HomeMy WebLinkAboutPACKET Town Board Study Session 2015-08-11
Tuesday, August 11, 2015
TOWN BOARD 5:00 p.m. – 6:40 p.m.
STUDY SESSION Rooms 202/203
4:45 p.m. Dinner Served
5:00 p.m. Basics of Zoning.
(Director Chilcott)
5:45 p.m. Update on Financial Policies.
(Finance Officer McFarland)
6:15 p.m. Trustee & Administrator Comments & Questions.
6:25 p.m. Future Study Session Agenda Items.
(Board Discussion)
6:40 p.m. Adjourn for Town Board Meeting.
“Informal discussion among Trustees concerning agenda items or other Town matters may occur before this
meeting at approximately 4:45 p.m.”
AGENDA
Community Development Memo
To: Honorable Mayor Pinkham
Board of Trustees
Town Administrator Lancaster
From: Alison Chilcott, Community Development Director
Date: August 11, 2015
RE: Basics of Zoning
Objective:
On August 11th staff will provide an overview of zoning to aid elected officials in
decision-making.
Staff anticipates that as development activity continues to increase elected officials will
be asked to make more frequent and harder decisions related to development
applications and rezoning requests. These decisions will have a long-lasting impact on
the community. Also, the Town will be preparing a Downtown Plan that will articulate a
ten year vision for downtown. Once complete, the Town Board may want to consider
zoning code amendments in order to implement the plan.
Present Situation:
Zoning is one of the regulatory tools used to implement the community’s vision for the
future. This includes the community vision for land use, neighborhood character,
economic development and environmental resiliency. This vision is typically articulated
in the community’s comprehensive plan and zoning regulations are then developed to
implement that plan.
The Estes Valley Comprehensive Plan articulated a vision for the Estes Valley. In 2000
the Estes Valley Development Code was adopted which established zoning regulations
to implement the vision. For example the Comprehensive Plan envisions that downtown
Estes Park is a pedestrian-friendly commercial district. The Fall River corridor is
envisioned to provide accommodations to support our tourist-based economy.
For this reason, downtown is zoned CD Downtown Commercial and CD zoning
regulations allow restaurants and retail use, but prohibit first floor residential use in
buildings adjacent to Elkhorn Avenue. Most of Fall River Road is zoned A-
Accommodations/Highway Corridor. Zoning regulations allow hotel and resort cabin
uses, but do not allow uses such as gas stations and grocery stores.
Proposal:
Not applicable.
Advantages:
More informed decision-making.
Disadvantages:
None
Action Recommended:
Not Applicable
Level of Public Interest
When a specific development application or rezoning request is being considered by
elected officials, the level of public interest related to that request is typically very high.
The level of public interest in the general topic of zoning is assumed to be low.
Zoning BasicsESTES VALLEY ZONING MAPZoning Our FutureAccommodations\High IntensityLow-Density Residential -RuralCommercial DowntownObjectiveWhy Are We Discussing this Now? What is Zoning and What is it’s Purpose?A Brief Overview of Zoning HistoryEstes Valley ZoningBest Practices and Pitfalls to AvoidQ&AWrap Up
ObjectiveProvide an overview of zoning to aid elected officials in decision making.Why Are We Discussing this Now? As development activity continues to increase elected officials will be asked to make more frequent and harder decisions related to development applications and rezoning requests. Also, the Town will be preparing a Downtown Plan that will articulate a ten year vision for downtown. Once complete, the Town Board may want to consider zoning code amendments in order to implement the plan.These decisions will have a long-lasting impact on the community. Zoning Basics
Zoning Case
Rezoning Case
What is Zoning and What is its Purpose?Zoning is a powerful regulatory toolThat shapes how our community functions, socially, economically and physicallyTouches all aspects of how people live work and play in our communityAnd is a tool that must be used with care
Relationship Between Town Planning and ZoningTown planning is visionaryZoning is regulatoryDevelopment Reviewand Approval (Permitting)Zoning (Regulations & Standards)Town Planning (Vision/Goals)Planning is the foundation of zoning
2000 Valley-Wide Re-ZoneESTES VALLEY ZONING MAPAll properties in the Estes Valley were rezoned19 Zoning Districts were created.Includes Residential, Commercial, Industrial, and Special Purpose Overlay DistrictsEstablished regulations to implement the Estes Valley Comprehensive Plan visionCreated a unified set of development regulations for the entire Estes Valley.Included down-zoning identified in cop planPrior to 2000 many lots could contain two residential dwellingsT-Tourist lots in the unincorporated Estes Valley had no density or bulk limits
Four Broad Approaches to Zoning1. Euclidean ZoningIncluding Planned Unit Developments2. Performance Zoning3. Form-Based Zoning Code4. Euclidean Hybrid Zoning
1stApproach to ZoningEuclidean ZoningEuclidean Zoning – Traditional Zoning• About 100 years ago, New York City adopted the first zoning plan• A division of the city into use zones and boxes into which buildings had to fit in order to avoid crowding their neighbors• To avoid creating public health, safety, or fire hazards• To prevent land use combinations likely to cause nuisances in the future• Later on this approach included varied regulations by specific use rather than by the zoneFrom A Better Way to Zone, Don Elliot
Euclidean ZoningLand Use ZonesDivides the community into different land use zonesESTES VALLEY ZONING MAP
Euclidean ZoningEach Zone District has a PurposesThis district is established to protect and preserve some of the most rural areasof the Estes Valley in which significant view sheds, woodlands, rock outcroppings, ridgelines, other sensitive environmental areas and low-density residential development comprise the predominant land use pattern. This zone implements the “Rural Estate (RE-1)” future land use designation contained in the Comprehensive Plan. . .The district regulations allow for the development of low-density single-family residential uses, generally at densities no greater than one (1) dwelling unit per ten (10) acres.RE-1 Rural Estate Zone District
Euclidean ZoningEach Zone has PurposeCD Downtown CommercialThis zone district is established to provide a wide variety and relatively high intensity of retail and commercial services within Downtown Estes Park to serve both residents and visitors. The CD District implements the “CBD-Commercial Downtown” land use category set forth in the Comprehensive Plan. This district is intended to encourage a predominance of compact and pedestrian-scale retail, service and office uses in the Downtown core. Residential uses, especially employee housing or when mixed with commercial or retail uses, are also encouraged within the district to provide alternative housing choices for the Valley’s workforce.It is the intent that the Downtown maintain its function as the Valley’s focal point of tourist shopping and entertainment activity. This area is also a key economic engine for the Town of Estes Park and the Valley; therefore, future sales-tax generating uses are strongly encouraged.It is also the intent of this district that new development develop in ways integrating and even enhancing the qualities of the streams, rivers, topography and other natural assets of the area.
