HomeMy WebLinkAboutCouncil Presentation 04-23-2019 Policy Guidelines and Procedures for CFD
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 1
Amended 11/5/04 Resolution No. 2004-161
TOWN OF MARANA, ARIZONA
POLICY GUIDELINES AND APPLICATION PROCEDURES
FOR THE ESTABLISHMENT OF
COMMUNITY FACILITIES DISTRICTS*
In order to secure for the Town of Marana, Arizona (the “Town”) the benefits of the
Community Facilities Act† (the “Act”) enacted by the Arizona Legislature in 1988 and to promote
the best interests of the Town, the following CFD Policy Guidelines and Application Procedures
(these “CFD Policy Guidelines”) have been adopted by the Town Council.
CommunityA community facilities districts (the district (“CFD”) provides a funding
mechanism to finance construction, operation, and maintenance of public infrastructure within the
boundaries of the CFD, and to better enable the Town to provide municipal services within the
boundaries of the CFD. The Town Council recognizes the ability of the CFD to permit the
construction of infrastructure that might otherwise not be constructed. It is forFor these reasons
that, the Town Council has established these CFD Policy Guidelines and Application Procedures.
Considering that the establishment of a CFD is the legal equivalent of the establishment of
an entirely new municipal entity within the boundaries of the Town, the Town Council believes
that the formation of the CFD should be entered into carefully, to ensure its lasting success.
ARTICLE 1.
General Policies
ARTICLE 1. GENERAL POLICIES
1.1. CFDs should be utilized primarily in connection with the financing of major infrastructure for
development of residential projects, master planned communities or projects which include
resort hotels or substantial commercial development.
1.2. Priority should be given to CFDs that provide an enhanced level of public infrastructure
amenities and/or municipal services. CFD financing will not be provided for public
infrastructure improvements which are normally expected as part of a development. Public
Iimprovements financed by a CFD should be in conformance with the Town’s General Plan in
order to encourage orderly growth and development.
1.3. All costs incurred by the Town and the CFD in connection with the CFD application,
formation, and administration, and all operation expenses appurtenant theretoto the CFD, will
be paid by the applicant/landownerdeveloper/(the “Applicant”) through advance payments as
provided herein. in these CFD Policy Guidelines. Payment shall include payment for services
rendered by Town and CFD staff as well as services rendered by outside consultants who may
be retained by the Town or the CFD, including but not limited to bond counsel, financial
advisors, engineers, and appraisers. If the Town or CFD uses outside consultants as “staff,”
such as attorneys or engineers, those consultants will also be paid their customary rate for
services. If authorized by the CFD bBoard, exercising its sole discretion, all or part of such
* Adopted by Marana Resolution No. 97-42 (5/21/1997); amended by Marana Resolution No. 2004-161 (11/5/04) and Marana
Resolution No. 2019-XXX (XX/XX/2019).
† Arizona Revised Statutes section (A.R.S. §) 48-701 et. seq., as amended.
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 2
Amended 11/5/04 Resolution No. 2004-161
costs may be paid by a CFD tax levy or reimbursed to the developer/landownerApplicant from
a CFD tax levy, CFD assessment, CFD revenues, or CFD bond proceeds provided, so long as
such reimbursement is in conformance with federal law, state law, and these guidelinesCFD
Policy Guidelines. 1.1.
1.4. The Town will encourage an area to be governed by as few CFDs as possible, and a preference
will be given to one master CFD. This policy isThese CFD Policy Guidelines are adopted to
provide ease of administration and the largest tax/revenue base possible. The decision to form
a CFD shall be a decision of the Town Council exercised in its sole and absolute discretion.
1.5. Unless otherwise agreed to by the Town, thea CFD formed after 2018 will be governed by a
board of directors comprised of the members of the Town Council, ex officio, with two
additional members designated by the owner of the largest amount of privately-owned acreage
in the proposed district and who are appointed by Town Council. The day-to-day
responsibilities of the CFD will be performed by Town staff or, pursuant to a contract, by
outside personnel or by the Town staff. For any CFD over 600 acres, the Town Council, in its
sole discretion, may provide that the CFD board may be totally comprised of persons other
than members of the Town Council, if adequate safeguards and controls are in place, as may be
acceptable to the Town, to ensure the soundness of any CFD financing program, as well as the
adequacy and legality of the legal proceedings and disclosure documents in connection with
any financing. Advisory committees may, at. At the sole option of the CFD board,Board,
advisory committees may be utilized.
