MONUMENT • The Monument Board of Trustees has authorized a major move to fund water improvement projects over the next three years.
At the board’s Sept. 21 meeting, they heard recommendations from town staff and special legal counsel regarding the potential for using the sale of revenue bonds to fund major improvements to its water system over the coming years.
However, instead of revenue bonds, it was recommended Monument create an ordinance to enter a site lease agreement and lease purchase agreement to market Certificates of Participation (COPs) — an alternate form of financing.
Town attorney Andrew Richey presented the finer details of the agreement, with bond counsel provided by Nate Eckloff of Piper Sandler and Kimberly Crawford of Butler Snow Law Firm. Both counsels recommended the certificates to help maximize the town’s budgetary flexibility in financing the water projects.
Presently, the town has a 2A water fund and an enterprise water fund for its improvements. Formal revenue bonds would have the town fund improvements from just one fund, Richey said. Using Certificates of Participation is a way many municipalities, counties and school districts fund projects without having to raise taxes and is a financial structure approved by the Colorado Supreme Court, Richey said. The collateral for the agreement would be town-owned property, infrastructure and improvements.
With the agreement, Monument would lease its collateral property to BOK Financial in Denver, which would act as the financial trustee in exchange for an anticipated $22 million. BOK Financial then leases back the property to the town, and Monument pays “base rents” to pay off the $22 million over time, Richey said.
Richey said Certificates of Participation also carry added protection for the town since they involve leases over a particular term and not transfer of title. Monument would not lose title to any of its assets, he said.
While town staff plans on raising $22 million through marketing these COPs, other terms like interest rates and repayment amount will depend on market conditions when the certificates go to market. The agreement guarantees the interest rate would not exceed 4.5%, but with present rates it is expected to be just under 3%, Town Manager Mike Foreman said.
“We feel like, if we can, get this done before the election, because rates will continue to stay low,” Foreman said. “Not sure what can happen after an election.”
Terms for repayment would not exceed 30 years, but Richey said town staff is negotiating for lower terms. Richey also said as base rents are paid, subleased property in the agreement could be removed, which is the goal, or substituted with other property of equal or lesser value.
The board approved the ordinance 6-0 with no opposition from trustees, staff or the public.
“I agree this is a very effective way of getting things done within the town without having to go ask for more money from the taxpayers,” Mayor Don Wilson said.
Foreman noted the anticipated $22 million from the COPs would leave an additional $5 million in the 2A fund.
In other business, the trustees approved an ordinance to annex a parcel of land northwest of the intersection at 2nd Street and Front Street. The land owner is selling the property, which is surrounded by town land, to a commercial user. The buyer wants the land to be within the Town of Monument. Since it is surrounded by town land, it could be annexed by a single ordinance.
The annexation was approved 6-0 without opposition.