HomeMy WebLinkAboutagenda.council.special.20110830 THE CITY OF ASPEN
AGENDA
SPECIAL MEETING
AUGUST 30, 2011
4:30 P.M.
ORDINANCE #26, 2011 — Second Reading and Public hearing — Refunding 2003
General Obligation Bonds
MEMORANDUM
TO: Mayor and City Council
FROM: Don Taylor, Director of Finance
THRU: Steve Barwick, City Manager
DATE OF MEMO: August 23th, 2011
MEETING DATE: August 30` 2011
RE: Refunding 2003 General Obligation Bonds
REQUEST OF COUNCIL: This is for the City Council to consider an ordinance authorizing
the issuance of bonds in order to refund (pay off) bonds that were issued in 2003. The bonds
issued would bear a lower interest rate than currently paid on the outstanding 2003 bonds and
therefore save the city money.
PREVIOUS COUNCIL ACTION: In 1993 the City issued General Obligation Bonds to
finance the construction of the Marolt housing project. The City subsequently issued refunding
bonds in 2003 in order to pay off the 1993 bonds and lower its interest costs. There is currently
$2,750,000 outstanding on the 2003 issue.
BACKGROUND: When the City finances a project it will issue bonds to do so. Each bond,
usually in 5,000 denominations, has its own specific interest rate and maturity date. As you
would expect, the longer term bonds usually carry a higher interest rate. The stated interest rate
on the outstanding 2003 bonds ranges from 3.3% to 3.9 %. The City could issue bonds today that
would bear interest rates that would range from .25% to 1.90% for the same maturities as the
outstanding 2003 bonds. This would dramatically lower our interest cost.
DISCUSSION: This is the first opportunity that the City could refund these bonds as the bonds
carry a provision that they may be called no sooner than December 2011. This allows the city to
pay off those bonds early by issuing new bonds at a lower interest cost. The City would issue the
bonds through the investment banking firm of Stifel Nicolaus and Company, Inc. Attached is an
ordinance authorizing the issuance of the refunding bonds. The ordinance provides for the terms
of repayment of the bonds which will be Marolt housing revenues, Housing development fund
revenues, Truscott housing fund revenues, and general obligations of the City. The general
Obligation pledge of the city means that if revenues are not sufficient from other available
sources, the city will establish a mill levy sufficient to repay the bonds.
Page 1 of 2
Section 23 of the Ordinance is also worthy of some discussion. It sets out the delegates the
authority to issue the sales certificate to the City Manager and the Finance director and
establishes the parameters for the issuance. The delegation expires after 180 days, provides that
the b9onds issued will not exceed $2,500,000, the final maturity will be no later than December
1, 2017 and that net present value savings achieved through the refunding shall be no less than
3% of the remaining debt service on the 2003 General Obligation Refunding Bonds.
FINANCIAL/BUDGET IMPACTS: The City would save approximately $150,000 by
undertaking this refunding. The savings would be realized in the Marolt housing fund which is
expected to encounter difficult cash flow issues in the coming years. This would help deal with
that issue, but not solve it. The exact amount of savings will not be known until the refunding
bonds are issued and the exact interest cost determined.
RECOMMENDED ACTION: Staff recommends approval of the ordinance at second reading.
ALTERNATIVES: The other alternative would be to not refund the 2003 bonds and pay the
existing bonds off through 2018. This would bear a higher cost.
PROPOSED MOTION: City Council approves at second reading the Ordinance authorizing the
issuance of the 2011 General Obligation Refunding Bonds.
CITY MANAGER COMMENTS:
ATTACHMENTS:
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DRAFT: 8 /11 /11
CERTIFIED RECORD
OF
PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF ASPEN, COLORADO
RELATING TO AN ORDINANCE
AUTHORIZING THE ISSUANCE OF:
Up to $2,500,000
City of Aspen, Colorado
General Obligation Refunding Bonds
Series 2011
This cover page is not a part of the following ordinance and is included solely for the
convenience of the reader.
4821 - 1868 - 9802.2
TABLE OF CONTENTS
Page
This table of contents is not a part of the following ordinance and is included solely for the
convenience of the reader.
Section 1. Definitions 3
Section 2. Authorization and Purpose of Bonds 7
Section 3. Bond Details 7
Section 4. Redemption of Bonds Prior to Maturity 8
Section 5. Creation of Bond Account 9
Section 6. Delivery of Bonds and Application of Bond Proceeds 9
Section 7. Security for the Bonds 10
Section 8. Form of Bonds 12
Section 9. Execution of Bonds 12
Section 10. Temporary Bonds 12
Section 11. Registration of Bonds in Registration Books Maintained by Paying
Agent 13
Section 12. Transfer and Exchange of Bonds 13
Section 13. Replacement of Lost, Destroyed or Stolen Bonds 13
Section 14. Call and Payment of Series 2003 Refunded Bonds 13
Section 15. Investments 13
Section 16. Various Findings, Determinations, Declarations and Covenants 14
Section 17. Federal Income Tax Covenants 16
Section 18. Defeasance 17
Section 19. Events of Default 17
Section 20. Remedies for Events of Default 18
Section 21. Amendment of Ordinance 18
Section 22. Appointment and Duties of Paying Agent 19
Section 23. Delegation and Parameters 20
Section 24. Authorization to Execute Documents 21
Section 25. Approval of Official Statement 21
Section 26. Application of Supplemental Act 21
Section 27. Limitation of Actions 21
Section 28. Events Occurring on Days That Are Not Business Days 21
Section 29. Ordinance Is Contract with Owners of Bonds and Irrepealable 22
Section 30. Headings, Table of Contents and Cover Page 22
Section 31. Severability 22
Section 32. Repeal of Inconsistent Ordinances 22
Section 33. Ratification of Prior Actions 22
APPENDIX A Form of Bond
4821 -1868- 9802.2
ORDINANCE NO. )6 ( SERIES OF 2011)
AN ORDINANCE AUTHORIZING THE ISSUANCE BY THE CITY OF
ASPEN, COLORADO, OF ITS GENERAL OBLIGATION REFUNDING
BONDS, SERIES 2011, IN THE AGGREGATE PRINCIPAL AMOUNT OF UP
TO $2,500,000 FOR THE PURPOSE OF REFUNDING THE CITY'S
OUTSTANDING GENERAL OBLIGATION REFUNDING BONDS, SERIES
2003; PROVIDING FOR THE PAYMENT OF SUCH BONDS FROM
AVAILABLE TRUSCOTT HOUSING FUND REVENUES, AVAILABLE
MAROLT HOUSING FUND REVENUES, AVAILABLE GENERAL FUND
REVENUES AND AVAILABLE HOUSING DEVELOPMENT FUND
REVENUES THAT ARE AVAILABLE FOR SUCH PURPOSES, IF ANY;
PROVIDING FOR THE PAYMENT OF SUCH BONDS FROM THE
PROCEEDS OF AD VALOREM PROPERTY TAXES; PROVIDING FOR THE
LEVY OF AD VALOREM PROPERTY TAXES FOR THE PAYMENT OF
SUCH BONDS; PROVIDING THE FORM OF SUCH BONDS AND OTHER
DETAILS WITH RESPECT TO SUCH BONDS AND THE PAYMENT
THEREOF; APPROVING OTHER DOCUMENTS RELATING TO SUCH
BONDS; AND PROVIDING THE EFFECTIVE DATE OF THIS ORDINANCE.
RECITALS
WHEREAS, the City of Aspen (the "City"), in the County of Pitkin and State of
Colorado, is a legally and regularly created, established, organized and existing municipal
corporation under the provisions of Article XX of the Constitution of the State of Colorado and
the home rule charter of the City (as more particularly defined in Section 1 herein, the "Charter ")
(all capitalized terms used and not otherwise defined in the recitals hereof shall have the meaning
assigned in Section 1 of this Ordinance); and
WHEREAS, under the Charter, the City is possessed of all powers which are necessary,
requisite or proper for the government and administration of its local and municipal matters, all
powers which are granted to home rule municipalities by the Colorado Constitution, and all
rights and powers that now or hereafter may be granted to municipalities by the laws of the State
of Colorado; and
WHEREAS, pursuant to Section 10.6 of the Charter, the City Council of the City (the
"City Council ") may authorize, by ordinance, without an election, the issuance of refunding
bonds for the purpose of refunding and providing for the payment of the City's outstanding
bonds;
WHEREAS, Article X, Section 20 of the Colorado Constitution ( "TABOR ") provides
that voter approval in advance is required for the creation of any district (as such term is defined
in TABOR, which includes governmental entities such as the City) direct or indirect debt or
other multiple - fiscal year financial obligation whatsoever except for refinancing district bonded
debt at a lower interest rate; and
4821- 1868 - 9802.2
WHEREAS, the City has previously issued its General Obligation Bonds, Series 1992A,
dated October 1, 1992, in the original principal amount of $3,600,000 (the "Series 1992A
Bonds "); and
WHEREAS, the City has previously issued its General Obligation Housing Refunding
Bonds, Series 1993A, dated April 15, 1993, in the original principal amount of $4,160,000 (the
"Series 1993A Bonds "); and
WHEREAS, the City has previously issued its General Obligation Housing Refunding
Bonds, Series 1993B, dated April 15, 1993, in the original principal amount of $6,125,000 (the
"Series 1993B Bonds "); and
WHEREAS, on October 29, 2003, for the purpose of refunding the Series 1992A Bonds,
the Series 1993A Bonds and the Series 1993B Bonds, the City issued its General Obligation
Refunding Bonds, Series 2003, dated October 1, 2003, in the original principal amount of
$7,930,000 (the "Series 2003 Bonds "), which bonds are currently outstanding in the principal
amount of $2,750,000 and bear interest at rates ranging from 3.50% to 3.90% per annum; and
WHEREAS, the Series 2003 Bonds are subject to redemption prior to maturity, at the
option of the City, on December 1, 2011 and on any date thereafter at a redemption price equal to
100.0% of the principal amount so redeemed, plus accrued interest to the redemption date; and
WHEREAS, the City will provide legally available moneys of the City in an amount
which, when combined with a portion of the proceeds of the Bonds, will be sufficient to pay the
Series 2003 Refunded Bonds Requirements on the Series 2003 Redemption Date, which funds
shall be deposited with the Series 2003 Paying Agent upon issuance and delivery of the Bonds
(defined below); and
WHEREAS, the Series 2003 Bonds maturing on December 1, 2011 (the "2011
Maturity ") are not part of the City's refunding plan; and
WHEREAS, the City Council has determined that it is in the best interests of the City and
its residents to issue the City of Aspen, Colorado, General Obligation Refunding Bonds, Series
2011, in the aggregate principal amount of up to $2,500,000 (the "Bonds "), for the purposes of
refunding the Series 2003 Bonds maturing on and after December 1, 2012 (the "Series 2003
Refunded Bonds ") at a lower interest rate and paying the costs of issuance of the Bonds; and
WHEREAS, the City Council intends, but is not obligated, to pay the principal of,
premium, if any, and interest on the Bonds from (a) moneys constituting rents or other revenues
from the operation of the City's Truscott Place affordable housing complex that are on deposit in
the City's Truscott Housing Fund and are available for payment of the principal of, premium, if
any, and interest on the Bonds (as more particularly defined in Section 1 hereof, the "Available
Truscott Housing Fund Revenues "), (b) moneys constituting rents or other revenues from the
operation of the City's Marolt affordable housing complex that are on deposit in the City's
Marolt Housing Fund and are available for payment of the principal of, premium, if any, and
interest on the Bonds (as more particularly defined in Section 1 hereof, the "Available Marolt
Housing Fund Revenues "), (c) moneys on deposit in the City's General Fund which are available
for payment of the principal of, premium, if any, and interest on the Bonds (as more particularly
4821 - 1868 - 9802.2 2
defined in Section 1 hereof, the "Available General Fund Revenues "), and (d) real estate transfer
tax revenues and sales tax revenues that are on deposit in the City's Housing Development Fund
and are available for payment of the principal of, premium, if any, and interest on the Bonds (as
more particularly defined in Section 1 hereof, the "Available Housing Development Fund
Revenues ");
WHEREAS, notwithstanding the City's intention to pay amounts due on the Bonds from
the Available Truscott Housing Fund Revenues, the Available Marolt Housing Fund Revenues,
the Available General Fund Revenues and the Available Housing Development Fund Revenues,
the City is not obligated to use such revenues for payment of the Bonds and the Bonds are
general obligations of the City and the full faith and credit of the City are pledged to their
payment; and
WHEREAS, no member of the City Council has a potential conflict of interest in
connection with the authorization, issuance, sale or use of proceeds of the Bonds; and
WHEREAS, proceeds derived from the sale of the Bonds, together with legally available
moneys of the City as described herein, shall be deposited in the Series 2003 Refunded Bonds
Bond Account solely for payment of the Series 2003 Refunded Bonds and shall be applied by the
2003 Refunded Bonds Paying Agent to refund, pay and discharge the Series 2003 Refunded
Bonds on the Series 2003 Redemption Date (capitalized terms used in the foregoing recital are
defined in Section 1 below); and
WHEREAS, the City Council has been presented with a proposal from Stifel Nicolaus &
Company, Incorporated, of Denver, Colorado, to purchase the Bonds upon specified terms and
conditions, the final terms and conditions of which are to be set forth in the Bond Purchase
Agreement in accordance with the Sale Certificate, and, after consideration, the City Council has
determined that the negotiated sale of the Bonds, subject to the parameters set forth herein, to
said company is to the best advantage of the City; and
WHEREAS, there has been presented to the City Council, among other things,
substantially final forms of (a) the Preliminary Official Statement, (b) Paying Agent Agreement,
(c) the Bond Purchase Agreement (subject to completion in accordance with the terms of the
Sale Certificate) and (d) the Continuing Disclosure Undertaking; and
WHEREAS, subject to the Bonds effecting a savings as set forth in this Ordinance, the
City Council desires, as provided in the Supplemental Public Securities Act, Part 2 of Article 57
of Title 11 of the Colorado Revised Statutes, as amended, to delegate the authority to the City
Manager or, in the City Manager's absence, the Finance Director, to determine certain provisions
of the Bonds to be set forth in the Sale Certificate, in accordance with the provisions of this
Ordinance.
NOW, THEREFORE, BE IT ORDAINED, BY THE CITY COUNCIL OF THE CITY
OF ASPEN, COLORADO THAT:
Section 1. Definitions. The following terms shall have the following meanings for
purposes of this Ordinance:
4821 -1868- 9802.2 3
"Acts" means, collectively, the State Constitution, the Charter, Article 56 of Title 11,
Colorado Revised Statutes, as amended, and Part 2 of Article 57 of Title 11, Colorado Revised
Statutes, as amended.
"Available Fund Revenues" means, collectively, the Available Housing Development
Fund Revenues, the Available Marolt Housing Fund Revenues, the Available General Fund
Revenues, and the Available Truscott Housing Fund Revenues.
"Available General Fund Revenues" means moneys on deposit in the City's General
Fund which are available for payment of the principal of, premium, if any, and interest on the
Bonds.
"Available Housing Development Fund Revenues" means real estate transfer tax
revenues and sales tax revenues that are on deposit in the City's Housing Development Fund and
are available for payment of the principal of, premium, if any, and interest on the Bonds.
"Available Marolt Housing Fund Revenues" means moneys constituting rents or other
revenues from the operation of the City's Marolt affordable housing complex that are on deposit
in the City's Marolt Housing Fund and are available for payment of the principal of, premium, if
any, and interest on the Bonds.
"Available Truscott Housing Fund Revenues" means moneys constituting rents or other
revenues from the operation of the City's Truscott Place affordable housing complex that are on
deposit in the City's Truscott Housing Fund and are available for payment of the principal of,
premium, if any, and interest on the Bonds after payment of, among other things, the principal
of, premium, if any, and interest on the City's General Obligation Housing Bonds Series 2001A.
"Bond Account" means the City of Aspen, Colorado, General Obligation Refunding
Bonds Series 2011 Bond Account" created pursuant to the Section hereof entitled "Creation of
Bond Account."
"Bond Counsel" means (i) as of the date of issuance of the Bonds, Kutak Rock LLP, and
(ii) as of any other date, Kutak Rock LLP or such other attorneys selected by the City with
nationally recognized expertise in the issuance of municipal bonds.
"Bond Obligation" means, as of any date, the principal amount of Bonds then
Outstanding.
"Bond Purchase Agreement" means the Bond Purchase Agreement pursuant to which the
Original Purchaser has agreed to purchase the Bonds at the price and on the terms set forth
therein.
"Bonds" means the City of Aspen, Colorado, General Obligation Refunding Bonds,
Series 2011, authorized in the Section hereof entitled "Authorization and Purpose of Bonds."
"Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which
banking institutions in the State are authorized or obligated by law or executive order to be
closed for business.
4821 -1868- 9802.2 4
"Charter" means the Charter of the City of Aspen, adopted June 16, 1970, as amended.
"City" is defined in the recitals hereof.
"City Council" means the City Council of the City, and any successor body.
"Code" means the Internal Revenue Code of 1986, as amended. Each reference to a
section of the Code herein shall be deemed to include the United States Treasury Regulations
proposed or in effect thereunder and applicable to the Bonds or the use of proceeds thereof,
unless the context clearly requires otherwise.
"Continuing Disclosure Undertaking" means the undertaking to facilitate compliance
with Rule 15c2 -12 under the Securities Exchange Act of 1934 in substantially the form appended
to the Preliminary Official Statement.
"Dated Date" means the date of issuance of the Bonds.
"Defeasance Securities" means cash funds or bills, certificates of indebtedness, notes,
bonds or similar securities which are direct non - callable obligations of the United States of
America or which are fully and unconditionally guaranteed as to the timely payment of principal
and interest by the United States of America, to the extent such investments are Permitted
Investments.
"DTC" means The Depository Trust Company, New York, New York, and its successors
in interest and assigns.
"DTC Letter of Representations" means the Blanket Letter of Representations dated July
26, 1999 between the City and DTC with respect to the book -entry registration system for the
Bonds.
"Event of Default" means any one or more of the events set forth in the Section hereof
entitled "Events of Default."
"Interest Payment Date" means each June 1 and December 1, commencing December 1,
2011.
"Official Statement" means the final Official Statement relating to the Bonds approved in
the Section hereof entitled "Approval of Related Documents."
"Ordinance" means this Ordinance, including any amendment or supplement hereto.
"Original Purchaser" means Stifel Nicolaus & Company, Incorporated.
"Outstanding" means, as of any date, all Bonds, except the following:
(a) Any Bond cancelled by the City or the Paying Agent, or otherwise on the
City's behalf, at or before such date;
(b) Any Bond held by or on behalf of the City;
4821- 1868 - 9802.2 5
(c) Any Bond for the payment or the redemption of which moneys or
Defeasance Securities sufficient to meet all of the payment requirements of the principal
of, premium, if any, and interest on such Bond to the date of maturity or prior redemption
thereof, shall have theretofore been deposited in trust for such purpose in accordance with
the Section hereof entitled "Defeasance"; and
(d) Any lost, apparently destroyed, or wrongfully taken Bond in lieu of or in
substitution for which another bond or other security shall have been executed and
delivered.
"Owner" means the Person or Persons in whose name or names a Bond is registered on
the registration books maintained by the Paying Agent pursuant hereto.
"Paying Agent" means UMB Bank, n.a., Denver, Colorado, or any successor thereto or
assignee thereof approved by the City.
"Paying Agent Agreement" means an agreement with the Paying Agent concerning the
duties and obligations of the Paying Agent with respect to the Bonds.
"Permitted Investments" means any investment in which funds of the City may be
invested under the laws of the State at the time of such investment.
"Person" means a corporation, firm, other body corporate, partnership, association or
individual and also includes an executor, administrator, trustee, receiver or other representative
appointed according to law.
"Preliminary Official Statement" means the Preliminary Official Statement relating to the
Bonds, a form of which was submitted to the City Council on or before the date hereof.
"Rebate Account" means the City of Aspen General Obligation Refunding Bonds Series
2011 Rebate Account created in the Section hereof entitled "Federal Income Tax Covenants."
"Record Date" means, with respect to each Interest Payment Date, the fifteenth day of the
month preceding the month (whether or not such day is a Business Day) in which such Interest
Payment Date occurs.
"Refunding Project" means any purpose for which proceeds of the Bonds may be
expended under the Charter, including, but not limited to, the payment of an allocable portion of
the costs of issuance of the Bonds and the refunding, paying and discharging of the Series 2003
Refunded Bonds Requirements.
"Sale Certificate" means the certificate executed by the Sale Delegate, under the
authority delegated pursuant to this Ordinance, including, among other things, the aggregate
principal amount of the Bonds, the prices at which the Bonds will be sold, interest rates and
annual maturing principal for the Bonds, as well as the dates on which the Bonds may be
redeemed and the redemption prices therefore.
"Sale Delegate" means the City Manager or the Finance Director.
4821 -1868- 9802.2 6
"Series 2003 Bond Ordinance" means the City's Ordinance No. 15 (Series of 2003)
approved on first reading on September 22, 2003 and approved and adopted on final reading on
October 14, 2003.
"Series 2003 Bonds" is defined in the recitals hereof.
"Series 2003 Paying Agent" means UMB Bank, n.a..
"Series 2003 Redemption Date" means December 1, 2011.
"Series 2003 Refunded Bonds" means the Series 2003 Bonds maturing on and after
December 1, 2012, outstanding in the principal amount of $2,410,000.
"Series 2003 Refunded Bonds Bond Account" means the bond account established for
payment of the Series 2003 Bonds pursuant to the Series 2003 Bond Ordinance.
"Series 2003 Refunded Bonds Requirements" means the sum of (i) all of the principal
then outstanding on the Series 2003 Refunded Bonds on the Series 2003 Redemption Date
(which principal amount does not include the 2011 Maturity on the Series 2003 Bonds), and (ii)
all unpaid interest accrued on the Series 2003 Refunded Bonds to the Series 2003 Redemption
Date.
"State" means the State of Colorado.
"Tax Letter of Instructions" means the Tax Letter of Instructions, dated the date on
which the Bonds are originally issued and delivered to the City by Bond Counsel, as such
instructions may be superseded or amended in accordance with their terms.
"2011 Maturity" is defined in the recitals hereof.
Section 2. Authorization and Purpose of Bonds. Pursuant to and in accordance with
the Acts, the City hereby authorizes, and directs that there shall be issued the "City of Aspen,
Colorado, General Obligation Refunding Bonds, Series 2011," in the aggregate original principal
amount of up to $2,500,000 for the purpose of financing the Refunding Project.
Section 3. Bond Details.
(a) Registered Form, Denominations, Original Dated Date and Numbering.
The Bonds shall be issued as fully registered bonds, shall be dated as of the Dated Date
and shall be registered in the names of the Persons identified in the registration books
maintained by the Paying Agent pursuant hereto. The Bonds shall be issued in
denominations of $5,000 in principal amount or any integral multiple thereof. The Bonds
shall be consecutively numbered, beginning with the number one, preceded by the letter
(b) Maturity Dates, Principal Amounts and Interest Rates. The Bonds shall
mature on December 1 of the years and in the amounts set forth in the Sale Certificate,
4821 -1868- 9802.2 7
and shall bear interest at the rates per annum (calculated based on a 360 -day year of
twelve 30 -day months) set forth in the Sale Certificate.
(c) Accrual and Dates of Payment of Interest. Interest on the Bonds shall
accrue at the rates set forth above from the later of the original dated date or the latest
Interest Payment Date (or in the case of defaulted interest, the latest date) to which
interest has been paid in full and shall be payable on each Interest Payment Date.
(d) Manner and Form of Payment. Principal of each Bond shall be payable
to the Owner thereof upon presentation and surrender of such Bond at the principal office
of the Paying Agent in the city identified in the definition of Paying Agent in the Section
hereof entitled "Definitions" or at such other office of the Paying Agent designated by the
Paying Agent for such purpose. Interest on each Bond shall be payable by check or draft
of the Paying Agent mailed on each Interest Payment Date to the Owner thereof as of the
close of business on the corresponding Record Date; provided that interest payable to any
Owner may be paid by any other means agreed to by such Owner and the Paying Agent
that does not require the City to make moneys available to the Paying Agent earlier than
otherwise required hereunder or increase the costs borne by the City hereunder. All
payments of the principal of and interest on the Bonds shall be made in lawful money of
the United States of America.
(e) Book -Entry Registration. Notwithstanding any other provision hereof,
the Bonds shall be delivered only in book -entry form registered in the name of Cede &
Co., as nominee of DTC, acting as securities depository of the Bonds and principal of and
interest on the Bonds shall be paid by wire transfer to DTC; provided, however, if at any
time the Paying Agent determines, and notifies the City of its determination, that DTC is
no longer able to act as, or is no longer satisfactorily performing its duties as, securities
depository for the Bonds, the Paying Agent may, at its discretion, either (i) designate a
substitute securities depository for DTC and reregister the Bonds as directed by such
substitute securities depository or (ii) terminate the book -entry registration system and
reregister the Bonds in the names of the beneficial owners thereof provided to it by DTC.
Neither the City nor the Paying Agent shall have any liability to DTC, Cede & Co., any
substitute securities depository, any Person in whose name the Bonds are reregistered at
the direction of any substitute securities depository, any beneficial owner of the Bonds or
any other Person for (A) any determination made by the Paying Agent pursuant to the
proviso at the end of the immediately preceding sentence or (B) any action taken to
implement such determination and the procedures related thereto that is taken pursuant to
any direction of or in reliance on any information provided by DTC, Cede & Co., any
substitute securities depository or any Person in whose name the Bonds are reregistered.