1.6. Unless otherwise agreed to by the Town, the CFD must be self-supporting from the standpoints
of financing, operations, and maintenance and no. No Town funds will be used for CFD
purposes. Notwithstanding anything contained hereinin these CFD Policy Guidelines, neither
the property, the full faith and credit, nor the taxing power of the Town shall be pledged to the
payment of any CFD obligation or indebtedness.
1.7. The CFD bBoard will determine, in its sole and absolute discretion, the amount, timing, and
form of financing to be used by a CFD after review of the project feasibility report, Member
Appraisal Institute (“MAI”) property appraisals (utilizing the appropriate appraisal
methodology) acceptable to the Town or CFD Board, and other required pertinent information.
1.8. A key tenant of this policytenet of these CFD Policy Guidelines is the financial protection of
property ownershomeowners within a CFD. As such, this policy includesthese CFD Policy
Guidelines include provisions that attempt to protect homeowners from financial liability in
excess of targeted tax rates and assessments. Similarly, this policy includesthese CFD Policy
Guidelines include provisions designed to meet all financial obligations and/or legal exposures
of the CFD.
1.9. The CFD will construct all public improvements utilizing public bidding procedures in
accordance with applicable laws, rules, and regulations and as would be applied by the Town
in a construction project for the Town. In general, this requires compliance with Arizona
Revised Statutes Title 34 and the Town of Marana Procurement Code (Town Code Chapter
3-4).
1.10. The CFD will not use bond proceeds or other CFD funds to purchase public rights-of-way or
other real property to be used for public infrastructure improvements, if such real property
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 3
Amended 11/5/04 Resolution No. 2004-161
would be required to be dedicated and conveyed to the Town by the
developer/landownerApplicant upon development of the developer’s/landowner’sits property.
1.11. CFD bond proceeds will not be used for public infrastructure improvements which are
included within a calculation of anin an infrastructure improvements plan adopted in support
of a development impact fee.
1.12. 1.11. Unless otherwise agreed to by the Town, all costs of administration and operation of the
CFD and the operation and maintenance of public infrastructure in the CFD shall be the
responsibility of the CFD, the developer/landownerApplicant, applicable homeowners’
associations, or any combination of the foregoing, as may be acceptable to the Town and the
CFD Board.
1.13. 1.12. The Town retains the right to select all consultants necessary for the evaluation of any
application and the proceedings for the formation of a CFD and the issuance of CFD bonds
therefore, including, but. This includes but is not limited to, any special tax consultant, bond
counsel, underwriter, appraiser, engineer and, or any other consultants deemed necessary by
the Town or the CFD Board.
1.14. 1.13. These CFD Policy Guidelines and Application Procedures may be modified from time to
time by the Town. Any applicant will be given the opportunity to propose alternative
approaches to those provided herein, with the understanding that concerns of the Town must be
adequately addressed before the staff of the Town will recommend approval of a CFD by the
Town Council.
ARTICLE 2.
ARTICLE 2. CONTENT OF APPLICATION
2.1. Content ofCompleted ApplicationA. Pursuant to A.R.S. § 48-702(B), the Applicant shall
submit a completed application for purposes of ARS § 48-702(B), for the formation of a CFD
(the "“Completed Application"), must be submitted prior to any determination that a CFD will
be formed. The Completed Application shall be submitted”) to the Town’s Finance
Department by the appropriate landowner/developer (the "Applicant")before the Town will
consider forming a CFD. The Completed Application shall, at a minimum, contain the
following information set forth below and must be organized in the manner described below:
in this Article.
2.2. Petition in Favor of Formation2.1. A. The Completed Application shall include a
petition signed by the owners of at least twenty-five percent25% of the land area proposed to
be included in the districtCFD. The petition must include a list of all parcels in the proposed
CFD along with the parcel number, owner names, situs address and lot size (parcel square
footage or acreage) for each individual parcel.
2.3. Applicant Information. The Completed Application shall include:
a. 2.2. A description of the aApplicant, including theits corporate and organizational structure
of the entity or individual making the application, and the names of all officers and
corporate directors directly related to or associated with the proposed districtof the
Applicant.
b. 2.3. The name, address and, telephone number, and email address of the Applicant’s
primary contact for the applicant, the.
