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HomeMy WebLinkAbout2006-06-06 Support Documentation Town Council Evening SessionTOWN COUNCIL EVENING SESSION AGENDA 6:00 P.M., TUESDAY, JUNE 6, 2006 VAIL TOWN COUNCIL CHAMBERS 75 S. Frontage Road W. Vail, CO 81657 NOTE: Times of items are approximate, subject to change, and cannot be relied upon to determine at what time Council will consider an item. 1 • ITEM/TOPIC: Citizen Participation. (10 min.) 2• ITEM/TOPIC: Consent Agenda. (5 min.) a. Approval of 05.02.06 and 05.16.06 Minutes. 3. Greg Hall ITEM/TOPIC: Construction Update. (5 min) 4. Michael Jenkins ITEM/TOPIC: Presentation of 2005 Audit Report. (20 min.) ACTION REQUESTED OF COUNCIL: None. BACKGROUND RATIONALE: None. STAFF RECOMMENDATION: None. 5. Bill Gibson ITEM/TOPIC: An appeal, pursuant to Section 12-3-3, Appeals, Vail Town Code, of the Town of Vail Planning and Environmental . Commission's denial of a variance from Section 12-6C-8, Density Control, and Section 12-6C-9, Site Coverage, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1, and setting forth details in regard thereto. (5 min.) ACTION REQUESTED OF COUNCIL: Uphold, overturn, or modify the Planning and Environmental Commission's denial of the variance applications pursuant to Section 12-3-3, Appeals, Vail Town Code. The Council may also grant a continuance of this item (i.e. table) to a future public hearing date, pursuant to Sub- section 12-3-3-G3, Procedures, Vail Town Code. BACKGROUND RATIONALE: On July 25, 2005, the Planning and Environmental Commission approved variances from Section 12-6C-6, Setbacks, Section 12-6C-8, Density Control, and Section 12-6C-9, Site Coverage, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential garage addition and elevator/entry addition at 1448 Vail Valley Drive. The Vaii Town Council "called-up" the Planning and Environmental Commission's decision at its August 2, 2005, public hearing. On September 6, 2005, the Council upheld the setback variance and site coverage variance to accommodate the garage addition. However, the Council denied the variance requests for additional site coverage and gross residential floor area to allow for the elevator/entry addition. The applicant has reapplied for site coverage .and gross residential floor area variances for the same elevator/entry addition denied by the Council last September. On April 10, 2006, the Planning and Environmental Commission again denied the appellants' variance requests. The appellants subsequently appealed of this decision. The appellant is now requesting that the Council grant a continuance (i.e. table) this item. 'to June .20, 2006; so the appellant may appear at the hearing. in person. STAFF RECOMMENDATION: Staff recommends the Town Council grant a continuance of the review of this item (i.e. table) to its June 20, .2006, public hearing `'to allow the parties time to obtain informatiorf', pursuant to Sub-section 12-3-3-C3, Procedures, Vail Town Code. 6. Kathleen Halloran ITEM/TOPIC: Council Out of Cycle Contribution Requests for 2006. (30 min.) ACTION REQUESTED OF COUNCIL: 2006 "out of cycle" contribution requests that have been submitted to staff on May 24, 2006, for 2006 funding. Staff. requests direction from Council regarding proposed contributions. Out-of-Cvc9e Funding: The purpose of the mid-year review is to provide an opportunity for organizations that have newly identified projects or unforeseen changes to their budgets to come forward all at the same time. The Town Council evaluates the various proposals based on their direct benefit 'to the entire community of Vail, fulfillment of the Town's mission, and how this contribution will affect our resort community's future health. The Town Council's mission statement reads: In order to be the premier mountain resort community, we're committed to providing citizens and guests with a superior level of environmentally-sensitive services and an abundance of recreational, educational, and cultural opportunities. A: Vail Valley Music Festival BACKGROUND INFORMATION: Bravo! Vail Valley Music Festival is requesting $50,000 to help fund travel, administration, marketing, advertising and promotional expenses that will occur in 2006 for the 2007 Philadelphia Orchestra -Vail Residency program. The program was not finalized until after the deadline for the original 2006 contribution requests. STAFF RECOMMENDATION: Historically, the Town of Vail has contributed funding toward the Tier One New York Philharmonic / Vail program. Because this program was not finalized until after 2006 contribution requests, it falls within the criteria for "a newly identified project or .unforeseen changes." Staff recommends funding this request based on the caliber of this group and the fact that the Philadelphia Orchestra, although not perceived to be quite at the level of the New York Philharmonic, also resides in this Tier One category. The cultural benefit to the Town of Vail and the tourist attraction of this event are also factors in staff's recommendation for funding. B. Vail Chamber & Business Association (VCBA) BACKGROUND INFORMATION: The VCBA is requesting $12,560 to fund attendance at the 2006 Colorado Snowsports -Expo in Denver. This event was part of the original request to Council for 2006 contributions but was turned down at that time. STAFF RECOMMENDATION: Staff does not recommend funding this event for the following reasons: 1) it was already turned down by Council, 2) it does not meet the out -of-cycle funding request criteria of "newly identified projects or unforeseen changes to budgets" as a reason for the request, and 3) Vail is already represented at this event with attendance by Vail Resorts in partnership with Vail businesses and lodges. C. Vail Valley Athlete Commission BACKGROUND INFORMATION: The Athlete Commission is requesting $5,250 to increase the Town's overall contribution up to $10,000 (current contribution is $4,750 annually). The Commission would like to expand the 2006 program to include an additional ten qualified athletes for this winter season that were not anticipated at the time of 2006 contribution requests. STAFF RECOMMENDATION: Staff recommends additional funding for this program in support of our athletes and for the international exposure for the Town of Vail. Staff supports the planned expansion and would like to continue our positive .partnership with the Vail Valley Foundation, Vail Resorts and the Beaver Creek Resort Company in this program. D. Betty Ford Alpine Gardens BACKGROUND INFORMATION: The Alpine Gardens is requesting $10,000 'in seed money to begin a renovation / replanting of the Meditation Garden. This is a capital project in addition to the normal operating budget. The Garden hosts thousands of visitors per year and has achieved World-premier status as a high altitude garden. STAFF RECOMMENDATION: Staff does not recommend 'funding this project because it is more appropriate for inclusion in the 2007 Contribution requests. It -does not fit the criteria of "newly identified projects or unforeseen changes to budgets". 7. Matt Mire ITEM/TOPIC: First reading of Ordinance No. 16, Series of 2006, An Ordinance Repealing Ordinance No. 5, Series 2006, an Ordinance Establishing Special Development District No. 39, Crossroads, Pursuant to Article A, Special Developmenf (SDD) District, Chapter 9, Title 12 zoning Title, Town Code of Vail, and Setting Forth Details in Regard Thereto. (20 min.) ACTION REQUESTED OF COUNCIL: Consider Ordinance No. 16, Series 2006, as required by the Vail Town Charter. BACKGROUND RATIONALE: On March 21, 2006, the Council adopted Ordinance No. 5, Series of 2006, an ordinance establishing Special Development .District No. 39, Crossroads, (the "Crossroads Ordinance"). On April 27, 2006, and pursuant to Section 5.4 of the Charter, the Town Clerk certified as SUFFCIENT a referendum petition seeking reconsideration of the Council's adoption of the Crossroads Ordinance, and if not so repealed upon reconsideration, that it be approved or rejected at a Town election. Pursuant to Section 5.6(a) of the Charter, when a referendum petition has been finally determined sufficient the Council shall promptly reconsider the referred ordinance by voting its repeal. STAFF RECOMMENDATION: n/a. 8. Matt Mire ITEM/TOPIC: Resolution No. 9, Series 2006, A Resolution Calling a Special Election in the Town of Vail, Colorado Concerning Ordinance No. 5, Series of 2006, an Ordinance Establishing Special Development District No. 39, Crossroads; Pursuant to Article A Special Development (SDD) District, Chapter 9, Title 12, Zoning Title, Town Code of Vail, and Setting Forth Details in Regard Thereto. (10 min.) ACTION REQUESTED OF COUNCIL: Approve Resolution No 9, Series 2006. BACKGROUND RATIONALE: On March 21, 2006, the Council adopted Ordinance No. 5, Series of 2006, an ordinance establishing Special Development District No. 39, Crossroads, (the "Crossroads Ordinance"). On April 27, 2006, and pursuant to .~ Section 5.4 of the Charter, the Town Clerk certified as SUFFCIENT a referendum petition seeking reconsideration of the Council's adoption of the Crossroads Ordinance, and if not so repealed upon reconsideration, that it be approved or rejected at a Town ,election. The Council has failed to repeal the Crossroads Ordinance, and pursuant to Section 5.6(b) of the Charter, it is necessary for the Council to set a special election. STAFF RECOMMENDATION: Approve Resolution 9, Series 2006. 9. Matt Gennett ITEM/TOPIC: First Reading of Ordinance No. 17, Series of 2006, an ordinance amending Section 12-21-14E, Restrictions in Specific Zones on Excessive Slopes, Vail Town Code, pursuant to Section 12-3-7, Amendments, Vail Town Code, to allow for an amendment to increase the amount of allowable site coverage on lots with excessive slopes, from a maximum of 15% to a maximum of 20%, and setting forth details in regard thereto. (15 min.) ACTION REQUESTED OF COUNCIL: Approve, approve with modifications, or deny Ordinance No. 17, Series of 2006. BACKGROUND RATIONALE: On April 24, 2006, the Planning and Environmental Commission (PEC) .conducted a work session during which staff was directed to draft changes to their suggested modified version of the applicant's proposed text amendment. On May- 8, 2006, the PEC recommended approval of the proposed text amendment to the Vail Town Council, as modified by staff STAFF RECOMMENDATION: The Community Development Department recommends that the Vail Town Council approves Ordinance No. 17, Series of 2006, as presented. 10. George Ruther ITEM/TOPIC: Second reading of Ordinance No. 12, Series of 2006, an ordinance amending the official zoning map for the Town of Vail in accordance with Title 12, Zoning Regulations, Chapter 5, Zoning Map; zoning the area more commonly referred to as the "Front Door USFS land. exchange parcel" to the Ski Base Recreation - 2 District (SBR-2), and setting forth details in regard thereto. (5 min.) A complete legal description of the parcel is available for public inspection at the Town of Vail Community Development Department ACTION REQUESTED OF COUNCIL: Approve, Approve with modifications, or Deny Ordinance No. 12, Series of 2006 on second reading. BACKGROUND RATIONALE: On May 8, 2006, the Town of Vail Planning and Environmental Commission held a public hearing on the request to amend the Official Zoning Map of the Town of Vail. Upon consideration of the request, the Commission unanimously approved a motion recommending approval of the zoning request to the Vail Town Council. On May 16, 2006, the Vail Town Council approved Ordinance No: 12, Series of 2006 on first reading as presented. STAFF RECOMMENDATION: The Community Development Department recommends that the Vail Town Council approves Ordinance No. 12, Series of 2006, on second reading. 11. Matt Mire ITEMlfOPIC: Second reading of Ordinance No. 15, Series of 2006, AN ORDINANCE EXTENDING A MORATORIUM ON 'THE SUBMISSION AND PROCESSING OF BUILDING PERMITS AND LAND USE APPROVALS IN THE LIONSHEAD MIXED USE 1 AND LIONSHEAD MIXED USE 2 ZONE DISTRICTS WHICH WOULD RESULT IN THE NET LOSS OF ACCOMMODATION UNITS, PARKING SPACES AND EMPLOYEE HOUSING UNITS; AND SETTING FORTH DETAILS IN REGARD THERETO. (5 min.), ACTION REQUESTED OF COUNCIL: Approve Second Reading of Ordinance No. 15 Series 2006. BACKGROUND RATIONALE: On April 18, 2006 the Council adopted Ordinance No. 13, Series 2006 establishing a sixty (60) day moratorium on the submission and processing of building permits and land use approvals in Lionshead Mixed Use 1 and 2 zone districts. Because of procedural requirements and time - necessary to effectuate the subject text amendments to Title 12, Vail Town Code, it will be necessary to extend the moratorium for an additional sixty (60) days. STAFF RECOMMENDATION: Approve second reading of Ordinance No. 15 Series 2006. 12. Matt Mire ITEM/TOPIC:. RESOLUTION NO. 10, SERIES OF 2006. A RESOLUTION APPROVING THE FRONT DOOR DEVELOPMENT AGREEMENT (THE "AGREEMENT") BETWEEN THE TOWN OF VAIL (THE `TOWN") AND THE VAIL CORPORATION, D/B/A VAIL ASSOCIATES, INC., A COLORADO CORPORATION ("VAIL ASSOCIATES"), WHICH AGREEMENT PERTAINS TO CERTAIN RESPECTIVE RIGHTS AND RESPONSIBILITIES OF THE TOWN AND VAIL ASSOCIATES IN RELATION TO THE FRONT DOOR DEVELOPMENT SITE OWNED BY VAIL ASSOCIATES AND AFFILIATES. (30 min.) ACTION REQUESTED OF COUNCIL: Consider Resolution No. r 10, Series 2006, for approval. BACKGROUND RATIONALE: the Town has previously approved a development plan and design criteria proposed by Vail Associates for the intended development of the "Front Door" mixed-use real estate-development project (the "Project"), the site of which is located in the Town of Vail to the south of the Lodge at Vail and the southerly end of Bridge Street and which borders and/or subsumes the Vista Bahn ski yard on the site's east side (the "Front Door Site"); The Town, acting through its applicable departments and agencies (including the Director of Public Works and the Director of Community Development), and Vail Associates, on its own behalf and on behalf of its applicable affiliates as the owners of the Front Door Site, have negotiated terms and conditions for the Agreement to govern certain matters related to the development of the Project, and the respective rights and responsibilities of the Town and Vail Associates in connection with those matters. The Town Council's approval and authorization of the Agreement, and making of the Agreement, will serve to satisfy certain conditions established by the Planning and Environmental Commission as part of its approval of the development plan for the Project; and STAFF RECOMMENDATION: Approve Resolution No. 10, Series 2006. 13. Matt Mire ITEMlTOPIC: Resolution No. 11, Series 2006, A Resolution Adopting the Mufti-Jurisdictional All-Hazard Pre-Disaster Mitigation Plan for the Town ofi Vail. (10 min.) ACTION REQUESTED OF COUNCIL: Approve Resolution No. 11, Series 2006. BACKGROUND RATIONALE: The U.S. Congress passed the Disaster Mitigation Act of 2000 ("Disaster Mitigation Act") emphasizing the need for pre-disaster mitigation of potential hazards. The Disaster Mitigation Act made available hazard mitigation grants to state and local governments. The amount of hazard mitigation grants available to state and local governments is contingent upon the adoption of an approved pre-disaster mitigation plan. The Town of Vail along with the Towns of Aspen, Snowmass Village, Basalt, Avon, Eagle, Gypsum, Minturn, Red Cliff, and Eagle County and Pitkin County, have developed a multi-jurisdictional pre-disaster mitigation plan designed to leverage their common characteristics and planning resources to better prepare for potential hazards. The Town of Vail desires to comply with the requirements of the Disaster Mitigation Act and to augment its emergency planning efforts by formally adopting the Multi-Jurisdictional All-Hazards Pre-Disaster Mitigation Plan for Pitkin and Eagle Counties dated June 1, 2005. STAFF RECOMMENDATION: Approve Resolution No. 11, Series 2006. 14. ITEM/TOPIC: Town Manager's Report. (10 min.) • Employee Down Payment Assistance Fundirig. The TOV Down Payment Assistance program has successfully assisted 27 employees in purchasing homes in the area. This program has contributed to a 50% reduction in turnover rates over the last four years. As demand for the program continues, additional funding will be needed to maintain the positive results. Since the program does not have a cost to the TOV Qust a loss of potential interest earnings), it is a highly effective tool in employee recruiting and retention. Council can expect a request for an additional $50,000 in the available pool to lend to satisfy demand as the program grows. • Meadow Drive /Farmers Market. 15. ITEM/TOPIC: Adjournment. (9:00 p:m.) NOTE UPCOMING MEETING START TIMES BELOW: (ALL TIMES ARE APPROXIMATE AND SUBJECT TO CHANGE) THE NEXT VAIL TOWN COUNCIL REGULAR EVENING MEETING WILL BEGIN AT 6 P.M. TUESDAY, JUNE 20, 2006, IN VAIL TOWN COUNCIL CHAMBERS Sign language interpretation available upon request with 48-hour notification. Please call 479-2106 voice or 479-2356 TDD for information. Vail Town Council Evening Meeting Minutes Tuesday, May 2, 2006 6:00 P.M. Vail Town Council Chambers The regular meeting of the Vail Town Council was called to order at approximately 6:00 P.M. by Mayor Rod Slifer. Members present: Rod Slifer, Mayor Farrow Hitt, Mayor Pro-Tem Kent Logan Greg Moffet Kim Newbury Mark Gordon Kevin Foley Staff Members: Stan Zemler, Town Manager Matt Mire, Town Attorney Pam Brandmeyer, Assistant Town Manager The first item on the agenda was Citizen Participation. Lou Meskkimen asked Council to investigate a community composting program. Rick Scalpello, on behalf of the Vail Farmer's Market, explained the quantity and diversity of vendors at the market would significantly increase in 2006. He said the markets would occur every Sunday from June 18 through September 24. He then asked Council to discontinue streetscape construction on June 18 and after Labor Day through the end of September. Merv Lapin expressed general unhappiness with the Special Development District process and requested Council convene a task force to review the process. The second item on the agenda was the presentation of the 2006 Youth Recognition Award Winners. Scott O'Connell, President of the Vail Valley Exchange, stated he had successfully hosted many groups from Mansfield / Mt. Buller, Australia, throughout the winter. He then presented the Vail Youth Recognition Award ($1,000 scholarship) to Battle Mountain High School student Kimberley Anne Corwin. Vail Mountain School student Leilani Bruntz also won the award but was unable to be in attendance. O'Connell then thanked Council for their continued support of the program. The third item on the agenda was. the Consent Agenda. a. Approval of 04.04.06 and 04.18.06 minutes. Moffet moved to approve the minutes without amendments. Foley seconded. The motion passed unanimously, 7-0. The fourth item on the agenda was a Tax Collection Overview. County Treasurer / Public Trustee Karen Schaeffer provided a revenue collection history for Eagle County and the Town of Vail. She then asked Council to feel free to contact her if they had any questions or problems regarding tax collection. Gordon thanked Schaeffer for helping to increase the dialogue between Eagle County and the Town of Vail. The fifth item on the agenda was a Construction Update. Public Works Director Greg Hall reported construction had begun on Mill Creek Court, Gore Creek Promenade, Meadow Drive and Vail Road, with all including both streetscape and utility work. "Meadow Drive bus service will be discontinued until the construction is complete...Streetscape improvements around the Arrabelle at Vail Square site have also begun." The sixth item on the agenda was Proclamation No. 2, Series of 2006. A proclamation recognizing Adam Aron for his contributions to the Town of. Vail while CEO of Vail Resorts. After Slifer introduced Aron, Hitt read the proclamation honoring Aron's accomplishments. Aron said, `This has been a love of mine for the past ten years...) may go elsewhere but my heart will always be in the Vail Valley..:The citizens should be proud of what the mayor and town council have done for them." Zemler then presented Aron with an official town manhole cover. The seventh item on the agenda was a presentation of Certificate of Sufficiency, certifying as sufficient the Referendum Petition for the Town Council's reconsideration of Ordinance No. 5, Series 2006, an Ordinance Establishing Special Development District No. 39, Crossroads, Pursuant to Article A, Special Development (SDD) District, Chapter 9, Title. 12, Zoning Title, Town Code of Vail. Town Attorney Matt Mire reported the petition was submitted to the town on April 20, 2006, as required by referendum procedures outlined in the Vail Town Charter and state statute. Now the petition has been deemed sufficient, Council will `be required, to consider repeal of Ordinance No. 5, Series of 2006, which established a new SDD for Crossroads. This consideration has been scheduled for the June 6 evening meeting. If Council fails to repeal the ordinance by athree-fourths majority (6-1), the matter would then be referred to Vail's electorate in a special election set by the Vail Town Council. The tentative date for such an election is July 11. If the matter is referred to the voters and. Vail's electorate repeals the ordinance by a majority vote, the Crossroads SDD would be invalidated. Or, if voters reject repeal of the:ordinance, the SDD would remain in place as approved by the Town Council with construction scheduled to begin in spring 2007. The eighth item on the agenda was a request to proceed through development review. The applicant, Lancelot Restaurant, represented by Werner Schad), requested permission to proceed through the development review process with a proposal involving Town of Vail owned property. Forrest explained the applicant, Lancelot Restaurant, requested to proceed through the development review process with a proposal.to remove trees on the Gore Creek Promenade. The Gore Creek Promenade is owned by the town, and Council serves in the role of "property owner" for this site. Therefore as the property owner, Council must. consent to the applicant proceeding through the town's development review process with this proposal. The Community Development and Public Works Departments recommended Council approve the applicant's request to proceed through the development review process. Moffet moved to approve the request with Foley seconding. The motion passed unanimously, 7-0. Please note Council approval of the applicant's request does not constitute an explicit approval of the proposed improvements; it only authorizes the .applicants to proceed through the town's development review process. The ninth item on the agenda was a Raw Water Conversion Project - Intergovernmental Agreement (IGA). Greg Hall reported the town and Eagle River Water and Sanitation District, in November of 2003, jointly completed a feasibility study investigating the conversion of the irrigation systems in Ford Park and Donovan Park from treated water to raw water supply. Having found the work and finances to be feasible, the District prepared construction documents and hired a contractor to perform the work. The cost of the work to be paid by the District is $396,210.65. The cost of construction is to be reimbursed to the District by the town over a 20 year period through the water rates paid by the town. All pumping and filtration equipment will be owned and maintained by the District. The conversion to raw water will decrease the overall cost of water for these two parks and will decrease the treatment costs for the District. The savings to the town varies year to year within the 20 year period and is projected to be $10,000 the first year and $20,000 at year 20. Work is scheduled to begin in September to avoid high water during spring run off. Moffet moved to enter into the IGA with Newbury seconding. The motion passed unanimously, 7-0. The tenth item on the agenda was a funding request for rational nexus studies for both commercial and residential linkage that would be the foundation for potentially adopting additional employee housing mitigation strategies. Russ Forrest reported on April 18 staff made a presentation regarding numerous employee housing mitigation strategies Council may choose to adopt. "In order to codify commercial linkage and/or add residential linkage, the Town of Vail will legally need to have a current rational nexus study." The authorization of dollars for the studies will allow the town to engage RRC's services to complete the nexus studies. The studies will take up to ten weeks to complete. Forrest recommended allocating $18,500 from the Affordable Housing Buy Down Program to pay for the completion of both a commercial, and residential rational nexus studies. A general trend in the state courts has been to require a "rational nexus" between the fee and the needs created by development and the benefits incurred by the development. This analysis is a moderate position between a standard that requires the fee be "specifically and uniquely attributable" to the needs created by new development. Gordon questioned a recommendation made by a local planning consultant regarding the use of RRC. Forrest stated RRC understands this information "better than anyone else." Moffet moved to reallocate $18,500 from the buy down program for the use of performing a commercial and residential rational nexus study, and to compensate the Affordable Housing Buy Down Program during the next supplemental appropriation. Gordon seconded. The motion passed unanimously, 7-0. The eleventh item on the agenda was Second Reading of ORDINANCE 9, SERIES OF 2006, AN ORDINANCE REPEALING AND REENACTING ORDINANCE NO. 2, SERIES OF 1997, PROVIDING FOR CHANGES TO SPECIAL DEVELOPMENT DISTRICT NO. 34, FLAUM-THE VALLEY PHASE V, THAT CONCERN THE INCREASE IN THE ALLOWABLE GROSS RESIDENTIAL FLOOR AREA (GRFA) FOR EMPLOYEE HOUSING UNITS (EHUS) AND ASSOCIATED GARAGES WITHIN THE DISTRICT. On March 27, 2006, the PEC voted 6-0-0 (Viele absent) to forward a recommendation of approval for a proposed amendment to SDD No. 34, Flaum -The Valley Phase V, to the Vail Town Council, pursuant to Section 12-9A-10, Amendment Procedures, Vaif Town Code, to allow for the increase in the allowable GRFA for EHUs within the District from 500 square feet to 850 square feet and to increase the allowable size of the EHU garage from _300 square feet to 400 square feet, located at at 1521, 1601, and 1631 Buffehr Creek Road/Lots A-C, The Valley Phase V. Moffet moved to adopt the ordinance with Foley seconding. The motion passed unanimously, 7-0. Foley thanked the Flaums for building a larger than needed employee housing unit. Hitt questioned the ordinance may set precedent. The twelfth item on the agenda was the Second reading of Ordinance No. 11, Series 2006, An Ordinance of the Town of Vail Annexing Certain Real Property to the Town of Vail. On February 14, 2006, The Vail Corporation filed with the Town Clerk for the Town of Vail. a Petition for Annexation requesting that the Town Council of the Town of Vail commence proceedings to annex to the Town of Vail a certain parcel of land located in Section 8, Township 5 South, Range 80 West, of the 6th Principal Meridian, County of Eagle, State of Colorado, the approved final legal ,description of which is set forth as Exhibit A in this Ordinance No. 11. (the "Annexation Property"). The Town Council, by Resolution No. 6, ,Series of 2006, has also determined with regard to the Petition for Annexation for the Annexation Property: (i) the applicable requirements of C.R.S. §§ 31-12-104 and 31-12-105 have been met; (ii) an election is not required under C.R.S. § 31-12-107(2) or 31-12-112; (iii) no additional terms and conditions are to be imposed on the annexation of the Annexation Property; and (iv) the Annexation Property is eligible for annexation to the Town of Vail. Accordingly, this Ordinance 11 shall operate to annex the Annexation Property to the Town of Vail. Due to a predetermined conflict of interest (affiliations with Vail Resorts), Slifer and Gordon recused themselves from the item and left the Council Chambers. Moffet moved to approve the ordinance with Newbury seconding. The motion passed unanimously, 5-0. ,The thirteenth item on the agenda was Resolution No. 7, Series 2006, a Resolution rescheduling the regular Town Council meeting of July 4, 2006, to July 11, 2006. Pursuant to Section 1-5-11, Vail Town Code, in the event a regular meeting would fall on a legal holiday recognized by the Town, the Council may defer the regular meeting to a subsequent date. not later than one week after the deferred regular meeting. Moffet moved to approve with Newbury seconding. Mire clarified the special election would coincide with the rescheduled meeting date. The motion passed unanimously, 7-0. The fourteenth item on the agenda was A RESOLUTION RATIFYING THE PURCHASE OF LAND IN THE TOWN OF VAIL KNOWN AS THE MEADOW CREEK PARCEL AND LEGALLY DESCRIBED AS A PARCEL OF LAND LOCATED IN THE NORTHEAST QUARTER, OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SECTION 14, TOWNSHIP 5 SOUTH, RANGE 81 WEST SIXTH PRINCIPAL MERIDIAN, EAGLE COUNTY, COLORADO. Council has previously approved the purchase of the property ($230,000), and closed on the property on or about April 28, 2006. The Eagle County Open Space Committee and adjacent property owners committed $65,000 each to the acquisition of land.. This acquisition is consistent with the Town of Vail Comprehensive Open Lands Plan. Forrest thanked neighborhood homeowners for their contribution. Foley clarified the $230,000 came from Real Estate Transfer Tax funds. Hitt clarified the parcel would serve as a continuance of Stephens Park: Moffet moved to approve the resolution with Hitt seconding. The motion passed unanimously, 7-0. Slifer said the purchase was a sign of increased cooperation between the county and the town. The .fifteenth item on the agenda was the Town Manager's Report. • Request For Proposals (RFP) for LionsHead Parking Structure Town Manager Stan Zemler said that over time the town has received varied inquiries regarding the redevelopment of the LionsHead parking structure. "In the near future we are going to be faced with significant capital improvements in the LionsHead parking structure...Redevelopment may offer possibilities of increased economic vitality and parking enhancement." Hitt questioned whether redevelopment would hinder future transit decisions. Logan questioned whether the proposed Simba Run underpass should be a part of the project. "It is certainly generally related to this project." Zemler clarified it was premature to discuss details regarding any type of redevelopment of the structure. Council agreed to allow the Town Manager to issue the RFP. The sixteenth item on the agenda was Adjournment. Moffet moved to adjourn with Foley seconding at approximately 7:15 p.m. The motion passed unanimously, 7-0. Rodney E. Slifer, Mayor ATTEST: Lorelei Donaldson, Town Clerk Minutes provided by Corey Swisher. Vail Town Council Evening Meeting Minutes Tuesday, May 16, 2006 6:00 P.M. Vail Town Council Chambers The regular meeting of the Vail Town Council was called to order at approximately 6:00 P.M. by Mayor Pro-Tem Farrow Hitt. Members present: Farrow Hitt, Mayor Pro-Tem Kent Logan Greg Moffet Mark Gordon Not present: Rod Slifer, Mayor Kevin Foley Kim Newbury Staff Members: Stan Zemler, Town Manager Matt Mire, Town Attorney Pam Brandmeyer, Assistant Town Manager The first item on the agenda was Citizen Participation. Representing the Vail Village Homeowner's Association, Jim Lamont asked that better phone conferencing equipment be provided in town hall so as to be more inclusive of part-time residents in citizen advisory committee meetings. The second item on the agenda was the Battle Mountain High School (BMHS) Hockey Team. Brett Young, President Elect of the BMHS Hockey Booster Club, introduced the 2006 Battle Mountain High School Hockey Team. He announced the team had reached the "Frozen Four" every year since the inception of Husky hockey. Young then thanked the town and the Vail Recreation District for their continuing support of the program and presented a framed jersey and photo of this season's team, all of whom were present. The third item on the agenda was the Consent Agenda. A. Current copy of the Ford Park Managed Parking dates for the 2006 Summer Calendar. The managed parking calendar was compiled by the Ford Park User Committee. There are currently 35 days of paid parking requested as well as one managed parking date. This calendar is subject to change as more events are added to the various schedules of the user groups at Ford Park. Council approval of the calendar was requested. B. Children's Garden of Learning (CGOL) request to proceed through the process for repair of geotechnical and playground surfacing issues. . Moffet moved to approve the consent agenda with Gordon seconding. The motion passed, 4-0. The fourth item on the agenda was a Construction Update. Town Engineer Tom Kassmel reported construction on East Meadow Drive, Gore Creek Drive and the Gore Creek Promenade was ongoing. He reported all town projects were proceeding on schedule. He then clarified Pirate Ship Park was undergoing routine maintenance and would be open to the public by the weekend. Town Manager Stan Zemler reported an outdoor fire feature had been recently installed on Wall Street. Kassmel then announced the Sonnenalp streetscape would be completed June 15 and One Willow Bridge streetscape would begin soon. The- Vail Plaza Hotel tower crane is scheduled to be removed in the middle of June and will result in a five day Vail Road closure. The Four Seasons is tentatively scheduled to begin excavation in June or August. He concluded his comments by saying street striping will begin next week throughout Vail. The fifth item on the agenda was the First reading of Ordinance No. 6, Series 2006, an ordinance repealing and reenacting Title 9, Chapter 1, Vail Town Code Regarding the Town of Vail Watershed District; Providing Definitions to Prevent Injury to Town Water Sources. Upon advice of the Town Attorney Matt Mire, Moffet moved to table the item with Logan seconding. The motion passed unanimously, 4-0. An amended motion and second designated the item tabled .until June 6. Mire announced the Eagle River Water and Sanitation District (ERWSD) had requested time to review and analyze the ordinance. The sixth item on the agenda was First reading of Ordinance No. 12, Series of 2006, an ordinance amending the official zoning map for the Town of Vait in accordance with Title 12, Zoning Regulations, Chapter 5, Zoning Map; zoning the area more commonly referred to as the "Front Door USFS land exchange parcel" to the Ski Base Recreation - 2 District (SBR-2). Chief Planner George Ruther explained on May 8, 2006, the Planning and Environmental Commission (PEC) held a public hearing on the request to amend the Official Zoning Map of the town. Upon consideration of the request, the Commission unanimously approved a motion recommending approval of the zoning request to Council. A complete legal description of the parcel is available for public inspection at the Town of Vail Community Development Department. Due to a predetermined conflict, of interest (Vail Resorts employment), Gordon recused himself from hearing the item and left the Council Chambers. Moffet moved to approve the item with Logan seconding. An amended motion included three findings listed on page 13 of the staff memorandum to the PEC dated May 8, 2006 (The memorandum was also included in the Council packet). The motion passed, 3-0. The ordinance provided the required zoning to facilitate the development of the Front Door project. Representing the Vail Village Homeowner's Association,' Jim Lamont asked for an explanation of restrictions ensuring open space on and around the parcel. He also. addressed the issue of moderation of potential "irritants" (light/noise) created by the project. Responding to the issue of open space, Ruther explained any changes to the currently approved plans would require a re-review from the PEC and town staff. Representing Vail Resorts, Jay Peterson clarified the parcel boundaries are being developed. Hitt clarified Lamont represented adjacent property owners. The seventh item on the agenda was the First reading of Ordinance No. 15, Series of 2006, an ordinance extending a moratorium on the submission and processing of building permits and land use approvals in the LionsHead Mixed Use 1 and LionsHead Mixed Use 2 Zone Districts which would result in the net toss of accommodation units, parking spaces and Employee Housing Units. Due to a predetermined conflict of interest (Vail Resorts employment), Mark Gordon recused himself from the item and left the Council Chambers. Mire explained On April 18, 2006, Council adopted Ordinance No. 13, Series 2006, establishing a sixty (60) day moratorium on the submission and processing of building permits and land use approvals in LionsHead Mixed Use 1 and 2 zone districts. Because of procedural requirements and time necessary to effectuate the subject text amendments to Title 12, Vail Town Code, it was necessary to extend the moratorium for an additional sixty (60) days. Moffet moved to adopt the ordinance with Logan seconding. Representing owners of the LionsHead Inn, Dominic Mauriello said he and his clients were appreciative of the extension as they were working on potential amendments to town code that .would be mutually beneficial to the town and his clients. The motion passed, 3-0. The eighth item on the agenda was the Town Manager's Report. • VAIL VALLEY ATHLETE COMMISSION (VVAC) Assistant Town Manager Pam Brandmeyer reported the VVAC met May 9 to consider funding requests for the spring, summer and fall., Because the preponderance of the funding from the partners (Beaver Creek Resort Company, Vail Resorts, the Vail ,Valley Foundation and the Town of Vail) is spent on winter sports activities, the Commission had just $2,500 to allocate this funding cycle. The town's contribution has remained at $4,750 (a 5% reduction following the Sept. 11, 2001 event). The town received a letter from the Foundation requesting each of the partners increase its 2006 contribution to a maximum of $10,000 for this year, to which Beaver Creek Resort Company and the Foundation already agreed. Previous contributions from the other three partners have been at $5,000 each. Staff advised the Foundation to go through the out-of-cycle funding process in.June to make this request formally. • FARMER'S MARKET EXTENSION OF DATES Brandmeyer explained staff had mef with Rick Scalpello on May 3 to discuss the additional Sundays in June and September where Rick had requested suspending streetscape construction in order to accommodate the market. While the June 18 date is being cautiously considered, staff has agreed to update Mr. Scalpello two weeks out as to current construction progress. The September dates, however, cannot be considered, since streetscape construction will be fully underway. With the already condensed construction seasons limited to the spring and fall, and in order to meet the construction schedule as laid, out in January of this year, closing down the September Sundays would incur additional costs as well as potentially make the construction schedule for completion unattainable. Gordon clarified the location of this year's market. Staff was strongly urged to free up the additional June Sunday if construction progress permitted. The ninth item on the agenda was Adjournment. Moffet moved to adjourn with Logan seconding. The motion passed unanimously, 4-0, at approximately 6:58 p.m. Farrow Hitt, Mayor Pro-Tem ATTEST: Lorelei Donaldson, Town Clerk Minutes provided by Corey Swisher. 3 MCMAHAN AND ASSOCIATES, L.L.C. Certified Public Accountants and Consultants L r Town of Vail, Colorado Vail, Colorado Financial Statements December 31, 2005 t. Town of Vail, Colorado Financial Statements December 31, 2005 Table of Contents Page INDEPENDENT AUDITOR'S REPORT Al - A2 Management's Discussion and Analysis g1 - B7 Government-Wide Financial Statements: .Statement of Net Assets C1 Statement of Activities C2 Fund Financial Statements: Governmental Funds: Balance Sheet C3 Statement of Revenues, Expenditures and Changes in Fund Balances ~ C4 Proprietary Funds: Statement of Net Assets C5 Statement of Revenues, Expenses and Changes in Fund Net Assets C6 Statement of Cash Flows C7 Fiduciary Funds: Statement of Fiduciary Net Assets Cg Statement of Changes in Fiduciary Net Assets Cg Notes to the Financial Statements D1 - D31 Required Supplementary Information: General Fund: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP Basis) and Actual E1- E2 Major Special Revenue Funds: Schedule of Revenues, Expenditures and Changes in Fund Balances -- Budget (GAAP Basis) and Actual: Capital Projects Fund E3 Real Estate Transfer Tax Fund E4 Conference Center Fund E5 Vail Marketing Fund E6 Vail Local Marketing District E7 Vail Reinvestment Authority Eg Supplementary Information: Debt Service Fund: Schedule of Revenues, Expenditures and Changes in Fund Ba-ances - Budget (GAAP Basis) and Actual F1 Enterprise Funds: Schedule of Revenues, Expenses, Transfers and Change in Fund Net Assets - Budget (Non-GAAP Basis) and Actual -Timber Ridge Affordable Housing Corporation F2 Schedule of Revenues, Expenses, Transfers and Change in Fund Net Assets - Budget (Non-GAAP Basis) and Actual -With Reconciliation to GAAP Basis - Dispatch Services Fund ~ F3 Internal Service Funds: Schedule of Revenues, Expenses, Transfers and Change in Fund Net Assets - Budget (Non-GAAP Basis) and Actual -With Reconciliation to GAAP Basis - Heavy Equipment Fund F4 Schedule of Revenues, Expenses and Change in Fund Net Assets - Budget (GAAP Basis) and Actual -Health Insurance Fund F5 Town of Vail, Colorado Financial Statements December 31, 2005 Table of Contents (Continued) Page Supplementary Information (continued): Internal Service Funds (continued): Combining Schedule of Net Assets F6 Combining Schedule of Revenues, Expenses and Changes in Fund Net Assets F7 Combining Schedule of Cash Flows Fg Major Special Revenue Funds: Schedule of Project Expenditures -Budget (GAAP Basis) and Actual: Capital Projects Fund Fg Real Estate Transfer Tax Fund F10 Local Highway Finance Report F11 - F12 Undertaking to Provide Continuing Disclosure: Table I -Debt Service Coverage G1 Table III -History of Town 4% Sales Tax Receipts G1 Table IV -Monthly Comparison of Collections of Sales Tax G1 Table V -Sales Tax Collections by Principal Sales Tax Generators G2 Table VI -Capital Projects Fund - 2005 Actual /Projected 2006 - 2009 G2 Table XIX -History of General Fund Revenues, Expenditures and Changes in Fund Balance G3 Table XX -General Fund - 2005 Budget and Actual Comparison / 2006 Budget G4 Table XXI -Outstanding Revenue Obligations G4 MCMAHAN AND ASSOCIATES, L.L.C. Certified Public Accountants and Consultants WEB SITE: WWW.MCMAHANCPA.COM SUITE 222/AVON CENTER TELEPHONE: (970) $45-8$00 I OO WEST BEAVER CREEK BLVD. FACSIMILE: (J7O) B4S-OBS I P.O. BOX 5850 AvoN, CO $ I G2O E-MAIL: MCMAHAN ~Q MCMAHANCPA.COM INDEPENDENT AUDITOR'S REPORT To the Mayor and Members of Town Council Town of Vail Vail, Colorado We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the Town of Vail (the "Town"), as of and for the year ended December 31, 2005, which collectively comprise the Town's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the management of the Town. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards and Government Audifing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above presently fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Vail, as of December 31, 2005, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with U.S. generally accepted accounting principles. The accompanying financial statements have been prepared assuming that Timber Ridge Affordable Housing Corporation (the "Corporation"), a blended component unit of the Town, will continue as a going concern. Because operations of the Corporation could be substantially impeded as a result of limitations of revenues and ongoing, substantial debt service requirements, these factors raise substantial doubt about the Corporation's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Management's Discussion and Analysis in Section B is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board ("GASB"). We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Performing services for local governments throughout Colorado D. Jerry McMahan, C.P.A. Daniel R. Cudahy, C.P.A. Paul J. Backes, C.P.A. Michael N. Jenkins, C.A., C.P.A. Members: American Institute o~ Certi~ied Public Accountants/Colorado Society o{ Certi~ied Public Accountants National and Cojorado Government Finance O{-~icers Association/C'olorado Municipal League Al To the Mayor and Members of Town Council Town of Vail The budgetary fund information for the General Fund and major special revenue funds in Section E is not a required part of the basic financial statements but is supplementary information required by the GASB. This budgetary fund information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The accompanying financial information presented as supporting schedu{es are presented for purposes of additional analysis, and are not a required part of the basic financial statements of the Town of Vail, Colorado. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town's basic financial statements. The accompanying supplementary information in Section F, including individual fund budgetary statements, combining internal service fund financial statements, budgetary statements for project expenditures, and the Local Highway Finance Report, and tables included for the undertaking to provide continuing disclosure in Section G are presented for purposes of additional analysis and are not a required part of the basic financial statements. The individual fund budgetary statements, combining internal service fund financial statements, budgetary statements for project expenditures, and the Local Highway Finance Report have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The tables included for the undertaking to provide continuing disclosure have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. McMahan and Associates, L.L.C. March 30, 2006 A2 MANAGEMENT'S DISCUSSION AND ANALYSIS 1 Town of Vail, Colorado Management's Discussion and Analysis December 31, 2005 As management of the Town of Vail, Colorado (the "Town"), we offer readers of the Town's financial statements this narrative overview and analysis of the financial activities of the Town for the fiscal year ended December 31, 2005. Overview of the Financial Statements ' This discussion and analysis is intended to serve as an introduction to the Town's basic financial statements. The Town's basic financial statements include three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Financial Highlights: ' The assets of the Town exceeded its liabilities at the close of the 2005 fiscal year by $105,220,539 (net assets). Of this amount, the unrestricted net assets of $41,812,469 may be used to meet the ' Town's ongoing obligations to citizens and creditors. • The Town's total net assets increased in the 2005 fiscal year by $15,910,596 which was attributable to an increase from governmental activities of $16,871,214 and a decrease of $960,618 from business-type activities. • At December 31, 2005, the unrestricted and undesignated fund balance of the General Fund was $11,467,414 or approximately 50% of total fiscal year 2005 General Fund expenditures. Government-wide financial statements: The government-wide financial statements are designed to provide readers with a broad overview of the Town's finances in a manner similar to aprivate-sector business. The Statement of Net Assets presents information on the Town's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating. The Statement of Activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and ' expenses are reported in this statement for some items that wilt only result in cash flows in future fiscal periods (e.g. uncollected grant revenues or earned but unused vacation leave.) Both of the government-wide financial statements distinguish functions of the Town that are principally supported by taxes and intergovernmental revenues (governmental activities) and those that are supported by external revenues (business-type activities). The governmental activities of the Town include general government, public safety, public works, transportation, and economic development. The ' business-type activities of the Town consist of housing conducted through Timber Ridge Affordable Housing Corporation (a component unit of the Townj, and dispatch services, conducted through Vail Public Safety Communications (an enterprise fund of the Town). ' The government-wide financial statements include not only the Town itself (known as the primary government), but also a legally separate marketing district (Vail Local Marketing District), a legally separate urban renewal authority (Vail Reinvestment Authority), and anon-profit housing corporation (Timber Ridge Affordable Housing Corporation) for which the Town is financially accountable. Because these component units function for all practical purposes as departments of the Town, their financial position and activities have been included as an integral part of the primary government. The government-wide financial statements can be found on pages C1 and C2 of this report. 61 Overview of the Financial Statements (continued) Fund Financial Statements: A fund is an accounting entity that has a set of self-balancing accounts that records all financial transactions for specific activities or governmental functions. The Town, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. The Town's funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds: Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental activities in the government-wide financial statements. By doing so, readers _may better understand the long-term impact of the governments' near-term financing decisions. Both the governmental fund Balance Sheet and the governmental Statement of Revenues, Expenditures and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Town's governmental funds include the General Fund, Debt Service Fund, and four Special Revenue Funds -Capital Projects Fund, Real Estate Transfer Tax Fund, Vail Marketing Fund and Conference Center Fund - as well as the Vail Local Marketing District and the Vail Reinvestment Authority, which are component units of the Town. The Town adopts an annual appropriated budget for all governmental funds. A budgetary comparison statement has been provided for all funds to demonstrate compliance with the state budget statute. The basic governmental fund financial statements can be found on pages C3 and C4 of this report. Proprietary Funds: The Town reports two categories of proprietary funds -Internal Service and Enterprise. The Heavy Equipment Fund and Health Insurance Fund are internal service funds, while Timber Ridge Affordable Housing Corporation, which is a component unit and the Dispatch Services Fund are reported as enterprise funds. As their name implies, the internal service funds provide services to the Town's governmental activities. Timber Ridge Affordable Housing Corporation provides affordable rental housing to people who work in Vail and the Dispatch Services Fund provides dispatch services to emergencies service agencies throughout Eagle County. Enterprise fund functions are presented as business-type activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The basic proprietary fund financial statements can be found on pages C5 through C7 of this report. The Town also presents a budgetary comparison for its proprietary funds. Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Town's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements, for the Town's pension plan, can be found on pages C8 and C9 of this report Notes to the Financial Statements: The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The Notes to the Financial Statements can be found in Section D of this report. B2 Overview of the Financial Statements (continued) ' Government-wide Financial Analysis: As previously mentioned, the government-wide financial statements are designed to provide readers with a broad overview and long-term analysis of the Town's finances, in a manner similar to aprivate-sector business. Net assets may serve over time as a useful indicator of a government's financial position. In the case of the Town, governmental assets exceeded liabilities by $105,747,215 at the close of the most recent fiscal year. Approximately 60% of the Town's net assets are invested in capital assets (land, buildings, equipment), less related outstanding debt. Since the Town uses these capital assets to provide services to citizens, these assets are not available for future spending, including provision of resources to repay the debt. The table below shows the Town's net assets for 2005 and 2004. Town of Vail's Net Assets ' Current and Other Assets Capital Assets Total Assets Governmental Activities 2005 2004 2005 2004 $ 48,993,743 39,205,200 1,649,823 1,393;992 50,643,566 40,599,192 77,223,614 72,023,141 20,293,942 20,849,130 97,517,556 92,872,271 126,217,357 111,228,341 21,943,765 22,243,122 148,161,122 133,471,463 Business-type Activities 2005 2004 Total Long-term Liabilities Outstanding 10,888,597 14,337,218 21,945,099 21,389,669 32,833,696 35,726,887 Other Liabilities 9,581,545 8,015,122 525,342 419,511 10,106,887 8,434,633 Total Liabilities 20,470,142 22,352,340 22,470,441 21,809,180 42,940,583 44,161,520 Net Assets: Invested in capital assets, net of related debt 63,393,614 56,498,141 (1,756,058) (630,870) 61,637,556 55,867,271 Restricted 1,770,514 1,508,505 - - 1,770,514 1,508,505 Unrestricted 40,583,087 30,869,355 1,229,382 1,064,812 41,812,469 31,934,167 Total Net Assets $ 105,747,215 ~ 88,876,001 (526,676) 433,942 105,220,539 89,309,943 The Town's long-term liabilities from governmental activities decreased due to principal payments on outstanding debt. The Town's 2002A General Obligation debt was retired in 2005; the 19986 Sales Tax Revenue Bonds will be retired in 2007; and the 1998A and 20026 Sales Tax Revenue Bonds in 2012. Long-term liabilities from business activities increased as a result of an additional loan from the Town to the Timber Ridge Affordable Housing Corporation. The Timber Ridge Affordable Housing bonds and note payable mature in 2032: Additional information regarding the Town's long-term debt is available in Section D of this report. B3 Financial Analysis of the Town's Funds (continued) Governmental Funds: The focus of the Town's governmental funds is to provide information on near- 1 term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town's financing requirements. In particular, fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Town's governmental funds reported combined ending fund balances of $40,664,252; an increase of $9,347,871 from the prior year's ending fund balances. The following details ending fund balances for the past five years: Fund 2001 2002 2003 2004 2005 General Fund $ 6,289,386 $ 8,784,044 $10,376,744 $11,053,614 $ 13,673,808 ' Capital Projects Fund 10,020,101 8,942,580 8,054,258 8,190,903 10,249,191 Real Estate Transfer Tax 6,522,669 5,084,315 6,280,458 5,682,551 7,463,545 Conference Center Fund - - 3,026,538 5,691,334 8,237,877 ' Vail Marketing Fund 34,451 38,326 42,862 25,590 36,211 Vail Local Marketing District 417,214 710,870 525,786 488,899 696,895 Debt Service Fund 131,948 58,940 130,210 182,238 305,522 ' Vail Reinvestment Authority - - - 1,252 1,203 Total $ 23,415,769 $ 23,619,075 $28,436,856 $31,316,381 $40,664,252 The General Fund balance has grown steadily over the past five years, while the Capital Projects Fund and the RETT Fund have fluctuated as funds have been spent on major projects. The Conference Center Fund was created in 2003 to administer the sales and public accommodations taxes that went into effect on January 1, 2003 for the purpose of building and operating a conference center in the Town. The fund's balance has grown for the past three years in anticipation of building a conference center. However, the conference center taxes were rescinded as of January 1, 2006 and the funds may not be spent until there is an election concerning their use. The Vail Reinvestment Authority was added in 2004 to administer an urban renewal authority established in the LionsHead area of the town. MAJOR FUND BALANCES $16,000 --_---- $14,000 $12,000 a $10,000 N $8,000 0 ~ $6,000 $4,000 $2,000 $- 2001 2002 2003 2004 2005 ^ General ^ Capital Projects ^ Real Estate Transfer Tax ^ Conference Center ^ All Other 65 Financial Analysis of the Town's Funds (continued) Proprietary Funds: The Town's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net assets for the Heavy Equipment Fund and the Dispatch Services Fund at the end of the year were $950,328 and $210,623, respectively. The Health Insurance Fund net assets were $905,855, all of which are restricted for the Town's self-funded health insurance program. Budget Variances in the General Fund: General Fund revenue was higher than the amended budget by $1,224,318 or 5%, including: Parking up $696,538; Earnings on Investments up $308,851; and Ski Area Lift Ticket Admissions Tax up $192,698. These revenue items were favorable due to conservative budgeting and, in some cases, a strong start to the 2005/2006 ski season. One revenue item of note was below budget: Construction Fees down $123,249 due to timing of major redevelopment projects. Expenditures were below budget by $915,693 or 4%, of which $295,011 was budgeted but not spent for outsourcing development plan reviews, again due to timing of major redevelopment projects. The remainder of the favorable spending variance was primarily due to conservative budgeting. Capital Assets: The Town's government-wide capital assets, net of accumulated depreciation, increased $4,645,285. Capital additions included streetscape improvements, Siebert Circle reconstruction, the Cascade bike path, and various other projects. Additional information as well as a detailed classification of the Town's net capital assets can be found in the Notes to the Financial Statements in Section D of this report. Long-term Debt: As of the end of the current fiscal year, the Town had $13,830,000 in sales tax revenue bonds outstanding, of which $1,755,000 of bond principal is due within one year. Debt related to Timber Ridge Affordable Housing Corporation totaled $22,050,000 of which $140,000 is due within one year. Additional information regarding the Town's debt can be found in Section D of this report.. Sales Tax and Public Accommodations Tax: During 2005, the Town had a 4% general sales tax to support governmental operations, including capital expenditures, and a .5% sales tax dedicated to construction and operation of a conference center. There was also a 1.5% public accommodations tax dedicated entirely to the conference center. Both conference center taxes were rescinded as of January 1, 2006 as the result of a November 2005 election. The following chart shows changes in the general sales tax for the past five years. B6 Financial Analysis of the Town's Funds (continued) Next Year's Budget and Rates: The Town's General Fund balance at the end of the current fiscal year was $13,673,808 representing 53% of annual revenue. The Town's 2006 budget anticipates using $264,656 of this fund balance in 2006. Request for information This financial report is designed to provide a general overview of the Town's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report should be addressed to the Town of Vail, Finance Director, 75 S. Frontage Road, Vail, CO 80435. B7 Overview of the Financial Statements (continued) The chart below provides financial information from the Town's Statement of Activities for the years 2005 and 2004. , Town of Vail's Changes in Net Assets Governmental Business-type Activities Activities Total 2005 2004 2005 2004 2005 2004 Revenue: Program Revenue Charges for services $ 9,428,743 7,427,665 3,001,558 2,332,890 12,430,301 9,760,555 Operating grants 816,641 1,191,357 368,700 369,000 1,185,341 1,560,357 Capital grants 19,500 1,452,420 - 662,804 19,500 2,115,224 General Revenue Property and ownership tax 2,652,897 2,651,245 - - 2,652,897 2,651,245 Sales and lodging tax 22,880,425 21,238,411 - ~ - 22,880,425 21,238,411 Other taxes 9,900,703 8,112,297 - - 9,900,703 8,112,297 Interest and other revenue 3,633,486 2,470,232 25,556 473 3,659,042 2,470,705 Capital contributions, net - - 181,486 - 181,486 - , Transfers (2,480) (1,222,280) 2,480 1,222,280 - - Total Revenue 49,329,915 43,321,347 3,579,780 4,587,447 52,909,695 47,908,794 Expenses: ' General government 5,389,117 4,688,296 - - 5,389,117 4,688,296 Public safety 6,714,321 6,279,865 1,943,261 1,664,027 8,657,582 7,943,892 Public works and transportation 12,294,071 12,512,204 - - 12,294,071 12,512,204 Culture and recreation 4,122,633 4,171,745 - - 4,122,633 4,171,745 Economic development 3,320,163 2,239,643 - - 3,320,163 2,239,643 Housing - - 2,597,137 2,079,797 2,597,137 2,079,797 Interest 618,396 682,774 - - 618,396 , 682,774 Total Expenses 32,458,701 30,574,527 4,540,398 3,743,824 36,999,099 34,318,351 Increase in Net Assets 16,871,214 12,746,820 (960,618) 843,623 15,910,596 13,590,443 ' Net Assets January 1 88,876,001 76,129,181 433,942 (409,681) 89,309,943 75,719,500 Net Assets December 31 $ 105,747,215 88,876,001 (526,676) 433,942 105,220,539 89,309,943 Governmental Activities: Governmental activities increased the Town's net assets by $16,871,214. , Key elements of this increase are as follows: • The Town implemented sales and lodging taxes in 2003 for the purpose of building and operating a conference center. During 2005, the conference center was in the planning and design stage and taxes collected exceeded related expense by $2.5 million, increasing net assets by that amount. • Revenue exceeded expenditures in the General Fund, Capital Projects Fund, and Real Estate , Transfer Tax Fund by $2.7 million, $4.4 million and $ 1.7 million, respectively. • Capital outlay exceeded depreciation during the year by $6.0 million. • Long-term liabilities were reduced by $1.7 million through principal repayments. , Business-type Activities: Business-type activities are comprised of: Timber Ridge Affordable Housing Corporation, a component unit of the Town established to provide affordable housing to people working in Vail, and Vail Public Safety Communications Center, an enterprise fund providing dispatch services to emergency service agencies throughout Eagle County Financial Analysis of the Town's Funds As previously mentioned, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. ' B4 GOVERNMENT-WIDE FINANCIAL STATEMENTS 1 Town of Vail, Colorado Statement of Net Assets December 31, 2005 Assets: Equity in pooled cash and investments Cash -restricted Unrestricted cash and investments Receivables (net of allowance for uncollectible accounts): Property taxes assessed Other taxes Other governments Employees Other Inventory Prepaid expenses Interest receivable Loans receivable: Collectible in more than one year Bond issue costs, net of accumulated amortization Property, plant, and equipment, net of accumulated depreciation ' Total Assets Liabilities: Accounts payable Due to other governments Retainage payable Accrued salaries and wages Interest payable Deferred property taxes Other deferred revenue Deposits payable Compensated absences: Due within one year Due in more than one year Bonds payable: Due within one year Due in more than one year Notes payable Total Liabilities Governmental Activities 36,234,759 557,370 508,624 2,765,068 3,849,874 1,869,498 139,456 503,130 275,935 302,365 41,852 1,740,000 205,812 77,223,614 126,217,357 1,320,466 25,000 444, 513 378,187 49,209 2,765,068 136,845 598,192 369,065 553,597 1,755,000 12,075,000 20,470,142 63,393,614 Business-type Activities 120,220 533,890 161,346 190,677 15,519 628,171 20,293,942 21,943,765 55,797 22,191 114,890 151,514 17,550 23,400 35,099 140,000 20,210,000 1,700,000 22,470,441 (1,756,058) Debt service 305,522 - Emergencies 1.,454,000 - Symposium 10,992 - Unrestricted 40,583,087 1,229,382 Total Net Assets (Deficit) 105,747,215 (526 676) Net Assets: Invested in capital assets, net of related debt Restricted for: The accompanying notes are an integral part of these financial statements. C1 Total 36,354,979 1,091,260 669,970 2,765,068 3,849,874 1,869,498 139,456 693,807 275,935 317,884 41,852 1,740,000 833,983 97,517,556 148,161,122 1,376,263 25,000 444,513 400,378 164,099 2,765,068 288,359 615,742 392,465 588,696 1,895,000 32,285,000 1,700,000 42,940,583 61,637,556 305,522 1,454,000 10,992 41,812,469 105,220,539 Town of Vail, Colorado Statement of Activities For the Year Ended December 31, 2005 Net (Expense) Revenue and Program Revenues Changes in Net Assets. Operating Capital Charges for Grants and Grants and Governmental Business-type Expenses Services Contributions Contributions Activities Activities Total Functions/Programs: Governmental Activities: General government 5,389,117 4,266,935 - - (1,122,182) (1,122,182) Public safety 6,714,321 554,809 134,453 - (6,025,059) (6,025,059) Public works and transportation 12,294,071 4,107,741 620,201 19,500 (7,546,629) (7,546,629) Culture and recreation 4,122,633 499,258 61,987 - (3,561,388) (3,561,388) Economic development 3,320,163 - - - .(3,320,163) (3,320,163) Interest on long-term debt 618,396 - - - (618,396 (618,396) Total Governmental Activities 32,458,701 9,428,743 816,641 19,500 (22,193,817 (22,193,817) Business-type activities: Dispatch services 1,943,261 1,400,408 368,700 - (174,153) (174,153) Housing 2,597,137 .1,601,150 - - (995,987} (995,987) Total Business-type Activities 4,540,398 3,001,558 368,700 - (1,170,140) (1,170,140) Total 36,999,099 12,430,301 1,185,341 19,500 (22,193,817) (1,170,140) (23,363,957) General Revenues: Taxes: Sales taxes 19,335,056 - 19,335,056 Real estate transfer taxes 6,206,058 - 6,206,058 Lodging taxes 3,545,369 - 3,545,369 Property and specific ownership taxes ~ 2,652,897 - 2,652,897 Ski area lift ticket admissions tax 2,777,698 - 2,777,698 Franchise taxes 842,529 - 842,529 Cigarette taxes 74,418 - 74,418 Investment earnings 1,156,389 25,556 1,181,945 (Loss) on sale of capital assets (782,005) - (782,005) Capital contributions, net - 181,486 181,486 Miscellaneous 3,259,102 - 3,259,102 Transfers (2,480) 2,480 - Total General Revenues and Transfers 39,065,031 209,522 39,274,553 Change in Net Assets 16,871,214 (960,618) 15,910,596 Net Assets -January 1 88,876,001 433,942 89,309,943 Net Assets (Deficit) -December 31 105,747,215 (526,676) 105,220,539 ,-~Z ,~ ' The accompanying notes are an integral part of these financial statements. C2 Town of Vail, Colorado Balance Sheets Governmental Funds December 31, 2005 Assets: Equity in pooled cash and investments Cash and cash equivalents - UnresVicted Receivables, net of allowance for uncollectible accounts: Property taxes assessed Other taxes Other governments Employees Other Loans receivable Prepaid expenses Total Assets Liabilities and Fund Equity: Liabilities: Accounts payable Due to other govemments Retainage payable ' Accrued payroll and related liabilities Deferred revenue Deferred property taxes not collectible until subsequent year Deposits payable Total Liabilities Fund Balances: Reserved for: Prepaid expenses Loans receivable Retirement of bonded debt Symposium Emergencies Unreserved: Designated for housing loan program Designated for police seizures Designated for repayment of working capital Designated for subsequent years' expenditures Undesignated Total Fund Balances Total Liabilities and Fund Balances 1 Capital Real Estate Conference Vail Vail Local Vail Debt Total General Protects Transfer Tax Center Marketing Marketing Reinvestment Service Governmental Fund Fund Fund Fund Fund District Authority Fund Funds 13,731,118 4,984,605 7,483,433 7,713,527 36,211 - - 305,522 34,254,416 15,210 - - - - 467,276 26,138 - 508,624 2,765,068 - - - _ _ _ _ 2,765,068 580,355 2,617,326 36,680 615,513 - 292,318 - - 4,142,192 167,592 1,395,518 14,070 - - - - - 1,577,180 139,456 - - - _ _ _ 139,456 304,057 121,893 1,333 - - 1,500 65 - 428,648 - 1,7ao,ooo - - - - - - 1,7ao,ooo 217,828 - - - 58,119 275,947 17,920,684 10,859,342 7,535,516 8,329,040 36,211 819,213 26,203 305,522 45,831,731 439,397 182,077 49,538 91,163 - 122,318 - - 884,493 - - - - - - 25,000 - 25,000 - 426,393 18,120 - - - - - 444,513 307,374 1,681 4,313 - - - - - 313,368 136,845 - - - _ _ _ - 136,845 2,765,068 - - _ _ - _ - 2,765,068 598,192 _ - _ 598,192 4,246,876 610,151 71,971 91,163 122,318 25,000 5,167,479 217,828 - - - - 58,119 - - 275,947 - 1,740,000 - - - - - - 1,740,000 - - - - - - 305,522 305,522 10,992 - - - - - - - 10,992 1,402,000 - - - - 52,000 - - 1,454,000 200,000 - - - - - - - 200,000 110,918 - - _ _ _ - - 110,918 - - - - 137,000 - - 137,000 264,656 2,857,200 - - - - - - 3,121,856 11,467,414 5,651,991 7,463,545 8,237,877 36,211 449,776 1,203 33,308,017 13,673,808 10,249,191 7,463,545 8,237,877 36,211 696,895 1,203 305,522 40,664,252 17,920,684 10,859,342 7,535,516 8,329,040 36,211 819,213 26,203 305,522 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 74,015,475 Other long-term assets are not available for current period expenditures and, therefore, are not reported in the funds. 805,034 Internal service funds are used by management to charge the costs of heavy equipment and health insurance to individual funds. ' The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Assets. 5,064,325 Long-term liabilities, including bonds payable, interest payable, and compensated absences, are not due and payable in the current period and, therefore, are not reported in the funds. (14,801,871) ' Net Assets of Governmental Activities 105,747,215 The accompanying notes are an integral part of these financial statements. C3 Town of Vail, Colorado Statement of Revenues, Expenditures Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2005 Capital Real Estate Conference Vail Vail Local Vail Debt Total , General Projects Transfer Tax Center Marketing Marketing Reinvestment Service Governmental Fund Fund Fund Fund Fund. District Authority Fund Funds Revenues: Taxes 15,066,718 7,994,557 6,206,058 3,823,221 - 1,711,743 - - 34,802,297 Permits and licenses 2,552,470 - - - 302,854 - - - 2,855,324 Intergovernmental revenue 1,401,068 19,500 61,987 - - - - - 1,482,555 Charges for services 5,583,722 203,026 479,619 - - - - - 6,266,367 Investment income 428,851 158,636 241,915 207,920 2,410 6,541 206 17,527 1,064,006 Miscellaneous 538,808 2,339,222 201,089 - - - 30,379 - 3,1D9,498 Total Revenues 25,571,637 10,714,941 7,190,668 4,031,141 305,264 1,718,284 30,585 17,527 ' 49,580,047 Expenditures: General government 5,549,232 - - - - - - 1,098 5,550,330 Public safety 6,309,595 - - - - - - - 6,309,595 Public works and transportation 9,312,136 6,291,209 - - - - - - ' 15,603,345 Culture and recreation 1,683,093 - 5,447,871 - - - - - 7,130,964 Economic development - - - 1,484,598 294,643 1,510,288 30,634 - 3,320,163 Debt service: Principal - - - - - - - 1,695,000 1,695,000 Interest - - - - - - 620,299 ' 620,299 Total Expenditures 22,854,056 6,291,209 5,447,871 1,484,598 294,643 1,510,288 30,634 2,316,397 40,229,696 Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses); Transfers in Transfers (out) Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances -January 1 Fund Balances -December 31 2,717,581 4,423,732 1,742,797 2,546,543 10,621 207,996 (49) (2,298,870) 9,350,351 29,300 86,010 38,197 - - - - 2,422,154 2,575,661 (126,687) (2,451,454) - - - - - (2,578,141) (97,387) (2,365,444) 38,197 - - - - 2,422,154 (2,480) , 2,620,194 2,058,288 1,780,994 2,546,543 10,621 207,996 (49) 123,284 9,347,871 11,053,614 8,190,903 5,682,551 5,691,334 25,590 488,899 1,252 182,238 31,316,381 13,673,808 10,249,191 7,463,545 8,237,877 36,211 696,895 1,203 305,522 40,664,252 Net Change in Fund Balances of Governmental Funds 8,347 g71 Amounts reported for govemmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures: However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expenses. This is the amount by which capital outlay exceeded depreciation during the year. ' 6,016,268 Repayment of bond and lease principal are expenditures in the govemmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. This is the amount of principal repayments. 1,695,000 Internal service funds are used by management to charge the cost of heavy equipment and health insurance to ~ ' individual funds. This is the amount of internal service fund change in net assets for the year. 161,099 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 577,348 Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (122,560) In the Statement of Activities, only the gain or loss on the sale and disposal of assets is reported, whereas, in governmental funds, only the proceeds which increase current available resources is reported. This amount represents the amount by which the book value of the disposed assets exceeded proceeds received. . (803,812) Change in Net Assets of Governmental Activities 16,871,214 The accompanying notes are an integral part of these f nancial statements. C4 Town of Vail, Colorado Proprietary Funds Statement of Net Assets December 31, 2005 Assets: Current Assets: Equity in pooled cash and investments Cash and cash equivalents -Unrestricted Accounts receivable ,net of allowance for uncollectibles Inventory Prepaid expenses Total Current Assets Non-current Assets: Cash and cash equivalents -Restricted Bond issue costs, net of accumulated amortization Property, plant, and equipment, net of accumulated depreciation Total Non-current Assets ' Total Assets Liabilities: Current Liabilities: Accounts payable Tenant security deposits Deferred revenue Accrued interest payable Accrued salaries and wages Current portion of bonds payable Current portion of compensated absences Total Current Liabilities Non-current Liabilities: Bonds payable, net of current portion Notes payable Compensated absences, het of current portion Total Non-current Liabilities Total Liabilities Net Assets (Deficit): Invested in capital assets, net of related debt Unrestricted Total Net Assets (Deficit) Business-type Activities Enterprise Fund - Enterprise Fund - Governmental Timber Ridge Dispatch Activities - Affordable Housing Services Internal Corporation Fund TOTAL Service Funds - 120,220 120,220 1,980,343 161,346 - 161,346 - 6,400 184,277 190,677 74,282 - - - 275,933 15,519 - 15,519 26,418 183,265 304,497 487,762 2,356,976 533,890 - 533,890 - 628,171 - 628,171 - 18,716,675 1,577,267 20,293,942 3,208,138 19,878,736 1,577,267 21,456,003 3,208,138 20,062,001 1,881,764 21,943,765 5,565,114 42,613 13,184 55,797 435,974 17,550 - 17,550 - 151,514 - 151,514 - 114,890 - 114,890 - - 22,191 22,191 13,871 140,000 - 140,000 - - 23,400 23,400 20,379 466,567 58,775 525,342 470,224 20,210,000 - 20,210,000 - 1,700,000 - 1,700,000 - - 35,099 35,099 30,569 21,910,000 35,099 21,945,099 30,569 22,376,567 93,874 22,470,441 500,793 (2,314,566) 1,577,267 (737,299) 3,208,138 - 210,623 210,623 1,856,183 (2,314,566) 1,787,890 (526,676) 5,064,321 The accompanying notes are an integral part of these financial statements. C5 Town of Vail, Colorado Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Assets For the Year Ended December 31, 2005 Operating Revenues: Charges for services -Internal Charges for services -External Rent Laundry room lease Insurance reimbursements Other Total Operating Revenues Operating Expenses: Operations Health claims and premiums Depreciation Total Operating Expenses Operating Income (Loss) Non-Operating Revenues (Expenses): Intergovernmental revenues Gain (loss) on disposal of assets Investment income Interest expense reimbursement -Rate cap agreement Interest expense Financing fees Amortization of bond issue costs Total Non-Operating Revenues (Expenses) (Loss) Before Transfers and Capital Contributions Transfers, Net Capital Contributions, Net Change in Net Assets Net Assets (Deficit) • January 1 Net Assets (Deficit) -December 31 _ Business-type Activities Enterprise Fund - Enterprise Fund - Governmental Timber Ridge Dispatch Activities - Affordable Housing Services Internal Corporation Fund TOTAL Service Funds - 559,034 559,034 4,099,954 - 819,504 819,504 243,675 1,567,886 - 1,567,886 - 19,254 - 19,254 - - - - 71,007 14,010 21,870 35,880 8,935 1,601,150 1,400,408 3,001,558 4,423,571 894,163 1,732,034 2,626,197 2,254,936 - - - 2,146,037 525,447 211,227 736,674 - 1,419,610 1,943,261 3,362,871 4,400,973 181,540 (542,853) (361,313) 22,598 - 368,700 368,700 - - - - 69,662 9,341 8,582 17,923 47,031 7,633 - 7,633 - (769,164) - (769,164) - (272,704) - (272,704) - (135,659) - _ (135,659) - (1,160,553) 377,282 (783,271) 116,693 (979,013) (165,571) (1,144,584) 139,291 - 2,480 2,480 - - 181,486 181,486 21,805 (979,013) 18,395 (960,618) 161,096 (1,335,553) 1,769,495 433,942 4,903,225 (2,314,566) 1,787,890 (526,676) 5,064,321 The accompanying notes are an integral part of these financial statements. C6 Town of Vail, Colorado Proprietary Funds Statement of Cash Flows For the Year Ended December 31, 2005 Cash Flows From Operating Activities: Cash received from other funds Cash received from tenants for rent Cash received from (refunded to) tenants for security deposits, net Other cash receipts Cash paid for goods and services Cash paid to employees Net Cash Provided (Used) by Operating Activities Cash Flows From Non-Capital Financing Activities: Transfer (to) other funds Cash received from operating grants Net Cash Provided by Non-Capital Financing Activities Cash Flows From Capitat and Related Financing Activities: Cash received from sale of fixed assets Cash received on issuance of bonds and notes Principal repaid on bonds and notes Cash drawn on line of credit Repayments of amounts drawn on line of credit Interest paid Financing fees paid Acquisition and construction of capital assets for other funds Acquisition and construction of capital assets Net Cash (Used) by Capital and Related Financing Activities Cash Flows.From Investing Activities: Interest on investments Net Cash Provided by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents -Beginning Cash and Cash Equivalents -Ending - Cash and Cash Equivalents -End of Period is Comprised of: ' Equity in pooled cash and investments Cash and cash equivalents -Unrestricted Cash and cash equivalents -Restricted Total -Cash and Cash Equivalents ' Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in inventory (Increase) decrease in prepaid expenses Increase (decrease) in accounts payable Increase (decrease) in other liabilities Increase (decreases) in accrued wages and benefits Total Adjustments Net Cash Provided (Used) by Operating Activities Schedule of Non-Cash Investing, Capital and Financing Activities: Assets donated by Capital Projects Fund Business-type Activities Enterprise Fund - Enterprise Fund - Governmental Timber Ridge Dispatch Activities - Affordable Housing Services Internal Corporation Fund TOTAL Service Funds - 559,034 559,034 4,129,838 1,692,108 - 1,692,108 - (752) - (752) - 25,259 657,097 682,356 322,135 (915,248) (735,909) (1,651,157) (3,156,408) (996,787) (996,787) (588,315) 801,367 (516,565) 284,802 707,250 - 2,480 2,480 - - 368,700 368,700 - - 371,180 371,180 - - - - 69,662 700,000 - 700,000 - (130,000). - (130,000) - 630,246 - 630,246 - (630,246) - (630,246) - (716,083) - (716,083) - (333,803) - (333,803) - - - - (527,949) (479,886) - (479,886) (458,287) 9,341 8,582 17,923 47,031 9,341 8,582 17,923 47,031 330,822 (136,803) 194,019 295,994 364,414 257,023 621,437 1,684,349 695,236 120,220 815,456 1,980,343 - 120,220 120,220 1,980,343 161,346 - 161,346 - 533,890 - 533,890 - 695,236 120,220 815,456 1,980,343 181,540 (542,853) ~ (361,313) 22,598 525,447 211,227 736,674 560,259 (3,055) (184,277) (187,332) 29,883 (51,688) (135) - (135) (4,450) (21,032) 2,658 (18,374) 146,039 118,602 - 118,602 - - (3,320) (3,320) 4,609 619,827 26,288 646,115 684,652 801,367 (516,565) 284,802 707,250 - 181,486 - 21,805 The accompanying notes are an integral part of these financial statements. C7 Town of Vail, Colorado Fiduciary Funds Statement of Fiduciary Net Assets December 31, 2004 Assets: Cash and investments -Restricted Loans to participants Total Assets Net Assets: Held in trust for pension benefits and other purposes Total Net Assets Pension Trust 33,903,192 323,234 34,226,426 34,226,426 Deferred Compensation Plan , 4,425,859 4,425,859 4,425,859 34,226,426 4,425,859 The accompanying notes are an integral part of these financial statements. C8 Town of Vail, Colorado Fiduciary Funds Statement of Changes in Fiduciary Net Assets For the Year Ended December 31, 2005 Deferred Pension Compensation Trust Plan Additions: Contributions 2,023,072 754,792 Investment income 2,335,489 288,675 Total Additions 4,358,561 1,043,467 Deductions: Professional fees 1,851 9,413 Benefits paid 2,450,730 56,820 Total Deductions 2,452,581 66,233 Change in Net Assets 1,905,980 977,234 Net Assets -January 1 32,320,446 3,448,625 Net Assets -December 31 34,226,426 4,425,859 a t The accompanying notes are an integral part of these financial statements. C9 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 I. Summary of Significant Accounting Policies The Town of Vail, Colorado (the "Town") was incorporated in 1972, under the provisions of Article XX of the Colorado Constitution and Municipal Home Rule Act of 1971. The Town operates under aCouncil-Manager form of government. The Town's major operations include public safety, public works and transportation, culture and recreation, economic development, administration (general government), and housing. ' The Town's financial statements are prepared in accordance with generally accepted accounting principles ("GAAP"). The Governmental Accounting Standards Board ("GASB") is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). Governments are also required to follow the pronouncements of the Financial Accounting Standards Board ("FASB") issued through November 30, 1989, when applicable, that do not conflict with-or contradict GASB pronouncements. The more significant accounting policies established by GAAP used by the Town are discussed below. A. Reporting Entity The reporting entity consists of (a) the primary government; i.e., the Town, and (b) organizations for which the Town is financially accountable. The Town is considered financially accountable for legally separate organizations if it is able to appoint a voting majority of an organization's governing body and is either able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the Town. Consideration is also given to other organizations which are fiscally dependent; i.e., unable to adopt a budget, levy taxes, or issue debt without approval by the Town. Organizations for which the ' nature and significance of their relationship with the Town are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete are also included in the reporting entity. The accompanying financial statements present the primary government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in ' substance, part of the Town's operations. There are three blended component units reported in the Town's financial statements: Vail Local Marketing District (the "District"), Timber Ridge Affordable Housing Corporation (the "Corporation") and Vail Reinvestment Authority (the "Authority"). The financial statements of theses entities can be obtained '' from the Town's administrative offices. 1. Vail Local Marketing District t The District was authorized on November 2, 1999 by a general election that established a 1.4% tax on lodging within the Town's boundaries, beginning January 1, 2000. Proceeds from the tax are to be used for organization, ' management, promotion, and marketing of public events, for business recruitment, and for tourism promotion. Town Council members also act as the . District's Board of Directors. The District is reported as a special revenue fund. D1 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) Summary of Significant Accounting Policies (continued) A. Reporting Entity (continued) 2. Timber Ridge Affordable Housing Corporation The Corporation was incorporated on July 9, 2003 as a Colorado non-profit corporation to provide affordable housing for persons employed in the Town or Eagle County, Colorado. The Corporation owns and operates, exclusively on behalf of and for the benefit of the Town, a 198-unit rental housing project (the "Project") located in the Town. The formation of the Corporation was approved by the Town, and its operations are governed by a Board of Directors comprised, as of March 2005, of members of the Town's management team. Previously, the Board was comprised solely of members of the Town Council. Upon dissolution of the Corporation and retirement of all liabilities, all property of the Corporation is to be transferred to the Town. The acquisition of the Project was financed through the issuance of revenue bonds and a note payable to the Town. While the Town is not legally obligated to pay the indebtedness of the Corporation, the Town has agreed to consider providing funds, if needed, to the Corporation to make the scheduled debt service payments of the Corporation. The Town has a right to obtain title to the Project at any time by defeasing all outstanding bonds of the Corporation. The Corporation is reported as an enterprise fund. The Corporation's total expenses exceeded aggregate revenues by $979,013 for 2005. This adds to the Corporation's $1,335,553 deficit net assets balance accumulated in the period from inception of operations, July 17, 2003 to December 31, 2004. While the Corporation's revenues have increased in each year of operations, the ability of the Corporation to further increase rental revenues is limited because mold problems in the remaining rental units in the Project must first be remediated, at substantial cost to the Corporation. Since the inception of operations, the Corporation has incurred mold remediation costs totaling $994,627, which represents a considerable portion of the Corporation's expenses. As of December 31, 2005, 40 of the 198 units at the Project were unavailable for rental due to mold concerns. In addition to limitations on the Corporation's revenue base, the Corporation has substantial long-term debt obligations. As detailed in Note IV.G.1., a significant portion of the Corporation's bonds currently bear a variable weekly interest rate. Short-term interest rates have increased steadily since the issuance of these bonds. While the Corporation's Rate Protection Agreement outlined in Note IV. J. below, has limited the Corporation's effective interest rate on the 2003A Bonds to 4% per annum, the Rate Protection Agreement will expire in 2006. In light of the continued upward trend in short-term interest rates in 2006, the Corporation's effective interest rate on the 2003A Bonds for 2006 and future periods will very likely exceed 4%. Higher interest costs will have a significant adverse impact on the Corporation's cash flows. During 2005, the Corporation was advanced $700,000 by the Town. This additional funding helped improve the Corporation's year-end liquidity position from the prior year, although current liabilities exceeded current assets. D2 ' Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) I. Summary of Significant Accounting Policies (continued) A. ~ Reporting Entity (continued) 2. Timber Ridge Affordable Housing Corporation (continued) Since the Corporation's revenue base is limited without further significant expenditures on mold remediation, interest rates payable on the Corporation's debt are climbing, and since the Corporation has already taken some measures ' to control operating costs and may not be able to further reduce discretionary spending, the above factors may impact the Corporation's ability to meet obligations as they come due. ' The Corporation's Board considers the above factors significant to its future operations and is pursuing the sale and redevelopment of the Project. In July ' 2005, a committee consisting of the Corporation's Board and representatives from Town Council and the Vail Local Housing Authority was formed to solicit requests for proposals (RFP's) for redevelopment. As a result of this process, Corum Real Estate Group, Inc. (Corum) was selected as a potential developer of the property. On March 31, 2006, the Corporation, the Town, and Corum entered into a Memorandum of Understanding (MOU) outlining the roles of each party in working toward the disposition and redevelopment of the Project. The MOU anticipates the redeveloped Project will consist of both "for-sale" and rental units, including a minimum of 600 beds ofdeed-restricted, workforce, rental housing. The MOU further anticipates retirement of the Corporation's outstanding debt and conveyance of the Project to Corum in fee simple. The MOU expires on June 29, 2006 at which time the parties expect to have a Disposition and Development Agreement in place. The Board also projects that, under current master lease arrangements, rental revenues will be sufficient to cover operating expenses and debt service for the next three to four years. However the Board does not anticipate that required reserves will be reinstated during this period. 3. Vail Reinvestment Authority The Authority was created on November 4, 2003 pursuant to the Colorado Urban Renewal Law (C.R.S. 31-25-1) to oversee development and redevelopment of identified blights areas within the Town. The Town Council approved the formation of the Authority at a public hearing, and filed applicable certification of ' compliance with the Division of Local Government. Its operations are governed by a Board of Commissioners comprised solely of members of the Town Council. The Authority is reported as a special revenue fund. ' B. Government-wide and Fund Financial Statements The Town's basic financial statements include, both government-wide (reporting the Town as a whole) and fund financial statements (reporting the Town's major funds). ' - Government-wide financial statements report on information of all of the nonfiduciary activities of the Town and its component units, Both the government-wide and fund financial statements categorize primary activities as either governmental or business- ' type. The Town's public safety, public works and transportation; culture and recreation, economic development, and administration functions are classified as governmental .activities. The Corporation and emergency dispatch services of the Town are classified as business-type activities. 1 , D3 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) Summary of Significant Accounting Policies (continued) B. Government-wide and Fund Financial Statements (continued) The government-wide Statement of Activities reports both the gross and net cost of each of the Town's governmental functions and business-type activities. The governmental functions are also supported by general government revenues (sales taxes, property and specific ownership taxes, investment earnings, etc.). The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants. Program revenues must be directly associated with the governmental function or a business-type activity. Operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column reflects capital-specific grants. The government-wide focus is on the sustainability of the Town as an entity and the change in the Town's net assets resulting from the current year's activities. C. Fund Financial Statements The financial transactions of the Town are reported in individual funds in the fund financial statements. Each fund is accounted for by providing a separate set of self- balancing accounts that comprises its assets, liabilities, fund equity, revenues and expenditures/expenses. The fund focus is on current available resources and budget compliance. The Town reports the following major governmental funds: The General Fund is the Town's primary operating fund. It accounts for all financial resources of the Town, except those required to be accounted for in another fund. The Capital Projects Fund accounts for a portion of the Town's sales tax and intergovernmental revenue which are restricted for the acquisitions of and improvements to the Town's governmental assets. The Real Estate Transfer Tax Fund is used to account for the collection of a real estate transfer tax which is specifically restricted for acquiring, maintaining, and improving real property for parks, recreation, open space and similar purposes. The Conference Center Fund is used to account for the collection of a sales tax and a public accommodations tax which are specifically restricted for the financing of the construction and operations of a conference center in the Town. The Vail Marketing Fund accounts for the collection of business license fees which are specifically restricted for expenditures related to the marketing of the Town. The Vail Local Marketing District is used to account for the activities of the District. The Vail Reinvestment Authority is used to account for the activities of the Authority. D4 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) I. Summary of Significant Accounting Policies (continued) C. Fund Financial Statements (continued) The Town reports the following major proprietary or business-type funds: Timber Ridge Affordable Housing Corporation accounts for the activities of the Corporation. The Dispatch Services Fund accounts for the emergency dispatch services provided by the Town within Eagle County, Colorado. ' Additionally, the Town reports the following fund types: Internal service funds account for the repair and maintenance costs and ' purchase of Town vehicles and equipment, excluding buses and fire trucks. In addition, internal service funds are used to account for the health insurance plan provided to Town employees. Trust funds are used to account for the accumulation of resources for pension benefit payments to qualified Town employees and to account for assets held for employees in accordance with the provisions of Internal Revenue Code section 457. D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Measurement focus refers to whether financial statements measure changes in current resources only (current financial focus) or changes in both current and long-term " resources (long-term economic focus). Basis of accounting refers to the point at which revenues, expenditures, or expenses are recognized in the accounts and reported in the financial statements. Financial statement presentation refers to classification of revenues by source and expenses by function. 1. Long-term Economic Focus and Accrual Basis Both governmental and business-type activities in the government-wide financial statements and the proprietary and fiduciary fund financial statements use the long-term economic focus and are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred, regardless of the timing of the related cash flows. 2. Current Financial Focus and Modified Accrual Basis The governmental fund financial statements use the current financial focus and ' are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; i.e., both measurable and available. "Available" means collectible within the current period or soon enough thereafter (60 days) to be used to pay liabilities of the current period. Expenditures are generally recognized when the related liability is incurred. The exception to this general rule is that principal and interest on general long-term debt and compensated absences are recorded only when ' payment is due. D5 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) Summary of Significant Accounting Policies (continued) D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued) 3. Financial Statement Presentation Amounts reported as program revenues include 1) charges to customers and applicants for goods, services or privileges provided, 2) operating grants and contributions, and 3} capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non- operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenue of the Town's enterprise funds are rental from individuals employed in the Town and charges for services related to emergency dispatch. Operating expenses for the enterprise fund includes operating expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. E. Financial Statement Accounts Equity in Pooled Cash and Investments The Town has a policy of central cash management for all funds except the Pension Trust Fund and the Deferred Compensation Plan Fund. In addition, the component units do not participate in the Town's central cash management. Equity in pooled cash and investments include demand deposits, short-term investments with original maturities of three months or less from the date of acquisition, and long-term investments in U.S. government obligations. Investments are stated at fair market value. 2. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and investments with original maturities of three months or less from the date of acquisition. Restricted cash and cash equivalents represent amounts restricted by bond indentures and other binding commifinents. 3. Receivables Receivables are reported net of an allowance for uncollectible accounts. 4. Property Taxes Property taxes are assessed in one year as a lien on the property, but not collected by the governmental unit until the subsequent year. In accordance with GAAP, the assessed but uncollected property taxes have been recorded as a receivable and as deferred revenue. D6 ' Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) I. Summary of Significant Accounting Policies (continued) ' E. Financial Statement Accounts (continued) 5. Inventory ' Inventory is valued at lower of cost or market using the first-in, first-out method. Inventory in the Heavy Equipment Fund consists of expendable supplies held for ' consumption. 6. Prepaid Expenses Payments made to vendors for services that will benefit periods beyond December 31, 2005 are recor°ded as prepaid expenses. 7. Bond Issuance Costs Issuance costs for bonds payable are deferred and amortized over the term of the loan using the straight-line method for governmental activities. The Corporation uses the bonds outstanding method, which approximates the effective interest method, to amortize these costs. 8. Interfund Receivables and Payables Balances at year-end between funds are reported as "due to /from other funds" in the fund financial statements. Any residual balances not eliminated between the governmental and business-type activities are reported as "internal balances" in the government-wide financial statements. 9. Capital Assets Capital assets, which include land, buildings, improvements, equipment, vehicles . ' and infrastructure assets, are reported in the applicable governmental or business-type activity columns in the government-wide financial statements. Capital assets are defined by the Town as assets with an initial cost of $5,000 or ' more and an estimated useful life in excess of one year. Such assets are recorded at cost where historical records are available and at an estimated historical cost where no historical record exists. Donated capital assets are recorded at estimated fair market value at the date of donation. ' The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed ' assets, as applicable. Capital outlay for projects is capitalized as_ projects are constructed. Interest incurred during the construction phase is capitalized as part~of the value of the assets. Capital assets (excluding land) are depreciated using the straight-line method D7 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) Summary of Significant Accounting Policies (continued) , E. Financial Statement Accounts (continued) 10. Deferred Revenue For governmental funds, deferred revenues arise when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. For proprietary funds, deferred revenues arise when potential revenue is unearned. In subsequent periods, when revenue recognition criteria are met, or when the Town has legal claim to the resources, the liability for deferred revenue is removed and revenue is recognized. 11. Compensated Absences Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as expenditure and a fund liability of the governmental fund that will pay it. Amounts of vested or accumulated vacation leave that are not expected to be liquidated with expendable available financial resources are reported in the governmental activities column in the government-wide financial statements. Vested or accumulated vacation leave of the proprietary fund type is recorded as an expense and liability of that fund as the benefits accrue to employees. In accordance with the provisions of GASB Statement No. 16, Accounting for Compensated Absences, no liability is recorded for non-vesting accumulating rights to receive sick pay•benefits. 12. Fund Equity Governments report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. At December 31, 2005, the Town reported $1,770,514 of restricted net assets which was comprised of $305,522 restricted for debt service payments, $10,992 restricted for a symposium, and $1,454,000 restricted for emergencies (as subsequently explained in Notes III.E. and F.). Designations of fund balance represent tentative management plans that are subject to change. Designations of fund balance are reported only on fund financials and not on the government-wide financial statements. 