash available 0 0 0 0 0 0 0 0 _ 0 0 0 0
Exhibit IS
I
{ 1 I 1 I I I I ) I I I I r I I I ! 1
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Years Ended December 31,2004 through 2042
2076 2427_ 2028 2029 2030 2031 2Q32 2033 2034 7.035 202E 12032
Debt Service Fund
Beginning cash available 270,346 282,722 282,951 296,859 297,122 310,168 308,739 324,974 326,332 340,499 340,363 354,268
Revenues
Property taxes 621,625 621,625 634,057 634,057 646,739 646,739 659,673 659,673 672,867 672,867 686,324 686,324
Specific ownership taxes 62,162 62,162 63,406 63,406 64,674 64,674 65,967 65,967 67,287 67,287 68,632 68,632
Development fees
Transfer from Capital Project Fund
Interest income 4,863 4,866 5.106 5,110 5,335 5,310 5,589 5,613 5,856 5,854 6,093 6.109
688,650 688,654 702,569 702,573 716,747 716,722 731,230 731,253 746,010 746,007 761,050 761,065
Expenditures
Debt service'GO Debt Series 2005 300,050 309,900 308,350 310,100 312,450 318,100 322,350 325,200 326,650 331,700
Debt service'GO Debt Series 2008 368,900 389,200 370,800 376,700 381,550 390,350 382,750 394,800 395.100 404,350 736,850 749,850
County treasurer fees 9,324 9,324 9,511 9,511 9,701 9,701 9,895 9,895 10,093 10,093 10,295 10,295
676,274 688,424 888,661 702,311 703,701 718,151 714,995 729,895 731,843 746,143 747,145 760,145
Ending cash available 282,722 282,951 296,859 297,122 310,168 308,739 324,974 326,332 341,499 340,363 354,268 355,189
Mil levy 36.500 36.500 36.500 36.500 36.500 36.500 36.500 38.500 36.500 36.500 36.500 36.500
Total Mill Levy 39.500 39.500 39.500 39.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500
Assessed valuation(000'sl
Beginning 16,697 17.031 17,031 17,371 17,371 17,719 17,719 18,073 18,073 18,435 18,435 18,803
New construction 0 0 0 0 0 0 0 0 0
Inflation 11.0%per annum) 334 341 347 354 361 369
Ending 17,031 17,031 17,371 17,371 17,719 17,719 18,073 18,073 18,435 18,435 18,803 18,803
Exhibit f-B
1 I I 1 I I 1 I 1 I 1 I I ! I I I 1 1
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Years Ended December 31,2004 through 2042
2039 20.0,9 21 1041 2042
I General Fund
Beginning cash available 61,263 56,022 56,022 56,022 56,022
Revenues
Property taxes 38,359 0 0 0 0
Specific ownership taxes 3,836 0 0 0 0
Developer advances
42,195 0 0 0 0
Expenditures
County treasurer lees 1,151 0 0 0 0
Repay developer advances ,
Operating expenses 46,285
47,436 0 0 0 0
Ending cash availahle 56 022 56 022 56 022 56,022 56 022
Mill levy 2.000 0.000 0.000 0.000 0.000
1 Capital Projects Fund II
Beginning cash available 0 0 0 0 0
Revenues
Bond proceeds
Reimbursement from other Districts
Developer advances
Developer contribution
Interest Income
0 0 0 0 0
•
Expenditures
Issuance costs
Transfer to Debt Service Fund
Reimbursement to other Districts
Repay developer advances
District improvements
0 0 0 0 0
Ending cash available 0 0 0 0 0
Exhibit I.B
I I I I I I 1 I I I I I I 1 I I I 1 1
The Hills Metropolitan District#2
Forecasted Sources and Uses of Cash
For the Years Ended December 31,2004 through 2042
MI 2039 20.40 2041 2042
Debt Service Fiend
Beginning cash available 355,189 372,144 372,144 372,144 372,144
Revenues
Property taxes 700,051 0 0 0
Specific ownership taxes 70,005 0 0 0
Development fees
Transfer from Capital Project Fund
Interest income 6,401
776,456 0 0 0 0
Expenditures
Debt service-GO Debt Series 2005
Debt service-GO Debt Series 2008 749,000
County treasurer fees 10501
759,501 0 0 0 0
Ending cash available 372,144 372,144 372,144 372,144 372,144
Mill levy 36.500
Total Mill Levy 38.500 0.000 0.000 0.000 0.000
Assessed valuation 1000'sl
Beginning 18,803 19,179 19,179 19,563 19,563
New construction 0 0 0 0 0
Inflation 11.0%per annum) 376 384 391
Ending 19,179 19,179 19,563 19,563 19,954
Exhibit 6B
The Hills Metropolitan District#2
-
Schedule of General Obligation Debt-Series 2005
For the Years Ended December 31,2005 to 2035
Annual Bemire
Year Princioal Loom Intereel SAte1 3,600,000
-
2005 7.00% 3,600,000
2006 126,000 3,600,000
2006 7.00% 126,000 252,000 3,600,000
2007 126.000 3,600,000
2007 7.00% 126,000 252,000 3.600,000
2008 126.000 3.600,000
2008 75,000 7.00% 126,000 327,000 3,525,000
2009 123,375 3,525,000
2009 75,000 7.00% 123,375 321,750 3,450,000
2010 120,750 3,450,000
2010 75,000 7.00% 120,750 316,500 3,375,000
2011 118,125 3,375,000
2011 75,000 7.00% 118,125 311,250 3.300,000
2012 115.500 3,300,000
2012 30,000 7.00% 115,500 261,000 3.270,000
- 2013 114,450 3,270,000
2013 40,000 7.00% 114,450 268,900 3,230,000
2014 113,050 3,230.000
2014 40,000 7.00% 113,050 268,100 3,190,000
2015 111,650 3.190.000
- 2015 50,000 7.00% 111,650 273,300 3,140,000
2016 109,900 3,140,000
2016 55,000 7.00% 109,900 274,800 3,085,000
2017 107,975 3,085,000
2017 65,000 7.00% 107.975 280,950 3,020,000
2018 105,700 3,020,000
2018 70,000 7.00% 105,700 281,400 2,950,000
2019 103,250 2.950,000
2019 80,000 7.00% 103,250 286,500 2.870.000
2020 100,450 2,870,000
2020 85,000 7.00% 100,450 285,900 2,785,000
2021 97,475 2.785,000
2021 95,000 7.00% 97.475 289,950 2,690,000
2022 94,150 2690,000
2022 100,000 7.00% 94.150 288,300 2,590,000
2023 90,650 2,590.000
2023 115.000 7.00% 90,650 296,300 2,475.000
2024 86,625 2475,000
2024 125,000 7.00% 86,625 298,250 2,350.000
2025 82,250 2350,000
2025 135,000 7.00% 82,250 299.500 2.215,000
2026 77.525 2,215,000
2026 145.000 7.00% 77,525 300.050 2,070,000
2027 72,450 2.070.000
2027 165,000 7.00% 72,450 309.900 1,905,000
2028 66.675 1,905,000
-
2028 175,000 7.00% 66,675 308,350 1,730,000
2029 60.550 1,730,000
2029 195,000 7.00% 60,550 316,100 1,535,000
2030 53,725 1,535.000
2030 205,000 1.00% 53,725 312,450 1,330,000
- 2031 46,550 1,330,000
2031 225,000 7.00% 46,550 318,100 1,105,000
2032 38.675 1,105,000
2032 245.000 7.00% 38,675 322,350 860,000
2033 30,100 860,000
- 2033 265,000 7.00% 30,100 325,200 595,000
2034 20,825 595,000
2034 285,000 7.00% 20,825 - 326,650 310,000
2035 10,950 310,000
2035 310,000 .7.00% 10,850 331,700 0
3,600,000 5,302,500 8,902,500
Sources:
Bond Proceeds 3,600.000
Uses:
Issuance costs 144.000
Repay developer advances 17,374
Reimboroanents to other Districts 3,430.626
3 600,000
Esedhil GB
— The Hills Metropolitan District#2
Schedule of General Obligation Debt-Series 2008
for the Years Ended December 31,2008 to 2038
Annual BaIapce
_ Yeas Principal Cam Interest hie4,550.000
2008 7.00% 4,550.000
2009 159,250 4550,000
2009 7.00% 159,250 318,500 4,550,000
2010 159,250 4,550,000
2010 0 7.00% 159,250 318,500 4,550.000
2011 159,250 4,550,000
2011 55,000 7.00% 159.250 373.500 4,495,000
2012 157,325 4,495,000
2012 55,000 7.00% 157,325 369,650 4,440,000
2013 155,400 4,440,000
2013 60,000 7.00% 155,400 370,800 4,380,000
2014 153,300 4,380,000
2014 60000 7.00% 153,300 366.600 4,320,000
2015 151,200 4,320,000
2015 30,000 7.00% 151,200 332,400 4,290,000
2016 150,150 4,290.000
2016 30,000 7.00% 150,150 330,300 4,260,000
2017 149,100 4,260,000
2017 40,000 7.00% 149,100 338,200 4.220,000
2018 147,700 4,220,000
- 2018 40,000 7.00% 147,700 335,400 4,180,000
2019 146,300 4,180,000
2019 50,000 7.00% 146,300 342.600 4,130,000
2020 144,550 4,130,000
2020 55,000 7.00% 144,550 344,100 4,075.000
2021 142.625 4,075,000
2021 65,000 7.00% 142,625 350,250 4,010,000
2022 140,350 4,010,000
2022 70,000 7,00% 144350 350,700 3,940,000
2023 137,900 3,940,D00
2023 90.000 7.00% 137,900 355,800 3.060,000
2024 135,100 3,860,000
2024 85,000 700% 135,100 355.200 3,775,000
2025 132.125 3,775,000
2025 105,000 7.00% 132,125 369,250 3,670,000
2026 128,450 3,670,000
2026 110,000 7.00% 124450 366,900 3.560,000
2027 124,600 3,560,000
2027 120,000 7.00% 124,600 369,200 3,440,000
2028 120,400 3,440,000
2028 130,000 7.00% 120,400 370,000 3,310,000
-
2029 115,850 3.310,000
2029 145,000 7.00% 115,850 376.700 3,165,000
2030 110,775 3,165,000
2030 160,000 7.00% 110.775 381,550 3,005.000
2031 105,175 3,005,000
2031 180.000 7.00% 105,175 390.350 2.825,000
2032 98,875 2,925,000
2032 185,000 7.00% 98,875 382.750 2,640,000
2033 92,400 2,640,000
2033 210,000 7.00% 92,400 394,800 2,430,000
- 2034 85,050 2,430,000
2034 225,000 7.00% 85,050 395,100 2.205,000
2035 77,175 2,205,000
2035 250,000 7.00% 77,175 404,350 1,955.000
2036 66,425 1,955,000
- 2036 600,000 7.00% 68,425 736,850 1,355,000
2037 47,425 1,355,000
2037 655,000 7.00% 47,425 749,850 700,000
2030 24,500 700,000
2039 700,000 7.00% 24,500 749.000 0
4,550,000 7,439,950 11,989,950
Sources:
Bond Proceeds 4,550,000
Uses:
Issuance costs 182,000
Repay developer advances 2,980,560
Capital improvements 1,387,440
4.550.000
Exhibit In
— The Hills Metropolitan District#2
Analysis of Developer Owned Subordinate Debt
8.00% Repayments Outstanding
Year Advance Interest Principal Interest TeU Principal Interest
—
0 0
2004 1,387,441 55,498 0 1,387,441 55,498
2005 0 115,435 0 17,374 17,374 1,387,441 153,559
—
2006 891,070 123,280 0 0 0 2,278,511 276,839
2007 0 204,428 0 0 0 2,278,511 481,267
2008 0 220,782 2,278,511 702,049 2,980,560 0 0
2009 0 0 0 0 0 0 0
2010 0 0 0 0 0 0
2011 0 0 0 0 0 0
— 2012 0 0 0 0 0 0
2013 0 0 0 0 0 0
2014 0 0 0 0 0 0
— 2015 0 0 0 0 0 0
2016 0 0 0 0 0 0
2017 0 0 0 0 0 0
— 2018 0 0 0 0 0 0
2019 0 0 0 0 0 0
2020 0 0 0 0 0 0
2021 0 0 0 0 0 0
—
2022 0 0 0 0 0 0
2023 0 0 0 D 0 0
2,278,511 719,423 2,278,511 719,423 2,997,934
Exhibit IV-B
I I I 1 I I 1 I I I I I I 1 1 I I I 1
The Hills Metropolitan District#2
Forecasted Schedules of Absorption,Market Values and Assessed Values
For the Years Ended December 31,2004 through 2013
Schedule of Absorption
Properly description Equivalent 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Single Family 55s 100.00% 54 136 190
Single Family 75s 100.00% 75 75 80 230
Townhomes 50.00% 75 100 53 228
Platted Lots 420 12301 1541 11361 0
Finished Lots 153 55 11281 1801 0 0
648
Schedule of Development Fees
Property description Fee 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
2,000 0 150,000 250,000 311,000 432,000 0 0 0 0 0 1,143,000
0 150,000 250,000 311,000 432,000 0 0 0 0 0 1,143,000
Schedule of Market Values
Property description Market Value 2004 2005 2006 2007 2006 2009 2010 2011 2012 2013 Total
Single Family 55s 250,000 0 0 0 14,612,834 37,538,747 0 0 0 0 0 52,151,581
Single Family 75s 350,000 0 0 27,856,710 28,413,844 30,914,262 0 0 0 0 0 87,184,817
Townhomes 165,000 0 12,874,950 17,509,932 9,465,869 0 0 0 0 0 0 39,850,751
Platted lots 12,500 0 5,250,000 12,875,0001 1675,0001 11,700,0001 0 0
Finished Lots 25,000 0 3,825,000 1,375,000 13,200,0001 12,000,0001 0 0 0 0 0
Totals 0 21 949 950 43 866 642 48 617 548 64 753 010 0 0 0 0 0 179,187149
I. Schedule of Assessed Valuation '
Market Ratio 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Residential 7.96% 0 1,024,846 3,611,185 4,178,407 5,448,860 0 0 0 0 0 14,263,297
Platted&Finished Lots 29% 0 2,631,750 1435,0001 11,123,7501 11,073,0001 0 0 0 0 0 0
Totals 0 3,656,596 3,176,185 3,054,657 4,375,860 0 0 0 0 0 14,263,297
Cumulative 0 3 656 596 6 832 781 9 887 438 14 263 297 14 263 297 14 263 297 14 263 297 14 263 297 14 263 297
Collection Yr 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Exhibit V.B
- r. I
C;e,j associates, Inca
mantel research Mannino landscape arrhtecirne Of feasibility/valuation
June 30, 2004
Mr.Clint Blum
BGZ Development, LLC
4401 W. Mineral Ave.
Littleton,Colorado 80128
Dear Mr. Blum:
THK has been requested to provide an updated review of absorption schedules for your service plan for
• the Hill Metropolitan Districts No. 1, No. 2, and No. 3 for the Saddleback Hills Lake and Conservancy
property in Firestone,Colorado. District No. 1 is proposed to contain 772 single-family detached units,
District No. 2 will accommodate 420 single-family units and 228 townhome/condominium units, and • -
• District No.3 is planned for 32.3-acres,492,446 square feet,of retail/commercial development to support
_ the community. District 4 which will contain 388 single-family units is no longer part of the service plan. In
total, 1,420 residential units are proposed for the Hill Metropolitan District. The 761.5-acre total area site
(including District 4)lies adjacent and directly east of the new Saddleback Golf Club. The major proposed
roadway in the vehicular circulation framework is:
• Major arterial, stretching between Saddleback Golf Club and Saddleback Hills Lake and
Conservancy.
• Additionally,a 12-mile hiking/biking trail system is under construction and the Saddleback Hills Lake
and Conservancy will provide an additional five miles to this trail system.
