§ 2-335. PID operations and debt financing.

(a)

PID administration expense fee. In addition to the amounts set forth in section 2-334(a), upon formation of a PID, the applicant shall deposit with the PID a nonrefundable administrative expense fee (the "administrative expense fee") in the amount of $5,000.00. The administrative expense fee shall be applied by the PID to the costs and expenses incurred in connection with the formation, election costs, administration, operation and maintenance of the PID or its public improvements. From time to time, upon depletion of the administrative expense fee, the PID may request, and the applicant shall promptly deposit with the PID, additional amounts deemed by the PID to be reasonably necessary for the purposes contemplated in this section 2-335(a). Nothing in this section 2-335(a) shall preclude the reimbursement of such expenses from PID taxes, levies, charges or bond proceeds, as permitted by the Act.

(b)

Administration, operation and maintenance charges. In order to provide for the PID to be self-supporting for its administrative, operation and maintenance expenses, and to finance services in addition to those provided by the county, the county may condition its approval of a PID upon the PID's imposition of up to $3.00 per $1,000.00 of assessed value ad valorem tax. The PID's imposition of such administration, operation and maintenance charges would not be a tax or charge of the county, but would be imposed in accordance with the provisions of Section 5-11-23 NMSA 1978, as amended, upon the PID taxable property, for the administration, operation and maintenance of property which is not county-owned infrastructure otherwise maintained by the county. However, to the extent permitted by law, the PID shall be entitled to charge such rates, fees and charges to property owners as are necessary to address any shortfall in the expense required to operate and maintain the PID's improvements, including, but not limited to, the administrative expenses of the county treasurer relating to the collection and disbursement of levies and taxes imposed by the PID. Such rates, fees and charges shall be established in the development agreement for the PID. Nothing in this section shall be construed as limiting the authority of a PID to impose a special levy or other PID charges for administration, operation and maintenance expenses to the extent permitted under the Act and determined to be feasible by the county or the PID board, as applicable.

(c)

General obligation bonds. General obligation bonds of the PID shall be payable from an ad valorem tax on all taxable property located within the PID designated by the general plan for the PID as subject to the PID property tax as required by the Act.

(1)

An applicant for general obligation bonds shall describe to the PID board in a project feasibility report, the following:

a.

The current direct and overlapping tax and assessment burden on the taxable property that is proposed to be taxed and the fair market value and assessed valuation of the taxable property as shown on the most recent assessment roll.

b.

The projected amount and timing of PID general obligation bonds to be issued.

c.

The projected market absorption of development within the PID.

d.

The effect of the PID bond issuance on PID tax rates, calculated at the beginning, middle and end of the market absorption period or based on the phasing of the project to be financed, as applicable.

e.

An estimate of the applicant's construction costs associated with the public improvements, in excess of the estimated PID funded costs of the project.

f.

The necessity of the applicant and the PID entering into a contribution agreement, which may require a letter of credit or other third-party guarantee by the applicant.

(2)

The projected tax rate for debt service set forth in the feasibility report shall be established in the PID development agreement, and may include provisions which (i) limit the maximum tax rate that will be imposed by the PID for the payment of debt service on PID bonds, (ii) require a contribution agreement from the applicant for the payment of debt service in the event of a shortfall in revenue from the PID tax revenues projected in connection with, and at the time of, PID formation, or (iii) establish, to the county's satisfaction, other protection for homeowners or other end-users of the property located in the PID against excessive tax rates in the event that PID indebtedness exceeds PID tax revenues available to pay debt service in any particular year. The county shall exercise its foreclosure rights associated with the non-payment of property taxes by owners of property located within the PID and reimburse the applicant, upon the applicant's written request, for any payments made by the applicant to cover shortfalls in revenue necessary to pay debt service resulting from the nonpayment of property taxes by such owners.

(d)

Special levy bonds. Special levy bonds shall be secured by a first lien (co-equal to the lien for general taxes and prior special assessments) on the property benefited in the manner contemplated by Section 5-11-20(G) NMSA 1978.

(1)

Applicants for special levy bonds shall describe in each project feasibility report, the following:

a.

The current direct and overlapping tax assessment burdens and special levy on real property to comprise the PID and the full cash value and assessed valuation of that property as shown on the most recent assessment roll.

b.

The projected amount and timing of PID special levy bonds to be issued.

c.

The projected market absorption of development within the PID.

d.

The special levy burden to be placed on the prospective assessed parcels and the anticipated methodology of assessment.

e.

An estimate of the applicant's construction cost associated with the public improvements in excess of the estimated PID funded costs of the project.

f.

The necessity of the applicant and the PID entering into a contribution agreement, which may require a letter of credit or other third-party guarantee by the applicant.

(e)

Revenue bonds. Revenue bonds shall be payable from a PID revenue source.

(1)

An applicant for revenue bonds shall describe in each project feasibility report, the following:

a.

The current fee structure for comparable services or otherwise incurred by persons who would be responsible for paying the proposed rates, fees, and charges.

b.

The revenue source from which bonds shall be payable. The county reserves the right to require the applicant to produce such independently prepared feasibility studies or reports as it deems necessary to confirm the amount and availability of revenues.

c.

The projected market absorption of development within the PID.

d.

The projected amount and timing of PID revenue bonds to be issued.

e.

The financial impact of the proposed rates, fees and charges on prospective residents or other users of such rates, fees and charges.

f.

An estimate of the applicant's construction cost associated with the public improvements in excess of the estimated PID funded costs of the project.

g.

The necessity of the applicant and the PID entering into a contribution agreement, which may require a letter of credit or other third-party guarantee by the applicant.

(f)

Suitability. The county, in its sole discretion, may require that the PID only have the power to sell the proposed bonds to suitable investors. If the county chooses to impose limitations on the PID's power to sell the proposed bonds to suitable investors and the proposed bond issue is not rated (either on its own merits or by the use of appropriate credit enhancement) investment grade by Standard & Poor's Corporation, Moody's Investors Services, Inc., Fitch Investors Services, Inc. or any other nationally recognized bond-rating agency service, then the county may require that the bonds must have minimum denominations of $100,000.00 and be available for purchase and restricted with respect to resale to "qualified institutional buyers" (as such term is defined in Rule 144A of the Securities and Exchange Commission) or to "accredited investors" (as such term is defined in Rule 501 of Regulation D of the Rules Governing the Limited Offering and Sale Securities without Registration under the Securities Act of 1933). The county may choose to have investor suitability achieved through the rating requirements set forth in the preceding sentence or the establishment of large minimum denominations (e.g. not less than $100,000.00) and, if the county determines it is appropriate, covenants limiting secondary market sales of PID bonds through registered broker-dealers. Notwithstanding the restrictions pertaining to public sales and private placements of bonds which the county may impose pursuant to this section, the restrictions may be modified or waived if other financing structures or features are presented which, in the sole discretion of the board, provide other means to address investor suitability concerns. The minimum denomination requirements set forth above for PID bonds which are initially issued without rating shall not continue to apply if the PID subsequently obtains an investment grade rating.

(g)

Bond counsel. The county's bond counsel shall act as bond counsel in connection with the issuance of any PID bonds and shall be compensated by the applicant or from the proceeds of any bonds issued by the PID or both. From time to time the county may request from bond counsel such opinions as it deems necessary in connection with the formation and activities of the PID. The applicant shall retain and compensate its own counsel to represent the applicant with regard to the formation of the PID and the financing of any projects and may be reimbursed from the proceeds of PID bonds as permitted by law.

(Ord. No. 2007-17, § 5, 9-25-07)