A. PID Administration Expense Fee: In addition to the amounts set forth in Section 11-8-4 B., within ten (10) days following formation of a PID the applicant shall deposit with the PID a nonrefundable administrative expense fee in the amount of five thousand dollars ($5,000.00). The administrative expense fee shall be applied by the PID to the costs and expenses incurred in connection with the formation, review of any feasibility study, election costs, administration, operation and maintenance of the PID or its public improvements. From time to time, upon depletion of the administrative expense fee, the PID may request, and the developer landowner shall promptly deposit with the PID, additional amounts deemed by the City to be necessary for the purposes contemplated in this section. Nothing in this subsection preclude the reimbursement of such expenses from PID taxes, levies, charges or bond proceeds, as permitted by the Act.
B. Administration, Operation And Maintenance Charge: In order to provide for the PID to be self-supporting of its administrative, operation and maintenance expenses, and to finance services in addition to those provided by the City, the City may condition its approval of a PID, on the PID's imposition of up to three dollars ($3.00) per one thousand dollars ($1,000.00) of assessed value ad valorem tax, not as tax or charge of the City, but in accordance with the provisions of section 5-11-23 of the Act, as amended, upon the PID taxable property which is not City-owned infrastructure otherwise maintained by the City or otherwise exempt from taxation; provided, however, that to the extent permitted by law the PID shall be entitled to charge such rates, fees, and charges to property owners as are necessary to address any shortfall in the expense required to operate and maintain the PID improvements, and that such rates, fees and charges shall be established in the development agreement for the PID.
C. General Obligation Bonds: No general obligation bonds shall be issued by a PID, notwithstanding that general obligation bonds may be authorized under the Act.
D. Special Levy Bonds: Special levy bonds may be issued by the PID if contemplated in the General Plan and Feasibility Study. Special levy bonds shall be secured by a first lien (coequal to the lien for general taxes and prior special assessments) on the property benefited in the manner contemplated by section 5-11-20(G) of the Act.
1. Applicants for special levy bonds shall describe in each project feasibility report, the following:
a. The current direct and overlapping tax and assessment burden and special levy on real property to comprise the PID and the full cash value and assessed valuation of that property as shown on the most recent assessment roll;
b. The projected amount and timing of the PID special levy bonds to be issued;
c. The projected market absorption of development on the PID;
d. The projected special levy burden to be placed on the assessed parcels and the anticipated methodology of assessment;
e. An estimate of the applicant's construction cost associated with the public improvements in excess of the estimated PID-funded costs of the project; and
f. The necessity of the applicant and the PID entering into a contribution agreement, which may require a letter of credit or other third-party guarantee of the bonds by the applicant.
2. The value to lien ratio, after the issuance of the bonds and construction of the improvements to be financed by the PID, will be at least three to one (3:1) based on an MAI appraisal.
3. As provided in the Act, at the time the PID is formed, the maximum allowable rate of special levy for residential property shall not cause the total tax and assessment obligation for such property, including projected ad valorem taxes, special levies and special assessments, to exceed 1.95 percent of the anticipated market value of residential property as determined by a then current MAI appraisal. The 1.95 percent shall include all known and authorized, but unissued debt and any other anticipated fees or assessments which may be imposed by the City or special district on a property within the PID, i.e., special assessment districts, including the proposed maximum special levy, except service charges for utilities and refuse.
E. Revenue Bonds:
1. Revenue bonds may be issued by the PID if contemplated in the General Plan and Feasibility Study. Revenue Bonds shall be payable from a PID revenue source.
2. An applicant for revenue bonds shall describe in each project feasibility report, the following:
a. The current fee structure for comparable services or otherwise incurred by persons who would be responsible for paying the proposed rates, fees, and charges;
b. The revenue source from which bonds will be payable. The City reserves the right to require the applicant to produce such independently prepared feasibility studies or reports as it deems necessary to confirm the amount and availability of revenues;
c. The projected market absorption of development within the PID;
d. The projected amount and timing of PID revenue bonds to be issued;
e. The financial impact of the proposed rates, fees, and charges on prospective residents or other users of such rates, fees and charges;
f. An estimate of the applicant's construction cost associated with the public improvements in excess of the estimated PID-funded costs of the project; and
g. The necessity of the applicant and the PID to enter into an as appropriate contribution agreement, which may require a letter of credit or other third-party guarantee of the bonds by the applicant.
