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HomeMy WebLinkAbout2.01 Presentation to Planning CommissionPresentation to Garfield County Planning Commission July 28, 2010 Dianne Miller Miller Rosenbluth, LLC 700 17th Street Suite 2200 Denver CO 80202 303.285.5320 RE North, RE South and RE East Overview of special districts Statutory requirements Why are these districts needed now? Special district provisions that protect property owners and the county Required and permissive findings Rocky Shepard ◦Carbondale Investments, LLC ◦the property owner’s representative and organizer of the proposed districts Dianne Miller ◦Miller Rosenbluth, LLC ◦legal counsel to the proposed districts Sam Otero ◦8140 Partners, LLC ◦engineer for the proposed districts Bruce O’Donnell ◦Geo K Baum & Company ◦financial advisor to the proposed districts Summary of Significant Content of Service Plans Carbondale Investments proposes 3 metropolitan districts on property owned by them to serve a residential and commercial community to be known as “River Edge Development” (the “Development”) The Development consists of approximately 239.94 acres and contains commercial development, up to 1200 units of residential development including the affordable housing component required by Article 8 of the Garfield County Unified Land Use Resolution. The Districts are located between SH82 and the Roaring Fork River, south of CR113 and are bi-sected by the Roaring Fork Transportation Authority rail right-of-way The Districts shall be empowered to provide the necessary public infrastructure improvements to the Development, including water, sanitary sewer, storm drainage, streets, traffic control, park and recreation, transportation and other public facilities and services as permitted by statute The estimated cost of the improvement is $60,354,388 based on the maximum build out scenario in the Service Plans The Districts will be empowered to operate and maintain any public infrastructure not dedicated to other governmental entities. The anticipated cost of annual operations and maintenance, at full built out, is $1,500,000 per year ◦Carbondale Investments is currently re-negotiating certain terms of an existing pre-inclusion agreement with Roaring Fork Water & Sanitation District and anticipates that water and sewer services will be provided by RFW&S, although the RE Districts will remain obligated to construct all water and sanitary sewer facilities for the Development and will to operate the non-potable irrigation system A mill levy of 45.00 mills is proposed to be assessed by the Districts generating approximately $34,300 per year for each $1,000,000 of assessed value. These tax revenues will be used to pay for each of the Districts’ operation expenses, maintenance costs and debt obligations ◦35 mills is anticipated to be dedicated to the payment of bonds and 10 mills to operations A facility fee of one percent (1%) of the home sale price of each residential unit shall be assessed within the North District and the South District and is expected to produce a total of $4,983,502 through 2045 User fees will be used to assist with operations. These fees may include, but not be limited to user fees charges for use of community facilities; user fees for potential internal transit system and a raw water system fee The maximum general obligation indebtedness for the Districts is not expected to exceed $40,500,000 The Districts shall have a mill levy limitation of 50.00 mills, Gallagherized The Financial Plan anticipates a single bond issue in 2015 in the par amount of $27,000,000, the proceeds of which will reimburse Carbondale Investments for amounts they will expend on public infrastructure for the Development ◦Carbondale Investments investment in the Development will greatly exceed the amount of proceeds available from bonds issued by the Districts Historic and Current Trends and Information Special Districts date back to the early mining camps in Colorado in the late 1800s. As the camps grew, the residents sought mechanisms to join together to provide certain essential services such as fire protection and sewer service. Special districts of one form or another have been utilized since that time Colorado special districts have been instrumental in providing public infrastructure to meet the growing needs of the state's population in the face of increasing demands on cities and counties to keep up with the ever-increasing need for urban services Source: http://www.sdaco.org/sites/default/files/attachments/ Guide_for_Citizens_da.pdf_5-29-09.pdf Although special districts already existed, the legal structure was recognized by an authorizing act of the Colorado General Assembly in 1949 recognizing special districts as a form of local government created to provide certain municipal-type services in unincorporated or rural areas of the state. The General Assembly declared that special local government service districts could be created to provide necessary and desired services within designated boundaries In 1981, the General Assembly recodified all the statutory provisions relating to various types of special districts in what is referred to as the Special District