FEASIBILITY REPORT. For The Issuance of Not to Exceed $3,000,000 Principal ~mount

Transcription

1 FEASIBILITY REPORT Fr The Issuance f Nt t Exceed $3,000,000 Principal ~munt f PRONGHORN RANCH COMMUNITY FACILITIES DISTRICT (PRESCOTT VALLEY, ARIZONA) GENERAL OBLIGATION BONDS, SERIES 2002 February 15, 2002

2 TABLE OF CONTENTS SECTION Intrductin; Purpse f Feasibility Reprt; General Descriptin f District Descriptin, Estimate f Cst and Timetable fr Cmpletin f Public Infrastructure ONE TWO Map Shwing Lcatin f Public Infrastructure and Area t be Benefitted THREE Plan f Finance FOUR APPENDIX Legal Descriptin fr Prnghrn Ranch Cmmunity Facilities District (Presctt Valley, Arizna) A

3 SECTION ONE INTRODUCTION; PURPOSE OF FEASIBILITY REPORT; GENERAL DESCRIPTION OF DISTRICT

4 INTRODUCTION This Feasibility Reprt (this "Reprt") has been prepared by engineers and ther qualified persns including Antelpe Village, L.L.c. (the "Landwner") fr presentatin t the Bard f Directrs f the Prnghrn Ranch Cmmunity Facilities District (the "District") in cnnectin with the prpsed issuance by the District f its General Obligatin Bnds, Series 2002 (the "Bnds") in an aggregate principal amunt f nt t exceed $3,000,000, pursuant t the Cmmunity Facilities Act f 1989, Title 48, Chapter 4, Article 6 f Arizna Revised Statutes (the "Act"), specifically in accrdance with the prvisins f A.R.S. 48-7]5 with respect t the feasibility and benefits f certain public infrastructure(as that term is defined in A.R.S ]) described herein (the "Public Infrastructure") and the plan fr financing the Public Infrastructure with prceedsf the sale f the Bnds. PURPOSE OF FEASIBILITY REPORT Pursuant t A.R.S. 48-7] 5, this Reprt includes (i) a descriptin, an estimate f cst f acquisitin and peratin and maintenance, and an estimated schedule fr cmpletin f the Public InfTastructuret be acquired [Sectin Tw]; (ii) a map shwing, in general, the lcatin f the Public InfTastructureand area t be benefited by the Public InfTastructure[Sectin Three]; and (iii) a plan fr financing the Public Infrastructure [Sectin Fur]. This Reprt has been prepared fr the cnsideratin f the Bard f Directrs f the District nly. It is nt intended r anticipated that this Reprt will be relied upn by ther persns, including, but nt limited t, purchasers f the Bnds. This Reprt des nt attempt t address the quality f the Bnds as investments r the likelihd f repayment f the Bnds. In preparing this Reprt, financial cnsultants, appraisers, cunsel, engineers, staff f the Twn f Presctt Valley, Arizna (the "Twn") and ther experts have been cnsulted as deemed apprpriate. GENERAL DESCRIPTION OF DISTRICT Frmatin f the District was apprved by the Twn n January 24,2002 upn the request f 100% f the landwners within the District. The District is lcated within the Twn bundaries nrth f highway 89A and east f Rbert Rad and was created t finance the acquisitin f the Public InfTastructure which relates t the develpment f prtins f Prnghrn Ranch, a 640 acre master-planned residential develpment (the "Prject") being develped by Brwn Family Cmmunities ("Brwn Fami]y"). The Prject will cnsist f 1,440 residential units cmprising the fllwing mix f lts: I, I02 single family hme lts, 208 pati hme lts, and 130 twnhuse lts. Additinally, the Prject includes apprximately 40 acres designed fr public parks and pen spaces. All 640 acres f the Prject, which includes the residential units and pen space, is in the District. A ]egal descriptin f the District is included in Appendix A and a map f the District is included in SectinThree f this Reprt. 1.1

