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Home My WebLink About20050835.tiff Miller, Gruber& Rosenbluth, LLC D 700 17th Street, Suite 2200 Denver, Colorado 80202 THE SPRINGS METROPOLITAN DISTRICT SERVICE PLAN TOWN OF FIRESTONE,COLORADO FINAL OCTOBER 7, 2005 I I -Q 17-C (`C 0 A Cz-vr•) 2005-0835 TABLE OF CONTENTS I. Introduction 1 II. Purpose of the Proposed District 4 III. Boundaries, Population &Valuation 5 IV. Description of Proposed Facilities 7 a. Type of Improvements 7 b. Description of Existing Conditions 9 c. Anticipated Development 9 d. Public Improvement Schedule 9 e. Town Construction Standards 10 f. Limitation on Eminent Domain 10 g. Dedication of Improvements to the Town 11 h. Ownership and Operation of Facilities by the District 12 i. Acquisition of Land for Public Improvements 13 — j. Services to be Provided by other Governmental Entities 13 k. Integration 14 V. Financial Plan 14 a. General 15 b. Debt Issuance 17 c. Required Transfers of Bond Proceeds to Town 21 d. Other Financial Restrictions, Limitations and Requirements 23 '- e. Limited Mill Levy 25 f. Investor Suitability 26 g. Refunding Bonds 26 h. Construction Financing Notes Issued to Developer 27 i. Identification of District Revenue 28 j. No Town Security for Debt 29 k. District Operating Expenses 29 1. Quinquennial Review 29 m. Letters 30 VI. Landowners' Obligations as to Public Improvements 30 VII. Annual Report 31 VIII. Dissolution 33 IX. Consolidation 34 X. Elections 34 XI. Indemnities 36 XII. Disclosure and Disclaimer;No Third-Party Rights 36 XIII. Intergovernmental Agreements 37 XIV. Conservation Trust Fund 38 XV. Modification of Service Plan 38 XVI. Failure to Comply with Service Plan 40 XVII. Resolution of Approval 41 XVIII. Severability 41 XIX. Certification 42 TABLE OF EXHIBITS Exhibit A Legal Description Exhibit B Boundary Map Exhibit C Vicinity Map Exhibit D Property Owner's Consent Exhibit E Engineering Estimates and Certificate of Probable Costs Exhibit F Location of Public Improvements Exhibit G Financing Plan; Forecasted Cash Surplus Balances and Cash Receipts and Disbursements; Market Projection Consultant's Analysis; Developer's Letter in Support of Market Projections Exhibit H Underwriter's Letters Exhibit I Legal Counsel Letter Exhibit J Bond Counsel Letter Exhibit K Part I - Developer Indemnity Letter — Part II- District Indemnity Letter Exhibit L Form of Disclosure Notice Exhibit M Form of Town Disclaimer Statement Exhibit N Form of Intergovernmental Agreement between District and Town Exhibit 0 Resolution of Town of Firestone Approving Service Plan 11 THE SPRINGS METROPOLITAN DISTRICT SERVICE PLAN I. INTRODUCTION The District shall be named The Springs Metropolitan District (the "District"). The purpose of the District is to finance certain streets, traffic safety controls, street lighting, water, landscaping, storm sewers and flood and surface drainage and park and recreation improvements for the development to be known as the Vogl North planned unit development (the "Vogl North development"). The developer of the Vogl North development and the petitioner for the formation of the District is Prominence Partners I, LLC, a Colorado limited liability company ("Prominence") (Prominence and any successor developer of the Vogl North development shall be referred to herein as the"Developer"). The District is intended to provide for the financing of public improvements for the Vogl development, but is not intended to be a District with perpetual existence. The District will consist of approximately one hundred fifty-seven (157) acres and no changes in the District's boundaries are anticipated or authorized. The District shall be dissolved when its financial obligations are paid or provided for or when the Town of Firestone, Colorado (the "Town") requests dissolution, provided then-applicable statutory requirements are met, all as further described in this Service Plan, together with all exhibits hereto (the "Service Plan"). Except as expressly provided in this Service Plan, all public improvements and facilities that are financed, constructed, installed or acquired by the District shall be dedicated and conveyed to the Town or its designee and will be operated and maintained by the Town or its designee upon Town acceptance and completion of the District's warranty obligations. The Town may require that specific landscaping improvements that are dedicated and conveyed to 1 the Town be maintained by an owners' association formed for the Vogl North development, for the use and benefit of residents, taxpayers and property owners. The District shall not provide fire protection or emergency services, which fire protection and emergency services shall be _ provided by the Frederick-Firestone Fire Protection District, either directly or, with respect to emergency services, through contract. The District may exercise those powers of a metropolitan district set forth in §§32-1-1001 and -1004, C.R.S. only to implement the provisions of this Service Plan and only to the extent expressly authorized by and in a manner consistent with this Service Plan. All functions, activities, improvements, services and programs of the District are limited to those expressly authorized in this Service Plan, notwithstanding any different, additional or expanded powers or authority that may be granted to the District by any present or future statutory or regulatory provisions. The District is generally located north of Firestone Boulevard and east of Frontier Street. The proposed boundaries of the District are limited to those boundaries described in Exhibit A, attached hereto. This Service Plan has been prepared by the following Developer and participating consultants (the"Organizers"): Developer District Counsel Prominence Partners I Miller, Gruber&Rosenbluth, LLC a Colorado limited liability company Jennifer L. Gruber, Esq. Daniel S. Smith 700 17`h Street, Suite 2200 Post Office Box 870 Denver, Colorado 80202 Firestone, Colorado 80520 (303) 285-5320 (303) 833-5322 (303) 285-5330--facsimile (303) 833-5748—facsimile igruber(uimgrlawfirm.com dan(2I,prominenc edevelopment.com 2 Financial Advisor Engineer Kirkpatrick, Pettis, Smith,Pollan Inc. Joel Seamons, P.E. — Samuel R. Sharp Park Engineering Consultants 1600 Broadway, Suite 1100 420 215t Avenue, Suite 101 Denver, Colorado 80202 Longmont, Colorado 80501 — (303) 764-5768 (303)651-6626 (303) 764-5770—facsimile (303)651-0331—facsimile ssharp(c),,kpsp.com joel(a parkengineering.net Bond Counsel Accountant _ Sherman&Howard Clifton Gunderson, LLP Blake T. Jordan,Esq. Dawn Jones 633 17`s Street, Suite 3000 6399 South Fiddler's Green Circle, Suite 100 Denver, Colorado 80202 Greenwood Village, Colorado 80111 (303)299-8364 (303) 779-5710 (303)298-0940—facsimile (303) 779-0348—facsimile biordan@sah.com dawn.ionesna cliftoncpa.com Market Projection Consultant DRM Real Estate Advisors,LLC Derek R.Maunsell,MAI 4025 Automation Way,Unit F4 Ft. Collins,Colorado 80525 (970)267-2900 (970)530-0799--facsimile derekmaunsell@drrnrealestate.com — Pursuant to the requirements of the Special District Control Act, § 32-1-201, et seq., C.R.S., this Service Plan consists of a financial analysis and an engineering plan showing how ` the proposed facilities and services of The Springs Metropolitan District will be provided and financed. As required by § 31-1-202(2), C.R.S., the following items are included in this Service Plan: — a. A description of the proposed services; b. A financial plan showing how the proposed services are to be financed, including all elements required by § 32-1-202(2)(b), C.R.S.; 3 c. A preliminary engineering or architectural survey showing how the proposed services are to be provided; d. A map of the proposed District's boundaries and an estimate of the population and valuation for assessment of the proposed District; e. A general description of the facilities to be constructed and the standards for construction, including a statement of how the facility and service standards of the proposed District are compatible with facility and service standards of the Town and special districts which are interested parties pursuant to § 32-1-204(1), C.R.S.; f. A general description of the estimated cost of acquiring land, engineering services, legal services, administrative services, initial proposed indebtedness and estimated proposed maximum interest rates and discounts and other major expenses related to the organization and initial operation of the District; and g. A description of any arrangement or proposed agreement with any political subdivision for the performance of any services between the proposed District and such other political subdivision and,if applicable, a form of the agreement. II. PURPOSE OF THE PROPOSED DISTRICT The District will finance the construction of public improvements for the Vogl North development, which improvements shall be constructed to Town standards, warranted by the District, and dedicated and conveyed to the Town or its designee as provided in this Service Plan, or as otherwise required by the Town. The Town may require that specific landscaping improvements that are dedicated and conveyed to the Town be operated and maintained by an owners' association formed for the Vogl North development, for the use and benefit of residents, 4 taxpayers and property owners. The public improvements shall be financed, in part, through the issuance of indebtedness as set forth in Article V, "Financial Plan". Except as specified in or pursuant to this Service Plan, the District shall not construct or own any improvements, shall not provide for any maintenance, repair or operation of any improvements, and shall not perform any services without the consent of the Town as evidenced by a resolution of approval of the Town of Firestone Board of Trustees (the "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 without the prior written consent of the Town. The District shall not provide any services or facilities within any area of the District overlapping with the service area of another district without first obtaining the written consent of each and every district whose service area is so overlapped. The District shall dissolve when its financial obligations are paid or provided for, or otherwise upon request of the Town, subject to then-applicable statutory requirements, all as further provided in Article VIII. III. BOUNDARIES,POPULATION&VALUATION The District consists of approximately one hundred fifty-seven (157) acres located entirely within the boundaries of the Town, as more particularly set forth in the legal description attached hereto as Exhibit A and as shown on the boundary map, attached hereto as Exhibit B, and the vicinity map, attached hereto as Exhibit C. The petitioner, also the Developer of the District property, is the sole owner of all property within the boundaries of the District. A letter 5 from the Developer consenting to the formation of this District is attached hereto as Exhibit D and incorporated herein by this reference. The Vogl North development is being developed for the anticipated construction of three hundred forty-eight (348) single-family homes and fifty-three thousand five hundred seventy- nine (53,579) square feet of commercial property by Prominence. The current population of the District is zero. The daytime population of the District at full build-out is estimated to be one thousand one hundred twenty(1,120)people subject to development approval by the Town. It is acknowledged that Town development standards and requirements may affect the foregoing numbers of anticipated homes and population. The estimated assessed value at full build-out is Ten Million One Hundred Ninety Thousand Six Hundred Eighty-Nine Dollars ($10,190,689.00). The property is currently zoned Planned Unit Development (PUD), for various residential use categories. Additionally, approximately four and twelve one-hundredths-of-one (4.12) acres of the property is currently zoned commercial and approximately five and sixty-two one- hundredths-of-one (5.62) acres of the property is currently zoned for a religious institution. The current assessed value is approximately Thirteen Thousand Five Hundred Sixty Dollars ($13,560.00). The total overlapping mill levy imposed upon the property within the proposed District for tax collection year 2004 was approximately seventy-six and five hundred forty-two one-thousandths-of-one(76.542)mills. 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 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 conditions as the Town may 6 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. IV. DESCRIPTION OF PROPOSED FACILITIES a. Type of Improvements. The District will provide for the financing, construction, acquisition and installation of public improvements consisting of streets, traffic safety control, street lighting, water, landscaping, storm sewers and flood and surface drainage and park and recreation improvements and facilities (as the foregoing terms are used in § 32-1-1004(2), C.R.S. and the sections referenced therein) within the boundaries of the District. The District is also authorized to finance park and recreation or other capital improvements of the Town that are identified by the Town and located outside of the District, as provided in Article V.c.,below. With the exception of those public improvements specifically identified in Exhibit F and authorized by this Service Plan, the District shall not finance, construct, acquire or install any improvements outside the boundaries of the District unless: (1) the Town, by written determination of its Town Engineer, determines that such improvements are necessary to connect service for the District to the facilities of the Town of other entities involved in providing services to the District; and(2) such proposed improvements are approved in advance by resolution of the Board of Trustees. The property within the District will receive water service from the Town and no other source. The District may finance, design, construct and install Town water system 7 improvements and facilities located within the boundaries of the District and may finance, design, construct and install any offsite water system improvements necessary to connect to the Town water system, if such offsite improvements are authorized in the manner set forth in the preceding paragraph. However, all water systems improvements within the District shall be dedicated and conveyed to and owned by the Town upon Town acceptance and completion of the District's warranty obligations. All water rights for water service to the property shall be owned by the Town; the District shall not purchase, own, manage, adjudicate or develop any water rights or water resources. The Organizers of the District have prepared a preliminary engineering report based on the Town's construction standards. The table, attached hereto as Exhibit E, lists all facilities which the District, subject to development approval of the Town, will be authorized to finance, acquire, design, construct, and install, including the costs in current dollars of each, together with an explanation of the methods, basis and/or assumptions used. A letter concerning the reasonableness of the cost estimates, and of the methods, bases and assumptions used, is included in Exhibit E. Subject to the debt limit set forth in Article V.b. of this Service Plan and the requirements of Article V.c., the District will be authorized to fund any combination of the improvements. The combined estimated cost of the improvements is Five Million Five Hundred Forty-Nine Thousand Seven Hundred Eighty-Nine Dollars and One Cent ($5,549,789.01), which exceeds the estimated debt capacity of the District. Funding for improvements not funded by the District shall remain the responsibility of the Developer of the property. The Town is not responsible for assuming any of the costs of the improvements funded by the District or necessary for service to the proposed Vogl North development. 8 Maps showing the locations of the public improvements to be financed by the District are attached as Exhibit F. All water improvements are anticipated to be constructed within street right-of-way, unless otherwise required by the Town. The District shall be authorized to finance, acquire, design, construct and install those types of public improvements and facilities which are authorized under this Article IV and which are generally shown on Exhibit F, subject to the specific final design and approval thereof by the Town. Phasing of construction shall be determined by the District to meet the needs of the residents and taxpayers within its boundaries; provided, however, that improvements shall be installed in compliance with any phasing plan approved for the Vogl North development at the request of the Developer. b. Description of Existing Conditions. The area is predominantly undeveloped. c. Anticipated Development. The Developer anticipates total build-out to occur by 2010, with the construction of eighty-three (83) single-family residences in 2006, eighty-three (83) single-family residences in 2007, eighty-three (83) single-family residences in 2008, eighty-three (83) single-family residences and fifty-three thousand five hundred seventy-nine (53,579) commercial square footage in 2009 and sixteen (16) single-family residences in 2010, subject to final design and development approval by the Town. It is acknowledged by the Developer that Town development standards and requirements may affect the foregoing numbers of anticipated homes and commercial square footage and the foregoing anticipated build-out schedule. d. Public Improvement Schedule. Construction of the public improvements will commence as soon as possible following approval of the Service Plan. The public improvements will be phased to meet the development 9 schedule, and shall be installed in compliance with any phasing plan approved for the Vogl North development. e. Town Construction Standards. All proposed facilities and improvements shall be designed and constructed in accordance with the standards and specifications established by the Town and in effect from time to time, and with applicable standards and specifications of the federal government and State of Colorado. All proposed facilities and improvements shall be compatible with those of the Town. The District and its engineer have designed and shall design the facilities and improvements to meet such standards, specifications and compatibility requirements of the Town. In addition, any water facilities proposed to be financed by the District and dedicated to the Central Weld County Water District shall be designed by the Central Weld County Water District, in accordance with the design standards of that District and the Town. The District will obtain approval of civil engineering plans and permits for construction and installation of facilities improvements from the Town prior to the construction or installation of any facilities or 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. f. 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. No exercise of eminent domain by the District is contemplated or authorized in this Service Plan, and any proposed use thereof shall be considered a material modification of this Service Plan, and shall be subject to the Town's prior written approval. 10 g. Dedication of Improvements to the Town. Except as specifically set forth within Article IV.h. of this Service Plan, the District shall _ dedicate and convey to the Town or its designee, or cause to be dedicated and conveyed to the Town or its designee, all public improvements and facilities, including, but not necessarily limited to, all streets, traffic safety controls, street lighting, sidewalks, water, landscaping, storm sewers and flood and surface drainage and park and recreation improvements and facilities, as well as all rights-of-way, fee interests and easements necessary for access to and operation and maintenance of such improvements and facilities, to the extent such property interests have not been acquired by the Town through the land use approval process. The District shall not operate or maintain any public improvements, except as necessary to comply with its warranty obligations hereunder. The District shall also dedicate and convey to the Town or its designee any other facilities and improvements contemplated in this Service Plan, together with necessary rights-of-way, fee interests and easements. All such improvements, facilities, easements and _ rights-of-way shall be conveyed to the 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 a Conditional Acceptance as set forth below. All improvements, facilities, 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 IV shall be deemed to be an unauthorized material modification of this Service Plan. 11 Once a public improvement to be dedicated to the Town is constructed and installed, the Town shall issue a "Conditional 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 to bring the improvement into compliance with Town standards for the issuance of such a "Conditional Acceptance" letter. The District at its expense shall promptly undertake any necessary corrections. Upon issuance of the "Conditional Acceptance" letter, the public improvements shall be warranted for two (2) calendar years from the date of such "Conditional Acceptance", during which time the District shall 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 public improvements conform to the Town's specifications and standards, or shall issue a letter stating the correction necessary to bring the improvement into compliance with Town standards for the issuance of such a "Final Acceptance" letter. The District at its expense 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 one hundred twenty (120) days after the issuance of the "Final Acceptance" letter), at which time the Town will issue a"Final Acceptance"for all public 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 facilities, and all necessary rights-of-way, fee interests and easements. h. Ownership and Operation of Facilities by the District. The District shall not be authorized to own or operate any improvements or facilities to be provided pursuant to this Service Plan, other than as necessary to permit the financing and construction thereof (including compliance by the District with its warranty obligations as 12 provided in Article IV.g., above), except through approval by the Town by resolution or through an amendment to this Service Plan. Nothing herein shall limit the Town's authority to require that improvements and facilities be operated or maintained by an owners' association formed for the Vogl North development. i. 