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 4
Amended 11/5/04 Resolution No. 2004-161
c. The names, addresses, telephone numbers, and email addresses of any legal
representatives, engineers, architects, financial consultants or other consultants of the
Applicant or significantly involved in the application.
d. 2.4. A general description of the aApplicant'’s experience with similar types of
developments.
e. 2.5. Evidence demonstrating the aApplicant’s ability and capacity (including financial
statements and supporting information) to undertake the proposed public infrastructure and
the private development.
2.4. Board Member Information2.6. Describe. The Completed Application shall describe
the process for the designation of two additional districtCFD bBoard members, including the
following:
a. Provide the names, addresses, telephone numbers, email addresses, backgrounds and,
qualifications, and other relevant information of the two proposed additional boardCFD
Board members to be designated by the owner of the largest amount of privately owned
acreage in the proposed districtCFD.
b. State the process for the designation of the two additional boardCFD Board members on
completion of the development of all property in the CFD.
c. Provide documentation evidencing each suchproposed CFD Board member’s
acknowledgment of his or her obligation to comply with Arizona Revised Statutes Title 38
(“Public Officers and Employees”), Chapter 3 (“Conduct of Office”), Articles 3.1 and 8,
ARS and containing(“Public Meetings and Proceedings”) and 8 (“Conflict of Interest of
Officers and Employees”).
d. Provide unqualified “hold harmless” and indemnity guarantees forto the Town, the CFD,
and officers, agents and employees thereofof the Town and the CFD for the actions and
conduct of each proposed CFD Board member.
2.5. Proposed CFD . The Completed Application shall include:
a. 2.7. A description of how the proposed CFD meets the existing development objectives of
the Town, including the degree to which the CFD is consistent with the goals of the Town’s
General Plan for promoting orderly development, consistent with growth management
policies and zoning requirements and the degree to which the land use plan for the CFD is
consistent with the Town’s General Plan Map for the area.
b. 2.8. A general description of the proposed CFD including awith an analysis of the
appropriateness of the CFD boundaries.
c. A legal description of itsthe proposed CFD boundaries and identitywith an accompanying
depiction.
d. A current title report showing the names and addresses of all persons or entities with any
interest in the property, and names and addresses of any qualified electors locatedland
within the proposed CFD boundaries. A current title report and a
e. A certificate from the respective county elections department shall be submitted as
evidence of(s) showing the names of persons with any interest in the land and addresses of
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 5
Amended 11/5/04 Resolution No. 2004-161
all qualified electors respectively. The description must contain an analysis of the
appropriateness of thein the proposed CFD boundaries.
2.6. Project Description and Proposed Improvements. The Completed Application shall
include:
a. 2.9. A general plan setting out a detailed description of the types of public infrastructure to
be financed by the CFD, including the estimated construction or acquisition costs of the
public infrastructure and the annual operation and maintenance costs of the public
infrastructure and the governmental approvals that will be required for both the public and
private improvements to be constructed and operated within the proposed CFD.
b. 2.10. A proposed project schedule for commencement and completion of (a) the public
infrastructure and (b) the private development within the proposed CFD.
2.7. Financing Plan2.11. A. The Completed Application shall include a detailed description
of the financing plan that includes the sources and uses of monies to be used to cover the
capital, operating, and maintenance costs for the public infrastructure within the proposed
CFD, including both capital and operating/maintenance costs. This description should include
the proposed types and amounts of tax-exempt/taxable bonds requested to be considered for
the public improvements.
2.8. 2.12. AFinancial Feasibility Study. The Completed Application shall include a financial
feasibility study, covering the period of time until the last proposed bond of the CFD will be
paid, for the entire project being developed on the property in the proposed CFD, including
both the public infrastructure and the private development. This shouldThe financial
feasibility study shall include:
a. An analysis of how the proposed debt financing, operation and maintenance costs, user
charges and other CFD costs will be allocated and what will be the impact to the ultimate
end users of the property, specifically projected property taxes and property tax rates,
special assessments, fees, charges and any other costs that would be borne by property in
the CFD. The analysis shoualdl also address the impact these costs will have on the
marketability of the private development and a comparison of proposed tax rates or charges
within the proposed CFD contrasted with the tax rates and charges within the proposed
CFD contrasted to the tax rates and changes in adjoining and similar areas outside of the
proposed CFD.
b. A financing plan for the private development in the CFD.