5 SECTION TWO DESCRIPTION, ESTIMATE OF COST AND TIMETABLE FOR COMPLETION OF PUBLIC INFRASTRUCTURE

6 DESCRIPTION, ESTIMATE OF COST AND TIMETABLE FOR COMPLETION OF PUBLIC INFRASTRUCTURE The Public Infrastructure will be publicly bid pursuant t State law and Twn plicies, upn acquisitin by the District, will be dedicated t the Twn. Listed belw are descriptins, estimated csts f acquisitin and the timetable fr cmpletin f the Public Infrastructure. Prceeds f the Bnds, after payment f the csts f issuance, will be used t finance the acquisitin f the Public Infrastructure: Estimated Unit Ttal Date f Descriptin Ouantitv Measure Price Cmp.Ietin I. Prnghrn Ranch Parkway Paving 13,500 SY $ 256,000 Curb 7,600 LF 77, Antelpe Meadws Drive Paving 3,200 SY 199, Curb 5,600 LF 57, Residential Streets Paving 52,623 SY 358,000 Curb, Gutter & Sidewalk 27,200 LF 228,000 Sewer 13,200 LF 319,000 Water 13,200 LF 355, Sewer Frce Main 8,000 LF 307,000 Lift Statin Lump Sum 217, Water t Service Pint Lump Sum 86, Gravity Sewer t Lift Statin Lump Sum -ROOO TOTAL $ The peratin and maintenance f the Public Infrastructure will be the res nsibili The Distric. u f sec assessed value annually t prvide fr the peratin and maintenance f the Public Infrastructure, Brwn Family, alng with Antelpe Village, L.L... ("Antelpe Village"), Western Cmmunities Crpratin. ("Western Cmmunities") and Presctt Valley VII, L.L.C. ("PV VII"), ther entities invlved in the develpment f the Prject, will be respnsible, jintly and severally, fr such annual expenses which are nt cvered by the $0.30 tax levy, up t $16,200 annually until the earlier f fifteen (15) years frm July 1, 2002 r the July 1 after the date that the building permit fr the ne thusandth (1,000) density unit is issued. 2-1

7 SECTION THREE MAP SHOWING DISTRICT BOUNDARIES, LOCATION OF PUBLIC INFRASTRUCTURE AND AREA TO BE BENEFITTED

8 CFD. \MPRO\Je.MENT?\..A"-\ - SEW E R.. L SITE D Phase I. Phase II ----

9 CFD 'MP~O"e.ME~T ~\..A"-.\- ROADS L SITE - PhaseI PhaseII D. ~ J ~qp... --

10 CFD. \MP\C:.O'le.MENT SITE L --- ~ \\ I I I PhaseI Phasen D III ~ J ---

11 PRONGHORN PRESCOTTVALLEY NORTH ANTELOPEVILLAGE PreliminaryDevelpment Plan 1YPE"B" LOTS 1==._~._-~-~..- == -.. =-.-=-=:c II R1L-1 0 PAD II RS-3 PAD II Public Lands/ Open Space II C-2 PAD II Cmmunity Center II Rads II Schl

12 SECTION FOUR PLAN OF FINANCE

13 PLAN OF FINANCE The acquisitin f the Public Infrastructure will be financed by the District pursuant t a Plan f Finance herein described. This Plan f Finance is subject t mdificatin t accmmdate market cnditins at the time f the actual sale f the Bnds and t the extent necessary t cmply with federal and State law. (1) Prpsed Bnd Sale. The Bnds were authrizedpursuant t a bnd authrizatinelectin held n February 26, 2002 which authrized up t $7,000,000 f District general bligatin bnds. The Bnds will have a 25 year maturity, with principal due 2007 thrugh and including 2026, with principal amrtized t prduce apprximately level debt service. (See Table One f this Sectin fr an estimated debt service schedule and Table Tw fr a debt service vs. prjected revenue schedule.) The Bnds will be unrated and sld thrugh a limited ffering (nn-public ffering pursuant t A.R.S ). Investrs will be required t sign a qualified investrs letter and meet certain investr criteria. (2) Surces and Uses f Funds - First Bnd Issue. The surces and uses f funds related t the sale f the Bnds (exclusive f accrued interest and riginal issue discunt r premium, if any) will be: SOURCES: Series 2002 Bnds Landwner Cntributin Ttal $3,000, ,000 $ USES: Public Infrastructure Capitalized Interest Csts f Issuance Depsit pursuant t hereinafter described Depsit Agreement Underwriter's Discunt Ttal $2,500, , ,000 ~ $ (3) District Tax Rate. The ttal District tax rate is targeted t be $3.30, representing $3.00 er $100 secndary assessed value fr the purpse f paying debt service and $0.30 fr peratinal and maintenance expenses 0 e Public Infrastructure as well as administrative expenses f the District. 4-1

