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TC Council Packet 09-28-2010TOWN OF AVON, COLORADO F AVON REGULAR MEETING FOR TUESDAY, SEPTEMBER 28, 2010 r 6- MEETING BEGINS AT 5:30 PM AVON TOWN HALL, ONE LAKE STREET PRESIDING OFFICIALS MAYOR RON WOLFE MAYOR PRO TEM BRIAN SIPES COUNCILORS RICHARD CARROLL, DAVE DANTAS, KRISTI FERRARO AMY PHILLIPS, ALBERT "Buz" REYNOLDS, JR. TOWN STAFF TOWN ATTORNEY: ERIC HEIL TOWN MANAGER: LARRY BROOKS TOWN CLERK: PATTY MCKENNY ALL REGULAR MEETINGS ARE OPEN TO THE PUBLIC EXCEPT EXECUTIVE SESSIONS COMMENTS FROM THE PUBLIC ARE WELCOME DURING CITIZEN AND COMMUNITY INPUT AND PUBLIC HEARINGS PLEASE VIEW AVON'S WEBSITE, HTTP: //WWW."ON.ORG, FOR MEETING AGENDAS AND MEETING MATERIALS AGENDAS ARE POSTED AT AVON TOWN HALL AND RECREATION CENTER, ALPINE BANK, AND AVON LIBRARY THE AVON TOWN COUNCIL MEETS ON THE SECOND AND FOURTH TUESDAYS OF EVERY MONTH 1. CALL TO ORDER AND ROLL CALL 2. APPROVAL OF AGENDA 3. DISCLOSURE OF POTENTIAL CONFLICT OF INTEREST 4. COMMUNITY & CITIZEN INPUT a. James Van Beek, Candidate for Eagle County Sheriff in November 2010 Election 5. CONSENT AGENDA a. Minutes from September 14, 2010 b. Sherman & Howard Engagement Letter (Scott Wright, Asst. Town Manager Finance) Proposal for professional bond counsel services c. Resolution 10 -20, Series of 2010, Resolution Approving an Encroachment Agreement with Holy Cross Energy for Improvements Related to the Avon Community Heat Recovery Project, Tract H, Block 2, Benchmark at Beaver Creek (Jeff Schneider, Project Engineer) d. Product & Service Purchase Agreement Contract with Imagine Technologies (Scott Wright, Asst. Town Manager Finance) Contract for purchase of the Avaya IP Office system 6. ORDINANCES a. Public Hearing on Ordinance No. 10 -14, Series of 2010, First Reading, An Ordinance Amending the Avon Municipal Code by Enacting Title 7, The Avon Development Code; Repealing Title 16: Subdivisions; Repealing Title 17: Zoning; and Repealing Portions of Title 2: Administration and Personnel (Sally Vecchio, Asst Town Manager Community Development, Eric Heil, Town Attorney) Review proposed Development Code as adopted by the Planning & Zoning Commission Public Hearings held on July 27. 2010, August 10, 2010, August 17, 2010, August 24, 2010, August 31, 2010 b. Ordinance No. 10 -17, Series of 2010, First Reading, An Ordinance Authorizing the Execution of a Site Improvement Lease, a Lease Purchase Agreement, a Disclosure Certificate, an Escrow Agreement, a Preliminary Official Statement and Other Documents and Matters Relating to Certain Certificates (Scott Wright, Asst Town Manager Finance) Review documents used for issuance of bond proceeds from Certificates of Participation ("COPS") for refunding of outstanding COPS & issuance of additional proceeds to be used for capital improvements, including but not limited to the Swift Gulch Transit / Public Works Facility Project Avon Council Meeting.10.09.28 Page 4 of 5 VUN TOWN OF AVON, COLORADO AVON REGULAR MEETING FOR TUESDAY, SEPTEMBER 28, 2010 __ [ a� P 4# P n MEETING BEGINS AT 5:30 PM AVON TOWN HALL, ONE LAKE STREET 6. ORDINANCES -CONTINUED c. Ordinance No. 10 -18, Series of 2010, An Ordinance Adopting Local Designation of Noxious Weeds (Jenny Strehler, Director PW &T) Review proposed ordinance that allows for 30 day public notice period as well as amends the list to include several weeds designated by the State of Colorado for control or eradication 7. RESOLUTIONS 8. TOWN MANAGER REPORT 9. TOWN ATTORNEY REPORT 10. MAYOR REPORT 11. ADJOURNMENT FUTURE COUNCIL AGENDA DATES & PROPOSED TOPICS: OCTOBER 12T ": Budget Retreat and Regular Meeting: Comcast Franchise Agreement, Public Development Code Chateau St. Claire PUD Amendment, Ordinance on Hearing, 2nd Reading on Ordinance No. 10 -14 Avon Avon Council Meeting. 10.09.28 Page 5 of 5 MINUTES OF THE REGULAR MEETING OF THE AVON TOWN COUNCIL HELD SEPTEMBER 14, 2010 A regular meeting of the Town of Avon, Colorado was held at the Avon Town Hall, One Lake Street, Avon, Colorado in the Council Chambers. Mayor Ron Wolfe called the meeting to order at 5:30 PM. A roll call was taken and Council members present were Rich Carroll, Dave Dantas, Amy Phillips, Buz Reynolds, and Brian Sipes. Kristi Ferraro was absent. Also present were Town Attorney Eric Heil, Town Manager Larry Brooks, Assistant Town Manager Patty McKenny, Assistant Town Manager Community Development Sally Vecchio, Assistant Town Manager Finance Scott Wright, Town Engineer Justin Hildreth, as well as other staff members and the public. AGENDA APPROVAL & DISCLOSURE OF POTENTIAL CONFLICT OF INTEREST Mayor Wolfe noted that the following topic would be discussed as a carry forward from the work session: BUDGET 2011: REVIEW PERSONNEL SUMMARY & GENERAL GOVERNMENT PROGRAMS. DEPARTMENT UPDATES Police Chief Bob Ticer and Assistant Town Manager Patty McKenny acknowledged the following awards and people: a. Awards: 1. Police Department 2009 Colorado Law Enforcement Challenge Award (Captain Duran, Colorado State Patrol) 2. Administration 2010 CIRSA Loss Control Award (Patty McKenny, Asst. Town Manager) b. Intemal Staff Promotions: 1. Police: Ken Dammen promoted to Sergeant and Aurion Hassinger reassigned to Detective (Bob Ticer, Police Chief) 2. Public Works: Joe Histed to Parks & Facilities Superintendent, Tim Consadine to Parks Supervisor (Jenny Strehler, Director PW &T) 3. Engineering: Shane Pegram reclassified to Project Engineer (Justin Hildreth, Town Engineer) c. Professional Development Recognition: • Debbie Hoppe awarded Judicial Administration Certification by Michigan State University, School of Criminal Justice. • Karyne Spadi attained Employment Law Essentials Certificate through Program sponsored by Mountain States Employers Council. • Scott Wright, CPA, CPFO attained his Certified Public Funds Investment Manager (CPFIM) designation in March. • Joye Gelo attained her certification as a Certified Payroll Professional (CPP) through the American Payroll Association. • Steve Duckworth received certification on Tracer Summit Systems Operations through the Trane Corporation. • Shane Pegram passed his Professional Engineering exam. 6. CONSENT AGENDA Mayor Wolfe asked for a motion on the consent agenda. Mayor Pro Tern Sipes moved to approve the consent agenda; Councilor Reynolds seconded the motion and it passed unanimously (Ferraro absent). a. Minutes from August 24, 2010 and August 31, 2010 d. ESCO Mountain Inc. Contract Award - Town Hall HVAC Controls System (Shane Pegram, Project Engineer) STAFF UPDATES Patty McKenny, Assistant Town Manager / Management Services, provided a Review information related to personnel and administrative program highlights. She outlined the following subject matter: ✓ The numerous cost savings measures the town has implemented ✓ Personnel Summaries outlining staffing levels, workforce reductions, job sharing and frozen positions ✓ Program highlights for human resources, municipal court & town clerk, risk management and community relations TOWN MANAGER REPORT Larry Brooks, Town Manager, commented on the following items: ➢ Campaign memo distributed to all employees, Town Council and P &Z Commission ➢ Candidates names on the ballot as well as name of the write in candidate There being no further business to come before the Council, the regular meeting adjourned at approximately 6:45 PM. RESPECTFULLY SUBMITTED: Patty McKenny, Town Clerk APPROVED: Rich Carroll Dave Dantas Kristi Ferraro Amy Phillips Albert "Buz" Reynolds Brian Sipes Ron Wolfe Regular Council Meeting Page 2 of 2 10.09.14.doc Memo To: Honorable Mayor and Town Council Thru: Larry Brooks, Town Manager Legal: Eric Heil, Town Attorney From: Scott Wright, Asst. Town Manager — Finance Date: September 9, 2010 Re: Engagement Letter — Sherman and Howard Summary: Initials Included in the consent agenda is an engagement letter from Sherman and Howard in connection with the proposed issuance of Certificates of Participation (COPs) in order to refinance existing COPS and issue additional proceeds. Sherman and Howard has acted as the Town's bond counsel on many of the Town's debt issuances in the past and is well qualified to continue in that role. Financial Implications: The engagement letter identifies an estimated fee of $45,000 that will be paid from the proceeds of the COPS. Town Manager Comments: Attachments: A — Sherman and Howard Engagement Letter. Page 1 Sherman & Howard L.L.C. Dee P. Wisor Direct Dial Number: (303) 299 -8228 E -mail: dwisor @shermanhoward.com Town of Avon P.O. Box 975 400 Benchmark Road Avon, CO 81620 Attention: Scott Wright Dear Scott: ATTORNEYS & COUNSELORS AT LAW 633 SEVENTEENTH STREET, SUITE 3000 DENVER, COLORADO 80202 TELEPHONE: (303) 297 -2900 FAX: (303) 298 -0940 W W W.SHERMANHOWARD.COM August 18, 2010 Re: Lease Purchase Agreement and approximately $6,800,000 Certificates of Participation, Series 2010 We are pleased to confirm our engagement as special counsel to the Town of Avon, Colorado (the "Town ") in connection with the execution of a Lease Purchase Agreement (the "Lease ") by the Town and related Certificates of Participation, Series 2010, in the approximate amount of $6,800,000 (the "Certificates "). We appreciate your confidence in us and will do our best to continue to merit it. This letter sets forth the role we propose to serve and the responsibilities we propose to assume as special counsel to the Town in connection with the Lease and the Certificates. Personnel Dee Wisor will be principally responsible for the work performed by Sherman & Howard L.L.C. on your behalf. He will be assisted by David Lucas and Maria Harwood. Where appropriate, certain tasks may be performed by other attorneys or paralegals. At all times, however, Dee Wisor will coordinate, review, and approve all work completed for the Town. Scope of Employment As your special counsel we are being engaged as a recognized expert whose primary responsibility is to render an objective legal opinion with respect to the authorization of securities like the Certificates. We will: examine applicable law; consult with the parties to the transaction prior to the execution of the Lease; prepare customary authorizing and operative documents, which may include the Lease, an indenture of trust, a site lease and related documents, proceedings relating to the authorization and execution of the Lease and related documents and issuance of the Certificates and closing certificates; review a certified transcript Sherman & Howard L.L.C. Town of Avon, Colorado August 18, 2010 Page 2 of proceedings; and undertake such additional duties as we deem necessary to render the opinion. Subject to the completion of proceedings to our satisfaction, we will render our opinion relating to the validity of the Lease and the Certificates, the enforceability of the security for the Certificates, and the exclusion of the interest of the rentals paid under the Lease which is paid by the Trustee as interest on the Certificates (subject to certain limitations which may be expressed in the opinion) from gross income for federal income tax purposes, and in the case of all the Certificates the exclusion of the interest of the rentals paid under the Lease which is paid by the Trustee as interest on the Certificates for Colorado income tax purposes. We are also being retained by you to act as special counsel to the Town in connection with the Official Statement for the Certificates (the "Official Statement "). As such, we will provide advice to the Town on the applicable legal standards to be used in preparing the Official Statement and meeting the Town's disclosure responsibilities. At the conclusion of the transaction, we will deliver a letter to you stating that we have assisted the Town in the preparation of the Official Statement, and that in the course of such assistance, nothing has come to the attention of the attorneys in our firm rendering legal services in connection with our representation which leads us to believe that the Official Statement, as of its date (except for the financial statements, other statistical data and statements of trends and forecasts, and information concerning the bond insurer, if any, and information concerning The Depository Trust Company and its procedures contained in the Official Statement and its Appendices, as to which we express no view), contains any untrue statement of material fact or omits to state any material fact necessary to make the statements in the Official Statement, in light of the circumstances under which they were made, not misleading. In delivering our opinion and letter, we will rely upon the certified proceedings and other certifications of public officials and other persons furnished to us without undertaking to verify the same by independent investigation. Our opinion and letter will be addressed to the Town and will be executed and delivered by us in written form on the date the Certificates are exchanged for their purchase price (the "Closing "). The opinion and letter will be based on facts and law existing as of their date. Our services are limited to those contracted for explicitly herein; the Town's execution of this letter constitutes an acknowledgment of those limitations. Specifically, but without implied limitation, our responsibilities do not include any representation by Sherman & Howard L.L.C. in connection with any IRS audit or any litigation involving the Town or the Certificates, or any other matter. Neither do we assume responsibility for the preparation of any collateral documents (e.g., environmental impact statements) which are to be filed with any state, federal or other regulatory agency. Nor do our services include financial advice (including financial advice about the structure of the Lease or Certificates) or advice on the investment of funds related to the Lease or Certificates. Sherman & Howard L.L.C. Town of Avon, Colorado August 18, 2010 Page 3 Representation of the Town In performing our services, the Town will be our client and an attorney - client relationship will exist between us. We will represent the interests of the Town, rather than the Town Council (the "Council "), the Council's individual members or employees of the Town. We will work closely with the Town Attorney and will rely on the opinion of the Town Attorney with regard to specific matters, including pending litigation. We assume that other parties to the transaction will retain such counsel as they deem necessary and appropriate to represent their interests in this transaction. Conflicts of Interest As you know, our firm regularly represents other issuers of municipal bonds as well as financial institutions such as underwriters, credit enhancers and banks that act as paying agents or trustees in other unrelated public finance transactions. It is very possible that, during the course of the firm's work on this transaction, one of such other clients could ask us to represent it in a different financing in a matter adverse to the Town or in which the Town has some involvement. Further, Sherman & Howard is a large firm with a broad transactional practice. This includes business, real estate and finance matters. We do not believe that our future representation of such transactional clients, in matters unrelated to the Lease and the Certificates, would materially limit or adversely affect our ability to represent the Town hereunder, even though such representations may be characterized as adverse under the Colorado Rules of Professional Conduct. Accordingly, we ask that you consent to our representation of such parties in transactions that are unrelated to the Certificates. This waiver will not extend to any matter involving litigation adverse to the Town, but is strictly limited to business, real estate, and finance transactional matters. In determining whether to consent to and waive the foregoing potential conflicts of interest, you should understand that your waiver includes your acknowledgement and agreement: (i) that you are not entitled to information we will obtain during our representation of our other clients, and (ii) that we have no duty to provide such information to you or to use it in representing you. We will treat your execution of this letter as consent to any future representations of such other parties in matters unrelated to our representation of the Town as described above. If at any time a question should arise about an adverse representation, please do not hesitate to contact us. Fee Arrangement Based upon: (i) our current understanding of the terms, structure, size and schedule of the financing, (ii) the duties we will undertake pursuant to this letter, (iii) the time we anticipate devoting to the financing, and (iv) the responsibilities we will assume, we estimate that our fee for this engagement will be $45,000. Such fee may vary: (i) if the principal amount of Sherman & Howard L.L.C. Town of Avon, Colorado August 18, 2010 Page 4 the Certificates increases significantly, (ii) if material changes in the structure of the financing occur, or (iii) if unusual or unforeseen circumstances arise which require a significant increase in our time or our responsibilities. Specifically, if the Certificates are not delivered at Closing on or before December 15, 2010, it will be necessary for us to repeat and update much of our work and a commensurate increase in our fees will result. If, at any time, we believe that circumstances require an adjustment of our original fee estimate, we will consult with you. In addition, this letter authorizes us to make disbursements on your behalf, which we estimate will not exceed $1,200. The Town agrees to reimburse us for such disbursements, including travel costs, photocopying, deliveries, filing fees, and other necessary expenses. Our fees are usually paid at Closing out of Certificate proceeds. We customarily do not submit any statement until the Closing, unless there is a substantial delay in completing the financing. We understand and agree that our contingent fees will be paid at Closing out of proceeds. If the financing is not consummated, we understand and agree that we will not be paid. Termination of Engagement The above fees contemplate compensation for usual and customary services as special counsel to the Town, as described above. Upon delivery of the opinion and letter, our responsibilities as special counsel will terminate with respect to this financing, and our representation of the Town and the attorney - client relationship created by this engagement letter will be concluded. Specifically, but without implied limitation, we do not undertake to provide continuing advice to the Town or to any other party to the transaction. Many post- issuance events may affect the Lease, the tax- exempt status of interest on the Lease, or liabilities of the parties to the transaction. Such subsequent events might include a change in the project to be financed with Certificate proceeds, a failure by one of the parties to comply with its contractual obligations (e.g., rebate requirements, continuing disclosure requirements), an IRS audit, or a change in federal or state law. Should the Town seek our advice on a post - closing matter or seek other, additional legal services, we would be happy to discuss the nature and extent of our separate engagement at that time. Document Retention At or within a reasonable period after Closing, we will review the file to determine what materials should be retained as a record of our representation and those which are no longer needed. We will provide you with a copy of the customary transcript of documents after Closing and will return any original documents obtained from you (if a copy is not included in the transcript). We will retain for several years a copy of the transcript and such other materials as correspondence, final substantive work product, documents obtained from you, and Sherman & Howard L.L.C. Town of Avon, Colorado August 18, 2010 Page 5 documents obtained from third parties. We will not retain such materials as duplicates of the above - described material, or drafts and notes that do not appear needed any longer. Ordinarily the firm will keep the retained materials until seven years after the final maturity of the Certificates. At the end of that time, unless you advise us in writing to the contrary, we will destroy the bulk of the file. If the file is especially voluminous, we may destroy all or a portion of it earlier, as our storage facilities are limited. If you prefer other arrangements for retention or disposition of our files in this matter, please advise us in writing. Approval If the estimated fees and other foregoing terms of this engagement are acceptable to you, please so indicate by returning the enclosed copy of this letter signed by the officer so authorized, retaining the original for your files. We appreciate this opportunity to serve as your special counsel on this financing and look forward to a mutually satisfactory and beneficial relationship. SHERMAN & HOWARD L.L.C. By: DPW.jw Enclosures Accepted and Approved: TOWN OF AVON, COLORADO Title: Date: PUBFINWOTYET.PUBHN /1220671.1 Memo To: Honorable Mayor and Town Council Initials Thru: Larry Brooks, Town Manager Legal Review: Eric Heil, Town Attorney Approved by: Sally Vecchio, Assistant Town Manager From: Justin Hildreth, P.E., Town Engineer Jeffrey Schneider, P.E., Project Engineer Date: September 21, 2010 it Re: Resolution No. 10 -20, Series of 2010, A Resolution Approving the Encroachment Agreement with Holy Cross Energy for Improvements Related to the Avon Community Heat Recovery Project, Tract H, Block 2, Benchmark at Beaver Creek Summary: The Avon Community Heat Recovery project will utilize the heat energy in treated wastewater effluent from the Avon Waste Water Treatment Facility (WWTF) to heat the Recreation Center swimming pools and eventually provide snowmelt energy for Main Street. The project consists of installing pumps, heat exchangers, process piping, and other new equipment in a building at the Avon WWTF and trenching heat supply and return lines to another new building to be located immediately east of the Recreation Center. The project is partially funded by a grant from the Governor's Energy Office through the Colorado Department of Local Affairs (DOLA) and is being conducted in partnership with the Eagle River Water and Sanitation District ( ERWSD). The Heat Pump Building, located on the WWTF site, is constructed beneath existing Holy Cross Energy (HCE) overhead power lines. HCE owns a 25 -foot wide easement for the lines along the property line. Resolution 10 -20, attached as Exhibit A, allows the Town to encroach into the easement for construction and operation of the Heat Recovery system. HCE has agreed to the construction, the Encroachment Agreement is merely a housekeeping item to ensure that all parties are in agreement regarding the encroachment. Previous Council Action: Town Council approved the grant agreement with DOLA at the April 28, 2009 regular meeting. The intergovernmental agreement between ERWSD and Town of Avon (TOA) was approved at the May 26, 2009 regular Council meeting. The Design Services Contract was awarded to Camp, Dresser, and McKee, Inc. (CDM) at the June 23, 2009 regular Council meeting. Previous project updates were given to Council at the November 10, 2009 and February 9, 2010 meetings. The construction contract was awarded to GE Johnson Construction Company (GEJCC) on April 13, 2010. Change Order 01 to the construction contract was approved by Town Council at the July 13, 2010 meeting. Discussion: Two buildings are being constructed as part of the Avon Community Heat Recovery project: the Heat Distribution Building and Heat Pump Building. The buildings are located adjacent to the Recreation Center and on the Avon WWTF site, respectively. In order to meet the requirements of the property owner ( ERWSD), the Heat Pump building was forced to within five feet of the WWTF perimeter fence. This area is within an easement owned by HCE for its overhead lines, known as a 25 -foot right of way easement. The Encroachment Agreement is a three -party agreement with the Town, HCE, and ERWSD, the property owner. It acknowledges that the Town constructed a building beneath existing power lines Resolution 10 -20 September 28, 2010 Page 2 of 2 and indemnifies HCE. ERWSD is approving the agreement concurrently. Due to site constraints, no other feasible location was available at the WWTF site that would have allowed for vehicle circulation, staging, and future plant expansion. Financial Implications: There are no financial implications associated with the execution of Resolution 10 -20, Series of 2010. Recommendation: Staff recommends approval of Resolution No. 10 -20, Series of 2010, A Resolution Approving the Encroachment Agreement with Holy Cross Energy for Improvements Related to the Avon Community Heat Recovery Project, Tract H, Block 2, Benchmark at Beaver Creek. Proposed Motion: Move to approve Resolution No. 10 -20, Series of 2010, A Resolution Approving the Encroachment Agreement with Holy Cross Energy for Improvements Related to the Avon Community Heat Recovery Project, Tract H, Block 2, Benchmark at Beaver Creek. Town Manager Comments: Attachments: Attachment A — Resolution 10 -20, Series of 2010, A Resolution Approving the Encroachment Agreement with Holy Cross Energy for Improvements Related to the Avon Community Heat Recovery Project, Tract H, Block 2, Benchmark at Beaver Creek • Page 2 ATTACHMENT A TOWN OF AVON RESOLUTION NO. 10-20 Series of 2010 A RESOLUTION APPROVING THE ENCROACHMENT AGREEMENT WITH HOLY CROSS ENERGY FOR IMPROVEMENTS RELATED TO THE AVON COMMUNITY HEAT RECOVERY PROJECT, TRACT H, BLOCK 2, BENCHMARK AT BEAVER CREEK WHEREAS, the Town of Avon is currently constructing the Avon Community Heat Recovery Project; and WHEREAS, the Town of Avon has a right to use Tract H, Block 2, Benchmark at Beaver Creek, known as the Avon Wastewater Treatment Facility, to construct a utility building known as the Heat Pump Building; and WHEREAS, the Town of Avon entered into an Intergovernmental Agreement with the Eagle River Water and Sanitation District for the funding, construction, maintenance, and operation of the Heat Recovery Project; and WHEREAS, Holy Cross Energy is the owner of a 25 -foot right of way easement along the northern property boundary of Tract H; and WHEREAS, Holy Cross Energy requires the execution of the Encroachment Agreement, attached hereto as Exhibit A, to permit the construction of the Heat Pump building beneath the overhead power lines. NOW, THEREFORE BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF AVON, that the Town Council of the Town of Avon hereby approves the Encroachment Agreement by and between Holy Cross Energy, the Town of Avon, and Eagle River Water and Sanitation District, attached as Exhibit A. ADOPTED September 28, 2010. TOWN COUNCIL TOWN OF AVON, COLORADO Ronald C. Wolfe, Mayor ATTEST: Patty McKenny, Town Clerk EXHIBIT A ENCROACHMENT AGREEMENT THIS AGREEMENT, is made and entered into this day of by and between TOWN OF AVON ( "Avonj AND EAGLE RIVER WATER AND SANITATION DISTRICT, a quasi - municipal corporation, (the "Owner") and Holy Cross Energy (hereinafter referred to as "Holy Cross"). WHEREAS, Avon is planning improvements upon a piece of property owned by the Owner described as: A part of Sections 11 and 12, Township 5 South, Range 82 West of the a P.M., a/k /a Tracts N, H and O, Benchmark at Beaver Creek Block 2 as more fully described in that particular Warranty Deed recorded by Reception No. 604193 in the records of the Eagle County Clerk and Recorder's Office, Eagle, Colorado, (hereinafter the "Property); and WHEREAS, Avon has the right to use that property under an agreement called "intergovernmental Agreement Regarding Heat Recovery Project" dated May 28, 2009; and WHEREAS, there is a 25' foot Holy Cross right -of -way easement across the property (hereinafter the "Easement") as more fully described in the easement recorded by Reception No. 157490 in the records of the Eagle County Clerk and Recorder's Office, Eagle, Colorado, and WHEREAS, certain existing improvements and proposed improvements (collectively "Improvementsl encroach upon the Easement in an area shown as "AREA OF ENCROACHMENT" on attached Exhibit A. NOW, THEREFORE, in consideration of the covenants and promises herein, the parties hereby agree as follows: 1. Holy Cross shall permit the Avon Community Heat Recovery Building to encroach upon the Easement. 2. Avon and the Owner accept any and all risks associated with the proximity of the Improvements to the current and future high voltage electric power lines. 3. Avon and the Owner warrant that it now has and shall continue to maintain adequate hazard insurance for the protection of all structures, facilities or other property of whatsoever character owned by Avon or the Owner within or adjacent to the Easement. 4. Holy Cross shall never be liable to Avon or the Owner for damages to the Improvements arising out of its use of the Easement to install, repair and maintain its electric facilities. 5. The Avon and the Owner shall indemnify Holy Cross from any increase in the cost of construction of any new utility lines or in the cost of any repairs to Holy Cross's utility lines, such increase, if any, due to the encroachment of the Improvements into the Easement. 6. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto, their heirs, successors and assigns, and shall be deemed to run with the Property and the Easement herein described, until such time as the Easement is relinquished or abandoned by Holy Cross, or the encroachment is permanently removed. This Agreement shall be recorded against the Property in Eagle County, Colorado. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed as of the day and year first above written. HOLY CROSS ENERGY By: Richard D. Brinkley, General Manager of Electric Operations and Engineering STATE OF 1 ss. COUNTY OF 1 EAGLE RIVER WATER AND SANITATION, a quasi municipal corporation By: (Vice) Chairman of the Board The foregoing instrument was acknowledged before me this day of , 20 by as (Vice) Chairman of the Board of EAGLE RIVER WATER AND SANITATION, a quasi municipal corporation. WITNESS my hand and official seal. My commission expires: Notary Public Address: W 1O#10- 20992:50- 63:Avon Waste Heat Recovery:8 /24/10 10-20692 Ena hmentAgmmentAvorEagle BS Page 1 of 2 TOWN OF AVON STATE OF ) ss. COUNTY OF ) Mayor The foregoing instrument was acknowledged before me this day of 20 by as Mayor of the TOWN OF AVON. WITNESS my hand and official seal. My commission expires: Notary Public Address: STATE OF ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 20 by Richard D. Brinkley, General Manager of Electric Operations and Engineering of Holy Cross Energy, a Colorado Corporation. WffNESS my hand and official seal. My commission expires: Notary Public Address: W /0 #10- 20992:50- 63:Avon Waste Heat Recovery:8 /24/10 10-20992 Enc chmeMAgmementAvw -Eagle as Page 2 of 2 --i o= D 0 l< n ca I 10 --4 co Ip m 9: D CD z ` o ` r 4 ca o y m A m �\ D 0 ( O Z o SEC. 11 CD SEC. 12 1 ` .6 ` 1 N nw aN M -p 4 c I 20 m s I •C '� o Z J�l n m co Err N , O I I I� � No m Z ro °c ^� m 0 2 D X Z --► Dm Memo To: Larry Brooks, Town Manager Thru: Scott Wright, Asst. Town Manager — Finance Thru: Eric Heil, Town Attorney From: Cindy Kershaw, IT Administrator Date: September 2, 2010 Re: VolP Vendor Recommendation Summary: rum The existing telephone system at the Town of Avon has been in place for over 12 years and the system is outdated and needs to be replaced. Only refurbished telephones and parts can be purchased for the old system. Proper handling of 911 location information is not supported on this system and there is limited growth available on the current system. We have no redundancy on the system and there are no new upgrades or additions to that system to allow new features or functionality to be added. Background: The process to select a replacement telephony system for the Town of Avon began July 20, 2009 with the release of a Request for Quotation. The Town received 7 responses from Colorado VolP telephony vendors. These responses covered proposals for 5 different VolP manufacturers. The answers to the RFQ were used to present budgetary costs for a VoIP system in the 2010 budget. Server and network upgrades have been completed in 2010 to accommodate the new VOIP environment. The 5 VolP manufacturers were narrowed down to 3 to be evaluated with the goal of finding one that would serve the Town's needs for the foreseeable future. The 3 manufacturers considered were Avaya, Cisco and ShoreTel. All 3 have very strong and long histories in the VolP industry. A113 would provide a much needed upgrade in technology that would give the users far more functionality than the existing system. Each vendor was invited to the Town for a day to demonstrate their proposed system and features in May 2010. The scope was refined and counts of actual devices were updated in June 2010 and updated quotes were received from each vendor. Site visits to a customer running each of the proposed systems were conducted in June and July 2010. Discussion: I am recommending the proposal from Imagine Technologies for the Avaya IP Office system for the Town. This solution features all of the functionality that the Town has requested and more. This solution will continue to work and grow for the Town for many years to come on a solid platform that will be upgraded, maintained and supported by Avaya and Imagine Technologies. Management of the IP Office platform is a graphical interface that is intuitive and easy to learn and navigate. The ease of management within the system will allow IT staff to quickly make changes necessary for the users to receive the full benefits of the features available. This system will allow the Town to utilize technology to create new efficiencies within departments that are short staffed currently and have difficulty keeping in touch with other Town departments and the public. Complete answers to the RFQ and quotes are available to be reviewed. If these recommendations are approved by the Town Council, the project will commence on September 15, 2010 and be completed by October 31, 2010. Financial Implications: The budget in 2010 for the VolP project is $125,000.00 The Avaya proposal is the most cost effective of the 3 solutions considered. The Avaya system will allow us to implement enhanced 911 capabilities that will give Vail Dispatch detailed information about the location the call is coming from. We can designate location information down to the specific room or office in a building if we wish. The cost savings also allow us to implement at installation a wireless infrastructure in the Municipal Building which will allow the Administration staff mobility to handle calls wherever they are in the facility. Summary of proposals. Existing telephone system yearly maintenance = $ 9,276.00 Additional Costs: Cabling work that may be necessary $ 3,000.00 Network consulting $ 5,000.00 Additional hardware (switches, etc) $ 5,000.00 Recap of financial implications with Avaya IP Office recommendation: 2010 CIP Budget $125,000.00 Avaya IP Office Installation (Imagine Technologies) $104,497.42 Additional Costs $ 13,000.00 Balance remaining $ 7,502.58 • Page 2 Imagine Technologies Avaya IP Office OCx Networks ShoreTel PEI Cisco & Microsoft OCS Installation cost $ 104,497.42 $ 125,831.00 $ 137,304.00 Year 1 maintenance Included Included $ 17,507.00 Year 2 maintenance $ 7,080.00 $ 9,800.00 $ 18,773.00 Year 3 maintenance $ 7,080.00 $ 9,800.00 $ 18,773.00 Existing telephone system yearly maintenance = $ 9,276.00 Additional Costs: Cabling work that may be necessary $ 3,000.00 Network consulting $ 5,000.00 Additional hardware (switches, etc) $ 5,000.00 Recap of financial implications with Avaya IP Office recommendation: 2010 CIP Budget $125,000.00 Avaya IP Office Installation (Imagine Technologies) $104,497.42 Additional Costs $ 13,000.00 Balance remaining $ 7,502.58 • Page 2 Recommendation: Approve moving forward with implementation of the VoIP system proposed by Imagine Technologies and approve the attached Terms and Conditions (with Schedule A — Order Summary Form), the Statement of Work and the Schedule B Maintenance Agreements for each Town location. Town Manager Comments: e • Page 3 L-4, J-� IMAGINETECHNOLOGIES PRODUCT & SERVICE PURCHASE AGREEMENT CONTRACT NUMBER: TOWN OF AVON TERMS AND CONDITIONS This Product & Service Purchase Agreement ( "Agreement ") is by and between the legal entities that have executed this Agreement ( "Imagine Technologies" and "Client"). This Agreement covers Products and Services for use only in the United States in the ordinary course of Client's business, and not for the purpose of resale by Client. The parties agree that the terms and conditions of this Agreement will govern the Client's purchase and/or license of equipment, software, and associated wire and cable, ( "Products ") and installation, maintenance and other related services ( "Services") described in this Agreement ( "Order "). "Addendum No 1 Imagine Technologies Inc. Product and Purchase Agreement. Client of Avon" will apply. No other terms and conditions will apply to Client's Order, nor control over this Agreement, If Client submits its Order on Client's own Purchase Order form ( "PO "), then the terms and conditions on Client's PO are expressly excluded. If applicable, this Agreement also consists of one or more of the following documents X Schedule A -Order Summary Form 1. CONTRACT PERIOD A, This Agreement shall be effective from the date of execution by authorized representatives of both parties and shall remain in effect until terminated as set forth in this Agreement. B. If Client orders Maintenance Service, it will commence on the expiration of the applicable warranty period for the term stated on the Order Summary Form. Upon expiration of the initial term, Maintenance shall automatically renew for successive one year terms at the monthly charges and under the terms and conditions in effect at the time of renewal unless either party gives the other written notice of its intent not to renew at least thirty (30) days prior to the expiration of the initial or any renewal term. Imagine Technologies can also notify you ninety- (9D) days in advance of the time of renewal that Service for specific Products covered under this Agreement will not be renewed 2. ORDERS A Imagine Technologies' acceptance of Client's Order is subject to credit approval and to Client's remittance of the initial payment as set forth on the Order Summary Form (Schedule A). Subsequent Orders, excluding Change Orders, with a purchase price or license fee of less than $10,000 for additions or modifications to the Products and Services acquired hereunder ( "Add Ons ") may be purchased by Client via telephone, fax, U.S. mail, or email under this Agreement. The price of Add Ons will be Imagine Technologies' then current puce. C. When applicable, the parties will mutually agree upon a Scope of Work that describes the responsibilities of each party with respect to installation or other Services to be provided The Scope of Work shall be made part of the applicable Order when signed by both parties. Client's failure to perform its responsibilities on the dates specified in the Scope of Work may result in a delay of the Order, or may result in an increase in the prices stated on the applicable Order Summary Form or Scope of Work. 3. IMPLEMENTATION A. The "Delivery Date" is the date Imagine Technologies delivers the Products to the Client's location. The "In- Service Date" is the date that Products are substantially in operation in accordance with the manufacturer's standard specifications and any additional documentation accompanying the Product (collectively referred to as "Specifications ") and are available for use by the Client. B. Any mutually agreed upon changes made to the Order before the Delivery or In- Service Date shall be documented on a Change Order form ( "Change Order'). The Change Order form shall state the applicable adjustments to the cost of the Order, including any applicable shipping charges or cancellation charges. C. If Client requests a delay in the Delivery Date or In- Service Date, Imagine Technologies at its option may (1) delay the Delivery Date or In- Service Date subject to any increase in the prices and charges on the Order; (2) deliver the Products and invoice Client for the purchase price or license fee plus any applicable charges for Services performed, in which case installation will be rescheduled at a mutually agreeable time; or (3) cancel the Order and bill Client for cancellation charges as set forth in Section 12. D, Imagine Technologies may, at its option, perform a site survey to identify Client's specific installation requirements. If the site survey cannot be performed before Imagine Technologies' acceptance of the Order, it will be scheduled by mutual agreement of the parties. Upon completion of the site survey, Imagine Technologies will identify and communicate to Client any additional charges that may apply as a result of the site survey on a Change Order. If Client does not agree to such additional charges, client may cancel the Order without liability for cancellation charges. 4. MAINTENANCE SERVICES A. Maintenance Services include all labor and replacement parts and/or Products required by Imagine Technologies to provide Pg I of 3 remedial repair of Products during the warranty period, or for Products covered by an Order for post- warranty maintenance Service ( "Maintenance Service "). PARTS AND PRODUCTS REPLACED UNDER MAINTENANCE SERVICE MAY BE NEW, REMANUFACTURED OR REFURBISHED. Any removed parts and/or Products will become the property of Imagine Technologies. B, Maintenance Service coverage will be in accordance with the option(s) described in Service Offerings Summary (Schedule B) and selected by Client on the Order C, Imagine Technologies may, at its discretion, electronically monitor Products for the purpose of (1) providing accurate remote diagnostics and correcting actions, and (2) determining the applicable renewal charges on the anniversary date of Orders for Maintenance Services charged on a per port basis. Client agrees to cooperate with Imagine Technologies in such data collection, including making remote access available to Imagine Technologies for this purpose, D, Any additions made by Client to Products installed at the Client's location, or any additions electronically identified pursuant to Section 4C above shall be automatically added to Maintenance Service coverage either upon warranty expiration of the additional Product or on the anniversary. Products purchased from a party other than Imagine Technologies or an authorized agent ( "Third Party Products "), are subject to certification by Imagine Technologies at Imagine Technologies then current rates for such certification. Maintenance Service coverage will be effective immediately after Imagine Technologies certifies the Third Party Products. Additions shall be charged at the monthly prices charged by Imagine Technologies for the existing Products, 5. WARRANTIES AND EXCLUSIONS A. Imagine Technologies warrants that during the warranty period the Products warranted directly by Imagine Technologies will operate in accordance with the Specifications. If a Product does not operate in accordance with the Specifications during the manufacturers' warranty period, Client will promptly notify Imagine Technologies. Imagine Technologies will, at its option, either repair or replace that Product without charge to Client The warranty period shall be specified on the Order Summary and shall begin on the Delivery Date, or if installed by Imagine Technologies, on the In- Service Date. B If Client has ordered post- warranty service, during Imagine Technologies' warranty and post- warranty service periods, Imagine Technologies is responsible for damage (excluding loss or corruption of data records) to Client's voice Products (e.g., DEFINITYOECS and IntuityTm AUDIX® systems but not any data or video Products) from power surges as long as Client has installed to the Products' electrical protection which complies with the National Electrical Code, any applicable local standards, and any Imagine Technologies - specified site requirements. A pending or active Imagine Technologies post - warranty service agreement is a prerequisite for this power surge coverage C. Except as warranted in 5.A above, Imagine Technologies wan-ants that Services will be performed in a workmanlike manner in accordance with the provisions of this Agreement and any applicable industry standards and government regulations. If Imagine Technologies fails to perform the Services as warranted, and Client reports such failure within 30 days of the performance of the Service, Imagine Technologies will re- perform such Services. D. For Products receiving warranty and post warranty service directly from the manufacturer, Imagine Technologies will supply Client with the contact information for registration and service requests during the warranty period If a Product does not operate in accordance with the Specifications during the manufacturer's warranty period, Client will call the manufacturers' Technical Assistance Center ( "TAC ") and the manufacturer will perform all required warranty work in accordance with the terms of its warranty. E. EXCEPT AS STATED IN SUBSECTIONS 5A AND 5C ABOVE, IMAGINE TECHNOLOGIES, AND ITS PARENT, RELATED COMPANIES, SUBSIDIARIES AND THEIR AFFILIATES, SUBCONTRACTORS AND SUPPLIERS, MAKE NO WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIM ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. F. the Imagine Technologies' warranties provided in this Section 5 are limited to the normal and usual use and operation of the Products by Client in accordance with the manufacturer's standard operating instructions. Imagine Technologies' warranties and Maintenance Services do not cover and specifically exclude all claims resulting from the following: (1) abuse or misuse of Products; (2) Client's failure to follow the manufacturer's installation, operation or maintenance instructions; (3) environmental and force majeure conditions listed in Section 14; (4) failure of network carriers or transmission errors experienced over Internet or other facilities; (5) attachment of equipment to Products except through standard interfaces; or (6) actions of non- IMAGINE PRODUCT & SERVICE PURCHASE AGREEMENT CONTRACT NUMBER: TOWN OF AVON TERMS AND CONDITIONS Imagine Technologies personnel including loading of software onto Products or any other modification to Products except as approved in writing by Imagine Technologies. G. Imagine Technologies does not warrant uninterrupted or error free operation of the Products. In addition, although Products are designed to be reasonably secure, Imagine Technologies makes no express or implied warranty that Products are immune from or prevent fraudulent intrusion, unauthorized use or disclosure or loss of proprietary information. Certain features if purchased, such as Password Reset, Conference Mailbox, Skip Password and Monitor Mailbox, when enabled, could be improperly used in violation of privacy laws. By ordering Products with these features or separately ordering such features, Client assumes all responsibility for assuring their proper and lawful use. H. Imagine Technologies shall have no liability for the delay in or failure to perform any Services to the extent that such failure or delay results from the following: (1) delay by Client, any agent or representative of Client; (2) Client's failure to provide environmental conditions, access to the location where the work is to be performed, including without limitation remote access to Products, entrance to buildings, rooms, or sites; network facilities, or any information or other resources which may be set forth in a Scope of Work for installation Services; (3) Client's failure to make payments when they are due; (4) Force majeure conditions as set forth in Section 14. I. The decision to acquire or use hardware, software (in any form), networks, supplies, facilities or services from parties other than Imagine Technologies ( "Third Party Products ") is Client's, even if Imagine Technologies helps Client identify, evaluate or select them. EXCEPT AS SPECIFICALLY AGREED TO IN WRITING, IMAGINE TECHNOLOGIES IS NOT RESPONSIBLE FOR, AND EXPRESSLY DISCLAIMS LIABILITY FOR, PERFORMANCE OR QUALITY OF THIRD PARTY PRODUCTS OR THEIR SUPPLIERS, AND THEIR FAILURE TO MEET CLIENT'S EXPECTATIONS WILL NOT AFFECT CLIENT'S OBLIGATIONS TO IMAGINE TECHNOLOGIES. 6. CLIENT'S RESPONSIBILITIES A. In addition to Client's responsibilities set forth elsewhere in this Agreement, Client is responsible for notifying Imagine Technologies of the presence of any hazardous material (e.g., asbestos) on Client's premises prior to the commencement of any Services. Client is also responsible for removal of any such hazardous material or correction of any other hazardous condition that affects Imagine Technologies' performance of Services. Services will be delayed without any penalty to Imagine Technologies until Client removes or corrects any hazardous condition. Client also agrees to notify Imagine Technologies prior to moving a Product under warranty or an Order for Maintenance Services. Additional charges may apply if Imagine Technologies incurs additional costs in providing Maintenance Services as a result of a move of a Product. B. If the Product supports Telephony over Transmission Control Protocol/Intemet Protocol (TCP/IP) facilities; Client may experience certain compromises in performance, reliability and security, even when the Product performs as warranted. These compromises may become more acute if Purchaser fails to follow Imagine Technologies' recommendations for configuration, operation and use of the Product. CLIENT ACKNOWLEDGES THAT IT IS AWARE OF THESE RISKS AND THAT IT HAS DETERMINED THEY ARE ACCEPTABLE FOR ITS APPLICATION OF THE PRODUCT. CLIENT ALSO ACKNOWLEDGES THAT, UNLESS EXPRESSLY PROVIDED IN ANOTHER AGREEMENT, CLIENT IS SOLELY RESPONSIBLE FOR (1) ENSURING THAT ITS NETWORKS AND SYSTEMS ARE ADEQUATELY SECURED AGAINST UNAUTHORIZED INTRUSION, AND (2) BACKING UP ITS DATA AND FILES. 7. PRICE AND PAYMENT A. Client agrees to make the initial payment for Products and Services indicated on the Order Summary Form. Imagine Technologies will invoice Client for the balance, adjusted to reflect all advance payments and any Change Orders, on the Delivery Date or the In -Service Date, whichever is applicable. Client agrees to pay invoices upon receipt. Any invoices not paid within thirty (30) days after the date on the invoice are subject to a late payment fee of one and one -half percent (I -1 /2 %) per month or portion thereof, or the maximum amount allowed by law, whichever is lower, on the unpaid balance. Restrictive endorsements or other statements on checks will not apply. B. Client agrees to reimburse Imagine Technologies' attorneys' fees and related costs associated with collecting delinquent payments. Late fees or attorneys fees shall not apply to balances in dispute resolved in the Client's favor. C. Unless Client provides Imagine Technologies with a tax exemption certificate, Client is solely responsible for paying all legally required taxes, including without limitation any sales, excise or other taxes and fees which may be levied upon the sale, transfer of ownership, license, installation or use of the Products, except for any Pg 2 of 3 income tax assessed upon Imagine Technologies, Client will pay all shipping, handling, rigging and other destination charges relating to the shipment and delivery of the Products to the location specified on the applicable Order. 8. TITLE/RiSK OF LOSS Risk of loss for Products shall pass to Client on the Delivery Date Client will acquire good and free title to Products purchased upon full payment of charges invoiced, except that title to software will remain with the manufacturer of the software 9. SECURITY INTEREST In the event that title shall be deemed to have passed, Imagine Technologies reserves the right to file a security interest in the Products until the purchase price and any installation charges are paid in full. You agree to execute and deliver all documents reasonably requested by Imagine Technologies to protect and maintain Imagine Technologies' security interests You appoint Imagine Technologies as your agent to sign and file a financing statement to perfect Imagine Technologies' security interest. 10. SOFTWARE LICENSE Client shall receive the right to use software provided under this Agreement pursuant to the Manufacturer's Software License Agreement in Schedule D or to any shnnk- wrapped licenses. 11. EXCLUSIVE REMEDIES AND LIMITATIONS OF LIABILITY A THE ENTIRE LIABILITY OF IMAGINE TECHNOLOGIES, ITS PARENT, RELATED COMPANIES, SUBSIDIARIES, AFFILIATES AND SUBCONTRACTORS, (AND THE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES, SUBCONTRACTORS AND SUPPLIERS OF ALL OF THEM) AND CLIENT'S EXCLUSIVE REMEDIES FOR ANY DAMAGES CAUSED BY ANY PRODUCT DEFECT OR FAILURE, OR ARISING FROM THE PERFORMANCE OR NON - PERFORMANCE OF ANY SERVICE, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT INCLUDING NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, SHALL BE: (1) FOR FAILURE OF PRODUCTS DURING THE WARRANTY PERIOD, THE REMEDIES STATED IN SECTION 5; (2) FOR DAMAGES TO REAL OR TANGIBLE PERSONAL PROPERTY OR FOR BODILY INJURY OR DEATH TO ANY PERSON FOR WHICH IMAGINE TECHNOLOGIES' SOLE NEGLIGENCE WAS THE PROXIMATE CAUSE, CLIENT SHALL HAVE THE RIGHT TO PROVEN DAMAGES TO PROPERTY OR PERSON; (3) FOR IMAGINE TECHNOLOGIES' FAILURE TO PERFORM ANY OTHER MATERIAL TERM OR CONDITION OF THIS AGREEMENT AND SUCH FAILURE CONTINUES FOR THIRTY (30) DAYS AFTER IMAGINE TECHNOLOGIES' RECEIPT OF WRITTEN NOTICE FROM CLIENT, CLIENT'S SOLE REMEDY SHALL BE TO CANCEL THIS AGREEMENT WITHOUT INCURRING CANCELLATION CHARGES OR CHARGES FOR PRODUCTS AND SERVICES NOT YET PROVIDED; (4) FOR CLAIMS OTHER THAN SET FORTH ABOVE, IMAGINE TECHNOLOGIES' LIABILITY SHALL BE LIMITED TO PROVEN DIRECT DAMAGES IN AN AMOUNT NOT TO EXCEED THE PURCHASE PRICE/LICENSE FEE OF THE PRODUCT OR SERVICE GIVING RISE TO THE CLAIM B. EXCEPT TO THE EXTENT PROVIDED IN I I.A. (2) ABOVE, IMAGINE TECHNOLOGIES SHALL NOT BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS, SAVINGS OR REVENUES OF ANY KIND, LOST, CORRUPTED, MISDIRECTED OR MISAPPROPRIATED DATA OR MESSAGES; AND CHARGES FOR COMMON CARRIER TELECOMMUNICATION SERVICES OR FACILITIES ACCESSED THROUGH OR CONNECTED TO PRODUCTS ( "TOLL FRAUD "). IMAGINE TECHNOLOGIES SHALL NOT BE LIABLE FOR THE TYPES OF DAMAGES STATED ABOVE WHETHER OR NOT IMAGINE TECHNOLOGIES HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES THIS PARAGRAPH SHALL SURVIVE THE FAILURE OF ANY EXCLUSIVE REMEDY 12. CANCELLATION/I'ERMINATION A. (i) If Client cancels all or any portion of an Order for Products prior to the Delivery Date, Client shall pay Imagine Technologies a cancellation fee of twenty -five percent (25 %) of the purchase price/license fee for the canceled Products. (ii) If Client cancels all or any portion of an Order for Products that are unopened and still in their original package after the Delivery Date but prior to the In -service Date, Client shall return the canceled Products and pay a restocking fee of, the greater of, twenty five percent (25 %) of the purchase price for such Products or twenty five dollars ($25), plus all incurred shipping charges. (iii) If Client cancels all or any portion of an Order for Products after the Product container is opened or installation has begun, Client shall pay Imagine Technologies a cancellation fee equal to one hundred percent (10010) of the 2 IMAGINE PRODUCT & SERVICE PURCHASE AGREEMENT CONTRACT NUMBER: TOWN OF AVON TERMS AND CONDITIONS purchase price/license fee for the cancelled Products plus the cost of any service performed up to the date of cancellation, and all incurred shipping charges (however, upon making this payment, Imagine Technologies shall remove its Security Interest, Client shall have title free and clear, and the return of the Product is not required). B. Unless otherwise stated in a Scope of Work for Services, once a Service term has commenced for any initial or renewal term, Client may cancel coverage upon thirty- (30) days written notice to Imagine Technologies. If Client notifies Imagine Technologies of its intent to cancel during the first thirty (30) days of an initial term or renewal term, Client will only be responsible for the charges for the period of coverage up until the effective date of termination. If the Cancellation occurs after the first thirty (30) days of an initial or renewal term, Client agrees to pay a cancellation charge equal to the monthly charges for twelve (I2) months or the total remaining on the term then in place, whichever is less. Client further agrees that the cancellation charge is not a penalty, but is in lieu of the actual damages that Imagine Technologies will incur, the precise amount of which may be difficult to determine For prepaid agreements, Imagine Technologies will refund or credit the pro rata price of the remaining term less the applicable termination charge. Imagine Technologies agrees that if its own breach of a material part of this Agreement causes the cancellation, the cancellation fee will not apply. C. If either party fails to perform any material term or condition of this Agreement and such failure continues for thirty (30) days after receipt of written notice, such failure shall constitute a breach of this Agreement and the non - breaching party may terminate this Agreement and exercise any available rights subject to the provisions and limitations set forth in Section 1 I or elsewhere in this Agreement 13. SETTLEMENT OF DISPUTES Any controversy or claim whether based on contract, tort, strict liability, fraud, misrepresentation, or any other legal theory, related directly or indirectly to this Agreement ( "Dispute ") shall be resolved solely in accordance with the terms of this Section 13. If a Dispute arises, the parties will attempt to resolve the Dispute through good faith negotiation within forty-five (45) days of notification of the Dispute. If the Dispute cannot be settled through good faith negotiation, parties will submit the Dispute to non - binding mediation conducted by the American Arbitration Association ( "AAA ") or any other mutually acceptable alternate Dispute resolution organization. Each party shall bear its own expenses but those related to the compensation of the mediator shall be bome equally. The parties, their representatives, other participants and the mediator (and arbitrator, if any) shall hold the existence, content and result of mediation in confidence. If the Dispute is not resolved through mediation, claims may be brought in a state or federal court of competent jurisdiction. Any Dispute Client has against Imagine Technologies with respect to this Agreement must be brought within two (2) years after the discovery of damage or injury. To the extent not prohibited by law, the parties hereby knowingly, voluntarily and intentionally waive any right to trial by jury that either party may have in any action or proceeding, in law or in equity, in connection with this Agreement 14. FORCE MAJEURE Imagine Technologies shall have no liability for delays, failure in performance, or damages due to: fire, explosion, power failures, pest damage, lightning or power surges (except as provided in 5.13), strikes, or labor disputes, water, acts of God, the elements, war, civil disturbances, acts of civil or military authorities or the public enemy, manufacturer caused equipment or part TOWN OF AVON (Legal Entity Name) Pg 3 of 3 shortages, transportation facilities, fuel or energy shortages, performance or availability of communications services or network facilities, unauthorized use of the Products, or other causes beyond Imagine Technologies' control whether or not similar to the foregoing. 15. ASSIGNMENT Neither Client nor Imagine Technologies may assign all or part of this Agreement without the express written consent of the other. This consent may not be unreasonably withheld. Imagine Technologies may, however, assign this Agreement without Client's consent to a present or future parent, related companies, subsidiary, affiliate, or successor and Imagine Technologies may also assign Imagine Technologies' right to receive payment under this Agreement. Client acknowledges that Imagine Technologies' consent to any assignment by Client does not waive assignee's obligation to pay any applicable license fees to the manufacturer for associated software. 16. SUBCONTRACTING Imagine Technologies may subcontract all or part of the Services to be performed under this Agreement, but will retain responsibility for the work to the extent of the warranties provided in Section 5. 17. NON - SOLICITATION - Neither party shall solicit for employment any personnel of the other party who has performed work for or received Services from the other party under this Agreement during or within twelve (12) months of the performance of such Services 18. GENERAL A. Any supplement, modification or waiver of this Agreement must be in writing and signed by an authorized representative of both Client and Imagine Technologies. B. If either Client or Imagine Technologies fails to enforce any particular right or remedy available under this Agreement, that failure will not be considered to be a waiver of any other right or remedy available under this Agreement. C. This Agreement is for the sole benefit of the parties and there are no intended third party beneficiaries of this Agreement. D. If any provision of this Agreement is found to be illegal or unenforceable, that finding will not affect the validity of the remaining provisions of this Agreement, and a valid provision that most closely approximates the economic effect and intent of the illegal or unenforceable provision will be substituted for it. E. All notices and other communications pertaining to this Agreement must be in writing, and will be considered to have been given on the date of receipt if personally delivered, or on the fifth business day after mailing if sent by certified mail, return receipt requested„ postage prepaid at the addresses identified on the Schedule A. F- The substantive and procedural laws of the State of Colorado, without regard to any otherwise applicable choice or conflict of laws provisions, will govern this Agreement. G. THIS AGREEMENT, INCLUDING ALL SUPPLEMENTS EXECUTED BY THE PARTIES AND ATTACHED HERETO OR REFERENCING THIS AGREEMENT, IS THE ENTIRE AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE PRODUCTS AND SERVICES PROVIDED HEREUNDER AND SUPERSEDES ALL PRIOR AGREEMENTS, PROPOSALS, COMMUNICATIONS BETWEEN THE PARTIES AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL. Each of the parties has caused this Agreement to be executed as of the date written below its signature. (Authorized Signature) (Typed or Printed N (Title) (Date) IMAGINE TECHNOLOGIES ENTITY: _IMAGINE TECHNOLOGIES, INC. (Legal Entity Name) (Authorized Signature) _MIKE MALONE (Typed or Printed Name) CONTROLLER (Title) (Date) ADDENDUM NO. 1: IMAGINE TECHNOLOGIES, INC. PRODUCT & SERVICE PURCHASE AGREEMENT: CLIENT OF AVON In the event the terms and conditions of this Addendum No. 1 conflict in whole or in part with the terms and conditions of the Product & Service Purchase Agreement, Contract Number: Client of Avon agreement ( "Agreement'), the terms and conditions of this Addendum No. 1 shall control. A.I. Amendment to Agreement: Paragraph I.B. of the Agreement is amended to add the following sentence, "Imagine Technologies shall provide written notice of any price increase to Maintenance Services at least thirty (30) days in advance of the effective date of such Maintenance Service price increase." A.2. Amendment to Agreement: Paragraph 12.8. of the Agreement is amended by deleting the language in its entirety and inserting the following language: "Client may cancel and terminate this Agreement by providing thirty (30) days written notice to Imagine Technologies. The effective date of cancellation and termination shall be thirty (30) days after the date of receipt of written notice. Client shall only be responsible for charges for the period of coverage and Maintenance Service up to the effective date of termination." A.3. Amendment to Agreement: Paragraph 13. of the Agreement is amended by deleting the language in its entirety. Paragraph A.13 below shall govern disputes. A.4. No Waiver of Governmental Immunity: Nothing in this Agreement shall be construed to waive, limit, or otherwise modify any governmental immunity that may be available by law to the Client, its officials, employees, Imagine Technologies, or agents, or any other person acting on behalf of the Client and, in particular, governmental immunity afforded or available pursuant to the Colorado Governmental Immunity Act, Title 24, Article 10, Part 1 of the Colorado Revised Statutes. A.5. Affirmative Action: Imagine Technologies will not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin. Imagine Technologies will take affirmative action to ensure applicants are employed, and employees are treated during employment without regard to their race, color, religion, sex or national origin. Such action shall include, but not be limited to the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. A.6. Article X, Section 20/TABOR: The Parties understand and acknowledge that the Client is subject to Article X, § 20 of the Colorado Constitution ( "TABOR "). The Parties do not intend to violate the terms and requirements of TABOR by the execution of this Agreement. It is understood and agreed that this Agreement does not create a multi - fiscal year direct or indirect debt or obligation within the meaning of TABOR and, therefore, notwithstanding anything in this Agreement to the contrary, all payment obligations of the Client are expressly dependent and conditioned upon the continuing availability of funds beyond the term of the Client's current fiscal period ending upon the next succeeding December 31. Financial obligations of the Client payable after the current fiscal year are contingent upon funds for that purpose being appropriated, budgeted, and otherwise made available in accordance with the rules, regulations, and resolutions of Town of Avon, and Addendum No. 1: IMAGINE TECHNOLOGIES, INC. PRODUCT & SERVICE PURCHASE AGREEMENT: CLIENT OF AVON Page 1 of 3 other applicable law. Upon the failure to appropriate such funds, this Agreement shall be terminated. A.7. Employment of or Contracts with Illegal Aliens: Imagine Technologies shall not knowingly employ or contract with an illegal alien to perform work under this Agreement. Imagine Technologies shall not contract with a sub - contractor that fails to certify that the sub - contrator does not knowingly employ or contract with any illegal aliens. By entering into this Agreement, Imagine Technologies certifies as of the date of this Agreement it does not knowingly employ or contract with an illegal alien who will perform work under the public contract for services and that the Imagine Technologies will participate in the e- verify program or department program in order to confirm the employment eligibility of all employees who are newly hired for employment to perform work under the public contract for services. The Imagine Technologies is prohibited from using either the e- verify program or the department program procedures to undertake pre - employment screening of job applicants while this Agreement is being performed. If the Imagine Technologies obtains actual knowledge that a sub - contractor performing work under this Agreement knowingly employs or contracts with an illegal alien, the Imagine Technologies shall be required to notify the sub - contractor Technologies and the Client within three (3) days that the Imagine Technologies has actual knowledge that a sub - contractor is employing or contracting with an illegal alien. The Imagine Technologies shall terminate the subcontract if the sub - contractor does not stop employing or contracting with the illegal alien within three (3) days of receiving the notice regarding Imagine Technologies' actual knowledge. The Imagine Technologies shall not terminate the subcontract if, during such three days, the sub - contractor provides information to establish that the sub - contractor has not knowingly employed or contracted with an illegal alien. The Imagine Technologies is required to comply with any reasonable request made by the Department of Labor and Employment made in the course of an investigation undertaken to determine compliance with this provision and applicable state law. If the Imagine Technologies violates this provision, the Client may terminate this Agreement, and the Imagine Technologies may be liable for actual and /or consequential damages incurred by the Client, notwithstanding any limitation on such damages provided by such Agreement. A.8. Ownership of Documents: Any work product, materials, and documents produced by the Imagine Technologies pursuant to this Agreement shall become property of the Client of Avon upon delivery and shall not be made subject to any copyright unless authorized by the Client. Other materials, methodology and proprietary work used or provided by the Imagine Technologies to the Client not specifically created and delivered pursuant to the Services outlined in this Agreement may be protected by a copyright held by the Imagine Technologies and the Imagine Technologies reserves all rights granted to it by any copyright. The Client shall not reproduce, sell, or otherwise make copies of any copyrighted material, subject to the following exceptions: (1) for exclusive use internally by Client staff and /or employees; or (2) pursuant to a request under the Colorado Open Records Act, § 24 -72 -203, C.R.S., to the extent that such statute applies; or (3) pursuant to law, regulation, or court order. The Imagine Technologies waives any right to prevent its name from being used in connection with the Services. A.9. No Waiver of Rights: A waiver by any Party to this Agreement of the breach of any term or provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either Party. The Client's approval or acceptance of, or payment for, services shall not be construed to operate as a waiver of any rights or benefits to be provided under this Agreement. No covenant or term of this Agreement shall be deemed Addendum No. 1: IMAGINE TECHNOLOGIES, INC. PRODUCT & SERVICE PURCHASE AGREEMENT: CLIENT OF AVON Page 2 of 3 to be waived by the Client except in writing signed by the Town Council or by a person expressly authorized to sign such waiver by resolution of the Town Council of the Client of Avon, and any written waiver of a right shall not be construed to be a waiver of any other right or to be a continuing waiver unless specifically stated. A.10.13inding Effect: The Parties agree that this Agreement, by its terms, shall be binding upon the successors, heirs, legal representatives, and assigns. A.11.Limitation of Damages: The Parties agree that Imagine Technologies' remedies for any claims asserted against the Client shall be limited to proven direct damages in an amount to exceed amounts due under the Agreement and that Client shall not be liable for indirect, incidental, special or consequential damages, including but not limited to lost profits A.12.No Third Party Beneficiaries: Nothing contained in this Agreement is intended to or shall create a contractual relationship with, cause of action in favor of, or claim for relief for, any third party, including any agent, sub - consultant or sub - contractor of Imagine Technologies. Absolutely no third party beneficiaries are intended by this Agreement. Any third -party receiving a benefit from this Agreement is an incidental and unintended beneficiary only. A.13.Governing Law, Venue, and Enforcement: This Agreement shall be governed by and interpreted according to the law of the State of Colorado. Venue for any action arising under this Agreement shall be in the appropriate court for Eagle County, Colorado. To reduce the cost of dispute resolution and to expedite the resolution of disputes under this Agreement, the Parties hereby waive any and all right either may have to request a jury trial in any civil action relating primarily to the enforcement of this Agreement. The Parties agree that the rule that ambiguities in a contract are to be construed against the drafting party shall not apply to the interpretation of this Agreement. Each party shall be responsible for its own attorney fees. A.14.Survival of Terms and Conditions: The Parties understand and agree that all terms and conditions of the Agreement that require continued performance, compliance, or effect beyond the termination date of the Agreement shall survive such termination date and shall be enforceable in the event of a failure to perform or comply. A.15.Assignment and Release: All or part of the rights, duties, obligations, responsibilities, or benefits set forth in this Agreement shall not be assigned by Imagine Technologies without the express written consent of the Town Council for the Town of Avon. Any written assignment shall expressly refer to this Agreement, specify the particular rights, duties, obligations, responsibilities, or benefits so assigned, and shall not be effective unless approved by resolution or motion of the Town Council for the Town of Avon. No assignment shall release the Applicant from performance of any duty, obligation, or responsibility unless such release is clearly expressed in such written document of assignment. A.16.Severability: Invalidation of any of the provisions of this Agreement or any paragraph sentence, clause, phrase, or word herein or the application thereof in any given circumstance shall not affect the validity of any other provision of this Agreement. Addendum No. 1: IMAGINE TECHNOLOGIES, INC. PRODUCT & SERVICE PURCHASE AGREEMENT: CLIENT OF AVON Page 3 of 3 IMAOtNa" SCHEDULE A -ORDER SUMMARY Client Legal Name: Client Contact: Tel. No.: Town of Avon Cindy Kershaw 970 - 748 -4034 Imagine Address: City: State, Zip Code PO BOX 4993 ENGLEWOOD CO 80155 Client Address Street: City State, Zip Code: PO Box 975 Avon, CO 81620 Imagine Contact Name: Tel #: Fax #: Bob Kadera 303 - 350 -2409 720 - 200 -6701 Street: Installation/Delivery Address if diffe7nckershaw@avon.org City State, Zip Code: EMAIL: One Lake St. Avon, CO 81620 Method of Payment: Check No: Cred it Card No.: LEASE ❑ CASH o CREDIT CARD 11 Ex p. Date: Contract No. BKO83010 Order No. Client's order for Products is summarized as follows below: Product Description Order Code Quantity Unit Purchase i Price /License Fee Total Purchase Price /License Fee Installation Charges arran Tenn (Months) AVAYA IPO IP500 V2 CONTROL UNIT LUC- 700476005 3 Is 1,345.00 $ 4,035.00 12 AVAYA IPO IP500 V2 SYSTEM SD CARD MU -LAW LUC - 700479710 3 $ 50.00 $ 150.00 12 AVAYA IPO DVD R6 USER/ADMIN SET LUC - 700480569 1 $ 19.00 $ 19.00 12 AVAYA IPO 500 EXTENSION CARD PHONE 2 LUC - 700431778 1 $ 250.00 $ 250.00 12 AVAYA IPO 500 EXTENSION CARD PHONE 8 LUC - 700417231 5 $ 990.00 $ 4,950.00 12 AVAYA IPO 500 MC VCM 32 LUC - 700417389 3 $ 900.00 $ 2,700.00 12 AVAYA IPO 500 TRNK PRI UNI SINGLE LUC - 700417439 1 $ 950.00 $ 950.00 12 AVAYA IPO LIC IP500 Tt CHANNELS ADD 8 RFA LUC - 215181 2 $ 730.00 $ 1,460.00 12 AVAYA IPO 500 EXP MOD PHONE 16 LUC - 700449507 1 $ 2,651.00 $ 2,651.00 12 AVAYA IP OFFICE Power Lead Earthed US LUC - 700289770 4 $ 15.00 $ 60.00 12 AVAYA IPO 500 RACK MOUNTING KIT LUC - 700429202 4 $ 60.00 $ 240.00 12 AVAYA IPO LIC PREFERRED PRO 4 LUC- 171991 1 $ 2,395.00 $ 2,395.00 12 AVAYA IP400 VoiceMail Pro RFA 2 LUC - 174459 1 $ 1,795.00 $ 1,795.00 12 AVAYA IP400 VoiceMail Pro RFA 4 LUC - 174460 1 $ 2,875.00 $ 2,875.00 12 AVAYA IPO LIC VMPRO UMS 20 USER RFA LUC - 217883 2 $ 903.96 $ 1,807.92 12 AVAYA IPO LIC R6 AV IP ENDPOINT 20 RFA LUC - 229447 2 $ 1,245.00 $ 2,490.00 12 AVAYA IPO LIC R6 AV IP ENDPOINT 1 RFA LUC - 229444 6 $ 75.00 $ 450.00 12 AVAYA IPO LIC R6 AV IP ENDPOINT 5 RFA LUC- 229445 4 $ 350.00 $ 1,400.00 12 AVAYA IPO Mudi -Site Option 4 CHANNELS RFA LUC - 205650 12 $ 695.00 $ 8,340.00 12 IPO LIC RECEPTIONIST RFA 1 LICOS LUC - 171987 4 $ 599.00 $ 2,396.00 12 AVAYA PWR USER 20 RFA, (UMS Twinning So hone LUC - 229428 3 $ 2,704.00 $ 8,112.00 12 AVAYA IP PHONE 9630G GRAY LUC - 700405673 88 $ 595.00 $ 52,360.00 12 AVAYA IP PHONE 9640 GRAY LUC - 700383920 27 $ 640.00 $ 17 280.00 12 AVAYA 9600 SBM24 BUTTON MODULE GRAY LUC - 700462518 3 $ 215.00 $ 645.00 12 AVAYA 115101 IP PHONE POWER W /CAT 5 LUC - 700434897 3 Is 26.00 $ 78.00 12 AVAYA 1151D1 PWR CORD LUC - 405362641 3 $ 9.00 $ 27.00 12 AVAYA IPO 500 4 PORT ANALOG TRUNK LUC - 700417405 2 $ 400.00 $ 800.00 12 Subtotal $ 120,715.92 Sub7otal This page SubTotal Other Pages $120,715.92 $0.00 $33,398.50 $17,560.00 Subtotal Other Pages $ 50,958.50 Discount ($67,177.00) Shipping Charges, None $ Estimated Delivery Date: TBD Tax, None $ Estimated In-Service Date: TBD TOTAL Is 104,497.42 Remarks: Payment terms are 50% Advance Payment at Contract Signing Advance Payment Is 52,248.71 Balance due upon receipt of final invoice Balance Due 1 $ 52,248.71 CLIENTS SIGNATURE BELOW ACKNOWLEDGES THAT CLIENT HAS READ AND ACCEPTED THE TERMS AND CONDITIONS OF THE ABOVE REFERENCED CONTRACT, THE CLIENT AUTHORIZES IMAGINE TECHNOLOGIES TO OBTAIN CREDIT INFORMATION PRIOR TO ACCEPTING THIS ORDER CLIENT: Imagine ENTITY: (Legal Entity Name (Legal Entity Name Authorized Signature) Authorized Signature) Printed Name, Title Printed Name Tide Date Date i �t uu�ciHe SCHEDULE A -ORDER SUMMARY Client Legal Name: Town of Avon Client Contact: Cindy Kershaw Tel. No.: 970 - 748 -4034 Imagine Address PO BOX 4993 City ENGLEWOOD State, Zip Code CO 80155 Client Address: Street: PO Box 975 City State, Zip Code: Avon, CO 81620 Imagine Contact Name: Bob Kadera Tel #: 303 - 350 -2409 Fax #: 720 - 200 -6701 Installation/Delivery Address (if different) Street: One Lake St. City: Avon, CO 81620 EMAIL: ckershaw@avon.org Method of Payment LEASE ,v CAST I, CREDIT CARM Check No: Credit Card No.: Ex p. Date: Contract No. BKO83010 Order No. Client's order for Products is summarized as follows: Product Description Order Code Quantity Price /License Fee Fee Charges Terrn(MO) Ava a 3645 Wireless Phone with headset LUC- 700430416 4 $ 675.00 $ 2,700.00 12 Ava a 3645 Battery, with Charger LUC- 700430457 4 $ 55.00 $ 220.00 12 Ava a 3645 Charger Power Supply LUC- 700245392 4 $ 5.00 $ 20.00 12 Ava a Voice Pdority Server LUC - 700413164 1 $ 499.00 $ 499.00 12 Ava a AVPP Power Supply LUC - 700480965 1 $ 69.50 $ 69.50 12 Fax Server for UM, 4 ports MLT -FF420 1 $ 3,100.00 $ 3,100.00 12 E911 Locator, Tone Commander PRI Interface RST- RS6750 1 $ 10,000.00 $ 10,000.00 12 HP Server with OS, Keyboard, Mouse 1 $ 4,500.00 $ 4,500.00 12 HP Next Business Day On Site service 1 $ 300.00 $ 300.00 12 Routers for QoS Adtran Model 3430, T -1 Module 2 $ 2,200.00 $ 4,400.00 12 Price above includes software upgrade to R7 when available Aruba 650 Controller, 16 AP Maximum 650-US 1 $ 2,345.00 $ 2,345.00 1 Aruba Policy Enforcement Module, 128 Users LIC -PEF -127 1 $ 1,050.00 $ 1,050.00 1 Aruba Wireless Intrusion Protection Mod 4 AP LIC -WIP -4 1 $ 240.00 $ 240.00 1 AC Power Cord PC -AC-NA 1 $ $ 12 4 AP Access Point License LIC -4 -AP 1 $ 300.00 $ 300.00 1 Aruba Model 125 Access Point AP -125 3 $ 995.00 $ 2,985.00 1 Next Day Support for above Aruba, Year 1 1 $ 670.00 $ 670.00 Year 1 Professional Services Per SoW dated August 30 2010, except for QoS work 1 $ 14,310.00 QoS work per SoW dated August 30, 2010 1 $ 3,250.00 Imagine Technologies will provide a free Software upgrade for each major software release of IP Office prwAding that Town of Avon has an Imagine Technologies post warranty maintenance agreement in place. The software will be provided at no charge for the first $250.00 at the Ava a National Price List. This does not include installation of the software. This is a software u rode for each I Office system. TOTALS THIS PAGE TOA Initials 133,398.501 17,560.00 17,560.00 it IMAGINETECHNOLOGIES INSTALLATION SITE INFORMATION End User Customer Legal Name: Town of Avon DBA Name: Project Contact: Cindy Kershaw I Phone #: 970 - 748 -4034 1 Email: ckershaw @avon.org Shipping address: TBD, Ship phones to customer at 1 Lake St., Avon, CO 81620. Aruba & Avaya Control Unit to Imagine office for Programming and Bum In City: Avon State: CO ZIP Code: 81620 Billing Address: PO Box 975 City: Avon Billing Contact Name: Scott Wright Data Network Contact Name: Cindy Kershaw Imagine AE: Bob Kadera State: CO } Billing phone number: 970 - 748 -4055 Phone: same Today's Date: August 30, 2010 GENERAL PROJECT INFORMATION Fax Number: ZIP Code: 81620 Billing contact email: swdght @avon.org Email: same Target Install Date: October, 2010 High Level description of solution reauirements: Currently the Town of Avon, TOA, is using a Tadiran phone system. The primary location, Town Hall has a local PRI T -1 from Qwest and Unified Messaging for Voice mails and faxes to appear in their Outlook client. TOA has a second location called the Recreation Center and a third location called Public Works. Smaller single user locations are the Parks Garage, Cabin, and Pump House. The Tadiran solution is a TDM solution that is almost 12 years old. Due to the age of the system, spare parts and support are becoming more difficult to obtain. E911 is not supported on the Tadiran solution. The TOA will replace the Tadiran with an Avaya IP Office communications solution. This Communications Solution will include Voice Over IP (VoIP) telephones, Call Recording, Meet -Me- Conferencing, Unified Messaging for voice mails and faxes to appear in the Outlook client, Failover to the Recreation Center or Pubic Works, Mobile Twinning, Softphones, an Aruba wireless solution, Wireless phones, Receptionist Softconsoles,and E911. Imagine Technologies will provide a Communications Solution which includes hardware, software and Professional Services to implement the items in the Schedule Order Sumary(s) and as outlined in the SoW as well as the information gathered for TOA during this process. Detailed Description: Imagine Technologies will assign a Project Manager, PM, for this work. The PM will be the main point of contact. Imagine will conduct a Kick Off call with TOA. The Kick Off call will introduce the Imagine team and the TOA team. We will review the SoW, Schedule A's, site visit dates, potential cut over dates and other pertinent information. The Imagine PM will conduct at least one and not more than two site visits to review the environmental conditions, review how the system will be programmed, installed, end user requirements, training, and other information so we have a successful project. DHCP Scope and requirements will be discussed at this time. A PRI T -1 is in place for Town Hall. The signaling on this shall be NI -2. Existing analog trunks, up to a maximum of four (4) shall be run through the systems at the Recreation Center and Public Works. A cut sheet will be sent to TOA prior to the PM site visit so that during the site visit, details on how each user will be set up and programmed can be reviewed. Overall system programming related to but not limited to Automated Attendant programming, Department programming, User programming, Aruba wireless solution, paging, and overall system functionality will be discussed and documented for implementation. The cut sheets will form a basis for the communications solution system programming. Applications such as Unified Messaging, Mobile Twinning, Softphones, Overhead paging, Call Recording, wireless phones, the Aruba wireless solution and training will be reviewed and documented during the PM site visit(s). From this visit Imagine will document how the solution will be designed and implemented. This SoW assumes that all wire is in place and working for the type of device required. IP phones require CATS wire or better connected to a POE data switch. Analog stations require CATS wire or better connected to the Avaya IP Office. The Aruba AP's require CATS wire or better connected to the POE data switch. Imagine Technologies will implement Quality of Service, QoS, on the TOA data switches and routers. This will include implementing QoS on the Imagine Technologies provided Adtran Routers. This QoS work assumes that all the POE data switches are in place and functioning prior to this QoS work beginning. The QoS work will include a conference call to gather requirements and acquire or develop documentation that is needed for the QoS work. Imagine will Design a comprehensive QoS strategy that provides preferential treatment of VoIP and video traffic at both Layer 2 and 3 throughout the entire LAN and WAN networks. It will work in conjunction with the phone engineers to merge the QoS designs. For the actual QoS Implementation we will work Onsite to setup and configurations of QoS for approximately 10 Cisco switches located throughout the town. We will perform testing to show that the QoS strategy is operational. Testing will be accomplished by the collection of traffic statistics on the LAN and WAN pertaining to packet classification and traffic statistics for VoIP traffic. A Transfer of knowledge to TOA IT engineers will occur. Finally we will provide the necessary documentation to support TOA engineers in maintaining and troubleshooting this implementation. After the QoS has been completed per above, Imagine will perform a Network Assessment as a further check to insure that QoS has been properly implemented in your network. The Network Assessment will consist of simulated voice traffic at the call volume and Codec's agreed upon to simulate voice traffic across your network. A report will be provided showing MOS scores and detailed performance. Once Imagine and TOA are in agreement that the network is ready for VoIP traffic we will install the communications solution. The IP Office and Aruba system will be programmed and burned in, in our Denver office. It will then be taken to TOA for installation. The equipment will be installed and tested as much as possible prior to cut over. Training for end users will occur prior to the cut over date. A training area will be designated and set up for 10 —15 people. Classes will be conducted so that each employee has the opportunity to be trained. It is the TOA responsibility for employees to attend one of the training classes. Employees will be trained on how to use their phones, voice mail and the applications such as Softphone or Mobile Twinning deployed to them. The employees using Soft Console and the wireless phones will have their own training class. Administrator training will occur at the times and dates determined with TOA. This can also include a Train the trainer approach to further enhance TOA use of the system. Any train the trainer will be in addition to the end user trainng described above. E911 will be implemented via TEO Tone Commander 9145 with a PRI Interface. Six (6) phone numners /DID numbers will be registered by TOA with the PSAP to show the address of each location. The implementation will include notification to TOA employees of a 911 call. The details on who is notified who will be determined with the Imagine PM. The Avaya IP Office Solution will be cut over after hours during a weekday on a date and time agreed to by TOA & Imagine. We will cut over all three locations in the same evening. This will require an out of service condition for a period of time. Once the system is cut over it will be tested. A more detailed cut over plan can be provided after the PM site visit. Imagine will program and install an Aruba Wireless solution for the Town Hall. This will include three (3) Access Points, AP's. The AP's will require CATS wire or better connected to a POE data switch. The wireless solution will be used for the wireless phones, for Internal secure wireless access and for Guest access. Separate SSID's will be implemented for the corresponding access. The Imagine PM will review this solution with TOA so that it is programmed and implemented as required by TOA. Imagine will have a Help Desk for the day after the system cut over. Imagine will visit employee to make sure the phone is functioning as required and the employees are familiar with how to use the solution. Further training and system programming will be performed as needed. The Help Desk usually occurs for one day after cut over. When TOA and Imagine agree that the system is functioning properly and the employees have been trained we will end the Help Desk. A Job Completion from will be signed by TOA to document the system is working and operational. This usually occurs when the Help Desk is ended. If there are any punch list items to complete these are documented on the Job Completion form. Oncepe Job Completion form is signed this will be begin a 30 day period where Imagine will make minor programming changes at no charge. Once this 30 day period is over, minor programming changes will be billable. Major programming changes are billable. STATEMENT OF WORK IMAGINE TECHNOLOGIES WILL PERFORM THE FOLLOWING SERVICES AND ACTIVITIES DESCRIBED BELOW WHILE INSTALLING THE HARDWARE AND SOFTWARE OUTLINED IN THE SCHEDULE A CONTRACT DOCUMENT. THESE SERVICES, ACTIVITIES AND RESPONSIBILITIES CHARACTERIZE THE FULL SET OF INSTALLATION DELIVERABLES FOR THIS PROJECT AND THUS CONSTITUTES THE WORKING AGREEMENT BETWEEN IMAGINE TECHNOLOGIES AND TOWN OF AVON. Assumptions: The following assumptions have been made about the client environment and the delivery of this solution: 1) Resources from other Imagine Technologies offices and /or subcontractors will be utilized, as needed, to provide a full scope of technical expertise. 2) Imagine Technologies, Inc. is not responsible for the performance or quality of third party vendors. 3) Resources and staffing from client and Imagine Technologies, Inc. must be committed for the duration of the project. 4) Specific equipment and software purchased will be listed in the Schedule A. 5) Dates and resources are not committed until the project kickoff meeting with the Project Manager. 6) Requests for support or services beyond this Scope of Work require written approval by client and acceptance by the Imagine Technologies, Inc. Project Manager. 7) If existing paging equipment is to be reused with new system, best efforts will be made for integration of existing paging into system. No guarantees are made regarding quality of sound or the ability to integrate, due to the variety of equipment and potential age of hardware found in many client locations. 8) Engineering changes made by the client after project initiation may affect the agreed upon project schedule and will require project review to determine impact and schedule requirements. Additional charges may apply. 9) Delays to the project due to customer's environment not ready, delay in circuit delivery or cable plant installation could impact both the project timeline and cost, depending on the availability of resources. 10) Imagine Technologies is not responsible for any loss of customer's data or network system security. 11) Imagine Technologies is not responsible for the performance or quality of any IP Phone connected to the IP Office System that will be utilizing the Internet, VPN, or other remote connectivity. Imagine Technologies will install and test IP Phones on the Local Area Network at the time of system installation. This scope of work does not include the installation of remote devices. I Client Responsibilities: 1) Provide the proper site environment as defined in the equipment room requirements document. 2) Ensure that the work site and environment are safe and in compliance with all applicable local, state and federal laws. 3) Provide Imagine Technologies with reasonable access to and from all areas and systems affected by the performance of tasks defined in this scope of work. 4) Ensure that a suitable workspace and phone access is available to Imagine Technologies during the project installation. 5) Provide the appropriate remote access to all servers during the installation and after cutover for maintenance support. For Imagine warranty/maintenance customers, this is normally accomplished through the business internet connection and remote access software. For Avaya maintenance accounts, a dedicated modem line or VPN account on the customer provided VPN will be required. 6) Provide any /all customer provided equipment, servers, software and hardware within Avaya specification and within the appropriate project timeline. 7) Ensure that all network that Imagine Technologies, Inc. is not installing, i.e., data switches, routers, VPN concentrators, CSU /DSU, network circuits is in place and tested prior to network readiness assessment testing and commencement of installation activities. 8) Provide the necessary static IP addresses and Ethernet ports for any server connections to the customer local area network. 9) In some cases, it will be necessary for the client to support DHCP/TFTP services from the client's existing network resources. 10) Ensure that circuits have been extended into the proper place in the server /equipment room. 11) Assign a Client Project Manager who will be responsible for coordination with Client employees regarding the setup of user training classes, determining design of system and overall management of the client environment necessary for a successful implementation. 12) Provide training area for telephone set/voice mail user training and a location for administration training. 13) In the case of customer provided cabling make sure all cabling is in place prior to the Imagine's team arriving on onsite and provide cable records indicating the cable number, jack number and extension number associated with each location. Any additional wiring required beyond the work described in this scope of work will be billable. 14) Provide a marked floor plan with the location of each extension to be installed. j Imagine Responsibilities: 1) Assign a Project Manager with overall responsibility to work with client designated project manager to plan, coordinate, and pursue a coordinated implementation effort in support of the technology deployment Described by this Statement of Work. 2) A site survey will be performed to insure site readiness. 3) Imagine resources will work with the client to design all applications and services described within this scope. This design will be documented for customer sign -off prior to configuration of equipment. 4) Imagine resources will stage, configure and test this equipment in our staging facility prior to shipment to customer location. 5) Imagine Technologies will install and connect all equipment listed on the associated Schedule A. 6) Imagine Technologies will install and test all public network facilities (T -1, analog lines) as described within this scope and work with the client's network provider for the successful delivery of these facilities. 7) Imagine Technologies will place, label and test all handsets as outlined below based on customer provided floor plans. 8) Imagine Technologies will document the configuration of the equipment, as listed in the schedule A and review all documentation with the client. 9) Imagine resources will be available for first day of service after cutover for a period of 4 hours onsite. 10) Imagine Technologies will provide end user and administration training as documented below. 