Euclidean ZoningDevelopment StandardsEstablishes development standards for each zone districtDensitySetbacksMaximum Building HeightMaximum Floor Area RatioMaximum Lot CoverageZoning DistrictMinimum Land Area per Accommodation or Residential Unit (sq. ft. per unit)Minimum Lot Size [7]Minimum Building/Structure Setbacks [4] [8]Max. BldgHeight (ft.) [9]Max.FARMax. Lot Cover-age (%)Area(sq ft)Width(ft.)Front(ft.)Side (ft.)Rear (ft.)AAccommodation Unit =1,800 [1];Residential Units: SF = 9,000;2-Family = 6,750;MF = 5,40040,000 [2] 100 [3]Arterial = 25 [5];All other streets = 1515 [6] 10 [6] 30 N/A 50A-1 10,890 15,000 [2] 50 [3]Arterial = 25 [5];All other streets = 1515 10 30 .20 30CDAccommodation Units Only = 1,800;SF & 2-Family (stand-alone) = 9,000;Dwelling Units (1st Floor) 1 unit per 2,250 square feet of gross land areaDwelling Units (2nd Floor) No minimum gross land area per unit(Ord. 15-03 #3)Accommo-dation uses = 20,000All other uses = n/aSF & 2-Family (stand-alone) = 25;MF (stand-alone) = 100;All other uses = n/aMini-mum = 8 Maxi-mum = 16If lot abuts a residential property = 10;All other cases = 0If lot abuts a residential property = 10;All other cases = 030 2.0 n/aEstes Valley Development CodeDensity and Dimensional StandardsNonresidential Zoning Districts
Euclidean ZoningSeparation of UsesSpecifies permitted uses (e.g. commercial or residentialUse Classification Specific useNonresidential Zoning DistrictsAdditional Regulations (Apply in All Districts Unless Otherwise Stated)“P” = Permitted by Right“S” = Permitted by Special Review“–” = ProhibitedA A-1 CD CO O CH I-1RESIDENTIAL USE CLASSIFICATIONSHousehold LivingSingle-family dwellingPPP–P––•In CD, such use shall not be located on the ground floor of a building having frontage on Elkhorn Avenue•In O, such use shall not be located on the ground floor of a buildingEstes Valley Development CodePermitted Uses Non-Residential Zoning Districts
1stApproach to Zoning:Euclidean Zoning – Overlay Zoning Districts• Overlay zones are lay over other zones• Overlay zone district regulations are based not on the underlying zone or the specific use but on geography or some other factorEstes Valley Special Purpose & Overlay Zoning DistrictsFP Floodplain Overlay ZoneD-DO Downtown Design Overlay ZoneH-DO Highway Corridor Design Overlay ZoneSH Stanley Historic Overlay DistrictStanley Historic Overlay District(A Better Way to Zone, p. 2)
Euclidean Zoning:Planned Unit Developments•1950’s - concern for quality•In theory, someone who wants a discretionary zoning approval from city council should be a little more willing to increase the quality of development •because developers often found that they needed variances for some of their proposed uses or boxes and because planners wanted the bells and whistles of quality, negotiated zoning districts looked like a classic win-win situation•The city could adopt one PUD ordinance authorizing the creation of individualized PUDs•Cities began encouraging their developers to apply for PUDs so that they could negotiate for more quality.•PUDs moved from being the exception for innovative development to a form of zoning used regularly for not-so-innovative projects•Problem: PUDs took a long time to negotiate, to get adopted and to administer.•A PUD was a snapshot of what was acceptable to one developer and one city council on a given date, but that snapshot now became law
Euclidean Zoning:Planned Unit DevelopmentsLocal Example:1977 Stanley Hills PUDLot 1, Stanley Hills PUDSafewayStanley Hills PUD
2ndApproach to Zoning: Performance Zoning•Alternative to Euclidean zoning and PUDs because of the complexity that seems to accompany Euclidean zoning and PUDs•“Why don’t we just prohibit the bad impact and let the developer figure out how to do it? Maybe we don’t need that much distance and rigid size controls. We’ll regulate land to require the performance we want and not try to guess what physical shape that has to take..” •Performance zoners tried to quantify what levels of noise, smoke, emissions, glare, radiation, and other bad impacts were tolerable at the property liens and then wrote zoning provisions to prohibit anything higher•Performance zoning was designed to improve flexibility •Problem was administering the standards once they were adopted•The second problem was that many zoning regulations are not really designed to avoid measurable negative impacts, rather they are designed to make development more predictable
2ndApproach to Zoning:Performance ZoningEstes Valley Performance Standards Include§ 7.9 EXTERIOR LIGHTINGPurpose. The intent of this Section is to focus on the actual physical effects of lighting, as well as the effect that lighting may have on the surrounding neighborhood. . .”Design Standards. . . In no case shall exterior lighting add more than one (1) foot-candle to illumination levels at any point off-site. Glare is difficulty seeing in the presence of bright light such as direct or reflected sunlight or artificial lights used at night. Glare creates direct light trespass on adjoining properties, and can create deep shadows that can conceal intruders or wildlife.
3rdApproach to Zoning:Form-Based Zoning3rddeparture from Euclidean zoning- emerged in the past 25 years•Performance zoning made Euclidean zoning more flexible; form-based zoning was aimed at producing the types of neighborhoods people wanted by focusing more on form and less on permitted use•Emphasized focus on the relationship of the building to the street, to surrounding buildings, and to people as well as cars, and to recognize that the location and design of each building should better reflect its function in the community•Good urban form requires some level of control over the architecture of the buildings themselves – not only individually but in relation to their neighbors•Euclidean zoning is still needed for two reasons:•most form-based tools do no address the full-range of issues that need to be addressed in zoning•not every place in the city is so important to the public health, safety, and welfare that the city wants to spend taxpayer money to create detailed form-based controls that will make the area a memorable “Place.”•No local examples – Estes Valley Does Not Have Form-Based Zoning
3rdApproach to Land Use Regulation:Form Based CodesForm Based CodeFoster predictable built results and a high-quality public realm by using physical form (rather than separation of uses) as the organizing principle for the code. Why Use Them? Form-based codes are drafted to achieve a community vision based on time-tested forms of urbanism. Ultimately, a form-based code is a tool; the quality of development outcomes is dependent on the quality and objectives of the community plan that a code implements. Form-Based Code Institute
4thApproach to Zoning: Euclidean Hybrid ZoningThe result of the four different streams of thought• form-based tools supplementing the existing Euclidean zoning system• more predictable outcomes• assumes that compliance with basic heights, setbacks, parking, and landscaping requirements will create as acceptable public image, given the importance of the location
Code Amendments – Zoning MapEstes Valley Development Code Standards for Rezoning 1. The amendment is necessary to address changes in conditions in the areas affected;2. The development plan, which the proposed amendment to this Code would allow, is compatible and consistent with the policies and intent of the Comprehensive Plan and with existing growth and development patterns in the Estes Valley; and3. The Town, County or other relevant service providers shall have the ability to provide adequate services and facilities that might be required if the application were approved.
Pitfalls to AvoidSpot ZoningEven if a master plan is considered only an advisory document, zoning that does not conform with the plan may be subject to an attack as ‘spot zoning.’Spot zoning is prohibited in Colorado on the theory that a local government cannot act merely to benefit a single landowner, but must act to benefit the general public. The test for determining whether a particular action constitutes spot zoning is whether the action is designed to a relieve a certain piece of property from zoning restrictions in spite of —— rather than in conformance with— the jurisdiction’s comprehensive plan. The risk of spot zoning means that even an advisory master plan cannot be ignored. Planned unit developments are legislatively authorized exceptions to the general prohibition against spot zoning, but they are nevertheless statutorily required to conform to comprehensive plans.” Cited from Colorado Land Planning and Development Law, pp 60-61.
Pitfalls to AvoidSpot ZoningThe Estes Valley Development Code regulations intended to elevate the Estes Valley Comprehensive Plan from advisory to mandatory by requiring rezonings, text amendments, development applications and more to be compatible and consistent with the Comprehensive PlanWhether the comp plan was elevated all the way to mandatory is debatable.If advisory only, best practice is for zoning regulations to conform to the Estes Valley Comprehensive Plan. If we don’t, we making decisions for specific developments and rezoning that stray too far from the communities vision for its future.