Act. The Special District Act constitutes article 1 of Title 32 of the Colorado Revised Statutes, which is the general source of most of the statutory authorization, as well as limitations, upon the formation and operation of special districts Source: http://www.sdaco.org/sites/default/files/attachments/Guide_for_Citi zens_da.pdf_5-29-09.pdf In 1981, the General Assembly recodified all the statutory provisions relating to various types of special districts in what is referred to as the Special District Act. The Special District Act constitutes article 1 of Title 32 of the Colorado Revised Statutes, which is the general source of most of the statutory authorization, as well as limitations, upon the formation and operation of special districts Special districts organized pursuant to Title 32 are quasi-municipal corporations and political subdivisions of the state of Colorado organized for specific functions. As such, their activities are subject to extensive statutory guidelines Source: http://www.sdaco.org/sites/default/files/attachments/Guide_for_Citizen s_da.pdf_5-29-09.pdf ◦As of May 25, 2010, there are 3293 active local governments in the State 62 counties, (Including Denver and Broomfield) 269 municipalities 1885 special districts, of which 1238 (65%) are metropolitan districts (Title 32) 1077 other local governments (highway and airport authorities, Title 29, 30 and 31 districts) Source: http://www.dola.state.co.us/dlg/local_governments/lgtypes.htm ◦Property taxes supporting government services and facilities: Schools $3,267,970,264 50.2% Counties $1,602,002,645 25.2% Municipalities $ 335,814,890 5.3% Special Districts $1,156,024,406 18.1% Metropolitan Districts $ 338,049,347 5.3% ◦Fire protection districts account for 30.36% ($350,386,306) and metropolitan districts account for 29.29% ($338,049,347) of the total amount shown above under Special Districts Source: http://www.dola.state.co.us/dpt/publications/docs/2008_annual_report/Overview_2008AnnualReportFinal060509.pdf http://www.dola.state.co.us/dpt/publications/do cs/2008_annual_report/SpecDistRevenue.pdf ◦Special districts have proven to be increasingly popular tools in providing services. In 1995, there were 870 Title 32 special districts. Today there are approximately 1885 special districts. Nearly all of the growth in recent years is accounted for by the formation of new metropolitan districts ◦All major developments in the state are are supported by special districts: Highlands Ranch, Inverness, Meridian, Denver Tech Center and Central Platte Valley and Union Station all are supported by special and metropolitan districts The Special District Act (Title 32, article 1, C.R.S.) contains the legal framework for many types of special districts, including: ◦Ambulance Districts ◦Fire Protection Districts (may also provide ambulance and emergency medical and rescue services) ◦Health Service Districts ◦Metropolitan Districts ◦Park and Recreation Districts ◦Sanitation Districts ◦Water Districts ◦Water and Sanitation Districts ◦Health Assurance Districts ◦Mental Health Care Service Districts ◦Tunnel Districts ◦Forest Improvement Districts Other common types of districts that are notgoverned by the Special District Act include: ◦Business Improvement Districts ◦Cemetery Districts ◦Conservation Districts (soil) ◦Downtown Development Authorities ◦Irrigation Districts ◦Library Districts ◦Local Improvement Districts ◦Pest Control Districts ◦Public Improvement Districts ◦Special Improvement Districts ◦Water Conservancy Districts ◦Water Conservation Districts Special Districts v. Metropolitan Districts Type of District 2000 2005 2008 Ambulance Districts 9 10 10 Fire Protection Districts 241 249 253 Health Service (Hospital) Districts 33 34 36 Metropolitan Districts 294 673 1062 Park and Recreation Districts 46 52 53 Sanitation Districts 79 79 74 Water Districts 75 76 77 Water and Sanitation Districts 123 129 126 Health Assurance Districts First authorized in 2001 0 0 Mental Health Care Service Districts First authorized in 2007 0 0 Forest Improvements Districts First authorized in 2007 0 0 A metro district is a type of special district that provides at least two different types of services. So, instead of forming a district for each separate function, a metropolitan district is formed which can provide all the necessary services There have been over 100 new metropolitan districts formed in each of the past three years. In the years between 2000 and 2004, the number of metro districts increased from 294 to 653 during the same time period This growth mirrors Colorado's population growth and increased home building through 2007 Source: http://www.sdaco.org/sites/default/files/attachments/ Guide_for_Citizens_da.pdf_5-29-09.pdf A metropolitan district provides needed infrastructure and service to a specific area, with the cost being born by the property owners and residents of the area, rather than spread over the entire area of the general purpose government (city or county), as would be required if the city or county provides the infrastructure or service in the area Services can be provided to growing areas without impacting the budget or reserves of the city or county Often there