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Home My WebLink About20050753.tiff MCGEADY SISNEROS, R C. ATTORNEYS AT LAW 1675 BROADWAY,SUITE 2)00 DENVER,COLORADO 80202 TELEPHONE:(3031 592-4380 FACSIMILE:13031592.4385 WWW.MCGEADYSISNEROS.COM MARYANN M.MCGEADY SPECIAL COUNSEL DARLENE SISNEROS MARY JO DOUGHERTY KENNETH ANNE K.LAPORTA N.LnPORTA MEGAN BECHER VALERIE D.BROMLEY RUSSELL W.DYKSTRA KATHRYN S.KANDAJACO }� GEORGE EL H.E O. L MURPHY February 24, 2005 GEORGE IHE C.MUR Weld County Clerk and Recorder 1402 17th Avenue Greeley, CO 80632 Re: The Hills Metropolitan District No. 1 - 3 Dear Clerk and Recorder: Pursuant to Section 32-1-306 C.R.S., I am enclosing a copy of the approved service plan for the above-referenced Districts to be retained in your office as a public record for public inspection and not recorded. If you have any questions or comments, please feel free to call. Very truly yours, MCGEADY SISNEROS,P.C. Julie Ellis Paralegal /jle Encls. 400036558.DOC v:1} C/u3 // L.O Nrc,1-rir.i5' 2005-0753 03-01 - °C- 00 OA-C-Ln`'� SERVICE PLAN FOR THE HILLS METROPOLITAN DISTRICT NO. 1 (FIRESTONE, COLORADO) Submitted: July 1, 2004 Resubmitted: August 26,2004 Resubmitted: September 13,2004 Approved: September 16,2004 (00025922.DOC v:4} TABLE OF CONTENTS Page I. INTRODUCTION 1 A. General Information 1 B. Need for the District 4 C. Proposed Structure 4 1. Multiple District Structure 4 2. Boundary and Adjustments; Consolidation 5 D. Proposed Land Use/Population Projections 6 II. DESCRIPTION OF PROPOSED IMPROVEMENTS AND SERVICES 6 A. Types of Improvements 7 1. Streets 8 2. Water 8 3. Safety Protection 9 4. Parks and Recreation 9 5. Other Powers 10 (a) Plan Amendments 11 (b) Phasing, Deferral 11 B. Standards of Construction/Statement of Compatibility 11 C. Dedication of Improvements to the Town 12 D. Ownership and Operation of Facilities by the District 13 E. Acquisition of Land for Public Improvements 14 F. Services to be Provided by other Governmental Entities 15 G. Integration 15 III. PURPOSE 15 IV. DESCRIPTION OF PROPOSED FACILITIES AND ESTIMATED COSTS 16 A. Type of Improvements and Preliminary Engineering Estimates 16 B. Regional Improvements/Intergovernmental Agreements 16 1. Regional Improvements 16 2. Intergovernmental Cost Sharing and Recovery Agreement 17 3. Voter Authorization 17 C. Limitation on Eminent Domain 18 V. FINANCIAL PLAN 18 A. Introduction/General 18 B. Debt Issuance 22 1. Issuance of Developer Bonds 23 (a) Maximum principal amount;no discount 25 (b) Term 25 (c) Interest Rate 25 (d) Subordination 25 (e) Discharge 26 (00025922DOC v:4} i (0 Transferability 26 2. Issuance of Non-Developer Bonds 27 (a) Secured and Unrated Non-Developer Bonds 27 (b) Development Threshold for Unrated Non-Developer Bonds 28 (c) Other Restrictions on Non-Developer Bonds 29 (i) Maximum Principal Amount 29 (ii) Term 29 (iii) Interest Rate 29 • (iv) Trustee 30 (v) Refunding Bonds 30 (vi) Required certification as to Saddleback Park 31 3. Cost-Sharing Obligations 31 4. Financial Estimates 31 C. Other Restrictions, Limitations and Requirements 32 1. No acceleration 32 2. Authorized Security for Debt 32 3. Limited Mill Levy and Principal Amount Limits 32 4. Transfers and Exchanges 33 5. Compliance with law,opinions 33 D. Debt Service and Administrative Mill Levies 33 E. Costs of District Administration and Operations 34 F. District Revenue Sources 35 G. Revenue-Sharing Payments to Town for Public Improvements 36 H. Economic Viability 39 I. Quinquennial Review 40 J. Letters 40 VI. LANDOWNERS' OBLIGATIONS AS TO PUBLIC IMPROVEMENTS 41 VII. ANNUAL REPORT 42 VIII. DISSOLUTION 43 IX. ELECTIONS 45 X. INDEMNITIES 46 XI. DISCLOSURE AND DISCLAIMER;NO THIRD PARTY RIGHTS 47 XII. INTERGOVERNMENTAL AGREEMENTS 47 XIII. CONSERVATION TRUST FUND 48 XIV. MODIFICATION OF SERVICE PLAN 48 XV. RESOLUTION OF APPROVAL 50 XVI. FAILURE TO COMPLY WITH SERVICE PLAN 50 (00025922.DOC v:4} ii XVII. SEVERABILITY 51 XVIII. CONCLUSION 51 XIX. CERTIFICATION 52 r t (00025922.DOC v:4) 111 �ti TABLE OF EXHIBITS EXHIBIT A Legal Description of Initial Property EXHIBIT A-1 District Map EXHIBIT B District,Development and Vicinity Map EXHIBIT C Description of Facilities and Costs EXHIBIT D Street and Safety Protection Improvements EXHIBIT E Drainage Improvements EXHIBIT F Park and Recreation Improvements EXHIBIT G Water System Improvements EXHIBIT H Financial Plan EXHIBIT I [Intentionally Omitted] EXHIBIT J Underwriter's Letter EXHIBIT K Letter from Counsel to the District EXHIBIT L Developer's Indemnity Letter and District's Indemnity Letter EXHIBIT M Disclosure Notice EXHIBIT N Form of Town Disclaimer 1 EXHIBIT 0 Form of Town IGA EXHIBIT P Form of District IGA �^ EXHIBIT Q Mill Levies of Overlapping Entities EXHIBIT R Resolution of Approval EXHIBIT S Letter from Bond Counsel 0 t00025922.DOC v:4} iv SERVICE PLAN FOR THE HILLS METROPOLITAN DISTRICT NO. 1 I. INTRODUCTION A. General Information Pursuant to the requirements of the Special District Act, Section 32-1-101, et seq., C.R.S., this Service Plan(together with all Exhibits hereto, the"Service Plan")consists of a financial and jurisdictional analysis demonstrating how the proposed facilities and services of the . proposed The Hills Metropolitan District No. 1 (the"District") will be constructed and financed. The District is to serve as a"financing only" district to finance certain street, safety protection, water, and park and recreation improvements for or in connection with the approximately Six Hundred(600) acre Saddleback Hills Lake & Conservancy Limited Liability Company development(the"Development"). The District'shall be authorized to provide only the limited facilities and to -- perform only the limited functions set forth in this Service Plan. As set forth above, the District shall serve as a"financing only"district and does not intend to operate as a competing government with the Town of Firestone(the"Town"). All improvements financed,constructed or installed by the District, except as may be authorized pursuant to Article II.D. or an amendment to this Service Plan, shall be dedicated and conveyed to the Town or its designee upon completion,and upon expiration of the District's warranty obligations, such improvements will be operated and/or maintained by the Town or such designee. It is intended that the District provide for the financing of the Improvements (defined herein), but it is not intended that the District have perpetual existence. The District will be dissolved when its financial obligations are paid or provided for, or when the Town requests dissolution,provided then-applicable statutory requirements are met, all as further described in Article VIII of this Service Plan. The {00025922.DOC v:4) District's financing of the Improvements will benefit the residents of the Development and the Town's residents because such financing will assist in the completion of regional improvements serving the constituents of both the Town and the Development. Except as specified in or pursuant to this Service Plan, the District shall not construct or own any improvements, shall not provide for any maintenance, repair, or operation of any improvements, and shall not perform any services,without the consent of the Town as evidenced by a resolution of approval of the Town's Board of Trustees. In addition, the District will not contract with any other governmental entity to receive any services which are or may ` become available from the Town, or to provide any services to or within any other governmental entity. The District shall comply with the requirement of Section 32-1-107, C.R.S. The property within the District will receive water service from the Town and no other source, and sanitary sewer service from Tri-Area Sanitation District("Tri-Area Sanitation"). It is expected that the Frederick-Firestone Fire Protection District will provide fire protection services to the District and the Town will provide police protection services. The Development is entirely within the boundaries of the County of Weld(the "County"), the Town, Central Weld County Water District("Central Weld"), and Frederick- -a Firestone Fire Protection District. A chart setting forth mill levies of overlapping entities is attached hereto as Exhibit Q. The Development will be developed into a mixed-use planned community with single and multi-family residences, commercial uses and public uses. Other compatible uses as allowed by the zoning may also be incorporated. This Service Plan has been prepared by Saddleback Hills Lake &Conservancy Limited Liability Company(the"Developer")and the following participants listed below. All (00025922.DOC v:4) 2 property within the District is currently owned by Saddleback Hills Lake&Conservancy Limited Liability Company. The term"Developer"as it is used herein shall refer to Saddleback Hills Lake&Conservancy Limited Liability Company, as well as any successors or assigns of such entity; provided that any such successors and assigns must accept all duties and obligations contained or referred to in or relating to this Service Plan, and must re-execute the indemnity letter(Exhibit L) in form satisfactory to the Town and provide such other written assurances of acceptance of such duties and obligations as may be requested by the Town. District Counsel: Darlene Sisneros Jacqueline C. Murphy McGeady Sisneros, P.C. • - 1675 Broadway, Suite 2100 Denver, CO 80202 Phone: (303) 592-4380 Fax: (303) 592-4385 Landowner/Developer: Saddleback Hills Lake&Conservancy Limited Liability Company 5460 S. Quebec Street, Suite 300 Greenwood Village, CO 80111 • Phone: (303) 721-1516 Fax: (303) 770-7383 Financial Advisor/Underwriter: Samuel R. Sharp Kirkpatrick Pettis Smith Polian, Inc. 1600 Broadway, Suite 1100 Denver, CO 80202 Phone: (303) 764-5786 Fax: (303) 764-5770 (00025922.DOC v:4) 3 Engineer: Jim Jannicke John S. Strandberg CVL Consultants, Inc. 7901 E. Belleview Ave., Suite 150 Englewood, CO 80111 Phone: (303)482-9526 Fax: (303)482-9586 Bond Counsel: Saran= Maxwell Kutak Rock LLP 1801 California, Suite 3100 Denver, CO 80202 Phone: (303) 297-2400 Fax: (303) 292-7799 District Accountant: John Simmons J.W. Simmons &Associates, P.C. 9155 E. Nichols Ave#330 Englewood, CO 80111-0834 B. Need for the District The Property, as hereinafter defined,.is now vacant and is not presently served by the Improvements. Neither the Town,the County, nor any other special district, other than the Districts, has plans to provide the Improvements within a reasonable time and on a comparable basis. Therefore, it is necessary that the District be organized to provide the inhabitants of the Development with the Improvements. C. Proposed Structure 1. Multiple District Structure. Services will be provided to the Development by three metropolitan districts, the District, The Hills Metropolitan District No. 2("Hills No. 2"), and The Hills Metropolitan District No. 3 ("Hills No. 3")(the District, Hills No. 2, and Hills No. 3 shall be referred to collectively as the"Districts"). The Districts, collectively, will (00025922.DOC v..4} 4 undertake the financing and construction of the Improvements in sequential order(i.e., the District will proceed with initial construction, then Hills No. 2,etc.), and that the Districts will share certain regional infrastructure costs pursuant to the District IGA more specifically described in Article IV.B.2 herein. The formation of multiple special districts for this Development provides the following advantages: 1) those who benefit from the Improvements pay for them; 2)the structure ensures that the commitments made to the Town regarding the installation of public infrastructure and contributions to Town projects will be satisfied; 3)no District is compelled to finance the Improvements in advance of its need, because additional Districts are available to undertake financing for the Improvements;4)the use of tax exempt bonds to construct public infrastructure helps keep initial housing costs at a reasonable level; 5) the structure assures well planned phased development; 6)the structure allows flexibility to address changing needs and expectations over time; 7) the structure allows the inhabitants to vote for representatives on the board of directors of the Districts and run for the board within several years. 2. Boundary and Adjustments; Consolidation. The area to be included within the boundaries of the District is located entirely within the Town and the Development, and is approximately 345 acres(the"Property"). A legal description of the Property is attached hereto as Exhibit A and a map of the Property is attached hereto as Exhibit A-1. A vicinity map is attached as Exhibit B. The District shall be required to obtain written approval from the Town of a Service Plan modification prior to any inclusion or exclusion of property to or from the District, or any other change in its boundaries. Any such approval may be granted or denied by resolution of the Town Board of Trustees, in its discretion. Any inclusion may be on the condition that all property originally in the District remain in the District, and on such other (00025922.DOC v:4) 5 conditions as the Town may impose. My exclusion maybe on the condition that there is no detriment to the remaining residents and taxpayers within the District, or to the District's bondholders, and on such other conditions as the Town may impose. No changes in the boundaries of the District shall be made,unless the prior written approval of the Board of Trustees has been obtained as part of a Service Plan modification, as provided herein. Upon approval from the Town,any exclusions and inclusions will be processed in accordance with parts 4 and 5 of Article 1,Title 32,C.R.S. The District shall not include any property which has not been annexed by the Town. The District shall not file a request with the District Court to consolidate with another district without the prior written approval of the Board of Trustees. D. Proposed Land Use/Population Projections Based on the preliminary planned unit development("PUD") plan for the Development,the Property is anticipated to include 769 single family residential units. At an estimated three persons per residence,this would result in a resident population of approximately .2,307 persons in the District based upon proposed single family zoning. Hills No.2 is anticipated to include 648 single family residential units. Hills No. 3 is anticipated to include 492,446 square feet of commercial development. It is acknowledged that Town development approvals and requirements may affect the foregoing number of anticipated residential units and the foregoing estimates of population and commercial density. II. DESCRIPTION OF PROPOSED IMPROVEMENTS AND SERVICES The following paragraph provides a description of the proposed services which the District will be empowered to provide. The District is authorized to finance the construction of those categories of improvements described below, both within and without the District, for the (00025922.DOC v:4} 6 • purpose of implementing the provisions of Article V.G, which provides for District-Town revenue sharing for capital improvements benefiting both the Town and the District. To the extent this Service Plan otherwise authorizes improvements or facilities without the boundaries of the District, such improvements or facilities may be pursued only if authorized pursuant to the Town IGA and, if applicable, the District IGA, as defined herein. A. Types of Improvements The District shall have the authority to provide for the design, acquisition, construction, installation and financing of certain street,water, safety protection,and park and recreation facilities and improvements within and without the boundaries of the District, as generally described and depicted on Exhibits C through G and as more specifically set forth on the Town-approved final plans for the Development("Improvements"). The District shall not have the authority to provide any other types of facilities, improvements or services other than the Town-approved Improvements. Exhibit C generally describes the Improvements and lists each type of improvement planned to be provided by the District for the Development,the phasing of construction of the Improvements,and the costs in current dollars. Exhibit C also includes anticipated costs for water rights acquisition, and improvement costs for the Saddleback Park(defined herein)proposed to be constructed by the District or Developer, as further described in Article II.A.4. An explanation of the methods,basis, and/or assumptions used to prepare the above estimates is also included in Exhibit C, along with an engineer's statement of reasonableness as to the costs set forth in Exhibit C. The Improvements are further generally depicted and described in Exhibits D through G. The exact design, subphasing of construction and location of the Improvements will be determined at the time of final platting, and such decisions shall not be considered to be a material modification of the Service Plan; provided, {00025922.DOC v:4} 7 however, that Saddleback Park shall be completed in accordance with the Phasing Plan(also defined herein) unless otherwise agreed in writing by the Town. 1. Streets. The District shall dedicate and convey all street improvements to the Town for ownership and maintenance after construction, inspection,completion of the District's warranty obligation, and final acceptance of the improvements by the Town. Such dedications and conveyances shall occur as phases of the Development are completed in accordance with the subdivision requirements of the Town. Unless otherwise directed by the Town, all streetscaping improvements, upon the consent of the Town, will be maintained by the District or a homeowners or owners association. To the extent the Town permits or requires the District to own any landscaping improvements, the District shall have the authority to maintain such improvements. 2. Water. The Development will receive potable water service from the Town and no other source. The District,together with the Developer, may finance, design, construct,and install certain Town water system improvements and facilities located within the boundaries of the District. However, all water system improvements shall be dedicated and conveyed to, and owned by the Town, and shall be maintained by the Town upon acceptance and completion of the District's warranty obligations. All water rights for water service to the Property shall be owned by the Town; except as set forth below, the District will not purchase, own, manage, adjudicate,or develop any water rights or water resources. The District shall have the right to finance the acquisition of water rights which must be dedicated to the Town for provision of Town water service to the Property provided, )00025922.DOC v:4) 8 however, that such rights shall be conveyed and dedicated free and clear of all liens and encumbrances to the Town at the time of plat approval. It is acknowledged that no subdivision plat or other development proposal shall receive final approval until the Town becomes the titled owner, free and clear of all liens and encumbrances, of all water required for the area to be planed or developed. Upon consent of the Town, the District shall have the authority to retain ` water rights for a non-potable raw water irrigation system, and to finance and install such a system. Also upon consent of the Town, such non-potable raw water irrigation system and related water rights may be owned,operated, and maintained by the District or a homeowners' association. Any consent required in connection with the raw water irrigation system shall be evidenced by a written resolution and agreement by and with the Board of Trustees. To the extent required by Section 32-1-107, C.R.S., the District will obtain the consent of Central Weld. 3. Safety Protection. Unless otherwise directed by the Town, all safety protection improvements shall be dedicated to the Town for ownership and maintenance in accordance with the procedures set forth below. 4. Parks and Recreation. The Financial Plan contemplates the construction of a park("Saddleback Park"), which Developer has agreed to convey to the Town and construct pursuant to a First Amendment to Annexation Agreement for the property included in the District, Hills No. 2 and Hills No. 3 ("Park Agreement"). The Saddleback Park property shall be conveyed by the Developer to the Town at the time of the first final plat for the Development, as further provided in the Park Agreement. The Developer or the Districts shall construct those certain park facilities and improvements at Saddleback Park that are generally described in the phasing plan set forth in Exhibit F,and any Town-approved modifications thereof(the"Phasing Plan"), and generally depicted in the park concept plan in Exhibit F, and any Town-approved (00025922.DOC v:4) 9 modifications thereof("Concept Plan"). Such facilities and improvements are hereafter referred to as the"Saddleback Park Improvements." The Town may require modifications to the Saddleback Park Improvements as set forth in the Park Agreement and Town IGA. To the extent the Districts undertake the construction of the Saddleback Park Improvements,such improvements shall be completed in strict compliance with the Phasing Plan, and the Districts' failure to comply with the Phasing Plan shall constitute a material modification as set forth in Article XIV. If the Saddleback Park Improvements are financed and duly implemented in compliance with the Phasing Plan, then Certified Costs(defined below) for such Improvements may be credited against the District's revenue-sharing obligation to the extent and as provided in V.G, below. All park and recreation improvements and facilities shall be dedicated and conveyed to the Town or its designee and maintained by the Town or its designee upon acceptance and completion of the District's warranty obligations. Notwithstanding the foregoing,certain park and recreation facilities may, with the consent and direction of the Town (as evidenced by a written resolution and agreement by and with the Board of Trustees),be owned by the District and maintained by the District, the Town, a homeowners association or the Carbon Valley Park and Recreation District ("Recreation District"). To the extent the District owns any park and recreation improvements, it shall have the authority to maintain such improvements. To the extent required by Section 32-1-107(3), C.R.S., the District will obtain the consent of the Recreation District. 5. Other Powers. In addition to the enumerated powers, the Board of Directors of the District shall also have the following authority: {00025922.DOC v:4} 10 (a) Plan Amendments. To amend the Service Plan as needed,with the prior written approval of the Town, subject to the appropriate statutory procedures and subject to the provisions of Article XIV hereof (b) Phasing, Deferral. Subject to the provisions of this Section II.A.5 and Articles VI and XIV hereof, to defer, forego, or reschedule the financing and construction of Improvements to the extent consistent with then existing land uses for the Development approved by the Town, and in compliance with any phasing plan and PUD plans approved for the Development and any Town development standards, to better accommodate the pace of growth, resource availability, and potential inclusions of property within the District. Notwithstanding the foregoing, if the District undertakes the construction of the Saddleback Park Improvements, the District shall strictly comply with the Phasing Plan for completion of the — Saddleback Park Improvements and may not defer, forego, or reschedule the financing or construction of the Saddleback Park Improvements unless the District has first obtained a Town- approved modification of the Phasing Plan. — B. Standards of Construction/Statement of Compatibility The Improvements shall be designed and constructed solely in accordance with the standards and specifications established by the Town and in effect from time to time, and with the applicable standards and specifications of other governmental entities having jurisdiction. The drainage facilities as set forth in Exhibit E shall be constructed in accordance with the standards and specifications established by Tri-Area Sanitation. The Improvements — shall be compatible with applicable standards, specifications and requirements of the Town and other governmental entities having jurisdiction. Such other entities include,but are not limited to, Central Weld,Tri-Area Sanitation, the federal government, and the State of Colorado. The (00025922.DOC v:4( 11 District and its engineers have and will design the Improvements to meet such standards, specifications and compatibility requirements of the Town and such other governmental entities. The District will obtain approval of civil engineering plans and permits for construction and installation of the Improvements from the Town and from Tri-Area Sanitation or other governmental entities, as applicable,prior to the construction or•installation of such Improvements. The District shall be subject to all applicable provisions of the Firestone Municipal Code and to all Town rules, regulations,and policies with respect to the conduct of its work on the Improvements, as in effect from time to time. The District shall obtain all permits, licenses, permissions and approvals required by the Town, including but not limited to right-of- way permits, development plan approvals, and utility and construction plan approvals. C. Dedication of Improvements to the Town Except to the extent otherwise specifically provided herein, the District shall dedicate and convey to the Town or its designee all of the Improvements, together with necessary rights-of-way, fee interests and easements. The Improvements, easements and rights- - of-way shall be conveyed to the Town or its designee immediately upon completion of construction, installation and expiration of the two(2) year warranty period that commences after the Town has issued an Initial Acceptance as set forth below. The Improvements and all necessary rights-of-way, fee interests and easements shall be conveyed and dedicated to the Town or its designee by instruments acceptable to the Town, free and clear of all liens and encumbrances, except those which are acceptable to the Town in its sole discretion. Failure to comply with the requirements of this Article ILC. shall be deemed to be an unauthorized material modification of this Service Plan. loao2ss22.DOC v:41 12 Once an Improvement to be dedicated to the Town is constructed and installed, the Town shall issue an"Initial Acceptance"letter stating that the Improvement has been constructed or installed in conformance with the Town's standards, or shall issue a letter stating the corrections necessary for the issuance of such an"Initial Acceptance"letter. The District shall promptly undertake any necessary corrections. Upon issuance of the"Initial Acceptance" letter, the Improvements shall be warranted for two (2)calendar years from the date of such "Initial Acceptance,"during which time the District shall, at its expense, maintain the Improvements and correct all deficiencies therein as directed by the Town. At the conclusion of such two (2) year period, the Town shall issue a"Final Acceptance" letter if the Improvements conform to the Town's specifications and standards,or shall issue a letter stating the corrections necessary for the issuance of such a"Final Acceptance" letter. The District shall promptly undertake any necessary corrections. A"Final Acceptance Closing" shall then be arranged and held (such closing in no event to occur more than 120 days after the issuance of the"Final Acceptance" letter), at which time the Town will issue a"Final Acceptance" for the Improvements to be acceptedby it, and the District will execute and deliver to the Town all necessary instruments to dedicate and convey to the Town the Improvements, and all necessary rights-of-way, fee interests and easements. — D. Ownership and Operation of Facilities by the District The District shall serve as a"financing only"District and shall not be authorized to own or operate any Improvements, other than as necessary to permit the financing and construction thereof, except through approval by the Town by resolution or through a Town- approved amendment to this Service Plan. Notwithstanding the foregoing, the Town may agree or require that specific landscaping improvements, subdivision signage, open space/park tracts, a (00025922.DOC v:4} 13 raw-water irrigation system or certain other Improvements be retained by the District and operated and maintained by the District. Town consent to any such District ownership or operation shall be evidenced by a written resolution and agreement by and with the Board of Trustees. In such event, the District may contract with a homeowners' association for the operation and maintenance of such improvements. Any contract with the homeowners' association must be approved by the Town in advance, and the Town may require assurances that the homeowners' association accepts the operation and maintenance obligations and has the financial ability to undertake such obligations. In addition, upon request by the Town,the District will dedicate and convey to the Town or its designee, any Improvements which the District is otherwise obligated to operate and maintain, so that the Town or its designee may operate and maintain such Improvements. E. Acquisition of Land for Public Improvements The District shall acquire at no cost to the Town all lands or interests in land required by the Town for construction of the Improvements. Such land or interests in land may be acquired by the District by instruments of conveyance and/or plat dedication. All such land and interests in land shall be conveyed to the Town or its designee at no cost to the Town at such times and by such instruments of conveyance as the Town may reasonably require(but in no event shall such conveyances be made later than the"Final Acceptance Closing"described in Article II.C. above), free and clear of all liens and encumbrances,except those which are acceptable to the Town. Exceptions must be approved by the Town in advance and in writing. Failure to comply with this provision shall be deemed to be an unauthorized material modification of this Service Plan. (0002$922.DOC v:4) 14 F. Services to be Provided by other Governmental Entities The District proposes to finance, construct, and install the Improvements,but is not authorized to and will not provide any ongoing services within the District, with the limited potential exception of ongoing ownership,maintenance and operation of specific landscaping improvements, subdivision signage, open space/park tracts, or certain other improvements at the Town's election, as provided herein. The District shall cooperate with the Town and the Recreation District to incorporate the District into the Recreation District and to obtain a resolution from the Recreation District consenting to the overlapping boundaries for financing purposes only. Except as may be allowed by the Town as provided above,the District shall not provide ongoing park and recreation services. Sewer services shall be provided by Tri-Area Sanitation. Nothing herein shall limit or discharge the District's responsibilities for operation, maintenance and repair of public improvements prior to their acceptance by the Town and conveyance to the Town or its designee, or limit or discharge the District's warranty obligations. G. Integration The Improvements shall be constructed so as to be integrated with existing and planned facilities and improvements of the Town and other entities providing service to the Development. The District shall obtain from such other serving entities approval of the proposed plans for the Improvements. The District shall provide the Town with copies of any submittals to such entities at the time of their submittal, and with copies of any approvals from such entities upon receipt. III. PURPOSE The District will finance the construction of the Improvements for the Development and certain regional public improvements. The District's financing of the Improvements and certain (00025922.DOC v:4) 15 — regional public improvements will benefit the residents of the Development and the Town's residents because such financing will assist in the completion of regional improvements serving the constituents of both the Town and the Development. IV. DESCRIPTION OF PROPOSED FACILITIES AND ESTIMATED COSTS A. Type of Improvements and Preliminary Engineering Estimates — A general description of the Improvements, including estimated costs of the Improvements and water rights acquisition are set forth in Exhibit C attached hereto. Exhibits D through G include facility maps and preliminary drawings for the Improvements. As set forth in Exhibit C, the estimated cost of the Improvements exceeds the amount of debt anticipated to be issued in accordance with the Financial Plan. As contemplated by the Financial Plan the other Districts will be contributing funds to the District for regional improvements (i.e., cost sharing). To the extent that the cost of the Improvements cannot be financed with bond proceeds or cost sharing contributions,the Developer shall be required to pay such costs, as set forth in Article V. The Town is not responsible for assuming any of the costs of any Improvements necessary for — service to the proposed Development. B. Regional Improvements/Intergovernmental Agreements 1. Regional Improvements. Subject to the requirements of Article XII of this Service Plan, the District may participate in intergovernmental agreements with other governmental entities, including,but not limited to, the Town,Central Weld, Tri-Area Sanitation,the Recreation District, other special districts or adjacent property owners to share the costs of regional improvements or recoup advanced costs for regional improvements benefiting others,provided that any such regional improvements are included in the Improvements or are otherwise authorized pursuant to an agreement with the Town. Except for the Town IGA , all (00025922.DOC v:4) 16 intergovernmental agreements are subject to additional Town approval as provided in Article XII hereof. — 2. Intergovernmental Cost Sharing and Recovery Agreement. The Districts shall also enter into an Intergovernmental Cost Sharing and Recovery Agreement(the"District IGA"), which shall govern the relationships between and among the three districts with respect to the financing and construction of Improvements which are regional improvements. In the District IGA,the Districts acknowledge that the Improvements include regional improvements that will benefit some or all of the Districts, and that development within the Districts is not expected to proceed at the same time. Therefore, the District IGA establishes a mechanism whereby the Districts may cooperatively fund, construct and install certain of the Improvements which are regional improvements. A draft of the District IGA is set forth in Exhibit P; the final — form of the District IGA shall be subject to review and approval by the Town prior to execution by the Districts. The fully executed District IGA shall be provided to the Town upon execution. It is anticipated that the District will proceed with construction in advance of the other Districts and will receive cost sharing contributions from other Districts in the amount of approximately Nine Million Five Hundred Nineteen Thousand Six Hundred Fifty Dollars ($9,519,650), as set forth in the Financial Plan(defined below). 3. Voter Authorization. To the extent necessary to comply with statutory and/or Constitutional requirements for approval of debt or long-term financial obligations, the terms of the aforementioned intergovernmental agreements and any other intergovernmental agreement deemed necessary to effectuate the long-term plans of the District will be submitted to the electors of the District for approval. The District shall have the authority to obtain the {00025922.DOC v:4} 17 required voter authorization in order to exercise its rights and obligations under such agreements but may not enter into the agreements without prior written approval of the Town. C. Limitation on Eminent Domain The District shall not exercise any power of dominant eminent domain against the Town, and shall not exercise any power of eminent domain without the prior written consent of the Town with the sole exception that the District shall have the authority to exercise the power of eminent domain(but not against the Town) for the sole purpose of acquiring interests in real estate(excluding water rights)to secure the delivery of non-potable water to the Development if the Town authorizes the use of a non-potable raw water irrigation system for the Development. The exercise of the power of eminent domain by the District, without the prior written consent of the Town,other than as permitted by the immediately preceding sentence, shall be considered an unauthorized material modification of this Service Plan. V. FINANCIAL PLAN A. Introduction/General This Article V,together with Exhibit H attached to and incorporated in this Service Plan, constitutes the financial plan for the District required by Section 32-1-202(2)(b), C.R.S. (the"Financial Plan"). The Financial Plan describes the nature, basis, method of funding, limitations on debt and mill levy limitations associated with the District's public improvements program and other activities. For purposes of this Service Plan, the terms"debt"and "indebtedness" include all borrowings or other financial obligations of the District, regardless of form, type, terms or security(excluding District construction contracts for which funds have been appropriated and excluding unsecured payment obligations incurred in the ordinary course of business which do not constitute borrowing and which are to be paid from current revenues (00025922.DOC v:4) 18 within the same budget year in which incurred). All District financial obligations, whether "debt"or"indebtedness"or not, must be consistent with this Service Plan. Exhibit H contains a Summary of Significant Assumptions and Accounting Policies along with alternative financing scenarios associated with both variable rate/rated financing("Alternative A"; see V.B(2)(a)"Secured and Unrated Non-Developer Bonds"below) and non-rated fixed rate financing ("Alternative B"; see V.B(2)(b)"Development Threshold for Unrated Non-Developer Bonds"below). Both of these alternative financing scenarios include all proposed debt and estimated interest rates and discounts, estimated costs of the District's administration and the District's limited operations and maintenance activities, and other major expenses related to the organization and activities of the District. Anticipated payments from other Districts as required by the District IGA are also reflected in Exhibit H. Exhibit H also contains matrix and timeline presentations summarizing key financial information and assumptions, proposed financing alternatives and financial relationships for all of the three proposed Districts. The Financial.Plan projects the issuance of debt and anticipated repayment based on the development assumptions for the Property(including the market projections and absorption forecasts included in Exhibit H). Letters from the Developer and from THK and Associates in support of these assumptions, projections and forecasts are also contained in Exhibits H and L. The following are the selected key assumptions and projections for the District, as further set forth in Exhibit H. Actual results will vary based upon timing of development. • From approximately 2004 through 2006, the Improvements will be constructed at a total estimated cost of Twenty-One Million One Hundred Fifty-Four Thousand Seven Hundred Seventy-Eight Dollars ($21,154,778),of which Eleven Million Six Hundred Thirty-Five (00025922.DOC v:4) 19 Thousand One Hundred Twenty-Eight Dollars ($11,635,128)will be paid by District and Nine Million Five Hundred Nineteen Thousand Six Hundred Fifty Dollars($9,519,650) will be paid by Hills Nos. 2 and 3. In 2004, the Developer will make advances to the District totaling approximately Ten Million Five Hundred Fifty-One Thousand Two Hundred Seventy-Six Dollars ($10,551,276) (Alternative A) or Eight Million Seven Hundred Fifty-Seven Thousand One Hundred Twelve Dollars ($8,757,112) (Alternative B) for such costs, as well as approximately One Hundred One Thousand Seven Hundred Forty Dollars($101,740) for initial costs of District administration and limited operations and maintenance activities, in exchange for the issuance of Developer Bonds(as defined and further described in V.B(1)below). The Developer will contribute approximately Four Million Two Hundred Fifty-Seven Thousand Sixty-Eight Dollars ($4,257,068)(Alternative A)or Six Million Fifty-One Thousand Two Hundred Thirty-Two Dollars ($6,051,232) (Alternative B) which contribution is not expected to be repaid by the District("Developer Contribution"). • From approximately 2005 through 2008, a total of approximately 769 residential units will be constructed in the District. Full buildout is expected to occur by 2008, with market absorption of substantially all units projected by 2008. Current assessed valuation of the Property is assumed to be $-0-; assessed valuation for the Property at full buildout is expected to be approximately Fourteen Million Seven Hundred Ninety-Two Thousand Six Hundred Thirty Dollars ($14,792,630), and the District is expected to receive property tax revenue based on such estimated full buildout assessed valuation beginning in 2010. • The District is expected to issue two (2) series of Non-Developer Bonds(as defined and further described in V.B(2) below), in 2005 and 2008. Kirkpatrick Pettis Smith Polian, Inc. ("Kirkpatrick Pettis"),the District's Financial Advisor/Underwriter, has estimated {00025922.DOC v:4) 20 the District's debt capacity for such Non-Developer Bonds (i.e.,the maximum amount of Non- Developer Bonds that such firm expects to be willing to market and underwrite consistent with reasonably prudent underwriting practices) as follows: Under Alternative A(variable rate/rated), there is capacity for an estimated total principal amount of Eight Million Fifteen Thousand Dollars($8,015,000)of Non-Developer Bonds,projected to yield net proceeds (after deduction of capitalized interest, reserve funds, and issuance and other incidental costs as set forth in Exhibit H under Note 3 -Bond Assumptions)of Seven Million Two Hundred Twenty Dollars ($7,000,220). Under Alternative B (non-rated), there is capacity for an estimated total principal amount of Eight Million Three Hundred Fifty Thousand Dollars($8,350,000) of Non-Developer Bonds, projected to yield net proceeds(after deduction of capitalized interest, reserve funds, and issuance and other incidental costs as set forth in Exhibit H under Note 3 -Bond Assumptions) of Seven Million Eight Hundred Twenty-Eight Thousand Eight Hundred Seventy-One Dollars ($7,828,871). Under Alternative A, approximately Seven Million Two Hundred Twenty Dollars ($7,000,220)of the proceeds of Non-Developer Bonds issued by the District and Three Million — One Hundred Seventy-Three Thousand Two Hundred Sixteen Dollars($3,173,216)of the proceeds of Non-Developer Bonds issued by Hills Nos. 2 and 3 will be applied toward repayment of the District's Developer Bonds (Seven Million Two Hundred Eighty-Seven Thousand One Hundred Seventy-Four Dollars($7,287,174) in Developer Bond principal,and Two Million Eight Hundred Eighty-Six Thousand Two Hundred Sixty-Two Dollars($2,886,262) accrued interest thereon),with approximately Three Million Two Hundred Sixty-Four Thousand One Hundred Two Dollars($3,264,102)principal amount of Developer Bonds remaining outstanding after all Non-Developer Bonds have been issued. In lieu of issuing Non-Developer Bonds, Hills No. 2 and 3 may contribute funds to the District based on the issuance of Developer (00025922.DOC v:4) 21 — Bonds. Under Alternative B, approximately Seven Million Eight Hundred Twenty-Eight Thousand Eight Hundred Seventy-One Dollars($7,828,871)of the proceeds of Non-Developer Bonds issued by the District and Three Million One Hundred Seventy-Three Thousand Two Hundred Sixteen Dollars($3,173,216)of the proceeds of Non-Developer Bonds issued by Hills Nos. 2 and 3 will be applied toward repayment of the District's Developer Bonds(Eight Million Seven Hundred Fifty-Seven Thousand One Hundred Twelve Dollars($8,757,112)principal plus Two Million Two Hundred Forty-Four Thousand Nine Hundred Seventy-Five Dollars ($2,244,975) interest),and its is expected that all Developer Bonds of the District will be fully repaid from such sources by the end of 2008. In lieu of issuing Non-Developer Bonds,Hills No. 2 and 3 may contribute funds to the District based on the issuance of Developer Bonds. • The estimated cost of the Improvements includes approximately Nine Million — Five Hundred Nineteen Thousand Six Hundred Fifty Dollars($9,519,650) in regional infrastructure costs for which the District will be entitled to cost-sharing payments from the other Districts pursuant to the District IGA. It is expected that such payments will be received by the District in 2005 and 2006 as set forth in Exhibit H. The Financial Plan demonstrates that, at the projected level and timing of development,and with the projected Developer support and cost-sharing reimbursement payments, the proposed District has the ability to finance the Improvements and will be capable of discharging the proposed indebtedness(including the Developer Bonds and Non-Developer Bonds) on a reasonable basis. — B. Debt Issuance The District is authorized to incur only the following types of debt: (i) Developer Bonds, as further defined and described below in V.B(1); and(ii) Non-Developer Bonds (which {00025922.Doc v:4) 22 may include Refunding Bonds),all as further defined and described below in V.B(2). The District may not incur any other type of debt(including without limitation revenue bonds or lease-purchase financing)without obtaining the Town's approval of an amendment to this Service Plan, which shall be considered a material modification hereof. Notwithstanding any other provision of this Service Plan, the District shall not incur any debt until the Town has approved the first final plat for the Development. 