SUBJECT:
Title
An Ordinance Concerning the Financing of the Acquisition and Construction of a Police Facility and Related Improvements and Other Capital Improvements of the Town, and In Connection Therewith Authorizing the Execution and Delivery By the Town of A Site Lease Agreement, A Lease Purchase Agreement, and Other Documents Related Thereto; and Providing Other Matters Related Thereto
Department
DEPARTMENT: Finance
Presenter
PRESENTER(S): Sara Hancock, Director of Finance
Mattie Prodanovic, Hilltop Securities
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Time
TIME ESTIMATE: 30 minutes
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For time estimate: please put 0 for Consent items.
Fiscal
FISCAL SUMMARY:
N/A
Policy
POLICY ISSUES:
Financing the Public Safety Building and Mine Mitigation projects is within the purview of the Town Council.
Recommendation
STAFF RECOMMENDATION:
Approve the ordinance.
Body
SUMMARY/KEY POINTS
This ordinance is required to facilitate the execution and delivery of Certificates of Participation (COPs) for the Town of Erie’s Public Safety Building and Mine Mitigation projects.
• The Ordinance, if approved by Council, establishes certain parameters within which the COPs may be issued.
• The Town will participate in a ratings call, receive a credit rating, and post the preliminary offering statement.
• Once complete, the COPs will be priced and the Town will close, with funds available for the projects.
BACKGROUND OF SUBJECT MATTER:
On Nov. 18, 2025, the Town Council approved the 2026 Budget, which included three projects to be funded through Certificates of Participation (COPs). The Public Safety Building (maximum cost $47 million), Town Center mine mitigation ($5.1 million), and Erie Community Center mine mitigation ($2 million). All projects are anticipated to be under construction in 2026. The budget includes an anticipated COP payment of $3,190,199 in 2026. Any overage for the payment can be identified and appropriated in a supplemental process.
In anticipation of these projects being funded through COPs, the Town Council also approved a reimbursement resolution for these projects. This allows staff to continue the design, preparation, and initial construction on the projects and reimburse the expenses with debt proceeds from the COPs.
Public Safety Building
The largest portion of the net proceeds of the COPs are expected to be used to finance the acquisition, construction, installation, equipping and improvement of a police station facility. Specifically, the existing Erie Police Department (EPD) building is undersized for current operations and various spaces such as storage rooms have been converted into offices to accommodate staff needs. In 2024, EPD had 60 staff members and is projected to eventually grow to approximately 130 staff members.
This project will include extensive remodeling of the existing EPD building along with two proposed building additions: a one-story addition at the southeast corner of the existing building, which is proposed to be 2,382 square feet, and a two-story addition along the entire west side of the existing building, which is proposed to be 27,996 square feet, bringing the total gross square footage of the entire proposed building to 48,349 square feet. Overall, 56 public parking spaces and 95 staff parking spaces will be provided with the new site layout.
Town Center and ECC Mine Mitigation
The remainder of the proceeds of these COPs will be used to complete mine mitigation at the Erie Town Center development site, located at the northwest corner of Erie Parkway and County Line Road, and a portion of the Erie Community Center property, located at the northeast corner of Erie Parkway and County Line Road. The mitigation will include acquiring, constructing, installing and equipping structural support for buildings and other infrastructure constructed above historic subsurface mines. The Town has partnered with Evergreen Devco Inc. for Phase 1 of Erie Town Center to develop a grocery store, multiple commercial pads and retail shops buildings, surface parking, and public roads. The Town intends to construct additional outdoor recreation courts on the Erie Community Center site. The underground mine subsidence mitigation is necessary for both projects given the history of mining on these sites.
Current Financing Estimates
The Town is using COPs to finance the Public Safety building and the mine mitigation. COPs have no directly pledged revenues, like General Obligation or Revenue Bonds, but are subject to annual appropriation by the Council. The Town has built the anticipated payments into the long-term financial plan to demonstrate the Town’s ability to continue to appropriate the debt service payment:
COPs will not result in a tax increase. The payment is not considered a multi-year obligation under TABOR. However, the Town will treat this obligation as debt for fiscal planning purposes.
At the maximum issuance amount of $54 million for all projects, the current estimates for a 30-year maturity on the COPs would have an annual debt service payment of approximately $3.4 million. This is approximately $300,000 more than budgeted. Staff will identify a source of funds for the final overage and appropriate in supplemental, if needed. The final payment is dependent on the final interest rate (currently estimated at 4.9%) and the final Guaranteed Maximum Price (GMP) of the Public Safety building.
The COPs will be issued in two Series:
• Tax-exempt to fund $47 million for the public safety building.
• Taxable to fund $7 million for the mine mitigation.
The taxable portion may change, as the ECC is currently included in that calculation and is likely eligible for tax exempt status.
The preliminary schedule for payments and total cost are:
Ordinance Parameters
The Ordinance being considered by Council establishes certain parameters within which the COPs may be issued upon final acceptance by the Town Manager or Finance Director.
• The Site Lease Termination Date shall be no later than Dec. 31, 2065; the Lease Term shall not extend beyond Dec. 31, 2055;
• The combined aggregate principal amount of the Base Rentals payable by the Town pursuant to the Lease for one or more series of COPs (both taxable and tax exempt) shall not exceed $55,000,000;
• The combined maximum annual repayment amount of Base Rentals payable by the Town pursuant to the Lease for one or more series of COPS (taxable and tax-exempt) shall not exceed $4,600,000;
• The combined maximum total repayment amount of Base Rentals payable by the Town pursuant to the Lease for one or more series of COPs (taxable and tax-exempt) shall not exceed $212,000,000;
• The Lease shall be subject to prepayment at the option of the Town, without penalty, no later than Dec. 1, 2036; and
• The combined maximum net effective interest rate on the interest component of the Base Rentals relating to one or more series of Certificates shall not exceed 5.5%.
These parameters set in the Ordinance are maximums that cannot be exceeded without future Council approval. It is expected that the actual pricing results will be less than what is established above.
priorities
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attachments
ATTACHMENT(S):
1. Presentation
2. Ordinance
3. Indenture
4. Site Lease - 2026 COPs
5. Lease - 2026 COPs
6. Continuing Disclosure Certificate