c. A market absorption study for the private development in the CFD, prepared by an
independent consultant acceptable to the Town. Such study, which shall include estimates
of the revenue to be generated by the development and, an estimate of the ability of the
market to absorb the development as well as, and a market absorption calendar for the
private development.
d. 2.13. Value-to-Lien Ratio AnalysisA value-to-lien ratio analysis based on the requirements
of this policy,these CFD Policy Guidelines. The value portion of the analysis shall be the
estimated value of the property within the development, including the acquisition and/or
construction of the public improvements within the CFD, the application shall include an
analysis of the value-to-lien ratios ofCFD as improved by the already-completed CFD
public improvements acquired and/or constructed. The lien portion of the analysis shall be
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 6
Amended 11/5/04 Resolution No. 2004-161
the sum of the principal amount of any outstanding CFD public financing and the proposed
public financing.
e. 2.14. A description and estimated amounts of the proposed equity contribution from the
applicant/landownerApplicant and a calendar showing the timing of such equity
contribution.
2.9. Insurance. The Completed Application shall provide an explanation of how insurance
coverage shall be provided by the Applicant and how assurances will be provided that
premiums and deductibles will be paid in the future. The Applicant is responsible for the cost
of insurance to cover all actions and activities taken by the Board of Directors and officers of
the CFD relating to the CFD formation, financing, administrative actions or other related
activities of the types, in amounts and with deductibles determined by the Risk Manager of the
Town. Insurance must include “per occurrence coverage” including a “securities” rider if
bonds are to be sold.
2.10. Indemnification. The Completed Application shall indicate how indemnification as required
by the Development Agreement will be provided by the Applicant to the Town and the CFD
and their agents, officers, and employees for, from, and against any and all liabilities, claims,
costs and expenses, including attorneys’ fees, incurred in any challenge or proceeding to the
formation, operation, administration of the CFD, the offer and sale of CFD bonds, the levying
by the CFD of any tax, assessment or charge and the operation and maintenance of public
infrastructure financed or owned by the CFD. The Completed Application shall include
financial statements and other supporting information for the entity providing the
indemnification and shall provide appropriate collateral to cover the indemnity.
2.11. Other Information. The Completed Application shall include:
a. 2.15. A detailed description of the proposed marketing plan to be used by the Applicant
and/or home builders to market property within the CFD. This information may include,
but is not limited to, descriptions and cost estimates of public infrastructure improvements
to be financed by the CFD and a comparison of the proposed CFD to similar CFDs in the
area.
b. 2.16. A homebuyer disclosure form which will be used to explain the existence of the CFD,
purposewith a signed acknowledgement of receipt by the initial homebuyer of each lot in
the CFD, in which the Applicant or home builder explains to prospective CFD landowners
all of the following:
i. The existence of the CFD.
ii. The purposes for which the CFD was formed,.
iii. The CFD’s expected and possible secondary property tax rate,.
iv. The estimated annual secondary tax amount that is based on applying thatthe CFD’s
expected and possible secondary property tax rate to a representative residential
property value, assessment.
v. Assessment and other financial burdens of the CFD to prospective CFD landowners.
Such forms shall have provisions for the signed acknowledgement of receipt of such
disclosure forms. The Applicant should also describe the process.
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 7
Amended 11/5/04 Resolution No. 2004-161
c. The Applicant’s description of the signing and record-keeping processes to be used for
retaining all signed homeowner CFD acknowledgement disclosure statements. Upon each
sale of property in the CFD, the developer/landownerhomebuyer disclosure forms, which
shall include a requirement that the Applicant or home builder shall file with the Town a
receipt that acknowledges the purchaser’s receipt of thecopy of each signed homebuyer
disclosure form within 30 days of sale. 1.1.
d. 2.17. An operating plan for the CFD, i.e.,explaining what functions the CFD wouldwill
provide and how the operation and maintenance of the infrastructure and all other services
in the CFD wouldwill be provided.
e. 2.18. The District Development and Financing Participation Agreement between the Town
and the Applicant (the “Development Agreement”) in substantially final form, including
all terms and provisions to be approved by the Town if formation of a CFD is approved.
The Development Agreement must include matters required by the Act such as Section
48-708(D), ARS, including without limitation the subdivision public report requirements
at A.R.S. § 48-708 (D), and must have been fully negotiated by the Applicant and Town
staff, with agreement by both parties, and in a substantially final form.