Section 4. Redemption of Bonds Prior to Maturity.
(a) No Optional Redemption of Bonds. The Bonds shall not be subject to
redemption prior to maturity at the option of the City.
(b) Mandatory Sinking Fund Redemption. All or any principal amount of
the Bonds may be subject to mandatory sinking fund redemption by lot on December 1 of
4821- 1868 - 9802.2 8
the years and in the principal amounts specified in the Sale Certificate, at a redemption
price equal to the principal amount thereof (with no redemption premium), plus accrued
interest to the redemption date.
At its option, to be exercised on or before the forty -fifth day next preceding each
sinking fund redemption date, the City may (i) deliver to the Paying Agent for
cancellation any Bonds with the same maturity date as the Bonds subject to such sinking
fund redemption and (ii) receive a credit in respect of its sinking fund redemption
obligation for any Bonds with the same maturity date as the Bonds subject to such
sinking fund redemption which prior to such date have been redeemed (otherwise than
through the operation of the sinking fund) and cancelled by the Paying Agent and not
theretofore applied as a credit against any sinking fund redemption obligation. Each
Bond so delivered or previously redeemed shall be credited by the Paying Agent at the
principal amount thereof to the obligation of the City on such sinking fund redemption
date, and the principal amount of Bonds to be redeemed by operation of such sinking
fund on such date shall be accordingly reduced.
(c) Redemption Procedures. Notice of any redemption of Bonds shall be
given by the Paying Agent by sending a copy of such notice by first- class, postage
prepaid mail, not less than 30 days prior to the redemption date, to the Owner of each
Bond being redeemed. Such notice shall specify the number or numbers of the Bonds so
to be redeemed (if redemption shall be in part) and the redemption date. If any Bond
shall have been duly called for redemption and if, on or before the redemption date, there
shall have been deposited with the Paying Agent in accordance with this Ordinance funds
sufficient to pay the redemption price of such Bond on the redemption date, then such
Bond shall become due and payable at such redemption date, and from and after such
date interest will cease to accrue thereon. Failure to deliver any redemption notice or any
defect in any redemption notice shall not affect the validity of the proceeding for the
redemption of Bonds with respect to which such failure or defect did not occur. Any
Bond redeemed prior to its maturity by prior redemption or otherwise shall not be
reissued and shall be cancelled.
Section 5. Creation of Bond Account. There is hereby created the "City of Aspen,
Colorado, General Obligation Refunding Bonds Series 2003 Bond Account" (defined in Section
1 hereof as the "Bond Account "). Moneys on deposit in the Bond Account shall be applied
solely to the payment of the principal of and interest on the Bonds and for no other purpose until
the Bonds, including principal and interest, are fully paid, satisfied and discharged.
Section 6. Delivery of Bonds and Application of Bond Proceeds. Upon payment to
the City of the purchase price of the Bonds in accordance with the Bond Purchase Agreement,
the Bonds shall be delivered to or as directed by the Original Purchaser and the proceeds
received by the City from the sale of the Bonds shall be applied as a supplemental appropriation
by the City as follows:
(a) to payment of the costs of issuing the Bonds; and
4821- 1868 - 9802.2 9
(b) to the Series 2003 Refunded Bonds Bond Account, proceeds of the Bonds
which are sufficient to pay the Series 2003 Refunded Bonds Requirements.
(c) In addition to applying the proceeds of the Bonds as a supplemental
appropriation as described above, upon issuance and delivery of the Bonds, the City will
deposit with the Series 2003 Bonds Paying Agent legally available moneys of the City in
an amount equal to the sum of (A) the principal amount of the 2011 Maturity and (B) all
accrued but unpaid interest to December 1, 2011 on the 2011 Maturity.
Section 7. Security for the Bonds.
(a) General Obligations. The Bonds shall be general obligations of the City,
payable from the ad valorem property taxes levied by the City pursuant to this Section,
other moneys transferred to or deposited into the Bond Account pursuant to this
Ordinance and other moneys made available for the payment of the for the payment of
the principal of, premium, if any, and interest on the Bonds pursuant to subsection (0 of
this Section. The full faith and credit of the City are pledged for the punctual payment of
the principal of, premium, if any, and interest on the Bonds.
(b) Transfers from Available Fund Revenues. On or before each date on
which the City is required to deposit amounts with the Paying Agent pursuant to
subsection (h) of this Section, the City shall transfer any combination of Available Fund
Revenues to the Bond Account in an amount equal to the lesser of: (i) the principal of,
premium, if any, and interest on the Bonds due to be so deposited on such date, less any
other moneys then on deposit in the Bond Account; or (ii) the total of all Available Fund
Revenues at the time of such transfer which the City, in its discretion, elects to transfer to
the Bond Account.
(c) Levy of Ad Valorem Taxes. For the purpose of paying the principal of,
premium, if any, and interest on the Bonds when due, respectively, the City Council
shall, before such time provided for by law for levying other City taxes, annually
determine a rate of levy for general ad valorem taxes, without limitation as to rate or
amount, on all of the taxable property within the City, that will be sufficient, when
combined with the amount of the Available Fund Revenues projected to be transferred to
the Bond Account pursuant to subsection (b) of this Section and other moneys deposited
to the Bond Account pursuant to subsections (d) and (f) of this Section, to pay the
principal of, premium, if any, and interest on the Bonds when due, respectively, whether
at maturity or upon earlier redemption. The City Council shall, in certifying annual
levies for general ad valorem taxes, take into account the maturing indebtedness of the
Bonds for the ensuing year, deficiencies and defaults of prior years and any
reimbursement to be made pursuant to subsections (d) or (f) of this Section and shall
make ample provision for the payment thereof. The general ad valorem taxes levied
pursuant to this subsection, when collected, shall be deposited into the Bond Account.
(d) Covenant Upon Deficiency in Bond Account. Notwithstanding anything
else contained herein, the City hereby irrevocably covenants and agrees that, in the event
that amounts on deposit in the Bond Account on any date on which the City is required to
4821 -1868- 9802.2 10
deposit amounts with the Paying Agent pursuant to subsection (h) of this Section is less
than the amount sufficient to pay the principal of, premium, if any, and interest on the
Bonds on the corresponding Interest Payment Date, the City Council shall immediately
transfer previously appropriated moneys in the amount of such deficiency from the
general fund or any other legally available fund of the City to the Bond Account for the
payment of such amounts, and shall promptly pass and adopt supplemental or emergency
ordinances or resolutions as are required to effectuate such transfer and use. Thereafter,
such appropriations and transfers shall continue to be made in such amounts and with
sufficient frequency to assure that the moneys on deposit in the Bond Account shall be
sufficient to pay the principal of, premium, if any, and interest on the Bonds when due.
Upon the next succeeding levy of ad valorem property taxes for the Bonds pursuant to
subsection (c) of this Section, the taxes levied pursuant thereto shall include amounts
sufficient to reimburse the fund from which amounts were transferred pursuant to this
subsection and such reimbursement shall be made and appropriation made therefor upon
the collection of such taxes.
(e) Levy of Additional Ad Valorem Taxes. If the moneys on deposit in the
Bond Account, including, but not limited to, moneys of the City deposited therein
pursuant to subsections (b), (d) and (f) of this Section, are not sufficient to pay punctually
the annual installments on the contracts or bonds of the City, and interest thereon, and to
pay defaults and deficiencies, the City Council shall make such additional levies of taxes
as may be necessary for such purposes, and such taxes shall be made and continue to be
levied until the indebtedness is fully paid. The general ad valorem taxes levied pursuant
to this subsection, when collected, shall be deposited into the Bond Account.
(I) Use or Advance of Other Legally Available Moneys. Nothing herein
shall be interpreted to prohibit or limit the ability of the City to use legally available
funds of the City other than moneys required by this Ordinance to be transferred to or
deposited into the Bond Account to pay all or any portion of the principal of, premium, if
any, or interest on the Bonds. If and to the extent such other legally available moneys are
used to pay the principal of, premium, if any, or interest on the Bonds, the City may, but
shall not be required to, (i) reduce the amount of taxes levied for such purpose pursuant
to subsection (c) of this Section or (ii) use proceeds of taxes levied pursuant to subsection
(c) of this Section to reimburse the fund or account from which such other legally
available moneys are withdrawn for the amount withdrawn from such fund or account to
pay the principal of or interest on the Bonds. If the City selects alternative (ii) in the
immediately preceding sentence, the taxes levied pursuant to subsection (c) of this
Section shall include amounts sufficient to fund the reimbursement.
(g) Appropriation and Budgeting of Proceeds of Moneys. All amounts
transferred to or deposited into the Bond Account pursuant to this Ordinance are hereby
appropriated for that purpose, and all amounts required to pay the principal of and
interest on the Bonds when due, respectively, in each year shall be included in the annual
budget and appropriation ordinance to be adopted and passed by the City Council for
such year.
4821 -1868- 9802.2 1 1
(h) Deposit of Moneys to Pay Bonds with, and Payment of Bonds By,
Paying Agent. No later than the Business Day immediately preceding each Interest
Payment Date, the City, from moneys on deposit in the Bond Account or other moneys
made legally available pursuant to subsection (f) of this Section, shall deposit moneys
with the Paying Agent in an amount sufficient to pay the principal of, premium, if any,
and interest on the Bonds on such date. The Paying Agent shall use the moneys so
deposited with it to pay the principal of, premium, if any, and interest on the Bonds when
due.
Section 8. Form of Bonds. The Bonds shall be in substantially the form set forth in
Appendix A hereto, with such changes thereto, not inconsistent herewith, as may be necessary or
desirable and approved by the officials of the City executing the same (whose manual or
facsimile signatures thereon shall constitute conclusive evidence of such approval). All
covenants, statements, representations and agreements contained in the Bonds are hereby
approved and adopted as the covenants, statements, representations and agreements of the City.
Although attached as appendices for the convenience of the reader, Appendix A is an integral
part of this Ordinance and is incorporated herein as if set forth in full in the body of this
Ordinance.
Section 9. Execution of Bonds. The Bonds shall be executed in the name and on behalf
of the City with the manual or facsimile signature of the Mayor or Mayor Pro Tem of the City,
shall bear a manual or facsimile of the seal of the City and shall be attested by the manual or
facsimile signature of the City Clerk or Deputy or Assistant City Clerk, all of whom are hereby
authorized and directed to prepare and execute the Bonds in accordance with the requirements
hereof. Should any officer whose manual or facsimile signature appears on the Bonds cease to
be such officer before delivery of any Bond, such manual or facsimile signature shall
nevertheless be valid and sufficient for all purposes. When the Bonds have been duly executed,
the officers of the City are authorized to, and shall, deliver the Bonds to the Paying Agent for
authentication. No Bond shall be secured by or entitled to the benefit of this Ordinance, or shall
be valid or obligatory for any purpose, unless the certificate of authentication of the Paying
Agent has been manually executed by an authorized signatory of the Paying Agent. The
executed certificate of authentication of the Paying Agent upon any Bond shall be conclusive
evidence, and the only competent evidence, that such Bond has been properly authenticated and
delivered hereunder.
Section 10. Temporary Bonds. Until Bonds in definitive form are ready for delivery,
the City may execute, and upon the request of the City, the Paying Agent shall authenticate and
deliver, subject to the provisions, limitations and conditions set forth herein, one or more Bonds
in temporary form, whether printed, typewritten, lithographed or otherwise produced,
substantially in the forms of the definitive Bonds, with appropriate omissions, variations and
insertions, and in authorized denominations. Until exchanged for Bonds in definitive form such
Bonds in temporary form shall be entitled to the benefits and security of this Ordinance. Upon
the presentation and surrender of any Bond in temporary form, the City shall, without
unreasonable delay, prepare, execute and deliver to the Paying Agent and the Paying Agent shall
authenticate and deliver, in exchange therefor, a Bond or Bonds of the same series in definitive
form. Such exchange shall be made by the Paying Agent without making any charge therefor to
the registered owner of such Bond in temporary form.
4821 - 1868 - 9802.2 12
Section 11. Registration of Bonds in Registration Books Maintained by Paying
Agent. The Paying Agent shall maintain registration books in which the ownership, transfer and
exchange of Bonds shall be recorded. The person in whose name any Bond shall be registered
on such registration book shall be deemed to be the absolute owner thereof for all purposes,
whether or not payment on any Bond shall be overdue, and neither the City nor the Paying Agent
shall be affected by any notice or other information to the contrary.
Section 12. Transfer and Exchange of Bonds. The Bonds may be transferred or
exchanged at the principal office of the Paying Agent in the city identified in the definition of
Paying Agent in the Section hereof entitled "Definitions," for a like aggregate principal amount
of Bonds of other authorized denominations of the same type, maturity and interest rate, upon
payment by the transferee of a transfer fee, any tax or governmental charge required to be paid
with respect to such transfer or exchange and any cost of printing bonds in connection therewith.
Upon surrender for transfer of any Bond, duly endorsed for transfer or accompanied by an
assignment duly executed by the Owner or his or her attorney duly authorized in writing, the
City shall execute and the Paying Agent shall authenticate and deliver in the name of the
transferee a new Bond. Notwithstanding any other provision hereof, the Paying Agent shall not
be required to transfer any Bond (a) which is scheduled to be redeemed in whole or in part
between the Business Day immediately preceding the mailing of the notice of redemption and
the redemption date or (b) between the Record Date for any Interest Payment Date for such Bond
and such Interest Payment Date.
Section 13. Replacement of Lost, Destroyed or Stolen Bonds. If any Bond shall
become lost, apparently destroyed, stolen or wrongfully taken, it may be replaced in the form and
tenor of the lost, destroyed, stolen or taken Bond and the City shall execute and the Paying Agent
shall authenticate and deliver a replacement Bond upon the Owner furnishing, to the satisfaction
of the Paying Agent: (i) proof of ownership (which shall be shown by the registration books of
the Paying Agent), (ii) proof of loss, destruction or theft, (iii) an indemnity to the City and the
Paying Agent with respect to the Bond lost, destroyed or taken, and (iv) payment of the cost of
preparing and executing the new Bond.
Section 14. Call and Payment of Series 2003 Refunded Bonds. The City Council has
elected and does hereby declare its intent to exercise on behalf of and in the name of the City its
option to redeem all of the Series 2003 Refunded Bonds on the Series 2003 Redemption Date.
The City hereby authorizes and irrevocably instructs the Series 2003 Refunded Bonds Paying
Agent to give or cause to be given a notice of refunding, defeasance and redemption of the Series
2003 Refunded Bonds. Following the payment and redemption of the Series 2003 Refunded
Bonds on the Series 2003 Redemption Date, the balance of any moneys in the Series 2003
Refunded Bonds Bond Account shall be transferred to the Bond Account and used for the
payment of a portion of the interest due on the Bonds on the immediately following Interest
Payment Date.
Section 15. Investments. Moneys on deposit in the Bond Account and the Rebate
Account and any moneys held by the Paying Agent with respect to the Bonds shall be invested in
Permitted Investments, provided that the investment of such moneys shall be subject to any
applicable restrictions set forth in the Tax Letter of Instructions and the tax compliance
certificate delivered by the City in connection with the issuance of the Bonds that describes the
4821 -1868- 9802.2 13
City's expectations regarding the use and investment of proceeds of the Bonds and other
moneys. Except as otherwise provided above, earnings from the investment of moneys
separately accounted for to pay principal of, premium, if any, and interest on the Bonds and
moneys separately accounted for to pay costs of the Refunding Project shall be transferred to the
Rebate Account in the amounts and at the times required to fund the Rebate Account in
accordance with the Tax Letter of Instructions and all other earnings from the investment of
moneys shall be retained in the account in which earned.
Section 16. Various Findings, Determinations, Declarations and Covenants. The
City Council, having been fully informed of and having considered all the pertinent facts and
circumstances, hereby finds, determines, declares and covenants with the Owners of the Bonds
that:
(a) the net effective interest rate on the Bonds as sold to the Original
Purchaser pursuant to the Bond Purchase Agreement is a lower interest rate than the net
effective interest rate on the Series 2003 Refunded Bonds, therefore, the Bonds are issued
to refinance City bonded debt at a lower interest rate for the purposes of Article X,
Section 20 of the Colorado Constitution;
(b) the refunding of the Refunded Bonds with proceeds of the Bonds will, in
accordance with Section 11 -56- 104(1), Colorado Revised Statutes, as amended,
accomplish one or more of the following purposes: (i) avoiding or terminating any
default in the payment of interest on or principal of, or both interest on and principal of,
the Refunded Bonds; (ii) reducing the net effective interest rate on the City's bonds
(based on a comparison of the net effective interest rate on the Series 2003 Refunded
Bonds to the net effective interest rate on the Bonds); (iii) reducing total interest payable
over the life of the City's bonds, by issuing bonds of a shorter term, or at a lower net
interest cost, or having a lower net effective interest rate than each series of the Refunded
Bonds; (iv) reducing the total principal and interest payable on each series of the
Refunded Bonds or the principal and interest payable thereon in any particular year or
years, or effecting other economies; (v) modifying or eliminating restrictive contractual
limitations appertaining to each series of the Refunded Bonds, to the incurring of
additional indebtedness or obligations, or to any system, facility, or improvement
appertaining thereto; (vi) postponing the maturity of all or any part or portion of each
series of the Refunded Bonds to a later date, subject to the limitations in Section 11 -56-
107, Colorado Revised Statutes, as amended; or (vii) substituting an issue of bonds for a
note or notes, or other obligations, including but not limited to any obligation issued in
anticipation of the later issuance of bonds;
(c) as required by Section 11 -56- 107(1), Colorado Revised Statutes, as
amended, the aggregate principal amount of the Bonds does not exceed the original
authorized aggregate principal amount of (i) the Series 1992A Bonds (as authorized by
the eligible electors voting at the City's special election held on August 11, 1992), which
bonds were refunded by the issuance of the Series 2003 Bonds, (ii) the City's General
Obligation Housing Bonds, Series 1989A (as authorized by the eligible electors voting at
the City's general election held on May 2, 1989), which bonds were refunded by the
issuance of the Series 1993A Bonds, which were subsequently refunded by the issuance
4821 -1868- 9802.2 14
of the Series 2003 Bonds, and (iii) the City's General Obligation Housing Bonds, Series
1990A (as authorized by the eligible electors voting at the City's special election held on
February 13, 1990), which bonds were refunded by the issuance of the Series 1993B
Bonds, which were subsequently refunded by the issuance of the Series 2003 Bonds;
(d) the funds to be placed in the Series 2003 Refunded Bonds Bond Account
are in an amount which shall be sufficient to pay the Series 2003 Refunded Bonds
Requirements in accordance with the provisions hereof;
(e) the Series 2003 Refunded Bonds are subject to redemption prior to
maturity, at the option of the City, on December 1, 2011 and on any date thereafter, at a
redemption price of par plus accrued interest to the date of redemption;
(1) the net proceeds of the Bonds will be deposited into the Series 2003
Refunded Bonds Bond Account, which is, in accordance with Section 11 -56- 108(2),
Colorado Revised Statutes, as amended, an escrow or trust that will be used only to pay
the principal of, interest on and redemption price of the Series 2003 Refunded Bonds on
the Series 2003 Redemption Date;
(g) the Series 2003 Refunded Bonds Paying Agent is hereby directed to
deposit in trust, from proceeds of the Bonds, the gross amount necessary for the payment
and cancellation of the Series 2003 Refunded Bonds on the Series 2003 Redemption Date
in accordance with the provisions of the Series 2003 Refunded Bonds Ordinance in the
section thereof entitled "Defeasance." (In addition, the City will transfer legally available
moneys of the City in an amount equal to the principal and interest due on the 2011
Maturity on December 1, 2011, which funds shall be deposited with the Series 2003
Paying Agent concurrently with the issuance and delivery of the Bonds.)
(h) as required by Section 11 -56- 104.5, Colorado Revised Statutes, as
amended: (i) the Original Purchaser, simultaneously with the submission to the City of its
proposal to refund the Series 2003 Refunded Bonds, disclosed, in writing, to the City
Council, the entire income, from all sources, which it anticipated receiving if its proposal
were to be accepted, specifying all such sources and amounts, as well as disclosing all
expenses which it anticipated the City would incur as a part of the refunding transaction;
(ii) the City Council will require, as a condition to the issuance of the Bonds, that the
Original Purchaser provide to the City Council (A) an update of the information
described in clause (i) above and (B) a comparison of annual debt service requirements
before and after the refunding, by year and amount, including funds which are required in
addition to bond proceeds, showing the present value of all annual differences in debt
service requirements, using as a discount factor the net effective interest rate of the
Bonds, all computed from the date on which the transaction is closed, including funds
provided by the City as a reduction of, or an addition to, debt service requirements and
showing funds provided by the City in excess of accrued principal and interest, and
earnings on the funds, over the life of, and compounded at the net effective interest rate
of, the Bonds;
4821 - 1868 - 9802.2 15
(i) the issuance of the Bonds will not cause the City to exceed its debt limit
under the Charter or applicable State law;
(j) the City has entered into a DTC Letter of Representations which will
govern the book -entry registration system for the Bonds;
(k) it is in the best interest of the City and its residents that the Bonds be
authorized, sold, issued and delivered at the time, in the manner and for the purposes
provided in this Ordinance;
(1) the City elects to apply the provisions of the Part 2 of Article 57 of Title
11, Colorado Revised Statutes, as amended; and
(m) the issuance of the Bonds and all procedures undertaken incident thereto
are in full compliance and conformity with all applicable requirements, provisions and
limitations prescribed by the Constitution and laws of the State and the City, including
the Charter, and all conditions and limitations of the Charter and other applicable law
relating to the issuance of the Bonds have been satisfied.
Section 17. Federal Income Tax Covenants. For purposes of ensuring that the interest
on the Bonds is and remains excluded from gross income for federal income tax purposes, the
City hereby covenants that:
(a) Prohibited Actions. The City will not use or permit the use of any
proceeds of the Bonds or any other funds of the City from whatever source derived,
directly or indirectly, to acquire any securities or obligations and shall not take or permit
to be taken any other action or actions, which would cause any Bond to be an "arbitrage
bond" within the meaning of Section 148 of the Code, or would otherwise cause the
interest on any Bond to be includible in gross income for federal income tax purposes.
(b) Affirmative Actions. The City will at all times do and perform all acts
permitted by law that are necessary in order to assure that interest paid by the City on the
Bonds shall not be includible in gross income for federal income tax purposes under the
Code or any other valid provision of law. In particular, but without limitation, the City
represents, warrants and covenants to comply with the following rules unless it receives
an opinion of Bond Counsel stating that such compliance is not necessary: (i) gross
proceeds of the Bonds will not be used in a manner that will cause the Bonds to be
considered "private activity bonds" within the meaning of the Code; (ii) the projects
which were financed with the proceeds of (A) the Series 1992A Bonds, (B) the City's
General Obligation Housing Bonds, Series 1989A (which bonds were refunded by the
issuance of the Series 1993A Bonds), and (C) the City's General Obligation Housing
Bonds, Series 1990A (which bonds were refunded by the issuance of the Series 1993B
Bonds) will not be used in a manner that will cause the Bonds to be considered "private
activity bonds" within the meaning of the Code; (iii) the Bonds are not and will not
become directly or indirectly "federally guaranteed"; and (iv) the City will timely file an
Internal Revenue Service Form 8038 -G with respect to the Bonds, which shall contain the
information required to be filed pursuant to Section 149(e) of the Code.
4821 - 1868 - 9802.2 16
(c) Tax Letter of Instructions. The City will comply with the Tax Letter of
Instructions delivered to it on the date of issuance of the Bonds, including but not limited
by the provisions of the Tax Letter of Instructions regarding the application and
investment of Bond proceeds, the deposits to the Rebate Account, the disbursements, the
investments and the retention of records described in the Tax Letter of Instructions;
provided that, in the event the Tax Letter of Instructions are superseded or amended by
new Tax Letter of Instructions drafted by, and accompanied by an opinion of, Bond
Counsel stating that the use of the new Tax Letter of Instructions will not cause the
interest on the Bonds to become includible in gross income for federal income tax
purposes, the City will thereafter comply with the new Tax Letter of Instructions.
(d) Designation of Bonds as Qualified Tax Exempt Obligations. The City
hereby designates the Bonds as qualified tax- exempt obligations within the meaning of
Section 265(b)(3) of the Code. The City covenants that the aggregate face amount of all
tax- exempt obligations issued by the City, together with governmental entities which
derive their issuing authority from the City or are subject to substantial control by the
City, shall not be more than $10,000,000 during calendar year 2011. The City recognizes
that such tax- exempt obligations include notes, leases, loans and warrants, as well as
bonds. The City further recognizes that any bank, thrift institution or other financial
institution that owns the Bonds will rely on the City's designation of the Bonds as
qualified tax- exempt obligations for the purpose of avoiding the loss of 100% of any
otherwise available interest deduction attributable to such institution's tax- exempt
holdings.
(e) Rebate Account. There is hereby created the "City of Aspen, Colorado,
General Obligation Refunding Bonds Series 2011 Rebate Account" (the "Rebate
Account "). The Rebate Account shall be funded pursuant to the Section hereof entitled
"Investments" in the amounts and at the times provided in the Tax Letter of Instructions
from earnings from the investment of moneys on deposit in the Bond Account and
moneys separately accounted for to pay costs of the Refunding Project, from earnings on
moneys on deposit in the Rebate Account and other legally available moneys.