1. Issuance of Developer Bonds. "Developer Bonds"means obligations issued by the District to the Developer or to a principal thereof or to affiliates under the majority control of the Developer, provided that Developer Bonds may not be issued in a public offering and may be issued only to persons or entities who are accredited investors at the time of such issuance. The term"accredited investor"as used in this Service Plan means accredited investor as defined under sections 3(b)and(4)(2)of the federal"Securities Act of 1933"by regulation adopted thereunder by the Securities and Exchange Commission. The District will obtain representations from all persons or entities to whom Developer Bonds are issued or transferred (i.e., the Developer, its principals and controlled affiliates, as the case may be)that they are,at the time of such issuance or transfer, accredited investors. The appropriate documentation for any Developer Bonds (including, without limitation,the legend set forth in V.B(1)(f)below) shall provide that,by purchasing or otherwise accepting any Developer Bond, any owner or holder thereof waives and releases any then existing or future claim against the Town or the Town's elected or appointed officers, employees, agents or contractors in any manner related to or connected with the District, its Service Plan or any action or omission with respect thereto. It is expected that the District will receive initial funding from the Developer(both for costs of capital improvements and for costs of administration and limited operations and maintenance (00025922.DOC r:4} 23 activities),and that the District will issue Developer Bonds to evidence the District's obligations to repay a portion of such costs(excluding the Developer Contribution, which is not expected to be repaid). The Developer and any such principals and controlled affiliates solely assume the risk of nonpayment or other default on the Developer Bonds, including, without limitation, delay, inability or failure of the District to sell or issue Non-Developer Bonds; any amounts incurred with respect to Developer Bonds which are not paid(including, without limitation, amounts discharged as provided in V.B(1)(e)below)will be treated as part of the Developer Contribution. The District and the Developer shall comply, and the Developer shall take all action necessary to cause its principals and controlled affiliates to comply, with all limitations, restrictions and requirements applicable to Developer Bonds. For Alternative A, Developer Bonds are expected to be repaid in part (approximately Four Million Nine Hundred Ninety-Seven Thousand Two Dollars($4,997,002) principal plus Two Million Three Thousand Two Hundred Eighteen Dollars ($2,003,218) interest) from proceeds of Non-Developer Bonds issued by the District and Two Million Two Hundred Ninety Thousand One Hundred Seventy Two Dollars ($2,290,172) principal plus Eight Hundred Eighty-Three Thousand Forty-Four Dollars($883,044) interest from proceeds of Non- Developer Bonds issued by Hills No. 2 and 3 [In lieu of issuing Non-Developer Bonds, Hills No. 2 and 3 may contribute funds to the District based on the issuance of Developer Bonds], principal of and interest on the remaining Developer Bonds are expected to be paid from ad valorem property taxes,specific ownership taxes, Facility Fees and investment income. For Alternative B,Developer Bonds are expected to be repaid in full (Six Million Three Hundred Thirty-Seven Thousand Four Hundred Ninety Dollars($6,337,490)principal plus One Million Four Hundred Ninety-One Thousand Three Hundred Eighty-One Dollars ($1,491,381) interest) {00025922.DOC v:4) 24 in 2008 from the proceeds of Non-Developer Bonds issued by the District and Two Million Four Hundred Nineteen Thousand Six Hundred Twenty-Two Dollars ($2,419,622)principal plus Seven Hundred Fifty-Three Thousand Five Hundred Nine-Four Dollars ($753,594) interest from the proceeds of Non-Developer Bonds issued by Hills Nos. 2 and 3. In lieu of issuing Non- Developer Bonds,Hills Nos. 2 and 3 may contribute funds to the District based on the issuance of Developer Bonds. Developer Bonds shall be subject to all of the restrictions and limitations set forth below under V.C and D, and will also be subject to the following restrictions and limitations: (a) Maximum principal amount; no discount. The aggregate principal amount of Developer Bonds that may be issued by the District throughout the District's existence and regardless of subsequent payments or discharges, shall be limited to a total of Eleven Million Six Hundred Thousand Dollars($11,600,000). The principal amount of Developer Bonds issued (but not Developer Bond interest), together with any other payments to the Developer by the District, shall not exceed the amount of costs advanced by the Developer, and no discount or commission shall be paid or taken with respect to Developer Bonds. (b) Tenn. Developer Bonds shall be limited to a thirty(30) year term. (c) Interest Rate. The interest on Developer Bonds shall be subject to a maximum allowable interest rate of three hundred(300) basis points above the thirty(30) year 'AAA' Municipal Market Data rate in effect at the time such Developer Bonds are incurred. (d) Subordination. All Developer Bonds shall be subordinate to all Non-Developer Bonds, with respect to all sources of repayment. Payments on Developer Bonds may be made by the District only to the extent that such payments do not adversely affect the District's ability to pay Non-Developer Bonds. (00025922.DOC v:41 25 (e) Discharge. Any outstanding principal and accrued interest on Developer Bonds that remains unpaid after the final maturity date of such Developer Bond shall be deemed to be forever discharged and satisfied in full, and shall be treated as a Developer Contribution. (f) Transferability. Developer Bonds may be issued only as physical securities and shall not utilize The Depository Trust Corporation or any similar securities depository. Developer Bonds may be transferred to persons or entities other than the Developer, its principals and controlled affiliates,only if the requirements for the issuance of Non- Developer Bonds set forth under V.B(2) below have been met with respect to such Developer Bonds. Unless and until such requirements have been met, no Developer bonds shall be transferred, assigned or participated to any persons or entities other than the Developer, its — principals and controlled affiliates, nor used as security for any borrowing, and the face of the Developer Bonds shall contain a restriction on transferability in substantially the following form: THIS BOND MAY ONLY BE TRANSFERRED IN A TRANSACTION NOT INVOLVING A PUBLIC OFFERING AND ONLY TO SPECIFIED ENTITIES WHICH ARE ACCREDITED INVESTORS,AND EACH PROSPECTIVE PURCHASER OF THIS BOND MUST EXECUTE ONE OF THE FORMS OF"TRAVELING INVESTOR LETTER" WHICH ARE ATTACHED TO THIS BOND, BY WHICH, AMONG OTHER THINGS, SUCH PERSON OR ENTITY REPRESENTS AND WARRANTS THAT IT IS SUCH AN ENTITY AND THAT IT IS AN ACCREDITED INVESTOR. BY PURCHASING OR OTHERWISE ACCEPTING THIS BOND, THE OWNER OR HOLDER HEREOF WAIVES AND RELEASES ANY THEN EXISTING OR FUTURE CLAIM AGAINST THE TOWN OF FIRESTONE, COLORADO OR THE TOWN'S ELECTED OR APPOINTED OFFICERS, EMPLOYEES, AGENTS OR CONTRACTORS IN ANY MANNER RELATED TO OR CONNECTED WITH THE DISTRICT OR ITS SERVICE PLAN OR ANY ACTION OR OMISSION WITH RESPECT THERETO. (00025922.Doc v:4) 26 - 2. Issuance of Non-Developer Bonds. "Non-Developer Bonds" means debt which is permitted under this Service Plan to be issued by the District to third parties(i.e., without complying with the ownership and transferability restrictions set forth in V.B(1) — hereof). All Non-Developer Bonds will be general obligation bonds (subject to the Limited Debt Service Mill Levy provisions of V.D. below), secured by ad valorem property taxes and additionally secured by Facility Fees and specific ownership taxes. As set forth in Exhibit H, it is expected that the District will issue two(2) series of Non-Developer Bonds, in years 2005 and 2008, in the aggregate principal amount of Eight Million Fifteen Thousand Dollars($8,015,000) (Alternative A) or Eight Million Three Hundred Fifty Thousand Dollars($8,350,000) (Alternative B). At the time of issuance of the second series of Non-Developer Bonds,proceeds of such Non-Developer Bonds must be applied to pay outstanding Developer Bond principal and — interest in an amount such that no more than Three Million Four Hundred Thousand Dollars ($3,400,000) in Developer Bond principal remains outstanding. (a) Secured and Unrated Non-Developer Bonds. "Secured Bonds" — means Non-Developer Bonds which are either(i) rated in one of the four highest investment grade rating categories by one or more nationally recognized organizations which regularly rate such obligations(which rating may be based on credit enhancement, including insurance issued — by an insurance company authorized to do business as an insurance company in Colorado and authorized for such risk by the appropriate Colorado regulatory agency or official); or(ii) are fully secured as to the payment of all principal and interest by a letter of credit, line of credit or other credit enhancement, any of which must be irrevocable and unconditional, issued by a depository institution(A) with a net worth of not less than ten million dollars in excess of the obligation created by the issuance of the letter of credit, line of credit, or other credit (00025922.DOC v.4( 27 enhancement; (B)with the minimum regulatory capital as defined by the primary regulator of such depository institution to meet such obligation; and(C) where the obligation does not exceed ten percent of the total capital and surplus of the depository institution, as those terms are defined by the primary regulator of such depository institution. Any District payment obligations to any letter of credit provider, insurer or other credit enhancer must comply with all Service Plan restrictions applicable to the corresponding Secured Bonds. No development threshold test applies to the issuance of Secured Bonds. Non-Developer Bonds which are not Secured Bonds are referred to in this Service Plan as"Unrated Non-Developer Bonds." (b) Development Threshold for Unrated Non-Developer Bonds. The District may issue Unrated Non-Developer Bonds only when builder activity has commenced within the District, demonstrated as follows: The District may issue up to Twenty-One Thousand Seven Hundred Dollars($21,700) in Unrated Non-Developer Bonds principal for every building permit which has been issued by the Town for a dwelling unit within the District ("Development Threshold");provided that the following additional criteria are also satisfied: (i) all public improvements required to serve the dwelling units for which such building permits have been issued have been completed and initially accepted by the Town in accordance with the Town subdivision requirements and subdivision agreement; and (ii)the Unrated Non-Developer Bonds are issued in denominations of One Hundred Thousand Dollars($100,000)or more, and shall be issued not in a public offering and exclusively to financial institutions or institutional investors, as such terms are defined in Section 32-1-103(6.5), C.R.S. As set forth in Exhibit J herein, the District's Financial Advisor has indicated that, in the process of underwriting bonds for a non-rated residential metropolitan district, one key criteria is the level of homebuilder {00025922.DOC v:4{ 28 activity. Methods of evaluating such activity include: contracts for sale of land in the District to builders, closing of land in the District to builders, model home construction and home sales activity, building permits and certificates of occupancy. Accordingly, this Service Plan includes a"Development Threshold" for issuance of non-rated debt based on building permits in the Districts. (c) Other Restrictions on Non-Developer Bonds. All Non-Developer Bonds (both Secured Bonds and Unrated Non-Developer Bonds) shall be subject to all of the restrictions and limitations set forth below under V.C. In addition, the following requirements, conditions,restrictions and limitations shall apply with respect to all Non-Developer Bonds(both Unrated Non-Developer Bonds and Secured Bonds), with only those exceptions specifically stated below: — (i) Maximum Principal Amount. The aggregate principal amount of Non-Developer Bonds that may be issued by the District, excluding Refunding Bonds to the extent provided in(v)below,throughout the District's existence and regardless of subsequent payments or discharges, shall be limited to a total of Nine Million Two Hundred Thousand Dollars($9,200,000). This maximum principal amount exceeds the principal amounts assumed in Exhibit H in order to allow for increased in costs due to inflation or other - contingencies in excess of amounts described in the District's cost estimates. (ii) Term. Non-Developer bonds shall be limited to a thirty (30)year term. (iii) Interest Rate. The maximum net effective interest rate on Non-Developer Bonds shall be three hundred(300)basis points above the thirty(30) year'AAA' Municipal Market Data rate in effect at the time such Unrated Non-Developer Bonds are issued; t00025922.DOC v:4) 29 — except that(a) for Secured Bonds issued at a variable interest rate for interest periods longer than weekly, the maximum net effect interest rate shall be twelve percent(12%)per annum; and(b) for Secured Bonds issued at a variable interest rate for weekly or shorter interest periods, the maximum net effective interest rate shall be eighteen percent(18%) per annum. For all Non- Developer Bonds, the maximum discount shall be four percent(4%)per annum. (iv) Trustee. All Non-Developer Bonds shall be structured utilizing a commercial bank with trust powers as trustee to hold and disburse the bond proceeds and debt service funds and to pursue remedies on behalf of the bondholders. (v) Refunding Bonds. The District may refund its Non- Developer Bonds through the issuance of general obligation refunding bonds("Refunding Bonds") in compliance with applicable law,but any such refunding shall not extend the maturity of the Non-Developer Bonds being refunded nor increase the total debt service thereon. Any issue of Refunding Bonds must comply with all requirements for Unrated Non-Developer Bonds as set forth in V.B(2)(b) and(c)above, unless such Refunding Bonds are Secured Bonds as provided in V.B(2)(a) above. Refunding Bonds shall not be subject to the maximum principal amount stated in V.B(2)(c)(i)above,provided that such Refunding Bonds demonstrate net present value debt service savings;but if such Refunding Bonds do not demonstrate net present value debt service savings, any increase in principal amount of the Refunding Bonds over the Non-Developer Bonds being refunded shall be subject to the maximum principal amount stated in V.B(2)(c)(i) above. Except to the extent otherwise provided in the immediately preceding — sentence, Refunding Bonds shall be subject to all of the restrictions and limitations applicable to other Non-Developer Bonds(including,without limitation, those set forth below under V.C and D). Non-Developer Bonds issued to immediately pay and discharge Developer Bonds, as {00025922.DOC v:4) 30 contemplated by V.B(1) and Exhibit H,are not Refunding Bonds within the meaning of this paragraph(v). (vi) Required certification as to Saddleback Park. At least ninety(90)days,but not more than one hundred twenty(120)days,prior to the issuance of any issue of Non-Developer Bonds(including Refunding Bonds), the District shall obtain a written certification from the Town that there is substantial compliance with the Phasing Plan for construction of the Saddleback Park Improvements or the District is otherwise in compliance with its obligations in Section 10 of the Town IGA. Non-Developer Bonds shall not be issued if the aforementioned certification is not obtained. 3. Cost-Sharing Obligations. As set forth in IV.B(2) herein, the District shall enter into the District IGA pursuant to which Hills Nos. 2 and 3 shall be required to make '- payment to the District for their respective shares of the cost of improvements to be constructed by the District which benefit these other districts,which payments are estimated as set forth in Exhibit H. - 4. Financial Estimates. Actual interest rates and(where applicable) discounts, for all Developer Bonds and Non-Developer Bonds(i.e., for all debt of the District), within the applicable maximum amounts stated in V.B(1) and(2) above,will be determined when such debt is entered into by the District and will reflect market conditions at the time of sale. Estimated interest rates and discounts used in Exhibit H are based on information furnished by Kirkpatrick Pettis as Financial Advisor/Underwriter to the District. In the event — that any District debt is issued at an interest rate higher than the estimated rates used in Exhibit H, the principal amount of District debt will be reduced so as to result in total debt service payments approximately equal to those projected in Exhibit H, and so that the District's total (00025922.DOC v:4) 31 _ debt service can be paid from the revenue sources contemplated in this Service Plan. Any principal amount of District debt in excess of the principal amounts shown in Exhibit 11 will be issued(subject to the maximum principal amount limits stated in VB(1) and(2) above)only if changes in financial conditions or assumptions permit the resulting total debt service to be paid from the revenue sources contemplated in this Service Plan. If actual increases in District assessed valuation are less than the projected increases for those factors as shown in Exhibit H, it is expected that the District would compensate by increasing its mill levy(subject to the Limited Debt Service Mill Levy)or delaying the issuance of debt. It is expected that any such increase in the projected debt service mill levy to compensate for decreased inflation and revaluation factors would not exceed approximately five(5) additional mills. C. Other Restrictions, Limitations and Requirements. The following restrictions, limitations and requirements shall apply to all Developer Bonds and Non-Developer Bonds(i.e., to all debt or indebtedness of the District). 1. No acceleration. No debt issued by the District, and no District payment obligations to any letter of credit provider, insurer or other credit enhancer, shall provide acceleration as a remedy upon default. 2. Authorized Security for Debt. Other than ad valorem property taxes, specific ownership taxes, Facilities Fees (defined herein), amounts capitalized from bond proceeds, and investment income on the foregoing, no District revenues shall be pledged to any debt of the District. The District will not pledge any Town funds or assets as security for any District debt. 3. Limited Mill Levy and Principal Amount Limits. All District debt is subject to the Limited Debt Service Mill Levy provisions of V.D. below. All District debt is (00025s22.OCC v:4} 32 subject to the respective maximum principal amount limits set forth in V.B(1)(a) (Developer Bonds)and V.B(2)(c)(i) (Non-Developer Bonds) (except to the extent otherwise provided in V.B(2)(c)(v)concerning Refunding Bonds). No District debt shall be issued as capital appreciation bonds or utilizing any financial structure which would interfere with the effectiveness of any such maximum principal amount limits. 4. Transfers and Exchanges. As to all District debt instruments, the District shall provide for and shall utilize mechanisms and procedures for transfers and exchanges which are reasonably designed to insure continuing compliance with applicable institutional investor, accredited investor and minimum denomination requirements. 5. Compliance with law, opinions. All debt issued or incurred by the District shall be in full compliance with all applicable requirements of state and federal law, including, without limitation, Section 32-1-1101(6), C.R.S., and Article 59 of Title 11, C.R.S., as amended from time to time, and all other applicable state and federal securities laws and regulations. All Non-Developer Debt issued or incurred by the District shall be approved by nationally . recognized bond counsel. In addition, concurrently with any issuance of debt or indebtedness by the District, an opinion shall be obtained from bond counsel or counsel to the District that such issuance or incurrence of debt by the District complies, in all material respects, with all applicable requirements of this Service Plan and the Town IGA. D. Debt Service and Administrative Mill Levies. "Limited Debt Service Mill Levy" means that the ad valorem property tax mill levy pledged or otherwise applied for repayment of all District debt(including any required debt service reserve payments) shall not exceed a total of fifty(50)mills, subject to the following: {00025922.DOC v:4} 33 1. In the event of changes in the ratio of actual valuation to assessed valuation for residential and commercial real property(from 7.96% or 29%, respectively), pursuant to Article X, Section 3(l)(b) of the Colorado Constitution and legislation implementing such constitutional provision, the Limited Debt Service Mill Levy will be increased or decreased (as to all taxable real property in the District, including both residential and commercial real property) to reflect such changes so that, to the extent possible, the actual tax revenues generated by the mill levy, as adjusted, are neither diminished nor enhanced as a result of such changes ("Adjustment"). 2. The District's ad valorem property tax mill levy for costs of the District's administration and its limited operations and maintenance activities ("Administrative Mill Levy") shall not be subject to the Limited Debt Service Mill Levy but shall be separately limited to a total of three and one-half(3.5) mills, subject to Adjustment in the same manner provided in paragraph(1) above. The District's authority to impose an Administrative Mill Levy shall terminate upon dissolution of the District. The mill levy limitations described above in this V.D. shall be enforceable limits on all District mill levies,subject only to Adjustments as expressly provided for herein. The District will also comply with all applicable statutory and constitutional limitations, restrictions and requirements applicable to its ad valorem property tax powers, as well as all limitations, restrictions and requirements contained in its voted authorizations. E. Costs of District Administration and Operations — Costs of the District's administration and its limited operations and maintenance activities are estimated as shown on Exhibit H. The first year's operating budget(2004) is estimated to be Thirty-Three Thousand Dollars ($33,000). It is anticipated that the District will (00025922.DOC v:4) 34 impose an operations and maintenance mill levy as set forth in Exhibit H. Exhibit H projects that, starting in 2008, the District will have sufficient revenue to pay for the ongoing administration and limited operations and maintenance activities of the District, as well as all required debt service payments. Prior to that time, the Developer will advance or contribute funds to the District. To the extent such advances are to be repaid to the Developer by the District, they may be evidenced by Developer Bonds as provided in V.B(1)above to be repaid from the Limited Debt Service Mill Levy. The District's ad valorem property tax mill levy for costs of the District's administration and its limited operations and maintenance activities shall be in addition to the District's debt service mill levy. F. District Revenue Sources The District will impose ad valorem property tax mill levies(limited as set forth in V.D. above) on all taxable property in the District as the primary source of revenue for repayment of debt service and for costs of the District's administration and its limited operations and maintenance activities. Although the mill levies imposed may vary depending on the phasing of development and construction of facilities anticipated to be funded, it is estimated that a total District mill levy of approximately forty(40) mills(subject to Adjustment) will produce revenue sufficient to support all debt service and administration, operations and maintenance expenses throughout the repayment period. The District also expects to receive its share of specific ownership taxes from the County,which are expected to serve as an additional source of revenue for the District. It is anticipated that a development fee of$2,000 per single family unit and $1,000 per multi-family unit will be imposed("Facility Fee"). The District may only increase {00025922.Doc v:4} 35 the Facility Fee by 2% per year. All revenues received from the Facility Fee are expected to be pledged for the repayment of principal and interest on Non-Developer Bonds. Once any Non- Developer Bonds have been issued, Facility Fees shall be applied only to payment of debt service on such Non-Developer Bonds. The District may not impose any tax other than ad valorem property taxes(limited as provided in V.D. above), and may not impose any fees or charges other than the Facility Fee, without obtaining the Town's approval of an amendment to this Service Plan,which shall be considered a material modification hereof. The District also expects to receive revenue from investment income and cost- sharing payments as set forth in Exhibit H. The Town shall have no collection, administration or other obligations or responsibilities with respect to any revenues of the District. Payments to the District shall not limit, reduce, affect, impair or discharge any taxes or fees to be paid to the Town or other governmental entities serving the Property. G. Revenue-Sharing Payments to Town for Public Improvements 1. Except as otherwise expressly provided in Section V.G.2 below,the District will pay to the Town for deposit into the Town's capital improvements fund twenty-three percent(23%) of the District's total net bond proceeds derived from the issuance of Non- Developer Bonds. Such amounts shall be paid to the Town immediately upon issuance and delivery of each such series of Non-Developer Bonds which, according to Exhibit H, is anticipated to occur in 2005 and 2008. The funds so paid to the Town may be used by the Town to finance any street,park or recreation capital improvement, or other capital improvement (either within or outside the boundaries of the District),which improvements the District would {00025922.Doc v:4 36 otherwise be empowered to construct, i.e., streets, street lighting, traffic safety controls,water, sanitary sewer, landscaping, storm drainage or park and recreation improvements and facilities, any of which improvement shall be of benefit to the Town and District as determined by the Board of Trustees. 2. By approving this Service Plan and executing the Town IGA, the Town expressly agrees that if the Developer and/or the Districts fund the construction of or construct the Saddleback Park Improvements in accordance with the Phasing Plan,Concept Plan and other applicable provisions of the Park Agreement, Town IGA and this Service Plan, then the Certified Construction Costs(as defined below)related to construction of the Saddleback Park Improvements shall be applied as a credit toward the Districts' satisfaction of the revenue sharing obligations set forth herein and in the Town IGA, and the provision set forth above regarding revenue-sharing amounts being paid to the Town upon issuance and delivery of each series of Non-Developer Bonds shall be inapplicable to the extent of such credit. At least sixty(60) days prior to Hills No. 3's issuance of any Non-Developer Bonds,the Districts shall provide the Town with documentation regarding the total costs incurred by the Developer and/or the Districts for construction of the Saddleback Park Improvements, including but not limited to architecture and design, engineering, legal fees. construction management fees, permit fees, surveying expenses, and labor and materials construction costs("Certified Construction Costs"). Such documentation shall include an independent engineer's certification of the construction costs and the District's certification that such documents and costs incurred are true and accurate. The Certified Construction Costs shall exclude costs for construction of any local or collector streets abutting Saddleback Park (currently denoted as Saddleback Circle and Garland Street on the Concept Plan). The Certified (00025922.DOC v:4) 37 Construction Costs may include utility costs only for those utilities that directly serve Saddleback Park. In the event that the Certified Construction Costs are equal to or exceed 23% of the aggregate net proceeds (after deduction of reasonable amounts for capitalized interest, reserve funds and issuance costs)of the Districts' Non-Developer Bonds previously issued and to be issued as certified by the Districts' Financial Advisor("Aggregate Net Non-Developer Proceeds"), the Districts shall be deemed to be in full compliance with the above-described Town regional improvements revenue sharing obligation and the Town shall not be entitled nor shall it seek additional participation from the Districts for regional improvements pursuant to such obligation unless otherwise provided by mutual written agreement among the Districts and the Town. In no event shall the calculation of Aggregate Net Non-Developer Proceeds include Developer Bonds or Refunding Bonds. Alternatively, in the event that the Certified Construction Costs are less than 23%of the Aggregate Net Non-Developer Proceeds, then, as provided in the Town IGA and the Hills No. 3 Service Plan, Hills No. 3 shall pay the Town an amount equal to the difference between such 23%of Aggregate Net Non-Developer Proceeds and the Certified Construction Costs from the proceeds of its first series of Non-Developer Bonds, or, if agreed by the Town, from its first and second series of Non-Developer Bonds on a pro-rata basis. Although the Developer and Districts anticipate that Non-Developer Bonds will be issued to fund construction of Improvements or the acquisition of Improvements from the Developer,they acknowledge the possibility that the Developer or a successor or assignee thereof may elect to fully fund the Improvements and retain ownership of Developer Bonds for more than five years thereby delaying the issuance of Non-Developer Bonds. In the event that the Districts have not issued Non-Developer Bonds by the date that is one(1) year after completion and the Town's conditional acceptance of Saddleback Park Improvements,the (00025922.DOC v;4} 38 Districts acknowledge that the Developer is obligated pursuant to the Park Agreement to submit the Certified Construction Costs to the Town and to pay the Town the amount, if any, resulting from deducting the Certified Construction Costs from 23%of the aggregate net proceeds of all Developer Bonds issued by any of the Districts,which shall be calculated by deducting the reasonable issuance costs from the principal amount of all Developer Bonds issued by the Districts,which net amount shall be certified to the Town by the Districts' Financial Advisor. H. Economic Viability Exhibit H illustrates the estimated income and expenses for the District over a thirty-nine(39) year period assuming issuance of two(2)series of Non-Developer Bonds, each maturing within a thirty(30)year period from the date of issuance. The analysis reflects a total r1. build-out period of four(4)years starting in 2005,and a total mill levy of forty(40)mills (subject to Adjustment). It is also assumed that assessed valuation will be realized in the year after construction and that tax collections will be realized in the second year after construction. The District intends to capitalize interest on Non-Developer Bonds to permit payment of interest • -- during the time lapse between the issuance of Non-Developer Bonds and the collection of tax levies from the construction of taxable properties. Interest income through the reinvestment of construction funds, capitalized interest,the Facility Fee,specific ownership taxes and annual tax receipts will provide additional funds. Town approvals are required and have not yet been obtained for the proposed Development. The Developer acknowledges that Town development approvals and w- requirements may affect the amount and timing of the development anticipated in this Service Plan. (00025922.OOC v:4} 39 The Developer acknowledges and accepts the risk that, if all or a part of the Non- Developer Bonds proposed to be issued by the District are not issued, because of changes in financial conditions or for any other reason, the Developer may not be paid or reimbursed for advances made to the District. These revenue sources are projected to be sufficient to retire all proposed District debt assuming that development occurs as projected; otherwise, increases in the projected mill levy(subject to the mill levy limit stated in V.D. hereof) may be necessary. The Financial Plan contained in this Service Plan demonstrates the economic viability of the District. I. Quinquennial Review Pursuant to Section 32-1-1101.5, C.R.S., the District shall submit application for a quinquennial finding of reasonable diligence in every fifth calendar year after the calendar year in which the District's ballot issue to incur general obligation indebtedness was approved by its electorate. Upon such application,the Board of Trustees may accept such application or hold a public hearing thereon and take such actions as are permitted by law. The District shall be responsible for payment of the Town's consultant and administrative costs associated with such review, and the Town may require a deposit of the estimated costs thereof. The Town shall have all powers concerning the quinquennial review as provided by statutes in effect from time to time. J. Letters In addition to the letters from the Developer and from THK and Associates contained in Exhibit H and Exhibit L,there is attached hereto as Exhibit J an underwriter's letter stating its intention to underwrite the District's financial obligations as proposed in this ti (00025922.DOC v:4} 40 Financing Plan. There is attached hereto as Exhibit K a letter from legal counsel for the District stating that the petition for organization of the District, this Service Plan, notice and hearing procedures in connection therewith, and provisions thereof(including, without limitation, provisions as to the District's debt, fees and revenue sources) meet the requirements of Title 32, C.R.S.,and other applicable law. There is attached hereto as Exhibit S a letter from Bond Counsel for the District(i)stating that provisions for payments to the Town are permissible under currently applicable laws, and that the District is permitted by currently applicable laws to make such payments to the Town as described in Article V.G; and (ii)describing any significant legal or tax requirements or restrictions that the Town will be expected to comply with in connection with such payments, other than those requirements and restrictions set forth in Section 11 of the form of Town IGA attached hereto as Exhibit O. — VI. LANDOWNERS' OBLIGATIONS AS TO PUBLIC IMPROVEMENTS The creation of the District shall not relieve the Developer, or the landowner or any subdivider of property within the District or Development, or any of their respective successors or assigns, of obligations to: construct public improvements for the Development; including but not limited to the Saddleback Park Improvements; enter into subdivision improvement agreements regarding such improvements; provide to the Town letters of credit as required by the Town to ensure the completion of all such public improvements;or any other obligations to the Town under Town ordinances,rules, regulations or policies or under the annexation agreement, as amended, subdivision improvement agreement(s),or other agreements affecting the property within the District or the Development, or any other agreement between the Town and the Developer(or any such landowner, subdivider or successors or assigns). (00025922.DOC v:4} 41 VII. ANNUAL REPORT The District shall be