Bond Debt

• $5,369,882 was allocated to financing or reimbursing the costs of public improvements related to development within the District;
  
  
•  $820,525 was allocated as capitalized interest on the Senior Bonds;
  
  
• $596,613 was allocated to fund the Senior Reserve Fund; and
  
  
• $347,980 was allocated to pay the costs of issuing the Senior Bonds. 

The Senior Bond was issued as a term bond that bear interest at 5.750%, and is payable semi-annually on June 1 and December 1, beginning on June 01, 2020. Annual mandatory sinking fund principal payments are due on December 1, beginning on December 1, 2023. The Senior Bonds mature on December 1, 2050. In the event any amounts due and owing on the Senior Bonds remain outstanding on December 16, 2060, such amounts shall be deemed discharged and shall no longer be due and outstanding.

The Senior Bonds are secured by and payable solely from Senior Pledged Revenue, net of any costs of collection, which is comprised of the following:

• all Senior Property Tax Revenues (generated by the imposition of the Senior Required Mill Levy);
  
• all Senior Specific Ownership Taxes (attributable to the Senior Required Mill Levy);
• any other legally available amounts that the District determines, in its absolute discretion, to credit to the Senior Bond Fund.

Amounts on deposit in the Senior Reserve Fund and, prior to the Conversion Date, amounts on deposit in the Senior Surplus Fund also secure payment of the Senior Bonds. Available Senior Pledged Revenue, if any, is to be first accumulated in the Senior Reserve Fund up to $596,613 (“Required Reserve”) and second accumulated in the Senior Surplus Fund up to $713,500 (“Maximum Surplus Amount”).

The Senior Bonds are subject to redemption prior to maturity, at the option of the District on June 01, 2025, and on any date thereafter, upon payment of par, accrued interest, and a redemption premium equal to a percentage of the principal amount so redeemed, as follows:

Series 2020B Subordinate Bonds

On April 14, 2020, the District issued $1,244,000 Subordinate General Obligation Limited Tax Bonds, Series 2020B (the Subordinate Bonds). The proceeds from the sale of the Subordinate Bonds were used as follows:

• $1,206,680 was allocated to financing or reimbursing public improvements related to the development within the District; and
  
  
• $37,320 was allocated to pay costs in connection with the issuance of the Subordinate Bonds
  

The Subordinate Bonds were issued at the rate of 8.25% per annum and are payable annually on December 15, beginning December 15, 2020, from, and to the extent of, Subordinate Pledged Revenue available, if any, and mature on December 15, 2050. The Subordinate Bonds are structured as cash flow bonds meaning that there are no scheduled payments of principal or interest prior to the final maturity date. Unpaid interest on the Subordinate Bonds compounds annually on each December 15. In the event any amounts due and owing on the Subordinate Bonds remain outstanding on December 16, 2060, such amounts shall be deemed discharged and shall no longer be due and outstanding.

The Subordinate Bonds are secured by and payable from Subordinate Pledged Revenue, net of any costs of collection, which includes:

• all Subordinate Property Taxes (generated by the imposition of the Subordinate Required Mill Levy);
• all Subordinate Specific Ownership Taxes (attributable to the Subordinate Required Mill Levy);
• any amounts in the Senior Surplus Fund upon the termination of such fund pursuant to the terms of the Senior Indenture; and
• any other legally available moneys which the District determines, in its absolute discretion, to credit to the Subordinate Bond Fund.

Under the Subordinate Indenture, any amounts in the Senior Surplus Fund (which is funded up to the Maximum Surplus Amount) upon termination of such fund are pledged to the payment of the Subordinate Bonds.

The Subordinate Bonds are subject to redemption prior to maturity, at the option of the District on June 01, 2025, and on any date thereafter, upon payment of par, accrued interest, and a redemption premium equal to a percentage of the principal amount so redeemed, as follows:

Per the 2020 Financial Forecast included with the Subordinate Bond Offering document, the Subordinate Bonds are projected to only be partially repaid by December 16, 2060. Interest payments per the 2020 Financial Forecast totaled $11,695,834, which equates to an annual net effective interest rate of 23.1%. Per TABOR elections held on May 08, 2018, November 04, 2014 and May 02, 2006, the eligible voters within the District approved the issuance of debt with a net effective interest rate that cannot exceed 18%.

Series 2020C Second Subordinate Bonds

On May 04, 2020, the District issued $1,533,000 Taxable Second Subordinate General Obligation Limited Tax Bonds, Series 2020C (“Second Subordinate Bonds”). The proceeds from the sale of the Subordinate Bonds were used as follows:

• $1,483,670 was allocated to financing or reimbursing public improvements related to the development within the District; and
  
  
• $49,330 was allocated to pay costs in connection with the issuance of the Second Subordinate Bonds
  

The Second Subordinate Bonds accrue interest at the rate of 3.00% from the date of issuance to May 31, 2025 and an interest rate of 8.25% from June 01, 2025 to the maturity date of December 15, 2050. Interest is payable annually on December 15, beginning December 15, 2020, from, and to the extent of, Second Subordinate Pledged Revenue is available, if any. The Second Subordinate Bonds are structured as cash flow bonds meaning that there are no scheduled payments of principal or interest prior to the final maturity date. Unpaid interest on the Second Subordinate Bonds compounds annually on each December 15. In no event is any principal or interest to be paid on the Second Subordinate Bonds until the Subordinate Bonds, and to the extent required by the applicable Senior/Subordinate Obligation Indentures, any other Senior/Subordinate Obligations, have been paid in full or defeased.

The Second Subordinate Bonds are secured by and payable from Junior Lien Pledged Revenue, net of any costs of collection, which includes:

• all Junior Lien Property Taxes (generated by the imposition of the Junior Lien Required Mill Levy);
•  all Junior Lien Specific Ownership Taxes (attributable to the Junior Lien Required Mill Levy);
• any other legally available moneys which the District determines, in its absolute discretion, to credit to the Junior Lien Bond Fund.

The Second Subordinate Bonds are subject to redemption prior to maturity, at the option of the District on June 01, 2025, and on any date thereafter, upon payment of par, accrued interest, and a redemption premium equal to a percentage of the principal amount so redeemed, as follows:

Issuance of the Second Subordinate Bonds was approved by the District’s board, all of whom were employees of the District’s largest contractor, Century at Mayfield, LLC. The Second Subordinate Bonds were purchased by Century Communities Investments, LLC, a company controlled by the same ownership group that owns and controls Century at Mayfield, LLC.