11) Imagine Technologies will provide free minor remote changes to the system for a period of 30 days after system cutover. BASIC SYSTEM INFORMATION Project Type (new, upgrade, addition, or System Type: Avaya IP Office V2 R6.x PSTN type: PRI T -1 move):New Number of digital endpoints: None Number of Analog stations: See New or Existing Wire (who is providing if above SoW new and include extension of dimarc): I Existing Describe any phasing requirements (applications to be installed later, multi -site installation with some sites later, etc.): There are 3 locations as part of the Small Community Network, SCN. This is currently envisioned as cutting all locations the same evening during the week as per the above SoW. IP PHONES AND DATA NETWORK INFORMATION Number of IP Phones on same LAN as system: 108 Number of IP Softphones for remote users None Customer provided Softphone workstation requirements: No Number of IP Softphones on same LAN Number of IP Endpoints (phones) for as system: 60 1 remote users: None How many IP phones will Imagine install How many IP Softphones will Imagine as part of this project: All install as part of this project: TBD Who is responsible for configuring QoS How will the customer power their IP on customer LAN /WAN? Imagine per phones: All PoE switches SoW above Is the client aware of the network What is the WAN type for remote Number of VPN phones to be installed: assessment requirements: No locations ( Frame Relay, PTP, MPLS, None VPN over the internet): PTP and fiber Customer existing data switch type and Customer Router type, software version Who is responsible for programming software version: Separate document and amount of memory: New the VPN: TOA APPLICATIONS Voice Mail Type: VM Pro, Preferred Edition Who is providing Server: Imagine Server requirements given to client: Software No Number of Auto Attendants: TBD UMS: Yes, see above How many workstations will Imagine implement as part of the project: TBD i Recording on Voice Mail: TOA Will this be a centralized voice mail for Conference bridge setup with PINS other locations: Yes (how many will Imagine implement): TBD 10 - 20 Phone Manager Lite or Pro: N/A How many workstations will Imagine Soft console licenses to be installed: 4 install the software on: N/A FAX SERVER INTEGRATION Fax Server Type & Number of Ports: 4 ports Integration Type: Analog stations Separate DID for Fax: Yes ADDITIONAL EQUIPMENT INTEGRATION Spectralink handsets: Wireless handsets Wireless (802.11): Yes, New Aruba from Imagine Paging (new or existing – give amp type): Reuse existing. Number of external paging zones: 1 per Amp Model TBD connects via analog trunk ports Other: ADDITIONAL SERVICES End User Training (number of users and any special Administration training (number of users and any special requirements – standard offer is 1 class for every 15 users requirements – standard offer is 1 administrator 3 hours): during normal business hours held consecutivel)): Yes, will Imagine to perform 8 hours of Administrator training during need to determine and set up a training room, cases, times installation process for 2 – 4 Administrators. Imagine to perform etc. to train all 100+ employees. Will need Softconsole, UMS, a Web Ex type follow -up training 1 – 2 months after installation Twinning and Softphone instruction. when requested by TOA. Other Services: EQUIPMENT ROOM INFORMATION How will equipment be mounted? If rack, Who is providing patch panels and patch Vertical or Horizontal wire mgmt who is providing? Rack, TOA Provided cables and how many: TOA required: TBD _ —Does If existing wire, will equipment be greater The system will need connectivity to the wiring exist to connect the than 10 cable feet from the current system? customer's LAN – where is data telephone equipment to the data TBD equipment? Same room as IP Office network? TBD Site survey performed by Imagine Services: Y Type of wire (CAT3, CAT5 /5e, CAT6): Is the customer aware of power We will need to do this as part of the SoW CATS for VoIP. CATS for analog stations. and grounding requirements (environmental specification _ handout provided): No Any IDF closets: Yes Customer wiring contractor name: TOA Customer contractor phone j number: Cindy is contact Imagine warranty or maintenance Please Avaya maintenance CLIENT MUST SUPPLY either VPN access or dedicated dial -up provide type of remote access provided to number – which will the customer be providing: Imagine PWM equipment for help desk support: Internet CARRIER SERVICES INFORMATION Carrier Name: Qwest today New Carrier Services: Possibly, still evaluating options as of SoW date Carrier Contact: Carrier Phone #: Email: Date of Delivery: Type of Service: Dimarc extended by SP or Imagine: ADDITIONAL SITE(S) INFORMATION Site Name #2:Recreation Center Site Address: 90 Lake St. City: Avon State: CO Zip Code: 81620 Site contact: Same Site contact phone: Same Email: Same Equipment Type: System Type: IP Office PSTN Type: Analog trunks, T -1 from WAN connection type (if SCN):Fiber via Town Hall i LAN # of Digital endpoints: None Wire new or existing: Existing Site Name #3: Public Works Site Address: 500 Swift Gulch Rd State: CO Site contact phone: same System Type: IP Office # of IP endpoints: 24, in count above i Number of analog devices: 5 Applications at this remote site: Same as Town Hall City: Avon Zip Code: 81620 Email: same PSTN Type: Analog trunks, T1- from Town Hall Site contact: Same Equipment Type: WAN connection type (if SCN): PTP & Routers # of Digital endpoints: None # of IP endpoints: 22 f Number of analog devices: 12 Wire new or existing: Existing Applications at this remote site: Same as Town Hall ADDITIONAL NOTES IMAGINE TECHNOLOGIES, INC. APPRECIATES YOUR BUSINESS AND WE LOOK FORWARD TO PARTNERING WITH YOU ON THE SUCCESSFUL IMPLEMENTATION OF YOUR NEW COMMUNICATIONS SOLUTION. SIGNATURE BELOW CONSTITUTES AGREEMENT THAT THE ABOVE SERVICES AND ACTIVITIES FULLY DESCRIBE THE PROJECT DELIVERABLES AND WORKING AGREEMENT BETWEEN TOWN OF AVON AND IMAGINE TECHNOLOGIES. Acknowledged by Scott Wright Acknowledged by Mike Malone Scott Wright Client Signature Date I Imagine Technologies, Inc. Date 6 Imagine Technologies Building Your Success Through Communications Remittance Address: P.O. Box 4993 Englewood, CO 80155 Billing Inquires: 720 - 200 -6700 - Prompt 6 Customer Billing Address: Cindy Kershaw Town of Avon PO Box 975 Avon, CO 81620 970 - 748 -4034 IMAGINE /I/ Schedule B Maintenance Agreement Account Executive Bob Kadera 303 350 2409 Date 9/1/2010 Installation Address: Cindy Kershaw Town of Avon Town Hall - One Lake St. Avon, CO 81620 970 - 748 -4034 Service Commencement Date Coverage Options: UPON WARRANTY EXPIRATION JIP Office 8X5 Monday -Friday switch, servers, modules, terminals remote & onsite QUANTITY PORTS Description Term Monthly or Line Total (months) Prepaid 1 IPO IP500 V2 CNTRL UNIT 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 1 IPO IP500 V2 SYS SD CARD MUL 1 IPO IP500 EXT CARD PHONE 2 2 IPO IP500 EXTN CARD PHONE 8 1 IPO IP500 MC VCM 32 1 IPO IP500 TRNK PRI UNVRSL SNGL 1 IPO IP500 EXP MOD PHONE 16 1 IPO DVD R6 USER/ADMIN SET 2 IPO LIC IP500 T1 ADD 8CH 1 IPO LIC PREFRD (VM PRO) RFA LIC:1 1 IPO LIC VM PRO RFA 2 LIC:CU 1 IPO LIC VM PRO RFA 4 LIC:CU 2 IPO LIC VMPRO UMS 20 USER 2 IPO LIC R6 AV IP ENDPOINT 20 6 IPO LIC IP500 VCE NTWKG ADD 4 LR 4 IPO LIC RECEPTIONIST RFA 1 LIC:Ct 3 IPO LIC R6 PWR USER 20 4 AWTS 3645 WRLS PHONE 1 AWTS NETLINK AVPP 10 RHS 54 IP PHONE 9630G GRY 9630GD01A 15 IP PHONE 9640 GRY 9640D01A 3 9600 SBM24 BUTTON MOD GRY 2 AVAYA IP OFFICE Power Lead 2 AVAYA IPO 500 RACK MTG KIT 3 AV 115101 IP PHONE POWER WCAT 5 3 AVAYA 115010 PWR CORD 4 AVAYA 3641/3645 Std Battery 4 AVAYA 3641 ?3645 Charger Power Sply 1 AVAYA AVPP POWER SPLY N -A. 11 IMULTITECH FAX SERVER 48 MONTHLY $ Customer signature below indicates customer has read and agrees to the Terms MONTHLY PRICE 295.00 and Conditions of the applicable agreement. IMAGINE TECHNOLOGIES HELP DESK -- 888- 955 -4455 or support@imaginetechinc.com Customer Signature Imagine Technologies, Inc. Print Authodzed Name: Printed Accepted Name: Authorized Signature: Date: Accepted Signature: Date: Imagine Technologies Building Your Success Through Communications Remittance Address: P.O. Box 4993 Englewood, CO 80155 Billing Inquires: 720 - 200 -6700 - Prompt 6 qG)P)�. IMAGII MCHNOLOGIES Schedule B Maintenance Agreement Account Executive Date Bob Kadera 303 - 350 -2409 912010 Customer Billing Address: Cindy Kershaw Installation Address: Cindy Kershaw Town of Avon Town of Avon PO Box 975 Public Works - 0500 Swift Gulch Rd. Avon, CO 81620 Avon, CO 81620 970 - 748 -4034 970- 748 -4034 Service Commencement Date I Coverage Options: UPON WARRANTY EXPIRATION I IP Office 8X5 Monday - Friday switch, servers, modules, terminals remote & onsite QUANTITY PORTS Description Term Monthly or Line Total (months) Prepaid 1 IPO IP500 V2 CNTRL UNIT 48 MONTHLY ; 1 IPO IP500 V2 SYS SD CARD MUL 48 MONTHLY ; 2 IPO IP500 EXTN CARD PHONE 8 48 MONTHLY ; 1 IPO IP500 MC VCM 32 48 MONTHLY ; 1 IPO IP500 TRNK ANLG 4 UNI 48 MONTHLY $ 4 IPO LIC R6 AV IP ENDPOINT 1 48 MONTHLY $ 2 IPO LIC R6 AV IP ENDPOINT 5 48 MONTHLY $ 3 IPO LIC IP500 VCE NTWKG ADD 4 LIC-CU 48 MONTHLY $ 17 IP PHONE 9630G GRY 9630GD01A 48 MONTHLY $ 5 IP PHONE 9640 GRY 964OD01A 48 MONTHLY $ 1 AVAYA IP OFFICE POWER Lead 48 MONTHLY $ 1 AVAYA IPO 500 RACK MOUNTING KIT 48 MONTHLY ; $ $ $ S Customer signature below indicates customer has read and agrees to the Terms MONTHLY PRICE 155.00 and Conditions of the applicable agreement. IMAGINE TECHNOLOGIES HELP DESK -- 888- 955 -4455 or support @imaginetmhinc.cwm Customer signature Imagine Technologies, Inc. PnutAuthonzed Name: Pnnted Accepted Name: Authonzed Signature: Date: Accepted Signature: Date: Imagine Technologies Building Your success Through Communications Remittance Address: P.O. Box 4993 Englewood, CO 80155 Billing Inquires: 720 - 200 -6700 - Prompt 6 IhfAG�TEtNM" ' .. Schedule B Maintenance Agreement Account Executive Bob Kadera 303 350 2409 Date 912010 Customer Billing Address: Cindy Kershaw Installation Address: Cindy Kershaw Town of Avon Town of Avon PO Box 975 Recreation Center - 90 Lake St. Avon, CO 81620 Avon, CO 81620 970 - 748 -4034 970- 748 -4034 Service Commencement Date I coverage Options: UPON WARRANTY EXPIRATION IIP Office 8X5 Monday -Friday switch, servers, modules, terminals remote & onsite QUANTITY PORTS Description Term Monthly or Line Total (months) Prepaid 1 IPO IP500 V2 CNTRL UNIT 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 48 MONTHLY $ 1 IPO IP500 V2 SYS SD CARD MUL 1 IPO IP500 EXTN CARD PHONE 8 1 IPO IP500 MC VCM 32 1 IPO IP500 TRNK ANLG 4 UNI 2 IPO LIC R6 AV IP ENDPOINT 1 2 IPO LIC R6 AV IP ENDPOINT 5 3 IPO LIC IP500 VCE NTWKG ADD 4 LIC CU 17 IP PHONE 9630G GRY 9630GD01A 7 IP PHONE 9640 GRY 964OD01A 1 AVAYA IP OFFICE Power Lead (Earthed) US 1 AVAYA IPO 500 RACK MOUNTING KIT $ $ $ $ $ $ $ $ $ $ $ Customer signature below indicates customer has read and agrees to the Terms MONTHLY PRICE 140.00 and Conditions of the applicable agreement. IMAGINE TECHNOLOGIES HELP DESK -- 888- 955 -4455 or support@imaginetechinc.com Customer Signature Imagine Technologies, Inc. PrintAuthonzed Name: Printed Accepted Name: Authorized signature: Date: Accepted signature. Date: AVAYA AVAYA GLOBAL SOFTWARE LICENSE TERMS THIS END USER LICENSE AGREEMENT ( "SOFTWARE LICENSE TERMS ") GOVERNS THE USE OF AVAYA'S PROPRIETARY SOFTWARE AND THIRD -PARTY PROPRIETARY SOFTWARE. READ THESE SOFTWARE LICENSE TERMS CAREFULLY, IN THEIR ENTIRETY, BEFORE INSTALLING, DOWNLOADING OR USING THE AVAYA SOFTWARE (AS DEFINED BELOW). BY INSTALLING, DOWNLOADING OR USING THE AVAYA SOFTWARE, OR AUTHORIZING OTHERS TO DO SO, YOU, ON BEHALF OF YOURSELF AND THE ENTITY FROM WHOM YOU ARE INSTALLING, DOWNLOADING OR USING THE SOFTWARE (HEREINAFTER REFERRED TO INTERCHANGEABLY AS "YOU" AND "END USER "), AGREE TO THESE TERMS AND CONDITIONS AND CREATE A BINDING CONTRACT BETWEEN YOU AND AVAYA INC. OR THE APPLICABLE AVAYA AFFILIATE ( "AVAYA "). IF YOU ARE ACCEPTING THESE TERMS ON BEHALF OF A COMPANY OR OTHER LEGAL ENTITY, YOU REPRESENT THAT YOU HAVE THE AUTHORITY TO BIND SUCH ENTITY TO THESE SOFTWARE LICENSE TERMS. ANY USE OF THE SOFTWARE WILL CONSTITUTE YOUR ASSENT TO THESE SOFTWARE LICENSE TERMS (OR RATIFICATION OF PREVIOUS CONSENT). IF YOU DO NOT HAVE SUCH AUTHORITY OR DO NOT WISH TO BE BOUND BY THESE SOFTWARE LICENSE TERMS, YOU MUST RETURN OR DELETE THE SOFTWARE WITHIN TEN (10) DAYS OF DELIVERY FOR A REFUND OF THE FEE, IF ANY, YOU PAID FOR THE LICENSE OR IF SOFTWARE IS ACCESSED ELECTRONICALLY, SELECT THE "DECLINE" BUTTON AT THE END OF THESE SOFTWARE LICENSE TERMS. A. Scope. These Software License Terms are applicable to anyone who downloads and /or installs Avaya Software, purchased from Avaya Inc., any Avaya Affiliate, or an authorized Avaya reseller (as applicable) under a commercial agreement with Avaya or an authorized Avaya reseller ( "Agreement "). Unless otherwise agreed to by Avaya in writing, Avaya does not extend this license if the Software was obtained from anyone other than Avaya, an Avaya Affiliate or an Avaya authorized reseller, and Avaya reserves the right to take legal action against you and anyone else using or selling the Software without a license. To the extent there is a conflict between these Software License Terms and another Agreement, the order of precedence shall be (i) your Agreement with Avaya if you purchased from Avaya Inc. or an Avaya Affiliate, or (ii) these Software License Terms if you purchased from an authorized Avaya reseller, except with respect to third party elements subject to a Shrinkwrap License or other Third Party Terms, in which case the Shrinkwrap License or other Third Party Terms will prevail. "Avaya Affiliate" means any entity that is directly or indirectly controlling, controlled by, or under common control with Avaya Inc. For purposes of this definition, "control" means the power to direct the management and policies of such party, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. B. License Grant. Avaya grants you a personal, non- sublicensable, non - exclusive, non - transferable license to use Software and Documentation obtained from Avaya or an Avaya authorized reseller and for which applicable fees have been paid for your internal business purposes at the indicated capacity and features and within the scope of the applicable license types described below and at locations where the Software is initially installed. "Documentation" means Avaya information and manuals containing operating instructions and performance specifications that Avaya generally makes available to users of its products and delivers with the Software. Documentation does not include marketing materials. (i) Right to Move License Entitlements. Notwithstanding the foregoing, You may move right to use license entitlements (RTU's) from one location to another within the country where the Software was originally purchased or anywhere within the European Union (EU) if purchased within the EU in accordance with Avaya's then - current software license move policy for that Software which is available upon request subject to the following conditions: a. You shall provide prompt written notice to Avaya or an Authorized Provider of any RTU moves including but not limited to, the number and type of licenses moved, the location of the original Server and the location of the new Server, the date of such RTU moves and any other information that Avaya may reasonably request; Page i of 5 Avaya Global Software License Terms O 2009 Avaya Inc, All rights reserved Avaya and the Avaya Logo are trademarks of Avaya Inc. and may be registered in certain jurisdictions All trademarks identified by the ® or TM are registered trademarks, service marks or trademarks, respectively, of Avaya Inc All other trademarks are the property of their respective owners Created on 04/08/09 AVAYA b. You may only move RTU's to and from Designated Processors or Servers supporting the same Software application; c. You acknowledge that maintenance services do not cover system errors caused by moves not performed by Avaya, and if any such transfer results in a requirement for Avaya system engineering or requires the use of on -site Avaya personnel, you will be charged the Time & Materials fees for such activity; and d. If your maintenance coverage differs on licenses on the same product instance at the location of the new Server, Service updates, recasts and/or fees may apply. (ii) Non - Production License Grant. With respect to Software distributed by Avaya to you for non - production purposes, Avaya grants to you, subject to the terms and conditions contained herein, a personal, nonexclusive, nontransferable and non- sublicensable right to use the Software in a non - production environment solely for testing, development or other non - commercial purposes on a single computer ( "Non- Production License "). C. All Rights Reserved. Except for the limited license rights expressly granted in these Software License Terms, Avaya reserves all rights in and to the Software and Documentation and any modifications thereto. You will own only the hardware or physical media on which the Software is stored, if any. D. General License Restrictions. To the extent permissible under applicable law, you agree not to: (i) decompile, disassemble, or reverse engineer the Software; (ii) alter, modify or create any derivative works based on the Software or Documentation; (iii) merge the Software with any other Software other than as expressly set forth in the Documentation; (iv) use, copy, sell, sublicense, lease, rent, loan, assign, convey or otherwise transfer the Software or Documentation except as expressly authorized by the Agreement with a Avaya; (v) distribute, disclose or allow use of the Software or Documentation, in any format, through any timesharing service, service bureau, network or by any other means; (vi) allow any service provider or other third party, with the exception of Avaya's authorized resellers and their designated employees ( "Authorized Providers ") who are acting solely on behalf of and for the benefit of End User, to use or execute any software commands that cause the Software to perform functions that facilitate the maintenance or repair of any product except that a service provider or other third party may execute those software commands that, as designed by Avaya, would operate if a user is logged into a product using a customer level login and Maintenance Software Permissions ( "MSPs ") were not enabled or activated; (vii) gain access to or the use of any Software or part thereof without authorization from Avaya; (viii) enable or activate, or cause, permit or allow others to enable or activate any logins reserved for use by Avaya or Authorized Providers; or (ix) permit or encourage any third party to do so. Authorized Providers shall be obligated to comply with the terms and provisions of these Software License Terms. End User shall advise any third party, including any Authorized Provider, who accesses or uses any Software of the terms and provisions of these Software License Terms. End User shall be responsible for such third party's failure to comply and shall indemnify Avaya for any damages, loss, expenses or costs, including attorneys' fees and costs of suit, incurred by Avaya as a result of non - compliance with this section. Notwithstanding the foregoing, if the Software is rightfully located in a member state of the European Union and End User needs information about the Software in order to achieve interoperability of an independently created software program with the Software, End User will first request such information from Avaya. Avaya may charge End User a reasonable fee for the provision of such information. If Avaya refuses to make such information available, then End User may take steps, such as reverse assembly or reverse compilation, to the extent necessary solely in order to achieve interoperability of the Software with an independently created software program. To the extent that the End User is expressly permitted by applicable mandatory law to undertake any of the activities listed in this section End User will not exercise those rights until End User has given Avaya twenty (20) days written notice of its intent to exercise any such rights. E. Backup Copies. End User may create a reasonable number of archival and backup copies of the Software and the Documentation, provided all proprietary rights notices, names and logos of Avaya and its suppliers are duplicated on each copy. F. Warranty. Avaya provides a limited warranty on its Software and Hardware. Avaya's standard warranty language as well as information regarding support while under warranty, is available through the following website: http:!Isupport.avaya.com. Please note that if you are acquiring the Software or Hardware from an authorized Avaya reseller outside of the United States and Canada, the warranty is provided to you by said Avaya reseller and not by Avaya. EXCEPT AS REFERENCED HEREIN, THE SOFTWARE IS PROVIDED "AS IS" AND NEITHER Page 2 of 5 Avaya Global Software License Terms 0 2009 Avaya Inc All rights reserved Avaya and the Avaya Logo are trademarks of Avaya Inc. and may be registered in certain jurisdictions All trademarks identified by the ® or TM are registered trademarks, service marks or trademarks, respectively, of Avaya Inc. All other trademarks are the property of their respective owners. Created on 04r08,109 AVAVA AVAYA NOR ITS SUPPLIERS MAKES ANY EXPRESS REPRESENTATIONS OR WARRANTIES WITH REGARD TO ANY PRODUCTS OR SERVICES OR OTHERWISE RELATED TO THE AGREEMENT OR SOFTWARE LICENSE TERMS. AVAYA DOES NOT WARRANT UNINTERRUPTED OR ERROR FREE OPERATION OF PRODUCTS. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AVAYA DISCLAIMS ALL WARRANTIES IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON - INFRINGEMENT. G. Compliance. At Avaya's request and upon reasonable prior written notice, Avaya will have the right to inspect End User's compliance with these Software License Terms. H. Termination of License. If you breach the license limitations or restrictions in these Software License Terms and if within ten (10) business days of your receipt of a reasonably detailed written request to cure, you have not cured all breaches of license limitations or restrictions, Avaya may, with immediate effect, terminate the Software licenses granted in these Software License Terms without prejudice to any available rights and remedies in contract and for infringement. Upon termination or expiration of the license for any reason, you shall immediately return the Software and any copies to Avaya, or, at Avaya's discretion and written notice to you, you shall permanently destroy all copies of the Software and any related materials in your possession or control. The provisions concerning confidentiality, indemnity, license restrictions, export control, and all limitations of liability and disclaimers and restrictions of warranty (as well as any other terms which, by their nature, are intended to survive termination) will survive any termination or expiration of the Software License Terms. I. License Types. Avaya grants you a license within the scope of the license types described below. Where the order documentation does not expressly identify a license type, the applicable license will be a Designated System License. The applicable number of licenses and units of capacity for which the license is granted will be one (1), unless a different number of licenses or units of capacity is specified in the documentation or other materials available to you. "Designated Processor" means a single stand -alone computing device. "Server" means a Designated Processor that hosts a software application to be accessed by multiple users. "Software" means the computer programs in object code, originally licensed by Avaya and ultimately utilized by you, whether as stand- alone products or pre - installed on Hardware. "Hardware" means the standard hardware products, originally sold by Avaya and ultimately utilized by you. Designated System(s) License (DS). End User may install and use each copy of the Software only on a number of Designated Processors up to the number indicated in the order. Avaya may require the Designated Processor(s) to be identified in the order by type, serial number, feature key, location or other specific designation, or to be provided by End User to Avaya through electronic means established by Avaya specifically for this purpose. Concurrent User License (CU). End User may install and use the Software on multiple Designated Processors or one or more Servers, so long as only the licensed number of Units are accessing and using the Software at any given time. A "Unit" means the unit on which Avaya, at its sole discretion, bases the pricing of its licenses and can be, without limitation, an agent, port or user, an e -mail or voice mail account in the name of a person or corporate function (e.g., webmaster or helpdesk), or a directory entry in the administrative database utilized by the Software that permits one user to interface with the Software. Units may be linked to a specific, identified Server. Database License (DL). End User may install and use each copy of the Software on one Server or on multiple Servers provided that each of the Servers on which the Software is installed communicates with no more than a single instance of the same database. CPU License (CP). End User may install and use each copy of the Software on a number of Servers up to the number indicated in the order provided that the performance capacity of the Server(s) does not exceed the performance capacity specified for the Software. End User may not re- install or operate the Software on Server(s) with a larger performance capacity without Avaya's prior consent and payment of an upgrade fee. Page 3 of 5 Avaya Global Software License Terms O 2009 Avaya Inc All rights reserved. Avaya and the Avaya Logo are trademarks of Avaya Inc. and maybe registered in certain jurisdictions. All trademarks identified by the ® or TM are registered trademarks, service marks or trademarks, respectively, of Avaya Inc All other trademarks are the property of their respective owners Created on 04 /08/09 AVAYA Named User License (NU). You may: (i) install and use the Software on a single Designated Processor or Server per authorized Named User (defined below); or (ii) install and use the Software on a Server so long as only authorized Named Users access and use the Software. "Named User," means a user or device that has been expressly authorized by Avaya to access and use the Software. At Avaya's sole discretion, a "Named User" may be, without limitation, designated by name, corporate function (e.g., webmaster or helpdesk), an e-mail or voice mail account in the name of a person or corporate function, or a directory entry in the administrative database utilized by the Software that permits one user to interface with the Software. Shrinkwrap License (SR). You may install and use the Software in accordance with the terms and conditions of the applicable license agreements, such as "shrinkwrap" or "clickthrough" license accompanying or applicable to the Software ( "Shrinkwrap License "). J. Third -party Components. Certain software programs or portions thereof included in the Software may contain software (including open source software) distributed under third party agreements ( "Third Party Components "), which may contain terms that expand or limit rights to use certain portions of the Software ( "Third Party Terms "). Information identifying the copyright holders of the Third Party Components and the Third Party Terms that apply is available on Avaya's website at: http :f /support.avaya.comi'copyright. K. Limitation of Liability. EXCEPT FOR PERSONAL INJURY CLAIMS, WILLFUL MISCONDUCT AND END USER'S VIOLATION OF AVAYA'S OR ITS SUPPLIERS INTELLECTUAL PROPERTY RIGHTS, INCLUDING THROUGH A BREACH OF THE SOFTWARE LICENSE TERMS AND TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, NEITHER AVAYA OR ITS SUPPLIERS NOR END USER SHALL BE LIABLE FOR (i) ANY INCIDENTAL, SPECIAL, STATUTORY, INDIRECT OR CONSEQUENTIAL DAMAGES, OR (ii) FOR ANY LOSS OF PROFITS, REVENUE, OR DATA, TOLL FRAUD, OR COST OF COVER AND (iii) DIRECT DAMAGES ARISING UNDER THESE SOFTWARE LICENSE TERMS IN EXCESS OF THE PURCHASE PRICE AND FEES PAID FOR THE PRODUCTS OR SERVICES GIVING RISE TO THE CLAIM. L. Protection of Confidential Software and Documentation. End User acknowledges that the Software and Documentation are regarded as confidential by Avaya and its suppliers ( "Confidential Information ") and End User agrees at all times to protect and preserve in strict confidence the Software and Documentation. M. Protection of Personal Data. The use of the Software may require the processing of personal data pertaining to you or to your personnel. Personal data required to use the Software will need to be submitted to Avaya. Failing the submission of such data, the use of the Software will not be possible. You or your personnel have a right to access and correct erroneous personal data pertaining to you or your personnel and to object for legitimate reasons to the processing and transfer of these data. You can exercise this right by contacting in writing the Data Privacy Officer of the applicable Avaya Affiliate. N. High Risk Activities. The Software is not fault - tolerant and are not designed, manufactured or intended for any use requiring fail -safe performance in which the failure of the Software could lead to death, serious personal injury, severe physical or environmental damage ( "High Risk Activities "). This includes the operation of aircraft or nuclear facilities. You agree not to use, or license the use of, the Software in connection with any High Risk Activities. O. Export Control. You are advised that the Software is of U.S. origin and subject to the U.S. Export Administration Regulations (EAR); diversion contrary to U.S. law and regulation is prohibited. You agree not to directly or indirectly export, re- export, import, download, or transmit the Software to any country, end user or for any use that is prohibited by applicable U.S. regulation or statute (including but not limited to those countries embargoed by the U.S. government). You represent that neither the U.S. Bureau of Industry and Security (BIS) nor any other governmental agency has issued sanctions against End User or otherwise suspended, revoked or denied End User's export privileges. You agree not to use or transfer the Software for any use relating to nuclear, chemical or biological weapons, or missile technology, unless authorized by the U.S. Government by regulation or specific written license. Additionally, you are advised that the Software may contain encryption algorithm or source code that may be limited for export to government or military end users without a license issued by the U.S. BIS and any other country's governmental agencies, where applicable. Lastly, you agree not to directly or indirectly export, re- Page 4 of 5 Avaya Global Software License Terms ® 2009 Avaya Inc All rights reserved Avaya and the Avaya Logo are trademarks of Avaya Inc and may be registered m certain Itmsdtcuons. All trademarks identified by the ®or TM are registered trademarks, service marks or trademarks, respectively. of Avaya Inc All other trademarks are the property of their respective owners. Created on 04108/09 AVAYA export, import, or transmit the Software contrary to the laws or regulations of any other governmental entity that has jurisdiction over such export, import, transmission, or use. P. U.S Government End Users. The Software shall be classified as "commercial computer software" and the Documentation is classified as "commercial computer software documentation" or "commercial items," pursuant to FAR 12.212 or DFAR 227.7202, as applicable. Any use, modification, reproduction, release, performance, display or disclosure of the Software or Documentation by the Government of the United States shall be governed solely by the terms of these Software License Terms and shall be prohibited except to the extent expressly permitted by the terms of these Software License Terms. Q. Acknowledgement. End User acknowledges that certain Software may contain programming that: (i) restricts, limits and/or disables access to certain features, functionality or capacity of such Software subject to the End User making payment for licenses to such features, functionality or capacity; or (ii) periodically deletes or archives data generated by use of the Software and stored on the applicable storage device if not backed up on an alternative storage medium after a certain period of time. R. Miscellaneous. These Software License Terns will be governed by New York State laws, excluding conflict of law principles and the United Nations Convention on Contracts for the International Sale of Goods. If a dispute cannot be settled by good faith negotiation between the parties within a reasonable period of time, and to the extent authorized by applicable law, it must be finally settled upon request of either party by arbitration to be held in accordance with the Rules of Arbitration of the International Chamber of Commerce by a single arbitrator appointed by the parties or (failing agreement) by an arbitrator appointed by the President of the International Chamber of Commerce (from time to time). The arbitration will be conducted in the English language, at a location agreed by the parties or (failing agreement) ordered by the arbitrator. The arbitrator will have authority only to award compensatory damages and will not award punitive or exemplary damages. The arbitrator will not have the authority to limit, expand or otherwise modify the Software License Terms. The ruling by the arbitrator will be final and binding on the parties and may be entered in any court having jurisdiction. Avaya and you will each bear its own attorneys' fees associated with the arbitration. Notwithstanding the foregoing, Avaya shall be entitled to take immediate legal action where required to protect its confidential or proprietary information, or to obtain any interim injunction. If any provision of these Software License Terms is determined to be unenforceable or invalid, these Software License Terms will not be rendered unenforceable or invalid as a whole, and the provision will be changed and interpreted so as to best accomplish the objectives of the original provision within the limits of applicable law. The failure to assert any rights under the Software License Terms, including, but not limited to, the right to terminate in the event of breach or default, will not be deemed to constitute a waiver of the right to enforce each and every provision of the Software License Terms in accordance with their terms. If you move any Software, and as a result of such move, a jurisdiction imposes a duty, tax, levy or fee (including withholding taxes, fees, customs or other duties for the import and export of any such Software), then you are solely liable for, and agree to pay, any such duty, taxes, levy or other fees. Agreement in English. The parties confirm that it is their wish that these Software License Terms, as well as all other documents relating hereto, including all notices, have been and shall be drawn up in the English language only. Les parties aux presentes conferment leur volonte que cette convention, de meme que tous les documents, y compris tout avis, qui s'y rattachent, soient rediges en langue anglaise. Las partes ratifican que es su voluntad que este Contrato, asi como cualquier otro documento relacionado con el mismo, incluyendo todo tipo de notificaciones, han sido redactados y deberan continuar siendo redactados unicamente en el idioma ingles. Page 5 of 5 Avaya Global Software License Terms O 2009 Avaya Inc All rights reserved Avaya and the Avaya Logo are trademarks of Avaya Inc and may be registered in certamlur sdtctlons All trademarks identified by the ® or TM are registered trademarks, service marks or trademarks, respectively, of Avaya Inc All other trademarks are the property of their respective owners. Created on 04/08/09 AVAYA WARRANTY (United States) For End User Purchases from a Reseller 1. AVAYA WARRANTY 1.1 Avaya Warranty. Avaya warrants to End User that during the applicable warranty period, the Products will conform to and operate in accordance with the applicable "Documentation" in all material respects. The term "Documentation" means Avaya's information manuals containing operating instructions and performance specifications that Avaya or its suppliers generally makes available to users of its Products and/or is delivered with the Products. Documentation does not include marketing materials. The Products are not fault - tolerant and are not designed, manufactured or intended for any use requiring fail -safe performance in which the failure of a Product could lead to death, serious personal injury, severe physical or environmental damage ( "High Risk Activities "). This includes the operation of aircraft or nuclear facilities. End User agrees not to use, or license the use of, the Products in connection with any High Risk Activities 1.2 Warranty Period. The warranty periods for Products are as follows: (i) Registration Program Products: with regard to Products that have an Avaya registration program available, the warranty period is the Specified Warranty Period (as defined below) beginning on the installation or enablement date, not to exceed eighteen (18) months from the Shipment Date. The term "Shipment Date" refers to (a) the date when Avaya delivers possession of the Product to a carrier for shipment, or (b) in the case of Software features that can be enabled by Avaya remotely or delivered via electronic means, the date when the features are enabled or the Software is downloaded to the target processor; (ii) Other Products: with regard to Products that do not have an Avaya registration program available, the warranty period is the greater of (a) the Specified Warranty Period (as defined below) plus three (3) months from the Shipment Date (as defined above), or (b) the Specified Warranty Period beginning on the proof of purchase date from the authorized Avaya distributor (the "Distributor ") from which Reseller purchased the Product, not to exceed eighteen (18) months from the Shipment Date. (iii) Specified Warranty Period. Unless a different period is specified in the applicable Order the "Specified Warranty Period" is (a) twelve (12) months for Hardware, beginning on the In- Service Date for Hardware installed by Avaya's employees, independent contractors (including Resellers) and/or subcontractors and on the Shipment Date for all other Hardware and (b) 90 days for Software, beginning on the In- Service Date for Software installed by Avaya's employees, independent contractors (including Resellers) and/or subcontractors and on the Shipment Date for all other Software. "In Service Date" means the date on which Avaya's employees, independent contractors and/or subcontractors (including Resellers) install the Products at the End User's premises. "Hardware" means the standard hardware products that End User orders or Avaya delivers under the Agreement. "Software" means the computer programs in object code form that End User orders or Avaya delivers under the Agreement, whether as stand -alone products or pre - installed on Hardware. Hardware or Software does not include any customized deliverables that Avaya creates specifically for End User 1.3 Warranty Exclusions. The warranties do not extend to any damages, malfunctions, or non - conformities caused by (i) use of the Products in violation of the license granted by Avaya or in a manner inconsistent with the Documentation; (ii) use of non -Avaya furnished equipment, software, or facilities with Products (except to the extent provided in the Documentation); (iii) any failure to follow installation, operation or maintenance instructions; (iv) failure to permit Avaya or its suppliers timely access, remote or otherwise, to Products; (v) failure to implement all new Updates (defined below) to Software; (vi) Products that have had their original manufacturer's serial numbers altered, defaced or deleted; (vii) Products that have been serviced or modified by a party other than Avaya or a Reseller. An "Update" is a change in the software that typically provides maintenance correction only and is designated as a change in the digit to the right of the second decimal point (e.g. n.y.[z]). 1.4 Products from Third Parties. End User's decision to acquire or use Third Party Products is End User's sole responsibility, even if Avaya or a Reseller helps End User identify, evaluate or select them. For purposes of this Agreement, "Third Party Products" shall mean any products manufactured by a party other than Avaya, and may include, without limitation, products ordered by End User from Reseller pursuant to Avaya's recommendations. However, components of Avaya - branded Products are not Third Party Products if they are both: (i) embedded in Products (i.e., not recognizable as standalone items); and (ii) are not identified as separate items on Avaya's price list, quotes, order specifications forms or Documentation. AVAYA IS NOT RESPONSIBLE FOR, AND WILL Avaya Warranty (US) February 2009 02009 Avaya Inc. All Rights Reserved NOT BE LIABLE FOR, THE QUALITY OR PERFORMANCE OF SUCH THIRD PARTY PRODUCTS. 1.5 Toll Fraud. Avaya does not warrant that Products or services will prevent Toll Fraud. Prevention of Toll Fraud is the responsibility of End User. The term "Toll Fraud" refers to the unauthorized use of telecommunications services or facilities accessed through or connected to the Products. 1.6 Geographic Scope. The warranty in this Section 1 shall apply only within the United States. 1.7 Disclaimers. EXCEPT AS SET FORTH IN THIS SECTION 1, NEITHER AVAYA NOR ITS SUPPLIERS MAKE ANY OTHER EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH REGARD TO ANY PRODUCTS OR SERVICES, AND AVAYA AND ITS SUPPLIERS DISCLAIM THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT. AVAYA AND ITS SUPPLIERS DO NOT WARRANT UNINTERRUPTED OR ERROR FREE OPERATION OF PRODUCTS. 1.8 Warranty Procedures and Remedies. If a Product does not conform with the warranty above, End User shall notify Reseller in writing within the applicable warranty period, describing in reasonable detail how the Product failed to be in conformance and including evidence that the Product is under warranty. Avaya at its option will (i) repair or replace the nonconforming Product, or (ii) refund to the End User or the authorized Avaya distributor ( "Distributor ") the purchase price and/or license fee paid to Avaya by Distributor upon the return of the nonconforming Product to Avaya. Under no event will Avaya be obligated to refund any amounts in excess of the purchase price and/or license fee paid to Avaya for the nonconforming Product. If Avaya elects to replace the nonconforming Product, End User shall return the nonconforming Product to Reseller in accordance with Avaya's standard product return procedures. Replacement Products may be new, factory reconditioned, refurbished, re- manufactured or functionally equivalent and will be furnished only on an exchange basis. Returned Hardware that has been replaced by Avaya will become Avaya's property. Replacement Products are warranted as above for the remainder of the original applicable Product warranty period. THESE REMEDIES ARE END USER'S SOLE AND EXCLUSIVE REMEDIES AND ARE IN LIEU OF ANY OTHER RIGHTS OR REMEDIES END USER MAY HAVE AGAINST AVAYA OR ITS SUPPLIERS WITH RESPECT TO THE NONCONFORMANCE OF PRODUCTS. Avaya warranty (US) February 2009 02009 Avaya Inc. All Rights Reserved Memorandum To: Honorable Mayor and Town Council Initials Thru: Larry Brooks, Town Manager From: Sally Vecchio, Asst. Town Manager — Community Development Date: September 21, 2010 Re: Public Hearing to Consider First Reading of Ordinance 10 -14 Amending the Avon Municipal Code by Enacting Title 7: The Avon Development Code, Repealing Title 16: Subdivisions, Repealing Title 17: Zoning, and Repealing Portions of Title 2: Administration and Personnel. Summary This is the first reading by the Avon Town Council of Ordinance 10 -14, enacting the Avon Development Code and repealing Title 16 (Subdivision), Title 17 (Zoning) as well as related sections of Title 2 (Administration & Personnel), Title 5 (Building and Construction) and Title 8 (Health and Safety) of the Avon Municipal Code. Ordinance 10 -14 is attached as Exhibit A. Written public comments received by the Community Development Department before 5:00 pm on September 23, 2010 are attached as Exhibit B. Written comments received after this time will be provided to Council at the meeting. Background On July 6, 2010, the Planning and Zoning Commission (PZC) approved Resolution 10 -03 (Exhibit C) recommending adoption of the Avon Development Code with conditions. The Town Council began its review of the Code on July 23, 2010. After considering the PZC recommendation of approval and all public comments the Council completed its review of the proposed Code on August 24, 2010 and directed staff to prepare a revised Code for a first reading to consider Ordinance 10 -14, adopting the Avon Development Code. All written public comments provided during the Council review can be found on the Town's webpage. SUMMARY OF KEY REVISIONS Below is summary of the key revisions to the Code that the Council agreed on hearing staff recommendations and public comments. Additional background information is also provided for the following Code revisions: the new Housing Mitigation requirement for commercial development, the Duplex Subdivision Criteria, and the Design Standards. GENERAL PROVISIONS (Chapter 7.04) Clarifies that the Avon Comprehensive Plan is binding, and that compliance and consistency with the Plan shall be a criterion for reviewing development applications (Sec 7.04.090). Non - Conforming Structures (Sec 7.04.120)). Revised to allow additions or alternations to non - conforming structures which meet the requirements of the new Code. DEVELOPMENT REVIEW PROCEDURES (Chapter 7.16) Referrals to Other Agencies (Sec 7.16.020(c)(2)). Includes timeframe for outside agency review. Public Notice (Sec 7.16.020(d)(2)). Revised to require Town to be responsible for mailing public notices at applicant's expense. Public Hearing (Sec 7.16.020(e)). Revised to require scheduling of a public hearing within 75 day of Town acceptance of a complete application. Code Text Amendment (Sec 7.16.040) Revised to permit Avon property- owners and any registered elector to propose an amendment to the Development Code. Planned Unit Development (Sec 7.16.060) • Revised to permit all property in the Town to be eligible to apply for a PUD approval; • Revised to allow a PUD approval to include reduced parking requirements and road pavement widths. Subdivisions (Sec 7.16.070) • Applicability expanded to include subdivision of condominiums, apartment or other multiple dwelling units, or the creation of estate in airspace. • Duplex Subdivision has been added as a subdivision category requiring Final Plat approval by the PZC with appeal to the Town Council. • Ability to Service letter from appropriate utilities required for Final Plat approval. • Duplex Subdivision Criteria (Sec 7.16.070(8)). A purpose statement has been included, along with a minimum lot size and maximum unit size requirement, building envelope requirements, a neighborhood compatibility requirement, and a single access requirement. Duplex Subdivisions During it review of the Code, the Council directed staff to work with PZC to develop criteria that would address the past problems that property - owners and the Town have encountered with considering whether to approve a subdivision of duplex lot into to two single - family lots. Council noted that his has been a particular concern in the Wildridge community, which is governed by development regulations of the Wildridge PUD. If a duplex lot is part of an approved PUD, such as the Wildridge PUD, the change in use and housing type from duplex use to single family use may require a PUD amendment before a Final Plat is approved. The Town's current PUD amendment process requires that the amendment or change in the PUD provide a public benefit, in accordance with the Sec 17.28.085, AMC. The public benefits criteria have historically been addressed by the applicant offering to give up some density rights or to provide a deed - restricted unit in exchange for a re- subdivision. The public benefit criteria are difficult to address with a duplex subdivision given the low density to begin with. In addition, residents in Wildridge have expressed concerns that such subdivisions only create more large clustered homes, which is inconsistent with the primary tenets of the Wildridge Design Guidelines, which are to preserve existing land forms and minimize the visual impact of development. The proposed PUD Amendment process requires approval by the Town Council but does not include the public benefit requirement. The Final Plat process for Duplex Subdivision has been revised to require approval only by the PZC. These processes provide sufficient opportunity for public review and evaluation of the specific site considerations and the proposed development criteria. The criteria for reviewing a Duplex Subdivision was base on what PZC believed to be the purpose of permitting such subdivisions, which is to break up the bulk and mass of larger duplex structures, and to ensure adequate separation between the proposed single family homes. 2 Appeal Procedures (Sec 7.16.160) have been clarified to require Council to conduct a public hearing within 45 days of a written request for appeal. ZONING DISTRICTS AND OFFICIAL ZONING MAP (Chapter 7.20) Mixed Use Commercial Districts (Sec 7.20.080) The following revisions were made to all three commercial zone districts (Neighborhood Commercial, Mixed Use Commercial and Town Center): • Floor Area Ratios (minimum and maximum) and Max Dwelling Unit requirements were removed and a provision added that dedication of water rights was a requirement for development which exceed the Single Family Equivalent (SFE) water right allocations for the lots. • Maximum Lot Coverage was reduced back to existing conditions with a provision that would allow greater lot coverage if employee housing is provided in accordance with the development bonus criteria. • In the Town Center Zone District - development which exceeds 50% lot coverage must meet the Housing Mitigation Requirements (Sec 7.20.080 (c)(1), which requires mitigation in the amount of 10% of the estimated number of employees generated by the development. On -site mitigation is preferred, although the Council may consider off -site housing or cash -in -lieu. • The Development Bonus Requirements were removed. COMMERCIAL ZONE DISTRICTS & HOUSING MITIGATION REQUIREMENTS The Council did not find that the FAR and Bonus Development provisions furthered the Town's goals of providing more density and affordable housing opportunities in the Town's commercial areas (particularly Town Center Accordingly, the Council directed staff to revise the Commercial Zone District regulations to 1) permit increases in residential density with sufficient water rights and 2) to allow development to build up to the maximum height, setbacks and lot coverage of the zone district, without having to provide a public benefit. If a development wants to modify the zone district regulations, then the PUD process is available. In addition, the Council felt that commercial development projects should be required to mitigate housing demand created by their projects, rather than making it a public benefit option associated with a development bonus for the project. Accordingly, a Housing Mitigation Requirement was included in the Code, which is triggered when a developer wants to increase the maximum lot coverage requirements. In this case, an applicant would be required to provide housing sufficient to mitigate at least 10% of the estimated number of employees generated by the development. DEVELOPMENT STANDARDS (Chapter 7.28) Driveways in Mountainous Terrain (Sec 7.28.030(d)(2). • Applicability was revised to include lots with slopes in excess of 30% (previously 50 %). • The criteria for driveways crossing steep slopes were revised and the approval was changed from Town Engineer to PZC. • The length of shared drive lanes was increased from 500 ft to 1,000 ft. Mobility and Connectivity (Sec 7.28.040) • Weather Protection for Pedestrian Areas was moved to Design Standards. 3 Landscaping (Sec 7.28.050) • Permission from Director required prior to removing any native landscaping (dead or alive). • Retaining Walls. Limit on number of terraces removed, and walls over 7ft high are permitted with PZC approval. Design Standards (Sec 7.28.060) • Optimal solar access was added to list of purpose statements. • Generally Applicable Standards • Construction activity is permitted in Site Disturbance Envelope with PZC approval. • Building Materials — requirement that all structures must include at least 2 exterior materials, deleted. Cementious board added to permitted materials. • Weather Protection for Pedestrian Areas added (moved from Mobility /Connectivity). • Maximum Length of Roofline removed. • Materials and Colors added. • Residential Design • Maximum Building Length removed. • Building Height on Steep Slopes was revised. Specific setback requirements were removed, and pictures of preferred design were added. • Building Design. Specific dimensional requirements were removed, and pictures of preferred design were added. • Material and Colors moved to General Design Standards. • Single Family Duplex Design. Specific dimensional requirements for front door entries were removed, and pictures of preferred design were added. • Townhouse Design. Specific dimensional requirements for front door entries landscaped areas, garage configurations, driveways, and building design were removed, and pictures of preferred design were added. • Multifamily Design. Specific dimensional requirements for front door entries landscaped areas, garage configurations, driveways, and building design were removed, and pictures of preferred design were added. • Residential Parking. Specific dimensional requirements were removed, and pictures of preferred design were added. • Mixed -Use and Non Residential Design. • Four sided Architecture, revised to design with "equal care ". • Consistent Architectural Design changed to Compatible Design. • Vertical and Horizontal Articulation changed to Scale and Massing. • Entrance Orientation changed to Storefronts and Pedestrian Entrances. ■ Storefront entrance intervals changed from 50 ft to 32 ft. • Building Materials was revised to require materials that are authentic and used to reflect their own identity. • Roofs. Pitched roofs required and overhang length revised. • Windows. All building along Main St., Benchmark Rd., Lettuce Shed Lane and E. Beaver Creek Blvd. shall incorporate large display windows at ground levels. All dimensional requirements removed. • Deck and Balconies revised to require solar orientation when possible. DESIGN STANDARDS The Council agreed that including design standards for new development in the proposed Code was the most effective way of implementing the Town's goals for land use and development. Council further agreed that the design standards should be revised to provide a more general statement of intent, remove most dimensional requirements, and provide pictures and diagrams to show preferred and not preferred design options. The Design Standards have been revised and pictures and diagrams related to specific standards can be found in Appendix A Residential Design Guidelines and Appendix B Commercial Design Guidelines. Natural Resource Protection (Sec 7.28.100) • Steep Slopes: Applicability changed to new subdivisions and rezonings and includes all lots with 30% slopes. Cuts shall not exceed a slope between 25% and 50% without soils engineering approval. • Streets Roads General Site Access. Max, street length requirement for streets on steep slopes removed. Approval for streets on steep slopes changes from Director to PZC. • CORRECTION: SECTION 7.28.100(a)(3) (i) Standards. Development on natural slopes of 40% or greater is prohibited for new subdivisions. PUD amendments and zoning amendments. • Riparian Protection Buffer o Revised to give Director the authority to request a survey of riparian zones for PUDs, subdivisions and rezoning applications. Clarified method for controlling and maintaining noxious weeds. • Grading, Erosion Prevention and Sedimentation Control • Applicability changed from disturbing more than % acre to'/ acre. • Cut and Fill. Retaining walls and other similar methods may be used to stabilize slopes steeper than 2:1 (changed from 3:1). ENGINEERING IMPROVEMENT STANDARDS (Chapter 7.32) • Lots. Applicability change to exclude condominium and duplex subdivisions in conformance with their preliminary plan. • Building Envelopes. Clarified that regulations apply to all lots with natural hazards, slopes steeper than 30 %, or floodplains. Size of building enveloped revised to 2,500 sf with a minimum dimension of at least 25 ft. • Streets. Definition of Neighborhood Street added. • Right of Way. Approval of private right -of -way requires evidence of adequate funding for continued and on -going operations and maintenance. • Water Supply Requires applicant to obtain conditional ability to serve letter at preliminary review. Adequacy of Water Supply shall be based on per capita water usage for residential uses less than 3,000 sf and engineer calculations for other uses. • School Sites. Added Charter Schools an entity that the Town may convey a school site to, with conditions. Cash -in -lieu criteria revised and Use of Funds clarified. • Park Land Dedications. Public cemetery added as acceptable use for dedicated park land. Cash —in- lieu procedures revised to include how the funds may be used (Use of Funds) and the process for the payor of cash -in -lieu funds to the Town to demand that the town expend the funds (Demand for Expenditure or Reimbursement). • A process and standards for the Conveyance of Public Right of Way and Land was added. 1041 REGULATIONS • Additional Provisions Applicable to Major Facilities' of a Public Utility added. Recommended Action: Staff believes that the Code has adequately addressed the objectives of the Code revision project and has provided sufficient opportunity for public review and comment. Staff therefore recommends that Council approve Ordinance 10 -14 on its first reading. Town Manager Comments: 5 Exhibit A TOWN OF AVON, COLORADO ORDINANCE NO. 10 -14 SERIES OF 2010 AN ORDINANCE AMENDING THE AVON MUNICIPAL CODE BY ENACTING TITLE 7: THE AVON DEVELOPMENT CODE; REPEALING TITLE 16: SUBDIVISIONS; REPEALING TITLE 17: ZONING; AND, REPEALING PORTIONS OF TITLE 2: ADMINISTRATION AND PERSONNEL WHEREAS, the authority for the Town of Avon ( "Town ") to adopt regulations concerning the use, subdivision and development of real property is provided by Article XX of the Colorado Constitution and the Town of Avon home rule charter; Article 65.1 Areas and Activities of State and Local Interest, Article 65.5 Notification of Surface Development, Article 67 Planned Unit Development Act of 1972, and Article 68 Vested Property Rights of Title 24, Colorado Revised Statutes; Article 20 Local Government Regulation of Land Use of Title 29, Colorado Revised Statutes; and Article 12 Annexation — Consolidation — Disconnection, Article 15 Exercise of Municipal Powers, Article 16 Ordinances — Penalties, Article 20 Taxation and Finance, Article 23 Planning and Zoning, and Article 25 Public Improvements of Title 31, Colorado Revised Statutes; and other applicable state and federal laws and regulation; and WHEREAS, in accordance with the requirements of Title 17: Zoning of the Avon Municipal Code and after providing proper notice, the Avon Planning and Zoning Commission held public hearings on June 1, 2010; June 15, 2010; and July 6, 2010 and after considering all public comments received and testimony and materials provided by Town Staff provided a recommendation to the Town Council on July 6, 2010 to adopt the Avon Development Code and provided a supplemental recommendation on July 20, 2010 to repeal Sections 17.12.040(b) and 17.28.090 of the Avon Municipal Code; and WHEREAS, in accordance with the requirements of Title 17: Zoning of the Avon Municipal Code and after providing proper notice, the Avon Town Council held public hearings on July 27, 2010; August 10, 2010; August 17, 2010; August 24, 2010; August 31, 2010; September 28, 2010; and October 12, 2010, and considered all public comments received and all testimony and materials provided by Town Staff prior to making a decision; and WHEREAS, the Town Council finds that the adoption of the Avon Development Code will implement the Avon Comprehensive Plan, including all related plans and amendments thereto, and will thereby promote the health, safety and general welfare of the Avon community; and WHEREAS, approval of this Ordinance on first reading is intended only to confirm that the Town Council desires to comply the requirements of the Avon Home Rule Charter by setting a public hearing in order to provide the public an opportunity to present testimony and evidence regarding the application and that approval of this Ordinance on first reading does not constitute Ord 10 -14 Adopting Avon Development Code 9 -23 -10 ejh Page 1 of 4 a representation that the Town Council, or any member of the Town Council, supports, approves, rejects, or denies this ordinance; NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO the following: Section 1. Recitals Incorporated. The above and foregoing recitals are incorporated herein by reference and adopted as findings and determinations of the Town Council. Section 2. Repealed. The following portions of the Avon Municipal Code are hereby repealed in their entirety: Chapter 2.16 Planning and Zoning Commission; Chapter 2.20 Board of Building Appeals; Title 16: Subdivisions and Title 17: Zoning. Section 3. Enacted. Title 7: Avon Development Code, attached to this Ordinance as Exhibit A is hereby enacted. Section 4. Codification Amendments. The codifier of the Town's Municipal Code, Colorado Code Publishing, is hereby authorized to make such numerical and formatting changes as may be necessary to incorporate the provisions of this Ordinance within the Avon Municipal Code. The Town Clerk is authorized to correct, or approve the correction by the codifier, of any typographical error in the enacted regulations, provided that such correction shall not substantively change any provision of the regulations adopted in this Ordinance. Such corrections may include spelling, reference, citation, enumeration, and grammatical errors. Section 5. Severability. If any provision of this Ordinance, or the application of such provision to any person or circumstance, is for any reason held to be invalid, such invalidity shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are declared to be severable. The Town Council hereby declares that it would have passed this Ordinance and each provision thereof, even though any one of the provisions might be declared unconstitutional or invalid. As used in this Section, the term "provision" means and includes any part, division, subdivision, section, subsection, sentence, clause or phrase; the term "application" means and includes an application of an ordinance or any part thereof, whether considered or construed alone or together with another ordinance or ordinances, or part thereof, of the Town. Section 6. Effective Date. This Ordinance shall take effect seven days after public notice following final passage in accordance with Section 6.4 of the Avon Home Rule Charter. Section 7. Safety Clause. The Town Council hereby finds, determines and declares that this Ordinance is promulgated under the general police power of the Town of Avon, that it is promulgated for the health, safety and welfare of the public, and that this Ordinance is necessary for the preservation of health and safety and for the protection of public convenience and welfare. The Town Council further determines that the Ordinance bears a rational relation to the proper legislative object sought to be obtained. Ord 10 -14 Adopting Avon Development Code 9 -23 -10 ejh Page 2 of 4 Section 8. No Existing Violation Affected. Nothing in this Ordinance shall be construed to release, extinguish, alter, modify, or change in whole or in part any penalty, liability or right or affect any audit, suit, or proceeding pending in any court, or any rights acquired, or liability incurred, or any cause or causes of action acquired or existing which may have been incurred or obtained under any ordinance or provision hereby repealed or amended by this Ordinance. Any such ordinance or provision thereof so amended, repealed, or superseded by this Ordinance shall be treated and held as remaining in force for the purpose of sustaining any and all proper actions, suits, proceedings and prosecutions, for the enforcement of such penalty, liability, or right, and for the purpose of sustaining any judgment, decree or order which can or may be rendered, entered, or made in such actions, suits or proceedings, or prosecutions imposing, inflicting, or declaring such penalty or liability or enforcing such right, and shall be treated and held as remaining in force for the purpose of sustaining any and all proceedings, actions, hearings, and appeals pending before any court or administrative tribunal. Section 9. Publication by PostinE. The Town Clerk is ordered to publish this Ordinance by posting notice of adoption of this Ordinance on final reading by title in at least three public places within the Town and posting at the office of the Town Clerk, which notice shall contain a statement that a copy of the ordinance in full is available for public inspection in the office of the Town Clerk during normal business hours. [signature page follows] Ord 10 -14 Adopting Avon Development Code 9 -23 -10 ejh Page 3 of 4 INTRODUCED, APPROVED, PASSED ON FIRST READING, ORDERED POSTED AND REFERRED TO PUBLIC HEARING and setting such public hearing for October 12, 2010 at the Council Chambers of the Avon Municipal Building, located at One Lake Street, Avon, Colorado, on September 28, 2010. Ronald C. Wolfe, Mayor Published by posting in at least three public places in Town and posting at the office of the Town Clerk at least seven days prior to final action by the Town Council. ATTEST: APPROVED AS TO FORM: Patty McKenny, Town Clerk Eric Heil, Town Attorney INTRODUCED, FINALLY APPROVED, AND PASSED ON SECOND READING, AND ORDERED PUBLISHED BY POSTING on )2010. Ronald C. Wolfe, Mayor Published by posting by title in at least three public places in Town and posting by title at the office of the Town Clerk. ATTEST: Patty McKenny, Town Clerk Ord 10 -14 Adopting Avon Development Code 9 -23 -10 ejh Page 4 of 4 Exhibit B No Public Comments Received as of 9/24/2010 Exhibit C 'SOWN OF AVON PLANNING & ZONING COMMISSION RESOLUTION NO. 10-03 A RESOLUTION RECOMMENDING APPROVAL OF AVON DEVELOPMENT CODE, REPEALING AND RE- ENACTING TITLE 16: SUBDIVISIONS, AND TITLE 17: ZONING; AMENDING PORTIONS OF TITLE 2: ADMINISTRATION & PERSONELL, AND TITLE 15: BUILDING, AVON MUNICIPAL CODE, TOWN OF AVON, EAGLE COUNTY, COLORADO WHEREAS, the Planning & Zoning Commission is appointed by Town Council to review, make recommendations, and guide and accomplish a coordinated, adjusted and harmonious development of the municipality and its environs, and WHEREAS, the Town's zoning code and subdivision regulations have not been comprehensively amended or revised since they were first adopted by the Town in 1979; and WHEREAS, the calls for a comprehensive amendment of the zoning code and subdivision regulations are long standing and evidenced by the recommendations of the 2006 Avon Comprehensive Plan and other planning documents; and WHEREAS, in 2008, the Town Council appointed a Zoning Advisory Committee comprised of community representatives, including home builders, developers, planners, architects, and elected and appointed officials; and WHEREAS, the Town Council with the assistance of the Zoning Advisory Committee, zoning consultants, and town staff conducted a through analysis of the current code, including interviews with citizens and users of the code; and developed a strategic plan for revising the regulations; and WHEREAS, the Planning & Zoning Commission and Town Council held a series of eight public workshops in April, May and June 2010 to review the initial draft of the Code; and WHEREAS, a public hearing was held by the Planning & Zoning Commission on June 15 and July 6, 2010, pursuant to notices required by law; and WHEREAS, the Avon Development Code is consistent with purpose and intent of Title 17.28 of the Avon Municipal Code regarding amendments to its zoning regulations. NOW, THEREFORE, BE IT RESOLVED, that the Planning & Zoning Commission of the Town of Avon, Colorado, hereby recommends approval of the Avon Development Code, attached hereto as "Exhibit A ", citing the following findings: 1. The Avon Development Code is consistent with the 2006 Avon Comprehensive Plan, The West Town Center Investment Plan; and The East Town Center Investment Plan; and the adoption of the Code is necessary and desirable to effectively implement the policies and vision of these adopted plans. 2. The Avon Development Code is necessary to respond to changed or changing conditions in the town and promotes the type of development patterns that have emerged since the current code was first adopted. 3. The Avon Development Code will result in development that is compatible with existing and surrounding areas or uses and can be served by adequate public facilities. 4. The Avon Development Code reflects contemporary zoning and planning practices, which include decreasing automobile use, sustainability, and pedestrian oriented development. 5. The Avon Development Code consolidates the zoning code and subdivision regulations into a unified set of regulations that are efficiently organized and improves the usability of the Code. 6. The Avon Development Code furthers the public health, safety and general welfare of the greater Avon community, including its residents, businesses, and industries. and subject to the following conditions: 1. Add a Building Height Diagram to illustrate appearance of height. The definition shall include retaining walls that are part of the base foundation of a structure. 2. The PZC believes there is a public need for limiting the maximum length along a street of a duplex structure. Staff shall propose a maximum width to the Town Council. 3. The parking requirement for outdoor seating area be revised to exempt parking requirements for the first 25% of the area. 4. Revise the parking requirement for group homes to require appropriate levels of parking. 5. The definition of solar arrays and solar collection systems should be revised to use the terms, "ground mounted solar devices" and "building mounted solar devices ". 6 The definition of Caretaker Unit shall refer to kitchen facilities instead of cooking facilities. 7. Section 7.28.050(ii)(A)(2) should be revised to ensure grammatical correctness. 8. Table 7.28 -7 be revised to eliminate points for lawn grass and add bonus for xerriscaping. 9. Clarify the intent of Section 7.28.050(A)(iv)(D)(1)(IV), the section concerning separation of pedestrians in landscape strips and islands. 10. Add a cross reference within Town Center District Parking Lot Landscaping to Section 7.28.040. 11. Remove the phrase "for coniferous trees" from Section 7.28.050(a)(4)(i)(D)(1)(II) 12. Revise Section 7.28.050(a)(4)(i)(D)(3)(I) to add straw bale or equivalent requirement. 13. Revise Section 7.28.050(a)(4)(iv)(E) to establish maximum timeframe for temporary irrigation. 14. Revise Section 7.28.050(b) to add language to provide for architectural features for screening. 15. Strike reference to the section "Reserved" for Green Building techniques. 16 Correct typo, "Court Dive" on page 147 of the redline strikethrough revision. 17. Research Wildridge PUD definition of building heights as it relates to the wind energy systems. 18. Revise Section 7.20. 1 00(d)(1)(iii) to include the CIP. ADOPTED THIS 6h DAY OF JULY, 2010 Signed. GO—" Date: Vice Chair, bkOff een Attest. 1 Date: Secretary, Phil Struve Memo To: Honorable Mayor and Town Council Thm: Larry Brooks, Town Manager Initials Legal: Eric Heil, Town Attorney c From: Scott Wright, Asst. Town Manager — Finance Date: September 24, 2010 Re: Bond Ordinance No. 10 -17 Summary: First reading of Bond Ordinance No. 10 -17 is scheduled for Tuesday evening. Attached is the ordinance and a number of exhibits that constitute the documents necessary for the issuance of bond proceeds from Certificates of Participation (COPS) for the refunding of outstanding COPS and the issuance of additional proceeds to be used for capital improvements. Financial Implications and Discussion: As I have discussed with Council previously, the opportunity exists for the Town to refinance the existing Certificates of Participation (COPS) and issue "new money" that would be used to either provide matching funds for the Swift Gulch Transit/Public Works Facility Project or use the proceeds for existing CIP projects and reserve the funds that were to be used for those projects for the Swift Gulch project at some time in the future. Staff has had several discussions with bond counsel and arrived at the decision to recommend this course of action after consideration of our options and the pros and cons of each, as follows: Option 1— The Town approaches this bond transaction regardless of the outcome of Amendment 61, refinancing the outstanding bonds and issuing additional bonds over a twenty -year term. Page 1 Pros 1. Enables us to get pricing prior to the election, possibly lowering borrowing costs. 2. Provides cash flow savings to the Town compared to the current level of debt service. 3. Helps reduce the public perception that this is only a reaction to Amendment 61. 4. Provides flexibility with the use of the bond proceeds. 5. Gives the Town the ability to demonstrate that we have funds available for the Swift Gulch Transit/Public Works Facility Project. 6. Interest rates are currently very low, reducing borrowing costs. Cons 1. Town may need to use the new money for CIP projects that "normally" would not be funded in this manner. 2. Council will need to commit to the use of the "freed -up" funds for the Swift Gulch Transit/Public Works Facility project if grants are awarded in the future. Option 2 - Bond documents could be prepared in anticipation of the November election, with the final issuance decision based on the results of the election. Pros 1. If Amendment 61 fails, and the Town does not have a grant award, the bond issuance could be for only the refinancing portion and leave the new money piece for later (but with some duplication of issuance costs). Cons 1. Pricing would occur after the election with the distinct possibility of higher borrowing costs. 2. Possible duplication of certain issuance costs. 3. Possible negative public opinion if Amendment 61 passes and the Town issues debt before its effective date. 4. The bond ordinance must be written with parameters of both a refinance and new money but the final decision would need to be either delegated to the Town Manager and Assistant Town Manager, or brought back to Council with new membership. Option 3 — No Action Pros 1. None Identified. Cons 1. As the outstanding bonds get closer to maturity the ability to refinance is reduced. 2. There is a possibility of increased interest rates. • Page 2 3. If Amendment 61 passes, any new bond issuances, even refinancing, have to be voted upon. This places the Town in a very precarious position in terms of demonstrating that it has funds available for the Swift Gulch Transit/Public Works Facility project. Staff s direction to bond counsel was to move forward with a bond ordinance that reflects Option 1 above. The benefits of this action plan are as follows: • Having matching funds available for the Swift Gulch project; • Avoids a reduction in taxes for twenty years if Amendment 61 passes; • Avoids having to go to a vote if Amendment 61 passes; • Avoids an accelerated maturity if Amendment 61 passes. This option refunds the existing debt over a twenty year period along with issuing the new money over that same twenty year period. This results in a lower present value savings, only $7,718 or 0.22 %, but results in a much better cash flow with the annual debt service approximately $71,000 lower than is currently paid. Recommendations: It is my recommendation that Council approve on first reading Ordinance No. 10 -17. Town Manager Comments: Attachments: Bond Ordinance No. 10 -17 Exhibit A — Site Lease Exhibit B — Lease Purchase Agreement Exhibit C — Escrow Agreement Exhibit D — Continuing Disclosure Agreement Exhibit E — Preliminary Official Statement (Draft Form) Timetable Sources and Uses • Page 3 TOWN OF AVON, COLORADO ORDINANCE NO. 10 -17 SERIES OF 2010 AN ORDINANCE AUTHORIZING THE EXECUTION OF A SITE AND IMPROVEMENT LEASE, A LEASE PURCHASE AGREEMENT, A DISCLOSURE CERTIFICATE, AN ESCROW AGREEMENT, A PRELIMINARY OFFICIAL STATEMENT AND OTHER DOCUMENTS AND MATTERS RELATING TO CERTAIN CERTIFICATES OF PARTICIPATION. WHEREAS, the Town of Avon, Eagle County, Colorado (the "Town ") is a duly organized and existing home rule municipality of the State of Colorado, created and operating pursuant to Article XX of the Constitution of the State of Colorado and the home rule charter of the Town (the "Charter "); and WHEREAS, pursuant to Chapter XIV of the Charter, the Town is authorized to enter into one or more leases or lease - purchase agreements for land, buildings, equipment and other property for governmental or proprietary purposes; and WHEREAS, pursuant to such authority and for the purposes of financing the construction, other acquisition, and equipping of a public works maintenance facility (the "Public Works Facility "), the Town has heretofore (a) entered into that certain Ground Lease Agreement, dated as of July 1, 1998 (the "1998 Ground Lease "), whereby the Town, as lessor, has leased certain real property owned by the Town and described therein (collectively, the "Site "), to the Town of Avon Finance Authority, a Colorado nonprofit corporation (the "Finance Authority "), as lessee, and (b) entered into that certain Lease Purchase and Sublease Agreement, dated as of July 1, 1998 (the "1998 Lease "), whereby the Town has leased the Public Works Facility and subleased the Site from the Finance Authority; and WHEREAS, in order to provide funds for the construction, other acquisition, and equipping of the Public Works Facility, the Finance Authority as grantor, and The Bank of Cherry Creek, N.A., as trustee, entered into that certain Mortgage and Indenture of Trust, dated as of July 1, 1998 (the "1998 Indenture "), pursuant to which there were issued certain certificates of participation (the "1998 Certificates "), evidencing assignments of proportionate interests in rights to receive certain revenues pursuant to the 1998 Lease; and WHEREAS, the Town is permitted by the 1998 Lease to pay the "Purchase Option Price" (as defined in the 1998 Lease) to acquire the Public Works Facility, which Purchase Option Price is an amount sufficient to redeem the 1998 Certificates and pay related costs thereof; and WHEREAS, redemption of the 1998 Certificates will result in (a) termination of the 1998 Indenture pursuant to Section 6.01 thereof, (b) conveyance of the Public Works Facility to the Town pursuant to Article XII of the 1998 Lease, (c) termination of the "Lease Term" of the 1998 Lease pursuant to Section 4.2 thereof, and (d) termination of the 1998 Ground Lease pursuant to Section 5.2 thereof; and -1- WHEREAS, the 1998 Certificates were subject to prior redemption, at the option of the Town, beginning on December 1, 2009, and on any date thereafter, at a price of par plus accrued interest to the date fixed for redemption; and WHEREAS, the Town Council of the Town (the "Town Council ") has determined, and hereby determines, that it is in the best interests of the Town and its residents and taxpayers to (a) pay the Purchase Option Price in order to terminate the 1998 Lease and redeem the 1998 Certificates (the "Refunding Project "), and (b) construct, install, equip and furnish certain capital improvements within the Town (the "Improvement Project," and together with the Refunding Project, the "Project "); and WHEREAS, the Town Council has determined, and hereby determines, (a) to lease the Site and all improvements thereon, including, without limitation, the Public Works Facility (collectively, the "Leased Property"), to UMB Bank, n.a., as trustee (the "Trustee "), pursuant to a Site and Improvement Lease (the "Site Lease "), and (b) sublease the Leased Property from the Trustee pursuant to a Lease Purchase Agreement (the "Lease "); and WHEREAS, in order to produce the revenue necessary to finance the Project, the Trustee will execute an Indenture of Trust (the "Indenture "), pursuant to which certain certificates of participation evidencing proportionate interests in certain revenues under the Lease (as more particularly defined in the Indenture, the "2010 Certificates ") will be issued, and the proceeds thereof used to finance the Project; and WHEREAS, pursuant to the Lease, and subject to the right of the Town to terminate the Lease and other limitations as therein provided, the Town will pay certain Base Rentals and Additional Rentals (as such terms are defined in the Lease) in consideration for the right of the Town to use the Leased Property; and WHEREAS, the Town's obligation under the Lease to pay Base Rentals and Additional Rentals shall be from year to year only; shall constitute currently budgeted expenditures of the Town; shall not constitute a mandatory charge or requirement in any ensuing budget year; and shall not constitute a general obligation or other indebtedness or multiple fiscal year financial obligation of the Town within the meaning of any constitutional, statutory or Charter limitation or requirement concerning the creation of indebtedness or multiple fiscal year financial obligation, nor a mandatory payment obligation of the Town in any ensuing fiscal year beyond any fiscal year during which the Lease shall be in effect; and WHEREAS, there have been presented to the Town Council and are on file at the Town offices the following: (i) the Site Lease, in the proposed form attached hereto as Exhibit A; (ii) the Lease, in the proposed form attached hereto as Exhibit B; (iii) the Escrow Agreement relating to the Refunding Project (the "Escrow Agreement "), in the proposed form attached hereto as Exhibit C, (iv) the Continuing Disclosure Certificate to be provided by the Town (the "Disclosure Certificate "), in the proposed form attached hereto as Exhibit D; and (v) the Preliminary Official Statement (the "Preliminary Official Statement ") relating to the 2010 Certificates, in the proposed form attached hereto as Exhibit E; and -2- WHEREAS, capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Lease; and WHEREAS, § 11 -57 -204 of the Supplemental Public Securities Act, constituting Title 11, Article 57, Part 2, Colorado Revised Statutes (the "Supplemental Act "), provides that a public entity, including the Town, may elect in an act of issuance to apply all or any of the provisions of the Supplemental Act. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO the following: Section 1. Ratification and Approval of Prior Actions. All action heretofore taken (not inconsistent with the provisions of this Ordinance) by the Town Council or the officers, agents or employees of the Town Council or the Town relating to the Site Lease, the Lease, the acquisition, construction, installation or improvement of the Improvement Project, the implementation of the Refunding Project, and the execution and delivery of the 2010 Certificates is hereby ratified, approved and confirmed. Section 2. Finding of Best Interests. The Town Council hereby finds and determines, pursuant to the Constitution, the laws of the State of Colorado and the Charter, that the acquisition, construction, and installation of the Improvement Project, the implementation of the Refunding Project, and the financing of the costs thereof pursuant to the terms set forth in the Site Lease and the Lease are necessary, convenient, and in furtherance of the Town's purposes and are in the best interests of the inhabitants of the Town and the Town Council hereby authorizes and approves the same. The Town Council hereby further finds and determines that the Refunding Project will result in interest costs savings to the Town and lower annual payments and is therefore necessary, desirable, advisable and in the best interest of the Town. Section 3. Supplemental Act; Parameters. The Town Council hereby elects to apply all of the Supplemental Act to the Site Lease and the Lease and in connection therewith delegates to each of the Mayor, the Town Manager or the Finance Director the authority to make any determination delegable pursuant to § 11- 57- 205(1)(a -i) of the Colorado Revised Statutes, as amended, in relation to the Site Lease and the Lease, and to execute a sale certificate (the "Sale Certificate ") setting forth such determinations, including without limitation, the term of the Site Lease, the rental amount to be paid by the Trustee pursuant to the Site Lease, the term of the Lease, and the rental amount to be paid by the Town pursuant to the Lease, subject to the following parameters and restrictions: (a) the total amount of rental payments to be received by the Town from the Trustee under the Site Lease shall not be less than $6,000,000; (b) the term of the Site Lease shall not extend beyond December 31, 2040; (c) the aggregate principal amount of the Base Rentals payable by the Town pursuant to the Lease shall not exceed $7,250,000; (d) the Lease Term shall not extend beyond December 31, 2030; and (e) the maximum net effective interest rate on the interest component of the Base Rentals relating to the 2010 Certificates shall not exceed 5.00 %. Pursuant to § 11 -57 -205 of the Supplemental Act, the Town Council hereby delegates to each of the Mayor, the Town Manager or the Finance Director the authority to sign a contract for the purchase of the 2010 Certificates or to accept a binding bid for the 2010 -3- Certificates and to execute any agreement or agreements in connection therewith. In addition, each of the Mayor, the Town Manager or the Finance Director is hereby authorized to determine if obtaining an insurance policy for all or a portion of the 2010 Certificates is in the best interests of the Town, and if so, to select an insurer to issue an insurance policy, execute a commitment relating to the same and execute any related documents or agreements required by such commitment. Each of the Mayor, the Town Manager or the Finance Director is also hereby authorized to determine if obtaining a reserve fund insurance policy for the 2010 Certificates is in the best interests of the Town, and if so, to select a surety provider to issue a reserve fund insurance policy and execute any related documents or agreements required by such commitment. Section 4. Approval of Documents. The Site Lease, the Lease, the Escrow Agreement, and the Disclosure Certificate, in substantially the forms presented to the Town Council and on file with the Town, are in all respects approved, authorized and confirmed, and the Mayor or Mayor Pro Tem of the Town is hereby authorized and directed for and on behalf of the Town to execute and deliver the Site Lease, the Lease, the Escrow Agreement and the Disclosure Certificate in substantially the forms and with substantially the same contents as presented to the Town Council, provided that such documents may be completed, corrected or revised as deemed necessary by the parties thereto in order to carry out the purposes of this Ordinance. Section 5. Approval of Official Statement. A final Official Statement, in substantially the form of the Preliminary Official Statement presented to the Town Council and on file with the Town, is in all respects approved and authorized. The Mayor is hereby authorized and directed, for and on behalf of the Town, to execute and deliver the final Official Statement in substantially the form and with substantially the same content as the Preliminary Official Statement on file with the Town, with such changes as may be approved by the Town Manager or the Finance Director. The distribution of the Preliminary Official Statement and the final Official Statement to all interested persons in connection with the sale of the 2010 Certificates is hereby ratified, approved and authorized. Section 6. Authorization to Execute Collateral Documents. The Town Clerk is hereby authorized and directed to attest all signatures and acts of any official of the Town in connection with the matters authorized by this Ordinance and to place the seal of the Town on any document authorized and approved by this Ordinance. The Mayor, Mayor Pro Tem, and Town Clerk and other appropriate officials or employees of the Town are hereby authorized and directed to take all action necessary or appropriate to effectuate the provisions of this Ordinance, including without limiting the generality of the foregoing, executing, attesting, authenticating and delivering for and on behalf of the Town any and all necessary documents, instruments or certificates and performing all other acts that they deem necessary or appropriate in order to implement and carry out the transactions and other matters authorized by this Ordinance. The approval hereby given to the various documents referred to above includes an approval of such additional details therein as may be necessary and appropriate for their completion, deletions therefrom and additions thereto as may be approved by bond counsel prior to the execution of the documents. The execution of any document or instrument by the aforementioned officers or members of the Town Council shall be conclusive evidence of the -4- approval by the Town of such document or instrument in accordance with the terms hereof and thereof. Section 7. No General Obligation Debt. No provision of this Ordinance, the Site Lease, the Lease, the Indenture, the 2010 Certificates, the Preliminary Official Statement, or the final Official Statement shall be construed as creating or constituting a general obligation or other indebtedness or multiple fiscal year financial obligation of the Town within the meaning of any constitutional, statutory or Charter provision, nor a mandatory charge or requirement against the Town in any ensuing fiscal year beyond the then current fiscal year. The Town shall have no obligation to make any payment with respect to the 2010 Certificates except in connection with the payment of the Base Rentals (as defined in the Lease) and certain other payments under the Lease, which payments may be terminated by the Town in accordance with the provisions of the Lease. Neither the Lease nor the 2010 Certificates shall constitute a mandatory charge or requirement of the Town in any ensuing fiscal year beyond the then current fiscal year or constitute or give rise to a general obligation or other indebtedness or multiple fiscal year financial obligation of the Town within the meaning of any constitutional, statutory or Charter debt limitation and shall not constitute a multiple fiscal year direct or indirect debt or other financial obligation whatsoever. No provision of the Site Lease, the Lease or the 2010 Certificates shall be construed or interpreted as creating an unlawful delegation of governmental powers nor as a donation by or a lending of the credit of the Town within the meaning of Sections 1 or 2 of Article XI of the Colorado Constitution. Neither the Lease nor the 2010 Certificates shall directly or indirectly obligate the Town to make any payments beyond those budgeted and appropriated for the Town's then current fiscal year. Section 8. Reasonableness of Rentals. The Town Council hereby determines and declares that the Base Rentals due under the Lease, in the maximum amounts authorized pursuant to Section 3 hereof, constitute the fair rental value of the Leased Property and do not exceed a reasonable amount so as to place the Town under an economic compulsion to renew the Lease or to exercise its option to purchase the Trustee's leasehold interest in the Leased Property pursuant to the Lease. The Town Council hereby determines and declares that the period during which the Town has an option to purchase the Trustee's leasehold interest in the Leased Property (i.e., the entire maximum term of the Lease) does not exceed the useful life of the Leased Property. The Town Council hereby further determines that the amount of rental payments to be received by the Town from the Trustee pursuant to the Site Lease is reasonable consideration for the leasing of the Leased Property to the Trustee for the term of the Site Lease as provided therein. Section 9. No Recourse against Officers and Agents. Pursuant to § 11 -57- 209 of the Supplemental Act, if a member of the Town Council, or any officer or agent of the Town acts in good faith, no civil recourse shall be available against such member, officer, or agent for payment of the principal, interest or prior redemption premiums on the 2010 Certificates. Such recourse shall not be available either directly or indirectly through the Town Council or the Town, or otherwise, whether by virtue of any constitution, statute, rule of law, enforcement of penalty, or otherwise. By the acceptance of the 2010 Certificates and as a part of the consideration of their sale or purchase, any person purchasing or selling such 2010 Certificate specifically waives any such recourse. -5- Section 10. Severability. If any provision of this Ordinance, or the application of such provision to any person or circumstance, is for any reason held to be invalid, such invalidity shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are declared to be severable. The Town Council hereby declares that it would have passed this Ordinance and each provision thereof, even though any one of the provisions might be declared unconstitutional or invalid. As used in this Section, the term "provision" means and includes any part, division, subdivision, section, subsection, sentence, clause or phrase; the term "application" means and includes an application of an ordinance or any part thereof, whether considered or construed alone or together with another ordinance or ordinances, or part thereof, of the Town. Section 11. Repealer. All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof, heretofore repealed. Section 12. Interpretation. This Ordinance shall be so interpreted and construed as to effectuate its general purpose. Section 13. Charter Controls. Pursuant to Article XX of the State Constitution and the Charter, all State statutes that might otherwise apply in connection with the provisions of this Ordinance are hereby superseded to the extent of any inconsistencies or conflicts between the provisions of this Ordinance and the Sale Certificate authorized hereby and such statutes. Any such inconsistency or conflict is intended by the Town Council and shall be deemed made pursuant to the authority of Article XX of the State Constitution and the Charter. Section 14. Effective Date, Recording, and Authentication. This Ordinance shall be in full force and effect seven days after public notice following final passage in accordance with Section 6.4 of the Charter. This Ordinance shall be numbered and recorded in the official records of the Town kept for that purpose, and shall be authenticated by the signatures of the Mayor and Mayor Pro -Tern and Town Clerk, and published in accordance with law. Section 15. Safety Clause. The Town Council hereby finds, determines and declares that this Ordinance is promulgated under the general police power of the Town, that it is promulgated for the health, safety and welfare of the public, and that this Ordinance is necessary for the preservation of health and safety and for the protection of public convenience and welfare. The Town Council further determines that the Ordinance bears a rational relation to the proper legislative object sought to be obtained. Section 16. Publication by Posting. The Town Clerk is ordered to publish this Ordinance by posting notice of adoption of this Ordinance on final reading by title in at least three public places within the Town and posting at the office of the Town Clerk, which notice shall contain a statement that a full copy of this Ordinance is available for public inspection in the office of the Town Clerk during normal business hours. -6- INTRODUCED, APPROVED, PASSED ON FIRST READING, ORDERED PUBLISHED BY POSTING AND REFERRED TO PUBLIC HEARING, and setting such public hearing for October 12, 2010, at 5:30 p.m., at the Council Chambers of the Avon Municipal Building, located at One Lake Street, Avon, Colorado, on September 28, 2010. Ronald C. Wolfe, Mayor Published by posting in at least three public places in Town and posting at the office of the Town Clerk at least seven days prior to final action by the Town Council. ATTEST: APPROVED AS TO FORM: Patty McKenny, Town Clerk Eric Heil, Town Attorney INTRODUCED, FINALLY APPROVED, PASSED ON SECOND READING, AND ORDERED PUBLISHED BY POSTING on October 12, 2010. Ronald C. Wolfe, Mayor Published by posting by title in at least three public places in Town and posting by title at the office of the Town Clerk. ATTEST: Patty McKenny, Town Clerk -7- EXHIBIT A FORM OF SITE AND IMPROVEMENT LEASE EXHIBIT B FORM OF LEASE PURCHASE AGREEMENT EXHIBIT C FORM OF CONTINUING DISCLOSURE CERTIFICATE EXHIBIT D FORM OF ESCROW AGREEMENT EXHIBIT E FORM OF PRELIMINARY OFFICIAL STATEMENT STATE OF COLORADO ) COUNTY OF EAGLE ) SS. TOWN OF AVON ) I, the duly elected, qualified, and acting Town Clerk of the Town of Avon, Colorado (the "Town "), do hereby certify that: (1) The foregoing pages are a true, correct and complete copy of an ordinance (the "Ordinance ") that was introduced, approved on first reading and ordered published by posting in accordance with the Town Charter (the "Charter ") by the Town Council at a regular meeting thereof held on September 28, 2010, and was introduced, approved on second and final reading, and ordered published by posting in accordance with the Charter on October 12, 2010, which Ordinance has not been revoked, rescinded or repealed and is in full force and effect on the date hereof. (2) The Ordinance was duly moved and seconded, and the Ordinance was approved on first reading, at the meeting of September 28, 2010, by an affirmative vote of a majority of the membership of the entire Town Council as follows: Councilmember Voting "Yes" Voting "No" Absent Abstaining Ronald C. Wolfe Brian Sipes Richard Carroll David Dantas Kristi Ferraro Amy Phillips Buzz Reynolds (3) The Ordinance was duly moved and seconded, and the Ordinance was approved on second and final reading, at the meeting of October 12, 2010, by an affirmative vote of a majority of the membership of the entire Town Council as follows: -1- Councilmember Voting "Yes" Voting "No" Absent Abstaining Ronald C. Wolfe Brian Sipes Richard Carroll David Dantas Kristi Ferraro Amy Phillips Buzz Reynolds (4) The members of the Town Council were present at such meetings and voted on the passage of such Ordinance as set forth above. (5) The Ordinance was authenticated by the signature of the Mayor, sealed with the Town seal, attested by the Town Clerk, and recorded in the minutes of the Town Council. (6) There are no bylaws, rules or regulations of the Town Council that might prohibit the adoption of the Ordinance. (7) Notices of the meetings of September 28, 2010 and October 12, 2010 in the forms attached hereto as Exhibit A were posted at the Town Hall not less than 24 hours prior to each meeting in accordance with law. (8) On September _, 2010 and October _, 2010, the full text of the Ordinance was posted at the office of the Town Clerk and in three public places in the Town in accordance with the Charter. WITNESS my hand and the seal of the Town affixed this day of October, 2010. [SEAL] -2- Town Clerk EXHIBIT A (Attach Notices of Meetings of September 28, 2010 and October 12, 2010) EXHIBIT A AFTER RECORDATION PLEASE RETURN TO: Sherman & Howard, L.L.C. 633 17th Street, Suite 3000 Denver, Colorado 80202 Attention: Dee P. Wisor, Esq. SITE AND IMPROVEMENT LEASE DATED AS OF NOVEMBER 1, 2010 BETWEEN TOWN OF AVON, COLORADO, AS LESSOR UMB BANK, N.A., SOLELY IN ITS CAPACITY AS TRUSTEE UNDER THE INDENTURE, AS LESSEE This SITE AND IMPROVEMENT LEASE, dated as of November 1, 2010 (this "Site Lease "), is by and between the Town of Avon, Colorado, a home rule municipal corporation (the "Town "), as lessor, and UMB Bank, n.a., Denver, Colorado, a national banking association duly organized and validly existing under the laws of the United States, solely in its capacity as trustee under the Indenture (the "Trustee "), as lessee. PREFACE Unless the context otherwise requires, capitalized terms used herein shall have the meanings ascribed to them herein and in the Lease Purchase Agreement, dated as of November 1, 2010 (the "Lease "), between the Trustee, as lessor, and the Town, as lessee. RECITALS 1. The Town is a duly organized and existing home rule municipality of the State of Colorado, created and operating pursuant to Article XX of the Constitution of the State of Colorado and the home rule charter of the Town (the "Charter "). 2. Pursuant to Chapter XIV of the Charter, the Town is authorized to enter into one or more leases or lease - purchase agreements for land, buildings, equipment and other property for governmental or proprietary purposes. 3. The Town has previously entered into a lease purchase and sublease agreement whereby the Town is leasing a public works maintenance facility (the "1998 Project ") and certain Certificates of Participation, Series 1998 (the "1998 Certificates ") have been executed and delivered in connection therewith. 