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TC Ord. No. 2007-11 Relating to the establishment of special districts within the TOATOWN OF AVON, COLORADO ORDINANCE NO. 07-11 SERIES OF 2007 AN ORDINANCE RELATING TO THE ESTABLISHMENT OF SPECIAL DISTRICTS WITHIN THE TOWN OF AVON BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON,COLORADO: Section 1. Amendment. The Avon Municipal Code is amended by the addition of a Title 18, "Miscellaneous," including a Chapter 18.01, "Establishment of Special Districts," to provide as follows 18.01.01 Definitions. The following words, terms and phrases, when used in this Chapter, shall have the meanings ascribed to them in this section. "Approved Service Plan" means (1) any Title 32 district service plan or amended service plan that has been approved by a resolution adopted by the Town Council or (2) a service plan of a District that was originally approved by a board of county commissioners and all of the property in the District is later annexed by the Town and jurisdiction for such service plan was accepted through the adoption of a resolution by the Town Council. "District" or "Districts" means one or more special district(s) which are quasi-municipal corporation(s) and political subdivision(s) proposed, organized, or acting pursuant to the provisions of this Chapter and Title 32. Other types of districts, such as business improvement districts, special improvement districts, general improvement districts, and other special or local improvement districts created pursuant to the Town Charter are specifically excluded from this definition. "Existing District" means a District in existence as of the effective date of this Ordinance. "Material Modification" means modifications to an Approved Service Plan as described in C.R.S. 32-1-207(2) or in this Chapter. "Model Service Plan" means Avon's model service plan for Title 32 Districts as approved by the Town Manager in accordance with the provisions of this Chapter. "Petitioner" means any person(s) or other legal entity proposing a service plan or an amendment to an Approved. Service Plan. "Proposed Service Plan" means any Title 32 District service plan or amended service plan filed with the Town that (i) has not yet been approved or disapproved by resolution of the Town Council, or (ii) has been conditionally approved by resolution of the Town Council subject to the inclusion of such amendments or additional information as stated in such resolution. PUBFIN\722117.6 "Title 32" means Title 32, Article 1, C.R.S., as the same may be amended from time to time. 18.01.02 Legislative Declaration. (a) The Town Council recognizes that under certain appropriate circumstances Districts provide a financing alternative for developers of infrastructure within the Town. The General Assembly has adopted legislation for the organization of special districts pursuant to Title 32 to facilitate the elimination of overlapping services provided by local governments and the double taxation that may occur, because of annexation or otherwise, when all of the taxable property of a District lies within the boundaries of the Town. (b) The Town Council, in furtherance of the best interests of the Town and the preservation and protection of the health, safety, prosperity, security, and general welfare of Town residents declares its intent: (1) To prevent the indebtedness incurred by Districts from adversely affecting the credit worthiness and credit ratings of the Town; (2) To ensure that the cost burden of public improvements in newly developed areas is placed upon those benefiting from such public improvements; (3) To prevent the shifting of development risk to non- developers; (4) To minimize the likelihood of excessive tax and fee burdens upon Town residents and property owners located within Districts; (5) To prevent the shifting of costs of Districts to residents of the Town who do not live within the geographical boundaries of a District; (6) To permit the creation of Districts where it will enhance the value of property; and (7) To ensure that the creation of Districts is consistent with the Town's comprehensive plan and will add to the quality of life of citizens of the Town. (c) The Town Council further declares that it recognizes that the formation of Districts requires the adoption of procedures for the orderly processing of proposals for the organization of these Districts. The Town Council prefers that non- residential uses be in a District which does not include residential uses, but exceptions to such preferences to allow a mixed-use development will be considered. In particular, residential units that are part of an affordable housing program generally should be excluded from Districts. Furthermore, pursuant to C.R.S. § 32-1-1001(1)0)(11), no PUBFIN\722117.6 _ 2 _ District shall impose a tap fee or connection fee for any property owned or used for affordable housing. 18.01.03 Application of State Statute. In addition to the power, authority, and protection set forth in this Chapter, the Town Council shall have all the power, authority and protection granted to municipalities by Title 32 and the creation and operation of any District shall be in conformance with Title 32; provided, however, that where any conflicts exist between Title 32 and this Chapter, the provisions of this Chapter shall control. 18.01.04 Filing of Proposed Service Plan. (a) Prior to the submission of an application for a Proposed Service Plan, the Petitioner shall request in writing a pre-submission meeting with the Town Manager or his designee and such other Town staff or consultants as the Town Manager deems appropriate to discuss the procedures and requirements for submission of a Proposed Service Plan. At such meeting the Applicant shall describe the proposed District to the Town staff and consultants. The Town staff and consultants shall explain the administrative process and provide information to assist the Petitioner with the orderly processing of the Proposed Service Plan. (b) The application shall comply with the requirements of this Chapter. The Town Manager shall have the sole discretion to determine staff availability to conduct the review and manage the review process. The Town Manager shall set the review time for the Proposed Service Plan based upon the availability of staff or outside consultants. In the event the Town Manager accepts the application for staff review, the Town Council shall be notified and an estimated processing time for staff review shall be established and communicated to the Petitioner. In the event the application is rejected, the Town Manager shall notify the Petitioner and Town Council. The determination of the Town Manager shall be conclusive and binding without right of appeal. However, a new application may be submitted by the Petitioner at a later date. In no event shall more than two applications be filed on any proposed District. (c) The Proposed Service Plan shall be in a form which compares the Proposed Service Plan to the Model Service Plan. . (d) At the time the Proposed Service Plan is filed, Petitioner shall remit a nonrefundable application fee to the Town of Ten Thousand Dollars ($10,000.00). In addition, the Town Manager may impose any additional processing fees as necessary to reimburse the Town for reasonable direct costs related to the Proposed Service Plan review and hearing. In addition, Petitioner shall agree in writing to pay the costs of outside consultants hired to assist staff with review of the Proposed Service Plan and shall deposit an amount required by the Town Manager to provide assurance of the payment of such costs. 