13. Interfund Transactions Quasi-external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures or expenses initially made from it that are properly applicable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as reductions of expenditures or expenses in the fund that is reimbursed. All other interfund transactions, except quasi-external transactions and reimbursements, are reported as transfers. D8 ' Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) 1 1. Summary of Significant Accounting Policies (continued) F. Significant Accounting Policies 1. Use of Estimates The preparation of financial statements in conformity with GAAP requires the Town's management to make,estimates and assumptions that affect the reported ' _ amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenditures or expenses during the reporting period. Actual results could differ from those estimates. ' 2. Proprietary Funds As required by GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that use Proprietary Fund Accounting, the Town has elected to follow for its proprietary funds, all (1) GASB pronouncements and (2) FASB Statements and Interpretations, APB Opinions, and Accounting Research Bulletins issued on or before November 30, 1989, except those that conflict with a GASB pronouncement. ' 3. Credit Risk The receivables of the various funds of the Town are primarily due from other governments. Management believes that the credit risk related to the receivables is minimal. - 4. Restricted and Unrestricted Resources ' - When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. II. Reconciliation.of Government-wide and Fund Financial Statements A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Assets The governmental fund Balance Sheet includes reconciliation between the fund balance ' of total governmental funds and net assets of governmental activities as reported in the ,government-wide Statement of Net Assets. One element of that reconciliation explains Capital assets used in governmental activities are not financial resources and therefore ' are not reported in the funds". This $74,015,475 difference is related to property, plant and equipment of $106,687,355 less accumulated depreciation of $32,671,880. D9 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) Reconciliation of Government-wide and Fund Financial Statements (continued) A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Assets (continued) Another element of that reconciliation explains "Other long-term assets are not available for current period expenditures and therefore are not reported in the funds". This $805,234 difference is bond issue costs of $433,388, less accumulated amortization of $227,576, pension forfeitures of $557,370, and interest receivable of $41,852. Additionally, the reconciliation states that long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. This $14,801,871 difference is related to bonds and notes payable of $13,830,000, accrued compensated absences of $922,662, and interest payable of $49,209. B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenue, Expenditures and Changes in Fund Balances and the Government-wide Statement of Activities The governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances includes reconciliation between net change in fund balances of governmental funds and changes in net assets of governmental activities as reported in the government-wide Statement of Activities. One element of that reconciliation explains "Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense." The details of this $6,016,268 difference are comprised of capital outlay of $8,766,785, less depreciation expense of $2,750,517. D10 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) III: Stewardship, Compliance, and Accountability A. Budgetary Information An annual budget and appropriation ordinance is adopted by Town Council in ' accordance with the Town's Home Rule Charter. Budgets are prepared on the basis of GAAP for all funds except the Heavy Equipment ' ~ Fund and the Dispatch Services Fund. The budgets for these funds have been adopted on a non-GAAP budget and are reconciled to GAAP below: Heavy Dispatch ' Equipment Services Fund Fund Change in Net Assets -Budget Basis $ 178,605 40,490 add/(less): Contribution from other fund 21,805 181,486 Change in compensated absences (4,060) 7,646 Capitalized assets 551,899 - Depreciation (561,740) (211,227) Net book value of disposed assets (23,950) - I ~ Change in Net Assets - GAAP Basis $ 162,559 18,395 ' Annual appropriations are adopted for all funds. Expenditures may not legally exceed appropriations at the fund level. All appropriations lapse at year-end. The Town followed these procedures in preparing, approving, and enacting its budget for ' 2005. (1) For the 2005 budget year, prior to August 25, 2004, the County Assessor sent the Town a certified assessed valuation of all taxable property within the Town's boundaries. (2) Prior to the end of the 2004 fiscal year, the Town Manager submitted to the Town ' Council a budget and accompanying message. (3) Prior to December 15, 2004, the Town computed and certified to the County Commissioners a levy rate that derived the necessary property taxes as computed in the proposed budget. (4) After a required publication of "Notice of Proposed Budget", the Town adopted ' the proposed budget and an appropriation resolution which legally appropriated expenditures for the upcoming year. (5) After adoption of the budget ordinance, the Town may make the following ' changes: a) transfer appropriated money between funds; b) approve supplemental appropriations to the extent of revenues in excess of those estimated in the budget; c) approve emergency appropriations; and d) reduce appropriations for which originally estimated revenues are insufficient. D11 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) Stewardship, Compliance, and Accountability (continued) A. Budgetary Information (continued) Taxes levied in one year are collected in the succeeding year. Thus, taxes certified in 2004 were collected in 2005 and taxes certified in 2005 will be collected in 2006. Taxes are due on January 1st in the year of collection; however, they may be paid in either one installment (no later than April 30th) or two equal installments (not later than February 28th and June 15th) without interest or penalty. Taxes that are not paid within the prescribed time bear interest at the rate of one percent (1 %) per month until paid. Unpaid amounts and the accrued interest thereon become delinquent on June 16th. During the year, supplemental appropriations were necessary. The budgetary comparison statements reflect the original budget and the final budget after legally authorized revisions were made. B. Budgetary Information -Vail Local Marketing District The District's budget timetable varies from the Town's. The District followed these procedures in preparing, approving, and enacting its budget for 2005. (1) On or before September 30, 2004, the District must submit to the Board a recommended budget that details the revenues necessary to meet the District's operating requirements. This was done on September 20, 2005. (2) After appropriate public notice and a required public hearing, the Board must adopt the proposed budget and an appropriating resolution that legally appropriated expenditures for the upcoming year on or before December 5, 2004. The Board adopted the 2005 budget on November 1, 2005. (3) After adoption of the initial budget resolution, the District may make the following changes: a) approve supplemental appropriations to the extent of revenues in excess of those estimated in the budget; b) approve emergency appropriations; and c) reduce appropriations for which originally estimated revenues are insufficient. . During the year, supplemental appropriations were necessary. The budgetary comparison statements reflect the original budget and the final budget after legally authorized revisions were made. C. Deficit Net Assets -Timber Ridge Affordable Housing Corporation The Corporation had a deficit of net assets at December 31, 2005 of $2,314,566. D12 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) III. Stewardship, Compliance, and Accountability (continued) r D. Compliance with Trust Indentures -Timber Ridge Affordable Housing Corporation The bond indenture for the Corporation's Adjustable Rate Housing Facilities Revenue ' Bonds, Series 2003A (the "2003A Bonds"), establishes initial funding of a bond reserve fund at $317,094 but permits the trustee to release moneys in the bond reserve fund to the Corporation to pay operating and maintenance expenses of the Project. During 2005, a total of $0 ($176,788 for the period ended December 31, 2004) was released to the ' Corporation pursuant to these provisions in the indenture of the 2003A Bonds. As a result, balances at December 31, 2005 and 2004 in the bond reserve fund for the 2003A Bonds were $577,274 and $577,681, respectively, less than the bond reserve requirement of $595,157. As described in Note IV.J., the Reimbursement Agreement with U.S. Bank requires the Corporation to fund a Replacement Reserve in 2003 and annually thereafter. At December 31, 2005 and 2004, balances in the Replacement Reserve account were $93,819 and $91,888 less than required by the Reimbursement Agreement. ' The Reimbursement Agreement also requires that, commencing August 1, 2004 and annually thereafter, the Corporation deposit into a Rate Cap Escrow account an amount not less than $45,000, to be used only to pay for required rate protection agreements. As of December 31, 2004, the balance in the Rate Cap Escrow account was $45,000 less than required by the Reimbursement Agreement. However, at December 31, 2005, the Corporation was in compliance with the required funding of the Rate Cap Escrow account. -The 2003A Indenture and 20038 Indenture each impose financial ratios relating to debt service coverage. At December 31, 2005 and 2004, the Corporation did not meet the minimum required debt service coverage ratios under the terms of the 2003A Indenture ' or the 20036 indenture. E. TABOR Amendment In November 1992, Colorado voters amended Article X of the Colorado Constitution by adding Section 20, commonly known as the Taxpayer's Bill of Rights ("TABOR"). TABOR contains revenue, spending, tax and debt limitations that apply to the State of Colorado ' and local governments. TABOR requires, with certain exceptions, advance voter approval for any new tax, tax rate increase, mill levy above that for the prior year, extension of any expiring tax, or tax policy change directly causing a net tax revenue gain to any local government. Except for refinancing bonded debt at a lower.interest rate or adding new employees to existing pension plans, TABOR requires advance voter approval for the creation of any ' multiple-fiscal year debt or other financial obligation unless adequate present cash reserves are pledged irrevocably and held for payments in all future fiscal years. TABOR also requires local governments to establish an emergency reserve to be used ' for declared emergencies only. Emergencies, as defined by TABOR, exclude economic conditions, revenue shortfalls, or salary or fringe benefit increases. The reserve is calculated at 3% of fiscal year spending for fiscal years ending after December 31, 1995. ' Fiscal year spending excludes bonded debt service and enterprise spending. The Town has reserved a portion of the December 31, 2005 fund balance in the General Fund for this purpose in the amount of $1,402,000 which is the approximate required reserve. D13 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) Stewardship, Compliance, and Accountability (continued) E. TABOR Amendment (continued) The initial base for local government spending and revenue limits is December 31, 1992 fiscal.year spending. Future spending and revenue limits are determined based on the prior year's fiscal year spending adjusted for inflation in the prior calendar year plus annual local growth. Fiscal year spending is generally defined as expenditures and reserve increases with certain exceptions. Revenue, if any, in excess of the fiscal year. spending limit must be refunded in the next fiscal year unless voters approve retention of such revenue. On November 16, 1993, voters of the Town approved the collection and expenditure of all revenues generated, including reduction in debt service during 1993 and each subsequent year (not including revenue generated from ad valorem property taxes) without any increase in such tax rates and the expenditure of such revenues for debt service, municipal operations, and capital projects, effective January 1, 1994. On November 7, 2000, the Town's electorate approved the collection and expenditure of all revenues received from ad valorem property taxes levied in 2000 and each year thereafter. The remaining restrictions of the TABOR Amendment apply, which are: o Voter approval of~all new taxes and tax rate increases; Voter approval for new or additional Town debt; No increase or imposition of a new real estate transfer tax; and, All election requirements remain in effect. F. The Town's management believes it is in compliance with the financial provisions of TABOR. However, TABOR is complex and subject to interpretation. Many of its provisions, including the interpretation of how to calculate fiscal year spending limits, will require judicial interpretation. TABOR Amendment -Vail Local Marketing District As required by TABOR, the District has reserved $52,000 of its fund balance for emergencies, which is the approximate required reserve at December 31, 2005. The ballot question approved by voters on November 2, 1999, which established the 1.4% tax on lodging within the Town's boundaries also authorized the District to collect and sperid the proceeds of the lodging tax, investment income, and all other revenues, without regard to the limitations imposed by TABOR, effective January 1, 2000. The District's management believes it is in compliance with the financial provisions of TABOR. However, TABOR is complex and subject to interpretation. Many of its provisions will require judicial interpretation. D14 ' Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) IV. Detailed Notes on all Funds ' A. Deposits and Investments ' Pursuant to its charter, the Town has adopted, by ordinance, an investment policy governing the types of institutions and investments with which it may deposit funds and transact business. Under this policy, the Town may invest in federally insured banks, debt obligations of the U.S. Government, its agencies and instrumentalities, governmental mutual funds and pools including 2a7-like pools, and repurchase agreements subject to policy requirements. The Town also accounts for the operations of the employees' pension plans that are administered by select employees acting as trustees who are governed by a trus# agreement. The trust agreement gives the trustees considerable latitude with investment alternatives. As a result, all pension investments are considered legal under the trust agreement. The Town's deposits and certificates of deposit are entirely covered by federal depository insurance (FDIC) or by collateral held under Colorado Public Deposit Protection Act ("PDPA"). The FDIC insures the first $100,000 of the Town's deposits at each financial institution. Deposit balances over $100,000 are collateralized as required by PDPA. As of year end, the bank balance of the Town's deposits was $9,385,685. At year end, the Town had the following investments and maturities: Tvne Deposits: Cash on hand Demand deposits Certificates of deposit Certificates of deposit Total deposits Investments: US Agencies - FHLM, FHLB, FNMA US Agencies - FHLMC, FHLB, FNMA, FFC US Agencies -FNMA, FC Mortgage pools Colotrust Pension and Section 457 investments Total investments Total deposits and investments Reconciliation to Statement of Net Assets: Equity in pooled cash and investments Cash and cash equivalents -Unrestricted Cash and cash equivalents -Restricted Fiduciary Funds Total Carrying Rating Maturities Value $ 15,210 4, 747,224 <1 year 1,126,524 <5 years 523,220 6,412,178 AAA <1 year $ 1,524,612 AAA <5 years 1,622,931 Not rated <5 years 873,174 AAA N/A 1,692,617 AAAm N/A 25,433,327 N/A N/A 38,886,421 70,033,082 $ 36,354,979 669,970 1,091,260 38,329,051 76,445,260 D15 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) IV Detailed Notes on all Funds A. Cash and Investments (continued) Pools. The Town has invested in the Colorado Government Liquid Asset Trust ("COLOTRUST"), which is an investment vehicle established for local government entities in Colorado to poll surplus funds. They operate similarly to a money market fund and each share is equal in value to $1. Investments of the trusts consist of U.S. Treasury bills, notes and note strips, and repurchase agreements collateralized by U.S. Treasury securities. COLOTRUST is rated AAAm by Standard and Poor's. Interest Rate Risk. As a means of limiting its exposure to interest rate risk, the Town diversifies its investments by security type and institution, and limits holdings in any one type of investment with any=one issuer. The Town coordinates its investments maturities to closely match cash flow needs and restricts the maximum investment term to less than five years from the purchase date. As a result of the limited length of maturities the Town has limited its interest rate risk. Credit Risk. The Town's general investment policy is to apply the prudent-person rule; investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital, and, in general, avoid speculative investments. Concentration of Credit Risk. The Town diversifies its investments by security type and institution. Credit quality distribution for investments, with credit exposure as a percentage of total investments are as follows at year end: Investment Type Rating Percentage Colotrust Not Rated 82% Investments in the Deferred Compensation Plan and the Pension Trust Funds are held by trustees and are not categorized because they are not evidenced by specific securities that exist in physical or book form. D16 ' Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) IV. Detailed Notes on all Funds ' B. Receivables Receivables as of year-end for the Town's funds, including applicable allowances for ' uncollectible accounts, are as follows: Receivables: Property taxes ' Other taxes Other governments Employees ' Other Gross Receivables Less: Allowance for uncollectibles Net Receivables Capital Real Estate Conference General Projects Transfer Center Marketing Fund Fund Tax Fund Fund District $ 2,765,068 - - _ _ 580,355 2,617,326 36,680 615,513 292,318 167,592 1,395,518 14,070 - - 139,456 - - _ _ 305,057 121,893 1,333 - 1,500 3,957,528 4,134,737 52,083 615,513 293,818 (1,000) - $ 3,956,528 4,134,737 52,083 615,513 293,818 Vail Heavy Rein- Equip- Dispatch Health Timber vestme nt ment Services Insurance Ridge Authority Fund Fund Fund Total Receivables: Property taxes $ - - - - - 2 765 068 Other taxes - - - - _ 4,142,192 ' Other governments 1,577,180 Employees - - - - - 139,456 Other 6,400 65 72,387 184,277 1,895 694,807 ' Gross Receivables 6,400 65 72,387 184,277 1,895 9,318,703 Less: Allowance for uncollectibles - - - - (1,000) Net Receivables $ 6,400 65 72,387 184,277 1,895 9,317,703 D17 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) IV. Detailed Notes on all Funds (continued) B. Receivables (continued) Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Total deferred revenue for governmental activities totaled $2,901,913 and is comprised of the following: General Fund Property taxes assessed but not collectible until 2006 $ 2,765,068 Other deferred revenues: Business licenses ~ 51,742 Library grants 78,398 Police programs 6,705 $ 2,901,913 Deferred revenue for business-type activities in the amount of $114,890 is related to prepaid rent. D18 IV. Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) Detailed Notes on all Funds (continued) C. Capital Assets Capital asset activity for the year ended December 31, 2005 was as follows: Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital Assets, Not Being Depreciated: Land $ 22,158,831 165,730 - 22,324,561 Total Capital Assets, Not Being Depreciated 22,158,831 165,730 - 22,324,561 Capital Assets, Being Depreciated: Buildings and improvements Infrastructure and improvements Equipment and vehicles Total Capital Assets Being Depreciated Less Accumulated Depreciation For: Buildings and improvements Infrastructure and improvements Equipment and vehicles Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Govemmental Activities Capital Assets, Net ' Business-type Activities Capital Assets, Not Being Depreciated: ' Land Total Capital Assets, Not Being Depreciated Capital Assets, Being Depreciated: ' Buildings and improvements Equipment Total Capital Assets Being Depreciated ' Less Accumulated Depreciation For: Buildings and improvements Equipment ' Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net ' Business-type Activities Capital Assets, Net 54,683,092 633,831 (785,991) 54,530,932 11,660,350 7,808,794 - 19,469,144 19,468,732 716,379 (1,276,555) 18,908,556 85,812,174 9,159,004 (2,062,546) 92,908,632 (23,555,196) (1,473,963) - (25,029,159) (406,548) (349,221) - (755,769) (11,986,120) (1,489,073) 1,250,541 (12,224,652) (35,947,864) (3,312,257) 1,250,541 (38,009,580) 49,864,310 5,846,747 (812,005) 54,899,052 $ 72,023,141 6,012,477 (812,005) 77,223,613 $ 4,399,500 - - 4,399,500 4,399,500 - - 4,399,500 15,592,145 15,592,145 2,230,538 181,486 (27,255) 2,384,769 17,822,683 181,486 (27,255) 17,976,914 (759,810) (519,267) (1,279,077) (613,243) (217,406) 27,255 (803,394) (1,373,053) (736,673) 27,255 (2,082,471) 16,449,630 (555,187) - 15,894,443 $ 20,849,130 (555,187) - 20,293,943 D19 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) IV. Detailed Notes on all Funds (continued) C. Capital Assets (continued) Depreciation expense was charged to functions of the Town as follows: Govemmental Activities: General government $ 236,535 Public safety 259,791 Public works and transportation 2,235,131 Culture and recreation 563,098 Economic development 17,702 Total Depreciation Expense -Governmental Activities $ 3,312,257 Business-type Activities: Dispatch services $ 211,227 Housing 525,446 Total Depreciation -Business-type Activities $ 736,673 Depreciation on fixed assets is recorded using the following estimated useful lives: Years D. E. Buildings 25 - 40 Building improvements 7 - 25 Infrastructure 5 - 30 Vehicles 5 - 15 Equipment 5 - 10 At December 31, 2005, the Town had $4,326,093 of fully depreciated assets. Operating Leases The Town is committed under various leases for buildings, office space, and equipment. For accounting purposes, these leases are considered to be operating leases, and therefore, the liability and the related assets have not been recorded in these financial statements. Interfund Receivables, Payables, and Transfers There were no interfund balances at December 31, 2005. Interfund transfers during the year ended December 31, 2005 were as follows: Transferred to: Transferred from: Amount Purpose Capital Projects Dispatch Services $ 17,020 Funding for capital acquisitions Capital Projects General 68,990 Funding for capital acquisitions Real Estate Transfer Tax General 38,197 Funding for AIPP program Debt Service Capital Projects 2,422,154 Transfer sales tax for debt service payment Dispatch General 19,500 Funding for CAD/RMS system General Capital Projects 29,300 Funding for construction mitigation signs D20 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) 1 IV. Detailed Notes on all Funds (continued) ' F. Long-term Liabilities -Governmental Activities The Town has the following long-term debt outstanding for governmental activities: 1. Tax-Exempt Sales Tax Revenue Refunding Bonds, Series 1998A ' The Town issued $8,760,000 of insured Tax-Exempt Sales Tax Revenue Refunding Bonds (the "1998A Bonds") dated September 1, 1998. Proceeds of the 1998A and 19986 Bonds (described below) were used to refund the outstanding principal balance on bonds issued in 1991 and 1992, which are considered to be defeased. The interest rate on the 1998A Bonds ranges from 4.25% to 4.5%. Coupon payment dates for the 1998A Bonds are June 1 and December 1 annually. ' The Bonds are revenue obligations of the Town payable solely from the Town's 4% sales tax. The 1998A Bonds are secured by a lien on, but not an exclusive lien on, the sales tax. 1998A Bonds maturing on and after December 1, 2009 are subject to redemption prior to maturity at the option of the Town, in whole or in part, on December 1, 2008 and thereafter, at a redemption price equal to par, plus accrued interest to the redemption date. 2. Taxable Sales Tax Revenue Refunding Bonds, Series 19988 The Town issued $735,000 of insured Taxable Sales Tax Revenue Refunding Bonds (the "19988 Bonds") dated September 1, 1998. The interest rate ranges from 6.00% to 6.05%. Coupon payments are due June 1 and December 1 annually. The 19986 Bonds are revenue obligations of the Town payable solely from the Town's 4% sales tax. The bonds are secured by a lien on, but not an exclusive lien on, the sales tax. The 19986 Bonds are not subject to redemption prior to maturity. ' 3. General Obligation Refunding Bonds, Series 2002A The Town issued $3,205,000 of General Obligation Refunding Bonds dated September 1, 2002 (the "2002A Bonds"). Proceeds from the 2002A bonds were ' used to refund 1992 bonds. The interest rate on the 2002A Bonds ranges from 3.0% to 4.0% and is payable on December 1 annually through December 2005. The 2002A Bonds are general obligations of the Town, payable from ad valorem ' property taxes to be levied without limitation as to rate or amount against all taxable property in the Town. The Series 2002A Bonds are not subject to early redemption. D21 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) IV. Detailed Notes on all Funds (continued) F. Long-term Liabilities -Governmental Activities (continued) 4. Sales Tax Revenue Refunding Bonds, Series 20026 The Town issued $5,570,000 of Sales Tax Revenue Refunding Bonds dated September 1, 2002 (the "20026 Bonds"). Proceeds from the 20026 Bonds were used to refund outstanding 1992 bonds. The interest rate on the 20026 Bonds ranges from 2.5% to 4.0% and is payable on June 1 and December 1 annually through December 1, 2012. The 20026 Bonds are special limited obligations of the Town payable solely from the Town's existing 4% sales tax and from any legally available tax or taxes or fees (other than general ad valorem tax). The 20026 Bonds constitute an irrevocable lien (but not an exclusive lien) upon the pledged revenues, on parity with the 4998 Bonds. 20026 Bonds maturing on or before December 1, 2011 are not subject to prior redemption. 20026 Bonds maturing on or after June 1, 2012 are subject to redemption prior to their maturities, at the option of the Town, in whole or in part, on December 1, 2011 or thereafter, at a redemption price equal to the principal amount redeemed, plus a redemption premium equal to 1 % of the principal redeemed, plus accrued interest to the redemption date. G. Long-term Liabilities -Business-type Activities The Town has the following long-term debt outstanding for business-type activities: 1. Adjustable Rate Housing Facilities Revenue Bonds, Series 2003A The 2003A Bonds were issued July 15, 2003 in the principal amount of $19,025,000 as limited obligations of the Corporation and not indebtedness of the Town. The 2003A Bonds are payable solely from the rents and other receipts from operation of the Project, net of the Project's actual operating expenses (the "Pledged Revenues") and the various reserve funds and other monies pledged under the terms of the 2003A indenture. Certain capitalized terms are further described in the 2003A indenture. The 2003A Bonds bear interest at the Weekly Rate established by the George K. Baum & Company (the "Remarketing Agent") until converted to another "mode", including a Fixed Rate, by the Corporation. While in any interest rate mode other than a Fixed Rate, the 2003A Bonds are subject to repurchase upon demand by any bondholder at 100% of the outstanding principal amount plus accrued interest. All tendered bonds are then to be subsequently remarketed by the Remarketing Agent. D22 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) IV Detailed Notes on all Funds (continued) G. Long-term Liabilities -Business-type Activities (continued) 1. Adjustable Rate Housing Facilities Revenue Bonds, Series 2003A (continued) The 2003A Bonds are subject to redemption prior to maturity (December 1, 2032 or specific maturity date, if converted to Fixed Rate) at the Corporation's option, using moneys in the Redemption Fund, as follows: ~\ • 2003A Bonds in a Daily Mode or Weekly Mode - on any date prior to Maturity at 100% of the principal amount, plus accrued interest. • 2003A Bonds in a Commercial Long-Term Mode -after the following No-Call Period and at the following redemption prices, plus accrued interest: -- Length of Rate Period ~~ Greater than 12 years No-Call Period 10 years from the Rate Change Date Redemption Price 101 %, declining 0.5% per 6 months to 100% Greater than 4 years, but less than 12 years Less than or equal to 4 years Until 2 years prior to the end of the Rate Period Length of the Rate Period 100% Not subject to optional redemption • 2003A bearing a Fixed Rate -after the following No-Call Period and at the following redemption prices, plus accrued interest: Length of Rate Period Greater than 12 years Greater than 4 years, but less than 12 years Less than or equal to 4 years No-Call Period 10 years from the Conversion Date Until 2 years prior to Maturity Term to Maturity Redemption Price 101 %, declining 0.5% per 6 months to 100% 100% Not subject to optional redemption From the date of issuance through December 31, 2005, the 2003A Bonds have been in Weekly Mode, with interest rates set by the Remarketing Agent. Interest rates on the 2003A Bonds ranged from 2.52% - 4.49% per annum in 2005 and from 1.19% to 2.54% per annum in 2004. At December 31, 2005, the interest rate on the 2003A Bonds was 4.49% per annum (2.52% at December 31, 2004); however, the Corporation's effective interest rate has been limited to 4$, as provided by the Rate Protection Agreement discussed in Note IV. J. Total interest expense for 2005 incurred in respect of the 2003A Bonds was $658,927 ($304,444 for 2004). D23 IV. Town of Vail, Colorado Notes to the Financial Statements ' December 31, 2005 (Continued) Detailed Notes on all Funds (continued) ' G. Long-term Liabilities -Business-type Activities (continued) 2. Subordinate Housing Facilities Revenue Bonds, Series 20036 ("20038 Bonds") The 20036 Bonds were issued July 15, 2003 in the principal amount of $1,570,000 as subordinated, limited obligations of the Corporation and not indebtedness of the Town. The 20036 Bonds are payable solely from the , Pledged Revenues and the various reserve funds and other monies pledged under the terms of the 20036 indenture, but the pledge of security interest in the Pledged Revenues is subordinated to the pledge of these same revenues for payment of the 2003A Bonds. The 20036 Bonds bear interest at the rate of 6.25% per annum, with semi-annual blended payments of interest and principal on June 1 and December 1 annually. , During 2005, the Corporation incurred interest expense totaling $90,260 in respect of the 20036 Bonds ($97,474 for 2004). The 20036 Bonds mature December 1, 2013 but are subject to prior redemption, at the Corporation's option, at 100% of the principal amount, plus accrued interest; provided that redemption of the bonds is not from the proceeds of refunding bonds or other financing by the Corporation. , 3. Promissory Note -Town of Vail (the "Town Notes") In connection with the Corporation's~purchase of the Project, the Town advanced $1,000,000 to the Corporation upon execution of a promissory note. During 2005, the Town advanced an additional $700,000 to the Corporation upon execution of another promissory note. At December 31, 2005, the balance outstanding under the terms of these promissory notes (collectively, the "Town Notes") was $1,700,000 ($1,000,000 at December 31, 2004). The Town Notes, which bear interest at the rate of 1.5% per annum, matures December 1, 2032. The Town Notes are payable solely from the Pledged Revenues, but the pledge of security interest in the Pledged Revenues is subordinated to the pledge of these same revenues for payment of the 2003A Bonds and the 20036 Bonds. The Town Notes are payable to the extent that the Corporation has determined that excess net revenues of the Project, after provision for necessary operating or capital reserves, have accumulated semi-annually on the business day following debt service on the 20036 Bonds. The Town Notes may be repaid by the Corporation at any time without penalty. In the event that the a shortfall arises in the Bond Reserve Funds (as defined in the 2003A and 20038 Indentures) for the 2003A Bonds and/or the 20036 Bonds which is not cured within the prescribed deadlines by the Corporation, U.S. Bank National Association (the "Trustee") will request that the Town replenish the deficient Bond Reserve Fund, and the Town has agreed to consider such requests but is not obligated to do so. Any funds advanced by the Town to replenish Bond Reserve Funds will be considered additional loans by the Town, subject to the same terms as the original Town Notes. The Town's failure to replenish any deficiency in the Bond Reserve Funds will not constitute an Event D24 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) IV. Detailed Notes on all Funds (continued) 3. Promissory Note -Town of Vait (the "Town Notes") (continued) of Default (as defined in the 2003A and 20036 Indentures) for the 2003A Bonds or the 20036 Bonds. The Corporation incurred interest expense totaling $19,977 during 2005 ($15,000 for 2004) in respect of the Town Notes. At December 31, 2005, the Corporation had accrued a total of $41,852 ($21,875 at December 31, 2004) in interest payable to the Town under the terms of the Town Notes. H. Long-term Liabilities -Compensated Absences The Town has a policy allowing the accumulation of paid vacation and sick leave, subject to certain maximum limits. In accordance with GAAP, the Town's approximate liability for vacation pay earned by employees at December 31, 2005 has been reflected in the proprietary type fund financial statements and in the governmental activities column of the government-wide financial statements, Accumulated sick pay of approximately $2,292,000 at December 31, 2005 has not been reflected in the Town's financial statements as the amount is partially insured by an independent insurance company and the amounts are not payable at termination. I. Long-term Liabilities -Activity and Debt Service Schedules Long-term liability activity for the year ended December 31, 2005 was as follows: Govemmental Activities: General Obligation Bonds: Refunding Bonds, Series 2002A Sales Tax Revenue Bonds: Tax-Exempt Refunding Bonds, Series 1998A Taxable Refunding Bonds, Series1998B Refunding Bonds, Series 20026 Compensated absences Total Governmental Activities Long-term Liabilities Beginning Balance Additions Reductions Ending Due Within Balance One Year Business-type Activities: Housing Facilities Revenue Bonds: Adjustable Rate, Series 2003A Subordinated, Series 20036 Promissory note Compensated absences Total Business-type Activities Long-term Liabilities $ 770,000 - (770,000) - - 8,760,000 - - 8,760,000 - 735,000 - - 735,000 360,000 5,260,000 - (925,000) 4,335,000 1,395,000 845,363 77,299 - 922,662 369,065 $ 16,370,363 77,299 {1,695,000) 14,752,662 2,124,065 $ 19,025,000 - - 19,025,000 - 1,455,000 - (130,000) 1,325,000 140,000 1,000,000 700,000 - 1,700,000 - 66,115 - (7,616) 58,499 23,400 $ 21,546,115 700,000 (137,616) 22,108,499 163,400 D25 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) IV. Detailed Notes on all Funds (continued) I. Long-term Liabilities -Activity and Debt Schedules (continued) J. Debt service requirements at December 31, 2005 were as follows: Governmental Activities: 2006 2007 2008 2009 2010 2011-2012 Total Govemmental Activities Business-type Activities 2006 2007 2008 2009 2010 2011-2015 2016-2020 2021-2025 2026-2030 2031-2032 Total Business-type Activities Principal $ 1,755,000 1,810,000 1,890,000 1,965,000 2,045,000 4,365,000 13,830,000 $ 140,000 145,000 155,000 550,000 585,000 3,100,000 3,265,000 4,250,000 5,520,000 4,340,000 ~ 22,050,000 Interest Total 562,324 512,099 432,396 355,165 272,181 276,382 2,410,547 2,317,324 2,322,099 2,322,396 2,320,165 2,317,181 4,641,382 16,240,547 869,313 860,563 851,500 841,813 816,550 3,649,675 3,015,100 2,287,100 1,341,300 210,800 14,743,714 1,009,313 1,005,563 1,006,500 1,391,813 1,401,550 6,749,675 6,280,100 6,537,100 6,861,300 4,550,800 36,793,714 Included in debt service requirements for business-type activities above are principal and interest payments due to the Town in the amounts of $1,700,000 and $688,500, respectively. Credit Facility and Reimbursement Agreement -Timber Ridge Affordable Housing Corporation Certain capitalized terms are defined in the 2003A Bonds Indenture. In connection with the issuance of the 2003A Bonds, an irrevocable, stand-by, direct pay letter of credit (the "Credit Facility') in the amount of $19,207,432 was established July 17, 2003 by U.S. Bank, National Association ("U.S. Bank") in favor of the Trustee for the 2003A Bonds. Under the terms of the Credit Facility, up to $19,025,000 may be drawn to pay principal amounts of the 2003A Bonds, and up to $182,432 may be drawn to pay up to 35 days' accrued interest on the 2003A Bonds at a maximum rate of 10% per annum. Available credit under the Credit Facility wi11 be permanently and proportionately reduced upon notice from the Trustee of redemption of less than all of the 2003A Bonds. D26 ~ .. 1 1 1 1 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) Detailed Notes on all Funds (continued) J. Credit Facility and Reimbursement Agreement -Timber Ridge Affordable Housing Corporation (continued) The Credit Facility expires at the earlier of: a. July 17, 2008, although it automatically renews for successive one-year terms (unless U.S. Bank notifies the Trustee that the Credit Facility has not been renewed); b. 15 days following notice by U.S. Bank requiring payment of all outstanding 2003A Bonds due to Default; c. The date of acceleration or redemption of all 2003A Bonds; d. The second business day after conversion of the 2003A Bonds to a Fixed Mode interest rate; or e. The date of surrender of the Credit Facility for cancellation, as required by the Indenture. Concurrent with the Credit Facility, the Corporation executed a Reimbursement Agreement and a Demand Note in favor of U.S. Bank, evidencing the Corporation's obligation to repay all advances under the Credit Facility, together with interest on all such draws. All amounts drawn on or charged against the Credit Facility bear interest at the Bank Rate, which is equal to U.S. Bank's Prime Rate plus 200 Basis Points. The Credit Facility automatically renews each year, subject to the Corporation's compliance with requirements as to operational performance of the Corporation, provision of certain records to the Trustee, and payment of all fees (including annual stand-by fees equal to 125 Basis Points calculated on the original credit commitment, plus U.S. Bank's standard fees and charges for processing draws on the Credit Facility). Pursuant to this arrangement, the Corporation incurred financing fees during 2005 and 2004 totaling $243,319 and $243,759, respectively, for U.S. Bank in respect of stand-by fees for the Credit Facility. During 2003, U.S. Bank was paid aone-time origination fee of $192,074 from the proceeds on issuance of the 2003A Bonds, which has been capitalized as Bond Issue Costs. During 2005, the Corporation drew and repaid $630,246 ($285,893 for 2004) of advances on the Credit Facility. At December 31, 2005 and 2004, no balance was outstanding on the Credit Facility. The Reimbursement Agreement imposes the following funding commitments on the Corporation: a. Commencing January 1, 2009, the Corporation is to deposit into the Bond Principal Fund an amount equal to 1/12th of the scheduled principal reductions for the 2003A Bonds, to be used by the Trustee to pay for optional redemptions as provided in the 2003A Indenture. b. $90,000 was paid from the proceeds of issuance of the 2003A Bonds into a Replacement Reserve account. Annually thereafter, the Corporation is to deposit an equal amount increased by 3% per annum into the Replacement Reserve account, with usage of such funds restricted to capital improvements to the Project approved by U.S. Bank. The Replacement Reserve Account is pledged to U.S. Bank and not the owners of the 2003A Bonds. c. The Corporation is required to deposit all security deposits received from tenants of the Project into a separate account. d. Commencing August 1, 2004 and annually thereafter, the Corporation is to deposit into a Rate Cap Escrow Account an amount not less than $45,000, to be used only to pay for required rate protection agreements. D27 IV. Town of Vail, Colorado ' Notes to the Financial Statements December 31, 2005 (Continued) Detailed Notes on all Funds (continued) J. Credit Facility and Reimbursement Agreement -Timber Ridge Affordable Housing ' Corporation (continued) As required by the Reimbursement Agreement and for as long as the Credit Facility is outstanding, the Corporation is required to have in effect a rate protection agreement at a fixed interest rate acceptable to U.S. Bank in an amount equal to the then-outstanding principal amount of the Credit Facility, with a floating rate payer acceptable to U.S. Bank. The Corporation's rate protection agreement is subsequently described. V. Other Information A. Pension Plans The Town offers two defined contribution pension plans to cover all permanent paid employees of the Town. The Town established these qualified money purchase pension plans under Internal Revenue Code section 401(a), and may amend all of the plan provisions. The first plan covers all full time and qualified seasonal employees other than sworn police officers and firefighters; the second plan covers all full time and qualified seasonal employees of the Town's Police and Fire departments. The plan provisions are the same for both plans. In defined contribution plans, benefits depend solely on amounts contributed to the plans plus investment earnings. Employees are eligible to participate in the plans from the date of employment or the effective date of the plans, January 1, 1983, whichever is later. The plans provide for contributions to be made by the Town of 12.6% of regular compensation for the first year of employment and 17.6% thereafter. For employees hired after April 1, 1986, the Town's contribution is 11.15% of regular compensation for the first year, and 16.15% thereafter. Employees have the option to make voluntary contributions of up to 10% of their compensation. In the event of continued long-term disability of an employee, the Town's disability insurance will continue to make contributions to the plan for the employee through age 60 at the rate on the date of disability. For employees hired before July 1, 1986, vesting of the Town's contributions is 77.5% after the first year of employment with an additional vesting of 7.5% per year through the fourth year, when vesting is 100%. For employees hired after June 30, 1986, vesting of the Town's contributions to the employees is 20% after the first year of employment with additional vesting of 20% per year through the fifth year, when vesting is 100%. If an employee dies, becomes disabled, or attains the age of 60, their entire interest in the plans becomes vested; normal retirement age is 60 with early retirement at age 50 and four years of service. In 1991, the Town established a defined contribution pension plan for seasonal employees who work for the Town longer than 6 weeks. Seasonal employees are required to contribute 6% of regular compensation to the plan and the Town contributes 1.5%. Seasonal employees are 100% vested after their first contribution. Employees covered under the regular and seasonal pension plans do not participate in the Social Security system. D28 1 1 1 1 1 1 1 1 1 1 1 1 Town of Vail, Colorado Notes to the Financial Statements. December 31, 2005 (Continued) Other Information (continued) A. Pension Plans (continued) The annual pension cost is the Town's contributions less forfeitures from the prior year. The plans' invested assets at December 31, 2005 of $33,903,192 are stated at market value. All earnings, losses, expenses and changes in the fair market value of the trust fund will be apportioned at least annually among the participants in proportion to each participant's current share of the Trust Investment Fund. The Town has no liability for unfunded future vested employee benefits. The trustees and administrators of the plans are the Retirement Board. The Retirement Board determines investment options made available to participants, in adherence with an adopted investment policy statement. The total amount of the Town's 2005 covered payroll was $12,022,814 of which $10,635,921 was for permanent employees and $1,386,893 was for seasonal staff. Total 2005 payroll for all Town employees was $13,038,981. B. Retirement Savings Plan -Deferred Compensation Plan - IRC 457 The Town offers its employees a deferred compensation plan (the "457 Plan") created in accordance with Internal Revenue Code section 457. The 457 Plan, available to all Town employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the 457 Plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are to be held in trust for the exclusive benefit of the 457 Plan participants and their beneficiaries. The modified accrual basis of accounting is used for the 457 Plan. The trustees and administrators of the 457 Plan are the Retirement Board, which comprises members of the Town's administration. The Retirement Board determines investment options made available to participants, in adherence to an adopted investment policy statement. The Town has no liability for losses under the 457 Plan but does have the duty of due care that would be required of an ordinary prudent investor. The total assets of the 457 Plan were $4,425,859 at December 31, 2005. The assets were invested in mutual funds, as previously described. Pursuant to the Town's adoption of GASB Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, the 457 Plan has been included in these financial statements as an expendable trust fund. C. Cafeteria Plan The Town offers a cafeteria compensation plan organized under section 125 of the Internal Revenue Code, which includes dependent care and health expense reimbursement. No cost to the Town is recognized as the plan is a salary reduction plan. D29 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) V Other Information (continued) D E Risk Management The Town is exposed to various risks of loss related to workers compensation, general liability, unemployment, torts, theft of, damage to, and destruction of assets, and errors and omissions. The Town carries commercial coverage for these risks and claims and does not expect claims to exceed their coverage. Commitments and Contingencies 1. Legal Claims During the normal course of business, the Town may incur claims and other assertions against it from various agencies and individuals. Management of the Town and their legal representatives feel none of these claims or assertions are significant enough that they would materially affect the fairness of the presentation of the financial statements at December 31, 2005. 2. Federal Funds Funds received from Federal grants and programs are subject to audit and disallowance on ineligible costs. Management of the Town feels any potential questioned or disallowed costs would not materially affect the fairness of the presentation of the financial statements at December 31, 2005. 