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Kelly PC <br />999 18th Street, Suite 1450, Denver, CO 80202 <br />Mayor Stolzmann and Councilmembers <br />City of Louisville <br />January 23, 2020 <br />Page 8 <br /> <br /> <br />• Specificity of financial plan. As with other aspects of the service plan, the <br />financial plan should be specific and mandatory in nature – that is, all proposed <br />indebtedness of the district should be described with reasonable specificity, and <br />no financing transactions structured other than as shown in the financial plan <br />should be considered authorized. (Property tax-based financing is the most <br />common type of special district debt and may be viewed relatively favorably since <br />it is the least dependent on continuing special district operations.) <br /> <br />It is common that the financial plan presented in a service plan will not likely <br />match exactly the structure in which bonds are issued in the future, because the <br />finance plan attached to the service plan is simply a snapshot of the market at the <br />time of approval of the service plan. However, the City Council could require or <br />limit how future bonds are issued that are not structured in essentially the same <br />way. For example, the financial plan in most service plans contemplates the <br />issuance of limited tax general obligation bonds. When it comes time to actually <br />issue the bonds, the proposed bond issue may contemplate both a “senior lien” <br />limited tax general obligation bond and a subordinate series of bonds (i.e., issuing <br />subordinate bonds or even third level subordinate bonds). The City could require <br />the district submit that updated financing plan to the City in the event that <br />subordinate bonds are contemplated. The City could also require an independent <br />financial advisor provide some assurance to the City at the time of proposed <br />issuance that the proposed finance plan is reasonable. <br /> <br />• Debt restrictions. Support for the required statutory finding can also be derived <br />from service plan provisions that limit the special district’s debt in various ways, <br />including the following: maximum dollar amount of debt (as well as limits on <br />interest rate and other terms); maximum term for all debt; requirements that <br />development reach a certain point before the special district incurs financial <br />obligations to third parties; refunding debt restrictions; and provisions <br />demonstrating that a reasonable portion of the cost of public improvements is paid <br />by the developer rather than being financed with district debt. State law debt <br />limits are described above, but the City can further limit or provide parameters <br />around the issuance of debt by a metro district. <br /> <br />We generally encourage metro district proponents to include some mix of the above types of <br />limitations and provisions in their proposed service plans, even if not required by statute. <br /> <br />B. Investor suitability. This area of concern overlaps, but is also somewhat separate <br />from, support for the statutory finding of financial ability as discussed above. For liability and <br />other reasons, it may be reasonable for the City to seek assurances in the service plan that special <br />11