4. The Town Council of the Town (the "Town Council ") has determined that it is in the best interests of the Town and its inhabitants to execute a lease purchase agreement to (a) refinance the 1998 Project (the "Refunding Project "), and (b) construct, install, equip, and furnish certain capital improvements within the Town (the "Improvement Project," and together with the Refunding Project, the "Project "). 5. The Town Council has determined that it is in the best interests of the Town and its inhabitants to provide for the financing and refinancing of the Project by entering into this Site Lease and the Lease. 6. The Town owns, in fee title, a certain site and the premises, buildings and improvements located thereon (as more particularly described in Exhibit A attached hereto, the "Leased Property "). To accomplish the Project, the Trustee will acquire a leasehold interest in the Leased Property by leasing the Leased Property from the Town pursuant to this Site Lease and will lease the Leased Property back to the Town pursuant to the Lease. 7. The Trustee and the Town intend that this Site Lease set forth their entire understanding and agreement regarding the terms and conditions upon which the Trustee is leasing the Leased Property from the Town. 8. The Town proposes to enter into this Site Lease with the Trustee as material consideration for the Trustee's agreement to lease the Leased Property to the Town pursuant to the Lease. The Trustee shall prepay in full its rental payments due under this Site Lease which rental payments shall be used by the Town to acquire, construct, install and improve the Improvement Project and to effectuate the Refunding Project, all pursuant to the Lease and the Indenture. NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows; Section 1. Site Lease and Terms. The Town hereby leases to the Trustee and the Trustee hereby leases from the Town, on the terms and conditions hereinafter set forth, the Leased Property, subject to Permitted Encumbrances as described in Exhibit B hereto. The term of this Site Lease shall commence on the date hereof and shall end on December 31, 2040 (the "Site Lease Termination Date "), unless such term is sooner terminated as hereinafter provided. If, prior to the Site Lease Termination Date, the Trustee has transferred and conveyed the Trustee's leasehold interest in all of the Leased Property pursuant to Article 12 of the Lease as a result of the Town's payment of (a) the applicable Purchase Option Price thereunder; or (b) all Base Rentals and Additional Rentals, all as further provided in Section 12.2 of the Lease, then the term of this Site Lease shall end in connection with such transfer and conveyance. The term of any sublease of the Leased Property or any portion thereof, or any assignment of the Trustee's interest in this Site Lease, pursuant to Section 5 hereof, the Lease and the Indenture, shall not extend beyond December 31, 2040. At the end of the term of this Site Lease, all right, title and interest of the Trustee, or any sublessee or assignee, in and to the Leased Property, shall terminate. Upon such termination, the Trustee and any sublessee or assignee shall execute and deliver to the Town any necessary documents releasing, assigning, transferring and conveying the Trustee's, sublessee's or assignee's respective interests in the Leased Property. Section 2. Rental. The Trustee has paid to the Town and the Town hereby acknowledges receipt from the Trustee as and for rental hereunder, paid in advance, the sum of $ , as and for all rent due hereunder, and other good and valuable consideration, the receipt and the sufficiency of which are hereby acknowledged, to have and to hold for the term of this Site Lease as provided herein. The Town hereby determines that such amount is reasonable consideration for the leasing of the Leased Property to the Trustee for the term of this Site Lease. Section 3. Purpose. The Trustee shall use the Leased Property solely for the purpose of leasing the Leased Property back to the Town pursuant to the Lease and for such purposes as may be incidental thereto; provided, that upon the occurrence of an Event of Nonappropriation or an Event of Lease Default and the termination of the Lease, the Town shall vacate the Leased Property, as provided in the Lease, and the Trustee may exercise the remedies provided in this Site Lease, the Lease and the Indenture. -) Section 4. Owner in Fee. The Town represents that (a) it is the owner in fee of the Leased Property, subject only to Permitted Encumbrances as described in Exhibit B hereto, and (b) the Permitted Encumbrances do not and shall not interfere in any material way with the Leased Property. Section 5. Sales, Assignments and Subleases. Unless an Event of Nonappropriation or an Event of Lease Default shall have occurred and except as may otherwise be provided in the Lease, the Trustee may not sell or assign its rights and interests under this Site Lease or sublet all or any portion of the Leased Property, without the written consent of the Town. In the event that (a) the Lease is terminated for any reason and (b) this Site Lease is not terminated, the Trustee may sublease the Leased Property or any portion thereof, or sell or assign the Trustee's leasehold interest in this Site Lease, pursuant to the terms of the Lease and the Indenture, and any purchasers from or sublessees or assignees of the Trustee may sell or assign its respective interest in the Leased Property, subject to the terms of this Site Lease, the Lease and the Indenture. The Town and the Trustee (or any purchasers from or assignees or sublessees of the Trustee) agree that, except as permitted by this Site Lease, the Lease and the Indenture and except for Permitted Encumbrances (including purchase options under the Lease), neither the Town, the Trustee, nor any purchasers from or sublessees or assignees of the Trustee will sell, mortgage or encumber the Leased Property or any portion thereof during the term of this Site Lease. Section 6. Right of Entry. To the extent that the Lease is terminated and this Site Lease is still in effect, the Town reserves the right for any of its duly authorized representatives to enter upon the Leased Property at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof. Section 7. Termination. The Trustee agrees, upon the termination of this Site Lease, to quit and surrender all of the Leased Property, and agrees that any permanent improvements and structures existing upon the Leased Property at the time of the termination of this Site Lease shall remain thereon. Section 8. Default. In the event the Trustee shall be in default in the performance of any obligation on its part to be performed under the terms of this Site Lease, which default continues for 30 days following notice and demand for correction thereof to the Trustee, [with a copy thereof given to the 2010 Insurer,] the Town may exercise any and all remedies granted by law, except that no merger of this Site Lease and of the Lease shall be deemed to occur as a result thereof and that so long as any Certificates are Outstanding and unpaid under the Indenture, the Base Rentals due under the Lease shall continue to be paid to the Trustee except as otherwise provided in the Lease. [In addition, so long as any of the Certificates are Outstanding or any amounts due to the 2010 Insurer remain unpaid, this Site Lease shall not be terminated except as described in Section 7 hereof.] Section 9. Quiet Enjoyment and Acknowledgment of Ownership. The Trustee at all times during the term of this Site Lease shall peaceably and quietly have, hold and enjoy the Leased Property, subject to the provisions of the Lease and the Indenture, and the Town hereby acknowledges that the Trustee shall have a leasehold interest in all improvements or additions to W be built on the Leased Property, except as hereinafter provided, subject to this Site Lease, the Lease and the Indenture. Section 10. Trustee's Disclaimer. It is expressly understood and agreed that (a) this Site Lease is executed by UMB Bank, n.a. solely in its capacity as Trustee under the Indenture, and (b) nothing herein shall be construed as creating any liability on UMB Bank, n.a. other than in its capacity as Trustee under the Indenture. All financial obligations of the Trustee under this Site Lease, except those resulting from its willful misconduct or negligence, are limited to the Trust Estate. Section 11. Taxes; Maintenance; Insurance. During the Lease Term of the Lease and in accordance with the provisions of the Lease, including Sections 9.1 and 9.3 thereof, the Town covenants and agrees to pay any and all taxes, assessments or governmental charges due in respect of the Leased Property and all maintenance costs and utility charges in connection with the Leased Property. In the event that (a) the Lease is terminated for any reason and (b) this Site Lease is not terminated, the Trustee, or any purchaser, sublessee or assignee of the Leased Property (including the leasehold interests of the Trustee resulting from this Site Lease) shall pay or cause to be paid when due, all such taxes, assessments or governmental charges and maintain the Leased Property in good condition and working order. Any such payments that are to be made by the Trustee shall be made solely from (a) the proceeds of such sale, subleasing or assignment, (b) from the Trust Estate, including without limitation moneys on deposit in the Reserve Fund, or (c) from other moneys furnished to the Trustee under Section 8.02(m) of the Indenture. The provisions of the Lease shall govern with respect to the maintenance of insurance hereunder during the Lease Term of the Lease. In the event that (a) the Lease is terminated for any reason and (b) this Site Lease is not terminated, the Trustee, or any sublessee, purchaser or assignee of the Leased Property shall obtain and keep in force, (i) commercial general liability insurance against claims for personal injury, death or damage to property of others occurring on or in the Leased Property in an amount not less than $600,000 and (ii) property insurance in an amount not less than the full replacement value of the Leased Property. Any such insurance that is to be obtained by the Trustee shall be paid for solely from (a) the proceeds of such subleasing, sale or assignment, (b) from the Trust Estate, including without limitation moneys on deposit in the Reserve Fund, or (c) from other moneys furnished to the Trustee under Section 8.02(m) of the Indenture. All such insurance shall name the Trustee, any sublessee, purchaser or assignee and the Town as insured. The Town and the Trustee shall waive any rights of subrogation with respect to the Trustee, any sublessee, purchaser or assignee, and the Town, and their members, directors, officers, agents and employees, while acting within the scope of their employment and each such insurance policy shall contain such a waiver of subrogation by the issuer of such policy. Section 12. Damage, Destruction or Condemnation. The provisions of the Lease shall govern with respect to any damage, destruction or condemnation of the Leased Property during the Lease Term of the Lease. In the event that (a) the Lease is terminated for any reason and (b) this Site Lease is not terminated, and either (i) the Leased Property or any portion thereof are damaged or destroyed, in whole or in part, by fire or other casualty, or (ii) title to or use of the Leased Property or any part thereof shall be taken under the exercise of the power of eminent El domain, the Town and the Trustee, or any sublessee, purchaser or assignee of the Leased Property from the Trustee shall cause the Net Proceeds of any insurance claim or condemnation award to be applied in accordance with the provisions of Article 10 of the Lease. Section 13. Hazardous Substances. Except for customary materials necessary for construction, operation, cleaning and maintenance of the Leased Property, none of the Town, the Trustee or any sublessee, purchaser or assignee of the Leased Property from the Trustee shall cause or permit any Hazardous Substance to be brought upon, generated at, stored or kept or used in or about the Leased Property without prior written notice to the Town and the Trustee and all Hazardous Substances, including, customary materials necessary for construction, operation, cleaning and maintenance of the Leased Property, will be used, kept and stored in a manner that complies with all laws regulating any such Hazardous Substance so brought upon or used or kept in or about the Leased Property. If the presence of a Hazardous Substance on the Leased Property caused or permitted by the Town, the Trustee or any sublessee, purchaser or assignee of the Leased Property from the Trustee, as the case may be, results in contamination of the Leased Property, or if contamination of the Leased Property by Hazardous Substance otherwise occurs for which the Town, the Trustee or any sublessee or assignee of the Leased Property, as the case may be, is legally liable for damage resulting therefrom, then the Town, the Trustee or any sublessee, purchaser or assignee of the Leased Property from the Trustee, as the case may be, shall reimburse the other party for its reasonable and necessary legal expenses to defend the parties hereto or assignees hereof that have not caused or permitted such contamination and are not so legally liable with respect to this Site Lease from claims for damages, penalties, fines, costs, liabilities or losses; provided that the cost of such defense, (a) in the case of the Trustee, shall be payable solely from the Trust Estate, or (b) in the case of the Town, shall be payable only if the cost of such defense has been annually appropriated by the Town. This duty to reimburse legal expenses is not an indemnification. It is expressly understood that none of the Town, the Trustee or any sublessee, purchaser or assignee is indemnifying any other person with respect to this Site Lease. Without limiting the foregoing, if the presence of any Hazardous Substance on the Leased Property caused or permitted by (a) the Trustee or any sublessee, purchaser or assignee of the Leased Property from the Trustee, as the case may be, results in any contamination of the Leased Property, the Trustee or any sublessee, purchaser or assignee of the Leased Property from the Trustee, as the case may be, shall provide prior written notice to the Town and the Trustee and promptly take all actions, solely at the expense of the Trust Estate as are necessary to effect remediation of the contamination in accordance with legal requirements; or (b) the Town, results in any contamination of the Leased Property, the Town shall provide prior written notice to the Trustee and promptly take all actions, solely at the expense of the Town, which expenses shall constitute Additional Rentals, as are necessary to effect remediation of the contamination in accordance with legal requirements. Section 14. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Site Lease shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or GJ decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Site Lease shall be affected thereby, and each provision of this Site Lease shall be valid and enforceable to the fullest extent permitted by law. Section 15. No Merger. The Town and the Trustee intend that the legal doctrine of merger shall have no application to this Site Lease and that neither the execution and delivery of the Lease by the Trustee and the Town nor the exercise of any remedies under this Site Lease or the Lease shall operate to terminate or extinguish this Site Lease or the Lease, except as specifically provided herein and therein. Section 16. Notices. All notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered personally or if mailed shall be made by United States registered mail, return receipt requested, postage prepaid, at the addresses indicated in the Lease, or to such other addresses as the respective parties may from time to time designate in writing. Section 17. Recitals. The Recitals set forth in this Site Lease are hereby incorporated by this reference and made a part of this Site Lease. Section 18. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Site Lease. Section 19. Execution. This Site Lease may be executed in any number of counterparts, each of which shall be deemed to be an original but all together shall constitute but one and the same Site Lease. Section 20. Governing Law. This Site Lease shall be governed by and construed in accordance with the law of the State of Colorado. [The remainder of this page intentionally left blank.] 0 IN WITNESS WHEREOF, the Town and the Trustee have caused this Site Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. TOWN OF AVON, COLORADO, as Lessor By: Mayor [SEAL] ATTEST: Town Clerk 7 UMB BANK, N.A., solely in its capacity as Trustee under the Indenture, as Lessee Lm Vice President STATE OF COLORADO ) ss. TOWN OF AVON ) COUNTY OF EAGLE ) The foregoing instrument was acknowledged before me this day of November 2010, by and , as Mayor and Town Clerk, respectively, of the Town of Avon, Colorado. WITNESS my hand and official seal. (SEAL) My commission expires: 0 Notary Public STATE OF COLORADO ) ) ss. TOWN AND COUNTY OF DENVER The foregoing instrument was acknowledged before me this day of November 2010, by , as Assistant Vice President of UMB Bank, n.a., as Trustee. WITNESS my hand and official seal. (SEAL) My commission expires: 9 Notary Public EXHIBIT A DESCRIPTION OF THE LEASED PROPERTY: The Leased Property consists of the Site and the premises, buildings and improvements located thereon, as set forth below and as amended from time to time. Legal Description: Lot 113, a resubdivision of Lot 1, Swift Gulch Addition, according to the Plat recorded July 22, 1998 at Reception No. 663529, County of Eagle, State of Colorado. Buildings and Improvements: [Insert description of public works maintenance facility located on the property legally described above.] M. EXHIBIT B PERMITTED ENCUMBRANCES "Permitted Encumbrances" means, as of any particular time: (a) liens for taxes and assessments not then delinquent, or liens which may remain unpaid pending contest pursuant to the provisions of the Lease; (b) this Site Lease, the Lease, the Indenture and any related fixture filing and any liens arising or granted pursuant to the Lease or the Indenture; (c) utility, access and other easements and rights of way, licenses, permits, party wall and other agreements, restrictions and exceptions which the Mayor or the Town Representative certifies will not materially interfere with or materially impair the Leased Property, including rights or privileges in the nature of easements, licenses, permits and agreements as provided in the Lease; and (d) the easements, covenants, restrictions, liens and encumbrances (if any) to which title to the Leased Property was subject when leased to the Trustee pursuant to this Site Lease, as shown below and which do not interfere in any material way with the Leased Property. The easements, covenants, restrictions, liens and encumbrances (if any) to which title to the Leased Property was subject when leased to the Trustee pursuant to this Site Lease are as follows: [Insert from title policy.] WN EXHIBIT B AFTER RECORDATION PLEASE RETURN TO: Sherman & Howard, L.L.C. 633 17th Street, Suite 3000 Denver, Colorado 80202 Attention: Dee P. Wisor, Esq. LEASE PURCHASE AGREEMENT DATED AS OF NOVEMBER 1, 2010 BETWEEN UMB BANK, N.A., SOLELY IN ITS CAPACITY AS TRUSTEE UNDER THE INDENTURE IDENTIFIED HEREIN, AS LESSOR AND TOWN OF AVON, COLORADO, AS LESSEE This Table of Contents is not a part of this Lease and is only for convenience of reference. TABLE OF CONTENTS ARTICLE 1 DEFINITIONS ............................................................................ ............................... 3 Section 1.1 Certain Funds and Accounts ................................................ ............................... 3 Section1.2 Definitions ............................................................................ ............................... 3 ARTICLE 2 REPRESENTATIONS AND COVENANTS; RELATIONSHIP OF TOWN AND TRUSTEE........................................................................................................ ............................... 9 Section 2.1 Representations and Covenants of the Town ....................... ............................... 9 Section 2.2 Representations and Covenants of the Trustee .................. ............................... 10 Section 2.3 Nature of Lease .................................................................. ............................... 11 Section 2.4 Town Acknowledgment of Certain Matters ...................... ............................... 11 Section 2.5 Relationship of Town and Trustee ..................................... ............................... 11 ARTICLE 3 LEASE OF THE LEASED PROPERTY ................................. ............................... 13 ARTICLE4 LEASE TERM .......................................................................... ............................... 14 Section 4.1 Duration of Lease Term ..................................................... ............................... 14 Section 4.2 Termination of Lease Term ............................................... ............................... 15 ARTICLE 5 ENJOYMENT OF THE LEASED PROPERTY ...................... ............................... 16 Section 5.1 Trustee's Covenant of Quiet Enjoyment ............................ ............................... 16 Section 5.2 Town's Need for the Leased Property; Determinations as to Fair Value and Fair PurchasePrice .................................................................... ............................... 16 ARTICLE 6 PAYMENTS BY THE TOWN ................................................. ............................... 17 Section 6.1 Payments to Constitute Currently Budgeted Expenditures of the Town.......... 17 Section 6.2 Base Rentals, Purchase Option Price and Additional Rentals .......................... 17 Section 6.3 Manner of Payment ............................................................ ............................... 18 Section 6.4 Nonappropriation ............................................................... ............................... 19 Section 6.5 Holdover Tenant ................................................................ ............................... 20 Section 6.6 Prohibition of Adverse Budget or Appropriation Modifications ...................... 21 ARTICLE 7 TITLE TO LEASED PROPERTY; LIMITATIONS ON ENCUMBRANCES..... 22 Section 7.1 Title to the Leased Property ............................................... ............................... 22 Section 7.2 No Encumbrance, Mortgage or Pledge of the Leased Property ........................ 22 ARTICLE 8 MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES ................. 23 Section 8.1 Maintenance of the Leased Property by the Town ............ ............................... 23 1 Section 8.2 Modification of the Leased Property; Installation of Furnishings and Machinery ofthe Town ........................................................................ ............................... 23 Section 8.3 Taxes, Other Governmental Charges and Utility Charges . ............................... 23 Section 8.4 Provisions For Liability, Property and Worker's Compensation Insurance after Completion......................................................................... ............................... 24 Section8.5 Advances ............................................................................ ............................... 25 Section 8.6 Granting of Easements ....................................................... ............................... 25 ARTICLE 9 DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS................................................................................................... ............................... 26 Section 9.1 Damage, Destruction and Condemnation .......................... ............................... 26 Section 9.2 Obligation to Repair and Replace the Leased Property ..... ............................... 26 Section 9.3 Insufficiency of Net Proceeds ............................................ ............................... 27 Section 9.4 Cooperation of the Trustee ................................................. ............................... 28 ARTICLE 10 DISCLAIMER OF WARRANTIES; OTHER COVENANTS ............................. 29 Section 10.1 Disclaimer of Warranties ................................................... ............................... 29 Section 10.2 Further Assurances and Corrective Instruments ................ ............................... 29 Section 10.3 Compliance with Requirements ......................................... ............................... 29 Section 10.4 Partial Release and Substitution of Leased Property ......... ............................... 29 Section 10.5 Tax Covenants ................................................................... ............................... 30 Section 10.6 Undertaking to Provide Ongoing Disclosure ..................... ............................... 31 Section 10.7 Covenant to Reimburse Legal Expenses ............................ ............................... 31 Section 10.8 Access to the Leased Property; Rights to Inspect Books ... ............................... 32 Section 10.9 Town's Obligations under the Indenture .......................... ............................... 32 ARTICLE 11 PURCHASE OPTION ............................................................ ............................... 33 Section 11.1 Purchase Option ................................................................. ............................... 33 Section 11.2 Conditions for Purchase Option ......................................... ............................... 33 Section 11.3 Manner of Conveyance ...................................................... ............................... 33 ARTICLE 12 ASSIGNMENT AND SUBLEASING ................................... ............................... 35 Section 12.1 Assignment by the Trustee; Replacement of the Trustee .. ............................... 35 Section 12.2 Assignment and Subleasing by the Town .......................... ............................... 35 ARTICLE 13 EVENTS OF LEASE DEFAULT AND REMEDIES ............ ............................... 36 Section 13.1 Events of Lease Default Defined ....................................... ............................... 36 Section 13.2 Remedies on Default .......................................................... ............................... 36 Section 13.3 Limitations on Remedies ................................................... ............................... 37 Section 13.4 No Remedy Exclusive ........................................................ ............................... 37 Section13.5 Waivers .............................................................................. ............................... 37 Section 13.6 Agreement to Pay Attorneys' Fees and Expenses ............. ............................... 37 Section 13.7 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws. 37 ii ARTICLE 14 MISCELLANEOUS ............................................................... ............................... 39 Section 14.1 Sovereign Powers of Town ................................................ ............................... 39 Section14.2 Notices ............................................................................... ............................... 39 Section 14.3 Third Party Beneficiaries ................................................... ............................... 39 Section 14.4 Limitations on Rights of 2010 Insurer ............................... ............................... 39 Section14.5 Binding Effect .................................................................... ............................... 40 Section14.6 Amendments ...................................................................... ............................... 40 Section 14.7 Amounts Remaining in Funds ........................................... ............................... 40 Section 14.8 Triple Net Lease ................................................................. ............................... 40 Section 14.9 Computation of Time ......................................................... ............................... 40 Section 14.10 Payments Due on Holidays ................................................ ............................... 40 Section 14.11 Severability ........................................................................ ............................... 40 Section 14.12 Execution in Counterparts .................................................. ............................... 41 Section14.13 Applicable Law .................................................................. ............................... 41 Section 14.14 The Trustee Is Independent of the Town ........................... ............................... 41 Section 14.15 Governmental Immunity .................................................... ............................... 41 Section14.16 Recitals ............................................................................... ............................... 41 Section14.17 Captions ............................................................................. ............................... 41 Section 14.18 Trustee's Disclaimer .......................................................... ............................... 41 EXHIBIT A: DESCRIPTION OF LEASED PROPERTY ........................ ............................... A -1 EXHIBIT B: PERMITTED ENCUMBRANCES ......................................... ............................B -1 EXHIBIT C: BASE RENTALS SCHEDULE .............................................. ............................0 -1 EXHIBIT D: FORM OF NOTICE OF LEASE RENEWAL .................... ............................... D -1 Im This LEASE PURCHASE AGREEMENT, dated as of November 1, 2010 (this "Lease "), is by and between UMB Bank, n.a., Denver, Colorado, a national banking association duly organized and validly existing under the laws of the United States, solely in its capacity as trustee under the Indenture (the "Trustee "), as lessor, and the Town of Avon, Colorado, a Colorado home rule municipality (the "Town"), as lessee. PREFACE All capitalized terms used herein will have the meanings ascribed to them in Article 1 of this Lease. RECITALS 1. The Town of is a duly organized and existing home rule municipality of the State of Colorado, created and operating pursuant to Article XX of the Constitution of the State of Colorado and the home rule charter of the Town (the "Charter "). 2. Pursuant to Chapter XIV of the Charter, the Town is authorized to enter into one or more leases or lease - purchase agreements for land, buildings, equipment and other property for governmental or proprietary purposes. 3. The Town has previously entered into a lease purchase and sublease agreement whereby the Town is leasing a public works maintenance facility (the "1998 Project ") and certain Certificates of Participation, Series 1998 (the "1998 Certificates ") have been executed and delivered in connection therewith. 4. The Town Council of the Town (the "Town Council ") has determined that it is in the best interests of the City and its inhabitants to execute a lease purchase agreement to (a) refinance the 1998 Project (the "Refunding Project "), and (b) construct and install certain capital improvements within the Town (the "Improvement Project," and together with the Refunding Project, the "Project "). 5. The Town Council has determined that it is in the best interests of the Town and its inhabitants to provide for the financing and refinancing of the Project by entering into the Site Lease and this Lease. 6. The Town owns, in fee title, a certain site and the premises, buildings and improvements located thereon (as more particularly described in Exhibit A attached hereto, the "Leased Property "). To accomplish the Project, the Trustee will acquire a leasehold interest in the Leased Property by leasing the Leased Property from the Town pursuant to the Site Lease and will lease the Leased Property back to the Town pursuant to this Lease. 7. The payment by the Town of Base Rentals and Additional Rentals hereunder in any future Fiscal Year is subject to specific Appropriations and the renewal by the Town Council of this Lease for such future Fiscal Year. The Base Rentals and Additional Rentals payable by the Town under this Lease shall constitute current expenditures of the Town. 8. Neither this Lease nor the payment by the Town of Base Rentals or Additional Rentals hereunder shall be deemed or construed as creating an indebtedness of the Town within the meaning of any provision of the Colorado constitution, the Charter or the laws of the State of Colorado concerning or limiting the creation of indebtedness by the Town, and shall not constitute a multiple fiscal year direct or indirect debt or other financial obligation of the Town within the meaning of Article X, Section 20(4) of the Colorado constitution or a mandatory charge or requirement against the Town in any ensuing Fiscal Year beyond the then current Fiscal Year. The obligation of the Town to pay Base Rentals and Additional Rentals hereunder shall be from year to year only, shall constitute currently budgeted expenditures of the Town, shall not constitute a mandatory charge or requirement in any ensuing budget year, nor a mandatory payment obligation of the Town in any ensuing Fiscal Year beyond any Fiscal Year during which this Lease shall be in effect. In the event that this Lease is not renewed, the sole security available to the Trustee, as lessor hereunder, shall be the Leased Property. 9. The Trustee and the Town intend that this Lease set forth their entire understanding and agreement regarding the terms and conditions upon which the Town is leasing the Leased Property from the Trustee. NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the Trustee and the Town agree as follows: 2 ARTICLE 1 DEFINITIONS Section 1.1 Certain Funds and Accounts. All references herein to any funds and accounts shall mean the funds and accounts so designated which are established under the Indenture. Section 1.2 Definitions. All capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Indenture, unless the context otherwise requires. Capitalized terms used herein shall have the following meanings under this Lease: "1998 Certificates" means the outstanding Town of Avon, Colorado, Certificates of Participation, dated as of July 1, 1998, the proceeds of which were used by the Town to finance the 1998 Project. "1998 Project" means the acquisition, construction and installation of a public works maintenance facility with the proceeds of the 1998 Certificates. "2010 Certificates" means the "Tax- Exempt Certificates of Participation, Series 2010" dated November _, 2010, executed and delivered pursuant to the Indenture. [ "2010 Insurance Policy" means the insurance policy issued by the 2010 Insurer guaranteeing the scheduled payment of principal of and interest on the 2010 Certificates when due.] [ "2010 Insurer" means Assured Guaranty Municipal Corp. (formerly known as Financial Security Assurance Inc.), a New York stock insurance company, or any successor thereto or assignee thereof.] [ "2010 Reserve Policy" means the Municipal Bond Debt Service Reserve Insurance Policy issued by the 2010 Insurer relating to the 2010 Certificates.] "Additional Certificates" means Additional Certificates which may be executed and delivered pursuant to the Indenture. "Additional Rentals" means the payment or cost of all: (a) (i) reasonable expenses and fees of the Trustee related to the performance or discharge of its responsibilities under the provisions of this Lease, the Site Lease or the Indenture, including the reasonable fees and expenses of any person or firm employed by the Town to make rebate calculations under the provisions of Section 3.05 of the Indenture and the expenses of the Trustee in respect of any policy of insurance or surety bond obtained in respect of the Certificates executed and delivered with respect to the Lease, (ii) the cost of insurance premiums and insurance deductible amounts under any insurance policy reasonably deemed necessary by the Trustee to protect the Trustee from any liability under this Lease, and approved by the Town Representative, which approval shall not be unreasonably withheld, (iii) reasonable legal fees and expenses incurred by the Trustee to defend the Trust Estate or the Trustee from and against any legal claims, 3 and (iv) reasonable expenses and fees of the Trustee incurred at the request of the Town Representative; (b) taxes, assessments, insurance premiums, utility charges, maintenance, upkeep, repair and replacement with respect to the Leased Property or as otherwise required under this Lease; (c) payments into any account of the Reserve Fund, payments to any surety provider as a result of draws of amounts under a Qualified Surety Bond and rebate payments as provided in this Lease; (d) [payments due and owing to the insurer of any of the 2010 Certificates pursuant to Article 10 of the Indenture]; and (e) all other charges and costs (together with all interest and penalties that may accrue thereon in the event that the Town shall fall to pay the same, as specifically set forth in the Lease) which the Town agrees to assume or pay as Additional Rentals under the Lease. Additional Rentals shall not include Base Rentals. "Appropriation" means the action of the Town Council in annually making moneys available for all payments due under this Lease, including the payment of Base Rentals and Additional Rentals. "Approval of Special Counsel" means an opinion of Special Counsel to the effect that the matter proposed will not adversely affect the excludability from gross income for federal income tax purposes of the Interest Portion of the Base Rentals paid by the Town under this Lease and attributable to the 2010 Certificates. "Base Rentals" means the rental payments payable by the Town during the Lease Term, which constitute payments payable by the Town for and in consideration of the right to possess and use the Leased Property as set forth in Exhibit C (Base Rentals Schedule) hereto. Base Rentals does not include Additional Rentals. "Base Rentals Payment Dates" means the Base Rentals Payment Dates set forth in Exhibit C (Base Rentals Schedule) hereto. "Business Day" means any day, other than a Saturday, Sunday or legal holiday or a day (a) on which banks located in Denver, Colorado are required or authorized by law or executive order to close or (b) on which the Federal Reserve System is closed. thereto. "Certificates" means, collectively, the 2010 Certificates and any Additional Certificates. "Charter" means the home rule charter of the Town, and any amendments or supplements 4 "Continuing Disclosure Certificate" means the certificate executed by the Town of even date herewith which constitutes an undertaking pursuant to Rule 15c2 -12 promulgated by the Securities and Exchange Commission. "Costs of Execution and Delivery" means all items of expense directly or indirectly payable by the Trustee related to the authorization, execution and delivery of the Site Lease and this Lease and related to the authorization, sale, execution and delivery of the Certificates, as further defined in the Indenture. "Counsel" means an attorney at law or law firm (who may be counsel for the Trustee) who is satisfactory to the Town. "CRS" means Colorado Revised Statutes. "Escrow Account" means the "Town of Avon, Colorado, 1998 Certificates of Participation, Escrow Account" created in the Escrow Agreement and referred to in the Indenture. "Escrow Agreement" means the Escrow Agreement, dated as of November _, 2010, between the Town and UMB Bank, n.a., as escrow agent. "Event(s) of Lease Default" means any event as defined in Section 13.1 of this Lease. "Event of Nonappropriation" means the termination and non - renewal of this Lease by the Town, determined by the Town Council's failure, for any reason, to appropriate by the last day of each Fiscal Year, (a) sufficient amounts to be used to pay Base Rentals due in the next Fiscal Year and (b) sufficient amounts to pay such Additional Rentals as are estimated to become due in the next Fiscal Year, as provided in Section 6.4 of this Lease. An Event of Nonappropriation may also occur under certain circumstances described in Section 9.3(c) of this Lease. The term also means a notice under this Lease of the Town's intention to not renew and therefore terminate this Lease or an event described in this Lease relating to the exercise by the Town of its right to not appropriate amounts due as Additional Rentals in excess of the amounts for which an Appropriation has been previously effected. "Finance Director" means the Finance Director of the Town or the Finance Director's successor in functions, if any. "Fiscal Year" means any 12 -month period adopted by the Town as its fiscal year. "Force Majeure" means, without limitation, the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States of America, the State of Colorado or any of their departments, agencies or officials or any civil or military authority; insurrection; riots; landslides; earthquakes; fires; storms; droughts; floods; explosions; breakage or accidents to machinery, transmission pipes or canals; or any other cause or event not within the control of the Town in its capacity as lessee hereunder or the Trustee. 5 "Hazardous Substance" means and includes: (a) the terms "hazardous substance," "release" and "removal" which, as used herein, shall have the same meaning and definition as set forth in paragraphs (14), (22) and (23), respectively, of Title 42 U.S.C. §9601 and in Colorado law, provided, however, that the term "hazardous substance" as used herein shall also include "hazardous waste" as defined in paragraph (5) of 42 U.S.C. §6903 and "petroleum" as defined in paragraph (8) of 42 U.S.C. §6991; (b) the term "superf ind" as used herein means the Comprehensive Environmental Response, Compensation and Liability Act, as amended, being Title 42 U.S.C. §9601 et seq., as amended, and any similar State of Colorado statute or local ordinance applicable to the Leased Property, including, without limitation, Colorado rules and regulations promulgated, administered and enforced by any governmental agency or authority pursuant thereto; and (c) the term "underground storage tank" as used herein shall have the same meaning and definition as set forth in paragraph (1) of 42 U.S.C. §6991. "Improvement Project" means the construction, acquisition, equipping and furnishing of such capital improvements as the Town may from to time choose to construct, acquire, equip and/or furnish with the proceeds of the 2010 Certificates. The Improvement Project does not constitute a portion of the Leased Property. "Indenture" means the Indenture of Trust, dated as of November 1, 2010, entered into by the Trustee, as the same may be amended or supplemented. "Initial Term" means the period which commences on the date of delivery of this Lease and terminates on December 31, 2010. "Interest Portion" means the portion of each Base Rentals payment that represents the payment of interest set forth in Exhibit C (Base Rentals Schedule) hereto. "Lease" means this Lease Purchase Agreement, dated as of November 1, 2010, between the Trustee, as lessor, and the Town, as lessee, as the same may hereafter be amended. "Lease Balance" means the Total Aggregate Principal Portion of the Base Rentals under this Lease set forth on Exhibit C (Base Rentals Schedule) hereto, less the aggregate amount of Principal Portions of Base Rentals paid or prepaid by the Town pursuant to this Lease. "Lease Remedy" or "Lease Remedies" means any or all remedial steps provided in this Lease whenever an Event of Lease Default or an Event of Nonappropriation has happened and is continuing, which may be exercised by the Trustee as provided in this Lease and in the Indenture. "Lease Term" means the Initial Term and any Renewal Terms as to which the Town may exercise its option to renew this Lease by effecting an Appropriation of funds for the payment of Base Rentals and Additional Rentals hereunder, as provided in and subject to the provisions of this Lease. "Lease Term" refers to the time during which the Town is the lessee of the Leased Property under this Lease. "Leased Property" means the Site and, except as hereinafter provided, the premises, buildings and improvements situated thereon, including all fixtures attached thereto, as more n particularly described in Exhibit A to this Lease, together with any and all additions and modifications thereto and replacements thereof, and any New Facility. "Net Proceeds" means the proceeds of insurance, including self - insurance, required by this Lease or proceeds from any condemnation award, or proceeds derived from the exercise of any Lease Remedy or otherwise following termination of this Lease by reason of an Event of Nonappropriation or an Event of Lease Default, allocable to the Leased Property, less (a) all related expenses (including, without limitation, attorney's fees and costs) incurred in the collection of such proceeds or award; and (b) all other related fees, expenses and payments due to the Town and the Trustee. "New Facility" means any real property, buildings or equipment leased by the Town to the Trustee pursuant to a future amendment to the Site Lease and leased back by the Town from the Trustee pursuant to a future amendment to this Lease in connection with the issuance of Additional Certificates. "Owners" means the registered owners of any Certificates and Beneficial Owners. "Permitted Encumbrances," with respect to the Leased Property, means, as of any particular time: (a) liens for taxes and assessments not then delinquent, or liens which may remain unpaid pending contest pursuant to the provisions of this Lease; (b) the Site Lease, this Lease, the Indenture and any related fixture filing and any liens arising or granted pursuant to the Site Lease, this Lease or the Indenture; (c) utility, access and other easements and rights of way, licenses, permits, party wall and other agreements, restrictions and exceptions which the Town Representative certifies will not materially interfere with or materially impair the Leased Property, including rights or privileges in the nature of easements, licenses, permits and agreements as provided in this Lease or other Project Contracts; and (d) the easements, covenants, restrictions, liens and encumbrances (if any) to which title to the Leased Property was subject when leased to the Trustee pursuant to the Site Lease, as shown on Exhibit B hereto and which do not interfere in any material way with the Leased Property. "Prepayment" means any amount paid by the Town pursuant to the provisions of this Lease as a prepayment of the Base Rentals due hereunder. "Principal Portion" means the portion of each Base Rentals payment that represents the payment of principal set forth in Exhibit C (Base Rentals Schedule) hereto. "Project" means, collectively, the Improvement Project and the Refunding Project. "Purchase Option Price" means the amount payable on any date, at the option of the Town, to prepay Base Rentals, terminate the Lease Term and purchase the Trustee's leasehold interest in the Leased Property, as provided herein. "Refunding Project" means the payment, refunding and defeasance of the outstanding 1998 Certificates by depositing a portion of the proceeds of the 2010 Certificates into the Escrow Account, and the payment of expenses incidental thereto, as provided in this Lease, the Indenture and the Escrow Agreement. 7 "Renewal Term" means any portion of the Lease Term commencing on January 1 of any calendar year and terminating on or before December 31 of such calendar year as provided in Article 4 of this Lease. "Revenues" means (a) all amounts payable by or on behalf of the Town or with respect to the Leased Property pursuant to this Lease including, but not limited to, all Base Rentals, Prepayments, the Purchase Option Price and Net Proceeds, but not including Additional Rentals (except for payments made by the Town as Additional Rentals to initially fund or replenish the Reserve Fund); (b) any portion of the proceeds of the Certificates deposited into the Base Rentals Fund and the Reserve Fund, each created under the Indenture; (c) any moneys which may be derived from any insurance in respect of the Certificates, [including without limitation funds received from draws under the 2010 Insurance Policy and/or the 2010 Reserve Policy]; and (d) any moneys and securities, including investment income, held by the Trustee in the Funds and Accounts established under the Indenture (except for moneys and securities held in the Rebate Fund or the Escrow Account or any other defeasance escrow account). "Site" means, collectively, the real property owned by the Town and leased by the Town to the Trustee under the Site Lease and subleased by the Trustee to the Town under this Lease, the legal descriptions of which are set forth in Exhibit A to this Lease, or an amendment or supplement thereto. "Site Lease" means the Site and Improvement Lease, dated as of November 1, 2010, between the Town, as lessor, and the Trustee, as lessee, as the same may hereafter be amended. "Special Counsel" means any counsel experienced in matters of municipal law and listed in the list of municipal bond attorneys, as published semiannually by The Bond Buyer, or any successor publication. So long as the Lease Term is in effect, the Town shall have the right to select Special Counsel. "Tax Certificate" means, collectively, the one or more Tax Certificates entered into by the Town with respect to this Lease. "Tax Code" means the Internal Revenue Code of 1986, as amended, and all regulations and rulings promulgated thereunder. "Town" means the Town of Avon, Colorado. "Town Council" means the Town Council of the Town or any successor to its functions. "Town Representative" means the Finance Director or such other person at the time designated to act on behalf of the Town for the purpose of performing any act under this Lease, the Site Lease or the Indenture by a written certificate furnished to the Trustee containing the specimen signature of such person or persons and signed on behalf of the Town by the Mayor or Mayor Pro Tem. "Trustee" means UMB Bank, n.a., acting in the capacity of trustee pursuant to the Indenture, and any successor thereto appointed under the Indenture. ARTICLE 2 REPRESENTATIONS AND COVENANTS; RELATIONSHIP OF TOWN AND TRUSTEE Section 2.1 Representations and Covenants of the Town. The Town represents and covenants to the Trustee [and the 2010 Insurer], to the extent allowed by law and subject to renewal of this Lease and Appropriation as set forth in Article 6 hereof, as follows: (a) The Town is a home rule municipal corporation duly organized and existing within the State under the Constitution and laws of the State and its Charter. The Town is authorized to enter into this Lease and the Site Lease and to carry out its obligations under this Lease and the Site Lease. The Town has duly authorized and approved the execution and delivery of this Lease, the Site Lease and all other documents related to the execution and delivery of this Lease and the Site Lease. (b) The leasing of the Site by the Town to the Trustee pursuant to the Site Lease, and the implementation and completion of the Project by the Town and the Trustee under the terms and conditions provided for in this Lease, are necessary, convenient and in furtherance of and is in the best interests of the citizens of the Town. The Town will apply the net proceeds derived from the proceeds of the Certificates to the financing of the Project. (c) Neither the execution and delivery of this Lease and the Site Lease, nor the fulfillment of or compliance with the terms and conditions of this Lease and the Site Lease, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Town is now a parry or by which the Town or its property is bound, or violates any statute, regulation, rule, order of any court having jurisdiction, judgment or administrative order applicable to the Town, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien or encumbrance whatsoever upon any of the property or assets of the Town, except for Permitted Encumbrances. (d) The Town agrees that, except for non - renewal and nonappropriation as set forth in Article 6 hereof, if the Town fails to perform any act which the Town is required to perform under this Lease, the Trustee may, but shall not be obligated to, perform or cause to be performed such act, and any reasonable expense incurred by the Trustee in connection therewith shall be an obligation owing by the Town (from moneys for which an Appropriation has been effected) to the Trustee shall be a part of Additional Rentals, and the Trustee shall be subrogated to all of the rights of the party receiving such payment. (e) There is no litigation or proceeding pending against the Town affecting the right of the Town to execute this Lease or the Site Lease or the ability of the Town to make the payments required hereunder or to otherwise comply with the obligations contained herein, or which, if adversely determined, would, in the aggregate or in any case, materially adversely affect the property, assets, financial condition or business of E the Town or materially impair the right or ability of the Town to carry on its operations substantially as now conducted or anticipated to be conducted in the future. (f) Except for customary materials necessary for construction, operation, cleaning and maintenance of the Leased Property, the Town shall not cause or permit any Hazardous Substance to be brought upon, generated at, stored or kept or used in or about the Leased Property without prior written notice to the Trustee [and the 2010 Insurer] and all Hazardous Substances, including, customary materials necessary for construction, operation, cleaning and maintenance of the Leased Property, will be used, kept and stored in a manner that complies with all laws regulating any such Hazardous Substance so brought upon or used or kept in or about the Leased Property. If the presence of any Hazardous Substance on the Leased Property caused or permitted by the Town results in contamination of the Leased Property, or if contamination of the Leased Property by any Hazardous Substance otherwise occurs for which the Town is legally liable for damage resulting therefrom, then the Town shall include as an Additional Rental any amount necessary to reimburse the Trustee for legal expenses incurred to defend (to the extent that an Appropriation for the necessary moneys has been effected by the Town) the Trustee from claims for damages, penalties, fines, costs, liabilities or losses and, to the extent the Town shall not appropriate Additional Rentals, the Trustee shall have a first lien on assets of the Trust Estate (as defined in the Indenture) to the extent permitted by law. The reimbursement of the Trustee's legal expenses is not an indemnification. It is expressly understood that the Town is not indemnifying the Trustee and expenses of such defense shall constitute Additional Rentals. Without limiting the foregoing, if the presence of any Hazardous Substance on the Leased Property caused or permitted by the Town results in any contamination of the Leased Property, the Town shall provide prior written notice to the Trustee [and the 2010 Insurer] and promptly take all actions at its sole expense (which expenses shall constitute Additional Rentals) as are necessary to effect remediation of the contamination in accordance with legal requirements. (g) The Town covenants and agrees to comply with any applicable covenants and requirements of the Town set forth in the Tax Certificate. Section 2.2 Representations and Covenants of the Trustee. The Trustee represents and covenants as follows: (a) So long as no Event of Indenture Default has occurred and is then continuing or existing, except as specifically provided in the Site Lease or this Lease or as necessary to transfer the Trust Estate to a successor Trustee, the Trustee shall not pledge or assign the Trustee's right, title and interest in and to (i) this Lease or the Site Lease, (ii) the Base Rentals, other Revenues and collateral, security interests and attendant rights and obligations which may be derived under this Lease or the Site Lease and/or (iii) the Leased Property and any reversion therein or any of its other rights under this Lease or the Site Lease or assign, pledge, mortgage, encumber or grant a security interest in its right, title and interest in, to and under this Lease or the Site Lease or the Leased Property except for Permitted Encumbrances. (b) Neither the execution and delivery of this Lease and the Site Lease or the Indenture by the Trustee, nor the fulfillment of or compliance with the terms and conditions 10 thereof and hereof, nor the consummation of the transactions contemplated thereby or hereby conflicts with or results in a breach of the terms, conditions and provisions of any restriction or any agreement or instrument to which the Trustee is now a party or by which the Trustee is bound, or constitutes a default under any of the foregoing. (c) To the Trustee's knowledge, there is no litigation or proceeding pending against the Trustee affecting the right of the Trustee to execute this Lease and the Site Lease or to execute the Indenture, and perform its obligations thereunder or hereunder, except such litigation or proceeding as has been disclosed in writing to the Town on or prior to the date the Indenture is executed and delivered. Section 2.3 Nature of Lease. The Town and the Trustee acknowledge and agree that the Base Rentals and Additional Rentals hereunder shall constitute currently budgeted and appropriated expenditures of the Town and may be paid from any legally available funds. The Town's obligations under this Lease shall be subject to the Town's annual right to terminate this Lease (as further provided herein), and shall not constitute a mandatory charge or requirement in any ensuing Fiscal Year beyond the then current Fiscal Year. No provision of this Lease shall be construed or interpreted as creating a general obligation, multiple fiscal year financial obligation, or other indebtedness of the Town within the meaning of any constitutional, Charter, or statutory debt limitation. No provision of this Lease shall be construed or interpreted as creating an unlawful delegation of governmental powers nor as a donation by or a lending of the credit of the Town within the meaning of Article XI, Sections 1 or 2 of the Colorado constitution. Neither this Lease nor the execution and delivery of the Certificates shall directly or indirectly obligate the Town to make any payments beyond those duly budgeted and appropriated for the Town's then current Fiscal Year. The Town shall be under no obligation whatsoever to exercise its option to purchase the Trustee's interest in the Leased Property. No provision of this Lease shall be construed to pledge or to create a lien on any class or source of Town moneys, nor shall any provision of this Lease restrict the future issuance of any Town bonds or obligations payable from any class or source of Town moneys (provided, however, certain restrictions in the Indenture shall apply to the issuance of Additional Certificates). In the event that this Lease is not renewed by the Town, the sole security available to the Trustee, as lessor hereunder, shall be the Leased Property. Section 2.4 Town Acknowledgment of Certain Matters. The Town acknowledges the Indenture and the execution and delivery by the Trustee of the Certificates pursuant to the Indenture. The Town also acknowledges the Trustee's authority to act on behalf of the Owners of the Certificates with respect to all rights, title and interests of the Trustee in, to and under this Lease, the Site Lease and the Leased Property. Section 2.5 Relationship of Town and Trustee. The relationship of the Town and the Trustee under this Lease is, and shall at all times remain, solely that of lessee and lessor; and the Town neither undertakes nor assumes any responsibility or duty to the Trustee or to any third party with respect to the Trustee's obligations relating to the Leased Property; and the Trustee does not undertake or assume any responsibility or duty to the Town or to any third party with respect to the Town's obligations relating to the Leased Property. Notwithstanding any other provisions of this Lease: (a) the Town and the Trustee are not, and do not intend to be construed to be, partners, joint ventures, members, alter egos, managers, controlling persons or other 11 business associates or participants of any kind of either of the other, and the Town and the Trustee do not intend to ever assume such status; and (b) the Town and the Trustee shall not be deemed responsible for, or a participant in, any acts, omissions or decisions of either of the other. 1? ARTICLE 3 LEASE OF THE LEASED PROPERTY The Trustee demises and leases the Leased Property to the Town and the Town leases the Leased Property from the Trustee, in accordance with the provisions of this Lease, subject only to Permitted Encumbrances, to have and to hold for the Lease Term. The Town and the Trustee acknowledge that the Town owns the Leased Property and the Town has leased the Leased Property to the Trustee pursuant to the Site Lease; and the Town and the Trustee intend that there be no merger of the Town's interests as sublessee under this Lease and the Town's ownership interest in the Leased Property so as to cause the cancellation of the Site Lease or this Lease, or an impairment of the leasehold and subleasehold interest intended to be created by the Site Lease and this Lease. 13 ARTICLE 4 LEASE TERM Section 4.1 Duration of Lease Term. The Lease Term shall commence as of the date hereof. The Initial Term shall terminate on December 31, 2010. This Lease may be renewed, solely at the option of the Town, for (__) Renewal Terms, with the Lease Term terminating no later than December 31, 20_. The Town hereby finds that the maximum Lease Term hereunder does not exceed the weighted average useful life of the Leased Property. The Town further determines and declares that the period during which the Town has an option to purchase the Trustee's leasehold interest in the Leased Property (i.e. the entire maximum Lease Term) does not exceed the useful life of the Leased Property. The Finance Director or other officer of the Town at any time charged with the responsibility of formulating budget proposals for the Town is hereby directed to include in the annual budget proposals submitted to the Town Council, in any year in which this Lease shall be in effect, items for all payments required for the ensuing Renewal Term under this Lease until such time, if any, as the Town may determine to not renew and terminate this Lease. Notwithstanding this directive regarding the formulation of budget proposals, it is the intention of the Town that any decision to effect an Appropriation for the Base Rentals and Additional Rentals shall be made solely by the Town Council and not by any other official of the Town, as further provided in the following paragraph. During the Lease Term, the Town shall in any event, whether or not the Lease is to be renewed, furnish the Trustee with copies of its annual budget promptly after the budget is adopted. Not later than December 15 of the then current Initial Term or any Renewal Term the Town Representative shall give written notice (in substantially the form set forth in Exhibit D attached hereto) to the Trustee that either: (a) the Town has effected or intends to effect on a timely basis an Appropriation for the ensuing Fiscal Year which includes (1) sufficient amounts authorized and directed to be used to pay all of the Base Rentals and (2) sufficient amounts to pay such Additional Rentals as are estimated to become due, all as further provided in Sections 6.2, 6.3 and 6.4 of this Lease, whereupon, this Lease shall be renewed for the ensuing Fiscal Year; or (b) the Town has determined, for any reason, not to renew this Lease for the ensuing Fiscal Year. Subject to the provisions of Section 6.4(a) hereof, the failure to give such notice shall not constitute an Event of Lease Default, nor prevent the Town from electing not to renew this Lease, nor result in any liability on the part of the Town. The Town's option to renew or not to renew this Lease shall be conclusively determined by whether or not the applicable Appropriation has been made on or before December 31 of each Fiscal Year, all as further provided in Article 6 of this Lease. 14 The terms and conditions hereof during any Renewal Term shall be the same as the terms and conditions hereof during the Initial Term, except that the Purchase Option Price and the Base Rentals shall be as provided in Article 12 and Exhibit C (Base Rentals Schedule) hereof. Section 4.2 Termination of Lease Term. The Lease Term shall terminate upon the earliest of any of the following events: (a) the expiration of the Initial Term or any Renewal Term during which there occurs an Event of Nonappropriation pursuant to Section 4.1 and Article 6 of this Lease (provided that the Lease Term will not be deemed to have been terminated if the Event of Nonappropriation is cured as provided in Section 6.4 hereof); (b) the occurrence of an Event of Nonappropriation under this Lease (provided that the Lease Term will not be deemed to have been terminated if the Event of Nonappropriation is cured as provided in Section 6.4 hereof); (c) the conveyance of the Trustee's leasehold interest in the Leased Property under this Lease to the Town upon payment of the Purchase Option Price or all Base Rentals and Additional Rentals, for which an Appropriation has been effected by the Town for such purpose, as provided in Section 11.2(a) or (b) of this Lease; or (d) an uncured Event of Lease Default and termination of this Lease under Article 13 of this Lease by the Trustee. Except for an event described in subparagraph (c) above, upon termination of this Lease, the Town agrees to peacefully deliver possession of the Leased Property to the Trustee. Termination of the Lease Term shall terminate all unaccrued obligations of the Town under this Lease, and shall terminate the Town's rights of possession under this Lease (except to the extent of the holdover provisions of Sections 6.5 and 13.2(d)(i) hereof, and except for any conveyance pursuant to Article 11 of this Lease). All obligations of the Town accrued prior to such termination shall be continuing until the Trustee gives written notice to the Town that such accrued obligations have been satisfied. Upon termination of the Lease Term any moneys received by the Trustee in excess of the amounts necessary to terminate and discharge the Indenture, shall be paid to the Town. The Town shall not have the right to terminate this Lease due to a default by the Trustee under this Lease. 15 ARTICLE 5 ENJOYMENT OF THE LEASED PROPERTY Section 5.1 Trustee's Covenant of Quiet Enjoyment. The Trustee hereby covenants that the Town shall, during the Lease Term, peaceably and quietly have, hold and enjoy the Leased Property without suit, trouble or hindrance from the Trustee, except as expressly required or permitted by this Lease. The Trustee shall not interfere with the quiet use and enjoyment of the Leased Property by the Town during the Lease Term so long as no Event of Lease Default shall have occurred. The Trustee shall, at the request of the Town and at the cost of the Town, join and cooperate fully in any legal action in which the Town asserts against third parties its right to such possession and enjoyment, or which involves the imposition of any taxes or other governmental charges on or in connection with the Leased Property. In addition, the Town may at its own expense join in any legal action affecting its possession and enjoyment of the Leased Property and shall be joined in any action affecting its liabilities hereunder. The provisions of this Article 5 shall be subject to the Trustee's right to inspect the Leased Property and the Town's books and records with respect thereto as provided in Section 10.8 hereof. Section 5.2 Town's Need for the Leased Property; Determinations as to Fair Value and Fair Purchase Price. The Town has determined and hereby determines that it has a current need for the Leased Property. It is the present intention and expectation of the Town that this Lease will be renewed annually until the Trustee's interests in the Site Lease are released and unencumbered title to the Leased Property is acquired by the Town pursuant to this Lease; but this declaration shall not be construed as contractually obligating or otherwise binding the Town. The Town has determined and hereby determines that the Base Rentals under this Lease during the Lease Term for the Leased Property represent the fair value of the use of the Leased Property and that the Purchase Option Price for the Leased Property will represent the fair purchase price of the Trustee's leasehold interest in the Leased Property at the time of the exercise of the option. The Town has determined and hereby determines that the Base Rentals do not exceed a reasonable amount so as to place the Town under an economic compulsion to renew this Lease or to exercise its option to purchase the Trustee's leasehold interest in the Leased Property hereunder. In making such determinations, the Town has given consideration to the estimated current value of the Leased Property, the uses and purposes for which the Leased Property will be employed by the Town, the benefit to the citizens and inhabitants of the Town by reason of the use and occupancy of the Leased Property pursuant to the terms and provisions of this Lease, the Town's option to purchase the Trustee's leasehold interest in the Leased Property and the expected eventual vesting of unencumbered title to the Leased Property in the Town. The Town hereby determines and declares that the period during which the Town has an option to purchase the Trustee's leasehold interest in the Leased Property (i.e., the entire maximum Lease Term for the Leased Property) does not exceed the weighted average useful life of the Leased Property. ARTICLE 6 PAYMENTS BY THE TOWN Section 6.1 Payments to Constitute Currently Budgeted Expenditures of the Town. The Town and the Trustee acknowledge and agree that the Base Rentals, Additional Rentals and any other obligations hereunder shall constitute currently budgeted expenditures of the Town, if an Appropriation has been effected for such purpose. The Town's obligations to pay Base Rentals, Additional Rentals and any other obligations under this Lease shall be from year to year only (as further provided in Article 4 and Sections 6.2 and 6.4 hereof), shall extend only to moneys for which an Appropriation has been effected by the Town, and shall not constitute a mandatory charge, requirement or liability in any ensuing Fiscal Year beyond the then current Fiscal Year. No provision of this Lease shall be construed or interpreted as a delegation of governmental powers or as creating a multiple fiscal year direct or indirect debt or other financial obligation whatsoever of the Town or a general obligation or other indebtedness of the Town within the meaning of any constitutional, Charter provision or statutory debt limitation, including without limitation Article X, Section 20 of the Colorado constitution. This Lease shall not directly or indirectly obligate the Town to make any payments beyond those for which an Appropriation has been effected by the Town for the Town's then current Fiscal Year. The Town shall be under no obligation whatsoever to exercise its option to purchase the Trustee's leasehold interest in the Leased Property. No provision of this Lease shall be construed to pledge or to create a lien on any class or source of Town moneys, nor shall any provision of this Lease restrict the future issuance of any Town bonds or obligations payable from any class or source of Town moneys (provided, however, that certain restrictions in the Indenture shall apply to the issuance of Additional Certificates). Section 6.2 Base Rentals, Purchase Option Price and Additional Rentals. (a) The Town shall pay Base Rentals for which an Appropriation has been effected by the Town, directly to the Trustee during the Initial Term and any Renewal Term, on the Base Rentals Payment Dates and in the "Total Base Rentals" amounts set forth in Exhibit C (Base Rentals Schedule) attached hereto and made a part hereof. For federal and State income tax purposes, a portion of each payment of Base Rentals for each series of Certificates is designated and will be paid as interest, and Exhibit C (Base Rentals Schedule) hereto sets forth the Interest Portion of each payment of Base Rentals for each series of Certificates. The Town shall receive credit against its obligation to pay Base Rentals to the extent moneys are held by the Trustee on deposit in the Base Rentals Fund created under the Indenture and are available to pay Base Rentals. The Town acknowledges that upon receipt by the Trustee of each payment of Base Rentals, the Trustee, pursuant to the terms of the Indenture, is to deposit the amount of such Base Rentals in the Base Rentals Fund. The Base Rentals set forth in Exhibit C shall be recalculated in the event of the issuance of Additional Certificates as provided in the Indenture and shall also be recalculated in the event of a partial redemption of the Certificates. (b) The Town may, on any date, pay the then applicable Purchase Option Price for the purpose of terminating this Lease and the Site Lease in whole and purchasing the Trustee's leasehold interest in the Leased Property as further provided in Article 11 of this Lease. Subject 17 to the Approval of Special Counsel, the Town may also, at any time during the Lease Term, (1) prepay any portion of the Base Rentals due under this Lease and (2) in connection with such prepayment, recalculate the Base Rentals set forth in Exhibit C (Base Rentals Schedule). Any such revised Exhibit C (Base Rentals Schedule) shall be prepared by the Town Representative and delivered to the Trustee. The Town shall give the Trustee notice of its intention to exercise either of such options not less than forty -five (45) days in advance of the date of exercise and shall deposit with the Trustee by not later than the date of exercise an amount equal to the Purchase Option Price due on the date of exercise or the applicable amount of Base Rentals to be prepaid. If the Town shall have given notice to the Trustee of its intention to prepay Base Rentals but shall not have deposited the amounts with the Trustee on the date specified in such notice, the Town shall continue to pay Base Rentals which have been specifically appropriated by the Town Council for such purpose as if no such notice had been given. The Trustee may waive the right to receive forty -five (45) days advance notice and may agree to a shorter notice period. (c) All Additional Rentals shall be paid by the Town on a timely basis directly to the person or entity to which such Additional Rentals are owed. Additional Rentals shall include, without limitation, the reasonable fees and expenses of the Trustee, reasonable expenses of the Trustee in connection with the Leased Property and for the cost of taxes, insurance premiums, utility charges, maintenance and repair costs and all other expenses expressly required to be paid hereunder, including payments into the Reserve Fund (to the extent the Reserve Fund is cash - funded) or, to the extent that the Reserve Fund is funded with a Qualified Surety Bond as permitted by the Indenture, repayment of draws on any Qualified Surety Bond, and any other amounts due to the insurer of any of the Certificates and the provider of any Qualified Surety Bond, and any Rebate Fund payments required pursuant to this Lease and the Indenture. If any portion of the Reserve Fund is cash - funded as provided in Section 3.04 of the Indenture, to the extent that moneys in the Reserve Fund are applied pursuant to paragraph (a) or (b) of Section 3.04 of the Indenture, the Town will pay to the Trustee, for deposit in the Reserve Fund, as Additional Rentals, such amounts as are required to restore the amount on deposit in the Reserve Fund to the Reserve Fund Requirement within ninety (90) days following the withdrawal of moneys from the Reserve Fund. If Section 3.04 of the Indenture only requires the Reserve Fund to be funded upon the occurrence of certain events, the Town will pay to the Trustee any amounts required to be deposited into the Reserve Fund at the times and in the amounts required by Section 3.04 of the Indenture. All of the payments required by this paragraph are subject to Appropriation by the Town; provided, however, a failure by the Town to budget and appropriate moneys for any of the payments required by this paragraph shall constitute an Event of Nonappropriation. If the Town's estimates of Additional Rentals for any Fiscal Year are not itemized in the budget required to be furnished to the Trustee under Section 4.1 of this Lease, the Town shall furnish an itemization of such estimated Additional Rentals to the Trustee on or before the 15th day preceding such Fiscal Year. Section 6.3 Manner of Payment. The Base Rentals, for which an Appropriation has been effected by the Town, and, if paid, the Purchase Option Price, shall be paid or prepaid by the Town to the Trustee at its corporate trust office by wire transfer of federal funds, certified 18 funds or other method of payment acceptable to the Trustee in lawful money of the United States of America to the Trustee at its corporate trust office. The obligation of the Town to pay the Base Rentals and Additional Rentals as required under this Article 6 and other sections hereof in any Fiscal Year for which an Appropriation has been effected by the Town for the payment thereof shall be absolute and unconditional and payment of the Base Rentals and Additional Rentals in such Fiscal Years shall not be abated through accident or unforeseen circumstances, or any default by the Trustee under this Lease, or under any other agreement between the Town and the Trustee, or for any other reason including without limitation, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Leased Property, commercial frustration of purpose, or failure of the Trustee, to perform and observe any agreement, whether expressed or implied, or any duty, liability or obligation arising out of or connected with this Lease, it being the intention of the parties that the payments required by this Lease will be paid in full when due without any delay or diminution whatsoever, subject only to the annually renewable nature of the Town's obligation hereunder as set forth in Section 6.1 hereof, and further subject to the Town's rights under Section 8.3 hereof. Notwithstanding any dispute between the Town and the Trustee, the Town shall, during the Lease Term, make all payments of Base Rentals and Additional Rentals in such Fiscal Years and shall not withhold any Base Rentals or Additional Rentals, for which an Appropriation has been effected by the Town, pending final resolution of such dispute (except to the extent permitted by Sections 7.2 and 8.3 hereof with respect to certain Additional Rentals), nor shall the Town assert any right of set -off or counterclaim against its obligation to make such payments required hereunder. No action or inaction on the part of the Trustee shall affect the Town's obligation to pay all Base Rentals and Additional Rentals, for which a specific Appropriation has been effected by the Town for such purpose, in such Fiscal Years subject to this Article (except to the extent provided by Sections 7.2 and 8.3 hereof with respect to certain Additional Rentals). Section 6.4 Nonappropriation. In the event that the Town gives notice that it intends to not renew this Lease as provided by Section 4.1 hereof or the Town shall not effect an Appropriation, on or before December 31 of each Fiscal Year, of moneys to pay all Base Rentals and reasonably estimated Additional Rentals coming due for the next ensuing Renewal Term as provided in Section 4.1 hereof and this Article, or in the event that the Town is proceeding under the provisions of Section 9.3(c) hereof (when applicable), an Event of Nonappropriation shall be deemed to have occurred; subject, however, to each of the following provisions: (a) In the event the Trustee does not receive the written notice provided for by Section 4.1 hereof or evidence that an Appropriation has been effected by the Town on or before December 31 of a Fiscal Year, then the Trustee shall declare an Event of Nonappropriation on the first Business Day of the February following such Fiscal Year or such declaration shall be made on any earlier date on which the Trustee receives official, specific written notice from the Town that this Lease will not be renewed. In order to declare an Event of Nonappropriation, the Trustee shall send written notice thereof to the Town [and the 2010 Insurer]. (b) The Trustee shall waive any Event of Nonappropriation which is cured by the Town, within 30 days of the receipt by the Town of notice from the Trustee as 19 provided in (a) above, by a duly effected Appropriation to pay all Base Rentals and sufficient amounts to pay reasonably estimated Additional Rentals coming due for such Renewal Term. (c) Pursuant to the terms of the Indenture, [with the prior written consent of the 2010 Insurer], the Trustee may waive any Event of Nonappropriation which is cured by the Town within a reasonable time with the procedure described in (b) above. If, during the Initial Term or any Renewal Term, any Additional Rentals shall become due which were not included in a duly effected Appropriation and moneys are not specifically budgeted and appropriated or otherwise made available to pay such Additional Rentals within 60 days subsequent to the date upon which such Additional Rentals are due, an Event of Nonappropriation shall be deemed to have occurred, upon notice by the Trustee to the Town to such effect (subject to waiver by the Trustee as hereinbefore provided). If an Event of Nonappropriation occurs, the Town shall not be obligated to make payment of the Base Rentals or Additional Rentals or any other payments provided for herein which accrue after the last day of the Initial Term or any Renewal Term during which such Event of Nonappropriation occurs; provided, however, that, subject to the limitations of Sections 6.1 and 13.3 hereof, the Town shall continue to be liable for Base Rentals and Additional Rentals allocable to any period during which the Town shall continue to occupy, use or retain possession of the Leased Property. Subject to Section 6.5 hereof, the Town shall in all events vacate or surrender possession of the Leased Property by March 1 of the Renewal Term in respect of which an Event of Nonappropriation has occurred. After March 1 of the Renewal Term in respect of which an Event of Nonappropriation has occurred, the Trustee may proceed to exercise all or any Lease Remedies. The Town acknowledges that, upon the occurrence of an Event of Nonappropriation (a) the Trustee shall be entitled to all moneys then being held in all funds created under the Indenture (except the Rebate Fund, the Escrow Account and any other defeasance escrow accounts) to be used as described therein and (b) all property, funds and rights then held or acquired by the Trustee upon the termination of this Lease by reason of an Event of Nonappropriation are to be held by the Trustee in accordance with the terms of the Indenture. Section 6.5 Holdover Tenant. If the Town falls to vacate the Leased Property after termination of this Lease, whether as a result of the occurrence of an Event of Nonappropriation or an Event of Lease Default as provided in Section 13.2(a) hereof, with the written permission of the Trustee it will be deemed to be a holdover tenant on a month -to -month basis, and will be bound by all of the other terms, covenants and agreements of this Lease. Any holding over by the Town without the written permission of the Trustee shall be at sufferance. The amount of rent to be paid monthly during any period when the Town is deemed to be a holdover tenant will be equal to (a) one -sixth of the Interest Portion of the Base Rentals coming due on the next succeeding Base Rentals Payment Date plus one - twelfth of the Principal Portion of the Base Rentals coming due on the next succeeding Base Rentals Payment Date on which a Principal O Portion of the Base Rentals would have been payable with appropriate adjustments to ensure the full payment of such amounts on the due dates thereof in the event termination occurs during a Renewal Term plus (b) Additional Rentals as the same shall become due. Section 6.6 Prohibition of Adverse Budget or Appropriation Modifications. To the extent permitted by law, the Town shall not, during any Fiscal Year of the Lease Term, make any budgetary transfers or other modifications to its then existing budget and appropriation measures relating to the Leased Property or this Lease which would adversely affect the Town's ability to meet its obligation to pay Base Rentals and duly budgeted and appropriated Additional Rentals hereunder. 21 ARTICLE 7 TITLE TO LEASED PROPERTY; LIMITATIONS ON ENCUMBRANCES Section 7.1 Title to the Leased Property At all times during the Lease Term, title to the Leased Property shall remain in the Town, subject to the Site Lease, this Lease, the Indenture and any other Permitted Encumbrances. Except for personal property purchased by the Town at its own expense pursuant to Section 8.2 of this Lease, a leasehold estate in the Leased Property and any and all additions and modifications thereto and replacements thereof shall be held in the name of the Trustee until the Trustee has exercised Lease Remedies or until the Trustee's leasehold interest in the Leased Property is conveyed to the Town as provided in Article 11 of this Lease, notwithstanding (a) the occurrence of an Event of Nonappropriation; (b) the occurrence of one or more Events of Lease Default; (c) the occurrence of any event of damage, destruction, condemnation, or construction, manufacturing or design defect or title defect, as provided in Article 9 of this Lease; or (d) the violation by the Trustee of any provision of the Site Lease or this Lease. The Trustee shall be provided with an owner's title insurance policy insuring the Town's fee simple title to the Site and the Trustee's leasehold interest in the Site pursuant to the Site Lease, subject only to Permitted Encumbrances, in an amount not less than the aggregate principal amount of the Certificates or such lesser amount as shall be the maximum insurable value of the Leased Property. Such policy, or a binding commitment therefor, shall be provided to the Trustee concurrently with the issuance of each series of Certificates. The Trustee shall not, in any way, be construed as the owner of the Leased Property. Section 7.2 No Encumbrance, Mortgage or Pledge of the Leased Property. Except as may be permitted by this Lease, the Town shall not permit any mechanic's or other lien to be established or remain against the Leased Property; provided that, if the Town shall first notify both the Trustee [and the 2010 Insurer] of the intention of the Town to do so, the Town may in good faith contest any mechanic's or other lien filed or established against the Leased Property, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the Trustee shall notify the Town that, in the opinion of Counsel, by nonpayment of any such items the Trustee's leasehold interest in the Leased Property will be materially endangered, or the Leased Property or any part thereof will be subject to loss or forfeiture, in which event the Town shall promptly pay and cause to be satisfied and discharged all such unpaid items (provided, however, that such payment shall not constitute a waiver of the right to continue to contest such items). The Trustee will cooperate in any such contest. Except as may be permitted by this Lease, the Town shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Leased Property, except Permitted Encumbrances. The Town shall promptly, at its expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, charge, encumbrance or claim not excepted above. 0% ARTICLE 8 MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES Section 8.1 Maintenance of the Leased Property by the Town. Subject to its right to not appropriate and as otherwise provided in Section 9.3 hereof, the Town agrees that at all times during the Lease Term, the Town will maintain, preserve and keep the Leased Property or cause the Leased Property to be maintained, preserved and kept, in good repair, working order and condition, and from time to time make or cause to be made all necessary and proper repairs, including replacements, if necessary. The Trustee shall have no responsibility in any of these matters or for the making of any additions, modifications or replacements to the Leased Property. Section 8.2 Modification of the Leased Property; Installation of Furnishings and Machinery of the Town. The Town shall have the privilege of making substitutions, additions, modifications and improvements to the Leased Property, at its own cost and expense, as appropriate and any such substitutions, additions, modifications and improvements to the Leased Property shall be the property of the Town, subject to the Site Lease, this Lease and the Indenture and shall be included under the terms of the Site Lease, this Lease and the Indenture; provided, however, that such substitutions, additions, modifications and improvements shall not in any way damage the Leased Property or cause the Leased Property to be used for purposes other than lawful governmental functions of the Town (except to the extent of subleasing permitted under Section 12.2 hereof) or cause the Town to violate its tax covenant in Section 10.5 hereof; and provided that the Leased Property, as improved or altered, upon completion of such substitutions, additions, modifications and improvements, shall be of a value not less than the value of the Leased Property immediately prior to such making of substitutions, additions, modifications and improvements. The Town may also, from time to time in its sole discretion and at its own expense, install machinery, equipment and other tangible property in or on the Leased Property. All such machinery, equipment and other tangible property shall remain the sole property of the Town in which the Trustee shall have no interests; provided, however, that title to any such machinery, equipment and other tangible property which becomes permanently affixed to the Leased Property shall be included under the terms of the Site Lease, this Lease and the Indenture, in the event the Trustee shall reasonably determine that such Leased Property would be damaged or impaired by the removal of such machinery, equipment or other tangible property. Section 8.3 Taxes, Other Governmental Charges and Utility Charges. In the event that the Leased Property shall, for any reason, be deemed subject to taxation, assessments or charges lawfully made by any governmental body, the Town shall pay the amount of all such taxes, assessments and governmental charges then due, as Additional Rentals. With respect to special assessments or other governmental charges which may be lawfully paid in installments over a period of years, the Town shall be obligated to provide for Additional Rentals only for such installments as are required to be paid during the upcoming Fiscal Year. Except for Permitted Encumbrances, the Town shall not allow any liens for taxes, assessments or governmental charges to exist with respect to the Leased Property (including, without limitation, any taxes levied upon the Leased Property which, if not paid, will become a charge on the rentals and receipts from the Leased Property, or any interest therein, including the leasehold interests of the Trustee), or the rentals and revenues derived therefrom or hereunder. The Town shall also 23 pay as Additional Rentals, as the same respectively become due, all utility and other charges and fees and other expenses incurred in the operation, maintenance and upkeep of the Leased Property. [With the prior written consent of the 2010 Insurer, which consent shall not be unreasonably withheld], the Town may, at its expense, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments, utility or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Trustee shall notify the Town that, in the opinion of Counsel, by nonpayment of any such items the value of the Leased Property will be materially endangered or the Leased Property will be subject to loss or forfeiture, or the Trustee will be subject to liability, in which event such taxes, assessments, utility or other charges shall be paid forthwith (provided, however, that such payment shall not constitute a waiver of the right to continue to contest such taxes, assessments, utility or other charges). Section 8.4 Provisions For Liability, Property and Worker's Compensation Insurance after Completion. Upon the execution and delivery of this Lease, the Town shall, at its own expense, cause casualty and property insurance to be carried and maintained with respect to the Leased Property in an amount equal to the estimated replacement cost of the Leased Property. Such insurance policy or policies may have a deductible clause in an amount not to exceed $150,000. The Town may, in its discretion, insure the Leased Property under blanket insurance policies which insure not only the Leased Property, but other buildings as well, as long as such blanket insurance policies comply with the requirements hereof. If the Town shall insure against similar risks by self - insurance, the Town may, at its election [and with the prior written consent of the 2010 Insurer], provide for casualty and property damage insurance with respect to the Leased Property, partially or wholly by means of a self - insurance fund. If the Town shall elect to self - insure, the Town Representative shall annually furnish to the Trustee [and the 2010 Insurer] a certification of the adequacy of the Town's reserves. Upon the execution and delivery of this Lease, the Town shall, at its own expense, cause public liability insurance to be carried and maintained with respect to the activities to be undertaken by and on behalf of the Town in connection with the use of the Leased Property, in an amount not less than the limitations provided in the Colorado Governmental Immunity Act (Article 10, Title 24, Colorado Revised Statutes, as heretofore or hereafter amended). Such insurance may contain deductibles and exclusions deemed reasonable by the Town Council. The public liability insurance required by this Section may be by blanket insurance policy or policies. If the Town shall insure against similar risks by self - insurance, the Town, at its election [and with the prior written consent of the 2010 Insurer], may provide for public liability insurance with respect to the Leased Property, partially or wholly by means of a self - insurance fund. If the Town shall elect to self - insure, the Town Representative shall annually furnish to the Trustee [and the 2010 Insurer] a certification of the adequacy of the Town's reserves. Any casualty and property damage insurance policy required by this Section shall be so written or endorsed as to make payments under such insurance policy of $25,000 or less payable to the Town, and payments under such insurance policy over $25,000 payable to the Trustee, who, along with the Town, shall be a co- insured. Each insurance policy provided for in this Section shall be issued by an insurance provider rated "A" or better by Standard & Poors, [unless 24 waived by the 2010 Insurer], and shall contain a provision to the effect that the insurance company shall not cancel the policy without first giving written notice thereof to the Town, the Trustee [and the 2010 Insurer] at least 30 days in advance of such cancellation. All insurance policies issued pursuant to this Section, or certificates evidencing such policies, shall be deposited with the Trustee. No agent or employee of the Town shall have the power to adjust or settle any loss with respect to the Leased Property in excess of $25,000, whether or not covered by insurance, without the prior written consent of the Trustee. Upon request of the Trustee, the Town shall provide certificates of insurance or other appropriate evidence of self - insurance, with appropriate endorsements attached demonstrating that the Trustee have been named as an additional insured or loss payee and that the 30 -day required notice of cancellation provision is in effect. A certificate of insurance from the Town or the Town's insurance agent will be acceptable evidence of insurance. Certificates evidencing all insurance policies issued pursuant to this Section shall be deposited with the Trustee. Section 8.5 Advances. If the Town fails to pay any Additional Rentals during the Lease Term as such Additional Rentals become due, the Trustee may (but shall not be obligated to) pay such Additional Rentals and the Town agrees to reimburse the Trustee to the extent permitted by law and subject to Appropriation as provided under Article 6 hereof. Section 8.6 Granting of Easements. As long as no Event of Nonappropriation or Event of Lease Default shall have happened and be continuing, the Trustee, [with the prior written consent of the 2010 Insurer], shall upon the request of the Town, (a) grant or enter into easements, permits, licenses, party wall and other agreements, rights -of -way (including the dedication of public roads) and other rights or privileges in the nature of easements, permits, licenses, party wall and other agreements and rights of way with respect to any property or rights included in this Lease (whether such rights are in the nature of surface rights, sub - surface rights or air space rights), free from this Lease and any security interest or other encumbrance created hereunder or thereunder; (b) release existing easements, permits, licenses, party wall and other agreements, rights -of -way, and other rights and privileges with respect to such property or rights, with or without consideration; and (c) execute and deliver any instrument necessary or appropriate to grant, enter into or release any such easement, permit, license, party wall or other agreement, right -of -way or other grant or privilege upon receipt of. (i) a copy of the instrument of grant, agreement or release and (ii) a written application signed by the Town Representative requesting such grant, agreement or release and stating that such grant, agreement or release will not materially impair the effective use or materially interfere with the operation of the Leased Property. 