F. Suitability: The City intends that the PID only have the power to sell the proposed bonds to suitable investors. If the proposed bond issue is not rated (either on its own merits or by the use of appropriate credit enhancement) in one of the three highest investment grade ratings issued by the Standards & Poor's Corporation, Moody's Investors Services, Inc., Fitch Investors Services, Inc. or any other nationally recognized bond-rating agency service, then the bonds must have minimum denominations of one hundred thousand dollars ($100,000.00) and be available for purchase and restricted with respect to sale to “Qualified Institutional Buyers” (as such term is defined in Rule 144A of the Securities and Exchange Commission) or to “accredited investors” (as such term is defined in Rule 501 of Regulation D of the Rules Governing the Limited Offering and Sale Securities without Registration under the Securities Act of 1933). It is the intention of the City to have investor suitability achieved through the rating requirements set forth in the preceding sentence or the establishment of large minimum denominations (e.g., not less than one hundred thousand dollars ($100,000.00)) and, if the City or the PID determines it is appropriate, covenants limiting secondary market sales of PID bonds through registered broker-dealers. Notwithstanding the restrictions pertaining to public sales and private placements of bonds set forth in this section, the restrictions may be modified or relaxed, subject to the requirements of the Act, if other financing structures or features are presented which, in the sole discretion of the Council, provide other means to address investor suitability concerns.
G. Contribution: At the time the PID is formed financial projections must demonstrate that the landowners shall provide over the life of the project at least twenty-five cents ($0.25) in infrastructure or community improvement (which may include, for example, dry utilities and other improvements for the benefit of the property owners within the PID, irrespective of whether such improvements are publicly or privately owned) for each one dollar ($1.00) of debt to be issued by a PID to finance public infrastructure purposes, except as otherwise determined by the City in its discretion. The City, in its discretion, may condition approval of PID formation on additional financing requirements, including, without limitation, the deposit of cash, or letter of credit (or similar credit facility) as security for completion of the infrastructure development. If agreed to by the City or PID board, as applicable, in the discretion of the City or PID board, infrastructure and community improvement constructed or acquired by the applicant prior to, contemporaneously with or subsequent to the formation of the PID may be included in calculating the applicants compliance with this subsection; provided, that no improvements which have not already been constructed or acquired shall be included in that calculation unless the completion of the improvements is guaranteed or secured by an appropriate completion bond, cash deposit or other security acceptable to the City or PID board, as applicable.
H. Debt Service Reserve Funds: If allowed by law (including any applicable federal laws relating to the tax-exempt status of the bonds), bond issues may include a debt service reserve fund in an amount acceptable to the PID board.
I. Environment Site Assessments: Unless otherwise provided to the City pursuant to the other requirements prior to PID financing and acquisition by the PID or City, the PID and City will require an independent environmental report or assessment of any real property which will be dedicated to or otherwise owned, leased or operated by the City or the PID and a proposed form or indemnity agreement with respect to all environmental law liability.
J. Refinancing And Refunding Bonds: Refinancing and refunding of bonds issued on behalf of a PID will be considered utilizing the same criteria set forth in this section and shall be subject to the review and approval of the Council or its designee. Refinancing and refunding will be expected to either:
1. Generate interest rate or net present value savings;
2. Restructure payment of principal;
3. Reimburse the applicant for actual costs expended for public improvements contemplated to be part of the proposed project; or
4. Eliminate burdensome covenants.
K. Cost Of Change: Applicants shall be responsible for all additional costs and expenses incurred in any special levy or property tax modifications resulting from changes to the development not anticipated in the application. (Ord. 2020-1, 3-17-2020)