18.01.05 Model Service Plan. PUBFIN\722117.6 _ 3 _ (a) The Town Manager, or his designee, shall develop a Model Service Plan which complies with this Chapter. All Proposed Service Plans shall substantially comply with the Model Service Plan. Existing Districts' Approved Service Plans shall not be required to be amended to comply with the Model Service Plan provisions. Any amendment to an Existing District's Approved Service Plan, however, shall comply with the Model Service Plan provisions to the extent specified in Section 18.01.15. The Model Service Plan may be amended, in whole or in part, by the Town Council from time to time. (b) In addition to the requirements of Title 32, the. Proposed Service Plan shall include or shall otherwise provide all information required by the Model Service Plan as well as the following: (1) A legal description of the proposed District boundaries as well as a map of the proposed District boundaries and a Town vicinity map. (2) The mill levy assessed by the District on real or personal property within the District shall be in an amount sufficient to satisfy only debt service and operations of the District. The burden shall be on the applicant to justify a proposed mill levy which exceeds the maximum mill levy set forth in the Model Service Plan. If a mill levy cap is imposed, the mill levy cap may be adjusted by the District to take into account legislative or constitutionally imposed adjustments in assessed values or the method of their calculation, so that to the extent possible, the actual revenues generated by the maximum mill levy are neither diminished nor enhanced as a result of such changes. Among other adjustments, a change in the ratio of actual valuation of assessable property shall be deemed a change in the method of calculating assessed valuation. The mill levy will terminate when the bonds are no longer outstanding with the exception of a mill levy sufficient for operations. The District shall not impose a Debt service mill levy for more than forty (40) years after the year of the initial imposition of such Debt service mill levy unless: (1) a majority of the board of directors of the District imposing the mill levy are residents of such District, and (2) such Board has voted in favor of issuing Debt with a term which requires or contemplates the imposition of a Debt service mill levy for a longer period of time than the limitation contained herein. (3) A statement that the District shall not issue any debt in any amount that exceeds the amount of debt authorized in its Approved Service Plan. (4) A capital plan which shall, at a minimum, contain: (a) A description of the type of capital facilities to be acquired or constructed by the District; facilities; (b) An estimate of the cost of the proposed PUBFIN\722117.6 _ 4 (c) A pro forma capital expenditure plan correlating expenditures with construction within the development over time. contain: over the life of the District; (5) A financial plan which shall, at a minimum, (a) The total amount of debt issuance planned (b) All proposed sources of revenue and projected District expenses, as well as the assumptions upon which they are based, for not less than the entire term of the bond issue; (c) The dollar amount of any anticipated financing, including capitalized interest, costs of issuance, estimated maximum rates and discounts, and any expenses related to the organization and initial operation of the District; (d) A detailed repayment plan or payment schedule covering the life of any financing, including the frequency and amounts expected to be collected from all sources; (e) The amount of any reserve fund and the expected level of annual debt service coverage which will be maintained for any financing; (f) The provisions regarding any credit enhancement for the proposed financing, including but not limited to, letters of credit and insurance; and risks of the financing. (g) A list and written explanation of potential (6) Statements that the District shall not: (a) Condemn property inside or outside the District boundaries without prior approval by the Town Council. (b) Include or exclude any property without prior approval by the Town Council. (7) Acknowledgement that any debt of the District, issued with a pledge or which results in a pledge, that exceeds the maximum debt mill levy and the maximum debt mill levy imposition term required by subsection (2) of this section, shall be deemed a Material Modification of a District's Approved Service Plan and shall not be an authorized issuance of debt unless and until such Material PUBFIN\722117.6 _ 5 _ Modification has been approved by the Town Council as part of an amendment to the Approved Service Plan. (8) Identification by name, address and phone number of those persons who the Petitioner intends to be the nominees for the initial board of directors of the District. (9) Proof of ownership and a list of encumbrances on all properties within the District in a form acceptable to the Town Attorney. (10) Limitations on the mill levy, rates, fees, charges, development exactions and other revenues pledged to service payment of indebtedness of the District or provisions for any credit enhancements for District debt in order to preclude the creation of undue financial risk to the District and its residents. (11) Requirements for dissolution of the District upon the accomplishment of the purposes and undertakings for which the District was formed. If the District was only created for construction of public improvements, it shall dissolve when all outstanding debt is paid. If the District was created for providing approved services or maintenance functions, the District may continue so long as those approved services are provided. (12) A description of rates, fees, charges or exactions proposed for imposition by the District. Any changes to rates, fees, charges or exactions shall be approved by the Town Council. (13) Acknowledgement by the