responsible for submitting an annual report to the Town within one hundred and twenty(120)days from the conclusion of the District's fiscal year. Failure of the District to submit such report shall not constitute an unauthorized material modification hereof unless the District refuses to submit such report within thirty(30)days after a written request from the Town to do so. The District's fiscal year shall end on December 31s`of each year. The content of the annual report shall include information as to the following matters which occurred during the year: A. Boundary changes made or proposed; B. Intergovernmental Agreements entered into or proposed; C. Changes or proposed changes in the District's policies; D. Changes or proposed changes in the District's operations; E. Any changes in the financial status of the District including any issuance of financial obligations or change in revenue projections or operating costs; F. A summary of any litigation and notices of claim involving the District; G. Proposed plans for the year immediately following the year summarized in the annual report; H. Status of construction of Improvements, including but not limited to a detailed report of the status of the Saddleback Park Improvements completed in the preceding year and planned for the upcoming year and identification of which entity(District(s) or Developer)has completed or will be completing such Improvements; I. The current assessed valuation in the District; and (00025922.DOC v:4) 42 J. A schedule of all fees, charges and assessments imposed in the report year and proposed to be imposed in the following year, and the revenues raised or proposed to be raised therefrom. The foregoing list shall not be construed to excuse the requirement for prior written Town approval of those matters that are considered material modifications of this Service Plan, or for any other required Town approval. The annual report shall be signed by the President and attested by the Secretary of the District. Along with the annual report, and at any more frequent intervals as reasonably requested by the Town, the District shall provide to the Town a currently dated and written certificate, signed by the President and Secretary of the District, certifying that the District is in full compliance with this Service Plan and with the Town IGA. If the District is not in full compliance with this Service Plan, the certificate shall include a detailed statement describing such noncompliance, and the District shall cooperate fully with the Town in providing further information as to, and promptly remedying, any such noncompliance. The Town reserves the right, pursuant to Section 32-I-207(3)(c), C.R.S., to request reports from the District beyond the mandatory statutory five(5) year reporting report. In addition to the foregoing,the District shall cooperate with the Town by providing prompt responses to all reasonable requests by the Town for information, and the District shall permit the Town to inspect the Improvements and all books and records of the District. HD. DISSOLUTION Promptly when all of the debt to be issued by the District as described in Article V hereof has been paid or otherwise discharged (or when provision for payment thereof has been made through establishment of an escrow as provided by Section 32-1-702(3)(b), C.R.S.), the District will so notify the Town and will cooperate fully with the Town in taking all steps necessary {00025922.Doc r:41 43 under then applicable law to dissolve the District(including, without limitation: formulating a plan of dissolution; executing the District's consent to dissolve pursuant to Section 32-1- 704(3)(b), C.R.S.; making any necessary agreements as to continuation or transfer of maintenance and other services, if any, which are then being provided by the District; submitting a petition for dissolution to the district court; and conducting any required dissolution election). ` In addition, at any time after the District has issued all of its Non-Developer Bonds as contemplated by the Financial Plan(excluding Refunding Bonds), upon the Town's request, the District will cooperate fully with the Town to dissolve the District,pursuant to a plan for dissolution stating that there are financial obligations or outstanding bonds and specifically providing that the special district will continue in existence(with the Town Board of Trustees serving as the District Board(if the Town so elects) to such extent as is necessary to adequately provide for the payment of such financial obligations and outstanding bonds as provided in §§ 32-1-702(3)(c) and 32-1-707(2)(c), C.R.S. Also, on or after December 31, 2011,if the District has not issued any of its Non-Developer Bonds, the Town shall have the right to require the District to dissolve in accordance with applicable law, and the District will cooperate fully with the Town to dissolve the District. To the maximum extent permitted by law, the above-stated agreements to cooperate in dissolution of the District shall be binding on the undersigned Developer(constituting the owner of one hundred percent(100%) of the land in the District) and shall also be binding on the Developer's successors in title to any and all land in the District(including the nominees for the initial Board of Directors set forth in Article IX hereof and succeeding directors who own land within the District); and such agreements shall obligate all such persons to cooperate fully with (00025922.DOC v;4E 44 the Town as described above, including, without limitation,the signing of the petitions, execution of consents, and voting in favor of dissolution in any required election. au- IX. ELECTIONS Following approval of this Service Plan by the Town, and after acceptance of the organizational petition and issuance of orders from the district court, elections on the questions of organizing the District and approving bonded indebtedness and various agreements described herein will be scheduled. All elections will be conducted as provided in the Court order, the Uniform Election Code of 1992, as amended from time to time, and the TABOR Amendment, and the initial District election is currently planned for November 2, 2004,but may be held on any legally permitted date. The initial election questions are expected to include whether to organize the District, election of initial directors, and ballot issues and questions required by the TABOR Amendment and by applicable statutes. Thus, the ballot may deal with the following topics (in several questions, but not necessarily using the exact divisions shown here): a) Whether to organize the District; b) Membership and terms of the initial board members; c) Approval of new taxes; d) Approval of maximum operational mill levies; e) Approval of bond and other indebtedness limits, and approval of multiple fiscal-year obligations; f) Approval of an initial property tax revenue limit; g) Approval of an initial total revenue limit;and h) Approval of an initial fiscal year spending limit {00025922.DOC v:41 45 Ballot issues may be consolidated as approved in court orders. The petitioners intend to follow both the letter and the spirit of the Special District Act, the Uniform Election Code, and the TABOR Amendment during organization of the District. Future elections to comply with the TABOR Amendment may be held as determined by the elected Board of Directors of the District. The following persons,who are or will be owners of property within the District, are intended as nominees for the initial boards of directors of the District: Clint Blum Ron Gollehon Kimberly Gollehon Sharon M. Blum X. INDEMNITIES The fully executed Saddleback Hills Lake&Conservancy Limited Liability Company Indemnity Letter attached hereto as Part 1 of Exhibit L is submitted by the Developer to the Town as part of this Service Plan. The form of The Hills Metropolitan District No. 1 Indemnity Letter attached hereto as Part 2 of Exhibit L shall be executed by the District and delivered to the Town as soon as practicable upon formation of the District. The execution of such Indemnity Letters are material considerations in the Town's approval of this Service Plan,and the Town has relied thereon in approving this Service Plan. The District shall not incur any financial obligations outside of the ordinary course necessary as part of the District's organizational meeting(e.g., secure D&O insurance),or otherwise perform any functions authorized under this Service Plan until the District's Indemnity Letter has been duly executed and delivered to the Town. {00025922.DOC v:4} 46 XI. DISCLOSURE AND DISCLAIMER; NO THIRD PARTY RIGHTS The District will also record a statement against the property within the District which will include notice of the existence of the District, anticipated mill levies and maximum allowed mill levies. The form of the notice is attached hereto and incorporated herein as Exhibit M subject to any changes directed by the Town in the future. In addition, there is attached hereto as Exhibit N a form of Town disclaimer statement. The District shall conspicuously include this disclaimer statement, or any modified or substitute statement hereafter furnished by the Town, in all offering materials used in connection with any bonds or other financial obligations of the District(or, if no offering materials are used, the District shall deliver the disclaimer statement to any prospective purchaser of such bonds or financial obligations). No changes shall be made to the form of disclosure or the disclaimer set forth in Exhibits M and N, except as directed by the Town. Neither this Service Plan, the Town IGA set forth in Exhibit 0 hereto, nor any other related agreements, shall be construed to impose upon the Town any duties to, nor confer any rights against the Town upon, any bondholders, lenders, investors, contractors or other third parties. XII. INTERGOVERNMENTAL AGREEMENTS The District shall enter into an intergovernmental agreement with the Town (the"Town IGA"),which shall be in substantially the form set forth in Exhibit O. The District shall execute and deliver the Town IGA to the Town as soon as practicable upon formation of the District. The execution of such Agreement is a material consideration in the Town's approval of this Service Plan, and the Town has relied thereon in approving this Service Plan. As discussed above, it is also anticipated that the Districts will enter into the District IGA. The District shall cause the District IGA to be fully executed by all three Districts and shall deliver a fully (00025922.Doc v:4) 47 • executed and certified copy thereof to the Town as soon as practicable upon formation of the District. The execution of such District IGA is a material consideration in the Town's approval of this Service Plan, and the Town in approving this Service Plan has relied upon the Developer's representations that such District IGA will be executed upon formation of the District. The District shall not incur any financial obligations of any kind, or otherwise perform any functions authorized under this Service Plan, until the Town IGA and District IGA have been fully executed and delivered to the Town. No other intergovernmental agreements are proposed at this time, but such agreements are anticipated between the District and Central Weld, the Recreation District and potentially other entities providing service to the Property. Any intergovernmental agreements proposed to be entered into by the District shall be subject to review and approval by the Town prior to their execution by the District. Failure of the District to obtain such approval shall constitute an unauthorized material modification of this Service Plan. XIII. CONSERVATION TRUST FUND The District shall not apply for or claim any entitlement to funds from the Conservation Trust Fund which is derived from lottery proceeds, or other funds available from or through governmental or nonprofit entities for which the Town is eligible to apply. The District shall remit to the Town any and all conservation trust funds which it receives. XIV. MODIFICATION OF SERVICE PLAN The District shall obtain the prior written approval of the Town before making any material modifications to this Service Plan. Material modifications require a Service Plan amendment and include,but are not limited to,the following: (00025922.DOC v:4} 48 A. Any change in the stated purposes of the District or additions to the types of facilities, improvements or programs provided by the District; B. Any issuance by the District of financial obligations not expressly authorized by this Service Plan, or under circumstances materially inconsistent with the District's financial ability to discharge such obligations as shown in the build out, assessed valuation and other ` forecasts in Exhibit H, or any change in any debt limit, change in revenue type,or change in maximum mill levy(except for any necessary Adjustment as provided in V.D. above); C. Any change in the type of improvements or change of more than fifteen percent (15%) in the estimated costs of improvements from what is stated in Exhibit C of this Service Plan; D. Failure to comply with the requirements of this Plan concerning the dedication of Improvements or the acquisition and conveyance of lands or interests in land; E. Failure of the District to develop any capital facility proposed in this Service Plan when necessary to service approved development within the District. F. If the Districts undertake the construction of the Saddleback Park Improvements, failure of the Districts to improve the Saddleback Park in accordance with the Phasing Plan. G. Failure to obtain the required certification in accordance with Article V.B.2.c.vi herein. H. The occurrence of any event or condition which is defined under the Service Plan or Town IGA as necessitating a service plan amendment; I. Any proposed use of the powers set forth in Sections 32-1-1101(1)(f) and 1101 (1.5), C.R.S. respecting division of the District; (00025922.DOC v:4) 49 J. The default by the District under any intergovernmental agreement with the Town or among the District and any one or more of the Districts. K. Any of the events or conditions enumerated in Section 32-1-207(2), C.R.S.; L. Failure by the District to deliver its executed Indemnity Letter as provided in Article X hereof,or enter into the Town IGA and the District IGA (in the form of the District IGA as reviewed and approved by the Town) upon the District's formation as provided in Article XII hereof. M. Any action or proposed action by the District which would interfere with or delay the planned dissolution of the District as provided in Article VIII hereof. The examples above are only examples and are not an exclusive list of all actions which may be identified as a material modification. The District will pay all reasonable expenses of the Town, its attorneys and consultants, as well as the Town's reasonable processing fees, in connection with any request by the District for modification of this Service Plan or administrative approval by the Town of any request hereunder. The Town may require a deposit of such estimated costs. XV. RESOLUTION OF APPROVAL The Developer and other proponents of the District agree to and shall incorporate the Board of Trustees' Resolution of Approval, including any conditions on such approval, into the Service Plan presented to the appropriate district court. Such resolution shall be attached as Exhibit R. XVI. FAILURE TO COMPLY WITH SERVICE PLAN In the event it is determined that the District has undertaken any act or omission which violates the Service Plan or constitutes a material departure from or an unauthorized material {00025922.DOC v:41 50 modification of the Service Plan, the Town may utilize the remedies set forth in the statutes to seek to enjoin the actions of the District, or may pursue any other remedy available at law or in equity, including affirmative injunctive relief to require the District to act in accordance with the provisions of this Service Plan. Additionally, i f such failure to comply with this Service Plan respects any obligation of the District, if undertaken by the District,to comply with the Phasing Plan, then the Town may withhold issuance of any further building permit for the Development if such failure is not cured within sixty(60) days of notice of such failure to comply. The District shall pay any and all costs, including attorneys' fees, incurred by the Town in enforcing any provision of the Service Plan. To the extent permitted by law,the District hereby waives the provisions of§ 32-1-207(3)(b),C.R.S., and agrees that it will not rely on such provisions as a bar to the enforcement of any provisions of this Service Plan, unless the Town gives its prior written consent to such reliance. Any such consent shall be evidenced by a written resolution the Board of Trustees. XVII. SEVERABILITY If any portion of this Service Plan is held invalid or unenforceable for any reason by a court of competent jurisdiction, such portion shall be deemed severable and its invalidity or its unenforceability shall not cause the entire Service Plan to be terminated. Further, with respect to any portion so held invalid or unenforceable, the District and the Town agree to pursue amendment or take such other actions as may be necessary to achieve to the greatest degree possible the intent of the affected portion. XVIII.CONCLUSION It is submitted that this Service Plan for the proposed The Hills Metropolitan District No. 1 establishes that: (00025922.DOC v:41 51 A. There is sufficient existing and projected need for organized service in the area to be serviced by the proposed District; B. The existing service in the area to be served by the proposed District is inadequate for present and projected needs; C. The proposed District is capable of providing economical and sufficient service to the Development; and D. The area to be included in the proposed District has or will have, the financial ability to discharge the proposed indebtedness on a reasonable basis. XIX. CERTIFICATION This Service Plan is submitted to the Town by the undersigned Developer, which is the District organizer and sole owner of the Property and the Development. The undersigned has caused written notice of the Town's hearing on the proposed Service Plan to be duly given, on or prior to the initial hearing date, to"all interested parties"within the meaning of Section 32-1- 204, C,R.S. The undersigned will cause all required filings to be made and all other applicable procedural requirements to be met with respect to organization of the District. To the best of Developer's knowledge, the information contained in this Service Plan is true and correct as of this Date. The undersigned representative certifies that such representative has been duly authorized to execute this Certification on behalf of the Developer. (00025922.DOC v:4) 52 [SIGNATURE PAGE TO THE HILLS METROPOLITAN DISTRICT NO. 1 SERVICE PLAN] Saddleback Hills Lake& Conservancy Limited Liability ompany By: Title: Date: q_ ('� • (00025922.OOC v:I) 52 EXHIBIT A Legal Description of Initial Property • {00012883.DOC v:3) THE HILLS METROPOLITAN DISTRICT N0. 1 A part of Section 20,Township 2 North,Range 67 West of the Sixth Principal Meridian,Town of Firestone, County of Weld,State of Colorado, being more particularly described as follows: BEGINNING at the Southwest corner of said Section 20; Thence North 01°03'51"West,along the West line of the Southwest Quarter of said Section 20, a distance of 2630.69 feet to the West Quarter corner of said Section 20; Thence North 01°03'01"West,along the West line of the Northwest Quarter of said Section 20, a distance of 568.08 feet to a point; Thence North 64°24'32"East a distance of 152.90 feet to a point; Thence North 84°16'31"Fast a distance of 1065.90 feet to a point of curvature; Thence along the arc of a curve to the left having a central angle of 55°53'00", a radius of 200.00 feet,an arc length of 195.07 feet and whose chord bears North 56°20'01"East a distance of 187.43 feet to a point of tangency; Thence North 28°23'31"East a distance of 664.47 feet to a point of curvature; Thence along the arc of a curve to the'right having a central angle of 49°20'45",a radius of 225.00 feet,an arc length of 193.78 fret and whose chord bears North 53°03'54"East a distance of 187.85 feet to a point of tangency; Thence North 77°44'16"East a distance of 788.25 feet to a point; Thence North 74°30'19"East a distance of 142.84 feet to a point; Thence North 69°53'53"Fast a distance of 709.63 feet to a point of curvature; • Thence along the arc of a curve to the right having a central angle of 61°28'52", a radius of 130.00 feet, an arc length of 139.50 feet and whose chord bears • South 79°21'41"East a distance of 132.90 feet to a point of tangency; Thence South 48°37'15"East a distance of 91.46 feet to apoint; Thence South 65°09'32"East a distance of 97.79 feet to a point; • Thence South 82°30'49"Past a distance of 108.01 feet to a point Thence North 62°15'30"East a distance of 119.16 feet to a point on the east line of the West Half of the Northeast Quarter of said Section 20; Thence South 01°32'18"East, along said east line, a distance of 1891.03 feet to the Southeast comer of said West Half; Thence North 89°45'55"East, along the south line of the Past Half of the Northeast Quarter of said Section 20, a distance of 1322.71 feet to the East Quarter corner of said Section 20; PAGE 1 OF 3 �L Thence South 01°02'38"Fast, along the east line.of the Southeast Quarter of said Section 20, a distance of 1214.24 feet to a point; Thence South 83°29'17"West a distance of 1815.42 feet to a point; Thence South 00°00'20"West a distance of 257.78 feet to a point of curvature; Thence along the arc of a curve to the right having a central angle of 71'13'09", a radius of 150.00 feet,an arc length of 186.45 feet and whose chord bears South 35°36'55"West a distance of 174.68 feet to a point of tangency; Thence South 71°13'29"West a distance of 190.95 feet to a point of curvature; • Thence along the arc of a curve to the left having a central angle of 70°56'06", a radius of 300.00 feet,an arc length of 371.41 feet and whose chord bears South 35°45'26"West a distanre of 348.14 feet to a point of tangency; Thence South 00°17'23"West a distance of 2730 feet to a point; Thence North 89°42'37"West a distance of 43.00 feet to a point; Thence South 00°17'23"West a distance of 70.00 feet to a point; Thence North 89°42'37"West a distance of 44.00 feet to a point of curvature; Thence along the arc of a curve to the right having a central angle of 40°39'55",a radius of 835.00 feet,an arc length of 592.63 feet and whose chord bears North 69°22'40"West a distance of 580.27 feet to a point of non-tangency; Thence South 45°04'32"West a distance of 132.10 feet to a point of curvature; Thence along the arc of a curve to the left having a central angle of 45°04'12", a radius of 440.00 feet, an arc length of 346.11 feet and whose chord bears South 22°32'26"West a distance of 337.26 feet to a point of tangency; Thence South 00°00'20"West a distance of 208.81 feet to a point on the south line of the Southwest Quarter of said Section 20; Thence North 89°30'23"West,along said south line, a distance of 2088.73 feet to the POINT OF BEGINNING. • • Except for a part of the Southwest Quarter of said Section 20,being more particularly described as follows: Commencing at the Southwest corner of said Section 20; • Thence South 89°30'23"East,along said south line of the Southwest Quarter of said Section 20,a distance of 740.03 feet to a point; Thence North 01°03'51"West a distance of 63.66 feet to a point; Thence North 88°56'09"East a distance of 35.00 feet to the POINT OF BEGINNING; PAGE 2 OF 3 �� • Thence North 01°03'51"West a distance of 714.81 feet to a point of curvature; Thence along the arc of a curve to the right having a central angle of 14°04'36", a radius of 575.00 feet,an arc length of 14127feet and whose chord bears • North 05°58'28"East a distance of 140.91 feet to a point of tan ffmry; . Thence North 13°00'45"East adistanre of 199.34 feet to a point Thence South 55°47'01"East a distance of 95520 feet to a point Thence North 82°41'12"East a distance of 34928 feet to a paint; — — Dun North-65°08'39 lsTa ce o �1Tfeet to a point Thence South 45°04'32"West a distance of 121.12 feet to a point of curvature; Thence along the arc of a curve to the left having a central angle of 45°04'12", a radius of • - 621.00 feet, an arc length of488.49 feet and whose chord bears South 22°32'26"West a ' distance of 475S9 feet to a point of tangency; Thence South.00°00'20"Westa distance of 142.14 feet to a point of curvature; Thence along the arc of a curve to the "fit having a central angle of 90°29'17", a radius of 15.00 feet,an arc length of 23.69 feet and whose chord bears - - • South 45°14'59"West a distance of 2130 feet to a point of tangency; Thence North 890'23"West a distance of 11173.89 feet to a point of curvature; • Thence along the arc of a curve to the right'having a central angle of 88°26'32", a radius of 15.00 feet an=West gth of w • North 45°17'07" t a distance23.15 of 20.92feetand feet to hose thechord POINT bears OF BEGINNING. • Containing 345.873 acres,more or less. . The above and foregoing describes a surface estate only. Expressly excluded from this legal description are any estates below the surface including oil,gas and other minerals (including sand and gravel) and any related rights of surface use. PAGE 3 OF 3 EXHIBIT A-1 District Map (00012883.DOC v:3) w an a m 11/4 a SEC *____ /t tot WM _ a a vx•or I I I N I 4e a®/Sri aa/I ,vim -- N 4 gC.20 e yriteXligr 1 E 1/$, NE 7/4- t1l� L� SEG 20- , j RAMPS"Sr Al 4d. Al° 7 AuraPT4 r�.�' I)�L7'an � �� P�! ri(►�Q9,.1 ft ea sin NV. • me Alfa'II`,�-'_� .tPdU P Tjerd - l 4) 4074,04A-4.4 Ar V1i�I,�44.J-a= sp ♦ SCALE 1r- 1000' _�-lf#: ''4,: ii � h\y am ♦4� <� �.,..a.�7.. f3w .Pia► .: a.f' KsS r d a a SE tai,lit IJlpa : sittri ,-�IP�te��:C' IMISI►,.� I • i/ •'• �a•�.�a %'�"� Mj�171P'Z�A��I ��46E+�� ILIVII=Mr/rAggreer al ,Wa 1.. Oal y 1f l � I 4 0 sirs==.4 do2=.47..iralp- liskAft 2davigirralinCrign ilateI) s P EXCEP770N 7....74t-m-s. - �L y •\ pal t/I Jait EcEnal r MI r c l as.aea a at as • M.as ran: 7 I i . l . Ill J ; 1 % •1Hazaa . za mow •watt,. tat mow I ;7 .. i ( `',�� I• a. iin . .. in I 1 4 SEG 29 Pt I 2. �� NE 0/4-SEC. 29 I or I � iillial i ji lit1 jug t1 Iis � �� Ilk IWWI i I t I i A^ i ` WWI er III •,) `VVIet.xars' ---4..,....„ I 1 TT N o:0/07/03EEL THE HILLS 790iSBe9ev ex k.w,eme Se 750 'Job No:01803101 METROPOLITAN DISTRICT NO. 1 E"`d:(720°°80111 -9526 Td:(720)482.9526 I This drawing is intended only to accompany the attached legal CCNSULIIN15M IC Cf OICRADO FQ(72O 482.9546 description and does not represent a monumented land survey. ars nano .WO ni °• LIM MANNING EXHIBIT B District, Development and Vicinity Map (00012883.DOC.v.3} • • 09/05/2803 08:00 7204829546 CVL CONSULTANTS PAGE 02 tIPMect00115103101MMMCCINdeneco at act vic rmp,gv9,W512W3 7-cc-T2 pp(1213938,•JO! • • WLR 20 PINE CONE AV>NIIE COAL RIDGE D • DIST_ 1 fa" DIST. 2 Wt;R 1: GRANT A a.OE DIST. • DIST. i TOWN OF 3 2 FIRESTONE, v1 n�m,inu' T Fri Iiiii uifl MCCLURE VENUE • • • �tt ICII0oanaur 4�SIQ I .mn.Mt, Oea.� 1."_:w•r.. air an Surveying ur eying Land Engineering Land Planning CONSULTANTS OF COLORADO,INC. June 23,2004 City of Firestone 151 Grant Avenue Firestone, Colorado 80520 Re: Engineer's Estimate of Anticipated Costs for the Service Plan for the Hills Metropolitan District No. 1. Firestone,Colorado CVL Ref.#01803101 i CVL Consultants has prepared and reviewed the estimate of anticipated costs for the Service Plan for the Hills Metropolitan District No. 1. This estimate was based on the quantities reflected in the preliminary design for the Saddleback Hills Lake and Conservancy construction plans. The unit costs for the included items are based on current construction standards and deemed acceptable. The attached estimate should be a reasonable assumption of the probable cost for.the improvements of this project. Sincerely, • CVL Consultants of Colorado, Inc. • __.plt . `a < : , '4'°oF 10-23-o4.:gt J `hs/0NAL ENS'J_ James J. anmcke,P.E. Project Manager • 7901 E. Belleview Ave., Ste 150 Englewood, CO 80111 Tel. (720) 482-9526 FAX (720) 482-9546 - DENVER • PHOENIX • LAS VEGAS 1 i i 1 I i {:4 p , I . 4 1 1 I I WOOLSACK HEW LATE AND COMWIWNCY YACOLERA IMASGQ@ Alto WMCYANLT SAOOISSACK RML.f1AEE AND CONSERVANCY WIORM[M MITIMATR OF AMICIFATMD maapeors IMAM of ANTICIPATED . OLDIMEERYI CRTRAATI OP ANTICMATRO' METRO WSTRICT COSTS AI MEMO War WSR W METRO DISTRICT COSTS 0 LOTS TR ales we MN Leis LOTS W 5(14% 140 LOTS CremMvdN VILLACINI12F1I YLLAOES;1144,Mt STREET EXCAVATION WE ORE TOTAL COST %STREET EKCAVA1WN OFF RITE TOTAL COST STREET EXCAVATION OFF SITE TOTAL COST 10 117,57140LATER TO 8ETil "WATER TOTAL CWT WATER T 7� f!‘ `�M�ttR TOTAL COST STORM ORMIASS -YOTAL�RT le TIRAIMGE TOYtZt64T STORM ORMNAOE .711.00 TOTAL COST 0000 W40 Fo a AL ATKIN FOR �f Jq y1a, TOTAL COST STREETS ISOM PROTECTS* t3TrALYOSDET1siTESETt/GFETTHWTECTWN TOTA7 olei lT�E�gEMEETEIOAFETY PROMATRW TpTAL COST 1515 PARlaA R�1MA10N TOTFLCDERItT 1A1W3A RECREATON TOTALCOST vASXSARECREATI0N $228 10 TOTAL COST ppf}�.t1 MY0757405PROPPRESNAL FE S totA&.Cbst 'PROFEISOW4 ST FEES TOTAL Cora WROFISSIOSLL MO TOTAL COST Maio 44001.0 EITAAW10 OEWRAL PROJECT COSTS WENMMY- OWEOIALPROJECT W Ma MURAL PROJECT COSTS Si. ITOI TOTAL COST TOTAL COST ROI TOTAL COST STREET RICAVATONWPM WS,OWEO STREET[CAYATSNORSits $11111140 RIIEETSXCAYATON OFF SITE $1714140 WATER 11,701.1011 WATER $1.0.00/1 WATER WLT140 510RMY1A0A05 11.10.400 ■7054 ORAEWW 040000 STORM DR5341OE 40.50.00 ' STREETS Alto SANITY MOTRCIION 010,011 STRUTS APO SAFETY PROTECTION thaw STRUTS AN0 SAFETY PROTECTION 41010WA0 PARKS A RCREATON 0047.1011 FARES&RECREATION $A05.0.W FARES 4 RECREATION 5474,74412 OAS A OIL RELOCATION FOR FUSLC WROVEM!NTS $1.001140 OAS I OA RELOCA1ION FOR PIRNIC RPROYUMCt 404//040 OAS a OIL RELOCATION FOR MOLL WCYOWMW $10%000 505*1W TOTAL COISTIOCTON COM $17,044,17441 ESTRUM TOTAL CONSTRUCTION COST: 01$111646 ESTIWTC TOTAL COIMTRICTION COST 0,10147.E WORISSSNAL Fla 1701.11110 PMOf 4ALMa PROJECT CON EIO Ammon*is OFWWPMJCfSN COSTS $112,101.12MWCT MANMO10 IWR 1t S%OF COI 3 OryON COSTS 1144 0 PROJECT EMT 5E OF CONSTRUCTION Coat11011,1114711011,11147$1t 11A7 Ifl15% 1ANALtXR$1W 0.-10.14 OOMPOWtE00M $11R,744C CONROWLTES In. 47 54 ,11610 91S µ1101C40 6TOATEO AM OIMLCOST* - 0,700744 EE70ATC AWNIMNAL COSTS SEESp/1S DMTRLT II COST ESTSATe 01,ISNR15 01STRICT a COST EETOATt $11,00,15; DISTRICT a COST SITIMAI@ $3,752A0.0 54440.70]0 EXHIBIT D Street and Safety Protection Improvements • (oo0I2883.DOC v:3) NAkvjods\0 Ioua101\awgtExhIblts\METRO 11ROADWAY1.dwg,7/1/2004 11:32:24 AM, 1:2.13938,-JDS H \� .�.. _ 0,) IIIIIIIIMPIW glil"1/ I 1 0 0 1 �j �ja�'in�I-- -a 1 .\ '; d . , 0 -H-i cn �� o�� I! itir: iii X --�Z �7❑ � I I v - = 00 b% gP ��111111: �. t:I CIS / -A 0 ibik. ,, , , II r . entinnwit, .. .... . fr... .... Ii_c„��\��, Imo,is 81. ,,,` �.) ��I :. _____ f�■�i►' � tii, ,. \ Imo.\.. .�.1_.._..._..i' l �I ie/ai .. I��.•: = sixaii iiiu�3*. ��I\\" \111 \r- pact? �'sl�\111 IIi��4� ��j��1111. vine*siiii ritiiiini its •iii\, I1Irr \% 4a1OtalLeirai .Mturaal i airs _-X11111 ��lm �oi ca %' 4 $ttlaJaJ4 , + �,, � iii .Ors*i,; � � .. , ��►l ' ��,e>� A a 8- �1 ,,�#4 nil iuiif►tg a• i . lii 01 - ►s .. 4.,s6X11 / tot�&t"•IIS i _ -- - s gaa O 1 'W AB MGM MEWLS COWAN ��SW istimmis oath alma . ! . • .• . . am tikaa o. 0 ill....a MMMM .+w.+.ma,,, a �� out aema MODWAYMDT mstwrsamaime in"*.". n=. M�__ r �� -- 'N:1Fr'djeetst01ava1011dwg1ExhibitslMETR0 1\SD_SEWER1.dwg, 7/1/2004 11:33:23 AM, 1:2.13938,-MS • \ AIIIII,,,,V,!-a `. JP'. j b2traL4 .,: - -- IJE Ia t -- i s \ , il . „ 'oasis= a ,L, Ft sat +:. seising)U .; ep W ��` , � IImos 1 imi t 0 7j , ea Itiligfre --1 -- 0i l I)g seis • - • i , ;iiii tor �♦ ��I�j1I m — ;O0. ��IIIIIpi11a . i -i I� a• m ��►j� / � Wb /1111111/►AS\. j4 z 73 Ile /- iiiX11 n„11111111►� ♦ On 100 __ 411,h1 � � ��\1111111►L� X4'0 . , mAirriA740 ,��1111m ik t CO __I X111 iir 4 ,• �alIIIN/1 itb t� ala z141111" 1111 ikt' Ii11OvitH 1� a r��nftea.1.40101litik '--no A -= :b- Vr %0..a I�uell�r�e r,vity, ,�;�0.44 ,.', =1+.�" 1��11� Wisi 111 % ,��s�`! - AV 40PAIN, �.. 1111'► gge Si , es�O ► oA go. a nottity,l, • its � =�:� obi 111 f►csfuliwir,w AN 4 n, . Patin **nano '114 ' - di Inge is eL it 1 ; lili I at" € Ii 91ØJ!! -- -- YREI MIIIfA M.WJNR, vue 7$l LMM4A,� ocn¢nmem_MEI % 4EilIMETICKUTAN (XL ,. --E- . Q1 .ea .0 rc raw EVER B BM MI MS WS 1:32.4: .1 Sin" t« a . die 0 sa��•unosr��r Nw Lnldr Pe bit. 4!r Dpr N:1rrojects10iau i101\dwg\Exhlblts\METRO 11PARKS_TRAILS1.dwg,7/1/200411:3200 AM, 1:2.13938,-JDS i w • • )sj , , _ 11 O ,-[ EH Z (n r-- ._- 1,;- _- '.. III ' �\ S--.�. -ICI N �,I • • � s �'c ICJ M �ell � '- PZ70 III �A/IIIII.• .� �•s� _ (I) O CD O t /' � . ; z r .� ;� � � ► � IIII► �� _� z I N. , / , 1 r _ - ...?)., ...... , ..„, , ... , ;,, , , , , .. , / . , i 0 ...... .0 . m e •.rte • a� ��r ��►►��e�� alt i . . . .. _ k . lo, , ..,, ii „. .p. , , 11i�►�� .,l $ • Ingalls Stno wham 'won seat • Mil L.Y.Y.A.r • 01 aec�ma All 1iENlLB IERCKWAN ' ._,...mw a MILT M re merman* Ma Mil®NO DASBHT OMENS N mNA6IC r�mnx..O' �sMn NM a °KOKO s mw�..w.w.•la war a— Iwo, 1nYY�� DAY A+p, Data woo Saddleback Park Phasing Plan Page 1: Saddleback Park Improvements**, Deadlines and Estimated Costs PHASE 1 Acres 33.3 Acres Relocation of oil and gas facilities 3 Oil/gas Wells Relocation of Sinclair pipeline 1 Overlot grading TBD Seeding TBD Estimated Cost $ 250,000 Phase 1 Completed Prior to Issuance of 152 Building Permits PHASE 2 Acres 8.7 Acres CBT Shares TBD' Shares Soccer Fields 2 Fields Parking Lot(Central) 1 Parking Lot: 100 spaces Internal Driveways TBD 10-wide Concrete Trail As Shown Walkways, Landscaping,Irrigation TBD Signage TBD Necessary Utilities TBD Necessary Grading and Drainage TBD ` Restroom TBD Other Park Equipment TBD Engineer and Landscape Arch Design TBD Average Cost Per Acre $ 130,000 Estimated Cost • E $ 1,131,000 Phase 2 Completed Prior to Issuance of 386 Building Permits Subtotal $ 1,381,000 Phases 1 and 2 PHASE 3 Acres 12.5 Acres CBT Shares TBD* Shares Soccer Fields 1 Field Softball Fields 1 Field Parking Lot(Central) 1 Parking Lot: 150 spaces Internal Driveways TBD 10-wide Concrete Trail As Shown Walkways, Landscaping, Irrigation TBD Signage TBD Necessary Utilities TBD Necessary Grading and Drainage TBD Concession,Restroom,etc Building TBD Other Park Equipment TBD Engineering&Landscape Arch Design TBD Average Cost Per Acre $ 130,000 Estimated Cost $ 1,625,000 Phase 3 Completed Prior to Issuance of 722 Total Building Permits Subtotal $ 3,006,000 Phases 1,2 and 3 • Saddleback Park Phasing Plan Page 2: Saddleback Park Improvements**, Deadlines and Estimated Costs PHASE 4 Acres 12.1 Acres CBT Shares TBD* Shares Softball Fields 1 Field 10-wide Concrete Trail TBD Walkways, Landscaping, Irrigation TBD Signage TBD Necessary Utilities TBD Necessary Grading and Drainage TBD Other Park Equipment TBD — Engineer&Landscape Arch Design TBD Average Cost Per Acre $ 130',000 Estimated Cost $ 1,573,000 Phase 4 Completed Prior to issuance of 1,048 Building Permits Total Cost $ 4,579,000 Phases 1,2,3 and 4 *Owner shall dedicate water necessary for irrigation of turf and — landscape areas identified in the final development plan for the Saddleback Park Improvements. Dedications shall be CBT units and shall be at a rate of 2.5 units per acre of irrigated turf and • landscape area(1.0 units per acre for areas approved for planting of native grass)unless the Town otherwise agrees to different rates or alternative water supplies. Dedications shall be made at or prior to the time phases are completed to allow for timely irrigation of installed turf and landscaping. ** As more specifically set forth in the Park Agreement,the Saddleback Park Improvements and the Phasing Plan and Concept Plan maybe modified through the final plat/fural development process,and the Districts or Developer will construct the Saddleback Park Improvements as set forth on the final plat and final development plan for Saddleback Park. Further, Saddleback Park Improvements maybe shifted among Phases as identified at the time of subdivision agreement, provided that the expenditures for each Phase of Saddleback Park Improvements shall be at a rate of$130,000 per acre for all acreage within each Phase(other than Phase 1,which shall be in the amount set forth herein, and shall not exceed the total estimated cost for each such Phase as set forth herein). (As an example,if all Improvements listed within Phase 3 cannot be completed at an expenditure rate of$130,000 per acre,then at the time of subdivision agreement, a portion of the Phase 3 Improvements may be identified for completion as part of Phase 4). j / t --- �. ■■■■■■■ ■ ■ . ■ ■ . ■ ■ ■ 112.44 .� . .� * r�•- i i Phase e 4 y'� ■ (f I •,...7:5„,. CY1U �� , l a� a / ' • �_ Phase 3 7- -tom ' " '" • b' ,c-_,. - te.,_ "(-TV 4 zi ,('{°q , •�� "�:Jf� k„3„ l l 111 _ _ firr 1 ■w 1 l Ail j, f`: Phase 2 # =_ _ ") ��;�� I?[} / =,z 6 r' -- �sFa p o _ , Saddleback Park Phasing Plan •Saddieback Cir. le Page 3: Phasing Plan Map d , z-----"1;111 [Mir mr- 1 dI-111 i,� �� Exhibit B S Concept Plan ^ATM 710 Wt Cd. x.x Aw September THE VILLAGES OF SADDLEBACK HILLS JJ Fes°' 2004 COMMUNITY PARK PLAN NORMS DUUEA Peon,3 Nauss swot screeds buxom Landow° W. EXHIBIT G Water System Improvements t:.JF (00012883.DOC v:3) ,1 rte...... .� 9 N:Pro}ech\018031011i1wg\EYt{bIte1METRO IIWTR MA$N1.dwp;7/11260411:33:30 AM,1'2.1393B,-.IDS • If! ir— '..‘ ' _ i A'''-' 11 i r:--- b-H, t - ;4 ; ruU/ * M ,�♦ �ar�rrrrtt�� /�er� r ; > • �i ��11111� 111U1�� • , M o = I � ---- %� \1 111111��j�� Lid to . i i� i ►r {1111► Ijjl�j�� . ♦♦ i . . ,.J .i ♦ Ott i Ill ti mill X11 ►��i��rr�►rr `I, '►, �I ----; �► �♦ .t ., .. See, If 111►��N• . Ignatla SL . i• t --eat-t— I ,� ci al�d 01 ma MOON7fE1Wll11OPOUfN1 IsOur .mwn mme w+W tefne a mho OlarkMAIERWHOM MUM"fMA IC ramnwar I wawa al a ant Mtm NOM rr.ommimor....tO..n. M, Sara Dm ha 4a• Dm am EXHIBIT H _ >s Financial Plan '.1 {O0012883.DCC v3) • The Hills Metropolitan Districts#1 to#3 Analysis of Bonds,Subordinate Developer Debt,Developer Contributions and other Revenues for District Improvements District#1 District#2 District#3 Totals Alternative A Alternative B Alternative A Alternative 8 Alternative A Alternative 8 Alternative A Alternative B Sources: General Obligation Bends Issue#1 3,800,000 3,250,000 3,250,000 3,600,000 3,400,000 NIA 10,450,000 6,850,000 Issuance costs (188,0451 1130,000) (156,322) 1144,000) (157,363) 1501,750) (274,000) Reserve 1282,000) (242,200) (267,617) 1791,817) 0 Capitalized interest&expenses 0 1187,1291 0 0 1499,067) 1499,067) 1187,129) Net Issue#1 3,329,955 2,932,871 2,851,478 3,456,000 2,475,933 0 8,651,366 6,388,871 Issue#2 4,215,000 5,100,000 3,900,000 4,550,000 5,975,000 14,090,000 9,650,000 Issuance costs (203,852) 1204,0001 1177,5861 (182,000) (264,430) 1645,868) (386,000) Issuance costs 1340,683) 1313,0751 1476,617) (1,130,575) 0 Capitalized interest&expenses 1848,(531 1848,853) 0 Net Issue#2 3,670,265 4,896,000 3,409,339 4,368,000 4,385,100 0 11,464,704 9,264,000 $ubordinate Developer Debt 10,551,276 8,757,112 3,889,660 2,278,511 4,695,394 19,136,330 11,035,623 Reimbursement from Other Districts Used to retire Dev Debt-principal (2,290,172) 12,419,622) 12,290,172) 12,419,622) Used to retire Dev Debt-interest 1883,044) 1753,594) 1883,044) 1753,594) • Proceeds(ram 6D band issues Used to retire Dev Debt-principal 14,997,0021 16,337,4901 11,000,780) (2,278,511) (3,165,650) 19,163,432) 18,616,001) Used to retire Dev Debt-interest (2,003,2181 (1,491,381) (1,021,119) (719,4231 (1,219,450) 14,243,787) 12,210,804) Net Subordinate Dev Debt 3,264,102 0 2,888,880 0 1,529,744 0 7,682,726 0 Interest on Subordinate Dev Debt paid from above sources (2,886,262) (2,244,975) (1,021,119) (719,4231 (1,219,450) 0 (5,126,831) (2,964,3981 Developer contribution 4,257,068 6,051,232 2,804,306 3,818,307 5,257,434 12,318,808 9,869,539 Interest income 10,000 20,000 0 10,000 20,000 Total not sources 11,635,128 11 635,128 10 942,884 10,942,884 12,428,761 0 35,806,773 22,578,012, Uses-District Improvements: District im proveinents paid by this District 21,154,778 21,154,778 11,099,525 11,099,525 2,752,470 35,006,773 32,254,303 Improvements paid by other Districts .— that benefit this District 3,173,217 3,173,217 9,676,291 12,849,508 3,173,217 Improvements paid by this District above that benefit other Districts 19,519,650) 19,519,650) (3,329,858) 13,329,858) 0 112,849,508) (12,849,508) Contingency 0 -0 0 Total improvements _11,635,128_11,635,128 10,942,884 10,942,884 12,428,761 _0_35,006,773_22,578,012. Total residential units 769 769 646 648 NIA NIA 1,417 1,417 Total commercial square feet NIA NIA NIA NIA 492,446 492,446 492,446 492,446 Total Assessed Value at Buildout 14,792,630 14,792,630 14,263,297 14,263,297 16,555,729 16,555,729 45,611,656 45,611,656 1 I 1 I I 1 1 I 1 I I I I 1 1 I I ) t The Hills Metropolitan Districts Alternative A Variable Rate Bonds Capital Projects Fund '• Districtl __ Sources of Funds . - Uses of Funds ' Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total YEAR Proceeds Advances Contribution Other Dist's Income Sources Debt Service Devl Advances Improvements Other Dist's Uses , 2004 10,551,276 4,257,068 14,808,344 14,808,344 14,808,344! 