25 ARTICLE 9 DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS Section 9.1 Damage, Destruction and Condemnation. If, during the Lease Term, (a) the Leased Property shall be destroyed (in whole or in part), or damaged by fire or other casualty; or (b) title to, or the temporary or permanent use of, the Leased Property or the estate of the Town or the Trustee in the Leased Property is taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or entity acting under governmental authority; or (c) a breach of warranty or a material defect in the construction, manufacture or design of the Leased Property becomes apparent; or (d) title to or the use of all or a portion of the Leased Property is lost by reason of a defect in title thereto; then the Town shall be obligated to continue to pay Base Rentals and Additional Rentals (subject to Article 6 hereof). Section 9.2 Obligation to Repair and Replace the Leased Property. The Town and the Trustee, to the extent Net Proceeds are within their respective control, shall cause such Net Proceeds to be deposited in a separate trust fund. All Net Proceeds so deposited shall be applied to the prompt repair, restoration, modification, improvement or replacement of the Leased Property by the Town, upon receipt of requisitions acceptable to the Trustee signed by the Town Representative stating with respect to each payment to be made: due; (a) the requisition number; (b) the name and address of the person, firm or entity to whom payment is (c) the amount to be paid; and (d) that each obligation mentioned therein has been properly incurred, is a proper charge against the separate trust fund and has not been the basis of any previous withdrawal and specifying in reasonable detail the nature of the obligation, accompanied by a bill or a statement of account for such obligation. The Town and the Trustee shall agree to cooperate and use their best reasonable efforts subject to the terms of the Indenture to enforce claims which may arise in connection with material defects in the construction, manufacture or design of the Leased Property or otherwise. If there is a balance of any Net Proceeds allocable to the Leased Property remaining after such repair, restoration, modification, improvement or replacement has been completed, this balance shall be used by the Town, to: 26 (a) add to, modify or alter the Leased Property or add new components thereto, or (b) prepay the Base Rentals with a corresponding adjustment in the amount of Base Rentals payable under Exhibit C (Base Rentals Schedule) to this Lease or (c) accomplish a combination of (a) and (b). Any repair, restoration, modification, improvement or replacement of the Leased Property paid for in whole or in part out of Net Proceeds allocable to the Leased Property shall be the property of the Town, subject to the Site Lease, this Lease and the Indenture and shall be included as part of the Leased Property under this Lease. Section 9.3 Insufficiency of Net Proceeds. If the Net Proceeds (plus any amounts withheld from such Net Proceeds by reason of any deductible clause) are insufficient to pay in full the cost of any repair, restoration, modification, improvement or replacement of the Leased Property required under Section 9.2 of this Lease, the Town may elect to: (a) complete the work or, [with the written consent of the Trustee and the 2010 Insurer], replace such Leased Property (or portion thereof) with similar property of a value equal to or in excess of such portion of the Leased Property and pay as Additional Rentals, to the extent amounts for Additional Rentals which have been specifically appropriated by the Town are available for payment of such cost, any cost in excess of the amount of the Net Proceeds allocable to the Leased Property, and the Town agrees that, if by reason of any such insufficiency of the Net Proceeds allocable to the Leased Property, the Town shall make any payments pursuant to the provisions of this paragraph, the Town shall not be entitled to any reimbursement therefor from the Trustee, nor shall the Town be entitled to any diminution of the Base Rentals and Additional Rentals, for which a specific Appropriation has been effected by the Town for such purpose, payable under Article 6 of this Lease; or (b) apply the Net Proceeds allocable to the Leased Property to the payment of the Purchase Option Price in accordance with Article 11 of this Lease, or, with the written consent of the Trustee [and the 2010 Insurer], an appropriate portion thereof. In the event of an insufficiency of the Net Proceeds for such purpose, the Town shall, subject to the limitations of Section 6.1 hereof, pay such amounts as may be necessary to equal that portion of the Purchase Option Price which is attributable to the Leased Property for which Net Proceeds have been received (as certified to the Trustee by the Town); and in the event the Net Proceeds shall exceed such portion of the Purchase Option Price, such excess shall be used as directed by the Town in the same manner as set forth in Section 9.2 hereof; or (c) if the Town does not timely budget and appropriate sufficient funds to proceed under either (a) or (b) above, an Event of Nonappropriation will be deemed to have occurred and, subject to the Town's right to cure, the Trustee may pursue remedies available to it following an Event of Nonappropriation. 27 The above referenced election shall be made by the Town within 90 days of the occurrence of an event specified in Section 9.1 of this Lease. It is hereby declared to be the Town's present intention that, if an event described in Section 9.1 hereof should occur and if the Net Proceeds shall be insufficient to pay in full the cost of repair, restoration, modification, improvement or replacement of the Leased Property, the Town would use its best efforts to proceed under either paragraph (a) or paragraph (b) above; but it is also acknowledged that the Town must operate within budgetary and other economic constraints applicable to it at the time, which cannot be predicted with certainty; and accordingly the foregoing declaration shall not be construed to contractually obligate or otherwise bind the Town. Section 9.4 Cooperation of the Trustee. The Trustee shall cooperate fully with the Town in filing any proof of loss with respect to any insurance policy covering the events described in Section 9.1 of this Lease and in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Leased Property and the enforcement of all warranties relating to the Leased Property. So long as no Event of Lease Default or Event of Nonappropriation has occurred and is then existing, the Trustee shall not voluntarily settle, or consent to the settlement of, any proceeding arising out of any insurance claim performance or payment bond claim, prospective or pending condemnation proceeding with respect to the Leased Property without the written consent of the Town. 28 ARTICLE 10 DISCLAIMER OF WARRANTIES; OTHER COVENANTS Section 10.1 Disclaimer of Warranties. THE TRUSTEE HAS NOT MADE AND WILL NOT MAKE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE LEASED PROPERTY. THE TOWN HEREBY ACKNOWLEDGES AND DECLARES THAT THE TOWN IS SOLELY RESPONSIBLE FOR THE COMPLETION OF THE IMPROVEMENT PROJECT AND THE MAINTENANCE AND OPERATION OF THE LEASED PROPERTY, AND THAT THE TRUSTEE HAS NO RESPONSIBILITY THEREFOR. For the purpose of enabling the Town to discharge such responsibility, the Trustee constitutes and appoints the Town as its attorney in fact for the purpose of asserting and enforcing, at the sole cost and expense of the Town, all manufacturer's warranties and guaranties, express or implied, with respect to the Leased Property, as well as any claims or rights the Trustee may have in respect of the Leased Property against any manufacturer, supplier, contractor or other person. Except as otherwise provided in this Lease, the Trustee shall not be liable for any direct or indirect, incidental, special or consequential damage in connection with or arising out of this Lease or the existence, furnishing, functioning or use by the Town of any item, product or service provided for herein except that nothing shall relieve the Trustee's liability for any claims, damages, liability or court awards, including costs, expenses and attorney fees, relating to or arising from the Trustee's actions or omissions that result in personal injury (including death), damage to tangible personal property and/or intellectual property infringement or resulting from the negligence, bad faith or intentional misconduct of the Trustee or its employees. Section 10.2 Further Assurances and Corrective Instruments. The Trustee and the Town agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such amendments hereof or supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Leased Property. Section 10.3 Compliance with Requirements. During the Lease Term, the Town and the Trustee shall observe and comply promptly to the extent possible with all current and future orders of all courts having jurisdiction over the Leased Property, provided that the Town and the Trustee may contest or appeal such orders so long as they are in compliance with such orders during the contest or appeal period, and all current and future requirements of all insurance companies writing policies covering the Leased Property. Section 10.4 Partial Release and Substitution of Leased Property. So long as no Event of Lease Default or Event of Nonappropriation shall have occurred and be continuing, the Trustee shall release any portion of the Leased Property, and shall execute all documents necessary or appropriate to reconvey or release such portion of the Leased Property to the Town, free of all restrictions and encumbrances imposed or created by the Site Lease, this Lease or the Indenture, upon receipt by the Trustee [and the 2010 Insurer] of the following: (a) a written request of the Town Representative for such release, describing the portion of the Leased at Property to be released; [(b) prior written consent of the 2010 Insurer or, in the event the 2010 Insurance Policy is not in effect, or the 2010 Insurer has repudiated its obligations thereunder or the 2010 Insurer is not honoring its payment obligations thereunder], a certificate of the Town Representative certifying (i) the fair market value of the portion of the Leased Property to be released and of any real property to be substituted for the portion of the Leased Property to be released; (ii) the disposition to be made of the portion of the Leased Property to be released and the consideration, if any, to be received therefor; (iii) that the disposition of the portion of the Leased Property to be released and the substitution therefor of the real property to be substituted for the portion of the Leased Property to be released (if any) will not materially adversely affect the ability of the Town to operate the Leased Property or to fulfill its obligations under this Lease; (iv) that any real property to be substituted for the portion of the Leased Property to be released is necessary or useful to the operation of the Leased Property; and (v) that the fair market value of any real property to be substituted for the portion of the Leased Property to be released, together with cash to be paid by the Town to the Trustee, if any, is at least equal to the fair market value of the portion of the Leased Property to be released; (c) appraisals of the fair market value of the portion of the Leased Property to be released and any real property to be substituted for the portion of the Leased Property to be released, respectively, by a member of the American Institute of Real Estate Appraisers (MAI); and (d) supplements and amendments to the Site Lease, this Lease and the Indenture and any other documents necessary to subject any real property to be substituted for the portion of the Leased Property to be released to the lien of the Indenture. [Except as provided in the following paragraph, so long as the 2010 Insurance Policy is in effect and the 2010 Insurer is honoring its payment obligations thereunder and has not repudiated its obligations under the 2010 Insurance Policy, all documentation necessary to effect the substitution of Leased Property shall be subject to the 2010 Insurer's prior written consent.] The Town agrees that any cash paid to the Trustee pursuant to the provisions of this Section 11.4 shall be deposited into the Base Rentals Fund. Section 10.5 Tax Covenants. The Town acknowledges that the moneys in all funds and accounts expected to be created under the Indenture are to be invested or deposited by the Trustee, at the written direction of the Town. The Town covenants for the benefit of the Owners of the 2010 Certificates that it will not take any action or omit to take any action with respect to the 2010 Certificates, the proceeds thereof, any other funds of the Town or any facilities financed or refinanced with the proceeds of the 2010 Certificates (except for the possible exercise of the Town's right to terminate this Lease as provided herein) if such action or omission (i) would cause the interest on the 2010 Certificates to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Tax Code, or (ii) would cause interest on the 2010 Certificates to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code, except to the extent such interest is required to be included in adjusted current earnings adjustment applicable to corporations under Section 56 of the Tax Code in calculating corporate alternative minimum taxable income, or (iii) would cause interest on the 2010 Certificates to lose its exclusion from Colorado taxable income or to lose its exclusion from Colorado alternative minimum taxable income under present Colorado law. Subject to the Town's right to terminate this Lease as provided herein, the foregoing covenant shall remain in full force and effect, notwithstanding the payment in full or defeasance of the 2010 Certificates, until the date on 30 which all obligations of the Town in fulfilling the above covenant under the Tax Code and Colorado law have been met. In addition, the Town covenants that its direction of investments pursuant to Article 5 of the Indenture shall be in compliance with the procedures established by the Tax Certificate to the extent required to comply with its covenants contained in the foregoing provisions of this Section. The Town hereby agrees that, to the extent necessary, it will, during the Lease Term, pay to the Trustee such sums as are required for the Trustee to pay the amounts due and owing to the United States Treasury as rebate payments. Any such payment shall be accompanied by directions to the Trustee to pay such amounts to the United States Treasury. Any payment of Town moneys pursuant to the foregoing sentence shall be Additional Rentals for all purposes of this Lease. The Town is to execute the Tax Certificate in connection with the execution and delivery of this Lease, which Tax Certificate shall provide further details in respect of the Town's tax covenants herein. For the purpose of Section 265(b)(3)(B) of the Code, the Town hereby designates the 2010 Certificates as qualified tax- exempt obligations. Section 10.6 Undertaking to Provide Ongoing Disclosure. The Town covenants for the benefit of the Owners of the Certificates to comply with the terms of the Continuing Disclosure Certificate, provided that a failure of the Town to do so shall not constitute an Event of Lease Default. The Trustee shall have no power or duty to enforce this Section. Unless otherwise required by law, no Certificate owner shall be entitled to damages for the Town's non- compliance with its obligations under this Section; however, the Certificate Owners may enforce specific performance of the obligations contained in this Section by any judicial proceedings available. Section 10.7 Covenant to Reimburse Legal Expenses. To the extent permitted by law, the Town shall defend and hold harmless the Trustee against claims arising from the alleged negligent acts or omissions of the Town's public employees, which occurred or are alleged to have occurred during the performance of their duties and within the scope of their employment, unless such acts or omissions are, or are alleged to be, willful and wanton. Such claims shall be subject to the limitations of the Colorado Governmental Immunity Act, C.R.S. 24 -10 -101 to 24- 10 -120. The Town shall include as Additional Rentals, the reimbursement of reasonable and necessary expenses incurred by the Trustee to defend the Trustee from and against all claims, by or on behalf of any person, firm, corporation or other legal entity arising from the conduct or management of the Leased Property or from any work or thing done on the Leased Property during the Lease Term requested by the Town, or from any condition of the Leased Property caused by the Town. This duty to reimburse the Trustee's legal expenses is not an indemnification and it is expressly understood that the Town is not indemnifying the Trustee and, as previously stated, is limited to Net Proceeds and moneys, if any, in excess of such Net Proceeds, for which an Appropriation has been effected and to the extent the Town shall not appropriate Additional Rentals the Trustee shall have a first lien on assets of the Trust Estate (as defined in the Indenture) to the extent permitted by law. 31 Section 10.8 Access to the Leased Property; Rights to Inspect Books. The Town agrees that the Trustee shall have the right at all reasonable times to examine and inspect the Leased Property (subject to such regulations as may be imposed by the Town for security purposes) and all of the Town's books and records with respect thereto, but the Trustee has no duty to inspect the Leased Property books or records. The Town further agrees that the Trustee shall have such rights of access to the Leased Property as may be reasonably necessary to cause the proper maintenance of the Leased Property in the event of failure by the Town to perform its obligations under this Lease. The Indenture allows the Town to have the right at all reasonable times to examine and inspect all of the Trustee's books and records with respect to the Leased Property and all funds and accounts held under the Indenture. The Town and its representatives shall have the right to examine and inspect the books and records of the Trustee relating to the Leased Property at all reasonable times from the date of this Lease and until three years after the termination date of this Lease. Section 10.9 Town's Obligations under the Indenture.. [Subject to appropriation and to the extent permitted by law, the Town covenants and agrees to comply with any applicable covenants, provisions and obligations set forth in the Indenture relating to the 2010 Insurer, the 2010 Insurance Policy and the 2010 Reserve Policy, as if the Town were a party to the Indenture.] 32 ARTICLE 11 PURCHASE OPTION Section 11.1 Purchase Option. The Town shall have the option to purchase the Trustee's leasehold interest in the Leased Property, but only if an Event of Lease Default or an Event of Nonappropriation has not occurred and is then continuing. The Town may exercise its option on any date by complying with one of the conditions set forth in Section 11.2. The Town shall give the Trustee [and the 2010 Insurer] notice of its intention to exercise its option not less than forty-five (45) days in advance of the date of exercise and shall deposit the required moneys with the Trustee on or before the date selected to pay the Purchase Option Price. The Trustee [and the 2010 Insurer] may waive such notice or may agree to a shorter notice period. If the Town shall have given notice to the Trustee of its intention to purchase the Trustee's leasehold interest in the Leased Property or prepay Base Rentals, but shall not have deposited the amounts with the Trustee on the date specified in such notice, the Town shall continue to pay Base Rentals, which have been specifically appropriated by the Town for such purpose, as if no such notice had been given. Section 11.2 Conditions for Purchase Option. The Trustee shall transfer and release the Trustee's leasehold interests in the Leased Property to the Town in the manner provided for in Section 11.3 of this Lease; provided, however, that prior to such transfer and release, either: (a) the Town shall have paid the then applicable Purchase Option Price which shall equal the sum of the amount necessary to defease and discharge the Indenture as provided therein (i.e., provision for payment of all principal and interest portions of any and all Certificates which may have been executed and delivered pursuant to the Indenture shall have been made in accordance with the terms of the Indenture) plus any fees and expenses then owing to the Trustee [and any amounts then owing to the 2010 Insurer]; or (b) the Town shall have paid all Base Rentals set forth in Exhibit C (Base Rentals Schedule) hereto, for the entire maximum Lease Term, and all then current Additional Rentals required to be paid hereunder. At the Town's option, amounts then on deposit in any fund held under the Indenture (except the Rebate Fund or the Escrow Account and excluding any other defeasance escrow funds) may be credited toward the Purchase Option Price. Section 11.3 Manner of Conveyance. At the closing of the purchase or other conveyance of all of the Trustee's leasehold interest in the Leased Property pursuant to Section 11.2 of this Lease, the Trustee shall release and terminate the Site Lease, this Lease and the Indenture and execute and deliver to the Town any necessary documents releasing, assigning, transferring and conveying the Trustee's leasehold interest in the Leased Property, as they then exist, subject only to the following: 33 (a) Permitted Encumbrances, other than the Site Lease, this Lease and the Indenture; (b) all liens, encumbrances and restrictions created or suffered to exist by the Trustee as required or permitted by the Site Lease, this Lease or the Indenture or arising as a result of any action taken or omitted to be taken by the Trustee as required or permitted by the Site Lease, this Lease or the Indenture; (c) any lien or encumbrance created or suffered to exist by action of the Town; and (d) those liens and encumbrances (if any) to which title to the Leased Property was subject when leased to the Trustee. 34 ARTICLE 12 ASSIGNMENT AND SUBLEASING Section 12.1 Assignment by the Trustee; Replacement of the Trustee. Except as otherwise provided in this Lease and the Indenture, this Lease may not be assigned by the Trustee for any reason other than to a successor by operation of law or to a successor trustee under the Indenture or with the prior written consent of the Town which consent shall not be unreasonably withheld. The Trustee will notify the Town of any assignment to a successor by operation of law. If an Event of Lease Default or Event of Nonappropriation has occurred and is continuing, the Trustee may act as herein provided, including exercising the remedies set forth in Section 13.2, without the prior written direction of the Town. Section 12.2 Assignment and Subleasing by the Town. This Lease may not be assigned by the Town for any reason other than to a successor by operation of law. However, the Leased Property may be subleased, as a whole or in part, by the Town, without the necessity of obtaining the consent of the Trustee or any owner of the Certificates subject to each of the following conditions: (a) The Leased Property may be subleased, in whole or in part, only to an agency or department of, or a political subdivision of, the State, or to another entity or entities with Approval of Special Counsel; (b) This Lease, and the obligations of the Town hereunder, shall, at all times during the Lease Term remain obligations of the Town, and the Town shall maintain its direct relationships with the Trustee, notwithstanding any sublease; (c) The Town shall furnish or cause to be furnished to the Trustee [and the 2010 Insurer] a copy of any sublease agreement; and (d) No sublease by the Town shall cause the Leased Property to be used for any purpose which would cause the Town to violate its tax covenant in Section 10.5 hereof. 35 ARTICLE 13 EVENTS OF LEASE DEFAULT AND REMEDIES Section 13.1 Events of Lease Default Defined. Any one of the following shall be Events of Lease Default under this Lease: (a) failure by the Town to pay any Base Rentals or Additional Rentals, which have been specifically appropriated by the Town for such purpose, during the Initial Term or any Renewal Term, within five (5) Business Days of the date on which they are due; or (b) subject to the provisions of Section 6.5 hereof, failure by the Town to vacate or surrender possession of the Leased Property by March 1 of any Renewal Term in respect of which an Event of Nonappropriation has occurred; or (c) failure by the Town to observe and perform any covenant, condition or agreement on its part to be observed or performed hereunder, other than as referred to in (a) or (b), for a period of 30 days after written notice, specifying such failure and requesting that it be remedied shall be received by the Town from the Trustee, unless the Trustee [(with the prior written consent of the 2010 Insurer)] shall agree in writing to an extension of such time prior to its expiration; provided that if the failure stated in the notice cannot be corrected within the applicable period, the Trustee shall not withhold its consent to an extension of such time if, in the Trustee's reasonable judgment, corrective action can be instituted by the Town within the applicable period and diligently pursued until the default is corrected; or (d) failure by the Town to comply with the terms of the Site Lease. The foregoing provisions of this Section 13.1 are subject to the following limitations: (i) the Town shall be obligated to pay the Base Rentals and Additional Rentals, which have been specifically appropriated by the Town for such purpose, only during the then current Lease Term, except as otherwise expressly provided in this Lease; and (ii) if, by reason of Force Majeure, the Town or the Trustee shall be unable in whole or in part to carry out any agreement on their respective parts herein contained other than the Town's agreement to pay the Base Rentals and Additional Rentals due hereunder, the Town or the Trustee shall not be deemed in default during the continuance of such inability. The Town and the Trustee each agree, however, to remedy, as promptly as legally and reasonably possible, the cause or causes preventing the Town or the Trustee from carrying out their respective agreements; provided that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Town. Section 13.2 Remedies on Default. 36 Section 13.3 Limitations on Remedies. The remedies in connection with an Event of Lease Default shall be limited as set forth in this section. A judgment requiring a payment of money may be entered against the Town by reason of an Event of Lease Default only as to the Town's liabilities described in paragraph (c) of Section 13.2 hereof. A judgment requiring a payment of money may be entered against the Town by reason of an Event of Nonappropriation only to the extent that the Town falls to vacate and surrender possession of the Leased Property as required by Section 6.4 of this Lease, and only as to the liabilities described in paragraph (c)(i) of Section 13.2 hereof. The remedy described in paragraph (c)(ii) of Section 13.2 of this Lease is not available for an Event of Lease Default consisting of failure by the Town to vacate and surrender possession of the Leased Property by March 1 following an Event of Nonappropriation. Section 13.4 No Remedy Exclusive. Subject to Section 13.3 hereof, no remedy herein conferred upon or reserved to the Trustee, is intended to be exclusive, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved in this Article 13, it shall not be necessary to give any notice, other than such notice as may be required in this Article 13. Section 13.5 Waivers. The Trustee may waive any Event of Lease Default under this Lease and its consequences. In the event that any agreement contained herein should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. Payment of Base Rentals or Additional Rentals by the Town shall not constitute a waiver of any breach or default by the Trustee hereunder. Section 13.6 Agreement to Pay Attorneys' Fees and Expenses. In the event that either party hereto shall default under any of the provisions hereof and the nondefaulting party shall employ attorneys or incur other expenses for the collection of Base Rentals or Additional Rentals, or the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it shall on demand therefor pay to the nondefaulting party, to the extent permitted by law, the reasonable fees of such attorneys and such other reasonable expenses so incurred by the nondefaulting party. Notwithstanding the foregoing, any such fees and expenses owed by the Town hereunder shall constitute Additional Rentals for all purposes of this Lease and shall be subject to Appropriation. Section 13.7 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws. To the extent permitted by law, in the case of an Event of Nonappropriation or an Event of Lease Default neither the Town nor any one claiming through or under either of them shall or will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption laws now or hereafter in force in order to prevent or hinder the enforcement of the Indenture; and the Town, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may lawfully do so, the benefit of all such laws. Notwithstanding the foregoing, it is expressly understood that the Town cannot 37 and does not hereby waive its right to set up, claim or seek to take advantage of its police powers or its Colorado constitutional or statutory right of eminent domain. 38 ARTICLE 14 MISCELLANEOUS Section 14.1 Sovereign Powers of Town. Nothing in this Lease shall be construed as diminishing, delegating, or otherwise restricting any of the sovereign powers or immunities of the Town. Nothing in this Lease shall be construed to require the Town to occupy and operate the Leased Property other than as lessee, or to require the Town to exercise its right to purchase the Leased Property as provided in Article 11 hereof. Section 14.2 Notices. All notices, certificates or other communications to be given hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by certified or registered mail, postage prepaid, addressed as follows: if to the Town, if to the Trustee, Town of Avon, Colorado P.O. Box 975 Avon, Colorado 81620 Attention: Finance Director UMB Bank, n.a. 1670 Broadway Denver, Colorado 80202 Attention: Corporate and Escrow Trust Services The Town and the Trustee may, by written notice, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. [Any notices that are required to be sent to the 2010 Insurer shall be addressed as set forth in Section 10.01 of the Indenture.] Section 14.3 Third Party Beneficiaries. [It is expressly understood and agreed that the 2010 Insurer and the Owners of the outstanding Certificates are third party beneficiaries to this Lease and enforcement of the terms and conditions of this Lease, and all rights of action relating to such enforcement, shall be strictly reserved to the Town, as lessee and the Trustee, as lessor, and their respective successors and assigns, and to the 2010 Insurer and the Owners of the Certificates. Except as hereinafter provided, nothing contained in this Lease shall give or allow any such claim or right of action by any other or third person on this Lease. It is the express intention of the Town and the Trustee that any person other than the Town, the Trustee, the 2010 Insurer or the Owners of the Certificates receiving services or benefits under this Lease shall be deemed to be an incidental beneficiary only.] Section 14.4 Limitations on Rights of 2010 Insurer. [Notwithstanding any provisions to the contrary in the Site Lease, this Lease or the Indenture, the rights granted to the 2010 Insurer under such documents shall be of full force and effect only to the extent that the 39 2010 Insurance Policy is in effect, the 2010 Insurer has not repudiated its obligations under the 2010 Insurance Policy, and the 2010 Insurer is not in default in respect of its payment obligations under the 2010 Insurance Policy.] Section 14.5 Binding Effect. This Lease shall inure to the benefit of and shall be binding upon the Trustee and the Town and their respective successors and assigns, subject, however, to the limitations contained in Article 12 of this Lease. Section 14.6 Amendments. This Lease may only be amended, changed, modified or altered as provided in the Indenture. Section 14.7 Amounts Remaining in Funds. It is agreed by the parties hereto that any amounts remaining in the Base Rentals Fund, the Reserve Fund, the Costs of Execution and Delivery Fund, or any other fund or account created under the Indenture (except the Rebate Fund, the Escrow Account or any other defeasance escrow account), upon termination of the Lease Term, and after payment in full of the Certificates (or provision for payment thereof having been made in accordance with the provisions of this Lease and the Indenture) and fees and expenses of the Trustee in accordance with this Lease and the Indenture, shall belong to and be paid to the Town by the Trustee, as an overpayment of Base Rentals. Section 14.8 Triple Net Lease. This Lease shall be deemed and construed to be a "triple net lease" and, subject to the prior Appropriation requirements hereof, the Town shall pay absolutely net during the Lease Term, the Base Rentals, the Additional Rentals and all expenses of, or other payments in respect of, the Leased Property as required to be paid by the Town under this Lease, for which a specific Appropriation has been effected by the Town for such purpose, free of any deductions, and without abatement, deduction or setoff (other than credits against Base Rentals expressly provided for in this Lease). Section 14.9 Computation of Time. In computing a period of days, the first day is excluded and the last day is included. If the last day of any period is not a Business Day, the period is extended to include the next day which is a Business Day. If a number of months is to be computed by counting the months from a particular day, the period ends on the same numerical day in the concluding month as the day of the month from which the computation is begun, unless there are not that many days in the concluding month, in which case the period ends on the last day of that month. Notwithstanding the foregoing, Base Rentals shall be recalculated in the event of any prepayment of Base Rentals as provided in Section 6.2(b) hereof. Section 14.10 Payments Due on Holidays. If the date for making any payment or the last day for performance of any act or the exercising of any right, as provided in this Lease, shall be a day other than a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Lease. Section 14.11 Severability. Except for the requirement of the Town to pay Base Rentals for which a specific Appropriation has been effected by the Town for such purpose and the requirement of the Trustee to provide quiet enjoyment of the Leased Property and to convey the Trustee's leasehold interest in the Leased Property to the Town under the conditions set forth 40 in Article 11 of this Lease (which, if held invalid or unenforceable by any court of competent jurisdiction, may have the effect of invalidating or rendering unenforceable the other provisions of this Lease), in the event that any other provision of this Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 14.12 Execution in Counterparts. This Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 14.13 Applicable Law. This Lease shall be governed by and construed in accordance with the law of the State of Colorado. Section 14.14 The Trustee Is Independent of the Town. The Trustee shall perform its duties hereunder as an independent contractor and not as an employee of the Town. Neither the Trustee nor any agent or employee of the Trustee shall be or shall be deemed to be an agent or employee of the Town. The Trustee acknowledges that the Trustee and its employees are not entitled to unemployment insurance benefits of the Town unless the Trustee or a third party otherwise provides such coverage and that the Town does not pay for or otherwise provide such coverage. The Trustee shall have no authorization, express or implied, to bind the Town to any agreements, liability or understanding except as expressly set forth herein. The Trustee shall provide and keep in force workers' compensation (and provide proof of such insurance when requested by the Town) and unemployment compensation insurance in the amounts required by law and shall be solely responsible for the acts of the Trustee, its employees and agents. Section 14.15 Governmental Immunity. Notwithstanding any other provisions of this Lease to the contrary, no term or condition of this Lease shall be construed or interpreted as a waiver, express or implied, of any of the immunities, rights, benefits, protections or other provisions of the Colorado Governmental Immunity Act, Section 24 -10 -101, et. seq., C.R.S., as now or hereafter amended. Section 14.16 Recitals. The Recitals set forth in this Lease are hereby incorporated by this reference and made a part of this Lease. Section 14.17 Captions. The captions or headings herein are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Lease. Section 14.18 Trustee's Disclaimer. It is expressly understood and agreed that (a) the Lease is executed by UMB Bank, n.a. solely in its capacity as Trustee under the Indenture, and (b) nothing herein shall be construed as creating any liability on UMB Bank, n.a. other than in its capacity as Trustee under the Indenture. All financial obligations of the Trustee under this Lease, except those resulting from its willful misconduct or negligence, are limited to the Trust Estate. 41 IN WITNESS WHEREOF, the parties have executed this Lease Purchase Agreement as of the day and year first above written. TOWN OF AVON, COLORADO, as Lessee By: Mayor Attest: By: Town Clerk [TOWN SEAL] UMB BANK, N.A., solely in its capacity of Trustee under the Indenture, as Lessor Lo 42 Vice President STATE OF COLORADO ) ss. TOWN OF AVON ) COUNTY OF EAGLE ) The foregoing instrument was acknowledged before me this _ day of November 2010, by and , as Mayor and Town Clerk, respectively, of the Town of Avon, Colorado. WITNESS my hand and official seal. (SEAL) My commission expires: 43 Notary Public STATE OF COLORADO ) ) ss. TOWN AND COUNTY OF DENVER The foregoing instrument was acknowledged before me this day of November 2010, by , as Assistant Vice President of UMB Bank, n.a., as Trustee. WITNESS my hand and official seal. (SEAL) My commission expires: 44 Notary Public EXHIBIT A DESCRIPTION OF LEASED PROPERTY The Leased Property consists of the Site and the premises, buildings and improvements located thereon, as set forth below and as amended from time to time. Legal Description: Lot 1B, a resubdivision of Lot 1, Swift Gulch Addition, according to the Plat recorded July 22, 1998 at Reception No. 663529, County of Eagle, State of Colorado. Buildings and Improvements: [Insert description of public works maintenance facility located on the property legally described above.] A -1 EXHIBIT B PERMITTED ENCUMBRANCES "Permitted Encumbrances" as defined in Section 1.2 of this Lease and the following: I.1il EXHIBIT C BASE RENTALS SCHEDULE Base Rentals Base Rentals Principal Interest Component Component 2010 2010 Total Base Date Certificates Certificates Rentals C -1 Base Rental payments are due on and of each year during the Lease Term. The Base Rentals have been calculated on the basis of a 360 -day year of twelve 30 -day months and any recalculation of Base Rentals under Section 6.2(b) hereof shall be done on the same basis. If Base Rentals are stated to be due on any date that is not a Business Day, such Base Rentals shall be due on the next day that is a Business Day without the accrual of interest on Base Rentals between such dates. Statement Regarding the Leased Property The duration of the Lease, throughout the maximum Lease Term, does not exceed the weighted average useful life of the Leased Property and, to the extent that the Leased Property constitutes items of personal property, such items are considered paid from the first Base Rentals described above. 10M EXHIBIT D FORM OF NOTICE OF LEASE RENEWAL To: UMB Bank, n.a., as Trustee Attention: Corporate Trust Services The undersigned is the Town Representative of the Town of Avon, Colorado (the "Town "). The Town is the lessee under that certain Lease Purchase Agreement, dated as of November 1, 2010 (the "Lease "), between the Town and UMB Bank, n.a., solely in its capacity of Trustee under the Indenture, as the lessor thereunder. I am familiar with the facts herein certified and am authorized and qualified to certify the same. The undersigned hereby states and certifies: or (a) the Town has effected or intends to effect on a timely basis an Appropriation for the ensuing Fiscal Year which includes (1) sufficient amounts authorized and directed to be used to pay all the Base Rentals and (2) sufficient amounts to pay such Additional Rentals as are estimated to become due, all as further provided in Sections 6.2, 6.3 and 6.4 of the Lease, whereupon, the Lease shall be renewed for the ensuing Fiscal Year; Year. Initial (b) the Town has determined not to renew the Lease for the ensuing Fiscal Initial TOWN OF AVON, COLORADO By: Town Representative D -1 EXHIBIT C ESCROW AGREEMENT Dated as of November _, 2010 made by and between the Town of Avon, Colorado (the "Town ") and UMB Bank, n.a., a national banking association, as escrow agent (the "Escrow Agent "), a bank having and exercising full and complete trust powers, duly organized and existing under the laws of the United States, being a member of the Federal Deposit Insurance Corporation and the Federal Reserve System. (1) WHEREAS, there have heretofore been executed and delivered pursuant to the terms and provisions of a Mortgage and Indenture of Trust, dated as of July 1, 1998 (the "1998 Indenture "), between the Town of Avon Finance Authority (the "Authority ") and The Bank of Cherry Creek, N.A., certain Certificates of Participation, dated as of July 1, 1998 (the "1998 Certificates "), in the original aggregate principal amount of $7,085,000; and (2) WHEREAS, the 1998 Certificates are currently outstanding in the aggregate principal amount of $3,990,000, mature on December 1 in the following years in the following aggregate principal amounts and bear interest at the following per annum interest rates: Years Principal Amounts Interest Rates 2010 $ 360,000 4.80% 2011 380,000 4.90 2018 3,250,000 5.00 (3) WHEREAS, the 1998 Certificates are subject to redemption prior to maturity, in whole or in part on December 1, 2009, and on any date thereafter, at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon to the date fixed for redemption; and (4) WHEREAS, the Authority is the owner of certain property (the "Leased Property ") and the Town has an option to purchase the Leased Property pursuant to the provisions of the Lease Purchase and Sublease Agreement, dated as of July 1, 1998, between the Authority, as lessor, and the Town, as lessee, by paying the Purchase Option Price, which is equal to the amount necessary to defease the 1998 Indenture; and (5) WHEREAS, to exercise its Purchase Option, the Town has decided (a) to defease on the date hereof all outstanding 1998 Certificates (the "Refunded Certificates ") with the proceeds from the Escrow Account described in Section 1 hereof (the "Escrow Account "), (2) pay the principal of and accrued interest on the Refunded Certificates maturing on December 1, 2010 on December 1, 2010 with a portion of the proceeds in the Escrow Account, and (c) refund the Refunded Certificates maturing on December 1, 2011 and December 1, 2018 in whole on December _ , 2010 (the "Redemption Date "), at a price equal to the principal amount thereof plus accrued interest thereon to December _, 20_, with a portion of the proceeds in the Escrow Account; and (6) WHEREAS, Piper Jaffray and Co. (the "Underwriter ") has agreed to purchase the Town's Tax - Exempt Certificates of Participation, Series 2010A in the aggregate principal amount of $ (the "2010A Certificates "), and the Town's Tax- Exempt Certificates of Participation, Series 2010B in the aggregate principal amount of $ (the "2010B Certificates" and together with the 2010A Certificates, the "2010 Certificates "), to be issued in part for the purpose of refinancing the Refunded Certificates by (a) paying the interest on all of the Refunded Certificates, as such interest becomes due on and after the date of delivery of the 2010 Certificates, (b) paying the principal of the Refunded Certificates maturing on December 1, 2010 on December 1, 2010, and (c) refunding the principal of the Refunded Certificates maturing on December 1, 2011 and December 1, 2018 on the Redemption Date, all as set forth in the certified public accountant's report attached as Exhibit A to this Escrow Agreement (the "Refunded Certificate Requirements "), and to pay incidental costs thereof; and (7) WHEREAS, the 2010 Certificates are being executed and delivered pursuant to the provisions of an Indenture of Trust, dated as of November 15, 2010 (the "Indenture "), executed by UMB Bank, n.a., as trustee (the "Trustee "); and (8) WHEREAS, the 2010 Certificates were sold subject to approving opinions of the Town's special counsel, Sherman & Howard L.L.C., Denver, Colorado; and (9) WHEREAS, the Town, by an ordinance duly adopted by the Town Council of the Town on September 28, 2010 (the "Ordinance ") and the Sale Certificate executed in accordance therewith (the "Sale Certificate "), among other provisions: A. Provided for the deposit in the Escrow Account of a portion of the net proceeds of the 2010 Certificates in an aggregate amount fully sufficient, together with the known minimum yield from the investment of such moneys as herein provided, to pay the Refunded Certificate Requirements, as set forth therein and herein; B. Provided for the purchase of federal securities with such moneys credited to the Escrow Account; and C. Authorized the completion and execution of this Escrow Agreement. (10) WHEREAS, copies of the Ordinance, the Sale Certificate and the Indenture have been delivered to the Escrow Agent and the provisions therein set forth are herein incorporated by reference as if set forth herein verbatim in full; and (11) WHEREAS, the federal securities described in Exhibit A to this Escrow Agreement have appropriate maturities and yields to provide funds sufficient for, together with the initial cash, if any, the payment of the Refunded Certificate Requirements; and (12) WHEREAS, a schedule of the payments and disbursements in the certified public accountant's report attached as Exhibit A to this Escrow Agreement demonstrate the sufficiency of the deposit to the Escrow Account for such purpose; and (13) WHEREAS, the Escrow Agent is empowered to undertake the obligations and commitments on its part herein set forth; and -2- (14) WHEREAS, the undersigned officer of the Escrow Agent is duly authorized to execute and deliver this Escrow Agreement in the Escrow Agent's name and on its behalf; and (15) WHEREAS, the Town is empowered to undertake the obligations and commitments on its part herein set forth; and (16) WHEREAS, the undersigned officers of the Town are duly authorized to execute and deliver this Escrow Agreement in the Town's name and on its behalf. NOW, THEREFORE, THIS ESCROW AGREEMENT WITNESSETH: That in consideration of the premises and the mutual agreements herein contained, and in order to secure the payment of the Refunded Certificate Requirements as the same become due, the parties hereto mutually undertake, promise and agree for themselves and their respective representatives, successors and assigns, as follows: Section 1. Creation of Escrow. A. Simultaneously with the delivery of the 2010 Certificates, and subject to their execution and delivery, there shall be purchased, with $ derived from the proceeds of the 2010A Certificates, $ derived from the proceeds of the 2010B Certificates, $ transferred from the Certificate Fund created under the 1998 Indenture and $ transferred from the Reserve Fund created under the 1998 Indenture, the Federal Securities (as defined in the 1998 Indenture) in the amount of $ as shown in Exhibit A to this Escrow Agreement (the "Initial Federal Securities ") and an initial cash deposit of (the "initial deposit ") shall be credited to and accounted for in a separate trust account designated as the "Town of Avon, Colorado, 1998 Certificates of Participation, Escrow Account" (the "Escrow Account "). Receipt of $ by the Escrow Agent to be applied as provided herein is hereby acknowledged. B. To the extent such action is not inconsistent herewith or with the 1998 Indenture, other Federal Securities may be substituted for the Initial Federal Securities if such Initial Federal Securities are unavailable for purchase at the time of execution and delivery of the 2010 Certificates or other Federal Securities may be substituted for any Federal Securities held in the Escrow Account if such substitution is required or permitted by Section 148 of the Internal Revenue Code of 1986, as amended (the "Tax Code "), and the applicable regulations thereunder, subject in any case to sufficiency demonstrations in a certified public accountant's report, and subject to a favorable opinion of the Town's special counsel as to the legality of any such substitution, and the continued exemption of interest on the 2010 Certificates from federal income taxation (except certain alternative minimum taxes described in the 2010 Certificate counsel's opinion), and in any event in such a manner so as not to increase the price paid for the initial acquisition of Federal Securities for the Escrow Account. Copies of any such accountant's report and any such opinion shall be sent to MBIA Insurance Corporaiton (now known as National Public Finance Guarantee Corporation) (the "1998 Insurer "), as the insurer of the 1998 Certificates. The certified public accountant's report must indicate that the receipts from the substitute securities are sufficient without any need for reinvestment to fully pay the Refunded -3- Certificate Requirements. In lieu of, or in addition to, substituting other Federal Securities pursuant to the preceding sentence, moneys in an amount equal to the principal of and interest on all or any portion of such Initial Federal Securities may be credited to the Escrow Account subject to the provisions of Section 5 hereof. Any such cash shall be deemed to be part of the initial deposit. Any Federal Securities temporarily substituted may be withdrawn from the Escrow Account when the Initial Federal Securities are purchased and credited to the Escrow Account. Similarly, any temporary advancement of moneys to the Escrow Account to pay designated Refunded Certificate Requirements, because of a failure to receive promptly the principal of and interest on any Federal Securities at their respective fixed maturity dates, or otherwise, may be repaid to the person advancing such moneys upon the receipt by the Escrow Agent of such principal and interest payments on such Federal Securities. C. The initial deposit, the proceeds of the Initial Federal Securities (and of any other Federal Securities acquired as an investment or reinvestment of moneys accounted for in the Escrow Account), and any such Federal Securities themselves (other than Federal Securities, including the Initial Federal Securities, held as book - entries) shall be deposited with the Escrow Agent and credited to and accounted for in the Escrow Account. The securities and moneys accounted for therein shall be redeemed and paid out and otherwise administered by the Escrow Agent for the benefit of the Town and the owners of the Refunded Certificates as provided in this Escrow Agreement and the 1998 Indenture. Section 2. Purpose of Escrow. A. The Escrow Agent shall hold the initial deposit, all Federal Securities accounted for in the Escrow Account (other than any Federal Securities, including the Initial Federal Securities, held as book - entries), and all moneys received from time to time as interest on and principal of such Federal Securities (including those held as book - entries), in trust to secure and for the payment of the Refunded Certificate Requirements, as the same become due. B. Except as provided in paragraph B of Section 1 and in Section 8 hereof, the Escrow Agent shall collect the principal of and interest on such Federal Securities promptly as such principal and interest become due and shall apply all money so collected to the payment of the Refunded Certificate Requirements as aforesaid. Section 3. Accounting for Escrow. A. The moneys and the Federal Securities accounted for in the Escrow Account shall not be subject to checks drawn by the Town or otherwise subject to the order of the Town except as otherwise provided in paragraph B of Section 1 and in Section 8 hereof. B. UMB Bank, n.a., as the current paying agent for the Refunded Certificates and as the Escrow Agent hereunder, shall transfer directly to the Depository Trust Company ( "DTC "), as the registered owner of the Refunded Certificates, sufficient moneys to pay the principal of and interest on the Refunded Certificates due on December 1, 2010, and the redemption price of the remaining Refunded Certificates on December _, 2010. The Escrow Agent hereby agrees to make such payment of the Refunded Certificate Requirements to DTC. -4- The Escrow Agent shall never be required to advance its own funds for payment in connection with the Refunded Certificate Requirements. C. Except as otherwise provided in paragraph B of Section 1 hereof, there shall be no sale of any Federal Securities held hereunder, and no Federal Securities held hereunder and callable for prior redemption at the Town's option shall be called at any time for prior redemption, except if necessary to avoid a default in the payment of the Refunded Certificate Requirements. Section 4. Maturities of Federal Securities. A. Federal Securities shall not be callable by the issuer thereof and shall be purchased in such manner: (1) So that such Federal Securities may be redeemed in due season at their respective maturities to meet the Refunded Certificate Requirements as the same become due; and (2) So that any sale or prior redemption of such Federal Securities shall be unnecessary. B. There shall be no substitution of any Federal Securities except as otherwise provided in paragraph B of Section 1 hereof. Section 5. Reinvestments. A. The Escrow Agent shall reinvest the cash balances listed in Exhibit A (including Exhibit A therein) for the period designated therein in state and local government series securities ( "slgs ") purchased directly from the United States Government by the Escrow Agent in the name of the Town. All of the slgs in which such reinvestments are made shall bear interest at the rate of zero percent (0 %) per annum. The Escrow Agent and Town agree to comply with Part 344 of Title 31, Code of Federal Regulations, and with such other regulations of the United States Treasury, Bureau of Public Debt, as are from time to time in effect in subscribing for and purchasing such slgs, including without limitation, requirements with respect to submitting subscriptions to a Federal Reserve Bank or Branch in advance of the date of purchase of the slgs. B. In addition to or, as the case may be, in lieu of the reinvestments required by paragraph A of this Section, the Escrow Agent, at the written direction of the Town, shall invest the initial cash, if any, and shall reinvest in Federal Securities any moneys received in payment of the principal of and interest on any Federal Securities accounted for in the Escrow Account, subject to the limitations of Sections 1, 4 and 6 hereof and the following limitations: (1) Any such Federal Securities shall not be subject to redemption prior to their respective maturities at the option of their issuer. -5- (2) Any such Federal Securities shall mature on or prior to the date when the proceeds thereof must be available for the prompt payment of the Refunded Certificate Requirements, as the same become due. (3) Under no circumstances shall any reinvestment be made under this Section if such reinvestment, alone or in combination with any other investment or reinvestment, violates the applicable provisions of Section 148 of the Tax Code, and the rules and regulations thereunder. (4) The Escrow Agent shall make no such reinvestment unless the Town first obtains and furnishes to the Escrow Agent a written opinion of the Town's Certificate counsel to the effect that such reinvestment, as described in the opinion, complies with subparagraph B(3) of this Section. Section 6. Sufficiency of Escrow. The moneys and Federal Securities accounted for in the Escrow Account shall be in an amount (or have appropriate maturities and yields to produce an amount) which at all times shall be sufficient to pay the Refunded Certificate Requirements as they become due. Section 7. Transfers for Refunded Certificate Requirements. The Escrow Agent shall make such credit arrangements and transfers as will assure, to the extent of money in the Escrow Account properly allocable to and available therefor, the timely payment of the Refunded Certificate Requirements when due. Section 8. Termination of Escrow Account. When payment or provisions for payment shall have been made so that all Refunded Certificate Requirements shall have been paid in full and discharged, the Escrow Agent shall immediately pay over to the Town the moneys, if any, then remaining in the Escrow Account and shall make forthwith a final report to the Town. Any moneys so transferred to the Town shall be used by the Town to pay a portion of the interest coming due on the Certificates on the first interest payment date of the Certificates. Section 9. Fees. A. The Escrow Agent's total fees and costs for and in carrying out the provisions of this Escrow Agreement have been fixed at $, which amount is to be paid at or prior to the time of the execution and delivery of the Certificates directly to the Escrow Agent as payment in full of all charges of the Escrow Agent pertaining to this Escrow Agreement for services performed hereunder. B. Such payment for services rendered and to be rendered by the Escrow Agent shall not be for deposit in the Escrow Account, and the fees of and the costs incurred by the Escrow Agent shall not be deducted from such account. -6- Section 10. Status Report. A. No later than January 15, 2011, the Escrow Agent shall submit to the Town a report covering all money which the Escrow Agent shall have received and all payments which it shall have made or caused to be made hereunder. B. The report shall indicate for which period and in which trust bank any Federal Securities (other than Federal Securities held as book - entries) and any uninvested moneys were transferred for safekeeping or any Federal Securities (other than Federal Securities held as book - entries) pledged to secure the repayment of any uninvested moneys were placed in pledge, as permitted by Section 12. Section 11. Character of Deposit. A. It is recognized that title to the Federal Securities and money accounted for in the Escrow Account from time to time shall remain vested in the Town or in the Escrow Agent on behalf of the Town but subject always to the prior charge and lien thereon of this Escrow Agreement and the use thereof required to be made by the provisions of this Escrow Agreement. B. The Escrow Agent shall hold all such Federal Securities (except as they may be held as book - entries) and money in the Escrow Account as a special trust fund and account separate and wholly segregated from all other securities and funds of the Escrow Agent or deposited therein, and shall never commingle such securities or money with other securities or money. Section 12. Securing Deposit. A. The Escrow Agent may cause the Federal Securities accounted for in the Escrow Account to be registered in the name of the Escrow Agent on behalf of the Town for payment, if they are registrable for payment, and in such event shall obtain the necessary endorsements from the duly authorized officials of the Town as they become due. B. The Town, in connection with any Federal Securities accounted for in the Escrow Account and held as book - entries, shall cooperate with the Escrow Agent and shall forthwith make arrangements with an appropriate representative of the issuer of such Federal Securities so that the interest on and the principal of the Federal Securities shall be promptly transmitted, as the same become due from time to time, to the Escrow Agent. C. All uninvested money held at any time in the Escrow Account shall be continuously secured by the deposit of Federal Securities in a principal amount and value always not less than the total amount of uninvested money in the Escrow Account: (1) In any branch of the Federal Reserve Bank; or (2) In any commercial bank which: (a) Is a state or national bank or trust company, -7- (b) Is a member of the Federal Deposit Insurance Authority, (c) Is a member of the Federal Reserve System, (d) Has a capital and surplus of $10,000,000.00 or more, (e) Is exercising full and complete trust powers, and (f) May be located in the State or without the State (a "trust bank "); or (3) In any branch of the Federal Reserve Bank and in one or more trust banks (or any combination thereof). D. Such Federal Securities so held as a pledge shall be used whenever necessary to enable the payment of the Refunded Certificate Requirements, to the extent other moneys are not transferred or caused to be transferred for such purpose by the Escrow Agent. E. Any Federal Securities (except as they may be held as book - entries) and any uninvested moneys accounted for in the Escrow Account may from time to time be placed by the Escrow Agent for safekeeping wholly or in part in any such trust bank, only if prior to any such transfer the Town consents thereto in writing. F. Each such trust bank holding any Federal Securities accounted for in the Escrow Account or any uninvested moneys accounted for therein shall be furnished by the Escrow Agent with a copy of this Escrow Agreement prior to such deposit. G. By the acceptance of such Federal Securities or such uninvested moneys each such trust bank shall be bound in the same manner as the Escrow Agent, as herein provided. H. The Escrow Agent, however, shall remain solely responsible to the Town: hereof, (1) For any investment of moneys pursuant to Section 1 hereof, (2) For transfers of moneys pursuant to Section 7 hereof, (3) For the termination of the Escrow Account pursuant to Section 8 (4) For the status report pursuant to Section 10 hereof, and I. Notwithstanding the liabilities of the Escrow Agent stated in paragraph H of this Section, the Escrow Agent may cause any one, all, or any combination of the duties stated in paragraph H to be performed on its behalf by any trust bank. J. If at any time the Escrow Agent fails to account for any moneys or Federal Securities held by it or by any such trust bank in the Escrow Account, such moneys and securities shall be and remain the property of the Town. K. No money paid into and accounted for in the Escrow Account shall ever be considered as a banking deposit and neither the Escrow Agent nor any such trust bank shall have any right or title with respect thereto. Section 13. Refunding and Defeasance Notice. In order to exercise its option to purchase the Leased Property, the Town has determined to (a) defease the Refunded Certificates, (b) pay the principal of and interest due on the Refunded Certificates due on December 1, 2010 with a portion of the proceeds in the Escrow Account, and (c) pay the redemption price of the Refunded Certificates maturing on December 1, 2011 and December 1, 2018 on December _, 2010, at a redemption price of 100% of the principal amount thereof plus accrued interest thereon to the redemption date, with a portion of the proceeds in the Escrow Account. In connection with the refunding and defeasance of the Refunded Certificates, the Escrow Agent hereby agrees and accepts responsibility (1) for delivering a notice of defeasance with respect to the Refunded Certificates on the date hereof and (2) for delivering a notice of redemption on the date hereof with respect to the Refunded Certificates maturing on December, 1, 2011 and December 1, 2018 in the manner required by the 1998 Indenture so that the Refunded Certificates maturing on December 1, 2011 and December 1, 2018 may be redeemed on December _, 20_. A form of such notice of defeasance and redemption is set forth as Exhibit B hereto. Section 14. Underwriter Responsibility. The Underwriter and owners from time to time of the 2010 Certificates shall in no manner be responsible for the application or disposition of the proceeds thereof or any moneys or Federal Securities accounted for in the Escrow Account. This clause shall not relieve the Escrow Agent (if it is an owner of the 2010 Certificates), in its capacity as Escrow Agent, from its duties under this Escrow Agreement. Section 15. Amendment. A. The 2010 Certificates shall be executed and delivered in reliance upon this Escrow Agreement and except as herein provided this Escrow Agreement shall be irrevocable and not subject to amendment after any of the 2010 Certificates shall have been executed and delivered. B. The provisions of this Escrow Agreement may be amended, waived or modified upon approval of the owners of all of the then outstanding Refunded Certificates and the approval of the 1998 Insurer. The provisions of this Escrow Agreement also may be amended, waived or modified without the approval of such owners, but with the approval of the 1998 Insurer, for one or more of the following purposes: (1) to cure any ambiguity, or to cure, correct or supplement any formal defect or omission or inconsistent provision contained in this Escrow Agreement; (2) to pledge additional revenues, properties or collateral as security for the Refunded Certificates; or Account. (3) to deposit additional moneys or Federal Securities into the Escrow -9- Notwithstanding any other provision hereof, no amendment, modification or waiver shall be effective if it is materially prejudicial to the owners of the Refunded Certificates or affects the exclusion of the interest on the Refunded Certificates or the 2010 Certificates from gross income for federal income tax purposes, unless such amendment, waiver or modification is approved by the owners of all of the then outstanding Refunded Certificates and the 2010 Certificates affected thereby. Section 16. Exculpatory Provisions. A. The duties and responsibilities of the Escrow Agent are limited to those expressly and specifically stated in this Escrow Agreement. B. The Escrow Agent shall not be liable or responsible for any loss resulting from any investment or reinvestment made pursuant to this Escrow Agreement and made in compliance with the provisions hereof. C. The Escrow Agent shall not be liable for any act done or step taken or omitted by it or for any mistake of fact or law or for anything which it may do or refrain from doing, except for its negligence or its default in the performance of any obligations imposed upon it hereunder. D. The Escrow Agent shall neither be under any obligation to inquire into or be in any way responsible for the performance or nonperformance by the Town of any of its obligations contained in this Escrow Agreement, in the Ordinance, in the 2010 Certificates, in the Refunded Certificates, or in any proceedings taken in connection therewith (other than its responsibilities as trustee under such instruments. E. Nothing in this Escrow Agreement creates any obligation or liabilities on the part of the Escrow Agent to anyone other than the Town and the owners of the Refunded Certificates. Section 17. Time of Essence. Time is of the essence in the performance of the obligations from time to time imposed upon the Escrow Agent by this Escrow Agreement. Section 18. Successors. A. Whenever in this Escrow Agreement the Town or the Escrow Agent is named or is referred to, such provision is deemed to include any successor of the Town or the Escrow Agent, respectively, immediate or intermediate, whether so expressed or not. B. All of the stipulations, obligations and agreements by or on behalf of and other provisions for the benefit of the Town or the Escrow Agent contained in this Escrow Agreement: (1) Shall bind and inure to the benefit of any such successor, and (2) Shall bind and inure to the benefit of any officer, board, authority, agent or instrumentality to whom or to which there shall be transferred by or in -10- accordance with law any relevant right, power or duty of the Town or the Escrow Agent, respectively, or of its successor. Section 19. Severability. If any section, paragraph, clause or provision of this Escrow Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Escrow Agreement. Section 20. Notices. Any notice to be given hereunder shall be delivered personally or mailed postage prepaid, return receipt requested, to the following addresses: If to the Town: Town of Avon, Colorado P.O. Box 975 Avon, Colorado 81620 Attention: Finance Manager If to the Escrow Agent: UMB Bank, n.a. 1670 Broadway Denver, Colorado 80202 Attention: Corporate and Escrow Trust Services or to such other address as either party may, by written notice to the other party, hereafter specify. Any notice shall be deemed to be given upon mailing. [The remainder of this page intentionally left blank.] - 11 - IN WITNESS WHEREOF, the TOWN OF AVON, COLORADO has caused this Escrow Agreement to be executed in its name and the seal of the Town affixed and attested by duly authorized officers thereof; and UMB BANK, N.A. has caused this Escrow Agreement to be executed in its corporate name by a duly authorized officer thereof, all as of the day and year first above written. (SEAL) ATTESTED: Town Clerk TOWN OF AVON, COLORADO UMB BANK, N.A., as Escrow Agent -12- Mayor Vice President EXHIBIT A CPA REPORT A -1 EXHIBIT B NOTICE OF DEFEASANCE AND REFUNDING Certificates of Participation, Series 1998 Evidencing Assignment of a Proportionate Undivided Interest in Rights to Receive Certain Revenues Pursuant to the Lease Purchase and Sublease Agreement between the Town of Avon Finance Authority, as lessor, and the Town of Avon, Colorado, as lessee CUSIP NOS. NOTICE IS HEREBY GIVEN that the Town of Avon, Colorado (the "Town ") has caused to be deposited in escrow with UMB Bank, n.a., Denver, Colorado, as successor paying agent (the "Paying Agent "), refunding Certificate proceeds and other moneys which will be invested (except for a small initial cash balance remaining uninvested) in certificates of indebtedness, notes, bonds and similar securities which are direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America to pay, refund, redeem and discharge all of the outstanding Certificates of Participation, Series 1998, captioned above (the "1998 Certificates "). The 1998 Certificates maturing on December 1, 2011 and December 1, 2018 (the "Refunded Certificates ") have been called for redemption and payment prior to maturity on December _, 2010 (the "Redemption Date "). The Refunded Certificates will be called for redemption on the Redemption Date at a price equal to the principal amount thereof, plus accrued interest thereon, without premium. On the Redemption Date, the principal of such Refunded Certificates and accrued interest to the Redemption Date will become due and payable at the office of UMB Bank, n.a., Denver, Colorado, as paying agent (the "Paying Agent "), and thereafter interest will cease to accrue. The office of the Paying Agent is located at 1670 Broadway, Denver, CO 80274. The Town has given notice of its intent to exercise its option to purchase or prepay Base Rentals under the Lease Purchase and Sublease Agreement referenced above and prior to the date hereof has deposited the funds related to such option by the Town with the Paying Agent. According to a report of a firm of certified public accountants, licensed to practice in Colorado, the escrow, including the known minimum yield from such investments and any temporary reinvestments and the initial cash balance remaining uninvested, will be fully sufficient at the time of the deposit, and at all times subsequent, to pay the principal of the Refunded Certificates and accrued interest thereon to their respective maturity dates or the Redemption Date, as the case may be. In compliance with the federal law, the Paying Agent is required to withhold at the current backup withholding rate a percentage from payments of principal to individuals who fail to furnish valid Taxpayer Identification Numbers. A completed Form W -9 should be presented with your certificate. WE The above - referenced CUSIP numbers were assigned to this issue by Standard & Poor's Authority and are intended solely for certificate holders' convenience. Neither the Paying Agent nor the Town shall be responsible for selection or use of the CUSIP numbers, nor is any representation made as to their correctness on the Refunded Certificates or as indicated in any redemption notice. Dated November _, 2010. II a UMB BANK, N.A., Paying Agent By:_ Title: EXHIBIT D TOWN OF AVON, COLORADO, CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate ") is executed and delivered by the Town of Avon, Colorado (the "Town "), in connection with the issuance of its Tax- Exempt Certificates of Participation, Series 2010A in the aggregate principal amount of $ (the "2010A Certificates ") and its Tax- Exempt Certificates of Participation, Series 2010B in the aggregate principal amount of $ (the "2010B Certificates" or, together with the 2010A Certificates, the "Certificates "). The Certificates are being issued pursuant to an ordinance (the "Ordinance ") adopted by the Town Council of the Town on second reading on September 28, 2010. The Town covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Town for the benefit of the holders and beneficial owners of the Certificates and in order to assist the Participating Underwriter in complying with Rule 15c2- 12(b)(5) of the Securities and Exchange Commission (the "SEC "). SECTION 2. Definitions. In addition to the definitions set forth in the Ordinance or parenthetically defined herein, which apply to any capitalized terms used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Town pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Dissemination Agent" shall mean, initially, the Town, or any successor Dissemination Agent designated in writing by the Town and which has filed with the Town a written acceptance of such designation. "Material Events" shall mean any of the events listed in Section 5 of this Disclosure Certificate. "MSRB" shall mean the Municipal Securities Rulemaking Board. The MSRB's required method of filing is electronically via its Electronic Municipal Market Access (EMMA) system available on the Internet at http: / /emma.msrb.org. "Participating Underwriter" shall mean the original underwriter of the Certificates required to comply with the Rule in connection with an offering of the Certificates. "Rule" shall mean Rule 15c2- 12(b)(5) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. SECTION 3. Provision of Annual Reports. (a) The Town shall, or shall cause the Dissemination Agent to, not later than nine (9) months following the end of the Town's Fiscal Year of each year, commencing nine (9) months following the end of the Town's Fiscal Year ending December 31, 2010, provide to the MSRB in an electronic format as prescribed by the MSRB, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than five (5) business days prior to said date, the Town shall provide the Annual Report to the Dissemination Agent (if other than the Town). The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross - reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Town may be submitted separately from the balance of the Annual Report. (b) If the Town is unable to provide to the MSRB an Annual Report by the date required in subsection (a) of this Section, the Town shall send or cause to be sent a notice in substantially the form attached as Exhibit "A" to the MSRB. (c) The Dissemination Agent shall: i. determine each year prior to the date for providing the Annual Report the appropriate electronic format prescribed by the MSRB; ii. if the Dissemination Agent is other than the Town, send written notice to the Town at least 45 days prior to the date the Annual Report is due stating that the Annual Report is due as provided in Section 3(a) hereof; and iii. if the Dissemination Agent is other than the Town, file a report with the Town certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the entities to which it was provided. SECTION 4. Content of Annual Reports. The Town's Annual Report shall contain or incorporate by reference the following: (a) A copy of its annual financial statements prepared in accordance with generally accepted accounting principles audited by a firm of certified public accountants. If audited annual financial statements are not available by the time specified in Section 3(a) above, unaudited financial statements will be provided as part of the Annual Report and audited financial statements will be provided when and if available. (b) An update of the type of information identified in Exhibit `B" hereto, which is contained in the tables in the Official Statement with respect to the Certificates. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Town or related public entities, which are available to the public on the MSRB's Internet Website or filed with the SEC. The Town shall clearly identify each such document incorporated by reference. SECTION 5. Reporting of Material Events. The Town shall provide or cause to be provided, in a timely manner, notice of any of the following events with respect to the Certificates, if such event is material, to the MSRB: (a) Principal and interest payment delinquencies; (b) Non - payment related defaults; (c) Unscheduled draws on debt service reserves reflecting financial difficulties; (d) Unscheduled draws on credit enhancements reflecting financial difficulties; (e) Substitution of credit or liquidity providers or their failure to perform; (f) Adverse tax opinions or events affecting the tax- exempt status of the 2010 Certificates; (g) Modifications to rights of Certificate holders; (h) Certificate calls; (i) Defeasances; (j) Release, substitution or sale of property securing repayment of the Certificates; or (k) Rating changes. SECTION 6. Identifying Information. All documents provided to the MSRB pursuant to this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB. SECTION 7. Termination of Reporting Obligation. The Town's obligations under this Disclosure Certificate shall terminate upon the earliest of: (i) the date of legal defeasance, prior redemption or payment in full of all of the Certificates; (ii) the date that the Town shall no longer constitute an "obligated person" within the meaning of the Rule; or (iii) the date on which those portions of the Rule which require this written undertaking are held to be invalid by a court of competent jurisdiction in a non - appealable action, have been repealed retroactively or otherwise do not apply to the Certificates. SECTION 8. Dissemination Agent. The Town may, from time to time, appoint or engage a Dissemination Agent to assist the Town in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Town may amend this Disclosure Certificate and may waive any provision hereof, without the consent of the holders and beneficial owners of the Certificates, if such amendment or waiver does not, in and of itself, cause the undertakings herein (or action of any Participating Underwriter in reliance on the undertakings herein) to violate the Rule, but taking into account any subsequent change in or official interpretation of the Rule. The Town will provide notice of such amendment to the MSRB. SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Town from disseminating any other information, using the means K of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Town chooses to include any information in any Annual Report or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate, the Town shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. SECTION 11. Default. In the event of a failure of the Town to comply with any provision of this Disclosure Certificate, any holder or beneficial owner of the Certificates may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Town to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default under the Ordinance, and the sole remedy under this Disclosure Certificate in the event of any failure of the Town to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Town, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Certificates, and shall create no rights in any other person or entity. DATED: November_, 2010. [SEAL] Attest: Town Clerk TOWN OF AVON, COLORADO, am 4 Mayor EXHIBIT "A" NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name: Town of Avon, Colorado (the "Town "). Name of Issue: Tax- Exempt Certificates of Participation, Series 2010A, in the aggregate principal amount of $ and Tax - Exempt Certificates of Participation, Series 2010B, in the aggregate principal amount of $ CUSIP: Date of Issuance: November , 2010. NOTICE IS HEREBY GIVEN that the Town has not provided an Annual Report with respect to the Certificates as required by the Ordinance adopted by the Town Council of the Town on second reading on September 28, 2010, and the Continuing Disclosure Certificate executed on November _, 2010 by the Town. The Town anticipates that the Annual Report will be filed by ,20 Dated: , 20 TOWN OF AVON, COLORADO, By:_ Title: 5 EXHIBIT `B" INDEX OF OFFICIAL STATEMENT TABLES TO BE UPDATED EXHIBIT E DRAFT - 9120110 PRELIMINARY OFFICIAL STATEMENT DATED 2010 NEW ISSUE INSURED RATINGS: S &P - "Applied For" BOOK -ENTRY ONLY Moody's: "Applied For" [BANK QUALIFIED] UNDERLYING RATING: S &P: "Applied For" Moody's: "Applied For" See "RATINGS" INSURANCE: [TO COME] In the opinion of Sherman & Howard L.L.C., Special Counsel, assuming continuous compliance with certain covenants described herein, the portion of the Base Rentals which is designated in the Lease and paid by the Trustee as interest on the Certificates is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date of delivery of the Certificates (the "Tax Code"), is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code except that such interest is required to be included in calculating the "adjusted current earnings" adjustment applicable to corporations for purposes of computing the alternative minimum taxable income of corporations, and is excluded from Colorado taxable income and Colorado alternative minimum taxable income under Colorado income tax laws in effect on the date of delivery of the Certificates as described herein. [The Town has designated the Certificates as "qualified tax - exempt obligations" for purposes of Section 265(b) (3) of the Tax Code. See "FINANCIAL INSTITUTION INTEREST DED UCTION. " J TAX - EXEMPT CERTIFICATES OF PARTICIPATION, SERIES 2010 Evidencing Proportionate Interests in the Base Rentals and other Revenues under an Annually Renewable Lease Agreement dated as of November 1, 2010, Between UMB BANK, N.A., solely in its capacity as trustee under the Indenture, as lessor, and THE TOWN OF AVON, COLORADO, as lessee Dated: Date of Delivery Due: December 1, as shown herein The Tax- Exempt Certificates of Participation, Series 2010 (the "Certificates ") evidence a proportionate interest in the base rentals and certain other revenues under an annually renewable Lease Purchase Agreement dated as of November 1, 2010 (the "Lease "), entered into between UMB Bank, n.a., solely in its capacity as trustee under the Indenture (the "Trustee "), as lessor, and the Town of Avon, Colorado, as lessee (the "City "). The Certificates are being executed and delivered pursuant to an Indenture of Trust dated as of November 1, 2010 (the "Indenture "), executed and delivered by the Trustee. The Certificates are issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof and initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( "DTC "), securities * Subject to change. depository for the Certificates. Purchases of the Certificates are to be made in book -entry form only. Purchasers will not receive certificates representing their beneficial ownership interest in the Certificates. See "THE CERTIFICATES -- Book -Entry Only System." The Certificates bear interest at the rates set forth herein, payable on June 1 and December 1 of each year, commencing on December 1, 2010, to and including the maturity dates shown herein (unless the Certificates are redeemed earlier), payable to the registered owner of the Certificates, initially Cede & Co. The principal of the Certificates will be payable upon presentation and surrender at the Trustee. See "THE CERTIFICATES." The maturity schedule for each series of the Certificates appears on the inside cover page of this Official Statement. The Certificates are subject to optional redemption prior to maturity at the direction of the Town, are subject to mandatory sinking fund redemption, and are also subject to extraordinary mandatory redemption under the circumstances described in "THE CERTIFICATES -- Redemption Provisions." The proceeds from the issuance of the Certificates will be used to: (i) refund certain outstanding Certificates of Participation, as more particularly described herein; (ii) construct, install, equip and furnish certain capital improvements within the Town; (iii) purchase a municipal bond insurance policy and reserve fund surety bond,] and (iv) pay the costs of issuing the Certificates. See "SOURCES AND USES OF FUNDS." Neither the Lease nor the Certificates constitute a general obligation, a multiple fiscal year direct or indirect debt or other financial obligation or indebtedness of the Town within the meaning of any constitutional, statutory or charter debt limitation. None of the Lease, the Indenture or the Certificates directly or indirectly obligate the Town to make any payments beyond those appropriated for any fiscal year in which the Lease may be in effect. Except to the extent payable from the proceeds of the Certificates and income from the investment thereof, from the net proceeds of certain insurance policies, performance bonds and condemnation awards, from the net proceeds received as a result of defaults under contracts relating to the Leased Property, from net proceeds from exercising certain remedies under the Lease or from other amounts made available under the Indenture, the Certificates are payable during the lease term solely from Base Rentals payable to the Trustee under the Lease and the income from certain investments under the Indenture. All payment obligations of the Town under the Lease are from year to year only. The Lease is subject to annual renewal by the Town. Upon termination of the Lease, the Certificates will be payable solely from moneys, if any, held by the Trustee under the Indenture and any amounts resulting from the exercise of various remedies by the Trustee under the Site Lease, the Lease and the Indenture, all as more fully described herein. [INSURANCE LANGUAGE TO COME] This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision and should give particular attention to the section entitled "RISK FACTORS." The Certificates are offered when, as, and if issued, subject to the approval of validity by Sherman & Howard L.L.C., Denver, Colorado, Special Counsel, and certain other conditions. Sherman & Howard L.L.C. also has acted as special counsel to the Town in connection with the preparation of this Official Statement. Certain matters will be passed upon for the Town by Eric Heil, Esq., the Town Attorney. It is expected that the Certificates will be available for delivery in New York, New York through the facilities of DTC on or about _, 2010.* PIPER JAFFRAY LOGO * Subject to change. MATURITY SCHEDULE* (CUSIP© 6 -digit issuer number: TAX - EXEMPT CERTIFICATES OF PARTICIPATION, SERIES 2010 Evidencing Proportionate Interests in the Base Rentals and other Revenues under an Annually Renewable Lease Agreement dated as of November 1, 2010, Between UMB BANK, N.A., solely in its capacity as trustee under the Indenture, as lessor, and THE TOWN OF AVON, COLORADO, as lessee Price CUSIP© Price CUSIP© Maturing Principal Interest or Issue Maturing Principal Interest or Issue (December 1) Amount Rate Yield Number (December 1) Amount Rate Yield Number $ _% Term Certificate due December 1, . Priced to Yield: _ %. CUSIP© Issue No.: * Subject to change. © Copyright 2010, American Bankers Association. CUSIP data is provided by Standard & Poor's, CUSIP Service Bureau, a division of The McGraw -Hill Companies, Inc. USE OF INFORMATION IN THIS OFFICIAL STATEMENT This Official Statement, which includes the cover page and the appendices, does not constitute an offer to sell or the solicitation of an offer to buy any of the Certificates in any jurisdiction in which it is unlawful to make such offer, solicitation, or sale. No dealer, salesperson, or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement in connection with the offering of the Certificates, and if given or made, such information or representations must not be relied upon as having been authorized by the Town. The Town maintains an internet website; however, the information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision. The information set forth in this Official Statement has been obtained from the Town and from the sources referenced throughout this Official Statement, which the Town believes to be reliable. No representation is made by the Town, however, as to the accuracy or completeness of information provided from sources other than the Town. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact, and no representation or warranty is made as to the correctness of such estimates and opinions, or that they will be realized. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement pursuant to its responsibilities to investors under the federal securities laws, but the Underwriter does not guarantee the accuracy or completeness of such information. The information, estimates, and expressions of opinion contained in this Official Statement are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the Certificates shall, under any circumstances, create any implication that there has been no change in the affairs of the Town, or in the information, estimates, or opinions set forth herein, since the date of this Official Statement. This Official Statement has been prepared only in connection with the original offering of the Certificates and may not be reproduced or used in whole or in part for any other purpose. The Certificates have not been registered with the Securities and Exchange Commission due to certain exemptions contained in the Securities Act of 1933, as amended. The Certificates have not been recommended by any federal or state securities commission or regulatory authority, and the foregoing authorities have neither reviewed nor confirmed the accuracy of this document. THE PRICES AT WHICH THE CERTIFICATES ARE OFFERED TO THE PUBLIC BY THE UNDERWRITER (AND THE YIELDS RESULTING THEREFROM) MAY VARY FROM THE INITIAL PUBLIC OFFERING PRICES OR YIELDS APPEARING ON THE COVER PAGE HEREOF. IN ADDITION, THE UNDERWRITER MAY ALLOW CONCESSIONS OR DISCOUNTS FROM SUCH INITIAL PUBLIC OFFERING PRICES TO DEALERS AND OTHERS. IN ORDER TO FACILITATE DISTRIBUTION OF THE CERTIFICATES, THE UNDERWRITER MAY ENGAGE IN TRANSACTIONS INTENDED TO STABILIZE THE PRICE OF THE CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. TOWN OF AVON, COLORADO Town Council Ronald C. Wolfe, Mayor Brian Sipes, Mayor Pro Tern Richard Carroll, Council Member David Dantas, Council Member Kristi Ferraro Amy Phillips Buz Reynolds City Staff Larry Brooks, Town Manager Scott Wright, Assistant Town Manager- Finance Eric Heil, Esq., Town Attorney [Public Works Director? Others ?] UNDERWRITER Piper Jaffray & Co. Denver, Colorado SPECIAL COUNSEL Sherman & Howard L.L.C. Denver, Colorado TRUSTEE UMB Bank, n.a. Denver, Colorado TABLE OF CONTENTS Page INTRODUCTION........................................................................................... ............................... 5 General......................................................................................................... ............................... 5 TheTown ..................................................................................................... ............................... 5 Purpose......................................................................................................... ............................... 5 The Certificates; Prior Redemption ............................................................. ............................... 6 The Site Lease and the Leased Property Generally ..................................... ............................... 6 Security for the Certificates; Termination of Lease ..................................... ............................... 7 CertificateInsurance .................................................................................... ............................... 9 TaxExemption ............................................................................................. ............................... 9 Professionals.............................................................................................. ............................... 10 Continuing Disclosure Undertaking .......................................................... ............................... 10 AdditionalInformation .............................................................................. ............................... 10 CERTAIN RISK FACTORS ......................................................................... ............................... 11 Nonappropriation....................................................................................... ............................... 11 Effect of a Termination of the Lease Term ................................................ ............................... 11 Factors that Could Impact Value of Property if Lease is Terminated ....... ............................... 12 Limited Duration of Site Lease .............................................................. ............................... 13 Enforceability of Remedies; Liquidation Delays ....................................... ............................... 13 Effect of Termination on Exemption from Taxation and on Exemption from Registration .... 14 CondemnationRisk .................................................................................... ............................... 14 CasualtyRisk ............................................................................................. ............................... 14 InsuranceRisk ............................................................................................ ............................... 15 Future Changes in Laws ............................................................................. ............................... 15 Proposed Colorado Fiscal Initiatives ......................................................... ............................... 15 SecondaryMarket ...................................................................................... ............................... 17 SOURCES AND USES OF FUNDS ............................................................. ............................... 18 Sources and Uses of Proceeds .................................................................... ............................... 18 TheRefunding Project ............................................................................... ............................... 18 The Improvement Project .......................................................................... ............................... 18 THECERTIFICATES ................................................................................... ............................... 19 General....................................................................................................... ............................... 19 Payment Provisions ....................... ............................... 19 .............................. ............................... RedemptionProvisions .............................................................................. ............................... 19 TaxCovenant ............................................................................................. ............................... 23 Book -Entry Only System ........................................................................... ............................... 23 BASE RENTALS SCHEDULE SECURITY FOR THE CERTIFICATES ........ ............................... General........................................................ ............................... . TheLeased Property .................................... ............................... TheReserve Fund ........................................ ............................... Insurance on the Certificates ........................ ............................... -i- . ............................... 24 ........ ............................... 25 ........ ............................... 25 ........ ............................... 26 ........ ............................... 26 ........ ............................... 26 Page AdditionalCertificates ............................................................................... ............................... 27 General....................................................................................................... ............................... 28 TownPowers ............................................................................................. ............................... 28 GoverningBody ......................................................................................... ............................... 28 Administration........................................................................................... ............................... 