The area surrounding the subject site is very active with residential development especially in the
communities of Dacono, Erie, and Frederick. Stimulated by the 125 and recently completed E-
• 470/Northwest Parkway access,the significant commercial development of Preble Creek, community
amenities such as the Saddleback Golf Club, and the St. Vrain River, the area is very attractive to
homebuyers of all price ranges.
The Saddleback Hills Lake and Conservancy property, Hill Metropolitan District only, is currently being
planned for up to 1,420 residential units, including 1,192 single-family detached units and 228
townhome/condominium units. For the purposes of this estimate, we have assumed that there will be
1,420 units actually built on the property.
In order to confirm your pricing and absorption projections,THK surveyed several residential subdivisions
that are active in the immediate area of the Saddleback Hills Lake and Conservancy property. The
subdivisions reviewed for single-family detached product were: Booth Farms, College, County Fields,
County Meadows,Countryside, Elms at Meadowville,Ute Creek, Fox Meadow, Golden Bear,Grandview,
Idaho Creek, Meadowvale, Mill Village, Monarch Estates, Mountain Shadows, Northridge, Oak Meadows,
Pleasant Valley,Quail Crossing,Quail Ridge, Rinn Valley Ranch,Sagebrush,Savanah,Sharpe Farms,Ute
Creek, St.Vrain Ranch, Summit view Estates,Sundail, and Vista Ridge. The key findings are as follows
(detailed in the appendix of this letter):
Mr.Clint Blum
June 30,2004
Page Two
SINGLE FAMILY
Average Project Size = 131 units
Typical Lot Size = 7,974 sq. ft.
Price Range = $143,995 to$639,760
Average Price Range = $266,588-$334,024
Average Home Size Range = 1,762 sq. ft.to 2,715 sq. ft.
Monthly Sales Pace Range = 1.17 units(Northridge)to
45.32 units(Vista Ridge)
Average Monthly Sales Pace = 6.64 units
ATTACHED(Townhome/Condo)
Average Project Size = 69 units
Typical Lot Size = 2,688 sq.ft.
Price Range = $137,900 to$235,000
Average Price Range = $164,449-$193,087
Average Home Size Range = 1,218 sq.ft.to 1,556 sq. ft.
Monthly Sales Pace Range = 0.43(Mill Village)to
8.39 units(Vista Ridge)
Average Monthly Sales Pace = 3.13 units
With this amount of residential activity,the commercial uses will be supportable as the community reaches
maturity. We would suggest that the 32.3-acre,492,446 square foot retail/commercial center is need to
support the residential portion of the community.
It has been reported that a portion of District 1 lots are under contract to builders.
Based on the activity at other projects and the reported contracts for District 1 and 2,THK would suggest
that the reported absorption rates for Districts 1,2,and 3 are reasonable.
Estimated absorption of the 1,420-unit Saddleback Hills Lake and Conservancy community(Districts 1,2
and 3)is as follows:
Product 2004 2005 2006 2007 2008 TOTAL
Single-Family 0 275 274 325 318 1,192
Townhome/Condo — 75 100 53 0 228
Total 0 350 374 378 318 1,420
If you have any questions or require further assistance, please do not hesitate to contact us.
Sincerely,
E. Peter Elzi,Jr.
Principal
SC nla;;
i X
-f-'Sikr
— • I I nsmaci3tPC, inn.
APPENDIX
•
SIIn910-F.Mly Oetatlmd Pm Nets In the Saddleback MIS La*e Environs
Pm/ealime/ Average
typo s/ Annual
[noon
leafbn Structure/ J of Lots I allots Start Monthly
Hai /N
Haider Name CommunlN Mina! Sold Date Saks Rate Price Ramos FOWaw Range
pooch Cams-Flrestone I
1 S ol1 o/CryWI Tnd6W W SS 55 1/1/2001 1.19 $209.990- 5347,9% 1,547- 2.127
Wetl aN&WeLCR13
NOS limes
2 Sn4Me/Heritage&Nypn TradfioM 70 65 N2112031 135 5192,%5-
mYe6Me\Weld CR13 f291.%5 1.00]- 2,)1/
thalami Melon Mmes
x Sallee/IMNv121/2001 0.69 5255,%5- $202,995 917-
hLM1 Dom 6 Weld CR1] Tn05bW 2J 27 1.215
-Anion Hoses
4 Suntingehilittage TnWOW 50 % 1/1/2401 139 531%990- 3275,990 0,1%- 2,534
WW CON&WS CR 03
RyW Horn
— BOOTH FMMS/SUNSHINE OVERALL MONTHLY SNI5 I 5.24
ICDYDIry_Ekde lLSYMry 5Mes1-Erie 1
9 Gnakykls Cgnuy6nes TnNmsl 2/15/1%6 $Zl i1Sgtl0 $3]6,]O) 1,16)
Oman Drive 6119Nsorel 519 Sl3 2,820
Wien Co mulls
•
MUMMY fIELDS OVERALL MONTHLY SAES I 5.211
Itaway Mtldows(Masdov Seiko)-hie
• 6 Count",Ms(Meadow Shia) I
UOM TdEMal 337 330 921/1995 131 $201,8) $217.500 900 1,1%ry:' Tynan Wire•119M Stood
_.. Wvmn Co m-W-
OONTRYMEADOWSOVERALLMONTHLYSALES I uOl
":,1 `('n tnsde-Fm1MM
WmW W7 /1345119005Count Rd l6 Tndthil 151 103 1/5/2002 3,70 $216.Kq- $247,390 1,293- 2,226
i.r Coma Hbn6
S ��nbldMe/U6CwCC�6 Trtllbul 151 51 5/1/2002 U 23
3 $019,190- 3200,390 16- 1.733
(entvNm'es
COUNTRYSIDE OVERALL MONTHLY SOLES I 533I
larva n rrc.de..: - i
9 am atMeYpWak r TbMwl 114 144 1220/1999 236 5213.990- 53%.990 I MN 1196965 CA51/2 R9' ]•1%
Ryland Hoe
EINSAT MEADOW/5E OVERALL MONTHLY SALES I 1520,
Pon Meadow-Longmont I
109TH Me..Foy Meadow/mom off/Engle Homes Tradoonl III 99 42/2%1 2.69 9262.9%- $314,950 4%P- 2,7%
DVUHone
11 fm Meadow/Stanwood/FaOle tones Traditional 25 3 8/1/24.03 033 NL,%0 9525.950 2,732 3,649
Mn Are.&Oenwvw Oime
5.111e Homes
II FOR Meadow WlMNwer TW5MM 11 06 5/12/2501 2.41 5304900 5334503 1.593 2.379
Len _F5-02.20000
eee 1
is y 1U A Sowing.hoodTnd:lyH u1 ISB 1:25/21101 5.49 5003,595 915995 951 1,500
MI Home
101.110 CREEK OVERALL MONTHLY SALES I 5,491
I
16 Head mna T1e Cove TnQtlmal 11 7 1/1/2002 0.25 $301,%0- $101,990 7514- 1,235
thy 1/95Wad at5ii, -
GOMM Crown),
17 Meadorvak/TM Elms
lAy 1196 Wed CR 512 Tn019a1 62 ]B 1/1/2802 036 93)SyT- f11;9% 2,531- 3,730
.—...-
Genesee Coroany
MEADOW/ALE OVERnlL MOMMLY SALES I 1.611
14128531Eaer•.Fm00822 I
18 Smartt Estaks/Wc TtloOW 141 0 12/1/2002 4% 9309,904- $329.9% 3.613- 2.738
County Rd.116 County Rd.24
Gave.Comm.,'
aw-
19 Monarch EYalggnµ¢n.ry Traditional 80 11 9/1/1001 0.55 1133,955- 1263,950 1.665- 2,191
— snowy Rd,261 MY Ad.Si
U.S.Home
20 Moth Estates lh.Moiy Tradition, 59 14 9/1/1002 0.70 16 950
County Rd.24 County RdH f 4 5297,955 2.511- 3.273
10.0,Home
..— MONARCH ESTATES OVERALL MONTHLY SALES I 1.251
IHALn_ Shan I
21 Nowak'%ech of 5/312003 0.6E 215,450-
NHiMway wrnaM•
4 Alon4Y Pd Il Traditional 259 20 i $266,903 1,]52- l,l]0
Homo
MOUNTAIN BNMOWSOVERALL MONTHLY SALES I 1
ai
INnthddorErk
22 Nodlioe TedlbW 65 65 1115)1999 1.17 5316.950-. Weld CR 101/26 Fletcher Or
$174,770 1.911- 3.596
Sheffield Mme;
NORTHR100E OVERALL MONTHLY SALES I 1.171
IQ)*Meadows Firertone I
23 Oak Meadows 442009 2.51 01] 995. 2669
Oak Meadows B1A 6010 Traditional 08 BB 4 f3K.995 1,293-
Rid-mo M Antedate Hm6
-- 24 Oak McNrsp in 6/15/20]2 3.68 1187,195-' O kMeaawyfaw&CID Traditional 84 $271,195 1,115- ;XI
—_49 Nano
25 Oak Meadwy prole 2/1/2002 0.74
County Rd 13&ConB'M 24 TMkoul 11 I4 SRIAm- u61.660 I.m- :.190
Niotle Homes
— OAK MEADOWS OVERALL MONTHLY SALES I 8.9a1
IMeaannt Va ,gossmw n I
26 Pleasant Valley/Celebration ' Trad6oW 219 219 2/5/1000 5]6
US664 Aline Urea $190,950 5217,950 997 1,600
tide*Howes
PLEASANT VALLEY OVERALL MONTHLY EVES I S)6I
IOw Gramme I
27 Quail Coss*16 m Traditional 233 ID 5/3011999 4.08 5201,995 $277,995 0672 2,575
Ho+noln Mw A5/.4 Sam Roo Olive
Rldionord Mohan Male
28 Quail Omit,II TradfOW 148 148 15/15/1999 3.25 $276,995 $327,995 045 2.728
Mountain View Ave.48Wo1 Rock Wye2.
Minted Moon Homes
QUAa CROSSING OVERALL MONTHLY SALES. I 7.311
-- IOHkPl6ee-teee„,nr I
Pall MOM/Re/8514 EMeryles TrdRlm, 15 1.5 8/1/2553 1.25 5239.90 1266,900 139 1,93]
SAW Road&M.N Stied
&M Fnialwise,Inc
305800 Rele/Casket Homes TAdtMn 73 33 8/1/2010 473 9279,000 9552,00 141 1,986
..— Munn Vennv Raven.inn— I .
31 Mm Valley Ranch
Owe 1196 Canny Rd.) TndlhvW 70 38 11/1/202 Lll 9]0,00- 1363,00 1,956- .9,901
Cayy Parf Nines
PION VALLEY RASOI OVERALL MONTHLY SALES I 2.14
— Is e4rmh-E,.dedsk Ir
SI County Rd.H 6 Colorado glad. MRlonl 312 18101/6/203 ].l> 1241,450 5275,155 119 :,6H
Melody Hamm ko
SAGEMOSH OVERALL MONTHLY SALES I 5.])1
•
. IS^Vennnh-Frederick I
„r swna0/[°1055 TmEWI 115 In I/1/2002 4.57 1173,950- $593,150 1,040- 5.605
County Rd 1548th 55¢1
Melody Wm
34�51WT 75 TradloN 275 114 10115/100/ 3.73 5203,150- 5231,950 1,251- 1550
Mealy lbnw
SAVANNAH OVERALL MONTHLY SALES I p38j
Iuhvne Panne-Oxono I
35 loloray 52 5 firing Shame fame Traditional 68 37 1/26/200] 3.04 5549.990 5219,950 1,115 2,590
.--
Woolvest Moon Ork Olive
36 Shape Pawns/Richmond TadRonal 50 37 3/11/2003 1,37 1165,995 1194995 1,115 049]
H4hwaY 526 FHa419 Cede Blvd.
Scitmond Amnon Hornet
SHARPE FARMS OVERALL MONTHLY SALES I 5.01)
•
__________________________I
37 60 grain Reich/Welt west Traditional 189 165 7/15/1999 0.13 $174,950- $315,950 930- 1,191
County Rd116 County Rd 15
(Mime
30 St Wain Ranch/Crystal et NNa0e Traditional 400 333 7/15/1999 5.79 $224,950- $281,990 1,547- 1,534
Lowly Rd 12 6 County R0 24
Ryland Hann
39 4 Wain Rands/Genesee TradkbW 17 13 2/5/2002 0.10 5269.900- 1319,900 2,128- 2,730 Cot,Rd 226 Cwnry Rd 15
G0eee Crown?
STVRAW RANCH OVERALL MONTHLY SALA5 I 14.41
I$Hom&&VIew estates-Prnlerick I
40 Summit New Elates Traditional 180 574 11/1/1999 3.12 $211,990- $163,990 1,134- 2,774
6/m CR 166 Weida u
6n PRAY Homes
SUMMIT VIEW ESTATES OVeMLL MON5r5LY SALES 1 3.221
I mdml-Lnnomont ..1
1l /Harvnt� Way
TradtbW 93 93 11/30/1 2.90 5352.E 1280,500 2113 1,500
Nitre Ave.8.Hloan WM laM!tones
42 Sundial/5MvMMe Traditional 101 101 11/30/203 3.26 $171,750 $237,000 1.064 S2204/colon Ave&W)bun Way
HM Lan 9 Hones
30N01µ OVERALL MONTHLY 5Aa3 I 6.161
lute Creek-Longmont I
4]/always at LRn Leek Traditional 116 23 10/3/2003 3.32 5128.900- 3.098
Sunder.6 Tyrrhenian Drive5323950 1,616-
Celt=Hamm
' 41 Spdn9 Valley et Lite Reek/N¢akana Traditional 252 252 8/1/1996 1.74 $168,050 5197,750 1,691 3,169
Polo Way 6 St Andrews Otn
Conte lance
45 99V�5�/Tradition Traditional 164 161 1046/1999 3.06 $180,250 $349,500 2112 3.316
d
CeMmlbnes
46 Ue Ong/SmdamM/Genesee Traditional 21 10 7/11/1 0.46 5399,900 6518,609 237 3,730
Canner
rLeite RCS 61904e
47 We Week Sundaime/Gm/MMem Traditional 13 13 7/11/1002 0.78 $549,03 5637,000 3.150 3,583
S IM Ave
46 IhONW/W1wdemee/Crmmlone Tradtan9 Li 13 6/15/1000 0.32 1105,009 5569.550 2,699 3,238
WMMgnne Ckde 6 PaceShut
fmbmM home
49 l¢Cmet/WWMNnee/stoeN Tridental 17 17 (/15/1003 0.11 $191,900 $536,150 2.770 3,390
Wegidernere Lira ha Street
Swirls 50 UM�/Wnedemoee Circle and /Ceyd:We lanes Tra01Mnal 8 0 6/55/1000 0.10 $370,000 $619,900 3,021 3,705
veet
ereM_We Hires
51 We Creek/WWW[Moe/Mantel Hein Tradklnal 11 12 6/15/1 0.39
Wfrdmne Chris 6 Pace Street
Mattel 3,604 3,4)6.
8u sd Hon.--
51 Pinnacle*Ole Creek Traditional 37 37 6/6/1003 0.16 $411,900 $518,900 2.105 3,486
1baway 656 Pact 50eet
Macau onveNpnont
O CRBER OVERALL MOMT51tY SALES
R I 11.051
IV binRise-Erie
53 Vista Pdifle/Classt Sena Tudor 337 112 10/25/2002 6.15 1251,950- 1362,450 1,655- 3,855
aunty RE.5&5018Hery.
Mik/Woes
54 Vista Pane/Sumps Tradllwul 16 16 1/15/2001 1.52 1259,450 0296.450 1,665 2,624
• Vida Raa PaM1gy 800085077
916008/Huns
SS Vtsia Ridge/0A 22050 Tadtlal 254 129 5/3/2002 5.39 6217,900- 3360,900 1,141• 3,119
66WMAla Sires&Mountain View Blvd.