District that the Town shall not be limited in implementing Town Council or voter approved growth limitations, even though such actions may reduce or delay development within the District and the realization of District revenue. If such limitations are implemented, and District development is reduced or delayed, or District revenues are negatively impacted as a result, such effects shall not be considered a Material Modification under Sections 18.01.13 or 18.01.14. (14) A statement that all activities by the proposed District will be subject to all of the Town's zoning, subdivision, building code, land use, or other requirements of the Town's Municipal Code. (15) Agreement that prior to the issuance of any bond issue, a copy of an opinion of nationally recognized bond counsel acceptable to the Town Attorney shall be delivered to the Town stating that the bond issue satisfies the requirements of the Approved Service Plan. (16) Agreement that the District shall use reasonable efforts to assure that all developers of or initial builders on the property located within such District provide written notice to all persons who purchase or lease property in the District from the developer or the builder, which notice discloses the maximum mill levy, as well as a general description of the District's authority to impose and collect rates, PUBFIN\722117.6 _ 6 _ fees, charges or exactions. The form of notice shall be filed with the Town Manager prior to the initial issuance of the debt of the District imposing the mill levy that is the subject of the maximum debt mill levy. The District shall use reasonable efforts to assure all promotional, marketing, and sales information shall display notice, at least equal in size and font to all other pertinent information, as to the debt, taxes, rates, fees, and exactions of the District. (17) Agreement that the District shall dedicate all public improvements planned for, designed, acquired, constructed, installed, relocated, redeveloped, and financed by the District to the Town or other appropriate governmental jurisdiction or owners association in a manner consistent with the approved development plan and other rules and regulations of the Town and applicable provisions of the Town's Municipal Code. The District shall describe in detail the regional infrastructure previously recommended by Town staff which benefits the citizens of the Town outside the boundaries of the District. (18) Agreement that the District shall design and construct all public improvements in accordance with the standards and specifications of the Town or any other governmental jurisdiction having proper jurisdiction and the District shall obtain the Town's approval of civil engineering plans and applicable permits of the construction and installation of any public improvements prior to performing any work thereon. Such agreement shall include the requirement that all property acquired and public improvements installed be done in compliance with Title 32 and applicable bidding requirements. (19) A statement that the District shall provide a copy of the written notice of every regular or special meeting of the District to the Town Clerk at least three (3) business days prior to such meeting. The District shall cause a copy of such notice to be posted at Town Hall. (20) A statement that the District shall provide to the Town Clerk a copy of any ballot issue, as defined in Article X, Section 20(2)(a) of the Colorado Constitution, no later than fifty-five (55) days before the election on such ballot issue. The District shall cause a copy of such ballot issue language to be posted at Town Hall. Agreement that the District shall use its reasonable efforts to obtain two summaries, as described in Article X, Section 20(3)(b)(v) of the Colorado Constitution, one for and one against the ballot issue, to be included in the required notice of election. (21) Agreement that the District shall not apply for or accept moneys from the Colorado Conservation Trust Fund, the Great Outdoors Colorado Fund, or any other fund available to governmental or nonprofit entities that the Town is eligible to apply for, except pursuant to approval by the Town Council. (22) Agreement that the District shall obtain prior written consent of the Town Council before filing a request with any court to consolidate with any other district. PUBFM722117.6 _ 7 _ (23) Agreement that not later than August 1 of each calendar year each District shall file an annual report with the Town Clerk. The annual report shall reflect activity and financial events of the District for the District's preceding fiscal year. The annual report shall include the following: (a) A narrative summary of the progress of the District in implementing its Approved Service Plan; (b) Except when an exemption from audit has been granted for the fiscal year under the Local Government Audit Law, the audited financial statements of the District for the fiscal year including a statement of financial condition (i.e. balance sheet) as of December 31 of the fiscal year and the statement of operations (i.e. revenues and expenditures) for the fiscal year; (c) Unless disclosed within a separate schedule to the financial statements, a summary of the capital expenditures incurred by the District in development of public facilities in the fiscal year, as well as any capital improvements or projects proposed to be undertaken in the five (5) years following the fiscal year; (d) Unless disclosed within a separate schedule to the financial statements, a summary of the financial obligations of the District at the end of the fiscal year, including the amount of outstanding indebtedness, the amount and terms of any new District indebtedness or long-term obligations issued in the fiscal year, the amount of payment or retirement of existing indebtedness of the District in the fiscal year, the total assessed valuation of all taxable properties within the District as of January 1 of the fiscal year, and the current mill levy of the District pledged to debt retirement in the fiscal year; (e) The District's budget for the calendar year in which the annual report is submitted; (f) A summary of residential and commercial development which has occurred within the District for the fiscal year; (g) A summary of all taxes, fees, charges and assessments imposed by the District as of January 1 of the fiscal year; (h) The name, business address and telephone number of each member of the board of directors and its chief administrative officer and general counsel, together with the date, place and time of the regular meetings of the board; and (i) A summary of any regular or special election held during the fiscal year, together with a copy of the ballot, public records relating to voter information, and other election materials, and a certification that such elections were held in conformance with all applicable laws. PUBFIN\722117.6 _ g _ The Town Council, at a regular or special public meeting, may review and discuss the annual reports received from each District. In the event the annual report is not timely received by the Town Clerk, notice of such default shall be given by the Town Clerk to the board of such District at its last known address. The failure of the District to file the annual report within thirty (30) days of the mailing of such default notice by the Town Clerk shall empower the Town Council to impose the sanctions authorized in Section 18.01.17. The remedies provided for non-compliance with the filing of the annual report shall be supplementary to the remedy authorized under Section 32-1-209 of Title 32. 