Section 18. Defeasance. Any Bond shall not be deemed to be Outstanding hereunder if
it shall have been paid and cancelled or if Defeasance Securities shall have been deposited in
trust for the payment thereof (whether upon or prior to the maturity of such Bond, but if such
Bond is to be paid prior to maturity, the City shall have given the Paying Agent irrevocable
directions to give notice of redemption as required by this Ordinance, or such notice shall have
been given in accordance with this Ordinance). In computing the amount of the deposit
described above, the City may include the maturing principal of and interest to be earned on the
Defeasance Securities. If less than all the Bonds are to be defeased pursuant to this Section, the
City, in its sole discretion, may select which of the Bonds shall be defeased.
Section 19. Events of Default. Each of the following events constitutes an Event of
Default:
(a) Nonpayment of Principal or Interest. Failure to make any payment of
principal of or interest on the Bonds when due;
4821 - 1868 - 9802.2 17
(b) Breach or Nonperformance of Duties. Breach by the City of any
material covenant set forth herein or failure by the City to perform any material duty
imposed on it hereunder and continuation of such breach or failure for a period of 60 days
after receipt by the Mayor of written notice thereof from the Paying Agent or from the
Owners of at least 10% of the aggregate amount of the Bond Obligation, provided that
such 60 day period shall be extended so long as the City has commenced and continues a
good faith effort to remedy such breach or failure;
(c) Bankruptcy or Receivership. An order of decree by a court of competent
jurisdiction declaring the City bankrupt under federal bankruptcy law or appointing a
receiver of all or any material portion of the City's assets or revenues is entered with the
consent or acquiescence of the City or is entered without the consent or acquiescence of
the City but is not vacated, discharged or stayed within 30 days after it is entered.
Section 20. Remedies for Events of Default.
(a) Remedies. Upon the occurrence and continuance of any Event of Default,
the Owners of not less than 25% of the aggregate amount of the Bond Obligation,
including, without limitation, a trustee or trustees therefor, may proceed against the City
to protect and to enforce the rights of the any Owners under this Ordinance by
mandamus, injunction or by other suit, action or special proceedings in equity or at law,
in any court of competent jurisdiction: (i) for the payment of interest on any installment
of principal of any Bond that was not paid when due at the interest rate borne by such
Bond, (ii) for the specific performance of any covenant contained herein, (iii) to enjoin
any act that may be unlawful or in violation of any right of any Owner of any Bond,
(iv) for any other proper legal or equitable remedy or (v) any combination of such
remedies or as otherwise may be authorized by applicable law; provided, however, that
acceleration of any amount not yet due on the Bonds according to their terms shall not be
an available remedy. All such proceedings at law or in equity shall be instituted, had and
maintained for the equal benefit of all Owners of Bonds then Outstanding.
(b) Failure to Pursue Remedies Not a Release; Rights Cumulative. The
failure of any Owner of any Outstanding Bond to proceed in accordance with subsection
(a) of this Section shall not relieve the City of any liability for failure to perform or carry
out its duties under this Ordinance. Each right or privilege of any such Owner (or trustee
therefor) is in addition and is cumulative to any other right or privilege, and the exercise
of any right or privilege by or on behalf of any Owner shall not be deemed a waiver of
any other right or privilege of such Owner.
Section 21. Amendment of Ordinance.
(a) Amendments Permitted without Notice to or Consent of Owners. The
City may, without the consent of or notice to the Owners of the Bonds, adopt one or more
ordinances amending or supplementing this Ordinance (which ordinances shall thereafter
become a part hereof) for any one or more or all of the following purposes:
4821 -1868- 9802.2 18
(i) to cure any ambiguity or to cure, correct or supplement any defect
or inconsistent provision of this Ordinance;
(ii) to subject to this Ordinance or pledge to the payment of the Bonds
additional revenues, properties or collateral;
(iii) to institute or terminate a book -entry registration system for the
Bonds or to facilitate the designation of a substitute securities depository with
respect to such a system;
(iv) to maintain the then existing or to secure a higher rating of the
Bonds by any nationally recognized securities rating agency; or
(v) to make any other change that does not materially adversely affect
the Owners of the Bonds.
(b) Amendments Requiring Notice to and Consent of Owners. Except for
amendments permitted by subsection (a) of this Section, this Ordinance may only be
amended (i) by an ordinance of the City amending or supplementing this Ordinance
(which, after the consents required therefor, shall become a part hereof) and (ii) with the
written consent of the Owners of at least 66 2/3% of the aggregate amount of the Bond
Obligation; provided that any amendment that makes any of the following changes with
respect to any Bond shall not be effective without the written consent of the Owner of
such Bond: (A) a change in the maturity of such Bond; (B) a reduction of the interest rate
on such Bond; (C) a change in the terms of redemption of such Bond; (D) a delay in the
payment of principal of, premium, if any, or interest on such Bond; (E) a reduction of the
Bond Obligation the consent of the Owners of which is required for an amendment to this
Ordinance; or (F) the establishment of a priority or preference for the payment of any
amount due with respect to any other Bond over such Bond.
(c) Procedure for Notifying and Obtaining Consent of Owners. Whenever
the consent of an Owner or Owners of Bonds is required under subsection (b) of this
Section, the City shall mail a notice to such Owner or Owners at their addresses as set
forth in the registration books maintained by the Paying Agent and to the Original
Purchaser, which notice shall briefly describe the proposed amendment and state that a
copy of the amendment is on file in the office of the City for inspection. Any consent of
any Owner of any Bond obtained with respect to an amendment shall be in writing and
shall be final and not subject to withdrawal, rescission or modification for a period of 60
days after it is delivered to the City unless another time period is stated for such purpose
in the notice mailed pursuant to this subsection.
Section 22. Appointment and Duties of Paying Agent. The Paying Agent identified in
the Section hereof entitled "Definitions" is hereby appointed as paying agent, registrar and
authenticating agent for the Bonds unless and until the City removes it as such and appoints a
successor Paying Agent, in which event such successor shall automatically succeed to the duties
of the Paying Agent hereunder and its predecessor shall immediately turn over all its records
regarding the Bonds to such successor. The Paying Agent, by accepting its duties as such, agrees
4821 - 1868- 9802.2 19
to perform all duties and to take all actions assigned to it hereunder in accordance with the terms
hereof.
Section 23. Delegation and Parameters.
(a) The City Council hereby delegates to the Sale Delegate the authority to
determine and set forth in the Sale Certificate: (i) the matters set forth in subsection (b) of
this Section, subject to the applicable parameters set forth in subsection (c) of this
Section; and (ii) any other matters that, in the judgment of the Sale Delegate, are
necessary or convenient to be set forth in the Sale Certificate and are not inconsistent
with the parameters set forth in subsection (c) of this Section.
(b) The Sale Certificate shall set forth the following matters and other matters
permitted to be set forth therein pursuant to subsection (a) of this Section, but each such
matter must fall within the applicable parameters set forth in subsection (c) of this
Section:
(i) the date on which the Bonds will be issued, which shall be the
Dated Date;
(ii) the aggregate principal amount of the Bonds;
(iii) the principal amount of the Bonds maturing in each year;
(iv) the interest payment dates;
(v) the rate of interest;
(vi) the prices at which the Bonds will be sold pursuant to the Bond
Purchase Agreement;
(vii) the principal amounts, if any, of Bonds subject to mandatory
sinking fund redemption, and the years in which such Bonds will be subject to
such redemption.
(c) The authority delegated to the Sale Delegate by this Section shall be
subject to the following parameters:
(i) in no event shall the Sale Delegate be authorized to execute the
Sale Certificate and Bond Purchase Agreement after the date that is 180 days after
the date of adoption of this Ordinance and in no event may the Bonds be issued
after such date, absent further authorization by the City Council;
(ii) the aggregate principal amount of the Bonds shall not exceed
$2,500,000;
(iii) the final maturity of the Bonds shall be no later than December 1,
2017; and
4821 - 1868 - 9802.2 20
(iv) the net effective interest rate on the Bonds shall not exceed the net
effective interest rate of the Refunded Bonds and the debt service on the Bonds
shall represent a net present value savings, as compared to the Refunded Bonds,
of not less than 3.00 %.
Section 24. Authorization to Execute Documents. For a period of 180 days following
the adoption of this Ordinance, the City Council authorizes the Sale Delegate to execute the Sale
Certificate and to execute the Bond Purchase Agreement in accordance with the provisions
hereof'. The Mayor or City Clerk, or any other duly authorized officer of the City, shall, and they
are hereby authorized and directed to, take all actions necessary or appropriate to effectuate the
provisions of this Ordinance, including, but not limited to, the execution of the Paying Agent
Agreement and the Continuing Disclosure Undertaking, in substantially the forms presented to
this meeting of the City Council, with such changes therein, if any, not inconsistent herewith, as
are approved by the City (which, once executed by the appropriate City official, shall constitute
conclusive evidence of approval of the City), a "Tax Compliance Certificate" or similar
certificate describing the City's expectations regarding the use and investment of proceeds of the
Bonds and other moneys, an Internal Revenue Service Form 8038 -G with respect to the Bonds,
and all other documents and certificates necessary or desirable to effectuate the issuance of the
Bonds, the investment of proceeds of the Bonds and the other transactions contemplated hereby.
The execution by the Mayor or Mayor Pro Tem of the City, the Sale Delegate or any other duly
authorized officer of the City of any document authorized herein shall be conclusive proof of the
approval by the City of the terms thereof.
Section 25. Approval of Official Statement. The City Council hereby approves the
distribution and use of the Preliminary Official Statement relating to the Bonds in connection
with the offering of the Bonds and authorizes and directs the City staff to prepare a final Official
Statement for use in connection with the sale of the Bonds in substantially the form thereof
presented to the City Council at the meeting at which this Ordinance is adopted, with such
changes therein, if any, not inconsistent herewith, as are approved by the City Attorney of the
City. The Mayor or Mayor Pro Tem is hereby authorized and directed to execute the final
Official Statement.
Section 26. Application of Supplemental Act. The City Council specifically elects to
apply all of the provisions of Title 11, Article 57, Part 2, C.R.S. (as previously defined, the
"Supplemental Act"), to the Bonds.
Section 27. Limitation of Actions. Pursuant to Section 11 -57 -212, C.R.S., no legal or
equitable action brought with respect to any legislative acts or proceedings in connection with
the authorization or issuance of the Bonds shall be commenced more than thirty days after the
authorization of the Bonds.
Section 28. Events Occurring on Days That Are Not Business Days. Except as
otherwise specifically provided herein with respect to a particular payment, event or action, if
any payment to be made hereunder or any event or action to occur hereunder which, but for this
Section, is to be made or is to occur on a day that is not a Business Day, such payment, event or
action shall instead be made or occur on the next succeeding day that is a Business Day with the
4821 - 1868 - 9802.2 21
same effect as if it was made or occurred on the date on which it was originally scheduled to be
made or occur.
Section 29. Ordinance Is Contract with Owners of Bonds and Irrepealable. After
the Bonds have been issued, this Ordinance shall be and remain a contract between the City and
the Owners of the Bonds and shall be and remain irrepealable until all amounts due with respect
to the Bonds shall be fully paid, satisfied and discharged and all other obligations of the City
with respect to the Bonds shall have been satisfied in the manner provided herein.
Section 30. Headings, Table of Contents and Cover Page. The headings to the
various sections and subsections to this Ordinance, and the cover page and table of contents that
appear at front of this Ordinance, have been inserted solely for the convenience of the reader, are
not a part of this Ordinance and shall not be used in any manner to interpret this Ordinance.
Section 31. Severability. It is hereby expressly declared that all provisions hereof and
their application are intended to be and are severable. In order to implement such intent, if any
provision hereof or the application thereof is determined by a court or administrative body to be
invalid or unenforceable, in whole or in part, such determination shall not affect, impair or
invalidate any other provision hereof or the application of the provision in question to any other
situation; and if any provision hereof or the application thereof is determined by a court or
administrative body to be valid or enforceable only if its application is limited, its application
shall be limited as required to most fully implement its purpose.
Section 32. Repeal of Inconsistent Ordinances. All ordinances, or parts thereof, that
are in conflict with this Ordinance, are hereby repealed.
Section 33. Ratification of Prior Actions. All actions heretofore taken (not
inconsistent with the provisions of this Ordinance or the Charter) by the City Council or by the
officers and employees of the City directed toward the issuance of the Bonds for the purposes
herein set forth are hereby ratified, approved and confirmed.
4821 - 1868 - 9802.2 22
INTRODUCED, READ, APPROVED ON FIRST READING AND ORDERED
PUBLISHED at a regular meeting of the City Council of the City of Aspen, Colorado, on August
_, 2011, as provided by law, by the City Council.
[SEAL] By
Mayor
Attest:
By
City Clerk
Published In:
Date of Publication:
FINALLY ADOPTED AND APPROVED ON SECOND READING AND ORDERED
PUBLISHED at a regular meeting of the City Council of the City of Aspen, Colorado, on August
_, 2011, as provided by law, by the City Council.
[SEAL] By
Mayor
Attest:
By
City Clerk
Published In:
Date of Publication:
[Signature page to Bond Ordinance]
4821 -1868- 9802.2
APPENDIX A
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF COLORADO
No. R -_ $
CITY OF ASPEN, COLORADO
GENERAL OBLIGATION REFUNDING BOND
SERIES 2011
INTEREST RATE: MATURITY DATE: ORIGINAL DATED CUSIP:
DATE:
December 1, October , 2011
REGISTERED OWNER: * *CEDE & CO. **
Tax Identification Number: 13- 2555119
PRINCIPAL SUM: ** DOLLARS **
The City of Aspen, Colorado (the "City "), a legally and regularly created, established,
organized and existing municipal corporation under the provisions of Article XX of the
Constitution of the State of Colorado (the "State ") and the home rule charter of the City (the
"Charter ") and political subdivision of the State, for value received, hereby promises to pay to
the order of the registered owner named above, or registered assigns, the principal sum stated
above on the maturity date stated above, with interest on such principal sum from the original
dated date stated above at the interest rate per annum stated above (calculated based on a 360 -
day year of twelve 30 -day months), payable on June 1 and December 1 of each year,
commencing December 1, 2011. The principal of and premium, if any, on this Bond are payable
to the registered owner hereof upon presentation and surrender of this Bond at the principal
office of UMB Bank, n.a., as Paying Agent (the "Paying Agent "), in Denver, Colorado. Interest
on this Bond is payable by check or draft of the Paying Agent mailed on the Interest Payment
Date to the registered owner hereof as of the fifteenth day of the month (whether or not such day
is a Business Day, as defined in the below- mentioned Ordinance) preceding the month in which
such Interest Payment Date occurs; provided that, interest payable to the registered owner of this
Bond may be paid by any other means agreed to by such registered owner and the Paying Agent
that does not require the City to make moneys available to the Paying Agent earlier than
otherwise required under the Ordinance or increase the costs borne by the City under the
Ordinance; provided further, that, so long as Cede & Co. is the registered owner of this Bond, the
principal of, premium, if any, and interest on this Bond shall be paid by wire transfer to Cede &
Co, as nominee of The Depository Trust Company ( "DTC "). Any payment of principal of or
4821 -1868- 9802
interest on this Bond that is due on a day that is not a Business Day (as defined in the below -
mentioned Ordinance) shall be made on the next succeeding day that is a Business Day with the
same effect as if made on the day on which it was originally scheduled to be made. All
payments of principal of, premium, if any, and interest on this Bond shall be made in lawful
money of the United States of America.
This Bond is part of an issue of general obligation bonds of the City designated City of
Aspen, Colorado, General Obligation Refunding Bonds, Series 2011, issued in the principal
amount of $ (the "Bonds "). The Bonds have been issued pursuant to, under the
authority of, and in full conformity with, the State Constitution and the Charter, and the laws of
the State, including, in particular, Part 2 of Article 57 of Title 11, Colorado Revised Statutes, as
amended, and Article 56 of Title 11, Colorado Revised Statutes, as amended, and pursuant to an
ordinance (the "Ordinance ") adopted by the City Council of the City. Capitalized terms used but
not defined in this Bond have the meaning assigned to them in the Ordinance. THE
ORDINANCE CONSTITUTES THE CONTRACT BETWEEN THE REGISTERED OWNER
OF THIS BOND AND THE CITY. THIS BOND IS ONLY EVIDENCE OF SUCH
CONTRACT AND, AS SUCH, IS SUBJECT IN ALL RESPECTS TO THE TERMS OF THE
ORDINANCE, WHICH SUPERSEDES ANY INCONSISTENT STATEMENT IN THIS
BOND.
The Bonds have been issued by the City for the purpose of providing funds for the
Refunding Project described in the Ordinance. The Bonds are general obligations of the City and
the full faith and credit of the City are pledged for the punctual payment of the principal of and
interest on the Bonds. For the purpose of paying the principal of, premium, if any, and interest
on the Bonds when due, respectively, the City Council shall, before such time provided for by
law for levying other City taxes, annually determine a rate of levy for general ad valorem taxes,
without limitation as to rate or amount, on all of the taxable property within the City, that will be
sufficient, when combined with the amount of the Available Fund Revenues projected to be
transferred to the Bond Account, if any, and other moneys deposited to the Bond Account
pursuant to the Ordinance, if any, to pay the principal of, premium, if any, and interest on the
Bonds when due, respectively, whether at maturity or upon earlier redemption.
Notice of any redemption of Bonds shall be given by the Paying Agent by sending a copy
of such notice by first -class, postage prepaid mail, not less than 30 days prior to the redemption
date, to the Owner of each Bond being redeemed. Such notice shall specify the number or
numbers of the Bonds so to be redeemed (if redemption shall be in part) and the redemption date.
If any Bond shall have been duly called for redemption and if, on or before the redemption date,
there shall have been deposited with the Paying Agent in accordance with this Ordinance funds
sufficient to pay the redemption price of such Bond on the redemption date, then such Bond shall
become due and payable at such redemption date, and from and after such date interest will cease
to accrue thereon. Failure to deliver any redemption notice or any defect in any redemption
notice shall not affect the validity of the proceeding for the redemption of Bonds with respect to
which such failure or defect did not occur. Any Bond redeemed prior to its maturity by prior
redemption or otherwise shall not be reissued and shall be cancelled.
The Paying Agent shall maintain registration books in which the ownership, transfer and
exchange of Bonds shall be recorded. The person in whose name this Bond shall be registered
4821- 1868 - 9802.2 A -2
on such registration books shall be deemed to be the absolute owner hereof for all purposes,
whether or not payment on any Bond shall be overdue, and neither the City nor the Paying Agent
shall be affected by any notice or other information to the contrary. This Bond may be
transferred or exchanged at the principal operations office of the Paying Agent in Denver,
Colorado for a like aggregate principal amount of Bonds of other authorized denominations
($5,000 or any integral multiple thereof) of the same of the same type, maturity and interest rate,
upon payment by the transferee of a transfer fee, any tax or governmental charge required to be
paid with respect to such transfer or exchange and any cost of printing bonds in connection
therewith. Notwithstanding any other provision of the Ordinance, the Paying Agent shall not be
required to transfer any Bond (a) which is scheduled to be redeemed in whole or in part between
the Business Day immediately preceding the mailing of the notice of redemption and the
redemption date or (b) between the Record Date for any Interest Payment Date and such Interest
Payment Date.
The Ordinance may be amended or supplemented from time to time with or without the
consent of the registered owners of the Bonds as provided in the Ordinance.
It is hereby certified that all conditions, acts and things required by the State Constitution,
the Charter, the Acts, and the ordinances and resolutions of the City, to exist, to happen and to be
performed, precedent to and in the issuance of this Bond, exist, have happened and have been
performed, and that neither this Bond nor the other Bonds exceed any limitations prescribed by
the Constitution, the Charter, the Acts, or the ordinances or resolutions of the City.
This Bond shall not be entitled to any benefit under the Ordinance, or become valid or
obligatory for any purpose, until the Paying Agent shall have signed the certificate of
authentication hereon.
[remainder of this page intentionally left blank]
4821 -1868- 9802.2 A -3
IN WITNESS WHEREOF, the City has caused this Bond to be executed with the manual
or facsimile signature of its Mayor and attested by the manual or facsimile signature of the City
Clerk, and has caused the seal of the City to be impressed or imprinted hereon, all as of the date
set forth above.
[SEAL] CITY OF ASPEN, COLORADO
By
Mayor
Attest:
By
City Clerk
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the issue described in the within- mentioned Ordinance.
Dated: UMB BANK, N.A.,
as Paying Agent
By
Authorized Signatory
4821 -1868- 9802.2 A -4
APPROVING LEGAL OPINION
Set forth below is a true copy of the approving legal opinion of Kutak Rock LLP,
delivered on the date on which the Bonds were originally issued:
City of Aspen, Colorado
General Obligation Refunding Bonds
Series 2011
We have been engaged by City of Aspen, Colorado (the "City ") to act as bond counsel
for the issuance of its General Obligation Refunding Bonds, Series 2011 in the aggregate
principal amount of $ (the "Bonds "). The Bonds are being issued pursuant to the home
rule charter of the City (the "Charter "), the constitution and the laws of the State of Colorado (the
"State "), including, in particular, Part 2 of Article 57 of Title 11, Colorado Revised Statutes, as
amended, Article 56 of Title 11, Colorado Revised Statutes, as amended, and pursuant to an
ordinance (the "Bond Ordinance ") duly and properly adopted by the City Council in accordance
with the Charter. We have examined the constitution and the laws of the State; the provisions of
the Internal Revenue Code of 1986, as amended (the "Code "), and the regulations, rulings and
judicial decisions relevant to the opinions set forth in paragraph 3 below; the provisions of the
Securities Act of 1933, as amended, and the regulations, rulings and judicial decisions relevant to
the opinion set forth in paragraph 5 below; and such certified proceedings, certificates,
documents, opinions and other papers as we deem necessary to render this opinion. As to
questions of fact material to our opinion, we have relied upon the certified proceedings and other
certifications of public officials furnished to us without undertaking to verify the same by
independent investigation. We have assumed that the legal conclusions stated in the opinion of
the City Attorney delivered in connection with the issuance of Bonds are correct.
Based upon the foregoing, we are of the opinion, under existing law and as of the date
hereof, that:
1. The Bonds are valid and binding general obligations of the City.
2. All taxable property within the boundaries of the City is subject to ad valorem
taxation without limitation as to rate or amount to pay the principal of and the interest on the
Bonds. The City has covenanted in the Bond Ordinance to include in its annual tax levy the
principal of and interest coming due on the Bonds to the extent the necessary funds are not
provided from other sources.
3. Under the laws, regulations, rulings and judicial decisions existing on the date
hereof, interest on the Bonds (which includes any original issue discount properly allocable to
owners of certain of the Bonds) is excludable from gross income for federal income tax purposes
and is not a specific item of tax preference for purposes of the federal alternative minimum tax.
Because the City has properly designated the Bonds as "qualified tax exempt obligations" within
the meaning of Section 265(b)(3) of the Code, in the case of certain banks, thrift institutions or
other financial institutions owning the Bonds, a deduction is allowed for 80% of that portion of
such institutions' interest expense allocable to interest on the Bonds. The opinions set forth in
the preceding sentences assume the compliance by the City with certain requirements of the
4821 -1868- 9802 A -5
Code that must be met subsequent to the issuance of the Bonds. Failure to comply with such
requirements could cause such interest to be includible in gross income for federal income tax
purposes or could otherwise adversely affect such opinions, retroactive to the date of issuance of
the Bonds. The City has covenanted in the Bond Ordinance and in the Tax Compliance
Certificate executed and delivered in connection with the issuance of the Bonds to comply with
such requirements. We express no opinion regarding other federal tax consequences arising with
respect to the Bonds. We note, however, that interest on the Bonds is taken into account in
determining adjusted current earnings for purposes of the alternative minimum tax imposed on
corporations (as defined for federal income tax purposes).
4. Under State statutes existing on the date hereof, interest on the Bonds is exempt
from State taxation, except inheritance, estate and transfer taxes. We express no opinion
regarding other tax consequences arising with respect to the Bonds under the laws of the State or
any other state or jurisdiction.
5. The Bonds are exempt from registration under the Securities Act of 1933, as
amended.
The rights of the holders of the Bonds and the enforceability of the Bonds and the
Ordinance may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by equitable principles, whether considered
at law or in equity, by the exercise by the State and its governmental bodies of the police power
inherent in the sovereignty of the State and by the exercise by the United States of America of
the powers delegated to it by the Constitution of the United States of America.
We express no opinion herein as to any matter not specifically set forth above. In
particular, but without limitation, we express no opinion herein as to the accuracy, adequacy or
completeness of the Official Statement relating to the Bonds or as to the validity of any
obligation of the City other than the Bonds.
This opinion is given as of the date hereof and we assume no obligation to update, revise
or supplement this opinion to reflect any facts or circumstances that may hereafter come to our
attention or any changes in law that may hereafter occur.
This opinion may be relied upon solely by the addressees hereto in connection with the
issuance of the Bonds. This opinion may not be relied upon for any other purpose or by any
person other than the addressees.
Respectfully submitted,
/s/ KUTAK ROCK LLP
I, the undersigned City Clerk of the City of Aspen, Colorado, do hereby certify that the
foregoing approving opinion of Kutak Rock LLP, Denver, Colorado, is a true and complete copy
of a manually executed and dated copy thereof on file in the official records of the City.