3. Mold Remediation -Timber Ridge Affordable Housing Corporation Beginning in 2003, the Corporation performed remediation and other precautionary renovations to the Project to alleviate potential and identified mold problems in certain rental uits. As of December 31, 2005, a total of 158 units have been renovated. For 2005, the Corporation incurred mold remediation costs totaling $369,502 ($252,655 for 2004). Costs of further remediation and renovations will be charged to operations in future periods as the extent of such additional repairs had not been determined at December 31, 2005. F G Rate Protection Agreement -Timber Ridge Affordable Housing Corporation Effective July 15, 2003, the Corporation entered into a Rate Protection Agreement with SMBC Derivative Products Limited ("SMBC") whereby SMBC agreed to limit the Corporation's interest payable on the 2003A Bonds to 4% per annum through August 1, 2006. For its services under the Rate Protection Agreement, SMBC was paid a fee of $133,000 during the period ended December 31, 2003, which has been capitalized as bond issue costs. Related Party Transactions -Vail Local Marketing District The District has executed a Coordination Agreement with Vail Valley Chamber & Tourism Bureau ("VVCTB") under which WCTB provides marketing coordination services to the District in return for a fee equal to 7% of total lodging taxes collected by the District. The District paid VVCTB $119,822 for its services in 2005. The Coordination Agreement also requires the District to pay 1 % of total lodging taxes collected by the District to the Town, as a fee for accounting services provided by the Town. Fees totaling $17,625 were incurred by the District during 2005 for accounting services provided by the Town. D30 Town of Vail, Colorado Notes to the Financial Statements December 31, 2005 (Continued) 1 V. Other Information (continued) ' H. Conduit Debt -Town of Vail, Colorado Multifamily Housing Revenue Bonds (Middle Creek Village Apartments Project), Series 2003A, 20036 and 2003-T These bonds were issued in 2003 in an aggregate principal amount of $16,850,000 to finance construction ofmulti-family housing projects within the Town. The bonds mature in 2038. The bonds are solely payable from, and are secured by, a pledge of revenue from loan agreements between the Town and Middle Creek Village, LLC (as borrower). ' The borrower's obligation is secured by Deeds of Trust, Security Agreements, Financing Statements and assignment of rents and leases. The bonds are a special limited obligation of the Town, payable solely from the specified revenues of the projects, and do ' not constitute debt or indebtedness of the Town. D31 REQUIRED SUPPLEMENTARY INFORMATION Town of Vail, Colorado General Fund Schedule of Revenues, Expenditures Changes in Fund Balances Budget (GAAP Basis) and Actual For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 Revenues: Taxes: General sales taxes Property and ownership taxes Ski area lift ticket admissions tax Franchise tax Penalties and interest on delinquent taxes Total -Taxes Permits and Licenses: Construction fees Contractors' licenses Other permits and licenses Total -Permits and Licenses Intergovernmental: County sales tax County road and bridge Additional motor vehicle registration fees Cigarette tax Highway users tax State health inspection Other county revenues Other state sources Federal sources Total -Intergovernmental Charges for Services: Management fees -Vail Local Marketing District Internal service charge Out of district fire response Alarm monitoring fees Parking Fines and forfeitures Rents Other charges, services, and sales Total -Charges for Services Other Revenues: Interest on investments Other Total -Other Revenues Total Revenues 2005 Final Budget Variance Original Final Positive Budget Budget Actual (Negative) 8,772,600 8,796,600 8,796,600 - 2,632,920 2,637,458 2,627,877 (9,581) 2,438,000 2,585,000 2,777,698 192,698 659,500 766,500 842,529 76,029 29,000 29,000 22,014 (6,986) 14,532,020 14,814,558 15,066,718 252,160 2,536,800 2,589,300 32,000 32,000 51,650 51,050 2,620,450 2,672,350 476,200 476,200 450,000 450,000 26,600 26,600 87,000 80,000 197,397 180,000 12,400 12,400 - 18,625 20,000 55,423 55,000 64,663 1,324,597 1,363,911 2,466,051 (123,249) 33,484 1,484 52,935 1,885 2,552,470 (119,880) 532,291 56,091 437,547 (12,453) 25,020 (1,580) 74,418 (5,582) 182,654 2,654 14,685 2,285 29,797 11,172 52,999 (2,424) 51,657 (13,006) 1,401,068 37,157 15,500 15,500 17,625 2,125 442,887 525,987 545,732 19,745 15,000 61,887 64,343 2,456 59,000 55,000 52,709 (2,291) 2,905,000 2,955,000 3,651,538 696,538 202,900 200,800 215,105 14,305 748,865 768,865 780,214 11,349 205,950 274,660 256,456 (18,204) 4,595,102 4,857,699 5,583,722 726,023 2004 Actual 8,881,480 2,621,493 2,496,162 676,538 23,111 14,698,784 1,608,461 27,005 49,811 1,685,277 515,268 440,550 25,834 89,445 182,908 14,274 115,280 52,423 1,435,982 15,014 465,586 32,091 56,014 3,285,932 210,497 803,939 238,336 5,107,409 120,000 120,000 428,851 308,851 172,806 283,950 518,801 538,808 20,007 359,829 403,950 638,801 967,659 328,858 532,635 23,476,119 24,347,319 25,571,637 1,224,318 23,460,087 (continued) The accompanying notes are an integral part of these financial statements. E1 Town of Vail, Colorado General Fund Schedule of Revenues, Expenditures Changes in Fund Balances Budget (GAAP Basis) and Actual For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 (Continued) 2005 2004 Final Budget Variance Original Final Positive Budget Budget Actual (Negative) Actual Expenditures: General Government: Town officials 1,222,434 1,169,094 951,828 217,266 937,265 Administrative 2,799,535 2,848,108 2,713,779 134,329 2,482,363 Community development 1,705,551 2,273,164 1,883,625 389,539 1,645,735 Total -General Government 5,727,520 6,290,366 5,549,232 741,134 5,065,363 Public Safety: Police department 4,360,334 4,485,151 4,364,169 120,982 4,155,086 Fire department 1,831,053 1,869,855 1,945,426 (75,571) 1,730,546 Total -Public Safety 6,191,387 6,355,006 6,309,595 45,411 5,885,632 Public Works and Transportation: Highways and streets 2,962,216 3,055,312 2,956,645 98,667 2,390,515 Transportation 2,956,599 2,986,599 3,009,848 (23,249) 2,803,253 Parking operations 700,819 714,654 675,843 38,811 600,548 Facility maintenance 2,488,196 2,585,696 2,669,800 (84,104) 2,458,015 Total -Public Works and Transportation 9,107,830 9,342,261 9,312,136 30,125 8,252,331 Culture and Recreation: Contributions and special events 811,876 830,780 831,472 (692) 996,662 Special recreation facilities 203,345 218,345 192,735 25,610 178,912 Library 732,788 732,991 658,886 74,105 657,952 Total -Culture and Recreation 1,748,009 1,782,116 1,683,093 99,023 1,833,526 Total Expenditures 22,774,746 23,769,749 22,854,056 915,693 21,036,852 Excess of Revenues Over Expenditures 701,373 577,570 2,717,581 308,625 2,423,235 Other Financing Sources (Uses): Transfers out - (126,687) (126,687) - (1,773,800) Transfers in - 29,300 29,300 - 27,435 Total Other Financing Sources (Uses) - (97,387) (97,387) - (1,746,365) Net Change in Fund Balances 701,373 480,183 2,620,194 308,625 676,870 Fund Balances -January 1 9,228,248 11,053,614 11,053,614 - 10,376,744 Fund Balances -December 31 9,929,621 11,533,797 13,673,808 308,625 11,053,614 The accompanying notes are an integral part of these financial statements. E2 Town of Vail, Colorado' Special Revenue Funds ' Capit al Projects Fund Schedule of Revenues, Expenditures Changes in Fund Balances Budget (GAAP Basis) and Actual For the Year Ended December 31, 2005 With Comparative Actual Amou nts For the Year Ended December 31, 2004 2005 2004 Final Budget Variance Original Final Positive Budget Budget Actual (Negative) Actual Revenues: Taxes: Sales tax 5,848,400 7,349,400 7,994,557 645,157 6,700,095 ' Intergovernmental: County revenues 1,000,000 366,510 CDOT grants - - - - 40,322 Federal grants Total -Intergovernmental 2,130,832 3,130,832 1,757,889 1,757,889 19,500 19,500 u (1,738,389) (1,738,389) 1,412,098 1,818,930 Charges for Services: Leases -Vail Commons 150,000 150,000 188,160 38,160 189,480 ' Resale fees Total -Charges for Services - 150,000 - 150,000 14,866 203,026 14,866 53,026 12,462 201,942 Other: Interest on investments 25,000 25,000 158,636 133,636 64,475 Project reimbursements/shared costs 27,000 2,654,962 2,099,960 (555,002) 1,031,157 ' Other _205,000 224,317 19,317 278,058 Total -Other 52,000 2,884,962 2,482,913 (402,049) 1,373,690 Total Revenues 9,181,232 12,142,251 10,699,996 (1,442,255) 10,094,657 ' Expenditures: Public Works: Capital projects and acquisition 8,492,500 13,119,724 6,291,209 6,828,515 10,634,112 Excess (Deficiency) of Revenues Over Expenditures 688,732 (977,473) 4,408,787 5,386,260 (539,455) ' Other Financing Sources (Uses): Sale of assets 14,945 14,945 - Transfers in - 86,010 86,010 - 3,014,005 Transfers (out) Total Other Financing Sources (Uses) (2,422,154) (2,422,154) (2,451,454) (2,365,444) (2,451,454) (2,350,499) - 14,945 (2,337,905) 676,100 Net Change in Fund Balances (1,733,422) (3,342,917) 2,058,288 5,401,205 136,645 ' Fund Balances -January 1 6,289,891 8,190,903 8,190,903 - 8,054,258 1 Fund Balances -December 31 4,556,469 4,847,986 10,249,191 5,401,205 8,190,903 The accompanying notes are an integral part of these financial statements. E3 'Town of Vail, Colorado Special Revenue Funds Real Estate Transfer Tax Fund Schedule of Revenues, Expenditures Changes in Fund Balances Budget (GAAP Basis) and Actual . For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 2005 2004 ~ Final Budget Variance Original Final Positive Budget Budget Actual (Negative) Actual Revenues: Taxes: Real estate transfer tax 4,623,000 6,000,000 6,206,058 206,058 ' 4,850,152 Intergovernmental Revenue: Lottery revenue 20,000 20,000 21,987 1,987 21,686 Other county revenue - 12,000 12,000 - 12,000 Other state grants - 28,000 28,000 - Total -Intergovernmental Revenue 20,000 60,000 61,987 1,987 33,686 Charges for Services: Recreation amenities fee 194,600 360,000 370,157 10,157 226,745 ' Land lease to Vail Recreation District 115,956 115,956 109,462 (6,494) 107,941 Total -Charges for Services 310,556 475,956 479,619 3,663 334,686 Other: Project reimbursements - 206,266 199,769 _ (6,497) 56,600 ' Interest on investments 51,000 51,000 241,915 190,915 104,372 Other - 1,320 1,320 - 35,000 Total -Other 51,000 258,586 443,004 184,418 195,972 , Total Revenues 5,004,556 6,794,542 7,190,668 396,126 5,414,496 Expenditures: Culture and Recreation: ' Project management 312,885 381,735 386,479 (4,744) 320,478 Park maintenance 943,558 973,991 837,919 136,072 749,963 Art in public places 84,326 56,891 55,127 1,764 - , Capital projects 4,459,638 6,413,633 4,168,346 2,245,287 3,784,322 Total Expenditures 5,800,407 7,826,250 5,447,871 2,378,379 4,854,763 Excess (Deficiency) of Revenues Over Expenditures (795,851) (1,031,708) 1,742,797 2,774,505 559,733 Other Financing Sources (Uses): Transfers in - 38,197 38,197 - Transfers (out) - - - - (1,157,640) Total Other Financing Sources (Uses) - 38,197 38,197 - (1,157,640) Net Change in Fund Balances (795,851) (993,511) 1,780,994 2,774,505 (597,907) ' Fund Balances -January 1 4,589,872 5,682,551 5,682,551 - 6,280,458 Fund Balances -December 31 3,794,021 4,689,040 7,463,545 2,774,505 5,682,551 , The accompanying notes are an integral part of these financial statements. ' E4 Town of Vail, Colorado ' Special Revenue Funds Conference Center Fund Schedule of Revenues, Expenditures Changes in Fund Balances Budget (GAAP Basis) and Actual ' For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 2005 2004 Final Budget Variance Original Final Positive Budget Budget Actual (Negative) Actual ' Revenues: Taxes: Sales tax 1,707,000 1,867,249 1,975,124 107,875 1,828,234 Lodging tax 1,572,000 1,792,593 1,833,626 41,033 1,730,378 ' Penalties and interest on delinq uent taxes 14,471 14,471 8,458 Total -Taxes 3,279,000 3,659,842 3,823,221 163,379 3,567,070 Other: ' Interest on investments - 86,000 207,920 121,920 67,603 Total Revenues 3,279,000 3,745,842 4,031,141 285,299 3,634,673 Expenditures: Economic Development: Professional fees 163,950 182,992 191,161 (8,169) 178,353 General supplies - - - - 2,040 Capital outlay 707,870 1,569,240 1,293,437 275,803 789,484 ' Total Expenditures 871,820 1,752,232 1,484,598 267,634 969,877 Net Change in Fund Balances 2,407,180 1,993,610 2,546,543 552,933 2,664,796 ' Fund Balances-January 1 5,098,988 5,691,334 5,691,334 - 3,026,538 Fund Balances -December 31 7,506,168 7,684,944 8,237,877 552,933 5,691,334 The accompanying notes are an integral part of these financial statements. E5 Town of Vail, Colorado Special Revenue Funds Vail Marketing Fund Schedule of Revenues, Expenditures Changes in Fund Balances Budget (GAAP Basis) and Actual For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 Revenues: Permits and Licenses: Business licenses Other: Interest on investments Total Revenues Expenditures: Economic Development: Commission on Special Events Administration fee Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Fund Balances -January 7 Fund Balances -December 31 Original Final Budget Budget Final Budget Variance Positive Actual (Negative) 2004 Actual 308,000 308,000 302,854 (5,146) 308,198 - - 2,410 2,410 940 308,000 308,000 305,264 (2,736) 309,138 280,000 280,000 279,500 500 311,000 15,400 15,400 15,143 257 15,410 295,400 295,400 294,643 757 326,410 12,600 12,600 10,621 (1,979) (17,272) 25,902 25,590 25,590 - 42,862 38,502 38,190 36,211 (1,979) 25,590 The accompanying notes are an integral part of these financial statements. E6 1 Town of Vail, Colorado Special Revenue Funds Vail Local Marketing District Schedule of Revenues, Expenditures Changes in Fund Balances Budget (GAAP Basis) and Actual For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 2005 2004 Final Budget Variance Original Final Positive Budget Budget Actual (Negative) Actual Revenues: Tazes: Lodging tax 1,500,000 1,615,000 1,711,743 96,743 1,555,305 Other: Interest on investments - - 6,541 6,541 7,628 Miscellaneous - - - - 3,290 Total -Other - - 6,541 6,541 10,918 Total Revenues 1,500,000 1,615,000 1,718,284 103,284 1,566,223 Expenditures: Economic Development: Destination 155,500 155,500 131,347 24,153 91,160 Front Range 235,000 235,000 220,291 14,709 184,645 Groups and meetings 328,000 328,000 271,517 56,483 340,218 Marketing 414,500 414,500 358,679 55,821 - Purchased services 434,300 444,300 428,454 15,846 987,087 Repayment of debt - 100,000 100,000 - - Total Expenditures 1,567,300 1,677,300 1,510,288 167,012 1,603,110 Excess (Deficiency) of Revenues Over Expenditures (67,300) (62,300) 207,996 103,251 (36,887) Fund Balances -January 1 488,899 488,899 488,899 - 525,786 Fund Balances -December 31 421,599 426,599 696,895 103,251 488,899 The accompanying notes are an integral part of these financial statements. E7 Town of Vail, Colorado Special Revenue Funds Vail Reinvestment Authority Schedule of Revenues, Expenditures Changes in Fund Balances Budget (GAAP Basis) and Actual For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 Revenues: Other: Interest on investments. Shared costs/project reimbursements Total Revenues Expenditures: Economic Development: Administration Professional fees Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Fund Balances -January 1 Fund Balances -December 31 2005 2004 Final Budget Variance - Original Final Positive Budget Budget Actual (Negative) Actual = - 206 206 28 - 30,214 30,379 165 93,288 - 30,214 30,585 371 93,316 - 1,344 1,447 (103) 4,372 25,000 29,021 29,187 (166) 87,692 25,000 30,365 30,634 (269) 92,064 (25,000) (151) (49) 102 1,252 25,000 26,252 1,252 (25,000) - - 26,101 1,203 (24,898) 1,252 The accompanying notes are an integral part of these financial statements. E8 Town of Vail, Colorado Debt Service Fund Schedule of Revenues, Expenditures Changes in Fund Balances For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 Revenues: Other: Interest on investments Total Revenues Expenditures: Debt Service: Principal Interest Fiscal agent fees Total Expenditures (Deficiency) of Revenues Over Expenditures Other Financing Sources: Transfers in Net Change in Fund Balances Fund Balances -January 1 Fund Balances -December 31 2005 2004 Final Budget Variance Original Final Positive Budget Budget Actual (Negative) Actual - - 17,527 17,527 9,621 - - 17,527 17,527 9 621 , 1,695,000 1,695,000 1,695,000 - 1,605,000 620,299 620,299 620,299 - 689,098 2,500 2,500 1,098 1,402 1,400 2,317,799 2,317,799 2,316,397 1,402 2,295,498 (2,317,799) (2,317,799) (2,298,870) 18,929 (2,285,877) 2,422,154 2,422,154 2,422,154 - 2,337,905 104,355 104,355 123,284 18,929 52,028 171,508 182,238 182,238 - 130,210 275,863 286,593 305,522 18,929 182,238 The accompanying notes are an integral part of these financial statements. F1 Town of Vail, Colorado Enterprise Funds Timber Ridge Affordable Housing Corporation Schedule of Revenues, Expenses, Transfers and Change in Fund Net Assets Budget (GAAP Basis) and Actual For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 2005 2004 Final Budget Variance Original Final Positive Budget Budget Actual (Negative) Actual Operating Revenues: Rent 1,533,608 1,557,183 1,567,886 10,703 1,118,405 Laundry room lease 17,760 17,760 19,254 1,494 15,434 Other 3,296 3,296 14,010 10,714 16,170 Total Operating Revenues 1,554,664 1,578,239 1,601,150 22,911 1,150,009 Operating Expenses: Advertising 3,000 3,000 4,038 (1,038) 13,050 Office expenses 10,560 10,560 11,589 (1,029) 13,036 Management fee 77,733 78,912 77,595 1,317 58,675 Telecommunications 5,940 5,940 8,417 (2,477) 12,486 Wages -Administrative 76,995 76,995 81,494 (4,499) 75,187 Wages -Maintenance and other 114,173 114,173 95,715 18,458 111,550 Repairs and maintenance 30,050 30,050 36,930 (6,880) 26,452 Electric 85,026 85,026 30,137 54,889 90,493 Water and sewer 62,116 62,116 67,365 (5,249) 67,171 Trash removal 7,920 7,920 13,466 (5,546) 11,383 Snow removal 9,250 9,250 13,696 (4,446) 6,911 Fire, life, safety, and security 1,570 1,570 3,712 (2,142) 1,843 Property insurance 63,540 63,540 65,427 (1,887) 62,606 Professional fees 5,900 5,900 5,800 100 6,278 Bad debt expense - - 2,325 (2,325) 7,737 Miscellaneous 4,220 4,220 6,955 (2,735) 4,434 Mold remediation - 370,000 369,502 498 252,655 Depreciation 525,444 525,444 525,447 (3) 525,446 Total Operating Expenses 1,083,437 1,454,616 1,419,610 35,006 1,347,393 Operating Income (Loss) 471,227 123,623 181,540 57,917 (197,384) Non-operating Revenues (Expenses): Interest on investments 4,320 4,320 9,341 5,021 3,916 Interest expense reimbursement -Rate cap agreement - - 7,633 7,633 - Interestexpense (485,755) (756,164) (769,164) (13,000) (416,918) Financing fees (267,872) (267,872) (272,704) (4,832) (273,144) Amortization of bond issue costs (43,044) (43,044) (135,659) (92,615) (42,342) Total Non-operating Revenue (Expenses) (792,351) (1,062,760) (1,160,553) (97,793) (728,488) Change in Net Assets (321,124) (939,137) (979,013) (39,876) (925,872) The accompanying notes are an integral part of these financial statements. F2 Town of Vait, Colorado ' Enterprise Funds Dispatch Services Fund Schedule of Revenues, Expenses, Transfers and C hange in Fund Net Assets Budget (Non-GAAP Basis) and Actual with Reconciliation to GAAP Basis For the Year Ended December 3 1, 2005 ' With Comparative Actual Amounts For the Year E nded December 31, 2004 2005 2004 Final Budget ' Variance Original Final Positive Budget Budget Actual (Negative) Actual Operating Revenues: ' Charges and Fees: Dispatch service fee 559,034 559,034 559,034 - 463,813 Dispatching contracts 814,058 814,058 819,504 5,446 719,068 Other charges - 21,870 21,870 - - Total Operating Revenues 1,373,092 1,394,962 1,400,408 5,446 1,182,881 Operating Expenses: Public Safety: Salaries and benefits 1,326,403 1,341,869 1,349,772 (7,903) 1,290,384 Operating expenses 366,288 398,212 389,908 8,304 217,093 Capital outlay - _ _ _ 120,299 ' Total Operating Expenses 1,692,691 1,740,081 1,739,680 401 1,627,776 Operating (Loss) -Budget Basis (319,599) (345,119) (339,272) 5,847 (444,895) Non-operating Revenues: Operating grant -State 1 23,040 23,040 Operating grant - E-911 Board 345,660 345,660 345,660 - 369,000 Interest on investments - - 8,582 8,582 6,317 Total Non-operating Revenues 345,660 368,700 377,282 8,582 375,317 ' Income Before Transfers 26,061 23,581 38,010 14,429 (69,578) Transfers In - 19,500 19,500 - - ' Transfers Out (17,020) (17,020) (110,000) Change in Net Assets -Budget Basis 26,061 26,061 40,490 14,429 (179,578) ' Reconciliation to GAAP Basis: Adjustments: Contribution from Capital Projects Fund 181,486 662,804 Change in compensated absences 7,646 ' Depreciation (211,227) (156,550) Net book value of disposed assets (9,760) Capitalized assets - 120,299 Total Adjustments (22,095) 616,793 ' Change in Net Assets - GAAP Basis 18,395 437,215 The accompanying notes are an integral part of these financial statements. F3 Town of Vail, Colorado Internal Service Funds Heavy Equipment Fund Schedule of Revenues, Expenses, and Change in Fund Net Assets Budget (Non-GAAP Basis) and Actual with Reconciliation to GAAP Basis For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 2005 Operating Revenues: Charges and Fees: Operating charges Replacement charges Total -Charges and Fees Other: Insurance reimbursements Other Total -Other Total Operating Revenues Operating Expenses: Public Works: Vehicle maintenance and fuel Capital outlay Total Operating Expenses Operating Income -Budget Basis Non-operating Revenues: Interest on investments Proceeds from sale of assets Total Non-operating Revenues: Change in Net Assets -Budget Basis Reconciliation to GAAP Basis: Adjustments: Contribution from Capital Projects Fund Contribution from Real Estate Transfer Tax Fund Contribution to Fire Department Net book value of disposed assets Depreciation Change in accrued compensated absences Capitalized assets Total Adjustments Change in Net Assets - GAAP Basis Final Budget Variance Original Final Positive Budget Budget Actual (Negative) 1,651,668 1,651,668 1,643,491 (8,177) 604,578 604,578 597,417 (7,161) 2,256,246 2,256,246 2,240,908 (15,338) 37,900 37,900 54,899 16,999 - - 8,935 8,935 37,900 37,900 63,834 25,934 2,294,146 2,294,146 2,304,742 10,596 2004 Actual 1,442,977 440,173 1,883,150 18,282 100,475 118,757 2,001,907 1,668,661 1,668,661 1,683,442 (14,781) 1,536,133 494,310 594,310 557,593 36,717 341,192 2,162,971 2,262,971 2,241,035 21,936 1,877,325 131,175 31,175 63,707 32,532 124, 582 5,300 5,300 21,286 15,986 7,452 101,860 101,860 93,612 (8,248) 41,925 107,160 107,160 114,898 7,738 49,377 238,335 138,335 178,605 40,270 173,959 - 258,515 21,805 - - (33,328) (23,950) (68,734) (561,740) (610,773) (4,060) - 551,899 341,192 (16,046) (113,128) 162,559 60,831 The accompanying notes are an integral part of these financial statements. F4 Town of Vail, Colorado Internal Service Funds Health Insurance Fund Schedule of Revenues, Expenses, and Change in Fu nd Net Assets Budget (GAAP Basis) and Actual For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended D ecember 31, 2004 2005 2004 Final Budget ' Variance Original Final Positive Budget Budget Actual (Negative) Actual Operating Revenues: ' Charges and Fees: Insurance premiums 1,794,500 1,883,500 1,859,046 (24,454) 1,661,804 Insurance premiums -Employee contributions 278,000 245,000 243,675 (1,325) 256,479 Insurer proceeds - 14,000 16,108 2,108 68,958 ' Total Operating Revenues 2,072,500 2,142,500 2,118,829 (23,671) 1,987,241 Operating Expenses: General Government: Health claims 1,782,500 1,820,000 1,806,867 13,133 1,551,632 Premiums 248,000 244,000 255,276 (11,276) 242,510 Administrative fees 27,000 31,000 26,750 4,250 22,857 Short-term disability payments 25,000 61,500 57,144 4,356 91,140 Total Operating Expenses 2,082,500 2,156,500 2,146,037 10,463 1,908,139 Operating Income (Loss) (10,000) (14,000) (27,208) (13,208) 79,102 Non-operating Revenues: ' Interest on investments 10,000 14,000 25,745 11,745 12,844 Change in Net Assets - GAAP Basis - - (1,463) (1,463) 91,946 The accompanying notes are an integral part of these financial statements. F5 Town of Vail, Colorado Internal Service Funds Combining Schedule of Net Assets December 31, 2005 Assets: Current Assets: Equity in pooled cash and investments Accounts receivable, net of allowance for uncollectibles Inventory Prepaid expenses Total Current Assets Non-current Assets: Property, plant, and equipment, net of accumulated depreciation Total Assets Liabilities: Current Liabilities: Accounts payable Accrued salaries and wages Current portion of compensated absences Total Current Liabilities Non-current Liabilities: Compensated absences, net of current portion Total Liabilities Net Assets: Invested in capital assets, net of related debt Unrestricted Total Net Assets Heavy Health Equipment Insurance Fund Fund Total 787,408 1,192,935 1,980,343 72,387 1,895 74,282 275,933 - 275,933 - 26,418 26,418 1,135,728 1,221,248 2,356,976 3,208,138 - 3,208,138 4,343,866 1,221,248 5,565,114 121,024 314,950 435,974 13,428 443 13,871 20,379 - 20,379 154,831 315,393 470,224 30,569 - 30,569 185,400 315,393 500,793 3,208,138 - 3,208,138 950,328 905,855 1,856,183 4,158,466 905,855 5,064,321 The accompanying notes are an integral part of_these financial statements. F6 Town of Vail, Colorado Internal Service Funds Combining Schedule of Revenues, Expenses and Changes in Fund Net Assets For the Year Ended December 31, 2005 Operating Revenues: Charges for services -Internal Charges for services -External Insurance reimbursements Other Total Operating Revenues Operating Expenses: Operations Health claims and premiums Depreciation Total Operating Expenses Operating Income (Loss) Non-operating Revenues (Expenses): Gain (loss) on disposal of assets Investment income Total Non-operating Revenues (Expenses) Income (Loss) Before Transfers and Capital Contributions Capital Contributions, Net Change in Net Assets Net Assets -January 1 Net Assets -December 31 Heavy Health Equipment Insurance Fund Fund Total 2,240,908 1,859,046 4,099,954 - 243,675 243,675 54,899 16,108 71,007 8,935 - 8,935 2,304,742 2,118,829 4,423,571 1,693,196 - 1,693,196 - 2,146,037 2,146,037 561,740 - 561,740 2,254,936 2,146,037 4,400,973 49,806 (27,208) 22,598 69,662 - 69,662 21,286 25,745 47,031 90,948 25,745 116,693 140,754 (1,463) 139,291 21,805 - 21,805 162,559 (1,463) 161,096 3,995,907 907,318 4,903,225 4,158,466 905,855 5,064,321 The accompanying notes are an integral part of these financial statements. F7 Town of Vail, Colorado Internal Service Funds Combining Schedule of Cash Flows For the Year Ended December 31, 2005 Cash Flows From Operating Activities: Cash received from other funds Other cash receipts Cash paid for goods and services Cash paid to employees Net Cash Provided by Operating Activities Cash Flows From Capital and Related Financing Activities: Cash received from sale of fixed assets Acquisition and construction of capital assets for other funds Acquisition and construction of capital assets Net Cash (Used) by Capital and Related Financing Activities Cash Flows From Investing Activities: Interest on investments Net Cash Provided by Investing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents -Beginning Cash and Cash Equivalents -Ending Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities: Operating income (loss) Adjustments: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in inventory (Increase) decrease in prepaid expenses Increase (decrease) in accounts payable Increase (decrease) in accrued wages and benefits Total Adjustments Net Cash Provided by Operating Activities Heavy Health Equipment Insurance 2,270,792 1,859,046 4,129,838 63,833 258,302 322,135 (1,131,555) (2,024,853) (3,156,408) (545,207) (43,108) (588,315) 657,863 49,387 707,250 69,662 - 69,662 (527,949) - (527,949) (458,287) - (458,287) 21,286 25,745 47,031 21,286 25;745 47,031 220,862 75,132 295,994 566,546 1,117,803 1,684,349 787,408 1,192,935 1,980,343 49,806 (27,208) 22,598 561,740 (1,481) 560;259 29,883 - 29,883 (51,688) - (51,688) - (4,450) (4,450) 61,442 84,597 146,039 6,680 (2,071) 4,609 608,057 76,595 684,652 657,863 49,387 707,250 Schedule of Non-cash Investing, Capital and Financing Activities: Assets donated by Capital Projects Fund 21,805 - 21,805 The accompanying notes are an integral part of these financial statements. F8 Town of Vail, Colorado ' Special Revenue Funds Capital Projects Fund Schedule of Project Expenditures -Budget (GAAP Basis) and Actual For th e Year Ended December 31, 2005 ' With Comparative Actual Amounts For the Year Ended December 31, 2004 2005 2004 Variance Project Final Positive Number Project Name Budget Actual (Negative) Actual CB1010 Fire infrastructure improvements 270,635 403 270,232 56,730 C61021 Donovan Park Pavilion 42,000 12,366 29,634 46,978 CB1022 Dobson Ice Arena 10,000 2,100 7,900 163,880 C61023 Gymnastics facility 88,000 57,992 30,008 1,451,816 CB1025 Town Manager's residence - - - 56,786 ' C61026 Town Manager's office remodel 8,309 CEP004 Replace buses 2,430,700 31,758 2,398,942 2,295,622 CEP005 Software/hardware purchases 163,387 161,521 1,866 205,872 CEP011 Document imaging 20,000 15,755 4,245 20,437 ' CEP016 GPS system for buses 269,280 31,169 238,111 30,720 CEP018 Web page development 50,000 47,914 2,086 - CEP019 CAD/RMS dispatch project. 240,310 234,633 5,677 662,804 CEP021 Police vehicles purchase 274,272 CEP022 Video security forjail 10,628 CEP023 Video cameras patrol cars 45,000 - 45,000 - CEP024 Fire operations vehicles - - _ 108,555 ' CEP025 Fire operations breathing apparatus 25,000 24,470 530 24,772 CEP026 Mobile hardware/laptop 65,808 CEP029 Police color copier 10,310 10,489 (179) - CEP030 Vehicle expansion 40,300 7,371 32,929 - CHP001 Buy-down program 200,000 10,000 190,000 CMT003 Bus shelter replacement program 38,000 15,494 22,506 10,532 CMT004 Capital street maintenance 1,584,565 1,290,398 294,167 620,054 CMT005 Facility capital 331,500 286,612 44,888 482,542 CMT007 Parking structure maintenance 508,740 472,865 35,875 520,000 COT002 Street light improvement program 50,000 33,123 16,877 62,804 COT003 Drainage improvements 75,000 11,128 63,872 75,000 COT004 Fiber-optic connection 75,000 72,823 2,177 21,650 COT009 Lionshead improvements 313,955 115,367 198,588 90,658 COT011 I-70 noise mitigation 526,000 115,491 410,509 58,340 COT013 Revise TOV master plans 10,000 1,060 8,940 - COT014 West Vail area plan 70,000 35,658 34,342 COT015 Strategic planning 20,000 20,809 (809) CSC010 Way-finding improvements 49,984 - 49,984 6,289 CSC011 West Meadow Drive 424,360 192,268 232,092 55,256 ' CSC012 Village Streetscape 4,411,208 2,953,677 1,457,531 3,146,998 FED021 Byrne grant -Live scan 26,490 26,495 (5) - Loan advance -Vail Local Marketing District 700,000 - 700,000 - Total 13,119,724 .6,291,209 6,828,515 10,634,112 The accompanying notes are an integral part of these financial statements. F9 Town of Vail, Colorado Special Revenue Funds Real Estate Transfer Tax Fund Schedule of Project Expenditures -Budget (GAAP Basis) and Actual For the Year Ended December 31, 2005 With Comparative Actual Amounts For the Year Ended December 31, 2004 2005 2004 Project Final Number Project Name Budget RFP005 Alpine Gardens contribution RGT001 GOCO Grant -Alpine Gardens RMT001 Recreation path maintenance RMT002 Tree maintenance RMT005 Street furniture - Streetscape RMT006 Black Gore Creek sand mitigation RMT007 Bear-proof trash containers RMT009 Park capital maintenance RMT010 Stream tract mitigation RPA001 Property acquisition RPD005 Donovan Park -Lower Bench RPD006 Whitewater Park RPD010 Vail Memorial Park RPD011 Skate park RPI002 Bighorn improvements RP1003 Irrigation control RPI007 Pirate Ship Park RPT007 Trailhead signs/development RPT008 North Frontage Road RPT014 Cascade bike path RRT001 Public art RRT003 ADA compliance RSS001 Village streetscape RSS002 Meadow Drive RSS003 Seibert Circle Total 94,000 28,000 169,933 137,000 37,030 100,000 19,500 114,500 35,000 500,000 49,734 100,000 225,000 228,097 36,888 36,555 57,256 514,966 196,174 50,000 2,525,000 25,000 1,134,000 6,413,633 Actual 94,000 28,000 67,609 97,349 6,539 100,000 112,830 119 6,553 640 6,003 540 47,900 32,164 66, 716 331,017 19,474 69,626 2,525,000 7,973 548,294 4,168,346 Variance Positive (Negative) 102, 324 39,651 30,491 19,500 1, 670 34,881 493,447 49,094 100,000 218,997 227,557 (11,012) 4,391 (9,460) 183,949 176,700 (19,626) 17,027 585, 706 2,245,287 --- -- 75,000 62,178 28,410 12,969 150,000 3,266 41,683 2,250 1,042 298,782 3,443 592,744 62,555 2,450,000 3,784,322 The accompanying notes are an integral part of these financial statements. F10 ^ The Dub1iC ieoort burden for this information collection is eatimate~l to avers oe 7Rf1 hnnrc annually Financial Planning 02/01 n.,~.., to zcn ncn ~~ ~ City or County: Vail LOCAL HIGHWAY FINANCE REPORT YEAR ENDING December 2005 This Information From The Records Of Town of Vail: Prepared By: Kathleen Halloran Phone: 479-2116 ' I. DISPOSITION OF HIGHWAY-USER REVENUES AVAILABLE FOR LOCAL GOVERNMENT EXPENDITURE oca ocal .Receipts rom ece~pts rom ITEM Motor-Fuel Motor-Vehicle State Highway- Federal Highway Taxes Taxes User Taxes Administration 1. Total recei is available 2. Minus amount used for collection ex enses 3. Minus amount used for nonhi hwa u oses 4. Minus amount used for mass transit emam er use or lg way purposes II. RECEIPTS FOR ROAD AND STREET PURPOSES III. DISBURSEMENTS FOR ROAD AND STREET PURPOSES ITEM AMOUNT ITEM AMOUNT A. Recei is from local sources: A. Local hi hwa disbursements: ' 1. Local hi hwa -user taxes 1. Ca ital outla from a e 2 7,001,357 a. Motor Fuel from Item I.A.S. 2. Maintenance: 1,097,186 b. Motor Vehicle from Item I.B.S. 3. Road and street services: c. Total a.+ b.. a. Traffic control o erations 236,957 ' 2. General fund a ro riations 7,974,276 b. Snow and ice removal 919,459 3. Other local im osts from a e 2 595,795 c. Other 4. Miscellaneous local recei is from a e 2 0 d. Total a. throw h c. 1,156,417 S. Transfers from toll facilities 4. General administration & miscellaneous 231,970 ' 6. Proceeds of sale of bonds and notes: ~ 5. Hi hwa law enforcement and safe 906,905 a. Bonds - Ori nal Issues 6. Total 1 throw h 5 10,393,834 b. Bonds -Refundin Issues B. Debt service on local obli ations: c. Notes 1. Bonds: ' d. Total a. + b. + c. 0 a. Interest 7. Total 1 throw h 6 8,570,071 b. Redem tion B. Private Contributions 1,616,089 c. Total a. + b. 0 ' C. Receipts from State government 2. Notes: from a e 2 207,674 a. Interest D. Receipts from Federal Government b. Redem tion from a e 2 0 c. Total a. + b. 0 ' ota receipts + + + ota .c + .c C. Pa ments to State for hi hways D. Pa menu to toll facilities ota ~s ursements + + + IV. LOCAL HIGHWAY DEBT STATUS (Show all entries at ar) O enin Debt Amount Issued Redem tions Closin Debt ' A. Bonds Total 0 1. Bonds Refundin Portion otes ota t V, LOCAL ROAD AND STREET FUND BALANCE A. Be 'nnin Balance B. Total Recei is .Total Disbursemen D. Endin Balance E. Reconciliation 10,393,834 10,393,834 0 Notes and Comments: Til1TJM FA\x/A C2L /U ,. i nc~ l ilL.ivlV UJ liL111V1VJ Vi3JVLL',1tS (Next Yage) F11 R&B2oo5 STATE: Colorado LOCAL HIGHWAY FINANCE REPORT YEAR ENDING (mtn/yy): December 2005 II. RECEIPTS FOR ROAD AND STREET PURPOSES -DETAIL ITEM AMOUNT ITEM AMOUNT A.3. Other local im osts: A.4. Miscellaneous local recei ts: a. Pro e Taxes and Assessments a. Interest on investments b. Other local im osts: b. Traffic Fines & Penalties 1. Sales Taxes c. Parkin Gara e Fees 2. Infrastructure & Im act Fees d. Parkin Meter Fees 3. Liens e. Sale of S lus Pro e 4. Licenses f. Char es for Services 5. S ecific Ownershi &/or Other 595,795 .Other Misc. Recei is 6. Total 1. throu h 5. 595,795 h. Other c. Total a. + b. 595,795 i. Total a. throu h h. 0 (Carry forward to page 1) (Carry forward to page 1) ITEM AMOUNT ITEM C. Recei is from State Government D. Recei is from Federal Government AMOUNT 1. Hi hwa -user taxes 182,654 1. FHWA from Item I.D.S. 2. State eneral funds 2. Other Federal a encies: 3. Other State funds: a. Forest Service a. State bond roceeds b. FEMA b. Pro'ect Match c. HUD c. Motor Vehicle Re istrations 25,020 d. Federal Transit Admin d. Other S eci e. U.S. Co s of En ' eers e. Other S eci f. Other Federal f. Total a. throu h e. 25,020 .Total a. throu h £ 0 4. Total 1. + 2. + 3. 207,674 3. Total 1. + 2. III. DISBURSEMENTS FOR ROAD AND STREET PURPOSES -DETAIL (Carry forward to page 1) .1. Ca ital outla a. Ri ht-Of-Wa Costs ON NATIONAL HIGHWAY SYSTEM a) OFF NATIONAL HIGHWAY SYSTEM b TOTAL c 0 b. En ineerin Costs c. Construction: 1 . New Facilities 465,420 465,420 0 2 . Ca aci Im rovements 0 3 . S stem Preservation 6,535,937 6,535,937 4 . S stem Enhancement & O eration 0 5 . Total Construction 1 + 2 + 3 + 4 0 6,535,937 6,535,937 d. Total Ca ital Outla Lines l.a. + l.b. + 1.c.5 0 7,001,357 7,001,357 (Carry forward to page 1) otes an omments: N'URM FHWA-536 (Rey.l-OS) PREVIOUS EDITIONS OBSOLETE F12 UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE Town of Vail, Colorado Issuer's Annual Report Update of Official Statement Tables to be Updated Tables I, III, and IV December 31, 2005 Pledged Revenues Maximum Annual Debt Service Coverage Factor TABLET Debt Service Coverage 2001 2002 15,411,044 15,106,801 2,324,453 2,324,457 6.63x 6.50x 2003 2004 2005 14,578,983 2,324,457 6.28x TABLE III History of Town 4% Sales Tax Receipts 2001 2002 2003 Sales Tax Collections (see Note below) Per Cent Increase 15,411,044 n/a 15,106,801 -1.97% 14,578,983 -3.49% 15, 466, 981 16, 483, 979 2,324,457 2,324,457 6.65x 7.09x 2004 2005 15, 466, 979 16, 483, 979 6.09% 6.58% Note: The reported Sales Tax Collections vary from the sales tax revenues reported in the Town's audited financial statements because one-time payments of sales tax on, for example, the sale of business assets or the settlement of a sales tax claim, are not included above. TABLE IV Monthly Comparison of Collections of Sales Tax 12-month Period Ended 12-month Period Ended December 31, 2004 December 31, 2005 Percent Change Current Year Current Year Current Year Month Month To Date Month To Date Month To Date January 2,225,841 2,225,841 2,275,967 2,275,967 2.3% 2.3% February 2,362,825 4,588,666 2,429,377 4,705,344 2.8% 2.5% March 2,344,178 6,932,844 2,785,101 7,490,445 18.8% 8.0% April 992,157 7,925,001 915,554 8,405,999 -7.7% 6.1% May 411,595 8,336,596 458,770 8,864,769 11.5% 6.3% June 732,113 9,068,709 834,913 9,699,682 14.0% 7.0% July 1,128,514 10,197,223 1,166,183 10,865,865 3.3% 6.6% August 994,445 11,191,668 993,985 11,859,850 0.0% 6.0% September 757,033 11,948,701 795,807 12,655,657 5.1% 5.9% October 532,537 12,481,238 566,173 13,221,830 6.3% 5.9% November 623.,646 13,104,884 713,117 13,934,947 14.3% 6.3% December 2,362,095 15,466,979 2,549,032 16,483,979 7.9% 6.6% G1 Town of Vail, Colorado Issuer's Annual Report Update of Official Statement Tables to be Updated Tables V and VI December 31, 2005 TABLE V Sales Tax Collections by Principal Sales Tax Generators 2001 2002 2003 2004 2005 Annual Sales Tax Paid by Ten Principal Generators 4,958,904 4,944,937 4,828,717 4,996,562 5,401,230 Total Annual Sales Tax Collected by Town 15,411,044 15,106,801 14,578,983 15,466,979 16,483,979 of Total Annual Sales Tax Collections Generated by Ten Principal Generators 32.2% 32.7% 33.1% 32.3% 32.8% TABLE VI Capital Projects Fund: 2005 Actual /Projected 2006 - 2009 Revenues: Sales tax Federal grants Lease revenue Project reimbursement Intergovernmental grants Transfers in Earnings on investments and other Total Revenues Expenditures: Equipment purchases Maintenance Buildings and improvements Streetscape projects Housing programs Lionshead redevelopment Other improvements Transfer to Debt Service Fund Total Expenditures Revenues Over (Under) Expenditures Beginning Fund Balance Ending Fund Balance (Deficit) 7,994,557 6,230,440 6,671,880 7,271,346 7,591,198 19,500 2,191,832 - 4,900,000 510,000 ' 188,160 190,000 150,000 150,000 150,000 2,099,960 27,000 27,000 - - - 500,000 - - - 86,010 - - - , - 412,764 19,000 16,000 11,000 17,000 10,800,951 9,158,272 6,864,880 12,332,346 8,268,198 565,080 3,382,548 677,000 5,014,700 924,400 .2,065,369 2,472,257 1,756,730 2,128,660 2,318,690 72,861 884,782 2,015,000 990,000 15,000 3,145,945 4,868,889 1,975,000 2,620,000 2,600,000 10,000 1,215,000 100,000 100,000 100,000 115,491 200,695 - 3,750,000 - 316,463 827,368 300,000 300,000 ' 300,000 2,451,454 2,236,200 379,710 1,593,164 2,636,641 8,742,663 16,087,739 7,203,440 16,496,524 8,894,731 2,058,288 (6,929,467) (338,560) (4,164,178) (626,533) 8,190,903 10,249,191 3,319,724 2,981,164 (1,183,014) , 10,249,191 3,319,724 2,981,164 (1.,183,014) (1,809,547) G2 Town of Vail, Colorado Issuer's Annual Report Update of Official Statement Tables to be Updated Table XIX ' December 31, 2005 TABLE XIX History of General Fund Revenues, Expenditures and C hanges in Fund Balance ' 2001 2002 2003 2004 2005 Revenues: ' General sales taxes 8,968,544 10,337,852 8,840,731 8,881,480 8,796,600 Property and ownership taxes 2,606,648 2,799,910 2,822,742 2,621,493 2,627,877 Ski area lift ticket admissions tax 2,145,587 2,344,921 2,273,055 2,496,162 2,777,698 Franchise fees 628,427 580,372 592,876 676,538 842,529 ' Penalties and interest on delinquent taxes 56,610 37,315 27,635 23,111 22,014 Licenses and permits 863,943 932,773 1,095,698 1,685,277 2,552,470 Intergovernmental revenues 1,388,625 1,349,364 1,518,855 1,435,982 1,401,068 ' Charges for services 2,729,847 3,162,454 3,561,050 4,092,973 4,588,403 Fines and forteits 273,723 226,543 201,458 210,497 215,105 Interest 273,496 165,088 113,270 172,806 428,851 Rents 552,513 507,211 616,411 803,939 780,214 ' Other 438,857 280,277 234,879 359,829 538,808 Total Revenues 20,926,820 22,724,080 21,898,660 23,460,087 25,571,637 Expenditures: General government 4,348,205 Public safety 5,079,931 Public works and transportation 7,529,418 Economic development and community assistance 1,357,543 Municipal library 729,646 Total Expenditures 19,044,743 Excess of Revenues 4,586,115 4,866,266 5,065,363 5,415,008 5,466,728 5,885,632 7,756,877 7,935,640 8,252,331 1,518,403 1,261,858 1,175,574 953,019 777,318 657,952 20,229,422 20,307,810 21,036,852 5,549,232 6,309,595 9,312,136 1,024,207 658,886 22,854,056 ~ Over Expenditures 1,882,077 2,494,658 1,590,850 2,423,235 2,717,581 Other Financing Sources (Uses): Sale of asset 1,850 Operating transfers in _ _ 27,435 29,300 Operating transfers out (317,000) - - (1,773,800) (126,687) Total Other Financing Sources (Uses) (317,000) - 1,850 (1,746,365) (97,387) Excess of Revenues and Other Financing Sources Over Expenditures and Other Financing (Uses) 1,565,077 2,494,658 1,592,700 676,870 2,620,194 Fund Balance: Beginning 4,724,309 6,289,386 8,784,044 10,376,744 11,053 614 ' Ending 6,289,386 8,784,044 10,376,744 11,053,614 , 13,673,808 G3 Town of Vail, Colorado Issuer's Annual Report Update of Official Statement Tables to be Updated Tables XX and XXI December 31, 2005 TABLE XX General Fund 2005 Budget Summary and Actual Comparison / 2006 Budget 2005 Amended 2005 2006 Budget Actual Budget Revenues: General sales taxes 8,796,600 8,796,600 9,345,660 Property and ownership taxes 2,666,458 2,649,891 2,914,000 Resort fees 2,585,000 2,777,698 2,620,000 Franchise fees 766,500 842,529 790,000 Licenses and permits 2,672,350 2,552,470 1,936,575 Intergovernmental revenues 1,363,911 1,401,068 1,268,684 Charges for services 3,888,034 4,588,403 4,151,832 Fines and forfeits 200,800 215,105 195,000 Interest 120,000 428,851 150,000 Rents and other 1,287,666 1,319,022 1,056,463 Total 24,347,319 25,571,637 24,428,214 Expenditures: Town officials Administrative Community development Public safety -Police Public safety -Fire Public works Public transportation Parking Facility maintenance Public library Dispatch service charges Total Revenue Over (Under) Expenditures Other Financing Sources (Uses): Transfer in Transfer (out) Total Other Financing (Uses) Excess of Revenues Over (Under) Expenditures and Other Financing (Uses) Fund Balance -January 1 Fund Balance -December 31 1,169,094 951,828 1,199,971 2,848,108 2,713,779 2,967,035 2,273,164 1,883,625 2,061,200 4,485,151 4,364,169 4,164,957 1,869,855 1,945,426 1,994,666 3,055,312 2,956,645 3,044,109 2,986,599 3,009,848 3,189,564 714,654 675,843 746,187 2,585,696 2,669,800 2,861,858 732,991 658,886 765,276 - - 525,994 22,720,624 21,829,849 23,520,817 577,570 2,717,581 (264,656) 29,300 29,300 - (126,687) (126,687) - (97,387) (97,387) - 480,183 2,620,194 (264,656) 11,053,614 11,053,614 11,533,797 11,533,797 13,673,808 11,269,141 TABLE XXI Outstanding Revenue Obligations Issue Tax-Exempt Sales Tax Revenue Refunding Bonds, Series 1998A Taxable Sales Tax Revenue Refunding Bonds, Series 19986 Sales Tax Revenue Refunding Bonds, Series 2002B Housing Facilities Revenue Bonds, Series 2003A Housing Facilities Revenue Bonds Subordinate, Series 20036 Total Outstanding Principal 8, 760, 000 735,000 4,335,000 19,025,000 1,325,000 34,180, 000 G4 MCMAHAN AND ASSOCIATES, L.L.C. Certified Public Accountants and Consultants Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation And A Component Unit of The Town of Vail, Colorado) Financial Statements December 31, 2005 and 2004 Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) December 31, 2005 and 2004 TABLE OF CONTENTS INDEPENDENT AUDITOR'S REPORT Statement of Financial Position Statement of Activities Statement of Cash Flows Notes to the Financial Statements Page 1 2 3 4 5-18 IuICMAHAN AND ASSOCIATES, L.L.C. ' Certified Public Accountants and Consultants WEB SITE: WWW.MCMAHANCPA.COM SUITE 222/AVON CENTER TELEPHONE: (970) B4S'8800 I OO WEST BEAVER CREEK BLVD. FACSIMILE: (970) B4S-O8S I ' P.O. BOX 5850 AvoN, CO $ 1620 E-MAIL: MCMAHAN@MCMAHANCPA.COM ' INDEPENDENT AUDITOR'S REPORT ' To the Board of Directors Timber Ridge Affordable Housing Corporation Vail, Colorado We have audited the accompanying statement of financial position of Timber Ridge Affordable Housing ' Corporation (the "Corporation"), a Colorado non-profit corporation and a component unit of the Town of Vail, Colorado, as of December 31, 2005 and 2004 and the related statements of activities, and cash flows for the years then ended. These financial statements are the responsibility of the management of the Corporation. Our responsibility is to express an opinion on these financial statements based on our ' audit. We conducted our audit in accordance with U.S. generally accepted auditing standards. Those standards ' require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the ' overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. ' In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Timber Ridge Affordable Housing Corporation as of December 31, 2005 and 2004, and the changes in its net assets and its cash flows for the periods then ended, in conformity with U.S. generally accepted accounting principles. ' The accompanying financial statements have been prepared assuming that Timber Ridge Affordable Housing Corporation will continue as a going concern. As discussed in Note 15. to the financial statements, the Corporation has experienced limitations of rental revenues and increased costs ' associated with the identification and remediation of potential and identified mold problems within rental units. Moreover, the Corporation faces rising debt service costs as a result of increases in the bases underlying the weekly interest rates payable on certain bonds. Because operations of the Corporation could be substantially impeded as a result of this limitation of revenues and ongoing, substantial debt service requirements, these factors raise substantial doubt about the Corporation's ability to continue as a going concern. The Board of Directors of the Corporation has developed plans to address these concerns, which are also described in Note 15. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. ' McMahan and Associates, L.L.C. May 15, 2006 ' Performing services throughout Colorado D. Jerry McMahan, C.P.A. Daniel R. Cudahy, C.P.A. Paul J. Backes, C.P.A. Michael N. Jenkins, C.A., C.P.A. Members: l~merican Institute o~ Certi~ied Public l~ccountants/Colorado society o~ Certi~ied Public l~ccountants ' Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) ' Statement of Financial Position December 31, 2005 and 2004 2005 2004 ' Assets: Current Assets: Cash and cash equivalents -Unrestricted 161,346 14,802 Accounts receivable -Tenants, net 6,400 3,345 Prepaid expenses 15,519 5,380 Total -Current Assets 183,265 23,527 ' Restricted Assets: Cash and cash equivalents -Restricted 533,890 349,612 ' Total -Restricted Assets 533,890 349,612 Bond issue costs, net of accumulated amortization 628,171 763,830 ' Fixed assets, net of accumulated depreciation 18,716,675 19,242,122 Total Assets 20,062,001 20,379,091 Liabilities and Net Assets: Liabilities: Current Liabilities: Accounts payable 42,613 114,740 Deferred revenues 151,514 32,159 ' Accrued interest payable on long-term debt 114,890 69,442 Tenant security deposits 17,550 18,303 Current portion of long-term debt - 140,000 130,000 ' Total -Current Liabilities 466,567 364,644 Long-term debt, net of current portion 21,910,000 21,350,000 Total Liabilities 22,376,567 21,714,644 ' Net Assets (Deficit) -Unrestricted (2,314,566) (1,335,553) Total Liabilities and Net Assets 20,062,001 20,379,091 The accompanying notes are an integral part of these financial statements. 2 Timber Ridge Affordable Housing Corporation ' (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail , Colorado) Statement of Activities For the Year Ended December 31 1 , 2005 (With Comparative Amounts for the Year Ended December 31, 2004) 2005 2004 ' Revenues: Rent 1,567,886 1,118,405 Laundry room lease 19,254 15,434 Other 14,010 16,170 Total Revenues 1,601,150 1,150,009 ' Expenses: Advertising 4,038 13,050 Office expenses 11,589 13,036 Management fee 77,595 58,675 Telecommunications 8,417 12,486 Wages -Administrative 81,494 75,187 ' Wages -Maintenance and other 95,715 111,550 Repairs and maintenance 36,930 26,452 Electric 30,137 90,493 Water and sewer 67,365 67,171 Trash removal 13,466 11,383 Snow removal 13,696 6,911 ' Fire, life, safety, and security 3,712 1,843 Property insurance 65,427 62,606 Audit and legal 5,800 6,278 Bad debts 2,325 7,737 ' Miscellaneous 6,955 4,434 Mold remediation 369,502 252,655 Depreciation 525,447 525,446 Total Operating Expenses 1,419,610 1,347,393 Income (Loss) from Operations 181,540 (197,384) Other Income (Expenses): Interest income 9,341 3,916 Interest expense reimbursement -Rate cap agreement 7,633 Interest expense (769,164) (416,918) Financing fees (272,704) (273,144) ' Amortization of bond issue costs (135,659) (42,342) Change in Net Assets (979,013) (925,872) Net Assets (Deficit) -Unrestricted -Beginning (1,335,553) (409,681) ' Net Assets (Deficit) -Unrestricted -Ending (2,314,566) (1,335,553) The accompanying notes are an integral part of these financial statements. 3 ' Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Statement of Cash Flows For the Year Ended December 31, 2005 (With Comparative Amounts for the Year Ended December 31, 2004) ' Cash Flows from Operations: Cash received from tenants for rent Cash received from (refunded to) tenants for security deposits, net Other cash receipts Cash paid for goods and services Net Cash Provided by Operating Activities ' Cash Flows from Financing Activities: Cash received on issuance of bonds and notes Principal repaid on bonds and notes Cash drawn on line of credit Repayment of amounts drawn on line of credit Financing fees paid ' Interest paid Net Cash (Used) by Financing Activities Cash Flows from Investing Activities: ' Interest received Net Cash Provided by Investing Activities ' Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents -Beginning Cash and Cash Equivalents -Ending Cash and Cash Equivalents -Ending is comprised of: ' Cash and cash equivalents -Unrestricted Cash and cash equivalents -Restricted Total -Cash and Cash Equivalents Reconciliation of Income (Loss) from Operations to Net Cash Provided by Operating Activities: Income (loss) from operations Adjustments to reconcile: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in prepaid expenses Increase (decrease) in accounts payable Increase (decrease) in other liabilities Total Adjustments Net Cash Provided by Operating Activities 2005 2004 1,692,108 (752) 25,259 (915,248) 801,367 700,000 (130,000) 630,246 (630,246) (333,803) (716,083) (479,886) 1,154,929 (6,722) 27,635 _(877,018) 298,824 (115,000) 285,893 (285,893) (273,144) (384,768) (772,912) 9, 341 3,916 9,341 3,916 330,822 (470,172) 364,414 834,586 695,236 161,346 533,890 695,236 364,414 14,802 349,612 364,414 181,540 (197,384) 525,447 ~ 525,446 (3,055) 17,613 (135) 230 (21,032) (55,301) 118,602 8,220 619,827 496,208 -801,367 298,824 The accompanying notes are an integral part of these financial statements. 4 ~ , ~ ,. 1 1 1 1 limber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements December 31, 2005 and 2004 Organization Timber Ridge Affordable Housing Corporation ("Corporation") was incorporated on July 9, 2003 as a Colorado non-profit corporation to provide affordable housing for persons employed in the Town of Vail (the "Town") or Eagle County, Colorado. The Corporation owns and operates, exclusively on behalf of and for the benefit of the Town, a 198-unit rental housing project (the "Project") located in the Town. The Corporation began operations in 2003. The formation of the Corporation was approved by the Town, and its operations are governed by a Board of Directors (the "Board") comprised, as of March 2005, of members of the Town's management team. Previously, the Board was comprised solely of members of the Town Council. Upon dissolution of the Corporation and retirement of all liabilities, all property of the Corporation is to be transferred to the Town. The acquisition of the Project was financed through the issuance of revenue bonds and a note payable to the Town. While the Town is not legally , obligated to pay the indebtedness of the Corporation, the Town has agreed to consider providing funds, if needed, to the Corporation to make the scheduled debt service payments of the Corporation. The Town has a right to obtain title to the Project at any time by defeasing all outstanding bonds of the Corporation. The Corporation is considered to be a component unit of the Town, and its financial position, activities and cash flow are included in the Town's separate 2005 and 2004 financial statements. Summary of Significant Accounting Policies A. L C. D. Reporting Entity The Corporation was formed under the laws of the State of Colorado and operates under an elected Board of Directors (the "Board"). As required by generally accepted accounting principles, the financial statements of the reporting entity include those of Corporation. No additional separate governmental units, agencies, or non-profit corporations are included in the financial statements of the Corporation since none were discovered to fall within the oversight responsibility based upon the application of the following criteria: financial accountability, appointment of a voting majority of the organization's governing body, ability to impose its will on the organization, a potential for the organization to provide specific financial benefits or burdens, and fiscal dependency. The Corporation does not exercise oversight responsibility over any other entity. However, the Corporation is a component unit of the Town. Basis of Accounting The Corporation utilizes the accrual basis of accounting, whereby revenues are recognized when earned and expenses are recognized when incurred. Cash Equivalents For the purposes of the Statement of Cash Flows, the Corporation defines cash equivalents as all cash, money market, and savings accounts, plus all investments with original maturities of three months or less. Restricted Assets Certain of the Corporation's assets are classified as restricted assets because their use is restricted to specific purposes by bond indentures or other binding commitments. 