18.01.06 Intergovernmental Agreement; Improvement Guaranty. A District, unless ail Existing District, shall not levy any taxes or issue any debt until it enters into an intergovernmental agreement with the Town regarding the enforcement of this Chapter and the provisions of the Model Service Plan. Such intergovernmental agreement shall be in form and substance satisfactory to the Town Manager and Town Attorney. The creation of a District shall not alter the obligation of the developer of property in such District to provide the Town with improvement guarantees or other collateral pursuant to the Town's Municipal Code. 18.01.07 Administrative Review of Plan. The Town staff shall have up to 120 days (unless an extension of such review period is approved by the Town Manager) from the date the Proposed Service Plan is filed, to complete an administrative review. This time period may be extended as deemed necessary by the Town Manager and the Petitioner shall be notified of the extension period. Once the review is complete, an analysis of the Proposed Service Plan shall be prepared in the form of a written report to the Town Council. The report shall set forth the recommendations of the staff for approval, disapproval or conditional approval of the proposed service plan and the reasons therefor. 18.01.08 Notice of Public Hearing. The Town Manager shall schedule a public hearing at a regular Town Council meeting upon completion of the administrative review report described in Section 18.01.07. Notice of the hearing shall be published by the Town in an issue of the newspaper selected by the Town as the official newspaper of publication at least 15 days but not more than 30 days prior to the scheduled hearing date. The Petitioner shall reimburse the Town for all costs related to such publication. (a) Notice of the hearing shall also be mailed by the Petitioner by first class mail, on or before the date such notice is to be published to: (1) The owners of record of all real property within the District as such owners of record are listed in the Proposed Service Plan as well as adjacent properties. (2) The State of Colorado division of local government. PUBFIN\722117.6 _ 9 _ (3) The governing body of any municipality or district which has levied an ad valorem tax within the next preceding tax year, and which has boundaries within a radius of three miles of the proposed District's boundaries. following: (b) Contents of notice. The notice of hearing shall set forth the (1) The date, time, location and purpose of the hearing. (2) A general description of the land contained within the boundaries of the proposed District. (3) Information outlining methods and procedures for the filing of a petition for exclusion. (4) A description of the type and purposes of the proposed District. (5) The maximum property tax levy to be imposed by the proposed District and the maximum period of time such levy shall be collected. be examined. (6) The place at which the Proposed Service Plan may (7) A statement that all protests and objections must be submitted in writing to the Town Council at or prior to the hearing or any continuance or postponement thereof in order to be considered. (8) A statement that all protests and objections to the District shall be deemed to be waived unless presented at the time and in the manner specified in this Chapter. 18.01.09 Public Hearing. (a) The hearing held pursuant to Section 18.01.08 shall be open to the public, and summary minutes shall be made by the Town Clerk. Any testimony or evidence which, in the discretion of the Town Council, is relevant or material to the organization of the District shall be considered. (b) The Town Council may postpone or continue the hearing until a later time or date or relocate the hearing by announcing such postponement, continuance or relocation of the hearing or by posting notice at the originally scheduled time and place of the hearing, and no further publication or mailing of the notice shall be necessary. PUBFIN\722117.6 -10- 18.01.10 Action by the Town Council. (a) Upon its review of the report presented by the Town Manager, the Proposed Service Plan, and any evidence presented at the public hearing, the Town Council shall have the authority to: Proposed Service Plan, or; (1) Approve without condition or modification the (2) Disapprove the Proposed Service Plan, or; (3) Conditionally approve the Proposed Service Plan subject to the submission of additional information relating to, or the modification of, the Proposed Service Plan or by agreement with the Petitioner of the Proposed Service Plan. (b) The Town Council shall disapprove the Proposed Service Plan unless evidence satisfactory to the Town Council of each of the following is presented: (1) There is sufficient existing and projected need for organized service in the area to be serviced by the proposed District. (2) The existing service in the area to be served by the proposed District is inadequate for present and projected needs. (3) The proposed District is capable of providing economical and sufficient service to the area within its proposed boundaries. (4) The area to be included in the proposed District has, or will have, the financial ability to discharge the proposed indebtedness on a reasonable basis. (c) The Town Council may conditionally approve the Proposed Service Plan upon satisfactory evidence that it does not comply with one or more criteria enumerated in subsection (b) of this section. Final approval shall be contingent upon modification of the Proposed Service Plan to include such changes or additional information as shall be specifically stated in the findings of the Town Council in order to satisfy the criteria in subsection (b) of this section. Final approval of a Proposed Service Plan may be withheld by Town Council until such changes are made to the Proposed Service Plan or such additional information is provided. (d) The Town Council may exclude territory from a proposed