2.19. Insurance and Indemnification. The Applicant is responsible for the cost of insurance to
cover all actions and activities taken by the Board of Directors and officers of the CFD
relating to the CFD formation, financing, administrative actions or other related activities
of the types, in amounts and with deductibles determined by the Risk Manager of the
Town. The completed application shall provide an explanation of how such insurance
coverage shall be provided by the Applicant and how assurances will be provided that
premiums and deductibles will be paid in the future. Insurance must include “per
occurrence coverage” including a “securities” rider if bonds are to be sold.
Separately, the completed application must indicate how indemnification outlined in the
Development Agreement will be provided for the Town and the CFD and their agents,
officers, and employees for, from and against any and all liabilities, claims, costs and
expenses, including attorneys’ fees, incurred in any challenge or proceeding to the
formation, operation, administration of the CFD, the offer and sale of CFD bonds, the
levying by the CFD of any tax, assessment or charge and the operation and maintenance of
public infrastructure financed or owned by the CFD, the entity providing the
indemnification (including financial statements and other supporting information for such
entity), appropriate collateral arrangements, etc.
ARTICLE 3.
Application Procedures
ARTICLE 3. APPLICATION PROCEDURES
3.1. Five (5) paper copiesThe original and one (1) electronic copy of the application for the
formation of a CFD shall be submitted to the Finance Director of the Town who will
coordinate an interdepartmental analysis of each application.
3.2. At the time of submission of the application, the applicant shall pay an application fee of
$15,000.00.
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 8
Amended 11/5/04 Resolution No. 2004-161
3.3. Prior to submission of a cCompleted aApplication, and at the request of a potential aApplicant,
the Finance Director may arrange a pre-application conference with the potential aApplicant,
appropriate Town staff, and outside professionals and consultants, for the purpose of
discussing the possible submission of a cCompleted aApplication for conformity with these
Town application policies and proceduresCFD Policy Guidelines.
3.4. If,The Applicant shall provide any and all supplemental information requested by Town staff
at or following the pre-application conference or any other time during the application process
Town staff requests additional information, the applicant shall provide any and all
supplemental information requested.
3.5. The review, analysis and consideration of a cCompleted aApplication will include:
a. A comprehensive review of the completed application to determine whether the completed
application is consistent with thisthese CFD Policy Guidelines, identification of missing or
incomplete information and identification and discussion of any concerns with the
Applicant. This will include, but will not be limited to, examining the project feasibility,
analysis of land ownership interests, financing analyses, risk analysis and evaluation of
community benefits.
b. Under the direction of the Finance Director, a report may be prepared including
recommendations related to the proposed CFD and an analysis of the impact of the
formation of the proposed CFD and its effects on the Town. AdditionalThe report may
recommend that additional requirements may be placed on the Applicant, on any related
developer/, landowner, or builder, and/or on the proposed CFD itself. This review will
include the preliminary approval of the form, terms and provisions of the “substantially
complete” Development and Financing Participation Agreement necessary for formation
of a district. A completed application must be consistent with this Policy and must contain
all the information required in this Policy.CFD.
3.6. c. On presentation of a completed applicationWithin 60 days after the Applicant’s submission
of a Completed Application, the Town Council within sixty (60) days after submission shall
hold a public hearing to consider the cCompleted aApplication. A resolution declaring the
intent to form a CFD may be considered by Town Council immediately following the public
hearing. If the Town Council does not adopt the resolution, it will provide a written basis for
not adopting the resolution and shall identify the specific changes needed for the completed
application to be approved.
3.7. 3.6. If an application includes a petition for formation that is signed by owners of all of the land
in the proposed CFD, as well as meeting and meets all the requirements of Article 2 in form
satisfactory to the Town, the Town may declare the districtCFD formed without posting,
publication, mailing, notice and public hearings or landowner election. Otherwise, the
alternative provisions of the Act must be followed.
3.8. 3.7. If the Town Council approves the formation of a CFD and there are, any existing
agreements with developers/landownersthe Applicant for the provision of infrastructure
proposed to be furnished by the CFD then those agreements will be deemed amended to reflect
the agreements and conditions pertaining to the CFD. The amendments will reflect that such
infrastructure improvements will be provided (including by acquisition) by either the
developer/landownerApplicant or the CFD.