O.R.HwBa Hme6
56 Vista Moe/.W.nture Series Traditional 144 71 8/21/1003 7.07 3319,990 $345,990 1.954 3,169
Vista Mat Pakway 1.1XOMeay
(mBnStd Horne
S2 Vista RIOe/Tn]ams&Halsge TrastOons 78 54 11/15/2003 9.76 1210.950 5263,900 1,361 1.175
Mountain View SBE.8 Hllwn.7
WS Wye Ow4ynert UrR
58 Orchards XWS Silos Tn01MY 172 102 3/29/1103 7.79 $259,990 5263.990 1,563 456
Parkway Newnan Mew Wed.Carill2'
Home
59 Peak X Visla Ray Tndlnal 41 16 2/7/2004 5.01 6275.950 0319,750 1.965 2627
Sunset Orke&Visa Ridge Pnkwry
WmbeslHma
60 Pse0Me atVida Ray Tndlbnl 92 32 4/26/2003 1.63 $925,000 6465,000 2.474 3,762
Vista Parkway&2mnwend art*
30891aln9 Hams
VISA 111008 OVERALL MOmmLY SALES I 43.10
I71764 7,565 5$31 71.97
AVEAAGE 131 92 5.64 1266.565- 6334.024 1762- 2,715
Scarce:TMA5urgt5 Inc
1 ► I ► I I I I I I I I I I I I ► I 1
lownnomeo-oneom,nlum vrmern m MO aaaolanaee Min Lassa Levey
Average
Pr0jectWame/ Type of Annual
Location Structure/ a of Lots 'ofots Start Monthly Square Woks!
Builder Name Community Planned Sold Date Sales Rate PAX Renee footage Range Lot Sire
'aloe Sky et hsla Ridge-ilia I
Viso Ridge)Blue Sky Traditional 409 33 1/3/2009 8.39 $137,900 $197,900 2,003 1,579
Sunset Drive&Vets Ridge Parkway
Hmee Cmmrunile
'Fox Meador-Longmont
Fos Meadow/Sunildd Traditional 166 761/15/2003 4.69 $163,900 $168,700 1,105 1,299
9th Ave 65ummehawk Drive
The James Company
'Golden Bear-Longmont I
• Golden Near/Condominiums Traditional 48 43 1/27/2002 1.58 $163,900 $195,900 1.299 1.577
17th Ave&whRehah Drive
Metropolitan Hones
Golden Bear Townhwne Tradaonal 68 55 1/27/2002 2.03 $192,900 $207,900 1,252 1,590 2,90
17th Ave.B Wnteiell Drive
Metro0olltan Homes
'Grandview-Erie i
Grandview/Townhmes Traditional 172 10 9/1/2001 3.13 $141,995 - $153,495 1,198- 1,381 3,200
Cowry R086 Count/Rd 5
KB Horne
IMll y0laoe-Lena ant /
Mill Village TowMwnes Tra®aoul 26 26 1/2/1999 0.43 $192,700 $235,000 1,495 1,539 3,200
Highway 119&East County Line Road .
Paragon Homer
IQulO Ridge/Parkview-Longmont
Quad Ridge/Parnlew CA Traditional 31 31 2/1/2000 0.56 $179,900 3189,900 1,196 1,983 1,950
Quail Road&Main Street
Loslat Development LLC
'Sonoma Villageat Uta Creek-Longmont
Salons Allege at Me Creek Tradlioml 186 60 1/1/2003 3.75 $192,900 $195,900 1,252 1,551
lee Road a Pare Street
Chatmu Development
TOTAL 345 255 25.06 AVERAGE 59 69 51 3.13 6154.449- 5193 067 L21! • 2,595 0 GOB
Source'Dolt Associates.Inc
{
EXHIBIT I
Intentionally Omitted
_
I
(00020848.DOC v:1)
-
EXHIBIT J
- 2 Underwriter's Letter
�
\ �
2 �
2 .
] . .
§ � �
J . �
_ §
_ §
]
_ ]
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§ . . ..
- a
- 2
__gym
Kirkpatrick Pettis
A Mutual of Omaha Company
September 16, 2004
Town of Firestone
151 Grant Ave.
Firestone, Colorado 80520
RE: Proposed The Hills Metropolitan Districts 1 and 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 The Hills Metropolitan Districts 1 and 2. We are engaged
with the petitioners of the proposed Districts as described by the attached Letter of Intent. We
have the intention of serving as underwriters for the Districts' voter authorized debt once
sufficient credit support can be identified based on assessed value or guarantees provided by the
landowners. One of the structures represented in the financing plan involves non-rated bonds
sold to a third party, which we believe will be marketable based on the growth assumptions also
included in this plan and the number of permits expected at the time of issuance. In this
example, the debt would be sold to institutional investors.
You also requested an explanation of the level of credit risk associated with the types of
financing we are considering for these Districts. As with most start-up special Districts, these
Districts expect 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 will decrease as development occurs. Our recent special district underwritings vary
from bonds sold at 8% with land in the Districts sold to builders and no homes constructed to
refunding bonds issued with most of the homes built at interest rates of 5% with "AAA" rated
insurance. In the case of"AAA" rated, insured bonds, the underlying Districts generally have
debt/AV ratios of 50% or less.
Because the financing in these Districts is intended to pay for public infrastructure, we issue
bonds as close to the time the infrastructure is needed as possible. While this does increase the
bondholders' risk, the bondholders understand that risk and are compensated in the interest rate
on the bonds. With regard to the Town's risk, we know of no example where a Municipality was
implicated in a special district default and see no legal argument for such implication.
In the process of underwriting bonds for a non-rated residential metropolitan district, one key
criteria 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.
Per input from Town staff and based on previously approved Districts in Firestone, these Service
1600 Broadway,Suite 1100* Denver,CO 80202-4922 * 303-764-5737 * 303-764-5768*800-942-7557
FAX 303-764-5770 * Home Office: 10250 Regency Circle,Suite 400 * Omaha,NE 68114* 800-776-5777
Member NASD&SIPC*ssharp(dkpsn.com*tbishonekpso.com
Plans include "Development Thresholds" for issuance of non-rated debt based on building
permits in each District.
We hope this letter helps to clarify the financing alternative 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,
SE Sha
f0
First Vice Presi ent
1
Kirkpatrick Pettis
A Mutual of Omaha Company
_ 0
KIRKPI TRICK PQTTI5
A Mutual of Omaha Company Investments Since 1925
May 31, 2002
Petitioners for"The Fills Metropolitan District Nos. 1 -3"
c/o Clint Blum
BGZ Development,LLC
4401 W. Mineral Avenue
Littleton, CO 80128
•
RE: Letter of Intent—Proposed"The Hills Metropolitan District Nos. 1-3"
Dear Petitioners:
The Petitioners are in the process of organizing the proposed "The Hills Metropolitan
District Nos. 1 -3"(the"Districts"). Once the Districts are organized it is anticipated that
the Districts will authorize and issue improvement and/or refunding bonds (the "Bonds")
pursuant to voter-approved election questions. The Petitioners desire to state their
intention to have the Districts engage the services of Kirkpatrick Pettis regarding the sale
of those bonds. This letter confirms the basis upon which we intend to submit an offer to
purchase the Bonds from the Districts after they are organized.
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 the Districts'
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 Board of Directors of the Districts, various debt strictures
can be analyzed within the plan to determine what will work best for the Districts.
Structuring. Once a financing structure has been selected by the Boards, 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 Districts and the expectations of investors.
Legal CounseL Legal counsel will be selected and engtged by the Districts to prepare
the legal proceedings necessary to authorize the debt, to_assist in the preparation of
disclosure documents necessary to sell the securities, and to render certain approving
1600 BROADWAY.SUITE 1100•DENVER,CO 80202-4922•303-764-6000•800-942-7557•FAX 303-764-6002
HOME OFFICE:10250 REGENCY CIRCLE SUITE 400•OMAHA,NE 68114•800.7764777
Member NASD&SIPC•www.kirkpatnckpems.com
Proposed"The Hilts Aletropt,litan pirtrict Nos. I-3"
Page 2 of
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 Districts' best interest to obtain these ratings, Kirkpatrick Pettis will assist the
Districts in preparing and submitting applications to the rating agencies along with
detailed information about the Districts,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 Districts in
investigating the availability of bond insurance, letters of credit or other forms of credit
enhancement and assist the Districts in determining the cost effectiveness of these
products.
w Disclosure to Investors. In connection with the issuance of bonds by the Districts and
the sale and delivery of securities to ultimate investors, material information about the
•
Districts and the transaction must be compiled in a disclosure document for distribution
to prospective purchasers. As set forth above under Legal Counsel, the Districts will
engage the services of counsel to assist in the preparation of such disclosure documents
• and advise the Districts and Underwriter about sales practices, regulatory requirements,
and security matters. If disclosure counsel is engaged as the Districts' 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
Districts in making these arrangements. By accepting this letter and accepting our
assistance in making these arrangements, the Districts 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 Districts 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
Boards 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 Districts accept our offer,there will be
no obligation for this firm to purchase the bonds from the Districts. In consideration for
our work performed pursuant to Section I, above, it is the Petitioners intent to cause the
T
•
Proposed"The Hills Metropolitan District Nos. I-3"
Page 3 of 4
Districts to agree that they will not consider other underwriting proposals unless
Kirkpatrick Pettis has first declined to underwrite the transaction on terms and conditions
acceptable to the District.
r Section 3. Remarketing. In the event that the Districts issue bonds that are remarketed
within their term, the Districts will have to engage a remarketing agent qualified to
r� remarket the bonds on each remarketing date. If an underwriting agreement is reached
li 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
r performed pursuant to Section 1, above,it is the Petitioners intent to cause the Districts to
agree 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 they 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 Districts
but such expenses will not be obligations of the District unless advance authorization has
been obtained from the Districts. 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 Districts' 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 Districts and their 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
Districts will incur and assume additional obligations as set forth in the bond purchase
agreement -
Section 6. Private Placement of Debt If the Districts determine that a private
placement of debt to developer or other parties would be in its best interest, it is the
Petitioners intent to cause the Districts to agree that they will milize the services of
Kirkpatrick Pettis as an advisor for a fee not to exceed 1%of the debt distributed
Proposed"The Hills Ate -apoliian District Nos. 1-3"
Page of
Section 7. Term of Letter Agreement. This letter agreement shall remain in full force
and effect until such time as the Petitioners notify Kirkpatrick Pettis in writing of their
intent to terminate this letter agreement, provided that any such action or notice shall
provide no less than 30 days notice of such termination. Kirkpatrick Pettis may resign as
investment banker to the Districts by providing written notification with no less than 30
days notice to the Petitioners.
•
Section 8. Acceptance. The Petitioners or other authorized officers of the developer
may indicate their desire to proceed with the delivery of these investment banking
services upon the basis set forth in this letter by executing one copy of this letter and
returning it to us.
Respectfully submitted,
Kirkpatrick,Pettis,Smith,Pollan Inc.
Thomas It Bishop Sacs Sharp, •
Senior Vice President Vice President
ACCEPTED this—N day of May 2002.
BGZ Development,LLC
Authorized Officer
r
J"
r
McGEADY SISNEROS, P. C.
ATTORNEYS AT LAW
ISIS BROADWAY,SUITE 2100
— DENVER,COLORADO 80202
TELEPHONE:13031 592-4350
FACSIMILE:13031 5 92-938 5
MARYANN M.McGEADY SPECIAL COUNSEL
DARLENE SISNEROS
KENNETH M.HOPROWIC2
— MARY JO DOUGHERTT
MEGAN BECHER
VALERIE D.BROMLEY
KATHRYN S.KANDA
JACQUELINE C.MURPHY
.--. GEORGE M.ROWLEY September 16, 2004
Town of Firestone, Colorado
P.O. Box 100
Firestone,CO 80520
Re: Organization of The Hills Metropolitan District No. 2
— This firm has acted as counsel to Saddleback Hills Lake & Conservancy Limited
Liability Company, the Developer, which is the District organizer, and Petitioners in connection
with the organization of The Hills Metropolitan District No. 2 (the"District"). Pursuant to the
— requirements of Section V.J. of the Service Plan for the District,this letter confirms that the
petition for organization of the District, filed with the Town on September 16, 2004, the Service
Plan for the District, as approved on September 16, 2004, by the Town of Firestone, 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, Article 1 of Title 32, C.R.S., and that the
provisions of the Service Plan, including,without limitation, provisions as to the District's debt,
fees and other revenue sources, are consistent with applicable provisions of Titles 11 and 32,
C.R.S., and other applicable law.
Very truly yours,
CGEA:Y SISNE:• '.C.
•
Darle a n eros
4
{00026266.DOC V:21
EXHIBIT L
Developer's Indemnity Letter
and
District's Indemnity Letter
September 13, 2004
Town of Firestone
P.O. Box 100
Firestone, Colorado 80520
Re: The Hills Metropolitan District No. 2
Ladies and Gentlemen:
This Indemnity Letter(the"Indemnity Letter") is delivered by the undersigned,
Saddleback Hills Lake&Conservancy Limited Liability Company and Saddleback Hills Lake
and Conservancy#2 LLC ("Saddleback"), in order to induce the Town of Firestone (the
"Town")to approve the Service Plan, including all amendments heretofore or hereafter made
thereto (the"Service Plan") for The Hills Metropolitan District No. 2 (the "District"). In
consideration of the Town's approval of the Service Plan, Saddleback, for and on behalf of itself
and its transferees, successors and assigns, represents,warrants, covenants and agrees to and for
the benefit of the Town as follows:
1. Saddleback hereby waives and releases any present or future claims it might have
against the Town or the Town'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. Saddleback further hereby agrees to indemnify and hold harmless the Town and the
Town'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 Saddleback, the District, the Town 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.
Saddleback further agrees to investigate, handle,respond to, and to provide defense for and
defend against, or at the Town's option, to pay the attorneys' fees and expenses for counsel of the
Town's choice for any such liabilities, claims, demands, suits, actions,or other proceedings. It is
understood and agreed that the Town 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, Section 24-10-101, et
seq., C.R.S., as from time to time amended,or otherwise available to the Town, its officers or its
employees.
{00020848.DOC vi}
2. Saddleback hereby consents to the Town Disclaimer Statement contained in
Exhibit N to the Service Plan; acknowledges the Town's right to modify the Town Disclaimer
Statement, and waives and releases the Town from any claims Saddleback might have based on
or relating to the use of or any statements made or to be made in such Town Disclaimer
Statement(including any modifications thereto).
3. Saddleback hereby represents and warrants to the Town that it and its principals
and controlled affiliates will be, if and when they acquire Developer Bonds (as defined in the
Service Plan), accredited investors.
4. Saddleback believes and represents that, once the commencement of builder
activity is demonstrated by the issuance of building permits as described in Section V.B(2)(b)of
the Service Plan, there is a reasonable likelihood that projected future development will occur
and will result in levels of assessed valuation sufficient to support such Unrated Non-Developer
Bonds(as well as all other debt contemplated for the District), as shown in Exhibit H to the
Service Plan.
5. Saddleback believes and represents that the assumptions,projections and forecasts
contained in the District's Financial Plan are reasonable.
6. It is understood and agreed, and Saddleback hereby expressly acknowledges, that
the Town, in acting to approve the Service Plan,has relied upon the provisions of this Indemnity
Letter.
7. This Indemnity Letter has been duly authorized and executed on behalf of
Saddleback Hills Lake&Conservancy Limited Liability Company and Saddleback Hills Lake
and Conservancy#2 LLC.
Very truly yours,
SADDLEBACK HILLS LAKE &
- CONSERVANCY LIMITED LIABILITY
CO ANY
By: F�
Its: yL„._
SADDLEBACK HILLS LAKE AND
CONSERVANCY#2 LLC
By:
Its: 1/1"4„..1)..L._
{00020848.DOC v:1}
Form of District's Indemnity Letter
[Date]
_ Town of Firestone
P.O. Box 100
Firestone, Colorado 80520
Re: The Hills Metropolitan District No. 2
Ladies and Gentlemen: •
This Indemnity Letter(the"Indemnity Letter") is delivered by The Hills 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"). In consideration of the
Town'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
Town as follows:
1. The District hereby waives and releases any present or future claims it
might have against the Town or the Town'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 Town and the Town'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 Town,
Saddleback Hills Lake and Conservancy#2 LLC and Saddleback Hills Lake &Conservancy
Limited Liability Company("Saddleback Hills") 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 Town's option, to pay the attorneys' fees and expenses for counsel of the Town's choice
for, any such liabilities, claims, demands, suits, actions or other proceedings. It is understood
and agreed that neither the District nor the Town 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, Section 24-10-101, et
seq., C.R.S., as from time to time amended, or otherwise available to the Town,the District, its
officers or its employees.