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 street, traffic safety control, street lighting, water, landscaping, storm sewers and flood and surface drainage, park and recreation improvements being constructed or installed by the District. Such land or interests in land may be acquired by the District by instruments of conveyance and/or plat dedication, in form and substance acceptable to the Town. All 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 IV.g., 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. j. Services to be Provided by other Governmental Entities. The District proposes to finance, construct, acquire and install the public improvements necessary to serve the District's residents and taxpayers, but is not authorized to and shall not provide any ongoing services, programs, functions or activities within the District. The District shall receive fire protection and emergency services from the Frederick-Firestone Fire Protection District, either directly or, with respect to emergency services, through contract. The District 13 shall receive sanitary sewer service from the St. Vrain Sanitation District. The District shall not provide any sanitary sewer services. The District shall obtain a resolution from the Carbon Valley Park and Recreation District consenting to the overlapping boundaries for financing _ purposes only. The District shall not provide ongoing park and recreation services to the District. The District shall obtain a resolution from the Central Weld County Water District consenting to the overlapping boundaries for financing purposes only. The District shall not provide ongoing water services to the District. 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. k. Integration. All facilities and 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 Vogl North development. The District shall obtain from such other serving entities approval of the proposed plans for the facilities and 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. V. FINANCIAL PLAN This Article V describes the nature,basis, method of funding, debt and mill levy limits, and other financial requirements and restrictions for the District's public improvements program and operations. Together with the Financing Plan attached hereto as Exhibit G and further described below, this Article V constitutes the financial plan for the District as required by § 32-1-202(2)(b), 14 C.R.S. Exhibit G, attached hereto and incorporated herein, presents the detailed Financing Plan consisting of the Accountant's Forecasted Cash Surplus Balances and Cash Receipts and Disbursements (including a Summary of Significant Forecast Assumptions), the Market Projection Consultant's Analysis, and the Developer's Letter in Support of the Market Projections. The Financing Plan includes estimated operations and administration costs (including estimated costs of non-capitalized warranty maintenance), proposed indebtedness and estimated interest rates and discounts and other major expenses related to the organization and operation of the District. The Financing Plan projects the issuance of the debt and the anticipated repayment based on the development assumptions (including the market projections and absorption forecasts set forth therein) for property within the boundaries of the District. The Financing Plan demonstrates that, at the projected level of development, and with the projected Developer support, the proposed District has the ability to finance the facilities identified herein, and will be capable of discharging the proposed indebtedness on a reasonable basis. a. General. The provision of improvements and facilities by the proposed District will be financed in part through the issuance of general obligation(limited tax)bonds(the"bonds"), secured by the ad valorem taxing authority of the proposed District and other District revenues, limited as discussed below. For all purposes of this Service Plan, the terms "bonds," "general obligation bonds," "general obligation debt,""general obligation indebtedness,"or any similar term shall mean limited tax general obligation bonds as further provided in V.e.,below. The Financing Plan anticipates the issuance of two (2) series of bonds in 2006 and 2008. The combined total estimated cost of the improvements is Five Million Five Hundred Forty-Nine Thousand Seven Hundred Eighty-Nine Dollars ($5,549,789.00). The District has the capacity to issue general obligation bonds in the 15 aggregate principal amount of approximately Five Million Seven Hundred Fifty Thousand Dollars ($5,750,000.00),projected to yield net bond proceeds of approximately Four Million Eight Hundred Ninety-Eight Thousand One Hundred Sixteen Dollars ($4,898,116.00) (which will be further reduced by the District's contribution of One Million One Hundred Twenty-Six Thousand Five Hundred Sixty-Seven Dollars ($1,126,567.00) to the Town, as provided in Article V.c., below). Accordingly, it is currently anticipated that the bond proceeds will be insufficient to allow for repayment of approximately One Million Seven Hundred Seventy-Eight Thousand Two Hundred Forty Dollars ($1,778,240.00), which will be contributed by the Developer; however, if the financing capability of the District changes and will permit repayment in the future (due to higher than anticipated assessed values, lower interest rates, or other changed circumstances), the District may agree to repay the Developer for unreimbursed public infrastructure costs so long as the District has the capacity to make such payments without exceeding the debt limit or Limited Mill Levy provided in this Service Plan and subject to all other requirements of Article V.h., below. Payments made to the Developer by the District are expected to be made principally from bond proceeds and shall not exceed the amount advanced by the Developer for capital costs. The Accountant's Forecasted Cash Surplus Balance and Cash Receipts and Disbursements in Exhibit G do not include the above-described Developer contribution to the costs of District public improvements. The Developer acknowledges and accepts the risk that, if all or a part of the general obligation bonds proposed to be issued by the District are not issued, because of changes in financial conditions or for any other reason, the Developer may not be paid or reimbursed for the cost of public improvements or other advances to the District. 16 b. Debt Issuance. The District intends to issue two (2) series of general obligation bonds in the aggregate principal amount of approximately Five Million Seven Hundred Fifty Thousand Dollars ($5,750,000.00). The aggregate principal amount of all general obligation bonds and construction financing notes (i.e., all forms of borrowing by the District), throughout the District's existence and regardless of subsequent payments and discharges, shall be limited to a total of Six Million Three Hundred Twenty-Five Thousand Dollars ($6,325,000.00), except to the extent otherwise provided in Article V.g., with respect to refunding bonds, and in Article V.h.,with respect to construction financing notes (i.e.,notes or other financial obligations, if any, issued by the District to the Developer to evidence the District's obligation to repay the Developer's advances for construction costs). The principal amount of the first series of general obligation bonds is estimated at Two Million Two Hundred Seventy-Thousand Dollars ($2,270,000.00) and shall not exceed that amount without the written consent of the Town. Such first series of general obligation bonds is expected to be issued in 2006. The second series of general obligation bonds will be issued in the approximate amount of Three Million Four Hundred Eighty Thousand Dollars "- ($3,480,000.00) and are expected to be issued in 2008. The proceeds of both the first and second series of bonds issued by the District (after deduction of reasonable amounts for capitalized interest, capitalized reserves and issuance costs, and after deduction of the required contributions to the Town pursuant to Article V.c., below) will be immediately deposited into an escrow account held by the bond trustee. For purposes of the following escrow release provisions, a "Development Unit" shall mean either one (1) single- family dwelling unit or one thousand(1,000) square feet of commercial space. 17 The escrow documentation for the first series of bonds shall provide that no bond proceeds are to be released from such escrow account until building permits for at least thirty- eight (38) Development Units, representing a total of at least Nine Hundred Sixty-Three Thousand Three Hundred Dollars ($963,300.00) in projected assessed valuation (as certified to the bond trustee by an authorized officer of the District), have been issued by the Town and all public improvements required to serve the Development Units for which such building permits have been issued have been completed and initially accepted by the Town in accordance with the Town subdivision requirements and subdivision agreement. The requirements of this paragraph are hereinafter referred to as the"Series 1 Escrow Release Threshold." The second series of bonds shall not be issued until all moneys have been released from the escrow for the first series of bonds. The escrow documentation for the second series of bonds shall provide that no bond proceeds are to be released from such escrow account until building permits for at least fifty-four (54)Development Units (over and above the one hundred fifty-seven (157) Development Units allocated to the first series of general obligation bonds), representing a total of at least One Million Three Hundred Sixty-Eight Thousand Nine Hundred Dollars ($1,368,900.00) in projected assessed valuation (as certified to the bond trustee by an authorized officer of the District), have been issued by the Town and all public improvements required to serve the Development Units for which such building permits have been issued have been completed and initially accepted by the Town in accordance with the Town subdivision requirements and subdivision agreement. The requirements of this Paragraph are hereinafter referred to as the"Series 2 Escrow Release Threshold." Once the Series 1 or Series 2 Escrow Release Threshold, as the case may be, has been reached, bond proceeds will be released from the escrow account into an unrestricted account on 18 a pro rata basis as building permits are issued by the Town, as further described below. The amount of bond proceeds released into the unrestricted account will be on a per Development Unit basis (single-family homes and commercial square footage, combined) and will be proportionate with each series of bonds. For example: (i) The projected principal amount for the first series of bonds represents approximately thirty-nine percent (39%) of the total amount of bonds projected to be issued by the District. Thirty-nine percent (39%) of the total Development Units projected for the District is approximately one hundred fifty-seven (157) Development Units, which, after deduction of the thirty-eight (38) Development Units comprising the Series 1 Escrow Release Threshold, yields a remaining one hundred nineteen (119) Development Units. The proceeds from the first series of bonds (net of reasonable amounts for capitalized interest and issuance costs, and after deduction of the required contributions to the Town pursuant to Article V.c., below) are projected to be One Million Three Hundred Ninety-Thousand Eight Hundred Fifty-Nine Dollars ($1,390,859.00). Therefore, for the first series of bonds, for each building permit issued by the Town (over and above those building permits relied on for compliance with the Series 1 Escrow Release Threshold), approximately Eleven Thousand Six Hundred Eighty-Eight Dollars ($11,688.00) per Development Unit will be transferred from the escrow account to the unrestricted account for each building permit issued by the Town; provided, however, that such transfers from the escrow account shall not be made unless all public improvements required to serve the Development Units for which such additional building permits have been issued have been completed and initially accepted 19 — by the Town in accordance with the Town subdivision requirements and subdivision agreement. (ii) The projected principal amount for the second series of bonds represents approximately sixty-one percent (61%) of the total amount of bonds projected to be issued by the District. Sixty-one percent (61%) of the total Development Units projected for the District is approximately two hundred forty-five (245)Development Units, which, after deduction of the fifty-four (54) Development Units comprising the Series 2 Escrow Release Threshold, yields a remaining one hundred ninety-one (191) Development Units. The proceeds from the second series of bonds (net of reasonable amounts for issuance costs, and after deduction of the required contributions to the Town pursuant to Article V.c., below) are projected to be Two Million Three Hundred Eighty Thousand Six Hundred Ninety Dollars ($2,380,690.00). Therefore, for the second series of bonds, for each building permit issued by the Town(over and above those building permits relied on for compliance with the Series 2 Escrow Release Threshold), approximately Twelve Thousand Four Hundred Sixty-Four Dollars ($12,464.00) per Development Unit will be transferred from the escrow account to the unrestricted account for each building permit issued by the Town; provided,however, that such transfers from the escrow account shall not be made unless all public improvements required to serve the Development Units for which such additional building permits have been issued have been completed and initially accepted by the Town in accordance with the Town subdivision requirements and subdivision agreement. By depositing net bond proceeds into an escrow account and releasing portions of such proceeds only upon the conditions described above, the Town, its taxpayers and residents can be 20 assured that payment of the bonds will be supported by continuing development and, to the extent development does not occur, the escrow account will be used to pay the bonds within the time required by any applicable federal requirements for tax-exempt bonds, but in no event later than three years from the date of issue. Accordingly, there will not be an excessive debt burden on the tax base of the District. The District's Investment Banker has indicated that issuance of building permits is a generally accepted lending criterion for special district debt, and that accordingly, the escrow release requirements will evidence sufficient development activity within the District to support repayment of the corresponding debt. The projected par amount of each series of bonds is an estimate only. The actual amount of bonds issued will be subject to then current actual and projected assessed valuation and market conditions as they exist at the time of issuance of each series of bonds and will be issued only in compliance with the above- -- stated debt limit and all other requirements and restrictions of this Service Plan. c. Required Transfers of Bond Proceeds to Town. The District will pay to the Town for deposit into the Town's capital improvements fund a total of One Million One Hundred Twenty-Six Thousand Five Hundred Sixty-Seven Dollars ($1,126,567.00) of the District's total net bond proceeds (the "Town contribution"), of which Four Hundred Thirty-Nine Thousand Three Hundred Sixty-One Dollars ($439,361.00) shall be paid to the Town concurrently with the issuance and delivery of the first series of Bonds (anticipated to occur in 2006), and Six Hundred Eighty-Seven Thousand Two Hundred Six Dollars ($687,206.00) shall be paid to the Town concurrently with the issuance and delivery of the second series of Bonds (anticipated to occur in 2008). By agreement between the Town and the District (to be evidenced by a supplement to the intergovernmental agreement between the Town and the District as provided in Article XIII and 21 Exhibit N), the funds so paid to the Town shall be used by the Town to finance improvements (whether inside or outside the boundaries of the District) that the Town and the District would otherwise be empowered to construct, and for which the District is authorized to incur indebtedness (i.e., streets, street lighting, traffic safety controls,water, landscaping, storm sewers and flood and surface drainage, or park and recreation improvements and facilities), which improvements shall be of benefit to the Town and the District and shall be specifically identified in an amendment to the intergovernmental agreement between the Town and the District (the "IGA Amendment"), which IGA Amendment shall be fully executed before the District incurs any financial obligations of any kind. The Developer of the District acknowledges that the foregoing provisions for allocation of bond proceeds to the Town's capital improvements fund for capital improvements are material .- considerations in, and conditions of, the Town's approval of this Service Plan, and the Town has relied thereon in approving this Service Plan. The District shall not issue bonds without including in such issuance the concurrent allocation and delivery to the Town of the funds required by this Article V.c., and such delivery of funds to the Town shall be a condition of closing for the Bonds. Further, the District shall not be authorized to incur any financial �. obligations of any kind or perform an other functions authorized under this Service Plan until the governing body of the District, upon formation thereof, has executed: (1)the intergovernmental agreement provided for in Article XIII and Exhibit N, with such amendments as the parties may mutually agree, stating its agreement to comply with the provisions of this Article V.c.; and (2)the District indemnity letter provided for in Part II of Exhibit K. 22 d. Other Financial Restrictions,Limitations and Requirements. The District shall request voter authorization for such amount of general obligation debt as the District deems sufficient to allow for allocations of the amounts deposited in the Town's capital improvements fund (as described in Article V.c., above), among the District's powers, unforeseen contingencies, increases in construction costs due to inflation and all costs of issuance, including capitalized interest, reserve funds, discounts, legal fees and other incidental costs of issuance; provided, however, that the amount of general obligation debt (together with construction financing notes) actually issued by the District shall not exceed the debt limit of Six Million Three Hundred Twenty-Five Thousand Dollars ($6,325,000.00), as stated in Article V.b., above. Any increase in the amount of general obligation debt (together with construction financing notes) actually issued in excess of the projected amounts shown in Exhibit G will be consistent with the District's debt capacity at the time of such issuance (based on higher than anticipated assessed values, lower interest rates,or other changes from projected circumstances). All bonds of the District will be sold for cash. The authorized maximum voted interest rate is fifteen percent (15%) per annum and the maximum underwriting discount is four percent (4%) of bond principal. The actual interest rates and discounts, within such maximum voted amounts, will be determined at the time the bonds are sold by the District and will reflect market conditions at the time of sale; provided, however, that the actual interest rate shall not exceed 300 basis points above the 30-year "AAA" Municipal Market Data rate in effect at the time the bonds are sold. The term of any bonds issued by the District shall not exceed thirty(30)years. Estimated interest rates used in Exhibit G are based on information furnished by the underwriters identified in Exhibit H. In the event bonds are issued at an interest rate higher than the estimated rates used in Exhibit G, the principal amount of bonds will be reduced so as to 23 result in total debt service payments approximately equal to those projected in Exhibit G, and so that debt service on the bonds can be paid from the revenue sources contemplated in this Service Plan. If actual increases in District assessed valuation are less than the projected increases for those factors as shown in the Exhibit G forecasts, it is expected that the District would compensate by increasing its mill levy (subject to