2005 3,611,955 3,173,217 6,785,172 282,000 4,387,694 2,115,478 6,785,172: 2006 6,346,433 6,346,433 2,115,477 4,230,956 6,346,433: 2007 0 0, 2008 4,011,148 4,011,148 340,883 3,670,265 4,011,148. 2009 0 0. • 2010 0 0; 7,623,103 10,551,276 4,257068 9,519,650 0,_31,951,097 622,883 10,173,436 21,154,778 0 31,851,097' District#2 Sources of Funds Uses of Funds Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total YEAR_ Proceeds Advances Contribution Other Dist's Income Sources Debt Service Devl Advances Improvements Other Oist's Uses_ 2004 1,387,441 1,387,441 1,387,441 1,387,441 2005 3,093,678 311,739 10,000 3,415,417 242,000 3,173,217 3,415,217 2006 2,190,480 1,416,865 3,329,858 6,937,203 6,937,203 6,937,203; 2007 1,387,441 1,387,441 1,387,441 1,387,441. 200B 3,722,414 3,722,414 313,075 2,021,899 1,387,440 3,722,414: 2009 D o' T_ 2010 0 _ 0 6,816,092 3,889,660 2,804,306 3,329,858 10,000 16,849,916 555,075 2,021,899 11,099,525 3,173,217 16,849,716. District p3 Sources of Funds - Uses of Funds • Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total YEAR Proceeds Advances Contribution Other Dist's Income Sources Debt Service Devl Advances Improvements Other Dist's Uses 2004 0 Ti: • 2005 0 0 2006 3,242,617 4,695,394 2,504,964 10,442,975 766,684 9,676,291 10,442,975' 2007 2,752,470 2,752,470 2,752,470 2,752,470 2008 0 Oi I 2009 5,710,570 5,710,570 1,325,470 4,385,100 5,710,570 ___ 2010 _ 0 ___ _ _ 0 8,953,187 4,695,394 5,257,434 0 0 18,906,015 2,092,154 4,385,100 2,752,470 9,676,291 18,906,015' (1)Net Bond Proceeds - Gross Bond Proceeds•Issuance Costs • I 1 I I I I I I 1 1 1 I I I I I I 1 1 j The Hills Metropolitan Districts Alternative B Fixed Rate Bonds Capital Projects Fund _ District#1 _ Sources of Funds Uses of Funds Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total YEAR R Proceeds Advances Contribution Other Dist's Income Sources Debt Service Devl Advances Improvements Other Dist's Uses 2004 8,757,112 6,051,232 14,808,344E 14,808,344 14,808,344' 2005 3,120,000 3,173,217 6,293,2171 187,129 3,990,610 2,115,478 6,293,217i 2006 6,346,433 6,346,433 2,115,477 4,230,956 6,3413,433: 2007 0 0. 2008 4,896,000 4,896,000 4,896,000 4,896,000 2009 0 0 i_ _ - 2010 0 _0 8,016,000 8,757,112 8,051,232 9,519,650 0_ 32,343,9941 187,129 11,002,087 21,154,778 0 32,343,994 District#2 Sources of Funds Uses of Funds Net Bond Developer Developer Reimb from Interest Total Transfer to Repay District Reimb to Total YEAR Proceeds Advances Contribution Other Dist's Income _ —Sources Debt Service Devl Advances im rovements Other Oist's Uses _ • i 2004 1,387,441 1,387,441 1,387,441 1,387,441 2005 3,456,000 20,000 3,476,000 17,374 3,173,217 3,190,591 2006 891,070 2,430,866 3,329,858 6,651,794 6,937,203 6,937,203; 2007 1,387,441 1,387,441 1,387,441 1,387,441. 2008 4,368,000 4,368,000' 2,980,560 1,387,441 4,368,001: 2009 0 0 • 2010__ _ 0 0 �� 7,824,000 2,278,511 3,818,307 3,329,858 20,0001 17,270,676 0 2,997,934 11,099,526 3,173,217 17,270,677' District#3 does not have an Alternative 8 • (1)Net Bond Proceeds - Gross Bond Proceeds•Issuance Costs ► I I ► I I I ► 1 I I I I I I I I I ► The Nils Metropolitan District PI !Alumalive A ;Variable Rau Bonds I ;Flow of Funds Summary • _. T Residential Platted I Developed Lots I General Fund I Debt Service Fund I Total i Total Operation and I Debt Residential Cumulative Assessed Value 8. Malted Cumulative Assessed Value 8 Cumulative Maintenance Net Net Cumulative I Service Net Series 2005 Series 2008 Repay Dee Annual Granulative • Yea Unite Market Value 7.96%12 yr Lagl'.. Lots Market Value 29%12 yr Leal Assessed Value Mill Levy Revenues Expenses Cash Available Milt Levy Revenues Om Service Debt Service Advances Cash Available Cues Available 1 2004 i 470 9.137.500 3.500 33,000 33,000 0 36.500 0 0 0 0 1 2005 275 51,378,060 I 11831 4,400.000 3.500 33.330 33,330 0 36.500 836.935 0 838.935 836,938 2006; 199 106,777.292 8 5,875,000 2.849.875 2,619,875 3.500 33,663 33,683 101 35.500 515.406 229,540 285.868 1.122.805: ' 2007 193 156.082,077 4,587,294', 11931 2,000,000 1,278,000 5.843.294 3.500 34,000 34,000 101 36.500 837,458 208.533 428,925 1,551728'. 2008 102 185.837.055 8,616.338. 11021 0 1,703.750 10,320,088 3.500 39,191 39,190 Di 35.500 989,772 233.471 756,301 2,308.029 2009, 0 185,837.055 12,540,999; 580.000 13,120,999 3.500 49,827 49.827 IOfI 36.500 561.251 222.278 226,734 1.797.385 11.885.1461 522,683 2010:' 190,601,953 15.171,915' 0 15,171.915 3.500 57.615 51.815 DI 36.500 614,683 206.412 226,612 181,660 101 622.883' 2011 190.601,953 15,171,915' 15,171.915 3.500 57,815 57,615 101 36.500 613.981 236,555 236.587 140.039 0 822.883 2012 194,413,992 15.475,354; 15,175,354 3.500 58.788 58.767 0 38.500 626.211 239,155 233.822 153,235 0 622.884 2013: 194,413,992 15,4753541 15,475,354 3.500 58.768 56,786 0 36.500 626,018 241.566 242.424 142,027 0 622.884 2014 198,302,272 15,784.1161! 15,784,861 3.500 59.943 59.944 101 38.500 638.489 243,635 240.452 154.402 101 622,883. 2015. 198.302,272 15,784.8611 15784,861 3.500 59.943 59,943 III 38.500 838,402 250,505 238.541 149,357 0 622.684 2016. 202,266.317 16.100,558: 16.100,558 3.500 61.142 56.838 4,303 38.500 851.132 246,921 241.818 162.583 (OP 622.683 2017 202,288,317 16,100.5581 16,100.558 3.000 52,407 37.557 19.154 36.500 650.968 253.362 244.514 153,093 101 672,083. 20181 206,313.083 18.422.569', 16,422.589 3.000 53.455 37,933 34,876 36.500 663,084 254.240 247.054 102.592 101 622.883, 2019, 206,313.683 15,422,569: 16.422.589 3.000 53,455 30,302 49,620 38.500 663,744 259,915 249,414 154,415 0 622.883' 2020 210,439,957 16,751,021: 10,751,021 3.000 54,525 38.695 85,649 36.500 676,938 250.125 251,535 165,276 0 622684 2021! 210439.957 18.751,0211 16,751.021 3.000 54.525 39,082 81,092 39.500 676.816 260,139 258,459 158,219 101 622,883' 2022' 214,648.756 17.088.041! 17,086.041 2.000 37.077 39.473 78,696 38.500 690,298 264.816 254,821 170,661 0 822,683. 2023. 214.646.756 17,088.041! 17,086,041 2.000 37,077 39,868 75,905 39.500 690,112 269058 251.213 159.842 101 622.883 2024! 216,941,731 17.427,782; 17,127,782 2.000 37,818 40.266 73,457 36.500 703.887 267,835 262.140 173,913 0 622,883 ' 2025' 218,941.731 17,427,762; 17,427,782 2.000 37,818 40,689 70,808 38.500 703,725 271.396 267.866 164.463 0 622.884'. 2025 223,320.555 17,776,317' 17.776.317 2.000 38,575 41,078 88,105 38.500 717,802 274,408 263.038 080,356 0 622,884' • 2027, 223,320,566 17,778,3171 17,778,317 2.000 38.575 41,486 85,193 38.500 717,578 276.977 273,223 157.379 101 622884., 2028 227,786,977 16,131.843! 18,131,843 2.000 39,348 41,901 62.638 38.500 731,877 279,068 272716 180.093 III 622,883 2029, 227,786,977 18.131,8431 18,131.843 2.000 39,340 42,320 59,884 38.500 731,686 280.710 280.989 168,988 101 622,883- ; 2030 232,342.717 18,494,480' 18.194,460 2.000 40,133 42,743 57.054 38.500 748,305 281,821 280.483 184.002 0 822.884 2031' 232342717 18.494.4801 18.494,480 2.000 40,133 43,171 54.016 38.500 746,149 287,467 283,770 174,914 III 622.683. 2032, 238,989.571 18,884.370: '18.844,310 2.000 40.936 43,603 51.319 36.500 781,093 287.409 281.590 192,064 0 822883 2033! 236.989.571 18.884.3701 18.664.370 2.000 40,938 44.039 48,246 28.500 760.882 291,876 289,183 179.823 101 622,862 2034. 211,729.382 19,241,8571 19,241,657 2.000 41.754 44,478 46.521 38.500 776.075 295,598 286,014 212.821 118,3551 604,528' 2035: 241,729.302 19.241.8571 19,241.857 2.000 41,754 44.924 42,352 38.500 770.611 582.902 292.615 0 1104.9061 499.622: 20361 248,583.990 19,626,490! 18.626,460 2.000 12,588 45,373 39.568 36.500 789.405 0 582788 208.617 706.239'. 2037. 246.563.950 19,828.490! 19.828.490 2.000 42.589 45,827 36.331 36.500 792.819 • 594,311 198,508 904.747 2039 251,495,229 20.019.0201 20019.020 2.000 , 12,841 48,285 32.887 38.500 808,178 '933.298 1127,1181 777,629. 2039' 251,495.229 20.019.020' 20,019,020 0.000 0 0 32,887 0.000 0 0 0 777,629. 2040. 256.525.123 20,419,406 20,419,401 0.000 32,987 0.000 0 777,629. 2041; 256,525,133 20,419.401' 20,419,401 0.000 32,1187 0.000 0 777,629, 2042; 281,955,636 20,827,789; 20.827.789 0.000 32,887 0.000 0 777,629. 769 20,827,789; 0 20,627,789 1,584,469 1,551,582 32,887 23,918,570 8,057.688 9,098,812 5,984,442 777.629 777,629. 101 General Fund Net Revenues-Property in•Specific Ownership Tea+Developer Advances.County Tnavlec Fen 121 General Fund farina-Operating Expenses•Repayment al Developer Advances 131 Debt Service Fund Net Revenues-Property Ten•Specific Ownnahp Tea•Development Fns•Capitalxed inarnt•Debt nnene•Imernt Income•County Treasurer Fns 1 I I I I I I I I I I I I I I I I I I The Hills Metropolitan District a l • Alternative 9 I Fined Rate Bonds Flow of Funds Summery . • _ __ Residential i Platted I Developed Lots I General Fund 1 Debt Service Fund ' 1 Total Total Operation and 1 Deht Residential Cumulative Assessed Value @''1 Platted Cumulative Assessed Value @ Cumulative Maintenance Net Net Cumulative I Service Net Series 2005 Series 2008 Annual Cumulative • Year E Units Market Value 7.96%(2 yr La9(i Lots Market Value 19%12 r Le l Assessed Vale __Mill Levy Revenues Expenses Cash Available; Mill Levy Revenues Debt Service Debi Service Cash Available Cash Available 20041 f 470 9,137.500 3.500 33,000 33,000 0I 36.500 0 0 0 0 0. 2005; 275 57,378,060 1 11831 4,400,000 3.500 33,330 33,330 01 38.500 737,129 0 737,129 737.129' • 2006', 199 106,777,292 8 5,875,000 2.649,875 2,649,875 3.500 33,863 33,863 101 36.500 513.897 227,500 289,197 5,023,326: 2007 193 158,082,077 4,567,294: 11931 2,000,000 1,276,000 5.843,294 3.500 34,000 34,000 101 36.500 635,388 227.500 407,886 1,431,211 2008 102 185,837,055 8.816,338; (1021 0 1,703.750 10,320,088 3.500 39,191 39,190 01 38.500 640,044 277,500 392,544 1.793,755. 2009 0 185837,055 12,540,999; 580,000 13,120.999 3.500 49,827 49,827 101 36.500 549,154 254,000 372,000 176,8461 1,716,908 2010 190,601,953 15,171,9151 0 15,171,915 3.500 51,615 57,615 O. 36.500 631,294 221.900 355,950 53,444 1,770,352'. 2011 190,601,953 15,171,9151 15,171,915 3.500 57,6(5 57,615 IDS 36.500 831,004 251,900 395,950 116,8461 1,753,507, 2012 194,413.992 15,475.354; 15,475.354 3.500 58,768 58,767 01 36.500 842,935 249,800 398,150 15,0151 1,748,492, 2013 194.413,992 15,475,354; 15,475,354 3.500 58,768 58.769 01, 38.500 842,764 257,700 395,000 19,8361 1.738,556• . 2014 198,302.272 15.784,861; . 15,784,881 3.500 59,943 59,944 (0, 36.500 655,079 254,900 396,850 3.329 1.741,885'' 2015 198,302.272 15,784,8611 15,784,861 3.500 59,943 59,943 101 38.500 655,072 262,100 393,350 13761 1,741,507 20151 202,268,317 16,100,5581 18,100,558 3.500 81,142 56,838 4,303: 36.500 668,084 258,600 379,850 29,634 1,771,141': 2017i 202,268,317 16,100,558' 18,100,558 3.000 52,407 37,557 19,154 36.500 668,363 265,100 387,050 16,213 1,787,354' 2018 206,313,883 18.422,569, 18,422,589 3.000 53.455 37,933 34,876 36.500 681,970 265,900 383.550 32,220 1,819,574 2019 206.313,883 18,422.589; 16,422,569 3.000 53,455 38.312 49,8201 38.500 682.024 271.350 390,050 20.824 1.840,198. • 2020 210,439,957 18,751,021: 16,751,021 3.000 54,525 38,895 85,6491 36.500 695.811 271,100 390.850 33.861 1,673,859' 2021 210,439,857 16,751,0211 18.751,021 3.000 54,525 39,082 81,0921 36.500 695,640 275,500 401.300 19,140 1,892.999' 2022 214.648.756 17,086,041; 17,088,041 2.000 37,077 39.473 78,6961 36.500 709,808 279,200 395,700 34,908 1,927,9071 2023 214,648.756 17,086.0411 17,088.041 2.000 31,077 39.868 75,9051 38.500 710,114 282,200 410,100 17,814 1,945,722.' 20241 218,941,731 17.427,762 17.427.762 2.000 37,818 40,268 73,457E 36.500 724.278 279.500 408.100 36.878 1,982,400 2025] 218.941,731 17,427.782' 17,427,782 2.000 37,818 40.889 70,808 36.500 724.685 286.450 415,750 22.465 2,004,864; 2026'1 223,320.586 17,778,317, 17,778,317 2.000 38,575 41,078 88,105; 36.500 739,059 287,350 417.350 34,359 2.039,224' • 20271 223.320,586 17,776,3171 17.778,317 2.000 38,575 41,488 65,19311 36.500 739,466 292,550 423.250 23.666 2,082,890 20281 227,788,977 18,131,843. 18,131,843 2.000 39,348 41.901 82.8381 38.500 754,224 291,700 423.100 38,424 2,102,314 • 20291 227,788.977 16.131.843 18,131,843 2.000 39,348 42,320 59.864; 38.500 794.808 300,150 432.250 22,208 2,124,520 • 2030, 232,342,717 18,494,480. 18.494,480 2,000 40,133 42.743 57,054, 36.500 789,811 297.200 435,000 37,411 2.161,931. 20311 232.342,717 18.494,480; 18,494.480 2,000 40.133 43,171 56018, 38.500 770.037 303.550 441,700 24,787 2,186.718 2032: 238.989.571 18,884.370 18,884,370 2,000 40038 43.803 51,3491 36.500 785.371 303.500 442,000 39,871 2,228,589 2033; 236.989,571 18,884,370. 18,864,370 2.000 40,638 44,039 48,2481 36.500 785,751 312,400 451,250 22,101 2,248,691' 2034' 241,729,382 19,241,857. 19,241,657 2.000 41,754 44,479 45,5211 36.500 801,347 309,550 453,750 38,047 2,286,738 2035, 241,729,362 19,241,651 19,241,657 2.000 41,754 44,824 42,3521 36.500 801,800 315,650 459,850 28,300 2,313,038 20361 246,563,950 19,826,490. 19,828,490 2.000 42,589 45,373 39,5681 36.500 817,790 0 774.200 43,590 2.356,62]. 2037; 248,563,950 19,626,490 19.826,190 2.000 42,589 45,827 38,3311 36.500 8(8,274 790,100 28,174 2,384,802. 2038. 251,495,228 20,019,020; 20,019,020 0.000 0 0 38,3311 38.500 834,555 791000 42755 2,427,557, 20391 251,495,229 20,019,0201 20,019,020 38,3311 0.000 0 0 2.427,557 • 2040: 256,525,133 20,419,401' 20,419,401 38.3311 0 2,427,557 • 2041 256.525,133 20,418,4011 20.419.401 38,331( 0 2,427,557 2042 291,955,936 20,827,789: 20.827,789 36,3311 2,427.557'. 769 20.827.789. 0 20.827,789 1,541,628 1.505.297 38,331 24,088.007 9,233,300 13,405,150 2.427,557 2,427.5571 I11 General Fund Nat Revenues-Property Tan•Specific Ownership Ten+Developer Admen-County Treewrer Fees 121 General Fund Expense-Operating Expenses•Repayment of Developer Advances 131 Debt Service Fund Net Revenues-Property Tax+Specific Ownership Tan+Development Fees•Cepitelxed Interest•Debt Reserve+Interest Income.County Treasurer Fees The Hills Metropolitan District 42 Alternative A '.Variable Rate Bonds !Flow of Funds Summary ' j Residential I Platted I Developed LOU 1 1 General Fund 1 Debt Service Fund Total II Total Operation end I Debt i Residential Cumulative Assessed Value Plotted Cumulative Assessed Value 9 Cumulative Mohammed Net Net Cumulative I Service Net Series 2005 Series 2008 Repay Der Annual Cumulative _Year , Units Market Value 7.96%12 yr Lapl Lets Market Value 29%12 ye Legl Amassed Value Mil Levy Revenues Expenses Cash Available Mill Levy Revenues Debt Service Debt Service Advances Cash Available Cash Available 2004! 0 0.000 .33,000 33,000 0I 0.000 0 0 0 2005. 75 12674,950 � 573 9,075,000 0 0 3.500 33,330 33,330 Di 38.500 396,438 396,439 396,439 2006! 175 58,241,592 11751 7,575,000 0 0 3.600 33,883 33.683 0; 38.600 253,780 180.413 73.387 469.806 2007' 182 110,734.140 2024.845! 1182) 3,700.000 2,831,750 3.656,598 3.600 34,000 34,000 0 30.500 463,409 100,417 282,992 752.798 2008 216 179.187.149 4,709,1631 12181 0 2198,750 8,905,813 3.600 34,340 34,340 0 38.500 1,038,061 226,399 0 0 812,562 1,565460- ; 2009 125,132.782 8,887.569; 1,073.000 9,960,589 3.500 37,825 37,825 01 36.500 421,973 178,030 209,895 1,044,234 11,010,1851 555,275' 2010 182,600,548 14,535,8401 0 14,535,640 3.500 55,199 55.199 0 36.500 588,171 291,021 214.263 172,888 0 555.275 2011 182,808,546 14,535.040 14,535,640 3.300 56,198 65,198 1O1 36.500 588,138 204,088 213,067 170,974 101 555,275 2012 106..280.719 14,826,353 14.825,353 3.500 58,303 58,303 101 36.600 699,731 206.979 216,918 175,840 0 555.276 2013 188.250,719 14,825,353 14,828,353 3.600 58,303 68,303 0I 38.500 599,716 204,548 220.418 174,755 101 555,275 2014 189,985,933 15,122880. 15,122,880 3.500 57,429 57,030 10 38,500 011,562 207,145 223,731 180,607 0 555,276 2015 189,955,933 15,122,880 15,122880 3.500 57,429 57,429 (Of 30.600 811,554 209,508 221,821 180.228 0 555,270 • 2016 193,785,852 15.425,338. 15,425,338 3.500 58,578 58.577 01 36.500 823,849 2I 1,888 224,950 187.032 Ill 555.275 2017 193,785.552 15,425.338 15,425,338 3.500 68,578 58,578 0 38.500 623,655 213,508 222,747 187401 101 555.274'': 2018 197,651,365 15,733,845 15,733.845 3300 59,749 59,750 101 38.500 635,821 215.152 230,572 180,197 0 555.275 2019 197,861,355 15,733.845 15,733,845 3.500 59.749 59,749 10 38.500 635,942 218,555 227,944 191.444 0 555,275. ' 2020 201.614,592 18,048,522. 16..048,522 3.500 60,944 80.844 0 35.500 846472 222.747 230,355 195,371 101 555.275 2021 201,614,592 16,048,522 16,048,522 3.500 80,944 80,944 0 36.500 648.424 223,396 232,424 192604 0 555,275 2022 205,646,884 16,389492 18,389,492 3.500 82163 52,015 119 36.500 861,230 223.844 239,294 198,093 101 555,275 2023 205.846.884 16,309.492 15.389,492 3.000 53,283 39,888 13,534 35.500 651,202 224.055 240,699 198.449 101 555.275 20241 209.759,022 16.696.882 18,696,982 3.000 54,346 40,266 27,818 36.500 874.286 229.045 241,910 203.331 101 555,275 ' 2025F 209,759,822 18.696,802 18,598,882 3.000 54,348 40,659 41.295 38.500 674,280 228,507 242,790 202982 0 555,275 20261 213,955,018 17,030.819 17,030,819 3.000 55.435 41,078 55,855 36.500 687,562 232,749 248,485 206,348 I01 555,274. ! 2027 213,955,018 17,030,819 17,030.819 3.000 55,435 41,488 89,804 36.500 887,580 236,513 243,688 207,378 0 555.275 ' 2028 218,234,118 17,371,436 17,371,438 3.000 58,544 41,901 84,247 30.500 701,088 239,823 263,914 207.332 101 555,274' 2029 216,234,118 17,371,436 17,371.436 3.000 66,544 42,320 98,470 38.500 701,116 237,821 253,367 210,130 101 555,274 20301 222,598,001 17,718,865, 17,718,885 2.000 38,450 42,743 94,177 36.500 714,910 245,178 257.609 212,123 1 555,275• , 20311 222,598,801 17,718,885: 17,718,885 2.000 30,450 43,171 89,458 36.500 714,899 242,043 261,373 211,483 0 555,2751 20321 227,050,777 18,073,242: 18,073,242 2.000 39,219 43,803 85.072 36.500 729,092 249,660 259.706 220,726 101 555,275 1 20331 227,050,777 18,073,742. 18,073,242 2.000 39,219 44,039 80.253 36.500 729,024 249.543 282.709 216.762 0 555.275. 20341 231,591,792 18,434,707 18,434,707 2.000 40,003 44,479 73,777 36.500 743,450 254,851 285,289 223.210 101 555.275 2035. 231.591.792 18,434,707: 18,434,707 2.000 40,003 44,924 70,856 36.500 739,229 494.053 267,382 239,994 1262,2001 293.075'.. i 2036! 236.223,628 18,803,401! 16,803,401 2.000 40,803 45,373 86,287 38.500 753,883 0 523,303 220,204 4,078 297,151'.. 20371 236,223,628 18,803,401! 18,803,401 2.000 40,803 45,827 81,263 38.500 753,753 522,287 0 231,467 526,616' 20361 240,948,101 19179,489, 19.179,469 2.000 41.044 46,285 56,022 36.500 767,320 844,447 177,1271 451,491 2039! 240,948,101 19,179,459: 19,179,489 0.000 55.022 0.000 0 451,491 2040; 245,767,063 19,583.058; 19,563,058 58,022 0 451,491 2041, 245,757,083 19,563,058! 19.563,058 56.0221 0 451.491 _2042!_ 250,603.404 19.954319: 19,954.319 50,022, 0 451,491 ! 648 19,954,319', 0 18,954,319 1,708,860 1,852,638 58,022 22,082,266 8,807,159 8,317.415 6,426,201 451,491 451,491 Ill General Fund Net Revenues-Property Tex•Specific Ownership Tex•Developer Advances.County Treasurer Fees 121 General Fund Expense•Operating Expenses•Repayment of Developer Advances 131 Debt Service Fund Net Revenues•Pmperry Tax•Specific Ownership Tax+Development Fees•Cepitaked Interest+Debt Reserve+Interest Income•County Treasurer Fees The Hills Metropolitan District N2 :Alternative 8 , Find Rate Bonds '.Flow of Funds Summary II Residential Platted I Developed Lots 1 General Fund Debt Service Fund ir Total Total Operation end I Debt i Residential Cumulative Assessed Value @ Platted Cumulative Assessed Value @ Cumulative Maintenance Nat Net Cumulative • Service Net Series 2005 Series 2008 Annual Cumulative ! • Year Units _ Market Value 7.98%12 yr Lep) Lots Market Value 29%(2 yr Lag: Assessed Value Mill Levy Revenues Expenses Cosh Available' Mill Levy Revenues Debt Service Debt Semite Cash Available Cash Available'.. 2004.' 0 0.000 33,000 33,000 O 0.000 0 0 0, 2005; 75 12,874,950 573 9,075,000 0 0 3.500 33,330 33,330 01 38.500 150,000 150,000 150,000' 2008: 175 58,241,592 11751 7,575,000 0 0 3.500 33,683 33.883 0! 30.500 248,215 252,000 13,7851 146,215 2007; 182 110,734,140 1,024,848 11821 3,700,000 2,831,750 3,656,598 3.500 34.000 34.000 01 38.500 456,493 252,000 204,493 350,708 2008; 218 179.187,149 4,709,183 @161 0 2,188,750 6,905.919 3.500 34.340 34,340 01 38.500 710,892 327,000 0 383,692 734,401' ' 2009, 125,132,782 8,887,569, 1,073,000 9,980.589 3.500 37,825 37,825 01 36.500 403,014 321,750 316.600 (237,239 497,165 2010: 182.808,548 14,535,640! 0 14,535,840 3.500 55,199 55,195 01, 38.500 583,909 316.500 318,500 151,691 445,474 20111 182,808,548 14,535,840'. 14,535.640 3.500 55,199 55,199 101 36.500 581,534 311,250 373,500 (103.218 342,259' 2012; 186,280,719 14,828,353: 14,826,353 3.500 56.303 58,303 IDI 36.500 592,389 261,000 369,850 (38.261 303,998 2013; 188,260,719 14,826,353•, 14,826,353 3500 58.303 58,303 0! 38.500 591,561 288,900 370,800 148.139 255,859 2014'. 189,985,933 15,122,880 15,122,880 3.500 57,429 57.430 101 38.500 802.790 266,100 366,800 (29,910 225,949 2015; 169,985,933 15,122,880 15.122,880 3.500 57,429 57,429 101 36.500 602,739 273,300 332,400 12,961 222,988. 2016 193,785,652 15,425,338: 15,425,338 9.500 58,578 58,577 0, 36.500 614.885 274,800 330,300 9,785 232,773 2011 193,785,652 15,425,338 15,425,338 3.500 58,578 58,578 0: 36.500 614,811 280,950 338,200 14,339 228.434. 2018' 197,681.385 15,733,845: 15,733.846 3.500 59,749 59,750 101 36.500 627,207 261,400 335,400 10,407 238,641 2019'. 197,861,385 15,733,8451 15,733,845 3.500 69,749 59,749 (01 36.500 827,174 288,500 342.600 (1,928 236,916 2020,. 201,614,592 16,048,522: 18,048,522 3.500 60,944 60,944 0', 36.500 639.805 285.900 344,100 9.605 246.721'' 2021: 201,6(4,592 18,048.522; 18.048,522 3.500 80,944 60,944 01 38.500 639,798 289,950 350,250 1402 248.319 2022: 205,646,884 18,369,492, 16,389.492 3.500 62,183 82,045 1191 ' 36.500 652,748 288,300 350,700 13,748 260,064. 2023! 205.848,884 18,389,4921 16,389,492 3.000 53,283 39,868 13,534! 36.500 652,757 298,300 355,800 857 260,721 2024: 209,759,822 19,898,882. 18,896,882 3.000 54,348 40,288 27.616; 36.500 865,937 298,250 355,200 12,487 273,208 2025 209.759,822 18.896,882. 18,896,882 3.000 54,348 40,689 41.295j 36.500 865,888 289.500 399,260 12.8621 270,346 20281 213.955.018 17,030.819! 17,030,819 3.000 55,435 41.078 55.655; 36.500 679.328 300,050 366,900 12,376 282,722, ' 2027' 213,955.018 17,030,819' 17,030,819 3.000 55,435 41.488 69,804' 36.500 879,330 309,900 369,200 230 282,951 2028; 218.234,118 17,371,435, 17,371,436 3.000 58,544 41,901 84,247; 38.500 693.058 308,350 370,800 13,908 296,859 2029 218.234.118 17.371,436! 17,371,436 3.000 58,544 42.320 98,4701 36.500 693,052 316,100 376.700 262 297.122. 2030; 222.598,601 17,718,865; 17,718,865 2.000 38,450 42.743 94,1771 38.500 .707,048 312,450 381,550 13,046 310,168 2031j 222590,801 17.718,885! 17,718,865 2.000 38,450 43.171 89,4661 35.500 707,021 316,100 390,350 11,4291 308,739: 2032. 227,050,777 18,073,242' 18,073,242 2.000 .39,219 43,603 85,072.1 36.500 721.335 322,350 382,750 16,235 324,974:. 2033' 227,050,777 18,073,242 18,073,242 2.006 39,219 44,039 80,253; 38.500 721,358 325.200 394,600 1,358 326.332. 2034 231,591,792 18,434,707 18,434,707 2.000 40,003 44.479 75,7771 36.500 735.917 326,650 395,100 14.167 340.499 2035 231,591,792 18,434,707: 18.434,707 2.000 40,003 44,924 70,856: 36.500 735,914 331,700 404,350 11361 340,363 2036 238.223.828 18.803.401: 18.803,401 2.000 40,803 45,373 66.287; 36.500 750,755 0 736.850 13,905 354,268 • 2037 236,223.828 18,803,401,. 18.803.401 2.000 40,803 45,827 61,263'. 35.500 750,771 749,650 921 355,189, • 2038 240,948,101 19,179,488: 19,179,489 2.000 41,044 46,285 56,022! 35.500 765,955 748.000 16,955 372,144 2039 240,946,101 19,179,469, 19,179,489 0.000 56,0221 0.000 0 372,144, 2040 245,767,063 19,583,068; 19,583,058 56,022; 0 372,144 2041; 245,757,063 19,563,058, 19,583,058 56,022, 0 372,144 20421 250 68"404 19,954,319, 19,954,3191 58,0221 0 372.144 1 648 19,954,319, 0 19,954,319 1,708,660 1,652,636 56,022 21.264,594 8,902,500 11,989,950 372,144 372,144 III General Fund Net Revenues-Property Tax•Specific Ownership Tea•Developer Advances'County Treasurer Fees 121 Geneva!Fund Expense•Operating Expenses•Repayment of Developer Advances 131 Debt Service Fund Net Revenues-Property Tax+Specific Ownership Tex•Development Fees+Capitalized Interest•Debt Reserve+Interest Income'County Treasurer Fees I I I I I I I I I i I I I I 1 I I I i • • The Hills Metropolitan District 13 Alternative A Aarlebk Rate Bonds -Flew el Funds Summery Commercial 1 Platted I Developed Lend F General Fund J Debt Service Fund Total I Total Operation end Debt ' I Square Cumulative Assessed Value @I Planed Cumuletive Assessed Value@ Cumulative Maintenance Net Net Cunulatre Service Net Series 2005 Series 2008 Repay Der Annul Cumulative Year 1 Feet Market Value 29%12 yr LeglSquare Feet Market Veke 29%12 yr Lagl Assessed Value 896 Levy Revenues Expenses Cash Anuable MA Levy Revenues Debt Service Debt Service Advances Cash Availahk Cash Available' • 2004! I 0.000 20,000 20,000 0i 0.000 0 0 0 zoos! I 0 0 0 0 3.000 20,000 20,000 01 37.000 0 0 0 2006; 1 0 0 0 0 3.000 20.000 20,000 0' 37.000 780,101 0 790,101 780101' 2007 t 248,223 2.482,230 0 0 3.000 20,000 20,000 0I 37.000 10,443 183,370 1172.9271 807,174. •' 2008 I 246,223 4,924.460 0 0 3.000 30,000 30.000 0: 37.000 7,415 183,472 0 0 1176,0571 431,107, • 2009 I 714,047 114,047 3.000 30,300 30,300 01 37.000 1,382.168 183,374 0 0 1.198,784 1,629.911 . 2010 265,163 30,458,894 I 1265,1631 1µZ374 1,442,374 3.000 30,603 30,603 0; 37.000 343,795 183,374 319,975 0 11595531 1,470,358' 2011 227.283 26,629.826 j 1227,2831 1,442.374 1,442,374 3.000 30909 30,909 0! 37.000 303.123 133,374 319,981 0 1200,2321 1,270,126' 2012 32,890,442 8,833979' 702.249 9,535.328 3.000 31,218 31,218 0' 37.000 403,776 165,486 286,546 0 150.2551 1,219.877. 2013 57,237.438 16,598.857 0 16,596857 3.000 54,029 54,029 01 37900 689.856 210,325 333,347 0 148,184 1,366.055 2014 58,382187 16,930,634 18.930,834 3.000 55,110 55.111 IDI 37.000 705,613 215,150 348,159 763,126 1621,8221 744,234 2015 58,382187 18,930,634 16,930,834 3.000 55,110 55.109 01 37.000 894.653 220,510 348.281 125,862 1 744,234 20161 59.549.831 17.260,4511 17,289951 3.000 58,212 56,213 101 37.000 708.325 222.878 355.233 130.415 101 744.234 ! 20171 59,549,831 17,289,451' 17,269.451 3.000 56.212 56.212 0 37.000 708.357 224,513 351,567 132278 0 744,234 20181 60,740827 17,614.840 17,614,040 3.000 57.336 57,337 10 37.000 722,238 231,144 357,059 133,136 ❑1 744,234 2019'1 50,740,827 17,614.840 17,614,840 3.000 57,336 57,336 0 37.000 722288 227,322 358,885 136081 1 744,234 2020; 81,955.844 17,967.137 17,967.137 3.000 58,483 58,484 10 37.000 738.470 233.518 364,640 138,313 111 744234 2021; 61.955.644 17.967,137 17,967,137 3.000 68,483 58,483 101 37.000 738.456 234,162 364,770 737,524 I 744,234; 20221 63,194,757 18,328,480 18,326,480 3.000 59,853 59,652 0l 37.000 750.952 239.598 369,729 141,626 101 744,234 2023! 63.194,757 18,320,4801 18.326900 3.000 59,653 59,653 101 37.000 750.875 239.570 374,210 137,096 101 744,234' 20241 64.458,652 18,693,009; 18,693.098 3.000 60.846 60.845 01 37,000 765,692 244,327 378,286 143,079 0 744,234 2025! 84.458,652 18.693.009' 18,693.000 3.000 60.848 60,848 101 37.000 765.732 243.543 378,751 145.438 0 744,234 20261 65,747.825 19,086.8691 19.080858 3.000 82,063 62,062 0] 37.000 760,789 247,547 305.025 148,215 101 744,234 20271 65,747,825 19,065,869. 18,088.889 3.000 62,083 62.062 0: 37.000 780,769 246984 387,594 147,092 101 744.234 20281 67,062,782 19,4402071 10448,207 3.000 63,304 83,305 10! 37.000 796,076 249,400 399,726 146,951 101 744,234 2029; 67.062.782 19,4402071 19,448.207 3.000 63,304 63,304 10! 37.000 796996 252,179 395,811 140106 I 744,234 20301 68.404.037 19,837,171 19,837.171 3.000 ' 64,570 84.568 01 37.000 011,753 254,511 406,683 150.560 101 744.234 20311 68,404.037 10837.1711 19,837,171 3.000 64,670 64,570 01 37.000 811,809 256,363 401,638 153,808 0 744.234. 2032 69.772.118 20.233.914: 20.233,914 3.000 65,861 65,862 101 37.000 827,733 262.745 411,359 153.619 0 744,234. 20331 69,772,118 20,233,914] 20,233,914 3.000 65.861 65,881 01 37.000 827.744 263,306 410,063 154,296 101 744,234. 20341 71,167,560 20,638,593:! 20,638,593 3.000 67,179 67,170 01 37.000 844.040 260.554 418,309 157,178 101 744.234 2035. 71,167,560 20,638,5931 20.638,593 3.000 67,179 67,178 0; 37.000 944,096 260019 415,623 150,454 1 744.234- 1 2035! 72,596,912 21,051,384:, 21.051,384 3.000 68,522 68.523 101 37.000 856,054 541,324 422,473 159.675 1267,5171 475,517 20371 72,590.912 21,051,3641 21,051,394 3.000 68,521 68,522 0i 37.000 856,203 0 697,640 168.563 0 476,617' 20381 74,042.730 21.472,3921 21,472,392 3.000 68,926 64,541 4,385: 31.000 873,097 705,058 168,039 0 475,517' 2039! 74,042,730 21,472,392; 21,472,392 3.000 68,928 40,840 32471 37.000 864,712 1,184,162 0 1315,4501 157,168. 20401 75,523,584 21,901,8391 21,901,839 0.000 32,471 0.000 0 0 157,160! 2041; 75,523,504 21,901.0391 21,901,839 32,4711 0 157,769' 2042' 77,034,056 22,339.876, 22,339.879 324711 0 157,188, 401446 22.339.876; 0 22,338,876 1.903.190 1.870,718 32,471 24,259.299 7.181.313 12.639.486 4,280,733 157.160 157,1681. Ill General Fund Nei Revenues•Property Tax•Specific Ownership Tax•Developer Advances•County Treasurer Fees 121 General Fund Expense•Operating Expenses•Repayment of Developer Advances 131 Debt Service Fund Net Revenues-Property Tax+Specific Ownership Tax•Development Fees•Capitalized Interest+Debt Reserve+Interest Income.County Treasurer Fees The Hills Metropolitan District#1 Forecasted Statement of Sources and Uses of Cash For the Years Ending December 31,2004 through 2042 J.W. Simmons &Associates, P. C. Certified Public Accountants To the Petitioners of the Proposed Hills Metropolitan District#1 Firestone, Colorado We have compiled the accompanying forecasted statements of sources and uses of cash of the proposed Hills Metropolitan District _ #1 (Exhibit IL the related projected debt service schedules(Exhibits II to IV)and the analysis of absorption and assessed values (Exhibit V) for the years ending December 31,2004 through 2042,in accordance with standards established by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of a forecast information that is the representation of management and does not include evaluation of the support for the assumptions underlying the forecast. We have not examined the forecast and, accordingly, do not express an opinion or any other form of assurance on the accompanying statements or assumptions. Furthermore,there will usually be differenpes 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. _ WSim..mo i &A„ociafeo, /2C October 4,2004 9155 East Nichols Avenue.,Suite 330,Centennial,Colorado 80112-3443 Telephone(303)689-0833 Fax(303)689-0834 The Hills Metropolitan District#1 Summary of Significant Assumptions and Accounting Policies December 31, 2004 through 2042 The accompanying forecast presents,to the best of the Developer's knowledge and belief,the expected cash receipts and disbursements for the forecast period. Accordingly, the forecast reflects its judgment as of October 4, 2004. The assumptions disclosed herein are those that management believes are significant to the forecast. There will usually he differences between the forecasted and actual results,because events and circumstances frequently do not occur as expected,and those differences may be material. The purpose of this forecast is to show the amount of funds available for the future construction of infrastructure within the Districts by the issuance of general obligation bonds and subordinate developer advances and the anticipated funds available for repayment of the bonds and advances. The forecast is presented with two alternatives. Those Exhibits indicated by Alternative A,assume the issuance of general obligation variable rate debt secured by an irrevocable bank letter of credit. Alternative B assumes general obligation fixed rate bonds will be issued. Note 1: Ad Valorem Taxes The primary source of revenue for the District will be the collection of ad valorem taxes. Residential property is forecasted to be assessed at 7.96% of market values. Market values for 769 residential homes are estimated to range from S150,000 to S275,000 as of 2003. Finished lots are forecasted at S25,000 per lot and platted lots are forecasted at 5.12,500. Market values are forecasted to inflate at 2%per year. All property is assumed to inflate at 2% biennially commencing in 2008. Exhibits VA and V•B detail the forecasted absorption,market values and related assessed values. Property is assumed to he assessed annually as of January 1st. Property included in this forecast is assumed to be assessed on the January 1"subsequent to completion. The forecast recognizes the related property taxes as revenue in the subsequent year. The County Treasurer currently charges a 1.5%fee for the collection of property taxes. These charges are reflected in the accompanying forecast as tax collection fees. The forecast assumes that Specific Ownership Taxes collected on motor vehicle registrations will be 10% of property taxes collected. The mill levy imposed by the District is proposed to equal 3.500 mills (decreasing in later years) for operations and 36.500 mills for debt service for a total mill levy of 40.000 mills(adjusted for changes in the ratio of assessed values to market values). The Hills Metropolitan District#1 Summary of Significant Assumptions and Accounting Policies December 31,2004 through 2042 Note 2:Interest Income Interest income is assumed to he earned at 3.0%per annum. Interest income is based on the year's beginning cash balance and an estimate of the timing of the receipt of revenues and the outflow of disbursements _ during the course of the year. Note 3: Band Assumptions Alternative A The District proposes the issuance of variable rate general obligation bonds totaling$8,015,000 in 2005 and 2008.The bonds will have a maturity of 30 years from the date of issuance. Both series are proposed to carry a coupon rate of 4.0%with letter of credit fee of 1%declining to .5%when the ratio of outstanding debt to the assessed valuation of the District is 40%or less and an annual re-marketing fee of.25%. Exhibits 11-A and III-A reflect the proposed repayment schedule of these bonds. The Bonds are anticipated to be secured by a limited mill levy not to exceed 50.000 mills(adjusted for changes in the ratio of assessed values to market values). The following table reflects the proposed sources and uses of junds for each bond issue. Series 2005 Series 2008 Sources: Bond Proceeds $3,800,000 $4,215,000 Uses: Issuance costs 188,045 203,852 Reserve Fund 282,000 340,883 Available for improvements 3,329,955 3,670,265 or developer advances $3,800,000 $4,215,000 The District also intends to issue$10,551,276 of subordinate developer owned bonds or loans in 2004. The proceeds will be available to fund District improvements. The bonds or loans carry an estimated coupon rate of 8%(the actual rate will be the indexed rate permitted by the Service Plan)for 30 years and it is forecasted that the District will repay the bonds or loans from the proceeds of the above described Series 2005 and Series 2008 bonds, reimbursements from other Districts and other available revenues not required for the Series 2005 and Series 2008 bonds. Exhibit IV-A reflects the forecasted repayment of the principal and interest on the subordinate bonds or loans. The Hills Metropolitan District#1 Summary of Significant Assumptions and Accounting Policies December 31, 2004 through 2042 Note 3: Bond Assumptions(continued) Alternative B The District proposes the issuance of general obligation bonds totaling$8,350,000 in 2005 and 2008. The bonds will have a maturity of 30 years from the date of issuance. Both series are proposed to carry a coupon rate of 7.0%. Exhibits II-B and III-B reflect the proposed repayment schedule of these bonds. The Bonds are anticipated to be secured by a limited mill levy not to exceed 50.000 mills(adjusted for changes in the ratio of assessed values to market values). The following table reflects the proposed sources and uses of funds for each bond issue. Series 2005 Series 2008 Sources: Bond Proceeds $3,250,000 $5,100,000 Uses: Issuance costs 130,000 204,000 Capitalized interest 187,129 • Available for improvements 2,932,871 4,896,000 or developer advances • $3,250,000 $5,100,000 A The District also intends to issue $8,757,112 of subordinate developer owned bonds or loans in 2004. The proceeds will be available to fund District improvements. The bonds or loans carry an estimated coupon rate of 8%(the actual rate will be the indexed rate permitted by the Service Plan)for 30 years and it is forecasted that the District will repay the bonds or loans from the proceeds of the above described Series 2007 bonds and reimbursements from other Districts. Exhibit IV-B reflects the forecasted repayment of the principal and interest on the subordinate bonds or loans. Note 4: Development Fees The District anticipates imposing a development fee of$2,000 on each single family equivalent.The forecast estimates that$1,538,000 of development fees will be collected from 2005 through 2008. It is anticipated that the development fees will be restricted for the payment of principal and interest on the bonds. The Hills Metropolitan District#1 Summary of Significant Assumptions and Accounting Policies December 31,2004 through 2042 Note 5: District Improvements Construction costs for district improvements are forecasted to total 521,154,778 and are forecasted to be paid from 2004 through 2006.The District will seek reimbursement of 45%of such costs from other districts which benefit from the improvements as follows: The Hills Metropolitan District#2. 15%or S3,173,217 in 2005 The Hills Metropolitan District#3-30%or S6,346,433 in 2006 - A portion of the construction costs are forecasted not to be supported by bonds or developer advances. These amounts are$4,257,068 under Alternative A and $6,051,232 under Alternative B. it is forecasted that these amounts will be contributed to the Districts by the developer. Note 6: Operating and Administrative Expenses Administrative expenses for legal,accounting,audit,management and insurance are forecasted at $33,000 per year. Inflation is provided for operating and administrative expenses at 1%per year commencing in 2005. Operating expenses incurred prior to the collection of ad-valorem taxes are expected to be funded by developer advances totaling 3101,740. The forecast reflects that developer advances can be repaid commencing in 2008 through 2016 with interest at 8%per annum. ALTERNATIVE A Variable Rate Financing ;, 1 { I ' I I 'r . 1 l ! S I The Rills Metropolitan District#1 Ferecested Sources end Uses of Cash For the Years Ended December 31,2004 through 2042 I Igi1►1 2904 2945 240.6 2491 2906 2448 20.112 29]1 2012 2413 General Feed Beginning cash available 0 0 0 0 101 10) 0 101 0 I9) 0 Revenues Property texts 1,367,124 0 0 9,275 20,452 38,120 48,923 53,102 53,102 54,184 54,184 Specific ownership texas 136,712 0 0 927 2,045 3,812 4,592 ' 5,310 5,310 5,418 6,416 Developer advances 101,740 33,000 33,330 23,800 11,810 1,805,578 33,000 33,330 33,802 34,307 39,732 50,516 58,412 58,412 58,580 59,580 Expendrtures County treasurer fees 21,107 0 0 139 307 642 689 797 797 812 812 Repay developer advances 178,793 4,850 15,144 22,585 22,235 23,033 22,678 Operating expenses 1,374,789 33,000 33,330 33,683 34,000 34,340 34,683 35,030 35,380 35,734 36,092 1,572,690 33,000 33,330 33,802 34,307 39,732 50,516 58,412 58,412 59,580 59,580 Ending cash available 32887 0 _ 0 (Dl _ 101 0 (0)` 0 109._____ _0 0 Mill levy 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 Capital Pro acts Fund Beginning cash available 0 0 0 0 0 0 0 0 0 0 0 Revenues • Bond proceeds 8,015,000 0 3,800,000 4,215,000 Reimbursements from other Districts 9,519,650 3,173,217 8,346,433 Developer advances 10,551,278 10,551,276 Developer contribution 4,257,088 4,257,068 Interest Income 0 0 32,342,994 14,808,344 6,973,217 6,346,433 0 4,215,000 0 0 0 0 0 Expenditures Issuance costs 391,897 188,045 0 203,852 0 Transfer to Debt Service Fund 622,883 282,000 340,883 Repay developer advances 10,173,438 4,387,894 2,115,477 3,670,255 District improvements 21,154,778 14,808,344 2,115,476 4,230,956 32,342,994 14,808,344 6,873,217 6,348,433 0 4,215,000 0 0 0 0 0 Ending cash available 0 0 0 0 0 0 0 0 0 0 0 • Exhibit I-A i t I c, ► t r. I t. i i t The Hills Metropolitan Olstrlot St Forecasted Sources and Uses of Cash For the Years Ended December 31,2004 through 2042 Totaas 2004 2Q4@ 2440 29.41 WU WM 20]4 2011 2012 2012 Debt Service Fund Beginning cash available 0 0 0 838,935 1,122,803 1,551,728 2,308,029 622,883 822,883 622,883 822,884 Revenues Property taxes 19,688,227 0 0 96,720 213,280 378,883 478.918 553,775 553,775 564,850 564,850 Specific ownership taxes 1,958,823 0 0 9,872 21,328 37,568 47,892 55,377 55,377 56,485 56,485 Development fees 1,538,000 0 550,000 398,000 386,000 204,000 0 0 0 0 0 Transfer from Capital Project Fund 822,883 0 282,000 0 0 340,883 Interest income 504,481 0 4,935 12,466 20.049 38,187 41,628 13,837 13,135 13,348 13,156 24,212,393 0 836,935 516,858 640.656 995,422 568,434 622,890 622,288 634.684 634,491 Expenditures Debt service•GO Debt Series 2005 8,057,888 Q 229,540 208,533 233,471 222,270 206,412 236,555 239,155 241,568 Debt service•GO Debt Series 2008 9,098,812 0 226,734 228,812 236,587 233,822 242,424 Repay developeredvences 5,984,442 1,797,385 161.660 140,839 153,235 142,027 County treasurer fees 293,823 0 0 1,451 3,199 5,650 7,184 8,307 6,307 8,473 8,473 23,434,765 0 0 230,991 211,732 239,121 2,253,680 622,990 622,287 634,684 634,491 Ending cash available 777,629 0 836,935 1,122 803 1,551,728 22.,308,029 622,883 622,883 622 883 62.2_,66L_______61_41214. Mil levy 36.500_ 38.500 36.500 38.500 38.500 36.500, 36.500 36.500 38.500_ 36.500 Total Mill Levy _ 40.000 40.000 40.000 40.000 40.000 40.000 40.000 40.000 - 40.000 40.000 Assessed valuation 1000's) Beginning 0 U 0 0 2,650 5,843 10,320 13,121 15,172 15,172 15,476 New construction 14,793 0 2,850 3,193 4,360 2,801 1,788 0 0 0 Inflation 11.0%per annum) 6,035 117 262 303 Ending 20,828 U 0 2,650 5,843 10,320 13,121 15,172 15,172 15475___ 15475 • Exhibit I•A i. f ! . 