5 Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) ' 2. Summary of Significant Accounting Policies (continued) E. Allowance for Uncollectible Accounts ' The Corporation uses the allowance method to recognize the potential uncollectibility of receivables. An allowance of $82 was recorded at December 31, 2005 for uncollectible tenant receivables ($0 at December 31, 2004). F. Bond Issue Costs ' Costs incurred by the Corporation in connection with the issuance of bonds used to finance the acquisition of the Project are amortized over the term to maturity of the bonds, using the bonds outstanding method, which approximates the effective interest method. G. Fixed Assets Fixed assets are recorded at cost and are depreciated using the straight-line method over ' the following estimated useful lives of the underlying assets: Buildings 30 years Furniture and equipment 5 years Land is reported at cost and is not subject to depreciation. ' H. Federal and State Income Tax The Corporation was formed in accordance with Internal Revenue Service Revenue Procedure 95-48, which provides that an "affiliate of a governmental unit" is exempt from ' federal income tax filing requirements. As a result, the Corporation is also exempt from Colorado state income tax. I. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that may affect the ' reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. Trust Indentures A. Adjustable Rate Housing Facilities Revenue Bonds, Series 2003A ' The Corporation's Adjustable Rate Housing Facilities Revenue Bonds, Series 2003A (the "2003A Bonds") are secured by a trust indenture (the "2003A Indenture") under which the Corporation granted U.S. Bank National Association (the "Trustee") a security interest in ' rents and other receipts from operation of the Project, net of the Project's actual operating expenses (the "Pledged Revenues"). Certain capitalized terms in the 2003A Indenture are further defined in Note 7.A., below. Timber Ridge Affordable Housing Corporation ' (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) 3. Trust Indentures (continued) A. Adjustable Rate Housing Facilities Revenue Bonds, Series 2003A (continued) ' Under the terms of the 2003A Indenture, the Pledged Revenues are to be deposited with the Trustee as follows: ' a. Bond Interest Fund - By each interest payment date, the Trustee is to deposit funds into this account which have been received from the Corporation (or drawn on the Credit Facility if the 2003A Bonds are not converted to a Fixed Rate), in an ' amount sufficient to make the required interest payment on the 2003A Bonds. b. Commercial Short-Term Fund -Amounts drawn on the Credit Facility are deposited into this account, until transferred to the Bond Interest Fund to make the required interest payment. The Corporation has no right, title or interest in ' this account. c. Bond Principal Fund - If the 2003A Bonds have not been converted to a Fixed Rate by December 1, 2032, the Trustee is to deposit funds into this account which have been received either from the Corporation or drawn on the Credit Facility, in an amount sufficient to make the required principal payment on the 2003A Bonds. If the 2003A Bonds are converted to a Fixed Rate, the Trustee is to make semi-annual deposits, in May and November, of funds received from the Corporation, in an amount sufficient to make the required principal payments on the 2003A Bonds. d. Redemption Fund - Money on deposit in this account is to be first used to cure ' any deficiencies in the Bond Interest Fund, then to cure any deficiencies in the Bond Principal Fund, and then to purchase or redeem the 2003A Bonds. e. Bond Reserve Fund -The Trustee is to deposit $317,094 from the proceeds of issuance of the 2003A Bonds into this account, with an additional $278,063 to be ' deposited by July 15, 2004 (collectively, the "Bond Reserve Requirement"). Annually, on May 2 and November 2, the Trustee is to ensure that the value of the Bond Reserve Fund meets the Bond Reserve Requirement, with any shortfall ' to be cured by the Corporation by May 20 or November 20. In the event that the . Corporation cannot cure the deficiency, the Trustee will request that the Town replenish the Bond Reserve Fund, but the Town's failure to do so will not constitute an Event of Default. Monies in this account are to be used by the ' Trustee to pay the principal, premium, and interest on the 2003A Bonds while not bearing interest at a Fixed Rate, or to reimburse draws on the Credit Facility in the event that monies in the Bond Interest Fund, Bond Principal Fund or Redemption Fund are insufficient to make required payments of interest, principal or redemption on the required dates. At maturity of the 2003A Bonds, the Bond Reserve Fund may be transferred to the Bond Interest Fund and the Bond Principal Fund to fund the final principal and interest payments. At the written ' direction of the Trustee, monies in the Bond Reserve Fund may be released to the Corporation to pay operating and maintenance expenses of the Project. f. Expense Fund -Funds in this account were disbursed by the Trustee to pay issuance expenses, with any remaining amount transferred to the Bond Interest Fund. g. Bond Purchase Fund - As long as the 2003A Bonds are not converted to a Fixed Rate of interest, this account is to hold any monies received from remarketing of ' Tendered Bonds, monies drawn on the Credit Facility by the Trustee to pay the purchase price of Tendered Bonds, monies received from the underwriter or purchaser of Tendered Bonds upon conversion to a Fixed Rate of interest, and monies received from the Corporation, if requested by Trustee, to fund the ' purchase price of Tendered Bonds. Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements December 31, 2005 and 2004 (Continued) ' 3. Trust Indentures (continued) A. Adjustable Rate Housing Facilities Revenue Bonds, Series 2003A (continued) ' Additionally, the 2003A Indenture imposes requirements regarding the Project's operations, budgeting, insurance and management. B. Subordinate Housing Facilities Revenue Bonds, Series 20036 The Corporation's Subordinate Housing Facilities Revenue Bonds, Series 20038 (the ' "20036 Bonds") are secured by a trust indenture (the "20036 Indenture") under which the Corporation granted U.S. Bank National Association (the "Trustee") a security interest in rents and other receipts from operation of the Project, net of the Project's actual operating expenses (the "Pledged Revenues"), subject to the prior claim on the Pledged Revenues granted under the terms of the 2003A Indenture. Certain capitalized terms in the 20036 Indenture are further defined in Note 7.6., below. Under the terms of the 20036 Indenture, the Pledged Revenues are to be deposited with the Trustee as follows: a. Expense Fund -Funds in this account were disbursed by the Trustee to pay issuance expenses, with any remaining amount transferred to the Bond Fund. b. Bond Fund -This account is used solely for required payments of interest and principal of the 20038 Bonds, using monies received from the Corporation or transferred from the Bond Reserve Fund. c. Bond Reserve Fund -The Trustee is to deposit $222,813 from the proceeds of ' issuance of the 20036 Bonds into this account. If additional bonds are issued on parity with the 20036 Bonds, additional monies are to be deposited to this ' account to equal $222,813 plus the maximum annual debt service due on the additional bonds at issuance (collectively, the "Bond Reserve Requirement"). Annually, on May 2 and November 2, the Trustee is to ensure that the value of the Bond Reserve Fund meets the Bond Reserve Requirement, with any shortfall to be cured by the Corporation by May 20 or November 20. In the event that the Corporation cannot cure the deficiency, the Trustee will request that the Town replenish the Bond Reserve Fund, but the Town's failure to do so will not ' constitute an Event of Default. Monies in this account are to be used by the Trustee to pay the principal, premium, and interest on the 20036 Bonds if the balance in the Bond Fund is insufficient to make required payments of interest, principal or redemption on the required dates. At maturity of the 20036 Bonds, the Bond Reserve Fund may be transferred to the Bond Fund to fund the final principal and interest payments. Additionally, the 20036 Indenture imposes requirements regarding the Project's operations, budgeting, insurance and management. 8 Timber Ridge Affordable Housing Corporation ' (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) ' 4. Cash and Cash Equivalents 1 Cash and Cash Equivalents -Unrestricted: Cash in bank -Checking Cash in bank -Money market Total -Cash and Cash Equivalents -Unrestricted Cash and Cash Equivalents -Restricted: ' Restricted for Tenant Security Deposits: Cash in bank -Money market Restricted -Held by Trustee - 2003A Bonds: ' Replacement Reserve account -Money market Rate cap escrow account -Money Market ' Bond Interest Fund -Money market Bond Reserve Fund -Money market Restricted -Held by Trustee - 2003B Bonds: ' Bond Fund -Money market Bond Reserve Fund -Money market 1 Total -Cash and Cash Equivalents -Restricted 5. Bond Issue Costs Bond issue costs Less: Accumulated amortization Net 6. Fixed Assets Land Buildings Furniture and equipment At cost Less: Accumulated depreciation Net 2005 $ 100 161,246 $ 161,346 $ 17,544 184,362 90,082 17,883 292,327 224,019 224,019 $ 533,890 2005 825,898 (197,727) $ 628,171 2005 $ 4,399,500 15,578,000 30,897 20,008,397 (1,291,722) $ 18,716,675 2004 100 14,702 14,802 17,941 90,812 17,477 108,289 223,382 223,382 349,612 2004 825,898 (62,068) 763,830 2004 4,399,500 15,578,000 30,897 20,008,397 (766,275) 19,242,122 9 Timber Ridge Affordable Housing Corporation ' (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) 1 Long-term Debt A. Adjustable Rate Housing Facilities Revenue Bonds, Series 2003A The 2003A Bonds were issued July 15, 2003 in the principal amount of $19,025,000 as limited "obligations of the Corporation, and not indebtedness of the Town. The 2003A Bonds are payable solely from the Pledged Revenues and the various reserve funds and other monies pledged under the terms of the 2003A Indenture. The 2003A Bonds bear interest at the Weekly Rate established by the Remarketing Agent until converted to another "mode", including a Fixed Rate, by the Corporation. While in any interest rate mode other than a Fixed Rate, the 2003A Bonds are subject to repurchase upon demand by any bondholder at 100% of the outstanding principal amount plus accrued interest. All tendered bonds are then to be subsequently remarketed by the Remarketing Agent, as further described in Note 8.A., below The 2003A Bonds are subject to redemption prior to Maturity (December 1, 2032 or specific maturity date, if converted to a Fixed Rate) at the Corporation's option, using monies in the Redemption Fund, as follows: ^ 2003A Bonds in Daily Mode or Weekly Mode - on any date prior to Maturity at 100% of the principal amount, plus accrued interest. ^ 2003A Bonds in Commercial Long-Term Mode -after the following No-Call Period and at the following redemption prices, plus accrued interest: Length of Rate Period No-Call Period Greater than 12 years 10 years from the Rate Change Date Greater than 4 years, but less than 12 years Less than or equal to 4 years Until 2 years prior to the end of the Rate Period Length of the Rate Period Redemption Price 101 %, declining 0.5% per 6 months to 100% 100% Not subject to optional redemption ^ 2003A Bonds bearing a Fixed Rate -after the following No-Call Period and at the following redemption prices, plus accrued interest: Length of Rate Period Greater than 12 years Greater than 4 years, but less than 12 years No-Call Period 10 years from the Conversion Date Until 2 years prior to Maturity Redemption Price 101 %, declining 0.5% per 6 months to 100% 100% Less than or equal to Term to Maturity Not subject to optional 4 years redemption 10 ' Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) ~ ,. Long-term Debt (continued) A. Adjustable Rate Housing Facilities Revenue Bonds, Series 2003A (continued) From the date of issuance through December 31, 2005, the 2003A Bonds have been in Weekly Mode, with interest rates set by the Remarketing Agent. Interest rates on the 2003A Bonds ranged from 2.52% to 4.49% per annum in 2005, and from 1.19% to 2.54% per annum in 2004. At December 31, 2005, the interest rate on the 2003A Bonds was 4.49% per annum (2.52% at December 31, 2004); however, the Corporation's effective interest rate has been limited to 4%, as provided by the Rate Protection Agreement discussed in Note 9.B. Total interest expense for 2005 incurred in respect of the 2003A Bonds was $658,927 ($304,444 for 2004). As of December 31, 2005, annual debt requirements to maturity for the 2003A Bonds (assuming that the 2003A Bonds remain at the year-end interest rate and mode) are as follows: Years Principal Interest 2006 $ - 761,000 2007 - 761,000 2008 - 761,000 2009 405,000 761,000 2010 430,000 744,800 2011 - 2015 2,515,000 3,447,800 2016 - 2020 3,265,000 2,887,600 2021 - 2025 4,250,000 2,159,600 2026 - 2030 5,520,000 1,213,800 2031 - 2032 2,640,000 159,800 $ 19,025,000 13,657,400 Total 761,000 761,000 761,000 1,166,000 1,174,800 5,962,800 6,152,600 6,409,600 6,733,800 2,799,800 32,682,400 B. Subordinate Housing Facilities Revenue Bonds, Series 20036 1 The 20036 Bonds were issued July 15, 2003 in the principal amount of $1,570,000 as subordinated, limited obligations of the Corporation, and not indebtedness of the Town. The 20036 Bonds are payable solely from the Pledged Revenues and the various reserve funds and other monies pledged under the terms of the 20036 Indenture, but the pledge ' of security interest in the Pledged Revenues is subordinated to the pledge of these same revenues for payment of the 2003A Bonds. ' The 20036 Bonds bear interest at the rate of 6.25% per annum, with semi-annual blended payments of interest and principal on June 1 and December 1 annually. During 2005, the Corporation incurred interest expense totaling $90,260 in respect of the 20036 Bonds ($97,474 for 2004). t The 20036 Bonds mature December 1, 2013 but are subject to prior redemption, at the Corporation's option, at 100% of the principal amount, plus accrued interest; provided that ' redemption of the bonds is not from the proceeds of refunding bonds or other financing by the Corporation. 11 Timber Ridge Affordable Housing Corporation ' (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) ~ ' Long-term Debt (continued) B. Subordinate Housing Facilities Revenue Bonds, Series 20036 (continued) As of December 31, 2005, annual debt requirements to maturity for the 20036 Bonds are as follows: Years Principal 2006 $ 140,000 2007 145,000 2008 155,000 2009 145,000 2010 155,000 2011 - 2013 585,000 $ 1,325,000 C. Promissory Notes -Town of Vail Interest 82,813 74,063 65,000 55,313 46,250 74,375 Total 222,813 219,063 220,000 200,313 201,250 659,375 397,813 1,722,813 In connection with the Corporation's purchase of the Project, the Town advanced $1,000,000 to the Corporation upon execution of a promissory note. During 2005, the Town advanced an additional $700,000 to the Corporation upon execution of another promissory note. At December 31, 2005, the balance outstanding under the terms of ' these promissory notes (collectively, the "Town Notes") was $1,700,000 ($1,000,000 at December 31, 2004). The Town Notes, which bear interest at the rate of 1.5% per annum, matures December 1, 2032. The Town Notes are payable solely from the Pledged Revenues, but the pledge of security interest in the Pledged Revenues is subordinated to the pledge of these same revenues for payment of the 2003A Bonds and the 20038 Bonds. The Town Notes are payable to the extent that the Corporation has determined that excess net revenues of the Project, after provision for necessary operating or capital reserves, have accumulated semi-annually on the business day following debt service on ' the 20036 Bonds. The Town Notes may be repaid by the Corporation at any time without penalty. In the event a shortfall arises in the Bond Reserve Funds for the 2003A Bonds and/or the 20036 Bonds which is not cured within the prescribed deadlines by the Corporation, the Trustee will request that the Town replenish the deficient Bond Reserve Fund, and the Town has agreed to consider such requests but is not obligated to do so. Any funds ' advanced by the Town to replenish Bond Reserve Funds will be considered additional loans by the Town, subject to the same terms as the Town Notes. The Town's failure to replenish any deficiency in the Bond Reserve Funds will not constitute an Event of Default ' for the 2003A Bonds or the 20038 Bonds. The Corporation incurred interest expense totaling $19,977 during 2005 ($15,000 for 2004) in respect of the Town Notes. At December 31, 2005, the Corporation had accrued ' a total of $41,852 ($21,875 at December 31, 2004) in interest payable to the Town under the terms of the Town Notes. 12 Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) ' 8. Credit Facility and Reimbursement Agreement In connection with the issuance of the 2003A Bonds, an irrevocable, stand-by, direct pay letter of credit (the "Credit Facility') in the amount of $19,207,432 was established July 17, 2003 by U.S. Bank, National Association ("U.S. Bank") in favor of the Trustee for the 2003A Bonds. Under the terms of the Credit Facility, up to $19,025,000 may be drawn to pay principal amounts of the 2003A Bonds, and up to $182,432 may be drawn to pay up to 35 days' accrued interest on the ' 2003A Bonds at a maximum rate of 10% per annum. Available credit under the Credit Facility will be permanently and proportionately reduced upon notice from the Trustee of redemption of less than all of the 2003A Bonds. ' The Credit Facilit ex ires at the earlier of: y p a. July 17, 2008, although it automatically renews for successive one-year terms (unless U.S. Bank notifies the Trustee that the Credit Facility has not been renewed), b. 15 days following notice by U.S. Bank requiring payment of all outstanding 2003A Bonds due to Default, c. The date of acceleration or redemption of all 2003A Bonds, ' d. The second business day after conversion of the 2003A Bonds to a Fixed Mode interest rate, or e. The date of surrender of the Credit Facility for cancellation, as required by the Indenture. Concurrent with the Credit Facility, the Corporation executed a Reimbursement Agreement and a Demand Note in favor of U.S. Bank, evidencing the Corporation's obligation to repay all advances under the Credit Facility, together with interest on all such draws. All amounts drawn on or charged against the Credit Facility bear interest at the Bank Rate, which is equal to U.S. Bank's Prime Rate plus 200 Basis Points. The Credit Facility automatically renews each year, subject to the Corporation's compliance with requirements as to operational performance of the Corporation, ' provision of certain records to the Trustee, and payment of all fees (including annual stand-by fees equal to 125 Basis Points calculated on the original credit commitment, plus U.S. Bank's standard fees and charges for processing draws on the Credit Facility). Pursuant to this arrangement, the Corporation incurred financing fees during 2005 totaling $243,319 ($243,759 for 2004) for U.S. Bank in respect of stand-by fees for the Credit Facility. During 2003, U.S. Bank was paid an origination fee in connection with the Credit Facility of $192,074 from the proceeds on issuance of the 2003A Bonds, which has been capitalized as Bond Issue Costs. ' During 2005, the Corporation drew and repaid $630,246 ($285,893 for 2004) of advances on the Credit Facility. At December 31, 2005 and 2004, no balance was outstanding on the Credit Facility. The Reimbursement Agreement imposes the following funding commitments on the Corporation: a. Commencing January 1, 2009, the Corporation is to deposit into the Bond Principal Fund an amount equal to 1/12th of the scheduled principal reductions for the 2003A Bonds, to be used by the Trustee to pay for optional redemptions as provided in the 2003A Indenture. b. $90,000 was paid from the proceeds of issuance of the 2003A Bonds into a Replacement Reserve account. Annually thereafter, the Corporation is to deposit an equal amount ' increased by 3% per annum into the Replacement Reserve account, with usage of such funds restricted to capital improvements to the Project approved by U.S. Bank. The Replacement Reserve Account is pledged to U.S. Bank and not the owners of the 2003A e Bonds. 13 Timber Ridge Affordable Housing Corporation ' (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) 8. Credit Facility and Reimbursement Agreement (continued) c. The Corporation is required to deposit all security deposits received from tenants of the ' Project into a separate account. d. Commencing August 1, 2004 and annually thereafter, the Corporation is to deposit into a Rate Cap Escrow Account an amount not less than $45,000, to be used only to pay for ' required rate protection agreements. As required by the Reimbursement Agreement and for as long as the Credit Facility is outstanding, the Corporation is required to have in effect a rate protection agreement at a fixed interest rate acceptable to U.S. Bank in an amount equal to the then-outstanding principal amount of the Credit Facility, with a floating rate payer acceptable to U.S. Bank. The Corporation's rate protection agreement is described in Note 9.B., below. 9. Significant Agreements and Contracts A. Remarketing Agreement Under the terms of the 2003A Indenture, George K. Baum & Company ("Baum") is appointed Remarketing Agent and is responsible for determining the interest rates ' applicable to the outstanding 2003A Bonds. The interest rate to be set by Baum at each Rate Determination Date is to be the minimum rate of interest necessary to enable Baum to sell the 2003A Bonds at that Date at a price equal to the principal amount plus accrued interest, but will not exceed 10% per annum. Baum is to be reimbursed for all expenses ' incurred in its duties as Remarketing Agent plus, while the 2003A Bonds do not bear a Fixed Rate of interest, an annual fee equal to 1/8th of 1 % of the weighted daily principal amount outstanding. Baum and the Corporation will negotiate Baum's fees for remarketing services if the 2003A Bonds are converted to a Fixed Rate. In 2005, the Corporation incurred fees totaling $23,781 ($23,781 during 2004) for Baum in respect to its services as Remarketing Agent. ' B. Rate Protection Agreement Effective July 15, 2003, the Corporation entered into a Rate Protection Agreement with SMBC Derivative Products Limited ("SMBC") whereby SMBC agreed to limit the Corporation's interest payable on the 2003A Bonds to 4% per annum through August 1, 2006. During 2003, SMBC was paid a fee of $133,000 for its services under the Rate Protection Agreement, which has been capitalized as Bond Issue Costs. ' During 2005, the Company was reimbursed a total of $7,633 (2004 - $0) by SMBC under the terms of the Rate Protection Agreement to limit the Corporation's interest payable on the 2003A Bonds to 4% per annum. ' C. Management Agreement ' Effective July 17, 2003, the Corporation entered into an agreement with Corum Real Estate Group, Inc. ("Corum"), whereby Corum is to provide management of the day-to- day operations of the Project. The agreement has aone-year term and is subject to automatic renewal for additional one-year periods unless otherwise terminated as 1 provided in the agreement. 14 Timber Ridge Affordable Housing Corporation ' (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) ' 9. Significant Agreements and Contracts (continued) C. Management Agreement (continued) ' Under the terms of the agreement, Corum is to be reimbursed for all charges, including staffing, incurred on behalf of the Corporation in the management of the Project. Corum is also to be paid a management fee equal to the greater of $8,000 per month or 5% of total gross collected income from the property. Effective January 1, 2004, the Corporation and Corum informally agreed to amend the management fee calculation to equal the greater of $4,000 per month or 5% of total gross collected income from the property. Total expenses, including reimbursements to Corum and Corum's staff, incurred under the management contract for 2005 and 2004 were as follows: 2005 2004 ' Advertising $ 3,515 11,099 Office expenses 5,557 5,902 Management fee 77,595 58,675 ' Telecommunications 4,113 5,315 Wages -Administrative 81,494 75,187 Wages -Maintenance and other 95,354 111,550 ' Repairs and maintenance 804 2,310 Miscellaneous 6,720 1,612 Mold remediation 32,607 15,087 ' Net $ 307,759 286,737 The Corporation had balances of $18,929 and $18,212 payable to Corum at December ' 31, 2005 and 2004, respectively. D. Laundry Room Lease During 2003, the Corporation entered into an agreement with Automatic Laundry Company, Ltd. ("Automatic"), under which the Corporation leased space at the Project to Automatic for the installation and operation of coin laundry facilities. The lease, which has an initial term of 10 years and automatically renews for similar 10-year periods unless otherwise terminated, requires Automatic to pay monthly lease payments equal to the greater of $5 or 90% of the gross monthly collections in excess of $34 (as adjusted for ' cost-of-living index changes) per machine. The lease also calls for Automatic to pay a rental premium during the first 27 months of the initial lease term equal to the greater of $667 per month or 14% of Automatic's gross monthly collections. As required by the lease, Automatic paid the Corporation a prepaid rental premium of $18,000 during 2003, which is being amortized to the Corporation's income over the first 27 months of lease agreement, with the unearned portion of this prepayment included in Deferred Revenues. 15 1 Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements December 31, 2005 and 2004 (Continued) Significant Agreements and Contracts (continued) E. Master Lease Agreement Effective November 1, 2003, the Corporation entered into cone-year master lease agreement (the "Master Lease") with The Vail Corporation d/b/a Vail Associates, Inc. ("Vail Associates") under which Vail Associates agreed to lease from the Corporation, for sublet to its employees, 30 - 52 units at a monthly rental rate of $1,125 per unit. Effective November 1, 2004, the Master Lease was amended to increase the number of leased units to 95, reduce the monthly rental rate to $1,075, and extend the term of the agreement to October 31, 2006. Effective October 1, 2005, the Corporation executed a new Master Lease with Vail Associates for the rental of 139 units through September 20, 2007, and a 1-year renewal at the option of Vail Associates. 10. Concentrations Lease payments received by the Corporation during 2005 under the terms of the Master Lease with Vail Associates constituted approximately 87% of the Corporation's rental revenues (68% for 2004). 11. Net Assets (Deficit) The Corporation had a deficit of net assets of $2,314,566 and $1,335,553 at December 31, 2005 and 2004, respectively. ' 12. Mold Remediation Beginning in 2003, the Corporation performed remediation and other precautionary renovations to the Project to alleviate potential and identified mold problems in certain rental units. As of December 31, 2005, a total of 158 units have been renovated. For 2005, the Corporation incurred mold remediation costs totaling $369,502 ($252,655 for 2004). Costs of further remediation and ' renovations will be charged to operations in future periods, as the extent of such additional repairs has not been determined at December 31, 2005. 13. Compliance with Trust Indenture and Reimbursement Agreement ~ As described in Note 3.A.e., above, the 2003A Indenture established initial funding of the Bond Reserve Fund for the 2003A Bonds at $317,094 and required additional funding during 2004. ' However, the 2003A Indenture also permits the Trustee to release monies in the Bond Reserve Fund to the Corporation to pay operating and maintenance expenses of the Project. During 2005, a total of $0 ($176,788 for 2004) was released to the Corporation pursuant to these provisions in the 2003A Indenture. As a result, balances at December 31, 2005 and 2004 in the Bond Reserve Fund for the 2003A Bonds were $577,274 and $577,681, respectively, less than the Bond Reserve Requirement of $595,157. ' As described in Note 8, above, the Reimbursement Agreement with U.S. Bank requires the Corporation to fund a Replacement Reserve in 2003 and annually thereafter. At December 31, 2005 and 2004, balance in the Replacement Reserve account were $93,819 and $91,888 less than required by the Reimbursement Agreement. 16 Timber Ridge Affordable Housing Corporation ' (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) ' 13. Compliance with Trust Indenture and Reimbursement Agreement (continued) The Reimbursement Agreement also requires that, commencing August 1, 2004 and annually thereafter, the Corporation deposit into a Rate Cap Escrow account an amount not less than $45,000, to be used only to pay for required rate protection agreements. As of December 31, 2004, the balance in the Rate Cap Escrow account was $45,000 less than required by the ' Reimbursement Agreement. However, at December 31, 2005, the Corporation was in compliance with the required funding of the Rate Cap Escrow account. The 2003A Indenture and 20038 Indenture each impose financial ratios relating to debt service ' coverage. At December 31, 2005 and 2004, the Corporation did not meet the minimum required debt service coverage ratios under the terms of the 2003A Indenture or the 20038 Indenture. ' 14. Concentration of Credit Risk The Corporation maintains its cash balances with a financial institution located in Greenwood Village, Colorado. These balances are insured by the Federal Deposit Insurance Corporation up ' to $100,000. At December 31, 2005, the Corporation's uninsured cash balances totaled $66,289 ($0 at December 31, 2004). 15. Going Concern ~ The Corporation's total expenses exceeded aggregate revenues by $979,013 for 2005. This adds to the Corporation's $1,335,553 deficit net assets balance accumulated in the period from ' inception of operations, July 17, 2003, through December 31, 2004. While the Corporation's revenues have increased in each year of operations, the ability of the Corporation to further increase rental revenues is limited because mold problems in the remaining rental units in the t Project must first be remediated, at substantial cost to the Corporation. Since the inception of operations, the Corporation has incurred mold remediation costs totaling $994,627, which represents a considerable portion of the Corporation's expenses. As of December 31, 2005, 40 of the 198 units at the Project were unavailable for rental due to mold concerns. ' In addition to limitations on the Corporation's revenue base, the Corporation has substantial long- term debt obligations. As detailed in Note 7.A., above, the 2003A Bonds currently bear a variable weekly interest rate, and short-term interest rates have increased steadily since the issuance of these bonds. While the Corporation's Rate Protection Agreement outlined in Note 9.B., above, has limited the Corporation's effective interest rate on the 2003A Bonds to 4% per annum, the Rate Protection Agreement will expire in 2006. In light of the continued upward trend in short- ' term interest rates in 2006, the Corporation's effective interest rate on the 2003A Bonds for 2006 and future periods will very likely exceed rates 4%. Higher interest costs will have a significant adverse impact on the Corporation's cash flows. ' During 2005, the Corporation was advanced $700,000 by the Town. This additional funding helped improve the Corporation's year-end liquidity position from the prior year, although current liabilities exceeded current assets. Since the Corporation's revenue base is limited without further significant expenditures on mold remediation, interest rates payable on the Corporation's debt are climbing, and since the Corporation has already taken some measures to control operating costs and may not be able to further reduce discretionary spending, the above factors may impact the Corporation's ability to meet obligations as they come due. 17 Timber Ridge Affordable Housing Corporation (A Colorado Non-Profit Corporation and A Component Unit of the Town of Vail, Colorado) Notes to the Financial Statements ' December 31, 2005 and 2004 (Continued) ' 15. Going Concern (continued) The Board considers the above factors significant to its future operations and is pursuing the sale and redevelopment of the Project. In July 2005, a committee consisting of the Board and representatives from Town Council and the Vail Local Housing Authority was formed to solicit requests for proposals ("RFPs") for redevelopment. As a result of this process, Corum Real Estate Group, Inc. ("Corum") was selected as a potential developer of the property. On March 31, 2006, Corum, the Town, and the Corporation entered into a Memorandum of Understanding ("MOU") outlining the roles of each party in working toward the disposition and redevelopment of the Project. The MOU anticipates that the redeveloped Project will consist of both "for-sale" and rental units, including a minimum of 600 beds of deed-restricted workforce, rental housing. The MOU further anticipates retirement of the Corporation's outstanding debt and conveyance of the Project to Corum in fee simple. The MOU expires on June 29, 2006 at which time the parties expect to have a Disposition and Development Agreement in place. The Board also projects that, under current master lease arrangements, rental revenues will be sufficient to cover operating expenses and debt service for the next three to four years. However the Board does not anticipate that required reserves will be reinstated during this period. 1 ii 1 18 MEMORANDUM TO: Vail Town Council FROM: Department of Community Development DATE: June 6, 2006 SUBJECT: An appeal, pursuant to Section 12-3-3, Appeals, Vail Town Code, of the Town of Vail Planning and Environmental Commission's denial of a variance from Section 12-6C- 8, Density Control, and Section 12-6C-9, Site Coverage, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1, and setting forth.details in regard thereto. (PEC06-0017) Appellant: Robert Stephenson Jr, represented by Snowdon Hopkins Architects Planner: Bill Gibson I. SUBJECT PROPERTY The subject property is located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1. II. STANDING OF APPELLANT As the property owner, the appellant, Robert Stephenson Jr., has standing to file an appeal of the Planning and Environmental Commission's action. III. RE(~UIRED ACTION The Town Council may grant a continuance of the review of this item (i.e. table) to a future public hearing date "to allow the parties time to obtain information", pursuant toSub-section 12-3-3-C3, Procedures, Vail Town Code. The Vail Town Council shall uphold, overturn, or modify the Town of Vail Planning and Environmental Commission's denial of a variance from Section 12-6C-8, Density Control, and Section 12-6C-9, Site Coverage, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1, and setting forth details in regard thereto. Pursuant to Sub-section 12-3-3-C5, Vail Town Code, the Town Council is required to make findings of fact in accordance with the Vail Town Code: . `The Town Council shall on all appeals make specific findings of fact based directly on the particular evidence presented to it. These findings of fact must support conclusions that the standards and conditions imposed by the requirements of this title (i.e. Title 12, Zoning Regulations, Vail Town Code) have or have notbeen met." IV. BACKGROUND On July 25, 2005, the Planning and Environmental Commission approved these requested variances as part of a larger redevelopment proposal which included additions to the adjoining half of the appellant's two-family residence. This approval was "called-up" by the Town Council on August 2, 2005; and on September 6, 2005, the Town Council overturned the Commission's decision and denied these requested. variances. In the spring of 2006, the appellant re-submitted applications forthese requested variances; separate from the larger redevelopment proposal including the adjoining dwelling unit. On April 10, 2006, the Planning and Environmental Commission denied the appellant's variance requests. On May 1, 2006, the appellant submitted an appeal of the Planning and Environmental Commission's April 10, 2006 action. On May 19, 2006, the appellant requested this item be tabled from the Town Council's May 6, 2006, public hearing to its June 20, 2006, public hearing. Please refer to the attached Appellant's letter (Attachment A). Please refer to the Public Notice (Attachment B), Appellant's Appeal Form (Attachment C), Planning and Environmental Commission April 10, 2006 agenda results excerpt (Attachment D), and the Planning and Environmental Commission April 10, 2006 memorandum (Attachment E) for additional information. V. APPLICABLE REGULATIONS OF THE TOWN CODE Chapter 12-3, Administration and Enforcement (in part) Section 12-3-3: Appeals (in part) C. Appeal Of Planning And Environmental Commission Decisions And Design Review Board Decisions: 1. Authority: The Town Council shall have the authority to hear and decide appeals from any decision, determination or interpretation by the Planning and Environmental Commission or the Design Review Board with respect to the provisions of this Title and the standards and procedures hereinafter set forth. 2. Initiation: An appeal may be initiated by an applicant, adjacent property owner, or any aggrieved or adversely affected person from any order, decision, determination or interpretation by the Planning and Environmental Commission or the Design Review Board with respect to this Title. "Aggrieved or adversely affected person"means any person who will sufferan adverse effect to an interest protected or furthered by this Title. The alleged adverse interest may be shared in common with other members of the community at large, but shall exceed in degree the general interest in community. good shared by all persons. The Administrator shall determine the standing of an appellant. if the appellant objects to the Administrator's determination of standing, the Town Council shall, at a meeting prior to hearing evidence on the appeal, make a determination as to the 2 standing of the appellant. If the Town Council determines that the appellant does not have standing to bring an appeal, the appeal shall not be heard and the original action or determination stands. The Town Council may also call up a decision of the Planning and Environmental Commission or the Design Review Board by a majority vote of those Council members present. 5. Findings: The Town Council shall on all appeals make specific findings of fact based directly on the particular evidence presented to it These findings of fact must support conclusions that the standards and conditions imposed by the requirements of this Title have or have not been met. Chapter 12-17 Variance (in part) Section 12-17-1: PURPOSE: A. Reasons for Seeking Variance: In order to prevent or to lessen such practical difficulties and unnecessary physical hardships inconsistent with the objectives of this title as would result from strict or literal interpretation and enforcement, variances from certain regulations may be granted. A practical difficulty or unnecessary physical hardship may result from. the size, shape, or dimensions of a site or the location of existing structures thereon; from topographic or physical conditions on the site or in the immediate vicinity; or from other physical limitations, street locations or conditions in the immediate vicinity. Cost or inconvenience to the applicant of strict or literal compliance with a regulation shall not be a reason for granting a variance. Section 12-17-6: CRITERIA AND FINDINGS: A. Factors Enumerated: Before acting on a variance application, the Planning and ,Environmental Commission shall consider the following factors with respect to the requested variance: 1. The relationship of the requested variance to other existing or potential uses and structures in the vicinity. 2. The degree to which relief from the strict or literal interpretation and enforcement of a specified regulation is necessary to achieve compatibility and uniformity of treatment among sites in the vicinity, or to attain the objectives of this title without grant of special privilege. 3. The effect of the requested variance on light and air, distribution of population, transportation and traffic facilities, public facilities and utilities, and public safety. 4. Such other factors and criteria as the commission deems applicable to the proposed variance. 3 B. Necessary Findings: The Planning and Environmental Commission shall make the following findings before granting a variance: 1. That the granting of the variance will not constitute a grant of special privilege inconsistent with the limitations on other properties classified in the same district. 2. That the granting of the variance will not be detrimental to the public health, safety, or welfare, or materially injurious to properties or improvements in the vicinity. 3. That the variance is warranted for one or more of the following reasons: a. The strict or literal interpretation and enforcement of the specified regulation would result in practical difficulty or unnecessary physical hardship inconsistent with the objectives of this title. b. There are exceptional or extraordinary circumstances or conditions applicable to the site of the variance that do not apply generally to other properties in the same zone. c. The strict or literal interpretation and enforcement of the specified regulation would deprive the applicant of privileges enjoyed by the owners of other properties in the same district. VI. STAFF RECOMMENDATION Tabling The appellant is requesting this item be tabled to the Town Council's June 20, 2006, public hearing; so the appellant may appear at the hearing in person instead of solely being represented by .Snowdon and Hopkins Architects. The Community Development Department recommends the Vail Town Council table this item to its June 20, 2006_, public hearing. Should the Town Council choose to grant a continuance of this hearing, the Community Development Department recommends the Town Council make the following finding: 1. This hearing of an appeal shall be continued to June 20, 2006, pursuant to Sub- section 12-3-3-C3, Procedures, Vail Town Code, to allow the appellant time to appear and testify at the hearing in person. , If the Town Council does not choose to table this item, the following are the Community Development Department's recommendations: Site Coverage Variance The Community Development Department recommends the Vail Town Council upholds the Planning and Environmental Commission's denial of a variance from Section 12-6C-9, Site Coverage, Vail Town Code, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1, and setting forth details in regard thereto. 4 On an appeal, the Town Council shall make specific findings of fact based directly on the particular evidence presented. These findings of fact must support conclusions that the standards and conditions imposed by the requirements of Title 12, Zoning Regulations, Vail Town Code, have or have not been met. Should the Town Council choose to uphold the Planning and Environmental Commission's denial of a variance from Section 12-6C-9, Site Coverage, Vail Town Code, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1; the Community Development Department recommends the Town Council make the following findings: "1. The granting of this variance will constitute a granting of special privilege inconsistent with the limitations on other properties classified in the Two-Family Residential District, since a garage addition can be constructed in conformance with the site coverage limits and those proposed additions in excess of the site coverage limits also exceed the gross residential floor area limits as further discussed in the Staff memorandum to the Planning and Environmental Commission dated July 25, 2005. 2. The granting of this variance will not be detrimental to the public health, safety, or welfare, or materially injurious to properties or improvements in the vicinity. 3. This variance is not warranted for the following reasons: a. The strict literal interpretation or enforcement of the specified regulation would not result in practical difficulty or unnecessary physical hardship inconsistent with the objectives of Title 12, Zoning Regulations, Vail Town Code,. since a garage addition can be constructed in conformance with the site coverage limits and those proposed additions in excess of the site, coverage limits also exceed the gross residential floor area limits as further discussed in the Staff memorandum to the Planning and Environmental Commission dated July 25, 2005. b. There are no exceptions or extraordinary circumstances or conditions applicable to the same site of the variance that do not applygerierally to other properties in the same district, since a garage addition can be constructed in conformance with the site coverage limits and those proposed additions in excess of the site coverage limits also exceed the gross residential floor area limits as further discussed in the Staff memorandum to the Planning and Environmental Commission dated July 25, 2005. c. The strict interpretation or enforcement of the specified regulation would not deprive the applicant of privileges enjoyed by the owners of other properties in the same district, since a garage addition can be constructed in conformance with the site coverage limits and those proposed additions in excess the site coverage limits also exceed the gross residential floor area limits as further discussed in the Staff memorandum to the Planning and Environmental Commission dated July 25, 2005." 5 Density Control (i.e. GRFA) Variance The Community Development Department recommends the Vail Town Council upholds the Planning and Environmental Commission's denial of a variance from Section 12-6C-8, Density Control, Vail Town Code, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1, and setting forth details in regard thereto. On an appeal, the Town Council shall make specific findings of fact based directly on the particular evidence presented to it. These findings of fact must support conclusions that the standards and conditions imposed by the requirements of Title 12, Zoning Regulations, Vail Town Code, have or have not been met. Should the Town Council choose to uphold the Planning and Environmental Commission's denial of a variance from Section 12-6C-8, Density Control, Vail Town Code, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1; the Community Development Department recommends the Town Council make the following findings: "1. The granting . of this variance will constitute a granting of special privilege inconsistent with the limitations on other properties classified in the Two-Family Residential District,. since the residence was originally. constructed under Town of Vail jurisdiction with Town of Vail design review approval, the gross residential floor area regulations were amended in August of 2004 to increase the size limits for structures within the Two-Family Residential District and 'the existing residence exceeds these limits, and the proposed additions in excess of the gross residential floor area limits also exceed the site coverage limits as further discussed in the Staff memorandum to the Planning and Environmental Commission dated July 25, 2005. 2. The granting of this variance will not be detrimental to the public health, safety, or welfare, or materially injurious to properties or improvements in the vicinity. 3. This variance is not warranted for the following reasons: a. The strict literal interpretation or enforcement of the specified regulation would not result in practical difficulty or unnecessary physical hardship inconsistent with the objectives of Title 12, Zoning Regulations, Vail Town Code, since the residence was originally constructed under Town of Vail jurisdiction with Town of Vail design review approval, the gross residential floor area regulations were amended in August of 2004 to increase the size limits for structures within the Two-Family Residential District and the existing residence exceeds these limits, and the proposed additions in excess of the gross residential. floor area limits also exceed the site coverage limits as further discussed in the •Staff memorandum to the Planning and Environmental Commission dated July 25, 2005. b. There are no exceptions or extraordinary circumstances or conditions applicable to the same site of the variance that do not apply generally to other properties in the same district, since the residence was originally constructed under Town of Vail jurisdiction with Town of Vail design review approval, the gross residential floor area regulations were amended in August of 2004 to increase the size limits for structures within the Two-Family Residential District 6 and the existing residence exceeds these limits, and the proposed additions in excess of the gross residential floor area limits also exceed the site coverage limits as further discussed in the Staff memorandum to the Planning and Environmental Commission dated July 25, 2005. c. The strict interpretation or enforcement of the specified regulation would not deprive the applicant of privileges enjoyed by the owners of other properties in the same district, since the residence was originally constructed under Town of Vail jurisdiction with Town of Vail design review approval, the gross residential floor area regulations were amended in August of 2004 to increase the size limits for structures within the Two-Family Residential District and the existing residence exceeds these limits, and the proposed additions in excess of the gross residential floor area limits also exceed the site coverage limits as further discussed in the Staff memorandum to the Planning and Environmental Commission dated July 25, 2005. " VII. ATTACHMENTS A. Snowdon and Hopkins Architect's letter dated May 19, 2006 B. Public Notice C. Appellant's Appeal Form D. Planning and Environmental Commission April 10, 2006 agenda results (excerpt) E. Planning and Environmental Commission April 10, 2006 memorandum 7 Attachment: A ' ~.,._,._ t•JII~J'~IiUJ~t~1~li~~UJ~1~\I~A~I B~1lAill~~lRw7~11P7.