Common Challenge to RezoningTakingsRegulatory TakingPartial Taking
Problems with Zoning SystemsMany current zoning systems:Are more complex than they need to beActually prevent many types of development that cities would like to approveDo not provide housing at prices that citizens can affordAdjust poorly to changes circumstances andReflect and encourage poor systems of city governance.Because zoning is so important to the quality of American cities, we really need to make it work better, more efficiently, and more understandableA Better Way to Zone, Don Elliott
Problems with Zoning SystemsLocal Example: Micro-Wind Wind Energy Conversion Systems (e.g. Wind Turbines) Code AmendmentAdded Complexity to the Code Almost 4 pages of our zoning code are devoted to wind turbine regulations. Longer than our home occupation and accessory dwelling unit regulations combined.Adjust Poorly to Changing CircumstancesEstablished that would more property would be regulated in the building code and could conflict with building code regulationsOnce in the code unlike to be removed any time soon. No longer a public issue.
Code Amendment: TextPhoto Credit: Draft MagazineBest PracticesAddressed a changing market condition –popularity is craft breweries.Regulations were fairly clear, concise.
Zoning BasicsReference MaterialsA Better Way to Zone, Ten Principals to Create More Livable Cities, Donald L. Elliott, Esq.Book is “. . . Aimed at mature cities – those that include older areas that are ripe for reinvestment and redevelopment . . .”Colorado Land Planning and Development Law, Sixth Edition, Donald L. Elliott, Esq.Zoning 101, A Practical Introduction, 3rdEdition, Carl & Marilyn StephaniLand Use In a Nut Shell, John R. Nolon and Patricia E. SalkinUnderstanding Spot Zoning, Daniel Shapiro, Esq
Zoning BasicsQ&AWrap Up
Zoning BasicsAccommodationsEstes Park is unique – two accommodations districts – example of how can draft a zoning regulations to fit a communities unique needs.Accommodations Zoning DistrictsA Accommodations/Highway Corridor Zoning District. This district implements the “A-Accommodations” land use category set forth in the Comprehensive Plan. It applies primarily in highway-oriented commercial areas of the Estes Valley, and allows a wide variety of accommodation uses, including relatively higher-intensity accommodations such as multi-story hotels and motels. A variety of related tourist-serving retail and commercial uses, such as restaurants, bars and gift shops, will be permitted, but only as accessory uses to a principal accommodations use and only if such supporting uses are located inside the same structure as the principal use. Stand-alone commercial or retail uses will not be permitted in this accommodations district; instead, such uses may be developed in the other commercial zones.A-1 Accommodations/Low-Intensity Zoning District. This district implements the “A-1-Accommodations” land use category set forth in the Comprehensive Plan. This district provides for low-intensity and small-scale residential uses, low-intensity accommodations and very limited accessory uses located along highway and roadway corridors characterized by low-intensity residential and lodging uses, including resort lodges, cabins and condominium developments. Aside from these limited residential and accommodation uses, no new commercial development shall be permitted in this district. New uses, including new accommodations, shall be developed consistent in intensity, bulk and design with the low-scale, residential character of this district.Accommodations Use
Zoning BasicsZone District Specific PurposesR Zone DistrictThis district is established to preserve and encourage relatively high-density single-family residential uses primarily within the Town of Estes Park. This zone implements the “Residential (R)” future land use designation contained in the Comprehensive Plan. District regulations are intended to continue the predominant single-family detached use, while providing for additional open space and trail/bikeway linkages to Downtown Estes Park and existing systems whenever possible. District regulations permit single-family residential uses at densities of four (4) dwelling units per acre, with a minimum lot area of one-quarter (¼) acre.
Zoning BasicsZone District Specific PurposesR-1 Single-Family Residential Zoning District. This district is established to provide opportunities for attainable single-family residential development within the Town of Estes Park and in close proximity to services. Accordingly, district regulations will allow densities of up to eight (8) dwelling units per acre, with a minimum lot area of five thousand (5,000) square feet, subject to the attainable housing limitations in §11.4.C of this Code.
Zoning BasicsIndustrial Zoning DistrictI-1 Restricted Industrial Zoning District. This zoning district implements the “Restricted Industrial” land use category recommended in the Comprehensive Plan. Permitted uses shall include a relatively wide variety of industrial uses, as reflected in the existing mix of industrial land uses, including several concrete/asphalt plants, propane distributors, construction trade yards and gravel mining and crushing facilities. However, to discourage future conflicts, residential uses shall not be permitted in this zoning district. An important element of development in this industrial zone district shall be compliance with performance standards to protect adjacent uses from adverse impacts of industrial development.Industrial uses along Elm Road.
Zoning BasicsZone District Specific PurposesR-1 Single-Family Residential Zoning District. This district is established to provide opportunities for attainable single-family residential development within the Town of Estes Park and in close proximity to services. Accordingly, district regulations will allow densities of up to eight (8) dwelling units per acre, with a minimum lot area of five thousand (5,000) square feet, subject to the attainable housing limitations in §11.4.C of this Code.
Zoning BasicsZone District Specific PurposesR-1 Single-Family Residential Zoning District. This district is established to provide opportunities for attainable single-family residential development within the Town of Estes Park and in close proximity to services. Accordingly, district regulations will allow densities of up to eight (8) dwelling units per acre, with a minimum lot area of five thousand (5,000) square feet, subject to the attainable housing limitations in §11.4.C of this Code.
3rdApproach to Land Use Regulation:Form Based CodesRandom FormFocus on Building PlacementLand UseFormStreets Largely IgnoredIncludes/Embraces StreetsConventionalForm-BasedLarge Homogenous TractsDiversity in Close Proximately
3rdApproach to Land Use Regulation:Form Based CodesConventionalForm-BasedLittle DetailConsiderable DetailMostly TextHighly IllustratedAbstract ParametersSuccinct Diagrams, Illustrations & Text
3rdApproach to Land Use Regulation:Form Based Codes
3rdApproach to Land Use Regulation:Form Based CodesEssential Components Optional Components Regulating PlanPublic Space StandardsBuilding Form StandardsAdministrationGlossaryBlock StandardsBuilding Type StandardsArchitectural StandardsGreen Building StandardsLandscape Standards
3rdApproach to Land Use Regulation:Form Based CodesRegulating Plan – TransectThe rural-to-urban transect is a common organizing method
3rdApproach to Land Use Regulation:Form Based Codes
3rdApproach to Land Use Regulation:Form Based Codes
FINANCE DEPARTMENT
Memo
To: Honorable Mayor Pinkham
Board of Trustees
Town Administrator Lancaster
From: Steve McFarland, Finance Officer
Date: August 11, 2015
RE: Update on Financial Policies
Objective:
To provide an overview/update on the Finance policies.
Present Situation:
The Town has historically operated financially from a variety of policies, procedures,
administrative directives, and common sense practices. Financial levels of sophistication
have risen in recent years to the point where it is appropriate to develop official financial
policies. This will ensure that the Town will continue to operate with prudence and
consistency, protecting its short and long term financial health.
Financial policies fall into 2 categories for approval. The first group of policies are
operational, and are delegated to staff under policy governance. These include credit
card, conference/training/travel, petty cash, and purchasing. These policies currently
exist, but are being revised to reflect current financial conditions/requirements, as well as
to establish formatting continuity. Revisions are expected to be completed before Labor
Day.