1 ( > 1 1 1 1 1 r, 1 I I 1 1 The Mlle Metropolitan District//1 Forecasted Sources and Usos of Cash For the Years Ended December 31.2004 through 2042 2914 2019 2Q16 2Q1Z 241$ 241,4 2020 2Q21 2422 1023 2024_ 1015 General Fund Beginning cash available 0 101 101 4,303 19,154 34,678 49,820 65,849 81,092 78,696 75,905 73,467 Revenues Property taxes 55,247 55,247 58,352 48,302 49,268 49,268 50,253 50,253 34.172 34,172 34,856 34,856 Specific ownership taxes 5,525 5,525 6,635 4,830 4,927 4,927 6,026 5,025 3,417 3,417 3.486 3,486 Developer advances 60,772 60,772 61,987 53,132 54,194 54,194 55,278 55,278 37.589 37,589 38,341 38,341 Expenditures County treasurer fees 829 829 845 725 739 739 754 754 513 513 523 523 Repay developer advances 23,491 23,126 19,853 Operating expenses 36,453 38,817 37,185 37,557 37,933 35,312 38,895 39,082 39,473 39,868 40,268 40,869 60,772 60,772 57,684 38,282 38,872 39,051 39,449 39,836 39,985 40,380 40,789 41,192 Ending cash aveileble _____a___.____1.01_ 4,303 19,154 34,676 49,820 65,649 81,092 78,896 75905_._.__73_457.,,.___._70606 Mill levy 3.500 3.500 3.500 3.000 3.000 3.000 3.000 3.000 2.000 2.000 2.000 2.000 L Capital Projects Fund Beginning cash available 0 0 0 0 0 0 0 0 0 0 0 D Revenues Bond proceeds Reimbursements from other Districts Developer advances Developer contribution Interest Income _ 0 0 0 0 0 0 0 0 0 0 0 0 Expenditures Issuance costs Transfer to Debt Service Fund Repay developer advances District improvements 0 0 0 D 0 0 0 0 0 0 0 0 Ending cash available 0 0 0 0 0 0 0 0 0 0 _ 0 0 Exhibit I•A I 1 ) 1 I > 1 1 I I r ) 1 } 1 I I The Hills Metropolitan District/11 Forecasted Sources end Uses of Cosh For the Years Ended December 31,2004 though 2042 2414 241 221fi 2011 22111 201fl 2222 2221 2022 2023 2424 202E l Debt Service Fund k Beginning cash available 622,884 622,883 622,884 622,883 622,883 622,883 622,883 822,884 822,883 622,883 622,883 622,883 Revenues Property taxes 576,147 576,147 587,670 587,670 599,424 699,424 611,412 611,412 623.640 623,640 636,113 636,113 Specific ownership tuxes 57,615 57,615 58,787 58,767 59,942 59,942 81,141 81,141 62,364 82,364 63,611 63,611 Development lees Transfer from Capital Project Fund Interest income 13,369 13,282 13,509 13,348 13,509 13,369 13,556 13,434 13,648 13,462 13,704 13,542 847,131 647,044 659,947 859,783 672,870 672,735 686,109 685,988 899,853 899,467 713,429 713,266 Expenditures Debt service-GO Debt Series 2005 243,635 250,505 246,921 . 253,362 254,240 259,915 260,125 260,139 264,816 269.058 267,835 271,396 Debt service-G0 Debt Series 2008 240,452 238,541 241,619 244,514 247,054 249,414 251,535 258,459 254,821 261,213 252,140 267,868 • Repay developer advances 154,402 149,357 182,593 153,093 162,592 154,415 165,278 158,219 170,661 159,842 173,913 184,463 County treasurer fees 8,642 8,842 8,815 8,815 8,991 8,991 9,171 9,171 9,355 9,355 9,542 9,542 647,131 647,044 659,947 859,784 672,876 672,734 886,109 685,988 899,652 699,487 713.428 713,288 Ending cash available 621883 _622,884 622,883 L 622,883 _ 822,883 622,883 622,684 622,883 622 883 822,883 822,883 622,884 Mill levy 36.500 38.500 38.500 38.500 36.500 36.500 38.500 36.500 38.500 38.500 36.500 36.500 • Total Mill Levy 40.000 40.000 40.000 39.500 39.500 39.500 39.500 39.500 38.500 38.500 38.500 38.500 Assessed valuation 1000's) Beginning 15,475 15,785 15,785 18,101 18,101 16,423 16,423 16,751 16,751 17,086 17,086 17,426 New construction 0 0 Inflation 11.0%per annum) 310 318 322 328 335 342 Ending 15,785 15185 16,101 18101 16,423 161423 16,751 _ 18,751 17,086 17,086 17,428 17,428 Exhibit I•A I 4 > 1 1 t , ,. ) 1 ) ) t } II l I . 1 The MIDI Metropolitan District NI Forecasted Sources and Uses of Cash for the Years Ended December 31,2004 through 2042 2025 2027 202@ 2029 2434 1431 2 2 2433 2034 2035 2036 2037 General Fund Beginning cash aveileble 70,806 68,105 65,193 62,638 59,854 57,054 54,018 51,349 48,246 45,521 42,352 39,568 Revenues Property taxes 35,553 35,553 38,284 38,284 38,989 38,989 37,729 37,729 38,483 38,483 39,253 39,253 • Specific ownership taxes 3,555 3,555 3,826 3,626 3,699 3,699 3,773 3,773 3,848 3,848 3,925 3,925 Developer advances 39,108 39,108 39,890 39,890 40,688 40,888 41,502 41,502 42,332 42,332 43,118 43,178 Expenditures County treasurer fees 533 533 544 544 555 555 568 586 577 577 589 589 Repay developer"cleanses Operating expenses 41,078 41,486 41,901 42,320 42,743 43,171 43,603 44,039 44,479 44.924 45,373 45,827 41,600 42,020 42,445 42,864 43,298 43,726 44,169 44,805 45,055 45.501 45,962 46,416 Ending cash evadable 68,105 85,193 _ 62,638 59,664 57,054 54,016 51,349 48148 45,521 42,352 39,568 35,331 Mill levy 2.000 2.000 2.000 2.000 2.000 2.000 2.000 . 00 _ 2.000, _ 2.000 2.000 2.000 _ L Capital Projects Fund I Beginning cash available 0 0 0 0 0 0 0 0 0 0 0 0 Revenues Bond proceeds Reimbursements from other Districts Developer advances Developer cent►ibutlon Interest Income 0 0 0 0 0 0 0 0 0 0 0 0 Expenditures Issuance costs Transfer to Debt Service Fund Repay developer advances District improvements 0 0 0 0 0 0 0 0 0 0 0 0 Ending cash eerie* 0 0 0 0 0 0 0 0 0 0 0 0 Exhibit!:A i l 1' I 1 C t ) ) 1 ) i i 4 I, I I 1 I The Hills Metropolitan District It Forecasted Sourns and Uses of Cash For the Years Ended December 31,2004 through 2042 2420 2D2Z 2020 2021 200Q 2011 2032 2033 2014 2036 2210 203/ Debt Service Fund Beginning cash available 622.884 622,884 622,884 622,883 622,883 822,884 622,883 822,883 622,882 604,628 499,622 708,239 Revenues Property taxes 648,836 648,836 861,812 661,812 875,049 675,049 688,649 688,549 702,320 702,320 718,367 716,367 Specific ownership taxes 84,884 64,884 66,181 86,181 67,505 67,505 68,855 88,855 70,232 70,232 71,637 71,637 Development lees Transfer from from Capital Project Fund Interest Income 13,815 13,592 13,810 13,619 13,878 13,721 14,017 13,806 14,058 8,593 12,147 15,661 727,534 727,311 741,804 741,613 756,431 756,275 771,421 771,210 786,610 781,148 000,150 803,564 Expenditures Debt service•GO Debt Series 2005 274,408 278,977 279,069 280,710 281,921 287,467 287,409 291,878 295.696 582,902 Debt service'GO Debt Series 2008 263,038 273,223 272,718 281,989 280,483 283,770 281,590 289,183 286,014 292,815 582,788 594,311 Repay developer advances 180,356 167,379 180,093 188,988 184,002 174,914 192,094 178,823 212,821 County treasurer fees 9,733 9,733 9,927 9.927 10,126 10,128 10,328 10,328 10,535 10,535 10,746 10,746 727,534 727,311 741,805 741,613 756,431 756,278 771,421 771,211 804,965 886,051 593,533 605,067 Ending cash available 822 884 822.884 622.883 622 883 622 884 622 883 822.883 622,882 604.528 499.822 706,238 904.747 Mill levy 38.500 38.500 36.500 36.500 36.500 38.500 30.500 36.500 38.500 38.500 38.500 36.500 Total Min Levy 38.600 38.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 Assessed valuation 1000's) Beginning 17,428 17,778 17,776 18,132 18,132 18,494 18,494 18,884 18,884 19,242 18,242 19,628 New construction 0 0 0 0 . 0 0 0 0 0 Inflation 11.0%per annum) 349 356 383 370 377 385 Ending 17 718 17 776 18 132 18132 18 494 18,494 18 664 19 884 19 242 19 242 19 628 19.626 Exhibit I-A 1 ! 1 ? ) 1 1 ) 1 f E 1 1 I 1 ! Ilia Hills MeteopeMten District#1 i Forecasted Sources and Uses of Cash 1 Far the Year:Ended December 31,2004 through 2042 200& 20.39 2040 2041 2042 F--^ GenerelFund_ ----1I Beginning cash avaaable 36,331 32,887 32,887 32,887 32,887 Revenue: Property taxes 40,038 0 0 0 0 Specific ownership taxes 4,004 0 0 0 0 Developer advances 44,042 0 0 0 0 Expenditures County treasurer lees 1,201 0 0 0 0 Repay developer advances Operating expenses 46,285 47,486 0 0 0 0 Ending cash available ,32 887 3^887 32 987 32x887 32,887 Mil!levy 2.000 0.000 0.000 0.000 __ 0.000 Capital Pro acts Fond ll Beginning cash available 0 0 0 0 0 Revenues Band proceeds Reimbursements from other Districts Developer advances Developer contribution Interest Income 0 0 0 0 0 Expenditures . Issuance costs Transfer to Debt Service Fund Repay developer advances District improvements 0 0 0 0 0 Ending cash available 0 0 0 0 D Exhibit I-A 1 1. 1 ? { 1 1 I 1 > 1 ! 1 ' 1 f I t I The Hills Metrepuiitan District 11 Forecasted Sources and Uses of Cash For the Years Ended December 31,2004 through 2042 20.08 2039 2040 20.41 21142 r Debt Service Fund 1 Beginning cosh available 904,747 777,829 777,829 777,829 777,629 Revenues Property tales 730,894 0 0 0 Specific ownership taxes 73,009 0 0 0 Development fees Transfer from Capital Project Fund Interest income 13,374 _ 817,138 0 D 0 0 Espendittnes Debt service.00 Debt Series 2005 Debt service V GO Debt Series 2008 933,298 Ropey developer advances County treasure fees 10,980 _ 944,258 0 0 0 0 Ending cash evalable ,777,629 777,829 777,629 771,829 777,829 Mill levy 36_500 Total Mill Levy 38.500 0.000 0.000 0.000 0.000 Assessed valuation I000'el Beginning 19,626 20,019 20,019 20,419 20,419 New construction 0 0 0 0 0 Inflation 11.0%per ennumi 39'3 40D 408 Ending 20,019 20,019 20419 20,419 20,828 Exhibit hA The Bills Metropolitan District SI Schedule of Genera10098atin Debt-Series 2005 For the Years Ended December 31.2005 to 2035 teller of Credit Remarketing Rating& Annuli 01044 Tit fractal 8884801 bitten EO43 ins Trustee Fen IRS 3.800,000 — 2005 0 0 0 0 3.800.000 2006 76,000 19,908 - 3,800,000 2006 20,000 4.00% 76,000 20,102 9,450 8,000 229.540 3,780,000 2007 75,600 19,387 3,780,000 2007 4.00% 75,600 19.996 9,450 8,000 208.533 3.780.000 _) 2008 75,690 19,887 3,780,000 2008 25,000 4.00% 75,600 19.996 9,388 89OO 233,471 3,755,000 2009 75,100 19,864 3,755,000 2009 15,000 4.00% 75,100 19,684 9,350 8,000 222,278 3.740,000 2010 74.800 19,677 3,740,000 2010 4.00% 74,800 19,785 9,350 8,000 206,412 3,740,000 2011 74,800 9,838 3,740,000 2011 50,000 4.00% 74,800 9,892 9.225 8,000 236,555 3,690,000 2012 73.800 9,707 3.690.000 2012 55,000 4.00% 73.800 9,780 9,088 8,000 239,155 3,635,000 2013 72.700 9,615 3,635,000 - 2013 60,000 . 4.00% 72.700 9,615 8,938 8,000 241.568 3,575,000 2014 71,500 9,404 3,575,000 2014 65.000 4.00% 71.500 9,458 8,775 8,000 243,635 3,510.000 2015 70,200 9233 3,510,000 2015 75.000 4.00% 70,200 9,284 8,588 8.000 250,505 3,435,000 2016 68,700 9,036 3,435,000 2016 75,000 4.00% 08,700 9.085 8,400 8900 246,921 3,360900 2017 67,200 8,987 3.360,000 2017 85,000 4.00% 67,200 8,887 8,188 8,000 253,362 3,275.000 2018 65,500 6915 3.275,000 2018 90.000 4.00% 65.500 8,862 7.963 8,000 254.240 3.105,000 2019 63,700 8.378 3,185,000 2019 100.000 4.00% 63,700 8,424 7,713 8,000 259,915 3.085.000 2020 61,700 8.115 3.085.000 2020 105,000 4.00% 61,700 8,160 7,450 8,000 260,125 2,980,000 - 2021 59,600 7.882 2,980.000 2021 110,000 4.00% 59,600 7,882 7,175 8,000. 260,139 2,870000 2022 57,400 7.550 2,870900 2022 120,000 4.00% 57,400 7,591 6.875 8,000 264,016 2750,000 2023 55,000 7234 2,750,000 2023 130900 4.00% 55900 7.274 6,550 8,000 269.058 2,620,000 2024 52.400 6,892 2,620,000 2024 135,000 4.00% 52400 6.930 6,283 8,000 267,835 2485.000 2025 49,700 6,573 2485,000 2025 145900 4.00% 49,700 6.573 5,850 8,000 271,396 2340.000 - 2020 48,800 6,156 2,340,000 2026 155900 490% 46,800 6,129 5,463 8.000 274,408 2,185,000 2027 43,700 5,748 2,185,000 2027 165,000 4.00% 43,700 5,779 5,050 8,000 276,977 2.020,000 2028 • 240,400 5,314 2,020,000 - 2028 175900 4.00% 40,400 5,342 4,613 8,000 279.069 1,845.000 2029 36,800 4,880 1,245.E 2029 185900 4.00% 36,900 4,880 4,150 8,000 280.710 1.860.000 2030 33,200 4,367 1,660000 2030 195,000 4.00% 33.200 4.391 3,863 8.000 281,821 1.465.000 2031 29,300 3,854 1,465.000 - 2031 210,000 4.00% 29,300 3,875 3,138 8,000 287,467 1.255,000 2032 25,100 3.301 1,255,000 2032 220,000 4.00% 25,100 3,320 2,588 8,000 287,409 1.035,000 2033 20,700 2738 1,035,000 2033 235,000 4.00% 20,700 2,738 2000 8.000 291,876 800900 _ 2034 16,000 2,105 800,000 2034 250.000 410% 16,000 2116 1,375 8,000 295.596 550,000 2035 11,000 1,441 550.000 2035 550,000 4.00% 11,000 1,455 0 8,000 582,902 0 3,800,000 3.260.200 533,475 196,013 240.000 8,057.688 Sower: Red Proceeds 3 800.000 Uses: Ismnce tests 188,045 Capitalized Interest 282000 Reog-bvekpr Santis 3.323.955 3,8000 000 Exhibit II-A The Halo MetropoOten District#1 SeMdde et G aural Obligation Debt-Series 2008 — hr the Years Ended December 31.2008 to 2038 Teller of Credit Heearbelmg Rating& Annual falaou Ism &minl Cotoe0 Inlet= Era fate Truso-r fra4 Iala1 4,215.000 2008 4,215,000 2009 84,300 22,298 4,215,000 2009 4.00% 84.300 22,298 10,538 3.000 226,734 4,215.000 2010 84300 22,176 4,215,000 2010 4.00% 84.300 22.298 10.538 3,000 225,612 4,215,000 2011 84,300 22.176 4,215,000 — 2011 10,000 4.00% 84,300 22,298 10,513 3,000 236,587 4,205,000 2012 84,100 11,062 4,205,000 2012 30,000 4.00% 84,100 11,122 10,438 3,000 233,822 4,175,000 2013 83,500 11.043 4,175,000 2013 40.000 4.00% 83,500 11.043 10,338 3,000 242,424 4,135,000 2014 82,700 10,877 4,135,000 2014 40,000 4.00% 82,700 10,937 10,238 3,000 240,452 4.095,000 2015 81,900 10,772 4,095,000 2015 40,000 4.00% 81,900 10,831 10,138 3,000 238,541 4,055,000 2016 81,100 10,667 4,055,000 — 2016 45,000 4.00% 81,100 10,726 10.025 3.000 241,618 4,010,000 2017 80,200 10,607 4,010.000 2017 50,000 4.00% 80,200 10,607 9.900 3,000 244,514 3,960,000 2018 79.200 10,417 3,960,000 2018 55,000 4.00% 79.200 10,474 9,763 3,000 247,054 3,905,000 -- 2019 78.100 10,272 3,905,000 2019 90,000 4.00% 78,100 10,329 9.613 3.000 249,414 3,845,000 2020 76,900 10.115 3,845.000 2020 65,000 4.00% 76,900 10,170 9,450 3,000 251.535 3,780,000 2021 75,600 9.998 3,780.000 „-- 2021 75,000 4.00% 75,600 9,998 9,263 3.000 258.459 3,705.000 2022 74,100 9.746 3.705.000 2022 75.000 4.00% 74,100 9,800 9.075 3.000 254.821 3,630,000 2023 72,600 9.549 3.630.000 2023 85.000 4.00% 72.600 9.601 8,863 3,000 261.213 3,545,000 2024 70.900 9,325 3.545,000 2024 90.000 4.00% 70.900 9,377 8,6338 3,000 262,140 3,455.000 • 2025 69.100 9,139 3,455,000 2025 100.000 4.00% 69,100 9,139 8.388 3,000 267,866 3,355,000 2028 67,100 0.826 3.355,000 2026 100,000 4.00% 67,100 8.874 8,138 3.000 263.038 3,255,000 2027 65.100 8,563 3,255,000 2027 115,000 4.00% 65.100 8,610 7,850 3.000 273.223 3,140.000 2028 62,800 8.260 3.140,000 • 2028 120,000 4.00% 62,800 8,306 7.550 3,000 272,716 3,020,000 2029 60,400 7.988 3.020,000 — 2029 135,000 4.00% 60,400 7,908 7.213 3.000 201.989 2.885,000 2030 57,700 7,589 2.885.000 2030 140,000 4.00% 57,700 7.631 6,863 3.000 280,463 2.745.000 2031 54,900 7,221 2,745,000 2031 150,000 4.00% 54.900 7,261 5,488 3.000 283,770 2,595.000 2032 51,900 6.826 2.595,000 2032 155,000 4.00% 51,900 6,864 6.100 3,000 281,590 2,440,000 2033 48.800 6,454 2,440,000 2033 170,000 4.00% 48,800 6,454 5,675 3.000 289.183 2.270.000 2034 45,400 5,972 2.270,000 — 2034 175,000 400% 45,400 6,004 5.238 3.000 286.014 2.095.000 2035 41.900 5,511 2,095,000 2035 190,000 4.00% 41,900 5,541 4.703 3,000 292.615 1.905,000 2036 38.100 5.011 1,905,000 2036 490.000 4.00% 38.100 5.039 3,538 3.000 582,788 1,415,000 — 2037 28,300 3,743 1,415,000 2037 525,000 4.00% 28,300 3,743 2.225 3,000 594,311 890,000 2038 17,800 2,342 890.000 2038 890.000 4.00% 17,800 2,354 0 3,000 933.296 0 -- 4,215,000 3 966.200 590 262 237.350 90.000 9 098.811 Sources: Bond Proceeds 4.215,000 — Uses: Issuance seals 203,852 Rosen.fired 340,883 Repay developer advance 3,670,265 .— 4.215.000 Exhibit IIIA The Hills Metropolitan District#1 Analysis of Developer Owned Subordinate Debt - 8.00% Repayments Outstanding year Advance Interest Pr'nci al Interest Total Principal Interest - 0 0 2004 10,551,276 422,051 0 10,551,276 422,051 2005 0 877,866 3,087,777 1,299,917 4,387,694 7,463,499 0 2006 0 597,080 1,518,397 597,080 2,115,477 5,945,102 0 - 2007 0 475,608 0 0 0 5,945,102 475,608 2008 0 513,657 2,681,000 989,265 3,670,265 3,264,102 0 2009 0 261,128 1,536,257 261,128 1,797,385 1,727,845 0 2010 138,228 43,432 138,228 181,660 1,684,413 0 2011 134,753 6,086 134,753 140,839 1,678,326 0 2012 134,266 18,969 134,266 153,235 1,659,358 0 - 2013 132,749 9,279 132,749 142,027 1,650,079 0 2014 132,006 22,396 132,006 154,402 1,627,683 0 2015 130,215 19,142 130,215 149.357 1,608,541 0 - 2016 128,683 33,910 128,683 162,593 1,574,632 0 2017 125,971 27,122 125,971 153,093 1,547,509 0 2018 123,801 38,791 123,801 162,592 1,508,718 0 - 2019 120,697 33,718 120,697 154,415 1,475,001 0 2020 • 118,000 47,278 118,000 165,278 1,427,723 0 2021 114,218 44,002 114,218 158,219 1,383,721 0 2022 110,698 59,963 110,698 170,661 1,323,758 0 - 2023 105,901 53,941 105,901 159,842 1,269,817 0 2024 101,585 72,327 101,585 173,913 1,197,490 0 2025 95,799 68,663 95,799 164,463 1,128,826 0 2026 90,306 90,050 90,306 180,356 1,038,777 0 2027 83,102 84,276 83,102 167,379 954,500 0 2028 76,360 103,733 76,360 180,093 850,767 0 2029 68,061 100,926 68,061 168,988 749,841 0 2030 59,987 124,015 59,987 184,002 625,826 0 2031 50,066 124,848 50,066 174,914 500,979 0 2032 40,078 152,016 40,078 192,094 348,962 0 _ 2033 27,917 151,906 27,917 179,823 197,056 0 2034 15,764 197,056 15,764 212,821 0 0 2035 0 0 0 0 0 0 "- 2036 0 0 0 0 0 0 10,551,276 5,606,602 10,551,276 5,606,602 16,157,878 Advances repaid from Capital Project Fund 10,173,436 - Advances repaid from Debt Service Fund 5,984,442 16,157.878 Exhibit IV-A 1 1 I 1S, I 1 I I I I I 1 I 1 1 I I The Hills Metropolitan District II ' Forecasted Schedules of Absorption,Merited Values end A d helves For the Veers Ended December 31,2004 through 2013 Schedule of Ahsor tion j Property description Equivalent 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Single Family 55s 100.00% 79 102 76 44 301 Single Family 65s 100.00% 48 52 72 58 230 Single Family 45s 100.00% 148 45 45 238 Platted Lots 209 13 11021 1761 1441 0 Finished Lots 261 11961 110 1111) 1581 0 769 Schedule of Development Fees I Property description Fee 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total 2,000 0 550,000 398,000 386,000 204,000 0 0 0 0 0 1,538,000 0 550,000 398000 386,000 204,000 0 0 0 0 0 1,538,000 Schedule of Market Values 11 Property description Market Value 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Single Family 55s 250,000 0 20,547,900 27,060,804 20,566,211 12,144,889 0 0 0 0 0 80,319,804 Single Family 65s 275,000 0 13,733,280 15,175,274 21,432,157 17,610,089 0 0 0 0 0 67,950,800 Single Family 45s 150,000 . 0 23,096,880 7,163,154 7,306,417 0 0 0 0 0 0 37,566,451 Platted Lots 12,500 2,612,500 162,500 11,275,0001 1950,0001 1550,0001 0 - 0 Finished Lots 25,000 6,525,000 14,900,000) 2,750,000 12,925,0001 11,450,0001 0 0 0 0 0 Totals 9,137,500 52,640,560 50,874,232 45,429,785 27,754,978 0 0 0 0 0 185,837,055 Schedule of A d Valuation Market Ratio 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Residential 7.96% 0 4,567,294 3,932,179 3,924,661 2,368,496 0 0 0 0 0 14,792,630 Platted&Finished Lots 29% 2,649,875 11,373,8751 427,750 11,123,7501 1580,0001 0 0 0 0 0 0 Totals 2,649,875 3,193,419 4,359,929 2,800,911 1,788,496 0 0 0 0 0 14,792,630 Cumulative _ 2.649,875 5843294 _ 10 203 222 13004,133 14792,630 14792,630 14,792630 1.792630 14,792,630 14,79 630 Collection Yr 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Exhibit V-A ALTERNATIVE B Fixed Rate Financing 1 ( h I I P I I I ) 1 1 1 1 1 }. 1 • • The Hills Metropolitan District#1 Forecasted Sources and Uses of Cash For the Years Ended December 31,2004 through 2042 118116 2,444 2005 2006 2041 21100 2444 2014 2411 2012 21)1i General Fund Beginning cosh available 0 0 0 0 10) 10) 0 (0) 0 10) 0 Revenues Property taxes 1,327,088 0 0 9,275 20,452 36,120 45,923 53,102 53,102 54,164 54,184 Specific ownership taxes 132,709 0 0 927 2,045 3,612 4,592 5,310 5,310 5,416 5,416 Developer advances 101,740 33,000 33,330 23,600 11,810 1,581,534 33,000 33,330 33,802 34,307 39,732 50,516 58,412 58,412 59,580 59,580 Expenditures County treasurer fees 19,906 0 0 139 307 542 889 797 797 812 812 Repay developer advances 176,793 0 4,850 15,144 22,585 22,235 23,033 22,678 Operating expenses 1,328,504 33,000 33,330 33,683 34,000 34,340 34,683 35,030 35,380 35,734 36,092 1,525,203 33,000 ' 33,330 33,802 34,307 39,732 50,518 58,412 58,412 59,580 59,580 Ending cash available 38,331 0 0 301 (0) 0 0) 0 (01 0 0 Mill levy 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 3.500 • Capitol Pro eats Fund Beginning cosh available 0 0 0 0 0 0 0 0 0 0 0 Revenues Bond proceeds 8,350,000 3.250,000 5,100,000 Reimbursement from other Districts 9,519,650 3,173,211 6,346,433 Developer advances 8,757,112 8,157,112 Developer contribution 8,051,232 8,051,232 . interest Income 0 0 32,877,994 14,808,344 6,423,217 8,346,433 0 5,100,000 0 0 0 0 0 Expenditures Issuance costs 334,000 130,000 0 204,000 0 Transfer to Debt Service Fund 187,129 187,129 Repay developer advances 11,002,087 3,990,810 2,115,477 4,896,000 District improvements 21,154,776 14,608,344 2,115,478 4,230,958 32,677,994 14,808,344 6,423,217 8,346,433 0 5,100,000 0 0 0 0 0 Ending cash available 0 0 0 0 0 0 0 0 0 0 0 Exhibit 1.B 1 I I I I I 1 1 1 I I I I I I I 1 I The Bills Metropolitan District 11 Forecasted Seeress end Usas of Cash For the Years Ended December 31,2004 through 2042 lath 2464 2465 2449 2442 2496 2099 20)0 2411 21112 2013 I Debt Service Fund Beginning cash available 0 0 0 737,129 1,023,326 1,431,211 1,793,755 1,716,908 1,770,352 1,753,507 1,748,492 Revenues Property taxes 19,588,227 0 96,720 2)3,280 376,883 478,918 553,775 553,775 584,850 564,850 Specific ownership taxes 1,958,823 0 9.672 21,328 37,868 47,892 55,377 55,377 56,465 58,485 Development fees 1,538,000 550.000 398,000 388,000 204,000 0 0 ' 0 0 0 Transfer from Capital Project Fund 187,129 187,129 0 ' 0 Interest income 1,087,851 0 10,755 17,977 27,342 29,529 30,448 30,159 30,072 29,901 24,359,830 737,129 515,147 638,585 645,694 556,337 839,801 639,311 851,408 651,237 Expenditures Debt service-GO Debt Series 2005 8,233,300 0 227,500 227,500 277,500 254,000 221,900 251,900 249,800 257,700 Debt service-GO Debt Series 2008 13,405,150 372,000 355,950 395,950 398,150 395,000 County treasurer fees 293,823 0 0 1,451 3,199 5,650 7,184 8,307 8,307 8,473 8,473 21,032,273 0 0 228,951 230,699 283,150 633,184 586,157 658,157 656,423 661,173 Ending cash available 2427,557 0 731,129 1,023 326 1,431 211 1 7, 93 755 1716,908 1,770,352 1 753 507 1.748,492 1.7388 556 Mill levy 38.500 30.500 36.500 38.500 36.500 38.500 36.500 36.500 36.500 38.500 Total Mill Levy 40.000 40.000 40.000 40.000 40.000 40.000 40.1300 40.000 40.000 40.000 Assessed valuation 1000's) Beginning 0 0 0 0 2,650 5,843 10,320 13,121 15,172 15,172 15,475 New construction 14,793 0 2,650 3,193 4,380 2,801 1,788 0 0 0 Inflation 11.0%per annum) 6,035 117 262 303 Ending 20828 0 0 2650 5843 10320 13121 15172 15172 15475 15475 Exhibit 1.8 I I I ) 1 I ) I I I ) 1 I 1 I 1 1 ) I The Hills Metropolitan District#1 , Forecasted Sources and Uses of Cash For the Years Ended December 31.2004 through 2042 2014 2015 101fl 1411 2011 21111 2020 2021 2022 2422 2024 2020 General Fund Beginning cash available D (01 101 4,303 19,154 34,876 49,820 65,849 81,092 78,696 75,905 73,457 Revenues Property taxes 55,247 55,247 68,352 48,302 49,268 49,288 50,253 50,253 34,172 34,172 34,866 34,858 Specific ownership texas 5,525 5,525 5,635 4,830 4,927 4,927 6,025 5,025 3,417 3,417 3,486 3,486 Developer advances 60,772 60,772 81,987 53,132 54,184 54,194 55,278 55,278 37,689 37,589 38,341 38,341 Expenditures County treasurer foes 829 829 845 725 739 739 754 754 513 513 523 523 Repay developer advances 23,491 23,126 19,653 Operating expenses 38,453 38,817 37,185 37,557 37,933 38,312 38,695 39,082 39,473 39,868 40,266 40,869 60,772 60,772 57,664 38,282 38,672 39,061 39,449 39,836 39,985 40,380 40,789 41,192 Ending cash available _ (Oj JO) _ 4,303 _ 19.154__ 34,876 _ _49,820 85,649 8O92_ 78,896 75.905 73,457 70,606 Mill levy 3.500 3.500 3.5J1Q 3.000 3.000 3.000 3.000 3.000 1.000 2.000 2.000 2.000 Capital Projects Fund Beginning cash available 0 0 0 0 0 0 0 0 0 0 0 0 Revenues Bond proceeds Reimbursement from other Districts Developer advances Developer contribution Interest Income 0 0 0 0 0 0 0 0 0 0 0 0 Expenditures Issuance costs Transfer to Debt Service Fund Repay developer advances District improvements 0 0 0 0 0 0 0 0 0 0 0 0 Ending cash amiable 0 0 0 0 . 0 0 0 0 0 0 0 0 Exhibit F8 I I 1 1 I 1 1 1 I I ) 1 1 I 1 I I ) I The HON Metropollten District/1 ` Forecasted Sources and Uses of Cosh _For the Years Ended December 31,2004 avouch I042 2414 1415 MI6 20.11 2411 2912 2424 2021 2422 2023. 2024 2Q23 Debt Service Fend Beginning cash eveileble 1,738.556 1,741,885 1,741,507 1,771,141 1,187,354 1,818,574 1,840,198 1,873,859 1,892,999 1,927,907 1,945,722 1,982,400 Revenues Property taxes 578,147 516,147 587,870 587,670 599,424 599,424 811,412 611,412 623,840 823,840 838,113 638,113 Specific ownership taxes 57,815 57,815 58,767 58,767 59,942 59,942 61,141 61,141 82,364 62,364 83,811 83.011 Development fees Transfer from Cepital Project Fund Interest income 29,959 29,952 30,462 30,741 31,295 31,650 32,229 32,558 33,158 33,464 34,095 34,482 663,721 663,714 676,899 877,178 690,661 691,016 704,782 705,111 719,163 719,469 733,820 734,206 Expenditures Debt service•00 Debt Series 2005 254,900 262,100 258,600 285,100 265,900 271,350 271,100 275,500 278,200 262,200 279,500 288,450 Debt service•GO Debt Series 2008 396,850 393,350 379,850 387,050 383,550 390,050 390,850 401,300 385,700 410,100 408,100 415,750 County treasurer fees 8,642 8,642 8,815 8,815 8,991 8,991 9,171 9,171 9,355 9,355 9,542 9,542 660,392 664,092 647,265 680,985 856,441 870,391 671,121 885,971 884,255 701,655 697,142 711,742 Ending cash available 1 741885 1 741 507 1 771 141 1 787 354 1 819 574 1 840198 1 873 859 1 892 999 1 927 907 T 945 722 1 982 400 2 004 864 Mill levy 36.500 36.500 __38.500 36.500 38.5Q0 36.500 35.500 36.500 _ _36.500 36.500 36.500 36,500 Tots)Mill Levy 40.000 40.000 40.000 39.500 39.500 39.500 39.500 39.500 38.50Q_ _ _38.500 38.500 38.500 Assessed valuation 1000's) Beginning 15,475 15,785 15,785 16,101 ' 18,101 16,423 16,423 16,751 16,751 17,086 17,086 17,428 New construction 0 0 Inflation 11.0%per annum) 310 316 322 328 335 342 Ending 15,785 15,765 16,101 _ 16,101 .18 423 18,423 18,751 _ 16,751 17,086 17,086 17,428 17,428 • Exhibit 1•B I 1 I 1 I I 1 1 1 I ) I I I I 1 1 1 I The Hills Metropolitan District/1 Forecasted Sources and Uses of Cash For the Tsars Ended December 31,2004 through 2042 242fl 2!122 242fl 242;1 2434 2031 2432 2433 2934 2435 2036 2432 General Fund Beginning cast available _ 70,606 68,105 65,193 62,638 59,684 57,054 54,016 51,349 48,246 45,521 42,352 39,568 Revenues Property texts 35,553 35,553 36,264 36,264 36,989 36,989 37,729 37,729 38,483 38,463 39,253 39,253 Specific ownership taxes 3,555 3,555 3,626 3,628 3,699 3,699 3,773 3,773 3,848 3,848 3,925 3,925 Developer advances _ 39,108 39,108 39,890 39,890 48,888 40,688 41,502 41,502 42.332 42,332 43,178 43,178 Expenditures County treasurer fees 533 533 544 544 555 555 588 566 577 577 589 589 Repay developer advances Operating expenses 41,076 41,488 41,901 42,320 42,743 43,171 43,803 44,039 44,479 44,924 45,373 45,827 41,609 42,020 42,445 42,864 43,298 43,726 44,169 44,605 45,056 45,501 45,962 46,416 Ending cash available 66105 65 193 62 638 59 664 57 054 54 016 51 349 48 246 45 521 42 352 39 568 36 331 Mill levy 2.000 2.000 2.000 2.000 2.000 2.000 2.000 2.000 2.000 2.000 2.000 2.000 Capital Pro'ects Fund Beginning cash available 0 0 0 0 0 0 0 0 0 0 0 0 Revenues Bond proceeds Reimbursement from other Districts Developer advances Developer contribution Interest Income 0 0 0 0 0 0 0 0 0 0 0 0 Expenditures Issuance costs Transfer to Debt Service Fund Repay developer advances District improvements 0 0 0 0 0 o a o 0 0 a 0 Ending cash available 0 0 0 0 0 fl 0 0 0 0 0 0 Exhibit 1.8 1 1 I I 1 I 1 I 1 1 1 I I I I 1 I 1 1 The Hills Metropolitan District#1 Forecasted Sources end Uses of Cash For the Years Ended December 31,2004 through 2042 2020 2022 2020 2029 2030 2031 2032 2033 2034 2035 2039 2031 Debt Service Fund Beginning cash available 2,004,864 2,039,224 2,062,890 2,102,314 2,124,520 2,161,931 2,186,718 2,226,589 2,248,691 2,288,738 2,313,038 2,356,627 Revenues I Property taxes 648,636 648,836 661,812 661,812 675,049 675,049 688,549 688,549 702,320 702,320 716,367 716,367 Specific ownership taxes 64,884 64,884 66,181 66,181 87,505 67,505 68,855 68,855 70,232 70,232 71,637 71,637 Development fees Transfer from Capital Project Fund Interest income 35,073 35,480 36,158. 36,540 37,103 37,609 38,295 38,675 39,330 39,782 40,532 41,016 748,792 749,199 784,151 784,533 779,738 780,163 795,700 796,080 811,882 812,335 820.535 829,020 Expenditures Debt service-GO Debt Series 2005 287,350 292,550 291,700 300,150 297,200 303,550 303,500 312,400 309,550 315,650 Debt service-GO Debt Series 2008 417,350 423,250 423,100 432,250 435,000 441,700 442,000 451,250 453.750 459,850 774,200 790,100 County treasurer fees 9,733 9,733 9,927 9,927 10,126 10,126 10,328 10,328 10,535 10,535 10,746 10,746 714,433 725,533 724,727 742,327 742,320 755,376 755,828 773,978 773,835 786,035 784,946 800,846 Ending cash available , 2039224 2 062 890 2,102314 2,124 520 2,161,931 2,106,718 2,226,509 2,248691 2,28,6,738 2,311,038 2,356,627 2,31A602 Mill levy 36.500 36.500 38.500 38.500 36.500 36.500 38.500 36.500 36.500 36.500 36.500 36.500 Total Mill Levy 38.500 30.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 38.500 Assessed valuation 1000'sf Beginning 17,428 17,776 17,776 18,132 18,132 18,494 10,494 18,884 18,864 19,242 19,242 19,626 New construction 0 0 0 0 0 0 0 0 0 Inflation 11.0%per annum' 349 356 363 370 377 385 Ending 17776 17176 IB 132 18132 18494 18494 10864 18864 1924.2 10242 19,626 19626 Exhibit I-B t I 1 I 1 I 1 1 1 1 1 1 1 ) 1 1 1 ) I The Hills Metropolitan District Al Forecasted Sources and Uses of Cash For the Years Ended December 31,2004 through 2042 Ea8 2409 2940 2941 2942 1 GenereiFund Beginning cash available 36,331 36,331 36,33! 36,331 36,331 Revenues Property taxes 0 0 0 0 0 Specific ownership taxes 0 0 0 0 0 Developer advances 0 0 0 0 0 Expenditures County treasurer fees 0 0 0 0 0 Repay developer advances Operating expenses 0 0 0 0 0 Ending cash available 36,331 36,331 36,331 36.331 30,331 Mill levy 0.000 0.000 0.000_ 0.000 _ 0.000 I. Capital Projects Fund Beginning cash available 0 0 0 0 0 ' Revenues Bond proceeds Reimbursement from other Districts Developer advances Developer contribution Interest Income 0 0 0 0 0 Expenditures Issuance costs Transfer to Debt Service Fund Repay developer advances District improvements 0 0 0 0 0 Ending cash available D 0 0 0 0 Exhibit Ili • The Hills Metropollten District d1 Forecasted Ssursea end Uses of Cash For the Years Ended December 31,2004 through 2092 2038 2039 2f40 21141 2042 Debt Service Fund Beginning cash available 2384802 2,427,557 2,427,557 2,427,557 2,427,557 • Revenues Property taxes 730,694 0 0 0 Specific ownership taxes 73,069 0 0 • 0 Development fees Transfer from Capital Project Fund Interest income 41,752 845,515 0 0 0 0 Expenditures Debt service.GO Debt Series 2005 Debt service-GO Debt Series 2008 791,800 County treasurer fees 10,960 802,760 0 0 0 0 Ending cash available 2,427 557 2,427,557 3427,557 2,427 557 2427,557 Mill levy 36.500 Total Mill levy 38.500 0.000 0.000 0.000 0.000 Assessed valuation 1000's) Beginning 19,826 20,019 20,019 20,419 20,419 New construction 0 0 0 0 0 Inflationll.0%per annum) 393 400 409 Ending _ 20019 20,019 20,419 M,419 20,928 Exhibit hB The Hills Metropolitan District 11 Schedule of General Obligation Debt•Series 2005 For the Years Ended December 31,2005 to 2035 Annual 64190C) 0ea[ 0ralciD01 LIEJIun MOW I 10181 3.250,000 2005 0 3,250,000 2006 113,750 3,250,000 2006 7.00% 113,750 227,500 3.250,000 2001 113,750 3.250,000 2007 7.00% 113,750 227,500 3,250,000 2008 113,750 3,250,000 2008 50,000 7.00% 113,750 277,500 3,200,000 2009 112,000 3.200,000 2009 30,000 7.00% 112,000 154,000 3,170,000 2010 110,950 3.170,000 2010 0 7.00% 110,950 221,900 3,170,000 - 2011 110,950 3,170,000 2011 30.000 7.00% 110,850 251,900 3,140,000 20 t2 109,900 3,140,000 2012 30,009 7.00% 109,900 249,800 3,110,000 2013 108.850 3,110,000 - 2013 40.000 7.00% 108,850 257,700 3,070,000 2014 107,450 3,070,000 2014 40,000 7.00% 107,450 254,900 3,030,000 . 2015 106,050 3,030,000 7015 50,000 7.00% 108,050 262,100 2,980,000 2016 104,300 2,980.000 2016 50.000 7.00% 104,300 258.600 2,930,1010 7017 102550 2,830,000 2017 60,000 7.00% 102,550 265,100 2,870,000 2018 100,450 2,870,000 2018 65,000 7.00% 100.450 265,900 2,805,000 2019 98,175 2,805,000 2019 75,000 7.00% 98,175 271,350 2.730,000 2020 95,550 2,730,000 2020 80,000 7.00% 95,550 271,100 2,650,000 • 2021 92.750 2,650,000 2021 90,000 7.00% 91750 275,500 2,560.000 2022 89,600 2.560,000 2022 100.000 7.00% 89,600 279,200 2,460,000 2023 86,100 2,460,000 -- 2023 110,000 7.00% 86,100 282,200 2,350,000 2024 82,250 2,350,000 2024 115,000 7.00% 82,250 278,500 2,235,000 2025 78,225 2,235,000 2025 130,000 7.00% 78,225 286,450 2,105,000 -- 2026 73,675 2105,000 2026 140,000 7.00% 73,675 287,350 1,965,000 2027 88,775 1,965,000 2027 155,000 7.0(1% 68,775 292.550 1,810,000 2028 63250 1,810,000 2028 165,000 7.00% 63,350 291,700 1,8454100 2029 57.575 1,645,090 2029 185,000 7.00% 57,575 300,150 1,460,000 2030 51,100 1.480.000 20311 195,000 7.00% 51,100 297,200 1,265,000 2031 44,275 1,265,800 2031 215,000 7.00% 44,275 303,550 1,050,000 2032 36,750 1,050,000 2031 230,000 7.00% 36,750 303,500 820,000 2033 28,700 820,000 2033 255,000 7.00% 28,700 312,490 565000 _ 2034 19,775 565,000 2034 270,000 7.00% 19.775 309,550 295,000 2035 10,325 295000 2035 295.000 7.00% 10,325 315,650 0 - 3,250,000 4,983,300 8,233,300 Sources: Bad Proceeds 3,250,000 Uses: issuance costs 130,000 Capitalized Interest 187,129 Ropey developer advances 2932,871 3,250,000 Erhdit 98 The Hills Metropolitan District 01 — WSW,of Searal Oh89a8en Debt-Series 2908 Per the Years Elided December 31,2095 to 2038 hewal Hahne Yak J§mnaai Lamm kettil ISIS 5,100,000 - 2008 5,100,000 2O9 78,500 5,100.000 2009 15,000 7.00% 78,500 372,000 5,085,000 2010 77,975 5,085,000 2010 7.00% 77,975 355,950 5,085,00 ..- 2011 77,975 5,085,00 2011 40,00 790% 77,875 395,950 5,045,000 2012 . 78,575 5,045,000 2012 45,000 7.00% 78,575 398.150 5.00,000 2013 75,000 5.000,000 - 2913 45,000 7.00% 75,00 395,000 4,955,000 2014 73,425 4,955,000 2014 50,000 7.00% 73,425 396.850 4,905,000 2015 71,675 4,905.000 2015 50,000 7.0% 71,675 393,350 4.855,000 - 2016 69,925 4.855,000 2016 40.000 7.00% 0.925 379.850 4,815,000 2017 88,525 4.815,000 2017 50,000 7.00% 88,525 387,050 4,765.000 2018 66,775 4,765,000 2018 50.000 7.00% 66,775 383.550 4,715,000 2019 0.025 4,715,000 2019 80,000 7.00% 85,025 390,050 4,655,000 2020 82,925 4,655,000 2081 85,00 7.00% 62,975 390,850 4,590,000 2021 0,60 4,590,000 2021 80.00 7.00% 80,650 401,30 4,510,000 2022 57,850 4,510,00 2022 80,000 7.00% 57,850 395,70 4.430,000 2023 55,050 4,430900 -- 2023 100,000 790% 55.050 410.100 42.30,000 2024 . 51,550 4330900 2024 105,000 7.00% 51,550 408,10 4,225.000 2025 47,875 4.225,000 2025 120,000 7.00% 47,875 415,750 4,105,000 2028 43,875 4.105,000 8128 130,000 7.00% 43975 417250 3,975,000 2027 - 39,15 3,975,00 2027 145.000 7.00% 3.9,15 423.250 3,830,00 2028 34,050 3,830,000 2028 155,000 7.00% 34,050 423,100 3,675,000 2028 2895 3,675.000 2029 175,000 7.00% 595 432,250 3,500,000 2030 22,900 3,500,000 2030 190,000 7.0% 22,50 435.00 3,310.000 - 2031 15,850 3,310,000 2031 210,000 7.00% 1590 441,700 3,100.000 2032 08,500 3,100,000 2032 225,000 7.00% 08,590 442,000 2875,000 2033 00,625 2,875,000 ^, 2033 250,000 7.00% 0,85 451,250 2,825,00 2034 91,875 2625,00 2034 270,000 7.00% 81,875 453.750 2,355,000 2035 8245 2,355,000 2035 235,000 7.00% 82,43 459,850 20609O ,_ 2036 72,10 20090 2036 630,000 7.00% 72,100 774,200 1,430,000 2037 50,050 1,430,000 2037 600,000 7.00% 50,050 790,100 740.000 2038 5.30 740,000 2038 740,000 7.00% 5,90 791,800 0 - 50000 8,305,150 1340 .5150 • Saunas: Bond Proceeds iS 0.00 Uses: baoerce costs 204,000 Beery developer advances 4,898,00 5.10,00 Exhibit 111.8 The Hills Metropolitan District#1 Analysis of Developer Owned Subordinate Debt 8.00% Repayments Outstanding Year Advance Interest Principal Interest Dial Principal In Brest — 0 0 2004 8,757,112 350,284 0 8,757,112 350,284 2005 0 728,592 2,911,734 1,078,876 3,990,610 5,845,378 0 - 2006 0 467,630 1,647,847 467,630 2,115,477 4,197,531 0 2007 0 335,802 0 0 0 4,197,531 335,802 2008 0 362,667 4,197,531 698,469 4,896,000 0 0 - 2009 0 0 0 0 . 0 0 0 2010 0 0 0 0 0 0 2011 0 0 0 0 0 0 - 2012 0 0 0 0 0 0 2013 0 0 0 0 0 0 2014 0 0 0 0 0 0 2015 0 0 0 0 0 0 - 2016 0 0 0 0 0 0 2017 0 0 0 0 0 0 2018 0 0 0 0 0 0 2019 0 0 0 0 0 0 . 2020 0 0 0 0 0 0 2021 0 0 0 0 0 0 - 2022 0 0 0 0 0 0 2023 0 0 0 0 0 0 8,757,112 2,244,975 8,757,112 2,244,975 11,002,087 Exhibit IV-B I I I I I I I I I 1 1 1 I I I I I 1 1 The Hills Metropolitan District It . Forecasted Schedules of Absorption,Market Values and Assessed Values For the Years Ended December 31,2004 through 2013 Schedule of Absorption Property description Equivalent 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Single Family 55s 100.00% 79 102 76 44 301 ' Single Family 65s 100.00% 48 52 72 58 230 Single Family 45s 100.00% 148 45 45 Y38 Platted Lots 209 13 11021 (76) (44) 0 Finished Lots 281 11961 110 (117) (58) 0 0 789 Schedule of Development Fees • Property description Fe/ 2004 2005 2006 2007 2008 2008 2010, 2011 2012 2013 Total • 2,000 0 550,000 398,000 386,0(10 204,008 0 0 0 0 0 1,538,000 0 550,000 398,000 386,000 204,000 0 0 0 0 0 L538,000 Schedule of Market Values I Property description Market Value 2004 2005 2008 2007 2008 2009 2010 2011 2012 2013 Total Single Family 55s 250,000 0 20,547,900 27,060,804 20,566,211 12,144,889 0 0 0 0 0 80,319,804 Single Family 65s 275,000 0 13,733,280 15,175,274 21,432,157 17,610,089 0 0 0 0 0 67,950,800 Single Family 45s 150,000 0 23,096,880 7,163,154 7,308,417 0 0 0 0 0 0 37,566,451 Platted Lots 12,500 2,612,500 162,500 11,275,0001 (950,000) (550,0001 0 0 finished Lots 25,000 8,525,000 14,900,000) 2,750,000 {2,925,000) (1,450,000) 0 0 0 0 0 Totals 9,137,500 52,640,560 50,874 232 45,429,785 27,754 978 0 0 0 0 0 185 837 055 Schedule of Assessed Valuation r Market Ratio 2004 2005 2006 2007 2006 2009 2010 2011 2012 2013 Total I Residential 7.96% 0 4,567,294 3,932,179 3,924,661 2,368,496 0 0 0 0 0 14,792,630 Platted&Finished Lots 29% 2,649,875 (1,373,875) 427,750 11,123,750) 1580,000) 0 0 0 0 0 0 Totals 2,649,875 3,193,419 4,359,929 2,800,911 1,788,496 0 0 0 0 __ 0 14,792,830 Cumulative 2,649,875 5,843,294 10:203,222 13,004,133 14,782,630 14,792,630 14,792,630 14,792,630 14,792,630 14,792,630 Collection Yr 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Exhibit 1/.8 t fl,:.. �S •� terra is anc market research Mania landscape amhiectne gat feasibility I valuation June 30,2004 Mr.aint Blum BGZ Development, LLC 4401 W.Mineral Ave. Littleton,Colorado 80128 Dear Mr.Blum: THK has been requested to provide an updated review of absorption schedules for your service plan for the Hill Metropolitan Districts No. 1, No. 2, and No. 3 for the Saddleback Hills Lake and Conservancy property in Firestone,Colorado. District No.1 is proposed to contain 772 single-family detached units, District No. 2 will ammmodate 420 single-family units and 228 townhome/condominlum units, and - District No.3 is planned for 32.3-acres,492,446 square feet,of retail/commerdal development to support the community. District 4 which will contain 388 single-family units is no longer part of the service plan. In total, 1,420 residential units are proposed for the Hill Metropolitan District. The 761.5-acre total area site (including District 4)lies adjacent and directly east of the new Saddleback Golf Club. The major proposed roadway in the vehicular drculation framework is: • Major arterial, stretching between Saddleback Golf Club and Saddleback Hills Lake and • Conservancy. • Additionally,a 12-mile hlldng/biking ball system is under construction and the Saddleback Hills Lake and Conservancy will provide an additional five miles to this trail system. The area surrounding the subject site Is very active with residential development especially in the communities of Dacono, Erie, and Frederick. Stimulated by the 125 and recently completed E- 470/Northwest Parkway access,the significant commercial development of Preble Creek, community amenities such as the Saddleback Golf Club, and the St. Vrain River, the area is very attractive to homebuyers of all price ranges. The Saddleback Hills Lake and Conservancy property, Hill Metropolitan District only, is currently being planned for up to 1,420 residential units, induding 1,192 single-family detached units and 228 townhome/condominium units. For the purposes of this estimate,we have assumed that there will be 1,420 units actually built on the property. In order to confirm your prldng and absorption projections,THK surveyed several residential subdivisions that are active in the immediate area of the Saddleback Hills Lake and Conservancy property. The subdivisions reviewed for single-family detached product were: Booth Farms, College, County Fields, County Meadows,Countryside,Elms at Meadowville,Ute Creek, Fox Meadow,Golden Bear,Grandview, Idaho Creek,Meadowvale,Mill Village, Monarch Estates, Mountain Shadows, Northridge,Oak Meadows, J Pleasant Valley,Quail Crossing,Quail Ridge,Rinn Valley Ranch,Sagebrush,Savanah,Sharpe Farms, Ute Creek,St Vrain Ranch, Summit view Estates,Sundall, and Vista Ridge. The key findings are as follows (detailed in the appendix of this letter): Mr.Clint Blum June 30,2004 Page Two SINGLE FAMILY Average Project Size = 131 units Typical Lot Size = 7,974 sq. ft. Price Range = $143,995 to$639,760 Average Price Range = $266,588-$334,024 Average Home Size Range = 1,762 sq.ft. to 2,715 sq.ft. Monthly Sales Pace Range = 1.17 units(Northridge)to 45.32 units(Vista Ridge) • Average Monthly Sales Pace = 6.64 units _ ATTACHED(Townhome/Condo) Average Project Size = 69 units Typical Lot Size = 2,688 sq.ft. Price Range = $137,900 to$235,000 Average Price Range = $164,449-$193,087 • Average Home Size Range = 1,218 sq.ft.to 1,556 sq.ft. Monthly Sales Pace Range = 0.43(Min Village)to 8.39 units(Vista Ridge) Average Monthly Sales Pace = 3.13 units With this amount of residential activity,the commercial uses will be supportable as the community reaches maturity. We would suggest that the 32.3-acre,492,446 square foot retail/commercial center is need to support the residential portion of the community. It has been reported that a portion of District 1 lots are under contract to builders. Based on the activity at other projects and the reported contacts for District 1 and 2,THK would suggest that the reported absorption rates for Districts 1,2,and 3 are reasonable. Estimated absorption of the 1,420-unit Saddleback Hills Lake and Conservancy community(Districts 1,2 and 3)is as follows: Product 2004 2005 2006 2007 2008 TOTAL Single-Family 0 275 274 325 318 1,192 Townhome/Condo — 75 100 53 0 228 Total 0 350 374 378 318 1,420 If you have any questions or require further assistance, please do not hesitate to contact us. Sincerely, — ''sa` E.Peter Elzi,Jr. Principal I l: .,, I ' nssnria4As, inr. APPENDIX • r. Single-Family Detached Projects In the Saddleback Hole Lake Environs garage / Nand AMaoai Oa Iouipn Rwefom/ I allots I of Lets Sten Monthly Sante BUMhr New CpmM9e4Y J9naW Sold WK ja(nitit Price Rance ]wipe Range 19wm fame-Firestone I— 1 Santee/Costal WSJ Ct21 S Weal CAD TrtlWmtl 55 55 1/1/1301 1.49 F219A90- 1217,190 1.50 ;ID egad elan 2 Swtl1e/Netoe6 Mwlan Traditional ]0 65 1/11/1004 1.65 619;995- $191.995 1.293- ;R9 Beta MOa&Web at 13 MfbMM Ameba Flom — 3 Saaldee/NOIR Deepen 27 17 1/21/901 0,69 9255,995- $293.995 917- 1.265 Roth One 6 Weld 13013 —American Haws 1 Sonridoet Weld IXN65tale MUIndiana, 50 50 1/1/2601 1,39 1218,990- 12]2990 1.000- ;526 RIGS Mom 90010 FARMS/SYNIIOIR OVERALL MONTHLY SALES I Sill toss l[wMn Se.ieel-Erb $ 51Wa1/15/3196 521 ;® IannOnAe•A 119th e1 TMYbmI 519 Sll $154009 $326.101 I.W Dime Pnarwlo — COUNTRY FIELDS OVwu1 M0NINLY SALES I 9.24 ICualry Madan(Meadow Sales)-Erie • 6 Tynan Hie 6119th Dna Maims(Neldore Seas) Traditional137 3]0 9/w1998 4.811 $2012W 1247,973 960 1.110 — limo Cnnnnbs COOTRRY 9NAOOWS OVERALL MORTNLY SALES ' 1I _ ':'.1 ILwJ@rnme-Prpasth 7 13&CmbyIN 16 ADNeialIE ITadXOml 151 103 1/,99102 3.70 $316,W0- $36].390 1}93- 1.1X .,I Gnu Hennes 6 CCM a 6IFIde/Oaten Tradition' 151 5I 5/1/2602 2.13 $199.190- $20.390 I.3)6- 1.733 by Rd 13 It y Rd IA --is COUNTRYSIDE OVERALL MONINLY SALE I aeq lam riowmnn I 9 ens at9 5 I Ttl9Wol IN 144 12/1071999 26 021;990- $310.990 1.235- 3296 ,M M'bO limp OMSAT0MAO0WVALE OVERALL MONTHLY SALES I 2.561 193 Mwdw-Lw9m,nt I 16 Fm Meadow Prairie $0 try/251 1.19 ;n9 _ 9O Ara.R Penned Drive TrWMI IY $]6],950- 5311.950 .;M- 5He loop II FmMeadtn/Synod]Flak Roos Traditional 25 3 3/1/7603 023 $199,950 $525,959 ;731 3.143 RN Ian.66eanmd Din DIOR-a 11 Fm Meadow Wpyaa Tm9bpl 88 86 5/1131301 2.41 $%4900 $33453 4693 2279 Iw-anC_a.1-;oissont- I 15 Idaho Oak 1/5/901 5-49 WgNo/1191 Spann Peed Traditional 351 lse 1 2113.995 $0]4995 951 ;521 ®Roue I MIO C890N OVERALL MONTHLY SALES _ ItlYOthmmb-DimmedI S�Sy1 1651 I TradiMO 14 7 1/1/232 4ss $311,900- fw193 2.531- 1.2E Genesee /2 17 NNdmrvaw/M Elm 'Rattan 61 30 41/263 1.36 $375,900- 5132,930 2.534- 3.730 — Day 119',Weld CAS I/2 Doman Cowin' MF.IOOWVNE OVEPALL MONTHLY SALES 1 1.811 ItlpAM Esisk.M.eam.. I .. ]0 WmrII States/902sw,/903 om �mIl a CnpT RR 29 TradEbaal 111 0 3%0.93- 1319,900 ;631- 1.1E o — 19 Monarch Ems *I.