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Kirkwood Meadows public utility District

Kirkwood Meadows public utility District. Mello- Roos Community Facilities District 98-01 Rate and Method of Apportionment Proposed Amendment . December 13, 2013. Background.

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Kirkwood Meadows public utility District

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  1. Kirkwood Meadowspublic utility District Mello-Roos Community Facilities District 98-01 Rate and Method of Apportionment Proposed Amendment December 13, 2013

  2. Background • Mello-Roos Community Facilities District formed in 1998 to fund $6.2M in improvements to Wastewater Treatment Plant. • essentially a “prepaid” connection fee for specific areas of Kirkwood. • At the time the bond was approved there were a few large parcels comprising of both ski and development acreage. Planned to redo boundaries once Specific Plan approved, never accomplished • Vail condition of purchasing Kirkwood was to remove the encumbrance from “ski” land (where there is no plan for development or wastewater connection)

  3. District Role • KMPUD Board agreed to work on this subject to: • No other CFD members, besides KCP and Vail, being adversely impacted. • That the District is financially secure with this change • That KCP provide proper Indemnification to protect the District from future suits • District not exposed to out of pocket costs • All outstanding KCP receivables paid in full • District consulting team: • Dick Shanahan (general counsel), David Fama (bond counsel) and Victor Irzyk (bond administrator).

  4. Structure • Methodology changed from an acreage based allocation to a residential dwelling unit allocation: • Better alignment with rationale of CFD (prepaid tap fee) • Acreage replaced with undeveloped parcels • Improved collateral position for bondholders (assessment levy “matched” to parcel value) • Ties into Specific Plan • Developable units tied to parcels but can be moved • “Backup tax” concept applies in the event of large default • KCP / future development shoulders this risk, consistent with the prior structure

  5. Proposed Land Use Classification

  6. Current Development Allocation * Based on KCP development plans as of December 3, 2013

  7. Proposed Assessment Allocation

  8. Credit Enhancements • Cross-Collateralize all undeveloped KCP property • Delinquency on any single property puts all property in default • Cash Collateral • Two years of incremental assessments on all undeveloped (relative to today): $472K. Collateral released upon CO • Full Indemnification, based on security of cash collateral

  9. Cash Collateral • How the Cash Collateral of $472K was Arrived at: • Total Undeveloped Liability (KCP and Vail) = $283,370 • Less Current KCP Liability = $47,010 • Multiplied by Two (Based on the 18 month period it takes to foreclose on a delinquent property) • Equals $472,720, Cash Collateral

  10. Recommendation of Approval • Opportunity to modernize / update RMA to current best practice • Alignment of assessment with original intent • Within authority of existing CFD documents and specifically envisioned during zoning changes (2003) • Fairness and Materiality Considerations • No impact to existing owners in the CFD • Reduced or mitigated risks to bondholders and the District • Conservative credit enhancements

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