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
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Amended 11/5/04 Resolution No. 2004-161
3.9. 3.8. If the Town Council approves an application for formation of a CFD, the applying
developer/landownerApplicant and theTown staff of the Town shall coordinate a schedule of
events for formation of the CFD and shall negotiate an appropriate agreement between the
Town and the developer/landownerfinalize negotiation of the Development Agreement, which
shall be entered into prior to or concurrently with formation of the CFD, and which shall
incorporate the requirements of any report, or recommendations of the Town staff relating to
suchthe CFD, the requirements of these policy guidelinesCFD Policy Guidelines, and any
other restrictions, and provisions and agreements required by the Town.
ARTICLE 4.
ARTICLE 4. CFD Operations and Debt Financing OPERATIONS AND DEBT
FINANCING
4.1. Upon formation of a CFD the developer/landownerApplicant shall deposit with the
CFDTown’s Finance Department a non-refundable administrative expense fee in the amount
of $50,000. The administrative expense fee shall be applied by the CFDTown to the costs and
expenses incurred in connection with the formation, review of any feasibility study, election
costs, administration, operation and maintenance of the CFD or its public improvements.
From time to time, upon depletion of the administrative expense fee, the CFDTown may
request, and the developer/landownerApplicant shall promptly deposit with the CFD,
additional $25,000 deposits to be applied to the purposes contemplated in this Section 4.1.
4.2. In order to provide for the CFD to be self-supporting for itsUnless the Applicant and the CFD
Board mutually agree otherwise, an ad valorem tax of $.30 per $100 of assessed valuation for
all real and personal property in the CFD shall be assessed pursuant to A.R.S. § 48-723 to
cover administrative, operation, and maintenance expenses the Town and the CFD, unless
otherwise agreed, will require the imposition of a $.30 per 100 of assessed value ad valorem
tax upon the CFD taxable property. Failure to impose such tax will relieve the Town and the
CFD from undertaking any obligations or operations.incurred by the CFD and by the Town for
the benefit of the CFD.
4.3. In connection with any request for debt financing, applicantthe Applicant shall provide a
current appraisal of the fair cash market value of the property within the proposed CFD which
is to be taxed or assessed, prepared by a person who is designated as a Member Appraisal
Institute (“MAI”) and a certified general real estate appraiser (such person hereafter referred to
as an “MAI Appraiser”), such appraisal to be in form and substance acceptable to the Town, in
its sole discretion.
4.4. The amount of CFD debt of a CFD mayshall not have any substantial direct or indirect
negative impacts on the debt or financing capabilities of the Town, and second, that the CFD
debt imposed on the CFDshall not impose an unreasonable financial burden on future CFD
residents.
4.5. General obligation bonds of the CFD are secured by an ad valorem tax on all taxable property
located within the CFD. An applicant for An Applicant seeking the issuance of CFD general
obligation bonds shoualdl describe in each project feasibility report the following:
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
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Amended 11/5/04 Resolution No. 2004-161
a. The current direct and overlapping tax and assessment burden on the taxable property that
is proposed to be taxed and the full cash value and assessed valuation of the taxable
property as shown on the most recent assessment roll. a.
b. The amount and timing of CFD general obligation bonds to be issued.
c. The expected market absorption of development within the CFD.
d. The effect of the CFD bond issuance on CFD tax rates, calculated as of the beginning,
midway through, and at the end of the market absorption period, or based on the phasing of
the project to be financed, as applicable.
e. Estimated savings, if any, to residents in the form of reduced home sales prices which are
projected to result from CFD financing.
f. The proposed total tax rate of the CFD. If the pre-established debt service target tax rate is
not sufficient to pay the entire debt service in respect of outstanding general obligation
bonds when due, the Applicant will be required to contribute an amount annually sufficient
to pay the difference between the revenues produced by the pre-established target tax rate
and the actual CFD debt service coming due in that fiscal year. Security for the Applicant '’s
payment of this contribution may be in the form of a cash contribution at three (3) times
Maximum Annual Debt Service (“MADS”), standby contribution agreement, or other
acceptable form of security, which shall be bankruptcy proof, as required by the CFD
Board. All of the foregoing items need to be described in detail. A cash flow schedule
illustrating the security amount and the time period required to cover such shortfall will be
required to be submitted by the Applicant prior to the issuance of general obligation bonds.