*U.ry TnNYN IS Il 9/12002 055 $233,950- 1353.950 1165- 2191 County PE.x O Cont)14.24 U.S.Hone 30 bawd,E[Na16amody31 Tra16 oIl 59 14 911/2032 0.M 12Q993- 4297,950 1,572- 3,x73 Canty 41.26 Calmly Rd.US Home M00MO16MTES WVEN a Mafia?31516 I 124 Itbaugm ruin.F.n I 21 MWabI 9,.d o Traditional 259 20 93)2003 1361 1215,100- 3266.94 1,752- 3,130 Ipmm 2I4 Cooly RE 13 Menmm lbws MOUNTAIN SHADOWS 010021 MONTHLY SALES 1 97979E ITEM 22 tt, 419eCA R9MMMmp Trs99teal 65 65 1/15/1999 1.17 33K950- 1174,270 1$p- 2.996 SASS- -- NORINI000l OVEMIL MONTHLY Gals I 1.14 1011MneJer.Kealonn I 23 Oak Meadows TN1Yol II II 41/1000 2.51 4174995- 5704995 Lai- 2,669 M Mfaem1f1,E 60113 9bmotl Mmla Hems — x4061 Mp6wn II T,adled M 13 W15)202 3.60 100,10- 1224195 1.145- 3.91 OY Merlons bea ass 9lSoa1 Nmbe eel 25 1341tHeadews/P•AsIde TMNW1a 11 11 2/1/20@ 3171 6221053E- $241,60 1345- 2,190 Casty 9E 136Comb Rd 24 NK5a Hama .--n 7016 PIMOOWSOVENNLMONT1lraAln I es • IN....m V,a.rr 6316nn. .,nN I htlEMl 219 319 2/1/2000 5.76 1190.950 5217,950 Wl 26 Pleven,Valley SlyestI 1tlN1 1.690 MMYY Mores PLEASANT VALLEY OVGUL MONTHLY SALES I 576' 1_aa- ,ne.lan,nM 1 27 pal Geeing 1410 TaONnW 2333 133 5/2241999 401 1101995 $277.995 462 2575 Martel View Me.4 Button Rock Uwe RblMb MHW1sn Hanes ^ 70 pW p®YO 0 Ttadtbeel Ill 14510/191999 3.15 1274995 $537.995 2p6 2,713 Neural Web INA a 5VOon Rork Dore Mind Mmm Hanes QUAIL CROSSING OVERALL MONmtLTSALES - I 733I 1nne,nM —1 290590 P60e/51Mrlam ,TINbl 1S IS 1/3)000 1.$ 1239,900 5164900 4343 1.937 Goa Real 1114,11 Street WI 5brpYgR 30 Owl Mlle/CHWmM Hones Trdlbal 73 33 ammo 033 0279.000 $29;® 1.747 4996 — 1)260 Vaaa.,Raaen.l..ma,na I • 31 Rine Vale)Rae TMMtl 70 39 11/1)2012 211 1100,003- $361,000 4956- .2901 IMy.119&Cooly Rd.7 4941 Palk Items IUNN VALUE RRN410V95NL MONTHLY SLAPS - I 2.121 Can-NNm4k ITwlEbol 2.12 1014100H14 7.37 $214150 3175,150 400 13621 Cooky ltd.21 Nmll Kobe.Inc. Blvd. £6059001000466111.NONONY SALES I 7.311 ISaeanneh Fr4mlek I II County Sam TmiEbd 145 125 1/1/2001 1.57 5173.950- $191159 4910- 1.505 9k41v Horns 74 Swannn✓Tmibo TrN5by 275 114 10/15/2(01 3.73 124.150- 6231.950 1.311- 1.510 7011524 Weld CMS Hebb Hale SAYNENMI 0456111.MONTHLY SALES / .34 ISHame fawa.gr.... .I 35 9vpe farm[ ^ 1/100243 3.04 $1K — �M0.&R 431 I30.4TrWmM 60 37 .q] 12469513 1.115 2570 36 9mpe Fenn/S end Trmtlnd 51 37 3)26)343 2.77 3166,995 $196995 1.115 1,543 53mb nHeat;RLbmA N Click� SHARPE FARMS 00I**U.MONTHLY SALES I 5.011 • • • I9tyn thane-allure 1 37 Y 125 ledl ll d9e Get Tab/ a 259 969 7/1511999 Ell $174,910- $295,550 911. 1491 Camp 192•Canty 94 I5 '99— 35 st C sa,saa220$✓Cfl0 9ltl*la Total 400 333 7/1511993 s» $229,990- $254990 1.517- 2,534 oca _ 24 Mad Hone 39 St Wait Rana Gannet TMlvul 17 13 2/1/2002 0.3 9399000- $3249% 293- 273 Gat/Pd 22•Cma19d 15 Genesee Cavary Sr MIN Mall OYBINL MGN1NlY SUS I 19..91 _ 151ann119989HMee.Feat 40 SInit Mesa TYie Tna/a Ill Ill 1111/1999 322 $211.990- $263.990 4w- 3,579 YAM CRtWM Ot 11 Capital NM ., Wall VIEW 6TA1150993Y119oMILLYsues I 1129 WES 419wYY/Koran TaNbd 93 9393302500 2.90 31.19® $200.990 1.113 3300 748444% 13144141349 W. 425Iabe 42 S# 1f 50M1pde adtkmal 101 101 l]/3920W 126 $174,760 $237,000 1,014 2.204 Poma we&Hslma Wa/ Hn1a4W1paea _ 814113141.OV6Wl990NmNlYG1B I 6.101 Imeaee..l...._ J _ 43 Carle N1M Omit a Tn4It94 125 23 1933/1001 131 934900- $35,0.% 1319- 3.099 Sudam 5 TmMb0 Ca Omaha= 44 Spiel Vaaa eta Gat/Naebea Taa®Ist 252 111 8/1/1996 2.74 3164091 $257.750 4691 3,169 Pie a•St Mbal Oe n —IMr 45 bag Vas 10125 Cek/Tetlbe Tatina IN 149101/6//999 106 $20350 $349.500 2.122 3,316 _ dal(ar•µbe Mad C M Ile Oak/5a /Go TnWWnd 24 10 7112//001 0.46 $199,900 $20309 2,607 3,730 Gra Lire V�11am Pad41MM6 47 0@ Cast Same/GWWis. 1/84119304 1I 13 7/1,5292 . 0.78 $1940% $631/900 3.150 1393 Cooly UneGrada •iJW 11113 Haw 9920m Ca3/Wwh.e/Canwne Ta ma 13 13 1/15/200 0.32 $9 000 $569.650 203 323 %Wawa Oct•Paa get haeanne Haas 49 Its Gad/Wynamse Sat TMbd 17 17 495/2000 0.42 $494,9% $536,9% 4770 3,590 Wynclenereartleta SRC 1054 Gat/WaOWaae/Taabd9a abed Talbt a $ 6/15/225 020 $374000 065.9% 3.011 3,7% Wl—s Ian aid Pas 93191 6110009*Nnn 51410 DSc/W7a4sne/MaMHats TeMbM 12 12 ,52,52250 0.39 3339,9% $639,760 2,601 3,476 W1nMWe Clda 4 Pace 5932 gIM Ync 51 Made at Ule[seek TnSYY 37 37 6/6/2803 02$ $441,900 $5103% 21% 3.445 66 Pea Shad Oaau 00atl0pnat UTl O16YN OVERALL MOOMBLY SALES • r ecaahle�> 1 aw„� 53 Nara►olOse/OMM Sales Tads n 7 112 10/75/708 6.15 0251,950• 5361,455 L665• 3,155 Carey Rd.S b Sae 1hre. Mealy Hoag 54 Ala Peale/Steals Tradlklaal 56 16 1/15/2003 157 0259.450 $296,150 1,665 7.624 VMa 111861 Pebrq L*Away&y 7 merely Hare S5 5ha WSW DL Mortar Trad4knal 251 124 S3(7002 5.39 0217,900- $360,900 1,111- 3,115 Faryl lea 56et&Mas earn Mew Blvd. DL Horton Hams 56. •ROM/,Manure Sena TractamA 144 73 6121/20:13 7.07 0319,990 0348,990 1,964 3,169 VIVA Pld96 Partway&highway 7 Ciellaeeul Hones 57 Vbra Rage/Traditions■Amine 7rad6 50 79 54 11/15/7903 9.76 5228,950 0767,903 1,362 2,275 Flaladae View id.k l0alaare 7 Ma woe Der<k r t Can M.S st Debate at y I eg:u - Tud01ma7 172 102 7/39!7003 7.79 0259,990 07ID,990 1.583 2,15e Cb►ntalHa M�Wae Men Bd. �6Ywra1 Mare a� 59 Peak*Vtaa Mop TMlwaal 41 11 7/117004 5.01 0275,9571 $119,750 1,965 1,627 Swmet Drift I Met Woe Parma Maodcest Mom 60 Pvepae t rata Pepe IradtlaW 92 32 1/30/ J 2.63 1425,000 $485,000 1,471 3,762 Vaa Palen&Iraraood Oak Jolla Laing!Lame r+ VISTA 81041E OVERAL2.MOR770.Y Se1L5 Fair,M70 2. 7,865 9}31 7197 S1L' 131 92 8-64 8386.598- 0734.074 1767• 2.71i scam 714C 7att':Uates.ft%- w • • 1 I I I I I 1 I I I 1 I I I I I I . I I _ • I ownnomaf r4060lMnlum rraebi in we 140018085.8 MILS ant enwt0M4 AYADI Prefect Non/ Typo or Annual Location Stratton/ /or Lots f of lob Sbt Monthly Square Typical tunerNamyeyp R�dee Community Planed Sold Data Ala Rate Price Range footage Range Lot 5118 �Ylm Riddggee/Baw 5F/ ITnalaRl 108 33 1/3/2006 1.39 1137,980 $197,900 1,003 1,979 Sankt OIRe t WO Ridge Parkway Fronde Ow nuwMe tmadm.34141197 fixNtlemont Limns 36e 76 1/15/2003 1.89 $163,900 $168,700 1,105 1,219 901 Ave.&5umadwk Drove Then Cwagon (Golden ear- •mont Golden Bar/Ca,m8nkem Tradamil 48 431/27/2002 1.58 $163,900 1195,900 1,244 1,577 17th Ave.El wLNLSl odve Maopolbn Hone Gldm Bar Tnwnhorea Triadbnl 6/ 550/37/2002 2.03 $192,900 $207,900 1,252 1,590 2,400 17e ave.8 Vilikehal OYM Ma0gabn Hares mn r.w e 9ia few/Townbnrce Tedlaa 172 100 9/1/2001 3.13 $141,495 • $153,495 1,198- 1,381 3,200 Cow*Rd 8&Cmq Rd 5 a Howe IMMW1314a-Lenngont I Wage Towr/lww Tradtaa 26 26 1/3/1999 0.13 $192.700 $2253210 1,195 1,539 3,200 Highway 11916!Cow*Line Road Paragon Hone IQQalI Ridge//Pebfiev•Loamont QaY Nape/hrkvNw Gltadlldnt 31 31 2/1/2000 0.86 $179,900 $189,900 1,196 1,983 1,950 Dual Road&Main Stet Lmar Detopnent LLC Non a=Village at Oka Creek-Longmont Samna Wage at 2/h Creek Tradidoa 186 60 1/1/2003 3.75 6142,900 6195,900 1,252 1551 lilt Road I Pate Stitt chatau Develop nest TOTAL 345 255 25.06 YBMG5 69 91 3,13 1161.449• 1193,087 - 1.218 - 1556 2.668 Source:THK AsiWte.Inc EXHIBIT I Intentionally Omitted -- „ (000l2883.DOC v:3) EXHIBIT.1 Underwriter's Letter r (00012883.DOC v:3} Kirkpatrick Pettis A Mutual of Omaha Company September 16, 2004 Town of Firestone 151 Grant Ave. Firestone,Colorado 80520 RE: Proposed The Hills Metropolitan Districts 1 and 2 To Whom It May Concern: As part of the service plan approval process, you have asked about the relationship between the investment bankers and the proposed The Hills Metropolitan Districts 1 and 2. We are engaged with the petitioners of the proposed Districts as described by the attached Letter of Intent. We have the intention of serving as underwriters for the Districts' voter authorized debt once sufficient credit support can be identified based on assessed value or guarantees provided by the landowners. One of the structures represented in the financing plan involves non-rated bonds sold to a third party, which we believe will be marketable based on the growth assumptions also included in this plan and the number of permits expected at the time of issuance. In this example, the debt would be sold to institutional investors. You also requested an explanation of the level of credit risk associated with the types of financing we are considering for these Districts. As with most start-up special Districts, these Districts expect to market bonds to third parties to raise capital for infrastructure before the entire project is complete. The level of risk taken by a bondholder and the interest rate required for the • financing will decrease as development occurs. Our recent special district underwritings vary from bonds sold at 8% with land in the Districts sold to builders and no homes constructed to refunding bonds issued with most of the homes built at interest rates of 5% with "AAA" rated insurance. In the case of"AAA" rated, insured bonds, the underlying Districts generally have debt/AV ratios of 50%or less. Because the financing in these Districts is intended to pay for public infrastructure, we issue bonds as close to the time the infrastructure is needed as possible. While this does increase the bondholders' risk, the bondholders understand that risk and are compensated in the interest rate on the bonds. With regard to the Town's risk, we know of no example where a Municipality was implicated in a special district default and see no legal argument for such implication. In the process of underwriting bonds for a non-rated residential metropolitan district, one key criteria is the level of homebuilder activity. Methods of evaluating such activity include contracts for sale of land in the District to builders, closing of land in the District to builders, model home construction and home sales activity, building permits and certificates of occupancy. Per input from Town staff and based on previously approved Districts in Firestone, these Service 1600 Broadway,Suite 1100*Denver,CO 802024922* 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* sshara kpsp.com`tbishoo akpsp.com Plans include "Development Thresholds" for issuance of non-rated debt based on building permits in each District. We hope this letter helps to clarify the financing alternative represented in the financing plan and the current market for special district bonds. Please call if you have any questions or require further clarification. Sincerely, S . Sh First Vice Presi ent Kirkpatrick Pettis A Mutual of Omaha Company KcK Perris A110.1•611.0 Oml"Campos! InvaUnenb Since 1925 May 31,2002 Petitioners for"The Hills Metropolitan District Nos. 1 -3" c/o Clint Blum BGZ Development,LLC 4401 W.Mineral Avenue Littleton,CO 80128 • RE: Letter of Intent—Proposed"The Hills Metropolitan District Nos.1-3" Dear Petitioners: The Petitioners are in the process of organizing the proposed "The Hills Metropolitan District Nos. 1 -3"(the"Districts"). Once the Districts are organized it is anticipated that the Districts will authorize and issue improvement and/or refunding bonds (the "Bonds") pursuant to voter-approved election questions. The Petitioners desire to state their intention to have the Districts engage the services of Kirkpatrick Pettis regarding the sale of those bonds. This letter confirms the basis upon which we intend to submit an offer to purchase the Bonds from the Districts after they are organized Section 1. Arrangements Before Sale. There are several arrangements,which must be made before any sale of bonds can occur. These arrangements include, but are not limited to: Developing a Plan of Finance. In concert with bond counsel and the Districts' management, Kirkpatrick Pettis will prepare a plan of expected development, future capital improvements, revenues, expenses, and debt repayment Once such a plan is prepared and approved by the Board of Directors of the Districts, various debt structures can be analyzed within the plan to determine what will work best for the Districts. Structuring. Once a financing structure has been selected by the Boards, the terms of the debt(such as the sources of payment,the nature of the security,maturity schedule,the rights of redemption prior to maturity,etc.)must be determined,taking into account both the interests of the Districts and the expectations of investors. Legal CounseL Legal counsel will be selected and engaged by the Districts to prepare the legal proceedings necessary to authorize the debt, to_assist in the preparation of disclosure documents necessary to sell the securities, and to render certain approving 1500 BROADWAY.SUITE 1100•DENVER.CO 80202-4922.303-764-6000.800-962-7537•FAX 303-764-6002 NOME OFFICE:10250 REGENCY CIRCLE SUITE 400•OMAHA.NE 68114.800.116-5777 Member NASD&S1PC•www.kitoa*kpciy,cpn 0 Proposed"The Hills Metropglitan pisaict Nos. I-3" Page 1 of 4 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 tats of interest at which the bonds can be sold. If it is determined to be in the Districts' best interest to obtain these ratings, Kirkpatrick Pettis will assist the Districts in preparing and submitting applications to the rating agencies along with detailed information about the Districts,the debt and any credit enhancement. Credit Enhancement By providing investors with a guarantee of timely payments on the debt,for even a limited time period,the purchase of credit enhancement can produce a net reduction in financing costs. Kirkpatrick Pettis will assist the Districts in investigating the availability of bond insurance, letters of credit or other forms of credit enhancement and assist the Districts in determining the cost effectiveness of these products. Disclosure to Investors. In connection with the issuance of bonds by the Districts and the sale and delivery of securities to ultimate investors, material information about the Districts and the transaction must be compiled in a disclosure document for distribution to prospective purchasers. As set forth above under Legal Counsel, the Districts will engage the services of counsel to assist in the preparation of such disclosure documents and advise the Districts and Underwriter about sales practices, regulatory requirements, and security matters. If disclosure counsel is engaged as the Districts' counsel, Kirkpatrick Pettis,will expect to receive the benefit of their 10(b)-5 opinion as well. In contemplation of submitting an offer to underwrite the bonds, we will assist the Districts in making these arrangements. By accepting this letter and accepting our assistance in making these arrangements, the Districts will not incur any obligation except to pay from the Bond proceeds the expenses as provided in Sections 4 and 6 of this letter. Our active participation in making these arrangements should not and cannot be construed by the Districts as a promise to underwrite the bonds or as an assurance that the bonds can be sold Section 2. Underwriting. At such time as the arrangements for the sale of the securities have been successfully completed, it is our intention to submit for consideration by the Boards our offer to underwrite the bonds. Our offer will be submitted in the form of a bond purchase agreement and will set forth terms of the purchase such as the rates of interest, the amount of any original issue premium or discount, our underwriting compensation(not to exceed 2 percent of the principal amount of the bonds), and the date and conditions for delivery of the bonds. Until the Districts accept our offer,there will be no obligation for this firm to purchase the bonds from the District In consideration for our work performed pursuant to Section 1, above, it is the Petitioners intent to cause the Proposed"The Hills Metropolitan District Nos I-3- - Page of Districts to agree that they will not consider other underwriting proposals unless Kirkpatrick Pettis has first declined to underwrite the transaction on terms and conditions acceptable to the District Section 3. Remarketing. In the event that the Districts issue bonds that are remarketed within their term, the Districts will have to engage a remarketing agent qualified to 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,it is the Petitioners intent to cause the Districts to agree that as long as Kirkpatrick Pettis is the lead underwriter, it will provide Kirkpatrick Pettis with the option to submit a proposal to act as remarketing agent and that they will not consider other proposals to act as remarketing agent unless and until the Kirkpatrick Pettis proposal for remarketing has been rejected. Section 4. Payment of Expenses. Expenses will be incurred to make the arrangements for the sale of the bonds before their delivery and the receipt of proceeds by the Districts but such expenses will not be obligations of the District unless advance authorization has been obtained'from the Districts. All of the expenses incurred in connection with the authorization,sale, and delivery of the bonds, including rating application, letter of credit fees and related expenses, insurance premiums, bond, disclosure and underwriter's counsel and our out-of-pocket expenses for any travel outside of Colorado shall be paid only from the proceeds derived upon sale of the Bonds. Section 5. Not an Offer to Buy. This letter of intent is not an offer to purchase or a guarantee that we will make an offer to purchase the Districts' bonds in the future. Our offer to purchase, if made, will only be made by a bond purchase agreement prepared by our counsel and reviewed by the Districts and their counsel after the successful conclusion of the pre-sale arrangements described in Section I and the completion of other prelunrnaty matters. This letter serves to summarize the steps we hope will lead to an underwriting of bonds at a fixture date at which time both Kirkpatrick Pettis and the Districts will incur and assume additional obligations as set forth in the bond purchase agreement. Section 6. Private Placement of Debt If the Districts determine that a private placement of debt to developer or other parties would be in its best interest, it is the Petitioners intent to cause the Districts to agree that they will nrilive the services of Kirkpatrick Pettis as an advisor fora fee not to exceed 1% of the debt distributed Proposed"The Hills Metropolitan District Nos. 1-3" Page 4 of 4 Section 7. Term of Letter Agreement. This letter agreement shall remain in full force and effect until such time as the Petitioners notify intent to terminate Kirkpatrick Pettis in writing of their this letter agreement, provided that any such action or notice shall provide no less than 30 days notice of such termination. Kirkpatrick Pettis may resign as investment banker to the Districts by providing written notification with no less than 30 days notice to the Petitioners. Section 8. Acceptance. The Petitioners or other authorized officers of the developer may indicate their desire to proceed with the delivery of these investment banking services upon the basis set forth in this letter by executing one copy of this letter and returning it to us. • Respectfully submitted, Kirkpatrick,Pettis,Smith,Potion Inc. Thomas R.Bishop SaIncl&Sharp, Senior Vice President Vice President i ACCEPTED this— .1 day of May 2002. BGZ Development,LLC • flnjD lol ot. \ �—� Authorized Officer :.6 McGEADY SISNEROS, R C. ATTORNEYS AT LAW 1675 BROADWAY,SUITE 2100 DENVER,COLORADO 80202 TELEPHONE'(3031 592-9380 FACSIMILE:(303)592-9385 MARYANN M.McGEADY SPECIAL COUNSEL DARLENE SISN EROS a- KENNETH M.KOPROWICZ MARY JO DOUGHERTY MEGAN BECHER VALERIE D.BROMLEY KATHRYN S.KANDA JACQUELINE C.MURPHY GEORGE M.ROWLEY September 16, 2004 Town of Firestone, Colorado P.O.Box 100 Firestone, CO 80520 Re: Organization of The Hills Metropolitan District No. 1 This firm has acted as counsel to Saddleback Hills Lake &Conservancy Limited Liability Company, the Developer,which is the District organizer, and Petitioners in connection with the organization of The Hills Metropolitan District No. 1 (the"District"). Pursuant to the requirements of Section V.J. of the Service Plan for the District, this letter confirms that the petition for organization of the District, filed with the Town on September 16, 2004,the Service Plan for the District, as approved on September 16,2004,by the Town of Firestone, and the notice,hearing and other procedures in connection with the approval of the Service Plan have met the requirements of the Special District Act,Article 1 of Title 32, C.R.S., and that the provisions of the Service Plan, including,without limitation,provisions as to the District's debt, fees and other revenue sources, are consistent with applicable provisions of Titles 11 and 32, C.R.S., and other applicable law. Very truly yours, CGEAD ISNEROS,P.C. • Darle I isneros ■ {00026265.DOC v:2) EXHIBIT L Developer's Indemnity Letter and District's Indemnity Letter September 13,2004 Town of Firestone P.O. Box 100 Firestone,Colorado 80520 Re: The Hills Metropolitan District No. 1 Ladies and Gentlemen: This Indemnity Letter(the"Indemnity Letter")is delivered by the undersigned, Saddleback Hills Lake&Conservancy Limited Liability Company("Saddleback")in order to induce the Town of Firestone(the"Town")to approve the Service Plan, including all amendments heretofore or hereafter made thereto (the"Service Plan") for The Hills Metropolitan District No. 1 (the"District"). In consideration of the Town's approval of the Service Plan, Saddleback, for and on behalf of itself and its transferees, successors and assigns, represents, warrants,covenants and agrees to and for the benefit of the Town as follows: 1. Saddleback hereby waives and releases any present or future claims it might have against the Town or the Town's elected or appointed officers,employees, agents or contractors in any manner related to or connected with the Service Plan or any action or omission with respect thereto. Saddleback further hereby agrees to indemnify and hold harmless the Town and the Town's elected and appointed officers,employees, agents and contractors, from and against any and all liabilities resulting from any and all claims, demands, suits, actions or other proceedings of whatsoever kind or nature made or brought by any third party, including attorneys' fees and expenses and court costs, which directly or indirectly or purportedly arise out of or are in any manner related to or connected with any of the following: (a)the Service Plan or any document or instrument contained or referred to therein;or(b)the formation of the District or any actions or omissions of Saddleback,the District,the Town or any other person or entity in connection with the District, including,without limitation, any bonds or other financial obligations of the District or any offering documents or other disclosures made in connection therewith. Saddleback further agrees to investigate,handle, respond to, and to provide defense for and defend against,or at the Town's option,to pay the attorneys' fees and expenses for counsel of the Town's choice for any such liabilities,claims,demands,suits, actions,or other proceedings. It is understood and agreed that the Town does not waive or intend to waive the monetary limits (presently$150,000 per person and$600,000 per occurrence)or any other rights,immunities, and protections provided by the Colorado Governmental Immunity Act, Section 24-10-101,et seq., C.R.S., as from time to time amended,or otherwise available to the Town,its officers or its employees. {00012883.DOC v:3} 2. Saddleback hereby consents to the Town Disclaimer Statement contained in Exhibit N to the Service Plan; acknowledges the Town's right to modify the Town Disclaimer Statement, and waives and releases the Town from any claims Saddleback might have based on or relating to the use of or any statements made or to be made in such Town Disclaimer Statement(including any modifications thereto). 3. Saddleback hereby represents and warrants to the Town that it and its principals and controlled affiliates will be, if and when they acquire Developer Bonds (as defined in the • Service Plan),accredited investors. 4. Saddleback believes and represents that, once the commencement of builder activity is demonstrated by the issuance of building permits as described in Section V.B(2)(b)of the Service Plan,there is a reasonable likelihood that projected future development will occur and will result in levels of assessed valuation sufficient to support such Unrated Non-Developer Bonds(as well as all other debt contemplated for the District),as shown in Exhibit H to the Service Plan. 5. Saddleback believes and represents that the assumptions,projections and forecasts contained in the District's Financial Plan are reasonable. 6. It is understood and agreed, and Saddleback hereby expressly acknowledges, that the Town,in acting to approve the Service Plan,has relied upon the provisions of this Indemnity Letter. 7. This Indemnity Letter has been duly authorized and executed on behalf of Saddleback Hills Lake&Conservancy Limited Liability Company. Very truly yours, SADDLEBACK HILLS LAKE& CONSERVANCY LIMITED LIABILITY COMPANY BY QX/LrV ' ✓l• am"- Its: YVuw.Ex (00012ss3.DOC v:3) Form of District's Indemnity Letter [Date] Town of Firestone P.O. Box 100 Firestone,Colorado 80520 Re: The Hills Metropolitan District No. 1 Ladies and Gentlemen: This Indemnity Letter(the"Indemnity Letter")is delivered by The Hills Metropolitan District No. 1 (the"District") in order to comply with the Service Plan, including all amendments heretofore or hereafter made thereto(the"Service Plan"). In consideration of the Town's approval of the Service Plan, the District, for and on behalf of itself and its transferees, successors and assigns, represents,warrants,covenants and agrees to and for the benefit of the Town as follows: 1. The District hereby waives and releases any present or future claims it might have against the Town or the Town's elected or appointed officers, employees, agents or contractors in any manner related to or connected with the Service Plan or any action or omission with respect thereto. To the fullest extent permitted by law, the District hereby agrees to indemnify and hold harmless the Town and the Town's elected and appointed officers, employees, agents and contractors, from and against any and all liabilities resulting from any and all claims,demands, suits, actions or other proceedings of whatsoever kind or nature made or brought by any third party, including attorneys' fees and expenses and court costs, which directly or indirectly or purportedly arise out of or are in any manner related to of connected with any of the following: (a) the Service Plan or any document or instrument contained or referred to therein; or(b)the formation of the District or any actions or omissions of the District,the Town, — Saddleback Hills Lake & Conservancy Limited Liability Company("Saddleback Hills")or any other person or entity in connection with the District, including,without limitation,any bonds or other financial obligations of the District or any offering documents or other disclosures made in connection therewith. The District further agrees to investigate, handle, respond to, and to provide defense for and defend against,or at the Town's option, to pay the attorneys' fees and expenses for counsel of the Town's choice for, any such liabilities,claims, demands, suits, actions or other proceedings. It is understood and agreed that neither the District nor the Town waives or intends to waive the monetary limits (presently$150,000 per person and$600,000 per occurrence)or any other rights, immunities, and protections provided by the Colorado Governmental Immunity Act, Section 24-10-101, et seq., C.R.S.,as from time to time amended, or otherwise available to the Town, the District, its officers or its employees. 2. The District hereby consents to the Town Disclaimer Statement contained in Exhibit N to the Service Plan, agrees that the District will include such Town Disclaimer Statement or any modified or substitute Town Disclaimer Statement hereafter furnished by the Town to the District in all offering materials used in connection with any bonds or other financial (00012883.DOC v:3} obligations of the District(or, if no offering materials are used, the Town Disclaimer Statement will be given by the District to any prospective purchaser of any bonds or other financial obligations of the District); and waives and releases the Town from any claims the District might have based on or relating to the use of or any statements made or to be made in such Town Disclaimer Statement (including any modifications thereto). 3. It is understood and agreed, and the District hereby expressly acknowledges, that the Town, in acting to approve the Service Plan, has relied upon the provisions of this Indemnity Letter. 4. This Indemnity Letter has been duly authorized and executed on behalf of the District. Very truly yours, THE HILLS METROPOLITAN DISTRICT NO. 1 By: Its: • (00012883.DOC v:3) EXHIBIT M Disclosure Notice THE HILLS METROPOLITAN DISTRICT NO. 1 Weld County, Colorado DISCLOSURE STATEMENT Pursuant to Section XI of the Service Plan of The Hills Metropolitan District No. 1 DISTRICT ORGANIZATION: The Hills Metropolitan District No. 1 (the"District"), Weld County, Colorado, is a quasi-municipal corporation and political subdivision of the State of Colorado duly organized and existing as a metropolitan district pursuant to Title 32, Colorado Revised Statutes. The District was declared organized and an existing metropolitan district on , pursuant to an Order and Decree Organizing District and Issuance of Certificates of Election for The Hills Metropolitan District No. I issued in the District Court of Weld County, Colorado. The Order and Decree was recorded in the records of the Weld County Clerk and Recorder on at Reception No. The District is located entirely in Weld County. The legal description of the property forming the boundaries of the District is described in Exhibit A. DISTRICT PURPOSE: The District was organized for the purpose of serving as a"financing only" district to finance street, water, safety protection, and park and recreation facilities, all in accordance with its Service Plan approved by the Town of Firestone. When completed, improvements shall be dedicated to the Town of Firestone,or its designees, including,but not limited to, Central Weld County Water District,Carbon Valley Park&Recreation District, or other non-profit or governmental entities, all for the use and benefit of residents and taxpayers, except that certain improvements, upon the consent and direction of the Town of Firestone,may be maintained by the District or a Homeowners'Association formed for the Saddleback Hills subdivision. The District's Service Plan is available from the District c/o McGeady Sisneros, P.C., 1675 Broadway, Suite 2100, Denver, CO 80202, Attention: Darlene Sisneros, and is also on file and available for review at the Office of the Town Clerk, Town of Firestone, 151 Grant Avenue, Firestone, CO 80520. TAX LEVY INFORMATION: The primary source of revenue for the District is ad valorem property taxes. Property taxes are determined annually by the District's Board of Directors and set by the Board of County Commissioners for Weld County as to rate or levy based upon the assessed valuation (00028887.DOC v..2} of the property within the District. The levy is expressed in terms of mills. A mill is 1/1,000 of the assessed valuation, and a levy of a one mill equals $1 of tax for each$1,000 of assessed value. The financial forecast for the Districts(as set forth in its Service Plans)assumes that the _ District will be able to set its tax levy at forty(40) mills for debt service, warranty maintenance and administration purposes. Except for certain adjustments permitted by the Service Plans to compensate for legally required changes in residential valuation ratios, the District may not impose a mill levy in excess of fifty(50) mills("Limited Debt Service Mill Levy")for debt and three and one half(3.5)mills for operations and warranty maintenance. Districts taxes are collected as part of the property tax bill from Weld County for debt service and for District administration and its warranty maintenance activities. THE HILLS METROPOLITAN DISTRICT NO. 1 By: President (00028887.DOC¢2} 2 STATE OF COLORADO ) ) ss. CITY AND COUNTY OF DENVER ) The foregoing instrument was acknowledged before me on this day of , 200_,by asthe of The Hills Metropolitan District No. 1. WITNESS MY HAND AND OFFICIAL SEAL. Notary Public My commission expires: • • {00028887.DOC v:2} 3 EXHIBIT N Form of Town Disclaimer TOWN OF FIRESTONE, COLORADO - DISCLAIMER STATEMENT As a requirement imposed in its formation process,The Hills Metropolitan District No. 1 (the"District") is obligated to the Town of Firestone(the "Town")to include this disclaimer statement in all offering materials used in connection with any bonds or other financial obligations of the District (or, if no offering materials are used, to give this disclaimer statement to any prospective purchaser investor or lender in connection with any such bonds or other financial obligations of the District). The date of this disclaimer statement is The Town has not reviewed or participated in the preparation of any offering materials or any other disclosure documentation relating to any bonds or financial obligations of the District or any other materials to which this Disclaimer Statement is appended. Other than this Disclaimer Statement, no other statement of any kind is authorized to be made by or on behalf of the Town in any offering materials or any other disclosure documentation relating to any bonds or other financial obligations of the District. The Town and the District are separate legal entities. The Town is not a party to — and is not obligated with respect to any borrowings, financings,bonds or other financial obligations of the District. As a statutory requirement for the formation of the District, the Town approved Service Plan containing financial and other information furnished by the District's organizers. The Town's approval of the Service Plan was based upon such information furnished by the District's organizers, without independent investigation by the Town. The District's Service Plan was prepared in 2004 and not in connection with the offering of any bonds or other financial obligations. The Town's approval of the District's Service Plan should not be relied upon by prospective purchasers, investors or lenders in evaluating the investment quality of the District's bonds or other financial obligations. The Service Plan and related agreements do not impose upon the Town and duties to, nor confer any rights against the Town upon, any purchasers, investors, lenders,bondholders or other third parties. By purchasing or otherwise accepting any bond or other financial obligation of the District, the owner or holder thereof waives and releases any then existing or future claim against the Town or the Town's elected or appointed officers, employees, agents or contractors in any manner related to or connected with the District's Service Plan or any action or omission with respect thereto. ,_ (00012883.DOC v:3} EXHIBIT O Form of Town IGA INTERGOVERNMENTAL AGREEMENT BETWEEN THE TOWN OF FIRESTONE, COLORADO AND THE HILLS METROPOLITAN DISTRICT NOS. 1,2 AND 3 THIS INTERGOVERNMENTAL AGREEMENT ("Agreement") is made and entered into as of this day of , 200 , by and between the TOWN OF FIRESTONE, a municipal corporation of the State of Colorado (the"Town"),THE HILLS METROPOLITAN DISTRICT NO. 1 ("District No. 1"), THE HILLS METROPOLITAN DISTRICT NO. 2("District No. 2"), and THE HILLS METROPOLITAN DISTRICT NO. 3 ("District No. 3"), all quasi-municipal corporations and political subdivisions of the State of Colorado (collectively,District No. 1, District No. 2, and District No. 3 are referred to herein as the"Districts"). RECITALS WHEREAS, the Districts were organized to finance, design, construct and install certain facilities, and to exercise certain powers, all as are more specifically set forth in each of the Districts' Service Plans dated , and approved by the Town on ,by Resolution No. (collectively, the"Service Plans"); and WHEREAS,the Service Plans make reference to and require the execution of an intergovernmental agreement between the Town and the Districts; and WHEREAS,the Town and the Districts have determined it to be in the best interests of their respective taxpayers,residents and property owners to enter into this Agreement; (00024910.DOC v:4E NOW, THEREFORE, for and in consideration of the covenants and mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of — which are hereby acknowledged, the parties hereto agree as follows: COVENANTS AND AGREEMENTS 1. Application of Local Laws. The Districts each hereby acknowledge that the property within their boundaries shall be subject to all ordinances, rules and regulations of the Town, including, without limitation, ordinances, rules and regulations relating to zoning, subdividing, building and land use, and to all related Town land use policies, master plans, related plans, and intergovernmental agreements. 