By: , City Clerk
4821 -1868- 9802.2 A -6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
(Please print or typewrite name and address of Transferee)
(Tax Identification or Social Security No.)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a
national bank or trust company or by
a brokerage firm having a
membership in one of the major
stock exchanges.
TRANSFER FEE MAY BE REQUIRED
4821 -1868- 9802.2 A -7
PREPAYMENT PANEL
The following installments of principal (or portion thereof) of this Bond have been
prepaid in accordance with the terms of the Indenture.
Date of Principal Signature of Authorized
Prepayment Representative of the Depository
4821 -1868- 9802.2 A -8
__
KUTAK ROCK LLP
PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER _ , 2011 DRAFT 08/12/11
G
NEW ISSUE RATINGS: Moody's ""
BOOK ENTRY ONLY (See "MISCELLANEOUS— Ratings ")
o BANK QUALIFIED
.e In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the
E : Y accuracy of certain representations and continuing compliance with certain covenants, interest on the Bonds is excludable from gross income
v for federal income fax purposes and is not a specific preference item for purposes of the federal alternative minimum tax, and under existing
State statutes, the Bonds and the income therefrom are exempt from State of Colorado taxation, except inheritance, estate and transfer taxes.
° N The District has designated the Bonds as "qualified tax exempt obligations" under Section 265(b)(3) of the Internal Revenue Code of 1986, as
•° - amended. For a more complete description, see "TAX MATTERS "
$2,420,000"
CITY OF ASPEN, COLORADO
General Obligation Refunding Bonds, Series 2011
A
v Dated: Date of Delivery Due: December 1, as shown below
oY
''
� The Bonds are being issued as fully registered obligations in denominations of $5,000 or any integral multiple thereof.
0 o s Interest on the Bonds, at the rates set forth below, is payable semiannually on June 1 and December 1, commencing on
co December 1, 2011. Capitalized terms used on this cover page are defined in the Introduction to this Official Statement.
o The Depository Trust Company, New York, New York, will act as securities depository for the Bonds and payments of
o principal of and interest on the Bonds will be made by the Paying Agent, initially UMB Bank n.a., Denver, Colorado, directly to
° DTC, which will remit such payments to Participants for subsequent distribution to Beneficial Owners of the Bonds.
o .° MATURITY SCHEDULE
R c 1®
E .s ( CUSIP NO. )
m id '
y
r Maturity Date Principal Interest Maturity Date Principal Interest CUSIP
(December 1) Amount Rate Yield CUSIP 1° (December 1) Amount Rate Yield 10
N 8 2011 $30,000 2015 $405,000
° 3 ,6- —
2012 385,000 2016 415,000
2013 390,000 2017 400,000
c °
5 7. 2014 395,000
o.Y
o The Bonds are being issued for the purpose of refunding a portion of the City's outstanding Series 2003 Bonds and
8 b paying the costs of issuance of the Bonds. The Bonds are general obligations of the City and are secured by the City's full faith
e v and credit. All taxable property within the boundaries of the City is subject to ad valorem taxation without limitation as to rate or
8 1 .
E
fE in an amount sufficient to pay the principal of and interest on the Bonds when due.
`= The Bonds are not subject to redemption prior to maturity.
I~ a This cover page contains certain information for quick reference only. It is not a summary of this issue.
° ° Investors must read this entire Official Statement to obtain information essential to the making of an informed
C Z'.s
investment decision.
A .€ : L The Bonds are offered when, as, and if issued by the City and accepted by the Underwriter named below, subject to
a o prior sale, and the approval of legality and certain other matters by Kutak Rock LLP, Denver, Colorado, as Bond Counsel to the
Y _
s o City, and subject to certain other conditions. John Worcester, Esq., City Attorney, Aspen, Colorado, will pass upon certain legal
matters for the City as their general counsel. Kutak Rock LLP has acted as Special Counsel to the City for purposes of assisting
5 3 the City with the preparation of this Official Statement. Delivery of the Bonds is expected through the facilities of DTC on or
€ about October 13, 2011.
N = -
5 g STIFEL, NICOLAUS & COMPANY, INCORPORATED
o y This Official Statement is dated _ , 2011.
5 y
G o 1 The City takes no responsibility for the accuracy of CUSIP numbers, which are included solely for the convenience of owners of the Bonds.
v, _ o ® Copyright 2011, American Bankers Association, Standard & Poor's, CUSIP Service Bureau, a division of The McGraw -Hill Companies, Inc.
€ . Preliminary; subject to change,
w
° C H
V '
Gl
C .0 0
0. t
�' c •
4838- 1985 - 2810.2
i
CITY OF ASPEN, COLORADO
City Council
Mick Ireland, Mayor
Steve Skadron
Torre
Derek Johnson
Adam Frisch
City Officials
Steve H. Barwick, City Manager
Don Taylor, Director of Finance and Administration
John P. Worcester, Esq., City Attorney
Paying Agent and Registrar
UMB Bank n.a.,
Denver, Colorado
Underwriter
Stifel, Nicolaus & Company, Incorporated
Denver, Colorado
Bond Counsel
Kutak Rock LLP
Denver, Colorado
4838 -1985- 2810.2
No dealer, salesman, or other person has been authorized to give any information or to make any representation, other
than the information contained in this Official Statement, in connection with the offering of the bonds, and, if given or made,
such information or representation must not be relied upon as having been authorized by the City or the Underwriter. The
information in this Official Statement is subject to change without notice, and neither the delivery of this Official Statement nor
any sale hereunder will, under any circumstances, create any implication that there has been no change in the affairs of the City
since the date hereof. This Official Statement does not constitute an offer or solicitation in any jurisdiction in which such offer or
solicitation is not authorized, or in which any person making such offer or solicitation is not qualified to do so, or to any person to
whom it is unlawful to make such offer or solicitation. The information set forth herein has been fumished by the City and
obtained from other sources which are believed to be reliable. The Underwriter has provided the following sentence for inclusion
in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as
part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this
transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
TABLE OF CONTENTS
INTRODUCTION 1 DEBT STRUCTURE 26
THE BONDS 4
Required Elections 26
Description 4 General Obligation Debt 26
Prior Redemption 4 General Obligation Debt Ratios 27
Application of Bond Proceeds 4 Estimated Overlapping General Obligation
Security for the Bonds 5 Debt 27
Debt Service Requirements 7 Revenue Obligations 28
REVENUES AVAILABLE FOR DEBT Other Obligations 29
SERVICE 8 LEGAL MATTERS 29
Ad Valorem Property Taxes 8 Sovereign Immunity 29
Ad Valorem Property Tax Data 11 Pending and Threatened Litigation 30
THE CITY 14 Legal Representation 30
No Litigation Certificate 30
Organization and General Description 14 TAX MATTERS 30
City Powers and Functions 14 MISCELLANEOUS 32
City Council 14
Administration and Management 15 Ratings 32
City Employees 15 Underwriting 32
Asset Management Plan 15 Registration of Bonds 32
Intergovernmental Agreements 18 Continuing Disclosure Undertaking 33
Services Available to City Residents 18 Interest of Certain Persons Named in This
CITY FINANCIAL OPERATIONS 19 Official Statement 33
Independent Auditors 33
Accounting Policies 19 Additional Information 33
Major Sources of Revenues 19
Historical and Budgeted General Fund APPENDIX A —Form of Continuing Disclosure Undertaking
Financial Information 20 APPENDIX B— Audited General Purpose Financial Statements
Management Discussion of Recent Financial of the City as of and for the Year Ended
Trends 24 December 31, 2010
Deposit and Investment of City Funds 24 APPENDIX C— Economic and Demographic Information
Constitutional Amendment Limiting Taxes APPENDIX D —Form of Bond Counsel Opinion
and Spending 24 APPENDIX E —Book Entry Only System
Retirement Plans 25
Insurance Coverage 25
Neither the Securities and Exchange Commission nor the Securities Regulatory Authority of any state has approved or
disapproved the Bonds or this Official Statement. Any representation to the contrary is unlawful.
4838 -1985- 2810.2
INDEX OF TABLES
TABLE Page
1 Debt Service Requirements 8
II History of City's Mill Levy 11
III History of City's Assessed Valuation 11
IV Preliminary Uncertified 2011 Assessed and Actual Valuation of
Classes of Property in the City 12
V Property Tax Collections for the City 12
VI 2010 Largest Taxpayers Within the City 13
VII Sample Total 2010 Mill Levy 14
VIII Major Revenue Sources 19
IX Historical Sales Tax Collections 20
X Historical Real Estate Transfer Tax Collections 20
XI History of General Fund Revenues, Expenditures and Changes in Fund Balances 22
XII General Fund Budget Summary and Comparison 24
XIII General Obligations of the City 27
XIV Historical General Obligation Debt Ratios 28
XV Estimated Overlapping General Obligation Debt 29
XVI Schedule of City's Revenue Obligations Outstanding 29
4838 - 1985 - 2810.2 11
REGIONAL MAP
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City of Aspen
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• 4838 -1985- 2810.2
I
INTRODUCTION
This Official Statement is furnished in connection with the issuance by the City of Aspen,
Colorado (the "City"), of its $2,420,000' General Obligation Refunding Bonds, Series 2011 (the
"Bonds ") dated the date of delivery. The offering of the Bonds is made only by way of this Official
Statement, which supersedes any other information or materials used in connection with the offer or sale
of the Bonds. This Official Statement speaks only as of its date, and the information contained herein is
subject to change.
The following introductory material is only a brief description of and is qualified by the more
complete information contained throughout this Official Statement. Detachment or other use of this
"INTRODUCTION" without the entire Official Statement, including the cover page and appended
information, is unauthorized.
Issuer The City was incorporated in 1879 under the applicable provisions of the
Constitution of Colorado, and became a home rule municipality in 1972
upon adoption of its home rule city charter (the "City Charter "). The
City is located in central Colorado, situated within the Rocky Mountains
approximately 205 miles west of Denver. The City encompasses
approximately four square miles and serves as the county seat of Pitkin
County (the "County"). The current year -round population of the City is
approximately 6,658. The City's population increases to as high as
25,000 during peak ski and summer seasons with both seasonal residents
and visitors. The City's 2010 assessed valuation is $1,686,426,640. The
City's uncertified preliminary 2011 assessed valuation as reported by the
County on July 26, 2011 is $1,289,528,910. Such valuation is subject to
change prior to preliminary certification on August 25, 2011, and again
prior to final certification on December 10, 2011. See "THE CITY,"
"REGIONAL MAP" and "APPENDIX C— Economic and Demographic
Information."
Security The Bonds are general obligations of the City, and are secured by the
City's full faith and credit. All taxable property within the boundaries of
the City is subject to ad valorem property taxation without limitation as
to rate or amount to pay the principal of and interest on the Bonds when
due. See "THE BONDS — Security for the Bonds" and "REVENUES
AVAILABLE FOR DEBT SERVICE" herein.
Purpose The Bonds are being issued for the purpose of refunding the City's
outstanding general obligation debt and paying the costs of issuance of
the Bonds. See "THE BONDS — Application of Bond Proceeds."
Payment
Provisions The Bonds mature and bear interest (computed on the basis of a 360 day
year of twelve 30 day months) at the rates set forth on the cover page
hereof. Interest on the Bonds is payable semiannually on June 1 and
December 1 each year, commencing on December 1, 2011. Payments
for the principal of and interest on the Bonds will be made as described
in "APPENDIX E— Book -Entry-Only System."
Preliminary; subject to change.
4838 -1985- 2810.2 2
Book- Entry-
Only Registration The Bonds will be issued in fully registered form and will be registered
initially in the name of "Cede & Co." as nominee for The Depository
Trust Company, New York, New York ( "DTC "), a securities depository.
Beneficial ownership interests in the Bonds may be acquired in principal
denominations of $5,000 or integral multiples thereof through
participants in the DTC system (the "Participants "). Such beneficial
ownership interests will be recorded in the records of the Participants.
Persons for which Participants acquire interests in the Bonds (the
"Beneficial Owners ") will not receive certificates evidencing their
interests in the Bonds so long as DTC or a successor securities
depository acts as the securities depository with respect to the Bonds. So
long as DTC or its nominee is the registered owner of the Bonds,
payments of principal, premium, if any, and interest on the Bonds, as
well as notices and other communications made by or on behalf of the
City pursuant to the Bond Ordinance, will be made to DTC or its
nominee only. Disbursement of such payments, notices, and other
communications by DTC to Participants, and by Participants to the
Beneficial Owners, is the responsibility of DTC and the Participants
pursuant to rules and procedures established by such entities. See
"APPENDIX E— Book — Entry—Only System" for a discussion of the
operating procedures of the DTC system with respect to payments,
registration, transfers, notices, and other matters.
No Prior Redemption The Bonds are not subject to redemption prior to maturity.
Registration
and Denominations The Bonds are issued in fully registered form in denominations of $5,000
or integral multiples thereof.
Tax Status In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws,
regulations, rulings and judicial decisions and assuming the accuracy of
certain representations and continuing compliance with certain
covenants, interest on the Bonds is excludable from gross income for
federal income tax purposes and is not a specific preference item for
purposes of the federal alternative minimum tax, and under existing State
statutes, the Bonds and the income therefrom are exempt from State of
Colorado taxation, except inheritance, estate and transfer taxes. The
District has designated the Bonds as "qualified tax exempt obligations"
under Section 265(b)(3) of the Internal Revenue Code of 1986, as
amended. For a more complete description, see "TAX MATTERS."
Authority for
Issuance The Bonds are issued in full conformity with the constitution and laws of
the State of Colorado, the City Charter and pursuant to an authorizing
ordinance (the "Bond Ordinance ") adopted by the Aspen City Council
(the "Council ").
Financial
Statements The audited general purpose financial statements of the City as of and for
the fiscal year ended December 31, 2010, including the report of
4838 -1985- 2810.2 3
McMahan and Associates, Certified Public Accountants and Consultants,
Avon, Colorado, are attached hereto as Appendix B, being the most
recent audited financial statements available for the City.
Delivery
Information The Bonds are offered when, as, and if issued by the City and accepted
by Stifel, Nicolas & Company, Incorporated (the "Underwriter "), subject
to prior sale and the approving legal opinion of Bond Counsel. It is
expected that the Bonds will be available for delivery through the
facilities of DTC on or about October 13, 2011.
Exchange and
Transfer While the Bonds remain in book - entry-only form, transfer of ownership
by Beneficial Owners (as defined by the rules of DTC, defined herein)
may be made as described in "APPENDIX E— Book – Entry–Only
System."
Debt Ratios The following are selected City general obligation debt ratios upon
issuance and delivery of the Bonds.
City 2010 Assessed Valuation' $1,686,426,640
City 2010 Statutory "Actual" Valuation 1 $15,604,839,250
City Uncertified Preliminary 2011 Assessed Valuation 1.2 $1,289,528,91
City Uncertified Preliminary 2011 Statutory "Actual" Valuation 1.2 $ 11,617,349,350
City General Obligation Debt Outstanding Upon Issuance of the Bonds $14,045,000
Estimated Population 6,658
City Debt as a Ratio of:
2010 Assessed Valuation l ' * 0.83%
2010 Statutory "Actual" Valuation 1.* 0.09%
Uncertified Preliminary 2011 Assessed Valuation •2•r 1.09%
Uncertified Preliminary 2011 Statutory "Actual" Valuation 1. * 0.12%
City Debt Per Capita $2,109
Estimated Overlapping General Obligation Debt $79,764,507
Sum of City and Overlapping Debt $93,809,507
City and Overlapping Debt as a Ratio of:
2010 Assessed Valuation 1, * 5.56%
2010 Statutory "Actual" Valuation l ' * 0.60%
Uncertified Preliminary 2011 Assessed Valuation 1. 7.27%
Uncertified Preliminary 2011 Statutory "Actual" Valuation 1 2 • • 0.81%
City and Overlapping Debt Per Capita $14,090
For definitions of and descriptions of the methodology used in computing assessed valuation, statutory "actual"
value, estimated population, general obligation debt outstanding, and estimated overlapping general obligation debt,
see "THE BONDS — Security for the Bonds," "REVENUES AVAILABLE FOR DEBT SERVICE" and "DEBT
STRUCTURE" herein.
2 Such 2011 preliminary assessed and "actual" valuations are uncertified as provided by the County Assessor on
July 26, 2011. Such valuations are subject to change prior to preliminary certification on August 25, 2011, and
again prior to final certification on December 10, 2011.
Preliminary; subject to change.
Sources: Pitkin County Assessor's Office, the City, and individual overlapping entities
4838 -1985- 2810.2 4
ALL OF THE SUMMARIES OF THE STATUTES, RESOLUTIONS, ORDINANCES,
OPINIONS, CONTRACTS, AGREEMENTS AND DOCUMENTS DESCRIBED IN THIS OFFICIAL
STATEMENT ARE SUBJECT TO THE ACTUAL PROVISIONS OF SUCH DOCUMENTS. The
summaries do not purport to be complete statements of such provisions and reference is made to such
documents, copies of which are either publicly available or available upon request and the payment of a
reasonable copying, mailing, and handling charge from: City of Aspen, 130 South Galena, Aspen,
Colorado 81611, Telephone: (970) 920 -5000; or Stifel, Nicolaus & Company, Incorporated, 1125
Seventeenth Street, Suite 1600, Denver, Colorado 80202, Telephone (303) 296 -2300.
THE BONDS
Description
The total principal amount, dated date, maturity dates and interest rates of the Bonds are set forth
on the cover page hereof. Certain matters relating to the Bonds are described in detail in
"INTRODUCTION" and are not restated under this caption. These include provisions regarding
registration and denominations of the Bonds; exchange and transfer of the Bonds; payment of the
principal of, premium, if any, and interest on the Bonds; a description of the authority for issuance of the
Bonds; and information regarding delivery of the Bonds. See "INTRODUCTION" for a description of
the matters referred to in the previous sentence, as well as other information relating to the Bonds.
Prior Redemption
The Bonds are not subject to redemption prior to maturity.
Application of Bond Proceeds
The Refunding Plan. On October 29, 2003, the City issued its General Obligation Refunding
Bonds, Series 2003 (the "Series 2003 Bonds ") in the original principal amount of $7,930,000, which
Series 2003 Bonds are currently outstanding in the principal amount of $2,750,000. The Series 2003
Bonds maturing on and after December 1, 2012 (the "Refunded Bonds ") are subject to redemption prior
to maturity, at the option of the City, on December 1, 2011, and on any date thereafter at a redemption
price equal to the principal amount so redeemed plus premium and accrued interest to the redemption
date. The Refunded Bonds bear interest at rates which range from 3.50% to 3.90% per annum
Net proceeds derived from the sale of the Bonds will be used to refund the Refunded Bonds (the
Series 2003 Bonds maturing on and after December 1, 2012). The Series 2003 Bonds maturing on
December 1, 2011 (the "2011 Maturity ") are not part of the City's refunding plan. The City is to transfer
legally available moneys of the City in an amount equal to the sum of (i) the principal amount of the 2011
Maturity and (ii) all accrued but unpaid interest to December 1, 2011 on the 2011 Maturity, which funds
shall be deposited with the Refunded Bonds Paying Agent (hereafter defined) on or before the date of
issuance of the Bonds. Such funds deposited by the City, together with the net proceeds of the Bonds,
will be sufficient to pay and cancel the Series 2003 Bonds on December 1, 2011. Pursuant to the Bond
Ordinance, the Series 2003 Bonds maturing on and after December 1, 2012 are to be redeemed on
December 1, 2011 (the "Series 2003 Redemption Date ") at a redemption price equal to the principal
amount so redeemed, plus accrued interest to the Series 2003 Redemption Date (the "Series 2003
Redemption Price "). As provided in the Bond Ordinance, the City is refinancing the Series 2003 Bonds
maturing on and after December 1, 2012 at a lower interest rate and therefore advance voter approval is
not required pursuant to Section 20 of Article X of the Colorado Constitution.
4838 - 1985 - 2810.2 5
Application of Bond Proceeds. The estimated application of the proceeds of the Bonds is as follows:
SOURCES
Par amount of Bonds
Original Issue Premium
Total
USES
Deposit to Series 2003 Bonds Bond Account
Estimated costs of issuance, including underwriting
discount,' professional fees and printing costs
Total
' See "MISCELLANEOUS— Underwriting."
Security for the Bonds
General Obligation Debi. The Bonds are general obligations of the City. The full faith and
credit of the City are pledged for the payment of the principal of and interest on the Bonds. For the
purpose of paying the principal of and interest on the Bonds when due, the Council will annually
determine and certify to the Board of County Commissioners of Pitkin County a rate of levy for general
ad valorem taxes on all of the taxable property in the City, without limitation as to rate or amount, to pay
the principal of and interest on the Bonds when due.
Notwithstanding that the Bonds constitute general obligations of the City, pursuant to the Bond
Ordinance, on or before each date on which the City is required to deposit amounts with the Paying Agent
for payment of the Bonds, the City is to transfer any combination of Available Fund Revenues to the
Bond Account in an amount equal to the lesser of: (1) the principal of, premium, if any, and interest on the
Bonds due to be so deposited on such date, less any other moneys then on deposit in the Bond Account;
or (ii) the total of all Available Fund Revenues at the time of such transfer which the City, in its
discretion, elects to transfer to the Bond Account. The application of such moneys to payment of the
Bonds is in the sole discretion of the City and is not mandated by the Bond Ordinance. "Available Fund
Revenues" means, collectively, (i) the real estate transfer tax revenues and sales tax revenues that are on
deposit in the City's Housing Development Fund which are available for payment of the principal of,
premium, if any, and interest on the Bonds, (ii) moneys constituting rents or other revenues from the
operation of the City's Marolt affordable housing complex that are on deposit in the City's Marolt
Housing Fund which are available for payment of the principal of, premium, if any, and interest on the
Bonds, (iii) moneys on deposit in the City's General Fund which are available for payment of the
principal of, premium, if any, and interest on the Bonds, and (iv) moneys constituting rents or other
revenues from the operation of the City's Truscott Place affordable housing complex that are on deposit
in the City's Truscott Housing Fund and are available for payment of the principal of, premium, if any,
and interest on the Bonds after payment of, among other things, the principal of, premium, if any, and
interest on the City's General Obligation Housing Bonds Series 2001A.
The City may also use other legally available moneys other than the proceeds of the general ad
valorem property taxes covenanted to be levied pursuant to the Bond Ordinance to pay all or any portion
of the principal of or interest on the Bonds. If and to the extent such other legally available moneys are
used to pay the principal of or interest on the Bonds, the Bond Ordinance permits the City to reduce the
amount of taxes to be levied for the purpose of paying the debt service on the Bonds.
The City's obligation to pay the principal of and interest on the Bonds is on a parity with the
City's obligation to pay the principal of and interest on its other general obligation debt, including general
4838 -1985- 2810.2 6
obligation debt outstanding prior to the issuance of the Bonds and any general obligation debt issued or
incurred after the issuance of the Bonds. The Bond Ordinance does not restrict the City's ability to issue
or incur additional general obligation debt, although issuance of the general obligation debt is subject to
the same constitutional and statutory limitations that apply to the issuance of the Bonds, including, but not
limited to, constitutional and statutory provisions requiring voter approval of general obligation debt and
statutory limitations on the dollar amount of general obligation debt. For a description of the City's
outstanding general obligation debt upon issuance of the Bonds, see the caption "DEBT STRUCTURE —
General Obligation Debt" herein. The annual debt service on the Bonds is set forth in " —Debt Service
Requirements" below. For a description of certain constitutional and statutory limits on the issuance of
general obligation debt, see the captions "CITY FINANCIAL OPERATIONS —Constitutional
Amendment Limiting Taxes and Spending" and "DEBT STRUCTURE — General Obligation Debt"
herein.
Amendments to Bond Ordinance. The Bond Ordinance provides that the City may, without the
consent of or notice to the Owners of the Bonds, adopt amendments or supplements to the Bond
Ordinance for any one or more of the following purposes: (a) to cure any ambiguity, to cure, correct or
supplement any formal defect or omission or inconsistent provision contained in the Bond Ordinance, to
make any provision necessary or desirable due to a change in law, to make any provisions with respect to
matters arising under the Bond Ordinance, or to make any provisions for any other purpose if such
provisions are necessary or desirable and do not materially adversely affect the interests of the Owners of
the Bonds; (b) to subject to the Bond Ordinance or pledge to the payment of the Bonds additional
revenues, properties or collateral; and (c) to grant or confer upon the Owners of the Bonds any additional
rights, remedies, powers or authority that may be lawfully granted to or conferred upon the Owners.
Except for the foregoing, the Owners of not less than two thirds in aggregate principal amount of the
Bonds then outstanding shall have the right, from time to time, to consent to and approve the adoption by
the City of such amendatory or supplemental ordinances as shall be deemed necessary or desirable by the
City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of
the terms or provisions contained in the Bond Ordinance; provided however, that the consent of the
Owners of all the Bonds affected thereby shall be required to effect: (i) a change in the terms of the
maturity of any Bond, in the principal amount of any Bond or the rate of interest thereon, or in the terms
of prior redemption of any Bond; (ii) an impairment of the right of the Owners of the Bonds to institute
suit for the enforcement of any payment of the principal of, premium, if any, or interest on the Bonds
when due; (iii) the creation of a lien upon the Net Revenue ranking prior to the lien of the Bonds; (iv) a
privilege or priority of any Bond or any premium or interest payment over any other Bond or any
premium or interest payment; or (v) a reduction in the percentage in principal amount of the Bonds the
consent of whose Owners is required for any such amendatory or supplemental ordinance.