District prior to approval of the Proposed Service Plan. Any person owning property in the proposed District who requests his or her property be excluded from such District prior to the approval of the Proposed Service Plan shall file such request with the Town Clerk not later than five days prior to the public hearing held pursuant to Section 18.01.09. However, the Town Council shall not be limited in its action with PUBFIN\722117.6 - 11 - respect to exclusion of territory based upon such request. Any request for exclusion shall be acted upon before final action of the Town Council. (e) The findings of the Town Council shall be based solely upon the Proposed Service Plan, the report presented by the Town Manager, and any evidence presented at the public hearing by the Petitioners, Town officials, and interested parties. (f) Decisions of the Town Council concerning a Proposed Service Plan shall be in the sole discretion of the Town Council. Any waiver of the provisions of this Chapter 18.01 in connection with a Proposed Service Plan shall not be deemed as an amendment of this Chapter unless the Town Council adopts an ordinance expressly amending this Chapter 18.01. 18.01.11 Written Determination by Town Council. (a) Within 30 days after completing the public hearing held under this Chapter, the Town Council shall adopt a resolution regarding the Proposed Service Plan. (b) If the Proposed Service Plan is approved, a resolution of approval shall be adopted. (c) If the Proposed Service Plan is disapproved, a resolution of disapproval shall be adopted. The resolution shall include the reasons for such disapproval. (d) If the Proposed Service Plan is conditionally approved, the amendments to be made in or additional information relating to the Proposed Service Plan, together with the reasons for such amendments or additional information, shall also be set forth in writing, and the public hearing shall be continued until such amendments or additional information are incorporated in the Proposed Service Plan. Upon the satisfactory incorporation of such amendments or additional information in the Proposed Service Plan, the Town Council shall adopt a resolution of approval. (e) A resolution passed by the Town Council shall document the determination of the Town Council. No action or proceeding, at law or in equity, to review any acts or proceedings or question the validity of any determination by the Town Council related to the Proposed Service Plan pursuant to this Chapter, whether based upon irregularities or jurisdictional defects, shall be maintained in the district court of Eagle County unless commenced within 30 days after the passage of the Town Council resolution. Thereafter, any legal proceedings shall be barred. Should the court determine that the action of the Town Council regarding the Proposed Service Plan was arbitrary, capricious, or unreasonable the court shall remand the matter back to the Town Council with specific direction as necessary to avoid the arbitrary, capricious, or unreasonable result. PUBFIN\722117.6 -12- (f) In the manner and to the extent provided in this article, the Town Council shall maintain continuing jurisdiction over the Service Plan and shall exercise its rights in relation thereto. 18.01.12 Compliance; modification; enforcement. (a) Upon final approval by the district court of the organization of the District, the Petitioner shall file written notice thereof with the Town Manager. (b) After the creation of a District, Material Modifications to the Approved Service Plan may be made by the board of directors of the District only by petition to and approval by the Town Council in accordance with Section 18.01.15. (c) Any material departures from the Approved Service Plan, unless such has been modified with the approval of the Town Council pursuant to Section 18.01.15, shall be considered to be a violation of this Chapter, and the Town shall be entitled to all remedies available under law, including an action to enjoin such violation by the District. (d) Nothing herein prohibits the Town from conducting or requires the Town to conduct a quinquennial review pursuant to Section 32-1-1101.5 of Title 32. 18.01.13 Material Modification. The occurrence of any of the following actions, events or conditions ("Events") after (I) approval of an Approved Service Plan, (II) written notice from the Town of such Event is provided to the District and (III) the District fails to correct or cure such Event within ninety (90) days from receipt of such notice or fails to request a hearing under Section 18.01.14 (provided, however, if the District cannot reasonably correct or cure such Event within such ninety (90) day period but can reasonably correct or cure such Event within one hundred eighty (180) days after receipt of the notice, the District commences its correction or cure within such ninety (90) day period and diligently pursues the same to completion within the one hundred eighty (180) day period), are deemed changes of a basic or essential nature which constitute a Material Modification which shall require a service plan amendment: (a) Any issuance of debt or proposed issuance of debt with a pledge or that would result in a pledge that exceeds the maximum mill levy or the maximum mill levy imposition term. (b) Failure to pay principal or interest of any District bonds, notes, certificates, debentures, contracts or other evidences of indebtedness or borrowing issued or incurred by the District which: days or more; (1) Persists for a period of one hundred twenty (120) PUBFIN\722117.6 - 13 - (2) The delinquent payment(s) aggregates at least either Fifty Thousand Dollars ($50,000.00) or ten percent (10%) of the outstanding principal balance of the indebtedness; and (3) The creditors have not agreed in writing with the District to forbear from pursuit of legal remedies. (c) The institution of a proceeding for debt adjustment or the confirmation of a plan for adjustment of debt under Chapter 9 of the Bankruptcy Code; (d) The failure of the District to develop any public improvement or other.capital facility proposed in its service plan or to provide any approved service by the time necessary to serve the approved development within the District; (e) Failure of the District to realize at least seventy-five percent (75%) of the development revenues (including developer contributions, loans or advances) projected in the financial portion of the service plan during the three-year period ending with the report year, where development revenue is defined as fees, exactions and charges imposed by the District on residential and commercial development, excluding taxes, provided that the disparity between projected and realized revenue exceeds Fifty Thousand Dollars ($50,000.00); (f) The development of any