The second group of policies require Board involvement, and are long-term in nature.
Often included in this group are policies regarding fund balances (reserve policies),
revenues, expenditures, budgets, capital asset management, long-term financial
planning, debt, investments (*), auditing, internal controls, risk management, and local
economic development. These policies will take longer to develop as they involve more
philosophical topics, Board discussion, and ultimately Board action. Staff hopes begin
bringing these before the Board in late 2015, and throughout 2016.
Fortunately, one need not “reinvent the wheel” to implement sound financial policies.
Staff has obtained detailed policies from numerous other communities, including Larimer
County, to use as “go-by”s for revising our existing policies. Staff has also purchased the
Government Finance Officers Association’s Financial Policies (Kavanagh, 2012), which
is the industry-standard for financial policy development.
Staff will provide a cursory review of the attached documents at the Study Session.
(*) The Board recently (June 9, 2015) approved the revised Investment Policy.
Attachments:
Attachments: Financial Policy Grid
Sample Policy: Petty Cash (Town)
Sample Policy: Debt (Larimer County)
POLICY*IS THERE A CURRENT POLICY?DELEGATED TO STAFF UNDER POLICY GOVERNANCEBOARD REVIEW NEEDEDCOMPLETION TARGET DATECOMMENTConference/Training/Travel YES X Labor Day 1st reviewCredit Card YES X Labor Day 2nd reviewPetty Cash YES X Labor Day 2nd reviewPurchasing YES X X Labor Day challenge: make compliant with various Federal requirementsUtility Billing YES X X Late 2015 1st reviewRed Flag Policy YES X complete to be discontinued (example of obsolete policy)General Fund Reserve PARTIAL X late 2015/2016 No written policy. Corporate culture: Historic 35%; reduced to 25% post‐flood.Reserve Policies in Other Funds PARTIAL X late 2015/2016 Referenced in Budget book. Some Special Revenue Funds 3%. Utility Funds bound by Loan covenants.Revenue NO X late 2015/2016 Goals, non‐recurring revs, new revs, estimates, earmarking, user fees, property taxes, grants.Expenditure NO X late 2015/2016 Funding operations, personnel compensation, non‐current liabilities, efficiency, outsourcing.Operating BudgetNO X late 2015/2016 Features, special situations, process, control system, amendmentsCapital Asset ManagementPARTIAL X late 2015/2016 Various iterations of CAM exist, but not in policy form. Process has begun for formal policy/program.late 2015/2016 Improvement planning, budgeting, project management, asset maintenanceLong‐term Financial Planning NO X late 2015/2016 Prepare long‐term plan that safeguards bond‐ratings, solvency, etc.Debt NO X late 2015/2016 Restrictions on debt issuance, limitations, structuring process, issuance process, management processInvestment YES X late 2015/2016 Revised/approved at Board meeting, June 9, 2015Accounting, Auditing, ReportingPARTIAL X late 2015/2016 Audit Committee, Accounting (write‐off thresholds, capitalization criteria, banking), internal/external reportingInternal Control, Risk ManagementNO X late 2015/2016 RM: protection of assets, continuity of service. IC: operations, reporting, complianceLocal Economic Development NO X late 2015/2016 Scope, goals, project eligibility criteria, evaluation, standards*Much data taken from GFOA's Financial Policies (Kavanagh, 2012)TOWN OF ESTES PARK ‐ FINANCE POLICIES GRIDAPPROVAL PROCESS
Document Title Draft 1 8/7/15
Revisions: 0 Town of Estes Park, Finance Page 1 of 3
Effective Period: xxx
Review Schedule: xxx
Effective Date: xxx
References: xxx
FINANCE
6XX
Petty Cash Policy
1. PURPOSE
The Town Petty Cash policy sets forth procedures for petty cash use.
2. POLICY
The Town of Estes Park (Town) recognizes that in some instances, minor purchases
occur that require reimbursements. Petty cash is often the most convenient method of
funding these types of transactions.
3. PROCEDURE
A. The primary petty cash drawer is located in Finance. The drawer is balanced to
$1,000. This drawer also serves as the main cash drawer for receiving utility and
other miscellaneous payments as are collected by the Town on a daily basis.
B. Other petty cash drawers may exist as designated by Finance. However, these
drawers exist primarily for the purpose of making change, gathering revenues, etc.,
and are not for reimbursement purposes. Reimbursements are handled through
the main petty cash drawer (in Finance).
C. Petty cash drawer(s) are replenished weekly through appropriate check runs.
D. USAGE
a. A petty cash reimbursement form must be completed, detailing the reason
for reimbursement, amount, and appropriate account number (for the
accounting system). The reimbursement form must be signed by the
employee and employee’s supervisor. Reimbursements for Department
Heads must be approved by the Town Administrator.
b. Detailed receipts must be attached to the reimbursement request
(exception: requests for mileage reimbursements). Meal receipts must
itemize and list who ate the meal(s), and the purpose of the meeting.
Document Title Draft 1 8/7/15
Revisions: 0 Town of Estes Park, Finance Page 2 of 3
c. Reimbursement requests in excess of $100 will be reimbursed through the
next check run. The exception for the limit will be if a one day round trip
mileage reimbursement exceeds $100 (see travel policy for further details).
d. The Finance Department reserves the right to deny reimbursement
requests if receipt documentation is incomplete, or if the expenditure is
inappropriate.
E. ADVANCES/IOU SYSTEM
a. It may become necessary to issue petty cash to an employee in advance,
for the purchase of goods or services. In this case, said employee must
sign a petty cash form and provide a receipt for said purchase within 5
business days.
Approved:
_____________________________
Frank Lancaster, Town Administrator
_____________
Date
Document Title Draft 1 8/7/15
Revisions: 0 Town of Estes Park, Finance Page 3 of 3
APPENDIX 1 - FORMS
a. Form 1
TOWN OF ESTES
PARK
PETTY CASH
ATTACH ALL TICKETS TO THIS DEBIT SUP
DEPARTMENT DATE
AMOUNT
Write Amount _______________________
Trip To: ____________________________
Nature of Business: __________________
Received By: _______________________
Approved By: _______________________
ACCOUNT NUMBER
TRANSPORTATION
MEALS
LODGING
FREIGHT
SUPPLIES
OTHER
LARIMER COUNTY POLICIES AND PROCEDURES
FINANCIAL POLICY AND PROCEDURE 320.21D
FINANCIAL POLICY AND PROCEDURE 320.21D
SUBJECT: LARIMER COUNTY DEBT POLICY
DATE: January 3, 2012
EFFECTIVE PERIOD: Until Superseded
REVIEW SCHEDULE: Every three years in December, or as needed
CANCELLATION: Financial Policy and Procedure 320.21C (August 29, 2011)
Financial Policy and Procedure 320.17A (April 28, 1999) - LOCAL
IMPROVEMENT DISTRICT DEBT & ASSESSMENTS
ENCLOSURE: None
REFERENCES:
A. Financial Policy and Procedure 300.1, Purchasing Policy and Procedure
B. Financial Policy and Procedure 320.12, Assignment of Private Activity Bond Allocation
C. Governing Policies Manual; 3.3 – Financial Planning
D. Administrative Policy and Procedure; 351.4 – Records Retention Program
PURPOSE: To establish general philosophies and guidelines for County debt issuance and post-
issuance monitoring.
SCOPE: This Policy and Procedure applies to all debt issued in the County’s name.