Bond Ordinance Irrepealable. The Bond Ordinance provides that after any of the Bonds are
issued, such ordinance shall remain irrepealable, but amendable, until the Bonds and the interest accruing
thereon shall have been fully paid, satisfied and discharged and all other obligations of the City with
respect to the Bonds shall have been satisfied in the manner provided in the Bond Ordinance.
Future Changes in Laws. Various Colorado laws and constitutional provisions apply to
obligations created by the issuance of the Bonds. There is no assurance that there will not be any change
in, interpretation of, or addition to the applicable laws, provisions and regulations which would have a
material effect, directly or indirectly, on the affairs of the City and the imposition, collection and
expenditure of ad valorem property taxes.
Limitations on Remedies Available to Owners of the Bonds. There is no bond trustee or similar
person to monitor or enforce the provisions of the Bond Ordinance. The owners of the Bonds should,
therefore, be prepared to enforce such provisions themselves if the need to do so arises. In the event of a
4838 -1985- 2810.2 7
default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of
maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds
(consisting primarily of an action in the nature of mandamus requiring the City and certain other public
officials to perform the terms of the Bond Ordinance) may have to be enforced from year to year. The
obligation to pay general ad valorem property taxes is secured by a statutory lien upon the taxed property,
but is not an obligation for which a property owner may be held personally liable in the event of a
deficiency. The owners of the Bonds cannot foreclose on property within the boundaries of the City or
sell such property in order to pay the debt service on the Bonds. See "REVENUES AVAILABLE FOR
DEBT SERVICE —Ad Valorem Property Taxes" for a description of property tax collection and
enforcement.
In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject
to limitation as set forth in Bond Counsel's opinion. The opinion will state, in part, that the obligations of
the City with respect to the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent
constitutionally applicable, to the exercise of judicial discretion in appropriate cases and to the exercise by
the State and its governmental bodies of the police power inherent in the sovereignty of the State and to
the exercise by the United States of America of the powers delegated to it by the Constitution of the
United States of America. Bankruptcy proceedings or the exercise of other powers of the federal
government, or the exercise of the police powers of the State, if initiated, could subject the owners of the
Bonds to judicial discretion and interpretation of rights in bankruptcy or otherwise, and consequently may
entail risks of delay, limitation or modification of rights. Sections 362 and 922 of the United States
Bankruptcy Code (Title 11 of the United States Code) provide that, in the event the City files a petition in
bankruptcy, the enforcement of a lien on or arising out of taxes or assessments owed will be stayed, with
the result that payments of principal of and interest on the Bonds after the City filed such petition may be
subject to a plan for the adjustment of the City's debts approved by the bankruptcy court. See
"REVENUES AVAILABLE FOR DEBT SERVICE —Ad Valorem Property Taxes" for a description of
property tax collection and enforcement.
Debt Service Requirements
Set forth in the following table are the debt service requirements for the Bonds and the City's
other outstanding general obligation debt, which consists of the City's General Obligation Housing
Bonds, Series 2001A, General Obligation Electric Utility Bonds, Series 2008 and General Obligation
Refunding Bonds, Series 2009. See "DEBT STRUCTURE — General Obligation Debt " See the cover of
this Official Statement for the actual interest rates for each maturity of the Bonds.
4838 -1985- 2810.2 8
TABLE I
Debt Service Requirements'
Other Outstanding Annual
The Bonds General Obligation Debt 2 Total
Year Principal Interest
2011 $ 30,000 $ 847,753
2012 385,000 1,059,455
2013 390,000 1,065,105
2014 395,000 1,059,955
2015 405,000 1,068,843
2016 415,000 1,065,880
2017 400,000 1,062,455
2018 -- 1,061,580
2019 -- 1,067,093
2020 -- 1,065,155
2021 -- 1,056,755
2022 -- 356,985
2023 -- 358,795
2024 -- 354,980
2025 -- 355,950
2026 -- 356,270
2027 -- 356,150
2028 -- 355,350
2029 -- 359,100
2030 -- 356,512
2031 -- 358,450
2032 -- 354,675
2033 -- 355,425
2034 -- 355,462
2035 -- 204,457
Total $242 ,000 $16.318.590
Figures have been rounded. Assumes no optional redemptions prior to maturity.
2 Includes the principal and interest of the City's other outstanding general obligation debt, which consists of the City's General
Obligation Housing Bonds, Series 2001 A, General Obligation Electric Utility Bonds, Series 2008 and General Obligation
Refunding Bonds, Series 2009. See "DEBT STRUCTURE — General Obligation Debt."
Source: The Underwriter
REVENUES AVAILABLE FOR DEBT SERVICE
The Bonds are payable from ad valorem property taxes which may be levied against all taxable
property within the City without limitation as to rate in an amount sufficient to pay the principal of and
interest on the Bonds when due. See "THE BONDS — Security for the Bonds" herein.
Ad Valorem Property Taxes
The Council has the power, subject to constitutional and statutory guidelines, to certify a levy for
collection of ad valorem taxes against all taxable property within the City. Property taxes are uniformly
levied against the assessed valuation of all taxable property within the City. The property subject to
4838 - 1985- 2810.2 9
taxation, the assessment of such property, and the property tax procedure and collections are discussed
below.
Property Tax Reduction for Senior Citizens and Disabled Veterans. On November 7, 2000 and
November 7, 2006, respectively, the electors of the State of Colorado approved Referendum A and
Referendum E, constitutional amendments granting a property tax reduction to qualified senior citizens
and qualified disabled veterans. Generally, the reduction (a) reduces property taxes for qualified senior
citizens and qualified disabled veterans by exempting 50% of the first $200,000 of actual value of
residential property from property taxation; (b) requires that the State reimburse all local governments for
any decrease in property tax revenue resulting from the reduction; and (c) excludes the State
reimbursement to local governments from the revenue and spending limits established under Article X,
Section 20 of the State Constitution. However, the Colorado State Legislature has disallowed the
qualified senior citizens exemption beginning with the 2009 levy year (2010 collection year) through the
2011 levy year (2012 collection year).
Property Subject to Taxation. Both real and personal property located within the boundaries of
the City, unless exempt, are subject to taxation by the City. Exempt property generally includes property
of the United States of America; property of the State and its political subdivisions; public libraries;
public school property; charitable property; religious property; irrigation ditches, canals and flumes;
household furnishings; personal effects; intangible personal property; inventories of merchandise and
materials and supplies which are held for consumption by a business or are held primarily for sale;
livestock; agricultural and livestock products; agricultural equipment which is used on the farm or ranch
in the production of agricultural products; and non - profit cemeteries.
Assessment of Property. All taxable property is listed, appraised and valued for assessment as of
January 1 of each year by the county assessor. The "actual" value, with certain exceptions, is determined
by the county assessor annually based on a biennially recalculated "level of value" set on January 1 of
each odd - numbered year. The "level of value" is ascertained for each two -year reassessment period from
manuals and associated data prepared and published by the State property tax administrator for the
eighteen -month period ending on the June 30 immediately prior to the beginning of each two -year
reassessment period. For example, "actual" values for the 2009 levy /2010 collection year as well as the
2010 levy /201 1 collection year are based on market data obtained from the period January 1, 2007 June
30, 2008 and "actual" values for the 2011 levy /2012 collection year are, and for the 2012 levy /2013
collection year will be, based on market data from the period January 1, 2009 June 30, 2010. The "level
of value" calculation does not change for even - numbered years. The classes of property the "actual"
value of which is not determined by a level of value include oil and gas leaseholds and lands, producing
mines and other lands producing nonmetallic minerals.
The assessed value of taxable property is then determined by multiplying the "actual" value
(determined as described in the immediately preceding paragraph) times an assessment ratio. The
assessment ratio of residential property changes from year to year based on a constitutionally mandated
requirement to keep the ratio of the assessed value of commercial property to residential property at the
same level as it was in the property tax year commencing January 1, 1985 (the "Gallagher Amendment ").
The Gallagher Amendment requires that statewide residential assessed values must be approximately 45%
of the total assessed value in the State with commercial and other assessed values making up the other
55% of the assessed values in the State. In order to maintain this 45% to 55% ratio, the commercial
assessment rate is established at 29% of the actual value of commercial property (including vacant land
and undeveloped lots) and the residential assessment rate fluctuates. Over the past 10 years the
residential ratio has decreased from 9.15% for the 2001 and 2002 levy years, to 7.96% for the 2003
through 2010 levy years.
4838 - 1985- 2810.2 10
The Colorado Legislative Council Staff's December 2010 forecast (as contained in its "Focus
Colorado: Economic and Revenue Forecast, 2010 - 2013 "), projects that the residential assessment ratio
will remain at 7.96% through the 2013 levy year (for tax collection in 2014).
Beginning in May of each year each county assessor hears taxpayers' objections to property
valuations, and the county board of equalization hears assessment appeals. The assessor is required to
complete the assessment roll of all taxable property no later than August 25 each year. The abstract of
assessment prepared therefrom is reviewed by the State property tax administrator. Assessments are also
subject to review at various stages by the State board of equalization, the State board of assessment
appeals and the State courts. Therefore, the City's assessed valuation may be subject to modification as a
result of the review of such entities. In the instance of the erroneous levy of taxes, an abatement or refund
must be authorized by the board of county commissioners; and in no case will an abatement or refund of
taxes be made unless a petition for abatement or refund is filed within two years after January 1 of the
year following the year in which the taxes were levied. Refunded or abated taxes are prorated among all
taxing jurisdictions which levied a tax against the property.
Taxation Procedure. The assessed valuation and statutory "actual" valuation of taxable property
within the City is required to be certified by the county assessor to the City no later than August 25 each
year. Such value is subject to recertification by the county assessor prior to December 10. The Council
then determines a rate of levy which, when levied upon such certified assessed valuation, and together
with other legally available revenues, will raise the amount required annually by the City for its General
Fund and Bond Redemption Fund to defray its expenditures during the ensuing fiscal year. In
determining the rate of levy, the Council must take into consideration the limitations on certain increases
in property tax revenues as described in "CITY FINANCIAL INFORMATION— Constitutional
Amendment Limiting Taxes and Spending" and "— Budgetary Process and Information." The Council
must certify the City's levy to the board of county commissioners no later than December 15.
Upon receipt of the tax levy certification of the City and other taxing entities within the county,
the Council of county commissioners levies against the assessed valuation of all taxable property within
the county the applicable property taxes. Such levies are certified by the board of county commissioners
to the county assessor, who thereupon delivers the tax list and warrant to the county treasurer for the
collection of taxes.
Property Tax Collections. Taxes levied in one year are collected in the succeeding year. Taxes
certified in 2010, for example, are being collected in 2011. Taxes are due on January 1 in the year of
collection; however, they may be paid, at the election of the taxpayer, in either one installment (not later
than the last day of April) or two equal installments (not later than the last day of February and June 15)
without interest or penalty. Taxes which are not paid within the prescribed time bear interest at the rate of
1% per month until paid. Unpaid amounts become delinquent on, and interest thereon will accrue from,
March 1 (with respect to the first installment) and June 16 (with respect to the second installment) until
the date of payment, provided that if the full amount of taxes is to be paid in a single payment, such
amount will become delinquent on May 1 and will accrue interest thereon from such date until paid. The
county treasurer collects current and delinquent property taxes, as well as any interest, penalties, and other
requirements and remits the amounts collected on behalf of the City to the City on a monthly basis.
All taxes levied on real and personal property, together with any interest and penalties prescribed
by law, as well as other costs of collection, until paid, constitute a perpetual lien on and against the taxed
property. Such lien is on a parity with the liens of other general taxes. It is the county Treasurers' duty to
enforce the collection of delinquent real property taxes by sale of the tax lien on such realty in December
of the collection year and of delinquent personal property taxes by the distraint, seizure and sale of such
property at any time after October 1 of the collection year. There can be no assurance, however, that the
4838 - 1985 - 2810.2 11
value of taxes, penalty interest and costs due on the property can be recovered by the county treasurer.
Further, the treasurer may set a minimum total amount below which competitive bids will not be
accepted, in which event property for which acceptable bids are not received will be set off to the county.
Taxes on real and personal property may be determined to be uncollectible after a period of six years from
the date of becoming delinquent and canceled by the board of county commissioners.
Ad Valorem Property Tax Data
The City's mill levies from 2005 to date are set forth in the following table. See " —Ad Valorem
Property Taxes Assessment of Property" above for a description of the assessment ratios for taxable
property used in each of such years.
TABLE II
History of City's Mill Levy
Levy /Collection Year General Fund Abatements Total Mill Levy
2005/2006 5.410 -- 5.410
2006/2007 5.410 0.009 5.419
2007/2008 5.449 0.010 5.459
2008/2009 5.449 0.018 5.467
2009/2010 4.042 2 - 4.042
2010/2011 3.813 0.041 3.854
1 Includes a special fund levy of 0.650 and a temporary tax credit of (0.611).
2 Includes a special fund levy of 0.494and a temporary tax credit of (1.862).
3 Includes a special fund levy of 0.527and a temporary tax credit of (2.124).
Sources: State of Colorado, Colorado Department of Local Affairs, Division of Property Taxation,
2005 -2010 State of Colorado Property Tax Annual Reports; and Pitkin County Assessor's Office
The City's assessed valuations including gross valuation, tax increment assessed valuation, and
net assessed valuation, as applicable, are set forth in the following table. See " —Ad Valorem Property
Taxes Assessment of Property" above for a description of the assessment ratios for taxable property
used in each of such years.
4838 -1985- 2810.2 12
TABLE III
History of City's Assessed Valuation
Levy /Collection Year Assessed Valuation Percent Change
2005/2006 $ 824,951,710 --
2006/2007 847,410,688 2.72%
2007/2008 1,230,728,980 45.23
2008/2009 1,253,054,010 1.81
2009/2010 1,688,409,975 34.74
2010/2011 1,686,426,640 (0.12)
2011/2012 2 1,289,528,910 (23.53)
According to the Pitkin County Assessor, the large increase in the City's assessed valuation is
attributable to being a reassessment year.
2 Uncertified preliminary 2011 assessed valuation as provided by the County Assessor on
July 26, 2011. Such valuation is subject to change prior to preliminary certification on
August 25, 2011 and again prior to final certification on December 10, 2011.
Sources: State of Colorado, Colorado Department of Local Affairs, Division of Property
Taxation, 2005 -2010 State of Colorado Property Tax Annual Reports and the Pitkin County
Assessor's Office
The following table sets forth the preliminary uncertified 2011 assessed and estimated "actual"
valuations of specific classes of property within the City. Such valuations are subject to change prior to
preliminary certification on August 25, 2011, and again prior to final certification on December 10, 2011.
As shown below, residential properties have accounted for the largest percentage of the assessed
valuation.
TABLE IV
Preliminary Uncertified 2011 Assessed and "Actual" Valuation
of Classes of Property in the City 1
Percent of Percent of
Assessed Assessed "Actual" "Actual"
Class Valuation Valuation Valuation Valuation
Residential $ 786,732,230 61.0% $ 9,883,571,000 85A%
Commercial 410,331,800 31.8 1,414,934,000 12.2
Vacant 86,900,750 6.7 299,657,700 2.6
State Assessed 5,544,250 0.5 19,118,150 0.1
Agricultural 14,890 0.0 51,300 0.0
Natural Resources 4,990 0.0 17,200 0.0
Total $1 194.,0% $11.617.349,350 100.0%
'Uncertified preliminary 2011 assessed and "actual" valuations as provided by the County Assessor on July 26,
2011. Such valuations are subject to change prior to preliminary certification on August 25, 2011, and again prior to
final certification on December 10, 2011.
Source: Pitkin County Assessor's Office
The following table sets forth a history of the City's ad valorem property tax collections since
2005 on a calendar year basis.
4838- 1985- 2810.2 13
TABLE V
Property Tax Collections for the City
Levy /Collection Total Taxes Current Taxes Percent of
Year Levied Collected Levy Collected
2005/2006 $4,462,989 $4,458,301 99.9%
2006/2007 4,592,119 4,590,199 99.9
2007/2008 6,718,550 6,696,804 99.7
2008/2009 6,850,446 6,804,946 99.3
2009/2010 6,824,553 6,738,087 98.7
2010/2011 6,499,488 6,177,430 95.0
' Tax collections through June 30, 2011.
Source: State of Colorado, Colorado Department of Local Affairs, Division of Property Taxation, 2005 -2010
State of Colorado Property Tax Annual Reports and the Pitkin County Treasurer's Office
Set forth in the following table are the persons or entities which represent the greatest assessed
valuations within the City for the 2010 levy year, as provided by the Pitkin County Assessor's Office.
Such preliminary 2011 information is not yet available from the County. The City's mill levy is
uniformly applicable to all of the properties included in the table, and thus taxes expected to be received
by the City from such taxpayers will be in proportion to the assessed valuations of the properties. The
total tax bill for each of the properties is dependent upon the mill levies of the other taxing entities which
overlap the properties.
TABLE VI
2010 Largest Taxpayers Within the City 1
Name Assessed Percent of
Valuation Assessed Valuation
Aspen Skiing Company LLC $ 41,310,730 2.5%
315 East Dean Association Inc. 23,635,000 1.4
Hyatt Grand Aspen 15,980,030 1.0
Aspen Highlands Condo Association Inc. 15,851,550 0.9
Residences at the Little Nell Condo Association Inc. 14,842,770 0.9
Jerome Property LLC 13,793,930 0.8
Ajax Mountain Associates LLC 9,236,240 0.5
Aspen Club Lodge Properties LLC 9,224,090 0.5
Westview Holdings LLC 8,845,000 0.5
Aspen Institute Inc. 8,081,630 0.5
Total $MM 9.5%
The total 2010 assessed valuation figure of the City used in computing the above was $1,686,426,640.
Source: Pitkin County Assessor's Office
Numerous entities located wholly or partially within the City are authorized to levy taxes on
property located within the City. According to the Pitkin County Assessor's Office, there are currently 15
entities overlapping all or a portion of the City. As a result, property owners within the City may be
subject to various mill levies depending upon the location of their property. The highest total mill levy
currently assessed against a property owner within the City is 89.504 with the lowest total mill levy being
26.176. The following table is representative of a sample total 2010 mill levy (for payment in 2011)
4838- 1985- 2810.2 14
attributable to taxpayers within the City and is not intended to portray the mills levied against all
properties within the City. See also the caption "DEBT STRUCTURE— Estimated Overlapping General
Obligation Debt."
TABLE VII
Sample Total 2010 Mill Levy
Taxing Entity 2010 Mill Levy
Aspen Ambulance District 0.142
Aspen Fire Protection District 1.306
Aspen Historic Park and Recreation District 0.237
Aspen Sanitation District 0.130
Aspen School District RE -1 8.254
Aspen Valley Hospital District 1.931
Colorado Mountain College 3.997
Colorado River Water Conservancy District 0.188
Pitkin County 5.737
Pitkin County Library District 0.932
Sample Overlapping Mill Levy 22.854
The City 3.854
Sample Total Mill Levy 26.708
'One mill equals 1 /10 of one cent. Mill levies certified in 2010 were for the
collection of ad valorem property taxes in 2011.
Source: Pitkin County Assessor's Office
THE CITY
Organization and General Description
The City was incorporated in 1879 under provisions of the Constitution of Colorado. On
January 1, 1972, the City adopted the City Charter and became a Colorado home rule city. The City is
located in central Colorado, situated within the Rocky Mountains, approximately 205 miles west of
Denver. The City encompasses approximately four square miles and is the county seat of Pitkin County.
The estimated current year round population of the City is 6,658. The City's population increases to as
high as 25,000 during peak ski and summer seasons with both seasonal residents and visitors.
City Powers and Functions
Pursuant to the City Charter, the City has all the powers granted to municipal corporations and to
cities by the constitution and general laws of the state, together with all the implied powers necessary to
carry into execution all the powers granted. Among the powers specifically granted by the City Charter
are the following: to acquire property within or without its corporate limits for any City purpose; to sell,
lease, mortgage, hold, manage and control such property as its interests may require; and except as
prohibited by the state constitution or the City Charter, to exercise all municipal powers, functions, rights
and privileges, of every nature whatsoever.
City Council
The City operates under a council- manager form of government whereby the City Council
constitutes the City's legislative and governing body. The Council is composed of four members and a
4838 - 1985- 2810.2 15
Mayor, all elected at large. The Council members are elected to four -year staggered terms with the
Mayor elected for a two year term. The City Manager, who is appointed by and serves at the pleasure of
the City Council, acts as the chief administrative officer of the City. Council meetings, held the second
and fourth Monday of each month, are presided over by the Mayor. The Mayor is the recognized head of
the City government and presides at Council meetings. The Mayor has the powers, rights, privileges and
obligations of a Council member. The Council also elects from its membership a mayor pro tem to serve
in case of the Mayor's absence or disability, and if a vacancy occurs, to become mayor for the completion
of the unexpired term. Vacancies in the City Council are filled by appointment of the City Council, the
appointee to hold office until the next regular election. A quorum at Council meetings consists of three
members. Pursuant to statute, with certain exceptions, no nonjudicial elected official of any political
subdivision of the State can serve more than two consecutive terms in office; however, such term
limitation may be lengthened, shortened or eliminated pursuant to voter approval.
The current Mayor and members of the City Council, their occupations and terms of office are as
follows:
Year Term Expires
Name Occupation Elected (June)
Michael C. Ireland, Mayor Non Practicing Attorney 2007 2013
Steve Skadron Business Owner — Advertising 2007 2015
Torre Tennis Instructor 2009 2013
Derek Johnson Retail Operations Managing Director 2009 2013
Adam Frisch Small Business Owner 2011 2015
Administration and Management
While the City Council exercises the legislative power of the City, other City officials oversee the
daily operation of the City. The following paragraphs summarize the background and experience of
selected City administrative personnel.
City Manager. Stephen Barwick was appointed City Manager in November 1999, after
previously serving for 9 years with the Town of Vail, Colorado in various positions including Budget
Officer, Finance /Assistant Administrative Services Director and Administrative Services Director. Mr.
Barwick received a Bachelor of Arts degree and Master of Public Administration degree from the
University of Colorado at Boulder.
Director of Finance and Administration. Don Taylor was appointed Director of Finance and
Administrative Services in March 2008. Mr. Taylor has over 35 years experience in municipal finance,
33 of which has been as Director of Finance. This includes 26 years experience in the resort communities
of Breckenridge and Steamboat Springs. Mr. Taylor graduated in 1976 from Virginia Tech with a
Bachelor of Science degree in Accounting.
City Attorney. John Worcester received a Bachelor of Arts degree in economics, a Bachelor of
Science degree in chemical engineering, and his Juris Doctorate from the University of Toledo. He was
admitted to practice law in the State of Colorado in 1991. Mr. Worcester has held the position as City of
Aspen Attorney since 1993 after serving as Assistant City Attorney since 1991.
4838 - 1985- 2810.2 16
City Employees
The City has a total of approximately 274 full time employees, 30 part time and 10 seasonal
employees (all figures expressed in full- time - equivalents). None of the City's employees are members of
unions or other employee representation groups. The City has developed a comprehensive compensation
package for its employees. Available benefits include medical and dental insurance plans to which the
City contributes a fixed amount. Additional benefits include fully paid group life insurance, vacation and
sick leave, with worker's compensation and unemployment insurance provided in accordance with State
law. According to the City Manager, employee relations historically have been "good."
Asset Management Plan
The City annually updates and adopts a ten year asset management ( "AMP "), or capital
improvement plan. This plan provides a prioritized set of funded capital improvement projects to ensure
that City fixed assets and infrastructure are maintained in a sound operating condition.
The AMP includes projected expenses for replacement, acquisition, and maintenance of assets for
a ten year planning period. It is organized by operating fund and department, with the highest priority
major maintenance, capital improvement, and asset acquisition needs identified for completion over that
ten year period. The AMP is reviewed and updated annually by City staff and incorporated into the
annual budget development and approval process. Year one of the AMP becomes the City's annual
capital improvement budget, and years 2 -10 provide a functional listing of capital improvement priorities
to aid in facility and infrastructure planning.
Approximately 45% of the City's annual property tax revenue collections are dedicated to
funding the AMP fund in 2011 and 40% in future years. In 2011 this amounts to approximately
$2.5 million. Major funding sources for the AMP, and their 2011 allocations to the City's capital budget
(other than the Bonds) include:
Amount
Fund/Funding Source: (in millions)
Housing/ Sales Tax, Real Estate Transfer Tax, Rent $1.8
Asset Management Plan/Property Tax 2.9
Wheeler Opera House/ Real Estate Transfer Tax 2.3
Utilities (water, electric, renewable, stormwater)/ Property Tax, Fees 2.8
Parks and Open Space/ Sales Tax 0.9
Transportation and Parking/ Fines, Fees, Sales Tax, Use Tax 0.6
Information Technology /Internal Service Charges 1.4
The City's 2011 capital improvement budget totals approximately $13.8 million. Major capital
improvement projects budgeted in 2011 include:
4838 -1985- 2810.2 17
2011 Capital Improvement Budget -Major Projects
Description Amount
Wheeler Lease /Basement Renovation $2,000,000
Reservoir Drainline/Penstock/Tailrace 619,290
GF Fleet 603,660
Water Quality Wetlands 600,000
802 Main and 517 Park Circle 500,000
Field Turf Project 440,000
Compressor Replacement 417,560
Street Overlays 389,775
Curb, Gutter and Sidewalk 340,000
Mill Street Pedestrian Improvements 300,000
Reclaimed Water System Project 276,090
Community Development Permitting 275,000
Droste Open Space Acquisition 250,000
Gondola Plaza Pedestrian Crossing 241,090
Core Network (City) 214,929
Pay and Display Pkg Meters 214,000
ARC Distribution System 200,000
Rio Grande Park Improvements 200,000
Thomas Reservoir Spillway 200,000
Water Place ER Retrofit 200,000
Wheeler Roof Venting and Ducting 200,000
Total $ -68$ 1324
Source: The City
The City's ten year asset management plan totals $119.1 million in projects and improvements
allocated among the City's functional areas. All projects are incorporated into the City's long range
financial planning process. The following graph describes the allocation of planned projects by type of
capital improvement.