capital facility in excess of Ten Thousand Dollars ($10,000.00) in cost, or the provision of any service which is not either identified in the service plan or authorized by the Town in the course of a separate development approval; (g) The occurrence of any event or condition which is defined under the service plan or intergovernmental agreement as necessitating a service plan amendment; (h) The default by the District under any intergovernmental agreement with the Town; (i) The inclusion or exclusion of any property into or from the District's boundaries without first obtaining the consent of the Town; 0) Any of the events or conditions enumerated in Section 32- 1-207(2) of Title 32. (k) The imposition of any tax, rate, fee, charge, assessment or exaction without the written consent of the Town or the issuance of any debt not authorized by the Approved Service Plan. 18.01.14 Determination of Applicability. Should the District dispute that one (1) or more of the Events enumerated in Section 18.01.13 has occurred, it may request a hearing before the Town Council within ninety (90) days after written PUBFIN\722117.6 -14- notice from the Town of such occurrence. After hearing and receipt of any relevant information presented by the District and the recommendation of the Town Manager, the Town Council shall make a finding as to whether such occurrence constitutes a Material Modification. If the Town Council concludes a Material Modification has occurred, the District shall comply with Section 18.01.15. The Town Council shall retain the prerogative to require an amendment thereafter if the change or deviation, on a cumulative basis, subsequently becomes material. In making its determination, the Town Council may consider, among other relevant information, whether the modification will have an adverse financial impact on the Town. 18.01.15 Amendment. If a Material Modification is found to have occurred under Section 18.01.13 or Section 18.01.14, within ninety (90) days of finding such Event has occurred, the board of directors of the District shall forward a petition to the Town Council requesting a service plan amendment. The petition for amendment shall include, among other relevant information: (a) Any information or documentation required under the applicable provisions of Title 32; (b) An update to information, assumptions or projects furnished in conjunction with the petition for approval of organization of a District or contained in the Approved Service Plan, with all changes highlighted and enumerated; (c) A detailed explanation of the activity, events or conditions resulting in the Material Modification, including actions taken or alternatives considered, if any, by the District to avoid the Material Modification; (d) The projected or resulting impact of the Material Modification on the District's ability to develop the capital facilities and infrastructure necessary to meet its original capital development plan; (e) The effect of the Material Modification on the District's ability to retire as scheduled its outstanding financial obligations and its ability to issue and market additional indebtedness to finance additional capital expenditures; (f) An updated financial plan for the District reflecting development absorption rates anticipated within the District's service area, projected annual revenues and expenditures based upon such projected absorption rates, debt issuance and amortization schedules, and a projection of anticipated capital outlays; (g) The financial impact of the Material Modification on existing residents of the District; (h) An updated five-year capital improvements plan; and (i) What alternatives or options are available to the District if the requested amendment is not approved. PUBFIN\722117.6 - 15 - All of the required information shall be supported by and submitted with appropriate technical analysis, reports and supporting documents of qualified professionals and consultants. The amendment shall be processed and reviewed in the same manner as prescribed for an initial service plan, except that the submittal requirements of this section shall apply. The application fee for a modification shall be as provided in Section 18.01.04(d) unless a reduction thereof is approved by the Town Manager. If the District applies for an amendment under this section, the Town shall not bring an action pursuant to Section 32-1-207(3)(b) of Title 32 during the processing by the Town of such request for an amendment unless necessary to protect the interests of the Town. If an Existing District applies for an amendment to an Approved Service Plan, the Model Service Plan provisions shall be considered and applied only to the provisions being amended. 18.01.16 Exemption. If any District has not undertaken development of capital facilities or issued any indebtedness, it may apply to the Town Council for an exemption from compliance with certain portions of this Chapter and its Approved Service Plan. The Town Council shall grant an exemption if the Board submits a resolution to the Town Council stating that upon issuance of the exemption, the District's authorization under the service plan and the intergovernmental agreement with the Town to undertake development of capital facilities or issue any indebtedness is suspended. With issuance of the exemption, the District shall be excluded from compliance with such exempted requirement, except that the District annually, not later than September 1, shall submit financial statements from the previous year and the budget for the current year. Prior to any District with an exempt status undertaking capital development or issuing any indebtedness authorized under its service plan or Title 32 other than regulatory reporting, it shall fully comply with the provisions of this Chapter. 