2. The District hereby consents to the Town Disclaimer Statement contained
in Exhibit N to the Service Plan, agrees that the District will include such Town Disclaimer
Statement or any modified or substitute Town Disclaimer Statement hereafter furnished by the
(00020848.DOC v:I)
Town 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 Town 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 Town 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 Town
Disclaimer Statement(including any modifications thereto).
3. It is understood and agreed, and the District hereby expressly
acknowledges, that the Town, 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,
THE HILLS METROPOLITAN
DISTRICT NO. 2
By:
Its:
{00020848.DOC v.1)
EXHIBIT M
Disclosure Notice
THE HILLS METROPOLITAN DISTRICT NO. 2
Weld County, Colorado
DISCLOSURE STATEMENT
_ Pursuant to Section XI of the Service Plan of
The Hills Metropolitan District No. 2
DISTRICT ORGANIZATION:
The Hills 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
, pursuant to an Order and Decree Organizing District and
Issuance of Certificates of Election for The Hills 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 at Reception No.
The District is located entirely 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 for the purpose of serving as a"financing only"
district to finance street,water, safety protection, and park and recreation facilities, all in
accordance with its Service Plan approved by the Town of Firestone. When completed,
improvements shall be dedicated to the Town of Firestone,or its designees, including, but not
limited to, Central Weld County Water District, Carbon Valley Park&Recreation District,or
other non-profit or governmental entities, all for the use and benefit of residents and taxpayers,
except that certain improvements, upon the consent and direction of the Town of Firestone, may
be maintained by the District or a Homeowners'Association formed for the Saddleback Hills
subdivision. The District's Service Plan is available from the District c/o McGeady Sisneros,
P.C., 1675 Broadway, Suite 2100, Denver, CO 80202, Attention: Darlene Sisneros, and is also
on file and available for review at the Office of the Town Clerk, Town of Firestone, 151 Grant
Avenue, Firestone, CO 80520.
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
(00028886.DOC v:2(
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 a one mill equals $1 of tax for each$1,000 of assessed
value. The financial forecast for the Districts (as set forth in its Service Plans) assumes that the
District will be able to set its tax levy at forty(40) mills for debt service,warranty maintenance
and administration purposes. Except for certain adjustments permitted by the Service Plans to
compensate for legally required changes in residential valuation ratios, the District may not
impose a mill levy in excess of fifty(50)mills ("Limited Debt Service Mill Levy") for debt and
three and one half(3.5) mills for operations and warranty maintenance. District's taxes are
collected as part of the property tax bill from Weld County for debt service and for District
administration and its warranty maintenance activities.
THE HILLS METROPOLITAN DISTRICT NO. 2
By:
President
{00028886.DOC v:2} 2
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me on this day of
, 200 , by as the
of The Hills Metropolitan District No. 1.
WITNESS MY HAND AND OFFICIAL SEAL.
Notary Public
My commission expires:
{00028886.DOC v:2} 3
EXHIBIT N
Form of Town Disclaimer
TOWN OF FIRESTONE, COLORADO - DISCLAIMER STATEMENT
As a requirement imposed in its formation process,The Hills Metropolitan
District No. 2 (the"District") is obligated to the Town of Firestone(the "Town")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
The Town 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 Town in any offering materials or any other disclosure documentation relating to
any bonds or other financial obligations of the District.
The Town and the District are separate legal entities. The Town 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 Town
approved Service Plan containing financial and other information furnished by the District's
organizers. The Town's approval of the Service Plan was based upon such information furnished
by the District's organizers, without independent investigation by the Town. The District's
Service Plan was prepared in 2004 and not in connection with the offering of any bonds or other
financial obligations. The Town's approval of the District's Service Plan should not be relied
upon by prospective purchasers, 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 Town and duties to,nor confer any rights against the Town 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 Town or the Town's elected or
appointed officers, employees, agents or contractors in any manner related to or connected with
the District's Service Plan or any action or omission with respect thereto.
{00020848.DOC v.1)
EXHIBIT O
Form of Town IGA
INTERGOVERNMENTAL AGREEMENT
BETWEEN
THE TOWN OF FIRESTONE, COLORADO
AND
THE HILLS METROPOLITAN DISTRICT NOS. 1,2 AND 3
THIS INTERGOVERNMENTAL AGREEMENT ("Agreement") is made and entered
into as of this day of , 200 , by and between the TOWN OF
FIRESTONE, a municipal corporation of the State of Colorado (the "Town"), THE HILLS
METROPOLITAN DISTRICT NO. 1 ("District No. 1"), THE HILLS METROPOLITAN
DISTRICT NO. 2 ("District No. 2"), and THE HILLS METROPOLITAN DISTRICT NO. 3
("District No. 3"), all quasi-municipal corporations and political subdivisions of the State of
Colorado (collectively, District No. 1, District No. 2, and District No. 3 are referred to herein as
the "Districts").
RECITALS
WHEREAS, the Districts were organized to finance,design, construct and install certain
facilities, and to exercise certain powers, all as are more specifically set forth in each of the
Districts' Service Plans dated , and approved by the Town on
, by Resolution No. (collectively,the"Service
Plans"); and
WHEREAS, the Service Plans make reference to and require the execution of an
intergovernmental agreement between the Town and the Districts; and
WHEREAS, the Town and the Districts have determined it to be in the best interests of
their respective taxpayers, residents and property owners to enter into this Agreement;
{00024910.DOC v:4}
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 Districts each hereby acknowledge that the
property within their boundaries shall be subject to all ordinances, rules and regulations of the
— Town, including, without limitation, ordinances, rules and regulations relating to zoning,
subdividing, building and land use, and to all related Town land use policies, master plans,
related plans, and intergovernmental agreements.
2. Nature of Districts. The Districts agree that they are organized for the purpose of
financing certain public improvements within the Saddleback Hills Lake &Conservancy
development(the"Development,"as further defined in the Service Plans), and that the Districts'
— purposes, powers, facilities and activities are to be limited and governed by their respective
Service Plans. The Districts are not intended to and shall not provide service outside their
— boundaries(except as specifically permitted in the Service Plans). Further, the Districts are not
intended to and shall not exist perpetually,but instead shall be dissolved in accordance with their
respective Service Plans and State law. The Districts shall fully comply with all provisions,
requirements, restrictions and limitations of their Service Plans. The Districts shall comply with
the requirements of Section 32-1-107(3), C.R.S.
3. Change of Boundaries. The Districts agree that any inclusion of properties
— within, or any exclusion of any properties from, their respective boundaries shall constitute a
material modification of the applicable Service Plans; and any purported inclusion or exclusion
that has not been approved by the Town pursuant to the procedures applicable to a material
modification of the Service Plans shall be void and of no effect.
,.. {00024910.DOC v:4} 2
4. Town Approval Requirements; Review of District Submittals. The Districts agree
that any Town approval requirements contained in the Service Plans(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 Town 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.
Each District agrees to reimburse the Town for all administrative and consultant costs incurred
by the Town for any Town review of reports, plans, submittals, proposed modifications or
requests for administrative approval, or other materials or requests provided to the Town by the
District pursuant to the District's applicable Service Plan, state law, or the Firestone Municipal
Code. The Town may require a deposit of such estimated costs.
_ 5. Ownership of Improvements. The parties agree that the Districts shall serve as
"financing only" districts and shall not be permitted to undertake ownership, operation or
maintenance of public improvements, facilities or services except as specifically set forth in the
Service Plans.
6. Consolidation. The Districts shall not file a request with the district court to
consolidate with another district without the prior written approval of the Town.
7. Dissolution. The Districts agree that they shall take all action necessary to
dissolve as provided in Section VIII of the Districts' Service Plans, and in accordance with such
Service Plan and State law.
8. Notice of Meetings. The Districts agree that they shall each submit a copy of the
written notice of every regular meeting, special meeting, and work session of their respective
(000249 I0.DOC v:4) 3
District's Board of Directors to the Office of the Firestone Town Administrator, by mail,
facsimile or hand delivery, to be received at least three(3) days prior to such meeting. The
Districts each agree that they shall also each, respectively, submit a complete copy of meeting
packet materials for any such meetings to the Office of the Firestone Town Administrator,by
mail, facsimile or hand delivery, to be received at least one (1)day prior to any such meetings.
9. Annual Report. The Districts shall each, respectively, be responsible for
submitting an annual report to the Town pursuant to and including the information set forth in
Section VII of each of the Service Plans.
10. Payments to Town for Public Improvements. Except as otherwise expressly
provided in Section V.G.2 of the Service Plans, the Districts will pay to the Town for deposit
into the Town's capital improvements fund twenty-three percent(23%) of the Districts' total net
bond proceeds derived from the issuance of Non-Developer Bonds. Such amounts shall be paid
_ to the Town immediately upon issuance and delivery of each such series of Non-Developer
Bonds which, according to Exhibit H, is anticipated to occur in 2005 and 2008. The funds so
paid to the Town may be used by the Town to finance any street,park or recreation capital
improvement, or other capital improvement(either within or outside the boundaries of the
District), which improvements the District would otherwise be empowered to construct, i.e.,
streets, street lighting, traffic safety controls, water, sanitary sewer, landscaping, storm drainage
or park and recreation improvements and facilities, any of which improvement shall be of benefit
to the Town and Districts as determined by the Board of Trustees.
By executing this Agreement, the Town expressly agrees that if the Developer and/or the
Districts fund the construction of or construct the Saddleback Park Improvements in accordance
with the Phasing Plan, Concept Plan and other applicable provisions of the Park Agreement and
{00024910.DOC v:4} 4
the Service Plans, then the Certified Construction Costs (as defined below) related to
construction of the Saddleback Park Improvements shall be applied as a credit toward the
Districts' satisfaction of the revenue sharing obligations set forth herein and in the Town IGA,
and the provision set forth above regarding revenue-sharing amounts being paid to the Town
upon issuance and delivery of each series of Non-Developer Bonds shall be inapplicable to the
extent of such credit.
At least sixty(60) days prior to Hills No. 3's issuance of any Non-Developer Bonds, the
Districts shall provide the Town with documentation regarding the total costs incurred by the
Developer and/or the Districts for construction of the Saddleback Park Improvements, including
but not limited to architecture and design, engineering, legal fees. construction management fees,
permit fees, surveying expenses, and labor and materials construction costs ("Certified
Construction Costs"). Such documentation shall include an independent engineer's certification
of the construction costs and the District's certification that such documents and costs incurred
are true and accurate. The Certified Construction Costs shall exclude costs for construction of
any local or collector streets abutting Saddleback Park (currently denoted as Saddleback Circle
_, and Garland Street on the Concept Plan). The Certified Construction Costs may include utility
costs only for those utilities that directly serve Saddleback Park. In the event that the Certified
Construction Costs are equal to or exceed 23%of the aggregate net proceeds (after deduction of
reasonable amounts for capitalized interest, reserve funds and issuance costs) of the Districts'
Non-Developer Bonds previously issued and to be issued as certified by the Districts' Financial
Advisor("Aggregate Net Non-Developer Proceeds"), the Districts shall be deemed to be in full
compliance with the above-described Town regional improvement revenue sharing obligation
and the Town shall not be entitled nor shall it seek additional participation from the Districts for
(00024910.DOC v:a( 5
regional improvements pursuant to such obligation unless otherwise provided by mutual written
agreement among the Districts and the Town. In no event shall the calculation of Aggregate Net
Non-Developer Proceeds include Developer Bonds or Refunding Bonds. Alternatively, in the
event that the Certified Construction Costs are less than 23%of the Aggregate Net Non-
Developer Proceeds,then, as provided in this Agreement and the Hills No. 3 Service Plan, Hills
No. 3 shall pay the Town an amount equal to the difference between such 23% of Aggregate Net
Non-Developer Proceeds and the Certified Construction Costs from the proceeds of its first
series of Non-Developer Bonds, or, if agreed by the Town, from its first and second series of
Non-Developer Bonds on a pro-rata basis.
Although the Developer and Districts anticipate that Non-Developer Bonds will be issued
to fund construction of Improvements or the acquisition of Improvements from the Developer,
they acknowledge the possibility that the Developer or a successor or assignee thereof may elect
_ to fully fund the Improvements and retain ownership of Developer Bonds for more than five
years thereby delaying the issuance of Non-Developer Bonds. In the event that the Districts have
not issued Non-Developer Bonds by the date that is one(1) year after completion and the Town's
conditional acceptance of Saddleback Park Improvements, the Districts acknowledge that the
Developer is obligated pursuant to the Park Agreement to submit the Certified Construction
Costs to the Town and to pay the Town the amount, if any, resulting from deducting the Certified
Construction Costs from 23% of the aggregate net proceeds of all Developer Bonds issued by
any of the Districts,which shall be calculated by deducting the reasonable issuance costs from
the principal amount of all Developer Bonds issued by the Districts, which net amount shall be
certified to the Town by the Districts' Financial Advisor.
(0O024910.DOC v:4} 6
11. Federal Tax Law Requirements. The Town recognizes that the tax-exempt status
of the Districts' Non-Developer Bonds is dependent upon the investment and the expenditure of
the proceeds of the Non-Developer Bonds satisfying requirements of applicable provisions of
— Federal tax law and agrees that the Town will not invest or expend any monies paid to the Town
pursuant to Section 10 above in a manner that causes interest on the Non-Developer Bonds to be
or become included in gross income for Federal income tax purposes. In particular, the Town
— agrees with respect to funds of which it is the recipient pursuant to Section 10 of this Agreement
that it will comply with the following requirements (unless the Town provides to the issuing
District the opinion of nationally recognized bond counsel reasonably acceptable to the issuing
District that failure to comply with any such requirement will not adversely affect the exemption
from Federal income taxation of interest on the Non-Developer Bonds):
(a) The Town will not invest such funds at a yield which exceeds the yield of
the respective Non-Developer Bonds with respect to which such funds have been paid to the
Town. The issuing District shall provide to the Town calculations of yield for such bonds on
which the Town may rely. For purposes of satisfying this requirement, the Town agrees to invest
such funds in investments acquired for not more than their"fair market value"(within the
meaning of Section 1.148-5 of the Treasury Regulations).
(b) The Town will segregate funds received pursuant to Section 10 hereof
from other funds of the Town, record all investments and expenditures of such funds, and
provide records of such investment and expenditures to the appropriate District upon request.
` (c) Funds received by the Town pursuant to Section 10 hereof will be
expended on capital expenditures for Federal tax purposes and the Town shall not apply any such
funds, directly or indirectly, to the payment of debt service on any other obligations of the Town.
(OOO249I O.Doc v:4k 7
Property financed with funds received by the Town pursuant to Section 10 hereof shall be owned
by or on behalf of the Town for so long as any Non-Developer Bonds with respect to which such
funds have been paid to the Town remain outstanding.
(d) No proceeds of Non-Developer Bonds with respect to which funds have
been paid to the Town pursuant to Section 10 hereof will be used by the Town for any"private
business use" (within the meaning of Section 141 of the Internal Revenue Code), nor will any
such funds be loaned by the Town to any other person.
(e) The provisions of this Section 11 are intended to be for the benefit of the
bondholders of the Non-Developer Bonds with respect to which funds have been paid to the
Town pursuant to Section 10 hereof as if such bondholders were parties to this Agreement.
Should the Internal Revenue Service ever examine such Non-Developer Bonds, the Town agrees
to cooperate with the applicable District and will provide to the applicable District such records
and information as may assist the District in the examination process, and the applicable District
will advance or reimburse the Town's reasonable expenses in connection with such examination
process.