4838 -1985- 2810.2 18
Historic
TransportatioRreservation Other Capital Equipment
6% 0% 1% 10%
Recreation
11%
Facilities
Management
28%
Housi ng
18%
Technology Streets &
8% ommunity
Environmental Enhancement Public Saf�t�rastructure
8% 2% 0% 8%
Intergovernmental Agreements
The City is a party to numerous cooperative agreements with other governmental entities to
provide efficient and cost effective services. The City cooperates with Pitkin County (the "County ") in
operating an information technology department and animal shelter and has certain joint responsibilities
with the County for the Housing Authority, which is governed by a separate board whose members are
appointed by the County and the City. The City has cooperated with the County and other local
governments in the Roaring Fork Valley in operating a communications system for law enforcement, fire
and other governmental services. The City also cooperates with Aspen Valley Hospital District for
ambulance service; the school district for the collection of school land dedication fees; and with the U.S.
and Colorado State governments for preservation of forested and related lands in the County. In
September 2000, the City entered into an intergovernmental agreement (the "RFTA IGA ") with Eagle
County, the County, the Town of Basalt, the Town of Snowmass Village, and the City of Glenwood
Springs to create a new governmental entity known as the Roaring Fork Transportation Authority
( "RFTA ") for the purpose of managing mass transportation in the County and the wider Roaring Fork
River Valley. The creation of RFTA was approved by the voters of each jurisdiction on November 7,
2000. At an election held on November 2, 2004, the electors in the Town of New Castle ( "New Castle ")
approved a ballot measure authorizing New Castle to join RFTA. Pursuant to an amendment to the
RFTA IGA dated November 12, 2004, New Castle became an additional member of RFTA.
Services Available to City Residents
The City is a "full service city" providing a wide range of municipal services to its residents.
Services include public safety (police and animal control), street maintenance, water, electric, culture,
recreation, public improvements, general administrative services, a public golf course and rental and "for
sale" affordable housing. To promote greater efficiency, the City and the County provide several services
4838 -1985- 2810.2 19
through joint departments and agencies. These include services such as information technology, dispatch
communications, the Aspen/Pitkin County Housing Authority, Emergency 911 and transportation
services as provided by RFTA. Fire protection, utilities, schools, and medical services are provided to
City residents by a variety of public and private entities depending upon property location.
CITY FINANCIAL OPERATIONS
Accounting Policies
The accounts of the City are organized on the basis of funds and account groups. Such funds are
segregated for the purpose of accounting for the operation of specific activities or attaining certain
objectives. For a description of the various funds and account groups, see the City's audited financial
statements attached hereto. Financial operations are accounted for by the City's finance department. In
accordance with the City Charter and State law, an annual audit is required to be made of the City's
financial statements at the end of the fiscal year. The audited financial statements must be filed with the
City Council within six months after the end of the fiscal year and with the State auditor 30 days
thereafter. Failure to file an audit report may result in the withholding of the City's property tax revenues
by the County treasurer pending compliance. The City's fiscal year 2010 financial statements were
audited by McMahan and Associates, L.L.C., Certified Public Accountants and Consultants, Avon,
Colorado. Such audited general purpose financial statements of the City as of and for the year ended
December 31, 2010, being the most current audited financial information available for the City, are
appended hereto.
Major Sources of Revenues
The following table sets forth the major sources of City revenue for fiscal years 2006 through
2010 and year to date for 2011.
TABLE VIII
Major Revenue Sources 1
Fiscal Licenses and Inter- Charges for Fines and Earnings on
Year Taxes Permits governmental Services Forfeits Rents Investments Other Total
2006 $41,549,196 $1,568,929 $ 496,567 $ 9,169,026 $ 73,722 $ 687,220 $2,374,153 $ 8,731,422 $64,650,235
2007 40,079,836 1,448,116 489,554 22,123,973 3 79,767 1,494,711 3,417,454 9,551,953 78,685,364
2008 36,716,822 2,171,593 490,005 5,743,510 118,177 2,283,018 4 2,989,745 11,439,539 61,952,409
2009 33,794,735 1,522,715 1,192,789 4,115,188 103,030 1,274,949 2,256,949 6,817,187 51,077,170
2010 35,900,094 1,482,339 1,132,873 4,500,606 89,406 1,824,409 921,237 6,500,639 52,351,603
2011 18,582,673 1,203,130 320,957 2,371,650 57,455 834,808 291,664 4,597,950 28,260,287
Includes, among other tax revenues, Sales Tax as described in "TABLE VII" below, Real Estate Transfer Taxes as described in "TABLE IX" below, and property
taxes.
2 Charges for Service are those revenues derived from services provided that are deemed to be mission - related for each fund. Examples include, but are not limited
to, fees for the use of recreational facilities, building permits and sprinkler fees.
3 The increase in Charges for Services in 2007 was the result of approximately $16 million in sales of affordable housing units at Burlingame Ranch.
The increase in Rents in 2008 was primarily due to lease payments of $606,000 from BMC West Corporation. The City acquired the property in late 2007.
' The increase in "Other" revenue in 2008 was the result of a $2,734,411 in lieu of development fee charged to the Limelight Lodge for affordable housing.
6 Unaudited year to date figures through June 30, 2011.
Source: City of Aspen Comprehensive Annual Financial Report for the years ended December 31, 2006 -2010 and the City Finance Department
Sales Tax. The largest single source of City revenue is the sales tax imposed upon a retail sale,
lease or rental of an article of tangible personal property or taxable service. The City regards the sale of
tangible personal property, or of taxable services, as a taxable privilege and imposes a charge, through the
imposition of the sales tax, for the exercise of that privilege. The sales tax is imposed on any person in
business within the City who delivers, within the City, to a purchaser taxable property or services. The
City exempts from taxation certain sales of tangible personal property and services. The following table
4838 - 1985- 2810.2 20
sets forth the City's sales tax revenue collections for 2006 through 2010, and year to date 2011. For each
year, such amounts are stated based upon the modified accrual system described above.
TABLE IX
Historical Sales Tax Collections
City's Share 0.5% Parks
of 1% 1.0% Parks and Open City 0.25% City 0.15% 0.45% Affordable
County and Open Space Space Sales Parking Transportation Housing and Day Total Sales Tax
Year Sales Tax Sales Tax Tax Sales Tax ' Sales Tax ' Care Sales Tax Collections
2006 $6,713,787 $4,812,687 $2,406,344 $1,203,172 -- $2,165,710 $17,301,700
2007 7,075,917 5,005,157 2,502,578 1,251,288 -- 2,252,141 18,087,081
2008 7,035,890 5,234,176 2,617,088 1,308,170 -- 2,354,856 18,550,180
2009 5,724,719 4,464,087 2,232,001 777,255 $203,134 2,008,199 15,409,395
2010 6,075,201 4,668,042 2,334,721 -- 699,947 2,100,235 15,778,146
2011 2,958,413 2,060,870 1,030,435 -- 309,130 927,391 7,286,239
The City's 0.25% parking tax expired as of September 1, 2009. In addition, the City imposed, effective as of September 1, 2009, a 0.15% transportation sales tax.
1 Collections through May 31, 2011.
Source: City of Aspen
Real Estate Transfer Taxes. Real Estate Transfer Tax ( "RETTs ") are assessed by the City to
raise revenue for the specific purposes of affordable housing development and management and operation
of the Wheeler Opera House. RETTs are due on the purchase of all real property (land, buildings,
condos, townhomes, etc.) within the City limits prior to recording the purchase deed at the County Clerk
and Recorder's Office. There are two separate RETTs, the Wheeler Opera House RETT of 0.5% and the
Housing RETT of 1.0 %, totaling 1.5 %. The first $100,000 of each transaction is exempt from the
Housing RETT. RETTs are assessed against the purchaser and failure to pay the RETTs can result in the
filing of a lien against the purchaser. The following table sets forth the City's RETT revenue collections
for 2006 through 2010, and year to date 2011. For each year, such amounts are stated based upon the
modified accrual system described above. RETTs are available only for the above - listed purposes.
TABLE X
Historical Real Estate Transfer Tax Collections
Wheeler House RETT Housing RETT
Year (0.5%) (1.0%) Total RETT
2006 $6,289,551 $11,076,748 $17,366,299
2007 5,272,106 9,755,656 15,027,762
2008 3,077,447 5,733,377 8,810,824
2009 3,185,757 5,881,378 9,067,135 •
2010 3,351,365 6,370,311 9,721,676
2011 1,598,718 3,001,060 4,599,799
'Collections through June 30, 2011.
Source: City of Aspen
Historical and Budgeted General Fund Financial Information
The governmental fund utilized for the administration and operation of the City is the General
Fund. Ordinary operations of the fund include City administration, assessment, recording and collection
of taxes, law enforcement and other activities financed through taxes and general revenues. Set forth
hereafter is a five -year comparative statement of revenues, expenditures, and changes in fund balances for
4838 -1985- 2810.2 21
the City's General Fund. The following information should be read together with the City's financial
statements and accompanying notes appended hereto. Preceding years' financial statements may be
obtained from the sources noted in "INTRODUCTION— Additional Information."
[Remainder of Page Intentionally Left Blank]
4838 - 1985 - 2810.2 22
TABLE XI
History of General Fund Revenues, Expenditures and Changes in Fund Balances
2006 2007 2008 2009 2010
Revenues:
Taxes $10,852,464 $ 9,509,080 $10,805,052 $ 9,984,040 $11,086,048
Licenses & Permits 1,545,629 1,423,741 1,451,112 1,030,194 814,134
Intergovernmental 426,341 424,675 425,568 447,463 471,471
Charges for Services 4,122,966 4,610,500 3,817,108 2,950,703 3,165,021
Fines 73,722 79,767 118,177 103,030 89,406
Refund of Expenditures' -- -- 4,585,153 4,644,574 4,881,816
Earnings on Investments -- -- 604,142 313,693 144,476
Miscellaneous 7,274,073 5,750,858 868,274 377,896 198,283
Total Revenues 24,295,195 21,798,621 22,674,586 19,851,593 20,850,655
Expenditures:
General Government 8,576,027 9,483,244 10,718,908 9,911,162 9,827,371
Public Safety 4,026,975 4,312,794 4,274,038 4,132,261 4,008,407
Public Works 1,864,781 2,251,512 2,889,372 2,163,806 1,990,040
Public Health & Welfare 626,666 404,146 424,674 444,276 463,580
Culture & Recreation 4,202,945 4,455,005 4,648,288 4,410,919 4,102,522
Debt Service
Principal -- -- -- -- 19,002
Interest -- -- -- -- 17,692
Capital Outlay 425,577 889.040 820,168 6,789 --
Total Expenditures 19,722,971 21,795,741 23,775,448 21,069,213 20,428.614
Excess of Revenues
Over Expenditures 4,572,224 2,880 (1,100,862) (1,217,620) 422,041
Other Financing Sources (Uses):
Proceeds from Sale of Fixed
Assets 132,525 379,934 444 3,000 --
Operating Transfers In 1,579,134 1,417,640 2,187,240 1,612,850 1,536,110
Operating Transfers Out (1,433,923) (6,871,530) 2 (2,614,720) (1,015,590) (290,810)
Total 277,736 (5,073,956) (427,036) 600,260 1,245,300
Excess of Revenues and Other
Sources Over Expenditures
and Other (Uses) 4,849,960 (5,071,076) (1,527,898) (617,360) 1,667,341
Beginning Fund Balance 10,207,718 15,057,678 9,986,602 8,458,704 7.841.344
Ending Fund Balance $15-057 -678 $ .9` SAM $ $4 $ 9.508-685
' The City's General Fund charges other City Funds and the County (from joint operations) for allocable administrative overhead.
Historically, the reimbursement payments to the General Fund for administrative overhead charges were recorded as negative
expenditures in the General Fund. Beginning in fiscal year 2008, such reimbursement payments are budgeted and accounted for as
quasi - external transactions, where "Expenditures- General Government" records an expense accounting entry and "Revenue-
Miscellaneous" records a refund of expenditures revenue accounting entry.
2 1n 2007 the City made a one time transfer in the amount of $5,180,970 from the General Fund unappropriated fund balance to the
Asset Management Fund for the purpose of funding capital improvements.
Source: City audited financial statements for years ended December 31, 2006 -2010
Budget and Appropriation Procedure. The City's budget is prepared on a calendar year basis as
set forth in the City Charter. The City Manager, prior to the beginning of each fiscal year, submits to the
City Council the budget for the ensuing fiscal year together with an accompanying budget message.
4838 -1985- 2810.2 23
The City Manager's budget message (the "Message ") explains the proposed budget both in fiscal
terms and in terms of the work programs outlined in the budget. The Message outlines the proposed
financial policies of the City for the ensuing fiscal year, describes the important features of the budget,
indicates any major changes from the current year in terms of financial policies, expenditures and
revenues together with the reasons for such changes, summarizes the City's debt position and includes
such other material as the City Manager deems desirable or which the City Council may require.
The budget provides a complete financial plan of all municipal funds and activities for the
ensuing fiscal year and, except as required by law or the City Charter, is in such form as the City Manager
deems desirable or that the City Council may require.
A public hearing on the proposed budget and proposed capital program is held by the City
Council on any date at least fifteen days prior to the final day established by law for the certification of
the ensuing year's tax levy to the County. Notice of the time and place of such hearing is published one
time at least seven days prior to the hearing. After the hearing, the City Council may adopt the budget
with or without amendment. The Council may increase, delete or decrease programs or amounts, except
certain expenditures required by law or for debt service or estimated cash deficits.
The Council adopts the budget by resolution on or before the final day for certification of the tax
levy to the County. If no budget is adopted by this date, then the amounts appropriated for the current
operation of the current fiscal year are automatically deemed adopted for the ensuing fiscal year on a
month to month basis until such time as the City Council adopts the new budget.
Adoption of the budget by the City Council constitutes appropriations of the amounts specified in
such budget and constitutes a levy of the property tax proposed in such budget. The Council is still
required to cause the same to be certified to the County as required by law. The Council is allowed under
the City Charter to make supplemental or emergency appropriations by appropriate ordinance as set forth
in the City Charter.
Capital Program. Simultaneously with the submission of the budget and the budget message, the
City Manager prepares and submits to the City Council a long range capital program. The capital
program is to include (a) a clear general summary of its contents; (b) a list of all capital improvements
which are proposed to be undertaken during the following fiscal years, with appropriate supporting
information as to the necessity for the improvement; (c) cost estimates; and (d) the estimated annual cost
of operating and maintaining the facilities to be constructed or acquired. This information may be revised
or extended each year with regard to capital improvements still pending or in process of construction or
acquisition. The City's Asset Management Plan carries out the goals established by the capital program.
See "THE CITY —Asset Management Plan."
2010 and 2011 General Fund Budget Summary and Comparison. Set forth hereafter is a
comparison of the City's 2010 budget and 2011 budget for the General Fund as compared to actual
unaudited figures for 2011, through June 30, 2011. The following table is presented on a budgetary basis,
which differs from generally accepted accounting principles ( "GAAP ") applicable to the preparation of
the statements of revenues and expenses which are part of the City's audited general purpose financial
statements presented elsewhere in this Official Statement.
4838 -1985- 2810.2 24
TABLE XII
General Fund Budget Summary and Comparison
Budget Budget 2011 Year -to -Date
2010 2011 (Unaudited) '
Revenues:
Taxes:
Sales Tax $ 5,714,450 $ 6,094,840 $ 2,721,787
General Property Tax 3,688,350 3,081,950 2,428,539
Specific Ownership Tax 260,000 190,000 68,158
Franchise and Business Tax 1,140,000 1,196,000 494,897
Total Taxes 10,802,800 10,562,790 5,713.381
Licenses and Permits 1,014,500 810,818 909,145
Intergovernmental:
State Shared Revenues 306,070 366,420 172,567
Other Governmental Units 119.260 96,370 35.374
Total Intergovernmental 425.330 462.790 207,941
Charges for Services:
General Government 799,200 979,910 995,332
Public Safety 30,100 16,600 11,595
Public Works 2,160 6,729 2,966
Public Health and Welfare 4,400 2,050 510
Culture and Recreation 2,175,570 2. 140,560 932.085
Total Charges for Services 3,011.430 3.145,849 1.942.488
Fines:
Court Fines 34,680 31,250 36,829
Other Fines 34.600 34,200 20.626
Total Fines 69.280 65.450 57.455
Miscellaneous:
Rents and Royalties 51,420 83,013 68,783
Earnings on Investments 164,750 75,960 42,738
Refund of Expenditures 2 4,849,680 3,804,640 1,943,800
Sale of Assets -- 810 1,211
Other 100.680 265,340 203.142
Total Miscellaneous 5,166.530 4.229,763 2.259,674
Total Revenues 20,489,870 19,277,460 11.090.084
Expenditures:
Current Operating:
General Government 11,298,360 9,658,680 4,525,327
Public Safety 4,669,590 4,835,070 1,809,206
Public Works 3,192,490 3,299,100 1,180,767
Public Health and Welfare 545,140 576,370 245,877
Culture and Recreation 4,423,850 4,565,280 2,024,228
Debt Service
Principal 17,700 29,002 14,320
Interest 19.000 19.938 10,143
Total Expenditures 24,166,130 22.983,440 9.809.868
Excess (Deficiency) of Revenues Over
Expenditures (3,676,260) (3,705,980) 1,280,216
Other Financing Sources (Uses):
Operating Transfers Out (290,810) (456,820) (308,050)
Operating Transfers In 1,552,520 1,528,980 766.990
Total Other Financing Sources 1261,710 1,072,160 458.940
Excess (Deficiency) of Revenues and Other
Financing Sources Over Expenditures and
Other Financing (Uses) $12,i) $ 12.633.820) Un 15
1 Unaudited actual figures through June 30, 2011.
2 The City's General Fund charges other City Funds and the County (from joint operations) for allocable administrative
overhead. Historically, the reimbursement payments to the General Fund for administrative overhead charges were recorded
as negative expenditures in the General Fund. Such reimbursement payments are budgeted and accounted for as quasi-
external transactions, where "Expenditures- General Government" records an expense accounting entry and "Revenue -
Miscellaneous" records a refund of expenditures revenue accounting entry.
Sources: City of Aspen 2010 and 2011 Budgets and the City Finance Department
4838 - 1985- 2810.2 25
Management Discussion of Recent Financial Trends
The following discussion of recent financial trends in the City has been provided by the City's
management.
The City's financial condition has stabilized in the past year and looks positive going forward.
Sales tax collections increased approximately 1.0% in 2010 over 2009 collections and are up
approximately 4.0% in 2011, year to date, over 2010. The City just recently (January 1, 2011) passed an
increase to its lodging tax that is dedicated to marketing and tourism promotion. The increase was from
the existing 0.5% to 1.5% tripling the amount available for this purpose.
Taxes and fees that are tied to real estate sales or development continue to be slow and are
expected to be so through the intermediate term. Real estate transfer taxes are expected to be between
$5.0 million to $6.0 million for 2011, similar to 2009 and 2010, but much less than 2007. Fortunately the
City uses most of its real estate transfer taxes for affordable housing projects, the pace of which can be
adjusted to the amount of tax revenue that is available. Building permit and planning fees have recovered
somewhat from the worse years of the recession and the City Council recently approved higher fee rates
for development review in order to recover a higher percentage of its costs. Revenues from these sources
are expected to increase approximately 15.0% in 2012 over 2011 collections.
Although, in accordance with preliminary uncertified information provided by the County
Assessor on July 26, 2011, the assessed valuation of the City is expected to decrease 23.5% (to
$1,289,528,910) for the 2012 property tax collection year, the City will be able to utilize a portion of the
property tax credit that it has given in recent years in order to keep its property tax revenues compliant
with the provisions of TABOR. The total amount of revenue from property taxes will be able to increase
by inflation and local growth (new construction). (Note that the foregoing- described July 26, 2011
valuation is uncertified and is subject to change prior to preliminary certification on August 25, 2011 and
again prior to final certification on December 10, 2011.)
Despite the tough economic conditions last year, the City was still able to increase the General
Fund balance by approximately 21.0 %, from $7,841,344 to $9,508,685.
Deposit and Investment of City Funds
State statutes set forth requirements for the deposit of City funds in eligible depositaries and for
the collateralization of such deposited funds. See also Note N.A. to the City's audited financial
statements appended hereto. The City also may invest available funds in accordance with applicable State
statutes. The investment of the proceeds of this issue also is subject to the provisions of the federal Tax
Code. See "TAX MATTERS."
Constitutional Amendment Limiting Taxes and Spending
On November 3, 1992, Colorado voters approved an amendment to the Colorado Constitution,
which is commonly referred to as the Taxpayer's Bill of Rights, or TABOR, and now constitutes Section
20 of Article X of the Colorado Constitution. TABOR imposes various limits and new requirements on
the State of Colorado and all Colorado local governments which do not qualify as "enterprises" under
TABOR (each of which is referred to in this section as a "governmental unit "). Any of the following
actions, for example, now requires voter approval in advance: (a) any increase in a governmental unit's
spending from one year to the next in excess of the rate of inflation plus a "growth factor" based on (i) for
the State, the percentage change in State population, (ii) for a school district, the percentage change in
student enrollment, and (iii) for any other local government, the net percentage change in actual value of
4838 - 1985 - 2810.2 26
all real property from construction of taxable real property improvements, minus destruction of similar
improvements, and additions to, minus deletions from, taxable real property; (b) any increase in the real
property tax revenues of a local governmental unit (not including the state) from one year to the next in
excess of inflation plus the appropriate "growth factor" referred to in (a) above; (c) any new tax, tax rate
increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property
class, extension of an expiring tax or a tax policy change directly causing a net tax revenue gain; and (d)
except for refinancing bonded indebtedness at a lower interest rate or adding new employees to existing
pension plans, creation of any multiple fiscal year direct or indirect debt or other financial obligation
whatsoever without adequate present cash reserves pledged irrevocably and held for payments in all
future fiscal years. Elections on such matters may only be held on the same day as a state general
election, at the governmental unit's regular biennial election or on the first Tuesday in November of odd
numbered years, and must be conducted in accordance with procedures described in TABOR.
Revenue collected, kept or spent in violation of the provisions of TABOR must be refunded, with
interest. TABOR requires a governmental unit to create an emergency reserve of 3% of its fiscal year
spending in 1995 and subsequent years. TABOR provides that "[w]hen [a governmental unit's] annual . .
. revenue is less than annual payments on general obligation bonds, pensions, and final court judgments,
the [voter approval requirement for mill levy and other tax increases referred to in clause (c) of the
preceding paragraph and the voter approval requirement for spending and real property tax revenue
increases referred to in clauses (a) and (b) of the preceding paragraph] shall be suspended to provide for
the deficiency." The preferred interpretation of TABOR shall, by its terms, be the one that reasonably
restrains most the growth of government.
De Brucing. At the November 1994 election, City voters authorized the City to collect, retain,
and spend, without regard to the revenue and spending limitations imposed by TABOR, the full amount
derived from the City's existing sales and real estate transfer taxes, grants and, with the exception of
revenues generated from ad valorem property taxes, revenues from all other sources.
At the November 2000 election, City voters authorized the City to collect, retain, and spend,
without regard to the revenue and spending limitations imposed by TABOR, excess property tax revenues
for tax years 2000 -2004 (for collection years 2001 -2005) for the purpose of enhancements to the Islen
Park Recreational Complex and to fund a capital reserve and operating fund for the facilities.
At the November 1, 2005 election, City voters approved a ballot measure allowing the City to
collect, retain, and spend, without regard to the revenue and spending limitations imposed by TABOR,
excess ad valorem property tax revenues for tax years 2005 -2009 (for collection years 2006 -2010) for the
purpose of financing certain specified improvements and facilities.
Retirement Plans
The City provides a defined contribution pension plan for eligible City employees and officials.
See Note V.A. in the City's audited financial statements attached hereto for further information with
respect to the retirement plan.
Insurance Coverage
The Council acts to protect the City against loss and liability by maintaining certain insurance
coverages. The City is insured as a member of the Colorado Intergovernmental Risk Sharing Agency
( "CIRSA "), a property and liability insurance pool established for Colorado municipalities on January 1,
1982. CIRSA provides liability coverage, including errors and omissions, property coverage, and specific
catastrophe coverage, which is renewable annually. See Note V.B. to the City's financial statements
4838 -1985- 2810.2 27
attached hereto for a discussion of CIRSA. The City Manager believes the City's present insurance
coverage to be adequate. However, there can be no assurance that the City will continue to maintain this
level of coverage.
DEBT STRUCTURE
The following is a discussion of the City's authority to incur general obligation indebtedness and
other financial obligations and the amount of such obligations presently outstanding.