29 Town Employees, Benefits and Pension Matters ...................................... ............................... 30 Town Insurance Coverage ......................................................................... ............................... 31 Capital Improvement Plan ......................................................................... ............................... 31 Intergovernmental Contracts and Agreements ........................................... ............................... 32 Avon Urban Renewal Authority ................................................................ ............................... 34 CITY FINANCIAL OPERATIONS .............................................................. ............................... 35 Budget and Appropriation Process ............................................................ ............................... 35 FinancialStatements .................................................................................. ............................... 35 Summary of Historical Revenues, Expenditures and Changes in Fund Balances .................... 36 Management's Discussion of Material Trends .......................................... ............................... 37 CURRENT SOURCES OF AVAILABLE REVENUE ................................ ............................... 38 General....................................................................................................... ............................... 38 Contractual or Legal Limitations on Available Revenues ......................... ............................... 38 Sources of General Fund Revenues ........................................................... ............................... 38 Sales Tax Revenues ................................................................................... ............................... 39 Selected Ad Valorem Property Tax Information ....................................... ............................... 43 Ad Valorem Property Tax Data ................................................................. ............................... 48 Mill Levies Affecting Property Owners Within the Town ........................ ............................... 50 Estimated Overlapping General Obligation Debt ...................................... ............................... 50 TOWNDEBT STRUCTURE ........................................................................ ............................... 52 General....................................................................................................... ............................... 52 GeneralObligation Debt ............................................................................ ............................... 52 RevenueObligations .................................................................................. ............................... 52 SpecialAssessments .................................................................................. ............................... 52 Short-Term Borrowing and Other Obligations .......................................... ............................... 53 Contracts and Leases .................................................................................. ............................... 53 Component Unit and Conduit Obligations ................................................ ............................... 53 ECONOMIC AND DEMOGRAPHIC INFORMATION ... Population and Age Distribution ...... ............................... Income.............................................. ............................... . Employment...................................... ............................... RetailSales ........................................ ............................... Recreation and Tourism .................... ............................... Building Permits ............................... ............................... Foreclosure Activity in Eagle County .............................. ......................... ............................... 55 ......................... ............................... 55 ......................... ............................... 56 ......................... ............................... 57 ......................... ............................... 61 ......................... ............................... 61 ......................... ............................... 63 ......................... ............................... 64 LEGALMATTERS ....................................................................................... ............................... 66 Litigation.................................................................................................... ............................... 66 SovereignImmunity ................................................................................... ............................... 66 Approval of Certain Legal Proceedings ..................................................... ............................... 67 -ii- Page Certain Constitutional Limitations ............................................................. ............................... 67 TAXMATTERS ............................................................................................ ............................... 69 FINANCIAL INSTITUTION INTEREST DEDUCTION ............................ ............................... 71 INDEPENDENT AUDITORS ....................................................................... ............................... 72 RATING........................................................................................................ ............................... 72 UNDERWRITING........................................................................................ ............................... 72 OFFICIAL STATEMENT CERTIFICATION .............................................. ............................... 73 APPENDIX A - Audited Basic Financial Statements of the Town for the -iii- Fiscal Year Ended December 31, 2009 .......................... ............................... A -1 APPENDIX B - Certain Definitions and Document Summaries ................. ............................B -1 APPENDIX C - Book -Entry Only System ................................................... ............................0 -1 APPENDIX D - Form of Continuing Disclosure Certificate .................... ............................... D -1 APPENDIX E - Form of Opinion of Special Counsel .. ............................... ............................E -1 [APPENDIX F - Specimen Municipal Bond Insurance Policy ..................... ...........................F -1] -iii- INDEX OF TABLES NOTE: Tables marked with an ( *) indicate Annual Financial Information to be updated pursuant to SEC Rule 15c2 12, as amended. See Appendix D - Form of Continuing Disclosure Certificate. Sources and Uses of Proceeds ...................................................... ............................... Schedule of Base Rentals .............................................................. ............................... *General Fund - History of Revenue, Expenditures and Changes in Fund Balance ... *History of Sales and Use Tax Collections .................................. ............................... Comparison of Monthly Sales Tax Collections ............................ ............................... *Principal Generators of Sales Tax Revenues - 2009 ................... ............................... *History of Assessed Valuations and Mill Levies for the Town .. ............................... *Property Tax Collections in the Town ....................................... ............................... *2010 Preliminary Assessed Valuation of Classes of Property in the Town .............. *Ten Largest Taxpayers in the Town - 2010 Preliminary ............ ............................... Sample Mill Levies Affecting Property Owners Within the Town - 2009 .................. Estimated Overlapping General Obligation Indebtedness ............ ............................... Population..................................................................................... ............................... AgeDistribution ............................................................................ ............................... Per Capita Personal Income Page ................. 18 ................. 24 ................. 36 ................. 42 ................. 42 ................. 43 ................. 48 ................. 48 ................. 49 ................. 49 ................. 50 ................. 51 .................................................................. ............................... Median Household Effective Buying Income ....................................... ............................... Percent of Households by Effective Buying Income Groups - 2010 .... ............................... Labor Force and Percent Unemployed ................................................. ............................... Average Number of Employees Within Selected Industries - Eagle County ...................... Selected Major Employers in Eagle County ......................................... ............................... Principal Employers in the Town of Avon ........................................... ............................... RetailSales ............................................................................................ ............................... SkierVisits ................................................................. ............................... History of New Construction in the Town of Avon .. ............................... History of Building Permits Issued in Unincorporated Eagle County...... History of Foreclosures .............................................. ............................... -iv- .... 55 .... 56 .... 56 .... 57 .... 57 ......... 58 ......... 59 ......... 60 ......... 61 ......... 61 ......... 62 ............................ 64 ............................ 64 ............................ 65 OFFICIAL STATEMENT TAX - EXEMPT CERTIFICATES OF PARTICIPATION, SERIES 2010 Evidencing Proportionate Interests in the Base Rentals and other Revenues under an Annually Renewable Lease Agreement dated as of November 1, 2010, Between UMB BANK, N.A., solely in its capacity as trustee under the Indenture, as lessor, and THE TOWN OF AVON, COLORADO, as lessee INTRODUCTION General This Official Statement, including the cover page and appendices, is furnished in connection with the execution, delivery and sale of $ * aggregate principal amount of Tax- Exempt Certificates of Participation, Series 2010 (the "Certificates "), evidencing proportionate interests in the base rentals and other revenues under an annually renewable Lease Agreement dated as of November 1, 2010 (the "Lease "), between UMB Bank, n.a., Denver, Colorado, solely in its capacity of trustee under the Indenture (the "Trustee "), as lessor, and the Town of Brighton, Colorado, as lessee (the "City "). The Certificates will be executed and delivered pursuant to the terms of an Indenture of Trust executed by the Trustee dated as of November 1, 2010 (the "Indenture "). The Certificates and any Additional Certificates issued pursuant to the terms of the Indenture shall be collectively referred to herein as the "Certificates." Certain of the capitalized terms used herein and not otherwise defined are defined in Appendix B to this Official Statement. The Town The Town was incorporated in 1978 as a home rule town under Article XX of the Colorado Constitution and the laws of the State of Colorado (the "State "). Because the Town is a home rule town, except to the extent otherwise governed by the Colorado Constitution, its home rule charter (the "Charter ") governs all local and municipal matters. The Town encompasses approximately 8.25 square miles in Eagle County, Colorado (the "County "), approximately 114 miles east of Denver and eight miles west of Vail on Interstate Highway 70. According to the State Demography office, the Town had a full -time estimated population of 7,108 as of July 1, 2009. [estimated seasonal population ?] Purpose The proceeds from the issuance of the Certificates will be used to: (i) refund outstanding Certificates of Participation, Series 1998 (the "1998 Certificates" or the "Refunded Certificates "), currently outstanding in the aggregate principal amount of $3,990,000 (the "Refunding Project'); (ii) construct, install, equip and furnish certain capital improvements within the Town (the "Improvement Project," and together with the Refunding Project, the "Project'); (iii) [purchase a municipal bond insurance policy and reserve fund surety bond,] and (iv) pay the costs of issuing the Certificates. See "SOURCES AND USES OF FUNDS." * Subject to change. 5 The Certificates; Prior Redemption The Certificates are issued solely as fully registered certificates in the denomination of $5,000, or any integral multiple thereof. The Certificates mature and bear interest (calculated based on a 360 -day year consisting of twelve 30 -day months) as set forth on the inside cover page hereof. The payment of principal and interest on the Certificates is described in "THE CERTIFICATES -- Payment Provisions." The Certificates initially will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( "DTC "), the securities depository for the Certificates. Purchases of the Certificates are to be made in book -entry form only. Purchasers will not receive certificates representing their beneficial ownership interest in the Certificates. See "THE CERTIFICATES- - Book -Entry Only System." The Certificates are subject to optional redemption prior to maturity at the direction of the Town, are subject to mandatory sinking fund redemption, and are also subject to extraordinary mandatory redemption under the circumstances described in "THE CERTIFICATES -- Redemption Provisions." The Site Lease and the Leased Property Generally The Town and UMB Bank, n.a., solely in its capacity as Trustee under the Indenture, will enter into a Site and Improvement Lease Agreement dated as of November 1, 2010 (the "Site Lease "), pursuant to which the Town will lease to the Corporation approximately 4.198 acres of land within the Town (the "Site ") and the improvements thereon, together with any fixtures (the "Leased Property," as more particularly described below). The Site is located near Interstate 70 near the principal entrance to the Town. The Site Lease term expires on December 31, [TOWN, please review /update] Pursuant to the Lease, the Town will lease the Leased Property back from UMB Bank, n.a., as further described herein. In addition to the land comprising the Site, the Leased Property also includes the Town's Public Works Facility (the "Public Works Facility "), a vehicle maintenance building consisting of 19,500 square feet on the first floor and 4,750 square feet on the mezzanine area. The Public Works Facility primarily consists of a vehicle repair bay area, in addition to a small lobby area, two offices, and a lunchroom. The repair bay area of the building contains vehicle lifts, a large fabrication bay with a bridge crane, a flat large repair bay, two small repair bays, an implement repair bay, a wash bay with lift, and a lube /compressor room. The repair bays also contain a tire repair area and tire storage mezzanine, metal shop, parts storeroom with mezzanine, battery room, manuals library, a rebuild room, an electronics shop, and lockers and showers. [Are there several buildings ?] The Leased Property, which initially was financed with the proceeds of the Refunded Certificates, currently is leased to the Town of Avon Finance Authority (the "Finance Authority ") and subleased by the Town. In connection with the Refunding Project, the existing lease and sublease between the Town and the Finance Authority will be terminated. Thereafter, the Town will own fee title to the Leased Property and the Trustee will have a leasehold interest in the Leased Property, subject to the terms and provisions of the Lease and the Indenture. [Verify payment of the 2000 COPS. When were they paid ?] 31 Security for the Certificates; Termination of Lease General. The Certificates and the interest thereon are payable solely from certain revenues (the "Revenues ") received under the Lease, which include: (a) all amounts payable by or on behalf of the Town or with respect to the Leased Property pursuant to the Lease including, but not limited to, all Base Rentals, Prepayments, the Purchase Option Price and Net Proceeds, but not including Additional Rentals (except for payments made by the Town as Additional Rentals to initially fund or replenish the Reserve Fund); (b) any portion of the proceeds of the Certificates deposited into the Base Rentals Fund and the Reserve Fund, each created under the Indenture; (c) any moneys which may be derived from any insurance in respect of the Certificates, [including without limitation funds received from draws under the 2010 Insurance Policy and/or the 2010 Reserve Policy]; and (d) any moneys and securities, including investment income, held by the Trustee in the Funds and Accounts established under the Indenture (except for moneys and securities held in the Rebate Fund or the Escrow Account or any other defeasance escrow account). Under the Indenture, the Trustee, for the benefit of the Owners of the Certificates, is to receive Base Rentals payable by the Town under the Lease. The amount and timing of the Base Rentals are designed to provide sufficient money to the Trustee to pay the principal of and interest on the Certificates when due. The Trustee is to deposit to the Base Rentals Funds created under the Indenture all amounts payable by or on behalf of the Town or with respect to the Leased Property pursuant to the Lease, including all Base Rentals, Prepayments, the Purchase Option Price and Net Proceeds (but not Additional Rentals). Neither the Lease nor the Certificates constitute a general obligation or other indebtedness or multiple fiscal year financial obligation of the Town within the meaning of any constitutional, statutory, or Charter debt limitation. Neither the Certificates nor the Lease will directly or indirectly obligate the Town to make any payments other than those which may be appropriated by the Town for each fiscal year. The Trustee does not have any obligation to and will not make any payments on the Certificates pursuant to the Lease or otherwise. Sources of Payment of Base Rentals. Amounts due under the Lease are payable from all general revenues of the Town and no particular revenues of the Town are pledged to the payment of Base Rentals. The Town currently intends to budget, appropriate and pay the Base Rentals (and Additional Rentals, if any) allocable to the Certificates from legally available funds in its General Fund. Notwithstanding the foregoing, Base Rentals and Additional Rentals may be budgeted, appropriated and paid from any of the Town's available funds in the future. The major portion of the moneys deposited into the Town's General Fund are sales and use tax revenues and ad valorem property tax revenues. See "CURRENT SOURCES OF AVAILABLE REVENUES" for a description of each of those sources of revenue. The Town has outstanding $1,670,000 of its Sales Tax Revenue Refunding Bonds, Series 1999 (the "1999 Bonds "), which mature in 2014. The 1999 Bonds have a lien on the Town's Sales Tax revenues and debt service on the 1999 Bonds is payable prior to the availability of Sales Tax Revenues to pay rentals due under the Lease. The Town also has outstanding $3,215,000 of its 7 General Obligation Refunding Bonds, Series 2004 (the "2004 Bonds "), which mature in 2016. See "TOWN DEBT STRUCTURE." Certain statutory and constitutional limitations limit the amount of property taxes the Town can levy and the amount of sales and use tax revenues the Town can collect. See "PROPERTY TAXATION, ASSESSED VALUATION AND OVERLAPPING DEBT - -Ad Valorem Property Taxes" and "LEGAL MATTERS -- Certain Constitutional Limitations" for a discussion of those limitations. Termination of Lease, Annual Appropriation. The Lease constitutes a one -year lease of the Leased Property which is annually renewable for additional one -year terms as described in the Lease. The Town must take action annually in order to renew the Lease term for another year. If the Town fails to take such action, the Lease automatically will be terminated. The Town's decision to terminate its obligations under the Lease will be determined by the failure of the Town Council to specifically budget and appropriate moneys to pay all Base Rentals and reasonably estimated Additional Rentals for the ensuing Fiscal Year. The Finance Director or other officer of the Town at any time charged with the responsibility of formulating budget proposals is directed under the Lease to include in the annual budget proposal submitted to the Town Council, in any year in which the Lease is in effect, items for all payments required under the Lease for the ensuing Renewal Term until such time, if any, as the Town may determine to not renew and terminate the Lease. Notwithstanding this directive regarding the formulation of budget proposals, it is the intention of the Town that any decision to effect an Appropriation for the Base Rentals and Additional Rentals shall be made solely by the Town Council and not by any other official of the Town, as further provided in the Lease. If on or before the December 31 prior to the beginning of any Fiscal Year of the Town, the Town fails to budget and appropriate sufficient funds to pay all Base Rentals and all reasonably estimated Additional Rentals, the Town will be considered to have terminated the Lease (subject to certain waiver and cure provisions). Upon termination of the Town's obligations under the Lease, the Trustee may proceed to exercise certain remedies under the Lease and the Indenture, including the lease or sublease of the Leased Property, the sale or assignment of any interest the Trustee has in the Leased Property, including the Trustee's leasehold interest in the Leased Property, or one or any combination of the steps described in the Lease. The net proceeds of any such disposition are required to be applied by the Trustee toward the payment of the Certificates. See "CERTAIN RISK FACTORS -- Nonappropriation" and "CERTAIN RISK FACTORS -- Effect of a Termination of the Lease Term." See also Appendix B - Certain Definitions and Document Summaries- -The Lease - Nonappropriation. The Net Proceeds of such dispositions are to be applied toward the payment of the Certificates. See "THE CERTIFICATES -- Redemption Provisions - Mandatory Redemption Upon the Occurrence of Certain Events." Termination of the Site Lease. The Leased Property has been leased by the Town to the Corporation pursuant to the Site Lease. At the end of the term of the Site Lease, all right, title and interest of the Corporation, the Trustee, or any sublessee or assignee in and to the Leased Property will vest in the Town. The Site Lease will terminate on the earliest to occur of the following: (a) the termination of the Lease Term as provided in the Lease due to the payment of the Purchase Option Price by the Town, or upon payment by the Town of all Base Rentals and Additional Rentals for the entire Lease Term; or (b) discharge of the Indenture as a result of the fact that all Certificates have been paid or have been deemed to have been paid as provided in the Indenture; or (c) December 31, . The Leased Property will no longer be subject to the provisions of the Site Lease, the Lease or the Indenture upon the termination of the Site Lease. See "CERTAIN RISK FACTORS -- Limited Duration of Site Lease" and Appendix B - Certain Definitions and Document Summaries- -The Site Lease - The Site Lease Term. Release of Leased Property. The Town will have the option to purchase the Corporation's leasehold interest in the Leased Property pursuant to the Lease and terminate the Site Lease and the Lease by paying the Purchase Option Price, which is equal to the amount necessary to pay all principal and interest due on all Outstanding Certificates and any other amounts necessary to defease and discharge the Indenture, as provided in the Lease. See Appendix B - Certain Definitions and Document Summaries - -The Lease - Purchase Option and Conditions for Purchase Option. The Trustee is required to use the Purchase Option Price to pay the principal, interest, and any premium on the Certificates. See "THE CERTIFICATES- - Redemption Provisions." Additional Certificates. The Indenture permits the issuance of Additional Certificates without notice to or approval of the owners of the outstanding Certificates under the circumstances described in "THE CERTIFICATES -- Additional Certificates." Reserve Fund. The Certificates also are secured by the Reserve Fund established in the Indenture. See "SECURITY FOR THE CERTIFICATES- -The Reserve Fund." Certificate Insurance [GENERAL DESCRIPTION/DISCLAIMERS TO COME] Tax Exemption In the opinion of Special Counsel, assuming continuous compliance with certain covenants described herein, the portion of the Base Rentals which is designated in the Lease and paid by the Trustee as interest on the 2010 Certificates, is excluded from gross income under federal income tax laws pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date of delivery of the 2010 Certificates (the "Tax Code "), is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code except that such interest is required to be included in calculating the "adjusted current earnings" adjustment applicable to corporations for purposes of computing the alternative minimum taxable income of corporations, and is excluded from Colorado taxable income and Colorado alternative minimum taxable income under Colorado income tax laws in effect on the date of delivery of the 2010 Certificates. See "TAX MATTERS." [The Town has designated the Certificates as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Tax Code. See "FINANCIAL INSTITUTION INTEREST DEDUCTION. "] Notwithstanding the foregoing, Special Counsel has disclaimed any opinion regarding the tax status of the Certificates after termination of the Lease. See "RISK FACTORS- -Effect of Termination on Exemption from Taxation and on Exemption from Registration and "TAX MATTERS. " 9 Professionals Sherman & Howard L.L.C., Denver, Colorado, has acted as Special Counsel to the Town in connection with execution and delivery of the Certificates and also has acted as special counsel to the Town in connection with preparation of this Official Statement. The fees of Sherman & Howard L.L.C. will be paid only from Certificate proceeds at closing. Certain matters will be passed upon for the Town by Eric Heil, Esq., the Town Attorney. UMB Bank, n.a., Denver, Colorado, is serving as Trustee. The Town's audited basic financial statements (attached hereto as Appendix A) have been audited by McMahan and Associates, L.L.C., Avon, Colorado. Piper Jaffray & Co., Denver, Colorado, is acting as the Underwriter for the Certificates (the "Underwriter"). See "UNDERWRITING." Continuing Disclosure Undertaking The Town will execute a continuing disclosure certificate (the "Disclosure Certificate ") at the time of the closing for the Certificates. The Disclosure Certificate will be executed for the benefit of the Beneficial Owners of the Certificates and in order to assist the Underwriter in complying with Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934 (the "Rule ") and the Town will covenant in the Lease to comply with its terms, provided that a failure by the Town to comply with the Disclosure Certificate will not constitute an Event of Lease Default. The Disclosure Certificate will provide that so long as the Certificates remain outstanding, the Town will annually provide certain financial information and operating data to the Municipal Securities Rulemaking Board ( "MSRB ") and will provide notice of certain material events to the MSRB, in compliance with the Disclosure Certificate. The form of the Disclosure Certificate is attached hereto as Appendix D. [The Town has never failed to materially comply with the terms of any continuing disclosure undertaking entered into pursuant to the Rule.] Additional Information This introduction is only a brief summary of the provisions of the Certificates, the Lease, the Site Lease, the Indenture, the Improvement Project, the Refunding Project and the Town; a full review of the entire Official Statement should be made by potential investors. All references herein to the Certificates, the Lease, the Indenture and the Site Lease and other documents are qualified in their entirety by reference to such documents. This Official Statement speaks only as of its date and the information contained herein is subject to change. Additional information and copies of the documents referred to above are available from: Town of Avon, Colorado Attn: Assistant Town Manager- Finance 1 Lake Street P.O. Box 975 Avon, CO 81620 Phone: (970) 748 -4020 Piper Jaffray & Co. 1200 17`h Street, Suite 1250 Denver, Colorado 80202 Telephone: (303) 820 -5891 Attn: Public Finance. 10 CERTAIN RISK FACTORS Investment in the Certificates involves certain risks. Each prospective investor in the Certificates is encouraged to read this Official Statement in its entirety and to give particular attention to the factors described below which could affect the payment of rentals under the Lease and could affect the market price of the Certificates to an extent that cannot be determined at this time. The factors set forth below are not intended to provide an exhaustive list of the risks associated with the purchase of the Certificates. Nonappropriation Prospective purchasers of the Certificates must look to the ability of the Town to pay Base Rentals pursuant to the Lease; such Base Rentals will provide funds for payment of principal and interest on the Certificates. The Town is not obligated to pay Base Rentals or Additional Rentals under the Lease unless funds are budgeted and appropriated for such rentals by the Town each year. If, prior to December 31 of each year, the Town Council does not specifically budget and appropriate amounts sufficient to pay all Base Rentals for the next Fiscal Year, and to pay such Additional Rentals as are estimated to become due for the ensuing Fiscal Year, an "Event of Nonappropriation" occurs. If an Event of Nonappropriation occurs, the Town will not be obligated to make payment of the Base Rentals or Additional Rentals which accrue after the last day of the Original or Renewal Term during which such Event of Nonappropriation occurs. Various political, legal and economic factors could lead to the nonappropriation of sufficient funds to make the payments under the Lease, and prospective investors should carefully consider any factors which may influence the budgetary process. There is no assurance that the Town Council will appropriate sufficient funds to renew the Lease each year and the Town has no obligation to do so. In addition, the ability of the Town to maintain adequate revenues for its operations and obligations in general (including obligations associated with the Lease) is dependent upon several factors outside the Town's control, such as the economy, collections of Sales Tax and changes in law. See "LEGAL MATTERS -- Certain Constitutional Limitations," "SECURITY FOR THE CERTIFICATES," and "CITY FINANCIAL OPERATIONS." The obligation of the Town to pay Base Rentals and Additional Rentals is limited to those Town funds that are specifically budgeted and appropriated annually by the Town Council for such purpose. The Lease directs the Finance Director (or any other officer at any time charged with the responsibility of formulating budget proposals) to include, in the annual budget proposals submitted to the Town Council, items for all payments required under the Lease for the ensuing Fiscal Year, until such time (if any) as the Town Council determines that it will not renew the Lease. The Lease provides that it is the intention of the Town Council that any decision to renew the Lease is to be made solely by the Town Council and not by any other official of the Town. See Appendix B - THE LEASE. Effect of a Termination of the Lease Term In the event of termination of the Town's obligations under the Lease upon the occurrence of an Event of Nonappropriation or an Event of Lease Default, the Town is required to vacate and surrender the Leased Property by March 1 of any Renewal Term in respect of 11 which an Event of Nonappropriation or an Event of Lease Default has occurred. If an Event of Lease Default shall have occurred and remain uncured, the Trustee may take any of the following actions: (i) terminate the Lease Term and give notice to the Town to vacate and surrender possession of the Leased Property which vacation and surrender the Town agrees under the Lease to complete within sixty (60) days from the date of such notice (in the event the Town does not vacate and surrender possession on the termination date, the "holdover tenant" provisions of the Lease shall apply); (ii) lease or sublease the Leased Property or sell or assign any interest the Trustee has in the Leased Property, including the Trustee's leasehold interest in the Leased Property pursuant to the Site Lease; (iii) recover from the Town (a) the portion of Base Rentals and Additional Rentals, for which a specific Appropriation has been effected by the Town for such purpose, which would otherwise have been payable under the Lease, during any period in which the Town continues to occupy, use or possess the Leased Property; and (b) Base Rentals and Additional Rentals, for which a specific Appropriation has been effected by the Town for such purpose, which would otherwise have been payable by the Town under the Lease during the remainder, after the Town vacates and surrenders possession of the Leased Property, of the Fiscal Year in which such Event of Lease Default occurs; or (iv) take whatever action at law or in equity may appear necessary or desirable to enforce its rights in and to the Leased Property under the Site Lease, the Lease and the Indenture. A potential purchaser of the Certificates should not assume that the amount of money received by the Trustee upon the exercise of its rights under the Site Lease, the Lease and the Indenture after a termination of the Lease Term will be sufficient to pay the aggregate principal amount of the Certificates then outstanding plus accrued interest thereon. This may be due to the inability to recover certain of the costs incurred in connection with the issuance of the Certificates. It also may be possible that the specialized nature of the Leased Property would limit the number of potential buyers or sublessees of the Leased Property. IF THE CERTIFICATES ARE REDEEMED SUBSEQUENT TO A TERMINATION OF THE LEASE TERM FOR AN AMOUNT LESS THAN THE AGGREGATE PRINCIPAL AMOUNT THEREOF AND ACCRUED INTEREST THEREON, SUCH PARTIAL PAYMENT WILL BE DEEMED TO CONSTITUTE A REDEMPTION IN FULL OF THE CERTIFICATES PURSUANT TO THE INDENTURE; AND UPON SUCH A PARTIAL PAYMENT, NO OWNER OF ANY CERTIFICATE WILL HAVE ANY FURTHER CLAIMS FOR PAYMENT UPON THE TRUSTEE OR THE Town. Factors that Could Impact Value of Property if Lease is Terminated General. The Town will retain fee simple title to the Leased Property and the Trustee will have a leasehold interest in the Leased Property pursuant to the Site Lease. Upon the termination of the Lease, the Trustee will have the right to use and possession of the Leased Property. However, a potential purchaser of the Certificates should not assume that it will be possible for the Trustee to sublease the Leased Property or otherwise sell or dispose of its leasehold interest in the Leased Property, or any portion thereof, for an amount equal to the aggregate principal amount of the Certificates then outstanding plus accrued interest thereon or that such subleasing or disposal can be accomplished in time to pay any installment of principal or interest on the Certificates when due. 12 Current Uses of Property; Restrictions; Valuation. No current appraised valuation of the Leased Property is available. [Discuss valuation of property /Public Works Facility] Upon a termination of the Lease, there is no guarantee that the Trustee will be able to sublease or otherwise sell or dispose of its leasehold interest in the Leased Property under the Site Lease in an amount equal to the amount of the outstanding Certificates. Further, the Leased Property may depreciate in value each year; it is not possible to predict whether the depreciated value of the Leased Property will be equal to the aggregate principal amount of Certificates outstanding, plus accrued interest thereon, at any particular future point in time. [DISCUSS CURRENT ZONING OF LEASED PROPERTY] Further, the Leased Property is subject to present and future zoning requirements or other land use regulations imposed by the Town. Zoning and land use regulations in effect in the future may restrict the future uses of the Property. [DISCUSS specialized use of building. Easily converted to another use ?] Should that occur, the Leased Property may have less value to third parties than the insured value would indicate. There is no guarantee that the Trustee will be able to liquidate its interest in the Leased Property in an amount equal to the amount of the outstanding Certificates. [WE ARE REVIEWING TITLE COMMITMENT. ANY SIGNIFICANT TITLE RESTRICTIONS TO BE DISCUSSED] Limited Duration of Site Lease The term of the Site Lease is ten years longer than the term of the Certificates. Upon termination of the Lease for any reason (including the occurrence of an Event of Nonappropriation), the Trustee may assign its interest in the Site Lease and may foreclose through the courts on or sell, lease, sublease or otherwise liquidate or dispose of its interest in the Leased Property. The net proceeds received from those activities are to be applied to pay the Certificates. However, due to the limited term of the Site Lease, the Trustee may find it difficult or impossible to locate third parties that are interested in accepting an assignment of the Corporation's rights in the Leased Property. Further, the limited term of the Site Lease may make it difficult or impossible for the Trustee to collect revenues over the remaining term of the Site Lease that are sufficient to pay the Certificates. Enforceability of Remedies; Liquidation Delays Under the Lease and the Site Lease, the Trustee has the right to take possession of and dispose of the Trustee's leasehold interest in the Leased Property upon an Event of Nonappropriation or an Event of Lease Default and a termination of the Lease. However, the enforceability of the Lease is subject to applicable bankruptcy laws, equitable principles affecting the enforcement of creditors' rights generally and liens securing such rights, and the police powers of the Town. Because of the use of the Leased Property by the Town for the public welfare, a court in any action brought to enforce the remedy of the Trustee to take possession of the Leased Property may delay repossession for an indefinite period, even though the Town may have terminated the Lease or be in default thereunder. As long as the Trustee is unable to take possession of the Leased Property or any other projects or property which may subsequently be approved in connection with the issuance of Additional Certificates, it will be unable to sublease or otherwise dispose of its leasehold interests in the Leased Property as permitted under the Site Lease and the Indenture or to redeem or pay the Certificates except from 13 funds otherwise available to the Trustee under the Indenture. See "SECURITY FOR THE CERTIFICATES." Effect of Termination on Exemption from Taxation and on Exemption from Registration Special Counsel has specifically disclaimed any opinion as to the effect that termination of the Lease may have upon the treatment for federal or State income tax purposes of amounts received by an Owner of 2010 Certificates subsequent to such termination. There is no assurance that any amounts representing interest received by the Owners of the 2010 Certificates after termination of the Lease as a consequence of an Event of Nonappropriation or Event of Lease Default will be excluded from gross income under federal or State laws. In view of past private letter rulings by the United States Department of Treasury, Owners of the 2010 Certificates should not assume that payments allocable to interest received from the 2010 Certificates would be excluded from gross income for federal or State income tax purposes if an Event of Nonappropriation or an Event of Lease Default occurs and the Lease is terminated. See "TAX MATTERS." In the event of a termination of the Town's obligations under the Lease, there is no assurance that Owners of Certificates would be able to transfer their interests without compliance with federal securities laws. Condemnation Risk In the mid- 1990's, the Town of Sheridan, Colorado ( "Sheridan ") exercised its eminent domain powers to acquire an administration building it previously had leased under an annually terminable lease purchase agreement. Sheridan sought to use its condemnation power to acquire the property at a fraction of the remaining lease payments (which would be paid to owners of certificates of participation in Sheridan's lease). Sheridan's condemnation suit was successful; however, Sheridan was unable to pay the court- determined amount representing the value of the property and eventually vacated the building in favor of the trustee. Sheridan eventually reached a settlement with the trustee and reacquired possession of the building from the trustee. Pursuant to this settlement, certificate holders reportedly received less than half of the amounts due them under the certificates. The Town considers the occurrence of a situation such as the one described above to be unlikely; however, there is no assurance that the Leased Property (or portions thereof) would not be condemned in the future. Casualty Risk If all, substantially all, or any portion of the Leased Property is damaged or destroyed by any casualty, there is no assurance that casualty insurance proceeds and other available monies of the Town will be sufficient either to repair or replace the damaged or destroyed property or to pay all the outstanding Certificates, if the Certificates are called for mandatory redemption as a result of such casualty. See "THE CERTIFICATES -- Redemption Provisions." Although the Town believes its casualty insurance coverages are adequate, there is no assurance that such damage or destruction would not have a material adverse effect on the ability of the Town to make use of the Leased Property. Delays in the receipt of casualty insurance proceeds pertaining to the Leased Property or delays in the repair, restoration or replacement of property damaged or destroyed also could have an adverse effect upon the ability 14 of the Town to make use of the Leased Property or upon its ability to make timely payment of rental payments under the Lease. Insurance Risk The Lease requires that until termination of the Lease Term, the Town must provide casualty and property damage insurance for the Leased Property in an amount equal to the estimated replacement cost of the Leased Property. Such insurance policy or policies may have a deductible clause in an amount not to exceed $150,000. The Town currently has a blanket property and casualty insurance policy covering its existing property; however, such policy is subject to annual renewal. There is no guarantee that the Town will be able to acquire sufficient casualty insurance at reasonable prices in the future. See "THE Town - -City Insurance Coverage." Pursuant to the Lease, if the Town insures against similar risks by self - insurance, the Town may, at its election and with the prior consent of the 2010 Insurer, provide for public liability insurance in connection with the Project partially or wholly by means of an adequate self - insurance fund. Such a self - insurance fund (if established) would likely be funded annually by appropriation, and there is no assurance that such fund will at any time be adequately funded. There is no assurance that, in the event the Lease is terminated as a result of damage to or destruction or condemnation of the Leased Property, moneys made available from the Town's insurance by reason of any such occurrence will be sufficient to redeem the Certificates at a price equal to the principal amount thereof outstanding plus accrued interest to the redemption date. See "THE CERTIFICATES -- Redemption Provisions." Future Changes in Laws Various State laws and constitutional provisions apply to the imposition, collection, and expenditure of ad valorem property taxes, sales taxes, other revenues, and the operation of the Town. There is no assurance that there will not be any change in, interpretation of, or addition to the applicable laws, provisions, and regulations which would have a material effect, directly or indirectly, on the affairs of the Town and the imposition, collection, and expenditure of its revenues. Such changes could include, but are not limited to, future restrictions on real estate development and growth in the Town and State law changes in the items subject to sales taxes or exemptions therefrom. Proposed Colorado Fiscal Initiatives General. The Colorado Secretary of State has certified three initiatives (the "Initiatives ") to be submitted to Colorado voters in November 2010 that could have a substantial negative impact on the future activities of the Town, including its ability to generate sufficient revenues for its general operations. If any of the Initiatives are approved by Colorado voters, most of the provisions of the Initiatives would take effect in January 2011. The full effect of the Initiatives on the Town cannot be currently known because several of the provisions of the Initiatives are unclear and one or both of the Initiatives may not be approved at the general election to be held in November 2010. (DISCUSS currently anticipated impact of each Initiative on the Town (particularly sales tax revenues /debruced property tax revenues, etc.]The Town is in the process of examining the risk involved with the potential approval of any or all of these Initiatives by the voters. The Town is in the process of developing its 2011 budget and these 15 Initiatives will be taken into consideration. Should any or all of these Initiatives pass, the Town would address revenue reductions through current or future budgetary reductions. The Town cannot predict the impact of these Initiatives with any certainty. Proposition 101 — Reduction in Fees and Income Taxes. The first Initiative, labeled "Proposition 101" by the Colorado Secretary of State, would effect a statutory change to, among other things, (a) decrease specific ownership taxes in four equal yearly steps to reach $2 for "new" vehicles and $1 for "other vehicles," (b) eliminate local taxes on vehicle rentals and leases, (c) eliminate local taxes in four equal yearly steps on the first $10,000 of value of vehicle sales prices, (d) reduce all registration, license, and title charges combined to $10 per vehicle, and (e) eliminate certain telecommunication fees, thus reducing the revenues currently available to the Town as described in "CURRENT SOURCES OF AVAILABLE REVENUES." If Proposition 101 is adopted, future statewide voter approval would be required to reverse it and reinstate the reduced fees or impose additional fees similar to those reduced by Proposition 101. In addition, Proposition 101 may reduce the overall revenue that may be retained and spent by the Town under the limits imposed by the Taxpayers Bill of Rights (`TABOR ") found in Article X, Section 20 of the Colorado Constitution. Amendment 60 — Limitations upon Property Taxes. The second Initiative, labeled "Amendment 60" by the Colorado Secretary of State, would amend TABOR to establish additional limits on property taxes and change certain procedures for elections relating to property taxes. Amendment 60 would deem that any election which authorizes a local government to collect, retain and expend excess revenues notwithstanding the provisions of TABOR to be of no force and effect. In 1997, the Town's voters approved an election question which authorizes the Town to retain excess revenues (including excess property tax revenues) received in 1998 and thereafter. In addition, Amendment 60 would: (i) require additional election notices for the extension of expiring taxes, and terminate taxes previously extended without such notices; (ii) limit future property tax increases to 10 years; (iii) require that government enterprises and authorities pay property taxes, and require the Town to reduce its property tax rates to avoid any additional revenue to the Town as a result; (iv) require that tax increase election questions provide a specific dollar amount for the increase, and invalidate current taxes that exceed the dollar amount included in the authorizing ballot question; (v) terminate "taxes exceeding state laws, tax policies, or limits violated, changed, or weakened without state voter approval" and restore those "laws, policies, and limits, including debt limits;" (vi) allow electors to vote on property tax issues in jurisdictions where they own property; (vii) require all property tax elections be held in November; (viii) require that property tax increases be voted upon separately from related debt questions; and (ix) prohibit property tax bills from listing items other than property taxes and late charges. Amendment 61 — Limits on Government Debt and Other Financings. The third Initiative, labeled "Amendment 61" by the Colorado Secretary of State, would amend TABOR and another part of the Colorado Constitution to prohibit the State from issuing debt and entering into other types of borrowings or financings whatsoever. Amendment 61 would also limit local governments' ability to enter into such transactions. The restrictions in Amendment 61, as described below, would apply to traditional governmental debt, but also to a variety of financing transactions that have not historically been treated as debt under State law. Amendment 61 16 would apply to "any loan, whether or not it lasts more than one year; may default; is subject to annual appropriation or discretion; is called a certificate of participation, lease - purchase, lease- back, emergency, contingency, property lien, special fund, dedicated revenue bond, or any other name; or offers any other excuse, exception, or form" (collectively, "Covered Financings "). It is likely that this would include transactions such as the Certificates and other lease- purchase financings previously undertaken by the Town and described in "TOWN DEBT STRUCTURE." It is unclear whether other contracts entered into by the Town, such as employment contracts, construction contracts, operating leases, agreements between governments to share revenues, or economic development agreements would be affected. The State and its enterprises, authorities and other state political entities would be prohibited from undertaking any Covered Financing, even with voter approval. Local governments, such as the Town, and their enterprises, authorities and other local political entities would be allowed to enter into Covered Financings, but only if authorized by their electors at a vote occurring in November. Under current State law, voter approval is not required for obligations that refund previous Town obligations at a lower interest rate, obligations payable during the same fiscal year, and certain obligations subject to annual appropriation by the Town. Also, local governments that currently may hold debt elections at times other than November under TABOR, would be prohibited from doing so. In addition, Amendment 61 would decrease the debt limit of the Town from 25% of the actual value of all taxable property within the Town (as described and subject to the exceptions described under "TOWN DEBT STRUCTURE ") to 10% of the assessed valuation of only the real property within the Town. Further, this debt limitation would include all debt of the Town, including general obligation bonds, sales tax revenue bonds, and future lease financings. The Town currently has outstanding general obligation bonds and sales tax revenue bonds. This decreased limitation on Town debt and other financings could affect the Town's ability to refinance such debt or finance future capital needs. Under Amendment 61, future Covered Financings must take the form of bonded debt, be subject to prepayment at any time without penalty and mature within 10 years. Amendment 61 also states that "[n]o borrowing may continue past its original term." Except for enterprise borrowings, when a Covered Financing is repaid, the tax rates of the Town would be required to decline in an amount equal to its planned average annual repayment, even if the debt is not repaid from taxes. Secondary Market No assurance can be given concerning the future existence of a secondary market for the Certificates or its maintenance by the Underwriter or others, and prospective purchasers of the Certificates should therefore be prepared, if necessary, to hold their Certificates to maturity. 17 SOURCES AND USES OF FUNDS Sources and Uses of Proceeds The following are the estimated sources and uses of the proceeds of the Certificates: Sources and Uses of Proceeds Amount Sources of Funds Par amount of the Certificates .............................. ............................... Plus/(less): original issue premium ( discount) .... ............................... Other available funds (1) ..................................... ............................... Total:............................................................. ............................... Uses of Proceeds The Refunding Project ........ ............................... .. ............................... The Improvement Project .................................... ............................... Reserve Fund ..................... Costs of issuance (including underwriting discount and premium for the 2010 Insurance Policy and 2010 Surety) ......... Total:............................................................. ............................... (1) Represents funds on deposit in the reserve fund for the Refunded Certificates. Source: The Underwriter. The Refunding Project General. A portion of the proceeds of the Certificates will be used to currently refund the Refunded Certificates. The Town will deposit a portion of the Certificate proceeds, together with the other available Town funds, if any, with the Escrow Bank and invested in Federal Securities (defined in Appendix B) maturing at such times and in such amounts as required to provide funds sufficient to pay the principal of and interest on the Refunded Certificates as they become due at maturity or upon prior redemption on December 1, 2010. Verification of Mathematical Computations. The accuracy of the mathematical computations relating to the adequacy of the maturing principal amounts of and interest due on the federal securities held in the Escrow Account and interest to be earned thereon to pay all of the principal of and interest on the Refunded Certificates upon prior redemption will be verified by , certified public accountants, Denver, Colorado. The Improvement Project The Town expects to finance a number of capital improvement projects with the proceeds of the Certificates. [General description to come.] The projects financed pursuant to the Improvement Project will not be part of the Leased Property. 18 THE CERTIFICATES General The Certificates are issuable as fully registered certificates and initially will be registered in the name of "Cede & Co.," as nominee for DTC, the securities depository for the Certificates. Purchases by Beneficial Owners of the Certificates are to be made in book -entry only form. Payments to Beneficial Owners are to be made as described in "Book -Entry Only System" below. The Certificates are dated the date of their execution and delivery, and will mature on the dates and in the amounts and bear interest at the rates set forth on the inside cover page of this Official Statement. Payment Provisions Except for any Certificates for which DTC is acting as Depository or for an Owner of $1,000,000 or more in aggregate principal amount of Certificates, the principal of, premium, if any, and interest on all Certificates shall be payable to the Owner thereof at its address last appearing on the registration books maintained by the Trustee. In the case of any Certificates for which DTC is acting as Depository, the principal of, premium, if any, and interest on such Certificates shall be payable as directed in writing by the Depository. In the case of an Owner of $1,000,000 or more in aggregate principal amount of Certificates, the principal of, premium, if any, and interest on such Certificates shall be payable by wire transfer of funds to a bank account designated by the Certificate Owner in written instructions to the Trustee. Interest (based on a 360 -day year consisting of twelve 30 -day months) shall be paid to the Owner of each Certificate, as shown on the registration books kept by the Trustee, as of the close of business on the 15th day of the calendar month immediately precedinf the Interest Payment Date, or the Business Day immediately preceding such 15`h day, if such 15` day is not a Business Day (the "Regular Record Date "), irrespective of any transfer of ownership of Certificates subsequent to the Regular Record Date and prior to such Interest Payment Date, or on a special record date, which shall be fixed by the Trustee for such purpose, irrespective of any transfer of ownership of Certificates subsequent to such special record date and prior to the date fixed by the Trustee for the payment of such interest. Notice of the special record date and of the date fixed for the payment of such interest shall be given by providing a copy thereof by first class mail postage prepaid at least ten (10) days prior to the special record date, to the Owner of each Certificate upon which interest will be paid, determined as of the close of business on the day preceding the giving of such notice. Redemption Provisions* Optional Redemption.* The Certificates maturing on or prior to December 1, shall not be subject to optional redemption prior to their respective maturity dates. The Certificates maturing on and after December 1, , shall be subject to redemption prior to their respective maturity dates at the option of the Town, in whole or in part, in integral multiples of $5,000, and if in part in such order of maturities as the Town shall determine and by lot within a maturity, on December 1, , and on any date thereafter, at a redemption price equal to the * Subject to change. 19 principal amount of the Certificates so redeemed plus accrued interest to the redemption date without a premium. In the case of a Prepayment in part of Base Rentals under the Lease, the Trustee shall confirm that the revised Base Rentals Schedule to be provided by the Town Representative pursuant to the Lease sets forth Principal Portions and Interest Portions of Base Rentals that are equal to the principal and interest due on the Certificates that remain Outstanding after such Optional Redemption. For such confirmation, the Trustee may rely on a certification of the Town Representative or other person as provided in the Lease. Mandatory Sinking Fund Redemption. The Certificates maturing on December 1, (the "Term Certificates "), are subject to mandatory sinking fund redemption at a price equal to the principal amount thereof plus accrued interest to the redemption date. As and for a sinking fund for the redemption of the Term Certificates maturing December 1, , the Town shall deposit in the Base Rentals Fund on or before December 1, and on each December 1 thereafter through and including December 1, , a sum which together with other moneys available in the Base Rentals Fund is sufficient to redeem (after credit as hereinafter provided) the following principal amounts of the Term Certificates maturing December 1, Redemption Date Principal (December 1) Amount (maturity) On or before the 30th day prior to each such sinking fund payment date, the Trustee shall proceed to call the Term Certificates indicated above (or any Term Certificate or Certificates issued to replace such Term Certificates) for redemption from the sinking fund on the next December 1, as the case may be, and give notice of such call without other instruction or notice from the Town. The amount of each sinking fund installment may be reduced by the principal amount of any Term Certificates of the maturity and interest rate which are subject to sinking fund redemption on such date and which prior to such date have been redeemed (otherwise than through the operation of the sinking fund) or otherwise canceled and not theretofore applied as a credit against a sinking fund installment. Such reductions, if any, shall be applied in such year or years as may be determined by the Town. Extraordinary Mandatory Redemption. If the Lease is terminated by reason of the occurrence of (a) an Event of Nonappropriation, (b) an Event of Lease Default, or (c) the Trustee, with the written consent of the Town, fails to repair or replace the Leased Property pursuant to the terms of the Lease, if (1) the Leased Property is damaged or destroyed in whole or in part by fire or other casualty, or (2) title to, or the temporary or permanent use of, the Leased Property has been taken by eminent domain by any governmental body or (3) breach of warranty or any material defect with respect to the Leased Property becomes apparent or (4) title to or the use of all or the Leased Property is lost by reason of a defect in title thereto, and the Net 20 Proceeds of any insurance, performance bond or condemnation award, or Net Proceeds received as a consequence of defaults under contracts relating to the Leased Property, made available by reason of such occurrences, shall be insufficient to pay in full, the cost of repairing or replacing the Leased Property, and the Town does not appropriate sufficient funds for such purpose or cause the Lease to be amended in order that Additional Certificates may be executed and delivered pursuant to the Indenture for such purpose, the Certificates are required to be called for redemption. If called for redemption, the Certificates are to be redeemed in whole on such date or dates as the Trustee may determine, for a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date (subject to the availability of funds as described below). [Notwithstanding the foregoing, so long as the 2010 Insurer is not in payment default under the 2010 Insurance Policy and has not repudiated its obligations thereunder, unless the 2010 Insurer consents to such redemption, the Trustee may not apply any Net Proceeds or other available moneys to the redemption of any Certificates prior to their respective maturity dates. In the absence of such consent, the Trustee shall (a) allocate such Net Proceeds (together with any other available moneys held under this Indenture), proportionately among all Outstanding Certificates, and (b) apply such allocation of Net Proceeds to the payment of the principal of and interest on the Certificates on the regularly scheduled maturity and interest payment dates of the Certificates. If the 2010 Insurer does consent to such redemption, nothing in the Indenture precludes the 2010 Insurer from making payment to the registered owners of the Certificates of all or any portion of amounts due thereon at any time prior to the respective stated maturity dates thereof.] If the Net Proceeds, including the Net Proceeds from the exercise of any Lease Remedy under the Lease, otherwise received and other moneys then available under the Indenture are insufficient to pay in full the principal of and accrued interest on all Outstanding Certificates, the Trustee may, or at the request of the Owners of a majority in aggregate principal amount of the Certificates Outstanding, and upon indemnification as to costs and expenses as provided in the Indenture, without any further demand or notice, shall, exercise all or any combination of Lease Remedies as provided in the Lease and the Certificates are to be redeemed by the Trustee from the Net Proceeds resulting from the exercise of such Lease Remedies and all other moneys, if any, then on hand and being held by the Trustee for the Owners of the Certificates. If the Net Proceeds resulting from the exercise of such Lease Remedies and other moneys are insufficient to redeem the Certificates at 100% of the principal amount thereof plus interest accrued to the redemption date, then such Net Proceeds resulting from the exercise of such Lease Remedies and other moneys shall be allocated proportionately among the Certificates, according to the principal amount thereof Outstanding. In the event that such Net Proceeds resulting from the exercise of such Lease Remedies and other moneys are in excess of the amount required to redeem the Certificates at 100% of the principal amount thereof plus interest accrued to the redemption date, then such excess moneys shall be paid to the Town as an overpayment of the Purchase Option Price. Prior to any distribution of the Net Proceeds resulting from the exercise of any of such remedies, the Trustee shall be entitled to payment of its reasonable and customary fees for all services rendered in connection with such disposition, as well as reimbursement for all reasonable costs and expenses, including attorneys' fees, 21 incurred thereby, from proceeds resulting from the exercise of such Lease Remedies and other moneys. IF THE CERTIFICATES ARE REDEEMED FOR AN AMOUNT LESS THAN THE AGGREGATE PRINCIPAL AMOUNT THEREOF PLUS INTEREST ACCRUED TO THE REDEMPTION DATE, SUCH PARTIAL PAYMENT IS DEEMED TO CONSTITUTE A REDEMPTION IN FULL OF THE CERTIFICATES, AND UPON SUCH A PARTIAL PAYMENT NO OWNER OF SUCH CERTIFICATES, SHALL HAVE ANY FURTHER CLAIM FOR PAYMENT AGAINST THE TRUSTEE OR THE Town. Partial Redemption. If less than all of the Certificates are to be redeemed, the Certificates are to be redeemed only in integral multiples of $5,000. The Trustee is to treat any Certificates of denomination greater than $5,000 as representing that number of separate Certificates each of the denomination of $5,000 as can be obtained by dividing the actual principal amount of such Certificates by $5,000. Upon surrender of any Certificates for redemption in part, the Trustee is to execute and deliver to the Owner thereof, at no expense of the Owner, a new Certificates or Certificates of authorized denominations in an aggregate principal amount equal to the unredeemed portion of the Certificates so surrendered. Notice of Redemption. Whenever Certificates are to be redeemed, the Trustee is required to, not less than thirty (30) and not more than sixty (60) days prior to the redemption date (except for Extraordinary Mandatory Redemption notice which is required to be immediate), mail notice of redemption to all Owners of all Certificates to be redeemed at their registered addresses, by first class mail, postage prepaid, or in the event that the Certificates to be redeemed are registered in the name of the Depository, such notice may, in the alternative, be given by electronic means in accordance with the requirements of the Depository. Any notice of redemption is to (1) be given in the name of the Trustee, (2) identify the Certificates to be redeemed, (3) specify the redemption date and the redemption price, (4) in the event of optional redemption, state that the Town has given notice of its intent to exercise its option to purchase or prepay Base Rentals under the Lease, (5) state that such redemption is subject to the deposit of the funds related to such option by the Town on or before the stated redemption date and (6) state that on the redemption date the Certificates called for redemption will be payable at the corporate trust office of the Trustee and that from that date interest will cease to accrue. The Trustee may use "CUSIP" numbers in notices of redemption as a convenience to Certificates Owners, provided that any such notice is required to state that no representation is made as to the correctness of such numbers either as printed on the Certificates or as contained in any notice of redemption and that reliance may be placed only on the identification numbers containing the prefix established under the Indenture. Any notice of redemption may contain a statement that the redemption is conditioned upon the receipt by the Trustee of funds on or before the date fixed for redemption sufficient to pay the redemption price of the Certificates so called for redemption, and that if such funds are not available, such redemption shall be canceled by written notice to the owners of the Certificates called for redemption in the same manner as the original redemption notice was given. 22 Tax Covenant The Town covenants for the benefit of the owners of the Certificates that it will not take any action or omit to take any action with respect to the Certificates, the proceeds thereof, any other funds of the Town or any facilities financed or refinanced with the proceeds of the Certificates (except for the possible exercise of the Town's right to terminate the Lease as provided therein) if such action or omission (i) would cause the interest on the Certificates to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Tax Code, or (ii) would cause interest on the Certificates to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code except that such interest is required to be included in calculating the "adjusted current earnings" adjustment applicable to corporations for purposes of computing the alternative minimum taxable income of corporations, or (iii) would cause interest on the Certificates to lose its exclusion from Colorado taxable income or to lose its exclusion from Colorado alternative minimum taxable income under present Colorado law. Subject to the Town's right to terminate the Lease, the foregoing covenant shall remain in full force and effect, notwithstanding the payment in full or defeasance of the Certificates, until the date on which all obligations of the County in fulfilling the above covenant under the Tax Code and Colorado law have been met. In addition, the Town has covenanted in the Lease that its direction of investments pursuant to Article 5 of the Indenture shall be in compliance with the procedures established by the Tax Certificate to the extent required to comply with its covenants contained in the foregoing provisions of the Lease. The Town hereby agreed that, to the extent necessary, it will, during the Lease Term, pay to the Trustee such sums as are required for the Trustee to pay the amounts due and owing to the United States Treasury as rebate payments. Any such payment shall be accompanied by directions to the Trustee to pay such amounts to the United States Treasury. Any payment of Town moneys pursuant to the foregoing sentence shall be Additional Rentals for all purposes of this Lease. Book -Entry Only System The Certificates will be available only in book -entry form in the principal amount of $5,000 or any integral multiples thereof. DTC will act as the initial securities depository for the Certificates. The ownership of one fully registered Certificate for each maturity bearing interest at the same interest rate as set forth on the inside cover page of this Official Statement, each in the aggregate principal amount of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. See Appendix C -- Book -Entry Only System. SO LONG AS CEDE & CO., AS NOMINEE OF DTC, IS THE REGISTERED OWNER OF THE CERTIFICATES, REFERENCES IN THIS OFFICIAL STATEMENT TO THE OWNERS OR REGISTERED OWNERS OF THE CERTIFICATES WILL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS. Neither the Town nor the Trustee will have any responsibility or obligation to DTC's Participants or Indirect Participants, or the persons for whom they act as nominees, with respect to the payments to or the providing of notice for the DTC Participants, the Indirect Participants or the beneficial owners of the Certificates as further described in Appendix C to this Official Statement. 23 BASE RENTALS SCHEDULE The following table sets forth the estimated schedule of Base Rentals due pursuant to the Lease in each year, including the Principal Component and the Interest Component. Schedule of Base Rentals(1)* Calendar Principal Year Component 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2025 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040(3) Total Interest Total Base Rentals Component(2) (1) The Base Rentals are due semi - annually on _and _ of each year that the Lease remains in effect. The Trustee will use the Base Rentals to pay the principal and interest due on the Certificates on June 1 and December 1 of each year. (2) Based upon interest rates estimated by the Underwriter. (3) A portion of the Base Rentals in 2040 is expected to be paid from funds on deposit in the Reserve Fund. See "SECURITY FOR THE CERTIFICATES -- Reserve Fund." Source: The Underwriter. * Subject to change. 24 SECURITY FOR THE CERTIFICATES General Each Certificate evidences a proportionate interest in the right to receive certain designated Revenues, including Base Rentals, under and as defined in the Lease and the Indenture. Under the Site Lease, the Leased Property has been leased by the Town to the Trustee, and under the Lease, the Leased Property has been leased by the Trustee back to the Town and the Town has agreed to pay directly to the Trustee, Base Rentals in consideration of the Town's right to possess and use the Leased Property. Certain Revenues, including Base Rentals, are required under the Indenture to be distributed by the Trustee for the payment of the Certificates and interest thereon. The Lease is subject to annual appropriation, non - renewal and, in turn, termination by the Town. The execution and delivery of the Certificates does not directly or contingently obligate the Town to make any payments beyond those appropriated for the Town's then current Fiscal Year. As more fully described under the caption "RISK FACTORS," the Lease is subject to renewal on an annual basis at the option of the Town. The Lease Tenn and the schedule of payments of Base Rentals are designed to produce moneys sufficient to pay the Certificates and interest thereon when due (if the Town elects not to terminate the Lease prior to the end of the Lease Term). The Certificates shall not constitute a mandatory charge or requirement of the Town in any ensuing Fiscal Year beyond the current Fiscal Year, and shall not constitute or give rise to a general obligation or other indebtedness of the Town or a multiple fiscal year direct or indirect debt or other financial obligation whatsoever of the Town, within the meaning of any constitutional, home rule charter or statutory debt provision or limitation. No provision of the Certificates shall be construed or interpreted as creating a delegation of governmental powers nor as a donation by or a lending of the credit of the Town within the meaning of Sections 1 or 2 of Article XI of the Colorado Constitution. The execution and delivery of the Certificates shall not directly or indirectly obligate the Town to renew the Lease from Fiscal Year to Fiscal Year or to make any payments beyond those appropriated for the Town's then current Fiscal Year. Base Rentals and Additional Rentals may be paid from any lawfully available Town monies appropriated for that purpose. See "TOWN FINANCIAL OPERATIONS." In the event of termination of the Town's obligations under the Lease upon the occurrence of an Event of Nonappropriation or an Event of Lease Default, the Town is required to vacate and surrender the Leased Property by March 1 of any Renewal Term in respect of which an Event of Nonappropriation or an Event of Lease Default has occurred. If an Event of Lease Default shall have occurred and remain uncured, the Trustee may take any of the following actions: (i) terminate the Lease Term and give notice to the Town to vacate and surrender possession of the Leased Property which vacation and surrender the Town agrees under the Lease to complete within sixty (60) days from the date of such notice; (ii) lease or sublease the Leased Property or sell or assign any interest the Trustee has in the Leased Property, including the Trustee's leasehold interest in the Leased Property; (iii) recover from the Town (a) the portion of Base Rentals and Additional Rentals, for which a specific Appropriation has been effected by the Town for such purpose, which would otherwise have been payable under the Lease, during any period in which the Town continues to occupy, use or possess the Leased OR Property; and (b) Base Rentals and Additional Rentals, for which a specific Appropriation has been effected by the Town for such purpose, which would otherwise have been payable by the Town under the Lease during the remainder, after the Town vacates and surrenders possession of the Leased Property, of the Fiscal Year in which such Event of Lease Default occurs; or (v) take whatever action at law or in equity may appear necessary or desirable to enforce its rights in and to the Leased Property under the Site Lease, the Lease and the Indenture. In the event the Town does not vacate and surrender possession on the termination date, the "holdover tenant" provisions of the Lease shall apply The Leased Property In accordance with State law, the Town has determined to lease the Leased Property to the Trustee pursuant to the terms of the Site Lease, and lease the Leased Property back from the Trustee pursuant to the terms of the Lease. The Reserve Fund The Certificates also are secured by amounts on deposit in the Reserve Fund established by the Indenture. The Reserve Fund shall secure only the payment of the Certificates unless otherwise provided in the ordinance or indenture authorizing the issuance of Additional Certificates. The Reserve Fund is required to be funded in the amount equal to the Reserve Fund Requirement, which is an amount equal to the least of (a) 10% of the stated principal amount of the Certificates, (b) the maximum annual debt service requirements on the outstanding Certificates, or (c) 125% of the average annual debt service requirements on the outstanding Certificates. However, if the Reserve Fund secures Additional Certificates, the Reserve Fund Requirement shall also include such additional amount as set forth in the ordinance or indenture authorizing the execution and delivery of such Additional Certificates. Upon issuance of the Certificates, the Reserve Fund Requirement will be $ .* [The Town initially will fund the Reserve Fund with the 2010 Reserve Policy issued by the 2010 Insurer.] Except as otherwise provided in the Indenture, amounts in the Reserve Fund are to be used to pay principal of and interest on the Certificates (and any Additional Certificates secured by the Reserve Fund) as the same become due in the event of an insufficiency of funds on deposit in the Base Rentals Fund to make such payments, and for the other purposes described in Appendix B - Certain Definitions and Document Summaries- -The Indenture - Funds and Accounts. [Subject to the requirements set forth in the Indenture, the Town may at any time substitute cash or Permitted Investments for the Qualified Surety Bond on deposit in the Reserve Fund so long as the amount on deposit in the Reserve Fund after any substitution is at least equal to the Reserve Fund Requirement.] For additional information on the Reserve Fund, see Appendix B - Certain Definitions and Document Summaries - -The Indenture - Funds and Accounts. Insurance on the Certificates [TO COME] * Subject to change. Additional Certificates So long as no Event of Indenture Default, Event of Nonappropriation or Event of Lease Default has occurred and is continuing and the Lease Term is in effect, one or more series of Additional Certificates may be executed and delivered upon the terms and conditions set forth in the Indenture. The principal of any Additional Certificates shall mature on December 1 and the interest payment dates therefore shall be the same as the interest payment dates for the Certificates; otherwise the times and amounts of payment of Additional Certificates shall be as provided in the supplemental ordinance or indenture and amendment to the Lease entered into in connection therewith. Additional Certificates may be executed and delivered without the consent of or notice to the Owners of Outstanding Certificates, to provide moneys to pay any one or more of the following: (a) the costs of acquiring, constructing, improving and installing any New Facility, or of acquiring a Site for any New Facility (and costs reasonably related thereto); (b) the costs of completing the Leased Property Improvements or making, at any time or from time to time, such substitutions, additions, modifications and improvements for or to the Leased Property as the Town may deem necessary or desirable, and as in accordance with the provisions of the Lease; or (c) for the purpose of refunding or refinancing all or any portion of Outstanding Certificates. Each of the Additional Certificates issued pursuant to the Indenture will evidence a proportionate interest in the rights to receive Revenues under the Indenture and shall be ratably secured with all Outstanding Certificates and in respect of all Revenues, and shall be ranked pari passu with such Outstanding Certificates and with Additional Certificates that may be executed and delivered in the future, if any. 27 THE TOWN General The Town is located in Eagle County (the "County ") on Interstate Highway 70. It is located 8 miles west of the Town of Vail and the Vail Ski Resort, 114 miles west of Denver, and 23 miles east of the Town of Eagle. The Town encompasses approximately eight and one- quarter square miles of land. In addition to the Town's role as a center of commercial and retail development for the area, the Town serves as a support base for the Vail, Beaver Creek and Arrowhead resorts, with a number of various types of accommodations for visitors to the area. The Town also is a major residential community within the County. The Town provides a full range of municipal services, including: police protection, the construction and maintenance of parks, streets and roads and other infrastructure; recreational amenities and cultural activities and events; community planning and zoning; and general administrative services. Town Powers Pursuant to the Charter, and except as limited by the State Constitution, the Town has the power of self - government and home rule, as well as all municipal powers established by the constitution and laws of the State. Among those powers, rights and liabilities specifically, but not exclusively, enumerated in the Charter are the following: perpetual succession; to own, possess, and hold real and personal property; to succeed to all rights and liabilities, to acquire all benefits, and to assume payment of all bonds, obligations, and indebtedness of the Town; to sue and defend, plead and be impleaded in all courts and places and in all matters and proceedings; to purchase, receive, hold and enjoy, or sell and dispose of real and personal property; and to have and use a common seal. Governing Body Mayor and Town Council. The Town operates under a council- manager form of government whereby all powers and authority of the Town are vested in an elected Town Council. The Town Council consists of seven members, one of whom serves as mayor and one of whom serves as mayor pro -tem. The Town Council meets on the second and fourth Tuesdays of the month. Special meetings are held at the written request of the Mayor or any four council members. All Town Council members are elected at large for staggered four -year terms at general municipal elections. General municipal elections are conducted on the first Tuesday after the first Monday in November of even numbered years. Any vacancies which occur are filled by the remaining council members who choose by majority vote a duly qualified person to fill such vacancy, until a successor can be elected at the next general municipal election. At the first Town Council meeting following each general Town election, the Town Council elects one of its members to serve as Mayor and one to serve as Mayor Pro -Tem. The Mayor is the executive head of the Town and presiding officer of the Town Council. The Mayor has no power to vote except in cases of tie vote of the members of the Town Council present and voting. The mayor pro -tem is elected by the Town Council from the Town Council membership to serve in the event of absence or disability of the Mayor. 28 The members of the Town Council, their principal occupations, and terms of office follow. Name and Office Ronald C. Wolfe, Mayor Brian Sipes, Mayor Pro Tern Richard Carroll, Council Member David Dantas, Council Member Kristi Ferraro, Council Member Amy Phillips, Council Member Buz Reynolds, Council Member The Colorado constitution limits Council members to two terms (beginning with terms which commenced after January 1, 1995). Town voters may vote to eliminate, extend or change the term limits imposed by the constitution. The Town Council currently has no plans to ask its voters to change the term limits. Enactment of Ordinances. All official action of the Town Council must be done through the passage of ordinances, resolutions or motions. All legislative enactments must be in the form of ordinances; all other actions may be in the form of resolutions or motions. Generally, no ordinance may be enacted until it has been introduced and approved on first reading and published and finally approved on second reading. The effective date of all ordinances is seven days after public notice following final passage. An exception to the above is made for any ordinance which declares therein that it is an emergency ordinance immediately necessary for the preservation of the public peace, health, or safety. Such an ordinance may be enacted at the meeting at which it is introduced by unanimous minus one vote of Town Council members present and without publication or second reading on passage. The emergency ordinance, takes effect eight days after passage and is required to be published for informational purposes after final passage. The Charter reserves the right of the Town's electors to propose ordinances to the Town Council by means of an initiatory petition procedure and to subject certain ordinances to reconsideration by the Town Council or a referendum vote through the submission of a petition. Administration The Town Council- manager form of government vests responsibility for Town operations in the Town Manager and Town staff. The Town Manager is appointed by the Town Council and serves for an indefinite term at the pleasure of the Town Council. During his tenure in office, the Town Manager must reside within the Town's boundaries. The staff functions through the Town's various departments which are under the direction of the Town Manager. Information about the Town Manager and the Assistant Town Manager - Finance staff is set forth below. [TOWN- Please review /update as necessary. These are pretty old. Also need bio for the Town Attorney] Town Manager. Mr. Larry Brooks was appointed Town Manager in November, 2002. Prior to his appointment, Mr. Brooks served as the Town's Assistant Town Manager and First Elected/ Term Principal Occupation Appointed Expires Retired engineer 2002 2010 Architect/land planner 2002 2010 Communication hardware executive 2006 2010 Owner - construction company 2006 2010 Lawyer 2004 2012 Magazine account executive 2004 2012 Owner- development contractor 2008 2012 The Colorado constitution limits Council members to two terms (beginning with terms which commenced after January 1, 1995). Town voters may vote to eliminate, extend or change the term limits imposed by the constitution. The Town Council currently has no plans to ask its voters to change the term limits. Enactment of Ordinances. All official action of the Town Council must be done through the passage of ordinances, resolutions or motions. All legislative enactments must be in the form of ordinances; all other actions may be in the form of resolutions or motions. Generally, no ordinance may be enacted until it has been introduced and approved on first reading and published and finally approved on second reading. The effective date of all ordinances is seven days after public notice following final passage. An exception to the above is made for any ordinance which declares therein that it is an emergency ordinance immediately necessary for the preservation of the public peace, health, or safety. Such an ordinance may be enacted at the meeting at which it is introduced by unanimous minus one vote of Town Council members present and without publication or second reading on passage. The emergency ordinance, takes effect eight days after passage and is required to be published for informational purposes after final passage. The Charter reserves the right of the Town's electors to propose ordinances to the Town Council by means of an initiatory petition procedure and to subject certain ordinances to reconsideration by the Town Council or a referendum vote through the submission of a petition. Administration The Town Council- manager form of government vests responsibility for Town operations in the Town Manager and Town staff. The Town Manager is appointed by the Town Council and serves for an indefinite term at the pleasure of the Town Council. During his tenure in office, the Town Manager must reside within the Town's boundaries. The staff functions through the Town's various departments which are under the direction of the Town Manager. Information about the Town Manager and the Assistant Town Manager - Finance staff is set forth below. [TOWN- Please review /update as necessary. These are pretty old. Also need bio for the Town Attorney] Town Manager. Mr. Larry Brooks was appointed Town Manager in November, 2002. Prior to his appointment, Mr. Brooks served as the Town's Assistant Town Manager and Director of Municipal Services. Mr. Brooks also served as the Acting Town Manager from June 26, 1996 to January 5, 1997. Prior to his employment with the Town, Mr. Brooks had fourteen years of experience with other Colorado municipal governments. Mr. Brooks has a Bachelor of Science degree and a Masters degree from Colorado State University and spent two years as a teacher early in his career. Assistnat Town Manager - Finance. Mr. Scott Wright became the Assistant Town Manager - Finance in He was hired as the Town's Finance Director in 1996. Prior to joining the Town, Mr. Wright was the Chief Financial Officer for the Town of Northglenn, Colorado, and the Chief Accountant for the Irving Independent School District in Irving, Texas. Mr. Wright also has been employed as a Certified Public Accountant performing audits of local governments in Texas and Colorado. Mr. Wright has more than 25 years of experience in local government finance and is a Certified Public Finance Officer. Mr. Wright has a Bachelor of Arts degree in Accounting from the University of Northern Iowa. Town Employees, Benefits and Pension Matters Employees. The Town currently employs 89 full -time employees and 87 part- time employees. No Town employees are represented by a union or other collective bargaining unit. The Town considers its employee relations to be good. Benefits. [REVIEW/UPDATE] The Town offers its full -time employees a comprehensive health, dental, and vision insurance plan, a long -term disability plan, term life insurance, an employee assistance program, a cafeteria plan, and a wellness program. The Town is self- insured for employee health and dental care which is administered by a third- party. See Note 9 in the audited financial statements attached hereto as Appendix A for more information. [Any issues to report ?] Retirement Plans. The Town maintains retirement plans for its full -time and part - time, temporary and seasonal employees. Those plans are briefly described below. See Note 6 in the audited financial statements attached hereto as Appendix A for further information about the Town's retirement plans, including vesting schedules. Full -time Employees. The Town maintains two single - employer, defined contribution pension plans for full -time employees: (1) the Town of Avon Police Officers Money Purchase Pension Plan, and (2) the Town of Avon General Employee Money Purchase Pension Plan. These plans are administered by Wells Fargo Institutional Trust Group. A defined contribution pension plan has terms that specify how contributions to an individual's account are to be determined rather than the amount of pension benefits the individual is to receive. In a defined contribution plan, the pension benefits a participant will receive depend only on the amount contributed to the participant's account, earnings on investments of those contributions, and forfeitures of other participant's benefits that may be allocated to the participant's account. All full -time employees are required to participate in one of the above retirement plans upon employment with the Town. The type of plan that an employee participates in is dependent on the type of employee (police officer or general government employee). Town ordinance provides that both the employee and the Town contributes an amount equal to 11% of 30 the employee's base salary each month. For 2008 and 2009, the Town contributed $618,678 and $626,624, respectively, to these plans. Part -time, Temporary and Seasonal Employees. In 1997, the Town adopted a PTS Retirement Plan (the "PTS plan") administered by the ICMA Retirement Corporation. The PTS plan is designed specifically for employees who are part-time, temporary, or seasonal, and is defined as a Social Security replacement retirement plan. The PTS plan allows participants to defer federal and state income taxes on savings until retirement. The PTS plan requires a minimum contribution of 7.5% of an employee's salary per plan year. The Town elected to have 3.75% contributed by the employee and 3.75% matched by the Town. Employees also have the option to contribute additional amounts. For 2008 and 2009, the Town contributed $35,155 and $33,966, respectively, to the PTS Plan. [OPEB TO BE DISCUSSED] Town Insurance Coverage The Town is exposed to various risks of loss related torts; thefts of, damage to or destruction of assets; errors or omissions; injuries to employees; and natural disasters. In order to insure against such risks, the Town is a member of the Colorado Intergovernmental Risk Sharing Agency ( "CIRSA "), a joint self - insurance pool created by intergovernmental agreement of more than 200 municipalities and special districts to provide property, general and automobile liability and public officials coverage to its members. CIRSA is governed by a seven member Board elected by and from its members; the Town does not exercise any oversight or control over CIRSA. [Please provide CIRSA coverages page] Coverage is provided through pooling of self - insured losses and the purchase of excess insurance coverage. CIRSA has a legal obligation for claims against its members to the extent that funds are available in its annually established loss fund and that amounts are available from insurance providers under excess specific and aggregate insurance contracts. Losses incurred in excess of loss funds and amounts recoverable from excess insurance are direct liabilities of the participating members. CIRSA has indicated that the amount of any excess losses would be billed to members in proportion to their contributions in the year such excess occurs, although it is not legally required to do so. The Town has not been informed of any excess losses that may have been incurred by the pool. The Town's annual contribution to CIRSA amounted to $184,872 for 2009. The Town continues to carry commercial insurance coverage for other risks of loss including workers compensation. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. In the opinion of the Assistant Town Manager - Finance, the Town's insurance policies provide adequate insurance protection for the Town. Capital Improvement Plan [The Town has adopted a Comprehensive Plan as a policy document used to guide land use decisions. Included in this plan are goals and policies grouped into nine categories: land use; community and economic development; housing; community facilities and 31 services; transportation, parking and circulation; environment; parks, recreation and open space; community image and design; and communication.] Each year, the Town adopts a five -year capital improvement plan ( "CIP ") in conjunction with its budget process; however, only the portion of the CIP for the current budget year is incorporated in the budget and funds appropriated. The CIP is a planning document; projects included in the CIP can be added, removed or revised at the discretion of the Town Council. The CIP includes the following project categories: facilities; land and land improvements; roads and streets; utilities; recreation; water fund projects; communication and technology; strategic planning and other. The CEP is further divided among non - discretionary and discretionary projects. [The Town intends to fund projects contained in the CIP as part of the Improvement Project.] The Town is in the process of adopting the CIP for 2011 -2015. [NOTE: the CIP won't be finalized until the end of September] The non - discretionary portion of the CIP includes $6,762,000 in projects for 2011 -2015. This includes $3,262,000 in expenditures in 2011 for forest service land acquisition, Metcalf Road drainage and bicycle climb lane, and annual paving projects, among other projects. The non - discretionary CIP also includes planned expenditures of $1,325,000 in 2012, $875,000 in 2013; $775,000 in 2014 and $525,000 in 2015. The discretionary portion of the CEP includes $5,610,000 in projects for 2011 -2015. This includes $1,630,000 of expenditures in 2011, primarily consisting of transit and public works improvements. The discretionary CEP also includes planned expenditures of $930,000 in 2012, $2,200,000 in 2013; $750,000 in 2014 and $100,000 in 2015. The Town funds its CEP with primarily from proceeds of its real estate transfer tax; other sources include grants, intergovernmental funds, interfund transfers, developer fees. Intergovernmental Contracts and Agreements The Town is a party to numerous intergovernmental agreements in order to efficiently provide services to its residents. Certain of those agreements are discussed generally below. The Village (at Avon) Annexation. General. On October 13, 1998, the Town entered into an Annexation and Development Agreement (the "Village Agreement ") with the owners of approximately 1,790 acres of property (the "Village Owners ") immediately east of the Town known as The Village (at Avon) (the "Village "). On October 13, 1998, the Town Council approved the annexation of the Village. According to the Village Agreement, the Village Owners anticipated developing the Village for retail and other commercial uses, single - family and multi - family residential uses, hotel uses, recreational uses and open space. The Village Agreement also established an indemnification procedure if either Wal -Mart or Town Market (both significant Town Sales Tax payers) relocate their current stores from their locations in the Town to a site within the Village, and due to such fact, the Town collects less net Sales Tax revenue after such relocation than the Town collected prior to the relocation. In such a circumstance, the applicable Village District agrees to remit to the Town the amount of the shortfall, subject to certain limitations (such as an adjustment for inflation). This indemnification procedure began in July, 2003 when Wal -Mart relocated to the Village. 