The security shall remain in full force and effect until such time as the assessed value of
real property in the CFD generates ad valorem taxes at the pre-established CFD target tax
rate sufficient to pay the annual CFD debt service, when due, for a period of three (3)
consecutive years beginning the year immediately following the last bond issuance.
g. Whether the bonds will be publicly offered or privately placed. Publicly offered bonds
must be rated in one of the four highest investment grade ratings from either Standard &
Poor’s Corporation, Moody’s Investors Services, Inc., or otheranother nationally
recognized bond rating services. service. Privately placed bonds need not be rated;
however, the purchasers of such general obligation bonds must be “qualified institutional
buyers” (as suchthat term is defined in Rule 144A of the Securities Exchange Commission)
and must agree not to resell the bonds except to “qualified institutional buyers” in a private
placement,; provided, however, that a purchaser of general obligation bonds in a private
placement may sell the bonds in a public offering if the CFD board approves the public sale
and the bonds have an investment grade rating.
4.6. Revenue bonds shall be payable from a CFD revenue source. An applicant for An Applicant
seeking the issuance of CFD revenue bonds must describe in each project feasibility report, the
following:
a. The current direct and overlapping tax and assessment burdens on the taxable property
within the CFD and the full cash value and assessed valuation of that taxable property as
shown on the most recent assessment roll.
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Adopted 5/21/97 Resolution No. 97-42 11
Amended 11/5/04 Resolution No. 2004-161
b. The revenue source from which bonds will be payable. The Town 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 expected market absorption of development within the CFD.
d. The amount and timing of CFD revenue bonds to be issued.
e. The financial impact of the proposed issue(s) on prospective residents.
f. Whether the bonds will be publicly offered or privately placed. Publicly offered revenue
bonds must be rated in one of the four highest investment grade ratings from either
Standard & Poor’s Corporation, Moody’s Investors Service, Inc., or otheranother
nationally recognized bond rating services. service. Privately place bonds need not be
rated; however, the purchasers of such revenue bonds must be “qualified institutional
buyers” and must agree not to sell the bonds except to “qualified institutional buyers” in a
private placement,; provided, however, that a purchaser of a revenue bond in a private
placement may sell the bonds in a public offering if the CFD board approves the public sale
and the bonds have an investment grade rating.a.
4.7. Assessment bonds shall be secured by first lien (subject only to the lien for general taxes and
prior special assessments) on the property benefited. Applicants forAn Applicant seeking the
issuance of CFD assessment bonds shoualdl describe in the application and in each project
feasibility report, the following:
a. The current direct and overlapping tax and assessment burdens on real property to
comprise the CFD and the full cash value and assessed valuation of that property as shown
on the most recent assessment roll.
b. The amount and timing of CFD assessment bonds to be issued.
c. The expected market absorption of development within the CFD.
d. The assessment burden to be placed on prospective residents.
e. Whether the assessments will be paid upon the sale of lots by the Applicant or will remain
on the property after sale.
f. If assessed parcels of land are expected to be subdivided, the process by which the
assessments will be allocated to the subdivided land.
g. Whether the assessment bonds will be publicly offered or privately placed.
i. Publicly offered assessment bonds must be rated in one of the four highest investment
grade ratings from either Standard & Poor’s Corporation, Moody’s Investors Service,
Inc., or otheranother nationally recognized bond rating services orservice.
Alternatively, in an unrated public offering, anthe Applicant shall provide an
independent fee appraisal of the land to be encumbered, prepared by an MAI Appraiser
and in form and substance acceptable to the CFD bBoard, in its sole discretion, shall
indicateevidencing a land value (generally, bulk wholesale value prior to any private or
public improvements being installed) to debt ratio of at least 6 to 1 prior to the issuance
of debt.
CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 12
Amended 11/5/04 Resolution No. 2004-161
ii. Privately placed bonds need not be rated; however the purchasers of such assessment
bonds must be “qualified institutional buyers” who must agree to hold the bonds for
their own account or agree not to sell the bonds except to “qualified institutional
buyers.” Further, inIn connection with the sale of unrated privately placed assessment
bonds, the CFD board must have received anApplicant shall provide an independent
fee appraisal of the land to be encumbered, prepared by an MAI Appraiser and in form
and substance acceptable to the TownCFD Board, in its sole discretion, indicating a
land value (prior to any improvements being installed) to debt ratio of at least 4 to 1 as
of a date prior to the issuance of debt.
iii. The independent fee appraisal provided by the Applicant for an unrated public offering
(subparagraph i above) or for privately placed bonds (subparagraph ii above) shall
value the property based on its bulk wholesale value prior to any private or public
improvements being installed.