12. Allocation of Financing Proceeds. Funds received by the Town pursuant to
Section 10 hereof may be used by the Town to finance public improvements the Districts would
otherwise be empowered to construct, i.e., street,water, safety protection, and park and
recreation facilities and services.
The Districts acknowledge and agree that the provisions of this Agreement and of the
Service Plans for revenue sharing payments to the Town are material considerations in, and
conditions of, the Town's approval of the Districts' Service Plans, and that the Town has relied
thereon in approving the Districts' Service Plans.
[00024910.DOC v:4} 8
The Districts specifically agree that the provisions of this Agreement and of the their
respective Service Plans shall run in favor of and shall be enforceable by the Town. The
Districts represent and warrant that they have obtained all voter authorizations necessary to
implement such provisions of this Agreement and the Service Plans, and that they will exercise
their powers in accordance with and in furtherance of such provisions.
13. Entire Agreement of the Parties. This Agreement, together with the Service Plans
.- to the extent they relate to, complement or are referenced in the provision of this Agreement,
constitute the entire agreement between the parties and supersede all prior written or oral
agreements, negotiations or representations and understandings of the parties with respect to the
subject matter contained herein.
14. 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. If a proposed amendment, modification or
change affects less than all Districts, then the written agreement regarding such amendment,
modification or change may be authorized and executed by the Town and the affected District or
Districts rather than all parties hereto.
15. 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.
16. Venue. Venue for the trial of any action arising out of any dispute hereunder shall
be in the appropriate district court of the State of Colorado pursuant to the appropriate rules of
civil procedures.
(00024910.DOC v:4) 9
- JGti aly
(00024910.DOC v:4) 10
17. 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.
18. 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 any party or as to all
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 Districts and the Town agreed to take such actions as may be necessary to
achieve to the greatest degree possible the intent of the affected portion.
19. Assignability. Other than as specifically provided for in this Agreement, neither
the Town nor the District shall assign their rights or delegate their duties hereunder without the
prior written consent of the other parties.
20. Successors and Assigns. Subject to Section 19 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.
21. Definitions. All capitalized terms not defined herein shall have the meanings set
forth in the Service Plans.
THE HILLS METROPOLITAN DISTRICT NO. 1
By:
Its:
ATTEST:
By:
Secretary
(00024910.DOC v:4} 10
THE HILLS METROPOLITAN DISTRICT NO. 2
By:
Its:
ATTEST:
By:
Secretary
THE HILLS METROPOLITAN DISTRICT NO. 3
By:
Its:
ATTEST:
By:
Secretary
TOWN OF FIRESTONE
By:
Mayor
Attest:
_ Town Clerk
(00024910 DOC v:41 11
EXHIBIT P
Form of District IGA
INTERGOVERNMENTAL COST SHARING AND RECOVERY AGREEMENT
THIS INTERGOVERNMENTAL COST SHARING AND RECOVERY
AGREEMENT ("Agreement")is made and entered into this day of , 2004,
by and among THE HILLS METROPOLITAN DISTRICT NO 1. ("District No. 1"), THE
HILLS METROPOLITAN DISTRICT NO. 2 ("District No. 2"), THE HILLS
METROPOLITAN DISTRICT NO. 3 ("District No. 3 ) (collectively, the"Districts"), all of
which are quasi-municipal corporations and political subdivisions of the State of Colorado,
SADDLEBACK HILLS LAKE & CONSERVANCY LIMITED LIABILITY COMPANY
and SADDLEBACK HILLS LAKE AND CONSERVANCY#2 LLC (collectively, the
"Developer").
RECITALS
WHEREAS, pursuant to the Colorado Constitution,Article XIV, Section 18(2)(a), and
Section 29-1-203, C.R.S., metropolitan districts may cooperate or contract with each other to
provide any function, service, or facility lawfully authorized to each, and any such contract may
provide for the sharing of costs,the imposition of taxes, and the incurring of debt; and
WHEREAS, the Districts were formed for the purpose of designing, acquiring,
constructing, installing, and maintaining certain public improvements, including street,water,
safety protection, and park and recreation facilities, to the extent permitted and as more fully
detailed in their Service Plans; and
WHEREAS, each District lies within, and was organized with the approval of; the Town
of Firestone, State of Colorado (the"Town"); and
WHEREAS, the land in the Districts (the"Development")will require construction and
installation of certain regional improvements("Shared Facilities"); and
WHEREAS, development within the respective Districts is not expected to proceed at
the same time. Accordingly, the Districts desire to create a flexible structure that allows any one
or more of the Districts to separately or cooperatively fund, construct and install improvements ,
and to the extent that they are funded, constructed and installed by fewer than all of the benefited
Districts,to require the non-participating District to reimburse the participating or initiating
District(s) for its share of the costs of such improvements; and
WHEREAS, each of the Districts is limited and governed by its respective Service Plan
(collectively, the"Service Plans"), as approved by the Town on September 16, 2004; and
WHEREAS, at an election held for the Districts on November 2, 2004, in accordance
with law and pursuant to due notice, this Agreement was authorized by a majority of the
Districts' respective electorates.
(00013370.DOC v:4)
— NOW,THEREFORE, in consideration of the promises and the mutual covenants
herein, the Districts agree as follows:
I. Electoral and Regulatory Approvals. The authorization for issuance of debt,
fiscal year spending, multi-fiscal year financial obligations,revenue collections and other
constitutional matters requiring voter approval for purposes of this Agreement were approved at
elections held for the Districts on November 2, 2004, in accordance with law and pursuant to due
notice. To the extent additional or new voter authorization is needed to realize the intent of this
Agreement or to comply with law, the parties agree to submit the necessary questions to their
respective electorates.
The Districts anticipated at the time of preparation of this Agreement that changes or
modifications to this Agreement might be necessary to comply with regulatory requirements of
the State Securities Commission(or other regulatory body with jurisdiction) for the State of
Colorado and/or other applicable regulatory authorities. This Agreement maybe modified, and
shall be deemed to be modified, as necessary to obtain the initial or continuing authorization of
any applicable regulatory authorities.
2. Shared Facilities. The Districts hereby acknowledge the shared benefits of the
Shared Facilities and agree that the costs of the Shared Facilities shall be allocated according to
the percentages set forth in the Notes to Exhibit A, attached hereto and incorporated herein by
this reference ("Cost Allocation Schedule") and shall be paid for by each District in accordance
with this Agreement and the respective Project Agreement (both as deemed below), if any. The
Parties acknowledge that it may be necessary for one or more Districts to proceed with the
construction and financing of all or a portion of the Shared Facilities at a point in time when the
other Districts are unable to fund their shares. It is the intention of the Districts,by entering into
this Agreement, to bind themselves concerning the funding of the Shared Facilities so that the
cost of the public improvements for the Development will be shared equitably by the users of
— such improvements. In addition, there may be instances where none of the Districts has revenue
sufficient to construct and install a Project. In such an instance, the Developer may fund,
construct and install the Project and the corresponding Project Agreement(both as defined
below)may(to the extent so required by the Developer)provide that one or more of such
Districts will obligate themselves to repay moneys so advanced by the Developer by issuing
Developer Bonds, as defined in their respective Service Plans, and subject to the limitations and
— conditions contained in their respective Service Plans.
3. Development Commencement and Cost Sharing
(a) Development Commencement Pursuant to Project Agreements. Upon a
determination by one or more of the Districts (each an "Initiating District") that construction and
installation of all or a portion of the Shared Facilities (the"Project") is necessary to support
development within its or their boundaries, the Initiating District(s) shall commence negotiations
with the Developer, if applicable, and the other District(s)which will benefit from such Shared
Facilities as shown in the Cost Allocation Schedule, for an agreement setting forth the following:
(1)a description of the Project; (2) designation of a project manager to coordinate and oversee
the construction and installation of the Project as set forth in Section 3(b)(i) below("Project
Manager"); (3) designation of an engineer to design the Project ("Design Engineer"); (4) each
1000u370.Doc v:41 2
- District's share of the costs of the Project; (5) a requirement that each of the benefited District(s)
not providing any of the construction funding sign a promissory note evidencing such District's
obligation to reimburse the District(s) providing construction funding of the Project its or their
respective share(s) of the costs of the Project ("Promissory Note"), substantially in the form of
Exhibit B attached hereto and incorporated herein by this reference (or, alternatively, a District
may obtain funding from the Developer for its share of the Project costs and may, to the extent
so required by the Developer, commit to repay moneys so advanced by the Developer by issuing
Developer Bonds, as defined in its respective Service Plan, and subject to the limitations and
conditions contained in its respective Service Plan); and(6) a requirement that each District
providing a Promissory Note or issuing Developer Bonds also provide an opinion from
nationally recognized bond counsel that the promissory note or Developer Bonds constitute an
enforceable debt or multiple-fiscal-year obligation ("Project Agreement(s)"). Each of the
Districts that is a party to a Project Agreement shall be a"Participating District."
(b) Development Commencement in the Absence of a Project Agreement. If
after thirty(30) days (or such greater number of days as is mutually agreed upon by the parties to
the Project Agreement(s)) of good faith negotiation("Good Faith Negotiation Period"),the
Developer, if applicable, and the Districts are unable to reach agreement upon the terms of a
Project Agreement, the Initiating District(s) shall give written notice to the other District(s)that
construction and installation of all or a portion of the Shared Facilities is necessary to support
development within its or their boundaries. The District(s)receiving such notice shall be bound
by the cost recovery provisions set forth in Section 3(b)(vi) below (in which event such
District(s) shall be a Non-Participating District(s)) and the Initiating Districts shall be
Participating Districts.
(i) Designation of Project Managers. The Participating Districts shall
mutually cooperate to designate a Project Manager. If the Developer, if applicable, and the
Participating Districts are not able to agree on the Project Manager within the Good Faith
Negotiation Period described in Section 3(b) above, then the Project Manager shall be
designated by the Participating District with the largest share of the costs of the Project or by the
Developer if no District is capable of funding its share of the Project. Project management fees
for construction and installation of the Project are set forth and included within the Cost
Allocation Schedule. The Project Manager shall: (i) obtain all proposals and agreements for
engineering, soils testing and other professional services required for the Project; (ii) obtain and
file all service agreements and appropriate insurance certificates; (iii) advertise and publish for
public bidding(if applicable), coordinate all pre-bid conferences,bid openings, contract awards,
bonds and sureties,notices, agreements,pre-construction meetings and project schedules; (iv)
track all construction contracts and agreements for performance and services to include testing,
surveying, construction staking and other miscellaneous services, including review of, execution
of and monitoring of work orders and/or purchase orders; (v)negotiate any and all change orders
as required by the Participating Districts and review contract status monthly or as otherwise
required by the Participating Districts; (vi)provide construction management and superintendent
services; (vii) obtain all certifications of substantial and final completion, inspections by the
Town, coordinate remedial construction, expedite the processes for conditional and final
acceptance of the applicable improvements including the release of any retained funds; (viii)
keep and maintain all records for delivery to the Participating Districts upon completion of the
)00013370.DOC v:4) 3
Project; and (ix) determine the Project Share (defined below) of each District and the Adjusted
Project Share(defined below) of each Participating District in accordance with the following:
The Project Manager shall utilize the Cost Allocation Schedule to determine each
District's share of the costs of each Project. The Non-Participating District(s)' share shall be
allocated to the Participating Districts based upon the allocation of the total costs. FOR
EXAMPLE: if the projected Project costs are$500,000 and the Cost Allocation Schedule
indicates the following allocations for the designated project: District No. 1 - 50% or $250,000;
District No. 2-25% or$125,000; and District No. 3 - 25%or$125,000. These allocations shall
be referred to herein as each District's "Project Share." Assuming that District No. 1 and District
No. 2 are the only Participating Districts, District No. l's and District No. 2's Adjusted Project
Shares (defined below) shall be calculated as follows: Participating District's Project Share +
— [Participating District's Project Share/Total of Participating Districts'Project Shares x each
Non-Participating District's Project Share] (for District No. 1: 50%+ [(50%/75%x 25%) =
16.67%] =66.67% or $83,750); (for District No. 2: 25%+ [(25%/75%x 25%) = 8.33%] =
33.33% or$41,250). The adjusted shares shall be referred to herein as each Participating
District's"Adjusted Project Share." In accordance with Section 4 herein, District No. 3 will
have an obligation to reimburse District No. 1 for 16.67% of the costs of the Project or$83,750
and an obligation to reimburse District No. 2 for 8.33% of the costs of the Project or $41,250.
The Project Manager shall note the Non-Participating District's reimbursement obligation on the
Cost Recovery Schedule set forth in Exhibit C attached hereto and incorporated herein by this
reference.
(ii) Design Engineering. Upon designation of the Project Manager,
the Districts, in consultation with the Project Manager shall select an engineer to design the
Project. Fees of the design engineer for the Project are included in the Cost Allocation Schedule.
Design for the Project shall comply with all applicable federal, state and local statutes, rules,
ordinances and construction standards, specifically including those of the Town. Upon
completion of the design for the Project, the same shall be delivered to the Non-Participating
Districts for review and comment. The Non-Participating Districts shall have no right to object
to the design so long as the same conforms with Town standards,but shall have the right to
request upgrades or modifications to the design,provided that such modifications or upgrades,
inclusive of increased design and construction costs, shall be borne solely by the requesting Non-
Participating District and shall be funded upon initial funding of the Construction Escrow in
— accordance with Subsection(v)below.
(iii) Design Escrows. Simultaneously with authorizing the Project
Manager to proceed with the design phase, the Participating Districts shall fund the estimated
design and related project management costs in an interest-bearing escrow("Design Escrow") in
accordance with their respective Adjusted Project Share. The Design Escrow shall be deposited
with Land Title Guarantee Company(the"Escrow Agent")pursuant to an escrow agreement
("Design Escrow Agreement") for the purpose of funding the required project management,
engineering and design services for the Project. The Project Manager shall make all periodic
— withdrawals and payments from the Design Escrow and shall provide the Participating Districts
with a monthly accounting of active contracts,payments and the balance of funds remaining in
the Design Escrow. Funding shortfalls shall be funded by the Participating Districts, from time
to time, on a proportional basis in accordance with their respective funding obligations. The
(OM 3370.DOC v:4) 4
Project Manager shall promptly reconcile the Design Escrow at the end of the Project and any
excess funds remaining in the Design Escrow shall promptly be proportionately refunded to the
Participating Districts.
(iv) Bidding, Construction Contracts. Promptly upon completion of the
design for the Project, the Project Manager shall publicly bid the Project pursuant to applicable
law. Drafts of the proposed construction contract(s) shall be transmitted to the Non-Participating
Districts for review and comment; provided that, in the event of any controversy or disagreement
regarding the terms or conditions of the construction contract(s), the determination of the Project
— Manager shall be dispositive. The construction contract(s) for the Project shall comply with all
applicable federal, state, and local statutes, rules, regulations and ordinances, specifically
including the bidding requirements of state statutes, and any requirements of the Town.
(v) Construction Escrows. With respect to each Project,promptly
upon receipt of bids for each applicable construction project by the Project Manager and prior to
the award of a contract for any such Project, the Participating Districts shall fund an interest-
bearing escrow("Construction Escrow")with the estimated construction cost in accordance with
their respective Adjusted Project Share. The Construction Escrow shall be deposited with the
_ Escrow Agent pursuant to an escrow agreement("Construction Escrow Agreement") for the
purpose of funding the construction costs for such projects. The Project Manager shall make all
periodic withdrawals and payments from the Construction Escrow and shall provide the
Participating Districts with a monthly accounting of active contracts, payments, retainage and the
balance of funds remaining in the Construction Escrow. The Participating Districts shall
mutually cooperate to review and agree upon any change orders, amendments to contracts and/or
amendments to project budgets as may be suggested by the Project Manager or deemed
necessary by the Participating Districts. Funding shortfalls shall be funded by the Participating
Districts, from time to time, on a proportional basis in accordance with their respective funding
obligations. The Project Manager shall promptly reconcile the Construction Escrow at the end of
each respective project and any excess funds remaining in the Construction Escrow designated
for such project shall promptly be proportionately refunded to the Participating Districts. Upon
reconciliation, the Project Manager shall submit to the Non-Participating District(s) a final
allocation of all costs related to the Project, including the design, engineering and project
management costs, and a calculation of the amounts owed by the Non-Participating District(s)to
each of the Participating District(s).
