Agenda Date: 07/19/2016
Subject:
Title
A resolution approving the amended 2016 Operating Plan and Budget for the Aspen Grove Business Improvement District
Body
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Presented By: |
Doug Farmen, Finance Director |
POLICY QUESTION:
Does city council support amending the Aspen Grove Business Improvement District (BID) 2016 Operating Plan and Budget?
BACKGROUND:
The Aspen Grove BID was formed to finance the public improvements necessary for the development and operation of the Aspen Grove Lifestyle Center. Aspen Grove is owned by DDR Aspen Grove Lifestyle Center Properties, LLC, and managed and operated by DDR Corp.
STAFF ANALYSIS:
On October 6, 2015, city council approved the 2016 Operating Plan and Budget. Pursuant to Section 31-25-1211, C.R.S., the 2016 Operating Plan may only be amended with approval of the city council.
The 2016 Operating Plan did not contemplate the BID would refund its outstanding Limited Tax General Obligation Refunding Bonds, Series 2007. Because the credit markets have continued to experience historically low interest rates, the BID's Board of Directors ("Board") solicited proposals from investment banking firms to determine if refunding the 2007 bonds would produce favorable savings. The 2007 bonds mature on various dates, ranging from 2017-2025, and are callable on December 1, 2016. The 2007 bonds may be called up to 90 days prior to the call date in accordance with current IRS refunding rules.
FISCAL IMPACTS:
Based on the recommendation of Piper Jaffray & Co., the investment banking firm selected by the Board to assist in the refunding of the 2007 bonds, the BID is analyzing whether to refund the 2007 bonds through a private placement with a bank, or a traditional public bond offering. Either way, the BID will realize similar significant net present value savings. Piper Jaffray's preliminary financial projections for the proposed refunding estimate a net present value savings of $904,136.00. The interest rate on the 2007 bonds ranges from 4.625% to 5%. The interest rate on the refunded bonds is expected to range from .8% to 1.8%.
STAFF RECOMMENDATION:
Staff recommends approval of the resolution amending the 2016 Operating Plan and Budget for the Aspen Grove BID.
PROPOSED MOTION:
Proposed Motion
I move to approve the resolution approving the amended 2016 Operating Plan and Budget for the Aspen Grove Business Improvement District.