32 The Village Agreement anticipated that the owners of the Village would form at least two metropolitan districts to finance and construct public improvements, including roads and an Interstate 70 interchange, in the Village. Traer Creek Metropolitan District ( "Traer ") [OTHERS ?] was formed in . The Village Agreement required Traer to remit $2 million (in 10 equal annual installments) to the Town, as well as certain financial requirements that have been satisfied. The Village Agreement also provided that the Village Owners and/or Traer will make certain other contributions toward the repayment of certain Town expenses, and will dedicate various parcels of property for public road, school and other uses. The Village Agreement also contemplates that the Town will provide all municipal services to the Village, including but not limited to police protection, snow removal and road maintenance, building code enforcement, bus transportation services and other services equivalent to those provided to any other area of the Town (but excluding park and recreation services, water supply and sanitary sewer services and snow removal and road maintenance on certain roads in the Village). The Town need not provide fire protection services and water supply services if such services are provided by Traer. In exchange for these services, on September 15 of each year, the Town delivers to Traer an invoice for providing the services for the following calendar year calculated based on a formula contained in the Village Agreement. The Town agrees to give a credit on the invoice described in the previous paragraph for certain ad valorem property taxes paid by property owners in the Village. To the extent this property tax credit is less than the amount of the Town's invoice, Traer agreed to pay the difference over 12 monthly installments commencing on January 1 of the applicable year; however, such payments are subordinate to Traer's obligations to make debt service payments on its own obligations. To the extent the property tax credit is greater than the amount of the Town's invoice, the Town may retain the difference to be used in its sole discretion. Villages Litigation. On October 14, 2008, the Town filed suit against Traer Creek Metropolitan District (the "District ") in Eagle County, Colorado District Court. The Town asserted in its Complaint that the District has breached certain financial and other obligations under the Annexation and Development Agreement (Agreement). In particular, the financial assertions by the Town state that the District (a) failed to make a $200,000 payment due to the Town on September 1, 2008; (b) failed to make $1,168,678.14 in sales tax shortfall payments due to the Town; and (c) failed to make $629,753.45 in municipal services payments due to the Town. The Town's Complaint asks the court to, among other things: (1) to enter a judgment declaring that the District is in default of its obligations to the Town under the Agreement; (2) enter a money judgment in favor of the Town and against the District in the total amount owed by the District to the Town under the Agreement, plus interest; (3) enter judgment declaring the rights and obligations of the Town and the District under the Agreement, including: (a) the Town's right to discontinue providing Municipal Services while amounts owing by the District to the Town remain unpaid; (b) that the Town is entitled to the accrual and payment of interest on amounts owed by the District to the Town; and (c) that the Town is relieved, in whole or in part, of its obligation to issue a credit or waiver of retail sales taxes, use taxes, real estate transfer taxes and accommodations/lodging taxes on transactions within the District. In a Counterclaim filed on February 2, 2010, the District denied the allegations of the Town's Complaint and asserted counterclaims alleging that the Town, not the District, has breached the Agreement. The Town has established an allowance for bad debts totaling $1,683,784 as of December 31, 2009. 33 [MENTION UPDATED STATUS PER 9/17/10 NEWSPAPER ARTICLE] Upper Eagle Regional Water Authority. The Town is a participant in the Upper Eagle Regional Water Authority, which was formed by intergovernmental agreement by numerous municipal and quasi - municipal corporations located in the County to supply water and developer water resources and facilities. See Note 11 in the audited financial statements attached hereto as Appendix A for further information. Avon Urban Renewal Authority The Avon Urban Renewal Authority ( "AURA ") is a separate body corporate created by the Town in June 2007 for the purpose of undertaking certain urban renewal activities within the Town. The boundaries of the AURA are coterminous with the boundaries of the Town. The Town Council serves as the governing body (the "Board ") for the AURA Authority and Town administrative staff serve as its administrators. The Town Center West Urban Renewal Project Area (the "Urban Renewal Project Area ") encompasses approximately 225 acres of land within the Town. The Urban Renewal Project Area generally includes properties located in the commercial area known as Avon Town Center West. The Urban Renewal Project Area is bounded on the south by the Eagle River and the Denver and Rio Grande Western Railroad tracks, on the west by West Beaver Creek Boulevard, on the east by Avon Road, and on the north by the southern Interstate 70 right -of- way. The Town Council determined that the area comprising the Urban Renewal Project Area was a blighted area in accordance with statutory criteria. On August 14, 2007, the Town Council adopted the Town Center West Area Urban Renewal Plan dated August 2007 (the "Plan ") approving one or more urban renewal projects in the Urban Renewal Project Area. The AURA has identified an initial urban renewal project for the Urban Renewal Project Area (the "Project "); the Project is more particularly defined in "SOURCES AND USES OF FUNDS- -The Project." The Plan describes a series of activities designed to eliminate existing blight, including, among other activities, creating a new "main street" in the existing pedestrian mall right -of -way, linking pedestrian, bicycle and automobile circulation to and through the Avon Town Center, Nottingham Park, Confluence and the Eagle River, developing a multi -modal transit center, establishing public plazas and other gathering spaces for community interaction and social events, and developing a mix of uses that provides residential and lodging bed base supported by community and guest commercial uses. The Plan also authorizes the use of property tax increment financing for a period of 25 years following adoption of the Plan. 34 CITY FINANCIAL OPERATIONS Budget and Appropriation Process The Town's fiscal year begins on January 1 and ends December 31. Pursuant to the Charter, prior to the start of each fiscal year the Town Manager presents a recommended budget and long -range capital program to the Town Council. The budget provides a complete financial plan of all municipal funds and activities for the coming fiscal year and contains the proposed financial policies for the Town for the next fiscal year, including an explanation of any major changes in policy, expenditures and revenues from the prior year, a description of all expenditures and revenues, and a summary of the Town's debt position and estimated surpluses or deficits in the various funds. A public hearing on the proposed budget and capital program is held following the publication of a notice indicating that copies of the proposals are on file for public inspection. The budget is adopted by the Town Council, either with or without amendment, by resolution. The Charter provides that the budget must be adopted on or before the last day established by law for certification of the next year's tax levy to the County. If the Town Council fails to do so, the amounts appropriated for the current fiscal year are deemed adopted for the following fiscal year on a monthly basis until a budget is adopted. The adoption constitutes an appropriation of the amounts specified therein and a levy of the property tax contained therein. Supplemental appropriations may be made during the fiscal year upon the certification by the Town Manager that revenues in excess of those estimated in the budget are available. As a part of its annual budget process, the Town Council amends its current -year budget to realize changes in revenues and expenditures. The Town Council may, by emergency ordinance, make appropriations to meet public emergencies affecting life, health, property, or the public peace. The Town Council may authorize the issuance of emergency notes which may be renewed from time to time and must be paid no later than the last day of the fiscal year following that in which the emergency appropriation was made. The adopted budget must provide for a levy on real and personal property which will result in the collection of revenues in the amount necessary to be raised from ad valorem property taxes for municipal purposes. Following adoption of the budget, the Town Council certifies to the County Assessor the amount to be levied on taxable property within the Town for collection by the County Treasurer. Financial Statements General. The Charter requires that an independent audit be made of all Town accounts at least annually, and more frequently if deemed necessary by the Town Council. The "Colorado Local Government Audit Law" requires that an annual audit be made of the Town's financial affairs at the end of the fiscal year. The audited financial statements must be filed with the Town Council by June 30th of each year and with the State auditor 30 days thereafter. Failure to comply with this requirement to file an audit report may result in the withholding of the Town's property tax revenues by the County Treasurer pending compliance. The Town's audited basic financial statements for the year ended June 30, 2009, are attached to this Official Statement as Appendix A. Such financial statements represent the 35 most current audited financial information available for the Town. Audited financial statements for prior years are available from the sources listed in "INTRODUCTION -- Additional Information." Awards. The Town received the Certificate of Achievement for Excellence in Financial Reporting awarded by the Government Finance Officers Association of the United States and Canada ( "GFOA ") for the fiscal year ended December 31, 2008. [2009 received ?] The Town has received the GFOA award for consecutive years. The Certificate is the highest form of recognition in the area of government finance reporting and is awarded to governmental entities whose comprehensive annual financial reports are judged to conform substantially to program standards. Summary of Historical Revenues, Expenditures and Changes in Fund Balances Set forth in the following table is a five -year comparative statement of revenues, expenses and changes in fund balance for the General Fund. Information about the Town's General Fund is provided to illustrate the primary sources of available Town revenues; however, not all of those revenues are available to pay Base Rentals (or Additional Rentals) under the Lease. See "TOWN DEBT STRUCTURE. " The information in these tables should be read together with the Town's audited basic financial statements for the year ended December 31, 2009, and the accompanying notes, which are included as Appendix A hereto. General Fund - History of Revenue, Expenditures and Changes in Fund Balance 1) Expenditures Current: General government 1,742,961 Year Ended December 31, 2,563,047 2,995,920 2005 2006 2007 2008 2009 Revenues 697,820 Public safety 1,667,280 1,879,582 2,203,803 Taxes $7,575,986 $8,120,389 $8,710,829 $9,551,368 $8,312,273 Licenses and permits 249,032 827,890 419,292 245,793 124,130 Intergovernmental 748,223 905,476 929,153 912,323 931,941 Charges for services 2,074,070 2,763,774 2,351,475 2,063,065 1,509,475 Fines and forfeitures 53,448 73,854 84,290 131,525 129,530 Investment earnings 320,995 471,099 827,234 576,823 134,892 Miscellaneous 421,858 220,975 266,842 327,893 343,515 Total revenues 1,1443,612 13,383,457 13,589,115 13,808,790 11,485,756 Expenditures Current: General government 1,742,961 2,119,128 2,563,047 2,995,920 2,974,410 Community development 532,290 912,855 902,634 823,902 697,820 Public safety 1,667,280 1,879,582 2,203,803 2,628,330 2,511,717 Public works 2,583,517 2,747,362 3,263,935 3,596,509 3,464,437 Recreation and culture 2,024,614 2,168,903 2,483,910 2,579,779 2,375,945 Total expenditures 8,550,662 9,827,830 11,417,329 12,624,440 12,024,329 Excess of revenues over (under) expenditures 2,892,950 3,555,627 2,171,786 1,184,350 (538,573) Other Financing Sources (Uses) Transfers in 50,000 80,000 200,000 311,361 518,314 Transfers out (1,628,609) (2,633,416) (2,154,469) (2,388,904) (1,952,843) Sale of capital assets 1,001 130,621 170,156 -- -- Capital lease proceeds 74,403 1,504 -- -- we Total Other Financing Sources (Uses) (1,503,205) (2,421,291) (1,784,313) (2,077,544) (1,434,529) Net change in fund balances 1,389,745 1,134,336 387,473 (893,194) (1,973,102) Fund balances - Beginning of year 4,383,872 5,773,617 6,907,953 7,295,426 6,402,232 Fund balances -End of Year $ •773,617 $ $ $fib $iazam (1) GAAP Basis. Source: Derived from the Town's CAFRs for the years ended December 31, 2005 through 2009. [TO BE DISCUSSED: Budget summaries and comparisons. If Town does not prepare interim financial statements, I likely will add a 2010 budgeted column to the table above.] Management's Discussion of Material Trends [TO COME FROM TOWN] 37 CURRENT SOURCES OF AVAILABLE REVENUE General Although no particular funds or sources of revenue are pledged to make payments under the Lease, the Town currently intends to budget, appropriate and pay the Base Rentals (and Additional Rentals, if any) allocable to the Certificates from its General Fund. Notwithstanding the foregoing, such Base Rentals and Additional Rentals may be budgeted, appropriated and paid from any of the Town's available funds in the future. The Town overall financial operations, budgeting process and information and historical General Fund financial statement comparisons are discussed in "COUNTY FINANCIAL INFORMATION." Contractual or Legal Limitations on Available Revenues The Town currently has outstanding the 1999 Bonds in the aggregate principal amount of $1,670,000; those bonds are outstanding through December 1, 2024, and have a first lien on the Town's Sales Tax revenues. See "CITY DEBT STRUCTURE -- Revenue Bonds." Sources of General Fund Revenues The Town derives General Fund revenues from the sources described generally below. The major sources of General Fund revenues (Sales Tax and ad valorem property tax) are described in more detail below. Sales Tax. The Town's Sales Tax, constitutes the primary source of General Fund revenues. In 2009, Sales Tax revenues accounted for approximately 38.9% of General Fund revenues. The Sales Tax includes payments in lieu of taxes due from Traer pursuant to the Villages Agreement. See "Sales Tax Revenues" below for a discussion of the imposition and collection of the Town's Sales Tax. Ad Valorem Property Taxes. Another major source of General Fund revenue is the ad valorem property tax levied pursuant to State law against all taxable property within the Town. Ad valorem property tax revenues accounted for approximately 30.9% of General Fund Revenue in 2009. See "Selected Ad Valorem Property Tax Information" below for a discussion of collection of the Town's ad valorem property taxes. Other. The Town also receives General Fund revenues from several additional sources including: real estate transfer taxes (approximately 15.3% of General Fund revenues in 2009); the accommodations tax (approximately 5.0% of General Fund revenues in 2009); franchise fees; licenses and permits; fines and forfeits; charges for services; interest income; and miscellaneous sources. Several intergovernmental revenue sources are also included in the General Fund; among these are highway users' taxes, specific ownership taxes, motor vehicle registration fees, cigarette taxes and road and bridge revenues. [Discuss including detailed information about REM Section 3.12.110 says it must be deposited to public improvements fund for the purpose of capital improvements] i Sales Tax Revenues [ENTIRE SECTION UNDER REVIEW BY S &H] Authority for Imposition of The Sales Tax. The Town's sales tax (the "Sales Tax "), which has been in effect since 1982, is imposed pursuant to the Charter and is collected in accordance with Chapter 3.08 of the Avon Municipal Code (the "Code "). The Sales Tax imposed by the Town is currently 4 %. The Town does not impose a use tax. State statutes limit the total sales or use taxes imposed by the State, any county, and any Town or town in any locality in the State to 7 %, except that this limitation does not preclude a county sales or use tax at a rate not to exceed 1 %; however, this limitation does not apply to home rule towns such as the Town. The total sales tax rate currently in effect within the Town consists of the Town's 4% Sales Tax, the State's 3% sales and use tax and the County's 1.5% sales tax, for a total sales tax in the Town of 8.5 %. Description of the Sales Tax. The Sales Tax is levied on the purchase price paid or charged upon all sales, purchases, rentals, and leases of tangible personal property at retail (including food) and on specific services as provided in the Town's ordinance which imposed the Sales Tax (the "Sales Tax Ordinance "). "Sale" or 'Purchase" is defined in the Sales Tax Ordinance to include installment and credit sales and exchanges of property as well as the sale of tangible personal property for money. Specific services subject to the Sales Tax include: telephone, gas, electric, and steam services; the leasing of tangible personal property; and the furnishing of rooms or accommodations to a person who for a consideration uses, possesses, or has the right to use or possess any room in a hotel, motel, condominium, guest house, or like accommodation for less than 30 consecutive days. Transactions and Items Subject to the Sales Tax - Generally. The Sales Tax is imposed on all taxable transactions in the Town, subject to certain stated exemptions including exemptions for: sales to the United States government and to the State and political subdivisions thereof in their governmental capacities; sales of cigarettes; sales to charitable organizations; sales which the Town is prohibited from taxing under the constitution or laws of the United States, the State or the Charter; sales made to nonprofit schools; medical supplies, prosthetic devices and therapeutic devices; sales of certain construction and building materials if picked up by the purchaser or if the purchaser gives a building permit number to the retailer; transfers of tangible personal property without consideration to a vendee outside the Town for use outside the Town in selling products normally sold at wholesale by the transferor; all commodities taxed under the provisions of Article 27, Title 39, Colorado Revised Statutes; the sale of special fuel as defined in Section 201(8) of Article 27, Title 39, Colorado Revised Statutes, used for the operation of farm vehicles on farms and ranches; sales to and purchases of tangible personal property by a manufacturer, which property becomes an ingredient or component of the product or service which is manufactured; cable television services; certain tangible personal property which becomes a constituent part of a food product intended for sale at retail for human consumption; sales and purchases of electricity, coal, gas, fuel oil, coke, and nuclear fuel for use in processing, manufacturing, mining, refining, irrigation, construction, telecommunication services, and transportation services, and all industrial uses; sales and purchases of refractory materials and carbon electrodes used in manufacturing iron and steel for profit and sales and 39 purchases of inorganic chemicals used in processing vanadium - uranium ores; sales and purchases of newsprint and printer's ink for use by newspapers and commercial printers; sales and purchases of newspapers; sales of tangible personal property purchased or sold within the Town if delivered outside the Town to the purchaser; and the purchase of food by food stamps or government vouchers. For a complete discussion of exemptions from the Sales Tax, reference is made to Section 3.08.040 of the Code. The Sales Tax is imposed on the purchaser at retail sale. The vendor must collect and remit the Sales Tax to the Town under penalties for failure to do so as described in Section 3.08.100 of the Code. The vendor also has the duty to keep three years' of records such as may be necessary to determine the amount of Sales Tax for the collection of which the vendor is liable. Notwithstanding any other provisions of the Sales Tax Code, there shall be granted to each person owing the tax on sales consummated within The Village (at Avon) a temporary tax credit against collection of the tax equal to the amount of any retail sales fee paid by or on behalf of such person. The amount of the credit shall not exceed the amount of the tax. No such credit shall be granted subsequent to termination of the collection of the retail sales fee pursuant to the annexation and development agreement for The Village (at Avon). Neither the ability of the Town to grant the temporary tax credit nor the termination of the credit shall constitute a tax increase, the imposition of a new tax or a tax policy change. Manner of Collection and Administration. The Town's Finance Director or his designee (the "Finance Director ") is responsible for the proper administration of the Sales Tax and, pursuant to Chapter 3.08, has adopted rules and regulations for such administration. A Sales Tax license is required for any person to engage in the business of selling tangible personal property at retail or providing services in the Town that are taxable under Chapter 3.08 of the Code. The Finance Director issues such licenses and may revoke the license of any vendor who is found by him to have violated any provision of the Sales Tax Ordinances. The Town reports that 862 businesses (including 62 utility vendors) currently remit Sales Tax to the Town. Every vendor is liable and responsible for the payment of an amount equal to 4.0% of all sales made by him of tangible personal property or services subject to the Sales Tax. Vendors make a return of sales to the Finance Director before the twentieth day of each month for the preceding calendar month and remit 4.0% of such sales with the return. In the case of a dispute between a vendor and a purchaser regarding the exemption from the taxation of any sale or service, the vendor must collect and remit the Sales Tax and the purchaser must make application to the Finance Director for a refund. The Finance Director examines such application for refund, which is to be submitted within 90 days after the purchase, and gives notice to the applicant of his decision thereon. An applicant has the right to a hearing if he disagrees with the decision of the Finance Director. The burden of proving that sales or services are exempt from the Sales Tax is on the person making the claim. Claims also may be made for refund in the event tax moneys were paid in error. Such claims for refund must be made within three years of the date of purchase. 40 Enforcement and Remedies for Collection of Delinquent Taxes. The Sales Tax constitutes a first and prior lien on the tangible personal property and business fixtures of or used by any vendor under lease, title retention contract, or other contractual arrangement, except stock of goods sold or for sale. If a retailer neglects or refuses to make a return in payment of the Sales Tax or to pay any Sales Tax as required by Chapter 3.08 of the Code within five business days of the date due, then the Finance Director makes an estimate, based on available information, of the amount of Sales Tax due for the period for which the retailer is delinquent and adds to such estimate a penalty in an amount equal to $15, or 10% of the delinquency, whichever is greater, and interest on such delinquent taxes at the rate of 1 /z% per month. Written notice of the estimated Sales Tax, penalty and interest is sent by the Finance Director by first -class mail to the last known address of the delinquent taxpayer. Such notice requires payment of the amount due on appeal to the Finance Director for a hearing and after the Finance Director's final decision may appeal to the District Court. The written decision of the Finance Director is mailed to the petitioner following the hearing and becomes final 30 days after such mailing unless proceedings are begun for review by the courts. If any taxes, penalty or interest imposed and shown due by returns are not paid within fifteen days after they are due, the Finance Director mails a delinquency notice to the taxpayer, setting forth the amount of the tax, penalties and interest due and that the Town claims a first and prior lien on the taxpayer's tangible property (with certain exceptions). At any time when taxes due are unpaid the Finance Director may issue a warrant for the levy, seizure and sale of real and personal property of the taxpayer, as provided in Section 3.08.240 of the Code. The Finance Director may, for good cause shown, waive penalties and interest. The Town also may use other available remedies for the collection of Sales Taxes. Town Collection Procedure. The Town uses a lockbox collection system for its Sales Tax. Customers send their sales tax payments and returns to a lockbox located in Denver; FirstBank of Avon staff process the returns /money received each day then forward by e-mail to an Accounting Assistant and Finance Manger a list of paying customers and the amount that was paid. The FirstBank staff then couriers the returns, envelopes and deposit slip to FirstBank of Avon where the Finance staff picks up them up. The Town's Accounting Assistant then enters all returns into a sales tax software system. The deposit and reports from the entered batch are forwarded to the Finance Manager who reviews for correctness and posts to the Town's accounting software. Delinquency letters are processed automatically by the software system and mailed by the Accounting Assistant. If not paid, second letters are processed by the sales tax software and mailed. If not paid, the customer is cited into Avon Municipal Court. History of Sales Tax Collections. The following table provides a history of Sales Tax collections. [QUERY: Are these cash basis or accrual basis ?] 41 History of Sales and Use Tax Collections(1) 2010(3) 2,993,363 (1) [Includes the payments in lieu of taxes pursuant to the Villages Agreement.] (2) Unaudited. Represents collections through July 2010. These collections represent a 0.21% decline from collections in the same seven -month period in 2009. Source: The Town. Monthly Comparisons of Sales and Use Tax Collections. The following tables present a comparison between the Town's Sales Tax receipts for the twelve -month periods ending July 31, 2010 and July 31, 2009, and (2) monthly Town Use Tax receipts for the twelve- month periods ending July 31, 2010 and July 31, 2009. [CASH BASIS OR ACCRUAL? i.e., are revenues are accounted for in the month received or in the month of the underlying sale ?]. As shown in the following table, as of July 31, 2010, the Town has experienced a 5.9% decrease in Sales Tax revenues as compared to the same twelve -month period for the previous year. Comparison of Monthly Sales Tax Collections Month Sales Tax Percent Year Collections(2) Change 2005 $ 4,676,450 -- 2006 4,999,786 6.91% 2007 5,573,213 11.47 2008 5,729,460 2.80 2009 5,080,090 (11.33) 2010(3) 2,993,363 (1) [Includes the payments in lieu of taxes pursuant to the Villages Agreement.] (2) Unaudited. Represents collections through July 2010. These collections represent a 0.21% decline from collections in the same seven -month period in 2009. Source: The Town. Monthly Comparisons of Sales and Use Tax Collections. The following tables present a comparison between the Town's Sales Tax receipts for the twelve -month periods ending July 31, 2010 and July 31, 2009, and (2) monthly Town Use Tax receipts for the twelve- month periods ending July 31, 2010 and July 31, 2009. [CASH BASIS OR ACCRUAL? i.e., are revenues are accounted for in the month received or in the month of the underlying sale ?]. As shown in the following table, as of July 31, 2010, the Town has experienced a 5.9% decrease in Sales Tax revenues as compared to the same twelve -month period for the previous year. Comparison of Monthly Sales Tax Collections Month Twelve -Month Period Ending July 31, 2010 Current Month Cumulative Twelve -Month Period Ending July 31, 2009 Current Month Cumulative Percent Change Current Month Cumulative August $ 374,966 $ 374,966 $ 428,297 $ 428,297 (12.5)% (12.5)% September 350,585 725,551 466,732 895,029 (24.9) (18.9) October 286,412 1,011,963 365,209 1,260,238 (21.6) (19.7) November 281,696 1,293,659 338,385 1,598,623 (16.8) (19.1) December 786,702 2,080,361 794,328 2,392,951 (1.0) (13.1) January 465,019 2,545,380 552,648 2,945,599 (15.9) (13.6) February 554,742 3,100,122 516,350 3,461,949 7.4 (10.5) March 620,937 3,721,059 536,913 3,998,862 15.6 (6.9) April 309,937 4,030,996 319,834 4,318,696 (3.1) (6.7) May 242,830 4,273,826 267,961 4,586,657 (9.4) (6.8) June 377,920 4,651,746 396,066 4,982,723 (4.6) (6.6) July 421,976 5,073,722 409,956 5,392,679 2.9 (5.9) Source: The Town (unaudited). Principal Sales Tax Generators in the Town. Set forth in the following table are the principal Sales Tax generators in the Town for 2009. Because of the confidential nature of the gross sales of such entities, the identities of the vendors cannot be divulged under penalty of law. The Town expects that these principal generators of Sales Tax will be substantially similar for 2010. 42 Principal Generators of Sales Tax Revenues - 2009 (1) Based upon total Sales Tax collections of $5,080,090 in 2009. Source: The Town. In addition, the following categories as a group (not individual taxpayers) generated more than 10% of Sales Tax revenues in 2009: Grocery, Specialty, Health - 26 %; Restaurants/Bars - 17 %; Accommodations - 12 %; and Sporting Goods Retail/Rental - 12 %. Selected Ad Valorem Property Tax Information Property Subject to Taxation. Subject to the limitations imposed by Article X, Section 20 of the State constitution (the Taxpayers Bill of Rights or "TABOR," described in "LEGAL MATTERS -- Certain Constitutional Limitations "), the Town Council has the power to certify to the Board of County Commissioners (the "Commissioners ") a levy for collection of ad valorem taxes against all taxable property within the Town. Property taxes are uniformly levied against the assessed valuation of all property subject to taxation by the Town. Both real and personal property are subject to taxation, but there are certain classes of property which are exempt. Exempt property includes, but is not limited to: property of the United States of America; property of the State and its political subdivisions; public libraries; public school property; property used for charitable or religious purposes; nonprofit cemeteries; irrigation ditches, canals, and flumes used exclusively to irrigate the owner's land; household furnishings and personal effects not used to produce income; intangible personal property; inventories of merchandise and materials and supplies which are held for consumption by a business or are held primarily for sale; livestock; agricultural and livestock products; and works of art, literary materials and artifacts on loan to a political subdivision, gallery or museum operated by a charitable organization. The State Board of Equalization supervises the administration of all laws concerning the valuation and assessment of taxable property and the levying of property taxes. Assessment of Property. Taxable property is first appraised by the County's assessor (the "County Assessor ") to determine its statutory "actual" value. This amount is then multiplied by the appropriate assessment percentage to determine each property's assessed value. The mill levy of each taxing entity is then multiplied by this assessed value to determine the amount of property tax levied upon such property by such taxing entity. Each of these steps in the taxation process is explained in more detail below. 43 Amount Percent of Total Type of Business Collected Collections(1) Grocery $1,208,382 23.79% Sporting Goods Retail/Rental 410,771 8.09 Accommodations 340,748 6.71 General Retail 267,870 5.27 Liquor Store 219,421 4.32 Restaurant 165,702 3.26 Total $2,612,894 51.43% (1) Based upon total Sales Tax collections of $5,080,090 in 2009. Source: The Town. In addition, the following categories as a group (not individual taxpayers) generated more than 10% of Sales Tax revenues in 2009: Grocery, Specialty, Health - 26 %; Restaurants/Bars - 17 %; Accommodations - 12 %; and Sporting Goods Retail/Rental - 12 %. Selected Ad Valorem Property Tax Information Property Subject to Taxation. Subject to the limitations imposed by Article X, Section 20 of the State constitution (the Taxpayers Bill of Rights or "TABOR," described in "LEGAL MATTERS -- Certain Constitutional Limitations "), the Town Council has the power to certify to the Board of County Commissioners (the "Commissioners ") a levy for collection of ad valorem taxes against all taxable property within the Town. Property taxes are uniformly levied against the assessed valuation of all property subject to taxation by the Town. Both real and personal property are subject to taxation, but there are certain classes of property which are exempt. Exempt property includes, but is not limited to: property of the United States of America; property of the State and its political subdivisions; public libraries; public school property; property used for charitable or religious purposes; nonprofit cemeteries; irrigation ditches, canals, and flumes used exclusively to irrigate the owner's land; household furnishings and personal effects not used to produce income; intangible personal property; inventories of merchandise and materials and supplies which are held for consumption by a business or are held primarily for sale; livestock; agricultural and livestock products; and works of art, literary materials and artifacts on loan to a political subdivision, gallery or museum operated by a charitable organization. The State Board of Equalization supervises the administration of all laws concerning the valuation and assessment of taxable property and the levying of property taxes. Assessment of Property. Taxable property is first appraised by the County's assessor (the "County Assessor ") to determine its statutory "actual" value. This amount is then multiplied by the appropriate assessment percentage to determine each property's assessed value. The mill levy of each taxing entity is then multiplied by this assessed value to determine the amount of property tax levied upon such property by such taxing entity. Each of these steps in the taxation process is explained in more detail below. 43 Determination of Statutory Actual Value. The County Assessor annually conducts appraisals in order to determine, on the basis of statutorily specified approaches, the statutory "actual" value of all taxable property within the county as of January 1. Most property is valued using a market approach, a cost approach or an income approach. Residential property is valued using the market approach, and agricultural property, exclusive of building improvements thereon, is valued by considering the earning or productive capacity of such lands during a reasonable period of time, capitalized at a statutory rate. The statutory actual value of a property is not intended to represent its current market value, but, with certain exceptions, is determined by the County Assessor utilizing a "level of value" ascertained for each two -year reassessment cycle from manuals and associated data published by the State Property Tax Administrator for the statutorily- defined period preceding the assessment date. Real property is reappraised by the County Assessor's office every odd numbered year. The statutory actual value is based on the "level of value" for the period one and one -half years immediately prior to the July 1 preceding the beginning of the two -year reassessment cycle (adjusted to the final day of the data - gathering period). For example, values for levy year 2008 (collection year 2009) were based on an analysis of sales and other information for the period January 1, 2005 to June 30, 2006. The following table sets forth the State Property Appraisal System for property tax levy years 2005 through 2010: Collection Levy Value Year Year Calculated As Of 2006 2005 July 1, 2004 2007 2006 July 1, 2004 2008 2007 July 1, 2006 2009 2008 July 1, 2006 2010 2009 July 1, 2008 2011 2010 July 1, 2008 Based on the Market Period Jan. 1, 2003 to June 30, 2004 Jan. 1, 2003 to June 30, 2004 Jan. 1, 2005 to June 30, 2006 Jan. 1, 2005 to June 30, 2006 Jan. 1, 2007 to June 30, 2008 Jan. 1, 2007 to June 30, 2008 The County Assessor may consider market sales from more than one and one -half years immediately prior to July 1 if there were insufficient sales during the stated market period to accurately determine the level of value. Oil and gas leaseholds and lands, producing mines and other lands producing nonmetallic minerals are valued based on production levels rather than by the base year method. Public utilities are valued by the State Property Tax Administrator based upon the value of the utility's tangible property and intangibles (subject to certain statutory adjustments), gross and net operating revenues and the average market value of its outstanding securities during the prior calendar year. Determination of Assessed Value. Assessed valuation, which represents the value upon which ad valorem property taxes are levied, is calculated by the County Assessor as a percentage of statutory actual value. The percentage used to calculate assessed valuation differs depending upon the classification of each property. Residential Property. To avoid extraordinary increases in residential real property taxes when the base year level of value is changed, the State constitution requires the Colorado General Assembly to adjust the assessment rate of residential property for each year in UJI which a change in the base year level of value occurs. This adjustment is constitutionally mandated to maintain the same percentage of the aggregate statewide valuation for assessment attributable to residential property which existed in the previous year (although, notwithstanding the foregoing, TABOR prohibits any valuation for assessment ratio increase for a property class without prior voter approval). Pursuant to the adjustment process described above, the residential assessment rate is adjusted every two years, resulting in the following history of residential assessment rates since levy year 1989: 15.00% of statutory actual value (levy years 1989 -90); 14.34% of statutory actual value (levy years 1991 -92); 12.86% of statutory actual value (levy years 1993 -94); 10.36% of statutory actual value (levy years 1995 -96); 9.74% of statutory actual value (levy years 1997 -98 and 1999 - 2000); 9.15% of statutory actual value (levy years 2001 -02); and 7.96% of statutory actual value (levy years 2003 -04, 2005 -06 and 2007 -08). In December 2009, the Colorado Legislative Council (the research division of the Colorado General Assembly) projected that the residential assessment rate will remain at 7.96% for levy years 2009 -12. This projection is only an estimate, however, and is subject to change. Non - residential property. All non - residential taxable property (including the commercial property in the Town), with certain specified exceptions, is assessed at 29% of its statutory actual value. Producing oil and gas property is generally assessed at 87.5% of the selling price of the oil and gas. Protests, Appeals, Abatements and Refunds. Property owners are notified of the valuation of their land or improvements, or taxable personal property and certain other information related to the amount of property taxes levied, in accordance with statutory deadlines. Property owners are given the opportunity to object to increases in the statutory actual value of such property, and may petition for a hearing thereon before the County Board of Equalization. Upon the conclusion of such hearings, the County Assessor is required to complete the assessment roll of all taxable property and, no later than August 25th each year, prepare an abstract of assessment therefrom. The abstract of assessment and certain other required information is reviewed by the State Property Tax Administrator prior to October 15th of each year and, if necessary, the State Board of Equalization orders the County Assessor to correct assessments. The valuation of property is subject to further review during various stages of the assessment process at the request of the property owner, by the State Board of Assessment Appeals, the State courts or by arbitrators appointed by the Commissioners. On the report of an erroneous assessment, an abatement or refund must be authorized by the Commissioners; however, in no case will an abatement or refund of taxes be made unless a petition for abatement or refund is filed within two years after January 1 of the year in which the taxes were levied. Refunds or abatements of taxes are prorated among all taxing entities which levied a tax against the property. Statewide Review. The Colorado General Assembly is required to cause a valuation for assessment study to be conducted each year in order to ascertain whether or not county assessors statewide have complied with constitutional and statutory provisions in determining statutory actual values and assessed valuations for that year. The final study, including findings and conclusions, must be submitted to the Colorado General Assembly and the State Board of Equalization by September 15th of the year in which the study is conducted. Subsequently, the Board of Equalization may order a county to conduct reappraisals and 45 revaluations during the following property tax levy year. Accordingly, the Town's assessed valuation may be subject to modification following any such annual assessment study. Homestead Property Tax Exemption. The Colorado Constitution provides property tax exemptions for qualifying senior citizens (adopted in 2000) and for disabled veterans (adopted in 2006). The senior citizen provision provides that for property tax collection years 2007 and later (except that the exemption was suspended for collection years 2009, 2010 and 2011), the exemption is equal to 50% of the first $200,000 of actual value of residential real property that is owner - occupied if the owner or his or her spouse is 65 years of age or older and has occupied such residence for at least 10 years. The disabled veterans provision provides that for property tax collection years 2008 and later, the same exemption is available to homeowners who have served on active duty in the U.S. Armed Forces and who are rated 100% permanently disabled by the federal government due to a service - connected disability. The State is required to reimburse all local governments for the reduction in property tax revenue resulting from these exemptions; therefore, it is not expected that this exemption will result in the loss of any property tax revenue to the District. There is no assurance, however, that the State reimbursement will be received in a time period which is sufficient to replace the reduced property tax revenue. Taxation Procedure. The County Assessor is required to certify to the Town the assessed valuation of property subject to the Town's mill levy no later than August 25th of each year. Subject to the limitations of TABOR, based upon the valuation certified by the County Assessor, the Town Council computes a rate of levy which, when levied upon every dollar of the valuation for assessment of property subject to the Town's property tax, and together with other legally available Town revenues, will raise the amount required by the Town in its upcoming fiscal year. The Town subsequently certifies to the Commissioners the rate of levy sufficient to produce the needed funds. Such certification must be made no later than December 15th of the property tax levy year for collection of taxes in the ensuing year. The property tax rate is expressed as a mill levy, which is the rate equivalent to the amount of tax per one thousand dollars of assessed valuation. For example, a mill levy of 25 mills would impose a $250 tax on a parcel of property with an assessed valuation of $10,000. The Commissioners levy the tax on all property subject to taxation by the Town. By December 22nd of each year, the Commissioners must certify to the County Assessor the levy for all taxing entities within the County. If the Commissioners fail to so certify, it is the duty of the County Assessor to extend the levies of the previous year. Further revisions to the assessed valuation of property may occur prior to the final step in the taxing procedure, which is the delivery by the County Assessor of the tax list and warrant to the County's treasurer (the "County Treasurer "). Property Tax Collections. Taxes levied in one year are collected in the succeeding year. Thus, taxes certified in December 2008 are being collected in 2009. Taxes are due on January 1st in the year of collection; however, they may be paid in either one installment (not later than the last day of April) or in two equal installments (not later than the last day of February and June 15th) without interest or penalty. Interest accrues on unpaid first installments at the rate of 1% per month from March 1 until the date of payment unless the whole amount is paid by April 30. If the second installment is not paid by June 15, the unpaid installment will bear interest at the rate of 1% per month from June 16 until the date of payment. Notwithstanding the foregoing, if the full amount of taxes is to be paid in a single payment after 46 the last day of April and is not so paid, the unpaid taxes will bear penalty interest at the rate of 1% per month accruing from the first day of May until the date of payment. The County Treasurer collects current and delinquent property taxes, as well as any interest or penalty, and after deducting a statutory fee for such collection, remits the balance to the Town on a monthly basis. The payments to the Town must be made by the tenth of each month, and shall include all taxes collected through the end of the preceding month. All taxes levied on property, together with interest thereon and penalties for default, as well as all other costs of collection, constitute a perpetual lien on and against the property taxed from January 1st of the property tax levy year until paid. Such lien is on a parity with the tax liens of other general taxes. It is the County Treasurer's duty to enforce the collection of delinquent real property taxes by tax sale of the tax lien on such realty. Delinquent personal property taxes are enforceable by distraint, seizure, and sale of the taxpayer's personal property. Tax sales of tax liens on realty are held on or before the second Monday in December of the collection year, preceded by a notice of delinquency to the taxpayer and a minimum of four weeks of public notice of the impending public sale. Sales of personal property may be held at any time after October 1st of the collection year following notice of delinquency and public notice of sale. There can be no assurance that the proceeds of tax liens sold, in the event of foreclosure and sale by the County Treasurer, would be sufficient to produce the amount required with respect to property taxes levied by the Town and property taxes levied by overlapping taxing entities, as well as any interest or costs due thereon. Further, there can be no assurance that the tax liens will be bid on and sold. If the tax liens are not sold, the County Treasurer removes the property from the tax rolls and delinquent taxes are payable when the property is sold or redeemed. When any real property has been stricken off to the County and there has been no subsequent purchase, the taxes on such property may be determined to be uncollectible after a period of six years from the date of becoming delinquent and they may be canceled by the Commissioners after that time. Overlap with Tax Increment Authorities. Colorado law allows the formation of public highway authorities. Pursuant to statute, the board of directors of a public highway authority is entitled to designate areas within the authority's boundaries as "value capture areas" to facilitate the financing, construction, operation or maintenance of highways constructed by the authority; an authority is entitled to capture a portion of the property taxes in such an area to support these purposes. No public highway authority value capture area currently exists within the Town. If a value capture area is implemented in the future, it is impossible to predict the terms of the plan, including whether it would negatively impact the Town's property tax revenues. Similarly, the State law allows the formation of urban renewal authorities and downtown development authorities in areas which have been designated by the governing bodies of municipalities as blighted areas. With respect to the property included in the boundaries of such districts (or within an urban renewal authority or additional downtown development authorities created in the future and subject to a renewal plan), the assessed valuation of such property that is taxable does not increase beyond the amount existing in the year prior to the adoption of the plan (other than by means of the general reassessment). Any increase above the "base" amount is paid to the applicable authority. See "History of Town Assessed Valuation" and "Ad Valorem Property Tax Data" below for information on the assessed valuation attributable to the existing increment districts. As described in "THE TOWN- -Avon Urban 47 Renewal Authority," the Town formed AURA in 2007. The property tax increment will be in effect for 25 years from formation of AURA (i.e., through 2032). Ad Valorem Property Tax Data A five year history of the Town's certified assessed valuations and mill levies is set forth in the following table. History of Assessed Valuations and Mill Levies for the Town Assessed Values Mill Levies Levy/ Gross Current Tax Collection Net Assessed Percent Year Valuation Change 2005/2006 $168,906,640 -- 2006/2007 171, 296,170 1.4% 2007/2008 226,501,610 32.2 2008/2009 226,144,240 (0.2) 2009/2010 245,913,790 8.7 2010/2011 245,448,980 (0.2) Assessed Value Gross Current Tax Collection Year Attributable to Assessed General Debt Total Tax Increment Valuation Fund Fund Levy -0- $168,906,640 8.956 4.383 13.339 -0- 171,296,170 8.956 4.331 13.287 -0- 226,501,610 8.956 3.315 12.271 $10,266,600 236,410,840 8.956 2.436 11.392 17,517,540 263,431,330 8.956 2.252 11.208 17,417,890 262,866,870 n/a(2) n/a(21 n/a(2) (1) These figures represent 2010 preliminary assessed valuations and are subject to change on or before December 10, 2010. (2) The 2010 mill levy (for collection of taxes in 2011) will not be certified until December 2010. Sources: State of Colorado, Department of Local Affairs, Division of Property Taxation, Annual Reports, 2005 -2009; and Eagle County Assessor's Office. The following table sets forth the history of the Town's ad valorem property tax collections for the time period indicated. Property Tax Collections in the Town [NOTE: no numbers match CAFR p. 1051 Levy /Collection Taxes Current Tax Collection Year Levied' Collection (2) Rate 2004/2005 $2,107,735 $2,105,655 99.90% 2005/2006 2,253,046 2,259,912 100.30 2006/2007 2,276,012 2,275,124 99.96 2007/2008 2,779,401 2,664,713 5'l 2008/2009 2,576,235 2,555,208 99.18 2009/2010(31 2,756,201 2,703,936 98.10 (1) Levied amounts do not reflect abatements or other adjustments and are net of all revenue attributable to various tax increment financing districts in the following amounts for the respective levy years: $116,957 for 2009; and $196,337 for 2009. (2) The County Treasurer's collection fee has not been deducted from these amounts. Figures do not include interest, fees and penalties. (3) Collections through July 31, 2010. Sources: State of Colorado, Department of Local Affairs, Division of Property Taxation, Annual Reports, 2004 -2009; and Eagle County Treasurer's Office. 48 The following table sets forth the assessed valuation of specific classes of real and personal property within the Town based upon the Town's 2010 preliminary assessed valuation. As shown below, residential property accounts for the largest percentage of the Town's assessed valuation, and therefore it is anticipated that owners of residential property will pay the largest percentage of ad valorem property taxes levied by the Town. 2010 Preliminary Assessed Valuation of Classes of Property in the Town Property Class Residential Commercial Vacant State Assessed Agricultural TOTAL Total Percentage of Total Assessed Valuation(l) Assessed Valuation $138,870,200 52.83% 97,622,710 37.14 23,241,510 8.84 3,115,630 1.18 16,820 0.01 $ 62 100.00% (1) The assessed valuation total includes $17,417,890 of assessed valuation attributable to a tax increment financing district located within the Town; therefore, the total assessed valuation figure given here differs from the assessed valuation figure set forth elsewhere in the Official Statement. The values herein are subject to change on or before December 10, 2010. Source: Eagle County Assessor's Office. Based upon the most recent information available from Eagle County, the following table represents the ten largest taxpayers within the Town. No independent investigation has been made of and consequently there can be no representation as to the financial conditions of the taxpayers listed below or that such taxpayers will continue to maintain their status as major taxpayers in the Town. Ten Largest Taxpayers in the Town - 2010 Preliminary (1) Based on a preliminary Certified assessed valuation of $245,448,980. The values herein are subject to change on or before December 10, 2010 Source: Eagle County Treasurer's Office. 49 Percentage of 2010 Preliminary Total Assessed Taxpayer Name Assessed Valuation Valuation(l) Points of Colorado Inc. $8,124,210 3.31% Traer Creek -Wort LLC 7,508,370 3.06 Qwest Corp. 7,433,400 3.03 Riverfront Village Hotel LLC 5,942,280 2.42 Traer Creek -L2 LLC 5,412,970 2.20 Avon Partners H LLC 5,398,100 2.20 Traer Creek -HD LLC 5,382,540 2.19 Chapel Square Ventures LP 5,296,510 2.16 CSC Land LLC 4,295,840 1.75 Ad Mountain Center LLC 3,412,810 1.39 TOTAL $ 8.207.030 23.71% (1) Based on a preliminary Certified assessed valuation of $245,448,980. The values herein are subject to change on or before December 10, 2010 Source: Eagle County Treasurer's Office. 49 Mill Levies Affecting Property Owners Within the Town In addition to the Town's ad valorem property tax levy, owners of property within the Town are obligated to pay taxes to other taxing entities in which their property is located. As a result, property owners within the Town's boundaries may be subject to different mill levies depending upon the location of their property. The following table sets forth sample mill levies that may be imposed on certain properties within the Town and is not intended to portray the mills levied against all properties within the Town. Sample Mill Levies Affecting Property Owners Within the Town - 2009 Taxing Entity Eagle County School District RE-50J Eagle County Eagle River Fire Protection District Colorado Mountain College Eagle Valley Library District Avon Metropolitan District Eagle County Health Service District Eagle River Water and Sanitation District Colorado River Water Conservation District Total Overlapping Sample Mill Levy The Town Total Sample Mill Levy Mill Levy(l) 19.402 8.499 5.550 3.997 2.750 2.535 1.780 0.795 0.166 45.474 11.208 56.682 (1) One mill equals 1 /10 of one percent. Mill levies certified in 2009 result in the collection of property taxes in 2010. Source: Eagle County Assessor's Office. Estimated Overlapping General Obligation Debt In addition to the general obligation indebtedness of the Town, other taxing entities overlap or partially overlap the boundaries of the Town. The following table sets forth those taxing entities which currently pay their general obligation debt directly from a mill levy assessed against property within the Town boundaries. The table reflects the outstanding general obligation debt of the other taxing entities as of the date of this Official Statement. 50 Estimated Overlapping General Obligation Indebtedness Entity") (Z) Avon Metropolitan District Eagle County School District RE -50J Eagle River Water & Sanitation District Eagle Valley Library District Total 2010 Preliminary Assessed Valuation (3) $ 192,647,160 3,286,764,597 2,562,648,670 2,216,884,030 Outstanding General Obligation Debt $ 230,000 169,300,000 7,057,998 2,235,000 Outstanding General Obligation Debt Attributable to the Town Percent (4) Amount 100.00% $ 230,000 7.47 12,646,710 9.58 676,156 11.07 247,415 (1) The following entities also overlap with the Town but they have no reported general obligation debt outstanding: Avon General Improvement District; Avon Station Metropolitan District; Colorado Mountain College; Colorado River Water Conservation District; Confluence Metropolitan District; Eagle County; Eagle County Health Service District; Eagle River Fire Protection District; Gates Metropolitan District; Minturn Cemetery District; Mountain Vista Metropolitan District; Traer Creek Metropolitan District; and Village Metropolitan District. (2) Eagle -Vail Metropolitan District has general obligation debt of $7,000,000; however, no percentage is attributable to the Town due to the insignificant assessed value of the portion that overlaps. (3) All values are subject to change on or before December 10, 2010. The 2010 assessed valuation figure that will be certified by the County Assessor is for collection of ad valorem property taxes in 2011. (4) The percentage of each entity's outstanding debt chargeable to Town property owners is calculated by comparing the assessed valuation of the portion overlapping the Town to the total assessed valuation of the overlapping entity. To the extent the Town's assessed valuation changes disproportionately with the assessed valuation of the overlapping entities, the percentage of debt for which Town property owners are responsible will also change. Sources: Eagle County Assessor's Office; and individual taxing entities. 51 TOWN DEBT STRUCTURE General Indebtedness and other obligations of the Town may be incurred as provided in the Town Charter and Article X, Section 20 of the Colorado Constitution (the Taxpayers Bill of Rights or "TABOR "). See "LEGAL MATTERS - Certain Constitutional Limitations." The Town Council has the power to contract indebtedness on behalf of the Town for any municipal purpose and may issue the following securities to evidence such indebtedness: (a) short-term notes; (b) general obligation bonds; (c) revenue bonds; (d) special or local improvement bonds; and (e) any other legally recognized form of security (including capital lease obligations). TABOR requires the Town to hold an election prior to the issuance of most securities, with the exception of short-term notes and annually appropriated lien obligations. In addition, the Town may not issue any bonds or other evidence of indebtedness payable in whole or in part from the proceeds of general property taxes and/or sales taxes and/or municipal taxes, or to which the full faith and credit of the Town is pledged except by ordinance adopted and approved by two -thirds vote of the entire Town Council. General Obligation Debt Limitation on Indebtedness. Pursuant to the Charter, the total outstanding indebtedness of the Town may not exceed 25% of the assessed valuation of taxable property within the Town as determined by the County Assessor for the last preceding assessment or the sum of $15,000,000, whichever amount is greater. The Charter specifically excludes from the limitation any indebtedness for the acquisition or extension of a water -works system, municipal storm sewer or sanitary sewer systems; short-term notes; special or local improvement securities; securities payable from the revenues of an income - producing system, utility, project, or any other capital improvement; or from Town sales or use taxes; and long -term installment contracts other than real property acquisitions, rentals or leaseholds. Based upon the preliminary Certified assessed value of $262,866,870 (which includes the assessed value attributable to the AURA), the Town's debt limit is $65,716,718. Outstanding General Obligation Debt. As of October 1, 2010, the Town has outstanding $3,215,000 of general obligation bonds, consisting of its General Obligation Refunding Bonds, Series 2004. Revenue Obligations The Town Council has the power to issue revenue bonds for any public purpose payable from the revenues derived from the operation of facilities to be acquired, constructed, or improved with the proceeds of the bonds, or payable in whole or part from available proceeds of the Sales Tax. As of October 1, 2010, the Town currently has outstanding $1,670,000 of its Sales Tax Revenue Refunding Bonds, Series 1999. Special Assessments The Town Council has the power to issue special assessment bonds secured by assessments against the property benefited by the improvements constructed with bond proceeds. The Town does not have any special assessment bonds outstanding. 52 Short -Term Borrowing and Other Obligations The Town may borrow funds which must mature before the close of the fiscal year in which the money is borrowed, in anticipation of the correction of taxes or other revenues. No short-term borrowing has been requested or authorized in the last five years. The Town also records a long -term liability for compensated absences. See Notes 1 and 5 in the audited financial statements attached hereto as Appendix A for further information. Contracts and Leases General. The Town Council has the authority to enter into installment or lease option contracts for the purchase of land, buildings, equipment and other property for governmental or proprietary purposes. The term of any such contract may not extend over a period greater than the estimated useful life of the property or equipment. The Town Council may provide for the payment of such obligations by the imposition of a tax levy imposed on property within the Town, by rates, tolls or service charges imposed for the use of such property, or by any other available municipal revenues. The obligation created under such leases or contracts does not constitute an indebtedness of the Town. Lease - Purchase Agreements. The Town is a party to a 1998 Lease Purchase Agreement with the Finance Authority; the rental payments due under the 1998 Lease support the repayment of the Refunded Certificates. Capital Leases. The Town is a party to numerous capital equipment leases; those leases are renewable on an annual basis at the option of the Town. Upon final payment, title to the leased assets passes to the Town. See Note 5 in the audited financial statements attached hereto as Appendix A for a description of the Town's current capital equipment leases, including terms and amounts due. [Any new leases in 2010 ?] [DOES THE TOWN HAVE SIGNIFICANT OPERATING LEASES ?] Component Unit and Conduit Obligations Avon Metropolitan District. Effective May 31, 1998, the Avon Metropolitan District was dissolved pursuant to an Agreement for Dissolution adopted by both the Avon Metropolitan District and the Town and executed with the District Court of Eagle County. According to the Agreement, the District continues in existence for the sole purpose of securing payment in full of the principal and interest of existing indebtedness. The Town Council was appointed to act as the District Board of Directors in order to set mill levies as necessary to pay the outstanding indebtedness. A new debt service fund was created by the Town in order to account for the payment of principal and interest on the district's existing indebtedness, which consists of the District's outstanding 1991 general obligation refunding bonds. Other than its responsibility to set mill levies and apply the funds received to payment of the bonds, the Town has no responsibility to pay debt service on the district's bonds. 53 Avon Urban Renewal Authority. The AURA has outstanding certain variable rate revenue bonds. See Note 5 for a further description of those bonds. The AURA's bonds are obligations of the AURA payable solely from the property tax increment generated in the applicable plan area; the Town has no obligation to pay debt service on the AURA bonds. Conduit Obligations. The Town has issued several series of conduit bonds on behalf of private entities in order to provide affordable housing options within the Town. The Town is not obligated in any manner for repayment of the conduit obligations. See Note 5 in the audited financial statements attached hereto as Appendix A for a further description of the currently outstanding conduit obligations. 54 ECONOMIC AND DEMOGRAPHIC INFORMATION This portion of the Official Statement contains general information concerning the economic and demographic conditions in and surrounding the Town. It is provided so that prospective investors will be aware of factors which may affect future development and growth of the Town. The information presented was obtained from the sources indicated, and the Town makes no representation as to the accuracy or completeness of data obtained from sources other than the Town. Population and Age Distribution Population. The following table sets forth a history of the populations of the Town, Eagle County and the State. Between 2000 and 2009, the Town's population increased 27.8 %, the County's population increased 31.4% and the State's population increased approximately 18.0 %. Population (1) The Town was incorporated in February 1978. (2) Preliminary. Sources: Figures for 1970 through 2000 were obtained from the United States Department of Commerce, Bureau of Census; figures for 2005 -2009 are estimates provided by the Colorado State Demography Office, and are subject to periodic revision. 55 Town of Percent Eagle Percent Percent Year Avon(l) Change County Change Colorado Change 1970 n/a -- 7,498 -- 2,209,596 -- 1980 640 -- 13,320 77.7% 2,889,735 30.8% 1990 1,798 180.9% 21,928 64.6 3,294,394 14.0 2000 5,561 209.3 41,659 90.0 4,301,261 30.6 2005 6,759 -- 49,421 -- 4,731,799 -- 2006 6,778 0.3 50,926 3.1 4,827,387 2.0 2007 6,838 0.9 52,532 3.2 4,919,884 1.9 2008 6,919 1.2 54,044 2.9 5,011,390 1.9 2009(2) 7,108 2.7 54,721 1.3 5,073,919 1.2 (1) The Town was incorporated in February 1978. (2) Preliminary. Sources: Figures for 1970 through 2000 were obtained from the United States Department of Commerce, Bureau of Census; figures for 2005 -2009 are estimates provided by the Colorado State Demography Office, and are subject to periodic revision. 55 Age Distribution. The following table sets forth a comparative age distribution profile for the Town, Eagle County, the State and the nation as of January 1, 2010. Age Distribution Source: 0 2010 The Nielsen Company, SiteReports Income The following table sets forth annual per capita personal income levels for Eagle County, the State and the United States. Per capita personal income levels in Eagle County have consistently exceeded levels in the State and the United States during the period shown. Per Capita Personal Income Year Eagle County 2004 $43,861 Percent of Population 46,499 2006 Town of 2007 52,929 Age Avon Eagle County Colorado United States 0 -17 24.1% 24.1% 24.2% 24.3% 18 -24 7.2 7.3 9.2 9.7 25 -34 25.2 19.0 14.9 13.3 35-44 17.5 18.4 14.3 13.6 45 -54 13.6 15.7 14.9 14.4 55 -64 8.2 10.4 11.6 11.5 65 -74 3.3 3.8 6.1 7.0 75 and Older 0.9 1.3 4.8 6.2 Source: 0 2010 The Nielsen Company, SiteReports Income The following table sets forth annual per capita personal income levels for Eagle County, the State and the United States. Per capita personal income levels in Eagle County have consistently exceeded levels in the State and the United States during the period shown. Per Capita Personal Income Year Eagle County 2004 $43,861 2005 46,499 2006 50,954 2007 52,929 2008 52,684 2009) n/a Colorado United States $36,652 $33,881 38,555 35,424 40,899 37,698 42,449 39,392 43,021 40,166 41,344 39,138 Source: United States Department of Commerce, Bureau of Economic Analysis. The following two tables reflect Median Household Effective Buying Income ( "EBI ") and also the percentage of households by EBI Groups. EBI is defined as "money income" (defined below) less personal tax and nontax payments. "Money income" is defined as the aggregate of wages and salaries, net farm and nonfarm self - employment income, interest, dividends, net rental and royalty income, Social Security and railroad retirement income, other retirement and disability income, public assistance income, unemployment compensation, Veteran Administration payments, alimony and child support, military family allotments, net winnings from gambling, and other periodic income. Deductions are made for personal income taxes (federal, state and local), personal contributions to social insurance (Social Security and federal retirement payroll deductions), and taxes on owner - occupied nonbusiness real estate. The resulting figure is known as "disposable" or "after -tax" income. 56 Median Household Effective Bu dung Income Year Town of Avon Eagle County 2006 n/a $58,373 2007 n/a 58,210 2008 $56,568 59,648 2009 57,297 63,133 2010 62,686 60,960 Colorado United States $45,594 $40,529 45,477 41,255 44,711 41,792 45,490 42,513 45,543 43,252 Source: © The Nielsen Company, SiteReports, 2009 -2010. (Prior years provided by Nielsen Claritas- informed publication: Trade Dimensions International Inc. — Demographics USA — County Edition, 2006 - 2008.) Percent of Households by Effective Buying Income Groups - 2010 Effective Buying Town of 21.1% Income Group Avon Eagle County Under $24,999 11.3% 10.9% $25,000 - 49,999 27.8 28.5 $50,000 - 74,999 21.6 24.3 $75,000 - 99,999 15.6 16.6 $100,000 - 149,999 11.0 11.1 $150,000 or More 12.7 8.6 Source: © 2010 The Nielsen Company, SiteReports Employment Colorado United States 21.1% 26.2% 34.4 32.1 20.8 20.1 12.0 11.1 7.5 6.5 4.2 4.0 The following table presents information on employment within Eagle County, the State and the United States, for the time period indicated. 57 Labor Force and Percent Unemnloved (1) Figures for the County and the State are not seasonally adjusted. (2) Due to the seasonal nature of much of the employment in the County, the monthly estimates are not necessarily representative of overall employment in the County. (3) Preliminary. Source: State of Colorado, Department of Labor and Employment, Labor Market Information, Colorado Areas Labor Force Data and U.S. Department of Labor, Bureau of Statistics. The following table sets forth the number of individuals employed within selected Eagle County industries which are covered by unemployment insurance. In 2009, the largest employment sector in Eagle County was accommodation and food services (comprising approximately 23.4% of the county's work force), followed, in order, by construction; arts, entertainment, and recreation; retail trade; and government. For the twelve -month period ended December 31, 2009, total average employment in Eagle County decreased (10.0)% as compared to the same period ending December 31, 2008, while average weekly wages decreased (3.7)% during the same time period. 58 Eagle County(') Colorado(') United States Labor Percent Labor Percent Percent Year Force Unemployed Force Unemployed Unemployed 2005 28,670 3.9% 2,588,382 5.1% 5.1% 2006 30,176 3.4 2,653,333 4.4 4.6 2007 31,281 2.9 2,695,834 3.9 4.6 2008 31,794 3.6 2,727,616 4.9 5.8 2009 30,192 7.4 2,701,026 7.7 9.3 Month of June (2) 2009 29,342 8.8% 2,744,325 8.6% 9.5% 20 10(3) 29,078 9.1 2,672,429 8.3 9.5 (1) Figures for the County and the State are not seasonally adjusted. (2) Due to the seasonal nature of much of the employment in the County, the monthly estimates are not necessarily representative of overall employment in the County. (3) Preliminary. Source: State of Colorado, Department of Labor and Employment, Labor Market Information, Colorado Areas Labor Force Data and U.S. Department of Labor, Bureau of Statistics. The following table sets forth the number of individuals employed within selected Eagle County industries which are covered by unemployment insurance. In 2009, the largest employment sector in Eagle County was accommodation and food services (comprising approximately 23.4% of the county's work force), followed, in order, by construction; arts, entertainment, and recreation; retail trade; and government. For the twelve -month period ended December 31, 2009, total average employment in Eagle County decreased (10.0)% as compared to the same period ending December 31, 2008, while average weekly wages decreased (3.7)% during the same time period. 58 Averaize Number of Employees Within Selected Industries - Eagle County Industry Agriculture, Forestry and Fisheries Mining Utilities Construction Manufacturing Wholesale Trade Retail Trade Transportation & Warehousing Information Finance & Insurance Real Estate, Rental & Leasing Professional & Technical Services Management of Companies/Enterprises Administrative & Waste Services Educational Services Health Care & Social Assistance Arts, Entertainment & Recreation Accommodation & Food Services Other Services Non - classifiable Government Totals (2) 2005 2006 2007 2008 2009 56 67 58 61 55 8 9 14 14 16 54 63 64 65 64 4,209 4,721 5,073 4,910 3,501 406 387 389 380 284 371 387 399 410 392 3,054 3,203 3,445 3,466 3,100 484 502 509 441 378 380 389 412 396 346 553 578 584 579 572 1,617 1,651 1,681 1,588 1,436 1,316 1,352 1,428 1,393 1,125 151 195 150 151 133 1,400 1,593 1,739 1,754 1,473 136 143 134 130 128 1,544 1,685 1,735 1,814 1,859 3,191 3,320 3,247 3,266 3,259 6,799 6,845 6,942 7,412 6,807 901 904 1,131 1,184 1,099 n/a(') n/a(l) n/a(l) 3 n/a(l) 2,486 2,588 2.709 2,841 3.015 (1) Due to confidentiality, figures were not released. (2) Figures may not equal totals when added, due to the rounding off of averages or the inclusion in the total of employees that were not disclosed in individual classifications. Source: State of Colorado, Department of Labor and Employment, Labor Market Information, Quarterly Census of Employment and Wages (QCEW). A selection of some of the largest employers in Eagle County and in the Town of Avon are set forth in the following two tables. No independent investigation of the stability or financial condition of the employers listed hereafter has been conducted; therefore, no representation can be made that these employers will continue to maintain their status as major employers in Eagle County and the Town. 59 Selected Major Employers in Eagle County Estimated Number of Employees(') Ski Off Season Employer Product or Service Season and Summer Vail Resorts, Inc. (2) Ski resorts 5,280 1,940 Eagle County School District Public education 910 -- Vail Valley Medical Center (3) Health care 655 The Ritz Carlton Hotel, Bachelor Gulch Hotel 550 350 Eagle County (4) Government 500 500 Vail Cascade Resort & Spa Hotel 525 350 Hyatt Regency at Beaver Creek Hotel 400 335 Wal -mart Supercenter Retail 400 380 Gallegos Corporation Construction 375 500 Sonnenalp Resort of Vail Hotel and golf course 350 370 (1) As of February 2010. Employers in the tourism industry have provided estimated employee figures based on the ski season, which runs from mid - November through mid -April and the off - season/summer season which generally runs from mid -April through mid- November. Unless new functions or facilities are added, estimated numbers remain much the same over several years. (2) Vail Resorts, Inc. ( "Vail Resorts ") owns and operates two ski resorts located in Eagle County: Vail Mountain and Beaver Creek Mountain. Vail Resorts operates several different lines of business within Eagle County in connection to its Mountain operations, such as lift tickets, ski schools, tubing, ice skating, dining, lodging, retail and rentals. Other revenue includes owning and operating three professional golf courses. Vail Resorts owns /manages a number of luxury and resort hotels in Eagle County including The Lodge at Vail, The Arrabelle at Vail Square, The Vail Marriott Mountain Resort and Spa, The Pines Lodge and the Osprey at Beaver Creek. (3) Includes medical center operations at seven locations spanning a 70 -mile distance across Eagle and Summit Counties. (4) Include full-time, part-time, seasonal, and temporary employees. Sources: Vail Valley Chamber of Commerce; and individual employers. .1 Principal Employers in the Town of Avon Employer Westin Riverfront Resort & Spa Wal -Mart Restaurant Avondale Home Depot City Market Town of Avon Eagle River Water & Sanitation Sheraton Mountain Vista Christie Lodge Finnegan's Wake Irish Pub LLC (1) Reflects 2009 estimates. Product or Service Resort lodging Retail - general Restaurant Retail — Retail - grocery Local government Utility Lodging Lodging Restaurant Estimated Number of Employees(') 205 200 140 133 115 104 92 87 76 71 Source: Individual employers and Department of Labor as reported in the Town of Avon's 2009 Comprehensive Annual Financial Report. Retail Sales State. The following table sets forth annual retail sales figures for Eagle County and the Retail Sales (in thousands) Year Town of Avon Percent Change Eagle County Percent Change Colorado Percent Change 2005 $325,348 -- $1,817,784 -- $122,907,090 -- 2006 362,141 11.3% 2,134,864 17.4% 133,531,307 8.6% 2007 402,121 11.0 2,367,789 10.9 148,673,216 11.3 2008 395,181 (1.7) 2,355,829 (0.5) 152,747,684 2.7 2009 340,691 (13.8) 1,876,486 (20.3) 134,058,593 (12.2) 2010) 97,753 -- 615,157 -- 31,717,505 -- (1) Figures through l' quarter 2010. Source: State of Colorado, Department of Revenue, Sales Tax Statistics, 2005 -2010. Recreation and Tourism Year -round tourism and skiing- related businesses account for a significant portion of the employment and earned income of area residents. The Ski Industry in the State. After several years of gain, the Colorado ski industry dropped approximately 6.1 percent in skier visits during the 2008 -09 season at the state's 26 ski areas and held steady for the 2009 -10 season. According to Colorado Ski Country USA ( "CSCUSA "), a ski industry group, Colorado hosted 11.86 million skier visits during the 61 2009 -10 season, a slight increase over the 11.77 million visits hosted in the 2008 -09 season. Skier visits represent one person visiting a ski area for all or any part of a day or night for the purpose of skiing or snowboarding. Overall snowfall amounts across the state were down substantially and were a contributing factor to the 2009 -10 season's visitation patterns. Snowfall amounts decreased 26 percent compared to the 2008 -09 season, though heavy spring snows rallied visits to a solid finish for the season. One indicator of a significant ski industry is the economic impact. Research commissioned by Colorado Ski Country USA in 2004, stated that skiers spend $2.0 to $2.5 billion annually in Colorado, with up to an estimated two -thirds of those expenditures being captured by local business within the resort communities. In addition, the strong number of skier visits supported Denver International Airport's 2008 first time posting of 50 million plus passengers in a year. The 2009 passenger total reflected a (2.1)% decrease from the previous year's total. The Ski Industry in the Vail Valley. Skier visits at the two largest ski areas in the vicinity, Beaver Creek and Vail Mountain, accounted for 21.3% (combined) of the total skier visits for the State during the 2009 -10 ski season. Set forth in the following table are the skier visits for the Beaver Creek and Vail Mountain ski areas from the 2005 -06 ski season through the 2009 -10 ski season, as well as skier visit data for the State. Skier Visits (in thousands) Vail Valley Ski Areas 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010 Beaver Creek 875 890 918 931 927 Vail 1,676 1,608 1,570 1,622 1,599 Vail Valley Total 51 2M 2AM 2.5M 2.52-6 Percent Change -- (2.1)% (0.4)% 2.6% (1.1)% Colorado Total 12,533 12,566 12,541 11,775 11,864 Percent Change -- 0.3% (0.2)% (6.1)% 0.8% Vail Valley's Share of the Colorado Market 20.4% 19.9% 19.8% 21.7% 21.3% Sources: Colorado Ski Country USA and Vail Resorts, Inc. Vail Resorts, Inc. The Vail Ski Resort ( "Vail Mountain ") and Beaver Creek Ski Resort ( "Beaver Creek ") are owned and operated by Vail Resorts, Inc. ( "Vail Resorts "). Vail Resorts is a publicly held company (NYSE: MTN) which, in addition to Vail Mountain and Beaver Creek, owns and operates the Keystone and Breckenridge ski resorts in Colorado, the Heavenly Mountain Resort in California, the Grand Teton Lodge in Wyoming, as well as Vail Resorts Hospitality, the company's lodging division. Vail Resorts also is active in developing real estate (including the Red Sky Ranch luxury golf community near Beaver Creek) and engages in various other business ventures. Beaver Creek. Beaver Creek is located adjacent to the Town of Avon, several miles west of Vail, and opened for business in 1980. Beaver Creek contains 1,815 acres of 62 skiable terrain, 17 lifts, 149 trails, four terrain parks, one half pipe, and has a vertical rise of approximately 4,040 feet. The National Ski Areas Association ( "NSAA ") recognized the resort as the winner of the 2009/10 Best Overall Customer Service Program, the resort's fifth consecutive year to receive this award; and also honored the resort with the 2009/10 Best Overall Safety award. The NSAA is the trade association for ski area owners and operators. During the 2010/11 season, the resort is hosting the only stop in the U.S. on the men's alpine World Cup circuit. The Audi Birds of Prey World Cup scheduled in December will feature a premier event Men's Downhill race, a Super Combined and a Giant Slalom. Among other features for the 2010/11 season is the Kids' Ultimate Four semi- private group lesson program with only four children per instructor. Students receive more individualized feedback and more one on one time with their instructor. Mamie's Mountain Grill is expanding its deck and is featuring a yurt for dining indoors during inclement weather. The resort now spans 1,800 acres across three base areas, creating a European- inspired village -to- village ski experience with diverse terrain and world -class amenities and cuisine. The three separate villages, each connected by ski runs are Beaver Creek Village, Bachelor Gulch Village (location of the Ritz Carlton resort hotel), and Arrowhead Village. Vail Ski Resort. Vail Mountain lies within the White River National Forest and operates under permits from the U.S. Forest Service. The ski area is directly adjacent to the Town of Vail, and rises approximately 3,450 vertical feet above the Town. Vail Mountain has seven miles of mountain front, seven back bowls, three terrain parks, a 450 foot Superpipe, and 5,289 acres of skiable terrain. The outer -most area of Vail Mountain offers intermediate and expert skiers and riders a variety of moguls, glades, tree skiing, cliffs and ridges. There are 193 trails and 32 lifts, including one 12- passenger gondola, 16 high -speed quadruple chair lifts and a fixed -grip quadruple chair lift. Several large renovations and new projects have occurred within the Town of Vail in recent years, and additional projects are opening in 2010. Guests will find 280 new hotel rooms and 60,000 square feet of new retail and restaurant space. Summer Activities. Year -round visitors are attracted to the area to take advantage of award- winning resort golf courses. Six resort courses in the County are available to the public: Beaver Creek Golf Club, The Club at Cordillera (short course only), the Eagle Vail Golf Club, Red Sky Golf Club (two courses) and Sonnenalp Golf Club. The two public 18 -hole championship golf courses are Vail Golf Club and Eagle Ranch Golf Club. Finally, the exclusive golf clubs include the semi- private Cotton Ranch Club and private clubs at The Club at Cordillera, Country Club of the Rockies at Arrowhead; Eagle Springs Golf Club and Adams Mountain Country Club. Horseback riding, mountain biking, fly - fishing, hiking, whitewater rafting and other recreational sports also draw guests to the area, as well as world -class music festivals and art shows. Building Permits As evidenced by the following tables, construction activity in unincorporated Eagle County has fluctuated in response to nationwide economic conditions, reflecting the area's dependence on the tourism and skiing industries. The following two tables set forth a history of building permits issued in the Town of Avon and Unincorporated Eagle County. 63 History of New Construction in the Town of Avon Residential Year Units Valuation 2005 19 $15,052,119 2006 12 13,980,955 2007 93 10,970,648 2008 15 11,165,780 2009 4 3,521,000 2010' 1 3,898,614 (1) As of August 31, 2010. Source: Town of Avon Building Division. Commercial Square Total Number of Footage Valuation -- $ 250,000 26,639 114,860,200 19,242 25,248,538 11,416 2,525,749 0 0 n/a 4,586,963 History of Building Permits Issued in Unincorporated Eagle County (1) Permits issued through July 31, 2010. Source: Eagle County Division of Planning. Foreclosure Activity in Eagle County The following table sets forth the number of foreclosures filed in Eagle County during the time period indicated. Such figures represent the total number of foreclosures filed and do not take into account foreclosures which were filed and subsequently withdrawn or redeemed. Me, Total Number of Total Year Permits Issued Valuation 2005 643 $208,919,498 2006 640 195,304,749 2007 576 190,179,625 2008 551 113,469,589 2009 369 78,523,433 2010) 252 46,959,796 (1) Permits issued through July 31, 2010. Source: Eagle County Division of Planning. Foreclosure Activity in Eagle County The following table sets forth the number of foreclosures filed in Eagle County during the time period indicated. Such figures represent the total number of foreclosures filed and do not take into account foreclosures which were filed and subsequently withdrawn or redeemed. Me, Year 2005 2006 2007 2008 2009 2010' (1) Filings through August 31, 2010. History of Foreclosures Number of Foreclosure Filed 178 197 140 179 459 392 Source: Eagle County Public Trustee's Office. 65 Percent Change 10.7% (28.9) 27.9 156.4 LEGAL MATTERS Litigation The Town Attorney states that to the best of his knowledge, there are no lawsuits or other proceedings pending or threatened that would materially adversely affect the Town's ability to enter into the Lease or to pay Base Rentals under the Lease as set forth therein, and no litigation challenging the validity or the issuance of the Certificates is pending or threatened. The Town Attorney also states that as of the date hereof, to the best of his knowledge, although the Town is subject to certain pending or threatened litigation or administrative proceedings, these matters either are adequately covered by insurance or, to the extent not insured, the final settlement thereof is not expected to materially, adversely affect the financial position of the Town. Sovereign Immunity The Colorado Governmental Immunity Act, Title 24, Article 10, Part 1, C.R.S. (the "Immunity Act "), provides that, with certain specified exceptions, sovereign immunity acts as a bar to any action against a public entity, such as the Town, for injuries which lie in tort or could lie in tort. The Immunity Act provides that sovereign immunity is waived by a public entity for injuries occurring as a result of certain specified actions or conditions, including: the operation of a non - emergency motor vehicle (including a light rail car), owned or leased by the public entity; the operation of any public hospital, correctional facility or jail; a dangerous condition of any public building; certain dangerous conditions of a public highway, road or street; and the operation and maintenance of any public water facility, gas facility, sanitation facility, electrical facility, power facility or swimming facility by such public entity. In such instances, the public entity may be liable for injuries arising from an act or omission of the public entity, or an act or omission of its public employees, which are not willful and wanton, and which occur during the performance of their duties and within the scope of their employment. The maximum amounts that may be recovered under the Immunity Act, whether from one or more public entities and public employees, are as follows: (a) for any injury to one person in any single occurrence, the sum of $150,000; (b) for an injury to two or more persons in any single occurrence, the sum of $600,000; except in such instance, no person may recover in excess of $150,000. The Town may increase any maximum amount that may be recovered from the Town for certain types of injuries. However, the Town may not be held liable either directly or by indemnification for punitive or exemplary damages unless the Town voluntarily pays such damages in accordance with State law. The Town has not acted to increase the damage limitations in the Immunity Act. The Town may be subject to civil liability and damages including punitive or exemplary damages under federal laws, and it may not be able to claim sovereign immunity for actions founded upon federal laws. Examples of such civil liability include suits filed pursuant to Section 1983 of Title 42 of the United States Code, alleging the deprivation of federal constitutional or statutory rights of an individual. In addition, the Town may be enjoined from engaging in anti - competitive practices which violate federal and State antitrust laws. However, .. the Immunity Act provides that it applies to any State court having jurisdiction over any claim brought pursuant to any federal law, if such action lies in tort or could lie in tort. Approval of Certain Legal Proceedings The approving opinion of Sherman & Howard L.L.C., as Special Counsel, will be delivered with the Certificates. A form of the Special Counsel opinion is attached to this Official Statement as Appendix E. The opinion will include a statement that the obligations of the Town are subject to the reasonable exercise in the future by the State and its governmental bodies of the police power inherent in the sovereignty of the State and to the exercise by the United States of the powers delegated to it by the federal constitution, including bankruptcy. Sherman & Howard L.L.C., Denver, Colorado, has also acted as Special Counsel to the Town in connection with this Official Statement. Certain legal matters pertaining to the organization and operation of the Town will be passed upon by the Town Attorney. Certain Constitutional Limitations General. At the general election on November 3, 1992, the voters of Colorado approved TABOR as Article X, Section 20 of the State constitution. In general, TABOR restricts the ability of the State and local governments to increase revenues and spending, to impose taxes, and to issue debt and certain other types of obligations without voter approval. TABOR generally applies to the State and all local governments, including the Town ( "local governments "), but does not apply to "enterprises," defined as government -owned businesses authorized to issue revenue bonds and receiving under 10% of annual revenue in grants from all state and local governments combined. Some provisions of TABOR are unclear and will require further judicial interpretation. No representation can be made as to the overall impact of TABOR on the future activities of the Town, including its ability to generate sufficient revenues for its general operations, to undertake additional programs or to engage in any subsequent financing activities. Voter Approval Requirements and Limitations on Taxes, Spending, Revenues, and Borrowing. TABOR requires voter approval in advance for: (a) any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase, extension of an expiring tax, or a tax policy change causing a net tax revenue gain; (b) any increase in a local government's spending from one year to the next in excess of the limitations described below; (c) any increase in the real property tax revenues of a local government from one year to the next in excess of the limitations described below; or (d) creation of any multiple - fiscal year direct or indirect debt or other financial obligation whatsoever, subject to certain exceptions such as the refinancing of obligations at a lower interest rate. TABOR limits increases in government spending and property tax revenues to, generally, the rate of inflation and a local growth factor which is based upon, for school districts, the percentage change in enrollment from year to year, and for non - school districts, the actual value of new construction in the local government. Unless voter approval is received as described above, revenues collected in excess of these permitted spending limitations must be rebated. 