14 (4) Standby Cntributin Agreement. The $3.00 tax levy fr debt service, given the CUITenttax base, is nt sufficient t prvide fr the prpsed debt service f the Bnds. As a cnsequence, Brwn Family, Western Cmmunities, Antelpe Village and PV VII will enter int a standby cntributin agreement (the "Cntributin Agreement") pursuant t which they will be liable, jintly and severally, fr the amunt f any debt service payments nt prvided fr by the $3.00 tax levy, given the then CUITentax base. The Cntributin Agreement will be in effect fr the life f the Bnds unless terminated under cnditins specified in the Cntributin Agreement, principally that the $3.00 tax rate fr debt service alne prvides fr the maximum, annual debt service n the Bnds. If at any time prir t the terminatin f the Cntributin Agreement, Brwn Family's audited net wrth is less than three times the riginal principal amunt f the Bnds, then Brwn Family will either cause an apprpriate amunt f the Bnds t be defeased, pst cllateral, r any cmbinatin f the tw such that the net wrth test will be met. At the time f the issuance f the Bnds, Brwn Family will prvide t the District Bard an appraisal which demnstrates that the appraised value f the taxable prperty in the District, withut cnsidering any imprvements t be thereafter prvided, is at least tw (2) times the principal amunt f the Bnds and, after cnsidering any imprvements t be financed with the prceeds f the sale f the Bnds and any imprvements fr which Antelpe Village can prvide evidence f financing therefre, is at least three (3) times the principal amunt f the Bnds. (5) Depsit Pursuant t Payment Agreement. Antelpe Village will depsit at clsing with respect t the Bnds an amunt equal t 10% f the stated principal amunt f the Bnds which will be held pursuant t a depsitry agreement (the "Depsitry Agreement"). Such amunt will be available t pay debt service if Brwn Family, Western Cmmunities, Antelpe Village and PV VII fail t pay under the Cntributin Agreement. The amunt held pursuant t the Depsitry Agreement will be paid t Antelpe Village when tax revenues alne have prven t be sufficient t prvide fr maximum annual debt service n the Bnds. Interest earnings n amunts held pursuant t the DepsitryAgreementwill be used t ffset amunts due pursuant t the Cntributin Agreement. (6) Hmewners Obligatin. At the $3.30 tax rate level, assuming an average hme price f $140,000, the District prtin f a tax bill fr a hmewner wuld be apprximately$32 per mnth r $379 annually. (7) Disclsure Obligatin. Disclsure f the District and the District's debt bligatins will be prvided t hmebuyers in the fllwing frms: (i) (ii) Within the real estate reprt, required by A.R.S , signed by all hmebuyers. A disclsure frm signed by each hmebuyer describing the.district,the Bnds and levy f taxes with respect theret. 4-2

15 (8) Absrptin. A market absrptin calendar fr the private develpment. Develpment at the Prject is anticipated t prceed as fllws: Calendar Year Ending II 2012 Ttal Brwn Family Cmmunity - Hmes (1) Q 622 Hme Lts fr Other Builders (1) Q 480 Brwn Family Cmmunity - Twnhuses (1) Q 208 Cnds(3) 130 Q 130 (1) Average price estimates at $140,000. (2) Average price estimates at $115,000. (3) Average price estimates at $100,

16 TABLE ONE Prnghrn Ranch Cmmunity Facilities District (Presctt Valley, Arizna) District General Obligatin Bnds, Series 2002 NET DEBT SERVICE SCHEDULE Date Principal Cupn Interest Ttal P+I DSR CIF Net New D/S Annual Net D/S 1/15/ , , (171,583.33) 7/15/ , , (4,363.31) - 104, , /15/ , , (4,363.31) - 104, /15/ , , (4,363.31) - 104, , /15/ , , (4,363.31) - 104, /15/ , , (4,363.31) - 104, , / , , (4,363.31) - 104, /15/ , , (4,363.31) - 104, , /15/ , , (4,363.31) - 104, /15/ , % 108, , (4,363.31) 174, , /15/ , , (4,363.31) - 101, /15/ , % 106, , (4,363.31) - 176, , /15/ , , (4,363.31) - 99,\ /15/ , % 103, , (4,363.31) - 179, , /15/ , , (4,363.31) - 96, /15/ , % 100, , (4,363.31) - 181, , /15/ , , (4,363.31) - 93, /15/ , % 97, , (4,363.31) - 188, , / , , (4,363.31) - 89, /15/ , % 94, , (4,363.31) - 189, , /15/ , , (4,363.31) - 86, /15/20\3 I 10, % 90, , (4,363.31) - 196, , /15/ , , (4,363.31) - 82, /15/ , % 86, , (4,363.3I) 197, , / , , (4,363.31) - 77, /15/ , % 82, , (4,363.31) 202, , / , , (4,363.31) - 73, / , % 77, , (4,363.31) - 208, , /15/ , , (4,363.31) - 68, /15/ , % 72, , (4,363.31) - 213, , /15/ , , (4,363.31) - 63, / , % 67, , (4,363.31) - 218, , /15/ , , (4,363.31) - 57, /15/ , % 61, , (4,363.31) - 222, , /15/ , , (4,363.31) - 51, / , % 56, , (4,363.31) - 226, , / , , (4,363.31) - 45, /15/ , % 49, , (4,363.31) - 235, , /15/ , , (4,363.31) - 38, /15/ , % 42, , (4,363.31) - 243, , /15/ , , (4,363.31) - 30, / , % 35, , (4,363.31) - 250, , / , , (4,363.31) - 23, / , % 27, , (4,363.31) - 258, , /15/ , , (4,363.31) - 14, / , % 18, , (4,363.31) - 264, , / , , (4,363.31) - 5, /\ % ( \ ). m.46j,ji) OO.039.m Ttal 3,000, ,712, ,712, (495,963.07) (171,583.33) 6,044,936.93