18.01.17 Sanctions. If a District fails to request and obtain an amendment when required under this Chapter or otherwise fail to fully and completely comply with this Chapter, the Town Council by resolution may impose one (1) or more of the following sanctions, as it deems appropriate: (a) Exercise any applicable remedy under Title 32; (b) Withhold the issuance of any permit, authorization, acceptance, or other administrative approval necessary for the District's development of public facilities or construction; (c) Exercise any legal remedy under the terms of any intergovernmental agreement under which the District is in default; or (d) Exercise any other legal remedy, including seeking injunctive relief against the District, to force compliance with the provisions of this Chapter. PUBFIN\722117.6 - 16 - 18.01.18 Existing Districts - Election and Annual Report. Any District currently existing within the Town shall comply with the election requirements set forth in Section 18.01.05(b)(20) and the annual reporting requirements set forth in Section 18.01.05(b)(23). INTRODUCE P, ORDERED POSTED the O(IdN L~A APPROVED, PASSED ON FIRST READING AND day of October, 20 Ronald C. Wolfe, Mayor Patt envy, To k INTRODUCED, FINALLY APPROVED, AND PASSED ON SECOND REAnGRDER ED POSTED the 27th day of November, 2007. Ronald C. Wolfe, Mayor A Y. JA Jo W. Dunn, Town Attorney PUBFIN\722117.6 -17- ATTEST: MEMORANDUM TO: Town Council FROM: Town Attorney RE: Ordinance Relating to Establishment of Special Districts DATE: November 27, 2007 At the Council meeting on November 13, second reading of Ordinance No. 07-11 was again tabled until November 13 to allow staff time to review additional changes requested by Darlene Sisneros, the attorney for Traer Creek Metropolitan District. Ordinance No. 07-11 is an ordinance which will establish regulations governing existing and new "Title 32" special districts (so called because the type of district to be governed by the ordinance is formed pursuant to Title 32 of the Colorado Revised Statutes, including metropolitan districts, water and sanitation districts, fire districts and recreation districts). Local improvement districts, general improvement districts and other types of improvement districts are not included. Also tabled at last meeting and again on the agenda is a resolution approving the form of a model service plan. Both the ordinance and the model service plan were drafted by Randy Funk of Sherman & Howard, LLC, the Town's special district counsel. Both documents now contain additional changes to meet the concerns raised by Darlene Sisneros. Those changes were prepared by the Town Attorney and Randy Funk. The changes are for the most part straight forward and indicated on copies of both documents included in the Council notebook. Only two changes ought to require explanation. First, in Subsection 18.01.05(b)(2), all the language placing a limit on the mill levy has been eliminated. Instead, at page 9 of the model service plan, language has been added to provide that the maximum mill levy is 50 mills for both debt service and operation purposes. It is believed that this language follows the direction of the Council. Any applicant will thereby have the burden of demonstrating why the 50 mill limit should be exceeded. Second, in Subsection 18.01.05(b)(20), the language has been changed to require that the ballot language in connection with any election on a ballot issue be provided to the Town no later than 42 days before the election. At the last meeting it was the suggestion of council members that the language in changed to require that the ballot language be provided no later than certification of it to the secretary of state or clerk and 00 1 024000\PUBFIM732747.4 recorder. Randy Funk questioned such a change based upon the fact that it is legally possible for a special district to conduct its own election without certification of the ballot language to either the secretary of state or the clerk and recorder. After further discussion with Darlene Sisneros, it was agreed that the appropriate deadline was no later 42 days before the election. A_42 day deadline is based upon the fact that state statute requires that ballot language ordinarily be certified to the clerk and recorder no later than 42 days before the election. A corresponding change was made on page 7 of the model service plan. Finally, although it was not discussed at the last meeting, Section 2 of the ordinance, making the ordinance effective 30 days after its adoption, has been deleted. There is no reason why the ordinance should not take effect at the usual time, seven days after posting following final adoption. Conclusion. Staff recommends that the ordinance, as revised, be adopted on second reading and that the resolution approving the form of the model service plan, as revised, also be adopted. Jwd:ipse 2 001024000\PUBFR 8732747.4 2 COLLINS COCKREL & COLE A PROFESSIONAL CORPORATION PAUL R. COCKREL JAMES P. COLLINS ROBERT G. COLE TIMOTHY J. FLYNN EVAN D. ELA LINDA G. ALEXANDER DAVID A. GREHER ATTORNEYS AT LAW JAMES M. MOCK 390 UNION BOULEVARD, SUITE 400 BECKY R. LENNON DENVER, COLORADO 80228-1556 ERIC C. JORGENSON TELEPHONE: 303-986-1551 OF COUNSEL TOLL FREE: 800-354-5941 FACSIMILE: 303-986-1755 DIRECT E-MAIL ejorgenson@cccfirm.com www.cccfirm.com November 12, 2007 VIA E-MAIL John Dunn, Town Attorney Town of Avon John W. Dunn & Associates, LLC Post Office Box 7717 Avon, Colorado 81620 Re: Ordinance No. 07-11 Dear John: Last month one of our clients alerted us to the fact that the Town of Avon was considering the adoption of Ordinance No. 07-11, An Ordinance Relating To The Establishment of Special Districts Within The Town of Avon. As you are aware, this firm represents several special districts whose Service Territory includes the Town of Avon, unincorporated areas of Eagle County and other municipalities. Our concerns relate to the application of this Ordinance to such special districts whose boundaries are not wholly contained within the boundaries of the Town of Avon. Although we are fairly certain this Ordinance is not intended to apply to such districts, we feel this issue could easily be clarified in the Ordinance for the benefit of the elected officials and staff of the Town, as well as special districts now existing or that may be formed in the future. We understand this matter was tabled on October 23 at the request of the attorney for the Traer Creek Metropolitan District. Your Memo to the Council indicates that you and Mr. Funk met with Darlene Sisneros and Bill Ankele and, as a result of that meeting, certain changes have been made to the Ordinance. This matter is now on the Agenda for November 13 for Public Hearing, Second Reading of the Ordinance and approval of the Model Service Plan. . We would appreciate it if you would consider two changes to this Ordinance. First, expand the definition of "District" in 18.01.01 to provide: {00039945.DOC COLLINS COCKREL & COLE Town of Avon November 12, 2007 Page 2 "District" or "Districts" means one or more special district(s) which are quasi- municipal corporation(s) and political subdivision(s) proposed, organized, or acting pursuant to the provisions of this Chapter and Title 32 whose boundaries are wholly contained within the boundaries of the Town of Avon. We believe this would confonn the reach of this Ordinance to the jurisdiction authorized by Section 32-1-204.5, C.R.S. ' Second, because you have provided for the Application of State Statue in 18.01.03 and, in the event of any conflicts, overridden state law, we would recommend the addition of a new section: 18.01.035 Application of Ordinance. This Ordinance shall only apply to a District whose boundaries are wholly contained within the boundaries of the Town of Avon, Colorado. We