2. Nature of Districts. The Districts agree that they are organized for the purpose of financing certain public improvements within the Saddleback Hills Lake&Conservancy development (the"Development,"as further defined in the Service Plans), and that the Districts' purposes,powers, facilities and activities are to be limited and governed by their respective Service Plans. The Districts are not intended to and shall not provide service outside their boundaries (except as specifically permitted in the Service Plans). Further, the Districts are not intended to and shall not exist perpetually, but instead shall be dissolved in accordance with their respective Service Plans and State law. The Districts shall fully comply with all provisions, requirements,restrictions and limitations of their Service Plans. The Districts shall comply with the requirements of Section 32-1-107(3), C.R.S. 3. Change of Boundaries. The Districts agree that any inclusion of properties within, or any exclusion of any properties from, their respective boundaries shall constitute a material modification of the applicable Service Plans; and any purported inclusion or exclusion that has not been approved by the Town pursuant to the procedures applicable to a material modification of the Service Plans shall be void and of no effect. {00024910.DOC v:4} 2 4. Town Approval Requirements; Review of District Submittals. The Districts agree that any Town approval requirements contained in the Service Plans (including, without limitation, any Service Plan provisions requiring that any change, request, action, event or occurrence be treated as a Service Plan amendment proposal or be deemed a"material modification"of the Service Plan) shall remain in full force and effect, and such Town approval shall continue to be required, notwithstanding any future change in law modifying or repealing any statutory provision concerning service plans, amendments thereof or modifications thereto. Each District agrees to reimburse the Town for all administrative and consultant costs incurred by the Town for any Town review of reports,plans, submittals, proposed modifications or requests for administrative approval, or other materials or requests provided to the Town by the District pursuant to the District's applicable Service Plan, state law, or the Firestone Municipal Code. The Town may require a deposit of such estimated costs. 5. Ownership of Improvements. The parties agree that the Districts shall serve as "financing only"districts and shall not be permitted to undertake ownership, operation or maintenance of public improvements, facilities or services except as specifically set forth in the Service Plans. 6. Consolidation. The Districts shall not file a request with the district court to consolidate with another district without the prior written approval of the Town. 7. Dissolution. The Districts agree that they shall take all action necessary to dissolve as provided in Section VIII of the Districts' Service Plans, and in accordance with such Service Plan and State law. 8. Notice of Meetings. The Districts agree that they shall each submit a copy of the written notice of every regular meeting, special meeting, and work session of their respective (00024910.DOC v:4) 3 District's Board of Directors to the Office of the Firestone Town Administrator,by mail, facsimile or hand delivery, to be received at least three(3)days prior to such meeting. The Districts each agree that they shall also each, respectively, submit a complete copy of meeting packet materials for any such meetings to the Office of the Firestone Town Administrator,by mail, facsimile or hand delivery, to be received at least one(1)day prior to any such meetings. 9. Annual Report. The Districts shall each, respectively, be responsible for submitting an annual report to the Town pursuant to and including the information set forth in Section VII of each of the Service Plans. 10. Payments to Town for Public Improvements. Except as otherwise expressly provided in Section V.G.2 of the Service Plans, the Districts will pay to the Town for deposit into the Town's capital improvements fund twenty-three percent(23%) of the Districts' total net bond proceeds derived from the issuance of Non-Developer Bonds. Such amounts shall be paid to the Town immediately upon issuance and delivery of each such series of Non-Developer Bonds which, according to Exhibit H, is anticipated to occur in 2005 and 2008. The funds so paid to the Town may be used by the Town to finance any street,park or recreation capital improvement, or other capital improvement(either within or outside the boundaries of the District), which improvements the District would otherwise be empowered to construct, i.e., streets, street lighting, traffic safety controls, water, sanitary sewer, landscaping, storm drainage or park and recreation improvements and facilities, any of which improvement shall be of benefit to the Town and Districts as determined by the Board of Trustees. By executing this Agreement, the Town expressly agrees that if the Developer and/or the Districts fund the construction of or construct the Saddleback Park Improvements in accordance with the Phasing Plan, Concept Plan and other applicable provisions of the Park Agreement and {00024910.DOC v:41 4 the Service Plans, then the Certified Construction Costs(as defined below) related to construction of the Saddleback Park Improvements shall be applied as a credit toward the — Districts' satisfaction of the revenue sharing obligations set forth herein and in the Town IGA, and the provision set forth above regarding revenue-sharing amounts being paid to the Town upon issuance and delivery of each series of Non-Developer Bonds shall be inapplicable to the extent of such credit. At least sixty(60)days prior to Hills No. 3's issuance of any Non-Developer Bonds,the Districts shall provide the Town with documentation regarding the total costs incurred by the Developer and/or the Districts for construction of the Saddleback Park Improvements,including but not limited to architecture and design, engineering,legal fees. construction management fees, permit fees, surveying expenses, and labor and materials construction costs ("Certified Construction Costs"). Such documentation shall include an independent engineer's certification of the construction costs and the District's certification that such documents and costs incurred are true and accurate. The Certified Construction Costs shall exclude costs for construction of — any local or collector streets abutting Saddleback Park(currently denoted as Saddleback Circle and Garland Street on the Concept Plan). The Certified Construction Costs may include utility costs only for those utilities that directly serve Saddleback Park. In the event that the Certified Construction Costs are equal to or exceed 23%of the aggregate net proceeds (after deduction of reasonable amounts for capitalized interest, reserve funds and issuance costs) of the Districts' Non-Developer Bonds previously issued and to be issued as certified by the Districts' Financial Advisor("Aggregate Net Non-Developer Proceeds"),the Districts shall be deemed to be in full compliance with the above-described Town regional improvement revenue sharing obligation and the Town shall not be entitled nor shall it seek additional participation from the Districts for {00024910.DOC v:4} 5 regional improvements pursuant to such obligation unless otherwise provided by mutual written agreement among the Districts and the Town. In no event shall the calculation of Aggregate Net Non-Developer Proceeds include Developer Bonds or Refunding Bonds. Alternatively, in the event that the Certified Construction Costs are less than 23% of the Aggregate Net Non- Developer Proceeds, then, as provided in this Agreement and the Hills No. 3 Service Plan, Hills No. 3 shall pay the Town an amount equal to the difference between such 23% of Aggregate Net Non-Developer Proceeds and the Certified Construction Costs from the proceeds of its first series of Non-Developer Bonds, or, if agreed by the Town, from its first and second series of Non-Developer Bonds on a pro-rata basis. Although the Developer and Districts anticipate that Non-Developer Bonds will be issued to fund construction of Improvements or the acquisition of Improvements from the Developer, they acknowledge the possibility that the Developer or a successor or assignee thereof may elect to fully fund the Improvements and retain ownership of Developer Bonds for more than five years thereby delaying the issuance of Non-Developer Bonds. In the event that the Districts have • not issued Non-Developer Bonds by the date that is one(1) year after completion and the Town's conditional acceptance of Saddleback Park Improvements, the Districts acknowledge that the Developer is obligated pursuant to the Park Agreement to submit the Certified Construction Costs to the Town and to pay the Town the amount, if any, resulting from deducting the Certified Construction Costs from 23%of the aggregate net proceeds of all Developer Bonds issued by any of the Districts,which shall be calculated by deducting the reasonable issuance costs from the principal amount of all Developer Bonds issued by the Districts, which net amount shall be certified to the Town by the Districts' Financial Advisor. {00024910.DOC v:4} 6 11. Federal Tax Law Requirements. The Town recognizes that the tax-exempt status of the Districts' Non-Developer Bonds is dependent upon the investment and the expenditure of the proceeds of the Non-Developer Bonds satisfying requirements of applicable provisions of Federal tax law and agrees that the Town will not invest or expend any monies paid to the Town pursuant to Section 10 above in a manner that causes interest on the Non-Developer Bonds to be or become included in gross income for Federal income tax purposes. In particular, the Town agrees with respect to funds of which it is the recipient pursuant to Section 10 of this Agreement that it will comply with the following requirements(unless the Town provides to the issuing District the opinion of nationally recognized bond counsel reasonably acceptable to the issuing District that failure to comply with any such requirement will not adversely affect the exemption from Federal income taxation of interest on the Non-Developer Bonds): (a) The Town will not invest such funds at a yield which exceeds the yield of the respective Non-Developer Bonds with respect to which such funds have been paid to the Town. The issuing District shall provide to the Town calculations of yield for such bonds on which the Town may rely. For purposes of satisfying this requirement, the Town agrees to invest such funds in investments acquired for not more than their"fair market value"(within the meaning of Section 1.148-5 of the Treasury Regulations). (b) The Town will segregate funds received pursuant to Section 10 hereof from other funds of the Town, record all investments and expenditures of such funds, and provide records of such investment and expenditures to the appropriate District upon request. (c) Funds received by the Town pursuant to Section 10 hereof will be expended on capital expenditures for Federal tax purposes and the Town shall not apply any such funds, directly or indirectly, to the payment of debt service on any other obligations of the Town. (00024910.DOC v:4) 7 Property financed with funds received by the Town pursuant to Section 10 hereof shall be owned by or on behalf of the Town for so long as any Non-Developer Bonds with respect to which such funds have been paid to the Town remain outstanding. (d) No proceeds of Non-Developer Bonds with respect to which funds have been paid to the Town pursuant to Section 10 hereof will be used by the Town for any"private business use"(within the meaning of Section 141 of the Internal Revenue Code), nor will any such funds be loaned by the Town to any other person. (e) The provisions of this Section 11 are intended to be for the benefit of the bondholders of the Non-Developer Bonds with respect to which funds have been paid to the Town pursuant to Section 10 hereof as if such bondholders were parties to this Agreement. Should the Internal Revenue Service ever examine such Non-Developer Bonds, the Town agrees to cooperate with the applicable District and will provide to the applicable District such records and information as may assist the District in the examination process, and the applicable District will advance or reimburse the Town's reasonable expenses in connection with such examination process. 12. Allocation of Financing Proceeds. Funds received by the Town pursuant to Section 10 hereof may be used by the Town to finance public improvements the Districts would otherwise be empowered to construct, i.e., street, water, safety protection, and park and recreation facilities and services. The Districts acknowledge and agree that the provisions of this Agreement and of the Service Plans for revenue sharing payments to the Town are material considerations in, and conditions of, the Town's approval of the Districts' Service Plans, and that the Town has relied thereon in approving the Districts' Service Plans. (00024910.DOC v:4} - 8 The Districts specifically agree that the provisions of this Agreement and of the their respective Service Plans shall run in favor of and shall be enforceable by the Town. The Districts represent and warrant that they have obtained all voter authorizations necessary to implement such provisions of this Agreement and the Service Plans, and that they will exercise their powers in accordance with and in furtherance of such provisions. 13. Entire Agreement of the Parties. This Agreement, together with the Service Plans to the extent they relate to, complement or are referenced in the provision of this Agreement, constitute the entire agreement between the parties and supersede all prior written or oral — agreements, negotiations or representations and understandings of the parties with respect to the subject matter contained herein. 14. Amendment. This Agreement may be amended, modified, changed or terminated in whole or in part only by a written agreement duly authorized and executed by the parties hereto and without amendment to the Service Plan. If a proposed amendment, modification or change affects less than all Districts, then the written agreement regarding such amendment, modification or change may be authorized and executed by the Town and the affected District or Districts rather than all parties hereto. 15. Enforcement. The parties agree that this Agreement may be enforced in law or in equity for specific performance, injunctive or other appropriate relief, including damages, as may be available according to the laws and statutes of the State of Colorado. 16. Venue. Venue for the trial of any action arising out of any dispute hereunder shall be in the appropriate district court of the State of Colorado pursuant to the appropriate rules of civil procedures. {00024910.Doc v:4) 9 17. Beneficiaries. Except as otherwise stated herein, this Agreement is intended to describe the rights and responsibilities of and between the named parties and is not intended to, and shall not be deemed to, confer any rights upon any persons or entities not named as parties. 18. Effect of Invalidity. If any portion of this Agreement is held invalid or unenforceable for any reason by a court of competent jurisdiction as to any party or as to all parties, such portion shall be deemed severable and its invalidity or its unenforceability shall not cause the entire Agreement to be terminated. Further, with respect to any portion so held invalid or unenforceable, the Districts and the Town agreed to take such actions as may be necessary to achieve to the greatest degree possible the intent of the affected portion. 19. Assignability. Other than as specifically provided for in this Agreement,neither the Town nor the District shall assign their rights or delegate their duties hereunder without the prior written consent of the other parties. 20. Successors and Assigns. Subject to Section 19 hereof,this Agreement and the rights and obligations created hereby shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 21. Definitions. All capitalized terms not defined herein shall have the meanings set forth in the Service Plans. THE HILLS METROPOLITAN DISTRICT NO. 1 By: Its: ATTEST: By: Secretary (00024910.DOC v:41 10 THE HILLS METROPOLITAN DISTRICT NO. 2 _ By: Its: ATTEST: By: Secretary THE HILLS METROPOLITAN DISTRICT NO. 3 By: Its: ATTEST: By: Secretary TOWN OF FIRESTONE By: Mayor Attest: Town Clerk {00024910.DOe v:4E 11 EXHIBIT P Form of District IGA INTERGOVERNMENTAL COST SHARING AND RECOVERY AGREEMENT THIS INTERGOVERNMENTAL COST SHARING AND RECOVERY AGREEMENT("Agreement")is made and entered into this day of ,2004, by and among THE HILLS METROPOLITAN DISTRICT NO 1. ("District No. 1"),THE HILLS METROPOLITAN DISTRICT NO. 2("District No. 2"), 1'HE HILLS METROPOLITAN DISTRICT NO.3 ("District No.3 )(collectively, the"Districts"),all of which are quasi-municipal corporations and political subdivisions of the State of Colorado, SADDLEBACK HILLS LAKE& CONSERVANCY LIMITED LIABILITY COMPANY and SADDLEBACK HILLS LAKE AND CONSERVANCY#2 LLC(collectively,the . "Developer"). RECITALS WHEREAS,pursuant to the Colorado Constitution,Article XIV, Section 18(2)(a), and Section 29-1-203, C.R.S.,metropolitan districts may cooperate or contract with each other to provide any function, service, or facility lawfully authorized to each, and any such contract may provide for the sharing of costs,the imposition of taxes, and the incurring of debt; and WHEREAS,the Districts were formed for the purpose of designing,acquiring, constructing,installing, and maintaining certain public improvements, including street,water, _ safety protection, and park and recreation facilities,to the extent permitted and as more fully detailed in their Service Plans;and WHEREAS,each District lies within,and was organized with the approval of,the Town of Firestone, State of Colorado(the"Town"); and WHEREAS,the land in the Districts(the"Development")will require construction and installation of certain regional improvements("Shared Facilities");and WHEREAS,development within the respective Districts is not expected to proceed at the same time. Accordingly,the Districts desire to create a flexible structure that allows any one or more of the Districts to separately or cooperatively fund, construct and install improvements , and to the extent that they are funded,constructed and installed by fewer than all of the benefited Districts,to require the non-participating District to reimburse the participating or initiating District(s) for its share of the costs of such improvements; and WHEREAS,each of the Districts is limited and governed by its respective Service Plan (collectively,the"Service Plans"),as approved by the Town on September 16,2004; and WHEREAS,at an election held for the Districts on November 2,2004, in accordance with law and pursuant to due notice, this Agreement was authorized by a majority of the Districts' respective electorates. t00013370DOC v:4) NOW,THEREFORE, in consideration of the promises and the mutual covenants herein,the Districts agree as follows: 1. Electoral and Regulatory Approvals. The authorization for issuance of debt, fiscal year spending, multi-fiscal year financial obligations, revenue collections and other constitutional matters requiring voter approval for purposes of this Agreement were approved at elections held for the Districts on November 2,2004,in accordance with law and pursuant to due notice. To the extent additional or new voter authorization is needed to realize the intent of this Agreement or to comply with law,the parties agree to submit the necessary questions to their respective electorates. The Districts anticipated at the time of preparation of this Agreement that changes or modifications to this Agreement might be necessary to comply with regulatory requirements of the State Securities Commission(or other regulatory body with jurisdiction) for the State of Colorado and/or other applicable regulatory authorities. This Agreement may be modified, and shall be deemed to be modified, as necessary to obtain the initial or continuing authorization of any applicable regulatory authorities. _ 2. Shared Facilities. The Districts hereby acknowledge the shared benefits of the Shared Facilities and agree that the costs of the Shared Facilities shall be allocated according to the percentages set forth in the Notes to Exhibit A,attached hereto and incorporated herein by this reference("Cost Allocation Schedule") and shall be paid for by each District in accordance with this Agreement and the respective Project Agreement(both as defined below), if any. The Parties acknowledge that it may be necessary for one or more Districts to proceed with the construction and financing of all or a.portion of the Shared Facilities at a point in time when the other Districts are unable to fund their shares. It is the intention of the Districts,by entering into this Agreement, to bind themselves concerning the funding of the Shared Facilities so that the cost of the public improvements for the Development will be shared equitably by the users of such improvements. In addition,there may be instances where none of the Districts has revenue sufficient to construct and install a Project. In such an instance, the Developer may fund, construct and install the Project and the corresponding Project Agreement(both as defined below)may(to the extent so required by the Developer)provide that one or more of such Districts will obligate themselves to repay moneys so advanced by the Developer by issuing Developer Bonds,as defined in their respective Service Plans,and subject to the limitations and conditions contained in their respective Service Plans. 3. Development Commencement and Cost Sharing (a) Development Commencement Pursuant to Project Agreements. Upon a determination by one or more of the Districts (each an"Initiating District") that construction and installation of all or a portion of the Shared Facilities(the"Project")is necessary to support development within its or their boundaries,the Initiating District(s)shall commence negotiations with the Developer,if applicable, and the other District(s)which will benefit from such Shared Facilities as shown in the Cost Allocation Schedule,for an agreement setting forth the following: (1)a description of the Project; (2)designation of a project manager to coordinate and oversee the construction and installation of the Project as set forth in Section 3(b)(i)below("Project Manager"); (3)designation of an engineer to design the Project("Design Engineer"); (4)each (00013370.DOC v:4} 2 District's share of the costs of the Project; (5)a requirement that each of the benefited District(s) not providing any of the construction funding sign a promissory note evidencing such District's obligation to reimburse the District(s)providing construction funding of the Project its or their respective share(s)of the costs of the Project("Promissory Note"), substantially in the form of Exhibit B attached hereto and incorporated herein by this reference(or, alternatively, a District may obtain funding from the Developer for its share of the Project costs and may, to the extent so required by the Developer,commit to repay moneys so advanced by the Developer by issuing Developer Bonds, as defined in its respective Service Plan, and subject to the limitations and conditions contained in its respective Service Plan); and(6)a requirement that each District providing a Promissory Note or issuing Developer Bonds also provide an opinion from nationally recognized bond counsel that the promissory note or Developer Bonds constitute an enforceable debt or multiple-fiscal-year obligation("Project Agreement(s)"). Each of the Districts that is a party to a Project Agreement shall be a"Participating District." (b) Development Commencement in the Absence of a Project Agreement. If after thirty(30)days(or such greater number of days as is mutually agreed upon by the parties to the Project Agreement(s))of good faith negotiation("Good Faith Negotiation Period"), the Developer, if applicable,and the Districts are unable to reach agreement upon the terms of a Project Agreement,the Initiating District(s) shall give written notice to the other District(s)that construction and installation of all or a portion of the Shared Facilities is necessary to support development within its or their boundaries. The District(s)receiving such notice shall be bound by the cost recovery provisions set forth in Section 3(b)(vi)below(in which event such District(s) shall be a Non-Participating District(s))and the Initiating Districts shall be Participating Districts. • (i) Designation of Project Managers. The Participating Districts shall mutually cooperate to designate a Project Manager. If the Developer,if applicable, and the Participating Districts are not able to agree on the Project Manager within the Good Faith Negotiation Period described in Section 3(b)above,then the Project Manager shall be designated by the Participating District with the largest share of the costs of the Project or by the Developer if no District is capable of funding its share of the Project. Project management fees for construction and installation of the Project are set forth and included within the Cost Allocation Schedule. The Project Manager shall: (i)obtain all proposals and agreements for engineering,soils testing and other professional services required for the Project; (ii)obtain and file all service agreements and appropriate insurance certificates; (iii) advertise and publish for public bidding(if applicable),coordinate allpre-bid conferences, bid openings, contract awards, bonds and sureties,notices,agreements,pre-construction meetings and project schedules; (iv) track all construction contracts and agreements for performance and services to include testing, surveying, construction staking and other miscellaneous services, including review of, execution of and monitoring of work orders and/or purchase orders;(v)negotiate any and all change orders as required by the Participating Districts and review contract status monthly or as otherwise required by the Participating Districts; (vi)provide construction management and superintendent services; (vii)obtain all certifications of substantial and final completion, inspections by the Town, coordinate remedial construction, expedite the processes for conditional and final acceptance of the applicable improvements including the release of any retained funds; (viii) keep and maintain all records for delivery to the Participating Districts upon completion of the {00013370DOc v:4} 3 Project; and (ix)determine the Project Share(defined below)of each District and the Adjusted Project Share(defined below)of each Participating District in accordance with the following: The Project Manager shall utilize the Cost Allocation Schedule to determine each District's share of the costs of each Project. The Non-Participating District(s)' share shall be allocated to the Participating Districts based upon the allocation of the total costs. FOR EXAMPLE: if the projected Project costs are$500,000 and the Cost Allocation Schedule indicates the following allocations for the designated project: District No. 1 -50%or$250,000; District No. 2 -25%or$125,000;and District No. 3 -25%or$125,000. These allocations shall be referred to herein as each District's"Project Share." Assuming that District No. 1 and District No.2 are the only Participating Districts, District No. l's and District No. 2's Adjusted Project Shares(defined below) shall be calculated as follows:Participating District's Project Share + [Participating District's Project Share/Total of Participating Districts'Project Shares x each Non-Participating District's Project Share] (for District No. 1: 50%+ [(50%/75%x 25%)= 16.67%] =66.67%or$83,750); (for District No. 2: 25%+ [(25%/75%x 25%) = 8.33%] = 33.33%or$41,250). The adjusted shares shall be referred to herein as each Participating District's"Adjusted Project Share." In accordance with Section 4 herein, District No. 3 will have an obligation to reimburse District No. 1 for 16.67%of the costs of the Project or$83,750 and an obligation to reimburse District No. 2 for 8.33% of the costs of the Project or$41,250. The Project Manager shall note the Non-Participating District's reimbursement obligation on the Cost Recovery Schedule set forth in Exhibit C attached hereto and incorporated herein by this reference. • (ii) Design Engineering. Upon designation of the Project Manager, the Districts,in consultation with the Project Manager shall select an engineer to design the Project. Fees of the design engineer for the Project are included in the Cost Allocation Schedule. Design for the Project shall comply with all applicable federal,state and local statutes,rules, ordinances and construction standards,specifically including those of the Town. Upon completion of the design for the Project,the same shall be delivered to the Non-Participating Districts for review and comment. The Non-Participating Districts shall have no right to object to the design so long as the same conforms with Town standards,but shall have the right to request upgrades or modifications to the design,provided that such modifications or upgrades, inclusive of increased design and construction costs, shall be borne solely by the requesting Non- Participating District and shall be funded upon initial funding of the Construction Escrow in accordance with Subsection(v)below. (iii) Design Escrows. Simultaneously with authorizing the Project Manager to proceed with the design phase,the Participating Districts shall fund the estimated design and related project management costs in an interest-bearing escrow("Design Escrow") in accordance with their respective Adjusted Project Share. The Design Escrow shall be deposited with Land Title Guarantee Company(the"Escrow Agent")pursuant to an escrow agreement ("Design Escrow Agreement")for the purpose of funding the required project management, engineering and design services for the Project. The Project Manager shall make all periodic withdrawals and payments from the Design Escrow and shall provide the Participating Districts with a monthly accounting of active contracts,payments and the balance of funds remaining in the Design Escrow. Funding shortfalls shall be funded by the Participating Districts, from time to time, on a proportional basis in accordance with their respective funding obligations. The (00013370.DOC v:41 4 Project Manager shall promptly reconcile the Design Escrow at the end of the Project and any excess funds remaining in the Design Escrow shall promptly be proportionately refunded to the Participating Districts. (iv) Bidding, Construction Contracts. Promptly upon completion of the design for the Project,the Project Manager shall publicly bid the Project pursuant to applicable law. Drafts of the proposed construction contract(s) shall be transmitted to the Non-Participating Districts for review and comment; provided that, in the event of any controversy or disagreement regarding the terms or conditions of the construction contract(s),the determination of the Project Manager shall be dispositive. The construction contract(s) for the Project shall comply with all applicable federal,state, and local statutes,rules,regulations and ordinances,specifically including the bidding requirements of state statutes, and any requirements of the Town. (v) Construction Escrows. With respect to each Project,promptly upon receipt of bids for each applicable construction project by the Project Manager and prior to the award of a contract for any such Project, the Participating Districts shall fund an interest- bearing escrow("Construction Escrow")with the estimated construction cost in accordance with their respective Adjusted Project Share. The Construction Escrow shall be deposited with the Escrow Agent pursuant to an escrow agreement("Construction Escrow Agreement") for the purpose of funding the construction costs for such projects. The Project Manager shall make all periodic withdrawals and payments from the Construction Escrow and shall provide the Participating Districts with a monthly accounting of active contracts,payments,retainage and the balance of funds remaining in the Construction Escrow. The Participating Districts shall mutually cooperate to review and agree upon any change orders, amendments to contracts and/or amendments to project budgets as may be suggested by the Project Manager or deemed necessary by the Participating Districts. Funding shortfalls shall be funded by the Participating Districts, from time to time, on a proportional basis in accordance with their respective funding obligations. The Project Manager shall promptly reconcile the Construction Escrow at the end of each respective project and any excess funds remaining in the Construction Escrow designated for such project shall promptly be proportionately refunded to the Participating Districts. Upon reconciliation,the Project Manager shall submit to the Non-Participating District(s)a final allocation of all costs related to the Project, including the design, engineering and project management costs, and a calculation of the amounts owed by the Non-Participating District(s)to each of the Participating District(s). (vi) Cost Recovery. Each of the Districts acknowledges and agrees that the Shared Facilities will provide a substantial benefit to its residents and users. Accordingly,with respect to any Project, any District that is a Non-Participating District shall be bound by the provisions of this Section(3(b)(vi). Upon reconciliation of the costs for each Project, the Non-Participating District shall be deemed to have incurred a multi-fiscal year obligation to repay the Participating Districts in accordance with the allocation, plus °lo interest. The Non-Participating District shall not have the authority to issue general obligation bonds or any other financial obligations whatsoever until the financial obligation to pay its Project Share, including interest thereon, is paid in full, except that the Non-Participating District shall have the authority to issue Developer Bonds or Non-Developer Bonds (as defined in its respective Service Plan, and subject to the limitations and conditions contained in its Service Plan) if all or a portion of the proceeds of such Developer Bonds or Non-Developer Bonds are (00013370.DOC v:4} 5 allocated and restricted to pay the total Project Share,plus interest for such Non-Participating District,which obligation shall be verified by District Certificate to the Participating District(s) executed at the closing of the Developer Bonds or Non-Developer Bonds. 4. Effectuation of Pledge: Appropriation. Except as limited hereunder,the amounts to be paid hereunder by the Districts to pay each District's share of the Shared Facilities costs are hereby appropriated for that purpose,and said amounts shall be included in the annual budgets and the appropriation resolutions or measures to be adopted orpassed by the Boards of Directors of the Districts. The Districts acknowledge that their funding obligations under this Agreement are absolute, irrevocable,unconditional,and irrepealable within the meaning of Article XI, Section 6 of the Colorado Constitution. The Districts agree that,notwithstanding any fact,circumstance, dispute, or any other matter,they will not take or fail to take any action which would delay payment to the Participating Districts. 5. Representations. In addition to the other representations,warranties, and covenants made by the Districts herein, the Districts make the following representations, warranties,and covenants to each other and the Developer: (a) Each District has the full right,power,and authority to enter into,perform, and observe this Agreement. j (b) Neither the execution of this Agreement,the consummation of the transactions contemplated hereunder,nor the compliance with the terms and conditions of this Agreement by any District will conflict with or result in a breach of any terms,conditions,or provisions of, or constitute a default under any agreement, instrument, indenture,judgment, order, or decree to which any District is a party or by which the District is bound. (c) This Agreement is the valid and binding obligation of each of the Districts and is enforceable in accordance with its terms. (d) The Districts shall keep and perform all of the covenants and agreements contained herein and,except in the Event of Default(as hereinafter defined)], shall take no action which could have the effect of rendering this Agreement unenforceable in any manner. 6. Event of Default; Remedies. (a) Default. The occurrence of any one or more of the following events, and/or the existence of any one or more of the following conditions shall constitute an event of default("Event of Default")under this Agreement. (i) The failure of any District to make any payment when the same shall become due and payable as provided herein; (ii) The failure to perform or observe any other covenants, agreements, .� or conditions in this Agreement on the part of any District and to cure such failure within thirty (30)days of receipt or notice from any of the other Districts of such failure,unless such default, (000u37o.Doc v:4} 6 by its nature, cannot be cured within a thirty(30) day period, in which event the defaulting party shall have an extended period of time to complete the cure,provided that action to cure such default is commenced within said thirty(30)day period and the defaulting party is diligently pursuing the cure to completion; or (iii) The filing of a voluntary petition under federal bankruptcy or insolvency laws by any District or the appointment of a receiver for any of any District's assets which is not dismissed within thirty(30)days of such filing or appointment. (b) Remedies. Upon the occurrence of an Event of Default, the Districts shall have the following rights and remedies: (i) The non-defaulting District(s)may ask a court of competent jurisdiction to enter a writ of mandamus to compel the Board of the defaulting District to • perform its duties under this Agreement,and/or to issue temporary and/or permanent restraining orders, or orders or specific performance,to compel the defaulting District to perform in accordance with this Agreement. (ii) The non-defaulting District(s)may protect and enforce their rights under this Agreement by such suits,actions,or special proceedings as they shall deem appropriate, including,without limitation,any proceedings for the specific performance of any covenant or agreement contained herein, for the enforcement of any other appropriate legal or equitable remedy,or for the recovery of damages,including attorneys' fees and all other costs and expenses incurred in enforcing this Agreement. (iii) In any action brought under this Agreement,the Court shall award reasonable attorneys' fees and costs to the prevailing party. (iv) To foreclose any and all liens in the manner specified by law. 7. Assignment. The rights and obligations within this Agreement shall not be assigned nor delegated by any District without the prior written consent of the other Districts and of the Town. Any purported attempt to assign the rights or delegate the duties herein in violation of this Section shall be null and void. 8. No Third Party Beneficiaries. It is expressly understood and agreed that enforcement of the terms and conditions of this Agreement, and all rights of action relating to such enforcement, shall be strictly reserved to the Districts and nothing contained in this Agreement shall give or allow any such claim or right of action by any other third party on such Agreement. It is the express intention of the Districts that any person other than the Parties receiving services or benefits under this Agreement shall be deemed to be an incidental beneficiary only. However,the provisions of this Section 8 are subject to the Town's right to consent to any assignment or delegation as provided under Section 7 hereof. 9. Amendment. This Agreement may be modified or amended,in whole or in part, only by an agreement in writing duly executed by all of the Districts. 6. toaouno.D0C v:4} 7 N 10. Waiver. The waiver of any breach of this Agreement by any District shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or another provision of this Agreement. 11. Notices. Any notices or communications required or permitted by this Agreement or by law to be served on,given to,or delivered to any of the Districts,by any other District, shall be in writing and shall be deemed duly served,given,or delivered when personally delivered to the District to whom it is addressed or in lieu of such personal services, upon receipt in the United States mail,first-class,postage pre-paid, addressed to: District No. 1 The Hills Metropolitan District No. 1 District No. 2 The Hills Metropolitan District No. 2 District No. 3 The Hills Metropolitan District No. 3 With a copy to: Darlene Sisneros McGeady Sisneros,P.C. 1675 Broadway, Suite 2100 Denver,CO 80202 Any District may change its address for the purpose of this Section by giving written notice of such change to the other Districts in the manner provided in this Section. 