RESPONSIBILITY: The Board of County Commissioners has the overall, final responsibility
for issuing debt and monitoring whether the County is in compliance with post‐issuance
requirements (reference C). However, the Board assigns to the Finance Director the primary
operating responsibility for ensuring that this Policy is followed. Finance will consult with other
departments within the County, as well as third-party professionals (e.g., bond or tax counsel),
as necessary.
SPECIFIC REQUIREMENTS: None
REVISION LOCATOR:
1. Reference D (added)
2. Purpose
320.21D, page 2
3. Responsibility
4. Section II, F and G (added)
5. Section V
6. Section VI (added)
POLICY AND PROCEDURE:
I. TYPES OF DEBT - State statute governs the County’s ability to issue debt. The following
chart shows the types of debt the County typically issues, the revenue pledge associated with
each, types of projects typically financed, required approvals, and references to the
applicable state statutes. State statutes (CRS 0-4-196) prohibit the County from pledging its
credit or assuming responsibility for the debt of any individual or any private or public entity.
Debt Type Revenue Pledge Type of
Project
Type of
Approval
Limitations State Statute
Reference
Debt Supported by County Resources
General Obligation Full faith & credit
of County
Any project All Larimer
County voters
Limited to 1.5% of
assessed valuation
and 20-yr maturity.
30-26-302
36-26-301
Certificates of
Participation
(municipal lease)
Annual budget
appropriation.
Any project;
often used for
essential
buildings
Board of
County
Commissioners
Must pledge
specific assets
equal to amount of
debt.
30-11-104
Revenue Bonds Lien on specific
revenue source
(i.e., sales tax)
Projects related
to revenue
source.
All Larimer
County voters
29-2-112
Capital Equipment
Leasing
Annual budget
appropriation.
Equipment Board of
County
Commissioners.
Must pledge
specific assets
equal to amount of
debt.
Conduit Debt
Library District
Bonds
Taxing power of
Library District -
no County pledge
Library
projects.
All voters in
library district
24-90-112.5
Qualified Private
Activity Bonds
Revenue from
private borrower -
no County pledge.
Qualified
projects which
have some
public good, as
defined by IRS
regulations
(low income
housing, for
example)
Board of
County
Commissioners
Limited to annual
private activity
bond allocation
received from
State.
29-3-102
Non-profit Debt Revenue from
non-profit
borrower
Any 501(c) (3)
(non-profit).
Board of
County
Commissioners
29-3-101
Quasi- Conduit Debt
Improvement
District Debt
Property
assessments or mil.
Infrastructure
construction or
improvements
within district
All voters in
district.
30-20-601
320.21D, page 3
II. Debt Supported by County Resources
A. General Concepts - It is the objective of this Policy that (1) the County obtain financing
only when necessary, (2) the process for identifying the timing and amount of debt or
other financing is as efficient as possible, and (3) the most favorable interest and debt
issuance costs be obtained.
1. Bonding should be used only after considering alternative funding sources, such as
project revenues, Federal and State grants, and special assessments. Debt should be
used to complement, and not in lieu of, recurring commitments of annual
appropriations for capital purposes.
2. Bonding should be limited to projects with identified repayment sources, whether
self-generated or dedicated from other sources. Adequate financing feasibility studies
should be performed for each debt issue.
3. Long-term obligations will not be used for operating purposes, and the life of the
obligations will not exceed the useful life of the projects financed or the life of the
revenue stream. The repayment of principal on tax supported debt should not extend
beyond twenty years.
4. Level debt service payments, in which 25% of the debt rolls off in five years and 50%
is retired in 10 years is preferable.
B. Debt Capacity - The County will evaluate the following measures when assessing
capacity to issue debt:
1. County-Wide Debt Capacity
Measure Target
A Minimum Fund balances for all operating funds, and General
fund in particular.
10% minimum
B Direct Debt Burden (all types of County debt divided by full
property valuation)
2% maximum
C Annual debt service as a percent of governmental fund
operating expenditures.
10% - 15% max.
D Payout of principal over next 10 years (principal balance in 10
years divided by current principal balance)
50% or greater
E Debt per capita monitor
F Overall debt burden (County debt + debt of other entities
divided by full property valuation)
monitor
2. Revenue Bonds and other self-supported debt:
a. Pledged coverage for revenue bonds should be sufficient to achieve an underlying
rating in the “A” category, or above. Higher coverage may be necessary if the
revenue stream is volatile or uncertain.
320.21D, page 4
b. Coverage should allow for an internal non-pledged reserve, ranging from a full
year’s debt service to no less than the greater of half of the next year’s debt
service or the next year’s interest. The goal is to build this reserve within three
years after issuance of debt. This requirement may be waived administratively,
particularly if there is an adequate track record for the revenue source.
c. Operating costs should be based on reasonable, conservative estimates that take
into account annual cost increases. Personnel costs should be estimated with a
minimum of 10% increase annually.
d. In some cases, operating and capital perpetuation reserves should be included.
C. Debt Planning and Structuring
1. A cash flow model will be prepared for each major debt project. The model will
identify estimated debt service payments, sources of revenue, estimated operations,
maintenance, and capital replacement costs, and internal non-pledged debt service
reserve for the life of the debt. This model will use conservative estimates of revenue
and expenditures. Where practical, the estimates will be verified against data from
external sources. The Board of County Commissioners will review the model in a
work session prior to authorization of the debt. This model will serve as a budget
guideline over the life of the debt; however it is recognized that future events could
significantly change it.
2. Debt should be structured to provide for either level debt service or level principal.
Deferring the repayment of principal should be avoided except in the select instances
where it would take a period of time before project revenues are sufficient to pay debt
service. Ascending debt service should generally be avoided.
3. The County shall structure all long-term debt with prepayment options except when
alternative structures are more advantageous. The County will consider prepaying or
defeasing portions of outstanding debt when available resources are identified.
4. When the County purchases bond insurance (in a negotiated sale), the present value
of the estimated debt service savings from insurance should be at least equal to or
greater than the insurance premium. The bond insurance company will usually be
chosen based on an estimate of the greatest net present value insurance benefit
(present value of debt service savings less insurance premium).
5. The County will consider using a surety instead of a cash-funded debt service reserve.
6. To preserve flexibility, call provisions at 100% will be incorporated in the structure
whenever feasible.
D. Debt Issuance process
320.21D, page 5
1. The Finance Department will coordinate the issuance of debt with the Board of
County Commissioners, County Attorney, outside advisors (bond counsel,
underwriters, financial advisors), and the manager of the project being funded.
2. The County may issue debt via negotiated or competitive sale. The method selected
by the Finance Director will take into account the size and nature of the offering, as
well as the County's standing in the bond market.
3. Selection of Consultants and Service Providers:
a. Underwriters. The Finance Director will solicit proposals for underwriting
services for debt issued via negotiated sale. The selection of underwriters may be
for an individual or series of financings or a specified period of time. The request
for proposal process will comply with the County's Purchasing Policies and
Procedures (reference A), and will include formation of a review committee to
evaluate responses. The review committee will make a recommendation to the
Board.