(vi) Cost Recovery. Each of the Districts acknowledges and agrees
that the Shared Facilities will provide a substantial benefit to its residents and users.
Accordingly, with respect to any Project, any District that is a Non-Participating District shall be
bound by the provisions of this Section(3(b)(vi). Upon reconciliation of the costs for each
Project, the Non-Participating District shall be deemed to have incurred a multi-fiscal year
obligation to repay the Participating Districts in accordance with the allocation, plus
interest. The Non-Participating District shall not have the authority to issue general obligation
bonds or any other financial obligations whatsoever until the financial obligation to pay its
Project Share, including interest thereon, is paid in full, except that the Non-Participating District
shall have the authority to issue Developer Bonds or Non-Developer Bonds (as defined in its
respective Service Plan, and subject to the limitations and conditions contained in its Service
Plan) if all or a portion of the proceeds of such Developer Bonds or Non-Developer Bonds are
{00013370.DOC v:4{ 5
allocated and restricted to pay the total Project Share,plus interest for such Non-Participating
District, which obligation shall be verified by District Certificate to the Participating District(s)
executed at the closing of the Developer Bonds or Non-Developer Bonds.
4. Effectuation of Pledge: Appropriation. Except as limited hereunder, the amounts
to be paid hereunder by the Districts to pay each District's share of the Shared Facilities costs are
hereby appropriated for that purpose, and said amounts shall be included in the annual budgets
and the appropriation resolutions or measures to be adopted or passed by the Boards of Directors
of the Districts.
The Districts acknowledge that their funding obligations under this Agreement are
absolute, irrevocable,unconditional, and irrepealable within the meaning of Article XI, Section 6
of the Colorado Constitution. The Districts agree that,notwithstanding any fact, circumstance,
dispute, or any other matter, they will not take or fail to take any action which would delay
payment to the Participating Districts.
5. Representations. In addition to the other representations, warranties, and
covenants made by the Districts herein, the Districts make the following representations,
warranties, and covenants to each other and the Developer:
(a) Each District has the full right, power, and authority to enter into,perform,
and observe this Agreement.
(b) Neither the execution of this Agreement, the consummation of the
transactions contemplated hereunder,nor the compliance with the terms and conditions of this
— Agreement by any District will conflict with or result in a breach of any terms, conditions,or
provisions of, or constitute a default under any agreement, instrument, indenture,judgment,
order, or decree to which any District is a party or by which the District is bound.
(c) This Agreement is the valid and binding obligation of each of the Districts
and is enforceable in accordance with its terms.
(d) The Districts shall keep and perform all of the covenants and agreements
contained herein and, except in the Event of Default (as hereinafter defined)], shall take no
action which could have the effect of rendering this Agreement unenforceable in any manner.
6. Event of Default; Remedies.
(a) Default. The occurrence of any one or more of the following events,
and/or the existence of any one or more of the following conditions shall constitute an event of
default("Event of Default") under this Agreement.
(i) The failure of any District to make any payment when the same
shall become due and payable as provided herein;
(ii) The failure to perform or observe any other covenants, agreements,
or conditions in this Agreement on the part of any District and to cure such failure within thirty
(30) days of receipt or notice from any of the other Districts of such failure, unless such default,
(00013370.DOC v:4) 6
by its nature, cannot be cured within a thirty(30) day period, in which event the defaulting party
shall have an extended period of time to complete the cure, provided that action to cure such
default is commenced within said thirty(30) day period and the defaulting party is diligently
pursuing the cure to completion; or
(iii) The filing of a voluntary petition under federal bankruptcy or
insolvency laws by any District or the appointment of a receiver for any of any District's assets
which is not dismissed within thirty(30) days of such filing or appointment.
(b) Remedies. Upon the occurrence of an Event of Default,the Districts shall
have the following rights and remedies:
(i) The non-defaulting District(s)may ask a court of competent
jurisdiction to enter a writ of mandamus to compel the Board of the defaulting District to
perform its duties under this Agreement, and/or to issue temporary and/or permanent restraining
orders, or orders or specific performance, to compel the defaulting District to perform in
accordance with this Agreement.
(ii) The non-defaulting District(s) may protect and enforce their rights
under this Agreement by such suits, actions, or special proceedings as they shall deem
appropriate, including,without limitation, any proceedings for the specific performance of any
covenant or agreement contained herein, for the enforcement of any other appropriate legal or
equitable remedy, or for the recovery of damages, including attorneys' fees and all other costs
and expenses incurred in enforcing this Agreement.
(iii) In any action brought under this Agreement, the Court shall award
reasonable attorneys' fees and costs to the prevailing party.
(iv) To foreclose any and all liens in the manner specified by law.
7. Assignment. The rights and obligations within this Agreement shall not be
_ assigned nor delegated by any District without the prior written consent of the other Districts and
of the Town. Any purported attempt to assign the rights or delegate the duties herein in violation
of this Section shall be null and void.
8. No Third Party Beneficiaries. It is expressly understood and agreed that
enforcement of the terms and conditions of this Agreement, and all rights of action relating to
such enforcement, shall be strictly reserved to the Districts and nothing contained in this
Agreement shall give or allow any such claim or right of action by any other third party on such
Agreement. It is the express intention of the Districts that any person other than the Parties
receiving services or benefits under this Agreement shall be deemed to be an incidental
beneficiary only. However, the provisions of this Section 8 are subject to the Town's right to
consent to any assignment or delegation as provided under Section 7 hereof.
9. Amendment. This Agreement may be modified or amended, in whole or in part,
only by an agreement in writing duly executed by all of the Districts.
(00013370.DOC v.4} 7
10. Waiver. The waiver of any breach of this Agreement by any District shall not
constitute a continuing waiver or a waiver of any subsequent breach either of the same or another
provision of this Agreement.
11. Notices. Any notices or communications required or permitted by this Agreement
or by law to be served on, given to,or delivered to any of the Districts,by any other District,
shall be in writing and shall be deemed duly served, given, or delivered when personally
delivered to the District to whom it is addressed or in lieu of such personal services, upon receipt
in the United States mail,first-class,postage pre-paid, addressed to:
District No. 1 The Hills Metropolitan District No. 1
District No. 2 The Hills Metropolitan District No. 2
District No. 3 The Hills Metropolitan District No. 3
With a copy to: Darlene Sisneros
McGeady Sisneros, P.C.
1675 Broadway,Suite 2100
Denver, CO 80202
Any District may change its address for the purpose of this Section by giving written
notice of such change to the other Districts in the manner provided in this Section.
12. Entire Agreement Relationship to Service Plans and Town IGA; Other Rights
and Obligations to Construct Improvements. This Agreement constitutes the entire agreement
between the Districts relating to the costs of Shared Facilities and sets forth the rights, duties and
obligations of each District to the other as of this date.
Notwithstanding the foregoing, and notwithstanding any other provisions of this
Agreement,in the event of any conflict or inconsistency between any provision of this
Agreement and any provision of the Service Plans or the Intergovernmental Agreements between
the Town and each of the Districts(collectively,the"Town IGAs"),the provisions of the
applicable Service Plan or Town IGA, as the case may be, shall be controlling. Without limiting
the generality of the immediately preceding sentence:
(a) All financial obligations of any District contemplated by this Agreement
shall constitute"Cost-Sharing Obligations" as defined and provided in the Service Plans; shall be
subject to all applicable restrictions, conditions and limitations set forth in the Service Plans; and,
{00013370.DOC v:4} 8
as to all shared sources of security, shall be subordinated to all Non-Developer Bonds and
superior to all Developer Bonds of that District; and
(b) The Districts and the Developer acknowledge the provisions of Article VI
of the Service Plans and further acknowledge the Developer's overriding obligations with respect
to public improvements as referenced in said Article VI. Nothing in this Agreement shall be
construed to relieve or substitute for Developer, landowner or subdivider obligations to construct
public improvements for the Development or to provide letters of credit to assure completion
thereof pursuant to Town ordinances,resolutions,rules,-regulations and policies and annexation,
subdivision and other applicable agreements. Nothing in this Agreement shall be construed to
prohibit the Developer or any District from electing to independently fund and construct any
public improvement (consistent with applicable provisions of the Service Plan, the Town IGA,
and other Town agreements,ordinances, resolutions, rules,regulations and policies),including
any of the Shared Facilities,without invoking the provisions of this Agreement.
13. Severability. If any provision of this Agreement is determined to be
unenforceable or invalid,the unenforceable or invalid part shall be deemed severed from this
Agreement, and the remaining portions of this Agreement shall be carried out with the same
force as if the severed portions had not been part of this Agreement.
14. Controlling Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, and any disputes hereunder shall be tried in
the State of Colorado.
15. No Waiver. No waiver of any of the provisions of this Agreement shall be
deemed to constitute a waiver of any other provisions of this Agreement,nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided herein nor shall the waiver of
any default hereunder be deemed a waiver of any subsequent default hereunder.
THE HILLS METROPOLITAN DISTRICT NO. 1, a quasi-
municipal corporation and political subdivision of the State of
Colorado
By:
ATTEST:
By.
, Secretary
grow 3370.DOC v:4) 9
[SIGNATURE PAGE FOR INTERGOVERNMENTAL AGREEMENT]
THE HILLS METROPOLITAN DISTRICT NO. 2, a quasi-
- municipal corporation and political subdivision of the State of
Colorado
By:
ATTEST:
By:
Secretary
}00013370.DOC v:4} 10
[SIGNATURE PAGE FOR INTERGOVERNMENTAL AGREEMENT]
THE HILLS METROPOLITAN DISTRICT NO. 3, a quasi-
- municipal corporation and political subdivision of the State of
Colorado
By:
ATTEST:
By:
, Secretary
1O0013370.DOC v:4) 11
[SIGNATURE PAGE FOR INTERGOVERNMENTAL AGREEMENT]
SADDLEBACK HILLS LAKE & CONSERVANCY
LIMITED LIABILITY COMPANY
By:
ATTEST:
By:
, Secretary
{00013370.DOC r.4) 12
[SIGNATURE PAGE FOR INTERGOVERNMENTAL AGREEMENT]
SADDLEBACK HILLS LAKE AND CONSERVANCY#2
LLC
By:
ATTEST:
By:
, Secretary
{00013370.DOC r4E 13
{00013370.DOC v:4} 14
EXHIBIT A
("Cost Allocation Schedule")
)00013370.DOC v:4) 15
1 I 1 1 l I I I 1 1 I I I I I I I ) 1
SADDLEBACK HILLS LAKE AIb OOIMFJVAICY' SADDLEBACK ISLES LAKE AMCOIISERVANCY
METRO
ECT COSTSMPA OF ANTICIPATED FJWINESATI ESTIMATE OP ANTICIPATED SADDLEBACK HILLS LAKE AHDCDIIAEPVANCY '
NEIRO DISTRICT SI METRO DISTRICT 0088 /y OETSO DISTRICT F Y OF/1HFICIPATID •
LOTS TIE 12.70% Ism TSS Lai. LISTS COSTS b
vALAOE11,2,4n Lons eMI uN% 1120 LETS
Ys-AE®;1r1aAFn
. • STREET EXCAVATION OFF ERE TOTAL COST STREET EXCAVATION OPT SITE
• TOTALC09T STREET CXCAVATON OFF SITE
/5a5 also - • TOTAL PoDT
WATER TOTN.OOST WATER TOTAAL&boar
FIRIMI./0
L r WATER
-
STORM DRAINAGE F1.102,IlLTy T1,1fp,gEl2 TII.W TOTAL
COST
TOTAL Cost STORM DRAINAGE• TOTAL COST STORM DRAINAGE
• OcI�, TOTAL COST
GASA51LpnOCATION FOR PUBLICINPRoyMENT6 TOTALCOSTW GAWOIL RELOCATION FOR PUBLIC IMPROVMIRt1B SOTAL SIMCOST�NAYJILPFLOCATIOH FOR PUSUC1NPROVMEWIS
OTALCOST
sTPEET6/SAFETY PROTECTION II,W'.g1AD Ey0.D501ro IIFB.BPoN
TOTAL COST STREETS78AFElY PROTECTON TOTAL COST STREETS/SAFETY PROtECTION
TLu4bIRe - TOTAL COST
PARKS AAECRSATIOH • T
TOTAL COST PARKS A RECREATION LsALCOSLSD TT26.y001D
TOTAL COST PARKER RECREATION
•
TOTAL COOT
PROFESSIONAL FEES TAL f.l1 NALco LEl CO TNa2
TOTAL COST PROFESSIONAL FEET TOTAL COST PROFESSIONAL FEES
TOTAL COST
h01•Do.b' ISA,W29a GENERAL PROJECT COSTS SUMMARY TI21,505.2D
Op2gALPgO]Eti MESS BL
ITEM GENERA PROJECT COSTS SI
TOTAL CosTimme ITEM 1CTAL coST
STREET IXCAYATbNOFF SRB GENERAL
ITEM '
WATER simmer STATER EXCAVATION OFF 655E F110,L12.S0 STREET EXCAVATION OFF SITE IIEBLAO
sTREETSARAOE h.Tq,1nos STOWATRMR 11,1F2,E1202 WATER F»1,511.00
STREETS ANC SAFETY PROTECTION TIAITLISiDO STREESR NEATNAGEETY 1/(100Aa STORM DRAINAGE T69.99i.IR
PARKS ARFCPFATION FS,S1,,",If PMTKIa EC OMCATI1 FOP PUBLIC
FI,TJOAST T STREET//MOD SAFETY PROTECTION /9PS,2LM.52
CAS A OIL RELOCATION FOR PIIELIC IMPROVENVSTB fv,q>,Seis PMKBARELPEATON F1,100A/T-9T PARKS IL RELOCATION
FOR PUBLIC IMPROVEMENTS
COST:EHi9 1164,0.7.01
ESTIMATED TOTAL COHBTPUCTION COST; MAGAAI AI ESTIMATED TOTAL CONSTRUCTION COST: 1a52ASita9 ESTSATEb TOTALCONSTRUcnON '9LiESGET,i2
PROFESSIONAAFEES 1TI11,75930 PROFESSIONAL sari
PROJECT MANAGEMENT 5%OF CONSTRUCTION COSTS • hq.SSxls PROFESSIONAL FEES po,Bo9.I0
cON[BESTIMATEDA 1,ST,221.T5 PROJECT IUICEHIES 15%NT e%OF COFC2TRnCTWNCO5'TS t(1,(.tl PROJECT MANAGEMENT 1%OF CONETRUCTONCOBTS FIO9,9Tl.IT
p,ggR0af CONTINGENCIES 11a2I.T1f.E CONTBIOEIICIG9 IS%FSIIMAi®AOORIONALCOST91 (1,1t4f91af T0n11/AS�AOORb1ALCO6TA 1]21.S35.1a
fy2TAIMT.B4 ESTS.IATEC ADDITIONAL COSTS: Ts6A0S2f6
DISTRICT/10031 ESTIMATE; B21,1sf,1TILTS DISTRICT IS C0STESI1MATEI• SIAenpxut DISTRICT Si COST ESTIMATe 1L)52,Afia(
E30,805,150,23
Construction costs for District No. 1 improvements Construction costs for District No.2 improvements Construction costs for District No.3 improvements
are forecasted to total$21,154,778 and are are forecasted to total$11,099,525 and are are forecast to total$2,752,470 and are forecasted
forecasted to be paid from 2004 through 2006. forecasted to be paid from 2004 through 2008. The to be paid in 2007.