the Limited Mill Levy) or reducing the principal amount of the bonds issued. No bonds issued by the District shall provide for acceleration as a remedy upon default, unless the District has received the prior written administrative approval of the Town, which approval may be granted only by the Town Administrator or the Board of Trustees. Except as provided below with respect to notes issued to the Developer for construction financing, this Service Plan authorizes only the issuance of general obligation bonds and only within the limitations stated herein, and subject to the provisions as to the Limited Mill Levy as set forth below. All financial obligations of the District are subject to the provisions as to the Limited Mill Levy and other limitations as set forth below. Other than ad valorem property taxes, specific ownership taxes, facilities fees (as limited below), amounts capitalized from bond proceeds, and investment income on the foregoing, no District revenues shall be pledged to any financial obligations of the District. The District may be authorized to issue revenue bonds, certificates, debentures or other evidences of indebtedness or to enter into lease-purchase transactions, only upon approval of an amendment to this Service Plan, and such an amendment shall be considered a material modification of the Service Plan. The District anticipates the imposition of facilities fees as set forth in Article V.i., below and as reflected in the Financing Plan contained in Exhibit G. The District is not authorized to 24 impose any user charges or any taxes other than ad valorem property taxes as provided in this Service Plan. All bonds of the District shall be structured utilizing a commercial bank with trust powers as trustee to hold the bond proceeds and debt service funds and to pursue remedies on behalf of the bondholders. Any bonds issued by the District pursuant to this Service Plan shall be in compliance with all applicable state and federal legal requirements, including without limitation § 32-1- 1101(6), C.R.S., and article 59 of title 11, C.R.S., and shall be approved by nationally recognized bond counsel. An opinion shall also be obtained from bond counsel or counsel to the District that the bonds comply with all requirements of this Service Plan. e. Limited Mill Levy. "Limited Mill Levy" shall mean an ad valorem mill levy or levies (a mill being equal to 1/10 of 10 per dollar of assessed valuation) imposed upon all taxable property in the District each year in an amount sufficient to pay the principal of,premium if any, and interest on the District's bonds as the same become due and payable, and to make up any deficiencies in any debt service reserve for the bonds, which mill levy or levies for debt service purposes shall not exceed a total of 50 mills; provided however, that if the ratio of actual valuation to assessed valuation for residential real property (presently 7.96% as shown in Exhibit G) is changed pursuant to Article X, section 3(1)(b) of the Colorado Constitution and legislation implementing such constitutional provision (which changes shall be determined in relation to 2005 as the base year), the Limited Mill Levy of fifty (50.000) mills for debt service purposes as provided herein will be increased or decreased (as to all taxable property in the District) to reflect such changes so that, to the extent possible, the actual tax revenues generated by the debt service mill levy, as adjusted, are 25 neither diminished nor enhanced as a result of such changes ("Gallagher adjustment"). The Limited Mill Levy shall be an enforceable limit on all District mill levies for debt service purposes. In addition to the Limited Mill Levy applicable to all District mill levies for debt service purposes, the total of all other District mill levies for administration, warranty maintenance (to the extent not capitalized),other operating expenses and all other purposes, shall be limited to six (6.000)mills, as adjusted by the Gallagher adjustment. 1. Investor Suitability. Except as provided below in this Article V.f as to rated bonds, the District's bonds shall be issued not in a public offering and only to financial institutions or institutional investors within the meaning of§ 32-1-1101(6)(a)(IV), § 32-1-103(6.5) and § 11-59-103(8), C.R.S. The District shall provide for and shall utilize appropriate minimum denominations and mechanisms and procedures for transfers and exchanges of bonds that are reasonably designed to insure continuing compliance with such limitation of sales to institutional investors. If the District's bonds are rated in one of the four highest investment grade rating categories by one or more nationally recognized organizations which regularly rate such obligations, compliance with the institutional investor limitation set forth above shall not be required. g. Refunding bonds. General obligation refunding bonds may be issued by the District to defease original issue bonds in compliance with applicable law, but any such refunding shall not extend the maturity of the bonds being refunded nor increase the total debt service thereon and shall meet the requirements of§ 32-1-1101(6)(a), C.R.S. Refunding bonds shall not be subject to the debt limit stated in Article V.b., above, provided that such refunding bonds demonstrate net present value debt service savings; but if such refunding bonds do not demonstrate net present value debt 26 service savings, any increase in principal amount of the refunding bonds over the principal amount of bonds being refunded shall be subject to such debt limit. Any issuance of refunding bonds must comply with Article V.f, above ("Investor Suitability"). Except to the extent otherwise expressly provided in this Article V.g., all limitations, restrictions and requirements of this Service Plan with respect to general obligation bonds of the District shall be applicable to refunding bonds, including, without limitation, Limited Mill Levy, debt limit, maximum interest rate, maximum discount, maximum term, prohibition on acceleration, bank trustee requirement and opinion requirements. h. Construction Financing Notes Issued to Developer. The District may issue construction financing notes to the Developer to evidence the District's obligation to reimburse the Developer's advances for construction costs; any Developer advances which are not so reimbursed shall be treated as Developer contributions as described in Article V.a., above. Such notes shall be subject to the following restrictions set forth above for general obligation bonds: Limited Mill Levy, debt limit, maximum term, prohibition on acceleration, and opinion as to Service Plan compliance; but such notes shall not be subject to the above-stated bank trustee requirement or bond counsel opinion requirements. The repayment of construction financing notes from proceeds of an equal or lesser principal amount of the District's bonds shall not be treated as an increase in the principal amount of District debt for purposes of the debt limit under this Service Plan. Such notes shall not be general obligations of the District, shall bear no interest (see Exhibit G), shall be issued only to the Developer (and therefore shall be not be subject to any underwriting discount), and shall not be sold, transferred, assigned,participated or used as security for any borrowing. The Developer hereby represents that it is an accredited investor, as that term is defined under §§ 3(b) and(4)(2) 27 of the federal "Securities Act of 1933" by regulation adopted thereunder by the Securities and Exchange Commission, and the Developer agrees that it will also be such an accredited investor if and when it acquires such notes. Such notes shall be paid from proceeds of the District's _ general obligation bonds (when and if received by the District, and subject to: (i)prior payment of amounts payable to the Town as provided in Article V.c., above; and (ii) the escrow requirements of V.b., above); otherwise the notes will be unsecured obligations of the District. To the extent that any of such notes are outstanding when the District's general obligation bonds are also outstanding,payments on the notes may be made only if such payments do not adversely affect the District's ability to pay its general obligation bonds. The Developer solely assumes the risk of nonpayment or other default on such notes, including, without limitation, delay, inability or failure of the District to sell or issue its general obligation bonds. i. Identification of District Revenue. The District will impose a mill levy on all taxable property in the District as the primary source of revenue for repayment of debt service and for operations and administration. Mill levies imposed by the District for debt service purposes shall not exceed fifty(50.000) mills, and mill levies imposed by the District for administration, operations and all other purposes shall not exceed six mills, except for Gallagher adjustments permitted under V.e., above. Although the mill levies imposed may vary depending on the phasing of facilities anticipated to be funded, it is estimated that a mill levy of approximately forty-five (45.000) mills will produce revenue sufficient to support debt service and administration, non-capitalized warranty maintenance and other operating expenses throughout the repayment period. The District also anticipates the imposition of facilities fees in amounts which shall not exceed One Thousand Five Hundred Dollars ($1,500.00)per single-family dwelling unit and Fifty Cents ($.50)per commercial square 28 foot on property within the District. No other fees or user charges shall be imposed by the District. j. No Town Security for Debt. The District will not pledge any Town funds or assets for security for the indebtedness set forth in the Financing Plan of the District. k. District Operating Expenses. The District will require sufficient operating finds to plan and cause the public improvements to be constructed. The costs are expected to include: organizational costs, legal, engineering, accounting and debt issuance costs, compliance with warranty obligations, and compliance with state reporting and other administrative requirements. The first year's operating budget(for 2006) is estimated to be Forty-Thousand Dollars ($40,000.00). The operating budget amounts shown in Exhibit G are expected to be sufficient to enable the District to comply with its warranty obligations as described in Article Dig., above. Until the District receives sufficient revenue from ad valorem taxes and other District sources, funds for District organizational costs, operating and administration will be contributed by the Developer. 1. Quinquennial Review. Pursuant to § 32-1-1101.5, C.R.S.,the District shall submit application for a quinquennial finding of reasonable diligence in every fifth (5`") calendar year after the calendar year in which the District's ballot issue to incur general obligation indebtedness is approved by its electorate. Upon such application, the 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 consultant and administrative costs associated with such 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. 29 m. Letters. There is attached hereto as Exhibit H 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 I a letter from legal counsel for the District stating that the petition for organization of the District, this Service Plan, notice and hearing procedures in connection therewith, and provisions thereof (including without limitation provisions as to the District's bonds, fees and revenue sources) meet the requirements of titles 11 and 32, C.R.S., and other applicable law. There is attached hereto as Exhibit J a letter from bond counsel for the District(i) stating that provisions for payments of bond proceeds to the Town for deposit into the Town's capital improvements funds are authorized and permissible under currently applicable laws,and that the District is authorized by currently applicable laws to undertake such borrowing and make such payments of bond proceeds to the Town; 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. VI. LANDOWNERS' OBLIGATIONS AS TO PUBLIC IMPROVEMENTS The creation of the District shall not relieve the Developer, the landowner or any subdivider of property within the District, or any of their respective successors or assigns, of obligations to construct public improvements for the Vogl North development, of the obligation to enter into a subdivision improvements agreement regarding such improvements, or of obligations to provide to the Town letters of credit as required by the Town to ensure the completion of such public improvements, or of any other obligations to the Town under Town ordinances, rules, regulations or policies, or under other agreements affecting the property within 30 the District or the Vogl North 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 twenty (120) days from the conclusion of the District's fiscal year. Failure of the District to submit such report shall not constitute a material modification hereof, unless the District refuses to submit such report within thirty (30) days after a written request from the Town to do so. The District's fiscal year shall end on December 31g 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 any change in revenue projections or operating costs; f. A summary of any litigation and notices of claim involving the District; g. Proposed plans for the year immediately following the year summarized in the annual report; h. Status of construction of public improvements; i. The current assessed valuation in the District; and 31 j. A schedule of all taxes imposed and tax or other revenues received in the report year, and proposed taxes to be imposed, and identified revenues to be received 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. 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 § 32-1-207(3)(c), C.R.S., to request reports from the District beyond the mandatory statutory five (5) year reporting report. The District shall provide the Town with a copy of the District's financial statement annually. In years in which an independent audit is not conducted, the District shall provide the Town with a copy of the application for exemption and the response by the State Auditor. 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 all public improvements and facilities and all books and records of the District. 32 VIII. DISSOLUTION Promptly when all of the general obligation bonds to be issued by the District have been paid (or when provision for payment thereof has been made through establishment of an escrow _ as provided by § 32-1-702(3)(b), C.R.S.), the District will so notify the 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 § 32-1-704(3)(b), C.R.S.; making any necessary agreements as to continuation or transfer of warranty maintenance and other services,if any, which are then being — provided by the District; submitting a petition for dissolution to the District Court; and, conducting any required dissolution election). In addition, at any time after the District has issued all of its general obligation bonds (excluding refunding bonds)as contemplated by the Financial Plan, upon the 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 outstanding financial obligations and providing that the District will continue in existence (with the Town Board of Trustees serving as the District Board of Directors if the Town so elects) to such extent as is necessary to adequately provide for the payment of such financial obligations, as provided in §§ 32-1-702(3)(c) and 32-1-707(2)(c), C.R.S. To the extent that any financial obligations are owned by the Developer, the Developer shall cooperate fully with the Town to dissolve the District. Also, on or after December 31, 2009, if the District has not issued any of its general obligation bonds, and, irrespective of whether any, some or all of the District's bonds have been issued, on or after December 31, 2001, 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. 33 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 and other landowners signing the Consent contained in Exhibit D to this Service Plan(together constituting the owners of one hundred percent (100%) of the land in the District) and shall also be binding on their successors in title to any and all land in the District (including the nominees for the initial Board of Directors set forth in Article X hereof and succeeding directors who own land within the District); and such agreements shall obligate all such persons to cooperate fully with the Town as described above, including without limitation,the signing of petitions, execution of consents, and voting in favor of dissolution in any required election. If prior to the issuance of any bonds or the incurrence of any financial obligations by the District, the District wishes to dissolve in accordance with applicable law, the Town shall consent to such dissolution. IX. CONSOLIDATION 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. X. 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, including the intergovernmental agreement between the Town and the District contemplated in Article XIII and Exhibit N hereof, will be scheduled. All elections will be 34 conducted as provided in the court orders, the Uniform Election Code of 1992 (as amended by House Bill 93-1255 and as otherwise amended from time to time), and Article X §20 of the Colorado Constitution (the "TABOR Amendment"), and are currently planned for November 1, 2005, but may be held on any legally permitted date. The election questions are expected to include whether to organize the District, election of initial directors, and TABOR Amendment ballot issues and questions. Thus, the ballot may deal with the following topics (in several questions,but not necessarily using the exact divisions shown here): a. Whether to organize the District, b. Membership and terms of the initial board members, c. Approval of new taxes, d. Approval of maximum operational mill levies, e. Approval of bond and other indebtedness limits, f. Approval of an initial property tax revenue limit, g. Approval of an initial total revenue limit, h. Approval of an initial fiscal year spending limit, and i. Approval of a four(4) year delay in voting on ballot issues. Ballot issues may be consolidated as approved in court orders. Promptly upon approval by the District's electorate, the District shall provide the Town with copies of all approved ballot issues. 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. 35 The following persons, who are or will be owners of property within the District, are anticipated to be nominated for the initial board of directors of the District: Daniel S. Smith Chris Chou 6485 Silverleaf Avenue 1321 Red Mountain Drive Firestone, Colorado 80504 Longmont, Colorado 80501 Donna M. Smith Keith H. Zook 6485 Silverleaf Avenue 4675 Tanglewood Trail Firestone, Colorado 80504 Boulder, Colorado 80301 Ruth Chou 1000 Ithaca Drive Boulder, Colorado 80305 XI. INDEMNITIES The fully executed Prominence Partners I, LLC Indemnity Letter attached hereto as Part I of Exhibit K is submitted by the Developer to the Town as part of this Service Plan. The form of the District Indemnity Letter attached hereto as Part II of Exhibit K shall be executed by the District and delivered to the Town immediately upon formation of the District. The District shall not incur any financial obligations of any kind or otherwise perform any functions authorized under this Service Plan until the District Indemnity Letter has been duly executed by the District and delivered to the Town. 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 Plan. XII. 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 levy and maximum allowed mill levy. The form of the notice is attached hereto and incorporated herein as Exhibit L, 36 subject to any changes requested by the Town in the future. In addition, there is attached hereto as Exhibit M a form of the Town's 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 disclosure and the disclaimer set forth in Exhibits L and M, respectively, except as directed by the Town. Neither this Service Plan, the intergovernmental agreement to be entered into between the Town and the District as described in Article XIII below, nor any other related agreements shall be construed to impose upon the Town any duties to or confer any rights against the Town upon, any bondholders, investors, lenders or other third parties. XIII. INTERGOVERNMENTAL AGREEMENTS The District shall enter into an intergovernmental agreement with the Town which shall be in substantially the form set forth in Exhibit N. The District shall execute and deliver the intergovernmental agreement to the Town immediately upon formation of the District. The District shall not incur any financial obligations of any kind or otherwise perform any functions authorized under this Service Plan until the intergovernmental agreement has been executed and delivered to the Town. 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 Plan. No other intergovernmental agreements are proposed at this time. Any intergovernmental agreements proposed to be entered into by the District shall be subject to review and approval by 37 the Board of Trustees prior to their execution by the District. Failure of the District to obtain such approval shall constitute a material modification of this Service Plan. _ XIV. CONSERVATION TRUST FUND The District shall not apply for or claim any entitlement to funds from the Conservation Trust Fund which is derived from lottery proceeds, or other funds available from or through governmental or nonprofit entities for which the Town is eligible to apply. The District shall remit to the Town any and all conservation trust funds which it receives. XV. 