67 In 1994, the Town's voters approved an election question which authorized the Town to retain excess revenues collected through 1998 which may have otherwise been required by TABOR to be refunded to taxpayers. In 1997, the Town's voters approved an election question which authorizes the Town to retain excess revenues received in 1998 and thereafter. In the opinion of Special Counsel, based upon decisions of the Colorado appellate courts, the Lease does not constitute a "multiple fiscal year financial obligation" which requires an election under the terms of TABOR. Emergency Reserve Funds. TABOR also requires local governments to establish emergency reserve funds. The reserve fund must consist of at least 3% of fiscal year spending. TABOR allows local governments to impose emergency taxes (other than property taxes) if certain conditions are met. Local governments are not allowed to use emergency reserves or taxes to compensate for economic conditions, revenue shortfalls, or local government salary or benefit increases. The Town has budgeted emergency reserves as required by TABOR. Other Limitations. TABOR also prohibits new or increased real property transfer tax rates and local government income taxes. TABOR allows local governments to enact exemptions and credits to reduce or end business personal property taxes; provided, however, the local governments' spending is reduced by the amount saved by such action. With the exception of K 12 public education and federal programs, TABOR also allows local governments (subject to certain notice and phase out requirements) to reduce or end subsidies to any program delegated for administration by the general assembly; provided, however, the local governments' spending is reduced by the amount saved by such action. TAX MATTERS In the opinion of Special Counsel, assuming continuous compliance with certain covenants described below, the portion of the Base Rentals which is designated in the Lease and paid by the Trustee as interest on the 2010 Certificates, is excluded from gross income under federal income tax laws pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date of delivery of the 2010 Certificates (the "Tax Code "), is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code except that such interest is required to be included in calculating the "adjusted current earnings" adjustment applicable to corporations for purposes of computing the alternative minimum taxable income of corporations, and is excluded from Colorado taxable income and Colorado alternative minimum taxable income under Colorado income tax laws in effect on the date of delivery of the 2010 Certificates The opinion of Special Counsel does not cover the treatment for federal or Colorado income tax purposes of any monies received in payment of or in respect to the 2010 Certificates subsequent to the occurrence of an Indenture Event of Default, a Lease Event of Default or an Event of Nonappropriation. The Tax Code and Colorado law impose several requirements which must be met with respect to the Certificates in order for the interest thereon to be excluded from gross income, alternative minimum taxable income, Colorado taxable income and Colorado alternative minimum taxable income. Certain of these requirements must be met on a continuous basis throughout the term of the 2010 Certificates. These requirements include: (a) limitations as to the use of proceeds of the 2010 Certificates; (b) limitations on the extent to which proceeds of the 2010 Certificates may be invested in higher yielding investments; and (c) a provision, subject to certain limited exceptions, that requires all investment earnings on the proceeds of the 2010 Certificates above the yield on the 2010 Certificates to be paid to the United States Treasury. The Town covenants and represent in the Lease that it will, during the Lease Term, take all steps to comply with the requirements of the Tax Code and Colorado law (in effect on the date of delivery of the 2010 Certificates) to the extent necessary to maintain the exclusion of interest on the 2010 Certificates from gross income and alternative minimum taxable income under such federal income tax laws and Colorado taxable income and Colorado alternative minimum taxable income under such Colorado income tax laws. Special Counsel's opinion as to the exclusion of interest on the 2010 Certificates from gross income, alternative minimum taxable income, Colorado taxable income and Colorado alternative minimum taxable income is rendered in reliance on these covenants and assumes continuous compliance therewith. (The foregoing covenant does not, however, preclude the Town from exercising its right to terminate the Lease at the times and in the manner previously described in this Official Statement.) The failure or inability of the Town to comply with these requirements could cause the interest on the 2010 Certificates to be included in gross income, alternative minimum taxable income, Colorado taxable income or Colorado alternative minimum taxable income, or a combination thereof, from the date of issuance. Special Counsel's opinion also is rendered in reliance upon certifications of the Town and other certifications furnished to Special Counsel. Special Counsel has not undertaken to verify such certifications by independent investigation. With respect to 2010 Certificates that were sold in the initial offering at a discount (the "Discount 2010 Certificates "), the difference between the stated redemption price Me of the Discount 2010 Certificates at maturity and the initial offering price of those bonds to the public (as defined in Section 1273 of the Tax Code) will be treated as "original issue discount" for federal income tax purposes and will, to the extent accrued as described below, constitute interest which is excluded from gross income, alternative minimum taxable income, Colorado taxable income, or Colorado alternative minimum taxable income under the conditions described in the preceding paragraphs. The original issue discount on the Discount 2010 Certificates is treated as accruing over the respective terms of such Discount 2010 Certificates on the basis of a constant interest rate compounded at the end of each six -month period (or shorter period from the date of original issue) ending on June 1 and December 1 with straight line interpolation between compounding dates. The amount of original issue discount accruing each period (calculated as described in the preceding sentence) constitutes interest which is excluded from gross income, alternative minimum taxable income, Colorado taxable income, and Colorado alternative minimum taxable income under the conditions described in the preceding paragraphs and will be added to the owner's basis in the Discount 2010 Certificates. Such adjusted basis will be used to determine taxable gain or loss upon disposition of the Discount 2010 Certificates (including sale or payment at maturity). Owners should consult their own tax advisors with respect to the tax consequences of the ownership of the Discount 2010 Certificates. Owners who purchase Discount 2010 Certificates after the initial offering or who purchase Discount 2010 Certificates in the initial offering at a price other than the initial offering price (as defined in Section 1273 of the Tax Code) should consult their own tax advisors with respect to the federal tax consequences of the ownership of the Discount 2010 Certificates. Owners who are subject to state or local income taxation (other than Colorado state income taxation) should consult their tax advisor with respect to the state and local income tax consequences of ownership of the Discount 2010 Certificates. It is possible that, under the applicable provisions governing determination of state and local taxes, accrued original issue discount on the Discount 2010 Certificates may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. The Tax Code contains numerous provisions which may affect an investor's decision to purchase the Certificates. Owners of the 2010 Certificates should be aware that the ownership of tax- exempt obligations by particular persons and entities, including, without limitation, financial institutions, insurance companies, recipients of Social Security or Railroad Retirement benefits, taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax- exempt obligations, foreign corporations doing business in the United States and certain "subchapter S" corporations may result in adverse federal and Colorado tax consequences. Under Section 3406 of the Tax Code, backup withholding may be imposed on payments on the 2010 Certificates made to any owner who fails to provide certain required information, including an accurate taxpayer identification number, to certain persons required to collect such information pursuant to the Tax Code. Backup withholding may also be applied if the owner underreports "reportable payments" (including interest and dividends) as defined in Section 3406, or fails to provide a certificate that the owner is not subject to backup withholding in circumstances where such a certificate is required by the Tax Code. Certain of the 2010 Certificates were sold at a premium, representing a difference between the original offering price of those 2010 Certificates and the principal amount thereof payable at maturity. Under certain circumstances, an initial owner of such 2010 Certificates (if any) may realize a taxable gain upon their disposition, even though such 2010 Certificates are sold or redeemed for an amount equal to the owner's acquisition cost. Special Counsel's opinion relates only to the exclusion of 70 interest (and, to the extent described above for the Discount 2010 Certificates, original issue discount) on the 2010 Certificates from gross income, alternative minimum taxable income, Colorado taxable income and Colorado alternative minimum taxable income as described above and will state that no opinion is expressed regarding other federal or Colorado tax consequences arising from the receipt or accrual of interest on or ownership of the Certificates. Owners of the 2010 Certificates should consult their own tax advisors as to the applicability of these consequences. The opinions expressed by Special Counsel are based on existing law as of the delivery date of the 2010 Certificates. No opinion is expressed as of any subsequent date nor is any opinion expressed with respect to pending or proposed legislation. Amendments to the federal or State tax laws may be pending now or could be proposed in the future that, if enacted into law, could adversely affect the value of the 2010 Certificates, the exclusion of interest (and, to the extent described above for the Discount 2010 Certificates, original issue discount) on the 2010 Certificates from gross income or alternative minimum taxable income or both from the date of issuance of the 2010 Certificates or any other date, or that could result in other adverse tax consequences. In addition, future court actions or regulatory decisions could affect the market value of the 2010 Certificates. Owners of the 2010 Certificates are advised to consult with their own tax advisors with respect to such matters. The Internal Revenue Service (the "Service ") has an ongoing program of auditing tax- exempt obligations to determine whether, in the view of the Service, interest on such tax - exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. No assurances can be given as to whether or not the Service will commence an audit of the 2010 Certificates. If an audit is commenced, the market value of the 2010 Certificates may be adversely affected. Under current audit procedures, the Service will treat the Town as the taxpayer and the Owners may have no right to participate in such procedures. The Town has covenanted in the Lease not to take any action that would cause the interest on the 2010 Certificates to lose its exclusion from gross income for federal income tax purposes or lose its exclusion from alternative minimum taxable income for the owners thereof for federal income tax purposes. None of the Town, the Underwriter or Special Counsel is responsible for paying or reimbursing any Registered Owner or Beneficial Owner for any audit or litigation costs relating to the 2010 Certificates. FINANCIAL INSTITUTION INTEREST DEDUCTION The Tax Code generally provides that a financial institution may not deduct that portion of its interest expense which is allocable to tax- exempt interest. The interest expense which is allocable to tax- exempt interest is an amount which bears the same ratio to the institution's interest expense as the institution's average adjusted basis of tax- exempt obligations acquired after August 7, 1986 bears to the average adjusted basis of all assets of the institution. Tax- exempt obligations may be treated as if acquired on August 7, 1986 (and therefore are not subject to this rule), if they are "qualified tax - exempt obligations" as defined in the Tax Code and are designated for this purpose by the Town. The Town has designated the 2010 Certificates for this purpose; however, under provisions of the Tax Code dealing with financial institution preference items, certain financial institutions, including banks, are denied 20% of their otherwise allowable deduction for interest 71 expense with respect to obligations incurred or continued to purchase or carry the 2010 Certificates. In general, interest expense with respect to obligations incurred or continued to purchase or carry the 2010 Certificates will be in an amount which bears the same ratio as the institution's average adjusted basis in the 2010 Certificates bears to the average adjusted basis of all assets of the institution. Amendments to the Tax Code could be enacted in the future and there is no assurance that any such future amendments which may be made to the Tax Code will not adversely affect the ability of banks or other financial institutions to deduct any portion of its interest expense allocable to tax- exempt interest. INDEPENDENT AUDITORS The basic financial statements of the Town as of December 31, 2009, and for the year then ended, included in this Official Statement as Appendix A, have been audited by McMahan and Associates, L.L.C., independent certified public accountants, Avon, Colorado, as stated in their report appearing herein. RATING [ Moody's Investors Service ( "Moody's ") and Standard & Poor's Rating Group, a Division of McGraw -Hill, Inc. ( "S &P ") are expected to assign the Certificates the Insured Ratings shown on the cover page of this Official Statement based upon the issuance of the Policy by the 2010 Insurer. See "SECURITY FOR THE CERTIFICATES — Certificate Insurance. "] Moody's and S &P have also assigned the Certificates the Underlying Ratings shown on the cover page of this Official Statement. An explanation of the significance of the ratings given by Moody's may be obtained from Moody's at 7 World Trade Center at 250 Greenwich Street, New York, New York 10007. An explanation of the significance of the ratings given by S &P may be obtained from S &P at 55 Water Street, New York, New York 10041. Such ratings reflect only the views of such rating agencies, and there is no assurance that any rating will continue for any given period of time or that any rating will not be revised downward or withdrawn entirely by the applicable rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Certificates. Other than its undertaking in the Disclosure Certificate, the County has not undertaken any responsibility to bring to the attention of the owners of the Certificates any proposed change in or withdrawal of such ratings once received or to oppose any such proposed revision. UNDERWRITING Piper Jaffray & Co. (collectively, the "Underwriter ") has agreed to purchase the Certificates at a price of $ (which is equal to the principal amount of the Certificates, plus net original issue premium of $ , and less Underwriter's discount of $ ). The Underwriter is committed to take and pay for all of the Certificates if any are taken. The Underwriters intend to offer the Certificates to the public at the offering prices appearing on the inside cover page of this Official Statement. After the initial public offering, the public offering price may be varied from time to time by the Underwriter. 72 OFFICIAL STATEMENT CERTIFICATION The preparation of this Official Statement and its distribution have been authorized by the Town. This Official Statement is hereby duly approved by the Town as of the date on the cover page hereof. TOWN OF AVON, COLORADO By: Mayor 73 APPENDIX A AUDITED BASIC FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 NOTE: The supplemental schedules contained in the Town's audit, including the combining, individual fund and account group financial statements, for the fiscal year ending December 31, 2009, of the Town were excluded from this Official Statement. Such supplemental statements provide supporting details and are not necessary for a fair presentation of the basic financial statements of the Town. A -1 APPENDIX B CERTAIN DEFINITIONS AND SUMMARIES OF CERTAIN PROVISIONS OF THE SITE LEASE, THE LEASE AND THE INDENTURE [TO COME] ME APPENDIX C BOOK -ENTRY ONLY SYSTEM DTC will act as securities depository for the Certificates. The Certificates will be issued as fully- registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully - registered certificate will be issued for each maturity of the Certificates, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited - purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ( "Direct Participants ") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ( "DTCC "). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Certificates under the DTC system must be made by or through Direct Participants, which will receive a credit for the Certificates on DTC's records. The ownership interest of each actual purchaser of each Certificate (`Beneficial Owner ") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Certificates are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Certificates, except in the event that use of the book -entry system for the Certificates is discontinued. To facilitate subsequent transfers, all Certificates deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Certificates C -1 with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Certificates; DTC's records reflect only the identity of the Direct Participants to whose accounts such Certificates are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Certificates may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Certificates, such as redemptions, tenders, defaults, and proposed amendments to the Certificate documents. For example, Beneficial Owners of Certificates may wish to ascertain that the nominee holding the Certificates for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Trustee and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Certificates within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Certificates unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Trustee, acting as registrar and paying agent, as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Certificates are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, interest and redemption proceeds on the Certificates will be made to Cede& Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Trustee on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, interest or redemption proceeds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Certificates at any time by giving reasonable notice to the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Certificates are required to be printed and delivered. C -2 The Trustee may decide to discontinue use of the system of book - entry-only transfers through DTC (or a successor securities depository). In that event, Certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the Trustee believes to be reliable, but the Trustee takes no responsibility for the accuracy thereof. SO LONG AS CEDE & CO., AS NOMINEE OF DTC, IS THE REGISTERED OWNER OF THE CERTIFICATES, REFERENCES IN THIS OFFICIAL STATEMENT TO THE REGISTERED OWNERS OF THE CERTIFICATES WILL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS. The Trustee may treat DTC (or its nominee) as the sole and exclusive owner of the Certificates registered in its name for the purpose of payment of the principal of or interest or premium, if any, on the Certificates, giving any notice permitted or required to be given to registered owners under the Indenture, including any notice of redemption, registering the transfer of Certificates, obtaining any consent or other action to be taken by registered owners and for all other purposes whatsoever, and will not be affected by any notice to the contrary. The Trustee will not have any responsibility or obligation to any DTC Participant, any person claiming a beneficial ownership interest in the Certificates under or through DTC or any DTC Direct Participant, Indirect Participant or other person not shown on the records of the Registrar as being a registered owner with respect to: the accuracy of any records maintained by DTC, any DTC Direct Participant or Indirect Participant regarding ownership interests in the Certificates; the payment by DTC, any DTC Direct Participant or Indirect Participant of any amount in respect of the principal of or interest or premium, if any, on the Certificates; the delivery to any DTC Direct Participant, Indirect Participant or any Beneficial Owner of any notice which is permitted or required to be given to registered owners under the Authorizing Document, including any notice of redemption; the selection by DTC, any DTC Direct Participant or any Indirect Participant of any person to receive payment in the event of a partial redemption of the Certificates; or any consent given or other action taken by DTC as a registered owner. As long as the DTC book -entry system is used for the Certificates, the Registrar will give any notice of redemption or any other notices required to be given to registered owners of Certificates only to DTC or its nominee. Any failure of DTC to advise any DTC Direct Participant, of any DTC Direct Participant to notify any Indirect Participant, of any DTC Direct Participant or Indirect Participant to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity of the redemption of the Certificates called for redemption or of any other action premised on such notice. C -3 APPENDIX D FORM OF CONTINUING DISCLOSURE CERTIFICATE [TO COME] D -1 [TO COME] APPENDIX E FORM OF OPINIONS OF SPECIAL COUNSEL E -1 APPENDIX F SPECIMEN MUNICIPAL BOND INSURANCE POLICY F -1 S M T W T F S 1 2 3 4 5 a6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 $6,800,000* TOWN OF AVON, COLORADO Certificates of Participation, Series 2010 Draft Timetable, as of September 9, 2010 S M T W T F S POS Distributed (Estimate) BC 9/17/10 Time TBD -2 ND Document Review Session Location: Sherman & Howard All 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Final Closing Documents Distributed All 11/11/10 Closing All S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 F25 1 26 27 28 29 30 Date Event Responsibility 9/9/10 Revised Legal Documents Distributed BC 9/14/10 POS Distributed (Estimate) BC 9/17/10 Time TBD -2 ND Document Review Session Location: Sherman & Howard All 9/23/10 Send Documents to Rating Agencies BC /UW 9/28/10 First Reading of the Ordinance A 9/30/10 Ratings Calls with Ratings Agencies (exact time tbd) A/UW 10/11/10 Receive Ratings and Insurance Quote UW 10/12/10 Second Reading of the Ordinance 10/13/10 Post POS BC 10/21/10 . Market Bonds • CPA Signed UW A 10/22/10 Final OS Distributed for Comments BC 10/25/10 . Closing Documents Distributed • Comments Back to Bond Counsel on OS All 10/26/10 Final OS Printed and Distributed Printer 11/3/10 Final Closing Documents Distributed All 11/11/10 Closing All A - i own of Avon, 5tatt ana c;onsuitants BC - Bond Counsel and Disclosure Counsel (Sherman & Howard) UW - Underwriter (Piper Jaffray & Co) * Estimate Piperjaff ray Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. TABLE OF CONTENTS TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Report Page Sources and Uses of Funds . . . . . . . . . . . . . . . 1 Bond Debt Service Breakdown . . . . . . . . . . . . . . . . . . . . . . . . . 2 Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Summary of Refunding Results . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Bond Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Prior Bond Debt Service . . . . . . . . . . . . . . . . . 9 Summary of Bonds Refunded . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Escrow Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Escrow Cost . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Escrow Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Escrow Sufficiency . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Escrow Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 PxperJaff ray: Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. SOURCES AND USES OF FUNDS TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Dated Date 10/28/2010 Delivery Date 10/28/2010 Sources: Bond Proceeds: Par Amount 6,805,000.00 Net Premium 129,004.15 6,934,004.15 Other Sources of Funds: Debt Service Reserve Fund 563,570.00 Prior Debt Service Fund 319,600.00 Uses: Project Fund Deposits: Project Fund Refunding Escrow Deposits: SLGS Purchases Other Fund Deposits: Debt Service Reserve Fund Delivery Date Expenses: Cost of Issuance Underwriter's Discount Bond Insurance Other Uses of Funds: Additional Proceeds Piped affray. 883,170.00 7,817,174.15 3,000,000.00 4,089,200.00 495,864.78 60,000.00 68,050.00 101,465.50 229,515.50 2,593.87 7,817,174.15 Page 1 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. BOND DEBT SERVICE BREAKDOWN Pip erjaffray. Page 2 TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Series 2010 Period Series 2010 (New (Refund 1998 Ending Money) COPS) Total 12/01/2010 17,953.65 113,177.08 131,130.73 12/01/2011 201,212.50 236,750.00 437,962.50 12/01/2012 200,012.50 234,850.00 434,862.50 12/01/2013 203,812.50 232,950.00 436,762.50 12/01/2014 202,512.50 236,050.00 438,562.50 12/01/2015 201,212.50 234,050.00 435,262.50 12/01/2016 204,262.50 236,050.00 440,312.50 12/01/2017 202,162.50 237,900.00 440,062.50 12/01/2018 200,062.50 234,600.00 434,662.50 12/01/2019 202,262.50 235,200.00 437,462.50 12/01/2020 204,262.50 235,600.00 439,862.50 12/01/2021 201,062.50 235,800.00 436,862.50 12/01/2022 202,862.50 235,800.00 438,662.50 12/01/2023 204,462.50 235,600.00 440,062.50 12/01/2024 200,862.50 235,200.00 436,062.50 12/01/2025 202,262.50 234,600.00 436,862.50 12/01/2026 202,987.50 233,075.00 436,062.50 12/01/2027 203,487.50 236,325.00 439,812.50 12/01/2028 203,762.50 234,125.00 437,887.50 12/01/2029 203,812.50 236,700.00 440,512.50 12/01/2030 203,637.50 233,825.00 437,462.50 12/01/2031 202,937.50 235,275.00 438,212.50 12/01/2032 202,000.00 236,250.00 438,250.00 12/01/2033 200,500.00 551,250.00 751,750.00 12/01/2034 203,750.00 203,750.00 12/01/2035 201,500.00 201,500.00 12/01/2036 204,000.00 204,000.00 12/01/2037 201,000.00 201,000.00 12/01/2038 202,750.00 202,750.00 12/01/2039 204,000.00 204,000.00 12/01/2040 204,750.00 204,750.00 6,096,116.15 5,841,002.08 11,937,118.23 Pip erjaffray. Page 2 Sep 6, 2010 12:36 pm Prepared by Piper laffray & Co. Page 3 Date SAVINGS TOWN OF AVON, COLORADO REFUNDING CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refund Series 1998) Prior Prior Prior Refunding Refunding Refunding Debt Service Receipts Net Cash Flow Debt Service Receipts Net Cash Flow Savings Present Value to 10/28/2010 Q 4.5163100% 12/01/2010 459,200.00 320,633.21 138,566.79 113,177.08 579.67 112,597.41 25,969.38 24,557.55 12/01/2011 561,120.00 11,271.40 549,848.60 236,750.00 6,32372 230,426.28 319,422.32 304,59171 12/01/2012 562,500.00 11,271.40 551,228.60 234,850.00 6,323.72 228,526.28 322,702.32 294,104.20 12/01/2013 562,500.00 11,271.40 551,228.60 232,950.00 6,323.72 226,626.28 324,602.32 282,735.24 12/01/2014 561,500.00 11,271.40 550,228.60 236,050.00 6,323.72 229,726.28 320,502.32 266,791.01 12/01/2015 559,500.00 11,271.40 548,228.60 234,050.00 6,323.72 227,726.28 320,502.32 254,958.20 12/01/2016 561,500.00 11,271.40 550,228.60 236,050.00 6,323.72 229,726.28 320,502.32 243,650.07 12/01/2017 562,250.00 11,271.40 550,978.60 237,900.00 6,323.72 231,57628 319,402.32 232,032.95 12/01/2018 561,750.00 574,841.40 13.091.40) 234,600.00 6,323.72 228,276.28 (241.367 68) (168.973.0o) 12/012019 235,200.00 6,32172 228,876.28 ( 228.876 28) (153.353.11) 12/012020 235,600.00 6,323.72 229,276.28 ( 229276.28) (146,876 711 12/012021 235,800.00 6,323.72 229,476.28 (229476 28) (140,550 26) 12/012022 235,800.00 6,323.72 229,476.28 (229.476 28) (134,378 390 12/012023 235,600.00 6,323.72 229,276.28 (229.276 28) (128.364 82) 12/012024 235,200.00 6,323.72 228,876.28 (228.876 28) (122.512.42) 12/012025 234,600.00 6,323.72 228,276.28 (228 276 28) 11 16.823.281 12/012026 233,075.00 6,323.72 226,751.28 (226.751281 1110.941.46} 12/012027 236,325.00 6,323.72 230,001.28 (230.00128) 1107.57510) 12/012028 234,125.00 6,323.72 227,801.28 (227.80128) 1101.859.52) 12/012029 236,700.00 6,323.72 230,376.28 (230.376 28) {98,47244) 12/012030 233,825.00 6,323.72 227,50128 (227.501.28) (92,963.06) 12/012031 235,275.00 6,323.72 228,951.28 (228.951.28) 489.4302 7) 12/012032 236,250.00 6,323.72 229,926.28 (229.926.28) 85,849.64) 12/012033 551,250.00 322,509.33 228,740.67 (228.74067) (81.636.91) 4,951,820 00 974,374.41 3,977,445.59 5,841,002.08 462,210.84 5,378,791.24 (1,401.345.65) 22,861.54 Piperjaffray. Sep 6, 2010 12:36 pm Prepared by Piper laffray & Co. SAVINGS TOWN OF AVON, COLORADO REFUNDING CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refund Series 1998) Savings Summary PV of savings from cash flow 22,861.54 Plus: Refunding funds on hand 348.45 Net PV Savings 23,209.99 PIPUJaffray. Page 4 Sep 6, 2010 12:36 pm Prepared by Piper Jaf-ray & Co. SUMMARY OF REFUNDING RESULTS TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Dated Date 10/28/2010 Delivery Date 10/28/2010 Arbitrage yield 4.516310% Escrow yield 0.132140% Bond Par Amount 3,565,000.00 True Interest Cost 4.466823% Net Interest Cost 4.580373% Average Coupon 4.496536% Average Life 14.198 Par amount of refunded bonds 3,990,000.00 Average coupon of refunded bonds 4.997272% Average life of refunded bonds 4.417 PV of prior debt to 10/28/2010 @ 4.516310% 4,144,565.31 Net PV Savings 23,209.99 Percentage savings of refunded bonds 0.581704% Percentage savings of refunding bonds 0.651052% PiperJaff ray. Page 5 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. BOND SUMMARY STATISTICS TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Dated Date Delivery Date First Coupon Last Maturity Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All -In TIC Average Coupon Average Life (years) Duration of Issue (years) Par Amount Bond Proceeds Total Interest Net Interest Bond Years from Dated Date Bond Years from Delivery Date Total Debt Service Maximum Annual Debt Service Average Annual Debt Service Underwriter's Fees (per $1000) Average Takedown Other Fee Total Underwriter's Discount Bid Price 10/28/2010 10/28/2010 12/01/2010 12/01/2040 4.516310% 4.608757% 4.710949% 4.691458% 4.620458% 16.322 10.884 6,805,000.00 6,934,004.15 5,132,118.23 5,071,164.08 111,073,791.67 111,073,791.67 11,937,118.23 751,750.00 396,691.83 10.000000 10.000000 100.895726 Par Average Average Bond Component Value Price Coupon Life Serial Bond 6,805,000.00 101.896 4.620% 16.322 6,805,000.00 16.322 PiperJaff ray. Page 6 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. Page 7 BOND SUMMARY STATISTICS TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Piperjaffray.. Arbitrage Yield 6,805,000.00 129,004.15 ( 101.465.50; 6,832,538.65 10/28/2010 4.516310 9'6 All -In TIC TIC Par Value 6,805,000.00 6,805,000.00 • Accrued Interest • Premium (Discount) 129,004.15 129,004.15 - Underwriter's Discount (68.050.00) 168.050.00) - Cost of Issuance Expense (60.000.00) - Other Amounts (101.465.50) 1101.465.50) Target Value 6,764,488.65 6,704,488.65 Target Date 1012812010 10/28/2010 Yield 4.608757% 4.691458% Piperjaffray.. Arbitrage Yield 6,805,000.00 129,004.15 ( 101.465.50; 6,832,538.65 10/28/2010 4.516310 9'6 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. Bond Component Serial Bond: PiperJaff ray BOND PRICING TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Maturity Call Call Date Amount Rate Yield Price Date Price 12/01/2010 105,000 2.000% 1.500% 100.044 12/01/2011 155,000 2.000% 1.500% 100.538 12/01/2012 155,000 2.000% 1.610% 100.798 12/01/2013 160,000 2.000% 1.750% 100.748 12/01/2014 165,000 2.000% 1.960% 100.155 12/01/2015 165,000 3.000% 2.320% 103.246 12/01/2016 175,000 3.000% 2.580% 102.352 12/01/2017 180,000 3.000% 2.870% 100.827 12/01/2018 180,000 4.000% 3.030% 106.912 12/01/2019 190,000 4.000% 3.240% 105.941 12/01/2020 200,000 4.000% 3.440% 104.738 12/01/2021 205,000 4.000% 3.580% 103.528 C 12/01/2020 100.000 12/01/2022 215,000 4.000% 3.700% 102.504 C 12/01/2020 100.000 12/01/2023 225,000 4.000% 3.820% 101.492 C 12/01/2020 100.000 12/01/2024 230,000 4.000% 3.920% 100.658 C 12/01/2020 100.000 12/01/2025 240,000 4.500% 4.020% 103.946 C 12/01/2020 100.000 12/01/2026 250,000 4.500% 4.130% 103.024 C 12/01/2020 100.000 12/01/2027 265,000 4.500% 4.240% 102.113 C 12/01/2020 100.000 12/01/2028 275,000 4.500% 4.340% 101.292 C 12/01/2020 100.000 12/01/2029 290,000 4.500% 4.440% 100.480 C 12/01/2020 100.000 12/01/2030 300,000 4.750% 4.540% 101.681 C 12/01/2020 100.000 12/01/2031 315,000 4.750% 4.630% 100.954 C 12/01/2020 100.000 12/01/2032 330,000 5.000% 4.710% 102.303 C 12/01/2020 100.000 12/01/2033 660,000 5.000% 4.790% 101.660 C 12/01/2020 100.000 12/01/2034 145,000 5.000% 4.830% 101.340 C 12/01/2020 100.000 12/01/2035 150,000 5.000% 4.870% 101.022 C 12/01/2020 100.000 12/01/2036 160,000 5.000% 4.890% 100.863 C 12/01/2020 100.000 12/01/2037 165,000 5.000% 4.900% 100.784 C 12/01/2020 100.000 12/01/2038 175,000 5.000% 4.910% 100.704 C 12/01/2020 100.000 12/01/2039 185,000 5.000% 4.920% 100.625 C 12/01/2020 100.000 12¢01/2040 195,000 5.000% 4.930% 100.546 C 12/01/2020 100.000 6,805,000 Dated Date Delivery Date First Coupon Par Amount Premium Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds 10/28/2010 10/28/2010 12/01/2010 6,805,000.00 129,004.15 6,934,004.15 101.895726% (68.050.00) (1.000000) 6, 865, 954.15 100.895726% 6,865,954.15 Page 8 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. PRIOR BOND DEBT SERVICE TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Dated Date 10/28/2010 Delivery Date 10/28/2010 Period Ending 12/01/2010 12/01/2011 12/01/2012 12/01/2013 12/01/2014 12/01/2015 12/01/2016 12/01/2017 12/01/2018 Piperjaff ray® Principal 360,000 380,000 400,000 420,000 440,000 460,000 485,000 510,000 535,000 3,990,000 Coupon Interest 4.800% 99,200 4.900% 181,120 5.000% 162,500 5.000% 142,500 5.000% 121,500 5.000% 99,500 5.000% 76,500 5.000% 52,250 5.000% 26,750 961,820 Debt Service 459,200 561,120 562,500 562,500 561,500 559,500 561,500 562,250 561,750 4,951,820 Page 9 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. Piper Jaffray Page 10 SUMMARY OF BONDS REFUNDED TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Maturity Interest Par Call Call Bond Date Rate Amount Date Price Series 1998: SERIAL 12/01/2010 4.800% 360,000.00 12/01/2011 4.900% 380,000.00 12/01/2010 100.000 TERM 12/01/2018 5.000% 3,250,000.00 12/01/2010 100.000 3,990,000.00 Piper Jaffray Page 10 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. ESCROW DESCRIPTIONS TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Type of Type of Maturity First Int Par Max Security SLGS Date Pmt Date Amount Rate Rate Oct 28, 2010: SLGS Certificate 12/01/2010 12/01/2010 4,089,200 0.130% 0.130% SLGS Summary SLGS Rates File Total Certificates of Indebtedness PiperJaffray. 4,089,200 03SEP10 4,089,200.00 Page 11 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. Page 12 ESCROW COST TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Type of Maturity Par Total Security Date Amount Rate Cost SLGS 12/01/2010 4,089,200 0.130% 4,089,200.00 4,089,200 4,089,200.00 Purchase Cost of Cash Total Date Securities Deposit Escrow Cost 10/28/2010 4,089,200 4,089,200.00 4,089,200 0.00 4,089,200.00 PiperJaff ray® Sep 6, 2010 12:36 pm Prepared by Piper Jafiray & Co. ESCROW CASH FLOW TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Net Escrow Date Principal Interest Receipts 12/01/2010 4,089,200.00 495.19 4,089,695.19 4,089,200.00 495.19 4,089,695.19 Escrow Cost Summary Purchase date 10/28/2010 Purchase cost of securities 4,089,200.00 PiperJaff ray. Page 13 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. ESCROW SUFFICIENCY TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Escrow Net Escrow Excess Date Requirement Receipts Receipts 12/01/2010 Pip erjaff ray. 4,089,200.00 4,089,695.19 4,089,200.00 4,089,695.19 Excess Balance 495.19 495.19 495.19 Page 14 Sep 6, 2010 12:36 pm Prepared by Piper Jaffray & Co. ESCROW STATISTICS TOWN OF AVON, COLORADO CERTIFICATES OF PARTICIPATION IN LEASE PURCHASE AND SUBLEASE AGREEMENT SERIES 2010 (Refunding & New Money) Modified Yield to Yield to Perfect Value of Total Duration Receipt Disbursement Escrow Negative Cost of Escrow Escrow Cost (years) Date Date Cost Arbitrage Dead Time Series 2010 (Refund 1998 COPS): DSRF 563,570.00 0.092 0.132148% 0.132148% 563,570.00 2,234.51 BP 3,525,630.00 0.092 0.132140% 0.132140% 3,525,630.00 13,978.87 4,089,200.00 4,089,200.00 16,213.38 0.00 Delivery date 1028/2010 Arbitrage yield 4.516310% Piped affray Page 15 Memo To: Honorable Mayor and Town Council Thru: Lang Brooks, Town Manager Legal Review: Eric Heil, Town Attorney From: Jennifer Strehler, Director of Public Works and Transportation Date: September 24, 2010 Re: Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds Summary: Town Council originally passed an ordinance in April 2010 amending the town code regarding noxious and nuisance weeds. Approval of the ordinance is now needed to fulfill a state requirement regarding a 30 -day public notice period. Public notice for this September 28th hearing was posted on August 27, 2010 at the Town's customary public notice locations. Also the associated noxious weed management plan has been amended to add several weeds designated by the state for control or eradication in Eagle County which were previously not included. A motion approving of the updated management plan is also needed. Previous Council Actions: On April 13, 2010, Town Council discussed proposed Ordinance 10 -06, "An Ordinance Enacting Noxious Weed Control Regulations" which revised § §8.24.046 of the Avon Municipal Code entitled "Undesirable Plants" (1992) and also § §8.24.045 entitled "Weeds" (1983). It was approved upon first reading but with the request that the originally proposed language regarding non - noxious but nuisance weeds and grass mow heights be removed. Staff made these changes and submitted a revised ordinance for consideration on April 27, 2010. On April 27, 2010, a public hearing was held regarding Ordinance 10 -06. The Town Council approved Ordinance 10 -06 upon second reading. The new ordinance language can be found in §8.36 of the Avon Municipal Code. Town received communications disputing the Town's legal authority to enforce locally designated noxious weeds. Although the Town did post notice of Ordinance No. 10 -06 Adopting Noxious Weed Regulations 30 days prior to the first reading of Ordinance No. 10 -06; the Town Attorney has recommended that the Town re- notice the local designation of noxious weeds. Page 1 of 4 Council Memo Background: The Colorado Noxious Weed Act §§ 35- 5.5.101 through 119 (CRS 2003) requires local governments to rules set forth in 8 CCR 1206 -2 and in the Act to control the spread of noxious weeds. The state requires counties, cities, and towns to adopt a specific noxious weed management plan. Avon is compliant this regard, with the Town Council acting as the local Weed Management Advisory Commission. A copy of the public notice posted for this hearing is attached. This notice was posted on Auaust 27. 2010 at the Town's customary public notice locations. Discussion: Avon's Noxious Weed Management Plan includes all of the state's List A species plus the species listed below. Species ID # 18 -26 have been added to Avon's plan since the previously approved April version. These were added because they are identified for control or eradication in Eagle County in 8 CCR 1206 -2. In the event the state adds another species to List A or to List B with an explicit requirement for eradication in Eagle County, Avon's management plan "'automatically updates" to include such added species. Management Method # 1 2 4 6 7 Common Name: Leafy Spurge Russian Knapweed Diffuse Knapweed Spotted Knapweed Canada Thistle Musk Thistle Plumeless Thistle Scotch Thistle 9 Houndstongue 10 Whitetop/Hoary Cress 11 Yellow Toadflax 12 Oxeye Daisy 13 Dalmatian Toadflax 14 Common Tansy 15 Scentless Chamomile 16 Salt Cedar 17 Yellow Sweet Clover 18 Black henbane 19 Bull Thistle 20 Chinese clematis 21 Eurasian watermilfoil 22 Perennial pepperweed 23 Russian-olive 24 Spurred anoda 25 Sulfur cinquefoil 26 Venice mallow Scientific Name: Euphorbia esula Acroptilon repens Centaurea diffusa Centaurea maculosa Cirsium arvense Carduus nutans Carduus acanthoides Onopordum acanthium Cynoglossum ofcinale Cardaria draba Linaria vulgaris Chrysanthemum leucanthemum Linaria dalmatica Tanacetum vulgare Matricaria perforate Tamarix chinensis Melilotus off cinalis Hyoscyamus niger Cirsium vulgare Clematis orientalis Myriophyllum spicatum Lepidium latifolium Elaeagnus angusifolia Anoda cristata Potentilla recta Hibiscus trionum At a minimum, the state requires the local authority to eradicate all of the List A Page 2 of 4 Council Memo species and either eradicate or control all List B species. Some List B species are more or less of a threat in a particular geographic area, as described in 8 CCR 1206 -2. It is important to understand that the state's rules and regulations regarding noxious weeds and best management practices are still evolving. For example, at the time of adoption of 8 CCR 1206 -2, the state did not have a formal management approach to all List B species (e.g., Canada thistle, Russian Olive). Since that time, federal, state, and county best management practices have been developed. In using the term "control," the state rules may mean either "elimination of all populations" or °suppression ", with the distinction depending on the specific plant and a specific geographic area. Local home rule authorities are legally empowered to include additional species in the locally managed noxious weed list. Local governments are not limited by state law to regulate only those plants on the state's List A, B or C. Also, Local governments do not need to wait for the state to publish their plan for management of a particular species in order to take local action. Yellow Sweet Clover ( #17 in list above) is the only species on Avon's designated noxious weed list that is not currently included on any of the states A, B or C list. This plant is highly prevalent on many disturbed or poorly re- vegetated sites in Avon. Town staff originally included this plant in the April list because technical sources report it to be invasive, produce over 100,0000 seeds per plant, outcompete native vegetation, cause anti - coagulation properties in the blood of grazing animals, and be very high in pollen.' Eagle County's Weed Coordinator, Tim Girard, commented that this plant has been used in re- vegetation mixes and can be beneficial for bee keepers. While Avon staff recognizes this, they recommend continued inclusion of this species in Avon's noxious weed list due to all of its other negative attributes. Financial Implications: No change. Recommendation: Staff recommends passage of Ordinance 10 -06 and approval of the updated Noxious Weed Management Plan. Motion: °I move to approve Ordinance 10 -18, Series 2010, Adopting Local Designation of Noxious Weeds." Town Manager Comments: This species is listed as invasive in 26 states including Colorado, Arizona, Texas, Wyoming, and Utah. See: U.S. Forest Service. Weed of the Week: Yellow Sweetclover. Accessed February 2009: http : / /www.na.fs.fed.ustfhpAnvasive olants/weeds/vellow sweetclover.odf Whitson, T.D. (ed.) et al. 1996. Weeds of the West. Western Society of Weed Science in cooperation with Cooperative Extension Services, University of Wyoming. Laramie, Wyoming. United States Department of Agriculture, Accessed online on April 8, 2010 at hftp: / /Plants.usda.gov /lava /profile ?svmbol =M EOF. Page 3 of 4 Council Memo Exhibits: • Copy of Notice • Ordinance No. • Exhibit A: Noxi 10 -18 Adopting Local Designation of Noxious Weeds c)us Weed Management Plan to Ordinance No. 10 -18 Page 4 of 4 Council Memo NOTICE OF PUBLIC HEARING REGARDING DECLARATION OF ADDITIONAL NOXIOUS WEEDS Notice is hereby given, that the Town Council of the Town of Avon, shall conduct a public hearing at the Avon Town Hall, located at One Lake Street, Avon, Colorado, on September 28th, 2010, at 5:30 p.m. or as soon thereafter as possible, regarding the designation of additional noxious weeds. Written comments may be e- mailed to Avon Public Works weeds u avon.org or may be mailed to Town of Avon, P.O. Box 975, Avon, CO 81620. Written comments received by September 22, 2010 shall be included in the Town Council materials for their review and consideration. Copies of the Town of Avon Noxious Weed Management Plan may be obtained from the Town Hall during normal business hours or by Gary Padilla, Avon Road and Bridge Superintendent, Avon Public Works (970) 748 -4100 or via e-mail at weeds a avon.or . The Town of Avon has adopted by reference the List A species as designated by the State of Colorado, Department of Agriculture, in 8 CCR 1206 -2. The authority for local declaration of noxious weeds is pursuant to the Colorado Noxious Weed Act, Article 5.5, Title 35, Colorado Revised Statute, Ordinance No. 10 -06 AN ORDINANCE ENACTING NOXIOUS WEED CONTROL REGULATIONS, and by the Town of Avon's home rule authority. The declaration of additional noxious weeds includes: Black henbane (Hyoscyamus niger) Bull Thistle (Cirsium vulgare) Canada thistle (Cirsium arvense) Chinese clematis (Clematis orientalis) Common tansy (Tanacetum vulgare) Dalmatian toadflax, broad - leaved (Linaria dalmatica) Diffuse knapweed (Centaurea diffusa) Eurasian watermilfoil (Myriophyllum spicatum) Hoary cress (Cardaria draba) Houndstongue (Cynoglossum officinale) Leafy spurge (Euphorbia esula) Musk thistle (Carduus nutans) Oxeye daisy (Chrysanthemum leucanthemum) Perennial pepperweed (Lepidium latifolium) Plumeless thistle (Carduus acanthoides) Russian knapweed (Centaurea repens) Russian-olive (Elaeagnus angusifolia) Salt cedar (Tamarix chinensis, T.parviflora, and T. ramosissima) Scentless chamomile (Matricaria perforata) Scotch thistle (Onopordum acanthium) Spotted knapweed (Centaurea maculosa) Spurred anoda (Anoda cristata) Sulfur cinquefoil (Potentilla recta) Venice mallow (Hibiscus trionum) Yellow sweet clover (Melilotus officinalis) Yellow toadflax (Linaria vulgaris) Copy of Notice TOWN OF AVON, COLORADO ORDINANCE 10 -18 SERIES OF 2010 AN ORDINANCE ADOPTING LOCAL DESIGNATION OF NOXIOUS WEEDS WHEREAS, the Town of Avon ( "Town ") is a home rule authority municipal corporation and body politic organized under the laws of the State of Colorado and possessing the maximum powers, authority and privileges to which it is entitled under Colorado law; and WHEREAS, the Town Council is authorized to declare nuisances, establish fines and penalties, and require abatement of public nuisances pursuant to its home rule authority and pursuant to Colorado Revised Statute §31- 15- 401(1)(c); and WHEREAS, the Town Council is authorized to provide for the removal of weeds pursuant to Colorado Revised Statutes §31- 15- 401(1)(d); and WHEREAS, the Town Council is authorized to implement and enforce the Colorado Noxious Weed Act, C.R.S. §35 -5.5 -101 et. seq.; and WHEREAS, C.R.S. §35 -5.5- 108(3) provides that the governing body of a municipality may declare additional noxious weeds after a public hearing with thirty days notice to the public; and WHEREAS, notice of the local designation of noxious weeds was posted on August 27, 2010 in accordance with requirements in Home Rule Charter of the Town of Avon; and WHEREAS, it is the Town Council's opinion that the health, safety and welfare of the citizens of the Town of Avon would be enhanced and promoted by the adoption of this ordinance; and WHEREAS, approval of this Ordinance on first reading is intended gnly to confirm that the Town Council desires to comply the requirements of the Avon Home Rule Charter by setting a public hearing in order to provide the public an opportunity to present testimony and evidence regarding the application and that approval of this Ordinance on first reading does not constitute a representation that the Town Council, or any member of the Town Council, supports, approves, rejects, or denies this ordinance; NOW THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO, the following: Section 1. Recitals Incorporated. The above and foregoing recitals are incorporated herein by reference and adopted as findings and determinations of the Town Council. Section 2. Adoption of Local Designation of Noxious Weeds. The Town Council, as the governing body of the Town of Avon, hereby adopts the local designation of noxious weeds as Ord. No. 10-18 Adopting Local Designation of Noxious Weeds Page 1 of 3 V3 9.22.30 such weeds are set forth in the Town of Avon Noxious Weed Management Plan, dated August 27, 2010, attached hereto as Exhibit A. Section 3. Noxious Weed Management Plan Adopted. The Town of Avon Noxious Weed Management Plan, dated August 27, 2010, attached hereto as Exhibit A is hereby adopted in its entirety. Section 4. Codification Amendments. The codifier of the Town's Municipal Code, Colorado Code Publishing, is hereby authorized to make such numerical and formatting changes as may be necessary to incorporate the provisions of this Ordinance within the Avon Municipal Code. The Town Clerk is authorized to correct, or approve the correction by the codifier, of any typographical error in the enacted regulations, provided that such correction shall not substantively change any provision of the regulations adopted in this Ordinance. Such corrections may include spelling, reference, citation, enumeration, and grammatical errors. Section 5. Severability. If any provision of this Ordinance, or the application of such provision to any person or circumstance, is for any reason held to be invalid, such invalidity shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are declared to be severable. The Town Council hereby declares that it would have passed this Ordinance and each provision thereof, even though any one of the provisions might be declared unconstitutional or invalid. As used in this Section, the term "provision" means and includes any part, division, subdivision, section, subsection, sentence, clause or phrase; the term "application" means and includes an application of an ordinance or any part thereof, whether considered or construed alone or together with another ordinance or ordinances, or part thereof, of the Town. Section 6. Effective Date. This Ordinance shall take effect seven days after public notice following final passage in accordance with Section 6.4 of the Avon Home Rule Charter. Section 7. Safety Clause. The Town Council hereby finds, determines and declares that this Ordinance is promulgated under the general police power of the Town of Avon, that it is promulgated for the health, safety and welfare of the public, and that this Ordinance is necessary for the preservation of health and safety and for the protection of public convenience and welfare. The Town Council further determines that the Ordinance bears a rational relation to the proper legislative object sought to be obtained. Section 8. No Existing Violation Affected. Nothing in this Ordinance shall be construed to release, extinguish, alter, modify, or change in whole or in part any penalty, liability or right or affect any audit, suit, or proceeding pending in any court, or any rights acquired, or liability incurred, or any cause or causes of action acquired or existing which may have been incurred or obtained under any ordinance or provision hereby repealed or amended by this Ordinance. Any such ordinance or provision thereof so amended, repealed, or superseded by this Ordinance shall be treated and held as remaining in force for the purpose of sustaining any and all proper actions, suits, proceedings and prosecutions, for the enforcement of such penalty, liability, or right, and for the purpose of sustaining any judgment, decree or order which can or may be rendered, entered, or made in such actions, suits or proceedings, or prosecutions imposing, inflicting, or declaring such penalty or liability or enforcing such right, and shall be treated and held as Ord. No. 10 -18 Adopting Local Designation of Noxious Weeds Page 2 of 3 V3 9.22.30 remaining in force for the purpose of sustaining any and all proceedings, actions, hearings, and appeals pending before any court or administrative tribunal. Section 9. Publication by Posting. The Town Clerk is ordered to publish this Ordinance by posting notice of adoption of this Ordinance on final reading by title in at least three public places within the Town and posting at the office of the Town Clerk, which notice shall contain a statement that a copy of the ordinance in full is available for public inspection in the office of the Town Clerk during normal business hours. Ord. No. 10 -18 Adopting Local Designation of Noxious Weeds Page 3 of 3 V19.22.10 INTRODUCED, APPROVED, PASSED ON FIRST READING, ORDERED POSTED AND REFERRED TO PUBLIC HEARING and setting such public hearing for October 12, 2010 at the Council Chambers of the Avon Municipal Building, located at One Lake Street, Avon, Colorado, on September 28, 2010. Ronald C. Wolfe, Mayor Published by posting in at least three public places in Town and posting at the office of the Town Clerk at least seven days prior to final action by the Town Council. ATTEST: APPROVED AS TO FORM: Patty McKenny, Town Clerk Eric Heil, Town Attorney INTRODUCED, FINALLY APPROVED, AND PASSED ON SECOND READING, AND ORDERED PUBLISHED BY POSTING on October 12, 2010. Ronald C. Wolfe, Mayor Published by posting by title in at least three public places in Town and posting by title at the office of the Town Clerk. ATTEST: Patty McKenny, Town Clerk Ord. No. 10 -18 Adopting Local Designation of Noxious Weeds Page 4 of 3 V3 9.22.30 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN ADOPTED BY THE TOWN COUNCIL ACTING AS THE LOCAL WEED ADVISORY BOARD ON OCTOBER 12, 2010 The Town of Avon in accordance with "Colorado Noxious Weed Act ", C.R.S. §35 -5.5 -101 et seq. hereby designates the following plants as Noxious Weeds: Management Method # 1 2 E [:f Common Name: Leafy Spurge Russian Knapweed Diffuse Knapweed Spotted Knapweed Canada Thistle Musk Thistle 7 Plumeless Thistle 8 Scotch Thistle 9 Houndstongue 10 Whitetop/Hoary Cress 11 Yellow Toadflax 12 Oxeye Daisy 13 Dalmatian Toadflax 14 Common Tansy 15 Scentless Chamomile 16 Salt Cedar 17 Yellow Sweet Clover 18 Black henbane 19 Bull Thistle 20 Chinese clematis 21 Eurasian watermilfoil 22 Perennial pepperweed 23 Russian-olive 24 Spurred anoda 25 Sulfur cinquefoil 26 Venice mallow Scientific Name: Euphorbia esula Acroptilon repens Centaurea diffusa Centaurea maculosa Cirsium arvense Carduus nutans Carduus acanthoides Onopordum acanthium Cynoglossum ofcinale Cardaria draba Linaria vulgaris Chrysanthemum leucanthemum Linaria dalmatica Tanacetum vulgare Matricaria perforate Tamarix chinensis Melilotus officinalis Hyoscyamus niger Cirsium vulgare Clematis orientalis Myriophyllum spicatum Lepidium latifolium Elaeagnus angusifolia Anoda cristata Potentilla recta Hibiscus trionum The purpose of this Noxious Weed Management Plan is to adopt a list of noxious weeds for the Town of Avon. The basis for this list is set forth in the "Colorado Noxious Weed Act" C.R.S. §35- 5.5 -101 et seq. Weeds which commonly occur in Avon and which are listed on the state's A, B, and C list at the time of adoption are identified above. In addition, yellow sweet clover (Melilotus officinalis) has been identified as noxious by the Town of Avon. Although this plant is not Town of Avon: Noxious Weed Management Plan Page 1 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds currently listed on the state's list, it is identified as noxious by the town and included herein because it is very invasive, detrimental to cattle, has been found to be problematic in Avon, and is expected to be added to the state's noxious weed list.2 It is expressly understood in this Plan that the above - referenced list shall be inclusive of all "List A" species of noxious weeds to the extent they are found within the Town of Avon and identified for mandatory eradication by the State of Colorado. It is also expressly understood that any and all "List B" species of noxious weeds not currently listed above, but later found within the Town of Avon and identified by the state for mandatory eradication pursuant to state regulation 8 CCR 1203- 19, shall be incorporated into this plan and that no amendment hereto shall be necessary prior to taking enforcement action for the eradication of said species. The Town of Avon may annually review and update this list of noxious weeds pursuant to state statute, or sooner if necessary. I. Introduction The noxious weeds that have currently invaded our community have become a threat to the economic and environmental value of land in the Town of Avon. These weeds are not indigenous to this county and have no natural predators or diseases to keep them in check. They are rapidly displacing desirable vegetation causing a loss of productive wildlife grazing and recreational resources. An integrated noxious weed management plan must include best practice strategies along with the Federal, State of Colorado, Town of Avon and Private land owners, working together to meet the challenges we now face in our state. II. Goals of this plan • Adopting and implementing the Colorado Noxious Weed Act as they apply to the Town of Avon. The Town of Avon Noxious Weed Regulations as it pertains to noxious weeds will automatically update along with all future revisions and amendments to the Colorado Noxious Weed Act. • Education of the public and private landowners concerning weed management issues facing our community. • Work with the Federal, State, County, and private landowners to implement "Best Management Practices. " • Identify, inventory and map out noxious weeds currently in our community and use as a means to monitor our effectiveness and as a tool for future work plans. III. Weed Management Methods The Colorado Noxious Weed Act provides that integrated methods must be utilized in the management of weeds. Integrated methods include but are not limited to: Cultural, 2 This species is listed as invasive in 26 states including Colorado, Arizona, Texas, Wyoming, and Utah. See: U.S. Forest Service. Weed of the Week: Yellow Sweetclover. Accessed February 2009: http: //www.na.fs. fed. us /fhp /invasive plants /weeds /yellow sweetclover.pdf Whitson, T.D. (ed.) et al. 1996. Weeds of the West. Western Society of Weed Science in cooperation with Cooperative Extension Services, University of Wyoming. Laramie, Wyoming. United States Department of Agriculture, Accessed online on April 8, 2010 at hftp: / /plants.usda.gov /Java /profile ?symbol =MEOF. Town of Avon: Noxious Weed Management Plan Page 2 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds Chemical, Biological and Mechanical management. For proper control of a particular weed species, it may be necessary to utilize more than one method. The following general comments regard control methodology apply to all listed or otherwise identified noxious weeds, unless otherwise specifically excluded in the detailed management plan listed below for a particular plant species: • Cultural — those methodologies or practices conducted to favor the growth of desirable plants over undesirable plants. Including but not limited to: maintaining an optimum fertility and plant moisture status in an area, and planting species most suited to an area. (e.g., Grazing, Revegetation for wildlife) • Erosion Control — Healthy plant revegetation of all disturbed sites with acceptable grasses, trees, and other plantings, with a 2 year warranty and extensive weed control during the re- growth period. • Chemical — the use of herbicides or plant growth regulators to disrupt the growth of undesirable plants. (e.g., Herbicides) • Biological — the use of organisms to disrupt the growth of undesirable plants. (e.g., insects, bacteria, pathogens, goats) • Mechanical — practices that physically disrupt plant growth including but not limited to: tilling, mowing, burning, cutting, mulching, hand pulling, and hoeing. Tilling, mowing, mulching, and hoeing are generally only effective if done to plants prior to the flowering stage. After this stage the seeds have formed and these plants must be completely removed from the property by cutting or hand - pulling as part of the mitigation effort Cut plants which include buds, flowers, or seed pods should be placed in clear plastic bags, the bags labeled "noxious weeds ", and landfill disposed. Landfill disposal should be done through a licensed landscape maintenance contractor or by direct deposit in the landfill. Unless otherwise recommended below, no removed weed material which includes buds, flowers, or seed pods should be burned, composted, or heaped, or otherwise left exposed. Note that personal protective equipment (PPE) should be worn when conducting weed mitigation. This may include gloves, long sleeve shorts, full length pants, safety boots, and safety glasses. Mitigation work should be done carefully because some of the weeds and herbicides can cause eye and/or skin irritation. IV. Managed Species Information 1. Leafy spurge - (Euphorbia esula) a perennial that spreads by seed and creeping rootstocks. An extensive root system with vast nutrient reserves makes this plant extremely difficult to control. Management Methods: a) Cultural: seeding perennial grasses can be an effective management tool. Early emerging plant species that utilize early season moisture such as smooth brone (Bromus inermis) or crested wheat grass have reduced leafy spurge density and limited the spread and establishment of new infestations. Alfalfa can also be a good competitor with leafy spurge. b) Chemical: Contact a licensed commercial applicator for specific recommendations for herbicide use. Town of Avon: Noxious Weed Management Plan Page 3 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting local Designation of Noxious Weeds c) Biological: grazing with sheep or goats can stress leafy spurge making it more susceptible to other control methods. Apthona flava and Apthona nigriscutis are two species of flea beetles that have been introduced to attack leafy spurge. Adults feed on foliage during summer and lay eggs at the base of spurge plants. The larvae tunnel the soil and mine the roots as well as the fine root hairs. These insects along will not control leafy spurge but they can weaken the plant making it more susceptible to herbicide treatments or other control methods. d) Mechanical: mechanical methods have not been proven to be an effective management tool on this plant. Comments: A complex of insects, grazing, plant disease and chemical methods will be necessary to stress the plant sufficiently to attain acceptable control. 2. Russian Knapweed - (Acroptilon repens) A creeping perennial weed which once established, becomes extremely difficult to control. In heavy infestations few plants can grow in competition. Management Methods: a) Cultural: dry range seeded with Crested wheatgrass can cause stress in knapweed by using up moisture for spring growth. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: a leaf & stem gall- forming nematode (Subanguina peridus) has been released in the U.S. This nematode had shown limited success in controlling Russian knapweed d) Mechanical: due to the extensive energy reserves in the root system, removal of top growth alone will not provide adequate control of Russian knapweed. In fact recent studies have shown that mowing increases Russian knapweed density and stimulates growth. 3. Diffuse Knapweed - (Centaurea diffusa) is a biennial or short lived perennial which has become one of the most damaging rangeland weeds in the Northwest inter - mountain area. Management Methods: a) Cultural: Seeding of Crested wheatgrass can inhibit the spread of diffuse knapweed in dry climates b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: Two kinds of seed head gall flies ( Uphora affins and Uphora quadrifaciata) attack the seed heads of Spotted knapweed. The larvae of the files induce galls in immature flower heads thus directing nutrients away from seed production. These flies will reduce seed production of the plant but not sufficiently to stop its spread. d) Mechanical: Deep plowing can reduce the stand density. 4. Spotted Knapweed - (Centaurea maculosa) is a biennial or short lived perennial that greatly reduces the range's carrying capacity for both livestock and wildlife. Management Methods: Town of Avon: Noxious Weed Management Plan Page 4 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds a) Cultural: Good grazing management is one of the best defenses against the spread of knapweeds on the range and pasture lands. Proper stocking rates, good livestock distribution and correct timing and deferment of grazing are essential to the maintenance of a healthy range or pasture environment. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: Two kinds of seed head gall flies (Uphora afns and Uphora quadrifaciata) attack the seed heads of Spotted knapweed. The larvae of the files induce galls in immature flower heads thus directing nutrients away from seed production. These flies will reduce seed production of the plant but not sufficiently to stop its spread. d) Mechanical: Deep plowing can reduce the stand density. 5. Canada Thistle — (Cirsium arvense ) A perennial weed with an extensive root system, Canada Thistle reproduces both by seed and by vegetation buds on the roots. This requires a much more extensive management plan than the biennial thistles. Management Methods: a) Cultural: Cultivation may increase the number of plants by spreading the roots to new areas where they may become established. Competitive crops, especially alfalfa and forage grasses may be used to control Canada thistle infestations. Choose aggressive grass with early season vigor to plant in areas where Canada thistle is present. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: Ceutorhynchus litura is a stem weevil whose larvae mine tissues of the leaf, root crown and root. Outward signs of damage by this larvae are not readily apparent but secondary damage is caused by other organisms which enter the plants through exit holes made by the larvae. Urophora cardui is a stem gall fly whose larvae cause galls to form on the stem of Canada thistle plants. The galls reduce the plant's vigor making it less able to compete with other plants or to resist pathogens or attacks by other insects. It is essential that both of these insects be combined with other methods of control for adequate management of Canada thistle. d) Mechanical: Mowing can be an effective tool when combined with herbicide treatment. Mowing alone is not effective unless conducted at two week intervals over several growing seasons. Mowing should always be combined with cultural and chemical control. 6. Musk Thistle — (Carduus nutans) is a biennial weed. Biennial weeds are best controlled in their first year of growth. Very commonly found noxious weed in Eagle County. Management Methods: a) Cultural: The best way to prevent or reduce the amount of biennial thistle is to manage areas that are susceptible to invasion b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. Town of Avon: Noxious Weed Management Plan Page 5 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds c) Biological: Rhinocyllus conicus is a flower head weevil which is widely distributed in Eagle County. This weevil consumes most of the seeds in the terminal flower heads, but has no effect on buds which form later in the season. The conicus weevil can be an effective control method only if it is combined with chemical mechanical controls. Trichosirocalus horridus is a crown weevil which feeds on the growing tip of the thistle rosette. This weevil has been released on numerous occasions in Eagle County but has not yet become established. Due to the very nature of the predator prey cycle the bio control listed above will not completely eliminate the thistle. d) Mechanical: Since these thistles are biennials and do not resprout, they are easily killed by tillage or any method that severs the taproot below the crown of the plant. If dug or cut after seed heads have formed the plants should be burned or otherwise destroyed so the seeds will not mature. Mowing is effective only if done when flowers first open. Comments: A second mowing may be necessary because the plants may recover and produce viable seed later in the growing season. 7. Plumeless Thistle — (Carduus acanthoides). See description and management method for the Musk Thistle ( #6 above). 8. Scotch Thistle — (Onopordum acanthium). See description and management method for the Musk Thistle ( #6 above) 9. Houndstongue — (Cynoglossum officinale) is a biennial weed which is toxic to horses and cattle. The seed is contained in pods, which are covered with barbs enabling them to stick to clothing or animal hair, and thus readily transported. Management Methods: a) Cultural: Maintain range and pasture in good condition through proper irrigation and fertilization. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: No biological controls are available at this time. d) Mechanical: Severing the taproot below the crown will control Houndstongue. After cutting, the plants should be burned or removed if they are in bloom to prevent seed formation. 10. Hoary Cress Whitetop — (Cardaria draba ) is a perennial plant, which is very competitive with native vegetation. Its early seeding habits make it difficult to effect control in a timely manner. Management Methods: a) Cultural: The effectiveness of mowing or cultivation will be increased if perennial grasses or alfalfa are seeded as competitor species. Promote healthy grass in rangeland or pastures by using proper irrigation and fertilization techniques. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: No insects are known to be effective for controlling this weed. Town of Avon: Noxious Weed Management Plan Page 6 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds d) Mechanical: No scientific data is available on mechanical control for this species. Mowing just prior to seed set may reduce overall seed production, but must repeated several times during the growing season. 11. Yellow Toadflax - (Linaria vulgaris) This deep- rooted perennial plant is an aggressive invader of rangeland, pasture and waste areas. Once established on a site it is one of the most difficult noxious weeds to control. Management Methods: a) Cultural: No data is currently available for the control of Yellow toadflax. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: The Calophasia lunula moth larvae can reduce the root reserves and general vigor of Yellow toadflax by defoliating new growth and eating buds and flowers. Gymnetron antirrhini is a capsule weevil which can reduce the amount of seed produced but has little if any effect on stand density. Combine the use of either of these insects with chemical or mechanical control for best results. d) Mechanical: Mowing at bud stage two or three times per year will reduce seed production but will not effect stand density or duration. Repeated cultivation twice a year for two years should slow the spread and reduce seed population. This should be followed by seeding of competitive grasses. 12. Dalmation Toadflax — (Linaria dalmatica) An introduced perennial with a creeping root system. This plant may suppress desirable grasses even in well managed rangeland or pastures. Management Methods: a) Cultural: No data is currently available for the control of Yellow toadflax. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: The Calophasia lunula moth larvae can reduce the root reserves and general vigor of Yellow toadflax by defoliating new growth and eating buds and flowers. Gymnetron antirrhini is a capsule weevil which can reduce the amount of seed produced but has little if any effect on stand density. Combine the use of either of these insects with chemical or mechanical control for best results. d) Mechanical: Mowing at bud stage two or three times per year will reduce seed production but will not effect stand density or duration. Repeated cultivation twice a year for two years should slow the spread and reduce seed population. This should be followed by seeding of competitive grasses. 13. Oxeye Daisy — (Chrysanthemum leucanthemum) A member of the sunflower family is an erect perennial plant with white ray and yellow disk flowers which bloom from June through August. A native of Eurasia, this aggressive plant has escaped cultivation and become a troublesome weed in the Intermountain West. Management Methods: Town of Avon: Noxious Weed Management Plan Page 7 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds a) Cultural: Maintain range and pasture in good condition through proper irrigation and fertilization. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: None known d) Mechanical: Hand pulling or digging before seed head production can used to effectively control small infestations. However, for this method to be successful it is important to remove as much of the underground part as possible. 14. Scentless Chamomile — (Marticaria perforata) An escaped ornamental plant, this annual has become widely established in the eastern part of Eagle County and is a threat to native plant communities. Management methods: a) Cultural: Learn to identify the plant and physically remove them when they first appear. Seed competitive cool season grasses that out compete this plant at its early stage of growth. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: No known biological controls d) Mechanical: Since it is an annual plant, chamomile can be controlled by hand pulling, cultivation, or any type of physical disturbance. 15. Common Tansy - (Tanacetum vulgare) An escaped ornamental, is a perennial plant, from 1 1/2 feet to 6 feet tall with showy button -like flowers. Tansy is a member of the sunflower family and has become widely established on the western slope of Colorado. Flowering typically occurs from July to September. Tansy reproduces by both seed and creeping rootstock. Management methods: a) Cultural: Prevent the establishment of new infestations by minimizing disturbance and seed dispersal, eliminating seed production and maintaining healthy native communities. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: None known d) Mechanical: can be mowed before flowering and seed set to eliminate seed production. This method may have to be repeated to eliminate regrowth from the rootstock. 16. Salt Cedar (Tamarix chinensis) is a evergreen shrub or small tree which grows near water and hydric soils and reaches a height of 5 to 20 feet tall. The leaves are small, scale -like and bluish -green in color. Tiny pink to white colored flowers have five petals and grow on slender racemes. Salt Cedar reproduces by seed. This is an aggressive plant that outcompetes native vegetation and consumes a lot of water. Management methods: a) Cultural: Prevent the establishment of new infestations by minimizing disturbance. Revegetation and active management of revegetated areas is needed for disturbed areas to prevent growth of this weed. Town of Avon: Noxious Weed Management Plan Page 8 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: The Salt Cedar Leaf Beetle (Diorhabda elongate) larvae and adults feed on foliage and can cause plant death if defoliation is consistent. This beetle is commercially available for distribution. d) Mechanical: A bulldozer, chainsaw, or prescribed fire can be used in conjuction with follow -up herbicide treatment for returning sprouts. 17. Yellow Sweet Clover (Melilotus ojficinalis) is an annual or biennial legume which grows from 2 to 6 feet tall. It has small yellow to white flowers in a multiflowered terminal and along auxillary racemes, serrated trifoliate leaves, somewhat resembles alfalfa. It is not native to Colorado and appears on disturbed sites. It is a drought - tolerant plant. Although useful for honey producers, it causes bloat in cattle and anticoagulation of blood. The plant degrades native grasslands and reduces biodiversity by competing for nutrients and by covering and shading native sun- loving plant species. It reproduces by seed, producing as many as 100,000 seeds per plant; seeds may remain viable for up to 20 years. Management Methods: a) Cultural: Prevent the establishment of new infestations by minimizing disturbance. Revegetation and active management of revegetated areas is needed for disturbed areas to prevent growth of this weed. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: Sitona cylindricollis, the sweetclover weevil, may severely damage the plant. Adults of the insect feed on the foliage and larvae feed on the roots of the plant. A sweetclover root borer, Walshia miscecolrella, is a native insect that may damage sweetclover plants on rare occasions. An ash -gray blister beetle, Epicauta fabricii, a striped blister beetle, Epicauta vittata, and a margined blister beetle, Epicauta pestifera, have also been found feeding on the plant. Yellow sweetclover is palatable by livestock - within the risks mentioned above - and plant infestations may be reduced if heavily grazed. d) Mechanical: Hand pull early and when the soil is moist. Completely remove all plants containing seeds. Burning has had variable results, including increasing germination, and is therefore not recommended. 18. Black henbane (Hyoscyamus niger) was introduced from Europe as an ornamental and medicinal herb; it is now found across on the western slope of Colorado. A mature plant reaches 1 to 3 feet in height with foliage that has a fowl odor. Fruits are approximately 1 inch long with 5 lobes. It is often found in disturbed open spaces, roadsides, fields, waste places and abandoned gardens. It grows in most soil types but likes sandy or well drained loam soils. The seed viability or longevity is considered to be 1 to 5 years. All parts of Black henbane are poisonous to both livestock and humans when ingested. The plant is a strong competitor for moisture and nutrients and produces a persistent litter effecting germination and growth of native plants. Management Methods: Town of Avon: Noxious Weed Management Plan Page 9of14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds a) Cultural: Cultural controls are possible in theory, but are very time consuming and expensive. Complete removal of any seedlings or newly established plants by continual hand pulling is also possible. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: N/A d) Mechanical: Hand pull or dig from moist soil, so the entire tap root system can be removed. Tillage will control henbane, but is usually not recommended due to the land it occupies: rangeland, roadsides and pastures. Be sure to bag specimens carefully if removed during or after flowering. Comments: A preventable measure is to guard against disturbance and overgrazing. Controlling plants in the spring or early summer prior to seed production is most effective, follow -up treatments are recommended to pick up missed or late bolting plants. 19. Bull Thistle (Cirsium vulgare) is a biennial forb that was accidently introduced to North America as a seed contaminant. In Colorado, Bull thistles are the only species that are prickly hairy on the top and are cottony -hairy on the undersides of the leaves. Mature plants can produce up to 4,000 seeds per plant. Commonly seen in areas such as pastures, overgrazed rangeland, roadsides, and logged areas. It is not especially shade tolerant. Bull thistle is an aggressive weed and is often a transient species, appearing in recent clear cuts or disturbed areas and becoming a dominant species for several years. It has been reported to cause hay fever in some individuals and is often confused with musk thistle. Bull thistle infestations have been reported to occur in nearly all Colorado counties west of the continental divide, in the Upper Arkansas Watershed, and in pockets on the plains. Heavy infestations can reduce livestock forage. The presence of bull thistle in hay decreases the forage value and lowers the market price. Management Methods: a) Cultural: Prevent the establishment of new infestations by minimizing disturbance and seed dispersal, eliminating seed production and maintaining healthy native communities. Contact your local Natural Resources Conservation Service for seed mix recommendations. Maintain healthy pastures and prevent bare spots caused by overgrazing. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: Urophora stylata, a fly predator, is used to help control this thistle. The female fly lays eggs in the seed head of the thistle. The maggot then consumes the seed in the flower. This species has overwintered in Colorado but the limited numbers will not allow for general redistribution. For more information, contact the Palisade Insectary of the Colorado Department of Agriculture at 970 - 464 -7916. d) Mechanical: Because biennial thistles do not reproduce from their roots, any mechanical or physical method that severs the root below the soil surface will kill the weed. It is necessary to revegetate the site with desirable plants. Tillage, hoeing, or even hand- Town of Avon: Noxious Weed Management Plan Page 10 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds pulling should be successful (not on rangeland), providing it is done before the reproductive growth stages. Comments: The key to effective control is maintaining healthy pastures and rangeland, guarding against disturbance or overuse, and to limit seed production by collecting and destroying plants with seeds. Chemical control is most effective when plants are in rosette stage, spring or early fall. Mechanical controls can be used to eliminate small patches or plants in a later growth stages. 20. Chinese clematis (Clematis orientalis) is an herbaceous to woody vined perennial which can climb up to 12 feet. It is native to Eurasia. It has solitary flowers with four yellow sepals (flowering from August to September) which produces numerous feathery, long - tailed fruits which are conspicuous all winter. This plant prefers roadsides, riparian corridors, and rocky slopes although it is sometimes found in open woods. This species can cause death to young trees and brush. It outcompetes native shrubby and herbaceous species. Plants will completely cover rock walls, trees, bushes and fences. The juice of freshly crushed leaves and stems have blister causing agents. Management Methods: a) Cultural: N/A b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: N/A d) Mechanical: Handpull or dig when soil is moist. Make certain to pull all the roots. Bag specimens carefully so as to not scatter seeds if flowering. 21. Eurasian watermilfoil (Afyriophyllum spicatum) is an aquatic weed with feathery underwater foliage that is native to Northern Europe and Asia. Eurasian watermilfoil spreads most commonly by stem fragmentation, runners, and from free floating plants which eventually root. It can also spread by seed. The plant is typically submersed with stems to 4 in long. Habitats for Eurasian watermilfoil include: ponds, lakes, rivers, streams, canals, and ditches. Usually the plant inhabits slow moving water areas but can infest fast moving water, such as streams and rivers. Eurasian watermilfoil is very invasive. The plant forms very dense mats of vegetation on the surface of the water. Mats interfere with recreational activities (e.g. swimming, fishing, skiing, boating, etc.), create mosquito habitat, reduce native vegetation, and clog intake structures in power generation, irrigation systems, and potable water intakes. Management Methods: a) Cultural: Prevention of Eurasian watermilfoil is the best cultural control. Other methods of cultural controls are possible in theory, but are very time consuming and expensive. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: There is biological control available for Eurasian watermilfoil, but it is not yet approved for use in Colorado. For more information, contact the Palisade Insectary of the Colorado Department of Agriculture at 970 - 464 -7916. d) Mechanical: Hand pulling, raking, harvesting are effective at reducing current abundance of plants and is useful to clear channels or maintain access. However; it is not Town of Avon: Noxious Weed Management Plan Page 11 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds a very good long term control and is very expensive, labor intensive, and several removals are needed each year. Comments: The key to effective control is typically prevention of uncontrolled monocultures . Chemical and mechanical controls are well developed, but provide short to medium -term control. 22. Perennial pepperweed (Lepidium latifolium) is an extremely invasive perennial forb introduced from Europe and Asia as a containment in sugar beet seed. Pepperweed reproduces both by seed and vegetatively by roots and shoots. Pepperweed has tiny white spoon- shaped petals on the flowers. It readily invades disturbed and bareground areas. Pepperweed is a serious threat because it alters ecosystems by acting as a "salt pump" absorbing salts from deep in the soil. The plant then excretes the salt through the leaves and deposits it on the surface soil. Since most desirable plants do not tolerate high saline concentrated soils, the entire plant composition and diversity of the area changes. Large monocultures and dense litter layers prevent native plants from regenerating. Pepperweed displaces native plants and wildlife habitats, reduces food quality for wildlife and reduces agricultural and pasture production. Management Methods: a) Cultural: Prolonged spring flooding of new growth will kill pepperweed. Grazing is not recommended because the plant may be toxic. Reestablishing the native or desired plants can take years, so repeat plantings must be repeated, but it can aid in controlling populations. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: Biological control is not a viable option because 11 other species of native Lepidium are on the Endangered species list, and the risk to these species as well as agricultural species is too great. d) Mechanical: Due to the deep, brittle root, most mechanical methods are not recommend, and can actually propagate, spread and increase the density of pepperweed. Hand pulling can also bring seeds to the soil surface, and spread pieces of root, which will sprout. However, spring mowing combined with chemical treatments can be effective. Comments: It is important to prevent establishment of large populations via early detection and removal. Planting desirable and competing grasses and forbs is recommended Herbicide treatments are a good option if used during the bud to flowering stage of the plant. 23. Russian -olive (Elaeagnus angusifolia) is a perennial tree or shrub that is native in Europe and Asia. The plant has olive- shaped fruits, silver color at first then becoming yellow -red when mature. Russian olive can reproduce by seed or root suckers. Seeds can remain viable for up to 3 years. The plants extensive root system, sprouts root suckers frequently. The lower surface is silvery white with dense scales, while the upper surface of the leaf is light green in color. Previously thought to be a beneficial windbreak tree, it since has been deemed detrimental to the environment because it competes native vegetation, interferes with natural plant succession and nutrient cycling, and taxes water reserves. Russian olive can grow in a variety of conditions. Although Russian-olive provides a plentiful source of edible fruits for birds, ecologists have found that bird species richness is actually higher in riparian areas dominated by native vegetation. The key to effective control of Russian olive Town of Avon: Noxious Weed Management Plan Page 12 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds is preventing establishment of the trees or shrubs. The state of Colorado mandates control state -wide and requires eradication in most riparian areas. Management Methods: a) Cultural: NIA b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. Biological: Tubercularia canker overwinters on infected stems and spreads via rain - splash, animals, or pruning implements to open wounds in the bark. Infected tissue becomes discolored or sunken. Entire stems may be girdled and killed, and the disease can deform or kill stressed plants over time. For more information, contact the Colorado Department of Agriculture's Insectary in Palisade, Colorado at 970 - 464 -7916. d) Mechanical: Cut down the tree. Mowing with a brush type mower, followed by removal of cut material, is another options for smaller shoot - hedges. Stump sprouting commonly occurs after cutting down the tree, and excavation of the entire stump can trigger root sprouting. Burning is practical when conditions support a long hot fire and most effective in summer or early fall (burn permit required, call the Eagle River Fire Protection District at 748 - 9665). Comments: As a water conservation measure, Avon requires elimination of existing Russian Olive trees from water courses but allows continued stand on higher ground where property owners commit to control measures. Avon's weed management requirements on this species are as follows: • Removal is required if the tree is within 25 feet of the high water mark of a permanent creek, stream, river; or within 25 feet of the top or rim of an irrigation canal, ditch or ephemeral water course. • Removal or control is allowed if tree is outside of water course boundaries. A written commitment by the property owner or property manager for controlling the spread of this species must be on -file to remain in compliance with Avon's Noxious Weed Ordinance. Contact Avon Public Works, 500 Swift Gulch Rd, Avon 81620, call 970 -748- 4100 or by e -mail at weeds'a avon.org. Replacing with native trees is important once Russian olive has been removed, and is required when the tree had previously been part of approved site landscaping. Contact Avon Community Development at 970 - 748 -4030 for information about modifying your landscaping plan. 24. Spurred anoda ( Anoda cristata) is a summer annual forb with a low growing, spreading profile. The seedlings have one round and one heart- shaped cotyledon with hairs along the margins of the leaves. The flowers appear August through November and are light blue to lavender in color. Habitats include: ditches, within crops, along roadsides, gardens, waste areas and disturbed sites. Spurred anoda is considered an agricultural weed and is found mainly in agricultural crops (corn, cotton, beans, etc.). Management Methods: a) Cultural: Prevent the establishment of new infestations by minimizing disturbance. Revegetation and active management of revegetated areas is needed for disturbed areas to prevent growth of this weed. Town of Avon: Noxious Weed Management Plan Page 13 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds b) Chemical: N/A c) Biological: N/A d) Mechanical: Hand pulling or digging when soil is moist, making sure to get the roots to prevent resprouting. Removing flowers before the plant sets seed will also be effective. Be sure to bag specimens carefully as not to spread seeds. Comments: Preventing seed production is key. Small patches can be controlled by hand pulling or hoeing 25. Sulfur cinquefoil (Potentilla recta) is a perennial forb that is native to Eurasia. Leafstalks have conspicuous perpendicular hairs and leaves appear green on the underside; plants can grow 28 inches in height. The flowers are pale yellow. Sulfur cinquefoil grows on dry sandy, gravelly, and rocky soils. Bareground is prime habitat for weed invasions. It is important to properly identify sulfur cinquefoil, since it resembles the native cinquefoils. Management Methods: a) Cultural: Increasing the competitiveness of native species can assist in preventing establishment of Sulfur cinquefoil. Contact your local Natural Resources Conservation Service for seed mix recommendations. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: Biocontrol species have been used in trials, since Sulfur cinquefoil is similar to strawberries though, the insects used are considered pests. For more information, contact the Colorado Department of Agriculture's Insectary in Palisade, Colorado at 970 - 464 -7916. d) Mechanical: Mowing is not effective, as new shoots will replace the cut steams. Hand dig or pull when soil is moist is effective on small infestations. Be sure to dig up as much of the root system as possible, especially since root fragments can produce new plants. Comments: Hand pulling or digging when infestations are small and the soil is moist combined with use of herbicides has proven to be effective. 26. Venice mallow (Hibiscus trionum) is a summer annual forb that has a spreading profile and is native to Europe. The seeds are dark brown and can remain viable for 50 years. The cotyledons are round with hairy petioles. The stems are erect and hairy, growing to about 18 inches tall. The first true leaves have toothed margins and are alternate. Flowers are a light sulfur to yellow color with a red to purple center which only last a couple of hours. Venice mallow is an agricultural weed. Management Methods: a) Cultural: Outcompeting Venice mallow, is difficult with native grasses and forbs, since Venice mallow likes agricultural crop areas. But, contact your local Natural Resources Conservation Service for seed mix recommendations that may help in rangeland areas. Bareground is prime habitat for weed invasions. b) Chemical: Contact licensed commercial applicator for specific recommendations for herbicide use. c) Biological: N/A Town of Avon: Noxious Weed Management Plan Page 14 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds d) Mechanical: Hand pulling or digging when soil is moist, making sure to get the roots to prevent resprouting. Removing flowers before the plant sets seed will also be effective. Be sure to bag specimens carefully so as not to spread seeds. Comments: Best control is to prevent establishment of the plant and seed production with early detection and physical removal. Herbicide treatments are another control option. Multiple applications or a pre- emergence application will be most effective. When soils are moist, hand pulling or digging is effective provided that you bag the removed plants. V. Acknowledgements The Town of Avon sincerely appreciates the great work done by botanists, scientists, and others at the State of Colorado, Department of Agriculture and at the Colorado State University Extension offices. These resources were the primary source of all of the technical information contained in this plan. State and CSU staff reviewed this document prior to the Town's 2010 adoption. Town of Avon: Noxious Weed Management Plan Page 15 of 14 8/27/2010 EXHIBIT A: TOWN OF AVON NOXIOUS WEED MANAGEMENT PLAN, dated August 27, 2010 Exhibit A to Ordinance No. 10 -18 Adopting Local Designation of Noxious Weeds State of Colorado Department of Agriculture Noxious Weed Program (303) 239 -4100 httn: :www.col_orado.gov /cs/ Satellite/ Agriculture- Main/CDAG /1174084048733 Colorado State University Extension Eagle County Office P.O. Box 239 441 Broadway Eagle CO 81631 (970) 325 -8630 up: "www.eaglecounty.us /csu/ For more information, including color photos of all the species listed here, please contact either of the above resources. If you have general questions on noxious weeds or have received a noxious weed violation notice, please call Avon Public Works at (970) 748 -4100. Town of Avon: Noxious Weed Management Plan Page 16 of 14 8/27/2010 TOWN OF AVON,, COLORADO AVON AVON WORK SESSION MEETING FOR TUESDAY, SEPTEMBER 28, 2010 MEETING BEGINS AT 1:15 PM AVON TOWN HALL, ONE LAKE STREET PRESIDING OFFICIALS MAYOR RON WOLFE MAYOR PRO TEM BRIAN SIPES COUNCILORS RICHARD CARROLL, DAVE DANTAS, KRISTI FERRARO AMY PHILLIPS, ALBERT "Buz" REYNOLDS, JR. TOWN STAFF TOWN ATTORNEY: ERIC HEIL TOWN MANAGER: LARRY BROOKS TOWN CLERK: PATTY MCKENNY ALL WORK SESSION MEETINGS ARE OPEN TO THE PUBLIC EXCEPT EXECUTIVE SESSIONS COMMENTS FROM THE PUBLIC ARE WELCOME; PLEASE TELL THE MAYOR YOU WOULD LIKE TO SPEAK UNDER No. 2 BELOW ESTIMATED TIMES ARE SHOWN FOR INFORMATIONAL PURPOSES ONLY, SUBJECT TO CHANGE WITHOUT NOTICE PLEASE VIEW AVON'S WEBSITE, HTTP: / /WWW."ON.ORG, FOR MEETING AGENDAS AND MEETING MATERIALS AGENDAS ARE POSTED AT AVON TOWN HALL AND RECREATION CENTER, ALPINE BANK, AND AVON LIBRARY THE AVON TOWN COUNCIL MEETS ON THE SECOND AND FOURTH TUESDAYS OF EVERY MONTH 1:15 PM — 3:00 PM 1. EXECUTIVE SESSION: a. Personnel Matters concerning the Town Manager and Town Attorney pursuant to §24- 6- 402(4)(f) of the Colorado Revised Statutes. b. Receiving legal advice pursuant to Colorado Revised Statute §24-6 - 402(4)(b) related to pending litigation regarding Town of Avon v Traer Creek Metropolitan District, 2008 CV 0385 and Traer Creek, LLC, et.al. v Town of Avon 2010 CV 316 3:00 PM 2. INQUIRY OF THE PUBLIC FOR COMMENT AND APPROVAL OF AGENDA 3:00 PM —3:15 PM 3. COUNCIL COMMITTEE AND STAFF UPDATES a. Master Sign Program ( "MSP ") Amendments within the West Town Center District Investment Plan Area (Sally Vecchio, Asst. Town Manager Community Development) Review program as approved by the Planning & Zoning Commission b. Financial Matters (Finance) Memo only 3:15 PM -4:00 PM 4. BUDGET 2011: FINAL CIP BUDGET & FIVE YEAR LONG RANGE PLANS (Justin Hildreth, Town Engineer) Review final 2011 budget and five year plan a. Harry A. Nottingham Park Pavilion Update 4:00 PM — 5:00 PM 5. EAGLE RIVER WATER AND SANITATION DISTRICT: RESULTS OF THE DISTRICT'S 2008 -09 EAGLE RIVER AND GORE CREEK SAMPLING WORK (Linn Brooks, Assistant Manager, ERWSD) Presentation examining the correlation between surface water concentrations of nutrients (phosphorous and nitrogen) and populations of macro - invertebrates as measured by two different invertebrate sampling methods 5:00 PM 6. ADJOURNMENT Avon Council Meeting. 10.09.28 Page 1 of 5 Memo To: Honorable Mayor and Town Council Initials Thru: Lary Brooks, Town Manager Approved by: Sally Vecchio, Asst Town Manager, Com Dev From: Jared Barnes, Planner I Date: September 28, 2010 Re: Master Sign Program (MSP) Amendments within the West Town Center District Investment Plan Area Summary: At its Sept 7 and Sept 21, 2010 meetings, the Planning and Zoning Commission (PZC) approved amendments to the Master Sign Plans for the Seasons at Avon Building and the Slifer, Smith, and Frampton Center Building. Both of these properties are located in the West Town Center District and subject to the guidelines of the West Town Center Investment Plan ( WTCIP). The PZC staff reports are attached (Attachments A and C) as well as meeting letters that summarize the PZC motions for each application (Attachments B and D). • In the case of the Seasons application, the PZC found that the sign program was generally consistent with the WTCIP sign guidelines; although staff believes that the PZC erroneously approved a type of sign (back lit, channel letters) along Main Street that is inconsistent with the guidelines. • In the case of the Slifer, Smith, and Frampton Center Building, the PZC felt that the exterior lighting requirement did not apply in this case, where the applicant was requesting a non -lit sign option for tenant signs facing the building's interior parking lot. PZC found that a non -lit sign in this location did not impact development along Main Street. Staff concurs with this interpretation. If the Council finds that PZC did not accurately interpret the West Town Center Investment Plan Sign Guidelines (Attachment E) with respect to both or either of these applications, then the Council may appeal the PZC decision pursuant to Sec. 2.16.160 of the AMC, which allows appeals to the Council if notification by mail is made to the applicant within 5 working days of the PZC decision (Sept 28, 2010). The Council is required to act on the appeal within 30 days of mailing notice. Discussion: The WTCIP was adopted by the Town in August 2007, as a regulatory document that created a separate review process, design guidelines, and applied form -based zoning principals to all properties located within its boundaries. Design Guideline E.10, General Sign Requirements, of the WTCDIP states, "Signs must be externally illuminated," and Design Guideline E.11, Prohibited Signs, states, "Cabinet, box, or "can" signs with illuminated translucent backgrounds and silhouetted letters" are prohibited. Staff believes that the approval of the Seasons at Avon Sign Plan, specifically the Tenant Identification Signs (C1 -32 of the MSP amendment) violates these two provisions. Town Manager Comments: Attachment Staff Report — Master Sign Program Amendment O September 21, 2010 Planning & Zoning Commission meeting Report Date September 17, 2010 Legal Description Lot 1, Avon Town Square Subdivision Zoning Town Center (TC) Address 137 Benchmark Road Prepared By Jared Barnes, Planner I Summary of Request Monte Park (the Applicant), representing the Slifer Center Condominium Association (the Owner) of Lot 1 of the Avon Town Square Subdivision (the Property) has requested an amendment to the Master Sign Program (MSP) for the commercial building (the Application). The Applicant proposes to modify the existing MSP to allow for a permanent non -lit sign option for individual tenant spaces located on the first floor of the building. The existing MSP (Exhibit C) was approved in November, 1993 and has not been updated since. Recent applications for individual signs have demonstrated a desire for non -lit tenant signage, which is currently not permitted in the MSP. Process All new MSPs as well as amendments to existing MSPs require review and approval by the Planning and Zoning Commission. The Planning and Zoning Commission first considered the application on August 3, 2010 and tabled its decision due to a lack of clarity in the information provided at the meeting. The application has been revised and provides more clarity as well as examples of proposed signage. Property Description The building is located along Benchmark Road and Main Street on the north side of the building, and an interior parking lot on the south side. There are a mix of uses in the building including general office uses, retail shops, and other service oriented shops. The approved MSP sign program includes building identification and tenant signs for all first floor tenants as well as the garden level tenants. The first level tenants are required to have reverse pan channel letters, while the garden level tenants have externally illuminated redwood and signfoam signs. Policy Analysis The Property is located within the West Town Center District Investment Planning Area, which promotes buildings that address and engage the future Main Street. The Property includes a number of first floor retail spaces that are oriented to both the future Main Street and the interior parking lot to the south. . The West Town Center Investment Plan includes General Sign Requirements for individual properties and tenant within the planning area. The Sign Requirements require all signs to be externally illuminated and recommends creative design, letter size and locations for signs that are proportional to the size of the store front. The proposed MSP does create a maximum size for individual letters and the entire sign area, while still allowing flexibility with regard to sign name and type of font. The proposed MSP provides a non -lit sign option for storefronts located on the parking lot side of the building, Staff believes that this option is not inconsistent with the intent of the Sign Guidelines, because the north facing side of the building, which is visible from Main Street will still be required to have illuminated tenant signs. Planning Analysis The proposed MSP clarifies the color of tenant signage to rectify a discrepancy between the actually installed sign colors and the existing MSP's color choice. The addition of dimensional letters for non -lit signs on the first floor is similar to the dimensional letters used for the building identification signs and will not negatively impact any adjacent properties. According to the Sign Code, Section 15.28.070, the Planning & Zoning Commission shall consider the following criteria in reviewing this design application: 1. The suitability of the improvement, including materials with which the sign is to be constructed and the site upon it is to be located. 