17 Fiscal Year Ending Net S!-cndary Assessed Valuatin (A) $p59,200 1,607,200 3,226,700 4,846,200 6,465,700 8,390,240 9,882,640 11,719,440 13,441,440 PRONGHORN RANCH COMMUNITY FACILITIES DISTRICT DISTRICT GENERAL OBLIGATION BONDS, SERIES 2002 PROJECTED REVENUES AND DISTRICT DEBT SERVICE District Debt Service $3,000,000 Net Series 2002 Debt Service Debt Service (B) Requirements (C) $28D,333 $104,, ,500 2()8, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,575 (10,039) $6,712,483 $6,044,937 Tax Rate District Revenues Prjected District Revenues 13,776 48,216 96, , , , , , , , , , , , , , , , , , , , ,973 TABLE TWO Difference (D) (90,611')" (160,557) (111,972) (63,387) (84,802) (26,991 ) (A) Secndary assessed valuatin fr FYE2003 thrugh FYE2025 is estimated using absrptin schedules prvidedby the Develper and assumes n grwthin SAV after build-ut. (B) Interest is estimated at 7.25%. (C) Net f earnings n the amunts held pursuant t the DepsitryAgreement and capitalized interest fund. Earnings n the amunts held pursuant t the DepsitryAgreement and capitalized interest fund are assumed at 3.00% and 2.00%, respectively. (D) Bycntractual bligatin, BrwnFamily,Western Cmmunities,Antelpe Villageand PV VII t prvide fr shrtfallpursuant t the Cntributin Agreement.

18 APPENDIX A LEGAL DESCRIPTION FOR PRONGHORN RANCH COMMUNITY FACILITIES DISTRICT (PRESCOTT VALLEY, ARIZONA)

19 EXHIBIT A Le!!al Descriptin f the Prperty PARCEL 1: The East half f the fllwing described prperty; AUf Sectins 23 & 26, auin Twnship 15Nrth, Range 1 Westf the Gila and Salt River Base and Meridian, Yavapai Cunty, Arizna. EXCEPT ALL il, gas, cal and minerals whatsever already fund r which may be hereafter fund upn r under said lands as reserved in Bk 192 f Deeds,page 415. RESERVING AND EXCEPTING ne half f all il, gas and minerals upn r under the abve described lands (except lands n and under which the il, gas, cal and ther minerals have been heretfre reserved by Santa Fe Pacific Railrad Cmpany) as reserved in Deed recrded in Bk 115 f Official Recrds, Pages RESERVING AND EXCEPTING all remaining il, gas and minerals upn r under the abve described land (except lands n and under which the il, gas, cal and ther minerals have been heretfre reserved) as reserved in Bk 1772 f Official Recrds,Page 713. RESERVING unt their heirs, successrs and assigns an easement fr ingress and egress acrss Sectins 26 and 23 f the subject prperty, such easement shall be at least 68 feet in width and unless therwise agreed shall be lcated an equal distance frm the East and the West prperty line f subject prperty as it enters Sectin 26 and as it exits frm Sectin 23. The easement shall be lcated an equal distance frm the East and the West prperty line f Sectins 26 and 23. Buyer has the right t negtiate a change in the cnfiguratin at a later date cnsistent with an apprved Master Plan, and shall be designed t accmmdate traffic arising frm future land develpment n the East half f the Sectins directly t the Nrth (Sectins 14, 11, 1 (Twnship 15 Nrth, 1 West) and Sectin 35 (Twnship 16 Nrth~ 1 West). Seller may, at its electin, dedicate such easement t the public. PARCEL 2: An easement fr radway and utilities thrugh the Nrtheast quarter f Sectin 35, Twnship 15 Nrth, Range I West, as mre fully described in instrument recrdednvember 20, 1998 in Bk 3618 f Official Recrds, Page 659 and Affidavit recrded January 19, 1999 in Bk 3631 f Official Recrds, Page 986.