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 modifications of a basic or essential nature, including, but not limited to, the following: 1. Any change in the stated purposes of the District or additions to the types of facilities, improvements,programs, activities or functions provided by the District; 2. Any issuance by the District of financial obligations not expressly authorized by this Service Plan, or under circumstances inconsistent with the District's financial ability to discharge such obligations as shown in the build out, assessed valuation and other forecasts —. contained in Exhibit G, or any change in debt limit, change in revenue type (including, without limitation, the imposition of any tax other than ad valorem property tax as provided in this Service Plan) or change in maximum mill levy (except for any necessary Gallagher adjustment as provided in Article V.e., above); 38 3. Any change in the types of improvements or change of more than fifteen percent (15%) in the estimated costs of improvements from what is stated in Exhibit E of this Service Plan that adversely impact the District's financial ability to discharge its financial obligations; 4. Failure by the District to comply with the requirements of Article V.c. of this Service Plan or Section 6 of the intergovernmental agreement (the form of which is attached hereto as Exhibit N) concerning transfer of bond proceeds to the Town; 5. Failure by the District to enter into the intergovernmental agreement (the form of which is attached hereto as Exhibit N) or failure to execute and deliver the District indemnity letter (the form of which is attached hereto as Exhibit K, Part II) immediately upon the District's formation as provided in Articles XIII and XI, respectively, of this Service Plan, or failure to enter into the IGA Amendment as provided in Article V.c.; 6. Failure to comply with the requirements of this Service Plan concerning the dedication of improvements or the acquisition and conveyance of lands or interests in land; 7. The failure of the District to develop any capital facility proposed in its Service Plan when necessary to service approved development within the District; 8. Any proposed use of the powers set forth in §§ 32-1-1101(1)(f) and —1101(1.5), C.R.S., respecting division of the District; 9. The occurrence of any event or condition which is defined under the Service Plan or intergovernmental agreement as necessitating a service plan amendment; 10. The default by the District under any intergovernmental agreement; 11. Any of the events or conditions enumerated in § 32-1-207(2), C.R.S., of the Special District Act; or 39 12. 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. 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 the Service Plan (including, without limitation, any material modification of the Service Plan as described in Article XV which is not duly authorized by the Town), the Town may utilize the remedies set forth in the statutes to seek to enjoin the actions of the District, or may withhold issuance of any permit, authorization, acceptance or other administrative approval for the Vogl North development, 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. 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 it will not rely on such provisions as a bar to the enforcement by the Town of any provisions of this Service Plan. 40 XVII. RESOLUTION OF APPROVAL The Developer and other proponents of the proposed District agree to and shall incorporate the Board of Trustee's Resolution of Approval, including any conditions on such approval, into the Service Plan presented to the appropriate district court. Such resolution shall be attached as Exhibit O. XVIII.SEVERABILITY If any portion of this Service Plan is held invalid or unenforceable for any reason by a court of competent jurisdiction, such portion shall be deemed severable and its invalidity or its unenforceability shall not cause the entire Service Plan to be terminated. Further, with respect to any portion so held invalid or unenforceable, the District and Town agree to pursue a Service Plan amendment or take such other actions as may be necessary to achieve to the greatest degree possible the intent of the affected portion. 41 XIX. CERTIFICATION This Service Plan is submitted to the Town by the undersigned Developer, which is the District petitioner,and with the consent of all property owners of all property within the boundaries of the proposed District. The undersigned will cause written notice of the Town's hearing on the proposed Service Plan to be duly given to all"interested parties"within the meaning of§ 32-1-204, C.R.S., and will or has caused all other required filings to be made and all other applicable procedural requirements to be met. The information contained in this Service Plan is true and correct as of this date. PROMINENCE PARTNERS I,LLC,a Colorado limited liability company By: Prominence Development Corp., a Colorado Corporation, its Manager CliZe/ Daniel S. Smith, Executive Vice-President October 7,2005 _ EXHIBIT A Legal Description A PARCEL OF LAND BEING THE SOUTHWEST QUARTER OF SECTION 5; EXCEPT THE SOUTH 790.05 FEET OF THE EAST 312.02 FEET, TOWNSHIP 2 NORTH, RANGE 67 WEST OF THE 6TH P.M., COUNTY OF WELD, STATE OF COLORADO, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID SOUTHWEST QUARTER THENCE NORTH 00°00'14" WEST 2649.92 FEET TO THE NORTHWEST CORNER OF SAID SOUTHWEST QUARTER; THENCE NORTH 89°23'55" EAST 2680.42 FEET TO THE NORTHEAST CORNER OF SAID SOUTHWEST QUARTER; THENCE ALONG THE EAST LINE OF SAID SOUTHWEST QUARTER, SOUTH 00°11'14" EAST 1848.62 FEET; THENCE ALONG A LINE 790.05 FEET NORTHERLY FROM AND PARALLEL WITH THE SOUTH LINE OF SAID SOUTHWEST QUARTER, SOUTH 89°09'38" WEST 312.02 FEET; THENCE ALONG A LINE 312.02 FEET WESTERLY FROM AND PARALLEL WITH THE EAST LINE OF SAID SOUTHWEST QUARTER, SOUTH 00°11'14" EAST 790.05 FEET TO A POINT ON THE SOUTH LINE OF SAID SOUTHWEST QUARTER; THENCE ALONG SAID SOUTH LINE, SOUTH 89°09'38" WEST 2376.98 FEET TO THE TRUE POINT OF BEGINNING. SAID PARCEL OF LAND CONTAINS 157.305 ACRES. EXHIBIT B Boundary Map III III I 30' ROW (EAST - I OF SECTION LINE) II I II J - I 1 , I 1 - 153.86 ACRES ((DOES NOT INCLUDE 30' OF ROW N THE WEST AND SOUTH SIDES. r I DOES INCLUDE 30' OF NEEDED ROW WITHIN THE SITE, SHOWN AS FADED LINE) - II - O I ..0 II 3 v - I CCLI-I U- M . �m, � _= r _ , 11 I I II I I I EXHIBIT C Vicinity Map I I I I I I I I I I I I I I I I I I I aI BENCHMARK MOUNTAIN �J�• iili:� uiii� �i Z SHADOWS ��/li�lp++q.y :p //// SEC. 5 SEC. 4 SEC. 1 'i {{.:� SEC. 6 / �• viii:: iii{{�{{{{{{{i: tiOr e 1842THE D.ORES M ;•, ��\ {{�{{{li�i{i'��{►�/ ¢" SITE 9.6 AC. COMM. PI i'f!_q°N �i THE SHORES a C.w Illllll�lul. 1ST FILING \/ /Ill ulr �� ///�. 20.6 ACRES COMMERCIAL] 68 V 67 VI _ FIRESTONE BLVD FIRESTONE BLVD , I r _BOOTH FARMS SUBDIVISION r46.0 ACRES ALMO ANNEXATION LCOMMERCut a a 0 .1 Li n SAGEBRUSH P.U.D. op cn �IIIIII o of nln a SEC. 7 u 1^ '�I �HIY I 2 • \PIIII 'I ce � ♦� 'U InnnnlGQlnnnln 11/4.Inl�p�\�Ilnnnnlnn� 3 w SEC. 12 unnnip lu • J. nmliul I�1' N nnmli 1■,�`///dam �m Iqs�� -�e- +{ • le \ J 111BIIIII�n111 • i � •11 Ig11111H\� �� x�-� I v\C\\/r �•`•il''��-Iln.� �Iti1 unllnl/►i b1/`. munnn.mD % •• •ii+� .� SEC. B SEC. 9 Imo:.• `. i��\1111 �_-©�/\,// •`Ire u\ �. :, //inuni nnm� Ind\�//Iu nu�tlllll�1 NEIGHBORS ��I�p�nni��nnnnlnnnn udl. : noun. ANNEXATION Iqulnnn. � l ♦ n� I w 654 D.U. C= unm non/� 30�plra '!l Ui i C'- '^ uxlnnggn►� ,♦..�3 3r�C S�1�.`i�{�S�Z� �� w ce �nnm■�■ nm■riunmmiimn� o 44 muunr+��iiunuun■ui■�` SABLE AVE q SABLE AVE a o TEES ANNEXATION SEC. 13 SEC. 18 SEC. 744 D.U. 17 I EXHIBIT D Property Owner's Consent PROMINENCE PARTNERS I,LLC October 7, 2005 Town of Firestone Post Office Box 100 Firestone, Colorado 80520 RE: Proposed The Springs Metropolitan District(the"District") To Whom It May Concern: Prominence Partners I, LLC, a Colorado limited liability company, is the owner of the property attached hereto as Exhibit A, which property is proposed to constitute the boundaries of the District. The purpose of this letter is to advise that I, Daniel S. Smith, as Executive Vice President of Prominence Development Corp., a Colorado Corporation, as Manager of Prominence Partners I,LLC,consent to the organization of the District. • Sincerely, PROMINENCE PARTNERS I,LLC By: PROMINENCE DEVELOPMENT CORP.,Its Manager NT By Daniel S. Smith, Executive Vice President PROMINENCE PARTNERS I, LLC. • P.O. BOX 870 • FIRESTONE, CO • 80520 • USA PHONE: (303) 833-5322 • FAX: (303) 833-5748 • WW W.PROMINENCEDEVELOPMENT.COZY A PARCEL OF LAND BEING THE SOUTHWEST QUARTER OF SECTION 5; EXCEPT THE SOUTH 790.05 FEET OF THE EAST 312.02 FEET, TOWNSHIP 2 NORTH, RANGE 67 WEST OF THE 6TH P.M., COUNTY OF WELD, STATE OF COLORADO,BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID SOUTHWEST QUARTER THENCE NORTH 00°00'14" WEST 2649.92 FEET TO THE NORTHWEST CORNER OF SAID SOUTHWEST QUARTER; THENCE NORTH 89°23'55" EAST 2680.42 FEET TO THE NORTHEAST CORNER OF SAID SOUTHWEST QUARTER; THENCE ALONG THE EAST LINE OF SAID SOUTHWEST QUARTER, SOUTH 00°11'14" EAST 1848.62 FEET; THENCE ALONG A LINE 790.05 FEET NORTHERLY FROM AND PARALLEL WITH THE SOUTH LINE OF SAID SOUTHWEST QUARTER, SOUTH 89°09'38" WEST 312.02 FEET; THENCE ALONG A LINE 312.02 FEET WESTERLY FROM AND PARALLEL WITH THE EAST LINE OF SAID SOUTHWEST QUARTER, SOUTH 00°11'14" EAST 790.05 FEET TO A.POINT ON THE SOUTH LINE OF SAID SOUTHWEST QUARTER; THENCE ALONG SAID SOUTH LINE, SOUTH 89°09'38" WEST 2376.98 FEET TO THE TRUE POINT OF BEGINNING. SAID PARCEL OF LAND CONTAINS 157.305 ACRES. EXHIBIT E Engineering Estimates and Certificate of Probable Costs - THE SPRINGS METROPOLITAN DISTRICT 4/8/2005 PUBLIC IMPROVEMENTS ESTIMATE OF PROBABLE CONSTRUCTION COSTS - CONSTRUCTION ITEM QTY UNIT UNIT COST TOTAL COST STORM SEWER — Inlets 9 EA 3,000.00 27,000.00 5'Manholes 7 EA 2,000.00 14,000.00 18"RCP 930 LF 40.00 37,200.00 - 24"RCP 340 LF 50.00 17,000.00 36"RCP 240 LF 60.00 14,400.00 36"RCP FES 3 EA 700.00 2,100.00 24"x38"HERCP 200 LF 90.00 18,000.00 Grass swale(northwest corner) 1 LS 5,000.00 5,000.00 Detention Pond Grading 1 LS 50,000.00 50,000.00 — Grouted Boulder Drop Structure 1 EA 65,000.00 65,000.00 Outlet Structure 1 EA 5,000.00 5,000.00 Subtotal 254,700.00 — STREET-WCR#24 8"Full Depth HBP 4,234 SY 15.00 63,516.67 — Subgrade Preparation 4,234 SY 1.30 5,504.78 8'Crosspan 3 EA 2,000.00 6,000.00 Handicap Ramp 6 EA 500.00 3,000.00 Curb Return w/Apron 6 EA 1,800.00 10,800.00 Signage&Striping 1 LS 10,000.00 10,000.00 Subtotal 98,821.44 — STREET-WCR#15 8"Full Depth HBP 2,785 SY 15.00 41,770.00 Subgrade Preparation 2,785 SY 1.30 3,620.07 8'Crosspan 2 EA 2,000.00 4,000.00 Handicap Ramp 4 EA 500.00 2,000.00 Curb Return w/Apron 4 EA 1,800.00 7,200.00 Signage& Striping 1 LS 6,000.00 6,000.00 Subtotal 64,590.07 - STREET-On Site Median Curb&Gutter 1,421 LF 9.00 12,789.00 Mountable Curb,Gutter,&Sidewalk 34,654 LF 15.00 519,810.00 6"Full Depth Asphalt 67,937 SY 13.20 896,768.40 Subgrade Preparation 94,786 SY 1.30 123,221.35 Street Lights 48 EA 2,400.00 115,200.00 Handicap Ramp 63 EA 500.00 31,500.00 6'Crosspan 22 EA 1,750.00 38,500.00 Stop&Street Signs 28 EA 350.00 9,800.00 Subtotal 1,747,588.75 Copy of 3671 newdist-costest-rev(3) - THE SPRINGS METROPOLITAN DISTRICT 4/8/2005 PUBLIC IMPROVEMENTS ESTIMATE OF PROBABLE CONSTRUCTION COSTS - CONSTRUCTION ITEM QTY UNIT UNIT COST TOTAL COST WATER LINE 12"Water Line 2,400 LF 30.00 72,000.00 12"x12"x8"Crosses 2 EA 600.00 1,200.00 12"Bends 2 EA 250.00 500.00 — 12"Plug&Thrust Block 1 EA 200.00 200.00 8"Water Line 17,907 LF 25.00 447,675.00 — 8"Bends 50 EA 180.00 9,000.00 8" Water Valve&Box 62 EA 900.00 55,800.00 8"Tee 16 EA 280.00 4,480.00 — 8"Cross 3 EA 475.00 1,425.00 8"x8"x6"Tee 36 EA 300.00 10,800.00 6"Water Line 1,440 LF 20.00 28,800.00 — Air Relief Valve 5 EA 1,330.00 6,650.00 Taps(348 SFE,3 parks, 1 church) 352 EA 660.00 232,320.00 Tie into existing system 1 EA 1,000.00 1,000.00 Fire Hydrant Assemblies 36 EA 2,700.00 97,200.00 Subtotal 969,050.00 LANDSCAPING Entry One 1 LS 260,320.00 260,320.00 Entry Two 1 LS 178,368.00 178,368.00 Neighborhood Park 1 LS 490,690.00 490,690.00 Pocket Park(NE) 1 LS 173,935.00 173,935.00 Drainage Channel Area 1 LS 381,981.98 381,981.98 Trail Corridors 1 LS 195,895.50 195,895.50 Subtotal 1,681,190.48 _ EARTHWORK& EROSION CONTROL Cut Earth and recompact 140,000 CY 1.50 210,000.00 Straw Bale Barrier 12 EA 66.00 792.00 Silt Fence 10,200 LF 1.20 12,240.00 - Inlet Protection 9 EA 250.00 2,250.00 Vehicle Tracking 2 EA 920.00 1,840.00 — Riprap 40 CY 55.00 2,200.00 Subtotal 229,322.00 Copy of 3671 newdist-costest-rev(3) THE SPRINGS METROPOLITAN DISTRICT 4/8/2005 PUBLIC IMPROVEMENTS ESTIMATE OF PROBABLE CONSTRUCTION COSTS CONSTRUCTION ITEM QTY UNIT UNIT COST TOTAL COST TOTAL ESTIMATE 5,045,262.74 Construction Contingency 10% 504,526.27 GRAND TOTAL $ 5,549,789.01 Copy of 3671 newdist-costest-rev(3) CPARK ENGINEERING CONSULTANTS October 19,2005 Town of Firestone 151 Grant Avenue Firestone, Colorado 80520 RE:Proposed"The Springs Metropolitan District" To Whom It May Concern: I, Joel Seamons, a Registered Professional Engineer in the State of Colorado, have reviewed the Engineer's Estimate of Probable Construction Costs within the Service Plan for The Springs Metropolitan District in the Town of Firestone, Colorado. The Engineer's Estimate of Probable Construction Costs was based on the following information and assumptions: — A. The quantities for each item were based on a conceptual design of public improvements prepared by Park Engineering Consultants that was not reviewed or approved by appropriate governing agencies. — B. Unit Costs were based on recent bid costs for similar projects. Based on these assumptions,I believe that the Engineers Estimate of Probable Construction Costs contained within the Service Plan for The Springs Metropolitan District is reasonable for the public improvements portion of this project. — Additionally,I have reviewed the exhibits of the location of public improvements within the Service Plan for the district(Service District Roadways, Storm Drainage System, Water Distribution System,Parks and Open Space)and believe the exhibits represent the — conceptual design of the public improvements prepared by Park Engineering Consultants. Sincerely, Park Engineering Consultants \ pPP0 REt;�ST, it - ; P.SEgyO2q0 ,• Joel Seamons,P.E. $ 1 Project Manager to-! S h SS/ONAENG' 420 21st Ave. Suite 101 • Longmont, CO 80501 • (303) 651-6626 • FAX (303) 651-0331 E-mail don@parkengineering.net EXHIBIT F Location of Public Improvements � I � ,ii ----- �--- - L # � ilJ_ illIMMI I�� - Sit .jI woR L6 To:eE PA / � I la (jik FROM'INTERSEGTr9 pea\ .. TO NORTH tND (SEA I COMMERCIAL P,AREEL iI I I COMMERCIAL ' COMMUNITY CENTER I PARCEL I-- _ _ _ I— II LANE ADDED TO NORTH SIDE OF WCR 24 I I PARK ENGINEERING NOTES. I 1. THICKNESS OF LOCAL STREETS: C FULL DEPTH ASPHALT. CONSULT 2. THICKNESS OF ARTERIAL STREETS: 8' FULL DEPTH ASPHALT. P taK T ( X301-11630 101 THE SPRINGS METROPOLITAN DISTRICT — _ STREET IMPROVEMENTS NO SCALE kis so 307-1 Ion11/}D/04 FOASES IsJT Cf 4 It 1 I EXISTING WATERLINES IN WCR 15 II I I _ _ ,m��m I- - - - I _ 4._---- ::::,/s+ < TJL - III I /�III s -I I \ I C 1_ i , _ I C H 'soI I • i 1 k RI , \ / l I I I I I CHURCH/ I-11AFIIILI COMMERCIAL _CpAMUNITY CENTER 17 i PARCEL > _ _ _ _ _ PROPOSED 12' 'v4 IN WCR 24 I CONNECT TO EXISTING WATER SYSTEM I t I NOTES. PARK ENLTANTNG 1. ON-SITE WATER LINE TO BE 8'. CONSULTANTS 420 213!AYQA6:31111E 101 LCWEWOWT CQ NqM (]061061-6626 THE SPRINGS METROPOLITAN DISTRICT � WATER LINE IMPROVEMENTS NO SCALE Le NO DIM p, n^1n SW M6 367-I ' 6/}6/04 (-BASES 12 0f 1 OUTLET STRUCTURE STORM INLETS & PIPE CHURCH/ \ / OMMERCIAL COMMUNITY CENTER ARCEL I ARLE1 6 6 �O� Ep DARK ENGINEERING CONSULTANTS♦2031ST ULTSN 101 LCRdWT m 80501 (303)!51-8838 THE SPRINGS METROPOLITAN DISTRICT STORM SEWER IMPROVEMENTS NO SCALE X83:-1 ID♦/12/x]5 I".L° I°'LLT 07 ♦ - I DETENTION POND AREA REGIONAL TRAIL SYSTEM p2.95 AC POCKET BARK I _ _ _ I _ _ I�. - ..1.::::::•:-:•:4X. y _III .... .... '.. ..:::::::::::::::::.::.:42...i.s ,. ;.:y:. I :i a::4q,{4{�`...:::::::i:iii4iiii ..:::::::::::::.::::::::-..:::§:::„..4..4.. ...4i: i: • — • .:ii: :?1 ......• .. _ 6.6 C NEIG BORHOeD PARK iYiii` f::. { : .: •,. .• 0.25 c o :: _ .._'[.. =. il / .::::: ri I I ....-....:•::::::::::::•:•:•:•:•:•:•:•:•:•:,..... CHURCH/ I I CpAMERCIAL }y'::}:}}::::,;,::_, 0.98 cm COMMUNITY CENTER .-- — — IL — — — — — — — ENTRY 7 ENTRY 2 I 11 —. I PROPOSED IRRIGATION POND I—J— — Ii I NOTES. PARK ENGINEERING 1. TOTAL MANICURED LANDSCAPE: 20.8 AC 42CONSULTANTS 2O TOTAL NATIVE LANDSCAPE: 26.8 AC LOMa40NT CD• (3O3)651—aau (1,197.105 Sr) THE SPRINGS METROPOLITAN DISTRICT LANDSCAPE IMPROVEMENTS _ NO SCALE ]8T-1 I 5/35/04 LEASES I r or THE SPRINGS METROPOLITAN DISTRICT FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS OCTOBER 13, 2005 TABLE OF CONTENTS PAGE Accountant's Report 1 Forecast Summary 2 Schedule of Estimated Assessed Valuation 4 Schedule of Estimated Bond Debt Service Requirements 7 Summary of Significant Forecast Assumptions and Accounting Policies 11 Accountant's Report The Petitioners for Formation of The Springs Metropolitan District Weld County, Colorado — We have compiled the accompanying forecasted surplus cash balances and cash receipts and disbursements of The Springs Metropolitan District (the "District") (in the Formation Stage of Development) as of the date of formation and for the calendar years ending through 2038, in accordance with attestation standards established by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of a forecast, information that is the representation of the Petitioners for Formation of the District (the "Petitioners") and does not include evaluation of the support for the assumptions underlying the forecast. We have not examined the forecast and, accordingly, do not express an opinion or any other form of assurance on the accompanying schedules or assumptions. However, we did become aware of a departure from the guidelines for presentation of a forecast established by the American Institute of Certified Public Accountants, which is described in the following paragraph. Furthermore,there will usually be differences between the forecasted and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. We have no responsibility to update this report for events and circumstances occurring after the date of this report. As discussed in Note 4, the forecast is presented on the cash basis of accounting, whereas the historical financial statements for the forecast period are expected to be presented in conformity with generally accepted accounting principles on the accrual basis for government wide statements and the modified accrual basis for individual fund financial statements for all funds of the District by fund type. Guidelines for presentation of a forecast established by the American Institute of Certified Public Accountants require disclosure of the differences resulting from the use of a different basis of accounting in the forecast than that expected to be used in the historical financial statements for the period. Accordingly, if the AICPA presentation guidelines were followed, the forecast would indicate that the presentation reflects — surplus cash balances and the cash received and disbursed rather than fund balances and the revenue, expenses and expenditures that would be recognized under generally accepted accounting principles based on the accrual basis and the modified accrual basis of accounting. C- < lei. a„L_, L L A Greenwood Village, Colorado October 13,2005 THE SPRINGS METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) I PaR02 I FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SUMMARY-GENERAL FUND AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2038 Cash Receipts Cash Disbursements Cash Balances General Net Specific Annual Administrative Annual Cumulative — Total Fund Property Ownership Developer Interest Total Costs Total Surplus Surplus Collection Assessed Mill Taxes Taxes Contributions- Income Cash 840000 Cash Cash Cash Collection Year Value Levy Administrative at Receipts as Inflated by Disbursements (Deficit) Balances Year (See Page 6) 98.00% 10.00% 2.00% 1.00% 2005 0 0.000 0 0 0 0 0 0 0 0 0 2005 2006 0 0.000 0 0 40000 0 40,000 40,000 40,000 0 0 2006 • 2007 711,991 5.000 3,489 349 37,000 0 40,838 40,400 40,400 438 438 2007 2008 2,705,368 5.000 13,256 1,326 27,000 9 41,591 40,804 40,804 787 1,225 2008 2009 4,738,613 5.000 23,219 2,322 16,000 25 41,566 41,212 41,212 354 1,579 2009 2010 7,012,697 5.000 34,362 3,436 4,000 32 41,830 42,624 41,624 206 1,785 2010 2011 9,720,336 5.000 47,630 4,763 36 52,429 42,040 42,040 10,339 12,173 2021 2012 10,190,689 5.000 49,934 4,993 243 55,170 42,461 42,461 12,709 24,883 2012 2013 10,190,689 5.000 49,934 4,993 498 55,425 42,885 42,885 12,540 37,422 2013 2014 10,394,502 5.000 50,933 5,093 748 56,774 43,324 43,314 13,460 50,882 2014 2015 10,394,502 5.000 50,933 5,093 L0H 57,044 43,747 43,747 13,297 64,178 2015 2016 10,602,392 5.000 51,952 5,195 1,284 58,431 44,185 44,185 14,246 78,425 2016 2027 10,602,392 5.000 51,952 5,195 1,568 58,715 44,627 44,627 14,088 92,513 2017 2018 10,814,440 5000 52,991 5,299 1,850 60,140 45,073 45,073 15,067 107,580 2018 2019 10,814,440 4.000 42,393 4,239 2,152 48,784 45,524 45,524 3,260 110,840 2019 2020 11,030,729 4.000 43,240 4,324 2,217 49781 45,979 45,979 3,802 114,642 2020 2021 11,030,729 4.000 