District No. 1 will seek reimbursement of 45%of District will seek reimbursement of 30%of such
such costs from other districts which benefit from costs from other districts which benefit from the In addition,District No.3 is forecasted to pay 30%
the improvements as follows: improvements as follows: of the cost of regional improvements incurred by
other districts as follows:
The Hills Metropolitan District#2—15%or The Hills Metropolitan District#3—30%or
$3,173,217 in 2005 $3,329,858 in 2006 The Hills Metropolitan District#1—30%or
$6,346,433 in 2006
The Hills Metropolitan District#3—30%or In addition,District No.2 is forecasted to pay 15%
$6,346,433 in 2006 of the cost of regional improvements incurred by The Hills Metropolitan District#2—30%or
other districts as follows: $3,329,858 in 2006
The Hills MetropolitanDistrict#1—15%or
$3,173,217 in 2005
EXHIBIT B
("Promissory Note")
[Form of Note]
PROMISSORY NOTE
, 200
For value received, THE HILLS METROPOLITAN DISTRICT NO. , a quasi-
municipal corporation and political subdivision of the State of Colorado ("Maker"), promises to
pay to the order of THE HILLS METROPOLITAN DISTRICT NO. ("Holder"), the
principal sum of Dollars ($ ) (the "Principal Sum"),
together with interest thereon at the rate of percent( %) per annum.
No payments of principal or accrued interest shall be payable until the date Maker issues
(Developer Bonds or Non-Developer Bonds (as defined in the Maker's Service Plan, dated
, 200 ) ("Payment Date"); except that, if not sooner paid,the
outstanding principal balance and all accrued interest thereon shall be due and payable in full on
or before ("Maturity Date"). Immediately upon the Payment
Date or Maturity Date,the outstanding principal balance and all accrued interest thereon shall be
due and payable in full. Interest accrued hereunder through the date of payment in full hereof
shall be calculated on the basis of a 360-day year of twelve 30-day months.
Payment of principal and interest due and payable hereunder shall be made to Holder at
such place as Holder shall have designated to Maker in writing.
This Note evidences certain obligations of The Hills Metropolitan District No. to
The Hills Metropolitan District No._arising under that certain Intergovernmental Cost
Sharing and Recovery Agreement between The Hills Metropolitan District No. 1, The Hills
Metropolitan District No. 2 and The Hills Metropolitan District No. 3, dated
("IGA"). Reference is made to the IGA for the rights and obligations of
This Note may be prepaid, in whole or in part, at any time without penalty and without
consent of Holder.
Time is of the essence hereof.
This Note shall be construed and enforced in accordance with the laws of the State of
Colorado.
[The Maker may issue bonds,notes, debentures or other multiple fiscal year fmancial
obligations for which the obligation to repay is on a parity with the obligation evidenced by this
{00013370.DOC v:4{ 16
- Note("Parity Bonds") only if upon issuance of the Parity Bonds the Debt to Assessed Ratio' of
the Maker will be fifty percent (50%)or less. Subject to applicable requirements of its Service
Plan, the Maker may issue junior or subordinate financial obligations at any time.]
IN WITNESS WHEREOF, Maker has caused this instrument to be executed as of the day
and year first above written.
MAKER
THE HILLS METROPOLITAN DISTRICT NO.
President and Chairman
(SEAL)
ATTEST
Secretary
THIS NOTE HAS BEEN ISSUED TO THE HILLS METROPOLITAN DISTRICT NO.
AS HOLDER, IS TO BE HELD SOLELY BY THE HILLS METROPOLITAN
DISTRICT NO. ,AND IS NOT TO BE TRANSFERRED,ASSIGNED,
PARTICIPATED OR USED AS SECURITY FOR ANY BORROWING
[End of Form of Note]
Debt to Assessed Ratio is defined as the ratio derived by dividing the then-outstanding
— principal amount of
all District debt(as defined in the Service Plan),including the debt proposed to be issued,by the assessed valuation
of the District,as such assessed valuation has been most recently certified by the county treasurer.
t00013370.DOC v:4} 17
EXHIBIT C
("Cost Recovery Schedule")
DATE PROJECT PROJECT SHARES
Dist.No. 1 Dist. No. 2 Dist. No. 3
{0001337O.DOC v:4) 18
Y '•
EXHIBIT Q
Mill Levies of Overlapping Entities
Mb HILLS METROPOLITAN DISTRICT NO.2
a OVERLAPPING MILL LEVY STATEMENT
JUNE 22, 2004
TOTAL OVERLAPPING MILL LEVY
Vacant Land
Taxing Entity 2003 Mill Levy
Weld County 21.474
School District RE 1J 40.374
Northern Colorado Water Conservancy District 1.000
Central Weld County Water District 0.000
Town of Firestone 7.419
Frederick Area Fire Protection District 9.560
Weld County Library 3.249
Tri Area Ambulance District 4.543
— The Hills Metropolitan District No.2 40.000
TOTAL 127.619
y _SI
I
(0002os4s.00c v:l
EXHIBIT R
Resolution of Approval
i
I
_
I
v
I
E
j
_ 1
_.
(00020848.DOC v:1)
TOWN OF FIRESTONE, COUNTY OF WELD, STATE OF COLORADO
IN RE THE ORGANIZATION OF THE HILLS METROPOLITAN DISTRICTS NOS. 1, 2
AND 3, IN THE TOWN OF FIRESTONE, COUNTY OF WELD, STATE OF COLORADO
RESOLUTION NO. 04-40
RESOLUTION OF APPROVAL
WHEREAS, pursuant to the provisions of Title 32, Article 1, Part 2, C.R.S. as amended,
the Board of Trustees of the Town of Firestone, County of Weld, State of Colorado, following
due notice, held a public hearing on the proposed Service Plans for The Hills Metropolitan
Districts, Nos. 1, 2 and 3, which hearing was opened on August 26, 2004 and concluded on
September 16, 2004; and
WHEREAS, the Board of Trustees 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 for The Hills Metropolitan Districts, Nos. 1, 2 and 3, should be approved
by the Board of Trustees, subject to certain conditions set forth below, in accordance with
Section 32-1-204.5(1)(c), C.R.S.
THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN
OF FIRESTONE, COLORADO:
Section 1. That the Board of Trustees, as the governing body of the Town of Firestone,
Colorado, does hereby determine, based on representations by and on behalf of Saddleback Hills
Lake & Conservancy Limited Liability Company, a Colorado limited liability company, and
Saddleback Hills Lake and Conservancy #2 LLC, a Colorado limited liability company
(collectively the "Developers"), that all of the requirements of Title 32, Article 1, Part 2, C.R.S.,
as amended, relating to the filing of the proposed Service Plans for The Hills Metropolitan
Districts,Nos. 1, 2 and 3 have been fulfilled and that notice of the hearing was given in the time
and manner required by the Town.
Section 2. That, based on representations by and on behalf of the Developers, the Board
of Trustees of the Town of Firestone, Colorado, has jurisdiction over the subject matter of these
proposed special districts pursuant to Title 32, Article 1, part 2, C.R.S., as amended.
Section 3. That, pursuant to Section 32-1-204.5, C.R.S., Section 32-1-202(2), C.R.S.,
and Section 32-1-203(2), C.R.S., the Board of Trustees of the Town of Firestone, Colorado, does
hereby find and determine, based on the Service Plans and other evidence presented by and on
behalf of the Developers, that:
1
(a) There is sufficient existing and projected need for organized service in the
areas to be serviced by the proposed Districts;
(b) The existing service in the areas to be served by the proposed Districts is
inadequate for present and projected needs;
(c) The proposed special districts are capable of providing economical and
sufficient service to the areas within their proposed boundaries;
(d) The area to be included in each of the proposed Districts has, or will have,
the financial ability to discharge the proposed indebtedness on a
reasonable basis; and
(e) The creation of the proposed Districts will be in the best interests of the
areas proposed to be served.
Section 4. That pursuant to Section 32-1-204.5(1)(c), C.R.S., the Board of Trustees
hereby imposes the following conditions upon its approval of the Service Plans:
(a) The Developers agree that the Town 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 Section 32-1-304,
C.RS.).
(b) The Developers agree that, prior to the hearing date set by the District Court
of Weld County pursuant to Section 32-1-304, C.R.S., all fees and expenses which
have been submitted to the Developers for payment by or on behalf of the Town 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
Section 32-1-304, C.R.S., the Districts shall fully comply with the provisions of
Section 32-1-107(3), C.R.S. with respect to the overlapping of service areas. Each
District's authorization to provide services or facilities within any overlapping area
is expressly conditioned upon the District first obtaining the written consent of each
and every district whose service area is so overlapped.
(d) Prior to the Mayor's execution of this Resolution, the fully and properly
executed originals of the following documents will be submitted for each of the
three proposed Districts: the engineer's statement of reasonableness of capital costs;
accountant's letters and forecasts; letter in support of market projections and
absorption rates; underwriter's letter; legal counsel letters; bond counsel letter, and
Developers' indemnity letters that are required under the Service Plans and set forth
in Exhibits C,H,J,K, L, and S to the Service Plans,shall be provided to the Town.
(e) At its organizational meeting, each of the Districts shall execute its
respective District indemnity letters, the intergovernmental agreement with the
2
Town ("Town IGA") and the intergovernmental cost sharing and recovery
agreement("District IGA") that are required under the Service Plans and set forth in
Exhibits L, P and O to the Service Plans (and, in the case of the District IGA, in the
form approved by the Town), and shall provide the fully executed originals of the
District indemnity letters and the Town IGA, and a copy of the fully executed
District IGA,to the Town.
If any of the above-stated conditions (a) through (d) are not met, the Town 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 Developers have represented that they
will not oppose such motion. Further, if any of the above-stated conditions (a) through (e) are
not met, the Town may pursue all legal and equitable remedies available to it for failure of
compliance with such conditions of approval.
Section 5. That the Service Plans of The Hills Metropolitan Districts, Nos. 1, 2 and 3, as
set forth in Exhibit A to this Resolution and dated September 13, 2004, are hereby approved
subject to the conditions stated in Section 4 above, in accordance with Section 32-1-204.5(1)(c),
C.R.S., and subject to the revisions set forth in Exhibit B.
Section 6. That a certified copy of this Resolution be filed in the records of the Town of
Firestone and submitted to the Developers for the purpose of filing in the District Court of Weld
County for further proceedings concerning The Hills Metropolitan Districts,Nos. 1, 2 and 3.
RESOLVED, ADOPTED AND APPROVED this I6 day of September, 2004.
f41t
TOWN OF F NE, COLORADO
.
(SSE L)
t\ATT ST, : Michael P. Simone
eo''• o..... = Mayor
'•Cp W cry zx
y He o d(\
own Clerk
9/17/2004 2:39 PM[sjl[Yirimsonarfevopolitan Disnicts\The HillslApprovalftcsolution(final)
3
CERTIFICATE
I, Judy Hegwood, Town Clerk of the Town of Firestone, Colorado, do hereby
certify that the above and foregoing is a true, correct and complete copy of a resolution adopted
by the Board of Trustees of the Town of Firestone, Colorado, at a public meeting held on the
day of September, 2004.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the Town
of Firestone, Colorado,this day of September, 2004.
(SEAL)
Town Clerk
4
EXHIBIT A
(Copy of Service Plans)
5
EXHIBIT B
REVISIONS TO THE HILLS METROPOLITAN DISTRICT NOS. 1, 2 AND 3
SERVICE PLANS
(Firestone Board of Trustees Meeting, September 16,2004)
DISTRICT NO. 1 SERVICE PLAN:
1. On page 4, last line, delete"It is anticipated that".
2. On page 7, line 3, after"Service Plan" insert"otherwise".
3. On page 7, line 11, after"approved" insert"final".
4. On page 10, line 3, substitute"To the extent" for"If'.
5. On page 10, line 22,insert "prior written"before "approval".
6. On page 11, line 1, after"Section" insert"II.A.5".
7. On page 16, lines 20-21, strike"and District IGA".
8. On page 17, revise the fourth sentence to read in full as follows: "A draft of the
District IGA is set forth in Exhibit P; the final form of the District IGA shall be
subject to review and approval by the Town prior to execution by the Districts."
9. On page 18, line 4, after"Town"insert a comma.
10. On page 18, line 7, substitute"a non-potable raw water irrigation" for"such a".
11. On page 21, line 15, after"repayment of the" insert"District's".
12. On page 22, line 2, change "$3,155,256"to "$3,173,216".
13. On page 22, line 3, after"be applied toward repayment of the"insert "District's".
_ 14. On page 29, strike the last two lines on the page and substitute the following: "except
that (a) for Secured Bonds issued at a variable interest rate for interest periods longer
than weekly, the maximum net effective interest rate shall be twelve percent (12%)
per annum; and (b) for Secured Bonds issued at a variable interest rate for weekly or
shorter interest periods, the maximum net effective interest rate shall be eighteen
percent (18%) per annum. For all Non-Developer Bonds, the maximum discount
shall be four percent(4%)per annum."
15. On page 33, line 14, in caption, after"Debt Service" insert "and Administrative".
— 16. On pages 36 through 38, revise Section V.G. to incorporate the revisions shown in the
redline version attached as Exhibit B-1.
— 17. On page 42, line 6, insert the following after "Improvements": ", including but not
6
_ limited to a detailed report of the status of the Saddleback Park Improvements
completed in the preceding year and planned for the upcoming year and identification
of which entity (District(s) or Developer) has completed or will be completing such
Improvements."
18. On page 49, line 9, after "District IGA" insert "(in the form of the District IGA as
reviewed and approved by the Town)".
19. On Exhibit H, submit revised spreadsheets and notes to correct internal
inconsistencies and errors; such submittal shall be subject to Town review and
approval prior to the hearing date set by the District Court of Weld County pursuant
to Section 32-1-304, C.R.S.
20. In Exhibit O, revise Section 10 of Town IGA to incorporate and reflect redline
changes to Section V.G of Service Plan, as set forth in Exhibit B-1.
DISTRICT NO. 2 SERVICE PLAN:
21. On page 4, last line, delete"It is anticipated that".
22. On page 5, line 15, in caption, add"; Consolidation" to end of caption.
23. On page 7, line 12, after"approved"insert"final".
24. On page 10, line 5, substitute "To the extent" for"If'.
"- 25. On page 11, line 2, insert"prior written" before"approval".
26. On page 11, line 4, after"Section"insert"II.A.5".
27. On pages 16-17, last line of 16 to first line of 17, strike"and District IGA".
28. On page 17, revise the fourth full sentence to read in full as follows: "A draft of the
District IGA is set forth in Exhibit P; the final form of the District IGA shall be
subject to review and approval by the Town prior to execution by the Districts."
29. On page 18, line 4, after"Town"insert a comma.
30. On page 18, line 7, substitute "a non-potable raw water irrigation"for"such a".
31. On page 22, line 19, substitute "Property" for"Development."
32. On page 29, strike lines 3 and 4 on the page and substitute the following: "except that
(a) for Secured Bonds issued at a variable interest rate for interest periods longer than
weekly, the maximum net effective interest rate shall be twelve percent (12%) per
annum; and (b) for Secured Bonds issued at a variable interest rate for weekly or
shorter interest periods, the maximum net effective interest rate shall be eighteen
percent (18%) per annum. For all Non-Developer Bonds, the maximum discount
7
shall be four percent(4%)per annum."
33. On page 32, line 18, in caption, after"Debt Service" insert"and Administrative".
34. On pages 35 through 37, revise Section V.G. to incorporate the revisions shown in the
redline version attached as Exhibit B-1.
35. On page 41, line 8, insert the following after "Improvements": ", including but not
limited to a detailed report of the status of the Saddleback Park Improvements
completed in the preceding year and planned for the upcoming year and identification
of which entity (District(s) or Developer) has completed or will be completing such
Improvements.
36. On page 48, line 13, after "District IGA" insert "(in the form of the District IGA as
reviewed and approved by the Town)".
37. On Exhibit H, submit revised spreadsheets and notes to correct internal
inconsistencies and errors; such submittal shall be subject to Town review and
approval prior to the hearing date set by the District Court of Weld County pursuant
to Section 32-1-304, C.R.S.