~ wr_=~ "" b4iTia~7~:, _a~..~, . _ _.._.... _.. _.. Mr. Russell Forrest Director of Community Development Town of Vail 75 South Frontage Road Vail, Colorado 81657 19 May 2006 RE: Appeal of PEC decision to deny elevator and entry Dear Mr. Forrest, I am writing on behalf of my client, Robert Stephenson M.D., to request the June 6 hearing of our appeal to the Town Council to be tabled to the June 20, 2006 Town Council meeting. Thank you for your consideration of this request. Sincerely, Fd «~(Q s Pamela. W. Hopkins AIA Snowdon and Hopkins Architects, P.C. P(1 RnY ~~d(1 • Vail ('nlnrarin R1tiSR • 970-476-2201 • 970-47f-7491(Fl • Snowdontlookins_com Attachment: B THIS ITEM MAY EFFECT YOUR PROPERTY PUBLIC NOTICE NOTICE IS HEREBY GIVEN that the Town Council of the Town of Vail will hold a public hearing in accordance with Section 12-3-3, Vail Town Code, on Tuesday, June 6, 2006, at 6:00 PM in the Town of Vail Municipal Building, in consideration of: ITEM/TOPIC: An appeal, pursuant.to Section 12-3-3, Appeals, Vail Town Code, of the Town of Vail Planning and Environmental Commission's denial of a variance from Section 12-6C-8, Density Control, and Section 12-6C-9, Site Coverage, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1, and setting forth details in regard thereto. (PEC06-0017) Appellant: Robert Stephenson, Jr., represented by Snowdon and Hopkins Architects Planner: Bill Gibson The applications and information about the proposals are available for public inspection during regular office hours at the Town of Vail Community Development Department, 75 South Frontage Road. The public is invited to attend project orientation and the site visits that precede the public hearing in the Town of Vail Community Development Department. Please call (970) 479-2138 for additional information. Sign language interpretation is available upon request with 24-hour notification. Please call (970) 479-2356, Telephone for the Hearing Impaired, for information. rout nl;~ el u4; 1.: <c. _c~ LL:l I r Iby6~ibbiy -- •- • -..~... ~ ~.. mourn •, ~IYUaIllV(Y~yOFi 1'i0. ~^:~9 P . Z/G Attachment: C ~ ~~~ . ~,a~ , D ~; - , ~• . 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Lam.. .,. -, April 27, 2006 Mr. Stan Zemler Town of Vail 75 South Frontage Road Vail, CO 81657 Re: Appeal of PEC decision Dear Mr. Zemler: Please accept this letter and the accompanying application as a formal request for an appeal of the April 10, 2006 PEC denial of a variance request from Section 12-6C-8, Density Control and Section 12-6C-9, Site Coverage provisions of the Vail Town Code to allow for a residential addition to Lot 18, Block 3, Vail Village Filing 1, located at 1448 Vail Valley Drive. Dr. Robert Stephenson is the variance applicant and property owner. In accordance with Town of Vail Code Section 12-3-3 C-2 the applicant has standing to appeal this denial. This letter and the application form follow the procedure outlined in Section 12-3-3-C-3 for initiating an appeal. Please consult with the applicant's representative, Snowdon & Hopkins Architects, to schedule an appropriate date for the appeal hearing. Pam Hopkins may be reached at 476-2201. Please call if you have any questions or require additional information. Sincerely, ~~~~ Pamela W. Hopkins, AIA Copy: Dr. Robert Stephenson, Jr. PO Box 3340 • Vail. Colorado f~1Fi5fi • 970-476-2201 • 970-476-7491(F1 • Snowdonllookins.com -~=- 4/27/06 PROPERTIES AJACENT TO LOT 18, BLOCK 3, VAIL VALLEY 1sr FILING, TOWN OF VAIL: 1448 Vail valley Drive: Unit A -Schedule #R007967 Unit B -Schedule #R007968. Bahman & Hamila Atefl Lot 17, Block 3, Unit A 8745 Old Dominion Drive Schedule #R009579 McLean, VA 22102 John & Bobbiann Houtsma Lot 17, Block 3, Unit B 1468 Vail Valley Drive, Unit B Schedule #R009567 Vail, CO 81657 Vincent J. Duncan Lot 19, Block 3 (1 owner) 1875 Lawrence Street, Suite 550 Schedule #R004647 Denver, CO 80202-1847 Thompson Petroleum Corp. Lot 9, Block 3 (1owner) 325 North St. Paul, Suite 4300 Schedule #R007975 Dallas, TX 75201 Mike & Deborah D. Nunez Lot B, Block 3 (1 owner) 18 Harborage Isle Drive Schedule #R007855 Ft. Lauderdale, FL 33316 nn n_ -, -,wn _ ~~_~~ ~-_~___~_ o~cro non n~c ~~n~ . n^~n n^~c 7nn9IF\ . C., ,,..,a,,.,H~.,l,~.,~ ~.,.,, /^\ Planning and Environmental Commission Project Description: SITE COVERAGE AND GRFA VARIANCE FOR ELEVATOR AND ENTRY ADDITION Participants: OWNER STEPHENSON, ROBERT H. & ANNE03/14/2006 1042 WOODRUFF PLANTATION PKWY MARIETTA GA 30067 APPLICANT SNOWDON AND HOPKINS, ARCHITE03/14/2006 Phone: 970-476-2201 PO BOX 3340 VAIL CO 81658 License: 0000001763 ARCHITECT SNOWDON AND HOPKINS, ARCHITE03/14/2006 Phone: 970-476-2201 PO BOX 3340 VAIL CO 81658 License: 0000001763 Project Address: 1448 VAIL VALLEY DR VAIL Location: 1448 VAIL VALLEY DRIVE Legal Description: Lot: 18 Block: 3 Subdivision: VAIL VALLEY Parcel Number: 2101-092-0701-7 Comments: BOARD/STAFF ACTION Motion By: CLEVELAND Action: DENIED Second By: KJESBO Vote: 6-0 Date of Approval: Conditions: - ACTION FORM + tee! Department of Community Development TO~~UN OF VAIL ~' 75 South Frontage Road, Vail, Colorado 81657 te1:970.479.2139 fax: 870.479.2452 web: www.ci.vail.co.us Project Name: STEPHENSON VARIANCE PEC Number: PEC060017 Planner: Bill Gibson PEC Fee Paid: $500.00 Attachment: D PLANNING AND ENVIRONMENTAL COMMISSION PUBLIC MEETING April 10, 2006 1t7t4N:OF:VAII,' ? PROJECT ORIENTATION -Town Council Chambers -PUBLIC WELCOME MEMBERS PRESENT Chas Bernhardt Doug Cahill Dick Cleveland .Bill Jewitt Rollie Kjesbo Bill Pierce Site Visits: MEMBERS ABSENT Anne Gunion 1. Gore Creek Plaza Building -193 East Gore Creek Drive Driver: George Public Hearing-Town Council Chambers 12:00 pm 2:00 pm 1. Swearing in of Rollie Kjesbo, Anne Gunion, Dick Cleveland and Bill Pierce by Lorelei Donaldson, Town Clerk ~- It was noted by Doug Cahill that because Anne Gunion was not present for the swearing in of the new Commission members, that the same procedure would be repeated at the next PEC meeting on April 24, 2006. 2. Election of Chair and Co-Chair and Appointment of representative for AIPP and Open Space Committees. Doug Cahill was unanimously elected as.Chair of the Planning and Environmental Commission and Chas Bernhardt was elected as the Co-chair of the Planning and Environmental Commission. Doug Cahill was unanimously elected as the new AIPP representative and Chas Bernhardt was unanimously elected as.the representative for the Open Space Committee. 3. A request for a final review of a variance, from Section 12-6C-8, Density Control and Section 12- 6D-6, Setbacks, Vail Town Code, to allow for a residential addition (garage, entry, and elevator), located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Valley Filing 1, arid setting forth details in regard thereto. (PEC06-0017) Applicant: Robert Stephenson, Jr., represented by Snowdon Hopkins Architects Planner: Bill Gibson ACTION: Denied MOTION: Cleveland SECOND: Kjesbo VOTE: 5-1-0 (Bernhardt opposed) Bill Gibson presented the proposal according to the memorandum: Pam Hopkins, the applicant's representative, stated that the new GRFA policy needed to be re- evaluated by both the Community Development Department Staff and the Planning and Environmental Commission. She commented that a different application of the regulations should be applied to residences which are older and which, when constructed, were subject to Page 1 different GRFA regulations. She finalized her commentary by stating that there were thirty seven steps that led to the front door. No public comment was offered. Dick Cleveland stated that it would be a grant of special privilege to grant a variance for additional GRFA. He added that the new GRFA regulations actually increased in 2004 to account for the previously offered 250 addition. Regarding the site coverage variance, he was not comfortable with the request in the name of equity across the Town. Pam Hopkins commented that she was disappointed by that statement. Bill Jewitt previously felt that the requests would be grant of a special privilege and that his feeling remained unchanged. Rollie Kjesbo asked if the elevator could be accommodated within the existing footprint of the house, to which Pam Hopkins replied in the negative. Rollie stated that he had sympathy with the applicant regarding the GRFA request, but could not empathize with the site coverage request. Bill Pierce commented that the current GRFA regulations granting credits for space on the lowest level should be re-evaluated in relation to garage vs. livable space. Chas Bernhardt stated that a text amendment is the only way to address the GRFA request. Because the garage was just done, no site coverage was currently available and therefore, he could not sympathize with this request. He suggested that the GRFA request be redefined as a text amendment to the GRFA regulations instead. Dick Cleveland added that there was much previous discussion regarding the definition of a lowest level, regardless of the space that filled such level. Doug Cahill commented that a site coverage request might have been granted if the GRFA . addition of an elevator and the construction of a garage had been reversed in order. 4. A request for a final review of a major exterior alteration, pursuant to Section 12-7J-12, Major Exterior Alterations or Modifications, Vail Town Code, to allow for the construction of the Timberline Lodge, located at 1783 North Frontage Road/Lots 9.-12, Buffehr Creek Subdivision, and setting forth details in regard thereto. (PEC05-0080) Applicant: Timberline Roost Lodge, LLC, represented by Mauriello Planning Group, LLC Planner: George Ruther ACTION: Tabled to May 8, 2006 MOTION: Jewitt SECOND: Kjesbo VOTE: 6-0-0 George Ruther presented the project according to the memorandum, clarifying that the applicant was not currently asking for a final approval but rather for confirmation by the Commission regarding the definition of "natural topography" upon the site. He described how the topographic conditions upon the site were re-established to provide an "original" topographic survey. He cited the following assumptions as being used in the re-creation of the topographic conditions of the map: 1) presence of the Buffer Creek Drainage; 2) a topographic survey of the area prepared by PLC, dated 12/13/02; 3) a USGS topographic map dated 1950 (Minturn, CO. Quadrangle); 4) the topographic condition of the setback areas of adjoining properties; 5) locations and heights of retaining walls in the area; 6) the presence of mature and undisturbed vegetation; 7) visual site inspections of the area; & 8) economic considerations and factors in the 1970's. Page 2 Attachment: E MEMORANDUM TO: Planning and Environmental Commission FROM: Community Development Department DATE: April 10, 2006 SUBJECT: A request for a final review of a variance from :Density Control, and Section 12- 60-9, and Site Coverage, pursuant to Chapter 12=17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley. Drive/Lot 18, Block 3, Vail Village Filing 1, and setting forth details in regard :thereto. ~(PEC06- 0017) Applicant.: Robert Stephenson, Jr., represented by Snowdon & Hopkins Architects , Planner: Bill Gibson I. SUMMARY The applicant, Robert Stephenson, Jr., represented by Snowdon .& Hopkins Architects, are requesting a variance from Section 12-6C-8, Density Control, and Section 12-6C-9, Site Coverage, pursuant to Chapter 12-17, .Variances, Vail Town Code, to allow for a. residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1. ;:Based upon Staff's review _of the criteria in Section VIII of this ...memorandum and the .evidence and -testimony presented, the Community Development .:bepartment recommends denial of the site coverage variance request and denial of the GRFA variance request subject to the findings noted iri Section IX of this memorandum. II. .DESCRIPTION OF REQUEST The applicant, Robert Stephenson, Jr., represented by Snowdon & Hopkins Architects, is proposing to construct a new entry and elevator addition to Unit 18A. The applicant is requesting a GRFA variance for an additional 320 sq. ft. (the structure currently exceeds the allowable GRFA limits), and a site coverage variance for an additional 144 sq. ft. The .applicant's revised architectural drawings have been attached for reference (Attachment A). III. BACKGROUND This two-family residence was originally approved by the Design Review Board in 1976 and construction was completed in 1978. The original approved architectural plans blend the overlapping garage level (finished floor elevation 8267') and the mechanical level (finished floor elevation 8277') into one "basement plan" even though these levels are separated by a floor-to-floor measurement of 10 feet. According to the Town of Vail's records, this structure was originally allowed 5,261 sq. ft. of GRFA. However, 5,491 sq. ft. of GRFA was constructed and a final certificate. of occupancy was issued. Therefore, in 1978 this structure exceeded the allowable GRFA by 230 sq. ft. It is unclear how the GRFA was calculated for this structure at that time. At some point in time a party wall was constructed to separate the garage level parking spaces, and a portion of the garage level located directly below the storage room on the mechanical level was converted from a parking space into a storage room (i.e. GRFA). On June 24, 1991, the Planning and Environmental Commission approved a front setback variance to allow for the construction of an additional garage.bay to the east of the existing garages. This proposed garage encroached 12.5 feet into the 20 foot setback; however, this addition was never constructed. Even though the Town's GRFA regulations had been amended several times since 1978, GRFA calculations were not done at the time of this variance approval. In 1999, allowed and existing GRFA calculations were conducted. According .to Town of Vail records, the allowable GRFA in 1999 for this lot was 5,205 sq. ft., plus each unit was eligible for one "250 Addition" for a total of 5,705 sq. ft. However, the existing GRFA calculations (including a "250 Addition" for the Schofield residence) were 6,393 sq. ft. Therefore in 1999, this structure exceeded the allowable GRFA calculations by 1,188. sq. ft. and 688 sq. ft. when two "250 Additions" were included in the calculations.. It :is unclear how the GRFA was calculated in 1999, but it appears that no portion of the garage level or mechanical level (shown on a single "basement plan" drawing) was counted as GRFA; even though the entire mechanical level qualified as GRFA and the unapproved garage level storage room also qualified as GRFA. Recalculating the garage and mechanical levels using 1999 GRFA methods, the structure has 7,500 sq: ft. , of GRFA. Therefore, in 1999 this structure exceeded the allowable GRFA~(plus two "250 Additions") by 1,795 sq. ft. In 2004, the Town's GRFA regulations were again amended. Under these new regulations, this property is now allowed 7,286 sq. ft. of GRFA. The existing structure, including the appropriate portions of the garage level and the appropriate portions of the mechanical level, has 8,801 sq. ft. of GRFA. The existing structure exceeds today's allowable GRFA by 1,515 sq. ft. The applicant is currently proposing to add an additional 466 ~sq. ft. of bedroom, entry, and elevator GRFA, thus proposing to exceed the current GRFA limits by 1,981 sq. ft. (approximately 27%). On July 25, 2005, the Planning and Environmental Commission approved setback, GRFA, and site coverage variances to construct a garage addition and widen the driveway for Units 18A (Stephenson) and 18B (Schofield); plus construct a new entry, elevator addition and a new exterior stair case for Unit 18A. At its August 2, 2005, public hearing the Vail Town Council "called-up" this Planning and Environmental Commission decision. On September 6, 2005, the Town Council upheld the Commission's approval of a setback variance to accommodate the construction of the proposed garage addition. However, Council overturned the Commission's approval of a GRFA and site coverage variance to accommodate the construction of the entry and elevator additions. IV. ROLES OF REVIEWING BODIES Order of Review: Generally, variance applications will be reviewed by the Planning and Environmental Commission, and then any accompanying design review application will be reviewed by the Design Review Board. 2 Planning and Environmental Commission: The Planning and Environmental Commission is responsible for final approval, approval with modifications, or denial of a variance application, in accordance with Chapter 12-17, Variances, Vail Town Code. Design Review Board:. The Design Review Board has no review authority over a variance application. However, the Design Review Board is responsible for the final approval, approval with .modifications, or denial of any accompanying design review application: Town Council: The Town Council has the authority to hear and decide appeals from any decision, determination, or interpretation by the Planning and Environmental Commission and/or Design Review Board. The Town Council may also call up a decision of the Planning and Environmental Commission and/or Design. Review Board. Staff: The Town Staff facilitates the application .review process. Staff reviews the submitted application materials for completeness and general compliance with the appropriate requirements of the Town Code. Staff also provides the Planning and Environmental Commission a memorandum containing a.description and background of the application; an evaluation of the application in regard to the criteria and findings outlined by the Town Code; and a recommendation of approval, approval with modifications, or denial. V. APPLICABLE PLANNING DOCUMENTS . Staff believes that the following provisions of the Vail Town Code are relevant to the review of this proposal: TITLE 12: ZONING REGULATIONS Article 12-6C: Two-Family Residential (R) District (in part) 12-6C-1: PURPOSE: The two-family residential district is intended to provide sites for low density single-family or two-family residential uses, together with such public facilities as may be appropriately located in the same district. The two-family residential district is intended to ensure adequate light, air, privacy and open space for each dwelling, commensurate with sirigle- familyand two-family occupancy, and to maintain the desirable residential qualities of such sites by establishing appropriate site development standards. 12-6C-8: DENSITY CONTROL: A. Dwelling Units: Not more than a total of two (2) dwelling units shall be permitted on each site with only one dwelling unit permitted on existing lots less than fourteen thousand (14,000) square feet. B. Gross Residential Floor Area: 3 1. The following gross residential floor area (GRFA) shall be permitted on each site: a. Not more than forty six (46) square feet of gross residential floor area (GRFA) for each one hundred (100) square feet of the first ten thousand (10,000) square feet of site area; plus b. Thirty eight (38) square feet of gross residential floor area (GRFA) for each one hundred (100) square feet of site area over ten thousand (10,000) square feet, not exceeding fifteen thousand (15,000) square feet of site area; plus c. Thirteen (13) square feet of gross residential floor area (GRFA) for each one hundred (100) square feet of site area over fifteen thousand (15,000) square feet, not exceeding thirty thousand (30,000) square feet of site area; plus d. Six (6) square feet of gross residential floor area (GRFA) for each one hundred (100) square feet of site area in excess of thirty thousand (30,000) square feet. 12-6C-9: SITE COVERAGE: Site coverage shall not exceed twenty percent (20%) of the total site area Chapter 12-17: Variances (in part) 12-17-1: Purpose: r' :A. `Reasons for Seeking Variance: In order to prevent or to lessen such.practical ' difficulties and unnecessary physical hardships inconsistent with.the objectives of this :title as would result from strict or literal interpretation and enforcement, ..variances from certain regulations may be granted. A practical difficulty or unnecessary physical hardship may result from the size, shape, or dimensions of a site or the location of existing structures thereon; from topographic or physical conditions on the site or in the immediate vicinity; or from other physical 'limitations, street' locations or conditions in the immediate vicinity. Cost or inconvenience to the applicant of strict or literal compliance with a regulation shall not be a reason for granting a variance. VI. SITE ANALYSIS Address: Legal Description: Zoning: :.Land Use Plan Designation: Current Land Use: Lot Size: Standard Setbacks (min): Front: Sides Rear: Height (max.): 1448 Vail Valley Drive Lot 18, Block 3, Vail Valley Filing 1 Two-Family Residential Low Density Residential Two-Family Dwelling 21,045 sq. ft. (0.48 acres) Allowed/Required Existing 20 ft. 20 ft. 15 ft. 29 ft./ 21 ft 15 ft. 53 ft. 30 ft./33 ft. Proposed 17.5 ft. 22 ft./ 21 ft. no change 4 VII. VIII. Density (max): GRFA (max): Site coverage (max.): 2 dwellings 2 dwellings 7,286 sq. ft. 8,806 sq. ft. 4,209 sq. ft. '4,194 sq. ft. no change 9,126 sq. ft. (+320 sq. ft.) 4,338 sq. ft. (+144 sq. ft.) .SURROUNDING LAND USES AND ZONING Land Use North:. Residential South: Mixed Use East: Residential West: Residential CRITERIA AND FINDINGS Zonin4 Two-Family Residential N/A (White River National Forest) Two-Family Residential Two-Family Residential The review criteria for a request of this nature are established .by Chapter 12-16, Vail Town Code. A. Consideration of Factors Regarding Variances: The relationship of .the requested variance to other existing or potential uses and structures in the vicinity. This proposed addition is associated with a remodel of an existing legally .non-conforming residence. The applicant is requesting a site :coverage variance for an additional 144 sq. ft. and a GRFA variance to'allow an additional 320 sq. ft. Since the structure is already :non-conforming, -Staff does not believe the proposed GRFA variance request and site coverage request are in keeping with the bulk/mass and .general character of the neighboring properties. 2. The degree to which relief from the strict and literal -interpretation and enforcement. of a specified regulation is necessary to achieve compatibility and uniformity of treatment among .sites in the vicinity or to attain the objectives of this title without a grant of special privilege.. This existing residence currently exceeds the allowable site coverage and GRFA for the site. The applicant is proposing the addition of a new entry and elevator that will further increase the non-conformity of this property. Staff does not believe deviations from the site coverage and GRFA regulations to this degree are in keeping with the bulk/mass and general character of the Two-Family zone district. Therefore, Staff does not believe the proposed site coverage and GRFA variance requests are in keeping with the bulk/mass and general character of the neighboring properties. 3. The effect of the requested variance on light and air, distribution of population, transportation and traffic facilities, public facilities and utilities, and public safety. Staff does not believe this proposal will have a significant impact on the public health, safety or welfare, public facilities, utilities, or light and, air in comparison to existing conditions of the-site. 4. Such other factors and criteria as the commission deems applicable to the proposed variance. B. The Planning and Environmental Commission shall make the followina findinas before granting a variance: 1. That the granting of the variance will not constitute a grant of special privilege inconsistent with the limitations on other properties classified in the same district. 2. That the granting of the variance will not be detrimental to the public health, safety or welfare, or materially injurious to properties or improvements in the vicinity. 3. That the variance is warranted for one or more.of the following reasons: a. The strict literal interpretation or enforcement of the specified regulation would result in practical difficulty or unnecessary physical hardship inconsistent with the objectives of this title. b. There are exceptions or extraordinary circumstances or conditions applicable to the same site of the variance that do not apply generally to other properties in the same zone. c. The strict interpretation or enforcement of the specified regulation would deprive the applicant of privileges enjoyed by the owners of other properties in the same district. IX. STAFF RECOMMENDATION Site Coveraae Variance The Community Development Department recommends denial of a variance from Section 12-6C-9, Site Coverage, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1, and setting forth details in regard thereto. This recommendation is based upon the review of the criteria in Section VIII of this memorandum and the evidence and testimony presented. Should the Planning and Environmental Commission choose to approve this variance request, the Community Development Department recommends the Commission pass the following motion: The .Planning and Environmental Commission denies the applicant's request for a variance from Section 12-6C-9, Site Coverage, pursuant to Chapter 12- 17, Variances, Vail Town Code, to allow for a residential garage addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1, and setting for details in regard thereto. 6 Should the,Planning and Environmental Commission choose to deny this variance request, the Community Development Department recommends the Commission makes the following findings: The Planning and Environmental Commission finds: 1. The granting of this variance will constitute a granting of special privilege inconsistent with the limitations on other properties classified in the' Two-Family Residential District. 2. The granting of this variance will not be detrimental to the public health, safety, or welfare, or materially injurious to properties or improvements in the vicinity. 3. This variance is warranted for the following reasons: a. The strict literal interpretation or enforcement of the specified regulation would not result in practical difficulty or unnecessary physical hardship inconsistent with the objectives of Title 12, Zoning Regulations, Vail Town Code. b. There are no exceptions or extraordinary circumstances or conditions applicable to the same site of the variance that do not apply generally to other properties in the same district. c.. The strict interpretation or enforcement of .the specified regulation would not deprive the applicant of privileges enjoyed by the owners of other properties in the same district. Density Control Variance The Community Development Department recommends denial of a variance from Section 12-6C-8, Density Control, pursuant to Chapter 12-17, Variances, Vail Town Code, to allow for a residential addition, located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Village Filing 1, and setting forth details in regard thereto. This recommendation is based upon the ,review of the criteria in Section VIII of this memorandum and the evidence and testimony presented. Should the Planning and Environmental Commission choose to approve this variance request, the Community Development Department recommends the Commission pass the following motion: The Planning and Environmental Commission denies the applicant's request for a variance from Section 12-6C-8, Density Control, pursuant to Chapter 12- 17, Variances, Vail Town Code, to allow for a residential garage addition, located at 1448 Vail Valley Drive/Lot 18, .Block 3, Vail Village Filing 1, and setting forth details in regard thereto. Should the Planning and Environmental Commission choose to deny this variance request, the Community Development Department recommends the Commission makes the following findings: 7 The Planning and Environmental Commission finds: 1. The granting of this variance will constitute a granting of special privilege inconsistent with the limitations on other properties classified in the Two-Family Residential District. 2. The granting of this variance will not be detrimental to the public health, safety, or welfare, or materially injurious to properties or improvements in the vicinity. 3. This variance is warranted for the following reasons: a. The strict literal interpretation or enforcement of the specified regulation would not result in practical difficulty or unnecessary physical hardship inconsistent with the objectives of Title 12, Zoning Regulations, Vail Town Code. b. There are no exceptions or extraordinary circumstances or conditions applicable to the same site of the variance that do not apply generally to other properties in the same district. c. The strict interpretation or enforcement of the specified regulation would not deprive the applicant of .privileges enjoyed by the owners of other properties in the same district. X.:ATTACHMENTS ;A. Vicinity Map B. Applicant's Request C. . Site Photographs D. Architectural Plans E. . Public Notice 8 ® This map was ueated by the Town o! Vait GIS Department Use of this map should be (or general purposes only. 50 0 50 Feel The Town o(Vail does not warrant the accuracy o(the information contained herein. (parcel line work is approximate) NORTH _ -_ - ~ Attachment: B ~. ~,,.,~,or.e..~.., _.. _ .._ ..- ~. -.._ ._.. , _-. ~. s.u6._ _ 2`~' wpm . .~ ~ ~ ~D ~~~~~ ~ a~vt ~ ~u~%~kou _`~Gt~~ duplex i~g bu~l~ r,~ 1a1~ . _ _ __ Get 2~r~ a ~~ ~c~~~ r,~r,Yl ~v _Lz~ ~~ w,s~i Q a..~ a,Ytaun.~ _u~sq~ ~ar,,~d ~a~ QX~t~c~~~~~~~v l~A~a~_CPavl~ (s/~q~ ~D ~j l~T~~~~ . s~ PO Box 3340 Vail, Colorado 81658 Phone: 970-476-2201 Fax: 970-476-7491 I; i. Attachment: C r .,0~ a`y,r.. .~.... ~.: j~ ~. '~ J PVi.. 6~ ". `t~ ~ f ~~ ~ y ~~~, ~} 1~ AR' 1 ,~}~~ ~ ..^,} t? ~1~ti .r-:J ~ q ~ w -'.y ( ?.~ . F 4T. ~ m ,~ ~~_. 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Cr".,.t~,.i_-> _ o P \/1 1~ ;\ ~, . . ~ ~ 509~0'21'E.-.110.00' - -~ .._ ;. i UN,PLATTED .... , f~ E~~' -~ CURVE'TABLE ~ ~ ~ ~. of I~ - ~ ..'s .r, ~ ~ - cJms>: ~ D s ~ ItRCnI r DFwI :.aaro ~ fiuawD Iriu L ~ u o n' m ~ .,, o ,_?IC 11icr, . . . 1 n , `.;1._tls ~~ SITE COVERAGE uNlf SQUARE FEET ACRES PERCENTAGE laA .04 z le.v z ~ ~ . 1 1 I 19 03 f. rt uN1T ~ DRIVEWAY - - ~/ S L ' 14fi 1. 1 410 L - ~ ~ TOPOGRAPHIC MAP k ILC ~ IMPROVEHENT LOCATION CERTIFICATE ' ~ ~ ~ ~ LOT 10A, LO7 IBB, PARCEL 10C, BLOCK O VAII, VALLEY F1RST FILH7G ' EAGLE COUNTY,.COLORADO DMMt [ItS ~ REtit[Mn: Be ~ ' SHEET 1 of 1 D4iL DS/Jt/DS PLC roB/:1 JB2 Attachment: E t~~ ~~ ~+k ~- THIS ITEM MAPUBL C NOTICER PROPERTY NOTICE IS HEREBY GIVEN that the Planning and Environmental Commission of the Town of Vail will hold a public hearing in accordance with section 12-3-6, Vail Town Code, on April 10, 2006, at 2:00 pm in the Town of Vail Municipal Building, in consideration of: A request for a final review of a variance, from Section 12-6D-6, Setbacks, Vail Town Code, pursuant to Chapter 12-17, Variances, to allow for a new single family residence within the front and side setbacks, located at 1740 Sierra Trail/Lot 22, Vail Village West Filing 1, and setting forth details in regard thereto. (PEC06-0015) Applicant: Lois Solis, represented by Michael Suman Architect Planner: Matt Gennett A request for a final review of a minor exterior alteration, pursuant to Section 12-7B-7, Exterior Alterations or Modifications, Vail Town Code, for the addition of enclosed floor area, located at 193 East Gore Creek Drive/Lot 5B, Block 5, Vail Village Filing 1, (Gore Creek Plaza Building), and setting forth details in regard thereto. (PEC06-0018) Applicant: Gore Creek Plaza Condominium Association; represented by Fritzlen Pierce Architects Planner: Elisabeth Eckel A request for a final review of a variance, from Section 12-6C-8, Density Control and ~~ Section 12-6D-6, Setbacks, Vail Town Code, to allow fora residential addition (garage, Y'~~~ v entry, and elevator), located at 1448 Vail Valley Drive/Lot 18, Block 3, Vail Valley Filing 3~ f, 1, and setting forth details in regard thereto. (PEC06-0017) Applicant: Robert Stephenson, Jr., represented by Snowdon Hopkins Architects Planner: Bill Gibson A request for final review of an appeal of an administrative action, pursuant to Section 12-3-3, Appeals, Vail Town Code, appealing a staff determination that an observatory is not an architectural feature allowed to extend above the building height limit, 1979 Sunburst Drive/Lot 12, Vail Valley Filing 3, and setting forth details in regard thereto. (PRJ05-0417) Applicant: Ned Gwathmey and Todd Kramer; Gwathrriey, Pratt, Shultz Architects Planner: Bill Gibson The applications and information about the proposals are available for public inspection during office hours at the Town of Vail Community Development Department, 75 South Frontage Road. The public is invited to attend project orientation and the site visits that precede the public hearing in the Town of Vail Community Development Department. Please call 970-479-2138 for additional information. Sign language interpretation is available upon request, with 24-hour notification. Please call 970-479-2356, Telephone for the Hearing Impaired, for information. Published March 24, 2006, in the Vail Daily. ORDINANCE NO. 16 SERIES 2006 AN ORDINANCE REPEALING ORDINANCE NO. 5, SERIES 2006, AN ORDINANCE ESTABLISHING SPECIAL DEVELOPMENT DISTRICT N0.39, CROSSROADS, PURSUANT TO ARTICLE A, SPECIAL DEVELOPMENT (SDD) DISTRICT, CHAPTER 9, TITLE 12, ZONING TITLE, TOWN CODE OF VAIL, AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, the Town of Vail, in the County of Eagle and State of Colorado (the "Town"), is a home rule municipal corporation duly organized and existing under laws of the State of Colorado and the Town Charter (the "Charter"); and WHEREAS, the members of the Town Council of the Town (the "Council") have been duly elected and qualified; and WHEREAS, on March 21, 2006, the Council adopted Ordinance No. 5, Series of 2006, an ordinance establishing Special Development District No. 39, Crossroads, Pursuant to Article A, Special Development (SDD) District, Chapter 9, Title 12, Zoning Title, Town Code of Vail, and setting forth details in regard thereto (the "Crossroads Ordinance"); and WHEREAS, on April 27, 2006, and pursuant to Section 5.4 of the Charter, the Town Clerk certified as SUFFCIENT a referendum petition seeking reconsideration of the Council's adoption of the Crossroads Ordinance, and if not so repealed upon reconsideration, that it be approved or rejected at a Town election; pursuant to Article V of the Charter; and WHEREAS, pursuant to Section 5.6(a) of the Charter, when a referendum petition has been finally determined sufficient the Council shall promptly reconsider the referred ordinance by voting its repeal. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO THAT: Section 1. Ordinance No. 5, Series 2006, an ordinance establishing Special Development District No. 39, Crossroads, Pursuant to Article A, Special Development (SDD) District, Chapter 9, Title 12, Zoning Title, Town Code of Vail, and setting forth details in regard thereto, is hereby repealed in its entirety. Ordinance 16, Series of 2006 1 Section 3. If any part, section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be' invalid, such decision shall not affect the validity of the remaining portions of this ordinance; and the Town Council hereby declares it would have passed this ordinance, and each part, section, subsection, sentence, clause or phrase thereof, regardless of the fact that any one or more parts, sections, subsections, sentences, clauses or phrases be declared invalid. Section 4. The Town Council hereby finds, determines, and declares that this ordinance is necessary and proper for the health, safety, and: welfare of the Town of Vail and the inhabitants thereof. Section 5. All bylaws, orders, resolutions, and ordinances, or parts thereof, inconsistent herewith are repealed to the extent only of such inconsistency. This repealer shall not be construed to revise any .bylaw, order, resolution, or ordinance, or part thereof, theretofore repealed. Section 6. This ordinance, as adopted by the Town Council, shall be numbered and recorded by the Town Clerk in the official records of the Town. The adoption and publication shall be authenticated by the signatures of the Mayor, or Mayor Pro Tem, and Town Clerk, and by the certificate of publication. Section 7. This ordinance shall be in full force and effect five days after publication following final passage. INTRODUCED, READ, APPROVED AND ORDERED PUBLISHED ONCE IN FULL ON FIRST READING this 6th day of June, 2006 and a public hearing shall be held on this Ordinance on the 20th day of June, 2006, at 6:00 p.m. in the Council Chambers of the Vail Municipal Building, Vail, Colorado. Rodney Slifer, Mayor ATTEST:. Lorelei Donaldson, Town Clerk Ordinance 16, Series of 2006 2 ~r RESOLUTION N0.9 Series of 2006 A RESOLUTION CALLING. A SPECIAL ELECTION IN THE TOWN OF VAIL, COLORADO CONCERNING ORDINANCE NO. 5, SERIES OF 2006, AN ORDINANCE ESTABLISHING SPECIAL DEVELOPMENT DISTRICT NO. 39, CROSSROADS, PURSUANT TO ARTICLE A, SPECIAL DEVELOPMENT (SDD) DISTRICT, CHAPTER 9, TITLE 12, ZONING TITLE, TOWN CODE OF VAIL, AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, the Town of Vail, in the County of Eagle and State of Colorado (the "Town"), is a home rule municipal corporation duly organized and existing under laws of the State of Colorado and the Town Charter (the "Charter"); and WHEREAS, the members of the Town Council of the Town (the "Council") have been duly elected and qualified; and WHEREAS, on March 21, 2006, the Council adopted Ordinance No. 5, Series of 2006, an ordinance establishing Special Development District No. 39, Crossroads, Pursuant to Article A,. Special Development (SDD) District, Chapter 9, Title 12, Zoning Title, .Town Code of Vail, and setting forth details in regard thereto (the "Crossroads Ordinance"); and WHEREAS, on April 27, 2006, and pursuant to Section 5.4 of the Charter, the Town Clerk certified as SUFFICIENT a referendum petition seeking reconsideration of the Council's adoption of the Crossroads Ordinance, and if not so repealed upon reconsideration, that it be approved or rejected at a Town election, pursuant to Article V of the Charter; and WHEREAS, the Council has failed to repeal the Crossroads Ordinance as required by the Charter; and WHEREAS, based upon the Council's failure to repeal the Crossroads Ordinance, it is now necessary for the Council to set a special election, as set forth in Section 5.6(b) of the Charter; and WHEREAS, pursuant to the Colorado Municipal Election Code, specifically C.R.S. § 31-10-108, special elections may not be held within the 32 days before or after the date of a primary election; and WHEREAS, there is a primary election scheduled for August 8, 2006, but Eagle County has declined a request from the Town to coordinate the Town's special election with the primary election; and Resolution No. 9, Series of 2006 t` WHEREAS, because of the time limitations of Article V of the Charter, the Town Council has no choice but to set the Town's special election within the 32 days prior to the August 8, 2006 primary election; and WHEREAS, the Town, as a home rule municipality organized and existing under Article XX of the Colorado Constitution, is bound by the terms of its home rule charter when its charter conflicts with a state statute on an issue of purely local concern; and WHEREAS, a local referendum election is an issue of purely local concern; and WHEREAS, the Town Council finds and determines that the provisions of Article V of the Charter conflict with C.R.S. § 31-10-108; and WHEREAS, the Town Council finds and determines that Article V of the Charter supersedes the conflicting provisions of C.R.S. § 31-10-108, and therefore, the Town's special election must be scheduled for July 11, 2006. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO: Section 1. Pursuant to Section 5.6(a) of the Charter, the Council hereby determines that a special election shall be held on July 11, . 2006, atwhich there shall be submitted to the registered electors of the Town the question set forth in Section 2 hereof. The special election shall be conducted as a polling place election. Section 2. The ballot title and text for the measure being referred to the voters by this Resolution shall read as follows: Question 1. Shall Ordinance No. 5, Series 2006, an Ordinance Establishing Special Development District No. 39, Crossroads, to Facilitate the Redevelopment of an Existing Mixed Use Development in the Town of Vail, take effect? Section 3. The Council hereby appoints the Town Clerk as the designated election official for purposes of the special election and all powers and authority granted to the Council may be exercised by the designated election official, including but not limited to the power to appoint election judges. Resolution No. 9, Series of 2006 2 ` f Section 4. If a majority of the votes cast on Question 1 are in favor of Question 1, Ordinance No. 5, Series of 2006 shall take effect upon certification of the election results. If a majority of the votes cast on Question 1 are against Question 1, Ordinance No. 5, Series 2006 shall be considered repealed upon certification of the election results. Section 5. The officers of the Town are hereby authorized and directed to take all action necessary or appropriate to effectuate the provisions of this Resolution. Section 6. If any section, paragraph, clause or provision of this resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall in no manner affect any remaining provisions of this resolution, the intent being that the same are severable. Section 7. All resolutions or parts of resolutions inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any resolution or part of any resolution heretofore repealed. INTRODUCED, READ, APPROVED AND ADOPTED this 6th day of June, 2006. Rodney E. Slifer, Mayor ATTEST: Lorelei Donaldson, Town Clerk Town of Vail, Colorado Resolution No. 9, Series of 2006 MEMORANDUM TO: Town Council FROM: Community Development Department DATE: June 6, 2006 SUBJECT: Ordinance No. 17, Series of 2006, an ordinance amending Section 12-21- 14E, Restrictions in Specific Zones on Excessive Slopes, Vail Town Code, pursuant to Section. 12-3-7, Amendments, Vail Town Code, to allow for an amendment to increase the amount of allowable site coverage on lots with excessive slopes, from a maximum of 15% to a maximum of 20%, and setting forth details in regard thereto. Applicant: Helmut Reiss, represented by Steve Isom Planner: Matt Gennett DESCRIPTION OF THE REQUEST The applicant, Helmut Reiss, is requesting to amend Section 12-21-14E, Restrictions in Specific Zones on Excessive Slopes, Vail Town Code, which further restricts site coverage on lots with average slopes in excess of 30% within four of the nine residential zone districts established in Chapter 12-6, Residential Districts, Vail Town Code, to a maximum of 15% of the total site area, instead of the standard 20% maximum. The rationale behind the applicant's request is to allow for greater flexibility in the design and construction of residences on steep hillsides. II. BACKGROUND On April 24, 2006, the Planning and Environmental Commission (PEC) conducted a work session during which staff was directed to draft changes to their recommended,' modified version of the applicant's proposed text amendment. On May 8, 2006, the PEC recommended approval of the proposed text amendment to the Vail Town Council, as modified by staff. III. STAFF RECOMMENDATION The Community Development Department recommends that the Town Council approves Ordinance No. 17, Series of 2006, on first reading to amend Section 12-21-14E, Vail Town Code, to allow the maximum site coverage to increase from 15% to 20% in specific zones on excessive slopes, but with a maximum of 60% site disturbance, and setting for details in regard thereto. Staff's recommendation is based upon the review of the criteria noted in Section IV of the May. 8, 2006, .staff memorandum (Attachment B) and the evidence and testimony presented. 1 Should the Vail Town Council choose to approve Ordinance No. 17, Series of 2006, on first reading, the Community Development Department recommends the Town Council makes the following findings: 1. That the amendment is consistent with the applicable elements of the adopted goals, objectives and policies outlined in the Vail Comprehensive Plan and is compatible with the development objectives of the Town; and 2. That the amendment furthers the general and specific purposes of the Zoning Regulations; and 3. That the amendment promotes the health, safety, morals, and general welfare of the Town and promotes the coordinated and harmonious development of the Town in a manner that conserves and enhances its natural environment and its established character as a resort and residential community of the highest quality. IV. ATTACHMENTS Attachment A: Ordinance No. 17, Series of 2006 Attachment B: Staff Memorandum from the May 8, 2006, PEC Hearing 2 Attachment: A ORDINANCE NO. 17 Series of 2006 AN ORDINANCE AMEN-DING SECTION 12-21-14E, RESTRICTIONS IN SPECIFIC ZONES ON EXCESSIVE SLOPES, VAIL TOWN CODE, PURSUANT TO SECTION 12-3-7, AMENDMENTS, VAIL TOWN CODE, TO ALLOW FOR AN AMENDMENT TO INCREASE THE AMOUNT OF ALLOWABLE SITE COVERAGE ON LOTS WITH EXCESSIVE SLOPES, FROM A MAXMIMUM OF 15% TO A MAXIMUM OF 20%, AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, text amendments are permitted pursuant to parameters set forth for such in Section 12-3-7, Vail Town Code; and WHEREAS, the Planning and Environmental Commission of the Town of.Vail held public hearings on April 24, 2006, and again on May 8, 2006, following which the Commission forwarded a recommendation of approval with staff's recommended modifications to the Vail Town Council based on the criteria and findings presented in the staff memorandum; and WHEREAS, staff is recommending additional text amendments, found in Section 1 of this ordinance, as a result of the analysis performed for the original text amendment request submitted by the applicant; and WHEREAS, the third Guideline under Section 12-11-1, Vail Town Code, states the following intent: "prevent the unnecessary destruction or blighting of the natural landscape"; and WHEREAS, the Town Council finds that the proposed text amendment furthers the general and specific purposes of the Zoning Regulations; implements and achieves the applicable elements of the adopted goals, objectives, and policies outlined in the Vail Comprehensive Plan and is compatible with the development objectives of the Town; demonstrates how conditions have substantially changed since the adoption of the subject regulation and how the existing regulation is no longer appropriate; and provides a harmonious, convenient, workable relationship among land use regulations consistent with municipal development objectives; and WHEREAS, the Vail Town Council finds it in the interest of the public health, safety, and welfare to adopt this amendment to the Vail Town Code. Ordinance No. 17, Series 2006 ~ NOW, THEREFORE, BE IT ORDAINED BYTHE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO, THAT: Section 1. The proposed text amendments areas follows: (Deletions are shown in s#il`° +la/additions are shown bold) Section 12-21-14E: RESTRICTIONS IN SPECIFICZONES ON EXCESSIVE SLOPES: ~Alr.+ m~ro +h~r, fiF+c~ ~~+ /~ ~°%\ i.f+ho ci+~Tea~'1°~~ h ~ nvvPe~~:t!-lit~p,~ r ~6p,>+ i n~i~ n r ~ n+i rvRV r~t T" m e I G n l b o "~ef~ ` eFGeR - ^ 6~ r & F7~ ~e-6 e1' ~ ~ - - r y-p r~cv ~vrv r rv , cc er c cr~ vic c y rm~ ~1. Not more than ten percent (10%) of the total site area may be covered by driveways and surface parking. 2. In order to protect the natural land form and vegetation on steep slopes, not more than sixty percent (60%) of the total site area may be disturbed from present conditions by construction activities. The Design Review Board (DRB) may approve site disturbance in excess of the sixty percent (60%) maximum if specific design criteria warrant the extent of the requested deviation. Section 2. If any part, section, subsection, sentence, clause or phrase ofthis ordinance is for any reason held to be invalid, such decision shall not effect the validity of the remaining portions of this ordinance; and the Town Council hereby declares it would have passed this ordinance, and each part, section, subsection, sentence, clause or phrase thereof regardless of the fact that any one or more parts, sections, subsections, sentences, clauses or phrases be declared invalid. Section 3. The Town Council hereby finds, determines and declares that this Ordinance No. 17, Series 2006 2 ordinance is necessary and proper for the health, safety and welfare of the Town of Vail and the inhabitants thereof. Section 4. The amendment of any provision of the Vail Town Code as provided in this ordinance shall not affect any right which has accrued, any duty imposed, any violation that occurred prior to the effective date hereof, any prosecution commenced, nor anyother action or proceeding as commenced under or byvirtue of the provision amended. The amendment of any provision hereby shall not revive any provision or any ordinance previously repealed or superseded unless expressly stated herein. Section 5. All bylaws, orders, resolutions and ordinances, or parts thereo# inconsistent herewith are repealed to the e~dent only of such inconsistency. This repealer shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof theretofore repealed. INTRODUCED, READ ON FIRST READING, APPROVED, AND ORDERED PUBLISHED ONCE IN FULL ON FIRST READING this 6th day of June, 2006 and a public hearing for second reading of this Ordinance set for the 20th day of June, 2006, in the Council Chambers of the Vail Municipal Building, Vail, Colorado. Rodney E. Slifer, Mayor ATTEST: Lorelei Donaldson, Town Clerk Ordinance No. 17, Series 2006 3 Attachment: B MEMORANDUM TO: Planning and Environmental Commission FROM: Department of Community Development DATE: May 8, 2006 SUBJECT: A request for a final review of a text amendment, pursuant to. Section 12-3-7, Amendments, Vail Town Code, to allow for an amendment to Section 12-21-14, Restrictions in Specific Zones on Excessive Slopes, Vail Town Code, to increase the amount of allowable site coverage on lots with excessive slopes from 15% to 20%, and setting forth details in regard thereto. (PEC06-0020) Applicant: Helmut Reiss, represented by Isom & Associates Planner: Matt Gennett I. SUMMARY The applicant, Helmut Reiss, is requesting to amend Section 12-21-14, Restrictions in Specific Zones on Excessive Slopes, Vail Town Code, which further restricts site coverage on lots with average slopes in excess of 30% within four of the nine residential zone districts established in Chapter 12-6, Residential Districts, Vail Town Code, to a maximum of 15% of the total site area, instead of the standard 20% maximum. The .rationale behind the applicant's request is to allow for greater flexibility in the design and construction of residences on steep hillsides (Attachment A). Based upon staff's review of the criteria in Section IV of this memorandum, grid further analysis into site disturbance related to residential development- (Attachment B), the Community Development Department recommends that the Planning and Environmental Commission forwards a recommendation of approval with modifications to the Vail Town Council, subject to the findings noted in Section V of this memorandum. II. DESCRIPTION OF THE REQUEST The applicant, Helmet Reiss, represented by Isom & Associates, is proposing a text amendment to Section 12-21-14.E.1, Restriction in Specific Zones on Excessive Slopes, Vail Town Code, to increase the allowable site coverage from 15% to 20% in the zone districts: Hillside Residential (HS), Single Family Residential (SFR), Two-Family Residential (R), and Two-Family Primary Secondary Residential (P/S), as specified by 12-21-14. E.1. The proposed text amendment is as follows: (deletions are shown in c+riLo +hrni,nh/additions are shown bold) + mnro .