The size of an issue will determine the number of members in the underwriting
team and whether more than one senior manager is desirable. The underwriting
team should be balanced with firms having institutional, retail and regional sales
strengths. When deemed appropriate by the Finance Director, a selling group will
also be established to assist the underwriting team in marketing the bonds. The
County must approve the underwriting team bond and fee allocation.
b. Bond Counsel. The County Attorney has the authority to select bond counsel,
provided the firm is listed as a municipal bond attorney in The Bond Buyer's
Municipal Marketplace Directory (the "Red Book"). For repetitive transactions,
such as special assessment debt, the County may elect to solicit proposals for
multiple year contracts. Proposals will be evaluated based on qualifications and
cost.
c. Financial Advisors. If a Financial Advisor is deemed necessary, the Finance
Director will make the selection using the request for proposal process.
d. Trustee/paying agent. The Finance Director will select the trustee/ paying agent.
Selection criteria includes ease of administration, qualifications, and cost.
E. Capital Equipment Leasing. The County will obtain at least three competitive proposals
for any major lease financing. The net present value of competitive bids shall be
compared, taking into account whether payments are in advance or in arrears, and how
frequently payments are made. The purchase price of equipment will be competitively
bid as well as the financing cost, unless it meets “sole source” status as defined in the
Purchasing Policy and Procedure (reference A). The advice of the County's counsel shall
be sought in any leasing arrangement and when Federal tax forms 8038 are prepared to
ensure that all Federal tax laws are fulfilled.
320.21D, page 6
F. Refunding
The County shall consider refunding outstanding bonds if one or more of the following
conditions exist:
1. Present value savings are at least 3% of the par amount of the refunding bonds
2. The bonds to be refunded have restrictive or outdated covenants
3. Restructuring debt is deemed to be desirable.
G. Debt Proceeds
1. Expenditure of Tax-Exempt Debt Proceeds - It is the policy of the County to
expend tax-exempt debt proceeds as promptly and diligently as possible within the
confines of these Policies and Procedures and the Tax Certificate . For these
purposes, it is the County’s policy not to finance projects using the proceeds of tax-
exempt debt for which the County expects that the proceeds will not be fully spent
within 2 years of the date of issue of the debt.
2. Project Funds - Proceeds of the County’s bond issues shall remain segregated in a
separate fund or account. If the use of a trustee is not mandated by the bond
documents, the fund or account may be invested by the Treasurer in accordance with
State Statutes. Investment earnings shall remain in the fund to finance costs of the
project to which such investment earnings relate.
3. Investments - It is the policy of the County to maximize the investment return on all
investments acquired with tax-exempt bond proceeds and to acquire such investments
at fair market value.
a. When funding deposits to advance refunding escrows using tax-exempt debt
proceeds, it is the County’s policy to acquire United States Treasury Securities –
State and Local Government Series (SLGS) or securities purchased on the open
market in accordance with the terms of the University’s bond documents. In the
event the County chooses to fund an advance refunding escrow using securities
purchased on the open market, the County will retain a third-party investment
bidding agent to solicit bids from providers of qualifying securities in accordance
with the limitations described in the “3-bid” safeharbors set forth in Treasury
Regulations Section 1.148-5(d)(6).
b. The County currently does not engage in interest rate hedges. Should it do so in
the future, this section of the policy will be developed.
III. Conduit Debt
A. General concepts
1. Conduit Debt is issued in the County’s name, but the resources for repayment come
from individuals or entities that are not part of Larimer County government. Entities
320.21D, page 7
seek conduit debt because of the County’s ability to issue the debt at favorable tax-
exempt rates.
2. The County assumes no responsibility for conduit debt repayment. Article XI of the
State Constitution prohibits the County from guaranteeing or otherwise becoming
responsible for the debt of any person, company, or corporation, public or private, in
or out of the state.
3. Issuing and monitoring conduit debt uses County resources, particularly those of the
County Attorney, Finance and the Board of County Commissioners. In addition, the
debt may reflect upon the County’s credit rating. Therefore, it is the County’s
position that it will issue conduit debt only if the project serves a clear and pressing
community purpose and is in keeping with the goals and priorities of the Board. Staff
will make all reasonable efforts to ensure that the debt is of high quality and will not
negatively reflect upon the reputation of the County in the bond market.
4. Outstanding conduit debt is reported annually in the notes to the County’s financial
statements, as required by generally accepted accounting principals.
B. Qualified Private Activity Bonds
Private Activity Bonds are issued in the County’s name on behalf of a private entity.
Facilities financed with the bond proceeds are owned and operated by non-governmental
entities. Private activity bond projects must meet IRS qualifications (IRS sections 141
through 150) and fit within the County's annual private activity bond allocation
(reference B). Debt repayment is the responsibility of the private entity. Because the
County’s name is on the debt, the County takes reasonable efforts to ensure that the debt
is creditworthy and the project serves a clear and pressing community purpose.
1. General Qualifications
a. The County will issue private activity bonds for projects within the
unincorporated areas of the County. Private entity's seeking private activity
bonds for projects within incorporated areas are encouraged to seek private
activity bonding from the appropriate municipality.
b. All private activity bond issues must be secured by a letter of credit from a triple-
A financial institution or have similar credit enhancement. The credit
enhancement must be irrevocable and remain in place for the length of the bonds.
c. All arbitrage calculations and payments must be performed by the trustee under
the terms of the trust agreement or by any such other arrangement that will insure
compliance. The County must be provided with copies of 8088-T’s filed with the
IRS.
d. In order to comply with government accounting requirements, the private entity
must provide the County with information on the status of the debt annually and
upon any material event.
320.21D, page 8
e. The bond documents must indemnify the county against IRS assessments and
legal fees arising from the financing.
f. The issuer’s agent will be responsible for all continuing disclosure requirements.
2. Application / Modification Fees - The following fees and charges are paid by
private activity bond applicants:
a. A $2,500 non-refundable fee at time of application.
b. The cost of a review of the financing by an independent fiscal agent (to be
selected by the County).
c. Legal fees for review of the issuing documents by the County attorney.
d. Issuance fee equal to the greater of: 1) .25% of the par amount of the debt, or 2)
$5,000. The fee is capped at $25,000.
e. Any other direct cost incurred by the County related to the financing.
The same fees apply to any amendment or modification to the original transaction
that requires official action by the Board of County Commissioners.
3. Private activity bond application
Private activity bond applications should be made to the Board of County
Commissioners and include the following information:
a. General Information:
1) An introduction letter signed by the applicant.
2) Applicant’s name, address, phone, fax and principal contact.
3) Bond counsel firm name, address, phone, fax and principal contact.
4) Amount of allocation being requested.
b. Applicant Background:
1) Operations located in Larimer County, and years of operation.
2) Number of years entity has been doing business in the State of Colorado under
the name stated above.
c. Project Information:
1) Description of assets to be purchased on constructed and expenses incidental
to the project, including costs of the sale of bonds.
2) Explanation of how the project is in keeping with community interests and
County government objectives.
3) Statement from competent bond counsel that the project is eligible for
qualified private activity bonds.
320.21D, page 9
d. Debt Information:
1) Name, address, phones and contact person of the proposed underwriter or
lender.
2) Anticipated timetable for bond transaction.
3) Estimated bond redemption and interest payment schedule.
4) Indicate the type of letter of credit or similar instrument, which will back the
debt.
5) Indicate if the applicant is involved in any litigation, which may affect the
validity or repayment of the bonds.
e. Financial Information:
1) Audited financial statements for the applicant for the last three years and
interim statements for the current year (if not available, please explain).
2) Projection of future revenues, expenditures and debt service coverage for the
next five years supported by a feasibility study.
f. Other:
1) Describe the arrangements that will ensure compliance with arbitrage
reporting and payment requirements.