Required Elections
TABOR requires that, with certain exceptions, the City must have voter approval in advance for
the creation of any multiple fiscal year direct or indirect City debt or other financial obligation whatsoever
without adequate present cash reserves pledged irrevocably and held for payments in all future fiscal
years. Enterprises, as defined in TABOR, and obligations subject to annual appropriation are excluded
from the application of TABOR and the voter approval requirements established therein. For a discussion
of TABOR, see "CITY FINANCIAL OPERATIONS — Constitutional Amendment Limiting Taxes and
Spending." The Bonds are issued for the purpose of refinancing bonded debt at a lower interest rate and,
therefore, do not require voter approval.
At an election held on November 7, 2000, the City's voters approved the issuance of $38,000,000
in revenue bonds payable from sales tax. Of such originally authorized amount, the City currently has
$12,320,000 in authorization remaining for revenue bonds issued for the purpose of funding parks and
recreation facilities and payable from sales tax.
General Obligation Debt
General. "Debt" or "indebtedness" as used in this Official Statement means, generally,
obligations backed by the City's full faith and credit and secured by the unlimited power of the City to
levy ad valorem property taxes for the payment of bonds and the interest thereon. Debt refers only to
principal amounts and not to the interest to become due thereon. Debt does not include revenue
obligations, debt that has been refinanced, obligations arising upon a contingency and obligations which
do not extend beyond the fiscal year in which incurred.
Outstanding Debt. Any general obligation indebtedness of the City is subject to the election
requirements described above in " Required Elections." The following table sets forth the City's
outstanding general obligation debt upon the issuance of the Bonds.
TABLE XIII
General Obligations of the City
Principal Amount
Obligation Outstanding 1
General Obligation Housing Bonds, Series 2001A $ 440,000
General Obligation Electric Utility Bonds, Series 2008 5,245,000
General Obligation Housing Refunding Bonds, Series 2009 5,940,000
General Obligation Refunding Bonds, Series 2011 2,420,000
Total $14.045.000
Upon issuance of the Bonds.
* Preliminary; subject to change.
Source: The City
4838 -1985- 2810.2 28
The City does not have any authorized but unissued general obligation indebtedness. The
issuance of additional general obligation debt is subject to constitutional and City Charter limitations,
including, but not limited to, constitutional and City Charter provisions requiring voter approval of
general obligation debt and City Charter limits on the dollar amount of general obligation debt. See
"CITY FINANCIAL INFORMATION — Constitutional Amendment Limiting Taxes and Spending" and
" —City Charter Limit on General Obligation Debt" below.
City Charter Limit on General Obligation Debt. The City Charter provides that the City may not
issue bonds payable out of general property taxes (a) except pursuant to an ordinance duly adopted by the
City Council; and (b) until the question of such issuance shall have been approved by a majority of the
qualified electors of the City voting at a special general election. The aggregate amount of all
indebtedness of the City may not exceed 20% of the assessed valuation of the taxable property within the
City as shown by the last preceding assessment for City purposes. Excluded from the computation of
indebtedness for the purposes of this limitation are bonds or other evidences of indebtedness issued by the
City for the acquisition or extension of a water system or public utilities, and bonds payable out of
pledged revenues. Presently, the City's debt limit is $337,285,328 based upon the City's 2010 assessed
valuation of $1,686,426,640.
General Obligation Debt Ratios
Set forth in the following table are selected historical general obligation debt ratios for the City
for the last five years. See "INTRODUCTION —Debt Ratios" for general obligation debt ratios for the
City upon issuance and delivery o f the Bonds.
TABLE XIV
Historical General Obligation Debt Ratios
Fiscal Years Ended December 31
2006 2007 2008 2009 2010
Debt Outstanding $16,929,461 $15,324,461 $15,920,000 $15,315,000 $14,375,000
Population 6,356 6,403 6,664 6,846 6,658
Debt Per Capita $2,664 $2,393 $2,389 $2,237 $2,159
Assessed Value $847,410,688 $1,230,728,980 $1,253,054,010 $1,688,409,975 $1,686,426,640
Ratio of Debt to
Assessed Value 2.00% 1.25% 1.27% 0.91% 0.85%
Personal Income
Per Capita
(Pitkin County) $90,500 $94,581 $96,030 $84,264 unavailable
Ratio of Debt Per
Capita to Personal
Income Per Capita 2.94% 2.53% 2.49% 2.65% unavailable
Sources: City Comprehensive Annual Financial Report for years ended December 31, 2006 -2010; State of Colorado,
Division of Property Taxation, Annual Reports 2006 -2010; Regional Economics Information System Bureau of
Economic Analysis; and the City
4838 -1985- 2810.2 29
Estimated Overlapping General Obligation Debt
Certain public entities whose boundaries may be entirely within, coterminous with, or only
partially within the City are also authorized to incur general obligation debt, and to the extent that
properties within the City are also within such overlapping public entities such properties will be liable
for an allocable portion of such debt. For purposes of this Official Statement, the percentage of each
entity's outstanding debt chargeable to City property owners is calculated by comparing the assessed
valuation of the portion overlapping the City to the total assessed valuation of the overlapping entity. To
the extent the City's assessed valuation changes disproportionately with the assessed valuation of
overlapping entities, the percentage of general obligation debt for which City property owners are
responsible will also change. The following table sets forth the estimated overlapping general obligation
debt chargeable to properties within the City as of the date of this Official Statement.
The City is not financially or legally obligated with regard to any of the indebtedness shown on
the immediately following table. Although the City has attempted to obtain accurate information as to the
outstanding debt of the entities which overlap the City, it does not warrant its completeness or accuracy as
there is no central reporting entity which is responsible for compiling this information.
TABLE XV
Estimated Overlapping General Obligation Debt
Outstanding General Percentage Amount
Overlapping Entity Obligation Debt Applicable to City Applicable to City
Aspen Fire Protection District $12,275,000 62.87% $ 7,717,293
Aspen Highlands Residential
Metropolitan District 7,030,000 100.00 7,030,000
Aspen School District RE -1 1 67,035,000 50.03 33,537,611
Aspen Valley Hospital 50,000,000 46.30 23,150,000
Pitkin County 18,175,000 45.83 8,329,603
Total $79.764.507
1 It is anticipated that Aspen School District RE -1 will refund of portion of its outstanding general obligation debt
in 2011. There is no guarantee as to when or if such transaction will occur.
Sources: Pitkin County Assessor's Office and individual entities
Revenue Obligations
The Council has the power to issue revenue bonds, subject to the election requirements described
above in "— Required Elections," payable from the revenues derived from the operation of facilities to be
acquired, constructed or improved with the proceeds of the bonds, or payable in whole or part from
available proceeds of sales taxes. The following table sets forth the City's outstanding revenue bonds
upon issuance of the Bonds.
4838 - 1985- 2810.2 30
TABLE XVI
Schedule of City's Revenue Obligations Outstanding
Outstanding Principal
Revenue Obligations Amount
Parks and Open Space Sales Tax Revenue Bonds, Series 2001 $ 515,000
Sales Tax Revenue Refunding Bonds, Series 2005 8,150,000
Parks and Open Space Sales Tax Revenue Bonds, Series 2005B 14,400,000
Parks and Open Space Sales Tax Revenue Refunding Bonds, Series 2009 6,970,000
Total $30.
Source: The City
Other Obligations
Capital Leases. The Council has the authority to enter into installment or lease option contracts,
subject to annual appropriation, for the purchase of property or capital equipment without prior electoral
approval as described above in "— Required Elections."
The City entered into a lease agreement as lessee for financing the acquisition of 75 units of pay -
and- display parking meter equipment. The City also entered into a lease agreement as lessee for
financing a series of governmental energy efficiency improvement projects. These lease agreements
qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of
their future minimum lease payments as of the inception date. See Note N.G. in the City's audited
financial statements attached hereto for further information with respect to the future minimum lease
obligations and the net present value of the minimum lease payments as of December 31, 2010.
Certificates of Participation. The City entered into an annually renewable Lease Purchase
Agreement dated as of February 1, 2007 with the City of Aspen Public Facilities Authority. Pursuant to a
Mortgage and Indenture of Trust, Taxable Certificates of Participation, Series 2007A evidencing
undivided interest in the right to receive certain revenues under such indenture were issued in the original
principal amount of $8,405,000 (the "2007A Certificates of Participation "), currently outstanding in the
principal amount of $7,985,000.
Special Assessment Bonds. The Council also has the power to issue special assessment bonds
payable from assessments levied against specially benefited properties within improvement districts. As
of the date of this Official Statement, the City does not have any special assessment bonds outstanding.
LEGAL MATTERS
Sovereign Immunity
The Governmental Immunity Act, Title 24, Article 10, Part 1, Colorado Revised Statutes, as
amended (the "Governmental Immunity Act "), provides that, with certain specified exceptions, sovereign
immunity acts as a bar to any action against a public entity, such as the City, for injuries which lie in tort
or could lie in tort.
The Governmental Immunity Act provides that sovereign immunity does not apply to injuries
occurring as a result of certain specified actions or conditions. In general, public entities will be held
liable for willful and wanton acts or omissions or willful and wanton acts or omissions of its public
employees which occurred during the performance of their duties and within the scope of their
4838 -1985- 2810.2 31
employment. However, if a plaintiff can meet the burden of proof required to show that any one of the
exceptions specified in the Governmental Immunity Act applies, the public entity may be liable for
injuries arising from an act or omission of the public entity, or an act or omission of its public employees,
which was not willful and wanton, and which occur during the performance of their duties and within the
scope of their employment. The maximum amounts that may be recovered under the Governmental
Immunity Act, whether from one or more public entities and public employees, are as follows: (a) for any
injury to one person in any single occurrence, the sum of $150,000; and (b) for an injury to two or more
persons in any single occurrence, the sum of $600,000, except in such instance, no person may recover in
excess of $150,000. Suits against both the City and a public employee do not increase such maximum
amounts which may be recovered. The City may not be held liable either directly or by indemnification
for punitive or exemplary damages. In the event that the City is required to levy an ad valorem property
tax to discharge a settlement or judgment, such tax may not exceed a total of ten mills per annum for all
outstanding settlements or judgments.
The City may be subject to civil liability and may not be able to claim sovereign immunity for
actions founded upon various federal laws. Examples of such civil liability include, but are not limited to,
suits filed pursuant to 42 U.S.C. Section 1983 alleging the deprivation of federal constitutional or
statutory rights of an individual. In addition, the City may be enjoined from engaging in anti competitive
practices which violate the antitrust laws. However, the Governmental Immunity Act provides that it
applies to any action brought against a public entity or a public employee in any Colorado state court
having jurisdiction over any claim brought pursuant to any federal law, if such action lies in tort or could
lie in tort.
Pending and Threatened Litigation
In connection with the issuance of the Bonds, the City will deliver a certificate stating that, as of
the date of issuance of the Bonds, to the best of its knowledge, there is no action, suit, proceeding, inquiry
or investigation at law or in equity before or by any court, public board or body pending or threatened
against or affecting the City, wherein an unfavorable decision, ruling or finding would have a material
adverse affect upon the City's ability to comply with its obligations under the Bond Ordinance.
Legal Representation
Legal matters incident to the authorization and issuance of the Bonds are subject to approval by
Kutak Rock LLP, Denver, Colorado, Bond Counsel. In addition to acting as Bond Counsel, Kutak Rock
LLP has been retained to advise the City concerning, and has assisted the City in the preparation of, this
Official Statement.
The legal opinions to be delivered concurrently with the delivery of the Bonds express the
professional judgment of the attorneys rendering the opinions as to legal issues expressly addressed
therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the
result indicated by that expression of professional judgment, or of the transaction on which the opinion is
rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion
guarantee the outcome of any legal dispute that may arise out of the transaction.
No Litigation Certificate
The Underwriter's purchase of the Bonds is conditioned on, among other things, receipt from the
City Attorney and /or certain City officials of certification at closing that, other than as described herein,
there is no litigation then pending, or to their knowledge threatened, affecting the validity of or security
for the Bonds.
4838 -1985- 2810.2 32
TAX MATTERS
Generally. In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations,
rulings and judicial decisions and assuming the accuracy of certain representations and continuing
compliance with certain covenants, interest on the Bonds is excludable from gross income for federal
income tax purposes, is not a specific preference item for purposes of the federal alternative minimum
tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and
compliance by the City with covenants designed to satisfy the requirements of the Code that must be met
subsequent to the issuance of the Bonds. Failure to comply with such requirements could cause interest
on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of
issuance of the Bonds. The City has covenanted to comply with such requirements. Bond Counsel has
expressed no opinion regarding other federal tax consequences arising with respect to the Bonds.
The accrual or receipt of interest on the Bonds may otherwise affect the federal income tax
liability of the owners of the Bonds. The extent of these other tax consequences will depend upon such
owner's particular tax status and other items of income or deduction. Bond Counsel has expressed no
opinion regarding any such consequences. Purchasers of the Bonds, particularly purchasers that are
corporations (including S corporations and foreign corporations operating branches in the United States),
property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients
of social security or railroad retirement benefits, taxpayers otherwise entitled to claim the earned income
credit, or taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry
tax exempt obligations, should consult their tax advisors as to the tax consequences of purchasing or
owning the Bonds.
Notwithstanding Bond Counsel's opinion that interest on the Bonds is not a specific preference
item for purposes of the federal alternative minimum tax, such interest will be included in adjusted
current earnings of certain corporations, and such corporations are required to include in the calculation of
alternative minimum taxable income 75% of the excess of such corporations' adjusted current earnings
over their altemative minimum taxable income (determined without regard to such adjustment and prior
to reduction for certain net operating losses).
In the opinion of Bond Counsel, under existing statutes, the interest on the Bonds is exempt from
State of Colorado taxation except inheritance, estate and transfer taxes. Bond Counsel has expressed no
opinion regarding other tax consequences arising with respect to the Bonds under the laws of Colorado or
any other state or jurisdiction.
Bank Qualified. The City has represented that it does not reasonably anticipate issuing greater
than $10,000,000 of tax exempt obligations in calendar year 2011 (excluding certain private activity and
refunding bonds) and that it has properly designated the Bonds as "qualified tax exempt obligations"
within the meaning of Section 265(b)(3) of the Tax Code. Accordingly, Bond Counsel is of the opinion
that in the case of certain banks, thrift institutions or other financial institutions owning the Bonds, a
deduction is allowed for 80% of that portion of such institutions' interest expense allocable to interest on
the Bonds. Bond Counsel has expressed no opinion with respect to any deduction for federal tax law
purposes of interest on indebtedness incurred or continued by a holder of the Bonds or a related person to
purchase or carry the Bonds.
Original Issue Premium. Certain of the Bonds are being sold at a premium (each a "Premium
Bond "). An amount equal to the excess of the issue price of a Premium Bond over its stated redemption
price at maturity constitutes premium on such Premium Bond. An initial purchaser of a Premium Bond
must amortize any premium over such Premium Bond's term using constant yield principles, based on the
purchaser's yield to maturity (or, in the case of Premium Bonds callable prior to their maturity, by
4838 - 1985 - 2810.2 33
amortizing the premium to the call date, based on the purchaser's yield to the call date and giving effect to
the call premium). As premium is amortized, the amount of the amortization offsets a corresponding
amount of interest for the period and the purchaser's basis in such Premium Bond is reduced by a
corresponding amount resulting in an increase in the gain (or decrease in the loss) to be recognized for
federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity. Even
though the purchaser's basis may be reduced, no federal income tax deduction is allowed. Purchasers of
the Premium Bonds should consult with their tax advisors with respect to the determination and treatment
of premium for federal income tax purposes and with respect to the state and local tax consequences of
owning a Premium Bond.
Backup Withholding. As a result of the enactment of the Tax Increase Prevention and
Reconciliation Act of 2005, interest on tax exempt obligations such as the Bonds is subject to information
reporting in a manner similar to interest paid on taxable obligations. Backup withholding may be
imposed on payments made after March 31, 2007 to any bondholder who fails to provide certain required
information including an accurate taxpayer identification number to any person required to collect such
information pursuant to Section 6049 of the Code. The new reporting requirement does not in and of
itself affect or alter the excludability of interest on the Bonds from gross income for federal income tax
purposes or any other federal tax consequence of purchasing, holding or selling tax exempt obligations.
Changes in Federal and State Tax Law. From time to time, there are legislative proposals in the
Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred
to above or adversely affect the market value of the Bonds. It cannot be predicted whether or in what
form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to
enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is
threatened or commenced which, if implemented or concluded in a particular manner, could adversely
affect the market value of the Bonds. It cannot be predicted whether any such regulatory action will be
implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds or the
market value thereof would be impacted thereby. Purchasers of the Bonds should consult their tax
advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions
expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant
judicial and regulatory authorities as of the date of issuance and delivery of the Bonds and Bond Counsel
has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation,
regulatory initiatives or litigation.
MISCELLANEOUS
Ratings
Moody's Investors Service, Inc. ( "Moody's ") has assigned the municipal bond ratings shown on
the cover page hereof. Any explanations of the significance of such ratings (as well as any positive or
negative outlooks thereon or potential changes to any rating in the near future) should be obtained from
Moody's at Moody's Investors Service, 99 Church Street, New York, New York 10007. Generally, a
rating agency bases its rating on the information and materials furnished to it and on investigations,
studies and assumptions of its own. There is no assurance such ratings will continue for any given period
of time or that such ratings will not be revised downward or withdrawn entirely by a rating agency if in its
judgment circumstances so warrant. Any downward revision or withdrawal of any such ratings may have
an adverse effect on the market price of the Bonds.
4838 -1985- 2810.2 34
Underwriting
The Bonds are being sold by the City to the Underwriter at a discount of $ pursuant to a
bond purchase agreement entered into between the Underwriter and the City. Expenses associated with
the issuance of the Bonds are being paid by the City from proceeds of the Bonds. The right of the
Underwriter to receive compensation in connection with the Bonds is contingent upon the actual sale and
delivery of the Bonds. The Underwriter has initially offered the Bonds to the public at the prices or yields
set forth on the cover page of this Official Statement, plus accrued interest from the date of the Bonds.
Such prices or yields may subsequently change without any requirement of prior notice. The Underwriter
reserves the right to join with dealers and other investment banking firms in offering the Bonds to the
public.
Registration of Bonds
Registration or qualification of the offer and sale of the Bonds (as distinguished from registration
of the ownership of the Bonds) is not required under the federal Securities Act of 1933, as amended, or
the Colorado Securities Act, as amended. THE CITY ASSUMES NO RESPONSIBILITY FOR
QUALIFICATION OR REGISTRATION OF THE BONDS FOR SALE UNDER THE SECURITIES
LAWS OF ANY JURISDICTION IN WHICH THE BONDS MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED.
Continuing Disclosure Undertaking
Pursuant to the requirements of the Securities and Exchange Commission Rule 15c2 -12 (17 CFR
Part 240, § 240.15c2 -12) ( "Rule 15c2 -12 "), the City has covenanted, for the benefit of the holders of the
Bonds, to provide certain financial information and other operating data and notices of material events
after the Bonds are issued. The form of the City's Continuing Disclosure Undertaking for the Bonds is
attached as APPENDIX A to this Official Statement. Subject to the following sentence, the City has not
failed to comply with any continuing disclosure undertaking previously executed by it. In November
2009, the City provided material event notices in connection with various downgrades of certain insured
ratings of Ambac Assurance Corp. ( "Ambac ") and Financial Security Assurance Inc. ( "FSA ") and the
resulting downgrades of certain insured ratings of: (i) the City's Parks and Open Space Sales Tax
Revenue Bonds, Series 2001 and the City's Parks and Open Space Sales Tax Revenue Refunding Bonds,
Series 2005, both insured by financial guaranty insurance policies issued by Ambac, which downgrades
occurred in 2008 and 2009, and (ii) the City's Parks and Open Space Sales Tax Revenue Bonds, Series
2005B, and the Taxable Certificates of Participation (Isis Theater Project), Series 2007A evidencing
undivided interests in the right to receive certain revenues from the City under a Lease Purchase
Agreement dated as of February 1, 2007, both insured by financial guaranty insurance policies issued by
FSA, which downgrades occurred in 2008.
Interest of Certain Persons Named in This Official Statement
The legal fees to be paid to Kutak Rock LLP are contingent upon the sale and delivery of the
Bonds.
Independent Auditors
The basic financial statements of the City for the year ended December 31, 2010, which are
appended hereto, have been audited by independent auditor, McMahan and Associates, L.L.C., Certified
Public Accountants and Consultants, Avon, Colorado as stated in their report appearing therein.
4838- 1985- 2810.2 35
Additional Information
Copies of constitutional provisions, statutes, resolutions, agreements, contracts, financial
statements, reports, publications and other documents or compilations of data or information summarized
or referred to herein are available as described in "INTRODUCTION— Additional Information."
Official Statement Certification
The preparation of this Official Statement and its distribution have been authorized by the
Council. This Official Statement is not to be construed as an agreement or contract between the City and
any purchaser, owner or holder of' any Bond.
CITY OF ASPEN, COLORADO
By /s/
Mayor
4838- 1985 - 2810.2 36
APPENDIX A
FORM OF CONTINUING DISCLOSURE UNDERTAKING
This Continuing Disclosure Undertaking (the "Undertaking ") is executed and delivered as of
2011, by the City of Aspen, in Pitkin County, Colorado (the "City ").
Section 1. Purpose. This Undertaking is being executed and delivered by the City in connection
with the issuance of that certain issue of the City's General Obligation Refunding Bonds, Series 2011,
dated the date of delivery, in the aggregate principal amount of $ (the "Bonds "). The
Bonds are issued pursuant to an approving ordinance of the City finally adopted by the City Council (the
"Council ") prior to the issuance of the Bonds (the "Bond Ordinance "). This Undertaking is intended to
facilitate compliance with Section (b)(5) of Securities and Exchange Commission Rule 15c2 -12 under the
Securities Exchange Act of 1934, as amended (17 C.F.R. § 240.15c2 -12) (the "Rule "), and to assist the
Underwriter, as a Participating Underwriter under the Rule, to comply with the Rule.
Section 2. Definitions. Capitalized terms in this Section and elsewhere in this Undertaking shall
have the meanings set forth herein. Capitalized terms used but not defined herein shall have the meanings
set forth in the Bond Ordinance. The following capitalized terms shall have the following meanings for
purposes of this Undertaking:
"Annual Financial Information" means the financial information or operating data with respect to
the City, provided at least annually, of the type included in the following tables in the Final Official
Statement: Tables I, II, III, IV, V, VI, VII, VIII IX, X, XI, and XII. Any financial statements included in
the Annual Financial Information shall be prepared in accordance with generally accepted accounting
principles ( "GAAP ") and the Governmental Accounting Standards Board ( "GASB "). Such financial
statements may, but are not required to be, Audited Financial Statements.
"Audited Financial Statements" means the City's annual financial statements, prepared in
accordance with GAAP for governmental units as prescribed by GASB, which financial statements shall
have been audited by such auditor as shall be then required or permitted by the laws of the State of
Colorado.
"EMMA" means the MSRB's Electronic Municipal Market Access System, with a portal at
http://emma.msrb.org.
"Final Official Statement" means the final Official Statement with respect to the Bonds.
"Material Event" means any of the following events, if material, with respect to the Bonds:
(a) principal and interest payment delinquencies;
(b) nonpayment related defaults;
(c) unscheduled draws on debt service reserves reflecting financial difficulties;
(d) unscheduled draws on credit enhancements reflecting financial difficulties;
(e) substitution of credit or liquidity providers, or their failure to perform;
(1) adverse tax opinions or events affecting the tax exempt status of the Bonds;
(g) modifications to rights of holders of Bonds;
(h) bond calls (other than mandatory sinking fund redemptions);
(i) defeasances;
(j) release, substitution or sale of property securing repayment of the Bonds; and
(k) rating changes.
4838 -1985- 2810.2
"Material Event Notice" means written or electronic notice of a Material Event.
"MSRB" means the Municipal Securities Rulemaking Board. The current address of the MSRB is
Suite 600, 1900 Duke Street, Alexandria, Virginia 22314; Facsimile: (703) 797 6700.
Section 3. Information To Be Provided. The City undertakes to provide the following
information as provided herein:
(a) Annual Financial Information, which information may, at the option of the City, be
included in the Audited Financial Statements provided pursuant to clause (b) below or be provided
separately therefrom;
(b) Audited Financial Statements, if any; and
(c) Material Event Notices.
Section 4. Procedures for Providing Information.
(a) Annual Financial Information. While any Bonds are Outstanding, the City shall
provide the Annual Financial Information on or before July 31, 2012 and July 31 of each subsequent year
(the "Report Date ") to EMMA. If the City changes its fiscal year, it may change the Report Date to any
date within 210 days of the end of the City's new fiscal year by written notice of the change of fiscal year
and change in Report Date to EMMA. It shall be sufficient if the City provides to EMMA any or all of
the City's Annual Financial Information by specific reference to (i) documents previously provided to
EMMA; or (ii) documents filed with the Securities and Exchange Commission or, if such a document is a
final official statement within the meaning of the Rule, available from the MSRB.
(b) Audited Financial Statements. If not provided as part of the Annual Financial
Information provided pursuant to "— Annual Financial Information" above, the City shall provide the
Audited Financial Statements to EMMA, when and if such Audited Financial Statements are available
while any Bonds are Outstanding.
(c) Material Events. If a Material Event occurs while any Bonds are Outstanding, the City
shall, in a timely manner, provide a Material Event Notice to EMMA, which Material Event Notice shall
be captioned "Material Event Notice," shall prominently state the date, title and CUSIP numbers of the
Bonds and shall describe the Material Event.
