DILLON MOVES AHEAD ON MARINA UPGRADES

Town Hall Used As Collateral for $2.2m Financing Deal

DILLON -- Dillon Town Council members weathered the snow storm
Tuesday to tackle a flurry of agenda items.

Council approved $2.2 million of financing for phase one of the
Marina Master Plan, banned medical marijuana businesses within town
limits and authorized construction of a temporary wall to reopen
Little Beaver Trail to one lane of traffic this winter.

Dillon Marina financing

Council unanimously approved an ordinance to finance the first phase
of the Dillon Marina Master Plan to improve one of the town's main
assets. The first phase will expand the shoreline to allow for more
dry storage and better flow of traffic. The improvements are expected
to boost revenue to help the marina pay for the project.

The town will issue certificates of participation to raise $2.2
million on behalf of the marina. Town Hall will be used like
collateral on the deal, similar to an individual taking out a line of
equity on a home. The certificates will be purchased by Alpine Bank
via UMB Bank, the trustee. The town will then pay back the debt over
20 years at a 4.65 percent interest rate with annual payments of $170,153.

The practice is common in Colorado, as it's the only way a town can
incur debt without voter approval, said Dillon Town Manager Devin
Granbery. Frisco used a similar financing vehicle to help fund its
marina and the Frisco Adventure Park project, according to its town
manager, Michael Penny.

An emergency ordinance was used to speed up the process so the town
could lock in a good interest rate; also a common practice with this
type of financing, Dillon finance director Carri McDonnell said.
Emergency ordinances require a super majority five votes to pass, but
do not require a second reading or the standard 30-day waiting period
for financing ordinances.

Town staff estimated the first phase of the Marina Master Plan would
cost $2 million, but the only bid for the project came in for $2.6
million. Granbery said staff considered re-bidding the project, but
in the meantime the town would work with the contractor to lower the
cost. The overall scope of the project will remain the same, but
certain aspects could be delayed and financed in cash from the marina budget.

"All council is considering is what the marina can afford," Granbery
said prior to the vote.

Council unanimously approved a resolution for the marina to pay cash
from its budget to cover $26,000 in fees for legal services
associated with the financing. Council also approved a resolution for
Smithgroup JJR, Inc. to begin work on slope stabilization and
installation of a storm water detention system at the marina in the
amount of $49,666.

Medical marijuana business banned

Council approved the second reading of an ordinance to ban medical
marijuana businesses within town limits by a margin of 5-2. No one
testified at the public hearing, and the ordinance will now become law.

The town has no medical marijuana businesses within town limits and
has a moratorium on the issuance of business licenses to medical
marijuana businesses. The prohibition can be overturned at a later
date should council elect to pass an ordinance to regulate the
industry within town limits.

Under the direction of town attorney Mark Shapiro, council opted to
remain on the "trailing edge" of the medical marijuana debate. Only
Mayor Ron Holland and Councilwoman Lucinda Burns voted against the
ordinance, as they hoped to regulate the industry rather than prohibit it.

Little Beaver Trail

On the same day Dillon reopened Little Beaver Trail to the public for
an emergency, council unanimously approved a resolution to authorize
construction of a temporary wall to open the road to one lane of
traffic through the winter.

Residents of Dillon Valley eagerly await the reopening of Little
Beaver Trail, as it represents one of only two entrances to the
neighborhood. The road has been closed since May as a result of a
retaining wall failure that led to a landslide of debris onto the road.

The temporary wall project was awarded to the lowest of three
bidders, Silverthorne-based Columbine Hills Concrete, in the amount
of $34,870. The construction firm will install six 20-foot long
shipping containers at the toe of the mudslide with a gravel drainage
layer underneath for storm water detention.

Once the wall has been constructed, the town will set up traffic
signals on either side of the affected area to allow traffic to
alternate through the single lane. The town hoped to open public
traffic to two lanes, but engineers determined such a setup was not feasible.

Columbine Hills Concrete cannot begin the project until Denver
construction firm Hayward Baker completes work on a lock and rock
anchor system to secure the Walgreens building above the slope. That
project is expected to be completed later this week, and Columbine
Hills Concrete will work through the weekend to install the temporary wall.

Construction on a permanent fix will begin next spring, and Little
Beaver Trail will close to all public traffic for an additional three
to four months.

Council also unanimously approved a resolution to waive the winter
construction prohibition in the town's municipal code for excavation,
grading and utility construction on the Walgreens site to allow for
the installation of a storm drain and a fire hydrant. Without these
utilities, Walgreens would be forced to close for the winter.

Other issues

Council voted 6-1 on the second reading of an ordinance to update its
fees for 2011. Councilman Geoff Schmidt voted against the measure
because he believes the town's water fee structure does not
accurately reflect water usage.

A resolution to allow the Old Dillon Reservoir Authority to join the
Colorado Intergovernmental Risk Sharing Agency was unanimously
passed, and council consented to attorney fees for 2011 at a standard
rate of $170 per hour.