2) Name, address and contact person for applicant’s local bank.
3) Briefly describe any potential conflicts of interest of personal/ professional/
political relationships between the firm’s officers and/or directors or firm
operations and Larimer County.
4) Any other information which provides evidence of the applicant’s ability to
repay the bonds and complete the project.
C. Nonprofit Debt
Nonprofit debt is similar to private activity bonds, except that the proceeds benefit
projects supported by non-profit entities. In addition, there is no cap on the amount of
non-profit debt the County can incur. The County is not authorized to, and could not
under the law, use general County funds, nor is it in any manner responsible for any
shortages or deficiencies which may occur as the result of the development or the
operation of the project financed with revenue bonds.
1. The project must support an existing County service or fulfill a compelling
community need.
2. The project shall be located in the unincorporated area of the County or provide
services to such areas.
3. All of the general provisions, fees and application requirements for private activity
bonds also apply to nonprofit debt.
D. Library District Bonds
Library Districts in Larimer County are political subdivisions of the State. They have
separately elected boards of directors and separately designated mill levies. However,
320.21D, page 10
State Statutes require that the districts issue debt through the County. The Board will not
charge a fee to the Library District for debt issuance; however, the District is responsible
for County Attorney fees and any other outside charges incurred by the County. The
Library District must agree to compute all arbitrage-related costs and file with the IRS as
appropriate.
IV. Quasi-Conduit Debt
A. Improvement District Debt
The County Engineering Department works with neighborhoods to form public
improvement and local improvement districts (PIDs and LIDs). Either type of district
may issue debt, which is backed by a mill levy (in the case of PIDs) or an assessment (in
the case of LIDs). Private placement of the debt is appropriate if the issue is under $1
million.
1. Self-Sufficiency - Consistent with the concept of improvement assessment
financing, the County will only issue improvement district debt if the amount of
debt is clearly supported by the existing property values within the district. The
County will not issue speculative or "developer district" debt. No County funds,
other than assessments or taxes collected, shall be pledged to repay the debt. If the
project includes work on County maintained roads, the County may contribute a
portion of the project cost. Improvement district debt should have the following
characteristics:
a. The assessed value to debt ratio exceeds 7:1.
b. 80% or more of the district is fully developed. Special risk reduction measures,
such as a mandatory reserve fund, must be in place if debt is issued in
undeveloped districts.
c. The top taxpayer should contribute no more than 4% of the total assessment.
2. Fees and Costs - The principal amount of the debt must be sufficient to cover: 1)
project costs; 2) any interest payments made before first assessments or taxes
become due, and 3) issuance costs and internal charges. These typically include:
a. Engineering administrative fee
b. Bond attorney costs
c. County attorney fees
d. Paying agent & trustee fees
e. Audit costs (calculated by Finance)
f. Underwriter fees
g. Other issuance costs, such as printing, postage and legal advertising
h. On-going disclosure and arbitrage compliance costs, if necessary
320.21D, page 11
3. Bond Counsel - The County will retain external bond counsel for all improvement
district debt issues. All debt will include a written opinion by bond by bond counsel
affirming that the County is authorized to issue the debt, stating that the County has
met all State constitutional and statutory requirements necessary for issuance, and
determining the debt's Federal income tax status.
4. Bond Features
a. Due to its low par value, County improvement district debt is typically issued
as fixed rate, non-rated, non-insured debt. If repaid by assessments, the debt is
callable on any interest date.
b. The term of LID debt issues should not extend beyond the useful life of the
improvement being financed. Typical length of debt is 10 to 15 years.
However some projects with a long useful life, such as water and sewer
projects, may extend out to 20 years.
c. If the bonds are callable on any date, the Depository Trust Company (DTC)
will not accept them for book entry. Therefore, the trustee/paying agent will be
responsible for acting as registrar for each bond sold.
5. Bond Sale - The County may use either competitive bidding or negotiation to sell
the bonds. If the negotiated sale method is used, the underwriter should be chosen
through a competitive RFP process. Underwriters will be required to demonstrate
sufficient capitalization and related experience.
6. Investment of Proceeds - Bond proceeds will be held by the County and invested
as appropriate by the County Treasurer.
7. Assessments - If the debt is repaid by assessments, the assessment resolution will
be passed by the Board immediately after the bond sale. The interest rate for
property owners who chose to pay the assessments in installments will be equal to
the bond rate plus 1%. The purpose of the additional percentage provides a
cushion in case of delinquent assessment payments.
8. Dissolution after Debt Repayment - If the district was formed solely for the purpose
of constructing improvements, it will be dissolved and any assessments will be
discontinued after the bonds are paid in full. Each September, the Finance Division
and Treasurer's Office will determine if there are any open improvements districts
which no longer have debt outstanding. If there are, a resolution will be prepared to
dissolve the district. After the resolution is passed by the Board, the Treasurer's
Office will discontinue the assessment and release the property in the district from the
assessment lien by removing all accounts with current outstanding balances from the
assessment roll. The Treasurer's Office will also send a copy of the notice of
dissolution to all the taxpayers involved.
320.21D, page 12
9. Surplus Funds at Dissolution - Any amounts remaining in a district’s debt
service fund after bonds and related fees are fully paid will be distributed as
follows:
a. To another related improvement district within the same boundaries as the
original district, or
b. Transferred to the Surplus and Deficiency fund if no such district exists.
10. Surplus and Deficiency Fund - Pursuant to C.R.S. Section 30-20-619(3)
(reference B), Surplus and Deficiency funds may be expended for the payment of
outstanding bonds for other improvement districts for which a deficiency has
occurred or the redemption of such outstanding bonds in accordance with any
estimated redemption schedule used in connection with the sale of the bonds. The
County may use these monies to supplement debt service shortages in other active
improvement districts, but has not pledged to do so.
11. Release of Property Prior to Dissolution of a District - If the full amount of the
assessment on a property has been paid prior to full payment of the bonds, the
Treasurer's Office will issue a release of the special assessment lien for the specific
property in the Larimer County Improvement District upon request only.
V. Post-Issuance Requirements
A. I.R.S Compliance Monitoring
This Policy provides a general overview of IRS post-compliance monitoring
requirements. The Tax Certificate for each County bond issue contains detail monitoring
instructions. Compliance in regard to conduit debt will be the responsibility of the entity
receiving the funds, as stated in the agreement between the entity and the County.
1. Arbitrage Yield Restriction and Rebate Requirements - Because of the
complexity of arbitrage rebate regulations and the severity of non-compliance
penalties, the advice of Bond Counsel and other qualified experts will be sought
whenever questions about arbitrage rebate regulations arise. The County will contract
for arbitrage rebate calculation services if it appears likely that the County will have
arbitrage liability on a particular issue. Calculations will be performed no less than
annually. The County shall cash fund the liability on an annual basis. Arbitrage
rebate costs shall be charged as negative interest revenue to the funds in which the
related bond proceeds were originally deposited. The County Attorney will review in
advance any County-staff prepared arbitrage rebate payments and forms sent to the
Internal Revenue Service.