(d) Notices of Failure To Provide Annual Financial Information. The City shall provide
in a timely manner to EMMA, notice of any failure by the City while any Bonds are Outstanding to
provide to EMMA, City's Annual Financial Information on or before the Report Date.
(e) Means of Transmitting Information. Unless otherwise required by law and subject to
technical and economic feasibility, the City shall employ such methods of information transmission as
shall be requested or recommended by the designated recipients of the information to be received
pursuant to this Undertaking.
Section 5. Termination. The obligations of the City under this Undertaking shall terminate
immediately once the Bonds no longer are Outstanding. This Undertaking, or any provision hereof, shall
be null and void in the event that the City delivers to EMMA, an opinion of Bond Counsel to the effect
that those portions of the Rule which require this Undertaking, or any such provision, are invalid, have
been repealed retroactively or otherwise do not apply to the Bonds; provided that the City shall have
4838 -1985- 2810.2 A -2
provided notice of such delivery and the cancellation of this Undertaking or any provision hereof to
EMMA.
Section 6. Amendment. Notwithstanding any other provision of this Undertaking, this
Undertaking may be amended by the City, without the consent of the holders of the Bonds, but only upon
the delivery by the City to EMMA, of the proposed amendment and an opinion of Bond Counsel to the
effect that such amendment, and giving effect thereto, will not adversely affect the compliance of this
Undertaking and by the City with the Rule and that such amendment complies with this Section. Any
such amendment shall satisfy, unless otherwise permitted by the Rule, the following conditions:
(a) The amendment may only be made in connection with a change in circumstances that
arises from a change in legal requirements, change in law or change in the identity, nature or status of the
City, or type of business conducted.
(b) This Undertaking, as amended, would have complied with the requirements of the Rule at
the time of the primary offering, after taking into account any amendments or interpretations of the Rule,
as well as any change in circumstances.
(c) The amendment does not materially impair the interest of holders of the Bonds, as
determined by Bond Counsel, or by approving vote of holders of the Bonds pursuant to the terms of the
Bond Ordinance at the time of the amendment.
The initial Annual Financial Information provided by the City hereto after the amendment shall
explain, in narrative form, the reasons for the amendment and the effect of the change in the type of
operating data or financial information being provided.
Section 7. No Event of Default. Any failure by the City to perform in accordance with this
Undertaking shall not constitute an Event of Default under the Bond Ordinance, and the rights and
remedies provided by the Bond Ordinance upon the occurrence of an Event of Default shall not apply to
any such failure. If the City fails to comply with this Undertaking, any Owner of a Bond may take such
actions as may be necessary and appropriate, including seeking specific performance by court order, to
cause the City to comply with its obligations hereunder.
Section 8. Governing Law. This Undertaking shall be governed by and construed in accordance
with the laws of the State of Colorado; provided that to the extent this Undertaking addresses matters of
federal securities laws, including the Rule, this Undertaking shall be construed in accordance with such
federal securities laws and official interpretations thereof.
Section 9. Beneficiaries. This Undertaking shall inure solely to the benefit of the Underwriter
and the holders from time to time of the Bonds, and shall create no rights in any other person or entity.
4838 - 1985- 2810.2 A -3
APPENDIX B
AUDITED GENERAL PURPOSE FINANCIAL STATEMENTS OF THE
CITY AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2010
4838 - 1985- 2810.2
APPENDIX C
ECONOMIC AND DEMOGRAPHIC INFORMATION
The following information is provided to give prospective investors general information
concerning selected economic and demographic conditions existing in the area within which the City of
Aspen (the "City") is located. The statistics presented below have been obtained from the referenced
sources and represent the most current information available from such sources; however, certain of the
information is released only after a significant amount of time has passed since the most recent date of the
reported data and therefore, such information may not be indicative of economic and demographic
conditions as they currently exist or conditions which may be experienced in the near future. Further, the
reported data has not been adjusted to reflect economic trends, notably inflation. Finally, other economic
and demographic information not presented herein may be available concerning the area in which the City
is located and prospective investors may want to review such information prior to making their
investment decision. The following information is not to be relied upon as a representation or guarantee
of the City of its officers, employees, or advisors.
Population
The following table sets forth population statistics for the City, Pitkin County (the "County") and
the State of Colorado.
Population
Percent Percent Percent
Year City of Aspen Change Pitkin County Change Colorado Change
1970 2,437 -- 6,185 -- 2,207,259 --
1980 3,678 50.9% 10,338 67.2% 2,889,964 30.9%
1990 5,049 37.3 12,661 22.5 3,294,394 14.0
2000 5,914 17.1 14,872 17.5 4,301,261 30.6
2010 6,658 12.6 17,148 15.3 5,029,196 16.9
Source: United States Department of Commerce, Bureau of the Census
Income
The following tables set forth historical median household effective buying income ( "EBP'), the
percentage of households by classification of EBI, and per capita personal income for Pitkin County, the
State and the United States.
4838 - 1985 - 2810.2
Median Household Effective Buying Income
2007 2008 2009 2010 2011
Pitkin County $56,252 $56,888 $58,447 $59,622 $54,105
Colorado 45,477 44,711 45,490 45,543 43,625
United States 41,255 41,792 42,513 43,252 41,368
Source: "Survey of Buying Power," Sales & Marketing Management, 2007 -2008, The Nielsen Company, Site Reports, 2009-
2011
Percent of Households by Household Income Groups -2011
Less Than $25,000- $50,000- $100,000- $150,000
$25,000 $49,999 $99,999 $149,999 or more
Pitkin County 15.0% 31.4% 34.6% 8.2% 10.8%
Colorado 22.3 35.2 32.0 6.7 3.8
United States 27.8 33.0 29.9 5.7 3.6
Source: The Nielsen Company, Site Reports, 2011
Per Capita Personal Income
2005 2006 2007 2008 2009
Pitkin County $82,141 $90,500 $94,581 $96,030 $84,264
Colorado 38,555 40,898 42,386 43,560 41,895
United States 35,424 37,698 39,461 40,674 39,635
Source: State of Colorado, Division of Local Government, Demographic Section
Housing Stock
According to the 2000 Census, Pitkin County had a total 10,096 housing units and the City of
Aspen had 4,354 housing units, compared to a total of 12,953 housing units in Pitkin County and 5,929
housing units in the City of Aspen in 2010, for a 10 -year increase of 28.3% and 36.2 %, respectively.
School Enrollment
The following table presents a five year history of school enrollment for Aspen School District
No. 1, the primary school district serving the District.
4838 - 1985 - 2810.2 C -2
Aspen School District No. 1
Percent
Year Fall Enrollment Increase
2006/2007 1,605 --
2007/2008 1,633 1.7%
2008/2009 1,656 1.4
2009/2010 1,698 2.5
2010/2011 1,727 1.7
Source: Colorado Department of Education
Building Permit Activity
Set forth in the following tables are historical building permit activity for the City of Aspen and
the County.
History of Building Permit Activity in the City of Aspen
Number of Residential
Year and Commercial Permits Value
2008 631 $170,741,048
2009 567 65,834,617
2010 622 70,236,849
2011 1 313 108,308,306
Building permits through June 30, 2011.
Source: Aspen/Pitkin County Building Department
History of Building Permit Activity Unincorporated Pitkin County
Non - residential Construction Residential Construction
Year Number of Buildings Value Number of Units Value
2006 33 $ 5,777,650 181 $115,438,374
2007 44 7,133,000 187 120,985,744
2008 32 11,989,400 137 130,387,911
2009 36 4,453,700 93 71,949,751
2010 24 4,018,000 102 76,295,044
2011 14 4,599,805 25 18,175,605
Building permits issued through May 24, 2011.
Source: Pitkin County Community Development
Foreclosure Activity
The following table sets forth the number of foreclosures filed within Pitkin County over the past
five years.
4838 -1985- 2810.2 C -3
History of Foreclosures — Pitkin County
Year Foreclosures Filed Percent Change
2006 24 60.0%
2007 15 (37.5)
2008 35 133.3
2009 105 200.0
2010 144 37.1
2011 1 51 --
1 Foreclosures filed through May 25, 2011.
Source: Pitkin County Public Trustee Office
Retail Sales
The following table sets forth retail sales figures as reported by the state for the City of Aspen,
Pitkin County and the State of Colorado.
Retail Sales
Percent City as % of
Year City of Aspen Change Pitkin County County Colorado
2005 $625,240,626 -- $ 979,221,076 63.9% $122,907,090,008
2006 713,501,707 14.1% 1,088,156,169 65.6 133,531,307,352
2007 740,256,106 3.7 1,285,247,011 57.6 147,780,642,005
2008 728,052,525 (1.6) 1,316,334,985 55.3 152,747,684,188
2009 606,542,688 (16.7) 1,170,986,427 51.8 134,058,592,796
2010 311,262,369 -- 485,565,715 64.1 65,068,969,965
1 Retail sales through June 30, 2010.
Source: State of Colorado, Department of Revenue, Sales Tax Statistics, 2005 -2010
Employment
The following tables set forth employment statistics by industry and the most recent historical
labor force estimates for Pitkin County.
4838- 1985 - 2810.2 C -4
Total Business Establishments and Employment — Pitkin County
Industry ' 2009 2010 Annual Change
Units Employment Units Employment Units Employment
Agriculture, Forestry, Fishing and
Hunting 12 56 12 56 -- --
Mining
Utilities 2 -- -- -- -- -- --
Construction 247 1,039 220 749 (27) (290)
Manufacturing 16 128 15 97 (1) (31)
Wholesale Trade 29 90 27 83 (2) (7)
Retail Trade 227 1,339 216 1,247 (11) (92)
Transportation and Warehousing 27 184 24 150 (3) (34)
Information 33 215 33 191 -- (24)
Finance and Insurance 74 298 69 283 (5) (15)
Real Estate and Rental and Leasing 225 1,205 206 1,143 (19) (62)
Professional and Technical Services 283 816 274 725 (9) (91)
Management of Companies and
Enterprises 15 30 13 32 (2) 2
Administrative and Waste Services 120 1,384 119 1,278 (1) (106)
Educational Services 15 239 14 220 (I) (19)
Health Care and Social Assistance 78 383 75 374 (3) (9)
Arts, Entertainment and Recreation 2 60 1,824 56 1,798 (4) (26)
Accommodation and Food Services 160 3,636 160 3,907 -- 271
Other Services, Except Public
Administration 228 703 229 673 1 (30)
Non - classifiable -- -- -- -- -- --
Government 26 1,957 26 1977 20
Total S 5 8 1 Z4 L 4 ) L 5_&l
' Information provided herein reflects only those employers who are subject to state unemployment insurance law.
2 Information suppressed due to confidentiality as set forth in State law. Totals may not add because they include figures for all employment
including suppressed information.
Source: Colorado Department of Labor and Employment, Labor Market Information, Quarterly Census of Employment and Wages (QCEW)
Colorado
Labor Force Estimates
Pitkin County Colorado
Year Labor Force % Unemployed Labor Force % Unemployed
2006 11,405 3.1% 2,655,556 4.3%
2007 11,416 2.7 2,698,646 3.7
2008 11,659 3.3 2,737,267 4.8
2009 11,140 6.8 2,727,625 8.3
2010 10,672 8.1 2,687,396 8.9
2011 11,449 8.2 2,669,029 9.1
1 Labor force estimate through May 31, 2011.
Source: State of Colorado, Division of Employment and Training, Labor Market Information, Colorado
Labor Force Review
Selected major employers in Pitkin County and the City of Aspen are set forth in the following
table. No independent investigation has been made of, and there can be no representation as to, the
stability or financial condition of the companies listed below, or the likelihood that such companies will
maintain their status as major employers in the area.
4838 - 1985 - 2810.2 C -5
Selected Major Employers in Pitkin County
Estimated Number of
Employer Employees
Aspen Skiing Company /Little Nell Hotel 3,600
Aspen Valley Hospital 389
Aspen (City of) 354
St. Regis Aspen Resort 268
Pitkin County 256
Roaring Fork Transit Agency 250
Aspen School District No. 1 (RE) 238
Silvertree Hotel of Snowmass 218
Ritz Carlton 188
Viceroy Snowmass Resort 150
Source: Pitkin County Comprehensive Annual Financial Report 2010
Ski Industry
Year round tourism and skiing related businesses account for a significant portion of the
employment and earned income of area residents on a year round basis. Aspen promotes summer
activities which include golf, tennis, hiking, horseback riding, rafting, backpacking, mountain climbing,
mountain biking, hot air ballooning, hang gliding, fly fishing. Aspen also provides conference facilities.
The Ski Industry in the State. Colorado Ski Country USA ( "CSCUSA "), is the not - for - profit
trade association representing 22 of Colorado's 26 ski and snowboard resorts. Not included in
CSCUSA's statistics are the Vail Resorts and its four ski areas of Vail, Beaver Creek, Keystone and
Breckenridge. On June 8, 2011, CSCUSA announced that its 22- member resorts hosted an estimated 6.9
million skier visits during the 2010 -11 ski season. This represents an increase of 2.6 %, or approximately
179,371 skier visits, compared to last season's final numbers. On a national level, CSCUSA reports that
for the 2010 -11 ski season, skier visits overall are up less than 1% percent with the Rocky Mountain
region seeing an increase of 1.7 %.
Pitkin County Ski Industry. The ski industry in Pitkin County has expanded from a
one - mountain operation in 1946 to four mountains today. The ski area operator is the Aspen Skiing
Company ( "ASC "). Its operation includes Aspen Mountain, Buttermilk, Snowmass and Aspen
Highlands. ASC also owns and operates the Little Nell Hotel in Aspen and the Snowmass Club in
Snowmass Village.
As reported by ASC on July 11, 2011, ASC is expected to invest over $26 million in on- mountain
improvements this year including a new lift at Buttermilk, a complete remodel of the Merry-Go -Round
restaurant on Aspen Highlands and the first phase of the new Elk Camp Restaurant at Snowmass. Over
the previous eight seasons, ASC reports that it has invested more than $164 million. Improvements over
that period include 11 new lifts with two new gondolas, the new Snowmass Base Village, the industry-
leading Treehouse Kids' Adventure Center, a complete interior remodel of The Little Nell Hotel, 4 new
restaurants, the acquisition of the Limelight Lodge, a resort-wide art exhibit, plus the opening of
additional terrain. International visitors accounted for more than 20% of winter business to
Aspen/Snowmass in the 2010 -11 season, with nearly one out of every five destination visitors coming
from outside the United States. The top international markets were Australia, Brazil, UK, Germany,
Mexico and Canada.
4838 - 1985 - 2810.2 C -6
Development of a 12 -acre site at the base of the Snowmass ski area ( "Base Village ") has been
undertaken by a private developer. Base Village was initially planned to include over one million square
feet of residential, hotel, restaurant, retail and conference space. Base Village presently includes a 25,000
square foot children's center (completed in December 2007), 15,000 square feet of conference space
(completed in December 2008), and new shops and restaurants (planned to total 64,000 square feet, of
which approximately half is completed). The development was also initially planned to include a
community aquatic center, two residential buildings branded as the Viceroy Snowmass Resort (completed
in December 2009; individual units in the sales process) and The Little Nell at Snowmass Hotel (partially
completed), and over 300 condominiums (partially completed). Construction of this project began in
2005. However, construction is presently on hold due to a pending foreclosure initiated by the
developer's construction lenders in early 2011 and, in connection therewith, the developer entity being
placed in receivership. As a result, there is no guaranty that the Base Village development will resume
and be completed as initially planned.
The following table summarizes skier visits to the four ski areas in Pitkin County for the 2005-
2006 through the 2009 -2010 ski seasons. Information regarding the annual skier visits for the 2010 -2011
ski season is not currently available from Pitkin County.
Annual Pitkin County Skier Visits 2005 -2006 Through 2009 -2010 '
Aspen Aspen Percentage
Ski Season Highlands Mountain Buttermilk Snowmass County Total Change
2005 -2006 193,224 324,468 159,081 768,010 1,444,803 --
2006 -2007 193,496 327,750 153,831 769,570 1,444,647 0.0%
2007 -2008 211,635 332,981 154,926 771,455 1,470,997 1.8
2008 -2009 183,710 284,781 120,084 694,773 1,283,348 (12.8)
2009 -2010 174,947 294,439 143,115 725,709 1,338,210 4.3
' Information regarding the annual skier visits for the 2010 -2011 ski season is not currently available from Pitkin County.
Source: Pitkin County
While increasing or decreasing from year to year depending on snow and economic conditions,
skier visits in Pitkin County have remained relatively constant for the last decade. The following table
compares skier visits in Pitkin County with those in Colorado and the nation:
Comparative Skier Visits in Pitkin County, the State of Colorado and the United States
(In Thousands)
County as Colorado
Pitkin Percent Percent of State of Percent as Percent United Percent
Ski Season County Change Colorado Colorado Change of U.S. States Change
2005 -2006 1,444 -- 11.5% 12,530 -- 21.3% 58,897 --
2006 -2007 1,446 0.1% 11.5 12,566 0.3% 22.8 55,068 (6.5)%
2007 -2008 1,471 1.8 11.7 12,540 (0.2) 20.7 60,502 9.9
2008 -2009 1,283 (12.8) 10.8 11,855 (5.5) 20.7 57,354 (5.2)
2009 -2010 1,338 4.3 11.2 11,850 0.0 20.7 57,100 (0.4)
2010 -2011 Ma -- -- 12,180 2 2.8 20.1 60,540 6.0
' Information regarding the annual skier visits for the 2010 -2011 ski season is not currently available from Pitkin County.
2 Estimate derived from CSCUSA 22- member resort percentage increase.
Sources: Colorado Ski Country USA and the National Ski Areas Association
4838- 1985 - 2810.2 C -7
Other Recreational and Cultural Activities in the County
Tourists visiting the County's many scenic, historical and recreational areas are a significant
contribution to the County's economy. Cultural activities in the County include the Aspen Institute for
Humanistic Studies, the Aspen Center for Physics, the nine -week Aspen Music Festival and School, Jazz
Aspen at Snowmass, the Aspen Food and Wine Classic, the International Design Conference, the HBO
Comedy Festival, the Aspen Center for Environmental Studies, Aspen Theatre in the Park, Aspen
FilmFest, Wheeler Opera House, Wheeler - Stallard House Museum, the Aspen Arts Museum and the
Anderson Ranch Arts Center. Summer recreational activities in the County include rafting, horseback
riding, backpacking and mountain climbing, mountain biking, hot -air ballooning, hang - gliding, fishing,
tennis, golf, the Aspen Ruggerfest and Motherlode Volleyball Classic.
4838 - 1985 - 2810.2 C -8
APPENDIX D
FORM OF BOND COUNSEL OPINION
4838 - 1985- 2810.2
APPENDIX E
BOOK ENTRY ONLY SYSTEM
The information in this section concerning The Depository Trust Company ( "DTC) New York,
NY and DTC's book -entry -only system has been obtained from DTC, and the City and the Underwriter
take no responsibility for the accuracy thereof.
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully- registered
securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may
be requested by an authorized representative of DTC. One fully- registered certificate will be issued for
the Bonds, as set forth on the cover page hereof, in the aggregate principal amount of each maturity of the
Bonds and deposited with DTC.
DTC, the world's largest securities depository, is a limited - purpose trust company organized
under the New York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over
3.5 million issues of U.S. and non U.S. equity issues, corporate and municipal debt issues, and money
market instruments (from over 100 countries) that DTC's participants ( "Direct Participants ") deposit with
DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other
securities transactions in deposited securities, through electronic computerized book -entry transfers and
pledges between Direct Participants' accounts. This eliminates the need for physical movement of
securities certificates. Direct Participants include both U.S. and non U.S. securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly -owned
subsidiary of The Depository Trust & Clearing Corporation ( "DTCC "). DTCC is the holding company
for DTC, National Securities Clearing Corporation & Fixed Income Clearing Corporation, all of which
are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the
DTC system is also available to others such as both U.S. and non U.S. securities brokers and dealers,
banks, trust companies and clearing corporations that clear through or maintain a custodial relationship
with a Direct Participant, either directly or indirectly ( "Indirect Participants "). DTC has Standard &
Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities
and Exchange Commission. More information about DTC can be found at www.dtcc.com and
www.dtc.org.
Purchases of the Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual
purchaser of each Bond ( "Beneficial Owner ") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership
interests in the Bonds, except in the event that use of the book entry- system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration
in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership.
4838 - 1985- 2810.2
DTC has no knowledge of the actual Beneficial Owners of Bonds; DTC's records reflect only the identity
of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the
Beneficial Owners. The Direct and Indirect Participants remain responsible for keeping accounts of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Beneficial Owners of the Bonds may wish to take
certain steps to augment the transmission to them of notices of significant events with respect to the
Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For
example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for
their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial
Owners may wish to provide their names and addresses to the registrar and request that copies of notices
be provided directly to them.
Redemption notices will be sent to DTC. If less than all of the Bonds within an issue are being
redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its
usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds are to be made to Cede
& Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's
practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail
information from the City or Paying Agent, on payable date in accordance with their respective holdings
shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of such Participant and not of
DTC, the Paying Agent or City, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co.
(or such other name as may be requested by an authorized representative of DTC) is the responsibility of
the City or the Paying Agent, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Bonds purchased or tendered, through its
Participant, to Tender or Remarketing Agent, and shall effect delivery of such Bonds by causing the
Direct Participant to transfer the Participant's interest in the Bonds, on DTC's records, to Tender or
Remarketing Agent. The requirement for physical delivery of the Bonds in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are
transferred by Direct Participants on DTC's records and followed by a book -entry credit for tendered
Bonds to Tender or Remarketing Agent's DTC account.
DTC may discontinue providing its services as securities depository with respect to the Bonds at
any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the
4838 -1985- 2810.2 E -2
event that a successor securities depository is not obtained, Bond certificates are required to be printed
and delivered.
The City may decide to discontinue use of the system of book entry only transfers through DTC
(or a successor securities depository). In that event, bond certificates will be printed and delivered to
DTC.
4838 -1985- 2810.2 E -3
MEMORANDUM
TO: Aspen City Council
FROM: Jessica Garrow, City Long Range Planner nQ
Ben Gagnon, City Special Projects Planner ("y
Chris Bendon, City Community Development Director
RE: 2011 Aspen Area Community Plan (AACP)
DATE OF MEMO: August 26, 2011
DATE OF MEETING: August 30, 2011
Meeting Purpose:
The purpose of the meeting is threefold: to provide an overview of and orientation to the draft
plan, summarize the P &Z's process to date and going forward, and provide options to City
Council for the final review and adoption of the 2011 AACP
Action Requested:
This memo is intended to outline the current draft of the AACP, as well as potential options for
City Council review. Staff is requesting feedback from City Council regarding the review and
adoption of the AACP. Staff will present the Historic Preservation Chapter at the meeting to
help provide an overview of the document's format. In addition, staff will present an overview
of some of the major policy items in the plan, including mitigation, house size, and pacing
construction.
Summary:
The City and County P &Zs have been finalizing the 2011 draft AACP since April of this year,
and expect to wrap up in the coming weeks. The P &Zs have not finalized their work, but have
finished their review of a substantial portion of the document. Because their work is ongoing,
staff will provide copies of the latest draft at the work session.
In the County, the P &Z adopts the AACP and the BOCC ratifies the plan. In the City, the P &Z
recommend City Council adopt a draft plan, and City Council adopts the final AACP.
The City P &Z has recommended that the AACP be guiding. In the County, the document is
considered an "advisory" document.
Council Review Options: There are a number of options for council to review and adopt the
AACP. Staff is requesting direction from City Council on how you would like to proceed with
the review. Staff is able to accommodate any type of review process, but is interested to hear
what will work best for City Council. Currently, Monday September 19 and Tuesday
September 20 are scheduled as work sessions for Council to review the document.
Staff has a list of questions to consider regarding this topic:
Page 1 of
1. What kind of review process would City Council like? One option is to take 4 -5
meetings to review the document with a focus on specific issues or chapters, but not go
through the document line by line. Another, option is to review the document chapter by
chapter. Based on staff's experience with this process at the P &Z level, this would likely
be 15 — 20 meetings.
2. What kind of timing would Council like to see? With budget coming up, there are not
many available work sessions. Is Council interested in working on the AACP while also
working on the Budget? Would Council like to wait to review the document until after
budget review?
3. Does City Council want to hold special meetings to review the AACP? The AACP is a
large document, and there are many members of the public interested in providing
comments. It may be difficult to fit regular business and the AACP into the same
meetings due to the large scope and detail of the AACP. The P &Zs have held special
meetings on the AACP in order to limit its impact on current planning cases.
4. How would City Council like to work with the BOCC during the adoption phase? It may
be beneficial to have City Council and the BOCC reviewing the document together to
ensure consistency in the plan. Each jurisdiction adopts the plan differently: The City
Council is the final review and adopting body for the AACP in the City, after considering
a recommendation from the P &Z. In the County, the P &Z adopts the plan and the
BOCC "ratifies" the plan.
Alternatively, City Council and BOCC could hold a few joint meetings to discuss major
issues. Because the plan covers areas of both the city and the county, it may be
beneficial for City Council and the BOCC to discuss specific issues that cross
jurisdictional lines. These could include mitigation, growth management, economics, and
housing. The BOCC is not currently scheduled to review the document, but staff has
asked if they are interested in joining City Council for the September 20 work session.
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