-.n fif+een ce~t a T6~ the$i~e-area ~i3~c i vT . ~ ~ a ~' h„ h ~ i i L+ i n n e ex~e t~n~~ l € ~6 ee n sfi en~a^ T --r ' ° ~ seven ~ ~ a p p c eFGeR~ n o~ ~ . tweR~ ,f +h e~lie ~Fea- FY~' f~ e~sa ~ered , , y-~ ~ o 2-1. Not more than ten percent (10%) of the total site area may be covered by driveways and surface parking.. III. BACKGROUND IV. On April 24, 2006, the Planning and Environmental Commission (PEC) conducted a work session during which staff was directed to draft changes to their suggested modified version of the applicant's proposed text amendment. The minutes of the April 24, 2006, Planning and Environmental hearing are attached to this memorandum (Attachment C) and staff's suggested modification to the applicant's requested amendment is stated in Section V of this memorandum. CRITERIA The review criteria and factors for consideration for a request of a text amendment are established in accordance with the provisions of Chapter 12-3, Vail Town Code. 1. The extent to which the text amendment furthers the general and specific purposes of the Zoning Regulations; and, Staff believes the proposed text amendment, as submitted, does not further the general and specific purposes of Title 12, Zoning Regulations. However, with the modifications to the applicant's requested amendment as proposed by staff in Section V of this memorandum, the general and specific purposes of Title 12 are furthered. ..According to Section 12-1-2, Purpose, Vail Town Code, the general and specific purposes of the Zoning Regulations are as follows: A. General: These regulations are enacted for the purpose of promoting the health, safety, morals, and general welfare of the Town, and to promote the coordinated and harmonious development of the Town in a manner that will conserve and enhance its natural environment and its established character as a resort and residential community of high quality. 8. Specific: These regulations are intended to achieve the following more specific purposes: 1. To provide for adequate light, air, sanitation, drainage, and public facilities. 2. To secure safety from fire, panic, flood, avalanche, accumulation of snow, and other dangerous conditions. 3. To promote safe and efficient pedestrian and vehicular traffic circulation and to lessen congestion in the streets. 4. To promote adequate and appropriately located off-street parking and loading facilities. 5. To conserve and maintain established community qualities and economic values. 6. To encourage a harmonious, convenient, _ workable relationship among land uses, consistent with Municipal development objectives. 7. To prevent excessive population densities and overcrowding of the land with structures. 8. To safeguard and enhance the appearance.of the Town. 9. To conserve. and protect wildlife, streams, woods, hillsides, and other desirable natural features. 10. To assure adequate open space, recreation opportunities, and other amenities and facilities conducive to desired living quarters. 11. To otherwise provide for the growth of an orderly and viable community. 2 Upon review of the stated purposes of the Zoning Regulations, staff believes that this proposed text amendment does not further these purposes. The prescribed text the applicant wishes to amend was specifically enacted to protect the natural topography of the steep slopes in question; to protect the inherent aesthetic and economic value of the undisturbed terrain threatened by this proposed text amendment; and to protect the public health, safety, and welfare; as clearly tracked and outlined in Section III of this memorandum. However, staff does believe the modified version of the existing language, as listed in Section V of this memorandum, which addresses site disturbance specifically; rather than attempting to minimize site disturbance through the further restriction of maximum site coverage on steep slopes, will fulfill this criterion. 2. The extent to which the text amendment would better. implement and better achieve the applicable elements. of the adopted ,goals, .objectives, and policies outlined in the Vail Comprehensive Plan and is compatible with the development objectives of the Town; and, Staff does not believe the text amendment ,request, as submitted, better implements or achieves the applicable elements of the adopted goals, objectives, and policies outlined in the Vail Comprehensive Plan, nor is it entirely compatible with the development objectives of the Town. With the addition of staffs suggested language limiting site disturbance explicitly, and language granting discretion to the Deaign Review Board (DRB) over the extent of land to be physically disturbed by excavation work related to construction of a structure, staff does believe this criterion will be met, especially in consideration of the following specific goals: 2. To secure safety from fire, panic, flood, avalanche, accumulation of snow, and other dangerous conditions; 5. To conserve and maintain established community qualities and economic values; 6. To encourage a harmonious, convenient; workable relationship among land uses, consistent with Municipal development objectives; 8. To safeguard and enhance the appearance of the Town; and 9. To conserve and protect wildlife, streams, woods, hillsides, and other desirable natural features. 3. The extent to which the text amendment demonstrates how conditions have substantially changed since the adoption of the subject regulation and how the existing regulation is no longer appropriate or is inapplicable; and, Staff has found this text amendment proposal, as submitted, does not demonstrate how conditions have substantially changed since the adoption of the subject regulation, nor can staff find any evidence of the relevant topographic conditions having changed. The creation of the 15% site coverage restriction on lots with an average slope greater than 30% was intended to result in "development that is more sensitive to the site with less site disturbance", as stated by the -Town Council in Ordinance No. 13, Series of 1994. Since staff has determined the restriction of site coverage to 15% on steep slopes does nothing to limit actual site disturbance (Attachment B) a more appropriate text 3 amendment would be one which sets a limit on the extent a site is allowed to be disturbed when the average slope exceeds 30%. 4. The extent to which the text amendment provides a harmonious, convenient, workable relationship among land use regulations consistent with municipal development objectives; and, Staff has determined that the proposed text amendment does not provide a harmonious, convenient, workable relationship among land use regulations and is inconsistent with municipal development objectives. Again, the primary purpose of restricting the site coverage on steep slopes is to minimize site disturbance. The restriction does force owners and developers of steep lots to create a more vertical design, rather than one which is more .horizontal, but it does not restrict the area of physical disturbance on a site by excavation work or retention systems for construction of a structure. If the intent of the subject regulation is to actually limit the amount of site disturbance created by constructing a home on a steep slope, than it should be amended to directly regulate site disturbance as a percentage of the lot size and in proportion to the steepness of the slope. 5. Such other factors and criteria the Commission and/or Council deems applicable to the proposed text amendment. Section 12-21-14E.1, Vail Town Code, is meant to substantially decrease site disturbance for these 640 lots by giving applicants the incentive to locate structures close to the street, thereby minimizing a cut across a steep lot for access. However, based upon the evidence and data collected by staff (Attachment B), this regulation alone does not unilaterally further the Town's development objectives. The additional text outlined in Section V of this memorandum will work toward protecting the values of the Town of Vail, and meeting its development objectives. V. STAFF RECOMMENDATION The Community Development Department recommends that the Planning and Environmental. Commission forwards a recommendation of approval with modifications of the proposed text amendment to the Vail Town Council. Staff's recommendation is based upon the review of the criteria found in Section IV of this memorandum and the evidence and testimony presented. Staff's suggested modification to the applicant's text amendment proposal entails the following additional (bold) text: 2. In order to protect the natural land form and vegetation on steep slopes, not more than sixty percent (60%) of the total. site area may be disturbed from present conditions by construction activities. The Design Review Board (DRB) may approve site disturbance in excess of the sixty percent (60%) maximum if specific design criteria warrant the extent of the requested deviation. Should the' Planning and Environmental Commission choose to forward a recommendation of approval with conditions to the Vail Town Council of this proposed text amendment, as modified above by staff the Department of Community Development recommends the' Commission pass the following motion: 4 "Based upon the review of the criteria outlined in Section IV of this memorandum, and the evidence and testimony presented, the Planning and Environmental Commission finds: 7. That the amendment, as modified by staff, is consistent with the applicable elements of the adopted goals, objectives and policies outlined in the Vail Comprehensive Plan and is compatible with the development objectives of the Town; and 2. That the. modified amendment furthers the ,general and specific purposes of the Zoning Regulations; and 3. That the modified amendment promotes the health, safety, morals, and general welfare of the Town, and promotes the coordinated and harmonious development of the Town in a manner that conserves and enhances its natural environment and its established character as a resort and residential community of the highest quality. VI. ATTACHMENTS A. Applicant's Request B. Staff Analysis C. Excerpted minutes from the April 24, 2006, Planning and Environmental Commission (PEC) Hearing 5 ORDINANCE NO. 15 Series of 2006 AN ORDINANCE EXTENDING A MORATORIUM ON THE SUBMISSION AND PROCESSING OF BUILDING PERMITS AND LAND USE APPROVALS IN THE LIONSHEAD MIXED USE 1 AND LIONSHEAD MIXED USE 2 ZONE DISTRICTS WHICH WOULD RESULT IN' THE NET LOSS OF ACCOMMODATION UNITS, PARKING SPACES AND EMPLOYEE HOUSING UNITS; AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, the Town of Vail, in the County of Eagle and State of Colorado (the "Town"), is a home rule municipal corporation duly organized and existing under laws of the State of Colorado and the Town Charter (the "Charter"); and WHEREAS, the members of the Town Council of the Town (the "Council") have been duly elected and qualified; WHEREAS, on April 18, 2006, the Council adopted Ordinance No. 13; Series 2006, an emergency ordinance establishing a sixty (60) day moratorium on' the submission and processing of building permits and land use approvals in the Lionshead Mixed Use 1 and LionsHead Mixed Use 2 zone districts which would result in the net loss of Accommodation Units, Parking Spaces And Employee Housing Units; and WHEREAS, on May 8, 2006, The Planning and Environmental Commission (the "PEC") tabled an application filed by the Town which contemplates amendments to the Lionshead Mixed Use 1, Lionshead Mixed Use 2 Zone Districts and the Lionshead Master Redevelopment Plan which would address the retention of Accommodation Units, Parking Spaces and Employee Housing Units in Lionshead; and WHEREAS, in consideration of the procedural requirements and time necessary to effectuate the subject text amendments to Title 12, Vail Town Code, including a recommendation from the PEC and two (2) readings of an ordinance by the Council, the Council believes it necessary to extend the above-referenced moratorium for an additional sixty (60) days. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO as follows: Section 1. The moratorium established by Ordinance No. 13, Series 2006, and providing for a sixty (60) day moratorium on the submission and processing of building permits and land use approvals in the Lionshead Mixed Use 1 and LionsHead Mixed Use 2 zone districts which would result in the net loss of Accommodation Units, Parking Spaces And Employee Housing Units, is hereby extended for an additional sixty (60) days to begin on June 16, 2006. Section 2. If any part, section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this Ordinance; and the Council hereby declares it would have passed this Ordinance, and each Ordinance No. 15, Series of 2006 part, section, subsection, clause or phrase thereof, regardless of the fact that any one or more parts, sections, subsections, clauses or phrases be declared invalid. Section 3. The Council hereby finds, determines and declares that this Ordinance is necessary and proper for the health, safety and welfare of the Town of Vail and the inhabitants thereof. Section 4. All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith are repealed to the extent only of such inconsistency. This repealer shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof, theretofore repealed. INTRODUCED, READ ON FIRST READING, APPROVED, AND ORDERED PUBLISHED ONCE IN FULL, .this 16th day of May, 2006. A public hearing on this ordinance shall be held at the regular meeting of the Town Council of the Town of Vail, Colorado, on the 6th day of June, 2006, at 6:00 P.M., in the Municipal Building of the Town of Vail.. Rodney E. Slifer, Mayor, ATTEST: Lorelei Donaldson, Town Clerk INTRODUCED, READ, ADOPTED AND ENACTED ON SECOND READING. AND ORDERED PUBLISHED IN FULL this 6~' day of June, 2006. Rodney E. Slifer, Mayor, ATTEST: Lorelei Donaldson, Town Clerk Ordinance No. 15, Series 2006 .f ~' 0 ORDINANCE NO. 12 Series of 2006 AN ORDINANCE AMENDING THE OFFICIAL ZONING MAP OF THE TOWN OF VAIL IN ACCORDANCE WITH TITLE 12, ZONING REGULATIONS, CHAPTER 5, ZONING MAP; ZONING THE AREA MORE COMMONLY REFFERED TO AS "FRONT DOOR USFS LAND EXCHANGE PARCEL" TO SKI BASE RECREATION-2 DISTRICT (SBR-2), AND SETTING FORTH DETAILS IN REGARDS THERETO. WHEREAS, Chapter 5, Zoning Map, of the Vail Town Code establishes the procedures for evaluating changes to the Official Zoning Map of the Town of Vail ("Zoning Map"); and W HEREAS, the proposed amendment to the Zoning Map has been reviewed in accordance with the prescribed requirements outlined in Sections 12-3-1 through 12-3-7 of the Zoning Regulations of the Vail Town Code; and WHEREAS, on May 8, 2006, the Planning and Environmental Commission of the Town of Vail reviewed and forwarded a unanimous recommendation of approval of the proposed amendment to the Zoning Map to the Vail Town Council in accordance with the criteria and findings outlined in Section 12-3-7 of the Zoning Regulations of the Town of Vail; and W HEREAS, a complete legal description of the area to be zoned is on file in the Town of Vail Community Development Department and attached to this Ordinance; and WHEREAS, the Vail Town Council finds the proposed amendment to the Zoning Map is consistent with the adopted goals, objectives and policies outlined in the Vail Comprehensive Plan and is compatible with the development objectives of the Town; and WHEREAS, the Vail Town Council finds the amendment to the Zoning Map is compatible with and suitable to adjacent uses and appropriate for the surrounding areas; and WHEREAS, the Vail Town Council finds the amendment to the Zoning Map promotes the health, safety, morals, and general welfare of the Town and promotes the coordinated and harmonious development of the Town in a manner that conserves and enhances its natural ORDINANCE NO. 12, SERIES OF 2006 _ ~ _ n Y environment and its. established character as a resort and residential community of the highest quality. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO, THAT: Section 1. Zoning Map Amendment: The purpose of this Ordinance is to amend the Official Zoning Map of the Town of Vail. The Official Zoning Map of .the Town of Vail is hereby amended as follows: The Front Door USFS Land Exchange Parcel, as legally described on Exhibit A attached hereto, shall be zoned to Ski Base Recreation - 2 District (SBR-2).. Section 2. If any part, section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid, such decision shall not effect the validity of the remaining portions of this ordinance; and the Town Council hereby declares it would have passed this ordinance, and each part, section, subsection, sentence, clause or phrase thereof, regardless of the fact that any one or more parts, sections, subsections, sentences, clauses or phrases be declared invalid. Section 3. The Town Council hereby finds, determines and declares that this ordinance is necessary and proper for the health, safety and welfare of the Town of Vail and the inhabitants thereof. Section 4. The amendment of any provision of the Town Code as provided in this ordinance shall not affect any right which has accrued, any duty imposed, any violation that occurred prior to the effective date hereof, any prosecution commenced, nor any other action or proceeding as commenced under or by virtue of the provision amended. The amendment of any provision hereby shall not revive any provision or any ordinance previously repealed.or superseded unless expressly stated herein. ORDINANCE NO. 12, SERIES OF 2006 - 2 - ,• Section 5. All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith are repealed to the extent only of such inconsistency. This repealer shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof, theretofore repealed. INTRODUCED, READ ON FIRST READING, APPROVED, AND ORDERED PUBLISHED ONCE IN FULL ON FIRST READING this 16~' day of May, 2006, and a public hearing for second reading of this Ordinance set for the 6~' day of June, 2006, in the Council Chambers of the Vail Municipal Building, Vail, Colorado. Attest: Rodney Slifer, Mayor Lorelei Donaldson, Town Clerk INTRODUCED, READ, ADOPTED AND ENACTED ON SECOND READING AND ORDERED PUBLISHED IN FULL this 6~' day of June, 2006. Attest: Rodney E. Slifer, Mayor, Lorelei Donaldson, Town Clerk ORDINANCE NO. 12, SERIES OF 2006 - 3 - ~~ EXHIBIT A Legal Description of the Front Door USFS Land Exchange Parcel _ LOTS 1 AND 4, SECTION 8, TOWNSHIP 5 SOUTH, RANGE 80 WEST, OF THE SIXTH PRINCIPAL MERIDIAN, COUNTY OF EAGLE, STATE OF COLORADO, AS ESTABLISHED BY THE DEPENDENT RESURVEYS AND SURVEYS COMPLETED BY THE UNITED STATES DEPARTMENT OF THE INTERIOR, BUREAU OF LAND MANAGEMENT DATED FEBRUARY 3, 2005 (LOT 4), AND DECEMBER 30, 1988 (LOT 1), AND ALSO BEING DESCRIBED ALTERNATIVELY AS FOLLOWS: BEGINNING AT THE NORTHWEST 1 /16 CORNER OF SECTION 8, TOWNSHIP 5 SOUTH, RANGE 80 WEST, OF THE SIXTH PRINCIPAL MERIDIAN, COUNTY OF EAGLE, STATE OF COLORADO; WHENCE THE NORTH 1/16 CORNER OF SECTION 7 AND SECTION 8 BEARS N89°43'59"W A DISTANCE OF 1323.26 FEET, SAID LINE BEING THE BASIS OF BEARING FOR THIS DESCRIPTION. THENCE ALONG THE EAST LINE OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SAID SECTION 8 (ALSO BEING CO-EXTENSIVE WITH THE BOUNDARY OF THE FORMER VAIL VILLAGE, FIRST FILING, ACCORDING TO THE PLAT THEREOF RECORDED AUGUST 6, 1962 AT RECEPTION NUMBER 96382) THE FOLLOWING TWO COURSES: 1) S00°21'52"W 165.00 FEET . 2) S00°21'52"W 277.76.FEET THENCE ALONG SAID EAST LINE OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 8 (ALSO BEING CO-EXTENSIVE WITH THE BOUNDARY OF PARCEL 1, GOLDEN PEAK SKI BASE AND RECREATION DISTRICT (RECEPTION NUMBER 352168)), S00°21'52"W 57.22 FEET; THENCE N89°45'07"W 248.01 FEET: THENCE N33°20'55"W 282.22 FEET; THENCE N89°45'45"W 488.32 FEET; THENCE N00°14'21"E 265.29 FEET TO A POINT ON THE NORTH LINE OF SAID SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 8; THENCE ALONG SAID NORTH LINE (AGAIN ALSO BEING CO-EXTENSIVE WITH SAID BOUNDARY OF THE FORMER VAIL VILLAGE, FIIZST FILING ACCORDING TO THE PLAT THEREOF RECORDED AUGUST 6,1962 AT RECEPTION NUMBER 96382) S89°43'59"E 99.99 FEET TO THE NORTHWEST CORNER OF MILL CREEK SUBDIVISION, ACCORDING TO THE PLAT THEREOF RECORDED NOVEMBER 6, 2000 AT RECEPTION NUMBER 743366; THENCE ALONG THE WESTERLY BOUNDARY OF SAID MILL CREEK SUBDIVISION S00° 15' 18"W 165.37 FEET TO THE SOUTHWEST CORNER OF MILL CREEK SUBDIVISION; THENCE ALONG THE SOUTHERLY BOUNDARY OF SAID MILL CREEK SUBDIVISION S89°45'57"E 131.89 FEET; THENCE CONTINUING ALONG THE SOUTHERLY BOUNDARY OF SAID MILL CREEK SUBDIVISION S89°46'28"E 413.26 FEET TO THE SOUTHEAST CORNER OF SAID MILL CREEK SUBDIVISION; THENCE ALONG THE EASTERLY BOUNDARY OF SAID MILL CREEK SUBDIVISION N00°21' 19"E 165.00 FEET TO A POINT ON THE NORTH LINE OF SAID SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 8, SAID POINT ALSO BEING THE NORTHEAST CORNER OF SAID MILL CREEK SUBDIVISION; THENCE ALONG SAID NORTH LINE (AGAIN ALSO BEING CO- EXTENSIVE WITH THE BOUNDARY OF THE FORMER VAIL VILLAGE, FIRST FILING, RECEPTION NUMBER 96382) S89°43'59"E 248.12 FEET TO THE TRUE POINT OF BEGINNING. SAID PARCEL CONTAINING 5.13 ACRES MORE OR LESS. ORDINANCE NO. 12, SERIES OF 2006 - 4 - FRONT DOOR DEVELOPMENT AGREEMENT THIS FRONT DOOR DEVELOPMENT AGREEMENT (this "Agreement") is made effective as of the _ day of , 2006, by and between the TOWN OF VAIL, a municipal corporation duly organized and existing under and by virtue of the laws of the State of Colorado (the "Town"), and THE VAIL CORPORATION, d/b/a VAIL ASSOCIATES, INC., a Colorado corporation ("Vail Associates"). RECITALS: A. Vail Associates, together with its corporate affiliate, Lodge Properties Inc., a Colorado corporation ("LPI"), is the owner of certain real property in the Town of. Vail, Eagle County, Colorado, located at the base of Vail Mountain in Vail Village, Colorado, which is legally described on Exhibit A attached hereto (the "Property"). B. Vail Associates desires to develop the Property pursuant to i the Town's Ski Base/Recreation 2 (SBR2) zone district, which has been adopted and approved)by the Town for the Property, (ii) a development plan given the approval of the Town's Planning and Environmental Commission (PEC) on September 22, 2003, which approval was affirmed on appeal by the Town Council on November 4, 2003 (the "Front Door Development Plan"), and (iii) certain design and development plans and specifications in furtherance of the Development Plan entitled " "dated approval of the Town's Design Review Board on ~ and even the as the same may be modified from time to time with the Town's approval (the "Design Plans"). The SBR2 zoning, Front Door Development Plan and Design Plans collectively provide for and govern a development project within the Property which may include, among other things, new spa facilities incorporated into The Lodge at Vail, residential townhomes/condominiums, a new skier services building and facilities, a ski club facility, a subterranean garage facility incorporating commercial loading and delivery facilities for both public and private use, including multiple loading bays (the "Loading/Delivery Facility"), and the relocation of the Vista Bahr chairlift facilities within the Vista Bahr ski yard (collectively the "Front Door Project" or "Project"). The SBR2 zoning for the Property, the. Front Door Development Plan and Design Plans are sometimes referred to hereinafter collectively as the "Development Approvals." C. Vail Associates and the Town have mutually determined to make this Agreement in order to establish various agreements between them respecting the undertaking of certain public improvements and other measures related to the development of the Property pursuant to the Development Approvals. NOW, THEREFORE, in consideration of the above premises and the mutual covenants .and agreements set forth herein, the Town and Vail Associates covenant and agree as follows: 1. Off-Site Public Improvements. As part of the Front Door Project, Vail Associates at its expense will be required to construct and provide certain off-site public improvements, i. e., to be located outside of the Property boundaries within the azeas depicted on Exhibit B attached hereto, which improvements will include landscape irrigation, street lights, and related necessary subsurface support (the "Off-Site.Improvements" or the "Public Project").-~e~ 680193.RED RCFISH 06/1/06 2;53 PM > > The Off-Site Improvements will be constructed in accordance with the Contract Documents and Specifications for the "Vail Village Streetscape Improvements" dated February 27, 2004, prepared by the engineers of record, and approved by the Town (the "Master Streetscape Specifications"), except as otherwise provided in Vail Associates' final building permit plan set for the Project which is approved by the Town, with the criteria and standards under such plan set to be consistent in scope with the Development Plan and Design Plans (the "Off-Site Plans"). In the course of establishing the Off-Site Plans, the Master Streetscape Specifications will be adjusted as necessary or appropriate to address the site-specific characteristics of the pertinent areas, as reasonably determined by the parties, and to otherwise conform to other applicable provisions of this Agreement. The Off=Site Improvements shall also be undertaken in accordance with and subject to the following provisions of this paragraph 1: (a) To the extent any Off-Site Improvements are to be located within or may affect private property or private property interests other than the Property, it shall be necessary for the Town to secure all requisite consents of the affected owners as a condition to Vail Associates being required to proceed with the construction and installation of the affected Off- Site Improvements. The completion of any Off-Site Improvements so affected will not act as a condition to the Town's provision of any building permit, certificate of occupancy or other approvals requisite to the development, occupancy, use and enjoyment of any portion of the Project to the extent the Town is unable to secure the requisite owner consents for those affected Off-Site Improvements in a timely manner, i.e., by the time that Vail Associates is to commence those Off-Site Improvements under its Project construction schedule. Vail Associates will not retain any obligation to complete any Off-Site Improvements for which the Town does not timely obtain requisite owner consents as aforesaid; however, for those Off-Site Improvements (and as Vail Associates' sole obligation in connection therewith), Vail Associates will post security for the completion of those Off-Site Improvements in amounts based on then-prevailing construction values in the market. The Town may then undertake the completion of those Off- Site Improvements by recourse to that posted security to pay construction costs incurred by the Town in order to complete the same, with the Town to bear any excess costs; provided, however, that (i) at such time, if ever, as the Town, acting in good faith, determines that it will not be able to secure the requisite third-party consents for any applicable Off-Site Improvements, then the security attributable to those Off-Site Improvements shall be remitted to Vail Associates, and (ii) to the extent those Off-Site Improvements are completed, and the resulting construction costs incurred by the Town are less than the amount of the posted security, then the remainder of the security will also be returned to Vail Associates. (b) As part of the Off-Site Improvements, Vail Associates will have the following responsibilities for snowmelt systems (all other responsibilities for providing snowmelt capacities outside of the Property will be borne by the Town): (i) Within the Vail Road right-of--way area lying immediately to the south of existing "Check Poirit Charlie" and depicted on Exhibit C attached hereto, and as part of the Town's public snowmelt systems, Vail Associates will install wirsbo tubing, manifolds, and heating transmission lines to the manifolds 680793.RED RCFISH 06/1/06 2:53 PM 2 for serving that area, and also a heat main commencing proximate to Check Point Charlie and terminating at the southerly boundary of that public right-of--way area, as depicted on Exhibit C. Vail Associates will not be responsible or obligated to furnish the heat source for the snowmelt systems within that area, or any ongoing operation or maintenance of those snowmelt systems (except to the extent that such operation and maintenance costs are ever imposed against the Property by virtue of a properly enacted and levied public real property tax or assessment of general applicability). (ii) Vail Associates will provide and integrate with a Project snowmelt system (i.e., one within the Property) and operate and maintain, on an ongoing basis, snowmelt systems within those portions of the sidewalk on the east side of Vail Road that. are depicted on Exhibit C hereto, and the areas between One Vail Place and the Hill Building and between the Hill Building and Bridge Street Lodge that are also depicted on Exhibit C (the "Integrated Off-Site Systems"). Since the Integrated Off-Site Systems will be physically and operationally integrated with a Project snowmelt system, and not the public snowmelt systems of the Town, Vail Associates may conform the equipment and improvements for the Integrated Off-Site Systems to the specifications employed for the applicable Project snowmelt system, rather than the Town's specifications. Vail Associates shall have exclusive rights and responsibilities for operation and maintenance of the Integrated Off-Site Systems. Vail Associates may elect to discontinue operation of the Integrated Off=Site Systems, and disconnect them from the Project system with which they integrate, if the Town ever discontinues operation of related public snowmelt systems of the Town. (iii) Following completion of the snowmelt improvements that Vail Associates is required to install pursuant to the foregoing provisions, Vail Associates will re-balance for operational purposes those portions of the Town's public snowmelt systems affected by those installations. (c) Subject to the express requirements under paragraph 1(b)(ii) above for the Integrated Off-Site Systems, and to the warranty obligations under paragraph 1(e) below, Vail Associates will only be responsible for the initial construction or installation of the Off-Site Improvements, and will not have any obligation or liability for the ongoing maintenance, repair or replacement of the Off-Site Improvements (all of which, with the exception of the Integrated Off-Site Systems, shall be dedicated to the Town as its property), or their operation or any utility consumption or-other charges incurred in conjunction with their operation. (d) The parties agree that as a condition to the issuance of a temporary or permanent certificate of occupancy for any applicable portion of the Project, either (i) the Off- Site Improvements shall be substantially completed, or (ii) Vail Associates shall furnish the Town with security for the Off-Site Improvements that remain uncompleted in a dollar amount equal to one hundred twenty-five percent (125%) of the estimated out-of-pocket, variable construction costs for completing the remaining Off-Site Improvements. If security is so provided to obtain the issuance of any temporary certificate of occupancy, Vail Associates will then be required to complete the remaining Off=Site Improvements within specified time periods 680793.RED RCFISH 06/1/06 2:53 PM 3 that are established in accordance with prevailing customary construction requirements of the Town, and pursuant to a developer improvement agreement to be made between Town staff (acting through the Town of Vail Community Development Department ("Community Development")) and Vail Associates. The required times for completion will be subject to extension for delays caused by any event or circumstance beyond the reasonable control of Vail Associates, including; without limitation, labor strikes or lockouts, power shortages or failures, unavailability or shortages of materials, acts of God, acts of terrorism or war, inclement weather of such severity as to preclude continued work under prevailing industry standards, customary construction season limitations under prevailing industry standards, or any construction .moratorium or other governmental action or inaction (collectively "Force Majeure Events"). In the event Vail Associates fails to complete the Off-Site Improvements in a timely manner in accordance with the foregoing provisions, then the Town at its election may undertake the completion of the remaining Off-Site Improvements, or portions 'thereof, and thereupon the Town may resort to the security furnished to recover the construction costs and expenses incurred by the Town in so undertaking any of the Off-Site Improvements. Upon the initial completion of the Off-Site Improvements, and the Town's initial acceptance thereof, any security (or the remainder thereof) previously provided shall be returned by the Town to Vail Associates. The completion of the Off-Site Improvements, or the posting of security therefor, will condition only the issuance of any certificate of occupancy, and not the issuance of any building permits or similar approvals for proceeding with the construction of the Project; and if that condition is satisfied for any Off-Site Improvements by the posting of security, the completion of the Off-Site Improvements will not be a requirement for the issuance of any temporary or final certificate of occupancy for any portion of the Project, except that such completion shall be a condition for the final certificate of occupancy that will be the last one issued for the entire Project as planned. (For appropriate Project work items other than Off-Site Improvements, Vail Associates may provide security for those work items, in accordance with this paragraph 1(d), for purposes of securing any applicable temporary certificate of occupancy, but the actual completion of such " work items will be a condition to the issuance of the corresponding final certificate of occupancy.) The provisions of this paragraph 1(d) are subject to and do not limit the provisions of paragraph 1(a) above. (e) Notwithstanding the other provisions of this paragraph 1 indicating to the contrary, Vail Associates agrees that it shall warranty each of the Off-Site Improvements that it constructs for a period of two (2) years after the same has been initially accepted by the Town. The Town will act diligently to inspect and provide its acceptance of completed work items, at which time they shall be dedicated to the Town (with the exception of the Integrated Off-Site Systems). (fl Vail Associates will act reasonably to coordinate the installation of the Off-Site Improvements with other public improvements that maybe undertaken by the Town, so long as such coordination does not cause any material delays in Vail Associates' Project construction schedule, any material increases in related development costs, or any other material interference with the Project development. Delays will not be regarded as material if they are customary for the ordinary course of prosecuting integrated public/private development projects within the Town. In any event, however, if any delays are incurred by Vail Associates in its construction schedule as a result of such coordination, then the completion security requirements set forth under paragraph 1(d) above shall also be deferred for a commensurate period with 680793.RED RCFISH O6/I/06 2:53 PM ~ 4 respect to the Off-Site Improvements that are delayed, and no certificates of occupancy will be withheld as a result. In addition, when that deferred security is required to be posted or the deferred construction is completed, Vail Associates shall provide or bear the same in amounts based on construction values that would have been applicable had the delays not occurred (and the Town will bear any incremental costs over and above those construction values). The provisions of this paragraph 1(f) are subject to and do not limit the provisions of paragraph 1(a) above. (g) Any security required under this paragraph 1 shall be in the form of a performance and payment bond, or alternatively a letter of credit or other form of financial device reasonably acceptable to the Town. The Town will not impose requirements for the type of construction security that are more burdensome than those under the Town's generally prevailing practices. 2. Proiect Easements and Licenses. (a) In connection with the Front Door Project, Vail Associates will grant and dedicate to the Town certain public easements and licenses as set forth below: (i) Easements (A) for bicycle/pedestrian access, for the use of the public, over certain portions of the surface road to be constructed within the Project (the "Project Surface Road"), and of the paved bicycle/pedestrian path providing a connection from the Project Surface Road to Mill Creek Circle and running adjacent to the site of the new skier services facility (the "Pedestrian Path"), as generally depicted on Exhibit D hereto, and (B) for vehicular access, for the benefit of the Town, over those portions of the Pedestrian Path that are accessible from and lie to the south and southeast of Bridge Street, as such vehicular access is necessary for the Town to discharge its routine public maintenance responsibilities in those areas. The use and enjoyment of that pedestrian/bicycle easement under clause (A) will be subject to regulations and limitations imposed by Vail Associates in the ordinary course of skier and other operations conducted in relation to Vail Mountain, the Project, and other assets of Vail Associates and its affiliates, and may incorporate protections available under Colorado law for the grant of public recreational easements. In connection with any use of the maintenance access .easement under clause (B), the Town will be solely obligated to .bear any maintenance, repairs or replacements of the Pedestrian Path made necessary by resulting damage thereto, or any other liabilities resulting therefrom. (ii) An easement for emergency access over the Project Surface Road for purposes of furnishing emergency services to the various portions of the Project that can be accessed thereby (including the new residential townhomes/condominiums, the new ski club facility, and the Loading/Delivery Facility), as well as the Vista Bahn ski yard and existing One Vail Place, which easement shall expressly run to the benefit of bona fide third-party providers of emergency services, including law enforcement, fire protection, and ambulatory medical services. This emergency access easement will also extend to the access 680793.RED RCFISH 06/U062:53PM 5 ways in and through the Loading/Delivery Facility, to the extent its physical configuration will accommodate such access. (iii) A license to the Town, for use by the public, for (A) non-exclusive use of the fourteen (14) loading/delivery bays as planned for and to be located within the Loading/Delivery Facility, (B) access between those bays and Vail Road via the access tunnel to be developed as part of the Front Door Project, and (C) access to and from those bays for hand cart/dolly deliveries via designated elevators and comdors within the Front Door Project. This license will be complemented by and subject to provisions assuring Vail Associates and its affiliates and. designees of adequate loading/delivery capacities for serving operations and uses within the Front Door Project and other surrounding facilities owned or operated by Vail Associates or its affiliates (including, without limitation, The Lodge at Vail), and also in relation to Vail Mountain (including, without limitation, ski operations). In any case Vail Associates and its affiliates will have rights to priority use from time to time of not fewer than five (5) loading/delivery bays within the Loading/Delivery Facility (which is the number of loading/delivery bays required for the Project under generally applicable standards of the Town Code of the Town of Vail (the "Town Code"), and which will include the bay allocated to trasl?/refuse deposit). This grant of easement will further incorporate operating provisions that vest the management and administration of the Loading/Delivery Facility operations in Vail Associates or its designees, acting in their ordinary business judgment, including, without limitation, rights to establish use regulations to assure loadirig/delivery capacities as aforesaid and to otherwise protect persons and property (but without obligation to do so). Under those operating provisions, the Town will bear the costs of elevator maintenance, repair and replacement, and Vail Associates will bear applicable utilities charges. The operating provisions will also include terms for sharing, between Vail Associates and the Town, of other operating, maintenance and repair costs attributable to the Loading/Delivery Facility, which sharing shall be based equitably on relative use and also allocate to Vail Associates any such costs that materially exceed customary cost .levels under generally prevailing managerial and operating practices for similar facilities (and the Town will reasonably cooperate with Vail Associates for purposes of establishing budgets for appropriate costs). The operating provisions will further allow for advisory input on operational matters that may .arise pursuant to the functions under paragraph 13 below. (iv) In conjunction with the Project tunnel that provides access to the Loading/Delivery Facility and other areas, Vail Associates will install and maintain signage, traffic signals, and/or other traffic controls to address the limitations on access and signal distances that are associated with the configuration under the Design Plans and that affect egress at all points of access to such tunnel, and to thereby promote safe traffic operations at those points to the extent feasible. 680793.RED RCFISH 06/1/06?:53PM 6 (b) The establishment of the easements and licenses required under paragraph 2(a) above shall be a condition to the issuance of any temporary certificate of occupancy for any portion of the Project. Those easements and licenses will be established pursuant to easementllicense agreements prepared by Vail Associates and containing terms that do not conflict with the foregoing provisions. The easemendlicense agreements shall be made promptly on behalf of the Town by the Town Manager, with the advice of the Town Attorney, and when made shall be recorded in the real property records for Eagle County, Colorado. The requirements under paragraph 2(a) are cumulative with and without limitation on further requirements that the Town may impose for .utility and drainage easements that aze consistent with both the Project Approvals and generally prevailing construction practices of the Town, with the satisfaction of those easement requirements being a condition to the issuance of any temporary certificates of occupancy for the affected portion or portions of the Project. (c) On or before September 1, 2006, Vail Associates shall submit to Community Development a partial topographic map of the alleyway located on the east side of the Lodge at Vail commonly referred to or known as the "Wildflower Alley." The topographic information shall be used to determine the feasibility of providing hand cart delivery access via the Wildflower Alley. Vail Associates agrees to evaluate the opportunity for reconstructing the Wildflower Alley to minimize the grade and thereby provide improved hand cart delivery access to Gore Creek Drive. If it is determined by the Town and Vail Associates to be both feasible and advantageous to provide hand cart delivery access to Gore Creek Drive via the Wildflower Alley, then Vail Associates will revise the Off-Site Plans to provide for reconstruction of the Wildflower Alley as part of the Off-Site Improvements, with those revisions to be subject to the review and approval of Community Development. ° 3. "Check Point Charlie". In addition to the Off-Site Improvements, Vail Associates will provide at its expense a new "Check Point Charlie" building facility for purposes of allowing the Town to regulate vehicular access from Vail Road and Willow Circle to Willow Bridge Road and Gore Creek Drive (the "Check Point Charlie Facility"). The Check Point Charlie Facility shall be of a size and located and designed in general conformity with the applicable criteria under the Front Door Development Plan, such location being subject to adjustment by PEC to establish the most suitable location for the Check Point Charlie Facility, determined reasonably on the basis of traffic circulation patterns and available alternative locations. This determination by PEC shall be made no sooner than one (1) year following the completion of the roadway and streetscape improvements on Vail Road/Willow Circle proximate to The Lodge at Vail which aze part of the Off-Site Improvements. If the Check Point Charlie Facility is ultimately approved for the location set forth by the Front Door Development Plan (which location is substantially the same as its presently existing location), Vail Associates will also incorporate two (2) public restrooms within the Check Point Charlie Facility; the Town will provide and beaz the cost, including service charges, for necessary utilities improvements and infrastructure and utilities service for those restrooms (except that Vail Associates will furnish customary connection lines for such service to existing utility mains in that vicinity). If an alternative location is determined, Vail Associates will not provide any restrooms: The Check Point Charlie Facility when completed will be dedicated to the Town and become part of the associated right-of--way improvements, and will be constructed in accordance with criteria and quality standards that are materially compatible with the Master Streetscape Plan. Vail 680793.RED RCFISH 06/1/06 2:53 PM '~ Associates will proceed in the ordinary course of business to complete the Check Point Charlie Facility following the making of the requisite determination by PEC. 4. Proiect Platting. The Town acknowledges that various components of the Project are designed to intersect or overlap with one another on vertical planes, which will create the need for three-dimensional platting in one or more circumstances in order to establish.the Project components as discrete, severable property interests, transferable independently of one another. In furtherance thereof, the Town agrees that the applicable portions of the Property may be platted from time to time using athree-dimensional methodology. Following any three- dimensional subdivision plat that may precede the construction of pertinent improvements, Vail Associates will be permitted, as necessary for purposes of conforming the plat's horizontal and vertical boundaries and dimensions to the "as built" configuration of the improvements, to modify the plat by resort to the Town's administrative plat correction procedures under § 13-13- 1, et seg., of the Town Code, or any Town Code provision hereafter adopted in lieu thereof. 5. Special Events. (a) Subject to applicable restrictions of record, Vail Associates agrees to make the proposed Vista Bahn ski yard, which is planned as part of the Front Door Project and is depicted on Exhibit E hereto .