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Council approves amendment allowing Uplands districts to form special-improvement districts
Summary
Westminster adopted a first amendment to the Uplands Metropolitan Districts’ consolidated service plan to permit special improvement districts (SIDs). The amendment includes guardrails requiring assessment liens be cleared before certificate of occupancy is issued.
The Westminster City Council on July 14 adopted Resolution No. 9 approving a first amendment to the consolidated service plan for the Uplands Metropolitan Districts Nos. 1 and 2, authorizing the districts to form special improvement districts (SIDs) to finance localized public improvements.
The amendment gives the district authority to create SIDs—geographic subsections that can issue tax-exempt, assessment-backed bonds for improvements that directly benefit properties inside the SID. Paula Williams, counsel for the districts, told council the amendment includes a requirement that any special-assessment lien be paid off before the issuance of a certificate of occupancy, a safeguard designed to prevent assessments from passing through to homeowners.
John Colstow of Piper Sandler explained the investor market for such bonds: they are typically purchased by institutional investors that buy large funds, such as investment managers handling retirement and other pooled capital. He described SID bonds as lower-cost capital relative to private financing in higher-rate markets. “Most of our investor base would be those folks,” Colstow said.
Council members pressed on how liens would work if a project stalled; Williams said the bondholders’ lien would be foreclosable and noted the risk resembles that of private construction financing. The applicant said SIDs would be used for localized internal improvements—internal roads, landscape and open-space features or internal utility lines—rather than major trunk infrastructure, which the district has financed with tax-supported bonds.
The resolution passed on a 6-1 roll-call vote. City staff and outside counsel had previously reviewed the application for consistency with Title 32 and the city’s special-district policy, and planning and legal advisers recommended approval with the described safeguards.
Next steps: If the district moves forward with an SID, the specific improvement list and a benefit study would be prepared, and proposed assessment liens would be structured so they must be cleared prior to issuance of certificates of occupancy for affected lots.