may be no other viable alternative for providing and operating the necessary public facilities A special district provides a way of financing the infrastructure up front, with the costs being repaid as development occurs and property values increase The district is able to finance infrastructure and public facilities through the use of tax-exempt municipal bonds Source: http://www.sdaco.org/sites/default/files/attachments/ Guide_for_Citizens_da.pdf_5-29-09.pdf Population is growing so dramatically in many areas of Colorado that city and county resources are being stretched, and cities and counties are working with special districts as a means of installing the infrastructure to support the growth Constraints of TABOR and the desire for high quality development require governments to consider multiple financing mechanisms to support development Metro districts are flexible and can be created in numerous configurations to serve public infrastructure needs As a means of financing, metro districts have unique advantages The cost of borrowing is lower with tax- exempt bonds The payment for the cost of infrastructure is stretched out over 20-40 years rather than front-loaded in home costs New development pays its own way Special districts have not created unusually high or disproportionate tax burdens in Colorado for property owners Colorado ranks favorably with other states in comparisons of property tax burdens http://www.taxfoundation.org/taxdata/show /25429.html Title 32, Article 1, Section 2 The statutory process for special districts is set forth in Title 32, Article 1, Section 2 ◦That section describes the content required in service plans There is no statutory requirement for approved zoning, comprehensive plans, plats or filing in order to propose a district There is no prohibition against forming multiple districts and there is no statutory authority required to form multiple districts Why Propose the RE Districts Now? Public and Utility Crossings of RFTA ROW governed by PUC ◦Two public access crossings, including a grade separated crossing, and various utility crossing are necessary to provide for development. The PUC requires crossing to be under the control of government entities The school district ◦The school district is interested in land within the Development. No land is possible without the public access approved by the PUC as described above Amendment 60 and Amendment 61 ◦These districts, if formed this year, can escape the worst consequences of these Amendments Oversight, mill levy caps and the market Oversight ◦The County retains the power to oversee the districts Mill Levy Caps ◦Since 1992, the use of mill levy caps has ended the perceived financial risk of special districts. ◦In '91-'92 there were approximately 900 Title 32 districts in Colorado, 36 filed for bankruptcy protection = 4%, all did workouts. No bankruptcies have been filed since 1993 The Market ◦The market doesn’t accept the issuance of debt without sufficient assurance of the feasibility of repayment Title 32, Article 1, Section 203 There is sufficient existing and projected need for organized service in the area to be served by the proposed special district ◦The County Comprehensive Plan that is currently under consideration anticipates high density residential development and a commercial node zoning for the area. The Community Profile prepared, in part by BBC Research and RRC Associates projected population to brow from 57,000 in 2009 to nearly 85,000 in 2025. At 2.5 persons per household, that equates to approximately 830 homes a year needed to house the increased population. At a maximum potential, this Development would only meet demand for 10% of the housing over that period The existing service in the area to be served by the proposed special district is inadequate for present and projected needs ◦No other district is financially capable of serving the Development The proposed special district is capable of providing economical and sufficient service to the area within its proposed boundaries ◦The Service Plans provide for mill levy caps to protect homeowners while providing sufficient tax revenues to operate water and sewer service, street cleaning and snow removal and a community recreation and use facility The area to be included in the proposed special district has, or will have , the financial ability to discharge the proposed indebtedness on a reasonable basis ◦The mill levy protections in the service plans are consistent with service plans on a statewide basis These findings are not required in order to approve a service plan ◦Short term, the Districts are needed to negotiate with the PUC on the RFTA crossing ◦Short-term, the Districts are needed to assure the school district that suitable property will be available to them ◦Short term. the Districts need to avert the catastrophic financial problems of Amendment 60 and Amendment 61 ◦Long-term, the District are needed to provide public infrastructure and operation and maintenance of public infrastructure, including maintenance of public crossing across the RFTA corridor as required by the PUC ◦Long-term, Districts provide better financial security and stability than other entities