Waterfront Metropolitan District Service Plan Amendment July 18, 2017

Applicants Waterfront Metro District Board Dan Kamrath David Leary Doug Vandertuin Leslie Snow Loren Johnson General Counsel to the District George Rowley - White Bear Ankele Tanaka & Waldron My name is Leslie Snow and I am on the Metro Board and we want to thank you for the time on the agenda. Other members of the board are: Dan, David, Doug and Loren. We also have with us George Rowley our attorney from White Bear Ankele Tanaka and Waldron, Diane Wheeler from Simmons & Wheeler and Zach Bishop, Managing Director, Public Finance, D.A. Davidson & Co.

Current Situation Metro District Established 2003 Turned Over to Homeowners 2007 Number of Lots 200 Original Debt $5,585,000 Existing Debt $4,830,000 Interest Rate 4.5% Payoff Date December 2035 Mill Levy Cap 46 Represents ~ 1/3 of total mills Drew on the reserve fund Years 2014 and 2015 due to assessed value decline The district was established in 2003 and the developer left in 2007-resident controlled neighborhood Debt is 4.8 million with payoff date of 2035 (18 years left) Total mill is 120 with 46 coming from metro district Had to draw on our reserve to make payments due to assessed value decline in 2014/2015

District Map North east side of Boyd Lake and west of Boyd Lake Avenue

Intention Intention Accomplish By Reduce tax burden for homeowners Refinancing existing debt Removing mill levy cap in order to negotiate best interest rate Setting mill levy at a rate sufficient to pay the refinanced debt Discuss assessed value trigger at 50% if needed.

Precedence Cities and counties who have approved metro district amendments to remove mill levy cap for refinancing Arvada Aurora Broomfield Centennial Colorado Springs Erie Westminster Jefferson County

Debt Refinancing Option Projected Debt Levy 27 mills Estimated Interest Rate* 4.00% Maturity 2047 Closing Date September 2017 Type of Loan Fixed Rate A-Rated Bond *Interest rate based on removal of mill levy cap.

Savings to Residents 2017 Assessed Values in Neighborhood 2017 Metro Tax @ 46 Mills 2017 Metro Tax @ *33 Mills Tax Savings $ 315,600 $ 1,045 $ 750 $ 295 $ 411,600 $ 1,363 $ 978 $ 385 $ 519,000 $ 1,719 $ 1,233 $ 486 $ 634,560 $ 2,102 $ 1,508 $ 594 $ 792,120 $ 2,624 $ 1,882 $ 742 $ 926,520 $ 3,069 $ 2,201 $ 868 $1,023,120 $ 3,389 $ 2,431 $ 958 $1,335,960 $ 4,425 $ 3,174 $ 1,251 Metro tax savings of 28% Overall tax savings 11% Savings is not a small dollar amount Overall tax savings of 11% *Savings based on 27 mills applied to refinanced debt repayment plus 6 mills to general fund

Effects of Mill Levy Changes Year Assessed Value Metro Tax Mill Levy House Value Change Metro Tax $ Change 2017 $ 792,120 $ 1,882 33 $ 673,302 $ 1,891 39 -15% 0% $ 592,506 $ 1,898 44.5 -25% After refinance, dollar amount paid by homeowners remains the same while the mill levy adjusts for potential valuation changes. Removing the mill levy cap may sound troublesome but what you need to consider is the actual dollar amount that will be paid by each homeowner. As you can see in this example when the assessed value of a house goes down, the mill levy needed to pay the debt increases but the dollar amount paid by the homeowner remains the same.

Homeowner Protection Mill levy will be set at a rate sufficient to pay the fixed rate refinanced debt Any new debt will be subject to a total debt service mill levy cap The mill levy will not exceed 40 mills when combined with the mill levy required to pay the refinancing debt General fund will be capped at 6 mills Fund pays the operation and maintenance expenses

Communication to Homeowners Notice of the District’s intent to amend its service agreement to remove mill cap for debt repayment was provided as follows: On agenda at three HOA Board meetings Agenda is sent to all homeowners before the meeting and notes are published after the meeting Intent to refinance letter sent to homeowners in January 2017 Letter also requested attendance at HOA’s annual meeting at the end of January for presentation and discussion Outcome of discussion at annual HOA meeting was sent to homeowners as part of meeting notes Article discussing intent in Spring Newsletter sent to homeowners in March 2017 Posted notice of special meeting with city staff in April Posted and mailed notice to community regarding City Council public hearing Sent email to community regarding City Council public hearing We have been transparent with the community and kept them abreast of our intention, process and progress through emails, notes and newsletters. The district was on the agenda at our HOA annual meeting in January were we presented our plan.

Support The amendment is supported by: District Board of Directors HOA Board of Directors Community After amendment discussion at HOA annual meeting, residents were asked to vote on the following: Do you approve the removal of the mill levy cap for paying off refinanced debt only from the Waterfront Metropolitan District’s service agreement? 91% of homeowners voted yes 18% of the community present We have support of our HOA Board and the community. At our annual meeting we asked those in attendance to vote on the removal of the mill levy cap for paying off debt and 91% voted in favor.

Conclusion The Metro District Board is requesting the current service agreement be amended by removing the mill levy cap for the refinanced debt allowing the district to negotiate the best interest rate Refinancing will reduce the tax burden of the District’s homeowners Thank you for your consideration Discussion