12. Entire Agreement;Relationship to Service Plans and Town IGA; Other Rights and Obligations to Construct Improvements. This Agreement constitutes the entire agreement between the Districts relating to the costs of Shared Facilities and sets forth the rights,duties and obligations of each District to the other as of this date. Notwithstanding the foregoing,and notwithstanding any other provisions of this Agreement,in the event of any conflict or inconsistency between any provision of this Agreement and any provision of the Service Plans or the Intergovernmental Agreements between the Town and each of the Districts(collectively,the"Town IGAs"), the provisions of the applicable Service Plan or Town IGA, as the case maybe, shall be controlling. Without limiting the generality of the immediately preceding sentence: (a) All financial obligations of any District contemplated by this Agreement shall constitute"Cost-Sharing Obligations"as defined and provided in the Service Plans; shall be subject to all applicable restrictions,conditions and limitations set forth in the Service Plans; and, (00013370.DOC v4) 8 as to all shared sources of security,shall be subordinated to all Non-Developer Bonds and superior to all Developer Bonds of that District; and (b) The Districts and the Developer acknowledge the provisions of Article VI of the Service Plans and further acknowledge the Developer's overriding obligations with respect to public improvements as referenced in said Article VI. Nothing in this Agreement shall be construed to relieve or substitute for Developer, landowner or subdivider obligations to construct public improvements for the Development or to provide letters of credit to assure completion thereof pursuant to Town ordinances,resolutions,rules,regulations and policies and annexation, subdivision and other applicable agreements. Nothing in this Agreement shall be construed to prohibit the Developer or any District from electing to independently fund and construct any public improvement(consistent with applicable provisions of the Service Plan, the Town IGA, and other Town agreements,ordinances,resolutions, rules,regulations and policies), including any of the Shared Facilities,without invoking the provisions of this Agreement. 13. Severability. If any provision of this Agreement is determined to be unenforceable or invalid,the unenforceable or invalid part shall be deemed severed from this Agreement,and the remaining portions of this Agreement shall be carried out with the same force as if the severed portions had not been part of this Agreement. 14. Controlling Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, and any disputes hereunder shall be tried in the State of Colorado. 15. No Waiver. No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provisions of this Agreement,nor shall such waiver constitute a continuing waiver unless otherwise expressly provided herein nor shall the waiver of any default hereunder be deemed a waiver of any subsequent default hereunder. THE HILLS METROPOLITAN DISTRICT NO. 1, a quasi- municipal corporation and political subdivision of the State of Colorado By. — ATTEST: By. ,Secretary (00013370.DOC v:4} 9 [SIGNATURE PAGE FOR INTERGOVERNMENTAL AGREEMENT] THE HILLS METROPOLITAN DISTRICT NO.2, a quasi- municipal corporation and political subdivision of the State of - Colorado By: ATTEST: By. , Secretary a. {00013370.DOC v:4} 10 [SIGNATURE PAGE FOR INTERGOVERNMENTAL AGREEMENT] THE HILLS METROPOLITAN DISTRICT NO.3, a quasi- municipal corporation and political subdivision of the State of Colorado By: ATTEST: By ,Secretary (00013370.DOC v:4} 11 [SIGNATURE PAGE FOR INTERGOVERNMENTAL AGREEMENT] SADDLEBACK HILLS LAKE & CONSERVANCY LIMITED LIABILITY COMPANY By: ATTEST: By: ,Secretary {00013370.DOC v:4} 12 [SIGNATURE PAGE FOR INTERGOVERNMENTAL AGREEMENT] SADDLEBACK HILLS LAKE AND CONSERVANCY#2 LLC By: ATTEST: By , Secretary r.' {00013370.DOC v:4} 13 EXHIBIT A ("Cost Allocation Schedule") • -a (00013370.DOC ra) 15 ) 1 Ii i / I i f 1 I I 1 1 I f } 1 7 1 IBAOCLLnACK ILLSE LAKE UID col lsnyacY'FAC .SERA[ TILLSLL!!Ti ,COHSE NEERE ESTIMATE OF ANTICIPATED 9 COL3ACK 1 LAKE 000 9GVAI Y METRO msTmcTCort9 /I UIOVEFAt ESTIMATE Of ANNCMATW SIOOEFR•S ESTIMATE OF ANTKMATRO LOTS Tn 1a.°% loos Taos LEM. TORO ROINCT COSTS I] TOPOOMTRICT MATE I] • LOTS wubEAl,i,(•11 VLUAOO K tMM&IlM , IM LOTS Ca"mrolm • STREET EXCAVATIOt1OFF RITE TOTAL COST STREET EXCAVATIONOFRbbTE • TOTAL Dort TRRKtEXCAVATION OFF MBE tw • TOTALCOST WATER TOTAL COsr - • I ,l5MT WATER flr,Kl,w p Tpt,l MT TOTAL COST STORMMIAUu0 TOTAL COCar norm DKAPIACE '��NNSS'°I 1.113,714.00• hTNIngST MOM ORAIRAOE TOTAL COOT OA9,O PF1OCA • FOR PUBLIC IYPROVRENiB TOTAL COST . -. •a NELO . :RP .]• - i° EM MEd YN-: T. 1 CO. . 9,. .00 ..a V N RO''' TOTAL COST 9TREHgBAF£TT PROTECTION TIMMER•• We 1151,000.03TOTALroLT •SISMTS/fAF9TY PROTECTION TOTAL OST BtACME!BAFETT PROTECTION ST tl.S.I],lit TOTAL CO PARES APEcxEAlgN TOTAL cost PUSS A RECREATION SI TRIAL SEISatao TOTALCOST PARKS EMENDATION • p1IMATI TOTAL COST PROpp51D11ALFEES TOTACOST ROFtMpNALFEEE iurearr• TOTAL COST pROFTb1SIONAL PEeB tRI,TM.tt . TOTAL COST I ERGALPROJECT COSTS 90WuxT II Y/oB,m. R[II Irma 1,�L PROJECT eTd�BU OENEPALPROJ?CT COSTS SL TOTAL CCITT RUT TOTALCOrt °WATER PX°AYAibN OFFRRL TOTAL DORT wATSp MM,W WATER IRDAYAIIONOFPUTE 111M1 STRUT EXCAVATION DEPUTE TIT,MBAE It,TOE,NE1] NATB1 STORMESAM SAFETY Il,am,14 STOMA IMMURE II. WATER IIIIT EAR STREETS AEC BAMIIY PROTECTION ISM,NB.. enniEgASIACa MF,MS.m PMKBLPRCpGTUN /L'BLL'M1 PARKS REBTR RECREATION 3AFEIT lRO7G'w°N i1,T]O STHSETLu1D SLEEK(PROTECTION STLFXMOO n.01T,113t1I A RECREATION HTI,TN.Ti CABAiES ESTIMATED LCONBTFon UCTIONC$]EMS II.Mf,MI.-. OAS L OIL RELOCATION FOR Katie IYDROVsini e• ' Tt1M,MKa PACKS A HECREATION • EeTIRATEn TOTALCOHTOAUMIOX COLTI 11Tp1,1r1.It ESTWATEDTOTALCDNeERUCTION COSTS HM,' ,-• GAS I.OIL IELCCATION FOR PUBLIC IMPROVEMENTS IIM,En.So .. 14M EBTETATED TOTAL c°WTRUCTKIN OO9n -!'{TM,]MJl PRbP6UENM,FEES MIME - niePl1BIOWLP® °TUX PNOPSUOWLPEo iIT1Aro.m PROJECTabiciAeg 15% I%OF CONSTRUCTION COME IMKios]1 PROJECT WNAOFMUITSY 0?OOIUTIIUOTIONroTOE MI1A1B - PROJECT gUMOEUU1T a%OF CONHiROCIIOII COSTS • ilsteoIIIRSI1-IT CONTEUUMATSO% wilawmi CoNRNCISUIEB NY IIXM,TIB,. CMITIMUMIEI 11% MAWS eAI1WTm ADOOIOWLCortU M,IIK ESrIIIAT®AOMmN LCOMM M,U13111 ESTIMATED 15% 111ONAL COSTS, MNAM.SS DWELT ItCOTO ULTIMATE: • MI,1M7N. ' METRIC'?IS CO!TEBTTIIAT6 S1 j AM,MI DISTRICT SI COST ESTINATEI 52,151,41.95 I1ITREKTTn.N • • E30.101,180.23 , Construction costs for District No. 1 improvements Construction costs for District No.2 improvements Construction costs for District No.3 improvements are forecasted to total$21,154,778 and are are forecasted to total$11,099,525 and are are forecast to total$2,752,470 and are forecasted forecasted to be paid from 2004 through 2006. forecasted to be paid from 2004 through 2008. The to be paid in 2007. District No.1 will seek reimbursement of 45%of District will seek reimbursement of 30%of such such costs from other districts which benefit from costs from other districts which benefit from the In addition,District No.3 is forecasted to pay 30% the improvements as follows: improvements as follows: of the cost of regional improvements incurred by other districts as follows: The Hills Metropolitan District#2—15%or The Hills Metropolitan District#3—30%or The Hills Metropolitan District#1—30%or $3,173,217 in 2005 $3,329,858 in 2006 P $6,346,433 in2006 The Hills Metropolitan District#3—30%or In addition,District No.2 is forecasted to pay 15% • 36,346,433 in 2006 of the cost of regional improvements incurred by The Hills Metropolitan District#2—30%or other districts as follows: $3,329,858 in 2006 ' The Hills Metropolitan District#1-15%or $3,173,217 in 2005 EXHIBIT B ("Promissory Note") [Form of Note] PROMISSORY NOTE 200_ For value received,THE HILLS METROPOLITAN DISTRICT NO. , a quasi- municipal corporation and political subdivision of the State of Colorado("Maker"),promises to pay to the order of THE HILLS METROPOLITAN DISTRICT NO. ("Holder"),the principal sum of Dollars($ )(the"Principal Sum"), together with interest thereon at the rate of percent( %)per annum. No payments of principal or accrued interest shall be payable until the date Maker issues (Developer Bonds or Non-Developer Bonds(as defined in the Maker's Service Plan,dated ,200 )("Payment Date"); except that,if not sooner paid,the outstanding principal balance and all accrued interest thereon shall be due and payable in full on or before ("Maturity Date"). Immediately upon the Payment Date or Maturity Date,the outstanding principal balance and all accrued interest thereon shall be due and payable in full. Interest accrued hereunder through the date of payment in full hereof • shall be calculated on the basis of a 360-day year of twelve 30-day months. _ Payment of principal and interest due and payable hereunder shall be made to Holder at such place as Holder shall have designated to Maker in writing. This Note evidences certain obligations of The Hills Metropolitan District No. to The Hills Metropolitan District No._arising under that certain Intergovernmental Cost Sharing and Recovery Agreement between The Hills Metropolitan District No. 1,The Hills Metropolitan District No. 2 and The Hills Metropolitan District No. 3,dated • ("IGA"). Reference is made to the IGA for the rights and obligations of This Note may be prepaid,in whole or in part, at any time without penalty and without consent of Holder. Time is of the essence hereof. This Note shall be construed and enforced in accordance with the laws of the State of Colorado. • [The Maker may issue bonds,notes,debentures or other multiple fiscal year financial obligations for which the obligation to repay is on a parity with the obligation evidenced by this 100013370.DOCv:4} 16 Note("Parity Bonds")only if upon issuance of the Parity Bonds the Debt to Assessed Ratio' of the Maker will be fifty percent(50%)or less. Subject to applicable requirements of its Service Plan,the Maker may issue junior or subordinate financial obligations at any time.] IN WITNESS WHEREOF,Maker has caused this instrument to be executed as of the day and year first above written. MAKER THE HILLS METROPOLITAN DISTRICT NO. President and Chairman (SEAL) Al LEST Secretary THIS NOTE HAS BEEN ISSUED TO THE HILLS METROPOLITAN DISTRICT NO. AS HOLDER,IS TO BE HELD SOLELY BY THE HILLS METROPOLITAN DISTRICT NO. ,AND IS NOT TO BE TRANSFERRED,ASSIGNED, PARTICIPATED OR USED AS SECURITY FOR ANY BORROWING [End of Form of Note] Debt to Assessed Ratio is defined as the ratio derived by dividing the then-outstanding principal amount of all District debt(as defined in the Service Plan),including the debt proposed to be issued,by the assessed valuation of the District,as such assessed valuation has been most recently certified by the county treasurer. (00013370.DOC v:4) 17 EXHIBIT C ("Cost Recovery Schedule") DATE PROJECT PROJECT SHARES Dist.No. 1 Dist. No.2 Dist.No.3 a (00013370.DOC v.4} 18 r' L • • r L:. `` EXHIBIT Q Mill Levies of Overlapping Entities — THE HILLS METROPOLITAN DISTRICT NO.1 OVERLAPPING MILL LEVY STATEMENT JUNE 22,2004 TOTAL OVERLAPPING MILL LEVY Vacant Land Taring Entity 2003 Mill Levy Weld County 21.474 B School District RE 1J 40 374 Northern Colorado Water Conservancy District 1.000 Central Weld County Water District 0.000 Town of Firestone 7.419 Frederick Area Fire Protection District 9.560 Weld County Library = 3.249 Tri Area Ambulance District 4.543 The Hills Metropolitan District No.1 40.000 TOTAL 127.619 l - D F t00012883.DOC r.3) I LJ EXHIBIT R Resolution of Approval .- (00012883.DOC r.31 • TOWN OF FIRESTONE, COUNTY OF WELD, STATE OF COLORADO IN RE THE ORGANIZATION OF THE HILLS METROPOLITAN DISTRICTS NOS. 1, 2 AND 3, IN THE TOWN OF FIRESTONE, COUNTY OF WELD, STATE OF COLORADO RESOLUTION NO. 04-40 RESOLUTION OF APPROVAL WHEREAS, pursuant to the provisions of Title 32, Article 1, Part 2, C.R.S. as amended, the Board of Trustees of the Town of Firestone, County of Weld, State of Colorado, following due notice, held a public hearing on the proposed Service Plans for The Hills Metropolitan Districts, Nos. 1, 2 and 3, which hearing was opened on August 26, 2004 and concluded on September 16, 2004; and WHEREAS, the Board of Trustees has considered the Service Plans and all other testimony and evidence presented at the hearing; and WHEREAS, based upon the testimony and evidence presented at the hearing, it appears that the Service Plans for The Hills Metropolitan Districts, Nos. 1, 2 and 3, should be approved — by the Board of Trustees, subject to certain conditions set forth below, in accordance with • Section 32-1-204.5(1)(c), C.R.S. - THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO: Section 1. That the Board of Trustees, as the governing body of the Town of Firestone, Colorado, does hereby determine, based on representations by and on behalf of Saddleback Hills Lake & Conservancy Limited Liability Company, a Colorado limited liability company, and Saddleback Hills Lake and Conservancy #2 LLC, a Colorado limited liability company (collectively the"Developers"), that all of the requirements of Title 32, Article 1, Part 2, C.R.S., as amended, relating to the filing of the proposed Service Plans for The Hills Metropolitan Districts, Nos. 1, 2 and 3 have been fulfilled and that notice of the hearing was given in the time and manner required by the Town. Section 2. That, based on representations by and on behalf of the Developers, the Board of Trustees of the Town of Firestone, Colorado, has jurisdiction over the subject matter of these proposed special districts pursuant to Title 32, Article 1, part 2, C.R.S., as amended. Section 3. That, pursuant to Section 32-1-204.5, C.R.S., Section 32-1-202(2), C.R.S., and Section 32-1-203(2), C.R.S., the Board of Trustees of the Town of Firestone, Colorado, does hereby find and determine, based on the Service Plans and other evidence presented by and on behalf of the Developers, that: 1 (a) There is sufficient existing and projected need for organized service in the areas to be serviced by the proposed Districts; (b) The existing service in the areas to be served by the proposed Districts is inadequate for present and projected needs; (c) The proposed special districts are capable of providing economical and sufficient service to the areas within their proposed boundaries; (d) The area to be included in each of the proposed Districts has, or will have, the financial ability to discharge the proposed indebtedness on a reasonable basis; and (e) The creation of the proposed Districts will be in the best interests of the areas proposed to be served. Section 4. That pursuant to Section 32-1-204.5(1)(c), C.RS., the Board of Trustees hereby imposes the following conditions upon its approval of the Service Plans: (a) The Developers agree that the Town Attorney will be given reasonable notice of all proceedings in the District Court of Weld County relating to the organization of the Districts (including notice as described in Section 32-1-304, C.12_S.). • (b) The Developers agree that, prior to the hearing date set by the District Court of Weld County pursuant to Section 32-1-304, C.R.S., all fees and expenses which have been submitted to the Developers for payment by or on behalf of the Town or its attorneys or financial or other advisors shall have been paid in full. (c) Prior to the hearing date set by the District Court of Weld County pursuant to Section 32-1-304, C.R.S., the Districts shall fully comply with the provisions of Section 32-1-107(3), C.R.S. with respect to the overlapping of service areas. Each District's authorization to provide services or facilities within any overlapping area is expressly conditioned upon the District first obtaining the written consent of each and every district whose service area is so overlapped. (d) Prior to the Mayor's execution of this Resolution, the fully and properly executed originals of the following documents will be submitted for each of the three proposed Districts: the engineer's statement of reasonableness of capital costs; accountant's letters and forecasts; letter in support of market projections and absorption rates; underwriter's letter; legal counsel letters; bond counsel letter, and Developers' indemnity letters that are required under the Service Plans and set forth in Exhibits C,H,J,K, L, and S to the Service Plans, shall be provided to the Town. (e) At its organizational meeting, each of the Districts shall execute its respective District indemnity letters, the intergovernmental agreement with the 2 • Town ("Town IGA") and the intergovernmental cost sharing and recovery agreement ("District IGA") that are required under the Service Plans and set forth in Exhibits L, P and O to the Service Plans(and, in the case of the District IGA, in the form approved by the Town), and shall provide the fully executed originals of the District indemnity letters and the Town IGA, and a copy of the fully executed District IGA,to the Town. If any of the above-stated conditions (a) through (d) are not met, the Town may file a motion with the District Court of Weld County requesting that the hearing on the organization of the Districts be delayed until such conditions are met, and Developers have represented that they will not oppose such motion. Further, if any of the above-stated conditions (a) through (e) are not met, the Town may pursue all legal and equitable remedies available to it for failure of compliance with such conditions of approval. Section 5. That the Service Plans of The Hills Metropolitan Districts, Nos. 1, 2 and 3, as • set forth in Exhibit A to this Resolution and dated September 13, 2004, are hereby approved — subject to the conditions stated in Section 4 above, in accordance with Section 32-1-204.5(1)(c), C.R.S., and subject to the revisions set forth in Exhibit B. Section 6. That a certified copy of this Resolution be filed in the records of the Town of Firestone and submitted to the Developers for the purpose of filing in the District Court of Weld County for further proceedings concerning The Hills Metropolitan Districts,Nos. 1, 2 and 3. /4A RESOLVED,ADOPTED AND APPROVED this lb day of September, 2004. — //'ICI • Nr; TOWN OF NE, COLORADO / e TOWN f(SSEA) • _ \$\ATTEST: ;° Michael P. Simone Mayor i%y He: - o'/d own Clerk 9/172004239 PM{sjlj Y:IFira one Menopdimn Disuicu\Thc Hills\ApprovalReedurion(final) 3 CERTIFICATE I, Judy Hegwood, Town Clerk of the Town of Firestone, Colorado, do hereby certify that the above and foregoing is a true, correct and complete copy of a resolution adopted by the Board of Trustees of the Town of Firestone, Colorado, at a public meeting held on the day of September, 2004. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the Town of Firestone, Colorado, this day of September, 2004. (SEAL) Town Clerk • EXHIBIT A (Copy of Service Plans) 5 EXHIBIT B REVISIONS TO THE HILLS METROPOLITAN DISTRICT NOS. 1,2 AND 3 SERVICE PLANS (Firestone Board of Trustees Meeting, September 16, 2004) DISTRICT NO. 1 SERVICE PLAN: 1. On page 4, last line, delete"It is anticipated that". 2. On page 7, line 3, after"Service Plan"insert"otherwise". 3. On page 7, line 11, after"approved" insert"final". 4. On page 10, line 3, substitute"To the extent" for"If". 5. On page 10, line 22, insert"prior written"before"approval". 6. On page 11, line 1, after"Section" insert"II.A.5". 7. On page 16, lines 20-21, strike"and District IGA". 8. On page 17, revise the fourth sentence to read in full as follows: "A draft of the District IGA is set forth in Exhibit P; the final form of the District IGA shall be subject to review and approval by the Town prior to execution by the Districts." 9. On page 18, line 4, after"Town" insert a comma. 10. On page 18, line 7, substitute"a non-potable raw water irrigation" for"such a". _ 11. On page 21, line 15, after"repayment of the"insert"District's". 12. On page 22, line 2, change"$3,155,256"to"$3,173,216". 13. On page 22, line 3, after"be applied toward repayment of the"insert "District's". 14. On page 29, strike the last two lines on the page and substitute the following: "except that (a) for Secured Bonds issued at a variable interest rate for interest periods longer than weekly, the maximum net effective interest rate shall be twelve percent (12%) per annum; and (b) for Secured Bonds issued at a variable interest rate for weekly or shorter interest periods, the maximum net effective interest rate shall be eighteen percent (18%) per annum. For all Non-Developer Bonds, the maximum discount shall be four percent(4%)per annum." 15. On page 33, line 14, in caption, after"Debt Service"insert"and Administrative". 16. On pages 36 through 38,revise Section V.G. to incorporate the revisions shown in the redline version attached as Exhibit B-1. 17. On page 42, line 6, insert the following after "Improvements": ", including but not 6 limited to a detailed report of the status of the Saddleback Park Improvements completed in the preceding year and planned for the upcoming year and identification of which entity (District(s) or Developer) has completed or will be completing such Improvements." 18. On page 49, line 9, after "District IGA" insert "(in the form of the District IGA as reviewed and approved by the Town)". 19. On Exhibit H, submit revised spreadsheets and notes to correct internal inconsistencies and errors; such submittal shall be subject to Town review and approval prior to the hearing date set by the District Court of Weld County pursuant to Section 32-1-304, C.R.S. 20. In Exhibit O, revise Section 10 of Town IGA to incorporate and reflect redline changes to Section V.G of Service Plan, as set forth in Exhibit B-I. DISTRICT NO. 2 SERVICE PLAN: 21. On page 4, last line, delete"It is anticipated that". 22. On page 5, line 15, in caption, add"; Consolidation"to end of caption. 23. On page 7, line 12, after"approved"insert"final". 24. On page 10, line 5, substitute"To the extent"for"If'. 25. On page 11, line 2, insert"prior written"before"approval". 26. On page 11, line 4, after"Section"insert"II.A.5". 27. On pages 16-17, last line of 16 to first line of 17, strike "and District IGA". 28. On page 17, revise the fourth full sentence to read in full as follows: "A draft of the District IGA is set forth in Exhibit P; the final form of the District IGA shall be subject to review and approval by the Town prior to execution by the Districts." 29. On page 18, line 4, after"Town"insert a comma. 30. On page 18, line 7, substitute "a non-potable raw water irrigation" for"such a". 31. On page 22, line 19, substitute "Property" for"Development." 32. On page 29, strike lines 3 and 4 on the page and substitute the following: "except that (a) for Secured Bonds issued at a variable interest rate for interest periods longer than weekly, the maximum net effective interest rate shall be twelve percent (12%) per annum; and (b) for Secured Bonds issued at a variable interest rate for weekly or shorter interest periods, the maximum net effective interest rate shall be eighteen percent (18%) per annum. For all Non-Developer Bonds, the maximum discount 7 shall be four percent(4%) per annum." 33. On page 32, line 18, in caption, after"Debt Service" insert"and Administrative". 34. On pages 35 through 37, revise Section V.G. to incorporate the revisions shown in the redline version attached as Exhibit B-1. 35. On page 41, line 8, insert the following after "Improvements": ", including but not limited to a detailed report of the status of the Saddleback Park Improvements completed in the preceding year and planned for the upcoming year and identification of which entity (District(s) or Developer) has completed or will be completing such Improvements. 36. On page 48, line 13, after "District IGA" insert "(in the form of the District IGA as reviewed and approved by the Town)". 37. On Exhibit H, submit revised spreadsheets and notes to correct internal inconsistencies and errors; such submittal shall be subject to Town review and approval prior to the hearing date set by the District Court of Weld County pursuant to Section 32-1-304, C.R.S. 38. In Exhibit O, revise Section 10 of Town IGA to incorporate and reflect redline changes to Section V.G of Service Plan, as set forth in Exhibit B-1. DISTRICT NO. 3 SERVICE PLAN: 39. On page 4, last line, delete "It is anticipated that". 40. On page 5, line 15, in caption, add`; Consolidation"to end of caption. 41. On page 7, line 12, after"approved"insert"final". 42. On page 10, line 5, substitute"To the extent" for"If'. 43. On page 11, line 2, insert"prior written"before "approval". 44. On page 11, line 4, after"Section"insert"II.A.5". 45. On page 11, line 5, make "Article"plural. 46. On page 11, line 15,delete"s" in`modifications". 47. On page 16, line 8, add following two sentences after"Improvements": "As set forth in Exhibit C, the estimated cost of the Improvements exceeds the amount of debt anticipated to be issued in accordance with the Financial Plan. To the extent that the costs of the Improvements cannot be financed with bond proceeds, the Developer shall be required to pay such costs, as set forth in Article V." 48. On pages 16, lines 18-19, strike"and District IGA". 8 49. On page 17, revise the third full sentence to read in full as follows: "A draft of the District IGA is set forth in Exhibit P; the final form of the District IGA shall be subject to review and approval by the Town prior to execution by the Districts." 50. On page 17, line 20, after"Town" insert a comma. 51. On page 17, line 23, substitute"a non-potable raw water irrigation" for"such a". 52. On page 21, line 16, correct "form"to"from". 53. On page 26, line 5, correct "8,650,000" to "8,865,000". 54. On page 27, revise last two full sentences on such page to reflect fact that Hills No. 3 is a non-residential district, consistent with revised letter required by the Exhibit J condition below. 55. On page 28, strike last two lines and substitute the following: "except that (a) for Secured Bonds issued at a variable interest rate for interest periods longer than weekly, the maximum net effective interest rate shall be twelve percent (12%) per annum; and (b) for Secured Bonds issued at a variable interest rate for weekly or shorter interest periods, the maximum net effective interest rate shall be eighteen percent (18%) per annum. For all Non-Developer Bonds, the maximum discount shall be four percent(4%)per annum." 56. On page 32, line 14, in caption, after"Debt Service" insert "and Administrative". • 57. On pages 35 through 37, revise Section V.G. to incorporate the revisions shown in the redline version attached as Exhibit B-1; additionally, revise reference to "2005 and 2008"to"2006 and 2009". 58. On page 41, line 6, insert the following after "Improvements": ", including but not limited to a detailed report of the status of the Saddleback Park Improvements — completed in the preceding year and planned for the upcoming year and identification of which entity (District(s) or Developer) has completed or will be completing such Improvements. 59. On page 48, line 9, after "District IGA" insert "(in the form of the District IGA as reviewed and approved by the Town)". 60. On Exhibit H, submit revised spreadsheets and notes to correct internal inconsistencies and errors; such submittal shall be subject to Town review and approval prior to the hearing date set by the District Court of Weld County pursuant to Section 32-1-304, C.R.S. Additionally, such submittal shall reflect that the 2006 and 2009 debt issues will be limited to "Alternative A". 61. Regarding Exhibit J, provide a supplemental letter regarding criteria used in process of underwriting bonds for a non-rated commercial metropolitan district, and methods of evaluation such criteria. 9 62. In Exhibit M, page 2, substitute "three (3.0) mills" for "three and one half (3.5) mills". 63. In Exhibit O, revise Section 10 of Town IGA to incorporate and reflect redline changes to Section V.G of Service Plan, as set forth in Exhibit B-1. SERVICE PLANS FOR ALL DISTRICTS: 64. Insert form of District's Indemnity Letter into Exhibit L. 65. In Exhibit F, replace one-page Saddleback Park Improvements Phasing Plan with Phasing Plan and Phasing Map attached as Exhibit B-2. • 10 EXHIBIT B-1 REVISIONS TO THE HILLS METROPOLITAN DISTRICT NOS. 1,2 AND 3 SERVICE PLANS (Firestone Board of Trustees Meeting,September 16,2004) Redline Revisions to Section V.G of Each Service Plan: G. Revenue-Sharing Payments to Town for Public Improvements 1. Except as otherwise expressly provided in Section V.G.2 below, the District will pay to the Town for deposit into the Town's capital improvements fund twenty-three percent (23%) of the District's total net bond proceeds derived from the issuance of Non- Developer Bonds. Such amounts,shall be paid to the Town it nmediately_upon issuance and_ - {Deleted:percentages delivery of each such series of Non-Developer Bonds which, according to Exhibit H, is anticipated to occur in 2005 and 2008. The funds so paid to the Town may be used by the Town to finance any street, park or recreation capital improvement, or other capital improvement (either within or outside the boundaries of the District), which improvements the District would otherwise be empowered to construct, i.e., streets, street lighting, traffic safety controls, water, sanitary sewer, landscaping, storm drainage or park and recreation improvements and facilities, any of which improvement shall be of benefit to the Town and District as determined by the. Board of Trustees. 2. By approving this Service Plan and executing the Town IGA, the Town expressly agrees that if the Developer and/or the Districts fund the construction of or construct the Saddleback Park Improvements in accordance with the Phasing Plan,Concept Plan and other applicable provisions of the Park Agreement,Town IGA and this Service Plan,then the Certified Construction Costs (as defined below) related to construction of the Saddleback Park __- {Deleted:c Improvements shall be applied as a credit toward the Districts' satisfaction of the revenue sharing obligations set forth herein and in the Town IGA, and the provision set forth above regarding revenue-sharing amounts,,being paid to the Town upon issuance and delivery of each ....--{Deleted:percentages 1 series of Non-Developer Bonds shall be inapplicable to the extent of such credit. At least sixty,(C0) days prior to Hills No. 3's issuance of any Non-Developer `-•{Deleted:driny Bonds, the Districts shall provide the Town with documentation regarding the total costs - `•1rDeleted:3 incurred by the Developer and/or the Districts for construction of the Saddleback Park Improvements, including but not limited to architecture and design, engineering, legal fees. construction management fees, permit fees, surveying expenses, and labor and materials construction cos ("Certified •Construction Costs"), Such documentation shall include an Deleted: as certified byanindependent independent engineer's certification of the construction costs and the District's certification that engineer,which costs shay include but not be limited to hard construction costs, such documents and costs incurred are true and accurate. The Certified Construction Costs shall construction management fees,design exclude costs for construction of any local or collector streets abutting Saddleback Park fees,engineering fees,legal fees and permit costs (currently denoted as Saddleback Circle and Garland Street on the Concept Plan). The Certified Construction Costs may include utility costs only for those utilities that directly serve Saddleback Park. In the event that the Certified Construction Costs are equal to or exceed 23% of the aggregate net proceeds (after deduction of reasonable amounts for capitalized interest, reserve funds and,issuance costV of the Districts' Non-Developer Bonds previously issued and -De�:, Deleted:,and other stcidentel costs 11 to be issued as certified by the Districts' Financial Advisor ("Aggregate Net Non-Developer Proceeds"), the Districts shall be deemed to be in full compliance with the above-described Town regional improvement revenue sharing obligation and the Town shall not be entitled nor shall it seek additional participation from the Districts for regional improvements pursuant to such obligation unless otherwise provided by mutual written agreement among the Districts and _ the Town. In no event shall the calculation of Aggregate Net Non-Developer Proceeds include Developer Bonds or Refunding Bonds. Alternatively,in the event that the Certified Construction Costs are less than 23%of the Aggregate Net Non-Developer Proceeds, then,as provided in the Town IGA and the Hills No.3 Service Plan,Hills No.3 shall pay the Town an amount equal to the difference between such 23%of Aggregate Net Non-Developer Proceeds and the Certified Construction Costs from the proceeds of its first series of Non-Developer Bonds,or,if agreed by the Town,from its first and second series of Non-Developer Bonds on a pro-rata basis. Although the Developer and Districts anticipate t11,Non-Developer Bonds will . -{Deleted:issuing he issued to fund construction of Improvements or the acquisition of Improvements from the Developer, they acknowledge the possibility that the Developer or a successor or assignee thereof may elect to fully fund the Improvements and retain ownership of Developer Bonds for more than five years thereby delaying the issuance of Non-Developer Bonds. In the event that the Districts have not issued Non-Developer Bonds by the date that is, one (I) year after ,--{Deleted:ao not issue any completion and, the Town's conditional acceptance of Saddleback Park Improvements, the_ -- {De, feted:which is determined to be Districts acknowledge that the Developer A obligated pursuant to the Park Agreement to submit - Deleted:fan,,„,, the Certified Constniction Costs to the Town and to pay the Town the amount, if any,resulting Dew:wan be from deducting the Certified Construction Costs from 23%of the aggregate net proceeds of :within sixty(60)days Developer Bonds issued by any of the Districts, which shall be calculated by deducting the • Deleted:the reasonable issuance costs from the principal amount of all Developer Bonds issued by the Districts,which net amount shall be certified to the Town by the Districts'Financial Advisor. • • 12 EXHIBIT B-2 REVISIONS TO THE HILLS METROPOLITAN DISTRICT NOS. 1, 2 AND 3 SERVICE PLANS (Firestone Board of Trustees Meeting,September 16, 2004) Revised Phasing Plan and Phasing Map for Exhibit F (See Following Pages) 13 Saddleback Park Phasing Plan Page 1: Saddleback Park Improvements**, Deadlines and Estimated Costs PHASE 1 Acres 33.3 Acres Relocation of oil and gas fealties 3 Oil/gas Wells Relocation of Sinclair pipeline 1 Overlot grading TBD Seeding TBD — Estimated Cost $ 250,000 Phase 1 Completed Prior to Issuance of 152 Building Permits PHASE 2 Acres 8.7 Acres CBT Shares TBD' Shares Soccer Fields 2 Fields Parking Lot(Central) 1 Parking Lot: 100 spaces Internal Driveways TBD . 10-wide Concrete Trail As Shown Walkways, Landscaping, Irrigation TBD Signage TBD Necessary Utilities TBD Necessary Grading and Drainage TBD Restroom TBD Other Park Equipment TBD Engineer and Landscape Arch Design TBD Average Cost Per Acre $ 130,000 Estimated Cost $ 1,131,000 Phase 2 Completed Prior to Issuance of 386 Building Permits Subtotal $ 1,381,000 Phases 1 and 2 PHASE 3 Acres 12.5 Acres CBT Shares TBD' Shares Soccer Fields 1 Field Softball Fields 1 Field Parking Lot(Central) 1 Parking Lot: 150 spaces Internal Driveways TBD 10-wide Concrete Trail As Shown Walkways, Landscaping, Irrigation TBD Signage TBD Necessary Utilities TBD Necessary Grading and Drainage TBD Concession, Restroom,etc Budding TBD Other Park Equipment TBD Engineering&Landscape Arch Design TBD Average Cost Per Acre $ 130,000 Estimated Cost $ 1,625,000 Phase 3 Completed Prior to Issuance of 722 Total Building Permits Subtotal $ 3,006,000 Phases 1,2 and 3 Saddleback Park Phasing Plan Page 2: Saddleback Park Improvements"', Deadlines and Estimated Costs PHASE 4 Acres 12.1 Acres CBT Shares TBD` Shares Softball Fields 1 Field 10-wide Concrete Trail TBD Walkways,Landscaping, Irrigation TBD Signage TBD — Necessary Utilities TBD Necessary Grading and Drainage TBD Other Park Equipment TBD Engineer&Landscape Arch Design TBD Average Cost Per Acre $ 130;000 Estimated Cost $ 1,573,000 Phase 4 Completed Prior to issuance of 1,046 Building Permits Total Cost $ 4,579,000 Phases 1,2,3 and 4 •Owner shall dedicate water necessary for irrigation of turf and landscape areas identified in the final development plan for the Saddleback Park Improvements. Dedications shall be CBT units and shall be at a rate of 2.5 units per acre of irrigated turf and landscape area(1.0 units per acre for areas approved for planting of native grass)unless the Town otherwise agrees to different rates or alternative • water supplies. Dedications shall be made at or prior to the time phases are completed to allow for timely irrigation of installed turf and landscaping. **As more specifically set forth in the Park Agreement,the Saddleback Park Improvements and the Phasing Plan and Concept Plan may be modified through the final plat/final development process, and the Districts or Developer will construct the Saddleback Park Improvements as set forth on the final plat and final development plan for Saddleback Park. Further, Saddleback Park Improvements may be shifted among Phases as identified at the time of subdivision agreement, provided that the expenditures for each Phase of Saddleback Park Improvements shall be at a ' rate of$130,000 per acre for all acreage within each Phase(other than Phase 1,which shall be in the amount set forth herein,and shall not exceed the total estimated cost for each such Phase as set forth herein). (As an example,if all Improvements listed within Phase 3 cannot be completed at an expenditure rate of$130,000 per acre, then at the time of subdivision agreement,a portion of the Phase 3 Improvements may be identified for completion as part of Phase 4). I • ah� =en. / T __------— • ------------ / \ ••i•• �!e° •' r •el', . ei —� -- `mss v +;tr •� I �._. f �_ r'. r--•-tea .� , ,.. Phase 3 - `�' C1 • e�� ea I i4'i '�' 111t �-- , i i . i I • _ •� ,.� • It I � r' ) o - i 1 i ' III t Phase 2 - •, - _ _F ; 2 ■ I • C0 G x , ' • C I ; y I1 (--411. „7 O! ••i�i ;11--d-i•• ♦�i-`�* I U - a • e '-4-I sir,- ✓ ,'� , , 9� ,, _ Saddleback Park Phasing Plan Page 3: Phasing Plan Map 1 if 5 I,-----a1 I, it-.rte -Ili din -I L, el Exhibit — LIJ Concept Plan Nam 710 West Whet Maeee ! September THE VILLAGES OF SADDLEBACK HILLS aliffIl F ; °02°' 10' r`(1t1At\AI IAIITV PART! PI AMNOKRIS DULLFA Phone 303892116e EXHIBIT S Letter from Bond Counsel {00012883.DOC v:3} �' KUTAK ROCK LLP ATLANTA CHICAGO SUITE 3100 DES MOINES 1801 CALIFORNIA STREET FAYETTEVILLE IRVINE DENVER. COLORADO 80202-2626 CITY LINCOLN 303-297-240O LITTLE ROCK FACSIMILE 303-292-7799 OKLAHOMA CITY OMAHA www.kutakrock.com PASADENA RICHMOND NOALE • September 16,_7004 WASHINGTON The Hills Metropolitan Districts No. 1-3 Town of Firestone do McGeady Sisneros, P.C. P.O. Box 100 1675 Broadway 151 Grant Avenue Suite 2100 Firestone,CO 80520 Denver,CO 80202 Re: The Hills Metropolitan District We are writing this letter in our capacity as bond counsel to the proposed The Hills Metropolitan Districts No. 1-3. The Service Plans for the Districts provide that the Districts will, under certain conditions, transfer to the Town a portion of the proceeds of bonds issued by the Districts to be • used to construct certain improvements. We have been asked to confirm that this is an -- acceptable use of bond proceeds. The answer depends on how the Town intends to use the bond proceeds. There are both state law and federal tax law considerations. The Districts are specifically authorized by statute to provide public improvements both inside and outside the Districts' boundaries that have been authorized by the Districts' voters and that benefit the Districts, and to enter into intergovernmental agreements. The improvements must be of the type the Districts are otherwise permitted to provide under their Service Plans and organizational documents. Whether the Districts provide such improvements directly, or do so by contracting with the Town,does not in ow-view affect the validity of the bonds. If the interest on the bonds to be issued is to be exempt from taxation, then there are additional considerations that include public use and governmental ownership of the improvements,the timing of expenditure of the proceeds, and investment of the proceeds. These considerations are generally described in Section 11 of the Intergovernmental Agreement between the Town and the Districts, the form of which is included as Exhibit O to the Service Plans. As with all bond issues, as a condition of giving our opinion on the bonds,we would need certification as to the use and investment of all proceeds, including proceeds transferred to the Town. Such certification would have to be provided by the District and the Town. MOM 02-182261.2 KUTAK ROCK LLP September 16. 2004 Page 2 I hope this responds to your request. If you have further questions, please feel free to call me. Sincerely, KUTAK ROCK LLP Saranne K. Maxwell, Esq. OMNI 02-182261.2 Hello