2. Compliance with Private Business Use and Private Loan Restrictions - Section
141 of the I.R.S Code sets forth restrictions on the use of the proceeds of tax exempt
debt. In general, bond proceeds, or anything acquired with the proceeds, cannot be
used to benefit any private entity or individual as long as the bonds remain
outstanding. The County will not knowingly take or permit to be taken any action
320.21D, page 13
which would cause any of its outstanding tax-exempt debt to become “private activity
bonds.” Remedial action rules contained in Treasury Regulations Section 1.141-12,
provide the ability, in certain circumstances, to voluntarily remediate violations of the
private business tests or private loan financing test. Should the need arise, the County
will consult with its bond counsel regarding the applicability of the remedial action
rules to such action and the ability to remediate the impacted tax-exempt debt.
a. In general, an issue of tax-exempt debt will be considered “private activity bonds”
if more than 10% of the proceeds of the debt are used directly or indirectly in any
trade or business carried on by a private business user and more than 10% of the
debt service on the debt is directly or indirectly (1) secured by any interest in
property used or to be used in any trade or business carried on by a private
business user or payments in respect of property used or to be used in any trade or
business carried on by a private business user, or (2) derived from payments made
in respect of property used or to be used in any trade or business carried on by a
private business user.
b. Certain contracts could potentially create a private business use, endangering the
tax exempt character of bonds. Therefore, Finance will review, or forward to
counsel for review, these types of contracts involving a facility for which tax-
exempt debt is outstanding.
Contracts to manage or operate the facility or facility concessions
Naming rights or sponsorship agreements
Contracts to lease or sublease any debt financed property or facility, or portion
of such
Joint venture or partnership agreement
Sale agreements
Any other agreement which transfers benefits or burdens of ownership to a
private user(s).
c. The Finance Director shall adopt practices that are calculated to educate and
inform County Department Heads of those departments which use land, buildings,
facilities, and equipment (“property”) financed with proceeds of tax‐exempt
bonds about this restrictions. Before entering into any special use arrangement
with a nongovernmental person that involves the use of bond financed
property, departments must consult with the Finance Director and
appropriate bond counsel.
3. Record Retention – One purpose of the Record Retention Policy (reference D) is to
enable the County to readily demonstrate to the IRS upon an audit of any tax exempt
bond issue that the Issuer has fully complied with all federal tax requirements that
must be satisfied after the issue date of the bonds so that interest on those bonds
continues to be tax‐exempt under Section 103 of the Code. Records (which may be in
electronic form) will be maintained with respect to each bond issue for as long as
those bonds remain outstanding, plus six years. If bonds are refunded,
320.21D, page 14
documentation for the original bonds must be retained six years after the refunding
bonds are paid off.
The records to be maintained are to include:
a. Basic records and documents relating to the bond issue (including the transcript,
which shall include, among other records, the Tax Certificate, Internal Revenue
Service Form 8038-G or 8038-B, verification report, authorizing resolution(s),
trust indenture, loan agreement, record of public approval, and the opinion of
bond counsel).
b. Documentation of purchases and sales of investments made with bond proceeds
(including amounts treated as “gross proceeds” of bonds under Section 148 of the
Code) and receipts of earnings on those investments). Documentation will
include the: (1) purchase date; (2) purchase price; (3) information establishing fair
market value on the date such investment became allocated to gross proceeds of
the debt; (4) any accrued interest paid; (5) face amount; (6) coupon rate; (7)
periodicity of interest payments; (8) disposition price; (9) any accrued interest
received; (10) disposition date; and (11) broker’s fees paid (if at all) or other
administrative costs.
c. Documentation of expenditures made with bond proceeds (including investment
earnings on bond proceeds) for the governmental purposes of the bonds, such as
for the costs of purchasing, constructing and/or renovating property and facilities.
d. Calculations that demonstrate the rebate amount, if any, that was payable to the
I.R.S. and copies of Form 8038-T and payment filed in a timely manner.
e. Records showing that special use arrangements, if any, affecting bond‐financed
property made by the County with nongovernmental persons.
4. Education ‐ It is the policy of the Issuer that the Finance Director and his or her staff, as
well as the principal operating officials of those departments of the Issuer for which
property is financed with proceeds of tax‐exempt bonds should be provided with
education and training on Federal compliance requirements.
B. Continuing Disclosure
SEC 15c2-12 regulations require the County to annually provide certain financial
information to the MSRB’s EMMA system. The required information is specified in the
continuing disclosure document for each publicly placed bond issue over $1 million
dollars issued after 1995. To the extent possible, the County’s policy is that required
disclosures should be limited to information routinely presented in the county's CAFR. If
additional disclosures are required, they should be added as charts in the statistical
section of the CAFR.
320.21D, page 15
Continuing Disclosure information is posted by the County on the Electronic Municipal
Market Access (EMMA) system is operated by the Municipal Securities Rulemaking
Board (MSRB). For private placement bonds, the County is required to provide specific
financial data to the lender, as specified in the bond transcript.
1. Continuing Disclosure Events – The following events must be reported on the
EMMA system for all outstanding publicly traded debt:
a. Audited CAFR (due by July 30 each year) containing disclosures required by the
Continuing Disclosure agreement;
b. Principal and interest payment delinquencies;
c. Nonpayment-related defaults, if material;
d. Unscheduled draws on debt service reserves reflecting financial difficulties;
e. Unscheduled draws on credit enhancements reflecting financial difficulties;
f. Substitution of credit or liquidity providers, or the failure to perform;
g. Adverse tax opinions, Internal Revenue Service (IRS) notices or material events
affecting the tax-exempt status of the security;
h. Modifications of rights of security holders, if material;
i. Bond calls, if material (typically made by the paying agent);
j. Tender offers;
k. Defeasances, release, substitution, or sale of property security repayment of the
securities, if material;
l. Rating changes (including the ratings of insurers, if any);
m. Bankruptcy, insolvency, receivership or similar event;
n. Merger, consolidation, or acquisition, if material; and appointment of a successor
or additional trustee, or the change of name of a trustee, if material; and
o. Notices of failures to provide annual financial information on or before the dates
specified in the written agreement.
2. Continuing Disclosure Recordkeeping – The County will maintain a record (which
may be electronic) of continuing disclosure filings which it makes.
VI. Other
A. Bank Qualified Issues
If a debt issue is “Bank qualified”, a bank that purchases the debt can take additional
interest deductions. The purpose of this is to encourage banks to invest in small
community debt. At the time of issuance, the County must have a “reasonable
expectation” that it will not exceed the limit set by the IRS (currently $30 million) in the
calendar year. For calculation purposes, debt does not include private activity or non-
profit debt.
320.21D, page 16
Frank Lancaster
County Manager
Carol Block
Financial Services Director
Distribution:
All County Department and Elected Officials
Records Management SOP Manual (original)
CB/vl
August 25, 2015
Discussion of Structure for Audit
Committee
September 8, 2015
Update on the Status of the Events
Center Finances
September 22, 2015
International Property Maintenance
Code (Dangerous Buildings Code) and
Adoption of New International Building
Code Draft Reviews
October 19, 2015
Final Avalanche Economic
Development Strategy Report
November 10, 2015
Discussion of Noise Ordinance
Items Approved – Unscheduled:
(Items are not in order of priority)
Review of Draft Recommendations for
Vacation Rentals. Proposed date
August 25, 2015.
Update on Upcoming Construction
Schedules for Major Projects Through
2018
Fish Hatchery Property Discussion
Local Preference Purchasing Policy
Briefing on Storm Drainage and Flood
Management Issues and Management
Options
Update on Environmental Assessment
NEPA Process Draft Concerning the
Loop
Study Session Items for Board
Consideration:
Discussion of Proposed Changes to
Planning/Building and Flood Permit
Fees. Proposed date September 8,
2015.
Future Town Board Study Session Agenda Items
August 11, 2015