appreciate your consideration of these suggestions. Please advise before the Meeting tomorrow night if you will agree to incorporate these suggestions into this Ordinance for Second Reading Sincerely, Eric C. Jorgenson cc: Fred Morrison, District Manager Eagle County Health Service District James P. Collins, General Counsel {00039945.DOC COLLINS COCKREL & COLE A PROFESSIONAL CORPORATION PAUL R. COCKREL JAMES P. COLLINS ROBERT G. COLE TIMOTHY J. FLYNN EVAN D. ELA LINDA G. ALEXANDER DAVID A. GREHER ATTORNEYS AT LAW JAMES M. MOCK 390 UNION BOULEVARD, SUITE 400 BECKY R. LENNON DENVER, COLORADO 80228-1556 ERIC C. JORGENSON TELEPHONE: 303-986-1551 OF COUNSEL TOLL FREE: 800-354-5941 FACSIMILE: 303-986-1755 DIRECT E-MAIL ejorgenson@cccfirm.com www.cccfirm.com November 12, 2007 VIA E-MAIL John Dunn, Town Attorney Town of Avon John W. Dunn & Associates, LLC Post Office Box 7717 Avon, Colorado 81620 Re: Ordinance No. 07-11 Dear John: Last month one of our clients alerted us to the fact that the Town of Avon was considering the adoption of Ordinance No. 07-11, An Ordinance Relating To The Establishment of Special Districts Within The Town of Avon. As you are aware, this firm represents several special districts whose Service Territory includes the Town of Avon, unincorporated areas of Eagle County and other municipalities. Our concerns relate to the application of this Ordinance to such special districts whose boundaries are not wholly contained within the boundaries of the Town of Avon. Although we are fairly certain this Ordinance is not intended to apply to such districts, we feel this issue could easily be clarified in the Ordinance for the benefit of the elected officials and staff of the Town, as well as special districts now existing or that may be formed in the future. We understand this matter was tabled on October 23 at the request of the attorney for the Traer Creek Metropolitan District. Your Memo to the Council indicates that you and Mr. Funk met with Darlene Sisneros and Bill Ankele and, as a result of that meeting, certain changes have been made to the Ordinance. This matter is now on the Agenda for November 13 for Public Hearing, Second Reading of the Ordinance and approval of the Model Service Plan. We would appreciate it if you would consider two changes to this Ordinance. First, expand the definition of "District" in 18.01.01 to provide: {00039945.DOC COLLINS COCKREL & COLE Town of Avon November 12, 2007 Page 2 "District" or "Districts" means one or more special district(s) which are quasi- municipal corporation(s) and political subdivision(s) proposed, organized, or acting pursuant to the provisions of this Chapter and Title 32 whose boundaries are wholly contained within the boundaries of the Town of Avon. We believe this would confonn the reach of this Ordinance to the jurisdiction authorized by Section 32-1-204.5, C.R.S. Second, because you have provided for the Application of State Statue in 18.01.03 and, in the event of any conflicts, overridden state law, we would recommend the addition of a new section: 18.01.035 Application of Ordinance. This Ordinance shall only apply to a District whose boundaries are wholly contained within the boundaries of the Town of Avon, Colorado. We appreciate your consideration of these suggestions. Please advise before the Meeting tomorrow night if you will agree to incorporate these suggestions into this Ordinance for Second Reading Sincerely, Eric C. Jorgenson cc: Fred Morrison, District Manager Eagle County Health Service District James P. Collins, General Counsel 100039945.DOC COLLINS COCKREL & COLE A PROFESSIONAL CORPORATION PAUL R. COCKREL JAMES P. COLLINS ROBERT G. COLE TIMOTHY J. FLYNN EVAN D. ELA LINDA G. ALEXANDER DAVID A. GREHER ATTORNEYS AT LAW JAMES M. MOCK 390 UNION BOULEVARD, SUITE 400 BECKY R. LENNON DENVER, COLORADO 80228-1556 ERIC C. JORGENSON TELEPHONE: 303-986-1551 OF COUNSEL TOLL FREE: 800-354-5941 FACSIMILE: 303-986-1755 DIRECT E-MAIL ej org en son@cccfi rm.com www.cccfirm.com November 12, 2007 VIA E-MAIL John Dunn, Town Attorney Town of Avon John W. Dunn & Associates, LLC Post Office Box 7717 Avon, Colorado 81620 Re: Ordinance No. 07-11 Dear John: Last month one of our clients alerted us to the fact that the Town of Avon was considering the adoption of Ordinance No. 07-11, An Ordinance Relating To The Establishment of Special Districts Within The Town of Avon. As you are aware, this firm represents several special districts whose Service Territory includes the Town of Avon, unincorporated areas of Eagle County and other municipalities. Our concerns relate to the application of this Ordinance to such special districts whose boundaries are not wholly contained within the boundaries of the Town of Avon. Although we are fairly certain this Ordinance is not intended to apply to such districts, we feel this issue could easily be clarified in the Ordinance for the benefit of the elected officials and staff of the Town, as well as special districts now existing or that may be formed in the future. We understand this matter was tabled on October 23 at the request of the attorney for the Traer Creek Metropolitan District. Your Memo to the Council indicates that you and Mr. Funk met with Darlene Sisneros and Bill Ankele and, as a result of that meeting, certain changes have been made to the Ordinance. This matter is now on the Agenda for November 13 for Public Hearing, Second Reading of the Ordinance and approval of the Model Service Plan. We would appreciate it if you would consider two changes to this Ordinance. First, expand the definition of "District" in 18. to provide: {00039945.DOC COLLINS COCKREL & COLE Town of Avon November 12, 2007 Page 2 "District" or "Districts" means one or more special district(s) which are quasi- municipal corporation(s) and political subdivision(s) proposed, organized, or acting pursuant to the provisions of this Chapter and Title 32 whose boundaries are wholly contained within the boundaries of the Town of Avon. We believe this would conform the reach of this Ordinance to the jurisdiction authorized by Section 32-1-204.5, C.R.S. Second, because you have provided for the Application of State Statue in 18.01.03 and, in the event of any conflicts, overridden state law, we would recommend the addition of a new section: 18.01.035 Application of Ordinance. This Ordinance shall only apply to a District whose boundaries are wholly contained within the boundaries of the Town of Avon, Colorado. We appreciate your consideration of these suggestions. Please advise before the Meeting tomorrow night if you will agree to incorporate these suggestions into this Ordinance for Second Reading Sincerely, Eric C. Jorgenson cc: Fred Morrison, District Manager Eagle County Health Service District James P. Collins, General Counsel {00039945.DOC