38. In Exhibit O, revise Section 10 of Town IGA to incorporate and reflect redline
changes to Section V.G of Service Plan, as set forth in Exhibit B-1.
DISTRICT NO. 3 SERVICE PLAN:
39. On page 4, last line, delete "It is anticipated that".
40. On page 5, line 15, in caption, add"; Consolidation" to end of caption.
41. On page 7, line 12, after"approved"insert"final".
42. On page 10, line 5, substitute"To the extent" for"If'.
43. On page 11, line 2, insert"prior written"before"approval".
44. On page 11, line 4, after"Section" insert"II.A.5".
45. On page 11, line 5, make "Article"plural.
46. On page 11, line 15, delete"s" in `modifications".
47. On page 16, line 8, add following two sentences after"Improvements": "As set forth
in Exhibit C, the estimated cost of the Improvements exceeds the amount of debt
anticipated to be issued in accordance with the Financial Plan. To the extent that the
costs of the Improvements cannot be financed with bond proceeds, the Developer
shall be required to pay such costs, as set forth in Article V."
48. On pages 16, lines 18-19, strike"and District IGA".
8
49. On page 17, revise the third full sentence to read in full as follows: "A draft of the
District IGA is set forth in Exhibit P; the final form of the District IGA shall be
subject to review and approval by the Town prior to execution by the Districts."
50. On page 17, line 20, after"Town"insert a comma.
51. On page 17, line 23, substitute"a non-potable raw water irrigation" for"such a".
52. On page 21, line 16, correct "form"to "from".
53. On page 26, line 5, correct "8,650,000"to "8,865,000".
54. On page 27, revise last two full sentences on such page to reflect fact that Hills No. 3
is a non-residential district, consistent with revised letter required by the Exhibit J
condition below.
55. On page 28, strike last two lines and substitute the following: "except that (a) for
Secured Bonds issued at a variable interest rate for interest periods longer than
weekly, the maximum net effective interest rate shall be twelve percent (12%) per
annum; and (b) for Secured Bonds issued at a variable interest rate for weekly or
shorter interest periods, the maximum net effective interest rate shall be eighteen
percent (18%) per annum. For all Non-Developer Bonds, the maximum discount
shall be four percent(4%)per annum."
56. On page 32, line 14, in caption, after"Debt Service" insert "and Administrative".
57. On pages 35 through 37, revise Section V.G. to incorporate the revisions shown in the
redline version attached as Exhibit B-1; additionally, revise reference to "2005 and
2008" to "2006 and 2009".
58. On page 41, line 6, insert the following after "Improvements": ", including but not
limited to a detailed report of the status of the Saddleback Park Improvements
completed in the preceding year and planned for the upcoming year and identification
of which entity (District(s) or Developer) has completed or will be completing such
Improvements.
59. On page 48, line 9, after "District IGA" insert "(in the form of the District IGA as
reviewed and approved by the Town)".
60. On Exhibit H, submit revised spreadsheets and notes to correct internal
inconsistencies and errors; such submittal shall be subject to Town review and
approval prior to the hearing date set by the District Court of Weld County pursuant
to Section 32-1-304, C.R.S. Additionally, such submittal shall reflect that the 2006
and 2009 debt issues will be limited to "Alternative A".
61. Regarding Exhibit J, provide a supplemental letter regarding criteria used in process
of underwriting bonds for a non-rated commercial metropolitan district, and methods
of evaluation such criteria.
9
62. In Exhibit M, page 2, substitute "three (3.0) mills" for "three and one half (3.5)
mills".
_ 63. In Exhibit O, revise Section 10 of Town IGA to incorporate and reflect redline
changes to Section V.G of Service Plan, as set forth in Exhibit B-1.
SERVICE PLANS FOR ALL DISTRICTS:
64. Insert form of District's Indemnity Letter into Exhibit L.
65. In Exhibit F, replace one-page Saddleback Park Improvements Phasing Plan with
Phasing Plan and Phasing Map attached as Exhibit B-2.
10
EXHIBIT B-1
REVISIONS TO THE HILLS METROPOLITAN DISTRICT NOS.1,2 AND 3
—
SERVICE PLANS
(Firestone Board of Trustees Meeting,September 16,2004)
Redline Revisions to Section V.G of Each Service Plan:
G. Revenue-Sharing Payments to Town for Public Improvements
— I. Except as otherwise expressly provided in Section V.G.2 below, the
District will pay to the Town for deposit into the Town's capital improvements fund twenty-three
percent (23%) of the District's total net bond proceeds derived from the issuance of Non-
I Developer Bonds. Such amount%shall be paid to the Town immediately upon issuance and __--{Deleted:percentage
"' delivery of each such series of Non-Developer Bonds which, according to Exhibit H, is
anticipated to occur in 2005 and 2008. The funds so paid to the Town may be used by the Town
to finance any street, park or recreation capital improvement, or other capital improvement
(either within or outside the boundaries of the District), which improvements the District would
otherwise be empowered to construct, i.e., streets, street lighting, traffic safety controls, water,
sanitary sewer, landscaping, storm drainage or park and recreation improvements and facilities,
any of which improvement shall be of benefit to the Town and District as determined by the
— Board of Trustees.
2. By approving this Service Plan and executing the Town IGA, the Town
expressly agrees that if the Developer and/or the Districts fund the construction of or construct
the Saddleback Park Improvements in accordance with the Phasing Plan,Concept Plan and other
applicable provisions of the Park Agreement,Town IGA and this Service Plan,then the Certified
Construction Costs (as defined below) related to construction of the Saddleback Park __-{Deleted:c
— Improvements shall be applied as a credit toward the Districts' satisfaction of the revenue
sharing obligations set forth herein and in the Town IGA, and the provision set forth above
regarding revenue-sharing amounts,being paid to the Town upon issuance and delivery of each __--_Deleted:percenuga
series of Non-Developer Bonds shall be inapplicable to the extent of such credit.
... At least sixty,00) days prior to Hills No. 3's issuance of any Non-Developer _..-{Deleted:thin),
Bonds, the Districts shall provide the Town with documentation regarding the total costs ' Deleted:3
incurred by the Developer and/or the Districts for construction of the Saddleback Park
— Improvements. including but not limited to architecture and design, engineering, legal fees,
construction management fees, permit fees, surveying expenses, and labor and materials
construction cos ("Certified Construction Costs"), Such documentation shall include an --- Deleted:as certified by an independent
independent engineer's certification of the construction costs and the District's certification that engineer,which costs shah include,but
p not be limited to hard construction costs,
such documents and costs incurred are true and accurate. The Certified Construction Costs shall construction management fees,design
exclude costs for construction of any local or collector streets abutting Saddleback Park fees,engineering ices,legal fees,and
permit costs
(currently denoted as Saddleback Circle and Garland Street on the Concept Plan). The Certified
— Construction Costs may include utility costs only for those utilities that directly serve
Saddleback Park. In the event that the Certified Construction Costs are equal to or exceed 23%
of the aggregate net proceeds (after deduction of reasonable amounts for capitalized interest,
reserve funds an issuance cost*of the Districts' Non-Developer Bonds previously issued and _- -(Deli:. _ j
.--- "{Deleted:,and oder incidental costs 1
1l
to be issued as certified by the Districts' Financial Advisor ("Aggregate Net Non-Developer
Proceeds"), the Districts shall be deemed to be in full compliance with the above-described
Town regional improvement revenue sharing obligation and the Town shall not be entitled nor
shall it seek additional participation from the Districts for regional improvements pursuant to
such obligation unless otherwise provided by mutual written agreement among the Districts and
the Town. In no event shall the calculation of Aggregate Net Non-Developer Proceeds include
Developer Bonds or Refunding Bonds. Alternatively,in the event that the Certified Construction
Costs are less than 23% of the Aggregate Net Non-Developer Proceeds, then, as provided in the
Town ICA and the Hills No. 3 Service Plan Hills No. 3 shall pay the Town an amount equal to
the difference between such 23% of Aggregate Net Non-Developer Proceeds and the Certified
Construction Costs from the proceeds of its first series of Non-Developer Bonds, or,if agreed by
the Town,from its first and second series of Non-Developer Bonds on a pro-rata basis.
Although the Developer and Districts anticipate that Non-Developer Bonds will .-{Deleted:issuing
be issued to fund construction of Improvements or the acquisition of Improvements from the
Developer, they acknowledge the possibility that the Developer or a successor or assignee
thereof may elect to fully fund the Improvements and retain ownership of Developer Bonds for
more than five years thereby delaying the issuance of Non-Developer Bonds. In the event that
the Districts have not issued, Non-Developer Bonds by the date that-is, one (1) year after - Deleted:donotissuc any
completion and, the Town's conditional acceptance of Saddleback Park Improvements, the Deleted:which is determined to be
Districts acknowledge that the Developer 3,obligated pursuant to the Park Agreement to submit - Deleted:faoowhig
the Certified Construction Costs to the Town,and to pay the Town the amount, if any,resulting Deleted;will bn
from deducting the Certified Construction Costs from 23% of the aggregate net proceeds of ail_
- -. Deleted;within sixty(60)days
Developer Bonds issued by any of the Districts, which shall be calculated by deducting the
Del` `h`
reasonable issuance costs from the principal amount of all Developer Bonds issued by the
Districts,which net amount shall be certified to the Town by the Districts'Financial Advisor.
12
_ EXHIBIT B-2
REVISIONS TO THE HILLS METROPOLITAN DISTRICT NOS. 1, 2 AND 3
SERVICE PLANS
(Firestone Board of Trustees Meeting, September 16, 2004)
Revised Phasing Plan and Phasing Map for Exhibit F
(See Following Pages)
13
Saddleback Park Phasing Plan
Page 1: Saddleback Park Improvements", Deadlines and Estimated Costs
PHASE 1
Acres 33.3 Acres
Relocation of oil and gas facilities 3 Oil/gas Wells
Relocation of Sinclair pipeline 1
Overlot grading TBD
_ Seeding TBD
Estimated Cost $ 250,000 Phase 1
Completed Prior to Issuance of 152 Building Permits
PHASE 2
Acres 8.7 Acres
CBT Shares TBD' Shares
_ Soccer Fields 2 Fields
Parking Lot(Central) 1 Parking Lot: 100 spaces
Internal Driveways TBD
10-wide Concrete Trail As Shown
Walkways, Landscaping,Irrigation TBD
Signage TBD
Necessary Utilities TBD
Necessary Grading and Drainage TBD
Restroom TBD
Other Park Equipment TBD
Engineer and Landscape Arch Design TBD
Average Cost Per Acre $ 130,000
Estimated Cost $ 1,131,000 Phase 2
Completed Prior to Issuance of 386 Building Permits
Subtotal $ 1,381,000 Phases 1 and 2
PHASE 3
Acres 12.5 Acres
CBT Shares TBD* Shares
Soccer Fields 1 Field
Softball Fields 1 Field
Parking Lot(Central) 1 Parking Lot: 150 spaces
Internal Driveways TBD
10-wide Concrete Trail As Shown
Walkways, Landscaping, Irrigation TBD
Signage TBD
Necessary Utilities TBD
Necessary Grading and Drainage TBD
Concession,Restroom,etc Building TBD
Other Park Equipment TBD
Engineering&Landscape Arch Design TBD
Average Cost Per Acre $ 130,000
Estimated Cost $ 1,625,000 Phase 3
Completed Prior to Issuance of 722 Total Building Permits
Subtotal $ 3,006,000 Phases 1,2 and 3
Saddleback Park Phasing Plan
Page 2: Saddleback Park Improvements", Deadlines and Estimated Costs
PHASE 4
Acres 12.1 Acres
CBT Shares TBD* Shares
Softball Fields 1 Field
10-wide Concrete Trail TBD
Walkways, Landscaping, Irrigation TBD
Signage TBD
Necessary Utilities TBD
Necessary Grading and Drainage TBD
Other Park Equipment TBD
Engineer&Landscape Arch Design TBD
Average Cost Per Acre $ 130;000
Estimated Cost $ 1,573,000 Phase 4
Completed Prior to Issuance of 1,048 Building Permits
Total Cost $ 4,579,000 Phases 1,2,3 and 4
*Owner shall dedicate water
necessary for irrigation of turf and
landscape areas identified in the final
development plan for the Saddleback
Park Improvements. Dedications shall
be CBT units and shall be at a rate of
2.5 units per acre of irrigated turf and
landscape area(1.0 units per acre for
areas approved for planting of native
grass)unless the Town otherwise
agrees to different rates or alternative
water supplies. Dedications shall be
made at or prior to the time phases are
completed to allow for timely irrigation
of installed turf and landscaping.
** As more specifically set forth in the Park Agreement,the Saddleback Park Improvements and
the Phasing Plan and Concept Plan may be modified through the final plat/final development
process, and the Districts or Developer will construct the Saddleback Park Improvements as set
forth on the final plat and final development plan for Saddleback Park. Further, Saddleback Park
Improvements may be shifted among Phases as identified at the time of subdivision agreement,
provided that the expenditures for each Phase of Saddleback Park Improvements shall be at a
' rate of$130,000 per acre for all acreage within each Phase(other than Phase 1, which shall be in
the amount set forth herein,and shall not exceed the total estimated cost for each such Phase as
set forth herein). (As an example,if all Improvements listed within Phase 3 cannot be completed
at an expenditure rate of$130,000 per acre, then at the time of subdivision agreement,a portion
of the Phase 3 Improvements may be identified for completion as part of Phase 4).
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Page 3: Phasing Plan Map
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Concept Plan NORTH
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EXHIBIT S
Letter from Bond Counsel
(00012883.DOC v:3)
KUTAK ROCK LLP ATLANTA
CHICAGO
SUITE 3100 DES MOINE•
1801 CALIFORNIA STREET FAYETTEVILLE
IRVINE
DENVER. COLORADO 80202-2626 CITY
303-297-2400 LINCOLN
LITTLE MOCK
FACSIMILE 303-292-7799
OKLAHOMA CITY
www.kutakrock.com OMAHA
PASADENA
RICHMOND
September 16, 2004 SCOTTS
WASHINGTON
aroN
The Hills Metropolitan Districts No. 1-3 Town of Firestone
c/o McGeady Sisneros, P.C. P.O. Box 100
1675 Broadway 151 Grant Avenue
Suite 2100 Firestone,CO 80520
Denver,CO 80202
Re: The Hills Metropolitan District
We are writing this letter in our capacity as bond counsel to the proposed The Hills
Metropolitan Districts No. 1-3.
The Service Plans for the Districts provide that the Districts will, under certain
conditions, transfer to the Town a portion of the proceeds of bonds issued by the Districts to be
used to construct certain improvements. We have been asked to confirm that this is an
acceptable use of bond proceeds.
The answer depends on how the Town intends to use the bond proceeds. There are both
state law and federal tax law considerations. The Districts are specifically authorized by statute
to provide public improvements both inside and outside the Districts' boundaries that have been
authorized by the Districts' voters and that benefit the Districts, and to enter into
intergovernmental agreements. The improvements must be of the type the Districts are
otherwise permitted to provide under their Service Plans and organizational documents.
Whether the Districts provide such improvements directly, or do so by contracting with the
Town,does not in our view affect the validity of the bonds.
If the interest on the bonds to be issued is to be exempt from taxation, then there are
additional considerations that include public use and governmental ownership of the
improvements,the timing of expenditure of the proceeds, and investment of the proceeds. These
considerations are generally described in Section 11 of the Intergovernmental Agreement
between the Town and the Districts, the form of which is included as Exhibit 0 to the Service
Plans. As with all bond issues, as a condition of giving our opinion on the bonds,we would need
certification as to the use and investment of all proceeds, including proceeds transferred to the
Town. Such certification would have to be provided by the District and the Town.
02-32261.2
KUTAK ROCK LLP
September 16, 2004
Page 2
I hope this responds to your request. If you have further questions, please feel free to call
me.
Sincerely,
— KUTAK ROCK LLP
Saranne K. Maxwell, Esq.
amma
Mmni
02-182261.2
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