4.8. Notwithstanding the restrictions pertaining to public sales and private placements of the bonds
set forth in this Article 4, the restrictions may be modified if other financing structures are
presented which, in the sole discretion of the CFD bBoard, provide other means to address
CFD concerns.
ARTICLE 5.
Financing Considerations
ARTICLE 5. FINANCING CONSIDERATIONS
5.1. The applicant or developer/landownerApplicant shall provide at least $0.25 in infrastructure or
community improvements for each $1.00 of debt to be issued by a CFD to finance public
infrastructure purposes. If agreed to by the CFD, prior infrastructure and community
improvements constructed or acquired by the applicant or the developer/landownerApplicant
and benefiting the property within the CFD may be included in calculating the applicant’s or
developer/landownerApplicant’s compliance with this Section 5.1.
5.2. If allowed by law, all bond issues shall include a debt service reserve fund in an amount
acceptable to the CFD bBoard.
5.3. Privately placed bonds shall have minimum authorized denominations of $100,000.1.1.
5.4. A general obligation bond authorization for a CFD shall expire no later than the earlier of
fifteen (15) years from the date of voter authorizationthe 15th anniversary of the first bond
issuance or 75% of development lots. Under extenuating circumstances the CFD Board may,
in its sole and absolute discretion, extend this period.
5.5. In further consideration of the types of debt obligations used to finance the acquisition or
construction of eligible public infrastructure, the following shall guide CFD obligations:
a. Routine Public Infrastructure Requirements. General Oobligation bonds shall be the
preferred financing mechanism for CFD’sCFDs with routine public infrastructure
requirements. The pre-established debt service target tax rate shall be levied upon all CFD
taxable property.
b. Extraordinary Public Infrastructure Requirements. General Oobligation bonds and/or
Sspecial Aassessment bonds may be used for any portion of extraordinary public
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CFD POLICY GUIDELINES & APPLICATION PROCEDURES TOWN OF MARANA, ARIZONA
Adopted 5/21/97 Resolution No. 97-42 13
Amended 11/5/04 Resolution No. 2004-161
infrastructure required for the CFD. For the purposes hereof this paragraph, extraordinary
public infrastructure requirements are those infrastructure elements not routinely required
for a CFD development project. Examples of extraordinary public infrastructure would
include, but are not necessarily limited to, transportation interchanges, water reclamation
facilities, water treatment campus, etc. campuses, and similar regional public infrastructure
improvements. The pre-established debt service target tax rate shall not be exceeded and
shall be levied upon all CFD taxable property for any Ggeneral Oobligation bonds, as
applicable. Special Aassessment liens shall be the lesser of $X,XXX ornot exceed the
value-to-lien ratio described in sectionsubparagraph 4.7(.g) above on a per lot basis.
5.6. The applicant, developer/landowner (or such otherApplicant or a third party acceptable to the
Town and CFD), for any CFD bonds,the CFD Board shall indemnify the Town and the CFD
and their agents and employees and shall hold the Town and the CFD and their agents and
employees harmless for, from and against any and all liabilities, claims, costs and expenses,
including attorneys’ fees, incurred in any challenge or proceeding to the formation, operation,
administration of the CFD, the offer and sale of CFD bonds, the levying by the CFD of any tax,
assessment or charge and the operation and maintenance of public infrastructure financed or
owned by the CFD. In addition, if such insurance is not otherwise available from another
source, the
5.7. The Applicant shall be responsible forobtain and pay the cost of a Director’sdirectors and
Oofficers (D&O) insurance policy to cover all actions and activities taken by the CFD Board
and officers of the CFD relating to the CFD formation, financing, administrative actions and
other related activities and for depositing. The Applicant shall deposit the amount of any
deductible under the D&O insurance policy in escrow with the CFD or for providing a plan for
providing for suchBoard or shall provide security acceptable to the CFD Board for the amount
of the deductible. The amount of the D&O coverage will be determined by the CFD at the time
of formationshall at all times equal or exceed $2,000,000 per occurrence and $2,000,000
aggregate. The CFD Board may increase the D&O coverage from time to time commensurate
with increases in coverage obtained by the Town for its directors and officers.
5.8. 5.7. Unless otherwise provided to the Town pursuant to other requirements, prior to CFD
financing and acquisition by the CFD or Town, the CFD or Town 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 Town or the CFD and a proposed form or
indemnity agreement with respect to all environmental law liability.
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