43,240 4,324 2,293 49,857 46,439 46,439 3,418 118,060 2021 2022 11,251,344 4.000 44,105 4,411 2,361 50,877 46,903 46,903 3,974 122,034 2022 2023 11 251,344 4.000 44,105 4,411 2,441 50,957 47,372 47,372 3,585 125,619 2023 2024 11476,370 4.000 44,987 4,499 2,512 51,998 47,846 47,846 4,152 129,771 2024 2025 11,476,370 4000 44,987 4,499 2,595 52,081 48,324 48,324 3,757 133,528 2025 2026 11,705,898 4.000 45,887 4,589 2,671 53,147 48,808 48,808 4,339 137,867 2026 2027 11,705,898 4.000 45,887 4,589 2,757 53,233 49,296 49,296 3,937 141,805 2027 2028 11,940,016 4000 46,805 4681 2,836 54,322 49,789 49,789 4,533 146,338 2028 2029 11,940,016 4.000 46,805 4,681 2,927 54,413 50,287 50,287 4,126 150,464 2029 2030 12,178,816 4.000 47,741 4,774 3,009 55,524 50,789 50,789 4,735 155,199 2030 2032 12,178,816 4.000 47,741 4,774 3,104 55,619 51,297 51,297 4,322 159,521 2031 2032 12,422,393 4.000 48,696 4,870 3,190 56,756 51,810 51,810 4,946 164,466 2032 2033 12,422,393 4.000 48,696 4,870 3,289 56,855 52,323 52,328 4,527 163,993 2033 2034 12,670,840 4.000 49,670 4,967 3,380 58,017 52,852 52,852 5,165 174,158 2034 2035 12,670,840 4000 49,670 4,967 3,483 58,120 53,380 53,380 4,740 178,898 2035 2036 12,924257 4000 50,663 5,066 3,578 59,307 53,914 53,914 5,393 184291 2036 2037 12,924,257 4.000 50,663 5,066 3,686 59,415 54,453 54,453 4,962 189,253 2037 2038 13,182,742 4.000 51,676 5,168 3,785 60,629 54,998 54,998 5,631 194,885 2038 1,418 242 141,826 124,000 65,571 1,749,645 1,554,760 1,554,760 194,885 This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report. I I I I I I I I I I f 1 I I I I I 1 I 5. THE SPRINGS METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) I Paee 3 FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SUMMARY-DEBT SERVICE FUND AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2038 Cash Receipts Cash Disbursements Cash Balances Debt Specific Residential Commercial Net Net Annual Cumulative Total Service Net Ownership Facilities Facilities Interest Total Debt Service Debt Service Total Surplus Surplus Collection Assessed Fund Property Taxes Fees Fees Income Cash on on Cash Cash Cash Collection Year Value Mill Taxes $1,500 $0.50 at Receipts 2006 Bonds 2008 Bonds Disbursements (Deficit) Balances Year (See Page 6) Levy 9800% 10.00% per Unit per Square Foot 2.00% (See Page 7) (See Page 9) 2005 0 0.000 0 0 0 0 0 0 0 0 0 0 0 2005 2006 0 0000 0 0 124,500 0 0 124,500 0 0 0 124,500 124,500 2006 2007 711,991 40.000 27,910 2,791 124500 0 2,490 157691 0 0 0 157,691 282,191 2007 2008 2,705,368 40.000 106,050 10,605 124,500 0 5,644 246,799 0 0 0 246,799 528,990 2008 2009 4,738,613 40.000 185,754 18,575 124,500 26,790 10,580 366,199 173,900 0 173,900 192,299 721,289 2009 2010 7,012,697 40.000 274,898 27,490 24,000 0 14,426 340,814 177,850 243,600 416,450 (75,636) 645,653 2010 2011 9,720,336 40.000 381,037 38,104 0 12,913 432,054 176,800 263,600 440,400 (8,346) 637,306 2011 2012 10,190,689 40000 399,475 39,948 0 12,746 452,169 180,400 252,200 432,600 19,569 656,875 2012 2013 10,190,689 40.000 399,475 39,948 0 13,137 452,560 178,650 256,500 435,150 17,410 674,284 2013 2014 10,394,502 40.000 407,464 40,746 0 13,486 461,696 181,900 260,450 - 442,350 19,346 693,631 2014 2015 10,394,502 40.000 407,464 40,746 0 13,873 462,083 179,800 264,050 443,850 18,233 711,864 2015 2016 10,602,392 40.000 415,614 41,561 0 14,237 471,412 187,700 262,300 450,000 21,412 733,277 2016 2017 10,602,392 40.000 415,614 41,561 0 14,666 471,841 184,900 265,550 450,450 21,391 754,668 2017 2018 10,814,440 40.000 423,926 42,393 0 15,093 481,412 187,100 273,450 460,550 20,862 775,530 2018 2019 10,814,440 40.000 423,926 42,393 0 15,511 481,830 188,950 270,650 459,600 22,230 797,759 2019 2020 11 030,729 40000 432,405 43,241 0 15,955 491,601 195,450 272,850 468,300 23,301 821,060 2020 2021 11,030,729 40.000 432,405 43,241 0 16,421 492,067 191,250 279,700 470,950 21,1❑ 842,176 2021 2022 11,251,344 40.000 441,053 44,105 0 16,844 502,002 197,050 280,850 477,900 24,102 866,279 2022 2023 11151,344 40000 441,053 44,105 0 17,326 502,484 197,150 281,650 478,800 23,684 889,963 2023 2024 11,476,370 40000 449,874 44,987 0 17,799 512,660 201900 287,100 489,000 23,660 913,623 2024 2025 11,476,370 40.000 449,874 44,987 0 18,272 513,133 200,950 286,850 487,800 25,333 938,957 2025 2026 11,705,898 40.000 458,871 45,887 0 18779 523,537 204,650 296,250 500,900 22,637 961,594 2026 2027 11,705,898 40.000 458,871 45,887 0 19,232 523,990 207,650 289,600 497,250 26,740 988,334 2027 2028 11,940,016 35.000 409,543 40,954 0 19,767 470,264 209,950 297,950 507,900 (37,636) 950,698 2028 2029 11 940,016 35.000 409,543 40,954 0 19,014 469,511 211,550 295,250 506,800 (37,289) 913,409 2029 2030 12,178,816 35.000 417,733 41,773 0 18,268 477,774 212,450 307,200 519,650 (41,876) 871,534 2030 2031 12,178,816 35.000 417,733 41,773 0 17,431 476,937 212,650 307,750 520,400 (43,463) 828,071 2031 2032 12,422,393 35.000 426,088 42,609 0 16,561 485,258 217,150 312,600 529,750 (44,492) 783,579 2032 2033 12,422,393 30.000 365,218 36,522 0 15,672 417,412 215,600 316,400 532,000 (114,588) 668,991 2033 2034 12,670,840 30.000 372,523 37,252 0 13,380 423,155 223,350 319,150 542,500 (119,345) 549,646 2034 2035 12,670,840 30000 372,523 3]252 0 10,993 420,768 224,700 315,850 540,550 (119,782) 429,864 2035 2036 12.924,257 30.000 379,973 37,997 0 8,597 426,567 551,850 551,850 (125,283) 304,582 2036 2037 12,924,257 30.000 379,973 37,997 0 6,092 424,062 550,350 550,350 (126,288) 178,294 2037 2038 13,182,742 30.000 387,573 38,757 0 3,566 429,896 561,750 561,750 (131,854) 46,440 2038 12,171,436 1,217,144 522,000 26,790 448,771 14,386,140 5,316,400 9,023,300 14,339,700 46,440 This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report. I I I I 1 I I I I I I I I I I I I I I THE SPRINGS METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) Page 4 FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONL1 SCHEDULE OF ESTIMATED ASSESSED VALUATION (Page 1 of 3 -Continued to Page 5) AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2038 Residential-SFD's TOTAL RESIDENTIAL UNITS Est.Biennial Cumulative Estimated Eat.Market Annual Annual Annual Revaluation Market Residential RESIDENTIAL Construction Collection Number Value per Value Number of New Value of New per State Value Assessment ASSESSED Year Year of Residence of New Residential Residential Statute at of New Ratio VALUATION Residences 3295,800 Residences Units Units 2.00% Residences (TO Page 6) Inflation compounded annually on bare price at 2 DO% 2004 2006 0 0 0 0 0 0 0 0 2005 2007 0 295,800 0 0 0 0 0 2006 2008 83 301,716 25,042,428 83 25,042,428 0 25,042,428 796% 1,993,377 2007 2009 83 307,750 25,543,277 83 25,543,277 50,585,705 796% 4,026,622 2008 2010 83 313,905 26,054,142 83 26,054,142 1,011,714 77,651 561 796% 6,181064 2009 2011 83 320,183 26,575,225 83 26,575,225 104,226,786 796% 8,296,452 2010 2012 16 326,587 5,225,394 16 5,225,394 2084,536 111,536,716 796% 8,878,323 2011 2013 0 333,119 0 0 0 III 516,716 7.96% 8,878,323 2012 2014 0 0 2,230,734 113,767,450 7.96% 9,055,889 2013 2015 0 0 11l 767,450 796% 9,055,889 2014 2016 0 0 2,275,349 116,042,799 796% 9,237,007 2015 2017 0 0 116,042,799 796% 9,237,007 2016 2018 0 0 2,320,856 118,363,655 796% 9,421 747 2017 2019 0 0 118,363,655 7.96% 9,421,747 2018 2020 0 0 2,367,273 120,730,928 796%. 9,610,182 2019 2021 0 0 120,730,928 796% 9,610,182 2020 2022 0 0 2414,619 123,145,547 796% 9,802,386 2021 2023 0 0 123,145,547 7.96% 9,802,386 2022 2024 0 0 2,462,911 125,608,458 7.96% 9,998,433 2023 2025 0 0 125,608,458 7.913% 9,998,433 2024 2026 0 0 2,512,169 128,120,627 796% 10,198,402 2025 2027 0 0 128,120,627 796% 10,198,402 2026 2028 0 0 2,562,413 13068)040 796% 10,402,370 2027 2029 0 0 130,683,040 796% 10,402,370 2028 2030 0 0 2,613,661 133296,701 796% 10,610,417 2029 2031 0 0 133,296,701 7.96% 10,610,417 2030 2032 0 0 2,665,934 135962,635 7.96% 10,821,626 2031 2033 0 0 135,962,635 796% 10,822,626 2032 2034 0 0 2,719,253 08,681,888 796% 11,039,078 2033 2035 0 0 138,681,888 796% 11,039,078 2034 2036 0 0 2,773,638 141455,526 796% 11,259,860 2035 2037 0 0 141455,526 796% 11,259,860 2036 2038 0 0 2,829,111 144,284,637 796% 11,485,057 348 108,440,466 348 108440,466 35,844,171 This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accouming Policies and Accountant's Report I 1 I I I I I I I I I 1 1 1 I I 1 I THE SPRINGS METROPOLITAN DISTRICT (IN THE FORMA3]ON STAGE OP DEVELOPMENT) Page 5 FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS 0NL7 SCHEDULE OF ESTIMATED ASSESSED VALUATION (Page 2 of 3-Continued from Page 4 and on to Page 6) AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2038 Commercial-4.1 Ames @30 FAR TOTAL COMMERCIAL Est.Biennial Cumulative Estimated Commercial Est.Market Annual Annual Annual Revaluation Market Commercial COMMERCIAL • Construction Collection Square Value per Value Square Footage Value per State Value Assessment ASSESSED Yeas Year Footage Square Foot of New of of New Statute at of New Ratio VALUATION 57700 Commercial Commercial Commercial 2 Commercial (To Page 6) Inflation compounded annually on base prim at 2 2004 2006 0 0 0 0 0 0 0 2900. 0 2005 2007 0 76.50 0 0 0 0 290 0 2006 2008 0 7803 0 0 0 0 0 29006 0 2007 2009 0 79.59 0 0 0 0 29.00% 0 2008 2010 0 81.18 0 0 0 0 0 29.00% 0 2009 2011 53579 82.81 4,436,666 53,5]9 4,436,666 4,436,666 29.E 1,286,633 2010 2012 0 84.46 0 0 0 88,733 4,525,399 29 1,312,366 2011 2013 0 86.15 0 0 0 4,525,399 29 1.312,366 2012 2014 0 0 90,508 4,615,907 29006 1138,613 2013 2015 0 D 4,615,907 2900% 1)38,613 2010 2016 0 D 92,318 4,]08,225 29.E 1,365,385 2015 2017 0 0 4,708,225 E9.00/. 1165,)85 2016 2018 0 0 94,165 4,802,390 29 1)92,693 2017 2019 0 0 4802,390 29006 1,392,693 2018 2020 0 0 96,048 4,898,438 29.00% 1420,547 2019 2021 0 0 4,890,438 2900% 1,420,547 2020 2022 0 0 97,969 4,996,407 29.00% 1448,958 2021 2023 0 0 4,996,407 2900/. 1,448,958 2022 2024 0 0 99,928 5,096,335 29.00% 14]],913 2023 2025 0 0 5,096,))5 29.00% 1,477,937 2024 2026 0 0 101,927 5,198,262 2900/c 1,507,496 2025 2027 0 0 5,198,262 2900%. 1,50],496 2026 2028 0 0 103,965 5,302,227 29.00% 1,537,646 2027 2029 0 D 5,302,227 29.00% 1,537,646 2028 2030 0 0 106045 5,408,272 29.00% 1,568,399 2029 2031 0 0 5,408,272 1900•% 1,568,399 2030 2032 0 0 108,165 5,516,437 29.00% 1599,767 2031 2033 0 0 5,516,437 2900% 1,599,767 2032 2034 0 0 110,329 5,626,766 29 00% 1,631,762 2033 2035 0 0 5,626,766 00%29. 1631)62 2034 2036 0 0 112,535 5,739,301 290 1664,)9) 2035 2037 0 0 5,739,301 2900•% 1,664,397 • • 2036 2038 0 0 114,786 5,854,087 29.00% 1697,685 53,579 4,436,666 53,579 4,436,666 1,417,421 This financial informalion should be read only in connection with the accompanying Summary of Significaa Forecast Assumptions and Accounting Policies and Accountant's Rep9at. THE SPRINGS METROPOLITAN DISTRICT (M THE FORMATION STAGE OF DEVELOPMENT) Page 6 FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE OF ESTIMATED ASSESSED VALUATION (Page 3 of 3-Continued from Page 5) AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 1038 Undeveloped Land Residential-SFD's Commercial-4 I Acres©30 FAR PlatledTartially Less: Cumulative Platted/Partially Less: Cumulative Annual Cumulative Estimated LAND RESIDENTIAL COMMERCIAL TOTAL Construction Collection Finished Lots Lots Actual Finished Lots Lou Actual Market Market Value Land ASSESSED ASSESSED ASSESSED ASSESSED Collection Year Year 10% Used Value I0% Used Value Value for of Land Assessment VALUATION VALUATION VALUATION VALUATION Year 5295,800 17700 Assessmea Ratio (Sun Paea 4) (Bin P.M St • 2004 2006 O 0 0 0 0 0 0 0 29 014/. 0 0 0 0 2006 2005 2007 2955,140 0 2,455,140 0 0 0 2,455,140 2455,140 290 III991 0 0 711,991 2007 2006 2008 2,455,140 (2,455,140) 0 0 0 0 0 2,455,140 2900% 711,991 1,993,377 0 2,705,368 2008 2007 2009 2,455,140 (2,455,140) 0 0 0 0 0 2,455,140 2900% 711.991 4,026,622 0 4,738,613 2009 2008 2010 2,455,140 (2,455,140) 0 412,558 0 412,558 412,558 2,867,698 290P/s 831633 6,181,064 0 7,012,697 2010 2009 2011 473,280 (2,455,140) (1981,860) 0 (412,558) (412,558) (2,394,418) 473280 29 137,251 8,296,452 1286,633 9,720,336 2011 2010 2012 0 (473,280) (473,280) 0 0 0 (473,280) 0 29.00% 0 8,878,323 1,312,366 10,190,689 2012 2011 2013 0 0 0 0 0 0 0 0 29.00% 0 8,878,81 1,312,366 10,190,689 2013 2012 2014 0 29.00% 0 9,055,669 1,338,613 10,394,502 2014 201) 2015 0 2900% 0 9,055,889 1,338,613 10,394,502 2015 2014 2016 0 2900% 0 9,23),00] 1,365]85 10602,392 2016 2015 2017 0 2900% 0 9,237,007 1165,185 10,602,392 2017 2018 0 2900% 0 9,421]4] 1,392,693 10,814,440 2018 2017 2019 0 2900% 0 9,421]4] 1,392,693 10,814,440 2019 2018 2020 0 ?900% 0 9,610,182 ZU 19 2021 1,420,547 11,030,729 2020 0 2900•/. 0 9,610,182 1,420,547 110]0,]39 2021 2020 2022 0 2900° 0 9,802,386 1948,958 11,251,344 2022 2021 2023 0 2900% 0 9,802,386 1448,958 11,251,344 2021 2022 2024 0 29 00% 0 9,998,4]] 1,477,937 11,476,370 2024 2023 2025 0 29 0 9,998,411 1477,937 11,476,370 2025 2024 2026 0 29 0 10,198,402 1,507,496 11705,898 2026 2025 2027 0 2900. 0 10,198,402 1,507,496 11 705.898 2027 2026 2028 0 29.00% 0 10,402,370 1,537,646 11940,016 2028 2027 2029 0 2900% 0 10,402,370 153'7,646 11940016 2029 2021 2030 0 2900% 0 10,610,417 1,568,399 12,178,816 2030 2029 2031 0 2900/. 0 10,610,417 1568,399 12,178,816 20)1 2030 2032 0 29.00% 0 10,822,626 1,599,767 12,422,393 2032 2031 2033 0 2900% 0 10,822,626 1,599,767 12,422,393 2033 2032 2034 0 2900% 0 11,039,078 1,631,762 12,670,840 2034 2033 2035 0 2900% 0 11039,078 1631762 12,670,840 2035 2034 2036 0 2900% 0 11259,860 1,664,397 12,974,257 2036 2035 2037 0 2900% 0 11,259,860 1,664,397 12,924,257 2037 2036 2038 0 2900% 0 11 485,057 1,697,685 13,182,742 2038 10,293,840 (10,293,840) 0 412,558 (412,558) 0 0 This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountants Report. I I I I I I I I I I I I I 1 1 I I I I THE SPRINGS METROPOLITAN DISTRICT IN THE FORMATION STAGE OF DEVELOPMENT) 1 Page] I FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE of ESTIMATED BOND DEBT SERVICE REQUIREMENTS AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 20)8 Series 2006 Bond luxe Dated: June 213006 Ration Issued, June 1,2006 Principal payments due on December I. Interest Role: Reduce Debt Net 2006 Total 2006 Scn'ac By Bands Bonds Cephalud Debt Service Year Principal Coupon Inkiest Debt Service Inkiest Payments Yom (S¢Papa 8) 2006 7.0011% 79,450 79450 (70,450) 0 2006 2007 7000% 158,900 155900 (151,900) 0 2007 2001 ]009. 158,900 158900 (158.900) 0 2008 2009 15,000 7000% 158900 173900 0 173,990 2009 2010 15,000 7000% 157,850 172,850 172,850 2010 2011 20,000 700 156,000 176,800 176,000 2011 2012 75,000 7000% 155400 180,400 100,400 2012 2013 25,100 7.000% 153,650 178,650 178,650 2013 2014 30,000 7000% 151910 181.900 181.900 2014 2015 30,00 7.000% 149,810 179,000 17900 2015 2016 40,000 700% 147.700 187,700 107,700 2016 2017 40,000 7000% 144,900 184,900 184,900 2017 21118 45,000 7000% 142,100 '87,100 107,IW 2018 2019 50063 7000% 138,950 IA11,950 188,950 2019 2020 60,000 70103'. 135,450 195,450 195450 2020 2021 60,000 7000% 131,250 191,250 191,250 2021 21122 70,0011 7000% 127,050 197,050 197,050 2022 2023 75,0010 7000% 122,150 197,150 197,150 2023 2024 05,000 7000% 116,900 201,900 201,900 2024 2025 90,000 7.000% 110,950 200,950 200,950 2025 2026 100,000 7000% 114650 204,650 204,650 2026 2027 110,000 7000% 97.650 207,650 207.650 2027 21128 120,000 7 89,950 209,950 209,950 2028 2029 130,000 7000% 81,550 211,550 II 1,550 2029 2010 140,000 7.00% 72,450 712,450 212,450 2030 2031 150000 701X% 62.650 212,650 212,650 2031 2032 165,000 70 52,150 217,150 217,150 2032 2033 175,000 7.0009. 40,600 215,600 215600 20)3 2034 195180 7000% 23,150 223,350 223,350 2034 2035 210000 7000 14,700 224,700 224,700 2035 2,270,000 I I 3,443,650 5,713,650 (397,250) 5,316,400 USE OF PROCEEDS Construction Conk 1,390859 Contribution Is Town(51.126,567 0 36%) 405,564 Capilalized Interest 382,777 2.500% Issuance Costs 14.004) 90,800 $2,270,000 Note: Nel proceeds of Mc bands will be depasiled into an escrow=count to be released as building permus are issued b3 the Tmvn. This Enancial information should be read only in connection ies fli:accompanying Summary of Significant Forecast Assumptions and Accounlln8 Policies and Accountant's',eland. I 1 1 I 1 I I I I I I 1 1 1 1 1 1 1 1 THE SPRINGS METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) Page 8 FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE OF CAPITALIZED BOND INTEREST AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2038 CALCULATION of CAPITALIZED INTEREST on SERIES 2006 BOND ISSUANCE Beginning Capitalized Interest at Disbursements Ending Dale Balance Interest 2.50% Balance (See Page 7) (See Page 7) 6/01/2006 0 382,777 382,777 12/01/2006 382,777 4,785 (79,450) 308,112 6/01/2007 308,112 3,851 (79,450) 232,513 12/01/2007 232,513 2,906 (79,450) 155,969 6/01/2008 155,969 1,950 (79,450) 78,469 12/01/2008 78,469 981 (79,450) 0 6/01/2009 0 0 0 0 382,777 14,473 (397,250) This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountant's Report. ► ► ► I ► I I I I I I I I I I I I I I THE SPRINGS METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) I Page 9 FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE of ESTIMATED BOND DEBT SERVICE REQUIREMENTS AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2038 Series 2008 Bond Issue Dated: December 1.2009 53,480,000 Issued: December 1,2008 Principal payments due on December I. Inlereat Bale: 7.000% Reduce Debt Net 2000 Total Mg 8 Service By Bonds Bonds Capitalized Debt Senate Year Principal Coupon Interest Debt Service Interest Pis mots Ycar (0a Page 10) 2008 7.000% 0 2008 2009 7000%. 243,600 241600 (243,6001 0 2009 2010 7000% 241600 243.600 0 243,600 2010 2011 201100 7000% 243,600 263,600 263,600 2011 2012 100110 7000% 242,200 252,20(1 252,2(10 ma 2013 15,000 2000% 241,500 256,500 256,500 2013 2014 20,000 7000% 240,450 260,450 260,450 2014 2015 25,000 7.000% 239,050 264,050 264050 2015 2016 25,000 2000% 237,300 262,301) 262,300 2016 2017 30,1000 700% 235,550 265,550 265,550 2011 2010 40,000 70 233,450 223,450 273,450 2018 2019 40,000 7 230,650 270,650 270,650 2019 2020 45,000 70006 222,850 222850 272,050 2020 2021 55,000 7000% 224,200 219,700 279,700 2021 2022 60,000 7000% 220,850 200,850 280,850 2022 2023 65,000 7.000% 216,650 281,650 281,650 2023 2024 25,000 70100% 212,100 287,100 201,100 2024 2025 00,100 7010% 206,850 286,050 206850 2025 2026 95,000 7000%. 201,250 296,250 296,250 2026 2027 95,000 20%I% 194,600 289,600 289600 2027 2028 110,000 7000% 107,950 297,950 297,950 2020 2029 115,000 7 180,250 295,25(1 295250 2029 2030 135,000 7000. 