(the "Ski Yard"), available for community events, activities and other public uses, including, without limitation, special events sanctioned and contracted by the Town pursuant to Title 3, Chapter 6 of the Town Code ("Ski Yard Events"). The Town agrees that Ski Yard Events shall be materially consistent with historical standards and practices prevailing in "rte ~~~-~~ the Vail Village community recreational and entertainment uses as those standards and practices may evolve over time, and before licensing or contracting for Ski Yard Events, the Town's Commission on Special Events ("CSE") shall reasonably consult with Vail Associates in furtherance of assuring compliance with this standard. The Town shall bear sole responsibility for any claims made that any Ski Yard Events cause a violation of third-party property rights or interests which are associated with an _! real property located outside of the Property, and to the extent permitted by law, the Town _ will hold Vail Associates harmless and reimburse Vail Associates for any liability, loss, cost or expense, including attorneys' fees, that Vail Associates may incur in connection with any such claim. In addition, Ski Yard Events will be.subject to Vail Associates' prior approval from time to time based on scheduling availability of the Ski Yard, as determined by Vail Associates in the ordinary course of business. Notwithstandin any other provisions of this A~'eement that may indicate to the contra_rv successors to Vail Associates m the ownership of portions of the Front Door Proiect outside of the Ski Yard will have no rights to obiect to the conduct of the Ski Yard Events pursuant to ttus nara~raph 5. and will not be beneficiaries of or be entitled to exercise the n is of the Ski Yard owner under this paragraph 5 (b) Vail Associates in its discretion may require that any party conducting a Ski Yard Event (a "Ski Yard User") (i) provide general commercial or other liability insurance naming Vail Associates and its designees as additional insureds, contractual releases and indemnities of Vail Associates and its designees, clean-up and/or damage deposits, and reimbursement of direct costs incurred by Vail Associates or its affiliates in connection with any 680793.RED RCFISH 06/1/06 2:53 PM 8 Ski Yard Event, and (ii) adhere to use limitations and regulations (including security measures) that Vail Associates, without obligation to do so, may impose in its ordinary business judgment to prevent any public or private nuisance or protect persons, property and business interests, or in furtherance of any other bona fide purpose. As a part of the re-development of the Ski Yazd, and subject to applicable limitations and regulations of the pertinent utility supplier(s) and matters of record, Vail Associates shall provide an electrical power source and conduit for Ski Yard Events, in a reasonable capacity for such purposes. Vail Associates agrees to consult reasonably with the CSE regarding the location of those electrical improvements. Vail Associates may require that any Ski Yazd User pay Vail Associates reasonable fees, as determined by Vail Associates in the ordinazy course of business, for the use of those electrical improvements, including actual utility charges incurred for electrical consumption. Special event permits, if required by the Town to stage any Ski Yard Event, and any other coordination with CSE required by the Town, shall be the responsibility of the Ski Yard User, and Vail Associates shall have no liability or obligation in connection therewith. (c) As a condition to holding the applicable Ski Yard Event, the requirements under paragraph 5(b) shall be included in a governing written agreement made by the Ski Yard User on terms satisfactory to Vail Associates. Those requirements are solely for the protection of Vail Associates, and Vail Associates will have no obligation to impose those requirements for the benefit of the Town or any other party. The holding of Ski Yazd Events shall not be construed as or constitute any public dedication, in whole or part, of any ownership or other interests in and to the Ski Yard, and Vail Associates shall retain all such interests. (d) The Town agrees to exercise its law enforcement powers in the ordinary course of its governmental operations to the end of regulating Ski Yazd Events in a manner consistent with the Town's prevailing law enforcement practices and policies, and also to assist in implementing any controls or regulations instituted by Vail Associates that aze consistent with the Town's prevailing law enforcement practices and policies. 6. Public Art. Vail Associates will provide $1,000,000 in public art in conjunction with the development of the Front Door Project. Vail Associates will determine the type and location of the art to be provided, subject to obtaining and giving reasonable consideration to input from the Vail Arts Board (the "Art Board"). Such input will be provided at a regularly scheduled public meeting of the Art Board. The Town may require that Vail Associates furnish an initial proposed conceptual plan for the public art to the Art Board prior to the issuance of any building permits for the Front Door Project (for this and other purposes under this Agreement, building permits will not include grading or utility permits or similar approvals authorizing any site work). The timing for the installation of the public art will be incorporated by Vail Associates into the Front Door Project construction schedule in the ordinary course of business and in accordance with generally prevailing construction practices. 7. Employee Housing. Vail Associates will be obligated to provide employee housing sufficient to accommodate nine (9) employees in accordance with presently prevailing Town standards and regulations; however, this employee housing requirement may be initially satisfied by the provision of temporary employee housing facilities in accordance with the terms of the Core Site Development Agreement dated as of November 8, 2004, and made among the Town, Vail Associates and Vail Reinvestment Authority. The provision of employee housing in 680793.RED RCFISH 06/U06 2:53 PM 9 accordance with the foregoing provisions will be a condition to the issuance of any certificates of occupancy for the Project. , 8: Road Impact Fee. The Town acknowledges and agrees that Town requirements for road or traffic impact fees attributable to the Project will be fully satisfied by the completion of the Loading/Delivery Facility and Vail Associates' undertakings in this Agreement for the Off-Site Improvements. 9. .Scope of Obli ations. This Agreement sets forth all public or other improvements, dedications and exactions that may be required of Vail Associates in relation to the undertaking of the Front Door Project, and satisfies all requirements under the Development Approvals and the Town Code (including, without limitation, §§ 13-3-8 and 13-3-14) for the provision of public improvements, dedications or exactions, and related agreements and security, and also for development-related fees (except for ordinary building permit fees and other charges provided for under present Town Code provisions that are not otherwise addressed herein). The 3-yeaz period under Code § 13-3-17, as applied to any plat now or hereafter inclusive of the Property, will be extended as necessary to expire no later than the date that Vail Associates is required to complete the applicable Off-Site Improvements pursuant to paragraph 1 hereof, and will not apply if Vail Associates has provided security in accordance with paragraph 1 for the Off-Site Improvements that remain incomplete. 10. No Obligation to Develop. Notwithstanding any implications to the contrary under the other provisions of this Agreement or under the Town Code or other rules, regulations or standazds of the Town, Vail Associates . (i) does not and will not have any obligation to undertake and develop the Project or any portion thereof, (ii) will have no liability to the Town or to any other party for any failure to develop the Project or any portion thereof, and (iii) will not have any obligation to complete or satisfy any dedications, public improvements or other requirements under this Agreement independently of the commencement and undertaking of the pertinent portions of the Project; provided, however, that once Vail Associates commences the construction of habitable building improvements for any portion of the Project, Vail Associates will be bound to construct and complete the Loading/Delivery Facility in the ordinary course of business. 11. Project Irate ation. The Town confirms and agrees that .the commencement of construction for any one component of the Project will be sufficient to establish common law vested rights for other components of the Project as well as the component being undertaken, notwithstanding that separate building permits may be issued therefor, it being acknowledged that the various components of the Project are designed and intended to form one integrated development, and for this purpose shall not be viewed as sepazate projects or phases. The Town hereby ratifies, re-adopts and confirms the approval of the Development Plan. 12. Liability of Successors. The provisions hereof touch and concern and run with the ownership of the Property; for this purpose, Vail Associates shall be treated as if it is the holder of the ownership interests of LPI in and to portions of the Property, and will be liable for the obligations hereunder that are attributable to those ownership interests of LPI. However, any successor owner to Vail Associates or LPI with respect to any portion of the Property or Project will not have any liability for or be subject to or encumbered by any of Vail Associates' 680793.RED RCFISH 06/1/06 2:53 PM 10 m obligations hereunder, except to the extent such successor (i) succeeds to Vail Associates' position as the owner/developer of the applicable portion of the Project before it is initially completed (as evidenced by the issuance of any certificate of occupancy therefor), or (ii) otherwise accepts an express assignment of and expressly assumes any or all obligations of Vail Associates hereunder by recorded instrument. Upon any record assignment to and assumption by any successor owner of any of Vail Associates' obligations hereunder, Vail Associates shall be released from all further liability for those obligations so assumed (and any assuming successor will in turn have the ability to secure its own release of liability in the same manner pursuant to an assumption by another subsequent transferee). The Town agrees to cooperate reasonably and diligently in furnishing recordable releases and terminations of this Agreement, or for discrete portions of the requirements hereunder, as and when the relevant requirements have been satisfied. Subject to the foregoing .provisions, (i) this Agreement shall. be binding upon and inure to the benefit of Vail Associates and its successors and assigns, and (ii) references herein to "Vail Associates" shall be construed to include its successors and assigns from time to time. 13. Advisory Committee. In the discretion of the Town, an advisory committee may be created to establish a forum for potentially affected parties to propose, critique and make recommendations to the Vail Town Council .concerning operational and management solutions for loading/delivery and vehicular transportation and circulation issues, if any, that arise from the use of the Front Door Project. If established, the committee will be comprised of representatives from the Town (i.e., the Town Manager or the Manager's designee), Vail Associates or its affiliates, and other potentially affected parties. The committee will convene on an "as needed" basis if and when pertinent issues arise. Tlie committee's function will be solely advisory and will be nori-binding in nature; the committee will have no decision-making authority; and the provisions and application of this paragraph 13 will not be construed to impose any obligation on Vail Associates or its successors. 14. Notices; Business Days. Any notice required or permitted under the terms of this Agreement shall be in writing, may be given by the parties hereto or such parties' respective legal counsel, and shall be deemed given and received (i) when hand delivered to the intended recipient, by whatever means; (ii) three (3) business days after the same is deposited in the United States mails, with adequate postage prepaid, and sent by registered or certified mail, with return receipt requested; (iii) one (1) business day after the same is deposited with an overnight courier service of national or international reputation having a delivery area encompassing the address of the intended recipient, with the delivery charges prepaid; or (iv) when received via facsimile on the intended recipient's facsimile facilities accessed by the applicable telephone number set forth below (provided such facsimile delivery and receipt is confirmed on the facsimile facilities of the noticing party). Any notice under clause (i), (ii) or (iii) above shall be delivered or mailed, as the case maybe, to the appropriate address set forth below. 680793.RED RCFISH 06/1/06 2:53 PM 11 If to Vail Associates: c/o Vail Resorts Development Company Post Office Box 959 137 Benchmark Road Avon, Colorado 81620 Attention: Jack Hunn, Vice President of Design and Construction Fax No.: (970) 845-2555 Phone: (9.70) 845-2359 with a copy to: c/o Vail Resorts Development Company Legal Department Post Office Box 959 137 Benchmark Road Avon, Colorado 81620 Attention: Julie Stencel, Esq. Fax No.: (970) 845-2555 If to Town: Town of Vail 75 S. Frontage Road Vail, Colorado 81657 Attention: Town Manager Fax No.: (970) 479-2157 with a copy to: Town of Vail 75 S. Frontage Road Vail, Colorado 81657 Attention: Town Attorney Fax No.: (970) 479-2157 Either party may change its addresses and/or fax numbers for notices pursuant to a written notice which is given in accordance with the terms hereof. As used herein, the term "business day" shall mean any day other than a Saturday, a Sunday, or a legal holiday for which U.S. mail service is not provided. Whenever any date or the expiration of any period specified under this Agreement falls on a day other than a business day, then such date or period shall be deemed extended to the next succeeding business day thereafter. 15. Severability. In the event any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future laws, the legality, validity and enforceability of the remaining provisions in this Agreement shall not be affected thereby, and in lieu of the affected provision there shall be deemed added to this Agreement a substitute provision that is legal, valid and enforceable and that is as similar as possible in content to the affected provision. 680793.RED RCFISH 06/1/062:53 PM 12 It is generally intended by the parties that this Agreement and its separate provisions be enforceable to the fullest extent permitted bylaw. 16. Exhibits. All Exhibits to this Agreement which are referenced by the provisions hereof as being attached hereto are deemed incorporated herein by this reference and made a part hereof. 17. Entire A Bement. This Agreement and the other contracts or agreements specifically referred to herein represent the entire agreement between the parties hereto with respect to the subject matter hereof, and all prior or extrinsic agreements, understandings or negotiations shall be deemed merged herein. The parties specifically acknowledge and agree, however, that all conditions imposed by PEC on the approved Front Door Development Plan will remain in effect except to the extent satisfied or modified by the terms of this Agreement. 18. Esto el Certificate. At any time and from time to time (but upon not less than ten (10) days' prior notice by Vail Associates), the Town shall execute, acknowledge and deliver to Vail Associates and its designees an estoppel .certificate in writing certifying that this Agreement is unmodified and in full force and effect (or if there have been modifications, that this Agreement is in full force and effect as so modified, and stating the modifications); that Vail Associates is not in default of any obligations, conditions or requirements hereunder, except as otherwise specified in the response; and such other matters and information related to this Agreement as may be reasonably requested. Failure of the Town to furnish its response within the requisite 10-day period shall be conclusive upon the Town that the matters requested for disclosure are in the status most favorable to Vail Associates, as determined by Vail Associates. 19. Rules of Construction. The headings which appear in this Agreement are for purposes of convenience and reference and are not in any sense to be construed as modifying the paragraphs in which they appear. Each party hereto acknowledges. that it has had full and fair opportunity to review, .make comment upon, and negotiate the. terms and provisions of this Agreement, and if there arise any ambiguities in the provisions hereof or any other circumstances which necessitate judicial interpretation of such provisions, the parties mutually agree that the provisions shall not be construed against the drafting party, and waive any rule of law which would otherwise require interpretation or construction against the interests of the draftin References herein to the singular shall include the plural, and to the plural shall includeathe singular, and any reference to any one gender shall be deemed to include and be applicable to all genders. The titles of the paragraphs in this Agreement are for convenience of reference only and are not intended in any way to define, limit or prescribe the scope or intent of this Agreement. 20. Town Council Approval. This Agreement shall not become effective until the Town Council's adoption and approval of this Agreement by resolution. As part of that resolution, the Town Council will designate and authorize the Town Manager to execute and deliver this Agreement on behalf of the Town. The effective date of this Agreement shall be the date upon: which this Agreement has been executed and delivered by Vail Associates and so executed as set forth above by the Town Manager. 680793.RED RCFISH 06/1/06 2:53 PM 13 21. Waivers and Amendments. No provision of this Agreement may be waived to any extent unless and except to the extent the waiver is .specifically set forth in a written instrument executed by the party to be bound thereby. No modification or amendment to this Agreement shall have any force or effect unless embodied in an amendatory or other agreement executed by Vail Associates and the Town, with the Town's execution to be authorized by Town Council resolution. However, if, on behalf of the Town, the Town Manager, after consultation with the Town Attorney, determines that any proposed amendment or modification constitutes a minor change, then the Town Manager shall have the unilateral power and authority to execute and deliver such amendment or modification on behalf of the Town and to bind the Town thereby. In any event the Town Manager will have the unilateral power and authority to execute on behalf of the Town and furnish any estoppel certificates, approvals or other documents or communications contemplated by the provisions of this Agreement. 22. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. 23, Additional Assurances. The parties agree to reasonably cooperate to execute any additional documents and to take any additional action as may be reasonably necessary to carry out the purposes of this Agreement. 24. No Third Party Beneficiary. ~ Except for the affiliates of Vail Associates, who are expressly intended to be third-party beneficiaries of Vail Associates' rights hereunder, no third party is intended to or shall be a beneficiary of this Agreement,. nor shall any such third party have any rights to enforce this Agreement in any respect. For all purposes under this Agreement, Vail Associates' "affiliates" will include any corporation or entity which by virtue of direct or indirect majority ownership interests is controlled by; controls, or is under common control with Vail Associates. 25. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original, and which together shall constitute one and the same agreement. 26. Recordine• Third-Party Interests. This Agreement shall be recorded in the real property records for Eagle County, Colorado. The terms of this Agreement, and the relative rights and obligations of the parties, will be subject to and qualified by the effect ofpre-existing titles and interests in favor of third parties pertaining to the applicable properties. 27. No Joint Venture or Partnership. No form of joint venture or partnership exists between the Town and Vail Associates, and nothing contained in this Agreement shall be construed as making the Town and Vail Associates joint venturers or partners. 28. Attorneys' Fees. In the event any legal proceeding arises out of the subject matter of this Agreement and is prosecuted to final judgment, the prevailing party shall be entitled to recover from the other all of the prevailing ,party's costs and expenses incurred in connection therewith, including reasonable attorneys' fees (and the presiding court will be bound to make this award). [Balance of Page Intentionally Left Blank] 680793.RED RCFISH 06/1/06 2:53 PM 14 IN WITNESS WHEREOF, the Town and Vail Associates have made this Front Door Development Agreement effective as of the day, month and year first above written. TOWN: TOWN OF VAIL, a municipal corporation duly organized and existing by virtue of the laws of the State of Colorado By: Name: Title: ATTEST: Lorelei Donaldson, Town Clerk STATE OF COLORADO ) ss: COUNTY OF ) Town Manager The foregoing instrument was acknowledged before me this day of 200 , by as Town Manager of the Town of Vail, a municipal corporation duly organized and existing by virtue of the laws of the State of Colorado. Witness my hand and official seal. My commission expires: Notary Public [Signature Blocks Continue on Following Page] 680793.RED RCFISH 06/1/06 2:53 PM 1$ VAIL ASSOCIATES: THE VAIL CORPORATION, d/b/a VAIL ASSOCIATES, INC., a Colorado corporation By: Name: Title: STATE OF COLORADO ss: COUNTY OF ) The foregoing instrument was acknowledged before me this day of 200_, by as of THE VAIL CORPORATION, d/b/a VAIL ASSOCIATES, INC., a Colorado corporation. Witness my hand and official seal. My commission expires: Notary Public [Joinder of Lodge Properties Inc. follows on next page] 680~93.RED RCF[SH 06/I/06 2:53 PM 16 JOINDER OF LODGE PROPERTIES INC. LODGE PROPERTIES INC., a Colorado corporation ("LPI"), as the owner of certain portions of the Property, agrees that its ownership interests in the Property shall be bound by and subject to the terms of this Agreement, and for that purpose references in this Agreement to Vail Associates will include LPI, but LPI will not have any personal liability for the obligations of Vail Associates hereunder. LODGE PROPERTIES INC., a Colorado corporation By: Name: Title: STATE OF COLORADO ) ss: COUNTY OF ) The foregoing instrument was 200 , by of Lodge Properties Inc., a Colorado corporation. acknowledged before me this day of as Witness my hand and official seal. My commission expires: Notary Public 680793.RED RCFISH 06/1/06 2:53 PM 17 EXI3IBIT A Legal Descrin 'on f the Property PARCEL 1 LOTS 1 AND 2 MILL CREEK SUBDIVISION ACCORDING TO THE PLAT THEREOF RECORDED NOVEMBER 6 2000 AT RECEPTION NO. 743366 COUNTY OF EAGLE STATE OF COLORADO PARCEL 2 LOTS 1 AND 4 SECTION 8. TOWNSHIP 5 SOUTH. RANGE 80 WEST OF THE SIXTH PRINCIPAL MERIDIAN COUNTY OF EAGLE STATE OF COLORADO AS CONVEYED TO THE VAIL CORPORATION BY UNITED STATES PATENT RECORDED APRIL 26 2006 A 1 RECEPTION N0.200610676 . AND ALTERNATIVELY DESCRIBED AS: LOTS 1 AND 4 SECTION 8 TOWNSHIP 5 SOUTH RANGE 80 WEST OF THE SIXTH PRINCIPAL MERIDIAN COUNTY OF EAGLE STATE OF COLORADO AS ESTABLISHED BY THE DEPENDENT RESURVEYS AND SURVEYS COMPLETED BY THE UNITED STATES DEPARTMENT OF THE INTERIOR tt u xr,A U OF LAND MANAGEMENT DATED FEBRUARY 3 2005 LOT 4 AND DECEMBER 30 1988 (LOT 11 680793.RED RCFlSH O6/I/06 2:53 PM r-. ~ ~ \. .. ~ w~ci~owwmns "s' % F •i'' ..~ ~ I r .: _ F+wI • , .~ 1~ ~~ i ..... ~' v .~ - - .. rEtY t 53«, HILL BUILDING 7 '~_ ~•• ONE VAIL PLACE tea `~ _ - Q rr IODGE AT VAIL tt `~ SOUTH LODGE CONDOMINIUMS ..___..,. ~~'~~ ~ _ v . ~ d, ~ rli r~"~~ } ~ - ~b e '~ - BRIDGE ( i>~ ~ rat .yy~ ~'f y 4w '~ - o~v+c s®ur «nc STREET HL ~ r -~ "~i~( ,~'r, ''~.~„ .~,.wnr LODGE .~.'r''.~.,'r.,~: _' ?~,,,~,,, ~.. 2~..i ..a :a -I- -. ~-~~-~i'd6~..~x.Y~~-F - S-i .t'~,-K'~'.`~ ~ ~i ~ ~'i h+-1 _ _ (~ „ 3~-r r ~ ,~-~-m r' 3_ s r - l S '~+Y. a - p ~ ,~ 7 1r1'-1v~1~ ~^^~ } ~ a t~. t~ - w.i .i s ~-; .. F-'I `,~ ''C•~St ./ ~~ ~" ~~a F~ i ~F ~t::"a \. rMKr~ wa r i \ y" ~~ 'd'T' ~ ~~:~ ,r• ~~'{, ~ s•~ . ~ fi~~r~ .. ~ .. .-,.. _ I YAII,AP9OAiS t -~ ~,~ ;~, ,,,~ , : - ~ - I oev~ornrerrr _ .e ~° I ~ mnaMn• :~ kk 4~4!'~p~~ Q - 7 !.J ' ~ ~Ul:fl pRVEAS "Rtowu:m ~~~~ y ~l- ~ 1 ~~(T .- _ I _ _. ®UM(I nAVQ.s-ttEi.TO q2~ Y_ kt - i ~ © Maar~ltfd Z~' s ~ A~ ~ ~ ~:-~. 1 4)~' VAIL ALPINE ;K ~ i f~ SKIER f~652 t ~,. . ~--, maw:. ._.~ ~• ~ ~ 1~ SKI CLUB I SERVICES ~ , ~ .~ ~~rwar-a¢RrEn `YY- ~~~ RESIDENCES " ~,..~t . ~''~'q~ -, f ~~{ ~~~ ~ ~r _ ~ 5 _ ~ _ ivPF~~~vcx~.~rs~ ^___,_ - _ _ . a - r ~ r z _„'"Y'qi' --~ ' _ '~ '~ j ::, I rn ~ m dr_,rcr: m<;xnm. rlc. ar ~ ~. C ~~~`.5 `>>~ ~ {. -~ ~ f ~+~ ~¢vtvm~c6ha11 ~rtpr (o Ne f of ~-`', :'~ ~ ~" 'L 2.S <"~' y YRi :,e`°' ~~i ' ~ ; r-Y§'~ C`,~'~~. - l ~ ~, .. - ~ su~eeimia AT a or ve,wa (aloe ~~ _~ e.- ...~,.~.: s~'f. E ~t ~ ~ .. ~ ~, t-. ~ .. ~ ~ u.as n~ ~a e. 'n.c(ee w,+,.' ara I -~Il~ ~ ~~ ..,r . (~ ~kn~?'•.. - `- ,3: - It r ~a(m eypcn' m +eaede :.vweuw, ~v~... "~`~. .. ,.~Y _ - t ,kc ; '~•~ - .. I :..ee and ~.'~~Nloa.. re.r a ven (p a m,> ,~, ~ 1 rro.5de .m ogane: (o aad eed mo( ( wort . ~ qan ara ate. et ma coehz S 1 d u sqA, epecfiw(wm (e Ee ~Uen `~°~ ~ ~-; ~ .nn ie.e n Slreetzcepe > ~. ~ T / ~ ~ a. Impo.reer+iyey e. Qara ce we W ere .. lerzled .Pr~h• W Fmd \'od - ' I Feapr(e' e6nttyy 1 emptle ieyrowmen(a A ' _ ~ , _ •. ~ ~ euL(ec1 (e Mleq de poperty o. approval. ~tr ! _ y,, F-i Ii L~r."""" ~ ,. Pueuc x _ _- : -_ - mmAO~~1.~ ... - ~ PLM ~.rm H H H x x w ~~ `\ ~ ~ Q ,~,,~ ;~~~ a ~(( ~ ~l vnn. nesOxts OEl'PI.OPa¢2T CO~[PANy 4240 .xcw~crns~ m~~R ~~ _~ s~µ - s~ 1~ Q ~ +* „ o e PUBIIC ID~RO~ffN'I N Pram r r racr~ot~Mel.=rs wFSr SD-1.10 ~~~,~ ~\ EXHIBIT D Depiction of Bicycle/Pedestrian Access (see attached) 680193.RED RCFISH 06/1/06 2:53 PM l~„u 1,{itN: F: Je't' ~ nHfi i':ilL f'All. L, HI H ~H,' L ~~yt,it3 Dill. NISIU)(Sn UNJIbI;F, STIit;P: f ~.U.~l)CE ~~ r' '-~_;? -~ ~ f ~ ; ~ xz c ~)aa) + ~ ! ix ~~ a ~ ~ } ~, ~ ~ t 1 ~ ~ ~ ~ lY'~'~ ~ Y1S'[AUA~IN~BKllj~al~ ~~ ~„ ~ ~.,.•- ~~~~ ~ ~eo.vooBR~~tt.~~- ~~~ ~ i i ., ~ ~ ~ _r ~,,1 t 1 ., ~ ~-~. ,1..~ _-~ -~ - ~= ~ - i~~` ,:` ,d~ .-, ~' ,- - -_ y , ,.\\ J \ ~~ ~.A 3.' ~ . ~ O V' ~L, ~~ ~ ~1. ~~ 1 . ..~ . ~ ~-. ry ~ ~ ~,~ ~~ - ~A ~ ~ _.t- ~~~_ ~ 4 ~. ~~ ~ 1 t ~ .~'~~~~~ t.~~,<-t-`t,c~a•t:u,~oN VArL'S ~RC~~1T DC~C~R vu.zk ,,,~ trail Rcst~rrs !)c~'elopmcnt Cnmrau~• ~J:ut, C:filnre~ln t i tii~n,~,t F ~+J 1 ? ~ rJ?fS S,, Vistabahn Ski Yard Septemh~r $, 2Q03 Amended Conditions of Agnroval (9/22/031 Should the Planning and Environmental Commission choose to approve the three development review applications, as proposed, the staff recommends that the Commission make the following conditions part of the approval: 1. Standard conditions of approval applicable to afl PEC development plan approvals: • That the Developer submits a complete application to the Town of Vail Community Development Department for the review and approval by the Town of Vail Design Review Board of a Comprehensive Sign Program prior to the issuance of a Temporary Certificate of Approval for any of Vail's Front Door Project improvements. • That the Developer submits a complete Design Review Board application, including details of all proposed roof top mechanical systems, to the Town of Vail Community Development Department for. review and approval by the Town of Vail Design Review Board, prior to making an application for the issuance of a building permit for any of Vail's Front Door Project improvements. • That the Developer submits a Construction Staging Plan to the Town of Vail Community Development Department for the review and approval of the proposed staging plan by the Town of Vail, prior to the issuance of a building permit for the Vail's Front Door Project improvements. 2. The Developer provides deed-restricted employee housing that complies with the Town of Vail Employee Housing requirements (Chapter 12-13) for a minimum of 9 employees, and that said housing shall be made available for occupancy, prior to the issuance of a Temporary Certificate of Occupancy for the Vail's Front Door Project improvements. In addition, the deed-restrictions shall be legally executed by the Developer and duly recorded with the Eagle County Clerk & Recorder's Office, prior to the issuance of a Temporary Certificate of Occupancy for the Vail's Front Door Project improvements. 3. That the Developer submits a complete set of preliminary civil engineered drawings of the Approved Development Plans including the required off site improvements, to the Town of Vail Community Development Department for review and approval of the drawings, prior to making application for the issuance of a building permit for Vail's Front Door Project improvements. 4. That the Developer submits a partial topographic map of the alleyway east of the Lodge at Vail to'the Town of Vail Community Development Department. The topographic information shall be used by the Town of Vail and the Developer'to determine the feasibility of providing improved handtruck delivery access to Gore Creek Drive from Founder's Plaza. If it is determined by the Town of Vail and the Developer that proposed improvements are both feasible and advantageous for providing handtruck delivery access to Gore Creek Drive via the Wildflower alleyway, the Developer shall submit a revised set of Off Site Improvements Plan to the Town of Vail Community Developmenf Department for review and approval and further agrees to construct the improvements as approved. _~ 5. That the Developer submits a development application to the Town of Vail Community Development Department requesting approval of a conditional use permit to allow for the operation fora "private and public club", pursuant to Section 12-8E-3, Conditional Uses, of the Vail Town Code. The application for the conditional use permit shall be reviewed in accordance with the provisions of Chapter 16 of the Zoning Regulations, prior to making application for the issuance of a building permit for Vail's Front Door Project improvements. 6. That the Developer identifies a "No Build Area" on the Approved Development Plan indicating that no building or site disturbance shall occur within thirty feet (30') of the proposed westernmost and southernmost property lines in the area of the residential unit construction. 7. That the Developer legally executes all necessary easements and agreements allowing for public pedestrian/bike access through Tract E and the development site from Mill Creek Circle to Vail Road,. public roadway access, drainage, signs, utilities, etc. on and across the development.site. Said easements and agreements shall be submitted to the Town of Vail Community Development Department for review and approval by the Town of Vail. Upon approval by the Town, said easements and agreements (if necessa ry) shall be legally executed by the Developer and duly recorded with the Eagle County Clerk & Recorder's Office, prior to the issuance of a Final Certificate of Occupancy for the Vail's Front Door Project improvements. 8. The Developer agrees to provide to the Town of Vail for review and approval by the Vail Town Council a comprehensive Development Agreement for Vail's Front Door Project improvements. Said Agreement shall be submitted to the Town by no later than.October 31, 2003. The Development Agreement shall be a legally binding agreement between the Town of :Vail and Vail Resorts. The purpose of this agreement is to document, among other things, the manner and timeframes within which the Town and the Developer will complete certain required aspects of the project. The Development Agreement will include, but may not be limited to, addressing the following aspect of the project: • The conveyance of a deed from the Developer to the Town for a parcel of land. under Pirate Ship Park, as depicted in Exhibit A attached. • A written description of all off-site improvements to be provided by the Developer (as generally depicted on the approved development plans), providing additional details on the specific improvements to be provided, the manner in which developer assurances for completion of said improvements will be provided, acknowledgment that design details will conform to the Town's streetscape standards, schedules for completing said improvements, the manner in which the Developer and Town will coordinate streetscape improvement efforts and defining specific terms to determine when and where Checkpoint Charlie will be constructed by the Developer, as maybe amended • .The legal mechanisms to be used wherein the Town of Vail will allow the Developer to construct a portion of the proposed parking structure at P3&J beneath the Town's road right-of-way (as depicted on approved plans for P3&J). • The legal mechanisms to be used wherein the Developer will allow the Town to utilize a portion of its parking and loading structure as a 14bay public loading and delivery facility (as depicted on the approved development plans). • An agreement to be prepared which outlines the Developer's responsibilities for funding $1,000,000 in public art to be provided in conjunction with the Project. This agreement is to be prepared with input from the Town of Vail Art in Public Places Board. • A use agreement to be prepared which outlines the terms and conditions for public use of the Vista. Bahn Ski Yard. This agreement is to be prepared with input from the Town of Vail Commission on Special Events. RESOLUTION NO. 11 Series of 2006 RESOLUTION ADOPTING THE MULTI-JURISDICTIONAL ALL-HAZARDS PRE-DISASTER MITIGATION PLAN FOR THE TOWN OF VAIL; AND SETTING FOR THE DETAILS IN REGARD THERETO. WHEREAS, the Town of Vail (the "Town"), in the County of Eagle and State of Colorado is a home rule municipal corporation duly organized and existing under the laws of the State of Colorado and the Town Charter (the "Charter"); and WHEREAS, the members of the Town Council of the Town (the "Council") have been duly elected and qualified; and WHEREAS, the U.S. Congress passed the Disaster Mitigation Act of 2000 ("Disaster Mitigation Act") emphasizing the need for pre-disaster mitigation of potential hazards; and WHEREAS, the Disaster Mitigation Act made available hazard mitigation grants to state and local govemments; and WHEREAS, the amount of hazard mitigation grants available to state and local governments is contingent upon the adoption of an approved pre-disaster mitigation plan; and WHEREAS, the Town of Vail has applied for and will receive funds from hazard mitigation grants to support development of pre-disaster mitigation; and WHEREAS, the Town of Vail along with the Towns of Aspen, Snowmass Village, Basalt, Avon, Eagle, Gypsum, Mintum, Red Cliff, and Eagle County and Pitkin County, have developed amulti-jurisdictional pre-disaster mitigation plan designed to leverage their common characteristics and planning resources to better prepare for potential hazards; and WHEREAS, the Town of Vail desires to comply with the requirements of the Disaster Mitigation Act and to augment its emergency planning efforts by formally. adopting the Multi-Jurisdictional All-Hazards Pre-Disaster Mitigation Plan for Pitkin and Eagle Counties dated June 1, 2005. NOW, THERFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO: Section 1, the Multi-Jurisdictional All-Hazards Pre-Disaster Mitigation Plan for Pitkin and Eagle Counties dated June 1, 2005, as may be amended from time to time, is hereby adopted by the Town of Vail and shall be applicable throughout the town limits. Resolution No. 11, Series 2006 Section 2, a copy of the Multi-Jurisdictional All-Hazards Pre-Disaster Mitigation Plan for Pitkin and Eagle Counties shall be kept on record at the Eagle County Emergency Management Office and available for inspection upon reasonable notice and request. Section 3, the Council hereby finds, determines and declares that this Resolution is necessary for the public health, safety and welfare of the residents of the County of Eagle, State of Colorado. INTRODUCED, READ, APPROVED AND ADOPTED this 6th day of June, 2006. Rodney E. Slifer, Mayor ATTEST: Lorelei Donaldson, Town Clerk Town of Vail, Colorado Resolution No. 11, Series 2006 t}SC , ~~isitor . ~o~ `vt4 VAILVALLEY Chamber &Tourisin Bureau Your Success Connection VAIL LODGING OCCUPANCY FORECAST Summary of Booking Patterns as of April 30, 2006 Prepared by MTRiP (RRC Associates & Advisory Group), May 18, 2006 This report summarizes selected results of the Vail Lodging Occupancy forecast as of April 30, 2006. The Vail Lodging Occupancy Forecast provides data on booking patterns at Vail lodging properties, for both historic months and the forward-looking 6 months, and as such provides a barometer and advance indicator of overnight stays in Vail. Studv methodology: Fourteen Vail lodging properties, representing approximately 1,468 rooms, participated in this month's lodging occupancy survey: • Destination Resorts Vail • Peak Properties Inc. • Vail Marriott Mountain Resort and Spa • Evergreen Lodge • Prudential Colorado Properties • Vail Racquet Club • Lion Square Lodge • The Lodge at Vail • Vail Spa Condominiums • Manor Vail Resort • Vail Cascade Resort & Spa • Wesiwind at Vail • Montaneros Vail International Condominiums The lodging occupancy survey permits comparisons of lodging activity this year to the same point in time last year, allowing for "pacing" analysis. Moreover, this year's and last year's bookings "to date" can also be compared to last year's historical actual bookings, allowing an understanding of the degree of "fill" achieved to date for occupancy in upcoming months. Vail's occupancy results can also be compared to those at across-section of other mountain communities which are deploying similar lodging occupancy surveys with MTRiP. • Occupancy results: o Vail occunancvpacinq: This period's occupancy pacing shows a mix of strengths and weaknesses, varying by month. After March ended slightly down from last year, April's occupancy increased 35.1 percent over the prior year. Beginning to look into the summer months, May is down 13.0 percent, June is down 20.2 percent, July is up 17.2 percent, August is down 18.4 percent, September is down 3.8 percent, and October is up 17.3 percent. o Vail absolute occupancy rates: Based on 2005 results, Vail tends to experience its highest winter occupancy rates in March (76 percent in 2005) and February (73 percent), followed by January (67 . percent), December (66 percent), April (37 percent), and November (23 percent). Highest summer occupancy rates are typically experienced in July (54 percent), followed by September (48 percent), August (46 percent), October (46 percent), June (38 percent), and May (23 percent). This provides a general indicator of when the community tends to be busiest on a monthly average basis. o -Vail fill patterns: Historical fill patterns for upcoming months provide an indication of the degree to which future business can likely be stimulated. Based on last season's patterns, as of April 30 this year, it is estimated that 28 percent of May room nights had yet to be booked, followed by 22 100 East Meadow Drive, Suite 34 * Vail, CO 81657 ' p. (970)476-1000 ' f. (970)476-6008 www. visitvailvalley. com `,S~ , Vi.titor , C'~. `~cg ,._ s '~. '~ ,2 VAILVALLEY Chamber &Tourism Bureau Your Success Connection percent for June, 46 percent for July, 40 percent for August, 46 percent for September, and 72 percent for October. o Comparisons to ofher mountain resorts Based on MTRIP lodging occupancy data at a cross- section of 13 western mountain resorts, Vail has generally tracked similar to the industry average this winter. Specifically, both Vail and the industry overall were flat in December (0% Vail, 0% industry), up in January (+9% / +10%), and up in February (+3% / +1 %). Vail was weaker than the industry for March (-2% / +1 %), but stronger than the industry for April (+35% / +21 %). Looking ahead to the summer months, Vail is currently trending below the industry average for May (-13% / +16%), June (-20% / +3%), August (-18% / -4%), September (-4% / +11 %), and October (+17% / +19%), but is trending higher than the industry average for July (+17% / +8%). Vail average nightly rate: Average nightly room rates in Vail remained strong throughout most of the winter season, trending up about 4 to 11 percent from last year for November through February, almost flat in March (down 0.2 percent), and up 16 percent in April. Summer average nightly room rates are down between 3 and 8 percent from last year, except July which is up almost 7 percent, and September which is flat. Absolute room rates vary from approximately $130 to $385 during the winter season and $100 to $165 during the summer, generally following variations in demand. * 100 East Meadow Drive, Suite 34 * Vail, CO 81657 * p. (970)476-1000 * f. (970)476-6008 * www. visitvailvalley.com MEMORANDUM May 25, 2006 To: Vail Town Council Stan Zemler Pam Brandmeyer Judy Camp From: Sally Lorton Re: April Sales Tax On the reverse side please fmd the latest sales tax worksheet. I estimate I'll collect another $80,000.00 in April sales tax to bring April collections to $1,234,768.00. If so, we will be up 34.87% or $319,214.00 from Apri12005 and up 23.58% or $235,611.00 from budget. Ski season (November -April) would reflect an increase of 9.4% or $1,071,717.00. April lift tax is up 60.2% or $95,982.00 and the ski season (November -April) reflects an increase of 13.1% or $341,311.00. Town of Vail Sales Tax Worksheet 5/25/2006 MOMh 1995 7996 1997 1998 1999 2000 2007 2002 2003 2006 2005 Budper ?006 COl/BCt%OOS Budget Verience % Chenpe % Change !rom from 2005 Budget January 1,894,597 1,935,782 2,052,569 .2,115,359 2,066,459 2,034,529 2,210,547 2,073,481 1,997,091 2,225,841 2,275,967 2,241,544 2,595,905 354,361 14.06% 75.81% February 1,816,107 1,993,389 2,089,673 2,153,121 2,021,486 2,223,670 2,366,321 2,281,833 2,111,163 2,362,825 2,429,377 2,379,495 2,524,462 144,967 3.91% 6.09% March 2,139,298 2,240,865 2,580,992 2,368,077 2,415,202 2,545,573 2,568,871 .2,699,664 2,372,942 2,344,178 2,785,101 2,360,716 2,846,173 485,457 2.19% 20.56% APril 791,092 966,993 874,427 1,107,334 952,843 926,771 1,043,431 870,875 871,468 992,157 915 554 999 157 1 154 768 , , , , 155,611 26.13% 15.57% Total r, ~~.7~.r a.a 7 ~ -~ ~~:~ ~,i5~,~ 7.?a3 ~'~~1 7.- ;.53u 7,~30,54.t P,.129.170 7 ~ ~;.i35' 7.52 i!r~..l y g hi~l 8 x05 999 7 980 912 9 , , , , , ,121,308 1,140,396 8.51% 14.29% May 324,681 318,920 329,783 382,718 370,864 388,121 448,234' 414,248 428,919 411,595 458,770 414,499 June 590,685 594,907 630,366 633,400 692,811 721,774 751,439 657,707 742,755 732,113 834,913 737,278 Ju~Y 893,483 963,717 1,043,637 1,107,882 1,130,883 1,235,470 1,157,867 1,044,966 1,075,532 1,128,514 1,166,183 1,136,476 August S 867,125 990,650 1,073,430 1,183,926 1,050,004 1,038,516 1,124,275 1,084,318 1,029,446 994,445 993,985 1,001,461 eptember 645,902 630,453 637,831 735,608 806,600 817,313 747,766 713,574 679,208 757,033 795,807 762,374 October N b 461,791 413,573 472,836 515,531 536,204 547,201 486,570 484,425 508,092 532,537 566,173 536,294 ovem er D 611,147 601,208 707,166 656,596 582,260 691,445 571,783 642,293 591,269 623,646 713,117 628,046 ecember 1,994,540 2,068,851 2,254,709 2,070,834 1,883,805' 2,062;205 1,933,940 2,139,417 2,171,098 2,362,095 2,549,032 2,378,760 Total 13,030,448 13,719,308 14,747,419 15,030,386 14,509,421 15,232,588 15,411,044 15,106,801 14,578,983 15,466,979 16,483,979 15,576,100 9,121,308 1,140,396 MARCH 2006 VAIL BUSINESS REVIEW 7bWNOFVAIL June 1, 2006 The March Vail Business Review breaks down the four percent sales tax collected for March and first quarter. Overall March sales tax increased 2.0% with Retail decreasing 3.7%, Lodging increased 2.2%, Food and Beverage increased 4.3% and Utilities/Other (which is mainly utilities but also includes taxable services and rentals) increased 17.5%. The first quarter resulted in a 6.3% increase overall with Retail increasing .8%, Lodging increased 7.3%, Food and Beverage increased 6.2% and Utilities/Other increased 21.3%. Town of Vail sales tax forms, the Vail Business Review and the sales tax worksheet are available on the Internet at www.vail og v.com. You can subscribe to have the Vail Business Review and the sales tax worksheet e-mailed to you automatically from www.vailgov.com. Please remember when reading the Vail Business Review that it is produced from sales tax collections, as opposed to actual gross sales. If you have any questions or comments please feel free to call me at (970) 479-2125 or Judy Camp at (970) 479-2119. Sincerely, n n `~~ Sally Lorton Sales Tax Administrator e March 206 SALES TAX VAIL VILLAGE March March March 2005 2006 Collections Collections Change -1 Retail 5®x,872 492,747 -2.6% Lodging ; 53Ci,260 558,096 5.2% I Food & Beverage 37n,428 397,623 4.8% Other 1 E;,969 15,843 -0.8% Total 1,431,529 1,464,309 2.3% LI®NSHEAD March March March 2005 2006 Collections Collections .Change Retail ~, ~ 179,201 151,427 -15.5% Lodging 331,535 331,153 -d.1% Food & Beverage i 85,756 93,947 8.3% Other I 8,718 8,821 1.2% -- Total 605,210 585,348 -304% ~c~~G~ 1~~~t~ ~~~~~ I~~~i ca~c~~~ v~~~~~~~~ v~~~s,~s~~~~~~~~s~ v,~~~ 0 tl611~~1111 &vll 0 0tl0 X1111 X1011 II Iltlll fill 11 11,rU Y l~l®~~~qa ll~®1111.77 ~A®~~~~1~~®uY~V~~00~ -- U- ~ ~~ . ~®®(~ ~ y ~" I ~~~~~ ~~10°~~ I~~10°~~ ~®®~ ~®®~ ~®~~~c~~~®~11~ ~®0~~~~0®~"11~ ~~'11~ID1'lll~~ __. {~ ~~~~~0 _ ~ c ~~%~ ~ ~9 ~~il~ 1 ~ J 9~ y / ~7~1~o~Q/0 i lWIL0~01L~~~ ~ I ~~~~,I~9~~1~,' Other i I Gl ~~ t c~~°~ ~~~~~% ,9 March 2006 SALES TAX TOT~4L Retail Lodging Food & Beverage Utilities & Other Total March March March 2005 2006 Collections Collections Change ~~199734 886,006 -307% 1,0899956 1,113,789 2.2% ~i46,443 570,093 4.3% :?35,471 276,605 17'.5% 2, ;T91,604 2,846,493 2.0% .t RETAIL SUMMARY March 2005 Collections March 2006 Collections March % Change FOOD 155,153 151,211 -2.5% LIQUOR 36,356 38,509 5.9% APPAREL 123,085 122,366 -0.6% SPORT 452,691 ~ 428,074 -5.4% JEWELRY 40,438 31,084 -23.1 % GIFT 18,402 16,622 -9.7% GALLERY 4,864 7,043 44.8% OTHER 87,907 90,206 2.6% HOME 838 891 6.3% OCCUPATION TOTAL 919,734 886,006 -3.7% March YTD 2006 Sales Tax VAIL VILLAGE March YTD March YTD. March YTD 2005 2006 Collections - Collections . Chan ( Retail - I' 1,251,716 1,289,596 3a0` Lodging 1,351,479 1,4689135 8.6` Food & Beverage 1,045,705 1,113,635 6.5` Other 4Q,564 39,510 -2.6` Total 3,689,464 3,910,876 6.0% L/ONSILIEAD Retail Lodging Food & Beverage Other Total March YTD March YTD March YTD 2005 2006 Collections Collections Change 46~a,362 427,862 -7.5% 87~~,521 947,512 7.7% 254,168 260:;652 26,903 23,025 1,622,954 I 1,659,051 2.6% •~1 X4.4% 2.2% r' 6~I~o°~~ ~l~® ~~~~~ ~`~D f~fil~a°cl~ ~~D ~®®~ ~®®~ °!o C~®D~~c~~a®u~~ C~®~D~~~u®~~ ~~~~~~ ~~~~~~ ~~~y~:~~~JO ~~~9~~~?, ?o~t~A~o pp L~®~~0~~ ~~~~~~4J~ ~' ~~~.~~~ ~o~~/O li lr®®lLll ~g1 i __... {}~j ~p ®1111011 I 1I11 u o~~9~c"S ~A~ U ~'{}9~'Y.i ~j' "61~~;.U BOO ~®it~0 ~'~ ~ 9~~~~9~~~~ ~ 3~, ~ ~~941~~~ ~a41% ~~~ ®(I ~~ lYU~ 11 Cl ~~~c~~ ~~D ~~u°~~ ~~Do ~®®~ ~®®~ ~®~~~~~u®u~~ ~®D~~~~u®u~~ f~e$~iu~ a ~~~~~~~, '~ ~~, L~®~9~ao~~ ~~9~~~ ~~,~~~ ~~~Y ~114~R~~ ~y~~~~ '~i'y ~(~v. ~Jll~~~ll~~iay ~ ~ ~~~~i'~9~~~ G/ ~~~r9~~~) ®ll~~~ 6~1~o°c~~ ~~D ~I~a~~ ~ ~--- , ~~ o °c~o~ o ~~~°~® '~ ~} ~ ~ ~~O ~~~o~ ®/A __ --- ~~ao~% IVlarch YTD 2006 Sales Tax TOTAL Retail Lod i n ~ 9 9 food & beverage Utilities & Other Total March YTD 2005 Collections 2,3599969 March YTD 2006 Collections 2941©,060 3,D9®,065 19645,464 521,234 March YTD _ Change ~ie~°/O 7.39/° 602% 2103% 1,549,254 67fr,996 794J7,092 7,967,626 6.3~ e RETAIL SUMMARY March YTD 2005 Collections March YTD 2006 Collections March YTD % Change FOOD 427,842 437,625 2.3% LIQUOR 102,407 107,853 5.3% APPAREL 318,367 323,120 1.5% SPORT 1,108,667 1,129,768 1.9% JEWELRY 100,058 85,509 -14.5% GIFT 48,855 46,090 -5.7% GALLERY 15,78$ 20,214 28.0% OTHER 265,563 257,509 -3.0% HOME 2,442 2,372 -2.9% OCCUPATION TOTAL 2,389,989 2,410,060 .8% ~ A Leading Provider of Integrated Communications Services in 26 states The 8th Largest ILEC in the US Over 32,500 Miles of Fiber Robust Metro CLEC Operations Listed NYSE "CTL" & Member of S&P 500 Index $2.5 Billion Annual Revenue and 7,000 Employees + Pursuing Aggressive Broadband Deployment and Market Penetration + Stable -Generating Excellent Revenue Growth and Cash Flow Margins + Focused on Anticipating and Meeting Our .Customers' Communications Needs __ CenturyTel Is.... Twelve Months Ending Dec. 31, 2005 2000 Revenue Operating Cash Flow Operating Income Free Cash Flow 5-Y r. CQGi R $2,479.3 $ 1 ,845.9 6.1 $1,274.2 $ 943.5 6.2% $ 742.3 $ 580.3 5.0% $ 463.3 $ 196.9 18.7% In thousands Excluding nonrecurring items, as adjusted for goodwill amortization Five Years of Growth •~•••~•w•••~•••••••w~••~••••!•••••••••••~••• __ Cash Flow Generation ($MM} Cumulative FCF 2, 500 2, 000 A AAO 1, 500 y , 000 500 ~ ~ ~ ~ ~ ~ a •~•i~~•••••~•••••••••••i•••~••!•••••~i•~••••• +Geographically Clustered Markets in Rural Areas and Smaller Cities +High Quality, Broadband Capable Networks + Fiber Transport Operations + Flexible Communications Service Bundles to Customers +~ignificant Firoancial strength and strong Cash Flows CenturyTel is Well Positioned •~•••••••~••••~••••~•s••~•••s••••s•~•••~•••• Broadband...0ur Platform for Growth Products/ Services (Future) Products/ -Gigabit Ethernet -DIA Services -Transport -Frame Relay (Today) -High Speed Internet -IP over Bonet -LAN/WAN -Integrated T1 H~l~e ®1 ~~~ ~ €~,.F ,~ ,, fPs~, ~z -Wireless -Core Networks -OC48(DWDM) Con=s ~ ~~ ~~ ~er/ S~mtall Y ~~ ~~u s We Will Continue to Move up the Pyramid to Offer Solutions Platforms -Fiber -Metro Rings (Capital -Copper -MPLS Investments) -Bonet -DSL •!•A•••••••••••••••••••••••••••••••••••••••A Residential Segment: 1. Young Adults 2e Families Current Product-Based Wireless High Speed Internet Unlimited Long Distance Video wireless -multi Handsets DSL /Home Networking Features /Unlimited Long Distance Security Video Future Solutions-Based L/dVireless Bundle ta/Video Bundle Mega Bundle V®® L®fFRlireiess ill/ireless ®ata Bf~ Come ~Negworking Wireline Low cost Long- Distance Security pacC~age Security:. Email access D'oal up ~ 2^d Done Video ~.. _. ._... _. _ _ _. __.J Residential Solutions Roadmap Business Solutions Road ma p Current Future Business Needs: Product-Based Solutions-Based 1. Enable internal applications and networks Business Lines Long Distance ISDN DSL @lo6ce ServBces 2. Integrate multiple locations and networks 3. Empower virtual workforces 4. Manage applications and networks externally Frame Relay T1 Private Line L~G\9/~il~Gl9 f~rivate L~V~/F~lc~l~ ~3osteol ~P~ o-~-Basea;9 ~~~ CI!!u-f~i SoVao4ioavs 4~a~vage~l Services Bandwidth Requirements 64 K 1.5 MB 10 MB 1GB ~- - --- - - - --J Wholesale Solutions Road ma p Current Future Business Needs: optical IP Based 1. Long Haul Connectivity Optical Bandwidth DSx - OCx m [end to lend IP li!!li PLS flliultuple GB I~andwid4lh Concaectidity MPLS IP Network 2. Metro Connectivity 3. Switched Services Optical Bandwidth DSx - OCx None VUVanaged SePVices ~P Switched Se~ices ~andnridth Requirements DS3 OC192 Multiple GB •a•i••••••••••••••••••••••••••••••••~••••••• + Provides a unique opportunity for affordable broadband for Va i I residents, businesses, and visitors. + Enables cost savings and increase efficiencies for the municipal government. + Introduces new otentia I applications enabled by wireless tec nology for all users of the network. + Technologies and service partners with a proven track.record as world-renowned leaders and visionaries enabling next generation wireless broadband networks. A Town Wide Wireless Network Highlights + No capital will be required from the Town of Vail in the deployment or operation of the network. + 5% Revenue Share with the Town of Va i I. + Free Internet access at the speed of u to 300Kbps wi I I be available town -wide ensu ri ng a orda ble access for visitors to the Town of Vail. + Multiple options available beyond RFP requirements up to 100MB. + Members of the municipal workforce will have free access to the Internet and Town of Va i I private network + The deployment wi I I be completed prior to fa I I of 2006 with the support of the Town of Va i I for zoning, perm its, and site acquisition. •••••••••••i••••••••••~••••••••••••••••••••• Personal Commitment CenturyTel will devote all of the necessary resources to ensure that this is a system that the Town of Vail and CenturyTel will be proud to showcase. •~••••••••••••••••••••••••••••••••••••••i•••• Q&A