2. The nature of adjacent and neighboring improvements. 3. The quality of the materials to be utilized in any proposed improvement. 4. The visual impact of any proposed improvement, as viewed from any adjacent or neighboring property. 5. The objective that no improvement will be so similar or dissimilar to other signs in the vicinity that values, monetary or aesthetic, will be impaired. 6. Whether the type, height, size, and /or quality of signs generally complies with the Sign Code, and are appropriate for the project. 7. Whether the sign is primarily oriented to vehicular or pedestrian traffic, and whether the sign is appropriate for the determined orientation. Recommendation Staff recommends APPROVAL of the Master Sign Program Amendment application for Lot 1, Avon Town Square Subdivision, subject to the criteria and corresponding finding included in the recommended motion below. Recommended Motion "I move to approve this Master Sign Program Amendment application Lot 1, Avon Town Square Subdivision, subject to the FINDING that the MSP is in conformance with the Sign Code (Chapter 15.28 of the AMC) and the West Town Center District Investment Plan." Exhibits A: Vicinity Map B: Proposed MSP C: Existing MSP VON C O L O R A D O September 22, 2010 Monte Park Signs Design & Graphics PO Box 2994 Avon, CO 81620 Attachment B Post Office Box 975 One lake Street Avon... a smoke free community Avon, Colorado 81620 970 - 7484000 970 -949 -9139 Fax Relay recognized viwmavon.org RE: Master Sign Program Amendment — Slifer, Smith and Frampton Center Lot 1, Avon Town Square Subdivision Monte: At their September 2181, 2010 meeting the Town of Avon Planning and Zoning Commission APPROVED your Master Sign Program Amendment application for the above - mentioned property. The Commission approved the amendment, subject to the. following conditions: 1. The Town of Avon will proposed modifications to the Sign Code (Chapter 15.28) regarding illumination standards and hours for individual business sings. These modifications will apply to this approval. And with the following finding: The north facing signs will still be illuminated, while the south facing signs will have the option for illumination or non - illumination due to the automobile orientation of this elevation of the building. If you have any questions regarding this approval please feel free to contact me directly at 748.4023. Regards,1^ Y� J r Barnes nner I Cc: File (BSN10007) F.Vianning & Zoning CommissionlMeeting Letters12010109211011-ot 11 ATSO Slifer, Smith, and Frampton Center MSP Amendment Revised.doc Staff Report — Master Sign Program Amendment V September 7, 2010 Planning & Zoning Commission meeting Attachment Report Date September 1, 2010 Legal Description Lot 62/63, Block 2, Benchmark at Beaver Creek Subdivision Zoning Town Center (TC) Address 137 Benchmark Road Prepared By Jared Barnes, Planner I Summary of Request Matt Trasen (the Applicant), representing the commercial interest of the Seasons at Avon (the Property) has requested an amendment to the Master Sign Program (MSP) for the Property located at 137 Benchmark Road. The proposed MSP, dated August 23, 2010 is attached as Exhibit B. Process All new MSPs as well as amendments to existing MSPs require review and approval by the Planning and Zoning Commission. The original MSP was approved in 1994 and is all but obsolete given the nature of the tenant mix of the building. At that time, Vail Associates was the primary tenant in the building (occupying nearly half of the first floor tenant space). As a condition of the PZC's approval of the exterior remodel the Applicant was required to submit a MSP Amendment application. This application satisfactorily addresses this condition. Property Description The Property is 3.25 acres with Benchmark Road frontage on the south and west sides of the building, the future planned Main Street on the north side, and the pedestrian focused Lettuce Shed Lane on the east side. An exterior `facelift' of the building is nearly complete, which included an entire repaint, aesthetic treatments to the port- cochere, and other treatments predominately on the south building elevation. The improvements range from repainting to new materials with the introduction of stone base elements. Landscaping alterations are underway, as is some of the final upper level painting. There are a mix of uses currently in the building including general office uses, restaurants, a preschool, and 104 dwelling units on the upper levels. The existing MSP, (Exhibit C) was approved when the main level of the building was almost entirely occupied by a single tenant, Vail Associates. The program included building identification and directional signage, as well as tenant signs for up to eight (8) first floor north facing tenants. The building has since been converted to allow for a greater number of first floor tenants. Policy Analysis The Property is located within the West Town Center Investment Plan Area, which promotes buildings that address and engage the future Main Street, which runs along the north side of the Property. The Property includes a number of ground level retail spaces oriented to Main Street. The proposed MSP includes several tenant signs on the north side of the building. Additionally, new building identification and entrance signs with gooseneck lighting are also proposed on the north side of the building. The West Town Center Investment Plan also recommends a directory sign to be located on the north side of the building, which is near the Property's proposed Main Entry Identification sign. The West Town Center Investment Plan discusses signage for individual properties and tenant within the plans area. This plan requires that all signs be externally illuminated with the lighting components bearing a U.L. label. The MSP amendment proposes to internally illuminate the signage with the exception of the tower identification signs (F1 and F2) and main entry identification sign (G1). Planning Analysis The proposed MSP includes mounted and site signage for the entire Property. A Sign Placement Plan, which shows the locations of the building identification and ground- mounted monument signs, is located on page 1 and a Sign Placement Plan for Tenant Signs is located on page 2 of the MSP. The Building Identification Signs and Tenant Signs will have reverse pan channel lettering with internal LED illumination. Building service signs are not illuminated. All Building identification letters are to be painted dark green and olive. All building service signs are painted semi -gloss black. The color of Tenant Signs will be tenant preference. The proposed location of the Building Identification Signs is consistent with what currently exists, except for the Building identification signs (E1, E2, G1, and 11). The proposed quantity and location of Tenant Signs has increase significantly from the existing sign plan due to the conversion of the Vail Resorts office space into smaller office and retail spaces. Two double -sided monument signs are proposed at each driveway entrance to the port- cochere on Benchmark Road. The monument sign adjacent to the western most driveway (11) is 6 ft high and 3 ft wide, with a stone base. Push through back lit letters with up to 4 tenant panels is proposed. The monument sign adjacent to the eastern most driveway (12) is 5 ft high and 10 ft wide, with a stone base. Push through back lit lettering with up to 4 tenant panels is proposed. The site access off of Benchmark Road is one -way traffic from the east to west. The western monument sign location (11) appears to have little necessity to help direct traffic into the building, while eastern monument sign location (12) would be better suited for this purpose. The Sign code requires all signs to be a minimum of ten (10) feet from all properties lines. As proposed, the eastern monument sign (12) does not appear to meet this requirement. Staff recommends that the applicant modify the proposed eastern monument sign (12) to reduce it in size and provide sufficient documentation to ensure that the sign is at a minimum ten (10) feet from all property lines. According to the Town of Avon Sign Code, Section 15.28.070, the Planning & Zoning Commission shall consider the following criteria in reviewing this design application: 1. The suitability of the improvement, including materials with which the sign is to be constructed and the site upon it is to be located. Staff Response: The materials are of high quality and appropriate for the site and the building. 2. The nature of adjacent and neighboring improvements. Staff Response: There are several existing and planned public improvements in the vicinity of the Property, as well as a number of locations where the proposed signs can be viewed. The majority of the signs in the surrounding area are either internally lit box signs such as at the Avon Center, or internally lit pan channel letter signs at Avon Town Square and the Slifer, Smith, and Frampton building to the east. The proposed MSP is consistent with the quality of the surrounding and planned improvements, but does not comply with the West Town Center Investment Plan as stated previously. 3. The quality of the materials to be utilized in any proposed improvement. Staff Response: As mentioned, the materials to be utilized are of high quality and appropriate for their application. 4. The visual impact of any proposed improvement, as viewed from any adjacent or neighboring property. Staff Response: If the Main Street improvements are constructed in the future the entire north side of the building will be highly visible. The tenant signs are to be internally lit, although the Applicant is requesting a non -lit option as well. The West Town Center Plan, General Sign Requirements (E.10), requires all building signs in the District to be externally illuminated, and that signs remain illuminated during shopping /business hours. In addition, the large building identification signage on upper portion of the east elevation (E2) could have a negative impact to a future building on Lot 61 (located directly to the east of the Property). Staff recommends that this sign be removed or lowered. 5. The objective that no improvement will be so similar or dissimilar to other signs in the vicinity that values, monetary or aesthetic, will be impaired. Staff Response: Monetary and aesthetic values of other signs in the vicinity will not be impaired by the proposed MSP. 6. Whether the type, height, size, and /or quality of signs generally complies with the Sign Code, and are appropriate for the project. Staff Response: The type, height, size, and quality of signs are generally in compliance with the Sign Code; however, some discrepancies do exist. The addition of tenant signage on the two monument signs is redundant with the tenant signage (C1 -C32), which is highly visible and does not necessitate additional signage at the vehicular entrance and exits of the building. The purpose of a building identification sign is to introduce the building and not individual building tenants. Furthermore, staff is concerned with the location of the monument signs, which need to be at least ten feet from the property line. In order to approve these sign locations, a more detailed site plan is required. As stated above the location, the type and size of the building identification signs located on the east elevation could have a negative impact on future buildings. In addition this sign and the west elevation sign do not promote the pedestrian nature of the West Town Center District. Specifically the east elevation signage should be designed for the pedestrian travel along Lettuce Shed Lane. Staff recommends that these signs be both reduced in height on the building and overall size of the sign area and individual letters. In addition, the applicant should consider treating the blank walls on these elevations with murals, color, or some other treatment to add visual interest to the adjacent common spaces. The building identification signs located on the port- cochere (Al and A2) as well as the ones located on the east and west elevations (E1 and E2) should be allowed to have internal illumination. These should be viewed differently since they are not intended to address the retail element or pedestrian nature of Main Street. The suitability of signage for the three (3) second level tenant spaces is also questionable. It is uncommon for second story units to have tenant signage. Given the overall and significant increase in the number of tenant signs requested, staff recommends that the second story signs not be permitted. 7. Whether the sign is primarily oriented to vehicular or pedestrian traffic, and whether the sign is appropriate for the determined orientation. Staff Response: The monument signs and a majority of the building identification signs are oriented to vehicular traffic, while the tenant signs are orientated to both pedestrian and vehicular traffic. Recommendation Staff recommends CONDITIONAL APPROVAL of the Master Sign Program Amendment application for Lot 62/63, Block 2, Benchmark at Beaver Creek Subdivision, subject to the criteria and corresponding findings listed in this report, and with the conditions included in the recommended motion below. Recommended Motion "I move to approve this Master Sign Program Amendment application Lot 62163, Block 2, Benchmark at Beaver Creek Subdivision, with the following conditions: 1. The western monument sign (l1) be removed from the MSP; 2. No individual tenant signage is permitted on the eastern monument sign (12). It must be demonstrated that this sign is setback at least ten (10) feet from the all property lines prior to permit. Correspondingly, the size of these signs shall be reduced to one that is no larger than the proposed western monument sign (11); 3. All first floor tenant signs be modified to remove the non -lit option as well as modify the signage specifications to require external illumination; 4. The second level tenant signs (C13, C30, and C32) must be removed as options; and 5. Reduce the size of the building identification signs on the east and west elevations and lower the height to better address the pedestrian nature of these areas. and subject to the FINDING that the MSP is in conformance with the Sign Code (Chapter 15.28 of the AMC), if the listed conditions are met." Exhibits A: Vicinity Map B: Photographs of the Property (specifically the monument sign location) C: Proposed MSP, dated August 23, 2010 D: Existing MSP, dated August, 1994 r/ I z N W Z C M C N N Z W � G Q z J W z 0 4A V) c 0 Q R N C 0 N d N 2 G V C i�+ /0 V w C !C i c Q W v •L Cv] C W L Q z 9W m Z L N 4A u W c a+ O no 3 0 pt0 C G i/f C� C r Q m V a LL LL W • 1 W z LU Q a z W CA W J U � J C,�^ Z LLJ V T 2 Q c Q N c 0 w t E 0 c 0 m v c I 4 r ''�, � i. +. , j�f 1G • .tip r. 4'. r ca s f l • 1 r rr � • 1 W z LU Q a z W CA W J U � J C,�^ Z LLJ V T 2 Q c Q N c 0 w t E 0 c 0 m v c I 0 F- ,,Z^^ v z W N S z Z a�2 z� t7 V1 V n v Z ° 0 N O¢ N Z Z O = Q 0 1 ~ �0 ZJ W 'O /^D VJ � F WW W a W U r L J I J O� O� R W 4 c W 0 Q Y R N C N R 0J N G V C N �O V w C 10 C .� C O t0 V t0 IO v c co L LLI_ �R Z F M tin na T i : 2 L I� I I b mall ear 'III 0 N z 31 I � 1 I 11 ZD fV 1 1 1 m ,g a . 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E 8 its ZZ l7 z C' S I 1 Z ILA uj • tA LLJ r R 2Y C V N C O N N N N 2C C O V C O V w c R, i E1l c t0 V •L �1 wJ is W L Z Ob -�E LLJ z too, z Z o_ 9 i Ck W �L Ul LU 0*- m g cr Z Lli c 0 0 'A M 4) V) A) M 2 CL E 0 0 V c 0 eo 4. c ZN- $ —z 0 LU � � LU Z Z �2 ƒ k # X22@) 2� 2E )� �} G \�E \; �t00 §f20 ±�\ Gr m »m`3©Q� �7# -£�- e = ®a•�E �fi«eE'0 « _. -. z��E® ( 4z ■ ■2R_ !�f �§k12 1.2 #$$ §$ 2a ■4§ §!�$§ Z t -# $ 2 � )� / E E / 2 k \ § J / k \ � k _ R § � 0 � Q _ � ■ � ■ ■ � � 1 � z °G 0 a r f c 0 Y m N C O N m v N t O V C i+ m V w C m C Q f+ V ,L W w i L C o L 0 R A D o September 22, 2010 Matt Trasen Gart Properties 299 Milwaukee St., Suite 501 Denver, CO 80206 Avon... a smoke free contnuudly Attachment 0 Post Office Box 975 One Lake Street Avon, Colorado 81620 970 - 748 -4000 970 -949 -9139 Fax Relay recognized ►vmv.avomorg RE: Master Sign Program Amendment — Seasons at Avon Lot 62 -63, Block 2, Benchmark at Beaver Creek Subdivision Matt: At their September 7t', 2010 meeting the Town of Avon Planning and Zoning Commission APPROVED your Master Sign Program Amendment application for the above - mentioned property. The Commission approved the amendment, subject to the following conditions: 1. It must be demonstrated that this sign is setback at least ten (10) feet from all property lines prior to permit, 2. All first floor tenant signs be modified to remove the non -lit option, 3. Tenants that occupy both a first and second story unit shall only receive a first story sign; 4. Tenants that occupy a second story unit only shall receive a sign on the second story; 5. Revise the language for tenant signage to encourage three dimensional signs (i.e. blades and(or dimensional creative signs) per E.10: General Sign Requirements of the West Town Center Investment Plan. These signs shall be reviewed by the PZC and the Town may, at its discretion, waive application fees for review.; and S. Revise the MSP amendment to remove building identifications signs E1 and E2. And with the following finding: 1. The reverse pan channel letters meet the intent of externally illuminated criteria within section E. 10. General Sign Requirements of the West Town Center Investment Plan. If you have any questions regarding this approval please feel free to contact me directly at 748.4023. Regards, Ja ernes Vz erI Cc: File (BSN10008) F.tPlanning 6 Zoning CommissionWeeting LettersL7010%0921101Lot 62 -63 Block 2 BMBC Seasons MSP Amendment Reviseddoc Attachment E °o O ■� Q ■� W C v U b w C 9S C u 9 b u eo El 9v� u r' $ °a4 5 u ° s � EL T 77 ° G b L a pu ~ v 3+ 9 v o a E a 6 rol 0 0 C) ° u a ° m °u d EL El So pq a R a a a c d E 8 `u' v c E El v n 93 0 9 g, & o 'd c w o u y C ' b Agg o v py? u ,`big q y ug Q q n tt C o g 8 v e$ u n Q ^a R n,, 'v� g •`�„ •° p .� °'0^01 `� aL' c D 6 v w 0 o � E a ep v d 3 ° F3 to l7 •L '� 01 E a o n 'n °u W 0' wu m C °u 'y o cY c � P N L H n 0 j7 n O E a d � A m fi A P C G P D H L P fi D v p °As8 e � g v lY q g m �D 8 E y$ o a a 8 4 ° a b _ � f N C v d >„ b� dH bb° N S v u, 0 N 80 U d s 'v 4 O M be u °X Vpp1 tqj ii .D 9 my . � bb ' ,D 0 0 v • • • • • • • • • • • • N C v d >„ b� dH bb° N S v u, 0 N 80 U d s 'v eo a A Q u n � v $ o n 21 a� -y; o o G m 9 w a -a ra a � € � bO 9 Q ❑ O b tl H A a Pi ~ o d W CA a� T a Pi c° Si a o D �S C 5 �� o =4]o O - Tara 3 3 N a 4 F v 8 O it tl tl tl q qq ptlp b0 'v3 u u W ; c� a p �, O El E El a } °g? 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A/R Balances Outstanding — Traer Creek Metropolitan District Purchaser Name Jul -10 Land Title Guarantee Land Title Guarantee Land Title Guarantee Land Title Guarantee Title Comp Rockies Title Comp Rockies Title Comp Rockies Title Comp Rockies Title Comp Rockies Avon Center LLC Karam Katieb Joely Nelson Boris Family US Real Property Turst Chicago Title Chicago Title Chicago Title Chicago Title Jay & Deborah Harper James & Debra Dunn Town of Avon Real Estate Transfer Tax Calendar Year 2010 Property Falcon Pointe 101 -30 Falcon Pointe 313 -36 Falcon Pointe 401 -38 Falcon Pointe 405 -21 Mtn. Vista 31 -10 Mtn. Vista 33 -10 Mtn. Vista 3410 Mtn. Vista 35 -10 Lakeside Terrace B- 403/16 Avon Town Square Comm G-6 Chapel Square B -227 Lot 28 Blk 4 WR Lot 8 Western Sage Riverfront 31 -10 Riverfront 32 -10 Riverfront 33 -10 Riverfront 34 -10 Riverfront 225 Riverfront 243 Total August Revenue Total YTD Revenue Total 2010 Budget The Gates at Amount Received Riverfront PUD Beaver Creek $ 303,178.63 $ 1,033,314.34 $ _ 24.00 35.00 26.00 19.00 376.00 935.90 376.00 376.00 158.00 5,000.00 5,960.00 14,000.00 9,100.00 5,690.00 11,226.90 6,396.00 16,449.60 6,240.00 6,435.00 36,385.90 52,437.50 339,564.53 1,085,751.84 - 1,000,000.00 1,091,798.00 Variance, Favorable (Unfavorable) $ (660,435.47) $ (6,046.16) $ .-# \ N N 110 0 00 m m m t, mN1nm r r r FIAr, >4 mm Cot l 14 O O o In In OH N10 N N N H H r-I ri ri ri a w O Cl M O O N m m CO 10 10 O O O m 10 10 lD E W U1 N N m 0 0 H O O O Cai % Memo To: Larry Brooks, Town Manager Thru: Scott Wright, Asst. Town Manager — Finan e:D e From: Kelly Huitt, Budget Analyst Date: September 21, 2010 Re: Financial Matters — Sales and Accommodations July, 2010 Summary: • July is the second month in 2010 with a positive percentage change over 2009 for sales tax revenue with an increase of 2.93 %, which brings the Town to a -.21% decrease year -to -date. • Sales tax from Sporting Goods Retail/Rental is up 8.2% and Home /Garden has increased 8.9% from 2009. Restaurants/Bars are down 4% YTD, while Service Related and Other Businesses are down -9.3% and -9.5 %, respectively. • The following can be partially attributed to the opening of the Westin Riverfront Resort and Spa and the Westin Mountain Villas over the last year and a half : o Sales tax on Accommodations is up 8.3% for July o Sales tax is up 17.3% from 2009 in the Riverfront/West River District Area o Accommodations tax is up 6.9% from 2009 and 53.7% from 2008 for the month of July o The Riverfront/West River District makes up 48.9% of Avon's YTD Accommodations Tax revenue compared to 40.7% at this time in 2009 o Accommodations tax is up 15.2% from 2009 for Hotels, 8.9% for Time Share rentals, and slightly down in Vacation Rentals at -5.9% Page 1 4) N � N -�5 E E o E a 0) a a�i ~ �o a j ti M 2� I Q U) O Z O ° 0 00 0 0 0 0 0 0 0 0 0 0 0 CO CO N tC) CO O O CO M CO O M CA O O O O O O O O O O N p� T C9 N � V M � O � 'T N O O O O O O O O O O O L N O O 0 M N O M M C O O O N C- Ci C- Ci O M O M CO G N co C� ts N O c N CD N O It N T O _O O O O M N M v T ii N N i CR EA � CO O N M O M O W O O CO to O O W N_ CO r � O co CMD � COO_ N O O CO M O w O O O a O s O O CO CO O CID O O O CO CO M N M v M m M N N N C� a O N to CH CH M M O N M V: O O V f� O f-� 01 M f� CO OD CO O M CO CID W CID O mr, M h M O COD N M W T O N M O M O N M f� a0 N a0 P" CO N to M a0 M N "I to Z 2 A V O &0 Cr CCD aO} Ch M a v v v M m C� p- O N M N t0 /:L �: = d3 d3 Z w CM COO. 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V 001 {011 , , , , OOO m OW m m m tA0 m m m m m b fA0 m m-iJO m m m --------- S W W U Ol Ol J N O V 0I U U U OI W �Op J m U .fNO N N fgOD O® N� m .fWO O A N 40i 40i O W U J W V m N V N + N W W N + O P N fWT -{tmpD -- p- p - {pA QpOpp QOp N Ol O A W W V O W W1 t0 W Ol (JO N -fNlr -tNT ppW N N AN� + p f0 V U W + W1 1 N 0 0 0 0 o C o 0 boc P. o00 °0.8889....,.... m m �o V� pm N� W t OJ + N N N W W W A C AO t UU U W V Ol (,N1 O) +� V U O � Nf A .ttWtpDp N J .iUO m N m OI W tWT U Ol0 m A� t0 A N O N H N M H V Ol m m N + G ttpp IJ IJ W N A N HW r + J 1+ J m - m o O 2 O a n w Z 0 3 O m .71 0 H �+ o a 3 a P m x N p ° o 03 a � m O y 0 n m' � O O P O Ix b P_ n D C O m p, m 0 0 0 O m� m o, m O b P 20 m m ° m n ED O m m m � m fO +m � � 6 O ,1° m � n 3 S a o O C o � n 2m Memo To: Honorable Mayor and Town Council Thru: Larry Brooks, Town Manager Approved: Sally Vecchio, Asst. Town Manager — Community Development From: Scott Wright, Asst. Town Manager — Finance Justin Hildreth P.E., Town Engineer Date: September 23, 2010 Re: 2011 Capital Improvement Program 5 — Year Plan Preliminary Project Schedule with Corresponding Revenues and Expenses Summary: The draft of the Town of Avon Capital Improvement Program (Draft CIP) Fund 5- Year Plan (Exhibit A) is attached for review and comment by the Town Council. The revenues projected in the Draft CIP have been updated to reflect the current development activity within the Town and the Riverfront PUD, as well as incorporating project recommendations and projected costs. The projected expenses are based on updated cost estimates of proposed projects. Projects identified in adopted planning documents such as Harry A. Nottingham Park Master Plan, Comprehensive Transportation Plan and the Recreation Trails Master Plan are included in the Draft CIP. This proposed budget reflects a fund balance through the planning period as summarized below. It should be noted that it is prudent to maintain a healthy fund balance because of the uncertainty in the cost estimates and the difficult economic climate. Staff recommends a minimum fund balance of $1,500,000. YEAR FUND BALANCE 2010 $ 3,000,165 2011 $1,920,379 2012 $ 2,278,786 2013 $1,593,245 2014 $ 1,980,956 2015 $ 4,220,360 This Draft CIP budget is intended to provide a talking point for Council discussions and will provide the basic information to finalize the 5 -Year CIP for adoption in the 2011 Budget. Staff will continue to revise and refine the various project budgets as the individual projects become better defined and as additional information is accumulated. Discussion: There have been several changes to the 5 -Year CIP since the previous presentation on July 27, 2010. These changes are summarized as follows: 20115 -Year Capital Improvement Program September 23, 2010 Page 2 of 3 • postponement of the Fleet Maintenance Building Control system to 2014, • adjusting the VOIP 2011 budget to $30,000, • one -year delay of the Bus Stop Improvements Program to 2014 and 2015, • adjusting H. A. Nottingham Park Pavilion to reflect actual bid costs and moving it to 2014, • one -year delay of West Beaver Creek Blvd Steetscape Improvements a year to 2014, • addition of the replacement of the Recreation Center Flat EPDM roofs in 2013, • delay of several recreation trail improvements to 2014 & 2015. More detailed information of the H.A. Nottingham Park Pavilion is included in a separate memo presented during the work session. The budget will be modified prior to adoption to include the revenues from the proposed bond issuance, Ordinance 10-17. It has not been included in this draft of the CIP because the net revenues are not known yet. Staff anticipates that these revenues will be available at the budget retreat on October 12, 2010. The Public Works and Transportation Facilities Improvement Project, Photovoltaic System at Swift Gulch, and the Eagle Valley Trail bridge across the Eagle River adjacent to Avon Road are contingent on receiving adequate grant funding. These projects have not been included in the total expenditures, and a budget amendment will be required to the 5 -year CIP if the Town is awarded grant funding. During the July 27, 2010 presentation of the draft CIP, concerns were expressed regarding the breakdown of discretionary and non - discretionary projects. Several projects have been re- classified to discretionary project status to address the concerns including: • H.A. Nottingham Park Pavilion, • Fleet Maintenance Building Control System, • Metcalf Road Bicycle Climbing Lane Phase 2, • Drainage Master Plan, • General Planning and Consulting, and • Town Center Parking Study. The Metcalf Road bicycle Climbing Lane Phase 1 could also be moved to the discretionary projects but Staff recommends a non - discretionary classification because it is tied to the non - discretionary Metcalf Road Drainage Improvement project. Staff believes that this Draft CIP represents a well - balanced program that addresses major improvements to keep the Town progressing while also addressing the pragmatic infrastructure needs required to operate and maintain all municipal functions and facilities in a satisfactorily manner. Staff is be prepared to address questions regarding the proposed 20115 -Year Capital Improvement Program September 23, 2010 Page 3 of 3 projects and schedule and looks forward to Council's input and direction with respect to this program. 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Q y. °'o> 00 ' u C C m gys a w ~ pp O LL u) 0 V 0 0 0 0 U U LL LL J 0 M m a C 0 / r a. Z C f W v ;CL LL r+ ,,L^^ v V 0 N M O N v IO N N N a '00 p m N a N U m o .266 N a a�i m o � m N U 7 O U N Q C N N } 7 O C Naa � � N O) O O 3 ~ a m' 0 o0 0 O O O O O a i O 00 O qO v pO pO O O O O a U 0) m Q. O /0 W 0� a z W > N N C >Y3 E0° LL 0 m U 75 W 2 CL Q dw� U 0) m Q. O /0 TOWN OF AVON 2011 CAPITAL PROJECTS FUND 5 -YEAR PLAN PROJECT DESCRIPTIONS (Non- Discretionary Projects) FACILITIES EXHIBIT B Fleet Maintenance Building Control Systems Description: The Fleet Maintenance building currently does not have a control system computer and software to operate the HVAC system. As a result, it is not possible to properly manage the HVAC system operations and adjust the controls. It is expected that a properly operating control system will provide for energy savings and improved control of the building's HVAC. Status: The project will commence in 2011 and Staff is looking at potential grant options because the project will result in reduced energy consumption. Budget: 2011 $100,000 Fuel Depot Improvements Description: Replace existing steel diesel and gasoline tanks located west of Town Hall and east of the Parks Maintenance Building with code - conforming fuel dispensary. A set of double - walled pad- mounted concrete tanks, leak detection monitoring, automatic shut -off valves, emergency shut off protection, fire suppression, and electrical modifications are needed. Staff is evaluating potential to re- locate this function to just south of the Parks Maintenance Bid. to improve screening and security. New tanks will be movable via trailer if ever needed. Status: High need, safety - critical project. Budget: 2011 $60,000 (design, construction) Recreation Center EPDM Flat Roof Replacement Description: The existing flat EPDM flat roof is nearing its 20 -year life span in 2013. This project will replace the existing EPDM on the three flat roofs on the recreation center. Status: Required to maintain the Town's existing infrastructure. Budget: 2013 $75,000 Section I, Page C -26 LAND AND LAND IMPROVEMENTS Forest Service Land Acquisition Description: Participation with the US Forest Service, Eagle County, the Colorado State Land Board, and the Eagle Valley Land Trust, in a series of land exchanges that will permanently protect 2,140 acres of public lands. Status: It is unknown whether funds will be needed until appraisals have been completed on the various properties. The budget includes funds for the preparation of a preliminary and final appraisal of Forest Service parcels which collectively contain approximately 555 acres; the previously annexed "Parcel B" property on the northwest corner of Town containing approximately 475 acres; and the Forest Service parcel adjacent to the Village at Avon subdivision "Planning Area M" containing approximately 80 acres. Budget: 2011 $ 1,000,000 Nottingham Park Capital Improvements Description: This project will make capital improvements to amenities within Harry A. Nottingham Park. Those improvements include a new roof for the Cabin, a new backstop for the softball field, and improvements to the tennis court surface and fence. Status: These improvements are nondiscretionary and are needed to maintain the existing park amenities. Budget: 2011 $100,000 ROADS AND STREETS Street Improvements: Annual Paving /Road Improvements Description: This project is the Town's annual street resurfacing and pavement maintenance program, generally consisting of asphalt overlays and related surface treatments such as curb and gutter, storm drainage repair, guardrail adjustment, etc., where applicable. Status: Projects will be determined annually based on various existing street conditions with a 10 -year pavement surface lifespan typically used as a `rule of thumb.' The 2011 street project is included with the Metcalf Bicycle Climbing Lane Phase 1. Budget: 2013 $ 500,000 2011 $ - - -- 2014 $ 500,000 2012 $ 400,000 2015 $ 500,000 Section I, Page C -26 l2 East Beaver Creek Boulevard Overlay Description: Traer Creek Metropolitan District (TCMD) is obligated to construct extensive Streetscape Improvements including Traffic Control Medians, Sidewalks, Pedestrian Areas and Bicycle Lanes from the end of the existing 5 -lane section to the Village at Avon Connection by December 31, 2009. It is likely that these improvements will not occur in a timely manner, and the condition of the roadway dictates that improvements need to occur by 2012. This project consists of an asphalt overlay, lighting improvements, correcting discontinuous sidewalks north of Beaver Liquors, and minor drainage improvements. These improvements are the minimum required to maintain the road and do not include the extensive streetscape improvements that are required of TCMD. Status: If TCMD can complete the streetscape improvements prior to 2012, this project will not be required. Budget: 2014 $ 250,000 Multi- Modal /Alternative Mobility: Metcalf Bicycle Climbing Lane Phases 1 and 2 Description: This project is combined with the Metcalf Gulch Drainage Improvements because extensive road reconstruction will be required as part of the drainage improvements. Phase 1 of the Metcalf Bicycle Climbing Lane project is to be constructed concurrently with the Metcalf Gulch improvements. The extent of Phase 1 is from Nottingham Road to Wildwood Road. The second phase of this project is to complete the bicycle climbing lane from Wildwood Road to Old Trail Road. The road cross section will be similar to the already - implemented Wildridge improvements and will consist of two eleven -foot wide lanes and a six - foot wide bicycle climbing lane. Staff is recommending that it be constructed in 2011 and 2012. Status: The project was designed to preliminary level in 2008 and final design was started in 2010. Budget: 2011 $ 750,000 2012 $ 450,000 US 6 Trail — Avon Road to Post Blvd Description: The Town of Avon, the ECO Trails Department, and Eagle -Vail Metropolitan District partnered to obtain a grant application to construct a trail on the north side of US 6 from Avon Road to Post Blvd. The entities received a $355,000 grant from CDOT for the project from the 2012 to 2014 enhance grant program and the remainder for the project is funded by the ECO Trails Department This is the first part of a three phase project. The other two phases are a bridge across the Eagle River adjacent to Avon Road and extending the trail from Post Blvd to the 1 -70 Eagle -Vail interchange. Status: Project is funded and design will start in 2011. Budget: 2011 $ 30,000 2012 $ 955,000 Section I, Page C -26 I .Z1 WATER FUND PROJECTS Drainage — W. Beaver Creek Blvd. (1 -70 to Railroad) Description: This project consists of stormwater improvements per the Metcalf Gulch conceptual report prepared in 2001. Drainage improvements will involve addressing a small sub -basin referred to as Basin II in the Master Drainage Study by conveying stormwater flow from a 30" diameter pipe beneath Interstate 70 south along West Beaver Creek Boulevard onto the existing drainage adjacent to the Railroad Crossing. The current system is only prepared for approximately a 10 -year event, and events exceeding 10 -year flows have impacted nearby residences and roadways. Status: The design was completed in 2007. This project has been postponed to 2014. Budget: 2014 $ 350,000 Funding: Transfer from Water Fund Drainage — Metcalf Gulch Description: Improvements along Metcalf Road to maintain storm drainage and reduce erosion, per recommendation in Metcalf Drainage Study and Preliminary Design. Street improvements, including a bicycle climbing lane, will be included in the scope of the project and will be funded from the Capital Improvement Fund budget as a separate line item. Status: Staff attempted to remove Metcalf Gulch from U.S. Army Corps jurisdiction, allowing for fewer permitting requirements and more design flexibility, but it was determined that the flows in the upper reaches were too constant for a de- listing. The project design will be completed in 2010. Construction will begin in 2011 in conjunction with a bicycle climbing lane and asphalt overlay. Budget: 2011 $ 800,000 Funding: Transfer from Water Fund Nottingham Road Drainage Improvements Description: This project consists of drainage improvements associated with the drainage on Nottingham Road adjacent to Sherwood Meadows and Chambertin Townhomes, and west to the church parcel on Lot 45. It will include adding capacity and new culverts, allowing for drainage and debris flows from north of Nottingham Road to freely reach culverts beneath the Interstate 70 right of way. The downstream portions of these improvements were constructed in 2001 with the Nottingham Road bike path. Status: The project is budgeted and will likely involve a partnership with local homeowners' associations as they will be responsible for conveying drainage up to the northern Nottingham Road right of way line. Budget: 2013 $ 250,000 Funding: Transfer from Water Fund Section I, Page C -26 Drainage Master Plan Description: Update the Drainage Master Plan for the Town of Avon. The original master plan was developed in 1994 and supplemented in 2001. Status: The update would involve including the new development in the Town of Avon and allow for the incorporation of the drainage improvements into the GIS System. Incorporating the master plan into GIS will significantly improve Staffs ability to access and manipulate data, ensure proper maintenance, and incorporate new development as it occurs. This project was originally budgeted for 2008 but has been delayed to 2010 and 2011 because of staffing issues. Budget: 2010 $ 64,320 2011 $102,000 STRATEGIC PLANNING Plannina & Consultin General Planning and Consulting Description: Consulting Services for Various Planning Projects That May Arise Throughout the Year. Status: Annual Budget Item to Address Miscellaneous Unscheduled Planning Issues That May Occur During the Year. Budget: 2010 $ 25,000 2013 $ 25,000 2011 $ 25,000 2014 $ 25,000 2012 $ 25,000 2015 $ 25,000 Parking Study — Town Center Description: Develop a parking study that will analyze the recently adopted plans for the Town Center area, update parking numbers, evaluate locations for structured parking facilities and develop financing scenarios for the parking facilities. Status: Budget: 2012 $ 50,000 COMMUNICATIONS AND TECHNOLOGY VOIP Telephone System Description: VOIP, or Voice over Internet Protocol, is an internet -based phone system that utilizes broadband internet connectivity for standard voice phone communications. It offers increased speed, reliability, and decreased operation and utility costs over standard phone service. Status: This project was implemented in 2010 and will be completed in 2011. Budget: 2010 $ 125,000 2011 $ 30,000 Section I, Page C -26 rs TOWN OF AVON 2011 CAPITAL PROJECTS FUND 5 -YEAR PLAN PROJECT DESCRIPTIONS _July 21, 2010 (Discretionary Projects) FACILITIES Transit/PW Facilities Improvement Project Description: The Town has completed 30% design documents for award of a design - build contract for completion of a new public works facility at Swift Gulch. The project consists of a new bus storage facility, administration buildings, various shops and material storage buildings, and extensive civil infrastructure work. The remainder of the project is contingent on various grant funding sources. Status: The project was approved by Planning and Zoning Commission and is awaiting receipt of additional grant funding Budget: 2011 $1,300,000 Bus Stop Improvements Description: Bus ridership has been rising and is expected to continue to do so with higher gas prices and more densification in Avon. To support the Town's goals for transit - oriented development and public safety, bus stop improvements are needed to provide amenities for riders (e.g., benches, signs, lighting, schedule information, garbage cans, etc.) and to establish a uniform appearance throughout town. In some cases, extensions of asphalt and culverts are needed to add stops on opposite sides of the street (e.g., West Beaver Creek Blvd). This CIP item provides a budget for such improvements on the existing bus routes. Future expansion of service to other areas would involve adding stops and associated facilities; however this is not included at this time. Status: The Comprehensive Transportation Plan (underway) will produce a prioritized list of recommended transit bus stop improvements; a draft of this plan will be ready in spring 2009. Bus stop improvement projects are expected to be prioritized based on age and usage of existing amenities as well as long -term plans for routes. For example, stops near Comfort Inn and City Market would likely be recommended for improvements in 2009. Budget: 2014 $ 50,000 2015 $ 50,000 Section I, Page C -26 LAND AND LAND IMPROVEMENTS Harry A. Nottingham Park Program Overview: The Town completed the Harry A. Nottingham Park Master Plan in 2008, which identifies and outlines a series of improvements to the park that are required either to maintain its current functionality or to address unmet needs of the community. The Master Plan prioritizes the improvements over a multi -year phasing plan. $3,000,000 is proposed over the next five years to construct the highest priority projects outlined in the Master Plan. Nottingham Park — Stage Description: A Stage is proposed in the Master Plan that will be located immediately north of the engineering wing of Town Hall. It will be used for existing events in the park and be programmed for additional events that will enhance the community. The stage will be at least 30 feet wide and 25 feet deep and include the associated electrical and back -of -house facilities to operate the Stage. Status: Contract documents are being finalized and the project will be bid out. The project requires $100,000 of additional funding to start work. Budget: 2014 $600,000 Nottingham Park — Lake Street to Nottingham Lake Promenade Description: The Master Plan identifies the need to create a Main Street Extension, or Promenade, from Lake Street to the lake shore near the pump house. The extension will include a widened pathway comprised of different pavement materials immediately north of the Municipal Building, with improved landscaping, seating areas, lighting, and alcoves that can be used for vendor or street fair booths. Elements from the Main Street Design will be utilized for this area to provide an appropriate transition. Status: $200,000 is programmed for the design and construction of the Promenade in 2014. Budget: 2014 $ 200,000 Nottingham Park — Zone C Improvements — Playground and Restrooms Description: The Zone C improvements are located north of the soccer field and comprise the sediment pond, irrigation channels, a playground, public restroom, and a picnic pavilion. Improvements for Zone C include new playground facilities, possibly relocated closer to the Recreation Center, a new, larger group picnic pavilion, new furnishings, lighting, pathways, and new year -round public restroom facilities. Status: The first tier of Zone C improvements include a new playground closer to the Recreation Center, a new Family Area closer to Nottingham Lake, and a new public restroom facility. $1.8 Million is programmed for 2013 design and construction. Budget: 2013 $ 1,800,000 Section I, Page C -26 �7 Nottingham Park — West Restrooms Description: Construction of restrooms on the west end of the park near the tennis courts. Status: Funds are budget for construction in 2015 and the project is considered a medium priority for the park. Budget: 2015 $ 250,000 Nottingham Park — Southwestern Pedestrian Connection Description: Installation of pedestrian and trail facilities on the southwestern corner of the park from the baseball fields to West Beaver Creek Blvd in the vicinity of the water treatment plant and Union Pacific Railroad tracks. Status: Funds are budgeted fOr 2014 and the project is considered a medium priority for the park. Budget: 2014 $100,000 ROADS AND STREETS Streetscape: West Beaver Creek Boulevard Streetscape Improvements (Lake St. to Avon Rd.) Description: West Beaver Creek Boulevard was constructed based on higher than current projected traffic volumes since it was built prior to construction of the Post Boulevard interchange and the Eagle -Vail half- diamond interchange. This resulted in a very large asphalt width two to three lanes of traffic in each direction, and a shared turn lane. The lack of development on Lot B also resulted in discontinuous sidewalk and the lack of a proper street crossing at Sun Road. This project will reduce the amount of vehicular lanes, add landscaping, additional lighting, median islands, and crosswalks to enhance pedestrian mobility and safety. An asphalt overlay will also be included as part of this project scope. Status: The $75,000 programmed for 2012 includes design and $750,000 programmed for 2013 includes construction of the improvements from approximately Avon Road to Lake Street. Budget: 2013 $ 75,000 2014 $ 750,000 East Beaver Creek Boulevard Streetscape Improvements (Avon Rd. to BC Place) Description: East Beaver Creek Boulevard was constructed based on higher than current projected traffic volumes. This resulted in an asphalt width larger than necessary to carry the current projected traffic volumes. This project will reduce the amount of vehicle lanes and add median islands with landscaping. Status: The $25,000 programmed for 2014 includes design and the $250,000 programmed fro 2015 includes construction of the improvements from approximately Avon Road to Beaver Creek Place. Budget: 2014 $ 25,000 2015 $ 250,000 Section I, Page C -26 it Metcalf Road Cliff Stabilization Description: The sandstone cliff above Metcalf Road just prior to the upper switchback was not stabilized during its original construction. The cliff is made up of loose sandstone that is steadily sluffing off and causing the lot immediately above to gradually erode toward the existing structure's foundations. This project will install a retaining wall to prevent further erosion of the steep slope. Status: The condition of the slope does not present an immediate concern. Therefore, the design and construction of the project has been budgeted for 2014. Budget: 2014 $ 100,000 Forest Service Access & Drainage Improvements Description: The existing national forest access located on Wildridge Road East is in need of improved surface grading and ditches to control the storm water runoff. Currently the storm water runoff drains into the ditch along Wildridge Road East and plugs the adjacent ditch and its culverts with sediment from the roadway. This access point and trail is not included in the FS's long range transportation plan, and their intent is to close this trail. Therefore, this project will include minimal surface and ditch grading improvements to the roadway and install an inlet and culvert across Wildridge road into the existing drainage easement. Status: This project is budgeted for 2011 to address the ongoing sediment and drainage issues at the intersection of the access road and Wildridge Road East. Budget: 2011 $ 25,000 Multi- modal /Alternative Mobility: Recreational Trails Program: Description: This project includes reclaiming social trails and repairing erosion issues on Town and USFS land in areas including Nottingham Road, Saddle Ridge, and Beaver Creek Point. The project also includes working with CDOT on access and permitting requirements. Status: This is an ongoing project and is being implemented by the Public Works department. Budget: 2009 $ 41,839 Nottingham Trail -Buck Creek Trail Connector Description: This spur trail will connect the existing Nottingham Road Bike Path to the Buck Creek Road /Nottingham Road intersection. The scope includes a paved trail from path to Nottingham Road, pedestrian improvements at the intersection, and pedestrian improvements from the intersection to the Buck Creek Trailhead. A portion of this scope was originally proposed as part of the postponed Nottingham Road improvement project. Status: This project is scheduled for implementation in 2011. Budget: 2014 $ 50,000 Section I, Page C -26 19 Saddle Ridge Trail Restoration Description: This project involves reclaiming and re- routing portions of the Saddle Ridge Trail, identified in the Recreational Trails Master Plan, to a more sustainable, non - erosive route. Status: This project is included in the Recreational Trails Master Plan and is scheduled for implementation in 2012. Budget: 2014 $ 40,000 Minor Trail Restoration Description: This project includes restoration and improvements of various minor trails throughout and immediately adjacent to Avon. Status: This project is identified in the Recreational Trails Master Plan and is scheduled for implementation in 2012. Budget: 2014 $ 40,000 Metcalf Recreational Trail and Trailhead Description: This project includes construction of a new trailhead with parking, signage, and other appurtenances at the Metcalf Road switchback leading up Metcalf Gulch. It will require retaining walls, drainage improvements, and extensive trail building and improvements in the area, but will be an excellent addition to the Town's recreational trail network: Status: This project is identified in the Recreational Trails Master Plan and scheduled for implementation in 2013. Budget: 2015 $ 250,000 Beaver Creek Overlook Trail Improvements Description: This project includes resurfacing the Beaver Creek overlook trail, parking lot and trailhead improvements, and a sun or picnic shelter at a lookout point to Beaver Creek and beyond. This areas' combination of accessibility and outstanding vistas will make it a popular destination. Status: This project is identified in the Recreational Trails Master Plan and is scheduled for implementation in 2014. Budget: 2014 $ 250,000 Buck Creek Trail Improvements Description: Construction of a gravel surface trail on the east side of Buck Creek from Swift Gulch Road north to the existing Buck Creek trailhead. Status: The land for this project was dedicated to the Town as part of the Buck Creek PUD. Budget: 2015 $ 150,000 Section I, Page C -26 0 COMMUNICATIONS AND TECHNOLOGY Toastmaster, Granicus, a -gov Projects Description: The Toastmaster, Granicus, and a -gov projects consist of a Town Council video recording system, an agenda -based web streaming system, and miscellaneous record management, efficiency, and website enhancements, respectively. Status: The budgetary numbers are placeholders for use as technologies develop and more specific Town requirements and goals are specified. Budget: 2011 $ 25,000 2014 $ 50,000 2012 $ 25,000 2015 $ 50,000 2013 $ 50,000 Section I, Page C -26 94 TOWN OF AVON 2010 CAPITAL PROJECTS FUND 5 -YEAR PLAN PROJECT DESCRIPTIONS (Grant Contingent Projects) FACILITIES Public Works and Transportation Facilities Improvements Description: This project involves construction of facilities at the Swift Gulch site and the Traer Creek Village site to provide replacement of existing inadequate temporary portable transit and public works maintenance facilities. ECO Transit is a partner in this priority project. This capital investment includes the following components: For Transit - a transit bus storage building, administration offices, training room, locker room, break room, underground parking, additional vehicle storage, heated and unheated storage areas for parts and equipment, automated wash bay, archive - document storage, site security, electronic file storage for bus and site security digital films, CDL -B training course, parking for transit foremen vehicles, unheated storage for bus shelter materials, and yard storage. For Public Works — administrative offices, wood - working shop, irrigation shop, electrical shop, vehicle and heavy equipment indoor parking, equipment storage, bulk materials stockpiling, covered cinder storage, greenhouse, paint/chemical storage, etc. plus shared occupied spaces with the Transit Division (e.g., break room, locker room, etc.). For Other Departments - police impound lot, document storage, computer /IT repair shop, and yard storage for special events materials. The project includes site work to maximize available town -owned land and photovoltaic systems to off -set much of the on -site uses. The Town is pursuing a LEED certification for the Administrative Building. The project results in facilities that will allow the Town and the County to continue to operate and maintain, as well as expand the existing public transportation system for the next 20 -30 years as development progresses toward the transit - oriented vision for this region as defined by the Town and the County. It also results in facilities to allow the Town to provide a reasonable level of service through 2025 for continued public works maintenance (e.g., parks, fleet, roads, bridges, streetscapes, and trails). This investment will positively impact annual operating costs by reducing labor time and extending vehicle and equipment life; it will reduce occupational hazards and improve the Town's storm water management and hazardous material handling practices. Without this project, the Town will not have sufficient "back -of- house" operational facilities to satisfy the goals of the Comprehensive Plan nor the West Town Center Investment Plan. Status: Preliminary engineering and environmental permitting was prepared in 2008. Grant applications to CDOT and the Federal Transit Administration were submitted for $14M to cover the transit portion of the project; awards should be announced by end of 2010. An IGA with ECO Transit to share in the design and construction costs is in preparation. No grant sources Section I, Page C -26 a6z, have been identified for the Public Works portions; the Town expects to pay for this portion of the project directly. Budget: The schedule below is predicated on receiving grant funding and an agreement with ECO regarding cost - sharing. Grant funds were requested for Phases 1A and B to start construction in 2010, however, there is a reasonable probability that such funds may be delayed such that construction could not commence until 2012. The schedule and funding plan below is staffs best estimate as to the probably timing and local share of various phases. Costs have been escalated to the year indicated in the first column. Estimated Total Grant proceeds Town Local Year Cost In Start Year (assumed) ECO Funds 2011 Design, phase 1 $ 1,300,000 $ $ 522,000 $ 778,000 2011 Design, temp. transit facilities @ Village site $ 300,000 $ $ - $ 300,000 2015 Design, phases 2,3,4 $ 950,000 $ $ - $ 950,000 2012 Construction phase 1A (site work) $ 9,403,600 $ 6,000,000 $ 1,600,000 $ 1,803,600 2013 Construction phase 1B (Admin Bid, Barn) $ 14,105,400 $ 6,000,000 $ 1,600,000 $ 6,505,400 2016 Construction phase 2 (50 %site, Lg Equip) $ 2,800,000 $ - $ - $ 2,800,000 2016 Construction phase 3 (PW shops Bid) $ 4,700,000 $ $ $ 4,700,000 2016+ Construction phase 4 (car wash) $ 1,500,000 $ $ $ 1,500,000 $ 35,059,000 $ 12,000,000 $ 3,722,000 $ 19,337,000 Fleet Maintenance Building Photovoltaic System Description: Panels would either be installed on existing Fleet Maintenance Building or could be installed on new rooftops which may be constructed as part of the Swift Gulch transportation operations facility site improvements. This project is grant dependant on FTA TIGGER funds (grant request is $999,000 for 80% with local match of 20 %). Status: Application was submitted in May 2010 as part of state -wide request. Notice of funding award expected by October 2010. Budget: 2011 $1,248,750 (of which $999,000 would be a federal grant) Section I, Page C -26 `- q Roads and Streets 1 -70 Berming for Noise Reduction Description: Construct and landscape earthen berms along 1 -70 rights -of -way (ROW) to mitigate noise from the interstate. This phase would be located north of West Beaver Creek Blvd. Construction there would be on both Town - owned ROW plus CDOT ROW, so a CDOT ROW Use Permit is required. It is anticipated that the Town may construct this project over a period of time using fill materials as they become available (e.g., from excavation work associated with the Town's other capital projects). Project will reduce costs for materials disposal of town construction while also benefiting residents through streetscape enhancement and noise reduction. Status: Public Works initiated discussion with CDOT staff regarding this project and determined that this project appears feasible. A noise survey was conducted in 2008 which measured the existing noise from 170 at a level above 65 db — sufficient to demonstrate impact to CDOT. The next steps are to prepare preliminary engineered design drawings, submit ROW and noise abatement permit applications to CDOT, prepare final design drawings and specifications, and conduct construction. Budget: 2012 $ 20,000 (predesign, permit application submittal package) Multi -Modal /Alternative Mobility: Eagle River Bridge at Avon Road Description: Construct a bridge for a pedestrian and bicycle trail across the Eagle River adjacent to Avon Road. The trail will connect the existing core trail on the north side of the river with the trail to be constructed along the north side of US6 in 2013. The project will be a partnership with the ECO trail committee and both parties will apply to obtain GOCO grants. Status: The project is a priority but budget constraints will defer the construction until at least 2013. Budget: 2013 $ 900,000 Section I, Page C -26 Memo Irk To: Honorable Mayor and Town Council 7h= Larry Brooks, Town Manager Approved by: Sally Vecchio, Assistant Town Mgr /Director of Comm. Dev. is� From: Justin Hildreth P.E., Town Engineer Shane Pegram P.E., Project Engineer Date: September 22, 2010 Re: H.A. Nottingham Park Pavilion — Construction Bid Update Summary: This memorandum is to provide Town Council with an update on the progress of the H.A Nottingham Park Pavilion project. The project was advertised for bid on August 19, 2010 and construction bids were opened on September 16, 2010 at 2 PM. Background: • January 26, 2010 - The H.A. Nottingham Park Pavilion plans were presented to Town Council. The presentation included three options for construction. Option One included the pavilion structure only with a budget of $250,000. Enhanced Option One included an "enhanced" pavilion with some aesthetic improvements beyond Option One and a budget of $300,000. Option Two was a fully developed pavilion, and would require an additional $200,000 for construction. Town Council directed Staff to design the "enhanced" Option One. • May 4, 2010 - The Planning and Zoning Commission approved Final Design. • May 11, 2010 —Three dimensional renderings of the Final Design were presented to Town Council and marketing material for solicitation of funds was discussed. • July 13, 2010 — Councilman Dave Dantas updated Town Council on the pavilion's progress. Town Council directed staff to bid the Harry A. Nottingham Park Performing Pavilion following Councilman Dantas' presentation. • September 14, 2010 — Staff updated Town Council on the number of attendees at the pre -bid meeting. Discussion: Bid Documents were completed and the project was advertised for bid starting August 19th in the local paper of record and the Town's website. The advertisement was also sent directly to the Engineering Department's list of contractors and to three Plan Rooms. Twenty -two companies requested plans including the three Plan Rooms prior to the pre -bid meeting. The pre -bid meeting was held on September 3`d and was mandatory for general contractors. Twenty - five individuals attended the pre -bid meeting. The twenty -five attendees represented fourteen general contractors and eight sub - contractors, allowing for a maximum of fourteen bids. The construction bids were opened on September 16"'. Five contractors submitted construction bids for the H.A. Nottingham Park Pavilion on September 16th. The contactors and their bids are as follows: • Thrasher, LLC - $573,188 • MW Golden Constructors - $577, 830 • Mark Young Construction - $587,000 • GE Johnson Construction - $615,158 • PNCI Construction - $700,381 Harry A. Nottingham Park Performing Art Pavilion September 22, 2010 Page 2 of 2 The four lowest bidders are within 7% of the low bid. However, all bids are over the current construction budget and the architect's estimate. Several items that were incorporated into the project have contributed to the high bids and are described in detail in the VAG memo dated September 22, 2010 (Exhibit A). Those items are: • Metals /Structural Steel System • Wall Construction • Thermal and Moisture /Finishes • Electrical • Acoustical Roof Panels • Finishes Thrasher's low bid included a list of items that could be changed to further reduce the project costs. Staff and the Architect (VAG) met with Thrasher to go over those items. Those items include: • Replace copper roof with bronze metal roof • Replace copper panels with colored stucco • Delete pedestrian lights • Delete stairs to Council Chambers • Simplify window design • Simplify ceiling panel system • Simplify concrete paving and stone detailing Financial Implications: The project's Capital Improvement budget for design and construction is $200,000. The Architect's budget estimate for the pavilion that Council directed staff to design was $300,000. The project was expected to require an additional $100,000 in funding to allow construction. However, the low bid of $573,188 will require additional funding of $373,188. Construction costs can be reduced to approximately $500,000 and stay within the approved scope if the recommendations for reducing costs are incorporated into the project. $300,000 in additional funding will still be required. In order to get the construction budget to below $300,000, the size will have to be reduced and the stage could not accommodate the Salute to the USA event. Recommendation: Staff recommends budgeting for construction of the project in 2014, unless additional funding sources can be found. When the project moves forward the Town will partner with a General Contractor and Architect to fine tune the design and look for cost saving measures. Town Manager Comments: Attachements: Exhibit A —VAg's memo dated September 22, 2010 Memo: Project Name: TOA H.A. Nottingham Pavilion Date: September 22, 2010 RE: Options FROM: Stephanie Lord - Johnson TO: Justin Hildreth Remarks: aqw VAg, Inc. Architects & Planners VAg, Architects and Planners TOA Engineer As requested, VAg, Inc has reviewed the bids submitted for the H.A. Nottingham Park Pavilion. EXHIBIT A Project No: 2920.00 Overall the bids on the Pavilion came in higher than the TOA hoped or anticipated. During the design and approval process the nature and character of the Pavilion was refined and enhanced. VAg presented a series of design solutions early on addressing various budget and design parameters. It was determined that the $200,000 design solutions did not sufficiently address the programmatic requirements or meet the caliber of project that the TOA desired. A middle of the road solution was selected with the following goals in mind: Pavilion Goals • Zero Maintenance • Vandal proof • Finish/Design on par with the TOA Transportation Center and Main Street Improvements • Design the stage for maximum stage visibility from all angles of the park. • Protect performers from the elements • No more than a 5' encroachment into the playing field As the above goals were addressed in the design process the following items were impacted: Metals Structural Steel System The structural frame for the project is a more dynamic solution that originally conceptualized. This change came into play based on feedback from the Planning and Zoning Commission and the pavilion design committee that the structure should create a sense of place and be more than a stage with a roof covering. The angled steel truss solution addressed the above comment as well as the original goals. The cost for the steel framing did increase with this change in direction. Wall Construction Though it does not have significant costs, the walls are constructed out of CMU to minimize potential vandalism opportunities compared to framed walls. Thermal and Moisture; Finishes The project has a copper roof and copper wall panels which are driving the price higher than the team originally anticipated. These materials were selected for aesthetic, performance and cost reasons. The cost of copper has increased again since the design phase. The copper roof and flashing could be replaced with a bronze metal roof system without negative impacts to the project. The copper walls panels could also be replaced with stucco paneling detail or a cementious panel system to help reduce costs. Electrical Physical Address: (970) 949 -7034 Mailing Address: 90 Benchmark Rd, Suite 202 fax: (970) 949 -8134 P.O. Box 1734 Avon, CO 81620 email: general@vagarchitects.com Vail, CO 81658 -1734 The direction for the lighting and power system was to design a minimal "house" electrical and lighting system to accommodate a full traveling lighting and sound system. The electrical system is a 600 AMP service to accommodate the various functions. The system is quite simple with the minimal equipment required to accommodate the full range of acts and performance groups. The electrician broken down the electrical budget as follows: 600 AMP service /equipment/labor - $14,000 Electrical panels /equipment for performance systems - $14,000 House lighting systems - $9,000 Heat Tape - $3000 Street Lights (2) - $11,000 Relocate Mechanical Equipment - $3500 Acoustical Roof Panels During the design phase it was requested that the stage be enhanced for acoustical performance to accommodate a full range of acts and performances. The angled wood panels were incorporated into the design and engineering to provide optimum projection. This was an addition to the original program and is something that could be studied further with cost savings in mind. Finishes The project has a high level of finish with minimal maintenance. The stone and finishes were selected to meet the TOA Design Requirements and to tie the project into the TOA Transportation Center and Main Street aesthetic. As noted previously, the copper roof and paneling can be studied further. The stone veneer, boulders, and paving solutions could also be evaluated in more detail to see if there are savings be selecting alternate materials or minimizing material. Cost Saving Potential Based on preliminary conversation with Russell Thrasher it appears that the project could likely be Value Engineered to get down to a proposal of $500,000 while keeping the majority of the budget, programming and aesthetic goals for the project. $20,000 Copper Roof and Flashing replaced with a bronze metal roof $12,000 Copper Panels replaced with colored stucco walls $12,000 Delete (2) TOA Street Lights $12,000 Delete stairs and door work to the Council Chambers $ 5,000 Simplify windows - single pane, storefront or framed system $10,000 Simplify ceiling panel system $ 5,000 Simplify concrete paving and stone detailing Please contact me with any questions or comments. Physical Address: (970) 949 -7034 Mailing Address: 90 Benchmark Rd., Suite 202 fax: (970) 949 -8134 P.O Box 1734 Avon, CO 81620 email: general@vagarchitects.com Vail, CO 81658 -1734 Memo To: Honorable Mayor and Town Council Thru: Lang Brooks, Town Manager Legal Review: Eric Heil, Town Attorney - Approved By: Patty McKenny, Assistant Town Manager /Administrative 4$� From: Jennifer Strehler, Director of Public Works Date: September 28, 2010 Re: Eagle River Water Quality Sampling Work Measuring Macroinvertebrates and Nutrient Concentrations Summary: River sampling and analysis work has been in progress since 2008 to better understand the relationship between nutrient loading (nitrogen and phosphorous) and the biological health of the Eagle River and Gore Creek. These efforts are being conducted by the State of Colorado Water Quality Control Division (WQCD) and the Eagle River Water and Sanitation District ( ERWSD). A composite biological index (MMI) has been proposed for use by the state as an indication of a biologically impaired stream. The state and ERWSD have been measuring the MMI at locations in the Eagle River and in the Gore Creek. Linn Brooks, ERWSD Assistant Manager, will present the sampling results of MMI and nutrient concentrations as measured by ERWSD during 2008 -2009 during this work session. This is an abbreviated version of the presentation given at the ERWSD Board meeting on August 26"'. A cover memo from Linn Brooks and supplemental information from the ERWSD is attached here. Previous Council Action: September 14, 2010 — Melissa Macdonald, Executive Director of the Eagle River Watershed Council (ERWC) and Kirby Wynn, ERWC's Water Quality Program Director, described their organization's role in local watershed oversight, technical assessment, and regional planning. They requested $13,000 from the Town of Avon for their Water Quality Program, which includes managing the USGS contract, coordinating sampling studies, compiling and evaluating results from separate efforts, facilitating regional discussions, and conducting public outreach. Future Council Actions: October 12, 2010 — Time for discussion is planned during the work session regarding the upcoming open public comment period (October 22- November 21) for renewal of the National Pollution Discharge Elimination System (NPDES) permits for the Avon Wastewater Treatment Facility (Avon WWTF). Background: Water quality in Colorado is regulated by the state's WQCD. Water quality in the Eagle River and Gore Creek has been and continues to be negatively impacted by human activities. Impaired water quality can significantly damage stream biota, including sensitive trout populations like cutthroat, rainbow, and brook. Point source discharges (e.g., effluent) and non -point source discharges (e.g., storm water) both play a contributing role. Dischargers are required by federal and state law to responsibly treat these sources prior to discharge to defined regulatory limits and /or using best management practices. Municipal and industrial dischargers are regulated directly by the Colorado Department of Public Health and Environment ( CDPHE) and less directly by the Environmental Protection Agency (EPA) through the NPDES permitting process. CDPHE actively regulates the liquid stream discharges while EPA oversees solids stream treatment, land application and land disposal of solids. Wastewater treatment plants represent the large, point source loads of metals, nutrients, and other contaminants to the Eagle River and Gore Creek. Wastewater treatment plants in Vail, Avon, and Edwards operate as a consortium, providing treatment and discharging to the region bounded by Vail, Mintum, Beaver Creek, Avon, and Edwards; these three plants are operated by the ERWSD. ' Industrial dischargers are another type of point - source loading. In this area, the only permitted industrial discharge known to town staff is the Eagle Mine Superfund Site. Non -point discharges are also of concern. Non -point discharges enter the stream from overland flow, storm sewers, and via shallow groundwater. These discharges can be contaminated from activities such as road maintenance, turf /garden fertilization, use of herbicides, and small -scale mining . Storm water is discharged by the state, county, local towns, metropolitan districts, golf courses, and private landholders. Road run -off is a risk for metals contamination while turf run -off is a risk for nutrient loading. Although small communities (< 10,000 population) are not required by EPA or by CDPHE to abide by rigorous stormwater monitoring and treatment regulations, Avon and neighboring Eagle County communities may wish to be more pro- active regarding storm water run -off in order to better protect our high - quality and ecologically- sensitive mountain environment. The ecological effects of impaired water quality can be estimated in a number of ways, including quantifying physical and chemical parameters such as temperature, biological oxygen demand (BOD), and concentrations of specific metals and nutrients. But it is necessary to make many assumptions when translating these "hard measurements" into likely impacts to fish, bird, and other riparian biota. Directly measuring the stream's macro - biology (e.g., fish counts) is an option but this is difficult, expensive, and typically results in a wider range of results and statistical error. Measuring the intermediate members in the food chain such as microbes and macroinvertebrates (i.e., bugs), is generally easier, less expensive, and is considered a reasonable approach to estimate river health. The reduced presence or lack of diversity in macroinvertebrate populations means that sufficient food is simply not available for predator aquatic species like trout. Discussion Please see the attached memo and supplemental information from Linn Brooks. The state WQCD is proposing to use a composite biological index called the macroinvertebrate multi - metric index, or MMI, as an indicator of overall river health and to identifying stretches where new regulatory standards may be needed which will limit the total maximum daily loading (TMDLs) of nitrogen and /or phosphorous. The MMI measures the presence and number of a collection of macroinvertebrate species. A specific MMI "threshold of health" has not been firmly set and may vary The NPDES permit for the Avon WWTF (# C00024431) will be evaluated simultaneously with the NPDES permits for the WWTFs in Edwards (# C00037311), Eagle, and Gypsum since these four plants all discharge to the same receiving water body. Open public comment for these permits is expected to start 10/2212010 with comments due to CDPHE by 11/21/2010. The Vail WWTF NPDES permit (#000021369) does not expire until 2/29/2012 and is not under review by CDPHE this year. • Page 2 of 3 based on the sampling method used. Sites where measurements with an MMI below the recommended threshold will be considered "impaired" while those above the threshold will be considered "unimpaired" (i.e., a higher MMI means a healthier river). The state will undergo a nutrient rule- making in 2011 and impaired sections of streams are expected to receive new nutrient discharge standards and /or TMDLs. The data presented here suggests that there are some issues with use of the MMI index. The WQCD selected this index based on the use of the kick -net sampling method. This method is reasonably inexpensive to use and generally only collects the free floating macroinvertebrates. Consultants for the ERWSD have recommended a different sampling method which involves scraping plant and algael material off of rocks collected from the river, since many macroinvertebrates live in these rock microcosms. From the data presented on August 26, 2010, it appears that the rock scraping sampling method results in a statistically higher value for the MMI than the kick -net method. The other concern regarding the use of the MMI is that the field results from the Eagle River and Gore Creek did not show a strong statistical correlation between MMI and measured concentrations of N and P. The results from our watershed make it questionable as to whether MMI will be a useful metric of river health or as a trigger for nutrient regulation as the state intends. Another take -away message from the studies done thus far is that the impact of distributed storm water pollutant loading is relatively unknown in this watershed. More county and local leadership and regulation may be needed on stormwater, for example: increased building setbacks from water courses, expanded requirements for swales and other forms of detention and treatment, tree planting to improve shading over surface water, and changes to fertilizer and herbicide application practices. The Town of Avon can expect to pay more attention to stormwater management practices in the near future. The Eagle River watershed brings us together as one community. The same residents who enjoy the high quality environment are also rate payers and tax payers. Dischargers must meet regulatory discharge standards to protect the environment while also keeping rates reasonable. Similarly, there are cost- benefit decisions associated with improving the quality of non -point source discharges. The environmental effect of nutrients and the implications of new nutrient regulation will impact our community in many ways. Thus it is important that the public is engaged in this issue and that cost - effective decisions can be made across jurisdictional and organizational boundaries. Financial Implications: No request for funding has been made in association with this presentation; it is offered by ERWSD staff for informational purposes only. Town Manager Comments: M Attachments: • Memo from Linn Brooks to the Avon Town Council dated 9/22/2010 including four attachments • Page 3 of 3 QUESTION LIST 1. Is MMI commonly used as a screening tool in other states to trigger nutrient standard rule- making? How do other similar states (e.g., WA, OR, MT, CA) approach setting nutrient discharge standards? 2. Does the rock - scraping sampling method result inconsistently higher MMI values than the kick -net sampling method? If so, is it appropriate to compare results from this method against standards set using the kick -net method? 3. How does the MMI correlate to temperature? Are you seeing higher or lower MMI values in warmer waters? 4. It appears that is a nutrient impact downstream of the Vail, Avon, and Edwards WWTFs, about 6 to 8 months of the year. What is the average concentration of nitrogen and phosphorous in these plant effluents? To what concentrations would you need to treat to in order to consistently meet EPA's recommended standards? 5. How easily can the public access data collected by the ERWSD? Will such data be forwarded to the USGS for addition into the "The Repository" web site? Will the USGS be timely on keeping the Repository up -to- date? Should the Eagle River Watershed Council be tasked with this role? What public outreach efforts are being planned for this October and November as part of the NPDES permit renewal cycle for Avon and Edwards WWTF? 7. Can you please explain how each of the various sampling studies are being funded? To what extent are Avon residents (as rate payers) funding these efforts? 8. How do you think the river sampling work of the Eagle River Watershed Council should be funded? ACRONYMS BOD —biological oxygen demand CDPHE —Colorado Department of Public Health and Environment MMI — multi- metric index NPDES — national pollution discharge elimination system TMDL- Total Maximum Daily Limits TN —total nitrogen TP —total phosphorous WQCD — Water quality control division (CO- state) WWTP — wastewater treatment plants Nutrient and Macroinvertebrate Sampling Study August 22, 2010 Page 1 MEMORANDUM TO: Avon Town Council FROM: Linn Brooks, Assistant General Manager Eagle River Water & Sanitation District DATE: September 22, 2010 RE: Nutrient and Macroinvertebrate Sampling Study At the request of Councilor Ferraro, Eagle River Water & Sanitation District will share preliminary results from a nutrient and m acroinverte b rate sampling study at the September 28, 2010, Avon Town Council work session. This study was initiated in 2007 when the Colorado Water Quality Control Division (WQCD) requested assistance from interested entities with their efforts to collect paired macroinvertebrate and nutrient data; sampling commenced in 2008. The District conducts a variety of water quality and biological monitoring studies throughout the Eagle River watershed. Detailed information on current voluntary studies is presented in the chart that is attached hereto as Exhibit 1. This presentation will present current analysis of the nutrient and aquatic health studies. The District recently compiled data from the first few rounds of a voluntary sampling program in cooperation with the WQCD. The District is collecting river samples for nutrients (nitrogen and phosphorous) paired with macroi nverte b rate samples (river bugs) to assist the state in determining the relationship between the nutrient chemistry and the river's aquatic health. The WQCD is using this data and other data collected across Colorado to develop nutrient standards for stream segments throughout the state. These standards will dictate effluent limits for point source discharges of treated municipal wastewater. Implementation of new treatment processes by wastewater providers should improve river water quality and the aquatic environment statewide. The District is providing data to the WQCD for its nutrient rule- making process to help ensure that the nutrient standards effectively protect aquatic life in our cold -water mountain stream conditions. Results from these studies were presented to the Eagle River Water & Sanitation District and the Upper Eagle Regional Water Authority boards at their August 26, 2010, joint meeting. A detailed memorandum from that meeting, along with maps of the sampling locations, are attached hereto as Exhibit 2. Data analysis from this sampling effort indicates that human activity heavily impacts segments of Gore Creek. The greatest impact appears to be below Gore Creek's confluence with Black Gore Creek, where the stream first enters the urban environment in East Vail. The Eagle River does not appear to be as heavily impacted by human activities as Gore Creek. The largest source of nutrients to Gore Creek and Nutrient and Macroinvertebrate Sampling Study August 22, 2010 Page 2 the Eagle River is the District's wastewater treatment plants. However, there does not appear to be a strong relationship between nutrients released from the wastewater plants and observed impacts to the macroinvertebrate community. These results suggest that the impact of nutrients is complex and that other human activities may have more impact than nutrients released in effluent. The value of this paired sampling study is that the results provide: • a baseline against which changes in the watershed can be measured; and • direction for future sampling efforts; and • guidance in the investigation and interpretation of potential aquatic life stressors. The District will continue with this sampling effort and has revised the program design to answer specific questions raised during the first sampling rounds: • Addition of a paired sampling site on Black Gore Creek, above its confluence with Gore Creek, to differentiate between the impact of 1 -70 and the impact of East Vail urban development; • Addition of a paired sampling site on the Eagle River, above its confluence with Gore Creek, to define the impact of Gore Creek's water quality on the Eagle River; • Addition of temperature sampling to test its suitability as a proxy for measuring non -point source (storm water) additions to the river; and • Addition of a sampling round of river chemistry during a precipitation event to determine the water quality implications of storm water. The impact of river water quality on aquatic health is a community concern. Improvements to the river will require the dedication and collaboration of all of river stakeholders. 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C 0_ CL A `w u n a' -0> !up p5�ipE E �i cJ ro u3 .c rt ry m '^ C1 m c c E 3 '. z u ° g ¢ °u 03 > 5 �+ R m uo C L C„ bo Co ,Q� otS E o E 8 rn N n W > v Ln m � v' E d > o m ° U }yQ� n -R 3 do d -3: C C «' i m 3 E a O cid v � C r 3 v�; ,2; to c c µ. a oiS m ° c O 0 3 W > s s ^ m 0 m 3 m b - e t7 I o y '� 3 o °-' a C7 c So ° A E° `o V ": a`1L1Oi m �+ 10 V, 1 C �i > `« o z �i 1 C u� O E C otS d H Y O d L m O r N y C f0 W C d [° E V yC` � w IE r Y O N y� p _W N 6 �4 v Y N w w O W W O• w n 9', S N O o C N C N d m G U m G d an d N pp NC .S MASC M C q> in Q al c O L G W m N a W O• > C > O R 0 m C W d A y 8 \ O O 3 O g s U Z z= 3 m W w Aquatic Health /Nutrient Study Presentation August 21, 2010 Page 1 Exhibit 2 MEMORANDUM TO: ERWSD & UERWA Board Members FROM: Linn Brooks, Assistant General Manager DATE: August 17, 2010 RE: Aquatic Health Index /Nutrient Study Presentation Background In 1997, the Environmental Protection Agency (EPA) initiated a nationwide effort to address eutrophication of the nation's surface waters resulting from excess nutrient enrichment. An important component of this effort, based upon the assumption that nutrients regulate algae growth, involves the development of water quality nutrient criteria for total nitrogen (TN) and total phosphorus (TP). In 2001, EPA recommended that states and tribes prepare plans and schedules for the development and adoption of nutrient criteria as water quality standards. In response to this initiative, the Colorado Department of Public Health and Environment ( CDPHE), Water Quality Control Division (WQCD), issued a "Nutrient Criteria Development Plan for Colorado" (WQCD 2004). The State's plan for establishing nutrient criteria for lakes and streams called for the use of a flexible approach that is scientifically defensible, specific to the unique conditions found within Colorado, and considerate of stakeholder concerns. To that end, the CDPHE convened a Nutrient Criteria Workgroup that has been meeting regularly since May of 2004. The Eagle River Water & Sanitation District ( "District") has been an active participant in this Workgroup that has included approximately thirty individuals representing municipalities, consulting firms, law firms, environmental groups, and state and federal agencies. Under current water quality regulations, the District's Discharge Permits for the Vail, Avon and Edwards Wastewater Treatment Facilities do not include wasteload allocations (effluent limits) for TN and TP because there are no applicable water quality standards or control regulations in place to provide the basis for such restrictions. The State's adoption of water quality standards for TN and TP will likely result in effluent limits that will be included in future permits for the District's wastewater treatment facilities. Meeting such limits will likely require modifications and improvements to the District's wastewater treatment facilities that could be costly. In addition, the adoption of nutrient standards will result in greater regulatory emphasis on the control of non -point sources of nutrients such as soil erosion and urban runoff. The WQCD's Approach and Proposed Standards Nutrients are vital components of the food chain and essential to virtually all forms of life, but when excess nutrients are added to streams and lakes they can cause accelerated growth of algae and aquatic plants. Excessive algae and plant growth affects the suitability of the water for municipal, recreation and aquatic life uses and can result in impairment of beneficial uses. The primary complicating factor for development of numeric nutrient criteria is that nutrients are not directly toxic to aquatic life, nor are they solely responsible for the excessive growth of aquatic plants. Physical factors, such as sunlight, water velocity, drought, temperature, suspended sediment, substrate, presence of zooplankton, and other biological factors also contribute to excessive algae and plant growth. These factors combine to Aquatic Health /Nutrient Study Presentation August 21, 2010 Page 2 Exhibit 2 increase the technical complexity of the process of determining appropriate nutrient standards for rivers and streams. The WQCD is seeking to develop water quality criteria for TN and TP for rivers and streams based on levels necessary to protect the aquatic life using the macroinvertebrate community as the surrogate for the aquatic life use. The health of the macroinvertebrate community is measured using a multimetric index (MMI) that incorporates taxa richness, community composition, pollution tolerance, and ecological functions. The MMI was developed to discriminate between minimally disturbed sites and those with significant anthropogenic influences. In conjunction with the effort to develop nutrient criteria, the WQCD has collected a large amount of macroinvertebrate and nutrient data from many representative locations around the state. From their analysis and interpretation of this data, the WQCD has concluded that the health of the macroinvertebrate community as determined by the MMI declines as concentrations of TN and TP increase. The WQCD derived the relationship between MMI scores and nutrient concentrations with an EPA - recommended statistical analysis tool (quantile regression). It is important to note, however, that MMI scores are influenced by many aquatic life stressors other than nutrients including habitat disturbance and the potential presence of other pollutants. There is continuing debate as to whether or not the statistical relationship between MMI scores and nutrient concentrations adequately differentiates the impacts of nutrients from other stressors. The WQCD's proposal for numeric criteria for TN and TP for rivers and streams is now scheduled for a rulemaking hearing before the Water Quality Control Commission (WQCC) in June 2011. If adopted, it is likely that numeric standards for TN and TP would be incorporated as water quality standards for the Eagle River and Gore Creek during the rulemaking process for the triennial review of water quality standards for the Upper Colorado River Basin in June 2014. Nutrient Study Purpose and Goals In June of 2007 the WQCD requested assistance from interested entities with their efforts to collect paired macroinvertebrate and nutrient data. The District has spearheaded and participated in many monitoring and water quality assessment efforts over the last 30 years that have been designed for purposes ranging from assessment of potential impacts associated with individual projects (e.g. Black Lakes) to evaluation of regional water quality conditions and trends. These ongoing efforts are needed to develop and support water resources planning, management and stewardship strategies that are scientifically based. Building upon previous studies, the District chose to participate in the WQCD's data collection effort. The District's "nutrient sampling and data collection plan" was initiated in 2008, in cooperation with the WQCD, the US Forest Service, and the USGS. The sampling plan was designed to characterize reference (minimally impacted) conditions and to bracket potential nutrient loading sources including the District's wastewater treatment facilities and sources associated with land use activities such as urban runoff, construction activities, golf courses, tributary drainages, etc. (See attached map and list of sampling sites). In addition, the study process will serve to develop a good working relationship between the District and the WQCD, and it will help to inform the District and WQCD about potentially unique conditions that may differentiate Gore Creek and the Eagle River from other streams. The Town of Vail via the Eagle River Watershed Council and Eagle County have made significant financial contributions to this effort which are much appreciated. Aquatic Health /Nutrient Study Presentation August 21, 2010 Page 3 Exhibit 2 After preliminary data analysis, the District modified its sampling plan in 2009 to include a more quantitative macroinvertebrate sampling method, an additional "spring run -off' sampling set, and the addition of new sites intended to further evaluate impacted areas. The District plans to continue collecting data in 2010, and based on the results, will further refine the sampling plan as needed to assess water quality conditions and potential management strategies. The long -term plan for data collection and analyses will be further modified as needed to track changes and evaluate the effectiveness of water quality improvement measures. Nutrient Study Preliminary Results On Thursday, August 26, Bob Weaver, Leonard Rice Engineers, and Dave Rees, Timberline Aquatics, will present preliminary data analysis results of the nutrient study in a joint meeting of the District and Authority Boards. In summary, the analyses of nutrient and macroinvertebrate data indicated the following conclusions: ❑ M acroi nverteb rate MMI scores for Gore Creek through areas in East Vail and Vail Village, above the Vail WWTP outfall were much lower than reference conditions indicating stresses associated with urban runoff or land use activities. The MMI scores for this area were below the "impairment threshold" proposed by the WQCD for aquatic life use. ❑ Concentrations of TN and TP in Gore Creek above the Vail WWTP outfall were generally below the standards proposed by the WQCD. ❑ MMI scores for Gore Creek below the Vail WWTP were somewhat improved from the areas in East Vail and the Village and above the proposed "attainment threshold" for aquatic life use. ❑ Concentrations of TN and TP in Gore Creek below the Vail WWTP outfall were higher than the numeric standards proposed by the WQCD during low -flow, high occupancy periods (November through April) and generally below these proposed standards during May through October. However, concentrations of TN and TP during September and October were generally at, or slightly above, the proposed standards. ❑ MMI scores for the Eagle River below the Gore Creek Confluence were generally above the proposed threshold for aquatic life use attainment with the exception of the site located below the Arrowhead Golf Course. ❑ MMI scores for locations immediately above and below the effluent outfalls for the Avon and Edwards WWTPs did not show significant changes, but there was a noticeable improvement in the MMI scores for Gore Creek below the Vail WWTP. ❑ Concentrations of TN and TP in the Eagle River above the Avon WWTP outfall were generally below the numeric standards proposed by the WQCD. ❑ Concentrations of TN and TP in the Eagle River below the Avon WWTP outfall were higher than the proposed numeric standards during September through April and below the proposed standards during May through August. ❑ Concentrations of TN and TP in the Eagle River above Edwards WWTP outfall were above the proposed standards during December through April and below the proposed standards during May through November. ❑ Concentration of TN and TP in the Eagle River below the Edwards WWTP outfall were higher than the proposed numeric standards throughout the year. ❑ For Gore Creek and the Eagle River, higher nutrient concentrations do not appear to be correlated with low MMI scores. In summary, it is important to note that the District's ongoing nutrient study is a work in progress. The preliminary conclusions outlined above are based upon direct comparisons with the MMI thresholds and Aquatic Health /Nutrient Study Presentation August 21, 2010 Page 4 Exhibit 2 nutrient criteria currently being discussed by the WQCD and the Nutrient Work Group. The WQCD has not developed any guidance that can be used for determining how these proposals would actually be applied and implemented. Next Steps (Where we go from here) Continued efforts toward monitoring, investigation, evaluation, and mitigation, where necessary, are key to ensuring that water quality and watershed health is protected and managed appropriately. Next steps toward this effort include: ❑ Continue data collection and data analyses efforts as needed to identify stressors within the Gore Creek and Eagle River study segments and further evaluate watershed conditions. ❑ Continue involvement in the Nutrient Criteria Workgroup and provide input to the WQCD's process toward setting and implementing numerical standards for nutrients. ❑ Continue involvement with the Aquatic Life Use Workgroup and provide input to the WQCD's process for setting biomonitoring protocols and tools for analysis (MMI). ❑ Investigation and implementation of control strategies and opportunities for reducing nutrient concentrations in WWTP discharges. ❑ Work with other stakeholders to investigate control strategies and opportunities for reducing pollutant input from other point and nonpoint sources within the watershed. ❑ Continue investigating the feasibility of arrangements designed facilitate attainment of watershed goals by providing regulatory flexibility, such as watershed -based permitting and water quality trading. ❑ Continue involvement with projects designed to improve water quality and aquatic health within the watershed. (e.g. ongoing efforts to reduce sediment loading to Black Gore Creek.) ❑ Continue monitoring to track changes and evaluate the effectiveness of water quality improvement measures. All of the District's efforts to date have focused on gaining the best understanding possible of source water quality and aquatic health conditions within our watersheds. Watershed compliance with nutrient water quality standards as currently proposed by the WQCD will result in broad impacts on municipal, urban, and land management related activities. Effective watershed management is an ongoing process that requires thoughtful planning based on sound scientific investigations, stakeholder involvement and collaboration, and the flexibility to adapt to the constantly changing regulatory, social, economic and natural environments. m5 U� U u w W 0 (99 a a a� LL m O A a a a� �� sm R' m L W Q Q W. 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