172,200 307,200 307,200 2030 2031 145,000 7MG. 162,750 307,750 307,750 2031 • 2032 160,000 7 000% 152,600 312,600 212,600 2032 2033 125000 7 141,400 316,400 310,400 2033 2034 190,000 7000% 129,150 319,150 319,150 2034 2035 200,000 7000% 115850 315850 215,850 2035 2036 450,000 70W% 101,850 551,850 551,850 2036 2037 400,000 7000% 70,350 550,350 550,350 2037 2030 525,000 9000% 36,750 561.750 561,750 2038 3,480,000 I I 5,786,900 9,266,900 (241600) 9,023,300 USE OF PROCEEDS' Construction Cons 2,380,690 Conbibulion N Town($1,126,56764%) 221,003 li Capitalised Interest 239,107 2,500% • Issuance Coats(400%) 139,200 S3,480000 Note' Net proceeds of the bonds will be deposited into an escrow account I0 M released as building permits are issued by the Town. This financial information should be read only in connection with the accompanying Summary of Significant Farecul Assumptions and Accounting Policies and Aaountan0 Raped. THE SPRINGS METROPOLITAN DISTRICT (IN THE FORMATION STAGE OF DEVELOPMENT) Page 10 FORECASTED SURPLUS CASH BALANCES AND CASH RECEIPTS AND DISBURSEMENTS GENERAL AND DEBT SERVICE FUNDS ONLY SCHEDULE OF CAPITALIZED BOND INTEREST AS OF THE DATE OF FORMATION AND FOR THE CALENDAR YEARS ENDING THROUGH 2038 CALCULATION of CAPITALIZED INTEREST on SERIES 2008 BOND ISSUANCE Beginning Capitalized Interest at Disbursements Ending Date Balance Interest 2.50% Balance (See Page 9) (See Page 9) 12/01/2008 0 239,107 239,107 6/012009 239,107 2,989 (121,800) 120,296 12/01/2009 120,296 1,504 (121,800) 0 6/01/2010 0 0 0 0 12/01/2010 0 0 0 0 239,107 4,493 (243,600) This financial information should be read only in connection with the accompanying Summary of Significant Forecast Assumptions and Accounting Policies and Accountants Report. THE SPRINGS METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES October 13,2005 NOTE 1) NATURE AND LIMITATION OF FORECAST This forecast of financial information is for the purpose of a financial analysis of the proposed financial plan of The Springs Metropolitan District (the "District") (in the Formation Stage of Development), located in the Town of Firestone (the "Town") in Weld County, Colorado. It is to display how the proposed facilities and services are currently anticipated to be provided and financed. This financial forecast presents,to the best knowledge and belief of the Petitioners for Formation of the District (the "Petitioners"), the District's expected cash position and results of cash receipts and disbursements for the forecasted period. Accordingly, the forecast reflects the Petitioner's judgement, as of October 13, 2005, the date of this forecast, the expected conditions within the District and the District's expected course of action. The assumptions disclosed herein are those that the Petitioners believe are significant to the forecast, however, they are not all-inclusive. There usually may still be differences between forecasted and actual results, because events and circumstances frequently do not occur as expected,and those differences may be material. The forecast is expressed in terms of 2005 dollars, with the only adjustments for inflation as follows. The market values of residential and commercial properties are forecasted to increase 2% per year, starting in 2006 through build-out. The market values of residential and commercial properties are forecasted to increase 2% biennially pursuant to the reassessment of property required by State statute. The residential assessment ratio is assumed to remain constant for collection year 2008 and beyond, based upon information as explained in Note 5. The assessment ratios for commercial and raw ground /developed lots are assumed to remain at a constant 29%for the entire forecast period in accordance with historical trends. Administrative costs in the General Fund are assumed to increase by 1%per year beginning in 2007. Page 11 THE SPRINGS METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES October 13,2005 NOTE 2) ORGANIZATION The Petitioners for the formation of the District, a quasi-municipal corporation and political subdivision of the State of Colorado, are in the process of organizing the District. The District will be governed pursuant to provisions of the Colorado Special District Act (Title 32). The District will operate under a Service Plan approved by the Town. The District's service area contains approximately 157 acres of real property located entirely in Weld County, Colorado, within the Town. The District is being established primarily to provide financing, construction, acquisition and installation of streets, traffic and safety controls, street lighting, water, landscaping, storm sewers and flood and surface drainage, and park and recreation improvements needed for the area. The District will also be authorized to finance park, recreation or other capital improvements of the Town that are identified by the Town and located outside of the District. The operation and maintenance of these services and facilities is anticipated to be provided by the Town or other entities, and not by the District. As set forth in this forecast, the District is forecasted to issue $5,750,000 of debt between two bond issues. However, the Service Plan may have a higher debt amount to allow for an under estimate of valuations in this forecast. Formation of the District is intended to be timed to allow for the proper legislative,judicial and election process to be completed in order for the District's electors to be able to vote for the authorization of debt and TABOR questions in November 2005, and to certify tax levies for tax collections in 2007. The Petitioners expect the favorable approval at the election since they constitute the majority of the current eligible electors within the proposed District's boundaries. NOTE 3) PETITIONERS FOR FORMATION The Petitioners are landowners, principals or employees of the sole property owner of the land included within the boundaries of the District. The sole landowner, as well as, the developer of the District is Prominence Partners I, a Colorado limited liability company (the "Developer"). The Developer anticipates developing approximately 157 acres within the District. Page 12 THE SPRINGS METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES October 13,2005 NOTE 3) PETITIONERS FOR FORMATION(continued) The Developer has provided the information regarding the number of units estimated to be built each year and the initial sales values for the residential properties to be developed, as well as,the number of acres estimated to be developed each year, the number of square feet developed per acre ratio or"FAR", and the initial sales values per square foot for the commercial properties to be developed, based upon their knowledge and experience in developing other properties. The Developer anticipates that sales values will be increased by 2% for each year beyond 2005. Platted and developed lot values were estimated to be approximately 10% of residential and commercial market values(see page 6). NOTE 4) BASIS OF ACCOUNTING The basis of accounting for this forecast is the cash basis, which is a basis of accounting that is different from that allowed by the generally accepted accounting principles under which the District will prepare its financial statements. NOTE 5) PROPERTY TAXES The primary source of revenue or cash receipts will be ad valorem property taxes. Property taxes are to be determined annually by the District's Board of Directors and set by County Commissioners as to rate or levy based upon the assessed valuation of the property within the District. The Weld County Assessor determines the assessed valuation. The levy is expressed in terms of mills. A mill is 1/1,000 of the assessed valuation. The forecast assumes that the District will be able to set its initial mill levy at 45.000 mills for collection in 2007, for the combined purposes of debt service and administration. The initial mill levies for both the General Fund and the Debt Service Fund are forecasted to be reduced to lower levels in future years as displayed in the forecast. The Gallagher Amendment states that residential assessed values Statewide must be approximately 45% of total assessed values. When the market values of residential property increase faster than the values of nonresidential property, the residential assessment ratio must decline to keep the 45 percent/55 percent ratio. Page 13 THE SPRINGS METROPOLITAN DISTRICT (In the Formation Stage of Development) — SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES October 13,2005 NOTE 5) PROPERTY TAXES (continued) Pursuant to House Bill 05-1289,the residential assessment ratio will remain at 7.96%in 2005 for collection in 2006. According to information as set forth in the Colorado Legislative Council Staff Forecasts entitled "Assessed Value and Property Tax Projections" issued on December 20, 2004, the residential assessment ratio is projected to decline to 7.62% in 2007, and 7.39% in 2009. The projections of the Legislative Council Staff are estimates only, do not have the force of law,and may or may not occur as projected. This forecast has included the current residential assessment ratio of 7.96% effective for collections in 2008 and throughout the term of the forecast period, since it is assumed that the District's Board will increase the mill levy, to maintain a mill levy that produces tax revenue in relation to current assessed valuation equivalent to revenue generated by the initial levy of 45.000 mills as forecasted for collection year 2007. Per the District's Service Plan, the —, maximum mill levy for administration and operating expense is 6 mills, as adjusted by the Gallagher adjustment. The Limited Mill Levy for debt service is 50 mills, as adjusted by the Gallagher adjustment. The assessed valuation for the District is dependent upon the build-out schedule of the residential and commercial properties within the District. The Petitioners have based the estimate of build- out on their forecasted build-out schedule. The forecasted development build-out schedule and conversion to assessed valuation is presented as a schedule (see pages 4 through 6). The assessed valuation rate for raw ground and improved lots is 29% until a home is constructed. Commercial property is assessed at 29% of actual value. All residential property has been assumed to be assessed at the residential property rates as explained above. Increases to valuation for platted and partially finished lots and for the development of infrastructure within the District for improved lots held for build-out are included in the forecasted assessed valuation. No assessed valuation has been assumed for State Assessed property that may be owned by public utilities within the District. The beginning assessed value of the land totaling 157 acres, which constitutes the District, has been deemed to be immaterial for purposes of the forecast. The property taxes resultant from the above mill levy and assessed valuation have been reduced for the Weld County Treasurer's 1.5% fee for collection of the taxes, and further reduced by 0.5%to allow for uncollectible taxes. Page 14 THE SPRINGS METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES October 13,2005 NOTE 6) SPECIFIC OWNERSHIP TAXES Specific ownership taxes are set by the State and collected by the County Treasurer, primarily on vehicle licensing within the County as a whole. The specific ownership taxes are allocated by the County Treasurer to all taxing entities within the County. The forecast assumes that the District's share will be equal to approximately 10% of the total property taxes collected by the General and Debt Service Funds. NOTE 7) FACILITIES FEE The forecast anticipates that the Board of Directors will set a facilities fee, to be collected at the time of completion of the residential units and commercial properties, based upon $1,500 for each residential unit and on$0.50 per developed square foot for commercial property. NOTE 8) DEVELOPER ADVANCES The forecast assumes that the Developer will advance funds needed for organizational and construction costs to the District (see Note 12). To the extent that bond proceeds are available _ for organizational and construction payments in any year, the Developer advance would be reduced accordingly. In addition, to the extent that there are surplus cash balances that can be applied towards reducing any Developer advance without creating future cash deficits, the Developer advances will be reduced accordingly. The forecast does not display cash receipts for Developer advances for construction costs and bonds proceeds available for construction costs nor cash disbursements for construction costs. Accordingly, the forecast assumes that any Developer advances for construction will be repaid from bond proceeds and that construction costs will be funded by Developer advances and / or bond proceeds. Any Developer advances, which cannot be reimbursed, will be treated as Developer contributions. Under the terms of the Service Plan, the District may issue construction financing notes to the Developer and such notes may not bear interest. NOTE 9) DEVELOPER CONTRIBUTIONS The forecast assumes that the Developer will contribute funds to the District for administrative costs as shown on the summary page for the General Fund of the forecast. Page 15 THE SPRINGS METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES October 13,2005 NOTE 10) INTEREST INCOME The forecast includes interest income earned on monies that are forecasted to be on deposit or invested by the District at the prior year-end at an interest rate of 2%. Additional interest earned on deposits from bond proceeds, for payment of bond interest expense during an initial period (capitalized interest),has been included in the debt service schedules at 2.5%. The calculation of this interest is also shown as separate Schedules of Capitalized Bond Interest (see pages 8 and 10). NOTE 11) ADMINISTRATIVE DISBURSEMENTS Administrative expenditures include the services necessary to maintain the District's administrative viability such as legal, accounting and audit, general engineering, insurance, banking, meeting expense, and other administrative expenses. Administrative costs have been included in the forecast at $40,000 in 2006. Beginning in 2007, these disbursements have been increased for inflation by 1%per year throughout the term of the forecast. Should administrative costs exceed the forecasted amount, the Developer will contribute funds to the District for the shortfall. These administrative services are necessary as long as bonds are outstanding throughout the life of the District. NOTE 12) INFRASTRUCTURE IMPROVEMENTS The estimated cost of the capital infrastructure improvements is $5,549,789, as expressed in 2005 dollars, plus $1,126,567 to be paid to the Town's capital improvements fund. The forecast assumes that the Developer will advance funds for all infrastructure costs and be reimbursed from bond proceeds to the extent bonds can be issued, which may be less than the total eligible costs(see Note 8). Page 16 THE SPRINGS METROPOLITAN DISTRICT (In the Formation Stage of Development) SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND ACCOUNTING POLICIES October 13,2005 NOTE 12) INFRASTRUCTURE IMPROVEMENTS(continued) The capital infrastructure costs per the engineering estimate exceed the amount that can be reimbursed to the Developer under this Plan. The Petitioners expect that the District will allow — the Developer to: either advance funds to the District; or to actually construct the improvements under the District's supervision, for reimbursement by the District upon completion of the improvements to the extent bondable; or to contribute funds to the District, should costs exceed the District's capacity for repayment of such costs. The reimbursement of any additional costs is subject to the District's authorized indebtedness and other revenue available to the District. The amount of infrastructure costs not bondable within the limits of the proposed Service Plan would remain a responsibility of the Developer. There may be additional construction costs in the future. NOTE 13) DEBT SERVICE The District anticipates issuing general obligation bonds on June 1, 2006, in the amount of $2,270,000 and on December 1, 2008, in the amount of$3,480,000. The proceeds of such debt will be used for issuance costs, capitalized interest, and to fund the cost of capital infrastructure improvements or to reimburse the Developer for the advancement of those funds, to the extent possible (see Note 8). The bonds are assumed to bear interest at an estimated rate of 7.00% for both the Series 2006 Bonds and for the Series 2008 Bonds. The bond interest is payable semi- annually on June I and December 1, with annual principal payments on December 1 of each year. The bonds anticipate starting interest repayments on December 1, 2006 for the Series 2006 bonds and on June 1, 2009 for the Series 2008 Bonds, and per the scheduled maturities are payable over 30-year periods, with final payments on December 1, 2035 and 2038, respectively. Assumptions related to debt principal amounts, bond interest rates, issuance costs, capitalized interest amounts and related interest earned at 2.5%, and other related debt service costs for the proposed Series 2006 and Series 2008 Bonds have been provided to the Petitioners by Kirkpatrick Pettis,the proposed underwriter of the proposed bond issuances of the District. This information should be read in connection with the accompanying Accountant's Report and forecast of financial information. Page 17 ■ DRM REAL ESTATE ADVISORS,LLC October 18, 2005 Town of Firestone Town Planner 151 Grant Avenue P.O. Box 100 Firestone, Colorado 80520 and Mr. Dan Smith, Executive Vice President Mr. Gabriel Chou,Director of Planning Prominence Development Corporation P.O. Box 870 Firestone, Colorado Re: The Proposed Vogl North Development (Proposed residential/copnunercial subdivision development containing 348 single-family lots and 53,579 square feet of commercial space) NEC of Firestone Boulevard and Frontier Street Firestone, Colorado Dear Mssrs. Smith and Chou: I was engaged by Prominence Development Corporation to prepare a residential market analysis for the above referenced property for development planning. In preparing the analysis, I reviewed relavent portions of the Service Plan, dated October 7, 2005 for the proposed district. Included in the study, I have made an estimate of the projected absorption for the development based on historical and projected trends for the area. Included in the study, I have made an estimate of the projected absorption for the development based on historical and projected trends for the area. Based on the analysis presented within this market study, I have projected a rate of absorption for the subject's proposed 348 single-family lots to be in the area of 90 to 100 lots annually. I have projected a rate of absorption for the subject's proposed 53,579 square feet of commercial development to be between 40,000 and 50,000 square feet annually, upon conmiencement of the development. The rate of absorption is based on historical and projected trends for the area as well as the location of the property and the projected size of the lots to be marketed at the property. It should be noted that the projections relating to aborptions differ from that of the financing plan due to the fact that our estimate of absorption is based on current supply and demand levels, which are projected to increase in the future. In our research, we make projections based soley on current data, and rely only nominally on trended market projections. '— 4025 Automation Way,Unit F4 • Fort Collins,Colorado 80525 Phone (970) 267-2900 • Fax (970)530-0799 • DRM REAL ESTATE ADVISORS,LLC Please feel welcome to call anytime at the numbers as they appear below if you have any questions. Res ectfully submitted, �IREAL ESTATE ADVISORS,LLC Derek It Maunsell,MAI (970)214-8291 -Direct Principal Certified General Appraiser-State of Colorado CG40002154(12/31/07) PROMINENCE PARTNERS I,LLC October 7,2005 Board of Trustees Town of Firestone Post Office Box 100 Firestone, Colorado 80520 _ RE: Analysis of Absorption Potentials The Vogl development Dear Town Trustees: We have reviewed the above-referenced study conducted by DRM Real Estate Advisors, LLC and support its findings. The analysis of absorption potentials also satisfactorily confirms our projections and we request that it be admitted as a part of The Springs Metropolitan District formation application. Please do not hesitate to call with any questions you have about this correspondence. Sincerely, PROMINENCE PARTNERS I,LLC By: PROMINENCE DEVELOPMENT CORP.,Its Manager By //, Daniel S. Smith,Executive Vice President PROMINENCE PARTNERS I, LLC. • P.O. BOX 870 • FIRESTONE, CO • 80520 • USA PHONE: (303) 833-5322 • FAX: (303) 833-5748 • www.PROMINENCEDEVELOPMENT.com EXHIBIT H Underwriter's Letters Kirkpatrick Pettis A Mutual of Omaha Company October 7,2005 Town of Firestone 151 Grant Avenue Firestone, Colorado 80520 RE: Proposed The Springs Metropolitan District To Whom It May Concern: As part of the service plan approval process, you have asked about the relationship between the investment bankers and the proposed The Springs Metropolitan District. We are engaged with the petitioners of the proposed District as described by the attached Letter of Intent. We have the intention of serving as underwriters for the District's voter authorized debt once sufficient credit support can be identified based on assessed value or guarantees provided by the landowners. The structure represented in the financing plan involves non-rated bonds issued to a third party, which we believe will be marketable based on the growth assumptions also included in this plan. hi this proposed structure, the debt would be sold to institutional investors and secured by an escrow of bond proceeds,which would be released on a pro rata basis upon receipt of building permits. You also requested an explanation of the level of credit risk associated with the types of financing we are considering for this District. As with most start-up special Districts,this District expects to market bonds to third parties to raise capital for infrastructure before the entire project is complete. The level of risk taken by a bondholder and the interest rate required for the financing, decrease as development occurs. Our recent special district underwritings vary from bonds sold at 8% with land in the District sold to builders and no homes constructed to refunding bonds issued with most of the homes built at interest rates of 5% with "AAA" rated insurance. In the case of"AAA" rated, insured bonds,the underlying Districts generally have debt/AV ratios of 50%or less. The interest rate assumptions contained in the Service Plan are reasonable based on current market conditions. Because the financing in this District is intended to pay for public infrastructure,we issue bonds as close to the time the infrastructure is needed as possible. During the period when homes and commercial structures are being constructed but are not yet on the tax rolls,the District is projected to meet its debt service obligations with capitalized interest. While this does increase the bondholders' risk, the bondholders understand that risk and are compensated in the interest rate on the bonds. With regard to the Town's risk, we 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*ssharpAkpsp.com•tbishopetkosp.com 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 metropolitan district, one key criterion is the level of builder 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 sales activity, building permits and certificates of occupancy. This Service Plan includes an escrow mechanism with release of bond proceeds based on building permits in the District. We hope this letter helps to clarify the financing model represented in the financing plan and the current market for special district bonds. Please call if you have any questions or require further clarification. Sin ely, omas R. shop SamuLS Sh — Senior Vice President Vice President Kirkpatrick Pettis A Mutual of Omaha Company Kirkpatrick Pettis A Mutual of Omaha Company July 20,2004 Petitioners for The Springs Metropolitan District c/o Dan Smith Executive Vice-President Prominence Development Corp. PO Box 870 Firestone,CO 80520 RE: Letter of Intent—Proposed The Springs Metropolitan District Dear Petitioners: The petitioners are in the process of organizing the proposed The Springs Metropolitan District (the "District"). Once the District is organized it is anticipated that the District will authorize and issue improvement and/or refunding bonds (the "Bonds") pursuant to voter-approved election questions. The Petitioners desire to 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 District after it is 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 District management, Kirkpatrick Pettis will prepare a plan of expected development, future capital improvements,revenues, expenses, and debt repayment. Once such a plan is prepared and approved by the Proposed Board, various debt structures can be analyzed within the plan to determine what will work best for the District. Structuring. Once a financing structure has been selected by the Proposed Board, the terms of the debt (such as the sources of payment. the nature of the security, maturity schedule, the rights of redemption prior to maturity, etc.) must be determined, taking into account both the interests of the District and the expectations of investors. Legal Counsel. Legal counsel will be selected and engaged by the District to prepare the legal proceedings necessary to authorize the debt, to assist in the 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 88114.800-776-5777 Member NASD 8 SIPC * ssharpfakpsp.com'tbishop(p)kpso.com The Springs Metropolitan District Page 2 of 4 7/20/2004 preparation of disclosure documents necessary to sell the securities,and to render certain approving opinions when the securities are delivered. All fees and expenses of legal counsel selected hereunder shall be paid only from the proceeds derived upon sale of the Bonds. Ratings. The ratings which may be obtained for the bonds are likely to have a significant effect on the rates of interest at which the bonds can be sold. If it is determined to be in the District's best interest to obtain these ratings,Kirkpatrick Pettis will assist the District in preparing and submitting applications to the rating agencies along with detailed information about the District, the debt and any credit enhancement. Credit Enhancement. By providing investors with a guarantee of timely payments on the debt, for even a limited time period, the purchase of credit _ enhancement can produce a net reduction in financing costs. Kirkpatrick Pettis will assist the District in investigating the availability of bond insurance, letters of credit or other forms of credit enhancement and assist the District in determining the cost effectiveness of these products. Disclosure to Investors. In connection with the issuance of bonds by the District and the sale and delivery of securities to ultimate investors, material information about the District and the transaction must be compiled in a disclosure document for distribution to prospective purchasers. As set forth above under Legal Counsel, the District will engage the services of counsel to assist in the preparation of such disclosure documents and advise the District and Underwriter about sales practices, regulatory requirements, and security matters. If disclosure counsel is engaged as the District's counsel, Kirkpatrick Pettis, will expect to receive the benefit of their 10(b)-5 opinion as well. In contemplation of submitting an offer to underwrite the bonds, we will assist the District in making these arrangements. By accepting this letter and accepting our assistance in making these arrangements, the District will not incur any obligation except to pay from the Bond proceeds the expenses as provided in Sections 4 and 6 of this letter. Our active participation in making these arrangements should not and cannot be construed by the District as a promise to underwrite the bonds or as an assurance that the bonds can be sold. Section 2. Underwriting. At such time as the arrangements for the sale of the securities have been successfully completed, it is our intention to submit for consideration by the Petitioners our offer to underwrite the bonds. Our offer will be submitted in the form of a bond purchase agreement and will set forth terms of the purchase such as the rates of interest, the amount of any original issue premium or discount, our underwriting compensation(not to exceed 2 percent of the principal amount of the bonds),and the date and conditions for delivery of the bonds. Until the District accepts our offer,there will be "! r !_r. The Springs Metropolitan District Page 3 of 4 7/20/2004 no obligation for this firm to purchase the bonds from the District. In consideration for our work performed pursuant to Section 1, above, the District agrees that it will not consider other underwriting proposals unless Kirkpatrick Pettis has first declined to underwrite the transaction on terms and conditions acceptable to the District. Section 3. Remarketing. In the event that the District issues bonds that are remarketed within their term, the District will have to engage a remarketing agent qualified to remarket the bonds on each remarketing date. If an underwriting agreement is reached between Kirkpatrick Pettis and the District, Kirkpatrick Pettis will submit an offer to serve as remarketing agent to the District for compensation not to exceed .25 percent of the amount of bonds annually remarketed. In further consideration for our work performed pursuant to Section 1, above, the District agrees that as long as Kirkpatrick Pettis is the lead underwriter,it will provide Kirkpatrick Pettis with the option to submit a proposal to act as remarketing agent and that it will not consider other proposals to act as remarketing agent unless and until the Kirkpatrick Pettis proposal for remarketing has been rejected. Section 4. Payment of Expenses. Expenses will be incurred to make the arrangements for the sale of the bonds before their delivery and the receipt of proceeds by the District but such expenses will not be obligations of the District unless advance authorization has been obtained from the District. All of the expenses incurred in connection with the authorization, sale,and delivery of the bonds, including rating application. letter of credit fees and related expenses, insurance premiums, bond, disclosure and underwriter's counsel and our out-of-pocket expenses for any travel outside of Colorado shall be paid only from the proceeds derived upon sale of the Bonds. Section 5. Not an Offer to Buy. This letter of intent is not an offer to purchase or a guarantee that we will make an offer to purchase the District's bonds in the future. Our offer to purchase, if made, will only be made by a bond purchase agreement prepared by our counsel and reviewed by the District and its counsel after the successful conclusion of the pre-sale arrangements described in Section 1 and the completion of other preliminary matters. This letter serves to summarize the steps we hope will lead to an underwriting of bonds at a future date at which time both Kirkpatrick Pettis and the District will incur and assume additional obligations as set forth in the bond purchase agreement. Section 6. Private Placement of Debt. If the District determines that a private placement of debt to developer or other parties would be in its best interest, the District agrees it will utilize the services of Kirkpatrick Pettis as an advisor for a fee not to exceed 1%of the debt distributed. Section 7. Term of Letter Agreement. This letter agreement shall remain in full force and effect until such time as the Proposed Board of Directors of the District,after formal action by the Board, notifies Kirkpatrick Pettis in writing of its intent to terminate this letter agreement, provided that no such action or notice shall be effective until after July The Springs Metropolitan District Page 4 of 4 7/20/2004 1, 2006. Kirkpatrick Pettis may resign as investment banker to the District by providing written notification with no less than 60 days notice to the District. Section 8. Acceptance. The petitioners or other authorized officers of the developer may indicate their desire to proceed with the delivery of these investment banking services upon the basis set forth in this letter by executing one copy of this letter and returning it to us. Respectfully submitted, Kirkpatrick,Pettis,Smith,Polian Inc. Samuel R. SIM Thomas R.Bishop First Vice President Senior Vice President ACCEPTED this 2 0 thday of July 2004 Proposed The Springs Metropolitan District By Prominence Partners I, LLC, Developer/Petitioner By Promine7nce Develop ent Corp. , its Manager By live j„„ Authorized Officer Daniel S. Smith, Executive Vice-President _ EXHIBIT I Legal Counsel Letter iii tai: Miller, Gruber&Rosenbluth, LLC Dianne D.Miller* ATTORNEYS AT LAW wwwmgrlawfirm.com Jennifer L.Gruber* Monica A.Rosenbluth 700 17th Street,Suite 2200 Telephone: (303)285-5320 Denver,Colorado 80202 Facsimilr: (303)285-5330 *Admitted in Colorado and New Mexico October 7,2005 Town of Firestone Post Office Box 100 Firestone, Colorado 80520 -' RE: Organization of The Springs Metropolitan District This firm has acted as counsel to the Petitioners in connection with the organization of The Springs Metropolitan District (the "District"). Pursuant to the requirements of V.m. of the Service Plan for the District, this letter confirms that the petition for organization of the District filed with the Town on August 2, 2004, the Service Plan for the District, as approved on October 7, 2005, and the notice, hearing and other procedures in connection with the approval of the Service Plan,have met the requirements of the Special District Act, §§ 32-1-101, et seq., C.R.S., and that the provisions of the Service Plan, including, without limitation, provisions as to the structure and terms of the District's bonds, fees and revenue sources, are consistent with applicable provisions of tides 11 and 32, C.R.S.,and other applicable law. Please be advised, however, that this fum has not been engaged as bond counsel to the District, nor will this firm serve as bond counsel at any time for the District. This letter does not purport to offer any opinion of the type customarily required to be given by bond counsel with regard to any bond transaction of the District. This letter is limited to the use of the addressee as set forth above, and may not be relied upon by other parties or in connection with any future sale, resale or transfer of bonds and may be relied upon only as stated herein. This letter may not be used, quoted or referred to, in whole or in part, for any other purpose without the prior,written consent of the firm. Very truly yours, MILLEK GRUBER&ROSENBLUTH,LLC 771.4--& fi -�C / -goiczexttarn LGG The Springs\Service Plan 1LO1524 0773.0003 EXHIBIT J Bond Counsel Letter ATTORNEYS&COUNSELORS AT LAW 633 SEVENTEENTH STREET,SUITE 3000 �n DENVER,COLORADO 80202 Sherman & Howard L.L.C. TELEPHONE:303 297-2900 FAX:303 298-0940 OFFICES IN:COLORADO SPRINGS RENO•LAS VEGAS•PHOENIX October 19, 2005 Town of Firestone 151 Grant Avenue Box 100 Firestone, Colorado 80520 Re: The Springs Metropolitan District _ We have been asked to write this letter in our capacity as bond counsel to the proposed The Springs Metropolitan District(the "District"). The Service Plan for the District provides in part as follows: "The District will pay to the Town for deposit into the Town's capital improvements fund a total of One Million One Hundred Twenty-Six - Thousand Five Hundred Sixty-Seven Dollars($1,126,567.00)of the District's total net bond proceeds(the"Town contribution"),of which Four Hundred Thirty-Nine Thousand Three Hundred Sixty-One Dollars($439,361.00)shall be paid to the Town concurrently with the issuance and delivery of the first series of Bonds(anticipated to occur in 2006),and Six Hundred Eighty-Seven Thousand Two Hundred Six Dollars($687,206.00)shall be paid to the Town concurrently with the issuance and delivery of the second series of Bonds (anticipated to occur in 2008). By agreement between the Town and the District(to be evidenced by a supplement to the intergovernmental agreement between the Town and the District as provided in Article XIII and Exhibit N),the funds so paid to the Town shall be used by the Town to finance improvements (whether inside or outside the boundaries of the District) that the Town and the District would otherwise be empowered to construct, and for which the District is authorized to incur indebtedness(i.e.,streets,street lighting,traffic safety controls, water, landscaping, storm sewers and flood and surface drainage, or park and recreation improvements and facilities), which improvements shall be of benefit to the Town and the District and shall be specifically identified in an amendment to the Sherman & Howard L.L.C. Town of Firestone, Colorado October 19, 2005 Page 2 intergovernmental agreement between the Town and the District(the "IGA Amendment"),which IGA Amendment shall be fully executed before the District incurs any financial obligations of any kind." We have been asked to confirm that the foregoing is an acceptable use of bond proceeds. The answer is in the affirmative. The District is specifically authorized by statute to provide improvements which benefit the District,whether such improvement are inside our outside the boundaries of the District,and to enter into intergovernmental agreements. Whether the District provides such improvements directly,or does so by contracting with the Town,does not in our view affect the validity or tax-exempt status of the bonds. We know of no reason why tax restrictions on this use of bond proceeds would differ from tax restrictions generally applicable to other governmental bond issues for capital purposes. The foregoing presumes that the improvements are of the type the District is permitted to provide under the Service Plan and organizational documents,and are of benefit to the District and its residents. As with all bond issues,as a condition of giving our opinion on the bonds, we would need certification as to the use of all proceeds, including these proceeds. Such certification would be requested from the District and possibly from the Town,depending upon the circumstances;however,if the Town enters into an agreement to so apply such proceeds,we would rely upon the Town's promises thereunder unless we had knowledge that other factors called that reliance into question. I hope this responds to your request. If you have further questions,please feel free to call me. Sincerely, SHERMAN & HOWARD L.L.C. Blake T. Jordan,Esq. _ EXHIBIT K Part I -Developer Indemnity Letter Part II-District Indemnity Letter PROMINENCE PARTNERS I,LLC October 7,2005 Town of Firestone Post Office Box 100 Firestone, Colorado 80520 RE: The Springs Metropolitan District Ladies and Gentlemen: This Indemnity Letter (the "Indemnity Letter") is delivered by the undersigned Prominence Partners I, LLC, a Colorado limited liability company ("Prominence") 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 Springs Metropolitan District (the "District"). In consideration of the Town's approval of the Service Plan, Prominence, 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. Prominence 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. Prominence 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 Prominence, 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. Prominence 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 or protections provided by the Colorado Governmental Immunity Act, §§ 24-10-101, et seq., C.R.S., as from time to time amended, or otherwise available to the Town, its officers or its employees. PROMINENCE PARTNERS I, LLC. • P.O. BOX 870 • FIRESTONE, CO • 80520 • USA PHONE: (303) 833-5322 • FAX: (303) 833-5748 - www.PRomisEscEDEveLoPmENT.com n PROMINENCE _2_ October 7, 2005 2. Prominence hereby represents and warrants to the Town that it will be an accredited investor if and when it acquires any construction financing notes. 3. Prominence believes and represents that the assumptions, projections and forecasts contained in the District's financial plan (Article V and Exhibit G of the Service Plan) are reasonable. 4. Prominence hereby consents to the Town Disclaimer Statement contained in Exhibit M to the Service Plan, acknowledges the Town's right to modify the Town Disclaimer Statement, and waives and releases the Town from any claims Prominence 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). 5. It is understood and agreed, and Prominence hereby expressly acknowledges, that the Town, in acting to approve the Service Plan, has relied upon the provisions of this Indemnity Letter. 6. This Indemnity Letter has been duly authorized and executed on behalf of Prominence. Sincerely, PROMINENCE PARTNERS I,LLC By: PROMINENCE DEVELOPMENT CORP.,Its Manager By �„ JJ%I Daniel S. Smith,Executive Vice President PROMINENCE DEVELOPMENT CORP. • P.O. BOX 870 • FIRESTONE, CO • 80520 • USA PHONE: (303) 833-5322 • FAX: (303) 833-5748 • www.PAOMINENCEDEVELOPMENT.com , 2005 (Date of Organizational Meeting) Town of Firestone Post Office Box 100 Firestone, Colorado 80520 RE: The Springs Metropolitan District Ladies and Gentlemen: This Indemnity Letter (the "Indemnity Letter") is delivered by The Springs Metropolitan District (the "District") in order to comply with the Service Plan, including all amendments heretofore or hereafter made thereto (the "Service Plan") for the District. In consideration of the 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, Prominence Partners I, LLC, a Colorado limited liability company ("Prominence"), 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 or protections provided by the Colorado Governmental Immunity Act, §§ 24-10-101, et seq., C.R.S., as from lime 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 M 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 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, investor or lender in connection with 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 SPRINGS METROPOLITAN DISTRICT President The Spnngs/Service Plan JLG1528 0773.0003 _ EXHIBIT L Form of Disclosure Notice THE SPRINGS METROPOLITAN DISTRICT WELD COUNTY,COLORADO DISCLOSURE STATEMENT Pursuant to Article XII of the Service Plan of The Springs Metropolitan District DISTRICT ORGANIZATION: The Springs Metropolitan District (the "District"), Weld County, Colorado is a quasi- - municipal corporation and political subdivision of the State of Colorado duly organized and existing as a metropolitan district pursuant to Title 32, Colorado Revised Statutes. The District was declared organized and an existing metropolitan district on , 2005,pursuant to an Order and Decree Organizing District and Issuance of Certificates of Election for The Springs Metropolitan District, issued in the District Court of Weld County, Colorado. The Order and Decree was recorded in the records of the Weld County Clerk and Recorder on , 2005 at Reception# The District is located entirely within the corporate limits of the Town of Firestone, Colorado, in Weld County. The legal description of the property forming the boundaries of the District is described in Exhibit A. DISTRICT PURPOSE: The Springs Metropolitan District was organized as a "financing only" district for the purpose of financing streets, street lighting, traffic and safety controls, water, landscaping, storm sewers and flood and surface drainage, and park and recreation improvements, all in accordance with its Service Plan approved by the Board of Trustees of Firestone. When completed, improvements shall be dedicated to the Town of Firestone or other governmental entities, all for the use and benefit of residents and taxpayers, or operated and maintained by contract with an owners' Association formed for the Vogl North development. The District's Service Plan is on file and available for review at the office of the District's general counsel, Miller, Gruber & Rosenbluth, LLC, 700 17th Street, Suite 2200, Denver, Colorado 80202, and at the office of the Town Clerk, Town of Firestone, 151 Grant Avenue,Firestone,Colorado 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 of the property within the District. The levy is expressed in terms of mills. A mill is 1/1,000 of the _ assessed valuation, and a levy of one mill equals $1 of tax for each $1,000 of assessed value. The financial forecast for the District (as set forth in its Service Plan) assumes that the District will be able to set its tax levy at approximately forty-five (45.000) mills (or less) for 2007 through 2038 for debt service and administration purposes (subject to legally required changes in valuation ratios). Except for certain adjustments permitted by the Service Plan to compensate for such changes in valuation ratios, the District shall not impose a debt service mill levy in excess of fifty(50.000) mills and shall not impose a mill levy for administration, warranty maintenance and other operating expenses in excess of six (6.000) mills. District taxes are collected as part of the property tax bill from Weld County. THE SPRINGS METROPOLITAN DISTRICT President STATE OF COLORADO ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 200,by as President of The Springs Metropolitan District. WITNESS my hand and official seal. My commission expires: Notary Public EXHIBIT M Form of Town Disclaimer Statement TOWN OF FIRESTONE, COLORADO-DISCLAIMER STATEMENT As a requirement imposed in its formation process, The Springs Metropolitan District (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 . [Insert date of offering materials or date disclaimer statement is otherwise delivered, unless Town directs a different date]. 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 a 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 2005 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, bondholders, investors or lenders in evaluating the investment quality of the District's bonds or other financial obligations. The Service Plan and related agreements do not impose upon the Town any 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 or its Service Plan or any action or omission with respect thereto. EXHIBIT N Form of Intergovernmental Agreement between District and Town INTERGOVERNMENTAL AGREEMENT BY AND BETWEEN THE TOWN OF FIRESTONE, COLORADO AND THE SPRINGS METROPOLITAN DISTRICT This INTERGOVERNMENTAL AGREEMENT (the "Agreement") is entered into this day of 2005,by and between the TOWN OF FIRESTONE, COLORADO, a _ municipal corporation of the State of Colorado (the "Town"), and THE SPRINGS METROPOLITAN DISTRICT, a quasi-municipal corporation and political subdivision of the State of Colorado (the"District"), collectively referred to herein as the"Parties". RECITALS WHEREAS, the District was organized to finance certain public improvements, all as are more specifically set forth in the District's Service Plan, dated October 7, 2005, and approved by the Town on October 13, 2005,by Resolution No. 05-31 (the"Service Plan"); and WHEREAS, the Service Plan makes reference to and requires the execution of an intergovernmental agreement between the Town and the District; and WHEREAS, the Town and the District have determined it to be in the best interests of their respective taxpayers,residents and property owners to enter into this Agreement; NOW, THEREFORE, for and in consideration of the covenants and mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,the Parties hereto agree as follows: COVENANTS AND AGREEMENTS 1. APPLICATION OF LOCAL LAWS. The District hereby acknowledges that the property within its boundaries shall be subject to all ordinances, rules and regulations of the 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 DISTRICT. The District agrees that it is organized for the purpose of financing certain public improvements for the area within its boundaries only (except to the extent otherwise specifically provided in Article V.c of the Service Plan), which area is designated as the proposed Vogl North development, and that the District's purposes, powers, facilities, functions and activities are to be limited and governed by the Service Plan. The District shall fully comply with all provisions, requirements, restrictions and limitations of the Service Plan. The District is not intended to and shall not provide facilities or service outside its boundaries (except as otherwise specifically provided in Article V.c of the Service Plan). Further, the District is not intended to and shall not exist perpetually, but instead shall be dissolved in accordance with the Service Plan and this Agreement. The District shall not provide any services or facilities within any area of the District overlapping with the service area of another district without first obtaining the written consent of each and every district whose service area is so overlapped. 3. CHANGE IN BOUNDARIES. The District agrees that, as set forth in the Service Plan, inclusion of properties within, or any exclusion of properties from, its boundaries shall constitute a material modification of the Service Plan; any purported inclusion or exclusion that has not been approved by the Town pursuant to the procedures applicable to a material modification of the Service Plan shall be void and of no effect. 4. TOWN APPROVAL REQUIREMENTS; REVIEW OF DISTRICT SUBMITTALS. The District agrees that any Town approval requirements contained in the Service Plan (including, without limitation, any Service Plan provisions requiring that any change, request, action, event or occurrence be treated as a Service Plan amendment proposal or be deemed a "material modification" of the Service Plan) shall remain in full force and effect, and such 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. The District agrees to reimburse the Town for all reasonable administrative and consultant costs incurred by the Town for any Town review of reports, plans, submittals, proposed modifications or requests for administrative approvals, or other materials or requests provided to the Town by the District pursuant to the Service Plan, this Agreement, state law or the Firestone Municipal Code. The Town may require a deposit of such estimated costs. 5. OWNERSHIP OF IMPROVEMENTS; LIMITED FUNCTIONS. The Parties agree that the District shall be a "financing only" district and shall not be permitted to undertake ownership, operation or maintenance of any public improvements, facilities or services, except as specifically set forth in the Service Plan. All functions, activities, improvements, services and programs of the District are limited to those expressly authorized in the Service Plan, notwithstanding any different, additional or expanded powers or authority that may be granted to the District by any present or future statutory or regulatory provisions. 6. ALLOCATION OF FINANCING PROCEEDS. The Parties agree, and the Town's approval of the Service Plan is expressly conditioned upon the requirement, that a total of One Million One Hundred Twenty-Six Thousand Five Hundred Sixty-Seven Dollars ($1,126,567.00) will be allocated from the District's net bond financing proceeds to the Town's capital improvements fund, which proceeds shall be paid to the Town at the time proceeds are realized from the issuance of bonds as provided for in the Service Plan. Such allocations shall be made in the amounts and at the times set forth in Article V.c of the Service Plan, which Article is incorporated herein by reference as though set forth in full. Such allocations will be used by the Town to finance capital improvements (either within or outside the boundaries of the District) that the Town and the District would otherwise be empowered to construct, and for which the District is authorized to incur indebtedness i.e., streets, traffic safety controls, street lighting, water, storm drainage, park and recreation or landscaping improvements and facilities, which improvements shall be of benefit to the Town and the District and shall be specifically identified in an amendment to this Agreement which amendment shall be fully executed prior to the issuance of any District bonds. The District acknowledges and agrees that the provisions of this Agreement and the provisions of the Service Plan for concurrent allocation of bond proceeds to the Town's capital improvements fund for capital improvements are material considerations in, and conditions of, the Town's approval of the District's Service Plan, and that the Town has relied thereon in approving the District's Service Plan. Therefore, the District agrees that it shall include in and make available from the District's bond financing proceeds such One Million One Hundred Twenty-Six Thousand Five Hundred Sixty-Seven Dollars ($1,126,567.00) to be paid to the Town's capital improvements fund. The District further agrees that it shall not issue bonds without concurrently allocating and delivering to the Town the funds required by Article V.c of the Service Plan. The District further agrees that such delivery of bond proceeds to the Town shall be a condition of closing for each series of bonds. The District specifically agrees that the provisions of this Agreement and of the Service Plan for such concurrent allocation of bond proceeds to the Town shall run in favor of and shall be enforceable by the Town. The District represents and warrants that it has obtained all voter authorizations necessary to implement such provisions of this Agreement and the Service Plan, and that it will exercise its powers in accordance with and in furtherance of such provisions. 7. CONSOLIDATION. The District shall not file a request with the District Court to consolidate with another district without the prior written approval of the Town. 8. DISSOLUTION. The District agrees that it shall take all action necessary to dissolve the District upon payment or defeasance of the District's bonds or otherwise upon the request of the Town, all as provided in the Service Plan. If prior to the issuance of any bonds or the incurrence of any financial obligations by the District, the District wishes to dissolve in accordance with applicable law, the Town shall consent to such dissolution. 9. NOTICE OF MEETINGS. The District agrees that it shall submit a copy of the written notice of every regular or special meeting and work session of the District's Board of Directors to the Office of the Firestone Town Administrator, by mail, facsimile or hand delivery, to be received at least three (3) days prior to such meeting. The District agrees that it shall also submit a complete copy of meeting packet materials for any such meeting to the Office of the Firestone Town Administrator, by mail, facsimile or hand delivery, to be received at least one (1) day prior to such meeting. 10. ANNUAL REPORT; OTHER INFORMATION. The District shall be responsible for submitting to the Town an annual report pursuant to and as set forth in Article VII of the Service Plan. 11. ENTIRE AGREEMENT OF THE PARTIES. This written Agreement, together with the Service Plan, constitutes the entire agreement between the Parties and supersedes all prior written or oral agreements, negotiations, or representations and understandings of the Parties with respect to the subject matter contained herein. 12. 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. 13. 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 maybe available according to the laws and statutes of the State of Colorado. 14. VENUE. Venue for the trial of any action arising out of any dispute hereunder shall be in Weld County District Court. 15. 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. 16. EFFECT OF INVALIDITY. If any portion of this Agreement is held invalid or unenforceable for any reason by a court of competent jurisdiction as to either party or as to both Parties, such portion shall be deemed severable and its invalidity or its unenforceability shall not cause the entire agreement to be terminated. Further, with respect to any portion so held invalid or unenforceable, the District and Town agree to take such actions as may be necessary to achieve to the greatest degree possible the intent of the affected portion. 17. 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. 18. SUCCESSORS AND ASSIGNS. Subject to Paragraph 17 hereof, this Agreement and the rights and obligations created hereby shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns. [Remainder of page intentionally left blank]. THE SPRINGS METROPOLITAN DISTRICT By: President — ATTEST: By: Secretary TOWN OF FIRESTONE By: — Its: ATTEST: By: Its: The Spnngs\Service Plan ILG0910 0773 0003 EXHIBIT 0 Resolution of Town of Firestone Approving Service Plan J j OCT.24.2005 3:44PM NO.197 P.2 TOWN OF FIRESTONE, COUNTY OF WELD, STATE OF COLORADO IN RE THE ORGANIZATION OF THE SPRINGS METROPOLITAN DISTRICT IN THE TOWN OF FIRESTONE,COUNTY OF WELD, STATE OP COLORADO RESOLUTION NO. 05- .R 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 Plan for The Springs Metropolitan District,which hearing was held on October 13,2005;and WHEREAS, the Board of Trustees has considered the Service Plan and all other testimony and evidence presented at the hearing; and WHEREAS, based upon the testimony and evidence presented at the hearing, it appears that the Service Plan for The Springs Metropolitan District, 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 TiE 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 Prominence Partners I, LLC, a Colorado limited liability company (the "Developer"), that all of the requirements of Title 32, Article 1, Part 2, C.R.S,, as amended, relating to the filing of the proposed Service Plan for The Springs Metropolitan District have been fulfilled and that notice of the hearing was given in the time and manner required by the Town. ction 2. That, based on representations by and on behalf of the Developer, the Board of Trustees of the Town of Firestone, Colorado, has jurisdiction over the subject matter of this proposed special district pursuant to Title 32,Article 1,part 2, C.RS.,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 Plan and other evidence presented by and on behalf of the Developer,that: (a) There is sufficient existing and projected need for organ'7Pd service in the areas to be serviced by the proposed District; OCT.24.2005. 3.44PM NO.197 P.3 (b) The existing service in the area to be served by the proposed District is inadequate for present and projected needs; (c) The proposed special district is capable of providing economical and sufficient service to the area within its proposed boundaries; (d) The area to be included in the proposed District has, or will have, the financial ability to discharge the proposed indebtedness on a reasonable basis; and (e) The creation of the proposed District will be in the best interests of the area proposed to be served. Section 4. 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 Plan: (a) The Developer agrees 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 District (including notice as described in Section 32-1-304, C.R.S.). (b) The Developer agrees that,prior to the bearing 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 Developer 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 District shall fully comply with the provisions of Section 32-1-107(3), C.R.S. with respect to the overlapping of service areas. The District's authorization to provide services or facilities within any overlapping area is expressly conditioned upon the District first obtaining the written consent of each and every district whose service area is so overlapped. (d) Prior to the hearing date set by the District Court of Weld County pursuant to Section 32-1-304, C.R.S.,the fully and properly executed originals of the following documents will be submitted for the proposed District: the engineering estimates and certificate of probable costs; accountant's letters and forecasts; letter in support of market projections and absorption rates; underwriter's letter; legal counsel letter; bond counsel letter, and Developer's indemnity letter that are required under the Service Plan and set forth in Exhibits E,G,H, I,J,and K part I,to the Service Plan, shall be provided to the Town. (e) At its organizational meeting,the District shall execute its District indemnity ` letter, and the intergovernmental agreement with the Town("IGA")that are required under the Service Plan and set forth in Exhibits K part If,and N to the Service Plan, OCT.24.2005 3:44PM NO.197 P.4 and shall provide the fully executed originals of the District indemnity letters and the ICA,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 District be delayed until such conditions are met, and Developer has represented that it will not oppose such motion. Further, if any of the above-stated conditions (a) through (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 Plan of The Springs Metropolitan District, as set forth in Exhibit A to this Resolution(with text dated October 7,2005 and exhibits as submitted April 14, 2005), is 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 Developer for the purpose of filing in the District Court of Weld County for further proceedings concerning The Springs Metropolitan District. RESOLVED,ADOPTED AND APPROVED this 13 day of October,2005. 7o TOWN OF FIRESTONE, O E @Slat SEAS' IMic el P. Sim ne Mayor y He od Town Cl k OCT.24.2005 3:45PM NO.197 P.5 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 y3* day of October, 2005. IN WITNESS HEREOF, I have hereunto set my hand and the seal of the Town of Firestone, Colorado,this B-t^ day of October,2005. sTt7NNF /I N +.t wnC i SEAL OCT.24.2005 3:45PM - NO.197 P.6 EXIT A (Copy of Service Plan) OCT.24.2005 3:45PM NO.197 P.7 EXHIBIT B REVISIONS TO THE SPRINGS METROPOLITAN DISTRICT SERVICE PLAN (Firestone Board of Trustees Meeting, October 13,2005) Revisions to Service Plan Text Dated October 7,2005 And to Exhibits Submitted with Apri114,2005 Bound Submittal: 1. Page 1,line 9,insert"North" after"Vogl". 2. Page 2,line 4, strike"Area" 3. Page 15, 6th line under V.a.,change"V.d, below"to "V.e.,below." 4. Page 17,line 10, strike"as provided in the IGA." 5. Page 17, line 23,insert"Three Hundred"before"Dollars". 6. Page 18, line 14,change"dwelling units"to "Development Units". 7. Page 20, line 2,change"units"to"Development Units". 8. Page 20, line 13,change"dwelling units"to "Development Units". 9. Page 24, line 9, insert"(as limited below)"after"facilities fees". 10. Page 28, 10th line under V.i, change"not-to-exceed"to"which shall not exceed." 11. Page 33, line 10, insert "and, irrespective of whether any, some or all of the District's bonds have been issued, on or after December, 31, 2011," between "bonds"and"the Town". 12, Page 33, insert new paragraph after line 12, to read as follows: "If prior to the issuance of any bonds or the incurrence of any financial obligations by the District, the District wishes to dissolve in accordance with applicable law, the Town shall cooperate in such dissolution." 13. Exhibits E, G, H, I, J, and K part I: All letters within these Exhibits shall be re- dated reasonably close to the 10/13/05 hearing date. 14. Exhibit B: Use a revised map that clearly depicts the District boundaries. 15. Exhibit E: Provide revised or supplemental letter from Engineer confirming that cost estimates are based on construction to Town standards. 16. Exhibit G.Page 11,Note 1: first line of second paragraph, strike"Management of the District" and substitute "the Petitioners for formation of the District OCT.24.2005 3:45PM NO.197 P.8 (`Management')." Fourth line of same paragraph, substitute more recent date for April 13. 17. Exhibit G, Page 11, Note 1, 4"' paragraph, line 6, 2005 should be changed to 2008. 18. FYhibit G, Page 12, Note 2, first paragraph, line 8: Change "storm drainage" to the statutory term"storm sewers and flood and surface drainage". 19. Exhibit G, Page 12, Note 3, first paragraph, line 2: change "major property owner"to"sole property owner." 20. Exhibit G, Page 13, Note 5, third paragraph: At beginning of paragraph, insert sentence re H.B. 05-1289; delete references to 2005 from following sentence summarizing Legislative Council Staff Forecast, 21. Exhibit G, Page 14, Note 5, line 5 of first paragraph and line 2 of second paragraph: change"developed lots"to"improved lots." 22. Exhibit G, Page 15, Note 11, line 5: After period, insert the following sentence: "Should administrative costs exceed the forecasted amount, the Developer will _ contribute funds to the District for the shortfall." 23. Exhibit G, Page 16, Note 12: In first paragraph, delete phrase ", as expressed in 2005 dollars" from Line 2 and insert into Line 1 between "$5,549,789" and following comma. 24. Exhibit G, DRM letter: Add sentence or paragraph addressing commercial market projections. Also, in line following "Re:", correct name of development ("Vogl") and after first sentence, insert: "In preparing the analysis, I reviewed relevant portions of the Service Plan dated October 2005 [last submittal date]for the proposed District." 25. F hint G, Prominence letter: in second line, change "Analysis of Absorption Potentials"to"analysis of absorption potentials". 26. Exhibit H, second Kirkpatrick Pettis letter: Revise letter to be consistent with attached redline, or otherwise to be in a form acceptable to the Town Administrator in the Administrator's sole discretion. 27. Exhibit I: Add a period at end of letter. 28. Exhibit J: Submit revised, re-dated original that conforms quote to final version of Article V.c. The revised letter shall be in a form acceptable to the Town Administrator in the Administrator's sole discretion. In line immediately preceding quoted Service Plan text, delete "current draft of the". In first line on OCT.24.2005 3:45PM NO.197 P.9 second page, change"our"to "or". _ 29. Exhibit K-I, Developer indemnity letter: first page,4th line from bottom of page, change last word of line"and"to "or". 30. Fvhibit K-I, Developer indemnity letter: second page, after paragraph numbered 1, insert the following and re-number succeeding paragraphs: • "3. Prominence hereby represents and warrants to the Town that it will be an accredited investor if and when it acquires any construction financing notes." "4. Prominence believes and represents that the assumptions, projections and forecasts contained in the District's fitwnrial plan (Article V and Exhibit G of the Service Plan) are reasonable." 31. Exhibit K-II, District indemnity letter: first page, 3r° line from bottom of paragraph numbered 1, change"and"to"or". 32. Exhibit K-II, District indemnity letter: paragraph numbered 2, 6th line, delete "purchaser of'and substitute "purchaser, investor or lender in connection with 33. Exhibit L: Revise form IGA as shown on the attached redline. 34. Exhibit M, Town disclaimer statement: At end of first paragraph, insert the following explanatory note: "[Insert date of offering materials or date disclaimer statement is otherwise delivered unless Town directs a dierent date.]". 35. Exhibit M, Town disclaimer statement: At end of third paragraph, insert the following: "By purchasing or otherwise accepting any bond or other financial obligation of the District, the owner, holder, investor or lender 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 or its Service Plan or any action or omission with respect thereto." 36. Exhibit N: Revise form IGA as shown on the attached redline. 37. Revise warranty period reference throughout service plan from two to three years. Hello